Appellant v Respondent

EQUITY - Trusts - Statutory construction and general law - Characterisation of legal and beneficial ownership of land held - Certainty of intention to create trust - Requirement for express trust - Person purported being trustee for themselves - Doctrine of merger - Creation of third trust - DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431 - Bankstown City Council v Alamdo Holdings Pty Ltd - Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 - Re Schebsman [1944] Ch 83 - Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62 - Federal Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592 - Li v Ye [2025] NSWCA 227.

1 These proceedings relate to six objections filed by the Commissioner of State Revenue (Respondent, SRO or Commissioner) pursuant to r 7.05 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 seeking an appeal pursuant to s 106 of the Taxation Administration Act 1997 (TAA) in response to six land tax reassessment notices issued to R.C. Land Management Pty Ltd (RC or Appellant) as Trustee for Ross Property Trust and P. Colleluori Property Trust (collectively, the Trusts). By letter from Deloitte dated 9 November 2023, RC formally objected to six land tax reassessment notices issued for each of the years 2018 to 2023 (Appellant's Objection).

2 Between 2004 and 2015, RC acquired and continues to hold eight parcels of land:[1]

(a) 240-244 Hammond Road, Dandenong (Hammond Road), acquired in 2004;

(b) 36 Sunline Drive, Truganina (36 Sunline Drive), acquired in 2010;

(c) 28-34 Produce Drive, Dandenong South (Produce Drive), acquired in 2011;

(d) 32 Sunline Drive, Truganina (32 Sunline Drive), acquired in 2011;

(e) Units 1 and 2, 73 Radnor Drive, Deer Park (Radnor Drive), acquired in 2013;

(f) 50 Brindley Street, Dandenong South (50 Brindley Street), acquired in 2014;

(g) 46 Brindley Street, Dandenong South (46 Brindley Street), acquired in 2014; and

(h) Unit 1, 5 Enterprise Drive, Rowville (Enterprise Drive), acquired in 2015[2]

(collectively, Land Held, Taxable Lands or Land).

3 It is the Appellant's position that the Commissioner incorrectly reassessed land tax, issuing single assessments for both the Trusts, aggregating the Land Held by the Trusts, increasing the total land tax payable.[3] The parties are in dispute as to the proper characterisation of the legal and beneficial ownership of the Land Held and, therefore, the way in which the Commissioner has calculated the land tax.

4 On 3 July 2025, I delivered reasons relating to two applications in the proceedings,[4] granting leave for the Respondent to rely on five further grounds of opposition and dismissing an application for consolidation of the six proceedings. I made orders that each of the proceedings be managed and heard together.[5]

5 In 2003, following advice from the Appellant's accountant, Mr Louis (Lou) Ross established the Ross Property Trust and Mr Peter Colleluori established the P. Colleluori Property Trust, with RC to be the trustee for both trusts. The specified beneficiary of the P. Colleluori Property Trust is Alfonso Colleluori, and the general beneficiaries include Mr Colleluori's family members.[6] The specified beneficiaries of the Ross Property Trust are: Lou Capovilla; Silvana Marro‑Capovilla; and any children of Lou Capovilla and of Silvana Marro‑Capovilla, both present and future. The general beneficiaries include Mr Capovilla and Mrs Marro‑Capovilla's family members.[7]

6 Mr Ross and Mr Colleluori are business partners, and the Trusts were established to be used together in a land development business; buying, developing and leasing the Land Held. RC was to be the 'land manager' in the 'partnership' and each trust a 'partner' with an equal 50% interest in each parcel of land acquired by the trustee (RC).[8]

7 RC was incorporated on 11 March 2003 and, on 18 March 2003, was appointed trustee of the Trusts.[9] On 1 April 2003, the 'partnership' of the Trusts was registered with an Australian Business Number, described as 'The Trustee for P Colleluori Property Trust & The Trustee for Ross Property Trust', known as the 'R.C. Land Management Partnership'.[10] The Trusts formed a 'partnership' for the purpose of preparing a single profit and loss statement and balance sheet for each financial year for the partnership, with each of the Trusts then lodging its own trust tax return.[11]

8 RC conducts no other business, nor acts in any other capacity. Its function is limited to purchasing, holding and managing the purchased properties. A separate entity is engaged to undertake construction on the properties.[12]

9 On 1 June 2006, in a 'Discretionary Trust - Nomination of Nominated Beneficiary' form, Lou Ross was nominated as the 'nominated beneficiary' of the Ross Property Trust for the purposes of ss 46F and 46G of the Act.[13] On 8 June 2006, in a 'Discretionary Trust - Nomination of Nominated Beneficiary' form, Peter Colleluori was nominated as the 'nominated beneficiary' of the P. Colleluori Property Trust for the purposes of ss 46F and 46G of the Act.[14]

10 The Commissioner initially assessed RC for annual land tax for each of the 2018-‍2023 land tax years under three separate assessment notices (Initial Notices of Assessment) as follows:[15]

• The two parcels of land acquired first (Hammond Road and 36 Sunline Drive) were assessed (correctly, the appellant says, except for the aggregation of the two trusts) to 'R C Land Management Pty Ltd ... on behalf of Ross Property Trust [and] P Colleluori Property Trust' with 'customer number 070740833'.
• The next three parcels acquired (Produce Drive, 32 Sunline Drive and Radnor Drive) were assessed to 'R C Land Management Pty Ltd ... customer number 060098307'.
• The next two parcels (50 and 46 Brindley Street) were assessed to 'RC Land Management Pty Ltd ... customer number 089873928', i.e. without a space between R and C, and so as a distinct 'customer'.
• The last-acquired parcel (Enterprise Drive) was not included in any assessment notice.

11 On 2 May 2023, following an internal investigation, the Commissioner withdrew each of the Initial Notices of Assessment and issued six reassessment notices for 2018-‍2023 (Reassessment Notices). Each reassessment notice was described as 'for land held in joint ownership' and addressed to RC 'on behalf of: Ross Property Trust [and] P Colleluori Property Trust'.[16] The Commissioner's delegate explained in the accompanying letter:[17]

Based on the information supplied, I have determined that RC Land Management Pty Ltd (the trustee) holds land as trustee for the Ross Property Trust and the P Colleluori Property Trust (the trusts). The land is subject to the general rate in accordance with the Land Tax Act 2005 as both trusts have nominated beneficiaries.

12 On 1 July 2023, RC informed the Commissioner of its intention to object to the Reassessment Notices. The covering email to the SRO indicated that 'further supporting information' would be provided once received from RC's conveyancers and solicitors:[18]

The objection to be fully supported is awaiting further supporting information that has been requested from the appropraite [sic] conveyancers and solicitors. As the transfer of land documentaion [sic] for the properties listed in the attached notice are historical in nature ( over 5 years old ) the archive documents are still in the process of being obtained from our appropriate legal professionals.

We are lodging this objection in its current state as we do not want to delay the process, we will aim to provide you the balance of the information once it is received.

13 The enclosed letter to the email of 1 July 2023 provided the following 'summary of circumstances under investigation':[19]

- A total of nine properties are owned by the entity RC Land Management Pty Ltd as trustee for the Ross Property Trust and P Colleluori Property Trust.

- The State Revenue Office (SRO) has previously assessed two properties out of the nine on a 'land held in joint ownership' by the two entities listed above (Ross Property Trust and P Colleluori Property Trust). See Appendix B.

- We have strong reason to believe the SRO has made administrative errors regarding the historical Land Tax Assessment Notices issued to RC Land Management Pty Ltd as trustee for the Ross Property Trust and P Colleluori Property Trust.

- We are currently undertaking a further investigation to obtain the notice of trust acquisition documents that were originally submited [sic] to the SRO via mail at the time of land acquisition (transfer/purchase) from the conveyancer/s facilitating the land transfers.

14 On 9 November 2023, RC's objections to the Reassessment Notices were fully articulated in a letter prepared by Deloitte.[20] RC objected on the basis that the Commissioner incorrectly assessed the trustee on an aggregated basis rather than a separate, 50% assessment basis which, it is said, contradicted ss 46A(2) and 46G(3) of the Land Tax Act 2005 (the Act). That objection letter stated:[21]

The following aspects of the Assessments are specifically noted and are objected to on the grounds detailed below:

1. The Trust Assessments are issued to 'R C Land Management Pty Ltd' as trustee for the 'Ross Property Trust' and the 'P Colleluori Property Trust'. Assessment of a trustee on an aggregated basis for the lands subject to different trusts directly contradicts, amongst others, subsections 46A(2) and 46G(3) of the Act. On proper application of the relevant provisions of the Act, R. C. Land Management Pty Ltd should have been separately assessed on the whole of the land subject to the Ross Property Trust, being 50% interest in the Properties, and separately assessed on the whole of the land subject to the P. Colleluori Property Trust being the remaining 50% interest in the Properties.

The following name errors in the Trust Assessments are also noted, whereby 'R C Land Management Pty Ltd' should be correctly expressed as 'R. C. Land Management Pty Ltd' and 'P Colleluori Property Trust' as 'P. Colleluori Property Trust'.

1. The Trust Assessments impose a penalty tax at the rate of 20%. For the reason detailed below, the penalty tax should be remitted in full.
2. The Ross and Colleluori Assessments assess Louis Ross and Peter Colleluori, respectively, on all of the Properties by purportedly giving effect to the section 46F trust nominations discussed above. Pursuant to subsection 46G(2) of the Act, in addition to taxable lands they personally own, Louis Ross and Peter Colleluori, should only be assessed in respect of 240‑244 Hammond Road, Dandenong (Land ID 047079254) as it is the only 'pre‑2006 land' amongst the Properties.

15 On 26 September 2024, the Commissioner issued a Notice of Determination of the Appellant's objection, indicating the objection had been disallowed.[22] Whilst the Commissioner accepted that RC held the land in 'separate capacities of ownership', it maintained the view that 'two separate trusts' had been correctly assessed together as 'joint owners' under s 38(6) of the Act:[23]

[T]he Commissioner does not accept the interpretation of the LTA as described in the Objection in respect of the way land tax should be assessed in the present matter. Further to this, the Commissioner notes the following:

• The Company is a trustee in two separate trusts and holds the Lands in its capacity as trustee for each of these Trusts. Specifically, the Company as trustee for the Ross Property Trust holding a 50% share of the Lands, and the Company as trustee for the P. Colleluori Property Trust holding the remaining 50% share of the Lands. Therefore, while the Company holds the Land as sole registered proprietor on Title, it does so in separate capacities of ownership. As such, the Trust Reassessments were issued correctly, in accordance with subsections 38(6) and 46G of the LTA.
• Your interpretation of subsections 46A(1) and (2) of the LTA does not support the contention that the Trust Reassessments were issued incorrectly. The operation of these provisions go towards what rate of land tax should be assessed when land is held on trust. In this matter, as the Commissioner has accepted the appointment of a nominated beneficiary for each of the Trusts pursuant to section 46F of the LTA (detailed above), these provisions stipulate how land tax and what rates of land tax are applicable. In particular, trust surcharge rates do not apply pursuant to section 46A of the LTA for the Lands that were acquired pre‑2006 further to the Nominations lodged in respect to each of the Trusts, pursuant to section 46A(3)(b). Rather, section 46G(3) of the LTA is applicable which outlines that the trustee of the trust is to be assessed for land tax rather than the trustee in its individual capacity as the owner of land pursuant to subsection 10(1)(a) of the LTA.
• In respect to your interpretation of an extract on the SRO website in the Objection outlining that 'if you are the trustee of multiple trusts, you will receive a separate assessment for each trust unless the trusts have the same beneficiaries,' the Commissioner agrees that while correct, this does not encompass the present situation given that the Company is as acting as trustee for two separate trusts in different capacities for the same land ownership.
• Subsection 38(6) of LTA read together with section 46G(3) lends to how the lands should be assessed in this present situation (differing to the manner in which land is owned pursuant to subsection 10(1)(a) of the LTA) which includes two separate trustees for two separate trusts each holding their 50% share of the Lands irrespective that the two trustees are the same entity.

Contracts of sale and notifications of trust landholding

16 It is important here to set out what was recorded in the contracts of sale and notifications to the Commissioner of trust landholding upon the purchase of the Taxable Lands.

