Westpac Custodian Nominees Limited and Commissioner Of State Revenue

Case •

[2006] WASAT 203

•

24 JULY 2006

WESTPAC CUSTODIAN NOMINEES LIMITED and COMMISSIONER OF STATE REVENUE [2006] WASAT 203


Link to Appeal :
    [2008] WASCA 18


STATE ADMINISTRATIVE TRIBUNALCitation No:[2006] WASAT 203
TAXATION ADMINISTRATION ACT 2003 (WA)
Case No:CC:2152/200527 APRIL 2006
Coram:JUSTICE M L BARKER (PRESIDENT)24/07/06
39Judgment Part:1 of 1
Result: Decision of the Commissioner of State Revenue that the share transfers are
dutiable under Stamp Act 1921(WA)
s 16 and Second Schedule Item 4A(1) affirmed
Decision of the Commissioner of State Revenue that share transfers are dutiable
under Stamp Act 1921 (WA)
s 74(1) set aside
Review application dismissed
A
PDF Version
Parties:WESTPAC CUSTODIAN NOMINEES LIMITED
COMMISSIONER OF STATE REVENUE

Catchwords:
State revenue
Stamp Act 1921 (WA) s 16(1), s 100, Second Schedule Item 4A(1)
"Unlisted WA security"
Whether share stapled to another security to constitute a "stapled security" for purposes of quotation on the ASX is a "security ... that is not quoted on a recognised financial market"
Whether share transfers dutiable under Stamp Act 1921, s 74(1)

Legislation:
Corporations Act 2001 (Cth)
Stamp Act 1921 (WA), s 4(1), s 16, s 16(1), s 74, s 74(1), s 100, Second Schedule - Item 4A(1)
Taxation Administration Act 2003 (WA), s 25(2)(a)

Case References:
ANZ Executors and Trustees Ltd v Humes Limited [1990] VR 615
Crafter v Singh [1990] 8 ACLC 601
Inland Revenue Commissioners v G Angus & Co (1889) 23 QBD 579
Pinesales Pty Ltd and Commissioner of State Revenue [2006] WASAT 202
Re Australand Holdings Pty Ltd (2005) 54 ACSR 687
Suncoast Milk Pty Ltd v CSD (Qld) [1996] QCA 343
Bambro (No 2) Pty Ltd v Commissioner of Stamp Duties [1964] NSWR 183
Charles v Federal Commissioner of Taxation (1954) 90 CLR 598
Commonwealth Homes and Investment Co Ltd v Smith (1937) 59 CLR 443
In re Imperial Land Company of Marseilles; Harris' Case (1872) LR 7 Ch App 587
Infratil Australia Limited (No 2) (2000) 18 ACLC 696
Re National Savings Bank Association (Hebb's Case) (1867) LR 4 Eq 9
Wenzel and Anor v Australian Stock Exchange Ltd (2002) 44 ACSR 1

Orders
1. The decision of the Commissioner of State Revenue that the various transfers of Multiplex shares on 2 December 2003 are subject to duty under the Stamp Act 1921 (WA), s 16 and Second Schedule Item 4A(1) is affirmed.,2. The decision of the Commissioner of State Revenue that the share transfers are dutiable under the Stamp Act 1921 (WA), s 74(1) is set aside.,3. The review application is dismissed.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : TAXATION ADMINISTRATION ACT 2003 (WA) CITATION : WESTPAC CUSTODIAN NOMINEES LIMITED and COMMISSIONER OF STATE REVENUE [2006] WASAT 203 MEMBER : JUSTICE M L BARKER (PRESIDENT) HEARD : 27 APRIL 2006 DELIVERED : 24 JULY 2006 FILE NO/S : CC 2152 of 2005
    CC 2153 of 2005
BETWEEN : WESTPAC CUSTODIAN NOMINEES LIMITED
    Applicant

    AND

    COMMISSIONER OF STATE REVENUE
    Respondent

Catchwords:

State revenue - Stamp Act 1921 (WA) s 16(1), s 100, Second Schedule Item 4A(1) - "Unlisted WA security" - Whether share stapled to another security to constitute a "stapled security" for purposes of quotation on the ASX is a "security ... that is not quoted on a recognised financial market" - Whether share transfers dutiable under Stamp Act 1921, s 74(1)

Legislation:

Corporations Act 2001 (Cth)



(Page 2)

Stamp Act 1921 (WA), s 4(1), s 16, s 16(1), s 74, s 74(1), s 100, Second Schedule - Item 4A(1)
Taxation Administration Act 2003 (WA), s 25(2)(a)

Result:

Decision of the Commissioner of State Revenue that the share transfers are dutiable under Stamp Act 1921(WA), s 16 and Second Schedule Item 4A(1) affirmed


Decision of the Commissioner of State Revenue that share transfers are dutiable under Stamp Act 1921 (WA), s 74(1) set aside
Review application dismissed

Category: A


Representation:

Counsel:


    Applicant : Mr GR Donaldson SC
    Respondent : Mr NC Monahan

Solicitors:

    Applicant : Freehills
    Respondent : State Solicitor



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

ANZ Executors and Trustees Ltd v Humes Limited [1990] VR 615
Crafter v Singh [1990] 8 ACLC 601
Inland Revenue Commissioners v G Angus & Co (1889) 23 QBD 579
Pinesales Pty Ltd and Commissioner of State Revenue [2006] WASAT 202
Re Australand Holdings Ltd (2005) 54 ACSR 687
Suncoast Milk Pty Ltd v CSD (Qld) [1996] QCA 343

Case(s) also cited:



Bambro (No 2) Pty Ltd v Commissioner of Stamp Duties [1964] NSWR 183

(Page 3)

Charles v Federal Commissioner of Taxation (1954) 90 CLR 598
Commonwealth Homes and Investment Co Ltd v Smith (1937) 59 CLR 443
In re Imperial Land Company of Marseilles; Harris' Case (1872) LR 7 Ch App 587
Infratil Australia Limited (No 2) (2000) 18 ACLC 696
Re National Savings Bank Association (Hebb's Case) (1867) LR 4 Eq 9
Wenzel and Anor v Australian Stock Exchange Ltd (2002) 44 ACSR 1

(Page 4)
REASONS FOR DECISION OF THE TRIBUNAL:



Summary of the Tribunal's decision

1 On 2 December 2003, the late Mr John Charles Roberts AO transferred to various investors shares he held in Multiplex Limited which were stapled to units in the Multiplex Property Trust and, as a "stapled Security" were subject to quotation on the Australian Stock Exchange (ASX).

2 The Commissioner of State Revenue decided that the share transfers in favour of numerous transferees, including the applicants, in relation to the Multiplex shares were in respect of an "unlisted WA Security" as that term is defined by s 100 of the Stamp Act 1921 (WA) and fell for duty pursuant to the Second Schedule Item 4A(1) of the Stamp Act.

3 He also decided that the share transfers were dutiable under s 74(1) of the Stamp Act 1921 on the basis that the documentation that preceded the execution of the share transfers in favour of the various investors, disclosed a binding agreement concluded between Mr Roberts and each of the investors for the sale of the Multiplex shares, that was concluded before the stapled securities were quoted on the ASX on 2 December 2003.

4 The Tribunal decided that, while it was clear the Multiplex shares constituted part of the stapled securities that were quoted on the ASX, it could not be said that the Multiplex shares were themselves quoted. Accordingly, the share transfers were in respect of an "unlisted WA Security" as that term is defined in the Stamp Act 1921.

5 However, the Tribunal set aside the Commissioner's ruling that share transfers were dutiable under s 74(1) of the Stamp Act 1921 as there was no evidence to show that a binding agreement of the type contended for involving Mr Roberts and each of the investors had ever been concluded.

6 In these circumstances, the Tribunal affirmed the decision of the Commissioner of State Revenue that the share transfers were subject to duty under the Stamp Act 1921 s 16 and Second Schedule Item 4A(1).




Issue

7 These proceedings raise two issues:


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    • Whether certain transfers of shares in Multiplex Limited on 2 December 2003 were relevantly in respect of an "unlisted WA Security" within the meaning of the definition of that expression in s 100 of the Stamp Act 1921 (WA) (the Stamp Act) as it then applied.

    • Whether the share transfers were dutiable under s 74(1) of the Stamp Act.



Facts

8 The following facts are agreed between the parties.

9 Multiplex: Multiplex Constructions Pty Ltd (Multiplex Constructions) was incorporated in 1962.

10 Multiplex carries on, and at all material times carried on, a business of construction, property development and facilities and investment management both in Australia and overseas.

