Campbelltown Central 2 Pty Ltd v Chief Commissioner of State Revenue

By four separate Summons filed on 21 and 22 December 2024, four taxpayers, Campbelltown Central 2 Pty Ltd (CC2), Campbelltown Central 8 Pty Ltd (CC8), Riveredge Investments Pty Ltd (Riveredge) and Warwick Farm Central Pty Ltd (WFC) (collectively, the Taxpayers) apply to this Court under s 97 of the Taxation Administration Act 1996 (NSW) (TA Act) for a review of a decision by the Chief Commissioner of State Revenue (the Chief Commissioner), the defendant named in each Summons, to assess each of the Taxpayers to duty under the Duties Act 1997 (NSW) (Duties Act).

The following is a summary of the background to this dispute. Nothing of what is summarised below appears to be in dispute.

The dispute arises out of the purchase of four commercial properties in Western and South-Western Sydney. These properties were located at:

Each of the Taxpayers acquired one of the Properties. More specifically:

The Taxpayers themselves are each controlled by a property developer, Mr Antoine Bechara.

Mr Bechara operates his property development business through a corporate group. Each of the Taxpayers were special purpose corporate vehicles, incorporated for the purpose of owning the Properties – each Taxpayer was incorporated not long before the relevant property was purchased by it. The ultimate holding company of each is Al Maha Holdings Pty Ltd.

Another member of the corporate group, and one central to this dispute, is Al Maha Pty Ltd (Al Maha). Al Maha was incorporated in 2006. From its inception and throughout the time periods material to this dispute, Al Maha’s sole director was Mr Bechara. Speaking broadly, it appears Al Maha was responsible for financing the purchase of the Properties. The precise arrangements between the Taxpayers and Al Maha are unnecessary to detail given the way this matter has progressed. It suffices to say Al Maha appears to have contributed to the purchase prices of the Properties either by contributing funds itself to the purchase (or reimbursing other entities of Mr Bechara’s who had contributed funds), or by assuming the obligations of the relevant Taxpayer to repay loans that had been taken out by that Taxpayer from other banks.

On 24 June 2020, each of the Taxpayers and Al Maha entered into a deed titled Confirmation Deed. There were four such deeds. The Confirmation Deeds were in materially identical terms. The stated purpose was for the relevant Taxpayer to “acknowledge that Al Maha is the beneficial owner of” the relevant property owned by that Taxpayer, and that Al Maha “has always held such beneficial ownership since” the settlement date for the contract for the purchase of the relevant property.

Also in 2020, Mr Bechara’s group of companies sought to engage in a corporate restructure. By a letter from their solicitors dated 30 June 2020, a private ruling was sought from the Chief Commissioner seeking clarification that transfers of the Properties from the Taxpayers to different corporate entities as part of the proposed restructure would be exempt from duty pursuant to s 273B of the Duties Act. In support of their request for a private ruling, the Taxpayers provided the Confirmation Deeds to the Chief Commissioner, in support of their contention that Al Maha was the beneficial owner of the Properties.

Subsequent to the request for a private ruling, on 15 October 2021, a letter was sent on the Chief Commissioner’s behalf to the Taxpayers. In that letter, the Taxpayers were informed that the Chief Commissioner considered the Confirmation Deeds, in particular cl 3 of those deeds (which is set out below) to be declarations of trust within the meaning of the Duties Act, and as such they were liable to duty.

On 3 November 2021, the Chief Commissioner issued Duties Notices of Assessment to each of the Taxpayers. The total amount of duty assessed across the four Duties Notices of Assessment was $3,791,208. Also included on the Duties Notices of Assessment were amounts payable for interest.

On 14 December 2021, the Taxpayers lodged objections to the decision of the Chief Commissioner to assess them to duty made on 15 October 2021 and the estimate assessments which followed on 3 November 2021. The Chief Commissioner disallowed those objections on 28 October 2022.

Following those objections being disallowed, these proceedings were commenced.

On 11 April 2025, Hammerschlag CJ in Eq made orders for these proceedings to be heard together, with evidence in one to be evidence in each other proceeding.

Mr DFC Thomas SC appeared with Mr D Morgan of counsel for the Taxpayers. Mr S Balafoutis SC appeared with Mr S Kanagaratnam of counsel for the Chief Commissioner.

The proceedings were originally set down on an estimate of five days. Based on the Appeal Statements filed by the Taxpayers and the Chief Commissioner and the opening submissions made by the parties, it seemed a wide range of issues were to be covered. The Taxpayers had raised five issues for determination, these being:

However, before the reading of evidence, the Taxpayers informed the Court that they were abandoning the first, third and fourth of the issues above. This means the only two issues I am deciding are the second and fifth of those issues. That is, all I am deciding is whether the Confirmation Deeds were declarations of trust and the valuation dispute between the parties.

Both the Taxpayers and the Chief Commissioner provided written submissions in opening and in closing (respectively, TWS-Closing and CCWS-Closing), alongside their oral submissions. Each set of submissions was of great assistance to me in determining this dispute. I wish to thank both sets of counsel, and their respective instructors, for those submissions.

For the reasons set out below, I accept the Taxpayers’ principal contention that the Confirmation Deeds were not declarations of trust. It follows that the Taxpayers’ appeal should be upheld and the Duties Notices of Assessment ought to be set aside.

In advance of the hearing, I was provided with a lengthy Court Book spanning 8457 pages of affidavit and documentary evidence, along with a supplementary Court Book of 152 pages containing further evidence intended to be relied upon by the Chief Commissioner. However, as it happened, many of the affidavits in the Court Book were not read and a substantial portion of the documents were not tendered.

The parties relied on expert evidence as part of the valuation dispute. Rather than outline that evidence here, the details of the expert evidence in these proceedings are described later in these reasons, at [100] and following, when I come to consider the issue of the dutiable value of the properties.

Aside from their expert evidence, only the affidavit of Mr John Joseph Bechara sworn on 20 February 2025 was read and relied on by the Taxpayers. Mr John Bechara is the son of Mr Antoine Bechara and is the Head of Property and Assets in his father’s property development business. His affidavit evidence only concerned the Warwick Farm Property, in particular setting out aspects of the development application process which WFC undertook. Mr Bechara was briefly cross-examined by the Chief Commissioner, though no credibility findings were sought against him.

Aside from his expert evidence, the Chief Commissioner read and relied on an affidavit of Daniel Patrick O’Neil, the solicitor at the Crown Solicitor’s Office with carriage of this matter, sworn 15 August 2024 and an affidavit of Hayley Maree Carroll, the manager of Electronic Duties Return at Revenue NSW, affirmed 5 September 2024. Neither was required for cross-examination.

As for the documentary evidence, the documents exhibited to Mr John Bechara’s and Ms Carroll’s affidavits were tendered. But as for the many other documents which would have come through other affidavits which ultimately were not read as a result of the Taxpayers abandoning aspects of their case (along with the documents exhibited to Mr O’Neil’s affidavit, which were not initially tendered), the parties agreed to produce a joint list of documents in the Court Book which were to be put into evidence. I observe that the final list of documents to be tendered resulted in substantial portions of the Court Book not being put into evidence in the proceedings.

