SUPREME COURT OF VICTORIA

STOCKS v COMMISSIONER OF PROBATE DUTIES

GOWANS, Menhennitt and Dunn JJ

4, 5, 6, 18 August 1975 -

Gowans, Menhennitt and Dunn JJ This is an appeal from an order of Murray J allowing an appeal against the disallowance of an objection against an assessment of probate duty in respect of a deceased estate.

The facts giving rise to the assessment were these. The deceased William Henry Stocks ran a dairyfarm and bred and raised cattle at Wonga Park near Melbourne. In 1952 he suffered some form of heart attack and thereafter was subject to an irregular heart functioning although he continued to lead an active and energetic life, relatively unaffected by his condition. On 26 July 1968, however, he suffered a partial loss of vision for five minutes, which was diagnosed as a temporary occlusion of a blood vessel in the brain by a blood clot. He was then nearly 72 years of age.

On 5 August 1968, two forms of proposal for assurance concerning the life of the deceased directed to Underwriting and Insurance Ltd of Melbourne were brought into existence. The deceased appended his signature to each form as the person whose life was to be assured underneath a declaration of intention to effect a policy of assurance. They were not signed by him as proponent. One form related to an assurance on the deceased's life for a sum of $63,973 with participation in profits, the premium being specified as $6904 payable yearly. The other form related to the payment of a life annuity of $6904 payable yearly in advance without participation in profits, the premium being specified as a single sum of $60,000.

There is no evidence as to which form was prior in point of time. When the forms were processed in the office of the insurance company the form relating to the death sum assured was marked (inter alia) - "Table 110"; "special clauses-s 94-Elizabeth Rosina Lithgow/daughter/ben/trust.", and also "Recommendations - in conjunction with immediate annuity". The other form relating to the annuity was marked - "in conjunction with Table 110".

In fact the policy for the annuity (No 12042) was issued first by the insurance company on 16 August 1968, the commencing date being shown as 15 August 1968, and the annuity of $6904 being payable for the life of the deceased annually on the anniversary of that date. The deceased was shown as the annuitant and the policy owner. The premium was stated to be a single premium of $60,000.

The policy for the death sum assured (No 12041) was issued on 22 August 1968, the commencing date of the risk being shown as 15 August 1968, and the premium of $6904 being payable yearly on the anniversary of that death. The deceased was shown as the proposer and the life assured. The policy bore an endorsement as follows: "Notwithstanding anything to the contrary in the within written policy, it is hereby declared and understood that this policy has been effected for the benefit of Elizabeth Rosina Lithgow daughter of the life assured, in accordance with the provisions of s 94(1) of the Life Insurance Act 1945-1965 (Com) and Elizabeth Rosina Lithgow daughter of the life assured has been appointed to be the trustee of the moneys payable under this policy.

Dated at Melbourne 22 August 1968

L V Tonkin

General Manager".

The deceased entered into these transactions as a means of benefiting his daughter on his death but without thinking that his death was imminent. The amount of the annuity to be paid in return for the single premium of $60,000 was calculated on the basis that the deceased would live for the period of the normal life expectancy under the current life tables unaffected by his actual state of health, and the premium payable under the policy was that appropriate to produce the death sum assured of $63,973 on the basis of the same normal expectation of life and the premium not being loaded for any particular condition of health. The deceased's actual expectancy of life was about three years.

Records in the books of the insurance company showed a payment of $60,000 by the deceased on 15 August and an entry on that date relating to the deceased of a debit of $6904 as an annuity and a credit of $6904 as a premium deposit. It was the intention of the deceased and the company that this procedure by which the periodical annuity payment would be applied by the company in satisfaction of the annual premium under the life policy would be followed thereafter. Although the deceased suffered a nose bleeding on 26 August which put him in hospital for two days, that was a temporary condition with no association with any permanent condition. But on 17 September he suffered a coronary occlusion associated with his heart condition. He died on that date.

