Applicant v Respondent

PRACTICE AND PROCEDURE - Appeal to the Trial Division of the Supreme Court from the Review and Regulation List of the Victorian Civil and Administrative Tribunal - Where applicant seeks leave to appeal under s 148 of the VCAT Act on a question of law and, if leave be granted, to appeal from the order of a Senior Member of the Tribunal and in its place seeks an order that the whole of the assessment be set aside - Whether appeal has a real prospect of success - Whether appropriate to grant leave where each of the purported questions of law sought to be raised by the applicant on appeal concerns a point not raised before the Tribunal - Whether Tribunal erred, as the applicant contends it did on appeal, in failing to reduce duty outcome to zero in circumstances where the case advanced by applicant before the Tribunal sought a reduction of duty by way of 25 per cent only - Leave to appeal not granted - Victorian Civil and Administrative Tribunal Act 1998 (Vic), ss 148(1)(b), 148(2A).

1 This proceeding is brought by Mr Zhiyong Tao (the applicant or Mr Tao) seeking leave to appeal, and if leave be granted, to appeal from an order made by a Senior Member in a proceeding in the Review and Regulation List of the Victorian Civil and Administrative Tribunal (the Tribunal). The Tribunal's order, and the accompanying reasons (Tribunal's Reasons), were published on 11 July 2024.[1]

2 The proceeding concerned an assessment (Assessment) for 'landholder' duty under Part 2 of Chapter 3 of the Duties Act 2000 (Vic) (Duties Act), which was directed to the applicant following an alleged 'relevant acquisition' by him 'in the WCT Unit Trust'.[2] Before the Tribunal, the alleged 'relevant acquisition' was said to be an 'acquisition of control' made as a result of:

• Mr Tao's acquisition on 11 February 2014 of four shares in 66 William Road Pty Ltd (66WR Pty Ltd), which was the trustee of a private unit trust known as the WCT Unit Trust, from Mr Nicolaos Constantinou; and

• Mr Tao's appointment (on 6 March 2014) as the sole director and secretary of 66WR Pty Ltd (in place of Mr Constantinou, who resigned from those roles on the same date).

3 In early 2014 when those events took place, 66WR Pty Ltd held, in its capacity as trustee, a development property located at 74-84A Hutchinson Road, Lynbrook, Victoria (the Lynbrook Property). Because the WCT Unit Trust was a 'private unit trust scheme' and the Lynbrook Property was valued at in excess of $1 million, the WCT Unit Trust was a 'landholder' (as defined in s 71(1)) for the purposes of Part 2 of Chapter 3 of the Duties Act. Further, as the WCT Unit Trust's interest in the Lynbrook Property was held by 66WR Pty Ltd in its capacity as trustee of the scheme, the WCT Unit Trust's interest in land was a land holding of a unit trust scheme in accordance with s 72, and the WCT Unit Trust was relevantly a 'private landholder' as defined in s 71(3) of the Duties Act.

Relevant issues for determination before the Tribunal

4 Mr Tao, through his accountant, filed an objection to the Assessment, which was disallowed by the respondent (the Commissioner) on 17 January 2022. Following the disallowance of Mr Tao's objection to the Assessment, the matter was referred to the Tribunal at the request of Mr Tao, under s 106 of the Taxation Administration Act 1997 (Vic) (TAA).

5 Before the Tribunal, the Commissioner sought to uphold the Assessment for landholder duty under Part 2 of Chapter 3 of the Duties Act, and penalties and interest under the TAA, by relying on s 82, contending that:[3]

... Mr Tao made a 'relevant acquisition' for the purposes of s 82 of the Act (in respect of 'the dutiable property' being the shares in the Company). Upon acquiring 100% of the shares in the Company in February 2014, and, in the same month, becoming the only director and secretary of the Company, Mr Tao acquired 'the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies' for the purposes of s 82(2) of the Act.

6 Accordingly, before the Tribunal, the main question in issue was whether, in early 2014 when the relevant events took place, Mr Tao acquired 'control over a private landholder' (being the WCT Unit Trust), within the meaning of s 82. The Senior Member said that this issue turns on:[4]

(a) whether Mr Tao acquired the 'capacity to determine or influence the outcome of decisions about the [WCT Unit Trust's] financial and operating policies';[5] and

(b) if so, whether this is sufficient to engage the provision or if (as contended by Mr Tao) it is also necessary that Mr Tao obtained an interest in the WCT Unit Trust which is equivalent to a beneficial interest (which in turn involves a question of statutory construction).

7 At the hearing before the Tribunal, Mr Tao also sought leave to rely on an additional ground (Ground 3), which the Senior Member summarised as being to the effect that should the Tribunal find that he did acquire control of the WCT Unit Trust for the purposes of s 82, then−[6]

Under section 82(1)(b) of the Duties Act, the Tribunal (stepping into the shoes of the Commissioner) ought reduce the 'significant interest' which he has been deemed to have acquired in the WCT Unit Trust to 75%, to take account of the 25% interest in the trust already held by Amber Investments Pty Ltd ('Amber'), a company of which Mr Tao is the majority investor.

8 In its Reasons accompanying the Order, the Tribunal determined that:[7]

(a) when Mr Tao acquired the shares in, and became the sole director of, 66WR Pty Ltd, he acquired the capacity to determine or influence the outcome of decisions about the financial and operating policies of the WCT Unit Trust and therefore obtained control of the WCT Unit Trust for the purposes of section 82;

(b) having regard to the text, context and purpose of the provisions, it is not necessary that Mr Tao also obtained an interest equivalent to a beneficial interest in the WCT Unit Trust for section 82 to be engaged;

(c) leave ought be granted to the applicant to rely on Ground 3; and

(d) it is appropriate that the relevant acquisition which is deemed to have occurred under section 82 be reduced to reflect the pre-existing economic interest held by Mr Tao, namely to 85%.

9 Accordingly, the Tribunal ordered that the Assessment be set aside and remitted to the Commissioner for reassessment[8] to reduce the amount of duty, and the consequent penalty and interest. The Tribunal's order was framed as follows:[9]

Under section 51(2)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) [VCAT Act], the duties assessment issued to the applicant on 31 May 2019 (no. 19676739) is set aside and remitted to the respondent for reassessment in accordance with these reasons, to reduce the percentage of the applicant's relevant acquisition in the WCT Unit Trust from 100% to 85% and to recalculate the penalty and interest accordingly.

10 By Notice of Appeal dated 7 August 2024, the applicant seeks leave to appeal, and if leave be granted, to appeal from the whole of the Order, and in its place seeks an order that the whole of the assessment be set aside.

11 The application is made under s 148 of the VCAT Act. Relevantly, s 148(1)(b) provides that a party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding to the Trial Division of the Supreme Court with leave of the Trial Division. Section 148(2A) provides that the Trial Division may grant an application for leave 'only if it is satisfied that the appeal has a real prospect of success'. If leave to appeal is granted, the appeal must be instituted in accordance with the rules of the Supreme Court[10] and the matter shall proceed as an appeal from the order of the Tribunal.

12 On 20 September 2024, orders were made by consent of the parties, inter alia, for the hearing of the application for leave and the appeal, if leave be granted, to be heard together and determined by the Court accordingly.

13 For the reasons which follow, in respect of each of the grounds that were pressed by the applicant, being Grounds 1, 4 and 5, leave to appeal is refused.

Relevant factual background as found by the Tribunal

14 The relevant factual background is set out at paragraphs [19] to [43] of the Tribunal's Reasons.[11]

15 As the Senior Member noted, a considerable body of documentary evidence was placed before the Tribunal, with relevant parts of the Tribunal Book (excluding the submissions and Tribunal orders) occupying around 1,000 pages.[12] In addition, each of Mr Tao, Mr Constantinou and Mr Wiemer, and Ms Xue (Calico) Li (the accountant who prepared Mr Tao's objection to the Assessment) gave evidence before the Tribunal 'confirming their witness statements and responding to questions asked in cross-examination.'[13]

16 For present purposes, it is sufficient to note the following matters set out in the Tribunal's Reasons.

Incorporation of 66WR Pty Ltd, establishment of the WCT Unit Trust and its financing of the acquisition of the proposed development property in Lynbrook in 2011

17 In 2011, Mr Nicolaos Constantinou, an experienced property developer, and the applicant, Mr Zhiyong Tao, travelled to China and met with Mr Wilfred Wiemer,[14] a German national who lives in China, to discuss the potential for them to engage in a joint venture to conduct property development in Melbourne.

18 The parties agreed to establish a special purpose vehicle to carry on the property developments and, on (or about) 18 March 2011:

• a company named 66 William Road Pty Ltd (66WR Pty Ltd) was incorporated, with Mr Constantinou as its sole shareholder, director and secretary;

• 66WR Pty Ltd (as 'the trustee'[15]) entered into a deed (with a third party as settlor) to establish the WCT Unit Trust (Trust Deed);

• 100 units in the WCT Unit Trust were issued at a price of $1 per unit as follows:

- 50 units: Maclaw No. 547 Pty Ltd (Maclaw 547) as trustee for The Mountain Highway Unit Trust, an entity associated with Mr Constantinou;

- 25 units: Fredco Incorporated Limited (Fredco) as trustee for Nomsec No. 1 Limited, an entity associated with Mr Wiemer; and

- 25 units: Amber Investments Pty Ltd (Amber), a company of which Mr Tao is the majority investor, and thus being an entity associated with Mr Tao.

19 On 21 April 2011, 66WR Pty Ltd (in its capacity as trustee of the WCT Unit Trust) entered into a contract to purchase a development property located at 74-84A Hutchinson Road, Lynbrook (the Lynbrook Property) for $2.7 million, taking possession on 10 February 2012. (For context, the Tribunal noted that this was the company's second project, as there was also an investment in the namesake property at 66 Williams Road (suburb unknown) at the time, which had been funded by a loan from the Bank of Queensland).

20 In order to fund the purchase of the Lynbrook Property, meet the development costs and the capitalisation of interest for 12 months, 66WR Pty Ltd entered an agreement to borrow $2.79 million from Southern Finance Limited (Southern Finance). The security for the loan was a first registered mortgage over the Lynbrook Property, a fixed and floating charge over the assets of 66WR Pty Ltd and a personal guarantee from Mr Constantinou as director. However, to ensure that the loan did not exceed 70% of the value of the Lynbrook Property, the maximum amount that could be drawn down initially was $1.7 million. The balance of the purchase price (and associated costs, e.g. stamp duty) was funded by loans from each of Mr Tao and Mr Wiemer: in this regard, the accounts of the WCT Unit Trust as at 30 June 2012 record loans from Mr Tao of $581,666 and Mr Wiemer of $595,966.

21 A projection prepared by CNK Urban Project Pty Ltd (a company owned by Mr Constantinou) suggested that the developed lots would be sold for a total sum in the order of $5 million, with a net development profit of around $716,000.

Circumstances leading to change of ownership and directorship of 66WR Pty Ltd in February to March 2014

22 In March 2013, the loan and the securities were transferred from Southern Finance to Bendigo and Adelaide Bank Limited (Bendigo Bank).

23 By July 2013, it appeared that the loan was in arrears (of around $137,000) and Bendigo Bank was 'seeking to exit this loan and ... to be repaid via the sale of the asset or refinance' and was 'not keen on providing development funding for the construction phase'.[16] At that time, Mr Tao and Mr Constantinou met with the bank and Mr Tao was seeking 'an extension of [the loan for] 6 months on the basis he could assist in making ongoing interest payments', with a 'vision ... that the time extension would allow him to undertake due diligence and look at raising equity or debt to ... acquire the land/payout the Bank and undertake the construction phase'.[17]

24 At about this time, there were also problems with the loan from Bank of Queensland for the company's first project, being the 66 Williams Road property, with that bank appointing a receiver/manager to 66WR Pty Ltd in June 2013. Compounding the financial issues, a receiver/manager was also appointed to Maclaw547, the entity associated with Mr Constantinou, in June 2013.

25 In late 2013, Mr Wiemer travelled to Australia and he and Mr Tao arranged for an accountant to conduct an 'informal audit of [66WR Pty Ltd's] finances', with the accountant forming the view that Mr Constantinou 'had mixed the funds (including bank loans) belonging to the WCT's two projects with his private project funds', which caused the financial situation to be 'very confusing'.[18] Further, the accountant found that there had been interest payment defaults by Mr Constantinou in respect of his personal project and the properties in the WCT Unit Trust, which created a 'risk of the land being [sold] by the bank and [exposure to Mr Constantinou's] personal bankruptcy'.[19]

26 Shortly thereafter, a meeting of the parties was arranged where Mr Constantinou was questioned 'about his [alleged] serious mismanagement as the Director of [66WR Pty Ltd]'.[20] Mr Wiemer proposed that Mr Tao replace Mr Constantinou as the director of 66WR Pty Ltd, but without change to the ownership of the WCT Unit Trust.[21] Mr Constantinou and/or Bendigo Bank had also proposed the same thing.[22]

27 It was against this background that Mr Tao acquired the shares in 66WR Pty Ltd on 11 February 2014[23] and became the sole director and secretary of the company on 6 March 2014. (There was no change to the unit holdings in the WCT Unit Trust.)

Attempts to refinance between March 2014 and March 2015

28 The next day, 7 March 2014, Mr Tao and Mr Constantinou met with Bendigo Bank to 'discuss the way forward for [66WR Pty Ltd]'.[24] The manager indicated that Bendigo Bank would be prepared to discharge the mortgage for a discounted sum of $3 million (as compared to the amount then owing of approximately $3.15 million) subject to receiving that amount within a 'short time frame'.

29 At this time, it appears Mr Tao was approaching a state owned company in China (Chinese SOC) to repay the debt as a lump sum by 30 June 2014. In order to agree to Mr Tao's proposal to extend the duration of the loan, Bendigo Bank wanted a reduction in the debt of $400,000 by the end of March. However, Mr Tao indicated that because of the Chinese SOC having a 'government background', the 'procedure and time-frame is almost the same for either $400,000 or $3,000,000'.[25] Subsequently, Mr Tao indicated that there also would be a 'need to apply' for foreign exchange approvals to get the money from China to Australia[26] and sought until the end of April 2014 to pay the sum of $400,000.[27]

30 On 8 April 2014, Bendigo Bank wrote to Mr Tao to indicate that a formal demand for repayment would be issued the next day and that if they did not receive $400,000 by 8 May 2014 and (a further) $2.6 million by 30 June 2014, Bendigo Bank 'reserve[d] its rights to proceed with legal action against [66WR Pty Ltd]'.[28]

31 On 6 May 2014, Mr Tao wrote to Bendigo Bank to advise that the 'foreign exchange regulator' had rejected his application to transfer $400,000 to the bank from his own account and asked for an extension of time to get approval for the funds to be transferred by the Chinese SOC.[29]

32 On 23 May 2014, Mr Tao again emailed Bendigo Bank to indicate that, after discussions with his brother-in-law (apparently a reference to Mr Wiemer[30]), he had '3 plans to deal with this loan problem'.[31] The first option was for the Chinese SOC to repay the debt by 30 June 2014, but noting that they did 'not have the ability to control this decision on [their] own'. The second option was for them to 'take this project' on themselves, although noting that they would 'need some time to make sure if we can pay you off all those $2.6 million by 30/06/2014 and still have enough funds to [commence] construction'. The third option was to proceed with rapid sales of the 29 lots.

33 Bendigo Bank replied advising that the first option was the 'preferred option', the second option was 'also appealing [provided] it can be achieved within the 30-6-2014 timeframe' and that the third option is 'the least appealing' (and would involve changes to the interest rate on the loan and with no discount of the amount outstanding).[32]

34 Despite Bendigo Bank's reluctance, it appears that Mr Tao proceeded to implement the third option.[33]

35 By March 2015, Bendigo Bank had become fed up with the delays in the settling of lot sales, alleging that Mr Tao's 'various advices to the Bank have been misleading, and they [had] caused further delays and costs to be incurred', noting that as 'sole Director and Shareholder [of 66WR Pty Ltd] ... it [was Mr Tao's] responsibility to ensure the information provided to the Bank is correct'.[34] As a result, the manager indicated that the matter would be referred to Bendigo Bank's lawyers 'to continue the enforcement action required to recover the amounts owed to the Bank'. Mr Constantinou was copied into that correspondence 'in his capacity as Guarantor of debts in the name of [66WR] Pty Ltd'.[35]

Bendigo Bank's sale of the Lynbrook Property and winding up of 66WR Pty Ltd between April 2015 and October 2019

36 On 20 April 2015, Mr Bruno Secatore and Mr Daniel Juratowitch (of Cor Cordis) were appointed as controllers of 66WR Pty Ltd,[36] presumably by Bendigo Bank.

37 A sale of the Lynbrook Property was then arranged on behalf of Bendigo Bank, as mortgagee in possession, to a third party for $3.3 million (plus GST), with the sale completing on 16 October 2015.[37] Most of the sale proceeds were used to repay the Bendigo Bank loan (by then, approximately $2.9 million), with only $331,726.92 paid to 66WR Pty Ltd.[38]

38 The Tribunal observed that while there is no evidence before it as to how the latter sum was disbursed, 'it seems likely that it would have been used to pay the controller's costs (and perhaps some third party debts).'[39] This was said by the Tribunal to be consistent with:[40]

• Mr Constantinou's witness statement that indicates the 'unitholders did not receive any monies from the sale of [the Lynbrook Property and 66 Williams Road property]'.[41]

• Mr Tao's witness statement indicating that the amounts that he and Mr Wiemer 'invested' (being a reference to the loans from them to the WCT Unit Trust of $581,666 and $595,966 as at 30 June 2014) 'were never repaid or recovered'.[42]

39 On 27 January 2016, Mr Andrew Beck of RSM Australia was appointed by the Supreme Court of Victoria as the liquidator of 66WR Pty Ltd and the company was finally deregistered on 20 October 2019.

Aide-mémoire depicting the position before and after the alleged 'relevant acquisition' of control on 6 March 2014

40 At the request of the Court, the parties provided an aide-mémoire depicting the position (as recorded in the evidence before the Tribunal) before and after the alleged 'relevant acquisition' of control by Mr Tao in the WCT Unit Trust. The diagram, the substance of which is reproduced below, appeared as an Appendix to the Chronology agreed between the parties, dated 20 March 2025.

41 Subject to leave being granted, s 148(1) permits a party to a proceeding to appeal on a question of law from an order of the Tribunal. The existence of a question of law is not merely a qualifying condition to the right of appeal, but also the subject matter of the appeal itself.[43] An appeal under s 148 involves an exercise of original jurisdiction, in the nature of judicial review, to determine whether the Tribunal made errors of law that vitiated its order.[44] Importantly, s 148 does not provide an opportunity for a re-hearing on the merits;[45] nor is there an appeal on questions of fact to this Court.[46]

42 The limited nature of the Court's jurisdiction was explained by Davies J in Commissioner of State Revenue (Vic) v STIC Australia Pty Ltd as follows:[47]

The right of appeal conferred by s 148 is of a limited nature only. In Osland v Secretary to the Department of Justice,[48] the High Court recently affirmed that the court's jurisdiction conferred by s 148 to hear an appeal from the tribunal is enlivened only if there is a question of law, which is not merely a qualifying condition to ground the appeal but which is to constitute the subject matter of the appeal.[49] Parliament, by creating a statutory right of appeal to a party to a proceeding before the tribunal in the narrow terms of s 148, has disclosed an intention to limit the role of the court on an appeal from the tribunal and to limit the capacity of the court to re-determine facts or re-exercise discretions. The legislative purpose of s 148 is to discourage parties from challenging the correctness of a decision of the Victorian Civil and Administrative Tribunal, except where legal error is demonstrable. An appeal before the court under s 148 is not a merits review nor is it an appeal that merely involves a question of law. The matter comes before the court solely by way of judicial review for the court to correct errors of law by the tribunal but not to examine the record of the tribunal to determine whether some different decision could have been made. As Mason J stated in Minister for Aboriginal Affairs v Peko- Wallsend Ltd:[50]

The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned.

The role of the court is limited to reviewing the legal limits of the exercise of power. "Merits" review resides with the tribunal and the court is not to intervene in an essentially evaluative matter.

43 In STIC Australia, Davies J also addressed the nature of the leave requirement and what it entails, stating:[51]

The requirement that the leave of the court be obtained in order for a party to appeal a decision of the tribunal also evidences the legislature's intention that the question of law as framed must be one that is supported by the proposed grounds of appeal. In other words, the proposed notice of appeal must disclose that the court's jurisdiction to hear the appeal from the Victorian Civil and Administrative Tribunal is enlivened by the notice of appeal. The leave requirement is a safeguard that the appeal is on a pure question of law and that the grounds supporting the question of law articulated for determination by the court do found the subject matter of the appeal. The question of law is framed by the grounds. Where the grounds do no more than indicate that the subject matter of the proposed appeal invites reconsideration of the merits of the decision, the jurisdiction of the court is not enlivened, even though the question of law identified may be expressed in judicial review terms. The proposed notice of appeal must identify that the issues sought to be agitated on the appeal raise a question of law. If the question of law, properly analysed, is not a question of law, the form of its expression does not turn it into a question of law.

44 More recently, in both The Trust Company Limited v Blue Train Café Pty Ltd[52] and Premier Bay Pty Ltd v Commissioner of State Revenue,[53] Croft J addressed the effect of the 'additional safeguard' imposed by s 148(2A) of the VCAT Act, introduced with effect from 1 May 2018. In Premier Bay, Croft J summarised the position stating:[54]

... In summary, appeals from VCAT pursuant to s 148(1) of the VCAT Act are dependent on two important qualifications. An appeal must be on a question of law, and the Court must give leave to appeal. Since 1 May 2018, s 148(2A) has imposed an additional safeguard, being that the Court may only grant an application for leave to appeal if it is satisfied the appeal has a "real prospect of success". Courts have long recognised the necessary restraint this Court should show in reviewing VCAT decisions and have been concerned not to subvert the role entrusted by the legislature to the Tribunal by seeking out error. In addition to the leave requirement, a decision of a specialist tribunal must not be interfered with absent a vitiating error of law. Moreover, s 148 does not contemplate that the Court may substitute its own views on the evidence before the Tribunal, the relevance or significance of this evidence, or the inferences which may be drawn from it. It has been held that it is not open for this Court to entertain further debate as to the merits of the decision on the facts: the function of the Court being "limited to the exercise of a supervisory jurisdiction intended to ensure that the merits review which the Tribunal carried out was undertaken in accordance with its statutory obligations."[55]

45 In his judgment in The Trust Company, his Honour also endorsed[56] the view expressed by Osborn J in Gombac Group Pty Ltd v Vero Insurance Ltd[57] that:

The Tribunal was required to engage in the practical task of resolving fairly the issues which had been presented to it by the parties. On appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal. It is these realities to which a Tribunal must respond in its reasons.

46 Further, while it is necessary for the Court to be satisfied that the appeal has a 'real' (as opposed to a 'fanciful'[58]) prospect of success, that does not, as Richards J observed in Lucic v Henry,[59] dictate that leave must be granted. Her Honour stated:[60]

While it is necessary to be satisfied that the appeal has a real prospect of success, that does not dictate that leave must be granted.[61] Once the discretion to grant leave to appeal is enlivened, a number of other considerations may bear on whether leave should be granted in the particular case.[62] In this case, a relevant consideration is whether the questions of law set out in the notice of appeal were raised before the Tribunal.[63] The overriding consideration in determining an application for leave to appeal under s 148 is the justice of the case, to all parties, not only the applicant for leave.[64]

Questions of law raised in the applicant's proposed notice of appeal

47 In his notice of appeal,[65] the applicant identified six 'questions of law', only three of which are now relied on,[66] upon which the appeal is brought, as follows:[67]

Question of law #1: Section 82: A composite provision

1. Whether the Tribunal failed to notice - and construe - s 82(1) as a composite provision, which was comprised of two parts: the first which deems a person to have acquired a 100% acquisition in a landholder in certain circumstances (s 82(1)(a)) and the second, which requires the Commissioner (Tribunal) to consider whether it is appropriate to exercise the dispensing discretion (to reduce the extent of the acquisition) (s 82(1)(b)). Whether the dispensing discretion is part of the text of s 82(1) and not, as the Tribunal described it, as "an aspect of the context of the provision" (at [98]).

Question of law #2: Section 82: A deeming provision

1. Whether the first part of s 82(1), which is a deeming provision, is to be strictly construed and whether it is to be construed in accordance with its object as a specific anti-avoidance provision; and whether the second part of s 82(1), containing the dispensing discretion, is to be construed liberally.

Question of law #3: Failure to apply fundamental rules of statutory construction

1. Whether the Tribunal, in its construction of s 82, failed to apply fundamental principles of statutory interpretation, including the requirement to prefer the construction of a provision which would better promote the purpose or object of the provision over a construction that would not.

Question of law #4: The purpose of the dispensing discretion under section 82(1)(b)

1. Whether the Tribunal failed to appreciate - and articulate - the actual purpose and intended function of the dispensing discretion in s 82(1)(b) when construing s 82 as a whole, which required the Commissioner (the Tribunal) to take account of (and give appropriate weight to) each of the following considerations under s 82(1)(b):

(i) the sheer breadth of the deeming provision which, by its very language, has the acknowledged potential to apply to some transactions that Parliament never intended to be taxed; and

(ii) the inclusion of the dispensing discretion (in the hands of the Commissioner) as a means to ensure that those transactions that may technically fall within the terms of the deeming provision but which were never intended by Parliament to be captured by the provision are not, in fact, taxed; and

(iii) the expectation that the dispensing discretion would be exercised by the Commissioner (or the Tribunal) in accordance with: (a) the purpose of s 82 (being a specific anti-avoidance provision); (b) the purpose of the landholder provisions (which largely mirror the transfer duty provisions); and (c) the purpose of the transfer duty provisions; and

(iv) the dispensing discretion is not to be ignored, nor is its core purpose to be overlooked, with the result that innocent transactions wrongly become the subject of landholder duty under s 82; and

(v) the absurd or capricious results that would follow if s 82 were allowed to apply literally, uncontrolled by the responsible and mature application of the dispensing discretion. If this Tribunal decision is allowed to stand, every change of director for any landholding company (such as Barristers Chambers Limited) and every change of director for every corporate trustee of a landholding unit trust will give rise to a liability to landholder duty. Such an outcome is, on any view, absurd and obviously not one that was intended by Parliament when it introduced s 82 (and its predecessor, s 79(5)). In cases such as this, it was Parliament's intention that, assuming a prima facie liability arose under s 82, that the dispensing discretion would be exercised in full.

