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Corfu Clothing Company Pty. Ltd. v. Commissioner of Stamps (S.A.)

Judges:
Legoe J

Court:
Supreme Court of South Australia

Judgment date: Judgment handed down 14 January 1988

Legoe J.

This is an application by the respondent to a proposed appeal seeking orders that the appeal be either struck out on various grounds or alternatively be dismissed for want of prosecution pursuant to the Supreme Court Rules 1987. When the appeal was called on before me I was asked by counsel to deal with this preliminary point separately. These reasons are confined to the submissions put on that point.

The history of the proceedings

I take the history of the proceedings from the affidavit filed on behalf of the respondent in support of the application to strike out or dismiss.

  • 1. On or about 16 October 1984 one D.G. Morgan, as agent for the appellant, lodged an application for opinion of the Commissioner of Stamps in the form prescribed by reg. 23 of the Stamp Duties Regulations 1978 in relation to the documents identified in the notice of appeal.
  • 2. On 9 November 1984 the respondent, being of the opinion that the instruments were chargeable with duty, assessed the duty with which the instruments were chargeable and the instruments were duly stamped. The memorandum of transfer was assessed with duty in the sum of $13,730. The deed of assignment was assessed with duty in the sum of $4,642.
  • 3. On 22 November 1984, Messrs Rogers, Morgan and Co. as agents for the appellant, lodged an objection with the Treasurer pursuant to sec. 24(1)(a) of the Stamp Duties Act 1923. The appellant contended that the assessments were erroneous and excessive to the extent of $4,638.
  • 4. By letter dated 5 August 1985 Messrs Rogers, Morgan and Co. were advised that the Treasurer had, upon receipt of advice from the Crown Solicitor, resolved to disallow the objection and confirm the assessment of the Commissioner of Stamps.
  • 5. By letter dated 19 August 1985 to the Under Treasurer, Messrs Morgan and Associates acknowledged receipt of the letter dated 5 August 1985 on 7 August 1985.

No further facts or documents were known to the respondent until July 1987. Certain further facts were stated by the deponent to the affidavit filed on behalf of the respondent relating to the events in July and August of 1987 when this matter had been set down for hearing as a miscellaneous appeal. On those further facts the respondent claims that:

  • (a) Neither the Crown Solicitor nor the Commissioner of Stamps appears to have had any notice of the appeal prior to 31 July 1987. On that day the appeal was listed in a published list from this Court as a miscellaneous appeal. An employee of the Crown Solicitor's office subsequently obtained a copy of the notice of appeal which was on the Supreme Court file.
  • (b) On 3 August 1987 Mr Wainwright, solicitor employed in the Crown Solicitor's office, attended at the callover before me and appeared on behalf of the respondent. There was no appearance for the appellant. I indicated that I would try and ascertain what had happened by my associate contacting the solicitors for the appellant.
  • (c) The matter was brought on again at 11 a.m. on 4 August when Mr Brohier appeared for the appellant and Mr Wainwright again appeared for the respondent. Mr Wainwright indicated the respondent's wish to take a preliminary objection as to the validity of the appeal. I directed the matter be heard on 24 August and that counsel be heard in chambers on any preliminary point.

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  • (d) On 5 August 1987 the deponent made certain inquiries from the Acting Commissioner of Stamps and a legal officer employed in the State Taxation Office. It was ascertained that all documents relevant to the matter were those contained on the file at the State Taxation Office, Stamp Duties Division, which was numbered 280 of 1984 stating, ``objection; re: stamp duty; conveyance of property - deed of assignment to Corfu Clothing Co.''. The deponent was further informed there were no documents relating to the appeal on the taxation office file. A search of the file revealed that not only were there no appeal papers on the file, but furthermore there was no correspondence referring to an appeal.

