Nischu Pty. Ltd. v. Commissioner of State Taxation (W.A.)

Judges:
Zelestis QC C

Court:
Supreme Court of Western Australia

Judgment date: Judgment handed down 29 May 1990.

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Commissioner Zelestis Q.C.

This appeal concerns the duty chargeable, pursuant to the Stamp Act 1921 as amended (``the Act''), in respect of an agreement dated 30 June 1987 whereby Austamax Resources Ltd. agreed to sell to the appellant, Nischu, Pty. Ltd., all of the issued shares in Murchison Zinc Company Pty. Ltd. (``Murchison'') for $24,000,000. The transaction was completed on 30 June 1987.

The respondent, the Commissioner of State Taxation, considered that the agreement was one which attracted the provisions of Pt IIIBA of the Act which, it was common ground, was in force on 30 June 1987. That Part, as the heading to it suggests, is concerned with the imposition of duty when there is a change of control of certain land-owning corporations.

The respondent requested the appellant to lodge a statement, pursuant to sec. 76AG(1) of the Act, in respect of the appellant's acquisition of the shares in Murchison and the statement which the appellant lodged, under protest, in compliance with this request was eventually assessed for duty, pursuant sec. 76AH, in the sum of $1,015,525.

The appellant objected to the assessment and following the respondent's disallowance of the objection, the appellant appealed to the Court pursuant to sec. 33 of the Act. The Court is required to determine whether the respondent's assessment of duty was correct and, if it is found to be erroneous, to assess the duty chargeable under the Act.

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The appellant contends that the agreement is only chargeable with duty pursuant to sec. 74(1) of the Act. It is common ground that, if Pt IIIBA does not apply, duty in the sum of $144,000 must be charged upon the agreement pursuant to sec. 74(1).

Section 76AG(1) of the Act relevantly provides that a person who, by a relevant acquisition, acquires a majority interest in a company to which Div. 2 applies, shall prepare and lodge with the Commissioner a statement in respect of that acquisition. Section 76AH imposes duty on such a statement, in accordance with sec. 76AL, at the rates applicable to conveyances on sale. By sec. 76AL(1), duty is chargeable on the basis of the value, free of encumbrances, of the land situated in Western Australia to which the company is entitled.

Because, pursuant to the agreement, the appellant acquired all of the issued shares in Murchison, that acquisition was both a ``relevant acquisition'' and an acquisition of a ``majority interest'' in a company, within sec. 76AG(1): see sec. 76AJ and 76AK respectively. The issue thrown up by sec. 76AG(1) is whether Murchison was a company to which Div. 2 applied.

By sec. 76AI(1) of the Act, Div. 2 applies to a company if:

``(a) shares of the company are not listed on a recognized stock exchange or are listed on a prescribed stock exchange; and

(b) it is a land-holder within the meaning in subsection (2).''

As the shares in Murchison were not listed on a recognised stock exchange, sec. 76AI(1)(a) was satisfied in the present case.

Section 76AI(2), which is in Div. 2, provides that:

``A company is a land-holder for the purposes of this Division if at the time of a relevant acquisition -

• (a) it is entitled to land situated in the State and the unencumbered value of the land is not less than $1 000 000, or it is entitled to land situated in the State as a co-owner of the freehold or of a lesser estate in the land and the value of the whole of the freehold or lesser estate is not less than $1 000 000; and
• (b) the value of all land to which the company is entitled, whether situated in the State or elsewhere, is 80% or more of the value of all property to which it is entitled, other than property directed to be excluded by subsection (3).''

The main issue in the appeal is whether, at 30 June 1987, Murchison was a landholder within this provision.

In order to resolve this issue, it is necessary to determine what was the ``land'' of Murchison and what was its ``property'', at the material time, and then to consider the value of such land and property. Certain property of a company is excluded from consideration by sec. 76AI(3). Murchison was a landholder only if the value of the land to which it was entitled exceeded $1,000,000 and if that value was 80% or more of the value of all of the relevant property to which it was entitled.

