Trust Company of Australia Limited v Commissioner of State Revenue B44/2002

[2002] HCATrans 615

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B44 of 2002

B e t w e e n -

TRUST COMPANY OF AUSTRALIA LIMITED

Appellant

and

COMMISSIONER OF STATE REVENUE

Respondent

GLEESON CJ

GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 5 DECEMBER 2002, AT 10.22 AM

Copyright in the High Court of Australia

MR D.G. RUSSELL, QC:   May it please the Court, I appear with my learned friend, MR M.L. ROBERTSON, for the appellant.  (instructed by Creagh Weightman Lawyers)

Your Honours, there is a technical matter relating to the nomenclature of the proceedings and our learned friends have an application to make in relation to that.  It may be convenient for that to be dealt with first.

MR K.D. DORNEY, QC:   If it please the Court, I appear with my learned junior, MR D. MARKS, for the respondent.  (instructed by Crown Solicitor for the State of Queensland)

The application is as set out in the first three paragraphs of our ‑ ‑ ‑

GLEESON CJ:   Is that opposed, Mr Russell?

MR RUSSELL:   No, your Honour.

GLEESON CJ:   Yes, we will make that order.

MR DORNEY:   Yes, thank you, your Honour.

GLEESON CJ:   Yes, Mr Russell.

MR RUSSELL:   If the Court pleases, this is an appeal against an assessment of stamp duty brought by special leave.

KIRBY J:   On your theory of the appeal, would it make the supervening legislation unnecessary?

MR RUSSELL:   On our view of the matter, the 2000 amending legislation was unnecessary, yes, your Honour, except that the 2000 legislation, the Revenue Laws Amendment Act, did two things.  It dealt with the situation where there was a conveyance, as here, to a custodian rather than to a responsible entity of a managed investment scheme.  It also dealt with the situation where there was a transfer between a responsible entity and a custodian.  That matter of course was a problem which remained and had to be resolved by legislation.  So there was a need to deal with what I might compendiously call the introduction of the managed investment scheme legislation.

KIRBY J:   Yes, thank you.

MR RUSSELL:   The instruments which were assessed to duty and the assessments appear at page 143 of the appeal book.

KIRBY J:   Page 43, is it?

MR RUSSELL:   Page 143, your Honours.  The proceeding in Queensland is still the old case stated procedure.  So these documents are annexures to the Commissioner’s case stated.  The Court will see that there is assessed a contract of sale to which the parties are said to be Cromwell Property Securities Limited, which I will call Cromwell in my submissions, Riverfront Developments, which is referred to generally as the vendor.

GUMMOW J:   Did you say page 143?

MR RUSSELL:   Yes, your Honour.

GUMMOW J:   Where is the contract?

MR RUSSELL:   The contract commences at page 46, your Honour.

GLEESON CJ:   I thought you were telling us where the dutiable instruments were.

MR RUSSELL:   I am sorry, your Honour, the assessment.  The dutiable instrument is appendix D to the case stated.  It is at page 137 of the appeal book. 

KIRBY J:   How is your client described in that?

MR RUSSELL:   As the transferee, your Honour.  Item 5, Trust Company of Australia Limited.

KIRBY J:   Who prepared that document, your client’s solicitor?

MR RUSSELL:   Certainly my client’s solicitor signed it.  In the normal course of conveyancing practice in Queensland, it would be prepared by the transferee’s solicitors and submitted to the transferor for execution.  As your Honours can see, there is a slight ‑ ‑ ‑

KIRBY J:   Why would they not have described themselves as “Purchaser (Custodian)”, if that is their theory of their status?

MR RUSSELL:   The description, in fact, is the description prescribed by the Land Title Act in Queensland and it is “Transferor” and “Transferee”.  So you do not have a choice about that.

CALLINAN J:   I think the form is in a schedule to the Act, is it not?

MR RUSSELL:   Yes, your Honour.

CALLINAN J:   This just follows the form, does it not?

MR RUSSELL:   That is right, your Honour, but the issue is not that ‑ ‑ ‑

GLEESON CJ:   I am not quite sure that what you said was accurate.  On page 137 at line 35 your client’s name appears under a heading “DETAILS OF TRANSFEREE/PURCHASER”.  Is the word “PURCHASER” crossed out?  I am looking at page 137 of the appeal book, line 35.

MR RUSSELL:   Yes, I see, I am sorry, your Honour.  Yes, “DETAILS OF TRANSFEREE/PURCHASER”.

GLEESON CJ:   Does it follow that the duty of instrument describes your client as transferee/purchaser?  That is slightly different from what you said a moment ago.

MR RUSSELL:   I am sorry, I was referring to the previous page, your Honour, where your Honour will see that there is a description of parties as transferor and transferee.

HAYNE J:   Well, can I inject a practical note, Mr Russell.  My appeal book is entirely deficient.  I do not have, as far as I can see, a large number of pages.  How this has occurred I do not know, but how I am to follow your argument with a deficient appeal book I do not know.  I do not have 137.  I do not think I have the odd pages for the balance of the book.

KIRBY J:   Perhaps Mr Robertson might make the supreme sacrifice.

MR RUSSELL:   Yes, I think perhaps if we might ‑ ‑ ‑

GLEESON CJ:   I actually have two appeal books.

MR RUSSELL:   Your Honour, there was an appeal book and an amended appeal book and the distinction between the one page difference that your Honour has been addressing is the difference between the original appeal book and the amended appeal book.

HAYNE J:   I now have the file copy, which is complete but not helpful.

MR RUSSELL:    I am sorry, your Honour.

KIRBY J:   On the point raised by the Chief Justice concerning transferee/purchaser, there is a reference there to a trust company and Cromwell.

MR RUSSELL:   Well, Cromwell is simply given as the address for services and notices, your Honour.

GLEESON CJ:   Yes, it appears it is care of Cromwell.

MR RUSSELL:   Yes.  And Cromwell was the responsible entity under the managed investment schemes and Trust Company of Australia Limited, the appellant, was the custodian.  As your Honours can see, the only parties who executed the transfer on page 136 in the original appeal book and 137 in the amended appeal book, were the transferor and the solicitor for the transferee.  That appears at the bottom of the page.

KIRBY J:   Where is the transferee named – I see, yes, at paragraph 5.

MR RUSSELL:   Yes, your Honour.  At about line 25 on the page.

KIRBY J:   Yes.

MR RUSSELL:   The assessment appears at page 142 for those of your Honours who are working from the original appeal book and 143 for those of you who are working from the amended appeal book.  The Court will see that two instruments are assessed in relation to this transaction.  The first is the contract of sale with parties stated to be “Cromwell Property Securities Pty Ltd” and “Riverfront Developments Pty Ltd”, and in the case of the transfer of real property the parties are said to be “Trustee Company of Australia Ltd”, “Cromwell Property Securities Pty Ltd” and “Riverfront Developments Pty Ltd”.  That seems to us, with respect, to be wrong.  The parties to the contract of sale, to which I take your Honours, were the three companies and the parties to the transfer were the two, not that we suggest anything flows from that.

