Comptroller of Stamps (Vic.) v. Rylaw Pty. Ltd.
Judges:Fullagar J
Court:
Supreme Court of Victoria
Fullagar J.
These are two appeals to the Supreme Court each from a decision of the Victorian Taxation Board of Review, the appeals to this Court lying as of right by virtue of sec. 33E(7) of the Stamps Act 1958.
The first appeal is V.T.A. No. 26 in which the Comptroller of Stamps is the appellant from a decision of the Board to the effect that an agreement in writing (hereinafter called ``the agreement'' or ``C.1'' or ``the critical agreement'') is not a ``deed of gift'' within the meaning of Heading IX of the Third Schedule to the Stamps Act. The second appeal is V.T.A. No. 27 in which the appellants are C.V. McKeon & Co. Pty. Ltd. and others, appealing from a decision of the Board to the effect that a transfer of land (hereinafter called ``the transfer'' or ``the critical transfer'') is a conveyance or transfer chargeable with duty calculated in accordance with sec. 68(1) of the Stamps Act.
Before this Court the respondent to the first appeal, namely Rylaw Pty. Ltd. (which I shall sometimes call ``the Company''), and the numerous appellants on the second appeal, were all represented by Dr. Spry Q.C. and Mr. Kimm, whilst the Comptroller of Stamps in each appeal was represented by Mr. Nash of counsel.
I wish to say at the outset that I have found the resolution of the appeals a most difficult task, but it has been made easier by the clear and helpful arguments of counsel on each side. I also wish to acknowledge at the outset the very great assistance I have derived from the detailed and closely-reasoned decision of the learned member of the Board. I gather that the argument of counsel before me included arguments not put or not fully developed or explored below, and it must not be thought that, because I do not deal with the reasons of the learned member of the Board, that they have not been of the greatest assistance to me in resolving the issues as they have been isolated by the arguments before me.
The appeals have been heard together here as below. The facts appear from the documents on file including the agreed statement of facts and the agreed documents, and I shall not set them out in any detail.
At the end of 3 May 1979 Rylaw Pty. Ltd. was in liquidation. All its debts had been paid, or else provided for by a sum of approximately $24,000 cash set aside for the purpose by the liquidator, except for a mortgage debt on a valuable parcel of real estate and a large debt of about $500,000 owed to the various shareholders of the Company pro rata in accordance with the number of shares held by each. On 4 May 1979 the shareholders executed the critical agreement under seal called agreement C.1 to which they were the only parties and by which they agreed inter alia that they would acknowledge to the Company that they were not entitled to be paid the several debts making up the aggregate debts of the said shareholders. On the same day, and very probably on the same occasion and immediately afterwards, they executed another agreement under seal, called C.2, to which they and the Company were parties and which recited the critical agreement C.1, and by which they made acknowledgment to the Company (as agreed upon in C.1) and by which they requested the liquidator to transfer to them in specie the mortgaged land aforesaid, which was land under the Transfer of Land Act. On the following day, 5 May 1979, the liquidator executed the critical transfer by which the Company transferred to the shareholders, clearly as a distribution in the winding up, the said land subject to the mortgage.
I think I should read the salient portions of these three documents. The critical
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agreement recites that the parties are the shareholders in the Company and hold the shares set out opposite their names in the schedule, and that they have lent moneys proportionate to their respective shareholdings, the moneys being set out opposite their names also in the schedule, and the agreement witnesses:``that the parties hereto jointly and each party severally agrees with the other and others of them that, as the said loans are proportionate to the said shareholdings, all the said loans shall be and are hereby cancelled and they and each of them will acknowledge to the Company and to the Liquidator of the Company that the debts have been so cancelled and that they are not nor is any one of them entitled to payment thereof upon the liquidation of the Company.''
