Commissioner for Act Revenue v Bell Resources Holdings Pty Ltd

[1990] HCATrans 131

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IN THE HIGH COURT OF AUSTRALIA

Registry No Cl of 1990

B e t w e e n -

COMMISSIONER FOR ACT REVENUE

Applicant

and

BELL RESOURCES HOLDINGS PTY LTD

Respondent

Application for special

leave to appeal

DEANE J
GAUDRON J

Bell

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 8 JUNE 1990, AT 10.17 AM

Copyright in the High Court of Australia

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MR S.P. CHARLES, QC:  May it please the Court, I appear with

MR B. SULLIVAN for the Commissioner for ACT Revenue.

(instructed by the Australian Government Solicitor)

MR N. FORSYTH, QC: If the Court pleases, I appear with my

learned friend, MR C. SCERRI, for	the company,
Bell Resources Holdings Pty Ltd.	(instructed by
Mallesons Stephen Jaques)

DEANE J:	Mr Charles.
MR CHARLES:	Your Honours, this Court has already granted an

application for special leave in the matter of the

REGISTRAR-GENERAL V NORTHSIDE DEVELOPMENTS PTY LTD, 14 NSWLR 571, on a question dealing with the indoor management rule.

This application, Your Honours, raises a

different aspect of that rule and I should say at

once that it was not a matter that was raised by

the applicant in the court below. The matter,

Your Honours will recall from having read the judgments - - -

DEANE J:	You just beat us to the punch, Mr Charles.
MR CHARLES:	The matter was raised, Your Honours, by members of the court in their judgments and the subnission we
make is that it is not a matter that depends in any respect upon fact. There is no further fact that
could have been put forward by the applicant or,
for that matter, by the respondent that would have
borne on the matter and if I can - - -
McHUGH J:	What about knowledge of lack of authority on the
part of the officers of the transferee?
MR CHARLES:	That matter was raised as between the transferee

and the transferor by the respondent itself in the

course of its submissions and was dealt with and a

finding made by the Deputy President at first

instance against the respondent. So that

matter was disposed of, Your Honours.

Now, before the Deputy President the question

of section 68A(4) was raised and disposed of but no
argument at that stage was put on behalf of the

applicant that either the indoor management rule

or section 68A should dispose of the questions now

being raised.

GAUDRON J: Did you not actually eschew the argument rather than

not put it?

MR CHARLES:  I am sorry, Your Honour, I accept the argument

was not raised, not pursued, there was no mention

made of it. Now, what happened simply was that

when the matter came to judgment the court, in its

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reasons, both in Mr Justice Jenkinson's reasons and

Mr Justice Von Doussa's, raised the question.

Your Honours, if I can indicate shortly what we

say are the questions which might justify special

leave. We would say that they are these, and

they relate particularly to, in the first place, revenue collection considerations and, secondly,

the dealings as between a body corporate and a

governmental body as to whether the indoor

management rule covers actions or dealings of that

kind, if I may call them that.

The questions, Your Honours, we submit, are these: firstly, whether a transfer which is sealed

and, on the face of it, properly executed is open

to an attack of this nature after it has been

presented to the stamps office; secondly, whether

it will be possible for a company to avoid stamp

duty in future by relying on some internal

administrative defect as a means of establishing

that a document bearing the company's seal is null

and void; thirdly, whether the Commissioner will

in future be required to test the validity of the

execution of such transfers before an assessment

to duty will be effective. Next, Your Honours,

are three other considerations which deal with the
general TURQUAND's case in section 68A matters:

whether the rule in TURQUAND's case is applicable

to circumstances such as the present involving the

lodgment of company documents with governmental bodies.

Next, Your Honours, whether section 68A of the Code,

by reference to a person having dealings with a

company, includes a governmental official such as

the Commissioner, and the last point, Your Honours,

relates to the matter raised by Mr Justice Von Doussa

in his reasons where His Honour said that the question

would only arise where a person claimed the benefit

of section 68A~ and the matter we submit to the Court

is whether the presumption or rule of law, known as

the "indoor management rule" applies as of course

or whether the benefit of them must be claimed by

a person such as the Commissioner. -

DEANE J:	Now, which of those issues was not raised before the court below?
MR CHARLES:	Your Honour, none of them was raised in the court

below. I am bereft of support in the court

below, Your Honours, but - - -

McHUGH J: It is not a very promising start.

MR CHARLES:  Your Honours, so far as the way the matter has

proceeded before the Deputy President is concerned,

the Court will appreciate that the transfer was lodged,

the assessment was made and the respondent came to

the Deputy President, called seven witnesses with a

view to showing that there had been an absence of

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authority and the applicant succeeded before

the Deputy President in establishing to his

satisfaction that there was authority, in fact,

for the transfer.

Now, our first submission would be that when

the matter came before the Full Federal Court

Their Honours, in fact, were delving into questions

of fact which, under section 44 of the ADMINISTRATIVE

APPEALS TRIBUNAL ACT, we say they should not have

been doing in reinvestigating that question.	Be
that as it may,	I readily accept that that is the

time these questions should have been raised before the Full Federal Court and were not but we submit,

Your Honours, that they are questions none the less

of great importance for the Court and that they would not have been affected by any question of evidence in the court below.

