Stamp Duties, Commissioner of (NSW) v Gale

In Commissioner of Stamp Duties (N.S.W.) v. Perpetual Trustee Co. Ltd. (Watt's Case) [5] the Supreme Court and a majority of the High Court (Higgins J. dissenting) held, to use the language of Campbell J. " that it is an indispensable condition of the operation of s. 102 (2) (b) upon any gift that the subject of the gift should exist at the date of the death in some concrete identifiable form" [6] . (Doubtless the word "concrete" was not intended to exclude a chose in action or other incorporeal right). Thus where a deceased person had caused a sum of money to be applied in buying a steamer ticket to America for a friend and in handing the balance to him in cash as an aid to his intended journey and, as Isaacs J. said [1] , the recipient of the money and the ticket left Australia never to return, there was not a dutiable gift in existence at the donor's death. According to the suggestion of counsel for the executor upon his argument of the present appeal the proviso was inserted to meet the position disclosed by this decision in the case of gifts of money. The suggestion supposes that an unusual amount of time elapsed before the disclosure of the evil resulted in the adoption of the remedy; thirteen years. But whatever be the basis for the suggestion, it seems clear enough that the actual operation of the proviso is to clothe a gift of money with a special characteristic, namely, that of fixity, so that nothing is to be considered except the period that elapsed before the death of the donor took place. If it is less than three years from the gift, then the amount of money comprised in the gift forms part of the estate for duty, however the money may have been applied or misapplied.

1. (1925) 25 S.R. (N.S.W.) 467, at pp. 491, 492; (1926) 38 C.L.R. 12, at pp. 29, 36, 45, 47. 2. (1925) 25 S.R. (N.S.W.), at p. 502. 3. (1926) 38 C.L.R., at p. 36.

In the present case the money was applied in paying the purchase price of an undivided half interest in land the value of which was depressed by the continuing operation or effect of controls set up during the war that had closed. Before the death of the deceased a relaxation of the controls had allowed the value to shoot up. There is no doubt of the animus donandi of the deceased. The transaction grew out of marital mutations that were unfolding at the time and the donee was the lady who subsequently became the deceased's wife and ultimately his widow. But in the circumstances the commissioner persists in maintaining, notwithstanding the contrary opinion of the Supreme Court, that the gift was of the undivided interest in the land, the expression of the value of which underwent a sudden and huge enhancement before the deceased died. Naturally the executor seizes upon the proviso. Indeed he says that, proviso or no proviso, here you have a gift of money the amount of which is fixed and unchangeable for whatever purpose it was given and for whatever purpose it was applied.

It will be necessary to look a little more closely at the facts but enough has been said to make it profitable now to give some consideration to the legislative provisions governing the question.

The primary words, upon which much depends, are "any property comprised in any gift made by the deceased" scil. (within three years before his death). Perhaps it does not matter much, if at all, but we should note that "comprise" in this and other places is used in its prima facie, if not only correct meaning, of "included within"; that is to say not as exhaustively forming the category, in this case the gift. The property is to be comprehended in the gift.

Every other important term in the words quoted above from s. 102 (2) (b) appears to be the subject of a statutory definition. The term "property" is defined very widely by s. 3. The definition concludes with a reference to "any thing in action and any other right or interest". The word "gift" is defined in s. 100. What is material in the definition lies in the opening words, viz. " "gift" means any disposition of property made without full consideration" etc. It will be noticed that this is an exclusive definition; it does not say what the word includes but what it means. To come within it there must be a disposition of property, that is of property as defined. The important word is "disposition". The definition of that word covers many dealings with property and some extensions of the notion of alienation of proprietary interests. But for present purposes all that seems to matter can be restated in few words. Under par. (a) of the definition there is included "any conveyance transfer assignment payment or other alienation of property whether at law or in equity". It is one way of stating the question in the appeal to say that it turns on a choice between treating the disposition as constituted by a payment or payments made by the deceased or treating it as an "assignment" or "other alienation of property in equity". But the commissioner relies also on par. (e) of the definition of the word "disposition". That paragraph runs thus - "Any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own estate and to increase the value of the estate of any other person". It is not altogether clear how this provision advances the case of the commissioner, even assuming that the facts as they appear in the case stated warrant a finding or inference that the requisite intent existed in the mind of the deceased. For since the question is as to the subject of the gift, not its donative character, that is to say between the money which the deceased expended and the interest in land which his second wife obtained as a consequence, it might well be said that the money represented the value by which he diminished the value of the estate. But perhaps par. (e) is not speaking at all in terms which fit cases that fall under some or one of the preceding paragraphs of the definition.

