Oak Brick Investment Pty Ltd & Anor v Chief Commissioner of State Revenue [2016] NSWSC 1039

Oak Brick Investment Pty Ltd & Anor v Chief Commissioner of State Revenue [2016] NSWSC 1039

The plaintiffs did not assign their call option rights and did not nominate XZ International Holding Pty Ltd as purchaser or transferee on or in connection with the exercise of the call option. The true arrangement was that, for consideration, the option deed was rescinded when the vendor entered into a new contract...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
29 July 2016
Procedural Posture
Taxes and Duties Proceeding Challenging a Duties Assessment / Principal Judgment After Objection to Assessment Was Disallowed
Outcome
The Chief Commissioner's assessment dated 22 October 2014 was revoked.
Legal Topics
['call Option Assignment Duty' 'duties Act 1997 (nsw) S 107' 'put and Call Option Deed' 'nomination of Purchaser' 'rescission of Option Deed']
['taxation' 'duties'] ['call Option Assignment Duty' 'duties Act 1997 (nsw) S 107' 'put and Call Option Deed' 'nomination of Purchaser' 'rescission of Option Deed']

Source-derived case record

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Procedural Posture

Taxes and Duties Proceeding Challenging a Duties Assessment / Principal Judgment After Objection to Assessment Was Disallowed

Legal Issues

  1. 1 ['Whether, by virtue of s 107(2)(b) of the Duties Act 1997 (NSW), the plaintiffs were to be treated as having assigned their right under the call option so that the option was exercisable by XZ International Holding Pty Ltd.' 'Whether the agreement dated 3 December 2013 involved the plaintiffs nominating XZ International Holding Pty Ltd as purchaser or transferee of the dutiable property on or in connection with the exercise of the call option.' "Whether the Chief Commissioner's assessment for call option assignment duty should be revoked."]

Ratio Decidendi

The plaintiffs did not assign their call option rights and did not nominate XZ International Holding Pty Ltd as purchaser or transferee on or in connection with the exercise of the call option. The true arrangement was that, for consideration, the option deed was rescinded when the vendor entered into a new contract directly with XZ International. That transaction was substantially economically equivalent to alternatives that might have attracted duty, but it was not within s 107(2)(b) and the Chief Commissioner's assessment was therefore revoked.

Court Disposition

The Chief Commissioner's assessment dated 22 October 2014 was revoked.

Orders

  • ["Order that the defendant's assessment made on 22 October 2014 that the plaintiffs are liable under s 107 of the Duties Act 1997 (NSW) for duty of $299,155 plus interest on the agreement dated 3 December 2013 between the plaintiffs, XZ International Holding Pty Ltd, Zhen Xin Zhong and Mo Xia be revoked." "The Court...