Scottish Court of Session Decisions

Keeping that in view, let us see what is provided by the 73d section—“Where any property is conveyed to any person in consideration wholly or in part of any debt due to him”—that is, to the disponee—“or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money, or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the conveyance is chargeable with ad valorem duty.” Now, there is one part of this enactment about which there is no dispute as applicable to the present case. The property is conveyed in consideration partly of a debt due to the purchaser—that is to say, in consideration of that debt being discharged. The liquidators admit that to that extent they are liable in ad valorem duty. We shall therefore eliminate that part of this clause of the statute altogether in considering this matter, and see what are the further words of the enactment applicable to this burden of £2400, subject to which the conveyance is made—“Where any property is conveyed subject to the payment or transfer of any money, whether it be a charge upon the property or not, such money is to be deemed part of the consideration in respect whereof the conveyance is chargeable.” These are the words of the clause applicable to the case we have to deal with. Now, is not the amount of this bond and disposition in security a sum of money subject to which this property is conveyed? I really cannot, conceive anything more simple than the answer to that question. There cannot be the least doubt that the property in the hands of the purchasers, the liquidators, is subject to this bond and disposition in security for £2400, and when they pay off that bond, if they think fit to do so, they will then be the heritable proprietors of a subject the price and value of which is £4750, and therefore it seems most reasonable, if it is necessary to look at the reason of the thing at all, that as they can put themselves to-morrow in the position of being the unburdened proprietors of this estate, upon adding to the sum that they have already given the sum contained in this bond, they will thereby become proprietors of that estate who have obtained a conveyance to that estate of the value of £4750 by means of the deed which is now to be stamped.

If any other rule were adopted, it is quite plain that the fair incidence of this tax would be altogether frustrated and defeated. A proprietor has an estate worth £20,000. There is a bond upon it for £10,000. He sells that estate, and the purchaser pays to him the difference between the amount of the bond and the value of the estate, so that the bond is for £10,000 and he pays £10,000. The day after he obtains infeftment he pays off the bond. Well, the practical result of that is that he has paid £20,000 as the purchase-money of this estate, and he has obtained a conveyance with an ad valorem stamp of the value of £10,000. That is a simple defeating of the purpose and intention of the Legislature as expressed in this clause, and therefore I think it very clear, upon the plain meaning of this section, that there was no intention whatever to go back upon the enactment of the 16 and 17 Vict., and to restore the enactment of the 55 Geo. III. which is what the liquidators are contending for. On the contrary, it seems to me that the 73d section plainly intended to continue the provision of the Statute 16 and 17 Vict., and therefore that the Commissioners of Inland Revenue are right.

Lord Mure—I have come to the same conclusion that the Commissioners have taken a right view of this section of the statute. There can be no doubt of this, that under the Act 16 and 17 Vict. cap. 59, sec. 10, when a property is sold subject to a mortgage or subject to a bond, the value or amount of that mortgage or bond is to be taken into consideration in fixing the ad valorem duty. That is the express provision of the section which your Lordship has read, and which proceeds upon a preamble of the older Act of 55 Geo. III. having made a somewhat different and more limited provision. There call be no doubt of this, that under this 10th section, when an estate is sold subject to a mortgage, the value of the mortgage is to be taken into consideration. But in that section 10, as I read it, I do not find the words which occur in the 73d section of the later Act, viz., “where any property is conveyed in consideration of any debt due to him”—that is, due to the party to whom it is conveyed. These words, I think, are not found—at all events expressly—in that 10th section of the 16 and 17 Vict., and when at first the argument was proceeding it appeared to me that, looking to the peculiar terms of the phraseology of the 73d section, there might be a point raised as to whether the debt due to him was not put alternatively as a separate thing from the payment of money, and it is that, I think, which has created a little difficulty and confusion in the argument put to us on the part of the liquidators. But on further consideration I am of opinion that that construction is not a sound one, because it appears to me that the intention of the 73d section was unquestionably to bring within the provisions of the Revenue Act the consideration of a debt due to the purchaser. It never was intended by that section to put an end to the provisions of the 16 and 17 Vict. by which a sale subject to a mortgage was to have a value put upon it with reference to the value of that mortgage. The 73d section is—“Where any property is conveyed to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money, or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the conveyance is chargeable with ad valorem duty.” That is, the debt due to the purchaser, if the property is not subject to a mortgage, will be the consideration; but if the property is subject to a mortgage at the same time when it is conveyed for a debt due to the party, then both are to be taken as making up the consideration. That, I think, is the sound construction of the statute, and I agree with your Lordship that the Commissioners are right.

Lord Shand—If this question had been to be decided on the terms of the Stamp Act of 1870, without the light of the previous legislation, I should have felt it to be attended with very great difficulty, because I think there was a great deal of room for the argument maintained on behalf of the liquidators of the bank that the word “payment” occurring in sec. 73 of the statute, used in this expression “subject either certainly or contingently to the payment of any money or stock,” ought to be limited to a case in which there was a personal obligation to pay money, and would not include the case where the money or stock was a burden merely upon land without a personal obligation. But I think the difficulty is entirely removed when the previous legislation is regarded. By the Statute 16 and 17 Vict. cap. 59, passed in 1853, which amended the law as it had previously existed under the Act 55 Geo. III., it was substantially provided that where a person purchased property for a valuable consideration, subject to any mortgage or pecuniary burden, the amount of the debt or mortgage should be deemed to be a part of the consideration. The result of that statute, I think, was this, that in such a case—a case in which there was in the first place so much money paid or a debt extinguished, and in the next place the property was conveyed subject to a burden—the stamp-duty payable was to be paid upon the value of the property which the purchaser acquired, and the mode of ascertaining that value was to take, in the first place, the sum which he was paying or the amount of the debt which he was discharging, and the amount of the burden upon the property as fixed by the mortgage. That—the including of the amount of the mortgage in the consideration—was very deliberately done by the Legislature in 1853, in consequence of a decision which was pronounced, and which your Lordship has referred to; and for a period of seventeen years so stood the law. But in 1870 the statute was passed which we have now to construe, and it is to be observed that the main purpose of that statute was—while there is no doubt that to a considerable extent additional duties were given to the Crown by its provisions—its main purpose was really to consolidate the legislation in regard to the stamp-duties, with a view to the repeal of the then existing Acts, which were numerous and somewhat confusing, and which were repealed accordingly in the same session of Parliament. Now, having that in view—that this was substantially a consolidation statute, and that there is no declaration in the statute, either directly or which can be inferred from its terms, that there was any intention to go back upon that which had been done deliberately in 1853—I think, keeping that in view, there is no difficulty in the construction of the language of sec. 73. Your Lordship has fully gone over the terms of that section, and I do not mean to go into it in detail; but it appears to me, keeping in view what the existing law was, that this was intended in briefer terms to preserve the law upon that footing. The enactment is, that where the consideration is partly the discharge of a debt and partly a payment of money or stock, whether constituting a charge upon the property or not, the amount of that charge shall be a part of the consideration, and I think the word “payment” there is intended to cover the case in which the party is under an obligation to meet the burden, or it may be to give stock in return, while the words “constituting a charge or incumbrance upon the property” are intended to cover the case where that is the only way in which the burden is mentioned, although there be no obligation to pay. On the whole matter, therefore, I agree with your Lordship in thinking that the Commissioners have come to a right decision.

Lord Deas was absent.