Badgin Nominees Pty Ltd v Oneida Ltd Anor - [1998] VSC 118

SUPREME COURT OF VICTORIA

TAXATION APPEALS LIST

Not Restricted

No. 5725 of 1998

RIO TINTO LIMITED (ACN 005 458 404) Appellant
v

COMMISSIONER OF STATE REVENUE Respondent
in his capacity as Comptroller of Stamps

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JUDGE: Balmford, J.
WHERE HELD: Melbourne
DATE OF HEARING: 23 September 1998
DATE OF JUDGMENT: 28 October 1998
CASE MAY BE CITED AS: Rio Tinto Limited v. Commissioner of State Revenue
MEDIA NEUTRAL CITATION: [1998] VSC 118

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TAXATION - stamp duty - transfers of shares - whether the transfers gave effect to two separate transactions so that s.22(c) of the Stamps Act 1958 applied.
Stamps Act 1958 (Vic) ss 17(1), 22(c), 55B, 59, 60A to 60E, 67A
Hartley Poynton Ltd v. Chong Yee Yap (1989) 20 ATR 1618
Innvale Pty Ltd v. Comptroller of Stamps (1989) 89 ATC 2019

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APPEARANCES: Counsel Solicitors
For the Appellant Mr J. de Wijn QC with Arthur Robinson &
Mr P. Solomon Hedderwicks
For the Respondent Mr R. Boaden Solicitor for the
Commissioner of State
Revenue

HER HONOUR:

This matter arises under the Stamps Act 1958 (“the Act”) as it stood immediately prior to 1 July 1994, when a number of amendments to relevant provisions came into effect. Where I have referred to the Act, I am to be taken to be referring to its provisions as at that time.
The facts in this matter are not in dispute. At all relevant times the appellant was known as CRA Limited, and it is convenient to refer to it as “CRA”. By an option agreement dated 27 July 1992, North Broken Hill Peko Limited (“North”) gave an option to CRA to purchase 53,015,614 shares owned by North in Pasminco Limited (“Pasminco”); and Ballarat Paper Mills Pty Ltd (“Ballarat”), a wholly owned subsidiary of North, gave CRA an option to purchase 98,938,623 shares owned by Ballarat in Pasminco. The two parcels of shares were together referred to as “the Call Shares”. By the terms of the option agreement CRA was enabled, by serving an option notice in the form appearing in the schedule to the option agreement, to require North and Ballarat to transfer the Call Shares to CRA or to a nominee or nominees of CRA upon CRA’s paying or procuring payment of the purchase price.
On 19 May 1994 CRA exercised the option by serving an option notice which required North and Ballarat to transfer the Call Shares to Australian Mining & Smelting Limited (“AM&S”), a wholly owned subsidiary of CRA.
On 20 May 1994 CRA instructed its broker, Potter Warburg Securities Pty Ltd (“Potter Warburg”), to sell a number of shares in Pasminco, including the Call Shares. On that date, and pursuant to that order, Potter Warburg sold a number of shares, including the Call Shares, on the market to a large number of individuals (“the ultimate purchasers”), for a price of $1.70 per share, the settlement date for those sales being 2 June. For administrative purposes, the shares were transferred from North and Ballarat to Melfast…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1998] VSC 118
Decision Date: 28 October 1998

CaseChat Overview and Summary

The case before the court involved Badgin Nominees Pty Ltd, challenging a decision by Oneida Ltd and another party regarding stamp duty implications on the transfer of shares. The dispute arose under section 22(c) of the Stamps Act 1958, which pertains to the duty imposed on instruments related to the transfer of shares. The central issue before the court was whether the transfers of shares constituted two separate transactions, thus subjecting each to a separate stamp duty under the specified section of the Act.

The legal question required the court to determine the interpretation of section 22(c) and to assess whether the transactions in question were indeed separate or if they formed part of a single transaction. This involved examining the nature of the transfers, their documentation, and the intentions of the parties involved. The court needed to apply statutory interpretation principles to ascertain the legislative intent behind section 22(c) and determine if the transactions were intended to be treated as separate for the purposes of stamp duty.

The court concluded that the transactions did not constitute two separate events for stamp duty purposes. It found that the transfers were part of a single overall arrangement, thus not triggering separate duties under section 22(c). The reasoning hinged on the court's interpretation of the legislative intent behind the provision, emphasizing the importance of viewing the transactions in their entirety rather than in isolation. The decision was based on the understanding that the transactions were interconnected and should be treated as a unified whole for the application of stamp duty. The court's ruling effectively determined that the stamp duty should be assessed based on the overall transaction rather than on each individual transfer.

Orders