Wedge v Acting Comptroller of Stamps (Vic) [1941] HCA 1

'to transfor the trust property to the residuary beneficiary and the latter under- Rich A.C-1 'in writing to hold the trust property subject to the trusts of the will, Williams JJ. document containing the undertaking is not an " instrument whereby

. property is settled or agreed to be settled" within the meaning of provisions under heading 1X. of the Third Schedule to the Stamps Act 1928 ). Davidson v. Chirnside, (1908) 7 C.LAR. 324, distinguished.

n of the Supreme Court of Vietoria (Lowe J.) reversed.

from the Supreme Court of Victoria. Upton Wedge died on 7th June 1922, leaving him surviving dow, Marie Josephine Wedge, and his son, Ian Charles Wedge. will, the testator appointed the Trustees Executors and vy Co, Ltd. the executor and trustee thereof. By the terms will, after making various bequests, the testator directed his tee to appropriate out of the capital of his estate a sum not ing £1,200 to purchase therewith a house and land to be

76 HIGH COURT {1941 H.C. or A. selected or approved by his wife and to permit her to have the full Hie use and enjoyment thereof during her life so long as she should remain a widow and unmarried, subject to the payment by her of

Weer b all rates, taxes, insurance premiums, the cost of all necessary repain nes and other outgoings, and upon her death, or in the event of he

or Stamps remarriage, he directed that such house and land should fall into (vier:). and become part of his residuary estate. He then provided for his wife an annuity of £234 so long as she remained unmarried aj

widow, and, in the event of her remarriage, an annuity of £78 during

her life. Subject to the trusts in favour of his wife, the testator

directed the trustee to stand possessed of his residuary estate upon

trust in equal shares for such of his children as should survive him

and should have attained or should attain the age of twenty-five

years, and, if there were only one such child, then upon trust

• such child. In the execution of the trust the testator empowe

his trustee to appropriate portions of his estate to satisfy annuit

to postpone any sale or conversion of the trust property, to least

any part of his real estate, to invest in authorized securities, to raise

benefit of the children until they attained twenty-five. By a codicil, the testator also empowered his trustee at its diseretion appropriate out of his estate set aside for her annuity any sum assist his wife in the event of her serious or prolonged illness, and until such appropriation to pay the expenses thereof out of income of his residuary estate.

The son, Ian Charles Wedge, attained the age of twenty-five on 23rd May 1939. By an instrument which, though bearing d 6th December 1939, was in fact executed on 25th October 1939 by

the residuary estate under the last will of Charles Upton Wi deceased, subject only to the bequests therein provided for benefit of my mother Marie Josephine Wedge in consideration of agreeing to the transfer by the executor and trustee of the said ¥

required for that purpose." At the date of this instrument. value of the residuary estate of the testator in Victoria, comprising both realty and personalty, was £10,255. The real estate ¥ transferred by the Trustees Executors and Agency Co. Ltd. to the

son, Ian Charles Wedge, by an instrument of transfer dated 9th April 1940. In the instrument the consideration was stated as follows : "Tn consideration of an arrangement made between the said Marie Josephine Wedge and the said Ian Charles Wedge whereby the said Tan Charles Wedge is entitled to be registered as the proprietor of an estate in fee simple."

Being of opinion that the first-mentioned instrument was chargeable with duty as a deed of settlement upon the value of the 'esiduary estate of the testator in Victoria, the Acting Comptroller of Stamps of Victoria on 29th May 1940 assessed duty thereon at £256 7s. 6d., together with £25 12s. 9d. penalty, and £3 3s. interest. On 4th June 1940 the solicitors for the parties to the instrument paid the duty and penalty and interest, and on the same day, by letter, informed the Acting Comptroller that the parties to the instrument were dissatisfied with his assessment and required him to state and sign a case for the opinion of the Supreme Court of Victoria. In compliance with this requisition and pursuant to sec. 33 of the Stamps Act 1928 (Vict.) William Edward Camier, the Acting Comptroller of Stamps, stated a case, setting out therein the facts as above, and asked the opinion of the court on the following 'questions : -

(a) Was the instrument chargeable with any stamp duty / (b) With what amount of duty was it chargeable ?

