'Porson v para

ROSENTHAL AND ANOTHER . x . APPELLANTS ; PLAINTIFFS,

ROSENTHAL AND ANOTHER . 3 . RESPONDENTS. DEFENDANTS,

ON APPEAL FROM THE SUPREME COURT OF Bh ee A VICTORIA. .

Settlement, duty on - ' Trusts or dispositions to take effect after" the death of the Sept. 15, 16.

settlor - T'rust to come into operation on death of survivor of settlor or his wife

• Death of the settlor before his wife - Administration and Probate Act 1890 Griffith C.J.,

id (Viet.) (No. 1060), sec. 12 - Administration and Probate Act 1903 (Vict.) (No. Higeins 9.

1815), sec. 8 - Costs - Unsuccessful appeal to High Court by trustee - Co: of trust estate - Special circumstances.

See, 112 of the Administration and Probate Act 1890 provides that "e settlement of any property made . . . . by any person containing trus or dispositions vo take effect after his death, shall upon the death of settlor be registered within the prescribed time . . . . and no such trusts or dispositions shall be valid unless such settlement be so registere The section also requires that the trustees of the settlement shall before registration pay the duty fixed by the Statute.

Held, that a settlement containing trusts which are directed to come into operation upon the death of the settlor and his wife is a settlement containi trusts to take effect after the settlor's death, notwithstanding that the sett dies before his wife, and is liable to duty accordingly.

Whiting v. McGinnis, (1909) V.L.R., 250; 30 A.L.'T., 207, approved. «

Held, iurther (Higgins J. dissenting), that under the circumstances of this case the trustees who unsuccessfully appealed from the decision of the Supreme Court ought to be allowed their costs of the appeal out of the estate,

Decision of the Supreme Court: Rosenthal v. Rosenthal, 32 A.L.T., 46 affirmed.

On 15th May 1885 David Rosenthal by an indenture o settlement covenanted that he would transfer to trustees cei real estate to hold upon certain trusts which may be shortl stated as follows: Upon trust upon the marriage of each of h two daughters, Rosie and May, to pay to the trustees of the iage settlements of each of them an annual sum of £240 be applied according to the trusts of such settlement, and subject to such trust to permit the settlor's widow, Julia Rosenthal, receive the rents and profits of the settled property for her life and from and after her decease to permit the settlor to receiv such rents and profits during his life, if he should survive wife, "and from and after the decease of the longest liver of the settlor and his wife upon trust to pay two annuities of £240 each out of the rents and profits to the two daughters of th settlor before mentioned in the event of either or both of them not having married, and subject thereto upon trust to divide and apply the rents and profits equally among the children of

testator and his wife. The trustees of the settlement were given power to sell the trust property either during the lifetime of the settlor and his wife or the survivor of them or after the death of the survivor of them, in the former event with the consent in writing of the settlor and his wife or of the survivor of them. In either event the trustees were directed to set aside out of the proceeds of sale a sum of £4,000 for each of the two daughters Rosie and May, to be paid to the trustees of her marriage settle- ment in the event of her marriage, and io be invested for her benefit if she did not marry. In the event of a sale during the lifetime of the settlor and his wife or the survivor of them, the trustees were directed to hold the proceeds of the sale, subject to the trusts in respect of the two sums of £4,000, upon similar trusts to those respecting the trust property should it be unconverted, and in the event of a sale after the death of the survivor of the settlor and his wife, the trustees were directed to divide the sur- plus of the proceeds of sale among the children of the settlor and his wife share and share alike.

The property the subject of the settlement was duly transferred to the trustees on 19th May 1885, and with the consent of the settlor and his wife was sold during the lifetime of both of them. On 18th August 1885 the settlor's daughter Rosie was married to one Aubrey Davis, and the sum of £4,000 was paid to the trustees of her marriage settlement. On 29th October 1889 the daughter May was married to one Fernand Levic and the sum of £4,000 was paid to the trustees of her marriage settlement.

The settlor died on 7th March 1910 leaving him surviving his widow, his four daughters, Essie Joske, May Levic, Rosie Davis and Ethel Phillips, and his son John Ernest David Rosenthal. The trustees of the indenture of settlement were then the settlor's widow and Samuel Gabriel Pirani (a member of the firm of solicitors acting for the trustees).

The trustees took out an originating summons, to which J. E. D. Rosenthal, on behalf of himself and all other persons beneficially entitled under the trusts of the settlement, and Thomas Prout Webb, the Master-in-Equity of the Supreme Court. of Victoria, were made defendants, and by which the following questions were asked : -

"(1) Is the said indenture of settlement a settlement of pro perty made by a person containing trusts or dispositions to tak effect after his death within the meaning of see. 112 of Administration and Probate Act 1890?

