SUPREME COURT OF NEW SOUTH WALES
TRUSKETT v COMMISSIONER OF STAMP DUTIES (NSW)
RATH J
19, 29 September, 3 October 1975, 6 February 1976 -
Rath J This is a summons for a determination of the questions in a case stated by the defendant, the Commissioner of Stamp Duties, under s 124 of the Stamp Duties Act 1920. The plaintiffs are the trustees of a deed of settlement made 14 December 1972.
The facts set out in the stated case are as follows. The settlement was stamped with ad valorem duty in the sum of $3. By an agreement in writing made on 28 December 1972 the plaintiffs agreed to purchase a property known as 19 Duntroon Avenue, Roseville for the sum of $31,500. There is no reference in this agreement to the plaintiffs being or acting as trustees. This agreement was stamped with ad valorem duty in the sum of $551.25. On 15 February 1973 the agreement was completed by the payment by the plaintiffs of the balance of purchase money and by the delivery to the plaintiffs of a memorandum of transfer. This memorandum of transfer was not charged or chargeable with ad valorem duty, but a duty of 75¢ was paid upon it. Paragraph 7 and 8 of the case read as follows:
"7. The purchase price of the said land was paid by the plaintiffs out of moneys obtained from the following loans:-
- (a) $10,000 lent to the plaintiffs by Marion May Truskett;
- (b) $10,500 lent to the plaintiffs by Ian Douglas Truskett;
- (c) $16,000 lent to the plaintiffs by the Rural
Bank of New South Wales.
"8. The said loan of $16,000 was advanced by the Rural Bank of New South Wales upon completion of the agreement to purchase the said land, and repayment thereof was secured to the Rural Bank of New South Wales by means of a first mortgage of the said land."
The Marion May Truskett and Ian Douglas Truskett referred to in para 7 are the plaintiffs. The source of the purchase money is made clearer in an affidavit of the plaintiff Marion May Truskett, in which she says:-
"1. I am one of the plaintiffs herein, and one of the trustees of 'The V J Truskett Trust'.
"2. The moneys for the purchase of 19 Duntroon Avenue, Roseville, under agreement dated 28 December 1972 were paid as to $16,000 by the Rural Bank of New South Wales by way of loan on mortgage and as to the balance from the account of 'The V J Truskett Trust' at the Rural Bank Chatswood.
"3. The moneys credited to that account were loaned to 'The V J Truskett Trust' as follows:-
14/12/72 Marion May Truskett $10,000 14/12/72 Ian Douglas Truskett $5,500 9/2/73 Ian Douglas Truskett $5,000"
The settlement states that the trusts thereof are to be known as "The V J Truskett Trust".
On 21 February 1973 the plaintiffs executed a declaration of trust under seal in which it is recited that the whole of the purchase money and all the costs and charges and expenses incurred in connexion with the purchase had been provided by the plaintiffs as trustees of "The V J Truskett Trust" and by which the plaintiffs declared that they stand possessed of and interested in the property upon trust for the beneficiaries under and by virtue of "The V J Truskett Trust".
Stamp duty of $980 was assessed on the declaration of trust under para (2) under the heading "Declaration of Trust" in the Second Schedule to the Stamp Duties Act 1920.
The questions asked are as follows:-
Question 1
Whether stamp duty was properly assessed and is payable by the plaintiffs upon the declaration of trust executed by them on 21 February 1973 under para (2) under the heading Declaration of Trust in the Second Schedule to the Stamp Duties Act 1920 as an instrument declaring that property vested or to be vested in the person executing the same is or shall be held in trust for the person or persons or purpose or purposes mentioned therein notwithstanding that the beneficial owner or person entitled to appoint such property may not have joined therein or assented thereto.
Question 2
Whether the duty payable by the plaintiffs on the said declaration of trust is:-
- (a) $980; or
- (b) $ 3; or
- (c) some other, and if so what, amount?
Question 3
How the costs of this stated case should be borne and paid.
