onl Cor Appl State Appl Col er "Comr of State Browne v Baekstop 'Bel Athos Lid Cater | x Ltdy Coie Ft | Conta ite - [1945] HCA 14 - HCA 1945 case summary

onl Cor Appl State Appl Col er "Comr of State Browne v Baekstop 'Bel Athos Lid Cater | x Ltdy Coie Ft | Conta ite - [1945] HCA 14 - HCA 1945 case summary — Zoe

[93]

result of what was done was that a gift to the daughter was effected, and that therefore the deeds used were dutiable as deeds of gift. The argument was rejected by the Privy Council, Lord Loreburn L.C. saying (1): "Here there was no gift by any document, and therefore there is no duty payable." It was immaterial that the effect of the transactions in the course of which the documents were used was to make a gift. In the same way in the present case, if the instrument in question is not itself a settlement, it does not become dutiable as a settlement by reason of the fact that it was used for the purpose of bringing about the same result as a settlement. This principle is not affected by s. 61, which applies only where there are several instruments, each of which would, apart from the section, be dutiable. I therefore agree with the statement of Philp J. that s. 61 "is not designed to alter the basic principle that the duty on each document used to effect a settlement is to be deter- mined upon the face of each document itself, but it is designed to relieve the subject in the case of settlements from the harsh effect which that basic principle would impose " (2). In my opinion, it is not clear that this view is inconsistent with the statement of Collins MR. in Russell v. Inland Revenue Commissioners (3) that a corres- ponding section in English legislation " contemplated one transac- tion by way of settlement of property effected at the same time by several documents, not a series of documents effecting at different stages different dispositions with regard to settled property." It is plain enough, I should have thought, that a series of documents dealing in different ways at different times with the same property would be dutiable separately, and that the execution of such a series could not possibly be regarded as falling within the description of " the execution of several instruments for effecting the settlement of the same property." The words used by the Master of the Rolls may, in my opinion, be read as meaning no more than that the section contemplates one settlement in the making of which more than one document may be used (as in the example already given of a deed of settlement and a conveyance or transfer), and that the section was not intended to apply in the case of separate settlements which at different times dealt with the same property.

[108]

The nature of a settlement has been discussed in such cases as Dawidson vy. Chirnside (4), Archibald y. Commissioner of Stamp Duties (Q.) (5), and Wedge v. Acting Comptroller of Stamps (Vict.) (6). In order that a document may constitute a settlement, it is essential (subject to any artificial meaning which may be attributed to the word by statute) that it should at least operate or contribute to cause property, in the sense of some right or interest of a pro- prietary nature, to become, either at law or in equity, vested in some person or devoted to some charitable purpose. There are various ways in which a person who has both the legal and the equitable title to property may vest legal or equitable interests therein in other persons ; and my brother Dizon, in Comptroller of Stamps (Vict ) v. Howard-Smith (7), has indicated various ways in which a person who has only an equitable interest in property may confer equitable interests therein upon others. There is, however, nothing in the indenture here in question, taken by itself, which operates as a settlement of the shares or the debt, nothing to cause any legal or equitable right or interest of a proprietary nature in these items to become vested in Spenser Hopkins as trustee or in any of Thomas Hopkins' eight children as beneficiaries. It is plain, on the face of the document, so far as the shares and the debt themselves are concerned, that what the settlor intends to do is to transfer them, in the very near future, to Spenser Hopkins as trustee on the terms that after the intended transfer has taken place he is to hold them upon the trusts specified. But it does not follow from the fact that the indenture does not of itself settle the shares and the debt that it does not of itself settle anything. The recitals state that " the settlor intends torthwith to transfer the said shares and sum of money into the name of the said Spenser McTaggart Hopkins to be held by him upon the trusts and with and subject to the powers and provisions hereinafter declared and contained and to the intent that the

[121]

to say so in terms in the stated case, we cannot take this fact into consideration. Second, it was executed by the trustee on 18th May 1907, the date which it bears. Third, four days afterwards, on 22nd May 1907, the property was transferred by the settlor to the trustee, as provided for by the document. Fourth, the document is incorrect in saying that it was executed by the settlor on 18th May 1907 : it was not so executed until some four months afterwards, in September. As to the second of these matters, the execution of the document by the trustee on 18th May 1907 provided strong evidence that he did not intend to disclaim any property which subse- quently might be transferred to him for the purposes of the settle- ment for which the document provides. As to the third, upon the transfer of the property by the settlor to the trustee on 22nd May 1907, the document operated as the written charter by which the beneficial interests in the property became apportioned amongst, and vested in, the eight children of the settlor. As to the fourth, the subsequent execution of the document by the settlor in September 1907 provided evidence that the transfers made in May had been his deliberate acts and were intended by him to vest beneficial interests in all eight children as provided by the document, not in the trans- feree alone; whilst the fact that the property had already been transferred reduced the operation of the covenant to that of a covenant for further assurance, available to the trustee in case the transfers should turn out to have been in any way defective. Regarded in the light of these matters, the document is seen to be one factor in a process of settlement, of which the first step that is before us was the execution of the document under seal by the trustee as an indenture on 18th May 1907, and the second and erucial step was the transfer by the settlor on 22nd May 1907 of the property referred to in the document to the trustee to be held by him upon the trusts of the document. It follows, in my opinion, that, if not on 18th May 1907, at the latest on 22nd May 1907, the document became an instrument by which the property was " settled " within the meaning of the statutory definition clause then in force. I have had the advantage of reading the reasons of my brother Dizon, and agree with his reasons for concluding that the instrument is dutiable as a settlement according to the rate of duty in force in 1907.

onl Cor Appl State Appl Col er "Comr of State Browne v Baekstop 'Bel Athos Lid Cater | x Ltdy Coie Ft | Conta ite

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