Big Ben Holdings Pty Limited v Chief Commissioner of State Revenue

[2025] NSWSC 984

Supreme Court

New South Wales

Medium Neutral Citation:

Big Ben Holdings Pty Limited v Chief Commissioner of State Revenue [2025] NSWSC 984

Hearing dates:

28 July 2025

Date of orders:

28 August 2025

Decision date:

28 August 2025

Jurisdiction:

Equity - Revenue List

Before:

Hmelnitsky J

Decision:

1. The Duties Notice of Assessment No 10877651-001 issued on 7 August 2024 in respect of the contract for sale and purchase of land dated 25 January 2024 between SRI Corporation Pty Ltd, Philcant Nominees Pty Limited and Dudley Project Pty Ltd, as vendors, and Big Ben Holdings Pty Ltd, as purchaser, is revoked.

2. The matter is remitted to the Chief Commissioner of State Revenue to issue an amended assessment to give effect to the decision of the Court pursuant to s 102(1) of the Taxation Administration Act 1996 (NSW).

3. The defendant is to pay the plaintiff’s costs as agreed or assessed.

Catchwords:

TAXES AND DUTIES — Dutiable transactions — Dutiable property — Agreement for sale or transfer — Where land owned by three tenants-in-common in equal shares under co-ownership agreement — Where parent company of plaintiff was one of the tenants in common — Where contract provided for plaintiff to purchase the land from all three tenants-in-common — Whether dutiable property was the fee simple or three one-third shares in the land — Whether transaction attracts corporate reconstruction exemption under Duties Act 1997 (NSW) — Whether transaction was a corporate reconstruction transaction under ss 273B(1)(a), 273C — Whether transaction was undertaken for the purpose of changing the holding of assets within a corporate group under s 273B(1)(b)

Legislation Cited:

A New Tax System (Goods and Services Tax) Act 1999 (Cth)

Duties Act1997 (NSW), ss 8, 11, 273B, 273C and 273E

State Revenue Legislation Amendment Act 2012 (NSW)

Taxation Administration Act 1996 (NSW), ss 97, 102

Cases Cited:

Benidorm Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 471; (2020) 111 ATR 493

CTI Joint Venture Company Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 20; (2013) 87 ATR 709

Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 120; (2020) 111 ATR 283

Nullagine Investments Pty Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635; [1993] HCA 45

Trust Company Limited v Chief Commissioner of State Revenue [2007] NSWCA 255; (2007) 70 ATR 505

Texts Cited:

New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 28 March 2012

Category:

Principal judgment

Parties:

Big Ben Holdings Pty Limited (plaintiff)
Chief Commissioner of State Revenue (defendant)

Representation:

Counsel:
C J Peadon/C Hartcher (plaintiff)
R Clark (defendant)

Solicitors:
Jones Day (plaintiff)
Crown Solicitor for New South Wales (defendant)

File Number(s):

2025/62869

Publication restriction:

Nil

JUDGMENT

1. The issue in dispute is whether the corporate reconstruction exemption in s 273B of the Duties Act 1997 (NSW) (the Duties Act) is available in respect of the transfer of certain interests in land from SRI Corporation Pty Ltd (SRI) to its wholly-owned subsidiary, the plaintiff. This issue is best approached by way of the basic facts, which are not in contest.

The facts

2. The plaintiff, sometimes referred to as BBH, is the head company of a tax consolidated group known as The Bloomfield Group (TBG). One of the companies in the group, Bloomfield Collieries Pty Ltd (BCPL) operates the Bloomfield Colliery, an open cut coal mine about 30km from the Port of Newcastle. As at 2023, BCPL had regulatory approval to operate the mine until 2030. It had also applied for consent to extend the life of the mine until 2035.

3. The coal produced at the mine is transported to Port Waratah in Newcastle via a rail loop that connects to the Great Northern Railway. The rail loop passes over three contiguous lots of land located on Four Mile Creek Road. In 2023, that land was owned by SRI, Philcant Nominees Pty Limited (Philcant) and Dudley Project Pty Ltd (Dudley) as tenants in common in equal shares. Philcant and Dudley are independently owned entities that are not part of TBG. SRI is a member of TBG, and the plaintiff is a wholly-owned subsidiary of SRI. In these reasons, when I refer to TBG I mean the entities which together are treated as members of the tax consolidated group.

