KLDE Pty Ltd v Commissioner of Stamp Duties (Qld)

[1984] HCA 63

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Wilson, Brennan and Dawson JJ.

K.L.D.E. PTY. LIMITED v. COMMISSIONER OF STAMP DUTIES (Q.)

(1984) 155 CLR 288

23 October 1984

Stamp Duty (Q.)

Stamp Duty (Q.)—Conveyance, transfer or assignment of beneficial interest in property—Transfer of land between "associated companies"—Whether liable to ad valorem duty or within statutory exemption—Exemption dependant on period of association and "ownership"—Beneficial ownership established on making unconditional contract—Stamp Act 1894-1982 (Q.), s. 49c(2).

Decisions

GIBBS C.J., MASON, WILSON and DAWSON JJ. This is an appeal from a decision of the Full Court of the Supreme Court of Queensland on an appeal by way of a case stated pursuant to s. 24 of the Stamp Act 1894 (Q.) as amended ("the Act") against the assessment of duty of $75,400.00 by the Commissioner of Stamp Duties upon a memorandum of transfer.

2. The memorandum of transfer relates to certain land situate at 199 Charlotte Street, Brisbane ("the Land"). The relevant history begins with the execution of a contract of sale dated 26 November 1980 whereby Chia Holdings (Australia) Pty. Ltd. ("Chia Holdings") agreed to purchase and S. Hoffnung &Co. Limited agreed to sell the Land for the sum of $800,000.00.

3. The schedule to the contract specified the date for completion to be "within sixty (60) days from the date hereof" however the completion date was subsequently varied to "on or before 10 March 1981". On 24 December 1980 the memorandum of transfer (in Form W) which was required to effect the conveyance of the Land was executed.

4. By an agreement in writing dated 27 January 1981 and made between Howard Chia Investments Pty. Limited ("Chia Investments"), Stella Chia and Mur Nominees Pty. Limited ("Mur Nominees"), Chia Investments agreed to sell and Mur Nominees agreed to buy one ordinary share of $1.00 in the capital of Chia Holdings ("the Sale Share") for the sum of $255,632.00 upon the terms and conditions therein set out. Clause 3 of the agreement provided for completion of the sale and purchase of the Sale Share on 2 March 1981 but cl. 4 specified certain matters which were required to be completed on or before the completion date and provided that "completion of the sale and purchase of the Sale Share shall not take place until after all those matters have been attended to". Paragraph (5) of cl. 4 required the vendor, Chia Investments, to deliver to the purchaser, Mur Nominees, a duly executed transfer in favour of Mur Nominees and share certificate in respect of the issued 9 B class 2% non-cumulative redeemable preference shares in the capital of the company, Chia Holdings. Those shares were, at that time, registered in the name of Carlos Remedios of 68 Pitt Street, Sydney and no consideration passed between Mur Nominees and Chia Investments in respect of those shares.

5. The agreement made on 27 January 1981 also recorded a variation in the completion date provided for in the contract for the sale of the Land, the completion date having been extended from 26 January 1981 to "no later than 10 March 1981 on condition that the deposit be increased to $300,000.00; such deposit to be released to the vendor S. Hoffnung &Co. Limited, and that on completion a further $9,205 be paid to the said S. Hoffnung &Co. Limited; ...".

6. On 27 February 1981 both the contract for sale of the Land and the agreement relating to the Sale Share and the 9 B class shares were completed. These shares represented the whole of the issued capital of Chia Holdings.

7. On 3 March 1981 Chia Holdings changed its name to K.L.D.E. Pty. Limited ("K.L.D.E.") and on 14 July 1981 Mur Nominees changed its name to Murdoch Pty. Ltd. ("Murdoch").

8. On 23 July 1981 the members of K.L.D.E. resolved that the company be wound up voluntarily and appointed a liquidator. On 29 July 1981 the liquidator resolved to distribute the assets of K.L.D.E. (including the Land) to its sole shareholder, Murdoch, subject to payment of the liabilities of K.L.D.E. Subsequently, on 3 August 1981, the liquidator executed a memorandum of transfer of the Land in favour of Murdoch. The consideration for the transfer was expressed to be "a resolution of the Liquidator of KLDE Pty. Limited (in voluntary liquidation) passed the 29th day of July 1981".

