Trust Company Limited v Chief Commissioner of State Revenue

The appeal concerned the application of section 24 of the Duties Act 1997 (NSW) to a series of property transactions involving The Trust Company Limited (TCL) and the Uniting Church Bodies. The dispute arose from TCL's purchase of four parcels of land, where concurrent 99-year leases were entered into prior to the sale agreements. These leases, which were subject to existing shorter-term leases, created a new, less valuable reversionary interest in the land. TCL argued that this arrangement did not fall within the scope of section 24, as it involved the substitution of one reversionary interest for another, rather than a reduction in the dutiable value of existing property. The Chief Commissioner of State Revenue contended that the arrangement was designed to reduce the dutiable value of the property and should therefore be disregarded under section 24. The matter was heard in the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the property arrangements, specifically the entry into concurrent 99-year leases prior to the sale of the land, constituted an arrangement that reduced the dutiable value of dutiable property within the meaning of section 24 of the Duties Act 1997 (NSW). This required the court to determine what constituted the "dutiable property" and whether the concurrent leases affected its dutiable value in a manner contemplated by the section. The court also considered the interpretation of section 24, including its legislative purpose and the effect of amendments made to the section.

The majority of the Court of Appeal, comprising Mason P and Santow JA, allowed TCL's appeal, finding that section 24 did not apply. Their reasoning focused on the nature of the dutiable property. They concluded that the dutiable property subject to the transaction was the Uniting Church Bodies' interest in the land as qualified by the 99-year leases. The entry into these leases did not, in their view, affect the dutiable value of that specific dutiable property within the meaning of section 24. Consequently, the 99-year leases could not be disregarded for the purpose of determining the dutiable value. Giles JA dissented. The court set aside the orders of the primary judge and allowed TCL's objection against the Chief Commissioner's assessment, ordering the refund of duty paid by TCL.