In this section, I will set out the key clauses of the Confirmation Deeds. I will refer to provisions of the Confirmation Deed entered into by CC2 for the sake of demonstration. However, as I indicated earlier, the material clauses of the Confirmation Deeds are identical in effect.

The parties to each deed are Al Maha and one of the Taxpayers. In this Confirmation Deed:

Clause 3, headed “Acknowledgements”, is the clause which is said to effect the declaration of trust. That clause provides as follows:

I will also set out the other clauses of this Confirmation Deed which I consider to be material:

The last section of the Operative Provisions, section 5, is headed “General provisions”. The clauses which appear under that section, cll 5.1-5.10, appear to be boilerplate clauses. Neither the Taxpayers nor the Chief Commissioner made any submission suggesting these clauses should affect my analysis of the Confirmation Deeds. For my part, I do not consider anything turns on those clauses.

As I recounted earlier in these reasons for judgment, the Taxpayers narrowed their case quite significantly. That narrowing means I only need to answer the following questions:

I will consider each question in turn.

The general principles governing this Court’s power to review assessments of the Chief Commissioner under the TA Act are settled and can be succinctly repeated.

A review by this Court under s 97 of the Act is a review of the assessments, not of the decision on the objection to those assessments: Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [28] (Basten JA, Giles and Campbell JJA agreeing).

Neither the Taxpayers nor the Chief Commissioner, on an application for review, are limited to the grounds of the objection before the Chief Commissioner: TA Act s 100(2). The proceedings involve a de novo review, based on the material before the Court and that material is not limited to the material before the Chief Commissioner in making the relevant assessment: Tasty Chicks Pty Limited v Chief Commissioner of State Revenue (NSW) (2011) 245 CLR 446; [2011] HCA 41 at [13]-[22] (French CJ, Gummow, Crennan, Kiefel and Bell JJ); Winston-Smith v Chief Commissioner of State Revenue [2019] NSWCA 75 at [2] (Meagher JA, Payne JA and Sackville AJA agreeing); Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue (2015) 89 NSWLR 43; [2015] NSWSC 68 at [4] (White J).

The Taxpayers have the onus of proving their case in an application for review: TA Act s 100(3). In relation to this, both parties cited the judgment of the Full Court of the Federal Court in Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212, specifically at [88] of Steward J’s reasons for judgment. In that paragraph, his Honour said it was necessary to “scrutinise evidence given by the taxpayer him or herself with care” but also that a taxpayer is not under any “special burden of proof”. While these statements were made in the context of revenue proceedings under Commonwealth law, both parties treated his Honour’s observations as relevant to revenue proceedings under the TA Act. I note that other observations made by Steward J in [88] concerning a taxpayer’s onus of proof have been referred to in other judgments of this Court in revenue proceedings: eg, Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249 at [119] (Richmond J); Bupa HI Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 1105 at [93] (Hmelnitsky J).

Section 101(1) of the TA Act provides this Court various powers it can exercise in dealing with an application for review. That section says:

The applicable law was not in dispute between the parties, though, unsurprisingly, there were differences in emphasis between the parties.

Section 8 of the Duties Act is the provision which imposes duty on certain transactions. Section 8 has been amended since the assessments in issue in these proceedings were first made, though not in a manner material to the resolution of this dispute. As at the time of the assessments by the Chief Commissioner, that section relevantly provided:

Both parties cited as correct the summary provided by Williams J in Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 463 at [16]-[24] as to when there is a declaration of trust within the meaning of s 8 of the Duties Act. I gratefully adopt her Honour’s summary and for convenience will reproduce it below (including her Honour’s footnotes):

In Chief Commissioner of State Revenue v Benidorm Pty Ltd (2020) 104 NSWLR 232; [2020] NSWCA 285 (Benidorm), the Court of Appeal considered s 8 of the Duties Act. There, Leeming JA (with whom Meagher and Payne JJA agreed) observed that s 8 of the Duties Act proceeds on the basis that duty is now imposed on transactions rather than instruments as was the case under the previous duties legislation in this State: Benidorm at [80], [82] and [88]. Each of the transactions listed in s 8(1)(b) of the Duties Act denotes, as a matter of ordinary legal terminology, something which alters legal or equitable rights or obligations concerning property: Benidorm at [82]. Consequently, if an instrument merely acknowledged an existing state of affairs, then there is no dutiable transaction in relation to which duty can be charged under the Duties Act: Benidorm at [97] and [108].

I note in passing that in response to the Court of Appeal’s decision in Benidorm, a new s 8AA was inserted into the Duties Act in 2022 to expressly charge duty on a statement that purports to be a declaration of trust over dutiable property but merely has the effect of acknowledging that identified property vested, or to be vested, in the person making the statement is already held, or to be held, in trust for a person or purpose mentioned in the statement. However, that provision commenced after the Confirmation Deeds were executed and so does not affect this matter.

I consider that the Confirmation Deeds are not declarations of trust within the meaning of the Duties Act.

An express trust requires certainty of intention, certainty of subject matter and certainty of object. There is certainty of subject matter in each Confirmation Deed – the subject matter is the relevant property held by the Taxpayer entering into the deed. The defined term “Property” in each deed is clearly defined. Similarly, there is certainty of object – the beneficiary of any trust that might be said to exist is clearly Al Maha. Al Maha is expressly identified in the Confirmation Deeds as the party who would hold the beneficial interest in the Properties and the party entitled to become the registered proprietor of the Properties on its request.

As I understood them, none of the Taxpayers’ submissions suggest I should not be satisfied there is certainty of object or certainty of subject matter. Rather, the real issue was as to whether there was certainty of intention. Whether that is so in this case will depend on the proper construction of the Confirmation Deeds.

Given the accepted starting and ending point of the construction of a written commercial contract is the text of the Confirmation Deeds, I will start there.

There is no express declaration of trust anywhere in the Confirmation Deeds. Obviously enough, that is not the end of the inquiry. However, I consider it a relevant starting observation. As Gageler J said in Korda v Australian Executor Trustees (SA) Limited (2015); [2015] HCA 6 at [109], where parties have refrained from contractual use of the terminology of trust, an intention to create a trust will be imputed to them only if, and to the extent that, a trust is the legal mechanism which is appropriate to give legal effect to the relationship, between the parties or between a party and a third party, as established or acknowledged by the express or implied terms of the contract.

The language of the chapeaus to cll 3.1 and 3.2 suggest they are addressing the status quo. Clause 3.1 of the Confirmation Deeds starts by saying that the relevant Taxpayer “acknowledges and confirms” the matters listed in subcll (a)-(d). Clause 3.2 similarly says Al Maha “acknowledges and confirms” the matters listed in subcll (a)-(c). I accept the Taxpayers’ contention to the effect that, ordinarily, words like “acknowledge” and “confirm” tend to direct one’s attention to an existing state of affairs. In Benidorm at [36], Leeming JA said that an acknowledgement “ordinarily records a previously existing state of affairs”. Similarly, to confirm something is ordinarily to make an existing thing or state of affairs certain, or to affirm an existing state of affairs. I also accept the Taxpayers’ submissions that the chapeau to each clause controls the subclauses which follow. That is evident from the structure of the clauses.