The preliminary objection

On the above facts the respondent seeks orders as to:

  • (1) That the appeal be struck out on the ground that it was not instituted in accordance with the Supreme Court Rules 1947.
  • (2) Alternatively, that the appeal be struck out or otherwise dismissed on the ground that the appellant has not complied with the requirements of sec. 24 of the Stamp Duties Act 1923.
  • (3) Alternatively, that the appeal be dismissed for want of prosecution pursuant to r. 97.06 of the Supreme Court Rules 1987.
  • (4) That the appellant pay the respondent's costs.

As to (1) above, the respondent simply says that if an appeal has not been served then there is no appeal before the Court. The relevant rule under the 1947 Rules in operation at the time this appeal was lodged in this Court, namely on 27 August 1985, is O. 58 r. 38(2). That order and rule made provision for miscellaneous appeals. A stamp duty appeal is unquestionably a miscellaneous appeal. Rule 38(2) of O. 58 where relevant, provides that the appeal,

``Shall... be served and filed in the Registry within the time limited by such act for instituting the appeal, or, if no such time is so limited, within one month from the giving or making of the decision, order, determination or direction complained of unless that time is extended pursuant to any provision of any such act contained or, as the case may be, order 64 rule 7 of these Rules.''

The respondent refers to the facts mentioned above, namely that there is no record of any appeal papers on the relevant file at the State Taxation Office, nor is there any indication of correspondence between the appellant or the appellant's solicitors and the respondent or his solicitors which in any way indicates that an appeal had been instituted.

I note that the praecipe for setting down this appeal at the next hearing of miscellaneous appeals to be held in Adelaide is dated 8 July 1987 and is filed in this Court on that day. On the other hand and as I reminded counsel for the respondent during his submissions there is a discretionary power in this Court under O. 72 r. 2A to dispense with the observance of or compliance with all or any part of the requirements of the rules or procedure of the Court. Counsel responded to the effect that the submissions were not a mere technicality. The objection was principally on the ground of the very long delay, namely two years, which raised the preliminary point.

In addition to the requirement to institute the appeal by service as provided in O. 58 r. 38(2) counsel for the respondent referred to subr. (4) which provides that the appellant shall ``forthwith after the service and filing of the notice of motion or originating summons, deliver a copy thereof to the Registrar, Secretary, Clerk, or other the Chief Administrative Officer, of the Court, Tribunal, Board or other body appealed from...''. As stated above this was not apparently complied with. Further under the same subrule of r. 38 it is stated that:

``and provided further that where the appeal is to a single judge the appellant shall within twenty-eight (28) days after instituting the appeal set the same down for hearing at the next sittings of the Supreme Court for hearing of such appeals fourteen clear days after such setting down....''

Once again this rule had not been complied with and the appellant did not in fact file and lodge the praecipe for setting down until the end of July 1987 some two years later. Finally, on this first point counsel submitted that by reason of the appellant's failure to set the matter down the respondent was deprived of his

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rights under O. 58 r. 13 of the 1947 Rules namely to make an application for an order dismissing the appeal for want of prosecution or for any of the other discretionary orders which are available to a Judge of this Court pursuant to that rule.

As to the second or alternative ground for striking out the appeal counsel for the respondent submitted that the appellant had not complied with the requirements of sec. 24 of the Stamp Duties Act 1923 as amended. In fact sec. 24 has not been amended and appears in similar format throughout legislation in other States. That section is taken from sec. 20 of Act No. 372 of 1886 and provides:

``24(1) Any person who is dissatisfied with the assessment of the Commissioner may, on payment of duty in accordance therewith -

  • (a) within fourteen days after the date of the Commissioner's assessment, forward to the Treasurer a statement of the grounds of his objection to the assessment: or
  • (b) within twenty-one days after the date of the Commissioner's assessment. appeal to the Supreme Court.''

(Emphasis added)

As appears above the sec. 24(1)(a) objection was rejected by the Treasurer on 5 August 1985 (notice thereof received by the appellant's solicitor on 7 August 1985). Subsections (2) and (3) deal with the procedure to be adopted by the Treasurer who has power to modify or confirm the Commissioner's assessment.