The executors filed a Duty statement in which they included the sum of $6904 being the amount of the first and only premium paid on the life policy by the deceased.

The Commissioner issued an assessment based on the inclusion in the final balance of the whole of the amount of $63,973 payable under the life policy, as being a gift to the daughter within s 7(1)(d)(i) of the Probate Duty Act 1962, credit being given for the amount of the premium included in the return.

The executors lodged an objection to the increase in the final balance, and on its being disallowed appealed to the court. The appeal was heard by Murray J and the final balance reduced by the amount of the increase. The Commissioner of Probate Duties now appeals to this Court.

Before turning to the various contentions of the parties it is necessary to note the terms of s 94 of the Life Insurance Act 1945-1965 (Com) which are vital to an appreciation of the effect of the life policy transaction. In its present form, which is not substantially different from its form in 1968, it reads, so far as material, as follows:-

"94(1). Subject to the Bankruptcy Act 1966-1973, a policy effected (whether before or after the commencement of this Act) by any man upon his own life, and expressed to be for the benefit of his wife, or of his children, or of his wife and children, or any of them, or by any woman upon her own life, and expressed to be for the benefit of her husband, or of her children, or of her husband and children, or any of them, shall create a trust in favour of the objects named in the policy, and the moneys payable under any such policy shall not, so long as any object of the trust remains unperformed, form part of the estate of the person whose life is insured or be subject to his or her debts.

"(2). The person whose life is insured may by the policy, or by any memorandum under his or her hand, appoint trustees of the moneys payable under the policy, and from time to time appoint new trustees of the moneys, and may make provision for the appointment of new trustees of the moneys, and for the investment of the moneys payable under the policy.

"(3). Subject to the next succeeding subsection, if at any time there is no trustee, the policy shall vest in the person whose life is insured, and his personal representatives, in trust for the purposes referred to in, and subject to, sub section (1) of this section."

The effect of these provisions would be that the policy when issued with its endorsement created a trust in favour of the deceased's daughter of which she was appointed the trustee, and, from that time, she was the owner of the beneficial interest in the policy, the moneys payable under it forming no part of the deceased's estate.

The Commissioner did not at any time contend that the policy or its proceeds constituted part of the actual estate of the deceased. But he did contend that it was property "deemed to form part of the estate" of the deceased (notional estate) by the operation of s 7 of the Probate Duty Act 1962 or alternatively that either an amount equal thereto or to the amount of $60,000 paid for the annuity was properly to be included in the final balance of the estate by force of s 8 of the Act.

The contention on the part of the Commissioner that first emerged in the proceedings was that relied on by him in first issuing the assessment - that within the meaning of s 7(1)(d)(i) of the Act the life insurance policy was "property the subject matter of a gift inter vivos by the deceased made within three years immediately before the death of the donor".

In order to be a "gift inter vivos" for this purpose there would need to be, by force of the definition in s 4, a non-testamentary disposition of or in relation to property without consideration or upon a consideration other than full; and in order to be a "disposition", by force of another definition in s 4, there would need to be one or other of the acts therein set out. The Act relied on in the definition was:-

"(d) the creation of any trust or of any estate or interest in property."

There were called in aid of this the words that conclude the definition of "disposition":-

"and whether in any of the cases referred to in the foregoing paragraphs the disposition was effected with or without any instrument in writing or by a person alone or jointly with any other person or by the operation of one or more agreements contracts obligations engagements or transactions entered into or acts done"

To this was added the provision in sub section (2) of s 4 as follows:-

"(2) For the purpose of the interpretation of 'disposition' in sub section

(1)

of this section-

(a) the benefit conferred by the giving making or suffering of any release discharge surrender forfeiture or abandonment; and

(b) the benefit conferred by the creation of any trust or of any estate or interest in property-

shall be deemed to be the property the subject matter of the disposition and the disposition shall be deemed to have been made at the time the benefit was conferred."

