my 5. Under the will of the said Robert McCracken the testatrix had a life interest in one-third of his estate, and a general power of appointment by will over one-third of the said estate, the words of the trust being :-"I direct that my trustees shall pay to or permit wife to receive from my death one-third of the net annual income actually produced from my real and personal estate howsoever constituted or invested and including the profits of any trade or business if carried on pursuant to the direction herein before contained. And from and after the decease of my said wife if she shall continue my widow but not otherwise I direct my trustees to stand and be possessed of one-third part or share of my said trust estate and the investments thereof. In trust for such person or persons for such estate or estates interest or interests and in such shares and manner as my said wife shall by will appoint and in default of any such appointment etc." 6. The testatrix remained the widow of the said Robert McCracken, and by her said will, in addition to disposing of her own property, exercised the said power of appointment, the words used being "I devise and bequeath and in exercise of the power of appointment vested in or given to me by the will of my late husband Robert McCracken and of any and every other power of appointment vested in me by any means whatsoever appoint all the rest and residue of my personal estate whatsoever and wheresoever situate of which I shall be seized possessed or entitled at the time of my decease or over which I shall at my decease have any power of appointment by will unto my said son Alexander McCracken upon trust etc. etc." 7. The testatrix left real and personal estate of the value of 76,1831. 12s. 6d., and the property over which the said power of appointment was exercised is of the value of 113,449 78. The question for the opinion of the Court is : Is the estate of the said Margaret McCracken deceased liable for any duty under the Administration and Probate Acts in respect of the property appointed under the said general power of appointment contained in the will of Robert McCracken deceased. THOS. PROUT WEBB, Master in Equity. F.C. 1906 In re THE WILL AND F.C 1906 Isaacs, K.C., and Weigall for the Crown-Probate duty is payable under sec. 13 of the Act No. 1815, if the power of appointment be a general power to dispose of the property by will or if it be a THE WILL AND general power to dispose of it by deed. The section applies to every sort of power, whether by will or by deed, or by either will In re CODICIL OF MCCRACKEN. or deed, provided only that it is a general power which is to be exercised by will or by deed. [HODGES, J. If the word "by" were repeated, your position would be much stronger.] It is entirely a strained construction to read in some such words as "at his option " or " as he may think fit" after the words "by will or deed." It was decided by the Full Court in In re Wilson (b) that where there was a power of appointment by will or deed the property was dutiable. This point has been practically determined by the Privy Council in Commissioner of Stamp Duties v. Stephen (c) where the words of the Act to be construed were practically the same as the words here, and where a decision of the New South Wales Full Court that the property in question was not dutiable was upheld solely on the ground that the testatrix only had the power to dispose of it amongst a particular class; and it is made clear by the judgment that, had the power been a general power, as in this case, the decision would have been otherwise. [HODGES, J. The words "as the case may be" in the section in question there are very significant, and if they were in the section here its meaning might be very different.] to The general power is the important thing-the particular form of disposal is quite immaterial, if the deceased had the power dispose of the property to anybody he chose. It has been long recognized that a mere power of disposition by will is a general power, and is to be regarded as property: Platt v. Routh (d); Drake v. Attorney-General (e). Cf. also Re Patterson (f) and the cases there cited, and In re Brodie (g). [A'BECKETT, J. How do these cases help in construing the words of the section?] (b) [1903] 24 A.L.T. 168. (c) [1904] A.C. 137. (d) [1840] 6 M. & W. 756, at p. 789, affirmed in the House of Lords sub nom. Drake v. Att.-Gen. (e) [1843] 10 Cl. & F. 257. (f) [1886] 11 V.L.R. 768. (g) [1900] 26 V.L.R. 562. They show the history of the matter to be that at first only a man's own property was subject to duty, but that gradually the class of property was extended until eventually it has come to this -that if a man has property which he may dispose of by will or by deed at the moment of his death it is to be deemed to be his property for the purpose of probate duty, and that, too, quite independently of whether the power has been exercised or not. These cases show that the construction the Crown is contending for is not at all unreasonable. If the construction contended for by the taxpayer be correct, it would be easy to evade the object of the Legislature. [A'BECKETT, J. What is the object of the Legislature? That depends upon the true construction of the section.] The words in parenthesis show clearly that the section cannot refer to a general power of disposition by will or deed, because such a power would be inconceivable in the case of a trustee. The question is, What power has he ?