Ashby v Commissioner of Succession Duties (SA)

The appeal concerned assessments for succession duty made by the Commissioner of Succession Duties (SA) against Eric Johnston Ashby and Mary Elizabeth Drew following the death of William Brownlow Ashby the elder. The dispute arose from an indenture executed by the parties, under which the deceased had covenanted to pay sums of money to the appellants. The Commissioner assessed duty on the basis that these covenants constituted non-testamentary dispositions of property. The Supreme Court of South Australia upheld the Commissioner's assessments, and the appellants appealed to the High Court of Australia.

The central legal issue before the High Court was whether a covenant to pay money, as contained in the indenture, constituted a "disposition of property" within the meaning of the relevant sections of the *Succession Duties Act 1929-1940* (SA), specifically sections 4 (definition of "deed of gift"), 32 (1) (f), and 35 (3). The appellants argued that such a covenant merely created a chose in action and did not amount to a disposition of property, or alternatively, that if it was a disposition, it was made for full consideration and therefore not a "deed of gift."

The High Court, in allowing the appeal, reasoned that a covenant to pay money, in itself, does not constitute a disposition of property in the ordinary sense. While acknowledging that specific legislative provisions can deem certain obligations to be dispositions of property, the Court found that the *Succession Duties Act 1929-1940* (SA) did not, in this context, extend the definition of "disposition of property" to encompass a mere contractual obligation to pay money. The Court distinguished the present case from prior decisions, such as *Simms v. Registrar of Probates*, which involved different statutory language or circumstances where the incurring of a debt was expressly deemed a deed of gift. The Court concluded that the covenant created a liability but did not transfer any property.

Consequently, the High Court ordered that the appeal be allowed and the assessments of the appellants to duty under the *Succession Duties Act 1929-1940* (SA) be quashed.