B.T. & G. Nominees Pty. Ltd. v. Commissioner of Stamp Duties (Tas.).

Judges:
Crawford J

Court:
Supreme Court of Tasmania

Judgment date: Judgment handed down 18 July 1990.

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Crawford J.

The applicant seeks to have varied from $875 to $20 the assessment of duty made in respect of a deed dated 30 June 1989 between John Albert Taylor and others (the assignors) of the one part and the applicant (the assignee) of the other part. Its backing sheet describes the deed as a ``deed of assignment''.

The parties acknowledged in the deed that the assignors were the partners of a firm of legal practitioners and that the assignee was the trustee of a settlement, the beneficiaries of which were the spouse and children of a practitioner who was to become a partner of the firm ``with effect from the commencement

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date''. The ``commencement date'' was defined as meaning ``the 1st day of July, 1989, or the date upon which the Council of the Law Society of Tasmania shall give its approval to the arrangements to be effected by this deed which ever of those dates be the later in time''. No doubt the requirement for the approval of the Council of the Law Society was inserted because r. 4 of the Rules of Practice 1977 prohibited the sharing of a practitioner's profit costs with a person who was not a practitioner unless such approval was obtained under subr. (4).

By cl. 3 the assignors, for a consideration, did ``hereby agree to assign, transfer and set over to the assignee such part of their respective shares in the partnership as shall be equal in total to 1/22nd thereof to hold the same unto the assignee absolutely with effect from the commencement date''.

Clause 4 provided:

``The assignment hereby effected is made subject to the provisions of section 36 of the Partnership Act 1891...''

By cl. 6 the applicant covenanted ``not to assign any benefit hereby conferred on the assignee'' except with prior approval.

Clause 9 has a reference to ``the determination of the assignment hereby effected''.

The Stamp Duties Act 1931 sec. 9(1) provides for the payment ``in respect of the several instruments enumerated in Schedule 2 duty at the rates set forth in figures against the same respectively or otherwise specified in that Schedule''. Subsection (2) provides for the calculation and assessment of such duty in accordance with the rules in Sch. 4 where they are applicable, but subject to the exemptions specified in Sch. 3. The question which arises on this application is whether the deed falls within the meaning of a ``conveyance'' in item 7 of Sch. 2, in which case the assessment of $875 was correct. If not, then the duty should have been assessed at $20 under item 11.

Item 7 in Sch. 2 commences to provide for the scale and rates of duties as follows:

``7. Conveyance -

• (a) upon the sale or disposition of any real or personal property in whatever form and however effected -''

Thereafter various rates are set forth, depending on the consideration.

Item 1(a) in Sch. 4 provides the following rule:

``1. Conveyances of real and personal property: contracts for the sale of land -

• (a) every grant, disposition, assignment, transfer, release, renunciation, instrument under the Land Titles Act 1980, or other instrument upon the sale of any lands, tenements, rents, annuities, or other property real or personal, whereby any such property shall be granted, assigned, transferred, released, renounced, or otherwise conveyed to, or vested in, the purchaser or any other person by his direction, shall be deemed to be a conveyance, and be chargeable with duty accordingly;''

It was argued for the Commissioner that notwithstanding that cl. 3 of the deed stated that the assignors did ``agree to assign... with effect from the commencement date'', the deed should be construed as a whole, and such a construction reveals that the deed itself effects an assignment and a vesting in the applicant of part of the shares of the assignors in the partnership, and is not simply an executory agreement to do so. Reliance was placed on words used in the deed suggesting that it did constitute an effective assignment. Words suggestive of that are:

• 1. The parties are described as ``the assignors'' and ``the assignee''.
• 2. Clause 4 refers to the ``assignment hereby effected''.
• 3. The definition of ``commencement date'' in cl. 1 refers ``to the arrangements to be effected by this deed''.
• 4. Clause 6 refers to ``any benefit hereby conferred''.
• 5. Clause 9 refers to ``the assignment hereby effected''.

Counsel for the Commissioner further submitted that the test to be applied is whether the deed, being an instrument, is sufficient to effect the assignment without the need for another instrument.

The applicant's counsel argued that there is a fundamental distinction which must be drawn

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between the instrument and the transaction to which it relates, relying on
Commr of Stamps (Qld) v. Arnold Wienholt (1915) 20 C.L.R. 531 at p. 541 and
Rosehill Racecourse Co. v. Commr of Stamp Duties (N.S.W.) (1906) 3 C.L.R. 393 at pp. 398, 401, 406-407. He argued that the instrument was not a ``conveyance'' or an assignment but an agreement to convey or assign, and there is no evidence of any transfer of property having been effected by it. See for example,
McCaughey v. Commr of Stamp Duties (N.S.W.) (1914) 18 C.L.R. 475 at p. 486. Reference was also made to
Dixon v. Chief Commr of Stamp Duties (N.S.W.) 85 A.T.C. 4718 at p. 4721,
Commr of Stamp Duties (N.S.W.) v. Permanent Trustee Co. Ltd. 87 ATC 4670 at pp. 4673-4675 and
I.R. Commrs v. G. Angus & Co. (1889) 23 Q.B.D. 579 at pp. 589-591 and 594.

I respectfully adopt what was said by Underwood J. in
Sportsman's Hall Hotel Pty. Ltd. v. Commr of Stamp Duties (Tas.) 90 ATC 4312 that an appeal such as this must be determined on the basis that it is an original proceeding and that the onus falls upon the Commissioner to prove all the facts necessary to establish that the duty claimed by him was properly assessed and payable. The only facts before me consisted of the contents of the deed.

The appeal should succeed. For the Commissioner's assessment to be upheld I would need to be satisfied that the deed is a conveyance. There might be some argument concerning the admissibility of extrinsic evidence, and I will not consider that aspect further, but nevertheless there is no evidence establishing that the Council of the Law Society had at the time of the execution of the deed, not since, given its approval to the arrangements to be effected by the deed, or pursuant to it. Therefore it cannot be said that anything has effectively been conveyed yet, nor that any property has been assigned to or vested in the applicant.

If there was evidence that the Council of the Law Society had given the necessary approval prior to the execution of the deed it seems to me likely that the result would be different, and if there was evidence of a subsequent approval further consideration of the matters raised in argument would be necessary. But in the absence of such evidence, the appeal must be concluded in favour of the applicant for it cannot be said that any conveyance has been effected.

As a result the appeal will succeed. There will be an order that the assessment of duty made on 30 November 1989 in respect of the deed referred to in the application be varied from the sum of $875 to the sum of $20 and that the Commissioner repay to the applicant the sum of $855 being the excess of duty paid in accordance with the erroneous assessment.