17 The contract of sale for Hammond Road records the purchaser as 'R. C. Land Management Pty Ltd and/or nominee'.[24] The 'Notification of lands held on trust' lodged with the Commissioner for the Ross Property Trust records that the relevant discretionary trust has a 50% share.[25] The type of trust recorded is a fixed trust. The 'Notice of lands held on trust' lodged with the Commissioner for the P. Colleluori Property Trust and the Ross Property Trust together records both trusts with the fixed trust option ticked.[26]

18 The contract of sale for 36 Sunline Drive records the purchaser as 'R. C. Land Management Pty Ltd' and, in addition, records the purchaser's trust as 'the Ross Property Trust and the P. Colleluori Property Trust'.[27] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding.[28]

19 The contract of sale for Produce Drive was not produced, however, the title search records the registered proprietor as 'R. C. Land Management Pty Ltd'.[29] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding.[30]

20 The contract of sale for 32 Sunline Drive records the purchaser as 'R. C. Land Management Pty Ltd'.[31] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding.[32]

21 The contract of sale for Radnor Drive records the purchaser as 'Rossiter Constructions Pty Ltd and/or nominee',[33] however, the title search records 'R C Land Management Pty Ltd' as the registered proprietor.[34] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding.[35]

22 No contract of sale was produced for 50 Brindley Street, however, the title search records 'R. C. Land Management Pty Ltd' as the registered proprietor.[36] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding, however, recorded the partnership ABN.[37]

23 No contract of sale was produced for 46 Brindley Street, however, the title search records 'R. C. Land Management Pty Ltd' as the registered proprietor.[38] A standard notice of acquisition form was lodged with the Commissioner, which did not record any trust landholding, however, recorded the partnership ABN.[39]

24 The contract of sale for Enterprise Drive records 'R. C. Land Management as Trustee for the Ross Property Trust and the Peter Colleluori Property Trust' as the purchaser.[40] No notice of acquisition was produced and it is understood by Mr Ross that none was lodged with the Commissioner.[41]

25 The land tax regime, particularly as it relates to this proceeding, is complex. The operation of that regime is set out below. At the outset, however, it is noted that the parties have agreed to rely upon version no. 72 of the Act in force as at 1 July 2022.[42]

26 In short compass, the Act imposes an annual land tax on all land held in Victoria, subject to certain exemptions.[43] The owner of the land is liable for the tax,[44] collected by an assessment issued by the Commissioner of State Revenue, or delegate of the Commissioner.[45] An 'owner' includes the registered proprietor, being 'a person entitled to land for a freehold estate in possession',[46] which includes a registered proprietor who holds land as trustee for a trust. An 'owner' also includes 'a person deemed by this Act to be the owner of land'.[47] Accordingly, the holders of beneficial interests in certain trusts are deemed to be owners by the trust provisions.[48]

27 The trust provisions were introduced at the commencement of the 2006 land tax year, in response to decisions such as CPT Custodian v Commissioner of State Revenue.[49] In CPT Custodian, the High Court considered whether the unitholders in that case were entitled to an estate of freehold in possession (and therefore were taxable as an 'owner' for the purposes of the 1958 Act). The Court held, unanimously, that the equitable interest of the unitholders in the land held by the trustee of a unit trust did not result in the unitholders being owners, as they were not holders of an estate of freehold in possession in the land held by the trustee of the unit trust. Accordingly, the unitholders were not assessable as an 'owner' of the land or any part thereof which was the subject of the unit trust. The 'only right of the unit holder' was a right to receive a proportionate share of the income of the trust fund for the year.[50] That right was not an entitlement to land for a freehold estate in possession of land. As a result of these circumstances, the current legislative regime deems a unitholder (among other beneficiaries) to own trust land in certain circumstances.

28 Section 36 of the Act provides that each land owner is assessable, at the applicable rate, on the aggregate value of all land owned at midnight on 31 December immediately preceding the tax year:

(1) Subject to this Act, a taxpayer is to be assessed for land tax on land for a tax year on the total taxable value of all taxable land of which the taxpayer was the owner at midnight on 31 December immediately preceding that tax year.

(3) For the purposes of an assessment, the applicable rate of land tax in Schedule 1 is to be applied to the total taxable value of that land.

29 The rates of land tax are set out in sch 1 of the Act.[51] It is not necessary to discuss in detail the differences in the rates, save to say the rates (including, relevantly, the general rate and the trust surcharge rate) are incremental and that the general rate and the trust surcharge rate are in fact identical at some levels of value. Relevantly here, for land worth in total between $1.8 million and $3 million, the two rates are different (the general rate being less than the trust surcharge rate), whereas for land worth over $3 million the rates are the same.[52]

30 Division 2A of Part 3 deals with trusts, and is titled 'Land held on trust'.

31 It is important here to note that s 3(1) provides the definition of a trust:

(a) includes a trust under which the assets of a deceased person are held by a personal representative; and

(b) does not include an implied or constructive trust, except where expressly provided by this Act.

(1) A person who is the owner of land as trustee of a trust is liable for land tax on the land at the applicable rate set out in Part 3 of Schedule 1 [i.e. the trust surcharge rate].

(2) 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.

(3) This section does not apply to -

(b) land subject to a discretionary trust if -

(i) an appointment of a nominated beneficiary for the trust is in force ...

(4) This section is subject to sections 46B and 46C.

33 Section 46A is the 'default' provision. Subsection (1) imposes the surcharge rate of land tax for trusts, which the later provisions modify in certain cases. And, more importantly for present purposes, subsection (2) states the key principle of the trust regime is that the trustee of the trust is to be assessed on land subject to the trust as if it were the only land owned by the trustee. This principle applies to any type of landholding trust.

34 There are six main trust types contemplated by the legislation. The following provisions address each type:

(a) section 46E deals with 'excluded trusts', including charitable trusts and complying superannuation funds;

(b) section 46E deals with 'administration trusts', which relate to deceased estates;

(c) section 46L deals with 'implied or constructive trusts'. This section provides for one assessment per implied or constructive trust except where the trustee acts for multiple implied or constructive trusts for the same beneficiaries;

(d) section 46A(2), or (if the unitholders are notified) s 46C(4)(b), deals with 'unit trust schemes'. A 'unit trust scheme' is defined in s 3(1) as:

unit trust scheme means an arrangement made for the purpose, or having the effect, of providing facilities for participation by a person, as a beneficiary under a trust, in any profit or income arising from the acquisition, holding, management or disposal of property under the trust, but does not include an excluded trust.

This definition must be read in conjunction with the definition in s 3(1) of 'unit' (as a 'unit trust scheme' contemplates that there be 'units'). Unit is defined in s 3(1) as:

unit in a unit trust scheme means -

(a) a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme; or

(b) a right to any such right or interest -

that entitles the beneficiary to participate proportionately with other unitholders in a distribution of the property of the trust on its vesting.

(e) section 46A(2), or (if there is a nominated beneficiary under s 46F) s 46G(3), deals with 'discretionary trusts'. A discretionary trust is defined in s 3(1) as:

a trust under which the vesting of the whole or any part of the trust property -

(a) is required to be determined by a person either in respect of the identity of the beneficiaries or the quantum of interest to be taken, or both; or

(b) will occur in the event that a discretion conferred under the trust is not exercised -

but does not include an excluded trust or unit trust scheme ...

(f) section 46A(2), or (if the beneficial interests are notified) s 46B(4)(b), deals with 'fixed trusts'. Fixed trusts are defined in s 3(1) as 'a trust that is not an excluded trust, a discretionary trust or a trust to which a unit trust scheme relates'.

35 While providing always for a separate assessment for each trust, the trust provisions set out a two‑level assessment process for fixed, unit and certain discretionary trusts in particular circumstances. For fixed trusts and unit trusts (dealt with by ss 46B and 46C, respectively), that process applies if the trustee notifies the Commissioner of the beneficial interests/unitholders. At the primary level (ss 46B(4)(b) and 46C(4)(b)), the trustee is assessed at the general rate (i.e. overriding s 46A(1)) and separately from any land owned in another capacity (i.e. repeating s 46A(2)). Then, at the secondary level (ss 46B(4)(a) and 46C(4)(a)), the beneficiaries/unitholders are assessed, at the general rate, on both the trust land and any other land that they might own, with a deduction to avoid double taxation. For discretionary trusts with land acquired before the introduction of the surcharge in 2006 (pre‑2006 land), a similar two‑level assessment process under s 46G is triggered by the nomination of a beneficiary under s 46F. Such a nomination also avoids the application of the trust surcharge in respect of the pre‑2006 land (s 46G(3)(a)). A nomination also means that s 46G(3) becomes (repeating s 46A(2)) the applicable provision providing for the separate assessment of the trust.

46C Land tax for unit trust scheme if unitholdings notified to Commissioner

(1) A trustee of a unit trust scheme to which land is subject may lodge with the Commissioner a written notice of the unitholdings in the scheme.

(2) A notice must be in the form, and contain the information, determined by the Commissioner.

(3) A notice takes effect for the tax year following the year in which the notice is lodged and remains in force until it is withdrawn by the trustee.

(3A) Despite subsection (1), if a trustee withdraws a notice that is in force under this section in respect of a unit trust scheme, the trustee cannot lodge another notice under this section in respect of that unit trust scheme.

(4) If a notice is in force under this section for a unit trust scheme -

(a) a unitholder in the scheme is deemed, for the purposes of this Act other than Division 1 of Part 4, to be the owner (but not to the exclusion of the trustee) of land subject to the scheme that bears the same proportion to the whole of the land subject to the scheme as the unitholder's unitholding in the scheme bears to the total unitholdings in the scheme, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the unitholder, at the applicable rate set out in Part 1 of Schedule 1; and

(b) the trustee of the scheme is to be assessed for land tax on the whole of the land subject to the scheme at the applicable rate set out in Part 1 of Schedule 1, as if the land were the only land owned by the trustee.

(5) There is to be deducted from the land tax payable by a unitholder under subsection (4)(a) an amount (if any) necessary to avoid double taxation ...

46F Nomination of beneficiary of pre-2006 discretionary trust for land tax purposes

(1) This section applies to a discretionary trust if the trust property includes any pre-2006 land.

(2) The trustee of the trust may nominate a person to be the nominated beneficiary of the trust for the purposes of this Act.

(3) The person nominated must be -

(a) a natural person who -

(i) is a beneficiary of the trust; and

(ii) is of or over the age of 18 years on 31 December 2005; and

(iii) signifies in writing his or her acceptance of the nomination; or

(b) the trustee, if all beneficiaries of the trust are under the age of 18 years on 31 December 2005.

(4) A nomination under subsection (2) must -

(a) be in the form, and contain the information, determined by the Commissioner; and

(b) be lodged with the Commissioner on or before the later of -

(i) 30 June 2006; or

(ii) 3 months after the day on which a liability first arises for land tax on land subject to the trust.

(5) A nomination lodged in accordance with subsection (4) -

(a) takes effect -

(i) for the 2006 tax year if made on or before 30 June 2006; or

(ii) in any other case, for the tax year in respect of which the nomination is lodged; and

(b) remains in force until -

(i) revoked by the nominated beneficiary in writing given to the Commissioner; or

(ii) the nominated beneficiary dies.

...

46G Land tax for discretionary trust with nominated beneficiary

(1) This section applies if the nomination of a nominated beneficiary for a discretionary trust is in force under section 46F.

(2) The nominated beneficiary is deemed, for the purposes of this Act (other than Division 1 of Part 4) but for no other purpose, to be the owner (but not to the exclusion of the trustee) of the pre‑2006 land subject to the trust, other than land for which a nomination under section 46H is in force, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the nominated beneficiary.

Note: The rate of land tax for this assessment is the applicable rate set out in Part 1 of Schedule 1.

(3) The trustee of the trust 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 -

(a) in respect of any pre-2006 land, other than land for which a nomination under section 46H is in force - at the applicable rate set out in Part 1 of Schedule 1; and

(b) in respect of any post-2006 land, other than land for which a nomination under section 46H is in force - at the applicable rate set out in Part 3 of Schedule 1.

(4) For the purposes of subsection (3), if the trust property includes both pre‑2006 land and post‑2006 land, the trustee is to be assessed in accordance with the following formula ...

(5) There is to be deducted from any land tax payable by the nominated beneficiary under subsection (2) any land tax payable by the trustee under subsection (3) in respect of pre‑2006 land.

38 Section 46J deals with a trustee's right of reimbursement in respect of land tax:

A trustee of a trust who pays any land tax assessed on land subject to the trust under Division 2A or 2AB is entitled to recoup the amount of the tax from any trust property that is subject to the trust or any like trust.

39 At the time the Appellant filed its written submissions, the State Revenue Office webpage titled 'Land tax and trusts' summarised these provisions in the following way:[53]

Land tax and trusts

Special rules apply to land held on trust.

...

We assess each trust that a trustee acts for separately and send them our assessment. If you are the trustee of multiple trusts, you will receive a separate assessment for each trust.

...

Land held on trust for a fixed, discretionary or unit trust is generally assessed at trust surcharge rates of land tax.

...

The trust surcharge rates are higher than general land tax rates and apply once the total value of the taxable land held by the trust is $25,000 or more. When the total value of the taxable land is $3,000,000 or more, there is no difference between the general and trust surcharge land tax rates.

If you tell us about the beneficiaries of the trust, we may assess the trust at general rates and may also assess the beneficiaries for their interest in the trust land in any individual assessments they receive.

...

Land acquired before 2006 and held by a trustee of a discretionary trust will be taxed at surcharge rates, unless there is a nominated beneficiary in place. If there is a nominated beneficiary in place, we consider both the nominated beneficiary and the trustee are owners of the trust land. We will assess the trustee and the nominated beneficiary in two stages ... All land acquired by a trustee of a discretionary trust after 31 December 2005 will be taxed at the trust surcharge rate.

...

Unit trusts are taxed at trust surcharge rates unless they choose to either: notify us of unitholders in the land, or nominate a single PPR beneficiary of trust land.

...

A trustee of a fixed trust has two options: notify us of beneficial interests in the land and pay land tax at general rates, or not notify us and pay the surcharge rate of land tax for the trust land.

...

A trustee of an excluded trust will be assessed on the trust land at the general land tax rates.

...

A trustee of an implied or constructive trust will be: separately assessed on trust land at the general land tax rates; assessed as if the trust land was the only land owned by the trustee. If the trustee holds land for more than one implied or constructive trusts with the same beneficiary or beneficiaries, we will assess the trustee as though all lands held under these trusts were held by a single trust.

40 The term 'joint owners' is defined in s 3(1) of the Act as follows:

(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.

41 A two-level assessment process also applies to joint owners, similar to that applying to trusts. At the primary level, joint owners are assessed together on their jointly owned land as if it were owned by a single person. Then, at the secondary level, each joint owner is assessed separately on their interest in the jointly owned land, together with any other taxable land they might own (whether alone or together with a different joint owner), with a deduction to avoid double taxation.

(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.

(2) Subject to subsections (2A) and (2B), joint owners of taxable land are to be jointly assessed for land tax on the land as if it were owned by a single person, without regard to -

(a) the separate interest of each joint owner; or

(b) any other land owned by any joint owner (either alone or jointly with someone else).

(3) In addition, each joint owner of taxable land is to be separately assessed for land tax on -

(a) the owner's individual interest in the land (as if the owner were the owner of a part of the land in proportion to that interest); and

(b) any other taxable land owned by the owner alone; and

(c) the owner's individual interest in any other taxable land.

