(Before the Chief Justice, Mr. Justice Pring,
and Mr. Justice Sly.)
ADMISSION OF SOLICITORS.
Tho following gentlemen having passed the necessary examinations were admitted as soli tors:-Malcolm Cuthbert Moors, Percy Leonard Nolan, Morgan Joseph O'Neill
Charles Wostenholm Rundle. ' RE TUB WILL OF MR. JAMES WATSON DECEASED, AND THE STAMP DUTIES ACt!
QUESTION OF DUTY ON A TRANSFER.
THE GLANWORTH PROPERTY.
The Chief Justice, in the course of his judg ment said that the late James Watson, on December 30, 1989, by instrument of transfer under the Real Property Act, transferred a certain block of land situated at Darling Point, Sydney, upon which stood his residence, known as Glanworth, to his son, James Fred- erick William Watson, and his daughter, Maude May Fraser Watson. Upon same date the transferees executed a declaration of trust by which they declared that they held the said land upon trust to permit Maude May Fraser Watson, Margaret Maclean Watson, Elizabeth Grace Watson, James Frederick William Wat- son, Herbert John Fraser Ewan Watson, and Alice Muriel Watson, the children of James Watson, or such of them as might so desire, to reside in and upon the premises until the youngest attained the age of 21 years, and that after the youngest attained that age they would hold the premises upon trust for all the children, their heirs, and assigns in equal shares as tenants in common. And it was further declared that it should be in the dis- cretion of the trustees, should they deem it desirable so to do, but with the consent of the majority of such of the children as should be above the age of 21 years, to sell the land upon certain conditions therein mentioned. The youngest child of James Watson attained the age of 21 years 18 months before his death. The instrument of transfer was re- gistered in the office of the Registrar-General on Decomber 20, 1902. The late James Watson died on October 30, 1907, having made his will, dated May 9, 1905, whereby he appointed his sons James Frederick William Watson and Herbert John Fraser Watson and his daugh- ter Maude May Fraser Watson executors and executrix of his will. It appeared that duty had been paid upon the value of the estate of which testator died possessed, but the Com- missioner of Stamp Duties, being of opinion that the transfer of December 30, 1899, was not made bona fide, assessed duty in respect of the value of the property known as Glanworth at £1501 18s lOd. The executors and execu- trix had paid this amount, but being dissatis- fied with the assessment had requested the Commissioner to state a case. The question stated for the decision of the Court was "whether, under the circumstances stated in the case, the said transfer was made bona fide, and whether the executors and executrix were liable to pay duty in respect of the value of the property." It was admitted that there was no agreement, written or verbal, made be- tween the testator and the transferees that James Watson should have the right to reside upon the property during his life, or that he should retain any interest in or have the right to coatrol in any way the disposition of the property. The Commissioner, however, sug- gested that the Court should, notwithstanding tho above admission, come to the conclnsion that the transfer was not made bona fide, be- cause: (1) The said James Watson did in fact continue to reside at Glanworth up to the time of his death; (2) that the said transfer was not registered until December 29, 1902; 3) that on January 7, 1903, James Watson lodged a notice of appeal against the assess- ment of the land tax, and that the printed form of such notice described the land as "my
land." It would appear, however, that on the same day- that was, on January 7, 1903-an intimation had been made to the Commis- sioner of Taxation that the trustees of "the deed of declaration were then the owners of the property. The fourth reason given was "that the said James Watson always paid out of his own moneys the rates and taxes upon the property, and that his name appeared upon the rate-books of the municipality of Wool- lahra as the owner of the land." It would be observed that the claim of the Commissioner of Stamp Duties was made under section 49 of the Stamp Duties Act, No. 27, of 1898, subsec- tion 2 (b) of which made duties chargeable
upon all estates, whether real or personal,
"taken under a voluntary disposition, purport- ing to operate as immediate conveyance or gift inter vivos, whether by way of conveyance, transfer, delivery, declaration or trust, or otherwise, which has not been bona fide made 12 months before the death of such person."
It was the duty of the Commissioner to es- tablish a case of "mala fides or evasion." Now in this case the transfer was made seven years and 10 months before the death of Mr. Watson, and this transfor was made effectual by re- gistration four years and 10 months before testator's death. The transfer was absolute in its terms, and by it Mr. Watson conveyed the legal and equitable estate in Glanworth to the trustees in fee simple in trust for all his children as tenants in common, with a power to sell the estate with the consent of a majority of such of the children as should be above the age of 21 years, and as all the children were above that age l8 months be- fore his death there was nothing to prevent a sale of the estate taking place at any time. The admission in the caso that there was no agreement, either written or verbal, under which Mr. Watson retained any interest in the property, covered the whole case. It would, in his opinion, be found that the principle to be deduced from the cases was that where there was an absolute disposition, whether voluntary or otherwise, of property, a com- plete parting with the whole"jus dlsponendi, then, unless it could be shown that there was some agreement, written or verbal, or some secret trust or arrangement capable of being enforced in a Court of Law or Equity, then the disposition could not be said to be made mala fide, or with intent to evade the duty. In this case Mr. Watson parted with the whole Jus disponendi, so that the property ceased to be his, and became the property of the trustees, and it could not be his property at the time of his death. All the acts done by him were quito consistent with his having dis- posed of, between seven and eight years be- fore his death, the whole jus disponendi. They were,natural acts to be done by a father living with his children, and were not evi- dence of fraud. It must be borne in mind that although he resided with his children he was always liable to eviction, and this might have occurred no matter how favourably disposed his children were towards him. It might fall within the power of some third person to evict him. There really was not one line in the case stated which to his mind suggested fraud, mala fides, or a fraudulent intent to evade payment of duty. He was therefore of opinion that the transfer was made bona fide, and that the executors and executrix were not liable to pay duty in respect of the value of the property. The Commissioner for Stamps must refund the money paid, and pay the costs of these proceedings.
Mr. Justice Pring delivered a separate Judg- ment, concurring with the Chief Justice. The testator retained no interest in the property, and parted with it absolutely. He was not even legally entitled to remain on the pro- perty, and he could not see any evidence that the transfor was a colourable transaction, and otherwise than a bona fide conveyance.
Mr. Justice Sly also delivered a separate judgment, but dissented from the majority of the Court. He could draw no other inference from the facts stated in the case than that the transfor was a contrivance or device on the part of the testator with intent to evade payment of duty, and that it was not a bona fide transfer within the moaning of the Stamp Duties Act, inasmuch as the testator and the trustees understood that testator should re- tain the beneficial occupation until his death. The transfer was colourable only so far as it purported to operate in presenti. He need hardly say that as he differed from their Honors in the conclusion to which they had arrived, he had very serious doubt of the cor- rectness of his own opinion.
The Chief Justice: The answer of the Court to the question submitted in the special case is that the transfer was made bona fide, and that the executors and executrix were not liable to the duty charged. The Commissioner for Stamps must refund the amount, and pay the costs of the appeal.
At the hearing of argument Mr. Knox, K,C, and Mr. Harvey, instructed by Messrs. Wilkinson and Osborn, appeared in support of the appeal, and Mr. Rolln and Mr. Win- deyer, instructed by the Crown Solicitor, for the Commissioner for Stamps in support of the decision appealed against