Austell Pty. Ltd. v. Commissioner of State Taxation (W.A.)
Judges:Brinsden J
Court:
Supreme Court of Western Australia
Brinsden J.
This is an appeal pursuant to sec. 33 of the Stamp Act 1921 and amendments (the Stamp Act) by the appellant being a person dissatisfied with the decision of the Commissioner, the respondent, on an objection in respect of the stamping of an agreement being a contract to purchase a fishing boat made between the appellant and certain persons who will be collectively known as the vendors. By the agreement dated 1 June 1988 the appellant agreed to purchase and the vendors agreed to sell the following:
- (i) a fishing vessel known as fishing boat ``Valiant'' and bearing Licence No. LFB F156 (the fishing vessel);
- (ii) all equipment related to catching or used in connection with the fishing vessel including a Ford F250 truck (the related equipment); and
- (iii) a cray fishing licence issued to the vendors by the Department of Fisheries and bearing Licence No. 1495 (the cray fishing licence).
The purchase price was allocated by the terms of the agreement as follows:
(a) vessel and related equipment $49,349
(b) the cray fishing licence -
122 pots $1,110,000
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$1,159,349
less payout on Toyota Hilux $ 9,349
----------
$1,150,000
----------
Section 16(2) of the Stamp Act provides that the duties specified in the Second Schedule shall be subject to the exemptions specified in the Third Schedule. Item 2(7) of the Third Schedule lists as one of the items exempt from stamp duty, ``A conveyance or transfer of any estate or interest in... any ship or vessel, or part interest or share or property of or in any ship or vessel''. The same provision also exempts goods, wares and merchandise. The Commissioner issued an assessment of $42,702 being stamp duty assessed on the cray fishing licence and $2 for the duplicate agreement but otherwise did not charge duty on any other of the items in the sale. There is no complaint about the arithmetic involved in the calculation of stamp duty but the appellant says that the cray fishing licence was not dutiable for three reasons:
- 1. The cray fishing licence being a Limited Entry Fishing Licence is not property within the meaning of sec. 74 or 75 of the Stamp Act.
- 2. Alternatively, if the licence is held to be property within the meaning of that Act, there was no conveyance on sale of the same.
- 3. In any event, the transaction was one which was exempt from the payment of stamp duty as it fell within item 2(7) of the Third Schedule of the Stamp Act.
A statement of agreed facts, and a supplementary statement of agreed facts, were filed. From these documents the agreed facts appear to be as follows.
The cray fishing licence was a licence to engage in a Limited Entry Fishery issued pursuant to reg. 3B of the Fisheries Regulations 1938 authorised pursuant to the provisions of the Fisheries Act 1905 and amendments, (the Fisheries Act). A true copy of the fishing licence was attached to the statement of agreed facts, all the relevant parts of that licence are set out hereunder:
``LICENCE TO ENGAGE IN A LIMITED ENTRY FISHERY
Name and Address of Licensee
C & JL BASILE - P & MC MERLINO
10 PLANTAGENET CRES
HAMILTON HILL 6163
Subject to a notice issued under Section 32 of the Fisheries Act 1905 as amended the boat described hereunder is authorised to be used in the taking of WESTERN ROCK LOBSTER
- in the WEST COAST ROCK LOBSTER Fisher from ZONE C only.
1. Name of Boat: VALIANT
- Registration No: LFB F156
- Length: 14.3m
- Authorised Number of Pots 122
CONDITIONS -
This licence is issued subject to boats and persons engaged thereon being licensed under the Fisheries Act Regulations.
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No ADDITIONAL CONDITIONS
Term of Authorisation: 01.07.87 to 30.06.88
- File No: 349/84
(Licensing Officer)''
The above licence was the licence issued in the name of the vendors. The licence which ultimately issued in respect of the appellant was identical except the appellant's name appeared in lieu of that of the vendors and the term of authorisation was from 01/07/88 to 30/06/89. There was one other difference and that was in respect of the authorised number of pots which, in the vendors' licence appeared as 122 but in the licence produced along with the statement of agreed facts it is shown as 108. That is because 10 pots were disposed of as will hereinafter appear, and, by reason of the provisions of Notice No. 253 issued under sec. 32 of the Fisheries Act, and in particular cl. 17 and Sch. 2 of the notice. It will also be noted that the licence is a licence to engage in a Limited Entry Fishery. How that comes about is as follows.