4. SRI, Philcant and Dudley owned the land subject to the terms of a Co-ownership Agreement which gave rise to the Dudley Farm Partnership (the Partnership). That agreement required the parties to contribute capital and to take profits in equal shares. No party was entitled to transfer its interest in the land without the approval of the other parties and the other parties had a right of first refusal in respect of the interest of any party wishing to sell. Sale to a third party could only occur on terms that the third party become a party to the Co-ownership Agreement.

5. TBG was entitled to access the land under leases between SRI, Philcant and Dudley as lessors and BCPL as lessee. All up, BCPL paid about $1,000,000 each year in rent. The leases were due to expire on 31 December 2023. On 7 September 2023, BCPL exercised options to renew the leases for a 5-year period expiring on 31 December 2028. There were no further options to renew.

6. The fact that the leases were renewed to 31 December 2028 without any further option for renewal created a commercial issue for BCPL (and TBG generally) because it had approval to operate the mine through to at least 2030 and, pending approval, to 2035. This meant that the Partnership, which was majority controlled by third parties, had the power to extract an outsized economic bargain for access to the land, at least for the balance of the period of the operation of the mine. As the defendant submitted, ‘understandably, TBG sought to resolve this chronic problem before it became acute’.

7. The plaintiff had expressed interest in acquiring the land from at least as early as 2018. In separate letters to Philcant and Dudley dated 19 September 2018, the CFO and Company Secretary of the plaintiff, Ms St George, wrote:

“[The plaintiff] wishes to purchase the above Property from the Cant Family Partnership (‘CFP’). Therefore, the purpose of this letter is to outline the terms we propose for this transaction, to be agreed in principle prior to the preparation of formal contract documents.

This proposal is open to each partner and must be accepted by each partner, interdependently. That is, [the plaintiff] wishes to buy the entire Property and does not offer to buy any of the partners’ individual shares in the Property. We confirm that [SRI] will agree to this proposal if the other partners do agree.”

8. The proposed purchase price was $2,089,000 as a GST-free supply of a going concern, but quite how the parties could have treated such a transaction as a GST-free supply of a going concern was not explained. In any event, the offer was not accepted.

9. There were further negotiations in 2023, commencing with a draft offer dated 5 April 2023 to ‘Dudley Farm Partnership members’ by which TBG proposed an untangling of the co-ownership and partnership arrangement. This led to the preparation of a draft memorandum of understanding between, inter alia, Dudley, Philcant and SRI. The draft, as of 27 November 2023, recorded:

“- SRI, Philcant and Dudley Project (collectively DFP) own the Subject Land … as tenants in common in equal shares under a co-ownership agreement … under the trading name Dudley Farm Partnership. The Subject Land is leased to Bloomfield with the current lease ceasing [on] 31 December 2023.

- Bloomfield has exercised its right to extend the lease to the earlier of the completion of the proposed land swaps or the five years ending in December 2028.

- The parties wish to rearrange ownership of the Subject Land so that Dudley Project and Philcant, representing the superannuation fund interests of Felicity and Michael Thomson and William Cant (collectively DPAP) continue as partners.

- SRI will pursue its own business.

- DPAP considers that there is potential to undertake property development for commercial and industrial purposes on that part of the land closest to the New England Highway. BBH has agreed to transfer the BBH Land to DPAP to facilitate this transaction.

- SRI wishes to secure 100% ownership of the rail loop and adjacent land for its coal mining business.

- The purpose of this MOU is to outline the steps that the parties have agreed upon to achieve these intentions.”

10. According to this draft proposal, SRI would leave the partnership and there would be an exchange of interests in land, such that SRI would acquire those parts of the land required for rail access and the other partners would acquire the remaining parts of the land for the purpose of development.

11. The draft memorandum of understanding was not finalised. Instead, on 15 December 2023, Philcant and Dudley offered to sell their respective one-third interests in the land for the price of $24 million, being $12 million for each one-third interest. The letter was sent by Ms Thomson on behalf of Philcant and Dudley to Mr Richards, Chairman of TBG. Mr Richards communicated a counter-offer of $10 million for each one-third interest, which Ms Thomson accepted by a letter dated 26 December 2023.

12. There followed some consideration by senior management of TBG as to how the transaction might be completed. In the course of late December 2023 and January 2024, management of TBG determined that the appropriate entity to acquire Philcant’s and Dudley’s interests in the land was the plaintiff. Management also determined that it was convenient and appropriate for the plaintiff also to acquire SRI’s interest in the land. The manner in which these decisions were made was as follows.

