Tooheys Ltd v Commissioner of Stamp Duties (NSW)
105 CLR 602(Judgment by: TAYLOR J)
Between: TOOHEYS LTD
And: COMMISSIONER OF STAMP DUTIES (NSW)
Judges:
Dixon CJ
Kitto J
Taylor JMenzies J
Windeyer J
Subject References:
Taxation and revenue
Stamp duty
Exemptions
Deed between company and trustees establishing pension scheme for employees
Meaning of 'declaration of Trust'
Legislative References:
Stamp Duties Act 1920 (NSW) - Second Schedule
Judgment date: 13 June 1961
SYDNEY
Judgment by:
TAYLOR J
The questions raised by the stated case were, in my opinion, answered correctly by the Full Court and if there had been no disagreement in this Court I would have been content simply to express my concurrence with the reasons given below. In the circumstances, however, I wish to make a few observations concerning the question whether the deed of 29th October 1958 can properly be characterized as an instrument "relating to the services of apprentices, clerks, and servants".
There can be no doubt that the expression "relating to" is extremely wide but it is also vague and indefinite. Clearly enough it predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified. That being so all that a court can do is to endeavour to seek some precision in the context in which the expression is used. With this in mind it may be said with some certainty that an examination of the language of the exempting provision shows that it does not admit of its application to an instrument merely because it makes a reference to the existence of a relationship of master and servant between the parties to it, or still less, because it refers to the existence of a master and servant relationship between persons who are not parties to it. It is, I think, not open to argument that "relating to", in the context in which it appears, is equivalent to "referring to" and the "relationship" must be based upon some more substantial ground. It is, in my opinion, equally clear that the relationship must appear upon an examination of the instrument itself for it is the character of the instrument which is the material question and this cannot be resolved by an examination of extraneous matters in order to determine the purpose of the parties. In other words the condition for the operation of the exempting provision is that the instrument must "relate" and not merely that a relationship of some kind can be made to appear by a consideration of the motive or purpose which has brought it into existence. A number of cases such as Smith v Cator; [F19] Southgate v Bohn; [F20] and Sadler v Johnson [F21] were cited to us and the suggestion was made that they furnished some authority for the contrary of this proposition. These cases were concerned with a statutory provision which exempted from duty any memorandum letter or agreement made for or relating to the sale of any goods, wares, or merchandise. Quite clearly the exempting provision was not confined to agreements for the sale of goods, wares and merchandise; it applied also to instruments "relating to" any such sales. In the second of these cases it was held that the exemption applied with respect to a memorandum of advance handed to an auctioneer together with goods entrusted to him expressly for immediate sale and in the third case the same conclusion was reached where a guarantee was given for the price of goods in consideration of their consignment for sale to a third person. The contrary conclusion was reached in the first of the cases referred to where the Court was concerned with a letter forwarded to a factor with enclosed bills for acceptance against which an undertaking was given to provide funds to retire the bills should certain quantities of oats to be forwarded to the factor remain unsold at the time when the bills fell due. These cases, it was suggested, provide some authority for the proposition that the expression "relating to" ought to receive the widest interpretation. But when they are examined it is seen that the line of cases of which those mentioned form part did not even give literal effect to the expression "relating to" for it will be seen that they did not regard an instrument as qualifying for exemption merely because it "related to" a sale but only when, being so related, the primary object of the instrument was the carrying out of the sale. As Abbott C.J. said in Smith v Cator: [F22] "We think that description is confined to instruments whereof the sale of goods is the primary object, and it appears to us that the primary object of this letter was the obtaining of money upon a pledge of goods expected to arrive in England, and intended to be placed in the hands of the plaintiffs upon their arrival". [F23] It was true that the letter also related to a contemplated sale "but this was a secondary or collateral object" and accordingly it could not be characterized as a letter "relating to" the sale of goods, wares, or merchandise. In Southgate v Bohn [F24] Pollock C.B. pointed out that in Smith v Cator [F25] "the sale of the oats was merely a collateral object of the instrument; whereas here the memorandum is of an advance on books sent in for immediate sale". [F26] According to Parke B. the relevant agreement under consideration in Southgate v Bohn [F27] was one whereby the plaintiff should repay himself for his advance to the defendant by an immediate sale of the goods and accordingly it "related to the sale of goods". [F28] Similarly, the primary object of the instrument in question in Sadler v Johnson [F29] was "that the goods should be sold through the agency of the defendant's friends at Calcutta" [F30] and, accordingly, it was held to be an agreement which related to the sale of goods. In my view this line of authority does not support the appellants' argument. Indeed, it is opposed to it for it provides authority for the proposition that the vital question is whether the instrument "relates" and not whether it may be "related" by an examination of extraneous circumstances.
If then the relationship is to be sought in an examination of the instrument itself and not of the purpose of the parties, and if a mere reference to the existence of a master and servant relationship is not sufficient to bring the instrument within the exempting provision, what test should be applied to determine whether an instrument ought to be characterized as an instrument "relating to the services of apprentices, clerks, and servants". In the present case, it should be noticed, we are not concerned with a provision dealing with instruments "relating to" a transaction such as a sale of goods; what we are concerned with is a provision which deals with instruments relating to the services of apprentices, clerks, and servants. To my mind this distinction places the question of relationship on a somewhat different footing. We are not concerned with instruments the object of which is to facilitate or otherwise assist in the completion of a sale of goods. We are concerned, I think, with instruments which in some way operate to define or modify or otherwise affect some incident or incidents of the services of the specified class. Such instruments truly "relate to" the services of employees. As was pointed out by the Full Court the deed in question does not affect any incident of the services of the appellants' employees either by way of reward or otherwise; the deed is one which-as par. (1) of the stated case naturally describes it-"relates to a Pension Fund for Employees of the said Company and others". Its object is to establish a fund to be administered by specified trustees in accordance with defined rules. But it in no way touches the master and servant relationship existing between the appellant company and its associated companies on the one hand and their employees on the other and the fact that the company's purpose in inaugurating the scheme was to attract employees and to secure their services for a long time is, in my view, beside the point. The existence of the scheme may, of course, tend to attract suitable employees and the advantages of membership, secured by eligible employees by application and acceptance, may well provide an inducement for them to remain in the service of the company. But the deed itself secures no advantage to any employee and in no way operates to vary or modify any condition of his employment; it is but a prelude to agreements which may have an operation of that character. In the result I am of the opinion that the instrument cannot be characterized as an instrument "relating to" their services and, accordingly, that the appeal should be dismissed.