[2008] UGCommC 66

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\fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 \sbasedon0 \snext16 \styrsid13651814 footer;}{\*\cs17 \additive \sbasedon10 \styrsid13651814 page number;}} {\*\latentstyles\lsdstimax156\lsdlockeddef0}{\*\rsidtbl \rsid12677\rsid1322675\rsid2121080\rsid3672679\rsid7955176\rsid8991276\rsid9438185\rsid10688393\rsid11949692\rsid13651814\rsid13699311\rsid14113711}{\*\generator Microsoft Word 11.0.5604;}{\info {\title THE REPUBLIC UGANDA }{\author jchemeri}{\operator jchemeri}{\creatim\yr2009\mo4\dy21\hr10\min28}{\revtim\yr2009\mo4\dy23\hr12\min29}{\version3}{\edmins55}{\nofpages12}{\nofwords2981}{\nofchars16996}{\nofcharsws19938}{\vern24689}} \paperw11906\paperh16838 \widowctrl\ftnbj\aenddoc\noxlattoyen\expshrtn\noultrlspc\dntblnsbdb\nospaceforul\hyphcaps0\formshade\horzdoc\dgmargin\dghspace180\dgvspace180\dghorigin1800\dgvorigin1440\dghshow1\dgvshow1 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{\insrsid13651814 \chftnsepc \par }}\sectd \linex0\endnhere\sectlinegrid360\sectdefaultcl\sectrsid2121080\sftnbj {\footer \pard\plain \s16\ql \li0\ri0\widctlpar\tqc\tx4153\tqr\tx8306\pvpara\phmrg\posxr\posy0\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid6047979 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\field{\*\fldinst {\cs17\insrsid13651814 PAGE }}{\fldrslt {\cs17\lang1024\langfe1024\noproof\insrsid8991276 11}}}{\cs17\insrsid13651814 \par }\pard \s16\ql \li0\ri360\widctlpar\tqc\tx4153\tqr\tx8306\aspalpha\aspnum\faauto\adjustright\rin360\lin0\itap0\pararsid13651814 {\insrsid13651814 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13651814 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 THE REPUBLIC UGANDA \line IN THE HIGH COURT OF UGANDA AT KAMPALA \line (COMMERCIAL COURT DIVISION) \line H }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 - }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 00- CC }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 - }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 CA }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 - }{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 170 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 - }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 2007 AND 792 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 - }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 2006 (CONSOLIDATED) \line }{\b\lang1033\langfe2057\langnp1033\insrsid13651814 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13651814 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 1. STANBIC BANK UGANDA LTD \line 2. STANDARD CHARTERED BANK UGANDA LTD \line 3. BARCLAYS BANK OF UGANDA LTD \line 4. CRANE BANK LTD \line 5. DIAMOND TRUST BANK OF UGANDA LTD \line 6. CENTENARY RURAL DEVELOPMENT BANK LTD \line 7. DFCUBANKLTD \line 8. DFCU LIMITED}{ \b\lang1033\langfe2057\langnp1033\insrsid13651814 :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::}{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 PLAINTIFFS \line }{\b\lang1033\langfe2057\langnp1033\insrsid13651814 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13651814 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 VERSUS \line }{ \b\lang1033\langfe2057\langnp1033\insrsid13651814 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 UGANDA REVENUE }{ \b\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid12677 AUTHORITY:::::::::::}{\b\lang1033\langfe2057\langnp1033\insrsid10688393 :::::::::::::::::::::::::}{\b\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid12677 DEFENDANT}{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{\b\lang1033\langfe2057\langnp1033\insrsid10688393 \par }{\b\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 BEFORE: }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 HON. }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid10688393 JUSTICE GEOFFREY KIRYAB}{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid10688393 WIRE}{\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 . \line }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 JUDGMENT }{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 This case arises from two consolidated suits involving seven Commercial Banks and one leasing company operating in Uganda on the one hand and the Uganda Revenue Authority (hereinafter called }{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93The URA\rquote ) }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 on the other. The Plaintiffs as part of their lending/leasing business receive valuation reports from their customers in respect of the land or chattels that are taken as security. When the plaintiffs lend to t heir customers, the customers then execute mortgages or debenture deeds securing the lending which deeds}{\lang1033\langfe2057\langnp1033\insrsid10688393 are assessed for stamp duty }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 at 0.5% of the value of the lending Under the Stamps (Amendment) Act No. 12 of 2002. In addition to that, other documents securing, the lending in the same transaction are assessed at a nominal stamp duty of Shs.5}{ \lang1033\langfe2057\langnp1033\insrsid10688393 ,}{\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid12677 000}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 /=. In 2006 after various audits of some of the plaintiffs, the URA asserted that stamp duty of 1% is payable in respect of the valuations reports and raised tax assessments in respect thereof under the same Act. It is the case of the plaintiffs that stamp duty was not payable on the said valuation reports at all or in the alternative if it was payable then under the law only a nominal duty of Shs.5,000/= was

