THE ATTORNEY-GENERAL, Appellant, and O. M. DE LIVERA, Respondent

094-NLR-NLR-V-70-THE-ATTORNEY-GENERAL-Appellant-and-O.-M.-DE-LIVERA-Respondent.pdf


440TAMB1AH, J.—Attorney-General v. De Livera
1967Present : Tambiah, J., and Alles, J.
THE ATTORNEY-GENERAL, Appellant, and O. M.
DE LIVERA, Respondent
S.C. 559165—D. C. Colombo, 95 jT
Estate Duly Ordinance (Cap. 2il)—Proviso 3 of s. 6 (d)—“ Gift made in considerationof marriage ”—Requisites necessary for such gift.
A father donated to his daughter, seven years after her marriage, certainimmovable property. He purported to make the gift in pursuance of an earlieroral “agreement”, prior to the time of the marriage, to convey the premisesto the daughter at her marriage by way of dowry.
Held, that the gift was not a “ gift made in consideration of marriage ” withinthe meaning of that expression in proviso (iii) of section 6 (d) of the EstateDuty Ordinance. A requisite necessary for the gift contemplated in thatproviso is that it must be made on the occasion of the marriage and contingenton the marriage taking place.
.A.PPEAL from a judgment of the District Court, Colombo.
P.Naguleswaran, Crown Counsel, for the appellant.
H. W. Jayewardene, Q.C., with S. Ambalavanar, Sinha Basnayakeand B. Eliyatamby, for the respondent.
Cur. adv. vult.
November 27, 1967. Tambiah, J.—
The matter raised in this appeal is an important one and involves theconstruction of proviso 3 of section 6 of the Estate Duty Ordinance(Cap. 241). The short point for decision is whether the gift of propertyNo. 7, Police Park Avenue, Colombo, described more fully in theschedule to the plaint filed in this case, which was donated on deedPI to the respondent, is a transaction which falls under the proviso tosection 6 (d) of the Estate Duty Ordinance (Cap. 241).
The respondent married on 23.3.1950. It appears from the evidencethat it was not one of the traditional marriages arranged by parentsbut was a love match. Although the respondent’s father Mr. Amerasekeradid not consent to this union, later he gave his blessings. Before thewedding there was a conference between the respondent’s parents,relatives and others at which the father consented to give this propertyto her. The respondent stated in the course of her evidence that herfather consented to give this property saying that he was giving this inconsideration of marriage. The Prevention of Frauds and PerjuriesOrdinance (Cap. 70) specifically enacts that no promise or agreement
TAMBIAH, J.—Attorney-(general v. De Livera
441
to transfer an immovable property is valid unless it is notarially executed.In view of this stringent provision of the Prevention of Frauds andPerjuries Ordinance, how far the oral evidence of the respondent isadmissible has not been investigated. Be that as it may, her evidencewas admitted.
The respondent stated that in pursuance of this agreement, her fatherexecuted the deed PI of 2.8.57 in which he has stated as follows :—
“And Whereas I agreed with my daughter Evangilane Maud OlgaAmerasekera to convey to her at her marriage the said premises byway of dowry.”
“ Now Know Ye and These Presents witness that I the said SamuelRobert Amerasekera (hereinafter referred to as the “ said donor ”)in pursuance of the said agreement and in consideration of the loveand affection which I have and bear unto my daughter the saidEvangilane Maud Olga de Livera nee Amerasekera of No. 7, PolicePark Avenue, Havelock Town, Bambalapitiya in Colombo (hereinafterreferred to as the “ said Donee ”) and for diverse other good causes andconsiderations me hereunto specially moving do hereby grant conveyassign and transfer by way of dowry unto the said Donee, her heirs,executors, administrators and assigns as a gift irrevocable the saidpremises all that allotment of land together with the buildings thereonbearing Assessment No. 7, Police Park Avenue, Havelock Town,Colombo, and fully described in the Schedule A hereto.”
The respondent also added in the course of her evidence that herfather had unequivocally stated that he had given this property as dowryto her and her husband. Mr. Amerasekera had rented out this house tothe Caltex Company and had written two letters P2 and P3 of 1954requesting the company to give possession of the property for the reasonthat he had given this property as dowry to his daughter. In one of theletters he states that his daughter is pressing him to give her the possessionof the property. Caltex Company vacated the property and in September1954 the respondent and her husband went into occupation and havebeen living there ever since.
