Commissioner of State Revenue v Oz Minerals Ltd - [2013] WASCA 239

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: COMMISSIONER OF STATE REVENUE -v- OZ MINERALS LTD [2013] WASCA 239

CORAM: BUSS JA
NEWNES JA
MURPHY JA

HEARD: 13 MAY 2013

DELIVERED : 17 OCTOBER 2013

FILE NO/S: CACV 123 of 2012

BETWEEN: COMMISSIONER OF STATE REVENUE
Appellant
AND
OZ MINERALS LTD (FORMERLY OXIANA LTD)
First Respondent
OZ MINERALS AGINCOURT PTY LTD
Second Respondent

ON APPEAL FROM:
Jurisdiction              :  STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram  :JUDGE T SHARP (DEPUTY PRESIDENT)
Citation  :OZ MINERALS LTD and COMMISSIONER OF STATE REVENUE [2012] WASAT 188
File No  :CC 1397 of 2011

Catchwords:

Taxes and duties - Stamp duty - Construction of the definition of 'mining tenement' in s 76(1) of the Stamp Act 1921 (WA) - Meaning of 'tenement, right or interest' in par (c) of the definition of 'mining tenement' - Meaning of 'similar' in par (c)(i) of the definition of 'mining tenement' - Meaning of 'held under the law of ... another jurisdiction' in par (c)(ii) of the definition of 'mining tenement'

Taxes and duties - Stamp duty - Rights or interests granted or conferred by the Republic of Indonesia under a contract of work in connection with exploring and mining for minerals on land in Indonesia - Whether the rights or interests granted or conferred under the contract of work were a 'tenement, right or interest' within par (c) of the definition of 'mining tenement' in s 76(1) of the Stamp Act 1921 (WA) - Whether any such 'tenement, right or interest' was 'similar' within par (c)(i) of the definition to a mining tenement held under the Mining Act 1978 (WA) or to a mining tenement or right of occupancy continued in force by s 5 of the Mining Act 1978 (WA) - Whether any such 'tenement, right or interest' was 'held under the law of ... another jurisdiction' within par (c)(ii) of the definition of mining tenement in s 76(1)

Mining law - Rights of occupancy - State Agreements

Taxes and duties - Constitutional law - Division 3b of pt IIIBA of the Stamp Act 1921 (WA) - Stamp duty assessment issued by the appellant in reliance on div 3b - Validity of the appellant's assessment - Territorial nexus - Whether the provisions of div 3b relied on by the appellant exceed the territorial limitations upon the State of Western Australia's legislative power

Legislation:

Australia Act 1986 (Cth), s 2
Australia Act 1986 (UK), s 2
Commonwealth Constitution, s 106, s 107
Constitution Act 1889 (WA), s 2(1)
Interpretation Act 1984 (WA), s 5, s 6, s 7
Iron Ore (Hamersley Range) Agreement Act 1963 (WA)
Iron Ore (Wittenoom) Agreement Act 1972 (WA), sch 1, cl 2(1), cl 4(1), cl 5, cl 8(1)
Mining Act 1904 (repealed), s 3, s 276, s 277
Mining Act 1978 (WA), s 4, s 5, s 8(1), s 9(1), s 18, pt IV div 1, div 2, div 2A, div 3, div 4, div 5
Mining Regulations 1981 (WA), reg 42B
Stamp Act 1921 (WA), s 17(1)(c), s 74(1), s 76(1), s 76ATG, s 76ATH, s 76ATI, s 76ATJ, s 76ATK, s 76 ATL
Taxation Administration Act 2003 (WA), s 40, s 43A(1)

Result:

Appeal allowed

Category: A

Representation:

Counsel:

Appellant:     Mr S J Wright
First Respondent           :     Mr D R Williams QC & Mr A C Willinge
Second Respondent      :     Mr D R Williams QC & Mr A C Willinge

Solicitors:

Appellant:     State Solicitor for Western Australia
First Respondent           :     Ernst & Young Law
Second Respondent      :     Ernst & Young Law

Case(s) referred to in judgment(s):

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 221 CLR 568
APLA Ltd v Legal Services Commissioner of New South Wales [2005] HCA 44; (2005) 224 CLR 322
Australian Anglo American Prospecting Ltd v CRA Exploration Pty Ltd [1981] WAR 97
Australian Shipping Commission v City of Port Melbourne [1990] VR 439
Barcelo v Electrolytic Zinc Co of Australasia Ltd [1932] HCA 52; (1932) 48 CLR 391
Beauchamp v Winn (1873) LR 6 HL 223
Berkheiser v Berkheiser [1957] SCR 387
Broken Hill South Ltd (Public Officer) v The Commissioner of Taxation (NSW) [1937] HCA 4; (1937) 56 CLR 337
Commissioner of Stamp Duties (NSW) v Millar [1932] HCA 63; (1932) 48 CLR 618
Commissioner of State Taxation v Nischu Pty Ltd (1991) 4 WAR 437
Commissioners of Stamps (Qld) v Wienholt [1915] HCA 49; (1915) 20 CLR 531
CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458
Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549
Dunn v Birmingham Canal Co (1872) LR 8 QB 42
Eaton & Sons Pty Ltd v The Council of the Shire of Warringah [1972] HCA 33; (1972) 129 CLR 270
Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 43 WAR 186
Errington v Metropolitan District Railway Co (1882) 19 Ch D 559
Ex parte Henry; Re Commissioner of Stamp Duties [1963] SR (NSW) 298
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216
Kelly v The Queen [2004] HCA 12; (2004) 218 CLR 216
Lipohar v The Queen [1999] HCA 65; (1999) 200 CLR 485
Lloyd v Jones (1848) 6 CB 81; 136 ER 1182
London and North-Western Railway Co v Ackroyd (1862) 31 LJ Ch 588
Mobil Oil Australia Pty Ltd v The State of Victoria [2002] HCA 27; (2002) 211 CLR 1
Nova Resources NL v French (1995) 12 WAR 50
Pearce v Florenca [1976] HCA 26; (1976) 135 CLR 507
Port MacDonnell Professional Fishermen's Association Inc v The State of South Australia [1989] HCA 49; (1989) 168 CLR 340
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Re Lehrer and the Real Property Act 1900 [1961] SR (NSW) 365
Re Michael; Ex parte WMC Resources Ltd [2003] WASCA 288; (2003) 27 WAR 574
Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403
Rothkopf v Lowry & Co 148 F 2d 517 (2nd Cir 1945)
Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] QCA 73; [2007] 2 Qd R 373
TEC Desert Pty Ltd v Commissioner of State Revenue [2010] HCA 49; (2010) 241 CLR 576
The Commonwealth of Australia v The State of Western Australia [1999] HCA 5; (1999) 196 CLR 392
The State of Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1
Thompson v Commissioner of Stamp Duties [1968] 2 NSWR 63
Travelex Ltd v Federal Commissioner of Taxation [2010] HCA 33; (2010) 241 CLR 510
Union Steamship Co of Australia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1
Wilkinson v Proud (1843) 11 M & W 33
Zhu v Treasurer of New South Wales [2004] HCA 56; (2004) 218 CLR 530
Table of Contents

Buss JA's reasons..................................................................................................................... 7
The procedural history
The acquisition by Oxiana Agincourt of a controlling interest in OZ Minerals Agincourt
Overview of the relevant provisions of pt IIIBA of the Act
Facts relevant to the application of pt IIIBA to Oxiana Agincourt's acquisition of a controlling interest in OZ Minerals Agincourt
Aspects of Indonesian law in relation to mining rights as agreed between the parties
The Martabe Contract of Work
The stage of work under the Martabe Contract of Work as at 30 March 2007
The expert evidence on the mining law of Indonesia
The critical issues in the application of pt IIIBA to Oxiana Agincourt's acquisition of a controlling interest in OZ Minerals Agincourt
The constitutional issue as to the validity of the assessment
The Tribunal's conclusion and reasoning in relation to Issue 1
The Tribunal's conclusion and reasoning in relation to Issue 2
The Tribunal's conclusion and reasoning in relation to Issue 3
The Tribunal's conclusion and reasoning in relation to Issue 4
The nature of the appeal to this court
The Commissioner's grounds of appeal
The respondents' notice of contention
The organisation of the balance of these reasons
Issue 1: the respondents' submissions
Issue 1: its determination
Issue 1: my conclusion
Issue 2: the respondents' submissions
Issue 2: its determination
Issue 2: my conclusion
Issue 3: the respondents' submissions
Issue 3: its determination
Issue 3: my conclusion
Issue 4: the respondents' submissions
Issue 4: its determination
Issue 4: my conclusion
Outcome of the appeal
Newnes JA's reasons.............................................................................................................. 69
Murphy JA's reasons.............................................................................................................. 69

BUSS JA: This appeal raises issues as to the proper construction of the definition of 'mining tenement' in s 76(1) of the Stamp Act 1921 (WA) (the Act) and the application of div 3b of pt IIIBA of the Act to an acquisition by Oxiana Agincourt Holdings Ltd (Oxiana Agincourt) on 30 March 2007 of a controlling interest in the second respondent (OZ Minerals Agincourt), which was then named Agincourt Resources Ltd.

The procedural history

On 22 October 2008, the Commissioner of State Revenue (the Commissioner) assessed stamp duty on Oxiana Agincourt's acquisition of the controlling interest in OZ Minerals Agincourt. The amount assessed was $7,568,609.40. On 21 November 2008, the first respondent (OZ Minerals), which is the holding company of Oxiana Agincourt, paid the assessment.
On 22 December 2008, an objection to the assessment was lodged with the Commissioner. On 8 July 2011, the Commissioner disallowed the objection.
On 2 September 2011, OZ Minerals applied to the State Administrative Tribunal (the Tribunal) under s 40 of the Taxation Administration Act 2003 (WA) for a review of the Commissioner's decision to disallow the objection. On 6 December 2011, the Tribunal ordered that OZ Minerals Agincourt be added as an applicant to the proceedings.
On 19 September 2012, the Tribunal constituted by its Deputy President, Judge Sharp, ordered, relevantly, that:
(a)the Commissioner's assessment be set aside; and
(b)the matter be remitted to the Commissioner for a new assessment of stamp duty to be issued in accordance with the Tribunal's finding that OZ Minerals Agincourt was not, as at 30 March 2007, a 'land‑holder' for the purposes of div 3b of pt IIIBA of the Act.
The Commissioner has appealed to this court, pursuant to s 43A of the Taxation Administration Act, against the Tribunal's decision.

The acquisition by Oxiana Agincourt of a controlling interest in OZ Minerals Agincourt

On 26 February 2007, Oxiana Agincourt made an offer to the shareholders of OZ Minerals Agincourt to acquire all of the issued share capital of OZ Minerals Agincourt.
On 30 March 2007, Oxiana Agincourt acquired 93.5% of the issued shares in OZ Minerals Agincourt.
On 25 May 2007, Oxiana Agincourt compulsorily acquired the remaining 6.5% of the issued shares in OZ Minerals Agincourt.

