BEGG & ORS V COMMISSIONER OF INLAND REVENUE CA CA127/2008

BEGG & ORS V COMMISSIONER OF INLAND REVENUE CA CA127/2008 30 April 2009IN THE COURT OF APPEAL OF NEW ZEALAND CA127/2008 [2009] NZCA 160BETWEEN MARION ELIZABETH BEGG, JOHN HINMAN JACKSON, AND NANCY JOSEPHINE JACKSON Appellants AND COMMISSIONER OF INLAND REVENUE Respondent Hearing: 2 February 2009 Court: William Young P, Chambers and Baragwanath JJ Counsel: I R Millard QC and J M Donovan for Appellants H W Ebersohn and H J Lee for Respondent Judgment: 30 April 2009 at 4 pmJUDGMENT OF THE COURT A The appeal is allowed. B Leave reserved to apply for further relief, including costs. REASONS OF THE COURT(Given by Chambers J)Table of ContentsPara NoA Public Trust asset-stripping scheme [1]Issues on the appeal [6]Background facts [11]In order for an act to amount to a "disposition of property" for the purposes of the 1968 Act, must it come within the general part of the definition? [15]Did the creation of the trust give rise to a dutiable gift to the children? [31]Even if the initial gifts were gifts for gift duty purposes, were the latter ones? [51]Result [54]A Public Trust asset-stripping scheme[1] In the early part of this decade, a number of elderly clients of the Public Trust entered into gifting arrangements with their children or other family members. The point of the arrangements was, apparently, to reduce the value of the elderly people's assets, which could be to their advantage in the event of asset-testing for schemes such as the state subsidy for elderly residential care. [2] The unusual feature of the arrangements, which were effected using a common-form template devised by the Public Trust, was that the donors did not actually pay any money to their children at the time. The donors in effect promised to pay, with payment actually to be made when the donors died and their homes were sold. The nature of the scheme was such that, in the first year, the donors would give (or promise to give) $27,000. That figure was chosen because under the Estate and Gift Duties Act 1968 a person can gift up to that figure in any given year without incurring gift duty: see s 62 and Schedule 3. In subsequent years the gifts were made of lesser amounts. An essential feature of the arrangements was that the donors declared that henceforth they held their homes as trustees for themselves and their children "to the extent of their respective interests from time to time". The children were also entitled to ask for a registrable mortgage over their donors' home to secure the amount from time to time owing to them under the arrangements. [3] We do not know whether the arrangements were successful for their asset-testing purposes. Mr Ebersohn, for the Commissioner of Inland Revenue, the respondent, told us that neither Work and Income nor the Ministry of Health had indicated to Crown Law any concerns about the arrangements. But the Commissioner himself did have concerns. He considered these "gifts" were not giftsfor the purposes of the Gift Duties Act at all. His view was that the Public Trust template did not produce a succession of annual gifts (all below exemption level). He thought no gifts at all would be made until the arrangements were perfected and the money was actually paid. In other words, the template, in his view, led to one gift at the termination of the arrangement, a gift which would exceed $27,000 and thus be liable to gift duty. [4] The Public Trust disputed the Commissioner's view. By procedural means that are not material, the Public Trust and the Commissioner decided to have the point established one way or the other in the High Court. Two test cases were chosen. Marion Begg was the donor under one of the Public Trust arrangements; John and the late Nancy Jackson were donors under another. The question came before Dobson J in the High Court in Wellington. He found in favour of the Commissioner: Begg v Commissioner of Inland Revenue (2008) 1 NZCC 61,355. He held that the "gifts" so far made were not gifts for the purposes of the Gift Duties Act, the consequence being that there would be a potential liability for gift duty at the termination of the arrangements, assuming there is still a statutory gift duty regime at that time. [5] From that decision, Mrs Begg and the Jacksons have appealed. (We have not concerned ourselves as to the basis upon which Mrs Jackson is said to be a party, notwithstanding her death in 2003. That is because the actual parties do not matter; the proceedings against the Commissioner are effectively being brought by the Public Trust on behalf of all their clients who have entered into arrangements of this sort.)Issues on the appeal[6] In order for there to be a gift for the purposes of the Gift Duties Act, there must be a "disposition of property" as defined in the Act. That definition is found in s 2(2):Disposition of property means any conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property, whether at lawor in equity; and, without limiting the generality