At the date of the agreement, Murchison held a 31.16% interest in the so-called Golden Grove Joint Venture by which, according to the statement of agreed facts filed by the parties, Murchison was:

``beneficially entitled to an undivided 31.16% interest as tenant in common in:

• (a) the Golden Grove Joint Venture;
• (b) the mining tenements the subject of the Golden Grove Joint Venture, comprising exploration licences E59/54-56 (inclusive) and mining lease M159/3 (collectively `the Tenements');
• (c) all improvements on and upon the Tenements;
• (d) all fixtures, facilities, machinery, equipment and supplies and any other property or rights of any description whether real or personal required contained or held in respect to the Joint Venture;
• (e) all rights, rights to mine and produce minerals under the Joint Venture; and
• (f) all surveys, maps, mosaics, photographs, electromagnetic tapes, radiometric traces, drawings, memoranda, cores, samples, drill logs, engineering studies, design work, geological, geophysical and other test data, maps and reports, sample and assay

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  ATC 4395

  reports, notes and any other data concerning, relating to or derived from the Tenements,

subject always to the burden of 31.16% of the expenses, costs and liabilities of the Golden Grove Joint Venture.''

The Golden Grove Joint Venture arose from an agreement dated 3 October 1979 made between Amax Exploration (Australia) Inc., Aztec Exploration Co. Pty. Ltd. (``Aztec''), Electrolytic Zinc Company of Australasia Limited (``EZ'') and Esso Exploration and Production Inc. by which those parties associated themselves in a joint venture, as tenants in common, to explore and develop certain mining tenements. In 1984 Murchison, which was then named Austamax Operations Pty. Ltd., replaced Amax Exploration (Australia) Inc. as a party to the joint venture agreement.

The only relevant mining tenements held by the parties to the Golden Grove Joint Venture at 30 June 1987 were in Western Australia and Murchison did not then hold any interest in land outside Western Australia. Murchison's only other asset of significant value was a debt owed by its holding company, which is excluded from consideration by sec. 76AI(3).

By 30 June 1987, the parties to the Golden Grove Joint Venture had expended more than $28,000,000 on exploration of their tenements, mapping, geological analysis, obtaining a bulk sample from the tenements, metallurgical testing, ore reserve calculation, mining studies and other associated activities. The activities had generated a considerable body of information relating to the tenements (``the mining information'') which was held in the documents and other chattels owned by the joint venturers and described in para. (f) of the passage from the statement of agreed facts which is set out above.

By sec. 76(1) of the Act, in Pt IIIBA of the Act, unless the contrary intention appears, ``land'' includes a mining tenement and any estate or interest in land. It was not argued that a contrary intention appeared in sec. 76AI.

The appellant's case was that, on the agreed facts and for the purposes of the respondent's assessment, the only land to which Murchison was entitled at 30 June 1987 was its 31.16% undivided interest in the Golden Grove Joint Venture mining tenements. Although the respondent had foreshadowed an argument that the mining information in some way constituted an ``integral part'' of those tenements, in the end the respondent did not dispute that, for the purposes of sec. 76AI(2), Murchison's only land was its interest in the joint venture tenements and that this did not include the mining information or the chattels which contained that information.

The parties were agreed that the mining information, as opposed to the documents and things which contained that information, was not itself property: see
Pancontinental Mining Ltd. v. Commr of Stamp Duties (Qld) 88 ATC 4190; (1989) 1 Qd.R. 310. Whatever light the mining information may throw on the value of the tenements to which it relates, the information itself does not form part of the tenements. The information, in my opinion, is neither ``land'' nor ``property'' for the purposes of sec. 76AI of the Act.

I find that, for the purposes of sec. 76AI of the Act, at 30 June 1987, the only land to which Murchison was entitled was its 31.16% undivided interest in the Golden Grove Joint Venture tenements and Murchison's property was its interest in that joint venture as described in the statement of agreed facts and set out above. The critical distinction between the two for present purposes, as will emerge, is that the property, but not the land, includes the documents and things which contain the mining information.

The value of Murchison's property and its land, at 30 June 1987, must now be considered.

