705-707 Hay Street Pty Ltd and Commissioner of State Revenue - [2016] WASAT 140

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

ACT: DUTIES ACT 2008 (WA)
TAXATION ADMINISTRATION ACT 2003 (WA)

CITATION: 705-707 HAY STREET PTY LTD and COMMISSIONER OF STATE REVENUE [2016] WASAT 140

MEMBER: JUDGE T SHARP (DEPUTY PRESIDENT)

HEARD: 20 SEPTEMBER 2016

DELIVERED : 12 DECEMBER 2016

FILE NO/S: DR 46 of 2016

BETWEEN: 705-707 HAY STREET PTY LTD
Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent

Catchwords:

Duty Transfer of land Transfer duty Aggregation Whether transactions should be aggregated Purchase of different undivided interests in a single property Several vendors Whether transactions should be aggregated

Legislation:

Duties Act 1997 (NSW), s 25(1)
Duties Act 2000 (Vic), s 24
Duties Act 2008 (WA), s 10, s 11, s 15, s 37
Duties Bill 2007 (WA)
Interpretation Act 1984 (WA), s 19
Stamp Act 1921 (WA), s 75AF
Stamp Duties Act 1923 (SA)
State Administrative Tribunal Act 2004 (WA), s 17, s 27, s 29
Taxation Administration Act 2003 (WA), s 40, s 40(1)

Result:

Commissioner's decision to aggregate dutiable transactions affirmed

Summary of Tribunal's decision:

The property about which this proceeding is concerned is a building at 705707 Hay Street Perth. It was previously owned by a number of parties, all holding shares in the whole property as tenants in common. Accordingly, each owner had an interest in the whole of the property to the extent of their particular undivided shares.
Two of the existing owners, Pullington Investments Pty Ltd and Cobalt Nominees Pty Ltd, decided to acquire the undivided shares in the property belonging to the other owners. They wrote to each of the other owners, asking whether they would be interested in granting an option to sell their particular shares.
The applicant, a company owned by both of them, was the entity which was to make those acquisitions.
Contracts of sale and purchase were subsequently entered into with all of the owners other than Pullington and Cobalt. Some of the contracts came about through the exercise by the applicant of options to purchase granted by some of the owners, other contracts were separately negotiated.
The Commissioner of State Revenue considered that each of these transactions together gave effect to or arose from what she regarded as substantially one arrangement, namely a decision of Pullington and Cobalt to acquire the other shares in the property. Accordingly, the Commissioner aggregated the transactions under the Duties Act 2008 (WA) and applied duty as if they were a single transaction.
The applicant, 705707 Hay Street Pty Ltd, objected to the Commissioner's assessment. It argued that the various transactions were all separately negotiated, that there was no interdependence between the contracts and that there was no suggestion of 'contract splitting' for tax purposes or any falsity or deception on the part of the purchaser.
The Commissioner disallowed the objection and the applicant applied to the Tribunal for a review of that decision.
The Tribunal considered the facts and circumstances of the several transactions. The Tribunal concluded that the applicant had not satisfied the Tribunal that the transactions together did not form, evidence, give effect to or arise from what is, substantially one arrangement.
The Tribunal accordingly affirmed the Commissioner's decision.

Category: B

Representation:

Counsel:

Applicant: Mr MJ McPhee
Respondent: Ms R Panetta

Solicitors:

Applicant: MJ McPhee Barrister & Solicitor
Respondent: State Solicitor's Office

Case(s) referred to in decision(s):

AttorneyGeneral v Cohen (1937) 1 All ER 27
Baldey v Parker (1823) 2 B & C 37
Casamajor v Strode (1834) 2 My & K 706
Charles Lloyd Property Group Pty Ltd v Commissioner of State Revenue (2011) 84 ATR 775
Chief Commissioner of State Revenue and Pacific General Securities Ltd (2004) 58 ATR 17
Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211
Commissioner of State Revenue v Landrow Properties Pty Ltd (2010) 79 ATR 800
Commissioner of the Australian Federal Police v Courtenay Investments Ltd [No 2] [2014] WASC 55
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257
Federal Commissioner of Taxation v Newton (1957) 96 CLR 577
Holliday v Lockwood [1917] 2 Ch 47
Jeffrey v Commissioner of Stamps (1980) 23 SASR 398
Old Reynella Village Pty Ltd v Commissioner of Stamps (SA) (1989) 51 SASR 378
Re Brianco Nominees Pty Ltd and Commissioner of State Revenue (2008) 73 ATR 67
Re Chief Commissioner of State Revenue and Pacific General Securities Ltd (No 2) (2005) 63 ATR 127
Re Grafton and Commissioner of State Revenue (2011) 85 ATR 526
Re Khoury and Chief Commissioner of State Revenue (2010) 78 ATR 81

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

This matter concerns the assessment of duty in relation to various transactions relating to the acquisition of Lot 5 on Diagram 3435, together with the building known as and situated at 705 to 707 Hay Street, Perth (the property). In May 2015, immediately prior to any of the transactions the property was owned by a number of parties as tenants in common. Each of those parties owned a specified number of undivided 720^th shares.
I will set out in table form later in these reasons the names of the then owners and their respective shares in the ownership of the property.
Of the total number of owners, two are companies associated with the applicant, being respectively Pullington Investments Pty Ltd (Pullington) and Cobalt Nominees Pty Ltd (Cobalt).
Through a number of transactions which settled between 15 May 2015 and 10 July 2015, the applicant purchased all of the undivided shares in the property other than those belonging to Pullington and Cobalt. In all cases, each owner was invited to grant an option in favour of the applicant to purchase that owner's relevant share. In the majority of cases, the purchase of undivided shares was completed by the exercise of the relevant option. In other cases, however, where the relevant owner declined to grant an option, the purchase of undivided shares was achieved by negotiating the purchase terms through a contract of sale.
The relevant option deeds and contracts for sale were lodged with the respondent (Commissioner) for assessment of duty. The documents were lodged with the Commissioner's office in four groups on four separate days. On receipt of the first set of documents, the Commissioner made assessments of duty on those documents. However, when the further documents were lodged, the Commissioner then conducted certain investigations and issued reassessments of duty, aggregating all the relevant transactions pursuant to s 37 of the Duties Act 2008 (WA) (Duties Act).
In September 2015, the applicant's solicitor lodged an objection to the reassessments. The ground for the objection was that 'all of the transactions, save for three groups which need special attention, were single dutiable transactions and not "substantially one transaction", and that in the circumstances of the case, s 37 of the Duties Act had no application …'.
The Commissioner disallowed the objection and the applicant applied to the Tribunal under s 40(1) of the Taxation Administration Act 2003 (WA) (TA Act) seeking review of the Commissioner's decision on the objection.
The matter proceeded to a final hearing before me on 20 September 2016, at the close of which I reserved my decision in this matter. This is my decision and the reasons for it.

