National Trustees Executors & Agency Co of A/asia Ltd v Commissioner of Taxation - [1954] HCA 71 - HCA 1954 case summary — Zoe

CTHHCA

National Trustees Executors & Agency Co of A/asia Ltd v Commissioner of Taxation

[1954] HCA 71

High Court of Australia|1954-07-01|Before: Taylor JJ, Fullagar J, Kitto J

View original source

At a glance

Source facts

Court

High Court of Australia

Decision date

1954-07-01

Before

Taylor JJ, Fullagar J, Kitto J

Source

Original judgment source is linked above.

Judgment (83 paragraphs)

[1]

High Court of Australia Dixon C.J. McTiernan, Fullagar, Kitto and Taylor JJ. National Trustees Executors & Agency Co of A/asia Ltd v Commissioner of Taxation (Cain's Case) [1954] HCA 71

[2]

ORDER Questions in the case stated answered as follows: -

[3]

On the argument of this case stated I formed a definite opinion that the appeal out of which it arose was bound to succeed on the simple ground that the appellant had before the making of the assessment for estate duty "made to the commissioner a full and true disclosure of all the material facts necessary for the making of the assessment", within the meaning of those words in s. 20 (2) of the Estate Duty Assessment Act 1914-1947, with the consequence that the condition precedent to the only relevant power of amendment possessed by the commissioner was not fulfilled. Four months before the date of the assessment the solicitors for the appellant executor wrote a letter to the respondent commissioner which appears to me to give the latter all the information there was to be had as to the deceased's title to participate in the distributions made by the Australian Wool Realization Commission under the Wool Realization (Distribution of Profits) Act 1948, namely that the appraised value of his participating wool was £45,295 2s. 2d. It is true that the letter is expressed as advice of an additional asset consisting in the receipt by the executor of the first dividend of six and one quarter per cent amounting to £2,830 18s. 10d. So to describe the dividend implies a legal misconception. But that is not material; the disclosure of fact was there. Nor is it material that the commissioner shared the misconception. The letter conveyed all the information needed by the commissioner or possessed by the executor. In order to fix upon an estimate of the present value of the deceased's distributable share as at the time of his death, it might be necessary for the commissioner to form some anticipatory opinion of the amount of the fund that was likely to arise in the commissioner's hands and become available for distribution. But on that question the executor could know no more than the commissioner. So far as it could be guessed at, by anybody outside the Wool Realization Commission, it depended upon public general information. The deceased's title to share in the distribution of the fund in respect of the participating wool he had submitted for appraisement depended, of course, entirely upon the Wool Realization (Distribution of Profits) Act 1948. The commissioner perhaps knew more about that than the executor but in any case it is a matter of law not fact. There were therefore no facts of which full and true disclosure was not made to the commissioner.

[4]

This conclusion means that to determine the appeal it is not necessary to decide the question whether the value of the deceased's title to share in the distributions under the Wool Realization (Distribution of Profits) Act 1948 formed part of his personal property within s. 8 (3) of the Estate Duty Assessment Act 1914-1947. But it is doubtless an important question and I agree that we should express our opinions upon it. Mine may be stated very briefly indeed, for I have had the advantage of reading the reasons prepared by Fullagar J. and those prepared by Kitto J. The two judgments are to my mind in complete harmony and I desire to express my general agreement with both of them, not only upon the question whether the title of the deceased to share in the distribution of the wool profits formed property, but also on the question of the competence of the amendment. All I desire to say for myself on the former question I can add in a few sentences. I think that the Wool Realization (Distribution of Profits) Act 1948 created in suppliers of participating wool what may properly be called a title to share in the distributions afterwards to be made. I use the word "title" as a convenient way of referring to the existence of certain vestitive facts which are prescribed by law as giving rise to an advantage which the law creates for the enjoyment of given persons whom it specifies by reference to such facts. In other words the statute here states certain conditions the fulfilment of which will, when the course prescribed by its provisions is followed, result in the receipt of a dividend in the distribution calculated in a specified manner. The existence of the prescribed facts raised at least a valuable expectation and the expectation depended on the statute. It may be said generally that an interest protected by law amounts to a right and certainly the deceased's expectation was an interest capable of forming a right of property, if protected by law. How the law protects an interest is not so important as the recognition which the law gives to it as something which the law intends to be enjoyed. The question seems to me to be whether the statute does mean to give, as from the commencement of the Act, an interest protected by its provisions to the suppliers of participating wool.