Question of law #5: The dispensing discretion: Considerations relevant to the exercise of this discretion

1. Whether considerations that are highly relevant to the exercise of the dispensing discretion in s 82(1)(b)[[68]] include the following (being considerations that the Tribunal failed to relevantly take into account):

(i) the purpose of the landholder provisions;

(ii) the operation of the landholder provisions, as largely mirroring the transfer duty provisions;

(iii) the purpose of s 82 as a specific anti-avoidance provision;

(iv) the absence of any change in the indirect beneficial ownership of the land held by the landholder following the alleged acquisition of control by the appellant;

(v) the absence of any entitlement (or any greater entitlement) for the appellant to a distribution of property on a notional winding up of the landholder as a result of the alleged acquisition of control by the appellant;

(vi) the need to perform a hypothetical winding up of the landholder before and after the alleged acquisition of "control" - to ascertain the extent to which (if any) the appellant had acquired, as a result of the acquisition of his alleged acquisition of "control", an entitlement (or an increased entitlement) to a distribution of land of the landholder on a winding-up;

(vii) the extent to which (if any) the alleged acquisition of control involved an alteration of legal or equitable rights of the landholder, or of the unitholders' units in the landholder;

(viii) whether the alleged acquisition of control was an event which merely continued an existing state of affairs in relation to the landholder's property without effecting any transaction over the landholder's property, and without effecting any transaction over the units held by the unitholders in the landholder;

(ix) in relation to the acquisition of the shares in the trustee company: the presence, and relevance, of s 72(2)(b)[[69]] - and whether this provision requires the acquisition of any shares in a trustee company (as here) to be completely disregarded (leaving the appointment as director as the only relevant fact justifying the imposition of a liability under s 82(1) in this case);

(x) the absence of any intention by the director to acquire (and the inability for the director to acquire) any indirect beneficial interest, or any greater indirect beneficial interest, in the land held by the landholder;

(xi) the absence of any intention by the appellant to receive (and the inability for him to receive) a distribution of land (or any greater distribution of land) from the landholder as a result of his appointment as director;

(xii) in accepting the appointment as director: the absence of any intention, or any contrived attempt, by the appellant to avoid landholder duty;

(xiii) the Commissioner's own public ruling on s 82, which provides as follows:

"The provisions can also apply to a person who is appointed to the board of directors of a landholder (or the corporate trustee of a landholder). Provided the ... unit holders have not made arrangements that allow the director to benefit, or exercise rights which confer benefits similar to holding an interest in the landholder, the Commissioner will take the view that the director has not acquired control (and made a relevant acquisition of an interest of 100%) as a result of such an appointment." (emphasis added [by applicant])

(xiv) where, as here, the unitholders who hold the majority of the units in the landholder control the appointment, and the continued existence, of the corporate trustee;

(xv) any pre-existing ownership by the appellant of an interest in the landholder (directly or indirectly) - ie, prior to the appellant becoming a director (in this case, the appellant already held, prior to the alleged acquisition of control, a 15% interest in the landholding unit trust); and

(xvi) in the case where the landholder is a private unit trust (as here), the fiduciary obligations owed by the trustee to the beneficiaries of the trust (and like fiduciary duties owed by a director of the trustee company).

Question of law #6: Internally inconsistent reasoning by the Tribunal

1. If the Tribunal's decision (that a liability arose for the appellant under s 82 when he became the sole director of the trustee company in March 2014) is correct, whether the Tribunal should have decided that a liability also arose under s 82 for the controllers (receivers) when they were appointed by the bank to the trustee company in April 2015, at which time the appellant ceased to have relevant control under s 82 (as per the Tribunal's finding at [74]) (being a liability to which the exemption in s 89D(b)(i) could not apply). Whether the Tribunal's reasoning in relation to the application of s 82 was selective, internally inconsistent and contradictory.

48 As will be noted, the three questions of law advanced are inter-related in that each pertains to s 82 and its construction and, in particular, the construction, purpose and grounds for exercise of (what the applicant refers to as) the 'dispensing discretion' conferred on the Commissioner in s 82(1)(b).

49 The companion grounds of appeal now relied on by the applicant are Grounds 1, 4 and 5, which are framed as follows:

GROUNDS OF APPEAL

1. Ground 1: The Tribunal failed to construe s 82 as a composite provision which required that the existence and potential exercise of the dispensing discretion be appreciated by the Tribunal, first, when construing s 82 at the outset and, secondly, when deciding whether, and if so how, s 82 could apply in this case.

Had the Tribunal done so, it would have not only approached the construction of s 82 differently, but it would have decided the matter differently.

1. Ground 2: Section 82 is a deeming provision - which the Tribunal failed to construe strictly and failed to construe as a specific anti-avoidance provision.

Had the Tribunal strictly construed the deeming provision and had the Tribunal read it as a specific anti-avoidance provision, the Tribunal would have decided the matter differently and it would have exercised the dispensing discretion in full.

1. Ground 3: The Tribunal failed to apply the fundamental rule of statutory construction that, where two interpretations are open, the one which would better promote the purpose or object of the provision is to be preferred to the one that does not.

Had the Tribunal applied this rule, the Tribunal would have decided the matter differently - and would have exercised the discretion in s 82(1) in full in favour of the appellant.

1. Ground 4: The Tribunal failed to take into appreciate, and articulate, the purpose and intended function of the dispensing discretion in s 82(1)(b). Had the Tribunal done so, it would have exercised that discretion in full in favour of the appellant.
2. Ground 5: The Tribunal failed to take into account many key considerations which are relevant to the dispensing discretion in s 82(1)(b). Had the Tribunal done so, the Tribunal would have exercised that discretion in full in favour of the appellant.
3. Ground 6: The Tribunal's misconceived (and selective) application of s 82 to the innocent facts of this case are borne out in the Tribunal's own inconsistent, and contradictory, failure to find that the subsequent appointment of receivers to the trustee company on 20 April 2015 was also (on the Tribunal's reading of s 82) an event that gave rise to a second liability to landholder duty under s 82 (to which s 89D(b)(i) could not apply).

50 Here again, the three grounds of appeal are also inter-related, contending for errors on the part of the Tribunal in construing s 82, failing to appreciate the purpose of 'dispensing discretion' conferred on the Commissioner in s 82(1)(b) and contending that the Tribunal (standing in the shoes of the Commissioner) failed to take into account relevant 'key considerations' when exercising the discretion in s 82(1)(b).

51 The applicant submits that leave to appeal should be granted because the appeal has a real prospect of success. In his Notice of Appeal, the applicant submitted, in support of his application for leave, that:[70]

The questions of law to be raised in this proposed appeal concern the composite nature of s 82 as a taxing provision as well as the nature and intended function of the discretion conferred upon the Commissioner by s 82. Section 82 has not been the subject of judicial consideration previously (and, further, is a provision that is unique to the Victorian Duties Act).

While the Tribunal did, in the end, exercise the discretion to reduce the percentage of the (deemed) acquisition (from 100% to 85%), the Tribunal failed to step back and first consider s 82 as a composite provision (which incorporated the discretion) - which was its first and fundamental task when considering whether or not to uphold the Commissioner's decision on the objection. As a result, the Tribunal failed to appreciate the dispensing discretion as an integral part of s 82(1) and it failed also to appreciate the intended scope and function of the discretion, which is to ensure that only those transactions that offend the landholder provisions are subject to landholder duty under s 82.

Separately to this, the Tribunal also failed, as is apparent from its decision, to have regard to any of the legal principles, or any of the authorities, that deal with dispensing discretions in tax legislation and the manner in which they are to be construed.

Had the Tribunal done so, the Tribunal would have, it is submitted, taken into account the many important considerations that ought to have been taken into account when deciding whether or not to exercise the dispensing discretion. ...

So serious were these errors, and these oversights, by the Tribunal that, had the Tribunal appreciated the true purpose and the intended function of the dispensing discretion, the Tribunal, acting reasonably and responsibly, would have had little or no hesitation in exercising the discretion in full - which would have led, in turn, to the complete setting aside of the assessment. The errors and the oversights by the Tribunal call out for correction on appeal. . . .

52 In seeking leave, the applicant also pointed out that when the Commissioner originally issued the Assessment he relied on s 78 of the Duties Act, and made no reference to s 82 (contrary to the Tribunal's statement that he did[71]). Rather, the applicant contended that the correct position was that the Commissioner, in his determination made in response to the applicant's objection, raised and relied on s 82 for the first time. It was only later, before the Tribunal, that the Commissioner in his written submissions 'abandoned his reliance on s 78'[72] and instead sought to defend the assessment solely on the basis that s 82 applied. In those circumstances, the applicant also sought to support his application for leave by submitting that:[73]

Reliance on s 82 was only an afterthought by the Commissioner (after the objection was lodged and once the Commissioner realised that there may not, in fact, have been any acquisition of units by Mr Tao in the unit trust). Accordingly, it was not until after the appellant's objection had been lodged that the Commissioner decided (for the first time) to rely on s 82 as a basis for the assessment. Section 82 had not, therefore, been the subject of any attention by the Commissioner in the audit. The Commissioner then proceeded to disallow the appellant's objection (both, on the basis that the appellant had acquired all of the units in the unit trust, and on the (new) alternate basis under s 82). In written submissions before the Tribunal, the Commissioner eventually abandoned his reliance on s 78 for the assessment (ie, the Commissioner accepted that there had not been any acquisition of units by the appellant).

. . .

53 It is unclear, however, how the latter matter, being essentially an observation about the 'background' to the merits review hearing and concerning the approach and conduct of the Commissioner, as opposed to any decision made by the Tribunal, is capable of demonstrating any error on the part of the Tribunal, when performing its role as a specialist tribunal, standing in the shoes of the Commissioner.

54 Before turning to address the questions of law/grounds of appeal relied on, and in order to more readily understand the rival contentions of the parties about the operation of the 'acquisition of control' provisions, it is necessary to say something about the legislative scheme and the iterative changes that have taken place since 1987, when the precursor 'land rich' provisions were first introduced in Victoria by way of amendments made to the Stamps Act 1958.

55 The parties are agreed that, for this proceeding, the applicable version of the Duties Act is authorised version No. 95, which incorporates amendments as at 1 December 2013 and was in force on 11 February 2014, being the date when the applicant acquired the shares in 66WR Pty Ltd.

The landholder provisions in Chapter 3 of the Duties Act

56 Under Chapter 3 of the Duties Act, headed 'Certain transactions treated as transfers', duty is charged on certain acquisitions of interests in landholders at the same rate as for a transfer of dutiable property under Chapter 2.[74]

57 Part 1 of Chapter 3, headed 'Introduction and Overview', contains one section, s 70, which provides for the 'imposition of duty' as follows:

70 Imposition of duty

This Chapter charges duty at the same rate as for a transfer of dutiable property under Chapter 2 on certain acquisitions of interests in landholders.

Note

Duty is chargeable under Part 2 on the acquisition by a person of certain interests in private landholders and public landholders that have land holdings in Victoria with an unencumbered value of $1 million or more.

The duty is chargeable at the general rate for a dutiable transaction under Chapter 2.

. . .

58 Under Part 2 of Chapter 3, headed 'Acquisition of Interests in Certain Landholders', duty is charged on the acquisition by a person of certain interests in private landholders and public landholders that have land holdings in Victoria with an unencumbered value of $1 million or more. The duty charged under Part 2 of Chapter 3, which is referred to as 'landholder' duty, arises when a 'relevant acquisition' is made.

59 There are three classes of 'relevant acquisition' set out in Division 2 of Part 2, being (1) an acquisition of a significant interest in a landholder (ss 78-80); (2) an acquisition of an economic entitlement (s 81), and (3) an acquisition of control (s 82). In the present case, only the third class is now relied on by the Commissioner.

60 Section 82, which deals with 'Acquisition of control', applies only to acquisitions of control over a 'private landholder'. The companion expressions 'landholder' and 'private landholder' and 'what are land holdings' are each defined in Part 2 of Chapter 3 of the Duties Act, as follows:

(1) For the purposes of this Part, a landholder is any of the following that has land holdings in Victoria with a total unencumbered value of $1 000 000 or more -

(a) a private unit trust scheme;

(b) a private company;

(c) a wholesale unit trust scheme;

(d) a listed company;

(e) a public unit trust scheme.

(2) For the purposes of this Part, a landholder may hold land -

(a) in accordance with section 72;

(b) under an uncompleted agreement in accordance with section 74;

(c) through a linked entity in accordance with section 75;

(d) through a discretionary trust in accordance with section 76.

(3) A private landholder is a landholder that is a private unit trust scheme, private company or wholesale unit trust scheme.

(4) A public landholder is a landholder that is a listed company or a public unit trust scheme.

1. What are land holdings?

(1) For the purposes of this Part, a land holding is an interest in land other than the estate or interest of a mortgagee, chargee or other secured creditor or a profit à prendre.

(2) An interest in land, however -

(a) is not a land holding of a unit trust scheme unless the interest is held by -

(i) a trustee of the scheme in the capacity of trustee; or

(ii) a custodian or other agent in the capacity as custodian or agent of the trustee of the scheme; and

(b) is not a land holding of a company unless the interest of the company in the land is a beneficial interest.

(3) This section is in aid of, but does not limit, the operation of any provision of this Part providing for constructive ownership of interests in land.

61 In the present case, the landholder is, relevantly, a private unit trust scheme, being the WCT Unit Trust, and the landholder holds the land, being the Lynbrook Property, in accordance with s 72. Relevantly, the land holding (i.e. the interest in land) of the WCT Unit Trust is held by 66WR Pty Ltd being 'a trustee of the scheme in the capacity of trustee' as provided by s 72(2)(a)(i).

62 For the purpose of the review before the Tribunal, the Commissioner relied solely upon the applicant having made a relevant acquisition in the WCT Unit Trust by way of an acquisition of control within the meaning of s 82.

63 Before turning to consider s 82 of the Duties Act, it is instructive to observe at the outset that when the 'land rich' provisions were first introduced in 1987, by way of amendments made to the Stamps Act 1958, and then later substituted by the formulation encapsulated in the Duties Act 2000, the 'land rich' provisions did not include a 'control' provision of the kind now embodied in s 82. It was the amendments to the Duties Act in 2004 that first introduced into the 'land rich' provisions the concept of a relevant acquisition by means of an 'acquisition of control'.

The land rich provisions were replaced by a new regime in 2004

64 In May 2004, the land rich provisions were replaced by a new regime (of 'land rich' provisions) enacted by the State Taxation Acts (Tax Reform) Act 2004 (Vic) (the 2004 Amending Act). In the second reading speech for the State Taxation Acts (Tax Reform) Bill 2004 (Vic), the (then) Treasurer, Mr Brumby, outlined the amendments to the Duties Act and stated, relevantly:[75]

Further, the rules for calculating the duty on high-value property transactions conducted through private companies and trusts are to be revised in light of current business practices, which have the effect of reducing taxation liabilities. The amendments to the land-rich tests will apply from this day.

The fundamental basis of stamp duty is that changes in beneficial ownership in land, however achieved, are subject to conveyance duty. For reasons of equity and revenue protection, it is essential that duties are applied equitably and effectively.

The amendments to the land-rich tests will ensure that an appropriate amount of tax is collected on all transactions in property involving land.

These changes comprise the best features of comparable provisions applying in other jurisdictions.

65 The 2004 Amending Act, substituted Parts 1 and 2 of Chapter 3 of the Principal Act, being the Duties Act 2000. As part of the new regime of land rich provisions substituted by the 2004 Amending Act, the provisions in Part 2 of Chapter 3, included, for the first time, provisions dealing with an 'acquisition of control', that were effectively inserted within s 79, which dealt with 'what is a "relevant acquisition"?'.

66 The Explanatory Memorandum for the State Taxation Acts (Tax Reform) Bill, which introduced the 2004 Amending Act, described the (new regime of the) land rich provisions embodied in Chapter 3 of the Duties Act, as follows:[76]

General

. . .

The Bill introduces anti-avoidance provisions intended to deter artificial and contrived schemes aimed at avoiding duty on a transfer or a dutiable transaction involving dutiable property to which Chapter 2 applies. They apply exclusively to Chapter 2. . . .

. . .

Clause Notes

PART 1 - PRELIMINARY

Part 1 of the Bill outlines the purposes of the Bill and contains the commencement provisions.

Clause 1 outlines the purposes of the Bill.

. . .

Clause 12 substitutes new Parts 1 and 2 in Chapter 3 of the Duties Act.

The main function of this clause is to replace the provisions in Chapter 3 of the Duties Act that impose duty on the acquisition of interests in certain companies and unit trusts (known as "the land-rich provisions").

PART 1 - INTRODUCTION AND OVERVIEW

70. Imposition of duty

This section introduces and explains the operation of Chapter 3. In particular it notes that duty at the general rate applying to Chapter 2 (see section 28) is chargeable on the acquisition of certain interests in -

• a private unit trust scheme; or

• a wholesale unit trust scheme; or

• a private company -

that has land in Victoria of $1m or more and if land held in all places is 60% or more of its property.

It also mentions that (although not yet repealed from the Act), Part 3 (Entitlement arising from capital reductions or rights alterations) and Part 4 (Allotment of shares by direction) no longer apply to transactions which occurred on or after 1 July 2002, as marketable security duty was abolished from that date.

PART 2 - ACQUISITION OF INTERESTS IN CERTAIN LANDHOLDERS

Part 2 of Chapter 3 contains the land-rich provisions.

The main purpose of the new Part is to replace the existing Part to strengthen the land-rich provisions, in order to protect the State's real property revenue base.

_The structure of the land-rich provisions is - _

• Division 1 [Landholders (ss 71-75)] - explains the type of landholding structure targeted by the land-rich provisions and how to determine if a landholder company or unit trust is 'land rich', this being one of the criteria necessary for the provisions to impose obligations and duty.

• Division 2 [Acquisitions of Interests in Landholders (ss 76-77)] - explains what are 'interests' in such landholders, how they are acquired and the extent of a 'significant interest' or a 'further interest', this being a further criterion necessary for the provisions to apply.

• Division 3 [Charging of Duty (ss 78-84)] - contains the duty charging provisions. It addresses such issues as -

• when a liability arises;

• what interests acquired are 'relevant acquisitions' for duty purposes;

• the requirements for lodging a statement of acquisition for assessment of duty;

• when duty is due and who is liable to pay;

• duty assessment.

• **Division 4 [**Exemptions, Concessions and Supplemental Provisions (ss 85-89C)] - lists the types of acquisitions that are exempt and not taken into account in determining if a 'relevant acquisition' has occurred. This Division also includes miscellaneous provisions relevant to working out a person's entitlements in respect of a landholder, valuation of property, some consequential provisions and concessions and some initiatives to protect the duty.
• Division 5 [Conversion of Public Unit Trust Schemes to Private Unit Trust Schemes (ss 89D-89F)] - addresses the potential for duty to be lost when a public unit trust scheme converts to a private unit trust scheme.
• Division 6 [Tax Avoidance Schemes (ss 86G-89J)] - introduces anti-avoidance provisions that apply generally across the land-rich provisions, and apply exclusively to those provisions.
• Division 7 [Registration of Unit Trust Schemes (ss 89K-89S)] - contains the machinery provisions for registration of certain unit trust schemes.

67 Following the passage of the 2004 Amending Act, the new 'acquisition of control' provisions were to be found in s 79 of the Duties Act, as subss (5)-(7), which provided, relevantly:

79. What is a "relevant acquisition"?

(1) For the purposes of this Part, a person makes a relevant acquisition if -

(a) the person acquires an interest in a land rich landholder -

(i) that is of itself a significant interest in the landholder; or

(5) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a land rich landholder, other than by a relevant acquisition dutiable under this Part, then on the acquiring of that control the person is taken, for the purposes of this Part to have made a relevant acquisition of an interest in the landholder of -

(a) 100%; or

(b) the lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(6) For the purposes of sub-section (5), a person acquires control over a landholder if they acquire the capacity to determine or influence the outcome or [sic] decisions about the landholder's financial and operating policies, taking into account -

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(7) Sub-section (5) applies regardless of interests held by any other person in the landholder.

68 The Explanatory Memorandum for the 2004 Amending Act, described the relevant 'acquisition of control' provisions in s 79, as follows:[77]

79. What is a "relevant acquisition"?

This section explains when acquisitions in a landholder give rise to a relevant acquisition, which is a significant interest (see section 76) or a further interest, these being the test for an interest to require lodgement of a statement and payment of duty on the interest acquired in a land-rich landholder. Not all interests acquired in such a landholder are relevant acquisitions.

Sub-section (1) is a guide to determining when a relevant acquisition arises.

Paragraph (a)(i) and (ii) deal with significant interests which may be acquired by -

• a single acquisition of an interest which itself is a significant interest; or

. . .

Sub-sections (5), (6) and (7) deal with circumstances whereby, without acquiring a significant interest, a person obtains control over a land-rich landholder by another means. The holders of interests usually cede control to the person and make such arrangements in respect of their interests that may allow the person to benefit or exercise rights which could confer benefits similar to holding an interest.

In such cases, the person is taken to have acquired a relevant acquisition of 100% or lesser percentage as determined.

"Control" is defined as a capacity to determine or influence the outcome or [sic] decisions about the landholder's financial and operating policies.

. . .

69 In 2005 and 2007, some further minor amendments were made to the land rich provisions. The Duties and Land Acts Amendment Act 2005 made an adjustment to the language used in s 79(6), which was one of the subsections dealing with an acquisition of control, by substituting the expression 'outcome of decisions' for the (erroneous) expression 'outcome or decisions.'

70 In 2007, relevantly for present purposes, the main purpose of the amendments brought about by the State Taxation Acts Amendment Act 2007 (Vic) was to deal with the situation where acquisitions of interests are made by trustees. Following the passage of the 2004 Amending Act, the definition of an interest in a landholder in s 76(1) was framed as follows:

76. What are "interests" and "significant interests" in landholders?

(1) A person has an "interest" in a landholder if the person has a beneficial entitlement (otherwise than as a creditor or other person to whom the landholder is liable), whether directly or through another person, to a distribution of property from the landholder on a winding up of the landholder or otherwise.

(2) A person who, by virtue of sub-section (1), has an interest in a landholder has a "significant interest" in the landholder if the person, in the event of a distribution of all the property of the landholder immediately after the interest was acquired, would be entitled to -

(a) in the case of a private unit trust scheme - 20% or more of the property distributed; or

(b) in the case of a landholder other than a private unit trust scheme - 50% or more of the property distributed.

71 The requirement in s 76(1) that a person has a 'beneficial entitlement' meant that a person who acquired an interest in a landholder in a purely trustee capacity had not made a relevant acquisition. Accordingly, the amendments introduced by the State Taxation Acts Amendment Act 2007 deleted 'beneficial' from the definition of interest in s 76(1)[78] and inserted after s 77(2) a new section, s 77(2AA),[79] which provided that:

(2AA) Without limiting subsection (1), a person is taken to obtain an interest beneficially if the person obtains the interest as trustee of a trust.

72 The Explanatory Memorandum for the State Taxation Acts Amendment Bill, which introduced the 2007 Amending Act, stated:[80]

PART 2 - DUTIES ACT 2000

Part 2 of the Bill makes amendments to the Duties Act 2000.

. . .

Clause 4 replaces the term "a beneficial entitlement" with "an entitlement" for the purposes of the land rich duty provisions.

Clause 5 Section 77 of the Duties Act sets out how an interest in a land rich landholder may be acquired. Clause 5 clarifies that where an interest in a land rich landholder is acquired by a trustee, the trustee (in addition to the beneficiaries) will be taken to have obtained an interest "beneficially". A trustee who holds or acquires an interest in a land rich landholder is to be treated as a separate person in respect of each trust of which the trustee is a trustee and the personal capacity of the trustee, if any.

73 In the second reading speech for the State Taxation Acts Amendment Bill in 2007, the (then) Treasurer, Mr Brumby, outlined the amendments to (inter alia) the Duties Act and stated, relevantly:[81]

This bill makes amendments to both the Duties Act 2000 and the Taxation Administration Act 1997. . . .

The current land rich provisions were introduced in 2004. They resulted from a significant review that identified arrangements being contrived to change the ownership of high-value city, suburban and regional properties, or any part interest in them, without payment of duty that such ownership changes should attract. It was believed at that time that the extent of the avoidance of this duty could exceed $50 million per annum.

The State Revenue Office has now had an opportunity to monitor these provisions in operation and consider any improvements. This has resulted in amendments that address concerns relating to the interpretation of the provisions. These amendments seek to clarify the intended application of the provisions to trustees and ensure that when a trustee acquires an interest in different capacities, the interests are not aggregated for assessment purposes unless the trustee has acquired the interests for the same persons or associated persons.

The amendments also clarify the charging provisions in relation to aggregated acquisitions.

In 2012 the land rich provisions were replaced by a landholder regime

74 In 2012, with the enactment of the Duties Amendment (Landholder) Act 2012 (Vic),[82] (the 2012 Amending Act), the land rich provisions in Parts 1 and 2 of Chapter 3 of the Duties Act were substituted by a new suite of provisions establishing the 'landholder' regime.

75 Relevantly, the suite of 'landholder' provisions introduced a new class of relevant acquisition being an acquisition of 'economic entitlement' (s 81) and removed the acquisition of control provisions from s 79 and re-stated them as a separate provision in s 82, expressed in similar terms.

76 The main purposes of the 2012 Amending Act were stated in the 2012 Amending Act as including, relevantly:

1 Purposes

The main purposes of this Act are -

(a) to amend the Duties Act 2000 -

(i) to make further provision for the imposition of duty on the acquisition of interests in certain land holding entities; and

(ii) to make other miscellaneous and consequential amendments; and

77 In the 2012 Amending Act, s 78 addressed 'what is a relevant acquisition?', s 79 dealt with 'what are interests and significant interests in landholders', s 80 addressed 'how may an interest be acquired', s 81 dealt with the new class of 'acquisition of an economic entitlement' (and when a person would be taken to have made a 'relevant acquisition') and s 82 dealt with 'acquisition of control' (and when a person would be taken to have made a 'relevant acquisition'). Relevantly, s 82 was framed as follows:[83]

(1) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a private landholder, other than by a relevant acquisition dutiable under this Part, then, on the acquiring of that control, the person is taken, for the purposes of this Part, to have made a relevant acquisition in the landholder of -

(a) 100%; or

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(2) For the purposes of subsection (1), a person acquires control over a private landholder if the person acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies, taking into account -

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the private landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(3) Subsection (1) applies regardless of interests or economic entitlements held by any other person in the private landholder.

78 The Explanatory Memorandum for the Duties Amendment (Landholder) Bill 2012, which introduced the 2012 Amending Act, described the new suite of landholder provisions embodied in Part 2 of Chapter 3, as follows:[84]

Division 2 - Amendments to Chapter 3 of the Duties Act 2000

This section of the Bill makes amendments to the Duties Act 2000 to introduce a landholder duty model in Victoria in place of the current land rich duty model.

Clause 5 substitutes new Parts 1 and 2 into Chapter 3 of the Duties Act 2000.

The main function of this clause is to substitute the "land rich" provisions in Chapter 3 of the Duties Act 2000, which impose duty on the acquisition of interests in certain land rich companies and unit trusts, with "landholder" provisions which impose duty on certain acquisitions of interests in land holding private and listed companies and trusts, and wholesale unit trust schemes.

