018-NLR-NLR-V-12-PANDITATILLEKE-v.-THE-COMMISSIONER-OF-STAMPS.pdf
( 59 )
[Pull Bench.]1909.
February 11.
Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,
Mr. Justice Wendt, and Mr. Justice Middleton.
PAND1TAT1LLEKE v. THE COMMISSIONEROP STAMPS.(Appeal under section 38 of “ The Stamp Ordinance, 1890”)
Stamp Ordinance (No. 3 of 1890)—Lease—License—Stamp duly.
If the essential and distinguishing features of a lease are presentin any instrument, such instrument is liable to stamp duty as alease.
A PPEAL from an order of the Commissioner of Stamps under-‘i section 38 of Ordinance No. 3 of 1890 as to the stamp dutypayable on an instrument submitted to him by the appellant. Thematerial parts of the instrument are contained in the judgment ofthe Chief Justice.
A. St. V. Jayewardane, for the appellant.
Walter Pereira, K.G., S.-Q.} for the Commissioner of Stamps.
Cur. adv. milt.
February 11, 1909. Hutchcnson C.J.—
This is an appeal under section 38 of “The Stamp Ordinance,1890,” against the determination of the Commissioner of Stampsas to the duty payable on an instrument which the appellantsubmitted to him for his opinion.
The instrument is dated March 13, 1908. It is in Sinhalese, andI take from the translation which is filed with the petition of appealthe parts which-appear to me to be material: “ Contract of gemmingLease.” “ This contract of gemming lease made this 13th day of
March, 1908, betweenhereinafter called the lessor of the one
part andhereinafter called the lessees of the other part:
Witnesseth. That three-fourths of [certain lands described,] arehereby leased by the lessor to the lessees (as being two-thirds tothe .first mentioned and one-third to the second mentioned), to dig'for gems within five full years from the date hereof, subject to thefollowing conditions, and are requested on lease and taken over bythe lessees in terms of the said conditions, viz.:—
“ (1) That the lessees shall have power to dig for gems as theychoose on the soil of this share of land within the said period of fiveyears.
1909.
February 11-
HutchINson
C.J..
( 60 )
“ (2) That one-tenth of the gems so dug out, or its equivalentvalue, shall be given to the lessor for ground share, and receiptsobtained.
“ (3) That the gems so dug out shall be weighed in the presenceof both parties.
“ (5) That the lessor shall have power to build a house on thesaid premises for use for such purposes as watching the gem pits,&c.
“ (6) That at the expiration of the said period of five years, incase the lessees require, the lessor shall extend this lease and executeand grant a suitable deed therefor.”
This document was attested by the appellant as a notary. Helevied on it a duty of Rs. 2-50, treating it as an “ agreement butthe Commissioner declared his opinion that it is liable to a dutyof Rs. 10 as “ a bond not otherwise charged.” If it is a lease, theopinion of the Commissioner is right; and in my opinion it is a lease.
The fact that the parties in the document itself call it a lease is,of course, not conclusive; and the appellant contends that it ishot a lease, but only a license to dig for gems, and that it is noteven a grant of an exclusive license to the grantees, but that thegrantor may afterwards grant similar licenses to other persons towork the same land during the same period. I think that is not so.It is a lease of the land for a special purpose. If the purpose hadbeen “ to cultivate as a garden,” “ to use as a cricket field,” or forany other special purpose, it would have been equally a lease.
The appeal came first before Wood Renton J., who referred it tothe Full Court, because there were supposed to be two conflictingdecisions on documents more or less similar to this one. The firstone is 2,721, P. C. Galle, 4.471,1 in which Burnside C.J. and Dias J.held that the document there in question was not a lease; thedocument is not set out, but is said to have been a contract bywhich the grantee, in consideration of the grantor’s leave andlicense to him to enter upon the land and search for plumbago,agreed that if he discovered plumbago he would give the grantora part of the value of it. The other case is recorded in SupremeCourt Minutes, November 27, 1907, and there Wendt J. held thatan instrument substantially in the same terms as this was a lease.It is not clear that these decisions are in conflict with each other;for the first document was perhaps merely a license recoverable atwifi. But if they are in conflict, I think the second is right.