KIRBY J:   I missed that last statement.

MR RUSSELL:   Not that we suggest this is crucial to the outcome, but the description of the parties is wrong.  The three companies were the parties to the contract of sale and only two parties, Cromwell and Riverfront Developments, were parties to the transfer.

KIRBY J:   Is that just a clerical mistake within the Office of State Revenue?

MR RUSSELL:   We assume so, your Honour.

KIRBY J:   Just going back to that point that you have just raised concerning page 137, “DETAILS OF TRANSFEREE/PURCHASER”.  Do you make any remarks on that?  I do not remember reading that in the ‑ ‑ ‑

MR RUSSELL:   We certainly have not made any submission in relation to that and it would not – as we apprehend the position, if we were not the purchaser as a matter of law for the purposes of section 54(6), so describing ourselves on a subsequent instrument would not avoid us incurring liability to ‑ ‑ ‑

GLEESON CJ:   It just indicates that an earlier answer you gave was incorrect.  You were asked how your client was described in the dutiable instrument and you answered that question “Transferee”.  Your client was in fact described as “Transferee/Purchaser” for whatever consequence that has.

MR RUSSELL:   Yes.  Your Honour, I am sorry, I was referring to page 136, in which it was described as transferee only.  There is an inconsistent description, I must concede that.  But it does not help us, I am afraid. 

GLEESON CJ:   In relation to this form of contract, Mr Russell, it appears at page 46 – this is what, a law stationer’s form of contract? 

MR RUSSELL:   Yes, your Honour.  As your Honour can see at the top of page 46, your Honour will see that it is a printed form, first edition, that has been: 

Adopted by the Real Estate Institute of Queensland Limited and approved by the Queensland Law Society ‑ ‑ ‑

GLEESON CJ:   Well, then, may I ask you about page 47.  It has a special provision for reference to a custodian.  I am personally not familiar with standard printed forms of contract of sale that have provision for a reference to a custodian.  Is this some special form that is used in relation to special types of sale, or do all standard forms of contract of sale of land, at least, for commercial land, buildings and units in Queensland, have provision for a reference to a custodian?  And if so, why? 

MR RUSSELL:   At the bottom of the page your Honour will see what appears to be a word processor reference on the bottom left‑hand corner.  The implication for that may be that the front pages – if one deals with pages 60 and following, your Honours will see that that is only a printed form which ‑ ‑ ‑

KIRBY J:   Do the solicitors have this as a template in their word processors? 

MR RUSSELL:   That would appear, given the word processor reference, your Honour, to be true of pages 46 to 49 ‑ ‑ ‑

GUMMOW J:   Page 50 is obviously a spoke annexure and it contains a definition of “custodian”. 

MR RUSSELL:   And if your Honour looks at the word processor reference at the bottom of that page, your Honour will see it is part of the same series as the word processor references that appear at the bottom of pages 46 to 49.  There are, of course, no such references on pages 60 to 71. 

GLEESON CJ:   Is this word “custodian” a term of art?

MR RUSSELL:   Its terms so far as we can see, your Honour, comes from the Managed Investments Act.

GLEESON CJ:   Does that mean that then to understand this contract you need to read it in the light of the Managed Investments Act?  I am going to give up trying to help you after this, Mr Russell.

MR RUSSELL:   Your Honour, one certainly needs, in our respectful submission, to understand the context created by the Managed Investments Act.  That is dealt with in the judgment of the court below and we do not think either our learned friends or ourselves draw anything in relation to the Managed Investments Act other than what is said below.

KIRBY J:   It is just, peaking for myself, you have the great pleasure and joy of being very familiar with this legislation.  It is a joy that I have so far spared myself.  If it is therefore relevant to understand the contract in light of the legislation, then I would appreciate at least a thumbnail sketch of how the legislation ‑ ‑ ‑

MR RUSSELL:   The Court will find a summary of that in the judgment of Justice Helman.  Perhaps at first there is the recognition by Justice Thomas at page 152 of the appeal book originally lodged, page 153 of the amended appeal book:

In relation to the acquisition of a property they simply followed the rather complicated requirements of the Corporations Law and the Managed Investments Act 1988 (Commonwealth) which are designed to protect members of the public in relation to managed investment schemes.  Those provisions require the appointment of a “custodian” to hold the relevant property.

KIRBY J:   What was the Commonwealth’s head of power in this, the ‑ ‑ ‑

MR RUSSELL:   The Corporations Law one imagines, your Honour. Why that was the case in relation to Cromwell is set out at pages 13 to 17 of the appeal book which contain its dealer’s licence under the Securities Industry Act. The Court will see that on page 14 condition 10 of the licence imposes a condition on the licensee, which was Cromwell, and:

not to hold scheme property of a registered scheme but most appoint another person to hold scheme property unless –

and then there are a series of conditions.

GLEESON CJ:   Does the legislation to which you are referring refer to a purchaser as well as a custodian?

MR RUSSELL:   The Managed Investments Act?

GLEESON CJ:   Yes.

MR RUSSELL:   I do not believe so, your Honour.

GLEESON CJ:   It might be worth a check because it might be thought that if that concept is referred to in that legislation, it might have the same meaning as it has in the revenue legislation.

MR RUSSELL:   Yes, except, your Honour, that the exemption that we are seeking does not use the term “custodian” at all.  The term “custodian” was brought into the legislation by the 2000 amendment.

GLEESON CJ:   I understand that, but I still would be interested to know whether the managed investments legislation refers to a purchaser and distinguishes between a purchaser and a custodian.

MR RUSSELL:   Yes, certainly.

KIRBY J:   This is just a case where the Commonwealth came barging in with its own legislation and used terms that did not fit neatly with the State legislation.

MR RUSSELL:   The Commonwealth no doubt felt, your Honour, that there were eight State Stamp Duties Acts, and for it to have to deal with each of those and draft its legislation accordingly was a bit difficult.  It may well be too that the Commonwealth had in mind that this is a problem that on no view could arise in New South Wales.  On no view it would arise in Victoria because Victoria does not advance the taxing point.  It could only arise in those States where the term “purchaser” is used which, as we pointed out in our submissions, in corresponding provisions are Queensland, Western Australia and South Australia.  So it may well have been that those members of the Commonwealth Parliament from Queensland, Western Australia and South Australia did not think to point the matter out when they were considering the legislation.

KIRBY J:   They may never have heard of it.

MR RUSSELL:   Yes.  It is perhaps appropriate to take your Honours then to the objection which was lodged.  That is page 144 of the original appeal book, 145 of the amended appeal book.  Grounds 1, 2, 3 and 4 are not relied on here.  The issue really is the issue raised by paragraph 7.  Paragraphs 4,5 and 6 simply set out what we say were the reasons why the Commissioner should have been satisfied that the conditions for eligibility of section 54(6) were met.