Materials before the Tribunal

The applicant filed its application on 17 February 2016.
The Commissioner's statement of issues, facts and contentions and the Commissioner's bundle of documents, the latter accepted and relied upon by the applicant, were filed on 1 July 2016 (respectively, Commissioner's statement and Commissioner's bundle).
The applicant's statement of issues, facts and contentions was filed on 2 September 2016 (respectively, applicant's statement).
The Commissioner also filed a reply to the applicant's statement, dated 16 September 2016 (Commissioner's reply).

Facts

The facts of this matter as set out in the Commissioner's statement are agreed by the applicant, save for one exception, which I will note below.

The property

The building included in the property is a three level older style circular 1930 building of brick and iron construction, comprising a basement, ground and first floor situated in the Hay Street Mall in Perth.
As at 22 January 2015, the ground floor and first floor were tenanted by Dymocks Bookstore and the basement was tenanted by a retailer trading as 'Off Ya Tree'.
As at 22 January 2015, the market value of the property was reported to be $12,500,000.

The owners

Prior to the relevant transactions, the ownership of the property was as follows:

Certificate of Title	Registered Proprietors	Number of undivided shares	Interest
1.	2000/95	Ruth Margaret Barrett	36	36
2.	2000/696	Mary Jeanette Marshall	36	36
3.	2000/697	Nora May McWhinney	36	36
4.	2095/12	Colin Arnold Marshall	10	10
5.	2095/24 2095/24	George Edward Bernard Barrett Ruth Margaret Barrett	30	15 15
6.	2102/991	Ruth Margaret Barrett	10	10
7.	2103/103	Colin Arnold Marshall T/F The Marshall Family Super Fund	20	20
8.	2103/107	George Edward Bernard Barrett	10	10
9.	2114/603	Gwenyth Bailey	40	40
10.	2114/605	John Wesley Butler and David Ventress Wedderburn As Executors of the estate of Hazel Elizabeth Kenny	40	40
11.	2114/607	Nora May McWhinney	3	3
12.	2132/882 2132/882	Cobalt Nominees P/L Pullington Investments P/L	6	3 3
13.	2221/898	Mary Jeanette Marshall	10	10
14.	2224/895	George Edward Bernard Barrett	13	13
15.	2224/896	David Ventress Wedderburn	42	42
16.	2227/171 2227/171 2227/171	Carolyn Jan Guida Rod Kenneth Budge Jacquelyn Kaye Boyle	45	15 15 15
17.	2227/172	John William Caldow	45	45
18.	2730/489	Sandra Marjory Gatti	36	36
19.	2730/490 2730/490	William Kimberley Routledge Cobalt Nominees P/L	72	36 36
20.	2740/502 2740/502 2740/502	William Kimberley Routledge Cobalt Nominees P/L Pullington Investments P/L	52	8 8 36
21.	2740/504 2740/504	William Kimberley Routledge Cobalt Nominees P/L	40	20 20
22.	2740/506 2740/506	William Kimberley Routledge Cobalt Nominees P/L	40	20 20
23.	2740/507	Sandra Marjory Gatti	48	48
Total Interests	720	720

The vendors

The vendors in this matter were all of the registered proprietors listed above, other than Pullington and Cobalt.

The purchaser

The purchaser is the applicant. The applicant was registered as a company on 21 April 2015. The directors of the applicant are Mr Wade Stewart Routledge and Mr Geoffrey Lionel Holman. The applicant is wholly owned by Pullington and Cobalt, each holding 50% of the issued shares in the applicant.
Prior to the relevant transactions, Pullington and Cobalt held 39 undivided 720^th shares and 87 undivided 720^th shares respectively in the property.
At all material times, Cobalt's directors were Ms Gay Edwina Routledge and Mr Wade Stewart Routledge, each holding 50% of the issued shares in Cobalt. Pullington's directors were Mr Geoffrey Lionel Holman and Ms Frances Mary Holman, each holding 60% and 40% respectively of the issued shares in Pullington.

Formation of intention to purchase the property

During 2014, there was some consideration given by owners to the possible sale of the property to a separate and independent third party not connected with the eventual purchaser or any of the then existing owners, and the price which such a third party might pay for the property. However, no agreement was reached as several people had different views about the appropriate price.
Subsequently, one of the directors of Pullington and one of the directors of Cobalt decided to set up a company to try to purchase the property.
According to the applicant in a letter from the applicant's solicitor to the Commissioner dated 3 July 2015, the reasons for the desire by Pullington and Cobalt to purchase the other interests in the property from all the other owners were as follows:
The building was owned by an [incongruous] group of owners, who could not agree from time to time on the proper management of the property and how it was to be operated. Each of the owners were (sic) independent. There was no partnership agreement. There was no mechanism to resolve disputes. So any one owner could block a decision to be taken on the building. There were a lot of factors that influenced my clients in attempting to buy out the other owners in the building. They include the age of the parties, all except vendors Guida CJ, Budge RK, and Boyle JK (who are in their 40s). All of the other owners are elderly and all in their late 60s, some in their 70s, and some in their 80s. The leases on the building are coming to an end, and effective commercial decisions needed to be made on the proper rationalisation of the management of the building as a whole; and thus a decision to formulate the company and acquire those other shares. (Commissioner's bundle at page 388)
The applicant also said in an email dated 8 July 2015 to the Commissioner:
The problem with the property, from [the applicant's] perspective was that the ownership had spread far too wide, and it was an impractical model for conducting a business of this size. The ownership was far flung (several of the owners are in other States). They were often on holiday and out of reach. There was no partnership agreement in place to allow any majority of partners to make a decision. The smallest shareholders could block a deal. The situation had become untenable. (Commissioner's bundle at page 435)
Mr Holman, a director of Pullington, then had discussions with some of the other owners about various prices.