Section 32(1) provides that the Minister may, by notice published in the Government Gazette, declare any fishery in which fish are taken for sale or disposal for gain or reward, to be a limited entry fishery. A notice under subsec. (1) by subsec. (2) may specify a number of things, the relevant ones being, for the purposes of these proceedings, as follows:
``(c) the criteria which would be applied to determine the boats or persons which may operate in that fishery;
(d) the maximum number of fishing boat licences and professional fisherman's licences which may be issued or endorsed so as to authorize the boat or person licensed to operate in relation to that fishery;
(g) the number and type of fishing gear and fishing boats authorized to operate by such a licence or endorsement;
(h) the manner, time, period and area of fishing and the means of capture that may or shall not be used either by specified boats or by all boats or by specified persons or by all persons;
(i) the method of giving notice from time to time of the names and addresses of licensees authorized to engage in that fishery or in any specified operation in that fishery;
(j) the names and registration number of boats so authorized; and
(k) the method by which boats or persons authorized to operate in that limited entry fishery shall be replaced, and by which an authorization may be transferred.''
Subsection (3) provides that a licence or endorsement ``authorizing a boat or person to operate in a limited entry fishery'' shall be granted, and renewed, subject to the payment by the licensee of the prescribed annual fee. By subsec. (4), a notice declaring any fishery to be a limited entry fishery, may be varied or revoked by the Minister on publication in the Government Gazette. By subsec. (5), a person who is not the holder of a professional fisherman's licence may take or keep any fish, the subject of a limited entry fishery, for his own personal use or pleasure, but must not sell or otherwise dispose of that fish. Subsection (6) provides for offences in respect of a person who is not authorised to do so by licence or endorsement granted under the section and who in any limited fishery takes any fish for the purpose of sale or other disposal for gain or reward. Subsection (7) provides stringent penalties in respect of the commission of an offence contrary to the section and where a person is convicted of an offence, subsec. (7)(a) provides that the Director of Fisheries by notice in writing to the holder of the licence of the boat used to carry, set, use or pull the rock lobster pots, the subject of the offence, shall vary the authorisation granted in respect of that boat by reducing the number of rock lobster pots specified in the authorisation. There is also provision in respect of a second or subsequent offence for every boat found to have been used in the commission of that offence to be liable to be ordered to be forfeited to Her Majesty.
Turning to the provisions of Notice 253, which was published in the Government Gazette on 10 April 1987, by cl. 4 it declares that rock lobster shall constitute a limited entry fishery in the waters described in item 1 of Sch. 1 called the ``West Coast Rock Lobster Limited Entry Fishery''. Clause 5 prohibits a person taking or attempting to take rock lobster by any means in the waters described in Sch. 1 other than in accordance with the notice, and by subsec. (6) a person shall not sell or deal or
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attempt to sell or deal in any way with rock lobster taken in contravention of the notice. Clause 7 is significant since it provides the criteria that shall be applied to determine the boats which may operate in the fishery. They are:``(a) that immediately before the coming into operation of this notice the owner or person in charge of a boat was the holder of a licence authorizing the boat to be used to take rock lobster in the West Coast Rock Lobster Fishery from 15th November 1986 to 30th June 1987; or
(b) that the boat replaces a boat to which paragraph (a) applied.''
Clause 8 provides:
``The owner of a boat which fulfils the criteria in cl. 7(a) or (b) may apply in accordance with cl. 21 for a licence authorizing the boat to operate in the fishery.''
Clause 13 states:
``With the written approval of the Director a licence granted under this notice may be transferred and the licence shall be endorsed accordingly.''
By clauses 14 and 15, the Minister is empowered to renew, remove, suspend, transfer or cancel with or without conditions, any licence or endorsement issued under the notice and he may close any part of the fishery and if he does so a person shall not carry, set, use or pull any rock lobster pot in that part of the fishery during the period of closure. Clause 17 limits the maximum number of rock lobster pots which may be used by a boat for periods commencing on 15 November in each of the years 1987-1991 and ending 30 June in the following respective years, being the number authorised for use by that boat as at 16 July 1986 reduced in accordance with Sch. 2. Clause 19 provides that subject to cl. 11 the director may approve the transfer of rock lobster pots from one licensed boat to another licensed boat. Clause 20 provides that subject to the prior written approval of the director, a boat licensed to operate within the Limited Entry Fishery may be replaced by a boat of certain specified dimensions. Clause 21 provides that applications under cl. 8, 11, 13 and 20 shall be in the approved form, lodged in accordance with the instructions, if any, and accompanied by the fee prescribed by the regulation.