The recitals in the settlement are as follows:-
"Whereas the settlor is desirous of making provision for the family of the original trustees Ian Douglas Truskett and Marion May Truskett and whereas the settlor with this object has paid to the trustees before the execution of these presents the sum of one hundred dollars ($100) with the intent that the said sum (hereinafter called 'the settled fund' which expression shall mean and include not only the said sum but any investments from time to time acquired with or out of the said sum and any addition thereto and any substituted investments of the nature hereinafter referred to and all and any accumulations of income or accretions to capital and any investments obtained by the trustee with any such accumulations of income or accretions to capital) should be held upon the trusts and subject to the terms conditions and powers hereinafter set forth."
By cl 6 the trustees shall invest the settled fund in any one or more of investments authorized by the clause. The authorized investments include "upon the purpose of real estate of any tenure". It was conceded by counsel appearing for the defendant that the trustees by virtue of this clause had the power to purchase real estate.
Clause 9 provides that "the trustees may from time to time borrow money without security and in their absolute discretion for the purpose of carrying into effect or exercising any of the trusts or powers hereinbefore declared or conferred and any moneys so borrowed shall fall into and form part of the settled fund and may be invested and otherwise dealt with by the trustees in the same manner as the funds originally settled hereunder."
The settlement does not confer any power on the trustees to borrow money on security, and in particular does not confer power to purchase real estate partly out of moneys lent to the trustees without security and partly out of moneys lent to the trustees on the security of a first mortgage of the property purchased.
Section 4 of the Stamp Duties Act provides that in respect of the instruments described or mentioned in the Act and in the Second and Third Schedules thereto there shall be charged the several duties and at the several rates specified in the Act and Schedules. In the Second Schedule there are three columns, entitled respectively "Nature of Instrument", "Amount of Duty" and "Person primarily liable". In the first column there is an item "Declaration of Trust" followed by these three paragraphs:-
"(1) Any instrument declaring that a person in whom property is vested as the apparent purchaser thereof holds the same in trust for the person or persons who have actually paid the purchase-money therefor.
"(2) Any instrument declaring that any property vested or to be vested in the person executing the same is or shall be held in trust for the person or persons or purpose or purposes mentioned therein notwithstanding that the beneficial owner or person entitled to appoint such property may not have joined therein or assented thereto.
"(3) Any such instrument as aforesaid by which (a) the same trusts are declared as have been declared in respect of the same property by an instrument duly stamped with ad valorem duty under the Act or (b) the trusts declared are the same trusts as those upon or subject to which the same property was conveyed to the person declaring the trust by an instrument duly stamped with ad valorem duty under this Act or (c) the same trusts are declared as have been declared by a will in respect of the same property and any death duty payable in respect of that property by reason of the death of the testator who made such will has been paid."
In the second column ("Amount of Duty"), $3 appears opposite paras (1) and (3), and in the third column ("Persons primarily liable") there appear opposite these same paragraphs the words "The person declaring the trust". Opposite para (2) there appear in the second column the words: "The same duty as if the instrument was a conveyance of the property comprised therein"; and in the third column the words: "The person declaring the trust - or the person directing such declaration".
The plaintiffs contend that the declaration of trust of 21 February 1973 falls within either para (1)or 3(a). The defendant contends that it falls within para (2). The argument for the plaintiffs in regard to para (1) ran as follows: The purchase money was provided by the plaintiffs as trustees of the settlement; this money having been lent to "The V J Truskett Trust" was an asset and part of the settled fund; the money, in the character of trust money, was used for the purchase and, on the face of the contract, the apparent purchasers were the plaintiffs in their personal capacity; but the plaintiffs in their personal capacity had not provided the purchase money, it having been provided by them in their character as trustees; and what the declaration of trust did was to declare that in these circumstances the property vested in the plaintiffs as apparent purchasers was actually held by them on the trusts of the settlement and was impressed with the trusts contained therein.
