Campbelltown Central 2 Pty Ltd v Chief Commissioner of State Revenue

Medium Neutral Citation: Campbelltown Central 2 Pty Ltd v Chief Commissioner of State Revenue [2025] NSWSC 1568

Hearing dates: 11-13, 15 August 2025

Date of orders: 18 December 2025

Decision date: 18 December 2025

Jurisdiction: Equity - Revenue List

Before: Bennett J

Decision: In each of proceedings 2022/00385284; 2022/00385988; 2022/00385268; and 2022/00386018:
(1) The Duties Notice of Assessment issued by the defendant to the plaintiff on 3 November 2021 is revoked.
(2) Subject to order 3 below, the parties are to provide by email to the Chambers of Bennett J agreed short minutes of order to resolve the issue of costs by 4:00pm on 13 February 2026.
(3) If agreement as to costs is unable to be reached:
(a) Any party wishing to make a submission as to the appropriate costs order is to provide brief written submissions not exceeding 5 pages by email to the Chambers of Bennett J and serve them on the opposing side by 4:00pm on 13 February 2026.
(b) Any written submissions in reply not exceeding 5 pages on the issue of costs are to be provided by email to the Chambers of Bennett J and served on the opposing side by 4:00pm on 20 February 2026.
(4) Subject to any further order, the issue of costs will be dealt with on the papers.
(5) The Exhibits are to be returned.

Catchwords: TAXES AND DUTIES — Dutiable transactions — Dutiable property — Declaration of trust — Where plaintiffs are the registered proprietors of certain properties — Where plaintiffs each sign a “Confirmation Deed” in which each plaintiff “acknowledges and confirms” that a third party holds the beneficial interest in properties legally owned by the plaintiffs — Whether the deeds signed by plaintiffs constituted declarations of trust
TAXES AND DUTIES — Review — Application — Onus — Dispute as to dutiable value — Expert opinion evidence provided on the question of dutiable value — Consideration of operation of onus and approach to expert evidence when aspects of expert evidence provided by parties cannot be accepted

Legislation Cited: Duties Act 1997 (NSW), ss 8, 12, 21, 23
Income Tax Assessment Act 1997 (Cth), ss 70-10, 70-35
Taxation Administration Act 1996 (NSW), s 97, 100, 101
Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited: Bosanac v Commissioner of Taxation (Cth) (2022) 275 CLR 37; [2022] HCA 34
Bupa HI Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 1105
CGU Insurance Limited v One.Tel Limited (in liq) (2010) 242 CLR 174; [2010] HCA 26
Chief Commissioner of State Revenue v Benidorm Pty Ltd (2020) 104 NSWLR 232; [2020] NSWCA 285
Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24
Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585; [2018] HCA 59
Cook’s Construction Pty Ltd v Brown (2004) 49 ACSR 62; [2004] NSWCA 105
Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212
Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249
HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634; [2020] NSWCA 296
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Korda v Australian Executor Trustees (SA) Limited (2015) 255 CLR 62; [2015] HCA 6
Kronenberg v Macaulay [2025] NSWCA 195
Lachlan v HP Mercantile Pty Ltd (2015) 89 NSWLR 198; [2015] NSWCA 130
Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 463
Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue (2015) 89 NSWLR 43; [2015] NSWSC 68
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37
OneSteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1; [2013] NSWCA 27
Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369
Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82
SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue (2021) 113 ATR 24; [2021] NSWSC 395
Tasty Chicks Pty Limited v Chief Commissioner of State Revenue (NSW) (2011) 245 CLR 446; [2011] HCA 41
Town of East Fremantle v Cornell (2005) 138 LGERA 180; [2005] WASCA 18
Transport for NSW v Hunt Leather Pty Ltd (2024) 115 NSWLR 489; [2024] NSWCA 227
Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5
Winston-Smith v Chief Commissioner of State Revenue [2019] NSWCA 75

Category: Principal judgment

Parties: Proceeding 2022/00385284:
Campbelltown Central 2 Pty Ltd (Plaintiff)
Chief Commissioner of State Revenue (Defendant)
Proceeding 2022/00385988:
Campbelltown Central 8 Pty Ltd (Plaintiff)
Chief Commissioner of State Revenue (Defendant)
Proceeding 2022/00385268:
Riveredge Investments Pty Ltd (Plaintiff)
Chief Commissioner of State Revenue (Defendant)
Proceeding 2022/00386018:
Warwick Farm Central Pty Ltd (Plaintiff)
Chief Commissioner of State Revenue (Defendant)

Representation: Counsel:
DFC Thomas SC / D Morgan (Plaintiff in each proceeding)
S Balafoutis SC / S Kanagaratnam (Defendant in each proceeding)
Solicitors:
Mills Oakley (Plaintiff in each proceeding)
Crown Solicitor’s Office (Defendant in each proceeding)

File Number(s): 2022/00385284; 2022/00385988; 2022/00385268; 2022/00386018

Publication restriction: Nil

JUDGMENT

Introduction

Background

1. By four separate Summons filed on 21 and 22 December 2024, four taxpayers, Campbelltown Central 2 Pty Ltd (CC2), Campbelltown Central 8 Pty Ltd (CC8), Riveredge Investments Pty Ltd (Riveredge) and Warwick Farm Central Pty Ltd (WFC) (collectively, the Taxpayers) apply to this Court under s 97 of the Taxation Administration Act 1996 (NSW) (TA Act) for a review of a decision by the Chief Commissioner of State Revenue (the Chief Commissioner), the defendant named in each Summons, to assess each of the Taxpayers to duty under the Duties Act 1997 (NSW) (Duties Act).

2. The following is a summary of the background to this dispute. Nothing of what is summarised below appears to be in dispute.

3. The dispute arises out of the purchase of four commercial properties in Western and South-Western Sydney. These properties were located at:

4. 8 Farrow Road, Campbelltown (8 Farrow Road) (the sale of this property settled in December 2015);

5. 2 Farrow Road, Campbelltown (2 Farrow Road) (the sale of this property settled in April 2016);

6. Lots 4 and 5, 2 Hill Road, Lidcombe (2B Hill Road) (the sale of this property settled in February 2017); and

7. the corner of Governor Macquarie Drive and Munday Street, Warwick Farm (the Warwick Farm Property) (the sale of this property settled in July 2017).

I will refer to these properties collectively as the Properties.

4. Each of the Taxpayers acquired one of the Properties. More specifically:

5. CC8 acquired 8 Farrow Road;

6. CC2 acquired 2 Farrow Road;

7. Riveredge acquired 2B Hill Road; and

8. WFC acquired the Warwick Farm Property.

9. The Taxpayers themselves are each controlled by a property developer, Mr Antoine Bechara.

10. Mr Bechara operates his property development business through a corporate group. Each of the Taxpayers were special purpose corporate vehicles, incorporated for the purpose of owning the Properties – each Taxpayer was incorporated not long before the relevant property was purchased by it. The ultimate holding company of each is Al Maha Holdings Pty Ltd.

11. Another member of the corporate group, and one central to this dispute, is Al Maha Pty Ltd (Al Maha). Al Maha was incorporated in 2006. From its inception and throughout the time periods material to this dispute, Al Maha’s sole director was Mr Bechara. Speaking broadly, it appears Al Maha was responsible for financing the purchase of the Properties. The precise arrangements between the Taxpayers and Al Maha are unnecessary to detail given the way this matter has progressed. It suffices to say Al Maha appears to have contributed to the purchase prices of the Properties either by contributing funds itself to the purchase (or reimbursing other entities of Mr Bechara’s who had contributed funds), or by assuming the obligations of the relevant Taxpayer to repay loans that had been taken out by that Taxpayer from other banks.

12. On 24 June 2020, each of the Taxpayers and Al Maha entered into a deed titled Confirmation Deed. There were four such deeds. The Confirmation Deeds were in materially identical terms. The stated purpose was for the relevant Taxpayer to “acknowledge that Al Maha is the beneficial owner of” the relevant property owned by that Taxpayer, and that Al Maha “has always held such beneficial ownership since” the settlement date for the contract for the purchase of the relevant property.