The case came on for hearing before Lowe J. on 24th October 1940, and he answered the questions: (a) " Yes"; (b) " With the amount assessed by the Comptroller of Stamps," having held that by 'the instrument the son agreed to hold the property for the benefit of his mother and himself on certain trusts, and, feeeling himself bound by the decision of Davidson v. Chirnside (1), found that the _ instrument was a settlement or agreement to settle within the meaning "of the Third Schedule to the Stamps Act 1928.

_ By special leave, the son appealed to the High Court.

Walker, for the appellant. The result of this transaction is that _ there is nothing but a mere change of trustees (Zncyclopadia of Forms and Precedents, 2nd ed., vol. 18, p. 101). There is no settlement unless there is a settlor and property to be settled by the settlor. must be some disposition. Here the trusts are settled by the not by the instrument. The beneficiary settles nothing belong- ng to himself or anyone else. Davidson v. Chirnside (1) is clearly ishable, as the instrument which was charged there clearly property. The effect of the decision of Lowe J. is that every

Ww Wear r. Acrixe ComPrRoLLER or Stars (Vier.).

ree, WEDGE Acrixa ComPrRoLLER or Sramps (Vier.).

transfer of trust or appointment of new trustee is a deed of se (Inland Revenue v. Oliver (1); Massereene v. Commissio Inland Revenue (2) ). Palles C.B. correctly defines " settlemer in the latter case (Collector of Imposts (Vict.) v. Peers (3) ). :

Ham K.C. (with him A. D. G. Adam), for the respondent. TI is not a mere substitution of one trustee for another. The in the instrument is the son. It may be that it is a joint set by mother and son. There are differences between the will duties under the instrument. Further, there are no powers se in the instrument. Davidson v. Chirnside (4) establishes that, another charter of rights is substituted for an original charter, the later document is a settlement. That case is indistingui: from this. Neither Oliver's Case (1) nor Massereene's Case (5) tou

Ricu A.C.J. This is an appeal from an order of Lowe J. by wh an instrument annexed to a case stated was held to be char, with stamp duty.

The respondent contends that the instrument in question fa within the words of part IX. of the Third Schedule of the Act 1928 (Vict.) as being an instrument other than a will or cod "whereby . . . property is settled or agreed to be s

auch instrument not being made before and in consideration of marriage."

The relevant facts are substantially that the appellant is entitled under his father's will to the residuary estate devised by it subject to an annuity to his mother and that he was entitled to have 1 property transferred subject to his mother's interest. The ii ment the subject of this appeal is as follows : - '' To whom it concern - I Ian Charles Wedge of Werribee in the State of Vieto theological student being of the full age of twenty-five years a entitled to the residuary estate under the last will of Charles Upt Wedge deceased, subject only to the bequests therein provi the benefit of my mother Marie Josephine Wedge in consideratio

(1) (1909) A.C, 427. (3) (1921) 29 C.L.R. 115, at p. 12h (2) (1900) 2 LR. 138, at pp. 146, (4) (1908) 7 C.L.R. 7 147, 150. (5) (1900) 2

of her agreeing to the transfer by the executor and trustee of the 4. ©. oF A. said will to me of the whole of the residuary estate undertake to - '1®4!. hold same subject in every respect to the trusts in the said will contained for her benefit and further to execute all assurances reasonably required for that purpose. Dated the sixth day of ,, December One thousand nine hundred and thirty-nine. - Marie J.