"(2) Having regard to the facts . . . . is any and wl duty payable under the said section in respect of the sai indenture and the property or any and what portion thereof now or at any and what time heretofore respectively comprised therein ?

how and by what person or persons should the duty or any and what part or parts thereof be paid or borne ?"

The summons was heard by Hodges J.: Rosenthal y. Rosenthal (1), who answered the questions as follows: ;

"(1) The above mentioned indenture of settlement is a settle- ment of property made by a person containing trusts or dis- positions to take effect after his death within sec. 112 of the Administration and Probate Act 1890.

"(2) Duty is payable on all the property which was subject to the provisions of the settlement at the date of the death of the settlor.

"(3) The duty should be paid by the trustees out of the property which was subject to the provisions of the settlement at date of the death of the settlor."

The plaintiffs now appealed to the High Court from this decision so far as regards the answer given to the first question,

Mitchell K.C. (with him Braham), for the appellants. The decision of the Full Court in Whiting v. McGinnis (2), on the authority of which case Hodges J. based his decision in this ca was wrong. In sec. 112 of the Administration and Probate Act 1890, the word "after" means "immediately upon," and the meaning of the word "settlement" in sec. 8 of the Administra: tion and Probate Act 1903 is limited by the words to "take effect upon the death of such person " (the settlor). :

[GrirrirH C.J. referred to Davidson y. Armytage (3) as to th meaning of "settlement."]

(1) 32 ALL.T., 46. (2) (1909) V.L.R., 250; 30 A.L.T., 207. (3) 4 C.L.R., 205.

The intention of the Administration and Probate Act 1890 is to tax property of which the settlor keeps the benefit during his lifetime. That is shown clearly in sec. 115. The time at which the question whether the document is a settlement has to be determined is the death of the settlor. See Lhe King v. Austin (1). There are no trusts or dispositions here which depend upon the death of the settlor. In order to bring a document within sec. 112 the death of the settlor must be the event which brings about the vesting of an estate in interest or in possession. The settlor having predeceased his wife, his death has not accelerated the interests of the remaindermen.

Schutt, for the respondent Rosenthal. The language of sec. 112 of the Act of 1890 and of sec. 8 of the Amending Act of 1903 is so doubtful and ambiguous that the Court should not hold that this instrument is brought within them. It is impossible to read the two sections together grammatically, the words "after" and "upon" are used indiscriminately, and looking at the context, they both mean " at."

Davis and Sanderson, for the respondent the Master in Equity. This settlement falls within the plain meaning of sec. 112 of the Act of 1890. The legislature has indicated the meaning of the word "after" by using immediately afterwards the word " upon." The object of the section was to impose a succession duty upon the interest which a person might take after the death of a settlor, where the alienation was not for value. A tax is imposed on every voluntary disposition which takes the place of a will. The instrument would clearly have been taxable if the settlor had survived his wife and there is no logical reason why the fact that he predeceased her should make any difference. If sec. 8 of the Act of 1903 applies it has an enlarging and not a restrictive effect. The intention of that section was to clear away any doubt that might arise as to the meaning of the word " after " in sec. 112. See. 115 of the Act of 1890 is aimed at fraudulent dealings and has no analogy to sec. 112. There being no ambiguity, the Acts

are to be construed like any other Act: Heward v. The King ( Affleck v. The King (2). 4

Grirrira C.J. This case affords a singular instance of the manner in which a simple question may be lost sight of in a haze created by what, with all respect, I regard as waste ingenuity. 'The case is in form an appeal from Hodges J., but in substance an appeal from the decision of the Full Court in Whiting v. McGinnis (3). The question to be determined is the meaning of the words, " Every settlement of any property made on or after 16th December 1870 by any person containing trusts or dispositions to take effect after his death" contained in see, 112 of the Administration and Probate Act 1890 (No. 1060). Part V. of that Act deals with duties on deceased persons' estates Secs. 98 to 111 deal with the assessment and payment of duty i case of probate and administration. Sec. 112 provides that eve y settlement (&e. as above quoted) "shall upon the death of the settlor be registered within the prescribed time . . . and no such trusts or dispositions shall be valid unless such settlement be so registered." In the section as originally passed there fol lowed an exception of settlements in consideration of the settlor's marriage, or in favour of a purchaser or incumbrancer in good faith and for valuable consideration, or on or for the wife o children of the settlor of property which had accrued to the settlor after marriage in right of his wife, but this exception was repealed by the Administration and Probate Act 1903 (No. 1815).