As a lot of the argument turned on the nature of a licence to engage in a Limited Entry Fishery, it is necessary to look at other provisions of the Fisheries Act and regulations. Section 17(1) is in these terms:
``The granting, renewal, removal or transfer, whether with or without conditions as hereafter in this section mentioned, of any licence shall not be deemed to be as a right, but shall, subject as hereinafter provided, be in the discretion of the officer appointed to issue licences (hereinafter in this section referred to as `the Licensing Officer').''
Subsection (2) obligates the Licensing Officer to obey the directions of the Minister. Subsection (3) provides that:
``Subject to any direction of the Minister, the Licensing Officer may in his discretion grant, renew, remove or transfer any licence, upon conditions which shall be reduced to writing and may be endorsed on the licence.''
The balance of the subsection refers to the conditions which may be imposed. It is not necessary to go to them. Subsection (4) provides that any person who considers himself aggrieved by the refusal of a licence or of the the renewal, removal, suspension, cancellation or transfer of a licence, or by the imposition of any one or more of the conditions, may appeal to the Minister, who may if he thinks fit, direct the licence to be issued, removed, renewed, restored or transferred or remain suspended or cancelled as the case may be.
It can be seen that sec. 17 does provide the Minister with very strong powers over who should or should not be granted or have transferred to him, a licence, and perhaps subsec. (4) emphasises that by providing an appeal which, in effect, is from Caesar to Caesar. Nevertheless the section does contemplate that, subject to restriction, a licence may be transferred. Furthermore, such discretionary powers granted to both the Minister and the Licensing Officer, would have to be exercised for the purposes for which they were granted and in conformity with the policy discernible from perusal of the Act, and in accordance with the provisions of natural
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justice: de Smith's Judicial Review of Administrative Action 4th ed. p. 96. Furthermore, from the recited regulations, and in particular pursuant to Notice 253, it can be seen a licence to engage in a Limited Entry Fishery is of value, and perhaps of increasing value in view of the provisions of the notice which strictly limit who may apply for a licence. It would be inconceivable therefore that a licence could be revoked on the mere whim of the Minister unless there be justifiable reason consistent with a bona fide administration of the Act. And the same goes in respect of the transfer of a licence. The Act also contains provisions which go to assist a licensee enjoying the fruits of the licence since sec. 26B and 27 impose penalties for unlawful interference with fishing and for damaging lawful nets. Section 55 provides that a person who is the holder of a licence who has been convicted of an offence against the Act shall be liable, in addition to any other punishment, to the suspension or cancellation of his licence at the discretion of the Minister. By sec. 55A, cancellation is directed at a boat for it provides by subsec. (1) that if on three or more occasions in any period of 10 years, a boat, in respect of which a licence has been issued under sec. 17, has been used for or in connection with the commission of offences against the Act in respect of which convictions have been obtained, the licence so issued in respect of that boat and in force at the time of the third or subsequent conviction, is by virtue of the subsection, and without any further statutory authority, cancelled, ``whether that licence is held by any of the persons convicted or by some other person''. That provision is followed through where there has been a replacement of the original licensed boat by another boat. Regulation 3H(3) inferentially recognises that the value of a licence to operate in a Limited Entry Fishery is to some extent equated with the number of pots since the fees payable on an annual basis are to be calculated by multiplying the number of pots authorised to be carried on the fishing boat by the amount of $18. The value of the licence, however, need not be laboured since the parties themselves placed a value of $1,110,000 in respect of 122 pots, approximately $9,098 per pot. Subsequently, after the licence was transferred to the appellant, it applied for approval to the Licensing Officer for transfer of 10 of the pots to another vessel. The total sale price was $86,000 and the transfer was approved.I now turn to the supplementary statement of agreed facts where it is said that an application to engage in a Limited Entry Fishery is made to the Fisheries Department in writing on a form provided by the Department. However, no applications in respect of the West Coast Rock Lobster Fishery have been accepted since 1 March 1963 when the Fishery was closed to the issue of additional licences. Thus, there is further indication of the value of such a licence. The same form was used until 1985 for an application for a new licence and the renewal of an existing licence to engage in a Limited Entry Fishery. A true copy of the application form completed by the vendors to renew the licence first issued to them on 29 September 1975 for the boat ``Ross Valiant'' was attached to the statement. That form reveals the vendors stated that being the owner they applied for a licence to operate the boat described in the application form in the taking of Western Rock Lobster in the West Coast Rock Lobster Limited Entry Fishery. They certified that the boat described is a licensed fishing boat and that all persons engaged thereon are licensed professional fishermen, and then followed a description of the boat. In 1985 the Fisheries Department abandoned the practice of forwarding application forms for completion by licence holders in respect of licence renewals and introduced a computer licensing system under which the licence form with all relevant details is sent to the licensee who renews it by returning the form with the prescribed fee. I have already referred to the form of licence.