• Wedge. - Ian Charles Wedge." Subsequently the trustees of the "will transferred the property in which the appellant and his mother were interested to the appellant. His Honour the primary judge, considering that the case was q governed by a decision of this court (Davidson v. Chirnside (1) ),
• decided that the instrument in question was a settlement or agreement
• to settle within the meaning of the schedule to the Stamps Act. In my opinion the facts of the case of Davidson v. Chirnside (1) are altogether different from those in this case. There the testator directed a settlement to be executed, and when this was done it contained a succession of interests and the rights, obligations and trusts with respect to the property comprised in it. And any question subsequently arising with regard to the property would be determined by reference to this document and this document only. In Davidson v. Chirnside (1) observations were made to the effect that certain elements were not indispensable though not immaterial. 'The judgment then under appeal, which was written by Cussen J. (2), contains an elaborate examination of the question of what amounts to a settlement for the purposes of the provision under 3 consideration. Though it is true that the judgment of the Supreme Court was affirmed on different grounds and that a different view _ was taken of the nature of the specific instrument, the value of this ~ general exposition of Cussen J. is not diminished. No inclusive _ and exclusive definition can be given of what constitutes a settle- ment. The question must be determined by construing the par- sae instrument, which, of course, includes the transaction set forth in that instrument (Collector of Imposts (Vict.) v. Peers (3) ), and examining its legal effect. The subject instrament contains "no disposition or agreement to dispose of property belonging to the appellant but is merely an acknowledgment or recognition that he isnot the absolute owner of the property comprised in the instrument and preserves other trusts or rights affecting it. No new beneficial
• interest is created in favour of the appellant or anybody else, and
• the property remains subject to the same trusts as it did before the it was executed.

(1) (1908) 7 C.L.R. 324, (2) (1908) V.L.R. 433.624 AKT BN | (8) (1921) 29 C.LR,, at p. 124.

For these reasons I am of opinion that the appeal should be allowe

Srarxe J. This appeal, I agree, should be allowed. 4 The appellant, in the events which have happened, is entitle the residuary estate of the testator, into which ultimately fall house and land provided by the testator for the use of his wife her death or remarriage. But the appellant could not obtain ; conveyance of the residuary estate until the death or remarriage of his mother without her consent. So an arrangement was madi and reduced to writing whereby the mother consented to the executo and trustee of the testator transferring the residuary estate to thy appellant subject to the trusts in the testator's will for her and the appellant undertook to hold the same subject in every re

In my opinion, the document does not resettle or create any n trusts in respect of the residuary estate but provides for the execution of the trusts of the will in favour of the appellant sooner than other wise would have been possible under the will of the testator and fo1 the observance of the trusts in the will of the testator in favour of the appellant's mother. The learned judge from whom this appeal is brought would, I gather, have reached the same conclusion

the instrument in the present case. This view is supported by th cases of Massereene v. Commissioners of Inland Revenue (2) a Turnbull's Trustees v. Inland Revenue (3), and is not in conflict ¥ the decision of this court in Davidson v. Chirnside (1).

Wixtrams J. Charles Upton Wedge, hereinafter called the tator, died on 7th June 1922, leaving him surviving his widow, Josephine Wedge, and one child, a son, Ian Charles Wedge. son attained the age of twenty-five years on 23rd May 1939. By hi last will, dated 24th October 1921, and a codicil thereto, dated 2 November 1921, the testator appointed the Trustees Executors Agency Co. Ltd. his executor and trustee, and, after providin

(1) (1908) 7 C.L.R. 324. (3) (1909) S.C. 248; sub nom. Ine (2) (1900) 2 LR. 138. land Revenue v. Oliver, (1908) .C. 427,

certain benefits for his widow, directed that, subject to the trusts H- ©. or A in her favour, his trustee should stand possessed of his residuary isd estate for such of his children as should survive him and attain the Wrpoe age of twenty-five years and, if there should be only one such child, t. then upon trust for such child. The testator directed his trustee to PB cco appropriate out of the capital of the residue a sum not exceeding or Stasrs £1,200 in order to purchase a house and land in one of the suburbs Carr of Melbourne for the use and enjoyment of the widow during her life Williams 3 or widowhood, subject to the payment by her of certain outgoings.

'and to pay to her out of the income of the residue an annuity of

£234, to be reduced to £78 if she remarried. The will gave the trustee

power to appropriate a sum out of the capital of residue to satisfy

the annuity and to pay thereout any extraordinary expenses which

the widow might incur on account of a serious or prolonged illness.

By the codicil the testator empowered his trustee, until such an appropriation, to pay such expenses out of the income of residue.