To return to the material words in par. (a) of the definition of "disposition of property", one must be struck by the fact that those quoted all refer to a process by which the deceased has divested himself of some property, right or interest as he invested the donee with the gift. This conforms with what Isaacs J. in Watt's Case [1] described as "the basic notions on which the duty is founded" [2] . "They are" said his Honour, "(1) the property in view is only that which formerly belonged to the deceased, and (2) the point of time looked at for determining the true ownership of the property is the time of death. Therefore the property, the subject of sub-s. 2 of s. 102 (except merely appointed property), is in every case property which was originally property of the deceased and ceased to belong to him by reason of his disposition referred to" (2). Generalisations should not be pressed too far but prima facie one expects the legislation to bring into the notional estate some right interest or property on the ground that the deceased has parted with it, that is, has parted with it in circumstances of a kind which the legislature decides should lead it to refuse recognition to the alienation for purposes of death duty: not on the ground that a gain has accrued to somebody else, stranger or relative. There are several decided cases, and there is some text book discussion, upon the question what should be considered the subject matter of a gift where what has been parted with by the de cujus has been money and what has been gained in fulfilment of his purpose by the donee has been property, tangible or intangible. Much that has been said upon the question seems almost to treat it as one of characterisation depending upon some aspect of the particular transaction. But it seems clear enough that under the same form of question either of two quite different inquiries may be intended. To ask what was given may in its application to many sets of fact be to ask a completely ambiguous question. For it may mean "What did the donor part with?" On the other hand it may mean "What did the donee acquire in fulfilment of the donor's desire to benefit him?" If Isaacs J. has correctly stated the prima facie purpose of the provisions of the legislation we are considering, it is the former of these two questions that we should expect par. (b) of s. 102 (2) to have in view. The introduction of the proviso by the Act of 1939 provides some confirmation of the expectation. For clearly enough it is framed upon the view that by a gift of money made within the prescribed three years of his death a deceased person depleted his assets as at the time of the gift to the extent of the payment and that as a matter of policy it should be taken conclusively that the depletion as at the death was in the same amount. It might be enough to say that for the purposes of s. 102 (2) (b) all the statute asks you to look at in order to decide between money and other forms of property as the subject of a gift is the nature of the thing of which he divested himself in effecting the gift. It is more direct and probably simpler than attempting, with the aid of decided cases, to characterise the gift independently of the intention of the provision. But it is not in every given case that a ready answer will be yielded by the question what was the thing of which the deceased divested himself in effecting the gift. For in the first place what the deceased may have parted with may be nothing so straightforward as a chattel, an interest in land or a chose in action. He may, for example, have possessed some dispositive power or authority arising out of a right of property or even of contract, and the gift may be the result of its exercise. In the next place, in the course of the transaction constituting the gift and for its very purpose the deceased may have acquired a chose in action, a chattel, an interest in land (legal or more probably equitable) or such a dispositive power. He may have retained it only momentarily and then have transferred it to the donee. Of course it will be by a payment of money that the acquisition will have been brought about. Cases can be imagined in which only a very nice dissection of the transaction will make it possible to say whether the payment was but a step whereby the deceased clothed himself with power to give a tangible or intangible thing or on the contrary was the very gift itself.

