Commissioner of State Revenue v FKG01 Pty Ltd [2026] QCA 12

SUPREME COURT OF QUEENSLAND CITATION: Commissioner of State Revenue v FKG01 Pty Ltd [2026] QCA 12 PARTIES: COMMISSIONER OF STATE REVENUE (appellant) v FKG01 PTY LTD ACN 659 474 898 (respondent) FILE NO/S: Appeal No 2479 of 2025 SC No 16232 of 2023 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane – [2025] QSC 105 (Hindman J) DELIVERED ON: 6 February 2026 DELIVERED AT: Brisbane HEARING DATE: 23 October 2025 JUDGES: Bowskill CJ, Doyle JA, Wilson J ORDER: The appeal is dismissed, with costs. CATCHWORDS: TAXES AND DUTIES – STAMP DUTIES – APPEAL, CASE STATED ETC – QUEENSLAND – where the respondent (as the original buyer) entered into a contract to purchase real property for $10 million – where at the time of that original contract the property was the subject of two leases, one of which was due to expire shortly after the settlement date – where the standard conditions of the contract of sale included an assignment by the seller to the buyer of the benefit of all conditions contained in the leases – where one of the leases included a requirement for the tenant to maintain the leased premises in good repair (referred to by the parties as a “make good” obligation) – where prior to the settlement date the respondent and the seller negotiated an arrangement under which the tenant agreed to pay $50,000 in satisfaction of the make good obligation – where it was agreed between the seller and the respondent that the $50,000 would be adjusted in the selling price resulting in a reduced purchase price of $9,950,000 – where the original contract was cancelled at the request of the seller and a replacement contract was entered into with a new buyer who was a related person to the respondent, within the meaning of s 61 of the Duties Act 2001 (Qld) – where the replacement contract delayed the settlement -- 1 of 16 -- 2 date such that the lease expired before the settlement date rather than after – where the replacement contract included a special condition reducing the purchase price to be paid by the new buyer by $50,000 – where the seller gave indemnities in favour of the original buyer for any duty that might become payable on the cancelled contract – where transfer duty was paid on the original contract as well as the replacement contract – where there was an application to the Commissioner for the duty that was paid on the cancelled contract to be refunded – where the Commissioner refused to refund the transfer duty on the cancelled contract on the basis that the replacement contract was a “resale agreement” and an exemption from transfer duty on the cancelled contract under s 115(1)(d) of the Duties Act 2001 (Qld) did not apply – where the respondent appealed the Commissioner’s decision to the Supreme Court – where the primary judge held that the replacement contract was not a resale agreement, and therefore allowed the respondent’s appeal against the Commissioner’s decision – where the Commissioner appeals that decision on numerous grounds – whether the replacement contract constitutes a “resale agreement” for the purposes of s 115(1)(d) of the Duties Act 2001 (Qld) – whether either the $50,000 reduction in the purchase price under the special condition or the indemnities constitute a disqualifying “financial benefit” under s 115(2)(b) of the Duties Act 2001 (Qld) – whether transfer duty is payable on the transaction the subject of the original contract Duties Act 2001 (Qld), s 115 Taxation Administration Act 2001 (Qld), s 63, s 65, s 69, s 70, s 70A BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; [1977] UKPCHCA 1, cited Commissioner of Taxation v Australia and New Zealand Savings Bank Ltd (1994) 181 CLR 466; [1994] HCA 58, cited Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614; [1990] HCA 3, cited Queensland Chamber of Commerce and Industry Ltd v Commissioner of State Revenue [2015] QSC 77, cited Wakefield v Commissioner of State Revenue [2019] 3 Qd R 414; [2019] QSC 85, cited COUNSEL: H G Lakis, with M D Paterson, for the appellant F L Harrison KC, with A J Anderson, for the respondent SOLICITORS: Clayton Utz for the appellant Wonderley & Hall for the respondent [1] BOWSKILL CJ: This appeal raises a question about when transfer duty may be imposed in respect of a contract for the sale of property which is brought to an end by the consent of the parties, and replaced by another agreement for the sale of the -- 2 of 16 -- 3 property to a different buyer. The answer to that question depends upon whether the replacement contract is a “resale agreement” within the meaning of s 115(2) of the Duties Act 2001 (Qld). The learned primary judge held that, in the circumstances of this case, the replacement contract was not a resale agreement and so allowed the respondent’s appeal against the Commissioner’s decision to the contrary.1 For the following reasons, the decision below was correct, there is no merit in the appeal and it should be dismissed, with costs. Factual context [2] The issue arises in the following factual context. Jeteld Pty Ltd was the owner of a commercial property located at 122 Margaret Street in Toowoomba. On 25 May 2022, Jeteld entered into a contract to sell that property to the