By the agreement C.2 it is recited that the shareholders have lent money to the Company:
``but have agreed between themselves that the said loans being proportionate to their shareholdings shall be cancelled;''
and cl. 1 of the agreement C.2 provides that:
``the Shareholders hereby request the Liquidator to transfer to them the land remaining untransferred in Certificate of Title Volume 9078 Folio 472 in specie to be held by them as tenants in common in shares proportionate to their respective shareholdings;''
and cl. 2 provides that:
``the Shareholders having reached agreement between themselves that, the loans set out in the said schedule being proportionate to their respective shareholdings, they shall not nor will any of them be entitled to receive payment thereof upon the liquidation of the Company they hereby jointly and severally acknowledge to the Liquidator accordingly.''
By cl. 3 it was agreed between the parties that:
``any other assets of the Company in excess of its liabilities (which might come into the hands of the Liquidator) shall be distributed by him to the Shareholders in proportion to their shareholdings.''
Finally, by cl. 4 the shareholders agreed with the liquidator and each other that they would contribute in appropriate proportions ``any further sums which may be required to be paid by the Company to satisfy its liabilities''. By the critical transfer, the Company (described as in voluntary liquidation) ``in consideration of the distribution in specie of the assets of the company'' transfers to the shareholders who from time to time I call the taxpayers,
``all its estate and interest in all that piece of land being the whole of the land described in Certificate of Title Volume 9078 Folio 492.''
As I think I have said, the land in question was at all material times mortgaged to an outside party under the provisions of the Transfer of Land Act.
The Board held that the transfer of land attracted stamp duty under sec. 68(1) of the Stamps Act as that section stood on 5 May 1979 and as it stood until the commencement in May 1980 of sec. 7 of Act No. 9413 of 1980. All references by me to sec. 68(1) are to be taken as references to it prior to May 1980 unless otherwise expressly stated.
The taxpayers contend that sec. 68(1) does not of itself make chargeable with duty any instrument which in the absence of the subsection would not be chargeable with duty, and that the subsection merely describes the measure by which a conveyance otherwise chargeable with duty, that is to say, a conveyance on sale, is to be charged. This was the view taken by Hood J. of the precursor of sec. 68(1) in
Ex parte Miller and Gray (1892) 18 V.L.R. 31, and there is in my view no distinction, material to the present case, between the section there under examination and sec. 68(1) itself. Mr. Nash, for the Comptroller, conceded that this was so. Of the earlier provisions Hood J. said at pp. 32-33 this:
``By the Stamps Act, ad valorem duty is chargeable on a `conveyance or transfer on sale of any real property', and by sec. 93 this expression is defined as including every instrument whereby any property, upon the sale thereof, is legally or equitably transferred to, or vested in, the purchaser. By sec. 97 it is enacted that
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when any property is conveyed to any person, in consideration, wholly or in part, of any debt due to him, such debt is to be deemed the whole or part (as the case may be) of the consideration in respect whereof the conveyance is chargeable with ad valorem duty. For the collector's view, it was first argued that sec. 97 covers this case, and it imposes a duty on this transfer. With this contention I do not agree. Section 97, in my opinion, is merely in aid of the general power of taxation, by affording a mode of estimating the duty in cases of executed considerations. It does not of itself create any obligation to pay duty. It pre-supposes a document liable to duty, and then directs how that duty is to be ascertained, viz. by including the amount of the past debt in the consideration upon which the ad valorem duty is assessed.''
Mr. Nash frankly conceded that on this point of the present case he could not succeed unless I were prepared not to follow Hood J. But this decision has stood, with its reasoning unimpaired, for nearly 90 years. Moreover the legislature, in 1892 and very shortly after the decision, introduced the precursors of sec. 68(2) and sec. 69 of the Stamps Act, adding to the end of the former the words ``and such conveyance shall be chargeable with the same ad valorem duty as a conveyance or transfer on sale of any real property for the same consideration'': see sec. 13(1) of the Stamps Act 1892. As Dr. Spry for the taxpayers contended, it is significant that, although these final words were included at the end of sec. 13(1), the precursor of sec. 68(1), as construed by Hood J., was left unaltered. I think Dr. Spry's contention is correct, that the legislature must be taken to have acquiesced in the construction put upon the subsection by Hood J. Furthermore, I respectfully consider that it is, apart from authority, the correct construction.
