ALH Group Holdings v Chief Commissioner of State Revenue [2012] HCA 6

On 5 November 2003 Oakland Glen Pty Ltd entered into a contract with Trust Company Fiduciary Services Ltd (then known as Permanent Trustee Co Ltd), as trustee of the ALE Direct Property Trust. Under the contract Oakland agreed to sell a parcel of land to Trust Company.  No duty was charged on the 2003 contract, Revenue Commissioner having approved the transaction for the purposes of section 281 of the Duties Act 1997 (NSW), which concerns transactions in the nature of corporate reconstructions.

On 27 June 2008 Oakland, Trust Company and ALH Group Property Holdings Pty Ltd executed a document entitled "Deed of Consent and Assignment" under which, in essence: Trust Company agreed to assign its rights under the 2003 contract to ALH; Oakland consented to the assignment; ALH promised Oakland that it would perform Trust Company’s obligations under the 2003 contract; and Oakland released and discharged Trust Company from all liability under the 2003 contract.

In 2008 a further deed executed by ALH and Oakland cancelled the deed of Consent and Assignment.  The effect of this cancellation was that duty was not payable on the Deed of Consent and Assignment, but only if the Deed of Consent and Assignment was “an agreement for the sale or transfer of dutiable property” within the meaning of section 8(1)(b) of the Duties Act 1997.  That was the issue for resolution in the High Court.

In its judgment in ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue [2012] HCA 6 the High Court held that the Deed of Consent and Assignment, despite its title, operated as more than a mere assignment by Trustee Company to ALH of Trust Company’s rights under the 2003 Contract.  The obligations of the parties emanated from the Deed of Consent and Assignment, and not from the 2003 Contract.  The obligation to convey land requires identification of the person to whom it is to be conveyed.  The obligation of Oakland to transfer land to ALH, in place of the Trust Company, emanated from the Deed of Consent and Assignment and not from the 2003 Contract.  The Deed of Consent and Assignment was therefore an agreement for the sale and transfer of the land.  It having been cancelled, no duty was payable.