FEDERAL COURT OF AUSTRALIA Coles Supermarkets Pty Ltd v Westley Nominees Pty Ltd [2005] FCA 839 TAXATION – GST – transitional provisions – lease entered before 8 July 1999 and spanning 1 July 2000 – whether lease provides for a "review opportunity" – whether a taxable supply – consideration for the supply – whether supply – whether the respondents able to invoke the provisions of Div 2 of Pt 3 of A New Tax System (Goods and Services Tax Transition) Act 1999 (Cth) – construction of lease. PRACTICE AND PROCEDURE – whether relief should be refused because the Commissioner of Taxation was not a party – where Commissioner aware of proceedings and gave private ruling that the applicant's argument supported – dispute involved proper construction of the lease and the consideration for the lease – relief might be granted in the absence of the Commissioner. WORDS AND PHRASES – "consideration", "general review", "in connection with" A New Tax System (Goods and Services Tax Transition) Act 1999 (Cth), ss 4, 5, 6, 7, 12, 13, 15A, 15C, 15K, 15L, 15M A New Tax System (Goods and Services Tax) Act 1999 (Cth) ss 1-2, 7-1, 7-5, 7-10, 7-15, 9-5, 9-10, 9-15, 9-40, 9-70, 9-75, 11-5, 11-10, 11-20, 11-25, 23-5, 29-70, 156-22, 195-1 Taxation Administration Act 1953 (Cth), s 37 Tax Laws Amendment (Long‑term Non‑reviewable Contracts) Act 2005 (Cth) Property Law Act 1974 (Qld), 55, 117, 118; CSR Ltd v Hornsby Shire Council 2004 ATC 4966; [2004] NSWSC 946,distinguished ACP Publishing Pty Ltd v Commissioner of Taxation [2005] FCAFC 57, referred to Case M58 (1990) 12 NZTC 2333, referred to Orti‑Tullo v Sadek 2001 ATC 4688; [2001] NSWSC 855, referred to DB Rreef Funds Management Ltd v Commissioner of Taxation [2005] FCA 509, considered Commissioner of State Revenue v Price Brent Services Pty Ltd [1995] 2 VR 582, considered Murray Goulburn Co‑operative Co Ltd v Cobram Laundry Service Pty Ltd [2001] VSCA 57, followed The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429, cited Pebruk Nominees Pty Ltd v Woolworths (Victoria) Pty Ltd [2003] TASSC 94, cited O'Grady v The Northern Queensland Company Limited (1990) 169 CLR 356, referred to PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301, referred to Federal Commissioner of Taxation v Scully (2000) 201 CLR 148, referred to The Workers' Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642, referred to G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation 2000 96 FCR 402, referred to Harris v Commissioner of Taxation [2002] FCAFC 226, referred to Smith v Federal Commissioner of Taxation (1987) 164, referred to News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410, referred to Explanatory Memorandum to the A New Tax System (Goods and Services Tax Transition) Bill 1999 (Cth) Macquarie Dictionary (Macquarie Library Pty Ltd) 1981 Oxford English Dictionary Online (Oxford University Press 2005) COLES SUPERMARKETS PTY LTD (ACN 004 189 708) v WESTLEY NOMINEES PTY LTD (ACN 057 814 708) AND PAUL JOEL SPIRA VID 362 of 2005 KENNY J 22 JUNE 2005 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 362 OF 2005 BETWEEN: COLES SUPERMARKETS AUSTRALIA PTY LTD (ACN 004 189 708) APPLICANT AND: WESTLEY NOMINEES PTY LTD (ACN 057 814 589) FIRST RESPONDENT PAUL JOEL SPIRA SECOND RESPONDENT JUDGE: JUSTICE KENNY DATE OF ORDER: 22 JUNE 2005 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. On or before 9.30 am 23 June 2005, the applicant file and serve a minute of proposed orders in accordance with the reasons for judgment delivered today. 2. The matter be fixed for mention at 2.15 pm on 24 June 2005 in order that the parties may make such submissions as they see fit concerning the applicant's proposed minute of orders. 3. The costs of and incidental to the proceeding be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 362 OF 2005 BETWEEN: COLES SUPERMARKETS AUSTRALIA PTY LTD (ACN 004 189 708) APPLICANT AND: WESTLEY NOMINEES PTY LTD (ACN 057 814 589) FIRST RESPONDENT PAUL JOEL SPIRA SECOND RESPONDENT JUDGE: JUSTICE KENNY DATE: 22 JUNE 2005 PLACE: MELBOURNE REASONS FOR JUDGMENT introduction 1 This is an amended application by Coles Supermarkets Australia Pty Ltd, a wholly owned subsidiary of Coles Myer Ltd, for declaratory and injunctive relief. The principal question raised in the proceeding is whether or not a 'review opportunity' within the meaning of s 13(5) of the A New Tax System (Goods and Services Tax Transition) Act 1999 (Cth) ("the GST Transition Act") has arisen under a lease of supermarket premises. At the time of filing its application on 20 April this year, the applicant sought interlocutory injunctions, but, on the parties' providing certain undertakings to one another and the fixing of an early trial date, the application for interlocutory relief was not pressed. 2 At the hearing on 23 and 24 May 2005, the applicant relied on the affidavits of Tomasz Roman Korecki sworn on 20 April 2005, Philip Ross Willington sworn on 12 May 2005 and Franca De Lucia sworn on 18 May 2005. I admitted Mr Willington's affidavit, subject to the respondents' objection as to the relevance of his determination of the fair market rental of the property. As appears below, nothing in this case turns on the valuer's actual determination of the fair market rental, which is, as the respondents said, strictly irrelevant to any matter in issue. I refer to it below solely to explain the valuer's report. Both Mr Willington and Ms De Lucia were cross‑examined. Mr Korecki was not required for this purpose. 3 The respondents relied on the affidavits of Gavan John Rodda sworn on 28 April 2005 and Leonard Hal Kipen affirmed on 11 May 2005. Counsel for the respondents stated that the respondents accepted that the figure ($108,167.68) referred to in the affidavit of Ms De Lucia as the after‑hours charges referable to the year preceding 4 March 2004 was correct and, in effect, that Mr Kipen was mistaken in the figure ($64,622.87) given in his affidavit. Neither Mr Rodda nor Mr Leonard Kipen was cross‑examined. 4 Subject to objection by the applicant's counsel, Mr Symcha Kipen gave oral evidence on the respondents' behalf. Counsel for the applicant submitted that the evidence to be given by this witness was irrelevant and, in any event, counsel was unable in the time available to take instructions. The evidence that Mr Symcha Kipen gave related to a very short point. This was that, in 1992 the leased property was used for the two purposes of a supermarket and a variety store; and that the variety store occupied about one‑third of the leased area. According to the respondents, the evidence was relevant to show that the rent payable under the lease was not outside the bounds of fair market rent as the applicant suggested. Since the hearing occupied two days, the cross‑examination of Mr Symcha Kipen was deferred until the second day of the hearing, in order to afford the applicant's counsel an opportunity to take instructions. Counsel for the applicant informed the Court on the second day that the applicant had made enquiries, but was unable to instruct counsel on the matters covered by Mr Symcha Kipen's evidence. Counsel for the applicant stated that he did not seek an adjournment, although he maintained his objection. For the reasons stated below, nothing turns on Mr Symcha Kipen's evidence and I do not refer to it again. 5 The applicant leases from the respondents a supermarket space ("the demised property") within a shopping centre known as Greenslopes Mall, at Greenslopes, a suburb of Brisbane. The history of the lease can be briefly stated. 6 The respondents were not the owners and registered proprietors of the property at the time Coles Myers Ltd entered into the lease, which was dated 12 June 1987. At this time, Lake Eerie Pty Ltd was the owner and registered proprietor of the property and, therefore, the original lessor. The lease was registered on the title to the property on 15 June 1987. The respondents became the owners and registered proprietors of the property as to their respective interests on 24 March 1993. On 26 April 1993, Coles Myer Ltd assigned the lease to the applicant. The assignment of the lease was registered on the title to the property on 15 April 1994. 7 The parties to this proceeding and Coles Myer Ltd have sought in various ways to resolve issues arising from the introduction of the Goods and Services Tax ("GST") by the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("GST Act"). This has been unsuccessful, at least in relation to the present matter. 8 For present purposes, it is sufficient to say that the genesis of the dispute is set out in Coles Myer Ltd's letter of 24 September 2004 to the respondents. Amongst other things, this letter "note[d]" that "in relation to the Greenslopes lease, a 'review opportunity' occurred in March 2004 and therefore all lease payments from that date are subject to GST". The letter requested a tax invoice in relation to "all rent and other payments" from March 2004 "so that we may claim our input tax credit in respect thereof". The first respondent replied by an email letter of 28 September 2004, "that in accordance with [the] First Schedule (c) of the lease", the lessee would be "charged $79,359.89 cpm plus GST from March 2004". Coles Myer Ltd responded, by a letter dated 5 October 2004, stating that it agreed with "the numeric calculations of the new monthly base rent" but maintained that this amount ($79,359.89) was the total amount payable by the lessee in respect of the monthly base rent and included GST. 9 A month later, on 3 November 2004, Coles Myer Ltd applied to the Australian Taxation Office ("the ATO") for a private ruling that the Commissioner of Taxation ("the Commissioner") would exercise his discretion to treat payment records as a tax invoice for the purposes of s 29-70 of the GST Act. In a letter dated 19 November 2004, Coles Myer Ltd was advised that this ruling would not be forthcoming because it would involve a ruling on another party's circumstances and Coles Myer Ltd's position was dependant on the circumstances of this other party. A little over a month later, however, the Deputy Commissioner changed his mind, and Coles Myer Ltd was informed, by a letter dated 23 December 2004, that the ATO had concluded that Coles Myer Ltd had made a creditable acquisition under the lease. The letter also advised that the Deputy Commissioner would exercise his discretion to treat "proof of payment" documents in conjunction with the lease agreement as valid tax invoices to enable input tax credits to be claimed. The letter stated that, in reaching this conclusion, the view had been formed that: "Clause C in the First Appendix to the lease agreement would constitute a review opportunity for purposes of subsection 13(5) of the GST Transition Act." The letter of 23 December 2004 was accompanied by a determination under s 29-70(1) of the GST Act, effective from 4 March 2004. 10 In March this year, the respondents sought to invoke the provisions of the GST Transition Act. Under cover of a letter dated 15 March 2005, the respondents' solicitors sent the applicant a document purporting to be a Notice of Initial Offer under s 15K of the GST Transition Act. Coles Myer Ltd responded by disputing the validity of this notice, among other reasons because Coles Myer Ltd considered that the lease had given rise to a review opportunity on 4 March 2004. The respondents answered, saying that they intended to apply to an arbitrator for the appointment of an assessor to determine the appropriate change to the consideration under the lease in accordance with the GST Transition Act. 11 On 22 April 2005, the respondents delivered to the applicant a second Notice of Initial Offer, purportedly under s 15K of the GST Transition Act; and the applicant maintained the same objections to validity as had Coles Myer Ltd in respect of the first Notice of Initial Offer. It is common ground that the respondents cannot invoke s 15K of the GST Transition Act if there has been a review opportunity, as the applicant asserts. 12 Notwithstanding the controversy concerning the rent payable under the lease, in respect of the period March 2004 to March 2005, the applicant has paid the respondents a base rent of $952,318.62, representing the per calendar monthly amount of $79,359.89. The applicant has treated the amount of base rental paid to the respondents since 4 March 2004 as GST inclusive. The respondents have not provided the applicant with any tax invoice. 