Macquarie Industrial Management Limited v Chief Commissioner of State Revenue (Rd)

[2003] NSWADTAP 17

Appeal Panel - Internal

CITATION:	Macquarie Industrial Management Limited -v- Chief Commissioner of State Revenue (RD) [2003] NSWADTAP 17
PARTIES:	APPELLANT Macqaurie Industrial Management Limited as Respopnsible Entity of Macqaurie Industrial Trust RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	039012
HEARING DATES:	23/05/2003
SUBMISSIONS CLOSED:	05/23/2003
DATE OF DECISION:	06/16/2003
DECISION UNDER APPEAL:	Macqaurie Industrial Management Limited v. Chief Commissioner of State Revenue [2003] NSWADT 12
BEFORE:	Hogan A - ADCJ (Deputy President); Block J - Judicial Member; Bennett C - Member
CATCHWORDS:	statutory interpretation
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	016029
DATE OF DECISION UNDER APPEAL:	06/16/2003
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Stamp Act 1894 (QLD) Stamp Duties (Amendment) Act 1990 Stamp Duties (Miscellaneous Amendments) Act 1990 Stamp Duties Act 1920
CASES CITED:	Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
REPRESENTATION:	APPELLANT M Richmiond, barrister RESPONDENT I Mescher, barrister
ORDERS:	1. Appeal upheld.; 2. Objection decision of the Chief Commissioner set aside.; 3. Objection by Appellant upheld.; 4. That the Respondent refund the amount of duty paid by the Appellant, namely $117,616.80.

1 This is an appeal on a question of law, pursuant to Part 1 of Chapter 7 of the Administrative Decisions Tribunal Act 1997 (“the ADT Act”).

2 The decision appealed from was the review by the Tribunal at first instance, (“the ADT”), of a decision that had been made by the Respondent in the course of the administration of the Stamp Duties Act 1920 (New South Wales), (“the NSWSD Act”).

3 The proceedings at first instance, and this appeal, have been conducted on the basis of an agreed statement of facts, which are set out in full in the reasons of the ADT. We do not consider it necessary to repeat all those facts in detail. Those essential to this appeal may be succinctly stated.

4 On 14 October 1993 the applicant and the trustee of the trust of which the applicant was manager, (“the Appellant”), executed a charge over the assets of the trust and a mortgage over real property in New South Wales, (“the Prime Mortgage”), in favour of Westpac Banking Corporation, (“Westpac”). The Prime Mortgage secured all moneys owing on any account, present or future, by the Appellant to Westpac.

5 The Prime Mortgage was executed in New South Wales, and duty assessed by reference to the amount advanced under it was duly paid in New South Wales.

6 Further advances were made, secured by mortgages over real property in New South Wales, which were stamped as collateral to the Prime Mortgage, and the Prime Mortgage was upstamped accordingly.

7 In February 1995 the Appellant entered into a mortgage in favour of Westpac over real property in Queensland. (“the Queensland Mortgage”). The Queensland Mortgage was stamped as the prime document in Queensland, and duty was paid in Queensland under Section 70 of the Stamp Act 1894 (Qld), (“the Queensland Act”). The Prime Mortgage was upstamped, credit being allowed for the duty paid in Queensland, under s.84B of the NSWSD Act.

8 A number of further advances were made, and the Prime Mortgage and the Queensland Mortgage were each upstamped in NSW and Queensland respectively.

9 By 6 March 2000 the total advances made by Westpac to the Appellant amounted to $140,000,000. Further duty of $101,079.25 had been paid to the Queensland Office of State Revenue in respect of the Queensland Mortgage. However, the Queensland Mortgage had not, at that date, been actually stamped to reflect payment of that duty.

10 On 6 March 2000 the Prime Mortgage was lodged for stamping in NSW, and a claim was made for a credit of the $101,079.25 that had been paid in Queensland, under s.84B of the NSWSD Act.

11 On 10 April 2000 the Respondent advised the Appellant that no credit was available under s.84B for the duty paid in Queensland and issued an assessment for $117,616.80 (“the assessment”).

12 On 7 June 2000 the Queensland mortgage was stamped for the duty of $101,079.35 that had previously been paid.

13 On 8 August 2000 the Appellant lodged an objection, which was disallowed by the Respondent on 29 October 2001.

14 On 20 December 2001 the Appellant lodged an application for review by the Administrative Decisions Tribunal.

15 On 20 January 2003 the ADT affirmed the objection decision by the Respondent.

16 Section 84B provides as follows, so far as is relevant:

“(1) If a loan security or other instrument of security for money has been duly stamped under this Act or under the law of another State or a Territory (in this subsection called the stamped instrument ) and there is another or other instruments which are security, wholly or partly, for the same money, the duty chargeable in respect of each of those other loan securities is to be reduced:
(a) if each such other instrument is security for the whole of the same money, by the amount of duty (including duty paid or payable under the law of another State or a Territory) that was paid or is payable on the stamped instrument.”
17 In applying those provisions to the circumstances of this case, it is the Prime Mortgage that comes within the description “another or other instruments.” They are security for the same money as the Queensland Mortgage, and it is the Queensland Mortgage that must constitute “the stamped instrument”.

