Trust Company of Australia Limited v Commissioner of Stamp Duties B67/2001 [2002] HCATrans 338 (26 June 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B67 of 2001

B e t w e e n -

TRUST COMPANY OF AUSTRALIA LIMITED

Applicant

and

COMMISSIONER OF STAMP DUTIES

Respondent

Application for special leave to appeal

GAUDRON J

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 26 JUNE 2002, AT 10.03 AM

Copyright in the High Court of Australia

MR D.G. RUSSELL, QC: If the Court please, I appear with my learned friend, MR M.L. ROBERTSON, for the applicant. (instructed by Creagh Weightman Lawyers)

MR S.L. DOYLE, SC: May it please your Honours, I appear with MR D. MARKS for the respondent. (instructed by Crown Law Division, Department of Justice)

GAUDRON J: Yes, Mr Russell.

MR RUSSELL: If the Court please, special leave is sought to appeal against a decision of the Queensland Court of Appeal, sitting at first instances as it does under the case stated procedure, effectively imposing double duty on the one transaction, constituted by an agreement for the purchase of property followed by a conveyance in accordance with the agreement. That that is so appears from - it was explicitly recognised by the court. The learned President of the Court of Appeal said:

I am conscious that the appellant entered into the contract of sale in this form in order to comply with the requirements of its dealer's licence to operate managed investment schemes under the Corporations Law.

This is at page 152 of the application book, your Honour.

GAUDRON J: You have to say, do you not, Mr Russell, that the custodian was named as the purchaser in the agreement.

MR RUSSELL: Was the purchaser for the purposes of section 54(6), yes, your Honour.

GAUDRON J: Yes. Was the purchaser named in the agreement.

MR RUSSELL: Yes, within the meaning of section 54(6). We say that that, as a matter of proper construction, is the approach that should be taken to section 54(6).

GAUDRON J: What meaning do you give to the word "purchaser"? The person entitled to call for a conveyance?

MR RUSSELL: Yes, your Honour. We say that that is clear from the context of the legislation.

GAUDRON J: The person who, by the contract, is entitled to call for a conveyance.

MR RUSSELL: Yes.

GAUDRON J: Now, does that distinguish such a person from a nominee, not named in the contract?

MR RUSSELL: Yes, in our respect - - -

GAUDRON J: Or a directed purchaser?

MR RUSSELL: Yes, your Honour, in our respectful submission. So that was the very issue that was considered in the case of Vickery v Woods, which is on our list. We would say that this is not a situation of a nominee, although the court wrongly treated it as being so - or, at least, Justice of Appeal Thomas treated it as being so.

GAUDRON J: Now, I am right in thinking, am I not, Mr Russell, that only the custodian was entitled to call for a conveyance under this contract?

MR RUSSELL: That is correct.

GAUDRON J: He - it - would have been entitled to specific performance?

MR RUSSELL: In our respectful submission, yes.

GAUDRON J: Any action, though, would have had to have - - -

MR RUSSELL: The support of Cromwell - - -

GAUDRON J: Cromwell, as the party - - -

MR RUSSELL: Cromwell was the responsible entity, so under the custodian agreement there are provisions which say that the custodian will act in accordance with the directions of the responsible entity. So presumably, it would have been open to Cromwell to direct the applicant here not to sue, subject to - - -

GUMMOW J: That would be by reason of some collateral contract between themselves, would it?

MR RUSSELL: There was a collateral contract between themselves, your Honour. It was called the custodianship agreement, and it is in the material.

GUMMOW J: But that is not part of the contract for sale, is it?

MR RUSSELL: No, your Honour.

GUMMOW J: Now, this section, the text of which is at 156, how do you say it works on these facts, of this contract?

