Mack v Commissioner of Stamp Duties (NSW)

This case concerned an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales regarding the assessment of stamp duty on the estate of a deceased testator. The dispute arose between the executors of the testator's estate and the Commissioner of Stamp Duties (NSW) over whether certain sums of money, covenanted to be paid by the testator to his daughters, should be deducted as debts from the estate's value or taxed as gifts.

The legal issues before the High Court were twofold: firstly, whether the sums of £3,000 covenanted to be paid by the testator to each of his six daughters under deeds of covenant constituted "debts actually due and owing" within the meaning of section 53 of the Stamp Duties Act 1898 (NSW), thereby being deductible from the estate; and secondly, whether these same sums, if not deductible as debts, were taxable as "personal estate... taken under any gift" within the meaning of section 49(2)(B) of the Act.

The Court reasoned that the sums covenanted to be paid were indeed "debts actually due and owing" under section 53, as the phrase "due and owing" did not necessitate that the debt be immediately payable, a distinction supported by the use of "due and payable" elsewhere in the legislation. The Court further held that these debts were not taxable under section 49(2)(B) because that section applied to property that had been disposed of by the deceased, whereas the creation of a debt was a liability rather than a disposition of existing assets. The Court concluded that the debts were deductible from the estate and not subject to gift duty, reversing the Supreme Court's decision. The appeal was allowed, and the Commissioner was ordered to refund the overpaid duty.