ARMADA HOLDINGS (WA) PTY LTD and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE - [2024] WASAT 139

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: TAXATION ADMINISTRATION ACT 2003 (WA)
CITATION:   ARMADA HOLDINGS (WA) PTY LTD and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE [2024] WASAT 139
MEMBER:   JUDGE F VERNON, DEPUTY PRESIDENT
HEARD:   26 JULY 2024
DELIVERED          :   11 DECEMBER 2024
FILE NO/S:   VR 110 of 2023
BETWEEN:   ARMADA HOLDINGS (WA) PTY LTD
Applicant
AND
SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE
Respondent

Catchwords:

Statutory interpretation, s 259 Duties Act 2008 (WA) - Objection to assessment of landholder duty on the acquisition of shares in a landholder - Entitlement to exemption for 'relevant consolidation transactions' - Whether the acquisition of shares is a 'relevant consolidation transaction' within the meaning of s 259(4) - Whether the Tribunal has discretion to grant an exemption to a transaction that is not a 'relevant consolidation transaction'

Legislation:

Duties Act 1997 (NSW), s 273D(2), s 273D(3)
Duties Act 2008 (WA), Ch 3, Ch 6, s 151, s 152, s 152(1), s 153(1), s 155(2), s 155(3), s 160(1), s 161, s 163(1), s 163(1)(a), s 257, s 257(1), s 258, s 259, s 259(1), s 259(2), s 259(2)(a), s 259(2)(b), s 239(3), s 259(4)(a), s 259(4)(b), s 259(5), s 259(6), s 259(7), s 260, s 263(1), s 263(1)(a), s 262, s 262(3)
Interpretation Act 1984 (WA), s 18
State Administrative Tribunal Act 2004 (WA), s 17, s 18, s 29
Taxation Administration Act 2003 (WA), s 3(1), s 7, s 7(2), s 10, s 20A, s 34(a), s 37(1), s 37(2), s 37(4), s 39(1), s 40(1)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr D Romano
Respondent	:	Mr S Cobbett

Solicitors:

Applicant	:	Zafra Legal
Respondent	:	State Solicitor's Office

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

Australian Leisure and Hospitality Group Pty Ltd v Commissioner of Police [2020] WASCA 157; (2020) 56 WAR 102
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; (1997) 141 ALR 618
CPD001 Pty Ltd v Chief Commissioner of State Revenue (NSW) [2022] NSWCATAD 273
DKLR Holdings Co (No 2) v Commissioner of Stamp Duties [1980] 1 NSWLR 510
Dunbar and Commissioner of Police [2007] WASAT 90
Inland Revenue Commissioners v National Federation of Self-Employed & Small Businesses Ltd (1982) AC 617
Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 153 ALR 490
Wright v Gibbons (1949) 78 CLR 313

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

Armada Holdings (WA) Pty Ltd (Applicant) has applied for review of the Respondent's decision to disallow an objection to an assessment of landholder duty on the Applicant's acquisition of shares in Abbott & Associates Pty Ltd (Abbott).
The Applicant contends that the Applicant's acquisition of Abbott's shares is a 'relevant consolidation transaction' within the meaning of s 259(4) of the Duties Act 2008 (WA) (Act). The Applicant says that, accordingly, the Respondent should have granted an exemption from the landholder duty chargeable on that acquisition under s 263(1) of the Act.
The Applicant further contends that, if the Applicant's acquisition of Abbott's shares is not a 'relevant consolidation transaction', the Respondent has a discretion to exempt the acquisition from payment of duty under s 7 of the Taxation Administration Act 2003 (WA) (TAA), which the Tribunal may exercise on review and which should be exercised in this case.
The dispute between the parties principally turns on the construction of the words 'those securities' in ss 259(4)(a) and (b) of the Act.
For the reasons set out below, in my view, the correct and preferable decision is that:
(a)the Applicant's acquisition of Abbott's shares is not a 'relevant consolidation transaction' within the meaning of s 259(4) of the Act. Accordingly, the Respondent is not required to grant an exemption from landholder duty under s 263(1) of the Act;
(b)the Tribunal does not have a discretion to exempt that acquisition from payment of the landholder duty chargeable on it; and
(c)as a result, the application must be dismissed.

Issues

The issues for determination in this matter are:
(a)whether the Applicant's acquisition of shares in Abbott from the holders of those shares under the terms of a share swap agreement dated 15 December 2017 was a 'relevant consolidation transaction' within the meaning of s 259 of the Act; and
(b)if the Applicant's acquisition of shares in Abbott was not a 'relevant consolidation transaction', with the effect that the acquisition is not entitled to exemption from landholder duty under s 263(1) of the Act;
(i)does the Respondent have a discretion under s 7 of the TAA to grant an exemption from duty; and
(ii)if the Respondent does have such a discretion to grant an exemption;
A.does the Tribunal have the power to exercise that discretion in these proceedings; and
B.if the Tribunal may exercise that discretion, should the Tribunal do so in the circumstances of this case?