For the purposes of the argument it was conceded that, having regard to the language of s 7(1)(d) the "gift inter vivos" had to be one made "by the deceased" and that this in turn required a "disposition" by the deceased, and that in turn required a "creation of any trust" by the deceased. But it was said that the action of the deceased in putting forward the proposal for the life insurance in circumstances inviting the issue of a policy for the benefit of the daughter by way of a trust, albeit by force of s 94 of the Life Insurance Act, sufficiently satisfied the concept of the creation of a trust by the deceased.

It may fairly be inferred from the notation in the proposal for the life policy opposite the words "special clauses" that it was the intention of the deceased, communicated in some way to the insurance company, that in relation to the issue of the policy effect was to be given to the expressions that followed those words whatever their abbreviated form might mean. If the reference to s 94 were left out, these expressions might have been construed as meaning that the policy was to be for the benefit of the daughter named and it was to be held in trust for her. In that case there might have arisen a question as to whether there was sufficient to make it clear that the deceased was constituting himself a trustee of the policy (see Re Webb [1941] 1 Ch 225; [1941] 1 All ER 321, and Re Foster's Policy [1966] 1 WLR 222; [1966] 1 All ER 432). But the reference to s 94 cannot be left out and, when included, the notation indicates an intention on the part of the deceased that the policy to be effected should be expressed to be for the benefit of the daughter so that, by force of s 94, it would "create a trust" (as the statute says) in her favour, and of which she should be appointed the trustee. On this view there was no creation of a trust otherwise than through the machinery of the statute.

Nevertheless, it was said for the Commissioner that even on this basis, there was a creation of a trust by the deceased. This could only be true in the sense that he who acts in a way which will attract the operation of a statute, knowing that that will be the case "creates" the result. But there is not wanting judicial statements of authority to the effect that it is the statute that creates the trust. (Wood v James (1954) 92 CLR 142, at 146 per Dixon CJ and Kitto J and at 150 per McTiernan J; Comr for Probate Duties (Vic) v Mitchell (Crinblat's Case) (1960) 105 CLR 126, at 142 per Fullagar J and at 152 per Windeyer J; and Barclay Trustees v IRC [1975] 1 WLR 106) as follows: "Continuing to a apply the wording of s 2, if there was a policy of assurance effected by a married man on his own life and expressed upon the face of it to be for the benefit of his wife or of his children or of his wife and children then the section provides that such policy 'shall, together with all benefit hereof, be deemed a trust for the benefit of his wife for her separate use, or for the benefit of his children, or for the benefit of his wife and children …'. So there would by statute be a deemed trust." per Lord Morris of Borth-y-Gest at 112; "Where a policy to which the section applies is taken out, a trust is engrafted on the contract of insurance" - per Viscount Dilhorne at 116; "Secondly, the destination of the policy money, the subject of the trust, is fixed by a combination of request and statute, a kind of hybrid mechanism not therefore necessarily to be governed by the rules applying to private trusts" - per Lord Wilberforce at 117. The references in some of the judgments in this last case to the deceased as the "donor" or "disponer" would appear to be dictated by considerations of convenience and not intended to pre-empt the question as to whether there was a gift or disposition.

It is true that the deceased brings about the situation upon which the statute operates but it cannot be said that it is he who "creates" the trust in any real sense.

That conclusion is not weakened by anything to be found in the language which follows para (d). If anything it gains something from the classes of transactions referred to therein with an absence of any reference to the operation of statute. The context suggests that the reference is to something done by the "disponer" to property previously existing in the disponer.

The fact that para (d) of the definition of "disposition" replaced, by the enactment of the Probate Duty Act 1962, an earlier paragraph held to be ineffective in Commissioner of Probate Duties (Vic) v Mitchell (1960) 105 CLR 126 does not detract from the force of that conclusion. So much of the new para (d) that refers to "the creation of any trust" would have work to do both in respect of insurance policies where s 94 was not involved and in respect of other property in an appropriate case, so that the conclusion does not frustrate any obvious intent.

