Land tax decision summaries

Tribunal

Boarding Houses/Low Cost Accommodation

2015 Decision Summary

Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53
Date of Decision: 26 March 2015

Decision: The application for an extension of time in which to apply for administrative review of the Chief Commissioner's assessments for the years 2011, 2012 and 2013 was refused.

Catchwords: Civil and Administrative Tribunal (NSW) – low cost housing – tariff – land tax exemption - application for extension of time – exercise of discretion – application refused

Case summary: Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53

Child Care Facility

2015 Decision Summary

Joukhador v Chief Commissioner of State Revenue [2015] NSWCATAD 43
Date of Decision: 17 March 2015

Decision: The decision under review is affirmed.

Catchwords: Land tax - exemption for child care facility under section 10(1)(u) - land being developed for use as a child care facility - whether 'used for the provision of an approved education and care service'

Case summary: Joukhador v Chief Commissioner of State Revenue [2015] NSWCATAD 43

Grouping

2014 Decision Summary

Edgely Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 103
Date of Decision: 17 July 2014

Decision: The decision under review is affirmed.

Catchwords: Land Tax Management Act 1956 – s 14 – s 15 – s 29 - Taxation Administration Act 1996 – s 3 – Part 3 – s 8 - s 9(3) - s 15 – s 16 – s 21 – s 25 - s 27 - Whether assessment defective -- grouping of companies for the purposes of concessional status

Case summary: Edgely Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 103

Primary Production Land

2016 Decision Summary

Houston v Chief Commissioner of State Revenue [2016] NSWCATAD 126
Date of Decision: 22 June 2016

Orders: The assessments for land tax years 2010-14 were affirmed.

Catchwords: STATE REVENUE – Land Tax – whether land exempt - as land used for primary production – whether the dominant use was use for the maintenance of cattle – whether land along with other lands used for significant and substantial commercial purpose or character and whether engaged in for the purpose of profit on a continuous or repetitive basis – s 10AA – Land Tax Management Act 1956

Case summary: Houston v Chief Commissioner of State Revenue [2016] NSWCATAD 126

2015 Decision Summaries

Morris v Chief Commissioner of State Revenue [2015] NSWCATAD 229
Date of Decision: 06 November 2015

Orders:
  1. The assessments under review in respect of the 2011 and 2012 land tax years are affirmed.
     
  2. The Applicant is entitled to the exemption sought in respect of the 2013 land tax year and the assessment issued in respect of that year is set aside.
Catchwords: REVENUE LAW - land tax - primary production exemption - dominant use - maintenance of animals - s 10AA Land Tax Management Act 1956

Case summary: Morris v Chief Commissioner of State Revenue [2015] NSWCATAD 229
Australian Native Landscapes Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 189
Date of Decision: 10 September 2015

Orders: The Tribunal confirmed the assessments for the land tax years 2010 to 2014.

Catchwords: STATE REVENUE – Land Tax – Whether land consists of separate ‘parcels of land’ for purposes of Land Tax Management Act 1956 – Part of the land used for ‘compost farming’ – Whether used for cultivation – Primary Production Exemption - Land Tax Management Act 1956, s 10AA(3)(a)

Case summary: Australian Native Landscapes Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 189
Codlea v Chief Commissioner of State Revenue [2015] NSWCATAD 136
Date of Decision: 02 July 2015

Decision: The Tribunal found that the taxpayer used the land for beekeeping. However, the beekeeping operations did not have a 'significant and substantial commercial purpose or character' nor was it 'engaged in for the purpose of profit on a continuous or repetitive basis' as required for the exemption to be available.

The Tribunal confirmed the assessments made under the Act on the ultimate basis of a finding that the appellant's use of the relevant land for beekeeping did not, for any of the land tax years in question (2012-2014), meet the requirements for exemption to be available under s 10AA(2)(a) and (b) of the Land Tax Management Act 1956.

Catchwords: Principal judgment – State taxes – land tax – land used for primary production – keeping of bees, for the purpose of selling their honey – dominant use of land – significant and substantial commercial purpose or character – purpose of profit on a continuous or repetitive basis

Case summary: Codlea v Chief Commissioner of State Revenue [2015] NSWCATAD 136
Delli-Carpini v Chief Commissioner of State Revenue [2015] NSWCATAD 12
Date of Decision: 28 January 2015

Decision: Ultimately, the Tribunal accepted that parts of the Property were used during the relevant period to maintain horses, alpacas and poultry. However, having regard to the evidence the Tribunal was not satisfied that the dominant use of the Property for any year during the relevant period was for the maintenance of animals for the purpose of selling them or their natural increase or bodily produce. In reaching this finding, Senior Member Isenberg emphasised that no evidence of primary production income derived from the use of the Property was placed before the Tribunal.

Accordingly, the Tribunal confirmed the land tax assessments for the 2009 to 2013 land tax years (inclusive).

Catchwords: Land tax - primary production exemption - dominant use - s10AA Land Tax Management Act 1956

Case summary: Delli-Carpini v Chief Commissioner of State Revenue [2015] NSWCATAD 12

2014 Decision Summaries

Bisvic Pty Limited v Chief Commissioner of State Revenue (No2) [2014] NSWCATAD 166
Date of Decision: 08 October 2014

Decision: The Tribunal found that the Taxpayer's primary production activity of maintaining horses for sale was conducted as a business for the purpose of profit on a continuous and repetitive basis even though there was little prospect of the business ever making a profit. However the Tribunal found that the primary production business was not conducted for a significant and substantial purpose or character, and was not the dominant use of the land, even though the horse business was conducted on 96.5% of the land area. The Tribunal confirmed the Chief Commissioner's assessment.

Catchwords: Land tax; exemption for primary production; use of land for maintaining horses for sale; whether dominant purpose; whether significant and substantial commercial purpose of character; whether for purpose of profit on a continuous or repetitive basis

Case summary: Bisvic Pty Limited v Chief Commissioner of State Revenue (No2) [2014] NSWCATAD 166
R & E Drafting Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 75
Date of Decision: 06 June 2014

Decision: As the Tribunal found that the taxpayer had failed to discharge its onus, the Chief Commissioner's decision was affirmed.