13 In his affidavit, Mr Leonard Kipen affirmed that, in the 12 months prior to 4 March 2004, the applicant had paid the following amounts (subject to minor adjustments) to the respondents under the lease: Item Amount paid Percentage of total payments Base amount rent $720,207.72 53.51% Annual percentage rental $294,958.80 21.92% Operating expenses $258,996.08 19.24% After-hours charges $ 64,622.87 4.80% Promotion fund contribution $ 7,076.40 0.53% As indicated already, the respondents accepted that the applicant had paid the amount of $108,167.68 for after-hours charges. I accept Mr Kipen's evidence subject to the corrections made by Ms De Lucia. I also accept Ms De Lucia's evidence. Ms De Lucia deposed that the correct figure for operating expenses for the lease year ended 3 March 2004 was $256,025. Nothing turns upon the discrepancy. 14 At the applicant's request, Mr Willington, a valuer with particular expertise in the valuation of commercial premises, prepared a report ("the valuer's report") in which he stated that he assessed the fair market rental of the property as at 4 March 2004 as $633,514.20 per annum, inclusive of GST. In arriving at this figure, he estimated that, as at this date, the gross fair market rental value was $880,000 per annum. The valuer's report was that: "The major supermarket groups have been prepared to pay gross rentals generally in the order of 2% to 2.5% of forecast turnover for new stores. The Greenslopes Supermarket is an existing tenancy with a proven trading performance of $35,597,909 for the year ending 3 March 2004. Applying a gross occupancy cost of 2.5% to this reported turnover produces a rental value of approximately $890,000 per annum which is generally in line with the adopted rental rate per square metre over an optimum tenancy area of 3,200 square metres. Based on the above considerations, I estimate the gross fair market rental value of the tenancy to be $888,000 per annum as at 4 March 2004." 15 According to the valuer's report, the fair market rental value subject to the terms and conditions of the lease was $575,922 per annum. The deductions were the lessees' outgoings contribution ($297,002) and the lessees' promotion fund contribution ($7,076). In Mr Willington's opinion, the majority of modern supermarket leases to major supermarket groups did not include provisions for the lessor's recovery of outgoings or contributions to a promotions fund. The valuer's report stated that: "Proper valuation principles and the interpretation of [the] market evidence requires that GST is added to the assessed Fair Market Rental of the premises. … Accordingly, the determined rental value of the premises on a GST inclusive basis is outlined as follows: Deduced Fair Market Rental excluding GST $575,922.00 per annum Fair Market rental value inclusive of GST $633,514.20 per annum …." 16 The annual percentage rental provision (cl E of the First Appendix) presented particular problems. The valuer's report stated: "It should be noted that the Lease includes a percentage rental provision with an adjustment to the turnover 'threshold' at the time of each base rent review. In the event that the above base rent was adopted at the commencement of the 19th Lease year (in lieu of the alternative base rent review mechanism outlined in the Lease, which is calculated as the average of the base rent and percentage rent for the 5 years prior to the base rent review date) there would be a substantial reduction in the turnover rental 'threshold'. This would result in a considerable payment by the Lessee for percentage rent after the base rent review on 4 March 2004. I have calculated that the Lessee would be responsible for an additional percentage rental payment from the year commencing 4 March 2004 of an amount approaching $400,000 (subject to the achieved turnover for the year ending 3 March 2005) which would result in a gross rental for the premises approaching $1,280,000. This gross rental would result in a gross occupancy cost for the premises exceeding 3.5% of turnover which would generally be in excess of the Fair Market Rental Value of the premises. This result would normally require a further downwards adjustment in the base rent however, due to the application of the percentage rental provision contained within the Lease, any further reduction in the base rent will only result in a generally corresponding increase in the turnover rent. I am unsure how to advise the Court of the treatment of this matter in my assessment of the Fair Market Rental Value of the premises, subject to the requirements of the First Appendix which include consideration of 'the terms of Lease'." 17 In examination in chief, with leave, Mr Willington said, amongst other things, that he assessed a fair rental value of the property in accordance with the requirements of the lease "on the basis of the negotiations that would happen in the market, where the tenants would negotiate a rent exclusive of GST, but then with the provision that GST would be added on". In cross-examination, he said that the parties would work out market value on an exclusive of GST basis and separately negotiate the passing on of the GST, although he would always allow for the GST in his valuations. He also gave some evidence concerning the operation of the variety store on the demised property at the commencement of the lease, noting that his report was concerned with the state of affairs in March 2004, when the variety store had ceased operation. 18 In re-examination, Mr Willington said that the reference to "sitting tenant" basis contained in the lease was "not a common term" but that he believed that it was intended to mean "taking account of what the tenant would be prepared to pay, given that he was an existing tenant in the premises". On the subject of percentage of turnover rental, he added: "[T]he evidence of these older leases would suggest that the leases negotiated in the 1980s may have resulted in … occupancy costs, being rent and outgoings and turnover rent, being well in excess of 3 per cent and that was the nature of that market agreed back in the 1980s, but certainly by 2004 rents that are being agreed on a different basis. There's a greater emphasis on costs the by tenant groups with the result that the market seems to have found a level of gross occupancy costs, being rent and outgoings and turnover rental within th[e] range of 2 to 2 and a half per cent." 19 As the consideration that follows shows, there are some difficulties with the valuer's report and Mr Willington's evidence. I accept his statements of matters within his expertise. This does not extend to the construction of the lease. I note too that the respondents' counsel questioned Mr Willington about a valuation of the Greenslopes Shopping Centre prepared by his office in February 2003 and signed by him as a director. This valuation, which had been prepared for mortgage security purposes and based on different information, was admitted subject to the applicant's counsel's objection. The applicant's counsel's objection should be upheld. The February 2003 valuation can be put to one side for present purposes as having limited relevance and little weight, alternatively, no relevance at all. 20 As the amended application shows, the parties are in dispute about the effect of s 13 of the GST Transition Act on the liability to pay GST on the supply by way of the lease. Broadly stated, the applicant's position is that a 'review opportunity' within s 13(2) arose under the lease on 4 March 2004 and that, accordingly, the supply ceased to be GST‑free from this date. Whilst the applicant accepts that, since this date, it is liable to pay a monthly amount of $79,359.89 as rent, it maintains that the respondents are liable for the GST on the supply. The respondents' position is that there has been no 'review opportunity' within s 13(2) and that, accordingly, they are not liable to pay the GST on the supply, although, by operation of s 13(2), they will become so liable after 1 July 2005. In order to avoid this future liability, the burden of which they say they will otherwise be unable to pass on to the lessee, the respondents have invoked the regime established by Div 2 of Pt 3 of the GST Transition Act. Broadly speaking, this would operate to transfer the liability to pay the GST from the respondents to the applicant. As we have seen, the applicant is already receiving input tax credits. 21 This case, therefore, turns on s 13 of the GST Transition Act, which provides as follows: "(1) This section applies if: (a) a written agreement specifically identifies a supply and identifies the consideration in money, or a way of working out the consideration in money, for the supply; and (b) the agreement was made before the day on which this Act received the Royal Assent. (2) The supply is GST‑free to the extent that it is made before the earlier of the following: (a) 1 July 2005; (b) if a review opportunity arises on or after the day of Royal Assent — when that opportunity arises. … (5) In this section: review opportunity, for an agreement to which this section applies, means an opportunity that arises under the agreement: (a) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to change the consideration directly or indirectly because of the imposition of GST; or (b) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to conduct, on or after 1 July 2000, a general review, renegotiation or alteration of the consideration; or (c) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to conduct, before 1 July 2000, a general review, renegotiation or alteration of the consideration that takes account of the imposition of the GST." 22 The question is whether the respondents, as the suppliers under the agreement, had a review opportunity arising under the lease. The applicant contends, and the respondents deny, that the respondents had an opportunity under the lease to conduct a "general review … of the consideration" (see sub‑ss 13(2) and (5)(b)) on the nineteenth anniversary of the lease. This was 4 March 2004. 23 In order to understand how this question arises, it is necessary to outline the relevant features of the GST Act and the GST Transition Act. the gst act 24 Goods and Services Tax ("GST") is payable, relevantly, on "taxable supplies" (s 7‑1(1)). A person must pay GST on any taxable supply made by that person (s 9-40). Entitlements to input tax credits arise, relevantly, on "creditable acquisitions" (s 7‑1(2)). A person is entitled to an input tax credit for any creditable acquisition made by that person (s 11‑20). Generally speaking, the amount of the input tax credit for a creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired (s 11‑25). 25 Amounts of GST and amounts of input tax credits are set off against each other to produce a net amount for a tax period (s 7‑5). Every entity that is registered, or required to be registered, has tax periods applying to it (s 7–10). A person is required to be registered if that person is carrying on an enterprise; and the annual turnover meets the registration turnover threshold (s 23‑5). The net amount for a tax period is the amount that the entity must pay to the Commonwealth, or the Commonwealth to the entity, in respect of the period (s 7‑15). 26 A registered person makes a taxable supply if that person makes the supply for consideration and the supply is made in the course or furtherance of an enterprise that that person is carrying on (s 9‑5). The supply is not a taxable supply to the extent, relevantly, that it is GST‑free (s 9‑5). A supply is GST‑free if, amongst other things, it is GST‑free under a provision of another Act, including the GST Transition Act. 27 The term 'supply' includes a grant, assignment or surrender of an interest in real property (s 9‑10(d); definition of "real property" in s 195‑1). For the purposes of Div 156 of Pt 4‑6, which is particularly concerned with attribution rules, a supply by way of lease is to be treated as a supply that is made on a progressive or periodic basis for the period of the lease (s 156‑22). The amount of GST payable on a taxable supply is 10% of the value of the taxable supply (s 9‑70). The value of a taxable supply is to be calculated according to a formula (s 9‑75). 