National Trustees Executors and Agency Co of Australia Ltd v Federal Commissioner of Taxation (Chisholm's Case) (No 1)
(1953) 89 CLR 17727 ALJ 569
[1954] ALR 85
(Judgment by: Webb J)
Between: National Trustees Executors and Agency Co of Australia Ltd
And: Federal Commissioner of Taxation
Judges:
Dixon CJ
Webb JKitto J
Taylor J
Subject References:
Estate Duty (Cth)
Judgment date: 12 December 1953
Judgment by:
Webb J
Case stated by Fullagar J. under s. 28 of the Estate Duty Assessment Act 1914-1950. Questions including exchange questions, arise as to the calculation of deductions under s. 8 (7) where duties are paid in two or more foreign countries on a part or parts of the estate of a person who died domiciled in Australia leaving property within and beyond Australia. (at p191)
Section 8 (7) provides:
"When any duty is lawfully paid in any place outside Australia in respect of any part of the estate situate outside Australia there shall be deducted from the total duty to which the estate is liable under this Act the lesser of the following sums -
- (a)
- the amount of duty so paid in the place outside Australia; or
- (b)
- the duty which is payable under this Act in respect of that part of the estate".
(at p191)
If the phrase "in any place outside Australia" were to be held to be controlling, then a distributive application of s. 8 (7) would be required. But that would give in every case a pointless result, as the particular duty would then always be deducted from the total duty to which the estate is liable apart from deductions on account of the payment of foreign duties. This would be so, because there is no express provision in the Act fixing the order of such deductions and providing that after the first deduction is made the total duty for the purposes of each further deduction should be the original total less the deduction or deductions already made on account of the payment of foreign duty. Without such a provision the meaning of "total duty" is, I think, constant: it means the total duty without any deductions on account of the payment of foreign duties. If, as counsel for the commissioner submitted, the phrase "in respect of any part of the estate outside Australia' were to be held to be controlling, then, if, as counsel for the commissioner also submitted, s. 8 (7) is to be given a distributive application, again the same pointless result is reached. This suggests that what is intended by s. 8 (7) is not a number of completely independent assessments and separate deductions but only one deduction, i.e., the aggregate of the payments on account of foreign duties. I think the proper course is simply to apply s. 23 (b) of the Acts Interpretation Act 1901-1950, and to take the word "duty" in s. 8 (7) to include "duties" where foreign duty is referred to; the word "place" to include "places"; and the word "part" to include "parts": with the appropriate verbs and adjectives. So read s. 8 (7) has the same effect as the provision for which it was substituted by s. 5 of the Act of 1928; but subject to the limitation as to the amount that may be deducted from the total duty.
Apart from the obvious need to avoid the sacrifice of Australian duty to foreign duties no reason for this amendment was suggested or can be inferred. (at p192)
I think then that question (1) (a) should be answered "Yes". (at p192)
It becomes unnecessary to answer questions (1) (b) or (c), or question (2). (at p192)
As to question (3) if, as par. 5 of the case states, the duty paid in the United Kingdom was paid "in respect of the assets... valued at... 60,659 pounds stg. 2s. 2d.", then question (3) should be answered "60,659 pounds stg. 2s. 2d.", as counsel for the appellant submitted. But I do not understand it to be contended that the Court should adhere to the exact wording of the case in complete disregard of the provisions of the English statutes under which the exemptions amounting to 5,026 pounds stg. 8s. 2d. were granted. As the latter sum represented the values of the assets specifically exempted by those English statutes because of their particular nature, and not, say a mere proportion of the total value of the estate situate in the United Kingdom, I think that the commissioner should treat the part of the estate situate in the United Kingdom in respect of which duty was paid in the United Kingdom as of the value of 55,632 pounds stg. 14s. 0d.; and question (3) should be answered accordingly. (at p193)
It becomes unnecessary to answer questions (4) and (5). (at p193)