Carmichael v Commissioner of Stamp Duties (Qld) [1926] HCA 20; (1926) 38 CLR 465 (29 June 1926)

HIGH COURT OF AUSTRALIA

Carmichael and Others Appellants; and The Commissioner of Stamp Duties for Queensland Respondents.

H C of A

On appeal from the Supreme Court of Queensland.

29 June 1926

Knox C.J., Higgins, Gavan Duffy and Starke JJ.

Stumm K.C. (with him Graham), for the appellants.

Henchman, for the respondent.

The following judgments were delivered:—

June 29

Knox C.J.

My brother Gavan Duffy and I are of opinion that the answers given by the Supreme Court to questions submitted by the special case are correct. We think that the Act of Parliament imposes a duty on every instrument whereby property is settled or agreed to be settled if such instrument contains a trust, and that the amount of duty is determined by the value of the property settled. The indenture in question in this case is an instrument whereby property is settled, and it contains a trust. There remains the question whether the whole or only a portion of the property to which it refers is settled within the meaning of the statute. We think the whole of the property specified in its schedule is so settled.

For these reasons we are of opinion that the appeal should be dismissed.

Higgins J.

In my opinion the decision of the Full Court, on this case stated by the Commissioner, is right. The difficulties seem to me to vanish when it is realized clearly (1) that this stamp duty is a tax on instruments—written or printed documents (sec. 4; sec. 2, "instrument")—not a tax on property or on property settled; (2) that the expression "settlement" means any deed whereby any property—not all the property therein comprised—is settled or agreed to be settled (sec. 2); and in the deed in question here some at least of the property comprised in the deed is settled—the sum of £1,572 0s. 6d. for the Wright infants; (3) that an instrument which is a settlement of any property containing any trust is liable to ad valorem duty at 5 per cent if the property exceed £9,000 in amount or value (First Schedule, "settlement"); and this instrument contains a trust—contains trusts; and the property in the settlement—in the instrument called a "settlement"—exceeds £9,000. Amalgamating sec. 2 and the Schedule as to settlement, I read the words of the Schedule as if they were "Any instrument whereby any property is settled or agreed to be settled, if it contain any trust, is liable to duty at 5 per cent on the amount or value of all the property comprised in the instrument if the amount or value of that property exceed £9,000." For the purpose of the stamp duty the Act makes no distinction between property which is settled and property which is not settled, provided that the property is comprised in an instrument which comes within the definition of "settlement," and which contains some trust.

It should be understood that our duty is confined to the question asked of the Supreme Court; and I do not wish to be understood as either affirming or denying the validity of the indenture as to all the nominal parties thereto.

Starke J.

The duty imposed by sec. 4 of the Stamp Act 1894 is a tax upon instruments, that is, upon any written or printed document (see sec. 2, "instrument"), and I agree that the instrument of 4th March 1925 settles the fund of £1,572 in favour of the infant children of Annie Wright. It ties up that fund during infancy and subjects it to trusts in favour of the infants (cf. Massereene v. Commissioners of Inland Revenue[1]), but the directions to pay the sum of £2,000 to Eliza Carmichael, and to hold the "balance of the assets as bare trustee for the children" of James Carmichael, do not, in my opinion, constitute any settlement of that property. It discharges that property from the trusts to which it was subjected under Carmichael's will and converts it, in substance, into free as distinguished from settled property.

The remaining question is whether the duty imposed by the Stamp Act is upon the value of all the property comprised within the instrument of settlement or only upon the property settled or agreed to be settled by that instrument. The latter view is, in my opinion, the natural and the only reasonable meaning of the words contained in the Schedule to the Stamp Act. The observations of Pring J. in Perpetual Trustee Co. v. Commissioner for Stamps[2] tend to confirm this construction. Consequently, in my opinion, the judgment of the Supreme Court should be varied, but it is unnecessary for me to consider, in view of the opinion of the majority of the Court, whether any and what amount of duty is payable in respect of the unsettled property under other headings of the Schedule to the Stamp Act; such, for example, as bond, covenant or instrument of any kind whatever, declaration of trust, and so forth.

Appeal dismissed with costs.

Solicitors for the appellants, McGregor & Given.

Solicitor for the respondent, H. J. H. Henchman, Crown Solicitor for Queensland.

[1] (1900) 2 I.R. 138.

[2] (1910) 10 S.R. (N.S.W.) 550, at p. 553.