Commissioner of Stamp Duties (NSW) v Jones

[1971] HCA 67

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Windeyer and Owen JJ.

COMMISSIONER OF STAMP DUTIES (N.S.W.) v. JONES

(1971) 125 CLR 511

9 December 1971

Death Duties (N.S.W.)

Death Duties (N.S.W.)—Notional estate—Insurance policy—Superannuation scheme—Group insurance of employees taken out by employer—Whether premiums paid by deceased—Whether "policy of assurance on the life of the deceased"—Stamp Duties Act, 1920-1958 (N.S.W.), s. 102 (2) (h).

Decisions

December 9.
The following written judgments were delivered: -
BARWICK C.J. In this matter I have had the advantage of reading the reasons for judgment prepared by my brother Owen. I am in agreement with his conclusion that the premiums paid by the trustees of the Staff Superannuation Plan to the A.M.P. Society in respect of the group endowment insurance policy were not paid by the deceased within the meaning and operation of s. 102 (2) (h) of the Stamp Duties Act (N.S.W.) (at p513)

2. I share with my brother Owen the doubt as to whether the group endowment insurance policy with the A.M.P. Society is a policy on the life of the deceased within the meaning of s. 102 (2) (h) of the Stamp Duties Act. Indeed the inclination of my mind is that it is not. But like my brother Owen I have no need to resolve the question in this case. But in any case in my opinion the matter is not resolved merely by deciding that according to ordinary concepts of insurance the policy ought to be regarded as in the category of life insurance. The question is rather whether the nature of the policy satisfied the words of s. 102 (2) (h) bearing in mind the evident purpose of the subsection as a whole and to the provisions of the other paragraphs in association with which par. (h) is found. (at p513)

3. I would dismiss the appeal. (at p513)

McTIERNAN J. I agree, for the reasons given by Owen J., that this appeal should be dismissed. (at p513)

MENZIES J. The appellant Commissioner assessed the respondents, as executors of the will of David Lloyd Jones deceased, to duty upon the footing that $38,427, one half of the proceeds of a policy upon the life of the deceased in the David Jones Ltd. Special Staff Superannuation Plan with the A.M.P. Society, hereinafter called "the Society", was part of the dutiable estate of the deceased. Whether it was so or not depends upon whether or not the policy moneys fall within the scope of s. 102 (2) (h) of the Stamp Duties Act (N.S.W.), which is in these terms:

"For the purposes of the assessment and payment of death duty . . . the estate of a deceased person shall be deemed to include . . . (h) Any money payable to any person under a policy of assurance on the life of the deceased where the whole of the premiums have been paid by the deceased or a part of that money in proportion to the premiums paid by him where part of the premiums have been paid by some other person." (at p514)

2. The appellant stated a case to the Court of Appeal of the Supreme Court of New South Wales which, by a majority, decided that the policy moneys did not fall within the scope of this provision (1971) 1 NSWLR 106 The basis for this was that the deceased had not paid any part of the premiums upon the policy which yielded the moneys. (at p514)

3. The complications that there are here arise from the circumstance that the deceased himself was not a policy holder in the Society otherwise than as one of a number of employees of David Jones Ltd. - which I shall call "the company" - covered by a policy with the Society taken out by the trustees of the David Jones Ltd. Special Staff Superannuation Plan. This had been done pursuant to a trust deed whereunder the company and its chosen employees made contributions to the trustees - the employees by way of authorized deductions from their salaries - to be paid into an account "to be opened by the Trustees and shall be applied by the Trustees in payment of the premiums on policies with the Society . . . " (at p514)

4. The trustees were required to, and did, keep on foot a policy with the Society on the lives of members, including the deceased, to provide a benefit in respect of each male member at the age of sixty-five of an amount equal to three times his annual salary at the date of his becoming a member. (at p514)

5. The deceased signed the following document on 11th November 1955, before the execution of the trust deed:

"APPLICATION FOR MEMBERSHIP OF DAVID JONES LIMITED SPECIAL STAFF SUPERANNUATION PLAN

To the Trustees, DAVID JONES LIMITED Special Staff Superannuation Plan. I, David Lloyd Jones being eligible hereby apply for membership of the Special Staff Superannuation Plan and in consideration of my admission to membership I agree to be bound by the Trust Deed and Rules governing the Plan. I hereby authorise the Company as my agent to deduct each fortnight from my salary my contribution to the Plan for the purpose of paying premiums on my behalf and all such payments shall be deemed to be payments to me personally. Signed D. L. Jones."