Overview of the relevant provisions of pt IIIBA of the Act

The applicable provisions of the Act are those in force on 30 March 2007, when Oxiana Agincourt acquired the controlling interest in OZ Minerals Agincourt.
Part IIIBA of the Act is headed, 'Duty on change of control of certain land-owning corporations'.
Section 76 of the Act defines various terms used in pt IIIBA. By s 76(1), in pt IIIBA, unless the contrary intention appears, relevantly:
entitled means beneficially entitled, and entitlement has a corresponding meaning;
land includes a mining tenement, and also includes ‑
(a)any estate or interest in land; and
(b)anything fixed to the land including anything that is, or purports to be, the subject of ownership separate from the ownership of the land;
…
mining tenement means -
(a)a mining tenement held under the Mining Act 1978 being a mining tenement within the meaning of that Act or the Mining Act 1904;
(b)a mining tenement or right of occupancy continued in force by section 5 of the Mining Act 1978; and
(c)a tenement, right or interest that is -
(i)similar to a tenement or right referred to in paragraph (a) or (b); and
(ii)held under the law of another State, a Territory, the Commonwealth or another jurisdiction.
Division 3b of pt IIIBA is headed, 'Listed corporations incorporated, or taken to be registered, outside Western Australia, and certain other companies not within Division 3a'. Division 3b comprises s 76ATG ‑ s76ATL.
By s 76ATG(1)(a), where, by a relevant acquisition, a person acquires a controlling interest in a listed land‑holder corporation, the corporation shall, within two months after the acquisition, lodge a statement with the Commissioner in respect of that acquisition.
Section 76ATI(1) states, relevantly, that in div 3b a corporation is a listed land‑holder corporation if it is a body corporate that is formed or incorporated outside Western Australia and 'it is a land‑holder within the meaning of subsection (2) and is listed on a recognised financial market'.
Section 76ATI(2) defines the term 'land‑holder' for the purposes of div 3b. It provides:
A corporation is a land‑holder for the purposes of this Division if at the time of an acquisition of a controlling interest ‑
(a)it is entitled to land situated in Western Australia and the unencumbered value of the land is not less than $1 000 000, or it is entitled to land situated in Western Australia as a co‑owner of the freehold or of a lesser estate in the land and the value of the whole of the freehold or lesser estate is not less than $1 000 000; and
(b)the value of all land to which the corporation is entitled, whether situated in Western Australia or elsewhere, is 60% or more of the value of all property to which it is entitled, other than property directed to be excluded by subsection (4),
or if the Commissioner determines that paragraphs (a) and (b) would have applied to the corporation at the time of the acquisition of the controlling interest but for a transaction, or series of transactions, which in the Commissioner’s opinion had as its purpose, or one of its purposes, the defeat of the object of this Division.
By s 76ATI(6), relevantly and in essence, a corporation is deemed to be entitled to land or property where a subsidiary is entitled to that land or property. The term 'relevant acquisition' is defined, for the purposes of div 3b, in s 76ATJ. The terms 'interest', 'controlling interest' and 'additional interest' are defined, for the purposes of div 3b, in s 76ATK. It is unnecessary to refer to the meaning attributed by the definitions to those terms.
By s 76ATG(10), a dutiable statement lodged by a listed land‑holder corporation with the Commissioner under s 76ATG is 'taken to be' an instrument evidencing the 'relevant acquisition' and is 'chargeable with duty accordingly'.
Section 76ATH(1) provides, relevantly, that a s 76ATG statement is chargeable, in accordance with s 76ATL, with duty at the rate provided for in item 4(1) of the Second Schedule of the Act.
Section 76ATL(1) provides that where s 76ATH(1) applies, duty is chargeable in accordance with s 76ATL on the value, free of encumbrances, of the land and chattels situated in Western Australia to which the corporation is entitled.
By s 17(1)(c), the land‑holder corporation is liable to pay the duty assessed on the dutiable statement.

Facts relevant to the application of pt IIIBA to Oxiana Agincourt's acquisition of a controlling interest in OZ Minerals Agincourt

At all material times, PT Agincourt Resources (PTAR), a company incorporated under the laws of Indonesia, was a subsidiary of OZ Minerals Agincourt.
OZ Minerals Agincourt had indirect ownership and control of PTAR through an Australian subsidiary, a Singaporean subsidiary and an Indonesian subsidiary.
At all material times, OZ Minerals Agincourt was incorporated and registered in South Australia and its shares were quoted on the Australian Stock Exchange.
At all material times, the assets of OZ Minerals Agincourt and its subsidiaries included applications for exploration licences and mining leases located in various Australian jurisdictions, mining interests in Guinea and Namibia, and rights or interests in Indonesia granted or conferred on PTAR under an agreement known as the Martabe Contract of Work.
As at 30 March 2007, OZ Minerals Agincourt was listed on a 'recognised financial market' for the purposes of s 76ATI(1)(b).
As at 30 March 2007, OZ Minerals Agincourt was entitled to land situated in Western Australia which had an unencumbered value of not less than $1,000,000, for the purposes of s 76ATI(2)(a).
If the rights or interests granted or conferred on PTAR under the Martabe Contract of Work are 'land', for the purposes of pt IIIBA of the Act, then as at 30 March 2007 OZ Minerals Agincourt was a 'listed land‑holder corporation' within the meaning of s 76ATL(1) and a 'land‑holder' for the purposes of div 3b of pt IIIBA.

Aspects of Indonesian law in relation to mining rights as agreed between the parties

In a statement of agreed issues and facts dated 2 March 2012 and filed with the Tribunal on 6 March 2012, the parties agreed upon aspects of Indonesian law in relation to mining rights. The points of agreement on this issue were as follows.
Indonesian law recognises three main forms of company including 'PMA' companies, which are companies having foreign (non‑Indonesian) shareholding.
Indonesian law also recognises different forms of mining rights, including:
(a)mining authorisations (KPs), which can only be held by entities that are wholly owned or controlled by Indonesian nationals or Indonesian owned companies or other entities; and
(b)contracts of work, which are entered into between the Government of Indonesia and PMA companies.
There are differences between KPs and contracts of work, including:
(a)KPs are issued at the discretion of the Government of Indonesia and the rights they confer are defined by legislation (with no right to sue for breach of contract).
(b)A contract of work is a legally binding agreement under which the parties are required to submit disputes to an agreed dispute resolution mechanism. There are laws relating to contracts of work, but these only set out the procedure for the execution of a contract of work and do not specify its substance or content.
Contracts of work are subject to the doctrine of lex specialis. Accordingly, they are not subject to subsequent changes in the general law and regulations of Indonesia.
Contracts of work have followed a series of evolving standard form agreements.

The Martabe Contract of Work

On 28 April 1997, the Martabe Contract of Work was executed between the Government of Indonesia and PTAR (then known as PT Danau Toba Mining).
The relevant provisions of the Martabe Contract of Work are as follows.
Recital A states that all mineral resources in the territories of the Republic of Indonesia are the national wealth of the Indonesian nation. Recital E states that the Government of Indonesia (referred to in the agreement as 'the Government') and PTAR (referred to in the agreement as 'the Company') are willing to cooperate in developing the mineral resources described in the agreement 'on the basic provisions hereof and of the laws and regulations of the Republic of Indonesia'.
Article 2 is concerned with the appointment and responsibilities of PTAR. Paragraph 1 of Article 2 provides:
The Company is hereby appointed the sole contractor for the Government with respect to the Contract Area. In particular, the Company shall be granted the sole rights to Explore for certain Minerals in the Contract Area, to Mine any deposit of Minerals found in the Mining Area, to Process, store, and transport by any means certain Minerals extracted therefrom, to market, sell or dispose of all the Products of such Mining and Processing, inside and outside Indonesia, and to perform all other operations and activities which may be necessary or convenient in connection therewith, with due observance of the requirements of this Agreement. In consideration for the grant of such rights, the Company shall perform the work and carry out the obligations imposed on it by this Agreement, including, without limitation, the obligation to make expenditures as provided in paragraph 2 of Article 5, in paragraph 6 of Article 6 and in paragraph 5 of Article 7, the obligation to pay taxes and other charges to the Government as provided in Article 12 and 13 and the obligation to adhere to the Mining standards described in Article 10 and to the Environmental, safety and health standards described in Article 26.