KIRBY J:   You said 4, 5 and 6.  I thought 4 was ‑ ‑ ‑

MR RUSSELL:   Sorry, 5, 6 and 7, your Honour.  The Commissioner’s disallowance of the objection is the following document starting at page 146 of the original appeal book, 147 of the amended appeal book.  The decisions in relation to grounds 5, 6 and 7 are set out on page 149 of the original appeal book and page 150 of the amended appeal book.  Your Honours will see at line 22 that ground 5 is said to be “Agreed”, at line 27 that ground 6 is said to be “Agreed”.  At ground 7 it is said:

I disagree for the reasons given above.

Those reasons we apprehend are those contained in the paragraph beginning at line 10 on the same page:

In relation to your comments regarding 54(6) of the Act, the Contract of Sale was not assessed until 27 March 2000 and accordingly section 54 of the Act could not have been applied to the Transfer as at 3 December 1999.

So the argument that is there put is that the contract of sale was stamped after the transfer and therefore, since the entitlement to the exemption is that you have paid duty on the contract of sale, we do not qualify.  Our learned friends, as I understand it, do not rely on that any more and the grounds as put in the case stated were different.

GLEESON CJ:   Could I ask you a question about a matter we were talking about a little earlier, and that is the contract on page 46 line 10. It says:

This contract is made between the Vendor and the Purchaser.

The vendor, on the following page, is identified as Riverfront Developments.  The purchaser is identified as Cromwell Property Securities and there is, as we noted earlier, a separate reference to a custodian. When it says the contract is made between the vendor and the purchaser, should we understand that to mean not the custodian?

MR RUSSELL:   No, your Honour, the statement is factually wrong.  All three parties executed the contract.  I will take your Honour to the execution page.  It is common ground between us that obligations were created in respect of all three of them.

GLEESON CJ:   What are the obligations undertaken by the custodian?

MR RUSSELL:   We have set them out in our outline, but the key one to which we refer, of course, is the obligation to take a conveyance.

GLEESON CJ:   I am just trying to understand what appears on page 46 at line 10.  It looks as though it may be relevant to your argument.

MR RUSSELL:   It can only be said to be an error, your Honour.  It does not describe the facts; it is plainly the document which was executed by all three of the parties.  It creates both obligations and entitlements in favour of each of them.

GUMMOW J:   You have to go to page 58, special clause 11.1.

MR RUSSELL:   Yes, your Honour.  The role that the custodian is to play is set out in clause 11.  As your Honour Justice Gummow has pointed out, there is an acknowledgement first:

that the Custodian is a party to this Contract –

And then:

for the purpose of accepting a transfer of the Property in its capacity as Custodian . . . pursuant to a Custody Agreement ‑ ‑ ‑

GLEESON CJ:   Well, it acknowledges:

the Custodian is a party to this Contract solely for –

a particular purpose.

MR RUSSELL:   Yes, your Honour.

GLEESON CJ:   Does that mean that you have to read what appears on page 46 line 10 together with what appears on page 58 clause 11.1?

MR RUSSELL:   Yes, your Honour.

KIRBY J:   Presumably the statement on 46 long preceded the federal legislation, was relating to the contract in the normal sense between the vendor and purchaser and then along comes the federal legislation, in goes the custodian and then they have this clause 11.1 at page 58 to try and somehow sort it out.

MR RUSSELL:   Yes, plainly there should have been a consequential change on page 46.

GLEESON CJ:   That is why I asked you the questions I was asking you earlier about whether this is a standard form of contract.  If you look at page 47, it is a form of contract that contemplates the presence of a custodian.

MR RUSSELL:   Your Honour, my instructions are that the insertion of the expression “custodian” was, as I said, inserted by the parties actually drawing this contract as their own addition to a standard form contract.

GLEESON CJ:   Where would we find the original contract?

MR RUSSELL:   The original document?

GLEESON CJ:   Yes, the exhibit, the one that is copied on page 46.

MR RUSSELL:   It would be an annexure to the case stated, your Honour.

GUMMOW J:   And not otherwise, I suspect.

MR RUSSELL:   I am sorry, your Honour?

GUMMOW J:   It would simply be a photocopy annexed to the case stated, will it not?  It probably will not be the original.

MR RUSSELL:   There would be – my instructions ‑ ‑ ‑

GUMMOW J:   Because of the limited evidentiary…..in these stamp duty cases.

MR RUSSELL:   Yes, that is right, your Honour, one is confronted with the facts as stated in the case stated.

GLEESON CJ:   Let me ask you another question.  What do the words “FIRST EDITION” which appear in parentheses on line 3 of page 46 mean, first edition of what?

MR RUSSELL:   It was, as I said, your Honour, a standard form produced in this way which my instructing solicitors - which was varied for the purposes of this particular contract and that - it is obviously in those circumstances appropriate to use it if there had been no variation to the form approved by the REIQ.  Given that there was a variation, those words should have been removed.

GLEESON CJ:   So you are telling us that what appears on page 47 in the box with “B” in it and alongside it is something that was an amendment of a standard form of contract?

MR RUSSELL:   Yes, your Honour.

HAYNE J:   Insofar as we search for what is standard, do we find that at page 60 and following of the appeal book?

MR RUSSELL:   Yes, your Honour, and your Honour will see again that these are said to be the “STANDARD COMMERCIAL CONDITIONS”, “(FIRST EDITION)”, and this is a printed form that relates back to the documents at the beginning.

HAYNE J:   The standard form which I observe is marked “(FIRST EDITION)”.

MR RUSSELL:   Yes, your Honour.  I am instructed that by now, the fourth edition has been reached, your Honours.

KIRBY J:   I feel we have looked at these Queensland provisions in some earlier case.  Do you know what that case was?  I am sure I have had the great pleasure of wandering aimless like a cloud through one of the editions of the standard form.

HAYNE J:   Moneywood.

KIRBY J:   But could you tell me just as a matter of practicality, do the solicitors have it as a – because nowadays solicitors I think very rarely would - they would not have old-fashioned typewriters that they can type things into actual forms that you buy at the - they would have this as a template in their ‑ ‑ ‑

MR RUSSELL:   Yes, those are my instructions, your Honour, and that that is so appears from the bottom of the page.

KIRBY J:   Yes.

MR RUSSELL:   The Law Society’s practice is to make it available electronically now, your Honour, so that one downloads it from the Law Society and then it becomes your own document.

KIRBY J:   I see, that seems sensible.

MR RUSSELL:   But there has been ‑ ‑ ‑

KIRBY J:   So the custodian just gets tacked on, but no one rethought the whole instrument for the purpose of making it in a different – or even describing it in a different way. 

MR RUSSELL:   Well, in the first instance, it could well be said not to be appropriate to describe it as the “First Edition” and “Adopted by the Real Estate Institute of Queensland” if you have made any alterations at all, as opposed to just filling in the gaps.  But there is no suggestion of an attempt to mislead here, because the fact that the alterations are made is clearly stated in the instrument itself. 

KIRBY J:   Anyway, you make the point that in the end this case is not going to turn on how the parties describe themselves.  That would be a real bootstraps argument.  It is a matter of what they are in law. 