payable. The URA maintain that under the law stump duty of 1% of the value shown in the valuation report was payable. At the pre trial scheduling conference the parties agreed that the dispute revolved around the interpretation of The Stamp Duty Act and t herefore no oral evidence would be called. The Parties agreed to the following issues for trial; \line }{\lang1033\langfe2057\langnp1033\insrsid10688393 \par }\pard \s15\ql \fi-720\li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10688393 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 1. }{ \lang1033\langfe2057\langnp1033\insrsid10688393 \tab }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Whether valuation reports are }{\i\lang1033\langfe2057\langnp1033\insrsid10688393 \'93i}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 nstruments\'94}{\i\lang1033\langfe2057\langnp1033\insrsid10688393 wi}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 th }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 the meaning of The Stamps Act? \line }{\lang1033\langfe2057\langnp1033\insrsid10688393 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 2. }{\lang1033\langfe2057\langnp1033\insrsid10688393 \tab }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 If so, whether }{\lang1033\langfe2057\langnp1033\insrsid10688393 the said valuation reports are \'93}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 . . }{\i\lang1033\langfe2057\langnp1033\insrsid10688393 .}{\i\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid12677 Employed}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 for completing the mortgage }{\i\lang1033\langfe2057\langnp1033\insrsid10688393\charrsid12677 transaction\'94 within}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 the meaning of S. 3 (1) of the Stamps Act. \line }{\lang1033\langfe2057\langnp1033\insrsid10688393 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 3. }{\lang1033\langfe2057\langnp1033\insrsid10688393 \tab }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 If the second issue is answered in the affirmative, whether the Stamp Duty payable on these reports under the Stamp Duty (Amendment) Act 2002 is the 5,000/= or l% of the total value. \line }{\lang1033\langfe2057\langnp1033\insrsid10688393 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 4. }{\lang1033\langfe2057\langnp1033\insrsid10688393 \tab }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Who is liable for the Stamp duty on the valuation reports? \line }{ \lang1033\langfe2057\langnp1033\insrsid10688393 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 5. }{\lang1033\langfe2057\langnp1033\insrsid10688393 \tab }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Whether there}{\lang1033\langfe2057\langnp1033\insrsid10688393 are any remedies available? \line }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Mr. Masembe Kanyerezj, Mr. John Fisher Kanyemibwa, Mr. Barnbas Tumusingize and Mr. S. Birungyi appeared for the plaintiffs while Mr. A}{\lang1033\langfe2057\langnp1033\insrsid13699311 li}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Ssekatawa and Mr. H. Harshe appeared for the Defendants. \line }{\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \fi-1440\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid13699311 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Issue No. 1. }{ \b\lang1033\langfe2057\langnp1033\insrsid13699311 \tab }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Whether valuation reports are }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid13699311 \'93instruments\'94 with}{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 in}{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid13699311 the}{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid13699311 mean}{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ing of the Stamps Act? }{ \b\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13699311 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiffs submitted that a valuation report was not an Instrument envisaged under the Stamps Act (cap 342) because it was not a document by which any right or liability is, or purports to be created, transferred, limited extinguished or recorded. He submitted that the stamps Act precisely defined an }{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93Instrument\'94 under }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Section 1 (n) as }{\i\lang1033\langfe2057\langnp1033\insrsid13699311 \'93}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 .}{\i\lang1033\langfe2057\langnp1033\insrsid13699311 .}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 .i}{\i\lang1033\langfe2057\langnp1033\insrsid13699311 ncl}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 udes every document by which any right or liability is, or purports }{\i\lang1033\langfe2057\langnp1033\insrsid13699311 to be, created, transferred, limi}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ted, extended, extinguished or recorded...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid13699311 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiffs submitted that a valuation report by a valuer does }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93no more than confirm his opin ion on the value of the Intended security...\'94 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 and therefore no liability or right is created by the said valuation report. He further submitted that an instrument as defined in the Act is one that has effect upon }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93execution\'94 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 which is not applicable to a va luation report. In this regard he referred court to sections 2 (1) (a), 2(1)(c), 20 and 21 of the Stamps Act. With regard to instruments executed in Uganda Section 2(1) (a) provides \line }{\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid13699311 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 Subject to this Act and the exemptions contained in the Schedule to this Act, the following instruments shall be chargeable with duty of the amount Indicated In that Schedule as the proper duty therefor respectively- \line }{ \i\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \fi-720\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid13699311 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 (a) }{ \i\lang1033\langfe2057\langnp1033\insrsid13699311 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Every instrument mentioned in that Schedule which, not having been previously executed by any person, i}{ \i\lang1033\langfe2057\langnp1033\insrsid13699311 s}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 executed in Uganda after the commencement of this Act and relates to any }{ \i\lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 property}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 situate, or to any matter or thing done or to be done, in }{ \i\lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 Uganda}{\i\lang1033\langfe2057\langnp1033\insrsid13699311 .