9. The memorandum and statutory declaration in support were presented to the Commissioner of Stamp Duties and on or about 28 August 1981 the Commissioner assessed stamp duty of $75,400.00 on the memorandum. It is against this assessment that K.L.D.E. appealed and required the Commissioner to state and sign a case pursuant to s. 24 of the Act. The case stated raised three questions for determination by the Full Court of the Supreme Court of Queensland, namely:

"(a) Is the Memorandum of Transfer ... chargeable with duty, under the Stamp Act 1894-1982 in accordance with the ... assessment of the COMMISSIONER OF STAMP DUTIES;

(b) If not, with what amount of duty (if any) is it chargeable;

(c) How should the costs of and incidental to the stating of this case and of the hearing thereof be borne and paid."

The Full Court by majority (Macrossan and Shepherdson JJ., Andrews S.P.J. dissenting) answered the questions in favour of the Commissioner. The essential issue in the case is whether the memorandum of transfer is exempt from ad valorem duty by reason of the operation of s. 49C(2) of the Act, on the basis that Murdoch Pty. Ltd. and K.L.D.E. Pty. Limited were "associated companies" within the meaning of s. 49C(6)(b) of the Act for the relevant period so as to satisfy the circumstances prescribed in pars (iii) or (iv) of s. 49C(2)(c). There is no dispute between the parties as to the amount of duty payable under s. 49B of the Act in the event that the memorandum does not fall within s. 49C(2).

10. The relevant provisions of s. 49C(2) of the Act are as follows:

"49C. Relief from conveyance and transfer duty upon company reconstruction or amalgamation.

...

(2) Where it is shown to the satisfaction of the Commissioner that -

(a) the effect of an instrument produced to him is to convey, transfer or assign a beneficial interest in property from one company (hereinafter in this section called the 'transferor') to another company (hereinafter in this section called the 'transferee'); and

(b) the companies concerned are associated companies; and

(c) ... the companies have been associated companies -

(iii)For the whole of the time during which, ... the property or a substantial interest therein has been owned by the transferor; or

(iv) for the whole of the time since the property came into the ownership of the transferor or of a company associated with the transferor by way of a conveyance, transfer or assignment in respect of which there has been paid stamp duty prescribed under the heading 'Conveyance or Transfer' in the First Schedule to this Act or such duty reduced as prescribed by subsection (3) of this section; and

(d) ...

stamp duty prescribed under the heading 'Conveyance or Transfer' in the First Schedule to this Act shall not be chargeable on the instrument."

Subsection 49C(6) provides, so far as it is material, that for the purposes of s. 49C:

"(b) a company shall be taken to be associated with another company if it is shown that -

(i) the one company is beneficial owner (directly or indirectly) of 90 per centum at least of the issued share capital of the other company;"

Counsel for the appellant concentrated his attention on the conditions which sub-par. (c)(iii) requires to be satisfied. Indeed, we do not understand him to have attributed a different operation, in the circumstances of this case, to sub-par. (c)(iv). He advanced two alternative bases in support of the submission that the transaction fell within par. 49C(2)(c)(iii) and was therefore entitled to an exemption of duty. First, it was submitted that the property came into the ownership of K.L.D.E., and the companies, K.L.D.E. and Murdoch, became associated, simultaneously on 27 February 1981, being the date upon which the transfer from S. Hoffnung &Co. to K.L.D.E. and the transfer of the share capital of K.L.D.E. to Murdoch were completed. Secondly, in the alternative, the appellant submitted that "owned" in par. (iii) means legally owned (and legal ownership in the Land did not pass before 13 March 1981 when the memorandum was lodged in the Titles Office whereas beneficial ownership in the shares passed at the latest on 27 February 1981) or it means either legally or beneficially owned in the sense that if the companies have been associated for the whole of the time during which the property was owned either beneficially or legally by K.L.D.E., the exception is satisfied.

11. The majority of the Full Court held that for the purposes of s. 49C(2) of the Act the Land came into the ownership of K.L.D.E. on 26 November 1980, being the date of execution of the contract of sale. On the other hand, Andrews S.P.J. (dissenting) found that ownership in the Land passed to K.L.D.E. on 27 February 1981.

