Scottish Court of Session Decisions

By feu-contract between William Gibb, residing at Kepplestone, Aberdeen, and Francis Edmond, advocate in Aberdeen, trustee on the sequestrated estate of Sir Alexander Anderson of Blelack, knight, advocate in Aberdeen, recorded in the register of sasines and Books of Council and Session 31st January 1872, the annual feu-duty was fixed at £500, and double that amount at the entry of each heir or singular successor in the lands. The entry to the lands was fixed at the term of Whitsunday 1870. The feu-contract was stamped with the leading duty of £30, being the amount of the ad valorem duty on the sum of £500 as fixed by a schedule to the Act 17 and 18 Vict. c. 83, which was then in force, and which schedule contained this entry—“Charter, disposition, or contract containing the first original constitution of feu and ground-annual rights in Scotland (not being a lease or tack for years), in consideration of an annual sum payable in perpetuity or for any indefinite period, whether fee-farm or other rent, feu-duty, ground-annual, or otherwise, the same duties as a lease or tack for a term exceeding at a yearly rent equal to such annual sum.” That duty in cases where the annual sum exceeded £500 fixed at £3 for £50 or part of £50.

The feu-contract contained the following clause:—“And it is hereby expressly provided and declared that it shall be in the power of the said William Gibb and his foresaids at any time to redeem the said feu-duty, or any part thereof, at the rate of twenty years' purchase.; but the said William Gibb hereby binds and obliges himself and his foresaids, within five years from the said term of entry, if so required, to redeem the said feu-duty to the extent of at least £100 sterling of feu-duty at the said rate, and within ten years from the said term of entry to redeem the said feu-duty to the extent of at least another £100 of feu-duty, making together £200 of feu-duty at the said rate; which feu-duty of £500, and which conditions as to the redemption thereof to the extent of at least £200 within the respective periods above mentioned, shall be real burdens affecting the said piece of ground hereby disponed.”

In the year 1875 Mr Gibb, in implement of this clause, made payment to the City of Aberdeen Land Association, who had acquired the estate of superiority in the lands, of £2000 in redemption of the first £100 of feu-duty.

In 1880 the Aberdeen Land Association having required Mr Gibb to make payment to them as superiors of another sum of £2000 to redeem the second £100 of feu-duty, in terms of the clause of the feu-contract above quoted, Mr Gibb made payment for that purpose of £2000. In consideration thereof the Aberdeen Land Association granted the deed under which the present question arose. By this deed they discharged “not only the said William Gibb of £2000 as the redemption price of the said feu-duty, but also the feu-duty of £500 to the extent of another £100 of feu-duty, and his obligations to same extent from Whitsunday 1880, with interest, penalty, and casualties corresponding to the portion of feu-duty redeemed. Further, they discharge and declare to be disburdened to the extent foresaid of the real burden created by the feu-contract, All and Whole the lands” of which a description was given.

Mr Gibb then desired the opinion of the Commissioners of Inland Revenue as to the stamp-duty with which the discharge was chargeable.

The Act 17 and 18 Vict. c. 83, above quoted, expired on 31st December 1870. The Act 33 and 34 Vict. c. 97, which came into operation 1st January 1871, provides by section 72, sub-section (2):—“Where the consideration or any part of the consideration for a conveyance on sale consists of money payable periodically in perpetuity, or for any indefinite period not terminable with life, such conveyance is to be charged in respect of such consideration with ad valorem duty on the total amount which will or may, according to the terms of sale, be payable during the period of twenty years next after the day of the date of such instrument.”

Sub-section (4) of the same section is as follows:—“Provided that no conveyance on sale chargeable with ad valorem duty in respect of any periodical payments, and containing also provision for securing such periodical payments, is to be charged with any duty whatsoever in respect of such provision, and no separate instrument made in any such case for securing such periodical payments is to be charged with any higher duty than ten shillings.”

“Conveyance on Sale” is defined by section 70, referred to in the schedule under the head “Conveyance on Sale,” to include “every instrument and every decree or order of any court or of any commissioners whereby any property upon the sale thereof is legally and equitably transferred to or vested in the purchaser, or any other person on his behalf or by his direction.”

In the schedule to the Act there is under the head “Release” the following entry:—“Release or renunciation of any property, or of any right or interest in any property:—Upon a sale— See Conveyance on Sale. By way of security— See Mortgage, &c. In any other case, 10s.”

The Commissioners held that the instrument fell to be assessed as a conveyance on sale, and they accordingly fixed the ad valorem duty at £10, being the amount payable under the head “Conveyance on Sale” under the Act. Mr Gibb having paid this sum, took a Case for appeal.

The question for the opinion of the Court was—“Whether the said instrument is liable to be assessed and charged with the said ad valorem conveyance on sale stamp-duty, in terms of the Act 33 and 34 Vict. c. 97; or, if not, what other stamp-duty it is liable to be assessed and charged with?”

Argued for appellant—The case was ruled by that of Belch, Feb. 24, 1877, 14 Scot. Law Rep. 389, 4 R. 592. The only difference was in the appellant's favour, since he did not, as the appellant in that case had done, pay the £2000 of his own will, but under an obligation.

Argued for Inland Revenue—The question in Belch's case related to a security—a ground-annual. A feu-duty was in a different position, being a separate estate.