Aussiegolfa Pty Ltd (Trustee) v Commissioner of Taxation

Background facts 18 The following statement of the background facts is substantially based on the reasons of the primary judge in the Federal Court proceeding: Aussiegolfa Pty Ltd (Trustee) v Commissioner of Taxation [2017] FCA 1525 (the Federal Court Reasons). In addition, I have drawn on some of the documents in the Appeal Book.

The Benson Fund 19 On 20 November 2011, the Benson Fund was established as a self-managed superannuation fund within the meaning of s 17A(2) of the SIS Act. Mr Benson was the sole member of the Benson Fund. Since January 2015, he has been employed as the Victorian State Manager of DomaCom Australia Ltd (DomaCom). 20 On 15 February 2013, the Commissioner issued a notice under s 40 of the SIS Act to the Benson Fund (this being one of the requirements to be a complying superannuation fund - see SIS Act, s 45). Apart from the issues raised by these proceedings, there is no dispute that the Benson Fund was a complying superannuation fund.

The DomaCom Fund 21 The DomaCom Fund is governed by a Constitution (the Constitution). The Appeal Book contains copies of the Constitution with various dates, including 27 November 2013 and 13 December 2013. As discussed below, the version dated 13 December 2013 was in effect in 2015. The Constitution was declared by Perpetual Trust Services Ltd as responsible entity (the Responsible Entity). The DomaCom Fund is a registered managed investment scheme under Ch 5C of the Corporations Act 2001 (Cth). 22 The investment manager of the DomaCom Fund is DomaCom. DomaCom holds an Australian Financial Services Licence. 23 The custodian of the DomaCom Fund is Perpetual Corporate Trust Ltd (the Custodian).

February to July 2015 24 In February 2015, Mr Benson and his mother, brother and sister resolved at a family meeting to invest in residential property in student accommodation and other relatively low cost, relatively high return opportunities. Mr Benson's mother is a self-funded retiree living in Melbourne. Mr Benson's brother and sister set up their own self-managed superannuation funds shortly after the February meeting. 25 On 4 March 2015, the Responsible Entity issued a product disclosure statement. This document is referred to in Aussiegolfa's application for units. It is not necessary to refer to this document in detail. 26 In March 2015, Mr Benson and members of his family inspected the Burwood Property, being a studio apartment in a student accommodation complex. They decided to invest in the property through the DomaCom Fund by Mr Benson's mother acquiring 50 per cent of the units in a sub-fund of the DomaCom Fund, and Mr Benson and his sister (through their respective superannuation funds) each agreeing to purchase 25 per cent of the units in the sub-fund. Mr Benson's brother decided not to participate in the acquisition of any units. 27 On 31 March 2015, Aussiegolfa completed and forwarded an application to invest in the DomaCom Fund. The application was for a minimum investment of $20,000 to establish an account in the DomaCom Fund and acknowledged that Mr Benson had received a product disclosure statement and that, if the application for Aussiegolfa to become an investor were accepted, the investment would be "subject to the terms and conditions of the Constitution and Product Disclosure Statement", as amended from time to time. 28 On or about 2 April 2015, Aussiegolfa paid $20,000 and, shortly thereafter, Aussiegolfa paid an additional $8,080, for the acquisition of 28,080 $1 units in a sub-fund. The $28,080 paid by Aussiegolfa was held by the Responsible Entity in a cash pool (the Cash Pool) pending acquisition by the Responsible Entity of the Burwood Property. 29 On 24 June 2015, the Responsible Entity issued a product disclosure statement (the June 2015 Product Disclosure Statement). Extracts from this document are set out below. 30 On 17 July 2015, the Responsible Entity issued a supplementary product disclosure statement, dealing specifically with a proposed sub-fund that planned to invest in the Burwood Property (the Supplementary Product Disclosure Statement). Extracts from this document are set out below. 31 In July 2015, DomaCom completed due diligence, contract review and valuation procedures in respect of the Burwood Property.

The acquisition of the units - July and August 2015 32 On 21 July 2015, the Custodian entered into a contract to purchase the Burwood Property for $104,000. The settlement date was 18 August 2015. 33 Upon entry into the contract to purchase the Burwood Property and payment of the initial deposit, the Burwood Sub-Fund (being a sub-fund numbered DMC0114AU) was established within the DomaCom Fund, and a class of units unique to the sub-fund was created. 34 Ross Laidlaw, the director and Chief Operating Officer of DomaCom, gave evidence below that a new sub-fund was created with the issue of a new and unique class of units as soon as a binding contract to purchase the property was entered into and the initial deposit paid. The Responsible Entity did not pass a resolution to amend the Constitution to create the new units; the new class of units was created by the DomaCom system. An Asia Pacific Investment Register or APIR code was then allocated to the units. APIR codes are standard identifiers for products in the financial services industry. 35 On 23 July 2015 and 17 August 2015, funds held for Aussiegolfa in the Cash Pool were applied towards the acquisition of units in the Burwood Sub-Fund. DomaCom provided various statements in relation to the Benson Fund, including a periodic statement and transaction history for the period from 1 July 2015 to 30 June 2016. That statement showed the creation of units on 23 July 2015 and 17 August 2015. Aussiegolfa acquired in total 25 per cent of the units in the Burwood Sub-Fund. Mr Benson's mother acquired 50 per cent of the units in the Burwood Sub-Fund, and the superannuation fund of Mr Benson's sister and her husband acquired 25 per cent. 36 The application that had been made on 31 March 2015 appears to have been taken as sufficient for the creation of the Burwood Sub-Fund and for the allocation of units to Aussiegolfa pursuant to the Constitution. 37 On 17 August 2015, the Custodian entered into an exclusive leasing and managing authority with Student Housing Australia for the leasing of the Burwood Property. 38 On 18 August 2015, settlement of the purchase of the Burwood Property took place.

