Appellant v Respondent

1 This is an application by RC Land Management (the Appellant) for the consolidation of six separate proceedings[1] between it and the Commissioner of State Revenue (the Commissioner or the Respondent), and also an application by the Commissioner to add additional grounds in support of the Respondent's case in opposition to the Appellant's appeal in each of the six separate proceedings. These applications are brought by separate summonses, the first issued on 20 May 2025 (with respect to consolidation) and the second on 2 June 2025 (with respect to additional grounds and the production of documents).

2 The production of documents orders which the Commissioner seeks are sought in accordance with s 26 of the Civil Procedure Act 2010 (the CPA). The documents are specified both in general and more particular terms.

3 The premise of the Appellant's application for consolidation is that this is a case entirely suitable for consolidation as the same grounds arise in each of the six proceedings, save that there is one less issue in one of the proceedings. Consequently, all issues arising in the six proceedings are able to be dealt with in a single hearing in what is, in substance, one appeal. Moreover, it is submitted that such an approach would give effect to the overarching purpose provided for in s 7(1) of the CPA as facilitating 'the just, efficient, timely and cost-effective resolution of the real issues in dispute' as the Court must seek to do in accordance with the obligations provided for in s 8(1) of that Act.

4 Additionally, the Appellant contends that the Commissioner could and should have set down what is, in substance, a singular objection in one proceeding as a singular appeal. Particular reliance for this proposition is placed on the decision of Davies J in Aston (Aust) Properties Pty Ltd v Commissioner of State Revenue (Aston).[2] Davies J in that case was of the view that neither s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act) nor Order 7 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Rules), which contain the rules of Court governing applications for leave to appeal on a taxation decision, prevented the taxpayers from joining in lodging one application for leave to appeal. In so doing, her Honour made particular reference to previous decisions and legislative provisions, as follows:[3]

In Krampel Newman Partners Pty Ltd v Commissioner of Taxation, Ryan J dismissed a motion by the Commissioner seeking the dismissal of an appeal jointly lodged by nine taxpayers against separate objection decisions made by the Commissioner disallowing each taxpayer's objection to an assessment that was issued to that taxpayer. Ryan J held that more than one taxpayer could be an applicant in a single 'appeal' from several objection decisions by force of s 23 of the Acts Interpretation Act 1901 (Cth). Perforce of s 23 of that Act, the singular expressions in the relevant statutory provisions and rules of the Court governing the right of appeal included the plural. Applying the same reasoning, words in the singular in Order 7 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) and s 148(1) of VCAT Act are to be taken as including the plural by force of s 37(c) of the Interpretation of Legislation Act 1984 (Vic), unless the contrary intention appears. No contrary intention can be inferred from the statutory scheme governing rights of objection and review contained in the Taxation Administration Act 1997 (Vic), nor from Order 7 of the Supreme Court (Miscellaneous Civil Proceedings) Rules. Accordingly, the one application is [sic] can be made. Re Legge Holdings Pty Ltd v Commissioner of Taxation can be distinguished and does not require any different conclusion to be reached because no consideration was given by the Court in that case to the statutory force of s 23 of the Acts Interpretation Act 1901 (Cth).

5 The Appellant also relies upon Buckley v The Herald & Weekly Times Pty Ltd (Buckley) where Nettle J said:[4]

Generally speaking, applications for the consolidation of proceedings are governed by two principles. First, as Young CJ said in Bolwell Fibreglass Pty Ltd v Foley,[5] consolidating orders should very rarely be made; speaking generally, it is better to confine them to cases where several actions have been brought which might have been joined in one writ. Secondly, as was recognised by Herring CJ in Cameron v McBain,[6] where a consolidation order is likely to expose a plaintiff to a substantial risk of real prejudice, the order should not be made.[7]

6 The Commissioner makes five points with respect to the Appellant's application and submissions in support of consolidation of these proceedings.

