Allied Signal Inc. and Another v Commissioner of Stamp Duties

• Judgment Date: 04 December 1987
• Date: 04 December 1987
• Docket Number: Originating Motion No 116 of 1987
• Court: High Court (Singapore)

Allied Signal Inc and another

Plaintiff

and

Commissioner of Stamp Duties

Defendant

[1987] SGHC 48

Joseph Grimberg JC

Originating Motion No 116 of 1987

High Court

Revenue Law–Stamp duties–Instruments liable to ad valorem duty–Whether second agreement involving same parties and consideration subject to stamp duties or advalorem duties–Section 21 (3) Stamp Duties Act (Cap 147, 1970 Rev Ed)–Section 22 Stamp Duties Act (Cap 312, 1985 Rev Ed)

By an agreement dated 28 January 1986 (“Agreement One”), BP Singapore Ltd (“BP”), a Singapore incorporated company, agreed to sell, and the first appellant (“Allied Signal”) agreed to purchase, certain of BP's assets in Singapore, including the whole of BP's interest in a building agreement made between itself and Jurong Town Corporation (“the building agreement”). One of the terms of Agreement One conferred upon Allied Signal the right to designate a subsidiary to take the interests which were to pass under it (“Clause 21”). On 12 February 1986, Allied Signal's solicitors brought Agreement One to the respondent and applied for his opinion as to whether it was chargeable with any duty and, if so, the amount of duty chargeable. By his reply, the respondent stated that Agreement One would be liable to ad valorem duty but that the ensuing deed of assignment would not be liable to any duty “by virtue of s 21 (3) of the [Stamp Duties] Act”.

By another agreement dated 28 February 1986 (“Agreement Two”) between BP, Allied Signal and the second appellant (“Norplex”), a subsidiary of the first appellant, it was acknowledged that Allied Signal, pursuant to the right conferred to it by Clause 21, had designated Norplex to take the interests purchased by Allied Signal under Agreement One in its place. Accordingly, by a deed of assignment dated on the same day (“the assignment”), BP assigned its interest under the building agreement to Norplex. Just as was the case with Agreement One, on 7 March 1986, Agreement Two and the assignment were brought to the respondent for his opinion as to whether they were chargeable with any duty and, if so, the amount of duty chargeable.

By a letter dated 23 June 1986, the respondent informed the appellants' solicitors that the stamp duty payable on Agreement One was $108,800 and that in light of the fact that the assignment was an assignment to Norplex and not to Allied Signal, that the assignment was also stampable and assessed ad valorem duty on the assignment at the same amount. Upon payment of the duty assessed on the assignment, Agreement Two would not be liable to stamp duty by virtue of s 21 (5) of the Stamp Duties Act (Cap 147, 1970 Rev Ed) (“the earlier Edition”).

The appellants, being dissatisfied with the assessment of the respondent, and having paid the duty assessed on Agreement One and the assignment, appealed. The questions to be determined were as follows: (a) whether the respondent was correct in deciding that the assignment was chargeable to ad valorem duty, having charged ad valorem duty on Agreement One; (b) if not, how the two documents should be stamped; and (c) whether Allied Signal was entitled, under s 22 (7) of the Stamp Duties Act (Cap 312, 1985 Rev Ed) (“the Act”), to the return of $108,800 being the amount of stamp duty paid to the respondent on Agreement One.

Held, allowing the appeal:

(1) As BP's interest in the building agreement was “an equitable estate or interest in property”, the respondent had been right in assessing and charging ad valorem stamp duty on the basis that Agreement One fell within the provisions of s 22 (1) of the Act. While no duty fell to be paid under s 22 (2) of the Act as the consideration for the subsale which arose as a consequence of Agreement Two was the same as the consideration provided for in respect of the original sale, as a result of the fact that s 22 (3) of the Act provided that no assignment would be chargeable with duty where the duty had been so paid under s 22 (1) or s 22 (2), the assignment was not chargeable with duty: at [29] to [31].

(2) The question of whether Allied Signal was entitled, under s 22 (7) of the Act, to the return of $108,800 being the amount of stamp duty paid to the respondent on Agreement One, does not arise having regard to the fact that Agreement One was correctly stamped and it was the assignment that was not chargeable. Accordingly, the respondent would have to repay to the second appellant the sum of $108,000 that had been paid by the second appellant to the respondent in conformity with the respondent's assessment of duty chargeable on the assignment: at [38] to [40].

[Observation: The court declined the respondent's invitation to defer the court's decision on the matter on the basis that the Law Revision Commissioners were likely soon, in exercise of the powers conferred on them by s 23 of the Revised Edition of the Laws Act (Cap 275, 1985 Rev Ed) (“the Revised Edition of the Laws Act”), to rectify the effect of s 22 (3) of the Act (to that of the s 21 (3) of the earlier Edition) such that the assignment could only have been treated as having been duly stamped if stamp duty had been paid on both Agreement One and Agreement Two. A litigant must take the law, whatever it may mean, as he found it: at [27] and [28].

As the 1985 Revised Edition of the Act is the only edition of the Act that may be looked at as a result of s 7 (4) of the Revised Edition of the Laws Act, it would follow that it must be considered to have retrospective effect. In any event, as nothing in s 4 of the Revised Edition of the Laws Act empowers the Commissioners to change the law, it must follow that s 21 (3) of the earlier Edition and s 22 (3) of the Revised Edition have the same meaning: at [32] to [35].]

Revised Edition of the Laws Act (Cap 275, 1985 Rev Ed) ss 3 (1), 4, 7, 23

Stamp Duties Act (Cap 147, 1970 Rev Ed) s 21 (3) (consd); ss 21 (2), 21 (5)

Stamp Duties Act (Cap 312, 1985 Rev Ed) s 22 (consd); ss 21 (5), 22 (1), 22 (2), 22 (3), 22 (5), 22 (7), 23, 37 (1), 40

Koh Kok Wah (Arthur Loke & Partners) for the appellants

Lucy Hangchi for the respondent.

Judgment reserved.

Joseph Grimberg JC

1 This is a case stated for my determination under s 40 of the Stamp Duties Act (“the Act”), the appellants being dissatisfied with an assessment of the respondent, the Commissioner of Stamp Duties. The first appellant is Allied Signal Inc (“Allied Signal”) and the second appellant is Norplex Singapore Ltd (“Norplex”), a subsidiary of Allied Signal.

2 By an agreement dated 28 January 1986 (“Agreement One”) BP Singapore Pte Ltd (“BP”), a Singapore incorporated company, agreed to sell, and Allied Signal agreed to purchase, certain of BP's assets in Singapore, including the whole of BP's interest in a building agreement...