The word "to" in the last line of this document may be a mistake for the word "by". (at p515)

6. The provisions of the deed were carried out and what was called a group endowment insurance policy was issued to the trustees by the Society. Premiums were paid by the trustees. It appears that the premiums paid were appropriated to the lives assured under the policy. The deceased was such a life. One half of the premiums appropriated to his life came from deductions from his salary; the other half came from the company. (at p515)

7. I consider that, by virtue of the policy, the deceased became an insured person, and, despite the arguments on behalf of the respondents, I am satisfied that the policy was one on the life of the deceased, along with the lives of other members of the plan. (at p515)

8. It was argued for the respondents that the Commissioner failed at the outset because the policy which yielded the money was not "a policy of insurance on the life of the deceased". A number of reasons were advanced for this. The first was that it was not a policy on his life because the death benefit was only payable if the deceased were in the employ of the company at the time of his death. It seems to me that this limitation does not involve the conclusion that the policy was not upon the life of the deceased. Term policies are well recognized policies of insurance on life and many life policies are issued according to which the death benefit ceases after a specified age. An insurance upon the life of an employee, while he is an employee, is a typical instance of "keyman insurance" which is commonly regarded as an insurance upon the life of the employee. See Carapark Holdings Ltd. v. Federal Commissioner of Taxation (1967) 115 CLR 653, at p 663 I do not know how a policy upon the life of a person while he is in the employ of a company is to be described if it is not to be described as a policy on the life of that person. Next it was argued that, because the policy provided benefits other than death benefits, it was necessary to compare the various benefits and characterize the policy according to the principal benefit that it secured. Doing this here, so it was contended, the policy was a superannuation policy rather than a policy upon the life of the deceased. However, in many cases superannuation policies are life policies, and the distinction which it was sought to apply seems to me quite unreal. What the trustees were obliged to do, and did, was to "effect and keep on foot a policy with the Society upon the lives of members". The policy provided for the appropriation of premiums "in respect of the lives to be thereby assured" (cl. 8). For the purpose of the policy an assured person means "an employee of the Company whose life is assured under this policy" (cl. 11). Thus the very terms of the policy demonstrate that it was a policy upon the lives of members. Another argument, in support of the contention that the policy was not upon the life of the deceased, was that the policy was one upon the lives of members rather than upon his life. It seems to me, however, that, because the deceased was a member, the policy was inter alia a policy upon his life. Finally, on this point, it was argued that, because the policy contains provisions that are unusual in a policy upon a person's life, it is not such a life policy. Reference was made to cl. 17, among others, authorizing the Society to terminate the policy. It may be that the policy contains unusual conditions, but, if it does so, the only consequence is that there is here a policy of insurance upon lives with unusual terms. Thus, all the threshold objections to the assessment fail. (at p516)

9. The real problem here, and the one upon which the learned judges of the Court of Appeal were divided, is whether or not half of the premiums had been paid by the deceased. (at p516)