Subsection (4) states:

``(4) For the purpose of any appeal to the Supreme Court under this section, the appellant may require the Commissioner to state and sign a case setting forth the question upon which his opinion was required and the assessment made by him.''

(the emphasis is mine)

Subsection (5) requires the Commissioner to state and sign a case accordingly and deliver it to the appellant and upon the appellant's application ``the case may be set down for hearing in the Supreme Court''. Subsection (6) provides:

``(6) Upon the hearing of such a case (at least seven days' notice of which shall be given to the Commissioner), the Court shall determine the question submitted and assess the duty, if any, chargeable under this Act.''

Subsections (7) and (8) give this Court the various powers available to make the assessment itself if it considers the Commissioner's assessment was erroneous or an excess of duty and in the case of confirming the Commissioner's assessment of fixing the costs incurred by the Commissioner. Subsection (9) provides for the appeal to be heard by a Judge sitting alone.

It is apparent from the facts stated above that the appellant has not requested the Commissioner to state and sign a case setting forth the question upon which his opinion was required and on which the assessment was made (subsec. (4) of sec. 24 above). The question then arises as to whether a party can appeal against an assessment of stamp duty otherwise than by case stated pursuant to sec. 24(4).

Counsel for the respondent submitted that this could not be done. The Court cannot determine the issues or assess the duty chargeable in the absence of a case stated in counsel's submission. Counsel referred in particular to the opening words of subsec. (6) ``upon the hearing of such a case...''. Strong support for this proposition can be obtained from at least two authorities, namely,
Cuming Campbell Investments Pty. Ltd. v. Collector of Imposts (1940) V.L.R. 153 particularly at pp. 160-161 in the judgment of O'Bryan J. His Honour was there considering sec. 33 which is in substance similar to the South Australian sec. 24. In subsec. (1) of the Victorian sec. 33 it was provided:

``may... appeal against such assessment to the Supreme Court of Victoria and may for that purpose require the Comptroller of Stamps to state and sign a case setting forth the question upon which his opinion was required and the assessment made by him.''

It was contended by counsel in Cuming's case that the words ``and may for that purpose'' were in terms permissive and intended to provide an alternative method of getting the appeal before the Court. O'Bryan J. however rejected this submission on the grounds that a consideration of the whole of sec. 33 led to the conclusion that the only right of appeal ``is by way of case stated''. The words ``may for that

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purpose'' qualify the foregoing words ``may appeal...''. At p. 161 his Honour said:

``The absence of any direction as to the function of the Court upon the hearing of an appeal, otherwise than by way of case stated, and the absence of any express power to assess duty in such a case, strongly suggests that the only mode of appeal intended to be granted by this section is by way of case stated.''

In the absence of authority his Honour referred to the English text books on stamp duties and Halsbury's Laws of England 1st ed. Vol. 24 p. 717, 2nd ed. Vol. 28 p. 452 to the accordance with the invariable practice of the Court. This statement of the law was approved by the Queensland Full Court in
O'Sullivan v. The Commissioner of Stamp Duties (1984) 1 Qd.R. 212 at p. 227 per G.N. Williams J. and see further per Matthews J. at p. 213.

As to the third ground taken by counsel for the respondent which was again in the alternative, counsel submitted that the 1987 Rules manifest a clear policy against undue delay. Rule 97.06 states that an appeal shall be set down within 28 days after institution for hearing at the next sittings of the Supreme Court. This appeal was set down two years or nearly two years after the institution of the appeal. Furthermore as counsel pointed out r. 97.06 provides for cases of urgency which can enable an appeal to be brought on very quickly. In general terms the policy of the Rules is against undue delay and in favour of expedition. Rule 97.06 subr. (2) provides that in the event of an appeal not being set down within 28 days after institution then any other party to the proceeding may apply to the Court for either leave to set it down or an order dismissing the appeal for want of prosecution. Counsel contrasted the limited time of 28 days for setting down the appeal under the 1987 Rules to the more extensive period of three months under the 1947 Rules as provided in O. 58 r. 13.