In these circumstances I am certainly not prepared to depart from the construction adopted by Hood J. in 1892, and I hold that sec. 68(1) applies only to a ``conveyance on sale''.
The question then arises whether the transfer of the present case was a ``conveyance on sale''. Mr. Nash contended that it was, for the reason that the kinds of ``consideration'' which will now make a transaction a sale under this legislation have been greatly expanded and include not merely pecuniary considerations (as it was originally confined) but a wide variety of things constituting money's-worth. It was contended that by virtue of sec. 46(2) of the Transfer of Land Act 1958 there was implied into the transfer of the present case a covenant by each transferee with the transferor, binding the transferee to indemnify the transferor against all liability under the mortgage, and that this implied covenant in the transaction provided valuable consideration for the transfer instrument and made it a conveyance on sale chargeable with duty under sec. 17(1) and Heading VI of the Third Schedule, the duty being quantified by application of sec. 68(1).
In
Ex parte Finlay (1884) 10 V.L.R. (Eq.) 68, the question was whether each transfer, for natural love and affection, by a father to his children, only some of whom were minors, of land which was subject to a mortgage under the Transfer of Land Statute, was a ``transfer not made bona fide for valuable consideration'' within the meaning of sec. 4 of the Land Tax Act 1877. It was held that each transfer was within this negative description notwithstanding that the Transfer of Land Statute made each adult transferee liable to indemnify the mortgagor under the mortgage.
Molesworth J. at p. 76, said this:
``So far as the adult children are concerned there may be a responsibility when they accept the property, but that will be by operation of law, and I have not a particle of evidence that that responsibility was ever thought of in the entire transaction. It is a valuable consideration which the ingenuity of counsel has discovered, but which the parties themselves never thought of.''
The decision of Molesworth J. was on appeal upheld by the Full Court. Holroyd J. speaking for the Court said, at p. 81:
``... we are not aware of any case even under the Statute 27 Eliz., in which a settlement of an equity of redemption, made in consideration of natural love and affection only, not merely as expressed but in fact, has been held not to be voluntary because of the equitable
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obligation on the part of the grantees to indemnify the settlor against the mortgage debt, or even of an express covenant to pay it, which is held to be no more than an indemnity.''
His Honour said, of a gift of a mortgaged estate, that ``the gift itself is not of an estate clear, but only cum onere, and no consideration moves from the donee in accepting the onus which is part of the gift''. He added, at p. 83, that the statutory obligation to indemnify was -
``an obligation attached to the gift, an incident of the thing given... The indemnity was not only not valuable to Mr. Finlay (for his children had nothing but the land); but it was not in fact the consideration for the transfers, or any part of the consideration.''
In the present case, it was certainly no part of any bargaining between the transferor and the transferees that the latter would indemnify the former against the mortgage debt. In my opinion, the giving of the statutory indemnity ``was not in fact the consideration for the transfer, or any part of the consideration'', and in my opinion it did not transform a distribution in specie by a liquidator into a sale, any more than the covenant to indemnify could transform a gift into a sale; for reasons indicated by the cases cited, the presence of a mortgage, with the resultant implied covenant to indemnify, is simply not the kind of quid pro quo which can make a transfer of the kind under discussion into a transfer on sale. The reason for the enactment of such provisions as sec. 68(1) is indicated in the judgment of Bruce J. in
Swayne v. I.R. Commrs. (1899) 1 Q.B. 335 at p. 337. The provisions apply to measure stamp duty, by measuring the price, on a conveyance on sale, because on a sale the cost of discharging the mortgage can be looked at as part of the price paid or to be paid by the purchaser for the land sold - it is, as it were, part of what the purchaser gives in order to obtain the transfer, whereas I think that a true donee, e.g., gives no such covenant in order to obtain the transfer, and the recipient of the distribution in specie by the liquidator gives no such covenant in order to obtain the land or in any sense as the price for the land - the shareholder has an equitable or statutory right to a transfer immediately before the distribution in specie by the liquidator.
