Conexa Sydney Holdings Pty Ltd v Chief Commissioner of State Revenue

1. [1]

   WARD P: I agree with Payne JA.

2. [2]

   PAYNE JA: In September 2019, Conexa Sydney Holdings Pty Ltd (the appellant) acquired all the shares in SGSP Rosehill Network Pty Ltd (“Rosehill”) for $74,700,000 with provision for adjustments. Rosehill was the owner of a water carrying pipeline which connects a recycled water plant to large industrial sites. The pipeline is buried in the ground for its entire length. Much of the pipeline (approximately 95%) is buried under Crown land. A report from KPMG commissioned by the appellant, which was provided to the Chief Commissioner (the respondent), valued Rosehill’s unencumbered land holdings and goods at $60,749,000, including $4,110,000 for a freehold property, $46,390,000 for the pipeline, and $10,249,000 for another plant and equipment related to the operation of the pipeline.

3. [3]

   The issue in the case was whether the appellant’s interest in the pipeline and related infrastructure which it acquired was, as the Commissioner claimed, an interest in land or goods for the purposes of ss 147 and 155 of the Duties Act 1997 (NSW) (“Duties Act”), or whether it was, as the appellant asserted, an indeterminate (and non-dutiable) interest that could not be characterised for Duties Act purposes as either an interest in land or goods.

4. [4]

   The primary judge, Richmond J, found that the appellant’s interest in the pipeline and related infrastructure was an interest in “goods” for the purposes of s 155 of the Duties Act and affirmed the assessment.

5. [5]

   For the reasons which follow, I have concluded that the appellant’s interest in the pipeline and related infrastructure which it acquired from Rosehill was an interest in land and the appeal should be dismissed.

Relevant Facts

1. [6]

   In 2009, the NSW government established the Rosehill Water Recycling Scheme with approval under the Environmental Planning and Assessment Act 1979 (NSW). The Recycling Scheme was a public-private partnership under the NSW Government’s Metropolitan Water Plan and aimed to deliver recycled water to southwest Sydney.

2. [7]

   Pursuant to agreements executed in August 2008, AquaNet Sydney Pty Ltd and Rosehill, both subsidiaries of Jemena Ltd, were the entities designated to construct and execute the pipeline project. Rosehill was the asset-holding entity and owned the pipeline.

3. [8]

   The pipeline requires two reservoirs to operate, one in Rosehill on land leased by Rosehill from Shell Company of Australia Ltd and the other in Woodville located on land leased by Rosehill from Parramatta City Council.

4. [9]

   Much of the pipeline (estimated at 95.37 percent) travels under Crown land. The remainder of the pipeline travels underneath privately owned land. The only land owned by Rosehill that the pipeline traverses is a Fairfield property where the pipeline originates.

5. [10]

   As at the acquisition date, aside from that ownership interest, Rosehill’s rights in respect of the lands where the pipeline lay were various. For part, Rosehill held certain registered leases, and a registered sub-lease, over privately-owned land where other portions of the pipeline were located. Over other private lands containing the pipeline, Rosehill held registered easements, access rights agreements and/or licences.

6. [11]

   The characterisation of Rosehill’s rights in the case of the Crown lands through which the vast bulk of the pipeline travels is at the heart of this case.

7. [12]

   The parties agreed on the following characteristics of the pipeline:

   1. (1)

      The pipeline is approximately 19 kilometres in length and is buried in the ground.

   2. (2)

      The pipeline is designed to provide a permanent means of water carriage.

   3. (3)

      There are three reservoirs and two pumping stations along the pipeline.

   4. (4)

      Rosehill constructed the pipeline and in order to do so either laid it in an open trench, over which the displaced soil was replaced, or used directional boring through abandoned gas mains pipes.

   5. (5)

      Where road surfaces or footpaths were disturbed in the process of laying the pipeline, they were restored and returned to use as roads and footpaths once the pipeline was installed.

   6. (6)

      The pipeline was connected to a recycled water plant in Fairfield which was developed and operated by Veolia Water Australia Pty Ltd under a plant agreement. The Fairfield plant is located at 2 East Parade, Fairfield. The pipeline runs to the boundary between Yennora and Old Guildford, it then divides into two branches which comprise the remainder of the pipeline.

   7. (7)

      The shorter of these branches travels west-north-west to the suburb of Smithfield and connects to the Marubeni power station. The longer branch travels through Old Guildford, Granville, Rosehill and Camellia where it eventually connects to Boral and CSR plants.

8. [13]

   On 30 September 2019, the appellant (known at the time as WUA Sydney Holdings Pty Ltd) acquired the entirety of the issued share capital of AquaNet and Rosehill pursuant to a share sale agreement exchanged on 25 June 2019. The vendors were Jemena Limited and SGSP (Australia) Assets Pty Ltd.

9. [14]

   Clause 4 of the share sale agreement provided that the purchase price was $74,700,000 with provision for adjustments. The conditions for completion required that AquaNet enter into a termination deed with Veolia in respect of the plant operation agreement. Pursuant to the termination deed, AquaNet paid Veolia approximately $57 million. Upon payment, the plant agreement, under which the pipeline was connected to the Fairfield plant developed and operated by Veolia, was terminated and all of Veolia’s rights, title and interest in the Fairfield plant assets were transferred to AquaNet.

10. [15]

    On 20 December 2019, the appellant’s representatives made a submission to the Commissioner regarding the assessment of duty on the transaction the subject of the share sale agreement. An estimated duty liability of $1,275,160 was paid to the Commissioner, consisting of $233,957 (described as being in respect of the surrender by Veolia to AquaNet of the Fairfield Sub-Lease) and landholder duty of $1,041,203. The submission also noted that the appellant had commissioned KPMG to undertake an independent valuation of the land holdings and other assets of Rosehill, and that the appellant was not in a position to provide a finalised statement.

11. [16]

    On 22 June 2020, the appellant provided a valuation report (“KPMG Report”) to the Commissioner along with a landholder acquisition statement. The KPMG Report identified the purchase consideration for both AquaNet and Rosehill as $70.4 million, with approximately $60.8 million attributed to the market value of the shares in Rosehill. The KPMG Report stated that the fair value of the Fairfield property was $4,110,000, and the fair value of Rosehill’s plant and equipment was $56,639,000 consisting of $46,390,000 for “piping” and $10,249,000 attributed to the remainder.

12. [17]

    On 21 March 2022, the respondent issued a Duties Notice of Assessment which assessed the appellant as liable for landholder duty in the sum of $3,326,497. This assessment was based on the KPMG Report.

13. [18]

    On 20 May 2022, the appellant objected to the assessment with reasons provided on 31 August 2022. On 23 March 2023, the respondent disallowed this objection, after which the appellant brought proceedings before the Supreme Court for review pursuant to s 97(1)(a) of the Taxation Administration Act 1996 (NSW).

14. [19]

    The primary judge affirmed the assessment and dismissed the Amended Summons: Conexa Sydney Holdings Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 628.

Primary judgment

1. [20]

   The primary judge concluded that Rosehill’s interest in the pipeline was not an interest in land but comprised goods for the purpose of s 155(1) of the Duties Act, and the appellant failed to discharge its onus of proof that the unencumbered value of the pipeline at the time of the acquisition was less than the amount on which the assessment was based, being $46,390,000.

2. [21]

   At the outset, the primary judge observed that the word “interest” in s 147 of the Duties Act is capable of many meanings depending on the context in which it is used. When the term “interest” is used in the phrase “interest in land”, it is regarded as referring to a proprietary right in the land and not a mere personal right.

3. [22]

   The primary judge found that the answer to the question of whether the pipeline is an interest in land lies in the effect of s 64 of the Water Industry Competition Act 2006 (NSW) (“WIC Act”). The primary judge held that the words in s 64 are designed to negate the position which would arise under common law, which is that where chattels are affixed to the land so as to become fixtures they form part of “the land” and are owned by the owner of “the land”. Section 64 vests ownership of the thing or things comprising the water industry infrastructure in the person identified irrespective of whether that person owns the land in, on, under or over which the thing or things are situated. The primary judge found that s 64 also “treats the thing or things which comprise water industry infrastructure as items of property separate from the land in, on, under, or over which they are situated”: at [70].

4. [23]

   In addition to the language of s 64, the primary judge gave three other reasons why on its proper construction s 64 has the effect of causing the things comprising the water industry infrastructure to retain their character as chattels despite their affixation to the land.

5. [24]

   First, there is a general principle that a statutory provision which vests in a person ownership of items that would otherwise be fixtures does not merely by virtue of conferring that right of ownership in the item confer an interest in “the land” itself: referring to Newcastle-Under-Lyme Corporation v Wolstanton Ltd [1947] Ch 92 at 103; Commissioner of Main Roads v North Shore Gas Co Ltd (1967) 120 CLR 118 at 127 and 133–4 (“North Shore Gas (No 2)”); Asciano Services Pty Ltd v Chief Commissioner of State Revenue (2008) 235 CLR 602; [2008] HCA 46 at [27]–[31]; Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228 at [75] and [161]-[163].

6. [25]

   Secondly, there are a number of decisions about statutory “severance” provisions of a similar kind to s 64 of the WIC Act where the relevant items have been treated as retaining their character as chattels. These cases included Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351; [2004] VSCA 10, Commissioner of State Revenue v Uniqema Pty Ltd (2004) 9 VR 523; [2004] VSCA 82 and Epic Energy. All these cases held that such statutory severance provisions reformulated the principles relating to property in tenant’s fixtures. The primary judge concluded that the legislature was addressing the same concerns in s 64 of the WIC Act; namely, to protect the licensee’s interests against competing claims from the landowner. The primary judge found that the legislature chose to address this concern through the same mechanism, which is to confer ownership of the pipeline on the licensee, and this approach had the same effect which is to prevent the pipelines from becoming part of the land.

