Chesterman v Federal Commissioner of Taxation
32 CLR 362(Decision by: RICH J)
Between: CHESTERMAN
And: FEDERAL COMMISSIONER OF TAXATION
Judges:
Knox CJ
Isaacs J
Higgins J
Rich JStarke J
Subject References:
Succession
Estate duty
Exemption
'Charitable purposes'
Annuity
Legislative References:
Estate Duty Assessment Act 1914 (No 22) - the Act
Judgment date: 6 June 1923
MELBOURNE
Decision by:
RICH J
The main argument centred on the meaning of the word "charitable" in s. 8 (5) of the Estate Duty Assessment Act. In view of what has been already said, it is unnecessary for me to resume the cases discussed. They are familiar enough and have been applied in this Court more than once. There is no rigid rule of construction, and each statute where words occur similar to those in the sub-section under review has to be considered by itself. In Swinburne v Federal Commissioner of Taxation [F57] the result of the relevant cases was stated to be that, in a statute where the phrase "charitable purpose" or its equivalents are used, "a technical meaning is now the primary, and, therefore, the natural meaning, requiring context to vary it." In s. 8 (5) of the Estate Duty Assessment Act the words which precede and follow the word "charitable" are not meaningless or unnecessary, and a separate meaning is properly attributable to them. It follows, then, that, as "charitable" is not an envelope containing the other words, there is context which controls the primary meaning and which shows that it is not to be interpreted in the technical or wide sense attributed to it in the Courts. I adopt the illustrative construction of the word given by my brother Isaacs. None, however, of the gifts in the Peter Mitchell Trust comes within that very flexible test, and they clearly do not fall within the other exemptions of the sub-section.
With regard to the terms of the gift over, assuming it falls to be decided, it is sufficient to say that the area of selection or "ambit of choice" given by the testator would confer upon the trustees a power of selection outside the scope of the exemptions in the sub-section.
2. For the purposes of the Act the value of the part of the estate which passes should be ascertained as a determinable annuity as at the date of the death of the testator according to ordinary actuarial principles (cf. In re Cottrell; Buckland v Bedingfield, [F58] at p. 408).
3. Yes, as part of the estate.
4. The regulation is invalid. The value is to be ascertained, having regard to all the circumstances, according to ordinary actuarial principles, and not by a rigid rule universally applicable, such as the regulation in question, without regard to limitations and incidents of the thing to be valued.
5. See answer to question 2.