[16]

These observations bring to the forefront of the case the provisions of the Wool Realization (Distribution of Profits) Act 1948 and immediately raise the question whether they conferred upon the deceased a right to participate in any future distribution of surplus profits which might properly be classified as property. Several of the provisions of the latter Act have already been the subject of judicial consideration and it is unnecessary to refer to them in great detail. But it is of importance to notice some of the fundamental provisions of the Act. In the first place it is of importance to observe that Pt. III - "Persons Entitled" - contains provisions for ensuring that any payments made shall be made, primarily, to the persons who supplied the participating wool for appraisement. We say primarily because special provision is made, inter alia, for cases where any such person has, since supplying wool of that character, become bankrupt or has died or, being a company, has become defunct. In the case of a person who has died any amount which would otherwise be payable under the Act to that person is to be payable to the personal representatives of that person and, by sub-s. (b) of s. 11, the rights, duties and liabilities of the personal representatives in respect of any such amount are to be the same as if it were part of the proceeds of a sale of the wool by the deceased person made at the time of the supply of the wool for appraisement. Similarly where participating wool was supplied for appraisement by a partnership which has been dissolved, any amount which would otherwise be payable under the Act to the partnership may be paid by the commission to any former partner or partners and, by sub-s. (3) of s. 10 where any such amount has been paid pursuant to the last-mentioned provision the rights, duties and liabilities of the person to whom it is paid in respect of the amount are to be the same as if it were part of the proceeds of a sale of the wool by the partnership made at the time of the supply of the wool for appraisement. At first sight it may appear that the terms of s. 11 (b) dispose of the question in this case. This would be so if the provisions of that sub-section require, in the fullest sense, that the payments made to the deceased's executor be regarded as being made in satisfaction of an obligation to account for the balance of the proceeds of a sale of the subject wool made by the deceased at the time of the supply of the wool for appraisement. In those circumstances the payment would, in law, be in discharge of a debt owed to the deceased at the time of his death. But this view of the effect of s. 11 is not open in view of the decision of the Judicial Committee in Perpetual Executors Trustees & Agency Co. (W.A.) Ltd. v Maslen [1] and Federal Commissioner of Taxation v Squatting Investment Co. Ltd. [2] . In the former case the Judicial Committee was concerned with a deed of assignment by which one of two former partners purported to assign "all his right title and interest in (d) the benefit of all contracts and engagements and book debts" to which he and his former partner might be entitled in connection with the former partnership business. The partnership had during its currency supplied participating wool and one question which arose was whether, having regard to the provisions of s. 10 (3), the view should be taken that a subsequent payment in the course of a distribution of surplus profits should be regarded as a payment in discharge of a debt existing at the time of the assignment and appropriately described by the language of the deed of assignment. The Judicial Committee held that it should not be so regarded and if the true basis of that decision is not made clear by the reasons in that case it is made abundantly so by their Lordships' reasons in the second of the two cases to which we have referred. In our view the basis of the decision in the former case is quite clear and our somewhat tentative observation is made merely in view of the argument which was advanced to their Lordships by the respondents in the latter case. In Maslen's Case [1] their Lordships stated the competing contentions of the parties and pointed out that the respondents' argument depended upon the effect to be given to s. 10 (3). The relevant contention of the respondents and their Lordships' conclusion is stated in the following passage: -

[23]