\'94}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \lquote \line }{ \lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13699311 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 He also referred court to }{ \lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 Halsburys}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Laws of England 4th Edition vol. 44 (1) }{\lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 Para}{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 1010 where the learned authors state \line }{\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid13699311 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 Stamp duty is chargeable on Instruments and not transactions. The liability of an instrument to stamp duty arises at the moment at which it Is executed and depen}{\i\lang1033\langfe2057\langnp1033\insrsid13699311 ds on the law in force and the circumst}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ances which exist at that time, the character of the Instrument must be }{\i\lang1033\langfe2057\langnp1033\insrsid13699311\charrsid12677 ascertained}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 by reference to its legal effect when it is executed. The f/ability of an instrument to duty is not determined as at the time when the Instrument is presented for stamping.}{ \i\lang1033\langfe2057\langnp1033\insrsid13699311 .}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 . until execution is complete no duty attaches...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid13699311 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiffs submitted that a valuer does not in effect execute his report by signing it. \line }{\lang1033\langfe2057\langnp1033\insrsid13699311 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the defendant on the other hand submitted that a valuation report is an instrument by virtue of section 2 (1) because it incl uded as instrument No. 8 in the schedule to the Stamps Act as amended in 2002. He submitted that section 1(n) of the Stamps Act uses the word }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93Includes\'94 }{ \lang1033\langfe2057\langnp1033\insrsid7955176 with reference to a }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 valuation report. In this respect he referred court to the learned author }{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Alison Russell K. C. }{\lang1033\langfe2057\langnp1033\insrsid7955176 in his book }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93Legislative Drafting\'94 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid7955176 4}{\lang1033\langfe2057\super\langnp1033\insrsid11949692\charrsid7955176 t}{\lang1033\langfe2057\super\langnp1033\insrsid7955176\charrsid7955176 h}{ \i\lang1033\langfe2057\langnp1033\insrsid7955176 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Edition page 40 where he writes \line }{\lang1033\langfe2057\langnp1033\insrsid7955176 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7955176 {\i\lang1033\langfe2057\langnp1033\insrsid7955176 \'93The expression \'93incl}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 udes\'94 is extensive, it means firstly what it would ordinarily mean and also something else which }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 it}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 does not ordinarily mean, bu}{\i\lang1033\langfe2057\langnp1033\insrsid14113711 t which for convenience is declared to be incl}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 uded in it.\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14113711 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 He further referred me to another author }{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Francis Bennion }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 in his book }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \'93}{ \i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 statutory}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Interpretation}{ \i\ul\lang1033\langfe2057\langnp1033\insrsid14113711 \'94 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 at page 568 to 569 where he writes \line }{\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid14113711 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 The schedule is an extension of the section which induces it. Material is put into a schedule because it is too lengthy or detailed to be conveniently accommodated in a section... The schedule is often used to hive off provisions which are too long or detailed to be put in the body of the Act.\'94 \line }{ \i\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14113711 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the defendant submitted that the schedule and the inducing section should be construed as one. \line He further submitted that a valuation report creates a right or purports to create a right by stipulating t he owner of the property and how much his or her property is worth. In support of this argument counsel for the defendant submitted that in the sale of a mortgaged property the mortgagor would ordinarily be entitled to residue value of a sale which would be determined by reference to the valuation report. \line \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I have had the opportunity to peruse the submissions of both counsel on this issue. The issue is largely one of definition. In other words is a valuation report an instrument under the Jaw that attrac ts stamp duty or not? Section 1 (n) of the Stamp Duty Act (cap 342) defines an instrument as including any }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93document by which any right or liability }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 /s, }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 or purports to be created, transferred, limited extended extinguished or recorded.. \'93The key words in t}{ \i\lang1033\langfe2057\langnp1033\insrsid14113711 hat section are\'94..