Archer v Deputy Federal Commissioner of Land Tax, Tasmania

This case concerned an appeal by William Henry Davies Archer and Alexander Archer, trustees of the will of Harriett Brooke, against an assessment by the Deputy Federal Commissioner of Land Tax for Tasmania. The dispute centred on the eligibility for a deduction under section 38A of the Land Tax Assessment Act 1910-1912. The original share in question was one-eighth of the estate of Harriett Brooke, which had been settled by her granddaughter, Jessie Harriett Adams (later Edyvean). Following a subsequent appointment by Mrs. Edyvean, her share was to be held in trust for her husband for life, her mother for life, and then for her brother absolutely. The assessment was for land held as at 30th June 1913.

The primary legal issue before the High Court of Australia was whether the deduction provided for in section 38A of the Land Tax Assessment Act 1910-1912 could be made in circumstances where an original share, originally held by a beneficiary of the testator, was subsequently settled by that beneficiary, resulting in the beneficial interest being shared among several persons, some of whom were relatives of the original settlor and some of whom were not. Specifically, the court had to determine if the wording of section 38A, particularly the phrase "each of the joint owners who holds an original share in the land under the original settlement or will," permitted the deduction when one of the beneficial owners was not a relative of the original settlor.

The court reasoned that section 38A, while extending the class of beneficiaries to include those taking under a subsidiary settlement, still maintained the condition that the beneficiaries must be relatives of the original settlor or testator. The court noted that the amendment in 1912, which introduced section 38A, changed the language from "all of whom are relatives" to "a number of persons, who are relatives," but this change was intended to include those taking under subsidiary settlements, not to remove the requirement that all beneficiaries must be relatives. In this case, Mrs. Edyvean's husband was not a relative of the original settlor, Harriett Brooke. Therefore, the beneficial interest was not shared among a number of persons who were all relatives. The court concluded that the case did not fall within the literal words of section 38A, and any non-literal construction would be inconsistent with the scheme of confining the benefit to relatives.

The question posed to the court was answered in the negative, meaning the deduction could not be made.