Between: TOOHEYS LTD
And: COMMISSIONER OF STAMP DUTIES (NSW)

Judges: Dixon CJ
Kitto J
Taylor J
Menzies J

Windeyer J

Subject References:
Taxation and revenue
Stamp duty
Exemptions
Deed between company and trustees establishing pension scheme for employees
Meaning of 'declaration of Trust'

Legislative References:
Stamp Duties Act 1920 (NSW) - Second Schedule

SYDNEY

Judgment by:
WINDEYER J

I have come to the conclusion that, substantially for the reasons given by Walsh J. in the Supreme Court, the instrument in question is within the description in par. (2) under the heading "Declaration of Trust" in the second schedule to the Stamp Duties Act, 1920-1956 (N.S.W.).

I also agree with Walsh J., that it cannot be said to have been made "for money or moneys worth" passing from those who may become entitled to benefits under it. It is, of course, true that the relationship of master and servant today often involves much more than an obligation to pay wages on the one hand and to render services on the other. The right or the opportunity to participate in benefits provided by an employer, such as superannuation schemes, is something that a servant gains by working for that employer. It is part of the reward of his labours. It is not the produce of pure philanthropy on the part of the employer. But that does not, I think, mean that in cases such as this the advantage that the servant gets from such schemes is for the purposes of the Stamp Duties Act purchased by him for money's worth.

The aspect of the case that has troubled me is the effect of the paragraph in the General Exemptions from Stamp Duty that reads: "All instruments relating to the services of apprentices, clerks and servants". This description, because of the elastic character of the phrase "relating to", might be stretched to cover a great variety of instruments. It could be contended for instance that, literally, it would cover insurance policies taken out by an employer against liability for acts done by his servants, or an agreement for a lease of a house to a servant to be used in conjunction with his services, or a variety of contracts that an employer might make with third parties to provide amenities for his servants. Some limits must, however, be put to it in the Stamp Duties Act. Without seeking to define those limits precisely, I think that the present deed is outside them. It sets up a pension fund and scheme: the servants of the company are not parties to the deed, although they may become entitled to benefits under it, if individually they choose to do so and the company agrees: it does not in any way control or regulate the services that any apprentice, clerk or other servant is to perform: and the benefits that an employee who enters the scheme can get from it are only to be enjoyed by him when his services to the company have come to an end. Whatever might be the consequence of each of these circumstances standing alone, I consider that cumulatively they place the deed outside the description of an exempt instrument.

Both sides claimed that the history of this exemption clause supported them. But when fully traced, it does not, I think, yield anything in any way decisive. Nevertheless "the services of apprentices, clerks and servants" is so odd and old-fashioned a phrase that, of itself, it puts one on an inquiry as to its origin, in the hope of thereby getting some light on its meaning. When its derivation has been traced through some curious transformations and transmigrations in stamp duty legislation, the result is, I think, considerable caution in invoking any assumption as to policy or purpose to aid its interpretation today. The words "clerks or servants" are, in themselves, clumsy; for clerks in general are servants. But, the phrase "servant or clerk" has been well known in the law since the statute 39 Geo. III, c. 85, entitled "An Act to protect Masters and others against Embezzlement by their Clerks or Servants". That Act was passed in consequence of the decision in R. v Bazeley. ^[F31] Bazeley was a bank clerk, the principal teller in Esdaile's Bank; and this perhaps explains the words that Parliament used. The collocation of words "apprentices, clerks or servants" in the Stamp Duties Act has, however, a different history. For that it is necessary to go some way back in the English statute book.