respondent, FKG01 Pty Ltd, for $10 million (the original contract). The contract was initially due to settle on 15 June 2022. At the time of that contract, the property was subject of two leases, one of which was a lease to Suncorp which was due to expire shortly after the settlement date, on 19 June 2022. The standard conditions of the contract of sale included an assignment by the seller to the buyer of the benefit of all conditions contained in the leases (clause 16.3). The Suncorp lease included a requirement for it to maintain the leased premises in good repair (clause 22, referred to by the parties as a “make good” obligation). [3] Prior to the settlement date, FKG01 (as buyer), with the approval of Jeteld (the seller) negotiated an arrangement with Suncorp under which, in satisfaction of Suncorp’s make good obligation, Suncorp would pay $50,000 (plus GST) and leave behind some chattels and other fixtures. This was formalised by an invoice issued from Jeteld (which was then still the lessor) to Suncorp for $50,000 (plus GST) on 15 June 2022. Suncorp subsequently paid this money to Jeteld. [4] It was agreed between Jeteld and FKG01 that the $50,000 “make good” contribution from Suncorp would be “adjusted in the selling price”, in FKG01’s favour, resulting in a reduced purchase price of $9,950,000. This reflected the fact that, had the contract settled on 15 June 2022, FKG01 would have been the lessor of the Suncorp lease at the time it expired and would therefore have been entitled to receive this money. [5] The original contract was assessed and, in anticipation of settlement the next day, FKG01 paid transfer duty of $555,525 on 14 June 2022. [6] Before the original contract settled, Jeteld contacted FKG01, by their respective solicitors, with a proposal for “revised contractual terms”. Jeteld wanted to rescind and replace the original contract because there were income tax advantages for Jeteld if the contract for the sale of the property was entered into on or after 1 July 2022. FKG01 agreed to that, and the parties agreed to extend the settlement date under the original contract while the revised terms were negotiated. Under the proposed replacement contract, a draft of which was provided on 17 June 2022, the purchase price was $9,950,000, reflecting the agreement reached in relation to the $50,000 payment from Suncorp. A new settlement date of 15 August 2022 was proposed. [7] On 24 June 2022, FKG01’s legal counsel informed Jeteld’s solicitor that: 1 FKG01 Pty Ltd v Commissioner of State Revenue [2025] QSC 105 (Reasons). -- 3 of 16 -- 4 “… it is [FKG01’s] preference that the Purchase Price remain as $10,000,000.00 and that Suncorp’s $50,000.00 make good contribution be reflected as an adjustment to be made in [FKG01’s] favour in the settlement figures.” [8] A further draft of the deed of rescission with the replacement contract was provided by FKG01 to Jeteld on 24 June 2022, reflecting that change. Another draft was provided by FKG01 on 29 June 2022, incorporating amendments to clause 5 of the deed of rescission (the indemnity), among other things. [9] In late June or early July 2022, there were discussions about “using a new purchasing entity” for the replacement contract, because this would be administratively more convenient to FKG01. The “new buyer” was to be 122 Margaret Street Pty Ltd, a “related person” of FKG01, within the meaning of s 61 of the Duties Act. [10] It took some time to finalise the arrangements, during which there were a number of extensions to the settlement date. [11] Eventually, on 31 August 2022, Jeteld (as Seller), FKG01 (as Buyer) and 122 Margaret Street (as New Buyer) executed the deed of rescission; and Jeteld (as Seller) entered into the replacement contract with 122 Margaret Street (as Buyer) (the replacement contract). The purchase price under the replacement contract was $10,000,000 and the settlement date was 3 October 2022. The provisions of the replacement contract were substantially similar to the original contract. One of the differences was that a special condition 13 was included in the replacement contract, in the following terms: “Adjustment to the Purchase Price in favour of Buyer In addition to any other adjustment to the Purchase Price, at settlement the Purchase Price will be reduced by an amount of $50,000, being the amount of compensation received by the Buyer [sic, Seller] from the former tenant Suncorp Corporate Services Pty Ltd in consequence of … this contract not being entered into until after the termination of the former tenant’s lease.”2 [12] Transfer duty of the same amount ($555,525.00) was assessed as payable on the replacement contract, and was paid on 29 September 2022. [13] Relevantly, clause 5 of the deed of rescission provided as follows (where Contract means the original contract and New Contract means the replacement contract): “5 Duty 5.1 Seller to Indemnify Buyer Subject to the provisions of clause 5.3 …, 5.4 …, 5.5 and 5.6…:- (a) The Seller indemnifies the Buyer for any Duty payable in relation to this Deed; (b) In the event Duty is payable on the Contract despite this Deed and the New Contract (for example, the Commissioner of State Revenue rules, or a Court of 2 Underlining added. -- 4 of 16 -- 5 competent jurisdiction orders, that Duty is payable on both the Contract and the Replacement Contract) then the Seller [Jeteld] further indemnifies the Buyer [FKG01] for any Duty payable in relation to the Contract; (c) This clause 5.1 prevails to the extent of any inconsistency with the terms of the Contract. 