7. [26]

   Thirdly, the Court of Appeal’s decision in Chief Commissioner of State Revenue v Shell Energy Operations No 2 Pty Ltd [2023] NSWCA 113 was analogous to the present case as it concerned vesting orders made under statute which had the effect of legally severing the assets concerned from the land on which they were situated. There, the taxpayer had acquired interests in power plants that were affixed to land. On the Commissioner’s appeal, the Court of Appeal found that the effect of the vesting orders was legally to sever former chattels, which had become fixtures, from the land. This had the effect that the pipeline infrastructure should be characterised as goods for the purposes of the Duties Act.

8. [27]

   The primary judge found that he was bound by the reasoning in Shell Energy to conclude that the pipeline infrastructure should be characterised as goods. In that case, Kirk JA (with whom Adamson JA and Griffiths AJA agreed) concluded that the items constituting the power stations were “goods” for the purposes of s 155(1) of the Duties Act. Kirk JA reasoned that the statutory usage of “goods” in s 155(1) encompasses the ordinary understanding of that notion at general law which includes former chattels which have been legally severed from the land. This understanding of goods includes items that are difficult but not impossible to move. Kirk JA further distinguished s 155(1) from the context in which the word “goods” was used in the legislation considered in North Shore Gas Co Ltd v Commissioner of Stamp Duties (NSW) (1940) 63 CLR 52 (“North Shore Gas (No 1)”).

9. [28]

   The primary judge made three additional points in relation to the finding that Rosehill’s interest in the pipeline was an interest in goods. The first was about the legislative history of the Duties Act. His Honour observed that in the Second Reading Speech for the State Revenue Legislation Further Amendment Bill 2009 (NSW), which introduced the landholder provisions including s 155(1), Mr Aqualina on behalf of the Minister for Finance stated that the goal was to align the tax treatment of transactions involving land with those involving goods, thereby applying landholder duty to acquisitions of both land and goods.

10. [29]

    Historically, the Stamp Duties Act 1920 (NSW) used the term “goods, wares and merchandise”. Dixon J interpreted this phrase in North Shore Gas (No 1) and found that it includes all tangible movable items, excluding intangible rights (choses in action). Starke J similarly observed that “goods, wares and merchandise” covered all movable property, excluding fixtures.

11. [30]

    The second point was in relation to the general meaning of “goods”. In Smith’s Snackfood Co Ltd v Chief Commissioner of State Revenue [2013] NSWCA 470 which concerned the interpretation of the term “goods” in s 32(2)(d) of the Payroll Tax Act 2007 (NSW), Gleeson JA held that “goods” should be understood within its specific context. In the Duties Act, the term “goods” is used but, according to Kirk JA in Shell Energy (No 1), this should not be limited by prior interpretations of expressions used in older statutes. Kirk JA explained that “goods” in s 155(1) aligns with its general meaning, which includes chattels (personal, movable property).

12. [31]

    The third point was in relation to severance. The primary judge held that a chattel that is attached to land in such a way that removing it would cause damage, ceases to be “goods” and is only considered a chattel if it is removed from the land, referring to Mills v Stokman (1967) 116 CLR 61 at 71; [1967] HCA 15; Ashgrove Pty Ltd v Commissioner of Taxation (1994) 53 FCR 452; [1994] FCA 598; and Theo Holdings Pty Ltd v Hockey (2000) 99 FCR 232; [2000] FCA 665 at [9]–[18]. Shell Energy (No 1) held that severance can include a legal severance. Here the legal severance was effected by s 64 of the WIC Act which allowed the attached items to retain their status as chattels under the law.

13. [32]

    The KPMG Report (which it will be recalled was provided by the appellant to the Commissioner) stated the fair value of the pipeline to be $46.39 million based on its current use within an ongoing water treatment business. The appellant agreed that if the pipeline’s value was to be assessed as part of a going concern, its value would match the KPMG report’s figure. A separate expert report from a Mr Collins assessed the value of Rosehill’s right to remove and sell the pipeline as “nil”. That report was excluded from evidence and there was no appeal brought on this topic. In the absence of evidence challenging the KPMG Report's valuation, the primary judge upheld the valuation of $46.39 million. Accordingly, the primary judge affirmed the assessment and dismissed the appellant’s Amended Summons.

Grounds of appeal

1. [33]

   By Notice of Appeal filed 19 August 2024, the appellant raised six grounds of appeal:

Notice of contention

1. [34]

   On 16 September 2024, the respondent filed a Notice of Contention contending that:

Consideration

1. [35]

   The principal question raised in this case is whether, when the appellant acquired the share capital in Rosehill on 30 September 2019, it thereby acquired “land holdings” within the meaning of s 155 of the Duties Act, as the Commissioner submitted, or whether the interest in the pipeline was a “novel property right” which was not subject to duty under the Duties Act, as the appellant claimed. I will first address the dispositive issue of whether the appellant acquired an interest in land for the purposes of ss 147 and 155(1) of the Duties Act.

2. [36]

   The appellant submitted that s 64 of the WIC Act does not “support a conclusion that the pipeline is ‘land’ within the meaning of the Duties Act”. It was submitted that s 64(3), which was only added in 2009 to s 64, does not reflect an intention of the Parliament that ownership of water industry infrastructure under s 64(1) constituted an interest in land. Such an inference, the appellant argued, finds no footing in the terms or the legislative history of s 64.

3. [37]

   As to the legislative purpose of s 64 of the WIC Act, the appellant submitted that it was to protect the investment outlay made by a private sector entity which installed water industry infrastructure on, in or under another’s land. Section 64 operates as a legal device of “constituting novel property rights to confer legal protection of an economic interest” against the owner of such land. In other words, s 64 prevents landowners from being entitled to the advantage of the water industry infrastructure and guards against the investor losing its economic investment in the infrastructure asset.

4. [38]

   The appellant submitted that to protect that investment it was unnecessary for Parliament to deem the investor’s statutory ownership of the water industry infrastructure to be an interest in “land” – and nothing in the terms of the WIC Act as originally enacted, or as amended in 2009 or 2011, indicates otherwise.

5. [39]

   The appellant submitted that the respondent had failed to show how “[a]n underground pipeline is a ‘tenement’ or ‘hereditament’” and that, as a matter of law, the pipeline is thus a land holding of the landholder. It was submitted that to say that a pipeline can be the subject of an estate or interest, and can be inherited, says nothing about whether this pipeline is a “land holding” in New South Wales. It was submitted that the principles established by North Shore Gas (No 2), Asciano and Northern Territory v Collins (2008) 235 CLR 619; [2008] HCA 49 demonstrate that Rosehill's ownership of the pipeline was not intended to create an interest in land. Such reasoning, it was submitted, is “fallacious” and has been consistently rejected by the High Court: per Windeyer J in North Shore Gas (No 2).

6. [40]

   The respondent submitted that the WIC Act provides for ownership of water industry infrastructure and it is common ground that it gave Rosehill its “interest” in the pipeline. To establish that ownership of the pipeline is an interest in “land” within the meaning of the Duties Act, the respondent relied on three propositions.

7. [41]

   First, a permanent underground pipeline falls within the general law meaning of “land”. The respondent argued that this general law meaning is broad and inclusive: it is a three-dimensional concept encompassing not only the earth’s surface but also the space above and below it. Fixed contents within that space, such as the pipeline in this case, are part of the land. The respondent relied on passages in Brendan Edgeworth, Butt’s Land Law (7th ed, Lawbook Co, 2017), Chief Commissioner of State Revenue v Pacific National (ACT) Limited (2007) 70 NSWLR 544; [2007] NSWCA 325 at [73]-[74], the Dictionary to the Duties Act which states that “land” includes a “stratum”, as well as Trust Company Limited v Chief Commissioner of State Revenue [2007] NSWCA 255 at [49]. The respondent submitted that s 21 (now Schedule 4) of the Interpretation Act 1987 (NSW) which defines “estate” and “land” reinforces this broad interpretation:

8. [42]

   The Duties Act’s broader context was also said to favour a wider definition of “interest in land”. Section 163H of the Duties Act gives the Chief Commissioner discretion to grant exemptions or concessions where imposing liability would be unjust. This provision implies that a broad construction of “land” is consistent with the statutory scheme which seeks to ensure equitable application of the Act.

9. [43]

   Secondly, the pipeline is “land” under the Duties Act regardless of the fact that it is separately owned from the surrounding land. The concept of “land” under the Duties Act includes the notion that land is divisible into separate parts which may be owned by different individuals or entities. This interpretation aligns with general law principles and the statutory inclusion of “stratum” within the definition of “land”. As articulated in Pacific National, land can be divided both vertically and horizontally, allowing structures or strata to exist independently of the land above, below, or beside them. Ownership is not a determinant of whether something constitutes land under this framework.