10. It is not to be doubted that the deceased's salary was a source of part of the premiums paid by the trustees to the Society. The deceased requested the company to make deductions from his salary to pay to the trustees, to be paid by them to the Society. The deductions were expressed to be for the purpose of paying premiums "on my behalf". When the company paid the contributions of the deceased, together with other contributions, to the trustees pursuant to cl. 11 of the deed, the trustees received those payments to be paid into an account and to be applied in the payment of premiums on policies with the Society. The submission of the Solicitor-General for the Commissioner was to the effect that the group endowment insurance policy, which was issued to the trustees to cover the life of the deceased and the lives of other employees, was an aggregation of separate policies, each upon an individual member of the fund. I do not so regard it. Rather, it is one policy effecting insurance on the lives of those named in the schedule thereto in the manner set out therein. Whether the Society received one premium, or as many premiums as there were persons assured, is not so clear. The provisions of cl. 5 would suggest the latter and I am disposed to the view that once there was an appropriation pursuant to cl. 8, any payment made to the Society by the trustees should be regarded as covering the payment of individual premiums. For convenience I set out cll.5 and 8 of the policy:

"5. The non-payment of the specified premiums or any one of them in respect of any assured person shall not void this policy in respect of the assurance on his life so long as the surrender value in respect thereof as fixed by the Board, after deduction of any loan or charge thereon, is sufficient for the payment of any such premium. The Board may appropriate a sufficient portion of such surrender value towards the payment of any premium due and any sums so appropriated shall bear compound interest at such rate as the Board shall determine in pursuance of By-law 9 (c) of the Society's By-laws and shall be a charge upon this policy and may be deducted from any moneys payable under this policy in respect of such assured person." "8. The Society shall be under no obligation to accept any payment of premiums in respect of this policy unless such payment shall be clearly appropriated in respect of the lives to be thereby assured. If the Society shall accept payment of premiums not clearly appropriated as aforesaid the Society may at any time thereafter appropriate such payment or such part thereof as shall not be clearly appropriated to such of those lives previously assured and such of those believed by the Society to be intended to be assured as the Society shall think fit and in such proportion as the Society shall think fit." (at p517)

11. If the ultimate conclusion is that the deceased paid part of the premiums, the conclusion that there was a separate premium for the insurance upon the life of each member would aid a conclusion that the deceased paid half of the premiums for the insurance upon his own life. It does not, however, resolve the question whether the deceased paid any part of the premiums. To determine the answer to this problem does, I think, require reference to authority, particularly Barclays Bank Ltd. v. Attorney-General (1944) AC 372, and Wayne v Commissioner of Stamp Duties (NSW) (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309 (at p517)

12. In the former case, the House of Lords, agreeing with the dissenting judgment of Luxmoore L.J. in the Court of Appeal, decided that life policies had not been "wholly kept up" by a settlor who had assigned two policies of insurance, which he had effected on his own life, to trustees for the benefit of his son and others, together with certain investments from the income of which he directed the trustees to pay the premiums on the policies. In these circumstances it was held that the premiums had been paid by the trustees out of the trust fund. The argument which was rejected was that, notwithstanding payment by the trustees, the premiums had been kept up by the settlor by reason of his having, in advance, made provision for their payment. Lord Wright said (1944) AC, at pp 379-380:

"In truth, once there was an express trust to provide for payment of the premiums fully constituted in the terms in which it was, the settlor had thenceforth nothing to do with keeping up the policies. That devolved on the trustees. The first Lord Devonport had divested himself of his property in the fund by his voluntary assignment of it to the trustees to hold on the trusts declared in the deeds. These trusts included keeping up the policies by paying the premiums, but the settlor did not himself pay them. That was the duty of the trustees under the trusts subject to which they held the fund. They did not pay the premiums as agents for the settlor, nor did they do so under any covenant or agreement with him, for there is nothing of the sort in the trust documents. The settlor could not revoke the trust or terminate the trustees' powers as he would have been able to do if they had been his agents, nor could he control the way in which they executed the trust or take steps to enforce it. He was not a beneficiary under the trust."