13. Senior management of TBG gave consideration as to how such a transaction might be completed. On 28 December 2023, Mr Richards wrote to Ms St George regarding the sale, saying ‘I am thinking that [the plaintiff] would be the purchaser…in the first instance. Stage 2 will be moving the [SRI] across to [the plaintiff].’

14. On 2 January 2024, Ms St George wrote:

“I think we had previously said that the land swap would need to be between SRI and the other partners (Sec. 30 of the Duties Act re partition) and later 100% of the resultant land would be transferred to [the plaintiff].

Now that the transaction will be a purchase, should the purchase still be by SRI rather than [the plaintiff], Tony, and if so why?”

15. The reference to Tony was to Tony Wassaf, a solicitor advising TBG on the proposed arrangement. Mr Wassaf replied:

“… the cash purchaser should still be SRI to have the benefit of partition duty and so that SRI BBH transfer attracts corporate reconstruction relief, 90% or 100% depending on timing of contract signing.”

16. Pausing here, it is apparent that so far as both Ms St George and Mr Richards were concerned, the entity that would finally own the fee simple in the land would be the plaintiff.

17. On 3 January 2024, Ms St George wrote:

“Please check GST treatment for both transactions:

Transaction 1: SRI buys 2/3 of the Dudley Farm Partnership land for $20 million (pre-GST)

Transaction 2: BBH buys 100% the land previously owned by the Dudley Farm partnership from SRI for $30 million (pre-GST).

The lessee will continue to be [Bloomfield Collieries] through both transactions. (Apparently, the new owner provides a notice of attornment which is a term that Tony taught me today).

Corporate reconstruction relief should apply to the second transaction, effectively zeroing any additional duty if GST does apply.

I think that Tony is saying that partition duty gives similar relief for transaction 1.

So long as that latter sentence is correct, it seems as though neither SRI nor [the plaintiff] cares whether GST applies or not from a duty perspective.

We do care, though, about being sure of the GST treatment for transactions for outside the ordinary course of business, and especially about being sure that we don’t claim anything that isn’t claimable and do claim what is.”

18. The same day, she wrote:

“… I really can’t see how the ATO could argue that we are paying less than market value or why there would be any reason that Felicity and William would accept less. We know that we are paying much more than market value which we are prepared to pay to secure control. I’m not inclined to do anything risky but I am quite certain that any valuation done now would be very significantly under the amount that we have agreed to pay

…

I am currently assuming that [the plaintiff] will pay $30M pre-GST for 100% of the land. SRI's $10M for its third would be directly derived from the value that Felicity and William achieved for their thirds.

We should probably discuss, though, whether we could pay $20 million for 2/3 and market value for SRI’s third (in which case we would need a valuation) – sounds risky to me.”

19. However, on 4 January 2024, Ms St George received advice that the first proposed transaction would not receive partition duty relief, and resolved for there to be a single transaction whereby the plaintiff purchased the whole of the interests of all three co-owners in a single transaction. Mr Wassaf said of this proposal:

“I wanted to keep SRI/BBH transfer deed separate so that it is the only document submitted for the corporate reconstruction relief. Alternative is to have separate land sale contract identical to the one for the vendors. That would be same treatment.”

20. However, as Ms St George correctly pointed out, if the parties wished to ensure that the transaction could be treated as a GST-free supply of a going concern, it was necessary for all of the interests to be transferred in a single transaction. There followed some back and forth between them as to whose approach was preferable. In the end, Ms St George wrote:

“I strongly prefer one contract…so that it is very clear that SRI is treated exactly the same as the 2/3 that [was] negotiated.

In my view, SRI is a tag along. I think it sensible that that’s as clear as it can be in the documents.”

