Stockbrokers yesterday argued before the Court of Appeal against a law they believe discriminates against them in favour of the banks.
Bermuda Investment Advisory Services (BIAS) challenged a ruling that stamp duty on over-the-counter stock trades can be charged against independent brokers while exempting trades on the Bermuda Stock Exchange by the banks.
BIAS, represented by lawyer Mr. Peter Martin, asserted that independent securities dealers should be exempt from stamp duty.
In court, Mr. Martin said it did not matter that the stamp duty legislation was encased in a private Act.
He said the Chief Justice, who in a Supreme Court hearing last November, ruled against BIAS, did so because he "felt it was necessary to limit the interpretation of the words of the Act, because it was a private Act''.
In that ruling, the Chief Justice dismissed BIAS' arguments against the Accountant General's interpretation of the Bermuda Stock Exchange Act 1992.
Yesterday's legal challenge is being funded by the Bermuda Association of Security Dealers, chaired by the head of BIAS, Mr. Robert Pires.
In order to challenge the Accountant General's interpretation of the Act, Mr.
Pires purchased one share in the Bank of Bermuda for $22, paying 22 cents stamp duty.
Mr. Pires then argued that if a company is listed on the Exchange, it should not matter if a trade of its shares is carried out on the Exchange or off it.
But Solicitor General Mr. Barrie Meade, representing the Accountant General, said third parties to the Stamp Duties Act could not seek benefits under it.
"The Bermuda Stock Exchange Act 1992 must be regarded as a private act,'' he said. "The preamble makes it clear that it was not a public general measure.
"If it was the intention to provide a general exemption from stamp duty, it would have been a more simple measure to amend Head 15 of the Stamp Duties Act.
"Can the promoters of a private bill confer on third parties advantages, particularly, bearing in mind the manner in which the private bill was prepared in private chambers for the benefit of the promoters -- the three local banks? "Parliament could not have expected a general exemption from stamp duties to be included there.
"The private bill was intended to benefit a limited class of person and doesn't include third parties,'' said Mr. Meade.
At the end of yesterday's session, the court said it would reserve judgment until the Court of Appeal session this summer.
