Commonwealth v New South Wales [1918] HCA 44

Commonwealth v New South Wales [1918] HCA 44 - HCA 1918 case summary — Zoe

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with reference to the second ground that it appears to us that the ee execution of a transfer by the Commonwealth and its delivery to New Sours the transferee - say, of a Commonwealth lease - to complete the icine change of title, cannot of itself end whatever character it possesses {A}? ag an " instrumentality " so as to leave it taxable by the State before the Commonwealth purpose has been efiectuated, and consequently while it has been instrumental in effecting nothing. If the State can tax the transfer at that stage because it is not a Commonwealth instrumentality, the State may deny any validity or force whatever to the transfer without being open to the charge of interference with the Commonwealth Government, and so prevent the title ever teaching the transferee, a result seriously affecting the value of the Commonwealth transaction. That would open many avenues of ~ State action much wider than the hitherto decided cases have been thought to contemplate. It at all events presents a grave constitu- tional question which has not been argued, and which, as this case ean be dealt with on the first ground of decision in the earlier case, need not be determined now. The first ground of the earlier case, however, remains, and is not challenged. The learned Chief Justice in that case specifically refers to sec. 15 of the Stamp Duties Act 1898, providing that un- stamped instruments shall not be given in evidence, and to sec. 23, _ that they shall not be registered in any Court or office. His Honor, after referring to the contention that the Acts " did affect the Crown,"

quoted his own words in Roberts v. Ahern (1) as laying down the _ wider rule, which is not limited to burdens of a pecuniary character, in these terms : "' The modern sense of the rule, at any rate, is that _ the Executive Government of the State is not bound by Statute unless that intention is apparent." " Applying this rule," says his _ Honor, he comes to the conclusion that the Act imposed no obliga- 5 tion on the Commonwealth. In other words, the case decides that

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otherwise possesses. To reiterate, for the sake of emphasis: sec. 23 of the Stamps Act 1898 cannot be used to prevent the Commonwealth - registering a transfer which apart from the provisions of the Stamp Duties Acts it has the right to register. In order to clear the ground, we at once state that if the registra- tion by the Commonwealth were to be regarded in fact and in law a registration by the transferees, who are subjects, sec. 23 would of course apply to them, and the refusal of the Registrar-General to register without the stamping would be justified. But as that position is not accepted, and the registration is taken as a registration by and on behalf of the Commonwealth itself, we are distinctly of opinion that, unless the first ground of the former decision is wrong, the Commonwealth should succeed in this case. It cannot be disputed by either party that the Commonwealth has a legal right to register the transfer. That is common ground. , If not authorized by the Real Property Act the registration is void, and the transferees have no title. To deny that right would affect not the dutiability of the transfer, but the validity of the registration altogether. If, however, the Act authorizes a transferor to register - a transfer (and it would be strange if at least in some cases it did not) we turn to that Act to see what its prohibitions are. Sec. 39 says: " The Registrar-General shall not register any instrument purporting to transfer or otherwise to deal with or affect any estate or interest in land under the provisions of this Act, except in the manner herein provided, nor unless such instrument be in accordance with the - provisions hereof." The Crown, of course, is bound by that. If it seeks to obtain the registration provided by the Statute, it must take it on terms of the Act which it invokes. But apart from the Stamp Duties Act there is nothing else which can operate as a bar to the Commonwealth's right to register its transfer, and complete the divestiture of title, which may in easily conceivable cases be extremely important to the Commonwealth. But what provision in the Stamp Duties Act entitles the Registrar-General to refuse? Only sec. 23 ; which was specifically referred to by the Chief Justice _ in the earlier case, and was by his judgment included in common with the rest of the Act as not binding on the Commonwealth. -

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The sequitur is difficult to appreciate. But is the primary proposi- tion itself sound? Let us test it by its consequences. Sec. 17 does not say in so many words that the transferee is the proper person . to put the stamp on the instrument when executed. If it did, the law would not be complied with if anyone else put on the stamp. That would be an unauthorized and insufficient attempt to comply with the law, on the assumption made. No man's legal obligation can be performed by another, unless as agent of the first. Sec. 17 imposes a new and different obligation on the transferee, arising at a different time, and not commensurate with the amount of stamp duty. It does not arise for two months after the New South Wales territorial jurisdiction attaches, and the amount is limited to a maximum of £25, whatever the amount of duty may be; and if he is fined the instrument still remains unstamped, and the question we are considering still remains for consideration. No doubt the penalty is to some extent a collateral but.limited security that the document will be stamped within the time mentioned, but it does not afiect the nature of the original enactment. The particular line in the Schedule is this: '' Memorandum of transfer under Real Property Act . . . The transferee." Suppose the transfer is of a lease with onerous covenants, or of any instrument referred to in sec. 51 of the Real Property Act. Canit be that the Stamp Duties Act contemplates that it is only the transferee who is competent to affix the stamp? Or does it not mean that the instrument itself is declared dutiable irrespective of the persons interested, and that certain sections are collaterally enacted to secure that end? For instance, in the case of an instrument within sec. 51 above referred to, sec. 23 of the Stamp Duties Act is in ordinary cases a sufficient safeguard, But if the Crown is not bound by sec. 23, the section is no bar in that case. Take another line in the Schedule to the Act of 1904, viz.: "Lease . . . The lessee." Does it mean that the lessee only is the person taxed? If it does, and if it is sound law that the Commonwealth as trans- feror, as contradistinguished from transferee, is unable to register its transfer without paying the duty, then this consequence must follow. Under sec. 63 of the Federal Lands Acquisition Act it has power (inter alia) to lease land. It decides (say) to lease land at a

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had, as usual, to bear the cost of registration, including stamp duty, there is no such burden imposed by the Act on the Commonwealth, : 'no such increase of expenditure, no such interference with the opera- tions of the Commonwealth in the fulfilment of its public purposes. 'The burden is on the transferees, on subjects; and, but for the special arrangement as to costs, the Commonwealth does not bear the burden. Mr. Knox admits that the Commonwealth cannot, by agreement to pay the costs of transfer, make the transfer immune from duty if otherwise it would be subject to duty. So far as the operation of the State Act is concerned, the duty falls, in ordinary "conveyancing practice, on the transferees. _ It may be said, of course, that a burden even on the transferees in the way of stamp duty may reduce the purchase money or other ~ consideration which transferees may be willing to give to the Com- monwealth; that if in this case the burden is only £1, the State _ Parliament may increase the duty to £10,000 ; and that there cannot be any line drawn discriminating according to the weight of the interference. But in no case yet has the principle of D'Emden v. Pedder (1) been applied to interference of a character so indirect and _ Temote as this. In D'Emden v. Pedder the interference was direct. The Commonwealth, without seeking the aid of the State law at all, wanted a receipt from its servant for its purposes of audit, and the State law said - or was treated by the State officials as saying

- You must put 1d. stamp on that receipt." The case of Heiner v. Scott (2) shows that the principle of D'Emden v. Pedder is not to be applied to all indirect and remote interferences. It was there held that the Stamp Act 1894 of Queensland, in imposing a stamp duty of Id. on every cheque, and in imposing a penalty on any person _ who issues a cheque unstamped, was enforceable against a customer
of the Commonwealth Bank who drew a cheque on his current account. As my brother Barton put it then, the tax fell, not on _ the Bank's operations, but on the operations of the customer. Yet : indirectly, of course, the Commonwealth Bank's operations may be _ affected, to a greater or less extent according to the amount of the ; duty, by stamp duty on the cheque drawn on its accounts. In the

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Judgment (188 paragraphs)