Mr. Amerasekera also left a last will dated 13.4.55, marked Rl, in whichhe has devised the same property to the respondent and in paragraph 10of Rl he has specifically stated that the estate duty payable on thisproperty should be paid by the respondent. The respondent admittedhaving seen and read Rl. Rl should have been properly proved by theproduction of the probate but of consent it was admitted.
The learned Crown Counsel who appeared for the appellant urgedthat the deed PI was not given in consideration of marriage since on thedate it was given it was not given either to promote the marriage or toinduce it.
442
TAMBIAH, J.—Attorney-General v. De Livera
It must be noted that whatever intention Mr. Amerasekera might havehad before the marriage of the respondent, he waited for nearly sevenyears, during the course of which he changed his mind by the execution ofthe will Rl, and bequeathed the property by way of testamentary dispo-sition. Even in the deed of transfer PI he has stated that it was transferrednot only in consideration of marriage but for the love and affection hehad towards his daughter. The learned Crown Counsel submitted thatexactly similar words are found in the English Finance (1909-10) Act[10 Edwards 7, chapter 8, section 59 (2)] as in the proviso to Section 69of the Estate Duty Ordinance and wherever the words of our statutesare similar to the statutes in England, our Courts should be guided by thedecisions of some of the highest tribunals of the United Kingdom. Hecontended that the corresponding section of the English statute isidentical with proviso 3 to section 6 of the Estate Duty Ordinance and hasexactly the same words, namely—“ Nothing herein contained shall applyto gifts made in consideration of marriage ”.
It has been held by the highest authority that where words in ourstatutes are identical with English statutes, the construction placed by theEnglish courts should be adopted by us (vide Meideen v. Banda 1, followingTrimble v. Hill 2). Although this rule was laid down during the colonialregime, yet there is no reason for us to depart from this rule (videMeideen v. Banda (supra) ; Nadarajan Chettiar v. Tennekoon 3).
In Inland Revenue Commissioners v. Lord Rennell et al. 4, the learnedLaw Lords who decided it adopted the three tests which were suggestedby Counsel in the course of the argument in order to determine whethera transfer is a gift in consideration of marriage within the meaning ofthe similar provision in the English Finance Act (1909-1910). Thethree tests suggested were : It should be made on the occasion of themarriage ; secondly, it must be conditional to take effect only if themarriage takes place ; and thirdly, it must be made by a person with thepurpose of or with a view to encouraging or facilitating the marriage.
In Inland Revenue Commissioners v. Lord Rennel et al. (supra) thequestion that came up for decision was whether a gift provided bysettlement made on the occasion of marriage is a gift made in considerationof marriage within section 59 (2) of the Finance Act (1909 to 1910),notwithstanding that the beneficiaries under the settlement were notconfined to persons who in law were within the marriage consideration.The majority view was that despite the fact that the settlement was notconfined to persons, who in law were within the marriage consideration,yet, if the gift was made in consideration of marriage to a daughter,although others might have been benefited by it, yet it came within thepurview of that section.
3{1950) 51 N. L. R. 491.
{1963) 1 A. E. R. 303 at 817.
1 {1895) 1 N. L. R. 51.* 5 L. R. A. C. 342.
4
TAMBIAH, J.—Attorney-(General v. De lAvera
443
Although on this point there has been difference of opinion, all thejudges who took part in the case have adopted the three tests suggestedearlier. Viscount Radcliffe in the course of his speech said ((1963) 1A. E. R. at p. 807) :
“ What then is the meaning of the phrase * gift which is made inconsideration of marriage ’ as used in the Finance (1909-10) Act, 1910 ?First, the word * gift ’ can hardly have been used in the sense usuallyattributed to it in ordinary speech, for in that sense it would signifyno more than a present made without return of any kind. Yet itwas determined by several decisions, previous to 1910, that therecould be a gift for the purposes of account or estate duty and propertytaxed as such, even though the transfer of it had been made on theterms of some substantial benefit, even a monetary benefit, accruing inreturn to the transferor.”
