Receiver of Revenue Cape v Cavanagh

• Jurisdiction: South Africa
• Judge: Coram Innes ACJ, Solomon J and J De Villiers JP
• Judgment Date: 10 September 1912
• Hearing Date: 09 September 1912
• Court: Appellate Division

Innes, A.C.J.:

On the 1st March, 1912, the respondent Cavanagh purchased from the then proprietors certain quitrent land situated at Muizenberg, in the Cape Division, with the buildings thereon, known as the Grand Hotel. He also purchased at the same time, and in terms of the Same written deed, the liquor licences and goodwill connected with the hotel, and the household furniture which it contained. The purchase price was separately fixed by the agreement in respect of each of the above items. For the hotel buildings and grounds £10,650 was to be paid; for the liquor licences and goodwill, £1,500; and for the furniture and effects, £600. Cavanagh desires to take transfer of the landed property, and the sellers are willing to give it; but the Cape Statute makes the production to the Registrar of Deeds of a revenue receipt for all dues payable upon the transaction a condition precedent to such transfer. And a dispute has arisen as to the amount of duty for which Cavanagh is liable. The Receiver of Revenue claims that it should be calculated not only upon the purchase price of the land and buildings, but also upon the £1,500 paid for the licences and goodwill. This is contested by Cavanagh, at whose instance the Cape Provincial Division has directed the Receiver to grant a receipt for the duty tendered on £10,650, as being the only amount legally

Innes, A.C.J.

claimable by the Government. And the matter comes before us on appeal from the order of MAASDORP, J.P., to that effect.

Now the Cape Act No. 5, 1884, provides (sect. 2) that duty shall be payable "upon the purchase price or value of any freehold property or property held from Government upon quitrent or other leasehold tenure sold . . . . after the taking effect of the Act." So that the only question to be decided is whether the licences and goodwill of this hotel can be considered to form portion of the quitrent property to which they relate. An affirmative reply to that inquiry is only possible upon one of two grounds: either they must at common law and from their very nature form portion of the realty; or there must be some statutory provision to the effect that for purposes of transfer duty they are to be treated as if they did. So far as the licences are concerned, the nature of a retail liquor licence (under Statutes practically identical, so far as present purposes are concerned, with the Cape Act) was considered by this Court in Fick v Ohlsson's Breweries and in Pietermaritzburg Corporation v South African Breweries...