28 A registered person makes a 'creditable acquisition' if that person acquires anything for a creditable purpose, the supply of the thing to the person is a taxable supply, and the person provides consideration for the supply (s 11‑5). An 'acquisition' is defined to mean any form of acquisition and includes the acceptance of a grant of an interest in real property (sub-ss 11‑10(1), (2)(d)). Generally speaking, a person acquires a thing for a creditable purpose to the extent that the person acquires it in carrying on the person's enterprise (s 11‑15(1)). the gst transition act 29 The GST is payable, relevantly, on a 'supply' to the extent that it is made after 1 July 2000 (GST Act, s 1‑2; GST Transition Act, s 7(1)). The GST Transition Act deals generally with the introduction of GST (s 4). Pursuant to this Act, a supply or acquisition of real property is made when the property is made available to the recipient (s 6(3)). 30 Part 3 of the GST Transition Act concerns agreements spanning 1 July 2000. Section 12 applies if a person makes a supply under an agreement that provides that the thing supplied is to be supplied for a period, and that period begins before 1 July 2000 and ends on or after that date (s 12(1)). The section does not, however, apply to a supply of a long‑term lease (as defined in s 195‑1 of the GST Act) made before 1 July 2000. If s 12 applies, the supply is taken, for the purposes of the GST Transition Act, to be made continuously and uniformly throughout the period (s 12(2)). For the purposes of s 12, a supply by way of lease is taken to be a supply for the period of the lease (s 12(3)). To the extent that s 12 has an effect in relation to a supply, it has a corresponding effect in relation to the acquisition to which the supply relates (s 12(6)). The parties have not sought to rely on s 12 in this proceeding. The argument in this case focused on s 13 and, to a lesser extent, the provisions of Div 2 of Pt 3 of the GST Transition Act. 31 Section 13 (set out at [21] above) provides that certain supplies are to be GST‑free to the extent that they are made before the earlier of 1 July 2005 or the date upon which a review opportunity (as defined in s 13(5)) arises (s 13(2)). Section 13 applies if a written agreement: (i) specifically identifies a supply; (ii) identifies the consideration in money, or a way of working out the consideration in money, for the supply; and (iii) was made before 8 July 1999 (being the day on which the GST Transition Act received the Royal Assent). 32 By virtue of the Tax Laws Amendment (Long‑term Non‑reviewable Contracts) Act 2005 (Cth) ("the 2005 amendments"), the GST Transition Act was amended in order to introduce Div 2 of Pt 3. Division 2 also concerns agreements spanning 1 July 2005 and creates a regime specifically for long‑term non‑reviewable contracts. The Division provides for the payment of the GST on taxable supplies made on or after 1 July 2005 that would have been GST‑free under s 13 if they had been made immediately before that date (s 15A(1)). Where the relevant supply would have been GST‑free under s 13 if made before 1 July 2005, the GST is payable by the recipient of the supply if the recipient elects to pay the GST on the supply (s 15C(1)(c)(i)) or fails to accept an arbitrated offer by the supplier to change the consideration for the supplies made on or after 1 July 2005 that are specifically identified in the relevant agreement (s 15C(1)(c)(ii)). The recipient is taken to have failed to accept an arbitrated offer if the recipient gives the supplier a written rejection of the offer; or the final offer period referred to in s 15M expires without the recipient notifying the supplier that the recipient accepts the offer (s 15C(4)). An arbitrated offer is a final offer under s 15M — to change the consideration for supplies made on or after 1 July 2005 that are specifically identified by an agreement of the kind referred to in s 13(1) — following the initial offer under s 15K and an arbitration of change to the consideration under s 15L. Section 15K provides that the initial offer must be written, set out a change to the consideration for the supplies, and state the period for which the offer remains open, being at least 28 days. Section 15L, which concerns the procedure for arbitration, provides, amongst other things, that the supplier must apply to an arbitrator to appoint an assessor to determine an appropriate change to the consideration within 28 days of the end of the offer period. Section 15M provides for a final offer, which must be written, set out the assessor's determination of an appropriate change, and state the period for which the offer remains open, being at least 21 days. the lease 33 Whether or not there has been a review opportunity depends on the terms of the lease, which was executed by Coles Myer Ltd and Lake Eerie Pty Ltd on 12 June 1987. The lease was for a twenty‑three year term commencing on 4 March 1986 and terminating on 3 March 2009. 34 Clause 1 of the lease defined numerous words and expressions, including "the Centre", "the Common Area", "the premises" or "the demised premises" and "the Lessee's turnover". For the purposes of the analysis that follows, it is useful to note generally the content of these definitions. "The Centre" meant, in substance, the Retail Shopping and Commercial Centre on the land identified in the lease. "The Common Area" was that part of the Centre provided by the lessor for common use, such as parking areas, roads, walkways, malls, courts, corridors, toilets, stairways, elevators and escalators. "The premises" or "the demised premises" were the premises demised by the lease, being "[t]hat part of the first and second floor of the building erected on the land as hatched on the Plan herein." Broadly speaking, the expression, "the Lessee's turnover" was defined as the entire amount of the actual sale price, subject to various exclusions, including "any purchase tax, receipt tax, consumption tax or similar tax or duty added on to the market or displayed selling price of the goods … and which is in effect collected at the point of retail sale". 35 The lease was subject to various covenants and conditions. Clause 2 dealt with the use of the Common Area and the demised premises. Clauses 4 and 5 distinguished between "rent" and "operating expenses of the Centre". Rent was the subject of cl 4. Subclauses 4(a) and (b) relevantly provided: "The Lessee hereby expressly covenants with the Lessor:— (a) The base annual rent payable is calculated in accordance with the formula in the First Appendix … (b) The Lessee shall pay to the Lessor during the term hereof and any renewal thereof without any formal or other demand the annual rental calculated in the manner set out in the First Appendix hereto …" 36 The operating expenses of the Centre were the subject of cl 5, which relevantly reads: "The Lessee further covenants with the Lessor as follows: — (a) The Lessee will during the whole of the term pay to the Lessor free of exchange and all deductions the Lessee's proportion of the operating expenses of the Centre; (b) The amount of the Lessee's proportion of the operating expenses of the Centre payable by the Lessee and herein called the 'Lessee's proportion' shall be calculated and payable as follows: — (1) The Lessee will pay in each year on account of the Lessee's proportion for that year or part of a year ending on the 30th day of June or other date as the Lessor may from time to time determine … such amount as may be reasonably estimated by the Lessor to be the Lessee's proportion of the operating expenses of the Centre for that year or part thereof … such estimated portion to be payable by equal monthly instalments in advance on the days herein fixed for payment of the base annual rent. (2) The Lessee's proportion shall be an amount equal to that proportion of the operating expenses of the Centre that the floor area of the demised premises … bears from time to time to the total floor area of the Centre …" 37 Since the lessee's contribution to the operating expenses of the Centre assumed some significance in the parties' arguments, it is helpful to explain the use of the expression. Broadly speaking, omitting various qualifications and exceptions, the expression, "operating expenses of the Centre," was defined in cl 5(b)(2) to mean: "the total cost of all outgoings costs and expenses of the Lessor … now or hereafter properly and reasonably assessed charged or chargeable paid or payable or otherwise incurred upon or in respect of the Centre or upon the Lessor in relation thereto or in the conduct management and maintenance of the Centre and to the use and occupation of the same as a high‑class shopping and commercial centre." This included taxes imposed on or in respect of the Centre, rates and charges of any public municipal or government body, insurance premiums, utility charges, the cost of repairs and maintenance, expenses associated with the operation of the parking areas, costs of the air‑conditioning of the Common Area, and the cost of maintaining services provided by the lessor for the lessees, occupiers, or visitors. 38 Clause 6 further concerned the use of the demised premises. In this clause, the lessee covenanted that it would not use the premises for any purpose other than a "shop kiosk or commercial premises and for carrying on the business of a Supermarket and variety store". Clauses 7, 8 and 9 concerned maintenance and repair, as well as insurance and indemnities. Under cl 10, the lessor undertook, amongst other things, to conduct the Centre during the term of the lease and to pay its operating expenses, subject to the lessee's obligation to pay a due proportion of the expenses. Clause 12 dealt with the termination of the lease. 39 Clause 13 concerned various unrelated matters. Relevantly, sub‑cl 13(g) made provision for the lessor to establish a fund for, amongst other things, the promotion of the Centre for the benefit of businesses operating it. Pursuant to this subclause, the lessee undertook to "make such contributions … as the Lessor may from time to time determine". Clause 14 provided an option for renewal. 40 The First Appendix dealt specifically with rent. Clause A provided that the annual rental payable by the lessee consisted of two components. They were: (1) the base annual rent; and (2) the annual percentage rental. Clause B is not presently relevant. Clause C, which is significant in this proceeding, stated: "The base annual rent for the remaining years of the term shall be reviewed as at the commencement of the ninth, fourteenth and nineteenth years of the term to the greater of the two amounts namely: — (a) an amount equal to one‑fifth of the total sum of the base annual rent and the annual percentage rental payable during the period of five years ending on the day last preceding the review date in question; or (c) the then fair market rental for the demised premises calculated on a "sitting tenant" basis for the balance of the term with the options for renewed leases hereinbefore contained having regard to: — (i) the rental being obtained at the relevant review date for premises of a similar size and quality in similar geographical locations; (ii) the period of a balance of the term; (iii) the terms of the Lease for the balance of the term; (iv) the fittings and fixtures in the demised premises the property of the Lessor; (v) the services facilities amenities and other benefits … available on the land or in the Centre or in the buildings for use by the Lessee or its customers, invitees, servants, agents, licensees or concessionaires or which may assist or enhance in any way the Lessee's business or the demised premises; (vi) such other matters (if any) as to the Lessor or the Lessee may seem relevant. The outgoings and other expenses likely to be incurred by the Lessor in respect of the land and the Centre during the balance of the term and which are not recoverable by the Lessor from the Lessee are not to be taken into account." 41 Clause E, which made provision for annual percentage rental during years 9 to 23, stipulated that: "The annual percentage rental during the years 9 to 23 inclusive of the term is 2% of that sum by which in each of such years the Lessee's turnover exceeds an amount determined by the following formula: — RY x T3 BR3 Where: RY is the base annual rental for the year in question; T3 is the Lessee's turnover during the year commencing on the 4th day of March, 1998; and BR3 is the base annual rent paid by the Lessee to the Lessor for the year commencing on the 4th day of March, 1988." 