18 The Respondent contended that relief was not available under s.84B for two reasons:

(a) the Queensland Mortgage had not been “duly stamped” when the Prime Mortgage was submitted for upstamping; and

(b) s.84B only applies where the “stamped instrument” is in existence at the time of first execution of the loan security for which relief is sought.

19 The Tribunal at first instance upheld the first of these contentions, and rejected the second. The Respondent relied upon both in this appeal. We reject them both.

20 The expression "duly stamped" is defined in s.3(1) of the NSWSDA to mean (unless the context or subject matter otherwise indicates or requires) "stamped in accordance with this Act and the Regulations". It is clear that s.84B contemplates that the "stamped instrument" may be stamped in a jurisdiction other than New South Wales. The context therefore indicates that the definition in s.3(1) does not apply. The words have their ordinary meaning, namely, "stamped with the duty applicable to the instrument in accordance with the law of the jurisdiction in which it is stamped".

21 The opening words of s.84B(1) refer to an instrument which “ has been duly stamped", a phrase in the past tense. If the ordinary grammatical meaning of those words governs the provision then the first contention of the Respondent would be obviously correct, if the time at which the description must be applied is the time when the NSW instrument is lodged for stamping.

22 There is considerable force in the submission that the time could just as well be the time at which the objection is made, or even, arguably, at the time that the document comes to be actually stamped. In this case the Queensland Mortgage had in fact been duly stamped at both those times. That would be enough to dispose of the Respondent’s first contention in this particular case. However, we feel that we should not decide the matter on that basis, but should address the issue of principle.

23 The words, “has been duly stamped” are not the only relevant words in the section. Subs. (a) contains the phrases “duty paid or payable” and “ that was paid or is payable on the stamped instrument".

24 It is basic to the operation of stamp duty legislation that an instrument does not become stamped until after the duty has been paid. Subs. (a) contemplates a reduction by reference to a sum which has not yet been paid, but is payable. It must therefore contemplate that the credit may be given even though the instrument has not yet been stamped.

25 In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 McHugh, Gummow, Kirby and Hayne JJ held,

“…… the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with a literal or grammatical meaning."
26 The history of the legislation makes it clear that the reference to duty which is payable, as well as to that which has been paid, was not made incautiously.

27 Section 84B was substituted by the Stamp Duties (Amendment) Act 1990, (Act No. 45 of 1990) Sch 1(8). The purpose of the substitution was expressed in the Explanatory Note to the Bill as follows:

"The section in its substituted form removes the distinction between a primary loan security and a collateral loan security and leaves to the lodging party the choice of nominating which loan security out of a group of loan securities which are security for the same money is to be duly stamped as a loan security. A credit is allowed for duty payable on the other related instruments to the extent to which duty (including inter-State duty) has been paid on the duly stamped instrument, subject to a minimum duty of $10."
28 The section was then further amended by the Stamp Duties (Miscellaneous Amendments) Act 1990 , Act No. 95 of 1990. Among the objects of the Bill set out in the Explanatory Note were
“(s) to extend the foreign credit provisions relating to the standing of loan securities dutiable in a number of jurisdictions;

(t) to provide for a credit to be available on collateral loan securities in respect of duty paid on the same money;”

29 So far as is relevant, Sch. 1(30) to Act No. 95 0f 1990 provided:
“Section 84B (Collateral security):
After “duty paid” wherever occurring, insert “or payable”

After “was paid” wherever occurring, insert “or is payable”.

30 The explanatory note to Sch. 1(30) read
“A collateral loan security which secures the same money as a prime loan security on which stamp duty has been paid is entitled to a credit in respect of the loan security duty paid on the prime loan security. Problems may arise where the prime loan security is liable to duty in a number of jurisdictions and, at the time of stamping in New South Wales, duty is yet to be paid in another jurisdiction. At present, a credit is not allowable for duty payable but not yet paid. Items (30) (a) and (b) make amendments which will allow the granting of such a credit."
31 The intention of the legislature could hardly be made more clear. In our view the description of “the stamped instrument" must be read in such a way as to give full meaning to the words, "paid or payable". In this case the duty had in fact been paid in Queensland when the Prime Mortgage was lodged in New South Wales for upstamping. But the Appellant would have been entitled to the credit even if it had not been paid, but was merely payable according to the law in Queensland.

32 The same reasoning is sufficient to dispose of the Respondent's second contention. In addition, no reasons were advanced to us during argument to show that the reasoning of the Tribunal at first instance on this point was wrong, and we agree with it.

33 S.84B itself contains no express limitation which requires the “stamped instrument” to be in existence at the time of first execution of the instrument in respect of which relief is sought. Sections 4 and 38 operate according to their terms without the requirement that any such words should be read into S.84B. So far from there being a need to import such a limitation into the section in order to achieve the legislative intention, we are of the opinion that to do so would frustrate the clear will of the legislature, which was to grant relief in such a way as to leave taxpayers free to nominate which of a group of securities (all of which secure repayment of the same moneys) is to be the primary instrument for stamping.

34 We would uphold the appeal.

35 The Appellant asked that, if the appeal were upheld, an order should be made for costs, on the ground that the Respondent changed his attitude to the construction of the section during the course of the transaction. Undoubtedly he did so, but we do not regard that as being such a special circumstance as calls for the making of an order for costs.