Court name
Court of Appeal of Turks and Caicos Islands
Case number
CL-AP 3 of 2015

AG TCI v. Robinson (CL-AP 3 of 2015) [2016] TCACA 1 (20 September 2016);

Law report citations
Media neutral citation
[2016] TCACA 1
Coram
Mottley, P
Forte, JA
Adderley, JA

IN THE COURT OF APPEAL

TURKS AND CAICOS ISLANDS

CIVIL APPEAL No. 3/2015

BETWEEN:

THE ATTORNEY GENERAL OF THE TURKS AND CAICOS ISLANDS

APPELLANT

AND

CLYDE ROBINSON

RESPONDENT

Before:

The Honourable Mr. Justice Mottley, Justice of Appeal

The Honourable Mr. Justice Forte, Justice of Appeal  

The Honourable Mr. Justice Adderley, Justice of Appeal

On May 11, 2016 and September 20, 2016

David Phillips. Q.C. and Mr. Patrick Patterson for the Appellant

Ariel Misick, Q.C. for the Respondent

Mottley, J.A.

1.             In respect to the appeal against the judge’s ruling on Stamp Duty, the parties agree that the judge accurately summarized the facts at paras 141, 142 and 143 of her judgment where she stated:

"141.      On or about the 5 February 2007, Mr. Robinson and Ms. Bishop made an agreement to divide their marital assets, Lot 40 and 25°/o of the Land to Mr. Robinson, 75°/o of the Land to Ms. Bishop to whom the Legal Title would be conveyed.

142.        On or about the 14 June 2007 pursuant to this Agreement, Mr. Robinson executed an instrument of Transfer by which he transferred the Land to Ms. Bishop in consideration of love and affection. The Transfer was certified by the Permanent Secretary for Finance, Hartley Coalbrooke as having been made for no valuable consideration, and as such no stamp duty was payable or paid by the Defendants.

143.        On 5 September 2007, Ms Bishop sold the Land to Wawa for the sum of $1,500,000 and paid to Mr. Robinson 25°/o of the sale price as set out in their Agreement."

2.             The judge found that on about 14 June 2007, pursuant to an agreement dated 5 February 2007 made between Mr. Robinson and his wife, Mr. Robinson executed an instrument of Transfer by which he transferred the land for his wife.

3.             Mr. David Phillips on behalf of the Attorney General submitted that two separate issues arise namely-

(i)            Whether the transfer was liable for stamp duty;

(ii)           Whether the Crown's claim fails on procedural grounds.

At first instance, his primary contention was that the transaction is taxable as a conveyance on sale. In respect to whether the transaction is taxable as a voluntary disposition under section 23 of the Stamp Duty Ordinance (SDO) CAP 157, counsel conceded that he did not argue this issue at the first instance but the issue was raised by the judge in her judgment.

4.             In respect to a conveyance on sale, counsel relied on section 4 of the SDO, which deals with conveyance on sale:

4 (1) Subject to this Ordinance, every instruction, wherever executed, specified in the Schedule I, shall be chargeable with the stamp duty specified in respected thereof in that Schedule and the headings, notes, explanations and exemptions in that Schedule shall have effect accordingly.

(3) If any instruction chargeable with stamp duty is not duly stamped, the person or persons specified in Schedule I as being liable for stamping that instrument and any person who uses that instrument, shall be liable, or jointly and severally liable, as the case may be, civilly to the Collector for the payment of the stamp duty and any penalty payable under section 8, and may be proceeded against without reference to any civil liability of such persons as between themselves for the payment thereof.

In Schedule 1, Head 4 of the SDO it provides that on a Conveyance on Sale, elsewhere in the Turks and Caicos Islands than specified in paragraph (b)

 

where the amount or value of the consideration exceeds $25,000 but does not exceed $75,000 and the instrument is certified in accordance with section 24;

(c) (i)

$6.50 for every $100 or part thereof of the amount or value of the consideration

(ii)

where the amount or value of the consideration exceeds $75,000.