21. An accountant who was advising the plaintiff on the proposed transaction added:

“I just double checked with our GST team. They have advised due to the partnership structure, there needs to be one contract for the supply from the partnership to [the plaintiff] as the ATO states that the partnership rather than the individual partners, is the single supplier of a going concern…”

22. The defendant next emphasised the terms of the resolution passed by the plaintiff on 17 January 2024 prior to the execution of the land sale contract, which was relevantly in these terms (emphasis in original):

“Background - The Dudley Farm partnership owns land which provides access to the Bloomfield Mine site and contains a section of the rail loop which services the Bloomfield Mine. This provides the partnership with an effective blocking stake in both ongoing usage and future land usage post the expiry of the current lease. The land is currently leased to [BCPL] under a final five year option which terminates on 31 December 2028. During 2023, the Chairman of SRI and [the plaintiff] negotiated with the other two partners to resolve this impediment to [the plaintiff’s] full control of the land and infrastructure in and around Bloomfield Mine. It seemed that a mutually acceptable solution would be a land swap between SRI and its subsidiaries and the non-SRI partners in the Dudley Farm partnership which would provide developable and biodiversity land to the other two partners and secure full ownership and control of the rail loop for The Bloomfield Group. Ultimately, the non-SRI partners negotiated a clean exit for a payment of $10 million each for their 1/3 interest in the Dudley Farm Partnership land. This arms-length, vigorously negotiated, price will also be imputed to the SRI 1/3 share in the proposed purchase of 100% of the partnership land and the associated lease by BBH.

The Principal Shareholder RESOLVES to authorise the Board of [the plaintiff] to proceed with the purchase of the land known as the Dudley Farm Partnership land (101/616161, 30/577638 and 2/116603) for a purchase price of $30 million in equal shares of $10 million to each of the three participants in the partnership, including $10 million to SRI.”

23. On 25 January 2024, SRI, Philcant and Dudley entered into a contract to sell their respective interests in all three lots to the plaintiff subject to the existing leases for the sum of $30 million ‘in equal share to each vendor’. The land sale contract stated that it was the sale of land subject to existing tenancies. Special conditions provided for the assignment to the plaintiff of the vendors’ rights and obligations under the leases. The contract also stated that the sale was a GST-free supply of a going concern within the meaning of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (‘the GST Act’).

24. The contract was completed on 31 October 2024 and a transfer was lodged following the payment of duty in the aggregate amount of $1,633,065.

The particular issues in dispute

25. The dispute that emerges from these facts is whether duty was exigible in respect of the acquisition by the plaintiff of SRI’s one-third interest in the land. As at 25 January 2024, s 273B(1) of the Duties Act applied not to charge duty where the Chief Commissioner was satisfied that:

1. ‘the transaction is a corporate reconstruction transaction’ (as that phrase is defined in s 273C), as to which see s 273B(1)(a); and

2. the transaction ‘is undertaken for the purpose of…changing the holding of assets within a corporate group’, as to which see s 273B(1)(b).

26. There is no doubt that the plaintiff and SRI were members of the same corporate group within the meaning of s 273E of the Duties Act.

27. However, the Chief Commissioner formed the view that entry into the sale contract on 25 January 2024 involved a single dutiable transaction, being the sale by the vendors of the whole of the fee simple in the three lots. He took the view that what was said by Brennan J in Nullagine Investments Pty Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635; [1993] HCA 45 (‘Nullagine Investments’) at 644 shows that a sale by all co-owners of land of their respective proportional interests in that land is a sale by them of a single interest, being the freehold estate. That being so, and given that the parties to the January 2024 sale included Philcant and Dudley who are not members of the corporate group, the Chief Commissioner formed the view that the transaction was not a corporate reconstruction transaction and so the requirement in s 273B(1)(a) was not satisfied.

28. The first issue in dispute concerns the correctness of this reasoning. This being a review pursuant to s 97 of the Taxation Administration Act 1996 (NSW), the plaintiff contends that the relevant dutiable transaction was the sale by SRI of its one-third interest in the land to the plaintiff and that I should be satisfied that this dutiable transaction was a corporate reconstruction transaction.

29. The Chief Commissioner also formed the view that the transaction was not undertaken for the purposes of ‘changing the holding of assets within a corporate group’. He took the view that no part of the 25 January 2024 land sale agreement was undertaken for the purpose of moving SRI’s interest to the plaintiff. Rather, he concluded that the purpose for which SRI entered into the transaction to sell its one-third interest in the lots to the plaintiff was for the plaintiff to acquire the other two-thirds interests in the lots from Philcant and Dudley, and to obtain the commercial benefits associated with that acquisition.