The text of cl 3.1(a) also directs attention to the existing state of affairs. That clause says Al Maha “holds” the beneficial interest in the relevant property and “has held such beneficial interest” since a date in the past (namely, the Date of Acquisition). Read together, the use of words such as “holds” and “has held since [a past date]” reinforces the idea that the words “acknowledges and confirms” in the chapeau are being used to acknowledge and confirm whatever existing relationship there is between the parties. At the very least, those words to me do not seem aimed at creating some new legal relationship between the parties. Words like “holds” and “has held” state what the past was and present is. To me, read together, they do not work to affect the relationship between the parties going into the future.

Clause 3.1(c) similarly refers to how the relevant Taxpayer will “continue” to exercise and perform all the rights, duties and powers relating to the relevant Property only as directed by Al Maha. As the Taxpayers submitted, to continue something ordinarily means to maintain a preexisting state of affairs.

It follows from the previous two paragraphs that, as a matter purely of text, I do not accept the Chief Commissioner’s submissions that cll 3.1(a) and 3.1(c) manifest an intention to establish a trust relationship. I do not think those clauses are intended to split for the first time the legal and beneficial estates in the Properties nor intended to grant new rights in the way the Chief Commissioner sought to characterise these clauses as doing.

Clauses 3.1(b), (d) and 4.1 and the subclauses of 3.2 are different but in my opinion do not weigh in favour of concluding there was a declaration of trust by the Confirmation Deeds. Subclauses (b) and (d) of cl 3.1 and subcl (b) of cl 3.2 concern Al Maha’s entitlements to the Properties themselves and to the rent or any proceeds of sale derived from those properties.

If one accepts the Chief Commissioner’s characterisation of these subclauses as granting new rights to Al Maha, these clauses might be said to provide some indication of an intention to create a trust relationship. Clauses 3.1(d) and 3.2(b), requiring CCPL to “hold the rent or proceeds of sale for Al Maha” (emphasis added), uses language that, in isolation, is reminiscent of the basic notion of a trust, that one party holds property for the benefit of another. Similarly, Al Maha’s unqualified entitlement to a transfer to it of the Properties under cl 3.1(b) could arguably put the Taxpayers in a position akin to a bare trustee, as the Chief Commissioner submitted.

However, I do not accept the contention that Al Maha is being granted any new rights by these clauses. Given my earlier acceptance of the Taxpayers’ contention that the chapeau controls the subclauses, I do not view these clauses as granting any rights for the first time to Al Maha (and so accept the Taxpayers’ submissions to this effect). Additionally, the immediate context of the other parts of cl 3.1 tend against the Chief Commissioner’s interpretation of cl 3.1(b). In particular, and as I explained above, the language of cl 3.1(a) is directed to the relationship between the parties prior to the entry into the Confirmation Deed. If Al Maha “has held” the beneficial interest in the Properties since the “Date of Acquisition”, a date definitionally prior to the Confirmation Deeds being entered into, then cl 3.1(b) would not add anything new. To the extent the Confirmation Deeds contemplate a preexisting trust relationship, such a relationship would seemingly already include an obligation on the Taxpayers’ part to transfer the Properties to Al Maha on request (that being the duty of a bare trustee anyway: CGU Insurance Limited v One.Tel Limited (in liq) (2010) 242 CLR 174; [2010] HCA 26 (CGU Insurance) at [36] (French CJ, Heydon, Crennan, Kiefel and Bell JJ)). Arguably, the same would also be true as regards the Taxpayers’ obligations to collect rent or sale proceeds, to the extent a bare trustee’s duties also include, by virtue of the office of trustee, obligations to protect and vindicate rights attaching to trust property: CGU Insurance at [36] (French CJ, Heydon, Crennan, Kiefel and Bell JJ).

Clause 4.1 of the Confirmation Deeds appoints Al Maha and its directors to be the attorneys and agents of the Taxpayers. Clause 4.2 provides Al Maha and its directors, as attorneys, the power to do certain acts in relation to the Properties. I do not accept the Chief Commissioner’s submission that this clause manifests an intention to establish a trust relationship. Nothing of this clause suggests to me the parties intended that the Taxpayers would, going forward, hold the Properties for the benefit of Al Maha. The clause simply appoints Al Maha and its directors as attorneys and agents.

Similarly, subclauses (a) and (c) of clause 3.2 do not seem to add much. Those clauses concern who would be responsible for the costs and expenses of the Properties, of execution of the Confirmation Deeds and in relation to any transaction or instrument contemplated by the deeds. In particular, it confirms Al Maha is responsible for those costs and expenses. Again, by reason of the Taxpayers’ interpretation of the chapeau which I accepted earlier, I do not view these subclauses as giving to Al Maha any new obligations. Rather, they are confirming the existing arrangements between the parties. But even if the proper construction of these subclauses is that propounded by the Chief Commissioner, ie, that they are granting new obligations, I do not see how these obligations on Al Maha, as the beneficiary, are indicative of any intention to form a trust relationship.

For those reasons, I accept the Taxpayers’ submissions, and reject the Chief Commissioners’ submissions to the contrary, that the text alone of the operative provisions of the Confirmation Deeds does not manifest any intention to create a trust relationship between the Taxpayers and Al Maha.

I will now consider the context in which cll 3.1 and 3.2 of the Confirmation Deeds (the most material clauses, in my opinion) is found, ie, the remainder of the Confirmation Deeds. In my view, the broader documentary context serves to reinforce that the deeds do not show a sufficient intention to create a trust relationship. I have already addressed cl 4.1 in the previous section.

As to context, cl 2.1 expressly provides the “Background” section, which precedes the Operative Provisions, “forms part of [each Confirmation Deed] as though set out here [in the operative part] in full”. The Background sets out what had taken place to date with respect to the Properties. The Taxpayers drew attention to paragraph F of the Background section, which they submitted “reveals the understanding of the parties at the time they entered into them: that Al Maha held and always had held the beneficial interest in the Properties” (TWS-Closing at [51]). Further, and again as the Taxpayers’ submitted, paragraph F is the conclusion of the sequential recitation of facts which are “fixed on the past and, in particular, on past conduct consistent with a previously existing trust” (TWS-Closing at [51], emphasis in original). Neither party submitted that other parts of the Confirmation Deeds were useful context in construing the material clauses of the deeds (being cll 3.1 and 3.2).

In my opinion, the Background section of the Confirmation Deeds further strengthens the Taxpayers’ contentions that the Confirmation Deeds did not intend to alter the legal relations between the Taxpayers and Al Maha into the future through the creation of a trust relationship.

Paragraph F explicitly states what the parties desired to do through the Confirmation Deeds – namely to recognise and affirm in writing the relationship that they understood themselves to have been in at the time of the deeds. Arguably, given cl 3.1(a) is drafted in the same terms, this recital on its own does not add much, but it nonetheless does add weight to the Taxpayers’ arguments.