In the present case para. 9 of the Statement of Agreed Facts discloses that immediately prior to the execution of the transfer the assets of the Company consisted of the land in question (with plant and equipment etc.) and the sum of $24,595.24 cash at bank. Paragraph 10 states that the said sum ``was retained by the Liquidator to provide for liabilities of the Company other than the loans which were the subject of the said agreement''. By para. 9 the contents of both the statutory declaration of the liquidator declared on 26 July 1979 and the Company's balance sheet as at 5 May 1979 are included in the agreed facts and documents of the case. Paragraph 7 of the declaration states that:
``all debts of the said Company have been paid, or provision has been made for the payment thereof by my having retained the sum of $24,495.24 as set out in the balance sheet.''
That balance sheet shows current liabilities as follows:
$
Provision for income tax 16,683.74
Provision for liquidation expenses 1,542.00
Contingency sum to make provision
for unexpected liabilities 6,269.50
----------
$24,495.24
----------
It seems to me to be quite clear therefore that, on both 4 May 1979 and 5 May 1979, all creditors (other than the mortgagee of the land and the shareholders of the company) had either been paid out or else had adequate provision made for them by the cash sums referred to. It is also clear that, as early as 4 May 1979, the shareholders had requested the liquidator to transfer to them in specie the land in question: see para. 1 of the Agreement being document C.2 which is, of course, not the critical agreement in these proceedings and which no one contends attracts duty of itself. Therefore, immediately before the execution of the critical transfer dated 5 May 1979, the liquidator was bound to transfer the land to the shareholders, and not by virtue of anything that could be called a sale or a contract for sale but by virtue of the fact that
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the liquidation of the company was so far as relevant complete except for the distribution of the surplus property (the land) to the shareholders, in specie as requested. I think the better view is that the liquidator held the land on trust to convey it to the shareholders, but whether it was a trust or a mere statutory duty appears to me not to matter for the purposes of the present case. What matters in my opinion is that the liquidator was strictly bound and legally compellable to transfer the land in specie to the shareholders as part of his duty to distribute the assets of the company in the winding-up. In those circumstances it seems to me impossible to say that the implication of covenants implied by the Transfer of Land Act could have the effect of turning a distribution in the winding-up into a ``conveyance on sale''.The view which I have taken is in my opinion strongly supported by the decision and reasoning of the Full Court of the Supreme Court of Tasmania in
Miller & Maund Pty. Ltd. v. Commr. of Stamp Duties (1959) Tas. S.R. 94, although of course the relevant statutes are different. I refer especially to the joint judgment from the top of p. 99 to the top of p. 101. Despite the differences in the legislation I think, nevertheless, that the following passage from the joint judgment is directly applicable to the present case:
``In our view, a conveyance from a liquidator on a winding-up in these circumstances is not a sale or disposition of property for purchase money or consideration in the nature of a price. The transaction is a conveyance to a person entitled in equity to the property conveyed. It is analogous to a conveyance by a trustee of a will or settlement to a beneficiary calling for a conveyance of the legal estate to him at the appropriate time. The person calling for a conveyance as beneficiary under a settlement may, in fact, have been the person who made the contract by which the settlement was made and may have found the price when the conveyance to trustees upon the trusts of the settlement was made. If he becomes entitled to call for a conveyance, he does so, not by virtue of his price but by the operation of the terms of the trust, a matter quite distinct from the transaction for which there was a consideration.''
Compare
Archibald Howie Pty. Ltd. & Ors. v. Commr. of Stamp Duties (N.S.W.) (1948) 77 C.L.R. 143 at pp. 152-154 Dixon J. At p. 153 his Honour said:
``The shareholder contributes the amount of the share to the capital of the company. This contribution measures his right to any return of capital which the company may make either as a going concern or in a winding-up.''