Catchwords: Primary production – meaning of applicable tests “cultivation” – Land Tax Management Act 1956 – s 10AA(3)

Case summary: R & E Drafting Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 75
Vowles Properties Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 73
Date of Decision: 04 June 2014

Decision: The decision of the Chief Commissioner of State Revenue under review was affirmed. Catchwords: Land tax - primary production exemption - dominant use - significant and substantial commercial purpose - s10AA Land Tax Management Act 1956 (“the Act”)

Case summary: Vowles Properties Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 73
Skinner v Chief Commissioner of State Revenue [2014] NSWCATAD 66
Date of Decision: 16 May 2014

Decision: The Tribunal made orders as follows:
  1. The Chief Commissioner’s decision in relation to the Lawrence Road property is set aside.
     
  2. The Chief Commissioner’s decision in relation to the Iolanthe property is affirmed.
Catchwords: Land tax – Land Tax Management Act 1956, s.10AA - Land Tax Act 1956, s.6 - exemption – primary production – dominant use – commerciality test – breeding horses

Case summary: Skinner v Chief Commissioner of State Revenue [2014] NSWCATAD 66
Jamsapi Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 57
Date of Decision: 08 May 2014

Decision: The land tax assessments under review are affirmed.

Catchwords: TAXES AND DUTIES - Land Tax – whether land exempt from taxation as land used for primary production - whether the applicant failed to discharge onus of proof – whether the applicant failed the dominant use test

Case summary: Jamsapi Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 57
Favello Pty Limited, Dr Preslav Trenchev, and Preslav Trenchev v Chief Commissioner of State Revenue [2014] NSWCATAD 47
Date of Decision: 16 April 2014

Decision: The land tax assessments under review are affirmed. Senior Member Verick held that the Taxpayers failed to discharge their onus of proving their case that the dominant use of the Properties was for primary production during the relevant years.

Catchwords: TAXES AND DUTIES - Land Tax - Land Tax Management Act 1956, s 10AA - Primary Production Exemption - Twenty Seven disparate properties - Whether land used for the cultivation of nut trees - Whether the use is the dominant use

Case summary: Favello Pty Limited, Dr Preslav Trenchev, and Preslav Trenchev v Chief Commissioner of State Revenue [2014] NSWCATAD 47
De Re v Chief Commissioner of State Revenue [2014] NSWCATAD 24
Date of Decision: 12 March 2014

Decision: The Tribunal was of the view the Chief Commissioner was correct in submitting that the Taxpayers had not established that the dominant use of the property was the primary production use.

The Chief Commissioner's decision was confirmed.

Catchwords: Primary production exemption – onus of proof – consideration of cattle use, rental use and development use

Case summary: De Re v Chief Commissioner of State Revenue [2014] NSWCATAD 24

2011 Decision Summaries

Glenworth Valley Pastoral Company Pty Limited v Chief Commissioner of State Revenue [2011] NSWADT 272
Date of Decision: 17 November 2011

Decision: Excepting only that the amount assessed must be reduced by the amount assessed for the 2006 land tax year the decision under review is affirmed.

Catchwords: Land tax – Availability of primary production exemption - Nature of agistment - whether agistment falls within section 10AA of the relevant Act - dominant purpose - whether agricultural purpose dominant - whether land has a dominant purpose where a substantial part is unusable

Case summary: Glenworth Valley Pastoral Company Pty Limited v Chief Commissioner of State Revenue [2011] NSWADT 272
Hoxede Pty Ltd ATF the Starr Family Trust v Chief Commissioner of State Revenue [2011] NSWADT 251
Date of Decision: 04 November 2011

Decision: The applicant sought a review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to disallow their objection to an assessment for land tax for the 2007 to 2009 land tax years in respect of a property situated in Spring Farm ("the subject property").

At issue in these proceedings was whether the primary production exemption under s 10AA of the Land Tax Management Act 1956 (“the Act”) should have applied in respect of the subject property. Judicial Member Block affirmed the decision of the Chief Commissioner that the primary production exemption was not available during the relevant tax years.

Catchwords: Land Tax – Primary Production Exemption – Rural Land – Dominant Use Test – Significant and Substantial Purpose test – Zoning

Case summary: Hoxede Pty Ltd ATF the Starr Family Trust v Chief Commissioner of State Revenue [2011] NSWADT 251
Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue [2011] NSWADT 250
Date of Decision: 02 November 2011

Decision: Assessments of land tax for 2007, 2008, 2009 and 2010 confirmed.

As a preliminary matter, Judicial Member Frost determined that:
  • the commerciality and profit tests in s 10AA(2) should be determined by reference to the entirety of the farmer’s farming land, that is, including the additional 280 hectares used in conjunction with “the Land”; and
     
  • the dominant use test in s 10AA(3) should be determined by reference to the Land only, that is, excluding the additional 280 hectares used in conjunction with "the Land".
Judicial Member Frost concluded that while the use of the Land satisfied the commerciality and profit tests, the dominant use test was not satisfied.

Catchwords: Land tax - primary production use of land - "dominant use" of land - physical activity on the land undertaken by a person other than the owner of the land - whether "dominant use" is measured only by reference to physical activities conducted "on" the land - whether the primary production use of the land has a "significant and substantial commercial purpose or character" - whether the primary production use of the land is engaged in "for the purpose of profit on a continuous or repetitive basis"

Case summary: Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue [2011] NSWADT 250
Caruana v Chief Commissioner of State Revenue [2011] NSWADT 183
Date of Decision: 02 August 2011

Decision: The applicants sought a review of the decision of the Chief Commissioner of State Revenue (”Chief Commissioner”) to disallow their objection to land tax assessments issued for the 2004 – 2009 land tax years pursuant to the Land Tax Management Act 1956 ("the LTMA") in respect of the applicants' properties at Sutherland Road, Londonderry ("the Londonderry property") and Hume Highway, Lansvale ("the Lansvale property"). At issue in these proceedings was whether the primary production exemption under s. 10(1)(p) of the LTMA (for the 2004 and 2005 land tax years) and under s. 10AA of the LTMA (for the 2006 to 2009 land tax years) should have applied in respect of the Londonderry property and the Lansvale property.

The Tribunal affirmed the decision of the Chief Commissioner that the primary production exemption was not available in respect of the Londonderry property and the Lansvale property in the relevant tax years.