MR RUSSELL: If one first goes to section 54(1), it is plain that it is imposed in any circumstance where a person becomes entitled to the conveyance of property. So there is nothing in section 54(1) which in terms says that - if our learned friends are right - that, in the ordinary sense, a purchaser must be the person who pays the purchase price. There is nothing in section 54(1) which limits its operation in that way. We say that section 54(6) has a congruent operation, because it starts with the words:

Where duty has been duly paid in conformity with the foregoing provisions -

very plainly, a duty that had been paid, in this case -

the conveyance or transfer or conveyances or transfers made to the purchaser -

and those are the critical words for the purposes of this dispute -

shall upon production of the contract or agreement or contract or agreements, duly stamped not be chargeable with any duty - - -

GUMMOW J: You say, looking at subsection (6), transfer made to the purchaser gets its content from 54(1), that is to say, to the person who is entitled, under the contract, to take the conveyance.

MR RUSSELL: Yes, your Honour. The alternative approach would be that section 54(6) is denied operation in a wide range of circumstances.

GUMMOW J: By (6A).

GAUDRON J: But you do have to come to grips with (6A), do you not, Mr Russell? You cannot just ignore it.

MR RUSSELL: With (6A), your Honour?

GAUDRON J: You do have to go so far as to say that the custodian - - -

MR RUSSELL: Yes, is the person - - -

GAUDRON J: - - - is, "the person named as purchaser".

MR RUSSELL: Yes. Well, put another way, your Honour, yes, this is not a conveyance "made to a person other than the person named as purchaser". Section 54(6A) was put there to deal with subsales. There is no dispute about its legislative history, as I understand it, and there is absolutely no element a subsale involved here.

GAUDRON J: So, do you any longer pursue an agency argument for the second half, as it were, of section 54(6A), or is that - - -

MR RUSSELL: We could not argue that that is a matter that warrants the grant of special leave, your Honour, but if special leave were granted, it is certainly our contention that the custodianship agreement placed Trust Company of Australia Limited in the situation where it had a responsibility to act in accordance with the directions of Cromwell Property, and that agent - one has to read subsection (6A) again in context. It is there to stop subsales. Where you have somebody acting in accordance with an agreed plan, whereby, under the custodianship, Trust Company of Australia Limited would acquire and hold the property for the purposes of the managed investment scheme, then, in our respectful submission, agent - that is agency, for the purposes of subsection (6A).

GUMMOW J: It is said against you that this situation has been cured by legislation.

MR RUSSELL: Yes, it has, your Honour.

GUMMOW J: Of which you do not get the benefit, because it is not with respect to it.

MR RUSSELL: That is right. Indeed, it has been cured in two respects, your Honour. Our learned friends' outline makes this point in paragraph 10 of their response, which is on page 171 of the application book. There are two issues. Our learned friends say section 54(6) is "idiosyncratic Queensland legislation". It is, in the sense that the Stamp Acts throughout the nation are now being repealed. Section 54(6) did in fact have a counterpart - in Victoria, the issue does not arise, and in South Australia, because in Victoria and South Australia stamp duty is imposed on transfers only, and not on agreements. In New South Wales, it arises - - -

GUMMOW J: Section 40 used to - - -

MR RUSSELL: Section 41(4) - - -

GUMMOW J: Section 41.

MR RUSSELL: - - - of the New South Wales Act contained a similar exemption, but it did not use the words "to the purchaser". It was effectively our 54(6) without the addition of the words "to the purchaser", so that Vickery v Woods was a case in which the question was whether there was a transfer in accordance with the contract. In fact, there was another issue in Vickery v Woods, so the Court did not have to apply section 41(4). Not only has the matter been addressed by the Revenue Laws Amendment Act, which amended the problem for managed investment schemes under the old Stamp Act, but the new Queensland Duties Act, which our learned friends foreshadow in their outline, is now part of the law. If I could hand up to the Court section 22 of that Act, subsection (2) of which reads:

If transfer duty is imposed on a dutiable transaction that is an agreement for the transfer of dutiable property is paid, no transfer duty is imposed on the transfer of the property to the transferee under the agreement.

That is section 22(2), your Honours.

GAUDRON J: Yes, now, what you have to come to terms with, I think, Mr Russell, is why, the Act having been amended, we should not just say, "Well, that is your client's bad luck".

