Lewis v Federal Commissioner of Land Tax [1914] HCA 12; (1914) 17 CLR 566 (17 March 1914)

HIGH COURT OF AUSTRALIA

Lewis and Others Appellants; and The Federal Commissioner of Land Tax Respondent.

H C of A

17 March 1914

Griffith C.J., Barton, Isaacs, Gavan Duffy and Rich JJ.

Bryant, for the appellants,

Pigott, for the respondent, was not called upon.

Griffith C.J.

The provision in force on the day as of which this assessment was made, 30th June 1911, was sec. 38 of the Land Tax Assessment Act 1910 as amended by the Land Tax Assessment Act 1911. Sec. 38 (7) provides that "where, under a settlement made before 1st July 1910, or under the will of a testator who died before that day, the beneficial interest in any land or in the income therefrom is for the time being shared among a number of persons, all of whom are relatives of the settlor or testator by blood, marriage, or adoption, in such a way that they are taxable as joint owners under this Act, then, for the purpose of their joint assessment as such joint owners, there may be deducted from the unimproved value of the land, instead of the sum of £5,000 as provided by paragraph (b) of sub-sec. 2 of sec. 11 of this Act, the aggregate of the following sums, namely:—In respect of each original share in the land under the settlement or will—(a) the sum of £5,000, or (b) the sum which bears the same proportion to the unimproved value of the land as the share bears to the whole, whichever is the less." The term "original share in the land" is defined to mean "the share" (the word "the" appears to be redundant) "of one of the persons specified in the settlement or will as entitled to the first life or greater interest thereunder in the land or the income therefrom, or to the first such interest in remainder after a life interest of the wife or husband of the settlor or testator."

In the present case the appellants are trustees for nine persons who are joint owners of the estate. The question is whether those nine persons are joint owners of original shares in the land within the meaning of the definition. The testator gave the land in question for the benefit of his daughter for life with remainder to those nine persons, who are her children, in equal shares. Can they say that they are holders of original shares in the land? Are they "persons specified in the settlement or will as entitled to the first life or greater interest"? Of course they are not. Are they persons entitled "to the first such interest in remainder after a life interest of the wife or husband of the testator"? The answer to that is, No. They are, therefore, not within the exemption, but within the general rule as to joint owners; and there is no more to be said about it.

Barton J.

I am of the same opinion.

Isaacs J.

I agree, and will only add one or two words. Sub-sec. 8 of sec. 38 defines "original share in the land" as being, first, "the share of one of the persons specified in the ... will as entitled to the first life or greater interest thereunder in the land or the income therefrom." That might be an estate in fee held by several persons jointly. The next is the share of one of the persons specified in the will as entitled "to the first such interest in remainder after a life interest of the wife or husband of the ... testator." Now the words "such interest" mean a "life or greater interest," and that is to be an interest in remainder after possibly only a life interest of the wife or husband of the testator. It is quite evident that if the estate in remainder is one in fee it cannot be identical with the life interest given to the wife or husband, and therefore the contention that the share of these appellants is the same share as that of their mother cannot be upheld.

Gavan Duffy J.

I agree.

Rich J.

I agree.

Questions answered—(1) No. (2) Yes, on the unimproved value of the land less £5,000.

Solicitors, for the appellants, Madden, Drake & Candy.

Solicitor, for the respondent, Gordon H. Castle, Crown Solicitor for the Commonwealth.