13. Also in 2020, Mr Bechara’s group of companies sought to engage in a corporate restructure. By a letter from their solicitors dated 30 June 2020, a private ruling was sought from the Chief Commissioner seeking clarification that transfers of the Properties from the Taxpayers to different corporate entities as part of the proposed restructure would be exempt from duty pursuant to s 273B of the Duties Act. In support of their request for a private ruling, the Taxpayers provided the Confirmation Deeds to the Chief Commissioner, in support of their contention that Al Maha was the beneficial owner of the Properties.

14. Subsequent to the request for a private ruling, on 15 October 2021, a letter was sent on the Chief Commissioner’s behalf to the Taxpayers. In that letter, the Taxpayers were informed that the Chief Commissioner considered the Confirmation Deeds, in particular cl 3 of those deeds (which is set out below) to be declarations of trust within the meaning of the , and as such they were liable to duty.

The hearing

14. On 11 April 2025, Hammerschlag CJ in Eq made orders for these proceedings to be heard together, with evidence in one to be evidence in each other proceeding.

15. Mr DFC Thomas SC appeared with Mr D Morgan of counsel for the Taxpayers. Mr S Balafoutis SC appeared with Mr S Kanagaratnam of counsel for the Chief Commissioner.

16. The proceedings were originally set down on an estimate of five days. Based on the Appeal Statements filed by the Taxpayers and the Chief Commissioner and the opening submissions made by the parties, it seemed a wide range of issues were to be covered. The Taxpayers had raised five issues for determination, these being:

17. whether the Properties were held on resulting or constructive trust for Al Maha prior to the Confirmation Deeds being signed;

18. if the Properties were not held on trust prior to the Confirmation Deeds, whether the Confirmation Deeds themselves were declarations of trust and dutiable on that basis;

19. if the Confirmation Deeds were declarations of trust, whether they were only subject to nominal duty;

20. if the Taxpayers were to pay more than nominal duty, whether the Taxpayers should only be assessed to duty on so much of the beneficial interest as was conveyed from the Taxpayers to Al Maha by the Confirmation Deeds (as opposed to the whole value of each of the Properties); and

21. whether the dutiable value of the Properties is what the Commissioner assessed them to be.

22. However, before the reading of evidence, the Taxpayers informed the Court that they were abandoning the first, third and fourth of the issues above. This means the only two issues I am deciding are the second and fifth of those issues. That is, all I am deciding is whether the Confirmation Deeds were declarations of trust and the valuation dispute between the parties.

23. Both the Taxpayers and the Chief Commissioner provided written submissions in opening and in closing (respectively, TWS-Closing and CCWS-Closing), alongside their oral submissions. Each set of submissions was of great assistance to me in determining this dispute. I wish to thank both sets of counsel, and their respective instructors, for those submissions.

Summary

19. For the reasons set out below, I accept the Taxpayers’ principal contention that the Confirmation Deeds were not declarations of trust. It follows that the Taxpayers’ appeal should be upheld and the Duties Notices of Assessment ought to be set aside.

Evidence

20. In advance of the hearing, I was provided with a lengthy Court Book spanning 8457 pages of affidavit and documentary evidence, along with a supplementary Court Book of 152 pages containing further evidence intended to be relied upon by the Chief Commissioner. However, as it happened, many of the affidavits in the Court Book were not read and a substantial portion of the documents were not tendered.

21. The parties relied on expert evidence as part of the valuation dispute. Rather than outline that evidence here, the details of the expert evidence in these proceedings are described later in these reasons, at [100] and following, when I come to consider the issue of the dutiable value of the properties.

22. Aside from their expert evidence, only the affidavit of Mr John Joseph Bechara sworn on 20 February 2025 was read and relied on by the Taxpayers. Mr John Bechara is the son of Mr Antoine Bechara and is the Head of Property and Assets in his father’s property development business. His affidavit evidence only concerned the Warwick Farm Property, in particular setting out aspects of the development application process which WFC undertook. Mr Bechara was briefly cross-examined by the Chief Commissioner, though no credibility findings were sought against him.

23. Aside from his expert evidence, the Chief Commissioner read and relied on an affidavit of Daniel Patrick O’Neil, the solicitor at the Crown Solicitor’s Office with carriage of this matter, sworn 15 August 2024 and an affidavit of Hayley Maree Carroll, the manager of Electronic Duties Return at Revenue NSW, affirmed 5 September 2024. Neither was required for cross-examination.

24. As for the documentary evidence, the documents exhibited to Mr John Bechara’s and Ms Carroll’s affidavits were tendered. But as for the many other documents which would have come through other affidavits which ultimately were not read as a result of the Taxpayers abandoning aspects of their case (along with the documents exhibited to Mr O’Neil’s affidavit, which were not initially tendered), the parties agreed to produce a joint list of documents in the Court Book which were to be put into evidence. I observe that the final list of documents to be tendered resulted in substantial portions of the Court Book not being put into evidence in the proceedings.

The Confirmation Deeds

25. In this section, I will set out the key clauses of the Confirmation Deeds. I will refer to provisions of the Confirmation Deed entered into by CC2 for the sake of demonstration. However, as I indicated earlier, the material clauses of the Confirmation Deeds are identical in effect.

26. The parties to each deed are Al Maha and one of the Taxpayers. In this Confirmation Deed:

27. “CCPL” is a reference to CC2;

28. “Property” means 2 Farrow Road, ie the property purchased by CC2;

29. “Contract” refers to the contract pursuant to which CC2 purchased 2 Farrow Road;

30. “Date of Acquisition” refers to the date of settlement of the “Contract”, in this case being 27 April 2016;

31. “Deposit” and “Purchase Price” mean, respectively, the deposit paid and purchase price payable under the Contract; and

32. “Balance” means the balance of the “Purchase Price” (after payment of the “Deposit”) payable by CC2 to the vendor under the “Contract”.

In each Confirmation Deed, the same defined terms listed in (2)-(6) above are used in the material clauses but the definitions for them are changed to refer to the relevant property, purchase contract and settlement date as makes sense for the entity entering into the relevant Confirmation Deed. These are the main differences between the documents.

27. Clause 3, headed “Acknowledgements”, is the clause which is said to effect the declaration of trust. That clause provides as follows:

“3 Acknowledgements

3.1 CCPL acknowledges and confirms that:

(a) Al Maha holds all of the beneficial interest in the Property and has held such beneficial interest since the Date of Acquisition.

(b) Al Maha is entitled to be the registered proprietor of the Property and the CCPL must, if requested by Al Maha, transfer the Property to Al Maha or a person or entity nominated by Al Maha.

(c) CCPL will continue to exercise and perform all the rights, duties and powers relating to the Property only as directed by Al Maha.

(d) In the event of rental or sale of the Property, CCPL will collect and hold the rent or proceeds of sale for Al Maha.

3.2 Al Maha acknowledges and confirms that:

(a) Al Maha is responsible for all costs and expenses associated with the Property including, without limitation, council rates, water costs, utility costs, maintenance costs and insurance.

(b) In the event of rental or sale of the Property, CCPL will collect and hold the rent or proceeds of sale for Al Maha.

(c) Al Maha is responsible for any tax or duty that is payable on or in relation to the execution of this Deed and on or in relation to any transaction or instrument contemplated by this Deed.”

28. I will also set out the other clauses of this Confirmation Deed which I consider to be material:

“Background

A. Al Maha wished to purchase the Property but keep its identity confidential.

B. CCPL, at the request and direction of Al Maha, entered into the Contract to purchase the Property.

C. Al Maha provided the monies to CCPL for the Deposit to enable CCPL to enter into the Contract.

D. Al Maha provided the monies to CCPL for the Balance of the Purchase Price (and all associated costs of acquisition, including transfer duty, registration fees and legal costs) as and when those monies were required under the Contract (or were otherwise required to be paid).

E. Al Maha has funded all costs and expenses in relation to the Property (including, without limitation, council rates, water costs, utility costs, maintenance costs and insurance) since the Date of Acquisition.