42 Clause 13 of the Fourth Appendix provided for an after‑hours charge to be paid by the lessee. the parties' submissions 43 The respondents' preliminary point was that, since the proceeding was really about a liability to the Commonwealth to pay the GST, then the Commissioner was a necessary party. The respondents relied on the decision of Gzell J in CSR Ltd v Hornsby Shire Council 2004 ATC 4966; [2004] NSWSC 946 at [27]‑[29] ("CSR Ltd"), in support of the proposition that the applicant had not raised any proper issue between the parties, and that the real issues were between the parties and the Commissioner. Counsel for the respondents submitted that the parties were not in dispute about the terms of the lease or the rent to be paid under it. On the contrary, the parties were agreed that, from 4 March 2004, the base annual rent, as calculated under cl C of the First Appendix ("clause C"), was $79,359.89 pcm (i.e., $952,318.72 per annum); and that this amount would not vary depending on whether there had been a review opportunity or the liability to pay the GST fell on them or the applicant. 44 In written submissions, the respondents said: "The declaration sought, namely whether there was 'a review opportunity' affects the Respondents' liability to pay GST to the Commissioner of Taxation and the Applicant's right under the GST Act to claim an input credit. The first issue is of no concern to the Applicant. The second issue is of no concern to the Respondents, and as between the Applicant and the Commissioner this matter has been resolved by a ruling from the ATO dated 23 December 2004." 45 The respondents did not dispute that, if there had been a review opportunity, they could not take advantage of Div 2 of Pt 3 of the GST Transition Act. They submitted, however, that this did not overcome their preliminary objection because: "[T]hat legislation does not affect any rights as between the parties. All that it does is impose a GST liability on the recipient of certain supplies: see s 15C(1). Any such liability is to the Commissioner of Taxation." The respondents submitted that the only relevant consequence of a finding that there had been a review opportunity was that the arbitrated offer proceedings initiated by them under Div 2 of Pt 3 of the GST Transition Act would be ineffective, and therefore that they, not the applicant, would become liable to the Commonwealth for the payment of the GST after 1 July 2005. The respondents submitted that the issues were such that they could only be determined in proceedings to which the Commissioner was a party. 46 The respondents contended that there was no need for the applicant to know whether or not Div 2 of Pt 3 of the GST Transition Act applied in the present case because: (i) if there were no review opportunity, there could be no effective offer, and the acceptance of an ineffective offer could have no legal consequences for the applicant; and (ii) no determination as to whether Div 2 of Pt 3 applied could bind the Commissioner. The respondents submitted that a finding by the Court that there had been a review opportunity and, accordingly, that the respondents could not utilise the mechanism in Div 2 of Pt 3 could not preclude the Commissioner from taking a different view, although it would preclude them from invoking the provisions of Div 2 of Pt 3. Even if the respondents were not so precluded, a finding in this proceeding that there had been a review opportunity would postpone the time when an initial offer could be made and thereby delay the transfer of the GST liability to the applicant. Counsel for the respondents reiterated that the only possible effect of the making of an arbitrated offer was to determine who pays the GST to the Commissioner. The respondents' submission was, in substance, that it was inappropriate for the applicant to seek to resolve the issues raised in the proceeding without the Commissioner as a party since, on any view of the proceeding, the only relevant consequence would be to affect the rights and obligations as between each of the parties and the Commissioner. 47 Senior counsel for the respondents sought to bolster his contention that no declaratory relief should be given in the absence of the Commissioner by an argument that, since the respondents did not grant the lease, but merely purchased the reversion, they did not make a 'supply' under s 9‑10(2)(d) of the GST Act. I return to this argument below. Whilst senior counsel accepted that this was a 'curious' result, he maintained that the issue affected the Commissioner and that the resolution of it in this proceeding would not bind the Commissioner in any dispute with the parties. 48 In written submissions, the respondents outlined their argument that there was no supply in the following way. They noted that the leasehold interest was granted by Lake Eerie Pty Ltd to the applicant in 1987. Acknowledging that the grant of a leasehold interest was a supply within the GST Act (s 9‑10(2)(d)), the grantor of the interest, and hence, the supplier was, on the respondents' argument, Lake Eerie Pty Ltd and not the respondents. The respondents, so they submitted, did not make any supply. The effect of s 156‑22 of the GST Act was confined to Div 156 of Pt 4‑6 of the GST Act and concerned the periods in which GST is payable in respect of a taxable supply. On the respondents' argument, s 12(3) of the GST Transition Act has no relevant application. 49 In answer to the respondents' preliminary submission that the amended application did not raise any proper issue between the parties, the applicant contended that, in enlivening the provisions of Div 2 of Pt 3 of the GST Transition Act, the respondents were seeking to take advantage of a mechanism for changing the consideration, or price, provided for in the lease. Even if the respondents had properly invoked these provisions, with the result that the applicant was obliged to pay the GST to the Commissioner, the fact was, so the applicant said, that the respondents would also be changing the existing rights between them and the applicant. In substance, the parties were, so counsel for the applicant submitted, in dispute about the true effect of a variation of the contract price. 50 There was, so the applicant maintained, no reason for it to join the Commissioner because it sought no relief against the Commissioner. As between the Commissioner and the applicant, the ruling made by the Commissioner under s 37 of the Taxation Administration Act 1953 (Cth) had settled the relevant issues. This proceeding was irrelevant, so the applicant submitted, as between it and the Commissioner. 51 The applicant sought to distinguish CSR Ltd. The applicant's senior counsel informed the Court that the applicant, through its counsel and solicitor, had informed the Commissioner of the proceeding. Counsel for the respondents accepted that this had occurred. Counsel for the applicant submitted that the Commissioner could have nothing to add in this proceeding to the arguments put to the Court because the applicant was propounding the very arguments made by the Commissioner in the Commissioner's private ruling. The parties agreed that, so far as the Commissioner was concerned, the outcome of the case was largely revenue‑neutral. That is, the Commissioner would receive the GST, whatever the outcome of the proceeding. Accordingly, the applicant submitted that the absence of the Commissioner was not an impediment to the relief that it sought. 52 The applicant commenced its primary submission that a 'review opportunity' as defined in s 13(5)(b) of the GST Transition Act had arisen under the lease by reference to the policy underpinning s 13. Referring to the comments of Hill J in ACP Publishing Pty Ltd v Commissioner of Taxation [2005] FCAFC 57 ("ACP Publishing") at [44], the applicant submitted that: "The policy thus enacted [in s 13] is that GST should become liable upon pre‑GST contracts where the supplier has the ability (whether or not exercised) to changed the consideration for the supply so as to 'build GST into the agreed price'." 53 The applicant contended that, on 4 March 2004, a review opportunity, within s 13(5)(b) of the GST Transition Act, arose under the lease because, on this date, clause C permitted the base annual rent payable under the lease to be reviewed to reflect fair market rent for the supply of the property. Referring to the observations of Bathgate DJ in Case M58 (1990) 12 NZTC 2333 ("Case M58") at 2338, the applicant contended that "[t]he width of review required by section 13(5)(b) is not that it be of all of the consideration", because "[s]uch a requirement would not be consistent with the balance struck between the competing objectives" underlying the provision. The applicant submitted that the supply of the supermarket space by way of lease was the relevant supply for the purposes of s 13 of the GST Transition Act. The consideration for this supply (see s 13(1)) was the rent for which provision was made in cl A of the First Appendix ("clause A"). That is, the consideration for the supply was the combination of the base annual rent and the annual percentage rental, of which the primary component was base annual rent. Drawing on Orti‑Tullo v Sadek 2001 ATC 4688; [2001] NSWSC 855 ("Orti‑Tullo"), the Commissioner's ruling in GSTR 2000/16 and the valuer's report, the applicant maintained that an opportunity to review rent to market enabled the supplier to make allowance for GST in re-setting the price for the supply. 54 It was sufficient, on the applicant's analysis, that there was an opportunity for the supplier to conduct a general review of the consideration. The existence of a review opportunity for the purpose of s 13(2) did not depend upon it being taken up in any way. Referring to DB Rreef Funds Management Ltd v Commissioner of Taxation [2005] FCA 509 ("Rreef") at [85] and [88] per Sackville J, the applicant submitted: "Sub‑paragraph (b) … contemplates the occurrence of a review opportunity that does not necessarily take into account the imposition of GST, and it is not the case that any review opportunity under (b) must permit the supplier to increase the actual consideration to pass on the cost of GST to the recipient of the supply." 55 Referring to the respondents' submission that clause C(b) was inoperative, senior counsel for the applicant noted the absence of any pleading to this effect. He submitted that the valuer's evidence on this point was irrelevant since it was for the Court to construe the lease, by giving effect to the bargain made by the parties to it. Counsel submitted that, properly understood, Mr Willington had estimated that, as at 4 March 2004, the gross fair market rental of the property was about $880,000 per annum. This was, so counsel submitted, the valuation that his expertise entitled him to make. 56 The applicant contended that Mr Willington's comments about the operation of clause C(b) were wrong in law and ought to be disregarded. The applicant submitted that the problem, if any, lay in clause A, according to which the annual rental consisted of the two elements, namely, the base annual rent and the annual percentage rental. The first element was the subject of the review provided for in clause C, according to which, on the review, base annual rent was to be the greater of either the computed amount in clause C(a) or the fair market rental in clause C(b). The applicant's counsel submitted that, having regard to the terms of clause A, the fair market rental in clause C(b) was to be calculated without incorporating annual percentage rental into the calculation. The annual percentage rental was to be calculated in accordance with cl E of the First Appendix ("clause E"). The product of this calculation constituted the second separate element in the calculation of annual rent payable in clause A. The applicant submitted that it was wrong, having regard to clause A, to calculate fair market rental by incorporating the annual percentage rental provision, as Mr Willington had sought to do. Although clause C(b) required that there be regard to the terms of the lease for the balance of the term in determining fair market rental, having regard to clause A, this did not include clause E relating to annual percentage rental. 57 The applicant contended that, since the primary component of the rent was subject to review, then the lease provided for a general review of the kind contemplated by s 13(2) and s 13 (5)(b) of the GST Transition Act. The fact that the annual percentage rental was not subject to review did not affect this conclusion. The annual percentage rental was, so the applicant said, "merely a contingent amount payable as, in effect, an incremental accretion to the base rent if the contingency is fulfilled". 