Hill v Hill - [1933] HCA 45

HILL AND OTHERS

RESPONDENTS.

DEFENDANTS AND PLAINTIFFS,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Death and Succession Duties-Death duty (N.S.W.)-Incidence and apportionment

Different disposition-Necessity for clear intention to negative statutory obligation -Residuary estate given to trustees upon trust to convert-Direction to pay thereout testamentary expenses including death duty and estate duty-Burden of duty on property notionally treated as testator's-Stamp Duties Act 1920-1931 (N.S.W.) (No. 47 of 1920-No. 13 of 1931), secs. 102, 114, 120 (1)*.

By an indenture of declaration of trust, made in 1914, certain property was conveyed to trustees upon trust, as to one-third thereof, for the benefit of the testator during his life with remainder upon trust for the benefit of his widow and children. The testator died in 1931, survived by his widow. By his will, after bequeathing certain legacies "free from all probate and Federal estate duties and debts," he gave the residue of his property to his trustees upon trust to convert and to stand possessed of the proceeds of conversion " "upon trust to pay thereout my just debts funeral and testamentary expenses (which latter expression shall be deemed to mean and include probate duty payable to the Government of the State of New South Wales and estate duty payable to the Government of the Commonwealth of Australia) and to stand possessed of the rest residue and remainder thereof upon trust to divide the same equally between" four named persons. Sec. 120 (1) of the Stamp Duties Act

administrator, the duty payable in 1920-1931 (N.S.W.) provides that

respect thereof shall be paid by the 'Where any property which is or the

persons entitled thereto according to value of which is included in the

the value of their respective interests dutiable estate of a deceased person is

therein, to the administrator." vested in any person other than the

49 CLR 412

Held, by Rich, Starke, Dixon and McTiernan JJ. (Evatt J. dissenting), that the provision as to payment of duties did not indicate an intention by the testator to negative the statutory obligation imposed by sec. 120 (1) of the Stamp Duties Act 1920-1931 (N.S.W.); therefore so much of the death duty as was payable in respect of the testator's share in the property subject to the trusts of the indenture should be borne by such share.

Decision of the Supreme Court of New South Wales (Harvey C.J. in Equity) Permanent Trustee Co. v. Reeves, (1933) 50 W.N. (N.S.W.) 111, reversed on this point.

APPEAL from the Supreme Court of New South Wales.

By an indenture of declaration of trust dated 9th January 1914, certain property, then forming part of a residuary estate, was conveyed to trustees upon trust, as to one-third thereof, for the benefit of Frank Hill during his life with remainder upon trust for the benefit of his widow and children. Frank Hill died on 1st June 1931, his wife, Marcella Hill, surviving him. There was no issue of the marriage. By his will,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hill v Hill

Details

AGLC: Hill v Hill [1933] HCA 45
Case: [1933] HCA 45
Decision Date: 21 September 1933

CaseChat Overview and Summary

The case of *Hill v Hill* concerned a dispute over the incidence of death duties in New South Wales. The testator, Frank Hill, had in 1914 created a trust over certain property, retaining a life interest with remainder to his widow and children. Upon his death in 1931, his will directed his trustees to pay his debts, funeral, and testamentary expenses, explicitly including New South Wales probate duty and Commonwealth estate duty, out of the proceeds of his residuary estate. The question before the High Court of Australia was whether the death duty attributable to the testator's share in the 1914 trust property should be borne by that property or by the testator's residuary estate.

The central legal issue was whether the testator's will contained a clear intention to negative the statutory obligation imposed by section 120(1) of the *Stamp Duties Act 1920-1931* (N.S.W.). This section requires that where property included in a deceased person's dutiable estate is vested in someone other than the administrator, the duty payable in respect of that property shall be paid by the person entitled to it to the administrator. The testator's will included a direction to pay testamentary expenses, defined to include death and estate duties, out of his residuary estate. The Supreme Court of New South Wales had held that this direction meant the duty attributable to the settled property should be paid out of the residue.

A majority of the High Court, comprising Rich, Starke, Dixon, and McTiernan JJ., held that the provision in the will did not demonstrate a clear intention to override section 120(1) of the *Stamp Duties Act*. They reasoned that while the testator directed his executors to pay duties out of residue, this was a common testamentary clause intended to define the ultimate residue and manage the payment of debts and expenses from the actual estate. Such a clause, they found, was not sufficient to create a legacy for beneficiaries outside the will, thereby relieving them of their statutory obligation to reimburse the estate for the death duty attributable to their property. The Court emphasised that displacing the statutory liability required clear and explicit language indicating an intention to confer a bounty on those outside the will.

Consequently, the appeal was allowed, and the High Court declared that the death duty payable in respect of the testator's share in the property subject to the 1914 indenture should be borne by that share. Evatt J. dissented, finding that the testator's explicit inclusion of death and estate duties within the definition of testamentary expenses to be paid from residue demonstrated a clear intention to relieve all beneficiaries, including those of the settled property, from this burden.

Orders