The new Part 1 substitutes section 70 and provides for the imposition of duty. New section 70 introduces and explains the operation of Chapter 3. In particular, it notes that Chapter 3 charges duty at the same rate as for a transfer of dutiable property under Chapter 2 on certain acquisitions of interests in landholders.

A note to section 70 is inserted with a broad overview as to the operation of Chapter 3, providing that -

• duty is chargeable under Part 2 on the acquisition by a person of certain interests in private landholders and public landholders that have land holdings in Victoria with an unencumbered value of $1 million or more;

• the duty is chargeable at the general rate for a dutiable transaction under Chapter 2;

• . . .

Part 2 of Chapter 3 is substituted with a new Part 2 which contains the landholder provisions.

The structure of the landholder provisions is -

• Division 1 - Landholders - explains the type of landholding structure targeted by the landholder provisions and how to determine if a company or unit trust owns or is entitled to the requisite $1 million land holdings in Victoria.

• Division 2 - Charging of Duty - explains what are interests and significant interests in landholders, and how an interest may be acquired. It also addresses issues such as when a liability arises, what is a relevant acquisition and how duty is charged on relevant acquisitions in private and public landholders. It also contains provisions dealing with the acquisition of an economic entitlement or control for duty purposes. Division 2 also contains provisions dealing with the conversion of a private company to a listed company, or a private unit trust scheme to a public unit trust scheme.

• Division 3 - Exemptions and concessions - lists the types of acquisitions that are exempt. It also contains a number of concessions.

• Division 4 - Valuation and supplementary calculation provisions - This Division includes miscellaneous provisions relevant to working out a person's entitlement in respect of a landholder, valuation of land holdings, and arrangements relating to re-purchase facilities in widely held trusts and wholesale unit trust schemes.

• Division 5 - Tax avoidance schemes - contains an anti-avoidance provision that applies generally across the landholder provisions.

• Division 6 - Registration of unit trust schemes - contains the machinery provisions for registration of certain unit trust schemes.

New Division 1 of Part 2 of Chapter 3 of the Duties Act 2000 - Landholder

This Division establishes the type of landholding structure targeted by the landholder provisions and provides how to determine if a company or unit trust owns or is entitled to the requisite land holdings with an unencumbered value of $1 000 000 or more in Victoria.

New section 71 inserts the meaning of landholder. . . .

New section 72 defines a land holding as an interest in land, with exclusions relevant to interests of creditors or the right to use the land under a profit à prendre.

Subsection (2) excludes non-beneficial interests in land from the definition of land holding by requiring -

• the interest be held by the trustee of a unit trust scheme on trust for the scheme, or by a custodian or other agent of the trustee of the scheme on trust for the trustee of the scheme; or

• a company to hold it beneficially.

New section 73 deals with the meaning of land for the purposes of the landholder provisions.

. . .

New Division 2 of Part 2 of Chapter 3 of the Duties Act 2000 - Charging of Duty

This Division explains what are interests and significant interests in landholders and how an interest may be acquired. It addresses issues such as when a liability arises, what is a relevant acquisition and how duty is charged on relevant acquisitions in private and public landholders. It contains provisions dealing with the acquisition of an economic entitlement or control for duty purposes. Division 2 also contains provisions dealing with the conversion of a private company to a listed company or a private unit trust scheme to a public unit trust scheme.

New section 77 provides that liability for duty arises when a relevant acquisition (described in section 78) is made.

New section 78 defines the term relevant acquisition. It explains when acquisitions in a landholder give rise to a relevant acquisition, which is the acquisition of a significant interest (see section 79) or a further interest. Not all interests acquired in a landholder are relevant acquisitions. Subclause (1) sets out how to determine if a person has made a relevant acquisition in a landholder.

. . .

New section 80 describes how a person may acquire an interest (as described in section 79).

Subsection (1) states the interest must be acquired beneficially but can be acquired by any means.

Subsection (2) lists some means by which interests may be acquired, but is not exhaustive.

Subsection (3) clarifies that where an interest in a land rich landholder is acquired by a trustee, the trustee (in addition to the beneficiaries) will be taken to have obtained an interest beneficially.

. . . .

New section 81 provides for the acquisition of economic entitlements.

Section 81 is a method by which a relevant acquisition can be made and is anti-avoidance in nature. It operates to impose duty on transactions where the economic benefit of the ownership of land is acquired, whether directly or indirectly, other than by means of a relevant acquisition of an interest dutiable under Chapter 3. Section 81 applies in respect of private landholders. It does not apply in respect of public landholders.

A person can acquire an economic entitlement through the acquisition of shares or units in a landholder or as a result of an arrangement in relation to a landholder under which the person is entitled -

• to participate in the dividends or the income of the private landholder; or

• to participate in the income, rents or profits derived from the land holdings of the private landholder; or

. . .

The interest acquired under an economic entitlement is the proportion of the economic benefit referred to in the subsections above that the person is entitled to receive or acquire under the economic entitlement. . . .

The acquisition of an economic entitlement will give rise to a liability for duty where the entitlement acquired amounts to an interest of 50% or more in a private landholder. If the interest acquired is 50% or more, the person is taken to have made a relevant acquisition of that percentage or such other lesser percentage which is determined by the Commissioner to be appropriate in the circumstances.

. . .

New section 82 provides for the acquisition of control.

Section 82 contains the control provision. This provision existed under the former land rich duty provisions, and deals with circumstances whereby, without acquiring a significant interest, a person obtains control over a private landholder by another means. For example, the holders of interests may cede control to the person and make such arrangements in respect of their interests that would allow the person to benefit or exercise rights which could confer benefits similar to holding an interest. It does not apply in respect of public landholders.

In such cases, the person is taken to have acquired a relevant acquisition of 100% or a lesser percentage as determined by the Commissioner to be appropriate in the circumstances.

Control is defined as a capacity to determine or influence the outcome of decisions about the landholder's financial and operating policies.

. . .

New Division 3 of Part 2 of Chapter 3 of the Duties Act 2000 - Exemptions and Concessions

Division 3 lists the types of acquisitions that are exempt. It also contains a number of concessions.

**New section 89D sets out the circumstances under which an acquisition by a person of an interest in a landholder will be an exempt acquisition as follows - **

• if the way the interest was acquired would have resulted in no ad valorem duty under Chapter 2 had the acquisition been of the landholder's land (e.g. by distribution from a deceased person's estate (see section 42));

• if the interest was acquired by the person in the capacity as trustee or receiver in bankruptcy, liquidator or an executor or administrator of a deceased estate;

• if the interest was acquired under a compromise or arrangement (conditions apply);

• if the interest was acquired as part of a pro rata allocation to all unit holders or shareholders.

New section 89E provides a concession from duty in circumstances where the Commissioner is satisfied that there is an anomalous duty outcome arising from the application of Part 2 of Chapter 3 to a particular transaction and, because of that anomaly, the duty payable under Chapter 3 is greater than the duty that would have been payable under Chapter 2 if the subject of the acquisition had been a direct transfer of the land. In these circumstances, the Commissioner has a discretion to reduce the duty payable on the acquisition under Chapter 3 to an amount which is not less than the duty that would have been payable under Chapter 2 had the subject of the acquisition been a direct transfer of the land to the person. If a higher duty outcome is intended from the operation of Chapter 3, then no concession is available.

. . .

79 When introducing the 2012 Amending Act, the (then) Treasurer, Mr Wells, in his second reading speech, referred to the transition from the land rich provisions to the landholder regime and stated:[85]

As part of the 2011-12 state budget the government announced that it would reform Victoria's land-rich duty provisions by adopting a land-holder model from 1 July 2012.

This bill enacts those changes, securing a simpler, more equitable and efficient system for taxing the indirect acquisition of land through companies and unit trusts in Victoria.

The current land-rich model was introduced in 1987 to deal with the avoidance of land transfer duty through the acquisition of shares in entities that owned land. At the time, these provisions were largely seen as anti-avoidance in nature. However, they have now evolved into a distinct head of duty, so that all acquisitions in land are subject to duty regardless of how the land is acquired.

Under the current land-rich model a liability for duty arises where a person makes a 'relevant acquisition' in a private company, private unit trust scheme, or wholesale unit trust scheme which holds land in Victoria with an unencumbered value of $1 million or more and the value of its land-holdings (whether within or outside Australia) comprises at least 60 per cent of the entity's assets. Generally a relevant acquisition is the acquisition of an interest in a private unit trust scheme of 20 per cent or more, or 50 per cent or more in a wholesale unit trust scheme or a private company.

The current land-rich provisions are complex and require taxpayers to engage in complicated valuations and calculations to establish the proportion of their assets represented by land. The land ratio test can also provide an incentive for some taxpayers to structure their transactions to avoid meeting this requirement. This distorts business and investment decisions and reduces the capacity of the model to provide equitable treatment for all taxpayers.

Having carefully considered these issues, the government now believes Victoria would be better served by adopting a land-holder model. The new model will remove the land ratio test so that duty applies simply where a person makes a relevant acquisition in an entity that holds land in Victoria with an unencumbered value of $1 million or more. It will also extend the categories of taxable entity to include an acquisition of 90 per cent or more in listed companies and listed unit trusts. However, these acquisitions will be subject to duty at a concessional rate (that is, 10 per cent of the land transfer rate).

. . .

Finally, this government is committed to making it as easy as possible for taxpayers to comply with their obligations under Victoria's tax laws. This bill supports this commitment by enacting changes which remove the complexities of the current land-rich system and provides greater certainty and transparency by defining key terms such as 'fixtures' and clarifying the application of a range of provisions. This will make it easier for taxpayers to understand their obligations and reduce compliance costs for taxpayers going forward. The land-holder duty reforms will provide Victoria with a more efficient and sustainable revenue base.

The parties' rival contentions concerning the 'acquisition of control' provisions in s 82

80 Before the Court, during oral submissions, counsel for the Commissioner referred to the second reading speech for the bill for the 2012 Amending Act and focused attention on the portion the Treasurer's statement shown in bold italics (above), and submitted that it makes clear:[86]

... that the purpose of s 82 in its amendments as it had evolved in 2012 changed it from an anti-avoidance provision primarily to its own head of duty.

81 Counsel elaborated further on that submission stating:[87]

So the Commissioner contends that there remains an element of anti-avoidance in s 82, and that certainly is relevant to the construction of its terms. However, the Commissioner also contends that the purpose of s 82 is in the history so that it is read as a discrete head of taxation. And there are policy reasons made clear in the second reading speech why it ought to be read as discrete alternative bases for tax.

And the evident policy decision that was made was that the previous land rich provisions were too complicated, effectively. They were too complicated in their application so that the policy decision was made that the relevant liability to taxation requirements be simplified. And they'd be simplified by way of three different categories of relevant acquisition tests that are to be applied.

. . .

... Now, it is accepted that the acquisition of control is a benefit that is different from the acquisition of a beneficial interest in the private landholder. They're separate benefits. They're different benefits.

But the Commissioner contends that the purpose of the s 82 basis of tax is to bring to tax those acquisitions which give to the person who makes the acquisition the benefit of being able to control that entity which owns the land.

82 Accordingly, the Commissioner contends that 'the control provisions are intended to operate on a stand-alone basis (so as to bring to tax changes in control of the private landholder), and not on an exclusively anti- avoidance basis (so as to bring to tax only changes in beneficial ownership).'[88]

83 Counsel for the applicant disputed the correctness of the Commissioner's argument that s 82 as framed after 2012 was a separate head of duty. He submitted:[89]

And that with respect is not correct. What happened in 2012 is that the provisions moved from land rich provisions to landholder provisions. And it was said that the land rich provisions in their original incarnation in 1987 and in the years after, and Your Honour has referred to it iteratively changing over the years and growing, were introduced as anti-avoidance provisions.

And what was sometimes said after the 2012 amendments, which did away with this 60 per cent test, so you no longer had to be land rich, and just introduced a 50 per cent or more change of ownership or 20 per cent or more change of - well, acquisition of interests in the relevant landholder. So that was in some respects said to move from an anti-avoidance provision to a new taxation provision.

But s 82 has always been an anti-avoidance provision. Nothing has changed in relation to s 79(5) when it was brought in in 2004 and s 82(1), which was, as Your Honour will have seen, in completely the same terms in 2012. It remains very much a specific anti-avoidance provision, even if some of the other provisions could be regarded as revenue collection provisions.

84 Counsel for the applicant then referred to Croft J's decision in BPG Caulfield,[90] where in the context of the newly introduced 'economic entitlement' provision in s 81 his Honour observed that the 2012 amendment bill did not seek to create a new tax or significantly amend the existing one, but said rather that the provisions performed something of a 'gap' filling role.[91] Counsel for the applicant submitted that, in a similar vein, 's 82(1) has a very specific anti-avoidance gap-filling role to play in which the discretion plays an important part.'[92]

85 Counsel for the applicant also took issue with the suggestion made by counsel for the Commissioner during oral submissions that the construction of s 82 generally is not within the terms of this appeal. In that regard, counsel for the applicant referred the Court to the decision of the Court of Appeal in Commissioner of State Revenue v Mondous[93] where McLeish JA observed, when addressing s 148 of the VCAT Act, that the Supreme Court has consistently permitted the raising of new points on appeal 'provided it is in the interests of justice to do so.'

86 In Mondous, it was asserted that a point could not be raised on appeal when it had been the subject of agreement between the parties below. McLeish JA (with whom McDonald AJA agreed) said:[94]

1. The Commissioner contended that there could be no error of law in the Tribunal deciding a matter on an agreed legal and factual basis. Without an error of law, it was pointed out, there is no basis for an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998. In Hussain v Minister for Foreign Affairs, the Full Court of the Federal Court found that there was 'substance' in a similar submission made in respect of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), which provides for appeal on a question of law from the Administrative Appeals Tribunal to the Federal Court.[95] In that case, the tribunal had proceeded upon the basis of an effective concession by the applicant as to the validity of certain certificates, which he then sought to impugn upon appeal.
2. However, no rigid rule applies in the context of s 44 of the Commonwealth Act.[96] Moreover, this Court has consistently permitted the raising of new points on appeals under s 148 of the Victorian Civil and Administrative Tribunal Act 1998, provided it is in the interests of justice to do so.[97] That is consistent with the view that, if a conclusion reached by the Tribunal is affected by legal error, it cannot lose its character as such merely because the source of the error lay in the submissions of the parties, or their common approach to the issue in question. Those circumstances might explain, but do not deny, the error.
3. While there is no jurisdictional bar, therefore, the question remains whether the unsuccessful party, having contributed to the error, may yet seek to have it corrected on appeal. This is a variation, or perhaps an extreme example, of the situation that arises when an unsuccessful party seeks on appeal to raise an argument not advanced at first instance. Ordinarily, of course, that is not permitted.
4. However, exceptionally, it may be expedient in the interests of justice to permit a party to raise on appeal an argument that was not advanced below. That will require showing at least that the point could not possibly have been met by evidence.[98]

87 In the present case, the proper construction of s 82 is central to the Court's consideration of the questions of law and the grounds of appeal raised by the applicant, and in particular those pertaining to the 'dispensing discretion' in s 82(1)(b).

88 In those circumstances, given the divergence in views between the respective parties as to the construction of s 82, the Court indicated that it would be assisted by each party filing, at a convenient point following the hearing, a short submission on the construction of s 82. Accordingly, on 6 May 2025 each party filed a short further submission.[99]

89 In the Commissioner's submissions on the construction of s 82, the Commissioner contended that upon the enactment of the landholder scheme in 2012, 'the evident purpose of the control provisions was to operate as a discrete head of duty.'[100] In this regard, reference was made to the explanatory memorandum for the Bill which introduced the 2012 Amending Act which stated that s 82 '... deals with circumstances whereby, without acquiring a significant interest, a person obtains control over a private landholder by another means.'[101] Further, it was said, the opening words - 'Despite anything to the contrary in this Part ...' - make clear 'that s 82 is intended to operate, independently of the other provisions.'[102] It will be noted, however, that those opening words were also present in s 79(5) when the 'acquisition of control' provisions were first introduced in 2004.

90 The Commissioner observed that the applicant's case, as developed at the hearing−[103]

relies heavily on the contention that the legislative purpose of s 82 is related to, or is somehow to be determined by, the concept of 'beneficial interest' so that s 82 should be taken to apply only in the event that the acquisition, directly or indirectly, of control over a private landholder also brings about a change in beneficial ownership.[104]

91 The Commissioner contended that the applicant's contention about the role of beneficial interest should be rejected for two reasons. First, the statutory focus of the class of interest provided for in the text of s 82 'is exclusively on control and not beneficial interest'.[105] Secondly, the Commissioner submitted:[106]

the Applicant's contention is also inconsistent with the process of statutory construction to be undertaken when a legislative purpose is to guide the constructional exercise. In Commonwealth of Australia v Yunupingu,[107] Gordon J stated the orthodox position thus: 'A purpose ascertained from history cannot override the text. The purpose must be evident in the text.'[108] Yet nothing in the text of s 82 (or Chapter 3) supports the alleged purpose that an additional and extraneous class of acquisition of 'beneficial interest' is any kind of overlay to the acquisition of a control interest. In these circumstances, it is not open to the Court (with respect) to do damage to the words of s 82 (by imposing some requirement in respect of beneficial interest that supplements the clear and simple requirement of control) just so as to avoid tax liabilities that might be thought, from an irrelevant policy perspective, to be undesirable.

92 The applicant, on the other hand, submitted that, s 82 does not impose 'its own head of duty'; rather he contended:[109]

This "control provision" was first inserted as a specific anti-avoidance provision in 2004, and it was simply re-enacted (as the same specific anti-avoidance provision) in the 2012 amendments. At no stage did the control provision transform itself from a specific anti-avoidance provision to a provision imposing "its own head of duty". That submission should never have been made by the Commissioner - there is simply no authority for it.

93 Further, the applicant submitted:[110]

An anti-avoidance provision does not, as all tax lawyers know, extend the tax base. An anti-avoidance provision (general or specific) is intended to protect an existing tax base (which has been created by the general charging provisions, based on a particular tax policy, e.g. a policy to tax transfers of land). Section 82 needs to be appreciated in this light. That is, an anti-avoidance provision such as s 82 is not intended to impose a tax liability on any transaction that would not, had it been effected by more conventional means, have been subject to landholder duty under the ordinary charging provisions. Importantly, the ordinary charging provisions do not impose landholder duty on the appointment of a new director, and they do not impose landholder duty on the transfer of shares in a trustee company (as to the latter, refer the Applicant's submissions at [26](vii) in the Applicant's Outline of Submissions, 18 October 2024, and to the oral submissions made at the hearing[111]).

Consideration and analysis - the proper construction of s 82

94 Given the rival views, it is instructive to look at Croft J's judgment in BPG Caulfield,[112] where the Court was considering the newly introduced acquisition of an 'economic entitlement' provision in s 81. However, it should be noted that in BPG Caulfield his Honour made clear that, in his consideration of s 81, he did not consider the 'class of relevant acquisition' under s 82, being the acquisition of control provision, observing that it is of no relevance and can be put to one side.[113]

95 Relevantly, Croft J, when dealing with the introduction of the 2012 Amendment Act, stated:[114]

[26] Two reasons were identified by the Minister in his Second Reading Speech for the replacement of the land-rich provisions with the present landholder regime. The first was that the land-rich provisions were "complex and require[d] taxpayers to engage in complicated valuations and calculations to establish the proportion of their assets represented by land".[115] The second is that the "land ratio test" could "provide an incentive for some taxpayers to structure their transactions to avoid" it.[116] The objectives of the new provisions were, therefore, said to be "increasing equity and efficiency in the Victorian tax system".[117]

[27] As a result of these concerns, the "land ratio test" - that is, the calculus by which it was determined if 60 per cent or more of the value of a landholder's property was land - was abolished. It was replaced by the current system, which looks to whether the taxpayer acquired a significant interest or economic entitlement in a landholder, regardless of whether or not that landholder would previously have been classified a "land-rich landholder". The apparent intention - and ultimate effect - of maintaining the existing minimum land value and acquisition thresholds was that of the two criteria previously identified, only the second was abolished, the first remained - the first being that the taxpayer had to acquire an interest of at least 50 per cent - or 20 per cent in the case of a private unit trust scheme - in another entity.

[28] Significantly, and particularly significant in the present context, the Amendment Act did not seek to create a new tax or significantly amend the existing one. On the contrary, as the Minister made clear in his Second Reading Speech, "we have maintained the minimum land value and acquisition thresholds that currently exist under the land-rich system".[118] Moreover, he said that the amendments would safeguard - not augment - revenues.[119] Further, and also of particular significance, there is no suggestion that the amendments would increase revenues by creating new heads of liability. In this respect, it is important to note that in the Explanatory Memorandum to the new legislation, s 81 is described as being anti-avoidance in nature so as to operate to:[120]

... impose duty on transactions where the economic benefit of the ownership of land is acquired, whether directly or indirectly, other than by means of a relevant acquisition of an interest dutiable under Ch 3.

In my view, this passage in the Explanatory Memorandum confirms that the intention[121] of the legislature was to render dutiable both "direct interests" [a reference to ss 78 to 80] - such as shareholdings - and "synthetic interests" [a reference to s 81] - such as rights to participate in the proceeds of sale - in landowners, but not so as to distinguish between the two. In other words, the intention was to extend the reach of the provisions to entitlements which, whilst falling short of an interest in a landholder for the purposes of s 78, nonetheless amounted to an equivalent interest in economic terms. Moreover, for the reasons which follow, I am of the view that this intention is also manifest in the words of the statute itself and not a matter to be divined solely from the extrinsic materials, such as the Explanatory Memorandum.

96 Further, his Honour observed that while the Treasurer in the second reading speech had 'explained, in broad terms, the basis of Pt 2 of Ch 3 of the Duties Act 2000, which includes ss 78, 79 and 81',[122] he said:[123]

1. The fact that the then Treasurer did not specifically address the provision relating to economic entitlements is, in my view, at least consistent with the position advanced by BPG that s 81 is not intended to create a new head of liability, but, rather, to operate consistently with the structure provided for in the Amendment Act, particularly with reference to ss 78 and 79 of the Duties Act 2000. . . . In my view, this position is actually supported by the Commissioner's submission with respect to the Explanatory Memorandum to the Amendment Act. In that submission, it is said that the Explanatory Memorandum relevantly stated that s 81 "is a method by which a relevant acquisition can be made and is anti-avoidance in nature", and that the section "operates to impose duty on transactions where the economic benefit of the ownership of land is acquired, whether directly or indirectly, other than by means of a relevant acquisition of an interest dutiable under Ch 3". In other words, s 81 enables the Commissioner to approach the substance of transactions involving "certain landholders" for the purpose of Pt 2 of Ch 3 of the Duties Act 2000 in terms of the actual benefit flowing from the transaction, whether the benefit is provided by the direct acquisition of an interest in the landholder or is provided by, what is described by BPG, as a "synthetic interest". And in this context, it is apposite to recall the speech of Lord Wilberforce in the House of Lords in Ben-Odeco Ltd v Powlson [1978] 1 WLR 1093 where his Lordship said:[124]

An important principle of the laws of taxation is that in the absence of clear contrary direction tax payers in, objectively, similar situations should receive similar tax treatment.

Clearly, without provisions dealing with, so-called, "synthetic interests", there would be a significant gap in the machinery provided for in ss 78 and 79 of the Duties Act 2000. For the reasons which follow, I am of the view, however, that s 81 fills this gap by enabling a broader perspective which enables the actual benefit of a transaction to be taken into account, rather than the process constrained by viewing only the means by which that benefit was obtained, and then only to a limited extent in terms of the provisions of ss 78 and 79. However, the important point is that the gap is only filled by s 81, and its provisions do not build any new machinery, they merely make the provisions of ss 78 and 79 work more broadly in the manner I have described generally.

97 In my view, the Treasurer's reference in the (2012) second reading speech to 'a distinct head of duty' (reproduced below), when read in context, appears to be a reference to, or description of, the suite of landholder provisions in Part 2 of Chapter 3, rather than a reference to any one of the three classes of 'relevant acquisition' set out in ss 78-80, s 82 (or s 81) in isolation:

The current land-rich model was introduced in 1987 to deal with the avoidance of land transfer duty through the acquisition of shares in entities that owned land. At the time, these provisions were largely seen as anti-avoidance in nature. However, they have now evolved into a distinct head of duty, so that all acquisitions in land are subject to duty regardless of how the land is acquired.

98 This evolution can be observed in the language in which s 70 (in Part 1 of Chapter3), concerning the imposition of duty, has been expressed over time, and the accompanying notes, as set out in the side-by side-comparison set out below.

Duties Act 2000

Version No. 001 incorporating amendments as at 1 July 2001 (Act as enacted)

Duties Act 2000

Version No. 033 incorporating amendments as at 16 June 2004 (as amended by State Taxation Acts (Tax Reform) Act 2004)

Duties Act 2000

Version No. 088 incorporating amendments as at 1 July 2012 (as amended by Duties Amendment (Landholder) Act 2012)

CHAPTER 3 CERTAIN TRANSACTIONS TREATED AS TRANSFERS

CHAPTER 3 CERTAIN TRANSACTIONS TREATED AS TRANSFERS

CHAPTER 3 CERTAIN TRANSACTIONS TREATED AS TRANSFERS

PART 1 - INTRODUCTION AND OVERVIEW

PART 1 - INTRODUCTION AND OVERVIEW

PART 1 - INTRODUCTION AND OVERVIEW

This Chapter charges duty on certain transactions that are not dutiable transactions under Chapter 2.

This Chapter charges duty at the same rate as for a transfer of dutiable property under Chapter 2 on certain transactions which are not dutiable transactions under Chapter 2.

This Chapter charges duty at the same rate as for a transfer of dutiable property under Chapter 2 on certain acquisitions of interests in landholders.

Duty is chargeable under Part 2 on the acquisition by a person of certain interests in -

• a private unit trust scheme; or
• a wholesale unit trust scheme; or
• a private company -

that has land holdings in Victoria with an unencumbered value of $1 million or more and the land holdings in all places of which comprise 60% or more of the unencumbered value of all its property.

Duty is chargeable under Part 2 on the acquisition by a person of certain interests in private landholders and public landholders that have land holdings in Victoria with an unencumbered value of $1 million or more.

The duty is chargeable at the general rate for a dutiable transaction under Chapter 2.

The duty is chargeable at the general rate for a dutiable transaction under Chapter 2.

Duty was chargeable under Parts 3 and 4 on certain transactions occurring before 1 July 2002.

Duty was chargeable under Parts 3 and 4 on certain transactions occurring before 1 July 2002.

Duty is charged under Part 5 on the allotment of units or shares that confer a land use entitlement

99 As will be noted, when the 'acquisition of control' provisions were introduced in 2004, s 70 continued to employ the thrust of the original wording that applied when the Duties Act 2000 was enacted (i.e., s 70 imposed duty on certain transactions which are not dutiable transactions under Chapter 2), but following the 2012 amendments that language ceased to be used and s 70 simply imposed duty 'on certain acquisitions of interests in landholders'.

