Warner v Chief Commissioner of State Revenue [2011] NSWADT 212

Date of judgement 05 September 2011 Proceeding No. 116009
Judge(s) Judicial Member J Block
Court or Tribunal Administrative Decisions Tribunal
Legislation cited Duties Act 1997

Interpretation Act 1987
Catchwords Meaning of "purchaser" and "transferee" where in each case there is more than one - whether section 18(3) of the Duties Act requires the necessary relationship for all parties constituting each of the purchaser and the transferee
Cases cited Amalgamated Society of Engineers v Adelaide Steamship Company (1920) 28 CLR 129

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Beecham v Smith (1858) 120 ER 574

Lake Victoria Ltd v Commissioner of Stamp Duties (1949) 49 SR (NSW) 262

Owen v Wilkinson (1858) 141 ER 213

Re Jeffery; Ex parte Honey (1871) 7 Ch App 178

Sharpe v Chief Commissioner of State Revenue [2002] NSWADT 6

Scarfo v Chief Commissioner of State Revenue [2010] NSWADT 288

Vickery v Woods (1951) 85 CLR 336

Summary

The applicants sought a review of the decision by the Chief Commissioner of State Revenue (the Chief Commissioner) to assess them for 'double duty'. The applicants argued that nominal duty under section 18 on the transfer should apply where a majority of the persons constituting the purchaser and the transferee are related to each other in accordance with the definition of related persons in the Duties Act 1997 (the Act).

The Tribunal affirmed the Chief Commissioner’s decision that nominal duty cannot apply. Each of the contract and transfer is a dutiable transaction and liable under section 8(1) of the Act.

Background

The property under consideration in this matter was located in North Narrabeen ("the property"). According to the contract, the applicants, Ben Warner and Cassandra Warner, purchased the property as joint tenants for one half share while the remaining half share of the land was purchased by Danchee Pty Limited ("the Company") of which James Warner and Sylvia Warner, the parents of Ben Warner, are the joint directors and shareholders.

However, according to the transfer, the property was transferred to Ben Warner and Cassandra Warner as joint tenants in one half share and James Warner & Sylvia Warner as joint tenants in the remaining half share. The transfer had been 'self-assessed' to fixed duty of $10 under s.18(3) of the Act.

The contract for the sale of the land and the transfer document were not in conformity, because the same persons did not appear on both documents. The Chief Commissioner therefore assessed both the transfer and the contract as liable for ad valorem duty in accordance with s.8(1) of the Act.

The applicants sought a review of the Chief Commissioner’s decision to assess them for 'double duty'. The applicants argued that nominal duty under section 18 on the transfer should apply where a majority of the persons constituting the purchaser and the transferee are related to each other in accordance with the definition of related persons in the Act.

Decision

The Tribunal found that the persons named as purchaser were not the same as the transferee, so the applicant was not entitled to the benefit of section18(2).

The Tribunal also found that the applicants could not get the benefit of section18(3) under which a transfer attracts nominal duty of $10, because it only applies if all (not just some) of the persons named as the purchaser in the contract are related to all (not just some) of the persons named as the transferee in the transfer.

The Tribunal found that the parties were not all related parties; Cassandra Warner was not related to James and Sylvia Warner, as she was their daughter-in-law. This meant that section 18(3)(d)(i) was not satisfied.

The Tribunal also found that although the company contracted as a trustee of the Warner Family Trust, Ben and Cassandra did not. Therefore section 18 (3)(d)(ii) was not satisfied.

Consequently, the Tribunal found that the applicants could not utilise section 18 of the Act to avoid paying double duty on their contract and transfer because they were not in conformity under the Act. Accordingly, the Tribunal ordered that the decision of the Chief Commissioner under review be affirmed.

Link to decision

Warner v Chief Commissioner of State Revenue [2011] NSWADT 212

Last updated: 17 May 2016