COLES MYER LTD v COMMISSIONER OF STAMP DUTIES (QLD)

Judges: McPherson SPJ

Derrington J
Moynihan J

Court:
Full Supreme Court of Queensland

Judgment date: Judgment handed down 7 March 1991

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Derrington J

The abovenamed appellant as proposed lessee entered into an agreement with a developer to lease a retail shopping centre which was to be constructed for a term of twenty-seven years from the date of commencement of the lease. Pursuant to that agreement the parties later executed a lease for that term. Between the execution of the agreement for lease and that of the lease a relevant amendment was made to the Stamp Act which has led to this appeal.

The agreement for lease was stamped shortly after its execution in accordance with the terms of the Act at that time. They provided that in respect of a lease or an agreement for lease for a prescribed term, which applied to the term in the present case, the stamp duty was to be assessed and paid on each successive three year term, on each of which occasions its value could be progressively assessed. After the amendment to the Act a lease or agreement for lease of such duration is to be assessed and duty paid in respect of the entire term of the lease in the first instance. This means that the entire duty is payable immediately instead of being spread out at three year intervals over the entire period of lease as the Act formerly provided.

When the instrument of lease was executed after the amendment, the Commissioner assessed duty upon the basis of the Act as it now stands but has allowed the appellant credit for the amount of duty already paid upon the agreement for lease in respect of the first three years of the term. The appellant claims that because the agreement for lease was assessed under the provisions of the Act prior to the amendment, it had the right, within the meaning of that term in s. 20 of the Acts Interpretation Act 1954, to have the lease also assessed and stamped under the terms of the Stamp Act which were then in force. The foundation for this suggested right is to be found in the former s. 62(2) of the Act which was repealed by the amendment. It provided that a lease made subsequently to and in conformity with an agreement for lease which had been duly stamped should be charged with duty of $1.00. Because, it is said, the agreement for lease had been duly stamped, albeit in respect of the first three years of the term only, the appellant had the right to have the lease stamped at $1.00 whenever it was executed and even after the amendment.

It is as well to set out the relevant legislation. The first is s. 62 of the Stamp Act prior to the amendment which the appellant says is the source of its right. It reads:

``62. Agreement for lease to be charged as lease. [54 & 55 Vic. c. 39, s. 75.]

62(1) An agreement for a lease, or with respect to the letting of any lands, is to be charged with the same duty as if it were an actual lease made for the term and consideration mentioned in the agreement.

62(2) A lease made subsequently to and in conformity with such an agreement duly stamped is to be charged with the duty of $1.00 or the equivalent of the stamp paid in respect of the agreement, whichever is less.''

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ATC 4248

Secondly, where relevant, s. 20 of the Acts Interpretation Act 1954 reads as follows:

``20.

(1) Saving of operation of repealed or expired Act as regards rights and liabilities thereunder, etc.

Where any Act repeals or amends or has repealed or amended wholly or in part any former Act, or any Act or part of an Act expires or has expired, then, unless the contrary intention appears, such repeal or amendment or expiry shall not -

• ...
• (c) Affect any right, interest, title, power, or privilege created, acquired, accrued, established, or exercisable, or any status or capacity existing, prior to such repeal or amendment or expiry;
• ...

(2) Matters in progress may be concluded under repealed enactment.

Any Act or enactment, notwithstanding the repeal or expiry thereof, shall continue and be in force for the purpose of continuing and completing under such repealed or expired Act or enactment any act, matter, or thing commenced or in progress thereunder, if there is no substituted Act or enactment adapted to the continuance and completion thereof.''

It is a primary principle of the law relating to stamp duties that the duty is assessed upon the instrument and not upon the transaction (
Oughtred v. Inland Revenue Commissioners (1960) A.C. 206 at p. 227 ). Moreover, ``in determining the category to which the instrument is to be assigned, its character is to be ascertained by considering its legal effect at the date of execution'':
Wm. Cory & Son Ltd v. Inland Revenue Commissioners (1965) A.C. 1388 as understood in
Comptroller of Stamps (Vic.) v. Ashwick (Vic.) No. 4 Pty Ltd 87 ATC 5064 ; (1987) 163 C.L.R. 640 at 654 ; and consistently with this s. 4(2) of the Act makes duty exigible upon an instrument at the date of execution. By parity of reasoning its exigibility to duty under the subject provisions should be determined at the same time, that is, its date of execution.