30. The second issue concerns the correctness of this reasoning. It only arises if I am otherwise satisfied that the relevant dutiable transaction was the transfer of SRI’s one-third interest in the land to its wholly-owned subsidiary, being the plaintiff, and if that transaction was a corporate reconstruction transaction. If it was, then the second issue is whether I am satisfied that that transaction (namely, the transfer of SRI’s interests in the land to the plaintiff) was entered into for the purpose of changing the holding of assets with a corporate group.

The statutory framework

The charging provisions

31. Section 8 of the Duties Act relevantly provides as follows:

(1) This Chapter charges duty on—

(a) a transfer of dutiable property, and

(b) the following transactions—

(i) an agreement for the sale or transfer of dutiable property,

(ii) a declaration of trust over dutiable property,

(iii) a surrender of an interest in land in New South Wales,

(iv) a foreclosure of a mortgage over dutiable property,

(v) a vesting of dutiable property by or as a consequence of an order of a court of this or another jurisdiction, whether inside or outside Australia,

(vi) the enlargement of a term in land into a fee simple under section 134 of the Conveyancing Act 1919,

(vii) a vesting of land in New South Wales by, or expressly authorised by, statute law of this or another jurisdiction, whether inside or outside Australia,

(viii) a lease in respect of which a premium is paid or agreed to be paid,

(ix) another transaction that results in a change in beneficial ownership of dutiable property, other than an excluded transaction.

Note- …

(2) Such a transfer or transaction is a dutiable transaction for the purposes of this Act.

(3) In this Chapter –

…

transfer includes an assignment, an exchange and a buy-back of shares in accordance with Division 2 of Part 2J.1 of the Corporations Act 2001 of the Commonwealth.

32. The expression ‘dutiable property’’ is defined in s 11:

(1) Dutiable property is any of the following—

(a) land in New South Wales,

…

(l) an interest in any dutiable property referred to in the preceding paragraphs of this section, except to the extent that—

(i) it arises as a consequence of the ownership of a unit in a unit trust scheme and is not a land use entitlement, or

(ii) it is, or is attributable to, an option over dutiable property, or

(iii) it is an interest in a marketable security, being an interest that is traded on the Sydney Futures Exchange.

33. The expression ‘land’ in the Duties Act includes a ‘stratum’ (see the Dictionary) and also includes any estate or interest in land: see Trust Company Limited v Chief Commissioner of State Revenue [2007] NSWCA 255; (2007) 70 ATR 505 at [49] (Giles JA).

34. In CTI Joint Venture Company Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 20; (2013) 87 ATR 709 at [23] and [25]-[27], Gzell J made the following observations about the meaning of ‘transfer’ and ‘sale’ in s 8:

“[23] The central concept of a sale is the transfer of property from a seller to a buyer for a monetary consideration (Littlewoods Mail Order Stores Ltd v Inland Revenue Commissioners [1963] AC 135 at 152; Commissioner of Taxes (Qld) v Camphin [1937] HCA 30; (1937) 57 CLR 127 at 133-134).

…

[25] ‘Transfer’ was considered in Coles Myer Ltd v Commissioner of State Revenue (Vic) (1998) 4 VR 728. At 730 Ormiston JA, with whom Winneke P agreed, said:

‘There are two parties to every transfer, the transferor who disposes of all rights in the transferred property and the transferee who receives or acquires them so as thereafter to have the power to exercise effectively the same rights in the future. For an instrument properly to be characterised as a 'transfer' one must be able to find that the property has passed from transferor to transferee so that the property is vested in a transferee who for all practical purposes is then capable of exercising the same rights as were capable of being exercised by the transferor before the transfer was executed.’

[26] In Gathercole v Smith (1881) 17 Ch D 1 at 6 James LJ said the word ‘transfer’ was ‘one of the widest terms that can be used’. In Coles Myer at 740 Ormiston JA said of these words:

‘The latter words, as do the words of like import from the Webster's Dictionary definition, place proper emphasis on the bilateral nature of the act of transfer, namely, that it requires not merely the disposition by the former owner but also the receipt of the relevant rights by the new owner.’

[27] His Honour went on to say:

‘Although the word “transfer” is not a term of art and is a word of wide connotation, to my way of thinking it is the passing of rights to another, so as to vest them in that other person, which is essential to a transfer, properly understood. It is not a mere disposition, a ridding oneself of the right or interest, it is the vesting in the transferee of that right or interest, precisely or substantially, which is necessary to effect a transfer, as ordinarily understood in the law.’”