11 Multiplex at all material times was an Australian public company registered under the Corporations Act 2001 (Cth).

12 Between 31 August 2003 and 4 December 2003, Mr John Charles Roberts AO (Mr Roberts) (now deceased) was registered as the owner of all the issued share capital in Multiplex.

13 The proposal: Mr Roberts' advisors developed a proposal involving the issue of units in Multiplex Property Trust, a trust established by deed dated 19 September 2003, and the sale of ordinary shares in Multiplex, which entities together would be known as the Multiplex Group and would be listed on the Australian Stock Exchanged (ASX).

14 The proposal involved a "stapled security" structure. The structure involved:

  1. 1. the establishment of a property trust (Multiplex Property Trust), the responsible entity of which would hold and manage investments in property and would issue units in Multiplex Property Trust;
  2. 2. the stapling of one ordinary share in Multiplex to each unit in Multiplex Property Trust: and
  3. 3. the sale of the stapled securities to the public by way of the sale of ordinary shares in Multiplex and the issue of units in Multiplex Property Trust.

(Page 6)



15 The responsible entity of Multiplex Property Trust is, and at all material times was, Multiplex Funds Management Limited (Multiplex Funds Management).

16 The stapling was given effect to by:

  1. 1) clauses in the constitution of Multiplex;
  2. 2) clauses in the constitution of Multiplex Property Trust;
  3. 3) a Stapling Deed dated 20 October 2003 made between Multiplex and Multiplex Funds Management.
  4. 4) a document known as a product disclosure statement and prospectus dated 23 October 2003 (PDS) was issued by Multiplex Funds Management and Mr Roberts.
  5. 5) the Securities – meaning the ordinary shares in Multiplex and the units in Multiplex Property Trust – comprised approximately 292.5 million units in Multiplex Property Trust and approximately 292.5 million ordinary shares in Multiplex.

17 Under the PDS, Mr Roberts was the vendor of the ordinary shares in Multiplex and Multiplex Funds Management was the issuer of the units for subscription.

18 Investors were required to apply for an equal number of ordinary shares in Multiplex and units in Multiplex Property Trust under the PDS.

19 The issue price of the units in Multiplex Property Trust was $2.20 with $1.23 payable on application and the final instalment of 97 cents payable on 15 December 2004.

20 The sale price of the shares in Multiplex was $1.85 payable in full on application.

21 The initial instalment required was $3.08 per Security with the final instalment of 97 cents per Security payable on 15 December 2004, combining to make an issue price of $4.05 per Security.

22 An application for Securities could only be made by completing and lodging a PDS Application Form or an Employee Application Form.

23 Multiplex Constructions – as the applicant was still then known – engaged UBS Advisory and Capital Markets Australia Ltd (UBS) as lead


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    manager, exclusive financial advisor and underwriter by an engagement or mandate letter dated 17 September 2003.

24 The terms and conditions of UBS' appointment as underwriter were set out in the Underwriting Agreement dated 23 October 2003 between Multiplex Funds Management, Multiplex Constructions, Mr Roberts and UBS.

25 Approximately 14 000 successful applicants received Securities.

26 The successful applicants have been treated as applicants to the current review proceedings in the Tribunal.

27 For the purposes of this application for review the applicants have been categorised as follows:

  1. 1) Cornerstone Investors;
  2. 2) Institutional Investors;
  3. 3) Retail Investors (through brokers);
  4. 4) Chairman's List Investors; and
  5. 5) Employee Investors.

28 Cornerstone Investors: Certain primary investors (called the Cornerstone Investors) were:
  1. 1) Wyllie Group Pty Ltd;
  2. 2) SPB Developments Pty Ltd;
  3. 3) Oahu Management Limited;
  4. 4) Hyde Park Management Limited;
  5. 5) Legian Holdings Pty Ltd; and
  6. 6) Robert John Rayner as trustee for the Rayner Investment Trust.

29 For the purposes of these proceedings it is agreed between the parties that SPB Developments Pty Ltd (SPB) and Hyde Park Management Limited (Hyde Park) are representative of the Cornerstone Investors and the facts, documents and materials relating to SPB and Hyde Park are not materially different from the facts, documents and materials relating to other Cornerstone Investors.

30 By letter dated 15 October 2003, UBS wrote to SPB.

(Page 8)



31 On 16 October 2003, SPB signed a form attached to the letter from UBS dated 15 October 2003 and returned it to UBS on or before 17 October 2003.

32 By letter dated 22 October 2003, UBS wrote to SPB.

33 By letter dated 17 November 2003, UBS wrote to SPB enclosing a PDS.

34 SPB completed a PDS Application Form for an amount of 17 283 951 Securities, which it returned to UBS on or before 21 November 2003, but did not enclose any amount with the PDS Application Form.

35 On 15 October 2003, SPB, Hyde Park and Multiplex Developments (Qld) Pty Ltd executed a Put and Call Offers Deed in respect of the ANZ Centre at 324 Queens Street, Brisbane.

36 On 8 December 2003, SPB and Multiplex 324 Queen Street Landowner Pty Ltd executed a contract of sale in respect of a 35% interest in the land, building, leases and assets situated on the land known as ANZ Centre, 324 Queens Street, Brisbane.

37 On 8 December 2003, SPB was registered as the owner of 17 283 951 ordinary shares in Multiplex and 17 283 951 units in Multiplex Property Trust pursuant to the resolution of the meetings of the relevant entities later referred to in these reasons.

38 By letter dated 15 October 2003, UBS wrote to Hyde Park.

39 On 16 October 2003, Hyde Park signed a form attached to the letter from UBS dated 15 October 2003 and returned it to UBS on or before 17 October 2003.

40 By letter dated 22 October 2003, UBS wrote to Hyde Park.

41 By letter dated 17 October 2003, UBS wrote to Hyde Park enclosing a PDS.

42 Hyde Park completed a PDS Application Form for an amount of 3 086 420 Securities, which had been returned to UBS on or before 21 November 2003, but did not enclose any amount with the PDS Application Form.

(Page 9)



43 On 15 October 2003, SPB, Hyde Park and Multiplex Developments (Qld) Pty Ltd executed a Put and Call Offers Deed in respect of the ANZ Centre at 324 Queen Street, Brisbane.

44 On 8 December 2003, Hyde Park and Multiplex 324 Queen Street Landowner Pty Ltd executed a contract of sale in respect of a 15% interest in the land, building, leases and assets situated on the land known as ANZ Centre 324 Queens Street, Brisbane.

45 On 8 December 2003, Hyde Park was registered as the owner of 3 086 420 ordinary shares in Multiplex and 3 086 420 units in Multiplex Property Trust pursuant to the resolutions of the meetings of the relevant entities referred to below in these reasons.

46 Each of the other Cornerstone Investors:

  1. 1) received letters from UBS in the same form and on the same date as the letters received by SPB and Hyde Park;
  2. 2) completed and lodged forms in the same form as the forms completed and lodged by SPB and Hyde Park with the exception that the number of Securities and application price varied;
  3. 3) returned the forms completed to UBS by no later than the date that SPB and Hyde Park returned those forms;
  4. 4) sold, on 8 December 2003 real property, shares or units the proceeds of which were applied by way of application for Securities under the PDS; and
  5. 5) was, on 8 December 2003 registered as the owner of ordinary shares in Multiplex and units in Multiplex Property Trust pursuant to the resolutions of the meetings of the entities referred to below in these reasons.

47 Institutional Investors: certain investors (called the Institutional Investors) entered into arrangements with UBS under which they applied for Securities.

48 For the purposes of these proceedings, it is agreed between the parties that IAG Investment Management Pty Limited (IAG) and Western Pacific Portfolio Planning (Western Pacific) are representative of the Institutional Investors and the facts, documents and materials relating to IAG and Western Pacific are not materially different from the facts, documents and materials relating to the other Institutional Investors.

(Page 10)



49 By letter dated 21 October 2003, UBS wrote to IAG.

50 On 22 October 2003 IAG signed a form attached to the 21 October 2003 letter from UBS and returned it to UBS by facsimile on 22 October 2003.

51 By letter dated 17 November 2003, UBS wrote to IAG.

52 On 19 November 2003, IAG completed a form attached to the 17 November 2003 letter from UBS and returned it to UBS on 19 November 2003.

53 IAG did not complete a PDS Application Form as UBS applied for Securities which included a particular number of Securities applied for by UBS on behalf of IAG.

54 On 4 December 2003, IAG was registered as the owner of 7 million ordinary shares in Multiplex and 7 million units in Multiplex Property Trust pursuant to the resolutions of the meetings of the entities referred to below in these reasons.

55 By letter dated 21 October 2003, UBS wrote to Western Pacific.

56 On 22 October 2003, Western Pacific signed a form attached to the 21 October 2003 letter from UBS and returned it to UBS by facsimile on 22 October 2003.

