Hooper and Harrison (Qld) Limited v Commissioner of Stamp Duties (Qld) [1924] HCA 25

upon the sale thereof, is transferred to or vested in a purchaser or person on his behalf or by his direction," &e.

'A company having for the purpose of reconstruction gone into li and a new company having been incorporated in Queensland, an was entered into between the old company and its liquidator and company, whereby it was agreed (1) that the old company should sell. new company should purchase the merchandise of the old company in conn with its business for £54,121 10s. ; (2) that the old company should £6,484 10s. to the new company; and (3) that in payment and sat of the sum mentioned in clause 1 and in consideration of the sum in clause 2 every member of the old company should, in respect of shares therein held by him, be entitled as of right to claim six sh new company with £1 credited as paid up on each share, and the new should allot the shares so claimed.

Held, that clause 1 of the agreement was a " conveyance on sale" within the ambit of sec. 49, and that the transaction evidenced by clauses 2 and 3 was distinct from that evidenced by clause 1.

Commissioners of Stamps v. Queensland Meat Export Co., (1917) A.C. 624, distinguished.

Decision of the Supreme Court of Queensland (Full Court): Hooper d& Harrison (Queensland) Ltd. v. Commissioner of Stamp Duties, (1924) 8.R. (Q.) 102, affirmed.

By a case stated for the opinion of the Full Court of the Supreme Court of Queensland, under sec. 24 of the Stamps Acts 1894-1918 (Q.), the facts were set out by the Commissioner of Stamp Duties (Q.) substantially as follows : -

Prior to the date of the instruments hereinafter mentioned Hooper & Harrison Ltd. (hereinafter called "the old company"), a company duly incorporated in the State of New South Wales and carrying on business in Queensland, was the owner of property and interests in Queensland, including, among other things, realty, chattels real and the business of soft goods warehousemen and the goodwill thereof, choses in action, goods, wares and merchandise,

By a special resolution of the old company, duly passed on 18th May 1920 and duly confirmed on 2nd June 1920, it was resolved (1) that it is desirable to reconstruct the company, and

accordingly that the company be wound up voluntarily and that

• Harold Wilson Anderson be and he is hereby appointed liquidator

for the purpose of such winding up; (2) that the said liquidator

be and he is hereby authorized to consent to the registration in

New South Wales of a new company to be named " Hooper & Harrison Ltd." and of a new company in Queensland to be named "Hooper & Harrison (Queensland) Ltd.," with respective memorandums and articles of association which have already been prepared with the privity and approval of the directors of the present company ; (3) that the draft agreements submitted to this meeting, and made respectively between this company and its liquidator of the one part and Hooper & Harrison Ltd. (new company) of the other part and this company and its liquidator of the one part

and Hooper & Harrison (Queensland) Ltd. of the other part, be and

1924,

Hoorer & Harrison (QueEns- LAND) Lrp, v. Comans- SIONER OF STAMP Dutres

the same are hereby approved, and that the said liquidator be and he is hereby authorized under sec. 261 of the Companies Act 1899 (N.S.W.) to enter into the agreements with such new companies when incorporated in the terms of the said drafts and to carry the same into effect, subject to any modifications which he may think expedient. 4

On 30th June 1920 Hooper & Harrison (Queensland) Ltd, (hereinafter called "the new company") was registered and incorporated under the provisions of the Companies Acts 1863-1913. (Q.) in pursuance of the resolution aforesaid.

In pursuance of the said resolution and of clause 3 of the memorandum of association and clause 3 of the articles of association two instruments dated 9th July 1920, and made between the old company and its liquidator of the one part and the new compan of the other part, were executed. (Copies of the said instruments are hereto annexed and marked C and D respectively.)

The instrument whereof a copy marked C is annexed hereto was presented to the Commissioner of Stamp Duties for the purp of having the duty chargeable in respect thereof duly asse The said Commissioner assessed the duty on the instrument at th rate prescribed by the Stamp Acts 1894-1918 (Q.) to be chargeable on a conveyance or transfer on sale of any property, and such dut amounted to the sum of £406 10s. :

The new company is dissatisfied with the assessment of duty made with respect to the last-mentioned instrument, and contends that the said instrument only attracts the duty of 10s. as agreement under seal.

The instrument whereof a copy is hereto annexed and mark D was also presented to the Commissioner of Stamp Duties for purpose of having the duty chargeable in respect thereof dul assessed. The said Commissioner assessed such duty at £129 and the new company does not dispute such assessment.

The questions submitted for the decision of the Court are 4 follows : -

(1) Is the instrument mentioned in par. 5 hereof charg with duty in accordance with the assessment of the Commissioner ?