5.2 New Buyer to Indemnify Seller The New Buyer indemnifies the Seller in relation to any Duty payable in relation to the Replacement Contract. … 5.6 Power of Attorney The Buyer irrevocably appoints:- (a) the Seller and the Seller’s successors and assigns; and (b) every director and secretary of the Seller; severally the attorney of the Seller [sic, Buyer] with power, at the expense of the Seller at any time and from time to time … to do all acts and things to execute all documents as may, in the Seller’s opinion, be reasonably necessary or desirable or expedient to object to, appeal against or re-settle the assessment in accordance with the provisions of clause 5.5 (‘Dispute of Re- Assessment’). 5.7 Seller to be reimbursed payment Where any payment has been made by the Seller to the Buyer under clause 5.1 (‘Seller to Indemnify Buyer’) and the Commissioner at any time ultimately reassesses the Contract on the basis that there is no Duty payable then the Buyer must following receipt of any monies from the Office of State Revenue pay an equivalent amount to the Seller.”3 [14] The Commissioner emphasises that clause 5 provides for indemnities, both in respect of the transfer duty (clause 5.1(b)) and the costs involved in objecting to and appealing against the assessment (clause 5.6). The request for a refund – s 115 of the Duties Act [15] On 11 October 2022, FKG01 sought a refund of the duty it had paid under the original (rescinded) contract, on the basis that it was a “cancelled agreement” within the meaning of s 115 of the Duties Act. [16] Section 115 provides: “115 Exemption – cancelled agreements (1) Transfer duty is not imposed on a dutiable transaction that is an agreement for the transfer of dutiable property (the cancelled agreement) if – 3 Underlining added. -- 5 of 16 -- 6 (a) the agreement is ended because of a breach of it by a party to it; or (b) the agreement is ended because of non-fulfilment of a condition of it; or (c) the agreement is brought to an end by frustration; or (d) the agreement is ended with the consent of the parties to it and there is no resale agreement. (2) For subsection (1)(d), an agreement is a resale agreement if – (a) under the agreement, any of the dutiable property the subject of the cancelled agreement is or will be transferred or is agreed to be transferred; and (b) the transferee under the cancelled agreement or a related person of the transferee receives, or will receive, directly or indirectly a financial benefit other than – (i) the release of the transferee from the transferee’s obligation under the cancelled agreement; or (ii) an interest in the dutiable property to the extent that the unencumbered value of the interest does not represent a profit for the transferee because of the resale agreement. (3) If, on an assessment, transfer duty has been paid on an agreement that is not liable to transfer duty because of this section, the commissioner must make a reassessment if an application is made within 6 months after the agreement is ended or within the longer period the commissioner allows. (4) The applicant must lodge the cancelled agreement with the application.”4 [17] That request was refused, because the Commissioner determined that the replacement contract was a “resale agreement” for the purposes of s 115(2) “as there is a financial benefit being received”. [18] On 24 March 2023, Jeteld, on behalf of FKG01, lodged an objection against the refusal to refund the duty on the original contract, under ss 63 and 65 of the Taxation Administration Act 2001 (Qld). The grounds for the objection were stated as follows: “…The decision was made on the erroneous basis that the replacement contract …was a ‘resale agreement’ for the purposes of s 115(2) of the Duties Act 2001 (Qld) because the Commissioner alleges a financial benefit was received. That ground was and is erroneous in that there was and is no agreement under which the transferee under the cancelled agreement or a related person of the transferee receives, or will receive, directly or indirectly, a financial benefit other than: 4 Underlining added. -- 6 of 16 -- 7 (i) the release of the transferee from the transferee’s obligation under the cancelled agreement; (ii) an interest in the dutiable property to the extent that the unencumbered value of the interest does not represent a profit for the transferee because of such agreement. Further material relevant to the objection is contained in Annexure A.” [19] Annexure A to the objection set out the factual context of the original contract and the replacement contract. At paragraph 9, it was noted that the provisions of the replacement contract (called the “new contract”) were substantially similar to the original contract (called the “cancelled agreement”), with the differences set out (including the inclusion in the replacement contract of special condition 13). Paragraph 9 concluded by stating