Legislative framework

The Act is a 'taxation Act' under s 3(1) of the TAA. Under s 10 of the TAA the Commissioner may delegate any of the Commissioner's functions under a 'taxation Act' except certain powers not presently relevant. There is no dispute that the Respondent has carried out functions under the Act in relation to this matter as the Commissioner's delegate.
By s 263(1)(a) of the Act, where an exemption application is made in accordance with s 262, and the Commissioner is satisfied that there has been a 'relevant transaction', the Commissioner must exempt the transaction from the duty that would be chargeable on that transaction, other than in the circumstances set out in ss (4), which are not presently relevant. By s 262(3) of the Act, an exemption application for a 'relevant transaction' must be made not later than 12 months after the date of the transaction, in the approved form. There is no dispute in this case that the Applicant complied with the requirements of s 262(3).
Section 257(1) of the Act defines a 'relevant transaction' as either a 'relevant consolidation transaction' or a 'relevant reconstruction transaction'. In this case, the Applicant claims that the Acquisition is a 'relevant consolidation transaction'. Section 257(1) provides that term has the meaning given to it in s 259 of the Act.
Section 259 provides as follows:
(1)In this section
corporate consolidation means the formation of a family by the interposition of an entity (the head entity) between another entity (the affected entity) and the holders of the affected entity securities.
(2)Subject to this section, a relevant consolidation transaction is any acquisition on which landholder duty or foreign landholder duty is chargeable that is made solely for the purposes of a corporate consolidation and that is -
(a)an acquisition of securities of the affected entity by the head entity for which the only consideration given by the head entity is the issue or transfer of its securities to the person from whom the affected entity securities were acquired; or
(b)an acquisition of securities of the head entity by a holder of securities of the affected entity.
(3)An acquisition is not a relevant consolidation transaction if, immediately before the acquisition, the head entity held dutiable property or a vehicle or an interest in an entity.
(4)An acquisition is not a relevant consolidation transaction unless, immediately after the issue or transfer of the head entity's securities -
(a)each person that holds those securities (a security holder) is a person that held securities of the affected entity immediately before the securities of the affected entity were acquired by the head entity; and
(b)the proportion of those securities that each security holder holds is the same proportion as that security holder held of the securities of the affected entity.
(5)An acquisition is not a relevant consolidation transaction if any part of the consideration for the acquisition, or an associated acquisition, has been or is to be provided by a person that is not a member of the family formed by the corporate consolidation referred to in subsection (2).
(6)For the purposes of subsection (5) -
(a)if the acquisition concerned is an acquisition of securities of the affected entity by the head entity is referred to in subsection 2(a) - an acquisition of securities of the head entity by a holder of securities of the affected entity that is made for the purposes of the same corporate consolidation is an associated acquisition; and
(b)if the acquisition concerned is an acquisition of securities of the head entity by a holder of securities of the affected entity as referred to in subsection 2(b) - an acquisition of securities of the affected entity by the head entity that is made for the purposes of the same corporate consolidation is an associated acquisition.
(7)Subsection (5) does not apply in relation to consideration provided for an acquisition or an associated acquisition if -
(a)the acquisition or associated acquisition is of a kind referred to in subsection 2(b); and
(b)the consideration is the transfer of securities of the affected entity by the holder of those securities to the head entity.
In s 257(1) of the Act, the word 'entity' is defined for the purposes of Ch 6, to be a corporation or a unit trust scheme.
Section 258 of the Act provides that a parent entity and its subsidiaries are members of a family.[1] A parent entity is defined to be an entity that holds, directly or indirectly, at least 90% of the subsidiary entity's shares or units and controls at least 90% of the votes that may be cast at a general meeting of the subsidiary entity.[2]
[1] Section 258(1) of the Duties Act 2008 (WA) (Act). Section 258(2) also provides that if all an entity's securities are 'stapled' to another entity's securities, they and their subsidiaries are members of a family. Stapling appears to be a reference to where dealings in the entities' securities must occur together. However, that definition has no apparent relevance to a family formed under s 259.
[2] Section 257(2) of the Act.
The reference to securities in s 259 of the Act is a reference to the issued shares in a corporation or the units issued under a unit trust scheme.[3]
[3] Section 257(1) of the Act. That section also defines as 'security' an interest in a hybrid company if the Commissioner considers that analogous to an issued share in the corporation, which does not need to be considered here.
Section 259(2) of the Act requires that there be an acquisition on which landholder duty or foreign landholder duty is chargeable. This case concerns landholder duty. In each case the duty is chargeable on an acquisition where the acquirer obtains an interest in a landholder.[4] In my view, there is nothing in the differences between landholder duty and foreign landholder duty that affects the central issue in this case, which is the construction of the words 'those securities' in s 259(4)(a) and (b).
[4] In the case of foreign landholder duty, a 'residential landholder' - s 205ZF of the Act.
Sections 257, 258, 259, 262 and 263 of the Act appear in Ch 6 of the Act. The imposition of landholder duty is provided for in s 151, in Ch 3 of the Act, as follows:
Duty is imposed in respect of any relevant acquisition under Pt 5 of an interest in an entity that under Pt 4 is a landholder for the purposes of this chapter.
Under s 152(1) of the Act, an 'entity' for the purposes of Ch 3 is a corporation or a unit trust scheme, as it is for the purposes of Ch 6 under s 257(1).
Under s 155(2) of the Act, a 'landholder' is defined to be an entity that, immediately before the relevant acquisition, is entitled to land assets[5] in Western Australia, or an entity linked to such an entity, and the total value of the land assets to which the entity is entitled is $2,000,000 or more.[6]
[5] Which term includes land - s 148(1) of the Act.
[6] Section 155(3) of the Act, which provides for an extension to the definition of 'landholder' to extend to transactions which together form part of what is substantially one arrangement where the requisite interest in land assets is acquired, is not currently relevant.
Under s 163(1), a 'relevant acquisition', in summary, is the acquisition of a significant interest in a landholder by a person, or an aggregated group, which had no significant interest in the landholder before the acquisition, or, if the person or aggregated group had a significant interest in the landholder before the acquisition, an increase in that interest.
Under s 160(1) of the Act, a person acquires an interest in an entity if the person obtains an interest in the entity, or increases their interest in the entity, no matter how the interest is obtained or increased.
Under s 161 of the Act, a 'significant interest' in a listed corporation or a listed unit trust scheme is an interest of at least 90%, and otherwise, an interest of at least 50%. Under s 153(1) of the Act, an 'interest' (other than an indirect interest) in a landholder or other entity is to an entitlement to the surplus property of the landholder or other entity if it were wound up: relevantly in this case, by holding the shares of a corporation.
The explanatory memorandum to the Duties Bill 2007 says in relation to Ch 6 (which includes s 259):
This chapter sets out the exemption from duty for certain transactions that occur in relation to entity restructuring. These provisions represent a major redesign of the corporate reconstruction arrangements that currently exist in the Stamp Act. While the policy of facilitating more efficient business structures still underlies the new regime, the parameters of the previous exemption have been relaxed. This is considered appropriate in the context of, and is contingent upon, the introduction of the landholder model.
…
An exemption is available for certain transactions between entities that are family members. Entities may constitute a 'family' where the relationship between the entities is that of parent entity and subsidiary.
…
The implementation of the landholder duty regime means that the acquisition of a corporation or unit trust scheme will, in most cases, attract landholder duty if the corporation or unit trust scheme holds land. The exception to this will be in the case where the value of the land is below the landholder value threshold. As the three year pre‑association test would be waived in most cases, the need for the pre‑association test is obviated and it has been removed in the proposed provisions.
Therefore, the only requirement that must be satisfied before the exemption is granted is that there is a 'relevant transaction'. A 'relevant transaction' is defined as a relevant reconstruction transaction or a relevant consolidation transaction.
A relevant consolidation transaction is a transaction whereby a company or unit trust is interposed between and entity and its security holders. A relevant consolidation transaction will be any of the transactions necessary to give effect to the interposition, being the issue of shares or units in the new head entity to the shareholders of the affected entity, and the transfer of the shares or units in the affected entity to the new head entity. Without the relevant consolidation transaction exemption, these transactions would constitute an acquisition under the landholder duty provisions and may be subject to landholder duty.
The explanatory memorandum goes on to say in relation to s 259 specifically:
The term 'relevant consolidation transaction'
The purpose of this clause is to set out what constitutes a 'relevant consolidation transaction'.
Subclause (1) provides the definition of 'corporate consolidation'. A corporate consolidation is defined as the formation of a family be interposing an entity between another entity and its shareholders or unit holders. The entity that is interposed is known as the 'head entity', and the entity that it becomes the owner of is referred to as the 'affected entity'.
Subclause (2) describes the transactions that may constitute a 'relevant consolidation transaction'. A corporate consolidation will involve two relevant consolidation transactions that may otherwise be the subject of duty under the Landholder Duty Chapter. These are described in paragraphs (a) and (b).
Paragraph (a) refers to an acquisition of the securities of the affected entity by the head entity for which the only consideration given by the head entity is the issue or transfer of its securities to the person from whom the affected entity's securities were acquired. This is the transaction by which the head entity is placed at the head of the family structure, being a transfer of shares or units in the affected entity from the shareholders or unit holders to the head entity.
Paragraph (b) refers to an acquisition of the securities of the head entity by a person who is a holder of securities of the affected family entity. This is the transaction by which shares in the head entity are issued or transferred to the shareholders or unit holders of the head entity.
Subclause (3) provides that an acquisition is not a relevant consolidation transaction if the head entity holds dutiable property, a vehicle or an interest in an entity immediately before the acquisition. This ensures that transactions that are eligible for an exemption are limited to transactions that do not result in property that would otherwise attract duty coming into the family.
Subclause (4) clarifies that the issue or transfer of the shares or units referred to in subclause (2)(b) must be to each person who held the shares or units in the affected entity immediately before those shares or units were acquired by the head entity and must be in the same proportion as the proportion the person held in the affected entity.
The Act was subsequently amended in 2018 by the Revenue Laws Amendment Bill 2018, resulting in the addition of ss 259(5), (6) and (7).
The Explanatory Memorandum to the Revenue Laws Amendment Bill 2018 said in relation to s 259(2) of the Act:
Under the Stamp Act and in several other jurisdictions, an exemption cannot be granted if part or all of the consideration for the relevant transaction has been, or is to be, provided by a person that is not a family member. Consideration provided by a non-family member usually indicates that a third party was involved in the matter from the beginning. This is a key sign that the transactions between the family members are part of a duty avoidance scheme or arrangement involving the third party.
This clause reinstates this condition in the Act. The effect is that if consideration is provided by a non-family member for either of the transactions referred to in subsection 2(a) and (b), neither of the transactions is a relevant consolidation transaction for which an exemption may be granted.
This condition does not apply to consideration provided by the security holder referred to in subsection 2(b). This is because the family that has been formed by the corporate consolidation consists of the head entity and its subsidiary, the affected entity. The persons who originally held the securities in the affected entity, but now hold the securities in the head entity, are not members of that family. To effect the consolidation, those persons provided consideration in the form of the transfer of securities in the affected entity to the head entity.
Consideration provided by a third party will be accepted as being provided by a family member when it is provided as a loan to that family member.