(2) If not, with what amount of duty is the said instrument H. ©. or A. chargeable ? Saha

(3) How should the costs of this case be borne and paid ? Hooper &

By the instrument marked C it was agreed (inter alia) as follows : - AN ell "(1) The old company with its liquidator shall sell and the new company shall purchase as on 30th June 1919 all the merchandise bs ak of the old company in connection with its said business for the sum - Dutres of £54,121 10s. (2) The old company and its liquidator shall also & pay to the new company the sum of £6,484 10s. (3) In payment and satisfaction of the said consideration of £54,121 10s. and in consideration of the payment provided by clause 2 hereof of the said sum of £6,484 10s. every member of the old company shall in respect of every ten ordinary shares therein held by him be entitled as of

right to claim an allotment to himself or herself or to his or her

nominee or nominees of six ordinary shares in the capital of the new company with the sum of one pound credited as having been paid up on each of such shares and the new company shall allot the shares so claimed."

By the instrument marked D it was agreed that the old company and its liquidator should transfer and the new company should take over, as from 13th June 1919, for the price of £6,206 10s. 8d. (inter alia) the goodwill of the business theretofore carried on by the old company in Queensland, and the unexpired residue of leases held by the old company in connection with that business ; that " the old company and its liquidator shall sell and the new company shall purchase as on 30th June 1919" certain land and buildings and certain plant, machinery and office furniture ; and that (clause 6): " The old company and its liquidator shall as soon as conveniently may be execute and do at the expense of the new company all such assurances and things as shall be reasonably required by the new company for vesting in it the said property hereby agreed to be transferred or any part thereof and giving to it the full benefit of this agreement."

The Supreme Court of Queensland decided that the instrument was chargeable with duty as a conveyance on sale: Hooper & Harrison (Queensland) Ltd. v. Commissioner of Stamp Duties (1).

From that decision Hooper & Harrison (Queensland) Ltd. appealed to the High Court.

Real, for the appellant. The two instruments by which the scheme of reconstruction was effected must be regarded separateh for the purpose of assessing stamp duty. The accomplishment of the reconstruction may have been effected by any number of instruments, and each instrument must be singly examined to ascertain whether it attracts stamp duty: it is the instrument itse which attracts stamp duty (Hamwood v. Commissioners of Star (1) ). [He referred to the Stamp Acts 1894-1918, (Q.), secs. 4, 49, 54.) No property was transferred by this instrument ; property in the merchandise passed only when the scheme reconstruction was completed (Commissioners of Stamps v. Que land Meat Export Co. (2) ). The Supreme Court overlooked fact that the agreement, although made on 6th July 1920, related c a sale "as on 30th June 1919." On a proper construction the agreement is not a conveyance on sale (Sale of Goods Act of 1896 (Q.) (60 Vict. No. 6), sees. 21, 22; Measures Bros. Ltd. v. Commissioner of Inland Revenue (3); Alpe on Stamp Duties, 15th ed., p. 103) and attracts stamp duty at 10s. only as a "conveyance or transfer of any kind not hereinbefore described " (First Schedule Even if the instrument was effective as a contract or agreement fo sale, it is not chargeable with duty as a conveyance on sale; for it dealt solely with a sale of goods, wares or merchandise (see. s

construction of the agreement the property in the merchandis immediately passed to the new company. The two agreements separate and distinct ; the parties created them as independent documents. Considering the agreement by itself, it is taxabl under sec. 49 of the Stamp Acts 1894-1918 as a conveyance on But if the agreements could be read together as forming part

one larger transaction - namely, the transfer of all the assets of h

(1) (1900) 10 Q.L.J. 57, at p. 58. (2) (1917) A.C. 624. - (3) (1900) 82 L.T. 689.

E

• old to the new company - the instrument would be chargeable with

the same ad valorem duty as if it were an actual conveyance on sale under sec. 54 (1) () (ii); for in that case it would not be an agreement for a sale solely of goods and merchandise, because it would be inextricably associated with other transactions, e.g., the allotment of shares of the new company. The amendment of sec. 54 made in 1918 by sec. 54 (1) (b) (ii.) has nullified the authority of Commissioners of Stamps v. Queensland Meat Export Co. (1).

Tue Courr delivered the following written judgment : -

__ A limited company formed in New South Wales and called Hooper & Harrison Ltd., the present appellant, was carrying on business as merchants and warehousemen in Queensland, and was there the owner of real and personal property, including merchandise. On 18th May 1920 the company by special resolution, confirmed on 2nd June 1920, resolved to reconstruct and to wind up. Two new companies were formed - one in New South Wales and called "Hooper & Harrison Ltd.,"" and the other in Queensland and called "* Hooper & Harrison (Queensland) Ltd." The liquidator of the old company was, by the resolutions mentioned, authorized to enter into the agreement the subject of this appeal.

