Ex parte Xenon Pty. Ltd.

Judges:
Andrews SPJ

Court:
Supreme Court of Queensland

Judgment date: Judgment handed down 21 November 1983.

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Andrews S.P.J.

This is an application by way of a summons as amended by leave on behalf of Xenon Pty. Ltd. as trustee of The Second Young Family Trust against the Commissioner of Stamp Duties for:

``(a) determination whether, upon its proper construction the instrument Exhibit `C' to the affidavit of V.J. Kootsookos filed herein constitutes a `Settlement' within the meaning of the term as used on the above-named Act.

(b) a declaration that upon such determination the said trustee should pay stamp duty upon the said instrument in the sum of FOUR DOLLARS ($4.00)...''

The relevant trust deed was before me as was a deed appointing the applicant trustee of the above-named trust (Exhibits ``A'' and ``B'' respectively to the affidavit of Mr. Victor John Kootsookos, solicitor for the applicant). Eligible beneficiaries under the trust are named in the said trust deed which gives the trustee, in its absolute discretion, power to nominate ``Any person then living and any limited or unlimited company or any corporation or trust or any charity'' to be a ``Nominated beneficiary'' for the purposes of the trust.

On 28 February 1983 the applicant by deed (Exhibit ``C'' to the said affidavit) nominated two persons, namely Edith Joyce Patricia Eakin and Terrance Robert Dawson Eakin, as nominated beneficiaries.

On 20 July 1983 Mr. Kootsookos' firm lodged the said deed, Exhibit ``C'' together with a Requisition for Impressed Duty Stamps on Documents and Returns (Form C in the schedule of forms to the Stamp Act), with the Commissioner. In his affidavit Mr. Kootsookos said that the deed Exhibit ``C'' is the instrument the stamping of which is the subject of this application. On 22 July 1983 the Commissioner wrote to Messrs. Kootsookos and Quinn asking them to furnish a copy of the Second Young Family Trust for perusal. A copy of the deed creating the trust was forwarded on 28 July 1983.

On 5 August 1983 the Commissioner wrote to Messrs. Kootsookos and Quinn stating, in effect, that the deed nominating the ``Nominated beneficiaries'' falls within the provisions of the Head of Charge ``Settlement, Deed of Gift or Voluntary Conveyance'' in the First Schedule to the Act; that duty would be assessed accordingly and asking for a certified statement of the assets and liabilities of the trust with evidence of value.

On 9 August 1983 the solicitors replied to the effect that the nominated beneficiaries were the parents of Mrs. Young, one of the ``Eligible beneficiaries'' named in the trust deed; that Mr. and Mrs. Young (Mr. Young being the other ``Eligible beneficiary'') were childless; that should Mr. and Mrs. Young predecease the latter's parents, the property would eventually pass to them; that the document conveys no property to them and that they would have no interest in the trust property until steps were taken to ``vest the trust''; that the trust was not a trading trust so that there would be no income for division among prospective beneficiaries according to provisions of the trust relating to income. It was denied that any settlement, gift or voluntary conveyance was effected by the deed nominating the nominated beneficiaries.

The Commissioner replied, stating grounds to support an assessment ``Under the settlement

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ATC 4075

heading'' and, in effect, repeating the request for the information sought earlier.

The question here is, firstly, whether I may and then whether I ought to leave the question whether the nomination of the beneficiaries under the trust is a settlement to be determined initially by the Commissioner and ultimately by way of answer to a case stated under sec. 24 of the Stamp Act, or decide it in the exercise of a discretion vested in me by O. 64 r. 1A of the Supreme Court Rules. It is contended by the applicant that I have jurisdiction under the rules. (See O. 4, r. 11; O. 64, rr. 1A, 1E.)

The matter has been made subject to the procedures under the Stamp Act. The requisition in Form C is a requirement that the Commissioner express his opinion with reference to the relevant executed instrument upon the questions:

• (a) Whether it is chargeable with any duty;
• (b) With what amount of duty it is chargeable (see sec. 22(1) of the Stamp Act).

The Commissioner has not yet performed the duties cast upon him under sec. 22(2) which provides as follows:

``(2) The Commissioner may require to be furnished with an abstract of the instrument, and also with such evidence as he may deem necessary, in order to show to his satisfaction whether all the facts and circumstances affecting the liability of the instrument to duty, or the amount of duty chargeable thereon, are fully and truly set forth therein.''

He has not been furnished with all the material which he may require before coming to a decision as to the amount of duty chargeable. It is clear that he has demonstrated that he entertains the view that the relevant instrument attracts duty under ``the settlement heading'' but his duty is to come not to piecemeal decisions but to all decisions required by subsec. (2) after being furnished the evidence deemed necessary by him.

It cannot be disputed that the jurisdiction to make a declaratory judgment is extremely wide. The power is to be exercised with a proper sense of responsibility and full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration. (See
Ibeneweka v. Egbuna (1964) 1 W.L.R. 219 at pp. 224-225.)

Lord Sterndale M.R. in
Hanson v. Radcliffe Urban District Council (1922) 2 Ch. 490 at p. 507 said that the power where it is a question of defining the rights of two parties, is now almost unlimited, perhaps limited only by the Court's discretion; but that the discretion should be exercised judicially. I refer to these statements in case it should be that I have a discretion to deal with the subject of the application. Unsatisfactory features of the procedure by way of case stated under sec. 24 of the Stamp Act are commented upon in
O'Sullivan & Ors. v. Commr. of Stamp Duties (Qld.) 83 ATC 4684. However, it is there stressed that, if upon a proper interpretation, the statute (the Stamp Act) directs that a case stated is the exclusive procedure that is the end of the matter. That was a case in which the powers of the Commissioner under sec. 22 of the Stamp Act were invoked and an assessment was made by him.