DEANE J:	When one looks at the draft notice of appeal,
notwithstanding the judicious arrangement of grounds,
it appears that these questions would be only raised
if you failed on a preliminary appeal as to fact.
MR CHARLES:	With respect, Your Honour, that would not

necessarily be so. I could quite understand the

Court taking the view that that matter ought not be

raised at all. If the questions we have put before

the Court this morning are those that the Court says

we should have special leave for, then I would accept

that the draft notice of appeal will require

substantial amendment.

McHUGH J:  But none of these points are raised in the draft

notice.

MR CHARLES:  That is my point, Your Honour, I accept that.

The fact that they are raised very late, Your Honours,

we would submit, does not detract from their importance

or the appropriateness of them for this Court to

consider.

McHUGH J: Well, except that the Court has not got the benefit

of the judgments of the Full Court of the Federal Court.

MR CHARLES:	It only, Your Honour, has the benefit of them to the extent that Mr Justice Jenkinson dealt in part
with the matter but said that in the absence of
the matter having been urged by the Conrrnissioner,
he would not take it further and Mr Justice Von Doussa,
having said that in the absence of the benefit
being claimed, it could not be.

Now, Your Honours, it would be our submission

that those matters are appropriate for this Court

and we would submit that on those grounds there

should be special leave.

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DEANE J:	Thank you, Mr Charles.	Yes, Mr Forsyth?

:t:1R FORSYTH: If the Court pleases, first, in our submission,

not only would the High Court not have the benefit

of full consideration of these issues below but if

my learned friend raises these issues, then we

would raise issues in response which equally were

not dealt with below. The first of them is:

duty is only payable after the transfer is executed

under section 56 and, in our submission, the present

state of play at the end of the Federal Court's

determination is that the transfers were not, in a

legal sense, ever executed. So that we would say

even if my learned friend establishes by some use
an extension of section 68A, the documents
had some potential effect, it was not an effect

because they had been executed but an effect by

reason of the statutory provisions. ·

Now, I do not wish to develop that argument

but simply to illustrate that that is one issue

that would arise and that underlines the desirability

of the Court's general rule, that exceptional

circumstances are required for an appeal to be

raised on a new point.

The second major contention we would advance

is that in any event the particular - my learned friend

spoke only generally about the operation of section 68A

and the effect of lodgment of documents but it has

always been the case that stamp duty depends upon

the legal efficacy of a document and what it looks

like when one reads it may turn out not to be what

it truly does and there are plenty of cases about

settlements which look as if they are settlements

but when you go back to Jarman on Wills and so on

you find, for some reason, they are not so or there

is something about the facts not disclosed

in the document which mean they do not have any

legal effect. That has always been the situation

and always will be the situation, so there is no

fundamentally new point about that raised.	What is
raised is whether a document which ex hypothesi

has no validity between the parties to it, A and B, but may have an effect if it gets into the hands of

a third party thereby acquiring some operation is

stampable because of that mere possibility.

Now, in our submission, that would be a surprising

consequence but the time to test that is the time

when one has a situation where it arises and it has
gone into the hands of a third party and one can see

what happens.

In the present case, the most likely way in

which it could have had legal effect as far as a

third party is concerned is if the transfer had been

handed on to Standard Chartered Bank as part of its

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security. In that situation, section 68A(2) might

have meant that as between Standard Chartered Bank
and the transferor, Ambassador, Standard Chartered

Bank was entitled to a security interest in the shares but that would not happen because there had been

a transfer. The document would still not have worked

as between Ambassador and Bell to have transferred

the shares from Ambassador to Bell. That can never

happen because the two parties, on the findings of

the Federal Court, as between each other can never

rely upon the document which they know to be wanting

in authority.

So that even if my learned friend's foreshadowed arguments were wholly correct and 68A could give some

legal operation to the document in some hypothetical

circumstances, that legal operation would still not

constitute a transfer of the shares from transferor

to transferee. So that, in any event, it is submitted

this is a most inappropriate case for ventilating the

questions to which he has adverted.

DEANE J:	Thank you, Mr Forsyth. Mr Charles?
MR CHARLES:	Your Honours, two short points: the matters

my friend has put before the Court are, with respect,

wrong. If the Court looks at page 27 of the application

book, paragraph 18 of the Deputy President's reasons,

the Court will see that the very question of

section 68A(3) and (4) was raised and considered bv

the Deputy President in the context of an argument'

of the effect that the transfer might have had as

between transferor and transferee so that my friend

was already raising before the Deputy President the
whole question of the impact of section 68A in the
context of that transfer and that point was decided

against him.

Now, Your Honours, if any of these other matters

that my friend raises now had been intended to be

agitated in these proceedings, at that level, before

the Deputy President, was the time for them to be

raised and the question whether any transfer was

effective or otherwise was something that was patently

in issue at all times before the Deputy President.

If the Court pleases.

DEANE J: Apart from issues of fact, the questions which the

applicant seeks to raise on an appeal are all

matters which were not raised in the Full Court

of the Federal Court. In these circumstances and
notwithstanding what has been said in support of
the application, we do not think the case is an
appropriate one for the grant of special leave to appeal.

Special leave is therefore refused.

MR CHARLES: If the Court pleases.

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MR FORSYTH:  If the Court pleases. Would the Court say with

costs?

DEANE J: With costs.

AT 10.34 AM THE MATTER WAS ADJOURNED SINE DIE

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