Paragraph F must be read with paragraphs A-E, being the background facts which ultimately culminate in paragraph F. What I consider to be the effect of paragraphs A-E requires some further explanation. As I understand the Taxpayers’ submissions (see TR P160 L45-P161 L14, especially P161 L6-14), the facts outlined in those paragraphs provide a basis to conclude there may have been a resulting trust over the Properties by reason of Al Maha’s funding of the purchase of the Properties. Thus, the Background section evidences that the parties to the Confirmation Deeds understood Al Maha was the beneficial owner of the Properties and justifies that understanding. This therefore provides a further reason for why cl 3.1(a) should merely be understood as confirming the status quo (or, more precisely, the status quo as understood by the parties) – the parties wanted to confirm there was a trust in circumstances “the parties objectively understood gave rise to a trust” (TR P162 L4-5) but where there was no trust deed.

In my opinion, the Background section sets out what the parties understood was the existing state of affairs with respect to the Property. The facts recited in paragraph C and D, which describe one party (here, Al Maha) paying the whole purchase price for a property legally purchased in the name of someone else (here, the relevant Taxpayer), seemingly for the benefit of the first party (as might be inferred from the facts recited in paragraphs A and B) could support a presumption that there is a resulting trust in Al Maha’s favour: Bosanac v Commissioner of Taxation (Cth) (2022) 275 CLR 37; [2022] HCA 34 at [12] (Kiefel CJ and Gleeson J), [51] (Gleeson J), [104] (Gordon and Edelman JJ).

The above paragraph stems from my acceptance of the Taxpayers’ submissions as to the use that could be made of the Background section of the Confirmation Deeds to the extent those submissions were about what the section demonstrated of the parties’ understanding of the relationship they had vis-à-vis the Properties. Of course, the subjective understanding of the parties is not relevant to construing the Confirmation Deeds. But by reducing their understanding in writing in the Background section, that understanding of the parties forms part of the documentary context against which the deeds ought to be construed: OneSteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1; [2013] NSWCA 27 at [63] (Allsop P, Macfarlan and Meagher JJA agreeing); Lachlan v HP Mercantile Pty Ltd (2015) 89 NSWLR 198; [2015] NSWCA 130 at [52]-[53] (Bathurst CJ, Beazley P, McColl JA). That being so, the Background section helps explain why the Confirmation Deeds, particularly cl 3.1, do not exhibit an intention to create a trust. The parties understood there to already be an existing trust relationship between them given the circumstances of how the Properties were purchased. It would seem inconsistent with this understanding as documented within the operative part of the deed itself (by virtue of cl 2.1) to then have the later parts of the Confirmation Deeds effect a new declaration of trust.

It is convenient to address the parties’ submissions as to the purpose of the document, along with the circumstances surrounding the Confirmation Deeds, under the one heading. That is so mainly because the submissions in this case invoke the surrounding circumstances of the Confirmation Deeds as part of establishing the purpose they each submit the parties had.

I start by observing that paragraph F of the Background section provides an express purpose for the Confirmation Deeds – to acknowledge (and confirm, using the language of cl 3.1(a)) that Al Maha was the beneficial owner of the Properties from the date they were purchased. The Taxpayers submitted that I do not need to work through the evidence to try and determine whether the purpose stated in that paragraph is right or wrong, as “[i]t’s there” (TR P162 L13-15).

The Chief Commissioner’s submissions characterised the purpose of the Confirmation Deeds very differently, with reference to the circumstances surrounding the Confirmation Deeds. As summarised in CCWS-Closing at [48], the Chief Commissioner submitted that the Confirmation Deeds were entered into as part of an arrangement between the Taxpayers and Al Maha under which Al Maha would reduce its income tax liability by claiming that its expenses included an amount representing the decrease in the value of the Properties. As part of the arrangements, the Taxpayers executed the Confirmation Deeds to establish they held the Properties on trust from the date the relevant properties were acquired. At [73] of CCWS-Closing, the Chief Commissioner submitted that it was “imperative” for Mr Bechara to establish Al Maha held the beneficial interest in the Properties from the date they were acquired, through the Confirmation Deeds, so Al Maha could benefit from the reduction in its income tax liability.

Some preliminary observations should be made about the use of surrounding circumstances in this case. First, the surrounding circumstances which can legitimately be taken into account in construing documents like the Confirmation Deeds are those which are known to all parties to the document: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37 (Mount Bruce) at [50] (French CJ, Nettle and Gordon JJ); Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352; [1982] HCA 24 (Mason J); HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634; [2020] NSWCA 296 at [56] (Meagher JA and Ball J). Determining what “both parties” to each of the Confirmation Deeds knew in this case is a somewhat artificial exercise. That is because at all material times, both Al Maha and each of the Taxpayers only had one director – Mr Bechara. As a matter of logic, whatever Mr Bechara would have known is something all parties to the Confirmation Deeds would have known. Certainly, neither side in this dispute suggested otherwise.

Second, the only surrounding circumstances to which recourse may be had are objective circumstances – it is not permissible to have regard to the parties’ statements and actions reflecting their actual intentions and expectations: Mount Bruce at [50] (French CJ, Nettle and Gordon JJ). When responding to the Chief Commissioner’s submissions as summarised in [66], the Taxpayers submitted that the Chief Commissioner’s submissions as to the purpose of the Confirmation Deeds were focused on the subjective intentions of Al Maha and the Taxpayers (which were, practically speaking, those of Mr Bechara) and so should be rejected (TWS-Closing at [58]-[59]).

The Taxpayers’ submissions have some force. On the one hand, the Chief Commissioner’s submissions seem to focus on what he says Mr Bechara wanted to achieve by the Confirmation Deeds. This is especially so at [72]-[73] of CCWS-Closing, which I read as submissions about what Mr Bechara’s (and so, the Taxpayers’ and Al Maha’s) subjective intentions were. They do not seem to be about objective events, circumstances or things.

However, in any event, I also do not accept the Chief Commissioners’ submissions that the objective surrounding circumstances establish the Confirmation Deeds as having the purpose he contends they had.

The objectively ascertainable background events to the Confirmation Deeds can be summarised as follows:

The Confirmation Deeds were entered into on 24 June 2020.

I accept the Taxpayers’ submissions that what this objective background reveals is that the parties executed the Confirmation Deeds against a background where the parties were already treating the Properties as being beneficially owned by Al Maha. The records evidencing that treatment were prepared not long before the Confirmation Deeds were entered into. If the reasonable person in the position of the parties is taken to know about at least the financial statements being drafted in the way they were, and potentially even Mr Bechara’s own instructions to his accountant which were the genesis for the documents being prepared as they were, then it would seem rather incongruous that a new trust was intended to be declared by what is contained in cll 3.1 and 3.2, particularly cll 3.1(a) and (c). Understood against the background of at least the financial statements, it is even clearer that the words of the Confirmation Deed are, as the Taxpayers submitted, intended to reflect the position which is reflected through the financial statements and records of which the reasonable person in the position of the parties would be aware (ie, that the beneficial interest in the Properties lay with Al Maha). I consider the surrounding circumstances to reinforce the meaning of the Confirmation Deeds derived from a consideration of the text alone.