The parties were agreed that, when property is valued for stamp duty purposes, it is necessary to determine the real or true value of the property by applying the approach used in determining compensation for compulsory acquisition, the general principle being that the true value is the price that would be payable by a willing but not anxious vendor to a willing but not anxious purchaser after proper negotiations between them had been concluded: see
Spencer v. The Commonwealth of Australia (1907) 5 C.L.R. 418;
Perpetual Trustee Co. Ltd. v. F.C. of T. (1942) 65 C.L.R. 572 at p. 579;
Abrahams v. F.C. of T. (1944) 70 C.L.R. 23 at p. 29 and
The Executors of the Estate of Crane v. F.C. of T. 75 ATC 4001 at p. 4003; (1975) 49 A.L.J.R. 1 at p. 2. It is the

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ATC 4396

value in exchange and not the value in use which is to be ascertained: see
Peko-Wallsend Operations Ltd. v. Commr of State Taxation (W.A.) 89 ATC 4569 at p. 4587. Where there are no abnormalities affecting a market, the price at which property changes hands in the ordinary course of business in the market is usually its true value: see Perpetual Trustee Co. Ltd. v. F.C. of T. at p. 579 and
Commr of Succession Duties (S.A.) v. Executor Trustee and Agency Company of South Australia Ltd. & Ors (1947) 74 C.L.R. 358 at p. 361.

The test of value laid down in Spencer involves consideration of a hypothetical transaction between ``persons conversant with the subject at the relevant time'' (Spencer at p. 432 per Griffith C.J.). The knowledge of the relevant property which is to be attributed to the hypothetical parties was more fully explained by Isaacs J. in Spencer at p. 441 where his Honour said:

``To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.''

This aspect of the valuation principles raised no difficulty in relation to the valuation of Murchison's property. The hypothetical purchaser of that property must be taken to have had knowledge of all of the mining information when negotiating price and to have known that, by the hypothetical purchase, he would acquire an interest in the objects which contain that information.

However, an important issue was raised concerning the degree of knowledge of the features of Murchison's land which is to be attributed to the hypothetical purchaser of that land.

It was submitted for the appellant that the hypothetical purchaser should be presumed to have been cognisant only of information relating to the land that was publicly available at the material time. In the alternative, the appellant's case was that the hypothetical purchaser should be presumed to have had such reasonable access, at the time of sale, to the mining information as would be expected to be given to a possible purchaser in a similar transaction.

The respondent's submission was that the mining information was valueless when considered separately from the tenements to which it related, that in some way the information ``adhered'' to the tenements and that a hypothetical willing vendor, keen to maximise the price to be obtained for his tenements or interests therein, would allow the mining information to pass permanently to the purchaser. Thus, it was contended that in valuing Murchison's interest in the tenements, the Court should assume that the hypothetical purchaser would also acquire a permanent right of access to, and use of, the mining information.

The test laid down in Spencer's case requires an assumption to be made that both parties are ``perfectly acquainted with the land'', to use the words of Isaacs J. at p. 441. The matter is not to be approached, in my opinion, by asking what a willing but not anxious vendor would have disclosed to a potential purchaser but by assuming that both parties to the hypothetical sale were fully aware of all matters affecting the value of the land, ``either advantageously or prejudicially'' (per Isaacs J. at p. 441).

In my opinion, Murchison's land is to be valued at 30 June 1987 on the basis that a willing but not anxious purchaser had knowledge of all of the mining information for the purpose of negotiating a price for that land. However, it is not to be assumed that, by acquiring the land, the purchaser will also acquire a permanent right of access to, and use of, that information. By the hypothetical purchase, the notional purchaser will simply acquire the relevant land.

A purchaser of Murchison's interest in the tenements would require permanent rights to

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ATC 4397

much of the mining information in order to mine the tenements or disclose their qualities to a subsequent purchaser. The nature and extent of the mining information is such that a purchaser's knowledge of it, acquired for the purposes of concluding a purchase of Murchison's interest in the tenements, would not enable the purchaser to mine the tenements or adequately disclose their features to a subsequent purchaser.

Some of the mining information is available in public records, such as reports to stock exchanges and other public documents published by joint venturers whose shares were listed on a stock exchange, reports lodged with the Mines Department in compliance with statutory obligations and which will be available to a purchaser of a tenement or an interest in a tenement, and articles in newspapers and mining industry journals. Nevertheless, a considerable amount of the mining information could not be obtained from such sources and would have to be reproduced to enable the tenements to be mined. Some of the mining information that was not freely available would not need to be duplicated. For example, a purchaser who had knowledge of the mining information for the purpose of negotiating a price for Murchison's interest in the tenements would discover that some exploration had revealed little or no evidence of mineralisation in particular areas and would know that this work would not need to be repeated. A purchaser of Murchison's interest in the tenements would require all but such aspects of the mining information. All of these facts were not in issue.