MR RUSSELL:   In fact, we would say that that is our learned friend’s argument, in effect, that one looks at ‑ ‑ ‑

KIRBY J:   Well, they put it as their second argument.  I suppose they say, if you were the purchaser, you would have at least described yourself as the purchaser.  There is an evidentiary or forensic argument you have to overcome, I suppose. 

MR RUSSELL:   And there is a specific requirement, in addition, in section 54(6A), that our learned friends rely on. 

GLEESON CJ:   Well, you say Trust Company of Australia Limited was the purchaser. 

MR RUSSELL:   Yes. 

GLEESON CJ:   What do you say Cromwell Property Securities Limited was? 

MR RUSSELL:   It was the person that funded the purchase and that was going to ‑ ‑ ‑

GLEESON CJ:   Provided the purchase money. 

MR RUSSELL:   Yes, provided the purchase money.  We say that in the context of section 54(6) the reference to a purchaser is a reference to the transferee named in the contract.  We say, in this case, it was Trust Company of Australia Limited.  There was never any prospect that anyone else would be the transferee. 

KIRBY J:   Is it a fair comment – which certainly the respondent makes ‑ that if you now assert that you were the purchaser, that prudent solicitors would have so described you in paragraph E, and somehow adjusted the form and put in brackets “custodian” under the Federal legislation?

MR RUSSELL:   We noted that in our learned friend’s submissions.  As we apprehended the position, it would not help us very much, if we were not in fact the purchaser – to call ourselves such would not change the stamp duty position. 

KIRBY J:   But it would remove one of their two main arguments. 

MR RUSSELL:   There is no doubt we would do it now, your Honour. 

KIRBY J:   That is true.  We can always be wise after events. 

HAYNE J:   Now, the contract contains at Annexure “A” a very large number of amendments to the printed form appearing at page 60. 

MR RUSSELL:   That is right, your Honour. 

HAYNE J:   Has someone undertaken the exercise of preparing a consolidated document that will show what is struck out and what is inserted by application of Annexure “A”? 

MR RUSSELL:   Not for presentation to the Court today ‑ ‑ ‑

HAYNE J:   Sometime, I would have thought, that might be a useful task to undertake so that we might the more readily follow the effect of the instrument which is brought to duty. 

MR RUSSELL:   There is no difficulty, your Honour, in our highlighting ‑ I have in fact done it to my own copy – each time where reference is made where one of the plaintiff’s ‑ ‑ ‑

HAYNE J:   It is a mechanical task that will take a deal of time.  It would be of assistance if that mechanical task were undertaken not by me, not by my associates, but by the parties.

MR RUSSELL:   Yes, we will certainly do that, your Honour, and we will let your Honours have it within a week.

CALLINAN J:   Mr Russell, most of the changes seem to be designed to simply put “custodian” as an alternative to “purchaser”, is that right?

MR RUSSELL:   That is so, your Honour.

HAYNE J:   Well, is it? 

MR RUSSELL:   It is certainly true in relation to paragraph (b) ‑ ‑ ‑

CALLINAN J:   Paragraph (b) at page 50.

MR RUSSELL:   ‑ ‑ ‑ starting at page 50, putting in “or the Custodian” as an alternative to “Purchaser”.

CALLINAN J:   And (c) on page 51.

MR RUSSELL:   Yes, (c).

HAYNE J:   But (d), upon which I would have thought something might possibly turn, is not the insertion of an alternative.

MR RUSSELL:   That is true, your Honour, and indeed we do rely on that because that is the clause that has the result that it was only the custodian that might receive the transfer and your Honour will see there is a substitution for the custodian caused by paragraph (j) down at line 37 on the same page.

KIRBY J:   The tax is upon the instrument, not upon the realities, is that a fair proposition?

MR RUSSELL:   Yes, your Honour.  This is a tax.  Your Honour will be familiar with the situation in New South Wales under section 41(1) and 41(4) of the former Stamp Duties Act where if an agreement for sale is brought into existence it is dutiable.  A subsequent conveyance is not provided one satisfies the Commissioner one has paid the duty on the agreement for sale.  As our learned friend’s submission points out, as indeed does our own, the New South Wales provision differed from the Queensland provision in that the New South Wales provision simply referred to a conveyance made in conformity with the agreement whereas the Queensland provision talks about a transfer made to the purchaser. 

Effectively what our learned friends are saying is if this was in New South Wales we would not have a problem but because this was in Queensland and because there is a specific requirement for the conveyance to be made to the purchaser before the exemption applies ‑ ‑ ‑

KIRBY J:   Do you underpin that submission with the reference to the legislation which was specifically enacted to overcome the Queensland problem in a case such as this by reason of the federal legislation?

MR RUSSELL:   Yes, your Honour.

GLEESON CJ:   Mr Russell, on page 61, clause 4(b) that you were recently asked about, there is a reference to note 9.  Do you see that?

MR RUSSELL:   Yes, your Honour.

GLEESON CJ:   Where would we find note 9?

MR RUSSELL:   On page 69 of the original appeal book and page 70 of the amended appeal book.

GLEESON CJ:   Thank you.

MR RUSSELL:   It does not seem to us that it addresses the matter at all.

GLEESON CJ:   Thank you.

GUMMOW J:   It is also important to look perhaps at special condition 10.1, line 5:

for the purpose of completing the sale and ensuring that the –

custodian –

obtains a good and valid title.

That is the effect of the special amendments.

MR RUSSELL:   I am sorry, your Honour, what page?

GUMMOW J:   Special condition – standard condition, 10.1.

MR RUSSELL:   I am sorry, your Honour said “special”.

GUMMOW J:   Standard condition, 10.1, line 5.

MR RUSSELL:   Yes, and that is required to be read as “custodian”.

GUMMOW J:   As “custodian” instead of “purchaser”.

MR RUSSELL:   Yes.

GUMMOW J:   Standard condition 24 is dealing with:

MERGER

Despite completion and despite the registration of the transfer in favour of the –

custodian, and in general, et cetera.

MR RUSSELL:   That is paragraph (j) of the special conditions ‑ ‑ ‑

GUMMOW J:   Yes, that is right.

MR RUSSELL:   The position, as we submit it, is that the contract required that there would be a conveyance to the appellant and the appellant only.  The appellant did not stand in that position as a subsequent nominee of a purchaser but in its own right.  It not only had the right; as we apprehended it, it would have been a necessary party to any proceedings to obtain specific performance of a contract that the vendor refused to complete and, in our respectful submission, in the context of section 54(6) and indeed in any event that was sufficient, given that it was always the intended transferee to make it the purchaser.

KIRBY J:   These are arguments of merits and as far as I am concerned you do not really have to persuade me on sort of the general view of merits and the legislation has addressed that now, but what we ultimately have to do, it seems, is to look at the statutory language and see whether or not what has occurred fits comfortably within the statutory language and the purpose of Parliament.