He continued (at page 808) :
“First then, there is ‘ Consideration ’ as a necessary element of theEnglish contract, consideration as the thing done or forebome orpromise given by the promisee in return for the undertaking of thepromisor. Consideration in this sense belongs to the law of contract :a gift, which is a transfer, belongs to the law of property, and thecontract sense of consideration is inappropriate to the context in whichthe word here appears. Of course, marriage, the act of marrying, ofentering into the married state, can be consideration for an enforceablepromise.”
He added (at page 809) :
“In my opinion, one must turn from consideration in relation topromises to consideration as that word has been understood by equitylawyers and conveyancers in relation to transfers or proposed transfersof property. It was they who analysed and developed the ideas of“valuable”, “good” and “meritorious” consideration ; and at any rateby the sixteenth century it had become a matter of the first importanceto equity to determine what consideration was to be sufficient to raise ause or, to put it in another way, what circumstances were to be regardedas sufficient to prevent a transferee of property, ostensibly unfettered,from holding it free from obligation to the transferor or third parties.Consideration in this sense is said by Sir William Holdsworth (see hisHistory of English Law, Vol. 8, pp. 42 et seq.) to have been a causarecognised by civil lawyers. I should hesitate to try to offer anydefinition of what is meant by “causa” but it was certainly not the quidpro quo idea that was developed into our conception of contractualconsideration. It was rather a set of circumstances, sometimes theessential nature of the transaction, which was categorised by theequity law as justifying its intention and the employment of itsprocedures of enforcement.”
444
TAMBIAH, J.—j&torney-General v. De Livcra
“My understanding of the matter is, therefore, that a gift made inconsideration of marriage is a transfer made on the occasion of marriage,contingently on the marriage taking place, and containing suchlimitations, if made by way of settlement, as amount to the customaryprovision for the spouses and the issues of the marriage.”
Lord Cohen said (at page 813) :
“ In the result I am content to accept counsel for the respondents’three requisites for a gift to be made in consideration of marriagewithin the meaning of the subsection, (1) it must be made on the occasionof the marriage ; (2) it must be conditioned only to take effect on themarriage taking place ; (3) it must be made by a person for the purposeof or with a view to encouraging or facilitating the marriage.”
Lord Guest was of the same view (vide 1963 1 A.E.R. at 817).
Applying any of these tests, the gift which is evidenced by PI is not agift in consideration of marriage. In the first place it was not made onthe occasion of the marriage since the marriage took place seven yearsearlier. Secondly, it was not conditioned only to take effect on marriagebecause, as stated earlier, the evidence disclosed that it was a love matchand this property was not given as a condition for the marriage to takeplace. Thirdly, the evidence shows that it was not made for the purposeof or with a view to encouraging or facilitating the marriage. Indeed itwas made many years later. Even if there was an earlier promise, it isunenforceable since it was not a notarially executed document. Theevidence shows that Mr. Amerasekera had changed his mind as would befound from the contents of the will Rl, and his intention in executing Piwas to give it as a gift.
Mr. Jayewardene w ho appeared for the respondent relied on the case ofKandappa v. Charles Appu1 and also the case of Murugesuv. Subramaniam 2.Dealing with the different species of property known to Kandyan lawand Thesawalamai, different considerations arise. The case of Kandappav. Charles Appu (supra) merely decided that under the Kandyan law adowTy could be given before or at the time of marriage or even aftermarriage, if it was in pursuance of a promise made before marriage.
In the case of Murugesu v. Subramaniam (supra) I have held that adowry could be given before marriage. But these considerations have noapplication in construing the relevant provisions of the Estate DutyOrdinance. It may well be that a deed may be executed as a dowTy bothunder the Kandyan Law and the Thesa walamai, but yet it may notcome under section 6 of the Estate Duty Ordinance to escape the paymentof the Estate Duty. Further the parties to this action are not governed
by the Kandyan Law'.
1 (1926) 27 IV. L. R. 436.
2 (1967) 69 N. L. R. 532.