100 This evolution is also manifested in the legislative changes to Part 2 of Chapter 3 that were effected in 2012, insofar as the 'acquisition of control' provisions were detached from the yoke of the direct acquisition/significant interest provisions in s 79, and re-established in s 82 as a stand-alone provision, embodying a similar (but not the same) text as before. In addition, the new 'acquisition of economic entitlement' provisions were inserted - also as a separate or stand-alone provision in new s 81 - so that after the 2012 amendments, Part 2 of Chapter 3 operated to charge duty 'on certain acquisitions of interests in landholders' by means of one or other of the three classes of acquisition that Croft J had identified.

101 To demonstrate this evolution, the 'side-by-side' comparison set out below conveniently reproduces the text of both the land rich model version of the 'acquisition of control' provisions as they appeared in the Duties Act after the 2007 Amendments (left column) and the landholder model 'acquisition of control' provisions as they appeared in the Duties Act following the 2012 Amendments (right column).

102 Under the land rich model, Division 2 of Part 2 of Chapter 3 dealt with the 'Acquisition of interests in landholders' - the concepts of 'interests' and 'significant interests' were explained in s 76, and s 77 addressed how an interest may be acquired. Division 3 of Part 2 of Chapter 3 dealt with 'Charging of duty', and relevantly, s 78 provided that a liability for duty arises 'when a relevant acquisition is made' - and s 79 dealt with what is a 'relevant acquisition'. The (then newly-introduced) 'acquisition of control' provisions were encapsulated in subss (5)-(7) of s 79, as a deemed relevant acquisition, along with the acquisition of an 'interest' and 'significant interest' provisions that were addressed in subss (1) to (4). It will be noted that, as framed in 2004, in circumstances where the control provision in subs (5) operated, the acquirer was expressed as being 'taken' for the purposes of Part 2 of Chapter 3 'to have made a relevant acquisition of an interest in the landholder of . . .'.

103 When the landholder model provisions were introduced in 2012, there was a change to the structure or architecture of Chapter 3 in that Division 2, which was headed 'Charging of duty', encapsulated the provisions that formerly were contained in Division 2 (Acquisition of interests in landholders), and Division 3 (Charging of duty) and s 81 contained the new 'acquisition of economic entitlements' provision and s 82 contained the 'acquisition of control section' in terms similar to, but not the same as, the original formulation in the old subss 79(5)-(7).

Land rich provisions of the Duties Act

Landholder provisions of the Duties Act

76 What are interests and significant interests in landholders?

79 What are interests and significant interests in landholders?

79. What is a "relevant acquisition"? [includes acquisition of control provisions in subss (5)-(7) as set out below]

(5) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a land rich landholder, other than by a relevant acquisition dutiable under this Part, then on the acquiring of that control the person is taken, for the purposes of this Part to have made a relevant acquisition of an interest in the landholder of -

(1) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a private landholder, other than by a relevant acquisition dutiable under this Part, then, on the acquiring of that control, the person is taken, for the purposes of this Part, to have made a relevant acquisition in the landholder of -

(b) the lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(6) For the purposes of subsection (5), a person acquires control over a landholder if they acquire the capacity to determine or influence the outcome of decisions about the landholder's financial and operating policies, taking into account -

(2) For the purposes of subsection (1), a person acquires control over a private landholder if the person acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies, taking into account -

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(b) any practice or behaviour affecting the private landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(7) Subsection (5) applies regardless of interests held by any other person in the landholder.

(3) Subsection (1) applies regardless of interests or economic entitlements held by any other person in the private landholder.

104 As will be noted, in the 2012 landholder model provisions, not only was s 82 now a separate provision from the direct interest provisions in ss 78-80 (dealing with relevant acquisitions acquired by means of 'interests' that are 'significant interests' in landholders), s 82 operated by reference to 'private landholders' only and described the (result of the) acquiring of control as the person being 'taken, for the purposes of this Part, to have made a relevant acquisition in the landholder' rather than 'taken, for the purposes of this Part to have made a relevant acquisition of an interest in the landholder'[127] as was formerly the case.

105 Accordingly, following the introduction of the 2012 landholder model provisions there were three types (or as Croft J described them in BPG Caulfield, 'classes') of 'relevant acquisition' for landholder duty purposes being:

(1) a relevant acquisition of an interest that is a significant interest in a landholder (ss 78-80);

(2) an acquisition of an economic entitlement in or in relation to a private landholder, other than by a relevant acquisition dutiable under Part 2, whereby the person is taken, for the purposes of Part 2, to have made a relevant acquisition of a percentage interest in the landholder (s 81), and

(3) an acquisition of control over a private landholder, other than by a relevant acquisition dutiable under Part 2, whereby the person is taken, for the purposes of Part 2, to have made a relevant acquisition in the landholder (s 82) of 100% or a lesser percentage determined by the Commissioner to be appropriate.

106 The net cast by ss 78-80 in respect of a relevant acquisition of an interest that is a significant interest in a landholder applies to each type of landholder described in s 71, be it a private unit trust scheme, a private company, a wholesale unit trust scheme, a listed company and a public unit trust scheme, but different threshold entitlements apply depending on which class is being considered (see s 79(2)(a), (b) and (c)). However, in the case of both an acquisition of an economic entitlement under s 81 and an acquisition of control under s 82, those provisions are expressed to apply only to a 'private landholder', which term is defined in s 71(3) as follows:

(3) A private landholder is a landholder that is a private unit trust scheme, private company or wholesale unit trust scheme.

Further, the reference to a 'landholder' in the definition entails that the relevant private 'landholder' (e.g., the private unit trust scheme) must have 'land holdings in Victoria with a total unencumbered value of $1,000,000 or more': s 71(1).

107 Further, in the case of both an acquisition of an economic entitlement under s 81 and an acquisition of control under s 82, each such economic entitlement or acquisition of control is 'taken' (or deemed), for the purposes of Part 2, to be a relevant acquisition because in each case the acquisition was made 'other than by a relevant acquisition dutiable under Part 2' of Chapter 3 (i.e., ss 78-80).

108 Understood in that way, each of those provisions in s 81 and s 82 conveys some notion of the relevant transaction or arrangement falling outside the 'direct interest' (to adopt Croft J's nomenclature) net cast by ss 78-80, and thereby avoiding the consequence of it being a 'relevant acquisition' that would be dutiable under Part 2, were it not for s 81 or s 82 expressly treating it as a relevant acquisition. Further, it is implicit in the language used in the framing of the 'taken, ... to have made a relevant acquisition' provisions in ss 81 and 82, that transactions or arrangements of that kind were intended to be 'caught' by Part 2 but the legislature recognised that they would not actually be captured within the 'direct interest' net cast by ss 78-80. In respect of an acquisition of control over a private landholder, by a means other than via the acquisition of a significant interest, each of the 2004 and the 2012 Explanatory Memoranda cited as an example:[128]

For example, the holders of interests may cede control to the person and make arrangements in respect of their interests that would allow the person to benefit or exercise rights which could confer benefits similar to holding an interest. ...

In such cases the person is taken to have acquired a relevant acquisition of 100% or a lesser percentage as determined by the Commissioner to be appropriate in the circumstances.

109 The reference in the Explanatory Memorandum to the posited arrangements enabling the person acquiring control to 'exercise rights which could confer benefits similar to holding an interest' suggests that when considering arrangements the subject of the acquisition of control provision in s 82, the notion of an interest in a landholder as described in ss 78-80 may have some relevance but as a comparator only.

110 The proper approach to statutory construction was outlined by the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue[129] as follows:

1. This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself.[130] Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text.[131] The language which has actually been employed in the text of legislation is the surest guide to legislative intention.[132] The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision,[133] in particular the mischief[134] it is seeking to remedy.

111 Accordingly, I turn to consider the text of s 82, which provides as follows:

(1) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a private landholder, other than by a relevant acquisition dutiable under this Part, then, on the acquiring of that control, the person is taken, for the purposes of this Part, to have made a relevant acquisition in the landholder of -

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(2) For the purposes of subsection (1), a person acquires control over a private landholder if the person acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies, taking into account -

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the private landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(3) Subsection (1) applies regardless of interests or economic entitlements held by any other person in the private landholder.

112 The concept of 'control' embodied in s 82 is framed in similar terms to the statutory definition of control in s 50AA of the Corporations Act 2001 (Cth), which had its origin in Accounting Standard 1024: Consolidated Accounts. In Hancock v Rinehart, Brereton J had regard to the s 50AA statutory definition of control and described the general concept of control as being concerned with the (practical) ability of an entity to determine the outcome of decisions of the entity. Relevantly for present purposes, his Honour said:[135]

[152] The concept of "control" of an entity is concerned with the ability to determine the outcome of decisions of the entity: compare s 50AA of the Corporations Act; Glencore International AG v Takeovers Panel (2006) 151 FCR 77; 56 ACSR 753; [2006] FCA 274 at [83] per Emmett J. In the context of a company, this ordinarily means the ability to carry a resolution by majority at the general meeting - and thus to determine the composition of the board of directors: Mendes v Commissioner of Probate Duties (Vic) [1967] HCA 23; (1967) 122 CLR 152 at 161; [1967] HCA 23; [1967] ALR 649 at 653 per Kitto J (with whom Taylor J agreed), at CLR 169 per Windeyer J; . . .

[153] Control is concerned with decision-making, rather than proprietorship, and control, like ownership, can be indirect: there are circumstances in which those who have the ability to carry a resolution may become bound to act on the direction of another (for example, a mortgagee). The "control" requirement is directed to the ultimate power to decide how an entity acts, as distinct from beneficial ownership, and also as distinct from the delegated power of directors or officers. Although typically those who wholly own a company will control it, that is not necessarily so: it is not unknown for those entitled to exercise voting power to become bound or accustomed to exercise their voting rights in accordance with the direction of another . . . In such a case, that other person will "control" the company if he or she has a sufficient accumulation, directly or indirectly, of voting power to carry the general meeting. . . .

113 Subsection 82(2)(a), by requiring that account be taken of the 'practical influence' that a person 'can' exert, reinforces the notion that the test is a practical one and not simply one concerned with strict legal ownership or beneficial interests. Subsection (3) confirms that a person may acquire control over a private landholder, in the relevant sense, notwithstanding that other persons may hold interests or economic entitlements in the private landholder.

114 In s 82, because the relevant context of the acquisition of control is referable to 'control over a private landholder,' being relevantly 'a landholder that is a private unit trust scheme, private company or wholesale unit trust scheme',[136] the application of (what was) the s 50AA mechanism to the unit trust situation in addition to that of a private company may require some adaptation. But in ordinary circumstances, because the unit trust is not a legal entity, the control of the unit trust will, as the Tribunal observed in the present case, be vested in a trustee that is a corporate entity or a natural person.

115 Where the private landholder is a private unit trust scheme, what matters for the purposes of s 82, however, is whether the person said to have acquired control has acquired, directly or indirectly, the practical influence and the 'capacity', in a real and practical sense, to determine or influence the outcome of decisions about the private landholder's financial and operating policies (within the meaning of s 82), in which event the person will be 'taken', for the purposes of Part 2 to have acquired, directly or indirectly, control over a private landholder. In that regard, it will be noted that the concept of control as elaborated in s 82(2) is something of a protean concept, in that a person may (or will be 'taken' to) acquire control over a landholder if the person acquires the capacity to 'determine' the outcome of decisions - which suggests a majority (decisionmaker) position - or by having simply the capacity to 'influence' decisions - which suggests something of a lesser, but nevertheless an influential, position. Each case will turn on its particular facts.

116 The drafting of s 82 is typical of the drafting techniques adopted in anti-avoidance legislation, particularly in the tax area, where not uncommonly the basis of the tax is expressed broadly and there is a discretion conferred on the Commissioner to relieve a taxpayer from the burden of the tax. Here, the text of subs 82(1) is framed in broad terms - 'if a person within a 3 year period acquires, directly or indirectly, control over a private landholder' - that is to say, the language used is designed to capture acquisitions, and creeping acquisitions, of control made over time within a period of three years, that are made 'directly or indirectly'. While the 'dispensing discretion', which permits the Commissioner to determine that a lesser percentage (than 100%) is 'appropriate in the circumstances', is unfettered, the evident purpose of s 82(1)(b) is to enable the Commissioner to relieve a taxpayer from (or ameliorate) duty consequences attaching to a relevant acquisition in circumstances where s 82 would (otherwise) operate on its terms to charge duty on an acquisition of control and result in an outcome which is not 'appropriate in the circumstances', where for e.g., the taxing provision operates in a manner such that the result does not accord with the scope, purpose and object of Chapter 3.

117 The dispensing discretion set out in paragraph (1)(b) is expressed in substantively the same form[137] as it was when the acquisition of control provision was first introduced (as subs 79(5)) in 2004. When the (new) acquisition of economic entitlements provision (s 81) was introduced in 2012, it also contained a dispensing provision (in s 81(5)) expressed in similar terms.[138] And, as Croft J observed in BPG Caulfield,[139] the general provision in s 89E, which provides a duty concession in relation to an 'anomalous duty outcome' resulting from the application of Part 2 of Chapter 3, is specifically excluded in relation to acquisition of economic entitlements under s 81, and also in relation to the acquisition of control under section 82: see s 89E(3). However, this position may be contrasted with the position that applies in the case of 'direct interest' acquisitions dutiable under ss 78-80, where there is no dispensing discretion conferred in those provisions, and no carve-out from the operation of s 89E. Accordingly, it would appear that the general exemption provision in s 89E would be available to avoid 'anomalous duty outcomes' resulting from direct interest acquisitions arising under ss 78-80.

118 It will be noted that the language in which the general exemption provision in s 89E is expressed is markedly different to the language in which the broad discretion embodied in s 82(1) is expressed. Section 89E is framed as follows:[140]

89E Duty concession - anomalous duty outcome

(1) Subject to subsection (3), this section applies to a relevant acquisition if the Commissioner, having regard to all the facts and circumstances, is satisfied that -

(a) the application of this Part results in an anomalous duty outcome; and

(b) the duty payable under this Part is greater than the duty that would be payable under Chapter 2 had the subject of the relevant acquisition been a transfer of the land of the landholder to the person.

(2) The Commissioner may reduce the duty payable to an amount not less than the duty that would be payable under Chapter 2, had the subject of the acquisition been a transfer of the land of the landholder to the person.

(3) This section does not apply to a relevant acquisition that is the acquisition of an economic entitlement under section 81 or the acquisition of control under section 82.

119 In my view, the fact that the two-pronged test embodied in paragraphs 1(a) and (b) of s 89E applies only to the first class of relevant acquisition - being the direct interest acquisitions dutiable under ss 78-80 - and not to an acquisition of an economic entitlement under s 81, or an acquisition of control under s 82[141] - demonstrates, at a practical level that, following the introduction of the landholder provisions in 2012, in substitution for the (then) land rich provisions, each of the three classes of relevant acquisitions under the landholder provisions were different in concept and were not intended to, and did not, operate in precisely the same way as the earlier land rich provisions had.

120 Against that background, I now turn to consider the questions of law and grounds of appeal pressed by the applicant.

Ground 1**: The Tribunal failed to read s 82(1) as a composite provision, comprised of two parts and requiring the Tribunal, once it found the applicant to have acquired 'control', to then consider whether or not it should exercise the discretion in paragraph (b) of s 82(1)**

121 The question of law posited in respect of Ground 1 concerns whether the Tribunal 'failed to notice - and construe - s 82(1) as a composite provision, which was comprised of two parts' and 'whether the dispensing discretion [in s 82(1)(b)] is part of the text of s 82(1) and not, as the Tribunal described it, as "an aspect of the context of the provision" (at [98]).'[142]

122 The applicant submitted that the 'overriding error' in the Tribunal's Reasons 'is the failure to construe the provision [s 82] at the very outset' and to 'articulate correctly what the particular statutory provision means'.[143]

123 The applicant effectively contends that when the Tribunal considered s 82 and analysed its proper construction (at paragraphs [74]-[80]), the Tribunal elided any consideration of paragraph (1)(b) 'as an operative part of the provision',[144] and relegated the 'dispensing provision' to the status of mere 'context'.

124 Accordingly, the applicant says that if the Tribunal had performed its statutory function in the correct manner, and considered the potential application of the dispensing discretion in s 82(1)(b) 'before reaching any conclusion on s 82(1)',[145] and had regard to the matters the applicant raises under Ground 5 in this Court (a reference to the 'transaction specific considerations' relied on), it would have exercised the s 82(1)(b) discretion in full.

125 Before the Court, the Commissioner responded by focussing attention on the way the applicant had presented its case below, observing:[146]

1. Before the Tribunal, the Applicant contended that - in the event the Tribunal found that the Applicant had obtained a control interest in the WCT Unit Trust within the meaning of s 82(1) of the Act - the Tribunal should exercise the discretion contained in s 82(1)(b) of the Act to reduce the extent of that interest from 100% to 75%. The Applicant sought the exercise of the discretion on the basis that the Applicant held an existing 25% interest in the WCT Unit Trust, based on the 25% unitholding held by Amber Investments Pty Ltd (Amber), in which the Applicant is a majority shareholder.

126 The Commissioner noted that the exercise of the dispensing discretion in s 82(1)(b) that the applicant sought was contained in his proposed additional ground (which the Tribunal referred to in its Reasons as 'Ground 3') which the applicant raised for the first time at the commencement of the hearing on 18 June 2024. The Tribunal permitted the parties to file supplementary written submissions addressing Ground 3 following the conclusion of the hearing. Having considered the rival submissions, the Tribunal granted the applicant leave to rely on Ground 3, and partly allowed that ground, finding:

[126] ... Mr Tao can be seen to have held a pre-existing indirect economic interest of 15% (i.e. 25% x 60%) in the WCT Unit Trust.

[127] It follows, in my view, that the appropriate reduction is not the full 25% interest held by Amber, but rather the 15% economic interest Mr Tao already held.

127 The Commissioner contends that the Tribunal's Reasons demonstrate that the Tribunal did construe s 82(1) as a 'composite provision' comprising 'two parts':[147]

First, the Tribunal considered whether the Applicant obtained control of the WCT Unit Trust (Reasons at [74] - [80]). Second, having determined that the Applicant did so, the Tribunal went on to consider whether it was appropriate to determine a percentage less than 100%, and decided that it was (Reasons at [121]-[127]). In so doing, the Tribunal exercised what it described as an "unfettered discretion in section 82(1)(b)": Reasons at [121].

128 When dealing with the 'first part', in considering whether the applicant acquired control over the WCT Unit Trust within the meaning of s 82(1), the Commissioner submitted that the Tribunal applied the statutory definition of that concept as set out in s 82(2) and 'gave primacy to the statutory text of s 82, as it was bound to do.'[148] Turning to the alleged 'secondary error', being the applicant's complaint that the Tribunal found that Mr Tao had acquired control of the WCT Unit Trust, before the Tribunal considered the construction of s 82 and in particular the issue of whether s 82 was only capable of applying if the person obtained a beneficial ownership in the underlying land, the Commissioner submitted it is unclear 'how the alleged "secondary error" is said to be an error of law "related" to Ground 1 (or at all).'[149] The Commissioner contended that, in any event, the Tribunal's reasons were structured in a way that was simply responsive to the case the applicant presented. That is to say, before the Tribunal, counsel for the applicant had contended that Mr Tao did not obtain control in the WCT Unit Trust, which the Commissioner says 'the Tribunal rejected as a matter of fact.'[150] Further, the Commissioner says the applicant contended that 's 82 was not enlivened unless there was a change in beneficial ownership,[151] which the Tribunal rejected as a matter of law.[152]

129 Against that background, it is necessary to turn and consider the approach the Tribunal adopted in its Reasons.

130 At the outset of its Reasons, the Tribunal provided an 'overview of the relevant provisions' in which it outlined the gist of the landholder provisions in Chapter 3 of the Duties Act, whereby duty is imposed on 'a range of other transactions' - being transactions not involving the transfer of land in Victoria - 'that are treated as transfers of land' for duty purposes. The Tribunal explained that:[153]

1. The relevant provision in this case (i.e. section 82) is found in Part 2 of Chapter 3 which treats 'acquisition of interests in certain landholders' as transfers of land ('Landholder Regime'). The landholder entities to which the Landholder Regime applies includes private unit trust schemes[154] if the trust has landholdings in Victoria with a total unencumbered value of $1 million or more.[155] Under the regime, duty arises when a 'relevant acquisition' in a landholder is made.[156]

131 The Tribunal also noted that there are no prior decisions of either the Supreme Court or VCAT considering the interpretation or operation of s 82. However, reference was made to the decision of Croft J in BPG Caulfield Village, where his Honour was dealing with the operation of s 81 concerning 'synthetic interests' in a landholder, being economic entitlements to participate in the dividends or income of a landholder or a right to participate in the income, rent, profits or proceeds of sale of its land. The Tribunal observed that while s 82 was 'of no relevance in BPG',[157] the applicant had contended that 'the views expressed by Croft J as to the purpose and limits of section 81 should apply also to the interpretation of section 82.'[158]

132 In its Reasons, the Tribunal then proceeded to describe the background to the proceeding, provided an overview of the evidence before the Tribunal, and outlined the parties' respective submissions as to whether Mr Tao obtained control within the meaning of s 82.

133 In essence, before the Tribunal, counsel for Mr Tao submitted that he did not have control of the WCT Unit Trust's financial and operating policies as required to engage s 82 - contending that while he had the 'day to day management' of 66WR Pty Ltd (and therefore the WCT Unit Trust) this was only 'small p' policy and Mr Tao's role was one of simply fulfilling the 'big P' policy (or significant decisions) that the unit holders of the WCT Unit Trust had set at the outset for the development of the Lynbrook Property and sale of the relevant lots. Further, Mr Tao submitted that the Trust Deed set out the rights or powers of the unit holders to control the WCT Unit Trust and included the power (cl 30) to remove 66WR Pty Ltd as trustee (or appoint an additional trustee) by resolution of the holders of 75% of the units, noting that as Mr Constantinou and Mr Wiemer held 75 out of the 100 units on issue, they 'had the numbers to remove' 66WR Pty Ltd (and hence any control by Mr Tao) if he undertook a course of action they did not agree with.

134 Counsel for the Commissioner responded by acknowledging that while the Commissioner did 'not doubt that Mr Tao showed appropriate respect for the other unit holders when appropriate', he contended that Mr Tao obtained control in the relevant sense in February/March 2014 because:[159]

(a) when he acquired the shares in 66WR Pty Ltd and became its sole director, he 'acquired not just the capacity, but the practical ability, to determine or influence [WCT Unit Trust's] financial and operating policies';

(b) he 'did not have the capacity to determine' those matters before he became a director; and

(c) the Tribunal could comfortably draw the necessary link between Mr Tao's 'control of the trustee company and the trust's policies'.

135 Further, counsel for the Commissioner submitted that 'the ability of the unit holders to remove 66WR Pty Ltd as the trustee of the WCT Unit Trust (i.e. under clause 30 of the Trust Deed) was 'not relevant' because the only relevant question was what control was held by Mr Tao when he was a director of 66WR Pty Ltd (rather than what might be the case if and when that company were removed as trustee).

136 Against that background, when considering the issue of whether Mr Tao obtained control of the landholder, the WCT Unit Trust, in the relevant sense, the Tribunal analysed the position as follows:[160]

Did Mr Tao obtain control of the WCT Unit Trust when he acquired the shares in and became the sole director of 66WR Pty Ltd?

. . .

Analysis

1. While I accept that the concept of control over 'financial and operating policies' envisaged by section 82 of the Duties Act is focused on the strategic direction of a landholder, as opposed to its day to day management, I consider that Mr Tao controlled the strategic direction of the WCT Unit Trust between March 2014 (when he was appointed as the sole director of its trustee, i.e. 66WR Pty Ltd) and April 2015 (when the bank appointed controllers to the trustee company).

2. As Mr Tao indicated in his evidence (see [47]), finance was the 'main problem' for the WCT Unit Trust from March 2014 and his 'major work was to get finance'. Indeed, if anything, his evidence downplays the trust's dire financial situation at the time. Bendigo Bank's wish to bring the loan to conclusion (see [26]) represented an existential threat to the WCT Unit Trust because, if Mr Tao could not convince Bendigo Bank to extend the existing loan facility while he pursued the attempts to refinance (via the Chinese SOC) and/or to realise land sales, the whole project would fail. The inevitable result would be that the financial investment that he and Mr Wiemer had made, almost entirely by way of loans to the WCT Unit Trust, would be lost.

3. Ultimately, that happened when Bendigo Bank lost its patience in March 2015.

4. I accept that, throughout that period, Mr Tao continued to consult with:

• Mr Constantinou as to the development of the lots and, to some extent, as to the refinancing (particularly given Mr Constantinou remained a guarantor); and

• Mr Wiemer as to options for refinancing the WCT Unit Trust.

1. To that extent, they continued to exercise some 'influence' as to those matters. Nevertheless, as properly accepted by Mr Tao (see [48]), and made clear in Bendigo Bank's final email (see [39]), Mr Tao was responsible for making strategic decisions concerning the WCT Unit Trust (e.g. as to the loan) as the sole director and shareholder of 66WR Pty Ltd.

2. While, between them, the two other unit holders in the WCT Unit Trust could have used the power in clause 30 of the Trust Deed to remove 66WR Pty Ltd as trustee of the WCT Unit Trust and brought any control exercised by Mr Tao to an end, the fact is that they never did so. Moreover, at a practical level, Mr Constantinou had already lost control of Maclaw547 by the time that Mr Tao became the sole director of the company (see [53][161]) and, as such, Mr Constantinou was not even in a position to exercise any voting power held by his company.

(For completeness, there is no evidence to suggest that the receiver and manager that had been appointed to Maclaw547 would have been willing to join with Mr Wiemer to bring about a change in trustee even if Mr Wiemer had sought to do so despite proposing him in the first place (see [30]) and any family relationship (see [19]).)

1. For these reasons, I find that on or about 6 March 2014, Mr Tao acquired the capacity to determine or influence the outcome of decisions about the WCT Unit Trust's financial and operating policies.

137 Before the Court, the applicant submits that once the Tribunal reached the 'prima facie conclusion at [80] that the applicant had acquired "control" of the landholder', the Tribunal had to 'then go on and decide' - in this part of its Reasons - 'the extent of the relevant acquisition' - namely, whether the person had made a relevant acquisition in the landholder of "(a) 100%; or (b) a lesser percentage" (as per s 82(1))' - but '[t]his, the Tribunal did not do.'[162] Counsel for the applicant submitted:[163]

But what was missing from the Commissioner's determination, and what was missing from the Tribunal's decision and reasons, was the necessary and proper consideration of the discretion in the second part of s 82 in the analysis of whether s 82 should apply and if so to what extent.