August 2015 to July 2017 39 The first two student tenants for the Burwood Property found by Student Housing Australia were persons unknown, and unrelated, to Mr Benson or to the Benson Fund. The first tenant agreed to pay a monthly rental of $869 for the premises from 8 January 2016 to 23 January 2017. The second tenant also agreed to pay a monthly rent of $869 for the premises for the period from 20 February 2017 until 15 February 2018. 40 On 3 April 2017, Mr Benson (as DomaCom's Victorian State Manager) informed DomaCom's client services manager in an email that Mr Benson and some family members were using the Burwood Property to test "the related party use of residential property within" self-managed superannuation funds. 41 On 11 April 2017, Mr Benson submitted a completed application form to Student Housing Australia on behalf of his daughter to lease the Burwood Property from 20 February 2018 at a monthly rent of $869. Mr Benson was identified in the application as the parental guarantor guaranteeing his daughter's obligations under the proposed lease. 42 Also on 11 April 2017, Student Housing Australia wrote to Ms Benson congratulating her on securing the tenancy of the Burwood Property at the rent that had been proposed in the application. At about the same time, Ms Benson signed a standard form Residential Tenancy Agreement for the property providing for rental for the period 20 February 2018 until 19 February 2019 at the monthly rent of $869. 43 The primary judge found, at [8] of the Federal Court Reasons, that the selection of Ms Benson as the tenant of the Burwood Property was explained, in part, by the desire of Mr Benson and DomaCom to test the ability for residential properties held by self-managed superannuation funds to be used by related parties. 44 As at 21 April 2017, Aussiegolfa's units in the DomaCom Fund (or the Burwood Sub-Fund) represented 7.83 per cent of the assets of the Benson Fund. 45 In May 2017, Aussiegolfa commenced the Federal Court proceeding. 46 On 3 July 2017, the Commissioner made the Determination, being a determination under s 71(4) of the SIS Act that the units held by Aussiegolfa as trustee for the Benson Fund in the Burwood Sub-Fund were to be treated as an investment in a related trust of the Benson Fund. 47 I now set out the key relevant provisions of: the Constitution as it stood in 2015; the June 2015 Product Disclosure Statement; the Supplementary Product Disclosure Statement; and the Constitution as at May 2017. I refer to both the Constitution as at 2015 and the Constitution as at May 2017, as there is an issue whether the relevant version is the former or the latter or both.

The Constitution as at 2015 48 At the hearing of the appeals, both parties proceeded on the basis that the copy of the Constitution (dated 13 December 2013) at AB, Pt C, tab 89.4 represented the Constitution as it stood during 2015 (the Commissioner's outline of submissions in the Federal Court Appeal, fn 16; T9). I note that the Appeal Book (at Pt C, tab 89.5) contains a Supplemental Constitution dated 31 January 2014, which contains some amendments, but these do not appear to be material for present purposes. I note also that the primary judge stated, at [12] of the Federal Court Reasons, that the Constitution had been altered between the time of Aussiegolfa's application for units (31 March 2015) and the time when the units were acquired (July and August 2015). However, on the hearing of the appeals, neither party referred to any material changes having been made during 2015. The amended joint chronology does not refer to any such changes. 49 The only party to the Constitution was the Responsible Entity. The recital stated that the Constitution was declared by the Responsible Entity to be the constitution for a trust to be known as the DomaCom Fund. 50 The word "Assets" was defined in cl 1.1 as meaning "cash, investments, rights, income and other property of the Fund or a Class from time to time". 51 The word "Class" was defined as meaning "a class of Units as determined by the Responsible Entity under clause 3.4". It should be noted that the Constitution did not refer to sub-funds, but to classes of units. 52 The word "Fund" was defined as meaning "the trust constituted by this Constitution and known as the DomaCom Fund". 53 The expression "Relevant Class" was defined as meaning "a Class of Units". The definitions in cl 1.1 also included: Relevant Liabilities means the Liabilities referable to the Relevant Class. Where Liabilities are referable to more than one Relevant Class, then for the purposes of the definition of Relevant Liabilities, such amount of the Liabilities will be included as the Responsible Entity determines is properly referable to the Relevant Class. Relevant Scheme Assets means the Assets referable to the Relevant Class. Where an Asset is referable to more than one Relevant Class, then for the purposes of the definition of Relevant Scheme Assets, such amount of the Asset will be included as the Responsible Entity determines is properly referable to the Relevant Class. 54 "Unit" was defined as meaning "a unit in the Fund created under this Constitution". 55 Clause 2.1 stated that, as from the Commencement Date (being the date of commencement of the Fund), Perpetual Trust Services Ltd was, and had agreed to act as, the responsible entity of the Fund. 56 Clause 2.2 was in the following terms: Declaration of Trust (a) The Assets shall vest in the Responsible Entity on the Commencement Date and the Responsible Entity declares that it shall hold: (i) the money held in the Wholesale Cash Pool on trust for the Wholesale Cash Holders; and (ii) the money held in the Retail Cash Pool on trust for the Retail Cash Holders; and (iii) each Asset that is acquired on behalf of a Class of Unit Holders, on trust for Unit Holders in that Class; and (iv) any other Assets that are not held on trust pursuant to clause 2.2(a)(ii) on trust for the Members generally, in accordance with the terms of this Constitution. (b) The Responsible Entity shall clearly identify the Assets as property of the Fund and hold the Assets separately from the assets of the Responsible Entity and any other managed investment scheme to the extent required by the Corporations Act. (Emphasis added.) 57 Clause 3.1 was as follows: Interests and Units (a) The beneficial interest in the Fund is divided into: (i) interests in the Cash Pool based on each Cash Holder's proportionate interest in the Cash Pool; and (ii) Units. (b) Subject to the rights attaching to a Class of Units, each Unit confers on the Unit Holder a beneficial interest in the Assets as an entirety and does not confer an interest in a particular Asset. 58 Clause 3.4 was in the following terms: Classes (a) Subject to section 601FC(1)(d) of the Corporations Act, the Responsible Entity may create different Classes of Units in the Fund with such rights, obligations and restrictions attaching to the Units of such Classes as it determines. If the Responsible Entity so determines in relation to a particular Class, the terms of issue of those Units in that Class may: (i) eliminate, reduce or enhance any of the rights or obligations which would otherwise be carried by such Units; and (ii) provide for conversion of Units from one Class to another Class and, if the Responsible Entity so determines, change the number of Units on such a conversion. For the avoidance of doubt, each Cash Pool is a separate Class of interest in the Fund. (b) The Responsible Entity in making any determination of a variable properly referable to a Class under this Constitution must ensure that: (i) any variable which relates only to a particular Class, and does not relate to other Classes, is solely referrable to the Class to which it relates; and (ii) any variable that relates to more than one Class is apportioned between those Classes either: (A) in the same proportions as the aggregate value of Units on issue in each Class as at the most recent Valuation Time bears to the aggregate value of Units in all Classes to which the variable relates on issue at the most recent Valuation Time; or (B) if the methodology referred to in clause 3.4(b)(ii)(A) would result in the Responsible Entity breaching its obligation to treat Unit Holders who hold different Classes fairly in contravention of section 601FC(1)(d) of the Corporations Act, then the Responsible Entity must apportion the relevant variable that relates to more than one Class in a manner that treats Unit Holders in different Classes fairly. (c) Notwithstanding the generality of this clause 3, the Responsible Entity must only issue Classes of Units in the following circumstances: (i) the Relevant Scheme Assets for each Class comprise a particular Property and all proceeds and income received by the Responsible Entity in respect of, or relating to, that Property; (ii) the Relevant Liabilities are attributed to a Class such that they can only be met from Relevant Scheme Assets; (iii) Relevant Scheme Assets for a Class are not encumbered in relation to Relevant Liabilities of another Class; and (iv) the Responsible Entity is not entitled to be indemnified out of the Relevant Scheme Assets of a Class in relation to Relevant Liabilities of another Class. (d) Within 7 days of the first issue of Units in a Class, the Responsible Entity must notify ASIC of the establishment of that Class. (Emphasis added.) In the present case, although there is no document to this effect, it is clear that, on or about 23 July 2015, the Responsible Entity created a class of units associated with the Burwood Property, pursuant to cl 3.4(a). These units were referred to in the contemporaneous documents as units in the Burwood Sub-Fund. One of the issues discussed during the hearing of the appeals was whether the Responsible Entity also made a determination, pursuant to cl 3.4(a), as to the "rights, obligations and restrictions" attaching to this class of units. This issue is discussed later in these reasons. 