Old Reynella Village Pty. Ltd. v. Commissioner of Stamps (S.A.)

Judges:
Mohr J

Court:
Supreme Court of South Australia

Judgment date: Judgment handed down 1 September 1989.

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Mohr J.

The appellant in this matter appeals against a determination of the Commissioner of Stamps regarding the stamp duty chargeable on 17 memoranda of transfer. The Commissioner has stated a case and seeks the opinion of the Court on two questions viz.:

• 1. Whether the transfers or any of them are chargeable with duty as assessed by me:
• 2. If not with what amount of duty is each of the transfers chargeable?

The questions arise in the following circumstances. Three companies (``the Hall Group'') during the period 9 September 1986 and 17 February 1987 were active in the Reynella area. They entered into contracts for the purchase of four properties and obtained options to purchase a further 16 properties. If amalgamated the 20 properties would in effect become one block of land. By a deed dated 5 March 1987 the Hall Group assigned the benefit of the contract for sale and purchase and the option agreements to the appellant (formerly Whitby Pty. Ltd. as appears in the deed). The appellant proceeded to obtain transfers of 17 individual properties covered by the contracts

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and options on the dates and for the consideration set out hereunder. The Commissioner assessed duty as shown in the schedule:

Certificate of Title   Transferor   Consideration    Duty payable if sec.
                                                    66ab is not applicable
1   2554/66            State Bank     $100,000            $ 2,830
2   3607/138      ABC Dev. Pty. Ltd.  $160,000            $ 5,230
3   4037/724           Turner         $130,000            $ 4,030
4   3847/7             Bletas         $100,000            $ 2,830
5   3920/33
  & 4178/132    St Francis Wines P/L  $500,000            $18,830
6   4305/348       Bosman Nom. P/L    $138,600            $ 4,374
7   4058/257    K. Bell & H.D. Bell   $ 90,000            $ 2,480
8   2736/182          Stone           $ 77,000            $ 2,025
9   2736/181          Haines          $100,000            $ 2,830
10  2132/19         I.J. Sims         $ 80,000            $ 2,130
11  2290/47         M.K. Sims         $116,000            $ 3,494
12  4230/690   P.J. and C.A. Hooper   $175,000            $ 5,830
13  3241/119        R. Bowden         $110,000            $ 3,230
14  4105/66         R. Bowden         $274,161            $ 9,798
15  4106/97        C. Lawrence        $195,000            $ 6,630
16  4106/98        G. Dobrovic        $ 93,000            $ 2,585
17  2322/129       C. Fletcher        $100,000            $ 2,830
                                                          -------
                                                          $81,986
                                                          -------
      

The question which substantially falls for consideration is whether the transactions whereby the appellant seeks to acquire title to the 17 properties falls within the provision of sec. 66Ab(1) of the stamp duties act 1923. That section reads:

``66ab(1) Where land or interests in land is or are conveyed by separate conveyances -

• (a) that arise from a single contract of sale; or
• (b) that together form, or arise from, substantially one transaction or one series of transactions,

The conveyances shall be chargeable with ad valorem duty calculated upon the sum of the amounts by reference to which ad valorem duty on each of the conveyances would, but for this subsection, have been calculated, and that duty shall be apportioned to the various conveyances as determined by the Commissioner.''

The Commissioner has assessed duty on the basis that the section does apply and the appellant contends that it does not apply.

It is with sec. 66Ab(1)(b) that the argument deals. That is do the separate conveyances

``form or arise from substantially one transaction or one series of transactions.''

counsel were able to refer me to only two cases which bear on the problem viz.:
Attorney-General v. Cohen and Another (1937) 1 k.b. 478 and
Jeffrey v. Commissioner of Stamps (1980) 23 S.A.S.R. 398.

In Cohen's case, Greene L.J. thought the question was one of law once the facts had been established. He said at p. 489:

``The second matter is that once the facts are ascertained the question whether they fall within the language used in the section is a question of the construction of the section, and therefore a question of law...''

and

``... It is therefore, in my judgment, illegitimate to treat the question as a question of fact or, as it is sometimes put, a question of degree, which is the same thing expressed in a different way...''

at p. 482 Slesser L.J. put the matter rather differently but to the same effect when he said:

``... It cannot be because some third person, looking at the matter objectively, can discover by casual coincidence some serial

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incident that a series of transactions inter-partes can be said to arise.''