The general intention of the legislature evidently was that

effect wholly or in part after the death of the settlor should placed on the sane footing with regard to taxation as proper' disposed of by will or passing on intestacy. This is shown bo' by the place of sec. 112 in the Act and by the exception to which

(1) 8 CLR. 117, at p. 127. (2) 3 C.L.R., 608, at p. 622. (3) (1909) V.L.R., 250; 30 A.L.'T., 207.

Ihave referred. The trusts of the settlement in the present case were for the wife of the settlor for her life, with remainder to the settlor for his life if he should survive her, and after the death of the longest liver of them for their children. 'The settlor had, therefore, a life interest antecedent to that of his children. He predeceased his wife, who is still living. The question is whether this settlement comes within the words of see. 112. In my opinion the words "Every settlement . . . made by any person containing trusts or dispositions to take effect after his death" are plain and unambiguous. The word "after" means after, that is, at a period subsequent to the event mentioned. The death of the settlor must, of course, be made by the settlement a condition precedent to the taking effect of the trusts or dispositions. The question whether they are to take effect after his death depends upon the construction of the instru- ment itself, which cannot be affected by any subsequent event, although the actual operation of the instrument may be so affected. This being premised, the question in each case is whether at the death of the settlor any trust or disposition contained in the settlement which has not yet taken effect is still capable of taking effect. If so, the settlement must be registered, but if not, there is no need to register it.

It is suggested, however, that the word "after" should be read "at" or "upon " in the sense of eo instanti, and if I rightly under- stand the judgments, this view commended itself to Madden C.J., if not to aBeckett J. in Whiting v. McGinnis (1). No doubt there are many cases in which the words "after" and "upon" may be used interchangeably. For instance, in the very next sentence of sec. 112, the word "upon" is used in the sense of "soon after." But, although they may in some cases be both appropriate to describe the same event, they do not mean the same thing. I cannot find any grounds for reading "after" in sec, 112 as having any other meaning than its primary one of subsequent in point of time.

It is therefore unnecessary to consider the effect of sec. 8 of Act No. 1815. The intention of that section was to extend, not to limit, the ambit of the term "settlement," and, possibly, if the

settlement in question were not already included, it would hays been sufficient to cover it.

The whole matter may be summed up in a few words. Wh Rosenthal, the settlor, died his life interest came to an end. The trusts and dispositions in favour of his children could not ti effect until it had come to an end. They were therefore tru: and dispositions taking effect after his death, and the case is within the plain words of see. 112.

Isaacs J. See, 112 of the Administration and Probate Act 1890 enacts certain provisions with respect to settlements, mad after 16th December 1870, which contain trusts or dispositions to take effect after death. Those provisions in substance are - (1) that the settlements must be registered "upon," which there means "after" the death of the settlor, and within the stated time; (2) that unless so registered the trusts are to be invalid; (3) that before registration a certain statement is to be filed ; (4) that before registration duty must be paid; (5) if not regis- tered as prescribed the duty may be assessed ; (6) if the duty is not paid the Court may order a sufficient part of the property to be sold to defray the duty and expenses. Those are the purposes of Part V. of the Act as to settlements. In 1903 the amending Act No. 1815 was passed, of which sec. 8 declared that for "the purposes" of that Act, and of Part V. of the Principal Act, "settlement" should include certain instruments therein described. See. 9 repealed part of the earlier sec. 112, and substituted a new third paragraph. Sec. 10 allowed a deduction where duty was paid on a settlement under the Stamps Act.

The language of sec. 8 of the later Statute is not easy to blend harmoniously with the earlier legislation, and in itself is not free from grammatical faults. But it is not I think difficult to collect its real meaning. While on the one hand the Crown fails if the case is not brought within the words of the Statute interpreted according to their natural meaning, yet the Court is not to be deterred by any crudeness or infelicity of expression or by gram-

matical errors from giving full effect to the intention of Parlia- ment as fairly gathered from the language of the enactment. Now, the opening words of sec. 8 are very significant. "F

