R v Ballarat Trustees Executors & Agency Co Ltd [1919] HCA 67; (1919) 27 CLR 257 (11 December 1919)

His Majesty the King Respondent, Appellant; and The Ballarat Trustees, Executors and Agency Company Limited Petitioner, Respondent.

This appeal arises on a special case stated by the parties on a petition to recover back £119 17s. 6d. alleged to have been overpaid for probate duty. The duty was claimed under one specific section of the Administration and Probate Act 1915 of Victoria. The Supreme Court, by a majority, held that the petitioner was entitled to succeed.

In Attorney-General v. Seccombe[1] Lord Sumner (then Hamilton J.), on a corresponding section of the English Act, said: "In construing a taxing Act the presumption is that the Legislature has granted precisely that tax to the Crown which it has described, and no more; and there is no presumption in favour of extending the scope of the Act." Looking, then, at sec. 143 we find it is limited in terms to the case of "Every conveyance or assignment gift delivery or transfer of any real or personal property, whether made before or after the commencement of this Act, purporting to operate as an immediate gift inter vivos whether by way of transfer delivery declaration of trust or otherwise." The words "purporting to operate as an immediate gift inter vivos" constitute the frontiers of the class of the transactions called conveyances, assignments, gifts, deliveries or transfers, which is made subject to the section. If any such transaction does not fall within that class, it does not fall within the section.

The burden of showing that the transactions are of such a character as to have made the property dutiable under the section is on the Crown. To do that in the present instance, the Crown has undertaken to show, first, that there purported to be a gift inter vivos of £2,305 5s. 9d., and then, that par. (b) applies to the facts of the case. The chief point relied on by the Crown as to the first branch is that the property dealt with was, as the petitioner admits, worth at the time of transfer £7,537, while, after capitalizing the annuity, the total consideration did not exceed £5,231 14s. 3d., the balance being the sum of £2,305 5s. 9d. above mentioned. The agreement in its terms purports to be a sale and not a gift of the land, and the Crown does not say the transaction was a sham. Nor does it attack it under sec. 146 as one entered into with "intent to evade the payment of duty." But, assuming it to be real and not to be made with the forbidden intent, it is said that it purports to operate as a gift inter vivos of the difference between the real value of the land and the money consideration set out in the written agreement. There is no claim to treat as undone, or to disregard, anything that was done. The transaction is left unimpeached and to be really what it purports to be, but the argument is that when the whole transaction is examined its effect is, and the proper construction it bears is, that there was a gift of the difference in value. It is difficult to understand the case so made. If it is conceded that the land was sold and not given, then there seems no room for contending that portion of its value was the subject of donation. If it is contended that the land was never sold at all, or was sold with intent to evade the payment of duty, not only would a case have to be made showing the transaction to be either a sham or contrary to sec. 146, but the whole land and not merely its excess value would probably be the subject of taxation (see Seccombe's Case[2]). The case for the Crown, however, being simply that £2,305 5s. 9d., part of the value of the land, was given, it is sufficient to say that it is not enough that the Crown should create a doubt or a suspicion. It must sustain its burden by satisfying the Court that the construction it contends for is the true one.

It is palpable that the mere fact of property being proved to have been worth more than it was purchased for in any ordinary transaction of sale cannot suffice to constitute a gift of the difference. In the present instance it is true that the parties were father and sons, and that the father was eighty years of age, and that the property sold was more valuable in fact than the money consideration named in the agreement. But as the agreement is not attacked as a sham or a fraud, its legal effect only being contended for, it is most material to observe that it purports to be a sale (see Denny v. Denny and Warr[3]), and that the consideration is not merely an annuity, which if it stood alone might give rise to other consequences. There is, besides the annuity, one money consideration of £3,644 14s. 3d. due to the bank on the father's personal guarantee. Though this sum was for the benefit of the business, yet the father had the controlling interest, and we are not informed to what, if any, extent the father was ultimately to bear the burden of the guaranteed debt. It is admitted that the stock-in-trade and book debts were not worth the liabilities of the business. Further, there is the payment of £500 to Alfred James Long. Again, there are covenants to indemnify the father in respect of any claims by the bank or Alfred James Long, and there is no allegation either that these were useless or were exhausted. No reliable inference can be founded on the facts as stated in the special case, supplemented by the further facts agreed on, which would satisfy the burden undertaken by the Crown to prove the property taxable.

The judgment appealed from appears to us to be right, and the appeal should be dismissed with costs.

[1] (1911) 2 K.B., at p. 703.

[2] (1911) 2 K.B., at p. 699.

[3] (1919) 1 K.B., 583, at p. 592.

High Court of Australia

R v Ballarat Trustees Executors & Agency Co Ltd [1919] HCA 67; (1919) 27 CLR 257 (11 December 1919)

HIGH COURT OF AUSTRALIA