1. (1926) 38 C.L.R. 12. 2. (1926) 38 C.L.R., at p. 32.

It seems however better to work out the problem by beginning with the real intention of the statute rather than to ask oneself, as apparently Griffith C.J. did in Union Trustee Co. of Australia Ltd. v. Webb [1] the question what should be regarded in substance as the real subject matter of the gift, a house which a wife contracted to purchase but the purchase money of which her husband paid or the money he paid. Isaacs J. began his answer, which appears to be open only to the criticism of being a trifle over-simplified, by saying: "The Act imposes duties in respect of what a man leaves or what he has only colourably given. But it does not strike at property which he never had at law or in equity" [2] .

1. (1915) 19 C.L.R., at p. 674. 2. (1915) 19 C.L.R., at p. 676.

In Trustees Executors & Agency Co. Ltd. v. Federal Commissioner of Taxation (Teare's Case) [3] a father sold his business to a company in consideration of purchase money for which he received a cheque. He and his two sons respectively applied for parcels of shares in the company, the full amount of which was payable on application and allotment. The shares they respectively applied for were allotted in the respective amounts to his sons and to himself and he paid the amount by returning the cheque to the company. For the purpose of the Estate Duty Act Cth. Williams J. treated the gifts to the sons, for gifts they evidently were, as gifts of money. His Honour said: "The gift was therefore in every case a gift of the moneys, the motive, and it might even be said the condition, being that they should be used to apply for the shares" [1] . Of the other judges Starke J. said nothing expressly to the contrary, while Rich and McTiernan JJ. were actuated by the fact that the recipients of the gift did not receive the money, a reason which cannot be decisive. In the same way in Perpetual Trustee Co. Ltd. v. Commissioner of Stamp Duties (Sargood's Case) [2] the Supreme Court held that, for the purposes of s. 102 (2) (d) of the Act, a man about to marry gave his intended wife money and not a house when, having expressed a wish to give her a house as a wedding present and having requested her to choose one, he paid the purchase money which was due under the contract of sale into which she entered as purchaser. The dissenting judgment of Jordan C.J. in In the Estate of James Anderson Murdoch [3] adheres to the same reasoning, but the majority judgments seem rather to treat the question as if it depended upon characterisation as matter of fact.

1. (1941) 65 C.L.R. 134. 2. (1941) 65 C.L.R., at p. 145. 3. (1935) 36 S.R. (N.S.W.) 160; 53 W.N. 28. 4. (1947) 48 S.R. (N.S.W.) 213; 65 W.N. 60.

There is much in the speeches of their Lordships who formed the majority in Sneddon v. Lord Advocate [4] that supports the view that in legislation such as that under consideration you look for what has been alienated by the deceased. The legislature there considered was cast in a different form and moreover was referential but plainly enough Lord Morton regarded the form of the property as it passed from the donor as a test [5] and so did Lord MacDermott [6] and Lord Reid [7] citing from Attorney-General v. De Préville [8] .

1. (1954) A.C. 257. 2. (1954) A.C., at p. 264. 3. (1954) A.C., at pp. 267, 268. 4. (1954) A.C., at pp. 273, 274. 5. (1900) 1 Q.B. 223, at pp. 229, 231.

In the end one may say that for present purposes it comes down to the question what did the deceased alienate.