In my opinion, in agreeing upon a price for the land, the hypothetical vendor and purchaser would have regard to the cost of regenerating or acquiring the important information that would not otherwise be available to the purchaser after the sale. This cost would cause the parties to reduce the price that would otherwise be appropriate for Murchison's land.

The appellant contended that, in valuing Murchison's property, sec. 76AA(2) of the Act applied, thereby invoking sec. 75A(4) which provides for the value of an undivided share in any property to be ascertained by first determining the total value of the property and then expressing the share as a fraction and multiplying the total value by that fraction.

Section 76AA(2) invokes sec. 75A(2), (3) and (4) where the Commissioner is not satisfied with further evidence of the unencumbered value of any land furnished, in response to a requirement by the Commissioner, by a person who is required to lodge a statement under sec. 76AG. This provision, in my opinion, only applies where sec. 76AG applies and where further evidence of such value has been sought by the Commissioner. It does not apply where, as in the present case, the very question is whether sec. 76AG(1) applies and for this purpose the value of a company's property is to be determined.

Both parties adduced expert evidence as to the value of Murchison's property and land.

Mr Hugh Anthony Robinson of Australian Mineral Economics Ltd., a mining engineer who gave evidence for the respondent, was of the opinion that, in the present case, in applying the test laid down in Spencer, the most appropriate method of valuation was to assess the value of the property in question by reference to comparable market transactions, taking care to identify and take account of any ``unusual influences'' affecting such transactions. In his opinion, there was a comparable market transaction which established the value of Murchison's property as at 30 June 1987.

In May 1987 EZ agreed to sell its 31.16% interest in the Golden Grove Joint Venture to Aztec (or, according to the information memorandum, document H in ex. 1, a company associated with Aztec) for $24,000,000. Mr Robinson considered that this agreement was ``an arm's length transaction'' between parties who, as existing members of the Golden Grove Joint Venture, were fully conversant with the joint venture and all of the circumstances that might affect its value. The agreement between EZ and Aztec was subject to pre-emptive rights conferred on the other joint venturers by the joint venture agreement and those rights were exercised resulting in the sale, in August 1987, of EZ's 31.16% interest in the joint venture, for an aggregate price of $24,000,000, to the other joint venturers in certain proportions. Mr Robinson considered that there was no ``unusual influence'' affecting the agreement between EZ and Aztec and, having regard to that transaction, it was his opinion that at 30 June 1987 the value of Murchison's property, which it was not

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ATC 4398

disputed was, for present purposes, the same as EZ's 31.16% interest in the joint venture, was $24,000,000.

Mr Robinson's evidence in this regard was supported by Mr Christopher John Clarke, a consulting geologist, who also gave evidence for the respondent.

Mr Peter Lyle McCarthy of James Askew Associates Pty. Ltd., a mining engineer who gave evidence for the appellant, was instructed in June 1987, by Murchison's parent company, Australian Consolidated Minerals Ltd., to assess the fairness of the consideration which Aztec had agreed to pay EZ for the latter's 31.16% interest in the Golden Grove Joint Venture. He prepared a report dated 24 July 1987 which purported to contain an ``independent valuation'' of the interest and he agreed that the report was ``a valuation for all intents and purposes''. Mr McCarthy determined that the price of $24,000,000 was fair and reasonable and that the value of Murchison's 31.16% interest in the joint venture was $24,000,000.

In a letter dated 28 January 1988, which the appellant's solicitors submitted to the respondent in support of the appellant's objection to the assessment, Mr McCarthy explained that for the purposes of his report dated 24 July 1987 he had valued the 31.16% interest in the property by the discounted cash flow (``dcf'') technique at the sum of $22,351,798. In evidence, he agreed that the primary and best method of valuing a mining interest, such as Murchison's property, was by reference to a comparable market transaction and that the 1987 agreement between EZ and Aztec was a comparable transaction for the purposes of valuing Murchison's property.

