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1986
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[1986] ZASCA 80
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Commissiner for Inland Revenue v Southern Life Association Ltd. (89/86) [1986] ZASCA 80 (26 August 1986)
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter of
THE COMMISSIONER FOR INLAND REVENUE
appellant
and
THE SOUTHERN LIFE ASSOCIATION LIMITED
respondent
CORAM
: CORBETT, TRENGOVE , BOTHA, JJA, GALGUT et NESTADT, AJJA.
DATE OF HEARING: 12 May 1986
DATE OF JUDGMENT:
26 August 1986
JUDGMENT GALGUT AJA
:
This is an appeal against the judgment of
BURGER J sitting in the Cape Provincial Division. The judgment is reported, see
Southern Life Association Ltd v Commissioner
/ for
2
for Inland Revenue
1985 (2) SA 267
(C). The facts are very
fully set out at pp 268-69 of that judgment. I shall refer to it as the reported
judgment.
The issue before this Court is the same as the issue before the Court a
quo
. I will therefore set out only so much as is necessary to facilitate
the reading of this judgment and will confine myself to the
main submissions
made in this Court.
The respondent company was previously known as Anglo American Life Assurance
Co Ltd ("AAL"). "It is a registered insurer in terms
of the Insurance Act 27 of
1943 ("the Act"). When it was still named AAL respondent entered into a written
agreement with another
registered insurer, Southern Life Association ("SLA").
The agreement contained,
inter alia
, a scheme for the amalgamation of the
life insurance business of SLA and respondent. The amalgamation was to be
effected by
/ transferring
3
transferring the assets and obligations of SLA to respondent . In terms
of sec. 25(1) of the Act the Cape Provincial Division confirmed
the scheme on 26
September 1984. The Registrar of Insurance thereafter issued the certificate
required by sec. 25(14) of the Act.
I shall hereafter merely refer to sec.
25(14). In terms of the agreement SLA had to transfer to respondent shares held
by it in various
public and private companies as well as other marketable
securities as defined in sec. 1 of the Stamp Duties Act, No 77 of 1968,
and item
15 of Schedule 1 to that Act. I shall hereafter refer only to marketable
securities. A dispute arose between respondent
and appellant . The respondent
relying on sec. 25(14) contended that no stamp duty would be payable in respect
of the transfer to
it of the marketable securities. The appellant held the
opposite view. The respondent then sought a declaratory order. BURGER J upheld
respondent's contention and made the order set out on page 273 of the
report-
/ ed judgment
4
ed judgment. The appeal is against that judgment
and
order.
Section 25(14)
reads:
"If in terms of this section any business
of any insurer has been amalgamated
with
any business of any other insurer or trans
ferred to any other
insurer,
every officer
(including any Registrar of Deeds, any
Mas
ter of the Supreme Court and the Registrar of
Companies)
in charge of any office
in which
property or any mortgage or other right
is
registered in the name of or by the first-
mentioned insurer or an
appointment of or
in favour of the first-mentioned insurer was
made or a
licence was issued to or in favour
of the first-mentioned insurer, upon
pro
duction to him of a certificate in which
the registrar states that he
or the court,
as the case may be, confirmed the amalga
mation or transfer
in terms of this section
and upon production to him of the title
deed,
mortgage bond, deed, certificate, letter of
appointment,
licence or other document in
question
, shall make such endorsement
there
on and such entries in his registers or other
books as may be
necessary to effect or re
cord the transfer of the property, mort
gage,
other right, appointment or licence
in question to the amalgamated business
or
the insurer to whom any business was trans
ferred, as the case may be,
and no trans
fer
5
fer or stamp duty or registration, licence or other fees shall be payable in
respect of any endorsement or entry made as aforesaid.
"
(The underlining is mine.)
In the written heads of argument counsel for
the appellant submitted as he had done in the Court a
quo
that
the
words " every officer...in charge of any office..."
should be limited so as
to refer only to the three classes of officials named in the brackets, i.e. the
Registrar of Deeds, the Master
of the Supreme Court and the Registrar of
Companies; alternatively that the words should be taken to refer only to
officials in Government
service who exercise similar functions to the three
classes of officials named. I will refer to this submission as the basic
submission.
In support of this basic submission, viz. that
"officer" should be
interpreted as set out above, counsel
made a series of submissions which he
maintained illus
trated
6
trated that the basic submission was correct. These, are set out in (a),
(b), (c), (d), (e), (f), (g) and (h) below.
(a) At the outset of his argument in this Court he submitted that the
words
"any Master of the Supreme Court and the Registrar of
Companies"
should be ignored. He did so because the
following documents would at no time be produced for endorsement or registration
to either
of them or their respective offices, viz.