MR RUSSELL:   Yes, that is right, your Honour.

KIRBY J:   So, some of those matters you have just mentioned are softening us up but ultimately you are going to have to come to grips with the ‑ ‑ ‑

MR RUSSELL:   Yes, I certainly intended to do that, your Honour.  We would say that the answer really has to be found in the statutory history of section 54(6).  If it is convenient to the Court, I am happy to deal with that aspect of the matter now.

GLEESON CJ:   Yes, please.

MR RUSSELL:   Your Honours, most of the material on which we rely in this regard is to be found in the annexures to our submissions in reply.  Section 54 is a much amended section and at Appendix 1 to our submissions in reply your Honours will see it in its original form with the exception of subsection (6) which was on the following page and which I have here to hand up to the Court for completeness but which does not affect this aspect of the matter at all.

KIRBY J:   I am sorry, I missed the significance of that.

MR RUSSELL:   Subsection – the original section 54 from the 1894 Act.

KIRBY J:   That is the page numbered 5102?

MR RUSSELL:   Yes, your Honour.

KIRBY J:   Yes.

MR RUSSELL:   It in fact went over on to page 5103.  There was a subsection (6) which we have here but which does not affect the matter in any way at all.

KIRBY J:   We had better have a look at it though.

MR RUSSELL:   Yes, certainly, your Honour.

KIRBY J:   You can just slip it into the submission.

MR RUSSELL:   It related to the entitlement to a refund of duty if the contract was rescinded.  The Court will see that the provision with which we are now concerned was originally subsection (3):

Where duty has been duly paid in conformity with the foregoing provisions, the conveyance or transfer made to the purchaser or sub‑purchaser, or any other person on his behalf or by his direction, shall not be chargeable with any duty, and the Commissioners, upon application, either shall denote the payment of the ad valorem duty upon the conveyance or transfer, or shall transfer the ad valorem duty thereto upon production of the contract or agreement, or contracts or agreements, duly stamped.

The foregoing provisions were two.  There is section 54(1) which, whilst in different form, expresses the same concept as the existing 54(1), and there is section 54(2) which operated in a completely different way.  That was to deal with the issue of sub‑sales.  All of the subsequent amendments to section 54, in our respectful submission, come back to the legislature’s attempt to grapple with sub‑sales.

The approach taken in section 54(2) was to say that a sub‑sale was dutiable either with nominal duty if it was for less than the original purchase price or for the additional value if it was for more than the original purchase price.

GLEESON CJ:   That is a very generous taxing regime.

MR RUSSELL:   It was repealed in 1918, your Honour.  It did not last very long.

GLEESON CJ:   It would produce the consequence that if A sold Blackacre to B for £100 and before B took title B sold Blackacre to C for £90, there was no ad valorem duty on the second transaction.

MR RUSSELL:   That is right, your Honour.  As I say, it did not last long.  Just so your Honours have the history of it, this provision is modelled on section 59 of the 1891 Act in the United Kingdom, which was introduced to deal with the decision in Inland Revenue Commissioners v Angus.

GUMMOW J:   What is the reference for that?

MR RUSSELL:   I am handing up to your Honours Sergeant and Sims which sets out the history of it, but the specific reference to Inland Revenue Commissioners v Angus is (1889) 23 QBD 579. That is dealt with at page 143 of the ninth edition of Sergeant and Sims.

KIRBY J:   Is a sub‑sale anything more than the sale on by the original purchaser to another purchaser?  Is it a term of art or is that all that is involved?

MR RUSSELL:   No, it is a sale that occurs between the contract and the conveyance.  So that A is entitled to a conveyance under the contract.  A sells to B his right to receive the conveyance.

GLEESON CJ:   What section 54(2) deals with is, to use a neutral term, an “on sale” before the original purchaser has taken title.

MR RUSSELL:   Yes, that is right, your Honour.  I am sorry, your Honour.  It has been referred to as a sub‑sale in the literature, which is why I used that term.  Your Honours will see in the extract from Sergeant and Sims two pages earlier – so on page 142 your Honours will see the text of section 59 of the English Stamp Act as it was when the ninth edition was published in 1988.  Your Honours will see that the generosity of the revenue, to which your Honour the Chief Justice referred, in fact remains in the United Kingdom in the original ‑ in section 59(2) but, as I explained to your Honours, does not here.

KIRBY J:   What page is that, Mr Russell?

MR RUSSELL:   That is on page 142, your Honour.  About point 6 your Honours will see a section 59:

Certain contracts to be chargeable as conveyances on sale.

GLEESON CJ:   How, if at all, did the original legislation in Queensland deal with the problem that is perhaps closer to the problem of which we are concerned, that is, where B acquires contracts to purchase Blackacre from A with the intention that A will convey it to B’s nominee, B’s child, if you like?

MR RUSSELL:   If then, and indeed now, A was acting as agent at the time the contract was entered into for the intended conveyee, then the conveyance is entitled to nominal duty.  If the ‑ ‑ ‑

GLEESON CJ:   But what if I go to you and I say, “I’d like to buy your house for my daughter.  I will pay you $X and I want you to contract that you will upon completion transfer the property to my daughter.”  How did the original legislation deal with it and how does it deal with it now?

MR RUSSELL:   The original legislation, section 54(3) in its original format, would have given an exemption because words which no longer appear in it were still there.  Your Honour will see that it originally said:

(3)  Where duty has been duly paid in conformity with the foregoing provisions, the conveyance or transfer made to the purchaser or sub-purchaser, or any other person on his behalf or by his direction, shall not be chargeable with any duty ‑ ‑ ‑

GLEESON CJ:   It would be the words “by his direction” that would pick up the case I put to you.

MR RUSSELL:   Yes.  Because the issue arises of the general statutory intent, it is probably relevant at this point to take your Honours to page 143 of Sergeant and Sims where the scope and purpose of the section is set out and the apprehension of the learned authors that the Act was passed following Inland Revenue Commissioners v Angus - effectively there had been a contract of sale for goodwill of a business.  The Commissioners had assessed it to duty as a conveyance on sale, they had lost.  So the amendment made an agreement for sale of property that was not followed by a conveyance dutiable for the first time, imposed conveyance duty on it and to avoid double taxation, we would say, contained the provision in subsection (3) of the English Act and originally subsection (3) in the Queensland Act that exempted a conveyance in conformity with the contract. 

For completeness, we have also given your Honours as Appendix 2, but I do not need to take your Honours to it, the text of section 59 of the English Act shortly after it was enacted.  That is Appendix 2 to our reply.  It is from a text by Piper, “Stamp Laws and Duties”, and your Honours will see that on page 195 of that appendix at about point 4 there is the same conclusion that section 59 was enacted to deal with the problems created by Inland Revenue Commissioners v Angus.  The Queensland Act was first substantially amended in relation to these provisions in 1918.  We have given your Honours in Appendix 4 the amendments made to section 54 of the Act. 

KIRBY J:   Is that the page that is 8966?

MR RUSSELL:   No, 8553, your Honour.  I have got – sorry, 8966, yes, your Honour.