These passages appear to us to be direct authority for the proposition that the provisions of s. 11 (b) do not operate to create, retro-spectively, a debt which must be deemed to have arisen at the time when wool was supplied for appraisement. Indeed it would be strange if the legislature, in enacting ss. 10 (3) and 11 (b), intended to produce such a result with its obvious consequence in the case of partnerships which had been dissolved or persons who had died before receipt of payment made in the course of distributions under the Act and yet made no such provision in respect of that general class of persons who by surviving to the date of any such distributions would become entitled to receive their payments pursuant to the provisions of s. 7. Perhaps it may be said that if the legislature intended that payments made in the course of any distribution should be regarded as having been made in discharge of obligations arising at the time of the supply of participating wool and existing from then until the date of payment some provision appropriate to produce this result might have been inserted in or in relation to s. 7 and that, if this course had been adopted, there would have been no necessity thereafter to make special provision for the death or bankruptcy of any supplier after the date of supply and before payment. In such circumstances the interest, retrospectively created, of any such person would be regarded as devolving upon his trustee in bankruptcy or his executor or administrator as the case might be. There is, we think, no doubt that the provisions of s. 11 (b) operate only to impress the amount of payments, when made, with a particular notional character in order that the legislature's intentions with respect to the beneficial destination thereof might be effectuated and, in our opinion, the two decisions of the Judicial Committee to which we have referred are authority for this proposition. It should be observed that the subject matter which assumes the specified character is the amount which is paid to the legal personal representative and that specified character is assumed only when it is paid. The sub-section does not purport to create any antecedent right to receive payment or to invest with any specified character the right to or expectation of payment which may be said to arise from other provisions of the Act. Accordingly no support for the impeached assessment can be obtained from its provisions.

[25]

"No doubt this expression is of the widest character and covers every form of personal property recognized at law or in equity, every possible interest including all choses in action. But it cannot be satisfied unless some right cognizable at law or in equity exists in the deceased. An expectation, however well founded in fact, and however well warranted by political or business considerations, will not do, if it is devoid of legal title" [1] . We respectfully agree with these observations and it is with their significance in mind that the other provisions of the Wool Realization (Distribution of Profits) Act must be approached and considered. But before going to them it is convenient to make two other preliminary observations. The first of these is that it is clear that before the passing of the Act no supplier of participating wool had any right or interest in the future surplus profits which could, upon any meaning of the term, be classified as property. Commissioner of Stamp Duties (N.S.W.) v Perpetual Trustee Co. Ltd. (Watt's Case) [2] is clear authority for this. The facts of that case showed, to use again the language of Dixon J. (as he then was) in Thomson's Case [3] that: - "The antecedent certainty that the deceased in that case or his estate would participate in the profits in question could not have been greater if it had rested on legal right, but it did not, and as the distribution was made after his death the share received by his executors formed no part of his dutiable property" [4] . The other preliminary observation which we wish to make is that the question whether the Act, the operation of which commenced before the deceased died, conferred upon the deceased in his lifetime any right or interest in the nature of property must be considered quite independently of those events which occurred after his death. For if the Act conferred some such right or interest upon him it would be of no consequence in reaching that conclusion that no surplus profits subsequently accrued or that no payments out of ascertained surplus profits were subsequently made. Likewise if the Act did not confer any such right or interest upon him in his lifetime it would be quite immaterial that later events showed that if the deceased had survived he would have received substantial payments, or that, not having survived, other persons received payments pursuant to the special provisions of s. 11. In the latter case the payments or the beneficial interests in them would be received by such persons not by way of devolution from the deceased but in substitution for him.

[27]

The Act is expressed to be an Act to provide for the distribution of any ultimate profit accruing to the Commonwealth under the Wool Disposals Plan, and for other purposes. As a condition precedent to any distribution s. 5 provides that as soon as practicable after the wool disposals profit has been ascertained, the Treasurer shall notify the amount thereof in the Gazette , and the amount so notified shall, for all purposes of the Act, be the amount of the wool disposals profit. The provisions of s. 6 authorize what may be called interim distributions after the making of a declaration by the Minister for that purpose with the approval of the Treasurer. Thereupon s. 7 provides that, subject to the Act, an amount equal to each declared amount of profit shall be distributed by the commission in accordance with the Act. The general basis of distribution is prescribed by sub-ss. (2) and (3) of s. 7 and those subsections are in the following terms: - "(2) There shall be payable by the commission, out of each amount to be distributed under this Act, in relation to any participating wool, an amount which bears to the amount to be distributed the same proportion as the appraised value of that wool bears to the total of the appraised values of all participating wool. (3) Subject to this Act, an amount payable under this Act in relation to any participating wool shall be payable to the person who supplied the wool for appraisement". Part IV of the Act deals with the general method of distribution but it is not necessary to refer to those provisions in detail. That Part deals with the preparation of a list of those persons who, in the opinion of the commission, are entitled to share in distributions under the Act and with the obtaining and recording of relevant information. Section 28 provides that no action or proceedings shall lie against the commission or the Commonwealth for the recovery of any moneys claimed to be payable to any person under the Act, or of damages arising out of anything done or omitted to be done by the commission in good faith in the performance of its functions under the Act, while s. 29 provides that subject to the Act and the regulations, a share in a distribution under the Act, or the possibility of such a share, shall be, and be deemed at all times to have been, absolutely inalienable prior to actual receipt of the share, whether by means of, or in consequence of, sale, assignment, charge, execution or otherwise.