In the present case, in the winding-up, upon the request of the shareholders for a transfer in specie of a surplus asset, a trust arose binding the liquidator to transfer the asset, and it arose because of the shareholders' right to share in a distribution of assets. The critical transfer in the present case was in consideration of the fact that the property transferred to the transferees was in a real sense their own as soon as the request was made, and the transfer was not made in consideration of any covenants implied under the Transfer of Land Act. The springing into existence of the statutory covenants did not, in my opinion, transform the transfer into a transfer on sale, although there was in the language of another distinct statute ``adequate consideration and money's-worth''. For these reasons I have concluded that the transfer was not the subject of stamp duty.
I now turn to the critical agreement, being document C.1, made under seal on 4 May 1979 between all the shareholders of the Company. What is agreed is that:
``all the said loans shall be and are hereby cancelled and (the shareholders) and each of them will acknowledge to the Company and to the Liquidator of the Company that the debts have been so cancelled and that they are not nor is any one of them entitled to payment thereof upon the liquidation of the Company.''
On each side during this appeal this agreement was at one time or another characterised as an agreement to give to the Company in the future a release. The Comptroller contended that it was therefore ``an instrument... whereby any property is agreed to be given in any manner whatsoever'' within the meaning of para. (1)
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of Heading IX to the Third Schedule to the Stamps Act, and thus dutiable by virtue of sec. 17(1) as a ``deed of gift''. The taxpayers resisted this contention. It was common ground that none of the exemptions in Heading IX applies to the case.The first contention of the taxpayers is that the relevant words of Heading IX apply only where the transaction agreed upon by the instrument is a transference of property (including any chose in action) from one person to another in such circumstances that the property transferred survives the transfer in the sense that it continues to exist. This is because, it is said, there cannot be a gift without such a transference and survival.
Secondly, the taxpayers contend that no instrument can constitute an agreement to give where the intended donee is not a party to the agreement and is unable to enforce the agreement.
I find it unnecessary to determine the correctness of either of these very far-reaching contentions because, in the end, I regard as correct the third alternative argument for the taxpayers which, I should add, was never put before the learned member of the Board from which these appeals are brought. A very compendious and therefore by no means precisely accurate summary of this third argument is as follows:
1. Just as a transaction requires an element of benefaction in order to constitute a gift under Heading IX, so the relevant transaction agreed requires an element of benefaction before the instrument whereby it is agreed can constitute an instrument whereby property is agreed to be given.
2. In the present case, because of the precise circumstances, including the facts that the shareholders' debts were in proportion to shareholding, that the agreement was between all the shareholders, they being all the parties who were owed the debts of the company not provided for by the liquidator's cash at bank, and the fact that the critical agreement was a mere step in a broader transaction, the acknowledgements to the company-in-liquidation which were promised by the agreement were not intended to and plainly could not result in any benefaction of the company-in-liquidation, but were intended to and could only result in changing the legal and equitable duties of the Company to its shareholders from a duty to perform one set of acts into a duty to perform another and different but precisely equivalent set of acts.
It is necessary to indicate the steps of the argument in more detail, and it is necessary to observe very closely what was promised, as distinct from stated, in the critical agreement.
In my opinion an element of benefaction is required in the transaction effected by an instrument before that instrument can be said to effect a gift. It follows that, before an instrument can constitute one whereby property is agreed to be given, the transaction which is by the instrument agreed to be effected must possess the element of benefaction towards the donee.
In this connection, as I have indicated, it is very important to construe the critical agreement with exactitude, so as to ascertain precisely what it is that is agreed to be done.
In the first place, the agreement is made ``as (scilicet since or because) the said loans are proportionate to the said shareholdings'', from which I deduce that the agreement would not have been made but for this fact that was also recited before the operating words began. Next, what is agreed between the shareholders may be divided into two divisions, a present division and a future division. As for the present, it is agreed that ``the said loans are hereby cancelled'' and that the shareholders ``are not nor is any one of them entitled to payment thereof upon the liquidation of the Company''. It is to be observed that these present provisions do not affect the Company: they are ``agreements'' inter partes as to what the legal situation is. By such provisions nothing is ``agreed to be given'' within the meaning of Heading IX or otherwise; rather the agreement is a present consensus as to the present legal position, the Company not being a party at all to the consensus.
