Asciano Properties Operations Pty Ltd v Commissioner of State Revenue
[2009] VSC 329
•18 August 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
VICTORIAN TAXATION APPEALS LIST
No. 7310 of 2008
| ASCIANO PROPERTIES OPERATIONS PTY LTD | Appellant |
| v | |
| COMMISSIONER OF STATE REVENUE | Respondent |
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JUDGE: | Mandie J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 August 2009 | |
DATE OF JUDGMENT: | 18 August 2009 | |
CASE MAY BE CITED AS: | Asciano Properties Operations Pty Ltd v Commissioner of State Revenue | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 329 | |
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TAXATION – Duties Act 2000 (Vic) – exemption for transfer between members of the same corporate group – whether exemption revocable by Commissioner as a result of transferee ceasing to be member of the same corporate group – whether transferee ceased to be member of the same corporate group by virtue of a “public float” – whether issue of stapled securities to existing shareholders of the parent company under schemes of arrangement constituted a “share float” and whether such issue was an offer to the public generally and thereby a “public float” as defined – ss.250B, 250D(1)(a), 250D(2) and 250D(3) of the Duties Act 2000I (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J Hmelnitsky | Clayton Utz |
| For the Respondent | Mr P Crutchfield | Solicitor for the Commissioner of State Revenue |
HIS HONOUR:
Introduction
The appellant, Asciano Properties Operations Pty Ltd, challenges an assessment of duty by the respondent, Commissioner of State Revenue, upon an instrument of transfer of a property in Laverton, pursuant to the Duties Act 2000 (Vic) (“the Act”). At the time that the transfer was delivered to the appellant, both the transferor and the appellant were members of the same corporate group, the parent company being Toll Holdings Ltd (“Toll”). As a result, the appellant was prima facie entitled to apply to the Commissioner and to obtain an exemption from duty on the transfer pursuant to s.250B of the Act.
On the same day and shortly after the transfer was delivered to the appellant, the appellant became no longer a member of the same corporate group as the transferor, by virtue of schemes of arrangement which effected a “demerger” that resulted in the appellant becoming a subsidiary of Asciano Ltd, a company formed to take over certain infrastructure assets formerly owned by the Toll group. Those assets included the land the subject of the transfer assessed for duty.
As a result of the “severance” of the appellant from the Toll group, the Commissioner prima facie had a discretion under s.250D(1)(a) of the Act to revoke any exemption previously granted under s.250B of the Act. In fact, what happened was that the appellant applied for the exemption prior to the transaction in question but the Commissioner later refused to grant the exemption for the reason, at least as now explained by Counsel for the Commissioner, that it would have been immediately revoked, if granted. The appellant contends, however, that the Commissioner did not have any discretion to revoke such exemption (if granted) because the circumstances fell within the “public float” exception contained in s.250D(2) of the Act. The central question on the appeal is whether the appellant’s severance from the corporate group occurred as a result of a “public float.”
In order to understand the issues, and before referring in more detail to the factual background, I will summarise the relevant provisions of the Act.
Relevant provisions of the Act
Chapter 11 of the Act deals with general exemptions from duty and Part 2 of that Chapter is concerned with corporate reconstructions. In particular, Division 1 of Part 2 deals with what is described as a “corporate reconstruction exemption.” For that purpose, an “eligible transaction” is defined to include[1] “a transfer of dutiable property from one member of a corporate group to another member of the group.” It is unnecessary to refer to the definition of a “corporate group” because, as will be seen, the Commissioner ultimately accepted that the evidence before the Court shows that the transfer of the Laverton property was indeed from one member of a corporate group to another member of the same group.
[1]See s.250A(a) of the Act.
Section 250B(1) of the Act provides that a member of a relevant corporate group may apply to the Commissioner for an exemption at any time before the eligible transaction occurs. Section 250B(2) relevantly provides that the Commissioner must grant an exemption from duty under the Act on an instrument or transfer of dutiable property if the Commissioner is satisfied that the instrument or transfer is, or arises out of, an eligible transaction.
Section 250D(1)(a) provides that the Commissioner may revoke the exemption if the members of the relevant corporate group do not remain members of the group for a period of at least 3 years commencing immediately after the day on which the transaction occurred in respect of which the exemption was granted.