58 Counsel for the applicant submitted that, when the formula set out in clause E was worked out, it captured an annual percentage rental of around 2%. This was consistent, so counsel said, with the evidence given by Mr Willington on the subject. Counsel for the applicant submitted that: "[W]hat the formula does over time … is to identify a portion of the rent in respect of which the landlord is never at risk. However, the landlord is at risk in respect of incremental increases over time." 59 In written submissions, the applicant contended: "[I]n any event, the fact that percentage rent is not expressly reviewed does not prevent there being a general review of rent when percentage rent is adjusted annually by reference to 2% of turnover. The turnover adjustment is periodically 'rolled in' to the base rent upon application of the formula in paragraph C(a) of the First Appendix. An adjustment by reference to 2% of turnover is in substance equivalent to a market adjustment, it being the fact that a percentage of turnover of between 2 and 2.5% provides an estimate of market rent: see Mr Willington's report at pp 14‑15. The function and effect of these provisions of the lease is to create a mechanism to incorporate into the review clause the accepted industry benchmark of expected increases to fair market rent." 60 The applicant submitted that amounts paid by the lessee under cl 5 as the lessee's proportion of the operating expenses of the Centre, as well as the after‑hours charges and contributions to the promotion fund were not part of the consideration for the purposes of determining whether there has been a review opportunity. 61 The lease agreement required the lessee to make a number of payments and only some of these payments were properly characterised as "true rent" or "contractual rent". Counsel for the applicant submitted that the respondents were wrong in their analysis of Commissioner of State Revenue v Price Brent Services Pty Ltd [1995] 2 VR 582 ("Price Brent"). The applicant submitted that, in that case, the lessee's payment under the lease was characterised as contractual rent because, though perhaps not true rent, the parties to the lease treated it as if it were to be part of the true rent. This was not so in the present case, however, because the parties treated the sum total of true rent as that for which provision was made in clause A. Under the lease in this case, the lessee's contribution to outgoings under cl 5 was for the provision of such ancillary and incidental benefits and services that arose from being part of the Centre complex as a whole. The contribution was not for rent reserved. 62 According to the applicant, the after‑hours operations charge under cl 13 of the Fourth Appendix and the contribution to the promotion fund under cl 13(g) were also not part of the consideration for the purposes of determining whether or not there was a review opportunity. These amounts were properly characterised as reimbursements of expenses payable when and if incurred. None of these payments were properly regarded, so the applicant submitted, as the consideration in money for the supply for the purpose of s 13(1) of the GST Transition Act. Referring to Rreef at [75], the applicant also submitted that, even if these outgoings formed part of the relevant consideration (contrary to its primary submissions) the fact that there was no specific review of them did not preclude there being a review opportunity for the purposes of sub‑ss 13(2) and (5) of the GST Transition Act. 63 The respondents' central submission was, as we have seen, that there was no review opportunity on 4 March 2000, as the applicant claimed, and that the supply by way of the lease was GST‑free until 1 July 2005. Since there was no review opportunity, they were entitled to avail themselves of the mechanism in Div 2 of Pt 3 of the GST Transition Act. 64 Whilst it was common ground that the lease was an agreement of the kind described in s 13(1), the respondents contended that, having regard to the terms of the lease, there was no opportunity for them to conduct a general review, negotiation or alteration of the consideration within the meaning of s 13(5)(b). Since none of s 13(5) was satisfied, there was no review opportunity within the meaning of s 13(2). 65 Referring to the definition of "consideration" in s 9‑15(1)(a) of the GST Act, the respondents submitted, first, that, in this context, "consideration" includes any payment in connection with the supply of anything. Accordingly, so the respondents contended, the consideration in money identified in the lease for the supply by way of lease was made up of: (i) base annual rent; (ii) annual percentage rent; (iii) the lessee's proportion of the operating expenses of the Centre; (iv) after‑hours charges; and (v) the promotion fund contribution. Referring to Price Brent, the respondents submitted that, depending upon the terms of the lease, a lessee's obligation to pay a share of operating expenses may be "true rent" or "rent reserved" in the strict common law sense and, in any case, the lessee's contribution to outgoings and other charges was contractual rent, which together constituted the consideration in money for the right to occupy the premises. Annual percentage rental was also rent in the true sense. Referring to Rreef at [98] and Case M58 at 2337, the respondents said that the applicant's contention that these payments were not part of the consideration for the lease was clearly wrong. 66 The respondents submitted that the use of the word 'conduct' in s 13(5)(b)of the GST Transition Act was significant because it suggested some active role to be played by the supplier. In written submissions, the respondents said: "The word 'conduct' is important bearing in mind the stated policy of the provision, namely '… that GST should apply to existing contracts only if the supplier can alter the consideration to pass on GST': ACP Publishing Pty Ltd v FCT [2005] FCAFC 57 per Hill J at [17]." The respondents submitted that clause C operated of its own accord and that the lessor (or supplier) was not called on to do anything. The lease itself provided that, on the nineteenth anniversary, the consideration was the greater of two amounts. The exercise under the lease was, according to the respondents, simply to do a calculation. It was accepted, so the respondents said, that the calculation under clause C(a) was higher than under clause C(b); and the numeric calculation of $79,359.89 would be the same whether or not the GST was imposed. 67 Referring to Rreef at [99], the respondents further submitted that the opportunity to which sub-ss 13(2) and (5) referred was a real opportunity to conduct a general review; and that there would be no such opportunity unless the whole of the consideration was capable of being reviewed, subject to the application of the de minimis principle. Accordingly, in the present case, there was no real opportunity for a general review because there was no review opportunity in respect of that part of the consideration that constituted annual percentage rental, the lessee's contribution to the outgoings of the Centre, after‑hours charges and promotional charges. As a matter of fact, in this case, the lessee's contributions to operating costs were not insignificant. The respondents noted that the valuer gave evidence that the lessee's contribution to operating costs had to be taken into account in determining fair market rental. This analysis was, so the respondents said, consistent with the view that commended itself to Bathgate DJ in Case M58 at 2338. There would, so the respondents contended, only be a general review if the supplier could look at the consideration again, completely or almost universally. 68 Moreover, so the respondents submitted, consideration of the legislative context of s 13 supported this analysis. Thus, they said, in written submissions: "If there is a review opportunity GST becomes payable by the Respondents on the whole of the consideration. It would be a perverse result if the opportunity to review part only of the consideration led to the consequence that the supplier was required to pay GST on the whole of the consideration and the recipient was entitled to an input credit for the GST on the whole of the consideration." The respondent elaborated this submission at the hearing of the amended application. The respondents' counsel noted that, if the applicant's submissions were accepted, the respondents would pay GST, amounting to 10% of a figure agreed in 1987 whilst receiving only the 1987 figure by way of rent and having no chance to pass on the GST to the applicant. The applicant, on the other hand, would pay a figure agreed in 1987 and receive an input credit of 10%, thereby, at least commercially speaking, reducing the net rent payable by it by 10%. 69 Besides the fact that clause C operated of its own accord and a significant part of the consideration, on the respondents' analysis, fell outside the scope of clause C(b), there were, so the respondents said, a number of other reasons why clause C(b) did not permit the supplier to conduct a general review. These further reasons were: (1) There is a restriction on the review under clause C(b) in that fair market rental is to be determined on a "sitting tenant" basis. (2) Clause C(b) expressly excludes from consideration "the outgoings and other expenses likely to be incurred by the Lessor in respect of the land and the Centre during the balance of the term and which are not recoverable by the Lessor from the Lessee …". (3) The evidence of the valuer in this case was that fair market rental is exclusive of GST. (4) The evidence of the valuer was that the lease provides no opportunity for a general review because: (i) his assessed fair market rent valuation of $575,922 per annum as the base rent under the lease could not constitute the base rent as it is less than the agreed sum calculated under clause C(a), namely, $952,318.72; and (ii) if the figure of $525,922 were treated as base rent, then the threshold for the turnover rent would reduce and turnover rent would increase. As senior counsel for the respondent put it, "the snake would always swallow its tail". This led the valuer to say, in his report, that he was "unsure how to advise the Court of the treatment of this matter", in his assessment of the fair market rental value of the premises. In written submissions, the respondents contended that the valuer "comes to this state of uncertainty because he has proceeded on a hypothesis which is not permitted by the lease. Under the terms of this Lease there is simply no opportunity to adopt fair market rent if the amount in para (a) is greater". In oral submissions, the respondents' counsel submitted that clause C(b) was, practically speaking, unworkable, principally because of the provision in the lease for annual percentage rental and for the calculation of turnover rent. consideration Was there a 'review opportunity'? 70 The rationale for s 13 of the GST Transition Act is the need to balance the competing interests of suppliers and those to whom they supply, as well as the revenue, in relation to contracts entered into before the introduction of the GST and involving supplies after the imposition of the tax. A supplier would suffer an economic disadvantage if the supplier became liable to pay the GST upon a supply, the consideration for which was fixed before the tax was introduced. Equally, a recipient of a supply would suffer an economic disadvantage if the consideration payable for the supply was reflective of the GST but the recipient was unable to obtain the benefit of any input tax credit. The revenue would also be at risk from non‑taxable supplies under pre‑GST contracts, unless there was some mechanism to bring these supplies within the GST regime. The GST Transition Act takes account of these various interests by quarantining supplies made under pre‑GST contracts from the GST regime until 1 July 2005, unless there is a review opportunity, whether or not taken up, for a change in the consideration to take account of the GST. If there is such a review opportunity, then the GST becomes payable on supplies, although under pre‑GST contracts: see e.g., ACP Publishing at [44] per Hill J. The opportunities chosen by the legislature to attract the GST regime reflect the legislature's resolution of these difficulties. Broadly speaking, a supply will become taxable when the supplier has the contractual ability to alter the consideration after the imposition of the GST on 1 July 2000: see GST Transition Act, s 7(1). In this way, the revenue is not at risk from parties who elect not to alter the consideration. Moreover, a recipient who is entitled to any GST credit may be able to enjoy that credit, notwithstanding that the supplier has elected unilaterally not to alter the consideration. Since the 2005 amendments, where the pre‑GST contract affords no relevant opportunity to change the consideration, the supplier can invoke the mechanism in Div 2 of Pt 3 to effect such a change. 