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Commissioner of State Revenue v Lend Lease Development Pty Ltd; Commissioner of State Revenue v Lend Lease IMT 2 [HP] Pty Ltd; Commissioner of State Revenue v Lend Lease Real Estate Investments Limited [2014] HCA 51

The Victorian Urban Development Authority (VicUrban) had transferred seven parcels of land in the Docklands area of Melbourne to the three taxpayers, collectively called “Lend Lease” (a parent company and two subsidiaries) between October 2006 and June 2010.

The Commissioner assessed duty on the value of the contractual promises in exchange for the land, and not the consideration for the value of the bare land transferred. Lend Lease objected to the assessments. The Commissioner disallowed the objections.

Lend Lease requested the Commissioner to treat the objections as appeals to the Supreme Court of Victoria. At first instance, the primary judge (Pagone J) dismissed the taxpayers’ appeals.

Lend Lease appealed to the Court of Appeal of the Supreme Court of Victoria. That Court (Warren CJ, Tate JA and Kyrou AJA) allowed each appeal.

By special leave granted on 15 August 2014, the Commissioner appealed to the High Court of Australia.

The appeals to the High Court turned on one statutory question posed by s20(1)(A) of the Act: What was the consideration for the dutiable transaction (being the amount of a monetary consideration or the value of a non-monetary consideration)?

The High Court found unanimously in favour of the Commissioner. The High Court allowed all of the Commissioner’s appeals (eight in total) with costs.

The High Court applied the case of Dick Smith Electronics (which considered the issue of consideration in the context of a transfer of marketable securities). It concluded at paragraph [50] that the consideration which moved the transfer by VicUrban to Lend Lease of each stage was Lend Lease’s performance of the several promises recorded in the 2001 Development Agreement (or that agreement as later varied and supplemented), in consequence of which VicUrban would receive the total of the several amounts set out in the applicable agreement.

It was only in return for the promised payment of that total sum, by the various steps recorded in the applicable agreement, that VicUrban was willing to transfer to Lend Lease the land comprising the relevant stage.

Read the judgment.

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