HIGH COURT OF AUSTRALIA

ROY PALMER v COMMISSIONER OF STATE TAXATION (WA)

GIBBS, Mason and Murphy JJ

16 September 1976 - Perth 23 November 1976 - Sydney


Gibbs J    Although the questions involved in this case are of sufficient general importance to warrant the grant of special leave to appeal, I am of opinion that the judgment of Jackson CJ was correct and that the appeal should be dismissed. I have had the advantage of reading the reasons prepared by Mason J in support of that conclusion, and am in agreement with them.

   There is only one aspect of the matter on which I would add a few words. It was argued on behalf of the appellant that there was no property to which the gift related within the meaning of s 74(2) of the Administration Act 1903-1970 (WA). By that section every "gift inter vivos", if made within the time therein prescribed and applicable to the circumstances, "shall be deemed to have made the property to which such gift relates chargeable, to the extent of the value of the gift at the time it was made, on the death after the commencement of this section of the person making the gift, with the payment of the duty payable under this Act, as though part of the estate of the person making the disposition". The words of that subsection are not well chosen. The expression "gift inter vivos" is defined in s 74(1). Paragraph (a) of that subsection refers to various kinds of dispositions of property and para (c) refers to the release, discharge, surrender, forfeiture or abandonment of property. In those cases there will normally be no difficulty in discovering the property to which the gift relates, although the value of the gift will not be the value of the property, but the latter value less the consideration. Paragraph (b), however, deals with transactions entered into with the intention, and with the effect, that the estate (in the sense of the general assets) of one party is diminished and the estate of the other increased. Such a transaction is a gift to the extent of the inadequacy of the consideration for it. In the cases to which para (b) refers, no specific item of property necessarily passes from one party to the other, and it would write s 74(1)(b) out of the Act if, as the appellant contends, there were for that reason no property to which the gift relates. In the present case I consider it sufficient, without finding it necessary to identify any specific item of property to which the gift relates, to say that the value of the gift is represented by the amount ($84,966) by which the one estate was increased and the other diminished. This amount notionally became part of the estate of the deceased and attracted duty accordingly.

   


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