71 The GST Transition Act is not predicated on the assumption, as the respondents at times suggested, that, before a supplier can be liable to the GST, the supplier must necessarily have the ability to pass the tax on to the recipient: see Rreef at [79]‑[81] per Sackville J and ACP Publishing at [50], [59] per Finn J. By virtue of s 13 of the GST Transition Act, supplies under pre-GST contracts are GST‑free for a period only if a written agreement, made before 8 July 1999, specifically identifies the supply and the consideration in money, or a way of working out the consideration in money, for the supply. A supply made under an agreement of this description is GST‑free only until 1 July 2005, or the date on which a review opportunity arises, whichever is the earlier. 72 The definition of 'review opportunity' is satisfied only if the supplier has an opportunity under the written agreement to do one of the things identified in s 13(5)(a), (b) and (c). In this case, there could be a 'review opportunity' only if the respondents had an opportunity to conduct, on or after 1 July 2000, a general review, renegotiation or alteration of the consideration, as described in s 13(5)(b). It was common ground that the respondents did not have an opportunity to do any of the things described in s 13(5)(a) and (c). 73 There are a number of things to note about s 13(5)(b). First, there must be an opportunity under the agreement (here, the lease) for the supplier to conduct a review, renegotiation or alteration of the consideration. Secondly, that opportunity must arise on or after 1 July 2000, being the date when the GST was imposed. Thirdly, the review, renegotiation and alteration must be general. Fourthly, in contrast with the opportunity described in s 13(5)(c), the opportunity contemplated by s 13(5)(b) is for the supplier to conduct a general review of the consideration that does not necessarily take account of the imposition of the GST. Fifthly, the opportunity described in s 13(5)(b) is not one in which a supplier has the contractual ability to change the consideration directly by reference to the GST, because this is the subject of s 13(5)(a). All that is necessary in the case of s 13(5)(b) is that the supplier have it within power to conduct a sufficiently wide review of the consideration. 74 Much turns in this case on the language of s 13(5)(b). The provision is concerned with an 'opportunity' under the agreement 'to conduct', relevantly, a "general review … of the consideration". Only the word 'consideration' is legislatively defined. The other words have their ordinary meaning. An 'opportunity' in this context is in the nature of: "a time, condition, or set of circumstances permitting or favourable to a particular action or purpose" (Oxford English Dictionary). A 'review' is something in the nature of: "a general survey or reconsideration of some subject or thing" (Oxford English Dictionary). In this context, the word 'general' relevantly means: "[i]ncluding, participated in by, involving, or affecting, all, or nearly all, the parts of a specified whole, or the persons or things to which there is an implied reference; completely or approximately universal within implied limits; opposed to partial." "Comprising, dealing with, or directed to the main elements, features, purposes, etc., with neglect of unimportant details or exceptions." (See Oxford English Dictionary) In this context too, the verb 'to conduct' conveys the meaning "to direct, manage, carry on …" (Oxford English Dictionary). 75 Section 9‑15 of the GST Act provides an inclusive definition of the word 'consideration'. By virtue of s 9‑15(1)(a) 'consideration' includes "any payment … in connection with a supply of anything". Section 195‑1 of the GST Act further provides that: "consideration, for a supply … , means any consideration, within the meaning given by section 9‑15, in connection with the supply … ." Section 5(2) of the GST Transition Act provides that expressions used in the GST Transition Act have the same meaning as in the GST Act. 76 In the present case, clause C of the lease provided for the base annual rent to be reviewed as at 4 March 2004 "to the greater of" an amount calculated according to clause A or "fair market rental" according to clause C(b). The review operated to the benefit of the lessor or, in this case, the respondents as its assignees. Clause C thus gave rise to an opportunity for the respondents, to conduct, in the sense of manage or direct a review of at least part of the consideration. 77 I reject the respondents' submission that clause C(b) could have no sensible or practical operation. Plainly enough, a court will construe the terms of a lease in order to give effect to the bargain made by the parties to it. As Chernov JA, with whom Brooking and Batt JJA agreed, said, in Murray Goulburn Co‑operative Co Ltd v Cobram Laundry Service Pty Ltd [2001] VSCA 57 at [26]: "Generally, where the intention of the parties to a written agreement is clear but the instrument contains provisions which, on their face, lead to absurdity or to inconsistency between its terms so as to render the real intention of the parties contractually ineffective, the courts seek to give effect to that intention by construing the agreement so as to avoid such absurdity or inconsistency. Thus, words are supplied, omitted or corrected in an instrument where it is necessary to avoid absurdity or inconsistency and in order to give effect to the real intention of the parties. Business contracts in particular are interpreted so as to accord with 'commercial reality' or 'business commonsense'." See further the authorities to which his Honour refers at n 6; also The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429, 436‑437 per Barwick CJ, with whom McTiernan, Kitto and Windeyer JJ agreed and Pebruk Nominees Pty Ltd v Woolworths (Victoria) Pty Ltd [2003] TASSC 94 at [33] per Blow J. 78 The intention of the parties to the lease was to provide for a review of the primary element of the annual rental payable by the lessee as at specified anniversaries of the lease. Upon such review, the base annual rent was to be either the product of the calculation in clause C(a) or fair market rental in clause C(b), whichever was the greater. Clause A makes it plain that the base annual rent is separate and distinct from the annual percentage rental. The review in clause C is to attain a new figure for base annual rent, and not annual percentage rental. Accordingly, the fair market rental in clause C(b) is to be calculated without incorporating annual percentage rental into the calculation. For the purposes of clause A, in order to arrive at a figure for annual rental, the annual percentage rental is to be calculated in accordance with clause E and the product of this calculation added to the figure for base annual rent. Having regard to clause A, the requirement — that regard be had to the terms of the lease for the balance of the term in determining fair market rental — did not include clause E relating to annual percentage rental. It follows that I accept the applicant's submissions concerning the operation of clause C(b), and reject the submissions of the respondents in this regard. 79 Clause C(b) made no provision for the review of annual percentage rental. Leaving aside the question of the lessee's contribution to operating expenses, this absence does not negate the general character of the review provided for in clause C(b). In the present context, a general review of the consideration for the supply is, at the least, a review of the rent payable under the lease. A review to market of the rent payable will be general if it entails reconsideration of most of the rent, including its fundamental or primary component or components, even though it does not involve the reconsideration of every element of the consideration: compare Rreef at [98]. Although in Case M58 Bathgate DJ was speaking about New Zealand's Goods and Services Tax Act 1985, his Honour's comment at 2,338 is apposite to this case. He said: "A 'general review' means, I think, a review generally, rather than of a specific part or parts of the consideration payable under the lease. A 'general' review is not the same as a 'total' review of all the consideration, nor is it in certain circumstances the same as a 'partial' review of some of the consideration." 80 The use of the expression "base annual rent" indicates that, though not the whole of the rent, this rent is the primary or fundamental component of the rent: compare Price Brent at 588-589. The use of the expression "annual percentage rental" also indicates the essential character of this rent; that is, that it is the incremental addition to the base annual rent adjusted annually by reference to turnover. Bearing in mind Mr Willington's evidence, which I accept in this regard, annual percentage rental is, in substance, equivalent to at least a partial adjustment to market: see [14] above. I accept that, as counsel for the applicant submitted, the fact that annual percentage rent is not expressly reviewed does not prevent there being a general review of rent when percentage rent is adjusted annually by reference to 2% of turnover: again see Mr Willington's evidence referred to at [14] above. 81 If "the consideration in money … for the supply" is properly limited to the annual rental, for which provision is made in clause A, then, as at 4 March 2004, a review opportunity, within s 13(2) and (5)(b) of the GST Transition Act, arose. This is because, on this date, clause C(b) of the lease afforded an occasion for the base annual rent to be reviewed to market, thus providing an occasion to make an allowance for the GST. 82 There remains the further question whether the lessee's contribution to operating expenses is properly to be regarded as another component of "the consideration … for the supply" referred to in s 13(1) and, if s 13(2) is to apply, properly the subject of a review opportunity as described s 13(5)(b). The evidence of Ms De Lucia and Mr Leonard Kipen established that the lessee's payments under cl 5 made up a not insignificant proportion of the total amount paid by the lessee to the respondents under the lease. 83 For the purposes of s 13(1), the written agreement in this case specifically identified a supply by way of lease of the demised premises. The same agreement identified the "rent reserved" as the consideration for the specified supply. The lease showed the "rent reserved" to be set out in the schedule to the lease. The schedule comprised cls 1 to 15 and the appendices, to which reference has already been made. Also according to the lease, "the covenants and conditions" pursuant to which the lessee accepted the lease were in the schedule. 84 In order to determine whether the lessee's contribution to operating expenses is properly regarded as part of the consideration for the supply, one must construe the lease, including the schedule. There are features of the lease (discussed below) that lead to the conclusion that the contribution under cl 5 was not intended by the parties to be treated as the "rent reserved". This case is, therefore, distinguishable from Price Brent. 85 In Price Brent, the Court of Appeal of the Victorian Supreme Court was required to determine whether a lessee's payment for outgoings under a lease was the payment of rent within the meaning of the Stamps Act 1958 (Vic). In holding that it was, Brooking JA said, at 587, that whether the payments for outgoings were to be regarded as rent was a question of the construction of the lease itself. There were features of the lease in Price Brent that led the Court to conclude that under the lease in question in that case these payments were rent. The features of the lease in this case lead to a contrary conclusion. 