7 First, the general position is that 'consolidating orders should very rarely be made' given that the same efficiencies might be achieved by directing that proceedings be heard together and by the making of various enabling orders.[8] The Commissioner supports the making of appropriate orders in due course that will enable the appeals to be heard and determined without undue duplication of evidence and other documents relevant to each appeal, as well as enabling the appeals to be heard and determined together at least to the extent that they concern common issues of fact and law. The Commissioner contends that, to the extent that the Appellant relies upon Aston,[9] that case concerned the question of the competence of a joint application for leave to appeal a decision of the Victorian Civil and Administrative Tribunal (VCAT). Davies J in that case determined that question in the affirmative in parallel with the determination of substantive issues raised in that application. It was not, the Commissioner submits, a case in which an order for consolidation was made at the very outset of the proceeding, as is the position proposed by the Appellant in its application for consolidation. Moreover, Davies J in Aston did not consider whether consolidation was inconsistent with pt 10 of the Taxation Administration Act 1997 (TAA) and, in particular, s 96(2).

8 Secondly, that this appeal and each related appeal requires the Court to consider the different point in time at which liability arose, being 31 December of the year preceding the relevant land tax year.[10] Having regard to this position, the Commissioner contends that, in such circumstances, consolidation at this stage is not appropriate or, at least, is less appropriate than other orders which can achieve the same efficiencies. Moreover, the Commissioner submits that, as set out in the correspondence with the Appellant's solicitors, the Appellant's consolidation application is premature at this stage because the legal and factual commonality required for consolidation has not yet been determined.

9 Thirdly, that to the extent that the Appellant's application is driven by a desire to avoid the setting down fee specified in the Supreme Court (Fees) Regulations 2018 (Regulations) at reg 8(2), the Commissioner notes that regs 14 and 14A provide expressly for fee waiver in specified circumstances and, additionally, there is also a power to waive fees under the Supreme Court Act 1986 at s 129(3) in the circumstances there specified, in terms of financial hardship. The Commissioner contends that the avoidance of the setting down fee in respect of the step mandated by r 7.07 of the Rules is not an appropriate reason for the exercise of the Court's discretion, assuming the applicable discretion exists in the circumstances.

10 Fourthly, the Commissioner would support an order to be made in due course in this appeal and in the related appeal proceedings that, subject to further order, all proceedings be heard and determined together with evidence filed in one appeal being treated as evidence filed in all of the appeals in order to facilitate their efficient, timely and cost‑effective resolution of the proceedings. The only caveat raised in this respect is that such an order would need to be subject to relevance and any other appropriate objection.

11 Finally, the Commissioner submits that the preferable view is that it is not open under the TAA to order the consolidation of the appeals in these matters, but that if the Court determines that it is not appropriate to do so as a matter of discretion in any event, the power to make an order does not have to be decided on this application. Moreover, it is said that pt 10 of the TAA contemplates a singular appeal for a singular objection to a singular assessment under that Act. As that procedure has been followed in this case, the issue of whether pt 10 would permit the Commissioner, on request of the taxpayer, to have lodged one appeal in respect of multiple objections to multiple assessments - which the Commissioner does not accept - is not an issue that needs to be considered by the Court.

12 In my opinion, the authorities are very clear that consolidation of proceedings should be ordered rarely and better confined to cases where several actions have been brought or might have been joined in one writ; to echo the words of Nettle J in Buckley. The then Chief Justice, Sir Edmund Herring, warned of the risk of prejudice as a result of consolidation of proceedings in Cameron v McBain.[11] In terms of advantages, consolidation cases, such as Legge Holdings Pty Ltd v Commissioner of Taxation,[12] emphasise the avoidance of multiple filing fees rather than substantive matters. Moreover, as the Commissioner contends, the judgment of Davies J in Aston is not relevant in the present context as the case had a particular focus on procedural matters arising with respect to appeals under s 148(1) of the VCAT Act.

13 In oral submissions, reference was made by the parties to the decision of Ferguson J (as the former Chief Justice then was) in Traditional Values Management Ltd v Taylor & Ors (Traditional Values Management),[13] where consideration was given to when separate proceedings might properly be consolidated.[14] In the course of considering this issue, her Honour made reference to a number of matters (nine were listed) which courts have taken into account in considering whether orders for consolidation, concurrent or sequential trials should be made.[15] Having highlighted these matters, Ferguson J then said:[16]

1. All of these matters are considered in the context of a party's entitlement to a fair trial and the overarching purpose of the Civil Procedure Act 2010 (Vic) and the Court Rules to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[17]
2. In the event that an order for consolidation of proceedings is made and it later turns out that it would be preferable if there were separate trials, a de-consolidation order might be made.[18] In my opinion, not too much weight should be given to this potential protection when considering whether to order consolidation of separate proceedings. Whilst it may be possible to make such an order, as a practical matter and dependent upon the steps that have been taken since the order for consolidation was made, deconstructing the intertwined proceedings may be extremely difficult and could lead to considerable additional expense.

