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Fiji Resort Ltd v The Commissioner of Estate and Gift Duties [1978] FJCA 6; Civil Appeal 60.1977 (3 August 1978)

IN THE FIJI COURT OF APPEAL
Civil Jurisdiction

Civil Appeal No. 60 of 1977

Between:

FIJI RESORT LIMITED
Appellant
(Original Defendant)

and

THE COMMISSIONER
OF ESTATE AND GIFT DUTIES
Respondent
(Original Plaintiff)

Mr. K.C. Ramrakha for the Appellant
Mr. M.J. Scott for the Respondent

Date of Hearing: 26th July, 1978
Date of Judgment: 3rd August, 1978

JUDGMENT OF THE COURT

SPRING, J. A.

This is an appeal from the judgment of the Supreme Court of Fiji given at Lautoka on 9th November 1977, whereby the appellant was ordered to deliver to the respondent a Statement as required by Section 28(1) of the Estate and Gift Duties Act Cap. 178 21 days from the date of the judgment and to show cause why the appellant should not pay the estate duties as assessed by the respondent.

The facts may be shortly stated.

Alan Emmett Davis died at Lautoka on 28th February, 1972. At the date of his death he was domiciled in California in the United States of America and was a citizen thereof. The deceased left a will, and appointed the First National Bank of San Jose California executor thereof. This will was duly proved in California on 2nd May, 1972, but at all material times so far as this appeal is concerned the probate of deceased's will had not been resealed, nor had any grant of administration in his estate been made in Fiji. As at the 26th September, 1973, 187,942 stock units in the appellant company were registered in the name of Alan Emmett Davis deceased solely; and 101,404 stock units in the appellant company were registered in the names of Alan Emmett Davis deceased and his wife Doris Anita Davis jointly. On the 26th September 1973 187,942 stock units in the appellant company in the sole name of Alan Emmett Davis deceased were sold to Qantas Airways Limited; on the same date 95,123 stock units in the appellant company in the joint names of the said Alan Emmett Davis deceased and his said wife were likewise sold to Qantas Airways Limited. The above transfers were duly stamped on 19th April, 1974 and presented to and registered by the appellant company so that Qantas Airways Limited became the duly registered holders of the above stock units in Fiji Resorts Limited.

On 18th April, 1974 1,500 stock units in the appellant company in the joint names of the said Alan Emmett Davis and his said wife were sold to McClintock Metal Fabricators Inc. A transfer in respect thereof was duly stamped on 19th April 1974 and presented to, and registered by the appellant company with the result that the purchaser company became the registered holder of the 1,500 stock units.

It would appear that all transfers were signed by the executor, names in the will - but as at the date of registration of all the above transfers no grant of administration, or resealing of probate, in the deceased's estate had been made in Fiji in accordance with the laws of this country.

On 17th September 1976 an application under Section 31 of the Estate and Gift Duties Act Cap. 178 was filed in the Supreme Court at Lautoka by the Commissioner of Estate and Gift Duties. It will be convenient to set out the provisions of section 31 of the said Act.

"31.(1) If any person takes possession of or in any manner deals with any part of the estate of any deceased person without obtaining administration of his estate within six months after his decease, or within two months after the termination of any action or dispute respecting the grant of administration of the estate, or within such further time as may be allowed by the Commissioner on application, the Commissioner may apply to the Supreme Court for an order that the person so taking possession or dealing as aforesaid deliver to the Commissioner within such time as the Commissioner may determine, a statement as required by subsection (1) of Section 28 of this Ordinance, and to pay such duty as would have been payable if administration had been obtained, together with the cost of the proceedings, or to show cause to the contrary."

The learned judge in the Court below held that the appellant company had clearly dealt with assets owned by the estate of Alan Emmett Davis deceased; had exercised control and dominion thereof by registering in the books of the appellant company the transfers of stock units in favour of Qantas Airways Limited and McClintock Metal Fabricators Inc. In so doing it had acted without the authority or direction of any executor or administrator of the deceased's estate appointed in accordance with the Laws of Fiji. The learned Judge referred to various authorities, and, in particular to the principles laid down by the House of Lords in New York Breweries Company Limited v. Attorney General [1898] UKLawRpAC 61; (1899) AC 62. The application sought by the Commissioner was duly granted and orders made pursuant to section 31 of Estate and Gift Duties Act. Cap. 178.