35. In Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 120; (2020) 111 ATR 283, Ward CJ in Eq applied these principles in concluding that there was no transfer (on the particular facts of that case) because, as the plaintiff in that case submitted (see [159]), ‘… a transfer requires that there be the same rights as held by one party being passed to and vested in another party so that the second party holds the same right or interest as the first party did’. Her Honour accepted that submission at [171].

36. I also note for completeness, although there was no dispute about this matter, that the expression ‘transaction’ in the Duties Act is, as explained by Ward CJ in Eq in Benidorm Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 471; (2020) 111 ATR 493 at [317]:

“…employed as a simple classificatory device capturing those specific legal events, as enumerated in the list that follows the chapeau, which are chargeable with duty under the Chapter. Put differently, and to adopt the language of the Chief Commissioner’s submission which I here accept, the word ‘transaction’ in s 8(1)(b) is defined by what follows it.”

The exempting provisions

37. Section 273B is found within Part 1 of Chapter 11. That chapter is entitled ‘Corporate reconstructions and consolidations’. Section 273B relevantly provides as follows:

(1) Duty under this Act is not chargeable on a transaction if the Chief Commissioner is satisfied, on application by a party to the transaction, that—

(a) the transaction is a corporate reconstruction transaction, and

(b) the transaction, or the series of transactions of which the transaction is a part, is undertaken for the purpose of either or both of the following—

(i) changing the structure of a corporate group,

(ii) changing the holding of assets within a corporate group, and

(c) the transaction, or the series of transactions of which the transaction is a part—

(i) is not undertaken for a purpose of avoiding or reducing duty under this Act on another transaction, and

(ii) is not undertaken for the sole or dominant purpose of avoiding or reducing a liability for tax, other than duty under this Act, under a law of an Australian jurisdiction.

38. The expression ‘corporate reconstruction transaction’ is defined for the purposes of Part 1 by s 273C as follows:

For the purposes of this Part, a corporate reconstruction transaction means—

(a) a transfer, or agreement for sale or transfer, of dutiable property between corporations that are members of the same corporate group, or

(b) a surrender of an interest in land by a corporation to a corporation who is a member of the same corporate group, or

(c) a vesting of dutiable property if the dutiable property was held, immediately before the vesting, and continues to be held, immediately after the vesting, by corporations who are members of the same corporate group, or

(d) an acquisition of an interest in a landholder (within the meaning of Chapter 4) by a corporation if the interest is acquired from another corporation who is a member of the same corporate group, or

(e) an application to register a motor vehicle as a result of a transfer of the vehicle between corporations who are members of the same corporate group.

39. Part 1 of Chapter 11 was inserted into the Duties Act by the State Revenue Legislation Amendment Act 2012 (NSW). The changes brought in by that legislation involved the repeal of the ‘top-hatting’ exemption (formerly s 163C) and its replacement with the provisions of the new Part 1. The treasurer, the Honourable Mike Baird MP, described the amendments in the following way in the second reading speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 28 March 2012 at 10101):

“The main proposal is to extend and simplify the exemption from duty for the restructuring of corporate groups. Corporate groups may seek to change the structure of the group or change the holding of assets within the group for a variety of reasons, including to align business operations to the relevant legal entity, to improve the balance sheet of a subsidiary seeking finance, to respond to structural changes by a foreign parent, to remove expensive, antiquated structures in complex groups, and to merge business operations and legal entities following a takeover. In many cases the duty payable on these transactions would be prohibitive, requiring corporate groups to continue with a structure that is less than optimal. The exemption therefore removes an impediment to the efficient conduct of business operating in New South Wales.”

What was the dutiable transaction?

40. The defendant submits that the only transaction that occurred on 25 January 2024 was the sale of the fee simple in all three parcels of land. He submits that SRI, Dudley and Philcant acting in concert sold the fee simple in each lot to the plaintiff as purchaser. Thus, there was a single dutiable transaction in relation to a single item of dutiable property, being (in each case) the fee simple.