59 Clause 3.6 was as follows: Rights attaching to Units (a) A Unit Holder holds a Unit subject to the rights and obligations attaching to that Unit. (b) Each Unit Holder agrees not to: (i) interfere with or question the rights, powers, authority, discretion or obligations of the Responsible Entity under this Constitution; (ii) exercise any right, power or privilege in respect of an Asset; (iii) lodge a caveat in respect of any Asset; or (iv) require that any Asset be transferred to the Unit Holder or any other person. (c) A Unit Holder may not create any mortgage, charge, pledge, lien, encumbrance, arrangement for the retention of title or any other Security Interest over a Unit without the consent of the Responsible Entity. 60 Clause 4 dealt with the application procedure. Clause 4.1 provided that the Responsible Entity could at any time offer: (a) a Cash Holder the right to deposit money in the Cash Pool in anticipation of subscribing for units; and (b) units for subscription or sale, and could invite persons to make offers to apply for or buy units. Clause 4.3 relevantly provided that each application for an interest in the Cash Pool or units would, unless the Responsible Entity approved otherwise, "conform with the form and content requirements of any relevant disclosure document". 61 Clause 5 dealt with the application price for units in a class. In relation to a "subsequent issue" of units, that is, an issue after the initial issue, there was a formula for the issue price. It was provided that the references to "Net Asset Value", "Transaction Charge" and the "number of Units on issue" were variables to be determined by the Responsible Entity in respect of the relevant class in accordance with cl 3.4. 62 Clause 8 dealt with the withdrawal price of units. A formula was set out for calculating the withdrawal price. It was provided that, for the purposes of the formula, where there was more than one class on issue, "Net Asset Value", "Transaction Charge" and the "number of Units on issue" were variables to be determined by the Responsible Entity in respect of the relevant class in accordance with cl 3.4. 63 Clause 11 dealt with valuation of assets. Clause 11.2 provided that the Responsible Entity could determine the "Net Asset Value" of a class at any time. It also provided that the Responsible Entity was required to determine the "Net Asset Value" of a class in certain circumstances, as there set out. 64 Clause 12 dealt with income and distributions. Clause 12.4 provided that the Responsible Entity was required to determine the "Net Income" of each class for each financial year. Clause 12.5 dealt with the method of calculation of the "Net Income" for each class to the extent that no determination was made under cl 12.4. Clause 12.6 provided that, "[s]ubject to the rights, restrictions and obligations attaching to any particular Unit or Class", unit holders were entitled in the proportions set out in cl 12.7 to the "Net Income" for the financial year. Clause 12.7(c) was in the following terms: Subject to the rights, obligations and restrictions attaching to any particular Unit or a Class, each Unit Holder's Distribution Entitlement for a Financial Year shall be determined in accordance with the following formula: A x B C Where: A is the amount determined by the Responsible Entity in accordance with clauses 12.4 and 12.5 to be distributable for each Class for the relevant Financial Year; B is the aggregate of the number of Units of each Class held by the Unit Holder at 5.00 p.m. on the Distribution Calculation Date; and C is the aggregate of the total number of Units of each Class on issue at 5.00 p.m. on the Distribution Calculation Date. Two observations may be made about this clause. The first is that the distribution entitlement was expressed to be "[s]ubject to the rights, obligations and restrictions attaching to any particular Unit or a Class". The second is that, if the formula operated, the net income distributable to a unit holder was derived from the amount determined to be distributable for each class. 65 Clause 12.11 was in the following terms: Capital distributions The Responsible Entity may, at any time, distribute the capital referable to a particular Class to the Unit Holders. Subject to the rights, obligations and restrictions attaching to any particular Unit or Class, a Unit Holder is entitled to that proportion of the capital to be distributed as is equal to the number of Units of a Class held by that Unit Holder on a date determined by the Responsible Entity divided by the number of Units of the same Class on issue on that date. A distribution under this clause may be in cash or of Assets. 66 Clause 12.13 was as follows: Categories and source of income The Responsible Entity may keep separate accounts for each Class of different categories or sources of income, or deductions or credits for tax purposes, and may allocate income, deductions or credits from a particular category or source to particular Unit Holders of a particular Class. The Responsible Entity must allocate income and expenses referable to a particular Class to that Class and must allocate all other income and expenses on a fair and reasonable basis across all Classes. 67 Clause 12.19 (classes) provided that, for the avoidance of doubt, the rights of a unit holder under cl 12 were "subject to the rights, restrictions and obligations attaching to any particular Unit or the Class". 68 Clause 13.2 set out specific powers of the Responsible Entity. These included the power to "create different Classes with different rights and entitlements". 69 Clause 15 dealt with remuneration and expenses of the Responsible Entity. Clause 15.1 provided that, subject to the Corporations Act and cl 15.9, the Responsible Entity was entitled to deduct from the "Assets of the Fund", a management fee determined by the Responsible Entity and notified to unit holders up to certain maximum percentage amounts. Clause 15.2(a) provided that, subject to cl 15.1, the Responsible Entity could determine different fees for different classes. Clause 15.2(b) provided: If the Responsible Entity determines that different Management Fees are payable with respect to different Classes, then for the purpose of calculating Management Fees for a Class pursuant to clause 15.1, the Responsible Entity may allocate Assets and Liabilities of the Fund to specific Classes and the term "Gross Asset Value" in clause 15.1, is taken to mean the "Gross Asset Value" of Assets attributed to the specific Class. Management Fees for different Classes will be charged against the Assets of that Class. 70 Clause 15.9 was as follows: Class Expenses Subject to the Corporations Act, where more than one Class is on issue and the Responsible Entity may make a determination that an Expense, or part of an Expense, is to be a Class Expense in relation to a Class, but if no determination is made under this clause, then: (a) in respect of fees of the Responsible Entity which are charged to a particular Class, the GST on those fees and the corresponding reduced input credit or input credit (as the case may be) that arises in connection with a fee payable or supply in respect of a Class, is to be referable to that Class; and (b) any other Expenses under this clause 15 is to be referable to all Units on an equal basis. 71 Clause 18.1 was as follows: Responsible Entity's indemnity In addition to any indemnity available to the Responsible Entity under the law or this Constitution, but subject to the Corporations Act, the Responsible Entity has a right to be fully indemnified out of the Assets, in respect of all Expenses, Liabilities, costs and any other matters in connection with the Fund and against all actions, proceedings, costs, claims and demands brought against the Responsible Entity in its capacity as responsible entity of the Fund in respect of any matter or thing done or omitted (Indemnified Matter) except: (a) in the case of the Responsible Entity's own fraud, negligence or wilful default; and (b) in respect of the overhead expenses of the Responsible Entity. 