Scottish Court of Session Decisions

The Stamp Act 1891 (54 and 55 Vict. cap. 39), First Schedule, imposes, inter alia, the following stamp duties;—

“ Conveyance or Transfer of any kind not hereinbefore described. £0 10 0

And see section 62.

Deed of any kind whatsoever not described in this schedule. £0 10 0

Settlement.—Any instrument, whether voluntary or upon any good or valuable consideration, other than a bona fide pecuniary consideration, whereby any definite and certain principal sum of money whether charged or chargeable on lands or other hereditaments or heritable subjects, or not, or to be laid out in the purchase of lands or other hereditaments or heritable subjects or not), or any definite and certain amount of stock, or any security, is settled or agreed to be settled in any manner whatsoever:—

For every £100, and also for any fractional part of £100, of the amount or value of the property settled or agreed to be settled £0 5 0

“And see sections 104, 105, and 106.”

Section 62 enacts—“Every instrument, and every decree or order of any court or of any commissioners, whereby any property on any occasion, except a sale or mortgage, is transferred to or vested in any person, is to be charged with duty as a conveyance or transfer of property: Provided that a conveyance or transfer made for effectuating the appointment of a new trustee is not to be charged with any higher duty than ten shillings.”

James John Oliver, solicitor, Hawick, and Thomas Henry Armstrong, solicitor, Hawick, assumed trustees acting under a deed of trust, dated 30th May and 1st and 2nd June 1908, granted by the deceased David Turnbull, sometime of Fenwick and Rodono, being dissatisfied with a determination of the Commissioners of the Inland Revenue finding the said trust deed chargeable with stamp as a settlement took an appeal by way of stated case.

The material facts stated in the case were:—By contract of marriage, dated 15th June, and registered 4th August, both in the year 1875, between David Turnbull and his father William Turnbull on the one part, and Christian Oliver on the other part, David Turnbull and his father, in contemplation of the marriage of the said David Turnbull and Christian Oliver, bound themselves, conjunctly and severally, and their heirs, executors, and representatives, inter alia, to content and pay to the said Christian Oliver, in case she should survive the said David Turnbull, a free yearly life-rent annuity of £400, and in security of the same they bound themselves and their respective heirs and successors to infeft and seize the said Christian Oliver in certain lands. It was also provided that if any of the lands which formed the security of the annuity and other obligations should be sold in order to pay off a bond of £75,000 with which they were already burdened, or other charges postponed to the said annuity and obligations, the annuity and obligations should be restricted to the remainder of the said lands. This deed was adjudicated as duly stamped. By deed, dated 26th May 1897, and registered in the Divisions of the General Register of Sasines for Roxburgh and Selkirk for publication, and also in the Books of Council and Session for preservation, on 5th June 1897, the said David Turnbull assigned and disponed the lands which formed the security of the annuity and other obligations provided for by the above marriage-contract, and also certain policies of assurance, to trustees for the purpose,