138 The applicant acknowledges that the Tribunal referred to the 'dispensing discretion' in paragraph (b) of s 82(1) at paragraph [98] of its Reasons, when dealing with a separate argument (and ground), but he submits that in so doing 'the Tribunal was not regarding the dispensing discretion as an operative component part of s 82(1) - but, rather, as if it was a paragraph that raised a separate and distinct matter for consideration.'[164] The applicant contends that in so doing, the Tribunal 'relegat[ed] this operative part of the provision to some part of the general background against which the "default" acquisition of a 100% interest ([97]) was to be considered.'[165]

139 The applicant submits that following the observations of Barwick CJ in Giris Pty Ltd v Federal Commissioner of Taxation,[166] it is clear that the Commissioner had an obligation, just as the Tribunal did here, to 'consider whether the discretion should be exercised, and if so, how it should be exercised'[167] - and if the Commissioner or the Tribunal has decided that 100 per cent is not appropriate in the circumstances, then 'the Commissioner and the Tribunal 'had to go further and decide the precise percentage, that is the extent to which the discretion should be exercised in favour of the taxpayer.'[168] But, in the present case, the applicant submits '[n]one of those things were done by the Tribunal.'[169]

140 In order to understand the applicant's submission, it is necessary to set out the relevant passages of the Tribunal's Reasons, which were addressing the separate topic of whether s 82 could be engaged in the absence of an acquisition of an interest in a landholder equivalent to a beneficial interest. The Tribunal's Reasons record that this issue arose before the Tribunal because, in closing, counsel for Mr Tao had contended that 'in issuing the Assessment, the Commissioner has "sought to make dutiable a transfer that did not give rise to a legal or beneficial interest in a landholder" (i.e. at no stage did Mr Tao obtain any (or Amber increase its) unit-holding in the WCT Unit Trust),'[170] which he suggested 'was contrary to the purpose of the Landholder Regime as explained by the then Treasurer (the Hon. John Brumby)'[171] in 2004 when the predecessor 'land-rich' provisions were strengthened.

141 Relevantly, the Senior Member's 'Analysis', as set out in the Tribunal's Reasons, was as follows:[172]

Can section 82 be engaged in the absence of Mr Tao acquiring any interest in the WCT Unit Trust equivalent to a beneficial interest?

. . .

Analysis

1. The process of statutory interpretation requires the text of a provision to be considered in light of its context and purpose and has been accepted as being applicable to state tax legislation.[173]

2. Starting with the text, on its face, section 82 of the Duties Act applies to any situation where control of a landholder is obtained. While the provision may have been modelled on the test of control in section 50AA of the Corporations Act 2001 (Cth), the application of the test is necessarily broader because the notion of a 'private landholder' extends to private unit trusts as well as private companies.

3. Companies are legal entities, the control of which is ordinarily vested in its board of directors. By contrast, trusts are not legal entities and, subject to other arrangements (e.g. any agreement between unitholders of a unit trust), control of a trust is normally vested in the trustee (notwithstanding that the trustee owes fiduciary obligations to the unit holders as beneficiaries of the trust).

4. If the legislature had intended to entirely carve out changes in control of a corporate trustee of a private unit trust scheme from the scope of section 82, it would have been relatively simple for the legislature to have done so (e.g. by limiting the application of section 82 to landholders that are private companies).

5. Returning to the text, on its face, it simply refers to control and does not require any other beneficial, synthetic or other 'equivalent' interest to be held by the person to whom it applies.

6. Turning to the context, it is important to recognise that section 82 only applies where there is no relevant acquisition under sections 79 (i.e. of a direct or beneficial interest in a trust) or 81 (i.e. of a synthetic or economic interest in a trust). This, of itself, suggests that section 82 is not intended to be linked to any beneficial or synthetic interest in the trust.

7. Further, section 82 does not contain any mechanism to determine the extent of the interest in the trust taken to have been acquired (whether beneficial, synthetic or equivalent), but rather defaults to a prima facie relevant acquisition of a 100% interest.[174] This may be contrasted with the ability to quantify the exact extent of any interest taxable under:

• section 79, where the extent of the interest is identified by reference to a person's entitlements to distributions (other than as a creditor) on a winding up;[175] and

• section 81, where the extent of the interest is identified by reference to a person's entitlements (not excluding those of a creditor) from units or an arrangement by which they participate in dividends or income of the landholder, its income rent or profits, capital growth or the sale of its landholdings.[176]

1. Another important aspect of the context is the provision in both sections 81 and 82 for a reduction in the extent of the 'relevant acquisition' where the Commissioner determines that to be 'appropriate in the circumstances'.[177] As contended for [by] Mr Tao in relation to Ground 3, this recognises it may be inappropriate to levy duty on the entirety of the prima facie relevant acquisition if a person has a pre-existing direct or synthetic interest. Again, this rather suggests that control is not directly linked to the holding of such interests.

2. Turning to purpose, I accept that section 82 is part of the Landholder Regime which was (at least originally) conceived of as an anti-avoidance measure to ensure that indirect changes of beneficial ownership of land could not be used to avoid duty.

3. However, unlike the synthetic interest rule in section 81 which was first introduced as part of the Landholder Regime, there was an equivalent of section 82 dealing with control interests under the previous land rich regime.[178] That historical context is an indicator that:

• the purpose of section 82 differs from section 81, i.e. it is concerned with something other than the economic entitlements to which the latter relates; and

• some caution needs to be exercised in applying the interpretative approach accepted in BPG[[179]] in the context of section 82.

1. It is true that, in the explanatory memorandum which first introduced the control test in the context of the land rich rules ('2004 EM'), there was reference to:[180]

[the] holders of interests usually ced[ing] control to [a] person and mak[ing] such arrangements in respect of their interests that may allow the person to benefit or exercise rights which could confer benefits similar to holding an interest.

1. I also accept that section 35(1) exempts a transfer of land from duty under Chapter 2 where it involves a change in trustee of a trust without any change in beneficial ownership of the land held by the trustee. In that context, it may seem incongruous that duty is imposed under section 82 on a change in the control of a trustee that is not also accompanied by a change in the beneficial ownership of the land held by that trustee.

2. However, three things can be said in the latter regard:

• First, had it been sufficient for Mr Tao to achieve his objectives, he could have made arrangements to set up his own company to become trustee in place of 66WR Pty Ltd and then organise for 66WR Pty Ltd to transfer the land to the new trustee company (and claim the exemption in section 35). That he did not do so suggests that the alternative would not have met his needs.

• Second, by March 2014, the financial position of the WCT Unit Trust was (extremely) dire. It seems to me that any steps to extend the loan or refinance in order to complete the development project was only likely to benefit Mr Tao and/or Mr Wiemer as (unsecured) creditors of the trust. In my view, it was unrealistic to expect that, even if the development had been completed, there would have been sufficient net proceeds from lot sales to:

- repay Bendigo Bank (or any substitute lender);

- repay Mr Tao and Mr Wiemer (who were collectively owed more than $1 million); and

- provide a return to the unit holders (who had, in any event, only invested a nominal sum for their units).

• Third, I accept the Commissioner's submission that, if any such incongruity reveals a gap in the legislation, the words required to be read in to the provision to address that gap would be enormous and, in light of the view of the majority of the High Court in Taylor, goes well beyond what can be achieved through an exercise of statutory interpretation.

1. For these reasons, I consider it is not necessary that Mr Tao also obtained an interest equivalent to a beneficial interest in the WCT Unit Trust for section 82 to be engaged.

142 The applicant takes issue with the Tribunal's construction of s 82(1), and its description of its operation, in paragraph 97 of the Tribunal's Reasons, to the effect that because s 82 does not contain any mechanism to determine the extent of the interest in the trust that the person who acquires control over a private landholder is taken to have acquired, it 'defaults to a prima facie relevant acquisition of a 100% interest'. Rather, the applicant submits, the correct construction or description of s 82(1) is to acknowledge that what s 82(1) provides for 'is a choice.'[181] The applicant says:[182]

That is, once the Commissioner (Tribunal) has found that the taxpayer has acquired "control" as defined in s 82(2), the second part of s 82(1) requires the Commissioner (Tribunal) to make a choice − between an acquisition of 100%, or an acquisition of "a lesser percentage determined by the Commissioner ...". There is no "default" position of 100% in s 82(1) − again, that is not what the provision says.

143 Further, the applicant submitted that s 82(1) is a single provision, contained in one sentence, and the 'dispensing discretion' in paragraph (1)(b) is 'an integral part of the provision' and is not to be dismissed or treated as part of the context.[183] Counsel for the applicant submitted that because the dispensing discretion is an integral part of the control provision, the 'potential application of the dispensing discretion is something to be considered, as a matter of statutory interpretation, at the same time that the question of the acquisition of "control" is being considered' because 'it is through the dispensing discretion that the purpose, and intended operation, of the landholder provisions becomes relevant to s 82.'[184] Accordingly, counsel contended that the 'whole of s 82 had to be considered, understood and its meaning articulated by the Tribunal before it embarked upon its review function - which it did not do.'[185]

144 In this regard, the applicant now relies on observations made by Barwick CJ in Giris Pty Ltd v Federal Commissioner of Taxation.[186] In Giris, the sole question before the High Court was whether two provisions of the Income Tax Assessment Act 1936 (Cth) (ITAA), that were under consideration in that case, being s 99 and s 99A, concerning the applicable rate of tax on trust income,[187] were constitutionally valid.[188] Relevantly, the rate of tax imposed under s 99A was higher than that under s 99, and a trustee was only assessable and liable under s 99 if the Commissioner formed the opinion in accordance with s 99A that it would be unreasonable to tax the trustee under s 99A.

145 The text of the relevant provisions is set out in the judgment of Barwick CJ.[189] For present purposes it is sufficient to note that the two provisions were framed quite differently to paragraphs (a) and (b) of s 82(1) of the Duties Act. The introductory words of s 99 and s 99A provided as follows:[190]

This section applies in relation to a trust estate in relation to a year of income only if the next succeeding section does not apply in relation to that trust estate in relation to that year of income.

(a) there is no part of the net income of a trust estate that is included in the assessable income of a beneficiary ...; or

(b) there is a part of the net income of a trust estate that is not included in the assessable income of a beneficiary ...,

the trustee shall be assessed and is liable to pay tax on that net income or any part of that net income, as the case may be, as if it were the income of an individual and were not subject to any deduction.

This section does not apply in relation to a trust estate in relation to any year of income if the trust resulted from─

(a) a will, a codicil or an order of a court that varied or modified the provision of a will or codicil; or

(b) an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of estates of persons who die intestate.

This section does not apply in relation to a trust estate (other than a trust estate referred to in the last preceding sub-section) in relation to a year of income if the Commissioner is of the opinion that it would be unreasonable that this section should apply in relation to that trust estate in relation to that year of income.

In forming an opinion for the purposes of the last preceding sub-section─

(a) . . .

146 As the extracted text makes clear, the application of s 99 is expressed to be limited to cases where s 99A 'does not apply' in relation to a trust estate in a year of income.

147 In his judgment, after referring to the text of the two sections, Barwick CJ stated:[191]

That the appellant has been assessed in accordance with s. 99A and the appropriate taxing provisions involves the conclusion that the Commissioner has not thought it unreasonable to apply the provisions of s. 99A to the income of the property of which the appellant is trustee in respect of the said year of income.

It will be observed as a matter of verbiage that s. 99A purports to bring to tax the trust income which falls within its prescriptions and to do so of its own force. Verbally the Commissioner is given by s. 99A an authority or discretion in the nature of a dispensing power if he thinks it unreasonable to apply the section to the particular taxpayer in respect to the particular year of income. If he does not think it unreasonable so to do, s. 99 does not apply to the income of the particular trust estate in respect of the particular year of tax because, in default of the Commissioner's opinion in the appropriate sense, s. 99A applies. It is possible to treat s. 99A in isolation and, regarding it literally, not place the Commissioner under any duty to decide pro or con as to the reasonableness of applying that section to the particular taxpayer in the particular year of tax. In the Commissioner's silence, the section would apply. If that literal view were taken then, of course, the invalidity of giving the Commissioner an authority or discretion to treat the section as not applying to a taxpayer in a particular year of tax would not in any wise assist the present appellant. It would be left liable because of the literal terms of s. 99A to tax at the rate appropriate to a taxpayer to whom s. 99A applies.

However, I am not prepared to treat the section in isolation from s. 99 and to give literal effect to what after all is not much more than a draftsman's device in allowing the section to apply where the Commissioner has not thought it was unreasonable for it so to do. In my opinion, the two sections must be read together and so read they do exhibit a cohesive scheme on the part of the legislature. In my opinion, the operation of each of the sections depends on the view of the Commissioner as to the unreasonableness of applying the one rather than the other to the particular taxpayer in respect of the year of income in question. So read, in my opinion, a duty is imposed on the Commissioner to decide in each case and in respect of each year of income whether it is unreasonable to apply s. 99A rather than s. 99.

It would also follow from my interpretation of the section that the Commissioner is in substance able to choose whether the trust income will be taxed at one rate rather than another, or perhaps, put more accurately, assessed under one section rather than another. He is able to make the choice in exercise of what, for want of a more precise expression, I shall call a legislative discretion: he can apply one section rather than the other if he thinks it unreasonable to apply the latter of them. I have been unable to find any content for the word "unreasonable" in the context of the two sections except considerations of a kind upon which a legislature acts in deciding whether an enactment or its particular terms are or are not unreasonable having regard to the interests of the public generally, of the citizen to be affected, of the revenue and of the requirements of those policies, political, economic and fiscal which the Parliament is prepared to sanction. Some facts are specified for the Commissioner's attention in arriving at his opinion as to unreasonableness but he is given no hint of what bearing any or all of them ought to have or may have on his judgment. In addition, he is required to have regard to any facts which he thinks appropriate to be considered in relation to the formation of his opinion. This view of the discretion gives to the Commissioner a wide charter which it might have been thought he was ill-equipped to exercise. What he is required to decide, in my opinion, is in truth a function of the legislature, rarely delegated to an official. Its repose in the Commissioner means that the citizen cannot know when disposing of his affairs what the impact upon him or them the law regarding the taxation of income will make: and unless the Commissioner is required to disclose the factual basis of his opinion as to unreasonableness, the taxpayer will not know after he is assessed upon what factual basis he was required to pay the tax imposed. But the wisdom of creating this somewhat unusual situation and the dangers inherent therein are of no concern to the Court, though they might well be to the Parliament, if the features to which I have called attention do not lead to invalidity.

However, in my opinion, the Commissioner is under a duty in each case to form an opinion and the taxpayer is entitled to be informed of it, and upon the taxpayer's request, the Commissioner should inform the taxpayer of the facts he has taken into account in reaching his conclusion.

148 Before this Court, the applicant relies on the italicised portion of Barwick CJ's judgment (as set out above), and particularly the last sentence thereof, where his Honour was of the view that when the two sections were read together as part of a cohesive scheme, 'a duty is imposed on the Commissioner to decide in each case and in respect of each year of income whether it is unreasonable to apply s. 99A rather than s. 99.' The applicant submitted that:[192]

1. According to Barwick CJ, there was a duty on the Commissioner to consider whether he should not apply s 99A to the trust income (s 99A being the provision that imposed the higher rate of tax, and which included a dispensing discretion (to "not" apply s 99A - but, instead, apply s 99 to the trust income)). That is, Barwick CJ held that there was a duty on the Commissioner to consider applying the dispensing discretion in s 99A(1) (having first held that ss 99A and s 99 had to be read together).
2. This style of analysis applies to s 82(1) - for the more fundamental reason that the part of the legislation imposing the greater tax (paragraph (a) of s 82(1)) appears in the same provision as the dispensing discretion (paragraph (b) of s 82(1)). What is important here is that the Commissioner (Tribunal) is always under a duty to consider whether or not to apply the dispensing discretion - the Commissioner does not have to be asked to exercise it (and he cannot just ignore it, as the Tribunal did in its reasons at [74]-[80]).
3. The Tribunal below failed, first, to consider (ie, just consider) the dispensing discretion when construing the meaning and effect of s 82 and, secondly, it failed to consider applying paragraph (b) of s 82(1) to its own finding (at [80]) that the applicant had acquired control on 6 March 2014. The fact that the Tribunal considered the potential application of paragraph (b) under a separate, stand-alone ground (Ground 3) does not cure the Tribunal's failure to consider paragraph (b) when construing the provision. Nor does it cure the Tribunal's failure to consider applying paragraph (b) to its own finding of fact in the principal part of its reasons (ie, to its finding that the applicant had acquired control in March 2014). Barwick CJ's statements in Giris serve to reinforce the gravity of the Tribunal's shortcomings in its approach to the construction of s 82(1).
4. Instead of making the choice required by s 82(1)(a) and (b), the Tribunal regarded s 82(1) as deeming the applicant to have made an acquisition of 100%. Once the Tribunal found (at [80]) that the applicant had acquired "control" of the landholder, the Tribunal was then required to go further and consider the choice under paragraphs (a) and (b) of s 82(1) and, specifically, it was required to decide whether or not to exercise the dispensing discretion under paragraph (b) (and provide reasons for its decision, either way).

149 The dispensing discretion in s 82 of the Duties Act is quite different to that in place in s 99A of the ITAA. That is because, in Giris, under the ITAA a trustee was only assessable and liable under s 99 if the Commissioner formed the opinion in accordance with s 99A that it would be unreasonable to tax the trustee under s 99A. Under s 82, however, the focus is on the 'acquisition of control' over a private landholder, and where a person acquires control, directly or indirectly, that person is taken, for the purposes of the landholder provisions:

to have made a relevant acquisition in the landholder of─

(a) 100%; or

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

150 What are the 'circumstances' in any particular case will dictate, or effectively enliven the issue of, whether or not it is necessary for the Commissioner to determine under paragraph (1)(b) that a lesser percentage is 'appropriate'. The indicia of 'control' for the purposes of s 82(1) are specified in paragraph (2) as being where the person:

acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies', taking into account─

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the private landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

151 The Explanatory Memorandum to the Duties Amendment (Landholder) Bill 2012 speaks of s 82 as being intended to apply in the situation where 'the holders of interests may cede control to the person and make such arrangements in respect of their interests that would allow the person to benefit or exercise rights which could confer benefits similar to holding an interest.'[193] As noted earlier, substantially the same statement appears in the (earlier) Explanatory Memorandum for the State Taxation Acts (Tax Reform) Bill 2004 when addressing the new 'acquisition of control' provisions that were inserted in s 79 (subss (5), (6) and (7)).[194]

152 Accordingly, the applicant submits that s 82 requires 'consideration of whether the person who has obtained control has also obtained something similar to, to use the language of the EM, similar to an interest in the landholder, and it does that through the discretion.'[195] Counsel for the applicant contends that the drafting technique that Parliament adopted - of conferring a dispensing discretion on the Commissioner - indicates that the Parliament contemplated the Commissioner would, when applying s 82, consider 'the question of whether the person who has acquired control has also acquired something in the nature of or similar to, or equivalent to, an interest in the landholder.'[196]

153 In this regard, the applicant also referred to the guidance given by the Commissioner on the SRO webpage, which reflects the language used in the Explanatory Memoranda of the person who has obtained control having obtained something similar to an interest in the landholder. The webpage guidance, as the Tribunal noted (Reasons at [84]), indicates that:

The provisions can also apply to a person who is appointed to the board of directors of a landholder (or the corporate trustee of a landholder). Provided the shareholders or unit holders have not made arrangements that allow the director to benefit, or exercise rights which confer benefits similar to holding an interest in the landholder, the Commissioner will take the view that the director has not acquired control (and made a relevant acquisition of an interest of 100%) as a result of such an appointment.

154 Counsel for the applicant observed that, in the present case, however, rather than applying the tenor of the webpage guidance, the Commissioner 'is saying something different for this taxpayer' because the aide-mémoire prepared for the Court (i.e., the before and after 6 March 2014 diagram) demonstrates that, in the present case:[197]

there's been no change in unitholders, there's no arrangement, and on the notional distribution or winding up of the unit trust the three unitholders would receive the surplus property of the trust.

And if it's land they would receive the land. Mr Tao would not receive any land. He would be a director but he would not receive any land.

155 The applicant also pointed out that the Tribunal, in its Reasons, found that Mr Tao obtained control of the strategic direction of the WCT Unit Trust when he was appointed as 'the sole director of its trustee, i.e. 66WR Pty Ltd', on 6 March 2014 but concluded later in its Reasons that he made a 'relevant acquisition under s 82 when he became the sole shareholder and director [of] 66WR Pty Ltd', as shown below:[198]

Analysis

1. While I accept that the concept of control over 'financial and operating policies' envisaged by section 82 of the Duties Act is focused on the strategic direction of a landholder, as opposed to its day to day management, I consider that Mr Tao controlled the strategic direction of the WCT Unit Trust between March 2014 (when he was appointed as the sole director of its trustee, i.e. 66WR Pty Ltd) and April 2015 (when the bank appointed controllers to the trustee company).

...

1. For these reasons, I find that on or about 6 March 2014, Mr Tao acquired the capacity to determine or influence the outcome of decisions about the WCT Unit Trust's financial and operating policies.

...

Conclusion

1. For the foregoing reasons, I find:

(a) Mr Tao made a relevant acquisition in the WCT Unit Trust, under section 82 of the Duties Act, when he became the sole shareholder and director 66WR Pty Ltd;

156 The applicant contended that the appointment of Mr Tao as director of 66WR Pty Ltd - and the acquisition of control for Corporations Act purposes - is not a "property transaction"[199] that would enliven the transfer duty provisions as it 'did not result in the Applicant acquiring (directly or indirectly) any "legal or equitable rights" of the landholdings held by the landholder.'[200] Counsel submitted that Chapter 2 and Chapter 3 of the Duties Act 'don't impose tax liabilities on changes in director, never have.'[201] Further, counsel submitted, 'because any interest in land held by a corporate trustee is to be disregarded for the purposes of the landholder provisions, any acquisitions of shares in companies which hold land in a trustee capacity are to be likewise disregarded under the landholder provisions.'[202] Accordingly, he said, because s 72(2)(b) of the Duties Act uses the expression 'beneficial interest',[203] the applicant's acquisition of shares in the trustee company are really to be disregarded.[204]

157 At the outset, the Commissioner took issue with the applicant's appeal by emphasising the leave requirement imposed by s 148(2A) of the VCAT Act, and submitting that 'as the Tribunal was only obliged to determine the issues before it, leave ought not be granted when the issues sought to be raised on appeal were not raised before the Tribunal.'[205] In essence, the Commissioner contended that the Court should not grant the applicant leave to appeal the Tribunal's decision because 'the applicant is asking this court to find that the Tribunal erred by doing something which the applicant never asked the Tribunal to do'.[206]

158 Counsel for the Commissioner commenced by referring to 'key provisions' which they say identify the structure of analysis from the Act which the Tribunal needed to undertake and which they contend the Tribunal did undertake.[207] Reference was made to s 77, which provides that a liability for duty arises 'when a relevant acquisition is made'; s 85, which provides that the person who makes the relevant acquisition is liable to pay the landholder duty; and to s 86, which specifies how the duty is charged on relevant acquisitions in private landholders. Section 86(1) provides:

(1) Duty on a relevant acquisition in a private landholder is chargeable, at the rate specified under this Act for a transfer of dutiable property, on the amount calculated by multiplying the unencumbered value of all land holdings of the landholder in Victoria (calculated at the date of acquisition of the interest acquired) by the proportion of that value represented by the interest acquired in the relevant acquisition.

159 As to the 'rate specified', it will be recalled that the 'Note' subjoined to s 70 (Imposition of duty) states that '[t]he duty is chargeable at the general rate for a dutiable transaction under Chapter 2'. The 'general rate' is specified in s 28 in Chapter 2 of the Duties Act as being, relevantly (where the dutiable value of the dutiable property the subject of the transaction is 'More than $960 000') '5⋅5% of the dutiable value', as was noted by the Tribunal in its Reasons (at [16]).

160 The expression 'dutiable property' is defined in s 3 to have 'the meaning given by section 10'. Section 10, which is located in Chapter 2 of the Duties Act, defines 'dutiable property' as being certain specified estates or interests in land in Victoria, certain leases etc and marketable securities such as shares and units in a unit trust scheme etc.

161 Counsel for the Commissioner briefly addressed the legislative history of the relevant provisions. First, counsel noted, in response to a question from the Court, that the phrase 'within a 3 year period' in s 82 was first introduced into Part 2 of Chapter 3 by the 2004 Amending Act, where the phrase appeared as part of the 'direct interest' provisions in s 79(1)-(4) and also in the (then) newly introduced 'control' provisions in s 79(5)-(7). The Commissioner contends that the 'within a 3 year period' requirement operates, and was intended to operate, as part of an 'anti-avoidance scheme' and accordingly, it is 'simply not correct' to do, as the applicant seeks to do, and construe s 82 as if it were a dispensing provision.[208] On the contrary, the Commissioner submits 'it is a provision for anti-avoidance of tax, and indeed it's a provision which establishes a separate basis of tax liability.'[209]

162 Counsel for the Commissioner focused on the first (of three) significant phrases in s 82: 'acquires directly or indirectly control over a private landholder'. Starting with the first component part within that phrase, namely that of 'private landholder', counsel explained that in the present case the 'landholder' is a private unit trust scheme under s 71(1)(a), and is a 'private landholder' as defined in s 71(3) - that is, to say, in the present case, a 'private landholder' is, relevantly, a landholder that is a private unit trust scheme.[210] Accordingly, the Commissioner contends that any reliance by the applicant on s 72(2)(b) is misplaced, because in the present case 'we're not dealing with a landholding of a company in that sense referred to in s 72(2)(b)' - '[w]e are dealing with that which is described in s 72(2)(a) - and 'no ground of the notice of appeal challenges the contention that there was a private landholder, as that term is defined in s 71(3), for the purposes of s 82.'[211]

163 Turning then to s 82(2), counsel submitted that the text of the provision leaves no room for underlying notions of indirect, or even direct, beneficial interest to operate. Rather, the focus in paragraph (2)(a) is on 'the practical influence the person can exert in addition to any rights the person can enforce...'[212] such that 'the enquiry, then, is as to the potentiality to exercise practical influence, being a relevant integer of the definition of control, which is in turn the relevant integer of this separate third category of relevant acquisition.'[213] Accordingly, the Commissioner contends that:[214]

s82 as a third category [of relevant acquisition] has a very clear discrete sphere of application from the other two categories, in particular s78. It is a relevant acquisition that is triggered by the acquisition of control, which is in turn then defined to mean practical influence.

(3) Subsection (1) applies regardless of interests or economic entitlements held by any other person in the private landholder.

165 Counsel for the Commissioner observed that no party contends that subs (3) presents any difficulty or 'causes any trouble, in either questioning the Tribunal's reasons, or in understanding the terms of the relevant provision that are the subject of the alleged errors.'[215]

166 As to when the acquisition of control took place, counsel for the Commissioner noted that the production of evidence by Mr Tao about the relevant dates of acquisition of the shares in 66WR Pty Ltd and his appointment as director has been a 'somewhat evolving process' and submitted that−[216]

if it's the case that Mr Tao acquired shares in the trustee company as at 11 February 2014, but did not become director until 6 March 2014, those dates are so proximate so as to constitute a singular acquisition of control of the trustee company for the purposes of s 82.