72 Under cl 18.3, the Responsible Entity could pay out of "the Assets" any amount for which it would be entitled to be indemnified under cl 18.1. 73 Clause 21.2 provided that, subject to the Corporations Act and any other approval required by law, the Responsible Entity could by deed replace or amend the Constitution. 74 Clause 23 dealt with termination. Under cl 23(a), the Fund terminated on the earlier of certain specified events, one of which was the day 80 years less one day from the commencement of the Fund. Clause 23(b) was as follows: A Class of Units terminates on the earlier of: (i) the date determined by the Responsible Entity as the date on which the Class of Units is to be terminated, being a date at least 30 days after the date of the provision of notice of such termination to all Unit Holders in that Class; (ii) termination of the Fund under clause 23(a); (iii) the date determined by a resolution of Unit Holders of that Class passed by at least 75% of all Unit Holders in that Class; (iv) subject to clause 23(c), the term set out in the Initial Disclosure Document for the Class (Initial Term) (which must not exceed 15 years from the date of the first issue of Units in that Class), unless the term is extended by an ordinary resolution of Unit Holders of that Class (present in person or by proxy); (v) when the Unit Holders of a Class: (A) approve the change of the trustee of a Class from the Responsible Entity to another entity; or (B) pass an extraordinary resolution (as defined in the Corporations Act) to change the custodian; (vi) the date determined by the Responsible Entity as the date on which the Class of Units is to be terminated, being a date at least 30 days after the date of the provision of notice of such termination to all Unit Holders in that Class. 75 Clause 24 dealt with termination and winding up. Clause 24.1 was as follows: Realisation of Assets (a) On the termination and winding up of the Fund, the Responsible Entity shall: (i) not issue further interests in the Cash Pool and will pay to the Cash Holders the balance of the Cash Holders' beneficial interest in the Cash Pool (after payment of all Liabilities and expenses attributable to the Cash Holders); (ii) not issue or redeem Units in the Fund; and (iii) sell and realise the Assets and, subject to clauses 24.2(c), 24.3 and 24.5, distribute to the Unit Holders the amount calculated in accordance with clause 24.2(a). (b) On the termination and winding up of a Class of Units, the Responsible Entity shall: (i) not issue or redeem Units in that Class; and (ii) sell and realise the Asset held for that Class and, subject to clauses 24.2(c), 24.3 and 24.5, distribute to the Unit Holders the amount calculated in accordance with clause 24.2(a). 76 Clause 24.2(a) was as follows: Subject to the terms of issue of any Unit or Class (as set out in this Constitution), the net proceeds of realisation, after making allowance for all Liabilities (actual and anticipated) of the Fund (in the case of the termination of the fund) or a Class (in the case of a termination of a Class of Units) and meeting the expenses (including anticipated expenses) of the termination, shall be distributed pro rata by the Responsible Entity to Unit Holders in the relevant Class according to the number of Units they hold less the value of any Assets transferred to or to be transferred to that Unit Holder under clause 24.2(b). The Responsible Entity may distribute proceeds of realisation in instalments. 77 Clause 29 provided that the "Constitution binds the Responsible Entity and each present and future Cash Holder or Unit Holder … in accordance with its terms (as amended from time to time) as if each of them had been a party to this Constitution". 78 Clause 30 provided that, except as required by the Corporations Act, all obligations of the Responsible Entity that could otherwise be implied or imposed by law or equity were expressly excluded to the extent permitted by law.

The June 2015 Product Disclosure Statement 79 The June 2015 Product Disclosure Statement was issued on 24 June 2015. Under the heading "Important Notice & Disclaimer" on the first page, it stated that the document related to an offer of interests in the DomaCom Fund consisting of interests in the Cash Pool and units in sub-funds to be established in the DomaCom Fund. It stated that a supplementary product disclosure statement would be issued with details in respect of each underlying property. Further down that page, it was stated that: None of the Responsible Entity, DomaCom or any of their directors, advisers, agents or associates in any way guarantee the performance of the DomaCom Fund, any return of capital or any particular rate of return on an investment in the DomaCom Fund and, to the maximum extent permitted by law, they each deny liability for any loss or damage suffered by any person investing in the DomaCom Fund. Investors should note that the DomaCom Fund includes a number of Sub-Funds. The assets of one Sub-Fund are not available to satisfy liabilities in another Sub-Fund. (Emphasis added.) 80 Section 2 of the document was headed "Overview of the DomaCom Fund". This set out a series of questions and answers. Alongside the question, "What is the DomaCom Fund?" it was stated: The DomaCom Fund is designed to simulate investment in direct property. The DomaCom Fund facilitates investment in a fractional interest in a property, being the Underlying Property held by a Sub-Fund. DomaCom will place the details for each property on the DomaCom Website and an investor that wishes to invest in that property will be issued units in a Sub-Fund which will acquire and hold the Underlying Property on behalf of the Unit Holders, provided sufficient capital is raised to purchase that Underlying Property. In order to invest in a Sub-Fund an Investor must first open an account in the Cash Pool by depositing a minimum of $2,500. Once an Investor has chosen the property in which they wish to invest, they can participate in a Book Build to indicate their interest in investing in the identified property. If sufficient interest is generated and if DomaCom is subsequently successful in purchasing the property, a Sub-Fund is created and the Investor's funds are transferred from the Cash Pool to the Sub-Fund to acquire and hold the Underlying Property. 81 In response to the question, "How does investing in a Sub-Fund differ from other forms of property investment?", it was stated: Investing in a Sub-Fund allows an Investor to: • choose the Underlying Property in which they seek to invest; and • acquire a beneficial interest in the Underlying Property held by the Sub-Fund. (Emphasis added.) 82 In section 4, which concerned management of the DomaCom Fund, it was stated that the legal relationship between an investor and the Responsible Entity was subject to "the terms of this PDS (including any relevant Supplementary PDS), the Application Form and the Constitution, as well as applicable laws including but not limited to the common law, trust law and relevant legislation". 83 Section 6 was headed "What can I expect as a Unit Holder in a Sub-Fund?". It was stated that the product disclosure statement provided "detailed information on the operation of the DomaCom Fund, the risks of investing and an Investor's rights and obligations as an Investor in the DomaCom Fund". In response to the question, "Is an Investor in a Sub-Fund a direct investor in the Underlying Property?", it was stated in part as follows: No. Even though an investment in a Sub-Fund simulates an investment directly in the Underlying Property, it is important to note that it is a simulation only and investors have not invested directly in an Underlying Property. Investors acquire a beneficial interest in an Underlying Property by holding Units in a Sub-Fund that holds the Underlying Property which entitles investors to receive a share of the Net Income earned in relation to the Underlying Property and, ultimately, the proceeds of sale of the Underlying Property on termination of the Sub-Fund. This is similar to, but not the same as, a direct investment in a share of the Underlying Property. (Emphasis added.) 84 It was also stated, in section 6.4, that the "DomaCom Fund will distribute 100% of the Net Income it receives in respect of an Underlying Property as distributions to Sub-Fund Unit Holders". In section 6.7, it was stated that each "Underlying Property will be held for the ultimate benefit of the Unit Holders in the relevant Sub-Fund".