In the light of this particular evidence from Mr McCarthy and the evidence of Messrs Robinson and Clarke which I have outlined above, all of which I accept, I do not think that assistance is to be gained in determining the value of Murchison's property by considering the dcf analysis made by Mr McCarthy in his report dated 28 February 1990. That analysis differed considerably from the dcf analysis reflected in his letter dated 28 January 1988 and from a dcf analysis made by Mr Robinson. Mr McCarthy's latest dcf analysis put the value of the entire Golden Grove Joint Venture at the relevant date as between $21,150,000 and $70,223,000, depending on the assumptions to be made, whereas Mr Robinson's dcf analysis resulted in an amount of $75,000,000. I accept the evidence of Messrs Robinson and Clarke, with which Mr McCarthy substantially agreed, to the effect that the dcf technique does not determine a market price but may be a guide to value where there is no comparable sales evidence. The dcf technique involves many assumptions, the most significant being the rate of discount to be adopted. The present case demonstrates that there are very broad ranges within which expert opinions on the assumptions to be made in a dcf analysis of particular property may vary.

Finally, it is significant that in the statement dated 23 October 1987 lodged by the appellant under sec. 76AG in response to the respondent's request, the appellant estimated the value of Murchison's relevant property at 30 June 1987 to be $24,000,000. It is implicit in the respondent's assessment docket dated 10 November 1987 that this estimate was accepted by the respondent.

For these reasons, applying the valuation principles to which I have referred, I find that at 30 June 1987 the value of Murchison's property was $24,000,000.

There are some difficulties with the evidence relating to the value of Murchison's land. Mr Clarke, both in his written report dated 30 March 1990 and in his oral evidence, was of the view that this land could not be valued separately from the mining information, that is, it could not be valued on the assumption that the purchaser did not acquire the right of access to, and use of, that information. Indeed he said that were he asked to attempt a valuation of Murchison's land on this basis he was fairly certain that he could not do it. He had certainly never previously attempted such a valuation.

Mr Robinson, in his written report, set out to value Murchison's interest in the tenements but he did so on the assumption, which I have held to be incorrect, that the purchaser would acquire a permanent right of access to, and use of, the mining information. He expressed the opinion that such of the mining information as would not be available from public sources and which would be important to a purchaser could have been reproduced in 1987 at a cost of up to $10,000,000. This cost related to the whole of the tenements.

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In oral evidence, Mr Robinson agreed that the value of Murchison's interest in the tenements could be ascertained by deducting the proportionate cost of reproducing the necessary mining information from the value of Murchison's property, but he added the qualification that this might not necessarily give a market value for the interest in the tenements. Although the reasons for this qualification were not expressed by Mr Robinson, they were, I think, quite clear. Some of them emerge from evidence of Mr McCarthy which revealed the advantages of participation in a joint venture and the disadvantage of delay in realising income from the tenements. A purchaser would be concerned about the risks of incurring unexpected costs in regenerating the information. The realisation of income from mining the tenements would be delayed by the time taken to do the necessary exploration and other work. Further, the purchaser would have to negotiate terms on which to participate in a joint venture with the other parties holding interests in the tenements, for the development of the tenements. By such an arrangement the purchaser would obtain the benefit of the management and other expertise relating to the tenements and the financial resources of the existing joint venturers. Consequently, a purchaser who believed that Murchison's property was worth $24,000,000 would not be prepared to pay that sum less 31.16% of the information reproduction cost, estimated at $10,000,000, for Murchison's interest in the tenements alone, but would seek a greater deduction from the value of Murchison's property.

Mr McCarthy, in his report, expressed the view that in order to duplicate the mining information in 1987 it would have been necessary to expend approximately $20,000,000. This estimate related to all of the mining information. In oral evidence he also estimated the cost of duplicating only such of the necessary mining information as was not available from public sources at $10,000,000 in 1987. He thought that the work of reproducing such information would occupy a year.

Mr McCarthy did consider the value of the Golden Grove Joint Venture tenements on the correct basis and concluded that it was between $1,000,000 and $28,534,000, depending on the assumptions which were made. However, these opinions were based on dcf calculations and took no account of the evidence of value afforded by the agreement made between EZ and Aztec in May 1987. Notwithstanding that that agreement was for the sale of an interest in the joint venture and not an interest in the tenements alone, I think that it is relevant in determining the value of the latter. This approach is supported by the oral evidence of Mr Robinson to which I have referred, and the evidence of the expert witnesses as to the importance of using such market evidence of value as is available and as to the limitations of dcf analyses.

