The Repayment Amount was defined to mean $1,670,928.
11 The settlement statement showed purchase price, deposit and balance of purchase price of $21,850,000 to which adjustments were made. The final adjustment was: "Less repayment amount $1,670,928."
12 Again the deed required the vendor to provide Oakland with a letter, which it did. The letter, addressed to the office of the Chief Commissioner, included the following statement:
"We confirm that an amount of $1,670,928 has been repaid to Oakland Property Holdings Pty Limited and applied in reduction of the purchase price of the property sold."
13 The valuers put a figure of $22,000,000 on the unencumbered value of the Macquarie Park land, which, again, was not challenged by the Chief Commissioner.
14 Oakland submits that duty should have been charged on $22,000,000 being greater than the consideration for the dutiable transaction that Oakland maintained was the net figure of $21,329,072 after deducting the Repayment Amount.
Analysis
15 In Archibald Howie Pty Ltd v Commissioner of Stamp Duties (NSW) (1948) 77 CLR 143 at 152, Dixon J said of the word "consideration" in the context of the Stamp Duties Act 1920, that it should receive the wider meaning or operation that belongs to it in conveyancing rather than the more precise meaning of the law of simple contracts. Consideration was the money or value passing which moved the conveyance or transfer.
16 In Shop and Store Developments Ltd v Commissioners of Inland Revenue [1967] 1 AC 472 at 503, Lord Wilberforce said:
"In the first place, the phrase "consideration for the transfer or conveyance" seems to me to refer clearly and naturally to that which passed to the transferor company "for" the transferred properties."
17 Both these passages were endorsed by the majority of the High Court in Chief Commissioner of State Revenue (New South Wales) v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 221 CLR 496 at [71]-[72] where their Honours concluded:
"The criterion in the Act of consideration "for" the transaction, being the Agreement for the sale and transfer of the Shares to the Purchaser, upon whom s 13 imposes the liability to pay the duty, looks to what was received by the Vendors so as to move the transfers to the Purchaser as stipulated in the Agreement."
18 Oakland submitted that the mere form of the documents and whether comprised in one instrument or, as here, in a contact for sale and a deed was not determinative. The court could look at the real nature or substance of the transaction in order to ascertain whether the instruments are properly characterised by their purported description and the form they take. Reference was made to what was said by Phillips JA in Coles Myer Ltd v Commissioner of State Revenue [1998] 4 VR 728 at 746.
19 It was submitted that the "rebates" in each case effectively reduced the consideration for the transaction with the effect that duty should have been determined by reference to the net amount in the case of the Chatswood property and the unencumbered value with respect to the Macquarie Park property.
20 The fact that on each settlement the "rebate" was set off so that cheques for a net amount were drawn, cannot alter the proper construction of the contracts for sale and the deeds. Similar considerations apply to the vendors' letters. Their opinions cannot influence the proper construction of the documents in question.
21 True it is that the economic effect of the transactions was that Oakland was out of pocket by the net amount in each case. But consideration for the purposes of the Duties Act, s 21(1)(a) is not a matter of economic equivalence. It is question of determining whether the deeds, upon their proper construction reduced the stated consideration in the contracts for sale.
22 The amounts payable under the deeds were not expressed to be in reduction of the purchase price. The deeds were couched in terms that if the balance of the purchase price was paid, the vendors would make the payments to which they had agreed. What was contemplated, then, in each transaction was the payment of the balance of the purchase price by Oakland. That is highly suggestive of two separate transactions in each case: one for the purchase of the land; the other a payment by the vendor to offset fitout costs and the like.
23 In the case of the deed with respect to the Macquarie Park property, the addition of the words: "representing a partial repayment of the Purchase Price" cannot dictate the conclusion that that is what the payment was.
24 And, in any event, a partial refund of purchase price is different from a rebate of the purchase price. A rebate is an allowance similar to a discount, which has the effect of reducing the purchase price before payment of it. A refund occurs after the purchase price has been paid by a payment from vendor to purchaser. In the former case there is but one transaction. In the latter case there are two transactions.
25 And the latter is the present situation. In each case, under one transaction Oakland was obliged to pay the purchase price under the contract for sale while under another transaction, the vendor was obliged to pay Oakland upon completion of the first transaction.
26 This interpretation of the provision in the deeds is enforced by their second recitals. They state that provided the contracts for sale are completed in accordance with their terms, the vendors agree to make the payments.
27 Thus, if there was no completion of the transactions in accordance with the terms of the contracts for sale, there was no obligation on the vendors to make the payments.
28 The moneys payable under the two deeds were not at large. Oakland was obliged to utilise the payments to offset fit out rebates and the like. This is in contrast to a refund of purchase price where the purchaser is entitled to use the money as seen fit.
29 The payments under the deeds were neither rebates of the purchase price nor refunds of the purchase price. The payments were, as the deeds, in ordinary English provided, consideration for Oakland's promise to use the moneys to offset any fit out rebates and the like it was required to extend to tenants of the properties.
Conclusion
30 In the case of the Chatswood property, Oakland has failed to establish that the Chief Commissioner ought to have calculated duty on the amount of $24,875,000 being the purchase price of $26,500,000 less the payment under the deed of $1,625,000.
31 The Chief Commissioner was entitled to assess duty on $26,500,000 as the consideration for the dutiable transaction under the Duties Act, s 21(1)(a), it being greater than the unencumbered value of the Chatswood property of $22,500,000.
32 With respect to the Macquarie Park property, Oakland has failed to establish that the consideration for the dutiable transaction under the Duties Act, s 21(1)(a) was $21,329,072, being the purchase price of $23,000,000 less the payment under the deed of $1,670,928 so that the Chief Commissioner ought to have calculated duty on the amount of $22,000,000 under s 21(1)(b) on the basis that the unencumbered value of the property was greater than the consideration.
33 The Chief Commissioner was entitled to assess duty on $23,000,000 as the consideration for the dutiable transaction under the Duties Act, s 21(1)(a) it being greater than the unencumbered value of the Macquarie Park property of $22,000,000.
34 The summons is dismissed with costs.