Article 2 par 3 provides, relevantly, that:
The Government authorizes the Company to have the sole control and management of all of the Company's activities under this Agreement and the Company shall have full responsibility therefor and shall assume all risk with respect thereto in accordance with the terms and conditions of this Agreement.
The 'Contract Area' is an area of land described in annexures A and B, and par 1 of Article 4, of the agreement.
The 'Mining Area' is the land within the Contract Area containing potentially economic mineral deposits which the Company selects for mining development upon or before the expiration of the Feasibility Study Period, as described in Article 8, and in which the Company proposes to commence mining.
Article 3 deals with the manner in which the Company will carry out the agreed works and other activities. Paragraph 2 of Article 3 provides:
The Company contemplates a program for the Enterprise commencing with a General Survey of the Contract Area followed by Exploration on selected areas. The whole program will be divided into five periods or stages hereinafter referred to as 'General Survey Period', 'Exploration Period', 'Feasibility Study Period', 'Construction Period' and 'Operating Period', respectively as further defined in the following Articles hereof.
The term 'Enterprise' is defined in Article 1 to mean, in essence, all activities of the Company provided for in or contemplated by the agreement.
Article 5 is concerned with the General Survey Period. Paragraph 1 of Article 5 provides, relevantly:
The Company shall commence, as soon as possible and not later than six (6) months after the signing of this Agreement, a General Survey of the Contract Area to determine in what parts of the Contract Area deposits of Minerals are most likely to occur. The 'General Survey Period' shall end twelve (12) months after the date of commencement of the General Survey or at such earlier date in respect of a part of the Contract Area for which the Company has notified the Department that it elects to proceed with the Exploration Period pursuant to paragraph 6 of this Article.
The 'Department' is the Government agency charged with the administration of Indonesia's mining laws and regulations.
Article 6 deals with the Exploration Period. It provides, relevantly:
1.Upon completion of the General Survey, the Company shall commence the Exploration Period. During the Exploration Period, the Company shall engage in an Exploration program. The Exploration program shall include such detailed geology, geophysics and geochemistry and such sampling, pitting, and drilling activities as the Company considers appropriate. The Company shall submit to the Department an annual work program and budget. In the first year of the Exploration Period, such program and budget shall be is [sic] solely decided by the Company. If at the end of the first year the Company has not spent an amount of minimum 80% of such budget, the Department may recommend the Government to terminate the Agreement.
…
2.The Company may at any time discontinue Exploration in any part or parts of the Contract Area on the grounds that the continuation of such Exploration is no longer commercially feasible or practical and shall apply in writing to the Department in accordance with paragraph 3 of Article 4 for the relinquishment of such Exploration Area from the Contract Area. The Contract Area shall thereby be reduced to the area which remains after such relinquishment.
…
4.The Exploration Period shall:
(i)commence immediately following the end of the General Survey Period; and
(ii)end thirty six (36) months thereafter; provided that, with respect to any Exploration Area it shall end at such earlier date as the Feasibility Study Period shall have begun with respect to such Exploration Area.
…
5.Prior to the end of the Exploration Period, the Company shall give notice to the Department stating whether or not the Company desires to proceed into the Feasibility Study Period with respect to any Exploration Area. Should the Company give notice to the Department that it does not wish to proceed into the Feasibility Study Period with respect to any Exploration Area, such notice shall constitute an application in writing to the Department in accordance with paragraph 3 of Article 4 for the relinquishment of such Exploration Area. In such a case, the Company shall turn over to the Department:
(i)maps indicating all places in such Exploration Area in which the Company has drilled holes or sunk pits,
(ii)copies of logs of such drill holes and pits and of assay results with respect to any analyzed samples recovered therefrom, and
(iii)copies of any geological or geophysical and geochemical maps of the Exploration Area which have been prepared by the Company.
Article 8 is concerned with the Feasibility Study Period. During the Feasibility Study Period, PTAR has the right and the obligation to carry out investigations and studies, as described in annexure 'E' to the agreement, to determine the feasibility of commercially developing a mineral deposit or deposits in any part of the Contract Area. Article 8 provides, relevantly:
1.The Feasibility Study Period for any part of the Contract Area shall commence on the date the Company submits a written application as hereinabove provided to the Department in relation to its decision to proceed with the evaluation and shall end upon the commencement of the Construction Period therefor as hereinafter provided.
2.As soon as the Company has submitted written application, the Company shall commence studies to determine the feasibility of commercially developing the deposit or deposits in question …
3.At any time during the Feasibility Studies [sic] Period the Company may submit a written application to the Department that it desires to proceed with the construction of a mine and facilities to be used by the Company in its operation. If the Department does not object, in writing, to such application, its approval shall be received by the Company within three (3) months of receipt of such application. Upon approval of that application, the Company shall commence and, with reasonable diligence, execute to completion the design of the facilities and subject to completion of the design of the facilities shall supply the same for the approval of the Department, together with an estimate of the cost of such facilities and a time schedule for the construction thereof which time schedule shall, to the extent economically and practically feasible, provide for completing the construction of such facilities within thirty six (36) months after the approval of the plans and designs and time schedule for construction of such facilities. Within three (3) months after submission the Department shall notify the Company of its approval (which will not be unreasonably withheld) or disapproval of the mining plan, design and time schedule for construction, subject to paragraph 2 of Article 16. In the event of disapproval, the Company shall be notified by the Department of the cause for disapproval and the Department and the Company shall consult in a [sic] good faith to attempt to remove the cause for such disapproval. If, after a period of three (3) months from the notification of such disapproval, there has been no resolution of the matter then either party may proceed to resolve the matter in accordance with Article 21 paragraph 1.
…
6.The Company shall, at the completion of all the investigations and studies, submit to the Department a final report stating the results of and the cost incurred in respect of the investigations and studies and the Company's analysis of and its conclusions and projections in respect of those results, and such other information relating to the Enterprise or the Mining Area which is in the possession of the Company and which the Government may reasonably request.
Annexure 'E' is headed 'Feasibility Study Report'. It provides, relevantly, that, without limiting the generality of Article 8, the investigations and studies to be carried out by PTAR during the Feasibility Study Period shall include, amongst other things:
1.A thorough geological investigation and proving of the ore deposits in the Mining Area including proven, probable and possible ore reserves to the extent necessary for the economic feasibility of the Enterprise to be judged and the testing and sampling of those deposits substantially in accordance with the agreed work program.
2.Detailed and reconnaissance site information for the operations included in the Enterprise together with the preparation of suitable maps and drawings of such sites.
3.A study of the technical and economic feasibility of the mining, transporting, handling and shipping of ores, concentrates and other forms of Minerals from the Mining Area, including engineering investigations of possible port sites, road links from mine sites to river terminals and other appropriate means of transport.
…
14.Complete studies and investigation in relation to the following:
(i)the feasibility and cost of establishing suitable telecommunications facilities;
(ii)the feasibility and cost of construction and operating facilities to supply the power required for construction, mining, industrial and permanent settlement to be used in connection with the Enterprise; and
(iii)the feasibility and cost of establishing suitable water works required in connection with the Enterprise.
Article 9 is concerned with the Construction Period. Paragraph 1 of Article 9 provides, relevantly:
Following receipt from the Department of approval with respect to the design and time schedule for construction provided for in paragraph 3 of Article 8 the Company shall, in accordance with such approved time schedule, commence construction of the facilities and use its best efforts, subject to the provisions of Article 19, to complete such facilities within such approved time schedule.
Article 10 is concerned with the Operating Period. Paragraph 1 of Article 10 provides that, upon completion of the construction of the facilities provided for in Article 9, 'the Company shall commence operation of the Mining Area or part thereof for which such facilities have been constructed'.
Article 11 relates to marketing. Paragraphs 1 and 2 of Article 11 provide:
1.The Government will grant the Company the right to export its Products obtained from the operations under this Agreement. Without in any way prejudicing the Company's basic right to export its Products, such export will be subject to the provisions of the export laws and regulations of Indonesia. The Company shall endeavour at all times to fulfil the requirements of the domestic market for its Products subject and subordinate to the Company's committed export sales agreements of its Product [sic].
2.The Company shall sell its Products in accordance with generally accepted international business practices, and use its best efforts to do so at prices and on term [sic] of sale which will maximize the economic return from the operations hereunder.
Article 13 deals with taxes and other financial obligations of the Company. Paragraph (i) requires the Company to pay an annual amount of money to the Government as 'deadrent' to be measured by the number of hectares included in the Contract Area or Mining Area. Paragraph (ii) requires the Company to pay royalties to the Government in respect of the Company's production of Minerals. Paragraph (iii) requires the Company to pay income tax to the Government. Other provisions of Article 13 impose obligations on the Company to pay stamp duty on documents, import duty on goods imported into Indonesia, and land and building tax.
Article 18 is headed, 'Enabling Provisions'. By par 1 of Article 18, relevantly:
The Government will grant the Company the necessary rights and will take such other action as may be desirable to achieve the mutual objectives of this Agreement. The Company shall have the following rights:
(i)the sole right to enter the Contract Area or any Mining Area for the purposes of this Agreement, to make drill holes, test pits and excavations, and to take and remove, without royalty or other charge, samples for assays and for metallurgical, pilot plant and laboratory research purposes, including bulk samples for such purposes provided that the Company shall have received the approval by the Government prior to the export of any such samples, to be given on a yearly basis, and shall pay any royalties applicable thereto.
(ii)to enter upon and remain within the Contract Area and the Project Areas (related to the Contract Area including portions of the air space and shore line), subject to the right of the Department to object to any Mining Area as provided in paragraph 2 of Article 8.
Paragraph 2 of Article 18 confers on the Company in essence the right to construct facilities, as it deems necessary, in carrying out its activities under the agreement, subject to the laws and regulations from time to time in effect in Indonesia.
Paragraph 3 of Article 18 provides:
Subject to laws and regulations which may from time to time be in force in Indonesia, and subject also to the provisions of paragraph 2 of Article 25 and paragraph 2 of article 16, the Company may at any time file with the Department a plan or plans and may thereafter file additional or amended plans covering:
(i)the Mining Area or Areas in which the Company proposes to construct facilities related to production;
(ii)all other areas in which the Company proposes to construct any other facilities necessary for the Enterprise and the location of all such rights in and over land including easements, rights of way and rights to lay or pass on, over or under land, any roads, railways, pipes, pipelines, sewers, drains, wires, lines or similar facilities as may be necessary for the Enterprise; and
(iii)all other areas in which the Company shall have the right to construct such additional facilities as the Company deems necessary or convenient for the Enterprise.
The Government shall thereupon make arrangements for the Company to utilize and remain within all such areas and such land covered by such plans (or such comparable areas as may be agreed between the Government and the Company) and to exercise the other rights specified above with respect to each such area. The use and occupancy of any areas covered by such plans shall not be subject to payment by the Company of any charges or fees other than those specified elsewhere in this Agreement. The plans filed pursuant to this paragraph shall, to the extent practicable, give description in sufficient detail to permit precise identification of the designated areas. The Government shall assist the Company in arrangements for any necessary resettlement of local inhabitants whose resettlement from any part of the Contract Area or the Project Areas is necessary and the Company shall pay for the resettlement and give reasonable compensation for any dwelling, privately owned lands (including such land ownership based on any Indonesian customs or customary laws, generally or locally applicable) privately owned crops and flora or other improvements in existence on any such parts which are taken or damaged by the Company in connection with its activities under this Agreement.
By par 7 of Article 18, at the request of the Company, 'the Government shall co‑operate in a joint endeavour to alleviate any interference which may arise from others operating under conflicting rights'.
Article 21 is concerned with the settlement of disputes. It provides for all disputes between the parties arising out of the agreement or the application of the agreement or the operations under the agreement to be resolved either by conciliation or arbitration.
Article 22 provides for the termination of the agreement in various circumstances.
Article 23 deals with cooperation between the parties. By par 1 of Article 23, the parties agree that they will 'at all times use their best efforts to carry out the provisions of this Agreement to the end that the Enterprise may at all times be conducted with efficiency and for the optimum benefit of the Parties'.
Article 31 provides for the term of the agreement. By par 1 of Article 31, the agreement becomes effective on 28 April 1997. By par 2 of Article 31, subject to the other provisions of the agreement, the agreement continues in force until the expiration of 'the last Operating Period for a Mining Area and for such additional period, if any, for which this Agreement shall be renewed or otherwise extended'.
Paragraph 1 of Article 32 provides that, except as otherwise expressly provided in the agreement, the agreement, its implementation and operation shall be 'governed and construed and interpreted in accordance with the laws of the Republic of Indonesia'.

The stage of work under the Martabe Contract of Work as at 30 March 2007

As at 30 March 2007, the Feasibility Study Period subsisted under the Martabe Contract of Work.
As at 30 March 2007, the General Survey Period and the Exploration Period under the agreement had concluded.