F. CCPL wishes to acknowledge that Al Maha is the beneficial owner of the Property and has always held such beneficial ownership since the Date of Acquisition.

Operative Provisions

…

2 Background

2.1 The Background forms part of this Deed as though set out here in full.

…

4 Power of Attorney

4.1 CCPL irrevocably appoints Al Maha and its directors jointly and each one of them separately to be the attorney and agent of CCPL.

4.2 The attorney or attorneys may sign, seal and deliver or otherwise perfect:

(a) any transfer of the Property;

(b) any proxies or proxy relating to the Property;

(c) any document, notice, assurance or act which is required by Al Maha or its directors:

(A) to vest in Al Maha or a nominee of Al Maha the Property; and

(B) to carry into effect the agreements contained in this Deed.

4.3 The power of attorney remains in force until revoked in writing by Al Maha or by operation of law.”

29. The last section of the Operative Provisions, section 5, is headed “General provisions”. The clauses which appear under that section, cll 5.1-5.10, appear to be boilerplate clauses. Neither the Taxpayers nor the Chief Commissioner made any submission suggesting these clauses should affect my analysis of the Confirmation Deeds. For my part, I do not consider anything turns on those clauses.

The issues

30. As I recounted earlier in these reasons for judgment, the Taxpayers narrowed their case quite significantly. That narrowing means I only need to answer the following questions:

31. Were the Confirmation Deeds declarations of trust within the meaning of the Duties Act?

32. If the Confirmation Deeds are declarations of trust, what was the dutiable value of each of the Properties?

33. I will consider each question in turn.

The principles generally governing this review

32. The general principles governing this Court’s power to review assessments of the Chief Commissioner under the TA Act are settled and can be succinctly repeated.

33. A review by this Court under s 97 of the Act is a review of the assessments, not of the decision on the objection to those assessments: Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [28] (Basten JA, Giles and Campbell JJA agreeing).

34. Neither the Taxpayers nor the Chief Commissioner, on an application for review, are limited to the grounds of the objection before the Chief Commissioner: TA Act s 100(2). The proceedings involve a de novo review, based on the material before the Court and that material is not limited to the material before the Chief Commissioner in making the relevant assessment: Tasty Chicks Pty Limited v Chief Commissioner of State Revenue (NSW) (2011) 245 CLR 446; [2011] HCA 41 at [13]-[22] (French CJ, Gummow, Crennan, Kiefel and Bell JJ); Winston-Smith v Chief Commissioner of State Revenue [2019] NSWCA 75 at [2] (Meagher JA, Payne JA and Sackville AJA agreeing); Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue (2015) 89 NSWLR 43; [2015] NSWSC 68 at [4] (White J).

35. The Taxpayers have the onus of proving their case in an application for review: TA Act s 100(3). In relation to this, both parties cited the judgment of the Full Court of the Federal Court in Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212, specifically at [88] of Steward J’s reasons for judgment. In that paragraph, his Honour said it was necessary to “scrutinise evidence given by the taxpayer him or herself with care” but also that a taxpayer is not under any “special burden of proof”. While these statements were made in the context of revenue proceedings under Commonwealth law, both parties treated his Honour’s observations as relevant to revenue proceedings under the TA Act. I note that other observations made by Steward J in [88] concerning a taxpayer’s onus of proof have been referred to in other judgments of this Court in revenue proceedings: eg, Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249 at [119] (Richmond J); Bupa HI Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 1105 at [93] (Hmelnitsky J).

36. Section 101(1) of the TA Act provides this Court various powers it can exercise in dealing with an application for review. That section says:

101 Powers of court or tribunal on review

(1) The court or tribunal dealing with the application for review may do any one or more of the following—

(a) confirm or revoke the assessment or other decision to which the application relates,

(b) make an assessment or other decision in place of the assessment or other decision to which the application relates,

(c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

(d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

(e) make any further order as to costs or otherwise as it thinks fit.

Issue 1: Were the Confirmation Deeds declarations of trust under the Duties Act?

The law

37. The applicable law was not in dispute between the parties, though, unsurprisingly, there were differences in emphasis between the parties.

38. Section 8 of the Duties Act is the provision which imposes duty on certain transactions. Section 8 has been amended since the assessments in issue in these proceedings were first made, though not in a manner material to the resolution of this dispute. As at the time of the assessments by the Chief Commissioner, that section relevantly provided:

8 Imposition of duty on certain transactions concerning dutiable property

(1) This Chapter charges duty on—

(a) a transfer of dutiable property, and

(b) the following transactions—

…

(ii) a declaration of trust over dutiable property,

…

…

(2) Such a transfer or transaction is a dutiable transaction for the purposes of this Act.

(3) In this Chapter—

declaration of trust means any declaration (other than by a will or testamentary instrument) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons, or the purpose or purposes, mentioned in the declaration although the beneficial owner of the property, or the person entitled to appoint the property, may not have joined in or assented to the declaration.

39. Both parties cited as correct the summary provided by Williams J in Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 463 at [16]-[24] as to when there is a declaration of trust within the meaning of s 8 of the Duties Act. I gratefully adopt her Honour’s summary and for convenience will reproduce it below (including her Honour’s footnotes):

“[16] The principles to be applied in determining the main issue are well established and, for the most part, were not the subject of dispute between the parties. Those principles were considered and applied by the High Court most recently in Korda v Australian Executor Trustees (SA) Limited (Korda v AET) [(2015) 255 CLR 62; (2015) 89 ALJR 340; (2015) 317 ALR 225; (2015) 105 ACSR 498; (2015) 145 ALD 495; (2015) 12 ASTLR 306; (2015) 10 BFRA 182; [2015] HCA 6]. As French CJ said in that case: [Ibid at [3] (references omitted)]

‘The question whether an express trust exists must always be answered by reference to intention. An express trust cannot be created unless the person or persons creating it can be taken to have intended to do so. Absent, as in this case, an explicit declaration of such an intention, the court must determine whether intention is to be imputed. It does so by reference to the language of the documents or oral dealings having regard to the nature of the transactions and the circumstances attending the relationship between the parties.’

[17] Thus, the ascertainment of an express trust (including, as a first step, the ascertainment of the requisite intention to create that trust) depends on the construction of the transaction documents in accordance with the ordinary principles of contractual interpretation. The parties’ subjective intentions are not relevant. [Ibid, especially at [7]-[8] (French CJ) and [107]-[109] (Gageler J).]

[18] The principles of contractual interpretation are well established. As the majority of the High Court said in Electricity Generation Corporation v Woodside Energy Ltd: [(2014) 251 CLR 640; (2014) 88 ALJR 447; (2014) 306 ALR 25; (2014) 7 ARLR 361; [2014] HCA 7 at [35] (French CJ, Hayne, Crennan, and Kiefel JJ) (references omitted). See also Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; (2017) 91 ALJR 486; (2017) 343 ALR 58; [2017] NSW ConvR 56-377; [2017] V ConvR 54-888; [2017] HCA 12 at [16]-[17] (Kiefel, Bell, and Gordon JJ).]

‘The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result”. A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.’

[19] In Cherry v Steele-Park, [(2017) 96 NSWLR 548; (2017) 351 ALR 521; [2017] NSWCA 295] Leeming JA (with whom Gleeson and White JJA agreed) conducted an extensive review of relevant authority and concluded that it is not necessary to pass through an ‘ambiguity gateway’ before regard may be had to surrounding circumstances when construing a contract. [Ibid at [71] and [77]-[85] (Leeming JA, Gleeson JA agreeing) and the authorities there referred to] However, ‘[t]he starting point and the ending point of the construction of a written commercial contract is the language chosen by the parties to record their bargain’ and so there is ‘limited scope for evidence of surrounding circumstances to detract from the contractual text’. [Ibid at [72]-[73] and the authorities there referred to.] As Gleeson JA stated in Newey v Westpac Banking Corporation, with the concurrence of Basten and Meagher JJA: [[2014] NSWCA 319 at [91] (references omitted), referred to with approval in Cherry v Steele-Park, supra, at [73] (Leeming JA, Gleeson and White JJA agreeing)]

‘… there is no licence for “judicial rewriting” of an agreement… The ability of courts to give commercial agreements a commercial and business-like interpretation is constrained by the language used by the parties. If, after considering the contract as a whole and the background circumstances known to both parties, a court concludes that the language of a contract is unambiguous, the Court must give effect to that language unless to do so would give the contract an absurd operation…’

[20] Certainty of intention, subject matter, and object are required in order to create an express trust. [Korda v AET, especially at [7] (French CJ) and [204] (Keane J).] The identification of a commercial purpose that would be served by an express trust might be relevant to the existence of the requisite intention, but ‘that which is commercially desirable for one party is not, on that account, a commercial purpose of both.’ [Ibid at [53] (French CJ).] An express trust is not to be inferred or implied merely because a court thinks it is an appropriate means of protecting or creating an interest. [Ibid, especially at [10]-[11] (French CJ).]