In our opinion then there was no gift inter vivos of a life policy in the form of a creation of a trust by the deceased. As will appear hereafter the learned primary judge did not find it necessary to determine this issue.

This was the only ground upon which the Commissioner altered the final balance as declared by the executors so far as the life policy was concerned, and the only ground upon which he made his assessment in that connexion. But in his notice of disallowance of the executors' objection he broadened the basis of his assessment by asserting that the assessment was authorized by the provisions of the Act and that the proceeds of the policy were properly included in the final balance, without condescending to any other particulars than that there was a gift inter vivos within s 7(1)(d)(i).

By s 17 of the Probate Duty Act 1962 it is provided that upon the hearing of an appeal, unless the Court otherwise orders, the Commissioner shall be limited to the grounds upon which he has disallowed the objection. In fact no other class of property falling within s 7 of the Act was relied upon as attracting duty in relation to the life policy, nor do the grounds of appeal relate to any such claim.

But on the basis that the policy of life insurance did not form part of the actual estate of the deceased and was not deemed to form part of the estate under s 7 reliance was placed by the Commissioner on s 8(1)(d)(ii). The executors' case assumes the application of this provision so far as it relates to para (ii) thereof.

The subsection (with the complementary provision in para (e) included) needs to be set out. It reads:-

"8.(1) There shall be included in the final balance of the estate of a deceased person who at the time of his death was domiciled in Victoria- …

(d) an amount equal to the amount payable under a policy of insurance effected on the life of the deceased (whether before or after the commencement of this Act) which does not form part of the estate of the deceased-

(i) where the deceased at any time within three years before his death had an interest in the policy; or

(ii) where the premiums on such policy were wholly paid or provided by the deceased; and

(e) an amount equal to the proportion of the amount payable under a policy of insurance effected on the life of the deceased (whether before or after the commencement of this Act) which does not form part of the estate of the deceased where part of the premiums on such policy were paid or provided by the deceased that the premiums paid or provided by the deceased bore to the total premiums paid or provided under the policy."

There was a contest between the parties as to operation of the expression in these paragraphs - "which does not form part of the estate of the deceased". The conflict was dictated by a desire to enlarge or to restrict (as the case may be) the operation of the escape clause contained in subs (3) according to the greater or lesser width of the operation of paras (d)and (e) of subs (1). Hence the Commissioner contended that the expression included only policies falling outside both the actual and notional estate while the executors contended that it embraced only policies falling outside the actual estate. The issue is the subject of comment in Ford-Principles of the Law of Death Duty p 209. The argument of the executors that the words exclude the case of a policy which is not part of the "actual" estate but include one which is part of the "notional" estate rests either on the presence of the words "which does not form part" without the addition of words such as "and is not deemed part", or on the insertion of the word "actual" before the word "estate". But as a matter of ordinary construction, "estate" ought to be given the meaning it has in the introductory words of subs (1) - "included in the final balance of the estate", and that is fairly obviously a reference to the "estate" constituted by the operation of s 7, ie the actual and notional estate combined. The expression "which does not form part of the estate of the deceased" then is naturally understood as though followed by the words "whether actual or notional". Another approach is to treat the words in para (d) "which does not form part" as though inclusive of the words "and is not deemed to form". Although the shorter expression in para (d) - "which does not form part" presents an apparent contrast with the longer expression in para (c) - "which form or are deemed to form part", the shorter form found in para (d) is explicable on the basis that it is appropriate to an exclusory provision while the longer form is required for the purpose of an inclusory provision such as is found in para (c) in order to avoid ambiguity. Either approach would appear to be justifiable, and the proper conclusion in our opinion is that para (d) of s 8(1) operates to make dutiable the amount payable under a policy of insurance effective on the life of the deceased which is not made dutiable as actual or notional estate under s 7, if the deceased at any time within three years before his death had an interest in the policy or if the premiums on such policy were wholly paid or provided by the deceased, a modified amount becoming dutiable under para (e) where part of the premiums only were paid. On this view the provisions in s 8(1)(d)and (e) are complementary to those appearing in s 7. They do not take over the subject of policies on the life of the deceased to the exclusion of any provision in s 7.