What is agreed to be done in the future is as follows - first that the said loans shall be ``cancelled'' and, secondly, that the shareholders will acknowledge to the Company and its liquidator that the debts have been cancelled and, thirdly, that the shareholders will acknowledge to the Company and its liquidator that none of the shareholders is entitled to payment of the loan debts upon
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the liquidation of the Company. I emphasise first that it is in these promises for the future that any agreement to give must reside. Next, I emphasise that the two acknowledgements promised for the future are promised to be made not merely to the Company but to its liquidator.Accordingly, when the instrument is construed to see what it is that is agreed to be done in the future, a fair construction is that the shareholders agree to acknowledge to the Company and its liquidator that none of them has any claim to repayment of his loan. If all that appeared was that some shareholder-creditors of a company agreed amongst themselves to release the company from the debts owing to them, I can see powerful reasons for the conclusion that the instrument by which the agreement was made was caught by para. (1) of Heading IX as an agreement by which property is agreed to be given. But, as I have indicated, much more appears, and much from the instrument itself. What is, amongst the shareholder-creditors, promised to be done is to make an acknowledgement to the liquidator and to the company-in-liquidation.
But it is still not possible to decide whether the agreed acts will have any element of benefaction to a donee unless one goes, as it were, outside the agreement to see what is now and what will later be the legal position of the alleged donee, that is to say its position at the time of the agreement and its future position if the agreed acts were carried out.
As I have already indicated, the proper inference is that the liquidation was so far as is material complete at the commencement of 4 May 1979, except for the payment of the debts to the shareholders, which would have had to come out of the land, and the distribution of any balance of assets to the shareholders. The shareholders therefore had rights, equitable rights I would think, whether or not also statutory, to have the land sold, to have their debts paid out of the proceeds of sale, and to have any balance of proceeds left (after paying out the mortgage) paid over to them. On the other hand, if the acknowledgements promised in the critical agreement were to be made, the rights of the shareholders would be either to have the land sold and the remaining proceeds (after paying out the mortgage) paid to them or else pursuant to election, to have conveyed to them the land in specie, subject to the charge in favour of the mortgagee. The position of the shareholders would be the same, in the sense that they would have exchanged one set of rights for others which are precisely equivalent.
The position of the Company, the alleged donee, would likewise not be benefited in the sense required to constitute a benefaction. Before the acknowledgement it owed about $500,000 to the shareholders (which it would have to find out of the equity of redemption to the land) and it owed a duty to them to pass the balance of the equity by redemption (converted into money) to the shareholders. After the promised acknowledgement it would owe none of the $500,000 to the shareholders, but it would then owe a duty to pass the whole of the equity of redemption to the shareholders (upon election to take in specie) without any deduction of the $500,000 from it. The debts were owed proportionately to shareholding, and the equivalence is here with or without an election to take in specie.
I am, for these reasons, quite unable to be satisfied that there was any element of benefaction in the things agreed to be done by the critical agreement, and I am therefore not satisfied that the instrument in question was one whereby any property was agreed to be given.
Whether one looks at the alleged donors on the one hand or at the alleged donee on the other hand, one can say of each that before the promised acts his entitlement was to one set of rights and duties, and after the doing of the promised acts to another set of rights and duties, but each set being precisely equivalent and of precisely the same value as the other set, when beneficial interests and statutory rights are taken into account. What was ``payable'' by the company-in-liquidation to the shareholders in one form became ``payable'' by it to them in a different form, a consequence stemming from the fact that the debts owing to the shareholders were all pro rata. This analysis is in my view supported by such cases as
Collector of Imposts (Vic.) v. Cuming Campbell Investments Pty. Ltd. (1940) 63 C.L.R. 619 and
Archibald Howie Pty. Ltd. & Ors. v. Commr. of Stamp Duties (N.S.W.) (1948) 77 C.L.R. 143.