It is now desirable to turn to the precise facts of this case. Two brothers, Leslie Ross Gale named at the beginning of this judgment and Raymond Arthur Gale, carried on a business of pastoralists under the firm name of Bibaringa Pastoral Company. Leslie Ross Gale died on 29th July 1950, leaving a will made nineteen days earlier. He named his brother Raymond Arthur as executor and to him probate was granted on 4th October 1950. They carried on the business of the partnership on a grazing property bearing the name "Bibaringa", which was vested in Mary Jane Gale, wife of Leslie Ross Gale, and Myrtle Catherine Rowell Gale, wife of Raymond Arthur Gale, as tenants in common in equal shares. The firm composed of their husbands took a lease of the property from the respective wives as tenants in common. The case stated discloses nothing untoward until 1947. In that year a dissolution of partnership was arranged. Apparently it was to take effect on 1st July 1947. At the same time Mrs. M. C. R. Gale arranged with her brother-in-law Leslie Ross Gale, the now deceased, that she would transfer to him her half interest in the land and in certain household furniture, subject to encumbrances, in consideration of a sum of £2,250. Perhaps this arrangement amounted to a contract. The words of the case stated do not make it appear with any certainty, but clearly enough if there was a contract there was no writing signed by Mrs. M. C. R. Gale. One of the terms of the dissolution was that if within seven years the property, incorrectly described by the words "the equity", and certain plant machinery and vehicles included in the partnership and the household furniture should be sold for an amount exceeding £23,500, then the net profit on the sale should be divided equally between Leslie Ross Gale and Raymond Arthur Gale. It will be seen that this term takes little account of the fact that the land was vested in the two wives; the profit apparently was to be shared between the two husbands. At that time a mortgage existed over the land for £19,000. It is evident enough that the sum of £2,250 is half the difference between the amount of the mortgage and the amount mentioned of £23,500. In spite of the use of the word "equity" it is quite apparent that the base figure was to be £23,500 and not £4,500 for the purpose of arriving at the excess or profit to be divided between the two brothers. At the time of the dissolution of partnership it appears inferentially that the price or the realisable value of the land was restricted by the operation of controls. Presumably the controls arose by or under Pt. III of the National Security (Economic Organization) Regulations. But we are told that later there was a relaxation of the controls and that as a result the property was sold after the deceased's death for £86, 882. In 1947 the matrimonial relationship between the now deceased Leslie Ross Gale and his wife Mary Jane Gale completely broke down. We are not furnished with any information as to the time when the estrangement commenced. We are told, however, that a decree absolute for divorce was pronounced between them on 19th December 1947. On this event the wife, Mary Jane Gale, transferred her undivided half interest to her former husband who purchased it from her for a price unstated. This undivided half share Leslie Ross Gale retained until his death. The appeal is concerned with the other undivided half share, namely that which Mrs. M. C. R. Gale, wife of Raymond Arthur Gale, had arranged or agreed to transfer to Leslie Ross Gale, the now deceased. It appears that the latter contemplated, no doubt contingently upon his then existing marriage being dissolved, entering into a marriage with a lady named Peggy Mary Martin. On 5th December 1947 Mrs. M. C. R. Gale entered into a contract with this lady to sell to her for the sum of £2,250 the undivided half share belonging to the former. The transaction was submitted to the Delegate of the Treasurer no doubt under the National Security (Economic Organization) Regulations and it was approved. Peggy Mary Martin neither then nor after she became Mrs. L. R. Gale paid any of the purchase money and no one supposes that it was ever intended that she should do so. However, between 22nd December 1947 and 18th March 1948 the deceased Leslie Ross Gale paid to his brother Raymond Arthur Gale amounts totalling £5,570 11s. 5d. These payments were in respect of the moneys owing