Catchwords: Primary production exemption - meaning of "use" - whether intention is sufficient - meaning of "maintenance of animals" exemption - relevance of ownership of other land

Case summary: Caruana v Chief Commissioner of State Revenue [2011] NSWADT 183

Principal Place of Residence

2016 Decision Summary

Morris v Chief Commissioner of State Revenue [2016] NSWCATAD 219
Date of Decision: 11 October 2016

Orders: Senior Member Boxall affirmed the Chief Commissioner's decision.

Catchwords: Land tax - principal place of residence

Case summary: Morris v Chief Commissioner of State Revenue [2016] NSWCATAD 219

2015 Decision Summaries

Perumal v Chief Commissioner of State Revenue [2015] NSWCATAD 85
Date of Decision: 28 April 2015

Orders: Application dismissed in part; to proceed to hearing in part.

Catchwords: LAND TAX – principal place of residence concessions – applicability

Case summary: Perumal v Chief Commissioner of State Revenue [2015] NSWCATAD 85
Bright v Chief Commissioner of State Revenue [2015] NSWCATAD 80
Date of Decision: 21 April 2015

Decision: The decision of the Chief Commissioner to assess the property was affirmed.

Catchwords: Land tax - principal place of residence exemption; absence from former residence; income derived from use or occupation of a former residence

Case summary: Bright v Chief Commissioner of State Revenue [2015] NSWCATAD 80

2014 Decision Summaries

Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217
Date of Decision: 9 December 2014

Decision: The decision under review was affirmed.

Catchwords: Land tax – principal place of residence exemption – use and occupation – absences from former residence – election – definition of family

Case summary: Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217
Woods v Chief Commissioner of State Revenue [2014] NSWCATAD 151
Date of Decision: 23 September 2014

Decision: The Chief Commissioner considered the question of fairness, but found that the reassessment was consistent with assessing practices at the time and advised the Taxpayer that the reassessment should stand.

Catchwords: Land Tax - Failure to Occupy Intended Principal Place of Residence - Entitlement of Issue of Reassessment

Case summary: Woods v Chief Commissioner of State Revenue [2014] NSWCATAD 151
Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133
Date of Decision: 10 September 2014

Decision: The decision under review was affirmed.

Catchwords: LAND TAX - power to write off - unwarranted - impracticable

Case summary: Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133
Theophilas v Chief Commissioner of State Revenue [2014] NSWCATAD 100
Date of Decision: 16 July 2014

Decision: The Chief Commissioner's assessment of the Randwick Property was affirmed.

Catchwords: Land tax - principal place of residence - entitlement to have other land taken into account

Case summary: Theophilas v Chief Commissioner of State Revenue [2014] NSWCATAD 100
Neal v Chief Commissioner of State Revenue [2014] NSWCATAD 26
Date of Decision: 14 March 2014

Decision: The decision of the Chief Commissioner to impose a penalty tax for the relevant years at a rate of 75% was affirmed.

Catchwords: Land tax – principal place of residence exemption – onus of proof – whether intentional disregard of taxation law – penalty – s27(2) Taxation Administration Act 1996

Case summary: Neal v Chief Commissioner of State Revenue [2014] NSWCATAD 26
Frank Zakis Pty Ltd ATF Frank Zakis Family Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 18
Date of Decision: 26 February 2014

Decision: The assessment for the 2013 land tax year is affirmed.

Catchwords: Land Tax Management Act 1956 – s 3(1), s 3A, s 24, s 25, 2 26, Schedule 1A Clause 11(1), - Meaning of "owner" for the purposes of land tax - more than one owner - effect of transfer and effect of its registration after the taxing date - meaning of "agreement for sale" for the purposes of section 26 of the Land Tax Management Act

Case summary: Frank Zakis Pty Ltd ATF Frank Zakis Family Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 18

2013 Decision Summary

Uechtritz v Chief Commissioner of State Revenue [2013] NSWADT 111
Date of Decision: 22 May 2013

Decision: Application 126020: decision under review set aside

Application 136005: settled, dismissed

Judicial Member Walker held that, based on the totality of the evidence, from October 2010 the Byron Bay property was the applicant’s PPR, having regard in particular to:
  • the Taxpayer’s expressed intention in 2010 to retire to Byron Bay,
     
  • the explanations for the Taxpayer’s extended absences from Byron Bay and extended periods of occupation of the Rose Bay residence, especially between 1 July 2010 and 30 June 2011,
     
  • the rational explanations given by the Taxpayer for failing to notify relevant authorities of his change of residential address in 2010;
     
  • the fact that the Taxpayer’s wife resided at the Byron Bay property when she was not travelling with the Taxpayer for business or recreational trips.
Judicial Member Walker set aside the decision of the Chief Commissioner that the Byron Bay property was not the Taxpayer’s exempt PPR for the 2011 tax year.

Catchwords: Land tax - principal place of residence - relevant period - days spent at property - passenger card - official records not altered - unusual circumstances

Case summary: Uechtritz v Chief Commissioner of State Revenue [2013] NSWADT 111

2012 Decision Summaries

Sheedy v Chief Commissioner of State Revenue [2012] NSWADT 99
Date of Decision: 23 May 2012

Decision: The assessments are confirmed.

Catchwords: Land tax exemption - vacant land - principal place of residence exemption - effect of revocation

Case summary: Sheedy v Chief Commissioner of State Revenue [2012] NSWADT 99
Fenton v Chief Commissioner of State Revenue [2012] NSWADT 96
Date of Decision: 22 May 2012

Decision: The Tribunal found as follows:
  1. the taxpayer had not discharged his onus of proof to establish that the Mosman property was his PPR in respect of the relevant year, as there was no evidence as to the maintenance of clothes or other possessions in the Mosman property. Moreover, during the critical period, the taxpayer's evidence was that he spent 80% of his time in the Curl Curl property where he lived with his de facto spouse in a stable relationship and in a house which had been extensively renovated, and his adult non-dependent son lived in the Mosman property whom he visited, thus resulting in the 80/20 ratio;
     
  2. in relation to the Mosman property, the taxpayer could not satisfy the continuous use requirements of a PPR - cI. 2(2)(a) of Sch 1A of the Act's - as the Mosman property was not continuously used and occupied by the taxpayer for residential purposes, given that since 1 July 2010, he lived 80% of the time at Curl Curl;
     
  3. as regards clause 12 of Schedule 1A of the Act, where a person has more than one place of residence, the exemption will apply only to the one residence, which is their principal place of residence. The fact that the Mosman property was not the taxpayer's PPR in respect of the relevant year precludes the exemption and there was no right of election or election by default on the basis for which the taxpayer contended; and
     
  4. the Chief Commissioner's decision under review must be affirmed.
Catchwords: Land Tax – election of principal place of residence - effect of clause 2 (2) of Schedule 1A - consideration of clause 12 of the same schedule

Case summary: Fenton v Chief Commissioner of State Revenue [2012] NSWADT 96
Alldritt v Chief Commissioner of State Revenue [2012] NSWADT 72
Date of Decision: 26 April 2012

Decision: The land tax assessment for the land tax year 2007 is confirmed.

