Placer Pacific Ltd v Commissioner General, Internal Revenue Commission [2000] PGSC 20; SC657 (14 December 2000)

SC657

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 9 OF 1999

BETWEEN

PLACER PACIFIC LIMITED

Appellant

AND

COMMISSIONER GENERAL
INTERNAL REVENUE COMMISSION

Respondent

WAIGANI : Amet CJ, Kapi DCJ, Salika J
2000 : August 24
: December 14

APPEAL - Stamp Duties Assessment - Assessment by Commissioner-General - Objection to - Considered and Disallowed

FINANCING AGREEMENT - Original Document - Executed & Remains Outside of Jurisdiction - Liability to Duty Assessment - Sections 5(2) & 1(1) - Stamp Duties Act - Copy Document

Issue: Whether a copy of an original agreement executed and remains outside of the jurisdiction is liable to assessment of stamp duty by the Commissioner General under the Stamp Duties Act.

Held: A copy of an original document, where the original is not available for production, received by the Commissioner General is an instrument for the purposes of the Act and therefore liable to Stamp Duty Assessment.

Appeal is dismissed

Counsel:
P. Payne, for the Appellant
M. Miva, for the Respondent

14 Dec, 2000

BY THE COURT: This is an appeal from the National Court, which dismissed an appeal from Stamp Duty Assessment by the Commissioner General of Internal Revenue in respect of a Financing Agreement between Placer (PNG) Pty Limited and Placer Pacific Limited.

The Financing Agreement between the parties was executed outside the country on 6 July 1990. The original has not been brought into Papua New Guinea. In 1991, at the request of the Controller of Foreign Exchange with the Bank of Papua New Guinea, the Appellant provided a copy of the Original Agreement to the Controller. The Controller forwarded the copy to the Commissioner General of Internal Revenue, who issued the assessment.

The Appellant objected to the assessment, which was considered and disallowed by the Commissioner General. The Appellant then appealed to the National Court against the Commissioner General’s disallowance of its objection, pursuant to s.21(1)(a) of the Stamp Duties Act. The National Court dismissed the appeal, from which this appeal is brought.

The principle grounds of appeal are the following:-

(a) His Honour erred in law in finding that the copy document of the Finance Agreement was subject to stamp duty under the Stamp Duties Act –

(b) His Honour erred in law in upholding the Assessment in stamp duty issued by the Internal Revenue Commissioner when the Copy Document was not an "instrument" within the definition contained in s.1 of the Stamp Duties Act and accordingly was not liable to duty under the Stamp Duties Act. –

(c) His Honour erred in law in upholding the Assessment of the Respondent when the Copy Document was at all times the property of the Independent State of Papua New Guinea and not liable to duty under the Stamp Duties Act.

Appellant’s Submissions

The Appellant has first submitted that the assessment by the Internal Revenue Commissioner was incorrect because the Original Agreement is not liable to duty until it is brought into the country. As the Original Agreement has not been brought into the country the Copy Agreement is not liable to duty because it is not an Instrument for the purposes of the Act by definition. As the Original Agreement was executed outside Papua New Guinea, the Stamp Duty chargeable is only payable when it is brought into the country. Reliance was placed on s.5(2) of the Stamp Duties Act, which is in the following terms:- "Stamp Duty chargeable on an Instrument is payable when the Instrument is first executed or, in the case of an Instrument executed outside of the country, when the Instrument comes into the country."

It was further submitted that, the fact that the Copy Document is brought into the country, does not make the original liable to duty. Only the Original Agreement is liable to duty if it is brought into the country. It was submitted therefore that as long as the original agreement remains outside the country it is not liable to Stamp Duty.

Secondly, it was submitted that the copy document is not an instrument within the meaning of s.1(1) of the Act. The instrument is defined as;-

(a) Docket, Note, Memorandum or any written or otherwise represented document, including a written, typed or printed document;

(b) In a case where the original of an instrument is not available for production to the Collector of Stamp Duties; –

• (i) A duplicate original thereof; or
  
• (ii) A copy of the original or the duplicate original.
  

It was submitted that because the original document is not available for production, the copy cannot be deemed to be an instrument. It was submitted that although the original document is outside of the country and the appellant is not obliged to bring it into the country, it is nevertheless available for production. It was submitted that the original of an instrument is not available for production if it is either destroyed or lost. The original of this agreement is available for production outside of the country.

The third submission made was that the Copy Document had come into the country by request of the Controller of Foreign Exchange of the Bank of Papua New Guinea and therefore the property of an agent of the State and thus is not liable to Stamp Duty.

Respondent’s submissions

The Respondent submitted that Sections 1 & 5 of the Act authorised the Commissioner to levy Stamp Duty on the copy of the Finance Agreement which came into his possession. It was submitted that the copy document of the finance agreement is sufficiently an instrument within the definition of an instrument because the original is not available for production to the Collector. It was submitted that the term "not available" is not limited to circumstances where the original is lost or destroyed. It includes any circumstance of unavailability such as in this case, where the original agreement remains outside of the country because the Appellant contends it is under no obligation to produce it. In these circumstances the Original Agreement cannot be said to be available for production to the Collector

In response to the submission that, the Copy Document was at all material times the property of the State, it was submitted that, although the Copy Document was produced to the Controller of Foreign Exchange with the Bank of Papua New Guinea, it did not belong to the State because the State was not a party to the Agreement.

Decision

We are satisfied that in these circumstances, where the Original Agreement was executed outside of the country and the parties had no intention of bringing it into the country, it cannot be said to be available for production to the Collector of Stamp Duties for assessment of Stamp Duty. In these circumstances the Original Instrument is not available for production within the meaning of s.2 of the Act. Consequently s.2 defines instrument to include a copy of the original in circumstance where the original is not available for production.

We are satisfied therefore that the copy of this Finance Agreement is an "instrument" for the purposes of the Act, and thus is liable to Stamp Duty pursuant to s.5(2) of the Act.

The appeal is therefore dismissed with costs.
______________________________________________________________
Lawyer for the Appellant : Blake Dawson Waldron

Lawyer for the Respondent : Bill N. Nouairi