I shall not for the moment take into consideration the problems arising from the fact that the trustees of the settlement had no power to borrow money on security, and shall assume, as the argument put to the Court did, that the whole of the borrowed moneys formed part of "The V J Truskett Trust". Counsel for the defendant Commissioner submitted, that even upon this assumption, the argument was incorrect, because para (1), he said, applied only to a true resulting trust situation, and the circumstances and assumptions on which the plaintiffs' argument was based were not such a true resulting trust situation. Counsel for the Commissioner submitted that the wording of para (1) was obviously intended to apply to the situation where property is purchased in the name of a stranger, and a resulting trust is presumed in favour of the person who is proved to have paid the purchase money in the character of purchaser (Lewin on Trusts 16th ed p 129; Jacobs' Law of Trusts 3rd ed p 329). "The clear result of all the cases, without a single exception, is, that the trust of a legal estate, whether freehold, copyhold, or leasehold, whether taken in the names of the purchaser and others jointly, or in the name of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advanced the purchase money" (per Eyre, CB in Dyer v Dyer (1788) 2 Cox Eq Cas 92; [1775-1802] All ER Rep 205). It is a question of fact in each case as to whether a person contributes money as purchaser (Diwell v Farnes [1959] 1 WLR 624 at 632-3). The presumption of a resulting trust is rebuttable (Jacobs op cit p 335; Strahan's Digest of Equity 6th ed pp 233-6). In support of this view of para (1) counsel for the Commissioner stressed the contrast in the phrases "the apparent purchaser" and "the person or persons who have actually paid the purchase money". The word "actually", he said, points up the question of fact involved in a resulting trust situation. He suggested that para (1) was dealing with a situation parallel with that provided for in s 73(1)(e). Sub section (1) of s 73 lists instruments not chargeable with ad valorem duty, and one of these, referred to in para (e) of the subsection, is: "A conveyance whereby the apparent purchaser of property that is vested in him upon trust for the person who was the real purchaser and who has actually paid the purchase-money therefor, conveys the same to the real purchaser". Counsel for the plaintiffs conceded that s 73(1)(e) appears to be dealing with a true resulting trust situation, but said that it was the contrast between the phrases "the apparent purchaser" and "the real purchaser" that was significant for this purpose. I do not think that in fact there is any particular significance in the different wording of s 73(1)(e) and para (1) of the Second Schedule. The similarities are more important than the differences, and are sufficient to show that the same class of resulting trust situation is being dealt with in each place. There might be more colour in the argument if the differences in wording had been introduced into the Act at the same time, but this is not the case. Paragraph (1) of the Second Schedule has remained unaltered since the Act was passed in 1920; but para (e) of s 71(1), in its present form, and dealing with its present subject matter, was introduced in 1931. Before that time s 73(1)(b) was wide enough to cover the case of a conveyance from the apparent to the real purchaser (it exempted "A conveyance under which no beneficial interest passes in the property conveyed"); but in 1931 s 73(1)(b) was amended in such a way as to be no longer applicable to a resulting trust situation.
I am of the opinion that counsel for the Commissioner is correct in his submission that para (1) of the Second Schedule is confined in its application to the resulting trust situation arising where property is purchased in the name of a stranger to the real party to the purchase. Once this view of the paragraph is taken it seems clear that the transaction of purchase in the present case does not fall within it. The real and apparent purchasers are the same persons. Only their capacities are said to be different; but in fact there is no real distinction in the capacities, for if the trustees were using trust funds provided for the purchase then they were purchasing as trustees, and no question of a resulting trust arises. It was not suggested by counsel for the plaintiffs that the purchase money had been provided by the beneficiaries of "The V J Truskett Trust"; and indeed having regard to the description in the settlement of the class of beneficiaries, no such suggestion could reasonably be made. The class includes the wife, children and remoter issue of Ian Douglas Truskett and the spouses widows and widowers of any such children and remoter children; and also such other persons not being the settlor as the trustees may from time to time appoint.