Facts

The facts in this matter were not in dispute. The parties agreed a statement of facts and issues dated 8 May 2024.[7] In addition, several documents were tendered by consent.[8] Those facts, supplemented by the exhibits, are summarised in [26] to [43] below. I make findings of fact in accordance with those paragraphs.
[7] Statement of Agreed Facts and Issues dated 8 May 2024 (Exhibit 1).
[8] Share Swap Agreement dated 15 December 2017 (Exhibit 2), Duties Assessment Notice dated 5 January 2021 (Exhibit 3), a letter from the Applicant's lawyer to the Commissioner of State Revenue objecting to the assessment of duty dated 2 March 2021 (Exhibit 4), a letter from a Senior State Revenue Consultant to the Applicant's lawyer dated 16 August 2023, responding to the objection (Exhibit 5),the Duties Assessment Notice dated 1 September 2023 (Exhibit 6) and the Duties Assessment Notice dated 19 April 2024 (Exhibit 7).

On 10 October 2017, a company called Armada Property Holdings Pty Ltd purchased a building at 18 Sangiorgio Court Osborne Park (the Property) as trustee for the Armada Property Trust (AP Trust).
On 1 November 2017, the Applicant was incorporated and its one share issued to Anthony McDowell (Mr McDowell).
Immediately before the transaction referred to in [30(a)] below:
(a)Abbott held 1,140,000 of the 2,255,000 units in the AP Trust, being 50.55%;
(b)the AP Trust was entitled to land assets in Western Australia, being the Property, which had an unencumbered value of $4,600,000;
(c)Abbott's shareholders collectively held all of Abbott's 21,042 shares (the Sellers);
(d)Mr McDowell still held the Applicant's only issued share; and
(e)Mr McDowell did not hold any shares in Abbott.
On 15 December 2017, the Applicant entered into an agreement (the Share Swap Agreement) with Abbott and the Sellers by which the Sellers agreed to sell their shares in Abbott to the Applicant in return for the issue of 21,042 shares in the Applicant (the Applicant's Issued Shares) to the Sellers as set out in Sch 1 to the Share Swap Agreement.
On 15 December 2017, pursuant to the Share Swap Agreement:
(a)the Applicant became the holder of all 21,042 of Abbott's shares (the Acquisition);
(b)the Applicant's Issued Shares were issued to the Sellers as set out in Sch 1 to the Share Swap Agreement.
Immediately after the Acquisition:
(a)Mr McDowell still held a single share in the Applicant;
(b)the Applicant's shareholders, being the Sellers and Mr McDowell, collectively held 21,043 shares in the Applicant;
(c)most of the Sellers held the same number of shares in the Applicant as they had held in Abbott immediately before the Acquisition. There were, however, some differences as set out in the Table below.