10. [44]

    The respondent observed that cases have consistently upheld this principle. For example, in Resumed Properties Department v Sydney Municipal Council (1937) 13 LGR (NSW) 170 at 172 (Roper J) and Glentham Pty Ltd v City of Perth [1986] WAR 205 at 206-207 (Burt CJ) and 211 (Wallace J), it was held that a single floor of a building was considered “land” under general law and the Interpretation Act. Similarly, in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 91; [1971] HCA 9 (Windeyer J, Barwick CJ agreeing), the High Court found that a landowner could retain ownership of the underlying land while transferring ownership of a building, effectively creating separate ownership of a stratum. This principle of divisible ownership applies broadly to other cases including where fixtures or improvements occupy a defined space below the surface.

11. [45]

    In taxation and duty cases, the respondent observed that courts have also reinforced this understanding. If a landowner transfers fixtures without physically severing them, those fixtures remain classified as land. The transferee acquires at least an equitable interest, if not a legal one, in the land. Decisions in cases such as Metal Manufacturers v Commissioner of Taxation [1999] FCA 1712 and Eastern Nitrogen Ltd v Commissioner of Taxation (2001) 108 FCR 27; [2001] FCA 366 demonstrate that fixtures, as part of the land, retain their legal characterisation even when subject to separate ownership. Applying these principles to the present pipeline, the respondent submitted that the pipeline here constitutes land even when its ownership is distinct from the surrounding land. This interpretation coheres with the statutory and common law understanding of land as encompassing three-dimensional divisions.

12. [46]

    Thirdly, s 64(1) of the WIC Act explicitly acknowledges the alienability of water infrastructure and allows for the acquisition of “title” to such infrastructure although the surrounding land may be owned by another party. This aligns with the characterisation of the pipeline as land. The fact that water infrastructure may be owned by a party other than the freehold owner of the surrounding land does not undermine this conclusion. Section 64(3) of the WIC Act was said to support this conclusion. This provision was introduced as part of the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW), a legislative reform aimed at addressing the relationship between the ownership rights conferred, inter alia, by s 64(1) of the WIC Act and the principle of indefeasibility of title under s 42 of the Real Property Act 1900 (NSW). The inclusion of s 64(3) in the WIC Act ensured that the ownership of water industry infrastructure specified in s 64(1) prevailed over title established by s 42 of the Real Property Act.

13. [47]

    The question whether the Duties Act’s conception of an “interest in land” extends to this pipeline is further supported by the meaning of “interest” in land under the Duties Act. The respondent submitted that “interest” is broadly defined in the Act’s Dictionary to include “an estate or proprietary right”. While the term “estate” is broadly interpreted in the Interpretation Act to encompass various rights and claims, its application in the Duties Act has been held to imply proprietary rights in land. Clause 4 of the Dictionary to the Duties Act elaborates that certain statutory rights, such as mining leases under the Mining Act 1992 (NSW), can give rise to an “interest in land”, including fixtures affixed under the authority of such leases. However, specific statutory rights, such as exploration licences or carbon sequestration rights, are explicitly excluded from the definition.

14. [48]

    The respondent also relied on the legislative history, including amendments introduced by the State Revenue Legislation Further Amendment Act 2012 (NSW), which clarifies that statutory rights can qualify as “interests in land” for duties purposes, even if they may not be recognised as such under general property law. It was submitted that the characterisation of an interest in land under the Duties Act is not strictly dictated by how it is classified under other statutes. For instance, a petroleum title, described as personal property under the Petroleum (Onshore) Act 1991 (NSW), is excluded, and forestry rights, deemed an “interest in land” under the Conveyancing Act 1919 (NSW), are similarly excluded for duties purposes. This demonstrates that the classification under non-duties legislation does not necessarily determine whether an asset qualifies as an interest in land for duties purposes. Additionally, cl 4(1A) of the Dictionary to the Duties Act allows for items physically affixed to land by a person with another recognised interest in land to qualify as an “interest in land”, independent of the general law of fixtures. This expands the scope of what may constitute an interest in land under the Duties Act.

15. [49]

    The respondent submitted that the primary judge and the appellant did not address these implications or analyse the impact of cl 4 of the Dictionary to the Duties Act, which distinguishes this case from earlier cases involving different statutes such as North Shore Gas (No 1), North Shore Gas (No 2), and Asciano.

16. [50]

    The respondent submitted that the question of whether rights under s 64 of the WIC Act constitute an “interest” in land under the Duties Act does not require a broad determination of the full scope of “interest” in land. An “interest” typically includes estates or proprietary rights and may extend to certain statutory rights concerning land. The respondent submitted that when a statute explicitly provides for ownership of infrastructure travelling over land owned by another entity, it confers a proprietary interest in that land. As such, s 64(1) did not establish a novel legal category. Instead, it vested ownership of the water infrastructure to the designated persons, aligning with established principles of property law. Thus, it was submitted that the rights granted under s 64(1) constitute a proprietary interest in land within the framework of the Duties Act.

17. [51]

    Whether the appellant’s interest in the pipeline and associated infrastructure at the acquisition date is an “interest in land” or “goods” or an indeterminate (and non-dutiable) interest depends on the construction of the Duties Act and the WIC Act.

18. [52]

    The critical question here of whether Rosehill’s ownership of the pipeline is an interest in land for the purposes of the Duties Act involves answering the following questions:

    1. (1)

       What is an interest in land within the meaning of the Duties Act?

    2. (2)

       What is the nature of the appellant’s interest in the pipeline recognised or conferred by the WIC Act?

    3. (3)

       Is the interest identified in answer to question (2) an interest in land within the meaning of the Duties Act?

19. [53]

    There was no dispute about the relevant principles of statutory construction which involves consideration of text, context and purpose. In SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34, Kiefel CJ, Nettle and Gordon JJ said:

20. [54]

    Chapter 4 of the Duties Act imposes landholder duty on the acquisition of an interest in a private landholder. Section 155(1) of the Duties Act charges duty on the “unencumbered value of all land holdings and goods of the landholder in New South Wales”. Section 155 provides:

21. [55]

    Sections 148 and 149 identify the circumstances in which liability for duty arises and define what constitutes a “relevant acquisition”:

22. [56]

    Section 150 identifies the meaning of a person having an “interest” or “significant interest” in landholders:

23. [57]

    It is common ground that when the appellant acquired the share capital in Rosehill on 30 September 2019, the appellant made a “relevant acquisition” in a “private landholder” for the purpose of Chapter 4 of the Duties Act. A landholder includes a private company that has land holdings in New South Wales with a threshold value of $2,000,000 or more: s 146(1). A landholder is a private landholder if it is a private company: s 146(2). There is no dispute that, at the time of the acquisition effected by the share sale agreement, Rosehill was a private landholder (having landholdings with a threshold value of $2 million) and the appellant acquired a significant interest in Rosehill within the meaning of s 150 of the Duties Act, being 100% of the interest.

24. [58]

    The question is whether and, if so, how the pipeline held by Rosehill is encompassed in the phrase “all land holdings and goods” of Rosehill, being the landholder. The meaning of this phrase must be ascertained from the text, context and purpose of the Duties Act. The extent to which general law principles are applied to ascertain this meaning must also be informed by the statutory context of s 155(1) of the Duties Act.

25. [59]

    In Risk v The Northern Territory of Australia and Another (2002) 210 CLR 392; [2002] HCA 23 at [26]-[36], Gleeson CJ, Gaudron, Kirby and Hayne JJ explained, as with the meaning of any word, the meaning of “land” depends on the context and purpose of the legislation in which it appears. Gummow J also observed at [83] that the question of whether the seabed and waters above the ground are “land” in the context of particular legislation must be resolved by “regard to the text of the statute as a whole, and the subject, scope and purpose of the statute and against the legislative history and antecedent circumstances”.

26. [60]

    As Leeming JA explained in Stamford Property Services Pty Ltd v Mulpha Australia Ltd (2019) 99 NSWLR 730; [2019] NSWCA 141:

27. [61]

    The concepts of an “interest” in land, “land holdings” and “land” are non-exhaustively defined in the Duties Act. As to the term “land holdings”, s 147 of the Duties Act provides:

28. [62]

    An “interest” is defined non-exclusively in the Dictionary:

29. [63]

    Clause 4 of the Dictionary to the Duties Act makes it clear that an “interest in land” within the meaning of s 155 of the Duties Act is not the same as an interest in land at common law:

30. [64]

    In TEC Desert Pty Ltd v Commissioner of State Revenue (Western Australia) (2010) 241 CLR 576; [2010] HCA 49, the High Court explained that mining tenements and fixtures thereon were not interests in land at common law or under the then Mining Act 1904 (WA). Clause 4 of the Dictionary to the Duties Act, including the exclusions in cl 4(2), was introduced in 2012 as a legislative response to TEC Desert.

31. [65]

    The word “land” is defined non-exclusively in the Dictionary as:

32. [66]

    In its predecessor, the Stamp Duties, a definition of “stratum” was included in the definition of “Land” in s 3:

33. [67]

    Sections 147 and 155 were inserted by the State Revenue Legislation Further Amendment Bill 2009 (NSW). In the Second Reading Speech by John Aqualina (on behalf of the Minister for Finance), it was said that the amendments were introduced in order to “provide consistency with the tax treatment of direct transactions, landholder duty will apply to the acquisition of land and goods”. Further, “[t]he bill introduces a general anti-avoidance provision for duties”: Legislative Assembly, New South Wales, Parliamentary Debates (Hansard), 17 June 2009, 16248. Plainly, ss 147 and 155 were part of an attempt to broaden the Duties Act base and to provide consistency with the tax treatment of direct transactions. The sections underline the fundamental nature of the change from taxing instruments (as was generally the case under the Stamp Duties Act) to taxing transactions effected by the Duties Act.