that: “The intention behind the changes set out above was to place 122 Margaret in the same position as the previous buyer FKG01 would have been in had the Cancelled Agreement settled on the 15th June 2022 as originally envisaged.” [20] Annexure A also included the following, in relation to why the replacement contract was not a “resale agreement” as defined in s 115(2): “The transferee under the Cancelled Agreement (FKG01) did not receive directly or indirectly a financial benefit other than the release of FKG01 from its obligations under the Cancelled Agreement. Amongst other things, as the Cancelled Agreement was not onerous, the cancellation of the Cancelled Agreement did not confer any such benefit on FKG01. … 122 Margaret (as a related person of FKG01) did not directly or indirectly receive a ‘financial benefit’ other than an interest in the dutiable property in that the unencumbered value of the interest does not represent a profit for 122 Margaret because of the New Contract for the following reasons:- • The term ‘financial benefit’ (not being defined in the Duties Act 2001 or defined in any standard law dictionaries), should be confined to benefits which are financial in their nature since any wider meaning would make the word ‘financial’ otiose. • Even if the expression ‘financial benefit’ in the Duties Act 2001 is given a comparatively wider interpretation (ie to include any benefit from commercial interests or anything else of primary significance which is economic gain or easing financial burden) there is no ‘financial benefit’ within this wider interpretation for the following reasons:- o There was no financial benefit arising from the purchase price remaining at $10,000,000.00. o The various differences between the Cancelled Agreement and the New Contract were for the purposes of placing 122 Margaret in the same position -- 7 of 16 -- 8 as the previous buyer would have been in had the Cancelled Agreement settled on the 15th June 2022 as originally envisaged. More particularly:- … ▪ The $50,000 adjustment at settlement did not amount to a financial benefit, because the effect of the adjustment was to restore the benefit that would have been received if the sale had settled before the termination of the Suncorp lease… if the sale had settled before Suncorp had paid for its breaches, the buyer of the property would have been entitled to the benefit of any unsatisfied make good obligations under the lease, and would have been entitled to compromise with Suncorp as to the amount to which it is entitled…” [21] On 27 October 2023, the objection was disallowed, on the basis that: “Under the contract dated 31 August 2022, 122 Margaret Street Pty Ltd … received a financial benefit being a reduction in the purchase price, which makes the agreement a resale agreement.” The appeal to the Supreme Court [22] FKG01 appealed to the Supreme Court against that decision under s 69 of the Taxation Administration Act 2001 (Qld), by filing a notice of appeal (albeit in the form of an originating application) setting out the grounds of the appeal and the facts relied on (s 70(4)). [23] On an appeal under s 69, the appellant bears the onus of proving its case (s 70A). The grounds of the appeal “are limited to the grounds of objection unless the court otherwise orders” (s 70(5)). The Court on the appeal: “does not stand in the shoes of the Commissioner, but exercises its original jurisdiction to make such judgment as it considers ought to have been given, on the facts and the law, at the time of the hearing of the appeal. The appeal is in that sense a hearing de novo.”5 [24] The purpose of the procedure of assessment, objection and appeal is “to ascertain the true tax liability of the taxpayer” under the relevant legislative provisions.6 In that context, since the Court’s task is to make the decision it considers ought to have been made by the Commissioner,7 although the grounds of objection limit the grounds of appeal, the ultimate question for the Court hearing the appeal is not whether the grounds have been made out, but whether the assessment is incorrect.8 [25] The basis for the Commissioner’s decision to disallow FKG01’s objection was that the replacement contract was a “resale agreement” within the meaning of s 115(2) 5 Wakefield v Commissioner of State Revenue [2019] QSC 85 at [32] and [34]. 6 Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 621. 7 See also Queensland Chamber of Commerce and Industry Ltd v Commissioner of State Revenue [2015] QSC 77 at [96]. 