The appellant says in his petition of appeal that documents of thenature of the deed in question have been treated as “ agreements ”during a series of years, leading to the foundation of a uniformpractice throughout the Island. There is no evidence of thatpractice. ahd I doubt its existence. ….
I think the appeal should be dismissed.
1>S, <J. Min. September 1.1891.
( 61 )
Wendt J.—
The appellant contends that the instrument submitted to us isan “ agreement,” while the contention for the Crown is that it is a“ lease.” Every lease no doubt embodies an agreement betweenthe parties, but has, in addition, the distinguishing features of alease, one of which is that property of some kind is handed over bythe lessor to the lessee for his use in return for the considerationagreed upon. If these distinguishing features exist in any instru-ment it must pay stamp duty as a lease, and not as an agreement.The schedule to the Stamp Ordinance imposes on a lease the sameduty as on a bond, and the charge appropriate to an instrumentlike the present is that on a “ Bond of any kind whatever not other-wise charged in this schedule, nor expressly exempted from all stampduty.” In that case the duty is Rs. 10, and that is the sum whichby the Commissioner’s decision under appeal was said to be payableby the appellant. The instrument in question, which is in theSinhalese language, calls itself a “ contract of a gemming lease.”The grantor is called the “lessor ” and the other parties the “lessees.”An undivided share of land described as held and possessed by thelessor and another is “ hereby leased by the said lessor to the lesseesto dig for gems within full five years ; ” the lessees are empoweredto dig for gems as they chose on the land for the five years, yieldingone-tenth of the gems obtained or its value to the lessor; thelessees are empowered to build a house for the purposes of gemming,and are required to fill up the pits when exhausted; the lessor bindshimself to “ extend the lease ” if required by the lessees, and theparties bind their respective heirs, executors, administrators, andassigns. In my opinion this is a “ lease ” of the land. I seeno reason to think that my decision dated November 27, 1907,pronounced upon the constuction of a similar instrument, and broughtto our notice by Mr. Jayewardene, was wrong. Even if the decisionin the Police Court, Galle, case cited to us and said to conflict withthe decision just mentioned, were not merely obiter dictum, it isdeprived of all value as a guide in the present case by the fact thatthe terms of the instrument there construed are not before us.
I think the appeal fails.
Middleton J.—
This is an appeal from the Commissioner of Stamps under section38 of the Stamp Ordinance, No. 3 of 1890, who has held that thedocument, the subject of the appeal, is liable to the stamp dutyof Rs. 10 under Schedule B, Part I., as being a lease of property,and dutiable as a “ Bond of any kind whatever n<Jt otherwisecharged in this schedule, nor expressly exempted from all stampduty.”
The contention of the appellant is that it is dutiable in the sum 'of Rs. 2‘50 as an agreement, which does not. bear on the face of it
1909.
JPebr%tary 11.
( «2 )
1909. its value. We have been referred to Carr v. Benson.;1 P. C.,OaUe.February 11. 4,471; ~ In re Application of C. 8. Abeyaratna under section 38 ofMisdussom Ordinance No. 3 of 1890;* Limmer Aspihalte Paving Co., Ltd. v.
Commissioner of Inland Revenue;* Donogh's Indian Stamp Law,p. 135.
The Galle case relied on by Mr. Jayewardane does not set out theterms of the dooument in question, but it is clear that in the casedeoided by my brother Wendt it was a lease of property. Theproper test is the real and true meaning of the instrument whichmust be ascertained to determine the stamp duty payable (LimmerAsphalte Paving Co., Ltd. v. Commissioner of Inland Revenue).
In Stroud’s Legal Dictionary (Vol. II., p. 1,069) a lease is definedto be “a demise or letting of lands, rent, common, or any here-ditament unto another for a lesser time than he that doth let ithath in it ” (Touchstone, 266),
In my opinion here the wording of the habendum and clause 8of the contract amply indicate that the document is in fact, anexclusive letting of the lands in question for the purpose of gemmingand not a mere license to prospect for and take gems. In myopinion, therefore, the Commissioner was right in holding thedocument to be liable to a duty of Rs. 10, and I would dismiss theappeal with costs.
A ppeal dismissed.
♦
1 L. R. 3, Oh. App. 624.3 S. O. Min. November 27, 1907.
* S. C. Min. September 1, 1891.* L, R. 7, Exch. Cue. 211.