On 11 October 1983 the vendors applied to the Fisheries Department to replace the ``Ross Valiant'' with a new vessel named ``Valiant'' being the same vessel the subject of the agreement. The application was in conformity with the provisions of Notice 253 cl. 19. Applications to transfer a boat authorised to engage in the West Coast Rock Lobster Fishery are made to the Fisheries Department in writing on a form provided by that department. A true copy of the form was annexed to the supplementary statement. The document is headed, APPLICATION CONCERNING THE TRANSFER OF A BOAT AUTHORISED TO ENGAGE IN THE WEST COAST ROCK LOBSTER FISHERY. Part A must be completed by the owner or appointed agent of
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the boat and Part B has to be completed by the purchaser. That was done in this case. In Part A the vendors stated that being the owner of the fishing boat ``Valiant'' they applied for ``your approval to transfer this boat with the rock lobster fishing rights attached thereto''. Then followed provisions for the inclusion of the sale price which was stated as $1,150,000. On the second page of the application form the vendors agreed by their signatures to the document, that ``If approved, we forfeit all rock lobster fishing rights in respect of this boat to the purchasers named above, and upon completion of the sale, the Limited Entry Fishery Licence held by me in respect of this boat will be forwarded for endorsement of the transfer''. Part B which is to be executed by a proposed purchaser, and in this case it was executed by the appellant, seems to be designed to make certain that a purchaser is aware of the history of the boat, particularly any endorsements currently on the licence, the pot entitlement, and awareness that the number of pots for the vessel will be reduced by 10% in accordance with the provisions of Notice 253. Annexure ``K'' was a letter in pro forma style which was forwarded by the Department upon receipt and approval of the application to transfer this particular vessel, the ``Valiant'', together with the attached rock lobster fishing rights. The letter states that the application to transfer the fishing boat ``Valiant'' with the rock lobster fishing rights attached thereto, is approved subject to certain conditions to which there is no need to go. I am informed that it is the practice of the Director of Fisheries to approve the transfer of a licence authorising a boat to be used in a Limited Entry Fishery and he will normally do so subject to certain administrative checks. Furthermore, it is the practice of the Director to approve the replacement of a licensed rock lobster fishing boat and he will normally do so, again, subject to certain administrative checks. Likewise, he will also approve the transfer of rock lobster pots from one licensed rock lobster boat to another. From cl. 16 of the Supplementary Statement, I am informed that the Fisheries Department treats rock lobster fishing rights as attaching to a licensed boat. The access to the fishery cannot be sold from the licensed fishing boat as a separate authorisation, and at the same time have the fishing boat, to which it was previously attached, retain its limited entry fishing licence. When a boat totally redistributes its pots, the fishing boat licence is cancelled. The pots are added to the authorisations of other licensed rock lobster boats. The boat itself becomes an unlicensed hull and may be used as a replacement boat within the fishing industry. When a licensed fishing boat and the associated rock lobster fishing licence are sold or transferred as a total package to a new owner, after payment of appropriate licence fees and appropriately amended fishing boat licence and West Coast Rock Lobster Limited Entry Fishing Licence displaying the new owner's names are produced but the actual licence numbers do not change.What then, is the nature of a licence to engage in a Limited Entry Fishery? It seems clear enough that a particular boat is authorised to be used to take rock lobster in the West Coast Rock Lobster Fishery: see for example, cl. 7 in Notice 253, the actual licence issued to the appellant which describes the boat as being ``authorised to be used in the taking of western rock lobster'' and for example, the approval of an application to transfer from one boat to another in terms that ``the rock lobster fishing rights attached to this vessel will be transferred to the new vessel''. Of course, a boat needs somebody to own and operate it. The system seems to be that the owner of the boat is for the time being, the holder of the licence authorising the boat to be used to take rock lobster. Hence it is correct to speak, as does cl. 7, of the owner or person in charge of a boat as being the holder of the licence authorising the boat to be used to take rock lobster. It seems that the current administrative procedure of the Fisheries Department contemplates a transfer of a licence as between owners only, as the application for approval of a transfer form makes no reference to a person in charge as being the holder of a licence. The application is for approval to transfer the boat with the rock lobster fishing rights from the owner to the prospective owner. No question arises which involves any consideration of the transfer of the authorisation which attaches to the boat. What the Fisheries Department is concerned about is, who owns the boat and who will be operating it exploiting the advantage of the licence attached to it. This system makes sense when it is appreciated the intention of the Department, evidenced by Notice 253, is to reduce and control the exploitation of rock lobster fishing, and that is best achieved by limiting the number of boats able to exploit the fishing grounds and