MR RUSSELL: Yes, indeed. We appreciate that. The basis on which we put it, your Honour, is this, that the Duties Act - as, indeed, was the Revenue Laws Amendment Act - as, indeed, is a literal avalanche of taxation legislation, some of which was before your Honours last week - there is now a huge range of new legislation, and the issue is whether courts, in applying that are to keep in mind the fundamental principle against double taxation.

GAUDRON J: I do not think there is a question of fundamental principle against double taxation. It is just the meaning of the word "purchaser" in context.

MR RUSSELL: Well, yes, but we would say that the context is one of a provision that is intended to prevent double taxation, and the court has simply ignored - - -

GAUDRON J: No, it is not. Is it? It is a context in which, really, it was to prevent only one taxation on, in substance, two transactions. That was the original - that of 54(1)(6A), at least.

MR RUSSELL: I am sorry, your Honour. Section 54(6), we would submit - - -

GAUDRON J: Section 54(1) was directed to - - -

MR RUSSELL: Section 54(1) was to bring forward a taxing point.

GAUDRON J: Yes. I see your argument. Yes, I am sorry.

MR RUSSELL: So that you stamp agreements and exempt the conveyances. As I have said, in Victoria and, I think, South Australia, conveyances only are stamped. New South Wales and Queensland followed the approach of stamping the agreement and giving an exemption to the subsequent conveyance.

GAUDRON J: Is there anything in the dictionaries, anything in the decided cases, on the meaning of the word "purchaser"? It is an ordinary word, is it not?

MR RUSSELL: There is an extract of a judgment from Sir Owen Dixon, which is actually in our list of cases. It is in Vickery v Woods.

GUMMOW J: Yes, it is in Vickery v Woods.

MR RUSSELL: At page 343 - - -

GUMMOW J: Yes, that is it. It is 85 CLR.

MR RUSSELL: It is Vickery v Woods [1952] HCA 7; (1951) 85 CLR 336. The extract to which I will take your Honours is at page 343. Page 336, the case starts. This, admittedly, is commenting on the interpretation of a contract, rather than a statute, and it was a question of whether the term "purchaser", used in a contract between inter partes applied - - -

GAUDRON J: It was a two-party agreement?

MR RUSSELL: A two party agreement, under which property was to be conveyed to a company to be formed. His Honour said - he having gone through the other terms in the contract:

They serve to indicate that the company is the intended transferee of the land and I am disposed to think that as a consequence the expression "purchaser", in the provision relating to the vendors' obligation to procure registrable transfers, should be interpreted as covering the company, on its coming into existence.

GUMMOW J: Your case is a stronger one.

MR RUSSELL: We would say so, yes, your Honour, because it is not something to be formed, it is a named party that is actually bound by the contract. We would put our special leave case this way. It was certainly open to the court, particularly having regard to the extract to which I have just referred, to regard the term "purchaser" as comprehending an intended transferee named in the contract. There is no doubt that there is a principle against double taxation, except where that is clearly required by the legislation, and our learned friends do not dispute that. This Court has said, perhaps most recently in CIC Insurance Ltd v Bankstown Football Club, that context has to be looked at in the interpretation of legislation. We would refer particularly to the conclusion of a paragraph that your Honours are probably sick of hearing - - -

GAUDRON J: I think, at this stage, we probably do not need to hear you further, Mr Russell. We will hear from Mr Doyle.

MR RUSSELL: Certainly, your Honours.

GAUDRON J: Thank you, Mr Doyle.

MR DOYLE: Your Honours, the real controversy is this question of whether "purchaser" means, as we would contend, someone who assumes obligations under a contract, or, as the applicant contends, someone who has a contractual right to receive the transfer. That is the controversy.

GAUDRON J: And is the only person with the contractual right to receive a transfer, in this case.

MR DOYLE: The only person who is to receive the transfer. Not, however, the only person who can compel the performance - - -

GAUDRON J: No.

MR DOYLE: - - - of the obligation to make that transfer.

GAUDRON J: Do you accept that the custodian would be a necessary party to a specific performance action? I think he would, would he not?

