A Raptis & Sons Holdings Pty Ltd v Commissioner of Stamp Duties (No 1) [1997] QCA 227 [1999] 1 Qd R 458

IN THE COURT OF APPEAL [1997] QCA 227 SUPREME COURT OF QUEENSLAND Appeal No. 6318 of 1996 Brisbane [A. Raptis & Sons Holdings P/L v. CSD] BETWEEN: A. RAPTIS & SONS HOLDINGS PTY LTD (ACN 010 731 601) Appellant AND: COMMISSIONER OF STAMP DUTIES Respondent CASE STATED BY THE COMMISSIONER OF STAMP DUTIES PURSUANT TO SECTION 24 OF THE STAMP ACT 1894 Fitzgerald P. Derrington J. Byrne J Judgment delivered 1 August 1997 Judgment of the Court IN RESPECT OF THE CASE STATED THE ANSWERS ARE: (A) YES; (B) UNNECESSARY TO ANSWER; (C) THE DEED OF ASSIGNMENT IS CHARGEABLE PURSUANT TO PARA.(1) OF THE FIRST SCHEDULE HEADING "CONVEYANCE OR TRANSFER"; (D) THE AMOUNT OF DUTY PAYABLE IS $25; (E) THE COMMISSIONER SHOULD PAY THE COSTS OF AND INCIDENTAL TO THE STATING OF THE CASE AND THE APPEAL TO BE TAXED. CATCHWORDS: STAMP DUTIES - Stamp Act 1894 Schedule 1 heading "Conveyance or Transfer" - One instrument assigned both mortgages of land and a security incidental to them - Whether in order to be assessed at the concessional rate two separate instruments are required, one relating exclusively to the -- 1 of 7 -- 2 mortgages and one relating exclusively to the ancillary security. Kingston v. Keprose Pty Ltd (1987) 11 NSWLR 404 referred to. -- 2 of 7 -- Counsel: Mr D.G. Russell QC, with him Mr K.F. Holyoak for the appellant Mr J.D. Batch SC, with him Ms E.M. O'Reilly for the respondent Solicitors: Clayton Utz for the appellant Crown solicitor for the respondent Hearing Date: 10 March 1997 -- 3 of 7 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 6318 of 1996 Brisbane Before Fitzgerald P Derrington J Byrne J [A. Raptis & Sons Holdings P/L v. CSD] BETWEEN: A. RAPTIS & SONS HOLDINGS PTY LTD (ACN 010 731 601) Appellant AND: COMMISSIONER OF STAMP DUTIES Respondent CASE STATED BY THE COMMISSIONER OF STAMP DUTIES PURSUANT TO SECTION 24 OF THE STAMP ACT 1894 REASONS FOR JUDGMENT - THE COURT Judgment delivered 1 August 1997 The heading "Conveyance or Transfer" in Schedule 1 of the Stamp Act 1894 fixes a concessional rate of duty for certain transfers of mortgages secured on land. The nominal rate ($5) was intended to encourage a secondary mortgage market. In his second reading speech, in commending the idea to Parliament, the Minister said: "this proposal is designed to free up the business trading of mortgages".1 Since the introduction of the concession, although the words in which it is couched have been altered, its general object has remained unchanged. When in 1985 the Stamp Act and Another Act Amendment Bill was introduced, the Minister proposed expanding the scope of the concession to comprehend "transfers of securities incidental ... to mortgages over land ... which are also transferred", saying that "transfers of mortgages 1 Hansard 9 February 1984, p.1548. -- 4 of 7 -- 2 themselves are already subject to this concessional rate, and its extension as proposed is necessary to fully achieve the purpose of that concession".2 The Debates indicate that, in enacting the bills, the Parliament intended to legislate to implement these initiatives. However, if the contention advanced for the Commissioner of Stamp Duties in this appeal is correct, the statutory provisions have missed their mark. Duty is charged upon an instrument of "conveyance or transfer" as follows: "(1) (a) Of property consisting solely of a mortgage or of an interest in a mortgage secured on land or land and improvements thereon, whether the conveyance or transfer is absolute or by way of security - For each mortgage to which the conveyance or transfer relates - $5.00 duty. (c) Of property consisting solely of a security which is ancillary or incidental to property of the kind specified in subparagraph (a) where the conveyance or transfer is made in connection with a conveyance or transfer of property of the kind specified in subparagraph (a) - $5.00 duty." The essential facts raised by the case stated are uncomplicated. One instrument assigned property consisting only of four mortgages of land and a security incidental to them.3 Yet the Commissioner contends that the concessional rate is not