Offers of options to purchase

The Commissioner's statement refers to the relevant option agreements in this matter as 'put options'. The applicant notes in the applicant's statement that 'the offer was not of a put option but an offer to take an option by the purchasers'. The Commissioner does not take issue with this clarification: T:3; 20.09.16.
The Commissioner's description of the documents which were created is otherwise accepted by the applicant and is set out by the Commissioner in the following way.
On 9 March 2015, a letter (Commissioner's bundle at pages 10 11) and a proposed option agreement (Proposed Option B) (Commissioner's bundle at pages 12 - 18) was sent by the solicitor for Pullington on behalf of 'a company, not yet formed, in respect of which [Pullington] is the promoter' to an owner of 45 undivided 720^th shares in the property, Mr John William Caldow, in relation to the possible sale of his interest in the property. A response was required by 18 March 2015.
Under the terms of Proposed Option B, Mr Caldow grants to Pullington 'as agent for and on behalf of a company yet to be formed' an option to purchase Mr Caldow's interest in the property for $890,625 (being 45/720 x $14,250,000).
Consideration provided for the grant of the option was to be $8,906.25 (that is, 1% of the purchase price), to be applied towards the purchase price if the option was exercised.
The letter sent with Proposed Option B went on to state:
You will note that the purchase price for your share is a proportion of $14.25M, as you requested.
Mr Holman has asked me to thank you for the trust that you have shown, and the confidentiality that you have applied to the discussions that have taken place. (Commissioner's bundle at pages 10 - 11)
As will be seen, proposed Option B is different from the options to purchase to be sought from the other owners. Mr Caldow had made clear in earlier discussions the terms upon which he would be willing to sell his interest, and those terms (including a higher price) were more favourable than those that were to be proposed to the other owners.
Pullington (as agent for and on behalf of the eventual purchaser) was prepared to pay the higher price sought by Mr Caldow for his share because his interest would assist the eventual purchaser in 'gaining control of the property'; Commissioner's bundle at page 387.
Annexed to Proposed Option B was an unexecuted contract for the sale of land, prepared on the basis that Mr Caldow agreed to the sale of his share in accordance with the option agreement.
On 13 March 2015, a letter (Commissioner's bundle at pages 19 20) and a proposed multiparty option agreement (Proposed Option A) (Commissioner's bundle at pages 21 35) was sent by the solicitor for Pullington on behalf of 'a company, not yet formed, in respect of which [Pullinger] is the promoter' to the remaining 13 owners (that is, all owners excluding Mr Caldow, Cobalt and Pullington) in relation to their relevant interests in the property. A response was required by 20 March 2015.
Proposed Option A was prepared to enable each of the owners to grant Pullington (as agent for and on behalf of the eventual purchaser) an option to purchase the owners' interests in the property for $9,760,000 (representing 549/720 x $12,800,000) to be divided between all the owners in proportion to their respective interests in the property.
Annexed to Proposed Option A was an unexecuted contract for the sale of land, prepared on the basis that all these other owners had agreed to the sale of their respective interests in accordance with the option agreement.
The letter sent with Proposed Option A stated:
Please note that yourself, and all other parties listed in Schedule A to the Option will receive an Option in identical terms.
If you and all other parties to the Option, listed in Schedule A, grant this option then you will be paid immediately a fee that is equal to 1% of the intended purchase price.
You will note the purchase price for your share is a proportion of $9.76M. This proportionate offer of $9.76M for the total of the interest comprised in the first schedule to the Deed (which totals 549/720^th of the shares in the property), is based on an overall value of the property at $12.8M. Your share would therefore be a proportionate amount based on the said value of $12.8M.
Pullington's objective was 'to 'test the water', see the reactions obtained, and then proceed cautiously on a case by case basis'; Commissioner's bundle at page 534.
Consideration provided for the grant of the option was to be $97,600 (that is, 1% of the purchase price) divided between the owners in proportion to their respective interest in the property, to be applied towards the purchase price if the option was exercised.
Pullington, as agent for and on behalf of the eventual purchaser, considered that a premium was being paid by it even under the lower priced Proposed Option A terms, but it was happy to do so 'in order to obtain control of the building'; Commissioner's bundle at page 387.

Grant of options

On 25 March 2015, Mr Caldow (through his representative) granted an option in the form of Proposed Option B (Option B) to Pullington to acquire his 45 undivided 720^th shares in the property.
On 27 March 2015, some of the other owners granted an option in the form of Proposed Option A (Option A) to Pullington to acquire a total of 383 undivided 720^th shares in the property. Those owners were:
a)Ms Ruth Margaret Barrett;
b)Ms Mary Jeanette Marshall;
c)Ms Nora May McWhinney;
d)Mr Colin Arnold Marshall;
e)Mr George Edward Bernard Barrett;
f)Mr Colin Arnold Marshall as trustee for The Marshall Family Super Fund;
g)Ms Gwenyth Bailey;
h)Ms Carolyn Jan Guida;
i)Mr Rodd Kenneth Budge;
j)Ms Jacquelyn Kaye Boyle; and
k)Mr William Kimberley Routledge.
The majority of these owners had the same legal representative.
Following the grant of these options, the total number of undivided 720^th shares in the property either owned by Cobalt and Pullington or the subject of options to purchase held by the yet to be incorporated purchaser company was 554.

Exercise of options

Not all the owners from whom the option was sought granted an option, but because of the number of owners that did grant the option, it was then decided that those options would be exercised.
On 6 May 2015, Pullington, as agents for and on behalf of the eventual purchaser, exercised its rights pursuant to Option A and Option B to purchase the respective interests in the property pursuant to the options granted.
During the period 15 May to 29 May 2015, contracts of sale were executed in accordance with the terms of the option agreements.

Acquisitions from owners who did not grant an option

Three owners, whose interests collectively represented 166 undivided 720^th shares in the property, did not grant Pullington an option in the form of Proposed Option A to acquire their interests in the property. Those owners were:
a)Mr John Wesley Butler and Mr David Ventress Wedderburn as executors of the estate of Ms Hazel Elizabeth Kenny;
b)Mr David Ventress Wedderburn; and
c)Ms Sandra Marjory Gatti.
Further negotiations continued with those three owners.
On 15 May 2015, a contract of sale was executed between the applicant and Mr John Wesley Butler and Mr David Ventress Wedderburn as executors of the estate of Ms Hazel Elizabeth Kenny for the purchase by the applicant of 40 undivided 720^th shares in the property; Commissioner's bundle at pages 193 198.
Also, on 15 May 2015, a contract of sale was executed between Mr David Ventress Wedderburn and the applicant for the purchase by the applicant of 42 undivided 720^th shares in the property; Commissioner's bundle at pages 199 204.
The consideration provided for these two transactions was commensurate with the consideration provided to the owners who had granted Option A (that is, a portion of $12,800,000 in accordance with the vendor's interest in the property).
On 25 June 2015, a contract of sale was executed between Ms Sandra Marjory Gatti and the applicant for the purchase by the applicant of her 36 undivided 720^th shares in the property; Commissioner's bundle at pages 262 268.
On 14 July 2015, a contract of sale was executed between Ms Sandra Marjory Gatti and the applicant for the purchase by the applicant of Ms Gatti's remaining 48 undivided 720^th shares in the property; Commissioner's bundle at pages 255 261.
The consideration paid to Ms Gatti was arrived at on a different basis to the others. Consideration for her total interest in the property was $1,550,000, which is based on the relevant portion of a total value of the property of $13,285,714.

Settlement dates

On 22 May 2015, settlement of the contract naming Mr David Ventress Wedderburn as vendor took place.
Also on 22 May 2015, settlement of the contract naming Mr John Wesley Butler and Mr David Ventress Wedderburn as executors of the estate of Ms Hazel Elizabeth Kenny as vendor took place.
On 26 June 2015, settlement of the contract naming Ms Sandra Marjory Gatti as vendor of 36 undivided 720^th shares in the property took place.
On 14 July 2015, settlement of the contract naming Ms Sandra Marjory Gatti as vendor of 48 undivided 720^th shares in the property took place.
On 10 July 2015, settlement of all other contracts took place.

