Contingent liabilities
215 Contingent liabilities
A mortgage that is used or is capable of being used (whether directly or through a chain of relationships) to recover the whole or any part of an amount contingently payable in connection with an advance—
by a guarantor or indemnifying party under a guarantee or indemnity, or
by another party under another instrument of a different kind,
is liable to duty as if the amount of the contingent liability under the guarantee, indemnity or other instrument (or, where there is more than one guarantee, indemnity or other instrument, the greatest contingent liability) were a separate advance made under the agreement, understanding or arrangement for which the mortgage is security.
In the case of a mortgage that is part of a chain of relationships referred to in subsection (1), a reference in that subsection to a contingent liability is a reference to a contingent liability limited to the amount of any advance by any party in the chain, and does not include a reference to any other kind of contingent liability.
This section does not apply if the Chief Commissioner is satisfied that there is no connection between the mortgage and any advance by any party to the arrangements.
Nothing in this section requires duty to be paid more than once in respect of an advance.
This Act’s bill:Explanatory memorandumSecond reading speech
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.