34. [68]

    Section 147A of the Duties Act was introduced with effect from 24 June 2020, after the relevant acquisition in this case. It is accepted that this section does not apply to the questions of construction in this case.

35. [69]

    There is no dispute that the pipeline with associated infrastructure was affixed to the land and would, ordinarily, be regarded as a fixture and form part of the land. The law recognises that something “annexed to the land becomes part of the land”: e.g., Holland v Hodgson (1872) LR 7 CP 328 at 334. The pipeline and associated infrastructure are buried in the ground. They are intended to provide a permanent means of water carriage and remain in the ground indefinitely.

36. [70]

    The character of the pipeline as part of the land is not affected by the fact that the pipeline is owned by an entity other than the proprietor of the surrounding land. It is possible for a landowner to own one part of land whilst a third party owns a separate stratum of the land. Land can be divided, and land divided up may consist partly of bare land, partly of tunnels, partly of other structures. As Basten JA said in Pacific National, in a passage not doubted by the High Court on appeal:

37. [71]

    In Butt’s Land Law (7th ed, 2017), the author observed at [2.10]:

38. [72]

    In Bursill, the High Court determined a dispute about who owned a building located on Bursill’s land. Under the usual principles, Bursill would own a building erected on its own land, but Berger, who was Bursill’s neighbour, claimed that Berger owned the building on Bursill’s land. The Court found that the building had been transferred by Bursill’s predecessor to Berger’s predecessor and that the transfer was not defeated by the indefeasibility provisions of s 42 of the Real Property Act.

39. [73]

    It is common ground that the definitions in the Interpretation Act apply in construing “land holdings” under the Duties Act.

40. [74]

    The Interpretation Act defines the terms “estate” and “land”, as appearing in other NSW Acts (subject to any contrary intention in the Act concerned), as follows:

41. [75]

    “Land” is thus broadly defined to include tenements and hereditaments. The meaning of those terms was considered by Jacobs J in Re Lehrer and the Real Property Act 1900-1956 (1960) 61 SR (NSW) 365 where his Honour explained that “tenement” refers to anything holdable of a permanent nature connected with land, while “hereditament” encompasses all interests in real property capable of inheritance.

42. [76]

    In the present case, for nearly the whole of its length, the pipeline occupies a stratum beneath the surface of the land under which it travels. As I will explain, by reference to rights granted by s 64 of the WIC, the pipeline is a permanent feature of the land. It is, by its nature, connected with land. An owner of the pipeline is capable of transferring that ownership interest, including by inheritance.

43. [77]

    In Metropolitan Railway Co v Fowler [1893] AC 416, the House of Lords held that a tunnel fell within the meaning of hereditament and tenement. The issue in that case was whether the company’s rights under the Metropolitan and District Railways (City Lines and Extensions) Act 1879 (UK) with respect to a tunnel constituted an easement or a hereditament. If it was a hereditament or a tenement, then it was an interest in land and subject to land tax. Each of the members of the House of Lords came to the conclusion that the tunnel was a hereditament or a tenement. Lord Watson said at page 427 that the tunnel would be land whether or not it is “severed in title”:

44. [78]

    In Clos Farming Estates P/L (rec and mgr appntd) v Easton and Anor [2001] NSWSC 525 Bryson J addressed Metropolitan Railway in the following passage (emphasis added):

45. [79]

    A statutory right to exclusive possession of a stratum of land occupied by a pipeline may create an interest in that stratum of the land for the purposes of the Duties Act.

46. [80]

    Turning then to the specific interest created under the WIC Act. The high-water mark for the appellant’s submission about the interest here engaged being an indeterminate (and non-dutiable) statutory interest is the dicta of Windeyer J in North Shore Gas (No 2) at page 131:

47. [81]

    His Honour’s conclusion, however, must be seen in the context of the statutes the subject of North Shore Gas (No 2). As Windeyer J explained at 130:

48. [82]

    Paraphrasing Windeyer J, the critical tasks here are:

    1. (1)

       Identifying the character (or nature) of the statutory right(s) of Rosehill to:

    2. (2)

       Having identified the character or nature of Rosehill’s statutory right(s) determining if those rights amount to an interest in land within the meaning of the Duties Act.

49. [83]

    As to the approach to be adopted in addressing these questions, I agree with Basten JA in Pacific National that any answer to the present questions cannot be gleaned from analysing the two North Shore Gas Co cases:

50. [84]

    Before assessing the specific interest in the pipelines under the WIC Act, it is important to note that the concept of “property” is a legal one and is “ultimately validated by some social or collective judgement about the legitimacy of the claim involved”: Janice Gray et al, Property Law in New South Wales, (5th ed, 2022 LexisNexis) at [5.10]; see also Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 276-7 (Latham CJ).

51. [85]

    In Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53, Gummow J explained the distinctions between property rights, possession and ownership:

52. [86]

    The joint judgment in Yanner v Eaton (Gleeson CJ, Gaudron, Kirby and Hayne JJ) explained that the word “property” refers to a description of a legal relationship with a thing and there can be many kinds of such a legal relationship:

53. [87]

    Rights with respect to a “property” may take different forms depending on the type of property as recognised in the relevant statute. Different statutes may establish different types of proprietary rights in distinct ways. There is no single, uniform rule that universally defines what constitutes a proprietary right. The question to be asked is what the particular statute creating or conferring the interest or right sought to create or confer.

54. [88]

    In 1994, the Council of Australian Governments (“COAG”) endorsed a framework of initiatives for the water industry to run over a seven-year period. In 2003, COAG agreed to refresh its 1994 water reform agenda by developing a new National Water Initiative (“NWI”). The NWI was agreed as the national blueprint for water reform to provide greater certainty for the water industry and provide long-term benefits for the environment.

55. [89]

    In NSW, in 2006, the Water Industry Competition Bill 2006 (NSW) was introduced. The Minister explained in the second reading speech:

56. [90]

    At the heart of the case are sections 63 and 64 of the WIC Act which originally provided:

57. [91]

    The Explanatory Note to the Water Industry Competition Bill 2006 explained:

58. [92]

    Section 63 of the Act assumes that the interest created by the WIC Act may otherwise have attracted an annual or other periodic or special charge levied by a local council or roads authority. Section 63 is only necessary on the assumption that some water industry infrastructure is land and is thereby otherwise chargeable with rates by local councils or a road authority.

59. [93]

    From the beginning, s 64(1) of the WIC Act declared full ownership of the pipeline in Rosehill. As recognised in Union Trustee Company of Australia v Federal Commissioner of Land Tax (1915) 20 CLR 526 at 530; [1915] HCA 68, ownership entails a proprietary interest in the subject property. The right granted by s 64 is a proprietary right, permitting the owner of the pipeline to sell or mortgage the pipeline, regardless of the ownership of the land over which the pipeline travels and regardless of whether, on general law principles, the pipeline was a fixture, the ownership of which would pass to the owner of the land. The new owner (or mortgagee) of the pipeline enjoys the same rights of ownership of the pipeline travelling in the stratum of land where the pipeline has been laid. It is a right which is transferable without restriction, including by inheritance. It is a right over that stratum of land where the pipeline travels, which right is given priority over all other estates and interests in the land, including the land in, on under or over the pipeline. Section 64 confers an exclusive use of a piece of land, being the stratum of land occupied by the pipeline. The appellant, by the WIC Act, has the right to exclude all others from that stratum of land, giving the right to control and exploit the stratum. The appellant is granted the right to use or enjoy the pipeline in the stratum of land in which it is fixed, by conveying recycled water, for reward, using that pipeline. The appellant acquired the right to alienate the pipeline, which right of alienation necessarily includes the pipeline in the existing stratum of land it occupies.

60. [94]

    In 2009, s 42(3) of the Real Property Act was introduced by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW):

61. [95]

    In the Second Reading Speech to the Real Property and Conveyancing Legislation Amendment Bill 2009 (NSW), Mr Collier, Parliamentary Secretary said:

62. [96]

    The clear purpose of these amendments was as described: to amend “those Acts that are intended to create unrecorded statutory interests in land” and “to confirm that the provisions of the identified Act will override section 42 of the Real Property Act” at 13770.

63. [97]

    The Explanatory Note to the Real Property and Conveyancing Legislation Amendment Bill 2009 explained:

64. [98]

    One of the identified Acts “that are intended to create unrecorded statutory interests in land” was the WIC Act. Section 64(3) was also introduced by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW):

65. [99]

    As explained in Butt’s Land Law (7th ed, 2017) at [12.940]:

66. [100]

    The “risk of ambush” referred to arose from the operation of subsequent laws creating interests in land which potentially overrode an otherwise indefeasible title. Such an issue arose, but was not ultimately dispositive, in Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472; [2004] HCA 59. See also Pamela O’Connor, “Public Rights and Overriding Statutes as Exceptions to Indefeasibility of Title” (1994) 19 Melbourne University Law Review 649. The position is acute where “a later statute creates an interest in land of a kind that cannot be recorded or registered – for example, where the Real Property Act 1900 lacks a procedure by which the interest can be registered or recorded, or because the interest is of a non-proprietary nature”: Butt’s Land Law (7th ed, 2017) at [12.940] (footnotes omitted).