Lodgement and assessment

On 21 May 2015, the contracts for the sale of Mr John Wesley Butler and Mr David Ventress Wedderburn's 40 undivided 720^th shares in the property, and Mr David Ventress Wedderburn's 42 undivided 720^th shares in the property were lodged with the Office of State Revenue under cover of bundle ID 3319377 (first lodgement).
On 21 May 2015, the first lodgement transactions were assessed for duty. This assessment was later cancelled on 13 July 2015 and reassessed on 17 July 2015.
On 16 June 2015, the option deeds and contracts for sale of the remaining owners' interests in the property (except for the interests of Ms Sandra Marjory Gatti), together with a covering letter of the same date, were lodged with the Commissioner under cover of bundle IDs 3339401, 3339403, 3339404, 3339405, 3339406, 3339407, 3339410, 3339411, 3339412 (second lodgement).
On 26 June 2015, the contract for the sale of Ms Sandra Marjory Gatti's 48 undivided 720^th shares in the property was lodged with the Commissioner under cover of bundle ID 3339607 (third lodgement).
On 1 July 2015, a requisition was issued by the Commissioner seeking further information, amongst other things, to determine whether the aggregation provisions contained within the Duties Act ought to apply.
On 3 July 2015, the lodging party responded to the requisition.
On 8 July 2015, a further requisition was issued by the Commissioner.
Also on 8 July 2015, by two emails the lodging party responded to those requisitions.
On 9 July 2015, a copy of a valuation report prepared by Australian Property Consultants dated 10 February 2015 prepared for Mr Caldow was provided to the Commissioner. This report valued the property at 22 January 2015 as $12,500,000.
On 10 July 2015, the Valuer General, after reviewing the valuation report provided by Australian Property Consultants, recommended adopting a market value for the property of $12,500,000 (as a going concern).
On 13 July 2015, the second lodgement and third lodgement transactions were assessed for duty. These transactions were aggregated pursuant to s 37 of the Duties Act.
On 14 July 2015, the contract for sale of Ms Sandra Marjory Gatti's 36 undivided 720^th shares in the property, together with a covering letter, was lodged with the Commissioner under cover of bundle ID 3353858 (fourth lodgement). The covering letter disclosed that the transactions lodged and assessed on 21 May 2015 under cover of bundle ID 3319377 (first lodgement) had been assessed separately.
On 17 July 2015, the transactions lodged under the first lodgement, second lodgement (except bundle ID 339401) and third lodgement were reassessed and the transactions lodged under the fourth lodgement were assessed for duty. These assessments aggregated all transactions relating to this matter under s 37 of the Duties Act.
On 22 July 2015, a statement of grounds was issued setting out the grounds for aggregating the transactions.
On 23 July 2015, the transaction lodged under cover of bundle ID 3339401 was reassessed for duty. In reassessing the transaction it was aggregated pursuant to s 37 of the Duties Act with the other transactions relating to this matter.

Objection

On 14 September 2015, the applicant through its solicitor lodged an objection to the assessments of 17 July 2015 and 23 July 2015.
On 21 December 2015, the Commissioner disallowed the objection and on 17 February 2016 the applicant applied to the Tribunal for review of that decision.

The legislation

The relevant legislative provisions are set out below.

State Administrative Tribunal Act 2004 (WA)

17.What comes within review jurisdiction
(1)If the matter that an enabling Act gives the Tribunal jurisdiction to deal with is a matter that expressly or necessarily involves a review of a decision, the matter comes within the Tribunal's review jurisdiction.
(2)A matter referred to the Tribunal under section 44(3) comes within the Tribunal's review jurisdiction.
(3)Where subsection (1) or (2) applies the decision is a reviewable decision for the purposes of this Act.

27.Nature of review proceedings
(1)The review of a reviewable decision is to be by way of a hearing de novo, and it is not confined to matters that were before the decision-maker but may involve the consideration of new material whether or not it existed at the time the decision was made.
(2)The purpose of the review is to produce the correct and preferable decision at the time of the decision upon the review.
(3)The reasons for decision provided by the decision-maker, or any grounds for review set out in the application, do not limit the Tribunal in conducting a proceeding for the review of a decision.

29.Tribunal's powers in review jurisdiction
(1)The Tribunal has, when dealing with a matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision-maker in making the reviewable decision.
(2)Subsection (1) does not limit the powers given by this Act or the enabling Act to the Tribunal.
(3)The Tribunal may
(a)affirm the decision that is being reviewed; or
(b)vary the decision that is being reviewed; or
(c)set aside the decision that is being reviewed and
(i)substitute its own decision; or
(ii)send the matter back to the decision-maker for reconsideration in accordance with any directions or recommendations that the Tribunal considers appropriate,

and, in any case, may make any order the Tribunal considers appropriate.
…

Duties Act 2008 (WA)

10.Transfer duty imposed
Duty is imposed on dutiable transactions.

11.Dutiable transaction
(1)Subject to subsection (2), any of the following is a dutiable transaction
…
(b)an agreement for the transfer of dutiable property, whether conditional or not;

…

15.Dutiable property
Any of the following is dutiable property
(a)land in Western Australia;
...

37.Aggregation of dutiable transactions
(1)Dutiable transactions relating to separate items of dutiable property that together form, evidence, give effect to or arise from what is, substantially one arrangement are to be aggregated and treated as a single dutiable transaction.
(2)Without limiting subsection (1), unless the Commissioner is satisfied to the contrary, dutiable transactions relating to separate items of dutiable property together form, evidence, give effect to or arise from what is, substantially one arrangement if
(a)the transactions have taken place within 12 months; and
(b)in respect of each of the transactions, the person liable to pay duty is the same person (whether that person is the only person liable to pay duty or is liable to pay duty with the same or different persons).

(3)Dutiable transactions relating to separate items of dutiable property are not to be aggregated under this section unless the transactions to be aggregated
(a)are all chargeable at the same rate of duty; or
(b)are all chargeable with nominal duty; or
(c)are all exempt transactions.

(4)If dutiable transactions are aggregated, then they are to be treated as a single dutiable transaction that took place at the time that the last of the aggregated transactions took place.
(5)This section does not apply to a dutiable transaction to the extent that it relates to the grant of an option to acquire dutiable property, other than as required under section 34.
(6)Duty chargeable on the dutiable transaction aggregated under this section is to be
(a)assessed on the total of the dutiable values for each of the transactions (calculated as if each transaction was a dutiable transaction) at the time when liability for duty on each transaction arose; and
(b)apportioned between the transactions as decided by the Commissioner.

(7)The amount of duty payable in accordance with this section is to be reduced by the amount of any duty paid on a previous dutiable transaction that is, or previous dutiable transactions that are, aggregated under this section.
(8)Transactions aggregated and treated as a single dutiable transaction under this section may include a transaction that would not otherwise be a dutiable transaction, and where such a transaction is included, that transaction is taken to be a dutiable transaction and is liable to duty accordingly.

