National Court of Papua New Guinea

For these reasons, the appellant submitted, the Court should interpret the words, “conveyance” and “transfer” in Schedule 1, Item 5(4) to encompass sale or purchase of a property by a religious or charitable organisation like the appellant in the present case. Even if this argument fails by reason that the Court interprets the law and does not legislate, the Court is required by Constitution, Schedule 1.5(2), to give a fair and liberal meaning to Constitutional provisions. Even though the Stamp Duty Act is not a constitutional provision, it was submitted that, because it is an act of Parliament, this Court should not be constrained to give a fair and liberal interpretation to Schedule 1, Item 5(4) of the Stamp Duties Act.

As a matter of constrution of Schedule 1, Item 5(4) of the Stamp Duties Act, I consider that the whole argument on public policy considerations is misconceived and must fail. The appellant has conceded that the respondent has not erred in law or in fact, and that is the end of the matter, as far as this Court is concerned.

Some reliance have been placed on two Australian cases which I will refer to now.

In University of Western Australia –v- Commissioner of State Taxation (WA) (1987) 19 ATR 728; 88 ATC 4020, the University appealed to the Supreme Court of Western Australia against assessment of stamp duty totalling $1,831,855.00 in respect of the purchase of commercial properties, funds for which were derived from the sale of land endowed upon the trustees of the University Endowment and it was intended they be leased to ensure a reliable source of income.

In allowing the appeal, the Supreme Court held, “the effect of the University Endowment Act 1927 was that proceeds of the sale of any property vested in the appellant were to be reinvested in land used for revenue producing purposes. Accordingly, it was by statutory force that the properties purchased under the agreements with money derived from the sale of endowment land had been acquired for the purpose of a University. Therefore, the conveyances were exempted from duty under s.75AA of the Act” (Stamp Duty Act 1921 (WA)).”

I think it is necessary to cite s.75AA of the Western Australia Stamp Duties Act, because, at the end of the day, one will see that there is a clear distinction between that case and the case before me. Section75AA provides: “when the Commissioner is satisfied that any deed of gift, conveyance, transfer, settlement or other instrument operating as a voluntary disposition of property, or any conveyance on the purchase of property, has been made for the purpose of a University or for charitable or similar public purpose, he may exempt from ad valorem duty, or refund ad valorem duty paid on that deed, conveyance, transfer, settlement or other instrument or conveyance on the purchase of property.” I have emphasised the phrase “the purpose of a University,” because, in my view, it is significant in this case, and I will refer to counsel’s submission on it.

As alluded to earlier, counsel for the appellant submitted that the purpose for which the appellant effected this purchase was “to generate revenue necessary to further the objectives of the Institute/appellant.” I do not accept this submission simply because there is no factual or legal basis for it. Counsel referred me to ss 4 and 20 of the Divine Word Institute Act, 1980, however, I cannot find anything in these two provisions which stipulate what counsel has argued. In my view, in order for the appellant to attract exemption from ad valorem duty, there must be a provision in its Act stipulating that the Institute may acquire, lease or transfer real property for the purpose of the Institute, that is, to generate revenue for the purpose of the Institute or for revenue producing purposes for use in carrying out the Institute objectives or activities.

For instance, in the University of Western Australia case, the University Endowment Act 1927 provided the basis for the University to use the proceeds of the sale of property vested in it for reinvestment in land to be used for revenue producing purposes. The consequences of this was that by law, properties purchased by the University under agreements with money derived from the sale of endowment land were acquired for the purpose of the University. The phrase, “for the purpose of” in s.75AA alluded to, meant, “in carrying on the activities of”. Smith, J said at 732, “in my opinion, the words of s.75AA, “for the purpose of a University or for charitable purposes include by necessary implication the acquisition of property for revenue producing purposes for use in carrying out the activities of a University or a charitable purposes.” His Honour consequently concluded that the appellant had acquired the properties in question for the purpose of a University and had satisfied the precondition of s.75AA.