The Tribunal found that the Assessment must be confirmed as the decision of the Appeal Panel of the Tribunal in Haddad’s case made clear that the Taxpayers were prevented from claiming the principal place of residence exemption in these circumstances. In this regard, Mr Verick noted that the principal place of residence exemption was not available for the Taxpayers because (as was the case in Haddad’s case) the main residence at the West Pymble property (being the house rented to the tenants) was not an “excluded residential occupancy” during the relevant period. As a result, the West Pymble property was not a “parcel of residential land” under clause 3 of Schedule 1A to the LTMA. Consequently the principal place of residence exemption in clause 2 of Schedule 1A to the LTMA, which relevantly only applies to a parcel of residential land, could not apply to the West Pymble property for the 2007 land tax year.

Catchwords: principal place of residence exemption - whether land "residential land" with an "excluded occupancy" - principal residence leased and owners in occupation of a studio on the land

Case summary: Alldritt v Chief Commissioner of State Revenue [2012] NSWADT 72

2011 Decision Summaries

Carcary v Chief Commissioner of State Revenue [2011] NSWADT 244
Date of Decision: 28 October 2011

Decision: The applicant sought a review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to disallow her objection to an assessment for land tax for the 2011 land tax year in respect of a property situated in Mayfield, Newcastle (“the Mayfield property”).

Judicial Member Verick affirmed the decision of the Chief Commissioner that the principal place of residence (“PPR”) exemption pursuant to s10(1)(r) of the Land Tax Management Act 1956 ("the Act") was not available in respect of the Mayfield property.

Catchwords: Principal Place of Residence Exemption

Case summary: Carcary v Chief Commissioner of State Revenue [2011] NSWADT 244
Kolln v Chief Commissioner of State Revenue [2011] NSWADT 127
Date of Decision: 16 May 2011

Decision: The applicants sought a review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to disallow their objection to an assessment for land tax for the land tax years 2005 to 2009 in respect of land situated in Greenpoint Road, Oyster Bay, New South Wales ("the Greenpoint Road property").

At issue in these proceedings was whether the Greenpoint Road property was exempt from land tax in the relevant years under the concession for unoccupied land intended to be the owner's principal place of residence, pursuant to clause 6 of Schedule 1A to the LTMA. Judicial Member Verick upheld the Chief Commissioner’s decision that the concession did not apply.

Catchwords: Land Tax Management Act – principal place of residence – whether property was exempt from land tax in the land tax years under the "concession for unoccupied land intended to be owner's principal place of residence" pursuant to clause 6 of Schedule 1A to the Land Tax Management Act 1956

Case summary: Kolln v Chief Commissioner of State Revenue [2011] NSWADT 127

Trust Property

2015 Decision Summaries

White Star Developments Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 180
Date of Decision: 26 August 2015

Decision: The Chief Commissioner's decision of 18 August 2014 to assess the land for land tax in respect of the 2012, 2013 and 2014 years was confirmed.

Catchwords: Land tax - Taxpayer trustee for a special trust - trust formed with intention of being a fixed trust - trustee not aware that it was a special trust until it answered Chief Commissioner's questionnaire during 2014 tax year - trustee then amended its trust deed to comply with requirements for a fixed trust - trustee would have done so earlier if assessment had been issued earlier - whether in the circumstances assessments for the 2013 and 2014 tax years ought be set aside

Case summary: White Star Developments Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 180
TECH 1 Pty Ltd ATF ROVI Investments Unit Trust v The Chief Commissioner of State Revenue [2015] NSWCATAD 123
Date of Decision: 18 June 2015

Decision: As the Trust failed to satisfy the relevant criteria as set out in s. 3A(3B)(a)(i) and (ii) of the Act, the Trust was held to be a special trust and the reassessments of the Chief Commissioner of State Revenue were affirmed.

Catchwords: STATE REVENUE – Land Tax – Liability of trustee - Whether a fixed trust or a special trust – No present entitlement to income or capital of the Trust – Requirements for fixed trust not satisfied – Land Tax Management Act, s 3A

Case summary: TECH 1 Pty Ltd ATF ROVI Investments Unit Trust v The Chief Commissioner of State Revenue [2015] NSWCATAD 123
Krcmar Holdings Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 54
Date of Decision: 26 March 2015

Orders:
  1. Assessments dated 12 August 2013 (in respect of the 2009 and 2010 land tax years) are confirmed in accordance with section 101(1)(a) Taxation Administration Act.
     
  2. Assessment dated 30 January 2014 (in respect of the 2014 land tax year) is confirmed in accordance with section 101(1)(a) Taxation Administration Act.
Catchwords: Fixed trust – special trust – land tax – hardship

Case summary: Krcmar Holdings Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 54

2014 Decision Summary

Laviva Nominees Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 84
Date of Decision: 20 June 2014

Decision: The decision of the Chief Commissioner under review is affirmed.

The Tribunal confirmed the decision of the Chief Commissioner not to remit market and premium interest.

Catchwords: Land Tax; special trust; remission of market and premium interest s72 Land Tax Management Act 1956 - ss 21, 22, 25 Taxation Administration Act 1996.

Case summary: Laviva Nominees Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 84

2013 Decision Summary

Azzure-Blacktown Pty Ltd, Azzure-Chiltern Pty Ltd and Azzure-Kotara Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 207
Date of Decision: 19 September 2013

Decision: The assessments (and objection decisions) under review are affirmed.

Catchwords: "Presently entitled" and "entitled" in the context of the relevant legislation – interpretation – Special Trusts – fixed trust

Case summary: Azzure-Blacktown Pty Ltd, Azzure-Chiltern Pty Ltd and Azzure-Kotara Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 207

2012 Decision Summary

EK Anderson Investments Pty Ltd ATF CACS Property Trust v Chief Commissioner of State Revenue [2012] NSWADT 132
Date of Decision: 04 July 2012

Decision: The Decision under review is affirmed.