(c)

(ii)

$9.75 for every $100 or part thereof of the amount or value of the consideration

 

 

 

30 days after execution

 

 

 

All parties and other persons executing

 

5.             In section 2 of the SDO "conveyance"- means every instrument, including a surrender and a declaration of trust, and every order of any court, whereby any immovable property is transferred to or vested in or declared to be held in trust for any person;

In the same section "conveyance on sale" means every conveyance whereby any immovable property in the Turks and Caicos Islands, upon the sale thereof, is transferred to or vested in a purchaser or any other person on his behalf or by his direction, and includes a foreclosure order."

Stamp duty is payable on "the amount or value of the consideration". Counsel submitted that this was an expressed recognition that a conveyance on sale may be taxable even if the instrument does not express the amount of consideration in monetary terms. However, he suggested that consideration must have some value (monetary worth) which is capable of calculation.

6.             Counsel argued that the judge was wrong in ruling that a conveyance on sale required "a price in money paid or promised’'. He further argued that this erroneous ruling led to the conclusion by the judge that "there was no conveyance on sale"

7.             He contended that the judge's conclusion was inconsistent with her analysis of his submissions on the proper construction of Head 4 of Schedule 1. At paragraph 164 of the judgment, the judge said:

"(Mr. Phillips) submits that to construe 'conveyance for sale' as meaning a 'conveyance for money paid or promised.' would lead to the conclusion that if the owner of property sold land for silver or some other precious metal it would not be subject to Stamp Duty but it seems to me that it simply means that if there were an agreement to sell property for a certain weight in silver, then to perfect the transfer and conclude the sale, the transfer would have to be expressed in the sum of money which represented the value of the consideration the seller had accepted (the price paid) or there would be no valid sale under the Ordinance and the Instrument would not be stamped."

8.             Counsel submitted that, in order to fall within the scheme of the Ordinance, all that was required was that the value of consideration is capable of calculation in monetary terms. He stated that whether in the form of silver, or some other precious metal, or in the form of land, the consideration will be taxable provided that the value was capable of being calculated in terms of money. He stated that the judge's reasoning in paragraph 164 (supra) demonstrated the correctness of his case.

9.             He suggested that the court should stand back and look at the commercial reality of the transaction. He said that Mr. Robinson and Miss Bishop exchanged land; the value of the land received by Miss Bishop was greater than that received by Mr. Robinson. He argued that the value of the consideration given by Miss Bishop, for stamp duty purposes, was the amount by which what she received exceeded what she gave. That, he said, was the value that was taxable for stamp duty.

10.          He submitted that this was the approach adopted by the Court of Appeal in Coats v Inland Revenue [1897] 2 QB 423. He suggested that this Court should follow that decision. In that case, the Court of Appeal ruled that an exchange of shares was a conveyance on sale and, as such, was chargeable to stamp duty. He conceded that the wording of the statute under consideration in Coats was not the same as the SDO and, as in the case of Littlewoods, was not a decision based on the same statutory wording. He argued that the decision is nevertheless valuable because it demonstrated that as a matter of general principle consideration that can be calculated in money's worth may be treated as equivalent to money. The principle that was applied in Coats was that the shares were to be regarded to equivalent of money because they were capable of being valued in monetary terms. Counsel urged upon the Court that this is precisely the principle that should be applied in this case.

11.          In behalf of Mr. Robinson, Mr. Misick submitted that in Coats it was held by the judge and confirmed by the Court of Appeal that the transaction was a conveyance on sale for two reasons: (a) a transfer in consideration for stock was expressly made chargeable to stamp duty under section 55 of the Stamp Act 1891; (b) while the expression "exchange" had been deliberately used instead of "sale", but the substance of the transaction was that of a sale because the shareholders were asked to sell their shares and that was the true nature of the bargain.

12.          In J. & P. Coats, Limited, Appellants; The Commissioners of Inland Revenue, Respondents. [1897] 2 Q.B. 423 Lord Esher M.R. said:

"I am quite clear that the decision in this case must be upheld. The first thing is to see what is the construction of the Act and what is the rule with regard to anything like this transaction. It must be admitted, and is admitted, that here there is a conveyance by a man of property which consists of shares in a company. We have got to apply to that state of things that which is stated by Lindley L.J. in the case of Foster v. Inland Revenue Commissioners. (3) We know who is the person conveying. Whit is the consideration? The Lord Justice in the case to which I have referred says: "The consideration for the transfer of this property is, I agree, not money, but it is stocks and securities," -that is the consideration, and that is the case here - "which for the purpose are to be regarded as equivalent to money," not in general language, but "by reason of s. 71 of the Act." It is admitted that may be read to be by s. 55 of the present Act. His construction of the Act is, that if property is conveyed for a consideration, and that consideration is shares, it is equivalent to a conveyance of the property for money."