The Supplementary Product Disclosure Statement 85 The Supplementary Product Disclosure Statement was issued on 17 July 2015. On the front page, it stated that investors in the DomaCom Fund were invited to participate in a proposed sub-fund that planned to invest in the Burwood Property. The first page of the document stated in part as follows: None of the Responsible Entity, DomaCom Ltd (DomaCom) or any of their directors, advisers, agents or associates in any way guarantee the performance of the Sub-Fund, any return of capital or any particular rate of return on an investment in the Sub-Fund and, to the maximum extent permitted by law, they each deny liability for any loss or damage suffered by any person investing in the Sub-Fund. Investors should note that the DomaCom Fund consists of a number of Sub-Funds. Each Sub-Fund is a separate trust and the assets of one Sub-Fund are not available to satisfy liabilities in another Sub-Fund. This SPDS sets out information regarding the [Burwood Property] Sub-Fund, a proposed Sub-Fund of the DomaCom Fund. The proposed Sub-Fund will only invest in a single real estate asset (referred to in this SPDS as the Underlying Property). If the capital raising program for the Underlying Property is unsuccessful, all of the Investors with an Active Bid do not accept the offer under this SPDS or the DomaCom Fund fails to purchase the Underlying Property, the Sub-Fund will not be created and an Investor's Quarantined Funds will be released after expenses are deducted. An Investor has the opportunity to elect to participate in this proposed Sub-Fund and (if the Sub-Fund is created) obtain exposure only to the Underlying Property described in this SPDS. An investment in this Sub-Fund will not provide exposure to any other real estate investments in the DomaCom Fund. (Emphasis in italics added.)

The Constitution as at May 2017 86 It is convenient now to refer to the Constitution as it stood as at May 2017. This document was annexure "RAL-1" to Mr Laidlaw's affidavit of 11 May 2017. A copy of the document is at AB, Pt C, tab 90.5. The document is a consolidated version of the Constitution, incorporating various amendments that had been made over time to the Constitution. 87 The definition of "Assets" in cl 1.1 of the Constitution had been amended from the 2015 version of the Constitution. The definition as at May 2017 provided that Assets meant "cash, investments, rights, income and other property of the Fund" - the words "or a Class from time to time" had been omitted. 88 The definitions of "Class", "Fund", "Relevant Class", "Relevant Liabilities", "Relevant Scheme Assets" and "Unit" were in substantially the same terms. 89 Clause 2.1 was in substantially the same terms. Clause 2.2, however, was in different terms. The clause as at May 2017 was as follows: Declaration of Trust (a) The Assets shall vest in the Responsible Entity on the Commencement Date and the Responsible Entity declares that it shall hold the Assets on Trust for the Members in accordance with the terms of this Constitution. (b) The Responsible Entity shall clearly identify the Assets as property of the Fund and hold the Assets separately from the assets of the Responsible Entity and any other managed investment scheme to the extent required by the Corporations Act. The clause no longer stated that the Responsible Entity declared that it held "each Asset that is acquired on behalf of a Class of Unit Holders, on trust for Unit Holders in that Class". 90 Clause 3.1 of the Constitution as at 2015 (dealing with interests and units) was now numbered cl 4.1. It was in substantially the same terms. 91 The subject matter of cl 3.4 of the Constitution as at 2015 was now dealt with, in slightly different terms, in cl 4.4. Clause 4.4 of the Constitution as at May 2017 was in the following terms: Classes (a) Subject to this Constitution and the Corporations Act, the Responsible Entity may create different Classes of Units in the Fund. If the Responsible Entity so determines in relation to a particular Class, the terms of issue of those Units in that Class may: (i) have different rights, obligations and restrictions; and (ii) provide for conversion of Units from one Class to another Class and, if the Responsible Entity so determines, change the number of Units on such a conversion. For the avoidance of doubt, each Cash Pool is a separate Class of interest in the Fund. (b) The Responsible Entity in making any determination of a variable properly referable to a Class under this Constitution must ensure that: (i) any variable which relates only to a particular Class, and does not relate to other Classes, is solely referrable to the Class to which it relates; and (ii) any variable that relates to more than one Class is apportioned between those Classes either: (A) in the same proportions as the aggregate value of Units on issue in each Class as at the most recent Valuation Time bears to the aggregate value of Units in all Classes to which the variable relates on issue at the most recent Valuation Time; or (B) if the methodology referred to in clause 4.4(b)(ii)(A) would result in the Responsible Entity breaching its obligation to treat Unit Holders who hold different Classes fairly in contravention of section 601FC((1)(d) of the Corporations Act, then the Responsible Entity must apportion the relevant variable that relates to more than one Class in a manner that treats Unit Holders in different Classes fairly. (c) Notwithstanding the generality of this clause 4, the Responsible Entity must only issue Classes of Units in the following circumstances: (i) the Relevant Scheme Assets for each Class comprise specific Assets and all proceeds and income received by the Responsible Entity in respect of, or relating to, those Assets; (ii) the Relevant Liabilities are attributed to a Class such that they can only be met from Relevant Scheme Assets; (iii) Relevant Scheme Assets for a Class are not encumbered in relation to Relevant Liabilities of another Class; and (iv) the Responsible Entity is not entitled to be indemnified out of the Relevant Scheme Assets of a Class in relation to Relevant Liabilities of another Class. (d) Within 7 days of the first issue of Units in a Class, the Responsible Entity must notify ASIC of the establishment of that Class. (Emphasis added.) It may be observed that cl 4.4(c) was very similar to cl 3.4(c) of the Constitution as at 2015. 92 Clause 3.6 of the Constitution as at 2015 (rights attaching to units) was now numbered 4.6. It was in substantially the same terms. 93 Clause 4.12 of the Constitution as at May 2017, which did not have an equivalent in the Constitution as at 2015, stated as follows: For the avoidance of doubt, the Assets vested in the Responsible Entity under this Constitution give rise to a single trust, and notwithstanding any other clause in this Constitution including clauses 2.2, 4.1 and 24, no Unit or Class of Units gives rise to a distinct trust. 94 The clauses dealing with the application procedure (cl 4 of the Constitution as at 2015; cl 5 of the Constitution as at May 2017), the application price (cl 5 of the Constitution as at 2015; cl 6 of the Constitution as at May 2017), the withdrawal price of units (cl 8 of the Constitution as at 2015; cl 9 of the Constitution as at May 2017) and the valuation of assets (cl 11 of the Constitution as at 2015; cl 12 of the Constitution as at May 2017) were (for present purposes) in substantially the same terms in both versions of the Constitution. 95 The topic of income and distributions (cl 12 of the Constitution as at 2015) was now dealt with in cl 13. Clauses 13.1 to 13.4 were in different terms to the corresponding clauses in the Constitution as at 2015 (including cl 12.7, set out above). The distribution entitlement of a unit holder was now dealt with in cl 13.4. This clause set out a formula that was not referable to a class of units (unlike cl 12.7(c) of the earlier version). The clause was expressed to be "[s]ubject to the rights, obligations and restrictions attaching to any particular Unit or a Class". 96 The clauses dealing with capital distributions (cl 12.11 of the 2015 version; cl 13.9 of the May 2017 version) and categories and sources of income (cl 12.13 of the 2015 version; cl 13.12 of the May 2017 version) were in substantially the same terms. Clause 12.19 of the Constitution as at 2015 (classes) did not appear in the May 2017 version of the Constitution. 97 The topic of the Responsible Entity's remuneration and expenses (cl 15 of the 2015 version) was dealt with in cl 16 of the May 2017 version. Clause 16.2(a) of the May 2017 version provided that, subject to cl 16.1, the Responsible Entity could determine different fees for different classes. Clause 16.2(b) was in substantially the same terms as cl 15.2(b), which has been set out above. 98 There do not appear to be any material differences between clauses 13.2, 15.9, 18.1, 18.3, 21.2, 23(a), 23(b), 24.1, 24.2(a), 29 and 30 of the 2015 version of the Constitution and the corresponding clauses of the Constitution as at May 2017.