167 Further, counsel for the Commissioner later explained:[217]

And of course it's the fact that he was the sole director of the trustee company, though as perhaps the submissions this morning did not specifically address also the fact that he was the sole shareholder of the trustee company, that were the two factors that combined along with the fact that those two events happened nearly contemporaneously less than a month apart that triggered the element of control in the private landholder in respect of the first part of s 82.

168 Next, the Commissioner contended that the issues the applicant has raised about beneficial interest are not found in any of the grounds of appeal, and accordingly, leave should not be granted to run this new ground. Secondly, the Commissioner contended that for the reasons the Tribunal identified, the ground would be wrong in law in any event.[218]

169 Addressing the (new) Ground 3 that was raised before the Tribunal at the hearing, the Commissioner noted that the reduction the applicant sought was not to 'zero per cent, as is now contended on this appeal for the first time' but to 75 per cent, which was to take account of the 25 per cent interest in the WCT Unit Trust held by Amber, of which Mr Tao is the majority investor.[219] Accordingly, the Commissioner contends:[220]

that leave to appeal ought not be granted in this case, because the reduction to zero per cent, which the applicant contends was the Tribunal's error, that is the failure to reduce to zero per cent, was never actually asked for by the applicant. Indeed, the new ground that the applicant sought to raise at the hearing [before the Tribunal] for the first time specifically asked for no more than a reduction to 75 per cent.

. . .

And ultimately, we will contend that 7(d) [of the Tribunal's Reasons[221]] states a conclusion, which evidences the Tribunal doing that which the applicant somewhat curiously contends that the Tribunal never did, which is to examine whether or not 100 per cent is the appropriate amount under s 82, or whether an appropriate percentage is some other appropriate percentage. And 7(d) we see the first indication that the Tribunal had landed upon 85 per cent as the appropriate percentage. And very clearly evidences that the Tribunal did that which the applicant wrongly contends the Tribunal never did under Ground 1.

170 In the circumstances, the Commissioner submits that the Tribunal dealt with the applicant's arguments relevant to Ground 1 (before the Tribunal) in two parts, the first at paragraphs 74-80 of the Tribunal's Reasons, read with the analysis relating to Ground 3 (whether s 82 can be engaged in the absence of Mr Tao acquiring any interest in the WCT Unit Trust equivalent to a beneficial interest) set out at paragraphs 91-104, and the second part at paragraphs 121-128. Counsel for the Commissioner explained−[222]

So the first relevant bunch of paragraphs, 74-80, explained the evidence which ground the finding that the first part of s 82 was engaged. Then we have 91-104, where the Tribunal dismisses the contention that, in fact, what was needed was for there to be a beneficial interest by Mr Tao. And then, with respect, with proper structuring and rational analysis, the Tribunal then proceeds to ask the next question, which is found on 1423 is the header [Should leave be granted to the applicant to raise Ground 3?].

...

And then in the following paragraphs, at 105 to 110, the Tribunal explains why it found that Mr Tao should be granted the leave to raise ground 3, which is of course the ground that is now the subject of this appeal, even though Mr Tao had raised it for the first time at that hearing.

None of that reasoning is challenged on this appeal. ... the next relevant part of the Tribunal's decision, which is found at p1424 of the court book, we see the question that is then asked by the Tribunal. ... Is it appropriate in the circumstances to determine a percentage less than 100 per cent as the relevant acquisition. ...

Now, in these parts of the reasons that follow, the Tribunal explained why it exercised the discretionary power in s 82 to reduce the relevant acquisition from 100 per cent to the relevant percentage of 85 per cent and not to reduce it to 75 per cent as the applicant had asked for. So if I can note then that the next paragraph, the Tribunal commences its summary first of Mr Tao's submissions and then in later paragraphs of the Commissioner's submissions.

But at paragraph 111 [of the Tribunal's Reasons], the court can see that the Tribunal sets out what Mr Tao's contentions were before the Tribunal. So Mr Tao contends that it is appropriate that the percentage of the relevant acquisition be reduced to 75 per cent, again not zero per cent as the applicant now contends, to take account of the interest in the WC Trust held by Amber.

So with respect we contend that it is clear that before the Tribunal Mr Tao did not contend that the Tribunal should reduce the percentage to zero.

...

Ultimately, the Commissioner submits in respect of ground 5 [before the Court] that in these paragraphs that follow them, the Tribunal does then do what the applicant wrongly contends the Tribunal failed to do. Namely, to consider the fact-specific considerations, to quote the notice of appeal in paragraph 126 of the applicant's written submissions, that the applicant contended was relevant to the 25 per cent of the reduction sought.

So to note those parts, if I can skip over the Commissioner's submissions all the way to paragraph 121 found at court book 1426. Now, the Commissioner contends that paragraphs 121 to 128 are the second relevant chunk of paragraphs in the Tribunal's decision I referred to before lunch which constitute the relevant reasoning which responds directly and completely to the contention by the applicant that the Tribunal failed to do that which the second part of s 82 required it to do.

Whether the Court should grant leave to appeal

171 The Commissioner contends that the Court should not grant the applicant leave to appeal in this case for two reasons. First, referring to s 148, and especially subs (2A) of the VCAT Act, the Commissioner contends that the applicant's appeal has insufficient prospects of success. In essence, the Commissioner submits that the arguments advanced by the applicant simply ignore the analysis in paragraphs 121-128 of the Tribunal's Reasons and 'also ignore basic legal principles about this court's power to interfere with the exercise of a discretion unless it was affected by an error of law.'[223]

172 The second reason advanced by the Commissioner is that it is not appropriate for the applicant to be permitted to run points for the first time on appeal in circumstances where the applicant 'never asked the Tribunal to exercise s 82's discretion in order to reduce the relevant acquisition to zero.'[224] The position before the Tribunal was that the parties were given leave to put on written submissions in respect of the new Ground 3 after the conclusion of the hearing, and the case advanced was one where the applicant sought a reduction by way of 25 per cent. On this appeal, however, the applicant contends that the Tribunal should have reduced the relevant acquisition to zero per cent.[225] In this regard, the Commissioner relies on decisions of this Court concerning s 148 in Dura (Australia) Constructions Pty Ltd v Victorian Managed Insurance Authority[226] and Kornucopia Pty Ltd v Zhang.[227]

173 The Commissioner submits that:[228]

The only question of law raised in this court which was pressed was on a point not raised in the Tribunal decision under challenge. To allow it to be raised now would be inappropriate and leave to appeal should therefore be refused. Relevantly, we contend that in the applicant's written reply in this proceeding, the applicant did not attempt in any way to engage with the submissions that the Commissioner had made as to why leave to appeal should be refused.

In particular, the applicant did not attempt to explain why he should be granted leave notwithstanding these orthodox authorities to raise on this appeal a ground that was not agitated before the Tribunal. And in particular, we again note that this morning, the applicant made no submissions that explain how the applicant ought to be permitted to run these points when they were not run below.

174 Further, counsel observed,'[i]t is difficult to understand how the Tribunal could be said to have erred when it failed to do that which the applicant not only did not ask the Tribunal to do, but which the applicant inconsistently asked the Tribunal to do something else.'[229]

175 Before the Tribunal, counsel for the applicant sought review of the Assessment on two grounds, and then sought to raise a third ground, which has been referred to earlier in these reasons as Ground 3. In opening the applicant's case before the Tribunal, counsel explained the position, stating:[230]

COUNSEL: ... Senior Member, the Commissioner of State Revenue made an ... assessment by determination on 17 January 2022, ... disallowing the applicant's objection, dated July 2019 to the Commissioner's assessment 1676739 of landholder duty under the Duties Act and the Taxation Administration Act. At the request of Mr Tao, the applicant, the Commissioner of State Revenue referred the matter to the VCAT, and we seek review of that decision on the basis that there are really two grounds. The first is that section 82 concerning an acquisition of control is not intended to apply to, we say, mere changes in the directorship and shareholding of a trustee company, and, second ..... controlled test was intended to apply to such a transaction than ..... Mr Tao did not make the relevant acquisition for the purposes of section 82 of the Duties Act.

There is a third ground that we would seek leave to raise, and that is - and I apologise for the tribunal for not making this earlier, but this is that, in our submission, Mr Tao held a 25 per cent beneficial interest in the landholder through an entity called Amber Investments, and when the Commissioner assessed Mr Tao as making a relevant acquisition, it should have taken into account that interest and rather than assessing him on inquiry, and a 100 per cent controlled interest, and it should take into account that 25 per cent interest he already held and reduced to a 75 per cent interest. So that's in the alternate. Obviously, if we're unsuccessful on grounds 1 and 2.

SENIOR MEMBER: So that - is that relying on 82(1)(b)?

COUNSEL: Well, it relies under 86, the charge of a duty, Senior Member.

SENIOR MEMBER: As I understand 82(1)(b) - well, 82(1) finds a default percentage of 100 per cent when ..... - - -

COUNSEL: Yes. Yes.

SENIOR MEMBER: - - - allows discretion to ..... - - -

COUNSEL: Yes.

SENIOR MEMBER: - - - that's appropriate.

COUNSEL: Yes, Senior Member. Yes. And so we say the appropriate amount was 75 per cent in those circumstances rather than 100 per cent.

SENIOR MEMBER: Okay. And have you provided any notice of that today?

COUNSEL: No, Senior Member.

176 A little later in the opening, in response to a question from the Tribunal about Ground 3, counsel for the applicant outlined the nature of Ground 3, as follows:[231]

SENIOR MEMBER: You haven't addressed your third - - -

COUNSEL: The - yes. So the nature of the third ground, the third ground is that taking into account the 25 per cent interest that a related party of Mr Tao held in the unit trust, which is Amber Investments, that should have been deemed as an acquisition of a further interest ..... with any control interest and reduced the - so rather than Mr Tao acquiring a 100 per cent interest in the landholder, he should only have been assessed on acquisition of a 75 per cent interest. It's my submission that Amber Investments satisfies the definition of an associated person for the purposes of section 86(3).

SENIOR MEMBER: ..... legislation ..... regime about working out the extent of the acquisition. That's 82(1)(a).

COUNSEL: Yes.

SENIOR MEMBER: ..... 100 per cent of the .....

COUNSEL: Yes. Unless the - yes. Unless .....

SENIOR MEMBER: Sorry. You're saying that it's appropriate in these circumstances to reduce it from 100 per cent to 75 per cent.

COUNSEL: Yes. .....

177 The following day, during closing submissions for the applicant, the Tribunal returned to s 82(1)(b) and asked counsel '[w]hat do you say s 82(1)(b) is designed to achieve?'. Counsel for the applicant responded, stating:[232]

COUNSEL: Well, we ..... to rely on it on our third ground, which is where there may be some lesser - whether there is some evidence that it isn't a 100 per cent acquisition of control of - perhaps if there was joint control, but even then, I'm not sure if there's a limit on the reduction of 80(1)(b) [sic], because if you, say, got to below 50 per cent, well, then, is there - is that really control? But, in our submission, it is to provide some allowance in circumstances like this, where Mr Tao, through Amber Investments, which is a related person, has the 25 per cent interest in the beneficial interest.

178 A little later, the Tribunal again returned to s 82(1)(b) and the following exchange took place with counsel for the applicant:[233]

COUNSEL: . . . - the effect of the control, in my submission, needs to be equivalent to an interest for the purposes of chapter 3. It's not merely the ability to determine or influence the financial operating policies of the landholder. Senior Member, those are my submissions.

SENIOR MEMBER: Sorry. Were you going to address the - - -

COUNSEL: The - - -

SENIOR MEMBER: - - - additional grounds?

COUNSEL: Well, that deals with - sorry. My apologies. Grounds 1 and 2. The third ground being the - well, the 25 per cent interest that Mr Tao takes into account should be taken into account to reduce the extent of his acquisition by 25 per cent, such that the assessment should be reduced to only reflect a 75 per cent interest. This is as ..... permitted under 81, subsection (1)(b) - sorry. It's 82 - - -

SENIOR MEMBER: So 82(1) - - -

COUNSEL: - - - (1)(b). My apologies. It is appropriate in the circumstances where Mr Tao, through Amber Investments, held a 25 per cent interest in the unit trust. If there - if the tribunal finds that he did acquire control, in my submission, it could only have been then over control of the other 75 units, not the 25 of Amber Investments. And that's consistent with how duty is charged under section 86, which contemplates an aggregation of interests by a person, or an associated person.

SENIOR MEMBER: And I'm assuming you're not aware of any decisions that have looked at 82(1)(b) or equivalent wording?

COUNSEL: No, Senior Member. I - my instructor and I ..... myself have also searched under 82 and its predecessor, and there is not, to my knowledge - and it hasn't come up in the materials shared between the parties either - a case that's considered the application of the provision more broadly or how 82(1)(b) would operate.

179 It is clear from these exchanges before the Tribunal that on each occasion when the Senior Member enquired of counsel for the applicant as to what he contended was the operation of s 82(1)(b) and what it was designed to achieve, the applicant's responding submissions concerning s 82(1)(b) were presented through its new Ground 3, where the applicant sought to have the acquisition of control reduced from the prima facie 100% to 75%. At no stage did the applicant contend before the Tribunal that a lesser percentage - of zero - should be determined by the Tribunal 'to be appropriate in the circumstances' - and save for Mr Tao's shareholding in Amber,[234] no other 'circumstances' were advanced that were capable of supporting a determination of a percentage of zero.

180 In the present case, it is clear that the Tribunal's Reasons were framed as a response to the case that was presented before it, and the Tribunal determined the issues that were raised for decision. As Osborn J stated in Gombac Group Pty Ltd v Vero Insurance Ltd,[235] (and Croft J endorsed in his recent judgment in The Trust Company[236]) '[o]n appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal'. In my view, in circumstances where the case the applicant advanced before the Tribunal concerning the operation of the dispensing provision in s 82(1)(b) sought a reduction by way of 25 per cent only, it is not open to the applicant to run a case before the Court on appeal in effect contending that the Tribunal 'erred' in law by not reducing the relevant acquisition of control to zero. To allow that matter to be raised now before the Court would be inappropriate, and leave to appeal should therefore be refused.

181 Another reason not to grant leave is the additional safeguard imposed by s 148(2A), requiring that the Court may only grant an application for leave if it is satisfied that the appeal has a 'real prospect of success'. In the present case, essentially for the reasons advanced by the Commissioner, I am not satisfied that Ground 1 has a real prospect of success. As the Commissioner contended, reference to the Tribunal's Reasons shows that the Tribunal actually 'did that which the applicant contends it failed to do'.[237] In its Reasons, which commence with an overview of the relevant legislative provisions (in paragraphs 9-17), the Tribunal's analysis is divided into two parts, with its analysis of the precondition in s 82[238] being addressed in paragraphs 74-80, and its analysis concerning the exercise of the discretion in s 82(1)(b) in paragraphs 121-128. Those paragraphs demonstrate that the Tribunal addressed first, the precondition, and reached the prima facie conclusion that the applicant had acquired control of the landholder, and having done so, continued then to consider the second aspect, namely, whether it is appropriate in the circumstances to determine a lesser percentage than 100% as the relevant acquisition.

182 Further, as counsel for the Commissioner observed, the applicant has not identified 'any actual substantive error in the reasoning of the Tribunal'[239] and does not seek to advance any explanation as to why, or in what way, the analysis set out in paragraphs 121-128 of the Reasons 'is not a consideration of the very factors that the Tribunal ought to have considered when exercising the discretion in the second part of s 82.'[240]

183 Turning to the second limb of the applicant's contention set out in question of law #1, to the effect that the Tribunal, in describing the dispensing discretion in s 82(1)(b) as 'an aspect of the context' (at [98]), operated to relegate it to some part of the background, rather than treating it as part of the text of s 82(1), it will be seen that the contention is misplaced. The Tribunal's reference to 'context' in paragraphs 96-98 of the Reasons is made as a step in the Tribunal performing the process of statutory construction of s 82, as outlined in paragraph 91. In Alcan, the High Court reiterated that 'the task of statutory construction must begin with a consideration of the text itself' and said '[t]he meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision,[241] in particular the mischief[242] it is seeking to remedy.'[243]

184 In construing s 82, and the 'acquisition of control', as one of three classes of relevant acquisition dealt with in Chapter 3, it was important for the Tribunal to understand the differences between it and the other two classes, being the acquisition of a direct interest (ss 78-80) and an acquisition of an economic entitlement (s 81). Having noted that s 82 operates on a residual basis (i.e. it only applies where there is no relevant acquisition of a direct interest (under s 79) or a synthetic (or economic) interest in a trust (under s 81)), it was relevant for the Tribunal to observe, and consider, the differences between the mechanism for determining the extent of the interest under each of s 79 and s 81 and the absence of such a mechanism in the case of s 82, and to note that each of s 81 and s 82 has a similarly worded dispensing provision permitting a reduction in the extent of the 'relevant acquisition' where the Commissioner determines that to be 'appropriate in the circumstances.' In my view, the observations made by the Tribunal in paragraphs 96-98 of its Reasons were an important part of its process of construing the text of s 82(1), and the operation of the dispensing discretion in s82(1)(b).

Ground 4: The Tribunal failed to appreciate the purpose and intended function of the dispensing discretion in s 82(1)(b) when construing s 82 as a whole

185 The question of law posited in respect of Ground 4 concerns whether the Tribunal 'failed to appreciate - and articulate - the actual purpose and intended function of the dispensing discretion in s 82(1)(b) when construing s 82 as a whole', which the applicant contends:[244]

required the Commissioner (the Tribunal) to take account of (and give appropriate weight to) each of the following considerations under s 82(1)(b):

(i) the sheer breadth of the deeming provision which, by its very language, has the acknowledged potential to apply to some transactions that Parliament never intended to be taxed; and

(ii) the inclusion of the dispensing discretion (in the hands of the Commissioner) as a means to ensure that those transactions that may technically fall within the terms of the deeming provision but which were never intended by Parliament to be captured by the provision are not, in fact, taxed; and

(iii) the expectation that the dispensing discretion would be exercised by the Commissioner (or the Tribunal) in accordance with: (a) the purpose of s 82 (being a specific anti-avoidance provision); (b) the purpose of the landholder provisions (which largely mirror the transfer duty provisions); and (c) the purpose of the transfer duty provisions; and

(iv) the dispensing discretion is not to be ignored, nor is its core purpose to be overlooked, with the result that innocent transactions wrongly become the subject of landholder duty under s 82; and

(v) the absurd or capricious results that would follow if s 82 were allowed to apply literally, uncontrolled by the responsible and mature application of the dispensing discretion. If this Tribunal decision is allowed to stand, every change of director for any landholding company (such as Barristers Chambers Limited) and every change of director for every corporate trustee of a landholding unit trust will give rise to a liability to landholder duty. Such an outcome is, on any view, absurd and obviously not one that was intended by Parliament when it introduced s 82 (and its predecessor, s 79(5)). In cases such as this, it was Parliament's intention that, assuming a prima facie liability arose under s 82, that the dispensing discretion would be exercised in full.

186 Ground 4 of the Notice of Appeal is framed in similar terms:[245]

Ground 4: The Tribunal failed to take into [account,] appreciate, and articulate, the purpose and intended function of the dispensing discretion in s 82(1)(b). Had the Tribunal done so, it would have exercised that discretion in full in favour of the appellant.

187 The applicant submits that the Tribunal, in its Reasons (at [74]-[80]) where it concluded that the applicant had acquired control of the landholder, and (at [91]-[104]) where it discussed the purpose of s 82(1), 'failed to give any consideration, or any informed consideration, to the role, purpose and intended function of the dispensing discretion in paragraph (b) of s82(1).'[246]

188 Before the Court, counsel for the applicant referred to the decision of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority,[247] where McHugh, Gummow, Kirby and Hayne JJ stated:[248]

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.[249] The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole".[250] In Commissioner for Railways (NSW) v Agalianos[251], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.[252]

189 Accordingly, the applicant contended that in the present case:[253]

1. ... the Tribunal had to consider the intended purpose of the provision (s 82) in the context of its surrounding provisions (the landholder provisions, which impose a tax on significant changes of beneficial ownership of land held by certain entities). This, the Tribunal did not do. Instead, the Tribunal approached the meaning, and construction, of s 82 as if it was interpreting a provision in the Corporations Act 2001 (Cth) (Corps Act) (and without any real regard to the dispensing discretion in s 82(1)). ... It is the dispensing discretion in paragraph (b) of s 82(1) that demands that s 82 be read as a provision in the landholder provisions, attracting all the considerations that that entails.
2. Furthermore, the potential application of the discretion in paragraph (b) of s 82(1) was something that had to be considered by the Tribunal when deciding how s 82(1) was to apply to the applicant in this case. The Tribunal failed to do this and, it follows from this, that the Tribunal failed to appreciate the purpose and intended function of the discretion. This discretion was inserted, in short, to ensure that this very broadly expressed anti-avoidance provision did not tax transactions that were not intended to be caught. The Tribunal had to appreciate - and articulate - the intended work of the dispensing discretion in s 82(1) (ie, in the second part of s 82(1)) before it began its analysis of s 82, and whether and, if so how, s 82 could apply to the applicant in this case. This, it did not do.

190 The Commissioner, on the other hand, contends that reference to the Tribunal's Reasons at paragraphs 122-124 shows that the Tribunal 'did exactly that which the applicant contends the Tribunal did not do.'[254]

191 First, counsel referred to the second bullet point in paragraph 122 of the Tribunal's Reasons, which states:

• the potential for the default presumption to give rise to inappropriate outcomes (i.e. it may result in duty on a 100% interest when, in fact, the person who has obtained control has really only increased their interest in the landholder by a lesser percentage).

The Commissioner submits that here, the Tribunal finds, in effect, that the purpose and function of s 82 is to 'guard against the otherwise extant potential for the default presumption to give rise to those inappropriate outcomes.'[255]

192 Secondly, counsel for the Commissioner referred to paragraph 124, where the Tribunal stated:

1. Nevertheless, in circumstances where the Landholder Regime has been accepted as an anti-avoidance provision, to prevent the indirect acquisition of a landholder without paying duty, I consider it appropriate to take account of pre-existing interests held in the landholder, even where those interests are not held directly.

The Commissioner submits that in this passage of its Reasons, the Tribunal finds that the intended function of the discretion in s 82(1)(b) is to 'mitigate the operation of the anti-avoidance provision of the landholder regime'[256] and it serves as 'a clear articulation' by the Tribunal as to how it 'contended that the role, purpose and intended function of the discretion in s 82 was to have due and fair operation.'[257]

193 Counsel for the Commissioner also responded to the applicant's submissions concerning the 'guidance' on the SRO website, insofar as it refers to the appointment of a person to the board of directors of a landholder. The relevant passage, which is extracted in paragraph 84 of the Tribunal's Reasons, is reproduced earlier in these reasons (at paragraph 153 above). It will be recalled that the applicant effectively contended that notwithstanding the 'guidance' given, the Commissioner's approach to the issue in this case means that whenever there is a change of a single director of a company, the result will be that there is a change of control. Counsel for the Commissioner responded by noting that the statement on the SRO website is 'contemplating a company that has a board of directors' rather than a situation where the director appointed is a 'sole' director and is the only agent of the landholding company.[258] Counsel said that the Commissioner's submission is, consistent with the website, that 'the mere fact of a change of director may, in various circumstances, be entirely insufficient to ground the finding that that new director directly or indirectly controls a private landholder.'[259]

194 Counsel for the Commissioner contended that, in this case, the applicant's submissions also ignored another key fact that is present here, namely that 'the change of the sole director and sole agent also came about at the near contemporaneous time that Mr Tao acquired not just shares in the company, not just a controlling share in the company, such as he holds in Amber, but the entire shareholding of the company.'[260] Counsel reiterated that the example addressed on the SRO website is directed to the situation where there is a board of directors and then 'only if the shareholders or unit holders could not be said to have had conferred on them benefits similar to holding an interest in the land owner.'[261]

195 The Commissioner submits that while there remains an element of 'anti-avoidance' in s 82, it is also the case that s 82 is to be read as a discrete head of taxation, and that there are 'policy reasons made clear in the second reading speech why it ought to be read as discrete alternative bases for tax.'[262] Counsel observed that the evident policy decision that was made when the landholder regime was introduced in 2012 was that the previous land rich provisions were 'too complicated in their application and so that the policy decision was made that the relevant liability to taxation requirements be simplified ... by way of three different categories of relevant acquisition tests that are to be applied.'[263] The Commissioner contends that the 'acquisition of control' is a benefit that is different from the acquisition of a beneficial interest in the private landholder, and says the 'purpose of the s 82 basis of tax is to bring to tax those acquisitions which give to the person who makes the acquisition the benefit of being able to control that entity which owns the land.'[264] Counsel observed that in s 82(2), the legislature has made a deliberate decision in choosing the relevant criterion by which the acquisition of control under s 82(1) is to be assessed, framing it by reference to the person's ability to influence the outcome of decisions about the private landholder's financial and operating policies. Counsel submitted:[265]

And that makes sense because that also is the ability to influence the outcome of decisions about the underlying exercise and use that is made of the landholding that is a million dollars or more. So if it is the case that Parliament makes the decision that it is the control over a private landholder, the control over the underlying assets that that brings, being assets of a million dollars or more in land, is a benefit that is worthy of imposing tax, then it makes sense with respect for Parliament to make the relevant element of control that of the influence in the private landholder's financial operating policies for as long as that private landholder remains the private landholder, subject, of course, to the ability of the unit holders to vote to remove the trustee company as the private landholder.

196 As will be noted, the arguments that the applicant now seeks to raise as demonstrating an error of law on the part of the Tribunal were not raised or ventilated before the Tribunal. Nevertheless, as the Commissioner submits, the Tribunal in its Reasons did actively consider and address the operation of s 82, the role of the 'unfettered discretion' in s82(1)(b), and in so doing, whether it was 'appropriate' for the Tribunal to take account of pre-existing interests held in the landholder, even where those interests are not held directly. Having done so, the Tribunal gave the applicant leave to rely on its (newly raised) Ground 3 and determined that 'it is appropriate' that the relevant acquisition - being an acquisition of control over a private landholder which 'is taken' or deemed to have occurred under s 82 - 'be reduced to reflect the pre-existing economic interest held by Mr Tao, namely to 85%.'[266]

197 The fundamental flaw in the applicant's case under Ground 4 is that it is predicated on an erroneous view of the landholder provisions and their operation. Following the introduction of the landholder provisions in 2012, it is clear that the three classes of 'relevant acquisition' set out in Part 2 of Chapter 3 are different in character - direct interest| economic entitlement | control - and it is not (or is no longer) correct to describe the landholder provisions in the way the applicant does[267] as being 'provisions, which impose a tax on significant changes of beneficial ownership of land held by certain entities'.

