In a decision handed down on 30 January 2015, Sojitz Coal
Resources Pty Ltd v Commissioner of State Revenue  QSC
9, the Queensland Supreme Court ruled on what constitutes an
'interests in land' under the Duties Act 2001
The Commissioner has historically taken a very broad
interpretation of 'interest in land', extending it to catch
any right, power or privilege, over or in relation to land. The
Court has now ruled this approach to be incorrect, at least in the
context of the (now superseded) land rich duty provisions, with the
Supreme Court deciding that an 'interest in land' is in
fact restricted to a proprietary interest in the land. It now
remains to be seen whether the Commissioner will apply this
decision more broadly in the transfer duty context.
The case related to the acquisition by Sojitz Coal Resources Pty
Ltd (Sojitz) of more than 50% of the shares on
issue in Minerva Coal Pty Ltd (Minerva). The
Commissioner had assessed duty on the acquisition on the basis that
Minerva was a 'land rich' corporation. In reaching the
conclusion that Minerva was 'land rich', the Commissioner
included the value of mining leases held by Minerva in its
'landholdings' for duty purposes.
The question in issue on appeal to the Supreme Court was
whether, at the relevant time, a corporation's
'landholdings' included an interest in a mining lease
granted under the Mineral Resources Act 1989 (Qld).
At the relevant time, 'landholdings' was defined to mean
a 'corporation's interest in land, and
anything fixed to the land that may be separately owned from the
land...'. However an editor's note in the Act referred
to section 36 of the Acts Interpretation Act 1954 (Qld)
which expanded the definition of 'interest' in relation to
land or other property to include a 'right, power or
privilege over or in relation to, the land or other
The Commissioner submitted that this expanded definition of land
should be read so as to include a mining lease in an entity's
landholdings for duty purposes.
Justice Philip McMurdo ultimately rejected the
Commissioner's submissions and held that Minerva was not a land
rich corporation at the time of the acquisition of shares by Sojitz
because its mining leases did not form part of its
This conclusion was reached based on Justice McMurdo's view
that the expression 'interest in land' (as used in the
relevant section of the Duties Act at the time) should be read in
accordance with the ordinary meaning of that phrase - which is
confined to a proprietary interest in the land and does not include
a mining lease. As extrinsic material, the editor's note could
only be used in interpreting the expression 'interest in
land' in circumstances where that expression was unclear or
It is interesting to note that the same editor's note
appears in section 10 of the Act (which relates to transfer duty)
and the same rules of statutory interpretation will need to be
applied in determining if a more restrictive definition of
'interest' is appropriate in that context as well.
The definition of land in the Act was amended in 2012 to
specifically include reference to a 'resource authority'
(which includes a mining tenement under the Mineral Resources
Act 1989 (Qld)), so the relevance of this decision in the
context of mining tenements is limited to transactions that
occurred before that date.
However, the potential broader implications are significant.
This decision certainly impacts on the scope of the landholder duty
provisions and the same arguments may also be applied to limit the
transfer duty payable in certain circumstances.
McCullough Robertson's specialist duty and tax litigation
teams were engaged by the taxpayer to act in this appeal and are
happy to discuss the issues raised and the potential implications
for future transactions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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”
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).