[21] The main issue in these proceedings is not to be approached from a starting point of reluctance to infer the existence of an express trust, but nor is the language of the relevant documents to be strained to discover an intention to create a trust. As French CJ said in Korda v AET: [Ibid at [49]; see also [208] (Keane J)]

‘To eschew an historical reluctance is one thing. To construct intention out of straws plucked from textual and contextual breezes, some blowing in different directions, is quite another.’

[22] The Chief Commissioner’s submissions relied on the following statement from the judgment of Mason CJ, Deane, Toohey, and Gaudron JJ in Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation: [(1993) 178 CLR 145; (1993) 26 ATR 353; (1993) 117 ALR 27; (1993) 93 ATC 4835; (1993) 117 ATR 353; [1993] HCA 1 at 178 CLR 165-166 (references omitted)]

‘… unless there is something in the circumstances of the case to indicate otherwise, a person who has “the custody and administration of property on behalf of others” or who “has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit” is a trustee in the ordinary sense.’

[23] I reject LPC’s submission that this passage has no application to the determination of the main issue in these proceedings because it reflects an extended statutory definition of the term ‘trustee’ per s 6(1) of the Income Tax Assessment Act 1936 (Cth). It is plain from the passage itself, and from the text immediately following it, that their Honours were referring to a trustee ‘in the ordinary sense’ rather than to any statutory definition of a trust. That is how the passage appears to have been read by Bell, Gageler, and Keane JJ when their Honours cited it in Legal Services Board v Gillespie-Jones when referring to ‘orthodox trust analysis’ (albeit in an entirely different context). [(2013) 249 CLR 493; (2013) 87 ALJR 985; [2013] HCA 35 at [113]; see also Korda v AET at [206]-[207] (Keane J).]

[24] However, I accept LPC’s submission that the main issue cannot be answered merely by asking whether the DRA created a relationship of the kind referred to in the passage extracted above. As Mason CJ, Deane, Toohey and Gaudron JJ expressly stated in that passage, one has to consider all the circumstances. As both parties to these proceedings accepted, the critical question is ‘whether in substance a sufficient intention to create a trust has been manifested’ by the provisions of the DRA, construed in accordance with the ordinary principles of contractual interpretation. [Byrnes v Kendle (2011) 243 CLR 253; (2011) 85 ALJR 798; (2011) 279 ALR 212; (2011) 4 ASTLR 260; [2011] HCA 26 at [13]-[17] (French CJ) and [55]-[65] (Gummow and Hayne JJ).] If a relationship of the kind described above were created by the terms of the DRA, properly construed, that would be one factor relevant to the determination of that critical question.”

40. In Chief Commissioner of State Revenue v Benidorm Pty Ltd (2020) 104 NSWLR 232; [2020] NSWCA 285 (Benidorm), the Court of Appeal considered s 8 of the Duties Act. There, Leeming JA (with whom Meagher and Payne JJA agreed) observed that s 8 of the Duties Act proceeds on the basis that duty is now imposed on transactions rather than instruments as was the case under the previous duties legislation in this State: Benidorm at [80], [82] and [88]. Each of the transactions listed in s 8(1)(b) of the Duties Act denotes, as a matter of ordinary legal terminology, something which alters legal or equitable rights or obligations concerning property: Benidorm at [82]. Consequently, if an instrument merely acknowledged an existing state of affairs, then there is no dutiable transaction in relation to which duty can be charged under the Duties Act: Benidorm at [97] and [108].

41. I note in passing that in response to the Court of Appeal’s decision in Benidorm, a new s 8AA was inserted into the Duties Act in 2022 to expressly charge duty on a statement that purports to be a declaration of trust over dutiable property but merely has the effect of acknowledging that identified property vested, or to be vested, in the person making the statement is already held, or to be held, in trust for a person or purpose mentioned in the statement. However, that provision commenced after the Confirmation Deeds were executed and so does not affect this matter.

Consideration

42. I consider that the Confirmation Deeds are not declarations of trust within the meaning of the Duties Act.

43. An express trust requires certainty of intention, certainty of subject matter and certainty of object. There is certainty of subject matter in each Confirmation Deed – the subject matter is the relevant property held by the Taxpayer entering into the deed. The defined term “Property” in each deed is clearly defined. Similarly, there is certainty of object – the beneficiary of any trust that might be said to exist is clearly Al Maha. Al Maha is expressly identified in the Confirmation Deeds as the party who would hold the beneficial interest in the Properties and the party entitled to become the registered proprietor of the Properties on its request.

44. As I understood them, none of the Taxpayers’ submissions suggest I should not be satisfied there is certainty of object or certainty of subject matter. Rather, the real issue was as to whether there was certainty of intention. Whether that is so in this case will depend on the proper construction of the Confirmation Deeds.

45. Given the accepted starting and ending point of the construction of a written commercial contract is the text of the Confirmation Deeds, I will start there.

46. There is no express declaration of trust anywhere in the Confirmation Deeds. Obviously enough, that is not the end of the inquiry. However, I consider it a relevant starting observation. As Gageler J said in Korda v Australian Executor Trustees (SA) Limited (2015); [2015] HCA 6 at [109], where parties have refrained from contractual use of the terminology of trust, an intention to create a trust will be imputed to them only if, and to the extent that, a trust is the legal mechanism which is appropriate to give legal effect to the relationship, between the parties or between a party and a third party, as established or acknowledged by the express or implied terms of the contract.

Text

47. The language of the chapeaus to cll 3.1 and 3.2 suggest they are addressing the status quo. Clause 3.1 of the Confirmation Deeds starts by saying that the relevant Taxpayer “acknowledges and confirms” the matters listed in subcll (a)-(d). Clause 3.2 similarly says Al Maha “acknowledges and confirms” the matters listed in subcll (a)-(c). I accept the Taxpayers’ contention to the effect that, ordinarily, words like “acknowledge” and “confirm” tend to direct one’s attention to an existing state of affairs. In Benidorm at [36], Leeming JA said that an acknowledgement “ordinarily records a previously existing state of affairs”. Similarly, to confirm something is ordinarily to make an existing thing or state of affairs certain, or to affirm an existing state of affairs. I also accept the Taxpayers’ submissions that the chapeau to each clause controls the subclauses which follow. That is evident from the structure of the clauses.

48. The text of cl 3.1(a) also directs attention to the existing state of affairs. That clause says Al Maha “holds” the beneficial interest in the relevant property and “has held such beneficial interest” since a date in the past (namely, the Date of Acquisition). Read together, the use of words such as “holds” and “has held since [a past date]” reinforces the idea that the words “acknowledges and confirms” in the chapeau are being used to acknowledge and confirm whatever existing relationship there is between the parties. At the very least, those words to me do not seem aimed at creating some new legal relationship between the parties. Words like “holds” and “has held” state what the past was and present is. To me, read together, they do not work to affect the relationship between the parties going into the future.

49. Clause 3.1(c) similarly refers to how the relevant Taxpayer will “continue” to exercise and perform all the rights, duties and powers relating to the relevant Property only as directed by Al Maha. As the Taxpayers submitted, to continue something ordinarily means to maintain a preexisting state of affairs.