In my opinion, it should thus be assumed that the hypothetical purchaser and vendor, negotiating the sale of Murchison's interest in the tenements alone, knowing that some of the mining information was available from public records, but that considerable valuable information would have to be regenerated or otherwise acquired by the purchaser at considerable cost (for example, by paying those entitled to it for access to, and use of, it), would agree upon the price payable for the interest in the tenements by taking the value of Murchison's property and agreeing upon a deduction from that value in order to take into account several factors. Those factors are the cost of replacing the information, costs or losses resulting from consequential delay in the development of the tenements, the fact that the purchaser would probably incur costs in obtaining the right to become a party to a joint venture agreement with the other joint owners of the tenements and thereby benefit from established management and funding of the joint venture activities, and the general disadvantage to the purchaser of this situation including, for example, the risk of unforeseen costs to which he would become exposed.

Having regard to the valuation principles and expert evidence to which I have referred, I think that this is the most reliable way of determining the value of Murchison's interest in the tenements.

I have already held that the value of Murchison's property was $24,000,000. In considering what deduction from that sum would be appropriate to take into account the factors described above, I think that the hypothetical parties would have regard to, and be guided by, dcf analyses comparing the calculated value of the joint venture property with that of the tenements alone.

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ATC 4400

Mr McCarthy applied the dcf technique to the joint venture property using three alternative rates of discount, 12%, 15% and 18%, and obtained values of $70,233,000, $42,311,000 and $21,150,000 respectively. He repeated the calculation, at those discount rates, assuming that all of the mining information had to be reproduced and taking account of the costs of this work and the effect of the two-year delay which he thought it would cause in development of the tenements. The values which he calculated were $28,534,000, $3,144,000 and $1,000,000 respectively.

In the present context, I place most reliance upon the calculation based on a discount rate of 12% for that reflects a value for the joint venture property which is comparable to the value obtained by reference to the market evidence. Even allowing for the fact that Mr McCarthy's second analysis took into account the cost and delay associated with reproducing all, and not just some, of the mining information, and recognising that these calculations related to a 100% interest in the joint venture property, it is clear from his evidence that a considerable deduction would be required from the value of $24,000,000 attributed to Murchison's property in order to reflect the factors under consideration. That deduction, in my opinion, would include a sum of not less than 31.16% of the estimated cost, namely $10,000,000, of reproducing the necessary part of the mining information. While it is difficult, on the evidence before me, to assess the total deduction and, hence, the value of Murchison's land, I have no doubt that in addition to this component of $3,116,000, the other factors would warrant a sum measured in millions of dollars and that the total deduction from the value of a 31.16% interest in Murchison's property would far exceed $5,000,000.

Being of this opinion, it is unnecessary for me to reach a conclusion as to the precise value of Murchison's land, for the value of Murchison's property having been assessed at $24,000,000, sec. 76AI(2)(b) of the Act will only be satisfied if the value of Murchison's land was at least $19,200,000 (i.e. 80% of $24,000,000) and I am satisfied that the value of Murchison's land was considerably less than $19,000,000.

I would reach the same conclusion if, as the appellant contended, sec. 76AA applied to the valuation of Murchison's land and thereby required the value of the joint venture tenements in their entirety to be assessed and the value of Murchison's interest in those tenements to be determined by applying sec. 75A(4) and multiplying the total value by 0.3116. On that approach, having regard to the agreement between Aztec and EZ and the evidence of the expert witnesses, including the evidence of dcf analysis, I think that the value of the entire Golden Grove Joint Venture was not more than $77,000,000 and that taking account of the matters mentioned above, in the case of purchase of the tenements alone, the hypothetical vendor and purchaser would allow a deduction of more than $16,000,000 from that sum, giving the whole of the tenements a value of less than $61,000,000. On this basis, a 31.16% interest in the tenements would be worth less than $19,000,000. In the result, I find it unnecessary to decide whether sec. 76AA(2) of the Act must be applied in relation to Murchison's land or to consider the proper construction of sec. 75A(2) and (4).

For these reasons, I am of the opinion that, at 30 June 1987, Murchison was not a landholder under sec. 76AI of the Act and that the respondent's assessment of stamp duty was erroneous. I would allow the appeal, set aside the respondent's assessment of duty in the sum of $1,015,525 and assess the stamp duty chargeable upon the agreement dated 30 June 1987 in the sum of $144,000. the amount of the original assessment having been paid by the appellant, the respondent will be ordered to repay the difference between the two sums, namely $871,525.