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Placer Pacific Ltd v Commissioner General of Internal Review [1998] PGNC 32; N1855 (18 May 1998)

Unreported National Court Decisions

N1855

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

APPEAL 219 OF 1996
BETWEEN: PLACER PACIFIC LIMITED
APPELLANT
AND: THE COMMISSIONER GENERAL OF INTERNAL REVENUE
RESPONDENT

Waigani

Sevua J
18 May 1998
18 December 1998

STAMP DUTY – Finance Agreement – Executed between Appellant and another – Agreement executed out of Papua New Guinea – Non registration – Original not within country – Liability to duty – Photocopy or copy of document – Whether subject to duty – Copy document – Whether it is an Instrument therefore subject to duty – Stamp Duties Act.

HELD

The copy of the original agreement which is outside the jurisdiction is an ‘instrument’ as defined in s.12(b) of the Act (No. 26 of 1998) therefore subject to duty.

Case Cited

Commissioner of Stamps (Qld) -v- Arnold Wienholt & Ors [1915] HCA 49; [1915] 20 CLR 531.

Counsel

P. Payne for Appellant

M. Miva for Respondent

18 December 1998

SEVUA J: The appellant, Placer Pacific Limited, and Placer (PNG)Pty Ltd executed a finance agreement on 6th July, 1990, in Hong Kong. The original agreement has not been brought into Papua New Guinea, however, sometime in 1991 the Controller of Foreign Exchange (the Controller) at the Bank of Papua New Guinea registered a copy of the agreement. The appellant, following that request, forwarded a photocopy (the copy document) of the original agreement to the Controller.

Upon receipt of the copy document, the respondent, on 18^th April, 1996, assessed duty on the copy document in pursuance of s. 20 (1) (b) and item 1 of Schedule 1 of the Stamp Duties Act (the Act). Duty was assessed at K120,160.21 with a penalty of K120,160.21 for late lodgement and interest on unpaid duty in the sum of K 52,541.28. The duty was paid on 17^th May, 1996.

The appellant lodged an objection against the assessment on 17^th May, 1996; however the respondent disallowed the objection on 14^th June, 1996. The appellant has therefore appealed to this Court against the respondent’s decision of 14^th June, 1996, and such appeal is brought pursuant to s. 21 (1) (a) of the Act.

My Payne, counsel for the appellant, says the issue is whether the finance agreement executed between the appellant and Placer PNG Limited is subject to stamp duty as it was executed onside Papua New Guinea. In respect of this submission, Mr Payne said, the relevant provision of the Act in determining liability is s. 5(2) which provides:

“Stamp duty chargeable on an instrument is payable when the instrument is first executed, or, in the case of an instrument that is first executed outside the country; when the instrument comes into the country”.

Counsel also referred to s. 5 A of the Act, which is an amended provision in s. 3 of Stamp Duties (Budget Provisions) Act, 1994, No. 43 of 1994, which came into force on 1^st January, 1995. The new s. 5A provides:

“Subject to this Act, duty shall be chargeable in respect of an instrument that is outside Papua New Guinea if the instrument (irrespective of whether it was executed in Papua New Guinea or otherwise) relates to property situated, or any matter or thing done or to be done in Papua New Guinea”.

Mr Payne submitted that the territorial nexus in that provision does not apply to the original agreement as it only apply to instruments executed after 1^st January, 1995. Mr Miva, counsel for the respondent said that s. 5A has no retrospective power, but he also said, basically that was “perhaps done to correct any loophole existing prior to 1994” Mr Paye relied on Commissioner of Stamps (Qld) -v- Arnold Wienholt & Ors [1915] HCA 49; [1915] 20 CLR 531, a decision of the High Court of Australia, which considered the terms of the relevant Queensland Stamp Duties legislation.

Without placing much reliance on the Queensland case, I am of the view that s. 5A does not apply in the present case for the simple reason that it has no retrospective operative powers. Section 5A could not apply to a transaction which took place in 1990, since the amending Act did not become operative until 1^st January, 1995.

There is another issue raised by the respondent, in fact, the respondent relies on that issue to have the appeal dismissed. The issue is whether the copy document is an “instrument”, as defined in the Act. The respondent’s assessment was based on its interpretation of the word “instrument”, and as I understand, the respondent considered that it was an “instrument” therefore liable to duty.

Whilst the respondent acknowledges that the original agreement is not liable to duty, until brought into the country, it argues that the copy of the agreement is an “instrument” therefore subject to duty.

The word “instrument” is defined in s. 2 of the Act (No 26 of 1988) as follows:

“(a) docket,, memorandum or anyr any written or otherwise represented document, including a written, typed or printed document; and,

(b) ;ټ in a ca a case whee where the original of an instrument is not available for production to the Collector of Stamp Duties --

(i) ҈ a duplicate originaiginal thereof; or

(ii) py co theforiginal or the dthe duplicate original, whether produced by the same process as the original or beparaocesswhether executed or not&#

Mr Payne submitted that unless the copy is a “duplicate” or “counterpart” of the original agreement pursuant to s. 12 of the Act, the Act does not impose duty on a copy. He relies on the definitions of those two words. Stroud’s Judicial Dictionary, 5^th ed. Vol 2, defines “duplicate” as a document which is essentially the same as some other document having precisely the like operation and effect. “Counterpart”, is defined in Jowitt’s Dictionary of English Law, 2^nd ed. Vol 1, as, “the corresponding part or duplicate”.

Based on these definitions, Mr Payne submitted that the copy document is not liable to duty. He submitted that the definition of “instrument” only applies in circumstances where the original instrument is unavailable, for example, it has been destroyed or lost.

Counsel relies on Wienholts’ case which is authority for supporting the appellant’s arguments that the original agreement is not liable to duty until brought into the country. He further submitted that the fact that the photocopy of the original, was brought into the country, should not result in the original agreement becoming liable to duty.

Counsel went on to discuss the difference between a copy and a duplicate or counterparts. I agree with the appellant’s agreement that, the copy or photocopy of the original agreement is not a duplicate or counterpart pursuant to s. 12 of the Act.

However, I consider that the definition of “instrument” subjects the copy of the agreement to stamp duty. I specifically refer to paragraph (b) of the definition of “instrument” which states:

“(b) case theeorigioriginal ofal of a instrument is not available for production to the Collector of Stamp Duties --

(i)ـ҈& a duplicate original thereof; or

(ii) <;&160; #16co a copy of the originaiginal or the duplicate original whether produced by the same process as the original or by a separate process and whether executed or not”

riginreeme not availabailable inle in the the country for production to the Collector of Stamp Duties. No reason has been given as to why it has not been brought into the country, but that’s not the issue here. The fact is, it is not available. I do not think I can accept Mr Payne’s submission that, the term, “not available” refers to circumstances like, it has been lost or destroyed. The Court would be inserting into the Act what the legislature did not, and that is not the function of the Court. The term, “not available” can include any circumstances of unavailability.

I am of the view that, the copy of the original agreement, which is outside the country, is an instrument pursuant to s.12(b) of the Act, therefore subject to duty. The Court has noted other submissions advanced by the appellant. However, in view of my construction of the word “instrument”, it is not necessary to address those submissions.

The appeal is therefore dismissed with costs.

Lawyer for Appellant: Blake Dawson Waldron

Lawyer for Respondent: Internal Revenue Commission