(1) A mortgage that is used or is capable of being used (whether directly or
through a chain of relationships) to recover the whole or any part of an
amount contingently payable in connection with an advance--
(a) by a guarantor
or indemnifying party under a guarantee or indemnity, or
(b) by another party
under another instrument of a different kind,
is liable to duty as if the
amount of the contingent liability under the guarantee, indemnity or other
instrument (or, where there is more than one guarantee, indemnity or other
instrument, the greatest contingent liability) were a separate advance made
under the agreement, understanding or arrangement for which the mortgage is
security.
(2) In the case of a mortgage that is part of a chain of
relationships referred to in subsection (1), a reference in that subsection to
a contingent liability is a reference to a contingent liability limited to the
amount of any advance by any party in the chain, and does not include a
reference to any other kind of contingent liability.
(3) This section does
not apply if the Chief Commissioner is satisfied that there is no connection
between the mortgage and any advance by any party to the arrangements.
(4)
Nothing in this section requires duty to be paid more than once in respect of
an advance.