Lord Simonds acknowledged that a person may, in certain circumstances, be said to keep up a policy although another person pays the premium, but said (1944) AC, at p 382:

". . . where the payment is made by a trustee whose duty and right it is to pay whether the settlor wills it or not, it is not he but the trustee who pays the premiums and keeps up the policy. And this appears to me more emphatically to be the case when, as here, the settlor has not even a right to intervene and require the trustee to perform his trust." (at p518)

13. This decision of the House of Lords was applied by the Court of Appeal of the Supreme Court of New South Wales in Wayne's Case (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309, where a deceased person had been a contributor to a compulsory superannuation scheme under which policies of assurance were effected on the lives of members in the names of the trustees of the scheme. It was held that the premiums were not, in any relevant sense, paid by the deceased and that, accordingly, no part of the policy moneys paid to his widow and child upon his death was brought to duty under s. 102 (2) (h) of the Stamp Duties Act. Jacobs J.A., with the approval of Wallace P. and Asprey J.A., said (1966) 85 WN (Pt 1) (NSW), at p 310; (1966) 2 NSWR, at pp 316-317:

"Moneys were deducted from the salary of the employee and paid into a common fund. Then the trustees paid the premiums. Once the moneys were received by the trustees the employee could not recover them nor could he in his capacity as payer of the money, which is in this connection the relevant capacity, require that the trustees expend it in payment of premiums on his policy or policies nor could he require that the trustees hand the money back to him upon some ground that he had revoked an authority in the trustees to expend it in a particular way. In other words, the employee handed over the moneys not under any revocable mandate to spend it on his behalf, so that when they paid a premium it might be said that he himself was paying it, nor was it a payment by the employee which under some contract which he had made was actually carried out by the trustees. As was stressed in Barclays Bank Ltd. v. Attorney-General (1944) AC 372, regard must be had to the legal character of a trustee. In the circumstances which existed in that case and, I think, in the circumstances of the present case, the payment was by the trustees only. There was no payment by the deceased of any of the premiums." (at p519)

14. Unless these decisions are to be distinguished, they govern this case. The majority of the Court of Appeal applied them, but Jacobs J.A. distinguished Wayne's Case (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309 and it becomes of critical importance to consider the basis upon which his Honour did so. It was on the footing that, in Wayne's Case (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309, the trustees were under no contractual obligation to the contributor to use what had been deducted from his salary to pay premiums, whereas here the deed did constitute such a contract. According to its terms, every employee, upon becoming a member, is to be deemed to have executed the deed as a party to it. Moreover, the deed, by cl. 13, requires the trustees to apply the moneys paid to them by the company in the payment of premiums on policies. In Wayne's Case (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309, however, the contributor was a beneficiary under the fund and the deed constituting the fund required the trustees to take out policies and pay all premiums thereon from the appropriate section of the fund. Once there is a trust, it seems to me that the relationship between trustee and beneficiary goes beyond the scope of contract and that, in appropriate proceedings by beneficiaries, or, indeed, by one beneficiary, the trustees can be compelled to carry out their trust obligations. In this connexion reference may be made to Lever Bros. and Unilever Ltd. v. Inland Revenue Commissioners (1945) 1 All ER 145, at p 152, where Lord Greene M.R., in speaking of the Barclays Bank Case (1944) AC 372, said:

"It is to be observed that the language of the document in that case was the common language which you find in trust documents, as you find in the documents here: The trustees shall do so-and-so and so-and-so. Those words do not import a contractual obligation at all, but merely lay down the terms of the trust under which the trustees are to be bound to act. The trustees thus express their willingness to hold the trust property on those trusts, and as soon as they have done so they are bound. It is illusory, in my opinion, to say that the settlor in such a case obtains a contractual right enforceable against the trustees." (at p520)

15. Accordingly, the fact, that here each member of the fund becomes, as it were, a party to the deed, is not at the root of his right to have the trust performed. It is sufficient that he is a beneficiary. Jacobs J.A. recognized that the distinction which he drew was a fine one and that "the ultimate result achieved in both cases differed little". In my respectful opinion, such difference as there is does not bear upon the critical question, i.e. did the contributor pay part of the premium? I agree with the majority of the Court of Appeal that the case is not to be distinguished, and I agree with the whole of the Court of Appeal that Wayne's Case (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309 correctly applied the decision of the House of Lords in the Barclays Bank Case (1944) AC 372 The Solicitor-General sought to distinguish the Barclays Bank Case (2) on the footing that there the settlor was not a beneficiary and could not enforce the trust which he had established. This is a matter referred to by Lord Simonds (1944) AC, at p 382 in the passage which I have already cited, but only, I think, to give added emphasis to his conclusion. The decision does not turn upon that circumstance. (at p520)