(4) There is to be deducted from the land tax assessed for a joint owner under subsection (3) an amount (if any) necessary to avoid double taxation, ...

(6) If a joint owner of land is a trustee of a trust or an absentee trust to which the land is subject, no regard is to be had to the existence of the trust in relation to the joint assessment of the joint owners of the land as referred to in subsection (2), (2A) or (2B), but regard is to be had to the existence of the trust in relation to the separate assessment of the joint owners as referred to in subsection (3).

43 Section 38(2) deals with the primary level of the process, and s 38(3) deals with the secondary level. Section 38(6) (relied on by the Respondent) speaks to both levels, however, it applies only where s 38 is engaged; that is, only where there are 'joint owners'.

(a) the Appellant's Outline of Submissions filed on 9 September 2025;

(b) the Respondent's Outline of Submissions filed on 16 October 2025; and

(c) the Appellant's Reply Submissions filed on 5 November 2025.

45 The thrust of the Appellant's submissions was that, pursuant to s 46G(3) of the Act, the trustee of the trust(s) is to be assessed for land tax on the whole of the land subject to the Trusts as if the land were the only land owned by the trustee and, as such, each landholding trust (via its trustee) is to be assessed for land tax separately.[54]

(a) the Appellant is assessable (on an aggregated basis) as the trustee of an asserted third trust, being either a 'unit trust scheme' or, alternatively, a 'fixed trust', of which the two family trusts are said to be the equal unitholders or beneficiaries (the Third Trust Issue or Further Grounds 2 and 3). In this way, the posited unit/fixed trust is said to be a head trust and the two family trusts being sub‑trusts;[55]

(b) in the event this submission is rejected by the Court, the land was held by RC in its own right, or as trustee (Further Ground 1);[56] and

(c) in the alternative, RC, in its respective separate capacities as trustee of the Trusts, was correctly assessed as a 'joint owner', by the operation of s 38 of the Act. This case is only put if the Court rejects Further Grounds 1, 2 and 3 (the Joint Owner Issue).[57]

On the Respondent's case for Further Grounds 1, 2 and 3, the assessments are made under ss 36(1), (3) and 46A(1) and (2) of the Act. On the Respondent's alternative Joint Owner's case, the assessments are made under ss 36(1), (3), 38 and 46A(1) and (2) of the Act.

47 At a high level, the Appellant submits in response to these three grounds of opposition:

(a) Regarding the Third Trust Issue, the critical question is whether there is any such trust.[58]

(b) Regarding the Joint Owner Issue, s 38, headed 'Assessment of joint owners of land', provides that 'joint owners' of land are to be jointly assessed. On this issue, the critical question is whether there are any 'joint owners'.[59]

(c) Further Ground 1 is not entirely clear to the Appellant. The Appellant notes it seems to rely heavily on the aggregation provision in s 36 of the Act as supposedly overriding the trust provisions' mandate for the separate assessment of each trust, and/or to seek to challenge the underlying factual substratum that the Appellant acquired and held the relevant lands in its capacity as trustee of the two family trusts.[60]

48 The Appellant highlighted commentary from the SRO's website stating '[the Commissioner] assess[es] each trust that a trustee acts for separately and send them our assessment.'[61] The Appellant further emphasises this includes a case where a single company acts as trustee of two trusts, noting the SRO's website also states 'if you are the trustee of multiple trusts, you will receive a separate assessment for each trust'.[62]

49 Separately, the Appellant's case put is that the Court ought to approach the analysis by asking what equitable obligations and duties applied to RC, as trustee, holding the Taxable Lands at midnight on 31 December in each tax year.[63] The Appellant's position is that this doctrinal analysis ought to take place, rather than the 'invention' of a head trust.[64] The Appellant also sought to highlight that trustees do not have 'capacity' but rather are imposed with obligations, and equity imposes personal obligations.[65] It is emphasised by the Appellant that it is about duty, not capacity.[66]

50 The first duty is said to be RC's obligation to conform to the terms of the Trusts.[67] The Appellant relies on the High Court decision of Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ, in Youyang Pty Ltd v Minter Ellison Morris Fletcher,[68] where it was said by their Honours, 'perhaps the most important duty of a trustee is to obey the terms of the trust.' And further, 'the rigour of ... that it is the duty of a trustee to adhere to the terms of the trust in all things great and small, important, and seemingly unimportant.' [69] The relevant features of the terms which RC is obliged to observe are said by the Appellant to be that the trustee is granted power to appoint a net income of the trust fund and the power to appoint capital from the trust fund.[70]

51 The second duty is said to be the duty to keep trust property distinct and separate.[71] Here, the Appellant relies on the High Court decision in Associated Alloys Pty Limited v ACN 001 452 106 Pty Ltd,[72] where Gaudron, McHugh, Gummow and Hayne JJ said:

[T]here being a trust, it follows that equity imposes various obligations and duties on the trustee. One of these is the obligation to get in the trust property and keep it distinct from the property of the trustee and from property held on other trusts.

52 The Appellant submits the next question to address is then, what, in law, was the effect of RC holding the Taxable Lands in this way?[73] It is put by the Appellant that answering this question requires considering what equitable entitlements arose in the beneficiaries and the objects of the separate Trusts.[74] It is said this is determined by identifying what those objects and beneficiaries could compel the trustee to do.[75] The Appellant submits that the two Trusts could compel RC to hold the Taxable Lands as to half of the capital, and as to half of the income on the terms of the two discretionary trust settlements.[76] It is said the entitlements of the beneficiaries were not co‑extensive but, rather, they were defined economically as halves, or 50% interests, said to be a 50% moiety.[77]

53 It was further highlighted by the Appellant that should any of the Taxable Lands be sold, in the exercise of the trustee's powers under the deeds, the proceeds of sale would become, as to one half, trust monies of the Ross Property Trust, and as to the other half, trust monies of the Colleluori Property Trust.[78] It is identified by the Appellant that each half portion of the proceeds would then be rendered, subject to the terms of the relevant deeds themselves, including the power of appointment of income and capital, and to any other interests vested or contingent arising under the terms of the settlement.[79]

54 It is logical now to address the submissions on each of the Respondent's grounds of opposition.

55 The Respondent submits that the arrangement between Mr Ross, Mr Colleluori and RC made in 2003, or thereafter when RC commenced and continued to acquire property in Victoria as trustee of the two family discretionary trusts, was to share equally in the profits from the acquisition and management of property by RC and to contribute equally to the capital required for that purpose.[80] That the arrangement also involved sharing equally in the net profits and assets by reason of the manner in which 'partners' funds' were calculated and distributed in each year since 2005.[81]

56 The Respondent's position is that a 'unit trust scheme' is defined in the Act in very broad terms, which requires an 'arrangement' that is broader than an agreement.[82] It is said an 'arrangement' is 'something in the nature of an understanding between two or more persons - a plan arranged between them which may not be enforceable at law'.[83] Further, the definition includes an arrangement for the 'purpose' or having 'the effect' of providing facilities for participation by a person 'under a trust' in any profit or income arising from 'property under the trust'.[84]

57 The definition of 'unit' in the Act is also said to be broad. Notably, it is said a 'unit' does not have to be described as such - it simply requires 'a right or interest', whether described as a 'unit or sub‑unit, or otherwise'.[85] Further, it is a 'right or interest' or a 'right to any such right or interest' under 'the scheme'. It is said that it follows that a unit in a unit trust scheme is likewise not limited to a legal or enforceable right or interest but, rather, is to be assessed in the context of the purpose or effect of the arrangement constituting the scheme.[86]

58 The Respondent submits that the arrangement includes the following elements:[87]

(a) RC was to be incorporated in order to become trustee of the Trusts, and, in that capacity, to then acquire, from time to time, investment and rental properties, including the taxable lands which were to be held on trust.

(b) The properties were acquired by RC as the sole registered proprietor on behalf of both of the trusts together, and not in separate capacities for each trust. This is said to be clear from the financial statements of RC (which do not reflect any separate ownership on behalf of each trust); the notices of acquisition (which refer only to RC); and the fact that the Taxable Lands were put up as security for loans in respect of which RC was liable on its own behalf as well as trustee for the Trusts. Further, RC held a proprietary right of indemnity against all of the assets acquired by it as trustee of the Trusts for all of the liabilities incurred by it as trustee.

(c) The Trusts were to share equally in any net profit, income and net assets arising from the acquisition, holding, management or disposal of property purchased by RC. They were likewise to contribute equally to the funds required from time to time to supplement funds borrowed from third parties for the purposes of the scheme. This is said to be reflected in the financial statements for the alleged head trust and, separately, for each of the family discretionary trusts.

59 It is put by the Respondent that this arrangement is captured by the Act's definition of 'unit trust scheme', which plainly includes any profit‑making or income‑earning scheme involving property held on trust which confers a right or an interest on a beneficiary to participate with any other beneficiary in a distribution of the property of the trust on its vesting.[88]

60 The Respondent says the Act does not require that the unit trust scheme be evidenced by a unit trust deed. Rather, it was open to RC, Mr Colleluori and Mr Ross to adopt any lawful structure for the purposes of their business venture, but they are subject to the legal consequences of the structure.[89] The Respondent submits that the legal consequences of the structure adopted by RC, its directors and shareholders, are such that the arrangement involves three trusts - a head trust and the two family discretionary trusts. The Respondent says the arrangement operates in the following way:[90]

The head trust is the subject of the unit trust scheme pursuant to which RC, as trustee for the Trusts, purchased and became registered proprietor of an estate in fee simple in the Taxable Lands and therefore became entitled to a freehold estate in possession of the whole of those lands once each purchase was completed. In this context, RC was, therefore, an 'owner' for the purposes of sub‑s 10(1)(a) of the Act (i.e. it was the 'owner' of the taxable lands as trustee under the head trust) and was assessable to land tax on its aggregated landholding of the taxable lands at the trust surcharge rate pursuant to ss 36(1), 36(3) and ss 46A(1) and (2) of the Act as no notice was given under s 46C.

As to the two family discretionary trusts, RC entered into leases of the Taxable Lands, which resulted in income and profits for RC, as the trustee under the purported unit trust scheme. Pursuant to that scheme, the trustee of the two family discretionary trusts (each of which was RC) was entitled as the unit holder to the benefit and distribution of net profit from the 'units' held by RC separately for each of the Trusts. Half of those 'units' were held for the Ross Property Trust, and the other half were held for the P. Colleluori Property Trust.

It also follows that the trustee of each of the family discretionary trusts was a unit holder under the purported unit trust scheme, as the trustee of each trust was equally entitled as the beneficiary to one half of the distribution of the net property of the head trust from time to time (as appears in the annual financial statements) and therefore on its vesting.

61 The Appellant, however, submits the Respondent has 'flirted' with the idea that there does not need to be a trust within normal equitable principles for there to be a statutory 'unit trust scheme'.[91] However, it submits that this is without merit, because the statutory definition expressly requires there to be 'a beneficiary under a trust' (or, in the case of a 'fixed trust', 'a trust').[92] It is said by the Appellant, with reference to that definition of 'unit trust scheme', the 'arrangement' that Mr Ross and Mr Colleluori made in 2003 for the two Trusts to participate equally in any profits from the acquisition and management of property was for those trusts to participate as income tax partners, not as beneficiaries under a third trust (unit or fixed).[93] Further, it is said that this is why there is no unit trust deed, and no evidence of any conversations creating a unit trust orally.[94] The Appellant highlights that partnership tax returns were lodged, not unit (or fixed) trust tax returns.[95]

62 The Appellant submits that a unit trust could have been established as a head trust for the two family trusts, which is like the structure identified by the Respondent in David & Ros Carr Holdings Pty Ltd v Ritossa,[96] however, it is said that this is not what occurred. In that case, two families agreed to invest in property together using a unit trust structure. A unit trust was established; a company was incorporated to act as trustee; and each of the families held 50% of the units in the trust.

63 The Appellant submits that a 'unit trust scheme', being like a 'fixed trust' and 'discretionary trust', is a species of express trust rather than an 'implied or constructive trust', and cannot be created without a 'clear intention' to do so (referred to as 'certainty of intention').[97] Rather, it is said, there was a clear intention to create two discretionary family trusts as equal 'partners', but no intention manifested to complicate that structure with an unwritten, 'unenforceable', 'unintended' and 'unnecessary' third or 'head' trust.[98]

64 The Respondent further submits that the Appellant's position that RC is an owner of the taxable lands, separately as to a 50% share in respect of each discretionary family trust, is inconsistent with RC's right of indemnity and exoneration in respect of the debts it lawfully incurred as trustee of the head trust. The well‑established right is in relation to the assets held by RC as trustee of the head trust and not a separate right as to 50% of those assets in relation to the family discretionary trusts, which did not hold those assets as separate assets of each of those Trusts. The Respondent advanced the following submissions in support of this position:[99]

RC has a right of indemnity and exoneration out of the assets of the head trust in respect of the substantial liabilities incurred by it as trustee of that trust.

A trustee with a right of indemnity is entitled to retain trust assets as against the beneficiaries. That right of indemnity confers a proprietary interest in the trust assets (i.e. the property held by the trustee on trust).

That interest applies to the whole range of assets in the trustee's possession. In other words, RC's proprietary interest extends to 100% of the Taxable Lands held by it as trustee of the head trust. And could be discharged, for example, by the sale of one or more of the properties held by RC. The interest is not a right or interest arising separately only as to one half of those assets, as the debts and liabilities were incurred by RC as trustee under the head trust and relate to the whole of that trust's assets.

Accordingly, neither RC, in its capacity as trustee of the Ross Property Trust, nor RC in its capacity as trustee of the P. Colleluori Property Trust, is an 'owner' of the Taxable Lands for the purposes of the Act.

