Comptroller of Stamps v Christian

[1991] HCATrans 62

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M36 of 1990

B e t w e e n -

COMPTROLLER OF STAMPS

Applicant

and

JOHN MARTIN CHRISTIAN and

LESLIE HENRY CHRISTIAN

Respondents

Application for special

leave to appeal

BRENNAN J
DAWSON J

McHUGH J

Christian 1 8/3/91

TRANSCRIPT -OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 8 MARCH 1991, AT 11.19 AM

Copyright in the High Court of Australia

MRS A. MOSHINSKY, QC: If the Court pleases, I appear with

my learned friend, MR J.V. KAUFMAN, on behalf of

the applicant. (instructed by D.C. White, Acting

Solicitor to the Comptroller of Stamps &

Commissioner of Business Franchises)

MR G.A.A. NETTLE:  May it please the Court, I appear for the

respondents. (instructed by Dunn Strachan & Hardie)

MRS MOSHINSKY:  Your Honours, the determinative question in

this matter was recognized by the Full Court below

and it can be found in Mr Justice O'Bryan's

judgment at page 49 of the application book, where

he states:

Should one be unable to treat the two

parcels of land as one entity the result

contended by Mrs Moshinsky would be upheld.

The court having identified, as I put it, a

determinative issue, failed, with respect, to

consider it or answer it. It failed to consider

how the two parcels of land could, in fact, be

treated as one entity, or how the transfers could

effect a partition or division of two parcels of

land that were from the outset, separate and

divided. That is the only issue in this case. It

has significant importance. Its importance is to

the application of the Stamps Act in Victoria. It
has also relevance to the application of like

provisions in other States, but I would point out

that the provisions in other States are different,
in part, that in some States it is only property
that is referred to rather than real property, and

in some States there is partition or division of

both personal and real property.

DAWSON J:  Mrs Moshinsky, did you concede below that if the

two parcels of land were contiguous, then the

decision would be right?

MRS MOSHINS~Y:	No, Your Honour.
DAWSON J:	I thought I read that somewhere.
MRS MOSHINSKY:	No, Your Honour, the only concession was a

concession before His Honour Mr Justice Phillips. I did not appear in that case. That was resolved in the Full Court, but that very point that

Your Honour mentions is in fact put as a submission

by myself to the contrary and highlighted by

His Honour Chief Justice Young, where he identifies

at pages 26 onwards - he says:

The critical question for decision

appears to me to be whether the words "any

real property" in section 72(1) can be applied

Christian 2 8/3/91

to this case. Put in another way, the
question is whether land which is contained in
more than one certificate of title is the

subject of partition or is divided when one

joint owner takes the land in one certificate

and the other joint owner takes the land in

the other certificate.

It was my submission that a transfer of those

separate titles would not be a partition or

division.

DAWSON J: It is the next paragraph that I had in mind.

MRS MOSHINSKY:  Yes.

To express the question in that way omits

certain facts from the situation -

Now, with respect Your Honour, I do not follow. My

proposition was that if they were contiguous or
adjacent, they could be consolidated and redivided,
but if they were not consolidated then they were

separate and distinct if contained in separate

titles. Perhaps Your Honour could direct me more -

DAWSON J: Well, it says:

for I understood her to concede at one point

in the argument that several parcels of

property jointly owned might be the subject of a partition or division within the subsection,

so long at any rate as they were contiguous.

MRS MOSHINSKY: Well, with respect, Your Honour, that is a

misstatement and Mr Justice O'Bryan corrects that

when he restates the proposition and identifies

that my submission was, so long as they were

contiguous and capable of consolidation, were

consolidated and resubdivided, and I think that is

clearly set out in Mr Justice O'Bryan's judgment.

McHUGH J: That is the passage at page 43, is it, line 7?

MRS MOSHINSKY:  Thank you, Your Honour. Yes:

Mrs Moshinsky conceded, I believe, that

several parcels of real property whether owned

jointly or by tenants in common may be

conveyed to give effect to a partition or

division of all the land provided the real

property the subject of partition or division

is contiguous and not separated by areas of

land not owned by the same persons.

Christian 8/3/91

DAWSON J: That is not qualified evidence and it may not

matter at all, Mrs Moshinsky.