[28]

These provisions, it is said by the respondent, were enacted at a time when it was apparent that large surplus profits would be available for distribution and it was with this circumstance in mind that the Act was passed. We take this to mean that at the time the Act was contemplated and passed it was not merely possible but practically certain that there would be surplus profits available and that the Act was intended to provide for their future distribution in some equitable manner. With this statement we agree but it leaves untouched the vital question whether the Act conferred upon the deceased in his lifetime any right or interest in the nature of property. Whether or not it did this can be ascertained not by an appreciation of the general purpose for which the Act was passed but by an examination of the provisions of the Act itself. The question is did the Act during the life of the deceased vest in him any right or interest which could, properly, be described as his "personal property"? Counsel for the respondent did not, of course, baulk at this inquiry but rather sought to examine the Act in the light of his general statement as to its purposes and we have merely paused in order to indicate that consideration of its general purposes will not help in determining the particular question involved. Consideration of the provisions of the Act lead us to the view that it did not, and did not intend, to create, immediately, private rights of any description. We agree, of course, that in the circumstances in which it was passed it produced a situation in which the certainty that the deceased or some other person in substitution for him "would participate in the profits in question could not have been greater if it had rested on legal right". But the Act created this certainty, not by creating present rights, but by providing that the surplus profits when ascertained and after an appropriate declaration should be distributed. In the meantime, the expectation of the supplier did not, as far as we can see, present one single attribute of "a right cognizable at law". The fact that it was not open to a supplier to secure a share of any undistributed profits by legal process may not, of itself, be of great significance for many illustrations may be given of "property" which does not possess this attribute. A classic illustration is the proprietary interest of an owner of chattels which will continue to subsist although he is not in possession of them and his right to sue for their recovery has become statute barred. Nevertheless, he is still the owner of them and may assert his right as owner by retaking possession of them (cf. Williams on Personal Property, 16th ed. (1906), at pp. 28, 29). Other interests not enforceable by action, such as foreign government securities, are so much a subject of trade that it would be idle to deny that a holder, being possessed of a saleable commodity, is not the owner of property. It should, perhaps, be mentioned that the absence of a right to resort to legal process is not a feature of a Commonwealth Government security (cf. McGrath v The Commonwealth [1] ) and the creation of securities which do not afford such a right would be regarded in the Commonwealth, at least, as unusual. Many other illustrations may be given but in each one it will, we think, be found that the interest under consideration possesses, at least, some of the attributes of "property" which are capable of enjoyment by the owner.

[29]

