The inter-relationship of the various expressions in the 1791 Act was considered in a number of the English cases. In Williams v Gerry [1842] EngR 748; [1842] 10 M & W 296 at 307, Rolfe B said of the section:

"Coupling the first branch with the last in that sentence, we must understand it to mean that it is not to be given in evidence to make it available in any court of law or equity. There may be collateral circumstances under which an unstamped instrument may be given in evidence ...".

In Smart v Nokes [1844] EngR 89; [1844] 6 Man & G 911 at 915, Tindall CJ said:

"The prohibition, therefore, in its direct terms, applies only to cases where such a bill is pleaded or given in evidence as a good, useful or available bill".

Similarly, in that case, Erskine J said that although the first part of the section, which said that no bill "shall be pleaded or given in evidence in any court" would appear to be imperative, looking at the section as a whole "I think it quite clear that the object of the legislature was to prevent such a document from being given in evidence with a view of setting it up as a binding and obligatory contract ...".

In Dent v Moore (1919) 26 CLR 316 at 327-8, the High Court appears to have accepted the "collateral purpose" exception. It was said in that case to be an established principle, in relation to the English Stamp Acts prior to 1891, that an unstamped instrument "could not be given in evidence to prove any issue, if the fact to be proved by production of the instrument were a fact giving it its taxable character, even although the purpose of proof were indirect and collateral to the direct purpose of the instrument; but if the fact proved by the instrument were one which, even if it were stamped, would be foreign to its taxable character, the document could be used for that purpose."

In view of the long history of interpretation of the 1791 and later Acts upon which the West Australian s27 is modelled, this would appear to be an appropriate case in which to apply the principle that when a particular form of words has received authoritative interpretation, whether by judicial decision or by course of practice, and is adopted in the framing of a later statute, the words adopted should be understood to have been intended by the legislature to bear the meaning which has been earlier put upon them: Re Alcan Australia Ltd; ex parte Federation of Industrial Manufacturing and Engineering Employees [1994] HCA 34; (1994) 181 CLR 96 at 106.

Applying the collateral purpose test as enunciated by the High Court, it is necessary to ascertain whether this pleading makes assertions in respect of the "taxable character" of the deed. Essentially, the purpose of the pleading is to establish that the deed is not what it purports on its face to be but that by reason of the surrounding circumstances pleaded, the monies which the deed says are due and payable are not payable and that the consideration to which it refers did not exist. To use the words of the statute, the point of the pleading is to establish that the instrument is not "good, useful or available".

This view in respect of a voidable instrument is, I think, consistent with some of the earlier cases preceding the 1921 Act and in the light of which it is appropriate to read that Act. In particular, in Holmes v Sixsmith, (1852) 15 Ex 802, the plaintiff sued to recover a sum deposited with the defendant as stakeholder pursuant to an agreement between the plaintiff and another in respect of a race between the plaintiff's horse and a third party's horse, which agreement was embodied in writing. It was later discovered that the third party's horse was not what it was represented to be. Pollock CB noted that the agreement, "as far as the instrument is concerned is ... legal; and the only ground for impeaching it is, that the plaintiff became party to it by means of a gross fraud". Nevertheless, he held the agreement did not require a stamp unless used "as and for an agreement." Similarly, Alderson B took the view that the agreement was admissible without stamping, since "the document is not set up as a valid instrument, but its validity is destroyed by proof, either that it is illegal on the face of it, or that it is void by reason of fraud." It appears to have been the case, however, that the agreement was not truly void, but rather was voidable at the option of the plaintiff, and some recognition of this appears both in argument and in the judgments. That case was decided in part in reliance on R v Gompertz [1846] 8 QB 824, which was a criminal case upon an indictment for conspiracy. The precise facts of Gompertz are not relevant, but it should be noted that Lord Denman CJ said that in his understanding of the rule, "... if there be any allegation to the proof of which an instrument available in law is necessary, or if it be tendered as such instrument, ... then it cannot be received unstamped." There does not appear to be any point in this defence and counterclaim at which it is necessary to plead the deed as an instrument "available in law".

The applicants' argument that such a construction of s27 is consistent with the scheme of the Act, since invalid instruments are not chargeable with stamp duty, is not, I think, a useful one. It appears to be the case that a document which has no legal effect for any purpose whatever will not be chargeable: Bell Resources v ACT Revenue Coll (1990) 22 FCR 178 at 181, Jenkinson J. However, the position in relation to voidable instruments appears to be different. In Nichols Cabramatta Wholesale Stationery Supplies Pty Ltd v Commissioner of Stamp Duties (1993) 93 ATC 4637, Sully J took the view that, as stamp duty is charged upon instruments and not upon the transactions which they represent, an instrument would be dutiable notwithstanding that one or the other of the parties might be able at a future time to have some form of relief based upon, inter alia, common mistake. He noted the scheme of the Act allowed for refund of duty if the instrument had failed in its intended operation. Similarly, with respect to the West Australian Act, it may well be that a voidable instrument is dutiable, with the duty able to be refunded if the conditions set out in s15A are satisfied.

However, although the matter was not considered in detail, there is a suggestion in Peddie v Stein, (unreported SCt of NSW Young J 26 March 1987) to the effect that the court may look at an unstamped document, "for the purpose of seeing what it was it was being asked to set aside, because if the document was invalid because of undue influence or otherwise, it was quite idle to have it stamped and then to get a refund" (referring to Mason v Motor Traction Co Ltd [1905] 1 Ch 419). As a practical matter, one can see the force in that reasoning. The "scheme of the Act", then, does not appear to me to compel a conclusion one way or the other in this case.

In my view, the balance of authority suggests that where a party refers to a document in a pleading, not in order to set it up as valid and effectual for any purpose, but only in order to have it wholly set aside, then the document may be referred to for that purpose notwithstanding that it is not stamped. This defence and counterclaim falls within that category.

The proper construction of s27(1) of the Stamp Act in circumstances of this kind appears to me to raise an important and difficult question of principle. The injustice which would flow to the applicants if their defence and counterclaim has been wrongly struck-out is obvious. For those reasons, it is appropriate to grant leave to appeal from the decision of the master striking out the defence and counterclaim, and to allow that appeal.