A COLLATERAL MORTGAGE

Dominion, Volume 13, Issue 302, 15 September 1920, Page 5

A COLLATERAL MORTGAGE

1 LITIGATION OVEE STAMP DUTT. Legal argument as to the assessment of stamp duty on' a mortgage given as collateral. security was heard in the Su preme Court yesterday in connection with a case stated by the Minister of Stamp Duties. The Chief Justice (Sir Kobert Stout) was on the bench, and the parties were Thomaß Mason Chambers, Bheepfarmer, of Uavelock North, appellant, and the Minister of Stamp Duties, respondent. Mr. 0. P. Skerrett, K;O., and with him Mr. M, J. Crombie, .appeared for the ftp pellant, and the Solicitor-General (Mr. WV 0. MacGregor, K. 0.), for the respondent. The. faotfl as set out were that by a memorandum of mortgage dated October 10, 1918, Woodford House, Ltd. (a boarding school for girls), mortgaged to the Publio Trustee certain land to secure an fid-" vance of £14.000. Certain ad valorem stamp duty, amounting to £35, was paid on thn score of the memorandum of mortgage By another memorandum of mortgage bearing the same dafe, the appellant executed'in favour of the Publio Trustee a sub-mortgage whereby he covenanted with the Publio Trustee that Woodford House, Ltd,, would duly pay to the Publio Trus tee all moneys secured by the mortgage e previously referred to, and for the bottei securing to the Public Trustee of payment of the moneys stated, mortgaged to the Public Trustee his estate and interest as mortgage in certain land. Tho £t4,l)(il) lent by tho Public Trustee on the secur Sty of the first memorandum of mortgage was wholly received by the mortgagor, Woodford House, Ltd., and tho appellant ilia not receive any portion thereof. Thi)' second memorandum of mortgage, when presented for stamping, was assessed with-' ad valorem duty on £14,500 in pursuanco of section 77 ■of the Finance Act, 1915 ' The appellant waß dissatisfied with tills assessment, on the grounds that in respect of its leading object the instrument was a guarantee and not a mortgage, and that the duty payable thereon was Is. Jd. in accordance with the scale of duty prescribed for a guarantee by the seventh schedule of the Finance Act, 1915, or alternatively that such mortgage was collateral or auxiliary to the mortgage first mentioned, which had been duly stamped, m r t efo^,e °n'y liabi <s to a dutv of las. fa. The Court's ruling was therefore sought as to whether the assessment 5t e S y „ A° Commissioner was correct. lhe Sollcitor-Gcneral contended that tlie second instrument was both a mortgage fih. a ?, d therefore liable to Jlj?. duty. Ho further Bubmitted faoto, the £14,000 was oni>tiujrtgages. oo Btren « th of «>° two The Court reserved its, decision.