The case of the respondent would, we think, be stronger if upon consideration of s. 7 of the Act alone, it were assumed that its provisions conferred a right upon every person who had supplied participating wool for appraisement. On that hypothesis it might be said that the provisions of ss. 28 and 29 do not annihilate the right previously given. We think, however, that this is not a permissible approach to the question whether the Act operated to create interests in the nature of "property" and that this question can be determined only upon a fuller examination of the provisions of the Act. In any such examination ss. 28 and 29 must be considered, not for the purpose of determining whether their provisions annihilate a right previously given, but for the purpose of determining whether the effect of the legislation was to create rights at all. As we have already said the expectation of a person who had supplied participating wool for appraisement bore none of the indicia of "a right cognizable at law". It did not confer any benefits capable of enjoyment; it could not be disposed of or charged and upon the making of any distribution after the death of the supplier the appropriate payment would be made to his legal personal representatives. The provisions of s. 11 were designed to operate in respect of payments made after the death of a supplier, even if he had in his lifetime purported in the clearest language to dispose of his expectation otherwise. Further, his expectation was not property for the purposes of judicial execution, nor would it pass, upon bankruptcy, to the official receiver. It is true that, with significant exceptions, s. 9 makes provision for payments to be made to the trustee in bankruptcy if, at any time after the supply of participating wool for appraisement, the affairs of the supplier have been administered in bankruptcy, but this consequence follows as the result of the special provisions of the section and not because the expectation is "property of the bankrupt". Indeed, it seems that the provisions of s. 9 would operate notwithstanding an order of discharge under s. 119 of the Bankruptcy Act 1924-1950 and in spite of the provisions of s. 91 of that Act insofar as they specify that the property of a bankrupt divisible among his creditors shall include all property which belongs to or is vested in the bankrupt, or is acquired by or devolves on him before his discharge. Section 10 makes special provision for other cases. Where the supplier was a company which has become defunct the payment which otherwise would be made to the company is to be made to "such person as appears to the commission to be justly entitled to receive it". The exercise of the discretion conferred by this section appears to us to be inconsistent with the proposition that prior to its dissolution the expectation which the company had enjoyed constituted its "property" in any sense. Considerations such as these lead us to think that it would be erroneous to say that s. 7 created rights "cognizable at law" and that the succeeding sections did no more than make appropriate provision for the devolution and transmission of the "property" of the supplier of participating wool for appraisement. In our view the Act did not create interests in the nature of property and did not purport or intend to make provision for devolution and transmission of the interest of a supplier. Rather it declared the policy of the legislature with respect to such surplus profits as might arise and, in doing so, selected, primarily, as the objects of any future distribution, the suppliers of participating wool for appraisement whilst, in the circumstances respectively specified in ss. 9, 10 and 11 the provisions of those sections were designed to take effect in substitution for the provisions of s. 7. In these circumstances we find it impossible to regard the expectation created by the Act as property for the purposes of the Estate Duty Assessment Act. Such an expectation was not, so far as we are able to see, property for any other purpose and we can see no reason why it can be so regarded for the purposes of that Act.

[32]

Some reliance was placed by the appellant on s. 11 of the Act of 1948. I might have felt more difficulty over that section if I had not found occasion to consider it alongside s. 10 (which was the then immediately relevant section) in Maslen v Perpetual Executors Trustees & Agency Co. (W.A.) Ltd. [1] . I then formed the view, which I have seen no reason to change, that the effect of s. 11 (b) was that the executor or administrator received the deceased person's share of the wool profit as executor or administrator, and was required to deal with it as part of the deceased person's estate. As from the moment of receipt it was to assume in the hands of the executor or administrator the character of the proceeds of a sale of wool in the lifetime of the deceased. It would be available for payment of the debts of the deceased. I thought that it might have been specifically bequeathed by will, s. 29 applying only to dispositions inter vivos. I thought also that it would pass under a general bequest of personalty, and that, in the case of an intestacy, the beneficial interest would belong to the persons entitled under the relevant statutes of distribution. I cannot find anything in the judgment of their Lordships, when the case went before the Privy Council [1] to cast any doubt on the views which I expressed on s. 11, and, if those views are correct, they seem to me not merely to dispose of any argument based by the appellant taxpayer on that section, but to provide a strong argument for the commissioner. It is not merely that s. 11 does not express a purely arbitrary choice of recipient. On the contrary, the real benefit which it gives is not substitutional but derivative. The testator had an interest, which was not contingent on his survival to any particular time. It was something which was within his disposition post mortem, and would have been within his disposition inter vivos if it had not been for the express provisions of s. 29. The case thus differs widely from such cases as Lord Advocate v Bogie [2] .

[57]

