Union Trustee Co of Australia Ltd v Commissioner of Taxation (Cth) [1962] HCA 52

High Court of Australia Taylor J. Union Trustee Co of Australia Ltd v Commissioner of Taxation (Cth) [1962] HCA 52

ORDER Appeal allowed with costs. Order that assessment be varied by treating the residuary gift to take effect upon the death of the testator's wife as a devise or bequest of part of the testator's estate upon which, pursuant to s. 8(5) of the Estate Duty Assessment Act 1914-1957, estate duty should not be assessed.

Cur. adv. vult.

Taylor J delivered the following written judgment:—

Oct. 5 Taylor J

In this appeal, which comes to this Court pursuant to s. 24 (4) of the Estate Duty Assessment Act 1914-1957 Cth, the appellants, as the "administrators" of the estate of John Joseph Luddy, contend that the respondent's assessment of estate duty in respect of the deceased's estate is excessive. In particular they claim that by reason of the provisions of s. 8 (5) of the Act, duty was not assessable or payable upon so much of the estate as passed under the ultimate residuary disposition made by the deceased's will.

By his will the deceased gave devised and bequeathed unto and to the use of his trustees the whole of his estate upon trust to pay his funeral and testamentary expenses, his just debts and all probate, death and estate duties and all other duties payable to any State or federal authority in consequence of his death. Thereafter he directed his trustees to stand possessed of the balance then remaining upon trust to retain and/or invest the same in accordance with the terms of his will and to permit his wife, the female appellant, to have the net profits and income therefrom free of all duties during her lifetime for her use and benefit absolutely. Subject thereto the deceased purported to declare a general charitable intention with respect to his residuary estate and he directed his trustees to hold that estate: "Upon trust for such one or more charitable and/or religious institutions in Queensland having among their purposes the care and comfort and maintenance of elderly and/or aged people as my wife Ethel Margaret Luddy shall by deed or will appoint to be expended by such institutions so appointed on the care and comfort and maintenance of elderly and/or aged people in such manner as such respective institutions shall in their absolute discretion think fit and in default of such appointment by my wife and in so far as such appointment shall not extend I direct my trustees to hold my residuary estate or such portion thereof as shall not be appointed by my wife as hereinbefore provided as the case may be upon trust to retain and/or invest the same in the names of my trustees and to hold the same and the investments representing the same in perpetuity upon trust to pay and divide (but subject as hereinafter provided) the net annual income therefrom to and/or among one or more charitable and/or religious institutions in Queensland having among their purposes the care and comfort and maintenance of elderly and/or aged people as my trustees shall in their absolute discretion think fit such payment and division to be in such manner and at such time and in such proportions as my trustees shall in their absolute discretion think fit and any moneys so paid and divided to be expended by such institutions in the care and comfort and maintenance of elderly and/or aged people in such manner as such respective institutions shall in their absolute discretion think fit and I further expressly declare that all matters in respect to the institutions to benefit and the amount of each respective benefit and the method of payment thereof and generally all matters in relation thereto shall be in the absolute discretion of my trustees and my trustees shall be under no obligation regarding the expenditure of such moneys in respect to such institutions."