the purposes of this Act or Part V. of the Principal Act " - and then follows what is to be law for those purposes. It is not for one purpose but for all the purposes specified which are relevant to settlements, that is for everything including registration, pay- ment, and execution, and also, under the later Act, deduction. The operative words effect two objects: first, the word "settle- ment" had not been interpreted in sec. 112, and as its dominant notion, where not artificially detined or controlled by the context, is the creation of a succession of interests - the marriage settle- ment being the most prominent example - it might easily have been contended that with reference to a taxing Act the strict construction should be applied. By this means great opportunity might have been afforded to steer between wills and settlements properly so called, largely affecting the revenue. No doubt one of the objects of Parliament was to end this uncertainty or else to add to the class of instruments to be regarded as taxable. But this was perfectly achieved by a part of the new enactment. I mean that, if you stop at a certain point in it, you attain fully the mere object of definition. The words I refer to are - ' Every conveyance, transfer appointment under power declaration of trust or other document or non-testamentary disposition of property made by any person." And if that had been the only object of the legislature, or, in other words, if its intention had been simply to enlarge the class of documents which should henceforth be within the purposes of the enactments, without altering the conditions, the definition would have ended there. But it did not. It went on to add these words - * containing trusts or dispositions to take effect or which shall or may take effect upon the death of such person." These are new conditions and stand side by side with the old. The description of the documents which are to be embraced within the purposes of the enactments is as perfect and complete in every way as that of the original class mentioned in sec. 112. Reading the words of the two Statutes so as to get their natural construction as applied to the subject matter, it is impossible to insert the whole of the new provision of sec. 8 into sec. 112 as a mere enlarging defini- tion of documents with identical trusts, because that would be

sacrificing sense and incurring the objections of contradiction an futility. j Welding the new provision to the old, the combined constr tion I place upon them is this: that by separate enactments distinct classes of instruments are now declared to be subject sec. 112 - the first is a settlement properly so called containin trusts or dispositions which are necessarily to take effect q the settlor's death ; and the second is any instrument of the kind described in sec. 8 containing trusts or dispositions to take effe or which shall or may take eftect wpon the death of the person making it. Probably the second class would include the fi but the first is not abrogated, and some documents would fall within both. The first is satisfied by a settlement properly so called containing a disposition of property which cannot take effect in the settlor's lifetime, and which in this respect resemb) a will. If his death is an essential factor in the effectuation o the disposition, it is quite immaterial whether or not some int vening event or condition must arise or be satisfied. The section says "after his death," not immediately after ; and not after his death "per se." So long as the gift is so made that it is legal y impossible of enjoyment until the settlor's death, it sufficiently approaches the analogy of a testamentary disposition to satisfy both the words and the manifest object of the legislation. The second is self-evident. If the instrument, though not distributing successive interests, deals with the property so that its enjoyment must in any event, or may in some event, depend upon the fact of the death of the person making it, it is struck by the enactment. I do not assent to the view that the character of the ins' ment is determined by the state of facts at the settlor's death. That state of facts may, according to the terms of the ins ment, entitle the intended beneticiaries to immediate enjoyme or to postponed enjoyment, or to no enjoyment at all; but nature of the instrument must be the same from the moment of its execution. f Events may affect its operation so that the person who might have taken the property under it does not take any interest virtue of the settlement. In that case the consequence is that

there is nothing to invalidate, that registration is unnecessary, and that the words of the taxing Schedule would not apply to the case. But that is foreign to the point now under considera- tion, which is as to the character of the instrument itself.

In this case the document falls under both descriptions, and therefore the appeal fails. I would add that, there being no appeal on this question of what portion of the property is subject to the tax, I have formed no opinion upon it.

Hicers J. In my opinion the appeal should be dismissed. I see no reason for refusing to give the ordinary meaning to the word "after" in sec. 112 of the Administration and Probate Act 1890. Duty is to be paid if the settlement of 15th May 1885 contained " trusts or dispositions to take effect after his death"

• the death of the settlor. In this case the children of the settlor are to receive certain rents and profits, but not until after the settlor's death. It is true that the settlor died ; that his wife survives; and that the children do not begin to enjoy the rents and profits so long as their mother lives ; but there is nothing in the Act prescribing that there is to be no tax unless the enjoy- ment of the beneficiaries springs up immediately on the settlor's death. On the contrary, the very nature of the enactment, as well as the use of the word "after" instead of "upon," point to the other conclusion. The section occurs in an Act imposing duty on deceased persons' estates ; and the object of sec. 112 is obviously to subject to duty benefits conferred by settlement which might fitly have been conferred by will. In the very words following in sec. 112, the registration of the settlement is to take place "upon the death"; and in sec. 115, which deals with convey- ances made in evasion of the Act, it is provided that "any conveyance . . . to take effect wpon the death of the person making the same" shall be deemed to have been made with intent to evade the duty. I think that it is not a violent pre- sumption to adopt that, where there is a change of prepositions in the same phrase in the same Act, a change of meaning is intended. The reason for the change of language is obvious. A conveyance that is so framed as to take effect immediately on the

grantor's death operates exactly as a will, and is in effect an VOL. XI. 7

evasion of duty, and must be treated as an evasion. But the cast of settlements is different. 'The trusts and dispositions whi take effect before the death ought not, on the scheme of the to make the settlement liable to duty; but all the trusts dispositions to take effect at any time after the death are sucha: might fitly have been made by will, and render the settlement subject to duty under see. 112.

