C.A. be called a 1901. COMMISSIONER of “ บ. GIRLING & Co. 66 conveyance on sale." The conveyances have yet to be executed. Nor do I think the deed comes under the head of "Settlement, Deed of," which appears in the same Third Schedule. The deed of partnership is not a deed of settlement in the strict sense. The deed, in my opinion, is what it declares itself to be, a deed of partnership, and must pay duty as such. Clause 26 of the deed does not, in my opinion, operate as a conveyance on sale or a settlement. Unless every partnership deed which declares what the capital of a business is is to be treated as a conveyance on sale or a settlement, this deed cannot be so treated. It does not differ from an ordinary partnership deed. The appeal must be allowed, with £10 10s. costs, and disbursements. Appeal allowed. The Commissioner appealed from this decision. H. D. Bell, for the appellant (the Commissioner): The deed is a conveyance on sale. Under section 9 of "The Stamp Acts Amendment Act, 1891," duty as on a conveyance on sale is payable in addition to deed-of-gift duty. The deed is a conveyance which transfers interests in property, and, on the assumption that it is not a deed of gift, it is for valuable consideration. Section 88 and the following sections of "The Stamp Act, 1882," deal with conveyances on sale. The schedule has been amended by section 3 of "The Stamp Acts Amendment Act, 1886." If not, it is a settlement. See the schedule to the Act of 1882, as amended by section 11 of the Act of 1891. It is either a conveyance on sale or a settlement: Horsfall v. Hey(1); Coats v. Commissioners of Inland Revenue(2), which decides that such an instrument is a conveyance on sale; Foster & Sons (Limited) v. Commissioners of Inland Revenue (3), which contains, no doubt, a dictum of Lindley, L.J., according to which this would be a settlement only, but the case itself does not contravene the two other cases. (1) 2 Ex. 778; 17 L.J. Ex. 266. (3) [1894] 1 Q.B. 516. This is a deed of gift within the meaning of the Act of 1891 as amended by the Act of 1895. Section 6 of the Act of 1895 was passed" in order to prevent the avoidance or evasion of duties "by family arrangements or otherwise." So that fraudulent intent is not necessary. This is a transaction between blood relations which comes exactly within the terms of section 6. The deed recites that it is a family arrangement. The object was to make a fairer distribution of the estate, not to enter into a business transaction. This is the very thing which the section was intended to meet: See The Attorney-General v. Worrall(1) and The Attorney-General v. Gosling(2). An assignment by one partner to the other partners of his share in the partnership, they paying him out the value of the share, is a conveyance on sale: Lindley on Partnership(3). This, therefore, is a conveyance. It is a conveyance between blood relations, and it is by way of family arrangement. Therefore it is a deed of gift. In In re Chambers(4) there was nothing in the nature of a gift unless the sufficiency of the consideration was looked at. Since that decision there must be such a consideration as would be a sufficient one between strangers. But if the deed is in the nature of a family arrangement the question of consideration is immaterial. See, further, the cases cited in Christie v. Commissioners of Inland Revenue(5). Skerrett, for the respondents (W. B. Girling & Co.): — This is not a conveyance on sale. There must be an ordinary transaction of selling and purchasing. There may be transactions which are neither gifts nor sales. This is one. The dictum of Lindley, L.J., in Foster & Sons (Limited) v. Commissioners of Inland Revenue(6) applies. The amount of assets contributed by an incoming partner is not alone to be looked at. There is the capacity, the connection, &c. This cannot be called a "sale." In Coats v. Commissioners of Inland Revenue(7) there was a sale of shares in one company in consideration of a sale of shares in another company. This (1) [1895] 1 Q.B. 99. (2) [1892] 1 Q.B. 545. (3) 6th ed. 542. (4) 13 N.Z. L.R. 111. (5) L.R. 2 Ex. 46. (6) [1891] 1 Q.B. 516, at p. 529. C.A. 1901. COMMISSIONER v. GIRLING & Co. 66 66 is not a settlement; it is an ordinary business transaction. The word settled" is used in the definition of "settlement,' but is not in any way defined. It means conveyed upon "trust for persons in succession." Nor is it a declaration of trust by persons in whom the property was vested at the time. Further, the trusts declared must be trusts by way of settlement. This was no more than a partnership transaction. The object of having trustees was to have persons representing the partners who were under age. It is not a deed of gift. The mere disproportion between the amount contributed and the total capital is not a fair test. There is a variety of considerations. There is the capacity to assist in the business. These girls were probably brought up to the business, and capable of rendering great assistance. They gave £528, they released their brother William from the obligation to board them, and the two brothers from the obligation to find them clothing, and they are giving their services. This is not a sham partnership; it is a real transaction, and the sisters are taking all the risks of the business. Apart from the special definition in the statute no one could call it a gift. The recitals are entirely beside the question. The substance of the transaction must be looked at. The words "or otherwise howsoever," in section 6 of the Act of 1895, must be read as confined to things ejusdem generis. Unless limited in that way the definition would apply to an ordinary sale by one blood relation to another. [COOPER, J.