8 Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 621. -- 8 of 16 -- 9 because the $50,000 adjustment (reduction) in the purchase price was a “financial benefit” received by 122 Margaret Street other than of a kind referred to in s 115(2)(b)(i) or (ii). It is not clear when the argument that the indemnity(ies) provided under clause 5 of the deed of rescission was also an excluding “financial benefit” first arose. The first reference to the indemnity seems to have been in [21(b)] of FKG01’s submissions below, which was then picked up in [4.15] of the Commissioner’s submissions. This does not matter, however, because although the taxpayer is limited to the grounds of their objection, the Commissioner may, on an appeal, support the assessment on a ground not previously taken into account, provided notice of that argument is given to the taxpayer.9 The decision below [26] The hearing of the appeal took place on 3 October 2024. On 10 April 2025, the associate to the primary judge emailed the parties, inviting further submissions on an aspect of the issue the subject of the appeal, which had not yet been addressed – namely, whether it mattered that 122 Margaret Street had paid $50,000 less for the property than FKG01 would have, because the relevant question was whether the difference represents a profit for FKG01 because of the resale agreement for the purposes of s 115(2)(b)(ii). Further written submissions were filed by the Commissioner, by FKG01, and in reply by the Commissioner. The parties were given the opportunity to say if they would like a further oral hearing. Neither of them did. [27] For reasons delivered on 19 May 2025, the primary judge concluded that the replacement contract was not a “resale agreement” under s 115(2), because neither FKG01 nor 122 Margaret Street received any financial benefit under the replacement contract other than (i) the release of FKG01 from its obligation under the original contract (the cancelled agreement); and (ii) an interest in the dutiable property, the unencumbered value of which did not represent a profit for FKG01 because of the replacement contract. The appeal was therefore allowed. [28] As to the $50,000 adjustment to the purchase price under the replacement contract, the primary judge accepted FKG01’s argument that the effect of this was simply to place 122 Margaret Street into the same position that FKG01 would have been, had the original contract settled as originally envisaged. In rejecting the Commissioner’s argument to the contrary, her Honour said: “[76] The CSR’s submission proceeds on the basis that if the Original Contract had then proceeded to settlement (rather than being rescinded), Jeteld would have had no obligation to account to FKG01 for the payment received from Suncorp. That is, in my opinion, not a realistic proposition. Although it might not have been formally recorded anywhere, it was inevitable that Jeteld was going to have to account to FKG01 for the payment received from Suncorp. Jeteld was not at liberty, once it entered into the Original Contract, to change the leasing arrangements with Suncorp to the detriment of FKG01 – note clauses 16.3, 32.1(a) and (c), 32.2 and 32.3 of the Original Contract. The change to the Suncorp lease that did occur plainly occurred with the consent of FKG01 and that could only have been on the basis 9 Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 624 and Commissioner of Taxation v Australia and New Zealand Savings Bank Ltd (1994) 181 CLR 466 at 479. -- 9 of 16 -- 10 of Jeteld accounting to FKG01 for the payment once settlement occurred. All the requirements for implying a term in fact to that effect are readily satisfied. [77] In fact, correspondence from Jeteld to its solicitor on 16 June 2022 (after the expiry of the Suncorp lease and prior to the recission of the Original Contract) confirmed: I have invoiced Suncorp for the $50,000 make good / defit contribution as agreed with the intended buyers (copy attached) and I have advised FKG that we have issued the invoice and it will be adjusted in the selling price and everyone was in agreement. [78] I do not accept, therefore, that at the date of the recission of the Original Contract that FKG01 was in a position where Suncorp’s lease had ended without making good and Jeteld was to retain the $50,000 Suncorp payment that permitted Suncorp not to make good. … [80] In a perfect world a formal amendment to the Original Contract might have been recorded, but the failure to do so does not change the correct legal position between the parties that if the Original Contract settled, Jeteld was required to account for the Suncorp payment to FKG01 (expressly by informal agreement or impliedly).”10 [29] The primary judge found that 122 Margaret Street received no financial benefit other than “an interest in the dutiable property”. Her Honour said: “[88] I accept that, following the Adjustment, 122Marg’s interest in the property represented a ‘financial benefit’. I also accept that the Adjustment reduced the purchase price, which created a benefit derived by 122Marg pertaining to the monetary expenditure required to obtain the property. However, I do not accept that, properly characterised, this benefit is akin to a payment of money rather than being an interest in the dutiable property. The Adjustment specifically provided for a reduction of the purchase price of the dutiable property. Ultimately, the benefit acquired by 122Marg was an interest in the property for a reduced sum of money, not the payment of that money itself. The question then is whether the unencumbered value of that interest represents a profit for FKG01 because of the resale agreement (s. 115(2)(b)(ii)).”11 [30] In answering that question, the primary judge held that the acquisition of the property by 122 Margaret Street for a reduced price did not represent a profit for FKG01 because of the replacement contract. In that regard, her Honour said: “[89] …122Marg pays market value for the property which simply takes into account an adjustment for the lack of Suncorp making 10 Underlining added. 