of the foregoing provisions of this definition, includes – (a) The issue of shares in a company: (b) The creation of a trust: (c) The grant or creation of any lease, mortgage, charge, servitude, licence, power, or other right, estate, or interest in or over any property: (d) The release, discharge, surrender, forfeiture, or abandonment of any debt, contract, or thing in action, or of any right, power, estate, or interest in or over any property; and for this purpose a debt, or any other right, estate, or interest, shall be deemed to have been released or surrendered when it has become irrecoverable or unenforceable by action through the lapse of time: (e) The exercise of a general power of appointment in favour of any person other than the holder of the power: (f) Any transaction or series of related or connected transactions entered into by any person with intent thereby to diminish, directly or indirectly, the value of his own estate and to increase the value of the estate of any other person; and for this purpose the passing by a company of a resolution which, by the extinguishment or alteration of the rights attaching to any shares or debentures of the company, results, directly or indirectly, in the estate of any shareholder or debenture holder of the company being increased in value at the expense of the estate of any other shareholder or debenture holder shall be deemed to be a transaction entered into by that other shareholder or debenture holder if he could have prevented the passing of the resolution by voting against it or otherwise;- but does not include a disclaimer of an interest under a disposition made inter vivos or by will or of an interest under an intestacy:[7] We shall deal shortly with the details of these gifting arrangements. A key facet of them is that the donors created a trust. The Commissioner accepts that a trust was created. The Public Trust's argument is that this creation of a trust is a "disposition of property" within para (b), with the consequence that this essential feature of making a dutiable gift is fulfilled. The Commissioner, while accepting a trust was created, says that that is not sufficient to create a "disposition of property" as defined; he says that only trust creations which effect a "conveyance, transfer, assignment, settlement, delivery, payment or other alienation of property" meet the definition. That is to say, he contends that the "means" part of the definition - or the "general part", as we shall call it - must be satisfied before a disposition of propertycan occur. And, he says, the Public Trust template does not effect "any conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property" at the time the trust is declared and the promise to pay is made. Dobson J agreed with the Commissioner's interpretation of the definition. The Public Trust submits his conclusion was erroneous. Accordingly, the first issue we need to resolve is this: in order for an act to amount to a "disposition of property" for the purposes of the 1968 Act, must it come within the general part of the definition? For reasons we shall give, we find in the Public Trust's favour on this issue. [8] If we found in the Public Trust's favour on the first issue (as we do), then the Commissioner sought to uphold Dobson J's decision on another ground. That was that, even if the creation of a trust could, of itself, amount to a disposition of property, that act in this case did not give rise to a dutiable gift to the children. Essentially, this was said to be because the children got no legal or equitable interest in the donors' homes. Mr Ebersohn's argument on this issue was directly contrary to an old Supreme Court decision, Perry v Commissioner of Stamps (1913) 32 NZLR 1194. That was a decision of the Full Court of the Supreme Court, the panel comprising Stout CJ and Edwards, Cooper, Chapman, and Sim JJ. It was on the authority of that case that the Public Trust had developed the scheme now in issue. Mr Ebersohn's argument was that that case had been wrongly decided. [9] The third issue raised by the Commissioner is that, even if the initial gifts are gifts for gift duty purposes, the latter gifts are not, with the consequence that, if on the donor's death these additional gifts total more than the exemption amount (currently, $27,000), the balance will at that time be susceptible to the imposition of gift duty. [10] We shall consider those issues in turn. Before we do so, however, we need to set out some more background facts.Background facts[11] The parties, for the purposes of the High Court hearing, agreed a statement of facts. Annexed to that statement were Mrs Begg's and the Jacksons' deeds. Each isdescribed as a "Deed of Gift and Declaration of Trust". Apparently, these deeds are typical of the gifting deeds created by the Public Trust for their clients. [12] Mr and Mrs Jackson, by deed dated 28 November 2001, recorded their wish to make a gift of $27,000 each to their four children as tenants in common in equal