12. Section 49C is directed to providing relief from the duty which would ordinarily be payable on a conveyance, transfer or assignment of property when that conveyance, transfer or assignment takes place in the course of a scheme for company reconstruction or amalgamation. Subsection (1) enumerates the criteria which such a scheme must exhibit and, if the Commissioner is so satisfied, duty is not chargeable on any instrument made for or in connexion with the transfer of the shares acquired by the transferee company in the existing company. Subsection (2), on the other hand, relieves from duty where there is a conveyance, transfer or assignment of a beneficial interest in property from one company to another in similar circumstances. However, specific provision is made, in par. (c), to deal with the situation where the companies concerned have become associated and do not exhibit all of the criteria set out in sub-s. (1) or do not consist of one such company (which is not a "transferee company" under s. 49C(1)(a)) being first incorporated where the capital is owned as to not less than 90 per cent by the other company. Clearly the facts of the present case, if they fall within the section at all, fall only within par. (c) and accordingly it was incumbent upon the appellant to satisfy the Commissioner that Murdoch and K.L.D.E. were associated companies for the whole of the time during which the Land was owned by K.L.D.E. (sub-par. (iii)) or since the Land came into the ownership of K.L.D.E. by way of a duly stamped conveyance, transfer or assignment (sub-par. (iv)). Counsel were agreed that relief would lie if either sub-pars (c)(iii) or (c)(iv) were satisfied.

13. The task of construing the relevant legislation has been made more difficult because the provisions in question lack perspicuity. In Escoigne Properties Ltd. v. I.R.C. (1958) AC 549, a case concerning the construction of comparable provisions of the United Kingdom legislation, Lord Denning said that to arrive at the true meaning of the exempting provision "you should know the circumstances with reference to which the words were used: and what was the object, appearing from those circumstances, which Parliament had in view" (at p. 565). Unfortunately, so far as the provisions here in question are concerned, that object has not been clearly expressed and like the members of the Full Court we have encountered considerable difficulty in ascertaining the intendment of, and relationship between, sub-pars (c)(iii) and (c)(iv). We acknowledge with appreciation the thoughtful endeavours of the members of the Full Court to elucidate the intended distinction between the two subparagraphs. We do not find it necessary to cover that ground again in any detail. We would merely make two observations. First, there is no reason to construe "owned" in sub-par. (c)(iii) differently from "ownership" in sub-par. (c)(iv). Secondly, sub-par. (c)(iii) takes the fact of ownership as an existing reality and is not concerned with the means by which that ownership was acquired nor with the question whether the means employed have or have not attracted the payment of stamp duty. Circumstances may occur to give the provisions of sub-par. (c)(iv) a different operation from that provided by sub-par. (c)(iii). However, that has not happened in the present case.

14. The first question to be considered, then, is as to the kind of ownership that is addressed by the two subparagraphs. In our opinion, the words "owned" and "ownership" refer to beneficial ownership. The scheme of the Act is such that the liability to duty arises upon the making of a contract or agreement for the sale of any legal or equitable estate or interest and duty is charged thereon as if it were an actual conveyance on sale of the estate, interest or property contracted or agreed to be sold: see s. 54(1) and (6). Section 49C(2) proceeds on a similar basis: par. (a) requires the Commissioner to be satisfied that the effect of an instrument produced to him is to convey, transfer or assign a beneficial interest in property from one company to another. The expression "Conveyance or Transfer" is defined in s. 49(1) for the purposes of the Act to include "every instrument and every decree or order of a Court whereby property or any estate or interest in property is transferred to or vested in any person". The express inclusion of the word "assign" in association with "beneficial interest" in s. 49C(2)(a) points to the conclusion that the legislature intended the words "owned" and "ownership" in sub-pars (c)(iii) and (c)(iv) to be construed widely. Furthermore, there is no reason to suppose that the legislature intended its use of the word "owned" in each of sub-pars (c)(ii) and (c)(iii) to convey different meanings and yet it would be absurd if the concept of ownership in sub-par. (c)(ii) did not extend to beneficial ownership. Paragraph 6(b) of s. 49C prescribes the circumstances in which companies shall be taken to be associated companies and expressly looks to beneficial ownership (direct or indirect) of at least 90 per centum of the share capital of the company. It will also be seen that by fixing upon the date of acquisition of a beneficial interest in property as a basis for securing an exemption from duty, s. 49C(2) operates harmoniously with s. 54(1).