If an appeal has not been set down within 12 months then the provisions of r. 95.11 apply. By subr. (3)(a) of r. 95.11 the 1987 Rules specify that an appeal which has not been set down within 12 months from its institution or from the time when the appellant first became entitled to set it down whichever is the latter shall lapse at that time ``unless the time for setting down has been extended prior to the time set by this rule expiring, or, where in special circumstances only, such time has been extended after the time limited by this rule has expired''. No such application has been made to me in this matter. As observed by Master Lunn Q.C. in his Civil Procedure South Australia on p. 7929 footnote 95.11.3 this is a new rule. Furthermore an appellant must be careful to apply for an extension of the year if there is a substantial delay in setting the appeal down. Once again this appellant has taken no such step in this matter. The setting down of the appeal in July 1987 was done pursuant to the 1987 Rules.

For these reasons counsel for the respondent submitted that it would be appropriate for this Court to make an order dismissing the appeal for want of prosecution pursuant to r. 97.06(2). The delay of two years represents a delay of such magnitude that it would have been sufficient to warrant dismissal even prior to the application of the 1987 Rules, but more particularly so since the more stringent provisions of the 1987 Rules and the general policy which is expressed therein for the expedition of litigation. In
Kenny v. The State of South Australia unreported judgment of the Chief Justice delivered on 27 May 1987 being Judgment No. 9905, when speaking of the procedure for entry of judgment in default of pleading said, at p. 7:

``Any measure which precludes such an adjudication must be regarded as a measure of last resort. Nevertheless it must be understood that parties who neglect to comply with the time limits prescribed by the rules, are at risk of having their actions struck out or a judgment entered against them if in the circumstances it is just and expedient to do so. Generally the court will endeavour to deal with the dilatory conduct of litigation by orders as to costs and the imposition of other terms and penalties...''

The appellant's submissions and answers to the preliminary objection

First, counsel for the appellant very properly conceded that the failure to serve the notice of appeal involves the question as to whether or not the appeal was correctly instituted. Counsel submits that this failure was a mere technicality in the circumstances and that the appellant's solicitor apparently thought mistakenly that the

ATC 4086

appeal had been properly instituted. Accordingly the provisions of the 1947 Rules as to service should be waived pursuant to O. 72 r. 2A of those rules. However, counsel further conceded that there was no explanation in the affidavit of the appellant's solicitor as to why nothing was done to effect service prior to setting the matter down some two years later. Even in the absence of any such reason or excuse being provided in the affidavits, counsel submitted that the appellant should not be penalised for the dilatory conduct on behalf of a legal practitioner. The Court's discretionary powers to excuse such a rule are very wide and should be exercised in the interests of justice in the appellant's favour. As I then pointed out in the course of argument the appellant comes up against the further difficulty that if the appellant's solicitor thought he had done everything that he should have done, why wasn't the appeal set down within the time required by the rules that then applied, namely O. 58. There does not appear to be any explanation for this failure either.

Counsel for the appellant then submitted that the two years' delay cannot be looked at in isolation. This submission led to the principal argument which was put forward on behalf of the appellant and was put in answer to both the first and second points relied upon by the respondent in the preliminary objection. That submission is simply that intrinsically the merits of the appeal are extremely difficult. The appeal raises difficult questions of statutory construction and interpretation of instruments. These will be matters of first impression. As the duty has been paid pursuant to the mandatory requirements of sec. 24 of the Stamp Duties Act, there can be no prejudice to the respondent Commissioner of Stamps.