The expert evidence on the mining law of Indonesia

Before the Tribunal, the respondents relied on evidence from Susandarini, an Indonesian citizen and lawyer, and an expert on the mining law of Indonesia.
In her witness statement dated 4 April 2012, Susandarini said:
(a)The law of the Republic of Indonesia is based on Roman‑Dutch law, but has been modified substantially by indigenous concepts [15].
(b)The Republic of Indonesia is a civil law jurisdiction [16].
(c)As at 30 March 2007, the enactment procedures and the hierarchy of Indonesian laws and other instruments was set out in Law No 10 Year 2004 re the Forming of Laws and Regulations dated 22 June 2004 (Law No 10/2004) [20].
(d)Pursuant to Law No 10/2004, as at 30 March 2007, the hierarchy of Indonesian laws and other instruments was as follows:
(i)Indonesian Constitution of 1945 (Undang‑Undang Dasar Negara Republik Indonesia Tahun 1945);
(ii)Laws of the Republic of Indonesia (Undang‑Undang), which were passed by the People's Representative Assembly (Dewan‑Perwakilan Rakyat);
(iii)Government Regulations in Lieu of Laws (Peraturan Pemerintah Pengganti Undang‑Undang), which were issued by the President in the event of emergency;
(iv)Government Regulations (Peraturan Pemerintah), which were issued to implement a Law under (ii);
(v)Presidential Regulations (Peraturan Presiden), which were issued to implement a Law under (ii); and
(vi)Regional Regulations (Peraturan Daerah), which were issued by the Regional People's Representative Assembly (Dewan Perwakilan Rakyat Daerah) [21].
(e)As at 30 March 2007, the key legislation in Indonesia with respect to mining was the Previous Mining Law, being a law passed by the People's Representative Assembly [25].
(f)There were implementing regulations issued under the Previous Mining Law, being the Previous Mining Law Implementing Regulations [26].
(g)As a result of the Previous Mining Law and the Previous Mining Law Implementing Regulations, Indonesia has traditionally recognised three ways by which mining may be conducted in Indonesia, being KPs (or mining authorisations), contracts of work and coal contracts of work [27].
(h)Pursuant to a contract of work:
(i)the Government of Indonesia appoints a PMA company as the sole contractor of the Government with respect to the particular contract area referred to in the agreement; and
(ii)the PMA company is granted the sole right to explore, mine, process, store, transport, market, sell and dispose of minerals within the particular contract area referred to in the agreement, subject to fulfilment of certain conditions, including payment obligations to the Government [31].
(i)Traditionally, the process for authorisation of the execution of a contract of work at the level of the Government of Indonesia has required the consent of, among others:
(i)the President;
(ii)the Parliament; and
(iii)the Capital Investment Coordinating Board [32].
(j)As at 30 March 2007, Indonesian instruments with respect to contracts of work were:
(i)the Previous Mining Law;
(ii)the Previous Mining Law Implementing Regulations;
(iii)Decision No 150; and
(iv)Decree No 812 [34].
(k)The Previous Mining Law only recognised the authority of the Government of Indonesia to execute contracts of work and neither the Previous Mining Law nor the Previous Mining Law Implementing Regulations dealt with the content of a contract of work [35].
(l)As at 30 March 2007, Indonesia's (then) umbrella law permitting foreign investment, being the Previous Foreign Investment Law, recognised that investment in mining in Indonesia by foreign investors was to be by way of a 'contractual agreement' with the Government of Indonesia [36].
(m)A contract of work is a 'contractual agreement' between the Government of Indonesia and a PMA company [51].
(n)As at 30 March 2007, the holder of a contract of work did not derive its rights from legislation but from the contract of work itself [52].
(o)As at 30 March 2007, the instruments relating to contracts of work, principally being Decision No 150 and Decree No 812, merely set out the procedure for making an application for a contract of work [53].
(p)All existing owners of the land, within the area specified in a contract of work, retain ownership and possession of their land [64].
(q)The Martabe Contract of Work 'does not transfer or confer any interest in land to [PTAR]' [65].
(r)Under the Martabe Contract of Work, land title is not expressed to pass and no leasehold interest is granted to the holder of the contract (that is, PTAR) [66].

Counsel for the Commissioner informed Judge Sharp that the Commissioner accepted the opinions of Susandarini as set out in her witness statement dated 4 April 2012 [32]. His Honour made findings in accordance with that witness statement [33].
Susandarini provided a supplementary witness statement dated 23 July 2012. In the supplementary statement, she said:
3.Article 1 of the Previous Mining Law states as follows:
'All minerals found within the Indonesian mining jurisdiction in the form of natural resources as blessing of God Almighty are national wealth of the Indonesian people and shall, therefore, be controlled and utilised by the State for maximum welfare of the people.'
(The Previous Mining Law is in Indonesian. The English translation above has been made by me and I believe it to be an accurate translation.)
4.This is reflected in recital A to the [Martabe Contract of Work], which states that all mineral resources contained in the territories of the Republic of Indonesia are the national wealth of the Indonesian nation.
5.Consistent with minerals being controlled by the State as part of the national wealth of the Indonesian people, the Government of Indonesia is in a position to enter into contracts such as the [Martabe Contract of Work] under which it is agreed that the contracting party will have certain rights to explore for and mine minerals in consideration for the contracting party agreeing to perform certain work and undertake a number of obligations (article 2(1) of the [Martabe Contract of Work]).
6.However, while the Government of Indonesia was in a position to agree under the [Martabe Contract of Work] that PTAR would have certain rights to minerals in the Contract Area referred to in the [Martabe Contract of Work], the [Martabe Contract of Work] did not confer any interest or rights in the land itself. The [Martabe Contract of Work] does not grant any title to land or any leasehold or other interest in land or any rights in relation to land (see paragraph 66 of my Original Statement).
7.As at 31 March 2007, I understand that PTAR had identified approximately 530 plots of land within the Contract Area referred to in the [Martabe Contract of Work]. Of these, a process of identifying local landowners and confirming land boundaries had been completed with respect to approximately 330 plots of land. It was legally impossible for the Government of Indonesia to purport to confer upon PTAR any interest or rights with respect to that land, nor does the [Martabe Contract of Work] seek to do so (see paragraph 66 of my Original Statement).
8.In order to gain access to and the right to enter the land within the Contract Area for the purpose of carrying out mining activities, PTAR had to negotiate and reach agreement with the local land owners who owned the land. This is something that PTAR sought to do from the time the [Martabe Contract of Work] was entered into in 1997. As at 31 March 2007, a number of agreements for access to the land for mining purposes had been entered into between PTAR and local land owners in relation to some of the approximately 330 plots of land, and others were in the process of being negotiated …
9.Any rights that PTAR had to come on to the land, have access to the land or to occupy the land were derived from agreements entered into with the local land owners …
10.No right to enter or occupy the land was conferred by the [Martabe Contract of Work], nor did the Government of Indonesia have the legal ability to grant any such right under the [Martabe Contract of Work].
Counsel for the Commissioner did not accept some of the evidence in Susandarini's supplementary witness statement because he did not have the opportunity to cross‑examine her on the statement. Judge Sharp said it was therefore appropriate that he give the supplementary statement 'less weight' than he would give to the original witness statement [32].

The critical issues in the application of pt IIIBA to Oxiana Agincourt's acquisition of a controlling interest in OZ Minerals Agincourt

The critical issues in the application of pt IIIBA of the Act to Oxiana Agincourt's acquisition of a controlling interest in OZ Minerals Agincourt are:
(a)whether the rights or interests granted or conferred on PTAR under the Martabe Contract of Work, as at 30 March 2007, were a 'tenement, right or interest' within the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of the Act (Issue 1); and
(b)if so, whether the tenement, right or interest, as at 30 March 2007, was 'similar' (within par (c)(i) of the definition) to a mining tenement held under the Mining Act 1978 (WA) (being a mining tenement within the meaning of that Act or the Mining Act 1904 (WA)) or to a mining tenement or right of occupancy continued in force by s 5 of the Mining Act 1978 (Issue 2); and
(c)if so, whether the tenement, right or interest, as at 30 March 2007, was 'held under the law of … another jurisdiction' (within par (c)(ii) of the definition) (Issue 3).

The constitutional issue as to the validity of the assessment

The respondents also raised an issue as to whether the assessment is unconstitutional and invalid on the ground that any liability to duty under the Act is dependent upon the characterisation of an item of property which has no territorial connection with this State and it is beyond the power of the Parliament of Western Australia to impose such a liability (Issue 4).

The Tribunal's conclusion and reasoning in relation to Issue 1

Judge Sharp noted the respondents' submission that the words 'tenement, right or interest', within the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of the Act, refer to rights and interests of a proprietary nature, and do not include rights of a personal or contractual nature [46].
His Honour said he '[could] see no reason to conclude that "right or interest" should be limited to proprietary rights or interests' [47]. He added that, even if those words were to be read in that manner, there was 'clear authority' for the view that 'contractual rights may themselves be proprietary' [47]. His Honour then cited Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] QCA 73; [2007] 2 Qd R 373.
On the basis of this reasoning, Judge Sharp decided that the rights or interests granted or conferred on PTAR under the Martabe Contract of Work were a 'tenement, right or interest' within the chapeau of par (c) of the definition [48].

The Tribunal's conclusion and reasoning in relation to Issue 2

Judge Sharp said that the word 'similar', within par (c)(i) of the definition of 'mining tenement' in s 76(1) of the Act, should be given its ordinary and natural meaning which, according to his Honour, was, when followed by the word 'to', 'having a resemblance or likeness'; 'of the same nature or kind' [49] ‑ [50].
His Honour considered whether the rights and interests of PTAR under the Martabe Contract of Work as at 30 March 2007 were similar to any of the mining tenements referred to in par (a) of the definition. He held that they were not [63], [66], [68], [71], [74], [76], [79].
Judge Sharp then examined the features and characteristics of the rights and interests of PTAR under the Martabe Contract of Work as at 30 March 2007 and the features and characteristics of a right of occupancy continued in force by s 5 of the Mining Act 1978 [80] ‑ [104].
His Honour's findings in relation to a right of occupancy were as follows:
[T]he general features and characteristics of the right of occupancy preserved under s 5 of the 1978 Act would seem to be as follows:
1)The right of occupancy originates in an agreement ratified by an Act of Parliament. It operates and takes effect despite the provisions of any existing Act or law.
2)It is granted over an area of what was Crown land as defined in the 1904 Act.
3)It creates an exclusive and immediate right of occupancy over the whole of the land the subject of the relevant State Agreement.
4)It is for the purpose of the State Agreement, including the sole right to prospect for iron ore.
5)It is granted for successive periods each of no more than 12 months' duration.
6)It contemplates the payment of rent [105].
His Honour's findings in relation to the Martabe Contract of Work were these:
In contrast, the right of occupancy granted under the Martabe CoW as at 30 March 2007 is:
1)created by way of an agreement entered into between the Government of Indonesia and PTAR, and it operates and takes effect subject to the provisions of the existing laws of Indonesia;
2)granted over an area of occupied land and is subject to agreement for resettlement being reached with the occupants;
3)granted for the purpose of the agreement, which at the relevant date is the carrying out of a feasibility study period;
4)granted only for the duration of the feasibility study; and
5)not subject to the payment of any rent [106].
Although Judge Sharp accepted that the Martabe Contract of Work conferred on PTAR a right of occupancy of the 'Contract Area', for the purpose of carrying out a feasibility study, he concluded that this right was not similar to a right of occupancy continued in force by s 5 of the Mining Act 1978. His Honour said:
The Martabe CoW and a relevant State Agreement may well share some common characteristics. Both were intended to result in the development of proposals to mine and thereafter the creation of mining rights. However, I do not accept that the rights of occupancy preserved by s 5 of the 1978 Act and the rights of occupancy conferred under the Martabe CoW during the feasibility study period are similar [107].
Judge Sharp also concluded that the Martabe Contract of Work was not similar to a mining tenement continued in force by s 5 of the Mining Act 1978:
I have already found earlier in these reasons that the Martabe CoW was not similar to a mining lease or a mineral lease and that the rights of a holder of a mining lease or a mineral lease are not similar to the rights under the Martabe CoW at the relevant time. It follows that I do not consider that the Martabe CoW or any right or interest granted or conferred by the Martabe CoW was at the relevant time similar to a mining tenement preserved by s 5 of the 1978 Act [111].
On the basis of this reasoning, his Honour decided that the 'tenement, right or interest' granted or conferred on PTAR under the Martabe Contract of Work was not 'similar' (within par (c)(i) of the definition) to a mining tenement held under the Mining Act 1978 or to a mining tenement or right of occupancy continued in force by s 5 of the Mining Act 1978.