15. It now becomes necessary to determine from what date the Land or a substantial interest therein was owned by K.L.D.E. The answer to that question will be assisted by an identification of the rights which K.L.D.E. acquired on 26 November 1980 when it entered into the contract of sale and paid the deposit of $80,000. It is common ground that it was an unconditional contract. Clause 14 of the contract of sale provided that "THE PROPERTY SHALL BE AT THE RISK OF THE PURCHASER FROM THE DATE HEREOF and the Vendor whilst continuing in possession will use the said land and all improvements and items of property with reasonable care". Clause 27 provided for the deposit to be placed with a trustee company for the benefit of the vendor pending completion subject always to the purchaser's right of refund if the sale was not completed for any reason other than default of the purchaser. The contract was otherwise silent as to the passing of interests in the Land and the moneys.

16. In Lysaght v. Edwards (1876) 2 ChD 499 Sir George Jessel M.R. said at p 506:

"... The moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien on the estate for the security of that purchase money, and a right to retain possession of the estate until the purchase-money is paid, in the absence of express contract as to the time of delivering possession."

17. This statement of principle demonstrates the application of the time honoured maxim that equity regards as done that which ought to be done. In Haque v. Haque (No. 2) (1965) 114 CLR 98, at p 124, Kitto J. explained the operation of the principle in this way:

"In each instance the deceased had the legal title to the land at his death, and subject to the contract he held it for his own benefit absolutely. But by the operation of well-known equitable principles the making of the contract had to an extent transferred the beneficial ownership to the purchaser. The deceased was not a mere trustee for the purchaser, but his position was something between that of a mere trustee and a mortgagee. He could exercise for his own benefit such rights with regard to the land as were consistent with the contractual rights of the purchaser until payment of the purchase money in full, and until that event he had a lien or charge for the unpaid purchase money: see Lysaght v. Edwards."

Where the contract is capable of being specifically performed the vendor, pending payment of the balance of purchase price, is not a bare trustee (he has been described as a trustee sub modo: see Chang v. Registrar of Titles (1976) 137 CLR 177, at pp 184-185). However, so far as the interest of the purchaser is concerned, this Court was clearly of the view in Reg. v. Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 that:

"a purchaser who can by way of specific performance compel a transfer of shares under a contract is a beneficial owner of the shares." (at p. 31 per Gibbs, Stephen, Mason, Aickin and Wilson JJ.).

More recently in Legione v. Hateley (1983) 57 ALJR 292 Gibbs C.J. and Murphy J. said, at p 298:

"There is no doubt that when the purchasers executed the contract and paid the deposit the beneficial ownership of the land passed to them subject to the payment of the purchase money."

Mason and Deane JJ. on the other hand took a slightly different view saying at pp. 307-308:

"In this Court it has been said that the

purchaser's equitable interest under a contract of sale is commensurate only with her ability to obtain specific performance of the contract (Brown v. Heffer (1967) 116 CLR 344, at p 349). ... A competing view - one which has much to

commend it - is that the purchaser's equitable interest under a contract for sale is commensurate, not with her ability to obtain specific performance in the strict or primary sense, but with her ability to protect her interest under the contract by injunction or otherwise (Tailby v. Official Receiver (1888), 13 App Cas 523, at pp 546-549; Redman v. Permanent Trustee Co. of New South Wales Ltd. (1916), 22 CLR 84, at p 96; Hoysted v. Federal Commissioner of Taxation (1920), 27 CLR 400, at p 423; Pakenham Upper Fruit Co. Ltd. v. Crosby (1924), 35 C.L.R. 386, at pp. 396-399; Jordan, Chapters on Equity (6th ed., 1945), p. 52, n. (e)). ... However, for the purposes of this case we are

prepared to accept the correctness of the statement in Brown v. Heffer."

These differences of view do not detract from the force of the statement that a purchaser under a contract for the sale of land which is specifically enforceable has a beneficial interest in the land, albeit one conditional on, amongst other things, payment of the price.

18. As we have said, it is common ground that the contract for sale of the Land was an unconditional contract. It was capable of specific performance. It then follows from our discussion of the authorities that on the execution of that contract on 26 November 1980 the beneficial ownership of the Land passed to K.L.D.E. It also follows, in our opinion, that in terms of s. 49C(2)(c)(iii) K.L.D.E. owned the property on and from that date. To qualify for an exemption from duty under sub-par. (c)(iii) the appellant must therefore establish that as from 26 November 1980 and for the whole of the time during which K.L.D.E. owned the Land K.L.D.E. and Murdoch were "associated companies" as defined in par. (6)(b), that is to say that Murdoch beneficially owned (directly or indirectly) at least 90 per centum of the issued share capital of K.L.D.E. As the agreement relating to the shares was not made until 27 January 1981 the appellant cannot possibly fulfil the requirements of sub-par. (c)(iii). Indeed, counsel for the appellant virtually conceded, having regard to the position with respect to the preference shares, that the earliest date on which the companies became associated was 27 February 1981.

