Australia: High Court to reconsider consideration and stamp duty in Lend Lease case

Last Updated: 11 November 2014
Article by Keshni Maharaj and Andrew Sommer

Key Points:

The High Court's decision will have far-reaching implications for the property and infrastructure industries, or anyone who uses documents similar to a development agreement.

What constitutes the "consideration for" a transfer of "dutiable property" under stamp duties legislation? The High Court is set to consider this issue again when it hears the appeal by the Victorian Commissioner of State Revenue against the Victorian Court of Appeal decision in Lend Lease Development Pty Ltd v Commissioner of State Revenue [2013] VSCA 207.

The High Court's decision will be a landmark one with far-reaching implications for the property and infrastructure industries in particular, but could also affect other industries who use documents similar to a development agreement.

The questions for the High Court

In the appeal starting on November 4 2014, the High Court will in essence revisit its decision in Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3.

It will be asked to determine whether:

  • the consideration provided for under a contract for sale of land is the consideration for the transfer of "dutiable property"; or
  • the consideration could include payments made by the purchaser under another document for other things such as improvements to be made by the vendor to the land before the purchaser takes a transfer of the land.

The development agreement in the Lend Lease case

Lend Lease and its fellow appellants (collectively referred to as LLD) entered into a development agreement with the Victorian Urban Development Authority in 2001 to improve certain parcels of land in the Victorian Harbour Precinct. The development agreement outlined the terms upon which development of the Precinct was to be completed and also provided for the sale of the land to LLD in various stages.

In particular, the development agreement required LLD to enter into a Land Sale Contract for each stage of the project, if certain criteria had been satisfied. LLD was also required to make a number of payments in relation to each stage of the project under the development agreement and this included the payment to VicUrban of a percentage of LLD's gross realisation from its development of each parcel of land.

In due course, seven parcels of land were transferred to LLD by VicUrban. An amount was specified under each of the seven contracts, as being consideration for the sale of the parcels of land. Other payments were separately payable by LLD to VicUrban under the development agreement.

The Victorian Commissioner of State Revenue assessed duty in each case on the amount paid for the relevant land under the contracts but also assessed duty on other additional amounts payable by LLD under the development agreement. These additional amounts included infrastructure contributions, gasworks remediation contributions, integrated public art contributions, Grand Plaza amounts, land and authority payments, non-monetary contributions and Goods and Services Tax. Although there were some minor variations regarding which additional amounts applied to which of the seven parcels of land, all of these additional amounts were included in one or more of the seven assessments that were raised by the Commissioner.

LLD appealed to the Victorian Supreme Court against assessments issued by the Commissioner which included, in the "dutiable value", as defined in the section 20 of the Duties Act 2000 (Vic), under each Contract, the cash consideration and the additional amounts which were to be paid under the development agreement.

The Supreme Court decision

In Lend Lease Development Pty Ltd and Others v Commissioner of State Revenue [2012] VSC 108 Justice Pagone dismissed LLD's appeal. He held that the Commissioner was right in assessing duty on both the consideration payable by LLD under the contracts and the additional amounts payable under the development agreement because:

  • the transfers of land had occurred as part of the overarching agreement between LLD and VicUrban and the development agreement was the commercial deal struck between LLD and VicUrban to facilitate the development of the land;
  • LLD's contribution to infrastructure, remediation of the gasworks site and public art were required to be paid before title was transferred and therefore these payments were required as a condition of the transfer of land and were what "moved" the transfers of land. In other words, but for these additional payments, VicUrban would not have transferred the land to LLD;
  • although the additional payments by Lend Lease could be conceived as distinct from the land itself, he did not think that payments for this "other subject matter" was separate, as it was in Bambro (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1963) 63 SR (NSW) 52; and
  • the additional payments were, "all part of, or ancillary to, the land acquired," and that the consideration under the contract and all payments under the development agreement were for the land and had "moved" the transfer of that land.

Appeal allowed: the additional amounts not part of the dutiable value

In a unanimous decision, the Victorian Court of Appeal held that Justice Pagone had erred by including the additional amounts paid by LLD under the development agreement in the dutiable value of the land that was transferred to LLD (Lend Lease Development Pty Ltd v Commissioner of State Revenue [2013] VSCA 207).

It rejected Justice Pagone's analysis, noting he had wrongly shifted his focus from the statutory question he was obliged to ask. Instead of examining the nature of the dutiable property transferred, he had erroneously looked to the land as developed.

The Court of Appeal criticised Justice Pagone for focusing too much on the development agreement rather than on the parties' obligations under each Contract, to the point that he had seemingly treated the development agreement as the document which effected the dutiable transaction. It noted that "the approach adopted by the judge is clearly at odds with the principle derived from Bambro that the existence, at the time of the transfer, of obligations to be discharged in the future that will change or transform the condition of the dutiable property ought not affect how one determines the consideration for the transfer of the land. It also flouts the principle that the focus must be on that which is to be transferred or vested or accrued by force of the conveyance".

There needed to be more than a mere connection between the additional payments made by LLD and the transfer of land for those additional payments to be included in the dutiable value of the land. Justice Pagone had incorrectly applied what was essentially a "but for" test in determining the dutiable value of the land in this composite transaction. The Court noted that this would lead to the conclusion in every case that the dutiable value of the relevant dutiable property would include all payments under the composite arrangement. In other words, in every case one would be able to conclude that "but for" the additional payments under the development agreement being paid, or agreed to be paid by the purchaser, the vendor would not have transferred the land to the purchaser under the relevant contract of sale.

It considered that, rather than applying essentially what was a "but for" test, the correct test, in a composite arrangement, was to look at each strand of the entire arrangement and to then determine the consideration that had moved the whole composite arrangement and the consideration that had moved the transfer of the dutiable property. Only the consideration that had moved the transfer of the dutiable property should have been used to determine the dutiable value.

The fact that the development agreement required certain payments to be made before the transfer of the land to LLD was of little significance in determining whether those payments were for the land.

The Dick Smith case could be distinguished because in that case the relationship between the parties was one-off, whereas in this matter there was an ongoing relationship between VicUrban and LLD.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.