The Tribunal's conclusion and reasoning in relation to Issue 3

Judge Sharp noted that, in view of his finding in relation to Issue 2, it was unnecessary to decide Issue 3. He nevertheless expressed his view on this point.
Although he accepted that the parties to the Martabe Contract of Work did not derive their rights and obligations from legislation, he was satisfied that the Martabe Contract of Work was held under the law of another jurisdiction, namely Indonesia, for the purposes of par (c)(ii) of the definition of 'mining tenement' in s 76(1) of the Act. He based this conclusion on the following matters:
(a)Section 5 of the Interpretation Act 1984 (WA) provides that the word 'under', in relation to a written law or a provision of a written law, includes 'by', 'in accordance with', 'pursuant to' and 'by virtue of' [117].
(b)Susandarini, the expert on Indonesian law relating to mining who gave evidence before the Tribunal, confirmed that while the Previous Mining Law and the Previous Mining Law Implementing Regulations of Indonesia do not deal with the content of a contract of work, the regulations recognise the authority of the Government of Indonesia to execute contracts of work and the procedures for such execution [118].
(c)It was 'clearly open' to give the expression 'under the law' a broad interpretation and, because par (c)(i) of the definition used 'the very general word "similar"', he thought it was 'unlikely [to have been] intended that the definition should be restricted by a narrow definition of the phrase "held under the law of … another jurisdiction"' [120].
(d)Article 32 of the Martabe Contract of Work provides that the agreement is governed by the law of Indonesia [121].
(e)The Martabe Contract of Work is recognised by the law of Indonesia and subject to the doctrine of lex specialis [121].

The Tribunal's conclusion and reasoning in relation to Issue 4

Judge Sharp said that the respondents sought, in substance, a finding by the Tribunal as to the power of the Parliament of Western Australia to enact div 3b of pt IIIBA of the Act and that this was beyond the Tribunal's jurisdiction [126].
However, his Honour dealt briefly with the issue in case he was wrong in his view as to jurisdiction.
The respondents had contended it was beyond the power of the Parliament to enact div 3b because:
(a)the obligation to pay stamp duty arose in respect of an acquisition of shares in a company incorporated outside Western Australia, and it followed that there was no sufficient nexus between the subject matter of the duty and Oxiana Agincourt's land in Western Australia; and
(b)the obligation to pay the duty also depended on the characterisation of property outside Western Australia 'as land' to which Oxiana Agincourt was 'entitled' for the purposes of div 3b.
His Honour rejected the respondents' contentions. He said that Oxiana Agincourt's land in Western Australia constituted a sufficient territorial nexus and that stamp duty was levied only on property in Western Australia and not on any property in Indonesia or elsewhere.

The nature of the appeal to this court

By s 43A(1) of the Taxation Administration Act, an appeal from a decision of the Tribunal can be brought on a question of law, of fact, or mixed law and fact, without having first obtained leave to appeal.
This appeal as of right is by way of rehearing. On an appeal by way of rehearing, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance': Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549, 561 (Isaacs J). However, the appellate court must necessarily observe any 'natural limitations' that exist where the appellate court proceeds wholly or substantially on the record. See Dearman (561); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23] (Gleeson CJ, Gummow & Kirby JJ).
In the present case, the Tribunal's conclusions and reasoning were not based on any credibility determinations. The Tribunal's conclusions depended on reasoning or inferences drawn from undisputed facts or facts that have been found but can equally be re‑determined by this court, without relevant disadvantage. See CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458 [22] (Kirby J).

The Commissioner's grounds of appeal

The Commissioner challenges the correctness of the Tribunal's conclusion in relation to Issue 2.
In particular, the Commissioner contends that:
(a)The Tribunal erred in law in comparing the particular rights or interests of PTAR under the Martabe Contract of Work as at 30 March 2007 with particular tenements and rights referred to in pars (a) and (b) of the definition of 'mining tenement' in s 76(1) of the Act, whereas it should have found that the rights or interests of PTAR under the Martabe Contract of Work were 'similar' to one or more of the tenements or rights referred to in pars (a) and (b) of that definition generally.
(b)The Tribunal erred in law by misconstruing the general features and characteristics of a right of occupancy continued in force under s 5 of the Mining Act 1978 referred to in par (b) of the definition of 'mining tenement' in s 76(1).
(c)Further or alternatively to (a) above, the Tribunal erred in law or in fact in failing to find that rights or interests of PTAR under the Martabe Contract of Work as at 30 March 2007 were 'similar' to a right of occupancy continued in force under s 5 of the Mining Act 1978.

The respondents' notice of contention

The respondents filed a notice of contention in which they challenge the Tribunal's conclusions in relation to Issues 1, 3 and 4.
In particular, the respondents contend that the Tribunal's decision that the rights or interests granted or conferred on PTAR under the Martabe Contract of Work as at 30 March 2007 do not fall within the definition of 'mining tenement' in s 76(1) of the Act should be upheld, in any event, on the following grounds not relied on by the Tribunal:
(a)The Martabe Contract of Work, or any rights or interests granted or conferred under that agreement, were not a 'tenement, right or interest' within the chapeau of par (c) of the definition of 'mining tenement' in s 76(1).
(b)The Martabe Contract of Work, or any rights or interests granted or conferred under that agreement, were not held under the law of 'another jurisdiction' (in particular, Indonesia), within par (c)(ii) of the definition.
(c)The assessment was invalid because it is beyond the power of the Commissioner to issue the assessment, and to deal with the objection to it, in that it is beyond the power of the Parliament of Western Australia to impose a liability to taxation which is dependent upon the characterisation of an item of property which has no territorial connection with this State.

The organisation of the balance of these reasons

It is convenient to consider the Commissioner's grounds of appeal and the respondents' notice of contention by reference to each of Issues 1, 2, 3 and 4.

Issue 1: the respondents' submissions

Paragraph (c) of the definition of 'mining tenement' in s 76(1) of the Act refers to a 'tenement, right or interest' that is 'similar to' a 'tenement' or 'right' referred to in par (a) or (b) of the definition.
Counsel for the respondents submitted that the expression 'tenement, right or interest' in par (c) must be construed in the context of the mining tenements referred to in par (a) and the mining tenement or right of occupancy referred to in par (b).
It was submitted that:
(a)the mining tenements referred to in par (a) provide for rights to be granted by the Minister to occupy land for the purposes of exploring, prospecting or mining for minerals; and
(b)the mining tenement or right of occupancy referred to in par (b) provides for rights to be granted by the Minister to occupy reserved land for prospecting, without others being entitled to acquire claims over the reserve during the subsistence of those rights.
It follows, so it was submitted, that the expression 'tenement, right or interest' in par (c) should be construed narrowly to comprise rights granted by a Minister or government authority to occupy land for the purposes of exploring, prospecting or mining for minerals.
Counsel for the respondents advanced these arguments in relation to the Martabe Contract of Work:
(a)The Martabe Contract of Work does not provide for the reservation by any Minister or other official of the Government of Indonesia of the land in question from occupation by others.
(b)As at 30 March 2007, PTAR had negotiated and entered into agreements with some local landowners under which those landowners had granted PTAR access to their land for the purposes of PTAR's activities under the Martabe Contract of Work. PTAR was also negotiating with other landowners, as at 30 March 2007, for access to their land. Pursuant to these agreements, PTAR had access to and had undertaken work on the land the subject of the agreements to the extent necessary to carry out the General Survey Period, the Exploration Period and the Feasibility Study Period under the Martabe Contract of Work.
(c)The rights granted or conferred on PTAR under the Martabe Contract of Work, in particular those rights as at 30 March 2007 and during the Feasibility Study Period, do not include any rights granted by a Minister or government authority to occupy land for the purposes of exploring, prospecting or mining for minerals.
(d)During the Feasibility Study Period, the rights of PTAR under the Martabe Contract of Work are confined, relevantly, to the right to carry out feasibility studies. The right to occupy the relevant land had to be negotiated by PTAR with the local landowners. The Martabe Contract of Work does not confer on PTAR a right to explore, prospect or mine for minerals during the Feasibility Study Period, except to the extent of a limited right to extract or mine minerals for the purposes of the feasibility study.

Counsel for the respondents sought to distinguish the decision in Sorrento Medical Service on the basis that it concerned an interest which was defined by statute 'in relation to' land in the context of compensation for injurious affection. In any event, according to counsel the reasoning of Holmes JA, who dissented in that case, is to be preferred.
It was submitted that the expression 'tenement, right or interest' in par (c) of the definition does not include rights of a contractual or personal nature. Counsel argued that the word 'right' must be construed in context and consistently with the words 'tenement' and 'interest', with which it forms a composite expression. The expression 'tenement, right or interest', so it was submitted, refers to rights and interests of a proprietary nature, and not rights of a contractual or personal nature.
The respondents contended that neither the Martabe Contract of Work nor any rights or interests granted or conferred on PTAR under the agreement were, as at 30 March 2007, a 'tenement, right or interest' within par (c) of the definition.