19. In the light of this conclusion it is unnecessary to deal with a further argument advanced for the Commissioner based on certain sections of the Property Law Act 1974-1978 (Q.). It was submitted that the agreement for sale of the shares, reciting as it did the variation in the contract of sale, that is, the increase in the deposit to $300,000.00, had the effect of converting the contract of sale into an instalment contract within the meaning of the Property Law Act: see s. 71(2)(a)(i). K.L.D.E., having paid $300,000.00 being an amount equal to one-third of the purchase price or more, became entitled pursuant to s. 75 to serve a notice upon the vendor requiring it to convey the land to K.L.D.E. conditionally upon its execution of a mortgage in favour of the vendor. Although no such notice was given, counsel for the Commissioner sought to rely on the purchaser's rights under s. 75 to demonstrate that K.L.D.E. acquired a substantial interest in the Land prior to the execution of the agreement relating to the shares. The conferring of these statutory rights upon a purchaser under the Property Law Act does not preclude a conclusion that in equity the relevant beneficial ownership passed on 26 November 1980.

20. Having reached the conclusion in relation to sub-par. (c)(iii) that exemption from duty is not available to the appellant, in our opinion the same conclusion must follow in relation to sub-par. (c)(iv). The property came into the ownership of K.L.D.E. by way of a conveyance, transfer or assignment executed on 26 November 1980. The acquisition of ownership did not occur, as the appellant submitted, upon completion of the contract on 27 February 1981, nor on 13 March 1981 when the transfer was lodged at the Titles Office for registration. The use of the word "assignment" in the phrase "conveyance, transfer or assignment" in sub-par. (c)(iv) supports the view that it is proper to have regard to the time when the equitable estate passes to the purchaser. The contract of sale effected an assignment of the beneficial interest in the property and this was an assignment in respect of which the prescribed duty was paid.

21. Accordingly we would dismiss the appeal.

BRENNAN J. The joint judgment sets out the facts in the stated case and the relevant provisions of s.49C(2) of the Stamp Act 1894-1980 (Q.). I need not repeat them. I describe the companies involved by abbreviations of their present names. The first question in this case is whether KLDE owned "the property or a substantial interest therein" before KLDE and Murdoch became associated companies. Unless that question is answered in the negative, the condition specified in sub-par.(iii) of s.49C(2)(c) is not satisfied and the memorandum of transfer of the land executed by the liquidator of KLDE in favour of Murdoch is not exempt from ad valorem conveyance duty under that subparagraph. The second question is whether, after KLDE and Murdoch became associated companies, "the property came into the ownership" of KLDE "by way of a conveyance, transfer or assignment in respect of which there has been paid stamp duty prescribed under the heading 'Conveyance or Transfer'". Unless that question is answered in the affirmative, the condition specified in sub-par.(iv) of s.49C(2)(c) is not satisfied and the memorandum of transfer is not exempt from ad valorem conveyance duty under that subparagraph.

2. To answer the questions, it is necessary to identify the property mentioned in sub-pars.(iii) and (iv) of par.(c) of s.49C(2) and to fix the time when Murdoch and KLDE became associated companies for the purpose of s.49C(2)(c). The "property" mentioned in sub-pars.(iii) and (iv) of par.(c) is the property referred to in par.(a) of s.49C(2). As par.(a) applies to conveyances, transfers and assignments of any property, the property mentioned in sub-pars.(iii) and (iv) of par.(c) may be legal or equitable, real or personal, vested or contingent, conditional or unconditional. It is the property a beneficial interest in which is conveyed, transferred or assigned by the particular instrument the liability of which to conveyance duty is in issue. In the present case the "property" is the land the subject of the memorandum of transfer executed by the liquidator of KLDE. The "property" is not a conditional interest in the land, but ownership of the land. Or, as the land was land under the Real Property Act 1861-1981 (Q.), the property may be identified more precisely as the whole of the interest which was capable of transfer by a registered proprietor of an estate in fee simple in the land described in the relevant certificate of title.

