In brief

Sojitz Coal Resources Pty Ltd v Commissioner of State Revenue [2015] QSC 009

The Queensland Supreme Court held that the mining leases of Minerva Coal Pty Ltd (Minerva) were not Queensland ‘land-holdings’ when Sojitz Coal Resources Pty Ltd (Sojitz) acquired a 51 per cent interest in Minerva on 20 December 2010.

The Court held that the definition of ‘interest’ in the Acts Interpretation Act 1954 (Qld) (AIA) did not apply to expand the expression ‘interest in land’ for the purposes of the definition of ‘land-holdings’ (relevant at the time).

In detail

The case is about whether two mining leases held by Minerva constituted ‘land-holdings’ under the Duties Act 2001 (Qld) (Duties Act) at the time Sojitz acquired an interest in Minerva in December 2010. This was relevant to determining whether Queensland land-rich duty was payable on the acquisition.

The Duties Act (as in force at the time) defined ‘land-holdings’ as an “interest in land and anything fixed to the land that may be separately owned from the land other than a security interest or an interest in a trust”.

An editor’s note also referred to the definition of ‘interest’ under the AIA. The AIA definition of ‘interest’ was broader than what would ordinarily be included at general law, extending it to encompass “a right, power or privilege over, or in relation to, the land or other property”.

At the time of this transaction, the definition of ‘land’ in the Duties Act did not expressly include a mining lease and both parties (and the Court) agreed that mining leases did not constitute an ‘estate or interest in land’ according to ordinary concepts. As a result, the mining leases would only constitute ‘land-holdings’ if the extended definition of ‘interest’ in the AIA was required to be taken into account when reading the phrase ‘interest in land’.

What did the Supreme Court decide?

The Court held that regard to the AIA extended definition of ‘interest’ was not appropriate in the context of the provisions.

It concluded that the use of the words ‘interest in land’ was deliberate, and intended to limit a corporation’s ‘land-holdings’ to its proprietary rights in land.

On this basis, as mining leases are not an ‘interest in land’ under ordinary concepts and the extended definition did not apply, the Court held that they should not be included as ‘landholdings’ for the purposes of the land rich provisions.

The takeaway

Where land rich duty or landholder duty was paid on the acquisition of an interest in a mining company with mining leases or mineral development licences under an assessment within the last 5 years, there may be an opportunity to explore avenues for a full, or partial refund, on the duty paid.

Whilst it is still undecided as to whether this decision will be appealed, we recommend that you speak with us soon to best preserve any opportunities which may currently exist.

We note that as the Duties Act was amended, with effect from 20 September 2012, to include mining leases and mineral development licences in the definition of land, this decision will not impact on the treatment of mining tenements going forward.

The decision may also be relevant for non-mining companies, where the Commissioner has assessed duty on the basis that the AIA applies. Examples may be tolling rights and other non-lease arrangements in respect of land such as co-operation arrangements or special access arrangements.