MRS MOSHINSKY: No, I accept that. At page 43, further

down:

The basis of this concession is that

several parcels of real property in contiguity

may be consolidated into one title and

subsequently partitioned or divided.

Thank you.

DAWSON J: Oh, I see.

MRS MOSHINSKY:  Now, it goes back to what I put to

Your Honours as axiomatic, that you cannot separate

and divide something that is separated and divided,

but that does not mean that you cannot consolidate

and divide in some other manner, so therefore, if
you have one parcel of land you can divide it

depending on the structure. I mean, you may have a

building on the property which requires a division,

not into equal parts, but in this case there are

two parcels of land. There is no way that these

parcels of land could be joined together. There is

no way that it can be put that there is joint

ownership in the relevant sense.

DAWSON J:  Do you place any reliance on the fact that one

parcel was held by the owners in tenants in common

and the other parcel jointly?

MRS MOSHINSKY:	No, I did not, Your Honour.
DAWSON J:	You do not place any importance on that?
MRS MOSHINSKY:	No, I did not, and that is picked up in the

case, because it is not the partition or division
of either parcel of land that is relevant here, it

is the partition or division of the both parcels of

land, one from the other, which at all times were
separate and divided.	As to the partition of

either part, my submission would be that there was

nc partition in law. If one goes back to the early

authorities and establishes clear principles that -

what happened in fact was, if I could describe it,

if A and B owned black acre and B transfers his

interest to A, that is not a partition, but a union

of interest, the ownership of the entirety then

devolving to A. Now, in this case, it would be my

submission, there was no partition either of the

joint tenancy or tenancy in common, because there

was a union of interest.

If the case was one where the question of the

joint tenancy required a partition of severance,

Christian 4 8/3/91

then it would become relevant because of the

question of severance of the joint tenancy but in

this case, it would be my submission, firstly,

there is no partition of either properties, but

even if there was, it is not relevant. The only

way the respondent can succeed, is by satisfying

the Court, as Justice O'Bryan said, and as I think

His Honour the Chief Justice recognized, that you must look at the properties as if there was one entity and it is my submission that you cannot have

a joint tenancy or a tenancy in common that is one

estate. You cannot have an undivided interest in

two separate parcels of land or two separate

titles.

BRENNAN J:  Mrs Moshinsky, the burden of your argument is

clear. The question, however, is not what the law

with respect to partition is. It is the
application of a particular section of the

Victorian Stamp Acts.

MRS MOSHINSKY:	Yes, Your Honour.
BRENNAN J:	And you have to make good, do you not, the proposition that interpretation of that is of such
importance that the Court should grant special leave?

MRS MOSHINSKY:  Yes, Your Honour. The way the court has

interpreted this section is to extend the

application of an exempting provision.

Section 72(1) exempts from duty certain

transactions. This decision extends, it is

submitted, the application of that exemption with

the consequent loss to revenue, but it extends it

to a point which shows the fallacy in the decision,

with respect, and the example that we put to

Your Honour is the example of property situated so

far apart, such as one property in one State and

another.

Now, on the decision, if one parcel was in

Victoria and the other parcel was in New South

Wales, this would give an immediate territorial

complexity to the application of the section and

question whether the transfer to one party in the exchange of his property and interest in the other State.

BRENNAN J: Well, that is a possibility that can be conjured

up, no doubt, but the reality is, is it not, that

if you have two parcels of land which are held by

co-owners but which are not consolidated, then, on

your argument, if they should decide to take one

each, the exemption does not apply, but if they

Christian 8/3/91

were to consolidate those parcels of land and then

partition them, the exemption would?

MRS MOSHINSKY:	Yes, Your Honour.
BRENNAN J:	Now, that seems to suggest that the operation of

the exemption is one of niceness, but considerable
technicality, without perhaps necessarily involving

a major question of importance.

