Can The Non- Payment of Stamp Duty On A Power of Attorney Render Such A Power of Attorney Inadmissible in Evidence?

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A stamp duty is a levy/fee chargeable under the Stamp Duties Act (SDA) or any other Act.[1] It is generally charged at a flat rate or ad valorem (percentage of the transaction value). Only the government (Federal or State) shall be the only competent authority to impose, charge and collect duties.[2] Some examples of instruments that require stamp duty are Agreements: Hire purchase,[3] bill of landing,[4] bill of sale,[5] charter party,[6] conveyance on sale,[7] Lease,[8] letters of allotment and letters of renunciation,[9] letter or power of attorney for the purpose of appointing a proxy to vote at a meeting,[10]policy of insurance,[11] power of attorney (irrevocable/land related), memorandum of understanding(relating to ordinary agreements, land, joint venture etc), Deed of assignment etc.

 

Non- payment of stamp duty on a power of attorney sought to be admitted in evidence.

A party to a case may during the course of hearing of that case seek to tender through his counsel a power of attorney for different purposes. If the purpose of tendering the power of attorney is to prove title, it must be properly registered in accordance with the relevant laws.[12] On the other hand, if the purpose of tendering the power of attorney is merely to serve as evidence of payment of purchase price or of transaction, the court has held such power of attorney to be admissible in evidence.[13] Now, even where the power of attorney being sought to be tendered is to serve as evidence of transaction, there still remains the issue of whether such a power of attorney upon which stamp duty has not been paid for, can be admitted in evidence.

Generally, every instrument bearing a certificate of a commissioner that it is not chargeable with duty or that it is duly stamped, or being stamped with the amount of duty assessed and certified by the commissioner shall be admissible in evidence and available for all purposes, notwithstanding any objection relating to duty.[14] However, an instrument executed in Nigeria, or relating, wheresoever executed, to any property situate or to any matter or thing done or to be done in Nigeria, shall not, except in criminal proceedings, be given in evidence, or be available for any purpose whatever, unless it is duly stamped in accordance with the law in force in Nigeria at the time when it was first executed.[15] This means that every instrument which ought to be chargeable should not be admitted in evidence in civil proceedings except in criminal proceedings, irrespective of the purpose for which it was pleaded.

So, where an objection is raised as to the admissibility of a chargeable instrument (like a power of attorney) which no stamp duty has been paid, what should the court do in the circumstance?

Section 22 (1) of the SDA provides:

Upon the production of an instrument chargeable with any duty as evidence in any court of civil judicature in Nigeria, or before any arbitrator or referee, notice shall be taken by the Judge, magistrate, arbitrator, or referee of any omission or insufficiency of the stamps thereon, and if the instrument is one which may legally be stamped after the execution thereof, it may, on payment to the officer of the court whose duty it is to read the instrument, or to the arbitrator or referee, of the amount of the unpaid duty, and the penalty payable on stamping the same, and of a further sum of two naira, be received in evidence, saving all just exceptions on other grounds.

(2) The officer, or arbitrator, or referee receiving the duty and penalty shall give a receipt for the same, and make an entry in the proper book kept for the purpose of showing receipts of money and of the amount thereof, and shall communicate to a commissioner the name or title of the proceedings in which and of the party from whom, he received the duty and penalty, and the date and description of the instrument, and shall pay over to the Accountant -General the money so received by him for the duty and penalty.

(3) On production to the commissioner of any instrument in respect of which any duty or penalty has been paid, together with the receipt, the payment of the duty and penalty shall be denoted on the instrument.

In the case of OKUWOBI V ISHOLA (1973) 3 SC (REPRINT) 31 AT 34 PARAGRAPHS 34 TO 42 the Supreme court per Elias CJN (of blessed memory) held thus;

“We think that it was wrong of the learned Chief Magistrate to have held a document inadmissible merely on the ground of non- stamping, since the purpose of the requirement of stamping is to ensure that Government does not lose revenue thereby. The learned Chief Magistrate could have directed the document in question be duly stamped and then received it in evidence.”

The implication of the above sections of the SDA and the case of Okuwobi v Ishola is that whenever there is objection as to the non- payment of stamp duty on a chargeable document, the court need not reject the document rather, order the party tendering the document to pay the appropriate stamp duty required and any penalty applicable under the SDA for the said documents within reasonable time as the court may deem fit.

Conclusion

Unlike a power of attorney which if pleaded as evidence of transaction may be admissible in evidence even without being registered, a power of attorney upon which a stamp duty has not been charged (and paid for) will remain inadmissible unless its stamp duty is paid for or admitted upon the condition that the stamp duty & any penalty be paid.

 

Chioma Angela Okeke is a lawyer with over 15 years legal experience. She holds a B.L and an MBA. She also has an LLM in Criminal Law and Criminal Justice from the University of Sussex, UK. Chioma Okeke is a Fellow of the Institute of Chartered Mediator/Conciliator and a member of the Institute of Chartered Secretary/Administrator. She is a writer and has several published articles to her credit. Contact: cane_ogbalu@yahoo.com

[1] Stamp Duties Act Cap S8 LFN 2004 (SDA), s 2.

[2] SDA, s 4

[3] SDA, s 30

[4] SDA, s 44.

[5] SDA, s 45.

[6] SDA, s 46.

[7] SDA, s 52 -64.

[8] SDA, s 68 – 69.

[9] SDA, s 72.

[10] SDA, s 74.

[11] SDA, 84.

[12] Land Registration Act Cap. 515 LFN (Abuja) 1990, ss 2, 15, ABUBAKAR V WAZIRI (2008) 14 NWLR Part 1108 at 507 (SC).

[13] ERO V TINUBU (2012) 8 NWLR PART 1301 P 125 paras B-F; Lawani v Grillo & Ors (2018) LPELR -44912(CA).

[14] SDA, s 19

[15] SDA, s 22(4)


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