1906. v. ARMYTAGE. H. C. OF A. Mary S. Armytage, his wife, and trustees, by which certain station lands were vested in the trustees to the use of Frederick DAVIDSON W. Armytage for life, and thereafter to the use of his wife for life, and, after the death of the survivor of them, to the use of the trustees, in trust for all or such one or more of three named sons, Harry, Frank, and Bertram Armytage in such shares, and subject to such provisions and limitations over, and in such manner as the said Frederick W. Armytage, should by deed or will appoint, and in default of appointment in trust for the three sons equally, with gifts over upon death under 21 years. valorem duty was not then payable on such deed. All the sons attained 21 years. Ad By deed poll, executed on 24th January 1895 Frederick W. Armytage irrevocably appointed one undivided third part of the lands (subject to the life estates) upon trust for Bertram Armytage. By deed poll, executed on 7th June 1904 Frederick W. Armytage recited a previous appointment of the remaining two-thirds, subject to a power of revocation therein reserved, and he revoked that previous appointment and irrevocably appointed onefifteenth part of the lands upon trust for Bertram Armytage, and the remaining nine-fifteenths upon trust for Frank Armytage. Both the instruments recited the disentailing assurance of 1st. March 1886. On 2nd August 1904 the two instruments of appointment were lodged with the Collector of Imposts, and he was required to give his opinion as to whether they were dutiable, and, if so, with what amount they were chargeable. The Collector was of opinion that "the instruments were made in favour of persons who were the objects of a power of appointment in a settlement on which ad valorem duty had not been paid, and that they fell under the heading Settlement or gift, deed of,' and were not exempted by sec. 28 of the Stamps Act 1892 from payment of stamp duty on the value of the property settled or given by them." The Collector thereupon required a statement of the property appointed, and of its value, in compliance with sec. 30 of the Stamps Act 1892. Statutory declarations were thereupon made that the property in question was that settled by the instrument of 1st March 1886, and that it H. C. OF A. was of the value of £50,766. In respect of the appointment of 24th January 1895 the Collector assessed duty on £16,922 at £1 5s. per cent., and demanded £211 10s. 6d. duty, £105 15s. 3d. for penalty under sec. 26 (2) and £161 17s. for penalty under sec. 26 (4) of the Act. In respect of the appointment of 7th June 1904, the Collector assessed duty on £33,844 at £1 10s. per cent., and demanded £505 13s. 2d. for duty, £50 15s. 4d. for penalty under sec. 26 (1) and £6 6s. 10d. for penalty under sec. 26 (4). These sums were paid, and, upon the request of Frederick W. Armytage, a case was stated for the opinion of the Supreme Court asking the following questions in respect of each of the instruments: (1) Whether it was chargeable with duty. (2) With what amount of duty it was dutiable. The Supreme Court having answered the questions by saying as to each instrument that it was not chargeable with any duty (Armytage v. Collector of Imposts (1)), the Collector of Imposts now appealed to the High Court. Hayes, for the appellant. The instruments in question are deeds of settlement or of gift within the meaning of the Schedule, Division VIII., to the Stamps Act 1892. Every deed executing a power of appointment is a settlement. The words in Schedule VIII. " whereby any property is settled in any manner whatsoever" define what is meant by a deed of settlement. It is not necessary to a settlement that there should be a creation of interests in succession: Kane v. Kane (2), where property given to a married woman for her separate use was held to be "settled." In In re Player, ex parte Harvey (3), a settlement is defined as "a disposition of property to be held for the enjoyment of some other person." That case was approved in Wiseman v. Collector of Imposts (4). An instrument is a settlement if it creates a beneficial interest in some person in whom it did not previously exist. Here there is an alteration of the trusts of the original settlement, for the gift over to the three sons as tenants in (1) (1906) V.L. R., 504; 28 A. L.T., 9. (2) 16 Ch. D., 207. (3) 15 Q. B. D., 682, at p. 687. 1906. DAVIDSON 27. ARMYTAGE. 1906. DAVIDSON V. ARMYTAGE. H. C. OF A. common is cut out. In Russell v. Commissioners of Inland Revenue (1) an exercise of a special power of appointment was held to be a new settlement. The interests created by these instruments are new interests, although they are of the same amount. Sec. 28, which exempts from taxation an instrument exercising a special power of appointment if the original settlement has paid duty, implies that, if the original settlement had not paid duty, the instrument would be taxable. [He also referred on this point to Sweetapple v. Horlock (2); In re Jackson's Will (3); Moffat v. Collector of Imposts (4); In re Austin (5); Castlemaine Brewery Co. Ltd. v. Collector of Imposts (6); Commissioner of Stamp Duties v. Stephen (7); Spensley v. Collector of Imposts (8); Webb v. McCracken (9); Real Property Act 1890, sec. 62.] If the instruments are dutiable the basis of taxation is the whole value of the property dealt with, and not the value of the interests created. Alpe on Stamp Duties, p. 205; Onslow v. Commissioners of Inland Revenue (10). Weigall, for the respondent. Neither