under the agreement for dissolution of partnership and the sale of Mrs. M. C. R. Gale's undivided half share in the land. Out of the money thus received Raymond Arthur Gale accounted to his wife for the purchase price of £2,250. We are not told when the marriage took place between Peggy Mary Martin and Leslie Ross Gale now deceased, but there is a passage in the case stated which says that on 30th September 1948 M. C. R. Gale executed a transfer of her interest in "Bibaringa" in favour of Peggy Mary Martin who before that date had married the deceased. On the foregoing facts it is not difficult to understand why a contest should have arisen as to whether the subject matter of the gift by the deceased to Peggy Mary Martin, his future wife, should be regarded as a gift of money or of an undivided half share in the land. The value of the deceased's half interest in the land, that is to say the half interest he acquired from his former wife after their marriage had been dissolved, was put down as £37,772. The commissioner has of course put that sum down as the value of the disputed share and after deducting half the amount of the mortgage there is an assessable amount left of £28,272. By contrast, if the gift was only of money the assessable amount was £2,250. But once the view of s. 102 (2) (b) stated in this judgment is adopted the facts show clearly enough that if the deceased had no right title or interest legally or equitably in the undivided half share in question the gift must be considered to be one of money. For on that footing it was of money that he divested himself. To say this of course means that the interpretation of the provision already explained is applied. Is it possible on the materials in the case stated to find any interest in the deceased which, directly or indirectly, he made over to Peggy Mary Martin? It is easy to be sceptical concerning the beneficial interest in the land comprised in "Bibaringa" when the legal ownership was vested in Mary Jane Gale and M. C. R. Gale, but there is no warrant at all in the case stated for treating them as anything less than full beneficial owners. When Mrs. M. C. R. Gale fell in with the proposal that she should transfer her undivided interest to Leslie Ross Gale on the dissolution of the partnership between the brothers no enforceable contract arose between her and her brother-in-law. Indeed the commissioner seems to have placed no reliance on this transaction as investing the deceased with any disposable interest in the land. We therefore know little of the transaction in detail or her part, if any, in it. It is described in more than one paragraph in the case stated and in terms apt enough to describe the making of a contract. A document from a solicitor's office is annexed to the case. It is entitled "Suggested basis for dissolution". It contains words which rather support the hypothesis of an agreement but no payment had taken place, no transmutation of possession and there was no writing. It could not therefore have amounted to an enforceable contract. Perhaps there is enough to found a conjecture that when Miss Peggy Mary Martin became the purchaser there was a novation of whatever contract may have been discoverable between Mrs. M. C. R. Gale and her now deceased brother-in-law, but it could be no more than a conjecture and, even if it were so, much more should be known about the materials on which the novation was founded before it could be held that the deceased made over by that means to Peggy Mary Martin a right already subsisting in him to the property. Were it so there would still remain some unanswered questions. What was the value of that right? Did the deceased bind himself to furnish the money? If so, in any enforceable way? The learned Solicitor-General was conscious of these difficulties and cited Skidmore v. Bradford [1] . Sir Frederick Pollock treated that case as one of contract and nothing else: see Pollock on Principles of Contract 9th ed. (1921), p. 760 note. But in any case on the materials before us it is impossible to pursue such a line of reasoning to a conclusion in favour of the commissioner. It is quite evident that this was not the case upon which the commissioner relied. What he sought to have determined was that the total transaction amounted to a gift not of money but of an interest in land. The judgment of the Full Court of the Supreme Court is right and the appeal should be dismissed.