Stamp duties on instruments were first imposed in England by 5 Wm. & Mary, c. 21. Several of the early Stamp Acts-which may be found conveniently tabulated in Tilsley on The Stamp Acts 9th ed. (1865) pp. 336-338-expressly excepted indentures for binding poor children as apprentices from the duties on indentures generally: for examples, 9 & 10 Wm. III, c. 25 s. 30 ("poor parish children") and 12 Anne Stat. 2, c. 9 s. 21 ("poor parish or charity children"). The Act 5 Geo. III, c. 12, by which it was sought in 1765 to levy stamp duties in the American Colonies, and which was so much the cause of their loss by Britain, imposed, among other duties, a duty of two shillings and sixpence upon indentures (including articles of apprenticeship and clerkship), and a further sum calculated by reference to the amount of any premium or fee payable to the master; but it expressly excepted instruments for the hire of servants who were not apprentices. The principle that the duty on the indentures of apprentices and articled clerks should vary according to the amount of any premium or fee payable to the master was adopted by the Stamp Act of 1815, 55 Geo. III, c. 184. In that Act the duties on various kinds of instruments were, for the first time, set out in a schedule, a practice generally followed thereafter. One heading in the schedule was: "Apprenticeship or Clerkship-Indenture or other instrument or writing containing the Covenants, Articles or Agreements, for or relating to the Service of any Apprentice, Clerk or Servant who shall be put or placed to or with any Master or Mistress to learn any Profession, Trade or Employment whatsoever; except articles of Clerkship to Attornies and others hereinafter specifically charged".

There followed a scale graduated according to the consideration moving to the master-that is the premium paid or payable. Here is the first appearance of the phrase "relating to the service of any apprentice, clerk or servant". It is, it will be noticed, in a charging provision, not in an exempting provision: and the only servants that it referred to were persons who, like apprentices to trades and articled clerks were indentured as learners. There was in the same Act-under the heading "Agreements" in the Schedule-an exemption in the following terms: "Memorandum or Agreement for the Hire of any Labourer, Artificer, Manufacturer or Menial Servant". This and another exemption that accompanied it-"Memorandum Letter or Agreement made for or relating to the sale of any Goods Wares or Merchandize"-were to have a long history.

Next among relevant English enactments is one referring to New South Wales. Incongruously, it is in the Act 4 Geo. IV, c. 96, the Act under which the Legislative Council of New South Wales was constituted and by which the Charter of Justice was authorized. A possible explanation of the heterogeneous character of these provisions appears in a letter by Forbes C.J. printed in the Historical Records of Australia, Series IV vol. 1, p. 746. However that may be, s. 41 provided that it should be lawful for any artificer, handicraftsman, mechanic, gardener, servant in husbandry or other labourer, not being under the age of eighteen years, by indenture duly executed and without a stamp, to contract with anyone in New South Wales, or who was about to proceed there, to serve him in New South Wales for any term up to seven years. This was re-enacted by 9 Geo. IV, c. 83, s. 35, with the addition of the words "clerk" and "domestic servant" to the list of those who might so contract. These enactments thus anticipated for New South Wales a general exemption that appeared later, in 17 & 18 Vict. c. 83, in the words "indentures of apprenticeship, bonds, contracts and agreements for and relating to the service in any of the colonies or possessions of Her Majesty abroad, of any person as an artificer, clerk, domestic servant, handicraftsman, mechanic, gardener, servant in husbandry, or labourer". The English stamp laws were consolidated in 1891 by 54 & 55 Vict. c. 39. By it instruments of apprenticeship were chargeable only with half a crown, instead of according to the premium: and it was provided that "every writing relating to the service or tuition of any apprentice, clerk or servant placed with any master to learn any profession or employment (except articles of clerkship to a solicitor or law agent or writer signet) is to be deemed an instrument of apprenticeship" (s. 25). The Act contained the old exemptions of the indentures of parish and charity apprentices, also the exemptions of agreements for the hire of labourers and others, and agreements relating to services in the colonies. The Finance Act, 1949, s. 35, repealed the duty of half a crown on indentures of apprenticeship in England. But in the meantime the words "instrument relating to the services of apprentices, clerks or servants" had entered upon a career in the law of New South Wales; and to that I now turn.