13.          A.L. Smith, L.J in his judgment agreed with Lord Esher. He said at p426:

"The question is whether this document was a conveyance on sale within the meaning of the Stamp Act, 1891. That Act, by s. 54, gives a definition of what shall be included in the term "conveyance on sale"; and when I read this document it seems to me to come within the definition.... In my judgment, the substance of this transaction is a conveyance on sale within the Stamp Act. It is said it is not a conveyance on sale, but an exchange, and that it comes within s. 73 and within the schedule of the Act. My remark upon that is, if it be a conveyance on sale, which I hold it to be, it cannot be an exchange; so that it is not necessary to inquire into the exchange section of this Act."

14.          Rigby L.J. was in no doubt in his judgment. In concurring with other members of the Court, he stated:

"I am of opinion that this is a case of conveyance on sale...So far there is no doubt it is a transfer, and there is a conveyance, within the meaning of the Act, of those shares.... I agree that in the memorandum signed by them they call it an exchange, which idea is carried out in the transfer itself; but calling it so will not make it an exchange.... In my view, the Court below were right in treating this transaction as a conveyance on sale, and the appeal should be dismissed."

15.          In my view, the judge was correct in rejecting Mr. Phillip's submission that the decision in Coats was applicable. However, the parties chose to characterize their transaction in Coats, it was abundantly clear that the transaction was a conveyance on sale. In those circumstances, I do not consider that the case was of any assistance.

16.          Having rejected Mr. Phillips' submissions, the judge ruled that the transaction between the Robinsons was not a conveyance on sale because there was no price in monetary terms paid or promised. In so doing, the judge followed the decision of the House of Lords in Littlewoods v Inland Revenue [1963] AC 13.

17.          Mr. Phillips submitted that the judge's reasoning and her reliance on Littlewoods was wrong for the reasons which he set out in his written submissions. First, he said, the Ordinance speaks of the value of the consideration. This, he argued, did not limit stamp duty to monetary consideration but extended it to consideration that can be valued in money's worth. This he suggested was the legislative purpose of the SDO. Further, he stated that the judge's decision was restrictive in a way that was not required by the wording of the SDO and consequently served to frustrate its purpose. As stated earlier, he relied on the decision in Coats which he suggested demonstrated that there was no reason in principle not to charge stamp duty on transactions where the consideration, howsoever expressed in the instrument, was capable of being calculated in monetary terms. Secondly, he contended that Littlewoods was only of persuasive authority and was not binding on the Court. In any event, he said Littlewoods can be distinguished and should not be followed as the decision was based on a differently worded statue which itself was the product of a series of earlier statues. The SDO was not only worded differently and it did not have the same legislative history. Finally, he contended that the transaction in Littlewoods concerned the exchange of a lease and a freehold interest in the same property and the transaction was not comparable to an exchange of freehold interest in distinct parcels of land.

18.          Counsel argued that the judge's decision frustrated the legislative purpose of the Ordinance in a way that runs contrary to the express wording of the Ordinance. He suggested that there was no principle of interpretation that compelled the expression amount or value of the consideration to be limited to cash consideration. He urged the Court to set aside the judge's decision and rule instead that the transaction was subject to stamp duty. He suggested that the matter be remitted to the Supreme Court in order that the amount of stamp duty and penalty may be assessed.

19.          Mr. Misick, Q.C. suggested that the issue in the appeal was not whether stamp duty was payable on a transfer of land where the consideration for the transfer was by way of exchange of land of unequal value. On the contrary, he stated that the issue before the Court below was whether the transfer was a conveyance on sale within the meaning of section 2 of the SDO. He submitted, that in considering whether the transfer was a conveyance on sale, the Court has to look at the transfer itself and the surrounding circumstances to see what was the legal nature of the transaction carried out by the transfer. He continued that having identified the legal nature of the transaction, the Court must then relate that transaction to the language of the SDO in order to determine if the transfer was chargeable to ad valorem stamp duty. He said that the court was being asked by the Appellant (a) to treat the transaction as an exchange of land of unequal value between Mr. Robinson and Mrs. Robinson; and (b) to find that the alleged exchange was a conveyances on sale chargeable to stamp duty under Head 4 of the Schedule 1 to the SDO.