-The exception of a bona fide purchase for valuable consideration in money is carried through.] That is so. The words "family arrangement are not the governing words. The governing words are " in order to avoid or evade duties." There must be something which, apart from the reservation to the donor, would be a gift. Clause 26 of the deed is not a conveyance of the real estate. The Act of 1895 does not deal with gifts. The Act of 1891 deals with gifts. The Act of 1895 deals with deeds for a consideration, not with gifts. The only case excluded is the case of a bona fide purchase for value in money. [DENNISTON, J.-Then every deed of partnership between two brothers is a deed of gift.] If they bring in the family property, if it is a family arrangement; not otherwise. [DENNISTON, J.-That is only in the recital.] The whole must be read in the light of the preamble. be the leading words of the preamble.] This is an avoidance of duties. Cur. adv. vult. EDWARDS, J., delivered the judgment of the Court(1) as follows: In our opinion, it is clear that the deed in this case is not liable to the duty imposed by the Deceased Persons' Estates Duties Act. The question arises upon the construction of "The Stamp. Acts Amendment Act, 1891 (No. 30), and "The Stamp Acts Amendment Act, 1895" (No. 67). The 7th section of the Act of 1891 (No. 30), under the head of "Deeds of Gift," provides that 66 Sections nine to fifteen, both inclusive, of The Deceased "Persons' Estates Duties Act 1881 Amendment Act, 1885,' are hereby repealed, and the following provisions are hereby "enacted in lieu thereof, namely: 66 66 66 "For the purposes of the said Act and this Act, 'deed "'of gift' shall mean and include every deed of gift, or "instrument by way of gift, transferring or purporting to "transfer property absolutely, and every conveyance, trans'fer, or other disposition of property containing trusts or dispositions to take effect during the life of the donor, and not being made before and in consideration of the marriage "of the donor, or in favour of a bona fide purchaser or encum"brancer for valuable consideration in money, and whether "or not the property comprised in such deed is subject to any limitation. 66 66 "deed of gift." 'Donor' means the person making any (1) Williams, Denniston, Conolly, Edwards, and Cooper, JJ. VOL. XX.-18. C.A. 1901. COMMISSIONER 2. GIRLING & Co. In the year 1894 the case of In re Chambers(1) was decided by this Court. In that case the donor had, in the month of OF STAMPS January, 1886, conveyed his land in separate parcels to his three sons, subject to an existing mortgage, taking from them mortgages by which they covenanted to pay to him certain sums, and also to pay to him, and to his wife after him, certain annuities. It was held that these transactions were deeds of gift, and that duty was payable on the difference between the actual value of the land when conveyed and the charges to which the land was made subject. These transactions were governed by the Act of 1885. In May, 1892, the donor executed four deeds of covenant, by which he covenanted to pay certain sums of money to trustees for his daughters. Each deed of covenant contained a provision that if the moneys payable by the sons under their mortgages should not be paid when due, then the donor might assign a portion of the moneys so secured in satisfaction of the sums which he had covenanted to pay. Each deed also contained trusts for payment of an annuity to the donor, and to his wife after him. It was held that to the extent to which the amounts covenanted to be paid were not covered by the annuities these deeds were deeds of gift; that the value of the annuities must be ascertained, and that death duty must be paid upon the residue. These transactions were governed by the Act of 1891 (No. 30). 66 In the following year the Act of 1895 (No. 67) was passed. The 6th section of this Act provides that "In order to pre"vent the avoidance or evasion of duties by family arrange"ments or otherwise, the definition of deed of gift' in section seven of The Stamp Acts Amendment Act, 1891,' is hereby extended to include every deed or instrument whereby any person directly or indirectly conveys, trans"fers, or otherwise disposes of property to or for the benefit of any person connected with him by blood or marriage, "in consideration or with the reservation of any benefit or advantage to or in favour of himself or any other person, "whether by way of rent-charge, or life or any other estate 66 66 66 (1) 13 N.Z. L.R. 111 |