57 Western Pacific did not complete a PDS Application Form as UBS applied for Securities which included a particular number of Securities applied for by UBS on behalf of Western Pacific.

58 On 4 December 2003, Western Pacific was registered as the owner of 200 000 ordinary shares in Multiplex and 200 000 units in Multiplex Property Trust pursuant to the resolutions of the meetings of the entities referred to below in these reasons.

59 Each of the other Institutional Investors:

  1. 1) received letters from UBS in the same form and on the same date as the letters received by IAG and Western Pacific;
  2. 2) completed and lodged forms in the same form as the forms completed and lodged by IAG and Western Pacific with the exception that the number of Securities in the application price varied;

(Page 11)
  1. 3) returned the forms completed to UBS by no later than the date that IAG and Western Pacific returned those forms; and
  2. 4) was, on 4 December 2003, registered as the owner of ordinary shares in Multiplex and units in Multiplex Property Trust pursuant to the resolutions of the meetings of the entities referred to below in these reasons.

60 Retail Investors: certain investors (called the Retail Investors) applied for Securities through one of a number of brokers chosen by UBS, including:
  1. 1) Citigroup Global Markets Australia Pty Limited (Citigroup);
  2. 2) Euroz Securities Limited (Euroz); and
  3. 3) Patterson Ord Minnett Limited (Pattersons).

61 For the purposes of these proceedings, it is agreed between the parties that:
  1. 1) Ms Valentia Maniacco;
  2. 2) Perpetual Custodians Ltd;
  3. 3) UBS Private Clients Australia Nominees Pty Ltd;
  4. 4) Mr Donald James Wright and Mrs Cynthia Mary Wright;
  5. 5) Mr Peter Randal Thompson; and
  6. 6) Mr James Maitland;

62 are representative of the Retail Investors and that the facts, documents and materials relating to the representative Retail Investors are not materially different from the facts, documents and materials relating to the other Retail Investors.

63 By letter dated 1 October 2003, UBS wrote to Citigroup.

64 By email dated 20 October 2003 Citigroup wrote to UBS.

65 By letter dated 21 October 2003, UBS wrote to Citigroup.

66 On 22 October 2003, Citigroup signed a form attached to the 21 October 2003 letter from UBS and returned it to UBS by facsimile on 22 October 2003.

67 By letter dated 21 October 2003, UBS wrote to Euroz.

(Page 12)



68 By 22 October 2003, Euroz signed a form attached to the 21 October 2003 letter from UBS and returned it to UBS by facsimile on 22 October 2003.

69 By letter dated 21 October 2003, UBS wrote to Pattersons.

70 On 22 October 2003, Pattersons signed a form attached to the 21 October 2003 letter from UBS and returned it to UBS by facsimile on 22 October 2003.

71 On or before 25 November 2003, Ms Maniacco lodged, though Citigroup, a PDS Application Form for 5000 Securities enclosing an amount of $15 400.

72 On 4 December 2003, pursuant to the resolutions of the meetings of the entities noted below in these reasons, Ms Maniacco was registered as the owner of 5000 ordinary shares in Multiplex and 5000 units in Multiplex Property Trust.

73 On or before 25 November 2003, Perpetual Custodians Ltd lodged, through Citigroup, a PDS Application Form for the designated account of "David Thomas Henley PSF" for 5000 Securities enclosing the amount of $15400.

74 On 4 December 2003 pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Perpetual Custodians Ltd was the registered owner of 5000 ordinary shares in Multiplex and 5000 units in Multiplex Property Trust.

75 On or before 25 November 2003, UBS Private Clients Australia Nominees Pty Ltd lodged, thought Citigroup, a PDS Application Form for the designated account of Twining Pty Limited for 25 000 Securities enclosing an amount of $77 000.

76 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, UBS Private Clients Australia Nominees Pty Ltd was registered as the owner of 25 000 ordinary shares in Multiplex and 25 000 units in Multiplex Property Trust.

77 On or before 25 November 2003, Mr and Mrs Wright lodged, though Euroz, a PDS Application Form for 1000 Securities enclosing an amount of $3080.

(Page 13)



78 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr and Mrs Wright were registered as the owners of 1000 ordinary shares in Multiplex and 1000 units in Multiplex Property Trust.

79 On or before 19 November 2003, Mr Thompson lodged, through Pattersons, a PDS Application Form for 500 Securities enclosing the amount of $1540.

80 On 19 November 2003, Pattersons issued a buy contract note/tax invoice to Mr Thompson.

81 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Thompson was registered as the owner of 500 ordinary shares in Multiplex and 500 units in Multiplex Property Trust.

82 On or before 17 November 2003, Mr Maitland lodged, through Pattersons, a PDS Application Form for 2000 Securities enclosing an amount of $6160.

83 On 17 November 2003, Pattersons issued a buy contract note/tax invoice to Mr Maitland.

84 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Maitland was registered as the owner of 2000 ordinary shares in Multiplex and 2000 units in Multiplex Property Trust.

85 Chairman's List Investors: certain investors (called the Chairman's List Investors) applied for Securities as a result of their relationship with Mr Roberts or his family.

86 For the purposes of these proceedings it is agreed between the parties that:

  1. 1) Mr Peter Dransfield;
  2. 2) Mr Brian Coppin; and
  3. 3) Pivot Group Pty Ltd

87 are representative of the Chairman's List Investors.

88 By letter dated 18 November 2003, Poynton and Partners Pty Ltd wrote to Mr Dransfield.

(Page 14)



89 On or before 25 November 2003, Layrir Pty Ltd (a family company of Mr Dransfield) lodged a PDS Application Form with ASX Perpetual Registrars Limited (ASX Perpetual Registrars) for 24 692 Securities enclosing an amount of $76 051.36.

90 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Layrir Pty Ltd was registered as the owner of 24 692 ordinary shares in Multiplex and 24 692 units in Multiplex Property Trust.

91 On or before 25 November 2003, Mr Coppin lodged a PDS Application Form with ASX Perpetual Registrars for 35 000 Securities enclosing the amount of $107 800.

92 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Coppin was registered as the owner of 35 000 ordinary shares in Multiplex and 35 000 units in Multiplex Property Trust.

93 On 21 October 2003, Mr Peter Laurance, on behalf of Pivot Group Pty Ltd, sent an email to Mr John Poynton.

94 On or before 25 November 2003, Pivot Group Pty Ltd lodged a PDS Application Form with ASX Perpetual Registrars for 370 371 Securities enclosing an amount of $1 140 742.68.

95 On 4 December 2003, pursuant to the resolutions of the meetings of the entities that are referred to below in these reasons, Pivot Group Pty Ltd was registered as the owner of 370 371 ordinary shares of Multiplex and 370 371 units in Multiplex Property Trust.

96 Employee Investors: certain eligible employees of Multiplex (called the Employee Investors) applied for Securities:

  1. 1) as a private investment by lodging a PDS Application Form; and/or
  2. 2) through lodging an Employee Application Form under the Multiplex Group – that is to say Multiplex and Multiplex Property Trust – employee ownership plan.

97 On 17 October 2003, Mr Andrew Roberts circulated a memorandum to "All Employees".

98 On 28 October 2003, Mr Andrew Roberts circulated a memorandum to "All Staff".

(Page 15)



99 On 30 October 2003, Mr Andrew Roberts circulated a memorandum to "All Staff".

100 On 30 October 2003, Ms Anna Roberts sent an email to various WA employees of Multiplex.

101 On 31 October 2003, Mr Andrew Roberts circulated a memorandum to "All Staff".

102 On 31 October 2003, Mr Chris Roberts circulated a memorandum to "All Australian-Based Multiplex Staff".

103 On or before 31 October 2003, Eligible Employees, other than directors, were given an explanatory booklet explaining the operation of the Multiplex Group employee ownership plan.

104 On or before 31 October 2003, Eligible Employees who were directors were given an explanatory booklet explaining the operation of the Multiplex Group employee ownership plan.

105 On 14 November 2003, Mr Andrew Roberts circulated a memorandum to "All Staff".

106 On 1 December 2003, Mr Andrew Roberts circulated a memorandum to "All Staff".

107 For the purposes of these proceedings the parties agree that:

  1. 1) Mr Ross McDiven;
  2. 2) Mr Martin Steens;
  3. 3) Mr David Clark;
  4. 4) Mr Simon Oaten;
  5. 5) Mrs Jane Viskovich;
  6. 6) Mrs Lynnette Harlond; and
  7. 7) Mrs Lorraine Rigoll;

108 are representative of the Employee Investors and that the facts, documents and materials relating to the representative Employee Investors are not materially different from the facts, documents and materials relating to the other Employee Investors.