Key legislative provisions 99 The key legislative provisions for the purposes of the issues raised by the appeals are contained in the SIS Act. The relevant date for most of the issues is the date when the primary judge gave judgment in the Federal Court proceeding (14 December 2017). I set out the provisions as they stood at that date. There does not appear to be any material difference for present purposes between the relevant provisions as at that date and those provisions as in force during the 2015-16 and 2016-17 years of income. 100 The first two issues raised by the Federal Court Appeal concern the in-house asset rules. Part 8 of the SIS Act was headed "In-house asset rules applying to regulated superannuation funds". (The Benson Fund was a regulated superannuation fund.) The object of the Part, as set out in s 69, was to set out rules about the level of the in-house assets of regulated superannuation funds. 101 Section 84(1) of the SIS Act relevantly provided that each trustee of a regulated superannuation fund was required to take all reasonable steps to ensure that the provisions of Div 3 of Pt 8 were complied with. Division 3 included s 82, which provided as follows: (1) This section applies to a regulated superannuation fund. (2) If the market value ratio of the fund's in-house assets as at the end of: (a) the fund's 2000-2001 year of income; or (b) a later year of income; exceeds 5%, the trustee of the fund, or, if the fund has a group of individual trustees, the trustees of the fund, must prepare a written plan. (3) The plan must specify the amount (the excess amount) worked out using the formula: (4) The plan must set out the steps which the trustee proposes, or, if the fund has a group of individual trustees, the trustees propose, to take in order to ensure that: (a) one or more of the fund's in-house assets held at the end of that year of income are disposed of during the next following year of income; and (b) the value of the assets so disposed of is equal to or more than the excess amount. (5) The plan must be prepared before the end of the next following year of income. (6) Each trustee of the fund must ensure that the steps in the plan are carried out. As noted above, Aussiegolfa's units in the DomaCom Fund (or the Burwood Sub-Fund) represented 7.83 per cent of the assets of the Benson Fund. Accordingly, if the investment constituted an in-house asset, the requirements of s 82 were engaged. 102 The expression "in-house asset" was defined in s 71 of the SIS Act. Section 71(1) relevantly provided as follows: For the purposes of this Part, an in-house asset of a superannuation fund is an asset of the fund that is a loan to, or an investment in, a related party of the fund, an investment in a related trust of the fund, or an asset of the fund subject to a lease or lease arrangement between a trustee of the fund and a related party of the fund, but does not include: … (h) an investment in a widely held unit trust … (Emphasis added.) 103 The expression "related trust" was defined in s 10(1) as follows: related trust, of a superannuation fund, means a trust that a member or a standard employer-sponsor of the fund controls (within the meaning of section 70E), other than an excluded instalment trust of the fund. 104 Section 70E, referred to in that definition, relevantly provided as follows: Control of trust (2) For the purposes of sections 70B, 70C and 70D, an entity controls a trust if: (a) a group in relation to the entity has a fixed entitlement to more than 50% of the capital or income of the trust; or (b) the trustee of the trust, or a majority of the trustees of the trust, is accustomed or under an obligation (whether formal or informal), or might reasonably be expected, to act in accordance with the directions, instructions or wishes of a group in relation to the entity (whether those directions, instructions or wishes are, or might reasonably be expected to be, communicated directly or through interposed companies, partnerships or trusts); or (c) a group in relation to the entity is able to remove or appoint the trustee, or a majority of the trustees, of the trust. Group in relation to an entity (3) For the purposes of subsection (2): group, in relation to an entity, means: (a) the entity acting alone; or (b) a Part 8 associate of the entity acting alone; or (c) the entity and one or more Part 8 associates of the entity acting together; or (d) 2 or more Part 8 associates of the entity acting together. It is accepted that the Benson Fund, together with Mr Benson's mother and the superannuation fund of Mr Benson's sister and her husband, had a fixed entitlement to 100 per cent of the distributable income and capital of the Burwood Sub-Fund (Aussiegolfa's outline of submissions in the Federal Court Appeal, [12]). Mr Benson's mother and Aussiegolfa were both "Part 8 Associates" of Mr Benson within the meaning of s 70B. It follows that, if there was a distinct trust associated with the class of units known as the Burwood Sub-Fund units, then: a group in relation to Mr Benson had a fixed entitlement to more than 50 per cent of the capital or income of the trust; Mr Benson therefore controlled the trust within the meaning of s 70E(2)(a); and the trust was a "related trust" of the Benson Fund within the definition of that expression in s 10(1). 105 As set out above, one of the exceptions to the meaning of "in-house asset" was an investment in a widely held unit trust. This concept was defined in s 71(1A) as follows: For the purposes of paragraph (1)(h), a trust is a widely held unit trust if: (a) it is a unit trust in which entities have fixed entitlements to all of the income and capital of the trust; and (b) it is not a trust in which fewer than 20 entities between them have: (i) fixed entitlements to 75% or more of the income of the trust; or (ii) fixed entitlements to 75% or more of the capital of the trust. For this purpose, an entity and the Part 8 associates of the entity are taken to be a single entity. 106 A further relevant provision is s 71(4). This provided as follows: If: (a) apart from this subsection, an asset of a fund consists of a loan, an investment, or an asset subject to a lease or lease arrangement, other than an in house asset; and (b) the Regulator, by written notice given to a trustee of the fund, determines that the asset is to be treated, with effect from the day on which the notice is given, as if the asset were a loan to, an investment in, or an asset subject to a lease or lease arrangement with, a specified related party or related trust of the fund, including a person taken to be a standard employer-sponsor of the fund under section 70A; then, despite paragraphs (1)(a) to (j), the asset is taken, for the purposes of this Part, to be a loan to or an investment in the related party or related trust, or an asset subject to a lease or lease agreement between a trustee of the fund and the related party. 