BROWNE & ANOR v COMMISSIONER OF STATE REVENUE (QLD)

Judges: de Jersey CJ

McMurdo P
Jerrard JA

Court:
Queensland Court of Appeal

MEDIA NEUTRAL CITATION: [2002] QCA 388

Judgment date: 27 September 2002

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McMurdo P

16. The issues and essential facts in this case stated ^[1] As to the principles regulating a case stated, see R v Rigby (1956) 100 CLR 146 at 150-151 and Brisbane City Council v Valuer-General for State of Queensland (1978) 21 ALR 607 at 621 . are set out in the reasons of the Chief Justice with which I agree.

17. Stamp duty is paid on the instrument conveying property. ^[2] Section 4(1) and s 54(1) Stamp Act 1894 (Qld). Whether the duty is payable and the amount of the duty will be determined by the legal effect of the terms of the instrument of conveyance, here, the Agreement for Sale.

18. The appellants contend that the legal effect of the Agreement for Sale is to transfer only 43.33 per cent of the property and that only that proportion of the $3 million consideration stated in the agreement ($1,300,000) was chargeable with stamp duty; the consideration on which duty is chargeable is not necessarily that stated in the agreement.

19. In support of that proposition, the appellants refer to Commr of Stamp Duties v Hopkins ^[3] (1945) 71 CLR 351. where Latham CJ stated that Griffith CJ's observations in Davidson v Chirnside , ^[4] (1908) 7 CLR 324 at 340. that the question of the chargeability of an instrument must be determined by an examination of the instrument itself and not upon extrinsic evidence, is too widely stated; courts may hear extrinsic evidence in order to determine the real nature of the transaction to which the instrument relates and to ascertain the amount of duty payable. See also DKLR Holding Co (No 2) Pty Ltd v Commr of Stamp Duties (NSW) . ^[5] 82 ATC 4125 at 4153; (1981-1982) 149 CLR 431 at 477. Indeed, s 22(1) and s 23 Stamp Act 1894 (Qld) allow the respondent to enquire and to receive evidence as to the true and full effect of instruments.

20. Whether it is necessary to look beyond the agreement to determine the true consideration will depend on the facts of each case. The appellants urge the Court to consider two Form S(a) statements from the appellant Browne, prepared for the Office of State Revenue under the Stamp Act 1894 (Qld) after the Agreement for Sale was signed, in which he deposed that he acquired or agreed to acquire an interest in the pharmacy businesses for approximately $1,300,000. ^[6] See Case Stated 12. These, they contend, and 3.1(b) Agreement for Sale, demonstrate that the true legal effect of the agreement is to transfer 43.33 per cent of the property from the pharmacy vendor to the appellants and the chargeable duty is only on $1,300,000 (43.33 per cent of the $3 million), not the full $3 million stated sale price.

21. The appellant Browne's Form S(a) statements and s 3.1(b) of the Agreement for Sale do not detract from the clear terms of the Agreement for Sale, which was a sale of the pharmacy businesses and equipment from one entity to a partnership of that entity and others for a consideration of $3 million subject to the terms of the agreement (definition Sale Price 1.1), ^[7] Case Stated 3(a)(ix). namely, $1,300,000 on completion (3.3) ^[8] Case Stated 3(h). and the balance of $1,700,000 being a debt owing by the purchasers to the vendors (3.4). ^[9] Case Stated 3(i). That conclusion is not inconsistent with the Form S(a) statements and is supported by 19.1 of the Agreement for Sale which provided that the Agreement for Sale, the Partnership Agreement and the Premises Leases contain the entire agreement between the parties. ^[10] See Case Stated 3(m).

22. Section 50 Property Law Act 1974 (Qld) is a validating provision allowing the enforcement of a sale from one entity to a partnership of that entity and others which would otherwise be unenforceable at common

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ATC 4876

law; it validates agreements such as this Agreement for Sale, which may then be enforced according to their terms. See Stewart v Hawkins . ^[11] (1958) 60 SR (NSW) 104 at 107. Under this agreement, the consideration was $3 million, not 43.33 per cent of $3 million. Stamp duty was therefore chargeable on $3 million.

23. I agree that the questions submitted for the determination of the Court should be answered as proposed by the Chief Justice.