The Appellant sought to distinguish Traditional Values Management on the basis that it addressed a different situation, namely the commencement of proceedings rather than the present situation where multiple proceedings are currently on foot. However, in my view, this is not a critical difference in the context of this application. Moreover, the warning sounded by Ferguson J in the concluding part of the passages set out above is equally applicable in the present circumstances.

14 I otherwise accept the Commissioner's position with respect to the application for consolidation on the basis of the matters relied upon and the reasons advanced in his submissions. I will add that I do accept that there may well be an issue as to whether pt 10 of the TAA is an obstacle to consolidation as sought. However, that is not a matter that needs to be determined in the course of this application. In summary, for the preceding reasons, there will be orders directing that the proceedings be heard together as proposed by the Commissioner and for a setting down fee payable by the Appellant as though there were only one proceeding.

15 The Commissioner informed the Appellant's solicitors, by letter dated 8 May 2025, that further consideration had been given to the Appellant's Objections and, as a result, he would apply to the Court under s 109 of the TAA to vary and add to the grounds relied upon. The Commissioner's position, in this respect, is further clarified by letter to the Appellant's solicitors dated 30 May 2025.

16 It is helpful for present purposes to set out the background material as contained in the 8 May 2025 letter upon which the Commissioner's further consideration was based:

1. RCLM was incorporated to be, and at all material times has acted as, the trustee of the two family discretionary trusts. It was in that capacity that RCLM acquired the land the subject of the Trust Reassessments (the taxable land). In its financial report for the year ended 30 June 2022, RCLM has recorded the value of the taxable land as its 'Non‑Current Assets' on the basis of the aggregated value of all of that land as at the end of each financial year.[19] It has also recorded its 'Total Liabilities' on the same aggregated basis as at the end of each financial year.[20] In RCLM's income tax return as the trustee of the two family discretionary trusts, RCLM has similarly recorded its Total Assets and Total Liabilities on an aggregated basis. RCLM's financial reports and returns treat and record it as conducting its business of managing the properties it has acquired as the trustee of the two family discretionary trusts to which it distributed its operating profit in equal shares by the payment of each share to itself as trustee of each of those trusts respectively. The financial reports and returns do not show the assets and liabilities of RCLM as assets and liabilities held separately for, or owned or owed in equal shares by, each of the two family discretionary trusts.
2. At all material times, RCLM's directors were Peter Colleluori and Louis Ross and they were each equal shareholders in RCLM.
3. On the basis of the material facts outlined above, the arrangement made between Peter Colleluori, Louis Ross and RCLM is a 'unit trust scheme' as defined in s 3(1) of the Land Tax Act 2005 (Vic) (LTA). The arrangement is as follows.
   1. RCLM was to be incorporated in order to become trustee of the Ross Trust and the Colleluori Trust, and to then acquire, from time to time, investment and rental properties, including the taxable land on trust as trustee of the two family discretionary trusts. In that capacity RCLM contributed, in equal shares, out of the assets each of the trusts the funds required by it as trustee of the two family discretionary trusts for the acquisitions. RCLM as trustee of the two family discretionary trusts was to share equally in the profits made by RCLM from those acquisitions. On the vesting of the trust, pursuant to which the taxable land was acquired and held by RCLM, RCLM (as the trustee of each of the two family discretionary trusts) was to become entitled to share equally in the distribution of trust property after payment of the trust's liabilities.
   2. Under the unit trust scheme RCLM, in its separate capacity as trustee of each of the two family discretionary trusts, held 'units' (as defined in s 3(1) of the LTA) in that scheme in equal proportions for each of those trusts.
   3. The arrangement involves three trusts. The first trust is the head trust the subject of the unit trust scheme pursuant to which RCLM, as trustee for the Ross Trust and the Colleluori Trust, purchased and became registered proprietor of an estate in fee simple in the taxable land and therefore became entitled to a freehold estate in possession of the whole of that land once each purchase was completed. In that context, RCLM was therefore the 'owner' of the taxable land as defined in s 10(1)(a) of the LTA (i.e. it was the owner of the taxable land as trustee under the head trust). The second and third trusts are the two family discretionary trusts.
   4. Pursuant to the unit trust scheme, the trustee of the second and third trusts (each of which was RCLM) was entitled as the unit holder to the benefit and distribution of profit by reason of the units held by RCLM separately but equally for each of the two trusts. One half of those units was held by RCLM as an asset of the Ross Trust and the other half was held by RCLM as an asset of the Colleluori Trust. The trustee of each of the two family discretionary trusts was entitled as a beneficiary of the head trust to the distribution in equal shares of the property of that trust on its vesting.

