Tasmanian Permanent Executors and Trustees Association Ltd v Commissioner of Taxes (Tas)

[1972] HCA 7

HIGH COURT OF AUSTRALIA

Barwick C.J., Menzies, Windeyer, Walsh and Gibbs JJ.

TASMANIAN PERMANENT EXECUTORS AND TRUSTEES ASSOCIATION LTD. v. COMMISSIONER OF TAXES (TASMANIA)

(1972) 127 CLR 526

9 February 1972

Death Duties

Death Duties (Tas.)—Notional estate—Life insurance—Policy effected by husband containing trusts for benefit of wife if she were living when assured sum fell due—Premiums paid by husband—Whether proceeds included in dutiable estate of husband—Deceased Persons' Estates Duties Act 1931, (Tas.), s. 5 (2) (j) (ii), (2AA)—Life Insurance Act 1945-1965 (Cth), s. 94.

Decisions

The following judgments were delivered : -
BARWICK C.J. In this matter the Chief Justice of the Supreme Court of Tasmania decided that on the death of a husband who had insured his life by two policies of assurance for the benefit of his wife should she be living at the date when the sums assured should become due, the policies were not converted into policies for the absolute and indefeasible benefit of his wife within the meaning of s. 5 (2AA) of the Deceased Persons' Estates Duties Act 1931-1968, (Tas.). Accordingly he held that the Commissioner of Taxes had rightly included the moneys payable under those policies in the notional estate of the deceased husband, the husband having paid the premiums. (at p527)

2. The appellant's counsel has submitted to this Court, as he did to the Supreme Court, that upon its proper construction s. 5 (2AA) is satisfied by the death of the husband during the period named in the sub-section, in that on that death the widow became indefeasibly entitled to the proceeds of the policies. It is claimed that this amounted to a conversion of the policies themselves so that thereafter they were policies for the absolute and indefeasible benefit of the widow. But in my opinion no change whatever took place in the policies themselves on the death of the husband. They remained the same policies, their terms unchanged. It is the conversion of the policy which the sub-section in terms requires. All that happened on the death was that the policies operated according to their terms. Because the widow was then alive the contingency subject to which she had a beneficial interest in the policies was satisfied. On the death she became entitled to the proceeds of the policies because of and in accordance with their unchanged terms. (at p528)

3. However difficult it may be to find situations in which the subsection can operate, its language, in my opinion, in requiring that the policy itself be converted, is unambiguous and intractable. I agree entirely with the reasons which the Chief Justice gives for reaching his conclusion, with which I also agree. (at p528)

4. In my opinion the appeal should be dismissed. (at p528)

MENZIES J. I agree. (at p528)

WINDEYER J. I agree. (at p528)

WALSH J. I agree. (at p528)

GIBBS J. I agree. (at p528)

Orders

Appeal dismissed with costs.