86 In the present case, rent is the separate subject of cl 4 ("the rent clause"). The operating expenses of the Centre are dealt with as a separate matter in cl 5 ("the outgoings clause"). That is, the rent and operating expenses are distinctly treated as different matters. The rent clause specifically provides that rent is to be calculated as set out in the First Appendix. The terms of the rent clause also establish that the annual rental (as stated in clause A) is the rent reserved for the purposes of the lease. The rent clause and clause A treat "base annual rent", which is payable monthly, as the primary component of the rent reserved; and 'annual percentage rental' as the secondary component. 87 Under the outgoings clause, the lessee's covenant to pay a share of the Centre's outgoings is not expressed to be referable to the exclusive use of the demised property; rather it is referable to the Centre as a whole. The outgoings clause makes it plain that it is immaterial whether the relevant outgoings arise from the demised property. Indeed, some of the outgoings for which the lessee is to pay its share are plainly not referable to its use of the demised property. In substance, the lessee's covenant to pay its share of the outgoings relates to the broader concept of the total operating costs of the whole Centre, in contrast to the property specifically demised to the lessee. In conformity with this, the accounting period for the calculation of a lessee's contribution to outgoings is different from that for the payment of rent. In this case, there is no provision comparable to that in Price Brent that would treat the amounts payable pursuant to the outgoings clause as if they were rent. 88 In Price Brent, the lessee's payment in respect of outgoings was characterised as contractual rent because the parties treated the outgoings as part of the true rent. In the present case, the parties to the lease have not treated the lessee's contribution to the outgoings of the Centre in this way. Under this lease, the consideration for the lease is the rent reserved; and the lessee's contribution to outgoings is for the provision of such ancillary and incidental benefits and services as arise from being part of the Centre as a whole. If this analysis is correct, then the lessee's contribution to outgoings did not constitute part of the consideration for the supply, unless the statutory definition of consideration made it so. 89 The respondents relied on the observation of Sackville J in Rreef at [95] in support of the proposition that the consideration for the supply was the annual rent for the property and the lessee's obligation to reimburse the operating costs. Three things can be said of this. First, the identification of the consideration for a specifically identified supply necessarily depends on the relevant agreement; and the lease agreement in Rreef was quite different from that in this case. Secondly, it was apparently common ground in Rreef that the supply was the grant of a lease of premises for an aggregate consideration (Rreef at [17]). Thirdly, his Honour found it unnecessary to consider Rreef's contention that, if there had been an opportunity for a general review of the consideration, it did not relate to the whole of the consideration because there was no mechanism for a general review of the lessee's contribution to operating costs (Rreef at [75]). This is one of the arguments advanced in this case. His Honour held in Rreef that there was no relevant review opportunity under the lease because there was no general review. There was no general review, so his Honour held, because the review related only to the consideration paid for part of the supply (that is, the floor space and not the fitout undertaken by the lessor prior to entry into the lease, which was also part of the demised premises). In the present case, the rent payable by the lessee is not referable to fitout costs and the value of the fittings is to be taken into account when a market review is undertaken (clause C(b)(iv)). In this case too, the costs of repairs, maintenance and renovations of and to the shopping centre, other than work of a structural nature or work which is the responsibility of any tenant or occupier, is recoverable by the lessor separately and distinctly from the obligation to pay rent (cl 5(b)(2)(e)). 90 The after-hours operations charge, which is payable under cl 13 of the Fourth Appendix, and the contribution to the promotion fund, which is payable under cl 13(g), are properly characterised as reimbursements payable for expenses when and if they are incurred. They too are not in the nature of "rent reserved" for the demised property. 91 The statutory definition of 'consideration' does not alter the conclusion that the "consideration … for the supply" that is to be the subject of a general review opportunity does not include the lessee's contribution to outgoings, or the after-hours operations charge and any contribution to the promotion fund. It is true, as the respondents submitted, that the definition of 'consideration' in s 195‑1 of the GST Act, which is made applicable to the GST Transition Act, is general and expansive. It is capable of describing both an immediate and remote relationship between a supply and a money payment by the recipient of the supply. The boundaries of what falls within the statutory definition depend upon the statutory context in which the word 'consideration', so defined, is used. 92 The expressions "in relation to" or "in respect of" are as general and expansive as the expression "in connection with". McHugh J observed in O'Grady v The Northern Queensland Company Limited (1990) 169 CLR 356, at 376 that: "The prepositional phrase 'in relation to' is indefinite. But, subject to any contrary indication derived from its context or drafting history, it requires no more than a relationship, whether direct or indirect, between two subject matters." The identity of the two subject matters in relationship with one another depends upon the relevant context: cf PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301, at 330 per Toohey and Gummow JJ; Federal Commissioner of Taxation v Scully (2000) 201 CLR 148, at 171‑172 per Gaudron ACJ, McHugh, Gummow and Callinan JJ; The Workers' Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642, at 653-4 per Deane, Dawson and Toohey JJ; J and G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402 ("J and G Knowles") at 410-411 per Heerey, Merkel and Finkelstein JJ; and Harris v Commissioner of Taxation [2002] FCAFC 226, at [68] to [70] per Sackville, Kenny and Allsop JJ. In their consideration of whether a benefit was provided "in respect of the employment of the employee" for the purposes of s 136(1) of the Fringe Benefits Tax Assessment Act 1986 (Cth), the Full Court in J and G Knowles referred to Smith v Federal Commissioner of Taxation (1987) 164 CLR 513 and observed, at 410 [26]‑[27], that: "[I]t must be remembered that what must be established is whether there is a sufficient or material, rather than a causal, connection or relationship between the benefit and the employment. … Here the question whether there is a sufficient or material connection or relationship between a benefit and employment is assisted by having regard to the purpose or object of imposing FBT on employers." 93 In the statutory context presently under consideration, what do the words "in connection with" signify? There is nothing in this context that would support the proposition that they signify a relationship between anything other than that which the written agreement specifically identifies as the supply and the consideration that this agreement identifies as the consideration for the supply. 94 Section 13 of the GST Transition Act provides the relevant statutory context in this case. By virtue of s 13(1), s 13 only applies where a written agreement specifically identifies the supply and identifies the consideration for the supply. The review opportunity, the subject of s 13(5)(b), is an opportunity for a general review of this consideration. The terms of the lease identify the rent reserved as the consideration for supply, which is specifically identified, namely, the exclusive possession for a term of the demised property. As we have seen, the rent reserved is the annual rental as stated in clause A; and not the lessee's contribution to the outgoings of the Centre, the after-hours operations charge and the contribution to the promotions fund. Accordingly, these payments are not part of the consideration for present purposes, notwithstanding the expansive definition of 'consideration' in s 195‑1 of the GST Act. Put another way, whatever may be the broad effect of the statutory definition, this yields to the intention evident in s 13 of the GST Transition Act. 95 As we have seen, the respondents also challenged the general nature of the review in clause C(b) on a number of other bases: see [69]. For the following reasons, I reject the respondents' submissions in this regard. 96 By virtue of clause C(b), an opportunity arose under the lease on 4 March 2004 for the respondents to manage or direct a review of the primary component of the rent to an effective market rental. The secondary component was subject to an annual adjustment to market for the duration of the lease. Had they chosen, the respondents could have invoked the rent review procedure provided for by clause C(b). A valuer would have been called on to determine the annual market rent for supermarket properties, taking account, among other things, of the rental value of comparable properties. 97 Commercial leases commonly contain detailed provisions governing the method by which the valuer is to determine the annual market rental of demised premises in accordance with rent review clauses: compare Rreef at [89], citing Re McCafferty [1994] 2 Qd R 538, at 541 per Williams J. I accept Mr Willington's evidence that, although the reference in clause C(b) to a calculation of fair market rental on a "sitting tenant" basis was not one commonly seen in rent review provisions in commercial leases of the kind in question, the reference to "sitting tenant" basis was intended to signify that account should be taken of what the tenant would be prepared to pay, given that it was an existing tenant of the premises. I do not regard this as a significant restriction on the valuation, as the respondents contended. 98 The opportunity to review rent to market enabled an allowance to be made for the lessee's contribution to outgoings. Indeed, the valuer's report showed how, in any review to market, the lessee's covenants to reimburse the lessor for its outgoings and expenses would be taken into account. The need to take these covenants into account arose from the need to have regard to the terms of the lease for the balance of the term (clause C(b)(iii)). Outgoings and expenses that were not recoverable from the lessee were excluded from consideration, but, bearing in mind the breadth of the matters to be taken into account, this limitation was not significant. 99 Furthermore, notwithstanding the submissions of the respondents to the contrary, I accept that the opportunity to review rent to market enabled an allowance to be made for the GST in re-setting the base annual rent and, thus, the consideration for the supply. There are two reasons for this. First, there is the evidence of Mr Willington that the negotiation of leases of comparable premises at the relevant time would always have made an allowance for the GST, usually by adding on a negotiated amount for the GST. Mr Willington's evidence established, as the applicant contended, that the assessment of market rent would require a consideration of the GST. Secondly, apart from Mr Willlington's evidence, in any valuation under clause C(b) of the lease, it would be open to a valuer to take account of the GST by virtue of clause C(b)(vi), permitting consideration of such other matters as to the lessor or lessee may seem relevant. 