shares. Clauses 2 and 3 of that deed read as follows:2. The Recipients accept these two gifts of $27,000 on these conditions: (a) Each gift takes effect immediately but will not be paid immediately. (b) Each gift will be paid from the proceeds of the sale of the home, at the first point of time when either: (i) Both the Donors have died; or (ii) The Donors sell (or that one of them who is then living sells) the home without buying a replacement home within three months; or (iii) The Donors sell (or that one of them who is then living sells) a replacement home without buying a further replacement home within three months. (c) From the time each gift takes effect it will be vested in the Recipients and will constitute an interest-free debt owed by that Donor to the Recipients. (d) Ownership of the home (or any replacement home purchased by the Donor or the surviving Donor) will remain in the name of the Donors (or the surviving Donor) who will hold it as trustees or trustee for the Recipients and the Donors or Donor to the extent of their respective interests from time to time, including (where one of the Donors has died) the full amount previously gifted under this Deed by that Donor. (e) If the Recipients (or any of them) ever request either Donor to do so, the Donors or surviving Donor will give the Recipients a valid mortgage in a form able to be registered over the title to the home, to secure the amount from time to time owing under the provisions of this Deed. 3. In order to make it easier for the Donors to make similar gifts in future, the parties agree: (a) Each Donor may from time to time complete one of the gifting Clauses in the attached Schedule or a document to similar effect. (b) Whenever either Donor does this, it will have the effect of that Donor making a further gift of the amount stated on the datestated but subject to the conditions set out in clause 2 including the declaration of Trust in clause 2(d). (c) By signing this Deed the Recipients agree in advance to accept each such gift on those conditions. (d) In each case the gift will be to those of the Recipients who are living at the date the gift is made and they will take the gift as tenants in common in equal shares.[13] Mrs Begg's deed was in similar form. The form was somewhat simpler owing to the fact there was only one donor. In her case, we need set out only clause 2 of the deed:The Recipients accept this gift on these conditions: (a) The gift takes effect immediately but will not be paid immediately. (b) The gift will be paid either:(i) From the proceeds of the sale of the home, if the Donor sells the home during the Donor's lifetime without buying a replacement home within three months; or(ii) From the Donor's estate after the Donor has died, if sub- clause 2(b)(i) does not apply. (c) From the time the gift takes effect it will be vested in the Recipients and will constitute an interest-free debt owed by the Donor to the Recipients. (d) Ownership of the home (or any replacement home purchased by the Donor) will remain in the name of the Donor who will hold it as trustee for the Recipients and the Donor to the extent of their respective interests from time to time. (e) If the Recipient (or any of them) ever request the Donor to do so, the Donor will give the Recipients a valid mortgage in a form able to be registered over the title to the home, to secure the amount from time to time owing under the provisions of this Deed.[14] Although the deeds made provision for the recipients to demand a registrable mortgage to secure the amounts owing to them, we were told that no recipient has made such a demand. This is a significant point as the Commissioner concedes that, were the recipients to demand a mortgage and a mortgage were executed, that would perfect the gift at that point. What we have to decide, however, is whether the donors have made a gift without having executed a mortgage.In order for an act to amount to a "disposition of property" for the purposes of the 1968 Act, must it come within the general part of the definition?[15] We have set out the definition of "disposition of property" above: at [6]. As we have said, the Commissioner argued in the High Court, and again before us, that this new definition meant that an activity would amount to a "disposition of property" only if the activity came within the general part of the definition. Accordingly, the creation of a trust would amount to a "disposition of property" for the purposes of the 1968 Act only if it involved "a conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property". [16] Dobson J accepted this argument:[35] This approach to the interpretation of the expression "disposition of property" is a conventional one. Where the draftsman uses "includes", the specific examples that follow are to be taken as examples of the activity in the definition that has preceded such examples. The words "without limiting the generality of the foregoing provisions" recognise that the list of instances is non-exhaustive, and that other modes of conveyance, transfer, etc not coming within the sub-set identified may also qualify. [36] The contrary argument is that any activity coming within the types set out in the lettered sub-paragraphs will, simply by virtue of such inclusion, constitute sufficient activity to be treated as a conveyance, or one of the alternatives, for the purposes of the primary element of the definition. This would give a primary to that list of examples creating a potential inconsistency between them and the principal element of the definition. I accordingly accept the approach to interpretation urged for the Commissioner.