Table

Name

No. of shares in Abbott immediately before the Acquisition

No. of shares in the Applicant immediately after the Acquisition

Heather Lawford

20

702

Heather Lawford and Douglas Lawford jointly

682

0

Michael Berry

10

351

Michael Berry and Susan Berry jointly

341

0

David Van Beelan

10

0

David Van Beelan and Karen Van Beelan jointly

340

350

With respect to the shareholdings referred to in the table at [31(c)] above:
(a)immediately before the Acquisition, Heather Lawford held 20 shares, and Heather Lawford and Douglas Lawford jointly held 682 shares, as trustees for the Lawford Family Trust, and immediately after the Acquisition, Heather Lawford held 702 shares as trustee for the Lawford Family Trust;
(b)immediately before the Acquisition, Michael Berry held 10 shares, and Michael Berry and Susan Berry jointly held 341 shares, as trustees for the Kelly Berry Family Trust, and immediately after the Acquisition, Michael Berry held 351 shares as trustee for the Kelly Berry Family Trust; and
(c)immediately before the Acquisition, David Van Beelan held 10 shares, and David Van Beelan and Karen Van Beelan held 340 shares, as trustees for the DKVB Superannuation Fund Trust, and immediately after the Acquisition, David Van Beelan and Karen Van Beelan held 350 shares as trustees for the DKVB Superannuation Fund Trust.
On 7 December 2018, the Applicant applied for an exemption from landholder duty on the Acquisition.
On 1 August 2019 the Applicant lodged a Landholder Acquisition & Foreign Landholder Duty Declaration form for the Acquisition.
On 3 August 2020, the Applicant and Mr McDowell entered into a deed titled 'Agreement to Variation of Share Swap Agreement dated 15 December 2017', which stated, in particular, that:
Due to an administration/drafting error in the [Share Swap Agreement], the 1 share in the [Applicant] held by Anthony McDowell was not cancelled at the time of the transaction.
and that:
1. It was agreed that that to correct this error, the 1 share held by Anthony McDowell be cancelled immediately effective 15 December 2017.
2. This is effected by way of any (sic) selective buy-back pursuant to S257F of the Corporations Act. The buy-back price will be $1.00, and any dividends paid in the 1 share are to be repaid.
On 13 August 2020, the Applicant lodged the following ASIC forms:
(a) Form 280, signed on 3 August 2020, Notification of share buy‑back details; and
(b) Form 281, signed on 3 August 2020, Notice of intention to carry out a share buyback.
On 2 September 2020, the Applicant lodged ASIC Form 484, signed on 21 August 2020, notifying ASIC of the cancellation of the share in the Applicant held by Mr McDowell, with the earliest date of cancellation stated to be 21 August 2020.
On 5 January 2021, the Commissioner refused to grant the exemption for the Acquisition and issued a notice of assessment to the Applicant for landholder duty of $161,403.30 plus a late lodgement penalty of $12,105, calculated on the basis that Abbott had a 70.7% interest in the land held by the AP Trust (the Assessment).
On 2 March 2021 the Applicant lodged an objection against the Assessment.
On 16 August 2023 the Respondent partially allowed the objection.
On 1 September 2023 the Commissioner issued a new notice of assessment to the Applicant for landholder duty of $134,157.50 plus a late lodgement penalty of $10,061 (the Amended Assessment).
On 11 October 2023 the Applicant applied to the State Administrative Tribunal for review of the Respondent's decision on the objection.
On 16 April 2024 the Tribunal made orders by consent inviting the Respondent to reconsider its decision, which the Respondent did. As a result, on 19 April 2024, the Respondent issued a reassessment to the Applicant for landholder duty of $95,769.95 plus a late lodgement penalty of $7,182.00 (Second Amended Assessment), calculated on the basis that Abbott had a 50.55% interest in the land held by the AP Trust.

The parties' submissions

The Applicant does not dispute that:
(a)immediately before the Acquisition, Abbott was a landholder within the meaning of s 155(2) of the Act;
(b)landholder duty is chargeable on the Acquisition pursuant to s 151 of the Act; and
(c)the duty was correctly calculated in the Second Amended Assessment.
The Respondent does not dispute that the Applicant has complied with the requirements of s 262 of the Act in its application for an exemption from landholder duty on the Acquisition, and that, if the Acquisition is a 'relevant consolidation transaction' within the meaning of s 259 of the Act, it should be exempted from the landholder duty otherwise chargeable, under s 263(1) of the Act.
The Respondent relies on s 259(4) of the Act in submitting that the Acquisition is not a 'relevant consolidation transaction' under that section and, therefore, that the Commissioner was not required to exempt the Acquisition from landholder duty under s 263(1) of the Act. As I have said, the dispute between the parties turns primarily on the construction of the words 'those securities' in ss 259(4)(a) and (b).
The Respondent submits that the words 'those securities' refer to the total number of the Applicant's securities (in this case, shares). The Applicant submits that those words refer only to the Applicant's Issued Shares; that is the Applicant's shares issued for the purposes of the Acquisition.
As has been said, on the facts, Mr McDowell:
(a)held a single share in the Applicant immediately after the Acquisition;
(b)did not hold any of Abbott's shares immediately before the Acquisition.
Consequently, if the Respondent's contended construction is correct:
(a)each person holding 'those securities' immediately after the Acquisition was not a person that held Abbott's securities immediately before the Acquisition, as required by s 259(4)(a) of the Act; and
(b)the proportion of 'those securities' held by each of the Applicant's shareholders immediately after the Acquisition was not the same proportion that they had held of Abbott's securities, as required by s 259(4)(b) of the Act.
The Respondent also submits that the requirements of s 259(4)(a) and (b) have not been met because there were differences between the number of the Applicant's shares held by some of the Sellers compared to the number of Abbott's shares those Sellers had previously held.
If the Applicant's contended construction of the words 'those securities' is correct, the relevant comparison is between the Abbott shares held by the Sellers immediately before the Acquisition and the Applicant's Issued Shares, which do not include Mr McDowell's single share.
If the Applicant's contended construction is correct:
(a)immediately after the Acquisition, all the persons that held 'those securities' (the Sellers) had held Abbott's securities before the Acquisition, as required by s 259(4)(a);
(b)immediately after the Acquisition each of the Sellers held the same proportion of 'those securities' as they had held of Abbott's securities before the Acquisition, as required by s 259(4)(b).
The Applicant accepts that there are differences between the number of the Applicant's Issued Shares held by some of the Sellers after the Acquisition compared with the number of Abbott's shares the same Sellers had held before the Acquisition. However, the Applicant submits that these differences are not relevant because, in each case, the shares were held on trust for the same beneficiary and the only change was in the identity of the trustees. At the hearing, the Respondent accepted that the shares were held on the same trusts but said that this was not a relevant consideration.
The Applicant says that, if the Acquisition is not exempt under s 259 of the Act, the Respondent has a discretion to exempt the Acquisition from duty under s 7 of the TAA, and should have done so in the interests of good management, in circumstances where:
(a)the share issued to Mr McDowell was solely for the purpose of incorporating the Applicant so that the Applicant could participate in the Acquisition;
(b)after the Acquisition, Mr McDowell's share represented a 0.004752% interest in the Applicant's shares, which, the Applicant submitted, did not result in a substantive change in those holding an interest in Abbott;
(c)Mr McDowell did not benefit as a shareholder of the original share; and
(d)immediately upon the Applicant becoming aware that Mr McDowell continued to hold a share, the Applicant took steps to buy back that share.
The Respondent says that the Commissioner does not have any discretion under s 7 of the TAA to grant the Applicant an exemption to which it is not entitled, or to allow an objection against a correct assessment.
The Respondent says that the Commissioner does have a discretion under s 20A of the TAA to enter into a compromise agreement with a taxpayer in relation to an assessment, if considered appropriate to do so to avoid undue delay or expense. However, the Respondent says that the Commissioner cannot be compelled to enter into such an agreement and the decision whether to do so cannot be reviewed. In any event, the Respondent says that there is no basis on which to enter into a compromise agreement where the duty has been paid, as in this case, and where the burden of any mistake in structuring the transaction that led to the imposition of duty should lie with the taxpayer (or its advisers) and not on the revenue.
Further, the Respondent says that the Tribunal cannot, in these proceedings, exercise any discretion under s 7 or s 20A of the TAA. The Applicant disclaimed reliance on s 20A of the TAA.
The Applicant did not seek to argue that the matters referred to in [35] to [37] were relevant to the application of s 259 of the Act in this case; that is the Applicant did not attempt to argue that those matters had the effect of retrospectively cancelling Mr McDowell's share. The relevance of those paragraphs, as I understood it, was to the Applicant's submission on the exercise of discretion if the Acquisition was not exempt.

