Lake et Al v The Stamp Commissioner
| Jurisdiction | Jamaica |
| Judge | Orr, J. |
| Judgment Date | 16 July 1999 |
| Court | Revenue Court (Jamaica) |
| Docket Number | Revenue Court Appeal No. 5 of 1998 |
| Date | 16 July 1999 |
Revenue Court
Orr, J.
Revenue Court Appeal No. 5 of 1998
Miss Nicole Lambert for the appellants.
Miss Barbara Lee and Mr. Frank Williams for the respondent.
Revenue law - Transfer tax — Appellants challenged the decision of the respondent refusing to exempt from transfer tax a transfer of land by trustees — Section 26(2) Transfer Tax Act — Whether transfer was pursuant to a sale and therefore subject to stamp duty — Whether appellants had proved that respondent came to a wrong conclusion — Appeal dismissed — Decision of respondent confirmed — Matter remitted to respondent to assess stamp duty and transfer tax payable.
Lake et. at. v. The Stamp Commissioner
In their “supplementary Notice of Appeal” the appellants challenge the decision of the respondent, the Stamp Commissioner on the 9th day of June 1998. They state the decision as one whereby it was ordered that:
“The Transfer of Land by Trustees dated August 21, 1997 in respect of Lot 55 Sherbourne Heights, St. Andrew registered at Volume 1122 Folio 728 (“the property”) from Michael Rodwell Lake and Donna Ventura to Michael Rodwell Lake and Caprice Marie Lake (nee Josephs) was not exempt from transfer tax.”
In their prayer they seek an order: “That the objection be upheld and that the said Transfer of land by Trustees is exempt from transfer tax and stamp duty pursuant to section 3(2) of the Transfer Tax Act and the provisions of the Stamp Duty Act respectively.”
The grounds of appeal are as follows:
“1. The appellant purchased the property pursuant to an Agreement for Sale dated March 10, 1987.
2. On the 10th day of March 1987 the appellants executed a Declaration of Trust in respect of the property, which stated that they held the property on trust for Michael Rodwell Lake and Caprice Marie Josephs as joint tenants.
3. Section 3(2) of the Transfer Tax Act applies and consequently the Transfer of Land by Trustees is not subject to Transfer Tax.
4. The Transfer of Land by Trustees is not one arising from a sale, or for value, and therefore Stamp Duty is not payable.”
In the Amended Statement of Case the respondent joins issue with the appellants regarding the date on which the Declaration of Trust was made and contends that the decision was validly made and should be confirmed. The respondent advances the following reasons for doing so:
“(i) That in arriving at the said decision the respondent at all material times acted in accordance with the provisions of the Transfer Tax Act and Stamp Duty Act.
(ii) The respondent did not err in law or in fact in arriving at the said decision.
(iii) That even if, which is not admitted, the specific reasons given for the respondent's decision were incorrect the decision that the transaction and/or documents were subject to tax is justifiable on the basis of other reasons on which the Respondent will seek leave to rely at the hearing of this matter.
(iv) The respondent was entitled, on the material available to her to come to the decision that the “Declaration of Trust was not executed on the date alleged by the appellants, and does not substantiate the claim that a trust existed at the date of purchase of the property.”
The following facts were agreed or proved:
- By an Agreement for Sale dated March 10, 1987 the appellants purchased property known as Lot 99 Sherbourne Heights, in the parish of Saint Andrew, registered at volume 1122 Folio 728 of the Register Book of Titles. 2. In Transfer of Land no. 460127 of lot 99 Sherbourne Heights, from Sherbourne Limited, the Transferor to the appellants, it is expressly stated that the Transferor “Hereby transfers all its estate and interest in the said lot subject to the restrictive and other covenants set out in the First Schedule hereto to the Transferees in fee simple as Tenants in common in equal shares.” (emphasis supplied) 3. The Agreement of Sale was duly stamped with Transfer tax and stamp duty in March 1987. 4. On or about the 24th day of February, 1997, the appellants, through their attorneys-at-law presented to the respondent for stamping a document headed “Declaration of Trust”, purporting to have been made on the 10th day of March, 1987, in which the appellants declared that they held the said land in trust for the beneficiaries, the said Michael Rodwell Lake and Suzanne Caprice Marie Josephs as joint tenants. The document was duly stamped. 5. Both the appellant Michael Rodwell Lake and his attorney Maurice Courtenay Robinson have given affidavits for use in this matter. In neither affidavit was the instrument of mortgage or the transfer no. 460127 exhibited, nor were they produced to the respondent at any time. 6. On or about the 25th day of August 1997, the appellants through their attorneys-at-law, submitted to the respondent a document headed “Transfer of Land by Trustees”, purporting to transfer the property from Michael Rodwell Lake and Donna Ventura to Michael Rodwell Lake and Suzanne Caprice Marie Lake. The stamped “Declaration of Trust” mentioned earlier was then presented in support of the appellants' contention that the purported transfer was not taxable. 7. The respondent informed the appellants by letter, dated March 31, 1998, that the transfer was subject to transfer tax and Stamp duty. 8. By letter dated 21st April 1998, the appellants objected to this decision. 9. The respondent confirmed her decision by letter dated June 9, 1998. 10. By an instrument of mortgage dated 7th February 1991, the appellants obtained a mortgage of the property from Victoria Mutual Building Society in the sum of one million dollars ($1,000,000.00) for twenty years at twenty percent (20%) per annum.
