Chief Commissioner of State Revenue v Shell Energy Operations No 2 Pty Ltd

The Chief Commissioner of State Revenue appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning stamp duty payable on the transfer of electricity generation assets. The dispute arose from the privatisation of certain electricity generator assets, where Shell Energy Operations No 2 Pty Ltd (Shell) was the transferee. The Chief Commissioner contended that stamp duty was payable on the vesting orders that transferred interests in the assets, arguing that these interests constituted dutiable property.

The Court of Appeal was required to determine whether the vesting orders, made under the *Electricity Generator Assets (Authorised Transactions) Act 2012* (NSW), were sufficiently broad to authorise the vesting of interests owned by the Water Administration Ministerial Corporation. Further, the Court had to consider whether the items constituting the power stations were fixtures, innominate *sui generis* property, or "goods" for the purposes of stamp duty, and whether the *Duties Act 1997* (NSW) altered the classification of these items. Finally, the Court needed to assess whether the primary judge erred in considering the "driver of value" in relation to lease agreements.

The Court allowed the appeal on Ground 2 only. It reasoned that the vesting orders were sufficiently broad to authorise the vesting of the interests in question, applying a purposive construction to the enabling legislation and the vesting orders themselves, particularly in light of any perceived imprecision in the drafting of the instruments. The Court held that the items constituting the power stations, having been affixed to the land, were fixtures. However, it found that the *Duties Act* did not alter the conclusion that these items, even if fixtures, were still considered "goods" for the purposes of stamp duty. The Court also found that the primary judge did not err in considering the value contributed by lease agreements, as this did not preclude a finding that other agreements were fundamentally more important.

The Court of Appeal ordered that the appeal be allowed on Ground 2 only. The parties were directed to file any proposed consent orders within 21 days, or, if agreement could not be reached, to file submissions regarding final orders within 21 days and replies within 28 days. Final orders were to be made on the papers without a further oral hearing, subject to any further order.