It is acknowledged that two of the emails sent by Mr Fayad in early January 2020 which both sides accepted formed part of the objective background make reference to the need to prepare a “Deed of Trust”. According to Mr Fayad, the purpose of such documents would be “to reflect the correct ownership” of the Properties. However, as I understood his submissions, the Chief Commissioner did not make much of those words, nor could he have done so, given it was not clear what exactly Mr Fayad meant when he used those words, especially given he is “not a lawyer”, as both parties acknowledged (see TR P192 L47-P193 L9; TR P164 L7-37). I also do not think those words take the matter anywhere.

My acceptance of the Taxpayers’ submissions on this issue should not be taken as a finding that there was in fact a resulting trust over the Properties in Al Maha’s favour. For one, the Taxpayers’ own submissions made clear that, in their view, I was not required to make any findings as to whether there was or was not a resulting trust for the Confirmation Deed to operate against (TR P157 L50-P158 L10). That was so notwithstanding that in opening submissions, the Taxpayers had originally submitted the Confirmation Deeds only needed to be construed if I had found there was no resulting or common intention constructive trust in favour of Al Maha.

The Chief Commissioner submitted I should positively find there was no resulting trust in favour of Al Maha. I do not consider it necessary to decide the issue because whether or not there was no preexisting trust does not alter the analysis I have undertaken to this point. The Chief Commissioner accepted that had I found no new rights were being granted by the Confirmation Deeds, then the deeds were not declarations of trust (TR P188 L42-44). Given my conclusions at [50] and [53], that is the end of the matter.

I also consider that this makes it unnecessary to draw any of the inferences which the Chief Commissioner submitted I should draw. The Chief Commissioner submitted at [49] of CCWS-Closing that when examining the documents which had been tendered by the parties, I should keep in mind that the Taxpayers did not call any witnesses with knowledge of the matters leading up to the Confirmation Deeds and therefore be hesitant in drawing inferences in the Taxpayers’ favour. The Chief Commissioner cited Jones v Dunkel (1959) 101 CLR 298 at 321; [1959] HCA 8 (Windeyer J) and Cook’s Construction Pty Ltd v Brown (2004) 49 ACSR 62; [2004] NSWCA 105 at [42] (Hodgson JA, Santow JA agreeing) in support of this submission. Orally, the Chief Commissioner referred to the failure of the Taxpayers to call Mr Antoine Bechara in particular in the context of establishing that there were no trusts existing before the Confirmation Deeds (TR P191 L21-28) and to rebut the Taxpayers’ argument at TWS-Closing [46] that the Confirmation Deeds necessarily proceeded on a misapprehension of the true legal position (by saying that there was no evidence as to what Mr Bechara had apprehended) (TR P198 L1-5).

As to the first point, as I have just said, I do not consider that in this case it is necessary to decide whether or not there was a resulting trust in Al Maha’s favour prior to the Confirmation Deeds. As to the second point, given the focus is on objective circumstances and intentions, what Mr Bechara subjectively apprehended to be the legal position does not appear to me to be relevant.

I also consider the Chief Commissioner’s submissions that the Confirmation Deeds were entered into for the purpose of enabling Al Maha (or Mr Bechara) to obtain an income tax benefit has a more fundamental issue. Namely, it is not clear how Al Maha and/or Mr Bechara could obtain the income tax benefit the Chief Commissioner claims it/he would obtain by entry into the Confirmation Deeds. As the Taxpayers submitted, it is not evident how deeds entered into in 2020 would establish Al Maha held the Properties on trust from the date of their acquisition which was years before then (TR P170 L10-33).

In their written closing submissions, the Taxpayers put on detailed submissions as to why, by reason of the operation of the relevant provisions of the Income Tax Assessment Act 1997 (Cth) (ITAA), any trust with effect from June 2020 could not have any income tax benefits for Al Maha in respect of its taxable income for prior income years.

Without intending to do injustice to those submissions, the core of the analysis can be summarised in the following way. In the context of the property development business which Al Maha operates, the Properties were trading stock as defined in s 70-10 of the ITAA. In a given income year, s 70-35(2) of the ITAA provides that a business’ assessable income includes the excess of the value of that business’ trading stock at the end of an income year over the value at the start of the income year. However, s 70-35(3) provides that any excess of the value of the trading stock at the start of the income year over the value at the end of the income year can be deducted. Thus, the decline in the value of trading stock entitles a taxpayer to a deduction by the amount of the decline. Any decrease in the value of the Properties was only of benefit to Al Maha in the income years following the acquisition of the Properties if they had been held on trust for it in the relevant income years. Additionally, by reason of s 70-95, an entity acquiring trading stock being disposed of outside the ordinary course of business (the disposition being the declaration of trust) would be deemed to have purchased the Properties at market value. Therefore, any decrease in the value of the Properties must occur while it was held as part of the trust estate for the tax benefit to be obtained by the taxpayer but not before. What was sought to be taken advantage of were any deductions available in respect of the 2016, 2017 and 2018 income years. Thus, the decreases in the value of the Properties were only of benefit to Al Maha and/or Mr Bechara if, and only if, the Properties had been held on trust since their acquisition [2] – a trust with effect from June 2020 was of no benefit in this regard.

As to this analysis, the Chief Commissioner did not submit that this analysis was incorrect. Rather he submitted that what was submitted by the Taxpayers “may be the correct legal position, but we do not know what advice the [Taxpayers] received” (TR P198 L22-23). That is not in terms a concession. But given the Chief Commissioner did not otherwise submit the Taxpayers’ analysis was wrong in this respect, I will treat the Taxpayers’ submissions on this front as accurately stating the legal effect of the relevant provisions of the ITAA, for the purposes of determining this case. For my part, and admittedly without engaging in any detailed statutory interpretation of the provisions cited by the Taxpayers, I am inclined to accept the Taxpayers’ analysis of the relevant income tax law for the purposes of this case.

What follows from what I have just said is that the purpose for the Confirmation Deeds asserted by the Chief Commissioner, ie the obtaining of some income tax benefit by the declaration of a trust, does not seem to be one which could be fulfilled by the Confirmation Deeds if they only operated into the future.

But even if one assesses the Chief Commissioner’s submissions without regard to the legal possibility of obtaining the income tax benefits he says Mr Bechara and Al Maha sought by the Confirmation Deeds (and I record expressly that I have my doubts about whether this is how the analysis should proceed), it is still not clear as a matter of logic how a trust operating from June 2020 into the future would have a benefit to Al Maha. How the quantum of Al Maha’s assessable income for past income years could be affected by the deeds was not clearly explained to me.

One possible answer to that doubt would be finding that the trusts said to be declared by the Confirmation Deeds operated retrospectively, such that they took effect from the “Date of Acquisition” for each of the Properties. That would seem to be the import of [83] of CCWS-Closing, wherein the Chief Commissioner submits that the parties “wished to establish a trust retrospectively, so that it took effect prior to the date of the [Confirmation] Deeds.” Yet, the Chief Commissioner also submitted that whether the Confirmation Deeds operated retrospectively “is a distraction”, adding that the relevant issue is not whether the Confirmation Deeds could take effect prior to the date on which they were executed, but whether they manifested an intention to declare a trust (TR P198 L27-32).

