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

---

Spigelman CJ

The statutory background, the relevant facts and the issues appear in the judgment of Mason P. I agree with his Honour, for the reasons his Honour gives, that the Trustee was the owner of the land, whether or not the Trust vested on 22 December 1987.

2. With respect to the second issue argued before the Court, I have come to a different conclusion to his Honour.

3. The submission on behalf of the Appellant, which his Honour accepted, was that the issue of whether or not a Vesting Day could be specified pursuant to cl 1(13) of the Deed as being the date on which the decision is made, should be determined on the basis of the consequences for which cl 4 provides. These consequences come into effect ``from the Vesting Day''. It was submitted that this terminology contemplates the Vesting Day being a whole day of twenty-four hours commencing from the last moment of the previous day.

4. The determination of this issue turns on the construction of cl 1(13) itself. The submissions were directed to cl 4 which forms part of the context of cl 1(13), but is not the clause which must be construed. There is a strong indication within cl 1(13) itself that the Appellant's construction should be rejected.

5. One of the three ``dates'' on which the vesting is said to occur is ``(iii) the date of expiration of the perpetuity period''. Almost by definition, the Vesting Day cannot occur at the end of that ``date'', because the Deed would then offend the rule against perpetuities, contrary to the obvious intent of the subclause. That ``Vesting Day'' must commence either on or at the beginning of ``the date of expiration of the perpetuity period''. It is likely that the word ``date'' is used in the same sense in each of the three subclauses.

6. According to the Appellant's submissions, this construction should be rejected because in cl 4 the Trust is to be held for the beneficiaries ``from the Vesting Day''.

7. The word ``from'', when used in relation to the consequence of some act, is capable of being used in either of two senses: the relevant

---

ATC 4003

act is either operative from the commencement of the day specified, or it is operative from its conclusion. Which of the two is intended depends on the construction of the terminology used in the context in which it appears. (See e.g.
Associated Beauty Aids Pty Ltd v FC of T (1965) 13 ATD 506 at 509, 510 and 511; (1965) 113 CLR 662 at 668, 669 and 671 ;
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 440-441, 442 ). The prima facie meaning is that the day of the act is excluded. (In the two High Court cases referred to, only Windeyer J in Associated Beauty Aids at ATD 510; CLR 669 took the opposite view. See also Norton on Deeds (2nd ed) pp 178-181). However, the context may indicate that the prima facie meaning was not intended.

8. The relevant context in the Deed presently under consideration includes the provisions of cl 4 other than cl 4(1) and the comparison with the formulation of time in clauses 3 and 6.

9. To the extent not appointed under subcl 4(1):

• • the Trustees hold the Trust Fund ``for any Specified Beneficiary who shall be living on the Vesting Day'' (subcl 4(2))
• • for any of their brothers and sisters ``living at the Vesting Day'' (subcl 4(3))
• • for next-of-kin and others ``living on the Vesting Day'' (subcl 4(4)).

10. The Deed confers certain powers on the Trustees which are exercisable `` before the Vesting Day'' (clauses 3 and 6).

11. These clauses confer on the Trustees powers to deal with the income of the Trust whether by way of payment to beneficiaries or by way of accumulation for a purpose (cl 3) and to make advancements, loans and payments out of income to beneficiaries (cl 6).

12. The construction for which the Appellant contends would create a hiatus on the Vesting Day. The Trustees could not exercise these powers - which expire on the last day before the Vesting Day - yet they remained as active Trustees on the Vesting Day. It seems unlikely that this result was intended, although it should be noted that most of the Trustees' powers are exercisable at any time.

13. The word ``from'' can be construed to encompass the day of vesting. The word ``before'' cannot be construed to encompass the day of vesting.

14. Nothing in cl 4 itself suggests that the word ``from'' has to be read as meaning the day commencing from the last moment of the Vesting Day. All that is required is that there be an appointment some time ``before the Vesting Day'' for purposes of cl 4(1) or, that a person is known to be living ``on the Vesting Day''. Both of these matters are capable of precise ascertainment on the day in question.

15. The construction that prevents a hiatus occurring on the Vesting Day should be preferred. This coincides with the construction of ``date'' in cl 1(13) because of the identification in subcl (iii) of the perpetuity period.

16. Accordingly, in my view the nomination of 22 December 1987 as the Vesting Day was valid and effective. The issue before the Court is to be determined on the basis of whether or not there was an appointment prior to that day.

17. The resolution of 25 July 1986 is the only basis suggested as constituting such an appointment. Its validity depends on whether or not the final clause - ``but upon the basis that...'', as set out in the judgment of Mason P - is severable. In my view it is severable. The intention was to make the appointment effective as and from that date. The obligation said to be assumed, was assumed by the very same persons who are appointed. The appointment was not, on the proper construction of the resolution, conditional on the words in the qualificatory clause.

18. The submissions of the Appellant that the Trust was not a ``special Trust'' depended on the continuation of the existence of active duties on the part of the Trustee by reason of the failure of the determination of the Vesting Day and of the appointment. No other basis was advanced in its submissions. In my opinion, the relevant assessments ought to be made on the basis that the Trust was not a special Trust and, accordingly, the assessments are excessive.