16. Did then the deceased pay half of the premiums on the insurance upon his life effected under the policy? To this question I would answer "No". Although I am disposed to think that he did provide for the money to pay such premiums, the authorities support what ordinary usage would suggest, viz. that to provide money to go into a trust fund from which premiums are to be paid, is not to pay the premiums or any part of them. To make provision for a payment to be made is not the same as to make a payment. (at p520)

17. It is for this reason that I am of the opinion that the appeal should be dismissed. (at p520)

WINDEYER J. Death duty in New South Wales is, pursuant to the Stamp Duties Act, levied at rates prescribed upon the final balance of the estate of a deceased person. Section 102 describes various forms of property which for this purpose are included in his dutiable estate. The primary item, s. 102 (1) (a) is "all property of the deceased which is situate in New South Wales at his death". Then s. 102 (2) by its several paragraphs brings into the estate property of various kinds which did not belong to the deceased at his death. In the argument a generalization was suggested of these provisions which attract so-called "notional estate" to duty. They all, it was said, designated property, of one kind or another, which had belonged to the deceased but which he had parted with in his lifetime by some form of disposition as described in the statute. This description - derived from what Isaacs J. said in Watt's Case (Commissioner of Stamp Duties (N.S.W.) v. Perpetual Trustee Co. Ltd. (1926) 38 CLR 12, at p 32 as discussed by Dixon C.J. in Gale's Case (Commissioner of Stamp Duties (N.S.W.) v. Gale) (1958) 101 CLR 96, at pp 106-109- is no doubt apt for many cases of gifts, settlements and other dispositions as described in various paragraphs of s. 102 (2). But it is not apt for par. (h) with which we are concerned. It seems to me that the only common characteristic of the various paragraphs is that created by the Act itself. Each describes a form of property - remaining in existence after the death of the deceased, or coming into existence upon his death, and having some connexion with his affairs during his life - which the legislature has said is to be aggregated with property that was actually his at his death in order to determine the value of his dutiable estate. Thus the effect of any paragraph is not dependent upon any presupposition of a policy of s. 102 (2) but upon whether or not some property answers the relevant description. (at p521)

2. The words of par. (h) that are here in question are:

"Any money payable to any person under a policy of assurance on the life of the deceased where the whole of the premiums have been paid by the deceased or a part of that money in proportion to the premiums paid by him where part of the premiums have been paid by some other person. This subparagraph shall not apply in any case where the deceased has been fully reimbursed in money or money's worth in respect of the premiums paid by him at any time, or to any moneys payable under a policy which are liable to duty by reason of subparagraph (a) of paragraph (1) of this section."

In the stated case submitted to the Supreme Court it was said that the Commissioner, relying on the decisions in Wayne v. Commissioner of Stamp Duties (N.S.W.) (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309; and (1969) 91 WN (NSW) 51- contended that, if no property were brought to charge under any other provision of the Act, par. (i) would apply, and duty be assessable in accordance with it. But the Supreme Court did not deal with any other provision than par. (h) and the question on this appeal was confined to it. I therefore say nothing as to par. (i), except that it does not follow that if the proceeds of an insurance policy are not brought to charge by par. (h) they are necessarily caught by the words "other interest" in par. (i). (at p522)