3. KLDE had acquired the land pursuant to a contract of sale entered into on 26 November 1980, but later amended. Completion of the amended contract occurred on 27 February 1981. Presumably - though the stated case does not say - a registrable memorandum of transfer of the land to KLDE was then delivered to it together with the relevant certificate of title. Presumably the memorandum of transfer to KLDE was registered at a later date. Endorsements appearing on a photocopy of the instrument suggest that it was lodged in the office of the Registrar of Titles on 13 March 1982 and the transfer was registered by endorsement on the relevant certificate of title on 30 March 1982.

4. Murdoch had entered into a contract on 27 January 1981 to purchase one ordinary share in KLDE. On completion of that contract on 27 February 1981 it acquired that share and nine B class 2% non-cumulative redeemable preference shares, the whole of the issued capital of KLDE. The contract had given it no interest in the redeemable preference shares though the contract had required the vendor of the ordinary share to deliver a duly executed transfer of those shares on completion. The rights attached to the respective shares are not known. When Murdoch acquired the whole of the issued capital in KLDE on completion of the share sale contract on 27 February 1981, Murdoch and KLDE became associated companies. That is the relevant time for determining whether the respective events specified in sub-pars.(iii) and (iv) had or had not occurred.

The first question : when did KLDE own the property or a substantial interest therein?

5. When KLDE entered into the contract for the purchase of the property on 26 November 1980, it acquired an equitable interest in it. That interest arose out of the contract and it was commensurate with the benefit of so much of the vendor's obligation to perform it as a court of equity would enforce: see McWilliam v. McWilliams Wines Pty.Ltd. (1964) 114 CLR 656, at p 660; Brown v. Heffer (1967) 116 CLR 344, at p 349; Redman v. Permanent Trustee Co. of New South Wales Ltd. (1916) 22 CLR 84, at p 96. What was the measure of KLDE's interest in the property when it entered into the contract to purchase it? Was the interest then acquired by KLDE the interest of an owner of the land or a "substantial" interest in the land?

6. It seems to me to be inaccurate to describe as ownership the interest which a purchaser acquires on entering into a contract for the sale of land before he is entitled to call for a conveyance of what he has contracted to purchase. Until the vendor is under an obligation to convey the title which the purchaser has contracted to purchase the purchaser cannot himself show title to the property. He owns an interest in the property but he does not own the property. When a purchaser, on payment of the price becomes entitled to insist upon conveyance of title to the property he has contracted to purchase, he may rightly be described as the owner of it: see R v. Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13, at p 31. If the vendor then refuses or declines to convey or is disabled from doing so, the purchaser is entitled to a vesting order (Chang v. Registrar of Titles (1976) 137 CLR 177, at p 185). Until the purchaser is entitled to insist upon conveyance of title to the property which he has contracted to purchase, it may be right to describe the vendor as a trustee sub modo of the property and the purchaser as a beneficial owner of it sub modo. Though the purchaser has sometimes been described as a beneficial owner once the contract is unconditional, the effect of an unconditional contract for the sale of land is more accurately stated by Kitto J. as transferring "to an extent" the beneficial ownership of the land (Haque v. Haque (No.2) (1965) 114 CLR 98, at p 124). For the purpose of sub-par.(iii), the extent of the interest transferred on entering into the contract is important. For that purpose, I would hold the interest of the purchaser to fall short of ownership unless and until a purchaser is entitled to insist upon a conveyance of title to the property. KLDE did not become entitled under the contract to insist upon delivery of a registrable memorandum of transfer and the relevant certificate of title until 27 February 1981 when it paid the balance of the purchase price on completion.

7. Though the interest which KLDE acquired when it entered into the contract to purchase the land was not the interest of an owner, was it nevertheless a "substantial interest" for the purposes of sub-par.(iii)? Substantiality involves a comparison of the interest in question with the property in which it is held. When the property is the freehold land described in a certificate of title under the Real Property Act, both the nature of the interest acquired and the proportion of the land over or in respect of which the interest is acquired must be considered. Here, KLDE's interest upon entering into the contract was potentially the interest of a full beneficial owner of the whole of the land. Such an interest has sometimes been described as beneficial ownership subject to the payment of the purchase money (see, for example, Legione v. Hateley (1983) 57 ALJR 292, at p 298; Lysaght v. Edwards (1876) 2 ChD 499, at p 506). Although I prefer Kitto J.'s description, it is clear that the interest of a purchaser on entering into an unconditional contract for the sale of land is substantial. KLDE acquired that substantial interest on 26 November 1980. This conclusion makes it unnecessary to consider the operation and effect of the Property Law Act 1974-1978 (Q.), upon which the respondent relied as entitling KLDE to call for a transfer of the land to it before the purchase price was paid subject to a mortgage to secure the unpaid purchase price. As KLDE held a substantial interest in the land at all times after 26 November 1980, the memorandum of transfer of the land from KLDE to Murdoch cannot gain exemption from duty under sub-par.(iii).