applicable. Although the instrument relates solely to property of the nature described in sub-paras. (a) and (c), it is said that, because it comprehends both classes of securities, the instrument does not transfer property consisting "solely" of either mortgages of land or of a security ancillary to them. On this argument, to obtain the concessional rate where an ancillary security is also transferred, the parties need two instruments, each relating exclusively to property of a kind mentioned in one of the two sub- paragraphs. According to the Commissioner's contention, effecting the transfers by only one document renders the instrument exigible to ad valorem duty. 2 Hansard 28 November 1985, p.3024. 3 The instrument also mentioned the secured debt. During the hearing, Mr Batch SC was content to accept that the reference to the debt in the transfer is immaterial. -- 5 of 7 -- 3 The interpretation for which the Commissioner contends is, it may be acknowledged, that naturally suggested by the grammatical meaning of the words used. For an instrument which assigns both a mortgage of land and an ancillary security does not solely assign either of them. But there is no sense in allowing a concessional rate for transfers effected by two documents while exacting ad valorem duty if words to precisely the same effect are used in just one. It is therefore not surprising that the Minister's second reading speech on 28 November 1985 cannot be reconciled with the Commissioner's contention - an argument which, if accepted, would put at risk, rather than "fully achieve", "the purpose of" the "concession". In short, the construction suggested for the Commissioner leads to an irrational result and is also inconsistent with the legislative intent indicated by the extrinsic material. 4 "Once the object or purpose of the legislation is delineated, the duty of the Court is to give effect to it in so far as, by addition or omission or clarification, the relevant provision is capable of achieving that purpose or object. ... The days are gone when judges, having identified the purpose of a particular statutory provision, can legitimately say, as Lord Macmillan said in Inland Revenue Commissioners v Ayrshire Employers Mutual Insurance Association Ltd [1946] 1 All ER 637 at 641, of the means used to achieve the purpose: ‘The legislature has plainly missed fire’. Lord Diplock, in an extra judicial comment on that decision has said, that ‘if ... the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed’: ‘The Courts As Legislators’, The Lawyer and Justice (Sweet & Maxwell) (1978) at 274." These words of McHugh JA, though contained in a dissenting judgment,5 have often been approved in judgments of authority.6 They accord with s.14A(1) of the Acts 4 Section 14B(1)(b) of the Acts Interpretation Act 1954 permits recourse to extrinsic material "if the ordinary meaning of the provision leads to a result that is manifestly absurd or unreasonable - to provide an interpretation that avoids such a result." 5 Kingston v. Keprose Pty Ltd (1987) 11 NSWLR 404, 424. 6 for example, in Bropho v. Western Australia (1990) 171 CLR 1, 20; Director of Public Prosecutions v. Serratore (1995) 38 NSWLR 137, 146; and Murphy v. Obst [1996] 2 VR 613, 625; cf. Collector of Customs v. Agfa-Gevaert Limited (1996) 186 CLR 389, 401; Saraswati v. The Queen (1991) 172 CLR 1, 21-22.. -- 6 of 7 -- 4 Interpretation Act, which provides that "the interpretation that will best achieve the purpose of the Act is to be preferred", and they are apposite here. The words granting the concession should be interpreted to avoid absurdity. It should be held that the concession is available where, as in this case, the instrument transfers only property of the nature described in sub-para.1(a) or in sub-paras.1(a) and (c). The questions raised by the case stated should therefore be answered as follows: (a) yes; (b) unnecessary to answer; (c) the Deed of Assignment is chargeable pursuant to para.(1) of the first schedule heading "Conveyance or Transfer"; (d) the amount of duty payable is $25; (e) the Commissioner should pay the costs of and incidental to the stating of the case and the appeal to be taxed. -- 7 of 7 --