MR DOYLE: Probably, because you would ultimately wish him to be bound by the result, but if he were not a party to the contract, nonetheless, the manager could compel a - - -

GAUDRON J: The trustee is a party to the contract. The trustee could, could he not, assuming things happened, bring a suit for specific performance in its own name, joining Cromwell as a defendant?

MR DOYLE: The applicant could bring its own proceedings for specific performance, joining the vendor and - - -

GAUDRON J: Cromwell, as defendants.

MR DOYLE: - - - Cromwell.

GAUDRON J: Equally, if your client sought specific performance, it would have to join the trustee, would it not?

MR DOYLE: If Cromwell were to sue for specific performance, it would be able to obtain it - - -

GAUDRON J: Well, I do not know that Cromwell could sue for specific performance.

MR DOYLE: It could, your Honour. It is, in a sense, no different to - - -

GAUDRON J: Only by joining - I do not know whether Cromwell could, in this case.

MR DOYLE: It is not a matter that is raised in anyone's submissions but your Honours will be familiar with - - -

GAUDRON J: But it does go to the - - -

GUMMOW J: It has to be thought about, I think.

MR DOYLE: What I am going to say is that there is a case of Beswick v Beswick, with which your Honours would be familiar, where the widow was able to enforce the obligation in her capacity as executor, not in her capacity as intended recipient of the benefit. Well, that would the same here, that Cromwell would be entitled to seek specific performance of the obligation of the vendor to convey to the applicant. Now, whether or not the applicant was a necessary party to the action, it probably is simply because one would wish to have it bound by the result, but it does not affect the entitlement of Cromwell to seek performance of the primary obligation. In a sense, that merely demonstrates there may be two people who have the contractual right to require a conveyance, one to someone else, and one to themselves.

GAUDRON J: But it may indicate that there is no purchaser named in this contract, for relevant purposes.

MR DOYLE: Your Honour, there is - if that is the case, there will be double duty, as my friend calls it, because he has to bring himself within that exception. It is our contention there is a purchaser named, and the controversy - - -

GAUDRON J: And it is only Cromwell.

MR DOYLE: And it is only Cromwell, because the essence of being a purchaser is the assumption of an obligation. Your Honours have asked whether there are any dictionary meanings or cases. Can we give you both. I will not hand anything up to your Honours, because we have given your Honours in our bundle copies of the two cases, but we have not given you an extract from the Macquarie Dictionary, where the primary meaning of the word "purchase" is:

to acquire by the payment of money or its equivalent -

so that it conveys the assumption of an obligation. But there are - - -

GAUDRON J: But it does not say payment by whom.

MR DOYLE: No, but if the question is, "Who is the purchaser?", as distinct from, "Is there a purchase?", it must be the person who makes the payment of money or its equivalent.

GUMMOW J: I am not sure that that is right. But anyhow, that is the question.

MR DOYLE: That is the question. Can we take your Honours, before we go to the cases, to point out the distinction which is drawn in the section itself, in section 54(1), which imposes duty on the contract, where someone "becomes entitled to the conveyance or transfer", on the one hand, and the language used in subsection (6), which is of a transfer made to a purchaser. Now, it is not a big point, but if our learned friend's contention were correct, then it is hard to explain the difference in language between subsections (1) and (6). In (6), the Parliament has chosen to identify as the thing which enlivens the exemption there being a transfer to a purchaser.

GAUDRON J: Well, the difference may be in the absence of the word "named" in 54(1).

MR DOYLE: I understand what your Honour is putting to me. My point is slightly different, if I could approach it this way. In 54(1), what is the crystallising event for the obligation to pay the duty is that someone "becomes entitled" to a conveyance. If our learned friend's contention were correct, one would have thought Parliament would, in subsection (6), use similar language, "a conveyance or transfer to the person who is, under the contract, entitled to the conveyance". Rather, they have chosen to use the word "purchaser". Now, our friends wish to say, there is no difference, but we would point out that there is a difference in the language used, and it can only be explained if our construction of the meaning of "purchaser" - as someone assuming an obligation to pay - is the correct one. Can I ask your Honours then to go to Commissioner of Stamp Duties (NSW) v Pendal Nominees Pty Ltd [1989] HCA 19; (1989) 167 CLR 1, which is in our bundle of cases, at No 2.