Judicial Member Block found that the decision of the Chief Commissioner to issue the Reassessments must be affirmed. He noted in this regard that the relevant legislation makes it clear that the Taxpayer was under an obligation to inform the Chief Commissioner of the fact that the Property was owned by the Trust and that the Trust was a special trust.

Judicial Member Block dismissed the Taxpayer’s contention that the Chief Commissioner, who had access to the land title records of the Property, should have assessed the Property correctly. He noted that the Chief Commissioner was never under any legal obligation to consult land title records in raising land tax assessments. He also noted that land title records would not have disclosed the existence of the Trust in respect of the Property or the fact that the Trust was a special trust because those records did not record details of the trust’s ownership of the land.

Tribunal Member Block also noted that the Chief Commissioner is required to assess (or reassess) land tax in accordance with the LTMA, and no conduct of a revenue authority, including the alleged failure of the Chief Commissioner to ask for information about possible trust ownership, can estop the operation of a taxing statute (paras 28 to 31).

Catchwords: Land tax in respect of a special trust - no estoppel against the operation of a tax statute - obligations of taxpayer to advise if land held by a special trust

Case summary: EK Anderson Investments Pty Ltd ATF CACS Property Trust v Chief Commissioner of State Revenue [2012] NSWADT 132

2011 Decision Summary

J.A.M. Investments Australia Pty Ltd ATF The Geokjian Unit Trust v Chief Commissioner of State Revenue [2011] NSWADT 75
Date of Decision: 13 April 2011

Decision: The applicant sought judicial review of the Chief Commissioner of State Revenue's (the "Chief Commissioner") decision to disallow its objection to land tax reassessments issued for the 2006, 2007, 2008, 2009 and 2010 land tax years (the "reassessments") pursuant to the Land Tax Management Act 1956 ("the LTMA"). The reassessments were issued pursuant to a determination by the Chief Commissioner that the Geokjian Unit Trust was a "special trust" within s. 3A of the LTMA.

The Tribunal found that during the relevant period the unit holders in the Geokjian Unit Trust were not "presently entitled to the income of the Trust".

The Tribunal also found that there was no provision in the Trust Deed which "specifically provides that the beneficiaries of the trust … are presently entitled to the capital of the trust" as required by s. 3A(3B)(a) of the LTMA. Rather, the Tribunal found that the Trust Deed provided for Income Units to be issued, and that the holders of Income Units did not have any entitlement to the capital of the trust.

By finding that the unit holders were not presently entitled to either the income or capital of the Geokjian Unit Trust, the Tribunal held that the land forming part of the Trust Fund was correctly reassessed by the Chief Commissioner as being subject to a "special trust".

The Tribunal determined that the Trust was a special trust, and affirmed the reassessments.

Catchwords: Land tax – Trust classified as a special trust or a fixed trust

Case summary: J.A.M. Investments Australia Pty Ltd ATF The Geokjian Unit Trust v Chief Commissioner of State Revenue [2011] NSWADT 75

Appeal Panel

Beekeeping

2016 Decision Summary

Codlea Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAP 30
Date of Decision: 08 February 2016

Decision: The Chief Commissioner submitted that the taxpayer had identified no questions of law, and should otherwise be denied leave to appeal.

The Appeal Panel agreed with the Chief Commissioner in relation to each ground of appeal and concluded that there were no questions of law identified in the Notice of Appeal, so that there was no appeal as of right on any ground, nor would leave be granted to appeal.

Catchwords: CIVIL AND ADMINISTRATIVE TRIBUNAL – STATE TAXES - Appeal Panel – Land Tax Management Act – Land used for purpose of beekeeping – no question of law arising from finding below that land did not qualify for exemption from land tax– appeal dismissed

Case summary: Codlea Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAP 30

Boarding Houses/Low Cost Accommodation

2012 Decision Summary

Perry Properties Pty Ltd v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 13
Date of Decision: 02 April 2012

Decision: The proceedings arose from a decision by the Chief Commissioner that the taxpayer was not eligible for an exemption from payment of land tax for the operation of a boarding house. The Appeal Panel dismissed the substantive Appeal, as well as a cross-appeal brought by the Chief Commissioner with respect to the issue of costs
  1. Appeal dismissed.
     
  2. Respondent's cross-appeal in respect of the Tribunal's refusal to order costs dismissed.
     
  3. Respondent's application for costs of the appeal refused.
Catchwords: STATE REVENUE - Appeal - Land Tax - Low Cost Accommodation - Exemption - Long Term Residence Criteria - Whether criteria confine calculation to the assessable period - Held, so confined - If not met, do criteria allow for exercise of discretion to allow exemption - Held, no - Appeal dismissed - Land Tax Management Act 1956, s 10Q; Revenue Ruling LT 78[3]

Case summary: Perry Properties Pty Ltd v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 13

Costs

2011 Decision Summaries

1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52
Date of Decision: 16 November 2011

Decision: Tribunal Decision (1 Rocky Point Pty Limited v Chief Commissioner of State Revenue (no 2) [2010] NSWADT 138)

On the question of whether the taxpayer as bare trustee was the "owner" of the land, the Tribunal agreed with the Chief Commissioner and held that (applying Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited (1999) 48 NSWLR 299 affirmed in BBLT Pty Limited v Chief Commissioner of the Office of State Revenue 2003 ATC 5063), a registered proprietor of land which holds it on trust, even on a bare trust, enjoys an estate in possession, and is entitled to the rents and profits of the land (as per both limbs of the meaning of "owner" under the Act).

The Tribunal concluded that the principle in Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited applied to resulting trusts.

In terms of the construction of the Act, the Tribunal noted:
  • Sch 1A cl.2(5) provides that the PPR is subject to the restrictions set out in Part 4 of the Schedule.
     
  • The effect of Sch.1A Pt 4 cl.11(1)(a) is to preclude the PPR exemption from applying to land owned either wholly or in part by a company, and discloses Parliament's intention to do so, hence cl.2(3) has no operation (and therefore cl.11(6) cannot be engaged).
     