On the conclusion reached above that the policy in this case did not form part of the estate of the deceased under s 7, an amount equal to the amount payable under the policy would, by force of s 8(1)(d) have to be included in the final balance of the estate because the whole of the premiums (albeit only one) were wholly paid or provided by the deceased.

But this is all subject to subs (3) of s 8. So far as material that provision reads as follows:-

"(3) Notwithstanding anything in paragraphs (d)or (e) of subsection (1) of this section-

(a) where a policy of insurance has been effected upon the life of the deceased or by his spouse and expressed to be for the benefit of his spouse or of his children or of his spouse and children or any of them and no interest whether vested or contingent was held or retained in such policy by the deceased no proportion of the amount payable under the policy shall be added to the final balance but the total amount of any premiums paid or provided by the deceased in respect of that policy during the three years immediately preceding his death shall be included in the final balance; and

(b) …"

It is common ground that this provision applies to modify the operation of para (d) of s 8(1) in respect of any policy of insurance falling within that paragraph if it also falls within

para (a) of subs (3). It is also common ground that if the policy in this case fell within para (d) of s 8(1) it also fell within para (a) of s 8(3). Since the conclusion has been reached that the policy did fall within para (d) of subs (1), it follows that para (a) of subs (3) applies according to its terms to prescribe what shall be added to the final balance in respect of the policy. On this basis it is unnecessary to determine whether para (a) of subs (3) would apply if the policy had not fallen within para (d) of subs (1) of s 8 but had been deemed to form part of the estate by force of para (d) of s 7(1). The learned primary Judge decided that as a matter of construction para (a) of subs (3) would apply in that case, and therefore did not decide whether there had been a disposition within para (d) of the definition of "disposition". But that question as to whether para (a) of subs (3) has that wider operation does not arise under our conclusion and the question may be left open for the case where it is necessary to determine it.

But on the assumption that para (a) of subs (3) did apply, the contention was put forward on behalf of the Commissioner that, on the facts, the total amount of the premiums paid or provided by the deceased in respect of the policy during the three years immediately preceding his death, which had to be included in the final balance, comprised the sum of $60,000 paid as a single premium for the annuity.

The argument was that what was done by the deceased and the insurance company in relation to the annuity and the life policy really constituted one transaction, the payment of the sum of $60,000 in respect of the annuity being a consideration for the promise of the insurance company to issue the policy, and, that being so, constituting a premium paid or provided by the deceased in respect of the policy. It was said that the reality of the situation was that the insurance company would not have issued a policy to a man of the age of the deceased, irrespective of the condition of his health, at the normal rate of premium assessed with respect to the average expectation of life of a man of that age, unless it was assured of his purchasing from it an annuity at a price assessed on the basis of this same average expectation of life being the period for which the annuity would last, thus being recouped from the price of the annuity for the probable loss on the policy. This real character of the transaction was illustrated, it was said, by the fact that the annuity was in fact not paid but appropriated to satisfaction of the annual payment on the policy, and that it was the intention (as the learned Judge found) that that practice should continue. Reliance was placed on the observations as to consideration made by the learned Judge in his reasons. The passage reads: "I have no doubt that the deceased certainly had no intention of making a gift to the insurance company. But that is of course not the test. But it must have been obvious to the deceased that no insurance company of substance would be prepared to issue to a man of nearly 72 years of age whose health was suspect, a policy on his life without a heavy loading on the premiums. Indeed it is doubtful whether any insurance company of substance would have issued such a policy at all. Consequently it seems clear that part of the consideration for the payment of $60,000 by the deceased for the annuity was the granting of the life policy. I have no doubt that the deceased would not have been interested in buying the annuity if the company had not agreed to issue the policy. It would therefore be unreal to view the purchase of the annuity without having regard to the issue of the policy. The real substance of the matter must be considered. Comr of Stamps v Buckland [1959] VR 517. Nor do I consider that the two transactions should be regarded as a mere facade or sham to conceal the real transaction. See Scott v FC of T (1966) 10 AITR 290 at 313 per Windeyer J. The two transactions although intimately related were nonetheless genuine transactions and operated according to their tenor. Upon this basis I do not think it would be correct to hold that the payment by the deceased of $60,000 for the annuity involved a gift to the company."