8. The second question : when did KLDE come into ownership of the land by way of a conveyance in respect of which conveyance duty was paid?

9. Subparagraph (iv) requires that an instrument - "a conveyance, transfer or assignment" - be the means by which the ownership of property therein mentioned became vested in the transferor company. The subparagraph does not apply to the acquisition of the rights of an owner where an instrument of the kind referred to was not the means by which those rights were acquired. Where ownership is acquired by means of an instrument of that kind, it is necessary to enquire when that ownership is acquired.

10. Conveyances, transfers and assignments are species of assurances of property. According to the nature of the property in the particular case, the assurance may be a conveyance, a transfer or an assignment. The head of charge referred to in sub-par.(iv), "Conveyance or Transfer", comprehends assignments "Upon a sale or otherwise" in the First Schedule of the Stamp Act. An instrument which transfers or vests property in pursuance of a contract of sale of that property is a conveyance, transfer or assignment according to the nature of the property it transfers or vests, but the antecedent contract of sale is not a conveyance, transfer or assignment. An antecedent contract of sale under which the vendor is obliged to deliver an assurance of the property sold is not an instrument falling within the definition of "Conveyance or Transfer" in s.49 of the Stamp Act, which includes instruments whereby property or any estate or interest in property is transferred to or vested in any person. That was decided in Stamps Commissioners v. Queensland Meat Export Company, Limited (1917) AC 624. Lord Sumner said in delivering the judgment of the Judicial Committee, at p 628:

" The distinction between an agreement to sell and a sale, between an agreement to convey and a conveyance, is fundamental and familiar."

(And cf. Currey v. Federal Building Society (1929) 42 CLR 421 and Commissioner of Stamp Duties (N.S.W.) v. Yeend (1929) 43 CLR 235).

11. The argument that a specifically enforceable contract or agreement for the sale of land is in truth a conveyance was rejected by Lord Esher M.R. in Commissioners of Inland Revenue v. Angus (1889) 23 QBD 579, at p 591:

" And it is said that, when an agreement is such that equity will grant specific performance of it, it is to be considered as a conveyance in equity, or an 'equitable conveyance.' If that were true, it would be an equitable conveyance of a legal property or a legal right. But let us consider what the doctrine of specific performance is. If the instrument is a 'conveyance' in itself, why do you want a decree for specific performance? If the instrument has conveyed the property to the purchaser, he does not require specific performance of an agreement with reference to his own property which has been already conveyed to him. The fact that the instrument is one of which equity will decree specific performance, fixes it at once as an 'agreement,' and not as a 'conveyance.' It would be a contradiction of terms to say that that which requires a decree for specific performance is in itself a 'conveyance' which has conveyed the property to the purchaser. If there has been a 'conveyance' of the property, you do not require specific performance. If property sold is conveyed by an instrument to the purchaser, and after that conveyance the vendor keeps it, the purchaser's remedy would not be by way of specific performance, but, if the property be personal property, by an action of trover; or, if it be real property, by an action of ejectment. In my opinion, therefore, however clear it may be that an instrument is an agreement of which a Court of Equity would instantly decree specific performance, if it were not performed by the vendor, such an instrument is not a 'conveyance on sale' within the meaning of the Act, but is only an 'agreement'."

Citing Angus' Case, Starke J. in New Britain Plantations Ltd. v. Acting Treasurer (N.G.) (1936) 55 CLR 127, at p 134, distinguished between a contract of sale and a conveyance or transfer on sale. Following the Queensland Meat Export Company Case, s.54 of the Act was amended to bring within its terms some agreements that had theretofore escaped ad valorem conveyance duty. A contract or agreement for the sale of any estate or interest in any property in Queensland is now brought to charge at the same rate as a conveyance or transfer on sale - not because it is a conveyance, transfer or assignment but because s.54(1)(b) brings the contract or agreement to charge "as if it were an actual conveyance on sale of the estate, interest, or property contracted or agreed to be sold".