MRS MOSHINSKY:  With respect, Your Honour, it is not a

question of niceness in practical terms. It has

significant application in the sense that where

there is a partition or separation of real

property, in the example Your Honour gave to me,

exemption is granted, but in this case it extends

the application of this section to partnerships,

which is really where the reasoning started from

the first decision of the tribunal. It extends the

application to partnerships which was never

intended.	The section was limited to real
property.	A specific provision was enacted as to
companies.	No provision was included as to

partnerships. Decisions such as Davis' case

clearly shows that where distribution of

partnership of assets, where one partner got real

property and the other partner got market or

securities, was not exempt. A transaction such as

this where, in fact, you have cross-sales or

parallel transactions, were intended to be

subjected to duty when the legislative amendment

excluded exchanges from exemption.

Now, the revenue that flows from that - in the

affidavit in support of the application, the

Comptroller has set out the number of cases

dependent on this decision and the value or duty in

question which, of itself, it is submitted, is

significant. So, what is submitted is that it

extends the operation of the exemption too widely;

it effects a significant number of cases with a

substantial amount of duty. In the construction of

the meaning of "partition or division of real

property", it has effect on the construction of
sections in the other Stamps Act and it is a

question of law which requires clarification. It

is an important question of real property as to

what a "partition" or "division" is and my

learned -

BRENNAN J: If that is the proposition, there is no doubt

about that, is there? There is no doubt about what

a partition is.

MRS MOSHINSKY: Well this judgment, with respect, has put a

shadow of doubt. Before this decision, there was

no doubt. There was no doubt that the authorities

Christian 6 8/3/91

meant that what a partition was, was a division, a

severance of title and a division of the land.	Now
the authorities are quite clear, there must be unity of title; there must be joint tenants or tenants in common of the property, the
subject-matter of the partition.	Now this decision
has cast enormous doubt on that.

DAWSON J:  No, no, it just says that for the purposes of

this section of the Stamps Act, there is a division

of real property, even where you have two

properties and lumped them together for the

purpose.

MRS MOSHINSKY:  I am sorry, Your Honour, if you could put

that to me - - -

DAWSON J: It does not involve any general principle. It

merely says, for the purposes of this sections of
the Stamps Act, you do have a division of real
property when you lump together two pieces of land,

even though they are separate and then divide them

up. In other words, that any real property can

comprise more than one piece of land in the

section. That is all it means.

MRS MOSHINSKY: Yes, Your Honour. Well, it does - - -

DAWSON J:  We all know what "partition" is at law and that is what the section means.

MRS MOSHINSKY: Well, that is a far more limited

construction of the decision, with respect. The

decision has, by its adoption, since given credit

to a statement in Halsbury, as to what a partition

is, and that statement, it is submitted, which

gives the example of the partition of black acre,

white acre and green acre, by its endorsement by

this decision, goes far wider. That statement, it

is submitted, had no authority and was an over-

simplification of the nature of the transaction

which is involved in the transfer of black acre to

one party, white acre to another party and green

acre to a third party, so, to that extent, it has

not doubt on the meaning of "partition" in law and

could have far wider application, but the problems

it gives to the administration of the Stamps Act

would, with respect, be sufficient to allow leave,

the problems that it gives in the assessment of

duty and the application of the Act to a number of

transactions that could or could not come within

this decision and as it is put to highlight it by

the absurdity of giving exemption from duty to
property, to a division in those terms of property,

in different States.

Christian	8/3/91
BRENNAN J:	Mrs Moshinsky, could you give us any further details of the material that appears on page 65,
the 106 files, the revenue that is involved and so
forth? It affects 106 files. That is a very
Delphic statement, if I might say so.
MRS MOSHINSKY:	What has been put there is that it has been

divided into the type of - what additional

material is Your Honour minded on? I am sorry,

Your Honour, what additional information that does not appear in the affidavit does Your Honour have

in mind?

BRENNAN J: Well, what are the kinds of cases which are

involved here? You spoke of partnerships before.

Are these all cases of dissolution of partnerships

where partnership property is being divided between

two parties?

MRS MOSHINSKY:  I would have to get instructions. They are

not limited to partnership cases and one can see

the problem arising in any partition which has an

element of exchange in it. Your Honours will see

that what was run below was the emphasis that this,

in substance, was an exchange of interest, rather

than a partition of interest, and therefore it must

affect those transactions which have an element of

exchange or cross-sales in it.