However, s.250D(2) provides that sub-section (1)(a) does not apply:
“if the Commissioner is satisfied that a corporation that was a member of the relevant corporate group on the day on which the transaction occurred in respect of which the exemption was granted ceases to be a member of the group by virtue of –
(a) a public float that occurred within 12 months after the day on which the transaction occurred.”
Section 250D(3) provides that, in s.250D:
“public float means a share float or an offer of units to create a public unit trust scheme –
(a) the shares or units of which are quoted on the Australian Stock Exchange…and are offered to the public generally; and
(b) of which the issue of the shares or units to the public does not give any person and their related persons (other than the corporate entity that floated the shares or the units) a combined beneficial interest in the floated entity greater than 20%;…”
Facts
On or about 30 May 2007 the Commissioner received from Toll an application on the appropriate form for an exemption in relation to an eligible transaction which had not yet occurred, being a transfer of land at Cherry Lane, Laverton North from Maremma Pty Ltd to the appellant. The application stated that the eligible transaction was due to occur on 15 June 2007. The application was accompanied by a lengthy letter to the Commissioner dated 24 May 2007 from KPMG, on behalf of the appellant. The letter disclosed that the Toll group of companies was to undergo a restructure and a demerger of certain infrastructure assets and that a number of existing companies and assets were to be transferred to Asciano Ltd, a newly incorporated entity within the Toll group and that, subsequently, a scheme of arrangement would be implemented under which each shareholder in Toll would be offered shares in Asciano stapled to a unit in a trust (“the stapled securities”) and that there would also be an offer of stapled securities to some institutional investors and that the stapled securities would be listed on the ASX.
This Court had made orders for meetings of the ordinary shareholders in Toll[2] and those meetings were held on 28 May 2007. Two schemes of arrangement between Toll and its shareholders were agreed to at those meetings by the requisite majorities. In addition, the said shareholders resolved to approve reductions of capital in Toll for the purposes of the two schemes. It is unnecessary to refer to the details of these schemes. It is sufficient to say that their effect was to apply moneys derived from the reductions of capital and certain dividends as payment for the stapled securities and that the shareholders in Toll were entitled to be issued with one stapled security in Asciano Ltd for each ordinary share held by them in Toll. The schemes provided that they would take effect on the Effective Date (being the date on which the office copy of the Court orders approving the schemes were lodged with ASIC). In the event, this Court approved the schemes and the office copies of the orders were lodged on 5 June 2007, which was therefore the Effective Date.
[2]The orders were made on 20 April 2007.
Although the schemes took effect from the Effective Date, it was provided therein that the capital reductions and payments of dividends and application of the proceeds thereof to the issue of the stapled securities should occur on the Implementation Date, defined as 15 June 2007. That is what happened. It was common ground on the evidence before the Court that the transfer of the Laverton land took effect on 15 June 2007 at a time when the transferor and the appellant as transferee were part of the same corporate group but that later on the same day the stapled securities were issued and the appellant was then no longer a member of the same corporate group as the transferor.
Two features of or associated with the demerger transaction, that were relied upon by the appellant, need to be mentioned. Toll shares could be traded on the ASX “cum the entitlement” to receive the stapled securities until 5 June 2007 (the Effective Date) and thereafter the stapled securities were able to be traded by the ordinary shareholders entitled to them, on a deferred settlement basis until they were in fact issued to those shareholders.
By letter dated 20 August 2007 the Commissioner advised KPMG on behalf of the appellant that:
“I regret to advise, after careful consideration of the submissions made in relation to the application the Commissioner is unable to grant the exemption under section 250B of the Duties Act 2000 (‘the Act’) as the requirement of a relevant corporate group is not satisfied as a result of the float of Asciano Ltd and the Asciano Finance Trust (collectively ‘the entities’). It is the Commissioner’s position that the float of these entities does not constitute a public float within the meaning of section 250D(3) of the Act as the shares and units in the entities were not offered to the public generally. [The letter went on to refer to a number of decided cases and concluded that duty was payable on the transfer].”
It is to be noted that the Commissioner’s letter, although stating that “the requirement of a relevant corporate group is not satisfied,” did not otherwise seek to expressly rely upon a contention that the transfer was not made between members of the one corporate group. Rather, the positive ground relied upon by the Commissioner for refusing the exemption was in reality related to the Commissioner’s power to revoke an exemption already granted. In other words, the statement and supporting arguments that there was no “public float” were directed to showing that the provision empowering the Commissioner to revoke an exemption was not excluded by the “public float” exception contained in s.250D(2) and (3) of the Act.
