Keighley v Commissioner of Stamp Duties (NSW)

The High Court of Australia considered an appeal by Keighley against a decision of the Commissioner of Stamp Duties (NSW). The dispute concerned the assessment of stamp duty on a deed of settlement and release. The Commissioner had assessed duty on the basis that the deed constituted a settlement of property, attracting ad valorem duty. Keighley contended that the deed was not a settlement for the purposes of the Stamp Duties Act 1920 (NSW) and therefore should not attract such duty.

The central legal issue before the High Court was whether the deed of settlement and release, which involved the transfer of certain shares and the release of a debt, constituted a "settlement" within the meaning of section 65 of the Stamp Duties Act 1920 (NSW). This required the Court to determine if the deed involved the disposition of property for the benefit of another person, thereby falling within the scope of the Act's provisions on settlements.

The High Court, in a joint judgment, held that the deed did not constitute a settlement for the purposes of the Act. Their Honours reasoned that while the deed involved a disposition of property, it was not made for the benefit of another person in the manner contemplated by the definition of a settlement. The Court emphasised that the release of the debt was a discharge of an existing obligation, not a gratuitous benefit conferred upon a third party. Consequently, the deed was not subject to ad valorem duty as a settlement. The appeal was allowed, and the assessment of stamp duty was set aside.