The Chief Commissioner is no doubt correct when he says the main question before me is whether the deeds manifest an intention to declare a trust. However, whether the Confirmation Deeds could have retrospective effect is made relevant to answering the main question when the Chief Commissioner submits the purpose of the Confirmation Deeds was to allow Al Maha to claim the Properties were held on trust from a past date. If any trust purportedly declared by the Confirmation Deeds could not have retrospective effect, then the very purpose which the Chief Commissioner contends for could never be fulfilled.

The Taxpayers submitted quite firmly there was no such thing as a retrospective trust and that I would be recognising such an institution for the first time if I decided any trust declared by the Confirmation Deeds could theoretically operate retrospectively.

However, I can address the parties’ submissions here without deciding the more fundamental issue of whether a trust could ever operate retrospectively. Simply put, there is no indication within the language of the Confirmation Deeds or surrounding circumstances that any retrospective operation is intended. Clause 3.1(a) of the Confirmation Deeds is the closest any of the text of the deeds gets to demonstrating an objective intention the deeds were to operate into the past. However, I have already decided that read within the broader context of the Confirmation Deeds and the surrounding circumstances, the reasonable person in the position of the parties would have concluded that clause was intended to “acknowledge and confirm” the position the parties understood to be the case immediately prior to entry into the Confirmation Deeds. There is nothing otherwise within the text of the Confirmation Deeds, let alone the surrounding circumstances, that would allow me to conclude any sort of retrospective operation was ever intended.

Accordingly, I reject the Chief Commissioner’s submissions that the surrounding circumstances militate in favour of a conclusion that a trust was intended to be declared and I do not accept the Confirmation Deeds had the purpose he contends they had.

For the reasons stated above, the Taxpayers have succeeded in demonstrating the Confirmation Deeds are not declarations of trust within the meaning of the Duties Act. It follows that they were not dutiable transactions. The Taxpayers are therefore entitled to have the Duties Notices of Assessments under review revoked.

The need to determine the issue of the dutiable value of the Properties only arose if I determined the Taxpayers were liable to pay duty. As a consequence of my conclusion that the Confirmation Deeds were not declarations of trust, this issue does not strictly arise. However, I will deal with this claim in the alternative in accordance with the general principle that a trial judge should determine all issues in order to assist the appeal process and obviate the need for a retrial: Transport for NSW v Hunt Leather Pty Ltd (2024) 115 NSWLR 489; [2024] NSWCA 227 at [99] (Bell CJ, Leeming and Mitchelmore JJA); see also Kronenberg v Macaulay [2025] NSWCA 195 at [20]-[22] (Leeming JA, Mitchelmore and Free JJA agreeing).

By the end of the case, the value of two of the Properties was agreed by the parties, based on the agreement of the expert witnesses each had called on this component of the case. The value of 2 Farrow Road was agreed to be $16,054,545. The value of 8 Farrow Road was agreed to be $14,310,000. Nothing further needs to be said about those two properties.

Before dealing with the valuation evidence which was put before the Court in relation to the two properties whose dutiable value was still in dispute, I will first set out the principles which generally govern the valuation exercise in this case. Nothing of what is set out below regarding the applicable principles appears to have been in dispute.

“In assessing value, the starting point is the particular statutory scheme. That scheme provides the legal context in which the valuation exercise is to be undertaken and that context determines the relevant principles of valuation to be applied”: Commissioner of State Revenue (WA) v Placer Dome Inc (2018) 265 CLR 585; [2018] HCA 59 (Placer Dome) at [13] (Kiefel CJ, Bell, Nettle and Gordon JJ).

Section 21(1) of the Duties Act provides that the dutiable value of property that is subject to a dutiable transaction is the greater of:

The unencumbered value of dutiable property is the value of the property determined without regard to any encumbrance to which the property is subject: Duties Act s 23(1).

Beyond what is set out in s 23(1), the Duties Act itself does not expressly set out any principles as to how dutiable property is to be valued. Justice Payne, in SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue (2021) 113 ATR 24; [2021] NSWSC 395 at [168] said that the definition in s 23(1) “is generally accepted as representing ‘market value’”, which means the valuation principles emerging from Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 (Spencer) are to be applied. Both parties proceeded on the basis that the valuation exercise in this case should proceed in accordance with those principles.

What principles of valuation emerge from Spencer? In Placer Dome, at [17]-[18], Kiefel CJ, Bell, Nettle and Gordon JJ summarised what Spencer stands for as follows (footnotes omitted):

A liability for duty charged under the Duties Act arises when a transfer of dutiable property occurs, but if a transfer of dutiable property is effected by an instrument, liability for duty arises when the instrument is first executed: Duties Act, s 12(1)-(2). The relevant date at which the dutiable value of the Properties is to be assessed is therefore the date of the declaration of trust (had I concluded there was a trust). Here, that would be 24 June 2020, when the Confirmation Deeds were executed. In the balance of this section, I will occasionally refer to 24 June 2020 as the valuation date.

The Court received evidence from two expert valuers, one engaged by each side in this dispute. The Taxpayers relied on reports by Mr Angelo Konidaris of Titan Advisory Group. The Chief Commissioner relied on reports by Mr Peter Adlington of Walsh and Monaghan. According to their respective curricula vitae, both valuers have much experience in valuing properties. There was certainly no suggestion that, generally speaking (the need for this qualification will become apparent later), each expert was not appropriately qualified to provide valuation evidence of the kind necessary in this case.

With respect to 2B Hill Road, the expert valuation evidence comprised:

With respect to the Warwick Farm Property, the expert valuation evidence comprised:

Both Mr Adlington and Mr Konidaris were cross-examined in a joint session.

The method of valuation adopted by the expert valuers in these proceedings was described by the Chief Commissioner as the “direct comparison approach”. That approach was adopted by both experts in their respective reports, as well as in the joint reports prepared. That method of valuation involves finding sales of properties similar to the property being valued, deriving a rate paid per square metre for a given comparator property and then adjusting that rate to account for differences between the comparator property and the subject property being valued (eg, to account for differences in location, size, shape, market movements, etc). Using the range of adjusted rates calculated for each comparator property, the experts then come to a final adjusted price per square metre, which is then applied to the property being valued to reach a final figure.

Both experts agreed the “direct comparison approach” was the appropriate approach to valuation in this case and, unsurprisingly, no party submitted that was an inappropriate approach to follow. For my part, I consider this an appropriate approach in the circumstances of this case.

As will be discussed below, the differences in the valuations reached for the two properties whose value remained in dispute largely came down to the size of the adjustments that each valuer considered should be made when comparing other properties to the properties being valued in this case.

For the reasons which follow, had it been necessary to decide, I would have found that I could not accept both the Taxpayers’ and the Chief Commissioner’s valuation evidence concerning 2B Hill Road and the Warwick Farm Property. The resolution of this issue would then ultimately have been a matter of onus. I would have concluded the Taxpayers would have failed to meet their onus in proving the dutiable value of those two properties was different from the Chief Commissioner’s assessment of dutiable value, and so the Chief Commissioner would have succeeded on this issue (but not because I accepted the expert evidence put by him).

I will address the specific issues as to the valuation evidence concerning each of 2B Hill Road and the Warwick Farm Property in turn. As my conclusion on issue 1 means this issue is being decided in the alternative, I will state my reasons as to issue 2 somewhat more succinctly than I otherwise might have.