of these instruments is a settlement. The lands referred to in them were settled in 1886, and the only power the respondent had was to fix the proportions of the estate which each of his sons should take. The effect of the settlement of 1886 was to create estates in the three sons, subject to being divested by the respondent exercising the power of appointment. Such an instrument is not commonly called a settlement, although in exercising a power of appointment the appointor may make a settlement. Farwell on Powers, 2nd ed., pp. 320-325. A settlement means an instrument whereby a succession of interests in property is created or the enjoyment of property is restricted. See Vaizey on Settlements, vol. I., chap. I., sec. 1.; In re Knowles' Settled Estates (11). There must be something analogous to what is ordinarily known as a settlement: Davey v. Danby (12). These instruments are not (1) (1904) 2 K.B., 342, at p. 348. (3) 13 Ch. D., 189. (4) 22 V.L.R., 164; 18 A.L.T., 144. (7) (1904) A.C., 137. (8) 24 V.L.R., 53; 19 A. L.T., 243. (9) 3 C.L.R., 1018. (10) (1891) 1 Q. B., 239. (11) 27 Ch. D., 707. (12) 13 V.L.R., 957; 9 A. L.T., 163. 1906. deeds of gift, for a gift connotes the parting with property with H. C. OF A. the object of benefaction. See Key and Elphinstone's Precedents and Forms in Conveyancing (8th ed.), vol. I., pp. 89, 98; vol. II., p. 693. The instruments, if taxable, are taxable according to the value of the property settled: In re Twopenny (1). It cannot be said that the whole property is settled when only estates in remainder are settled: Onslow v. Commissioners of Inland Revenue (2) deals with the particular words of the English Act, which are different from those of this Act. See Stamp Act 1870 (33 & 34 Vict. c. 97), sec. 3 and Schedule; Alpes on Stamp Duties, p. 205; Key and Elphinstone's Precedents and Forms in Conveyancing (8th ed.), p. 545n. Hayes, in reply, referred to Key and Elphinstone's Precedents and Forms in Conveyancing (8th ed)., vol. II., p. 562. The judgment of the Court was delivered by Cur, adv. vult. GRIFFITH C.J. The question for determination in this case arises under the Stamps Act 1892. Under the Schedule to that Act an ad valorem stamp duty is payable upon settlements and deeds of gift. The 8th clause is in these words:-" SETTLEMENT OR GIFT, DEED OF (1) Any instrument other than a will or codicil whether voluntary or upon any good or valuable consideration other than a bona fide adequate pecuniary consideration whereby any property is settled or agreed to be settled in any manner whatsoever, or is given or agreed to be given in any manner whatsoever, such instrument not being made. before and in consideration of marriage." The Act imposes an ad valorem duty in accordance with "the value of the property," -whatever that may mean. The present appeal relates to two instruments, dated respectively 24th January 1905, and 7th June 1904, both of which were made in execution of a power of appointment contained in a settlement made on 1st March 1886, before the passing of the Act by which the lands now in question were conveyed to trustees, subject to the life (1) 24 V.L.R., 596; 20 A. L.T., 179. (2) (1891) 1 Q. B., 239. VOL. IV. 14 DAVIDSON v. ARMYTAGE. 1906. DAVIDSON V. ARMYTAGE. H. C. OF A. estates of Frederick William Armytage and Mary Susan Armytage, upon trust for Harry Armytage, Frank Armytage, and Bertram Armytage, or such one or more of them for such estates or interest and in such manner as Frederick William Armytage should by deed or will appoint, and, in default of appointment, for the three objects of the power as tenants in common in fee. By the two deeds now in question Frederick William Armytage exercised the power of appointment in favour of Bertram Armytage and Frank Armytage respectively, by appointing to them in fee after the expiration of the life estates. The question is whether these are settlements within the meaning of the Act. The learned Judges of the Supreme Court, who were of opinion that the instruments were not settlements, relied to a great extent upon the decision of the Full Court in Castlemaine Brewery Co. Ltd. v. Collector of Imposts (1). The document under consideration in that case was in no sense a settlement, but the Judges made use of some general observations that are, in turn, applicable to the present case. They cannot, however, be taken as a complete definition of what is a settlement. It was contended by Mr. Weigall for the respondent that these instruments are not settlements, and in support of that contention he used various arguments. He maintained, amongst other things, that the term "settlement" necessarily connotes either restriction of power of disposition or a succession of interests. Restrictions alone cannot be the test, for a deed conveying land to trustees for uses for various persons in succession, might be a settlement, although there might be no restriction on the power of disposition of the beneficiaries. The case of Kane v. Kane (2) is a case showing that there may be a settlement without any succession of interests. In the case of Moffat v. Collector of Imposts (3) the Court held, and in my opinion correctly, that an instrument was a settlement although it was an appointment of a sum of money to the appointee absolutely for his own use. So that this cannot be the test. Collector of Imposts (4), Madden In the case of Wiseman v. (1) 22 V.L. R., 4; 17 A.L.T., 282. (3) 22 V.L. R., 164; 18 A.L.T., 144. (4) 21 V.L.R., 743, at p. 748; 17 A. L.T., 251. |