In the Matter Of the Stamp Duties Act 1923 And in the Matter Of An Assessment Of the Commissioner Of Stamps: Esanda Finance Corporation Limited And Esanda (Wholesale) Pty Ltd v Commissioner Of Stamps

In the Supreme Court of South Australia, Esanda Finance Corporation Limited and Esanda (Wholesale) Pty Ltd challenged a stamp duty assessment made by the Commissioner of Stamps. The Commissioner had assessed the companies under the Stamp Duties Act 1923, asserting that their business arrangement constituted a rental business and that the fees paid were subject to stamp duty as rent. The companies argued that the fees were guarantee fees rather than rent and, as such, not liable for stamp duty. The key legal issues were whether the business conducted under the Bailment Plan agreements qualified as a "rental business" under the Act and if the fees paid were "rent" within the meaning of the Act. The court examined the nature of the agreements and the role of each party, concluding that the agreements were a form of floor plan where vehicles were placed with dealers for display and potential sale. While the dealers had rights to use the vehicles for display, the court found that the primary objective of the arrangement was the sale of the vehicles, not their rental. Therefore, the business did not constitute a rental business. Furthermore, the fees paid were characterised as guarantee fees, calculated based on the potential liability of the guarantor company, rather than as rent for the use of goods. The court held that the fees were not "rent" within the meaning of the Act and dismissed the Commissioner's assessment. The appeal was allowed, and the assessments were quashed with an order that the payments did not attract duty under the Act.