It will be seen that by force of these provisions and by reason of the fact that the testator with whose estate we are now concerned had supplied participating wool for appraisement, the commission in the testator's lifetime came under a statutory duty to pay to the testator if he should be living, and to his personal representatives if he should be dead, a fixed proportion of each amount to be distributed under the Act. Any moneys paid to him by the commission in his lifetime in performance of this duty would be income in his hands: Federal Commissioner of Taxation v Squatting Investment Co. Ltd. [1] . Amounts paid to his executor after his death, however, could not be income of his estate. This is made clear by the case of Commissioner of Taxation (N.S.W.) v Lawford [2] in which it was held, under an Act which did not contain any such provision as s. 101A of the Income Tax and Social Services Contribution Assessment Act 1936-1953, that professional costs earned by a solicitor in his lifetime and received by his executrix after his death were not assessable income of the executrix. In that case Dixon J. (as he then was) [3] pointed out that the debt owing to the deceased at his death formed part of the assets which devolved upon the executrix; and clearly enough the position would be similar in the present case if the Wool Realization (Distribution of Profits) Act had had the effect of creating a debt, in the ordinary sense of the word, owed by the commission to the testator. It could not matter that the debt was contingent by reason of the fact that before any amount could become presently payable in respect of it a number of events prescribed by the Act would have to occur, including the provision of funds by means of an appropriation Act or an advance from the Commonwealth Bank under an arrangement made by the Treasurer; for the fact that a right is contingent, though it may affect the value of the right, does not prevent it from being a right of property so as to be included as a dutiable asset of an estate: see In the Estate of McClure [1] .

[59]

No doubt the position would be different if the operation of s. 7 (3) and s. 11 in relation to the testator's wool were correctly described, as counsel for the executor sought to describe it, by saying that upon the passing of the Act the commissioner came under a duty to pay to the testator personally a share in such distributions as should be made in his lifetime, and under an independent duty to pay to the testator's legal personal representatives, by virtue of an original title given by the Act to them as personae designatae, a share in such distributions as should be made after his death. If that were the situation, the right arising upon the testator's death in favour of the executor could not be regarded, upon any view of its character, as forming part of the testator's estate chargeable to estate duty. The executor would be bound to apply any moneys received in a distribution as if they had been part of the estate: Long v Watkinson [2] ; In re Cousen's Will Trusts; Wright v Killick [3] ; but the right to receive such money would not in fact be part of the estate: Lord Advocate v Bogie [4] ; Attorney-General v Loyd [5] , even though the testator might be said to have had a general power of appointment consisting of the power to determine by his will who should have the money when it came in: Re Estate of Isles [6] . But although s. 7 (3) is by express provision subject to the Act and is therefore subject to s. 11, the former is the principal provision, embodying what may be described as the general principle of the Act, while the operation of the latter is only to prescribe the manner in which the broad principle shall be given effect to where death has made literal compliance with s. 7 (3) impossible. As was said by the Court in Ritchie v Trustees Executors & Agency Co. Ltd. [1] : "The Act provides for devolutions, transmissions and the like, but subject thereto it is the person who supplied the wool who is to be paid" [2] . If the making of distributions had been prescribed in terms of the rights of participants, instead of being prescribed in terms of the duties of the commission, a provision vesting in a person who supplied wool for appraisement a right to receive a defined share in each distribution would have sufficed without more to entitle his legal personal representatives to be paid his share in each distribution made after his death. But the course adopted is to state in the Act the duties of the commission, leaving the correlative rights to be implied; and accordingly the general direction to pay a share in every distribution to each person who supplied wool for appraisement is supplemented by a subsidiary direction that if such a person is no longer alive when the time for making a distribution arrives the payment shall be made to his personal representatives.

[71]

The executor finally relies upon s. 28 in the endeavour to establish that the right which the testator had under the Act formed part of his personal property. That section provides that no action or proceedings shall lie against the commission or the Commonwealth for the recovery of any moneys claimed to be payable to any person under the Act, or for damages arising out of anything done or omitted to be done by the commission in good faith in the performance of its functions under the Act. This provision of course does not detract in the least from the imperative nature of the duty imposed upon the commission. Its effect is simply that controversies as to what is proper to be done in order to carry the provisions of the Act into execution are to be resolved by administrative and not by judicial action, and that the remedy for non-performance of a duty which becomes absolute is to be found, not in the application of force under the authority of a court, but in action by the executive government and, if necessary, by the Parliament itself. It is therefore inaccurate to speak of a right to a share in distributions as unenforceable. The most that can properly be said is that the method of enforcement which the law provides for the enforcement of most money demands is made unavailable. If this were equivalent to saying that the right is not one which is recognized by the law, no doubt the logical consequence would be that the right cannot be fitted into the concept of property, since that is a concept of the law. But the statements are obviously not equivalent, and it would be impossible to maintain that the law does not recognize a right which the law itself has created. To assert that the prohibition of actions and proceedings for recovery of moneys under the Act prevents the courts from recognizing the right as a legal right is to assert that, because the usual occasions for judicial recognition of the right cannot arise, the right is incapable of judicial recognition as property belonging to the person for whose benefit it exists. The non sequitur is obvious.