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inter alia, of selling the trust estate in whole or in part, of applying the free proceeds in payment, of certain burdens secured thereon, and of reconveying the residue thereof to the disponer. Part of the lands forming a portion of the trust estate was sold, and the said David Turnbull requested Mrs Christian Oliver or Turnbull to release the lands sold from the security for the annuity constituted by the said marriage-contract. This she agreed to do on the condition of proper security being given for the said annuity; and she with her husband's consent, and with the consent of the remaining trustees under the marriage-contract, on the narrative that her husband was about to grant a trust deed, and that the said annuity would be thereby sufficiently secured, granted a discharge declaring the lands sold to be disburdened of the said annuity, reserving the personal obligation for payment of the said annuity. Thereafter David Turnbull granted the trust deed. By it, on the narrative of his obligation under his marriage-contract to secure the annuity of £400 to his wife, and of her having granted a discharge disburdening the lands sold from the security for the annuity in return for the security to be granted by this deed, he conveyed to trustees (1) certain lands other than the lands sold, (2) four policies of insurance upon his own life for sums amounting in cumulo to £4950, with bonus additions, and (3) the balance of the price of the original security lands to the extent of £2582, being the sum that would be necessary to enable the trustees, if they saw fit, to have the four policies converted into fully paid-up policies, for, inter alia, the following purposes—“( Second) At the discretion of the said trustees under these presents—( primo) for payment to the said North British and Mercantile Insurance Company and Royal Insurance Company respectively of said sum of Two thousand five hundred and eighty-two pounds, or of such smaller sum as may at any future time be necessary for the conversion into fully paid-up policies, payable on the death of me, the said David Turnbull, of the four policies of assurance hereinbefore assigned; or ( secundo) for the investment of said sum of Two thousand five hundred and eighty-two pounds and the application of the income arising therefrom and of so much of the capital thereof as may be required to supplement said income in payment of the premiums necessary for keeping the said policies in force: ( Third) For payment of the remainder of the income from the trust estate to me the said David Turnbull during all the days of my life: ( Fourth) From and after the death of me, the said David Turnbull, for payment out of the free income of the trust-estate or out of the capital thereof, if the income be insufficient, to the said Mrs Christian Oliver or Turnbull, if and so long as she shall survive me, of the foresaid free yearly liferent annuity of four hundred pounds provided to her by the said contract of marriage; and ( Fifth) Subject to the foregoing purposes of trust the said trust estate shall be held by the trustees under these presents for behoof of me, the said David Turnbull, my heirs, executors, and assignees whomsoever.”

The adjudication of this trust deed was the subject-matter of the case.

The trust deed had been presented to the Commissioners of Inland Revenue, who had been required to express their opinion as to the stamp duty with which it was chargeable. The Commissioners were of opinion that the instrument was chargeable (1) under the heading Settlement in the Schedule to the Stamp Act 1891, to the settlement duty of £20, 5s on the sum of £8022, 5s.; the sum of £8022, 5s. was made up as follows:—Four policies of insurance for sums amounting in cumulo to £4950, bonus additions to policies to date of instrument £490, 8s., and the residue of the prices of the lands of Rashie—grain and others to the extent of £2582; and (2) to the duty of 10s. in respect of the conveyance of the heritable property to the trustees. They accordingly assessed upon the instrument the ad valorem settlement duty of £20, 5s. and the fixed conveyance duty of 10s., together £20, 15s., and the instrument being already stamped with the duty of 10s. they required payment of the sum of £20s. 5s. and of the penalty of £10, and also of £9, 18s. 1d. of interest on the duty by way of further penalty, as provided by the Stamp Act 1891, section 15. Whereupon the said Messrs Geo. & Jas. Oliver paid to the cashier of stamp duties at Edinburgh the said sums of £20, 5s. and £19, 18s. 1d. for stamp duty and penalties, and the instrument was thereupon stamped with the stamps denoting the said duty and penalties assessed as aforesaid, and also with the particular stamp provided by the said Commissioners to denote and signify that the full amount of stamp duty with which the instrument was by law chargeable had been paid. But the said James John Oliver and Thomas Henry Armstrong declared themselves dissatisfied with the assessment of the said Commissioners on, inter alia, the following ground—“(1) The instrument in their view is not a settlement.…”

The question of law for the opinion of the Court was—“Whether the said instrument, in the circumstances above set forth, is liable to be assessed and charged with the said ad valorem settlement stamp duty of £20, 5s., and conveyance duty of 10s., together £20, 15s., or if not liable to be assessed and charged with both or either of these duties, with what other duty is it liable to be assessed and charged? ”

Argued for the appellants—The instrument in question was not a settlement in any ordinary sense of the word, and no particular definition was assigned to the word “settlement” in the Act. No new obligation was undertaken by this deed. The deed only substituted for the old security a new security for the performance of the original obligation.

Argued for the respondents—This deed was a settlement, and chargeable with settlement duty in respect of the universal

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words of the schedule “settled in any manner whatsoever.” Here there was a conveyance to trustees of policies not included in the marriage settlement for the purpose of paying the income to the grantor after satisfying the annuity. This constituted a new security for the widow's annuity, and in so doing subjected to fetters as trust property that which had before been unburdened. This was sufficient to make the deed a settlement. (Viscount Messareene v. Commissioners of Inland Revenue, [1900] 2 I.R. 138, was referred to.)