I have had the advantage of reading the judgment of the Chief Justice. I agree in his Honour's reasoning and in his conclusions.

Upon a case stated pursuant to s. 124 of the Stamp Duties Act 1920-1949 N.S.W. the Supreme Court of New South Wales (Full Court) decided that L. R. Gale deceased, who died on 29th July 1950, had within three years of his death made a gift of £2,250 in money and not of a one-half interest as tenant in common in a grazing property called "Bibaringa", which interest at the date of the death of the deceased and after allowing for a mortgage liability was worth £28,271 17s. 6d., and accordingly answered a question that the value of the gift for purposes of the assessment of death duty upon the estate of the deceased was £2,250 and not £28,271 17s. 6d. The Commissioner of Stamp Duties has appealed to this Court against that decision.

The relevant facts are simple enough. Prior to 1947 L. R. Gale and his brother R. A. Gale had carried on the business of graziers in partnership under the firm name of "Bibaringa Pastoral Company" on "Bibaringa" which was then owned by their respective wives as tenants in common in equal shares. The marriage between L. R. Gale and his wife was dissolved on 19th December 1947 and thereafter he bought from his former wife her half share in "Bibaringa" for £2,250 which was its true value after making allowance for the existing mortgage of £19,000. L. R. Gale wanted to make his home on "Bibaringa" and accordingly agreed (1) with R. A. Gale, that the partnership between them should be dissolved as from 1st July 1947, and (2) with M. C. R. Gale, the wife of R. A. Gale, to purchase her half interest in "Bibaringa", subject to the mortgage, for £2,250. These agreements were subject to an over-riding stipulation that if "Bibaringa" should be sold within seven years and the price of the "equity, plant and machinery, motor vehicles and household furniture exceed £23,500 net" the profit on the sale should be divided equally between L. R. Gale and R. A. Gale. The agreement between L. R. Gale and M. C. R. Gale for the purchase of her interest in "Bibaringa" was oral and it is common ground that it was unenforceable and that L. R. Gale did not by reason thereof obtain any proprietary interest in "Bibaringa." At this point it is desirable to set out in terms part of the case stated. "Subsequently" (i.e. to the agreements I have just mentioned) "it was agreed at the request of the deceased that the said interest in the said property as tenant in common of the said Myrtle Catherine Rowell Gale should be sold not to the deceased as aforesaid, but to one Peggy Mary Martin whom the deceased then intended to marry, but between whom and the deceased there then existed no engagement of marriage. A contract of sale was entered into between the said Myrtle Catherine Rowell Gale and the said Peggy Mary Martin for the sale and purchase of the said interest of the former in "Bibaringa" on 5th December 1947" (par. 3 (1)). The contract price of the interest subject to the mortgage was £2,250. As a result of these transactions L. R. Gale owed R. A. Gale £3,320 11s. 5d. arising out of the dissolution of the partnership and P. M. Martin owed M. C. R. Gale £2,250 for her half interest in "Bibaringa". The total amount of £5,570 11s. 5d. was paid by L. R. Gale to R. A. Gale by four payments made between 22nd December 1947 and 18th March 1948. Out of these moneys R. A. Gale accounted to M. C. R. Gale for £2,250. On 30th September 1948 M. C. R. Gale transferred her interest in "Bibaringa" to P. M. Martin who had, by that time, married L. R. Gale. It is only necessary to add that when after the death of L. R. Gale "Bibaringa" was sold for £86,882, R. A. Gale who was his brother's executor claimed that the estate was indebted to him for £31,047 16s. 10d. under the overriding agreement previously mentioned, and the Commissioner of Stamp Duties allowed this amount as a deduction in ascertaining the value of the estate of the deceased. The commissioner claimed, however, that the gift admittedly made by L. R. Gale to Peggy Martin within three years of his death was not £2,250 in money but was a half interest in the equity of "Bibaringa". It was this issue that the Full Court decided in favour of R. A. Gale as executor of the will of L. R. Gale deceased, on the simple ground that L. R. Gale had never had any interest in "Bibaringa" to give to Peggy Martin and that what he had given her was the money which he had paid in satisfaction of her liability to M. C. R. Gale under the contract between them for the sale and purchase of an half interest in "Bibaringa".

Death duty is imposed by the Stamp Duties Act 1920-1949 N.S.W. and the section here relevant is s. 102 which for purposes of the assessment and payment of death duty enumerates certain classes of property which are to be included as part of the estate of a deceased person. The list begins with the actual estate of the deceased, that is, property of the deceased at the time of his death to which persons become entitled under the will or upon the intestacy of the deceased. The list does not, however, stop there but goes on to require the inclusion of certain other descriptions of property, being, in the main, property which the deceased had owned but of which he had disposed in various ways before his death. One such class is that described in s. 102 (2) (b) which is the provision applicable here. It is, so far as is relevant, as follows: "(b) Any property comprised in any gift made by the deceased within three years before his death, and whether made before or after the passing of this Act including any money paid or other property conveyed or transferred by the deceased within such period in pursuance of a covenant or agreement made at any time by him without full consideration in money or money's worth. Where the property comprised in any such gift consists of money, or money is paid as aforesaid in pursuance of any such covenant or agreement the property to be included in the estate pursuant to this subparagraph shall be the actual amount of the money given or paid". This provision upon its face is concerned with property which the deceased gave away during the three years before his death. In other words, it is concerned with what passed from the deceased by way of gift.

