Commissioner of State Revenue v Challenger Listed Investments Ltd (As Trustee of Challenger Diversified Property Trust 1)

The Commissioner of State Revenue (the Commissioner) appealed to the High Court of Australia against a decision of the Supreme Court of Victoria concerning the assessment of stamp duty on a transfer of property. The dispute arose from the Commissioner's assessment of duty on a transfer of land from Challenger Listed Investments Ltd (as trustee of Challenger Diversified Property Trust 1) (the taxpayer) to a related entity, Challenger Property Holdings Pty Ltd. The taxpayer argued that the transfer was exempt from stamp duty as it constituted a "dutiable transaction" under section 7(1)(b) of the *Stamps Act 1958* (Vic) (the Act), which relates to the acquisition of a beneficial interest in property. The Commissioner contended that the transaction was dutiable under section 7(1)(a) of the Act, which concerns the transfer of dutiable property.

The High Court was required to determine whether the transfer of land from the taxpayer to Challenger Property Holdings Pty Ltd was a dutiable transaction for the purposes of the *Stamps Act 1958* (Vic). Specifically, the court had to consider whether the transaction fell within the ambit of section 7(1)(b) of the Act, which exempts from duty the acquisition of a beneficial interest in property where the transferor is the beneficial owner of the property and the transferee is the legal owner, or vice versa. The central question was whether the taxpayer, as trustee, was the beneficial owner of the land for the purposes of this exemption.

The High Court, comprising Hayne and Bell JJ, allowed the Commissioner's appeal. Their Honours reasoned that the taxpayer, in its capacity as trustee, held the legal and beneficial interest in the land. The transaction involved the transfer of this legal and beneficial interest to Challenger Property Holdings Pty Ltd, which was a related entity. The court found that section 7(1)(b) of the Act was not applicable because it was designed to cover situations where legal and beneficial ownership were separated and then reunited, or where a beneficial owner transferred legal title to a nominee. In this instance, the trustee was both the legal and beneficial owner, and the transfer was not merely a change in legal title without a change in beneficial ownership. The court concluded that the transaction was a dutiable transfer of property under section 7(1)(a) of the Act.

The High Court ordered that the appeal be allowed, the orders of the Supreme Court of Victoria be set aside, and that the matter be remitted to the Supreme Court of Victoria for determination of the amount of duty payable.