N3653

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 77 OF 2008

IN THE MATTER OF THE STAMP
DUTIES ACT CHAPTER 117

AND:

IN THE MATTER OF SECTION 48C
OF THE STAMP DUTIES ACT

AND:

JOE SEETO
Applicant

AND:

BETTY PALASO, COMMISSIONER GENERAL
INTERNAL REVENUE COMMISSION
Respondent

Waigani: Hartshorn J.
2008: 11th November
: 10th December

PRACTICE AND PROCEDURE - Application to dismiss proceeding as an abuse of process – Order 12 Rule 1 National Court Rules - Declaratory Relief –– whether declaratory relief can be sought when there is no dispute between the parties - Factors to be established – jurisdiction of Court in granting declaratory orders – s.155 (4) Constitution

PRACTICE AND PROCEDURE – proceedings brought to seek declaration on alleged misapplication of s.48C of Stamp Duties Act –No dispute as Applicant paid all assessments of stamp duty payable – No current dispute or issue between parties – orders for dismissal of proceedings by respondent granted – Order 12 Rule 1 National Court Rules

Cases cited: 

Papua New Guinea cases:

Dent v. Thomas Kavali [1981] PNGLR 488
Donigi v. The State [1991] PNGLR 376
Kapal v. Perdacher [1994] PNGLR 470
Ok Tedi Mining Ltd v. Niugini Insurance Corporation (No.2) [1988-89] PNGLR 425 
SCR No. 4 of 1980; Re Petition of Somare (No.1) [1981] PNGLR 265
National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135 

Overseas cases:

Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Limited [1921] 2 AC 438 
Ainsworth v. Criminal Justice Commission (1991-1992) 175 CLR 564
Mentha & Ors v. GE Capital Ltd & Anor (1997) 154 ALR 565

Counsel:
 
Ms. D. Doiwa, for the Applicant
Mr. S. Paisi, for the Respondent

10 December, 2008

1. HARTSHORN J: Mr. Joe Seeto applies for a declaration as to s.48C Stamp Duties Act, which concerns the splitting of transactions.

2. The Commissioner General Internal Revenue Commission applies pursuant to Order 12 Rule 1 National Court Rules, to dismiss the proceeding on the grounds that it has become obsolete and is an abuse of process. The Commissioner submits that events have overtaken the proceeding, there is no dispute between the parties and the proceeding is flawed.

3. Mr. Seeto submits that he is entitled to seek declaratory orders concerning the interpretation of s. 48C Stamp Duties Act to establish whether his business dealings constitute a single or separate transaction and whether he is liable to pay stamp duty in accordance with s. 48C Stamp Duties Act.

4. The issue is whether declaratory relief can be sought when there is no current dispute between the parties.

5. The jurisdiction of the court in granting declaratory orders is pursuant to s. 155(4) Constitution: Dent v. Thomas Kavali [1981] PNGLR 488; National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135, and the court has a wide discretion given by the words "in such circumstances that seem to them proper", Bogibada Holdings (supra); and Ok Tedi Mining Ltd v. Niugini Insurance Corporation (No.2) [1988-89] PNGLR 425.

6. In Ok Tedi Mining (supra), Kapi DCJ (as he then was) referred to the factors that are required to be established before a declaratory order can be made. These are set out in the case of Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Limited [1921] 2 AC 438 at 448. They are:

1)	There must exist a controversy between the parties.

2)	The proceedings must involve a right.

3)	The proceedings must be brought by a person who has a proper or tangible interest in obtaining the order.

4)	The controversy must be subject to the court's jurisdiction.

5)	The defendant must be a person having a proper or 	tangible interest in opposing the plaintiff's claim.

6)	The issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility.

7. In the High Court of Australia decision, Ainsworth v. Criminal Justice Commission (1991-1992) 175 CLR 564, Brennan J referred to the Russian Commercial case (supra) and said that, notwithstanding the wide discretion that exists in deciding whether a declaration should be made, it was not appropriate to grant a declaration if there was no real controversy to be determined.

8. In Donigi v. The State [1991] PNGLR 376, Brown J. held amongst others, that the power of the National Court to grant declaratory relief in respect of legislation is dependent on there being a specific problem concerning it which requires the determination of personal or proprietary rights - there is no power to declare hypothetical problems. Also, in the Federal Court of Australia, Finklestein J. in Mentha & Ors v. GE Capital Ltd & Anor (1997) 154 ALR 565 said:

What is being sought is no more than the advice of the Court that their view is correct. It is not appropriate for the court to give that advice. The proper function of the court is to determine the rights, duties and liabilities of parties when the occasion for their determination arises. Generally, that occasion will only arise when there is a dispute about those rights, duties and liabilities.

9. In this instance, it is submitted on behalf of Mr. Seeto that the proceeding was brought to seek clarification, as Mr. Seeto believes he has been previously subjected to a misapplication of section 48C. There is no dispute that Mr. Seeto has now paid all of the assessments of stamp duty payable in respect of the contracts referred to in the affidavit filed in support of the Originating Summons. There is now no outstanding issue between the parties concerning these contracts.

10. Reference was made on behalf of Mr. Seeto to the cases of SCR No. 4 of 1980; Re Petition of Somare (No.1) [1981] PNGLR 265 and Kapal v. Perdacher [1994] PNGLR 470. A passage in Re Somare (supra) was cited where the Court stated, "that it was not possible to lay down a workable definition for all cases because each case is different".

11. These cases concern amongst others, the question of standing. In my view they do not provide assistance to Mr. Seeto’s position.

12. I am satisfied that there is no current issue or dispute between the parties, or that there is any controversy existing between the parties. It is not appropriate therefore, that the declaratory relief sought be granted. This proceeding should be dismissed.

13. Consequently, the relief sought in paragraphs 1 and 2 of the respondent’s notice of motion dated 22nd September, 2008 and filed 24th September 2008, is granted.

___________________________

Pacific Legal Group: Lawyers for the Applicant 
Internal Revenue Commission: Lawyers for the Respondent