-not whether he has a document in his possession enabling him to do so and so? The testatrix here had the power to dispose of this property by will, and that being so, this property clearly comes within the section. Counsel also referred to Prideaux on Conveyancing (5th ed.), vol. ii., p. 394; Hanson's Death Duties (4th ed.), p. 96; and the English Finance Act 1894. Mitchell, K.C. (with him Guest), for the taxpayer-On the true grammatical construction of the section this property clearly does not come within it; and the taxpayer also relies very strongly on the principle that a tax must be imposed in clear and unambiguous language, and that if there be any doubt in the matter the Crown must fail. The section clearly points to one power, although that power may be exercised in one of two ways. It has been held that a power of appointment by deed or will is a "single power: " Cf. Evans v. Saunders (h) and the same case reported as Evans v. Evans (i). In In re Patterson (k) Molesworth, J., decided that the Duties on the Estates of Deceased Persons Statute 1870 did not apply F.C. 1906 In re THE WILL AND F.C. 1906 In re to a person who had a general power of appointment by will, and the Legislature did not legislate after that decision. [A'BECKETT, J. We do not think that any assistance is to be THE WILL AND obtained from these cases in construing the section.] CODICIL OF MCCRACKEN. The object of citing these cases is to show that the law has been altered by this section. In re Wilson (1) was expressly decided on the ground that the power had been exercised. Moreover, that case clearly overlooked the principle laid down by the Privy Council that probate duty is only payable where probate is necessary in order that the personal representative of the deceased may deal with the property in question. If the English section be the foundation of sec. 13, then there are important changes of language in sec. 13, which make the plain meaning of the English section (to put the worst case for the taxpayer) ambiguous. Moreover, the English Acts only impose the tax where the power is exercised. Isaacs, K.C., in reply-The stock phrase used in speaking of an optional power is "deed or will" not "will or deed." The case of Attorney-General v. Brackenbury (m) decided that a power to dispose of property by will as the donee should think fit is a general power. He also referred to Archibald v. Wright (n). A'BECKETT, J. This is a question as to the payment of duty upon property, and it arises in this way-whether the estate of the testatrix is liable for duty in respect of property appointed under a general power of appointment given by the will of Robert McCracken, deceased. The contention that the property is liable rests entirely upon the proper construction to be placed upon sec. 13 of the Act No. 1815 (Administration and Probate Act 1903), which contains specific reference to the effect upon property of giving a general power of disposition over that property to a particular person, and making it with reference to probate duty that person's property. The contention on behalf of the Crown, which must prevail in order to make probate duty chargeable on the property here, is that where a person has a general power enabling him to appoint by will only, that is within the section. (1) 24 A.L.T. 168. (m) [1863] 1 H. & C. 782. (n) [1838] 9 Sim. 161, F.C. 1906 In re CODICIL OF MCCRACKEN. The section uses certain expressions, some of which occasion no difficulty. It speaks first of a "general power." We all understand that to be "general" with reference to its objects— in other words, that it is not a power in favour of particular THE WILL AND individuals or a particular class of individuals. The section says:"All property of any kind whatsoever over which a deceased A'Beckett, J. person had at the time of his death a general power enabling him by will or deed to dispose thereof." Now, what seems to us to be the natural meaning of those words is that the power enables him to do either the one or the other as he chooses; and admittedly this power does not do that. The Court has to say whether the words used describe three kinds of powers-a power to dispose by will, a power to dispose by deed, and a power to dispose either by will or deed; or only one power--a power to dispose either by deed or will. We think that only the one last-named power is described by these words. In approaching this section we think that we ought to recognize what is a perfectly well-known fact to lawyersthat there are powers of appointment which are in ordinary use conferring powers to dispose by one or other of those modes, as well as powers which give a limited mode of disposition-some by deed, some by will. Which class of power should the Legislature be deemed to be speaking of? It uses language undoubtedly apt to describe one of those familiar things. The only peculiarity is that there is a sort of inversion with reference to the conveyancing mode of putting them-the power to appoint by will is put before the power to appoint by deed. But if a careful draftsman had intended to describe a power to appoint by will, a power to appoint by deed, and a power to appoint either by deed or will, he would not have used the elliptical mode of expressing all three in one, for which the Crown contends. It seems to me scarcely necessary to have recourse to the principle that an Act imposing a tax, if ambiguous, should not be interpreted against the taxpayer-that the ambiguity would make it fail to impose the tax. That principle is, of course, fully recognized, and the section cannot, on behalf of the Crown, be asserted to be anything but ambiguous. Then, in furtherance of the view that we should spell out from this section the intention to describe three powers, reference is made to an exception which it is said would be scarcely conceiv |