Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

CHIEF COMMISSIONER OF STATE REVENUE APPELLANT

AND

DICK SMITH ELECTRONICS HOLDINGS PTY LTD RESPONDENT

Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd

[2005] HCA 3

8 February 2005

S299/2004

ORDER

1. Appeal allowed with costs.

2. Set aside the order of the Court of Appeal of the Supreme Court of New South Wales entered on 7 November 2003, and in its place order that:

(a) Appeal allowed with costs;

(b) Set aside the orders of Gzell J entered 8 January 2003, and in their place order that:

(i) The assessment made by the defendant on or about 13 July 2001 is confirmed;

(ii) The plaintiff pay the defendant's costs.

On appeal from the Supreme Court of New South Wales

Representation:

B A J Coles QC with H R Sorensen for the appellant (instructed by Crown Solicitor for the State of New South Wales)

J W Durack SC with D G Charles for the respondent (instructed by Gilbert & Tobin)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd

Stamp duty – Dutiable transactions – Sale of shares – Share acquisition agreement stipulated that a dividend would be declared on shares prior to transfer – Agreement stipulated that Purchaser was to fund dividend – Purchase price was calculated by deducting dividend amount from specified sum – Whether value of the dividend formed part of the consideration for the dutiable transaction.

Words and phrases – "consideration".

Duties Act 1997 (NSW), ss 8, 9, 11, 19, 21(1).

1. GLEESON CJ AND CALLINAN J. This appeal arises out of a disputed assessment of stamp duty, on a Share Acquisition Agreement, made under the Duties Act 1997 (NSW) ("the Act"). The dispute concerns the dutiable value of the relevant dutiable property and, in particular, the consideration for the dutiable transaction for the purposes of s 21(1)(a) of the Act. Duty was assessed on the basis that the consideration was $114,139,649. The respondent contended that it was $88,555,552. The respondent's contention was upheld by Gzell J in the Supreme Court of New South Wales[1], and by the Court of Appeal of the Supreme Court of New South Wales (Meagher JA and Sheller JA; Davies AJA dissenting)[2]. In this Court, the respondent supported the reasoning in the Supreme Court, but also advanced an alternative argument that could lead to a conclusion that both figures were wrong.