Angus v Commissioner of Stamp Duties (NSW) [1930] HCA 18; (1930) 44 CLR 211 (14 August 1930)

HIGH COURT OF AUSTRALIA

Angus and Others Appellants; and The Commissioner of Stamp Duties (New South Wales) Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

14 August 1930

Gavan Duffy, Rich, Starke, and Dixon JJ.

Maughan K.C. (with him Hastings), for the appellants.

Hammond K.C. (with him Kitto), for the respondent.

Maughan K.C., in reply.

The Court delivered the following written judgment:—

Aug. 14

Gavan Duffy, Rich, Starke, and Dixon JJ.

The controversy in this case is whether certain lands are for the purpose of death duty to be deemed to be part of the estate of Ada Angus, who died on 1st February 1929. Under an indenture, made 27th June 1898, between her father of the first part, her mother of the second part, Ada Angus of the third part and a trustee of the fourth part, Ada Angus took an estate for life in these lands, subject to a conditional limitation upon bankruptcy or attempted alienation, remainder to her children in equal shares as tenants in common with a limitation over to the survivor or survivors of the share (original and accrued) of any child who might die under age and, being female, without having married, and if all such children should so die, to the six brothers and sisters of Ada Angus in equal shares as tenants in common, with power, however, for a majority of them, if the estate of Ada Angus determine in her lifetime, to consent to her receiving the rents and profits nevertheless. In fact Ada Angus left six children of full age her surviving. The indenture conferred powers of leasing, and some other powers upon the tenant for life. It contained recitals that the father was owner in fee simple, and that he had for the consideration thereinafter mentioned agreed with Ada Angus to execute such conveyance and assurance as was thereinafter mentioned, and it witnesses that in consideration of the covenants on the part of Ada Angus thereinafter contained, he granted the land upon the limitations already described. The covenants of Ada Angus, which were expressed to bind her heirs, executors, administrators and assigns, were to pay an annuity of £30 to her father for life and after his death to her mother for life and to indemnify her father in respect of the covenants contained in some unexpired leases subject to which he granted the lands.

The Crown claims that by reason of the transaction expressed in the indenture, the lands must by virtue of par. (k) of sec. 102 (2) of the New South Wales Stamp Duties Act 1920-1924, or alternatively by virtue of par. (i) of that sub-section, be deemed to be part of the estate of Ada Angus. Par. (k) makes part of the deceased's estate "any property which on the death of the deceased passes to any other person under or by virtue of any agreement made by the deceased (whether before or after the passing of this Act) to the extent by which the value of such property exceeds any consideration in money or money's-worth receivable by the estate of the deceased under such agreement."

The argument is that the lands are property which, upon the death of Ada Angus, passes to her children under or by virtue of the indenture which, it is said, is an agreement made by the deceased and that the application of the provisions is not limited to cases in which there is some consideration "receivable by the estate of the deceased under such agreement." It is, however, plain that the purpose of the paragraph is to bring into the assets charged with death duty, property the destination of which is within the deceased's control, if that control has been so exercised that the property passes upon his death to some object of his bounty, that is to say, someone who takes it for no consideration receivable by the estate, or a consideration less than its full value. The dominant words of the provision are "under or by virtue of any agreement made by the deceased." In their context these words express much more than a mere requirement that the deceased shall have agreed or assented to the disposition by which the property passes on his or her death. They mean that the dispositive act shall be the deceased's agreement, or, in other words, that the passing of the property shall proceed from the deceased's volition.

The learned Judges of the Supreme Court took a view of the transaction embodied in the indenture which would bring it within the operation of this provision so construed (Angus v. Commissioner of Stamp Duties[1]). Street C.J., in a judgment with which Ferguson and Halse Rogers JJ. concurred, expresses the opinion that if the substance of the transaction, as it appears upon the face of the indenture, is looked at, it will be seen that Ada Angus purchased the property from her father for a valuable and—for all the Court knows—a full consideration, but instead of having the fee simple conveyed to her, as she might have done, she had it conveyed by her direction in the manner appearing in the instrument. He considered that all this was done, as appeared by the conveyance, under and by virtue of an agreement made by her with her father; that the disposition of the property which took place by virtue of the agreement with Ada Angus was a disposition made by her as purchaser, and that it was from her, and not from her father, that the successive interests created under the indenture were derived.

We are unable to adopt this view of the instrument, or of the transaction which it embodies. The nature of the consideration given by Ada Angus, and the limitations expressed in the instrument, all point to the character of the transaction, namely, a parent's settlement upon a married daughter and her children with a reservation of an annuity and with a limitation, upon failure of her children, over to brothers and sisters. There is nothing to suggest any anterior bargain by which she became able to call for or dispose of the fee simple, and there is nothing to show that, for the consideration which she gave, her father was willing to grant the fee simple to her or to make any arrangement other than that expressed by the instrument. The indenture neither contains nor evidences any dispositive act by her. It does not show that the limitations, by which the property passed upon her death, were made by her; that is, proceeded from her volition.

For these reasons we think par. (k) does not bring the lands into the assets charged with death duty.

But the Crown relied also upon par. (i) of sec. 102 (2). This provides that the estate shall include "any annuity or other interest purchased or provided by the deceased, whether before or after the passing of this Act, either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased." In considering the application of this provision to the property included in the indenture, the first question is whether the interest which accrued or arose on the death of Ada Angus was purchased or provided by her. The short answer to this question is that no reason appears upon the face of the deed for supposing it was, and much reason appears for thinking it was not, purchased or provided by her, and that the special case stated by the Commissioner contains nothing which tends to suggest that she purchased or provided that interest. The fact that the agreement recited and the consideration expressed in the indenture relate to the grant of all the estates and interests limited in the indenture does not appear to us to show that Ada Angus "purchased" the interest in remainder for her children within either the technical or the popular meaning of that word, nor that she "provided" that interest. On the contrary, it is quite consistent with the view which is supported by the whole tenor of the instrument that the remainder was limited by the father as an essential part of the scheme formulated by or for him for the benefit of his daughter and her family.

For these reasons the appeal should be allowed with costs, and the order of the Full Court of the Supreme Court discharged. In lieu thereof the first question in the special case should be answered: No. The second question cannot be answered upon the materials contained in the special case. The Commissioner should pay the costs of the proceedings in the Supreme Court.

Appeal allowed with costs. Order of Full Court discharged. In lieu thereof first question in the special case answered No. No answer to the second question. The Commissioner of Stamp Duties to pay the costs of the proceedings in the Supreme Court.

Solicitors for the appellant, Holdsworth, Summers & Garland.

Solicitor for the respondent, J. V. Tillett, Crown Solicitor for New South Wales.

[1] (1930) 30 S.R. (N.S.W.) 253.