[17] His Honour then went on to find that, while a trust had been created, there had not been a "conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property" in terms of "the principal aspect of the definition". [18] Mr Millard submitted the judge's approach to the definition, far from being "conventional", was contrary to the standard approach to a "means and includes" definition, the point of which is to enlarge or extend the ordinary meaning of the defined term. We accept Mr Millard's submission, essentially for four reasons. [19] First, it is supported by the standard texts he cites, namely Bennion Bennion on Statutory Interpretation (5ed 2008) at 573-574, Bell and Engle Cross: StatutoryInterpretation (3ed 1995) at 119-120 and Burrows and Carter Statute Law in New Zealand (4ed 2009) at 417-421. There are plenty of examples in the New Zealand statute book of "means and includes" definitions, where the thing "included" would not or might not come within the "means" part of the definition:• Conservation Act 1987, s 2(1):Plant means any member of the plant kingdom; and includes any alga, bacterium, or fungus, and any part of or seed or spore from any plant.• Trespass Act 1980, s 2(1):Weapon means any gun, rifle, airgun or air rifle; and includes any kind of weapon or device from which any shot, bullet, arrow, tranquillising dart, or other missile can be discharged.• Fisheries (Commercial Fishing) Regulations 2001, reg 3commercial fisher means a person who has a fishing permit issued under section 91 of the Act entitling the person to take any species or class of fish, aquatic life, or seaweed; and includes – (a) a person who is engaged in any capacity on a New Zealand fishing vessel ; and (b) a person, whether or not on board any fishing vessel, who takes any fish, aquatic life, or seaweed for the purposes of sale• Property Law Act 2007, s 4:lease means a lease of property, whether registered or unregistered, and includes a short-term lease and agreement to leaselessee means a person who enters into a lease as lessee, and includes a person who has accepted a transfer or assignment of a lease[20] Secondly, the legislative history of the definition supports Mr Millard's submission. The 1968 Act was the first gift duty statute to contain a "means and includes" definition of "disposition of property". In earlier statutes, a "means" definition had been given, the first particular of which was what is now contained in the general part of the definition. For instance, "disposition of property" was defined in s 39 of the Death Duties Act 1909 as meaning:(a) Any conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property, whether at law or in equity: (b) The creation of a trust:(c) The grant or creation of any lease, mortgage, charge, servitude, licence, power, or other right, estate, or interest in or over any property, whether at law or in equity: [and so on].[21] That definition was the subject of careful analysis in Perry, a case to which we shall be returning in more detail shortly. Suffice to say at this stage that the Full Court found the arrangement in that case was a "disposition of property" within the meaning given in s 39(b), although not a "disposition of property" within the meaning of s 39(a). That case, among others, clearly established that "disposition of property" could cover acts in addition to conveyances, transfers, assignments, settlements, deliveries, payments, or other alienations of property. There is nothing in the 1968 Act to suggest that Parliament intended to narrow the meaning of "disposition of property" or to narrow the scope of the circumstances in which gift duty was payable. If that had been intended, it is difficult to see why the "includes" part of the definition was enacted at all. If anything, the evidence points in the other direction, as the "includes" part of the definition is wider than the definition it replaced, namely s 42 of the Estate and Gift Duties Act 1955: the new definition included the allotment of shares in a company (later amended to the "issue" of shares in a company) as a "disposition of property", a specific act not included in previous definitions. [22] In this regard, the explanatory note to the Estate and Gift Duties Bill (which became the Estate and Gift Duties Act 1968) is instructive. It made clear that the Bill was merely "a consolidation with amendments of the Estate and Gift Duties Act 1955 and its amendments". The explanatory note continued:The Bill in general re-enacts the principles of the existing legislation, but the existing legislation has been extensively rearranged in a more logical sequence and many of the provisions have been rewritten in order to express them in simpler language without altering the substance. In particular, some of the existing provisions are now expressed as mathematical formulae, which, it is considered, considerably simplify them. In addition, many of the provisions relating to estate duty and gift duty in other Acts have been included, in order to make the Bill as complete a code as possible.