The ground of appeal stated in the notice of appeal reads:-

"That the learned Judge erred in fact and in law in holding that by registering the transfer of the stock in question the Appellant took possession of and dealt with a part of the estate of Alan Emmett Davis deceased."

Counsel for the Appellant submitted in arguing his ground of appeal that in registering the transfers of the stock units the appellant company - Fiji Resorts Limited - had acted as the agent of the American executor and on the authority of Sykes v. Sykes [1870] UKLawRpCP 16; (1870) LR 5 CP 113 the appellant could not be treated as an executor de son tort whether the will had been proved or not. In the course of his argument counsel for the appellant conceded that if this Court concluded that the principles enunciated in New York Breweries Company Limited v. Attorney General (Supra) were applicable to the facts of this case, as opposed to the decision in Sykes' case (Supra), the appeal must fail.

It is necessary now to examine the law applicable to the facts of this case.

In Halsbury's Laws of England 4th Edition Vol.7 p.231 paragraph 417 it is stated:

"On the death of shareholder domiciled abroad the company can only act upon a grant of probate or administration in this country. If therefore the company registers the name of or a transfer by any person who has not obtained such a grant or pays dividends to any such person, it becomes an executor de son tort, and is liable to penalties and to pay such duties as would have been payable on a grant of probate."

In the case under appeal no executor or administrator had been appointed, in accordance with the Laws of Fiji to sell or transfer stock units owned by the deceased in Fiji Resorts Limited to Qantas Airways Limited or McClintock Metal Fabricators Inc. The facts in New York Breweries Company Limited v. Attorney General [1898] UKLawRpAC 61; (1899) AC 62 were:

".... a man named Clausen a citizen of New York and domiciled there died in 1893 having by his will appointed two persons in Now York as his executors. Probate of the will was granted to them in New York but they took no probate or administration in England. Clausen was the registered holder of ordinary and preference shares in the company and of debentures and the executors requested the company to transfer to them all Clausen's shares and debentures and to pay them the interest and dividends due. The company did so, after notice to the Inland Revenue, and the Attorney General filed an information against the company claiming an account and payment of duty. At first instance the information was dismissed, but in the Court of Appeal an order was made declaring that the appellants were liable to deliver to the Commissioners of Inland Revenue an account of the shares and debentures in the company registered in Clausen's name at his death and of the dividends and interest thereon being the personal estate of Clausen and of the value of the said estate and to pay such duty as would have been payable if probate or administration had been duly obtained in England in respect of the personal estate of Clausen. The House of Lords affirmed the decision of the Court of Appeal."

Earl of Halsbury L.C. in New York Breweries Company Limited v. Attorney General (Supra) at p. 69 said:

"Here is an incorporated company and the deceased person is entitled to his aliquot share of the profits earned by that company. He dies, and according to the constitution of the company when a shareholder is dead the only person who is to be recognised as having a right to deal with his share is - I will put in the word which by implication is manifestly there -an English executor or an English administrator. The company, therefore, being now in possession of the share of the profits which belonged to the deceased person, are bound to see that they do not hand it over, or hand over anything that represents it to any person who is not entitled to deal with it. That

[PacLII Editorial Note: Page 6 missing from judgment]

but the case is far from deciding that had the executors not taken out probate before action the acts of Shaw could have been treated as other than tortious. In contemplation of the Court he must have been a wrongdoor if he could not prove that he had the authority of the executors. "

Accordingly on the facts of the present case on appeal we are satisfied that the learned judge in the Court below was correct in applying thereto the principles laid down by the House of Lords in New York Breweries Company Limited v. Attorney General [1898] UKLawRpAC 61; (1899) AC 62 when he said:-

"Now it seems to me that what the defendant company did here was exactly what the company did in that case. They purported to exercise dominion and control over the shares of the deceased and took them out of his name and put them into the name of someone else without recourse to their own constitution which required that the legal personal representative - and that of course as Lord Halsbury explains, means the legal person representative in Fiji - was to be the only person recognised by the company. If the defendant in the New York Breweries Case took possession of the shares, so did the defendant company in this case. But I think not merely did the defendant company take possession of the personal estate of the deceased, they also dealt with his estate."

Therefore we dismiss this appeal with costs to the respondent together with the sum of $75.00 for the costs of and incidental to the-earlier appearance before this Court.

G.C. Marsack
Vice President

T. Henry
Judge of Appeal

R.C. Spring
Judge of Appeal