(Page 16)



109 On 19 November 2003, Mr McDiven completed an Employee Application Form for 567 902 Securities which he lodged with ASX Perpetual Registrars on or before 25 November 2003.

110 On 4 December 2003 pursuant to the resolutions of the meetings noted of the entities referred to below in these reasons, Mr McDiven was registered as the owner of 567 902 ordinary shares in Multiplex and 567 902 units in Multiplex Property Trust.

111 On or before 21 November 2003, Loen Holdings Pty Ltd (a company associated with Mr McDiven) lodged with ASX Perpetual Registrars a PDS Application Form for 419 753 Securities enclosing an amount of $1 292 839.

112 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Loen Holdings Pty Ltd was registered as the owner of 419 753 ordinary shares in Multiplex and 419 753 units in Multiplex Property Trust.

113 On 13 November 2003, Mr Andrew Roberts circulated a memorandum to Mr Steens.

114 On 19 November 2003, Mr Steens completed an Employee Application Form for 24 692 Securities which he lodged with ASX Perpetual Registrars on or before 25 November 2003.

115 On or about 21 November 2003, Mr Steens also lodged a PDS Application Form with ASX Perpetual Registrars for 24 691 Securities enclosing an amount of $76 048.28.

116 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Steens was registered as the owner of 49 383 ordinary shares in Multiplex and 49 383 units in Multiplex Property Trust.

117 On 17 November 2003, Mr Clark completed an Employee Application Form for 2864 Securities which he lodged with ASX Perpetual Registrars on or before 25 November 2003.

118 By letter dated 25 November 2003, ASX Perpetual Registrars wrote to Mr Clark.

119 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Clark was registered as


(Page 17)
    the owner of 2865 ordinary shares in Multiplex and 2865 units in Multiplex Property Trust.

120 On or before 21 November 2003, Mr Oaten lodged a PDS Application Form with ASX Perpetual Registrars for 2000 Securities enclosing an amount of $6160.

121 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mr Oaten was registered as the owner of 2000 ordinary shares in Multiplex and 2000 units in Multiplex Property Trust.

122 On 14 November 2003, Mrs Viskovich completed an Employee Application Form for 271 Securities which she lodged with ASX Perpetual Registrars on or before 25 November 2003.

123 On or before 21 November 2003, Mrs Viskovich also lodged a PDS Application Form with ASX Perpetual Registrars for 10 000 Securities (crossed through to show 9877 Securities) enclosing an amount of $30 421.16.

124 On 4 December 2003, pursuant to the resolutions of the meetings of the entities referred to below in these reasons, Mrs Viskovich was registered as the owner of 10 271 ordinary shares in Multiplex and 10 271units in Multiplex Property Trust.

125 On 15 November 2003, Mrs Harlond completed an Employee Application Form for 172 Securities which she lodged with ASX Perpetual Registrars on or before 25 November 2003.

126 On or before 21 November 2003 Mrs Harlond also lodged a PDS Application Form with ASX Perpetual Registrars for 5000 Securities (crossed through to show 2469 Securities) enclosing an amount of $7604.52.

127 On 4 December 2003, pursuant to the resolutions of meetings of the entities referred to below in these reasons, Mrs Harlond was registered as the owner of 5172 ordinary shares in Multiplex and 5172 units in Multiplex Property Trust.

128 On 12 November 2003, Mrs Rigoll completed an Employee Application Form for 493 Securities which she lodged with ASX Perpetual Registrars on or before 25 November 2003.

(Page 18)



129 On 4 December 2003 pursuant to the resolution of the meetings of the entities referred to below in these reasons Mrs Rigoll was registered as the owner of 493 ordinary shares in Multiplex and 493 units in Multiplex Property Trust.

130 Listing history: On 31 October 2003, UBS sent Citigroup an email attaching a draft Participant Bulletin from the ASX.

131 On 25 November 2003, the ASX released to the market a Company Announcement and Public Release by Multiplex Group dated 24 November 2003.

132 On 28 November 2003, the ASX released to the market a market release relating to the Multiplex Group.

133 On 1 December 2003, the ASX released to the market a release by Multiplex Group.

134 On 2 December 2003, Multiplex published a notice in the Australian Financial Review newspaper. Trading of the Securities are on a conditional and deferred settlement basis began on 2 December 2003 at 12 noon Eastern Summer Time.

135 On 4 December 2003, following the meetings of the entities referred to below in these reasons, Multiplex released a statement that conditions in respect of 438 765 431 Securities had been satisfied.

136 Execution of share transfers: Two master share transfers were executed to effect the transfer of ordinary shares in Multiplex from Mr Roberts to the applicant and other transferees.

137 The first master share transfer was executed on 2 December 2003 at 3:30 pm Eastern Summer Time for a total of 231 215 429 shares in Multiplex from Mr Roberts to the public investors whose names appeared in a schedule to the transfer for a total consideration of $427 748 543.65 being an amount of $1.85 per share.

138 The second master share transfer was executed on 2 December 2003 at 3:30 pm Eastern Summer Time for a further 61 234 569 shares in Multiplex from Mr Roberts to the Cornerstone Investors for a total consideration of $113 283 952.65 being an amount of $1.85 per share.

139 The master share transfer documents were signed on behalf of Mr Roberts by his daughter, Ms Denby MacGregor, pursuant to a valid Power of Attorney.

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140 Both master share transfer forms were witnessed by Ms Karen Pedersen, a director of Multiplex Constructions (NSW) Pty Ltd.

141 On 4 December 2003 at 11:13 am Eastern Summer Time the directors of Multiplex Funds Management resolved, at a meeting of the directors, that they were satisfied that there was no reason why the issue of the units in Multiplex Property Trust should not proceed and consequently resolved to and subsequently did issue units in Multiplex Property Trust to the applicants.

142 On 4 December 2003 at 12:10 pm Eastern Summer Time, the directors of Multiplex, in a meeting of the directors, resolved to register and subsequently did register the two master share transfers.

143 By letter dated 9 May 2005, Mr Roberts' solicitors, Freehills, wrote to the ASX.

144 On 16 May 2005, the ASX replied to Freehills by facsimile.

145 At all materials times, the listing requirements of the ASX which applied to the Securities were summarised in ASX Guidance Note 2 – Stapled Securities.

146 Assessment history: By assessment dated 5 December 2003, but issued on 4 December 2003, the Commissioner of State Revenue in Western Australia (the Commissioner) made an assessment assessing the two master share transfers to total stamp duty of $3 246 195.60.

147 Mr Roberts paid the amount of the assessment on 4 December 2003 under protest.

148 On 24 December 2003, the Commissioner provided a statement of grounds of assessment pursuant to s 25(2)(a) of the Taxation Administration Act 2003 (WA).

149 On 20 February 2004, pursuant to the terms of an authority set out in the PDS Application Form and the Employee Application Form, Mr Roberts lodged a notice of objection to the assessment on behalf of the applicants.

150 By letter to Freehills dated 11 August 2004, the Commissioner:

  1. 1) disallowed the share transfer objection; and
  2. 2) determined that there were earlier agreements (prior to the transfers) which were chargeable with stamp duty under
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  1. the Stamp Act (which for the present purposes may be called the s 74 determination).

151 On 8 September 2004, pursuant to the terms of an authority set out in the PDS Application Form and the Employee Application Form, Mr Roberts lodged an objection to the s 74 determination on behalf of the applicants.

152 By letter dated 1 March 2005, the respondent disallowed the s 74 objection.

153 On 21 March 2005, pursuant to the terms of an authority set out in the PDS Application Form and the Employee Application Form, Mr Roberts lodged, on behalf of the applicants, applications seeking review by the State Administrative Tribunal of the share transfer decision and the s 74 determination.

154 The parties agree that Mr Roberts is entitled to any refund of the stamp duty paid on the two master share transfers and to any interest on such refund, depending on the outcome of these proceedings.




Contentions of the parties on the first issue- "Unlisted WA Security"

155 At material times s 16(1) of the Stamp Act provided that, subject to subsection (2) the duties to be charged for the use of the Crown on or in respect of the instruments specified in the Second Schedule, subject to this Act, shall be the duties specified opposite to those instruments in that Schedule, which duties shall be in substitution of the duties chargeable under the enactment repealed by the Act.

156 Item 4A(1) of the Second Schedule specifies duties payable on instruments to do with the "Conveyance or transfer of an unlisted WA Security. The specified duty is $0.60 for every $100 and every fractional part of $100 of the amount or value of consideration.

157 The Commissioner decided to impose stamp duty on the transfers in question under Item 4A(1).

158 The Commissioner took the view, and maintains the view, in these review proceedings that the transfers in question were in respect of "an unlisted WA Security".