Taxation Administration Act 2003 (WA)

40.Right of review by State Administrative Tribunal
(1)A person dissatisfied with the Commissioner's decision on an objection or on an application for an extension of time for lodging an objection may apply to the State Administrative Tribunal for a review of the decision.
…

Issues

The issues in this matter, as formulated by the Commissioner, are as follows.
The Commissioner says that the primary issue before the Tribunal is whether the Commissioner ought to have been satisfied that the 16 contracts executed within 12 months of each other where the property conveyed under each contract was to the same person should not together form, evidence, give effect to or arise from what is substantially one arrangement for the purposes of s 37 of the Duties Act.
The Commissioner then says that this issue gives rise to the following subissues:
a)What is the meaning of 'arrangement' for the purposes of s 37 of the Duties Act?
b)Is an 'arrangement' for the purposes of s 37 of the Duties Act limited to a bilateral arrangement or can it include a unilateral arrangement?
c)Must contract splitting or an intention to minimise duty be demonstrated in order to say that for the purposes of s 37 of the Duties Act that several transactions together form, evidence, give effect to or arise from what is substantially one arrangement?
d)For s 37 of the Duties Act to apply, must the contracts in question be conditional upon each other or be 'interdependent' in the sense described in Holliday v Lockwood [1917] 2 Ch 47 (Holliday), for example?
The applicant accepts this formulation of the relevant issues, but says (applicant's statement para 2) that the Tribunal should also consider the following:
Can it be suggested that there was 'substantially one arrangement' when the Commissioner accepts that there was no underlying agreement, arrangement or understanding between the parties, namely the purchaser and various vendors; and further the Commissioner accepts there was no suggestion of 'contract splitting' in the matter and finally, that the Commissioner accepts that the vendors acted independently in each case in dealing with the purchasers?

Applicant's submissions

The applicant says that the 'one arrangement' specified in s 37 of the Duties Act must precede the 'single dutiable transaction'. However, as the applicant sees it, the Commissioner has taken the opposite approach, namely to look at the result of the transaction as it came together. The Commissioner then, the applicant says, saw that the property ended in the hands of the applicant and concluded that there was an 'arrangement'. The applicant submits that it is not the timing of when the purchaser enters into two or more sales that is essential to determining whether an arrangement occurs; Baldey v Parker (1823) 2 B & C 37 (Baldey) at [39]; or the motive of the parties entering into the transactions; Holliday at page 55. Rather, the applicant says that the relevant assessment is as to the 'interdependence' of the contracts, and not on coincidences as to time, place and parties; AttorneyGeneral v Cohen (1937) 1 All ER 27 (Cohen) at 27. The applicant considers that the critical questions to be asked are found in Casamajor v Strode (1834) Ch 2 MYL & K 706 (Casamajor), which, in the applicant's words, are:
a)Did the purchaser purchase one [share in the property] with reference to the other?
b)Would he have taken one had he not reckoned on having the other?
The applicant says that the answer to both those questions is in the negative, because:
a)although the option agreements were drafted by the applicant's solicitor, each of the vendors had independent representation on a substantive basis;
b)although the single purchase price related to the value of the property as a whole, the valuation of each share was necessarily dependent on the value of the land as a whole, as negotiated separately between the vendor and purchaser in each case;
c)all of the owners were separate individuals with no relationship in a legal sense and the fact that transactions relate to separate shares in the same property is irrelevant;
d)there is nothing to suggest a separate or side agreement between all or any of the parties; and
d)the approach from the applicant's solicitor was a 'cold call', and it was 'fortuitous' that the applicant was represented by the same solicitor in each transaction.
Further, the applicant submits that:
a)the Commissioner's submissions on the 'integral' relationship between the transactions are irrelevant because an analysis of the contractual terms shows there is no interdependence of one contract on the other; and
b)there is no suggestion of 'contract splitting' for tax purposes or any falsity or deception on the part of the applicant.
Counsel for the applicant then concludes as follows (applicant's statement at page 10):
a)It is not clear from the [Commissioner's] Statement of Reasons as to whether or not the Commissioner has found some masquerading of intent to income split or simply finding a unilateral arrangement by the Purchaser to create 'one arrangement'; nor is it clear precisely what that arrangement is said to have been, between whom and when it was said to have been made.
b)In the circumstances of this case, where the end result was problematic right through to the end, no such unilateral arrangement could be held to have existed at the time of the contracts, or at any time thereafter, because there was no interdependence between the contracts.
c)There is no evidence - nor can there be any evidence - of any concerted action by the Purchaser and Vendors to come to a bilateral or multilateral arrangement to separate the contracts. To the contrary, given that not all of the parties executed the option, the Purchaser had no other way forward but to deal with each of the Purchasers (sic) individually, with those who did exercise the option, because each exercise created a separate contract, and a fortiori with those parties who did not exercise the option, and negotiated contracts extraneous to the form of options.
d)In any event … the answers to the Casamajor questions being in the negative, there must be a finding that there was no interdependence between any of the contracts in the required sense for s 37 to apply.

Findings

Applicant's authorities

I have read and considered the cases upon which the applicant relies (Baldey, Casamajor, Holliday and Cohen).
Baldey concerns the sale of goods and whether a series of purchases of items of drapery transacted on the same day between the same parties might together be regarded as one transaction. I do not believe that Baldey is relevant to the matter before me, and it is not, as the applicant suggests, authority for the proposition that the timing of the several purchases is irrelevant.
Casamajor concerns an assertion by a purchaser that, having bought two lots of land and the vendor being unable to 'make title' to one of them, the purchaser should be released from his contract to buy both lots. Relevantly, it was considered that to reach a conclusion on this question 'the whole circumstances may be examined in order to prove that the two contracts are one, by shewing that the two parcels are complicated together, and that upon the whole transaction the Court will determine as a jury would, the question, did or did not the party purchase the one with reference to the other; would he or would he not have taken the one, had he not reckoned upon also having the other'; Casamajor at [730].
Holliday is also a case where a purchaser bought two lots of land (lot 2 and lot 3) at auction and was then released from his contract for lot 3 because of an 'innocent misrepresentation' by the vendor. The purchaser argued that the purchase of lot 2 and the purchase of lot 3 were dependant on each other and that he should therefore be released from the purchase of lot 2 also. The issue for determination was 'whether the two lots were within the knowledge of both parties so complicated as to justify the purchaser in rescinding the contract as to lot 2 on the ground of the misrepresentation as to lot 3'; Holliday at 55 56. After considering various authorities, including Casamajor, it was held, on the facts of the case, that there was not 'sufficient interdependence and complication in the two lots to justify [the purchaser] in rescinding his contract as to lot 2 because of the misrepresentation under which the contract as to lot 3 has been rescinded'; Holliday at 56.

Cohen concerned an assessment of stamp duty and whether, in terms of the relevant legislation, a transaction effected by a conveyance 'does not form part of a larger transaction or of a series of transactions'. It was observed that 'there cannot be a series unless there be some interdependence between the separate transactions, and that whether there is interdependence depends upon the facts of each case'; Cohen at 28.
The only assistance which might be derived from the decisions in respectively Casamajor and Holliday is that the question of whether several transactions form part of a larger, single, transaction will depend on the particular facts and circumstances, including the existence of some interdependence between the transactions. I note though that both of those cases relate to liability for specific performance under contracts for the sale and purchase of land, and, as will be seen, I do not consider that some interdependence between the transactions is the only test to be applied.
Cohen, on the other hand, is a case more on point in that it relates to stamp duty and aggregation of transactions. However, the statutory test there was whether or not a transaction formed part of a larger transaction or a series of transactions. In the present case, the issue is whether or not the transactions in question 'together form, evidence, give effect to or arise from what is, substantially one arrangement' under s 37 of the Duties Act.
I do not agree that the matter can be determined merely by asking and answering in the negative the two 'Casamajor questions', as pressed for by the applicant. The matter instead requires a consideration of the statutory construction of s 37 of the Duties Act.

