Coles Myer Ltd v Commissioner of Stamp Duties [1991] QSCFC 10 [1992] 1 Qd R 362

revised copies is Court Reporting Bu Date-. /3/ 3 /f/ IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 63 of 1990 BEFORE: Mr Justice McPherson S.P.J. Mr Justice Derrington Mr Justice Moynihan BRISBANE, 7 MARCH 1991 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter , Court Reporting Bureau.) IN THE MATTER OF the Stamp Act 1894-1988 and- IN THE MATTER of an Appeal by COLES MYER LTD. against the assessment of Commissioner of , Stamp Duties on a lease dated 16 November 1988 BETWEEN: COLES MYER LTD. Appellant -and- COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT MR JUSTICE McPHERSON: The appeal in this case should, in my opinion, be dismissed with costs, the questions in the case being answered as follows: 10(a) yes; 10(d), by the appellant. It is not necessary to answer the questions in 10(b) and 10(c). I deliver my reasons. MR JUSTICE DERRINGTON: I agree. I publish my reasons. MR JUSTICE MOYNIHAN: I agree with the order proposed for the reasons published by my brothers. -Govt. Printer, Qld. l [1991] QSCFC 10 -- 1 of 18 -- 1 10 20 30 40 50 60 MR JUSTICE McPHERSON: The questions will be answered in the form I have stated. -i-l. _ - The appeal is dismissed with costs. 10 20 40 50 60 Govt. Printer, Qtd. 2 -- 2 of 18 -- ; qijoto \*> ' IN THE SUPREME COURT OF QUEENSLAND FULL COURT " APPEAL"NO. 63 OF 1990 BETWEEN: COLES MYER LTD AND: Appellant COMMISSIONER OF STAMP DUTIES Respondent MCPHERSON S.P.J. DERRINGTON J. MOYNIHAN J. Reasons for judgment delivered on 7th March, 1991 by McPherson S.P.J. and Derrington J. Moynihan J, agreeing with the reasons of McPherson S.P.J. and Derrington J. All concurring as to the Order. APPEAL DISMISSED WITH COSTS. II -- 3 of 18 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 63 of 1990 Before the Full Court Mr. Justice McPherson S.P.J. Mr. Justice Derrington Mr. Justice Moynihan IN THE MATTER of the Stamp Act 1894-1988 - and - IN THE MATTER of an Appeal by COLES MYER LTD, againstthe assessment of Commissioner of Stamp Duties on a lease dated 16 November 1988 BETWEEN : COLES MYER LTD. Appellant - and - COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT - MCPHERSON S.P.J. Delivered the Seventh day of March 1991 CATCHWORDS Stamp Duty - Lease - Duly stamped as agreement for lease - Amendment of legislation - Requirement that lease be stamped at date of execution - Lease executed after amendment - Whether pre-amendment law survives. Counsel: H. Fraser for the Appellant P. Keane Q.C. with R.J. Douglas for the Respondent Solicitors: Morris Fletcher and Cross for the Appellant K.M. O'Shea, Crown Solicitor for the Respondent Hearing Date: 19 February, 1991. -- 4 of 18 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 63 of 1990 IN THE MATTER of the Stamp Act 1894-1988 - and - IN THE MATTER of an Appeal by COLES MYER LTD, againstthe assessment of Commissioner of Stamp Duties on a lease dated 16 November 1988 BETWEEN : COLES MYER LTD. Appellant - and - COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT - MCPHERSON S.P.J. Delivered the Seventh day of March 1991 The scheme of the Stamp Act 1894-1988 is by s.4(1) to charge duties upon the several instruments specified "for the time being" in the First Schedule to the Act. A lease "for any term of any lands..." is one of the instruments so specified. Section 4(2) is a provision that, as I conceive it, is concerned primarily with the time at which an instrument becomes chargeable with duty and the rate of duty with which it is to be charged. It provides "(2) Save where the contrary is expressed in this Act, an instrument shall be chargeable with duty and shall be stamped in accordance with the law in force at the time - (a) in the case of an instrument which relates to property situated ... in Queensland - -- 5 of 18 -- 2 (ii) Where the instrument ... is executed outside Queensland after the commencement of the Stamp Act ... 1982, when the instrument ... was executed;" The instrument in the present case is a lease of a defined area of floor space in a retail shopping centre erected on registered land in Queensland. It is therefore, within s.4(2)(a), an instrument which relates to property situated in Queensland. It was executed evidently in Victoria by the appellant lessee Coles Myer Ltd. on 16 November 1988, which is the date on which the Case Stated says that the lease was executed. The date 16 November 1988 is therefore the relevant date for the purpose of s .4(2)(a) ( ii) of the Act. It is a date that is after the amending Act referred to in that provision. The lease is for a term of 27 years commencing on 3 November 1986. As such, it is within the relevant heading in the First Schedule that specifies : "Lease : For any term of any land...". That .beingr so, , the instrument was chargeable to duty at the rate specified in that Schedule at the date of execution of the instrument. The lease was assessed to duty by the respondent Commissioner on 22 February 1989. The amount of duty calculated by the Commissioner was $137,906.65. Under the First Schedule the duty payable is to be calculated at a rate of so many cents for every $100 of the total rental payable over the term of the lease.. The duty was, I assume, calculated on that basis in this instance . There can, in my view, be no complaint in law about an assessment of stamp duty on a lease that is calculated in that way. The lease was an instrument specified "for the time being" -- 6 of 18 -- 3 in the First Schedule and so by s.4(1) liable to a charge of stamp duty. Section 4(2) (a)(ii) required that it be stamped "in accordance with the law in force at the time" when the instrument was executed outside Queensland, which was 16 November 1988. If the assessment proceeded (as I understand it did) at the rate of duty that accorded with the law in force on 16 November 1988, then the assessment was valid and cannot be made the subject of a successful appeal under the Act. What then does the appellant complain about in this Court? It says that the law used to be different. Before 26 April 1988, which was when the Stamp Act Amendment Act 1988 came into force, the rule for assessing leases was different. Then as now the First Schedule contained a heading "Lease"; then as now s.62(1) of the Act provided that "an agreement for a lease in respect of the letting of any lands ... for any definite or indefinite term is to be charged as if it were a lease made for the term and consideration mentioned in the agreement". Formerly, it was also provided in s.62(2) that a lease made subsequently to and in conformity with such an agreement for lease if duly stamped was to be charged with a duty of $1 .00, or the equivalent of the duty paid in respect of the agreement, whichever was less. These provisions may be compared to those of ss.54(1) and 54(6) providing in effect that an agreement for sale is to be charged with duty as if it were a conveyance on sale. The legislation is, with some local variation and amendment, derived from comparable provisions of s.75 and s.59 of the Stamp Act 1891 (U.K. ). Section 64A(2) of the Queensland Act contained a special provision for the case of an agreement for lease having a term that was indefinite or could not be ascertained. The subsection -- 7 of 18 -- 4 required that the term of such an agreement be deemed to be a definite term of three years, and that the instrument be deemed to create that initial three year term followed by a series of recurring three year tenancies. By s.64A(4) if the agreement for lease provided for payment of a rental that could not be ascertained at the time the instrument was submitted to the Commissioner, the assessment then made was an interim assessment only : s . 62A( 4) ; and the instrument was required to be re-submitted for assessment after three years. Before the subject lease was executed on 16 November 1988, the appellant had on 1 October 1985 entered into an agreement for lease of the subject land for a term of 27 years to commence on date to be fixed on completion of the shopping centre. In accordance with s.64A as it then stood this agreement was assessed to duty in the sum of $5,140.80 in respect of the first three years of the lease. Thereafter the law was changed by the coming into force of the amending Act on 26 April 1988, introducing the new regime by which a lease when executed is to be assessed to stamp duty at a rate calculated by reference to the rent payable over the full term of the lease. It was under this new regime that the subject lease executed on 16 November 1988 was assessed on 22 February 1989. In doing so the Commissioner allowed a credit for the amount of $5,140.80 earlier paid under the assessment in resect of the agreement for lease, describing this in the assessment as "less paid on a/c.". That appears to have been done in consequence of provisions introduced into s.62(2) by the amending Act in 1988. They now are to the effect that, where duty has been paid under s . 62 (1 ) on an agreement for lease, and a lease is subsequently granted that is in conformity with the agreement, the Commissioner is to allow o -- 8 of 18 -- 5 the duty so paid as an "offset" against duty chargeable on the lease. What has therefore happened is that between the making of the agreement for lease and its assessment to duty, and the execution of the lease and its assessment to duty, the legislation has undergone a change. Under the new legal regime a lease is liable to duty calculated on the rent payable over the whole term. That was the law that applied at the time the lease was executed on 16 November 1988. Under s.4(2), the instrument was to be "chargeable with duty" and was to be "stamped in accordance with the law in force" at the time of such execution. Having regard to the explicit provisions of s.4(2) of the Stamp Act subjecting an instrument to a charge of duty, and making it liable to be stamped, "in accordance with the law in force" at that time, I can see no room for the application of the provisions of s.20(1) of the Acts Interpretation Act 1954-1977, on which the appellant relies. Those provisions are in any event subject to the provisions of s.3(1) of that Act. Speaking generally, s.3(1)(b) specifically displaces "the several provisions" of the Acts Interpretation Act in cases where the interpretation that a provision of the Acts Interpretation Act would give would be inconsistent with the context of the particular Act to be interpreted. In my opinion the context afforded by s.4(2) of the Stamp Act clearly shows that the saving provisions of s.20(1) of the Acts Interpretation Act . if otherwise applicable, are not intended to apply to the charging of this instrument with duty and its stamping in accordance with the law at the time of its execution on 16 November 1988. This makes it unnecessary for me to consider whether the appellant acquired any "right or privilege" under the law as it -- 9 of 18 -- 6 was before the amendment took effect on 26 April 1988. However, if it were necessary to decide that question, I would agree with the reasons (which I have had the advantage of reading) in relation to that matter of my brother Derrington. In my opinion the appeal should be dismissed with costs. -- 10 of 18 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No ♦ 63 of 1990 Before the Full Court Mr Justice McPherson S.P.J. Mr Justice Derrington Mr Justice Moynihan IN THE MATTER of the Stamp Act 1894-1988 - and - IN THE MATTER of an Appeal by COLES MYER LTD against the assessment of Commissioner of Stamp Duties on a lease dated 16 November, 1988 BETWEEN : AND: COLES MYER LTD Appellant COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT - DERRINGTON J. Delivered the 7th day of March, 1991 CATCHWORDS : Counsel : Mr Fraser for appellant Mr Keane Q.C. and Mr R.J. Douglas for respondent Solicitors: Morris Flecher & Cross for appellant K.M. O'Shea, Crown Solicitor for respondent Hearing dates: 18th and 19th February, 1991 -- 11 of 18 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 63 of 1990 IN THE MATTER of the Stamp Act 1894-1988 - and - IN THE MATTER of an Appeal by COLES MYER LTD against the assessment of Commissioner of Stamp Duties on a lease dated 16 November, 1988 BETWEEN: AND: COLES MYER LTD Appellant COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT - DERRINGTON J. Delivered the 7th day of March, 1991 The abovenamed appellant as proposed lessee entered into an agreement with a developer to lease a retail shopping centre which was to be constructed for a term of twenty-seven years from the date of commencement of the lease . Pursuant to that agreement the parties later executed a lease for that term. Between the execution of the agreement for lease and that of the lease a relevant amendment was made to the Stamp Act which has led to this appeal. The agreement for lease was stamped shortly after its execution in accordance with the terms of the Act at that time. -- 12 of 18 -- They provided that in respect of a lease or an agreement for lease for a prescribed term, which applied to the term in the present case, the stamp duty was to be assessed and paid on each successive three year term, on each of which occasions its value could be progressively assessed. After the amendment to the Act a lease or agreement for lease of such duration is to be assessed and duty paid in respect of the entire term of the lease in the first instance. This means that the entire duty is payable immediately instead of being spread out at three year intervals over the entire period of lease as the Act formerly provided. When the instrument of lease was executed after the amendment, the Commissioner assessed duty upon the basis of the Act as it now stands but has allowed the appellant credit for the amount of duty already paid upon the agreement for lease in respect of the first three years of the term. The appellant claims that because the agreement for lease was assessed under the provisions of the Act prior to the amendment, it had the right, within the meaning of that term in s. 20 of the Acts Interpretation Act 1954, to have the lease also assessed and stamped under the terms of the Stamps Act which were then in force. The foundation for this suggested right is to be found in the former s. 62(2) of the Act which was repealed by the amendment. It provided that a lease made subsequently to and in conformity with an agreement for lease which had been duly stamped should be charged with duty of $1.00. Because, it is said, the agreement for lease had been duly stamped, albeit in respect of the first three years of the term only, the appellant -- 13 of 18 -- had the right to have the lease stamped at $1.00 whenever it was executed and even after the amendment. It is as well to set out the relevant legislation. The first is s. 62 of the Stamp Act prior to the amendment which the appellant says is the source of its right. It reads "62. Agreement for lease to be charged as a lease. 54 & 55 Vic. c. 39, s. 75. (1) An agreement for a lease, or with respect to the letting of any lands, is to be charged with the same duty as if it were an actual lease made for the term and consideration mentioned in the agreement. (2) A lease made subsequently to and in conformity with such an agreement duly stamped is to be charged with the duty of $1.00 or the equivalent of the stamp duty paid in respect of the agreement, whichever is less." Secondly, where relevant, s. 20 of the Acts Interpretation Act 1954 reads as follows "20. (1 ) Saving of operation of repealed or expired Act as regards rights and liabilities thereunder, etc. Where any Act repeals or amends or has repealed or amended wholly or in part any former Act, or any Act or part of an Act expires or has expired, then, unless the contrary intention appears, such repeal or amendment or expiry shall not - (c) Affect any right, interest, title, power, or privilege created, acquired, accrued, established, or exercisable, or any status or capacity existing, prior to such repeal or amendment or expiry; (2) Matters in progress may be concluded under repealed enactment. Any Act or enactment, notwithstanding the repeal or expiry thereof, shall continue and be in force -- 14 of 18 -- 4 for the purpose of continuing and completing under such repealed or expired Act or enactment any act, matter, or thing commenced or in progress thereunder, if there is no substituted Act or enactment adapted to the continuance and completion thereof." It is a primary principle of the law relating to stamp duties that the duty is assessed upon the instrument and not upon the transaction ( Ouahtred v. Inland Revenue Commissioners (1960) A.C. 206 at p. 227). Moreover, "in determining the category to which the instrument is to be assigned, its character is to be ascertained by considering its legal effect at the date of execution": Wm. Cory & Son Ltd v. Inland Revenue Commissioners (1965) A.C. 1388 as understood in Comptroller of Stamps (Viet.) v. Ashwick (Vic.) No. 4 Ptv Ltd (1987) 163 C.L.R. 640 at 654; and consistently with this s. 4(2) of the Act makes duty exigible upon an instrument at the date of execution. By parity of reasoning its exigibility to duty under the subject provisions should be determined at the same time, that is, its date of execution. The stamping of the agreement for lease meant that if the lease had come into existence while the earlier provisions were in force then it would have been exigible for duty at the rate then prescribed even if it had not been stamped prior to the amendment. But the section prescribing the rate in those circumstances did no more than that. In other words, it provided for the appropriate duty in respect of each of sequential events, that is, the execution of the agreement for lease and the lease if they should respectively occur during its operation. But although it set the rate of duty of the later event at a certain level contingently upon the duty's having been paid in respect -- 15 of 18 -- of the first event, this does not mean that the same rate of duty continued to be set simply by the appellant ' s having paid the duty in respect of the first event. Before the provision operated in that way the discharge of another contingency was required by the legislation, that is, the execution of an instrument of lease. Because this did not occur while that provision of the Act was in force it had no operation. Accordingly when that formula was gone and replaced by another which was applicable when the lease was executed, then the latter became the legislation controlling the assessment of duty upon it. This is made clear by contrast with the position referred to above which would have obtained if the lease had been executed before the amendment, even if it were not stamped before that date. The legislation in the present case may be contrasted with that in Free Lankan Insurance Co. Ltd v. A.C. Rinasinqhe (1964) A.C. 541 which gave to a party who was injured by the negligence of a person who was compulsorily insured under it and against whom he obtained a decree for damages the right to recover those damages up to a limited sum from the compulsory insurer. The Privy Council held that the right of a party injured during the life of that legislation was preserved notwithstanding that he did not obtain any decree before the legislation was repealed. It is obvious that as a matter of substance it was the arising of a cause of action against the insured party which gave the injured party his right under the legislation, and the obtaining of a decree for damages was no more than a machinery requirement necessary to the quantification of the right. Consequently the -- 16 of 18 -- 6 right was held to be in existence before the repeal of the legislation notwithstanding that it may have been contingent or incohate at the time. As a matter of substance that is manifestly different from the position in the present case. It is not possible in this case to find such a right. , The occurrence of a contingency which is antecedent to and a pre-condition for the creation of a right by and upon the occurrence of a later event does not itself create the right. Nor does this position change when the later event occurs after a statutory change whereby the later event no longer creates the right. The mere statement of the position makes the result obvious. As the Privy Council observed in Abbott v. Minister for Lands (1895) A.C. 425 at p. 431:- "It has been very common in the case of repealing statutes to save all rights accrued. If it were held that the effect of this was to leave it open to anyone who could have taken advantage of any of the repealed enactments still to take advantage of them, the result would be very far-reaching. It may be, as Windeyer J. observes, that the power to take advantage of an enactment may without impropriety be termed a 'right'. But the question is whether it is a 'right accrued' within the meaning of the enactment which has to be construed." The same principle was applied in Total (Australia) Ltd v. Registrar of Companies (1969) V.R. 821 where a provision of the Companies Act provided that if a foreign company increased its capital, it should within one month after such increase lodge with the Registrar of Companies notice of the increase. The plaintiff, a foreign company, increased its capital at a time when it would have paid no fee upon the lodgment of the notice of the increase, but by the time it did lodge it a new enactment required the payment of a fee. Consistently with the above, it -- 17 of 18 -- 7 was held inter alia that the liability to pay a fee was to be determined as at the date of the lodgment of the notice and not as at the date of the increase in capital and the fact that the Act at the earlier time imposed no fee, taken alone, bestowed no right or privilege in the sense of the language of the provision, that is, a "right or privilege acquired or accrued". That is the position here. It may be remarked that it is doubtful whether this question should be addressed in terms of the "rights" of the taxpayer. It is hardly a right to have to pay tax even though it may be possible to claim that the tax should be paid at a lower rate. Rather is it a question of construction of the statute. For example, in the hypothetical circumstances that the lease in the present case had been executed before the amendment then, because it was exigible for duty at the time of its coming into existence the amount of duty was to be assessed at the old rate. The determination of that issue would have been simply a matter of construction of the statute. It would not have amounted to the upholding of any right in the taxpayer flowing from the execution of the lease prior to the amendment. It is perhaps unfortunate that this inappropriate concept has intruded into the exercise, with unnecessary complications. For the above reasons the appeal should be dismissed with costs . -- 18 of 18 --