65 Further Ground 3 only arises if Further Ground 2 (that there is a unit trust scheme) fails. Further Ground 3 is based on the existence of a head trust not being a trust to which a unit trust scheme relates or a discretionary trust.[100]

66 The Respondent says that the requirement in s 46B of the Act accords with the characterisation of a fixed trust - as opposed to a discretionary trust - in the decision of Gummow J in Federal Commissioner of Taxation v Vegners:[101]

A fixed trust is used to describe a species of express trust where all the beneficiaries are ascertainable and their beneficial interest[s] are fixed, there being no discretion in the trustee or any other person to vary the group of beneficiaries or the quantum of their interests.

67 It is said by the Respondent that, in light of the distributions made by RC to the Trusts from 2005 onwards, the characterisation of the trust is more akin to a fixed trust.[102] The Respondent highlights, regarding the landholding of Hammond Road, that RC notified the SRO of the fixed trust interest under s 46B.[103]

68 In opposition, the Appellant submits there is no evidence or basis for a finding of any unit trust scheme or fixed trust, or a head trust.[104] It makes this submission for the following reasons:[105]

(a) The decision in CPT Custodian concerned whether a unitholder under a 'unit trust scheme' was an 'owner' of the land registered to the trustee (under the land tax legislation as it was before the introduction of the trust provisions), and does not speak to the existence of a unit trust scheme.

(b) The 'financial reports' and 'income tax records' cited are for the income tax partnership, and they appropriately aggregate the land of the two family trusts as 'partners', but have no bearing for present purposes.

(c) The 'written representation to the Commissioner as to the existence of a "fixed trust"' is (as the Respondent has clarified[106]) a reference to the two trust notification forms lodged in 2006.

(d) The contract of sale for Enterprise Drive records the purchaser as 'R.C. Land Management as trustee for the Ross Property Trust and the Peter Colleluori Property Trust', describing the two Trusts, not a single unit or fixed trust.

69 The Appellant submits that a person (here, RC as both the putative trustee and unitholder/beneficiary) cannot hold property on trust for itself alone.[107] The Appellant submits, in my view, correctly, that the reason for this goes to the fundamental nature of a trust, being a fiduciary obligation of a person (the trustee), annexed to property, to act for the benefit of another person (the beneficiary).[108] The Appellant put it simply: an unknown party cannot owe duties to an unknown party.[109] It is said that where there is a 'merger' where 'the same' or 'equal and co‑extensive' legal and equitable estates unite in the one person, this is just another way of saying that 'a person cannot be trustee for himself'.[110]

70 Overarchingly, the Appellant submits that this principle, made clear in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW),[111] is necessarily described as 'fundamental', being something that 'cannot be disputed', as well as 'fundamental and uncontroversial',[112] that the holder of an estate in fee simple had 'the whole right of property in the land' or 'a single entire interest', rather than 'two separate interests', one legal and one equitable, and so 'cannot be a trustee of that fee simple for himself'.[113] In DKLR,[114] it was submitted that:

29 Macquarie was the beneficial owner of the land both before and after the assumed conveyance. No duty is payable on the transfer because the property carried by it, the bare legal estate, is of no value.

Aickin J (with whom Gibbs CJ and Brennan J agreed) rejected this argument, stating:[115]

In my opinion this argument is based upon a fundamental misconception as to the nature of legal and equitable interests in land or other property. If one person has both the legal estate and the entire beneficial interest in the land he holds an entire and unqualified legal interest and not two separate interests, one legal and the other equitable. If he first holds the legal estate upon trust for some other person and thereafter that other person transfers to him the entire equitable interest, then again the first‑named person does not hold two separate interests, one the legal and the other the equitable estate; he holds a single entire interest - he is the absolute owner of an estate in fee simple in the land. The equitable interest merges into the legal estate to comprise a single absolute interest in the land. It is a fundamental principle of both the common law and of equity that the holder of an estate in fee simple cannot be a trustee of that fee simple for himself for what he holds is a single estate, being the largest estate in land known to the law.

71 Further, the Appellant submits that one trust cannot create another. The capacity of the purported beneficiary is said to be immaterial.[116] The Appellant highlights the position contemplated in Adamstoun Holdings Pty Ltd v Brogue Tableau Pty Ltd,[117] in which it was said 'where T purports to hold on trust for T who holds on a purported sub‑trust for B, there should be only one trust under which T holds for B.' Similarly, the Appellant argues that the point cannot turn on the type or nature of the purported trust (whether it be a bare trust, discretionary trust, or in between), or on anything to do with the right of a trustee to reimbursement or exoneration for the discharge of liabilities incurred in the administration of a trust (such a right of indemnity being but a consequence or aspect of a valid trust).[118] It is said that neither Gibbs, Aickin nor Brennan JJ qualified their statements of principle in DKLR in any of these ways (or in any other relevant way).[119]

72 The Appellant's position is that the decision of CPT Custodian determined it is wrong to say that whenever there is a trust over land, there must be a beneficiary with beneficial ownership of the land, not that it is wrong to say that whenever there is a trust over land, there must be at least two persons involved.[120]

73 Further, the Appellant submits, in response to 'the clear and longstanding concern of Courts of Equity to safeguard and preserve trusts in spite of shortcomings or difficulties with respect to trustees', [121] that, as at midnight 31 December immediately preceding each land tax year in question, no Court of Equity had ordered or appointed a (new) trustee or 'take[n] upon [itself] the due execution of the trust'.[122]

74 Whilst the Respondent accepts that a trustee cannot be the sole beneficiary where the trustee, as trustee, and beneficiary hold 'the same estate in equity and law', it submits that this is not the case regarding the purported unit trust scheme or fixed trust.[123] The Respondent highlights that this 'restriction' on, or exception to, the operation of the 'general rule' was stated by Lord Alvanley, in 1796, in Brydges v Brydges,[124] where his Lordship said:

[A]nd when I am told that legal and equitable estates cannot subsist in the same person, it must be understood always with this restriction; that it is the same estate in equity and at law.

75 In a later decision of Lord Alvanley, in 1797, in Selby v Alston,[125] Lord Alvanley said that where a person has an 'equal, co‑extensive, estate at law and in equity, the legal shall prevail' and that 'where the estates unite, the equitable must merge in the legal'. In Re Selous,[126] Farwell J described the 'rule in Selby v Alston' by stating the 'legal will prevail, the equitable is totally gone for the purpose of being acted upon by any person in this Court',[127] and applied this to support the conclusion that 'two or more persons cannot be trustees for themselves for an estate co‑extensive with their legal estate'.[128] Farwell J also considered whether the difference in interest between a tenancy in common and a joint tenancy 'raised any presumption against merger', and found such a 'difference in interest' to be 'small and shadowy', and thus, not 'sufficient to raise that presumption'.[129] It is therefore said by the Respondent that where the legal and equitable estates are not co‑extensive, there exists a presumption against merger, in which case the 'general rule' prohibiting a trustee from being the sole beneficiary does not apply. The Appellant submits, however, the arrangement in place is not an equitable tenancy in common.[130] This does not appear to be in contention.

76 The 'general rule' (as set out in Selby v Alston, for the merger of legal and equitable interest) was applied by the High Court of Australia in DKLR.[131] The observations of Aickin J in DKLR were affirmed by the High Court in Peldan v Anderson,[132] where Gummow A‑CJ, Kirby, Hayne, Callinan and Crennan JJ said 'where the whole legal and beneficial interest in property is united in one owner, there is no separate beneficial interest in existence'.

77 It is said by the Respondent that the 'general rule' 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'.[133] And it is said the inverse of this also applies; that if no co‑extensive interest exists, there is a 'presumption against merger'.[134] It is put by the Respondent that the latter applies in the circumstances of the purported unit trust scheme in which there can be no merger.[135] The Respondent advanced this proposition for two reasons.

78 First, because 'for the specific purposes of merger, ownership of all the units in a unit trust cannot be assumed to amount to equitable ownership of the trust assets'.[136] It is said by the Respondent that RC, as trustee of the head trust, was the owner of the Taxable Lands at the relevant time, being the person who had the present right of enjoyment in possession of all of the taxable lands, including its fruits, on 31 December of each preceding land tax year in question. However, it is said that the equitable interest in the Land Held by RC, as unitholder, was not an estate of freehold in possession in the Taxable Lands. It is submitted that, like in CPT Custodian, the 'only right of the unit holder' was a right to receive a proportionate share of the income of the fund for the year.[137] Accordingly, the Respondent submits that, because the legal and equitable rights are not co‑extensive, there is a presumption against merger and the exception to the general rule (that a trustee cannot be the sole beneficiary) applies.[138]

79 Second, the Respondent submits that even if the Court finds the requirements of co‑extensive interest were met, there is no merger where a trustee acquires an equitable interest under the particular trust in its capacity as a trustee of a different trust.[139] It is put by the Respondent that the Taxable Lands are held by RC as trustee for the benefit of the ultimate beneficiaries named on the schedules to each of the Ross Property Trust deed and the P. Colleluori Property Trust deed. Accordingly, it is said, RC holding property under the head trust for the purposes of the unit trust scheme 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 long as it is not the only one.[140]

80 In response, the Appellant submits that these contentions are based on a false premise or starting point: that the Appellant's point is about the doctrine of 'merger' of legal and equitable estates.[141] The Appellant highlights that this is not a case about a lesser legal estate merging in a greater legal estate, or a lesser equitable estate merging in a greater equitable estate.[142] Further, it is not a case about whether an established trust between multiple people disappeared after someone died, inherited or made an assignment, leaving only one person.[143] The Appellant submits that the doctrine of merger does not speak to whether a person can create a trust for themselves.[144] The Appellant highlights that this is explained in the text of Meagher, Gummow and Lehane's Equity: Doctrines and Remedies,[145] which is relied upon by the Respondent, however, not this specific section:

From the fact that a trustee may acquire the entire beneficial interest in the trust assets without effecting a merger, it does not follow that an absolute owner of property can become trustee of that property for himself or herself. ... [I]t is necessary to emphasise the distinctness of the rules concerning ... the creation of trusts and the rules of merger ... An attempt to make oneself trustee of property for oneself will fail to create a trust.

It is said that the distinctness of the rules of merger arises 'probably' from equity's concern to preserve existing trusts.[146]

Further Ground 1 - Land held by RC in its own right

81 Further Ground 1 is relied upon by the Respondent, in the event that the general rule, that a trustee cannot be the sole beneficiary, applies in the circumstances of this case. Further Ground 1 is that the land was held by RC in its own right, or as trustee.

82 The Respondent submits that there are two consequences if the general rule is to apply. The first consequence, it submits, is that the Taxable Lands were owned by RC in its own right.[147] It is said by the Respondent that in this situation, the legal ownership of the Taxable Lands is held by RC and would be taxed under sub‑s 36(1) and (3) of the Act on its aggregate holding at the general rate, rather than at the surcharge rate.[148] The Respondent submits that RC's holding would, however, be subject to its equitable duties to the beneficiaries of the Trusts to protect their rights to their trust sharing in the net profits and assets equally, but those rights would not give them an equitable estate in the assets held by RC in its own right.[149]

83 The second consequence is said to be that RC held the Taxable Lands on trust, not for itself as beneficiary but for the beneficiaries of the Trusts.[150] The Respondent submits that, being a term of that trust, or alternatively a duty imposed by equity, RC administer that trust for the benefit of the general beneficiaries and on a basis of a division between the two families consistent with the terms of the Trusts.[151] It is put by the Respondent that this alternative avoids the Appellant's case of separate ownership of the taxable lands as to a one half share in each of the Trusts, which results in the assessment to liability at the trust surcharge rate.[152]

84 At the outset, the Appellant highlights that the Respondent accepts, in its written submissions,[153] that RC held all eight parcels of land as trustee.[154] Notwithstanding this, the Appellant makes six submissions regarding Further Ground 1.[155]

85 First, the ground is put on the basis that there is no head trust (i.e. contrary to Further Grounds 2 and 3). Second, the ground contemplates that the Appellant owned the relevant land 'in its own right'; the evidence of Mr Ross, and the documentary evidence, weigh decisively against this conclusion.

86 Third, the ground contemplates that the Appellant owned the relevant land 'as trustee of the Ross Property Trust and of the P. Colleluori Property Trust' and, as such, was 'liable for land tax imposed under s 36 of the Land Tax Act ... as it was the person entitled to that land for a freehold estate in possession', to which the Appellant agrees. However, it submits that s 46G applies, not s 46A, because relevant trust nominations were in force. Further, s 46G(3) provides that the 'trustee of the trust 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'. As the land is held on two separate trusts, there must be two separate assessments by reference to the land interests subject to each trust.

87 Fourth, in respect of the applicable rate of land tax, because s 46G(3) applies in place of s 46A(1), by virtue of s 46A(3)(b)(i) and the 'nominated beneficiary' nominations that were in force under s 46F, it is s 46G(3) (not s 46A) that states the applicable rate (which is partly the surcharge rate and partly the general rate).

88 The Respondent, however, submits, in response to the third and fourth points, s 46A does not apply to land subject to a discretionary trust if an appointment of a nominated beneficiary for the trust is in force.[156] It is said that the nominations of beneficiaries relied upon were only validly made if the 'property of the trust' included any pre‑2006 land.[157] The Respondent's position is that RC being the 'owner' of the pre‑2006 taxable lands (Hammond Road) as to a separate half interest for each discretionary trust is a prerequisite for the validity of those nominations.[158] The Respondent maintains that RC did not hold the Taxable Lands as to a separate half interest for each trust.[159] Accordingly, the Respondent submits that the nominations of beneficiary relied upon were not relevantly 'in force', and, to the extent the Taxable Lands were held on trust, s 46A applies.[160] The Respondent's position is that, as a consequence of the application of ss 36 and 46A, the Taxable Lands held by RC are to be aggregated as a whole (rather than as two 50% shares) for the purposes of its assessment of land tax liability.[161] This position does not rely upon an argument that s 36 'overrides' s 46A.[162] The Respondent further highlights that the Commissioner previously accepted the nominations of Mr Ross and Mr Colleluori and the assessments to them as deemed owners.[163] The Respondent's position is that those assessments were not validly made in accordance with the Act, because the subject of those nominations was not land which was the property of, or owned by, RC separately in its capacity as to one half interest in the land as trustee for each trust.[164]

89 Fifth, while the ground asserts that the consequence of its acceptance is that the aggregated assessments in question must be 'confirmed', it does not articulate why that consequence is said to follow. Instead, it is said by the Respondent that the Appellant was the owner of the land and that the trust surcharge rate applies. It is said that the ground does not explicitly address the real issue in this case, that is, aggregation.