[23] The note then went on to explain the "material changes in the law" which the Bill, if enacted, would make. No mention was made in the note of any intention to narrow the range of "dispositions of property" which might attract gift duty. The explanatory note expressly dealt with "the most important new definitions orchanges in existing definitions". When it referred to changes to the definition of "disposition of property", all that was noted was that para (a) was new and that the wording of para (f) had been altered so as to make clear it was an alternative to paras (a) to (e), not a prerequisite to them. It is inconceivable that, had the switch of "conveyance, transfer" from para (a) to the general part of the definition been intended to have substantive effect, it would not have been mentioned in the detailed explanatory note. [24] Thirdly, there is no suggestion in the leading text on gift duties that the change in definition effected any substantive change, save as mentioned in the previous paragraph: see Richardson and Congreve Adams and Richardson's Law of Estate and Gift Duties (5ed 1978) at [2/21]-[2/73]. The credentials of the principal author, Sir Ivor Richardson, need no elaboration. The entire discussion of the component parts of the definition proceeds on the basis that each paragraph remains a self-contained definition and that it is not essential that the act come within the general part of the definition. [25] Fourthly, the interpretation we have adopted accords with Australian authority under their Gift Duty Assessment Act 1941-1967 (Cth), an Act which contains a "means and includes" definition of "disposition of property" in effectively identical terms to the definition in our 1968 Act. [26] In Ord Forrest Pty Ltd v The Commissioner of Taxation of the Commonwealth of Australia (1974) 130 CLR 124, Ord Forrest had allotted shares in circumstances which the Commissioner of Taxation considered gave rise to liability for gift duty. There was no dispute that what the company had done was an "allotment of shares" within para (a) of the "includes" part of the definition. But did it come within the general part of the definition – and did that matter? [27] Stephen J, at first instance, held that it was enough that the company's act fell within para (a) of the "includes" part of the definition. He further held that the allotment of shares was made without fully adequate consideration, with the consequence that the allotment was subject to gift duty to the extent of the inadequacy of consideration. The appeal to the High Court of Australia was heardby four judges who split equally. The effect of the High Court's decision was, therefore, that Stephen J's decision was upheld. Gibbs and Mason JJ agreed with Stephen J that the effect of the "includes" part of the definition was to extend the concept "to transactions which are not dispositions in the ordinary sense": at 148. It was enough that the transaction came within the para (a) definition; it did not matter that it did not also fall within the general part. Gibbs J referred with approval to what Williams J had said with respect to this definition in Grimwade v Federal Commissioner of Taxation (1949) 78 CLR 199 at 208:It appears to me that pars. (a) to (f) were included in the definition of disposition of property for the purpose of including in the definition transactions which might otherwise not be held to fall within the ordinary meaning of a disposition or other alienation of property and that each paragraph is complete in itself.[28] Barwick CJ and McTiernan J held to the contrary. We prefer the conclusion of Stephen, Gibbs and Mason JJ. We particularly note the point Gibbs J made with respect to para (f) of the definition: at 148. It could now be taken "as settled", he said, that that part of the definition was "intended to include transactions which would not fall within other parts of the definition", citing Grimwade and Gorton v Federal Commissioner of Taxation (1965) 113 CLR 604 at 622. As His Honour went on to say, "the fact that par. (f) is complete in itself strongly supports the view that it was intended by the legislature that each of the lettered paragraphs of the definition should be self-contained": at 148. This was a point Mr Millard stressed with respect to the equivalent para (f) of our definition. We think this point is unanswerable and strongly supports the conclusion that each of the lettered paragraphs is self-contained. [29] The research we have undertaken does not disclose whether Parliament, and the Inland Revenue officials advising them, were aware of these Australian precedents (Grimwade and Gorton) when preparing the Bill which became the Estate and Gift Duties Act 1968. The fact that the definition was altered so as to conform with the Australian definition would suggest they may have been aware of them, in which case the inference could be drawn that our Parliament intended each of the lettered paragraphs to be self-contained, as they always had been.