462MOSELEY-J.—=de Silva & Mendis and Commissioner of Stamps.
1943Present: Moseley S.P.J. and Jayetileke J.
DE SILVA & MENDIS, Appellants, and COMMISSIONER OFSTAMPS, Respondent.
Case stated by the Commissioner of Stamps under Section 31 of theStamp Ordinance (Cap. 189).
Stamps—Conveyance by trustees under will to persons beneficially interested—
No consideration for conveyance—Statnp Ordinance (Cup. 189), s. 23 (4).
Where a last will directed the trustees to convert an estate belongingto the testator into a Company in which the children of the deceasedwere to be allotted shares and where/in pursuance of the directions aCompany was formed and the trustees transferred the property to theCompany by deed,—
Held, that the deed came within the ambit of item 23 (4) of Part I.,Schedule A of the Stamp Ordinance.f •
ASE stated by the Commissioner of Stamps under section 31 of theStamp Ordinance as amended by^Ordinance No. 47 of 1941.
H. V. Perera, K.C. (with him N. M. de Silva), for the appellants.
Walter Jayawardene, C.C., for the Commissioner of Stamps.
Cur. adv. vult.
September 2, 1943. Moseley J.—
One Adriel Henry Wijeyesekera by his last will made the followingdisposition :—v
“ 4. I direct that the said Trustees should float the estate belongingto me called Walauwawatte into a Company and that each of mychildren should get shares in the following proportion :—one portionto each of my children including a child en ventre sa mere and threeportions to my wife Pansy.
5. I further direct that my Trustee or Trustees aforesaid shouldhold the shares of each of my children iii trust until they attain theage of thirty. Provided, however, it shall be within the discretion ofthe Trustees to transfer the shares to any of the said children after theyattain majority if my Trustees consider it desirable or expedient.” .
^ In pursuance of these directions a private company was formed anddeed was drafted with the object of conveying the above-mentionedestate to the said company. The relevant portions of the draft deed areas follows : —
“ And whereas the Trustees in pursuance of the directions given tothem in and by the said Last Will and Testament on the twenty-sixth …. day of October …. One thousand ninehundred and forty-two incorporated a Private Company called.“ The Walauwawatte Estate Company, Limited ” having a sharecapital of Rupees One hundred and twenty thousand (Rs. 120,000)divided into twelve thousand ordinary shares of Rupees Ten (Rs. 10)each for the purpose, inter alia, of purchasing, taking over, taking onlease or otherwise acquiring from the Executors of Adriel Henry
MOSELEY J.—de Silva & Mendis and Commissioner of Stamps.
Wijeyesekere. deceased the said Walauwawatte Estate in order to giveeffect to directions, the wishes of the said deceased regarding therrfanagement and control thereof.
And whereas the Trustees are now desirous of transfering andconveying the said Walauwawatte Estate unto the said The Walauwa-watte Estate Company, Limited, a Company duly incorporated underthe Companies Ordinance, No. 51 of 1938, and having its registeredoffice at No. 41, Alexandra place, Colombo, aforesaid (hereinaftercalled and referred to as “ the Company ” which term shall where thecontext so requires or admits mean and include the said The Walauwa-watte Estate Company, Limited, its successors and assigns) free of allencumbrances whatsoever.”
The draft was submitted to the Commissioner of Stamps for adjudica-tion. The Commissioner held that the deed, when executed, would beliable to ad valorem duty in accordance with the scale laid down in item23 (1) (b) of Part I. of Schedule A of the Stamp Ordinance (Cap. 189).
At the request of the proctors for the trustees the Commissioner hasstated a case as provided by section 31 of the Ordinance as amended bysection 13 of Ordinance No. 47 of 1941. The view put forward by theappellants is that the document should be stamped under item 23 (4) ofthe said Schedule, on, the footing that it is a conveyance by trusteeswithout consideration to the person beneficially entitled to the propertyconveyed.
Counsel for the Commissioner conceded that, if the direction containedin the above-quoted provisions in the will can be construed as a devise,the contention of the appellants is sound. He: contended, however,that there is a direction to the trustees to sell the property to the company^in consideration of the allotment by the company of shares to the testa-tor’s, wife and children. The view advanced by Counsel for the appellantsis that there is a devise to which are attached directions for carrying intoeffect the wishes of the testator as to the manner in which the beneficiariesshall enjoy the subject-matter of the devise. It must be admitted thatthe directions are not very happily framed, e.g., the direction to “ floatthe estate into a company,” but it does not seem to me difficult to graspwhat is meant, and I prefer the construction put forward on behalf of theappellants. If the company had been formed before the making of thewill, as it might well have been, and a similar direction," mutatis mutandis,had been made,. I do not think there could be any question that there wasa devise to a company which would be the “ person beneficially entitled ”.'That the company was yet to be formed does not alter the situation.Nor is it of importance, as argued by Counsel for the: Commissioner, thatthe company is not bound to accept a transfer. The position of the,company in that respect does not differ from that of an. ordinary devisee.
Counsel for the Commissioner further relied upon the expression“ in consideration of the premises ” as implying a transfer for valuableconsideration but I do not -think the expression can be regarded as any-thing more than a reference to the recitals in the deed.- There has alsobeen imported into the draft a quite unnecessary reference to the objectsof the company which are described as being “for the purpose .inter alia
KEUNEMAN J.—Ponnudurai and Mailvaganam.
of purchasing, taking over, taking on lease or otherwise acquiring ”the estate. But, as pointed out by Mr. Perera, the material point is,not what the company may have had power to do, but what it has done.
In my view there is a clear direction to the trustees to convey ‘theestate to the company—it is not a case of the trustees having power todo so—and I am satisfied that the company is the person beneficiallyinterested, and that there is no .consideration for the conveyance.
The deed therefore comes within the ambit of item 23 (4) and is liableto a duty of Rs. 10 only.
The appeal is allowed with costs.
Jayetileke J.—I agree.
DE SILVA & MENDIS, Appellants , and COMMISSIONER OF STAMPS, Respondent