Emmott et Al v The Treasurer of the Commonwealth of the Bahamas et Al

• Jurisdiction: Bahamas
• Court: Supreme Court (Bahamas)
• Judge: Moore, J.
• Judgment Date: 12 January 2001
• Docket Number: 98 of 2000
• Date: 12 January 2001

Supreme Court

Moore, J.

98 of 2000

Emmott et al.

and

The Treasurer of the Commonwealth of the Bahamas et al.

Appearances:

Mr. Philip Dunkley and Mr. Van Gaitor for the plaintiffs.

Mr. Milton Evans for the defendants.

Revenue law - Imposition of stamp duty — Plaintiff sought inter alia, declaration of meaning of “debt or liquidated demand” as used in Stamp Act, Cap. 334, declaration that their claims were for unliquidated damages and order that plaintiffs entitled to return of sum being the difference between the sum demanded for payment of stamp duty and the sum properly exigible — Whether interest constituted liquidated damages — Whether stamp duty properly and lawfully collected by Registrar — Declaration of meaning of terms sought by plaintiffs — Finding that claims were a mixture of liquidated and unliquidated damages — Finding that stamp duty was lawfully collected in respect of certain claims — Order for return of sum claimed by plaintiff.

Moore, J.

1 The Stamp Act Ch. 334 of the Revised Statute Law of the Bahamas hereinafter the Act, appears in Title XLV under the heading of “Revenue”. It is described as an act relating to the Imposition of stamp duties. The Act was passed on the 14th May, 1925 No. 28 of 1925 and was the subject of numerous amendments including that effected by Act No. 7 of 1993, the Fiscal Measures (Miscellaneous Amendments) Act, 1993, hereinafter the 1993 Act.

2 As the plaintiffs have conceived it, the issue in the instant case, concerns the construction of section 3 and the First Schedule of the Act as amended by section 6(3) of the 1993 Act. The plaintiffs were minded to commence litigation grounded in negligence against certain defendants. But they had a foreboding about the way in which the Registrar would construe the Act as amended by the 1993 Act.

3 In a letter to the Registrar of the Supreme Court dated 18th October, 1999, counsel for the plaintiffs expressed their apprehensions in these terms:

“Our concern is that the amount stated in the specially indorsed Writ of summons may be deemed a debt or liquidated demand by the Registry. If that was to be the case, the ad valorem stamp (sic) (duty) which our client will be required to pay is substantial. Indeed, we have been advised by the Registry that the amount is $64,137.00.

In the circumstances, we wish to preserve our client's right to challenge, at a subsequent date, the basis for the assessment of the filing fee and respectfully give notice that the fee paid for the issuance of the writ will be paid by our clients under protest.”

4 At paragraph 2 page 2 of his very helpful skeleton arguments Mr. Milton Evans for the defendants described the dispute between the parties in this way.

“The issue in this matter concerns the interpretation to be placed on the words ‘debt or liquidated demand’ as used in the above mentioned Acts and whether any of the sums particularised by the plaintiffs in their Writ of Summons under the heading Particulars of Loss and Damage constitute a ‘debt or liquidated demand’ so as to attract ad valorem stamp duty at the stipulated rate.”

5 Thus, both sides of the instant controversy agree that the matter concerns the interpretation of a taxing statute and, more specifically, the interpretation of section 3 of the Act, as amended by the 1993 Act, which imposes stamp duties. The critically important provisions of the First Schedule to the Act as amended by section 6 (3) of the 1993 Act which relate to this case read as follows:

“Every original, concurrent or renewed writ of summons indorsed with a claim for a debt or liquidated demand, for an amount not exceeding $1000

$4.00

Every additional $500 or fraction thereof

$4.00

Every Statement of Claim for a debt or liquidated demand not endorsed upon any original, concurrent or renewed writ of summons previously filed in connection with the same matter, for an amount not exceeding $1000

$4.00

Every additional $500 or fraction thereof

$4.00

Every counterclaim for a debt or liquidated demand, for an amount not exceeding $1000

$4.00

Every additional $500 or fraction thereof

$4.00

Every other writ

$3.00”

6 This is what Halsbury's Laws of England Fourth Edition, hereinafter Halsbury's, page 391 para 602 says about the construction of provisions imposing stamp duty:

“In construing the statutory provisions concerning stamp duty, many of which are to be construed as one, Strict attention must be paid to the actual words used by the legislature, but the words themselves must be understood in a ‘popular’ sense, that is, the sense which persons conversant with the subject matter with which the statute is dealing would attribute to them, and, although no considerations as to what might be reasonable on the one hand, or oppressive on the other, can affect the conclusion, ambiguous words are construed in favour of the person liable to duty. formerly a liberal construction was given to exemptions but the tendency in recent years seems to be towards a stricter construction. as stamp duty is imposable upon instruments and not upon transactions, the fact that it may be possible to devise a means for effecting a transaction without resort to the instrument is no ground for straining the words of the statute in order to prevent such means of escaping liability”. (emphasis added)

7 Dealing with the matter of Fiscal and Revenue statutes, Halsbury's sets out the general principles on page 563 para 912 thus:

“The language of a statute imposing a tax, duty or charge must receive a strict construction in the sense that there is no room for any intendment, and regard must be had to the clear meaning of the words. If the Crown claims a duty under a statute, it must show that duty is imposed by clear and unambiguous words, and where the meaning of the statute is in doubt, it must be construed in favour of the subject, however much within the spirit of the law the case might otherwise appear to be; BUT A FAIR AND REASONABLE CONSTRUCTION MUST BE GIVEN TO THE LANGUAGE USED WITHOUT LEANING TO ONE SIDE OR THE OTHER. What are ‘clear words’ is to be ascertained on normal principles; the courts are not confined to a literal interpretation but should have regard to the context and scheme of the Act as a whole and its purpose. W. T. Ramsey Ltd. v. IRC [1982] A.C. 300 at 323; [1981] 1 All E.R. 865 at 871 per Lord Wilberforce. “It may on occasion be necessary to do violence to the statutory words to achieve the obvious intention of Parliament. IRC v. Plummer [1979] 3 All E.R. 775 at 783 HL, per Lord Wilberforce.

It has been emphasised that a court construing words in a taxing statute must have primary regard to the words themselves, and construe them according to their natural meaning in their context. Weithers (Inspector of Taxes) v. Nethersole [1948] 1 All E.R. 400 at 402 HL; Bates v. IRC [1968] J A.C. 483, [1967] 1 All E.R. 84, HL; Customs and Excise Comrs v. Top Ten Promotions Ltd. [1969] 3 All E.R. 39 at 90 HL, per Lord Upjohn. There is no rule admitting equitable construction of a taxing statute by consideration of its governing principle or intention, Dewar v. IRC [1935] 2 K.B. 351 at 360, HL. There is no equity about a tax: see Grosvenor Palace Estates Ltd. v. Roberts [1961] 1 All E.R. 341 at 348, and there is no taxation by analogy or by the substance of the matter. Potts' Executors v. IRC [1951] 1 All E.R. 76 HL. On the other hand, it is not open to a court to narrow the operation of a taxing statute, once its meaning has been ascertained by the application of the ordinary rules of construction, by consideration of hardship or of business convenience or the like, Leedale (Inspector of Taxes) v. Lewis [1982] 3 All E.R. 808, although the apparent width of a taxing statute may be restricted by the court on the ground that its unrestricted meaning would involve a departure from constitutional or fiscal propriety. (Emphasis added)

8 In his very persuasive skeleton arguments, Mr. Dunkley submitted that:

“It is clearly erroneous to treat the pleading of particulars of special damage in the Statement of claim as converting a claim for damages into a claim for a liquidated demand. Indeed, so to do is to impose a great injustice (never intended by Parliament) upon prospective litigants of modest means who must seek recourse to the courts in enforcing their claims. Take, for example, the victim of a car accident who has sustained serious injuries and has required extensive medical treatment for his injuries at a cost, of say, $2 million. The Rules require him to plead particulars of the medical expenses as special damage. If his claim for $2 million is treated as “a liquidated demand” for the purposes of the Stamp Act, he must pay approximately $16,000 stamp duty on the filing of his writ. The more serious his injuries, the more prohibitive is the expense of commencing litigation.”

9 The italicised words from Halsbury's in paragraph h enjoin us to approach the construction of stamp duty provisions with dispassionate detachment, unmoved by Mr. Dunkley's protestations of the calamitous hardship which might befall an impecunious prospective plaintiff whose resources are so meagre that he is unable to garner the exigible ad valorem stamp duty.

10 If it were to be clearly demonstrated that an indigent plaintiff who had a legitimate claim for a debt or liquidated demand was prevented from pursuing that claim because of a lack of means, his predicament would be a matter to be addressed by the legislature: and not by the courts adopting a hyper-liberal or overbroad interpretation in an impermissible attempt to circumvent the clear provisions of the Act and the 1993 Act.

The Plaintiff's case

11 In its Originating Summons filed on January 28, 2000 the plaintiff's sought the following relief, namely:

• “1. A declaration as to the meaning of the term “debt or liquidated demand” as used in the First Schedule of the...