On 22 August 2007, the Commissioner forwarded to KPMG a Notice of Assessment, addressed to the appellant, for the sum of $759,000.
By letter dated 19 October 2007, the solicitors for the appellant objected to the Commissioner’s assessment and to “the Commissioner’s decision to not grant [the appellant] an exemption under section 250B of [the Act] or, alternatively, the Commissioner’s decision to revoke the exemption under section 250D of [the Act].” There were two main contentions in the letter of objection which were reiterated on appeal. The first contention was that the demerger transaction constituted a “public float.” The second contention, in the alternative, was that, if the Commissioner had a discretion under s.250D of the Act to revoke an exemption, he should not have done so. Shortly stated, the appellant’s solicitors contended that the demerger transaction involved a share float “in the accepted sense which is the ‘floating’ of a company on the ASX resulting in a change of ownership from ‘closely held’ to ‘public’,” and an offer of the relevant stapled securities and that those stapled securities, once quoted on the ASX, were capable of being bought by any member of the public. Further argument was directed to the specific requirement of “offers to the public generally.” The appellant’s solicitors argued, in the alternative, that, if the Commissioner had a discretion to revoke the exemption, he should not have done so, in essence because “the Restructure delivered the economic equivalent of a ‘public float’.”
The Commissioner disallowed the objection and gave reasons for his determination by letter dated 19 February 2008. The Commissioner said that it was accepted that the relevant parties to the land transfer were members of a “relevant corporate group” and that the transfer would have been an “eligible transaction” but that because the demerger effected an end to the relevant corporate group the Commissioner was entitled to revoke the exemption. The reasons then dealt with the question whether there had been a “public float” such that the exemption could not be revoked. The Commissioner said that there was not a “public float” because the offer of stapled securities was limited to existing shareholders in Toll and there was no offer to the public generally in the sense that anyone who wanted to buy the stapled securities would be able to do so. It was not enough that the stapled securities, once quoted on the ASX, would be available for sale when the initial offer was not open to the public. The reasons set out a number of decided cases in that regard and then went on to consider the appellant’s alternative contention that the Restructure had delivered the economic equivalent of a public float and was a genuine capital market transaction. The Commissioner stated in his letter:
“However, for the reasons stated above, which have been considered in light of maintaining consistency with the treatment of demerger scenarios encountered by the [State Revenue Office] to date, the Commissioner has determined that the float of shares in the entities did not satisfy the definition of a “public float” for [the] purposes of section 250D(3)(a) of the Act. In any event, because stamp duty is transaction based, the Act compels the Commissioner to assess the transaction as it occurred, and not as to how it could have occurred differently with the benefit of hindsight.”[3]
[3]This last statement was probably directed to an argument by the appellant that, if it had failed to fall within the relevant provision, it would have been very easy to modify the transaction so as to satisfy the relevant requirements of the section.
The appellant duly requested the Commissioner to treat its objection as an appeal and it was set down accordingly before this Court.
Submissions
It was common ground that the appeal should be approached on the basis that the transfer to the appellant was an eligible transaction and that an exemption had been or should have been granted and further that, given that the Commissioner had in reality relied upon a statutory ground for revoking such exemption, the issue was whether the Commissioner had a discretion to revoke under s.250D(1)(a) of the Act and, if so, whether that discretion had been properly exercised. The primary question was whether the Commissioner had a discretion to revoke and that turned on whether he was entitled not to be satisfied that the appellant’s ceasing to be a member of the relevant corporate group was “by virtue of a public float that occurred within 12 months after the day on which the transaction occurred.”
The Commissioner submitted that, even if the demerger transaction satisfied the definition of a “public float,” the float had occurred no later than 15 June 2007 and that, accordingly, it had not occurred within 12 months after the date of the transfer but on the date of the transfer (i.e. not after the day on which the transaction occurred). The appellant’s argument in response to this submission was that in substance the period of 12 months after the date of the transaction established an outer time-limit for the occurrence of the transaction but the provision did not mean that a public float which occurred on the same day as the transfer or relevant transaction was excluded, provided that it occurred after the time of the transfer or relevant transaction. I will say at once that I think that the Commissioner’s submission is correct. There is no reason to reject the literal meaning of the provision that the public float must occur after the day of the transfer or relevant transaction – the same day is thus excluded. However, if there was indeed a public float and the only reason that the appellant could not rely upon it was that it “occurred” on the same day as the transfer and not the next day, there would at least be a very strong argument against the exercise of the discretion to revoke for the Commissioner to consider. The Commissioner did not consider the matter on that basis at all because he concluded that there was no public float and I think that is the real question, or the main question, that needs to be decided.