3. The relevant facts are sufficiently set out in other judgments. I need not repeat them in detail. I mention only some salient aspects. The trust, by which a fund was established to be known as the David Jones Ltd. Special Staff Superannuation Plan, was constituted by deed made in 1956 between David Jones Ltd. ("the company") and trustees. The deed recited that it originated because the company was "desirous of assisting certain of its employees to provide individual benefits for themselves and/or their dependants on retirement and of fully securing the rights of such employees and/or dependants to receive such benefits". The deed provided for the trustees receiving periodically contributions from those of the company's employees who being of the class eligible to become members of the "plan" had elected to do so,tandualsoscorresponding contributions from the company. From thetcontributions the trustees thus received and the investment thereofutheyswere required (by cl. 14 of the deed as later amended) ton"effectoand keep on foot a policy with the Society (scil. the AustralianoMutual Provident Society) on the lives of members whichishallnprovide a benefit in respect of each member at death or at the date hereinafter provided of an amount at least equal to thrice his annual salary calculated at the date of his becoming a member". By cl. 15 the policy effected by the trustees was to "secure that the benefits thereunder for any member shall be provided on the sixty-fifth birthday in the case of a male member and the sixtieth birthday in the case of a female member". The trustees, pursuant to their obligations under the deed, duly took out a policy described as a group endowment assurance policy with the Society. This policy covers the members collectively: but each member is called in the policy an "assured person", and "assured person" means "an employee of the company whose life is assured under this policy". For each assured person the premium is separately stated and "the sum assured" in respect of each is determined. David Lloyd Jones, who died in 1961, was then and had been for some years an employee of the company. He had been a member of the superannuation plan from its inception Contributions amounting to half the premiums payable to the Society which, in the words of the trust deed, were "required to provide for him his benefit under the plan" were regularly deducted by the company from his salary and, with other similar deductions, paid periodically to the trustees. Pursuant to the deed, the company duly contributed to the trustees the balance of the amount of the premiums required in respect of all the members to enable the policy to be kept on foot. When David Lloyd Jones died the proceeds, amounting to $76,854, of the policy attributable to his life as an assured person were paid by the Society to the trustees of the plan. They paid this sum to his widow, she being his "designated beneficiary" to receive them pursuant to the trust deed. The Commissioner for Stamp Duties claims that half this sum, being he says an amount attributable to the half of the premiums which by deduction from his salary was contributed by the deceased, forms part of his dutiable estate by virtue of s. 102 (2) (h). The Supreme Court (Court of Appeal Division), by majority, rejected this claim (1971) 1 NSWLR 106 Hence this appeal. (at p523)

4. The first question that arises is whether the sum that the Society paid to the trustees on the death of the deceased was "money payable" to them "under a policy of assurance on the life of the deceased", within the meaning of the words of s. 102 (2) (h). I do not think that it can be said that it was not on the ground that the policy was a collective one covering several assured persons and described as a group endowment assurance policy. It can, I think, be regarded as a separate insurance in respect of each assured person according to its terms. But this does not mean that the trustees hold the moneys they receive as contributions on a series of separate trusts. And when they pay to the Society the amount due for the premium payable under the policy they are not paying any parts thereof as agents for the assured persons severally considered. Those considerations, however, do not affect the primary question whether the policy, considered solely in relation to the deceased, was for the purposes of the statute a policy on his life. I turn to that. (at p523)

5. The policy can in relation to the deceased be called a life policy. It would unquestionably answer that description in other contexts. For example, the definition in the Commonwealth Life Insurance Act 1945-1965 defines "life policy" in terms that are a reflection, with modifications, of the definition in s. 30 of the Assurance Companies Act, 1909 (U.K.) of "policy on human life". This definition is wide enough to cover various kinds of life policies: - whole life policies, endowment assurances of various kinds, pure endowments, and term policies. An endowment policy can be properly called an insurance on the life of a specified person. That has not, I think, been questioned since the decision in Gould v. Curtis (1913) 3 KB 84 This Court has recognized it: see The National Mutual Life Association of Australasia Ltd. v. Federal Commissioner of Taxation (1959) 102 CLR 29, at pp 41-46 But in this case the critical words are in an enactment relating to the dutiable estate of a deceased person for the computation of death duty. In this context it seems to me that the words "any money payable to any person under a policy of assurance on the life of the deceased" mean money that is the proceeds of a whole of life policy payable on the death of the life assured. It may be that the proceeds of an endowment assurance in common form - by which the sum assured becomes payable upon survival of the life assured to a certain age or date or upon death before that date - would be included in the description in par. (h) of s. 102 (2) if death occurred before the maturity date. But the paragraph does not extend to catch moneys that had become payable under an endowment policy that had matured before death. That is because s. 102 by describing property that the estate of a deceased person "shall be deemed to include" looks to the date of death and to the effect of death. The result is consolidated by the words "money payable" as distinct from "money paid", death being, as I read the words, taken as the event on which money is "payable" under the policy. (at p524)