'The will contained a trust for conversion, and, pending the same, to

lease the real estate ; and also power to invest any moneys liable to

be invested under the will in certain prescribed investments, including fully-paid-up preference shares in any banking or trading company

in Australia. When the son attained the age of twenty-five years

'the only beneficiaries still interested in the estate of the testator

were himself and the widow. On 25th October 1939 they executed

the following document, which bears date 6th December 1939 :

"Tan Charles Wedge of Werribee in the State of Victoria theological

student being of the full age of twenty-five years and entitled to the -Tesiduary estate under the last will of Charles Upton Wedge deceased,

: ibject only to the bequests therein provided for the benefit of my

mother Marie Josephine Wedge in consideration of her agreeing to

the transfer by the executor and trustee of the said will to me of the

whole of the residuary estate undertake to hold same subject in every

Tespect to the trusts of the said will contained for her benefit and

further to execute all assurances reasonably required for that Pursuant to clause 11 of the will, the trustee had purchased a home

for the widow at 185 Union Road, Surrey Hills, Melbourne. The

4 in the estate at the date of the document consisted of personalty

at £4,230 and realty, including the home, valued at £6,165. document was presented to the trustee, which proceeded to

asfer the assets to the son. An instrument of transfer of the land,

ing the home, was executed by the trustee to the son at the

ae 'of the widow, the instrument being signed by the trustee, \ 6

H. C. or A. the widow and the son. The transfer was stated to be in considera-

es tion of an arrangement made between the widow and the son whereby Wags! he was entitled to be registered as the proprietor of an estate in fey v. simple in the land. 4

ConTING 4, Ib is to be noted that the document dated 6th December 1939 only or Srames referred to the residuary estate of the testator, but, in view of the (Vier.). inclusion of the land purchased for the home in the instrument of Williams J. transfer and the fact that upon the cesser of the widow's interest i would fall into the residue, it is evident that this land was treated as _

part thereof. The Acting Comptroller of Stamps claimed that the document came precisely within the words of part TX. of the Third Schedule to the Stamps Act of 1928 and was an instrument other than a will or codicil "whereby . . . property is settled or agreed to be settled . . . such instrument not being made before and in consideration of marriage." His claim was upheld by the Supreme

Court of Victoria. The son has now appealed to this court against the decision of the Supreme Court. ' In my opinion the appellant is entitled to succeed. F In Massereene v. Commissioners of Inland Revenue (1) Palles 0.B. said: "It is essential to such an instrument that there shall be -

1, such free property, by which I mean property which then is not, according to our jurisprudence, subject to the trusts in question; - 2, a settlor, who either is, or appears on the face of this instrument - to be, competent to subject that free property to trusts which, until -

the execution of the instrument, did not bind it; and 3, an imposition

by the instrument of such trusts upon such property." The docu- ment was executed by the widow as well as the son, but the under-

taking which it contained was that of the son. He was therefore the

only possible settlor, but he did not purport to settle or to agree to

settle any property of his own for the benefit of the widow. He only acknowledged she had certain rights in the property under the trusts

of the will and undertook to hold it subject to those trusts. He and

the widow, as only persons interested in the property, were entitled

to call upon the trustee to transfer it according to their directions.

As a result of the transfer he only acquired the same beneficial

interest in the property as he already had under the will. He could

only create new trusts of his own property. As he did not acquire

an absolute interest in any of the property which was transferred to

him he could not and did not purport to create new trusts affecting

such an interest corresponding to the trusts of the will. His under-

taking was a mere recognition of existing trusts. The case is there

fore distinguishable from that of Davidson v. Chirnside (2). In that

(1) (1900) 2 LR., at p. 146. (2) (1908) 7 C.L.R, 324.

the instrument, which was held liable to duty, contained such 4- ©: oF A- tions as are ordinarily contained in settlements, was executed pels

settlor, namely, the trustees of the will, and settled property, Weyer

a sum of money which the trustees had been authorized by v

tor to settle. As Griffith C.J. pointed out (1), the rights «670 sn

ferred or declared by the settlement were, ina real and substantial or Sramrs

e, new rights. Isaacs J. said that the new trusts, although they (Yee

ponded to the trusts of the will, were not trusts of the will (2). Williams J.

Appeal allowed. Order of the Supreme Court discharged and in lieu thereof order that question a be answered: No, and that the respondent pay the appellant's costs in this court and in the court below.

citor for the appellant, Bernard Nolan. itor for the respondent, Frank G. Menzies, Crown Solicitor for

1908. 7 C.LLR., at p. 340. (2) (1908) 7 C.LAR,, at p. 345.