Australian Airlines Limited v Commissioner of Stamp Duties (Qld)

[1988] HCA 33

HIGH COURT OF AUSTRALIA

Mason C.J., Brennan, Deane, Dawson and Gaudron JJ.

AUSTRALIAN AIRLINES LIMITED v. COMMISSIONER OF STAMP DUTIES FOR THE STATE OF QUEENSLAND

1 July 1988

Decision

MASON C.J., BRENNAN, DEANE, DAWSON AND GAUDRON JJ: The issue in this appeal concerns the interpretation of s.54(7) of the Stamp Act 1894 (Q.) ("the Act"). That sub-section, as it stood at the relevant time, provided, inter alia, that:

"Ad valorem duty with which a contract or

agreement would otherwise be chargeable shall not be claimed in any case where there is produced to the Commissioner evidence satisfactory to him that such contract or agreement was rescinded within 30 days after its execution. ..."

2. The circumstances in which the question arises may be briefly stated. The appellant entered into a contract dated 25 January 1985 for the sale of certain land as vendor to Tealmont Pty Ltd ("Tealmont"), the purchase price being $3,850,000. On 11 February 1985 the appellant and Tealmont entered into a deed of rescission of that contract. The appellant claimed that the execution of the deed of rescission brought s.54(7) into operation. However, the respondent Commissioner assessed stamp duty on the contract in the sum of $141,600 and on the deed in the sum of $4.00. In arriving at his assessment the Commissioner concluded that the contract had not been rescinded within the meaning of s.54(7).

3. The Commissioner's conclusion was based on the special circumstances in which the deed of rescission came to be executed. The contract, which in other respects was not unusual in form or content, contained an unusual provision, cl.23. Clause 23 was in these terms:

"The purchaser shall at any time prior to the

date of possession be entitled to nominate another purchaser of the said property by notice in writing to the vendor PROVIDED THAT such notice is accompanied by:-

(a) an agreement to rescind this contract duly executed by the purchaser;

(b) a contract on the same terms as this contract (with the exception that the nominee is named as purchaser therein and deleting this present clause) duly executed by the nominee;

(c) a guarantee from such person or persons (in such form and in such terms as the vendor may reasonably require) as the vendor may reasonably require PROVIDED HOWEVER that the vendor shall be at least entitled to request guarantees from such of the directors and/or shareholders of the present purchaser as shall be specified by the vendor;

(d) an authority in writing executed by the present purchaser and its nominee addressed to the vendor authorizing the vendor to apply and utilize the deposit moneys paid hereunder as deposit moneys under the fresh contract with the nominee;

AND the vendor agrees that upon tender to it of that notice accompanied by the four (4) documents referred to above it will enter into the contract referred to in sub-paragraphs (a) and (b) hereof.

In consideration of the vendor agreeing to so act pursuant to and subject to the terms and conditions set out in this clause the purchaser does hereby indemnify and save harmless the vendor from any liability for all and any stamp duty assessed and payable as a result thereof and on these presents and/or any guarantee hereto and/or on the agreement to rescind same and/or on the said new contract howsoever assessed and payable."

4. Following the execution of the contract, Tealmont entered into a contract with Permanent Trustee Nominees (Canberra) Ltd ("Permanent Trustee") by which Tealmont agreed with Permanent Trustee that it would for a consideration of $680,000 request the appellant to agree to a rescission of the original contract and to enter into a fresh contract upon the same terms and conditions in favour of Permanent Trustee as purchaser. By this contract Permanent Trustee covenanted that it would indemnify Tealmont against any liability arising out of the fresh contract and that upon execution of a new contract by the appellant would reimburse Tealmont for the deposit of $400,000 paid under the initial contract. On 11 February 1985, Tealmont, pursuant to cl.23, requested the appellant to novate the contract in favour of Permanent Trustee upon the same terms and conditions as those contained in the contract, save cl.23 and save such terms and conditions as had already been performed.

5. A further agreement ("the new contract") was then executed by the appellant and Permanent Trustee. In accordance with cl.23 of the initial contract, the new contract was in the same terms and conditions as the initial contract with the exception that cl.23 was omitted and Permanent Trustee was named as purchaser in place of Tealmont. A true copy of the new contract was duly stamped with ad valorem conveyance duty in the sum of $141,600.

6. The deed of rescission, which seems to have been executed contemporaneously, after reciting the making of the request for novation, provided for a release by each party of the other from the performance of the contract and from all obligations on the part of each of them. By cl.3 of the deed Tealmont undertook to present the contract together with the original of the deed to the Commissioner and to pay duties thereupon assessed and indemnified the appellant from any liability, loss or expense for or relating to the contract and to the deed. Authorities in writing dated 11 February 1985 executed by Tealmont and dated 15 February 1985 by Permanent Trustee each addressed to the appellant were delivered to the appellant in accordance with cl.23(d) of the initial contract authorizing it to apply and utilize the deposit moneys paid under the initial contract as deposit moneys under the new contract.