41. Authority for this submission was said to be found in what Brennan J said in Nullagine Investments at 643-645. His Honour said (footnotes omitted):

“The share or interest which a tenant in common has in land is an ‘undivided’ share, that is to say, ‘a distinct share in property which has not yet been divided among the co-tenants’. A division of the property is repugnant to the nature of a tenancy in common, for it is an essential characteristic of a tenancy in common that each of the tenants has the right to occupy the whole of the property in common with the others… The shares of tenants in common are not carved out of, or engrafted onto, some notional tenure of an estate in fee simple in the land amenable to sale by, or on the application of, one tenant. Nor are tenants in common equitable owners of land capable of compelling a sale of the legal title by a bare legal owner. The rights of ownership are exhausted by the shares of two tenants in common, each seised of and holding on his own behalf an estate in fee simple in a one half share in a parcel of land. If tenants in common concur in a sale of a parcel of land to a third party, each must convey his own share to the purchaser who takes a single estate in fee simple in the whole of the land. Or one tenant in common may take a conveyance of the shares of the other co-tenants and acquire sole ownership of the land. But, if tenants in common do not concur in one or other of these courses, the only way in which one of them can secure a sale of the land is by applying for an order for sale under statute…” (emphasis added)

42. I am unable to read that passage, or anything else said in Nullagine Investments, in a way that supports the proposition for which it is relied upon. Justice Brennan’s point was not that co-owners can be said to own and be capable of disposing of the fee simple in the whole land. Rather, it is that each co-owner owns on their own behalf an estate in fee simple in a share in a parcel of land. Taken together with the other co-owners, these separate estates exhaust the rights of ownership in the whole, but they are not an estate in fee simple in the whole. As his Honour said at 643, ‘each tenant in common has a separate and individual title to the property, limited according to the estate or term granted to or acquired by the tenant’. It follows, as his Honour said, that ‘each can sell only its own separate share’. In these respects, his Honour was in agreement with the majority (Deane, Dawson and Gaudron JJ), who expressed essentially the same view at 656.

43. The sentence on which the defendant’s case ultimately turns is the sentence emphasised in the extract above. However, in light of what is said before and after that sentence, it must be understood as saying that when multiple co-owners concur in selling their separate interests to a single purchaser, then that single purchaser – having thereby acquired the three separate estates in fee simple that exhaust ownership of the whole land – takes a single estate in fee simple in the whole of the land. It is not authority for the proposition that co-owners acting in concert either own or are capable of disposing of the fee simple in the whole of the land.

44. I am therefore unable to accept that the land sale contract entered into by the parties on 25 January 2024 involved a single dutiable transaction concerning a single item of dutiable property within the meaning of the Duties Act. There was no exchange of identical or substantially identical interests corresponding to the fee simple in each parcel of land. There was, rather, a transfer of three separate estates in each parcel, the result of which was that the plaintiff came to hold the fee simple in the whole of each parcel. Relevantly for present purposes, the agreement involved the transfer of SRI’s one-third interest in each parcel to its wholly-owned subsidiary, the plaintiff.

Was there a corporate reconstruction transaction?

45. Once it is appreciated that the land sale contract involved an agreement by three vendors to sell their respective one-third interests in each parcel of land, there is no difficulty in identifying three separate dutiable transactions within the meaning of the Duties Act, each of which is required to be brought to duty on its own terms. In the case of SRI’s agreement to transfer its one-third interest in each parcel of land, the transaction was between itself and its wholly-owned subsidiary. It was for that reason a corporate reconstruction transaction within the meaning of s 273C of the Duties Act.

46. The defendant resists this conclusion by arguing that such an operation of the Duties Act ‘could in certain circumstances lead to the absurd outcome that an agreement for the sale or transfer of the same property could be charged more or less duty depending on whether the transfer is from a single vendor or multiple vendors’. The immediate and insuperable difficulty with this submission is that it supposes that, in such cases, it is the ‘same property’ that is being transferred. For the reasons already explained, I do not accept that that supposition is correct. There is a difference between the sale of the fee simple in land and a sale by co-owners of their respective fractional interests in the land. Apart from anything else, the latter may or may not be to a single purchaser.

Was the transaction undertaken for the purpose of…changing the holding of assets within a corporate group?

47. The defendant makes two related submissions in relation to the purpose of the plaintiff’s acquisition of SRI’s interest in the parcels of land. Its first submission is that the transaction was one in a ‘series’ of transactions and that the relevant inquiry is as to the purpose of the ‘transaction or the series of transactions of which the transaction is a part’. He submits that the other transactions in the series were the transfers of the other one-third interests in each parcel of land by Dudley and Philcant. When all transactions in the series are viewed in the round, he submits that it is apparent that the purpose for which the series of transactions was entered into was not to move assets between members of the corporate group.