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also the number of pots each boat is entitled to utilise. The Department would, of course, need to control to some extent, the identity of owners of licensed boats because there may be occasions when an owner seeks to transfer the ownership of the boat and the advantages attaching to it, to some person who, for example, may have breached the provisions of the Act on a number of occasions and in the Department's view, would be an unsuitable person to be allowed to fish for rock lobster. I do not believe the passage in the application form which reads on the part of the vendor ``We forfeit all rock lobster fishing rights in respect of this boat to the purchasers'' contradicts what I have said. Such a provision is probably unnecessary, since it seems that it would inevitably follow from the licensing system which the Department has set up that the transfer with approval of the Department, of the boat from one owner to another, carries with it to the exclusion of the former owner, all rights which attach to the boat. The system, however, which has been set up, is such that only owners of boats are authorised to exploit the authorisation which attaches to the boats to be used to take rock lobster in the West Coast Rock Lobster Fishery. Nothing in the Act or regulations could prevent one owner from transferring the ownership to somebody else. But without the authorisation of the Department, the right to exploit the authorisation attaching to the boat would not pass to the new owner. What the vendors agreed to sell to the appellant in this case was not only the boat but the right to exploit the authorisation attaching to the boat, subject, of course, to the consent of the appropriate authority: see cl. 4 of the Agreement. A licence, therefore, may be regarded as a twofold thing. Firstly, it authorises a particular boat to be used to take rock lobster and the number of pots, and at the same time it licenses a particular person, the owner, to exploit that authorisation.The appellant says in effect, that this right, which formerly was that of the vendors, to exploit the authorisation attaching to the boat, is not property within the meaning of the Stamp Act sec. 74 or 75. I have been referred to a number of cases on what is property within the meaning of stamp duty legislation in other jurisdictions and generally. I do not find the cases of
Wood v. Leadbitter (1845) 153 E.R. 351 and
Cowell v. The Rosehill Racecourse Co. Limited (1936-1937) 56 C.L.R. 605 of much assistance. Those cases were dealing with whether a licence, although given for value, created a proprietary interest in land or merely a contractual right only. Nobody in this case suggests for a moment that the licence to engage in a Limited Entry Fishery confers any proprietary right over the fishery grounds or any rock lobster, though of course, it does involve the right to use the boat, the subject of the licence, for a particular purpose. I must say I would have thought that if a person bought this particular licence, he had an interest that could be called property in the ordinary meaning of the word as used by laymen: see Pollock B. in
The Smelting Company of Australia Limited v. I.R. Commrs (1896) 2 Q.B. 179 at p. 184. The question, however, is whether it is property within the meaning of the Stamp Act.
A case heavily relied on by the appellant is
The Commissioner of Stamp Duties (N.S.W.) v. Yeend (1929) 43 C.L.R. 235 and in particular the judgment of Isaacs J. That case concerned an agreement between a racing club and one S conferring on the latter for valuable consideration the sole right of supplying refreshments to be sold and disposed of within two reserves during race meetings to be held on the club's courses for a period of 3 years. Yeend and two other persons entered into a joint and several bond with the club to secure the due performance by S of the contract. S died and by an agreement between Y and the club it was arranged that Y should carry out the terms of the original agreement in place of S. It was held that the agreement was not within sec. 41(1) or 65 of the Stamp Duties Act, 1920 (N.S.W.) because it was an executory contract giving rise to a mere personal right of selling refreshments with ancillary stipulations. Such a right was not ``property'' within the meaning of the Act. Some support for a narrow interpretation of the word ``property'' standing alone can perhaps be found in the reasons of Isaacs J. at p. 245 but as McPherson J. pointed out in
Bailey v. The Uniting Church in Australia (1984) 1 Q.R. 42 at p. 57 the joint reasons of the other members of the Court (Knox C.J., Gavan Duffy, Rich and Dixon JJ.) made it clear that what they construed was not simply the word ``property'' but the expression ``conveyances of any property'' viewed as a