Is the Acquisition a 'relevant consolidation transaction'

Legal principles of statutory construction

In Australian Leisure and Hospitality Group Pty Ltd v Commissioner of Police, Buss P summarise the principles applying to statutory construction generally, as follows:[9]
151the focus of statutory construction is upon the text of the provisions having regard to their context and purpose.
152the statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text requires consideration of the context, including the general purpose and policy of the provision.
153the context includes the existing state of the law, the history of the legislative scheme and the mischief to which the statute is directed.
154however, legislative history and extrinsic material cannot displace the meaning of the statutory text. Further, the examination of legislative history and extrinsic materials is not an end in itself.
155the purpose of legislation must be derived from the statutory text and not from any assumption about the desired or desirable reach or operation of the provisions. The intended reach of a statutory provision is to be discerned from the words of the provision and not by making an a priori assumption about its purpose.
[9] Australian Leisure and Hospitality Group Pty Ltd v Commissioner of Police [2020] WASCA 157; (2020) 56 WAR 102 at [151] to [155], Quinlan CJ and Vaughan JA agreeing at [3].
In CIC Insurance Ltd v Bankstown Football Club Ltd Brennan CJ, Dawson, Toohey and Gummow JJ said:[10]
It is well-settled that at common law … the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous … [I]f the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.
[10] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; (1997) 141 ALR 618 at [88], Brennan CJ, Dawson, Toohey and Gummow JJ.
In Project Blue Sky Inc v Australian Broadcasting Authority McHugh, Gummow, Kirby, and Hayne JJ said:[11]
Ordinarily … the legal meaning [of a statutory provision] … will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
[11] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 153 ALR 490 at [78], Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ.
Section 18 of the Interpretation Act 1984 (WA) provides that a construction that would promote the purpose or object of a written law is to be preferred over a construction that would not promote that purpose. However, this section does not permit a court or tribunal to rewrite the legislation by reference to its purposes or objects.[12]

Construction of s 259(4) of the Act

[12] Australian Leisure and Hospitality Group Pty Ltd v Commissioner of Police [2020] WASCA 157; (2020) 56 WAR 102 at [159], Quinlan CJ and Vaughan JA agreeing at [3].

There is no dispute in this case that:
(a)Abbott is an entity, being a corporation;[13]
(b)immediately before the Acquisition, Abbott was a landholder;[14]
(c)by the Acquisition, the Applicant acquired a significant interest in Abbott, having had no interest in Abbott before the Acquisition;[15]
(d)accordingly, the Acquisition was a 'relevant acquisition' within the meaning of s 163(1)(a) on which landholder duty is chargeable under s 151 of the Act.
[13] See s 152 of the Act.
[14] See the definition of 'landholder' in s 155(2) of the Act.
[15] See s 161 of the Act for the definition of 'significant interest' and s 160 for how an 'interest' is 'acquired'.
As has been said, whether the Acquisition was a 'relevant consolidation transaction' within the meaning of s 259 of the Act largely rests on the meaning of the words 'those securities' in s 259(4)(a) and (b).
On the Respondent's proposed construction, the words 'those securities' means all the head entity's securities: in this case, all the Applicant's 21,043 issued shares. On the Applicant's proposed construction, those words mean only those of the head entity's shares that were issued for the purpose of providing the consideration for the acquisition of the affected entity's shares by the head entity: in this case, the Applicant's Issued Shares, being the 21,042 shares that were issued to the Sellers as consideration for the Acquisition.
It is also not in dispute that, if the words 'those securities' have the meaning contended by the Respondent, the Acquisition is not a 'relevant consolidation transaction' within the meaning of s 259. That follows because:
(a)the total number of Abbott's shares immediately before the Acquisition was 21,042;
(b)the total number of the Applicant's shares immediately after the Acquisition was 21,043, because of the existence of Mr McDowell's share;
(c)a Seller who held one share in Abbott before the Acquisition held 1/21,042 of Abbott's issued shares;
(d)the same Seller who held one share in the Applicant after the Acquisition held 1/21,043 of the Applicant's total shares; and
(e)self-evidently, those proportions are not the same.
The difference in proportion is clearly very small. However, it was not contested by the Applicant that this difference was sufficient to exclude the Acquisition from entitlement to the exemption, subject to the issue of the exercise of discretion to allow the exemption under s 7 of the TAA.
If, however, the words 'those securities' have the meaning contended for by the Applicant, the Acquisition would be a 'relevant consolidation transaction' because:
(a)the total number of Abbott's shares immediately before the Acquisition was 21,042;
(b)the total number of the Applicant's Issued Shares immediately after the Acquisition was 21,042;
(c)a Seller who held one share in Abbott before the Acquisition held 1/21,042 of Abbott's issued shares;
(d)the same Seller who held one share in the Applicant after the Acquisition held 1/21,042 of the Applicant's Issued Shares; and
(e)self-evidently, these proportions are the same.
In my view, both constructions are open. However, in my view, for the reasons that follow, the construction contended for by the Respondent is correct and the words 'those securities' refer to the head entity's securities in total, and not to only those of the head entity's securities issued or transferred for the purpose of the acquisition on which duty is chargeable.
The words 'those securities' clearly have the same meaning in both s 259(4)(a) and s 259(4)(b) and refer to the head entity's securities.
The construction contended for by the Applicant is plainly open given that the words 'immediately after the issue or transfer of', in the chapeau to s 259(4), appear immediately before the words 'the head entity's securities'. That proximity supports a construction that the words 'immediately after the issue or transfer of' are intended to modify the scope of the head entity's securities that are to be considered in ss 259(4)(a) and (b). The Respondent did not seek to argue that such a construction was not open. Indeed, on a strict grammatical construction of s 259(4) alone, that may be said to be the obvious construction of the words 'those securities'. However, in my view that construction cannot be given to the words 'those securities' when considered in the context of the whole of s 259 and considering the apparent purpose of the exemption.