90 Sixth, if and insofar as the ground argues that s 36 overrides the provision repeated throughout the trust regime 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', that argument should be rejected. It is said, on the explicit terms of the Act, the proper construction is the other way around: s 36 is 'subject to' the Act, including the trust provisions (including s 46G(3)) which provide for one assessment for each trust.

91 It is further highlighted by the Appellant that the Respondent accepts RC's landholding was 'of course' subject to its equitable duties to the beneficiaries of the Trusts, which is said to deny that RC held the land absolutely or 'in its own right'.[165]

92 This ground only arises if Further Grounds 1, 2 or 3 are not accepted. The Respondent's position is that the reasons of the delegate who issued the assessments set out (correctly) that the assessments were made under s 38 of the Act.[166] That is, that each parcel of land was, as stated on the first page of each assessment notice, 'land held in joint ownership'.[167]

93 The Respondent submits that RC can act as two 'persons' in each of those separate capacities. And that those persons own the taxable land, not as partners, but 'otherwise' for the purposes of the definition of 'joint owners'.

94 This position put by the Respondent, is said to be analogous to s 960‑100(3) of the Income Tax Assessment Act 1997 (Cth):[168]

(3) A legal person can have a number of different capacities in which the person does things. In each of those capacities, the person is taken to be a different entity.

Example:

In addition to his or her personal capacity, an individual may be:

• sole trustee of one or more trusts; and

• one of a number of trustees of a further trust.

In his or her personal capacity, he or she is one entity. As trustee of each trust, he or she is a different entity. The trustees of the further trust are a different entity again, of which the individual is a member.

95 The Respondent submits that the Commissioner's construction of s 38 is consistent with the Act's legislative purpose. It is said that the aggregation of land is a critical aspect of the imposition of land tax because it is an incremental tax.[169] It is further said that the purpose of the 2005 amendments to the Act, introducing the new trust provisions, was directed towards ensuring trust property could be aggregated so as to prevent the misapplication of the trust provisions.[170] If separate trustees were appointed to each of the Trusts, s 38 would apply.[171] It is said that, to use a common trustee that avoids that application is a triumph of form over substance, involving an interpretation that should not be preferred.[172]

96 The Appellant submits in response that within the Act there is not a provision like s 960‑100(3) of the Income Tax Assessment Act 1997 (Cth) that would achieve the result which the Respondent contends.[173] It is said that the result cannot be achieved by any legitimate process of interpretation of the terms of the statute, as presently enacted.[174]

97 The Respondent further submits that if the Commissioner's construction of the definition of joint owners is not accepted, an aggregation under s 38 can be avoided by the use of a common trustee of multiple trusts purchasing land, which is contrary to the context and purpose of the Act.[175]

98 The Appellant submits that this is the incorrect construction of the legislative regime. It is put by the Appellant that, as it is stated in s 38, a 'joint owner' is a 'person'.[176] The Appellant, however, emphasises that:

(a) a trust is not a person - rather, it is a relationship or obligation;[177] and

(b) there is no applicable provision that deems a trust to be a person (or a joint owner), or that deems a trustee of two trusts to be two persons (or two joint owners).[178]

On this basis, the Appellant submits that it follows that the Trusts cannot be 'joint owners'.

99 It is said by the Appellant that, contrary to the delegate's reasoning, the fact that 'the two trustees are the same entity' is critical, because it means that there is a single entity or person (as trustee), rather than two joint owners.[179] It is said that, accordingly, contrary to the premise for the assessments (s 38 of the Act, including sub‑s (6)), cannot apply to support the assessment of the two trusts together 'as if the land were owned by a single person'.[180]

100 The Appellant highlights that the Respondent accepts that RC purchased and held all eight parcels of land in the same capacity as was disclosed on two of the contracts of sale for Enterprise Drive and 36 Sunline Drive,[181] being as trustee of the Trusts. The Appellant says it follows that it is common ground that RC did not hold any land absolutely (i.e. for its own benefit).[182]

101 It follows, the Appellant submits, that the Respondent's primary position, that the Appellant owned the land as trustee of a unit trust, is 'not inconsistent' with the descriptions of the Appellant's capacity expressed in the contracts of sale for Enterprise Drive and 36 Sunline Drive.[183] It is said by the Appellant that if there had been a unit trust, the purchaser would have been described instead in those contracts as R.C. Land Management Pty Ltd as trustee of the 'R.C. Unit Trust' (or whatever other name the parties had decided to give the unit trust).[184] Accordingly, the Appellant's position is that the descriptions on those contracts are consistent only with the Appellant's case.[185] It is highlighted by the Appellant that there is no reference to any unit trust in any document.[186]

102 The Respondent argues that the notices of acquisition lodged by the Appellant's conveyancers, which did not record the Appellant's capacity (despite two notices citing the partnership's ABN), support the Respondent's case.[187]

103 The Appellant submits that this contention is misplaced.[188] The Appellant concedes that the notices of acquisition do not 'make clear' that the Appellant was acting on behalf of 'both' family trusts 'together', whether under a unit trust, fixed trust or otherwise.[189] However, it is highlighted that they do not refer to any unit or fixed trust, nor do they refer to the Trusts.[190] Rather, they do not refer to any trust at all. It is said, despite that omission, that it is common ground that the Appellant did not hold the Land absolutely.[191]

104 The Appellant further highlights that the 'Notification of lands held on trust' lodged with the Commissioner for Hammond Road and the Ross Property Trust records that the relevant discretionary trust has a 50% share.[192] It is further noted by the Appellant that the person submitting the form is required to tick an option for either a fixed trust, unit trust, discretionary trust or an excluded trust. It is highlighted that the box ticked, erroneously, is a fixed trust.[193] It is said by the Appellant that because the discretionary trust deeds exist, nothing turns on the notices submitted with the Commissioner.[194]

105 It is further noted that in the 'Notice of lands held on trust' lodged with the Commissioner for Hammond Road for the P. Colleluori Property Trust and the Ross Property Trust, both Trusts are recorded again with the fixed trust option ticked.[195] It is said by the Appellant that these errors are innocuous, but pertinent as to the 50% references.[196] In contrast, the Respondent says the way the form is completed is 'problematic'.[197] The Appellant submits further that it is true that the Ross Property Trust was wrongly described on that form as a 'fixed' trust, but that is no basis to ignore or dismiss the form in its entirety.[198] It is said the form was prepared well before the present land tax issue arose, and constitutes contemporaneous evidence of the Appellant's chosen two-trust landholding structure.[199]

106 The Respondent relies on loan facility letters referring to the Appellant entering into loans, for which the taxable lands were security, 'in its own capacity' as well as in its capacity as trustee for each family trust.[200] This is said, by the Respondent, to support the existence of an additional trust (the alleged unit trust).[201] The Appellant's position is that the contention is difficult to comprehend. It is said that the banks' references to 'in its own capacity' are standard wording intended to cover any assets owned by the borrower absolutely, and to prevent a trustee from asserting any limitation of personal liability.[202] The Appellant submits that the language in no way suggests a third trust, and the express references in the letters to the Trusts (and no other trust) support the position that the Appellant was acting as trustee of those trusts (and no other).[203]

107 The Appellant highlights that the bank accounts, cheques and invoices for rent were all expressly in the name of the Appellant as trustee for the Trusts (not as trustee of any unit trust).[204]

108 The Respondent submits that the financial statements support the Commissioner's characterisation of the arrangement of a unit trust scheme or a fixed trust, with RC acquiring the Taxable Lands as head trustee.[205] The Respondent submits that the Appellant's position that the financial information has no bearing for present purposes should not be accepted.[206] It says that, although the financial information was prepared as 'partnership' returns, they were required to be prepared in a manner that accurately reflected ownership of and dealings with the taxable lands, and the separate capacities now asserted by the Appellant find no support in the statements.[207]

109 The Respondent highlights that the financial statements of the Trusts reflect that the only interest in each of the trusts was to a share of net profits, which does not support the separate ownership interests asserted.[208]

110 The Respondent places heavy reliance on financial statements and tax returns prepared both for the income tax partnership and the Trusts as partners.[209] The Respondent's position is that the accounting documents deny that half the Appellant's land was held subject to the terms of one family trust and as to the other half was subject to the other family trust, and to show, instead, that the Appellant owned the land as trustee of a unit trust for the family 'trusts' as unitholders (or under a fixed trust).[210]

111 The Appellant rejects this contention and says the accounting documents are inconsistent with the Respondent's case, not the Appellant's.[211] It is said the documents are entirely as one would expect to see for an income tax partnership, which is not a unit trust.[212] The Appellant highlights that partnership tax returns were required to be, and were, lodged for the partnership 'entity' that had been registered with an ABN.[213] It is said that in each partnership return (and in each related profit and loss statement and balance sheet), the land and the rental income derived from it was appropriately recorded on an aggregate basis, as partnership property/income.[214] The Appellant emphasises that it does not speak to the equitable ownership of the land.[215]

112 Similarly, it is put by the Appellant that in the tax return of each 'partner', the total partnership asset and income figures were simply divided by two and filled out accordingly by the accountant in the relevant asset and income boxes, which is all that the accountant needed to do for income tax purposes.[216] In contrast, it is said, under the Respondent's postulated unit trust, each family trust would be shown as owning units (instead of half of the total assets), losses would be carried forward (not shared by the partners).[217] That is, the accounting treatment would be materially different.[218] The Appellant highlights that it is common ground that there was no such general law partnership.[219]

113 It is said by the Appellant, overarchingly, that the accounting documents contradict the existence of a unit trust (or fixed trust), but do not deny that the land was trust property of the Trusts.[220]

114 The Appellant correctly highlights the approach the Court ought to take in determining the issues in the proceedings, referring to CPT Custodian where their Honours identified a two-stage process:[221]

Statutory construction and the general law

Something now should be said respecting the task of statutory construction which was presented to Nettle J and then to the Court of Appeal. There were two steps to be taken. They were correctly identified in the submissions by the taxpayers to the Court of Appeal. The first step was to ascertain the terms of the trusts upon which the relevant lands were held. The second was to construe the statutory definition to ascertain whether the rights of the taxpayers under those trusts fell within that definition.

In taking those steps, a priori assumptions as to the nature of unit trusts under the general law and principles of equity would not assist and would be apt to mislead. All depends, as Tamberlin and Hely JJ put it in Kent v SS 'Maria Luisa' [No 2], upon the terms of the particular trust. The term 'unit trust' is the subject of much exegesis by commentators. However, 'unit trust', like 'discretionary trust', in the absence of an applicable statutory definition, does not have a constant, fixed normative meaning which can dictate the application to particular facts of the definition in s 3(a) of the Act.

115 Their Honours, in CPT Custodian,[222] went on to say 'what is at stake here is the operation of statutory criteria upon general law concepts of equitable ownership.'

116 This approach was also adopted by the High Court in Elecnet (Aust) Pty Ltd (as trustee for Electrical Industry Severance Scheme) v Commissioner of Taxation of Commonwealth of Australia,[223] where Kiefel, Gageler, Keane, Nettle and Gordon JJ first construed the trust deed, identifying rights and interests at general law and then applied the statutory framework.

117 Similarly, Leeming JA, in Common Law, Equity and Statute: A Complex Entangled System,[224] emphasised the entanglement of the common law, equity and statute. Justice Leeming, in that text, referred to the High Court decision in Bankstown City Council v Alamdo Holdings Pty Ltd,[225] where the High Court stated:

It would be unsafe to attempt an exhaustive definition of a conception such as 'incur any liability' which is susceptible of various applications, given the normative complexity of the legal system, with the interaction between the rules of law, principles of equity, requirements of statute, and between legal, equitable and statutory remedies. Much must depend upon the subject, scope and purpose of s 733.

It was further observed by Leeming JA in Common Law, Equity and Statute: A Complex Entangled System:[226]

Thus, an awareness of the normative complexity brought about by the interaction of common law, equity and statute led to an acknowledgement by the ultimate appellate court that it would be unsafe to seek to define the ordinary words 'incur any liability' exhaustively. That by itself speaks volumes about the complexity of language and of the legal system, and of curial minimalism - the appropriateness of courts determining only what is necessary to resolve the litigants' dispute.[227]

...

It may be seen that the interaction of common law, equity and statute operated on a number of levels. The ultimate question was one of statutory construction. The statute applied to cases where the Council had 'incurred any liability'. That required an examination of the position at law and in equity, as modified by the local equivalent of Lord Cairns' Act. The broad construction upheld by the High Court after being rejected by the courts below was justified by an appeal to substance over form, which itself reflects a long-standing equitable maxim.[228]

118 Justice Leeming summarises the position:[229]

[I]n order to answer a simply stated commercial problem, it is necessary to have regard to the position at common law, in equity and pursuant to statute. The statutory remedy is informed by equitable discretion, whilst equitable doctrine has been altered by the influence of statute. However, that does not render the principles at common law and in equity redundant, for the statutory discretion has been construed so as to be broader than, but informed by, the position in equity. The rules and principles at common law and in equity are supplemented by statute, but statute in turn draws upon the existing body of common law and equity.