20.          The Court was reminded of the nature of the transaction in question. It was made orally in December 2006 and was then reduced into writing in February 2007. The exchange of the land took place on 14 June 2007. At the time of the oral agreement and the reduction of that agreement into writing, Mr. and Mrs. Robinson were married. The legal ownership of parcel 40 was in the name of Mr. Robinson and he was the lessee of parcel 286. Mr. Robinson alone was legally entitled to be the transferor of Parcel 286. While the transaction required Mr. Robinson to transfer parcel 286 to Mrs. Robinson, the question that arises was whether it was a sale of that parcel to Mrs. Robinson or whether it was an 'exchange' of that parcel for parcel 40. Mr. Misick stated that Mrs. Robinson never owned parcel 40 and so parcel 40 could not be exchanged for parcel 286. He contended that the nature and the purpose of the agreement was simply an agreement between Mr. and Mrs. Robinson to divide equally between them the two properties which were acquired by them in the course of their marriage and this occurred in the face of what appeared to be a breakdown in the marriage.

21.          I agree that the nature of the transaction was accurately stated as a division of the property between Mr. and Mrs. Robinson. I further accept that it is not for the court to re¬characterize the transaction as an exchange of land instead of an agreement between Mr. and Mrs. Robinson to distribute their property equally between them. In my opinion, the transfer was made pursuant to the agreement to divide and distribute matrimonial assets. The question to be determined was whether the transfer is captured by the definition of a conveyance on sale in the SDO.

22.          This definition "conveyance on sale" under SDO is the same as that contained in section 54 of the English Stamp Act 1891. What constituted a conveyance on sale under section 54 has been interpreted by English courts on numerous occasions. There is nothing in the language or context of the SDO which should persuade the court to differ from the meaning given by English courts. This is especially so because the SDO is based on the Stamp Act 1891.

23.          In rejecting Mr. Phillips' submissions, I accept what was stated by Viscount Simonds in Littlewoods case. His Lordship said at p152:

"If stamp duty is to be assessed on the instrument as a "conveyance or transfer on sale" an extended meaning must be given to the words "on sale." For neither in form nor in substance is the exchange a sale according to ordinary legal terminology. I quote, as did Harman Iff., from Benjamin on Sale, 8th ed., p. 2: "It [a sale] may be defined to be a transfer of the absolute or general property in a thing for a price in money. Hence it follows that, to constitute a valid sale, there must be a concurrence of the following elements, viz.:- (1) parties competent to contract; (2) mutual assent; (3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and (4) a price in money paid or promised." Prima facie, therefore, the exchange was not a conveyance on sale. There was no price in money paid or promised on one side or the other. On the contrary, the consideration was expressed to be on the one side the conveyance of the fee simple, on the other the assignment of the lease. Why, then, should a different and wider meaning be ascribed to the word "sale" in the context of the heading of the Schedule? I think that the contention was narrowed down to two points: (1) that the assessment of duty referred to "the amount or value of the consideration for the sale," and (2) that reference to sections 54 to 61 of the Act indicated that a price in money was not the only measure by which the consideration might be assessed, special attention being here directed to section 56."

24.          In my view, the transaction was not a sale because there was neither a vendor nor a purchaser involved. The Respondent was not selling parcel 286 and his wife was not purchasing it. Mr. Robinson was transferring that parcel to Mrs. Robinson in return for Mrs. Robinson relinquishing any claim to parcel 40 as part of an agreement to divide their matrimonal assets. Mrs. Robinson claimed to have had an interest in both parcels and that claim predated the transaction. The division and distribution of property was not a sale in any ordinary sense of the word "sale". I accept that to characterize Mr. Robinson as a vendor and Mrs. Robinson as a buyer would be to re-characterize the transaction as something other than what it was.

25.          In respect to whether the transfer is chargeable as a voluntary disposition, Mr. Phillips indicated that this argument was advanced as an alternative to his primary argument that the transaction was taxable as a conveyance on sale. He asserted that the alternative argument was based upon the judge's ruling that if it was not a conveyance on sale, the transfer must have been a voluntary disposition, and is therefore chargeable to stamp duty under section 23 of the Act.