[30] For all these reasons, we conclude that an act can amount to a disposition of property for the purposes of the 1968 Act without coming within the general part of the definition. We conclude that the change made in 1968 was merely stylistic.Did the creation of the trust give rise to a dutiable gift to the children?[31] Before we address Mr Ebersohn's argument under this head, we need to set out in greater detail the facts and reasoning in Perry. This case is of fundamental importance as it is common ground that the Public Trust, in devising this asset-stripping scheme for its clients, relied on the Supreme Court's decision inPerry. Indeed, if we may say so, the Public Trust's documentation was superior to the documentation in Perry and skilfully removed some of the wrinkles which the Supreme Court had had to iron out. If Perry is right, then the answer to the second issue is clear: yes, the trusts did give rise to dutiable gifts to the children. [32] The facts of Perry were, in brief, as follows. Mrs Perry entered into a deed with James McLean and William Stratton. They were described in the documentation as "the trustees". That was, as the Supreme Court's decision makes clear, a mischaracterisation of their status; they were in fact the beneficiaries of Mrs Perry's declaration of trust; she herself was the trustee. We shall refer to Messrs McLean and Stratton as "the donees". [33] Under the deed, Mrs Perry conveyed to the donees £25,000 "to issue out of and be charged on the said land and hereditaments and the proceeds of the sale thereof". There then followed a covenant by Mrs Perry to pay the sum of £25,000 "out of the proceeds of the sale of the land, provided such proceeds shall be sufficient to pay that sum". [34] The deed provided that Mrs Perry could sell the land in one lot or in several lots, by public auction or by private contract, and subject to such conditions and terms as to payment of purchase-money as she thought fit. Further, Mrs Perry, during her lifetime, was to be the sole judge of the proper time to sell the land; after her death, that discretion rested in the donees. The proceeds of sale were to be applied as follows: first, to meet the costs and duties in connection with the deed ofsettlement; secondly, to meet the costs and expenses of the sale; thirdly, Mrs Perry could set apart the sum of £15,000 for her own use and benefit; fourthly, to meet the settled sum of £25,000. [35] Finally, the deed authorised the donees, as Mrs Perry's attorney, to execute a mortgage in their favour to secure the gift of £25,000. The donees in fact had not exercised that power at the date of the court hearing. [36] The issue in Perry was whether this deed effected a gift under the Death Duties Act 1909. In a reversal of roles compared with the present case, the Commissioner argued there had been a gift, which was amenable to gift duty; Mrs Perry argued to the contrary. The Supreme Court found in the Commissioner's favour. [37] The relevant sections of the Death Duties Act, apart from s 39 set out above at [20], read as follows:37 Gift duty imposedSubject to the exceptions hereinafter provided, a duty (in this Act referred to as gift duty) shall be chargeable in respect of every gift within the meaning of this Act which is made after the commencement of this Act.38 Meaning of "gift"(1) In this Act the term "gift" means any disposition of property (as hereinafter defined) which is made otherwise than by will, whether with or without any instrument in writing, without fully adequate consideration in money or money's worth. 