67. [101]

    It is true, as the appellant submitted, that s 64(3) was added to the WIC Act in 2009, after the Act was originally enacted in 2006. I have concluded, however, that s 64(3) was designed to make clear what was always the intention of s 64(1) of the WIC Act. That statutory intention was to confirm that the unrecorded statutory interest in land created by s 64(1) would override the interest in that land recorded pursuant to s 42 of the Real Property Act. Originally, this statutory purpose was given effect to in reliance on the later enacted statute principle, as discussed in Hillpalm. Section 64(3) confirmed and made clear what had always been the intention of s 64(1). The unrecorded statutory interest in land created by s 64(1) has effect despite anything contained in s 42 of the Real Property Act.

68. [102]

    In 2011, s 64 of the WIC Act was again amended. It now provides:

69. [103]

    Mr Baird (the then Treasurer) explained the reason for the amendments in the Second Reading Speech thus:

70. [104]

    Dealing first with the text, s 64 of the WIC Act declares the continuing ownership of the pipeline, in the stratum of land that it is laid, despite the affixation of the pipeline to the land. The section confers a statutory protection on the owner of the pipeline from interference with that stratum of land occupied by the pipeline. The owner of the pipeline is entitled to exclude all others from interfering in any way with that stratum of the land which the pipeline occupies. The text of s 64 suggests strongly that the interest of the owner of the pipeline conferred by the section is a statutory interest in land.

71. [105]

    If the land “in, on, under or over which” the pipeline is situated were to be sold, the effect of s 64(1) is that that stratum of land that the pipeline infrastructure occupies could only be alienated subject to the continuing statutory rights to ownership of the pipeline infrastructure. Equally, as occurred in this case, the owner of the pipeline infrastructure was entitled to sell or mortgage the pipeline infrastructure and to confer upon the purchaser or mortgagee, via s 64 of the WIC Act, the same statutory protection of the occupation of that stratum of land that the pipeline infrastructure occupies.

72. [106]

    As I have said, s 64(3) merely confirms what is already the effect of s 64(1), which is to protect the unrecorded statutory interest in land of the owner of the pipeline infrastructure. Section 64(3) makes clear that any claim made by the registered proprietor of the land through which the pipeline travels, is subject to the owner of the pipeline’s interest in that stratum of land that the pipeline infrastructure occupies. Section 64(3) is another strong textual indication that s 64(1) confers an interest in land. Section 64(3) effectively protects the ownership interest of the pipeline owner over the stratum of land through which the pipeline travels.

73. [107]

    Context supports the conclusion that s 64 of the WIC Act confers a statutory interest in land. Clause 4 of the Dictionary to the Duties Act elaborates that certain statutory rights, such as mining leases under the Mining Act 1992 (NSW), can give rise to an “interest in land”, including fixtures affixed under the authority of such leases. However, specific statutory rights, such as exploration licences or carbon sequestration rights, are explicitly excluded from the definition. Additionally, cl 4(1A) of the Dictionary allows for items physically affixed to land by a person with another recognised interest in land to qualify as an “interest in land”, independent of general law analyses of fixtures. This expands the scope of what may constitute an interest in land under the Duties Act.

74. [108]

    At least 95% of the pipeline lies on public lands, and in respect of the remaining 5% the land is either owned by Rosehill or otherwise located on private lands in relation to which Rosehill has a proprietary interest of some type. The WIC Act defines “water industry infrastructure” to mean “water infrastructure” and “sewerage infrastructure”. “Water infrastructure” is defined in the Dictionary as:

75. [109]

    “Sewerage infrastructure” is defined as:

76. [110]

    Section 58A provides the authority for the carrying out of work connected with the construction, maintenance or removal of water industry infrastructure that forms part of a scheme in or under a public road or public reserve:

77. [111]

    Division 2 of Part 6 of the WIC Act provides statutory authority to an authorised licensed network operator to enter any land to conduct inspections, maintenance and repairs. The central provision of Division 2 is s 65B:

78. [112]

    These powers are subject to various restrictions identified in the WIC Act including that notice of entry, specifying the intended date of entry (at least two days hence), must be given before an authorised licensed network operator exercises a power of entry under Division 2 (s 65C); while use of force may be used to gain entry to land (save residential land) under a Division 2 power, that may only be done if authorised by the authorised network operator in writing (s 65); and entry to residential premises may only be had, under Division 2, with the consent of the occupier (or owner) or under the authority of a warrant of entry (s 65G). Subject to these restrictions, the owner of the pipeline is granted the right to enter any land to conduct inspections, maintenance and repairs of the pipeline.

79. [113]

    As to purpose, no doubt it is correct, as the appellant submitted, that one aspect of the intention of s 64 of the WIC Act, discerned from the second reading speech to the Water Industry Competition Amendment Act 2011 (NSW), was to protect water infrastructure owners from potential claims by landowners of land on which the infrastructure is installed. The WIC Act, however, goes further and recognises the interest of the owner of the infrastructure by providing a priority over all other estates and interests in the stratum of land occupied by the pipeline. The ownership interest conferred by s 64 of the WIC Act is unaffected by the sale or disposal of the land in, on under or over the pipeline. The WIC Act affects the legal relationship between a water infrastructure owner and the owner of the surrounding land “in, on, under or over which” the pipeline is situated.

80. [114]

    Whilst, of course, language used in a second reading speech cannot be preferred to the words used in an Act, the language used in the Second Reading Speech to the Real Property and Conveyancing Legislation Amendment Bill 2009 speaks strongly in favour of a conclusion that s 64 was intended to create a statutory interest in land. As the Parliamentary Secretary said, the statutory intention of provisions such as s 64 of the WIC Act was to create a statutory interest in land. The amendment effected by the introduction of s 64(3) merely confirmed that this particular statutory interest in land must take priority over the interests recorded on the Torrens register.

81. [115]

    Text, context and purpose all support the conclusion that the interest of the owner of the pipeline conferred by s 64 of the WIC Act is an interest in the stratum of land occupied by the pipeline.

82. [116]

    Unless I were compelled not to do so by clear authority, I would conclude that, within the meaning of ss 147 and 155 of the Duties Act, the ownership interest conferred and protected by the WIC Act is an “interest in land”.

83. [117]

    It is thus necessary to consider the appellant’s submission that there are cases standing in the way of the conclusion I prefer. The appellant’s submissions relied heavily on three cases, North Shore Gas (No 2), Asciano and Epic Energy for the proposition that the appellant’s interest in the pipeline infrastructure was not an interest in land. Each of those cases, however, is clearly distinguishable.

84. [118]

    In North Shore Gas (No 1), the issue was whether gas pipes could be classified as “goods, wares, and merchandise” for the purpose of a stamp duty exemption in the Stamp Duties Act 1920-1933 (NSW). The High Court held that they could not. Manly Gas Co had statutory rights to lay and remove gas pipes, but the enabling statute, the Manly Gas-light and Coke Company (Limited) Act 1884 (NSW), did not address ownership of the pipes.

85. [119]

    The Commissioner argued that the pipes constituted land. The majority of the High Court agreed, holding that the pipes were part of the land. Dixon J reasoned that the pipes’ fixation, permanence, and integration with the soil meant they were inseparable from the land they displaced, forming a space that constituted land: at 67-8. Although the relevant statutory rights allowed removability, these qualities were insufficient to alter the pipes’ classification as land. Rich and McTiernan JJ concurred.

86. [120]

    In North Shore Gas (No 2), the High Court addressed a different question, whether the statutory rights to lay and maintain pipes conferred an interest in land for statutory compensation purposes – that was said to be “the only relevant question”: at 125. The Court held that the statutory rights did not grant such an interest. The joint judgment emphasised that the mere exercise of a statutory right to lay and remove gas pipes did not vest the gas company with an interest in the land. Windeyer J suggested that while the pipes themselves might be considered land, the statute did not confer an interest in that land.

87. [121]

    The reasoning in these cases was based on the specific statutory frameworks being addressed. The same can be said of a case relied upon in North Shore Gas (No 2), namely Newcastle-under-Lyme Corporation, where statutory rights to lay and remove pipes did not confer an interest in the land they occupied by reason of the lack of a clear statutory intention to do so.

88. [122]

    These authorities differ from the current case in critical respects. The Duties Act contains a quite different statutory framework and taxing power to that considered in the North Shore Gas cases. Section 64 of the WIC Act expressly recognises and protects the continuing ownership of the pipeline infrastructure. The WIC Act in general and s 64, in particular, recognises and protects an ownership right. The owner of the pipeline enjoys a statutory priority in relation to that stratum of land occupied by the pipeline, over the owner of the Torrens land surrounding the pipeline. I do not accept the appellant’s submission that in the present case if the land over which the pipeline travelled was resumed for a public purpose the value of the company would be destroyed but it would have no claim against the acquiring authority for that loss of an interest in land pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW).

89. [123]

    North Shore Gas (No 2) concerned statutory rights limited to laying and maintaining the mains and pipes. While the company “had something more than a mere revocable licence, and it would have had a right of action for any harm done to its main and pipes” (Windeyer J at 134), the statutory right did not extend to the explicit protection of ownership with respect to the mains and pipes that s 64 of the WIC Act does. The legislative framework in the North Shore Gas cases was very different to the present case. If anything, the North Shore Gas cases underscore the importance of statutory language in determining the application of the Duties Act and the legal characterisation of rights recognised and protected by the WIC Act.

90. [124]

    The High Court's decision in Asciano followed an appeal from this Court’s decision in Pacific National and addressed issues relating to the characterisation of a rail infrastructure access agreement under the Duties Act.