100 The fact that the fair market rental assessed under clause C(b) might be lower than the amount calculated under clause C(a), and thus prevent the respondents from passing on the GST under clause C(b), did not prevent the respondents from having an opportunity under the lease to conduct a general review of the consideration for the lease. As Sackville J said in Rreef at [91]: "The fact that actual market forces might prevent an increase in the rental sufficient to enable the lessor to pass on the full cost of the GST to the lessee does not of itself prevent Rreef having an opportunity under the Subject Lease to conduct a general review of the consideration for the Office Space. In my opinion, the Commissioner was correct to submit that s 13(5) of the GST Transition Act is concerned with a particular kind of opportunity, not with the outcome of the process instigated when the lessor takes advantage of that opportunity." (Emphasis original) 101 In my view, there was a review opportunity within the meaning of s 13(2) that arose on 4 March 2004 under the terms of the lease in this case. This is because on that date clause C permitted the base annual rent payable under the lease to be reviewed to reflect the fair market rental for the lease of the property. Accordingly, the respondents cannot invoke the mechanism in Div 2 of Pt 3 of the GST Act, including in particular s 15K. Is the absence of the Commissioner an impediment to relief? 102 The absence of the Commissioner is not an impediment to the relief sought by the applicant in this case. First, CSR Ltd is distinguishable from the present case. 103 The plaintiff, CSR Ltd, was the owner of certain land that was compulsorily acquired by the defendant Council. The defendant contended, and the plaintiff denied, that the Valuer-General's determination of the amount of compensation included GST. The defendant deducted a figure representing GST from its compensation payment. In the New South Wales Supreme Court, Gzell J held that the plaintiff was entitled to the entire amount of compensation determined by the Valuer-General and that the defendant was not entitled to deduct an amount for GST. Whilst strictly unnecessary to determine, his Honour expressed the view (at [15]) that there was no separate GST component, observing that "[i]f the vendor must pay GST on the consideration for sale, that impost will be included in the price the purchaser would have to pay." 104 In CSR Ltd, the defendant Council also complained that, if it did not receive a tax invoice from the plaintiff, it could not claim an input tax credit; and that, by reason of s 29-70(2) of the GST Act, the plaintiff was obliged to provide it with a tax invoice. In answer, the plaintiff relied on a private ruling from the Commissioner that there was no taxable supply. If there was no taxable supply, then the plaintiff was not obliged to give the defendant a tax invoice. Gzell J declined (at [27] to [29]) to determine whether the defendant was entitled to a tax invoice, notwithstanding that the financial interests of the defendant were involved, because: "The question whether a declaration should be made that CSR was obliged to provide a tax invoice to the Council raises an issue between the Council and the Commissioner of Taxation. The Council's complaint is that the Commissioner was wrong in the private ruling he issued to CSR. The Commissioner is not a party to the proceedings. In my view, it is inappropriate to determine the issue in the absence of the Commissioner. He ruled, in effect, that CSR was not obliged to issue a tax invoice. CSR is entitled to act upon that ruling. In those circumstances, the Court should not entertain an application to declare to the contrary in the absence of the Commissioner." 105 The applicant in this case does not contradict the Commissioner's opinion, as expressed in his private ruling that there has been a 'review opportunity'; on the contrary, it supports this ruling. Furthermore, with knowledge of the proceeding, the Commissioner has not sought to be heard on any matter in issue. It is true, as counsel for the respondents submitted, that in this case the applicant seeks relief which includes declaratory relief in the same or similar terms to that sought by the defendant in CSR Ltd: see the amended application at pars 1 to 4. If granted, these declarations affect the parties' liability to the Commissioner. These declarations are not, however, at the centre of the relief that the applicant seeks. The applicant is principally concerned to establish that the respondents cannot invoke Div 2 of Pt 3 of the GST Transition Act. In any event, the relief sought by the applicant would not contradict the Commissioner's own opinion, as expressed in the private ruling that operates between the Commissioner and the applicant. 106 The gravamen of the dispute in this case is whether a review opportunity within s 13(2) and s 13(5)(b) arose, with the consequence that the respondents are unable to avail themselves of the mechanism in Div 2 of Pt 3. If the respondents can utilise this mechanism, they can effect a change to the consideration for the lease; and, if the applicant accepts an arbitrated offer, then, after 1 July 2005, the respondents would be liable to pay the GST based on the changed consideration. If this mechanism cannot be utilised, then the respondents will pay the GST based on the consideration determined as originally agreed in the lease. 107 At issue is whether the respondents can take advantage of this statutory mechanism, so as to require the applicant, as the recipient of the supply, to pay more for the supply by way of lease than the lease itself stipulates. This is implicit in the parties' respective positions. The respondents' complaint is that the effect of the applicant's case, if successful, would be to reduce by 10% the respondents' consideration, being the consideration that was agreed pursuant to the lease. On the applicant's analysis, the respondents are liable to pay GST on the supply (and have been so liable since 4 March 2004). From the applicant's perspective, the matter in controversy is whether the terms of the lease gave rise to a review opportunity that precludes it from being required to pay a different consideration for the supply from the consideration worked out according to the lease. 108 The Explanatory Memorandum ("the EM") that accompanied the Tax Laws Amendment (Long-term Non-reviewable Contracts) Bill 2004 (Cth) confirms that Div 2 of Pt 3 has, as its primary object, the provision of a statutory mechanism for changing the consideration for supplies under non-reviewable contracts spanning 1 July 2005: see EM, pp 3, 4, 6, 11, and 22. 109 I reject the respondents' contention that the existence of a review opportunity is not relevant to the applicant; it plainly is. I also reject the respondents' contention that there is no dispute about the terms of the lease; again there plainly is. Amongst other things, there is a dispute about the proper characterisation of the consideration for the lease and the operation of clause C. The matter in controversy involves, in part, the proper interpretation and effect of the terms of the lease from which the applicant's rights derive. 110 Section 37 of the Taxation Administration Act 1953 (Cth) apparently protects the applicant from any change in the Commissioner's opinion as expressed in the private ruling that it has obtained. I express no view as to whether or not it is open to the respondents in other proceedings that involve the Commissioner to contend that there has or has not been a review opportunity. Whatever the position in this regard, it does not in this case constitute an impediment to a grant of relief: compare News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 525 per Lockhart, von Doussa and Sackville JJ. The respondents' argument about the identity of the supplier 111 The respondents' written submissions that there was no supply under s 9‑10 (2)(d) of the GST Act are set out at [48] above. As previously noted at [47], in oral argument, the respondents invoked these submissions principally to bolster their contention that no declaratory relief should be given in the absence of the Commissioner. Counsel for the respondents accepted that, as the applicant submitted, if there was no supply, then any Notice of Initial Offer under s 15K of the GST Transition Act served by the respondents would be ineffective. In oral argument, counsel for the respondents advanced little by way of argument to support the respondents' written submissions on this point. As it happened, counsel for the applicant said even less about this issue. In these circumstances, I do not propose to discuss the respondents' "no supply" argument at any length. 112 Plainly enough, as regards the lease, there was privity of contract between the original parties to the lease. As between the applicant and the respondents, there was, broadly speaking, privity of estate in relation to the covenants in the lease that touch and concern the demised property. In Queensland, the common law position is augmented by ss 117 and 118 of the Property Law Act 1974 (Qld). Pursuant to s 117, the respondents take the benefit, amongst other things, of cl 4 and clauses A, C and E. Section 118 ensures that the applicant continues to enjoy the benefit of covenants that touch and concern the land made by the original lessor to the original lessee. Bearing this in mind, for the purpose of s 13(5), as at 4 March 2004, the respondents were the suppliers under the relevant agreement, namely, the lease. As noted previously, for the purposes of sub-ss 13(1) and (2), the supply was the supply by way of lease of the exclusive possession of the demised property; and the consideration for this supply was the rent reserved. 113 It is unnecessary, for present purposes, to consider the effect of s 156‑22 of the GST Act, or, indeed, ss 6 or 12(3) of the GST Transition Act. It is also undesirable to do so because the parties have addressed little, if any, argument with respect to the operation of these provisions. 114 The respondents' submission that there was no supply is based on the mistaken premise that, because the respondents did not make a supply of the kind described in s 9‑10(2)(d) of the GST Act, they made no supply at all. Consideration of s 9‑10 shows that if the respondents made a supply by way of lease, as I accept they did, they made a supply for the purposes of the GST Act and the GST Transition Act, even though they did not make a "grant, assignment or surrender of real property" within s 9‑10(2)(d). Sub-section 9‑10(1) provides that "[a] supply is any form of supply whatsoever" (emphasis original). Sub-section 9‑10(2) expressly provides that, without limiting s 9‑10(1), supply includes any of the things listed in pars (a) to (h) of s 9‑10(2). That is, it does not follow from the fact (if it be so) that the respondents did not make a supply within s 9‑10(2)(d) that they made no supply at all. Let it be assumed that the word 'supply' in s 9‑10(1) bears its ordinary and natural meaning; and indeed the parties did not contend otherwise. The Macquarie Dictionary defines the noun 'supply' in various ways, including "the act of supplying, furnishing, providing, satisfying, etc; … that which is supplied …". The same dictionary defines the verb to 'supply' as "to furnish or provide (something wanting or requisite)" or to "satisfy (a need, demand, etc.)". The word 'supply' is therefore apt to cover the respondents' 'supply' by way of lease of the exclusive possession of the demised property in accordance with the lease. I would reject the respondents' submissions that there was no 'supply' made by the respondents under the lease. disposition 115 For the reasons stated, I have found that a review opportunity, for the purposes of s 13(2) of the GST Transition Act, arose on 4 March 2004. Accordingly, it was not open to the respondents to invoke the provisions of Div 2 of Pt 3, and in particular s 15K, of the GST Transition Act, as they have purported to do. The absence of the Commissioner is no bar to relief in this case. 116 At the hearing, the respondents requested an opportunity to make submissions on the appropriate form of relief. The applicant did not object to this course, which, in any event, is appropriate in the circumstances. I shall afford the parties this opportunity and make orders accordingly. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 22 June 2005 Counsel for the Applicant: G T Pagone Q C with A T Broadfoot Solicitor for the Applicant Allens Arthur Robinson Counsel for the Respondent: J W de Wyn Q C with F J Morgan Solicitor for the Respondent: Rockman & Rockman Date of Hearing: 24 May 2005 Date of Judgment: 22 June 2005