40 Voluntary contracts to be deemed gifts in certain cases(1) In this Act the term "voluntary contract" means a contract entered into, whether with or without an instrument in writing, without fully adequate consideration in money or money's worth. If any contract is made for a consideration in money or money's worth which is inadequate, the contract shall be deemed to be voluntary to the extent of that inadequacy. (2) A disposition of property made in performance or satisfaction of a voluntary contract shall be deemed to be a gift, whether the contract or disposition was made before or after the commencement of this Act. [38] The Commissioner had argued that there had been a "disposition of property" within the meaning of s 39(a). The court did not accept that argument, but held instead there had been a "disposition of property" within the meaning of s 39(b). The court held that, following the execution of the deed, Mrs Perry was a trustee of the land upon the trusts stated in the deed. The donees acquired rights in that, once the property was sold, they could require Mrs Perry or her executor to pay them the £25,000. Because the donees had given no consideration, the entire amount was the value of the gift subject to gift duty. An argument was raised as to whether the value of the gift should be reduced owing to Mrs Perry's life interest. The court held that that argument was precluded by s 9 of the Death Duties Amendment Act 1911: at 1210 and 1211. (For the equivalent section in the current statute, see s 70.) [39] We do not consider that case can be distinguished on the facts. Nor did Dobson J. He distinguished Perry on what he accepted was "a narrow basis": at [40]. That was the change in wording of the definition of "disposition of property", the topic we have already discussed and on which we have respectfully differed from His Honour's conclusion. [40] Mr Ebersohn challenged the correctness of Perry. Essentially, his argument was that neither the donees in that case nor the donees here received a gift because the deeds did not convey to them either a legal or an equitable interest in the donors' property. [41] We do not accept Mr Ebersohn's submission, for reasons which can be shortly stated. We think Perry was correctly decided. Mr Ebersohn's argument under this head was still strongly influenced by his earlier submission that a disposition of property necessarily involved the conveyance or transfer of a legal or equitable interest in property. That is, of course, essential for a disposition of property falling only within the general part, but it is not an essential feature of transactions within the lettered paragraphs. Transactions within para (f) in particular will not necessarily involve a conveyance or transfer of property interests. [42] What matters for the purposes of para (b) is quite simple: has a trust been created? That is the focus, not what specific rights the beneficiaries may or may nothave received under the trust. Gift duty is imposed under the 1968 Act "in respect of every dutiable gift which is made after the commencement of [the] Act". In the context we are discussing, and applying the relevant definitions to be found in ss 2(2) and 63, "dutiable gift" means all the property comprised in any trust created by a person, without fully adequate consideration passing to that person. The Public Trust template creates such dutiable gifts; the template, on execution of the deed, expressly creates a trust, which is impressed upon the donors' home, which trust equity would enforce. We have no doubt that, had the donors sought, later by will, to leave their house to someone other than the children, the children would be entitled to sue on the deed and in reliance on the declaration of trust. In addition, the template confers on the beneficiaries a right to a legally registrable mortgage over the home to secure the debt which has been gifted to them. [43] In our view, the position is accurately stated by Sir Ivor at [2/34] of his text:A trust is "created" for the purpose of para (b) when specific property is impressed with the terms of a trust. The words "a trust has been created" in s 84A of the Land Income Tax Act 1954 (now repealed) were considered by Macarthur J in Baldwin v CIR [1965] NZLR 1 where he said (p 6): "In my opinion the phrase 'a trust has been created' in section 84A simply means 'a trust has been brought into legal existence'. No particular method of creation of a trust is indicated by the section. I think therefore that if it is shown that trust obligations have been imposed or constituted in respect of certain property by one or more of the specified persons then a trust has been created by that person or those persons within the meaning of the section". A trust is created, then, when trustees accept the transfer of property to them to be held in trust. Where the terms of the trust are set out in a trustee deed executed by the trustees and the settlor a trust is "created" only in respect of that property which is actually impressed with a trust at the time the deed is executed. Later transfers of property to the trustees to be held on the terms of the deed create further trusts in respect of that property. Each separate transfer is the creation of a separate trust, and is consequently a separate disposition of property under para (b): Re Adlard [1953] 2 All ER 1437; Re Bowden [1936] Ch 71.