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In the former case, at p. 634, Latham C.J. spoke of the requirement of the concept of gift, that property be given ``by way of benefaction'' and at p. 642 Dixon J. spoke of benefaction being the ``intended effect'' of an assurance of property. In the latter case Dixon J., at pp. 152-153, analysed the transaction by which a company reduces capital by the payment off of any paid-up share capital ``or, what is in essence the same thing, the distribution of assets in specie in satisfaction of paid up share capital''. At p. 153 he said:``The truth is... that the return of 19s. 6d. of the amount paid up is the discharge protanto of a claim of the shareholder upon the assets of the company.''
And at p. 154:
``the shareholder in satisfaction of his proportionate `interest' in the assets, an interest consisting of a congeries of rights in personam, takes an aliquot part of the assets. There is an equivalence not only from a logical but a realistic point of view. The reduction in both the amount and value of the share affords an adequate consideration in money and money's-worth.''
In the present case, in all the circumstances subsisting on 4 May 1979, the carrying out in the future of the agreed acts of acknowledgement must inevitably have caused the creation of duties in the company in liquidation towards the shareholders which, in my opinion, were precisely equivalent in content to those it had towards the shareholders before the carrying out of the agreed acts of acknowledgement.
For the reasons which I have endeavoured to express, I have concluded that the transfer does not attract stamp duty under sec. 68(1) of the Act and that the agreement does not attract duty under Heading IX of the Third Schedule.
As I have said earlier in these reasons, I have not dealt with the careful and closely-reasoned and very helpful reasons of the member of the Board who gave the decisions appealed from, but I wish nevertheless to acknowledge again my indebtedness to them. The arguments for the taxpayer before me took a somewhat different course from the arguments before him, and any dealing by me with his reasons would make my own judgment quite inordinately long. However, in connection with the transfer and sec. 68(1) of the Act, I should perhaps mention one or two matters.
As to his para. 31, I think that sec. 68 of the Act makes it clear that the definition of ``conveyance'' is only for the purpose of clarifying the ambit of what is a conveyance on sale. The learned member said that the difficulty in the interpretation and application of sec. 68(1) ``seems to arise (if at all) from the reference in Heading VI in the Third Schedule to the amount or value of the consideration for the sale''. However, Div. 6 of the relevant Part of the Act itself is headed ``Conveyance or Transfer on sale of any Real Property or any Estate or Interest therein; Land Transfer; Exchange'', and in my opinion ``Land Transfer'', and ``Exchange'' are mentioned only in their statutory character of conveyance on sale - compare sec. 65(1).
The learned member was of the opinion that sec. 68(1) could be given a sensible and practical and effective operation only if the meaning he gave to it was adopted. I am respectfully unable to take this view of it. I think the concluding words of sec. 68(1) operate only when there is a conveyance which is on sale of land or an instrument which is otherwise dutiable under Div. 6, they do apply wherever there is a conveyance on sale of property subject to a mortgage or other security, and the subsection operates then to increase what a lawyer would, in the absence of the subsection, conclude was the consideration.
As to costs, I have considered the arguments put to me on each side and I think that, on the appeal concerning the transfer and sec. 68(1) of the Act, the successful appellants should have their costs both in this Court and before the Board. As to the appeal concerning the agreement and Heading IX, the successful respondents should have their costs in this Court but I should not disturb the position as to costs below.
In appeal, V.T.A. 26, concerning the agreement, the orders will be in accordance with the following minutes, subject to any submissions of counsel as to form:
1. Appeal dismissed.
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2. Order that the costs of the respondent of this appeal be taxed and when so taxed be paid by the Comptroller of Stamps.
In appeal V.T.A. 27, concerning the transfer and sec. 68(1), the orders will be in accordance with the following minutes, subject to any submissions of counsel as to form:
1. Appeal allowed.
2. Decision and orders of the Board wholly set aside.
3. Order that assessment in respect of Agreed Document No. 3 be reduced to a nil assessment.
4. Order that the costs of the appellants of their appeal to this Court, and of the proceedings before the Board, be taxed and paid by the Comptroller of Stamps.
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