17 The Appellant's solicitors responded to the Commissioner's first letter by letter dated 21 May 2025 raising a variety of concerns including, significantly, whether the Appellant would be 'a trustee for itself' in the unit trust and discretionary trust structure postulated by the Commissioner. Its concern was responded to by the Commissioner in the 30 May 2025 letter as follows:

1. You have said that you have concerns as to whether there is a proper basis for the Commissioner's further grounds identified in the 8 May letter because a person cannot be a trustee for themselves alone. Your concerns in this regard relate to the Commissioner's proposed Further Ground 2 (unit trust scheme) and proposed Further Ground 3 (fixed trust scheme). Your concerns are misplaced.
2. First, whether or not there exists a 'unit trust scheme' depends upon whether the 'arrangement' identified by the Commissioner meets the applicable statutory definitions in s 3 of the Land Tax Act 2005, which concern 'participation by a person, as a beneficiary under a trust, in any profit or income ...'.
3. Second if, and to the extent that, the common law or equitable concepts of a trust and a beneficiary inform that question - or whether the arrangement is a 'fixed trust' - the principle you have identified has no application in the present appeals. This is because the principle is grounded in the assumption that 'if the trustee were the sole beneficiary there would be no trust because there would be no equitable interest vested in the beneficiary - there is a merger of any such possible interest in the legal or equitable interest to the beneficiary as trustee': Jacobs' Law of Trusts in Australia, 8th ed, 2016 at [1‑07]. In the circumstances underpinning proposed Further Ground 2 and 3, there is no such merger. Under either proposed Further Ground 2 or 3, the Taxable Lands are held by RCLM as trustee for the benefit of the ultimate beneficiaries named in the Schedule to the Ross Property Trust Deed and the P. Colleluori Property Trust Deed, one of which we note is the trustee, RCLM.
4. Accordingly, RCLM as the sole trustee is not holding the trust property solely for its own benefit and its holding of property under the head trust for the purposes of the unit trust scheme analysis, or under the fixed trust in the alternative, does not in any way conflict with the fundamental concept of a trustee's duty to hold trust property for the benefit of beneficiaries of which it may be one (as it is in this case) as long as it is not the only one. That is because as head trustee RCLM is holding its interest as trustee of the discretionary trusts - the ultimate beneficiaries of which are the persons identified in the schedules.

18 The further grounds sought to be added by the Commissioner are set out in the summons dated 2 June 2025, seeking leave to rely upon the further grounds pursuant to s 109 of the TAA.

19 Section 109 of the TAA provides that on a review or an appeal, unless the Tribunal or Court otherwise orders:

(1) the taxpayer's case is limited to the grounds of the objection; and

(2) the Commissioner's case is limited to the grounds on which the objection was disallowed.

The grounds upon which an objection is disallowed are those set out in the determination of the objection pursuant to s 101 of the TAA. Accordingly, absent any order of the Court under s 109 of that Act, the objection and the determination of that objection 'define the issues in a taxation appeal or review'.[21]

20 The Court's discretion to allow a taxpayer or the Commissioner to amend or add to the grounds under s 109 of the TAA is 'large and expressed in unfettered terms'.[22] It was described by the Court of Appeal in Harry One Pty Ltd and Another v Commissioner of State Revenue as a 'broad discretion' which was 'self‑evidently beneficial' and as a power that 'should be exercised to ensure that, subject to proper notice being given, the issues which the parties to the appeal wish to agitate can be investigated and determined'.[23] The Court's decision whether to allow the amendment ought to be made 'on the same considerations of justice upon which such decisions are regularly made in litigation'.[24]

21 The Commissioner has issued its application to rely on additional grounds in this appeal prior to the first directions hearing in proceedings. The Commissioner says that the issues raised in the Appellant's Objection dated 9 November 2023 and in the Determination are common in the five further related appeals concerning the 2019 to 2023 years that have been set down before the Court,[25] although the facts relevant to those grounds differ as between the different periods covered by each reassessment.

