Wakilii

Greig and Another v Revenue Authority Kampala (Civ. App. No. 12-1938)

East African Court of Appeal · [1938] EACA 65 · 1938 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of Acting Judge (Uganda) on special case stated under section 57 of the Stamp Ordinance regarding stamp duty liability
Decision
Appeal allowed with costs to appellants

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that no stamp duty was chargeable on particulars of a contract relating to shares filed under section 43(2) of the Companies Ordinance where the underlying transaction was an allotment of shares in consideration for delivery of chattels. The transaction constituted a contract of sale within the Sale of Goods Ordinance and would have been exempt from stamp duty under item 5 of the Schedule to the Stamp Ordinance had it been reduced to writing. Costs awarded to appellants against Government given the public importance of clarifying a confused provision of law.

Outcome

Appeal allowed with costs to appellants

Facts

Messrs. Foster Bros., a partnership of four partners, delivered to Foster Bros., Ltd. (a newly incorporated company) certain plant and movable property valued at Sh. 31,640. By parol agreement, the Company agreed to allot to each partner 395.5 fully paid up shares of £1 each in full settlement of the amount owing for the plant and property. The Company filed particulars of a contract relating to shares under section 43(2) of the Companies Ordinance bearing no stamp duty. The Registrar of Companies impounded the document, claiming stamp duty of Sh. 640 was payable. The Revenue Authority maintained that had the contract been in writing it would have been a deed of exchange requiring ad valorem stamp duty. The matter was stated as a special case to the High Court under section 57 of the Stamp Ordinance. The trial judge held stamp duty was payable. The appellants appealed.

Issues

  1. Whether particulars of a contract relating to shares filed under section 43(2) of the Companies Ordinance are liable to stamp duty where the underlying transaction was an allotment of shares in consideration for delivery of chattels.
  2. Whether the exemption in item 5 of the Schedule to the Stamp Ordinance (for agreements relating to sale of goods exclusively) applies to such a transaction.
  3. Whether costs should be awarded against the Government in this case.

Orders

  • Appeal allowed.
  • Appellants to have costs of the appeal.

Rules and key headnotes

Company Law — Allotment of Shares — Consideration Other Than Cash — Stamp Duty on Particulars Filed Under Companies Ordinance
Where a company allots shares for a consideration other than cash and files particulars of the contract under section 43(2) of the Companies Ordinance, the stamp duty payable on those particulars is the same duty that would have been payable had the underlying contract been reduced to writing.
Tax Law — Stamp Duty — Exemption for Agreements Relating to Sale of Goods — Application to Share Allotment Transactions
An agreement to allot shares in consideration for the delivery of chattels constitutes a contract of sale within the meaning of the Sale of Goods Ordinance and is exempt from stamp duty under the exemption in item 5 of the Schedule to the Stamp Ordinance for agreements or memoranda relating to the sale of goods exclusively.
Statutory Interpretation — Stamp Duty Legislation — Construction of 'Exclusively' in Exemption Provisions
Where particulars filed under section 43(2) of the Companies Ordinance relate to a transaction that is either a completed sale or an agreement to sell chattels in consideration for a right to allotment of shares, the transaction relates to the sale of goods exclusively within the meaning of the exemption in item 5 of the Schedule to the Stamp Ordinance, notwithstanding that additional information about cash purchases of shares may be included in the form.
Administrative Law — Costs Against Government — Exceptional Cases of Public Importance
In exceptional cases where the public as well as the individual concerned have benefited by a decision of the Court of Appeal on a confused provision of law which intimately concerns the Crown and the subject, the subject should not be put to the hardship of not being allowed costs and the Crown should pay costs where justice requires it.

Legislation cited (12)

  • Companies Ordinance (Cap. 33, Laws of Uganda) s.43
  • Companies Ordinance (Cap. 33, Laws of Uganda) s.43(1)
  • Companies Ordinance (Cap. 33, Laws of Uganda) s.43(1)(a)
  • Companies Ordinance (Cap. 33, Laws of Uganda) s.43(1)(b)
  • Companies Ordinance (Cap. 33, Laws of Uganda) s.43(2)
  • Stamp Ordinance (Cap. 161, Laws of Uganda) Schedule item 5
  • Stamp Ordinance (Cap. 161, Laws of Uganda) Schedule item 21
  • Stamp Ordinance (Cap. 161, Laws of Uganda) Schedule item 22
  • Stamp Ordinance (Cap. 161, Laws of Uganda) s.2
  • Stamp Ordinance (Cap. 161, Laws of Uganda) s.3
  • Stamp Ordinance (Cap. 161, Laws of Uganda) s.57
  • Sale of Goods Ordinance (Cap. 157)

Cases cited (2)

  • Johnson v Rex (1904) AC 824
  • Johnson v The King (1904) AC 817

Full judgment

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Greig and Another v Revenue Authority Kampala (Civ. App. No. 12-1938) [1938] EACA 65 (1 January 1938)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.