TEC Desert Pty Ltd & Anor v Commissioner of State Revenue

TEC Desert Pty Ltd and another party (the taxpayers) sought to appeal a decision of the Supreme Court of Western Australia concerning the assessment of stamp duty. The Commissioner of State Revenue had assessed stamp duty on a transaction involving the transfer of shares in a company, which the taxpayers argued was not liable for duty. The core of the dispute revolved around the interpretation of the *Stamp Act 1921* (WA) and whether the transaction constituted a dutiable "conveyance" or "transfer" of dutiable property.

The primary legal issue before the Full Court of the High Court of Australia was whether the transaction, which involved the transfer of shares in a company that held land, was a dutiable transaction under the *Stamp Act 1921* (WA). Specifically, the court had to determine if the transfer of shares constituted a "conveyance" or "transfer" of dutiable property within the meaning of the Act, or if it was merely a transfer of a chose in action that fell outside the scope of the stamp duty provisions relating to land.

The High Court, in allowing the appeal, reasoned that the *Stamp Act 1921* (WA) imposed duty on the transfer of dutiable property, which included land. However, the court held that the transfer of shares in a company, even if that company owned land, did not constitute a transfer of the land itself. The court distinguished between the ownership of shares and the ownership of the company's assets, emphasizing that a shareholder has a proprietary interest in the company, not in the underlying assets. Therefore, the transfer of shares was a transfer of a chose in action, not a conveyance or transfer of land, and thus not subject to stamp duty as a conveyance of dutiable property.

The High Court ordered that the appeal be allowed, setting aside the decision of the Supreme Court of Western Australia and remitting the matter to the Supreme Court for further orders consistent with the High Court's judgment.