Registrar of Probates (SA) v Rymill [1917] HCA 22; (1917) 23 CLR 163 (1 June 1917)

HIGH COURT OF AUSTRALIA

The Registrar of Probates for South Australia Appellant; and Rymill and Others Respondents.

The Registrar of Probates for South Australia Appellant; and Elder's Trustee and Executor Company Limited Respondents.

H C of A

On appeal from the Supreme Court of South Australia.

1 June 1917

Isaacs, Powers and Rich JJ.

Cleland K.C. (with him Richards and Hicks), for the appellant.

Piper K.C. and Bennett, for the respondents.

Cleland K.C. was not called upon to reply.

The judgment of the Court, which was read by Isaacs J., was as follows:—

June 1

Isaacs, Powers and Rich JJ.

The point which is the same in both cases is a very short one. It is really whether the "property derived" by a successor from his deceased predecessor is the property or a share of the property as owned by the predecessor at the time of his death, or is that property or a share of that property less the amount of Commonwealth estate duty. In our opinion it is the former.

The nature of the succession duty under the Act of 1893 (No. 567) is a duty, as the name denotes, on the succession by the derivative owner from the predecessor and the duty is substantially on the property derived by the successor. It has been correctly dealt with in In re Gray[1]. So far we agree with the contention of the respondents. So did the learned primary Judge. The respondents, however, maintained that, in arriving at the net present value of the derived property, there should be deducted, among any other obligations, an adjusted allowance in respect of the Commonwealth estate duty upon the whole estate of the deceased. It is said the Federal Act is paramount, and taps, so to speak, the deceased's estate before it reaches the successors, who get the residue only. That is based on a misconception and a misinterpretation of the State Act.

That Act, passed in 1893, must have the same meaning to-day as it had then. Sec. 6 makes the administrator the hand for payment of the duties prescribed by the Second Schedule, but he is bound by sec. 31 to adjust their incidence. The basis of taxation is declared by the Second Schedule to be the "net present value" of the property derived. Sec. 7 declares how far the "property derived" is subject to the duty. Sec. 8 makes the duty "a first charge" on the "property derived."

It is clear, and indeed was admitted in argument, that the "net present value" of the derived property was its value undiminished by the State duty although that was declared "a first charge." Now, what does that connote? It necessarily connotes that the Legislature meant the "derived property" which was taxed to be the property just as it passed from the predecessor to the successor. In other words, it is the identical property which the predecessor held, that is either the whole or the proper portion derived by the successor according to the ordinary law of devolution and irrespective of taxation.

If confirmation of this view were needed, it is found in the Second Schedule itself as well as in the Third Schedule. The provisoes to those schedules declare that in the case of certain beneficiaries half rates shall be charged "if the net present value of the whole of the estate of the deceased is under £2,000." Nothing is there said about actual benefit received, and the words obviously relate to the net value of the estate as the deceased left it. Reading that in connection with the words already interpreted, no room seems left for any doubt.

That, then, was the legislative will of the Parliament of South Australia. The mere fact that another competent legislature for its own purposes has since imposed another tax upon the estate of the deceased does not alter the meaning of the South Australian Act. The Commonwealth Act and the State Act operate simultaneously and independently. Each imposes a tax on the occasion of the predecessor's death—the one based on the value of the estate he leaves, and the other on the value of the share or shares of that property to which according to the ordinary law his successor or successors become entitled by reason of his death. The mere fact that the Commonwealth charge takes precedence of the State charge is immaterial to the point we are considering; it is a superior remedy, but it does not alter the nature of the right.

For these reasons we are of opinion that the Registrar's contention is correct, and that the appeals should be allowed with costs in both Courts.

Appeals allowed. Orders appealed from discharged. Appeals to Supreme Court dismissed with costs. Appellant to have costs of appeals to this Court.

Solicitor for the appellant, F. W. Richards, Crown Solicitor for South Australia.

Solicitors for the respondents, Stock & Bennett; Bakewell, Stow & Piper.

[1] (1899) S.A.L.R., 68.