In July 1920 the liquidator in the name of the old company

• made an agreement with the new Queensland company, whereby, after reciting the resolutions and the incorporation of the new

~ Queensland company, and that by the articles of association of the

_ new company it was provided that that company should " forthwith enter into the agreements," it was agreed : - [Clauses 1, 2 and 3 of the agreement marked C were here set out.]

If the provisions of clause 1 bring the instrument within sec. 49 of the Stamp Acts 1894-1918, the agreement is admittedly dutiable asa" conveyance on sale." Sec. 49 is as follows : " For the purposes of this Act the expression 'conveyance on sale' includes every instrument . . . whereby any property, or any estate or interest in any property, upon the sale thereof, is transferred to or vested in

Hoorer & Harrison (QUEENS- LAND) Lrp. v. Comais- SIONER OF Sramp Durtes (Q.).

Hoorer & HARRISON (QueENs- LAND) Lp. v. Comms- SIONER OF Stamp Dourres

a purchaser or any other person on his behalf or by his direction,' There are provisoes, which are irrelevant to this case. The ef of the three clauses of the agreement above quoted is as follows Clause 1 is a sale to the new company of merchandise, already in existence and conventionally still in existence, belonging to the company, for the fixed price of £54,121 10s. That is complete in itself; and if nothing more were said, there would be a debt of amount payable in cash, concurrently with delivery. But the two succeeding clauses provide that the price is not to be paid in cash, A further sum of £6,484 10s. is to be handed by the old company to the new company, and that sum and the sum of £54,121 10s, owing by the new company are together to be applied by the new company to paying £1 per share on certain shares in that company, to which, not the old company, but its members are to be entitled as of right to claim. The two transactions are distinct. The immediate importance of the second or share transaction is to show that, as the shares are obviously to be issued at once and must be paid for at once, the sum of £54,121 10s. must necessarily be at once applicable, and, therefore, an instant debt. But that would be impossible unless the proprietary interest in the merchandise - were instantly transferred to the new company. This isin accordance with what we understand to be the ordinary normal meaning of the first clause. That clause, then, both from its primary meaning and from its context, is one which brings the instrument within the ambit of sec. 49 as a ' say that, when that agreement is read with a contemporaneous agreement of sale of freehold land, leases, goodwill, trade marks, &e., it should be construed as other than a "conveyance on sale." But there are formidable objections to this argument. 'The agreements are in fact distinct and independent. The parties have

physically severed them. They do not incorporate each other. The second agreement, by clause 6, expressly contemplates future acts of vesting, while the agreement under consideration contains n0 such provision.

The case of Commissioners of Stamps v. Queensland Meat Export (1) was one where two features appeared, both of which are al

from the agreement we are dealing with. Those features were : H.C. oF A.

(1) it contained expressions of future vesting, as "shall transfer " onc

• ~

t and "shall take over'; (2) those expressions were applied to Hoorer &

land, shares, &c., which it was obviously contemplated required tqnaie,

future formal acts of assurance. sie : The appeal 'should be dismissed with costs. Comms-

' ""Qraa E Appeal dismissed. Appellant to pay costs of Duties appeal. ce

Solicitors for the appellant, Feez, Ruthning & Baynes. Solicitors for the respondent, H. J. H. Henchman, Crown Solicitor

for Queensland. 7 J. L. W. [HIGH COURT OF AUSTRALIA.} LAFFER Rae ea eer Lt rer ee APPELLANT ; PLAINTIFF,

MINISTER FOR JUSTICE (WESTERN |). AUSTRALIA) | ESPONDENT.

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA.

Public Service (W.A.) - Superannuation - Staff of Education Department - Qualifica- yy © op A. , tion for superannuation allowance - Reference to Public Service Board - Decision gg. , in favor of claimant - Claim for superannuation allowance - Refusal to grant - Discretion of Crown - Superannuation Act 1871 (W.A.) (35 Vict. No.7), secs.1, - Penrn, 12 - Public Service Act 1904 (W.A.) (No. 41 of 1904), secs. 5,83 - Public Service sept. 9, 13.

Appeal Board Act 1920 (W.A.) (No. 14 of 1920), secs. 6, 10, 18. = it ACJ., Sec, 83 of the Public Service Act 1904 (W.A.) enacts that "the provisions of Gavan Duly

the Superannuation Act shall not apply to any person appointed to the Public hi Service after the commencement of this Act."