The stamping of the agreement for lease meant that if the lease had come into existence while the earlier provisions were in force then it would have been exigible for duty at the rate then prescribed even if it had not been stamped prior to the amendment. But the section prescribing the rate in those circumstances did no more than that. In other words, it provided for the appropriate duty in respect of each of sequential events, that is, the execution of the agreement for lease and the lease if they should respectively occur during its operation. But although it set the rate of duty of the later event at a certain level contingently upon the duty's having been paid in respect of the first event, this does not mean that the same rate of duty continued to be set simply by the appellant's having paid the duty in respect of the first event. Before the provision operated in that way the discharge of another contingency was required by the legislation, that is, the execution of an instrument of lease. Because this did not occur while that provision of the Act was in force it had no operation. Accordingly when that formula was gone and replaced by another which was applicable when the lease was executed, then the latter became the legislation controlling the assessment of duty upon it. This is made clear by contrast with the position referred to above which would have obtained if the lease had been executed before the amendment, even if it were not stamped before that date.

The legislation in the present case may be contrasted with that in
Free Lanka Insurance Co. Ltd v. A.C. Ranasinghe (1964) A.C. 541 which gave to a party who was injured by the negligence of a person who was compulsorily insured under it and against whom he obtained a decree for damages the right to recover those damages up to a limited sum from the compulsory insurer. The Privy Council held that the right of a party injured during the life of that legislation was preserved notwithstanding that he did not obtain any decree before the legislation was repealed. It is obvious that as a matter of substance it was the arising of a cause of action against the insured party which gave the injured party his right under the legislation, and the obtaining of a decree for damages was no more than a machinery requirement necessary to the quantification of the right. Consequently the right was held to be in existence before the repeal of the legislation notwithstanding that it may have been contingent or inchoate at the

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ATC 4249

time. As a matter of substance that is manifestly different from the position in the present case.

It is not possible in this case to find such a right. The occurrence of a contingency which is antecedent to and a precondition for the creation of a right by and upon the occurrence of a later event does not itself create the right. Nor does this position change when the later event occurs after a statutory change whereby the later event no longer creates the right. The mere statement of the position makes the result obvious. As the Privy Council observed in
Abbott v. Minister for Lands (1895) A.C. 425 at p. 431 :

``It has been very common in the case of repealing statutes to save all rights accrued. If it were held that the effect of this was to leave it open to anyone who could have taken advantage of any of the repealed enactments still to take advantage of them, the result would be very far-reaching.

It may be, as Windeyer J. observes, that the power to take advantage of an enactment may without impropriety be termed a `right'. But the question is whether it is a `right accrued' within the meaning of the enactment which has to be construed.''

The same principle was applied in
Total (Australia) Ltd v. Registrar of Companies (1969) V.R. 821 where a provision of the Companies Act provided that if a foreign company increased its capital, it should within one month after such increase lodge with the Registrar of Companies notice of the increase. The plaintiff, a foreign company, increased its capital at a time when it would have paid no fee upon the lodgment of the notice of the increase, but by the time it did lodge it a new enactment required the payment of a fee. Consistently with the above, it was held inter alia that the liability to pay a fee was to be determined as at the date of the lodgment of the notice and not as at the date of the increase in capital and the fact that the Act at the earlier time imposed no fee, taken alone, bestowed no right or privilege in the sense of the language of the provision, that is, a ``right or privilege acquired or accrued''. That is the position here.

It may be remarked that it is doubtful whether this question should be addressed in terms of the ``rights'' of the taxpayer. It is hardly a right to have to pay tax even though it may be possible to claim that the tax should be paid at a lower rate. Rather is it a question of construction of the statute. For example, in the hypothetical circumstances that the lease in the present case had been executed before the amendment then, because it was exigible for duty at the time of its coming into existence the amount of duty was to be assessed at the old rate. The determination of that issue would have been simply a matter of construction of the statute. It would not have amounted to the upholding of any right in the taxpayer flowing from the execution of the lease prior to the amendment. It is perhaps unfortunate that this inappropriate concept has intruded into the exercise, with unnecessary complications.

For the above reasons the appeal should be dismissed with costs.

[ Moynihan J agreed with the reasons of McPherson SPJ and Derrington J.]