GUMMOW J: Just going back to section 54(1) for a minute, that is looking to two situations, is it not? "Whereby a person becomes entitled", that is immediately, as it were, "or may", if something happens, "become entitled to the conveyance". What is the distinction between the two? What is the second class getting at that is not covered by the first?

MR DOYLE: I think it is covered by the words your Honour has left out: "provided the terms and conditions thereof are met". It is subject to some condition.

GUMMOW J: Yes. Then "purchaser" in (6) is an umbrella term to accommodate both people, because, by the time you are looking at (6), by hypothesis, the second category person will have fulfilled the condition. Do you see what I mean?

MR DOYLE: That is true. It is undoubtedly the case by the time you come to (6) that there is a transfer that is being spoken of.

GUMMOW J: Yes, that is right.

MR DOYLE: It would have been natural - - -

GUMMOW J: So you do not have to write out all of (1) again.

MR DOYLE: No. If one were minded to adopt the same - - -

GUMMOW J: So the draftsman just said "purchaser".

MR DOYLE: Well, if your Honour is of that view, we point - - -

GUMMOW J: That is one view of it.

MR DOYLE: It is one view. The other is that because, ex hypothesis, by the time you get to (6), there is a transfer, it would have been as easy to say "the person who is entitled to the conveyance". But they have not said that. They have spoken of the word "purchaser". But I have made the point that I wished to make about that.

GUMMOW J: Yes. Anyhow, Pendal Nominees.

MR DOYLE: Pendal Nominees. At page 3, your Honours, at about point 2 of the page, you will see the short statement of the facts. BTA was a trustee of a unit trust. On a particular date, it and its wholly owned subsidiary, Pendal:

executed a deed of sale by which BTA agreed to purchase certain shares -

from the vendor -

Clause 1.4 of the deed stated that "RDC shall on completion deliver to BTA transfers of the . . . shares in favour of PN and PN shall hold such shares as nominee for BTA".

So it has some similarity to the case that we have here, your Honours. If you would turn then please to page 8 of the case. At about point 2 of the page, there is the quoted paragraph (1). If I could trouble your Honours to read that, which is the paragraph of the Stamp Act which is relevant. So the question in that case became whether the subsidiary who was to receive the transfer of the shares, or its holding company - whether the subsidiary, sorry, was an apparent purchaser. If your Honours would turn then to page 16, in the reasons of the Chief Justice, and read the last full paragraph on that page. It is the paragraph commencing, "However, it is unnecessary".

GUMMOW J: Yes.

MR DOYLE: That is indeed the majority view in that case. Can I take your Honours to where that appears in the other members of the majority judgments. At page 19, in the reasons of Justice Brennan, at about point 9 of the page he expresses his agreement with the reasons of the Chief Justice. Then at page 21, about five lines from the bottom, his Honour says:

It does not fall under par.(1) because PN is not the apparent purchaser, as the Chief Justice points out.

Their Honours Justices Deane and Dawson decided the case on a different basis, and do not touch upon this question, but then, in the reasons of Justice Toohey, at page 32, at about point 2 of the page, there is a paragraph commencing, "The Court of Appeal". If your Honours could read that, please.

GUMMOW J: There seems to be some distinction in the legislation there between apparent and real purchasers.

MR DOYLE: Yes, well, because the contention is that whilst on their face they are the purchaser, there is someone else who is paying the money and getting the benefit, which, indeed, is the contention here. The way in which each of their Honours addressed the view is that the identification of a purchaser requires the assumption of core obligations, and, in this case, to pay the money. The same point, with respect, is made in a different context, in Dudley Buildings v Rose, which is another case we have given your Honours. It is in tab 3 of the bundle.

GUMMOW J: Did you give the Court of Appeal Pendal?

MR DOYLE: I was not in it. Just excuse me. No, your Honour.

GUMMOW J: It gets better as it goes along.