GLEESON CJ:   That is Appendix 6?

MR RUSSELL:   That is the legislation as it was amended, your Honour ‑ ‑ ‑

GLEESON CJ:   That is Appendix 6, is that right?

MR RUSSELL:   Yes.  Appendix 4 is the amending legislation.  We have given your Honours both the amending legislation and the consolidated version.

GLEESON CJ:   Appendix 4 is of Mr Piper’s book, an English text.

MR RUSSELL:   I am sorry, your Honour, we advised the Court that your Honours will then have it as Appendix 2.

HAYNE J:   A touch of the renumbering again.

GLEESON CJ:   Is it convenient to go to Appendix 6?

MR RUSSELL:   Appendix 6 will give your Honours the provision as ‑ ‑ ‑

KIRBY J:   The consolidated version.

MR RUSSELL:   Yes, the consolidated version.

GLEESON CJ:   Showing the 1918 amendments.

MR RUSSELL:   Yes, showing the Act as amended by 1918.

KIRBY J:   And we do not actually the 1918 amending Act?

GUMMOW J:   Yes, we do.  It is Appendix 4.

MR RUSSELL:   It is Appendix 4, your Honour.

KIRBY J:   No, Appendix 4 is Mr Piper’s….., as the Chief Justice has pointed out.

MR RUSSELL:   Sorry, we advised the Court some days ago that that was an error.  What your Honours have is Appendix 2 should have been Appendix 4.

KIRBY J:   I see.  Appendix 2 is the 1918 amending Act.

MR RUSSELL:   Yes.

KIRBY J:   Which is the section of the amending Act?

MR RUSSELL:   Section 26, your Honour.  Your Honour will see section 54(1) is repealed and a new subsection (1) is inserted, then subsections (2), (4) and (5) of the section are repealed.

GLEESON CJ:   How does the Act as amended in 1918 deal with the example I gave you, that is, I go to you and I say, “I would like to buy your house for my daughter”, so I enter into a contract with you under which you are compelled to convey to her?

MR RUSSELL:   We would say that if the daughter is not a party to the contract and not liable to pay duty, there may be a problem because it is only the purchaser who is liable to pay the duty under the 1918 Act as amended.  The words “to be paid by the purchaser” which appear after the subparagraphs, so at about point 6 on the page – the contract agreement for the sale:

shall be charged with the same ad valorem duty to be paid by the purchaser as if it were an actual conveyance –

and then subsection (3) goes on to say:

Where duty has been duly paid in conformity with the foregoing provisions, the conveyance or transfer made to the purchaser shall not be chargeable with any duty ‑ ‑ ‑

GLEESON CJ:   So we have got rid of other people by his direction?

MR RUSSELL:   Yes.  In addition, your Honour, the question ‑ ‑ ‑

GUMMOW J:   The direction is sort of a direction arising by the exercise of a power to do so conferred in the contract, that may be one thing.  This is a case where the outcome is dictated in final form immediately in the contract itself.

MR RUSSELL:   Yes, but, your Honour, that was not the question that I apprehended his Honour the Chief Justice to have put to me.  I understood the Chief Justice to be asking the question of A buying, intending it to be for his daughter, but his daughter not being mentioned in the contract at all.

GUMMOW J:   I am not sure about that.

MR RUSSELL:   It might be in that situation A’s daughter would take, as we apprehend it, by direction rather than by the contract itself.

GLEESON CJ:   Your answer would be it would all depend on the way the contract dealt with that matter.

MR RUSSELL:   Yes.  If one were a person who took other than pursuant to the contract itself, you would then need to come within the sub‑sale provisions which were recast at the same time.

GLEESON CJ:   But I thought you said in your written submissions that unless there was something to the contrary in the contract a purchaser always has the right to direct a vendor to convey to the purchaser’s nominee. 

MR RUSSELL:   We simply put that forward as a statement of the common law, your Honour, yes.  That can be varied by contract, and was in this case.  It is a case, actually, on my learned friends’ list.  They quote Justice Aickin in Lord v Trippe (1977) 51 ALJR 574 for that proposition. The extracts to which our learned friends referred the Court were at page 582, column 1:

It is a common enough practice in real estate transactions for the contract itself to provide that the transfer is to be made to the purchaser or his nominee, but that gives a power to substitute or nominate a different transferee, not a different contracting party.  The vendor becomes bound ‑ ‑ ‑

GLEESON CJ:   Sorry, where are you reading from?  Page 582?  In the left hand column? 

MR RUSSELL:   Yes, your Honour. 

GLEESON CJ:   Whereabouts on the page? 

MR RUSSELL:   Midway between points B and C, your Honour. 

GLEESON CJ:   Thank you. 

GUMMOW J:   It really comes down to Egmont v Smith, does it not? 

MR RUSSELL:   Yes. 

GLEESON CJ:   The example I gave you is only a particular example of that general principle. 

MR RUSSELL:   Yes, your Honour, but we would ‑ ‑ ‑

GUMMOW J:   The question would arise if, in its initial form, the contract was between A and B, but an obligation to convey to C, does that foreclose any direction to convey to D subsequently made? 

MR RUSSELL:   It would certainly, in our respectful submission, foreclose the possibility of anyone other than the transferee giving the direction.  If the obligation is to transfer to C ‑ ‑ ‑

GUMMOW J:   But you have a tripartite contract:  A, B and C are parties to it. 

MR RUSSELL:   In our respectful submission, the answer to your Honour’s question is either that  ‑ ‑ ‑

GUMMOW J:   You would need an ‑ ‑ ‑

MR RUSSELL:   ‑ ‑ ‑ there is no capacity to vary the transferee, at least, without the consent of all parties, or, if that is wrong, the alternative position would be that it being C who has the right to take the transfer, in your Honour’s question, it would only be C who could direct that its right would be satisfied by someone else taking the conveyance. 

GLEESON CJ:   But how did the Queensland Act, as amended in 1918, deal with a situation to which reference is made on page 582, that is, the ordinary case in which a purchaser under a contract directs the vendor to convey to someone who is not a party to the contract? 

MR RUSSELL:   That is dealt with in section 53(9), if the Court pleases.  I will hand up to the Court – sorry, 53(4). 

KIRBY J:   What year is this Act?

MR RUSSELL:   This is a continuation of Appendix 6.  It is the consolidated version of the Act after amendment in 1988.  It is, in fact - Appendix 6, your Honours will have noted, was page 8966 numbered in the statutory volumes.  This is page 8964.

GLEESON CJ:   It only deals with one specific example of this; it only deals with a case where there has been a contract between the purchaser and the third party.

MR RUSSELL:   Yes.  In other circumstances, as we apprehend it, the intention – there afterwards you paid double duty.  You had to bring yourself within 53(4).  In other words, you had to - a subsequent conveyance if the person is contracted for the purchase of property:

but not having a conveyance . . .  contracts to sell the same to any other person, and the property is in consequence conveyed or transferred directly from the first vendor of the property to a sub‑purchaser, the conveyance or transfer shall, for the purposes of this Act, be deemed to be a conveyance or transfer on sale of the estate or interest in the property of each purchaser, and sub-purchaser –

So we are then in that situation of sub-purchase.

