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Present: Garvin and Dalton JJ.
WICKBEMESINGHE v. THE COMMISSIONER OF STAMPS.
In the Matter of an Application under Section 32 of theStamp Ordinance, No. 22 of 1909.
Stamps—‘Surrender of life interest—Deed of gift or transfer—Ordinance
No. 26 of 1909, 22 (a) and 30 (a).
Where property was bequeathed by a person to his daughtersubject to a life interest in his widow, and where the widow bydeed '* surrendered and yielded up ” all her rights in the propertywith the “ intent that her estate of life may be merged in thereversion vested in the daughter ”—
Held, that the document amounted to a conveyance of the lifeinterest in favour of the daughter and was liable to stamp dutyas a deed of gift either under item 30 (a) or as a conveyance ofproperty under item 22 (a) of the schedule to the Stamps Ordinance.
APPEAL from the decision of the Commissioner of Stamps™ as to the duty payable in respect of a certain deed bearingNo. 508 dated May 10, 1927. The deed had reference to certain
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allotments of land bequeathed by the husband of the grantor 1927.to their daughter, subject to the life interest of the grantor. The jv^kreTne-object of the deed was to pass the life interest reserved to the ainghev.grantor to her daughter. The operative part of the deed was asfollows:—44 In consideration of the natural love and affection stamps
which the said A. E. Cbears towards her daughter
…. the said F. T. Pthe said A. E. C. doth
hereby surrender and yield up unto the said F. T. P
all her rights in the aforesaid premises with the right – to possessand enjoy the rents and profits arising therefrom to the intentthat the estate of life of the said A. E. G. … in the said
premises may be merged in the reversion now vested in the saidF. T. A. . .. . and be thereby extinguished/' The
Commissioner of Stamps held that the document was a deed ofgift of property and liable to stamp duty under section 80 (a) of theschedule to the Ordinance.
H. V. Perera (with M. 0. Abeywardene), for appellant.—Thereis no conveyance of an interest, but the extinction of one. Thetransferee is the daughter of the transferor, and the last willdevises the property on the daughter with a life interest in thewidow. The deed in question cannot be considered a deed ofgift because the 44 dominium>v all along was in the transferee.
What happened was that a portion of that 44 dominium ” wascarved out and vested in the transferor, who has by this deedsurrendered it. The case might have been different if the transferee.was a third party. In this case all that has happened is anextinction of rights. There is no transfer of rights. Section 4 ofthe .Stamp Ordinance distinguishes rights as being, among others,those which create rights and those which extinguish rights. TheStamp Ordinance has recognized the difference between these twohinds of rights in making provision for the surrender of a lease.
£n effect the difference between a surrender of this nature and agift may be scarcely distinguishable. But the legal results must bedifferent.
. The Court should not in questions of stamp duty consider the/‘.effect ” of an instrument. All that should concern the Courtis the instrument itself (vide Commissioner of Inland Revenue v.
ilf. IT. H. de Silva, C.C., for respondent.—The right dealt withby the document in question is the right to enjojp the propertyduring the life of the widow. This is not a right which could 'beextinguished. The right to such enjoyment has now passed to thedaughter by virtue of this document. It is clearly a transfer ofthe life interest from the widow to the daughter.
1 S3 D. B. D. 579 at p. 589.
1987* It is immaterial whether the parties call the transaction aWickreme- surrender or a transfer. The Court has to decide the nature of the, singh* transaction on a consideration of all its terms. Tl^e surrender orCommistmrr transfer in this case is made by way of gift. It, therefore, comesof Stamps under item 30. See Alpe, page 151.
When a document falls under two items, then the Crowncan. select the item bringing the higher duty. Application ofV. Coomarabwamy.1
December 8, 1027. Garvin J.—
Thisis an appeal from thedecision of theCommissionerof
Stampsas tothestamp duty payable in respectof a certain deed
bearingNo.508 dated May10, 1927. TheCommissionerof
Stamps has held that the document is a deed of gift of propertyand that it also embodies an agreement, and in pursuance of thisdecision he has directed the applicant to pay stamp duty uponthe document as under item 30 (a) of the Stamp Ordinance in respectof thegift,andunder item4a in so far as it embodiesan
It is not denied that the document is .liable to additional stampduty in respect of the agreement embodied in it. But it has been&trongly urged that in other respects it is a deed or instrumentnot otherwise charged in the schedule and therefore chargeableunder item 28 of the Stamp Ordinance. That the documentrecites that under the last will of one F. T. Coore, late of Kandana,the allotments of lands described in the schedule to this deed werebequeathed to his daughter subject to a life interest in favour ofhis widow, Adeline Eleanor Coore. The object and purpose of thisdocument is that the life interest created in favour of AdelineEleanor Coore should be passed to her daughter. The operativepart of the deed is as follows: —
44 Now this indenture witnesseth that in pursuance of the afore-said agreement and in consideration of the above premisesand the natural love and affection which the said AdelineEleanor Coore bears towards her daughter the saidFelicia Theadora de Pinto and for diverse and variousother considerations thereto moving her, the said AdelineEleanor Coore doth hereby surrender and yield up untothe said Felicia Theadora de Pinto all her rights in theaforesaid premises, with the right to possess and enjoythe rent and profits and issuer arising therefrom to theintent that the estate of life of the 6aid Adeline EleanorCoore in the said premises may be merged in the reversionnow vested in the said Felicia Theadora de Pinto and bethereby extinguished.”
» 27 N.L. B, €2.
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The languuge used by the notary lias no doubt been carefullychosen for the purpose of supporting the contention now urged,that this is not a conveyance or transfer of the life interest ofAdeline Eleanor Coore to her daughter, but is an instrument whichoperates as an extinction or abandonment of something in thenature of a burden upon the proprietary rights of Adeline EleanorCoore.
I feel, however, that I am unable to accept the contention thatthis document does not convey the rights in the life interest whichwere undoubtedly vested in Adeline Eleanor Coore. It is clearthat moved thereto by her affection for her .daughter the motherdecided to give her daughter the rights comprised in the life interest.That, to my mind, involves a conveyance or the transfer of thoserights from the one to the other and is implied in the words** surrender and yield up unto the said Felicia Theadora de Pinto."
I think, therefore, that the document is liable to be stampedeither as a deed of gift under item 30 (a) or as a conveyance ofproperty under item 22 (a). The duty in either case is the same,and we have not been invited to reverse the ruling of the Com-missioner on the ground that it is a deed for consideration andnot a gift.
For these reasons I would dismiss this application, with costs.Dalton J.—I agree.
T Vicktewf-fnnghe r. Th**CoMMi*8»Qnrrof
WICKREMASINGHE v. THE COMMISSIONER OF STAMPS