6. Endowment policies are a form of life insurance because, whether they be term policies, pure endowments, or endowment assurances of the more usual form, they are predicated upon the duration of a life beyond a given date or its termination within a given time. In The National Mutual Life Association's Case (1959) 102 CLR 29, I explained the essential distinction, as I see it, between life insurances of all forms and insurances upon other contingencies. I shall not repeat that here. Under an endowment policy, of the kind that life companies now commonly issue, moneys become payable on the happening for the life assured of either of two event: living to a given date or dying before that date. In either case the contingency upon which the moneys are payable is simply the duration of a life. But the "group endowment assurance policy" that we have before us is not of that simple kind. Whether it was "a policy of assurance on the life of the deceased" within the meaning of s. 102 (2) (h) must depend upon its terms, not upon conventional descriptions of other kinds of life policies. If conventional descriptions are to be regarded, it would I think be ordinarily called an employees' superannuation policy. (at p525)

7. Superannuation schemes for the benefit of employees of large business organizations are well known today. Sometimes participation by an employee is compulsory as an incident of his service. Sometimes it is voluntary. Contributions to superannuation funds are allowable deductions, subject to relevant statutory requirements, in the assessment of income for the purposes of income tax. The trust deed in the present case was obviously drawn with the provisions of the Income Tax Assessment Act, s. 66, in mind, as witness the recital that the benefits that members of the plan should receive were to be "fully secured". An insurance policy covering the obligations under a superannuation scheme may well be, as in this case, an essential part of the scheme. Moneys payable under a superannuation policy are generally, as in this case, payable in full when a person assured reaches the retiring age and leaves the employer's service, or on his service being terminated by his death - the surrender value being payable in certain circumstances if he retires from the service before reaching the retiring age, when in respect of him the policy is cancelled. A policy of that kind is no doubt a complex and composite form of life insurance partaking of the older forms of a term policy and an endowment policy with continuance in the employer's service until death or reaching the prescribed age as contingencies of its maturity. Such a policy answers to Bunyon's classic definition of life insurance, frequently accepted by courts, as a contract "in which one party agrees to pay a given sum upon the happening of a particular event contingent upon the duration of human life". But that such a policy is a form of life policy, commonly written by life companies, is not enough to bring it within the terms of s. 102 (2) (h). So far as I know, the death benefit under employees' superannuation schemes insured by life policies has not up till now been said to be, or generally considered to be, part of the dutiable estate of a deceased employee. It seems to me to be far removed from the words of par. (h), read in relation to their subject matter, the contents of a dutiable estate. If I be wrong as to this, I would still say that in this case the Commissioner's claim must fail because I consider that the premiums on the policy were not paid wholly or in part by the deceased, as is required to bring the proceeds of the policy received by the trustees of the superannuation plan to charge as part of the dutiable estate of a deceased member of the plan. On that aspect I have nothing to add to what has been said by Menzies J. and Owen J. (at p525)

8. I would dismiss the appeal. (at p525)

OWEN J. Section 102 (2) (h) of the Stamp Duties Act (N.S.W.) provides that for death duty purposes the estate of a deceased person shall be deemed to include -

"Any money payable to any person under a policy of assurance on the life of the deceased where the whole of the premiums have been paid by the deceased or a part of that money in proportion to the premiums paid by him where part of the premiums have been paid by some other person."

