New Britain Plantations Ltd v Acting Treasurer of the Territory of New Guinea [1936] HCA 22; (1936) 55 CLR 127 (14 May 1936)

HIGH COURT OF AUSTRALIA

New Britain Plantations Limited Appellant; and The Acting Treasurer of the Territory of New Guinea Respondent.

H C of A

On appeal from the Supreme Court of the Territory of New Guinea.

14 May 1936

Starke, Dixon and Evatt JJ.

Teece K.C. (with him Sturt), for the appellant.

E. M. Mitchell K.C. (with him Kitto), for the respondent.

The following written judgments were delivered:—

May 14

Starke J.

Case stated under the provisions of the Stamp Duties Ordinance of the Territory of New Guinea (1927, No. 37, sec. 18), which was set down for hearing and heard before the Supreme Court of the Territory.

On 30th April 1935 the Custodian of Expropriated Property, which was a corporation sole and the registered owner of an estate in fee simple in certain land situated in the Territory of New Guinea, transferred the said land to the New Britain Plantations Ltd. with the consent and by the direction of Wilhelm August Mirow and Frederick Reidy Jolley. The consideration stated in the transfer was the sum of £73,500, paid by Mirow to the Custodian, and the sum of £100,450, paid by Jolley to Mirow, and the sum of £47,882, paid by the New Britain Plantations Ltd. to Jolley. The case states that the Custodian, by an agreement in writing dated 10th May 1926, sold the land to Mirow for the sum of £73,500, that Mirow, by an agreement in writing dated 1st November 1926, sold the land to Jolley for £100,450, and that Jolley by an agreement in writing dated 23rd July 1931 sold the land to New Britain Plantations Ltd. for £47,882 10s. A Stamp Duties Ordinance came into operation in New Guinea on 1st February 1928. It provided (sec. 6) that "from and after the commencement of this ordinance there shall be charged ... upon the several instruments specified in the schedule the several duties therein set forth." One of these instruments specified in the schedule was "Conveyance or transfer on sale of any real property." But sec. 15 provided that any instrument executed before the commencement of the ordainnce should not be liable to stamp duty under the ordinance.

The questions stated for the opinion of the Supreme Court were:—"(a) Is duty payable on the said instrument of transfer dated 30th April 1935 in respect of the considerations for the sales" from the Custodian to Mirow and from Mirow to Jolley "made before the first day of February 1928, the date of the commencement of the said ordinance? (b) With what amount of duty is the said instrument of transfer chargeable?"

Phillips J., of the Supreme Court of the Territory of New Guinea, declared that duty was payable on the instrument of transfer in respect of the considerations for the sales in the first question mentioned, and that the amount of duty with which the instrument was chargeable was £1,228 15s.

The amount of duty was calculated on the sales in the first question mentioned, on the scale applicable as on the 1st January 1931, and on the sale from Jolley to New Britain Plantations Ltd. on the increased scale in force since the passing of the ordinance 1931 No. 15 (see sec. 2 (c) of that ordinance). Leave to appeal from this judgment was granted by this Court, and the appeal now falls for determination.

The transfer was executed after the commencement of the ordinance 1927 No. 37. It falls within the class of instruments charged with stamp duty under sec. 6 of that Act, and is not exempted by sec. 15. The critical question is: With what amount of duty is the instrument of transfer chargeable? The ordinance, by sec. 8 (1), provides that any instrument containing or relating to several distinct matters shall be separately and distinctly charged with duty as if it were a separate instrument. And sec. 37 (3) enacts that every sale of real property shall be chargeable with ad valorem duty upon the consideration therefor, and that duty shall be paid on the conveyance which seeks to give effect, whether directly or indirectly, to every sale of real property. The result of this legislation is that the instrument of transfer dated 30th April 1935 is chargeable with duty in respect of each of the three sales which it effectuates. It was contended that the ordinance should not receive a retrospective construction. But it is instruments of a particular class or description that are charged with duty. A contract of sale is not chargeable with the duty payable upon "conveyance or transfer on sale of any real property." It is only an instrument of conveyance or transfer that is chargeable (Commissioners of Inland Revenue v. Angus[1]). It is sec. 6 that is the charging section, and not sec. 37 (3). The provisions of sec. 37 (3) do not change the nature of the duty imposed by sec. 6 upon instruments, nor create a new duty or tax upon sales of real property as such. But they do enable the duty chargeable upon the instrument to be ascertained or calculated by reference to the sales to which, in the words of the ordinance, the conveyance "seeks to give effect." The ordinance is not, therefore, in any relevant sense, retrospective: it only imposes a duty upon a conveyance or transfer executed after the commencement of the Act. It is true that the amount of stamp duty may be ascertained or calculated by reference to sales of real property made antecedently to the commencement of the ordinance—whether a single sale or a series of sales. But the ordinance is not therefore properly called retrospective. The Act explicitly imposes stamp duty upon instruments executed after its passing, calculated upon the considerations for the sales effectuated by the instruments, whether the considerations arose antecedently to the commencement of the ordinance or not. Again, the provision in sec. 37 (6) that the duty payable on a sale of real property shall be borne by the purchaser at the sale, cannot and does not exclude the operation of the charging section of the ordinance as to cases within its terms.