"the title deed, mortgage bond, deed, certificate, letter of appointment,
licence or other document in question".
In order to
avoid repetition I shall refer to the above documents as "the documents", or
"the document" as the context requires. I
pause to say that in this regard
counsel is correct. It is not the function of these two officials to register
the transfer of rights.
They were
/ obviously
7
obviously wrongly included. I will return to this aspect
later.
Counsel then referred to the following sections in the following
statutes:
(i) The Building Societies Act, No 24 of 1965, sec.
55
(10).
(ii) The Participation Bonds Act, No
55
of 198l
sec. 9(4). (The predecessor of this section was sec. 8 A(4) of the Participation
Bonds Act No 48 of 1964.)
(iii) The Friendly
Societies Act, No 25
of 1956, sec. 21(13) .
(iv) The
Pension Funds Act, No 24 of 1956
,
sec. 14(3).
(v) The Banks Act, No 23 of 1965, sec.
30(3).
It is not necessary, for the purpose of this
/judgment
8
judgment to detail the above sections. I only set out so much as is
necessary to understand the submissions made by counsel in this
regard.
In sec. 55(10) of the Building Societies Act it is said that when there is an
authorised amalgamation of two building societies or
the transfer of the
business of one building society to another (authorised in the sense that it is
done in terms of the formalities
laid down in that Act) then
"The officer in charge of a deeds registry or other office in which is
registered any mortgage bond or any immovable property"
shall make the necessary endorsement and entries in his registers, and no
stamp duty, transfer duty, registration fee or charges are
payable.
In the sections referred to in paras, (ii), (iii) and (iv) above, where an
authorised amalgamation or transfer of the business takes
place, the relevant
document is
/ to be
9
to be produced to:
"(t)he officer in charge of a deeds registry
in which is registered
the relevant document.
In the section referred to in para. (v) above, i.e. in the Banks Act, where
there has been an authorised amalgamation or transfer
of business,
"the Registrar of Companies, every Registrar of Deeds or Master of the
Supreme Court and every officer in charge of any office in
which is registered
any title...."
to property, is required to make the relevant endorsements and effect such
entries in his register as may be necessaryy,
Counsel then submitted that in as much as the two officials above mentioned
were wrongly included in sec. 25 (14 )
,
it is obvious that the
draughtsman had mistakenly taken the wording of the Banks Act; that he should
have taken the wording of one
of the statutes mentioned in paras. (i) to (iv)
above; that it followed
/ that
10
that it was the intention of the Legislature that only documents of the type
which are registered in a deeds registry would be exempted
from stamp and other
duties and charges; that it followed that the Registrar of Deeds was the officer
intended by sec. 25(14)-
It was then put to counsel that a Registrar of Deeds
would not at any time have to endorse a licence or make an entry in his
registers
thereanent. See in this regard the reported judgment at p 271 E.
Counsel then said that the reference to "licence" was also a mistake.
Although
this was not put to him, it seems as if this would also apply to a "letter of
appointment" and to an "other document".
It is clear that the two officials, viz, the Registrar of Companies and
Master of the Supreme Court, should not have been included.
They must have been
included
per incuriam
. This does not mean that other
/ words
11
words in the section were inserted
per incuriam
. It has often been
said that legislative enactments
"should be so construed that, if it can be prevented, no clause, sentence or
word shall be superfluous, void or insignificant".
See
Rex v Standard Tea and Coffee Co (Pty) Ltd
1951 (4) SA 412
(A) at
p 416 F
;
see also
Wellworths Bazaars Ltd v Chandler's Ltd and
Another
1947 (2) SA
37
(A) at p 43 and
Attorney General, Transvaal
v Additional Magistrate for Johannesburg
1924 AD 421
at p 436. It follows
that there is no justification for further truncating sec. 25(14). The section
must be interpreted without the
reference to the two officials. So interpreted
it certainly does not lead to any absurdity.
When sec. 25(14) was introduced into the Act the statutes in paras. (i) to
(iv) above were all on the statute book. There is no reason
to believe that the
draughtsman (and hence the Legislature) overlooked them
/ The
12
The Legislature, when enacting sec. 25(14), decided to exempt insurance
companies from transfer duty and stamp duty when land is transferred
or a
mortgage bond is ceded pursuant to an amalgamation or transfer of business. No
reason was suggested why it should not have intended
to exempt these companies
from stamp duty when marketable securities are transferred in similar
circumstances. It follows that the
submission that the Legislature intended that
the word "officer" should be restricted to mean the Registrar of Deeds or the
other
officials named in the brackets has no merit.