General principles of statutory interpretation

As Buss JA said in Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211 (Abbotts) at [160]:
The modern approach to statutory construction is purposive. The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text must begin by considering the context, in its widest sense. This will include the general purpose and policy of the provision. (Citations omitted)
The same approach to statutory interpretation in Western Australia was taken by Edelman J in Commissioner of the Australian Federal Police v Courtenay Investments Ltd [No 2] [2014] WASC 55 where his Honour said at [14]:
The key integers in the exercise of determining the effect of Parliament's intention in s 64(2) are statutory text, context, and purpose. The starting point, and the end point, is the text. But, although the statutory text is the 'surest guide' to Parliament's intention, the text must be read in the widest sense of context, including the general purpose and policy of the provision.
I may also have regard to extrinsic material without necessarily invoking the provisions of s 19 of the Interpretation Act 1984 (WA). As Buss JA also said in Abbotts at [91]:
At common law (that is, independently of s 19 of the Interpretation Act), this court is permitted, in construing a statutory provision, to have regard to the words used by Parliament in their legal and historical context and, if appropriate, to give them a meaning that will give effect to any purpose of the legislation that can be deduced from that context. The context includes reference to the legislative history of the provision and any relevant reports of law reform bodies which describe the matters requiring legislative reform. (Citations omitted)
Accordingly, the starting point of the statutory construction of s 37 of the Duties Act is a consideration of the text itself, in its proper statutory context.
The proper statutory context of a provision includes:
a)the relevant Act as a whole;
b)the general purpose, policy and legislative history of the provision; and
c)the existing state of the law and the mischief which a statute was intended to remedy; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408, Abbotts at [91].
However, legislative history and extrinsic materials cannot be relied upon to displace the clear meaning of the text; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257 at [39]. Furthermore, taxation statutes, including the Duties Act, are to be interpreted in a technical manner; Charles Lloyd Property Group Pty Ltd v Commissioner of State Revenue (2011) 84 ATR 775 at 781; Commissioner of State Revenue v Landrow Properties Pty Ltd (2010) 79 ATR 800 at 816.

Statutory construction of s 37 the underlying purpose

The general purpose and policy of s 37 of the Duties Act is not apparent from the explanatory memorandum to the Duties Bill 2007 (WA), or from any of the Parliamentary debates. Clause 37 of the explanatory memorandum states as follows:
This clause allows certain dutiable transactions to be aggregated and treated as a single dutiable transaction for the purposes of charging duty.
Subclause (1) provides that dutiable transactions relating to separate items of dutiable property are treated as a single dutiable transaction if they together form, evidence, give effect to or arise from what is substantially one arrangement.
Subclause (2) provides that dutiable transactions that occur within 12 months and for which the person liable to pay duty is the same (whether alone or with another person) are taken to form substantially one arrangement as referred to in subclause (1), unless the Commissioner is satisfied to the contrary. The onus is, therefore, on the person liable to pay duty to prove that the transactions are not part of one arrangement. It should be noted that transactions may still be aggregated where they take place more than 12 months from each other. However, the onus of proof would be on the Commissioner rather than the person liable to pay duty.
Subclause (3) provides that transactions cannot be aggregated under this provision unless they are all chargeable with the same rate of duty, are all chargeable with nominal duty, or are all exempt from duty.
Subclause (4) specifies that when dutiable transactions are aggregated, they are taken to be a single dutiable transaction that took place on the date that the last of the aggregated transactions took place. This has the effect of duty being charged at the rate that applies at the date of the last of the aggregated transactions.
Subclause (5) prevents this clause from aggregating a dutiable transaction that is the grant of an option with another dutiable transaction, other than as required in clause 34 which relates to the granting and renewal of options. This is necessary to prevent duty being charged in respect of both the option fee and the consideration for the exercise of the option in all cases.
Subclause (6) specifies that when transactions have been aggregated under this clause, duty is to be charged on the total of the dutiable values of each of the dutiable transactions that form the aggregated transaction. The applicable dutiable value for each transaction is determined at the time liability to duty arose on each transaction. The duty charged is apportioned between the transactions as determined by the Commissioner.
Subclause (7) provides that where a dutiable transaction has been duty endorsed and then becomes part of an aggregated transaction in accordance with this clause, the duty paid on the dutiable transaction is to be credited against the duty assessed on the aggregated transaction.
Subclause (8) provides that a transaction that may not be a dutiable transaction on its own can be aggregated with another dutiable transaction and consequently be part of an aggregated transaction that is liable to duty.
For example, a transfer of chattels on its own would not be a dutiable transaction. However, if that transfer is part of a series of transactions that include a transfer of land, it would become a dutiable transaction as a result of the aggregation and would be liable to duty.
An examination of the Parliamentary debates and explanatory memoranda in respect of the predecessor to s 37, s 75AF of the Stamp Act 1921 (WA) is also of no assistance.
However, I think that it is reasonable to infer that at least part of the purpose of the section was as an antiavoidance measure.
This inference is supported by the now archived Commissioner's Practice DA 4.0 which provides under the heading 'Background' that s 37 'is an antiavoidance measure designed to counter the practice known as "agreement splitting" whereby a single arrangement is effected or evidenced by separate transaction records, in order to take advantage of the lower rates of transfer duty applying to lower valued transactions.'
I note that in the current Revenue Ruling DA14.0 (Commissioner's bundle at pages 591 597) that wording or anything similar does not appear.

Statutory construction of s 37 the text and the Duties Act as a whole

It is not in dispute that the text of s 37(2) of the Duties Act gives rise to a rebuttable presumption that, where paragraphs (a) and (b) of s 37(2) are satisfied, the dutiable transactions in question together form, evidence, give effect to or arise from substantially one arrangement. The onus of rebutting this presumption rests with the person liable to pay duty; Re Khoury and Chief Commissioner of State Revenue (2010) 78 ATR 81 (Khoury) at [27]; Re Grafton and Commissioner of State Revenue (2011) 85 ATR 526 (Grafton) at [25] [26].
Neither the phrase 'form, evidence, give effect to or arise from', nor the word 'arrangement', is defined in the Duties Act. There is nothing in the Duties Act, viewed as a whole, or in any of the extrinsic materials brought to my attention, which would lead me to conclude anything other than that those words should therefore bear their ordinary and grammatical meaning.
The words or phrases 'form, evidence, give effect to or arise from' are separated by the disjunctive 'or'.
The verb 'form' ordinarily means 'to shape; to fashion; to make up or constitute … '; Macquarie Online Dictionary.
The verb 'evidence' ordinarily means 'to make evident or clear; show clearly; manifest'; Macquarie Online Dictionary.
The idiom 'give effect to' ordinarily means 'put into force'; Shorter Oxford English Dictionary 6^th ed.
The phrase 'arise from' ordinarily means 'to result or proceed from'; Macquarie Online Dictionary.
The adverb 'substantially' ordinarily means '[i]n substance', '[i]n essence; essentially, intrinsically'; 'to a great extent or degree; considerably, significantly'; Oxford English Online Dictionary.
The adjective 'one' ordinarily means 'a single'; Macquarie Online Dictionary.
The Encyclopaedic Australian Legal Dictionary defines an 'arrangement' to mean '[a]n agreement, plan, or compact, the legal effect of which depends on the context in which it is used'. In the same publication, in the context of 'Taxation and revenue' an arrangement is 'any express or implied agreement, understanding, promise or undertaking, whether it is legally enforceable or not'.
According to the Macquarie Online Dictionary, the word 'arrangement' ordinarily means 'the act of arranging … a final settlement; adjustment by agreement … preparatory measure; previous plan; preparation …'.