7. The Commissioner, at the request of the appellant, stated a case pursuant to s.24 of the Act. The case asked the following questions:

"(a) Has the Contract been rescinded within the meaning of Section 54(7) of the Act?

(b) If 'no' to (a):-

(i) is the Contract liable to be charged with duty under the heading 'Conveyance or Transfer' in the First Schedule to the Act or under any other and if so which heading in the said Schedule or under any other and if so which provision of the said Act?

(ii) Is duty chargeable on the Contract in the sum of ONE HUNDRED AND FORTY-ONE THOUSAND SIX HUNDRED DOLLARS ($141,600.00)?

(iii) If 'no' to (ii), is any other amount and, if so, what amount chargeable as duty on the Contract?

(c) How should the costs of and incidental to the stating of this Case and of the appeal be borne?"

8. The Full Court of the Supreme Court of Queensland (Andrews C.J., Thomas and de Jersey JJ.) answered the questions as follows:

(a) No.

(b) (i) The contract is chargeable with duty under the heading Conveyance or Transfer.

(ii) Yes.

(c) The appellant should pay the Commissioner's taxed costs of and incidental to the case stated and appeal.

9. At the outset of the hearing of the appeal to this Court Mr Hanson Q.C. for the Commissioner moved that the order for special leave to appeal be rescinded on the ground, inter alia, that the appeal no longer involved a question of general importance because s.54(d) of Act No. 34 of 1988, assented to on 26 April 1988, relevantly amended s.54(7) after the Court granted the appellant special leave to appeal. The amendment takes the form of adding a new sub-s.(8) to s.54. The new sub-section is in these terms:

"(8) For the purposes of subsection (7) and

without limiting its meaning, a contract or an agreement which has been rescinded includes a contract or agreement under which all rights and obligations are at an end and the parties to the contract or agreement have been returned to the original positions in respect of the property the subject of the contract or agreement which they held prior to the execution of the contract or agreement: The term does not include a contract or agreement which is at an end because the vendor has entered into or has agreed to enter into a further contract or agreement with a person nominated, introduced, substituted or otherwise by the purchaser in the original contract or agreement or some other person pursuant to that original contract or agreement or a related document."

The consequence of the amendment is that the outcome of the present appeal will not have an impact on other cases arising under the Act, there being no pending cases involving the interpretation of s.54(7) before the enactment of Act No. 34 of 1988.

10. We deferred giving our decision on the application for rescission of the order granting special leave to appeal so that we would have the advantage of hearing the substantive arguments on the appeal itself. Having heard those arguments, we have come to the conclusion that we should now rescind the grant of special leave to appeal. We shall briefly state our reasons for that conclusion.

11. The starting point is the fact that the appeal can no longer be seen as involving a question of general importance. The transaction in question is an extraordinary one. The determination by this Court of the liability to duty which the relevant instruments attract involves the construction of statutory provisions which have since been materially altered and which are not, in their unaltered state, applicable in respect of any other pending cases.

12. Nor does the appeal involve any general principle of wide-ranging application. True it is that the legislation in force in other jurisdictions contains somewhat similar provisions. But the resolution of this case is unlikely to provide guidance in the interpretation of those provisions because, when compared with s.54, they are differently expressed. The point is that the terms "rescission" and "rescind" may be used in a variety of senses. The consequence is that the meaning of the word "rescinded" necessarily depends on the context in which it is found. It follows that the ascertainment of the meaning of the word in a particular statutory framework may have little or no significance for its meaning in another statutory framework, let alone for the elucidation of the concept of rescission in the general law of contract.

13. Finally, we have come to the firm view that the appeal must, in any event, fail. It seems to us that, whatever the precise meaning of the expression "was rescinded" in the statutory context applicable to this case may have been, it did not comprehend a mutual or bilateral termination of a contract for sale in a case where the contract itself provided for that termination as a step towards a sale of the subject property to a nominee under the contract with the consequence that the "rescission" was itself an element in the intended operation or performance of the contract.

14. For the foregoing reasons we rescind the grant of special leave to appeal and order that the appellant pay the respondent's costs of the application for special leave to appeal and of the application for rescission of the grant of special leave to appeal. The costs of that application for rescission should be taxed on the basis that the hearing of that application involved a full hearing of the appeal.

Orders

Rescind the grant of special leave to appeal.

Order that Australian Airlines Limited pay the Commissioner's costs of the application for special leave to appeal and the application for rescission of the grant of special leave to appeal.