107 Although not relied upon by either party, I note by way of context and for completeness that s 69A, headed "Sub-funds to be treated as funds", provided as follows: A sub-fund within a regulated superannuation fund is taken for the purposes of this Part to be a regulated superannuation fund if the sub-fund satisfies the following conditions: (a) the sub-fund has separately identifiable assets and separately identifiable beneficiaries; and (b) the interest of each beneficiary of the sub-fund is determined by reference only to the conditions governing that sub-fund. 108 I turn now to the legislative provisions relating to the sole purpose test. These are relevant to the third issue raised by the Federal Court Appeal. Part 7 of the SIS Act was headed "Provisions applying only to regulated superannuation funds". The object of that Part, as set out in s 61, was to set out special rules that apply only to regulated superannuation funds. Section 62, headed "Sole purpose test", was in the following terms: (1) Each trustee of a regulated superannuation fund must ensure that the fund is maintained solely: (a) for one or more of the following purposes (the core purposes): (i) the provision of benefits for each member of the fund on or after the member's retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member was engaged (whether the member's retirement occurred before, or occurred after, the member joined the fund); (ii) the provision of benefits for each member of the fund on or after the member's attainment of an age not less than the age specified in the regulations; (iii) the provision of benefits for each member of the fund on or after whichever is the earlier of: (A) the member's retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member was engaged; or (B) the member's attainment of an age not less than the age prescribed for the purposes of subparagraph (ii); (iv) the provision of benefits in respect of each member of the fund on or after the member's death, if: (A) the death occurred before the member's retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member was engaged; and (B) the benefits are provided to the member's legal personal representative, to any or all of the member's dependants, or to both; (v) the provision of benefits in respect of each member of the fund on or after the member's death, if: (A) the death occurred before the member attained the age prescribed for the purposes of subparagraph (ii); and (B) the benefits are provided to the member's legal personal representative, to any or all of the member's dependants, or to both; or (b) for one or more of the core purposes and for one or more of the following purposes (the ancillary purposes): (i) the provision of benefits for each member of the fund on or after the termination of the member's employment with an employer who had, or any of whose associates had, at any time, contributed to the fund in relation to the member; (ii) the provision of benefits for each member of the fund on or after the member's cessation of work, if the work was for gain or reward in any business, trade, profession, vocation, calling, occupation or employment in which the member was engaged and the cessation is on account of ill-health (whether physical or mental); (iii) the provision of benefits in respect of each member of the fund on or after the member's death, if: (A) the death occurred after the member's retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member was engaged (whether the member's retirement occurred before, or occurred after, the member joined the fund); and (B) the benefits are provided to the member's legal personal representative, to any or all of the member's dependants, or to both; (iv) the provision of benefits in respect of each member of the fund on or after the member's death, if: (A) the death occurred after the member attained the age prescribed for the purposes of subparagraph (a)(ii); and (B) the benefits are provided to the member's legal personal representative, to any or all of the member's dependants, or to both; (v) the provision of such other benefits as the Regulator approves in writing. (1A) Subsection (1) does not imply that a trustee of a regulated superannuation fund is required to maintain the fund so that the same kind of benefits will be provided: (a) to each member of the fund; or (b) in respect of each member of the fund. (2) Subsection (1) is a civil penalty provision as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or of being involved in a contravention of, that subsection. (3) An approval given by the Regulator for the purposes of subsection (1) may be expressed to relate to: (a) a specified fund; or (b) a specified class of funds.

The Federal Court Reasons 109 The primary judge outlined the factual background at [1]-[18] of the Federal Court Reasons. This part of his Honour's reasons has been substantially reproduced above. 110 His Honour noted, at [12], that there was some uncertainty about which versions of the Constitution and of the product disclosure statement governed the rights in question. Noting the evidence of Mr Laidlaw to the effect that the units representing the Burwood Sub-Fund did not exist until after acquisition of the Burwood Property, which occurred between July and August 2015, the primary judge considered the relevant terms of the Constitution to be those that were operative as at July 2015 and the relevant product disclosure statement to be the June 2015 Product Disclosure Statement. However, perhaps because of the conflicting dates in the footers of the documents or because of the way the material was presented, his Honour then referred to provisions of the Constitution as it stood in May 2017 as if this was the version of the Constitution as at July 2015. 111 At [19] of the Federal Court Reasons, the primary judge referred to the relevant provisions of the SIS Act concerning in-house assets. His Honour identified, at [20], the question whether the units were an investment in a "related trust" of the Benson Fund. His Honour noted that Aussiegolfa accepted that the other holders of the units in the Burwood Sub-Fund, namely Mr Benson's mother and his sister's superannuation fund, were Part 8 associates for the purposes of s 70E of the SIS Act. Thus, his Honour said, there was a group within the meaning of s 70E in relation to Aussiegolfa. His Honour noted Aussiegolfa's submissions that the group did not have fixed entitlements to more than 50 per cent of the capital or income of the DomaCom Fund because Aussiegolfa, together with Mr Benson's mother and his sister's superannuation fund, held less than one per cent of the units in the DomaCom Fund. His Honour noted that the same was not true, however, if the relevant trust was the Burwood Sub-Fund rather than the DomaCom Fund. 112 The primary judge held, at [21], that, despite a number of provisions of the Constitution that were consistent with the DomaCom Fund being a single trust, "the Constitution created the Burwood Sub-Fund as a separate trust in respect of which a group in relation to the Benson Fund had a fixed entitlement to more than 50 per cent of the capital or income of the trust". His Honour's reasons for this conclusion, at [21]-[22], were as follows (noting that the references to clauses of the Constitution are to the Constitution as at May 2017): 21 … Clause 5.3 of the Constitution required the application by each member of the group, including Aussiegolfa, for an interest in units in conformity with the relevant disclosure documents. Clause 5.1 permitted the responsible entity to invite applications, and both the product disclosure statement dated 24 June 2015 and the supplementary product disclosure statement dated 17 July 2015 were invitations to participate in a proposed Sub-Fund with plans to invest in the Burwood property. The supplementary product disclosure statement specifically stated, as previously mentioned, that each Sub-Fund was "a separate trust" with the assets of one Sub-Fund not being available to satisfy liabilities in another Sub-Fund. Even putting that statement aside, however, the terms of the Constitution, consistently with the product disclosure statement and the supplementary product disclosure statement (which were both contemplated by the Constitution), require the conclusion that a trust was created in respect of the Burwood property held by the responsible entity through DomaCom. 