Turning now to the submissions based on para (3)(a) of the Second Schedule the argument of counsel for the plaintiffs was to the following effect. The declaration of trust of 21 February 1973 is an "instrument" within the meaning of the paragraph, since the term "instrument" is defined in s 3 to include every written document; it is an "instrument as aforesaid" in that it declares that property is to be held on trust; and it is an instrument by which the same trusts are declared as had been declared in the settlement. The property, he said, was impressed with the same trusts as those declared by the settlement; and the only remaining question was whether the property was the same property as that comprised in the settlement. The first step, the argument goes, is to turn to the settlement and ask what is defined as the settled fund. That inquiry shows that the settlement included after acquired property, which in turn, by virtue of cl 9, covers borrowed money. The next step involves the operative part of the settlement whereby what is held in trust is the sum of $100 and "all other property and money for the time being the subject to the trusts" of the settlement. By the terms of the settlement the trustees were bound to invest the settled fund, and one mode of investment was the purchase of real estate. Against this background, counsel for the plaintiffs said, the question was: Is the property which was acquired with money in part borrowed by "The V J Truskett Trust" the same property in respect of which the settlement declared the trusts? He submitted that the answer should be in the affirmative because the settlement clearly contemplates that there could be additions to the trust property in the future; that if there were such additions they would be impressed with the same trusts as are declared by the settlement; and that one method of adding to the trust property that was clearly contemplated by the settlement was the borrowing of money, which thereupon became part of the settled fund. The conclusion, he said, is that when borrowed money which constitutes part of the settled fund is used to acquire property then the property so acquired is impressed with the same trusts. It is sufficient, he said, from the plaintiff's point of view that a substantial part of the purchase money came from the settled fund; the trustees would in that event hold the property on the trusts of the settlement and subject only to the encumbrance created by the mortgage. The kernel of his argument was that in looking at para (3)(a) to ascertain property which is "the same property", the essential inquiry is not whether the property can be defined or identified by reference to the settlement, but rather whether it is property which becomes subject to the settlement on acquisition; and once one concludes that it is property which becomes subject to the settlement on acquisition, then it is "the same property" within the meaning of para (3)(a). The trusts, he concluded, were declared by the settlement in respect of the property comprised in the declaration of trust; that settlement was duly stamped with ad valorem duty; therefore the requirements of para (3)(a) were complied with.
I shall again leave aside any problems arising from the fact that money was borrowed on security without authority in the terms of the settlement. With regard to the basic problem as to whether the settlement could be said to have declared trusts in respect of property not identified at the date of the settlement, it was the contention of counsel for the plaintiffs as I understood his argument that, as a matter of statutory interpretation of para (3)(a), the same trusts were declared by the settlement in respect of the property acquired by the purchase as were declared by the declaration of trust, because there was comprised within the trusts of the settlement any after acquired property, including borrowed money, and acquisitions by means of such borrowed money. In so far as the settlement would not be taken, in accordance with normal equitable principles, to declare trusts in respect of after acquired property, para (2) could be called in aid as showing that instruments within the meaning of para (3) included instruments within the meaning of para (2). Paragraph (2) refers to an instrument declaring that any property vested or to be vested "is or shall be" held in trust. Reliance was placed on the decision of the High Court in Tooheys Ltd v Comr of Stamp Duties (1961) 105 CLR 602, and the judgment of the Full Court of the Supreme Court of New South Wales, given by Walsh J, in the same case ([1960] SR (NSW) 539).
"Counsel for the defendant Commissioner submitted the settlement was not effective in equity as a declaration of trust in respect of after acquired property, and I accept his submissions on this point. It would seem that in equity a declaration of trust must relate to existing property sufficiently identified by the trust instrument. So far as such an instrument purports to declare trusts in respect of after acquired property (in the sense of property introduced after the date of the instrument, not being simply a conversion of then existing trust property) that purported declaration is inoperative in equity, unless coupled with valuable consideration moving from the beneficiaries to the person declaring the trusts, even if the instrument is a deed. Where such consideration does in fact exist, then in equity the person declaring the trust will be bound to hold the after acquired property upon the trusts so declared. These principles are recognized in Toohey's Case by Walsh J (at 545-6) and Dixon CJ (at 611), and are established by the cases dealing with the assignability in equity of after acquired property. These cases are discussed in Norman v FC of T (1963) 109 CLR 9; 9 AITR 85, in particular by Menzies J at CLR 20-2; AITR 96-8 and Windeyer J at 24-5; 99-100(and see also: Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 per Dixon J at 26-7).