Issue 1: its determination

The modern approach to statutory construction is purposive. The statutory text is the surest guide to the Parliament's intention. A decision as to the meaning of the text must begin by considering the context, in its widest sense. This will include the general purpose and policy of the provision. See Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69] (McHugh, Gummow, Kirby & Hayne JJ); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [47] (Hayne, Heydon, Crennan & Kiefel JJ); Travelex Ltd v Federal Commissioner of Taxation [2010] HCA 33; (2010) 241 CLR 510 [82] (Crennan & Bell JJ).
The function of a definition in a statute is not, except in rare cases, to enact substantive law. Rather, its function is to provide aid in construing the substantive enactment that contains the defined term. The meaning of the definition depends on the context, and the purpose or object, of the substantive enactment. See Kelly v The Queen [2004] HCA 12; (2004) 218 CLR 216, where McHugh J noted:
Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment. There is, of course, always a question whether the definition is expressly or impliedly excluded. But once it is clear that the definition applies, the better - I think the only proper - course is to read the words of the definition into the substantive enactment and then construe the substantive enactment - in its extended or confined sense ‑ in its context and bearing in mind its purpose and the mischief that it was designed to overcome. To construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment [103].
See also Allianz Australia Insurance Ltd v GSF Australia Pty Ltd[2005] HCA 26; (2005) 221 CLR 568 [12] (McHugh J); s 6 of the Interpretation Act.
Issue 1 raises two questions. First, what is the proper construction of the expression 'tenement, right or interest' within the chapeau of par (c) of the definition of 'mining tenement' in s 76(1)? Secondly, were the rights or interests granted or conferred on PTAR under the Martabe Contract of Work, as at 30 March 2007, a 'tenement, right or interest' within that expression, properly construed?
As to the first question raised by Issue 1, each of the words 'tenement', 'right' or 'interest' within the chapeau of par (c) has an extensive and variable meaning. They are abstract terms. It is necessary, in determining the meaning of 'tenement', 'right' or 'interest' within the chapeau, to consider the apparent purpose or object of par (c) in the context of pt IIIBA as a whole.
Part IIIBA was inserted by the Stamp Amendment Act 1987 (WA). The effect of introducing pt IIIBA was to charge duty on the change of control of certain land-owning corporations at the rate of duty applicable to a conveyance on the sale of land under s 74(1) of the Act. Previously, duty on a transfer of shares in a corporation had been charged at a significantly lower rate. In Commissioner of State Taxation v Nischu Pty Ltd (1991) 4 WAR 437, Pidgeon J explained the purpose or object of the Parliament in introducing pt IIIBA, as follows:
The purpose and object underlying these amendments was to equalise the burden of stamp duty so that persons who acquired the benefit of land by having transferred to them the whole of the shares in a company that owned the land, when that was substantially the only asset of the company, would be required to pay ad valorem conveyance duty in a similar way as if the land had been transferred from one individual to another. Prior to the amendment, if land was owned by a company and if that was the only asset of the company, considerable duty would be saved by transferring to a purchaser the whole of the shares in the company instead of transferring the land. The purchaser would have acquired the land albeit under a company structure. If a company owned other substantial assets the procedure would be less likely to be used as the shareholders would be less likely to be parting both with the land and the other assets at the same time. The legislature aimed, therefore, to cover the situation where the land holding of the company was 80 per cent [sic: now 60%] or more of the value of the whole of its property. It did not apply if the value of the land was less than $1,000,000 (457).
Mining tenements under the Mining Act 1904 and the Mining Act 1978 have been characterised as being in the nature of personalty, not realty. See TEC Desert Pty Ltd v Commissioner of State Revenue [2010] HCA 49; (2010) 241 CLR 576 [27] ‑ [47] (French CJ, Gummow, Heydon, Crennan & Kiefel JJ).
The Parliament included the definitions of 'land' and 'mining tenement' in s 76(1) of the Act to ensure, amongst other things, that:
(a)a mining tenement held under the law of Western Australia; and
(b)a 'tenement, right or interest' that is similar to a tenement or right referred to in par (a) or par (b) of the definition of 'mining tenement' in s 76(1) and that is held under the law of another State, a Territory, the Commonwealth or another jurisdiction,
is 'land' for the purposes of s 76ATI(2) and analogous provisions of pt IIIBA.
A 'tenement, right or interest' that satisfies the conditions in subpar (i) and subpar (ii) of par (c) must be taken into account in determining whether the corporation in question is a land‑holder within s 76ATI(2) or analogous provisions of pt IIIBA. That is, the value of the corporation's entitlement to a 'right, tenement or interest' which satisfies the conditions in subpar (i) and subpar (ii) of par (c) must be brought to account in deciding whether the 60% threshold in s 76ATI(2)(b) or analogous provisions of pt IIIBA is fulfilled.
Each of the words 'tenement', 'right' or 'interest' in the chapeau of par (c) has a broad and general connotation. This breadth and generality is then qualified and restricted by the conditions in subpar (i) and subpar (ii) of par (c). A 'tenement', 'right' or 'interest' within the chapeau will not be a 'mining tenement', as defined in s 76(1), unless it is similar to a tenement or right referred to in par (a) or par (b) and it is held under the law of another State, a Territory, the Commonwealth or another jurisdiction.
The Parliament intended that a 'tenement, right or interest' may be a 'mining tenement', within the definition, even though it is merely 'similar to' a mining tenement held under the Mining Act 1978 or merely 'similar to' a mining tenement or right of occupancy continued in force by s 5 of the Mining Act 1978. Further, the Parliament intended that a 'tenement, right or interest' may be a 'mining tenement', within the definition, even though it does not exist under the laws of Western Australia (or the laws of the Commonwealth or any Territory or other State of Australia).
It is notorious that mining operations are conducted in foreign jurisdictions which have legal systems and substantive laws that are different from Western Australia. Most foreign jurisdictions do not have an English common law heritage or a Parliamentary democracy derived from the Westminster system. This explains, no doubt, the disjunctive use of the words 'tenement', 'right' or 'interest', in the chapeau of par (c), to describe a concept or thing that may not have a direct counterpart in this State. It also explains the use of the word 'similar' in subpar (i) of par (c).
Numerous cases have examined the meaning of the word 'tenement'. The speech of Lord Chelmsford in Beauchamp v Winn (1873) LR 6 HL 223, 241 is frequently cited.
The word 'tenement', in ordinary speech, now refers to a house or building. But its legal meaning 'is everything in which a man can have an estate of freehold and which is connected with land': Re Lehrerand the Real Property Act 1900 [1961] SR (NSW) 365, 370 (Jacobs J). See also Australian Shipping Commission v City of Port Melbourne [1990] VR 439, 441 ‑ 443 (Gobbo J); The State of Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1 [482] fn 572 (McHugh J).
In my opinion, in the chapeau of par (c):
(a)the word 'tenement' means anything in which a person can have an estate of freehold and which is connected with land;
(b)the word 'right' means any legally enforceable claim in respect of real or personal property; and
(c)the word 'interest' means any interest in real or personal property.
Plainly, there is some overlap between these terms. This is consistent with their broad and general connotation and the intention of the Parliament to capture concepts or things that may exist under the law of a foreign jurisdiction but not have a direct counterpart in this State.
It follows, on my analysis, that:
(a)the expression 'tenement, right or interest' within the chapeau of par (c) is not confined to estates or interests in land;
(b)the word 'right' within the chapeau extends beyond a concept or thing which is a 'tenement' or an 'interest'; and
(c)a 'right' within the chapeau need not be a 'tenement' or an 'interest' within the chapeau.
The decision in Sorrento Medical Service is not in point. In that case, the appellant had a contractual licence to use various car parking spaces. The respondent compulsorily acquired the land on which the car parking spaces were located. The Acquisition of Land Act 1967 (Qld) conferred a right to compensation for the taking of an estate or interest in land. The Acts Interpretation Act 1954 (Qld) defined 'interest' in land to mean, relevantly, 'a right, power or privilege over, or in relation to' the land. A majority of the Court of Appeal of Queensland (McMurdo P & Chesterman J) held that the contractual licence in question was within the definition of 'interest' in land. The decision in Sorrento Medical Service turned on the application of the facts of that case to the particular statutory provisions, properly construed.
As to the second question raised by Issue 1, as at 30 March 2007 the Feasibility Study Period subsisted under the Martabe Contract of Work. The General Survey Period and the Exploration Period under the agreement had concluded.
As at 30 March 2007, PTAR had present rights under Article 8 of the Martabe Contract of Work. Those present rights included the right to carry out investigations and studies, as described in annexure 'E' to the agreement, to determine the feasibility of commercially developing a mineral deposit or deposits in any part of the Contract Area, being the area described in annexure 'A', annexure 'B' and Article 4 par 1 of the agreement.
By annexure 'E', the investigations and studies which PTAR was entitled and bound to carry out during the Feasibility Study Period included a 'thorough geological investigation and proving of the ore deposits in the Mining Area including proven, probable and possible ore reserves to the extent necessary for the economic feasibility of the Enterprise to be judged and the testing and sampling of those deposits substantially in accordance with the agreed work program'.
As at 30 March 2007, PTAR also had future contingent rights under other provisions of the Martabe Contract of Work including Articles 9 and 10.
Article 9 relates to the Construction Period. It provides that PTAR is entitled and bound to construct a mine and facilities if, at any time during the Feasibility Study Period, PTAR submits a written application to the Department, pursuant to Article 8 par 3, that it desires to proceed with the construction of a mine and facilities, and the application is approved by the Department.
Article 10 relates to the Operating Period. It provides that, upon completion of the construction of the facilities, as provided for in Article 9, PTAR is entitled and bound to commence mining operations in the whole or any part of the Mining Area for which the facilities have been constructed. Article 10 also provides that PTAR is entitled and bound to conduct mining operations and any activity of the Enterprise with respect to a Mining Area for the duration of the Operating Period in respect of that Mining Area.
In my opinion, the present rights of PTAR under Article 8 of the Martabe Contract of Work, as at 30 March 2007, are properly to be characterised as legally enforceable claims in respect of property and therefore a 'right' within the chapeau of par (c). Those claims were created by the agreement.
PTAR's present rights, as at 30 March 2007, during the Feasibility Study Period included not merely the conduct of feasibility studies (including a limited right to extract or mine minerals) but also the sole right to submit proposals to mine or process any minerals discovered or proven in the Contract Area. See Article 8 par 3 read with Articles 2 and 18. Although the actual right to mine and process was subject to PTAR obtaining the approval of the Department, in the event of a dispute PTAR was entitled to refer the matter to arbitration. See Article 8 par 3 read with Article 21.
I am of the opinion that PTAR's future contingent rights under other provisions of the Martabe Contract of Work, including Articles 9 and 10, as at 30 March 2007, are also properly to be characterised as legally enforceable claims in respect of property and therefore a 'right' within the chapeau of par (c). Those claims were created by the agreement.
PTAR's present rights under Article 8, and its future contingent rights under Articles 9 and 10 and other provisions, as at 30 March 2007, were legally enforceable contractual claims in respect of property against the Government of Indonesia. Those claims were in respect of property in that the mineral resources within the Contract Area were vested in the Republic of Indonesia, and the Government of Indonesia was empowered to grant or create rights in respect of the mineral resources including the rights conferred on PTAR under Article 8 and the future contingent rights conferred on it under Articles 9 and 10 and other provisions.
PTAR's rights as at 30 March 2007, including its future contingent rights, under the Martabe Contract of Work were of value.
The evidence of Susandarini that:
(a)the Martabe Contract of Work does not transfer to or confer on PTAR any interest in land or any rights in relation to land; and
(b)under the Martabe Contract of Work, land title is not expressed to pass and no leasehold or other interest in land is granted to the holder of the contract (that is, PTAR),
does not preclude the characterisation of PTAR's present rights under Article 8, and its future contingent rights under Articles 9 and 10 and other provisions, as at 30 March 2007, as legally enforceable contractual claims in respect of property against the Government of Indonesia, and therefore a 'right' within the chapeau of par (c). As I have explained, the word 'right' within the chapeau means any legally enforceable claim in respect of real or personal property.
The fact that the Martabe Contract of Work does not provide for the reservation by any Minister or other official of the Government of Indonesia of the Contract Area from occupation by others does not preclude PTAR's present rights under Article 8, and its future contingent rights under Articles 9 and 10 and other provisions, from being classified as a 'right' within the chapeau of par (c). Further, the fact that the right to occupy the relevant land was negotiated by PTAR with local landowners is not inconsistent with PTAR's present rights under Article 8, and its future contingent rights under Articles 9 and 10 and other provisions, being a 'right' within the chapeau. The term 'right' within the chapeau does not have the narrow meaning contended for by the respondents.
In any event, I note that, by Article 18 par 1 of the Martabe Contract of Work, the Government of Indonesia agreed to grant to PTAR 'the necessary rights' and also agreed to 'take such other action as may be desirable' to achieve the mutual objectives of the agreement.
The Government also agreed in Article 18 par 1, read with Article 2, that PTAR would have, relevantly, the following rights:
(a)the sole right to enter the Contract Area or any Mining Area for the purposes of the agreement, to make drill holes, test pits and excavations, and to take and remove, without royalty or other charge, samples for assays and for metallurgical, pilot plant and laboratory research purposes, including bulk samples for such purposes; and
(b)to enter upon and remain within the Contract Area and the Project Areas.
Article 18 par 1, read with the other provisions of Article 18 and the provisions of Articles 2 and 23, imposed on the Government an obligation to ensure (for example, by agreement between the Government and the local landowners) that PTAR had the rights specified in Article 18 par 1.
Article 18 pars 2 and 3 conferred rights on PTAR in relation to the construction of facilities on land within the Contract Area for the purpose of carrying out its activities under the agreement.
It is unnecessary to consider whether the rights or interests granted or conferred on PTAR under the Martabe Contract of Work, as at 30 March 2007, were also a 'tenement' or an 'interest' within the chapeau of par (c).