The appellant said that the expressions “public float” and “share float,” except to the extent as defined or indicated in the Act, had no fixed or settled legal meaning. The appellant said that the Act focused upon the shares in question being “quoted on a public exchange” and “offered to the public generally” and that these two matters were concerned with the outcome of a transaction and not the means by which it was implemented. The appellant said that the reference to “shares” in s.250D had to be read in the light of the definition in s.3 of the Act that “shares” included “rights to shares” and that “right” to shares meant “any right (whether actual, prospective or contingent) of a person to have shares…issued to the person, whether or not on payment of money or for other consideration.”
The appellant submitted that the stapled securities were offered to the public generally because the general public were entitled to take up shares in Toll up to 5 June 2007 and thereby become entitled to be issued with the stapled securities and thus to participate in the demerger transaction. The appellant further submitted that there was an “offer” of the stapled securities in the relevant sense which commenced to be made when Asciano was listed on 5 June 2007, ten days before the issue of the stapled securities. The appellant said that, during those ten days after 5 June 2007, any member of the public was entitled to buy or sell the stapled securities on a deferred settlement basis and thus prospective rights to have the stapled securities issued were available and offered to members of the public generally from that time.
The appellant submitted, on the authorities, that for an offer to be made to the public generally there did not have to be solicitation of the public generally and that it was sufficient for there to be an offer in respect of which anyone might choose to “come in.” It did not matter that an offer was made to a restricted class of persons who, for example, had the funds to invest, provided that the offer was open to any member of the public who became aware of it. The appellant further submitted that the members of Toll and the participating institutional investors made up a sufficiently broad class as to constitute “the public.”
The appellant submitted, in the alternative, that the Commissioner failed to give due consideration to the exercise of his discretion to revoke under s.250D(1)(a) of the Act and that there was no principled distinction to be drawn between the demerger of Toll and Asciano Ltd, on the one hand, and a “public float” on the other hand. The appellant submitted that the Commissioner failed to have regard to a relevant consideration, namely, the economic substance of the demerger transaction because the Commissioner apparently took the inflexible view that he would not exercise his discretion in cases of “demergers.”
On the other hand, the Commissioner submitted that, on the appellant’s own submissions, the “public float,” if there was one, had occurred prior to the occurrence of the dutiable transaction because the appellant was relying in part upon the deferred settlement trading in the stapled securities that was able to occur between 5 June 2007 and 15 June 2007.
The Commissioner submitted that there was no “public float” because the stapled securities were not “offered to the public generally” and that the phrase “offered to the public generally” was intended to refer to an offer that was open to the public at large and not to a section of the public. Further, the Toll shareholders formed a clearly segregated group and not “the public generally.” In addition, the facility afforded to Toll shareholders to trade stapled securities on a deferred settlement basis did not constitute an offer to the public generally. Finally, the limited institutional placement made in this case did not transform the “share float” into an offer to the public generally.
The Commissioner submitted, further or alternatively, that no “offer” could be identified because the transaction had taken place by way of schemes of arrangement that did not provide for any offer as such. Once the scheme was approved, all shareholders in Toll, including any who had voted against the proposed schemes, would be issued automatically with the stapled securities.
In relation to the exercise of discretion, it was submitted that the Commissioner had understood and rejected the appellant’s argument about economic equivalence and made it clear that transactions of the kind here were generally not considered to be within the purpose of the “public float” exception.
Was there a share float?
While public float is defined by s.250D(3) of the Act to encompass a share float or an offer of units to create a public unit trust scheme, subject to further stated conditions, there is no definition of “share float.” It is clearly intended that a share float is to be understood as an offer of shares (or, as in this case, stapled securities).
