Archer v Deputy Federal Commissioner of Land Tax, Tasmania [1914] HCA 4; (1914) 17 CLR 444 (19 February 1914)

HIGH COURT OF AUSTRALIA

Archer and Another Appellants; and The Deputy Federal Commissioner of Land Tax, Tasmania Respondent.

H C of A

19 February 1914

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

Waterhouse, for the appellants.

L. L. Dobson, for the respondent,

Feb. 19

Griffith C.J.

The question submitted in this case depends upon the construction of sec. 38A of the Land Tax Assessment Act, which was introduced by an amendment of the Act in 1912. I have referred in my judgment in the previous case (Parker v. Deputy Federal Commissioner of Land Tax, Tasmania[1]) to the provisions of the law as they stood before that amendment.

Sec. 38A is as follows:—

(1)

Where, under a settlement made before 1st July 1910 or under the will of a testator who died before that day (in this section referred to as the "original settlement or will") together with a settlement made before that day by a beneficiary under the original settlement or will of his share thereunder or a will of a beneficiary under the original settlement or will 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, who are relatives by blood, marriage, or adoption of the original settlor or testator 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 of the joint owners who holds an original share in the land under the original 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, after deducting the value of any annuity under sec. 34 of this Act, as the share bears to the whole,

whichever is the less.

An important change is here introduced. While the amendment of sec. 38 made by the Act of 1911 had only included persons holding directly under a settlement or will taking effect before 1st July 1910, this provision includes persons holding under a settlement or will taking effect before that day, together with a like settlement or will made by a beneficiary under the original settlement or will. But the condition of the benefit is still to be that the beneficiaries are relatives by blood, marriage, or adoption of the original settlor or testator. A change is also made in the language by using the words "a number of persons, who are relatives by blood, marriage, or adoption" instead of the words "a number of persons all of whom are relatives by blood, marriage, or adoption." But the original sec. 38 as amended by the Act of 1911 was not altered in that respect. In cases falling within that section all the beneficiaries must be relatives, as we decided in the previous case (Parker v. Deputy Federal Commissioner of Land Tax, Tasmania[2]), and the provision now under consideration does not make any difference in such a case. But it extends the class of relatives to be included in the benefit so as to include those taking under what has been called a subsidiary settlement or will. The deduction is to be made "in respect of each of the joint owners who holds an original share in the land under the original settlement or will." I need not repeat the definition of "an original share." In the present case the land is held by trustees under the will of a testator who died in 1886, and the assessment is in respect of land as held on 30th June 1913. There were several beneficiaries under the original settlement. Their right to claim deductions under sec. 33 of the original Act was discussed and determined by this Court in the case of Archer v. Federal Commissioner of Land Tax[3]. It is sufficient, for the present purpose, to say that two of the beneficiaries were grand-children of the settlor, namely, Jessie Harriett Adams and John Garibaldi Marriott Adams. In 1909 Jessie Harriett Adams, then Jessie Harriett Edyvean, made an appointment directing that her share should be held by the trustees of the settlement in trust as to one-third to pay the annual income thereof to her husband during his life, and as to another one-third to pay the annual income for the benefit of her mother during her life, and subject to those payments to hold the share in trust for her brother John Garibaldi Marriott Adams. She and her mother are both dead. There is no question that Mrs. Edyvean's share was an original share within the definition given in the Act, or that what she settled was that original share. The words of sec. 38A are "together with a settlement made before that day by a beneficiary under the original settlement or will of his share thereunder." The subject matter of the settlement therefore falls within the Act, and the result of it was that three persons, all being relatives of the original settlor by blood or marriage, became entitled to interests in Mrs. Edyvean's share. They therefore fall within the exact words of sec. 38A unless that construction is cut down by the use of the words "each of" in the phrase "each of the joint owners who holds an original share in the land under the original settlement or will." The question, therefore, is whether her brother, J. G. M. Adams, and her husband can collectively be treated as the holder of an original share. If they can, the case falls exactly within the Act. In my judgment, having regard to the statutory rule of interpretation of federal Statutes that words in the singular include the plural unless a contrary intention appears, there is no reason to doubt that the case falls within the Act. Indeed, if it did not, this singular position would arise, that, although sec. 38A is obviously intended to continue the benefit of the deduction as long as the property remains in the family of the original settlor, yet it only applies when the subsidiary settlement is in favour of a single person.

So far, therefore, from there being contrary intention, there is a manifest intention that the general rule shall apply. I am, therefore, of opinion that these two beneficiaries are collectively the holder of an original share within the section, but so that only one deduction can be made in respect of it. If there is no more in the case, the appellants will be entitled to succeed. But if it should turn out that any of the other shares have been alienated, the right to the deduction will cease for the reason given in the preceding case. That can be determined by the Court of first instance when the case is remitted.

For these reasons I think that the question should be answered in the affirmative.

Barton J.

I concur.

Gavan Duffy J.

I agree.

Question answered in the affirmative.

Solicitors, for the appellants, Ritchie & Parker, Launceston, by Simmons, Wolfhagen, Simmons & Walch.

Solicitor, for the respondent, Gordon H. Castle, Crown Solicitor for the Commonwealth, by Dobson, Mitchell & Allport.

[1] Ante, p. 438.

[2] Ante, p. 438.

[3] [1912] HCA 5; 13 C.L.R., 557.