11 Underlining added. -- 10 of 16 -- 11 good at the end of its lease. There is no part of that transaction that represents a profit for FKG01 because of the Replacement Contract. [90] It does not matter of itself that 122Marg ultimately pays a different price for the property than FKG01 may have paid under the Original Contract. The question is whether the difference represents a profit for FKG01 or a related person because of the resale agreement. [91] If the ‘discount’ given to 122Marg in obtaining its interest in the property could be properly characterised as representing a profit to FKG01 (for example, a kickback so that 122Marg pays less than market price for the property), then that may be a financial benefit of the type contemplated by s 115(2)(b) of the DA. But that is not this case. [92] Here there is, in my opinion, no financial benefit falling outside of s 115(2)(b) of the DA. 122Marg did not obtain any interest in the property beyond what it paid market value for, nor did it pay any less money than market value to obtain that interest in the property. The lower purchase price it did pay under the Replacement Contract simply counterbalanced a different financial benefit that FKG01 would have obtained had the Original Contract proceeded to settlement (even at the later date post the expiry of the Suncorp lease). Therefore, there is nothing representing a ‘profit’ for FKG01 or a related person because of the Replacement Contract.” [31] In relation to the argument that the indemnity was a financial benefit received by FKG01, not within the terms of s 115(2)(b)(i) or (ii), the primary judge held: “[109] … the indemnities could only provide any type of financial benefit to FKG01 if in fact there was liability for transfer duty on the cancelled agreement. If there is not, the indemnities provide no financial benefit. An indemnity that does not operate to provide an actual financial benefit is not itself a financial benefit. Any reasoning to the contrary is circular. A financial benefit under s. 115(2)(b) of the DA must be real and not merely theoretical. [110] The indemnity in clause 5.1 is not a financial benefit for the purposes of s. 115(2)(b) of the DA.” The appeal to this Court [32] The Commissioner appeals to this Court on eight grounds, some of which overlap and can be dealt with together. Ground 1 [33] By ground 1, the Commissioner contends the primary judge erred by “misconstruing and then misapplying the statutory scheme” in finding that the adjustment to the purchase price under the replacement contract was not a “financial benefit”. The -- 11 of 16 -- 12 Commissioner’s argument under this ground is that the primary judge impermissibly went outside the grounds stated in FKG01’s objection, in particular, by considering the characterisation of the agreement between Jeteld and FKG01 as to the treatment of the $50,000 payment made by Suncorp, in the terms set out in the Reasons at [76] and [78]. [34] This ground is misconceived. FKG01’s argument, from the outset, was that the adjustment to the purchase price, recorded in special condition 13, was not a “financial benefit” received by 122 Margaret Street under the replacement contract falling outside s 115(2)(b)(ii), because the sole purpose of the adjustment was to place 122 Margaret Street into the same position FKG01 would have been, had the original contract settled as originally envisaged. This was articulated in FKG01’s objection,12 and in its notice of appeal (at paragraphs 13-16). It was implicit in that argument that there was an (informal) agreement between Jeteld and FKG01, that Jeteld would account to FKG01 for the $50,000 received from Suncorp. The primary judge was required to address this issue, in order to address the grounds of the appeal. Although her Honour makes reference to implication of a term (in the Reasons at [76] and [78]) it is clear that her Honour was not proceeding on the basis of an implication into the original contract in the BP Refinery13 sense. Properly understood, her Honour’s finding was that there was a later informal agreement between Jeteld and FKG01 about the $50,000. That finding was plainly correct, on the evidence which was before the court. There is no merit in ground 1. Ground 2 [35] By ground 2, the Commissioner contends the primary judge erred in finding that a term was implied into the original agreement, to the effect that Jeteld would account to FKG01 for the payment of $50,000 once settlement of that contract occurred. As just discussed, her Honour did not reach that conclusion. This ground also fails. Ground 3 [36] By ground 3, the Commissioner contends that the primary judge erred by considering the operation of s 115(2)(b)(ii), because FKG01 waived reliance on that provision, and so the Commissioner was denied procedural fairness. [37] There is no merit in this ground. The whole of s 115(2) was directly relevant to the determination of the appeal, including s 115(2)(b)(ii). It was raised in FKG01’s objection,14 and by its notice of appeal; it was included within the agreed list of issues in dispute filed in advance of the hearing; it was addressed in FKG01’s written submissions,15 and in the Commissioner’s written submissions.16 The so-called “waiver” is said to have arisen from something said by senior counsel for FKG01, during the hearing of the appeal, whilst he was taking the primary judge through s 115. The relevant extract is as follows: “MR HARRISON: … Section 115 continues, ‘For subsection (1)(d), an agreement is a resale agreement if under the agreement any of the 12 See paragraphs [18], [19] and [20] above. 