Union Government (Minister of Finance) v Gowar

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA, De Villiers AJA, Juta AJA and Wessels Acting AJA
• Judgment Date: 11 May 1915
• Citation: 1915 AD 426
• Hearing Date: 18 February 1915
• Court: Appellate Division

Innes, C.J.:

Under the will of the late Frederick James Gowar certain lands were bequeathed to his sons, subject to a life usufruct in favour of the respondent, who is his widow. In due course the executors arranged to pass transfer of the properties to the legatees, and Mrs. Gowar desired to have her usufructuary rights registered against their titles. When the papers came before the Registrar, however, he demanded transfer duty (under Cape Act 5 of 1884), on her interest, and refused to pass transfer or to register the usufruct without payment of such duty, which he assessed at 275 3s. 6d. In order to obtain registration Mrs. Gowar paid the above sum under protest. The matter having been then put through, she instituted proceedings in the Eastern Province Local Division reclaiming the money. Judgment was given in her favour, and the present appeal is against that order.

Two questions present themselves: One depending upon a point of statutory construction, the other upon a point of law:

(a) Was the duty claimable, and

(b) If not, can it now be recovered?

Taking these in their order, we turn first to the Act of 1884. The second section enacts that "all persons acquiring the right to the, limited enjoyment of property burdened with the entail of fidei commissum, and all persons acquiring a life usufruct only in any property, shall (save as in this Act excepted) be chargeable with and liable to pay" duty upon the value of their interests, calculated as prescribed; and whether they seek to have their interest registered in the Deeds Office or not. The effect of that clause is to impose upon fiduciaries and usufructuaries alike, a general liability for duty, calculated upon the basis of the value of their respective interests, save where, the Act relieves them. Aid as the words of exception clearly apply to both classes, one would expect to find in the later portion of the Statute exemptions operative in respect of both. The relevant provisions occur in section 19 (11) as

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follows "Any person, being a descendant or a surviving spouse of any person who shall, by will or otherwise, have burdened any immovable property with the entail of fidei commissum, or other similar restriction, in regard to such descendant or surviving spouse, so that the latter shall be entitled only to a life or other limited interest in such property, may have his title to such limited interest recorded in the Deeds Registry Office, without the payment of transfer duty." The clause is one of many manifestations in the Statute of the desire of the Legislature to accord specially favourable treatment to descendants and surviving spouses; the question is whether the exemption which it affords embraces the case of a usufruct as well as of a fidei commissum. If not, then the clear indication in section 2 of an intention to grant relief in respect of both species of interest has not been carried out, for there is no other provision which could operate in that direction. The word usufruct is not mentioned in the sub-section, and a right of that nature can only be covered by its terms if it falls within the expression "or other similar restriction." It is urged that it cannot so fall because of the frame of the clause. The only restrictions intended to be exempted, it is argued, are restrictions which (like fidei commissa) are burdens upon the land "in regard to" that is as affecting - "the descendant or surviving spouse." A usufruct is not a burden or restriction upon the property of the beneficiaries mentioned, but upon the dominium of the remaindermen; and, therefore, it is not "similar", to a fidei commissum within the meaning of the term as there used, and cannot fall within the exemption. The contention, though in some respects forcible, is not convincing. It assumes an accuracy of legal conception and expression on the part of the Legislature, of the existence of which neither the second clause nor the succeeding paragraphs of section 19 afford any proof. Sub-section 12, for example, refers to a fidei commissum as being a "limited interest" instead of a "restriction"; and the language of sub-section 13 evidently intended to include a fidei commissum is very wide and general. Moreover, the interpretation contended for by the appellant would give no effect to the words "or other similar restriction." If they do not include a usufruct, they must be confined to fidei commissa, and would, therefore, be superfluous; a conclusion at which it is almost impossible to arrive in view of the course of legislation upon the subject. After all a usufructuary is entitled to "a life or other

