Collector of Stamp Revenue v. Chan Yee Yin and Others
Read the full judgment text of HCA 529/1972 on BabelCite. This High Court CFI judgment.
1. By an agreement dated the 10th of October, 1970. The Standard Taxi Company agreed to sell thirty taxis to the Tokyo Taxi Company, the defendant. The agreement states that sale of the taxis shall include the benefit of the taxi licences. The price of the taxis was agreed at $7,736 and the price of the transfer of the licences was agreed at $2,220,000.
|
HCA000529/1972 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NO. 529 OF 1972 -----------------
----------------- Coram: Briggs, J. in Court Date of Judgment: 14th February, 1973 ----------------- JUDGMENT ----------------- 1. By an agreement dated the 10th of October, 1970. The Standard Taxi Company agreed to sell thirty taxis to the Tokyo Taxi Company, the defendant. The agreement states that sale of the taxis shall include the benefit of the taxi licences. The price of the taxis was agreed at $7,736 and the price of the transfer of the licences was agreed at $2,220,000. 2. This agreement was assessed by the Collector of Stamp Revenue, the plaintiff, under Section 5(1) of the Head 6 of the Schedule to the Stamp Ordinance with a 2% ad valorem duty on the price of the transfer of the licences, i.e. on $2,220,000. This cones to $44,400. The taxis themselves are exempt from duty under the Ordinance. 3. This action is brought to recover the sum of $44,400. The sole point taken by the defendant in their defence is that the above agreement is not dutiable under Section 5(1) of and Head 6 of the Schedule to the Stamp Ordinance. The defence states that the taxi licences are revocable licences and a transfer of such a licence does not fall within Head 6 of the Schedule. 4. At the trial on February 14th 1973 the defendant was absent. Mr. Turner of Crown Counsel appeared for the plaintiff and referred the Court to certain authorities and which in my view clearly show that the agreement does attract the duty which has been assessed. I therefore gave judgment to the plaintiff for the sum claimed with interest at 8% per annum and costs. 5. Section 5(1) of the Stamp Ordinance states:-
6. Head 6 of the Schedule reads as follows:
7. There is no doubt that there was a sale here. What has to be decided is whether taxi licences are "property". In my view they most dearly are. Property has been defined as:
8. A taxi licence gives an exclusive right to the holder thereof to drive a particular vehicle for hire or reward. And such a licence is transferable for valuable consideration. In the present case the transferor transferred the licences to the transferee the defendant. After the transfer the transferor retained no power of revocation of the transfer or of the licence itself. The transfer was out and out. It matters not that the Commissioner of Transport has power to revoke a licence if certain provisions of the Road Traffic Regulations are not complied with by the current holder of the licence. Any owner of property may act so as to destroy or lessen the value of his property. A man may burn down his house. Or the owner of goodwill lessen its value by misconduct. So also may the holder of a taxi licence break the law and incur forfeiture of his licence. 9. I mention this because the defence stated that because the licences are revocable a transfer is not an agreement for the sale of property. If the transfer contained a provision that the transferor could revoke the transfer in certain circumstances, that might well be so. But in the agreement before me there is no such term. 10. In interlocutory proceedings in this case it appears that that defendant would rely on the case of The River Thames Conservators v. I.R.C. (1). This case is authority for the proposition that the grant of a revocable licence is not "property". I do not see how it can assist the defendant, for it is not concerned with a sale or a transfer of anything it is concerned solely with the grant of a revocable licence, that is a licence revocable by the grantor. 11. In that case the conservator granted permission to a Pier Company to construct a jetty at Northfleet. The grant was expressed to be 'at the pleasure of the conservators' and the Company agreed to pay an annual sum for this. These terms were embodied in an instrument and the question before the court was whether stamp duty was payable on the instrument as a 'conveyance for sale', or 'an instrument whereby any property was transferred or rested in any person'. 12. The court held that the grant did not fall within either of these definitions but that it was chargeable for duty as an agreement simpliciter. If it had been a conveyance or a transfer of property the stamp duty would have been payable at a higher rate. 13. Denman J. in his judgment said this:
14. The position in the present case is vastly different the parties agreed to transfer the taxi licences for valuable consideration. There was no question of a grant, revocable or irrevocable it was a transfer, a sale: and property passed. 15. To use an analogy from another branch of the law, there is all the difference in the world between the sale or transfer of patent rights and the granting of a licence to use the patent subject to a notice of revocation by the owner of the patent rights. It is the former which is relevant here and of course it is well known that sales of patent rights do attract stamp duty. 16. There must therefore be judgment for the plaintiff for $44,400 with interest at 8% per annum from the date of judgment. The plaintiff is to have the costs.
Representation: Mr. Turner, Crown Counsel, for plaintiff Defendant absent (1) [1887] 18 Q.B.D. 279 |