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composite whole and that it was the interpretation which they placed upon that phrase that led them to conclude the contract in question was not within the bounds of that composite. That this is the true ratio of the case can be seen from their joint judgment at pp. 240-242. After having referred to the definition of ``property'' contained in sec. 3 and the definition in sec. 65 of the word ``conveyance'', their Honours went on to say:``We think a safe way of ascertaining the meaning of sec. 65, as affected by the definition of `property' in sec. 3, is to read and interpret the section as if that definition were written at length into it. So reading it, sec. 65 would run: For the purposes of this Act the expression `conveyance' includes any transfer, lease, assignment, exchange, appointment, settlement, surrender, release, foreclosure, disclaimer, declaration of trust, and every other instrument (except a will), and every decree or order of any Court whereby any property in New South Wales including real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest is transferred to or vested in or accrues to any person. Wide as must be the operation of a provision thus expressed, it seems unnatural to apply its words to a document which does no more than describe mutual promises although they result in contractual rights. In this case the document expresses an ordinary simple contract, executory on both sides. Each contracting party incurred obligations to the other. A `right' to the performance of those obligations was, of course, created in the other, subject to his readiness and willingness to perform his own obligations. But the section relates to instruments by which the right is vested in or accrues to a person. This expression is appropriate enough to proprietary rights, but not one which may aptly be applied to the right to enforce an executory contract contained in the document. If this provision bore the wide meaning which the argument attributes to it, sec. 41(1) and 71 would be superfluous. It is worth notice that, while decrees and orders are included in the definition of `conveyance' judgments are not. A decree or an order may vest property as that expression is ordinarily understood. But a judgment ordinarily creates a right - a right to enforce the payment of a sum of money by some person. The right is correlative to an obligation - a personal obligation. Such rights arise out of many relations, but it would not be usual, when the relation is established by a document, to speak of such a right as one which was vested in or accrued to a person by the instrument. Indeed, an inspection of the Second Schedule to the Act will show that nearly all the various documents other than `conveyance' there specified might be brought within the phrase if it received so extensive a meaning. We think that, if sec. 65 is read with the definition of `property' written in it, no one would naturally understand the words `instrument whereby any property in New South Wales including any right or interest is vested in or accrues to any person' to apply to the mere contractual right of a party to an executory contract in writing. It seems unnecessary and undesirable to attempt to formulate the limitations which must be placed upon the generality of the language contained in the definition of the language contained in the definition of `property'. It is enough to say that sec. 65 cannot by its aid be extended to such a contract as we have described.''
Now as I understand their Honours they did not say that had Yeend entered into a contract with some other person to sell his rights under the agreement with the club, such an agreement would not be liable to ad valorem stamp duty. Yeend's case is, I think, authority for the proposition that the licence created by the approval of the appropriate authority, to license in consideration of a fee, the ``Valiant'' in accordance with Notice 253, would not be subject to stamp duty since there would be conferred only a personal right in the owner of the boat to exploit the authorisation. But it is not authority for the proposition that the sale of that right cannot amount to the sale of an estate or interest in any property chargeable with duty under sec. 74(1). See also the decision of Jordan C.J. in In the Estate of McClure (1948) 48 S.R. (N.S.W.) 93 where his Honour said:
``We were pressed with the decision of the High Court in Commissioner of Stamp Duties (N.S.W.) v. Yeend; but that case lends no assistance to the executors. The question there was whether an agreement which created a mere personal licence to sell
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refreshments on certain premises was dutiable as a conveyance of property; and it was held that it was not. It is obvious that there is a vital difference between a transaction which creates a personal right that did not previously exist, and a transaction which transfers from one person to another a transferable personal right which is already in existence. This is well brought out in the reasons of Greene M.R. in
Re: V.G.M. Holdings Ltd. (1942) 1 All E.R. 224 at p. 226.''
``Property'' is not defined in the Stamp Act. It is a word of ``very general meaning and comprehensiveness'': see Pollock B.in Smelting Company of Australia at p. 183 and I see no reason to read it down for the purposes of the Act. In Smelting Company of Australia the question raised was whether an agreement for the sale of a sole licence to exercise a colonial patent in a certain district of New South Wales, and of a half-share in the patent, was subject to stamp duty under the Stamp Act, 1891 of the United Kingdom. As Pollock B. put it at p. 183, the first question which had to be determined was whether the licence was property at all, it being admitted that the patent itself came within the meaning of that expression. Pollock B. had no difficulty in reaching the conclusion that the agreement for the sale of the share in the patent and the licence was liable to ad valorem duty. An attempt was made to distinguish this case by saying that the licence was somehow or other attached to the patent which was admittedly, property. That undoubtedly is true, but I do not see it amounts to a distinction. In any event, the licence granted to the vendors to exercise the authority attached to the boat seems to me not dissimilar from a licence to exercise a patent.