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limited interest" in the property concerned, and so is a fiduciary; both interests imply a restriction or burden upon the dominium, and the restriction in the one case is very similar in its incidence to that in the other; though the burdened ownership is in different hands. From that point of view a usufruct may be regarded as a restriction "similar" to a fidei commissum, and may be quite properly so styled. Nor is there any reason for supposing that the Legislature intended to impose upon certain classes of persons, being usufructuaries, a liability for the payment of duty while exempting the same classes, being fiduciaries. On the contrary, fidei commissum, being a larger right than usufruct one would think that if any distinction was to be made, it would be drawn in the other direction. Any element of doubt as to the meaning of the Statute, however, is removed by reference to the earlier legislation on the same subject. Act 5 of 1884 was a consolidating and amending measure. Among other things it repealed Ordinance 18 of 1844, by which transfer duty had been originally imposed, and re-enacted certain of its provisions. Section 2 of the Act is identical with section 19 of the Ordinance, save that it contains the words "and all persons acquiring a life usufruct only in any property," which did not originally appear. And section 19 (11) of the Act differs from the corresponding clause of exemption in the Ordinance only in respect of the expression "or other similar restriction" which occurs after "fidei commissum." In other words the taxing clause was widened so as to include a usufruct as well as a fidei commissum, and the excepting clause was enlarged so as to relieve spouses and descendants in respect not only of fidei commisa, but similar restrictions. The inference is irresistible; the language of exemption as modified is capable of being read so as to include a usufruct, and it was clearly the intention of the Legislature so to use it. Antidote as well as bane was to figure in the amending measure. I think, therefore, that the respondent's right of usufruct was protected by sec. 19 (11) of Act 5 of 1884, and transfer duty in respect of it was not claimable by the Registrar.

It remains to consider whether Mrs. Gowar, having paid the money, can recover it back. The declaration is somewhat wanting in precision; but having regard to the admissions made by the plea it is clear

(1) That the respondent was entitled to have her usufruct registered free of duty;

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(2) That registration was refused save upon payment of the sum demanded;

(3) That she paid the money under protest as the only means of obtaining immediate registration and without abandoning her rights.

It would be in the highest degree inequitable that the Treasury should N permitted to retain what it had no right to claim; and the question is whether the law will allow it to take up such a position. In White Bros. v. Treasurer-General (2 J., p. 351) it was laid down that the principles underlying the English cases in regard to money paid under duress of goods are in accord with the true principles of the Civil Law. That pronouncement, embodying as it did an equitable doctrine of great practical importance, has been adopted generally by South African Courts. Indeed Counsel for the appellant expressly recognised its authority; but he contended that its operation should be confined within the strict limits which govern applications for relief by way restitutio in integrum on the ground of fear. The existence of metus was in all such cases an essential element, and that implied such intimidation or pressure as would affect the will of a person of ordinary constancy. Now if that were the correct rule in a case like the present, its application would be fatal to the respondent's claim. But I cannot find it laid down in White Bros v Treasurer-General, nor do I think it was intended there to lay down, that payment made under duress of goods could not be recovered without proof of such metus as would justify the setting aside of it contract by way of restitutio in integrum. On the contrary the CHIEF JUSTICE approved, in terms, of the distillation drawn by the English law, according to which though duress of goods is not a ground for avoiding an agreement, yet payments made to obtain delivery of goods wrongly withheld may be recovered as not having been voluntary. See Skeate v Beale, (11 A and E., p. 983); and Green v Duckett (11 p. 275, etc). As a fact the English decisions allowing money paid under duress of goods to be reclaimed are not based upon the principle of what we should call a restitutio in integrum; they are examples of relief granted by reason of the quasi-contractual relationship created by the receipt by one person of money which rightfully belongs to another; see Anson on Contract (p. 172). The actions shape themselves in assumpsit for the recovery of money had and received

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for the use of the plaintiff; see Ashmole v Wainwright (2 Q.B.D. p. 837); Parker v Great Western Railway (7 M. & G., p. 253, etc.). In every case, so far as I am aware, in which the money has been recovered, the original payment has been pronounced involuntary; not in the sense that the will of the payer had been...