For 2B Hill Road, Mr Adlington considered the value of the property as at the valuation date was $30,290,000, whereas Mr Konidaris valued the property at $6,635,000 as at the valuation date. For comparison, the purchase price (and the value used as the dutiable value of the property by the Chief Commissioner in his assessment in 2021) paid by Riveredge was $10,000,000.

As stated earlier, the differences in valuations are the result of not agreeing on the size of the adjustments that needed to be made between comparator properties and the subject property being valued. For 2B Hill Road, the material differences between the valuers included:

While it may have been possible to reach a conclusion as to how the first and second points of difference ought to be resolved, the evidence concerning the third of these issues is dispositive. By this, I mean that because I consider I cannot accept the evidence going to the third issue, that I am otherwise unable to reach a conclusion as to what the value of 2B Hill Road actually is. As Mr Konidaris described it in cross-examination, this issue was the “single largest difference” between the valuers (TR P82 L22-29). I acknowledge that both the Taxpayers and the Chief Commissioner made extensive submissions in relation to the first and second points of difference.

The differences in opinion as to what would have been the available floor space as at the valuation date and how a hypothetical prudent purchaser might have accounted for the risk of the litigated development consent application in the Land and Environment Court (which appear to be interrelated issues) impact the end of the process described at [104] above. It is after the experts have derived their final adjusted price per square metre that the difference in the available area for development becomes relevant, given it is this area to which the adjusted rate per square metre is applied to arrive at a final figure.

By contrast, the differences in opinion as to the impact on the value of 2B Hill Road of a nearby gas pipeline affects how each of the experts arrive at adjusted rates per square metre for each of the comparator properties, which of course then leads to the final adjusted rate to be applied to the subject property. It is the adjustments (downwards) from the prices of the comparator properties which are referable to the gas pipeline which forms the principal difference in the adjusted rates per square metre calculated by the experts. Absent the adjustments for “construction risk” as it is called in the Riveredge Joint Report, the adjusted rates calculated for comparator properties is roughly the same. The adjustments referable to market movement, location and size in the joint report are in fact equal between the two experts. The adjustment referable to differences in shape are not equal but do not seem to lead to huge differences. The experts had also agreed that some costs for remediation of the site was necessary to deal with contamination, and so those costs needed to be accounted for. The Riveredge Joint Report indicates the valuers agreed on what the quantum of those remediation costs would be and deducted them at the end.

It is appropriate then to explain what the issue concerning the gas pipeline actually is. There is a gas pipeline running through the land of 2B Hill Road which is about 25 metres away at the closest point of the land which is capable of development. As at the valuation date, the pipeline appears to have been owned and operated by an entity known as “Viva Energy”, though Caltex also appears to either own or operate or otherwise be associated with the pipeline. There is also another gas pipeline owned or operated by or otherwise associated with entities known as “Qenos” and “Jemena”, which is about 40 metres away from the closest point of the land which could be developed. No specific attention in the evidence or the submissions was given to this second pipeline. Accordingly, references to “the gas pipeline” or similar below should be understood as references to the Viva Energy/Caltex pipeline.

The issue on which the valuers sharply divided is as to what adjustments should be made to account for the impact of gas pipeline, namely, what impact the gas pipeline would have on the costs of construction as part of putting the property to its highest and best use as a high-density residential development. In his report of 24 June 2024, Mr Konidaris opined that the gas pipeline would have a “significant” impact on the value of 2B Hill Road. He said, at page 16 of his 24 June 2024 report on this property:

In the Riveredge Joint Report, Mr Konidaris identified several risks posed by the pipeline that he opined a hypothetical prudent purchaser would consider when formulating an offer to buy 2B Hill Road, including:

To account for these risks that Mr Konidaris identified, he considered that there would be a cost penalty of approximately $765 per square metre referable to the gas pipeline. Mr Konidaris reached that number by using a construction costs guide for the construction cost of a multi-unit high density residential apartment development in Sydney (which was said to be in the range of $2,445-$2,635 per square metre). He then took the mid-point of the range, $2,540 and then calculated 30% of that figure, and rounded it to $765. That 30% figure represented an “additional contingency cost” to account for the added cost, complexity and time resulting from issues referable to the pipeline.

By contrast, Mr Adlington disagreed and did not consider the impact of the pipeline to be significant. He opined that it was unlikely that the pipeline would affect the market value of 2B Hill Road. In the Riveredge Joint Report, Mr Adlington accepted that there would be some costs involved in satisfying conditions of Viva Energy (and perhaps Caltex too) that a hypothetical purchaser of the land would need to comply with as part of any development on 2B Hill Road. The evidence of such conditions comes from the minutes of a meeting between Viva Energy and representatives of Mr Bechara’s property development business on 12 May 2020, just over one month before the valuation date. However, he instead chose to make a 2.5% downwards adjustment to the rates per square metre derived from the sales of comparator properties. This resulted in very small changes to the adjusted rates derived from comparing the sales of other properties.

Both experts, however, conceded in cross-examination that they were not expert engineers nor quantity surveyors. That concession is critical. It leaves the Court without a solid evidentiary basis to quantify what impact the gas pipeline might have on the value of 2B Hill Road.

By way of example of the lack of appropriate specialised knowledge of the experts in relation to the risks posed by the pipeline exposed in the course of cross-examination, the following exchange took place between counsel for the Chief Commissioner and Mr Konidaris (TR P72 L1-35):

Counsel for the Chief Commissioner further explored with Mr Konidaris the basis of his estimate of a 30% increase in costs associated with the risks posed by the pipeline, which was followed by some invited commentary from Mr Adlington (TR P79 L1-23):

While Mr Adlington’s report appeared to proceed on the basis that no adjustment needed to be made to account for the gas pipeline near the land capable of development, his opinion as expressed in the Riveredge Joint Report included an acceptance that there would be additional construction costs associated with the pipeline, given Viva Energy’s requirements as part of giving its approval or consent. Even if Mr Adlington had not subsequently accounted for the pipeline in the Riveredge Joint Report, I would have rejected an approach which took as its premise the idea that the pipeline would have had zero impact on the value of 2B Hill Road as at the valuation date. Even without having received expert evidence from an engineer or quantity surveyor, the perfect knowledge of a hypothetical prudent purchaser as at the valuation date would include the minutes of the meeting with Viva Energy in May 2020. That evidence showed Viva Energy would, for example, require its preferred safety consultants to be engaged, require a commercial agreement to be signed before works could be commenced and that the costs of an engineering consultant be managed by the developer making use of the land. That alone suggests the gas pipeline would have some impact on the value of the property. Even Mr Adlington conceded in cross-examination that a hypothetical prudent purchaser would recognise risk with respect to the ability of a developer to action a development and remain consistent with any approvals provided by the relevant gas pipeline operator (TR P103 L37-43).