GLEESON CJ:   Read on.

MR RUSSELL:  

shall be chargeable with ad valorem duty in respect of the consideration moving from the purchaser and each such sub‑purchaser respectively.

GLEESON CJ:   So that is what you call double duty?

MR RUSSELL:   No, that is not double duty, your Honour, that is a sub‑sale.  A has sold to B.  Before B takes the conveyance B sells to C.

GLEESON CJ:   Yes.  A sells to B for £100 and B sells to C for £110.  What are the amounts on which ad valorem duty is assessed?

MR RUSSELL:   Both amounts, your Honour.

GLEESON CJ:   You pay a duty on the £100 and you also pay duty on the £110; two lots of duty?

MR RUSSELL:   Yes, and that differs from the regime that applied before 1918 in two respects:  if A sold to B and B sold to C and B sold for less than the first conveyance.  So, in other words, in the first example your Honour the Chief Justice gave me £100 followed by £90, there was only one ad valorem duty paid.  If A sells to B and B sells to C for £110, then ad valorem duty is taken on the £100 and then on £10.  The change made by 1918 was to exact ad valorem duty on both sets of considerations.

GLEESON CJ:   Well, it got rid of the generosity.

MR RUSSELL:   Yes, but, your Honour, in our submission, and this is where we differ from our learned friends, we say that if A under the contract was always going to transfer to C and consideration passes and duty is paid on the contract under which A is to transfer to C, when A transfers to C in accordance with the contract, there is not double duty.

The next changes to the statutory provisions were made in 1926 and the Court has as Appendix 7 the amendments that were made in that year.  I am sorry, I should have while I was dealing with the 1918 legislation taken your Honours to what was said in the Parliament about it.  That appears in Appendix 5.  At page 281 of the Queensland parliamentary debates, the second page of the appendix in the second column at about point 5 Parliament is told:

All agreements for the sale of property will be chargeable with a conveyance duty, which is in accordance with the English law.

It is not a very helpful statement.  If your Honours compare the new section 54(1) with the original section 59(1) in the United Kingdom your Honours will see that in that respect the law was made similar to England but, of course, by repealing subsection (2) a feature of the English legislation was dispensed with.  Parliament was not told about that.  But, more significantly, we would say, Parliament was certainly not told that there was a departure from the broad proposition that if you pay duty on the contract you do not pay a second amount of duty on the conveyance in conformity with the contract.  We say there was never any intention to achieve an outcome which would subject a subsequent conveyance to a second lot of duty.

In our respectful submission, that became even clearer with the 1926 amending Act.  The amendments that were made there start on the first page of Appendix 7 by section 23 of the Stamp Acts Amendment Act 1926.  There was a small amendment made to subsection (1) and a proviso added.  Then three new charging provisions are added.  First, agreements in respect of exchange and agreements in respect of partition of property.  The second agreements were by an optional right of purchaser created and then, (4) and (5).  Subsection (4) became and remained unique to Queensland.  It is stamped “memorandum of association of such company” as if it were a conveyance if you had an agreement but did not reduce it to writing and submit it for stamping.  The proposed subsection (5) also created a new charging provision.  The point to which we particularly refer then is the next paragraph, your Honours, paragraph (c):

Subsection three shall become subsection six of this section.

Why we say that is significant is that the opening words of subsection (3), as it was subsection (6), as it now is and in this respect still is where duty has been paid in conformity with the foregoing provisions.  In our respectful submission, that plainly meant all of them and not just subsection (1).  Nothing would have been easier than to put the new charging provisions after the existing subsection (3) if it was not intended to grant the relief but instead they are put ahead of it and indeed subsection (3) is renumbered as subsection (6).

The new charging provisions clearly apply to transactions other than sales.  They refer firstly to exchanges and agreements for partition, not sales in the ordinary sense of the term.  The somewhat peculiar liability to duty was created by subsection (3) which appears to apply where property is transferred pending the exercise of an option to a stakeholder, the certificate of incorporation provision and subsequent instruments under subsection (5).

So in all of those cases you could, in the case of the new subsection (2) must, if someone who as a matter of law is not a purchaser strictly so‑called, and yet the Parliament puts those provisions in, moves subsection (6) down and its commencing words are:

Where duty has been duly paid in conformity with the foregoing provisions ‑

So, in our respectful submission, at that point still there is a clear statement of the intention of Parliament that if you are subjected to a duty on the contract to make any of these things happen then you are not to pay duty on a subsequent conveyance in accordance with the contract.

Sub‑sales continued to rear their ugly head and as a result of that we have a series of provisions which are evidentiary in nature.  The first of them that is material for present purposes is that effected by the Stamp Act Amendment Act 1979, which is Appendix 8 to our reply.

GLEESON CJ:   Just before you pass on from your last proposition.  You say the scheme of the legislation is that if you have paid ad valorem duty on ‑ I am sorry, let me put it in the passive voice.  If ad valorem duty has been paid on the contract, the legislative purpose is that it is not necessary that ad valorem duty be paid on a conveyance in accordance with the contract, is that right?

MR RUSSELL:   That is right, your Honour, yes.

GLEESON CJ:   Well, suppose A contracts to purchase Blackacre from B and it is stipulated in the contract that B will transfer Blackacre to C and suppose the explanation of that is that there is another contract between A and C under which A agrees to sell Blackacre to C, but no duty has been paid on that second contract.  Is the scheme of the legislation that no ad valorem duty is payable on the transfer from B to C?

MR RUSSELL:   In principle we would say yes, but the matter arises because of the operation of section 53(4) as it then was.  The question would be whether at the time B entered into that transaction with A, B was acting as C’s agent.  So if what B had done ‑ ‑ ‑

GLEESON CJ:   I had not included that element in it at all.

MR RUSSELL:   I am sorry.  If it is simply a situation that if B enters into a contract saying, “If I’m able to acquire Blackacre from A, I’ll sell it to you” ‑ ‑ ‑

GLEESON CJ:   But what relieves duty ‑ ‑ ‑

MR RUSSELL:   There would be no relief.

GLEESON CJ:   What relieves duty on the transfer is not the dutiability of a contract, it is that duty has been paid on a contract, is it not?  Which is it?

MR RUSSELL:   But in that situation, in our respectful submission, it is not ‑ and this was in fact one of the issues that was discussed in Vickery.  That would not be a conveyance in conformity with the contract, to use the New South Wales terminology.

HAYNE J:   Can the premise which the Chief Justice’s example gives you occur, that is, can the contract A to C not be dutiable?  Would not the contract A to C itself bear duty?

MR RUSSELL:   Sorry, I may have misunderstood what his Honour the Chief Justice put to me.

