CHIEF COMMISSIONER OF STATE REVENUE (NSW) v PACIFIC NATIONAL (ACT) LIMITED

Members: Hodgson JA

Ipp JA
Basten JA

Tribunal:
New South Wales Court of Appeal

MEDIA NEUTRAL CITATION: [2007] NSACA 325

Decision date: 16 November 2007

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Ipp JA

35. The issues in this appeal are set out in the reasons for judgment of Hodgson and Basten JJA which I have had the benefit of reading.

36. Section 164(1) of the Duties Act 1997 (NSW) provides that duty is charged on a lease instrument " being an instrument that evidences or effects a lease " (that is, a lease as defined by s 164A). Relevantly, s 164A defines a lease as " an agreement (such as a licence) by which a right to use land in New South Wales at any time and for any purpose is conferred on or acquired by a person (who is taken, for the purposes of this Chapter, to be a lessee of the land) " (s 164A(b)).

37. The appeal turns on whether the Rail Access Agreement (which allowed the respondent to operate rail services on railway track now owned by RIC) is an agreement that falls within s 164A(b). That is, whether the Rail Access Agreement entered into between the RAC (the predecessor of RIC) and the respondent is an agreement by which a right to use land in New South Wales was " conferred on or acquired by " the respondent within the meaning of s 164A(b).

38. By the express terms of the Rail Access Agreement, RAC granted to the respondent non-exclusive rights of access to its rail network and " rail infrastructure facilities " . The RAC owned the rail network and facilities. The SRA owned the land that supported the network and facilities.

39. Thus, to define the question in the appeal more closely, it is whether the Rail Access Agreement (which gave the respondent non-exclusive rights of access to RAC ' s - now RIC ' s - rail network and rail infrastructure facilities) is an agreement by which a right to use the SRA land was conferred on or acquired by the respondent.

40. Clause 5(1) of Schedule 6A to the Transport Administration Act 1988 (NSW) (the " TA Act " ) provided, at the relevant time:

" A person who is a party to an access agreement is authorised to have access to the rail infrastructure facilities to which the access agreement relates, even if the facilities are situated in or on SRA land, if access is exercised in accordance with and as permitted by the access agreement. "

41. The Rail Access Agreement is silent as to the respondent ' s rights of access to SRA ' s land, but, as the Rail Access Agreement expressly granted to the respondent non-exclusive rights of access to the RIC ' s rail infrastructure facilities, the effect of cl 5(1) of Sch 6A to the TA Act was to give to the respondent access to SRA land.

42. The short point is whether, in these circumstances, the Rail Access Agreement either conferred on the respondent a right to use the SRA land or, by that agreement, the respondent acquired the right to use the SRA land.

43. I do not think that it can be disputed that, by reason of cl 5(1) of Sch 6A to the TA Act, the legal effect of the Rail Access Agreement was to authorise the respondent to have access to (and thereby use) the SRA land.

44. Nothing in the terms of the Rail Access Agreement provided for the grant of access to the respondent. Relying on this fact, the respondent argued that the statute (that is, cl 5(1)) is the source of the respondent ' s authority to have access to and use the SRA land, not the Rail Access Agreement. The respondent submitted that the Rail Access Agreement was concerned only with the use of RIC ' s rail infrastructure facilities and had nothing to say about access to and use of the SRA land that supported the rail infrastructure facilities.

45. Applying the conventional canons of construction, the expression " conferred on " , in s 164A(b) of the Duties Act , should be construed as having a different meaning to " acquired by " , in that section. That is not a difficult task as the natural meaning of the words " an agreement by which a right to use land is conferred on a person " differs from the natural meaning of the words " an agreement by

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which a right to use land is acquired by a person " .

46. In my opinion, by its natural meaning, the expression, in s 164A(b), " an agreement … by which a right to use land … is conferred on " connotes an agreement which, by its terms, gives to a person a right to use land. On the other hand, by its natural meaning, the expression " an agreement … by which a right to use land … is … acquired by a person " connotes an agreement the legal effect of which results in the acquisition by a person of a right to use land.

47. I accept that, in accordance with the analysis referred to in the preceding paragraph, the Rail Access Agreement does not confer on the respondent a right to use land. But, it cannot be gainsaid that the legal effect of the Rail Access Agreement was that the respondent, thereby, acquired a right to use land.

48. In the circumstances, the Rail Access Agreement is a " lease " in terms of s 164A of the Duties Act and the respondent is liable to pay duty on it.

49. I agree with the reasons and orders proposed by Hodgson JA.