91. [125]

    In Pacific National, the Commissioner argued that an access agreement granting Pacific National rights to use rail infrastructure was subject to lease duty, which applied to agreements conferring a “right to use land”. The rail infrastructure was owned by Rail Access Corporation, though situated on land owned by the State Rail Authority. The Chief Commissioner contended that certain infrastructure, such as tunnels and drainage works, constituted “land” in their own right separate from the underlying land.

92. [126]

    The Court of Appeal agreed with this interpretation, with Hodgson JA (with whom Ipp JA agreed) observing that features like cuttings, drainage works, and tunnels are either configurations of land or so integrated into land as to be indistinguishable from it. This conclusion was consistent with the reasoning of Basten JA and affirmed that fixed infrastructure can be characterised as land even when statutory provisions create separate ownership of the infrastructure and the underlying land.

93. [127]

    By the time the case reached the High Court in Asciano, the characterisation of the rail infrastructure as land was no longer in issue. The taxpayer by that stage had conceded a use of land was involved in its freight operations: at [5]. The issue for the High Court was whether the access agreement itself was the mechanism “by which” the taxpayer acquired the right to use land. The High Court upheld the Court of Appeal's decision, concluding that the relevant agreement conferred the right to use land.

94. [128]

    The appellant in the present case relied heavily upon certain remarks in Asciano concerning whether the rail access legislation at issue in that case conferred an “interest in land”. The appellant relied on the finding that “no greater rights or interests should be taken as conferred upon the undertakers of a statutory right or duty than are necessary for the fulfilment of the object of the statute”: at [27]. So much must of course be accepted, but these observations do not affect the correct characterisation of the rights or interests conferred under s 64 of the WIC Act for the purposes of s 155 of the Duties Act. The legislation in Asciano did not include provisions equivalent to s 64 of the WIC Act, nor did the legislation in Asciano provide that the rights of rail access overrode the indefeasibility of title of an owner of land. The legislative context in Asciano thus differs significantly from that of the WIC Act.

95. [129]

    In Epic Energy, the Western Australian Court of Appeal considered the effect of statutory provisions conferring ownership of pipelines that would otherwise be a fixture. The central issue was whether gas pipelines and associated infrastructure owned by the taxpayer were “land” for the purposes of s 76AP(2) of the Stamp Act 1921 (WA). The term “land” was defined in s 76(1) as (a) any estate or interest in land; and (b) anything fixed to the land including anything that is, or purports to be, the subject of ownership separate from the ownership of the land.

96. [130]

    The Court found that the pipelines, as a consequence of s 57 of the Petroleum Pipelines Act 1969 (WA) and s 40(a) of the Dampier to Bunbury Pipeline Act 1997 (WA), did not constitute “land” under paragraph (a) of the definition in s 76(1) of the Stamp Act. McLure P, with whom Buss and Murphy JJ agreed, explained that the appellants’ entitlement to the pipelines as “land” depended on statutory provisions, not general law, which treats fixtures as part of the real property. Section 57 of the Petroleum Pipelines Act preserved the pipelines status as personal property even when attached to land, making them independent of land ownership. This interpretation was supported in s 40(a) of the Dampier to Bunbury Pipeline Act which states that pipelines do "not become a part of the land”.

97. [131]

    However, the pipelines were “land” within the meaning of paragraph (b) of s 76(1) because the taxpayer had an interest in the land to which the pipelines were affixed (and hence the pipeline was something affixed to land that is subject of ownership separate from ownership of the land).

98. [132]

    The decision of the WA Court of Appeal in Epic Energy does not establish a general principle about whether or when a statutory provision recognising ownership of items that would otherwise be fixtures confers an “interest in land”. Instead, the case concerns the interpretation of specific Western Australian legislation. The infrastructure legislation in Epic included a provision stating that pipelines “does not become a part of the land, regardless of whether they are in the nature of a fixture” (emphasis added). This is an important point of distinction from this case. Section 64 of the WIC Act recognises and protects the ownership of water industry infrastructure. Section 64 of the WIC Act is consistent with the conclusion that such ownership includes an estate or interest “in land” as it grants a statutory priority to the owner of the pipeline in respect of the stratum of land occupied by the pipeline, despite the provisions of s 42 of the Real Property Act.

99. [133]

    In the course of argument, three Victorian decisions were referred to: Vopak, Uniqema, and Valuer-General v AWF Prop Co No 2 Pty Ltd (2021) 65 VR 327; [2021] VSCA 274. On analysis, those cases do not support the appellant’s claim here. Each case interpreted s 28(2) of the Landlord and Tenant Act 1958 (Vic) which provided that fixtures erected by a tenant would remain the tenant’s property and could be removed during the tenancy.

100. [134]

     In these cases, the relevant fixtures were excluded from the land for stamp duty or fire levy purposes, with the courts describing such fixtures as “chattels”. To the extent that these cases are relevant, they support the Commissioner’s alternative argument that the pipeline should be classified as “goods” under the Duties Act.

101. [135]

     In Shell Energy (No 1), this Court considered whether three power stations could be characterised as goods: see above at [26]-[27]. Shell Energy (No 1) is not authority for whether or not ownership of the pipeline in the present case is an “interest in land” as the argument that the interest in the power stations could be characterised as an interest in land was not properly advanced:

Conclusion on whether the appellant acquired an “interest in land” within the meaning of ss 147 and 155 of the Duties Act

1. [136]

   The term “land holdings” employed in s 155 is defined in s 147(1) of the Duties Act to mean “an interest in land other than the estate or interest of a mortgagee, chargee or other secured creditor” (subject to currently immaterial exceptions). That definition invokes general law notions by use of the phrase “an interest in land”. But the term remains to be construed purposively and in the context of the Act. As a statutory notion, it is not necessarily limited by general law concepts.

2. [137]

   The words “interest” and “land” are non-exhaustively and broadly defined in the Duties Act. As to “interest”, the Duties Act expressly provides for its inclusion of certain interests which are not ordinarily proprietary interests in land. On its correct construction, an “interest” in land under the Duties Act includes the rights conferred by s 64 of the WIC Act. Those rights permit the transfer of ownership of the pipeline and are effective to prevent any affectation of the rights to occupy the stratum on the land where the pipeline has been laid. The WIC Act grants the appellant the rights to control, exploit, use or enjoy, and alienate that pipeline in the stratum on the land where the pipeline has been laid.

3. [138]

   The ownership rights granted by s 64 of the WIC Act exist in express priority to all of the estates and interests in the surrounding land. The rights granted by s 64 of the WIC Act are properly described as an interest in land within the meaning of ss 147 and 155 of the Duties Act. Since writing the above, I have read in draft the reasons of Basten AJA on this issue. I agree with his Honour’s additional reasons.

4. [139]

   It follows that the notice of contention should be upheld and the appeal should be dismissed.

“Goods” within the meaning of s 155 of the Duties Act

1. [140]

   Despite the conclusions I have reached on the cross-appeal, which are dispositive, in accordance with Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 at [12] and Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [8], I will address the grounds of the notice of appeal on the alternative basis that was relied upon by the Commissioner, namely that the pipeline is “goods” within the meaning of s 155 of the Duties Act.

2. [141]

   The assumption underlying this part of the judgment is that I am wrong in my construction that s 64 of the WIC Act confers an interest in land. I am unable to conclude, even on this basis, that the interest conferred by the WIC Act is for the purposes of the Duties Act a “novel property right” which exists outside the reach of s 155 of the Duties Act.

3. [142]

   The only definition of “goods” in the Duties Act is found in s 163K which excludes certain items from the definition of “goods” of a landholder:

4. [143]

   This definition, by way of exclusion, is telling. “Goods”, in context, is a very broad concept. On the face of the definition items which would under the common law be fixtures, if not for some reason caught as interest in land, are capable of being described as goods. As the second reading speech quoted at [95] above makes clear, the statutory purpose was to align the tax treatment of transactions involving land with those involving goods, thereby applying landholder duty to acquisitions of both land and goods.

5. [144]

   As Mr Solomon KC candidly and helpfully conceded on behalf of the appellant in his oral address, “[the appellant] will lose unless I overturn two features of the conclusion of Kirk JA [in Shell Energy] … The first feature is in [126] in the first and second sentences … It can be described accurately this way. Tangible items part of or affixed to the earth, subject to a statutory severance provision, are goods …. Secondly, as set out in [125] and the last sentence of [126], Kirk JA concluded that s 155 uses the term properly construed, employs the term ‘goods’, to have a wider meaning than tangible personal property movable in its present condition, and I need to overturn that proposition”.

6. [145]

   The appellant’s submissions may be summarised as follows:

   1. (1)

      The combined effect of three High Court cases, North Shore Gas (No 1), North Shore Gas (No 2) and Asciano, is dispositive of the appeal. To the extent that Shell Energy bound the primary judge, the decision misunderstood these High Court cases and was erroneous.

   2. (2)

      “Goods” under s 155(1) should retain an established meaning as tangible, movable personal property, and the primary judge erred by expanding this definition to include affixed items like pipelines and failing to apply relevant precedents and properly distinguish between legal and physical severance.

   3. (3)

      Asking whether the interest is “one in real property or personal property or as involving ... a chattel ... is likely to mislead”: Northern Territory v Collins at [22] (Gummow ACJ and Kirby J); see also [55] (Hayne J) and [135] (Crennan J).

7. [146]

   The critical paragraphs of Shell Energy attacked by the appellant were as follows:

8. [147]

   In my view, Kirk JA in Shell Energy was correct to conclude that:

   1. (1)

      Tangible items part of or affixed to the earth are, depending on the statutory or contractual context, capable of being “goods” within the meaning of s 155 of the Duties Act.

