Acclaim Holdings Pty. Ltd. v. Vlado Pty. Ltd.

Members: Wallace J

Kennedy J
Pidgeon J

Tribunal:
Supreme Court of Western Australia (Full Court)

Decision date: Judgment handed down 25 October 1989.

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Kennedy J.

The respondent instituted proceedings against the appellant in the District Court at Perth, claiming the sum of $56,565.95, together with interest thereon. The indorsement of claim, as amended, read as follows:

``The plaintiff's claim is for the sum of $56,565.95 being the value of stock in trade of the Tarcoola Tavern as determined by Perth Stocktaking Services on 13th June 1988 in accordance with a written agreement between the parties of 14th September 1987 as varied by the parties on 15th June 1988, payment of which stocktaking sum way [ sic ] was due and owing on or before 23rd June 1988.

AND

• (a) the plaintiff claims $56,565.95
• (b) interest thereon at the rate of 14 percentum per annum pursuant to s. 32 of the Supreme Court Act from 28th June 1988 and costs [ sic ].''

On 12 September 1988, the respondent entered judgment in default of appearance. Subsequently, by summons dated 18 January 1989, the appellant sought to have the judgment set aside. One of the two grounds for its application was that the judgment was irregular, in that the respondent relied on, as was evidenced by the indorsement of claim, an agreement dated 14 September 1987 which was and remained unstamped pursuant to the Stamp Act 1921 . On 27 January 1989, the Deputy Registrar of the District Court set aside the default judgment as being irregular, for the reason that it was entered for an amount greater than that to which the respondent was entitled, a ground which is no longer pressed. On the same day, the respondent appealed against this decision and, on 23 February 1989, its appeal was allowed by a Judge of the District Court, who restored the default judgment.

In his reasons for judgment, while discussing the appellant's argument in favour of affirming the Deputy Registrar's decision, the learned District Court Judge distinguished
Bowker v. Williamson (1889) 5 T.L.R. 382 ,
Baker v. Nixon (1867) 7 S.C.R. (N.S.W.) 15 and
Routledge v. McKay (1954) 1 All E.R. 855 on the ground that they all related to the use to which an unstamped or insufficiently stamped instrument could be put in evidence in the course of a trial. His Honour went on to say that the words in sec. 27 of the Stamp Act , ``admitted to be good, useful or available in law or equity'', referred to the use ``in evidence'' of an unstamped instrument. He further held that the instrument had not been ``pleaded'' in terms of sec. 27, because an indorsed writ is not a pleading.

The appellant now appeals against that decision, contending that:

``(a) the default judgment based on an unstamped chargeable instrument is a judgment based on a nullity and contrary to sec. 27 of the Stamp Act ; and

(b) the judgment was irregular and should be set aside ab initio; or

(c) in the alternative, the instrument being unstamped could not be pleaded or given in evidence or admitted to be good, useful, or available in law or equity and accordingly the defendant had an arguable defence on the merits and the judgment, if regular, should be set aside.''

No question arises as to the time at which the application to set aside the judgment was made. Indeed, the appellant's affidavit in support of its application was not even before this Court.

Section 27(1) of the Stamp Act is in the following terms:

``Except as otherwise provided by this Act no instrument chargeable with duty executed in Western Australia, or relating, wheresoever executed, to any property situate or to any matter or thing done or to be done in Western Australia, shall, except in criminal proceedings, be pleaded or given in evidence or admitted to be good, useful, or available in law or equity, unless it is duly stamped in accordance with the law in force at the time when it was first executed.''

This provision was derived ultimately from the imperial statute 5 & 6 Will. & Mary c. 21, s. XI of which provides, in part:

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``And if any deed, instrument, or writing whatsoever, by this act charged with the payment of a duty as aforesaid, shall contrary to the true intent and meaning thereof be written or ingrossed by any person or persons whatsoever... upon vellum, parchment, or paper not marked or stamped according to this act, or upon vellum, parchment, or paper, marked or stamped for a lower duty as aforesaid, that then, and in every such case, there shall be due answered, and paid to their Majesties (over and above the duty aforesaid) for every such deed, instrument, or writing, the sum of five pounds; and no such record, deed, instrument, or writing shall be pleaded or given in evidence in any court, or admitted in any court to be good, useful, or available, in law or equity, until as well the said duty, as the said sum of five pounds, shall be first paid to their Majesties use, and a receipt produced for the same...''

In the course of successive re-enactments, the words ``in any court'' came to be deleted from the expressions used, and they do not appear in our Stamp Act . The argument on behalf of the respondent, which I am unable to accept, is that, just as those words must be treated as still appearing in sec. 27 after ``evidence'', so must they also be regarded as appearing after ``admitted''. This argument would treat the legislature as not having achieved any purpose in deleting the words. The expression ``admitted'' does not, in my opinion, refer simply to a document's admission into evidence, for this would advance the position no further than the earlier expression, ``given in evidence''. The expression, in my opinion, is used in the sense defined in the Oxford English Dictionary , ``received as true or valid; received; accepted; acknowledged''.