Statutory construction of s 37 the existing state of the law

As I previously said in Grafton at [41], the decisions in Khoury, Jeffrey v Commissioner of Stamps (1980) 23 SASR 398 (Jeffrey) and Old Reynella Village Pty Ltd v Commissioner of Stamps (SA) (1989) 51 SASR 378 (Old Reynella Village) illustrate the proper approach to the application of s 37 of the Duties Act.
Where paragraphs (a) and (b) of s 37(2) of the Duties Act are satisfied, the dutiable transactions are presumed to form, evidence, give effect to or arise from substantially one arrangement unless the Commissioner is satisfied to the contrary; Grafton at [25]. There is no dispute and it is clearly the case that paragraphs (a) and (b) of s 37(2) of the Duties Act are satisfied.
If the presumption under s 37(2) of the Duties Act arises, the taxpayer bears the onus of establishing that the dutiable transactions do not form, evidence, give effect to or arise from substantially one arrangement; Khoury at [27]; Grafton at [26].
The word 'substantially' is an important qualification to the words 'one arrangement'. Something may not be one arrangement in fact but may, nonetheless, be 'substantially' one arrangement; Khoury at [26]; Grafton at [42]; Re Brianco Nominees Pty Ltd and Commissioner of State Revenue (2008) 73 ATR 67 (Brianco) at [29].
Brianco considered s 24 of the Duties Act 2000 (Vic) which refers to 'form, evidence, give effect to or arise from what is, substantially, one arrangement' in a similar aggregation context. There, the Victorian Civil and Administration Tribunal found (at [29]) that it is not just 'one arrangement' in reality that the provision is directed to but 'substantially, one arrangement'. Something may not be one arrangement in fact but it may, nonetheless, be 'substantially' one arrangement.
As Jacobs J said in Jeffrey at 406 (while considering whether separate conveyances together form or arise from substantially one transaction or one series of transactions under the Stamp Duties Act 1923 (SA)):
'[T]he word "substantially' must be given some meaning. It can only mean, in my judgement, that the Commissioner is required to look at 'the substance' of the several transactions, and determine whether they are, 'in substance', one transaction, although masquerading as several.
His Honour, after considering the decision in Cohen, concluded that the word 'one' points to some essential unity, some 'oneness', some unifying factor that brings the several transactions within the section; Jeffrey at 405. He said that it is therefore necessary to find, not just some interdependence between the contracts, but a relationship or connection or interdependence between the contracts (my emphasis) that gives to them the essential unity at which the relevant legislation is directed.
The word 'arrangement' has a broader interpretation than the word 'contract'; Grafton at [27], citing Williams J in Federal Commissioner of Taxation v Newton (1957) 96 CLR 577 at 630:
"Contract" is a technical word and implies an agreement enforceable by law but the words "agreement" and "arrangement" … are apt to describe bargains of a looser kind.
The term 'arrangement' is wide enough to include a bilateral or a unilateral arrangement and need not be legally enforceable. It includes all kinds of action or conduct. The arrangement does not have to be in writing and in some cases it can be inferred by taking into consideration all the relevant circumstances; Khoury at [25], citing Chief Commissioner of State Revenue and Pacific General Securities Ltd (2004) 58 ATR 17 (Pacific General Securities 2004) at [34].
In Pacific General Securities Ltd 2004, the New South Wales Administrative Decisions Tribunal Appeal Panel considered s 25(1) of the Duties Act 1997 (NSW) which similarly refers to the phrase 'form, evidence, give effect to or arise from what is, substantially, one arrangement' in a similar aggregation context. The Panel in that case was clear that:
a)the word 'arrangement' in the context of the New South Wales legislation can encompass a unilateral arrangement, that is, 'a plan drawn up by and to be implemented by one person alone' (at [34]);
b)in deciding whether the circumstances amount 'substantially' to 'one arrangement', the Commissioner must have regard to all relevant factors (at [36]);
c)the objective of provisions such as the present one is to treat differentially transferee(s) involved in transactions that have no connection sufficient to amount to an arrangement, as compared to those where there is a sufficient connection (at [47]);
d)the conduct of the transferee(s) is the main focus when considering the aggregation provision in question (at [47]); and
e)in any assessment as to whether there is 'substantially one arrangement' there will be questions of degree involved (at [47]).
In Re Chief Commissioner of State Revenue and Pacific General Securities Ltd (No 2) (2005) 63 ATR 127 (Pacific General Securities 2005) the same Panel held that an 'arrangement' can involve a number of different vendors to the same purchaser (Pacific General Securities 2005 at [30]) and that for the aggregation provisions to apply it does not have to be shown that the purchaser has engaged in 'transactionsplitting' (Pacific General Securities 2005 at [25]). I respectfully agree.
In considering aggregation, it is necessary to undertake a wideranging factual inquiry to determine the true nature of the relevant transaction; Khoury at [23].
Mohr J in Old Reynella Village discussed the importance of an integral relationship between the transactions in question as opposed to a fortuitous relationship and said such a relationship could be established through contiguity of time or place factors. The facts in Old Reynella Village are analogous to the facts in the present case:
a)The Hall Group entered into contracts for the purchase of four properties and obtained options to purchase a further 16 properties.
b)If amalgamated, the 20 properties would in effect become one block of land.
c)Subsequently, the Hall Group assigned the benefit of the contracts for purchase and the options to the appellant.
d)The appellant then obtained transfers for 17 individual properties covered by the contracts and options.
e)The Hall Group had in mind the development of a shopping complex on some if not all the land (that is, an aggregated block of land made up of the individual blocks referred to in the contracts and options).
f)The Hall Group were engaged in the process of acquiring separate but adjoining blocks of land with the intention of integrating them in due course into one holding and on that land entered into a contract for the erection of a shopping complex.
His Honour found that the aggregation provision in question in that case should be applied.

Disposition

As I have already found, paragraphs (a) and (b) of s 37(2) of the Duties Act are satisfied in this case. Consequently, a presumption arises that all the contracts in question together form, evidence, give effect to or arise from substantially one arrangement.
It is then for the applicant to satisfy the Commissioner (and now the Tribunal) that the contracts in question do not form, evidence, give effect to or arise from substantially one arrangement.
It is my conclusion that the applicant has not done so. The Tribunal considers that the contracts in question do arise from substantially one arrangement (that is, a plan drawn up by Pullington and Cobalt, to be implemented by the applicant).
It is helpful at this stage to revisit the relevant agreed facts:
a)the property is land and a building used for commercial purposes. The owners' interests in the property at the relevant time were interests in one single commercial property (Commissioner's bundle at pages 437 and 448);
b)not including Pullington and Cobalt, there were 14 separate owners of the property. As owners in common, any one owner could block any decision regarding management of the building. Pullington and Cobalt considered that this ownership model had become untenable (Commissioner's bundle at pages 3, 388 and 435);
c)in 2014, in the context of involvement in unsuccessful discussions relating to the possible sale of the property to a separate and independent third party, a director of Pullington (the eventual agent for and on behalf of the applicant) had become aware for what price several of the owners would be prepared to sell their interest in the property (Commissioner's bundle at page 533);
d)subsequently in 2014, a plan was formed between Pullington and Cobalt for the eventual purchaser to purchase all the interests in the property from the other owners so that effective commercial decisions could be made without 'any one owner ... block[ing] a decision to be taken on the building' (Commissioner's bundle at page 388);
e)the purchaser in respect of each transaction was the same (Commissioner's bundle at page 5, together with pages 193, 199, 205, 210, 215, 220, 224, 228, 232, 236, 239, 243, 247, 251, 255, 262);
f)on 9 March 2015, the solicitor for Pullington (as agent for the eventual purchaser) sent a covering letter and Proposed Option B to Mr Caldow, one of the owners, seeking an option to purchase Mr Caldow's interest in the property based on a price higher than that previously contemplated but which it was understood would be acceptable to Mr Caldow. This higher price was offered by Pullington as it 'assisted' Pullington in 'gaining control of the Property' (Commissioner's bundle at pages 10 18 and page 387);
g)on 13 March 2015, the solicitor for Pullington (as agent for and on behalf of the eventual purchaser) sent what the applicant refers to as a 'cold call' letter and Proposed Option A to the remaining 13 owners, that is, all owners other than Mr Caldow, Pullington and Cobalt, seeking an option to purchase their respective interests. The price to be paid to each was based on a total value of $9,760,000 in proportion to their respective interests in the property. The covering letter noted that all 13 owners were sent the same option and that if all 13 owners granted the option then each owner would be paid immediately a fee that is equal to 1% of the intended purchase price (Commissioner's bundle at pages 19 27);
h)the purchase prices offered by Pullington (as agent for and on behalf of the eventual purchaser) to all 14 owners were considered by Pullington to be at a premium but were nonetheless offered 'in order to obtain control of the building' (Commissioner's bundle at page 387);
i)all the owners to whom options were sent (except three) granted an option to purchase to Pullington (as agent for the eventual purchaser) (Commissioner's bundle at pages 36 179);
j)Mr Caldow granted his option (Option B) on 25 March 2015. All of the other options (Option A) were granted on 27 March 2015 (Commissioner's bundle at pages 36 179);
k)all of the options granted were exercised on 6 May 2015(Commissioner's bundle at pages 180 192);
1)contracts of sale were executed pursuant to the exercise of the options during the period 15 to 29 May 2015. Settlement of those contracts took place on the same day, 10 July 2015 (Commissioner's bundle at pages 205 254);
m)negotiations with the remaining three owners who did not grant an option to Pullington (as agent for and on behalf of the eventual purchaser), resulted in, on 15 May 2015, two owners (David Ventress Wedderburn in his personal capacity and John Wesley Butler and David Ventress Wedderburn as executors of the estate of Hazel Elizabeth Kenny) agreeing to transfer their interests in the property to the purchaser for the same purchase price offered to the other Option A owners (with settlement on 22 May 2015). The third owner (Sandra Marjory Gatti) agreed to transfer her interests to the purchaser on 25 June and 14 July 2015 (with settlement on 26 June 2015 and 14 July 2015 respectively) at a higher purchase price. The higher price was paid by the purchaser in order to gain control of the property (Commissioner's bundle at pages 255 268 and page 387); and
o)the applicant acknowledges that negotiations were entered into with each individual owner of the property 'with the overall aim of acquiring all interests held in the Property, save for the interests of [Pullington] and [Cobalt], which have common directors to that of the [purchaser]' (Commissioner's bundle at page 345).

The facts and circumstances surrounding the contracts demonstrate an essential unity or 'oneness' between the contracts. The clear 'relationship' or 'connection' between the transactions in the sense spoken of in Jeffrey, is evident from those facts and circumstances:
a)Cobalt and Pullington (on behalf of the eventual purchaser) designed a plan to obtain control of the single commercial property from its 14 independent owners so that effective commercial decisions could be made without 'any one owner ... block[ing] a decision to be taken on the building'. Cobalt and Pullington had formed the view that there was some urgency in this plan, because 'effective commercial decisions needed to be made'. This was in my view the 'arrangement'.
b)All of the contracts in question (except the contract with Mr Caldow) resulted from initial enquiry letters sent to each the then current owners by Pullington on behalf of the eventual purchaser. These 'cold call' letters were the first step of the eventual purchaser's plan to obtain control of the property.
c) None of the owners had advertised the sale of their interests on the open market and there is no evidence to suggest (and clearly it was not part of the plan) that the purchaser was prepared to implement the plan by waiting until individual owner's shares in the property came onto the market.
d)The majority of the then current owners agreed to the sale of their interests in the property directly pursuant to the enquiry letters.
e)The contract with Mr Caldow also resulted from a letter being sent to Mr Caldow after earlier discussions had been had regarding a suitable price for his interest in the property. The discussion and letter were the first steps of the eventual purchaser's plan to obtain control of the property. Again, Mr Caldow had not advertised the sale of his interest on the open market.
e)Mr Caldow agreed to the purchase of his interest in the Property directly in response to the letter enquiry.
f)The balance of the owners, three in number, who did not agree to the sale of their interests in the property in response to the enquiry letters, did agree to the sale of their respective interests shortly afterwards. Two of those three owners agreed to the same purchase price previously offered by the eventual purchaser in the enquiry letter. The third owner negotiated a higher purchase price, which was agreed to by the eventual purchaser, because the purchase would assist the eventual purchaser in 'gaining control' of the property. Gaining control of the property was the objective.
g)Even though, when the options were exercised on 6 May 2015, the eventual purchaser had not secured its acquisition of the shares of the remaining three owners, it is reasonable to infer that negotiations between those three owners and the eventual purchaser were well advanced, because the Wedderburn contracts were signed and the sale settled within 16 days of that date and the Gatti contracts signed and settled within a little over two months of the exercise date.

Conclusion

The Tribunal considers that the applicant has not established that the dutiable transactions do not together form, evidence, give effect to or arise from what is substantially one arrangement. Accordingly, the Tribunal considers that the Commissioner's decision upon the applicant's objection is the correct and preferable decision.

Orders

The Tribunal orders:
1.The Commissioner's decision to aggregate the dutiable transactions under s 37 of the Duties Act 2008 (WA) is affirmed.
2.The application is dismissed.

I certify that this and the preceding [137] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE T SHARP, DEPUTY PRESIDENT