159 Section 100 of the Stamp Act at the relevant date defined an "unlisted WA Security" to mean:


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    "A Security that –

    (a) is situated in Western Australia; and

    (b) is not quoted on a recognised financial market."


160 Section 100 materially defined the term "Security" to mean "a marketable Security or right in respect of shares"; and s 4(1) relevantly defined the term "marketable Security" to mean:

    "(a) any stock or share of any corporation or local government or company or society; …

    (c) any right or interest, whether described as a unit or subunit or otherwise, of a beneficiary under a unit trust scheme –


      (i) any of the units of which is quoted on a recognised financial market; or

      (ii) that is not a private unit trust scheme within the meaning in section 63(2) or that is a unit trust scheme registered under s 63AA(2) or granted interim registration under section 63AC(2)."

161 Section 4(1) of the Stamp Act also defined the term "right in respect of shares" to mean:

    "a Security, however described, that is or represents a right, whether actual, prospective or contingent, to be allotted or issued with an unissued marketable Security, whether or not any money or other consideration is to be payable for the issue."

162 That the Multiplex shares are Securities as defined is not in issue.

163 The Commissioner contends that because a Multiplex share and a trust unit could only be traded as a stapled security, and a Multiplex share at material times could not be traded without a trust unit stapled to it, the Multiplex shares were not themselves quoted on a recognised financial market. Instead they were "unlisted WA Securities" within the meaning of s 100 of the Stamp Act. As to this view, the applicant joins issue with the Commissioner.

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164 There is no dispute between the parties that the ASX is a recognised financial market. The only question is whether the shares were "quoted" on it at the material time when they were stapled to the units.

165 In essence, the Commissioner contends that the effect of stapling each Multiplex share to a unit in the Multiplex Property Trust, in circumstances where the ASX only ever approved for quotation the stapled share and unit, is such that the share itself was never quoted. Put another way, the Commissioner's contention is that the effect of gaining the quotation of the stapled securities on the ASX is that neither the individual Securities forming part of the quoted stapled security is quoted.

166 The applicant says the reasoning of the Commissioner is fallacious for the following reasons:


    • First, as a matter of logic, if not common sense, the quotation of A and B does not mean that A and B are each not quoted. Likewise, the quotation of A and B does not mean that A and B are both not quoted. The quotation of A and B does not create C. Put another way, the applicant says the share and unit are "jointly quoted" but each is "quoted" nonetheless.

    • Second, the term "quoted" is not defined in the Stamp Act. Relevant to its definition or understanding, though, is the precise context of par (b) in the definition of "unlisted WA Security" in s 100, and the words that follow – "on a recognised financial market". The applicant says that in determining what "quotation" means, regard must be had to the meaning of that term in the market and the evidence shows that Multiplex shares, stapled to the units, can be bought on market. In this regard, Guidance Note 2 par 4 of the ASX Listing Rules and Business/Market Rules state that:


      "ASX may admit more than one entity to the official list on the basis that the entities' Securities will be stapled together and jointly quoted.": see [17] of Mr Moran's witness statement dated 7 April 2006, Exhibit 4 in the proceedings.
167 In Mr Moran's witness statement at [24] he also states:
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    "Trading cannot occur without quotation. This was stipulated in Business Rule 2.4.1 which was in effect on 2 December 2003, and is now reconstituted in ASX Market Rule 16.1 … therefore the Multiplex Group's stapled securities (and hence the shares and units composing the stapled securities) were quoted at the commencement of their trading at 12 pm AEDT on 2 December 2003."
    • Third, the applicant says that regard must also be had to the term "Security". The applicant says the Commissioner's argument amounts to a submission that the Multiplex shares and transfers were not "Securities", because the Securities were the stapled share and unit. This, it is said, flies in the face of the definition of "Security" and "marketable Security". This latter term is defined in s 4 as "any share of any corporation".

    • Fourth, the applicant says the term is to be understood in the context of Items 4A and 6(d) of the Second Schedule to the Stamp Act. Item 4A relates to marketable Securities that are not quoted; whereas Item 6(d) applies to marketable Securities that are quoted. The applicant contends that Items 4A and 6(d) were intended to capture all situations; this is to be inferred from the usual drafting technique of using X and not-X. Yet, says the applicant, on the Commissioner's argument, the Multiplex shares, after noon on 2 December 2003 were neither quoted nor not quoted even though they remained marketable Securities. This is outside the parameter of Item 4A and 6(d) when read together.

    • Fifth, the applicant says that in fact the Multiplex shares were not stapled to the units as of 3:30 pm on 2 December 2003. Stapling occurred on the "stapling commencement date" defined in cl 14.1 of the Stapling Deed. This was 4 December 2003 at 11:13 am: see Minutes of Meeting of directors at Multiplex Funds Management at Tab 77, page 867.


168 In response to those contentions, the Commissioner submits that in determining whether the Multiplex shares were quoted, the question must be asked whether they could be bought and sold at any relevant time.
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    Counsel for the Commissioner says that, in the context of the stock exchange, the "quotation" is the price stated by the exchange for that thing from time to time, the price being that at which sellers are willing to sell and buyers are willing to buy within the "market" created by the exchange.

169 Counsel for the Commissioner says this market context was recognised by Barrett J in Re AustralandHoldings Ltd (2005) 54 ACSR 687, where His Honour observed at [26] that:

    "Central to the 'quotation' concept is the feature of a market or facility that displays or provides information about prices at which sellers are willing to sell and prices at which buyers are willing to buy financial products which, within the confines of the market or facility, are capable of being sold and purchased."

170 Accordingly, counsel for the Commissioner contends that a Security will relevantly be "quoted" on a stock exchange during any period when there is a price stated by the exchange for that Security. Conversely, it will be relevantly "not quoted" during any period when there is no stated price available from the exchange for that Security. In this case, there was no price stated for the Multiplex share.

171 Again, counsel for the Commissioner suggests this approach was recognised by Barrett J in Re Australand when His Honour went on to note at [26] that:


    "Because units or interests in APT, standing alone and disconnected from shares in AHL, are not, in a market context, capable of being sold and purchased and no prices applicable to them as separate items are provided to persons resorting to the market, it seems to me that those units or interests, viewed alone, cannot be regarded as the subject of 'quotation', with the result that they should not be regarded, for s 253F purposes, as being 'quoted on a prescribed financial market'."

172 Counsel for the Commissioner contends that the applicant seeks to avoid the inevitably of the Commissioner's views by contending that:

    • the word "quoted" has the meaning "designated as quoted" by the ASX according to its listing procedures;

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    • the Multiplex shares were "quoted" because they were not "stapled" to the Multiplex units until 4 December 2003 at 11:13 am Eastern Summer Time; and

    • the Multiplex shares were "quoted" because there was a price stated for the "stapled security".


173 Counsel for the Commissioner says the underlying flaws in the first line of argument are:

    • that its underlying premise is that the Stamp Act leaves the scope of a definition upon which the imposition of duty turns to be defined from time to time by the listing procedures of the ASX, which is a highly unlikely intention to impute to Parliament particularly in the context of a taxing statute;

    • that it ignores the only logical factual distinction which can be made between a Security which is "quoted" and a Security which is "not quoted" (that is, whether a price is stated for that Security) and in turn established ordinary meaning;

    • the ASX listing procedures do not use the term "quoted" in the case of a "stapled security" in a manner consistent with a distinction between stating a price for a thing and not stating a price for that thing;

    • the ASX listing procedure, as a matter of form, designates the Multiplex shares and the units each as "quoted", but no "price" for a share as distinct from a unit, or for a unit as distinct from a share, is ever "stated" while the "stapling" remains; and

    • an application of the only relevant factual distinction to the present situation demonstrates that the ASX usages have no relevance to the Stamp Act (that is, the ASX would describe the Multiplex shares as "quoted" although no price for those shares is ever stated by the ASX while they are "stapled" to the unit).


174 In relation the second line of argument, counsel for the Commissioner submits the flaws in the applicant's argument are:
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    • the conditional trading between 1200 hours on 2 December 2003 and 1113 hours on 4 December 2003 was relevantly indistinguishable from the trading which took place after the latter time and date;

    • at all times, including the conditional trading periods, there was only one price "quoted" by the ASX, and that was for the "stapled security";

    • the relevant question is not ultimately whether they were formally "stapled" or not "stapled" on 2 December 2003, but whether the Multiplex shares were separately "quoted" at that time, which they were not due to the proposed "stapling" upon the completion of which the conditional trading depended.