(b) Counsel then made submissions as to the meaning which should be given to
the word "officer" in the English
/ text
13
text and to the word "amptenaar" in the Afrikaans text which was the signed
text. He submitted that the ordinary and usual meaning
of "officer" was the type
of officer employed in Government offices; that the ordinary and usual meaning
of " amptenaar" was " iemand
in diens van die owerheid"; "staatsamptenaar". He
quoted extensively from dictionaries. Certainly the words can have the meanings
for which he contends. However, the dictionaries also give the words other
meanings. "Officer" in the
Oxford English Dictionary
is (
inter
alia
) "one who performs a duty service or function" . In the
Woordeboek
van die Afrikaanse Taal
it is said that "die gebruik van amptenaar en
beampte loop in Afrikaans sowel in die skryftaal as in die spreek-taal
deurmekaar".
It also appears from this dictionary that both "amptenaar" and
"beampte" can include an employee of a private corporation. See also
Administrateur, Transvaal v Carltonville Estates Ltd
1959 (3) SA 150
(A)
at p 158 G.
/ Plainly
14
Plainly the words can have different meanings in different contexts. In
support of his contention counsel for appellant submitted
that the word
"including" gives an indication of the meaning to be given to the word
"officer"; that the word "include" could, in
a particular context, give rise to
an exhaustive definition so that it can be equivalent to the word "means" or the
words "means
and includes"; that in other contexts it could be used to enlarge
the meaning of words; that as used in sec. 25(14) it was not used
for adding to
"officer"but for the purpose of giving it an exhaustive meaning; that "officer"
should therefore be taken to refer
only to the three classes of officials named
in the brackets; alternatively, that it should be taken to refer to officials in
Government
employ. This argument was considered by the Court a
quo
(see
the reported judgment at p 269 F to 270 J). For the reasons stated by the Court
a
quo
, this argument
/ has
15
has no merit. There is a further indication that the term "every officer" was
intended to be wider than the three officials mentioned.
It is the reference to
a licence. None of them deals with the registration of licences.
Sees- 105 and 133 (1) and (2) of the Companies Act No 61 of 1973 require a
company to keep a register of its members and to detail
therein the shares held
by each member and any changes of membership and shareholding. Sec. 110 of that
Act requires that the register
is to be kept at the company's registered office
or at the office of some other person with whom the company has arranged for the
keeping and making up of the register. It was not suggested that the words
"every officer in charge of any office" cannot apply to
the official in charge
of the register.
It follows that this submission in regard to the meaning to be given to
"every officer" cannot be
/sustained .
16
sustained.
(c) Counsel then submitted that sec. 25(14) provided
that the document merely has to be endorsed and pursuant thereto no stamp
duty is payable; that where transfer
of any property by endorsement was
permitted special provision was made in the relevant statute; that such a
provision is contained
in the Deeds Registries Act No 47 of 1937 (see sees. 44,
45 and 45: bis)' that no such special provision appears in the Companies
Act;
that on the contrary sees. 133(1) and (2) of the Companies Act require that an
instrument of transfer has to be lodged with
the office of the company when a
marketable security is transferred; that sec. 23(4) of the Stamp Duties Act
postulates that there
be such an instrument and that it is to be stamped; that
this indicates that sec. 25(14) does not refer to transfers of marketable
securities.
The answer to the submission is that sec. 25(14) was
/ added
17
added to the Act by sec. 11 of Act 99 of 1980; that it is a later statute
which provides for a special case, viz, where there has
been an amalgamation of
two insurance companies or the transfer of the business of an
insurance
company to another; that on a reading of the whole of sec. 25(14) it is clear
that in those circumstances the Legislature
intended to provide the procedures
relating to the transfer of property and rights and to provide a simple transfer
procedure and
immunity from stamp and transfer duties and other charges. I
should perhaps add that sec. 4(2) of the Stamp Duties Act specially
provides
that if any other law exempts an "instrument" from stamp duty the provisions of
the Stamp Duties Act will not apply.
I am of the view that the provisions of sec. 25(14) are clear and override
the provisions of sees. 133(1) and ( 2 ) of the Companies
Act and of sec. 23(4)
of the Stamp Duties Act. See in this regard
Harris &
/ Others
18
Others v Minister of the Interior & Another
1952 (2) SA 428
(A) at
p 459 which sets out in what circumstances a provision in a later statute will
override a provision in an earlier statute.
See also
Die Uitleg van Wette
(L.C. Steyn), 5th ed. at pp 189-190.
It follows from the above that this submission does not support the basic
submission.