Issue 1: my conclusion

I am satisfied that the Tribunal's conclusion in relation to Issue 1 was correct. The rights or interests granted or conferred on PTAR under the Martabe Contract of Work, as at 30 March 2007, were a 'right' within the expression 'tenement, right or interest' in the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of the Act.

Issue 2: the respondents' submissions

According to counsel for the respondents, it is the actual, as distinct from the hypothetical, rights held by PTAR, as at 30 March 2007, that are relevant in determining whether PTAR held a 'mining tenement' as defined in s 76(1). The focus must therefore be on PTAR's actual rights during the Feasibility Study Period.
It was submitted in relation to par (a) of the definition:
(a)Paragraph (a) refers to a mining tenement held under the Mining Act 1978, being a mining tenement within the meaning of that Act or the Mining Act 1904.
(b)Each of a prospecting licence, an exploration licence, a retention licence, a mining lease, a general purpose lease and a miscellaneous licence is a 'mining tenement' within the meaning of the Mining Act 1978 and may be held under that Act.
(c)The Tribunal considered the general characteristics and rights of the holder of a prospecting licence, an exploration licence, a retention licence, a mining lease, a general purpose lease and a miscellaneous licence, and then compared those rights with the rights held by PTAR under the Martabe Contract of Work during the Feasibility Study Period. The Tribunal concluded that they were not similar.
(d)The Tribunal also considered each mining tenement within the meaning of the Mining Act 1904 that may be held under the Mining Act 1978, and then compared those rights with the rights held by PTAR under the Martabe Contract of Work during the Feasibility Study Period. The Tribunal concluded that they were not similar.

At all material times, Oxiana Agincourt was incorporated and registered outside Western Australia. At all material times, OZ Minerals Agincourt was incorporated and registered in South Australia and its shares were quoted on the Australian Stock Exchange.
At all material times, OZ Minerals Agincourt had indirect ownership and control of PTAR through an Australian subsidiary, a Singaporean subsidiary and an Indonesian subsidiary.
By s 76ATL(1), read with s 76ATH, a dutiable statement is chargeable in accordance with s 76ATL on the value, free of encumbrances, of the land and chattels situated in Western Australia to which the land‑holder corporation is entitled (either directly or through a subsidiary).
By s 17(1)(c), the land‑holder corporation is liable to pay the duty assessed on the dutiable statement.
In the present case, OZ Minerals Agincourt was obliged to lodge the dutiable statement with the Commissioner and was liable to pay the duty assessed on the statement.
In my opinion, the subject matter of div 3b, for the purposes of territorial nexus, is the dutiable statement (which is taken to be an instrument evidencing the relevant acquisition in the land‑holder corporation), the land‑holder corporation's obligation to lodge the dutiable statement with the Commissioner for assessment of duty and that corporation's liability to pay the duty assessed on the statement.
The territorial connection of this subject matter to Western Australia is as follows.
First, the entity obliged to lodge the dutiable statement with the Commissioner, and liable to pay the duty assessed on the statement, being in the present case OZ Minerals Agincourt, has a connection with the State in that, as required by the land threshold test, it is entitled to land in Western Australia (either directly or through a subsidiary).
Secondly, duty is assessed and chargeable on the dutiable statement solely on the value, free of encumbrances, of the land and chattels situated in Western Australia to which the land‑holder corporation (being, in the present case, OZ Minerals Agincourt) is entitled (either directly or through a subsidiary).
The value of any entitlement to property through a subsidiary is, in essence, an amount equal to the unencumbered value of the property in question multiplied by a percentage equal to the extent of the land‑holder corporation's interest in the subsidiary.
It is true that:
(a)the dutiable statement is taken to be an instrument evidencing the relevant acquisition and is chargeable with duty accordingly; and
(b)the relevant acquisition is a share transfer transaction involving a change in control of a corporation incorporated and registered outside Western Australia, and a transferor and a transferee having no connection with Western Australia.
However, the territorial connection I have identified is a real connection between the subject matter of div 3b and the State, even though it may be a remote or general connection.
The decision of the High Court in Commissioner of Stamp Duties (NSW) v Millar [1932] HCA 63; (1932) 48 CLR 618 is distinguishable. In that case, a majority of the High Court (Gavan Duffy CJ & Evatt J dissenting) held that s 103(1)(b) of the Stamp Duties Act 1920 (NSW) was in excess of the powers of the Parliament of New South Wales. The respondent was the executor and trustee of the will of a deceased person who died resident and domiciled out of New South Wales. The provision purported to authorise, in connection with the payment of death duty, the inclusion in the deceased's dutiable estate of shares held by him in a company incorporated out of and having no share register within New South Wales, but which carried on the business of mining in the State.
Rich, Dixon and McTiernan JJ observed that if the operation of s 103(1)(b) were restricted to deceased persons who had been connected by residence or domicile with New South Wales, then that might have been a sufficient territorial connection to support the imposition of death duty on the shares in the foreign company. However, the death duty was not based upon any personal connection of the deceased with New South Wales. As a shareholder, the deceased had no legal or equitable property in the assets of the company. The shares were not situated in New South Wales. The existence in the State of a business conducted by the company did not make the deceased, as a shareholder, a person who, by his representative, came under the State's legislative jurisdiction (631 ‑ 632).
Rich, Dixon and McTiernan JJ then said:
Let it be assumed that, in so far as the shareholder obtains an actual advantage from the possession by the company of property in New South Wales, that advantage may be taxed by the State. It may be the case that the Legislature can disregard the legal character of the relation between the assets of the company and the shareholders, and can fasten upon the actual benefit or economic advantage which the shareholder derives from property situated in or operations conducted in the State. But the subject of taxation selected by the present enactment is not this advantage or benefit. The subject is the entire value of the share. The business in New South Wales of the company may be a small part of its whole undertaking. It may be a source of little profit, or, indeed of continual loss. The

operations in New South Wales may not account at all for any of the value contained in the share. What the Legislature fastens upon as the subject of taxation is the share, not the economic advantage derived by the connection with New South Wales. It does not supply the measure, the quantum, of tax by reference to the share and impose the tax so measured upon some act occurring or thing situate within its jurisdiction. It assumes to tax the share as property out of the jurisdiction, but does so because of the existence of the company's business within the jurisdiction. In doing so it adopts a connection which is too remote to entitle its enactment to the description a law 'for the peace, welfare, and good government of New South Wales': sec 5 of the Constitution Act 1902. Or, to state the matter in another way, although some connection between the shareholder and New South Wales may be discovered in the existence there of part of the company's undertaking, the enactment goes beyond legislating in respect of that connection. It does not seem possible to construe the provision so as at once to confine it within the ambit of the power of the State Legislature and to include the facts of the present case within its operation (632 ‑ 633).

By contrast with the present case:
(a)the duty in Millar was levied upon property (being shares in the company) which was not situate in New South Wales; and
(b)the legislation in Millar purported to impose duty on the whole value of the shares and not merely on that part of the value of the shares which was attributable to property of the company or the deceased situated in New South Wales.

Issue 4: my conclusion

I am satisfied that the Commissioner's assessment is not invalid. The provisions of the Act on which the assessment relies do not exceed the territorial limitations upon the Parliament's legislative power.

Outcome of the appeal

I would allow the appeal. Counsel should be heard as to the precise form of the orders.
NEWNES JA: I agree that the appeal should be allowed, for the reasons given by Buss JA.
MURPHY JA: I have had the advantage of reading in draft the reasons of Buss JA. I respectfully adopt his Honours outline of the relevant factual and statutory background, grounds of appeal and the issues in the

appeal. I also adopt his Honour's abbreviations. Subject to the matters discussed below, I generally agree with his Honour for the reasons he gives in relation to issues 2, 3 and 4. I too would allow the appeal.