  • In relation to the applicant's third argument, the Tribunal noted that there is nothing in Sch.1A cl.2(3) which has the effect of deeming NH to be the owner to the exclusion of the company. Rather Clause 2(3) cannot apply as the exemption was precluded by operation of cl.11(1)(a).
Accordingly, the Tribunal affirmed the decision of the Chief Commissioner to assess the taxpayer for land tax.

Appeal Panel Decisions (1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52)
  1. The substantive issue

    The Appellant appealed from the decision of Judicial Member Perrignon, and the appeal was heard on 16 February 2011. Judgment was given ex tempore on that date. The Appeal Panel affirmed the decision of the Judicial Member and determined that the Court of Appeal decision in Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited (1999) 48 NSWLR 299 (Macary) was fatal to the appeal. In the Court of Appeal decision, Spigelman CJ (at para 1) and Shellar JA (at para 94) agreed with Mason P’s finding (at para 59), that:
    “The registered proprietor of an estate in fee simple holds (at law) an estate in possession notwithstanding the imposition of a trust requiring the proprietor to hold that estate on behalf of beneficiaries. Nothing turns on whether the trust is active or bare.”
  2. Costs

    The Appeal Panel held that consideration of s88(1A) requires reaching satisfaction that it is "fair" to order costs having regard to a number of factors. In this case a significant issue was the relative strengths of parties’ claims including whether a party has made a claim that has no tenable basis in fact or law".

    The Appeal Panel determined that there was no basis of fact or law which would enable the Appellant to succeed. Further it was determined that the interlocutory decision by Judicial Member Verick was merely that the matter could proceed to a final hearing, and the findings of Judicial Member Verick were not binding on the Appeal Panel. When the meaning of "owner" in the Land Tax Management Act 1956 and the Court of Appeal decision in Macary were reviewed, the appeal was bound to fail. The Appeal Panel determined that "there was indeed no basis of fact or law which would enable the applicant to succeed."

    In examining the issue of fairness, the Appeal Panel held that the decision at first instance was clearly correct and as such the subsequent appeal was bound to fail. After the decision of the Tribunal below, the Appellant was on notice that Macary was adverse to its success and that proceeding to have a determination of an appeal in the circumstances was "untenable". Therefore while it would not be "fair" to impose costs for the hearing at first instance, it was "fair" to impose the costs of the application before the Appeal Panel.

    Accordingly, the Appeal Panel's decision was that the costs of the appeal and of the application for costs be paid on the ordinary basis by the Appellant. The Appeal Panel declined to make a costs order for the matter at first instance.
Catchwords: Land tax - principal place of residence exemption - land held on trust by company for natural person - beneficiary occupied it as his principal place of residence - whether trustee an owner of land - whether trustee immune from assessment to land tax - Costs - "untenable in fact or law" - whether fair to order costs

Case summary: 1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52
Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 46
Date of Decision: 10 October 2011

Decision: On 12 August 2011, the Administrative Decisions Tribunal Appeal Panel ("the Appeal Panel") delivered a judgement dismissing the application and affirming the decision at first instance to refuse the applicant an exemption from land tax for the 2004 – 2009 land tax years under the principal place of residence exemption in Schedule 1A of the Land Tax Management Act 1956 ("the Act").

Both parties were invited to apply for their costs and both chose to do so. The appellant was ordered to pay the Chief Commissioner's costs of the appeal as agreed upon or assessed.

The Appeal Panel noted that the making of a costs order in the Administrative Decisions Tribunal is governed by s.88 of the Administrative Decisions Tribunal Act 1997.

The Appeal Panel held that as a matter of clear law, the appeal was bound to fail, a factor to be taken into account under s.88(1A)(c).

In light of s.88(1A)(c), the Appeal Panel was satisfied that it was fair to award costs of the appeal to the Chief Commissioner, either as agreed between the parties or (if agreement is not reached) as assessed.

Catchwords: Costs - No question of principle

Case summary: Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 46

Grouping of Companies

2015 Decision Summary

Edgely Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAP 37
Date of Decision: 12 March 2015

Decision: The Appeal Panel considered whether there was a valid completion of the assessment process for 2010 and therefore, whether there was an error of law at first instance. The Appeal Panel noted that ss.14 and 15 of the Land Tax Management Act 1956 ('LTMA') requires the Chief Commissioner to assess land tax and set out what is to be contained in the notice of that assessment. In this case, the 2010 Assessment included the particulars required by the LTMA and notwithstanding that other information was included (such as amounts owing for previous years), it was found that the assessment and notice for 2010 were correct. In relation to the appellant¿s argument that the inclusion of amounts owing for previous years constituted a reassessment, the Appeal Panel did not consider that this argument arose as the 2010 assessment was an assessment of land tax for 2010 and not earlier years.

Catchwords: APPEAL – Civil and Administrative Tribunal (NSW) – land tax – grouping provisions – validity of notice of assessment – jurisdiction to appeal - whether question of law - jurisdiction of Tribunal to undertake merits review where no valid notice of assessment

Case summary: Edgely Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAP 37

Primary Production Land

2012 Decision Summary

Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADTAP 25
Date of Decision: 15 September 2011

Decision: The Appeal Panel dismissed the Appeal and held that:

(1) There was no error in confining attention to the state of activity on the Land;

(2) The Tribunal was not obliged by the words of the statute to confine its attention to the acts, facts, matters or circumstances that related only to the physical, tangible use of the land. It could have regard to the commercial purpose of the owners which use the land on an interim basis for cattle grazing. It could then move to making a finding as to which of the identified uses was dominant (para 35);

(3 & 4) The Appeal Panel did not consider it to be essential to the effective disposal of the appeal to address the issues raised by the cross-appeal.

Catchwords: STATE REVENUE - Land Tax - Non Rural Land - Primary Production Exemption - Appeal from Tribunal - Meaning of 'land' - Whether 'use' confined to actual physical use of land - Whether comparison involved in deciding the 'dominant use' is confined to actual physical uses - Tribunal held not so confined, and held that the dominant use was of a business nature unrelated to primary production - no error: Land Tax Management Act 1956, s 10AA(3). Tribunal's holding in alternative that the commerciality test is satisfied - considered, Land Tax Management Act 1956, s 10AA(2)

Case summary: Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADTAP 25

2011 Decision Summary

Lease A Leaf Property Pty Limited v Commissioner of State Revenue (RD) [2011] NSWADTAP 41
Date of Decision: 15 September 2011

Decision: On 3 December 2010, the Administrative Decisions Tribunal (“the Tribunal”) affirmed the decision of the Chief Commissioner of State Revenue (the "Chief Commissioner") that the applicant's property located at Terrey Hills (the "property") was liable for land tax for the 2005 to 2009 land tax years. The property was used to conduct a business of leasing indoor plants. The Tribunal ruled that the dominant use of the land was not primary production, and refused the applicant an exemption from land tax under the "land used for primary production exemption" in the Land Tax Management Act 1956 ("the Act"). The Tribunal also declined to remit the market rate interest included in the land tax assessment. The Applicant appealed to the Appeal Panel of the Tribunal.