A number of the earlier authorities appear to me clearly to proceed upon the basis that the sanction imposed by the Act upon an unstamped document has an operation outside the courts, although it is true that the present point has not been dealt with expressly. For example, in
Roderick v. Hovil (1811) 3 Camp. 103 ; 170 E.R. 1320 ; it was held by Lord Ellenborough that an unstamped policy of insurance was a nullity, and in
Stevens v. Pinney (1818) 8 Taunt. 327 ; 129 E.R. 409 , it was held that a contract was inadmissible ``and, consequently, not amounting to an agreement'' (p. 330; p. 410). In
The Queen v. Kelk (1840) 12 Ad. & E. 559 ; 113 E.R. 924 , Lord Denman C.J. held that a vote for the appointment of a special commissioner was not a valid vote, because the authority under which the voter had acted had not been stamped - but see now
Marx v. Estates and General Investments Ltd. (1975) 3 All E.R. 1064

In
Semple v. Nicholson (1859) 28 L.J. Ex. 217 , it was held that a judgment signed on an unstamped warrant of attorney was not available against subsequent judgments and would be set aside on the application of a judgment creditor. The unstamped warrant in that case had merely been filed in the court. There was no question of its having been tendered in evidence. The basis of the decision was that the warrant, because it was unstamped, could not be ``good, useful and available in law or equity''. In another authority, Whitting to
Loomes (1881) 17 Ch.D. 10 , it was held that a purchaser was entitled, on a contract of sale with a mortgagor, to require the mortgage deed to be stamped. James L.J., at p. 11, said, ``As long as it is not stamped with a proper stamp he cannot use it for any purpose, whether to defend his title or attack a wrong doer''. And see also
Coleman v. Coleman (1898) 79 L.T. 66 .

In Australia, in Baker v. Nixon (1867) 7 S.C.R. (N.S.W.) 15, judgment had been given on an unstamped award made in pursuance of an order of reference made at a trial. Because the unstamped document ``was not available at law or in equity'', Stephen C.J., with whom the other members of the court agreed, said it could not, until stamped, be used for any purpose. The officer concerned had no right to look at the document for the purpose of affecting the verdict. It was not a case in which it was sought formally to tender a document in evidence.

In the course of the nineteenth century, a number of cases held that an unstamped document could nevertheless be used for an indirect or collateral purpose. The leading authority on this point was
Matheson v. Ross (1849) 2 H.L.C. 286 ; 9 E.R. 1101 , discussed in Dent v. Moore (1919) 26 C.L.R. 316 at pp. 327-328. Later, in
Birchall v. Bullough (1896) 1 Q.B. 325 , a witness was permitted to refresh his memory from an unstamped document. It

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appears to have been due to cases such as these which impacted upon the effectiveness of the provision, that the wording in the provision was changed in the Stamp Act 1891 (Imp.), the words ``available or effectual for any purpose whatsoever in law or equity'' being substituted for the words ``admitted to be good, useful, or available in law or equity'' - see
Hamilton Finance Co. Ltd. v. Coverley Westray Walbaum Tosetti Ltd. (1969) 1 Lloyd's Rep. 53 ,
Fengl v. Fengl (1914) P. 274 at p. 276 . Other States, such as New South Wales, followed the change in the imperial statute, but Western Australia did not. The leading Australian authority on this type of provision, Dent v. Moore (1919) 26 C.L.R. 316, was concerned with the New South Wales legislation and it must therefore be approached with this point in mind. Nevertheless, in
Shepherd v. Felt and Textiles of Australia Ltd. (1931) 45 C.L.R. 359 at p. 383 , Dixon J., although speaking of the New South Wales legislation, said:

``The expressions `pleaded', `given in evidence' and `admitted' refer to the use or recognition of the document or of its operation in judicial proceedings or otherwise , and, I think, would naturally be understood as intending that when by due stamping it had become pleadable, receivable in evidence and admissible as good useful and available, then its validity and operation as from the beginning were to be construed as unaffected by the enactment.''

(My emphasis.)

The term ``pleaded'' should, in the context of sec. 27(1), in my view, be given its technical meaning, as it appears to me at all times to have been used in the legislation in a technical sense. Pleading, originally oral, was a process which came and still comes only after the writ, unless, of course, it is indorsed on the writ - see Holdsworth, History of English Law , vol. 9, p. 264 and Fifoot, English Law and Its Background , pp. 152-153, 161. In my opinion, the document had not been ``pleaded'' in this case.

Notwithstanding the foregoing, the present case can, I believe, be approached upon a somewhat different basis. What is clear is that, had the appellant entered an appearance at the appropriate time, the respondent, in the absence of stamp duty having been paid on the agreement, would have been prevented from pleading the critical document and, even had it overcome this hurdle, it would have been unable to lead any admissible evidence as to the agreement between the parties, upon which its claim depended. In these circumstances, and having regard to the general policy underlying sec. 27(1), I am of the opinion that the judgment, even if it otherwise be regular, should be set aside, for, unless the document is stamped, the respondent could not succeed in its action. It is, in my opinion, unnecessary to consider whether a claim differently based from that asserted in the indorsement of claim could succeed.

In the circumstances, I would allow the appeal and set aside both the order of 23 February 1989 and the judgment.