Solution 1:
Perform a ‘Save as’ of the document, instead of copy/pasting it from the browser or ‘View Source’ of the in the browser window and using that for modifying the document.

Solution 2:
If we use a different browser like Firefox, the result on the screen is correct.

Note : For examples of this behavior, please see the screen shots attached to this solution.

Background:
When you copy/paste from Internet Explorer and use it as a modifier for QuarkXPress Server, QuarkXPress Server is unable to find the spaces.