In my opinion, the decision of Phillips J. was right, and this appeal should be dismissed.

Dixon and Evatt JJ.

The Stamp Duties Ordinance 1927-1933 of the Territory of New Guinea came into force on 1st February 1928. Up to that time under the law of the Territory transfers on sale of real property had not been liable to stamp duty. But item VIII. of the schedule of the ordinance includes such instruments. Sec. 6 provides that, from and after the commencement of the ordinance, there shall be charged upon the several instruments specified in the schedule the several duties therein set forth. Sec. 15 provides that any instrument which was executed before the commencement of the ordinance shall not be liable to stamp duty under the ordinance.

After the commencement of the ordinance an instrument of transfer was executed in favour of the appellant. It was executed by the transferor and by two directing parties. The land comprised in the transfer had been sold by the transferor to the first directing party, by the first directing party to the second directing party and by the second directing party to the transferee. The transfer sets out the respective considerations for each of these sales. The contracts for the first and second sales had been made before the ordinance commenced and the contract for the third sale after its commencement.

The questions for decision are whether the transfer is liable to stamp duty, and, if so, upon which of the considerations duty should be calculated.

Phillips J., from whose decision this appeal is brought, held that the instrument was dutiable and that the duty should be calculated upon all three considerations. We agree in this decision.

That the transfer is liable to stamp duty does not, in our opinion, admit of any doubt. It is an instrument executed after the commencement of the ordinance, and, therefore, falls within sec. 6 and is not excluded by sec. 15. It is clear too, we think, that, if instead of carrying the three contracts of sale to completion by means of one transfer, a separate transfer had been executed after the commencement of the ordinance in respect of each sale, all three such transfers would have been dutiable. The third or last transfer would, of course, raise no question, because the contract of sale which it would complete was made after the ordinance came into operation. But, although it was not conceded at the Bar that the first two such transfers would be dutiable, the terms of secs. 6 and 15 and of item VIII. of the schedule afford no ground for a contention that they would escape liability. They would be transfers on sale executed after the commencement of the ordinance and each would be liable to stamp duty calculated on the amount of the consideration for the sale.

In our opinion the provisions of the ordinance which relate to or affect instruments carrying out more than one transaction produce the same result in the case of a single transfer giving effect to all three sales. These provisions are sec. 8 (1) and sec. 37 (3). Sec. 8 (1) provides that "except as is otherwise provided in this or any other ordinance, any instrument containing or relating to several distinct matters shall be separately and distinctly charged with duty in respect of each matter, as if it were a separate instrument." Sec. 37 (3) provides that "every sale of real property shall be chargeable with ad valorem duty upon the consideration therefor, and that duty shall be paid on the conveyance which seeks to give effect, whether directly or indirectly, to every sale of real property." The appellant contends that sub-sec. 3 of sec. 37 imposes a charge or tax upon the sale or sales to which it refers and that it should be construed as applying only to sales made after the ordinance came into force. In further support of this contention, he relies upon sub-sec. 6 of sec. 37, which casts the burden of the duty upon the purchaser, a provision which, he says, could not have been intended to affect transactions entered into before the ordinance was made.

Sub-sec. 3 does not make a contract of sale liable to duty independently of the transfer by which it is carried into effect. The sale is not chargeable as such. But instruments of transfer on sale are made dutiable and their very description involves reference to the transaction they effectuate. It is in this sense that the sale is "chargeable." When the ordinance makes it clear, as in our opinion it does, that an instrument of transfer executed after the ordinance begins is to be liable to stamp duty, although the sale took place before the ordinance, it appears to us to follow that the antecedent sale or sales are "chargeable" in the sense that the duty on the instrument of transfer is calculated by reference to them. In strictness, the imposition is not retrospective; for it is levied on the execution of the instrument. It is true that it is measured in amount by reference to past facts. But to discuss whether the calculation or measurement of the duty in this way involves retrospectivity is futile, because, in any case, the presumption against retrospective imposition could not prevail against the combined effect of secs. 6, 15, and 37 (3). And even if sec. 37 (6) were inapplicable to purchasers under contracts already made, a view to which we do not say that we subscribe, that circumstance could not exclude the operation of sub-sec. 3 on transfers giving effect to sales made before the ordinance.

For these reasons we think the appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitors for the appellant, MacMaster, Holland & Co.

Solicitor for the respondent, W. H. Sharwood, Crown Solicitor for the Commonwealth.

[1] (1889) 23 Q.B.D. 579.