}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 .}{\lang1033\langfe2057\langnp1033\insrsid14113711 }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 any}{ \lang1033\langfe2057\langnp1033\insrsid14113711 }{\i\ul\lang1033\langfe2057\langnp1033\insrsid14113711 right or liabili}{\i\ul\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 ty}{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \'85\'94 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 unfortunately both counsel did not address court sufficiently as to these key words. According to Osborn\rquote s Law Dictionary sixth edition a right in part is defined as \line }{ \lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid14113711 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 ... An interest recognised and protected by the law, respect for which is a duty and disregard of which is a wrong... }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 rights}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 are }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 perfect}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 and }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 Imperfect}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ; positive and negative; real and personal; }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 proprietary}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 and personal; principal and accessory; and legal and equitable...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14113711 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 On the other hand liability is defined as \line }{ \lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid14113711 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 subjection to legal obligation; or the obligation itself }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ... }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 liability is civil}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 or criminal according to}{\i\lang1033\langfe2057\langnp1033\insrsid14113711 whether it is enforced by the ci}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 vil or criminal }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 court, a contingent liability is}{\i\lang1033\langfe2057\langnp1033\insrsid14113711 a future unascertained}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 obligation}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 To my mind a valuation report is an expert\rquote s}{ \lang1033\langfe2057\langnp1033\insrsid14113711 opinion (i.e. that of valuler/}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 surveyor) as to the market or forced sale price of a security being offered by a borrower to a lender or other person, in this regard I do agree with counsel for the plaintiff that in the ordinary sen se of understanding a valuation report it cannot be said to either create a right or a liability. A}{\lang1033\langfe2057\langnp1033\insrsid14113711 valuation report is just a }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 professional opinion that cannot sit comfortably within the ordinary meaning of an instrument in section 1(n) of The Stamp A ct. It cannot as Counsel for the defendant has submitted simply create a right or a liability by providing a guide as to how much money a bank or financial institution is willing to give a potential client. Indeed the schedule to The Stamps Act (cap 342 R evised edition 2000) does not even refer to a valuation report. The situation however is different when The Stamps Act was amended in 2002. The amendment of 2002 in its schedule has an item number 8 which provides for \line }{ \lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid14113711 {\i\lang1033\langfe2057\langnp1033\insrsid14113711 \'93}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 8. Appraisement or valuation made oth}{\i\lang1033\langfe2057\langnp1033\insrsid14113711 erwis}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 e than other an order of }{ \i\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 court}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 of the total value...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14113711 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 It further appears to me that this dispute arises from this change in the law. The schedule in section 2 (1) (a) to the Act was changed to include valuation reports. In that regard I agree with the authorities cited to me on legislative drafting by counsel for the defendant. To get a proper understanding of what the legislature wanted a instrument to mean one has to read sections 1 (n) and 2 of the Stamps Act as amended together. As the learned aut hor Sir Alison Russell put it the use of the term }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93includes\'94 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 is extensive and will cover what the expression would ordinarily mean and something else which it does not ordinarily mean. The schedule is just an extension of the section that induces it and is used to provide detail to the said section as a matter of drafting convenience. In this case a valuation report by its ordinary meaning would not create a right or liability however by reason of the schedule to the amended Act of 2002 it is declared to be an instrument for }{\lang1033\langfe2057\langnp1033\insrsid14113711 purposes of The Stamps Act. \line }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I therefore answer issue number one in the affirmative that valuation reports are instruments within the meaning of The Stamps Act as amended in 2002. \line }{\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \fi-1440\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid14113711 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Issue No. 2. }{ \b\lang1033\langfe2057\langnp1033\insrsid14113711 \tab }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Whether the said valuation }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid14113711 reports}{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 are }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93employed for completing the }{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid14113711\charrsid12677 mortgage}{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 transaction\'94 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 within the meaning of S. 3 (1}{\b\ul\lang1033\langfe2057\langnp1033\insrsid3672679 )}{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 of The Stamps }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid14113711 Act?