In considering s. 102 (2) (b) it is necessary, particularly having regard to the argument of the Solicitor-General for the appellant, to refer to several definitions in s. 100. "Gift" means "any disposition of property made otherwise than by will without full consideration in money or money's worth". "Disposition of property" means "(a) any conveyance, transfer, assignment, mortgage, delivery, payment, or other alienation of property whether at law or in equity; (b) - (d) (e) any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own estate and to increase the value of the estate of any other person, whether in any of the cases referred to in the foregoing paragraphs the disposition is effected with or without an instrument in writing."

Many authorities were cited in argument from which can be extracted statements, some favouring one view and others the opposite view, on the question whether upon the statute that in each case applied and on the facts of the particular case a gift was one of money or of property paid for with money provided by the donor. Thus in In re Gibb [1] a'Beckett A.C.J. and Hodges J. decided that a gift was of a house whereas Hood J. decided that it was of money that paid for the house; on appeal in Union Trustee Co. of Australia Ltd. v. Webb [2] Griffith C.J. accepted the view of a'Beckett A.C.J. and Hodges J. whereas Isaacs J. agreed wholeheartedly with the view of Hood J. In Sargood's Case [3] Davidson J., in a judgment with which the other members of the Full Court concurred, decided that a gift was of money and not of a house purchased with the money. In Murdoch's Case [1] Davidson and Street JJ. decided against the judgment of Jordan C.J. that the gift there in question was of shares, not money. In Teare's Case [2] Williams J. regarded a gift as a gift of money notwithstanding that it was the intention of the donor that it should be used for the purchase of shares. The text books treat the matter tentatively. See Dymond on Death Duties 12th ed. (1955), p. 149 and Green on Death Duties 4th ed. (1958), pp. 109 et seq. The differences that appear in the judgments to which I have referred seem to me to arise, in a large measure, from directing attention on the one hand to what passed from the donor and on the other to what the donee received and retained; these are not always the same thing, as this case perhaps illustrates. I consider, however, that if in any particular case the question is what passed from the donor, it would have to be a special case before it would be proper to look beyond money which a donor in fact gave to a donee to what the donee bought from a third person with that money even if the money was given for the very purpose of making the purchase which was made. In Sneddon v. Lord Advocate [3] in a passage upon which the Solicitor-General placed great reliance, Lord Reid, in my opinion, did no more than envisage the possibility of such a special case and leave it open for further consideration when he said: "One can figure a case where the donor hands over money with instructions to buy a particular investment with it and the taker is obliged to follow those instructions. In such a case it might be said that the real subject of the gift is that investment" [4] . It seems to me that the significant words of this quotation are "the taker is obliged", and that his Lordship had in mind the kind of case where the gift would not be complete until the money which had been handed over had been used in accordance with the instructions of the donor so that there would be no gift until the investment was made.

1. (1915) V.L.R. 126. 2. (1915) 19 C.L.R. 669. 3. (1935) 36 S.R. (N.S.W.) 160; 53 W.N. 28. 4. (1947) 48 S.R. (N.S.W.) 213; 65 W.N. 60. 5. (1941) 65 C.L.R., at p. 145. 6. (1954) A.C. 257. 7. (1954) A.C., at p. 280.