MR DOYLE: Well, they have come to the right view, of course. They were given Dudley Buildings v Rose, your Honour. It is not a stamp duty case at all. It concerned a contract of sale where the named purchasers - forgive me for using that expression - intended to form a company to take over at some future time, and the issue was whether they had done so. The contract, the relevant parts of which appear in the head note, page 84, contains clause 13. Could we ask your Honours to read that clause in the headnote. I am sorry, it is tab 3 of our bundle. A question became, "What is required to become a purchaser recognised under the contract?" Can we ask you to go first to the reasons of Justice Rich at page 92.

GUMMOW J: Was this not discussed in Vickery v Woods?

MR DOYLE: It was, your Honour, I think. I cannot recall, your Honour. But none of it relevant to this question, we would submit. Can we ask you to go to page 92. At about six lines from the bottom, his Honour commences, "I take it the company". Can we ask you to read that to the first line on the next page.

GUMMOW J: Yes.

MR DOYLE: Then there are some remarks by Justice Starke, which we accept are ambiguous. They are at page 94, at the bottom of the page, commencing, "And if from". Just that sentence, really.

GUMMOW J: Well, that is reflecting the circumstance that there was a company to be formed, which is different to this case.

MR DOYLE: That is so. The reason why I would submit the observations are ambiguous is because his Honour says, "some contractual relation or obligation", whereas our contention is that it requires some obligation. But the matter is clear from the reasons of Justice Dixon on page 97. At about the middle of the page, there is a sentence where his Honour says:

The position of purchaser involves contractual obligations as well as rights. The very expression "purchaser" connotes some of these obligations.

My learned junior informs me, your Honour, that Dudley v Rose was referred to only in argument in Vickery v Woods, and not in the judgments. So both the natural meaning of the word "purchaser" which conveys the idea of someone who pays money to acquire, and those two High Court cases, which affirm that, support the construction for which we contend, and that is that it is not enough to be a purchaser that you have an entitlement, even a contractual entitlement, to receive the transfer. You have to assume the obligations, particularly the obligation to pay the money. Your Honours, if that view is correct - - -

GUMMOW J: So do you say, it was subsection (6), there was no purchaser here, is that right?

MR DOYLE: No. The purchaser was Cromwell, the party named in the contract as the purchaser.

GAUDRON J: But Cromwell was not entitled to a transfer.

MR DOYLE: No, but Cromwell assumed the obligation to pay the money.

GUMMOW J: Yes, I know, but that is one half of it, and you say, you have to have two halves of it.

MR DOYLE: No. I say that the person who is the purchaser is the person who acquires by payment of money. The acquisition does not have to be in his own name, which is what has occurred here.

GUMMOW J: Well, I think it is about getting a legal title, to some extent.

MR DOYLE: Well, your Honour has our submissions. That is about identifying who is the transferee, not who is the purchaser. Might I move from that? If our construction is right, we have set out in our written submissions why it is the case this contract does not identify the applicant as the - - -

GUMMOW J: Yes, but you take the expression "bona fide purchaser for value", that is bona fide purchaser of a title?

MR DOYLE: In that context, yes, your Honour. Your Honour, a person could nonetheless be a bona fide purchaser for value if they paid their value and asked for the transfer to be made to an associate.

GUMMOW J: That is a different question. That is a direction.

MR DOYLE: Nonetheless, they would be fairly described as a bona fide purchaser. As I say, if our construction is correct, it is plain this contract is one which names Cromwell, and not the applicant, as the purchaser. We have set out in our submissions why that is so, and I will not take you through that.

GAUDRON J: The definitions in the contract are, unless inconsistent with the context or the like - the contract, the standard form contract, as I recollect it, specifies that Cromwell is the purchaser, in a section marked "E" or something like that.

MR DOYLE: It does. That is so.

GAUDRON J: The definitions section of the standard terms says, "purchaser", "unless inconsistent with the context or" - the wording, I think - I am not exactly sure - "purchaser" means that person. But it is not entirely clear that it means Cromwell.