119 Further, it is important to note that Parliament is presumed to know the common law and equity when enacting legislation. This well‑established principle of statutory interpretation has been endorsed by the High Court in Coco v The Queen,[230] where Deane and Dawson JJ (agreeing with Mason CJ, Brennan, Gaudron and McHugh JJ) said:

It is settled law that a court should not impute to a legislature an intention either to abolish or to modify a fundamental common law right or privilege unless the relevant legislation makes such an intention unambiguously clear.[231]

120 On this basis, I first turn to the terms of the trust deeds, noting emphasis must be placed on the manifestation of the intention of Mr Ross and Mr Colleluori at the time of establishing RC and the Trusts. In Byrnes v Kendle,[232] Gummow and Hayne JJ (with whom French CJ agreed) considered the correct question to be asked is 'what is the meaning of what the parties have said?', not 'what did the parties mean to say?' Put another way, 'the question is what the settlor or settlors did, not what they intended to do'.[233] In Re Schebsman,[234] du Parcq LJ stated that 'unless an intention to create a trust is clearly to be collected from the language used and the circumstances of the case, I think that the Court ought not to be astute to discover indications of such an intention', which has found repeated approval.[235]

121 It is the Court's role here to undertake an objective assessment of the legal character of the arrangement the parties have put in place.

122 The evidence of Mr Ross is that, with advice from their accountant, Mr Ross and Mr Colleluori incorporated RC (with each of them a director), to be appointed trustee of each of the Trusts to act as if each of the Trusts was entitled to half of the Taxable Lands acquired.[236] The Respondent, correctly, identifies that the relevant question for the Court is whether a sufficiently clear intention to subject the Taxable Lands to the terms of the Trusts was manifested outwardly rather than held secretly or 'subjectively'.[237] However, I agree with the Appellant's position that, with this qualification, Mr Ross' evidence of what was discussed; what the parties did in setting up the arrangement; and why, are matters that bear upon the question for the Court's determination.[238] I note here, in particular, the sworn evidence of Mr Ross who denies that any discussions, or other steps, took place to declare or create a third trust.[239]

123 Rather, Mr Ross and Mr Colleluori expressly intended for the Trusts to be established and for RC to act as trustee of both Trusts. The intention for the creation of the arrangement manifests in writing within the trust deeds. Gummow, Hayne, Heydon and Crennan JJ, in Byrnes v Kendle,[240] held that a written manifestation of intention cannot be contradicted by oral testimony, even of the settlor, purporting to show there was no subjective intention to create a trust. The intention is also manifest in the financial records of the Trusts and the income tax partnership. The Appellant has relevantly highlighted that the tax returns for each 'partner' record asset and income figures which are divided in two, supporting the arrangement put by the Appellant. It is further relevantly noted that if the Respondent's alleged unit trust scheme arrangement were to exist, each of the Trusts' financial records would show units, rather than half of the total assets, and losses would be carried forward, not shared by the partners. I accept the Appellant's submissions in this regard.

124 It is important at this juncture to note, again, the Act's definition of 'trust'. The Act requires there to be an express or declared trust, by stating a 'trust' 'does not include an implied or constructive trust, except where expressly provided by [the] Act'.[241] The High Court, in Korda v Australian Executor Trustees (SA) Ltd,[242] citing Jacobs' Law of Trusts in Australia, restated the helpfully succinct observation that the creator of an express or declared trust will have used language which expresses an intention to create a trust:[243]

The author of the trust has meant to create a trust, and has used language which explicitly or impliedly expresses that intention, either orally or in writing. The fact that a trust was intended may even be deduced from the conduct of the parties concerned but if there is any uncertainty as to intention, there will be no trust.

It is also said in Jacobs' Law of Trusts in Australia:[244]

References to 'intention' in this context are to be understood, no differently than in the law of contract, as references to the intention imputed to the parties by what has been objectively manifested by the words used considered in their context.

125 The Appellant highlights that in Byrnes v Kendle 'there was no degree of informality, the trust being manifested and proved by deed, using the technical term, upon trust',[245] and further sought to emphasise, as is the case here, with the two discretionary trusts which is not one of those cases where the language used by the parties for the transaction is inexplicit so that the Court is left to infer the relevant intention from other language used by them 'from the nature of the transaction and from the circumstances attending the relationship between the parties'.[246]

126 Here, it is clear that Mr Ross and Mr Colleluori intended to create the two Trusts, using language which explicitly expresses those intentions, evidenced in writing in the trust deeds. There is clear certainty that the arrangement and Trusts which were established are the two discretionary Trusts, with the use of the same trustee, being RC.

127 Having established the existence of the discretionary Trusts and the arrangement whereby RC acts as trustee for both Trusts, I now address the Appellant's construction in examining what equitable obligations and duties were imposed upon RC, as trustee, holding the Taxable Lands at midnight on 31 December in each tax year.

128 The Appellant correctly identifies the duties of RC, as trustee of the Trusts, being to obey the terms of the Trusts, including the power to appoint net income of the trust funds and to appoint capital from the trust funds, and also the duty to keep trust property separate and distinct. The Appellant then, rightly, highlights that the next question for the Court is what, in law, was the effect of RC holding the Taxable Lands in this way, by considering what entitlements arose in the beneficiaries and the objects of each of the Trusts. In this regard, the Appellant relied on the High Court decision in Federal Commissioner of Taxation v Linter Textiles Australia Ltd (in liq),[247] where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said, citing Hope JA in DLKR:

In so far as their Lordships were proceeding in Oriental Steam upon an assumption that the law of property requires the location at all times and in all circumstances of distinct legal and beneficial ownership, that assumption since has been exploded by Commissioner of Stamp Duties (Q) v Livingston. In Franklin's, Menzies J made this point respecting the significance of Livingston. McLelland J later rightly emphasised 'the imprecision of the notion that absolute ownership of property can properly be divided up into a legal estate and an equitable estate'. Hope JA said:

'[A]n absolute owner in fee simple does not hold two estates, a legal estate and an equitable estate. He holds only the legal estate, with all the rights and incidents that attach to that estate.'

129 The Appellant further relied upon the remarks of Hope JA in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW):[248]

[A]lthough the equitable estate is an interest in property, its essential character still bears the stamp which its origin placed upon it. Where the trustee is the owner of the legal fee simple, the right of the beneficiary, although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him.

130 Bearing in mind the duties of the trustee (RC) are personal to the cestui que trust, rather than in the sense of capacity, I accept the Appellant's construction that the beneficiaries and objects of the Trusts could compel RC to hold the Taxable Lands as to half of the capital and as to half of the income on the terms of the two Trusts settlements. As such, the economic entitlements - the capital and income - of each moiety are to be held and administered by RC, as trustee of each of the Trusts, in accordance with the terms of each trust deed.

131 It is on this basis that it is said, by the Appellant, that the statutory framework ought to operate so that, pursuant to ss 46A and 46G(3) of the Act, RC, as trustee of the Trusts, is assessed for land tax on the whole of the land subject to the Trusts as if the land were the only land owned by the trustee and, as such, each landholding trust (the Ross Property Trust and the P. Colleluori Property Trust, via its trustee) be assessed for land tax separately. I accept this position. It is worthwhile noting here that this position accords with the information provided on the State Revenue Office's website, discussed above,[249] where it is stated 'if you are the trustee of multiple trusts, you will receive a separate assessment for each trust.'

132 Although I find the existence and operation of the discretionary Trusts, this does not necessarily exclude the possibility of the existence of the unit trust scheme, or fixed trust, alleged by the Respondent as existing 'above' the discretionary Trusts. As discussed previously, the Respondent's position is that 'unit trust scheme' is broadly defined in the Act, and could include merely an understanding between two persons - a plan arranged between them, which may not be enforceable at law. Whilst this may be so, the Act requires, as the Appellant contends, that the alleged unit trust scheme be for the 'purpose' or having 'the effect' of providing facilities for participation by a person 'under a trust' in any profit or income arising from 'property under the trust'. Moreover, in my view, the Appellant's position is supported by attention to the language used in the definition of 'unit' and 'unit trust scheme', with this definition read in the context of the latter expression as defined in the Act. The definition of 'unit' is cast in the context of an arrangement producing results for 'a beneficiary under a trust' with respect to property under 'the trust'.[250] This position is reinforced in the definition of 'unit' in the context of such a scheme, in both paragraphs (a) and (b) and in the words of the final part of this definition, again, referring to and emphasising 'the trust'. In the present case, the mere fact that there happens to be beneficial entitlements under two trusts does not establish or necessarily imply the existence of 'the trust' for the purposes of a 'unit trust scheme'. Rather, this requires evidence of the existence of the third trust which, as indicated in these reasons, has not been provided or identified by the Respondent; though this may not, given the statutory language, require the formality of a unit trust deed.[251]

133 I also highlight here the requirement under the Act that a 'trust' be an express trust, by stating a trust 'does not include an implied or constructive trust, except where expressly provided by this Act'.[252] Whilst an express trust is not strictly confined to written words, and the fact that a trust was intended may be deduced from the conduct of the parties, if there is any uncertainty as to intention, there will be no trust.[253] 'Intention' in this context is to be understood as references to the intention imputed to the parties by what has been objectively manifested by the words used, considered in their context.[254] The Respondent's construction of the unit trust scheme fails to recognise this and tends more towards an implied or constructive trust arrangement.

134 The Appellant correctly submits the approach the Court ought to take in considering the Third Trust Issue, in light of the requirement for an express trust, is to first, determine whether the parties objectively intended to establish a third trust (the Respondent's alleged head trust); and, second, whether the purported third trust contained the terms alleged by the Commissioner.

135 I accept the Respondent's submission that neither the legislative regime, nor equity, requires formal documentation of a unit trust scheme or a fixed trust. Whilst an express trust, that is not implied or constructive, is required, it is not necessary that the creator of a trust should know that the particular relationship intended to be created is in law a trust.[255] Rather, a trust will be created, even if the creator is not aware of so doing, provided that, in substance, the creator's actions have the legal effect of creating the relationship which is known in law as a trust.[256] Despite this, as du Parcq LJ said, in Re Schebsman,[257] 'unless an intention to create a trust is clearly to be collected from the language used and the circumstances of the case, [the] Court ought not to be astute to discover indications of such an intention'; a statement which has found repeated approval.[258] It is also highlighted in Ford and Lee's The Law of Trusts:[259]

What must be shown is that a person, including a corporation, is under an obligation to deal with property for the benefit of another person or for legally recognised purposes. The essential question is whether the person having title to property or being donee of a power to appoint property, is under a duty, and not simply a discretion, to apply that property for another.

136 In order to ascertain whether a trust can be inferred from the conduct of the parties, the Court must have regard to the commercial background of the arrangement, including taxation considerations relevant to the recognition of a trust.[260] In this vein, the Respondent refers to the New South Wales Court of Appeal decision of Li v Ye,[261] where Kirk JA (with whom Mitchelmore JA agreed) stated:

An intention to create a trust involves at its core an intention that the property in question be held for the benefit of another or others, such that it is not part of the assets of the legal owner. The intention is inferred from the language employed by the party or parties and the relevant surrounding circumstances, including the nature of the transaction and the circumstances of the relationship. The intention to create a trust is ascertained objectively; it is not necessary that the settlor subjectively appreciates that the arrangements will have the equitable effect of creating a trust so long as they hold the requisite intention just described.

137 However, I note Hayne and Kiefel JJ's comments, in Korda v Australian Executor Trustees (SA) Ltd,[262] that identification of the context in which a legal arrangement is made is not a substitute for examining the precise language employed by the parties themselves.

138 Here, the commercial background to the arrangement established by Mr Ross and Mr Colleluori is clearly evidenced through the discussions with their accountant, and in the creation of the two discretionary trusts and with RC acting as trustee of those Trusts. Emphasis must also be placed on the taxation considerations in facilitating such an arrangement. Here, the evidence of Mr Ross is that he understood their accountant, at the time, set up an income tax partnership, through each of the Trusts.[263] Further, evidence of invoices issued for rent and outgoings are in the name of RC as Trustee of the Trusts. In addition, the financial statements prepared for the income tax partnership reflect this arrangement, whereby income partnership tax returns were lodged, not as beneficiaries under a third trust. Viewed objectively, the evidence does not suggest there is any intention for the creation of a third head trust. There is no evidence of any oral conversation with respect to creating a unit, or fixed, trust or, indeed, anything in the nature of a 'unit trust scheme' as defined in the Act. Whilst the Appellant has lodged notices with the Commissioner which do not correctly identify the arrangement of RC holding the Taxable Lands as to one half for the Ross Property Trust and the other half for the P. Colleluori Property Trust, it is observed by the Appellant, as is clear, that the notices do not refer to any unit or fixed trust, nor do they refer to the Trusts at all. And, despite this, it is common ground that RC did not hold the Taxable Lands absolutely. Further, the loans to which the Respondent refers, which are addressed to RC as trustee of the Trusts and RC, 'in its own capacity', do not support the proposition of a head trust. I accept that, as the Appellant submits, this is purely to prevent the bank from being in a position where the trustee might assert a limitation of personal liability.

139 The Appellant, correctly, identifies, objectively, what would be the point of the unit trust scheme arrangement, and submits that if this were a situation of a managed investment scheme, it would be expected that there would be some open formality about the creation of the arrangement and the rationale for objective commercial reasons, which are not present in this case.[264]

140 On this basis, the Respondent has failed to evidence certainty of intention in the creation of the head trust.

141 As there is no certainty of intention to create a third trust, it is not necessary to discuss whether there is any certainty of subject matter or the objects of the purported trust in the Respondent's alleged head trust. Nor is it necessary to address the Respondent's contention that the Appellant had a right of indemnity in respect of debts incurred by it as trustee of 'the head trust'. As the Appellant submits, this simply begs the question whether there was a 'head trust'.

