National Trustees Executors and Agency Co of Australasia Ltd v Federal Commissioner of Taxation
91 CLR 5401954 - 1129B - HCA
(Judgment by: Dixon CJ)
Between: National Trustees Executors and Agency Co of Australasia Ltd
And: Federal Commissioner of Taxation
Judges:
Dixon CJMcTiernan J and Taylor J
Fullagar J
Kitto J
Subject References:
Succession
Estate duty
Assessment
Right to share of profit
Valuation at death
Legislative References: - Estate Duty Assessment Act 1914 (No 22); Wool Realization (Distribution of Profits) Act 1948 (No 87)
Hearing date: MELBOURNE 18 May 1954; 19 May 1954; 20 May 1954Judgment date: 29 November 1954
SYDNEY
Judgment by:
Dixon CJ
DIXON C.J. On the argument of this case stated I formed a definite opinion that the appeal out of which it arose was bound to succeed on the simple ground that the appellant had before the making of the assessment for estate duty "made to the commissioner a full and true disclosure of all the material facts necessary for the making of the assessment", within the meaning of those words in s. 20 (2) of the Estate Duty Assessment Act 1914-1947, with the consequence that the condition precedent to the only relevant power of amendment possessed by the commissioner was not fulfilled. Four months before the date of the assessment the solicitors for the appellant executor wrote a letter to the respondent commissioner which appears to me to give the latter all the information there was to be had as to the deceased's title to participate in the distributions made by the Australian Wool Realization Commission under the Wool Realization (Distribution of Profits) Act 1948, namely that the appraised value of his participating wool was PD45,295 2s. 2d. It is true that the letter is expressed as advice of an additional asset consisting in the receipt by the executor of the first dividend of six and one quarter per cent amounting to PD2,830 18s. 10d. So to describe the dividend implies a legal misconception. But that is not material; the disclosure of fact was there. Nor is it material that the commissioner shared the misconception. The letter conveyed all the information needed by the commissioner or possessed by the executor. In order to fix upon an estimate of the present value of the deceased's distributable share as at the time of his death, it might be necessary for the commissioner to form some anticipatory opinion of the amount of the fund that was likely to arise in the commissioner's hands and become available for distribution. But on that question the executor could know no more than the commissioner. So far as it could be guessed at, by anybody outside the Wool Realization Commission, it depended upon public general information. The deceased's title to share in the distribution of the fund in respect of the participating wool he had submitted for appraisement depended, of course, entirely upon the Wool Realization (Distribution of Profits) Act 1948. The commissioner perhaps knew more about that than the executor but in any case it is a matter of law not fact. There were therefore no facts of which full and true disclosure was not made to the commissioner.
This conclusion means that to determine the appeal it is not necessary to decide the question whether the value of the deceased's title to share in the distributions under the Wool Realization (Distribution of Profits) Act 1948 formed part of his personal property within s. 8 (3) of the Estate Duty Assessment Act 1914-1947. But it is doubtless an important question and I agree that we should express our opinions upon it. Mine may be stated very briefly indeed, for I have had the advantage of reading the reasons prepared by Fullagar J. and those prepared by Kitto J. The two judgments are to my mind in complete harmony and I desire to express my general agreement with both of them, not only upon the question whether the title of the deceased to share in the distribution of the wool profits formed property, but also on the question of the competence of the amendment. All I desire to say for myself on the former question I can add in a few sentences. I think that the Wool Realization (Distribution of Profits) Act 1948 created in suppliers of participating wool what may properly be called a title to share in the distributions afterwards to be made. I use the word "title" as a convenient way of referring to the existence of certain vestitive facts which are prescribed by law as giving rise to an advantage which the law creates for the enjoyment of given persons whom it specifies by reference to such facts. In other words the statute here states certain conditions the fulfilment of which will, when the course prescribed by its provisions is followed, result in the receipt of a dividend in the distribution calculated in a specified manner. The existence of the prescribed facts raised at least a valuable expectation and the expectation depended on the statute. It may be said generally that an interest protected by law amounts to a right and certainly the deceased's expectation was an interest capable of forming a right of property, if protected by law. How the law protects an interest is not so important as the recognition which the law gives to it as something which the law intends to be enjoyed. The question seems to me to be whether the statute does mean to give, as from the commencement of the Act, an interest protected by its provisions to the suppliers of participating wool.
I agree entirely in the view that s. 11 (a) gives no new or original title to an executor but provides for payment to him as the person on whom the title to payment has devolved. When the provisions of the Act are examined I think that it is a proper conclusion from them that the legislature meant to create in the suppliers of participating wool an immediate interest sufficiently protected by the machinery it established, although deprived of voluntary alienability and of enforceability by suit.
That amounts, I think, to a sufficient right of property to be assemble under s. 8 of the Estate Duty Assessment Act 1914-1947.
The view which has been adopted by Fullagar and Kitto JJ. and myself does not allow of categorical answers to the precise questions contained in the stated case.
The following answers, I think, would be appropriate and would suffice to dispose of the appeal:
- 1.
- If, contrary to the answer to the third question, it had been competent to the commissioner to amend the assessment, the figure of PD2,830 18s. 10d. was wrongly adopted.
- 2.
- On the same hypothesis the present value as at the time of the deceased's death of his expected share or dividend in the distribution of wool profits should have been estimated.
- 3.
- The commissioner did not have power under the Estate Duty Assessment Act 1914-1950 to issue the amended assessment.