48. The defendant’s related submission is that the purpose of the transaction should in any event be identified by reference to the agreement as a whole, which shows that the plaintiff’s purpose was to unwind the partnership, to ensure that TBG took control of the land, and to ensure that the partnership was not in a position to extract an outsized economic bargain from its ownership of the land.

49. The defendant’s case on these issues depended heavily on what he saw as a change in purpose apparently revealed by the matters set out at paragraphs [16]-[21] above. He accepts that if SRI and the plaintiff had entered into two transactions as contemplated in early January 2024, then there would be no difficulty about concluding that the purpose of the second transaction was to move assets within the corporate group. However, he stresses that because the form of the transaction was altered to achieve the identical result by way of a single agreement, it is not possible to say that the purpose of any part of that agreement was any different to the purpose for which the agreement as a whole was entered into. He submits that the internal management correspondence to which I have referred shows that the reason for the change was to cause a change in GST treatment, although he (correctly) does not submit that the change in GST treatment avoided any GST, because he accepts that the transactions would otherwise have led to the overall same amount of GST being paid.

50. As to the defendant’s first point, the question of whether a transaction was part of a series of transactions is a factual question. Here, the whole point of moving from a ‘two transaction’ approach to a ‘single transaction’ approach was, as the defendant himself emphasises, to ensure that the interests in land were not conveyed in a ‘series’ but, rather, that there was a single agreement under which each interest was transferred simultaneously. I do not think it is appropriate to describe the three dutiable transactions which occurred under the land sale agreement as a series of transactions.

51. As to the second point, the task is to identify the purpose for which the corporate reconstruction transaction was undertaken. Here, that means identifying the purpose for which SRI agreed to sell its interests in the land to the plaintiff under the land sale contract. There is no doubt that insofar as that contract secured for TBG the interests of Dudley and Philcant in the land, it was entered into for the purpose of achieving the ends identified by the defendant, namely to bring the partnership to an end and to ensure that they could not demand above-market returns from ownership. However, that was not the only end which the plaintiff had in view. The plaintiff did not only wish to acquire the interests in the land held by Dudley and Philcant. It wanted to own the fee simple. In my view, the purpose for which SRI and the plaintiff entered into the agreement to transfer SRI’s interests in the land was, unremarkably, in order to move SRI’s interests in the land to the plaintiff. On the facts of this particular case, it would be quite artificial to say that SRI sold its assets to the plaintiff for the purpose of the plaintiff acquiring assets from third parties.

52. The defendant submitted that so far as the separate transfer of SRI’s interest to the plaintiff was concerned, there was no evidence of purpose. This is not so.

53. It is apparent from the contemporaneous documents that there was never any doubt that, one way or another, senior management preferred the land to be held by the plaintiff, which is an operating company. Ms St George gave evidence to precisely this effect but was not cross-examined.

54. It is equally apparent from the contemporaneous documents that the main reason why the transaction moved from a two-stage process to a single transaction was to secure the more convenient GST treatment associated with making an acquisition under Division 38 of the GST Act. That was an end that could be secured by the simple expedient of transferring SRI’s separate interests in the land to its wholly-owned subsidiary under the same agreement by which the other benefits were secured. Moving the ownership of those separate interests to the plaintiff was something that the members of the TBG group and its senior management wanted to achieve.

47. Given the nature of the various things the plaintiff was attempting to achieve by the land sale contract, I have no difficulty in concluding that the acquisition by the plaintiff of SRI’s interest in the land was undertaken for the purpose of changing the holding of assets within a corporate group within the meaning of s 273B(1)(b).

ORDERS

56. The orders of the Court will be as follows:

1. The Duties Notice of Assessment No 10877651-001 issued on 7 August 2024 in respect of the contract for sale and purchase of land dated 25 January 2024 between SRI Corporation Pty Ltd, Philcant Nominees Pty Limited and Dudley Project Pty Ltd, as vendors, and Big Ben Holdings Pty Ltd, as purchaser, is revoked.

2. The matter is remitted to the Chief Commissioner of State Revenue to issue an amended assessment to give effect to the decision of the Court pursuant to s 102(1) of the Taxation Administration Act 1996 (NSW).

3. The defendant is to pay the plaintiff’s costs as agreed or assessed.

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Decision last updated: 28 August 2025