Chief Commissioner of State Revenue v Lee

The Chief Commissioner of State Revenue appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales concerning the assessment of stamp duty. The dispute arose from the Commissioner's assessment of duty on a transfer of shares in a land-rich company, where the respondent argued that the Commissioner had erred in aggregating certain transactions and in exercising his discretion under section 99F of the Stamp Duties Act 1920 (NSW).

The primary legal issues before the Court of Appeal were whether the Commissioner had correctly exercised his discretion under section 99F(3) of the Act in aggregating the respondent's shareholding with that of other parties, and whether the Commissioner's assessment, which relied on section 99F(1)(b)(ii), was valid. The court was required to consider the intention of the parties to the transaction and the proper application of the provisions relating to transfers of shares in land-rich companies.

The Court of Appeal found that the Commissioner had erred in his exercise of discretion under section 99F(3) by failing to properly consider the intention of the parties to the transaction. The court determined that the aggregation of the respondent's shares with those of other parties was not justified on the facts. Consequently, the court allowed the appeal, set aside the orders of the Supreme Court, and set aside the Commissioner's assessment insofar as it relied on section 99F(1)(b)(ii). In lieu thereof, the court confirmed the respondent's liability to pay duty in the amount of $4,527.50. The appellant was ordered to pay the respondent's costs.