50. It follows from the previous two paragraphs that, as a matter purely of text, I do not accept the Chief Commissioner’s submissions that cll 3.1(a) and 3.1(c) manifest an intention to establish a trust relationship. I do not think those clauses are intended to split for the first time the legal and beneficial estates in the Properties nor intended to grant new rights in the way the Chief Commissioner sought to characterise these clauses as doing.

51. Clauses 3.1(b), (d) and 4.1 and the subclauses of 3.2 are different but in my opinion do not weigh in favour of concluding there was a declaration of trust by the Confirmation Deeds. Subclauses (b) and (d) of cl 3.1 and subcl (b) of cl 3.2 concern Al Maha’s entitlements to the Properties themselves and to the rent or any proceeds of sale derived from those properties.

52. If one accepts the Chief Commissioner’s characterisation of these subclauses as granting new rights to Al Maha, these clauses might be said to provide some indication of an intention to create a trust relationship. Clauses 3.1(d) and 3.2(b), requiring CCPL to “ the rent or proceeds of sale Al Maha” (emphasis added), uses language that, in isolation, is reminiscent of the basic notion of a trust, that one party holds property for the benefit of another. Similarly, Al Maha’s unqualified entitlement to a transfer to it of the Properties under cl 3.1(b) could arguably put the Taxpayers in a position akin to a bare trustee, as the Chief Commissioner submitted.

Context

57. I will now consider the context in which cll 3.1 and 3.2 of the Confirmation Deeds (the most material clauses, in my opinion) is found, ie, the remainder of the Confirmation Deeds. In my view, the broader documentary context serves to reinforce that the deeds do not show a sufficient intention to create a trust relationship. I have already addressed cl 4.1 in the previous section.

58. As to context, cl 2.1 expressly provides the “Background” section, which precedes the Operative Provisions, “forms part of [each Confirmation Deed] as though set out here [in the operative part] in full”. The Background sets out what had taken place to date with respect to the Properties. The Taxpayers drew attention to paragraph F of the Background section, which they submitted “reveals the understanding of the parties at the time they entered into them: that Al Maha held and always had held the beneficial interest in the Properties” (TWS-Closing at [51]). Further, and again as the Taxpayers’ submitted, paragraph F is the conclusion of the sequential recitation of facts which are “fixed on the past and, in particular, on past conduct consistent with a previously existing trust” (TWS-Closing at [51], emphasis in original). Neither party submitted that other parts of the Confirmation Deeds were useful context in construing the material clauses of the deeds (being cll 3.1 and 3.2).

59. In my opinion, the Background section of the Confirmation Deeds further strengthens the Taxpayers’ contentions that the Confirmation Deeds did not intend to alter the legal relations between the Taxpayers and Al Maha into the future through the creation of a trust relationship.

60. Paragraph F explicitly states what the parties desired to do through the Confirmation Deeds – namely to recognise and affirm in writing the relationship that they understood themselves to have been in at the time of the deeds. Arguably, given cl 3.1(a) is drafted in the same terms, this recital on its own does not add much, but it nonetheless does add weight to the Taxpayers’ arguments.

61. Paragraph F must be read with paragraphs A-E, being the background facts which ultimately culminate in paragraph F. What I consider to be the effect of paragraphs A-E requires some further explanation. As I understand the Taxpayers’ submissions (see TR P160 L45-P161 L14, especially P161 L6-14), the facts outlined in those paragraphs provide a basis to conclude there may have been a resulting trust over the Properties by reason of Al Maha’s funding of the purchase of the Properties. Thus, the Background section evidences that the parties to the Confirmation Deeds understood Al Maha was the beneficial owner of the Properties and justifies that understanding. This therefore provides a further reason for why cl 3.1(a) should merely be understood as confirming the status quo (or, more precisely, the status quo as understood by the parties) – the parties wanted to confirm there was a trust in circumstances “the parties objectively understood gave rise to a trust” (TR P162 L4-5) but where there was no trust deed.

Purpose and Surrounding Circumstances

64. It is convenient to address the parties’ submissions as to the purpose of the document, along with the circumstances surrounding the Confirmation Deeds, under the one heading. That is so mainly because the submissions in this case invoke the surrounding circumstances of the Confirmation Deeds as part of establishing the purpose they each submit the parties had.

65. I start by observing that paragraph F of the Background section provides an express purpose for the Confirmation Deeds – to acknowledge (and confirm, using the language of cl 3.1(a)) that Al Maha was the beneficial owner of the Properties from the date they were purchased. The Taxpayers submitted that I do not need to work through the evidence to try and determine whether the purpose stated in that paragraph is right or wrong, as “[i]t’s there” (TR P162 L13-15).

66. The Chief Commissioner’s submissions characterised the purpose of the Confirmation Deeds very differently, with reference to the circumstances surrounding the Confirmation Deeds. As summarised in CCWS-Closing at [48], the Chief Commissioner submitted that the Confirmation Deeds were entered into as part of an arrangement between the Taxpayers and Al Maha under which Al Maha would reduce its income tax liability by claiming that its expenses included an amount representing the decrease in the value of the Properties. As part of the arrangements, the Taxpayers executed the Confirmation Deeds to establish they held the Properties on trust from the date the relevant properties were acquired. At [73] of CCWS-Closing, the Chief Commissioner submitted that it was “imperative” for Mr Bechara to establish Al Maha held the beneficial interest in the Properties from the date they were acquired, through the Confirmation Deeds, so Al Maha could benefit from the reduction in its income tax liability.

67. Some preliminary observations should be made about the use of surrounding circumstances in this case. First, the surrounding circumstances which can legitimately be taken into account in construing documents like the Confirmation Deeds are those which are known to all parties to the document: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37 (Mount Bruce) at [50] (French CJ, Nettle and Gordon JJ); Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352; [1982] HCA 24 (Mason J); HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634; [2020] NSWCA 296 at [56] (Meagher JA and Ball J). Determining what “both parties” to each of the Confirmation Deeds knew in this case is a somewhat artificial exercise. That is because at all material times, both Al Maha and each of the Taxpayers only had one director – Mr Bechara. As a matter of logic, whatever Mr Bechara would have known is something all parties to the Confirmation Deeds would have known. Certainly, neither side in this dispute suggested otherwise.

Conclusion

90. For the reasons stated above, the Taxpayers have succeeded in demonstrating the Confirmation Deeds are not declarations of trust within the meaning of the Duties Act. It follows that they were not dutiable transactions. The Taxpayers are therefore entitled to have the Duties Notices of Assessments under review revoked.

Issue 2: What was the dutiable value of the Properties?

91. The need to determine the issue of the dutiable value of the Properties only arose if I determined the Taxpayers were liable to pay duty. As a consequence of my conclusion that the Confirmation Deeds were not declarations of trust, this issue does not strictly arise. However, I will deal with this claim in the alternative in accordance with the general principle that a trial judge should determine all issues in order to assist the appeal process and obviate the need for a retrial: Transport for NSW v Hunt Leather Pty Ltd (2024) 115 NSWLR 489; [2024] NSWCA 227 at [99] (Bell CJ, Leeming and Mitchelmore JJA); see also Kronenberg v Macaulay [2025] NSWCA 195 at [20]-[22] (Leeming JA, Mitchelmore and Free JJA agreeing).

92. By the end of the case, the value of two of the Properties was agreed by the parties, based on the agreement of the expert witnesses each had called on this component of the case. The value of 2 Farrow Road was agreed to be $16,054,545. The value of 8 Farrow Road was agreed to be $14,310,000. Nothing further needs to be said about those two properties.

The relevant principles

93. Before dealing with the valuation evidence which was put before the Court in relation to the two properties whose dutiable value was still in dispute, I will first set out the principles which generally govern the valuation exercise in this case. Nothing of what is set out below regarding the applicable principles appears to have been in dispute.

94. “In assessing value, the starting point is the particular statutory scheme. That scheme provides the legal context in which the valuation exercise is to be undertaken and that context determines the relevant principles of valuation to be applied”: Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585; [2018] HCA 59 (Placer Dome) at [13] (Kiefel CJ, Bell, Nettle and Gordon JJ).

