Lang v Webb

The case of *Lang v Webb* concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria. The dispute arose between the executors of the estate of Henrietta Lang, deceased, and the Commissioner of Taxes, Thomas Prout Webb. The core of the disagreement was whether certain parcels of land, which Henrietta Lang had transferred to her three sons more than twelve months before her death, were liable for probate duty as part of her estate.

The legal issue before the court was the interpretation of section 11 of the *Administration and Probate Act 1903* (Vic.). Specifically, the court had to determine whether the transfers of land constituted gifts *inter vivos* that were exempt from probate duty, or whether they fell within the ambit of section 11, which deemed certain gifts made within twelve months of death, or gifts where the donor did not relinquish bona fide possession and enjoyment to the entire exclusion of the donor and any benefit to them, as part of the deceased's estate for duty purposes. The crucial question was whether the donees had assumed and retained bona fide possession and enjoyment of the land to the exclusion of the donor.

The court's reasoning focused on the requirement for the donee to assume bona fide possession and enjoyment of the gifted property to the entire exclusion of the donor. In this case, although the legal title to the land had been transferred to the sons, on the same day, they had leased the land back to their mother, Henrietta Lang, at a fair rent. The land remained in her physical occupation and was worked as part of her larger estate, in the same manner as before the transfers. The court held that there had not been a sufficient change in possession and enjoyment to satisfy the requirements of section 11(b). The Chief Justice emphasised that where property is susceptible of actual delivery, possession must be taken by such delivery, and that a mere change in legal dominion was insufficient without a corresponding change in actual possession and enjoyment to the exclusion of the donor.

The High Court affirmed the decision of the Supreme Court of Victoria. Consequently, the appeal by the executors was dismissed, and the lands transferred to the sons were deemed chargeable with probate duty as part of Henrietta Lang's estate. The executors were not entitled to be recouped the duty paid under protest.