It is an established principle that taxing statutes must be construed strictly.
In disputes involving the liability to pay taxes, the adjudicator may look at the substance of a transaction.
Parties are entitled to arrange their affairs so as to avoid or reduce their liability to tax.
By virtue of section 3(2) of the Transfer Tax Act, the transfer in dispute is exempt from tax.
In the instant case no further proof that a trust was created is necessary.
There is no requirement that property must be held by trustees as joint tenants and not as tenants in common.
The date, which appears in a document such as the transfer in this case is prima facie its true date — Malpas v. Clements [1850] 19 L.J. Q.B. 435. There was no further onus on the appellants to prove the date of execution. The onus is on the respondent to prove that the date on the document is not the true date of its creation!
The respondent having already stamped the document is estopped from challenging the date in the Declaration of Trust.
The Transfer Act and the Stamp Duty Act do not contain provisions, which seek to invalidate the date on a document because it is produced for stamping late.
The endorsement on the certificate of Title to the effect that the appellants held the property as tenants in common was an error.
The fact that the property was mortgaged has nothing to do with the creation or existence of a trust.
There is no provision requiring trusts to be registered under the Registration of Titles Act.
The schedule to the Stamp Duty Act indicates that only a conveyance or transfer of property on a sale attracts Stamp duty. Oughtred v. IRC [1960] A.C. 206 and Fitch Lovell Ltd v. IRC [1962] 3 All E.R. 685 support this contention.
The transfer in the instant matter is not pursuant to a sale and is therefore not subject to stamp duty.
By section 26(2) of The Transfer Tax Act, the onus of proving that the decision of the respondent is erroneous lies on the appellants. (See also Chantier v. Dickenson (1843) L.R. 6CP 253.
In the circumstances of the instant case the respondent cannot be said to have erred. The relevant circumstances are:
The lateness of the presentation of the trust.
A prudent taxpayer would have deposited a copy of the trust instrument with the Registrar of Titles. This is a common practice.
No mention is made of the “trust” in transfer no. 460127 from Sherbourne Limited to the appellants.
The appellants were not authorised to mortgage the property.
It is usual for trustees to hold property as joint tenants not tenants in common.
There are many cases of alleged inadvertence in the conduct of the appellants or their advisors.
Further, there is authority, which seems to suggest that estoppel cannot be used to challenge the exercise by a statutory body of its statutory duty.
The affidavit of Maurice Courtenay Robinson is in breach of section 408 of the Judicature Civil Procedure Code.
In assessing whether the appellants have discharged the onus placed on them, the Court should apply the principle in Associated Provincial Picture Houses Ltd. v. Wednesday Corporation [1947] 2 All E.R. 680 at 682 D–F, that is, whether the respondents decision can be said to be so unreasonable that no reasonable tribunal could have arrived at it.
The cases of W.T. Ramsay Ltd. v. IRC [1981] STC 174 and Pan Jamaican Trust v. Stamp Commissioner 16 J.L.R. 467 suggest that the Court should look at the substance of the transaction.
The provision in section 26(2) of the Transfer Tax Act has nothing to do with section 3(2) of that Act.
The respondent cannot rely on what a prudent tax payer might have done, she must look to the letter of the law.
Cavendish v. Dacres Vol. xxx1 Ch.D 466 shows that having made an election the respondent cannot go back on it. She cannot approbate reprobate.
The cases of Ramsay v. IRC and Pan-Jamaican...
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