MR DOYLE: Might we take your Honours briefly, then, to some of the points that we would take you to in this contract. If you could go to the application book at page 47, your Honours have the front page, which identifies the three parties: the custodian, the vendor, and, separately, the purchaser. The custodian is the applicant. If your Honours then turn to page 58 and read - it is probably sufficient - paragraph 11.1.

GUMMOW J: Yes.

MR DOYLE: Your Honours, at page 60, at the very bottom - poorly copied on my copy - there is the definition of "purchaser" to which your Honour Justice Gaudron was referring. Item E takes you back to Cromwell, rather than to the applicant.

GAUDRON J: Yes, but I was drawing attention to - - -

MR DOYLE: The opening words.

GAUDRON J: - - - "unless inconsistent with the context or subject matter".

MR DOYLE: But in this contract, your Honours will appreciate that, almost uniformly, with one significant exception, the contract has been amended to say, "the purchaser or custodian", so there would be no context in which the word "purchaser" could be understood to mean "custodian", because the parties have deliberately made changes to reflect that.

GUMMOW J: Yes, well, then we have to go to clause 4, have we not, on 61? Clause 4(b).

MR DOYLE: Yes, your Honour, but that has been changed - - -

GUMMOW J: I know, by - - -

MR DOYLE: - - - to read "a transfer in favour" - - -

GUMMOW J: You go back to 52, then.

MR DOYLE: I wanted to take you, though - I am doing this quickly, I am sorry - to 62, in paragraph 10.1. There was a change made to this clause in the fifth line, to substitute "Custodian" for "Purchaser", but not to the first line, so that it is subject to the purchaser paying its money, the custodian becomes entitled to a good title to the property. So it is plain that the obligation to pay is that of the named purchaser, and not of the recipient of the bare transfer.

GUMMOW J: Yes. Mr Russell does not quarrel with that.

MR DOYLE: So construing the contract as a whole, it is plain, we would submit, that the identity of the purchaser who assumes the obligations is not the applicant. That is the point we would make. Your Honours, I see my time is up. There are some other matters I wish to briefly mention, if I might do so.

GAUDRON J: Very well.

MR DOYLE: It really is only three, and I will state them briefly. The second way in which our learned friends put the case is that we are right about what we said so far; nonetheless, they fall within the agency exception in section 54(6). Factually, it is unsustainable, in our submission. They really have the agency relationship the wrong way around. If one goes to the custodian agreement, it makes it clear that the applicant is the trustee and agent for the manager, and not the other way around. They have to make out that it is the other way around, to bring themselves within the exception.

If I could ask you to go to page 24 of the application book, it is at paragraph 4.1(b), and then to page 26 of the application book, to 4.2(a), and then to 4.3 on that page. Pausing at 4.3, it refers to "Proper Instructions", and they come from Cromwell - from the manager.

GUMMOW J: One of the troubles - it is not your trouble - is with the draft notice of appeal at 163, which does not tease out the particular grounds. It is just a global ground, really.

MR DOYLE: That is so.

GUMMOW J: The gravamen of what you are putting is that this other point about agency has no legs on it, in any event.

MR DOYLE: That is so.

GUMMOW J: But at the moment, it is just wrapped up there, on 163.

MR DOYLE: It is in our learned friends' submission.

GUMMOW J: Yes, I understand that.

MR DOYLE: We have made the submission we wish to make. They have put it the wrong way around. They really have to demonstrate that the agency relationship is that the manager, Cromwell, is signing as agent for custodian. That is plainly wrong, in our submission, when one looks at the relationship between them in the custodian agreement. There is nothing in the contract which would suggest that the agency relationship they contend for exists. Indeed, clause 11.1, that I took you to a moment ago, shows that the applicant is a party to the contract solely for the purposes of receiving the transfer. Your Honours, the - - -

GAUDRON J: You had two more points.

MR DOYLE: I am sorry?

GAUDRON J: Two more points?