Thirdly, counsel for the appellant submitted that upon a proper interpretation sec. 24 preserved an independent right of appeal apart from the case stated procedure provided for in subsec. (4). Counsel stressed that pursuant to subsec. (1) of sec. 24 the Treasurer has the legal duty of making a decision as to the assessment. It was further submitted that there was no reason why the Treasurer may not be made the respondent to the appeal to the Supreme Court. Counsel referred to the practice within the Department of referring objections to stamp duty assessments to the Crown Solicitor. It may be that the Crown Solicitor would advise that the Commissioner's assessment would be unreasonably lenient and advise the Treasurer that the instruments should be assessed at a higher duty. This could give rise to a difference of opinion between the Commissioner on the one hand and the Treasurer on the other hand. Accordingly there is nothing to exclude the general direction making power of this Court to direct that the matter proceed on affidavit evidence or that the procedures may be appropriate where the Treasurer is the respondent rather than the Commissioner. Counsel then analysed sec. 24 in more detail to the effect that it deals with a number of distinct topics. Subsection (1) provides for the right of an objector to elect whether to forward to the Treasurer a statement of the grounds of his objection to the assessment, or within the 21 days limit to appeal to the Supreme Court. Subsection (2) deals with the powers of the Treasurer if the matter is forwarded to the Treasurer. Subsection (3) creates the appeal to this Court if the Treasurer confirms or modifies the Commissioner's assessment and the objector is still dissatisfied. Subsections (4), (5) and (6) deal with the case stated procedure. Counsel submitted that the Queensland and Victorian authorities referred to above are distinguishable from sec. 24 as there is no intrinsic connection between the right of appeal and the procedure for appealing. Under the Victorian statute sec. 33 itself creates a right of appeal and then goes on to create a case stated procedure. Counsel placed emphasis on the words ``for that purpose'' in both the Victorian and the Queensland Acts which does not appear in the South Australian Act expressly in that form, but rather in the opening words of subsec. (4) states ``for the purpose of any appeal''. Under the Victorian provision the right of appeal arose only in counsel's submission, as a consequence of the taxpayer availing itself of sec. 32 which was equivalent to the South Australian sec. 23 and the statutory right to require the Commissioner to express an opinion. Section 24 of the South Australian Act is different in that it creates a general right of objection to assessment and not merely a right to object after the Commissioner has made an assessment upon the formation of an opinion which had been applied for by the taxpayer. Consequently, there is a structural difference between the two sets of legislation. Procedurally in South Australia the steps are first to institute the appeal which has to be done

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within 21 days, and that was done in this case, and then there is the procedural step of ascertaining the facts and relevant papers and instruments to be brought before the Supreme Court. Counsel submitted that subsec. (4), (5) and (6) deal only with the second limb. That is to say those latter subsections deal with the ascertainment of the facts and the identification of the instruments for the purpose of the appeal. Counsel finally submitted that an appellant in South Australia has a choice. That is a choice to require the Commissioner to state a case, or, the choice to avail itself of the Court's ordinary procedures and to proceed by way of affidavit or statement of agreed facts, or in such other form as the court may direct.

A further submission was put by counsel for the appellant that in the case of Cuming Campbell (supra) the Full Court of Victoria expressed extreme reluctance to come to the conclusion that they came to as the result was ``an unsatisfactory one''. This Court should avoid such an awkward restriction if possible. The provisions contained in sec. 24 of the Act do not exist in a vacuum but rather in conjunction with the Rules of Court where powers are conferred on the Court to give appropriate directions and to excuse failures to comply.

In answer to another subsidiary argument that was put in the course of the hearing of the preliminary objection, namely that in view of the fact that there is no time limit provided in subsec. (4) for obtaining the Commissioner's opinion that the opinion must be given with all convenient speed, see sec. 27(3) of the Acts Interpretation Act 1915. Counsel for the respondent had referred to the well settled principle that the remedy of mandamus would not be available to an appellant in these circumstances because of the unwarranted delay on its part, see In
re Australian Broadcasting Tribunal: ex parte Fowler (1980) 54 A.L.J.R. 549 at p. 551 (2nd column) letters B-C. Counsel for the appellant did not dispute the authority and correctness of this decision but submitted that it was clearly distinguishable in this case because, in Fowler's case the appellants or applicants were rather unfairly attempting to put in jeopardy the rights of the other party, and therefore the discretionary prerogative relief should not be granted. In this case there is no possibility of any substantive or even procedural prejudice to the Crown because the duty has already been paid. The appellant is simply seeking to recover a payment made in 1984 terms, the same amount of money without interest for which there is no provision in the Act, and therefore only recovers in 1987 the same amount without any account for inflation.