175 In relation to the applicant's third line of argument counsel for the Commissioner submits the flaws in the applicant's argument are:

    • the thing which is called "stapling" by the ASX, and therefore the thing which is called a "stapled security" by the ASX, is not recognised by the Stamp Act, being in fact no more than an agreement between the ASX, Multiplex and the Trust as to the manner in which things which are recognised by the Stamp Act can be traded;

    • the so called "stapled security" is not in itself a Security in any relevant Stamp Act sense - it is always two Securities (a share and a unit in a trust) for which a single "combined" price is stated merely because of the "trading requirement" imposed by the "stapling" agreement between ASX, Multiplex and the Trust;

    • the Stamp Act imposes duty on the "Securities" it recognises, and has nothing to say (and need not be construed by reference to) anything it does not recognise;

    • the Stamp Act recognises a share in a company as a "Security" on which duty is payable according to whether it is "unlisted" or not (that is, "quoted" or not), and a trust unit as a "Security" – if a share and unit are subject to an agreement between the respective companies of which they are respectively "Securities" that they be traded "jointly", this does not create any "new" "Security" for

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    the purposes of the Stamp Act, although it may (as in this case) affect the question of whether a Security which has been "stapled" can be regarded as "quoted".
    • it ignores the only rationale for the Stamp Act's clear distinction between that which is "quoted" and that which is not "quoted"; that is the "objective" identification of a price for the separately dutiable share, in circumstances in which the joint trading required by the ASX as a condition of the "stapling" agreement results in a joint quote from which no separate share price can be extracted.

176 In the course of argument, counsel for the Commissioner emphasised that the use of the stapled Security was at the root of the issue. He said that was because the effect of stapling the Security to another is to impose a qualification on the way in which the entire "stapled security" can be dealt with and, therefore, importantly in this case, on the way in which the dutiable share can be dealt with. He says the effect of that qualification is to take it outside the way in which the Parliament intends duty to be calculated, and that is by reference to the value prescribed by the market from time to time. Counsel submitted that the problem with this case, from a rationale point of view, was that the effect of stapling is not to allow the price for a Multiplex share, from time to time, to be clearly isolated as that which is attributable solely to the Multiplex share, which is of course the dutiable instrument.

177 When asked when it becomes important to separate out the value of the share, counsel for the Commissioner suggested that if a Security is unlisted, there is in effect no objective measure of the value of the Security for the purposes of calculating duty. Accordingly, the Stamp Act applies a "flat rate", as it were. As soon as a Security is quoted, there exists a fluctuating and objective measure of the precise value the market puts on that Security and that can be tied to the duty payable. Counsel suggested that in some cases it might be that one pays more for an unlisted Security than for a listed Security, and vice versa, but the concern is really with defining an objective value. In the one case you can – on market; in the other case you cannot – where there is no recognised open exchange market for the sale of the Security.

178 Even though counsel for the Commissioner accepted one is unlikely to find a stapled security outside the recognised financial market, counsel suggested there might still be a need to separate out the share component


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    for state revenue purposes. Counsel contended that because of the way the Stamp Act works, what the Parliament in effect has done is equate an unquoted Security with all other Securities which have that essential character of not having a market price specifically attached to them. In this case, while the stapled Security has a value, it is not possible to say what the value of the share stapled to the unit actually is. Counsel submitted that is the reason why Parliament drew a distinction between a "quoted" Security and a Security which is "not quoted".

179 Counsel for the Commissioner thus argued that the effect of stapling removes the essential criteria of a "quoted" Security, that is, that it can be separately traded at a price from time to time.


Tribunal's consideration of first issue - "Unlisted WA Security"

180 The nature and purpose of a review proceeding in the Tribunal has been explained in Pinesales Pty Ltd and Commissioner of State Revenue [2006] WASAT 202 at [43]-[46].

181 The issue here principally involves the correct and preferable interpretation of the relevant provisions of the Stamp Act.

182 In Amatek Holdings Limited and Commissioner of State Revenue [2006] WASAT 197 at [59]-[68], the Tribunal discusses the usual approach to the interpretation of a taxing statute.

183 In this case, the Tribunal considers there is merit in the proposition put by counsel for the Commissioner, that while a stapled security – in this case, a Multiplex share stapled to a unit in the Multiplex Property Trust – has a value when quoted on the ASX, one cannot say what particular value the Multiplex share has on its own. The value to be attributed to the share is a theoretical concept in the particular financial market in which the stapled Security is quoted for trading, because, under the ASX rules, the share cannot be traded without the Multiplex Property Trust unit, and vice versa. The market in that stapled security could fluctuate depending on the market's reaction to the holdings of the Multiplex Property Trust or the activities of Multiplex. While it is possible under the ASX rules to unstaple a Security, and thereafter to seek quotation for each individual Security separately, a process of approval is required before that can be done. It is conjecture what the price of an unstapled share might be, if that were ever to be done.

184 As to the tradeability of a Multiplex share, the most that can be said is that the Multiplex share and the unit in the Multiplex Property Trust are


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    able to be traded on the ASX, but only as a "stapled security" under the ASX rules. They cannot be separately traded under the rules.

185 For this reason, in my view, it is not open to say that Multiplex shares at the material time were "quoted" on the ASX. While it is true that the stapled security constituting a share and a unit in the Multiplex Property Trust was quoted on the ASX, the simple fact is that a Multiplex share was not at the relevant date – indeed ever – "quoted" on the ASX. The only financial product that was ever quoted at a material time on the ASX was a "stapled security" comprising a Multiplex share and a unit in the Multiplex Property Trust. That such a Security, as recognised by ASX, was quoted according to the ASX rules, does not mean, as a matter of logic or fact, that Multiplex shares were quoted – for plainly they were not.

186 It is irrelevant to the proper interpretation of the Stamp Act provisions to attempt to find an answer to the question whether some new form of "Security", in the form of a stapled security, exists. The fact is that the only thing quoted on ASX at material times was the stapled security. While the Multiplex share formed a part of the quoted stapled security, the Multiplex share was not itself quoted.

187 That this is so is rather confirmed by the fact that the share could not be bought and sold individually on market. It could only have been bought and sold on market individually if the stapled security was unstapled and the ASX gave its approval to the quotation of the unstapled Multiplex shares.

188 I consider there is principled support for this interpretation outcome in the analysis provided by counsel for the Commissioner – or the "rationale", as he put it – as to why the Parliament has chosen to create duty at one rate for a WA Security, which is "quoted" on a recognised financial market, and an "unlisted WA Security", which is "not quoted" on a recognised financial market. When a particular Security is individually marketed, a market value can easily be ascribed to it and duty can be charged without further enquiry. However, where a Security can only be bought and sold off-market, the valuation exercise will almost inevitably require further inquiry. While a share and a unit (or any other coupling of individual Securities) may be permitted by a recognised stock exchange, and may be attractive in the market place to investors, it is by reason of the coupling that the financial product is attractive. It is however difficult - if not impossible - to say just what the value of each individual Security


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    constituting the stapled Security may be at any particular point in time, although together they contribute to the value of the stapled Security.

189 In short, for the purposes of s 100 of the Stamp Act, I consider the correct and preferable view is that a WA Security which is stapled to another Security, in circumstances in which the stapled Security is quoted on a recognised financial market under the rules of the market, is itself an "unlisted WA Security".

190 In these circumstances, I would affirm the Commissioner's decision to impose stamp duty on the various transfers of Multiplex shares pursuant to Item 4A(1) of the Second Schedule of the Stamp Act.




Tribunal's consideration of second issue

191 The second issue is whether the transfers were subject to stamp duty under s 74 of the Stamp Act. Section 74(1) at the material time provided that:


    "Every contract or agreement, howsoever executed, for the sale of any estate or interest in any property shall be charged with the same ad valorem duty to be paid by the purchaser as if it were an actual conveyance on sale of the estate, interest or property contracted or agreed to be sold."

192 The Commissioner contends that, having regard to the agreed facts referred to earlier and the documentation adverted to in that account of the facts, a binding agreement was concluded between Mr Roberts and each of the investors for the sale of Multiplex shares before the stapled securities were quoted on the ASX on 2 December 2003.

193 In putting this contention, counsel for the Commissioner says that before the stapled securities were quoted, all of the investors were in a position to confirm their allocation of shares and units and trade their stapled securities on a conditional and deferred basis.

194 I should say at the outset that, having regard to the evidence before the Tribunal, I have considerable difficulty in acceding to the contentions made on behalf of the Commissioner.

195 As senior counsel for the applicant point out, provisions such as s 74 of the Stamp Act impose a duty on instruments, not transactions. The words of s 74(1) are that every "contract or agreement", howsoever executed … shall be charged with the same ad valorem dutyto be paid by the purchaser as if it were an actual conveyance on sale of the estate,


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    interest or property contracted or agreed to be sold. Section 74 like other similar sections was, and is designed to overcome the effect of Angus's case (the Inland Revenue Commissioners v G Angus & Co (1889) 23 QBD 579): See Trust Co of Australia Limited v CSR [2003] HCA 23 at [42]: Suncoast Milk Pty Ltd v CSD (Qld) [1996] QCA 343.