Although the Full Court held that, in those circumstances, sec. 24 of the Stamp Act provided an exclusive procedure for appealing against the assessment and that proceedings for declarations against the Commissioner were not open, G.N. Williams J. appears to have made it clear that he was basing his decision on the circumstance that the assessment had issued. I am of the view that the reasoning of the Court, particularly where it relied upon Cuming
Campbell Investments Pty. Ltd. v. The Collector of Imposts (Vic.) (1938) 60 C.L.R. 741 covers this matter. In the latter case at p. 751 Latham C.J. said of a substantially similar provision to sec. 24:

``The Statute shows the intention of the legislature that the court should engage in the assessment of duty only on an appeal from the collector.''

At p. 758 McTiernan J. said:

``It would be inconsistent with the legislative scheme for assessing and reviewing the assessment of instruments which are chargeable with duty for the court to inquire on mandamus what is the amount of duty payable on an instrument...''

The facts there are sufficiently stated in the headnote thus:

``A transfer of real property executed in 1937 was produced to the Collector of

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ATC 4076

Imposts pursuant to sec. 32. The transfer was made in pursuance of an agreement executed in 1931 which had not been assessed for duty. The collector stated that the agreement was the principal instrument and should be assessed for duty and that the value of the land comprised in the agreement and in the transfer was considerably in excess of the value of £50,000 at which it was shown in the two instruments; he refused to express any opinion upon the transfer until the duty chargeable upon the agreement had been paid. The transferee applied to the Supreme Court of Victoria for a writ of mandamus commanding the collector to assess and accept payment of the stamp duty payable in respect of the transfer of the land calculated upon a consideration of the value of £50,000. The application was refused, the collector giving an undertaking which was recited in the court's order as being that he would give a reply within twenty-one days to the applicant's request for an expression of opinion under sec. 32 as to whether the transfer was chargeable with duty, and, if so, what the amount of the duty should be.''

It was held on appeal to the High Court that the writ of mandamus was rightly refused.

Dixon J. at p. 750 said:

``The appellant in this case asks that mandamus should issue directing the Collector of Imposts not to give his opinion under sec. 32 of the Act, but to decide the matter by giving a particular opinion, namely, that the transfer is taxable as a conveyance on sale as upon a consideration of £50,000. What is asked is that the collector be ordered to arrive at a particular decision in the appellant's favour. In my opinion the court can do no more than direct the collector to perform his statutory duty. He will perform the whole of his statutory duty if he considers the instrument submitted to him and expresses an opinion whether it is chargeable with any duty and with what amount of duty it is chargeable.

If any person is dissatisfied with the assessment made by the collector he is entitled under sec. 33 to appeal against the assessment to the Supreme Court. If he does so appeal, the collector is bound to state and sign a case setting forth the question upon which his opinion was required and the assessment made by him (sec. 33(1)). Upon the hearing of the case the court determines the question submitted, and, if the instrument in question is in the opinion of the court chargeable with any duty, the court assesses the duty with which it is so chargeable. Section 34 entitles the collector to require evidence to be furnished `in order to show to his satisfaction whether all the facts and circumstances affecting the liability of the instrument to duty or the amount of duty chargeable thereon are fully and truly set forth therein'; and the collector may refuse to proceed upon any application for his opinion until the evidence which he requires is provided. Thus the statute expressly provides a specific method of putting the collector right if he goes wrong. The court is not authorized by the statute to make an original assessment of duty. The court is authorized to make an assessment only after the collector has assessed and when the court has the benefit of the opinion of the collector. (Cf.
R. v. Mayor & c. of Stepney (1902) 1 K.B. 317 at p. 321.) The statute shows the intention of the legislature that the court should engage in the assessment of duty only upon an appeal from the collector. It would, in my opinion, be wrong for the court, when this specific remedy by way of appeal is given, to utilise mandamus proceedings so as to exclude the collector from the exercise of the function entrusted to him by the statute, and at the same time, to enable the court to make an original assessment of duty which is not contemplated by the Act.''

In his reasons for decision in the case of O'Sullivan & Ors. v. Commr. of Stamp Duties (supra) G.N. Williams J. at p. 4695 said:

``In my opinion the statute clearly indicates that an assessment of duty by the Commissioner may only be reviewed upon a case stated pursuant to sec. 24. That conclusion is supported by sec. 22, 22A, 23, 23A and 24 of the Stamp Act which provide for the Commissioner to make findings of fact `to his satisfaction', and to state those facts in the case for the opinion of the Court.''

The distinguishing factor in this case, namely that the assessment has not issued is not, I think, of great import. The machinery which would give rise to the issue of an assessment has been put in motion and the Commissioner has acted

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ATC 4077

within the authority conferred upon him. The action sought from me would stay the Commissioner from continuing so to act, notwithstanding that he has been required to do so under sec. 22. I do not think that the matter at the stage reached is affected by the operation of sec. 4, 4A, 4B of the Stamp Act and that they may in certain circumstances give jurisdiction to a Court to assess and give judgment for an amount of stamp duty (see e.g.
Re Sharpe (1944) St. R. Qd. 24).

In my view I may not now grant the relief sought. Furthermore, if I had the power I would refuse the relief where the applicant, having required the Commissioner to act under sec. 22, in effect seeks to restrain him from proceeding, it having been made apparent that the basis of the assessment, the issue of which depends upon the applicant's making available relevant material sought by the Commissioner, is unfavourable according to the applicant's view of the matter.

I order that the application be dismissed with costs to be taxed.