However, as both the Taxpayers’ submissions (at TWS-Closing [104]) and the Chief Commissioner’s submissions (at CCWS-Closing [129]-[130]) acknowledge, the Court has no reason to accept either the evidence of Mr Adlington or Mr Konidaris with respect to what impact the gas pipeline might have on the value of 2B Hill Road. The reason for that is because neither expert has the expertise to opine on the subject themselves and they were not given expert evidence from an engineer or quantity surveyor which they may have taken into account in their valuations. Mr Konidaris frankly and admirably acknowledged that he was taking a “best guess” with the information he had as to what the cost penalty of the pipeline might be and that he would have taken account of evidence from other experts if he had such evidence (TR P79 L4-16). Mr Adlington similarly said he could not comment on the costs associated with developing around the pipeline “without knowing what the additional construction costs would be and without the engineering [sic]” (TR P76 L49-50).

I therefore would have accepted the submissions from each side urging me to reject the evidence going to the impact of the valuation from their opponent’s expert evidence, which on both sides boiled down to the submission the experts were not qualified to give the relevant evidence. I also accordingly would have rejected the submissions by each side urging me to accept the expert evidence relied on by them to support their case, for the same reason.

It is one thing to acknowledge that the Court is not obliged to accept one out of the two competing valuations and can instead make such adjustments as are required by the evidence to ultimately arrive at a figure between the competing valuations (provided this final figure is not merely an average or mean, and that the Court is not stepping in as a third valuer in making its adjustments): Town of East Fremantle v Cornell (2005) 138 LGERA 180; [2005] WASCA 18 at [94], [101]-[102] (Le Miere J, Murray J agreeing); citing Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369 at [81] (Debelle J).

But here, there is no rational basis on which adjustments could properly be made to account for the impact on the value of 2B Hill Road caused by the gas pipeline, namely the impact on construction costs for a future development on the land. The valuers themselves recognised in cross-examination that expert evidence is needed to quantify additional costs associated with the gas pipeline. I am not an expert quantity surveyor nor engineer and there was no further expert evidence before the Court.

Even if I ultimately had otherwise accepted the balance of the approach to the valuation of 2B Hill Road taken by Mr Konidaris (and I record expressly that I have not rejected or accepted the balance of his approach, given I have not considered it even in the alternative), namely by accepting the much smaller floorspace he considered was available for development, I could not reach an adjusted rate per square metre to then apply to that floorspace for the reasons I have explained above.

The consequence of this is that I would not have been satisfied that the Taxpayers had discharged their onus under s 100(3) of the TA Act to show the assessment of duty payable with respect to 2B Hill Road was excessive. The salient point is that based on the evidence before me in these proceedings, I would have considered that I could not accept Mr Konidaris’ valuation (and, it should be said, Mr Adlington’s valuation), and I would have considered that the Taxpayers’ evidence otherwise did not permit me to be satisfied that the value of the property was less than that which it was assessed to be.

For the Warwick Farm Property, Mr Adlington considered the value of the property as at the valuation date was $20,750,000 in the WFC Joint Report (which was revised down from an initial valuation of $21,880,000 in his report of 10 July 2024), whereas Mr Konidaris valued the property at $9,500,000 as at the valuation date. For comparison, the purchase price (and the value used as the dutiable value of the property by the Chief Commissioner in his assessment in 2021) paid by WFC was $23,500,000. I note even the higher value reached by the valuer relied on by the Chief Commissioner is in fact lower than the purchase price paid by WFC.

Like the valuations for 2B Hill Road, the differences in valuations for this property are the result of not agreeing on the size of the adjustments that needed to be made between comparator properties and the subject property being valued. The most material differences between the valuers, and the ones which the submissions of both sides focused on, were:

Similarly to my consideration of the valuation evidence concerning 2B Hill Road, while it may have been possible to reach a conclusion as to how the first point of difference ought to be resolved, the evidence concerning the second of these issues is dispositive.

The Warwick Farm Property is built on land which is flood prone. It is agreed that the land is at a “medium risk” of flooding. The experts were agreed that the highest and best use of the land would be a mixed use development for specialised retail, food and drink, child care and health services facilities, along with associated signage and carparking. The experts agree that the consequence of the flood prone nature of the land is that any subsequent development on the land to make the best use of it (the land is currently vacant and was vacant at the valuation date) would require the construction of a suspended concrete slab, as opposed to a slab which was not suspended. The need for a suspended slab arises from a need to have the finished floor level be above a certain height, given the risk of flooding on the subject land. The experts also agree that this would increase the costs of development and so would necessarily cause a discount in the value of the Warwick Farm Property. Up to this point, this evidence can be accepted.

However, it is the next step, actually calculating the appropriate adjustment to account for the cost of a suspended concrete slab, where the issue arises. As has already been established earlier in these reasons for judgment, Mr Adlington and Mr Konidaris are not engineers or quantity surveyors. This means they are not qualified to opine on what the quantum of additional construction costs referable to the need for a suspended slab would be. I would again have accepted the submissions of each side urging me to reject their opponent’s valuation evidence in relation to the cost of the suspended concrete slab and again have rejected each side’s submissions urging me to instead accept their own valuation evidence in relation to the additional costs of a suspended slab. Neither valuer is qualified to give that evidence, which would need to come from a quantity surveying or engineering expert.

By way of example of the lack of appropriate specialised knowledge of the experts in relation to the suspended concrete slab issue, as exposed in the course of cross-examination, the following exchange took place between counsel for the Chief Commissioner and Mr Konidaris, followed by some invited commentary from Mr Adlington (TR P125 L4-8, P127 L1-24):

I am thus in a similar position as I was when considering the valuation evidence about 2B Hill Road. There is a factor that everyone accepts will affect the value of the property, namely, the costs associated with a suspended concrete slab needing to be constructed. But there is also no evidence which I can use to rationally make adjustments to the valuations reached by either valuer to account for the costs associated with the suspended slab, given the need for expert evidence to make such adjustments on a material issue. Again, even if I had accepted other aspects of Mr Konidaris’ methodology (and I again record expressly that I have not rejected or accepted the balance of his approach, given I have not considered it even in the alternative), I would not have been satisfied that Mr Konidaris’ final adjusted rate per square metre was appropriate given I would have rejected his adjustments referable to the suspended slab.

Consequently, and like with the valuation of 2B Hill Road, I therefore would not have been satisfied that the Taxpayers had discharged their onus under s 100(3) of the TA Act to show the assessment of duty payable with respect to 2B Hill Road was excessive.

The Taxpayers have been successful in the proceedings. The usual rule as to costs would suggest that costs should follow the event in each proceeding: Uniform Civil Procedure Rules 2005 (NSW) r 42.1. The Taxpayers sought their costs in accordance with the usual order, as reflected in their proposed orders sent to my Chambers, at my request, after the hearing had concluded.

However, the Chief Commissioner had indicated during the hearing that he wished to be heard on costs whatever the outcome. He foreshadowed on day two of the hearing that it may be necessary to deal separately with the costs that had been incurred into issues which were ultimately abandoned by the Taxpayers, as earlier recounted in these reasons (see TR P36 L45-P37 L1). In deference to that request, I will not make any costs orders for the moment and instead give the parties the opportunity to either come to an agreed position on costs or to make submissions on costs. A timetable for the resolution of the issue of costs is provided for in the orders I have made.

For the reasons set out above, I make the following orders in each of proceedings 2022/00385284; 2022/00385988; 2022/00385268; and 2022/00386018: