Commissioner of Stamp Duties (NSW) v Yeend [1929] HCA 39; (1929) 43 CLR 235 (2 December 1929)

The Commissioner of Stamp Duties (New South Wales) Appellant; and Yeend Respondent .

The question raised by this appeal is whether an agreement in writing, between a caterer and a racing club, relating to the supply of refreshments to the public, is liable to the ad valorem stamp duty specified by the Second Schedule of the Stamp Duties Act 1920-1924 for "conveyances of any property." The agreement provided that the caterer, who is the respondent, should have the sole right of supplying "all the refreshments, eatables and drinkables to be sold or disposed of within the grandstand reserve and the St. Leger reserve" during race meetings to be held upon the Club's course for a period of three years. The caterer was required to supply his own plant and to provide the public with food and drink of the best quality and in sufficient quantities at prices specified in the agreement. It is implied that he shall have the use of the Club's refreshment rooms. The agreement regulates his duties in respect of some details, and it provides that no "sub-letting or assignment of interest will under any circumstances be allowed unless written permission be granted for same by the chairman" of the Club. It is quite clear that the agreement does not entitle the caterer to obtain exclusive possession of any part of the Club's premises for any time, however short. Besides undertaking the duty of providing for the public, the caterer agreed to pay to the Club the sum of £300 in respect of every race day.

The appellant, the Commissioner of Stamp Duties, claims the ad valorem duty appropriate to a conveyance under one or other of three distinct provisions of the Stamp Duties Act upon which he relies.

His first contention is that when sec. 65, which describes what the word "conveyance" shall include, is interpreted by the definition of the word "property" contained in sec. 3, it applies to the written agreement in question. Sec. 3 defines the word "property" to include "real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest": a definition which was adopted from the Conveyancing Act 1919. Sec. 65 defines the meaning of the word "conveyance" to include a catalogue of instruments "whereby any property ... is ... vested in or accrues to any person." Applying to this provision the definition of "property," the Commissioner maintains that the agreement between the caterer and the Club is an instrument whereby a right or interest in New South Wales is vested in or accrues to the caterer. We think a safe way of ascertaining the meaning of sec. 65, as affected by the definition of in sec. 3, is to read and interpret the section as if that definition were written at length into it. So reading it, sec. 65 would run: For the purposes of this Act the expression "conveyance" includes any transfer, lease, assignment, exchange, appointment, settlement, surrender, release, foreclosure, disclaimer, declaration of trust, and every other instrument (except a will), and every decree or order of any Court whereby any property in New South Wales including real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest is transferred to or vested in or accrues to any person. Wide as must be the operation of a provision thus expressed, it seems unnatural to apply its words to a document which does no more than describe mutual promises although they result in contractual rights. In this case the document expresses an ordinary simple contract, executory on both sides. Each contracting party incurred obligations to the other. A "right" to the performance of those obligations was, of course, created in the other, subject to his readiness and willingness to perform his own obligations. But the section relates to instruments by which the right is vested in or accrues to a person. This expression is appropriate enough to proprietary rights, but not one which may aptly be applied to the right to enforce an executory contract contained in the document. If this provision bore the wide meaning which the argument attributes to it, secs. 41 (1) and 71 would be superfluous. It is worth notice that, while decrees and orders are included in the definition of "conveyance," judgments are not. A decree or an order may vest property as that expression is ordinarily understood. But a judgment ordinarily creates a right—a right to enforce the payment of a sum of money by some person. The right is correlative to an obligation—a personal obligation. Such rights arise out of many relations, but it would not be usual, when the relation is established by a document, to speak of such a right as one which was vested in or accrued to a person by the instrument. Indeed, an inspection of the Second Schedule to the Act will show that nearly all the various documents other than "conveyance" there specified might be brought within the phrase if it received so extensive a meaning. We think that, if sec. 65 is read with the definition of "property" written in it, no one would naturally understand the words "instrument whereby any property in New South Wales including any right or interest is vested in or accrues to any person" to apply to the mere contractual right of a party to an executory contract in writing. It seems unnecessary and undesirable to attempt to formulate the limitations which must be placed upon the generality of the language contained in the definition of "property." It is enough to say that sec. 65 cannot by its aid be extended to such a contract as we have described.

The Commissioner's second contention was that the instrument fell within sec. 41 (1). This sub-section provides: "Every agreement for the sale or conveyance of any property in New South Wales shall be charged with the same ad valorem duty to be paid by the purchaser or person to whom the property is agreed to be conveyed as if it were a conveyance of the property agreed to be sold or conveyed and shall be stamped accordingly." This provision relates to instruments, which do not themselves operate to sell or "convey" "property" within the meaning given to that word by sec. 65, but which contemplate a future sale or conveyance. The contract between the Club and the caterer contains nothing in the nature of an agreement for a future "conveyance," however large a meaning be given to the word "conveyance." The words "every agreement for the sale ... of any property in New South Wales" although read as including any right or interest, appear to us quite inappropriate to describe the contract between the Club and the caterer. The caterer's rights would not ordinarily be described as rights arising under an agreement for their sale to him, nor would he be described as a purchaser.

The Commissioner relied for his third contention upon sec. 71. That section is as follows: "Where upon the sale of any annuity or other right not before in existence such annuity or other right is not created by actual grant or conveyance, but is only secured by bond, warrant of attorney, covenant, contract, or otherwise, the bond or other instrument, or some one of such instruments, if there is more than one, is to be charged with the same duty as a conveyance." The critical words in this provision are "where upon the sale of any ... other right not before in existence." We think "sale of a right" is an expression which could not be properly used to describe the promises made by the Club, although part of the consideration for which they were given was a promise to pay sums of money. There was neither a sale, nor a right, within the meaning of the section.

For these reasons we think that the judgment of the Supreme Court was right and that the appeal should be dismissed.

The question for determination is whether an agreement dated 1st March 1928, and made between the Australian Jockey Club and the respondent, is liable to ad valorem conveyance duty or other duty under the Stamp Duties Act 1920 as amended by the Act of 1924.

By force of sec. 4 and of the Second Schedule to the Act, duty is chargeable in respect of every conveyance of any property. If otherwise than on sale or exchange, the duty is ad valorem simply; if on sale or exchange, then the duty is primarily on the amount or value of the consideration, and if the value of the property conveyed is greater than the consideration, then—apart from shares—the duty is ad valorem. It is thus seen that there are two essentials: (1) conveyance and (2) property. The argument satisfies me that it is necessary to consider separately the two conceptions although the word "conveyance" connotes the presence of "property."

As to conveyance, sec. 65 is the main section, and by it the term "conveyance" includes every instrument (except a will) whereby any property in New South Wales is "transferred to or vested in or accrues to" any person. If an instrument answers the description so far stated, it is a "conveyance." There is a supplementary but independent provision contained in sec. 41 whereby agreements for sale or conveyance of property in New South Wales are taxable as if they were conveyances. The fundamental difference between an agreement to convey and a conveyance is referred to by Lord Sumner in delivering the judgment of the Privy Council in Stamps Commissioners v. Queensland Meat Export Co.[1]. Sec. 71 is another supplementary and independent section applying to the "sale" of a non-pre-existing right, not created by actual grant or conveyance, but, of course, necessarily created in some way and only "secured" by some collateral instrument. There the collateral instrument of security is chargeable with duty as if it were a conveyance. Secs. 41 and 71 are precautionary provisions to prevent mere departure from the form of a conveyance enabling one to escape from the Act. But neither of these sections is applicable here, because when tested by the terms of sec. 65 and Lord Sumner's judgment[2], the agreement dated 1st March 1928, the instrument under consideration, is in form a "conveyance" within the meaning of the Act. No further or other instrument of title was contemplated or indeed possible to vest in the respondent the right sold to him. The only further legal element necessary to constitute it a "conveyance" within the meaning of sec. 65 is that the right it vests should be "property" in New South Wales.

The crucial question then is: Is that subject matter "property" within the meaning of the Act? The definition is very wide, since it "includes real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest." From the fact that "property" is the matter defined, that the last word is "interest," and from a careful inspection of the terms of the Second Schedule under the heading "Conveyances of any Property," and with the additional light given by the use of the word "right" in sec. 71, it is clear to me that the word "right"—which is the word relied on by the Commissioner in this case—must be confined to a right in the nature of property as ordinarily understood. Indeed, Mr. Thompson, in his courageous argument, frankly admitted so much. But he contended that the right of catering, to which the respondent became entitled under the agreement, was in the nature of property. The test in every such case must be whether the "right" which is either "transferred to" or "vested in" or "accrues to" the alleged taxpayer, is a personal right or a property right. It is not, in my opinion, material whether it is created by the agreement or not. That is not the standard. Sec. 71 confirms that view. The standard is the inherent nature of the right that is the immediate subject matter of the agreement. That subject matter may in a given case pre-exist or it may not, the only essentials are that it is "property" and that it is transferred to, vested in or accrues to some person. If it is not in itself property, attempted assignment carries it no further. Assignability is a consequence, not a test (see Sports and General Press Agency Ltd. v. Our Dogs Publishing Co.[3].

Without going back very far in the history of the matter, there are some very recent and quite decisive authorities. One is King v. David Allen & Sons, Billposting, Ltd.[4]. A, in July 1913, made a contract with B, permitting the latter to affix posters and advertisements to the flank walls of a picture house to be erected on his property by a company to be formed for four years, at a rent of £12 a year, A agreeing not to permit any other person during the period to affix any advertisement to the walls. The company was formed, took a lease of the premises from A, with full knowledge of the agreement, and even agreed with him to take an assignment of the billposting agreement—but no actual assignment was executed, and the lease did not refer to the billposting agreement. The company entered into possession, built the picture-palace, and refused permission to B to post advertisements. The House of Lords had to consider whether the right conferred by A on B was personal only or was an estate or interest in the land. It was held to be "nothing but a personal obligation." That depended on the construction of the agreement, and, as Lord Buckmaster L.C. said[5], the matter does not depend on the terms attached to the parties as "licensor and licensee" or as "lessor and lessee." The substance of the agreement determines the result. On the other hand, the cited case of Sports and General Press Agency Ltd. v. Our Dogs Publishing Co.[6] in the Court of Appeal shows that an exclusive right of taking photographs is not a form of property known to the law. And then there is the case of Joel v. International Circus and Christmas Fair[7] before the Court of Appeal (Lord Sterndale M.R. and Warrington and Scrutton L.JJ.). A person applied for and obtained space in the fair at 6d. a foot frontage, and the nature of the agreement was construed by Eve J., as the primary Judge, and afterwards by the Court of Appeal, as one giving the applicant an interest in the property. The Court of Appeal were of opinion that it was merely upon the true construction of the contract that the case depended, the claim being for an injunction in the way of specific performance. They distinguished (inter alia) Frank Warr v. London County Council[8] and other authorities.

No doubt in the case of a personal right an injunction may be granted to prevent a breach of contract, but not in the way of specific performance (James Jones & Sons Ltd. v. Earl of Tankerville[9]). The distinction is clear between the personal right and the property right. The latter alone falls within the statute in hand. There is nothing intermediate, and ultimately the question depends on construction of the instrument as to which category it comes under.

The agreement of 1st March 1928 confers a mere personal right of selling refreshments with ancillary stipulations. That is the right which "vests in" or "accrues to" the respondents by the instrument. But since that right is not in the nature of property—but in the same category as King v. David Allen & Sons,Billposting, Ltd.[10]—the case is outside the definition of property, and the respondent succeeds.

Solicitor for the appellant, J. V. Tillett, Crown Solicitor for New South Wales.

[1] (1917) A.C. 624, at p. 628.

[2] (1917) A.C., at p. 628.

[3] (1917) 2 K.B. 125.

[4] [1916] UKHL 1; (1916) 2 A.C. 54.

[5] (1916) 2 A.C., at p. 59.

[6] (1917) 2 K.B. 125.

[7] (1920) 124 L.T. 459.

[8] (1904) 1 K.B. 713.

[9] (1909) 2 Ch. 440, at p. 443.

[10] [1916] UKHL 1; (1916) 2 A.C. 54.

High Court of Australia

Commissioner of Stamp Duties (NSW) v Yeend [1929] HCA 39; (1929) 43 CLR 235 (2 December 1929)

HIGH COURT OF AUSTRALIA