26.          At paras 166 and 168 of the judgment, the judge stated:

"[166] I am satisfied that a conveyance on sale under the Ordinance is a conveyance for a price in money paid or promised and will include, exceptionally, a conveyance in consideration of stocks (s18) a debt due to the transferee (s20) and a transfer operating as a voluntary disposition (s23).

[168] I am satisfied that there was no conveyance on sale but it seems to me that the transfer was arguable chargeable for duty under section 23. Although I accept Mr. Thompson’s submission, that consideration was given by Ms. Bishop for the transfer, on my reading of the section, the transfer nonetheless operated as a voluntary disposition under section 23(3)."

27.          At para 174, the judge returned to the issue of voluntary disposition:

"[174] The evidence does not support a finding that this Agreement was made in the course of divorce proceedings and the Transfer, not being made "in the course of or consequence of nullity, divorce or judicial separation" and not approved by the Court, would, on the construction I place on the section, operate as a voluntary disposition inter vivos and be chargeable with stamp duty."

Later the judge concluded:

"[175] The section provides, however, that such dispositions will be chargeable for duty if the Collector - and not the Court- were of the opinion by reason of the inadequacy of the consideration or other circumstances, that the transfer conferred "a substantial benefit on the person to whom the property (was) transferred" and the fact is the Court has not had the benefit of the Collector's opinion or any evidence from the Collector at all."

28.          Although, the judge ruled that transaction was by way of a voluntary disposition under the SDO, the judge held that stamp duty became payable on a voluntary disposition only where the Collector had expressed his opinion that the transfer conferred a ‘substantial benefit’. Mr. Phillips submitted that this ruling frustrated the purpose of the section and is based on a misconstruction of section 23 and was wrong.

29.          Mr. Phillips argued that the judge’s construction of section 23 of the SDO was unnecessarily restrictive. He contended that the requirement to pay stamp duty on a voluntary disposition is imposed in the plainest and unqualified terms by section 23(1). He stated that liability to pay stamp duty is automatic. He suggested that the obligation arose from the very transaction without the requirement of any action from the Controller or other government official. The consequences of a failure to discharge that automatic liability are provided for by section 8(1) of the SDO. The section provided liability to pay the unpaid duty, and a penalty.

“8(1) Except in the case of an instrument to which section 12(6)(a) applies, any instrument chargeable with stamp duty which is not stamped before or within the time for stamping such instrument, shall not be stamped except by the Collector upon payment of the stamp duty plus a penalty of whichever of the following amounts applies to the case.

a)            If the instrument is so stamped not later than one month after the time for stamping, half the amount of the stamp duty;

b)            If the instrument is so stamped later than one month but not later than two months after the time for stamping, double the amount of the stamp duty;

c)             In any other case, four times the amount of the stamp duty.”

30.          Counsel submitted that the judge ought to have ruled that liability to pay the stamp duty arose automatically from the nature of the transaction and that the judge ought to have held that liability under section 8 of the SDO to pay the unpaid stamp duty and penalty arose automatically in every instance where the stamp duty was not fully paid within the specified time.

31.          Mr. Misisck submitted that section 23 (1) imposed stamp duty on a conveyance “operating as a voluntary disposition inter vivos”. However, the section does not say when a transfer operates as a voluntary disposition inter vivos. This is left to section 23(3). Section 23(3) extends to all transfers with the exception of transfer made in good faith for valuable consideration. It removes from that exception cases where the consideration is inadequate and the collector is of the view that by reasons of the inadequacy of the consideration a substantial benefit is conferred on the transferee. Counsel submitted that whether the consideration is inadequate is to be determined by an objective test and is not one for the collector. However, it is for the collector to determine whether the inadequacy of the consideration confers a substantial benefit on the transferee.

32.          Section 23 of the SDO

‘23(1) Any conveyance of immovable property in the Turks and Caicos Islands operating as a voluntary inter vivos shall be chargeable with stamp duty as a conveyance on sale, with the substitution of the value of the property conveyed for the amount or value of the consideration for the sale.