22 The Appellant objected to the 2024 and 2025 land tax assessment notices issued to it relying on those grounds relied upon in the Objection. The Commissioner has indicated that the Commissioner will be relying on the original as well as the proposed further grounds in support of the Commissioner's case seeking to have those assessments confirmed.[26] Those matters are presently held in abeyance at the Appellant's request on the assumption that they raise the same grounds as the current appeals.

23 The Commissioner submits that the Court should grant the Commissioner's application to rely on each of the further grounds for the following reasons:[27]

9.1 The Court's determination of each of the grounds is important in the context of this Appeal, the related appeals, the challenge to the 2024 and 2025 assessments, and is also of importance to the administration of the LTA in relation to taxable land held on trust. The Objection, the Determination and the Commissioner's application reflect that this appeal therefore raises important questions of principle concerning the operation of the LTA, the resolution of which will inform the Commissioner's future administration of that Act.

9.2 The Commissioner provided the Appellant with notice that it would seek to rely on further grounds by letter dated 8 May 2025. This was because, the Commissioner had by that time briefed counsel in the appeals, had reconsidered the issues raised in the appeals after considering the High Court's decision in CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria [2005] HCA 53; (2005) 224 CLR 98 as well as reconsidering the Appellant's: (a) financial report for the year ending 30 June 2022 (received with its Objection);[28] (b) written representation to the Commissioner as to the existence of a 'fixed trust';[29] (c) the contract for the purchase of 5 Enterprise Drive Rowville[30] (received with its Objection), and (d) the Appellant's historical ABN details.[31] The Commissioner also considered income tax records concerning the Appellant (obtained in April 2025).[32] The previous position taken by the Commissioner in the Determination cannot dictate the outcome of the present application. To do so is inconsistent with s 109 as well as with the well‑established principle that taxation authorities are not estopped by past positions they have taken.[33]

9.3 As is apparent from the correspondence referred to[34] ... above the Commissioner has provided the Appellant with details of the basis for the proposed further grounds.

9.4 If the Court allows the Commissioner's application the further grounds would not prejudice:

(a) the Appellant in its appeals, given that it will have an opportunity to respond to the further grounds; and

(b) case management given that the appeals are only at their initiating stage, with the first directions hearing yet to occur.

24 The Appellant submits that up until the present application by the Commissioner, it was common ground that it held half of each parcel of land in its capacity as trustee of one family trust and half in its capacity as trustee of the other, and the dispute was instead about whether these two family trusts were assessable to land tax separately given s 46G(3) of the LTA (as the Appellant contends) or on a combined basis given s 38 of the LTA (as the Commissioner contended).[35] Further, the Appellant observes that s 46G(3) says that the trustee is 'to be assessed for land tax on the whole of the land subject to the trust as if the land were the only land owned by the trustee'. On this basis it is contended that a separate assessment for each trust should follow, however the Appellant received (for each of the 2018 to 2023 land tax years in question) a single assessment 'for land held in joint ownership', which combined the land held by each family trust as if each trust were a 'joint owner'. In this respect, reference is made to s 38 of the LTA which provides:

(1) Joint owners of taxable land are to be assessed for land tax (other than vacant residential land tax) on land in accordance with this section.

The Appellant also observes that the section goes on to provide that 'joint owners' - defined in s 3(1) as 'persons: (a) who own land jointly or in common, whether as partners or otherwise; or (b) who are deemed by this Act to be joint owners' - are to be jointly assessed for land tax on the land 'as if it were owned by a single person', and then each joint owner is to be separately assessed (with a deduction to avoid double taxation). Reference is made to the Commissioner's delegate maintaining that this section applied 'irrespective that the two trustees are the same entity' to the effect that a trust cannot be a 'joint owner' since it is not a 'person'.[36] Thus it is said that in this way the dispute was about whether the two family trusts were assessable to land tax separately or jointly. More specifically, the Appellant submitted:[37]