[44] In our view, there is no doubt that specific property, namely the donor's home, did become "impressed with the terms of a trust" under the Public Trust template from the date of execution of the deed. It does not matter that the settlor and the trustee were one and the same person, for the reasons given, in particular by Edwards J, in Perry. The point is that, after execution of the deed, the settlor nolonger had the full beneficial interest in his or her home; he or she held it as trustee in terms of the declaration of trust. [45] Sir Ivor then went on to refer to Perry, with no suggestion that that case was wrongly decided. (We may add that, in the last edition of The Law of Estate and Gift Duties in New Zealand written by the original author, E C Adams, there is also no suggestion that Perry was wrongly decided: see (3ed 1956) at [102]. Mr Adams, himself formerly an Assistant Commissioner of Stamp Duties, was in his day New Zealand's leading scholar in this field and, we may add, in others.) [46] Sir Ivor then continued at [2/35]:Although it is clear that the creation of a trust is an effective means of disposing of property within the meaning of the definition, the application of the definition as a whole raises more problems. The principal difficulty is that the various steps involved in the creation and performance of a trust seem to include a number of possible dispositions within the definition. The transfer of property to trustees on trust, the creation of various equitable interests in the trust property, and the transfer of property to beneficiaries under the terms of the trust, all appear to come within the terms of the Act. There might be some difficulty in deciding which of these dispositions is the most relevant for gift duty purposes. It might even be concluded that the creation and performance of a trust involve not one but several dispositions. By virtue of para (b), however, the creation of a trust is itself to be regarded as a disposition. Consequently it is suggested that any transfers, payments, or conveyances made in the performance of the trust are not separate dispositions, for they are incidental to the creation of the trust or flow from it.[47] At [2/39], Sir Ivor discusses the case where trusts create future or contingent interests. Even in those circumstances, he concludes, a gift is made at the time the trust is created "even where the various interest and beneficiaries are unascertained or contingent" and "even when the final destination of those interests cannot be determined until a later date". [48] Even if we had some doubt as to the correctness of Perry, we would be loath now to overrule it. It has stood for almost a century. It has been cited in cases since then, without criticism. Parliament has enacted three new substantive statutes and numerous amending statutes since it was decided, and has at no stage sought to reverse it. Finally, the Public Trust is probably not alone in having ordered its or itsclient's affairs on the basis of Perry being the law. The Commissioner has in the past probably collected revenue on the basis of its authority. [49] Perry has not led to the law of gift duty being in an unsatisfactory state. Instead, it is the Commissioner's interpretation which would lead to an unfortunate result. A donor under the Public Trust template would not make the gift until after his or her death and would then become subject to gift duty, even though, had the gift been made by will, it would not have been subject to duty. [50] We decline to overrule Perry. We consider the case was correct when it held the creation of the trust gave rise to an immediately dutiable gift. So does the Public Trust template.Even if the initial gifts were gifts for gift duty purposes, were the latter ones?[51] Dobson J did not deal with this argument. We are not even sure it was squarely raised on the pleadings. But the issue does appear as the final issue in the parties' statement of issues filed just prior to the hearing before us. On that basis, we shall deal with it. [52] Mr Ebersohn's argument on this head was shortly stated in these terms:The appellants rely on the "creation of a trust" as the basis for stating that the original gifts contained in the deed were dutiable gifts under the Act. However, this would not apply to the subsequent gifts as the trust was already created (and the subsequent gifts did not create a trust). Therefore the subsequent gifts would not, even under the appellants' approach, be dutiable gifts under the Act.[53] We do not accept that proposition, which is answered in Sir Ivor's [2/34], cited above at [43]. Each separate transfer is the creation of a separate trust, and is consequently a separate disposition of property under para (b).Result[54] For the reasons given, we allow the appeal. The appellants, in their notice of appeal, simply sought "an order that the Commissioner's decision was wrong". We can say it was wrong, but we are not sure whether that is the appropriate formal order that should be made. [55] We suspect the parties will be able to resolve matters, including costs, for themselves. Should that not prove possible, leave is reserved for any party to apply for further relief, including costs.Solicitors: John Donovan, Public Trust, Lower Hutt, for Appellants Crown Law Office, Wellington, for Respondent