At [106] of Buss JA's reasons, his Honour noted that issue 1 raises two questions. The first is the proper construction of the expression 'tenement, right or interest' within the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of pt IIIBA of the Stamp Act 1921 (WA) (the Act). The second question is whether PTAR's rights or interests under the Martabe Contract of Work fall within the expression 'tenement, right or interest' within the chapeau of par (c).
As to the first question, the term 'mining tenement' is defined in s 76(1) of the Act as follows:
mining tenement means -
(a)a mining tenement held under the Mining Act 1978 being a mining tenement within the meaning of that Act or the Mining Act 1904;
(b)a mining tenement or right of occupancy continued in force by section 5 of the Mining Act 1978; and
(c)a tenement, right or interest that is -
(i)similar to a tenement or right referred to in paragraph (a) or (b); and
(ii)held under the law of another State, a Territory, the Commonwealth or another jurisdiction.
In relation to par (b) of the above definition, s 5 of the Mining Act 1978 (WA) in effect preserved relevantly a right of occupancy granted pursuant to an agreement to which the State is a party and under which a party to the agreement is authorised or required to carry out any mining operations and/or pursuant to s 276 of the Mining Act 1904 (WA) (1904 Act). Such an agreement, even where ratified by statute (often called a State Agreement) operates with force and effect as a contract and its provisions do not have the force of law or create statutory duties and obligations: Re Michael; Ex parte WMC Resources Ltd [2003] WASCA 288; (2003) 27 WAR 574 [26]. Under s 276 of the 1904 Act, Crown land (as defined in s 3 of that Act) could be temporarily reserved from occupation and the Minister could 'authorise any person to temporarily occupy any such reserve on such terms as he may think fit'.
Under the general law the technical meaning of 'tenement' is everything in which a person can have an estate of freehold and which is connected with land: Re Lehrer [1961] SR (NSW) 365, 370; Earl of Beauchamp v Winn (1873) LR 6 HL 223, 241 ‑ 242. Freehold estates comprised estates in fee simple, estates in fee tail and life estates. The former two were 'fee' estates, the word 'fee' signifying an estate of inheritance: Sweet C, Challis's Law of Real Property (3rd ed, 1911) 218; Butt P, Land Law (6th ed, 2010) [604].
Tenements were not confined to corporeal property and included certain incorporeal interests. In the case of Earl of Beauchamp v Winn, there was a grant from the Duchy of Cornwall, dated 27 March 1799, in respect of, inter alia, a 'warren of conies' (conies being a European rabbit valuable at the time for its pelt). The land had originally been used as a rabbit warren, but was subsequently found to have valuable minerals located beneath its surface. In a dispute between a successor in title of the grant and a third party, the question was whether the grant of 27 March 1799 was, on its proper construction, for a grant of the land, including the soil and minerals underneath the soil, or in effect 'a franchise', ie a right of breeding and killing rabbits within the limits of the warren (236). One of the arguments raised in support of the former construction was to the effect that the grant was pursuant to a statute which empowered, inter alia, the sale of 'messuages, lands, tenements' and that those words, in effect, conveyed the notion of corporeal interests. Lord Chelmsford said (241 ‑ 242):
It was argued that the word 'tenements' has here a restricted meaning, and that it must be construed in its popular sense of a building. But if that is so, it is rendered entirely superfluous, because the word 'messuages' is mentioned just before it in the section. It appears to have been the intention of the Act to enable the Duchy to dispose of every possession which was a source of revenue, and the clause itself (as well as others), speaks of 'manors, messuages, lands, tenements and other revenues'. I have no doubt that the word 'tenements' in the Act must be taken in its fullest sense, and as Blackstone says, 'though in its vulgar acceptation it is only applied to houses and other buildings, yet in its original, proper, and legal sense, it signifies everything that may be holden, provided it be of a permanent nature, whether it be of a substantial and sensible, or of an unsubstantial ideal kind'. That a rabbit warren which passes no interest in the soil, but merely gives a right of entering within the limits of the warren to kill rabbits, is a tenement, was decided in the case of Rex v The Inhabitants of Piddletrenthide … (emphasis added) (citations omitted)
As a general rule, tenements included hereditaments which savoured of reality: see Challis's Law of Real Property (3rd ed, 1911) 42 ‑ 43, 45 ‑ 46. Tenements were intailable under the statute De Donis Conditionalibus 1285.
The term 'hereditaments', generally speaking, has a wider meaning than 'tenements'. It has been used to signify all property that historically devolved to heirs by hereditary succession (essentially via primogeniture) upon intestacy: Re Lehrer (370); Lloyd v Jones (1848) 6 CB 81; 136 ER 1182, 1185; Megarry R and Wade W, The Law of Real Property (8th ed, 2012) [1‑013]; Helmore B, The Law of Real Property in New South Wales (2nd ed, 1966) 494 ‑ 495. However, not all tenements were hereditaments, eg a legal estate for life or pur autre vie. Also, personal hereditaments were not tenements and not intailable. For example, personal hereditaments included a personal annuity not issuing out of or secured on land: Challis's Law of Real Property 44, 46 ‑ 47.
Under the general law, where mines and minerals became legally separated from the surface of the land - in whatever way the severance may have been effected - they became distinct property: Bainbridge on Mines and Minerals (5th ed, 1900) 39 ‑ 40; Wilkinson v Proud (1843) 11 M & W 33; Berkheiser v Berkheiser [1957] SCR 387, 395. A fee simple or a fee tail in a substratum of minerals, which was sometimes referred to as an 'unopened' mine, was a corporeal hereditament and a 'tenement': Dunn v Birmingham Canal Co (1872) LR 8 QB 42, 48; Errington v Metropolitan District Railway Co (1882) 19 Ch D 559, 568 ‑ 569; Wilkinson v Proud; MacSwinney on Mines (3rd ed, 1907) 42. The grant by the freeholder of land of a right to dig and carry away minerals from his or her land was regarded as an incorporeal hereditament in the nature of a profit à prendre and was a tenement: London and North-Western Railway Co v Ackroyd (1862) 31 LJ Ch 588, 591; Wilkinson v Proud; Land Law [16 135]; Ex parte Henry; Re Commissioner of Stamp Duties [1963] SR (NSW) 298, 305; The Law of Real Property [27‑055]. See also Bainbridge on Mines and Minerals 39 ‑ 40, 164; Challis's Law of Real Property 54, 58.
In light of the foregoing, it would seem to me likely that the word 'tenement' in the phrase 'tenement, right or interest' in the chapeau in par (c) of the definition of 'mining tenement' in s 76(1) of the Act, conveys the notion of any property capable of being held in freehold which is connected with land, including a tenure of a strata or seam of minerals, as well as any incorporeal hereditament involving the right to dig and carry away minerals.
For the purposes of the disposition of this appeal, it is unnecessary to determine whether the word 'right' in the phrase 'tenement, right or interest' in the chapeau of (c) of the definition of 'mining tenement' is used in its wide sense as including any advantage or benefit which is in any manner conferred upon a person by a rule of law, or in its narrower, stricter meaning as the correlative of a legal duty - as to which see Eaton & Sons Pty Ltd v The Council of the Shire of Warringah [1972] HCA 33; (1972) 129 CLR 270, 293 and Salmond on Jurisprudence (12th ed, 1966) 217 ‑ 233. Even in its stricter sense, it would include any claim inhering in one person as against another, which is recognised and protected by a rule of law. The word 'right', particularly in the context of a phrase which includes 'tenement' and 'interest', suggests a generality of meaning, which is not confined to rights of a proprietary character, but would include contractual choses in action - the latter sometimes being described as 'quasi proprietary in nature': see Zhu v Treasurer of New South Wales [2004] HCA 56; (2004) 218 CLR 530 [135] ‑ [144]. The word 'interest', on the other hand, would ordinarily be apt to signify a right of a proprietary character. It is unnecessary to determine in this appeal whether 'interest' also carries with it some other or further meaning.
It may be inferred that the legislature recognised (as in this jurisdiction) that generally speaking, minerals in foreign jurisdictions would likely be legally separated from the soil and belong to the State and not to individual landholders, and that any rights of mineral exploration or development would be held of or from the State in some manner conferred or granted by the State. The use of the word 'right' in the phrase 'tenement, right or interest' gives a substantial breadth to the scope and reach of the subject matter of the chapeau in par (c). It appears to be designed to accommodate, subject to the limitations in subpar (i), a variety of rights of mineral exploration or development held under the law of another Australian jurisdiction or under the law of a foreign jurisdiction.
In my opinion, the respondent's contention that the word 'right' should, in effect, be read down as confined to rights which under the general law are conventionally regarded as being fully proprietary in character, should not be accepted. Nor is there any reason to suppose that the word 'right' in this context is confined to statutory property as opposed to a chose in action created by contract.
Furthermore, the words of the chapeau in par (c) are not to be read in isolation from what follows. The subject matter of the chapeau must be of a character which allows a judgment to be made as to whether it is 'similar' to a 'mining tenement' as defined in par (a), or a 'mining tenement or right of occupancy continued in force by s 5 of the Mining Act 1978'. The fact that the subject matter in the chapeau in par (c) is designed to enable a comparison to be made as to whether it is 'similar' to a 'mining tenement' or a 'right of occupancy' as defined, suggests that the legislature intended that a breadth and flexibility be given to the words 'tenement, right or interest' in the chapeau in par (c). It is not insignificant that 'mining tenement' as defined in par (a) of the definition has been characterised as in the nature of personal property, and not real property: TEC Desert Pty Ltd v Commissioner of State Revenue [2010] HCA 49; (2010) 241 CLR 576; Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 [72] ‑ [73] (with respect to exploration licences). Also, the term, as defined in par (b) of the definition, includes a right of occupation of a temporary reserve under a State Agreement which operates by force of contract. Further, the holder of a temporary reserve may not even have a right to work and get minerals from the reserve: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [61] and [73].
The decision of the Queensland Court of Appeal in Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] QCA 73; [2007] 2 Qd R 373, to which the parties referred and on which the Tribunal below relied, does not, in my respectful view, provide any assistance on the proper construction of the definition of 'tenement, right or interest' in this case. Sorrento was a case which concerned the proper construction of a statute concerning the resumption or acquisition of land. The statute used the word 'interest' and the majority held that the word 'interest' should be given its meaning under the Interpretation Act 1954 (QLD), which defined 'interest' in relation to land or other property as including 'a right, power or privilege over, or in relation to, the land or other property'. Not only was the statutory language in that case different from the statutory language here, but, moreover, the purpose and object of the statute in that case was quite different to the purpose and object of the statute, and in particular to the purpose and object of pt IIIBA of the Act, under consideration in this case - as to which see Commissioner of State Taxation v Nishu Pty Ltd (1991) 4 WAR 437, 439 ‑ 440, (Malcolm CJ); 448 ‑ 449 (Wallace J) and 457 (Pidgeon J); Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 43 WAR 186 [206].

Subject to the foregoing, I also respectfully agree with the reasoning and conclusions of Buss JA insofar as his Honour found, in relation to the second question with respect to issue 1, that the word 'right' was engaged in the present case in the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of the Act. PTAR had vested rights under the Martabe Contract of Work, which fell within the rubric of 'right' in the phrase 'tenement, right or interest' in the chapeau of par (c) of the definition of 'mining tenement' in s 76(1) of the Act. It is unnecessary to determine whether PTAR's rights under the Martabe Contract of Work constituted a 'tenement' or 'interest' within the meaning of that phrase.