On 15 September 2011, the Appeal Panel dismissed the appeal and affirmed the decision of the Tribunal.

The appeal panel held that only exceptional circumstances would justify any remission of market rate interest and refused to vary the Tribunal's order to not remit the market rate interest.

Catchwords: Land used for primary production – whether land used for a commercial plant nursery

Case summary: Lease A Leaf Property Pty Limited v Commissioner of State Revenue (RD) [2011] NSWADTAP 41

Principal Place of Residence

2016 Decision Summary

Theophilas v Chief Commissioner of State Revenue [2016] NSWCATAP 111
Date of Decision: 23 May 2016

Orders: Appeal dismissed (decision under review affirmed).

Catchwords: STATE REVENUE – Land tax – principal place of residence exemption – concession in relation to unoccupied land intended to be the owner’s principal place of residence after completion of building works – concession not applicable if owner in the meantime uses and occupies other land owned by him as principal place of residence – Tribunal held correct the Commissioner’s assessment of other land as exempt and not the unoccupied land – Appeal by owner - questions of law – the Tribunal’s characterisation of the issue before it – application of taxpayer’s onus – construction of ‘principal place of residence’, ‘use’ and ‘occupation’ – whether in light of undisputed facts Tribunal’s finding manifestly unreasonable – appeal dismissed. Land Tax Management Act 1996, s 3(1), s 10(1)(r); Sch 1A, cl 2(2)(a), cl 6(7)(a), cl 6(3)(b)

Case summary: Theophilas v Chief Commissioner of State Revenue [2016] NSWCATAP 111

2015 Decision Summary

Spiros Theophilas v Chief Commissioner of State Revenue [2015] NSWCATAP 39
Date of Decision: 13 March 2015

Orders: The Appeal Panel dismissed the appeal.

Catchwords: ADMINISTRATIVE LAW – Civil and Administrative Tribunal (NSW) – land tax – principal place of residence – no error of law – appeal dismissed

Case summary: Spiros Theophilas v Chief Commissioner of State Revenue [2015] NSWCATAP 39

2012 Decision Summaries

Chief Commissioner of State Revenue v Ghali (RD) [2012] NSWADTAP 20
Date of Decision: 07 June 2012

Decision: The Appeal Panel ordered that:
  1. The appeal be allowed
     
  2. The decision (of the Tribunal) under appeal be set aside
     
  3. The decision (of the Chief Commissioner) under review be affirmed.
Catchwords: State Revenue – Principal place of residence – Limited period of occupation of alternative residence – Degree of practical availability of residence claimed as principal place of residence – Statutory Interpretation – Appeal allowed: Land Tax Management Act 1956 s 10(1)(r); Schedule 1A, cl 2(2)(a), (b)

Case summary: Chief Commissioner of State Revenue v Ghali (RD) [2012] NSWADTAP 20
Lo v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 12
Date of Decision: 19 March 2012

Decision:
  1. The appeal is dismissed
     
  2. Unless within 21 days the Appellant files and serves submissions showing why costs should not be awarded against him, the Appellant is to pay on a party-party basis the Respondent's costs of and incidental to this appeal. If such submissions are filed, the Respondent must file and serve submissions in response within a further 21 days. The Appeal Panel will determine the matter of costs without a hearing, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.
This matter consisted of an appeal from Judicial Member Block's decision in Lo v Chief Commissioner of State Revenue [2011] NSWADT to affirm the Chief Commissioner's decision to refuse Patrick Pat Kit Lo (the taxpayer) an exemption from land tax under the Principal Place of Residence Exemption ("PPR") for the 2005 to 2009 land tax years.

The Appeal Panel dismissed the appeal and made a presumptive costs order in favour of the Chief Commissioner.

Catchwords: Land tax - exemption for principal place of residence

Case summary: Lo v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 12

2011 Decision Summary

1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52
Date of Decision: 16 November 2011

Decision: Tribunal Decision (1 Rocky Point Pty Limited v Chief Commissioner of State Revenue (no 2) [2010] NSWADT 138)

On the question of whether the taxpayer as bare trustee was the "owner" of the land, the Tribunal agreed with the Chief Commissioner and held that (applying Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited (1999) 48 NSWLR 299 affirmed in BBLT Pty Limited v Chief Commissioner of the Office of State Revenue 2003 ATC 5063), a registered proprietor of land which holds it on trust, even on a bare trust, enjoys an estate in possession, and is entitled to the rents and profits of the land (as per both limbs of the meaning of "owner" under the Act).

The Tribunal concluded that the principle in Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited applied to resulting trusts.

In terms of the construction of the Act, the Tribunal noted:
  • Sch 1A cl.2(5) provides that the PPR is subject to the restrictions set out in Part 4 of the Schedule.
     
  • The effect of Sch.1A Pt 4 cl.11(1)(a) is to preclude the PPR exemption from applying to land owned either wholly or in part by a company, and discloses Parliament's intention to do so, hence cl.2(3) has no operation (and therefore cl.11(6) cannot be engaged).
     
  • In relation to the applicant's third argument, the Tribunal noted that there is nothing in Sch.1A cl.2(3) which has the effect of deeming NH to be the owner to the exclusion of the company. Rather Clause 2(3) cannot apply as the exemption was precluded by operation of cl.11(1)(a).
Accordingly, the Tribunal affirmed the decision of the Chief Commissioner to assess the taxpayer for land tax.