MR DOYLE: Yes. I will even be more brief with these two. There is no element of double taxation in this case. It is simply two occasions with impost of duty, and the applicant's complaint, if it be one, is that they have not brought themselves within an exemption from one of those. The final point is the one that our learned friends have taken your Honours to, that this legislation now is no longer of any relevance to the stamp duty laws of Queensland or, indeed, anywhere else in Australia. For those reasons, in our submission, special leave ought not be granted.

GAUDRON J: Yes, thank you, Mr Doyle. Mr Russell, at this stage - and we do not want to prevent your replying to it - the Court would be minded to grant you special leave, but excluded from any ground of appeal or grounds of appeal that you might file the question whether there was an agency between the trustee and Cromwell for the purposes of subsection (6A). Now, you have a right to reply to that and persuade us otherwise, if you wish, but that is what we would be minded to do at this stage.

MR RUSSELL: If the question that I have to answer is whether that particular point is itself a special leave point, then - - -

GAUDRON J: No. You are being asked to answer a different question: whether that point is not so - - -

MR RUSSELL: Hopeless - - -

GAUDRON J: Hopeless.

MR RUSSELL: - - - I think your Honour was trying to say.

GAUDRON J: Yes, that we should not just cut it out of it.

MR RUSSELL: Your Honour, the reason why we would say that it is not - our learned friends have taken you to some paragraphs. I could take your Honour - - -

GAUDRON J: And, indeed, not simply so hopeless. I mean, there was another aspect to it. It is so much a matter of the particular relationship between Cromwell and the custodian as really to have - and to depend so much on the terms of that agreement - as to raise no real question of law or legal principle.

MR RUSSELL: I certainly could not argue that it raises a question of legal principle sufficient to warrant the grant of special leave. I concede that. If that means that your Honours do not need to hear from me any more, then I shall sit down, and if your Honours want me to address the matter briefly, I will do that.

GAUDRON J: Well, it is a matter for you, Mr Russell.

MR RUSSELL: Your Honour, the basis that we would say it is appropriate to leave it in is that these were two people plainly operating in accordance with a common purpose, whereby property was going to be acquired for the purposes of the scheme, one party providing the money and acting as responsible entity under the scheme, the other party acting as custodian. The two parties together sign an agreement in pursuance of that common scheme, the agreement predating by some months the date of the agreement.

In our respectful submission, in those circumstances, there is the necessary element of agency in this sense, that but for Trust Company of Australia having that arrangement with Cromwell, it would not be acting as purchaser. Therefore it is reasonable if Cromwell is properly described as the purchaser, because it is providing the money - because it is pursuant to an antecedent agreement under which Trust Company of Australia will take the transfer. It is appropriate in those circumstances, and because of that very agreement, to describe Cromwell Property Limited as agent for Trust Company of Australia Limited, within the meaning of section 54(6A).

GAUDRON J: The effect of that argument, if successful, would simply be what? To set aside the assessment and have the matter go back to the Commissioner for reconsideration. Is that right?

MR RUSSELL: The normal practice in Queensland - if this were before the Court of Appeal, the Court of Appeal would, if it made that finding - need to set aside - - -

GAUDRON J: Is it not a question of the Commissioner being satisfied?

MR RUSSELL: If one answers it in administrative law terms, that is so, your Honour. The Court of Appeal, however - I think it would say, if those facts were known and those facts were, as a matter of law, sufficient to constitute an agency arrangement, then there would be no basis - for the purposes of section 54(6A), there would, in our respectful submission, be no proper basis for the Commissioner not to be satisfied. So it would be one of those rare administrative law cases where the court could substitute its own decision. Those are our submissions, your Honour.

GAUDRON J: Yes. Thank you, Mr Russell.

We are not persuaded to alter the preliminary view we had formed, which is that special leave should be granted, but that the ground or grounds filed should exclude any question relating to agency for the purposes of section 54(6A) of the Stamp Act. Now, that will mean you will have to give attention to the ground of appeal. It is not good enough to file the one you have here in the book. MR RUSSELL: Certainly, your Honour.

GAUDRON J: Thank you. The Court will adjourn briefly to reconstitute.

AT 10.50 AM THE MATTER WAS CONCLUDED