Stamp duties were first granted in New South Wales by the Stamp Duties Act, 1865. The schedule provided for a duty of one pound on deeds or instruments of any kind not otherwise granted. Following this certain special exemptions were set out. One was: "Apprenticeship and Clerkship-All instruments relating to the services of apprentices, clerks, or servants".

This would seem to have been an attempt to deal with instruments of the same sort as were dealt with by the corresponding provisions in the English statutes (55 Geo. III, c. 184 and 16 & 17 Vict., c. 59). In New South Wales the clause was an exempting provision, in England a charging provision. The aim seems to have been to exempt from duty in New South Wales instruments of the kind that were subject to duty in England. The colonial draftsman, however, by economizing in words left room for uncertainty; for it was only the prefatory phrase "Apprenticeship and Clerkship" that could confine the word "servants" in the New South Wales enactment to servants who served to learn a trade, as it was confined in the English Acts. It is to be noted too that the New South Wales Act spoke of "all instruments relating to the services of apprentices, clerks or servants"-each word being in the plural, whereas the original English model was "indenture or other instrument ... containing the covenants etc. for or relating to the service of any apprentice, clerk or servant". The Act of 1865, after being amended and continued by various Acts, expired on 31st December 1874. Thenceforth there was no stamp duty in New South Wales until 1st July 1880, when the Stamp Duties Act, 1880 came into force. In it duties were again set out in schedules, followed this time by a list of thirty exemptions. These included: "Any agreement or memorandum for the hire of any labourer artificer manufacturer or menial servant" and "Any agreement or memorandum made for or relating to the sale of any goods wares or merchandize". These were derived in terms from England. But the one that is important for present purposes read simply: "Any instrument relating to the services of an apprentice clerk or servant". This time it will be noticed it is couched in the singular. Symmetry required this, for each of the thirty paragraphs under the heading "Exemptions" started with the word "Any". But the striking thing is that this symmetry was attained by leaving out the prefatory words "Apprenticeship and Clerkship" that in 1865 had probably kept the operation of the colonial provision limited, as its English parent clearly was, to the indentures and articles of those who served to learn a calling. So that now there was nothing to confine the scope of the word "servants", except perhaps a recollection of the ancestry of the phrase and the co-existence of the exemption of agreements and memoranda for the hire of labourers, artificers etc., which would have been superfluous if every instrument relating in any way to any kind of servant was exempt. The Act of 1898 was a consolidating statute, part of the general consolidation of the New South Wales statutes made by Judge C. G. Heydon. As there had been no amendments of the thirty exemptions in the 1880 Act, they are simply re-enacted in the 1898 Act. We do not have to decide what was the effect of these provisions, for the capacity of New South Wales draftsmen for departing from models and for laconics had not been exhausted in 1865 and 1880. A further step was taken in the Stamp Duties Act, 1920, where many changes are introduced into the table of exemptions. All attempt at verbal symmetry is abandoned. The exemption of agreements for or relating to the sale of any goods, wares or merchandize remains; but it is transferred from the general exemptions to a place under "Agreements" in the body of the second schedule: the exemption of agreements for the hire of labourers, artificers etc. entirely disappears: the exemption with which we are concerned takes its present form. It is again couched in the plural; but now it is "all instruments relating to the services of apprentices clerks and servants", instead of "or servants" as in all its earlier forms. We must interpret it and apply it as we find it. But I take it that it is still to be read as if it said "or servants". I agree with Menzies J. in thinking that, despite the obvious antiquity of its language, it cannot, in its present form and setting, be limited to servants who are ejusdem generis with apprentices and articled clerks. And the exemption of agreements for the hire of labourers, artificers etc. having disappeared, there is, I think, every reason for regarding it as applicable now to all forms of service agreements made between employers and servants of any kind. But beyond that I think one cannot with any assurance go. I certainly find nothing in the history that I think would justify us in giving any large meaning to the words "relating to" on any view that this would accord with the policy of the Act.

I consider the appeal should be dismissed.