12. As the instruments to which sub-par.(iv) refers do not include contracts for the sale of property where the property sold is intended to be vested or transferred by a subsequent assurance, an interest acquired by means of such a contract alone, however extensive that interest may be, does not constitute the "ownership" of which sub-par.(iv) speaks. Ownership acquired by means of a conveyance, transfer or assignment - whether executed and delivered pursuant to a contract of sale of property or not - is the ownership to which sub-par.(iv) relates. Provided a conveyance, transfer or assignment is the means by which ownership of the material property is transferred or vested, it is immaterial that, ad valorem conveyance duty having been paid on the contract, the conveyance is not itself chargeable by reason of s.54(6). A conveyance, transfer or assignment to which s.54(6) applies is an instrument "in respect of which" ad valorem conveyance duty has been paid and which satisfies the requirements of sub-par.(iv).

13. As the contract pursuant to which KLDE first acquired a beneficial interest in the land was not a "conveyance, transfer or assignment", KLDE's beneficial interest prior to completion of the contract was not "ownership" of the subject property for the purpose of sub-par.(iv). The ownership which KLDE acquired "by way of conveyance, transfer or assignment" was the interest vested in it by delivery to it by the vendor of a registrable memorandum of transfer. Though the interest thus acquired was equitable, it was the interest of a full beneficial owner who was entitled to registration of the transfer and to the legal title which that would confer (s.48 of the Real Property Act of 1877 (Q.); Barry v. Heider (1914) 19 CLR 197, at pp 206-208; Breskvar v. Wall (1971) 126 CLR 376, at pp 388,393,398-399,410-411,413). It was the whole of the interest capable of transfer by the registered proprietor in performance of its obligations under the contract of sale. That interest was not acquired before the contract of sale was completed.

14. Did completion of the contract of sale of land occur before or after completion of the share sale contract? Settlement of the contract of sale of land and settlement of the share sale contract occurred on the same day, but the stated case is silent as to the sequence of those events. The case was stated pursuant to s.24 of the Stamp Act which, as Fullagar J. noted in Francis v. Commissioner of Stamp Duties (N.S.W.) (1954) 91 CLR 368, at p 400, is prima facie "an inappropriate and defective procedure" where the validity or correctness of an assessment of stamp duty depends on a question of fact. Unlike the provisions there under consideration, s.24 of the Stamp Act confers no power on the court to draw inferences from the facts stated in the case, nor any power to receive evidence to contradict, modify or supplement the facts stated in the case. Section 23 empowers the Commissioner to make the necessary enquiries, and the only course for the court to follow when the question stated in the case turns on a question of fact is send the case back for statement by the Commissioner: Mack v. Commissioner of Stamp Duties (N.S.W.) (1920) 28 CLR 373, at p 381. The second question - the question which determines the exemption of the relevant instrument to duty under sub-par.(iv) - turns upon a question of fact, namely, whether Murdoch had acquired the issued share capital of KLDE before KLDE completed the contract for the purchase of the subject land and received a registrable memorandum of transfer. The case does not contain the facts which answer that question. It is not possible then to give an unqualified answer to the first question in the stated case.

15. The first question set forth in the stated case should be answered thus: the memorandum of transfer referred to in par.16 of the case is chargeable with duty under the Stamp Act 1894-1980 in accordance with the assessment of the Commissioner of Stamp Duties unless -

(a) the registrable memorandum of transfer to Murdoch from its vendor was delivered to Murdoch in completion of the contract of sale of the land after the delivery to KLDE of the transfers and share scrip of the one ordinary and nine redeemable preference shares in Murdoch in completion of the share sale contract, and

(b) at the time of the delivery of the memorandum of transfer, ad valorem stamp duty at the rate prescribed by par.(2) of the heading "Conveyance or Transfer" had been paid either on that memorandum of transfer or on the contract of sale in completion of which it was delivered.

As the facts referred to in (a) and (b) do not appear in the stated case, I would allow the appeal and order that the case be sent back to the Commissioner of Stamp Duties to state whether or not the facts referred to in (a) and (b) occurred.

Orders

Appeal dismissed with costs.