Section 250D(3) of the Act contains its own express requirement that the shares be offered to the public generally although, in ordinary usage, the word “float” in itself imports a notion of public participation. In The Macquarie Dictionary,[4] “float” as a noun is relevantly defined as “the initial raising of capital for a new company by means of public subscription to its securities.” The commercial and corporate context in which the word “float” is used is well illustrated by the discussion in Ford’s Principles of Corporations Law.[5] The authors refer to the process of converting a private to a public company and go on to state that “the public may be invited to invest by taking shares and becoming members or by lending to it and becoming creditors. The process of offering shares is called a flotation…There can be flotations in other circumstances [here the text refers to a holding company selling shares in a subsidiary by offering its holding to the investing public and also to companies “spinning off” parts of their businesses in public flotations.]” The authors then state “flotation would be an alternative to simply selling the shares in the subsidiary to another corporation. Flotation would also be an alternative to a sale confined to the selling company’s shareholders rateably.”[6]
[4]Third edition (1997).
[5]R P Austin and I M Ramsay, Ford’s Principles of Corporations Law (12th ed, 2005) 833-834.
[6]Emphasis added.
The first question in this case is really whether there was any “offer” at all. If there was not, I do not think that there was a share float within the meaning of the provision. In my opinion there was no “offer” in the relevant sense in the present case. It is hard to contend that the schemes of arrangement in some way constituted an offer in relation to the stapled securities. As the Commissioner submitted, once the schemes were agreed to at the meetings by the requisite majorities and approved by the Court, the issue of the stapled securities to the existing shareholders in Toll was automatic. That is perhaps why the appellant sought to emphasise and to rely upon the trading in stapled securities on a deferred settlement basis as constituting an “offer,” but that did not in my view constitute an offer by Toll as the floating entity.[7]
[7]The legislation is concerned with what is done by “the corporate entity that floated the shares or units” – see s.250D(3)(b) of the Act.
I am of the view that the issue of the stapled securities by means of the schemes of arrangement did not constitute an offer of shares and that the demerger transaction was not and did not involve a “share float.”
Was there a public float - an offer to the public generally?
If, contrary to my view, the transaction as a whole or the issue of the stapled securities by means of the schemes of arrangement did constitute an offer of shares and hence a “share float,” the question remains whether the stapled securities were “offered to the public generally” within the meaning of s.250D(3).
In principle, it seems to me that the “offer” of stapled securities to the shareholders of Toll as at 5 June 2007 was not an offer to the public generally. It might have been an offer to a section of the public but it was not an offer capable of being taken up by any member of the public who became aware of it. I do not think that the fact that members of the public could buy Toll shares up to 5 June 2007 alters that conclusion. The class of persons entitled to the stapled securities cannot be in my opinion characterised as “the public generally” but instead should be characterised as a class of persons having a special and subsisting relationship with the offeror which set them apart from the public generally.
In TNT Australia Pty Ltd v Normandy Resources NL,[8] one of the issues was whether a certain offer made to members of Poseidon Ltd was made to “the public” for the purposes of the then s.170 of the Companies (South Australia) Code. Jacobs J said this on that issue:[9]
[8](1989) 53 SASR 156.
[9](1989) 53 SASR 156, 171-172.
“The broad principle is stated in Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 157 CLR 201 at 208 as follows:
"In a case where an offer is made by a stranger and there is no rational connection between the characteristic which sets the members of a group apart and the nature of the offer made to them, the group will, at least ordinarily, constitute a section of the public for the purposes of the offer. If, however, there is some subsisting special relationship between offeror and members of a group or some rational connection between the common characteristic of members of a group and the offer made to them, the question whether the group constitutes a section of the public for the purposes of the offer will fall to be determined by reference to a variety of factors of which the most important will ordinarily be: the number of persons comprising the group, the subsisting relationship between the offeror and the members of the group, the nature and content of the offer, the significance of any particular characteristic which identifies the members of the group and any connection between that characteristic and the offer: cf, generally, Lee v Evans (1964) 112 CLR 276 at 287; Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission (1981) 148 CLR 121, at 135-136, 143-144."
In my opinion membership of Poseidon as a shareholder clearly affords a "rational connection between the common characteristic of members of a group and the offer made to them", and is a "significant characteristic which identifies the members of the group and connects them with the offer". That proposition becomes even clearer if one applies the tests formulated in Lee v Evans (1964) 112 CLR 276. Kitto J said (at 286):
"…the expression "invitation to the public" means an invitation made to the public generally and capable therefore of being acted upon by any member of the public. This appears to me to be the natural meaning of the words."