95. Section 21(1) of the Duties Act provides that the dutiable value of property that is subject to a dutiable transaction is the greater of:

96. the consideration (if any) for the dutiable transaction (being the amount of a monetary consideration or the value of a non-monetary consideration); and

97. the unencumbered value of the dutiable property.

98. The unencumbered value of dutiable property is the value of the property determined without regard to any encumbrance to which the property is subject: Duties Act s 23(1).

99. Beyond what is set out in s 23(1), the Duties Act itself does not expressly set out any principles as to how dutiable property is to be valued. Justice Payne, in SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue (2021) 113 ATR 24; [2021] NSWSC 395 at [168] said that the definition in s 23(1) “is generally accepted as representing ‘market value’”, which means the valuation principles emerging from Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 (Spencer) are to be applied. Both parties proceeded on the basis that the valuation exercise in this case should proceed in accordance with those principles.

100. What principles of valuation emerge from Spencer? In Placer Dome, at [17]-[18], Kiefel CJ, Bell, Nettle and Gordon JJ summarised what Spencer stands for as follows (footnotes omitted):

“[17] … There was no dispute that the “ordinary valuation principles” were those stated in Spencer: the value is the price which a hypothetical willing but not anxious seller could reasonably expect to obtain and a hypothetical willing but not anxious buyer could reasonably expect to pay after proper negotiations between them have concluded and without overlooking any ordinary business consideration.

[18] And there was no dispute that those ordinary valuation principles required both the seller and the buyer to be taken to be ‘perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property’”

See also Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at [51] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ).

99. A liability for duty charged under the Duties Act arises when a transfer of dutiable property occurs, but if a transfer of dutiable property is effected by an instrument, liability for duty arises when the instrument is first executed: Duties Act, s 12(1)-(2). The relevant date at which the dutiable value of the Properties is to be assessed is therefore the date of the declaration of trust (had I concluded there was a trust). Here, that would be 24 June 2020, when the Confirmation Deeds were executed. In the balance of this section, I will occasionally refer to 24 June 2020 as the valuation date.

The expert evidence

100. The Court received evidence from two expert valuers, one engaged by each side in this dispute. The Taxpayers relied on reports by Mr Angelo Konidaris of Titan Advisory Group. The Chief Commissioner relied on reports by Mr Peter Adlington of Walsh and Monaghan. According to their respective curricula vitae, both valuers have much experience in valuing properties. There was certainly no suggestion that, generally speaking (the need for this qualification will become apparent later), each expert was not appropriately qualified to provide valuation evidence of the kind necessary in this case.

101. With respect to 2B Hill Road, the expert valuation evidence comprised:

102. two reports by Mr Konidaris, dated 26 March 2024 and 21 February 2025;

103. a report by Mr Adlington, dated 1 July 2024; and

104. a joint report by Mr Adlington and Mr Konidaris dated 25 June 2025 (the Riveredge Joint Report).

105. With respect to the Warwick Farm Property, the expert valuation evidence comprised:

106. two reports by Mr Konidaris, dated 26 March 2024 and 21 February 2025;

107. a report by Mr Adlington, dated 9 July 2024; and

108. a joint report by Mr Adlington and Mr Konidaris (the report itself is undated, but the index to the Court Book suggests it was finalised on 27 June 2025) (the WFC Joint Report).

109. Both Mr Adlington and Mr Konidaris were cross-examined in a joint session.

110. The method of valuation adopted by the expert valuers in these proceedings was described by the Chief Commissioner as the “direct comparison approach”. That approach was adopted by both experts in their respective reports, as well as in the joint reports prepared. That method of valuation involves finding sales of properties similar to the property being valued, deriving a rate paid per square metre for a given comparator property and then adjusting that rate to account for differences between the comparator property and the subject property being valued (eg, to account for differences in location, size, shape, market movements, etc). Using the range of adjusted rates calculated for each comparator property, the experts then come to a final adjusted price per square metre, which is then applied to the property being valued to reach a final figure.

111. Both experts agreed the “direct comparison approach” was the appropriate approach to valuation in this case and, unsurprisingly, no party submitted that was an inappropriate approach to follow. For my part, I consider this an appropriate approach in the circumstances of this case.

Consideration

107. For the reasons which follow, had it been necessary to decide, I would have found that I could not accept both the Taxpayers’ and the Chief Commissioner’s valuation evidence concerning 2B Hill Road and the Warwick Farm Property. The resolution of this issue would then ultimately have been a matter of onus. I would have concluded the Taxpayers would have failed to meet their onus in proving the dutiable value of those two properties was different from the Chief Commissioner’s assessment of dutiable value, and so the Chief Commissioner would have succeeded on this issue (but not because I accepted the expert evidence put by him).

108. I will address the specific issues as to the valuation evidence concerning each of 2B Hill Road and the Warwick Farm Property in turn. As my conclusion on issue 1 means this issue is being decided in the alternative, I will state my reasons as to issue 2 somewhat more succinctly than I otherwise might have.

2B Hill Road

109. For 2B Hill Road, Mr Adlington considered the value of the property as at the valuation date was $30,290,000, whereas Mr Konidaris valued the property at $6,635,000 as at the valuation date. For comparison, the purchase price (and the value used as the dutiable value of the property by the Chief Commissioner in his assessment in 2021) paid by Riveredge was $10,000,000.

110. As stated earlier, the differences in valuations are the result of not agreeing on the size of the adjustments that needed to be made between comparator properties and the subject property being valued. For 2B Hill Road, the material differences between the valuers included:

111. disagreement as to the risk or likelihood that the Land and Environment Court of New South Wales would grant development consent in the context of a disputed application which was, at the time of the valuation date, adjourned part-heard before that Court (and thus, disagreement as to how that must be accounted for in the adjustments);

112. the potential floor space available for development; and

113. the impact on the value of 2B Hill Road of a nearby gas pipeline.

The above is not to be taken as a complete summary of the areas of disagreement, but it was those areas which, to me, appear to have resulted in the biggest differences between the parties, as most clearly articulated in the Riveredge Joint Report.

111. While it may have been possible to reach a conclusion as to how the first and second points of difference ought to be resolved, the evidence concerning the third of these issues is dispositive. By this, I mean that because I consider I cannot accept the evidence going to the third issue, that I am otherwise unable to reach a conclusion as to what the value of 2B Hill Road actually is. As Mr Konidaris described it in cross-examination, this issue was the “single largest difference” between the valuers (TR P82 L22-29). I acknowledge that both the Taxpayers and the Chief Commissioner made extensive submissions in relation to the first and second points of difference.

112. The differences in opinion as to what would have been the available floor space as at the valuation date and how a hypothetical prudent purchaser might have accounted for the risk of the litigated development consent application in the Land and Environment Court (which appear to be interrelated issues) impact the end of the process described at [104] above. It is after the experts have derived their final adjusted price per square metre that the difference in the available area for development becomes relevant, given it is this area to which the adjusted rate per square metre is applied to arrive at a final figure.

113. By contrast, the differences in opinion as to the impact on the value of 2B Hill Road of a nearby gas pipeline affects how each of the experts arrive at adjusted rates per square metre for each of the comparator properties, which of course then leads to the final adjusted rate to be applied to the subject property. It is the adjustments (downwards) from the prices of the comparator properties which are referable to the gas pipeline which forms the principal difference in the adjusted rates per square metre calculated by the experts. Absent the adjustments for “construction risk” as it is called in the Riveredge Joint Report, the adjusted rates calculated for comparator properties is roughly the same. The adjustments referable to market movement, location and size in the joint report are in fact equal between the two experts. The adjustment referable to differences in shape are not equal but do not seem to lead to huge differences. The experts had also agreed that some costs for remediation of the site was necessary to deal with contamination, and so those costs needed to be accounted for. The Riveredge Joint Report indicates the valuers agreed on what the quantum of those remediation costs would be and deducted them at the end.