[73]

It must have been from early times that liquidated money demands were recognized, even if unenforceable in the courts, as choses in action, and therefore as personal property. It is difficult to suppose that a debt could ever have been considered to lose the character of property whenever it became, and so long as it remained, statute barred. Holdsworth, op. cit., p. 529 mentions, as having ultimately prevailed, an argument of Catesby in a case in 1482, that "though the grantee of an annuity had no tangible thing, but only a right, that right, whether enforceable by action or not (the italics are mine), was, like the right to a rent, a thing which could be assigned." But more closely akin to the right we are now considering are such undoubted forms of property as stock in the public funds, government bonds, and government debts generally. Until a right of action against the Crown was allowed by statute - and that did not occur in England until the Crown Proceedings Act, 1947 came into operation - no debt of the central government could be sued for in the courts. In appropriate cases the courts could entertain a petition of right, but the consent of the Crown in the form of the Attorney-General's fiat was required before the petition could be filed, and the judgment could not do more than declare what the suppliant was found entitled to: Petitions of Right Act, 1860, 23 & 24 Vic. c. 34, s. 9. No enforceable judgment could be given, and it was not unknown for a petition of right to produce no benefit: Macbeath v Haldimand [1] cited by Evatt J. in New South Wales v The Commonwealth [No. 1] [2] . Where the judgment established a right to a sum of money, the Petitions of Right Act required the Commissioners of Treasury to pay the amount "out of any monies in their hands for the time being legally applicable thereto, or which may be hereafter voted by parliament for that purpose" ibid, s. 14. Thus the creditor of the government was in a position which differed in only one respect from the position of a person to whom a share in a distribution becomes payable under the Wool Realization (Distribution of Profits) Act: the former could have the validity of his claim declared by a court, while the latter must have it passed upon by the Australian Wool Realization Commission. Substantially the same may be said concerning a claim against the Commonwealth or a State which is litigated under the Judiciary Act 1903-1950. The appropriate judgment consists only of a declaration of right. Neither execution nor attachment can be issued (s. 65); and there is no way of obtaining payment of the debt which the judgment declares, except by procuring the Treasurer of the Commonwealth or the State as the case may be to perform the duty, which s. 66 imposes upon him, of satisfying the judgment out of moneys legally available: New South Wales v Bardolph [1] ; Grace Bros. Pty Ltd v The Commonwealth [2] . Yet no one could doubt that a debt owed by a government is personal property. Government bonds and stock are, indeed among the commonest forms of such property. The relevant Act may specifically provide that they shall be personal property, as does the Commonwealth Inscribed Stock Act 1911-1946, s. 13, but even if, like the Funded Stock Act of 1892, 56 Vic. No. 1 NSW, it contains no such provision, bonds and stock held under it are forms of property, and are classed as choses in action in the enlarged sense of the term: R. v Capper [3] . They are "a species of property, grown up, since all these distinctions were settled in our law", as Sir William Grant M.R. observed during the argument in Wildman v Wildman [4] . "The interest in stock", he said in giving judgment, "is properly nothing but a right to receive a perpetual annuity, subject to redemption: a mere right therefore: the circumstance, that government is the debtor, makes no difference" [5] . So, too, Lord Cairns in Ex parte The Bank of England; In re Price [6] described bank stock as property of the holders, whom he called the owners and proprietors thereof; and Lord Blackburn in Colonial Bank v Whinney [7] referring to "new kinds of property like stock in the funds", quoted Lord Thurlow as thinking choses in action "an apt expression to use with respect to such things". Sir George Jessel in Ex parte Huggins; In re Huggins [8] said: "There are many cases in which property arises from a contract, quite independently of the fact that no judicial tribunal can enforce it If a man died possessing nothing but French or Italian bonds no one would say that he had died without any property. Such bonds are not choses in action in the ordinary sense, and that cannot be the definition of property. The mere fact that you cannot sue for the thing does not make it not "property". I am not going to attempt to define "property", that would be too dangerous. But there can be no doubt that these foreign bonds, both in common language and in the language of lawyers, are "property". Nor can I doubt that if a man had a bond for £10,000 of the British Government it would be "property". The annuities which were granted by the kings of England in former days, charged on the tonnage and poundage dues, were always dealt with as property, and they formed the subject of numerous decisions of the Courts. But you could not sue the Crown for them, and they could not even be made the subject of a petition of right, because they were granted out of the voluntary bounty of the Crown. But still they were property " [1] .

