STRONG CENSURE

Evening Post, Volume CXXXIV, Issue 120, 17 November 1942, Page 3

STRONG CENSURE

DEPARTMENTAL HEAD

STAMP DUTIES

APPEALS

Strong censure of the attitude adopted by the Commissioner of Stamp Duties in two Hawke's Bay cases stated by., him under the Death Duties' Act is expressed by Mr. Justice Blair In a reserved judgment delivered today. Remarking that the Commissioner is clothed with certain judicial functions and" has high public, duties to perform, his Honour comments: "The effect of the attitude he takes in this matter is that he entirely disregards any moral or ethical cour siderations," and in a later passage of the judgment his Honour emphasises that, as with his Majesty's Law Courts, the administration of State Departments must be fair, just, impartial, and fearless. He describes as fantastic, if not to the lawyer, then at least to the layman, the Commissioner's claims in the proceedings. The appellants in the two cases stated were Charles Athol Williams, farmer, of Pukehou, and George Falkland Gardiner, accountant, of Napier, as administrators of the estate of the late Helena Keith, of PukeMou, spinster, and Messrs. William and Gardiner as appellants in their respective personal capacities. The cases concerned the will of Miss Keith, in which she' left her estate to the appellants and expressed, the hope, "but without in any way qualifying the absolute nature of the foregoing, ttiat they will carry out any wishes expressed by me in writing that may be found with this will or with my papers at the time of my death." A deed of arrangement which incorporated the effect of a memorandum signed by the testatrix about four years after the making of the will, and in which she expressed a wish that certain persons shduld be assisted ''as my executors may think fit," was subsequently made between a Mrs. Helena Howes, of Sydney, the sole next-of-kin, and the appellants' solicitors. This deed provided, among other things, that the devise and bequest to the appellants should be deemed a trust for the persons detailed in the memorandum as if those persons and • their respective shares had been so set out in the will itself. "SACRED DUTY TO DEAD." His Honour, in his judgment, says that the correspondence showed that the appellants considered 'themselves bound to respect the dying wishes of the testatrix, no matter what the legal position was, and it appeared also that Mrs. Howes, had she been the person entrusted by the deceased to carry out her last wishes, would have felt moral' ly bound to respect those wishes. "What actually did happen," says the judgment, "is that the late Miss Keith's judgment of the character of the men she trusted was sound, and instead of a legal fight based upon technicalities, the two gentlemen selected by her as worthy of 'her trust refused to look at the matter otherwise than one of a sacred duty to the dead." His Honour next deals with the effect of the Commissioner's claims and his contentions that the will contained an absolute gift to Messrs. Williams and Gardiner of the whole of her estate untrammelled by any trust, and that death and gift duties should be assessed accordingly. "From the Commissioner's point of view he disregards the fact that the persons to whom Messrs. Williams and Gardiner are making these so-called gifts are the persons whom the late Miss Keith wished to benefit," says his Honour. "He cannot pretend that he does not know that Messrs. Williams and Gardiner make no pretence of having made any gifts, AH they consider they 'have done is to dispose of property given to them in trust strictly in accordance with that trust." * "UNTHINKABLE COURSE." - "Any honest man placed in the position of Messrs. Williams and Gardiner would unquestionably, do what they have done, and I do not suppose they claim any credit for so doing because they are acting only in strict conson* ance with the ordinary honest man's natural ideas of honesty. Indeed, I venture to say that had they elected to adopt the unthinkable course of pocketing the money with which Miss Keith entrusted them, they would not have been able to hold up their heads among their fellow-men. The fact that the Commissioner of Death Duties does not. appear to hold with these sound but, unfortunately perhaps, old-fash-ioned views is to be regretted, if not for his'own sake, then at least for the honour of a great State Department." His Honour states that his concern for the reputation of a great State Department was such that before the actual hearing at Napier and having read the Commissionex-'s statement of his case, he had special inquiries made through counsel to make certain that the head of the Department was advisedly adopting the course which the papers in the case indicated he was adopting. "The reply I received was a curt message to the effect that the Department wished the case to proceed as filed," says his Honour. "Therefore, it cannot be claimed that the Commissioner of Stamp Duties has not gone into this matter with his eyes open." FEARLESS ADMINISTRATION. "Before proceeding to discuss the legal aspects of this claim it cannot be too strongly stressed that there should be no difference in principle between the conduct of his Majesty's Law Courts and the conduct of any other of his State Departments. The administration of each much be fair, just, impartial, and fearless. And when I use the word fearless I say that it is equally the duty of a Judge and the duty of the head of any State Department fearlessly to adoot the course that his own conscience tells him is right and just. No Judge would permit his Court to be sullied by pronouncing a judgment which his conscience tells him Is wrong. If I were to give a judgment which would in effect sanctify the misappropriation of trust funds, even if that trust is a moral trust only, I would be interpreting the law as encouraging dishonest men. ,- "In the eyes of any honest person the misappropriation of moneys affected with a trust is just a breach of the Commandment 'Thou, shalt not steal.' It looks to me as if it appears to the Commissioner of Stamp Duties to be of more importance that he becomes enabled to claim taxes upon what is really one transaction in four and possibly five separate and distinct ways than it is to see an honest trustee being honest to his trust, I cannot understand how the Commissioner can feel satisfied in giving a ruling which, in effect, involves the accepting of funds from the tainted pocket of a dishonest trustee. ' In my view, the Commissioner's contention necessarily postulates that the trustees should be dishonest to their trust. In effect, the Commissioner demands that they must, at least constructively mis^ appropriate a dead woman's money, and he also claims that it is the duty of the Court to gay he is justified in so doing." Later in his judgment his Honour remarks, "The Commissioner knows quite well that Messrs. Williams and Gardiner never dreamt of attempting to defeat any proper claims it (the State) might have on them or upon their estates after they come to die, The Commissioner is just seeking to take advantage of a technicality to get more tax than Miss Keith would have been called upon to pay had she given away the whale of her estate in her lifetime or given it away direct by her will to the'persons she wished to benefit. In the ultimate rest the dispositions made of Miss Keith's estate by the persons appointed to act for her were the dis^ positions made by her will, . . , It is plain to me that the Commissioner'can-, not have a shred of moral justification for the claim he makes." His Honour allows the appeal of Messrs. Williams and Gardiner as administrators of the estate, and holds that succession duty should be assessed against each person taking under the deed of arrangement. Hp also allows the second appeal in the personal , capacities and holds that no gift duty is attracted by the deed or otherwise I