114. It is appropriate then to explain what the issue concerning the gas pipeline actually is. There is a gas pipeline running through the land of 2B Hill Road which is about 25 metres away at the closest point of the land which is capable of development. As at the valuation date, the pipeline appears to have been owned and operated by an entity known as “Viva Energy”, though Caltex also appears to either own or operate or otherwise be associated with the pipeline. There is also another gas pipeline owned or operated by or otherwise associated with entities known as “Qenos” and “Jemena”, which is about 40 metres away from the closest point of the land which could be developed. No specific attention in the evidence or the submissions was given to this second pipeline. Accordingly, references to “the gas pipeline” or similar below should be understood as references to the Viva Energy/Caltex pipeline.

“The impact of the proximity to pipeline is considered significant, especially when considering basement excavation, and the close proximity to the pipeline that will be developed.

Although it is considered likely that the remaining parcel that is unconstrained by the pipeline could be developed, the additional cost incurred to safely develop the land for without causing damage to the existing pipeline infrastructure would be a critical consideration to a likely purchaser.

This additional cost could be in the form of specialist excavation contractors, additional holding costs to achieve an approval and potential contingencies to allow for potential damage of a pipeline.”

116. In the Riveredge Joint Report, Mr Konidaris identified several risks posed by the pipeline that he opined a hypothetical prudent purchaser would consider when formulating an offer to buy 2B Hill Road, including:

117. the ability to procure a builder to construct the development;

118. difficulties in obtaining insurance, or possibly increased insurance costs compared to if there was no pipeline;

119. additional costs referable to the need to contract with consultants to produce extra safety documentation and to have specialist technicians;

120. costs associated with consulting and executing agreements with the pipeline owners; and

121. holding costs and time delays associated with extended planning and construction periods.

122. To account for these risks that Mr Konidaris identified, he considered that there would be a cost penalty of approximately $765 per square metre referable to the gas pipeline. Mr Konidaris reached that number by using a construction costs guide for the construction cost of a multi-unit high density residential apartment development in Sydney (which was said to be in the range of $2,445-$2,635 per square metre). He then took the mid-point of the range, $2,540 and then calculated 30% of that figure, and rounded it to $765. That 30% figure represented an “additional contingency cost” to account for the added cost, complexity and time resulting from issues referable to the pipeline.

123. By contrast, Mr Adlington disagreed and did not consider the impact of the pipeline to be significant. He opined that it was unlikely that the pipeline would affect the market value of 2B Hill Road. In the Riveredge Joint Report, Mr Adlington accepted that there would be some costs involved in satisfying conditions of Viva Energy (and perhaps Caltex too) that a hypothetical purchaser of the land would need to comply with as part of any development on 2B Hill Road. The evidence of such conditions comes from the minutes of a meeting between Viva Energy and representatives of Mr Bechara’s property development business on 12 May 2020, just over one month before the valuation date. However, he instead chose to make a 2.5% downwards adjustment to the rates per square metre derived from the sales of comparator properties. This resulted in very small changes to the adjusted rates derived from comparing the sales of other properties.

124. Both experts, however, conceded in cross-examination that they were not expert engineers nor quantity surveyors. That concession is critical. It leaves the Court without a solid evidentiary basis to quantify what impact the gas pipeline might have on the value of 2B Hill Road.

125. By way of example of the lack of appropriate specialised knowledge of the experts in relation to the risks posed by the pipeline exposed in the course of cross-examination, the following exchange took place between counsel for the Chief Commissioner and Mr Konidaris (TR P72 L1-35):

“BALAFOUTIS: … So let’s turn to page 8411. And the third paragraph there Mr Adlington notes that there’s a 25-metre distance between the pipeline and the corners of the buildings. And he says given that distance, he cannot see how the physical construction of the building basement wall would be affected by a pipeline 15 metres away. Do you agree?

WITNESS KONIDARIS: I don’t think I’m qualified to answer that question.

BALAFOUTIS: Okay. So you’re not qualified to inform the Court whether a pipeline 25 metres away from a building will result in increased costs to the building?

WITNESS KONIDARIS: No, that’s an integer that would be an input by the market. But in terms of where they would influence the pipeline 25 metres away, I’m not a consultant engineer to be able to accurately say whether 25 metres is enough or it is still a risk or it is not a risk. So most builders would look at it on a worst case scenario basis. And I’ve spoken with several that in relation to this particular case.

BALAFOUTIS: But you don’t have any expertise about whether it would increase the cost of the development or not. Is that correct?

WITNESS KONIDARIS: It would absolutely increase the cost of the development.

BALAFOUTIS: You don’t have any expertise about how much it would increase the cost of the development?

WITNESS KONIDARIS: Well, that’s why I go to people like builders and ask them what the inputs would be.

BALAFOUTIS: But you personally don’t have any expertise. Is that correct, on that issue?

WITNESS KONIDARIS: No, I’m not a quantity surveyor. No.”

121. Counsel for the Chief Commissioner further explored with Mr Konidaris the basis of his estimate of a 30% increase in costs associated with the risks posed by the pipeline, which was followed by some invited commentary from Mr Adlington (TR P79 L1-23):

“WITNESS KONIDARIS: … So in my experience, the adjustment for 30%, I think, is warranted.

BALAFOUTIS: A hypothetical purchaser would do more than take a stab at it. They would consult quantity surveyors and engineers to reach an informed decision. Wouldn’t they?

WITNESS KONIDARIS: Yes. And I was doing the best I could with the information I had at the time. If I had quantity surveyors’ evidence, I would have inputted it into my calculation.

BALAFOUTIS: So you didn’t have that, so you had to take a bit of a stab at it. Is that fair?

WITNESS KONIDARIS: A bit of a stab, I don’t think, is probably the right choice of words, but I would say it’s a best guess.

BALAFOUTIS: Mr Adlington, do you have any comment on that?

WITNESS ADLINGTON: I guess my issue is where the 25% to 35% increase in a rate per square metre that relates to the total construction of a residential flat building. The increase in costs, I would imagine - and again, I’m not an expert on this either …”

122. While Mr Adlington’s report appeared to proceed on the basis that no adjustment needed to be made to account for the gas pipeline near the land capable of development, his opinion as expressed in the Riveredge Joint Report included an acceptance that there would be additional construction costs associated with the pipeline, given Viva Energy’s requirements as part of giving its approval or consent. Even if Mr Adlington had not subsequently accounted for the pipeline in the Riveredge Joint Report, I would have rejected an approach which took as its premise the idea that the pipeline would have had zero impact on the value of 2B Hill Road as at the valuation date. Even without having received expert evidence from an engineer or quantity surveyor, the perfect knowledge of a hypothetical prudent purchaser as at the valuation date would include the minutes of the meeting with Viva Energy in May 2020. That evidence showed Viva Energy would, for example, require its preferred safety consultants to be engaged, require a commercial agreement to be signed before works could be commenced and that the costs of an engineering consultant be managed by the developer making use of the land. That alone suggests the gas pipeline would have some impact on the value of the property. Even Mr Adlington conceded in cross-examination that a hypothetical prudent purchaser would recognise risk with respect to the ability of a developer to action a development and remain consistent with any approvals provided by the relevant gas pipeline operator (TR P103 L37-43).

123. However, as both the Taxpayers’ submissions (at TWS-Closing [104]) and the Chief Commissioner’s submissions (at CCWS-Closing [129]-[130]) acknowledge, the Court has no reason to accept either the evidence of Mr Adlington or Mr Konidaris with respect to what impact the gas pipeline might have on the value of 2B Hill Road. The reason for that is because neither expert has the expertise to opine on the subject themselves and they were not given expert evidence from an engineer or quantity surveyor which they may have taken into account in their valuations. Mr Konidaris frankly and admirably acknowledged that he was taking a “best guess” with the information he had as to what the cost penalty of the pipeline might be and that he would have taken account of evidence from other experts if he had such evidence (TR P79 L4-16). Mr Adlington similarly said he could not comment on the costs associated with developing around the pipeline “without knowing what the additional construction costs would be and without the engineering [sic]” (TR P76 L49-50).