The other case referred to was, Ryde Municipal Council –v- Macquarie University [1978] HCA 58; (1977-78) 139 CLR 633. In that case, parts of a two level building at the University premises were leased to tenants for commercial purposes. There were retail shops, a travel centre, two bank branches, a chemist, etc. The municipal council issued a rate notice in respect of the whole of the land on which the building stood. The University sued the Council and obtained from the NSW Supreme Court (Waddell, J), a declaration that certain land which forms part of the land owned by the University and on which the University is situated, is not ratable under the Local Government Act, 1919 (NSW). The Court of Appeal, by a majority, dismissed an appeal by the Council, and the Council then appealed to the High Court by special leave.

The issue was whether the subject land was ratable. Both parties in that case agreed that this question should be determined.

However, it is important to note that Waddell, J and the majority of the Court of Appeal held that the land was used by the University solely for the purposes thereof within par (fii) of s.132(i) of the Local Government Act 1919 (NSW) and therefore not ratable under that Act.

It is obvious, in my view, that in those two cases, the issues considered related to the “purpose” and “sole use”, of the property respectively. Counsel for the appellant relied on these cases, however, in my view, they do not support his arguments. Although the decision in those cases are persuasive and of great assistance, and though, may not be binding on this Court under Constitution Schedule 2.2, I do not see why those principles cannot be adopted and applied in this case.

I am inclined to follow the principles in those Australian cases and apply them in the present case, because I consider they are sound principles of law. In both cases, there were enabling legislations which empowered both Universities to generate income from proceeds of real estate for the purposes of the Universities. In the present case, there is no provision in the Divine Word Institute Act, 1980, empowering the Institute to generate income from real estate for the purposes of the Institute.

I do not think I can accept the appellant’s counsel’s contention that I should apply a fair and liberal interpretation to Schedule 1, Item 5(4), and there are several reasons for this. Firstly, Schedule 1, Item 5(4) is not a constitutional law. Constitution Schedule 1.5(2) specifically refers to a constitutional law. The Stamp Duties Act is not a constitutional law. Secondly, there is no evidence at all that the appellant purchased the property, the subject of this appeal, for the purposes of the Institute. Contrary to what Mr Kuwimb submitted, there is no evidence before this Court that the property purchased by the Institute was to generate revenue necessary to further the objectives of the Institute.

And furthermore, there is no evidence before this Court that the purchase was wholly ancillary to, and or directly facilitates the carrying out of the appellants objects in s.4 of the Divine Word Institute Act, 1980.

Finally, it is not the Court’s function to import into a legislation, what the legislature has not done or omitted to do. To do so, would be, to usurp the legislative function of the legislature. This Court cannot read into the Stamp Duties Act, what is not in it, nor can it imply what is not stipulated in the Act. The Court can only interpret what is stated in a law and cannot import into the law what is not stipulated. My view is fortified by what the Supreme Court said in Mairi Mairi –v- Alkan Tololo & Ors [1976] PNGLR 125 at 139. The Supreme Court was following a rule of construction that is historical throughout Commonwealth jurisdictions: Their Honours, Prentice, DCJ & Williams, J said:

“In a taxing Act, one has to look at what is clearly said. There is no room for intendment. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the languages used. .......... “If the case is not brought within the words of the statute, interpreted according to their natural meaning; and if there is a case which is not covered by the statute so interpreted, that can only be cured by legislation and not by any attempt to construe it benevolently in favour of the State.”

It is noted that in that case, the argument of fair and liberal meaning in Constitution, Schedule 1.5 also arose and it gave rise to the statement of law that I have cited in full above. Craies on Statute Law, 6^th ed., Sweet & Maxwell, 1963 at pp113-115 provides some very good common law authority on this subject which are applicable in this jurisdiction by virtue of Schedule 2.2 Constitution.

On the basis of that Supreme Court decision, I consider that the appellant’s argument of fair and liberal interpretation must fail.

For these reasons, it is my judgment that the appellant is not exempted from payment of ad valorem duty or stamp duty pursuant to Schedule 1, Item 5(4) because the property it purchased was not purchased for the purposes of the Institute.

I therefore order that the appeal be dismissed with costs to be taxed.

Lawyer for Appellant: Warner Shand

Lawyer for Respondent: Bill N. Nouairi