The view that part of the consideration for the payment of $60,000 by the deceased for the annuity was the granting of the life policy was treated in the argument as involving the converse that part of the consideration for the granting of the life policy was the payment of $60,000 by the deceased for the annuity, and both were treated as findings of fact.

In the absence of direct evidence as to the substance of the negotiations between the deceased and the insurance company's representative or representatives other than the documents, the most that could be said by way of inference would be that part of the inducement for the insurance company agreeing to issue the life policy to the deceased on the basis of an annual premium of $6904 was the deceased's agreement to pay a single premium of $60,000 for the grant by the insurance company of an annual annuity of $6904, and that the insurance company would not have issued the life policy at that premium if the deceased had not agreed to pay that premium for the annuity. But this justifies no more than a conclusion that the making of one contract was an inducement for the making of the other. It is a salutary corrective to note the observation in the High Court's judgment in J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435 at 442; [1971] ALR 92 at 95-6: "The Full Court seems to have thought it sufficient in order to establish a collateral warranty that without the statement as to the estimated speed the contract of purchase would never have been made. But that circumstance is, in our opinion, in itself insufficient to support the conclusion that a warranty was given. So much can be said of an innocent representation inducing a contract. The question is whether there was a promise by the appellant that the boat would in fact attain the stated speed if powered by the stipulated engine, the entry into the contract to purchase the boat providing the consideration to make the promise effective. The expression in De Lassalle v Guildford [1901] 2 KB 215 at 222; [1900-3] All ER Rep 495 , that without the statement the contract in that case would not have been made does not, in our opinion, provide an alternative and independent ground on which a collateral warranty can be established. Such a fact is but a step in some circumstances towards the only conclusion which will support a collateral warranty, namely, that the statement so relied on was promissory and not merely representational."

For all that appears, the insurance company may, in agreeing to issue the life policy, have acted on a representation of the deceased that he was willing to purchase the annuity at the specified price, or have made it a condition of its doing so that he should first take out the policy for the annuity at the specified price. But even if the link between the transactions is to be regarded as contractual in nature, there is still preserved the separate entity of the two transactions. There was preserved with the separate identity of the two transactions as such the separate identity of the respective premiums as such.

The premium is the price for which the insurer undertakes his liability (Colinvaux-The Law of Insurance 3rd ed p 115). Although it may be other than a money payment (eg in mutual marine insurance) it usually takes the form of a money payment. In any case it is the price for the undertaking of the liability under the policy. The mere fact that it is linked contractually with the price paid or accepted under another undertaking does not destroy its identity as a price for the policy. If a car-wash service agrees to provide a customer with a car wash at a reduced price if he buys not less than a specified quantity of petrol at a particular price, there are two identifiable transactions with independently identifiable prices.

The proper conclusion in the present case, in our opinion, is that the premium for the life policy was the premium specified in it. It is that which should be taken to be indicated in the words in s 8(3)(a) - "the total amount of any premiums paid or provided by the deceased in respect of that policy". The contention of the Commissioner that these words should be taken to embrace the sum of $60,000 specified as a premium in the annuity policy and paid on account of that policy should, in our view, be rejected.

