(a) a receiver, or receiver and manager, of that property; or

(b) anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a security interest[.]

1. The definition refers to the property of a corporation, whereas the applicant is an individual. It follows the definition does not fit.
2. I would add that the evidence does not establish the second mortgagee made any sales in the relevant period as mortgagee in possession. There was certainly some loose language in emails used by the second mortgagee's solicitor, but the second mortgagee did not obtain orders giving it possession of the property until December 2009. Those orders did not refer to lots 2 and 32, which are in question here, precisely because those lots had already been sold by the trustees with the mortgagee's consent. I do not doubt the mortgagee was in a position to exert pressure on Mr Anderson that might have amounted to control in a practical sense given his outstanding guarantees, but that is not enough to relieve the trustee of GST liability for the purposes of Division 105 of the GST Act.

The power of sale was not exercised in relation to the two lots under consideration here, so the GST liability cannot be sheeted home to the second mortgagee.

WHAT IS THE SIGNIFICANCE OF THE APPLICANT'S RETIREMENT AS TRUSTEE ON 9 DECEMBER 2009?

1. I turn to the next question, which is whether the trustee's liability is affected by the applicant's purported retirement as trustee on 9 December 2009. The Commissioner pointed out the evidence of the applicant's retirement is equivocal. The applicant was able to produce a copy of the Deed of Retirement before the hearing, but the Commissioner said there was evidence of the applicant continuing to perform functions - like signing transfer forms - after that date which suggests he had not, in fact, retired from the role. The Commissioner also noted the Tribunal did not hear from the applicant's mother, who purportedly took over the role from him in December 2009.

But the Commissioner said that evidence can all be put to one side for now, as I need only decide whether the trustee is liable - and that can be done without reaching a concluded view on the identity of the trustee because the trust is a separate entity. 2. I infer that the Commissioner initially approached this case on the basis that

Mr Anderson was personally liable for the GST obligations in the relevant period, including any administrative penalties. But if that were so the Commissioner signalled a different, more limited approach in its Amended Statement of Facts, Issues and Contentions which confirms (at [33]) it is referring to the applicant "as the trustee of the Anderson Trust" and asking the Tribunal to consider whether the applicant as the trustee for the Anderson Trust is liable: at [34]. The Commissioner is insisting the applicant is a separate entity from the applicant acting in his capacity as trustee. 3. Anyone whose knowledge of trusts is uncontaminated by knowledge of the tax laws would find that a startling proposition. As I explained in David Christie as Trustee for the Moreton Bay Trading Company [2004] AATA 1396 (at [22]-[23]):[2]

A trust is not a legal person. A trust is a creature of equity. It is a relationship in which a person holding an interest in property or funds (the trustee) assumes obligations to manage or apply the property or funds for the benefit of others (the beneficiaries) or for a specific purpose....

The trust does not exist independently of the trustees or the beneficiaries who are involved in the trust relationship. Trusts do not own property, and they do not have the capacity to enter into contracts. The trustee is the legal actor.

1. But the Commissioner is right: the tax laws do modify the general law, at least in relation to aspects of one's taxation affairs. Section 184.1(3) of the GST Act recognises persons can undertake functions in a number of different capacities and adds: "In each of those capacities, the person is taken to be a different entity". Consistent with that approach to the tax laws, s 184.1(1) says a trust (and a partnership, and an unincorporated association, amongst others) is an entity. Section 184.1(2) goes on to explain:

The trustee of a trust or of a * superannuation fund is taken to be an entity consisting of the person who is the trustee, or the persons who are the trustees, at any given time.

1. One consequence of this approach is a form of perpetual succession in which the individual and its liabilities live on even though the individuals associated with the entity come and go. That consequence was acknowledged by Lindgren J in AXA Asia Pacific Holdings Ltd v Commissioner of Taxation [2008] FCA 1834; (2008) 173 FCR 500 where his Honour said (at 521) a "change in the identity of a trustee of a trust does not mark a change in the entity, which is 'the trustee of [the] trust'". That view of the law was confirmed with the addition of Note 2 to s 184.1(2) of the GST Act.
2. Once the argument about incapacitated entities falls away, the applicant is unable to point to any basis why the trustee of the trust in this case should not be liable to pay GST.

His main concern at the hearing was that he should not be held liable in his personal capacity. That is fair enough given he believes he is being called on to pay both the liability and penalties out of his private resources. However, the Commissioner says the question of whether a particular individual is liable to pay any amount is not squarely before me. The question of who ultimately pays certainly requires further investigation and careful consideration of the implications of the legislative logic of recognising separate entities. 3. If the Commissioner were to commence recovery proceedings in a court against a particular individual - most obviously Mr Anderson - in his personal capacity, there is an obvious question that would have to be addressed: if an individual incurs a liability in one capacity - as trustee, say - which is distinct from his personal capacity, why can the Commissioner extract payment from the individual in his personal capacity in respect of the other entity's debts? The question is ultimately the same as that posed to

the House of Lords in Salomon v Salomon & Co Ltd [1897] AC 22 and

Maclaine Watson v Department of Trade and Industry [1988] 3 All ER 523; see also Body Corporate, Villa Edgewater Cts 23092 and Commissioner of Taxation [2004] AATA 425. Moreover, if Mr Anderson can satisfy a court he had actually resigned in December 2009 before the end of the relevant quarter, he may escape any liability because it is accepted GST liability only crystallises at the end of a quarterly period:

see Eskdale South Capital Co Pty Ltd v Deputy Commissioner of Taxation [2013]

FCA 1125 at [20]-[21] per Logan J. In any event, I accept the question of recovery against any particular individual (as opposed to determining the liability of Mr Anderson in his capacity as trustee) is not before me. Whether or not Mr Anderson effectively retired on 9 December 2009 makes no difference to the liability of the trustee

1. The GST liability arises on the day when the taxable supply occurred, but it does not crystallise until the end of the quarter. In this case, the taxable supply occurred on the days on which the sales of the two lots were settled: that is, on 13 October 2009 for

lot 32, and on 18 November 2009 for lot 2. The applicant, Mr Anderson, was still the trustee at those points of settlement: he did not retire until 9 December 2009 at the earliest. I accept Mr Anderson is in a position to make submissions about the GST liability of the trustee as a result of those transactions since they occurred on his watch, even if he now says he resigned before the end of the relevant quarter. He accepted in his letter of 27 January 2015 that the correct amount of GST was $14,093 in respect of lot 32 and $13,982 in respect of lot 2: see exhibit 3 at p 320. The Commissioner now accepts those figures are correct, as do I. It follows the assessment for the December 2009 tax period should be varied to $21,446 (the amount of GST payable less input tax credits in the amount of $6,629). 2. The assessment in respect of the period ending 31 March 2010 should be set aside in light of concessions made by the Commissioner. I decide in substitution that the amount assessed should be reduced by $41,125 to nil. 3. I set aside the decisions in relation to administrative penalties in respect of both periods in light of concessions made by the Commissioner. In each case, I decide in substitution the amount of administrative penalty should be nil.

I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

........................................................................

[1]The documentation continually refers to "the Anderson Family Trust No 2", but the trust deed confirms the trust name is "The Anderson Family (No. 2) Trust": exhibit 1 at p 275. A declaration made by a solicitor acting for the trustees of the trust on 13 October 2008 confirms both references relate to one and the same trust, and that references to "the Anderson Family Trust No 2" are the result of typographical error: exhibit 1 at p 302.

[2] See also MacarthurCook Fund Management Limited v Zhaofeng Funds Ltd [2012] NSWSC 911 at [117] per Hammerschlag J.