}{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{\lang1033\langfe2057\langnp1033\insrsid14113711 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14113711 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiff submitted that valuation reports are not used in completing a mortgage transaction within the meaning of Section 3 (1) of the Stam ps Act. He submitted that valuation reports are commissioned before any loan agreement is concluded between the parties and any security deeds are drawn. \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the defendant on the other hand submitted that a valuation report, just like a mortgage d eed is a instrument employed in completing a mortgage transaction. This is because both a prerequisite for the consideration and grant of a Credit facility. \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I have considered both these submissions and the law. Looking at Section 3 (1) of The Stamps Act i t appears to me that the significance of this issue is how to determine what rate of stamp duty applies. The provision reads \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid3672679 {\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93Where, In the case of any sale, }{ \i\lang1033\langfe2057\langnp1033\insrsid3672679\charrsid12677 mortgage}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 or settlement, several instruments are employed for completing the transaction, the prin cipal instrument only shall be chargeable with the duty prescribed In the schedule to this for the conveyance, mortgage or settlement and each of the other instruments shall be chargeable with a duty of two shillings instead of the duty prescribed in that schedule...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I find that both parties may have missed the true significance of the above section. It is not about any instrument employed for completing the transaction but rather the }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \'93}{ \i\lang1033\langfe2057\langnp1033\insrsid3672679\charrsid12677 principal}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 instrument\'94 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 that is so employed. Section 3 (2) provides that it is the parties themselves to determine what the principal instrument shall be. It is that instrument so chosen by the parties that shall attract the highest duty so chargeable. \line }{ \lang1033\langfe2057\langnp1033\insrsid3672679 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 It would be incredible to my mind for the parties to choose the valua tion report as the principal instrument for completing the mortgage. Indeed this is not the banking practice as I know it to be. That being the case and in line with my finding in issue number one a valuation report will have to fall in the category of }{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93ot}{\i\lang1033\langfe2057\langnp1033\insrsid3672679 her }{\i\lang1033\langfe2057\langnp1033\insrsid3672679\charrsid12677 instruments\'94 }{ \lang1033\langfe2057\langnp1033\insrsid3672679\charrsid3672679 for}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 purposes of Section 3 of The Stamps Act and therefore cannot attract the highest duty chargeable. That both answers and clarifies the second issue. \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \fi-1440\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid3672679 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Issue No. 3. }{ \b\lang1033\langfe2057\langnp1033\insrsid3672679 \tab }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Whether the }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 stamp duty}{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid3672679 p}{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 avable on these }{ \b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 reports}{\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 under The Stamps }{ \b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 Act}{\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 (Amendment Act, 2002 is }{ \b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 Shs.5000/}{\b\ul\lang1033\langfe2057\langnp1033\insrsid3672679 =}{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{ \b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 or 1% of the total value? }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{\b\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiffs submitted that item 8 to the schedule of The Stamps Act was not clear as it provided for two rates the first being Shs.5000/= and the second being 1% of the total value whic h resulted into ambiguity. He further submitted that as a rule of }{\lang1033\langfe2057\langnp1033\insrsid3672679\charrsid12677 statutory}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 interpretati}{ \lang1033\langfe2057\langnp1033\insrsid3672679 on this ambiguity should be }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 resolved in favour the tax payer. In this regard he referred me to the learned authors of }{ \ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Craies on Legislation }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 18}{\lang1033\langfe2057\super\langnp1033\insrsid11949692\charrsid3672679 th}{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Edition Para 1 6 12 pages 54 and 55. He also referred me to Halsburys Laws of England vol. 44 (1) Para}{ \lang1033\langfe2057\langnp1033\insrsid3672679 1009 where later ali}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 a it is written \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \lquote }{ \lang1033\langfe2057\langnp1033\insrsid3672679 \'85}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ambiguous words are construed in favour of the person liable to the duty. \'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the plaintiff Concluded that between which duty of 5,000/= and 1% is applicable the answer must be in favour of the taxpayer; in other words Shs.5,000/=. Counsel for the defendant acknowledged that there was an error on face of law in that two stamp duties were attached to Instrument No. 8 in the s chedule to the Act. He further submitted that the old legal maxim that in tax statutes ambiguity of language should be construed in favour of the tax payer had been over taken by a modern approach to interpreting tax statutes. In support of his submission counsel for the defendant referred me to several authorities. \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 The first set of authorities come from Canada. The first case is \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid3672679 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Quebec (communaute urba}{ \b\lang1033\langfe2057\langnp1033\insrsid3672679 ne) V Notre Dame De Bonsecours }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 [1994] 3 S. C. R. 3. \line }{\b\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 The court in that case refers to what it called the }{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93teleological\'94 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 approach to interpreting tax legislation. Under this approach a legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it and that the purpose must be identified in light of the context of the statute, }{\lang1033\langfe2057\langnp1033\insrsid3672679 its }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 objective and legislative intent. The teleological approach will favour the taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions. The second case is \line }{ \lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 The Queen V Golden [1986] 1 S. R. C. 209 \line }{ \b\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Which is an authority for the proposition that law is not confined to }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 a }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 literal and virtually meaningless interpretation of the Act especially where taxation, serves many purposes in addition to the old and traditional object of raising the cost of government from a }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \'93 somewhat unenthusiastic public.\'94}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I was also referred to the case of \line }{\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Stock V Frank (Tipton) Ltd [1978] }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 1 }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 All E. R. 984 (HL) \line }{\b\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Where it was held that \line }{ \lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid3672679 {\i\lang1033\langfe2057\langnp1033\insrsid3672679 \'93A}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 court is justified In departing from the plain words of a statute when it is satisfied that there is a dear anomaly, Parliament could not have envisaged such an anomaly, the anomaly can be overcome without detriment to the legislative objective and the language of the statute is open to modification required to overcome the anomaly...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3672679 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3672679 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 The defendant therefore contends that the correct stamp duty payable is 1% }{\lang1033\langfe2057\langnp1033\insrsid3672679 o}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid3672679 f}{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 the total valu}{\lang1033\langfe2057\langnp1033\insrsid8991276 e of the valuation report. \line }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I have had a look at the schedule of The Stamps Act as amended in 2002. There is little doubt that by pr oviding two duties for the same item there was an error. This makes the law unclear and ambiguous. I agree with counsel for the plaintiff that the law is fairly settled that the ambiguity should be }{ \lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 construed}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 in favour of the tax payer. As to the Canadian }{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \'93 teleological }{\i\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 approach\'94 }{\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid8991276 to}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 the interpretation of tax legislation, I am unable to see how it can displace this rule in these circumstances. There is clear doubt as to which of the two duties should apply. Furthermore the Court is not able to remedy this anoma ly by using ordinary rules of interpretation of statutes. This part of the schedule is a real mess considering that valuations reports are a new addition to the law and yet the rate/tariff of duty remains unclear. Even if }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid8991276 I}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 have got the teleological approa ch wrong I find that it is only of persuasive authority and not binding on this court. Court cannot be expected to choose between one of two duties, to be right duty to pay that is for the legislature to clarify. \line }{ \lang1033\langfe2057\langnp1033\insrsid8991276 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 As it is I find that as a result of this ambiguity that the correct stamp to be paid is Shs.5,000/= and not 1% of the total value of the valuation report. \line }{ \lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \fi-1440\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid8991276 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Issue No. 4. }{ \b\lang1033\langfe2057\langnp1033\insrsid8991276 \tab }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Who is liable for the }{\b\ul\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 Payment}{ \b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 of }{\b\ul\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 stamp}{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 duty on the valuation }{ \b\ul\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 reports}{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 ? }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{ \b\lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8991276 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the Plaintiffs in his written submissions appears to have mixed up the issue of who should pay for the valuation reports with who should pay for the mortgages and concluded based on section 36 (a) (viii) that}{ \lang1033\langfe2057\langnp1033\insrsid8991276 it should be the borrower. \line }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Counsel for the defendant also appears to have made the same mistake. However counsel for the defendant in an alternative argument submitted that since the plaintiffs negligently and or deliberately failed to disclose the valuation reports and to collect stamp duty on them and remit the duty to the defendant then it renders the plaintiffs liable for the said duty. \line }{\lang1033\langfe2057\langnp1033\insrsid8991276 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 As it is the amendment of The Stamps Act in 2002 did not also amend Section 36 to provide who should pay this new stamp duty relating to valuation reports. I suppose that is where the case of }{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Stock V Frank Jones }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 (supra) becomes relevant. The amendment of the Stamps Act 2002 only amended the schedule to the Act without amending other provisions of the Act and in particular section 36 of the Act. This is clearly an anomaly which Parliament may not have envis aged and can be overcome without detriment to the legislative objective by saying that the Shs.5,000/}{\lang1033\langfe2057\langnp1033\insrsid8991276 =}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 stamp duty should be paid by the borrower in much the same way that he pays for the mortgage under section 36 of the Act. \line }{\lang1033\langfe2057\langnp1033\insrsid8991276 \par }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Issue No. 5. }{\b\ul\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Remedies. }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \line }{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Most of the remedies have been dealt with in the body of the judgment. What remains however is what to do with valuation reports that have not been stamped as a result of the statutory ambiguity since 2002? It could well be that even some of the financial facili ties given on the basis of some of the said valuation reports have already been paid back at this time. I find that that this anomaly should not be visited on the plaintiffs or their c}{\lang1033\langfe2057\langnp1033\insrsid8991276 lients the borrowers as it }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 is not their fault that the law was unclear at the time. I am fortified in this finding by the words of }{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Lord Simonds }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 in the case of \line }{\lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8991276 {\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Russell }{ \b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid8991276 V Scott}{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 }{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 [1948] 2 All ER. 1 at page 2 \line }{ \b\lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8991276 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 When he stated \line }{ \lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid8991276 {\i\lang1033\langfe2057\langnp1033\insrsid8991276 \'93M}{ \i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 y Lords, there is a maxim of income tax law which, though it may sometimes be over stressed, yet o ught not to be forgotten. It is that the subject is not to be taxed unless the words of the taxing statue }{\i\lang1033\langfe2057\langnp1033\insrsid8991276\charrsid12677 unambiguously}{\i\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 impose the tax on him. It is necessary that this maxim should on occasion be reasserted and this is such an occasion...\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid8991276 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8991276 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 I believe that this maxim is equally applicable to stamp duty and to this case. \line The best that the URA can do now is to on the basis of this decision is to now \line insist hence forth that valuation reports should attract a stamp duty of \line Shs.5,000/=. Any other figure will require a further amendment of the Stamps \line Act. \line }{\lang1033\langfe2057\langnp1033\insrsid8991276 \par }{\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Since the prayers in this case were largely declaratory in nature and some declarations have gone in favour of the Plaintiffs while others have gone in favour of the Defendants I order that each party bear their own costs. \line }{ \lang1033\langfe2057\langnp1033\insrsid8991276 \par }{\b\lang1033\langfe2057\langnp1033\insrsid8991276 Justice Geoffrey}{\b\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 Kiryabwire \line JUDGE \line Date: }{\b\lang1033\langfe2057\langnp1033\insrsid8991276 4/12/08}{ \lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12677 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\lang1033\langfe2057\langnp1033\insrsid11949692\charrsid12677 \par }{\insrsid9438185\charrsid12677 \par }}