Appeal Panel Decisions (1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52)
  1. The substantive issue

    The Appellant appealed from the decision of Judicial Member Perrignon, and the appeal was heard on 16 February 2011. Judgment was given ex tempore on that date. The Appeal Panel affirmed the decision of the Judicial Member and determined that the Court of Appeal decision in Chief Commissioner of Land Tax v Macary Manufacturing Pty Limited (1999) 48 NSWLR 299 (Macary) was fatal to the appeal. In the Court of Appeal decision, Spigelman CJ (at para 1) and Shellar JA (at para 94) agreed with Mason P’s finding (at para 59), that:
    “The registered proprietor of an estate in fee simple holds (at law) an estate in possession notwithstanding the imposition of a trust requiring the proprietor to hold that estate on behalf of beneficiaries. Nothing turns on whether the trust is active or bare.”
  2. Costs

    The Appeal Panel held that consideration of s88(1A) requires reaching satisfaction that it is "fair" to order costs having regard to a number of factors. In this case a significant issue was the relative strengths of parties’ claims including whether a party has made a claim that has no tenable basis in fact or law".

    The Appeal Panel determined that there was no basis of fact or law which would enable the Appellant to succeed. Further it was determined that the interlocutory decision by Judicial Member Verick was merely that the matter could proceed to a final hearing, and the findings of Judicial Member Verick were not binding on the Appeal Panel. When the meaning of "owner" in the Land Tax Management Act 1956 and the Court of Appeal decision in Macary were reviewed, the appeal was bound to fail. The Appeal Panel determined that "there was indeed no basis of fact or law which would enable the applicant to succeed."

    In examining the issue of fairness, the Appeal Panel held that the decision at first instance was clearly correct and as such the subsequent appeal was bound to fail. After the decision of the Tribunal below, the Appellant was on notice that Macary was adverse to its success and that proceeding to have a determination of an appeal in the circumstances was "untenable". Therefore while it would not be "fair" to impose costs for the hearing at first instance, it was "fair" to impose the costs of the application before the Appeal Panel.

    Accordingly, the Appeal Panel's decision was that the costs of the appeal and of the application for costs be paid on the ordinary basis by the Appellant. The Appeal Panel declined to make a costs order for the matter at first instance.
Catchwords: Land tax - principal place of residence exemption - land held on trust by company for natural person - beneficiary occupied it as his principal place of residence - whether trustee an owner of land - whether trustee immune from assessment to land tax - Costs - "untenable in fact or law" - whether fair to order costs

Case summary: 1 Rocky Point Pty Ltd (No 4) v Chief Commissioner of State Revenue [2011] NSWADTAP 52

Trusts

2012 Decision Summary

Chief Commissioner of State Revenue v Sayden Pty Ltd ATF Griffin Property Unit Trust (RD) [2012] NSWADTAP 14
Date of Decision: 02 May 2012

Decision:
  1. Appeal allowed.
     
  2. Decision under appeal set aside.
     
  3. Appellant's decision restored.
     
  4. No order as to costs.

Original Tribunal Decision

In the Tribunal's view it was:

"correct in a matter such as this to apply the practical and purposive approach for which the Applicant contends and not the detached and literal approach favoured by the Respondent. ..

Quoting from Jacobs' Law of Trusts 7th ed. to support his view that the "practical and purposive approach" was the correct one to take, the Tribunal concluded:

"The (Chief Commissioner) contends ... that it is not sufficient in an amending deed simply to mirror the words of the statute and that more is required. I do not agree; it is my view that a deed which mirrors the statute is sufficient to achieve (the) result sought. To hold otherwise would require a technical approach which would not constitute the correct and preferable decision. It follows that the decision under review should be set aside and the assessment ... altered so as to allow the threshold…" (see Sayden Pty Limited v Chief Commissioner of State Revenue [2011] NSWADT 288 at para 16).

Appeal Panel decision

The Appeal Panel determined that, other than in instances of very simply expressed instruments, more would be required than mere recitation of the relevant criteria as a term of the deed. It observed, at [36]:

"The "relevant criteria" form a set of benchmarks, standards or tests against which the specific provisions of a trust deed are to be assessed. Compliance with or adherence to a standard is intended, as we interpret the words, ordinarily to be measured by reference to the specific provisions and machinery of the trust deed."
In other words, the trust deed on its terms had to satisfy the relevant criteria. Merely asserting, in the body of the deed, that it did so, would not be sufficient.

The Appeal Panel at [29] agreed with the Chief Commissioner that the following clauses in the deed were inconsistent with the full vesting of a present entitlement in the beneficiaries of the trust which clause 2(c) purports to grant unless the introductory words 'Notwithstanding any other provision of this deed' can be said, in effect, to repeal these clauses:
  1. clause 4 which confers an absolute discretion on the trustee to determine when the trust will be wound up and does not set out any mechanism by which the registered holders of the units may initiate the termination of the trust.
     
  2. clause 9 which deals with redemption of units, and provides that the beneficiaries do not have an absolute right of redemption because clause 9(b) allows the trustee to refuse a request for redemption.
     
  3. clause 3(iii) which allows the trustee 'to require the transfer to him of any of the assets or property which from time to time constitute the Trust Fund', but does not provide a facility for the beneficiaries to demand the transfer to them of an asset;
     
  4. clause 6, 'Special Units', which provides that the Trustee is entitled to issue units and classes of units at the Trustee's discretion (called 'Special Units'), which would allow for potential dilution of the present entitlements of the beneficiaries, and is difficult to reconcile with the criterion that the beneficiaries have a present entitlement to the capital and income of the trust.
     
  5. Clause 5(b) which provides that units 'shall not confer any interest in any particular part of the Fund or of any investment'.”

In relation to the meaning of the words “notwithstanding any other provision”, the Appeal Panel stated at [32]:

“…in our view neither those directly affected by the instrument's terms nor decision makers such as the (Chief Commissioner) should be left to speculate on which terms stand or fall as a consequence of the words 'notwithstanding any other provision' of the instrument. These words do not offer sufficient certainty as to which parts of the remainder of the instrument remain operative.”
Catchwords: Revenue - Land Tax - Tax-free threshold for 'fixed trust' - Tribunal held applicable - Appeal - Amendment to deed mirroring statutory criteria insufficient in circumstances - Held criteria for fixed trust not satisfied - Appeal allowed - Land Tax Management Act 1956, s 3A(3B)
    Case summary: Chief Commissioner of State Revenue v Sayden Pty Ltd ATF Griffin Property Unit Trust (RD) [2012] NSWADTAP 14
    Last updated: 9 November 2016