To be a 'relevant consolidation transaction' under s 259(2) of the Act, an acquisition must be made solely for the purpose of a 'corporate consolidation': that is, the formation of a family by the interposition of the head entity between the affected entity and the holders of the affected entity's securities, which, in the case of a corporation, are the affected entity's shareholders.
The word 'interposition' is not defined in the Act. In the Shorter Oxford English Dictionary, the word 'interposition' is defined as 'the action or placing oneself or something between; the fact or condition of being placed between'. The contents of the explanatory memorandum, referred to at [21] and [22] above, support the word 'interposition' bearing this ordinary meaning.
The means by which a 'relevant consolidation transaction' achieves the interposition of a head entity between an affected entity and the affected entity's security holders is set out in ss 259(2)(a) and (b) of the Act, which contemplate two types of transactions. First, under s 259(2)(a), the head entity acquires the affected entity's securities from the affected entity's security holders by issuing or transferring the head entity's securities to the affected entity's security holders. Second, under s 259(2)(b), the holders of the affected entity's securities acquire the head entity's securities.
Section 259(2)(a) requires that the issue of the head entity's securities be the only consideration given by the head entity to the person from whom the affected entity's securities are acquired (that is, the affected entity's security holders).
Section 259(5) of the Act requires, in effect, that no part of the consideration for the acquisition, or an 'associated acquisition' can be provided by a person who is not a member of the 'family' being created by the 'corporate consolidation' referred to in s 259(2). The members of the 'family' created by the acquisition are the head entity and the affected entity, and their subsidiaries, if any. Accordingly, the security holders of each are not members of the 'family'.
Section 259(6) provides, in effect, that the acquisition of the affected entity's securities by the head entity from the affected entity's security holders, contemplated in s 259(2)(a), on the one hand, and the acquisition by the affected entity's security holders of the head entity's securities, contemplated in s 259(2)(b), on the other, are each 'associated acquisitions' of the other if they are for the purpose of the same corporate consolidation.
Section 259(7) of the Act provides for an exception from the requirement in s 259(5) that no consideration be provided by a non‑family member, if the acquisition, or associated acquisition, is of a kind referred to in s 259(2)(b) and the consideration is the transfer of the affected entity's securities by the holder of those securities to the head entity.
Accordingly, by the operation of ss 259(2), (5) and (7) of the Act the only transactions that could be 'relevant consolidation transactions' are those where the holder of securities in the affected entity receives shares in the head entity, either by issue or transfer, in exchange for transfer of the holder's securities in the affected entity to the head entity.
As a result, if the words 'those securities' in s 259(4) of the Act are constructed to refer to only those of the head entity's securities that were issued or transferred in consideration for the head entity's acquisition of the affected entity's shares, s 259(4)(a) has no apparent work to do. This is because the persons who hold 'those securities' after that acquisition, that is the persons who receive the consideration of the head entity's shares, would necessarily be the same persons who held the affected entity's shares.
If, however, the words 'those securities' refer to the head entity's securities in total, s 259(4)(a) does have work to do, by ensuring that only the people who were security holders of the affected entity hold securities of the head entity after the corporate consolidation has taken place.
The 'corporate consolidation' contemplated under s 259(1) of the Act requires that the head entity be placed between the affected entity and 'the holders of the affected entity's securities'. The use of the definite article 'the', in my view, refers to all the affected entity's security holders, consistent with the meaning of the word 'interposition' as placing the head entity between the affected entity and those security holders. That is, I accept the Respondent's submission that the interposition of the head entity between the affected entity and 'the holders of the affected entity's securities' requires the head entity to acquire all the shares held by all the affected entity's security holders.
In my view, the purpose of the words 'the issue or transfer of' before the words 'head entity's securities' is not to modify the words 'head entity's securities' but rather, in conjunction with the words 'immediately after', to precisely identify the time at which the assessment of the relevant shareholdings is to take place.
It was not entirely clear whether the Applicant also relied in support of its proposed construction on the fact that s 257(2) of the Act contemplates that a 'parent' entity may hold only 90% of the securities of a subsidiary, rather than the 100% contemplated on a construction of 'those securities' as all the head entity's issued securities. However, that does not alter my view as to the proper construction of the words 'those securities' in s 259(4) of the Act. The prescribed level of security holding to constitute a 'parent' in s 257(2) is otherwise relevant to identify the members of the 'family' that may avail themselves, under s 260, of an exemption available to another type of 'relevant' transaction', namely a 'relevant reconstruction transaction'.
The construction of the words 'those securities' as referring to all of the head entity's securities, and not just those issued or transferred for the purposes of the transaction, is consistent with the apparent legislative intent, drawn from the content of s 259 as a whole, and the explanatory memoranda referred to above, that the purpose of the exemption is to facilitate the establishment of more efficient corporate structures, by allowing the creation of a 'family' by interposing the head entity between the affected entity and its security holders, resulting in no substantive change in interests because the ultimate security holders are the same, with the same proportional interest. In other words, s 259(4) does not operate to exempt from duty a transaction that results in a holder of the head entity's securities effectively gaining an interest in a landholder (the affected entity)[16] that the same person did not have before the acquisition of the affected entity's securities by the head entity.
[16] As has been said, a landholder is an entity that holds land assets in Western Australia. Section 259(3) provides that an acquisition is not a 'relevant consolidation transaction' if immediately before the acquisition the head entity held dutiable property or a vehicle or an interest in an entity. The definition of 'dutiable property' under s 15 and s 16 of the Act encompasses everything that falls within the definition of 'land assets' in Ch 3, Pt 1, s 148 of the Act. Accordingly, the affected entity must be the entity that is entitled to land assets in Western Australia and, therefore, the landholder. The head entity becomes a landholder upon the transfer of the affected entity's shares to it.
The decision in CPD001 Pty Ltd v Chief Commissioner of State Revenue (NSW)[17] provides some support for my conclusion as to the correct construction of 'those securities', although not directly on point. That case concerned s 273D(2) of the Duties Act 1997 (NSW), a provision in similar terms to s 259(3) of the Act. In his reasons, Senior Member Boxall referred to s 273D(3), a provision in similar terms to s 259(4), saying:[18]
The words 'immediately before the transfer or acquisition occurred' in section 273D make it clear that precision in timing and order is essential to ensure compliance with the requirements for the exemption. This requirement, and that in section 273D (3) as to the congruence of interests pre and post-reconstruction, are not mere arbitrary rules: they clearly have an underlying purpose, being to ensure that reconstruction transactions cannot be used as vehicles to effect substantive changes to property interests.
[17] CPD001 Pty Ltd v Chief Commissioner of State Revenue (NSW) [2022] NSWCATAD 273.
[18] CPD001 Pty Ltd v Chief Commissioner of State Revenue (NSW) at [83].
As the Applicant submits, the difference in the proportions in this case is marginal. The evidence in [35] to [37] above supports an inference that there was no intention that Mr McDowell benefit from the Acquisition and the failure to cancel his share before the Acquisition was an oversight. However, whilst very small, the difference is still one of substance. In addition, the construction the Applicant contends for leaves open the possibility, in different circumstances, that greater interests in landholders could be created without the imposition of duty, albeit that the requirement in s 259(2)(a) (that the only consideration for the acquisition of the affected entity's securities given by the head entity is the issue or transfer of its securities) may be a limiting factor. However, the potential for this to occur, contrary to the apparent purpose of s 259, weighs against the construction contended for by the Applicant.
Given that I have found for the Respondent on the construction of s 259(4) of the Act, it follows that the Acquisition is not a 'relevant consolidation transaction' and is not exempt from the landholder duty that is otherwise chargeable under s 151 of the Act.

Shareholdings held on trust

In any event, I am satisfied that, on the facts of this case, the Acquisition is not a 'relevant consolidation transaction' within the meaning of s 259 of the Act, even if I had accepted the construction of s 259(4) contended for by the Applicant.
On the evidence, there are two individuals who held shares in Abbott who do not hold shares in the Applicant after the Acquisition: Douglas Lawford who held 682 shares jointly with Heather Lawford before the Acquisition and none afterwards, and Susan Berry, who held 341 shares jointly with Michael Berry before the Acquisition and none afterwards. However, arguably there is no requirement in s 259(a) that all the affected entity's shareholders become shareholders in the head entity immediately after the acquisition. Rather, the requirement is that the holders of head entity's shares immediately after the acquisition be the affected entity's shareholders immediately before the acquisition. In this case, every person who held the shares in the Applicant immediately after the Acquisition is a person who had held shares in Abbott immediately before the Acquisition and the Applicant acquired all of Abbott's shares.
That said the difference in the shareholdings mean that the proportions of shares held by other shareholders are not the same immediately after the Acquisition as immediately before it, as is required by s 259(4)(b) of the Act.
Heather Lawford held 702 shares before the Acquisition, 20 in her sole name, and 682 jointly with Douglas Lawford. Where persons own property jointly each shares a right to the whole of the property without an individual right to an undivided share, although, for the purposes of alienation, each is entitled to dispose of only a particular part.[19] It would, therefore, appear to be arguable that Heather Lawford's shareholding is proportionally no different after the Acquisition than before. The same might be argued about the shareholdings of Michael Berry[20] and David Van Beelan.[21]
[19] Wright v Gibbons (1949) 78 CLR 313 at 330, 331.
[20] 10 shares in his sole name and 341 held jointly with Susan Berry before the Acquisition and 351 held in his sole name after the Acquisition.
[21] 10 shares in his sole name and 340 held jointly with Karen Van Beelan before the Acquisition and 350 held jointly with Karen Van Beelan after the Acquisition.
However, whatever the merits of that argument, there is one shareholder who plainly held a greater proportion of the head entity's shares after the Acquisition than she held of the affected entity's shares before the Acquisition. Before the Acquisition, Karen Van Beelan held 340 shares jointly with David Van Beelan. After the Acquisition, Karen Van Beelan held 350 shares jointly with David Van Beelan.
Even on the construction contended for by the Applicant, where the proportions are calculated with reference only to the Applicant's Issued Shares, Karen Van Beelan held a different proportion of shares immediately after the Acquisition than she did immediately before; 340/20,041 before as against 350/20,041 afterwards. Again, the difference in the proportions is very small. However, in my view, it is sufficient to exclude the Acquisition from an entitlement to an exemption.
I do not accept the Applicant's submission that these differences do not matter because the shares are held on the same trusts in the same proportions. Section 259 refers to the holders of the relevant securities. The trustees, as the legal owners of the shares, are the holders of those shares with all the rights attached to that ownership, albeit that they must exercise those rights for the benefit of the beneficiaries.[22] There is no basis for undertaking the comparisons required by s 259(4)(b) with reference to the trusts on which shares were held rather than the persons holding those shares.
[22] DKLR Holdings Co (No 2) v Commissioner of Stamp Duties [1980] 1 NSWLR 510 at [16].
Accordingly, even if I am wrong in my construction of s 259(4), on the facts the Acquisition is not a 'relevant consolidation transaction' under s 259 and is not exempt from the landholder duty that is otherwise chargeable.

Discretion to allow exemption under s 7 of the TAA

These proceedings are brought under s 40(1) of the TAA which provides:
(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.
(2)A person ceases to be entitled to apply to the State Administrative Tribunal for a review of a decision on an objection against an interim assessment if the assessment following the interim assessment is made before the person makes an application under subsection (1) for a review of the decision.
(3)Subsection (1) does not apply to, or in respect of, a decision if this Act expressly provides that the decision is not subject to review under this Act.
An application under s 40(1) of the TAA is within the review jurisdiction of the Tribunal and is a reviewable decision for the purposes of the State Administrative Tribunal Act 2004 (WA) (SAT Act).[23]
[23]Section 17 of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
Accordingly, the Tribunal must deal with the matter in accordance with the Act and the SAT Act.[24]
[24] Section 18 of the SAT Act.
Section 29 of the SAT Act provides, in part, as follows:
(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.
The decision under review in this case is the Respondent's decision to refuse to allow the Applicant's objection when invited to reconsider its decision, resulting in the Second Amended Assessment.[25] Section 29(1) of the SAT Act confers on the Tribunal the Respondent's functions and discretions in determining whether to allow the objection.
[25] Section 31 of the SAT Act provides that if the decision maker, varies or substitutes its decision after being invited to reconsider, the proceedings for review are taken to be for review of the decision as varied or the substituted decision.
Section 34(a) of the TAA confers on a taxpayer the right to object to an assessment. Section 37(1) of the TAA sets out the Commissioner's obligations in relation to an objection, in part, as follows:
The Commissioner must consider and determine an objection, having regard to -
(a)The grounds set out in the objection and any other relevant written material submitted by the taxpayer; and
(b)…
(c)If the objection is not against an interim assessment -
Any other information relevant to considering the objection, whether obtained by the Commissioner before or after the objection was lodged.
Section 37(2) of the Act provides that 'the onus of establishing that an assessment or decision to which an objection relates is invalid or incorrect lies with the taxpayer'. Accordingly, the Applicant bears the onus of proving the facts necessary to bring the Acquisition within the exemption under s 263(1) of the Act.[26]
[26] Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107 at [15] Chaney J.
Following the consideration and determination of the objection referred to in s 37(1) of the TAA, s 37(4) provides as follows:
On determining an objection, the Commissioner must serve on the taxpayer a notice setting out -
(a)the decision on the objection; and
(b)if the objection is disallowed in whole or in part - the reasons for the decision.
Section 39(1) of the TAA requires that, if the objection is allowed wholly or in part, the Commissioner must make a reassessment accordingly.
Subject to the argument as to the interpretation of s 259, the Applicant does not suggest the Second Amended Assessment is invalid or incorrect.
Under s 263(1)(a) of the Act, as has been said, the Commissioner (and the Respondent as the Commissioner's delegate) must exempt a transaction from the duty otherwise chargeable if there has been a 'relevant transaction'. Subsection (2) provides that the Commissioner must reassess a transaction that was assessed before it was exempted. Subsection (4) provides for certain circumstances where the Commissioner cannot grant an exemption. However, there is nothing in s 263 or elsewhere in the Act which confers a discretion on the Commissioner to exempt a transaction if it is not a 'relevant transaction'.
Neither do the provisions of the TAA referred to above confer any discretion on the Commissioner, and therefore the Respondent as the Commissioner's delegate, to allow an objection on any basis other than that the assessment objected to was invalid or incorrect. Section 37(2) of the TAA is predicated on the basis that the objection will only be allowed if the objector satisfies the Commissioner that the assessment is invalid or incorrect.
Section 7 of the TAA provides as follows:
(1)The Commissioner has the general administration of the taxations Acts and may do anything necessary or convenient to be done for that purpose.
(2)Without limiting subsection (1) the Commissioner may -
(a)deal with a taxation matter in any manner; and
(b)exercise in relation to a taxation matter any discretion,
that the Commissioner considers appropriate in the interests of good management.
(3)In subsection (2) -
taxation matter means any matter or thing arising under or in relation to a taxation Act.

The Applicant submits that the purpose of s 7(2) of the TAA was to require the Commissioner have regard to the common law rules of good management as articulated by Lord Scarman in Inland Revenue Commissioners v National Federation of Self-Employed & Small Businesses Ltd, as follows:[27]
… that in the daily discharge of their duties inspectors are constantly required to balance the duty to collect 'every part' of due tax against the duty of good management. This conflict of duties can be resolved only be good managerial decisions, some of which will inevitably mean that not all tax known to be due will be collected.
[27] Inland Revenue Commissioners v National Federation of Self-Employed & Small Businesses Ltd (1982) AC 617, 651.
The Respondent points to s 20A of the TAA, which was inserted by the Revenue Laws Amendment Act (No. 2)2008 (WA) at the same time as the general administrative power under s 7, as conferring on the Commissioner a discretion to compromise on an assessment.
Section 20A(1) of the TAA provides, in summary, that the Commissioner may settle a dispute with a taxpayer by entering into an agreement in relation to an assessment, and to make an assessment in accordance with the agreement, if the Commissioner considers it appropriate to avoid undue delay or expense. Section 20A(3) provides that a decision made by the Commissioner under that section is not subject to objection or review, or any other form of appeal, and s 20A(4) provides that no action may be brought in any court or tribunal to compel the Commissioner to make a compromise agreement.
I accept, as submitted by the Respondent, that the Commissioner's powers to compromise disputes as to assessments are governed by s 20A, and that s 7 of the TAA supplements that power (in particular) by allowing the Commissioner to do anything necessary or convenient give effect to the exercise of the power. However, in light of the specific power in s 20A, I do not accept that s 7 confers any additional substantive power on the Commissioner to compromise a dispute.
It does not appear to be in dispute in this matter that the relevant duty has already been collected. Even taking into account the 'good management rule' the Applicant relies on, it is difficult to see how good management requires the Commissioner to refund a taxpayer from payment of a correct assessment. Certainly, however, the apparent legislative intent is that there be no review of the exercise, or failure to exercise, that discretion.
In any event, even if I were satisfied that there was such a separate power under s 7 of the TAA, which I am not, I do not consider it is open to me to exercise it.
As submitted by the Respondent, in Dunbar and Commissioner of Police, Deputy President Chaney (as his Honour then was) held:[28]
Nothing in s 29, or any other provision of the SAT Act, places the Tribunal in the shoes of the [original] decision maker for any purpose other than dealing with the decision under review. It is not open to the Tribunal to exercise some other discretion vested in the decision maker where a decision in the exercise of that discretion is not the subject of the review …
[28] Dunbar and Commissioner of Police [2007] WASAT 90 at [19].
The decision under review is the Applicant's objection to the decision to refuse to allow the exemption claimed under s 263(1) of the Act. The Applicant cannot succeed unless I am satisfied that the decision to refuse to allow the objection was wrong. I am not satisfied of that. Accordingly, the Application must be dismissed. I have no greater power.
It is, accordingly, not necessary for me to consider whether I should exercise any such discretion were it open to me to do so.

Correct and Preferable Decision

In my view, for the reasons I have given, the correct and preferable decision is that:
(a)the Applicant's acquisition of Abbott's shares is not a 'relevant consolidation transaction' within the meaning of s 259(4) of the Act. Accordingly, the Acquisition is not eligible for an exemption from landholder duty under s 263(1) of the Act;
(b)the Tribunal has no discretion to exempt the Acquisition from payment of the landholder duty; and
(c)accordingly, the Applicant's application must be dismissed.

Orders

The Tribunal orders that the application is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
GH
Associate to Deputy President Judge Vernon
11 DECEMBER 2024

Table
Name	No. of shares in Abbott immediately before the Acquisition	No. of shares in the Applicant immediately after the Acquisition
Heather Lawford	20	702
Heather Lawford and Douglas Lawford jointly	682	0
Michael Berry	10	351
Michael Berry and Susan Berry jointly	341	0
David Van Beelan	10	0
David Van Beelan and Karen Van Beelan jointly	340	350