Under this view it becomes unnecessary to decide the exae construction of sec. 8 of the Act No. 1815. But it has been argued and my mind inclines to the view, that, even if the settlement were not liable to duty under sec. 112, it would be liable under sec. 8 of the Act No. 1815. The latter Act extends the area of taxation ; and, for the purposes of sec. 112 of the Principal A if the settlement contains trusts or dispositions which may take effect upon the death, it is subject to duty, although the trus and dispositions do not necessarily so take effect.

Grirriti C.J. This is a very exceptional case, and I think the trustees and the beneficiary who appears should have their costs as between solicitor and client out of the property. The trustees should pay the Master-in-Equity his costs and be allowed to recoup themselves for the same out of the property.

Isaacs J. Lagree with what the learned Chief Justice has said as to the costs. I think in this case the appeal of the trus tees was most reasonable. The position from a legal standpoint was that there was not a well settled definite view taken by th Judges of the Supreme Court. They differed in their reasons. I was a very important matter, and I think the trustees wer

certainly acting reasonably, and in the interest of their cestwil que trustent in appealing.

Hicerns J. I have to dissent as to the order for costs of the appeal. I do not know how this question, which is not a ques- tion of construction of the settlement, and which is not between parties interested under the settlement, comes to be debated on originating summons (see Rules of the Supreme Court 1906, Order LY.,r.3; Order LIV. a,r. 1). But even taking the question as having been properly submitted, there is a rule of very long standing that, although trustees are entitled to their costs out of the estate of getting the guidance of the Court in cases of diffi- culty, they appeal at their own risk, and must take the usual consequences. If this were not the rule, experience shows that estates would very frequently be frittered away in costs. The trustees' right to come to the Court is based on the principle that they ought not to be expected to take any risk as to the law, and are entitled to the Court's protection ; and in this case the order of Hodges J. gave them unimpeachable protection. In this case, also, there were five children beneficially interested, all over age ; and it was for them to appeal if they chose; but they have not appealed or taken any step to qualify themselves to appeal. The trustees selected one of the children as defendant, "on behalf of himself and all other persons" interested, and he, through his counsel, consents to this order. But there is nothing to show why he was selected ; and as he has not got an order authorizing him to defend on behalf of the others, he cannot give away their rights in this fashion. Even if he were authorized to defend, it would appear that this does not authorize such a consent: Rees y. Richmond (1). This beneficiary offers no explanation why he did not appeal himself. In my opinion, the appeal should be dismissed with costs; and when the trustees seek to include the expenses of the appeal in their accounts, it would be for them to justify the inclusion, if the beneficiaries should object. We have no evidence of the facts which may have justified the trustees in appealing.

Appeal dismissed with costs to the Master- in-Equity, to be paid by the appellants, who may recoup themselves out of the (1) 62 L.T., 427.

ongers v imetty Pet vaae Baran SC Hag (578i UGERA D4 Fi a:

Local Government - Registration of place of amusement - Discretion of Muni

estate. Costs of application and respondent Rosenthal as between so tor and client to be paid out of es

Solicitors, for the appellants, Braham & Pirani. Solicitor, for the respondent Rosenthal, 0. H. Lucas. F Solicitor, for the respondent the Master-in-Equity, Guin

Council - Mandamus - Local Government Act 1903 ( Vict.) (No. 1893), sec. 1 Thirteenth Schedule, Part VI.

A Municipal Council had adopted Part VI. of the 'Thirteenth Schedule to the Local Government Act 1903 (Viet.) which requires the occupier 0 ground in which public amusements are condueted to register the g each year, imposes a penalty upon the causing or permitting of an; amusement on an unregistered ground, and provides that the Couneil « application of the occupier may, if they see fit, cause any ground | registered and grant a certificate of registration thereof,

Held, that mandamus would lie to compel the Council to exercise discretion as to granting or refusing an application for registration.

Held, also, that in exercising their diseretion the Council might p take into consideration the facts that the ground sought to be