13 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. 14 See paragraph [18] above. 15 FKG01’s written submissions below, for example, at [7], [18] and [19]. 16 Commissioner’s written submissions below, for example, at [4.1], [4.2], [5.11] and [6.17]. -- 12 of 16 -- 13 dutiable property the subject of the cancelled agreement is or will be transferred or is agreed to be transferred’, so that element is satisfied. HER HONOUR: Yes. MR HARRISON: ‘(b) the transferee under the cancelled agreement or a related person of the transferee receives or will receive, directly or indirectly, a financial benefit other than’- to matters that don’t apply, and ‘financial benefit” is defined in – I thought I had flagged it – sorry, at – who was a related person is defined in section 61 - - - HER HONOUR: Yes. MR HARRISON: - - - and that requirement is satisfied. And so the issue is simply whether a related person – in this case it is the original vendor – sorry, I withdraw that. A related person receives or will receive, directly or indirectly, a financial benefit other than the things mentioned. …”17 [38] The Commissioner contended below, and maintains in this Court, that by the first underlined words, “to matters that don’t apply”, Mr Harrison KC should be taken to have waived reliance on s 115(2)(b)(ii). The primary judge was correct to reject that argument. There is no basis on which to infer, from that phrase, that FKG01 was waiving reliance on s 115(2)(b)(ii). That becomes abundantly clear a few lines on in the transcript, when Mr Harrison KC articulates the issue as whether a related person receives or will receive a financial benefit “other than the things mentioned”, inferentially, in s 115(2)(b). It is equally clear from Mr Harrison’s reference, only a few lines further on in the transcript, to there being “no element of profit in the transaction” (which can only be a reference to s 115(2)(b)(ii)). [39] Further, by the time the primary judge came to deliver her decision, she had given the parties the opportunity to be heard in relation to the further issue raised in the associate’s email sent on 10 April 2025, which directly concerned s 115(2)(b)(ii). It was entirely appropriate for the primary judge to address the application of s 115(2)(b)(ii) in the circumstances of this case. Grounds 4, 5 and 6 – the indemnities [40] By ground 4, the Commissioner contends the primary judge erred in failing to find that the indemnities provided by Jeteld to FKG01 were a “financial benefit” for the purposes of s 115(2)(b), in circumstances where those indemnities extended to: (a) all costs in objecting to any decision to disallow the application for reassessment; (b) all costs in appealing any adverse objection decision on the application for reassessment; (c) meeting any adverse costs order in that appeal; and (d) the amount of transfer duty if it was not refunded. [41] By ground 5, the Commissioner contends the primary judge erred in finding the indemnities were not a financial benefit, given that they were (a) “conscientiously 17 Underlining added. -- 13 of 16 -- 14 sought by FKG01” and (b) “akin to insurance to protect FKG01 in advance from a potential detriment”. [42] Ground 6 seems to raise the same point as ground 4 – that the indemnities should have been considered a “financial benefit” because they were of “real value” to FKG01, because “they placed FKG01 in a better position than if the exemption had been conferred by the Commissioner or the Court”, because FKG01 can recover its actual costs of objecting to the Commissioner’s decision, and conducting the appeal. [43] It is important to keep in mind that the original contract was cancelled and a new replacement contract entered into at the request of the seller, Jeteld. Once 122 Margaret Street was substituted as the buyer under the replacement contract, FKG01 received no benefit from either the original contract or the replacement contract. The indemnity under clause 5.1 of the deed of rescission makes commercial sense in that context. Because the original contract was cancelled at the request of Jeteld, Jeteld agrees to indemnify FKG01 in the event transfer duty is found to be payable on the original contract (clause 5.1(b)), and Jeteld is authorised by FKG01, at Jeteld’s expense, to do whatever is required in order to challenge such an assessment (clause 5.6), which is in Jeteld’s interest. [44] The Commissioner submitted that the indemnity(ies) offered by Jeteld to FKG01 were an “immediate benefit” to FKG01, because it had already paid the transfer duty on the original contract; they were an actual financial benefit to FKG01 because the effect of clause 5.6 was to cover the whole of any costs involved in