(3) Any conveyance or transfer, not being a disposition made in favour of a purchaser or incumbrancer or other person in good faith and for valuable consideration, shall for the purposes of this Ordinance be deemed to be a conveyance or transfer operating as a voluntary disposition inter vivo, and, except where the consideration is marriage, the consideration for any conveyance or transfer shall not for this purpose be deemed to be valuable consideration where the Collector is of the opinion that, by reason of the inadequacy of the sum paid as consideration or other circumstances, the conveyance or transfer confers a substantial benefit on the person to whom the property is conveyed or transferred”.

33.          Section 12 of the SDO states:

“12(1) In respect of any executed instrument, the Collector may, and shall if he is so required by any person upon payment of an adjudication fee of $20 to do so, express his opinion with reference to that instrument as to whether it is chargeable with any stamp duty and, if so, what amount stamp duty is chargeable thereon.

(2)           If the Collector is of the opinion that the instrument:

a)            is not chargeable with stamp duty, it may be stamped with a stamp approved by the Collector denoting that it is not so chargeable;

b)            is chargeable with stamp duty, he shall asses the stamp duty payable and, subject to subsection (6), where the instrument is stamped under section with a stamp denoting payment of the stamp duty so assessed, it may also be stamped with a stamp approved by the Collector denoting that it is duly stamped.

12(9) The Collector may assess the stamp duty chargeable upon a conveyance or transfer:

a)            stamped at any time within two years preceding the date of assessment; and

b)            with reference to which he has not previously assessed the stamp duty under subsection (1);

if the appears to him that the conveyance or transfer was one to which the provisions of section 23(3) should have been applied, and, if the Collector assesses the stamp duty chargeable to be higher than that previously paid, the parties liable to pay the stamp duty shall pay the difference between the amount previously paid and the amount as assessed plus interest at the rate of 12 per centum per annum on the difference from the date it was first stamped”.

34.          The legislative purpose behind the voluntary disposition provision of section 23 was considered by the Privy Council in Lap Shun Textiles Industrial Co. Ltd. Appellant and Collector of Stamp Revenue Respondent [on appeal from the Supreme Court of Hong Kong] [1976] A.C. 530. The provision in section 27 of the Hong Kong Ordinance which was considered in Lap Shun is in identical terms to the voluntary disposition provisions in section 23 of the SDO. Lord Wilberforce said:

"It is reasonably clear what section 27 was intended to achieve. In the first place it charges voluntary conveyances, i.e., conveyances for which no valuable consideration is given, with ad valorem duty based on the value of the property conveyed. In the second place it prevents evasion of this duty by presenting what may in substance be a voluntary disposition as a conveyance for valuable consideration through the insertion of a nominal consideration, or an inadequate consideration. The question is whether in addition to these objectives it achieves another, namely the charging on a value basis of conveyances on sale where the consideration is inadequate. The question whether this was intended cannot be answered a priori; it can only be answered upon a consideration of what subsection (4), fairly construed as a whole, can be found to achieve.

As to this, their Lordships are in no doubt: the subsection is clear and lacking in ambiguity. Having, in the initial parenthesis, excepted from its grasp dispositions in good faith and for valuable consideration, it continues in the second limb to remove from this exception certain particular cases. One such case is composed of the following elements: (i) inadequacy of consideration, (ii) the opinion of the collector that by reason of this inadequacy a substantial benefit is, by the conveyance or transfer, conferred on the transferee. Another such case, not directly relevant to the present case, depends upon the existence of "other circumstances" instead of inadequacy of consideration. If this is the correct analysis, there can be no doubt that the conveyance of February 8, 1973, comes squarely within the charge, as both courts in Hong Kong have held."

The anti-avoidance purpose is clearly identified. Accordingly, when construing the provision the court should where possible give effect to that purpose. In other words, it should not favour artificial or unnecessary obstacles to the recovery of stamp duty.

35.          Mr. Phillips submitted that, if this was a transfer by way of voluntary disposition as distinct from a conveyance on sale it is chargeable to stamp duty. He said that the Respondent was liable for the unpaid duty and for the statutory penalty. In the circumstance, the judge's decision should be reversed and the matter should be remitted to the Supreme Court so that the amount of stamp duty and penalty may be assessed.

