Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd

The Chief Commissioner of State Revenue (the Commissioner) appealed to the High Court of Australia against a decision of the Supreme Court of New South Wales, which had overturned an assessment made by the Commissioner against Downer EDI Engineering Pty Ltd (Downer). The dispute concerned the Commissioner's assessment of stamp duty on a novation agreement, which the Commissioner argued constituted a dutiable transaction. Downer contended that the novation agreement was not a dutiable transaction and that the Commissioner's assessment was therefore unlawful.

The High Court was required to determine whether the novation agreement, which replaced an existing contract for the supply of services with a new contract between different parties, was a dutiable transaction for the purposes of the *Duties Act 1997* (NSW). Specifically, the Court had to consider whether the novation agreement constituted an "agreement for the sale or transfer of dutiable property" or an "agreement for the creation or transfer of an interest in dutiable property" within the meaning of the Act.

The Court reasoned that a novation agreement, by its nature, extinguishes existing contractual rights and obligations and creates new ones. It does not, however, involve the sale or transfer of property in the sense contemplated by the *Duties Act*. The Court held that the novation agreement did not transfer any existing property interest from the original party to the new party; rather, it created entirely new rights and obligations. Therefore, the Court concluded that the novation agreement was not a dutiable transaction.

The appeal was dismissed, and the decision of the Supreme Court of New South Wales was affirmed.