198 Importantly, an 'acquisition of control' under s 82 does not involve notions of beneficial ownership. Rather, s 82 is concerned with the acquisition of control - more particularly, control over a private landholder - that is attained where a person 'acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies' taking into account the matters set out in s 82(2)(a) and (b). Subsection 82(3) makes clear, if it was not already, that the acquisition of control provision in s 82(1) operates 'regardless of interests or economic entitlements held by any other person in the private landholder', with the result that a person may be 'taken ... to have made a relevant acquisition in the landholder' by reason of the acquisition, directly or indirectly, of control notwithstanding that other persons may hold interests or economic entitlements in the landholder.

199 The construction of s 82, and the operation of the dispensing provision in s 82(1)(b), is to be determined by following the process outlined by the High Court in Project Blue Sky,[268] and in Alcan.[269] Thus, the process of construction must begin by examining and considering the text of the provision itself, and acknowledging that the meaning of the text that is being construed 'may require consideration of the context, which includes the general purpose and policy of a provision,[270] in particular the mischief[271] it is seeking to remedy.'[272] But, as Gordon J cautioned in Commonwealth of Australia v Yunupingu,[273] '[a] purpose ascertained from history cannot override the text. The purpose must be evident in the text.'

200 In its outline of submissions, the applicant effectively treats the dispensing discretion in s 82(1)(b) as if its construction is to be arrived by having regard to 'the key judgments on dispensing discretions' being 'the three Victorian judgments on dispensing discretions in the landholder provisions', namely (footnoted as) Challenger Listed Investments Ltd v Commissioner of State Revenue (Pagone J), STIC Australia (Davies J) and Urban Consolidation Pty Ltd v Commissioner of State Revenue[274] (Judge Jenkins), (and see also Macnamara Dep P (as he then was) in STIC Australia Pty Ltd v Commissioner of State Revenue[275]). While each of those cases concerns the application of exemptions available under the Duties Act 2000, it is clear that none of them actually considers or concerns exemptions available under 'the landholder provisions', because each of them was decided before the landholder provisions were introduced in 2012.

201 It is convenient to turn to the construction of s 82(1)(b).

Construction of s 82(1)(b)

202 Section 82(1) provides:

(1) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a private landholder, other than by a relevant acquisition dutiable under this Part, then, on the acquiring of that control, the person is taken, for the purposes of this Part, to have made a relevant acquisition in the landholder of -

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

203 The drafting of s 82 is typical of the drafting techniques adopted in anti-avoidance legislation, particularly in the tax area, where not uncommonly the basis of the tax is expressed broadly and there is a discretion conferred on the Commissioner to relieve a taxpayer from the burden of the tax. The decided cases demonstrate that the language in which the discretion is conferred is important when considering the scope and operation of the provision.

204 In Challenger Listed Investments Ltd v Commissioner of State Revenue, a case involving the 'land rich' regime provisions, when considering the dispensing language contained in the 'exempt acquisition' provision in (then) s 85(2) of the Duties Act 2000,[276] which was framed in terms of 'would not be just and reasonable', Pagone J explained:[277]

[29] It is a feature of modern taxing legislation that the basis of tax is at times expressed more broadly than the policy underlying the tax requires and that the language used to impose the tax is expressed less precisely than may be desirable in every case. The discretion in the Commissioner to relieve a taxpayer from the burden of tax is a means by which the legislature has entrusted to the Commissioner the duty to administer the tax legislation by reference to its terms to the extent that they are consistent with the policy they express. The exercise of the discretion is a matter for the Commissioner but a matter that may be relevant to its exercise is the extent to which the assessment brings to tax "changes in beneficial ownership in land."[278]

205 His Honour also made clear that the statutory criteria in (then) s 85(2), of 'would not be just and reasonable' is not to be answered or satisfied simply by asking whether the application of the exemption provision to particular facts is 'not anomalous or abnormal', which was another form of language used in dispensing discretions. His Honour stated:

[26] . . . In my view there is no warrant for the substitution of "not anomalous or abnormal" for the statutory formula "just and reasonable."

[27] It may readily be accepted, as the Commissioner said, that the purpose of a dispensing power is to avoid (in many if not in all cases) the need to specify the minutiae of every circumstance where the tax burden is to be relieved. It may also be the case that in some circumstances whether it is just and reasonable to exercise the dispensing power in s 85(2) will be satisfied by considering whether the application of the section is anomalous or abnormal. However, there is no justification to embark upon a consideration of whether to apply the section in the way he has done in this case. The statutory test is not whether application of the provision to the facts of a case are anomalous or abnormal but rather (however helpful those concepts may be to the conclusion) whether application of the provisions to the acquisition "in the particular case" would "not be just and reasonable." ...

206 The dispensing power in s 85(2) was also the subject of consideration by Davies J in STIC Australia, which was decided a few months after Pagone J's decision in Challenger, where her Honour further discussed the meaning of the expression 'would not be just and reasonable' in s 85(2), as follows:[279]

[18] Section 85(2) does not express any limit on the exercise of power other than that the decision-maker must be satisfied that the charging of duty on the relevant acquisition "in the particular case would not be just and reasonable." The power is circumscribed only by the terms of the section itself and the scope, purpose and subject matter of the Duties Act 2000 (Vic).

[19] The specific language of s 85(2) does not confine the exercise of discretion other than by reference to the content of the requirement that it would not be "just and reasonable" for duty to be charged on the relevant acquisition. They are relative terms which import the requirement to consider the circumstances of the case as a whole.[280] That is made clear by the requirement that the exercise of the dispensing power be directed to the "particular case," importing the requirement that the individual merits of the particular case are to be considered. Both the conferring of the discretion on the Commissioner and the width of the discretion is deliberate. These kinds of dispensing powers have been considered in many cases and should not be narrowly construed. In Challenger Listed Investment Ltd v Commissioner of State Revenue[281] Pagone J stated:

What the Commissioner is compelled to consider is everything which may bear relevantly and probatively both for and against the exercise of the discretion and to do so by reference to the statutory criteria. ...

It is a feature of modern taxing legislation that the basis of tax is at times expressed more broadly than the policy underlying the tax requires and that the language used to impose the tax is expressed less precisely than may be desirable in every case. . . .

It is clear that parliament provided a dispensing power that is capable of exercise by reference to the widest range of factors, leaving it to the decision-maker to weigh all the circumstances, guided and controlled by the object and purpose of the Duties Act 2000 (Vic).[282]

. . .

[26] In my view, the evident purpose of s 85(2) is to enable the Commissioner to relieve a taxpayer from duty consequences attaching to a relevant acquisition in circumstances where Chapter 3 operates on its terms to bring within its operation transactions that Chapter 3 was not intended to capture.

207 In the present case, the Commissioner contended that the authorities concerning the construction of the exemption formerly contained in s 85(2) of the predecessor land rich regime do not assist in the present case, and the Tribunal was not required to have regard to them, as the exemption was framed 'in markedly different terms (and has since been repealed[283])'.[284] I share that view.

208 Further, in my view, as each of Challenger and STIC Australia concerned earlier iterations of the 'land rich' provisions in the Duties Act 2000, and not the landholder provisions of the Duties Act 2000 under consideration in the present case,[285] some caution must be exercised and care taken not to simply apply their Honour's respective statements about the 'scope, purpose and subject matter of the Duties Act' as in force in those cases to the situation that applies in the context of the landholder provisions in force on 11 February 2014, that are the subject of the present case. As the Court of Appeal cautioned in Oliver Hume Property Funds (Broad Gully Rd) Diamond Creek Pty Ltd v Commissioner of State Revenue:[286]

1. Some care ought be taken in utilising cases which concern different legislation, since legislative provisions must be construed according to their own unique language, purpose and context. Each also turns on its own particular factual context.

209 The text of subs 82(1) is framed in broad terms - 'if a person within a 3 year period acquires, directly or indirectly, control over a private landholder' - that is to say, the language used is designed to capture acquisitions, and creeping acquisitions, of control made over time within a period of three years, that are made 'directly or indirectly'. While the 'dispensing discretion', which permits the Commissioner to determine that a lesser percentage (than 100%) is 'appropriate in the circumstances', is unfettered, the evident purpose of s 82(1)(b) is to enable the Commissioner to relieve a taxpayer from (or ameliorate) duty consequences attaching to a relevant acquisition in circumstances where s 82 would (otherwise) operate on its terms to charge duty on an acquisition of control and result in an outcome which is not 'appropriate in the circumstances', where for e.g., the taxing provision operates in a manner such that the result does not accord with the scope, purpose and object of Chapter 3.

210 In the present case, as the Commissioner noted, in exercising the discretion, the Tribunal commenced from the correct starting point, observing that the 'unfettered' discretion in s 82(1)(b) is 'to be exercised having regard to those relevant considerations "to be found in the subject-matter, scope and purpose of the provisions"'.[287] Further, the Commissioner submitted:[288]

In order to consider the contentions that the Applicant advanced at the hearing as to why s 82(1)(b) should apply, the Tribunal informed itself that the dispensing discretion operates on a residual basis,[[289]] the landholder regime is anti-avoidance in nature, and it was therefore appropriate to take into account pre-existing interests in the landholder: Reasons [122]-[124]. However, the weight to be given to each of those considerations was a matter for the Tribunal.[290]

211 The Commissioner also submitted that, contrary to the applicant's contention, the Tribunal was not otherwise required to have regard to (what the applicant described as) the 'high-level policy considerations'[291] set out under Ground 4 and in his outline of submissions[292] (reproduced as paragraphs (i)-(v) above). As will be noted, the 'high-level policy consideration' raised in paragraph (iii) erroneously describes the purpose of s 82 and of the landholder provisions, in terms (emphasis in bold italics added):

(iii) the expectation that the dispensing discretion would be exercised by the Commissioner (or the Tribunal) in accordance with: (a) the purpose of s 82 (being a specific anti-avoidance provision); (b) the purpose of the landholder provisions (which largely mirror the transfer duty provisions in relation to the acquisition of "significant interests" in landholders); and (c) the purpose of the transfer duty provisions;

212 In respect of the applicant's 'high-level policy consideration' raised in paragraph (iv) of Ground 4, it is unclear what is meant by the expression 'innocent transaction'. However, if as a result of 'an innocent transaction', a person meets the criteria in the text of s 82 for an acquisition of control and is thereby taken to have made a relevant acquisition in the landholder, s 82(1)(b) clearly empowers the Commissioner to relieve a taxpayer from (or ameliorate) duty consequences attaching to a relevant acquisition in circumstances where s 82 would (otherwise) operate on its terms to charge duty on an acquisition of control and result in an outcome which is not 'appropriate in the circumstances', where for e.g., the taxing provision operates in a manner such that the result does not accord with the scope, purpose and object of Chapter 3.

213 In respect of the applicant's 'high-level policy consideration' raised in paragraph (v) of Ground 4, the Commissioner observed that the applicant 'wrongly equates the facts of this case (in which the applicant became both the sole shareholder and the sole director of the corporate trustee of a landholding unit trust) with "every change of director for any landholding company (such as Barristers Chambers Limited) and every change of director for every corporate trustee of a landholding unit trust".'[293] And in so doing, the applicant 'ignores the obvious point of distinction between cases of landholding unit trusts whose management and control is diversified amongst a number of people with this case: in which the "control over a private landholder" is centralised in a single shareholder and single director.'[294]

214 The position is that in the present case, the Tribunal both considered and applied the dispensing provision to the circumstances of the case, and the argument that was advanced by the applicant. The Tribunal expressly acknowledged:[295]

• the potential for the default presumption to give rise to inappropriate outcomes (i.e. it may result in duty on a 100% interest when, in fact, the person who has obtained control has really only increased their interest in the landholder by a lesser percentage).

215 Further, the Tribunal considered that given that the Landholder Regime has been accepted as an anti-avoidance provision 'to prevent the indirect acquisition of a landholder without paying duty', it was 'appropriate to take account of pre-existing interests held in the landholder, even where those interests are not held directly.'[296]

216 For the foregoing reasons, I would not grant leave in respect of question of law #4/ Ground 4, and I do not consider the appeal has a real prospect of success.

Ground 5: As a result of failing to consider (at all) the potential application of the dispensing discretion in paragraph (b) of s 82(1), the Tribunal failed to take into account many facts of this case that were relevant to the discretion**[297]**

217 The question of law raised in respect of Ground 5 lists a host of 'fact-specific considerations'[298] (see question of law #5, reproduced at paragraph 47 above) that the applicant contends are 'highly relevant to the exercise of the dispensing discretion in s 82(1)(b)' and are 'considerations that the Tribunal relevantly failed to take into account'. In Ground 5 the applicant contends that 'had the Tribunal done so, the Tribunal would have exercised that discretion in full in favour of the applicant.'

218 Perusal of the list of 'fact-specific considerations' as set out in the applicant's outline (at [26]) reveals that the fact-specific consideration concern matters such as:

(i) the absence of any change in the indirect beneficial ownership of the land held by the landholder ...;

(ii) the absence of any entitlement (or any greater entitlement) by the applicant to a distribution of property on a notional winding up ...;

(iii) the need to perform a hypothetical winding up of the landholder before and after the alleged acquisition of control ...;

(iv) the extent (if any) to which the alleged acquisition of control involved an alteration of legal or equitable rights of the landholder, or of the unitholders' units in the landholder;

(v) whether the alleged acquisition of control was an event which merely continued an existing state of affairs in relation to the (direct and indirect) ownership of the landholder's property without effecting any transaction over the landholder's property, or over the units held by the unitholders in the landholder;

(vi) whether the alleged acquisition of control was an event which merely continued an existing state of affairs in relation to the (direct and indirect) ownership of the landholder's property without creating the potential for any transaction over the landholder's property, or over the units held by the unitholders in the landholder;

(vii) in relation to the acquisition of the shares in the trustee company: the presence, and relevance, of s 72(2)(b)[[299]] - and whether this provision requires the acquisition of any shares in a trustee company (as here) to be completely disregarded (leaving the appointment as director as the only relevant fact which could attract the potential application of s 82(1) in this case);

(viii) the absence of any intention by (or ability for) the (applicant) director to acquire any indirect beneficial interest, or any greater indirect beneficial interest, in the land held by the landholder;

219 While matters such as 'beneficial ownership', 'entitlement', and an 'hypothetical' or 'notional' winding up may be relevant in the context of for e.g., an acquisition of a direct interest under ss 79-80. It is unclear why and how such matters are relevant in the context of an acquisition of control under s 82. As noted earlier, the relevant test under s 82 concerns 'the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies ...' and is not one concerned with strict legal ownership or beneficial interests.

220 Notwithstanding that the criterion for control is as outlined above, the applicant submitted that the Tribunal was required, by paragraph (b) of s 82(1), to take all of these 'transaction-specific considerations' into account and had it done so -[300]

it would have quickly concluded that there was no possible justification for the imposition of a tax liability on the applicant on being appointed director (where the effect of the application of s 82 was to treat the applicant as if he had acquired (indirectly) a 100% (or 85%) interest in the underlying land).

221 Further, the applicant submitted:[301]

1. To equate the appointment of the applicant as director with him having acquired a 100% beneficial interest in the land held by the Trust is nothing short of absurd - yet this is the effect of the Tribunal's decision (and the Commissioner's submissions, based on the Commissioner's afterthought).

. . .

1. All that happened here was a change of director of a trustee company - that, with respect, is not tantamount to a change of beneficial ownership of 100% (or 85%) of the land. The claim by the Commissioner that s 82 could possibly apply in this case should have been given short-shrift by the Tribunal. . . . Even if it could be said that the applicant acquired "control" (as any director would in those circumstances), the dispensing discretion in paragraph (b) of s 82(1) exists for a very good reason - to temper the potentially extreme reach of the taxing provision (and of the Executive) and to ensure that only those acquisitions of control of a landholder that Parliament intended be caught by this anti-avoidance provision are to be caught.

222 The Commissioner responded by observing, at the outset, that it is 'very difficult to understand' how the applicant contends the 16 listed 'fact-specific considerations' he says were required to be taken into account constitute the singular ground of appeal that the applicant is agitating as the actual error that the Tribunal failed to take into account.[302]

223 The Commissioner then proceeded to advance four submissions as to why Ground 5 should not succeed. First, the Commissioner submits that while the applicant contends that the Tribunal, 'in the principal part of its reasons ([74]-[80] and [91]-[104]) failed to take into account any of the fact-specific considerations which were highly relevant to the exercise of the discretion in paragraph (b)',[303] the true position is that the Tribunal did consider those of the 'fact-specific considerations' that were actually relevant to the exercise of the discretion. In that regard, counsel observed that when addressing the issue of 'Is it appropriate in the circumstances to determine a percentage less than 100% as the relevant acquisition?', the Tribunal's Reasons record at paragraphs 111 to 113 'those fact-specific considerations that Mr Tao actually asked the Tribunal to take into account.'[304] Further, counsel submitted, the Tribunal's 'Analysis' at paragraphs 121 to 127, especially at paragraph 125, and its 'Conclusion' at paragraph 128 shows that the Tribunal actively considered those 'fact-specific considerations' raised by the applicant. And, there is no submission by the applicant that the Tribunal failed to take into account a consideration that the applicant actually put before the Tribunal and that ought to have been considered.

224 The second of the four submissions the Commissioner advances is that the applicant now raises a range of specific and detailed considerations which he acknowledges are 'fact-specific'. Being 'fact-specific', they are matters of the kind that, in Kornucopia, Ginnane J observed 'if it had been raised, the Member would have been required to make findings about facts relevant to that issue'.[305] By way of example, counsel referred to the applicant's 'fact-specific' consideration (xii), which is framed as being:

(xii) where, as here, the unitholders who hold the majority of the units in the landholder control the appointment and the continued existence, of the corporate trustee (and not the director).

225 However, the Commissioner contends that '[n]o evidence is cited for that contention and there is no ground of appeal that the Tribunal was wrong in not making that finding by reference to any underlying evidence.'[306] Further, to make out that ground of error, the Commissioner submits it was necessary for the applicant to contend either that the factor was found by the tribunal or that the Tribunal was in error in not finding the factor and then explain why the failure to take that factor into account meant that there was the necessary kind of error in order to make it an error of law in the exercise of discretion.[307]

226 In that regard, in relation to any alleged error of discretion, which is the third of the four submissions, the Commissioner relied on the decision of Harper J in American Express International Incorporated v Commissioner of State Revenue, where his Honour stated:[308]

[58] ... To the extent that the Tribunal's decision involves matters of fact and degree, and in the absence of any incorrect application of the law, no appeal will lie. Put another way, I cannot interfere with the exercise of a discretion unless that exercise is vitiated by an error of law. I have no power to make a judgment about the merits of the decision itself, because the legislature has reserved that power to the respondent or, in the case of an appeal, to the Tribunal.

227 Accordingly, the Commissioner contends that, in this case, a similar position applies such that 'this court has no power to interfere with the Tribunal's discretion to reduce the deemed acquisition only by 15 per cent unless the applicant can point out the error of law and not a shopping list of factors that vitiated the exercise of that discretion.'[309]

228 By way of further example, the Commissioner pointed to the applicant's 'fact-specific' consideration (xiv) which is framed as being:

(xiv) in the case where the landholder is a private unit trust (as here), the fiduciary obligations owed by the trustee to the beneficiaries of the trust (and like fiduciary duties owed by a director of the trustee company).

229 The Commissioner noted that the matter raised in consideration (xiv) is 'an obvious contention of law as to fiduciary obligations' and says it remains unclear from the applicant's submissions as to how it 'shows in any way that the Tribunal erred in law in the exercise of its discretion.'[310]

230 The fourth matter which the Commissioner contends presents a problem for Ground 5 is that even if the applicant had asked the Tribunal to consider the raft of 'fact-specific' considerations he now raises, and even if the Court could simply re-exercise the s 82 discretion, the Commissioner's case is that 'it cannot be said ... that consideration or any of them would have justified a reduction of anything more than 15 per cent.'[311] That is, the Commissioner submits that the facts do not support this court finding error in the reduction of only 15 per cent. In particular the Commissioner submits that because the criterion in s 82 for a change of control focuses on a change of control in respect of operating policies, it cannot be contended that the change in control that was effected by Mr Tao acquiring the shares and the directorship was anything less than that for which he was deemed to acquire, namely, 85 per cent.[312]

231 Accordingly, the Commissioner submits 'there is no basis for Ground 5 to be interpreted as that ground of appeal'.[313]

232 Here again, the starting point is that the Tribunal's Reasons were formulated in response to the case the applicant presented before the Tribunal.

233 In my view, essentially for the reasons advanced by the Commissioner, it is clear that the Tribunal dealt with the matters that were raised by the applicant, and its Reasons record that the Tribunal actively considered those fact-specific considerations that Mr Tao asked the Tribunal to take into account.

234 Further, it is unclear how a host of additional 'fact-specific' considerations that were not raised before the Tribunal, but are matters that, if they had been raised, the Senior Member would have been required to make findings about facts relevant to that issue, can now form the foundation of an error of law. In my view, because of the way the case was argued before the Tribunal, it would not be appropriate to grant leave in respect of the question of law raised in relation to Ground 5.

235 I should also record that given the views I have expressed earlier in these reasons about the operation of the 'acquisition of control' test in s 82, the matter sought to be agitated on Ground 5 does not, in my view, have a real prospect of success. As noted earlier, the relevant test under s 82 concerns 'the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies ...' and is not one concerned with strict legal ownership or beneficial interests. As the Tribunal found,[314] it is not necessary that Mr Tao also obtained an interest equivalent to a beneficial interest in the WCT Unit Trust for s 82 to be engaged.

236 For the reasons set out above, in respect of each of the grounds that were pressed by the applicant, being Grounds 1, 4 and 5, leave to appeal is refused.

237 The parties are directed to consult as to the appropriate form of orders. If they are unable to reach agreement, each party must file a short outline (of no more than five pages) by 4pm on Friday, 30 January 2026.

[1] Tao v Commissioner of State Revenue (Review and Regulation) [2024] VCAT 637; CB 1399.

[2] Notice of Assessment 19676739 made on 31 May 2019; CB 0109.

[3] Commissioner's Statement of Legal Contentions (1.05.2023), at [4]; CB 1129 at 1130. The Tribunal noted (Tribunal's Reasons at [4]) that the Commissioner stated (at [3]) that he 'no longer pursue[d] the contention that Mr Tao made a "relevant acquisition" for the purposes of s 78 of the [Duties] Act'. The Tribunal observed (Tribunal's Reasons at fn 1) that this 'was on the basis of evidence provided by Mr Tao to the effect that there had been no changes to the unit-holdings in the WCT Unit Trust since its formation.' The position is that at all relevant times, Mr Tao did not hold any units in the WCT Unit Trust but an entity associated with him, Amber, held 25 of the 100 issued units in the WCT Unit Trust.

[4] Tribunal's Reasons, at [5]; CB 1399, 1401-1402.

[5] Duties Act, s 82(2).

[6] Tribunal's Reasons, at [6]; CB 1399, 1402.

[7] Tao v Commissioner of State Revenue (Review and Regulation) [2024] VCAT 637, [7], CB1399 at 1402.

[8] The Assessment which the Commissioner issued to Mr Tao on 31 May 2019, referred to the 'Relevant Acquisition' as being an 'Acquisition of a 100% interest on or about 11 Feb 2014' but the Commissioner's letter enclosing the Assessment was entitled 'Acquisition of 100% [of] the units in the WCT Unit Trust on or about 11 February 2014 (Acquisition)'. The letter stated that the Commissioner had 'determined that the Acquisition constitutes a relevant acquisition in the WCT Unit Trust and is liable to landholder duty pursuant to section 78 of the Act', and made no mention of s 82. The Commissioner raised s 82 for the first time in response to the applicant's Objection (26 July 2019), in his Notice of Determination on Objection (17 January 2022). It was not until after the referral of the matter to the Tribunal (1 May 2023) that the Commissioner, in his submissions to the Tribunal (1 May 2023) abandoned his reliance on s 78, leaving s 82 as the sole basis for the Assessment. Accordingly, the applicant contends that the statement in the Tribunal's Reasons at [3] (that when the Assessment was 'originally issued' to the applicant, the Commissioner was relying on 'either' s 78 or s 82) is not correct.

[10] Section 148(3) of the VCAT Act. See also Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic), Order 7 ─ Victorian taxation appeals, r 7.02(1)(b), r 7.03(2) and r 4.06(2).

[11] Tao v Commissioner of State Revenue (Review and Regulation) [2024] VCAT 637 (Tribunal's Reasons); CB 1399.

[14] The Tribunal noted (Tribunal's Reasons at [19]) that it appears Mr Wiemer may be the brother-in-law of Mr Tao.

[15] Recital A to the Trust Deed (CB 0135 at 0136) recorded that:

The settlor has given to the trustee the sum of $20.00 to establish a trust fund to be invested and held by the trustee upon the trusts created under this deed for the benefit of the unit holders, to be known as the WCT Unit Trust, and the trustee has agreed to act as the trustee.

[16] Internal Bendigo Bank email prepared by Mr Arthur Eskitzis (manager, asset management) dated 9 July 2013: TB, 456-457.

[18] Statement of Winfried Wiemer dated 20 September 2023 (Wiemer WS) [10].

[22] Ibid and Witness Statement of Zhiyong Tao dated 6 March 2023 (Tao WS) [21]. Mr Constantinou is more ambiguous as to whose idea it was: Witness Statement of Nicolaos Constantinou dated 6 March 2023 (Constantinou WS) [11].

[23] ASIC Form 484 'Change to Company Details' dated 11 February 2014: TB, 829-830.

[24] Email from Mr Eskitzis (Bendigo Bank) to Mr Tao and Mr Constantinou dated 7 March 2014: TB, 460.

[25] Email from Mr Tao to Mr Eskitzis dated 17 March 2014: TB, 466.

[26] Email from Mr Tao to Mr Eskitzis dated 19 March 2014: TB, 472.

[27] Email from Mr Tao to Mr Eskitzis dated 3 April 2014: TB, 479.

[30] See Tribunal's Reasons at [19], citing email dated 12 June 2014: TB 509-10.

[32] Email from Mr Eskitzis to Mr Tao dated 28 May 2014: TB, 496-497.

[33] In re-examination, Mr Tao explained that the first option did not proceed because the Chinese SOC never obtained the foreign exchange approval required to make the investment or loan.

[34] Email from Mr Eskitzis to Mr Tao dated 6 March 2015: TB, 86.

[35] The final paragraph of the email from Mr Eskitzis included a statement:

Please note that a copy of this email has been sent to Nick Constantinou in his capacity as Guarantor of debts in the name of 66 William Road Pty Ltd

[36] Company Extract Current & Historical for 66 William Rd Pty Ltd: TB, 778.

[37] Tax invoice issued by Bendigo Bank to Lynbrook Developer Pty Ltd dated 16 October 2015: TB, 625.

[38] Statement of Adjustments: TB, 626.

[43] See Pizer, Pizer's Annotated VCAT Act (7th ed, 2022) at [148.40] See also Osland v Secretary to the Department of Justice [No. 2] [2010] HCA 24; (2010) 241 CLR 320, [21].

