Stamp Duties, Commissioner of (NSW) v Pearse [1951] HCA 43

High Court of Australia Dixon, McTiernan, Williams, Webb and Fullagar JJ. Stamp Duties, Commissioner of (NSW) v Pearse [1951] HCA 43

ORDER Appeal of Commissioner of Stamp Duties dismissed with costs. Cross-appeal of respondent Pearse and others dismissed with costs. Costs to be set off.

Cur. adv. vult.

The following written judgments were delivered:—

July 27 Dixon J.

For the reasons given in the judgment prepared by Williams J. I am of opinion that the appeal should be dismissed.

But I have come to the conclusion that the cross-appeal should be allowed.

The purpose of the cross-appeal is to obtain a decision from this Court on a question which, though it must often arise in the assessment of duty, can never involve a large amount of duty. It depends upon the operation of a provision in a will authorizing the payment to an executor or a trustee who is a solicitor of profit costs for professional work which he may do for the estate.

The Seventh Schedule of the Stamp Duties Act 1920-1949 contains four columns each specifying a different rate of duty. The first column imposes a rate of duty on so much of the estate as consists of property which passes under the will or devolves upon the intestacy of the deceased to the widow or lineal issue of the deceased. The second and third columns impose higher rates of duty on property passing to or devolving upon other objects. The fourth column imposes a still higher rate of duty on so much of the estate as consists of property not otherwise provided for in the previous columns. Unless a provision of the kind stated contained in the will brings any part of the estate under the higher duty the provisions of the will are such that the final balance of the estate would all pass to the widow and lineal issue of the testator and so fall under the first column. The Commissioner contends, however, that a clause of such a character operates to impart to the solicitor a beneficial interest in the property and that it is necessary to estimate the value of the interest for the purposes of the assessment of duty, because to that extent the estate cannot "pass" to the beneficiaries mentioned in the first schedule and must fall under the higher duty of the fourth column of the schedule as property not otherwise provided for by the schedule. How you estimate as at the time of the testator's death the amount of costs the solicitor to the estate will earn before it is wound up does not appear. It would seem impossible except in the simplest cases. But for some reason the Commissioner and the executors agreed in the present case "for the purposes of the assessment of Death Duty that the legal costs payable by the estate for past and future legal work should be deemed to be of the value of £250".