1. However, on 8 May 2025, prompted seemingly by his discovery of the income tax 'partnership', the respondent wrote[38] alleging, for the first time, in the form of two proposed further grounds (then numbered 1 and 2, now numbered 2 and 3), that there was a 'third' trust. This was said to be a 'head' trust, liable to classification under the Land Tax Act 2005 as either a 'unit trust scheme' or a 'fixed trust', between RCLM as the sole trustee and RCLM as the sole beneficiary. Half of the units (or half of the equitable interest if the trust was a fixed trust instead of a unit trust) were said to be held by RCLM as trustee of one family trust and half by RCLM as trustee of the other family trust. In this way, the two family trusts were said to be sub-trusts.
2. The appellant responded[39] immediately by pointing out that, just as the respondent had recognised, a partnership is a relationship between two or more persons, so too is a trust, inasmuch as a person cannot be a (sole) trustee for themselves (solely). So, the appellant asked the respondent, how could such a head trust exist (as a matter of law)?
3. The respondent replied[40] maintaining both that there was a head trust (for reasons incomprehensible to the appellant) and that, if there was not, his assessments were still correct for a new reason (also incomprehensible to the appellant - proposed further ground 1).
4. The appellant replied[41] saying (among other things) that proposed further ground 1 was incomprehensible and proposed further grounds 2-3 were hopeless.
5. The respondent's submissions dated 20 June 2025 do not contain any further explanation of his proposed new grounds, and we have to date received no other response to our letter of 19 June 2025.

In relation to the proposed further grounds, the Appellant's position is that proposed further ground one is incomprehensible and embarrassing and should not be allowed to go ahead, that grounds two and three are 'hopeless' as there cannot be any trust solely between the Appellant and itself, and further, it is said, even if this 'legal point' could somehow be overcome, the 'partnership' and other matters cited by the Commissioner do not provide any 'proper basis' for his allegation of a third trust. Proposed further ground four is now said to be common ground that 'income tax aside, there is no partnership' and, as to further ground five, there is no difficulty beyond what has been identified and subject of course to procedural fairness with the Commissioner arguing for a 20% penalty on whatever basis the Commissioner pleases.

25 As to the Commissioner's request for documents, the Appellant says that it is understood that this request hinges on the Commissioner's proposed further grounds. It is on this basis that the production of documents issue is considered in the reasons which follow.

26 As is clear from the correspondence and other matters referred to in the written and oral submissions of the parties, the principal issue is whether the unit trust and the discretionary trust structure postulated by the Commissioner can, applying legal and equitable principles, survive without, in effect, collapsing in on itself on the basis that the Appellant cannot be a trustee for itself. In addressing this issue it should be stressed though that I do so in the context of the present application only and, necessarily, in general terms as final resolution of this and related issues is a matter for full argument and consideration at trial. The same applies with respect to the controversy between the parties as to the possibility (legal and factual) of a partnership existing as between the two discretionary trusts where the trustee of each is the same corporate legal person; namely the Appellant. Consequently, the issue is addressed with reference to general principles rather than specifics.

27 It is a rule in equity, of longstanding, that a person cannot be a trustee for themselves. However, as Spence states in The Equitable Jurisdiction of the Court of Chancery,[42] the general rule is only applicable where the person is dealing with the same estate in equity and law:

Some general rules applicable to trust estates may be here noticed. A man cannot have a legal estate in trust for himself; there is a conjunction of the legal and equitable interests; a man cannot have a subpoena against himself, the equitable estate is absorbed, or rather no longer exists; but this rule must be understood always with this restriction, that it is the same estate in equity and at law; and when, for the purposes of justice, it is necessary that the equitable interest should exist, the junction of the two estates will not be permitted to put the party in a worse situation.

See also DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW)[43] and CPT Custodian Pty Ltd v Commissioner of State Revenue (CPT Custodian)[44] where this position is also made clear. Moreover, the latter decision also emphasises the significance of the trustees' right of indemnity in this respect.[45]

28 A further important general consideration in the present context is the clear and longstanding concern of Courts of Equity to safeguard and preserve trusts in spite of shortcomings or difficulties with respect to trustees. Maitland, in his Lectures on Equity, says that 'there is a fundamental rule in equity that a trust shall never fail for want of a trustee'.[46] Similarly, Story says that 'it is a settled principle in Courts of Equity ... that a trust shall never fail for want of a proper trustee; and if no other is designated, Courts of Equity will take upon themselves the due execution of the trust'.[47]

29 In the present context these principles support, in my view, the Commissioner's position that the trust structure postulated does not produce a position where a person is holding the same legal and equitable interests on trust for itself; particularly having regard to the statements in CPT Custodian with respect to the significance of a trustee's right to indemnity in this context.

