Commissioner of Stamp Duties (NSW) v Millar

The case involved an appeal to the High Court of Australia from the Supreme Court of New South Wales. The plaintiffs, as executrix and executor of a deceased estate, sought to recover death duty paid to the Commissioner of Stamp Duties (NSW). The dispute centred on whether shares held by the deceased in companies incorporated and registered outside New South Wales, but which conducted mining operations within New South Wales, were correctly included in the dutiable estate for the purposes of New South Wales death duty. The deceased was domiciled and resident in Victoria at the time of his death.

The legal issues before the High Court were twofold. Firstly, the Court had to determine whether section 103(1)(b) of the Stamp Duties Act 1920-1924 (NSW), which purported to include such shares in the dutiable estate, was within the legislative power of the New South Wales Parliament, given the deceased's non-residence and non-domicile in the state and the location of the companies' share registers. Secondly, the Court had to consider whether the repayment of duty, as provided for in section 140 of the Stamp Duties Act 1920-1931 (NSW), was precluded by the condition that no refund would be made for property wrongly included due to a "mistake in the construction of this Act."

A majority of the High Court (Rich, Starke, Dixon, and McTiernan JJ.) held that the provisions of section 103(1)(b) of the Stamp Duties Act were beyond the legislative powers of New South Wales. Their Honours reasoned that a shareholder has no legal or equitable proprietary interest in the assets of a company, and therefore, the New South Wales Parliament could not validly legislate to impose death duty on shares held by a non-resident in a foreign company, even if that company conducted mining operations within the state. The Court further held that the Commissioner's inclusion of the shares was not due to a "mistake in the construction of the Act" but rather a mistake regarding the extent of legislative power, meaning the refund provisions were not excluded. The Court also affirmed that an action for a refund under section 140(3) could be brought irrespective of whether the Commissioner had been satisfied that the property was wrongly included.

Consequently, the High Court reversed the decision of the Supreme Court of New South Wales in part, finding in favour of the plaintiffs regarding the recovery of the death duty paid on the shares. The appeals were allowed in part, and the matter was remitted for further consideration.