[44] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72, [15]; Osland v Secretary to the Department of Justice [No. 2] [2010] HCA 24; (2010) 241 CLR 320, [18], [71].

[45] Spilkin v Rosenberg [2011] VSCA 128, [42].

[46] Kacinskas v McMahon [2011] VSC 458, [11].

[47] (2010) 81 ATR 682; [2010] VSC 608 at [9] (emphasis in bold italics added).

[48] Osland v Secretary to the Department of Justice [2010] HCA 24; (2010) 84 ALJR 528; 267 ALR 231; 241 CLR 320.

[49] Osland v Secretary to the Department of Justice [2010] HCA 24; (2010) 84 ALJR 528 at 536 [21]; [2010] HCA 24; 267 ALR 231 at 240 [21]; [2010] HCA 24; 241 CLR 320 at 333 [21]; citing with approval TNT Skypak International (Aust) Pty Ltd v FCT [1988] FCA 119; (1988) 19 ATR 1067 at 1069; 88 ATC 4279 at 4280; 82 ALR 175 at 178 per Gummow J.

[50] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40-41; 60 ALJR 560 at 566; 66 ALR 299 at 309.

[51] (2010) 81 ATR 682; [2010] VSC 608 at [10] (emphasis in bold italics added).

[52] [2024] VSC 232 [10]-[20].

[53] [2024] VSC 447.

[54] [2024] VSC 447, [7] (emphasis in bold italics added).

[55] Hoskin v Greater Bendigo City Council [2015] VSCA 350; (2015) 48 VR 715, 720 [9]-[11]; and see Karakatsanis v Racing Victoria Ltd [2013] VSCA 305; (2013) 42 VR 176, 186 [22] (CA); Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd [2014] VSCA 353; (2014) 45 VR 771, 782 [41] and 805 [162] and [165] (CA); and Maund v Racing Victoria Ltd [2016] VSCA 132, [67].

[56] [2024] VSC 232 [17].

[57] [2005] VSC 442 at [59] (emphasis in bold italics added).

[58] Kennedy v Shire of Campaspe [2015] VSCA 47 at [12] per Whelan and Ferguson JJA. See also Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27 at [29] per Warren CJ and Nettle JA.

[59] (2021) 64 VR 252.

[60] (2021) 64 VR 252, at 263 [45].

[61] Metricon Homes Pty Ltd v Softley [2016] VSCA 60; (2016) 49 VR 746, 757 [29] (Warren CJ, Tate JA and Robson AJA agreeing.

[62] Chopra v Department of Education and Training [2019] VSC 488, [23].

[63] Dura (Australia) Constructions Pty Ltd v Victorian Managed Insurance Authority [2012] VSC 114, [70]-[72]; Kornucopia Pty Ltd v Zhang [2019] VSC 439, [60]-[65].

[64] Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331, 337 [16] (Phillips JA, Tadgell and Batt JJA agreeing).

[66] At the hearing, the applicant no longer relied upon Grounds 2 and 3 of the Grounds of Appeal, which are formulated in substantially the same terms as Questions of law #2 and #3. (The Applicant's Outline of Submissions stated (CB 0014 at 0019) that each of Ground 2 and Ground 3 are '[n]o longer relied on'.) Later, in the applicant's post-hearing submissions filed on 6 May 2025 (Applicant's post-hearing submissions), when addressing 'Sundry matter #5: The Applicant withdraws Ground 6 as a ground of appeal', the applicant stated that he 'has now withdrawn Ground 6 as a ground of appeal'. As Ground 6 is formulated in substantially the same terms as Question of law #6, it appears the applicant no longer relies upon Question of law #6 either.

[67] Notice of Appeal, CB 0003, 0005−0008.

[68] [Section 82(1)(b) provides for the Commissioner to determine 'a lesser percentage' (than 100%) 'to be appropriate in the circumstances.']

(b) is not a land holding of a company unless the interest of the company in the land is a beneficial interest.]

[70] Notice of appeal, CB 0003, 0009-10 (emphasis in bold italics added).

[71] Tao v Commissioner of State Revenue (Review and Regulation) [2024] VCAT 637, [3], CB1399 at 1401.

[73] Notice of appeal, CB 0003, 0011 (emphasis in italics in original).

[74] Duties Act, s 70. Under Chapter 2 of the Duties Act, headed 'Transactions concerning dutiable property', duty is charged on transfers of dutiable property including estates or interests in land in Victoria.

[75] Victoria, Parliamentary Debates, Legislative Assembly, 13 May 2004, 1314, 1316 (Mr John Brumby, Treasurer) (emphasis in bold italics added). See applicant's supplementary list of authorities, Tab 29, 0723, 0726.

[76] Applicant's note on the legislative history of the landholder provisions: Extracts from the Legislation and Explanatory Memoranda, dated 21 March 2025 (Applicant's note on legislative history), Appendix 7, 95, 97, 98, 99-100 (emphasis in bold italics added).

[77] Applicant's note on legislative history, Appendix 7, 95 at 104-106 (emphasis in bold italics added).

[78] Section 4 of the 2007 Amending Act provided:

In section 76(1) of the Duties Act 2000, for "a beneficial entitlement" substitute "an entitlement".

[79] Section 5 of the 2007 Amending Act.

[80] Emphasis in bold italics added.

[81] Victoria, Parliamentary Debates, Legislative Assembly, 23 May 2007, 1591 (Mr John Brumby, Treasurer) (emphasis in bold italics added).

[83] Emphasis in bold italics added.

[84] Applicant's note on legislative history, Appendix 9, 144, 148-151, 155, 157-159 (emphasis in bold underlining added).

[85] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2023-2024 (Mr Kim Wells, Treasurer); Landholder Bill. See Annexure to the Commissioner's Further Submissions (concerning the intended operation of s 82 of the Duties Act) filed on 6 May 2025 (emphasis in bold italics added).

[86] Transcript 25.03.2025, at 100-101 (Ms O'Gorman SC).

[87] Transcript 25.03.2025, at 103-104 (Ms O'Gorman SC) (emphasis in bold italics added).

[88] Commissioner's further submissions (on s 82) (6.05.2025), at [13].

[89] Transcript 25.03.2025, at 124 (Mr Grace).

[90] (2016) 103 ATR 1; [2016] VSC 172.

[92] Transcript 25.03.2025, at 126 (Mr Grace).

[93] [2018] VSCA 185; (2018) 55 VR 643.

[94] [2018] VSCA 185; (2018) 55 VR 643, 661-662 [76]-[79] (emphasis in bold added).

[95] [2008] FCAFC 128; (2008) 169 FCR 241, 256-7 [41], 258 [50] (Weinberg, Bennett and Edmonds JJ). See also Federal Commissioner of Taxation v Raptis (1989) 19 ALD 726, 728 (Gummow J).

[96] Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186, 193-4 (Bowen CJ); Comcare v Fiedler [2001] FCA 1810; (2001) 115 FCR 328, 338 [39] (Drummond, Kiefel and Dowsett JJ); Repatriation Commission v Warren [2008] FCAFC 64; (2008) 167 FCR 511, 529-30 [78] (Lindgren and Bennett JJ); Toia v Minister for Immigration and Citizenship [2009] FCAFC 79; (2009) 257 ALR 237, 247-8 [52]-[58] (Stone and Jacobson JJ).

[97] See, eg, Secretary to the Department of Justice v Western Suburbs Legal Service Inc [2009] VSC 68; (2009) 22 VR 66, 75 [24] (Beach J); Medical Practitioners Board of Victoria v Lal [2009] VSCA 109; (2009) 23 VR 702, 713 [41] (Maxwell P, Weinberg JA and Kyrou AJA). See also Transport Accident Commission v Bausch [1998] 4 VR 249, 263-6 (Tadgell JA, Batt and Buchanan JJA agreeing); Macedon Ranges Shire Council v Romsey Hotel Pty Ltd [2008] VSCA 45; (2008) 19 VR 422, 434 [41] (Warren CJ, Maxwell P and Osborn AJA).

[98] See, eg, Harplex Pty Ltd v Konstandellos [2018] VSCA 67 [66]-[67] (McLeish and Hargrave JJA and McDonald AJA), citing Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7-8 (Gibbs CJ, Wilson, Brennan and Dawson JJ) and Vlahos Pty Ltd v Vlahos [2017] VSCA 166 [49]-[51] (Kyrou JA, Tate and McLeish JJA agreeing).

[99] Applicant's post-hearing submissions on the construction of s 82 of the Duties Act 2000 (Vic) filed on 6 May 2025 (Applicant's s 82 submission); Respondent's further submissions (concerning the intended operation of s 82 of the Duties Act 2000 (Vic)) filed on 6 May 2025 (Commissioner's s 82 submission).

[100] Commissioner's s 82 submission, at [1].

[101] Applicant's note on legislative history, Appendix 9, 144, 159.

[102] Commissioner's s 82 submission, at [6].

[103] Commissioner's s 82 submission, at [8].

[104] See Transcript (25 March 2025) at p. 25 (ll. 13-28), p. 43 (ll. 18-24), p. 52 (ll. 23-25).

[105] Commissioner's s 82 submission, at [9].

[106] Commissioner's s 82 submission, at [10].

[107] [2025] HCA 6.

[108] [2025] HCA 6 at [217].

[109] Applicant's s 82 submission, at [9] (footnotes omitted).

[110] Applicant's s 82 submission, at [11].

[111] CB 0024 and Transcript, 25 March 2025, p 13, lines 16-20: [Referring to s 72(2)(b)]: "So for the purposes of the landholder provisions, it ignores any landholdings held by a trustee because it's only concerned with beneficial interests in land which, in our case, are held indirectly by the unitholders in the unit trusts."; and p 21, lines 29-30: (T Grace).

[112] (2016) 103 ATR 1; [2016] VSC 172.

[113] (2016) 103 ATR 1; [2016] VSC 172, at [25(c)].

[114] (2016) 103 ATR 1; [2016] VSC 172, at [26]-[28].

[115] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2023 (Kim Wells, Treasurer).

[116] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2023-2024 (Kim Wells, Treasurer).

[117] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2024 (Kim Wells, Treasurer).

[118] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2024 (Kim Wells, Treasurer).

[119] Victoria, Parliamentary Debates, Legislative Assembly, 2 May 2012, 2024 (Kim Wells, Treasurer).

[120] Explanatory Memorandum, Duties Amendment (Landholder) Bill 2012, 15 (emphasis added [in italics in original]).

[121] And as to the nature of a shareholder's interest in the property of a company, see Archibald Howie Pty Ltd v Commissioner of Stamp Duties (NSW) [1948] HCA 28; (1948) 77 CLR 143; 66 WN (NSW) 51; [1948] 2 ALR 489.

[122] (2016) 103 ATR 1; [2016] VSC 172, [35].

[123] (2016) 103 ATR 1; [2016] VSC 172, [35] (emphasis in bold italics added).

[124] Ben-Odeco Ltd v Powlson [1978] 1 WLR 1093; an approach applied by the Full Federal Court in Robe River Mining Co Pty Ltd v FCT (1989) 21 FCR 1; 20 ATR 768; 89 ATC 4606; 88 ALR 50.

[125] Authorised version No. 60 (incorporating amendments as at 25 July 2007).

[126] Authorised version No. 88 (incorporating amendments as at 1 July 2012).

[127] Emphasis (in bold italics) added.

[128] Applicant's note on legislative history, Appendix 9, 159 (emphasis in bold italics added); see also Appendix 7, 94 at 105-106.

[129] [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ).

[130] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 77 [9] per Gaudron, Gummow, Hayne and Callinan JJ, 89 [46] per Kirby J; [2001] HCA 49; Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58; (2005) 224 CLR 193 at 206 [30] per Gleeson CJ, Gummow, Hayne and Heydon JJ, 240-241 [167]-[168] per Kirby J; [2005] HCA 58; Carr v Western Australia [2007] HCA 47; (2007) 232 CLR 138 at 143 [6] per Gleeson CJ; [2007] HCA 47; Director of Public Prosecutions (Vic) v Le [2007] HCA 52; (2007) 232 CLR 562 at 586 [85] per Kirby and Crennan JJ; [2007] HCA 52; Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619 at 642 [99] per Crennan J; [2008] HCA 49.

[131] Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; (2006) 228 CLR 529 at 538 [22] per Gleeson CJ, Gummow, Hayne and Heydon JJ, 555-556 [82]-[84] per Kirby J; [2006] HCA 11. See also Combet v The Commonwealth (2005) 224 CLR 494 at 567 [135] per Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 61; Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619 at 642 [99] per Crennan J.

[132] Hilder v Dexter [1902] AC 474 at 477-478 per Earl of Halsbury LC.

[133] Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397 per Dixon CJ; [1955] HCA 27, quoted with approval in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ.

[134] Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638].

[135] [2015] NSWSC 646; (2015) 106 ACSR 207 at 250 [152]-[153].

[137] Save for the change from 'the lesser percentage' to 'a lesser percentage' in the landholder provisions of the Duties Act (post-2012 introduction).

[138] Section 81(5) provides:

(a) an economic entitlement acquired by the person, either alone or together with an associated person; or

(b) the total economic entitlements acquired by the person, either alone or together with an associated person, within a 3 year period -

amounts or amount to an interest of 50% or more, the person is taken, for the purposes of this Part, to have made a relevant acquisition of -

(d) a lesser percentage interest in the landholder determined by the Commissioner to be appropriate in the circumstances.

[139] (2016) 103 ATR 1; [2016] VSC 172, fn 55.

[140] Emphasis in bold italics added.

[141] See s 89E(3).

[142] Notice of Appeal, Question of law #1, CB 0005.

[143] Transcript 25.03.2025, at 22 (Mr Grace).

[144] Applicant's outline of submissions (18.10.2024) (Applicant's outline) at [6].

[145] Applicant's reply submissions (29.11.2024) at [7(iii)] (emphasis in italics in original).

[146] Respondent's outline of submissions (15.11.2024), at [2].

[147] Respondent's outline of submissions (15.11.2024), at [22].

[148] Respondent's outline of submissions (15.11.2024), at [23] citing Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ), and quoting Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ). See also eg. Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 at [22]; Director of Public Prosecutions v Walters (2015) 49 VR 356 at [2]; Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269 at [56]-[63].

[149] Respondent's outline of submissions (15.11.2024), at [24].

[150] Respondent's outline of submissions (15.11.2024), at [24], citing Reasons at [74]-[80].

[151] Respondent's outline of submissions (15.11.2024), at [24], citing Reasons at [81]-[85] and see also Transcript (18 June 2024) P-4, 18-25.

[152] Respondent's outline of submissions (15.11.2024), at [24], citing Reasons at [91]-[104].

[154] A term defined (in Duties Act, s 3) as any unit trust other than a public unit trust or a wholesale unit trust. It is uncontentious that WCT Unit Trust was a private unit trust scheme.

[155] Duties Act, s 71(1).

[156] Ibid, s 77.

[157] (2016) 103 ATR 1; [2016] VSC 172 [59].

[160] Tribunal's Reasons, [74]-[80] (emphasis in bold italics added).

[161] [This is a reference to Mr Constantinou's evidence that from the time the receiver and manager was appointed to Maclaw547 in June 2013, Mr Constantinou 'had to take a back seat' so far as its investment in the WCT Unit Trust was concerned.]

[162] Applicant's outline, at [7]-[8].

[163] Transcript 25.03.2025, at 19 (Mr Grace).

[166] [1969] HCA 5; (1969) 119 CLR 365 (Giris).

[167] Transcript 25.03.2025, at 25 (Mr Grace).

[172] Tribunal's Reasons, [91]-[104] (emphasis in bold italics added).

[173] See, for example, GJ Grantham Pty Ltd v Commissioner of State Revenue [2019] VCAT 1275 [49] and Sharlin Pty Ltd v Commissioner of State Revenue [2022] VCAT 378 [9]-[10].

[174] Duties Act, s 82(1)(a).

[175] Ibid, s 79(1).

[176] Ibid, s 81(2).

[177] Duties Act, s 81(5)(d) and [sic].

[178] See section 79(5)-(7) of version 87 of the Duties Act (incorporating amendments as at 28 June 2012).

[179] ['BPG' is a reference to Croft J's decision in BPG Caulfield Village Pty Ltd v Commissioner of State Revenue (2016) 103 ATR 1; [2016] VSC 172.]

[180] Explanatory Memorandum to the State Taxation Act (Tax Reform) Bill 2004, 18-19 (emphasis added).

[183] Applicant's post-hearing submissions on the construction of s 82 (06.05.2025) (Applicant's s 82 submissions), Part F, at [22].

[184] Applicant's s 82 submissions, Part F, at [23].

[185] Applicant's s 82 submissions, Part F, at [24].

[186] [1969] HCA 5; (1969) 119 CLR 365 (Giris).

[187] As McTiernan J explained in Giris (at p 375), the two sections relate to the liability of trustees to taxation under the Act in respect of the income of trust estates in cases in which there are no beneficiaries presently entitled to such income.

[188] In Giris, the taxpayer objected to the Commissioner's assessment of the trust income pursuant to s 99A on the ground that it was unreasonable that s 99A should apply and contended that s 99 should apply instead. The objection was disallowed and the taxpayer appealed to the High Court, where the issue of validity of ss 99 and 99A was directed to be argued before a Full Court.

[189] (1969) 119 CLR 369-371.

[190] (1969) 119 CLR 369-371 (emphasis in bold italics added).

[191] (1969) 119 CLR 371-373 (emphasis in italics added).

[192] Applicant's outline, at [12]-[15] (emphasis in original).

[193] Applicant's note on legislative history, Appendix 9, 144 at 159 (emphasis in bold italics added).

[194] Applicant's note on the legislative history, Appendix 7, 95 at 105-106.

[195] Transcript 25.03.2025, at 27 (Mr Grace).

[196] Transcript 25.03.2025, at 27 (Mr Grace).

[197] Transcript 25.03.2025, at 27 (Mr Grace).

[198] Tribunal's Reasons, [74], [80] and [128(a)].

[199] Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] NSWCA 285; (2020) 104 NSWLR 232 (Benidorm), [82] (Leeming JA), [121] (Payne JA).

[200] Applicant's s 82 submissions, Part I, at [35]. See also Transcript 25.03.2025, at 47-48 (Mr Grace).

[201] Transcript 25.03.2025, at 51 (Mr Grace).

[202] Applicant's reply submissions (29.11.2024), at [5].

[203] Section 72 deals with 'What are land holdings?' and s 72(2)(b) provides:

(b) is not a land holding of a company unless the interest of the company in the land is a beneficial interest.

[204] Transcript 25.03.2025, at 51 (Mr Grace).

[205] Respondent's outline of submissions (15.11.2024) at [6] citing Dura (Australia) Constructions Pty Ltd v Victorian Managed Insurance Authority (VMIA) [2012] VSC 114 at [71] (Robson J).

[206] Transcript 25.03.2025, at 53 (Ms O'Gorman SC).

[208] Transcript 25.03.2025, at 57 (Ms O'Gorman SC).

[209] Transcript 25.03.2025, at 57 (Ms O'Gorman SC).

[210] Here, the relevant property exceeded the relevant limit of $1million, which is a precondition to the WCT Unit Trust being a landholder under the definition in s 71(1).

[211] Transcript 25.03.2025, at 59 (Ms O'Gorman SC).

[212] Emphasis in bold italics added.

[213] Transcript 25.03.2025, at 60 (Ms O'Gorman SC).

[214] Transcript 25.03.2025, at 60 (Ms O'Gorman SC).

[215] Transcript 25.03.2025, at 60 (Ms O'Gorman SC).

[216] Transcript 25.03.2025, at 64 (Ms O'Gorman SC).

[217] Transcript 25.03.2025, at 77 (Ms O'Gorman SC).

[218] Transcript 25.03.2025, at 66 (Ms O'Gorman SC).

[219] Transcript 25.03.2025, at 67 (Ms O'Gorman SC).

[220] Transcript 25.03.2025, at 67, 68 (Ms O'Gorman SC) (emphasis in bold italics added).

[221] Paragraph [7(d)] states the Tribunal's determination that:

(d) it is appropriate that the relevant acquisition which is deemed to have occurred under section 82 be reduced to reflect the pre-existing economic interest held by Mr Tao, namely to 85%.

[222] Transcript 25.03.2025, at 70-71, 72, 73, 74 (Ms O'Gorman SC) (emphasis in bold italics added).

[223] Transcript 25.03.2025, at 80 (Ms O'Gorman SC).

[224] Transcript 25.03.2025, at 80 (Ms O'Gorman SC).

[225] Transcript 25.03.2025, at 81 (Ms O'Gorman SC).

[226] [2012] VSC 114, at [71] (Robson J).

[227] [2019] VSC 439, at [61]-[65] (Ginnane J).

[228] Transcript 25.03.2025, at 83 (Ms O'Gorman SC).

[229] Transcript 25.03.2025, at 83-84 (Ms O'Gorman SC).

[230] Transcript (Tribunal) 18.06.2024, at CB1283-1284 (Mr McNaught) (emphasis in bold italics added).

[231] Transcript (Tribunal) 18.06.2024, at CB1293 (Mr McNaught) (emphasis in bold italics added).

[232] Transcript (Tribunal) 19.06.2024, at CB1368 (Mr McNaught) (emphasis in bold italics added).

[233] Transcript (Tribunal) 19.06.2024, at CB1375-1376 (Mr McNaught).

[234] Mr Tao held 6 out of its 10 shares and stood to receive 60% of any distributions Amber received from the WCT Unit Trust.

[235] [2005] VSC 442 at [59] (emphasis in bold italics added).

[236] [2024] VSC 232 [17].

[237] Transcript 25.03.2025, at 83-84 (Ms O'Gorman SC).

[238] That is 'Did Mr Tao obtain control of the WCT Unit Trust when he acquired the shares in and became the sole director of 66WR Pty Ltd?'.

[239] Transcript 25.03.2025, at 88 (Ms O'Gorman SC).

[240] Transcript 25.03.2025, at 88 (Ms O'Gorman SC).

[241] Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397 per Dixon CJ; [1955] HCA 27, quoted with approval in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ (emphasis in bold italics added).

[242] Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638].

[243] [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ).

[244] Notice of Appeal, Question of law #4, CB 0005.

[245] Notice of Appeal, Question of law #4, CB 0005.

[246] Applicant's outline (18.10.2024), at [17].

[249] See Taylor v Public Service Board (NSW) [1976] HCA 36; (1976) 137 CLR 208 at 213, per Barwick CJ.

[250] Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 320, per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617, per Lord Scarman, "in the context of the legislation read as a whole".

[251] [1955] HCA 27; (1955) 92 CLR 390 at 397.

[252] Toronto Suburban Railway Co v Toronto Corporation [I915] AC 590 at 597; Minister for Lands (NSW) v Jeremias [1917] HCA 41; (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 312, per Gibbs CJ; at 315, per Mason J; at 321, per Deane J.

[253] Applicant's outline (18.10.2024), at [19] (emphasis in bold italics added).

[254] Transcript 25.03.2025, at 89 (Ms O'Gorman SC).

[255] Transcript 25.03.2025, at 89 (Ms O'Gorman SC).

[256] Transcript 25.03.2025, at 90 (Ms O'Gorman SC).

[257] Transcript 25.03.2025, at 90 (Ms O'Gorman SC).

[258] Transcript 25.03.2025, at 96 (Ms O'Gorman SC).

[259] Transcript 25.03.2025, at 106 (Ms O'Gorman SC).

[260] Transcript 25.03.2025, at 96 (Ms O'Gorman SC).

[261] Transcript 25.03.2025, at 96 (Ms O'Gorman SC).

[262] Transcript 25.03.2025, at 103 (Ms O'Gorman SC).

[263] Transcript 25.03.2025, at 103 (Ms O'Gorman SC).

[264] Transcript 25.03.2025, at 109 (Ms O'Gorman SC).

[265] Transcript 25.03.2025, at 109 (Ms O'Gorman SC).

[266] Tribunal's Reasons, at [7(d)].

[267] Applicant's outline (18.10.2024), at [19] (emphasis in bold italics added):

1. ... the Tribunal had to consider the intended purpose of the provision (s 82) in the context of its surrounding provisions (the landholder provisions, which impose a tax on significant changes of beneficial ownership of land held by certain entities).

[269] [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ).

[270] Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397 per Dixon CJ; [1955] HCA 27, quoted with approval in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ.

[271] Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638].

[272] Alcan [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ).

[273] (2025) 99 ALJR 519; [2025] HCA 6.

[274] [2011] VCAT 593; (2011) 84 ATR 725 at [88](g).

[275] [2010] VCAT 1057 at [93].

An acquisition by a person of an interest in a landholder is an exempt acquisition if the Commissioner so determines, being satisfied that the application of this Part to the acquisition in the particular case would not be just and reasonable.

[277] [2010] VSC 464; (2010) 80 ATR 630, at 643 [29].

[278] Victoria, Parliamentary Debates, Legislative Assembly, 13 May 2004, 1314 (John Brumby).

[279] [2010] VSC 608; (2010) 81 ATR 682, [18]-[19], [26].

[280] FCT v Swift [1989] FCA 413; (1989) 20 ATR 1434 at 1448; 89 ATC 5101 at 5113-5114 per French J.

[281] Challenger Listed Investments Ltd v Commissioner of State Revenue [2010] VSC 464; (2010) 2010 ATC 20-217; 80 ATR 630.

[282] Giris Pty Ltd v FCT [1969] HCA 5; (1969) 119 CLR 365; 1 ATR 3; 43 ALJR 99; 69 ATC 4015; [1969] HCA 5; [1969] ALR 369; DCT v Truhold Benefit Pty Ltd [1985] HCA 36; (1985) 158 CLR 678; 16 ATR 466; 59 ALJR 507; 85 ATC 4298; [1985] HCA 36; 59 ALR 431; FCT v Swift [1989] FCA 413; (1989) 20 ATR 1434; 89 ATC 5101.

[283] From 1 July 2012, the landrich provisions in Chapter 3 of the Act (including s 85(2)) were substituted with the landholder provisions: see s 5 of the Duties Amendment (Landholder) Act 2012 (Vic). The substitution did not replicate the former exemption.

[284] Respondent's outline of submissions (15.11.2024), at [32].

[286] [2024] VSCA 175 (Kennedy, Macaulay and Lyons JJA), at [60].

[288] Respondent's outline of submissions (15.11.2024), at [31].

[289] [i.e. only where there is no relevant acquisition of a direct (s 78) or synthetic (s 81) interest]

[290] Maleckas v Secretary, Department of Justice (2011) 34 VR 23; [2011] VSC 227 at [82] (Kyrou J).

[291] Applicant's Outline of Submissions dated 18 October 2024 at [21].

[292] Applicant's Outline of Submissions dated 18 October 2024 at [21] (footnotes omitted).

[293] Respondent's outline of submissions (15.11.2024), at [32].

[297] This ground reflects Question of Law 5 (and Ground 5) in the Notice of Appeal.

[298] Applicant's outline (18.10.2024), at [26].

(1) For the purposes of this Part, a land holding is an interest in land other than the estate or interest of a mortgagee, chargee or other secured creditor or a profit à prendre.