It will follow that if the argument of counsel for the plaintiffs on para (3)(a) is to succeed, it will be because the wording of paras (2)and (3) extends the scope of para (3)(a) to instruments such as the settlement in this case. It was common ground that if the settlement, in so far as it dealt with after acquired property, was a declaration of trust within the meaning of para (3), then it would be an instrument dealing with the same property as the declaration of trust of 21 February 1973 for the purposes of para (3)(a) - in other words the defendant Commissioner in this case did not wish to contend that the property purchased from the money borrowed without security (to the extent that the purchase was financed by such borrowing) was not within the concept of "the same property" if in fact the Court were to hold that the money borrowed without security fell within that concept.
The operation of para (2) in respect of after acquired property was considered in Toohey's Ltd v Comr of Stamp Duties [1960] SR (NSW) 539; 105 CLR 602. That case related to stamp duty payable on a deed made between Toohey's Ltd and trustees setting up a pension fund for the benefit of the company's employees. One of the clauses of the deed provided that the fund should consist of an initial contribution by the company of £50,000 at the date of the deed and of other moneys or property paid or transferred to it. The deed also provided that the company should pay to the trustees such amounts from time to time as should be actuarially certified as sufficient to provide for anticipated entitlements of members of the pension scheme. The first two annual instalments under this provision were to be £50,000 each, but the initial contribution of £50,000 was to be taken as on account of the first instalment. Stamp duty was assessed on the initial contribution of £50,000. The stated case made no reference to the actual payments made, but the High Court was informed that there was an interval of time after the execution of the deed before the initial contribution was in fact paid to the trustees (see: 105 CLR at 609). Walsh J (who delivered the judgment of the Full Court of the Supreme Court) proceeded on the basis that no payment may have been made at the time of execution, for he said, with reference to the question whether there was a completely constituted private trust at the time of execution of the deed, that it was not clear from the deed that, at the moment of its execution, the trustees already held property to which a trust could attach (at SR (NSW) 545). Walsh J in fact held that there was not such a completely constituted private trust, but said that that was not decisive of the case, and continued: "For the description of an instrument contained in para (2) under the heading 'declaration of trust' in the schedule is not so phrased as to be confined to declarations which create or which evidence a trust which is thereby or has already been completely constituted in such a way that property is then irrevocably subjected to the trust, and that the trusts are thenceforth immediately enforceable. Because of the inclusion of the words 'vested or to be vested' and the words 'is or shall be held in trust', the description extends to cases where no property is as yet vested in the proposed trustee, and it extends to cases in which no trust presently operative is declared. Thus it extends, in my opinion, to instruments which would not be classified, in the ordinary language of an equity lawyer, as being declarations of trust. The question is not, therefore, whether this deed is, in the ordinary sense of the term, a declaration of trust, but whether it satisfies the statutory description. It is only to be expected that this description would go beyond the ordinary sense of the term, since 'ordinary' declarations of trust are included in the definition of 'conveyance' and are thus chargeable without recourse to the provision now under consideration" (at 545-6). His Honour then goes on to indicate that the deed does satisfy the statutory definition in para (2). So far as that definition requires that the instrument makes a declaration in relation to "property", his Honour has only this to say: "It is executed by the persons whom it describes as trustees, and by it they declare that property, namely that which the deed calls the fund, and the components of which it sets out, in cl 4, is to be held by them in trust" (at 546). He had earlier set out the provisions of cl 4 as follows: "Clause 4 provides that the fund shall consist of 'An initial contribution of £50,000 by Tooheys at the date hereof for the purpose of establishing the fund' and of other moneys or property paid or transferred to it and of its investments and income" (at 541). The fund was to be augmented by a second £50,000, and also by actuarially determined amounts from time to time (at 541-2), so that his Honour's view would appear to be, though he does not say so in so many words, that the property to which the instrument related was not only the initial £50,000(upon which sum only stamp duty was assessed) but also the additional moneys that would at later times be paid into the fund. Indeed he indicated that these additional moneys might have been taken into account in assessing duty, for he said: "The Commissioner has treated the value of the property 'conveyed' as being £50,000. As the deed contemplates further substantial payments by Toohey's, in addition to the initial contribution of £50,000, it is perhaps arguable that a higher figure might properly have been taken as the basis of the assessment. But this point may be passed by, since the Commissioner has not relied and does not seek to rely upon it" (at 548).