In Jeffrey's case, Jacobs J. Who considered Cohen's case in some detail and on this question of a question of law or a mixed portion of law and fact said (at p. 406):

``Nevertheless the concept of separate conveyances that `together form or arise from substantially one transaction' is itself not free from difficulty. It is the conveyance that is the relevant transaction (Attorney-General v. Cohen), and if there is more than one conveyance, there is prima facie more than one transaction, but the word `substantially' must be given some meaning. It can only mean, in my judgment, that the Commissioner is required to look at `the substance' of the several transactions, and determine whether they are, `in substance', one transaction, although masquerading as several. The use of the word `substantially' seems to me to require a different approach from that which commended itself to Greene L.J. In Attorney-General v. Cohen, where his lordship said that `once the facts are ascertained then the question whether they fall within the language used in the section is a question of the construction of the section, and therefore a question of law' and `it is therefore... iIlegitimate to treat the question as a question of fact or, as it is sometimes put, a question of degree.' I can see no escape from so treating the question if one is to arrive at the substance of the transactions.''

I respectfully agree.

the facts in Jeffrey's case were quite dissimilar to those of the subject case and with respect I agree with Jacobs J. That there was only one answer once the transactions when considered clearly fell within the ambit of sec. 66Ab. In Cohen's case the facts bear at least a superficial resemblance to those in the subject case. Twelve houses were offered by auction in 12 separate lots. Six were bought by the one purchaser as they were put up for sale. Six deposits were paid and six separate transfers prepared. It was held that these six transactions did not come within the English section in that they did not ``form part of a larger transaction or of a series of transactions''. The difference in wording is apparent and in deciding whether or not the imputed transactions are ``substantially one transaction'' within the terms of the Stamp Duties Act different considerations will apply to those in deciding whether or not they form part of a ``larger transaction''. However, when one turns to consider whether or not there was a ``series of transactions'' the wording is identical and Cohen's case is of great assistance. before going on to consider the matter further it is necessary to further examine the facts as they can be gleaned from the documents. From the deed assigning the Hall Group's interest to the appellants it is apparent that the Hall Group had in mind the development of a shopping complex on some if not all the subject land. For example there is mention of a letter of intent from ``Coles/Myer'', the ``plans and details on which the letter of intent is based'' are undertakings by the hall group that it would ``not undertake the development of any retail or shopping complex within a radius of eight kilometres from the outer boundary of the said land''. The last example is perhaps of considerable significance as the parties were there clearly speaking of an aggregated block of land made up of the individual blocks referred to in the various contracts and options.

Greene L.J. In Cohen's case at pp. 490-491 Gave an example of what he considered to be a series of transactions caught by the section in these words:

``... Again, a builder developing a building estate might have under one contract an option to purchase different plots at different times, so that each option, when exercised, would create a separate contract. In each of these cases [he had set out one other example] it would at least be a matter of doubt whether a particular order or conveyance could be said to form part of a larger transaction, but there would, I think, be in each case such an integral relationship between the transactions as to constitute each indubitably part of a series of transactions. In my opinion, read in its context, the phrase `part of a series of transactions' is intended to sweep in cases where the relationship between the transactions is an integral and not a fortuitous one depending merely `on such circumstances as contiguity in time or place, but is such that it would not or might not be

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sufficient to bring them within the phrase `part of a larger transaction'.''

With that line of reasoning I respectfully agree and if it is applied to the facts of the present case it is I think clear that the Hall Group were engaged in the process of acquiring separate but adjoining blocks of land with the intention of integrating them in due course into one holding and on that land entered into a contract or contracts for the erection of a shopping complex.

That being so I am of the opinion that the relationship between the transactions was in the words of Greene L.J. ``An integral and not a fortuitous one''. That being so the transactions under consideration were clearly part of a series of transactions within the meaning of sec. 66Ab and the first question in the case stated is to be answered ``Yes''. The second question does not then arise.