36.          I reject this submission. I accept the submission of Mr. Misick that adjudication was necessary in the case of a transfer operating as a voluntary disposition inter vivos. Without such adjudication, the Collector cannot determine the value of the property which was substituted for the amount of the consideration, nor would the Collector be able to determine whether the transferee receives a substantial benefit in consequence of the inadequacy of the consideration. In my view, this is put beyond doubt by section 23(3). I endorse the view of the judge as set out in para 175 of her judgment.

37.          The judge correctly found that Mrs. Robinson gave valuable consideration, namely, the release of her claim to parcel 40 and her obligation to pay 25% of any sale proceeds to Mr. Robinson if and when the land was resold. There is no appeal against that finding. There has been no assessment by the Collector under section 12(2)(b) or section 12(9) as was the case in Lap Shun. I agree with the judge that the opinion of the Collector that Mrs. Robinson obtained a substantial benefit was an essential element in the liability to pay under section 23. In the absence of that opinion, the judge was right to conclude that she could not have held that the transfer was caught under section 23.

38.          The other aspect of this appeal was whether the application before the judge was brought by the Attorney General for and on behalf of the Collector of Stamp Duty. In dealing with this aspect, the judge held:

[149] By virtue of the Crown Proceedings Ordinance, all civil proceedings brought by the Crown shall be brought by the Attorney General. It is trite that the Attorney General in bringing proceedings does so in a representative capacity on behalf of the Crown and its Officers and not in his own behalf.

[150] Mr. Phillips is, in my view, correct in saying that the Attorney General is entitled to sue on behalf of the Collector of Stamp Duty but, on any analysis, these proceedings were not instituted by the Attorney General for and on behalf of the Collector of Stamp Duty and the claim for Stamp Duty has not been made for and on behalf of the Collector.

[151] These proceedings were brought by the Attorney General acting on behalf of the Crown and in whom all Crown land is vested on a complaint that Crown land was sold to Mr. Robinson in breach of fiduciary duty by a Minister of the Crown or by Mr. Robinson as an employee of the Crown or under a mistake or as a result of fraud. In this suit, he is asserting the rights of the Crown/TGIC not the Collector of Customs.

[152] The mere fact that the Attorney General adds a claim for stamp duty does not make proceedings taken on behalf of the Collector. His representative capacity-the person on whose behalf he institutes the proceedings- would have to be pleased. Mr. Phillips says it is to be implied, but it is plain from the relief sought that it is the Crown and not the Collector that seeks to claim unpaid duties and penalties and it is clear from the Stamp Duty Ordinance that the Crown has no right to sue for breach of Stamp Duty and no right to the relief sought.

[153] Section 4(3) makes it clear that persons who use any instrument which is not duly stamped shall be civilly liable for stamp duty to the Collector, and that phrase simply means that the Collector is the person that can sue to recover unpaid stamp duties. Penalties which may be assessed on that amount may be remitted wholly or in part by the Permanent Secretary, Finance. The legislative scheme contemplates an action for recovery of stamp duty by the Collector once the unpaid duties and any penalties have been assessed and consideration to remitting penalties given by the Permanent Secretary. It does not contemplate an action for damages by the Crown.

[154] So while Marlin J was correct in saying in Attorney General v Emerald Cay Ltd & Others CE 192/2010, that "anyone who owes stamp duty owes to the Collector (who) collects it on behalf od the government," it does not mean that the Crown can institute proceedings for breach of the Stamp Duty Ordinance. Only the Collector can do so, bringing the proceedings as he must through the Attorney General, as provided by sections 13 and 19 of the Crown Proceedings Ordinance.

[155] The Crown not being entitled to institute proceedings against the Defendant for breach of the Stamp Duty Ordinance and not entitled to the relief sought, I would dismiss the claim under this head.

39.          In his written submissions, Mr. Philip submitted that the judge’s analysis was wrong in both law and in fact. He said that there is no procedural requirement for the Attorney General to plead his representative capacity. He argued that the power of the Attorney General to bring proceedings on behalf of the Crown arose as a matter of law by virtue of Section 13(1) Crown Proceedings Ordinance. This he stated is an unrestricted power and there was no procedural requirement to plead the representative capacity. The Re-Amended Statement of Claim made it clear that the claim was brought in the name of the Attorney General on behalf of the Controller. He referred to: paragraph 50A of the Re-Amended Statement of Claim which recited section 4(3) of the Stamp Duty Ordinance which stated that the liability to pay the unpaid stamp duty and penalty was a liability to the Controller.