The present case is different. It is a case where the donee herself agreed to purchase the half interest in "Bibaringa", albeit at the instance of the donor and relying upon him to find the purchase money, and the donor paid the vendor the purchase money owing to her by the donee. What passed from the donor was money; each payment was made to the vendor in satisfaction pro tanto of the liability of the donee; in consequence of such payments the vendor in accordance with the contract of sale transferred the property to the donee. I agree with the Full Court that in these circumstances the gift was a gift of money and I consider that the gift was made at the time of the payments of the money. This is a case where the donor paid all the purchase money owing by the donee but it would, in my opinion, make no difference to the character of the gift if the donee had herself paid part of the purchase price. If that had been the case it would have been difficult to treat the gift as a gift of a half interest in "Bibaringa". Furthermore, I think that some assistance can be derived from taking a case where a donor makes a series of payments in satisfaction of the liability of a donee for the purchase price of property, some of which are made within and some of which are made outside the period of three years before the death of the donor. If, on the one hand, the payments constitute the gift, then those within the period would be brought to duty by s. 102 (2) (b) but those outside the period would not for the simple reason that they were not gifts made by the deceased within three years before his death. On the other hand, the unreality of treating the gift as a gift of the property purchased is, in such a case, revealed by asking whether such a gift was made within or without the three year period.

The Full Court reached its conclusion by regarding the payment of the money as constituting the disposition of property by the donor so that it fell, and fell exclusively, within par. (a) of the definition of disposition of property in s. 100. With this I agree. It was, however, argued by the Solicitor-General that par. (e) of the definition of "disposition of property" was applicable either additionally or alternatively and that for the purposes thereof the "transaction" was to be found in Peggy Martin's entering, at the instance of L. R. Gale, into a contract for the purchase of the half interest in "Bibaringa" on the footing that the purchase money would be paid by L. R. Gale and that she would in due course become the transferee of the property, and in the carrying out of these arrangements.

It is, in my opinion, open to question whether par. (e) of the definition of "disposition of property" can have any application to a case where there has been an actual alienation of property by a donor to a donee. If, however, par. (e) can be made to apply to a disposition also falling within one of the preceding pars. (a) to (d) and if this could in any circumstances make any difference, I do not think that it would help the commissioner in this case. What L. R. Gale did was to diminish the value of his own estate or, more correctly as I think, to diminish his own estate by £2,250 and if, as I consider it must be, attention is directed to what L. R. Gale gave away, then the application of par. (e) results in the conclusion that the gift was of £2,250 and not of any interest in "Bibaringa". Neither his estate, nor the value of his estate, was diminished by parting with any interest in "Bibaringa".

I share the view of the Full Court that here the donor, having no interest in "Bibaringa", cannot be regarded as having given Peggy Martin the interest which she obtained by virtue of a contract to which the donor was not a party and under which he obtained no rights and incurred no obligations, notwithstanding that it was probably the common intention that he would provide the moneys necessary to meet the donee's obligations under that contract. The words of Isaacs J. in Union Trustee Co. of Australia Ltd. v. Webb [1] are apposite: "The facts are that the wife herself purchased in her own name and on her own behalf, and signed the contract creating a contractual obligation on her own part to pay the purchase money. What her husband did was to provide her with the means of payment. In a sense, and a substantial sense, colloquially speaking, he gave her a property just as he might be said to give her a dress. But in law - and we have here to do with law - he did not give her a house but the money to pay for it The house never was his in law or in equity; in other words, he never at any moment of time had the smallest interest in it, and never would it have been part of his estate" [2] . The judgment of Owen J. with which Roper C.J. in Eq. and Herron J. concurred stated the law in similar terms and stated, correctly I think, that there is nothing in Sneddon's Case [3] inconsistent with it. For these reasons I think that the judgment of the Full Court was correct and this appeal must be dismissed.

1. (1915) 19 C.L.R. 669. 2. (1915) 19 C.L.R., at p. 676. 3. (1954) A.C., 257.