[81]

It appears from the stated case that before the original assessment was made, both the executor and the commissioner were aware of the provisions of the Wool Realization (Distribution of Profits) Act 1948, as well as of the Wool Realization Act 1945 under which the operations of the Australian Wool Realization Commission, as the Australian subsidiary of the Joint Organization, were conducted. Though the commissioner had received information which, if correct, showed that large profits had resulted from the transactions of the Joint Organization, and he believed, as did the executor, that a further distribution would be made under the 1948 Act, as to when such a distribution would be made and how much would be distributed neither of them had any knowledge, information or belief. It is against this background that the sufficiency of the letter of 3rd November 1950 as a disclosure must be considered. Its proclaimed purpose was to bring to the commissioner's notice an additional asset of the estate of the testator. Its phraseology was imperfect, but to anyone acquainted, as the commissioner was, with the relevant Acts and with the general character of the operations of the Joint Organization, the letter could not fail to convey these five facts: first, that the testator in his lifetime supplied participating wool for appraisement; secondly, that the appraised value of the wool was £45,295 2s. 2d.; thirdly, that the executor as such was entitled to participate in distributions under the 1948 Act to an extent commensurate with that value; fourthly, that the executor's right so to participate had been recognized by the Australian Wool Realization Commission by its placing on the distribution list the executor's name, with the appraised value of the testator's wool as the amount by reference to which the executor's share in distributions was to be ascertained (see s. 19); and fifthly, that an amount calculated at the rate of six and one-quarter per cent on the appraised value, and amounting to £2,830 18s. 10d. had become payable, if it had not actually been paid, to the executor. All these things were true. What further fact relevant to the making of a correct assessment and not already known to the commissioner could the executor have disclosed?

[82]

It was suggested by counsel for the commissioner that there was no disclosure of the precise asset by means of a correct description of it, and there was no disclosure of the value placed upon the asset by the executor. As regards value, it is obvious that the executor did not know, and had no means of learning, any facts relevant to valuation except those which the commissioner either knew already or was told in the letter. The executor is not shown to have had any opinion of its own or to have obtained any opinion from anyone else on the question of value. There simply was no disclosure of any fact bearing in any way upon that question which the executor could have made and failed to make. It is true, on the other hand, that the letter did not define the asset, by any form of words, as the right which passed at the death from the testator to the executor to receive a share in each distribution to be made under the 1948 Act. But that was in truth the only dutiable asset which the information in the letter showed to exist. The suggestion which the letter was calculated to convey was, no doubt, that the amount of £2,830 18s. 10d. which had been received in the first distribution was itself a dutiable asset of the estate; and it may be inferred that the mistake which occurred in the commissioner's office when the assessment came to be made was that this suggestion was accepted and acted upon. It was, of course, an erroneous suggestion, but the error consisted in failing to appreciate that a capital sum which comes in as part of an estate after the death of the deceased does not itself constitute property which the Estate Duty Assessment Act requires to be included in the estate for duty purposes, and that what the Act makes dutiable is the asset which existed at the death and which the moneys subsequently received represent wholly or in part. There was, therefore, no failure to make true and full disclosure and no mistake of fact; there was only a mistake of law. Neither party misapprehended any fact. They were both well aware that the £2,830 18s. 10d. was the first fruits, and probably not the last, of a right under the 1948 Act which had devolved upon the executor, but they treated as dutiable in law the proceeds of that asset instead of the asset itself. Then when the receipt by the executor of an amount in the second distribution was discovered by the commissioner's officers, the same mistake was made again in amending the assessment. But we are not concerned with the incorrectness of the amended assessment; the question is whether there was any power to make it at all. And the answer to that question must be that, as the original assessment was made after a full and true disclosure to the commissioner of all the material facts not already known to him which the executor was in a position to disclose, and as there was no mistake of fact to be corrected, s. 20 (3) precluded the making of any amended assessment.