   2. (2)

      The term “goods” in s 155 of the Duties Act has a wider meaning than tangible personal property movable in its present condition.

9. [148]

   In Shell Energy, Kirk JA reasoned by analogy from the tenants’ fixtures cases: see at [92]-[98]. As his Honour ultimately concluded on this topic:

10. [149]

    Mr Solomon KC summarised this expression “statutory severance” thus:

11. [150]

    If it is correct, as the appellant submitted, that the WIC Act did not create any interest in land, but simply protected Rosehill’s economic interest in the pipeline from interference by the entity owning the land to which the pipeline was affixed, in so doing the WIC Act had the legal effect of converting the pipeline to “goods” within the meaning of the Duties Act.

12. [151]

    The term “legal severance” is one which must be approached with some caution. However, for present purposes, it suffices to conclude that the effect of the alternative construction of s 64 of the WIC Act I am addressing is that the items resume their previous legal character, as chattels or goods. As Kirk JA explained in Shell Energy, the word “chattels” is often used in contrast with “fixtures”. As Jordan CJ said in Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712, “[a] fixture is a thing once a chattel which has become in law land through having been fixed to land”. Conversely, if and when a fixture is removed it becomes a chattel again. The point is illustrated by Dixon J’s explanation of tenant’s fixtures in North Shore Gas (No 1) at 68:

13. [152]

    Ormiston JA in Vopak discussed the possibility of taking legal steps to sever fixtures so as to “convert them again to chattels”: at [46]-[49]. Infrastructure items may return to their status as chattels despite the absence of physical steps to separate the fixtures from the land. The issue is addressed in Samantha Hepburn and Steve Jaynes, “The Nature and Scope of Rights of Removal” (2013) 2 Property Law Review 123.

14. [153]

    Whether or not something is a fixture turns in particular on the degree to which the thing is affixed to the land, and “whether it has been fixed with the intention that it shall remain in position permanently or for an indefinite or substantial period … or whether it has been fixed with the intent that it shall remain in position only for some temporary purpose”: Coroneo at 712; see further TEC Desert at [24]. Thus, a chattel might be physically affixed to the land but not be regarded as a fixture because there is not the requisite intention. In such a case the thing does not become part of the land for legal purposes. The same result can come about by statutory provision: see Vopak at [38]-[42]. Such a thing would in general retain its legal character as a chattel: Vopak at [42].

15. [154]

    Goods affixed to land physically but not legally could be the subject of a separate sale. If the suggestion is that very large, practically immovable things cannot be “goods”, then that is inconsistent with the fact that such things can be goods if they do not satisfy the tests for being fixtures. For example, in Attorney-General of the Commonwealth of Australia v R T Company Pty Ltd [No 2] (1957) 97 CLR 146 Fullager J held that a printing press weighing 45 tons was not a fixture.

16. [155]

    Analysing the text, context and purpose of the Duties Act leads me to conclude that Kirk JA in Shell Energy was correct, at [126], to conclude that in the case of large industrial structures fixed to land, nothing in the vesting orders his Honour was considering had the effect of changing the legal character of the items such as to become “innominate sui generis property interests”.

17. [156]

    Critically, his Honour concluded that even if they had done so, such a property interest would still fall within the reach of the concept of goods as employed in Ch 4 of the Duties Act. I respectfully agree.

18. [157]

    Statutory construction requires a purposive approach: Interpretation Act s 33. The outcome urged by the appellant suggests that Parliament should be understood to have intended to recognise a third, distinct, category being neither an interest in land or goods, the engagement of which would turn on an almost arbitrary element of timing. The items in question once were goods but became part of the land when affixed as part of the pipeline construction. If the pipeline was disassembled and the items sold, then they would indisputably be goods. The object of s 155 is to tax both interests in land and goods. The appellant’s construction is an unlikely one. I am unable to agree with the appellant’s construction. First, as Kirk JA in Shell Energy pointed out, the term “goods” is context-dependent and broadly encompasses tangible property. The Duties Act explicitly excludes certain categories, like stock-in-trade, but does not exclude fixtures or infrastructure legally severed from realty from its reach. This is inconsistent with the appellant’s submission that goods are limited to “tangible items of personal property physically moveable in their present condition”. Section 163K(2) clarifies that “goods” include items in which the landholder holds an interest (excluding interests as a mortgagee or secured creditor), also indicating a broad meaning of the term “goods”. The statutory design includes discretionary relief under s 163H, suggesting that Parliament envisioned a wide meaning of the term “goods”. In Shell Energy (No 1), the court reasoned that legally severed infrastructure should be classified as goods for Duties Act purposes. Kirk JA observed that excluding such items from both “land” and “goods” would create an unreasonable gap in the duty scheme. This conclusion aligns with the Duties Act’s purpose of taxing both land and goods.

19. [158]

    Secondly, courts have consistently treated the term “goods” as including, but not limited to, tangible property, often synonymous with chattels: see Shell Energy; Browning v Australia and New Zealand Banking Group Ltd [2014] QCA 43 at [6] and Stephenson v Thompson [1924] 2 KB 240 at 249. The appellant’s assertion that the meaning of “goods” in Ch 4 of the Duties Act is confined to “tangible items of personal property physically moveable in their present condition” is unsupported by the cases the appellant called in aid:

    1. (1)

       AGL Victoria Pty Ltd v Lockwood (2003) 10 VR 596; [2003] VSC 453 does not identify an “accepted legal usage” of the term “goods” that is restricted to personal property physically moveable in its present condition. To the contrary, Byrne J at [69] referred to the term being one of indefinite import that is dependent on the context in which it is found. The discussion of “goods” in Theo Holdings Pty Ltd v Hockey (2000) 99 FCR 232; [2000] FCA 665 at [17] rested on a particular statutory definition in a trade practices context;

    2. (2)

       North Shore Gas (No 1) and (No 2) have been addressed above and do not assist the appellant.

20. [159]

    Thirdly, the cases cited by the primary judge in the present case to support an identification of the pipeline as “goods” support this conclusion. Vopak, AWF, and Uniqema demonstrate instances where statutory provisions affected the ownership of items affixed to land. In each case items that, under the general law, would have been considered as fixtures belonging to the freehold owner, were treated as “chattels”. As I explained in SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 395, physical things affixed by a tenant may be reclaimable by the tenant: see eg Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd [2009] FCA 742 at [67]. Tenant’s fixtures remain part of the land and are thus at general law owned by the landlord. While the tenant has a right to remove the fixtures, if the tenant fails to do so at the end of the tenancy the tenant loses that right and the fixtures become the absolute property of the landlord: see further North Shore Gas (No 1) at 67-68 per Dixon J; TEC Desert at [25]-[26].

21. [160]

    There are exceptions to these general law rules effected by legislation. I have addressed Vopak. Uniqema dealt with the question of whether the Commissioner was entitled to include in the value of the land the whole of the value of the goodwill, as designated in a Business Acquisition Agreement, whereby Unilever sold to Uniqema a manufacturing business. Part of the land transferred, however, had been leased since about 23 December 1992 by a company named Co-Generation Australia Ltd (“Co-Gen”). A relevant issue concerned the value of the land itself arising out of the construction by Co-Gen as lessee of the steam and electricity generating plant. That plant was not the subject of the contract but the appellant asserted that the plant and equipment were fixtures which formed part of the real property at the time of the sale and thus had to be taken into account in valuing the whole of the land sold by Unilever.

22. [161]

    Ormiston JA (with whom Phillips and Callaway JJA agreed) held that s 28(2) of the Landlord and Tenant Act 1958 had the effect of rendering the plant chattels when they would ordinarily be fixtures. In Uniqema, his Honour described the decision in Vopak thus:

23. [162]

    It is true that Uniqema was an unusual case. The point for present purposes, however, is that Vopak and Uniqema are clear examples of cases where, by reason of the correct construction of a statute, large items that would ordinarily be fixtures were treated as chattels or goods. At least in that statutory context, chattels and goods were properly understood as not being limited to “tangible items of personal property physically moveable in their present condition”.

24. [163]

    Fourthly, the fact that the pipeline was embedded in the land does not mean that the pipeline was “not moveable as of the acquisition date”. The primary judge correctly concluded that “goods” within the meaning of the Duties Act included items that are difficult but not impossible to move. Perhaps ironically, the “break-up” value of the pipeline was the basis upon which the appellant’s expert sought to value the appellant’s interest in the pipeline before the primary judge. This valuation was predicated on this pipeline being difficult but not impossible to move.

25. [164]

    Fifthly, while there is room for debate about whether ownership of the pipeline should be properly characterised as an interest in land or goods, it makes little sense to say it is neither. To conclude that the statutory right granted by s 64 of the WIC Act was neither an interest in land nor goods subverts the clear statutory purpose of s 155 of the Duties Act. As Kirk JA explained in Shell Energy, s 155 of the Duties Act does not concern an exemption from duty nor is it concerned with protecting bona fide mercantile transactions. Its purpose is to determine how duty is charged on the acquisition of an interest in a landholder.

26. [165]

    There is nothing in the text, context or purpose of the Duties Act indicating that permanent infrastructure of the present kind was intended to be excluded from the duties base. To the contrary, a provision that is intended to tax companies with large land assets the threshold being $2 million, was intended to tax permanent infrastructure belonging to such landholders.