I need refer to two other cases
Banks v. Transport Regulation Board (1968) 119 C.L.R. 222 and
Pennington v. McGovern (1987) 45 S.A.S.R. 27. In Banks a preliminary question arose whether the judgment of the Supreme Court on appeal to the High Court involved directly or indirectly a question to, or respecting property or a civil right of a value in excess of $3,000 (sec. 35(1)(a) of the Judiciary Act, 1903-1965). The property or civil right to which Banks pointed was the licence he held to operate a taxicab, which was a commercial passenger vehicle within Pt II of the Transport Regulation Act, 1958 in the State of Victoria. In his reasons for judgment, Barwick C.J. examined the provisions of that Act in respect of the nature of a licence granted pursuant to it and the provisions relating to cancellation and transfer. As he saw it, the question was whether that licence was property or a civil right. His Honour referred to the early decision of
Thomas v. Sorrell (1673) 124 E.R. 1098 and the reasons for judgment of Chief Justice Vaughan at p. 1109, which his Honour quoted stating that from that passage stemmed the repeated notion that a mere licence did not create any estate or interest in property to which it relates and that it only made an act lawful which without it would be unlawful. His Honour then went on to refer to the decision of Pollock B. in Smelting Company of Australia with approval. In his Honour's view there was no warrant to give the word ``property'' any narrow or technical meaning as it appeared in the Judiciary Act. He went on to say:
``In my opinion, it includes, to use Pollock B.'s expression, `property of whatsoever kind'. In my opinion, the licence granted under Part II revocable only in the stated circumstances and transferable to a fit and proper person, is property within the meaning of s. 35(1)(a)(ii) of the Judiciary Act.''
In Pennington, the Court of Appeal of South Australia held a fishing licence held pursuant to the Fisheries Act, 1982 and regulations, was a proprietary interest, and was capable of being the subject of a trust and of being transferred. King C.J. examined the relevant legislation to discover the nature of a licence granted pursuant to it and stated at p. 31:
``It is a transferable right which is contemplated as having value. The limit of six licences renders it likely, as a matter of common sense, that a licence will possess value. The system of competitive tenders clearly contemplates that the licence will have value. The valuable nature of the right is confirmed by its transferability and by its being linked in both the Act and the regulations with the registration of boat and equipment and to the transfer thereof.''
His Honour went on at the same page to state as follows:
``The provisions of the `regulations to which I have referred as to the contemplated value and transferability of the licence and as to
ATC 4914
the right to hold it notwithstanding that its exercise is subject to the direction and instructions of another, are all, to my mind, indicia of rights of property and I have no difficulty in reaching the conclusion that the rights conferred by the licence are proprietary in character.... I do not see the requirement that the transfer of the licence itself is subject to consent as an obstacle to a licence and the rights conferred by it being the subject matter of a trust.''
Apparently, it has been submitted to the Court that the licence held by the defendant was not the licence which was referred to in the deed under consideration by the Court but his Honour went on to point out that the annual renewal of the licence under the regulations did not change its identity. In his reasons for judgment in the same case, White J. concluded that the licence was valuable because it was one of the very few available and his Honour noted that the boat itself was worth only about one quarter of the purchase price. At p. 45 Legoe J. concluded that the fishing licence was proprietary in the sense that it was capable of being transferred in accordance with the fiduciary obligations which were placed upon the licence holder under the terms of the deed then in question and the events which had happened. The transfer of such licence was necessarily subject to the consent of the director but the beneficial owner under the deed was entitled to the transfer of that licence to a person albeit nominated by the beneficial owner, who was capable of complying with the provisions of the Act and regulations and to whom the consent of the director was given for transfer.
Both Banks and Pennington were sought to be distinguished by contrasting the provisions of the Fisheries Act and the regulations with the Acts and regulations considered in those cases. Having examined the Fisheries Act and the regulations, I do not believe they are significantly different from the South Australian Act and regulations. Clearly the licence is of value and it is capable of being transferred though that capability is stated to be not as of right but subject by the Act and/or regulations, to the consent of the Minister or Licensing Officer and/or Director: sec. 17 and cl. 13 of Notice 253. It is my belief that the transfer could only be refused for purposes which could be shown to be within the policy of the Act and regulations. It is true that the Act provides that the licence may be revoked but again it could not be revoked except within powers granted to the Minister ascertainable from the policy enunciated by the Act and regulations. Like King C.J. in Pennington I do not see the requirement that the transfer of the licence is subject to consent is an obstacle to the licence and the rights conferred by it being proprietary in nature and coming within the definition of ``property'' in the Stamp Act. I am therefore of the view that the Limited Entry Fishing Licence is property within the meaning of sec. 74 and 75 of the Act.