124. I therefore would have accepted the submissions from each side urging me to reject the evidence going to the impact of the valuation from their opponent’s expert evidence, which on both sides boiled down to the submission the experts were not qualified to give the relevant evidence. I also accordingly would have rejected the submissions by each side urging me to accept the expert evidence relied on by them to support their case, for the same reason.

The Warwick Farm Property

129. For the Warwick Farm Property, Mr Adlington considered the value of the property as at the valuation date was $20,750,000 in the WFC Joint Report (which was revised down from an initial valuation of $21,880,000 in his report of 10 July 2024), whereas Mr Konidaris valued the property at $9,500,000 as at the valuation date. For comparison, the purchase price (and the value used as the dutiable value of the property by the Chief Commissioner in his assessment in 2021) paid by WFC was $23,500,000. I note even the higher value reached by the valuer relied on by the Chief Commissioner is in fact lower than the purchase price paid by WFC.

130. Like the valuations for 2B Hill Road, the differences in valuations for this property are the result of not agreeing on the size of the adjustments that needed to be made between comparator properties and the subject property being valued. The most material differences between the valuers, and the ones which the submissions of both sides focused on, were:

131. whether there should be a discount on account of any development on the property being two storeys; and

132. the discount necessary to account for the costs of constructing a suspended concrete slab.

There were other differences, including some disagreement as to which sales were appropriate for comparison, how to account for market movement and the impact of a sewerage pipeline running through the property.

131. Similarly to my consideration of the valuation evidence concerning 2B Hill Road, while it may have been possible to reach a conclusion as to how the first point of difference ought to be resolved, the evidence concerning the second of these issues is dispositive.

132. The Warwick Farm Property is built on land which is flood prone. It is agreed that the land is at a “medium risk” of flooding. The experts were agreed that the highest and best use of the land would be a mixed use development for specialised retail, food and drink, child care and health services facilities, along with associated signage and carparking. The experts agree that the consequence of the flood prone nature of the land is that any subsequent development on the land to make the best use of it (the land is currently vacant and was vacant at the valuation date) would require the construction of a suspended concrete slab, as opposed to a slab which was not suspended. The need for a suspended slab arises from a need to have the finished floor level be above a certain height, given the risk of flooding on the subject land. The experts also agree that this would increase the costs of development and so would necessarily cause a discount in the value of the Warwick Farm Property. Up to this point, this evidence can be accepted.

133. However, it is the next step, actually calculating the appropriate adjustment to account for the cost of a suspended concrete slab, where the issue arises. As has already been established earlier in these reasons for judgment, Mr Adlington and Mr Konidaris are not engineers or quantity surveyors. This means they are not qualified to opine on what the quantum of additional construction costs referable to the need for a suspended slab would be. I would again have accepted the submissions of each side urging me to reject their opponent’s valuation evidence in relation to the cost of the suspended concrete slab and again have rejected each side’s submissions urging me to instead accept their own valuation evidence in relation to the additional costs of a suspended slab. Neither valuer is qualified to give that evidence, which would need to come from a quantity surveying or engineering expert.

134. By way of example of the lack of appropriate specialised knowledge of the experts in relation to the suspended concrete slab issue, as exposed in the course of cross-examination, the following exchange took place between counsel for the Chief Commissioner and Mr Konidaris, followed by some invited commentary from Mr Adlington (TR P125 L4-8, P127 L1-24):

“BALAFOUTIS: And, Mr Konidaris, what you’ve done is, while Mr Adlington has adjusted the prices by 10% to account for the increased cost of suspended slab, you’ve doubled that. Is that right? You’ve adjusted the prices by 20%.

WITNESS KONIDARIS: Yes. And I’ve tried to reconcile that using Rawlinsons …

BALAFOUTIS: And that’s an area that you, not being an expert quantity surveyor or engineer, cannot inform the Court how much that would cost.

WITNESS KONIDARIS: No. That’s why I made an arbitrary adjustment of an extra 10% to allow for that.

BALAFOUTIS: And that arbitrary judgment, it’s not based on your expertise, it’s a guess.

WITNESS KONIDARIS: Well, it’s closer to zero - it’s closer to 10% than it would be to zero, I would have thought.

BALAFOUTIS: You don’t know that, do you, because you have no expertise in this.

WITNESS KONIDARIS: I’m not an engineer. No.

BALAFOUTIS: Mr Adlington, do you have any comment on that?

WITNESS ADLINGTON: I guess, initially, I couldn’t see where concrete was mentioned anywhere else in Rawlinson, so I can’t comment on what Mr Konidaris has talked about there. I guess my comment would be, again, without being an engineer …”

135. I am thus in a similar position as I was when considering the valuation evidence about 2B Hill Road. There is a factor that everyone accepts will affect the value of the property, namely, the costs associated with a suspended concrete slab needing to be constructed. But there is also no evidence which I can use to rationally make adjustments to the valuations reached by either valuer to account for the costs associated with the suspended slab, given the need for expert evidence to make such adjustments on a material issue. Again, even if I had accepted other aspects of Mr Konidaris’ methodology (and I again record expressly that I have not rejected or accepted the balance of his approach, given I have not considered it even in the alternative), I would not have been satisfied that Mr Konidaris’ final adjusted rate per square metre was appropriate given I would have rejected his adjustments referable to the suspended slab.

136. Consequently, and like with the valuation of 2B Hill Road, I therefore would not have been satisfied that the Taxpayers had discharged their onus under s 100(3) of the TA Act to show the assessment of duty payable with respect to 2B Hill Road was excessive.

Costs

137. The Taxpayers have been successful in the proceedings. The usual rule as to costs would suggest that costs should follow the event in each proceeding: Uniform Civil Procedure Rules 2005 (NSW) r 42.1. The Taxpayers sought their costs in accordance with the usual order, as reflected in their proposed orders sent to my Chambers, at my request, after the hearing had concluded.

138. However, the Chief Commissioner had indicated during the hearing that he wished to be heard on costs whatever the outcome. He foreshadowed on day two of the hearing that it may be necessary to deal separately with the costs that had been incurred into issues which were ultimately abandoned by the Taxpayers, as earlier recounted in these reasons (see TR P36 L45-P37 L1). In deference to that request, I will not make any costs orders for the moment and instead give the parties the opportunity to either come to an agreed position on costs or to make submissions on costs. A timetable for the resolution of the issue of costs is provided for in the orders I have made.

Orders

139. For the reasons set out above, I make the following orders in each of proceedings 2022/00385284; 2022/00385988; 2022/00385268; and 2022/00386018:

140. The Duties Notice of Assessment issued by the defendant to the plaintiff on 3 November 2021 is revoked.

141. Subject to order 3 below, the parties are to provide by email to the Chambers of Bennett J agreed short minutes of order to resolve the issue of costs by 4:00pm on 13 February 2026.

142. If agreement as to costs is unable to be reached:

(a) Any party wishing to make a submission as to the appropriate costs order is to provide brief written submissions not exceeding 5 pages by email to the Chambers of Bennett J and serve them on the opposing side by 4:00pm on 13 February 2026. (b) Any written submissions in reply not exceeding 5 pages on the issue of costs are to be provided by email to the Chambers of Bennett J and served on the opposing side by 4:00pm on 20 February 2026.

4. Subject to any further order, the issue of costs will be dealt with on the papers.
5. The Exhibits are to be returned.

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Endnotes

Briefly explained, the reason for the reduced income tax liability is that the value of each of the Properties was being written down, and the reductions in value could then be treated as a deduction used to reduce Al Maha’s taxable income, but only if Al Maha were the beneficial owners of the Properties.

I infer the reason Al Maha would receive a benefit in the way theorised by the parties if the Properties were held on trust for it is that by reason of it being a beneficiary under a trust, Al Maha is taken to hold the Properties as trading stock under ss 70-10(1) and 70-35. The legal basis for that last step was not explained in the submissions I received but given both sides proceeded on the basis this was so, I will proceed in the way the parties proceeded.

Amendments

23 December 2025

[56] - added words "does not" after "Deeds"