27. [166]

    I agree with Kirk JA in Shell Energy (No 1) that it is unlikely that in relation to large infrastructure assets the legislature has created innominate sui generis property interests, outside the reach of the Duties Act. If it were necessary to decide this ground, Kirk JA was correct in Shell Energy (No 1) that the word “goods” in ss 163K and 155 extends to any such interests of the kind at issue in that case.

Conclusion and proposed orders

1. [167]

   For the foregoing reasons I have concluded that the following orders should be made:

   1. (1)

      Appeal dismissed.

   2. (2)

      Appellant pay the respondent’s costs of the appeal.

2. [168]

   STERN JA: I agree with Payne JA.

3. [169]

   McHUGH JA: I agree with Payne JA.

4. [170]

   BASTEN AJA: The straightforward question raised by this appeal is whether the appellant is liable for duty on a transaction which involved the purchase of shares in the owner of water industry infrastructure, including a 19-kilometre pipeline in Sydney. Pursuant to Ch 4 of the Duties Act 1997 (NSW) the transaction was dutiable if the appellant acquired an interest in a “landholder”. [1]

5. [171]

   Chapter 2 of the Duties Act provides for duty to be payable on “a transfer of dutiable property”: s 8(1)(a). Dutiable property includes “land in New South Wales”: s 11(1)(a). This case did not deal with a transfer of dutiable property or other transaction within Ch 2; rather, it fell within Ch 4, headed “Acquisition of interests in landholders”, and imposing duty on “the acquisition by a person of a significant interest in a landholder”. [2] Acquiring a significant interest in a landholder is a “relevant acquisition” for the purposes of s 148. The appellant’s purchase of the share capital of the vendor was a relevant acquisition: the only issue was whether the acquisition was of shares in a “landholder”.

6. [172]

   The term “landholder” is defined, relevantly, as a company that has “land holdings” in NSW with a minimum threshold value: s 146(1). The question was whether the vendor had “land holdings”. Relevantly, a landholding is “an interest in land” other than a security interest: s 147(1). Each of the terms “interest” and “land” is defined in the Dictionary to the Duties Act, definitions which operate for the purposes of the whole Act, pursuant to s 6. Those definitions are:

7. [173]

   Neither definition is exhaustive, but it is uncertain whether each is intended to be expansive, or merely to “make it clear that certain potentially arguable matters are within it.” [3] The term “stratum” is not defined, but “strata lot” is, being defined to mean a lot within the meaning of the Strata Schemes Development Act 2015 (NSW). The term stratum is not so constrained: it refers to divisions of space, usually in a horizontal plane. It addresses one characterisation of land, not as a physical entity, but as a jural concept.

8. [174]

   It was common ground that the definition of “land” in the Interpretation Act 1987 (NSW), s 21(1), was engaged. That definition can be excluded by express or implied statutory intention, as recognised by s 6 of that Act, but it was not contended that the text, context or subject matter of the Duties Act had that effect. Land is defined in s 21(1) of the Interpretation Act in terms common to many such statutory definitions in the common law world:

9. [175]

   This definition also is inclusive, not exhaustive, and in broad terms. Three aspects are of present significance. First, the definition encompasses both physical entities and jural concepts. The words “messuages” and “tenements” refer to buildings and other structures. They are understood to be part of the land on or within which they stand because they are fixtures. However, as noted by Gray and Gray, in relation to a similar definition of land in the Law of Property Act 1925 (UK): [4]

10. [176]

    To similar effect, Giles JA observed, in relation to the definition in the Interpretation Act, that, “in legal usage ‘land’ is not confined to the physical thing, and can mean one of many legal constructs involving an estate in the land or an interest in the land”. [5] Indeed, the concluding words of the definition (“whatever may be the estate or interest therein”) suggests that in law, ownership of “land” is a jural construct, and not a physical thing. That is consistent with feudal theory that the ultimate or radical title to all land is vested in the sovereign, so that legal ownership is always an intangible interest or estate rather than a tangible thing. [6]

11. [177]

    Secondly, the definition says nothing about ownership (that is the relationship of legal persons to land), beyond the inclusion of hereditaments, a legal capacity to transfer ownership. At least to an extent, the law requires that proprietary interests be alienable, both inter vivos and by will, [7] though that does not apply to native title. [8] The interests in question in this case were alienable; it was the transfer which founded the liability to duty.

12. [178]

    Thirdly, the archaic reference to structures (messuages and tenements) reflects the principle that fixtures are part of the land on or in which they stand. As explained below, there is no doubt that the appellant is the owner of the pipeline and associated infrastructure, but the pipeline is undoubtedly a fixture. Accordingly, for the definition in the Interpretation Act to be engaged, the appellant must own the space occupied by the structure, so that structure is part of the “land”. That conclusion is apt.

13. [179]

    There is a similar definition of “land” in the Real Property Act 1900 (NSW), which provides in s 42 for the indefeasibility of the registered title of “any estate or interest in land”. It includes the defined term “land”, perhaps intended in the physical sense, and continues to include, “messuages, tenements, and hereditaments corporeal and incorporeal of every kind and description or any estate or interest therein …”. This definition is not inconsistent with the breadth of the definition in the Interpretation Act, but is expansive in that it both incorporates concepts from the general law and permits interests (“of every kind and description”) which must include those created by statute.

14. [180]

    The law does not treat land only by way of intangible estates or interest; there are two relevant categories of laws. The first, including planning laws, prohibit, permit or regulate use of a physical space by reference to geographically defined boundaries; similarly the registration of title is effected by use of such boundaries. However, laws which address the property rights and interests of individuals or groups of individuals inter se adopt a jural relationship. “Property” has been described as a “bundle of rights” and as a “socially constituted fact”. [9] Individuals enjoy estates or interests in a physically defined area.

15. [181]

    As to the physical entity, Butt’s Land Law identifies land as “any area of three-dimensional space, with its position identified by natural or imaginary points located by reference to the earth’s surface.” [10] The description continues by way of explanation:

16. [182]

    The reference to interests in land is a reference to the relationship between the defined space and a legal person. Such interests may generically be described as property interests or proprietary interests. As explained by Latham CJ in Minister of State for the Army v Dalziel: [11]

17. [183]

    The archaic language of the statutory definitions derives from the feudal system of tenure inherited from England. The absence of an allodial system of land ownership was identified by Brennan J in Mabo [No 2]: [12]

18. [184]

    Mabo [No 2] held that the acquisition of radical title did not involve “absolute beneficial ownership of that land to the exclusion of the [I]ndigenous inhabitants”. [13] Otherwise, it has long been understood that in Australia the creation, alienation and transfer of interests in land are controlled by the provisions of the Crown Lands Acts. [14] No doubt the Parliament could, by statute, vary the concept of land, but that is not what has happened in the present case. What has happened is entirely referable to existing concepts.

19. [185]

    According to established principles, a structure which could properly be described as a fixture became part of the land on which it was constructed and was therefore owned by the owner of the land; a pipeline laid in land would become part of the land. As a practical matter, the suggestion that the person responsible for constructing the pipeline intended by so doing to lose control of it is implausible. That result will be avoided in practice, either because the construction takes place by consent of the owner of that part of the land and the result is governed by contract, or pursuant to a statutory provision which prevents that outcome. The present case involves such a statutory provision.

20. [186]

    There was no dispute that the appellant’s pipeline and associated infrastructure constituted “water industry infrastructure” for the purposes of the Water Industry Competition Act 2006 (NSW). Part 2, Div 3 of that Act deals with approvals for a scheme and for operation of the scheme. Part 6 includes provisions dealing with the construction, maintenance and removal of water industry infrastructure that forms part of a scheme: s 58A. Importantly for present purposes, ownership of water industry infrastructure is dealt with in the following provision:

21. [187]

    The effect of this provision is not to deem the pipeline or other water industry infrastructure to be other than a fixture, but rather to reverse the general law presumption as to the ownership of the infrastructure. However, as the disengagement of s 42 of the Real Property Act demonstrates, there will be a limitation on the title of the owner of the surrounding land. Although not the subject of a registered title, the consequence of vesting in the constructor or acquirer rights of ownership in the pipeline (and other infrastructure) which is “in, on, under or over” land owned by another person, is that the three-dimensional space occupied by the pipeline (and other infrastructure) is within the exclusive possession of the appellant. Pursuant to general law principles, a fixed, permanent, immoveable structure will constitute land. A person with exclusive possession will have ownership rights of that land.

22. [188]

    This conclusion is consistent with the reasoning of the Privy Council in Corporation of the City of Toronto v Consumers’ Gas Co, [15] where Lord Shaw of Dunfermline stated:

23. [189]

    In North Shore Gas Co Ltd v Commissioner of Stamp Duties (NSW), [16] Dixon J stated, after referring to Toronto Corporation:

24. [190]

    Although this reasoning in North Shore Gas went beyond the specific question of whether the pipes were “goods, wares and merchandise” (which the Court unanimously held they were not), it is consistent with the principles and the statutory scheme discussed above. Whether it applies in relation to other statutory schemes, such as the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), need not be addressed. [17]

25. [191]

    It follows that the space occupied by the pipeline (and associated infrastructure) and the pipeline itself, constitutes “land” for the purposes of the Duties Act. It also follows that the appellant purchased a relevant interest in a land holding company when it (indirectly) acquired the water industry infrastructure. Accordingly, although on a different basis from that adopted below, the primary judge was correct and the appeal should be dismissed with costs. I agree with the orders proposed by Payne JA.