40.          He further argued paragraph 50F of the Re-Amended Statement of Claim expressly alleged the liability of Mr. & Mrs. Robinson arose under section 4(3) of the SDO and that liability can be only to the Controller. He stated that payment of that liability which was pleaded as a civil debt and not as the judge incorrectly stated as a claim in damages is claimed in paragraphs 5A & 5B of the Prayer. He submitted that it was plain from the pleading that the claim was made by the Attorney General on behalf of the Controller.

41.          He contended that ruling of the judge produced an unnecessary procedural obstacle to securing the purpose of the SDO. Counsel suggested that the court should be astute to further the purpose of the Ordinance rather than to frustrate it by unnecessary procedural niceties.

42.          In response, Mr. Misick stated that the SDO provided a complete code for stamp duty liability and how duty is collected. Where duty was chargeable and not paid, the duty became a debt due to the Collector. The Legislature has set out the procedure by which instruments are to be assessed and the duty collected and recovered in the case of non-compliance with the provisions of the Ordinance. The responsibility for collecting and adjudicating stamp duty is conferred on the Collector. When there is a dispute or question as to whether an instrument is stamp-able or chargeable with stamp duty, section 12 confers the power of adjudicating that disputer or question on the Collector. Under section 12 any person may require the Collector to express his opinion on whether an instrument is chargeable to duty and, if so, what amount. If the Collector is asked for his opinion, it is then up to the Collector to investigate the transaction and provide his opinion. The Collector’s opinion is conclusive unless the right of appeal conferred upon section 13 is exercised. The appeal is by way of a case stated and is initiated by the aggrieved party requiring the Collector to state a case. If the aggrieved party requires the Collector to state a case, the Collector is obliged to personally state the case, sign it and deliver it serving a copy on the Attorney General. The Legislature therefore has expressly provided a mechanism for the involvement of the Attorney General in disputes relating to stamp duty liability. Mr. Misick argued that procedure does not involve the institution of proceedings by the Attorney General.

43.          In my view, section 4(3) SDO provides that any person who uses an instrument that is not duly stamped is Hable civilly to the Collector. Section 14(1) (b) SDO envisages that any civil proceeding are to be brought by the Collector. I accept that it is the Collector who is to determine whether or not civil proceedings are initiated. The power is given to the Collector and the procedure is set out for him to assess whether duty had been properly paid on an instrument either at his own will, or at the request of another person. I accept Mr. Misick’s submission that it is incomprehensible that the Collector could simply launch civil proceedings without indicating to the persons affected that a question has arisen as to the amount of stamp duty payable and without giving them an opportunity to respond to the question before legal proceedings are instituted. Mr. Misick also suggested that it is even more incomprehensible that civil proceedings could be launched by the Attorney General without consulting the Collector or the persons affected. That, he suggested, could not have been the intention of the Legislature. I find that there is merit in that Submission.

44.          The Crown Proceedings Ordinance (“CPO”) by sections 13 and 19 provided that the A.G. has the right to bring civil proceedigns on behalf of the Crown or any Government department. In my view, such capacity is not capable of being exercised unilaterally by the A.G. in the circumstances where the Legislature through the SDO codifies a law which confers that capacity on another officer, the Collector. In my opinion, any civil proceedings commenced by the Attorney General for the collection of stamp duty must be brought specifically at the behest and in the name of the Collector. Mr. Misick contended that there is no evidence that the Collector was ever consulted with respect to this claim. He suggested that it was absurd to suggest that the Attorney General could bring proceedings on the behalf of the Collector when the Collector was not consulted nor was the Collector’s approval sought or obtained to pursue such proceedings. I agree with Mr. Misick’s contention that the fact that the money recovered is payable to the Government is immaterial.

45.          In my view, the judge was correct in concluding that on the analysis of the case brought before her, the proceedings were not instituted at the behest of the Collector nor was the claim for stamp duty made to Mr. Robinson for and on behalf of the Collector as is the requirement for recovery under the SDO. In the circumstances, the judge was right to accept Mr. Misick’s submission that the Attorney General had no standing to commence the action.

46.          For the reasons set out, the appeal is dismissed. The Court will hear the parties on costs.

______________________

Mottley, JA

______________

Forte, JA

_________________

Adderley, JA