Revenue stamps on legal instruments - To stamp or not to stamp, that is the question

The Stamp Duties Act makes provision that:

1. Every instrument, as defined and referred to in Schedule 1 of the said Act, except documents for which exemption is provided for in this Act or any other Act, shall be subject to the duties prescribed in that Schedule in respect of such instrument.
2. Every instrument, other than any debit entry, shall be written in such manner, and shall be so stamped that the stamp appears on the face of the instrument.
3. No instrument, which is required to be stamped, shall be produced or given in evidence or be made available in any court of law, with a few exceptions as provided for in the Act, if such document is not duly stamped. The court may, however, direct that such instrument should first be stamped, with paying the resultant penalties (if applicable), and then admit it to be given in evidence in court.

The question is whether documents must be stamped with revenue stamps in order to be legally valid, enforceable and be used in a court of law. The question was put to rest by the Supreme Court of Namibia during the appeal case between Denker and Ameib Rhino Sanctuary (Pty) Ltd & others (2017).

The appellant brought an application in the High Court seeking an order declaring that the transfer of his share in a Namibian-registered company, was unlawful and invalid. His application was inter alia based on the fact that the documents evidencing the share transfer were not affixed with stamp duty as required by the provisions of the Stamp Duties Act, rendering the transaction void and unenforceable.

In this case Judge Damaseb (with judges Smuts and Hoff concurring) ruled that:

‘The High Court’s approach as regards the effect of non-compliance with the Stamp Duties Act accords with the modern trend in interpreting a provision which places an obligation on a legal actor to do something. That approach is to consider if the legislative intent was to visit non-compliance with a nullity. The learned judge (Judge Ueitele) approached the matter on correct principle. He held:

I am of the view that the existence of sections 12 and 13 [of the Stamp Duties Act] is an indication that the legislature did not intend that if a document is not stamped such failure would lead to a nullity of the document. I am of the further view that the court when faced with a document which is not stamped may order that the document be stamped in accordance with the Stamp Duty Act, 1993.”

If a document is not stamped in terms of the provisions of the Stamp Duties Act it does not mean that such document is void and unenforceable.