Terell A-G CJ FMS:

This is an appeal from the decision of the Supreme Court upon a reference on a point of law under s. 38 of the Estate Duty Enactment (Cap. 136). The reference was made on an agreed statement of facts, and such facts therefore are not in dispute. Under sub-section (iv) of s. 38, no appeal can be brought from the decision of the High Court without the leave of the Court, or of the Court of Appeal. The learned Judge who heard the reference in the Court below, having gone on leave, the application for leave was made to the Court of Appeal. In the opinion of the Court the question involved was one of considerable importance not only to the Estate Duty Department but also to the public generally, and it was decided that leave to appeal should be given. A question was raised as to whether any terms could be imposed, the general object of s. 38 being clearly to obtain an inexpensive decision on a point of law on agreed facts, no Court fees being chargeable and no costs allowed [sub-s. (v) ].

I am inclined to the view that sub-section (v) also applies to an appeal when leave to appeal is given, and that no terms can be imposed. It was however not necessary to decide this point, as the State, which is the appellant, offered to pay the costs of the respondent in any event. The Court wishes to express its appreciation of the attitude which the department has adopted, recognizing no doubt that it is a hardship that a point of law, of interest to the community generally, should be decided at the expense of one unfortunate member of that community.

The point for decision on the appeal arose under s. 17 of the Enactment (allowance for debts and funeral expenses). The material parts of s. 17 (ii) read as follows:

An allowance shall not be made in the first instance for debts due from the deceased to persons resident out of the Federated Malay States (unless charged on property situate within the Federated Malay States) except out of the value of any property of the deceased out of the Federated Malay States in respect of which estate duty is paid ...

Under earlier legislation, the Stamp Enactment of 1922, the words in brackets read "unless contracted to be paid in the State or unless charged, etc." and under the English Finance Act and under the Colony Estate Duty Ordinance, debts contracted to be paid in the jurisdiction are still allowed to be deducted irrespective of whether the creditor is within or without the jurisdiction.

In 1929, however, the present Estate Duty Enactment was passed, and all the words in brackets which previously appeared in the Stamp Enactment were omitted. In 1936 the words now appearing in brackets were restored, but not the words providing for deductions of debts payable in the Federated Malay States. It must be conceded therefore that the omission of these words must have had some definite object which it is the duty of the Court to ascertain.

The debts in dispute were debts owing by the firm of the above-named deceased to a firm carrying on business in the Federated Malay States, the sole proprietor of which was a Chettiar who lived in India, and had never permanently resided in the Federated Malay States. The learned trial Judge held that because the debtor had a business in the Federated Malay States, he resided there for the purpose of the Enactment, and he relied on Commissioner of Stamp Duties v. Salting [1907] AC 449, and other English cases, and also on a local case, Re the Estate of ASPLVR Veerappa Chetty 1 FMSLR 339. The English cases are however of little assistance as they merely deal with the situation of partnership assets. The local case certainly decides that firms carrying on business in the State are persons resident for the purpose of estate duty. As, however, in the present case the debtor is the sole owner of the business, which is not a partnership, that case also has little relevance.

In the case of an individual, "residence" must necessarily involve the ph