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Wednesday, 20 May 1942

Mr SPENDER (Warringah) .- The honorable member for Robertson (Mr. Spooner), quite properly, has said that clause 5 was approved in its present draft by the special committee which dealt with this matter. It will be remembered that when the Gift Duty Assessment Bill was previously before this House, I pointed out that there are many incomplete gifts which it was not the intention of the Government to pick up, but which would be picked up by the legislation as then framed. The Treasurer (Mr. Chifley) .".greed to consider that point, and the present measure is the result. The honorable member for Robertson has said that he has been assured by the legal member of the committee that the difficulty has been met. Alt-hough I have very great respect for that legal member, I entirely disagree with his view. Many gifts, such as a gift of shares, are complete in law when the assignment or transfer has been signed by the transferor. It is important to stress that it is not necessary for the transferor to divest himself of the legal title in respect of the gift. It is still possible for him - I use the word " possible " because it appears in the clause - to pre lire registration of it. Take as a further example the transfer of land, which requires registration before the title in it passes. The donor may, if he so chooses, have the transaction registered. It is possible for him to divest himself of his interest in the property, but it is not necessary to do so in order to enable the gift to take effect.

Before drawing attention to the terms of the clause, I consider it advisable to refer to a classical decision in this matter - Awning v. Anning (1907), 4 C.L.R., at page 1057. The Chief Justice, delivering a judgment in which the court concurred, stated -

The question therefore arises, and must be answered with respect to each class of property described in the deed, whether the donor did everything which, according to the nature of the property, was necessary to be done in order to transfer the property and make the gift binding upon himself. I think that the words " necessary to be done ", as used by Turner L.J. in Milroy v. Lord (1), mean necessary to be done by the donor. Thus, in the case of shares in a company which are only transferable by an instrument of transfer lodged with the company, I think that the donor lias done all that is necessary on his part as soon as he has executed the transfer. So, in the case of a gift of land held under the acts regulating the transfer of land by registration, I think that a gift would be complete on execution of the instrument of transfer and delivery of it to the donee. If, however, anything remains to be done by the donor, in the absence of which the donee cannot establish his title to the property as against a third person, the gift is imperfect, and in the absence of consideration the court will not aid the donee as against the donor. I apologize for reading that statement, of law; but it is important to ascertain whether this clause, as framed, accomplishes what the Government has in mind. The clause reads -

Provided that this sub-section shall nol operate to make subject to gift duty any gift of property where the Commissioner is satisfied that the donor hud, prior to the commencement of this act, done everything which it was necessary- using the exact words used in all the authorities - and possible for him to do to divest himself of the property.

It seems quite clear that, in respect of a trail-!' of land requiring registration to pass the title; a transfer of shares, the title not passing until the transfer is registered by the company; and the withdrawal of money from a savings bank, which does not pass until the money has been handed over, although the gift is complete when f,r withdrawal slip, together with the deposit book, has been handed to the donee to be taken to the bank; there are three things possible to ! e i1 one li v the donor, hut not necessary to Li doin' in order to make the gift effective.

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