Counsel for the plaintiffs contends that it is indeed the view of Walsh J that the deed he was concerned with declared, within the meaning of para (2), that the initial contribution of £50,000, the second £50,000, and the subsequent unascertained amounts, were or should be held on the trusts set out in the deed. Then, applying this supposed view of Walsh J to the present case, counsel argued that the property comprised in the settlement included the property comprised in the declaration of trust; that the settlement was an instrument duly stamped with ad valorem duty; and that accordingly the declaration of trust was chargeable only with the duty of $3 as an instrument falling within para (3)(a).
This argument not only assumes Walsh J to hold a view which he did not in fact state explicitly, but it also assumes that the word "instrument" where secondly occurring in para (3) includes any instrument referred to in para (2). I shall deal first of all with the assumption relating to the view of Walsh J. While it may be conceded that his Honour considered that the fund as described in the deed before him was the "property" vested or to be vested within the meaning of para (2), he appears to have regarded the fund as quantifiable for duty purposes. How it would or could be quantified did not concern him, for the Commissioner was content to assess duty on the basis of the initial contribution alone.
In Toohey's Case there was a further question as to whether the deed was exempted from stamp duty as an instrument "relating to the services of apprentices, clerks, and servants". In the Supreme Court it was held not to be such an instrument; and in the High Court Dixon CJ, Taylor and Windeyer JJ made the same finding, but Kitto and Menzies JJ dissented. Dixon CJ alone advanced independent reasons for holding that the deed fell within para (2). He rejected the submission that the words "or to be vested" were introduced to cover cases where a presently operative declaration of trust applies to some property or rights existing in the trustees but nevertheless some property remains to be vested in them (at 105 CLR 611-12). He said: "In my opinion the argument unduly restricts the meaning and application of the paragraph. The words 'any property vested or to be vested' seem to me to be directed simply to the two cases, namely the case of the declaration of a trust of property then vested in the person who declares the trust and the second case of a declaration of trust in advance of the vesting in the person who declares it of property which it is intended to make the subject of the trust. Here the first payment to be made is stated and quantified: no objection is possible on the ground that there is no property that can be identified or ascertained" (at 612). Counsel for the defendant Commissioner submitted that the limitation suggested by this passage is that the property the subject of a declaration of trust in para (2) must be capable of being identified or ascertained at the date of execution of the instrument.
Kitto J had only this to say on this aspect of the case: "I agree that the instrument in question in this appeal is liable to be stamped with the duty which the Commissioner has assessed, unless it falls within para (5) of the general exemptions" (at 616). Taylor J said: "The questions raised by the stated case were, in my opinion, answered correctly by the Full Court and if there had been no disagreement in this Court I would have been content simply to express my concurrence with the reasons given below" (at 620). He then went on to discuss the exemption point. Menzies J said: "Except for one matter" (namely the exemption question) "I agree with the reasons for judgment given by Walsh J for the Full Court" (at 623). He also went on then to the exemption point. Windeyer J on the declaration of trust point said only: "I have come to the conclusion that, substantially for the reasons given by Walsh J in the Supreme Court, the instrument in question is within the description in para (2) under the heading 'Declaration of Trust' in the Second Schedule to the Stamp Duties Act 1920-1956 (NSW)" (at 624).