Finally as to the power of this Court to strike out or dismiss cases for want of prosecution, counsel conceded that in
Muto v. Faul (1980) V.R. 26 at p. 30 the Full Court of Victoria stated that this power should be exercised very sparingly and not by a mere technical application of the Rules, Counsel for the appellant referred to
Burkett v. James (1978) A.C. 297 for the proposition that the lack of prejudice was a relevant consideration to be taken into account even when the delay has been substantial.

Conclusion

After careful consideration of the polished arguments which were presented, bearing in mind that the provisions to dismiss for want of prosecution are to be applied sparingly, and accepting that this is the first time that the Crown has taken an objection as to delay in setting down an appeal under the Stamp Duties Act, I have come to the conclusion that the objection should be allowed and an order made pursuant to r. 97.06(2) dismissing the appeal for want of prosecution.

  • 1. On a proper construction sec. 24(1) permits an objector to the payment of duty under the Act to forward to the Treasurer an objection OR to appeal to the Supreme Court. Once the Treasurer has confirmed the assessment (subsec. (2) of sec. 24) and the objector is still dissatisfied (subsec. (3)) then within 21 days the objector may appeal to this Court. That is what happened in this appeal.
  • 2. I am satisfied that an appeal under sec. 24(1)(b) or 24(3) is in substance and procedurally the same type of appeal. This Court can only in my judgment, dispose of any appeal (whether a sec. 24(1)(b) type or a 24(3) type) by the appellant (once the appeal is instituted, i.e. by serving the notice of appeal) requiring the Commissioner (who is the only person who can assess the duty) to state and sign a case ``setting forth the question upon which his opinion was required and the assessment made by him''. In my judgment the express

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    words of subsec. (4) make it imperative for such a case to be before this Court so that the appeal can be heard and determined. On the clear wording of sec. 24 I have come to the conclusion that I must reject the arguments put to me in this regard by counsel for the appellant. There is no alternative under the provisions of sec. 24 in South Australia. I remain unconvinced that the provisions of sec. 23, particularly prior to the recent amendments which did not apply to this assessment, can in any way alter this construction of the procedural requirements contained in sec. 24. Furthermore I am confirmed in this view by the interpretation placed on more ``permissive'' terms in the Victorian and Queensland Acts by the decisions in Cuming Campbell (supra) in Victoria and O'Sullivan (supra) in Queensland.
  • 3. In my judgment on 1 January 1987 the new Rules applied to this appeal. It is not possible (since 1 January 1987) in my judgment, to excuse the failure to serve nor the failure to set down the appeal within three months. No possible excuse has been put forward to this Court. The total failure in this regard has matured into an inexcusable delay.
  • 4. The provisions of r. 95.11(3) operate. The appeal has lapsed on the ground that it was not set down within 12 months. In the absence of any extension of time which was not applied for by the appellant, and in the absence of any ``special circumstances'' which have not been identified in the affidavits nor in the arguments put to me. I am satisfied that it is appropriate to dismiss the appeal in the light of the fact that it has lapsed under the Rules.

I order that the appeal be dismissed for want of prosecution pursuant to r. 97.06(2). I shall hear the parties as to the proper orders (if any) that should be made as to costs of the appeal, including any order as to who should pay those costs. I hereby give notice (as I indicated orally during counsel's submissions) that I consider the appellant's solicitors prima facie should bear the responsibility for such costs; see Kenny v. The State of South Australia (supra) at p. 7 per King C.J.


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