It is then said that if the licence be held to be property within the meaning of the Stamp Act, there was no ``conveyance on sale'' of the same. This issue necessarily starts with the consideration of the terms of the agreement which was an agreement for the sale of, inter alia, the fishing licence. Clause 4 provided that the contract was subject to the consent of any relevant authority to the transfer of any licence or licences being obtained and to that end ``the Vendors hereby undertake to the Purchaser that they will as and when required by the Purchaser deliver to the Purchaser any and all such forms and papers as may be necessary to give effect to this provision''. What the appellant says is that in strict legal terms there was no transfer of the licence from the vendors to the purchaser. It was the licensor who transferred the licence. Therefore, there was in this case no sale or transfer sufficient to constitute a conveyance on sale within the meaning of the Stamp Act. Whatever rights the vendors had in the Limited Entry Fishing Licence, they did not transfer them to the appellant. What happened was that they effectively agreed to give up their rights and allow the licensor to give to the appellant what he had previously given to the vendors. So far as the Limited Entry Fishing Licence was concerned, there was no transfer of anything from the seller to the buyer. A number of cases were referred to. There must be, to amount to a conveyance of property, a person conveying and a person taking:
John Foster & Sons Limited v. I.R. Commr (1894) 1 Q.B. 596; the notion of sale involves a transfer of the absolute or general property in the thing transferred and not the vesting of part of the estate of the transferor:
Ex parte Henry re. Commr of Stamp Duties (1963) N.S.W.R.1079
ATC 4915
;Littlewoods Mail Order Stores Limited v. I.R. Commrs (1963) App. Cas. 135.
I am of the opinion that what the vendors did in this case was that, for a consideration, they agreed to take all necessary steps to have transferred from them to the appellant the benefit of the authority attaching to the boat. In my view that constitutes a sale, even if the actual transfer is not effected directly by the vendor because of the intervention of a licensing authority. As it was put in Littlewood's case at pp. 151-152 by Viscount Simonds, there must be concurrence of a number of elements inter alia ``a thing the absolute or general property in which is transferred from the seller to the buyer; and (4) a price in money paid or promised''. This agreement provides for a price in money to be paid and paid only on the transfer of the licence.
Some point was made that contrary to the position under the South Australian legislation there is no provision in the Fisheries Act or the regulations which provides for the licensee to transfer his rights with the consent of the Director - compare reg. 23 of the South Australian regulations. Reference was made to sec. 17(1) of the Fisheries Act but in my view that section recognises that a licensee may wish to transfer his licence and it sets up machinery for achieving that object. In any event cl. 13 of Notice 253 provides that:
``With the written approval of the Director a licence granted under this notice may be transferred and the licence shall be endorsed accordingly.''
I am of the opinion that the agreement was an agreement for the sale of an estate or interest in the licence and would therefore be chargeable with the same ad valorem duty to be paid by the appellant as if the agreement were an actual conveyance on sale of that estate or interest, subject however, to the third proposition which I next consider.
The appellant says that even if an adverse view be taken of the first two propositions put up, the transaction was one which was exempt from the payment of stamp duty as it fell within item 2(7) of the Third Schedule. As I understand the appellant's argument, it is that the licence does not exist ``in gross'' but can only exist as attaching to a boat which satisfies the requirements of the Fisheries Act and Notice 253. The transfer of the boat takes with it the licence and thus the licence merely enhances the value of the boat and does not exist on its own. As that is so, the agreement amounted to a conveyance or transfer of an estate or interest in the boat which included the licence and was therefore not dutiable. There is a short answer to this proposition. The transfer of the boat, that is to say the transfer of the ownership of the boat without more, does not take with it the authority to utilise the Limited Entry Fishing Licence. I refer to what I said earlier, the licence links the owner of the boat to the authority granted to the boat. One cannot exist without the other. It is abundantly clear from the Act and Notice 253 that the licensing system involves licensing the owner of the boat whether original or a transferee owner to enjoy the authorisation of the boat for use in the Limited Entry Fishery. The licence is only attached to the boat in that sense. In any event the owner, with the consent of the requisite authority, may transfer the pots or any number of them to another boat and could, presumably, divest one boat entirely of its pot entitlement. An agreement to sell the boat without any corresponding agreement to sell the fishing licence would not result in the new owner obtaining a boat authorised to be used to take rock lobster. The previous owner would not retain the licence since the licence is only an authority to him to use that particular boat to take rock lobster. In short, the boat would simply become similar to a licensed boat of which the total rock lobster pot had been transferred: see cl. 19(5) of Notice 253. I therefore do not believe that this agreement, in respect of the sale of the licence, achieves any exemption under the Third Schedule.
For the above reasons, in my opinion, the appeal should be dismissed.
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