BRENNAN J:  Can I just mention the problem that is troubling

me? There may be many properties which are

acquired by husband and wife where there are two
allotments and in due time it is thought desirable

to divide the property between husband and wife or

perhaps between ex-husband and ex-wife. Now, it

seems curious, if those properties have already

been divided in point of title, to have one result,

but if they are consolidated, in point of title, to

have another.

MRS MOSHINSKY:  Yes, but that is in respect of the

partition, but in respect of the division, it would

depend - can I put the submission the other way?

If the parties went to court seeking a partition or

division of these properties, would they not be

faced with the question, "But these properties are

already partitioned or divided?". Now, in the

example Your Honour gives, it would depend how the

property was partitioned. If it had 100 acres and

because of the territorial - you know, the

boundaries of the property - a division was

required into 70 and 30 per cent allotments, that

would be a clear division of those two contiguous

properties, but what we are saying here is it is

not necessary to divide because it was already

divided. Now it may be that you have cases where

you have adjacent properties where it is necessary

Christian 8/3/91

to divide. It may be that it is necessary to

change the boundaries. But where you have two

separate and distinct parcels, there is nothing to

divide, they are separate and distinct, the

boundaries do not have to be changed.

DAWSON J: Well, there is the ownership to divide?

MRS MOSHINSKY:  But the ownership is and this is what we are

saying, that if the division of ownership is

partition, as we have put it, it is not a joint

tenancy as to both properties. It is not a tenancy

in common.	No party has an undivided interest in
the whole. The ownership is separate.	There is
common ownership.	You may have three properties

where A and Bown black acre; Band C own white

acre and A and Bown green acre. There may be

overlapping of interests; there may be common

ownership, but it is not joint ownership or tenancy

in common.	Your Honour has put to me the problem
of a husband and wife -	I am instructed that a

husband and wife provision is covered by an

exemption, if that assists Your Honour - that injustice of the application of this section,

but - - -

BRENNAN J:  I am trying to find out - I mean, the problem is

a very interesting point. I think the authorities

known are more recent than the turn of the century.

It is a problem of some arcane interest in terms of

principle, but in terms of day-to-day activity, I

wonder whether it has got any great relevance to

the grant of special leave.

MRS MOSHINSKY: Well, Your Honour, the application of a

revenue legislation must have relevance to a day-

to-day practicalities and the injustices - one

could go on with examples, Your Honour, the

application of this decision, is arbitrary, because

if A and B have property which are of equal value

and they exchange them, duty is paid, but if A and

B have half interest in the property, why should

they be exempt from an exchange of partial interest

when they would not be exempt from exchange of the

whole interests?

BRENNAN J: Well, they are exempt if the property has not

previously been divided because then they can

partition.

MRS MOSHINSKY:  Yes, I accept that, but the intention behind

it is that we have one property, jointly owned or

tenants in common and the interest held before and

interest acquired after the partition is the same

and it is a limited exemption to that point. If

the interest is varied in any respect, duty is paid

on the variation. If one looks at the properties

Christian 9 8/3/91

as a whole, then one is looking at partnership and

saying that partnership creates a joint - it allows

us to treat it as one entity and that, it is

submitted, is wrong.

Now, it is for Your Honours to decide but we

would submit that the application of a revenue

legislation is important and, as I said, the

expression "real property", it does appear in some

of the other States. I do not think I can put

that - and the great difficulties and injustices.

I am troubled by Your Honours saying whether

the relevance of the effect on other areas of law,

gives it leave. I would put to Your Honours that

if the decision leaves doubts as to the meaning of

the law, that is sufficient in itself that the

High Court should give it due consideration.

BRENNAN J:  We need not trouble you, Mr Nettle.

MR NETTLE: If the Court pleases.

BRENNAN J: Without accepting all that was said by the

Full Court in its consideration of this matter, the

Court is not satisfied that the point which is

sought to be agitated by Mrs Moshinsky, if special

leave were granted, is of sufficient pu~lic

importance to justify the grant of special leave.

Accordingly, special leave will be refused.

MR NETTLE: If Your Honours please, I ask for an order for

costs.

BRENNAN J:  Do you have anything to say about costs,

Mrs Moshinsky?

MRS MOSHINSKY:	No objection.
BRENNAN J:	The order will be made with costs.
AT 11.42 AM-THE MATTER WAS ADJOURNED SINE DIE

Christian 10 8/3/91