The remaining matter is that set out in ground 6 of the Notice of Appeal as follows:-

"6. That alternatively, the learned judge should have held that the said sum of $60,000 was, in all the circumstances, a gift inter vivos thereof made by the deceased to Underwriting and Insurance Limited within the meaning and operation of s 7(1)(d) of the said Act."

It has been noted above that the Commissioner's addition to the final balance of $63,973 was expressly referred to the making of a "gift to the daughter re the policy" and that the assessment proceeded accordingly. In the notice of disallowance of the executors' objection the Commissioner stated as one of the grounds the following:-

"(3) Alternatively, if (which is denied) the whole of the sum of $63,973 was not properly included in the said final balance of the estate of the deceased-

(a) the sum of $60,000 being the amount of the premium paid to Underwriting and Insurance Limited by the deceased some few weeks before his death and paid by him for the purchase of an annuity payable by the said company to the deceased and equal in amount to the annual premium payable by the deceased in respect of the said policy of life insurance, is in all the circumstances properly included in the final balance of the estate of the deceased.

(b) The said sum of $60,000 is properly included in the said final balance as the value of property the subject matter of a gift inter vivos by the deceased made within three years immediately before the death of the deceased (within the meaning and operation of s 7(1)(d) of the said Act).

(c) The said sum of $60,000 is properly included in the said final balance as aforesaid notwithstanding the provisions of subsection (3) of s 8 of the said Act."

Before the learned primary judge it was apparently contended that having regard to the deceased's age and health at the time he took up the annuity the value of the annuity fell short of the $60,000 he paid for it and there was a gift inter vivos to the company of the amount of the excess. While there was evidence that an annuitant paying a single premium of $60,000 for a life annuity of $6904 would need an actual life of something over nine years to recoup him for his outlay and interest, there was no evidence of the value of such a life annuity if the projected life were only two or three years. The learned judge noted this in his reasons for judgment but remarked that in that case the value of the annuity would not exceed $20,000 and would probably be substantially less.

Under the definition in s 4 there is a "gift inter vivos" if there is a disposition of property (which includes a payment to any person) upon any consideration other than full consideration given by the disponee to the disponer in money or moneys worth based on the value of the property at the date of such disposition (see Re Marriott [1968] VR 260 at 268). The value of the property disposed of at the date of the disposition was of course $60,000. What has to be placed against that is the consideration upon which it was paid. The learned judge held that if he were to ignore the granting of the insurance policy it was obvious that the deceased paid substantially more for the annuity than it was worth, so as to constitute a gift. But he considered that for this purpose the purchase of the annuity should not be regarded in isolation from the other circumstances of the grant of the life policy without a loading on its premium. It was in this connexion that he observed that "it seems clear that part of the consideration for the payment of $60,000 by the deceased for the annuity was the granting of the policy". In this he was using the term "consideration", as it is used in the definition of "gift inter vivos", and applying to it for its meaning and operation the principles applied by the Full Court of this Court in Commissioner of Stamps v Buckland [1959] VR 517 and in doing so travelling outside the instrument evidencing the transaction in order to ascertain the consideration "in the wider conveyancing sense rather than the more precise contractual sense". (Archibald Howie Pty Ltd v Comr of Stamp Duties (NSW) (1948) 77 CLR 143 at 152 per Dixon J.) Adopting this approach the learned judge took into account the grant of the policy for the premium specified therein and found that there was no lack of full consideration for the payment of the price of the annuity and therefore no gift. This, in our view, is consistent with the preservation of the identities of the two transactions and the premiums therein referred to. In our opinion, there was no error in the approach of the learned primary judge in this connexion and the conclusion that he reached that there was no gift to the insurance company involved was correct. This ground of appeal cannot be upheld.

As all the grounds of appeal have failed, the appeal should be dismissed.