30 Moreover, if the position is found to be that the trusts were established in the postulated unit trust and discretionary trusts structure, the general position that Courts of Equity will not allow trusts to fail for want of a trustee would seem to militate against a proposition that some or all of these trusts fail due to the utilisation of the same corporate person as trustee at both levels of this structure. True it is that a trust is not something like a corporate or other 'entity', as stressed by the Appellant, but a trust is a creature of equity nevertheless, which equity has always sought to protect.

31 On this basis, the Commissioner's submissions in support of the exercise of the Court's discretion under s 109 of the TAA to grant leave to add the further grounds should be accepted. It follows that there is no basis in the Appellant's submissions that any of the proposed further grounds have no basis or are incomprehensible and should not be accepted. Thus, there is no basis for their 'summary dismissal' or refusal on the basis of the provisions of the TAA to which reference has been made; under the provisions of the CPA or otherwise.

32 Section 26 of the CPA requires that parties produce 'critical' documents, being those documents which are crucial to a party's case and which if produced are most likely to lead to the resolution of the dispute either by early settlement or at trial.[48] The Commissioner contends that the documents sought in paragraph 2 of its application, as set out in the summons of 2 June 2025, meet the description of 'critical documents' because they will provide significant information about how the Appellant structured and carried on its land acquisition and rental business, and the capacity in which it purchased the taxable lands. By way of example, the Commissioner submits that the significance of the financial reports sought is supported by the Objection in which the Appellant states (at p 5) that 'the correctness of that ownership structure and interest proportions is confirmed by the 2021/22 Financial Report for the R.C. Land Management Pty Ltd as corporate manager for the R.C. Partnership'. The Commissioner observes that, nevertheless, the 2021/2022 Financial Report provides an incomplete picture of the Appellant's arrangements because it provides no financial or other relevant information in respect of the land tax years to which it does not relate.

33 On this basis, the Commissioner contends that, by reason of s 36 of the LTA, each reassessment in issue concerns the taxable land owned by the Appellant as at midnight on 31 December preceding the relevant tax year. Moreover, as the further grounds concern the ownership of the taxable land as at that date, those grounds will require consideration of the ownership of the lands at the time they were acquired. As well, particularly in respect of the unit trust scheme and the fixed trust grounds, the factual basis that is relevant will involve consideration of the basis upon which the Appellant conducted its business of acquiring its land in Victoria on trust as from when that business in respect of those acquisitions first commenced in around 2004.

34 In the alternative, the Commissioner seeks production of these documents by way of discovery.

35 Having regard to the position I have reached with respect to the proposed further grounds, the order sought by the Commissioner with respect to the production of documents should, on the basis of the matters raised and for the reasons advanced in support of its position, be made in favour of the Commissioner.

36 For the preceding reasons, orders will be made as sought and proposed by the Commissioner together with an order providing a waiver of fees with respect to five of the six proceedings on the basis that, in the present circumstances, it is reasonable and practical that fees only apply as though the multiple proceedings were one single proceeding.

[1] S ECI 2025 00222, S ECI 2025 00224, S ECI 2025 00225, S ECI 2025 00226, S ECI 2025 00227 and S ECI 2025 00228.

[2] (2012) 88 ATR 211, [29]-[36].

[3] (2012) 88 ATR 211, [33].

[4] [2009] VSCA 118; (2009) 24 VR 129, [2] (a proposition with which the other members of the Court of Appeal, Ashley and Weinberg JJA, agreed).

[5] [1984] VicRp 8; [1984] VR 97.

[6] [1947] VicLawRp 70; [1948] VLR 245.

[7] See also Goninan & Co v Atlas Steels [2003] NSWSC 956, [29].

[8] See Bolwell Fibreglass Pty Ltd v Foley [1984] VicRp 8; (1984) VR 97, 100 (Young CJ, Kaye J agreeing). See also, Buckley v The Herald and Weekly Times Pty Ltd [2009] VSCA 118; (2009) 24 VR 129, [2] (Nettle JA, Ashley and Weinberg JJA agreeing); Traditional Values Management Ltd (in liq) v Taylor [2012] VSC 299, [9] (Ferguson J).

[9] (2012) 88 ATR 211.

[10] Land Tax Act 2005, s 36.

[11] [1947] VicLawRp 70; [1948] VLR 245.

[12] [1990] FCA 304 (Lockhart J, 23 March 1990).

[13] [2012] VSC 299.

[14] [2012] VSC 299, [8]-[12].