196 The Commissioner seeks to characterise the "negotiations" with the six representative categories of investor as giving rise to "agreements" within the meaning of s 74 of the Stamp Act to sell the Multiplex shares. The Commissioner contends that in each case, the share transferor is represented by a person acting as agent for Mr Roberts for the purpose of concluding the relevant "agreement". Counsel for the Commissioner says it is not necessary for the Tribunal (just as it was not necessary for the Commissioner) to determine precisely how the "agency" was brought into existence, or its precise limits for all purposes. It is sufficient that the facts establish that there were agreements binding on the transferor prior to the transfers, which were relevantly performed by the execution of the transfers on 2 December 2003. Counsel for the Commissioner points to particular documents that are said to constitute or evidence the relevant "agreements".

197 However, counsel for the Commissioner also says it is not necessary to identify one or more documents as the "instrument" subject to duty under s 74. This is because s 16(1) of the Stamp Act provides for the duties payable to be those opposite the instruments specified in the Second Schedule of the Act. The effect of s 74 is to require the Commissioner to treat a relevant agreement "as if" it were an instrument of a kind which would be liable to duty if the agreement is performed. Therefore, counsel for the Commissioner argues, the relevant provision "deems" an identifiable agreement (howsoever executed - and necessarily however evidenced, including by exchanges of the letters etc) to be dutiable as if it is an instrument which it is not (that is, a conveyance on sale of the property). It is then irrelevant under the Act whether one, or any specific, "instrument" evidencing the terms of the identifiable "agreement" exists at the time duty is imposed.

198 Thus, counsel for the Commissioner further submits, it follows that the only relevant question, being one of fact, is whether the Tribunal is satisfied that all or any of the members of the representative groups had reached an agreement with the transferor prior to the execution of the share transfers that the shares in fact transferred would be so transferred.

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199 Counsel says that, further particularised, the question in that respect involves a conventional exercise in contractual construction in which the key questions will in each case be:
  1. (1) whether there was an offer by the transferor to transfer the shares upon the happening of certain future events (that is, the "listing" and "stapling" of the shares), where the future events were the conditions "subsequent" upon which the obligation of the transferor to perform the proposed agreement would depend;
  2. (2) whether there was an acceptance by the ultimate transferee investors of that offer and its communication to the transferor.

200 Counsel submits that those questions are to be determined in the conventional way as a matter of substance rather than form, while giving effect to the terms of the "agreement" as evidenced by relevant documentation.

201 As to the Cornerstone, Institutional, Retail and Chairman's List Investors, the Commissioner contends that the offer was specific as to the "quantity" of shares which would be transferred upon acceptance of the offer (and subject to the fulfilment of the conditions subsequent to performance).

202 Further, the language of "firm allocation", "firm commitment acceptance" as referred to in the correspondence exchanged with the investors, is largely irrelevant, because it is a matter of form, but to the extent it favours either analysis it supports the Commissioner's argument that nothing remained to be done by the proposed transferees for their rights to become enforceable; and all that would excuse non-performance by the transferor was the failure (without fault) of a condition subsequent.

203 Counsel submits that there is no difficulty in terms of conventional "contractual construction" and characterising the firm allocation of stapled securities and the acceptance of that allocation as giving an immediate entitlement liable to be defeated only by the "stapled securities" not coming into existence in that form. There was no theoretical difficulty in agreeing to transfer property not yet in existence in the transferable form.

204 Counsel further argues that with respect to the "agency" one has a situation in which UBS offers the "firm allocation" of shares which are never owned by it at any time. There is no basis upon which it could do so, except that it was authorised by the transferor and both the ultimate


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    transfer and the absence of contrary evidence adduced by the applicant is a sufficient basis for the Tribunal to conclude that there was the authorisation. The same reasoning is appropriate, it is said, in relation to the Retail and Chairman's List Investors; that it was Citigroup and Hartley Poynton which performed the relevant UBS role does not change the reasoning.

205 Counsel for the Commissioner further dismisses as having an air of unreality an alternative characterisation that on 2 December 2003 the transferor had no legal obligation to transfer the shares even though the "listing" to facilitate "stapling" had by then occurred. It is said the submission seems to be that all the transferor then had was a series of offers from the investors, which were accepted, and which acceptance was communicated, by the execution of the share transfers. Counsel for the Commissioner says that neither from the point of view of the investors or UBS in its distinct capacity as underwriter, or presumably the transferor, could the entire arrangement involving five million shares have been progressed with the "legal uncertainty" inherent in the analysis relied upon by the applicant.

206 Counsel for the Commissioner finally argues that it is not open to the applicant to seek to avoid the consequence of the Commissioner's analysis by submitting that the investors bargained only for "the sale of Securities quoted on the ASX" in the sense of "quoted" for which the Commissioner contends. Whether they are "quoted" in Stamp Act terms follows as a matter of law from the factual position upon "stapling".

207 The Commissioner thus contends that the "agreements" were to purchase "stapled securities" in the quantities defined in the "firm commitments". They were agreements to purchase shares which would in future have the relevant characteristics (which they did have) of the "stapled" - the Stamp Act classification of them as "quoted" is irrelevant in this context.

208 Counsel says the prior agreement was performed by the transfer, the investors do not get anything that had not already been the subject of the "firm offer" and "firm acceptance".

209 Counsel for the Commissioner says that in general the applicant's argument "confuses" the "agreement forming" process with the performance of the agreement in accordance with its terms. In any case, the obligations assumed under an agreement can, theoretically, be characterised as "conditions precedent" to the existence of the agreement.


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    However, that will always be a highly artificial approach except in rare cases. If the obligations are settled, subject only to future performance subject to specified conditions, and there is an identifiable offer and acceptance, there is no basis upon which it can realistically be said there is no agreement.

210 Leaving aside the question whether a specific "instrument" must be found to exist, for duty purposes, the substantial question is whether any contractual agreement can be found for s 74 purposes.

211 While in commercial terms there can be little doubt that Mr Roberts ultimately hoped and believed the shares in Multiplex would be allocated by Multiplex to persons who expressed firm commitments to acquire them, I do not consider the commercial arrangements undertaken by various organisations concluded in contractual arrangements between Mr Roberts and the various persons in the various investor categories. In this regard, I largely accept the submissions made by senior counsel for the applicant.

212 As to the Cornerstone Investors, the evidence shows that the invitation to invest was one from the underwriter, which at material times of first contact UBS had not yet become. The invitation was to subscribe an amount of money, not to buy defined property. The actual language of the invitation was in respect of a "firm allocation", the language of share subscription and allotment, not contract.

213 The letter between SPB and UBS is properly characterised as an invitation to subscribe for the quoted shares in the listed company, which had not then been issued but were proposed to be issued. In particular, the invitation was in respect of Securities to be quoted on the ASX.

214 Additionally, all Cornerstone Investors were vendors of property being vended into the Multiplex Property Trust. The consideration for the vending was to be the quoted Securities. If the Securities issued by way of consideration were not quoted they did not have a ready, realisable market value. In respect of SPB, it was the vendor of the ANZ Centre in Brisbane.

215 The Put and Call Offers Deed is also of relevance. The Put and Call was granted on 15 October 2003. It was a condition precedent to the options that the vendors receive a firm commitment to $82 500 000 worth of Securities: see cl 1.1 of the Deed. The options were only able to be accepted after the "MIPO Listing Date" see clause 2. The "MIPO Listing Date" is defined and incorporates "Multiplex Initial Public Offering" as


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    defined. The options could not be exercised until the stapled securities were quoted. No agreement coming into effect upon the exercise of the options could come into effect until after the quotation of the stapled securities. The formal sale agreement for the ANZ Centre was executed on 8 December 2003.

216 In all of these circumstances, I find it difficult to conclude that there was any "agreement" in respect of anything other than "quoted stapled securities", as contended for by the applicant.

217 The same analysis applies in respect of the dealings involving Hyde Park.

218 As to the Institutional Investors, they were, together with the Cornerstone Investors, "Sophisticated Investors or Professional Investors" within the meaning of those terms in the Corporations Act: see exhibit 2, Vol 4 at 703.