GLEESON CJ:   I put to you just two contracts, but I did not put to you that duty had been paid on the second contract.  What is it that relieves the transfer of duty?  That it is pursuant to a dutiable instrument or pursuant to an instrument on which duty has been paid?  That is not the same thing.

MR RUSSELL:   Duty has to be paid because you have to provide to the Commissioner evidence of payment as part of the entitlement to relief.

GLEESON CJ:   Exactly.  What relieves you of the liability to pay duty on the transfer is not that it is pursuant to a dutiable instrument but that it is pursuant to an instrument on which duty has been paid.

MR RUSSELL:   That is correct, your Honour.

GLEESON CJ:   So in the example I gave you, you have a contract between A and B and a contract between A and C.  You have duty paid on the contract between A and B and a transfer from B to C but no duty paid on the contract between A and C.  What happens then?

MR RUSSELL:   In our respectful submission, your Honour, leaving aside the sub‑sale provisions, that would not be a conveyance to the purchaser named in the contract on any view of what the term means, so the conveyance to give effect to the second contract would exigible.

GLEESON CJ:   It would be conveyance in accordance with the contract, to use your expression.

MR RUSSELL:   Yes, but not one on which duty had been paid.  The position which your Honour the Chief Justice has to put to me was that A has entered into an agreement with B but if A is able to acquire Blackacre from ‑ ‑ ‑

GLEESON CJ:   No, my example is this:  B is the owner of Blackacre, A has contracted to buy Blackacre from B and A has contracted to sell Blackacre to C, perhaps before A has entered into the contract to buy it from B, and in the contract between A and B there is a stipulation that B will on completion convey Blackacre to C.

MR RUSSELL:   If the contract between B and C predates the contract between B and A, in other words if before he has the property to sell B says, “If I am able to get it, I will sell it to you”, for Queensland purposes duty would not be payable on that contract because it would be an instrument that achieved nothing.  It would not affect the conveyance of property or create a right to a conveyance of property under the original legislation.  If it occurred after, it would simply be a sub‑sale.

GLEESON CJ:   What if it happened at the same time?

MR RUSSELL:   If it happened at the same time, then the position would be that the intermediate conveyor would say that at the time he purchased the property, he did it as agent for the intending conveyee.  And if he did it pursuant to an agreement and authority to acquire it and pass it on, then he would be entitled, even under the law as it presently stands, assuming the necessary documentary evidence exists – there would be one set of duty paid only. 

GLEESON CJ:   Thank you. 

MR RUSSELL:   The legislation was next amended in 1979, and here we come to the provisions that are now subsections (6A) and (6C).  That is Appendix 8.  I am sorry, your Honours, for completeness, there was an amendment made in 1930.  Your Honours will recall that I pointed out that the 1926 amendments brought into section 54 for the first time the notion of exchanges and partitions of property.  In 1930, they were taken out and relocated elsewhere in the Act.  The legislation which I have just handed up is the Stamp Act Amendment Act 1930.  Your Honours will see that, by section 2 of that Act, section 54(2), which was the exchange and partition provision, was repealed, and a new section 55 was inserted. 

Your Honours will see that there is effectively no change in the taxing regime.  Agreements for partition or division are taxed as if they were actual conveyances or transfers.  Agreements for exchange are taxed as if they were actual conveyances or transfers.  Then in subsection (3), but retaining what we would say is the essential scheme of the legislation, the conveyances then become taxed at nominal duty of 10 shillings.  So we would say that by 1930, there was a clearly settled legislative policy that one did not pay duty on conveyances that do not affect contracts on which duty had already been paid. 

In 1979 – and the amending legislation is set out in Appendix 8.  Your Honours will see on page 119, the second page of our appendix, the two provisos that are the legislative antecedents of the present subsections (6A) and (6C).  That is at paragraph (d), about a third of the way down the page.  The first two paragraphs were added as provisos to subsection (6).  The changes that have been made to create the new subsections (6A), (6B) and (6C) have been made under our Reprints Act, rather than by parliamentary enactment.  Again, to explain the legislative context, the second reading speech for that Bill is Appendix 10.  The treasurer’s description of what is done appears on page 2 of that appendix in columns 1 and 2 on page 4563 of the Queensland Parliamentary Debates.  First, in the second paragraph in column 1 on that page ‑ ‑ ‑

GLEESON CJ:   Is this Appendix 10?

MR RUSSELL:   Yes, your Honour.

GLEESON CJ:   Page 4562.

MR RUSSELL:   Page 4563, your Honour.  Page 4562 your Honours will have noted some interesting contributions by Mr Hinze.

GLEESON CJ:   Always beware of a man with an oily tongue.  We should put that on the entrance to the Court.

MR RUSSELL:   I hope your Honour does not have your present submitters in mind.  The second paragraph in column 1 on page 4563:

There will also be a clarification of the situation where a purchaser claims he is acting as an agent for the real purchaser.  Nominal duty will continue in these cases, but only if written evidence of the appointment of the agent executed prior to the execution of the contract or agreement is forthcoming.

GLEESON CJ:   Mr Russell, there is a slight disconformity between two subsections, one of which refers to the purchaser and one of which refers to a person named as a purchaser.  Is that of any significance or did it just come in with this amendment?

MR RUSSELL:   It came in with this amendment, on page 119, this is in Appendix 8, the expression “named as purchaser” appears on the third line of the first paragraph that was added.  In subsection (6C) there is a reference to “named person or his or her nominee”, then there is a reference there to “purchaser”.  In our respectful submission, the legislature was just not attempting to address the issue of sales in conformity with contracts at all.  It was trying to deal with the situation where somebody other than the transferee named in the contract claimed to be entitled to get the benefit of the duty that had been paid on the contract and a series of evidentiary provisions - or if evidentiary provisions were placed in the Act, first by this Act and then later in 1988 ‑ ‑ ‑

GUMMOW J:   I just think “Nil” might be a bit elliptical. 

MR RUSSELL:   Yes.  The entitlement: 

Where duty has been duly paid in conformity with the foregoing provisions, the conveyance or transfer or conveyances or transfers made to the purchaser shall upon production of the contract or agreement or contracts or agreements, duly stamped –

and it is common ground that those things have happened –

not be chargeable with any duty, and the commissioner, upon application, either shall denote the payment of the ad valorem duty upon the conveyance or transfer or conveyances or transfers, or shall transfer the ad valorem duty thereto. 

So, in a sense, the second part of that would suggest that there is a liability to duty but you can transfer it across from the contract and thereby satisfy the liability.  But the earlier words say that the conveyance shall “not be chargeable with any duty”. 

GUMMOW J:   Well, the proper answer would just be that 54(6) takes effect according to its terms, would it not? 

MR RUSSELL:   Yes.

GUMMOW J:   But you have to give a speaking answer in that way, rather than fix upon a sum. 

MR RUSSELL:   That is correct, your Honour. 

GLEESON CJ:   Thank you.  We will reserve our decision in this matter and we will adjourn until 10.15 tomorrow morning. 

AT 3.26 PM THE MATTER WAS ADJOURNED