Commissioner of Stamps (WA) v L Whiteman Ltd [1940] HCA 30; (1940) 64 CLR 407 (28 October 1940)

HIGH COURT OF AUSTRALIA

The Commissioner of Stamps (Western Australia) Appellant; and L. Whiteman Limited Respondent.

H C of A

On appeal from the Supreme Court of Western Australia.

28 October 1940

Rich A.C.J., Starke and Williams JJ.

Dunphy, for the appellant.

Unmack, for the respondent.

Dunphy, in reply.

The following judgments were delivered:—

Rich A.C.J.

This is an appeal by special leave from an order of Dwyer J., made on originating summons, by which the assessment made by the appellant on a transfer of land from Lewis Whiteman to the respondent was varied by disallowing the assessment of duty on the item "brickmaking machinery, £4,040." The reasons of the learned judge are not incorporated in the transcript; whenever reasons are given, they should be put in the transcript for the benefit of the appeal court. I understand, however, that in this case the learned judge decided the matter in chambers and that in Western Australia it is not the practice to give reasons in chamber matters.

The material upon which the order was made consisted of a case stated by the appellant for the opinion of the Supreme Court of Western Australia, and the affidavits of Messieurs Dunphy, Unmack and Whiteman. It appears from this material that the facts were that a transfer of certain land and other assets was made to the respondent, and amongst such assets was machinery, portion of which was suitable to brickmaking and valued by Whiteman at £4,040. In making his assessment the commissioner considered that this item passed to the respondent as part of the land. The respondent, however, contends that the machinery was all of a chattel nature and the only consideration upon which duty is chargeable is that set out in the instrument, namely, the sale value of the land.

The question in the case stated was whether the commissioner's assessment was correct.

The facts on which the appellant relies are that the machinery was bolted to concrete bases and was used for making bricks from clay. No doubt, when the clay is exhausted the machinery will be moved from its present position, but in the meantime it is affixed to the land and is essentially being used for the better enjoyment of the land. Even if the machinery is affixed, the respondent contends that the intention of the parties is required to pass it as land and that the facts show that it was not the intention of the vendor and purchaser that the machinery should be sold as fixtures or as part of the soil, but it was intended that it should be sold as chattels. But "the circumstance to show intention is the degree and object of the annexation which is in itself apparent and thus manifested the intention" (Hobson v. Gorringe[1]).

In this case the parties have manifested their intention as to the degree and object of the annexation by bolting the machinery to the concrete bases and enclosing the machinery in sheds which must be ruined if the machinery is removed, the object being to use the machinery for transforming clay found on the land into bricks. As Lord Lindley said, "the purpose for which the machines were obtained and fixed seems to me unmistakable; it was to complete and use the buildings as a factory. It is true that the machines could be removed if necessary, but the concrete beds and bolts prepared for them negative any idea of treating the machines when fixed as movable chattels" (Reynolds v. Ashley & Son[2]). The authorities are collected in a convenient form in Australian Provincial Assurance Co. Ltd. v. Coroneo[3]; North Shore Gas Co. Ltd. v. Commissioner of Stamp Duties (N.S.W.)[4]; Great Fitzroy Mines Ltd. v. Commissioners of Stamps[5].

In my opinion the machinery was affixed to and became part of the land. That required the commissioner to assess it as land. It is clear that he was entitled to examine the instrument to ascertain whether the consideration set out in the instrument was the real consideration for the sale.

The order that I suggest is that so much of the order of Dwyer J. disallowing the commissioner's assessment on the item "brickmaking machinery £4,040" be set aside and the assessment of the commissioner be restored. That would increase the duty from £51 15s. to £92. Pursuant to the undertaking given on the application granting special leave, the commissioner will pay the costs of the appeal.

Starke J.

I agree and have nothing to add except this. Where parties ask the commissioner to state a case, he should state all the facts clearly and explicitly for the opinion of the court. He has not done so in this case, and all parties have submitted affidavits which they agreed should be looked at. If they had not done so, we might not have looked at them.

Williams J.

I agree and have nothing to add.

Appeal allowed by setting aside so much of the order of Dwyer J. as disallowed the assessment of the item "brickmaking machinery, £4,040" and in lieu thereof restoring the commissioner's assessment of such item. Matter remitted to the commissioner to be dealt with in accordance with this order. Pursuant to order on the grant of special leave commissioner to pay the costs of the appeal.

Solicitor for the appellant, E. A. Dunphy, Crown Solicitor for Western Australia.

Solicitor for the respondent, Unmack & Unmack.

[1] (1897) 1 Ch., at p. 193.

[2] (1904) A.C. 466, at p. 472.

[3] (1938) 38 S.R. (N.S.W.), at p. 712.

[4] [1940] HCA 7; (1940) 63 C.L.R. 52.

[5] (1913) Q.S.R. 161.