219 If one is searching for dutiable instruments evidencing an agreement, the question arises as to what the dutiable instruments are in the case of the Institutional Investors. So far as IAG is concerned, the contract or agreement contended for would seem to be that comprised of:

  1. (1) The letter of UBS to IAG of 21 October 2003: see exhibit 2, Vol 4, tab 19, page 701.
  2. (2) The form signed by IAG on 22 October 2003; see exhibit 2, Vol 4, tab 20, page 707.
  3. (3) The letter of UBS to IAG of 17 November 2003: see exhibit 2, Vol 4, tab 21, page 708.
  4. (4) The form signed by IAG on 19 November 2003: see exhibit 2, Vol 4, tab 22, page 710.

220 The letter of UBS to IAG of 21 October 2003 (exhibit 2, Vol 4, tab 19, page 701) is in a form different to the letter sent to the Cornerstone Investors. The Institutional Investors were not vendors of property or the Multiplex Property Trust.

221 Senior counsel for the applicants drew attention to the evidence of Mr Moran in his witness statement at [29] in which the rationale for arrangements such as those with the Institutional Investors can be understood. Central to this is that the Institutional Investor is, as soon as its liability to make payment of its (effective) sub-underwriting commitment, or put otherwise, to take up Securities, able to lay the


(Page 36)
    Securities off or to sell them immediately on market. Listing and quotation is central to any such arrangement.

222 Another way of testing the legal nature of the arrangements made is to assess what the liability of Mr Roberts or IAG would have been if the other did not act in the manner expected. I consider that IAG could not have been required, as a matter of law, to pay $21.56 million or any other amount to Mr Roberts as transferor of the Multiplex shares, if Multiplex did not list or the shares were not quoted. Similarly, if IAG refused to subscribe for the stapled securities on listing and quotation, I consider UBS as underwriter could possibly pursue an action for damages against IAG. This would be the only effect of the "agreement" referred to in the letter, if it were a contractual agreement. If there was an agreement between UBS and IAG by which IAG was to commit $21.56 million to the listing, I consider it did not constitute an agreement between IAG and Mr Roberts. It is difficult to see any basis upon which UBS entered into an agreement with IAG or SPB as agent for Mr Roberts as transferor.

223 As a result, in my view, whatever agreement existed arising from the correspondence relied upon by the Commissioner, it was solely between UBS and IAG for IAG to take up a proportion of UBS's underwriting liability. UBS would not have been able to compel IAG by suit for specific performance to actually take up the stapled securities, even if all conditions were satisfied. UBS as underwriter would have had to sell the shares on market to mitigate its loss and sue for damages: Meagher, Gummow and Lehane, Equity: Doctrines and Remedies, Fourth Edition, 2002 at par 20 - 040 and cases cited at footnote 9; See also discussion in ANZ Executors and Trustees Ltd v Humes Limited [1990] VR 615 at 629.5 per Booking J. See also Crafter v Singh[1990] 8 ACLC 601 at 606 and Spry Equitable Remedies (6th Edition) 2001 at pages 64 - 65. The point to be made is that this would be an action available to UBS, not to Mr Roberts. Furthermore, this highlights the difficulty in identifying any "property…agreed to be sold" for the purposes of s 74(1) of the Stamp Act.

224 The letter of UBS to IAG dated 21 October 2003 makes it clear that, to the extent that the correspondence cited might be thought to give rise to an agreement, it is an agreement between UBS and IAG.

225 There is not a clear statement in any correspondence exactly what dutiable documents the Commissioner relies upon. So far as SPB is concerned, however, the following correspondence seem to be relevant:


(Page 37)
  1. (1) The letter of UBS to SPB of 15 October 2003: exhibit 2, Vol 3, tab 6, page 372.
  2. (2) The form signed by SPB on 16 October 2003: exhibit 2, Vol 3, tab 7, page 377.
  3. (3) The letter of UBS to SPB of 22 October 2003: exhibit 2, Vol 3, tab 8, page 378.

226 In respect of the letter of UBS to SPB of 15 October 2003 it may be noticed that it was sent prior to the execution of the underwriting agreement (as to which see exhibit 2, Vol 3, tab 5, page 326). The underwriting agreement was executed on 23 October 2003, the same date the product disclosure statement was dispatched. Prior to the execution of the underwriting agreement, UBS was not the underwriter.

227 Further, if regard is had to the terminology of the letter, it is in terms redolent of an agreement to agree in respect of Multiplex when listed, and the stapled securities when quoted. Expressions such as "propose to undertake", "proposes to underwrite" are used. It is also interesting to note in item 5(x) in the letter of UBS to IAG of 21 October 2003 (exhibit 2, Vol 4, tab 19, page 705). The rights of action are in the underwriter, UBS. The rights do not include the right to sue for specific performance of any sale of stapled securities. The "agreement" was one whereby IAG committed to take the stapled securities once the entities were listed and the stapled securities quoted. If they did not, what would occur is set out in item 5(x) of the above letter.

228 Such an arrangement is not, and cannot be fairly characterised as, an "agreement" between Mr Roberts and IAG "for the sale of Securities not quoted on the ASX".

229 The entire basis of the correspondence between UBS and IAG is that obligations between UBS and IAG only arises once the entities are listed and stapled securities quoted.

230 I accept that all other Institutional Investors are in the same position as IAG.

231 As to Retail Investors, I also largely accept the submission made by counsel on behalf of the applicant. There is little attempt by the Commissioner to explain what the dutiable documents are in these cases.

232 For example, in respect of Ms Maniacco, the evidence comprises the Application Form from the Product Disclosure Statement: see exhibit 2, Vol 4, tab 33, page 750.

(Page 38)



233 Ms Maniacco was issued with shares and units pursuant to the transfer.

234 It is difficult to see any relevant agreement of the type contended for between Ms Maniacco and Mr Roberts on the evidence before the Tribunal.

235 As to the Chairman's List of Investors, again there is little attempt by the Commissioner to identify the dutiable documents. The only additional document as regards Mr Dransfield is that in the bundle, exhibit 2, Vol 5 at tab 41, page 763. This letter, which simply invites the recipient to "apply for those securities" and to use the application form in the prospectus, does not qualify "as an agreement for the sale of Securities not quoted on [the ASX]".

236 Again, if one tests the proposition by asking whether Mr Roberts could have sued Mr Dransfield for specific performance based on this letter, to compel Mr Dransfield to purchase 24 692 shares in Multiplex prior to them being quoted, the answer surely would have been no. However much a withdrawal or failure to take up an allocation by a person in Mr Dransfield's position might have affected the personal and commercial relationship between people such as Mr Roberts and Mr Dransfield, it would not have constituted a cause of action for breach of a contract at the suit of Mr Roberts.

237 In respect of Mr Coppin, all that exists is his application pursuant to the Product Disclosure Statement form. It is difficult to see how this constitutes an agreement of the type to which s 74 refers.

238 As regards Mr Laurance, all that exists is an email and the application pursuant to the Product Disclosure Statement form. The email states that Mr Laurance "would like to subscribe for … shares in the float".

239 I conclude that none of the investors in this category of Chairman's List of Investors has been shown to have concluded a contract or agreement of the type alleged.

240 As to Employee Investors, the position is not much different from that concerning Chairman's List Investors.

241 For example, Mr McDiven signed a form on 19 November 2003 (see exhibit 2, Vol 5, tab 56, page 814). I fail to see how the completion of that form, without more, can constitute an "agreement for the sale of


(Page 39)
    Securities not quoted on the ASX" with Mr Roberts. The invitation is expressed by the words "invited to apply for" stapled securities. This connotes an offer, not an acceptance. Sections 2a and 2b are expressed to be applications for stapled securities. Again this suggests an offer not an acceptance. The final two sentences of the form are confusing, particularly the reference to the "postal acceptance rule". This provision is consistent with an understanding if the form (being an offer) is late, it will not be accepted.

242 In all categories of investor, I consider the correct and preferable view is that there was no contract or agreement however executed for the sale of any estate or interest in any property which falls to duty under s 74(1) of the Stamp Act.


Conclusion and Orders

243 In these circumstances, I find in favour of the Commissioner in relation to issue 1 and in favour of the applicant in relation to issue 2.

244 As a result, I would affirm the assessment of the Commissioner of State Revenue on the basis that the transfers, the subject of his assessment, were subject to duty under Item 4A(1) of the Second Schedule of the Stamp Act.

245 As a result the Tribunal orders:

  1. 1. The decision of the Commissioner of State Revenue that the various transfers of Multiplex shares on 2 December 2003 are subject to duty under the Stamp Act 1921 (WA), s 16 and Second Schedule Item 4A(1) is affirmed.
  2. 2. The decision of the Commissioner of State Revenue that the share transfers are dutiable under the Stamp Act 1921 (WA), s 74(1) is set aside.
  3. 3. The review application is dismissed.
    I certify that this and the preceding [245] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

    ___________________________________

    JUSTICE M L BARKER, PRESIDENT


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