[15] [2012] VSC 299, [10].

[16] [2012] VSC 299, [11], [12].

[17] Civil Procedure Act s 7 and Supreme Court (General Civil Procedure) Rules 2005 r 1.14. See also Practice Note No. 10 of 2011 [2.1].

[18] Bolwell Fibreglass Pty Ltd v Foley [1984] VicRp 8; [1984] VR 97; Ghose v CX Reinsurance Company Ltd & Ors [2010] NSWSC 110.

[19] The 'Non-Current Assets' of RCLM for the 2021 and 2022 financial years were recorded as $15,172,035 and $15,124,908 respectively.

[20] The 'Total Liabilities' of RCLM for the 2021 and 2022 financial years were recorded as $14,007,857 and $12,8906,829 respectively.

[21] Vontap Pty Ltd v Commissioner of State Revenue (2005) 60 ATR 490, [41] (Hollingworth J).

[22] Conder Tower Pty Ltd v Commissioner of State Revenue (2012) 88 ATR 123 (Conder), [33] (Pagone J).

[23] [2007] VSCA 73; (2007) 66 ATR 257, 260 [15] (Maxwell P, Buchanan JA agreeing). See similarly, Harry One Pty Ltd v Chief Commissioner of State Revenue (2007) 65 ATR 777, 782 [31] (Hollingworth J), 'the legislature has given the court and VCAT a broad power to permit either the taxpayer or the Commissioner to be relieved from the hardship of being bound by their original arguments'; Lighthouse Philatelics v Federal Commissioner of Taxation [1991] FCA 667; (1991) 32 FCR 148 (Lighthouse), 156 (Lockhart, Burchett and Hill JJ) observing the discretion under consideration in that case (s 190(a) of the Income Tax Assessment Act 1936 (Cth)) permitted the taxpayer to advance new grounds even if they involve 'entirely fresh grounds in substitution for the original grounds'.

[24] Conder, [33] (Pagone J), quoting Lighthouse.

[25] Being proceedings S ECI 2025 00224, S ECI 2025 00225, S ECI 2025 00226, S ECI 2025 00227, S ECI 2025 00228.

[26] See 8 May 2025 letter from the State Revenue Office (SRO), [14]; 30 May 2025 letter from the SRO, [15]: KEW‑1, 22-29, 47-52.

[27] Short Submissions in Support of Respondent's Application and on Consolidation (20 June 2025), [9].

[28] Document 25 of the documents filed in this proceeding pursuant to rule 7.06 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic) (rule 7.06 documents).

[29] Document 49 and document 51 of the rule 7.06 documents.

[30] Document 24 of the rule 7.06 documents.

[31] Document 79 of the rule 7.06 documents.

[32] See the affidavit of Kate Elizabeth Walker (affirmed 20 June 2025), Exhibit KEW-1, 19-20.

[33] Harry One Pty Ltd [2007] VSCA 73; (2007) 66 ATR 257, [16] (Maxwell P and Buchanan JA).

[34] See the affidavit of Kate Elizabeth Walker (affirmed 20 June 2025), Exhibit KEW-1, 19-20.

[35] See, explaining the history of the matter and citing the relevant documents, [13], [21]-[32] of the affidavit of Rebecca Laban sworn on 21 March 2025.

[36] See, explaining the history of the matter and citing the relevant documents, [13], [21]-[32] of the affidavit of Rebecca Laban sworn on 21 March 2025.

[37] Appellant's Submissions (In Support of Orders Sought on 27 June 2025) (24 June 2025), [6]-[10].

[42] George Spence, The Equitable Jurisdiction of the Court of Chancery (Stevens and Norton, London, 1846), i 508 (citations omitted).

[43] [1982] HCA 14; (1991) 56 ALJR 287, 300 (Aickin J).

[44] [2005] HCA 53; (2005) 224 CLR 98, 112-113, [25]-[28].

[45] See CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria [2005] HCA 53; (2005) 224 CLR 98 and the Commissioner's oral submissions (at, particularly, T47).

[46] Frederic W Maitland, Equity (Brunyate Edition, Cambridge University Press, 1947), 67.

[47] Joseph Story, Commentaries on Equity Jurisprudence (Little, Brown and Company, 13th ed, Boston, 1886) ii 352-3.

[48] Mullett v Nixon [2022] VSCA 174, [86] (Ferguson CJ, Beach and McLeish JJA).