Commissioner of Stamps (Qld) v Elliott Brothers Limited

The Commissioner of Stamps for Queensland appealed to the High Court of Australia against a decision of the Supreme Court of Queensland concerning the assessment of succession duty. The dispute arose from the death of Harry Solomon Levy, a shareholder in Elliott Brothers Limited, a company incorporated in New South Wales that carried on business and held assets in Queensland. The Commissioner assessed duty on the value of Mr. Levy's shares, but the company argued for a lower rate of duty.

The central legal issue was the proper construction of section 11(7) of the *Succession and Probate Duties Act 1904* (Qld), as amended by the *Succession and Probate Duties Acts Amendment Act 1918* (Qld). Specifically, the court had to determine whether the rate of duty payable by a foreign company on the shares of a deceased member should be calculated based on the full value of those shares, or on a proportion of that value determined by the company's Queensland assets, as stipulated in proviso (ii) to section 11(7). The Commissioner contended that the rate was determined by the full value of the shares, with only the taxable amount being reduced by the proportion of Queensland assets, while the company argued that the rate itself should be applied to the proportionate value.

The High Court, affirming the decision of the Supreme Court of Queensland, held that proviso (ii) to section 11(7) dictated that the duty payable by a foreign company carrying on business both within and outside Queensland was to be calculated in every respect as if the value of the deceased shareholder's shares was not their full value, but rather the proportion of that value determined by the ratio of the company's Queensland assets to its total assets. The court reasoned that the proviso modified the operation of the table of duties, meaning that the phrase "value of the shares or other interest" in relation to the calculation of duty should be interpreted as this proportionate value. Consequently, the rate of duty was to be applied to this reduced value, not the full value of the shares.

The appeal was dismissed, with the High Court upholding the Supreme Court's order that the succession duty should be assessed at a rate of 9 per cent on the proportionate value of the shares, rather than the 15 per cent rate initially assessed by the Commissioner.