CHIEF COMMISSIONER OF LAND TAX v MACARY MANUFACTURING PTY LTD

Judges: Spigelman CJ
Mason P

Sheller JA

Court:
New South Wales Court of Appeal

MEDIA NEUTRAL CITATION: [1999] NSWCA 471

Judgment date: 17 December 1999

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Sheller JA

94. I have had the benefit of reading the judgments prepared by the Chief Justice and the President. I agree with the President. His Honour has set out the relevant parts of the Deed of Settlement of 2 July 1977, the relevant sections of the applicable land tax legislation, the terms of the directors' resolutions of 25 July 1986 and 22 December 1987, the factual background to the questions raised by this appeal and the parties' contentions. There is no need to repeat them.

95. A significant question in deciding whether the land was, during the relevant period, subject to a special trust within the meaning of s 3(1) of the Land Tax Management

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ATC 4014

Act 1956 is the effect of the directors' resolution of 22 December 1987 nominating as the Vesting Day ``today, Tuesday 22nd December 1987''. Clause 1(13) of the Deed of Settlement defines ``the Vesting Day'' to mean, if the resolution was effective, ``(ii) such date... as the Trustees may... appoint as the Vesting Day''. The Vesting Day was important because the Trustees' powers to make determinations about the application of income (cl 3) and to make payments out of capital by way of advancement (cl 6) could only be exercised ``prior to the Vesting Day''. As from the Vesting Day the Trustees were bound to hold the income of the trust fund ``arising thereafter for the persons and in the shares for whom they then hold the corpus of the Trust Fund absolutely'' (cl 3(7)) and stood possessed of the trust fund, defined to mean the settled sum and all additions accumulations of income and accretions on the trusts set out in cl 4.

96. The appellant submitted that the effect of the Trustees' appointing a date as the Vesting Day was that they stood possessed of the trust fund on the trusts set out in cl 4 from the last moment of the previous day. That must be so if the Vesting Day is ``the date of expiration of the perpetuity period''; cl 1(13)(iii) of the Deed of Settlement. If the disposition is not to be defeated by the rule against perpetuities the Trustees must stand possessed of the trust fund on the trusts set out in cl 4 from the last moment of the day before the last day within the perpetuity period; see generally the Perpetuities Act 1984.

97. While generally, in computing a period of time from a date, the period will commence at the end of the day of that date, there is no universally operating rule to that effect; Associated Beauty Aids Pty Ltd v FC of T (1965) 13 ATD 506 at 509; (1965) 113 CLR 662 at 668. In
Pugh v Duke of Leeds (1777) 2 Cowp 714 at 725; 98 ER 1323 at 1329 Lord Mansfield observed:

``... that `from' [ a particular date] may in the vulgar use, and even in the strict propriety of language, mean either inclusive or exclusive [ of that date]: that the parties necessarily understood and used it in that sense which made their deed effectual: that Courts of Justice are to construe the words of parties so as to effectuate their deeds, and not to destroy them; more especially where the words themselves abstractedly may admit of either meaning.''

98. In Associated Beauty Aids Pty Ltd v FC of T at ATD 510; CLR 669 Windeyer J said that he inclined to the view that, if nothing to the contrary appeared, what was meant was that the result of the act is operative from the first moment of the day on which the act was done, not because the act had a retroactive effect, but because it took effect instanter, and when a day is spoken of the law does not take cognisance of parts of a day; compare per Jordan CJ in
Ex parte Tooheys Limited; re Butler (1934) 34 SR (NSW) 277 at 285 . The description ``Vesting Day'' suggests a consequence on the date nominated. In broad terms the consequence is that the trust ceases to be one for the application of income and becomes one for the distribution of corpus. I cannot accept that that essential change of character should happen not on the Vesting Day but on the day following. Indeed, so to conclude could open a lacuna between the powers of the trustees under cl 3 which ceased immediately before the Vesting Day and the operation of cl 3(7) which applies as from the Vesting Day.

99. To make the point relevant to the present case if the Trustees had resolved on 22 December 1987 that the Vesting Day was the 23rd the income trusts would have ceased at the last moment of 22nd and cl 4 would have operated at the first moment of 23 December. With due respect I do not see such a construction of the definition of ``the Vesting Day'' as presenting any problem in terms of working out the trust. But for the reasons the President has given I regard it as making the directors' resolution of 22 December 1987 ineffective. In consequence the land was, during the relevant period, subject to a special trust.

100. I agree with the orders the President has proposed.

ORDERS:

1. Appeal allowed with costs.

2. Orders made by Black AJ on 23 March 1998 set aside.

3. Summons dismissed with costs.

4. If qualified, the respondent is to have a certificate under the Suitors' Fund Act.