(d) Counsel sought to use the fact that in private companies the articles of
association restrict the right to transfer shares - see
sec. 20(l)(a) of the
Companies Act. He submitted that if "officer" and "amptenaar" were not given the
restricted meaning for which
he contends, shares could be transferred in
contravention of the articles. Section 26(7) of the Act provides that,
inter
alia
, any shareholder likely to be affected by the amalgamation or transfer
of business, is entitled to
/ appear
19
appear and be heard. Hence the Court would insist on notice being given to a
shareholder likely to be affected by the amalgamation
or transfer. He would be
heard and his rights would be determined by the Court. If the Court thereafter
confirms the amalgamation
or transfer then, by virtue of sec. 25(11) of the Act
it becomes binding on all persons. Furthermore, it is inconceivable that the
insurance companies concerned would not take whatever action was necessary to
overcome the restrictions.
It follows that this submission does not support appellant's basic
submission.
(e) Counsel stressed that sec. 25(14) provides that "no other fees" are
payable in respect of the registration of the transfer of
the marketable
securities; that it could not have been the intention of the Legis-
/ lature
20
lature to deprive the officer of a company, charged with the duty of making
the endorsement and necessary entries in the register,
of his fees. The argument
overlooks the fact that the officer is employed by the corn-it pany and/pays
him. The insurance companies
are not in
any way responsible for his fees.
It follows that this submission has no merit.
(f)
Counsel contended that no provision is made in sec. 25(14) for exemption from
payment of stamp duties in respect of marketable
securities registered in the
name of a nominee; that this creates an anomaly. I am unable to see how this
suggested anomaly supports
the basic submission. See in this regard the reported
judgment at p 272 E. I, however, venture to say that if marketable securities
belonging to an insurance company (the nominator) are registered in the name of
a nominee
/ the
21
the necessary endorsements on the certificates and entries in the registers
of the company concerned will be made by the officer in
the employ of the
company in order to reflect that the nominator is a different insurance company.
Stamp duty would probably not
be payable. I do not, however, have to decide this
aspect .
(g) Counsel submitted that the exemption from stamp duty conferred by sec.
25(14) is in essence a tax provision and (I quote from
counsel's heads of
argument)
"If doubt persists in the interpretation of the section, there is no
justification for extending the exemption. See
Ernst v C I R
1954 (1) SA
318
(A) at 323 C-E".
Counsel then referred to exemption (h) to Item 15(3) of Schedule 1 to the
Stamp Duties Act. This specifically exempts a Pension Fund
from stamp duty when
shares are transferred pursuant to an amalgamation scheme. There
/ is
22
is no such specific provision in the Act. Therefore, so it is argued, sec.
25(14) was not intended to apply to marketable securities
belonging to an
insurance company; hence "officer" in sec. 25(14) does not mean the officer in
the employ of a company.
The answer to this submission is as follows. In the case of Pension Funds the
relevant provisions relating to transfer of property
rights upon amalgamations
are to be found in
sec. 14(3)
of the
Pension Funds Act. They
refer only to "the
officer in charge of a deeds registry". When the new Stamp Duties Act was passed
in 1968, it introduced exemption
(h), thus exempting Pension Funds from stamp
duty in the case of transfers of marketable securities also. No similar
provision was
made in the case of insurance companies because sec. 25(14) was
not yet in existence. When that section was introduced in 1980 one
composite
amendment was made to cover trans-
/fers
23
fers of all kinds of property; it was not necessary to amend the Stamp Duties
Act.
(h) The alternative submission in the written
heads of argument was that
if the words "every officer"
do not refer exclusively to the three officials
named in the
brackets, then (I quote from the heads of argument)
"the words should be taken to refer only to officials of Government offices
who exercise similar functions to the three classes of
officials named."
Counsel did not seriously urge this submission during argument before us. It
would appear to be a reliance on the
ejusdem generis
rule. In so far as
an answer to the written submission is required, it is to be found in the
reported judgment at pp 271 H to 272
B.
It will be seen from the reported judgment at
p 271 A-C that the respondent (applicant in the Court a
quo
)
/ submitted
24
submitted that the words in the brackets were probably included as a
precautionary measure because of uncertainty as to whether the
provisions in
sec. 25(14) would bind the State. That submission was repeated in this Court. I,
however, do not find it necessary
to deal with it.
In the result I am of the opinion that the Court a
quo
was correct in
holding that "including" in sec. 25(14) does not limit the meaning of the words
"every officer" as contended for by
appellant.
The appeal is dismissed with costs including the costs of two counsel.
O GALGUT,
CORBETT, JA)
TRENGOVE, JA)
BOTHA, JA)
NESTADT, AJA)