ALLES, J.—Attorney-General v. De Livera
445
Mr. Jayewardene ventured to submit that a deed of gift executed evenmany years after marriage comes within the ambit of the proviso tosection 6 of the Estate Duty Ordinance, if it was the intention of thedonor to implement a promise to give a dowry before marriage. If hiscontention is accepted it will open the door to the perpetration ofcolossal frauds against the Crown. Every parent can escape thepayment of estate duty by disguising a simple gift by stating in thedeed that it was given in consideration of marriage. This was not theintention of the Legislature in enacting the proviso to section 6 of theEstate Duty Ordinance.
For these reasons we set aside the order of the learned District Judgeand hold that the gift which is the subject matter of the deed PI does notfall under proviso 3 of section 6 of the Estate Duty Ordinance and istherefore liable to payment of death duty.
The appellant is entitled to costs in both courts.
Aixes, J.—
I agree that this appeal should be allowed. On the facts disclosed at thetrial, it was not possible for the trial Judge to have held that a dispositionof property made seven years after the marriage was a gift made inconsideration of marriage. The trial Judge appears to have beeninfluenced by some oral statements made by the deceased at the time ofthe marriage in 1950—statements which are clearly inadmissible in law—which he has utilised as evidence of the donor’s intention to devise theproperty to his daughter as dowry, and which intention according to him,was implemented at the time of the execution of the deed PI in 1957.
According to Lord Cohen and Lord Guest in Rennell v. Inland RevenueCommissioners 1, the three requisites necessary for a gift to be made inconsideration of marriage are :
It must be made on the occasion of the marriage ;
It must be conditioned to take effect only on the marriage takingplace ; and
It must be made by a person for the purpose of or with a view toencouraging or facilitating the marriage.
The third requisite suggests that the settlor’s intention at the timeof the devise is a matter that is relevant in deciding whether the giftwas made in consideration of marriage or not. Viscount Radcliffehowever seemed to take the view that the settlor’s intention was notmaterial to this issue. Said Viscount Radcliffe at p. 752 :
“ I do not myself think that the question whether this divesting of
assets was a gift made in consideration of marriage depends upon
what was contemplated or intended by the settlor at the time of the divesting1 (1967) 2 L. R. 745 at 761 and 767.
446
ALLES, J.—Attorney-General v. De Livera
To try each case by a post-obit inquiry into the supposed
contemplations or intentions of the deceased is to apply a criterionthat is at once improbable and unsatisfactory.”
Again in the concluding portion of his judgment, he says :
“ There is no more reason why the description (gifts made in consider-ation of marriage) should be said to include the idea that the gift mustbe made * for the purpose of or with a view to encouraging or facilitating
the marriage *than that it should include the idea that the
gift should unequivocally secure provision for the spouses and theirissue.”
The difference of opinion between Viscount Radcliffe and the majorityof the Law Lords was on the issue whether the particular marriage settle-ment in Rennell’s case was a gift made in consideration of marriage.Viscount Radcliffe was of the view that it was not, because it purportedto benefit not only the spouses and their issue but also to secure provisionfor an unascertained class of beneficiaries. He however made it clearthat “ a gift made in consideration of marriage is a transfer made on theoccasion of marriage, contingently on the marriage taking 'place, andcontaining such limitations, if made by way of settlement, as amountto the customary provision of the spouses and the issue of the marriage.”According to Viscount Radcliffe, the declared intentions of the settlormade at the time of the divesting had no relevance to the constructionof the words “ gifts made in consideration of marriage ”.
It would appear that in his view the conditions that must be satisfiedto maintain that the gift was made in consideration of marriage are asfollows :—
There must be a “ gift ” to which he gave the unusual meaning“ abstraction of assets ” from the estate ;
The gift must be made on the occasion of the marriage andcontingent on the marriage taking place ; and
The gift must be limited to the spouses and their issue only andnot to include unascertained beneficiaries within the marriagesettlement.
I would, with respect, prefer to adopt the tests laid down by ViscountRadcliffe to that which found favour with Lord Cohen and Lord Guestwho were two of the members of the Court who were in the majority inRenneU’s case. Applying these tests to the facts of the instant case,the transfer of property made in 1957 was not made on the occasion ofthe marriage or contingent on the marriage that had already taken placein 1950. I agree with the order proposed by my brother Tambiah, J.
Appeal allowed.