142 Turning to the alternative case put by the Respondent, that a head trust exists, without the unit trust scheme alleged or discretionary trusts, but, rather, making fixed distributions to each of Mr Colleluori and Mr Ross as to 50% each. The Respondent advances this contention on the basis of distributions made by RC to the Trusts from 2005 onwards in a 50/50 split. The Respondent also highlights that the notification of trust landholding for Hammond Road indicates a fixed trust arrangement. The Respondent also relies on the definition set out in Vegners,[265] above,[266] that in this fixed trust arrangement there is 'no discretion in the trustee or any other person to vary the group of beneficiaries or quantum of their interests'. On this construction of a fixed trust, the alleged fixed trust arrangement is not made out, in circumstances where the discretionary Trusts exist with the ability to vary the beneficiaries and the quantum of their interests. Further, the alleged fixed trust is subject to the same issues regarding certainty of intention. For the preceding reasons, there is no relevant intention, applying the analysis of the evidence said to be relevant to the Respondent's unit trust and unit trust scheme contentions. Indeed, no plausible commercial or other reasons have been advanced or suggested as to why the parties would ever had thought it necessary to establish a third 'fixed' trust.

143 The Appellant's position is that the alleged unit trust scheme, fixed trust or head trust fails because a person cannot hold property on trust for themself alone. The Respondent's position is that the operation of this 'general rule' does not apply in circumstances where there is a merger of interests. Whilst I do not consider it strictly necessary to determine this issue, in circumstances where I find there is no intention to create a third trust, I, however, address this in the following paragraphs.

144 This question was considered by the High Court in DKLR.[267] In DKLR, it was said to be a 'fundamental principle' that the holder of an estate in fee simple had 'the whole right of property in the land' or 'a single entire interest', rather than 'two separate interests', one legal and one equitable, and so 'cannot be a trustee of that fee simple for himself'.[268] In support of this position, Aickin J cited several earlier decisions.[269] The Appellant helpfully emphasises the reasoning in each of these decisions.

145 Re Douglas[270] applied Goodright v Wells,[271] one of the earliest cases on the topic, where the principle was expressed simply and without exception as 'a man cannot be a trustee for himself'. Re Selous[272] differs markedly from this proceeding, where it was considered whether two people could hold a lease as joint tenants on trust for themselves as tenants in common, with the trust existing previously with a different trustee. In Re Cook,[273] where a statute had the effect of making a husband and wife who owned a house as joint tenants hold the house on trust for sale for themselves, the husband died, and so, it was held, the trust disappeared, 'because A cannot be trustee for A'. In Re Heberley,[274] Turner J reasoned:

A man cannot be trustee for himself alone. He may be trustee for himself with others, but once his duties to those others have been finally and completely discharged, and he is left with no obligations under the trust but to himself, that trust disappears.

Justice Turner further said 'no one may hold as trustee for himself', and that to suggest otherwise was 'meaningless'.[275] Scott on Trusts[276] stated 'where the intended trustee and the intended beneficiary are the same, no trust is created'. Lewin on Trusts[277] explained that this is because 'the equitable obligation is swallowed up in the ownership'.

146 The Appellant's submission is that this long line of authorities undermines the Respondent's contention that DKLR is based on the merger of interests.[278]

147 The Respondent's position is that no co-extensive interest exists in the present circumstances, and, therefore, the presumption is against merger. The basis for this argument is the decision in CPT Custodian where unitholders were not considered an 'owner' and their interest did not amount to an estate of freehold in possession. Whilst I accept this reasoning on the basis of the decision in CPT Custodian, where there has been no intention to create a third trust, fixed trust or unit trust scheme, I consider the interests would be co‑extensive. In any event, because a single person cannot create in or against themselves two separate bundles of rights or interests over land, one legal and one equitable, there is no occasion to ask whether two interests are 'the same', 'commensurate' or 'co-extensive'.[279]

148 The Respondent's alternative argument, in the event co-extensive interests are not made out, that merger does not occur where a trustee acquires an equitable interest under the trust in its capacity of a different trust, also fails in circumstances where I have determined no third trust exists.

149 Further, I agree with the Appellant's submission that the doctrine of merger does not speak to whether a person can create a trust for themselves. The view expressed in Meagher, Gummow and Lehane's Equity: Doctrines and Remedies,[280] advanced by the Appellant, that there is a distinction between the creation of trusts and the rules of merger, and where there is an attempt to make oneself a trustee of property for oneself, there will be a failure to create a trust, is correct.

150 It is correct that a person cannot owe the equitable obligations to a trustee that are owed to themselves alone.[281] Further, as the Appellant correctly submits,[282] a person can never be regarded as holding both a legal estate in fee simple and an equitable estate in fee simple, since their beneficial ownership is inherent in their legal ownership. This is highlighted in DKLR.[283] It is noted that CPT Custodian does not alter these fundamental principles.[284]

151 The Appellant further submits, with which I agree, that there was no pre‑existing trust and no question of merger in DKLR. The company, in DKLR, simply had a single entire interest in the land, and there was not and could not be created any separate equitable interest under a trust owed by itself to itself. It is noted that, in DKLR, Aickin J mentioned the word 'merges' once,[285] only in the course of addressing a hypothetical situation of a person who 'first holds the legal estate upon trust for some other person'. Further, Gibbs CJ and Brennan J also did not 'rejec[t] DKLR's argument on the basis of merger of interests' as is put by the Respondent.[286]

152 The decision in Brydges v Brydges[287] is not referred to in DKLR. It is observed by the Appellant that Brydges, relied on by the Respondent as the source of a 'restriction' or 'exception' to the 'general rule' about 'merger', was a merger case concerning life estates, decided over 200 years ago. The Appellant's position, a position with which I agree, is that the decision in Brydges is far removed from the present case, and whatever useful application it may have today in a case of merger (whether about life estates, fractional interests shared among multiple people or other co‑ownership), it has not been treated since DKLR to qualify the 'fundamental principle' made clear in DKLR.

Further Ground 1 - Land held by RC in its own right

153 It is necessary to discuss Further Ground 1, as it is relied upon by the Respondent in circumstances where I have found the 'general rule', that a person cannot be trustee for themselves, applies here. The Respondent submits that, as a consequence of the general rule not applying, the Taxable Lands are held by RC in its own right and taxed under sub‑ss 36(1) and (3) of the Act on its aggregate holding at the general rate, not the surcharge rate.

154 I agree with the Appellant's contentions that this ground finds no basis in circumstances where the documentary evidence weighs heavily against this construction. This is especially so in circumstances where the parties agree that RC held the Land on trust. On this basis, the argument is further flawed by reason that s 46G applies, not s 46A, where trust nominations were in force and where s 46G(3) provides that the 'trustee of the trust 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'.

155 Noting it is not in issue that the Appellant held the Taxable Lands on trust, subject to its equitable duties to the Trusts, I find there is no basis for this ground, and it therefore fails.

156 Similarly, the Joint Owner Issue only arises in circumstances where I have not found the existence of a third trust, nor that RC held the land in its own right. This ground sets out that the assessments were made correctly, under s 38 of the Act and that the Land was held by the Trusts in joint ownership.

157 The Respondent advanced this argument on the basis that it is analogous to s 960‑100(3) of the Income Tax Assessment Act 1997 (Cth). I agree with the Appellant's submission in response to this argument, that there is not any similar provision in the Act to this provision of the Income Tax Assessment Act 1997 (Cth). I find that it is not appropriate to draw such an analogy.

158 The Respondent's position that the purpose of the 2005 amendments to the Act was for the purpose of ensuring trust property could be aggregated and that by appointing one trustee of the Trusts, avoids the application of the amendments. Whilst I accept the Respondent's submission that the use of a common trustee for multiple trusts may avoid aggregation, which might be contrary to the purpose of the 2005 amendments to the Act, this situation is expressly contemplated by the Commissioner, noting the comments on the State Revenue Office website which indicate a trustee of more than one trust will be assessed separately.

159 Moreover, the Appellant correctly identifies that s 38 of the Act applies to a 'person' only as a 'joint owner'. In my view, the Trusts cannot, therefore, be persons, as a trust is a relationship or obligation, and there is no deeming provision providing that a trust may be a person within the Act. Further, there is nothing within the Act that contemplates the creation of a trust merely through the operation of the provisions of the Act.

160 Having regard to the above, this ground also fails.

161 I now turn to the statutory regime. On the basis of the preceding reasons, I find the correct operation of the statutory regime in these circumstances is as follows. RC is an 'owner' of the Taxable Lands for the purposes of the Act. Under s 36 of the Act, RC ought to be assessed, at the applicable rate, on the aggregate value of the land owned at midnight on 31 December for the immediately preceding land tax year.

162 It is then necessary to turn to the trust provisions and the two‑level process of assessment that is to take place. First, s 46A must be applied, in that an 'owner' as trustee of a trust is liable for land tax on the land at the applicable rate in pt 3 of sch 1 of the Act (being the trust surcharge rate). Pursuant to sub‑s 46A(2), 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.

163 Second, in accordance with my findings that no unit trust scheme or fixed trust exists, and where there are two discretionary trusts with nominated beneficiaries, the 'owner' (RC), being 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 in respect of any pre‑2006 land at the applicable rate in pt 1 of sch 1 of the Act and in respect of any post‑2006 land at the applicable rate in pt 3 of sch 1 of the Act.

164 This construction of the statutory regime accords with the thrust of the Act's purpose and the 2005 amendments, which is not to aggregate land tax for land held on trust, where a beneficiary of the trust has been nominated.

165 Further, and on the basis of the preceding reasons, I find that the joint owner provisions in s 38 of the Act have no application here.

166 For the preceding reasons, I find that the Appellant's appeal is successful. Orders will be made as sought by the Appellant, to the effect that:

(a) The notices of assessment issued on 2 May 2023 to the Appellant for the 2018-‍2023 land tax years are to be set aside.

(b) The Commissioner is to issue the Appellant two new sets of land tax assessment notices for 2018-‍2023, pursuant to s 46G (not s 38 or 46A) of the Act to each of the Appellant as trustee for the Ross Property Trust and the Appellant as trustee of the P. Colleluori Property Trust.

(c) Penalty tax be reduced as part of and solely as a consequence of the disaggregated assessments.

(d) The Commissioner refund with interest to the Appellant any amounts overpaid, in accordance with div 3 of pt 10 of the Taxation Administration Act 1997.

167 I reserve the question of costs and will hear the parties on this issue as necessary.

168 The parties are to bring in orders to give effect to these reasons.

[1] See Respondent's Written Submissions (16 October 2025), [11] (Respondent's Submissions).

[2] Note: Enterprise Drive was not included in any reassessment notice.

[3] Appellant's Written Submissions (9 September 2025), [3] (Appellant's Submissions).

[4] R. C. Land Management v Commissioner of State Revenue [2025] VSC 452.

[5] Order of the Honourable Justice Croft (3 July 2025) (Order).

[8] Affidavit of Lou Ross (9 September 2025), [17]-[26] (Ross Affidavit).

[49] [2005] HCA 53; (2005) 224 CLR 98 (Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ).

[50] CPT Custodian, [37] (Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ).

[53] 'Trusts and land tax', State Revenue Office (Appellant's emphasis).

[58] Appellant's Submissions, [65]-[68].

[65] T33.14-22; see ACES Sogutlu Holdings Pty Ltd (in liq) v Commonwealth Bank of Australia [2014] NSWCA 402; (2014) 89 NSWLR 209.

[69] Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484, [33].

[72] (2000) 202 CLR 588, [34] (Kirby J dissenting).

[74] T39.2-6; Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592, [30].

[80] Respondent's Submissions, [37]; cf Appellant's Submissions, [67].

[83] Respondent's Submissions, [39]; Newton v Federal Commissioner of Taxation [1958] UKPCHCA 1; (1958) 98 CLR 1, 7 (Privy Council).

[90] Respondent's Submissions, [43.1]-[43.3].

[93] Appellant's Submissions, [67] (emphasis in original).

[97] Appellant's Reply Submissions, [24]; see e.g. Kauter v Hilton [1953] HCA 95; (1953) 90 CLR 86, 97.

[98] Appellant's Reply Submissions, [26]; The Appellant highlights s 53(1)(b) of the Property Law Act 1958 provides: 'a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will'.

[99] Respondent's Submissions, [44.1]-[44.4].

[100] Respondent's Submissions, [46].

[101] [1989] FCA 480; (1989) 20 ATR 1645, 1649.10

[102] Respondent's Submissions, [49].

[103] Respondent's Submissions, [50].

[104] Appellant's Submissions, [65].

[105] Appellant's Submissions, [70].

[106] The Appellant refers to the Respondent's written submissions filed in support of its application and on consolidation (20 June 2025), [9.2].

[107] Appellant's Submissions, [71].

[108] Appellant's Submissions, [72].

[109] Appellant's Submissions, [72].

[110] Appellant's Submissions, [73].

[111] [1982] HCA 14; (1982) 149 CLR 431.

[112] DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431, 463; Suncorp Insurance & Finance v Commissioner of Stamp Duties (Qld) [1997] QCA 225; [1998] 2 Qd R 285, 304.40; Rix v Mahony and Ors (No 2) [2012] NSWCA 332, [19] (Campbell and Meagher JA).

[113] Appellant's Reply Submissions, [32].

[116] Appellant's Submissions, [75].

[117] [2007] WASCA 43, [22(e)], citing Ford & Lee, Principles of the Law of Trusts (3rd ed), [5012].

[118] Appellant's Submissions, [76].

[119] Appellant's Submissions, [77].

[120] Appellant's Submissions, [78].

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

[122] Appellant's Submissions, [79].

[123] Respondent's Submissions, [51].

[124] [1796] 3 Ves 120, 127 (Lord Alvanley, Master of the Rolls, Sir R.P. Arden). Brydges was cited for this proposition in The Equitable Jurisdiction of the Court of Chancery, 508

[125] [1797] EngR 385; [1797] 3 Ves Jr 339, 342. See, similarly, In Re Douglas (1885) 28 ChD 327, 331 (Pearson J) referring to Selby v Alston.

