Commissioner of Stamp Duties (NSW) v Perpetual Trustee Company Limited

The Commissioner of Stamp Duties (NSW) appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales concerning the assessment of stamp duty on a deed of settlement. The dispute arose when the Commissioner sought to charge ad valorem duty on the full value of the property settled by the deed, while the Perpetual Trustee Company, as the trustee, argued that duty should only be payable on the value of the remainder interest, or that a fixed duty was appropriate.

The legal issues before the High Court were whether the deed of settlement constituted a "conveyance" liable to ad valorem duty under section 66(1) of the Stamp Duties Act 1920-1924 (NSW), and if so, whether it qualified for an exemption under section 73(1)(b) of the Act. Specifically, the Court had to determine if the beneficial interest that the settlor retained for his life was considered part of the property conveyed for the purpose of ad valorem duty, or if it fell within the exemption for conveyances where no beneficial interest passes.

The High Court, allowing the appeal, reasoned that the deed of settlement was a conveyance within the meaning of section 66(1) and was not exempt under section 73(1)(b). The Court held that by executing the deed, the settlor conveyed the entirety of his property to the trustee, thereby creating new beneficial interests, including a life interest for himself. This life interest was not a reservation of an existing interest but a new interest granted under the settlement. Therefore, ad valorem duty was payable on the value of the whole of the property conveyed, not merely the remainder interest.

The High Court ordered that the decision of the Supreme Court of New South Wales be reversed. The deed of settlement was held liable to ad valorem duty on the full value of the property settled, and the Commissioner's assessment of £504 was upheld. The respondent was ordered to pay the costs of the appeal.