At the time of his death and for some years prior thereto the deceased was an employee of David Jones (the company) and in 1955, while he was in the service of the company, it decided to adopt a Staff Superannuation Plan (the plan) for the benefit of certain classes of its employees, to be underwritten by the A.M.P. Society (the Society). The plan was put into operation and the deceased became a member of it. Stated in general terms, what was done to set up and operate the plan was as follows: (at p526)

2. A trust deed was executed by the company under which trustees were appointed to administer and control the plan. The deed provided (inter alia) that the trustees should take out and keep on foot with the Society what was described as a "group endowment assurance policy" covering the employee members of the plan and providing for payments to be made by the Society to the trustees in certain events including the death of a member while in the service of the company or on his retirement from that service. The moneys so paid to the trustees were to be dealt with by them in accordance with the trust deed. The employee members and the company were each to make regular contributions to the trustees of amounts which would enable the latter to meet the payment of premiums on the policy, and in the case of each employee member the company was to deduct the amount of that employee's contribution from his salary and pay it, along with its own contribution, to the trustees who in turn were to pay the Society the premiums and keep the policy on foot. Each employee who became a member of the plan was to be deemed to be a party to the deed. (at p526)

3. The plan was carried out and the amount of the deceased's contributions was deducted from his salary and paid by the company, along with its own contributions, to the trustees who in turn paid to the Society the premiums on the policy. In the case of the deceased, the company contributed from its own funds an amount equal to the deceased's contributions. On the death of the deceased and by reason of it, the Society in accordance with the policy paid to the trustees the sum of 38,427 pounds ($76,854) and this was paid by them to the widow of the deceased. The appellant Commissioner claims that one half of this sum, is by virtue of s. 102 (2) (h), to be included in the deceased's estate for death duty purposes since, so he submits, the deceased paid one half of the premiums on a policy of assurance on his life. (at p527)

4. Two questions seem to me to arise.

(1) Whether any part of the premiums paid by the trustees to the Society was "paid by the deceased" within the meaning of s. 102 (2) (h). (2) If so, whether the group endowment assurance policy taken out by the trustees is properly to be described as "a policy of assurance on the life of the deceased" within the meaning of s. 102 (2) (h), having regard to the facts that it provided for benefits payable on the occurrence of events other than death, for example on retirement, and that the benefits payable on death were payable only should that death occur during the employee's service with the company.

I am of opinion that the first of these questions should be answered in favour of the respondents. The premiums paid to the Society were in fact paid by the trustees. In so doing they were not acting in any way as the agents of the deceased. They were acting as trustees pursuant to the obligations imposed upon them by the trust deed. It is true that part of the moneys received by them to enable them to carry out their duties as trustees was paid by the deceased who authorized the company to deduct the amount from his salary but I am unable to accept the proposition that because of that fact and that the deceased may have been able to compel the trustees to carry out their trust duties the deceased is to be regarded as the person who paid part of the premiums to the Society. That proposition is, in my opinion, answered by the decision of the House of Lords in Barclays Bank Ltd. v. Attorney-General (1944) AC 372, a decision which was rightly applied by the Court of Appeal Division of the Supreme Court in Wayne v. Commissioner of Stamp Duties (1966) 85 WN (Pt 1) (NSW) 301; (1966) 2 NSWR 309, a case in which the facts appear to me to be, in all relevant respects, similar to those in the present case. (at p527)

5. For these reasons I would dismiss the appeal and I do not find it necessary to determine what is, to my mind, the difficult problem raised by the second question which I have mentioned earlier, namely whether the policy issued by the Society was "a policy of assurance on the life of the deceased" or whether it is more properly to be described as the Society described it, namely an endowment policy, a well-recognized class of insurance which, it might be thought, would not be properly described as a policy of assurance on the deceased's life within the meaning of s. 102 (2) (h), notwithstanding that one of the events upon the happening of which benefits would become payable was the death of the deceased while in the company's service. (at p528)

6. In my opinion the appeal should be dismissed. (at p528)

Orders

Appeal dismissed with costs.