Equity Trustee Executors and Agency Co Ltd v Commissioner of Probate Duties (Vic)

Equity Trustee Executors and Agency Co Ltd (the appellant) appealed to the High Court of Australia against a decision of the Supreme Court of Victoria concerning the assessment of probate duty. The dispute arose from the Commissioner of Probate Duties (Victoria) (the respondent) seeking to include certain assets in the dutiable estate of the late Mr. J.B. Were, specifically shares in a company that had been transferred to his children during his lifetime. The Commissioner argued that these transfers constituted gifts made within three years of Mr. Were's death, and therefore, under the relevant provisions of the *Administration and Probate Act 1958* (Vic), they were deemed to be part of his dutiable estate.

The central legal issue before the High Court was whether the shares transferred by Mr. Were to his children were, in fact, gifts within the meaning of the Act, or if they represented something else that would exclude them from being considered part of his dutiable estate. Specifically, the court had to determine if the transfers were made for "full consideration in money or money's worth," which would exempt them from being treated as gifts for probate duty purposes. The appellant contended that the transfers were not gifts but rather bona fide transactions for valuable consideration, thereby not attracting probate duty.

The High Court, in its reasoning, focused on the nature of the consideration provided for the share transfers. It was established that Mr. Were had received a sum of money from his children for the shares, which the Commissioner argued was not "full consideration." The court examined the evidence to ascertain if the amount paid represented the true value of the shares at the time of transfer. Applying the principles of contract law and the specific provisions of the *Administration and Probate Act 1958* (Vic) concerning gifts and consideration, the court determined that the consideration paid was indeed the full value of the shares at the time of the transactions. Consequently, the transfers were not deemed to be gifts made without full consideration, and thus, the shares were not to be included in the dutiable estate.

The High Court allowed the appeal, setting aside the order of the Supreme Court of Victoria. The court ordered that the assessment of probate duty be made without including the value of the shares transferred to Mr. Were's children.