The court ruled that inability to secure financing for a purchase constitutes an 'inability' under s 57(f)(iv) of the Stamp Act, entitling a refund of stamp duty paid.

[1] The outcome of this appeal depends on the construction of s 57(f)(iii) and/ or (iv) of the Stamp Act 1949 ('the Act'). Section 57 (f)(iii) and (iv) of the Act states:

57. Allowance for spoiled stamps.

Subject to any rules which may be made under this Act and to the production of such evidence by statutory declaration or otherwise as the Collector may require, allowance shall be made by the Collector for stamps spoiled in the following cases.

(f) the stamp used for any of the following instruments.

(iii) an instrument executed by any party thereto, which has not been made use of for any purpose whatever, and which by reason of the inability or refusal of some necessary party to sign the same or to complete the transaction according to the instrument is incomplete and insufficient for the purpose for which it was intended;

(iv) an instrument executed by any party thereto, which by reason of the inability or refusal of any person to act under the same, or for want of registration within the time required by law, fails of the intended purpose or becomes void;

The proviso to s 57 of the Act is not an issue before us.

[2] We are told that so far there has been no reported case on the interpretation of this provision.

[3] Section 57 (f)(iii) and (iv) of the Act is somewhat similar to s 9(7)(c) and (d) of The Stamp Duties Management Act 1891 (UK), which provides as follows:

9. Allowance for Spoiled Stamps.

Subject to such regulations as the Commissioners may think proper to make, and to the production of such evidence by statutory declaration or otherwise as the Commissioners may require, allowance is to be made by the Commissioners for stamps spoiled in the cases hereinafter mentioned; (that is to say,)

(7) The stamp used for any of the following instruments; that is to say,

(c) An instrument executed by any party thereto which has not been made use of for any purpose whatever, and which by reason of the inability or refusal of some necessary party to sign the same or to complete the transaction according to the instrument, is incomplete and insufficient for the purpose for which it was intended:

(d) An instrument executed by any party thereto, which by reason of the refusal of any person to act under the same, or for want of enrolment or registration within the time required by law, fails of the intended purpose or becomes void:

The proviso to s 9(7) of the UK Act is irrelevant for our purpose. The obvious difference is that the phrase "by reason of the inability" which appears in s 57(f)(iv) of our Act does not appear in s 9(7)(d) of the English Act. This means that s 57(f)(iv) of the Act encompasses a wider scope than the provision in the English Act.

[4] Learned counsel for both parties could not find any English authorities on s 9(7)(c) and (d) of the U.K Act to assist this court. Their submissions are essentially based on their own interpretation of s 57(f)(iii) and (iv) of the Act and applying the principles of construction of a taxing statute.

[5] In setting out the majority view it is necessary to set out the background facts which are as follows: On 17 January 2007 the appellant entered into a sale and purchase agreement ('the agreement') with Tennessee Builders Products Sdn Bhd ('the vendor') to purchase a vacant industrial land held under HSD 109515 Lot PT 13293, Mukim Labu, Seremban, Negeri Sembilan ('the said land') at the purchase price of RM2,820,000. The appellant had on or before the execution of the