[126] [1901] 1 Ch 921, 922.

[127] [1901] 1 Ch 921, 922; and in Re Cook [1948] Ch 212, 214-215 Harman J applied what he described as 'the rule in Re Selous'.

[128] [1901] 1 Ch 921, 922.

[129] [1901] 1 Ch 921, 922.

[131] [1982] HCA 14; (1982) 149 CLR 431.

[132] [2006] HCA 48; (2006) 227 CLR 471, [37].

[133] Respondent's Submissions, [58] referring to Jacobs' Law of Trusts in Australia (LexisNexis, 8th ed, 2016), [1‑07].

[134] Respondent's Submissions, [58] referring to Re Scouller and Another and Commissioner of State Revenue (2011) 84 ATR 458, [36] (Macnamara DP), in which, after referring to Re Selous, the Deputy President stated that there was in the case before him 'no suggestion that any alleged equitable interest that they had was on some different basis from their interests at law ... [and so] in those circumstances the general principle that one cannot be trustee for oneself applied'.

[135] Respondent's Submissions, [59].

[136] Respondent's Submissions, [60] referring to JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (LexisNexis, 5th ed, 2015), [41‑155], citing CPT Custodian v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98, [15]-[17], [25]-[52].

[137] [2005] HCA 53; (2005) 224 CLR 98, [37].

[138] Respondent's Submissions, [61].

[139] Respondent's Submissions, [62] referring to Commissioner for ACT Revenue v Perpetual Trustee Company (Canberra) Ltd (1993) 27 ATR 439, 442-443 (Higgins J). Overturned in Perpetual Trustee Company (Canberra) Ltd v Commissioner for ACT Revenue [1994] FCA 1150; (1994) 50 FCR 405, but not in respect of the finding as to merger, although see 407 (Davis J). Commissioner for ACT Revenue v Perpetual Trustee Company (Canberra) Ltd (1993) 27 ATR 439 was cited with approval in Hypec Electronic v Registrar‑General (No 2) [2008] NSWSC 138, [6] (Gzell J) ('if a question of merger arises, there is the proposition that merger only occurs if the legal and equitable estates are co‑extensive and commensurate and it is for the benefit of the party in whom the estates reside').

[140] Respondent's Submissions, [62].

[141] Appellant's Reply Submissions, [28].

[142] Appellant's Reply Submissions, [28].

[143] Appellant's Reply Submissions, [28].

[144] Appellant's Reply Submissions, [29].

[146] Appellant's Reply Submissions, [29] referring to R.C. Land Management Pty Ltd v Commissioner of State Revenue [2025] VSC 452, [28].

[147] Respondent's Submissions, [65].

[148] Respondent's Submissions, [65].

[149] Respondent's Submissions, [65].

[150] Respondent's Submissions, [66].

[151] Respondent's Submissions, [66].

[152] Respondent's Submissions, [66].

[153] Respondent's Submissions, [13].

[154] Appellant's Reply Submissions, [46].

[155] Appellant's Submissions, [84]-[89].

[156] Respondent's Submissions, [67.1]; The Act, s 46A(3)(b)(i).

[157] Respondent's Submissions, [67.2].

[158] Respondent's Submissions, [67.2].

[159] Respondent's Submissions, [67.3].

[160] Respondent's Submissions, [68].

[161] Respondent's Submissions, [68].

[162] Respondent's Submissions, [68].

[163] Respondent's Submissions, [69].

[164] Respondent's Submissions, [69].

[165] Appellant's Reply Submissions, [47] referring to Respondent's Submissions, [65].

[166] Appellant's Submissions, [55].

[167] Appellant's Submissions, [55].

[168] Respondent's Submissions, [72].

[169] Respondent's Submissions, [73.1].

[170] Respondent's Submissions, [73.1].

[171] Respondent's Submissions, [73.1].

[172] Respondent's Submissions, [73.1] referring to Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297, 304-5 (Gibbs CJ), 320-2 (Mason and Wilson JJ).

[173] Appellant's Reply Submissions, [52].

[174] Appellant's Reply Submissions, [52] (Appellant's emphasis).

[175] Respondent's Submissions, [73.2]-[74].

[176] Appellant's Submissions, [56].

[177] Appellant's Submissions, [56].

[178] Appellant's Submissions, [56].

[179] Appellant's Submissions, [58].

[180] Appellant's Submissions, [59].

[181] See, eg, CB1580; 1597. Appellant's Reply Submissions, [3] referring to Respondent's Submissions, [13].

[182] Appellant's Reply Submissions, [3].

[183] Appellant's Reply Submissions, [4].

[184] Appellant's Reply Submissions, [5].

[185] Appellant's Reply Submissions, [5].

[186] Appellant's Reply Submissions, [6].

[188] Appellant's Reply Submissions, [8].

[189] Appellant's Reply Submissions, [8].

[190] Appellant's Reply Submissions, [8].

[191] Appellant's Reply Submissions, [8].

[197] Respondent's Submissions, [76.4].

[198] Appellant's Reply Submissions, [19].

[199] Appellant's Reply Submissions, [19].

[200] Ross Affidavit, [30]-[34]; CB1604, 1625, 1641, 1673, 2145, 2147.

[201] Appellant's Reply Submissions, [9].

[202] Appellant's Reply Submissions, [10].

[203] Appellant's Reply Submissions, [10].

[204] Appellant's Reply Submissions, [11].

[205] Respondent's Submissions, [76.1].

[206] Respondent's Submissions, [76.1].

[207] Respondent's Submissions, [76.1].

[208] Respondent's Submissions, [76.2].

[209] See Ross Affidavit [27]-[28]; CB630-2, CB934-7, 1030-4, 1063-9, 1131-54, 1246-75, 1319-40, 1482-500.

[210] Appellant's Reply Submissions, [12].

[211] Appellant's Reply Submissions, [13].

[212] Appellant's Reply Submissions, [13].

[213] Appellant's Reply Submissions, [14]; CB545.

[214] Appellant's Reply Submissions, [14].

[215] Appellant's Reply Submissions, [14].

[216] Appellant's Reply Submissions, [14].

[217] Appellant's Reply Submissions, [14].

[218] Appellant's Reply Submissions, [14].

[219] Appellant's Reply Submissions, [14].

[220] Appellant's Reply Submissions, [15].

[221] [2005] HCA 53; (2005) 224 CLR 98, [14]-[15] (Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ).

[222] [2005] HCA 53; (2005) 224 CLR 98, [52].

[223] [2016] HCA 51; (2016) 259 CLR 73.

[224] Mark J Leeming, Common Law, Equity and Statute: A Complex Entangled System (Federation Press, 2023) 20.

[225] [2005] HCA 46; (2005) 223 CLR 660, [27] (Gleeson CJ, Gummow, Hayne and Callinan JJ).

[226] Mark J Leeming, Common Law, Equity and Statute: A Complex Entangled System (Federation Press, 2023) 20-‍1.

[227] See Clubb v Edwards [2019] HCA 11; (2019) 267 CLR 171, [137] (Gageler J); Mineralogy Pty Ltd v Western Australia [2021] HCA 30; (2021) 274 CLR 219, [58] (Kiefel CJ, Gagelern Keane, Gordon, Steward and Gleeson JJ); Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593, [7]-[8] (Kiefel CJ, Gageler and Keane JJ); Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 267 CLR 560, [76] (Gageler J); Obeid v Lockley [2018] NSWCA 71; (2018) 98 NSWLR 258, [225]-[229] (Leeming JA); Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd [2022] NSWCA 150; (2022) 109 NSWLR 468, [35]-‍[41] (Leeming JA).

[228] See, eg, Parkin v Thorold [1852] EngR 535; (1852) 51 ER 698, 701: 'Courts of Equity make a distinction in all cases between that which is matter of substance and that which is matter of form' (Lord Romilly MR). See, generally, A Robertson and J Goudkamp (eds), Form and Substance in the Law of Obligations (Hart Publishing, 2019), esp B McFarlane, 'Form and Substance in Equity' (ch 9).

[229] Mark J Leeming, Common Law, Equity and Statute: A Complex Entangled System (Federation Press, 2023) 23.

[230] [1994] HCA 15; (1994) 179 CLR 427, 446.

[231] See, e.g., Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52, 96, 116, 123; Hamilton v Oades [1989] HCA 21; (1989) 166 CLR 486, 495, 500; Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1, 17.

[232] [2011] HCA 26; (2011) 243 CLR 253.

[233] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, [53], [113]; See also Twinsectra Ltd v Yardley [2002] UKHL 12; [2002] 2 AC 164, [71].

[234] [1944] Ch 83, 104.

[235] See, eg, Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604, 618 (Mason CJ and Dawson J); Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, [49] (Gummow and Hayne JJ); Ashton v Pratt [2015] NSWCA 12; (2015) 318 ALR 260, [186].

[236] Appellant's Reply Submissions, [20]; Ross Affidavit, [49].

[237] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, [55] (Gummow and Hayne JJ).

[238] Appellant's Reply Submissions, [20].

[240] [2011] HCA 26; (2011) 243 CLR 253, [52] (Gummow and Hayne JJ), [102]-[107] (Heydon and Crennan JJ).

[242] [2015] HCA 6; (2015) 255 CLR 62, [5] (French CJ).

[243] Jacobs' Law of Trusts in Australia (7th ed) 44 [306].

[244] Jacobs' Law of Trusts in Australia (8th ed) [3‑06].

[245] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 272 [49].

[246] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 289 [112] (Heydon and Crennan JJ) citing Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) [No 4] (2000) 202 CLR 588, 605 [34] (Gaudron, McHugh, Gummow and Hayne JJ).

[247] [2005] HCA 20; (2005) 220 CLR 592, [30] (citations omitted).

[248] [1980] 1 NSWLR 510, 519 [16].

[249] See above, [39].

[251] Noting Respondent's Submissions, [43].

[253] Jacobs' Law of Trusts in Australia (8th ed) [3‑06].

[254] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, [13]-[18] (French CJ), [46]-[66] (Gummow nd Hayne JJ), [98]-[118] (Heydon and Crennan JJ).

[255] Jacobs' Law of Trusts in Australia (8th ed) [5‑02].

[256] Jacobs' Law of Trusts in Australia (8th ed) [5‑02] referring to Paul v Constance [1977] 1 WLR 195.

[257] [1944] Ch 83.

[258] See, eg, Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604, 618 (Mason CJ and Dawson J); Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, [49] (Gummow and Hayne JJ); Ashton v Pratt [2015] NSWCA 12; (2015) 318 ALR 260, [186].

[259] Ford & Lee, Principles of the Law of Trusts (3rd ed), [2.020].

[260] Clowes v Federal Commissioner of Taxation [1954] HCA 10; (1954) 91 CLR 209; Milne v Federal Commissioner of Taxation [1976] HCA 2; (1976) 133 CLR 526.

[261] [2025] NSWCA 227, [35] (citations omitted).

[262] [2015] HCA 6; (2015) 255 CLR 62, [90].

[263] Ross affidavit, [17], noting an objection was raised by the Respondent to part of [17] of the Ross affidavit, on the basis of relevance. In circumstances where the Court must have regard to the commercial background to the arrangement, including taxation considerations, relevant to the recognition of a trust, I consider the whole of [17] of the Ross affidavit to be relevant, and, in any event, is substantiated by the written documentation.

[265] [1989] FCA 480; (1989) 20 ATR 1645, 1649.10

[266] See above, [66].

[267] [1982] HCA 14; (1982) 149 CLR 431.

[268] [1982] HCA 14; (1982) 149 CLR 431, 463 (Aickin J with whom Gibbs CJ and Brennan J agreed).

[269] Re Douglas (1885) 28 Ch D 327, 330, Re Selous (1995) 28 Ch D 327, 331_; Thomson v Selous_ [1901] 1 Ch 921, 922; Re Cook [1948] Ch 212, 214-5. Brennan J also cited Re Selous, Re Cook, and also Re Heberley [1971] NZLR 325, 333, 346.

[270] (1885) 28 Ch D 327, 330.

[271] (1781) 2 Doug KB 771; 99 ER 491.

[272] [1901] 1 Ch 921, 992.

[273] [1948] Ch 212, 214-5.

[274] [1971] NZLR 325, 333.

[276] Austin W Scott, The Law of Trusts (3rd ed, 1967) vol. II, 795-7.

[277] Thomas Lewin, Lewin on Trusts (Sweet & Maxwell, 16th ed, 1964), 4.

[278] Appellant's Reply Submissions, [36] referring to Respondent's Submissions, [55]-[57].

[279] Appellant's Reply Submissions, [37].

[280] J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrine and Remedies (LexisNexis, 5th ed, 2015), [41‑160].

[281] Ford & Lee, Principles of the Law of Trusts (3rd ed), [5.510], [5.530], referring to 'the impossibility of a supposed sole trustee being subject to any obligation to himself or herself as a sole beneficiary'. See also Re Heberley [1971] NZLR 325, 333; Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2006] WASC 63, [43] ; Clancy v Santoro [1998] VSC 196, [134] ('X cannot owe duties to X').

[282] Appellant's Reply Submissions, [32].

[283] [1982] HCA 14; (1982) 149 CLR 431, 463.

[284] Appellant's Reply Submissions, [38]; See Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2006] WASC 63 at [44]-[49] which was upheld on appeal in Adamstoun Holdings Pty Ltd v Brogue Tableau Pty Ltd [2007] WASCA 43, [26] (Buss JA with whom Steytler P agreed).

[285] [1982] HCA 14; (1982) 149 CLR 431, 463.

[286] Appellant's Reply Submissions, [36]; Respondent's Submissions, [56].

[287] [1796] EngR 2396; [1796] 3 Ves Jun 120.