It seems to me that there is nothing in the decision or reasons for decision in Toohey's Case, either in the Supreme Court or in the High Court, which constrains me to hold that the settlement does, within the meaning of para (2), declare trusts in respect of the property which later became the subject of the declaration of trust. I adopt the view that "property" within the meaning of para (2) means ascertained or identifiable property. It is this property which is the property "comprised" in the declaration of trust upon which duty is assessed, within the meaning of the second column of para (2). Accordingly trusts are declared by two instruments "in respect of the same property" only when the property was ascertained or identifiable (so as to permit the assessment of duty) at the time of execution of the earlier of the two instruments. It is to be noted that the wider meaning of para (2) contended for by counsel for the plaintiffs has no effect on the operation of para (2) itself, for the unascertained or unidentifiable property comprised in the instrument could not be made a basis for the assessment of duty. The extended meaning would have an operation only in so far as it extended the operation of para (3)(a) so as to exempt from ad valorem duty instruments declaring trusts of identifiable property in cases where a prior instrument had dealt in general terms with property to be subsequently ascertained and made subject to the trusts. It is to be noted also that this operation and exemption could arise only where the prior instrument had also dealt with ascertained or identifiable property, because, if it had not, there would not have been any ad valorem duty chargeable.
I shall consider next the assumption that the word "instrument" where secondly occurring in para (3)(a) includes any instruments falling within para (2). On the submission of counsel for the plaintiffs an instrument declaring trusts only in respect of after acquired property would fall within para (2) even if the property was not ascertained or identifiable at the time of execution of the instrument. But such an instrument would not fall within the term "instrument" where secondly occurring in para (3)(a) because it would not be stamped with ad valorem duty. Though not decisive, this consideration does remove what otherwise might be thought to be a persuasive parallel between para (2) and
para (3)(a). It is also to be noted that the opening words of para (3)(a) ("Any such instrument as aforesaid") by the same reasoning do not include an instrument declaring trusts only in respect of unascertained or unidentifiable property unless the earlier instrument also included property in respect of which duty could be assessed, and in that event it subjects the instrument to a fixed duty of $3, whereas no duty would presumably be payable upon it as an instrument under para (2). This seems anomalous. In fact the "instrument as aforesaid" that will fall for consideration under para (3)(a) will be one dealing with ascertained or identifiable property (whether or not it also deals with other property), and the only relevance of para (3)(a) will be that it will subject the instrument only to fixed duty, whereas it would have carried ad valorem duty under para (2). As the only relevant scope of para (3)(a) is instruments dealing with assessable property, the submission that the word "instrument" where secondly occurring includes declarations of trust of future property loses its force. For these reasons it seems to me that even if para (2) includes declarations of trust of unassessable property, this is not a ground for including them in para (3)(a); and that in the absence of such a ground the words "the same property" in para (3)(a) should be taken as referring to property which was capable of forming a basis of assessment of stamp duty at the time of execution of each instrument. This construction of para (3)(a) makes its operation consistent with the other two subparagraphs of para (3).
I am therefore of the opinion that the declaration of trust of 21 February 1973 is an instrument falling within para (2), and not para (1)or (3), under the heading "Declarations of Trust" in the Second Schedule of the Stamp Duties Act 1920. In these circumstances it is agreed that there is no issue as to the computation of stamp duty.
Counsel for the defendant Commissioner advanced an independent argument based on the fact that the trustees had no power to borrow money on security. He said that in equity the property was held by the trustees as trust property only to the extent of a part thereof being in proportion to the whole as 155 is to 315. The other part (the proportion being 160 to 315) was held by them beneficially. The charge to the Rural Bank would be marshalled wholly against the plaintiff's beneficial interest. If all his other arguments failed, the property would fall within para (3)(a) only to the extent of the proportion 155 to 315. Having regard to the findings I have made it is unnecessary to consider the validity of this argument, or its effect on duty.
I accordingly answer the first two questions in the stated case as follows:-
Question 1 - Yes.
Question 2(a) - Yes.
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