challenging the assessment (as opposed to FKG01 possibly only recovering part of those costs, in the ordinary course of proceedings); and was also a financial benefit because it enabled FKG01 to “keep its foot on the property”18 until the replacement contract was finalised. [45] The Commissioner’s arguments in support of each of these grounds are rejected. [46] If the replacement contract were otherwise a “resale agreement” within the meaning of s 115(2)(b), this argument would be irrelevant. [47] Where, as in this case, the replacement contract is not otherwise a “resale agreement”, an indemnity in terms of clause 5.1 and 5.6 is not a “financial benefit” for FKG01. As the primary judge correctly found, the indemnity(ies) merely ensure that no detriment is suffered by FKG01 by reason of the cancellation of the original contract and the substitution of a new buyer. FKG01’s position is rendered neutral by operation of the indemnity, consistent with the fact that at the end of the day, it receives nothing from the transaction. [48] It is circular, illogical and unreasonable for the Commissioner to argue that a replacement contract, between the seller and buyer #2, which is otherwise not a “resale agreement” within the meaning of s 115(2)(b), and therefore not liable for transfer duty, becomes a “resale agreement” if the seller and buyer #1 under the original contract make an arrangement between them to ensure buyer #1 is not out of pocket in the event that the Commissioner makes a decision about transfer duty on the original contract which is shown to be wrong, and which buyer #1 would otherwise have to incur costs to correct. [49] The primary judge’s conclusion at [109] of the Reasons is correct. 18 Transcript of the appeal, 1-22. -- 14 of 16 -- 15 Grounds 7 and 8 – the adjustment to the purchase price [50] By ground 7, the Commissioner contends the primary judge erred in finding the adjustment to the purchase price was not a “financial benefit” outside s 115(2)(b)(ii), because the adjustment “is monetary in character, and not an interest in the property being transferred”. [51] By ground 8, the Commissioner contends the primary judge erred in finding that the adjustment was not a “financial benefit” outside s 115(2)(b)(ii), because: “(a) properly characterised, the quantum of the Adjustment was the amount that Suncorp was prepared to pay in lieu of complying with the make good provision in its lease; (b) the quantum of the Adjustment should not be taken as reflective of any diminution of unencumbered value of the property; and (c) there was no evidence in support of the proposition that the unencumbered value of the property under the cancelled agreement was the same as the unencumbered value of the property under the Replacement Contract.” [52] In so far as 122 Margaret Street is concerned, what it received under the replacement contract was (an interest in) the property, for the price of $10,000,000 less $50,000. It did not receive $50,000 as a monetary sum. The effect of special condition 13 of the replacement contract was that, at settlement, the purchase price was reduced by $50,000, meaning in practical terms that 122 Margaret Street only had to pay $9,950,000. 122 Margaret Street did not receive any financial benefit other than the interest in the property in return for paying the purchase price less the adjustment. [53] In so far as FKG01 is concerned, there is no basis on which to conclude that the adjustment to the purchase price under the replacement contract represented a profit for FKG01 because of the replacement contract. Under s 115(2), an agreement [the replacement contract] is a resale agreement if: (a) under the agreement [the replacement contract], any of the dutiable property the subject of the [original] cancelled agreement is or will be transferred or is agreed to be transferred; and (b) the transferee under the [original] cancelled agreement [FKG01] or a related person of the transferee [122 Margaret Street] receives, or will receive, directly or indirectly a financial benefit other than – (i) the release of the transferee [FKG01] from the transferee’s obligation under the [original] cancelled agreement; or (ii) an interest in the dutiable property to the extent that the unencumbered value of the interest does not represent a profit for the transferee [FKG01] because of the resale agreement [the replacement contract]. [54] Importantly, s 115(2)(b)(ii) refers only to the transferee [which is FKG01], not to the transferee or a related person of the transferee. [55] FKG01 did not receive anything “because of” the replacement contract. [56] The primary judge’s conclusions at [88]-[89] of the Reasons were correct. -- 15 of 16 -- 16 Conclusion and orders [57] The original contract was ended with the consent of the parties to it and the replacement contract is not a “resale agreement”. Therefore, transfer duty is not payable on the transaction the subject of the original contract. [58] The decision below was correct. I would dismiss the appeal, with costs. [59] DOYLE JA: I have had the benefit of reading the draft judgment of Bowskill CJ. I agree with her Honour’s reasons and proposed order. [60] WILSON J: I agree with Bowskill CJ. -- 16 of 16 --