To the same effect was the statement of principle by Windeyer J (in a dissenting judgment) (at 292):
"The essence of an invitation to the public is not in the manner of its communication or in the number of persons to whom it is communicated. The criteria are rather, are the recipients of the invitation persons chosen at random, members that is of the general public, the public at large, all and sundry: or are they a select group to whom and to whom alone the invitation is addressed, so that if an outsider sought to respond to it he would be told that he was not one of those invited to come in."
and by Barwick CJ (at 285):
"…the basic concept is that the invitation, though maybe not universal, is general; that it is an invitation to all and sundry of some segment of the community at large. This does not mean that it must be an invitation to all the public either everywhere, or in any particular community. How large a section of the public must be addressed in a general invitation for it to be an invitation to the public in the relevant connection must depend on the context of each particular enactment and the circumstances of each case. But within that sufficient area of the community the invitation must be general in the sense spoken of by Viscount Sumner in Nash v Lynde [1929] AC 158 at 169, by Warrington J in Sherwell v Combined Incandescent Mantles Syndicate Ltd (1907) 23 TLR 482 at 483, "An offer of shares to anyone who should choose to come in" and by Jordan CJ in Ex parte Lovell; Re Buckley (1938) SR (NSW) 153 at 159, "made to the public generally and capable therefore of being acted upon by any member of the public.""
Moreover the size of the group possessing the essential characteristic does not prevent the group from being outside the concept of "the public" as illustrated by the Australian Central Credit Union case (supra) and by Corporate Affairs Commission v David Jones Finance Ltd [1975] 2 NSWLR 710.
The plaintiff seeks to escape from this conclusion by reference to s 25 of the Acquisition Code, which by statute extends the offer to any person who becomes the holder of, or is entitled to be registered as the holder of, Poseidon shares during the currency of the offer. This statutory provision is embodied in the Terms of the Offer in cl 7(a)…[provision set out]…
The plaintiff says that not only does this term of the offer take it outside the exception in subcl (c) of s 5(4), because it is not an offer made to existing members of Poseidon, but says that in effect it extends the offer to members of the public generally, for any member of the public can act upon and take advantage of the offer by the simple expedient of acquiring Poseidon shares during the currency of the offer.
I am not prepared to attribute that consequence to the operation of s 25 of the Acquisition Code. This is commercial legislation and is to be construed and applied in a way that gives it commercial efficacy.”[10]
[10]On appeal, the Full Court of the Supreme Court of South Australia approved the reasoning of Jacobs J on this issue.
In my view the whole of the above passage is germane to the present case and supports the rejection of the appellant’s primary submissions and the view that there was not here an offer to the public generally.
I think that this view is also supported by the reasoning of Needham J in Corporate Affairs Commission v David Jones Finance Ltd,[11] in which a subsidiary of a holding company invited 12,500 employees of the subsidiaries of that company, by way of circulars, to make interest bearing deposits with that subsidiary. It was held that this did not constitute an invitation “to the public.” Needham J referred in particular to the fact that the invitation was not capable of acceptance by any persons other than a defined section of the community and said that he could not see how an invitation which was restricted to a section of the public, in the sense that no one else might apply, could be held to be an invitation “to the public.”[12]
[11][1975] NSWLR 710.
[12][1975] NSWLR 710, 719.
I conclude that there was not a public float within the meaning of s.250D(3) of the Act because there was not an offer to the public generally by virtue of which the appellant ceased to be a member of the same corporate group as the transferor.
Did the Commissioner properly exercise the discretion under s.250D(1)(a) of the Act?
In my opinion the Commissioner, in his determination, did not misunderstand the appellant’s contentions. In substance, he rejected the proposition that the demerger transaction was the economic equivalent of an offer to the public generally. This conclusion was arguably correct, perhaps strongly so. Although the reasoning could have been better expressed, I do not think that it is shown that the Commissioner failed to take into account a relevant matter or applied an inflexible policy or that his exercise of discretion miscarried.[13]
[13]In deference to the arguments advanced by the parties, I note that, had I reached a contrary view, I would have felt bound to refer the matter back to the Commissioner for the proper exercise of his discretion.
Conclusion
For the foregoing reasons, the appeal is dismissed with costs including reserved costs.
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