22 Clause 4.1 expressly divided the "beneficial interest" in the DomaCom Fund as between interests in the Cash Pool and units (whatever else may have been intended by clause 4.12). Part of the beneficial interest in the fund was, thus, divided into units such that the responsible entity had separate fiduciary duties to the unit holders of the Burwood Sub-Fund. Clause 4.4 permitted the responsible entity to create different classes of units with distinctly different rights, obligations and restrictions and, for the avoidance of doubt, it was made clear that each Cash Pool was a separate class of interest in the fund. The units issued by the responsible entity could only be issued in respect of specific assets and all proceeds and income received by the responsible entity in respect of those assets were to be dealt with as the relevant scheme assets for the class comprising those assets. Each sub-fund related to an identifiable item of property which was held by the trustee on trust pursuant to the specific terms of the Constitution referable to that asset. The income and distributions of the fund were governed by clause 13 of the Constitution which provided that the whole of the net income in respect of each sub-fund is received by the holders of the units referrable to the sub-fund in accordance with a formula. The responsible entity may have trust obligations to other beneficiaries in respect of other property but it owes no fiduciary duties to the other beneficiaries in respect of the Burwood property which it holds for the benefit of the unit holders of the Burwood Sub-Fund. The rights and entitlements of the units in the Burwood Sub-Fund constitutes 100% of the distributable income from the Burwood property. The unit holders of the Burwood sub-fund are entitled to 100% of the capital relating to the Burwood property and no other member of DomaCom has an entitlement to the income or capital in relation to the Burwood property. Although clause 19.1 provided that the responsible entity had a general entitlement to indemnity, clause 4.4(c)(iv) provided that the responsible entity was not entitled to be indemnified out of the relevant scheme assets of a class in relation to relevant liabilities of another class. 113 The primary judge held, at [23], that the "conclusion that the Burwood Sub-Fund is a separate trust carries the consequence that it is not a widely held unit trust within the meaning of s 71(1)(h)". 114 Accordingly, the primary judge concluded that Aussiegolfa's units in the DomaCom Fund (or the Burwood Sub-Fund) constituted an in-house asset. 115 The primary judge then considered the issue relating to the sole purpose test. His Honour stated, at [29], that it was a question of fact whether the sole purpose test would continue to be satisfied upon the grant of a lease to Ms Benson, referring to Randwick Corporation v Rutledge (1959) 102 CLR 54 at 94; Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 at 644-645; and News Limited v South Sydney District Rugby League Football Club Limited (2003) 215 CLR 563 at [18]. 116 His Honour concluded that entry into the lease with Ms Benson would cause Aussiegolfa to breach the sole purpose test. His Honour reasoned as follows at [30]-[31]: 30 A factual difficulty for Aussiegolfa in the present case about whether the leasing to Ms Benson causes Aussiegolfa to breach the sole purpose test arises from the candidly frank statement by Mr Benson that the use of the Burwood property by a lease to his daughter was to test "the related party use of residential property" within self-[managed] superannuation funds. That statement bears upon an evaluation of the facts to determine whether the Benson Fund was maintained solely for the purposes contemplated by s 62(1) or also for the not incidental, but independent and collateral, purpose of providing housing for Ms Benson. An available inference from the evidence, including the frankly candid statement by Mr Benson, is that an investment in units in the DomaCom Fund was for the collateral purpose of the superannuation fund being used to provide accommodation to a person related to the superannuation fund. 31 Even without the inference from Mr Benson's statement, however, the facts do not support the conclusion that the leasing to Ms Benson would not cause Aussiegolfa to breach the sole purpose test. A high standard was adopted by s 62 of the SIS Act as an important pillar to ensure that self-managed superannuation funds achieve the objectives of providing retirement benefits and not current day use or benefits. A collateral purpose of providing housing for a relative is not amongst the core purposes, or the ancillary purposes, in s 62 and is inconsistent with the underlying objective of not providing present benefit or use to members of a self-managed superannuation fund or to relatives of the members. In Case 43/95 [1995] 95 ATC 374 the Administrative Appeals Tribunal said at [24]: 24. In addition to the above, it may be that there are isolated incidents which, viewed in the overall context of the way in which a superannuation fund is being maintained, are so incidental, remote or insignificant, that they cannot, having regard to the objects sought to be achieved by the Act, be regarded as constituting a breach of the sole purpose test. Such incidents will be rare. The legislature, by adopting the "sole purpose" test, has expressly determined that a strict standard of compliance should be adhered to. Under the Act, the test requires more than the presence of a dominant or principal purpose in the maintenance of a superannuation fund - it requires an exclusivity of purpose commensurate with that purpose being the "sole purpose". In the instant case, in the absence of other relevant factors, the fact that Mr A and his friend were enabled as the result of the investment by the fund, after paying the annual subscription fee, to play golf could by itself be regarded as so incidental or remote as to not amount to an infringement of the test. However, given that there were other relevant factors surrounding the way in which that asset was maintained and viewed in the context of the findings reached by the tribunal with respect to other investments made by the fund - in the units in Mr A's family trust and in the Sorrento property - a circumstance which in isolation may be insignificant or remote becomes more significant. Having regard to the totality of the way in which the three nominated assets - the shares in Z Pty Ltd, the Swiss chalet and the Sorrento property - were maintained, the tribunal is satisfied that Mr A had a second purpose, namely to make the assets available for his use and the use of his family and friends so that it could not be said that the "sole purpose" in the maintenance of the assets was for the benefit of the members of the fund. The fact that other assets of the fund may not have been utilised for a purpose other than a purpose to give benefits to the members has been considered by the tribunal but does not affect its decision. The facts in that case are plainly not the same as those in this proceeding, however, its reasoning is apt and broadly applicable. There may be circumstances in which a lease to a related party would not breach the sole purpose test but the evidence in this case is that the purpose of the investment by Aussiegolfa in student housing accommodation through DomaCom was, in part, to provide housing to Mr Benson's daughter. The Commissioner relied upon a number of other facts for that conclusion which were unpersuasive (such as the fact that Mr Benson was providing a guarantee and might be called upon to provide economic support to his daughter), but in this case it is sufficient that a purpose of the investment by Aussiegolfa in DomaCom was to provide accommodation to a relative of Mr Benson. The conclusion that the sole purpose test would be breached by the lease to Ms Benson is not also required by the fact that Mr Benson gave a parental guarantee, or was the person who forwarded the application for his daughter to the agent, but is required by the fact that a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of [Mr] Benson. (Emphasis added.) 117 It followed that his Honour declined to make the declarations sought by Aussiegolfa and dismissed the proceeding.

The AAT Reasons 118 As noted above, the proceeding in the Tribunal was an application by Aussiegolfa for review of the Determination. The Tribunal outlined the background facts and legislative provisions at [1]-[14] of its reasons (the AAT Reasons). 119 After setting out s 71(4) of the SIS Act, the Tribunal concluded, at [15], that "the objective condition that needs to exist before a determination can be made under s 71(4)(b) is absent because the reasons and conclusions in the Federal Court proceedings would also lead the Tribunal to decide that the investment by Aussiegolfa in DomaCom was in units which are assets that consist of an in-house asset". It followed that the Determination was to be set aside. 120 However, the Tribunal also went on to indicate that, if Aussiegolfa's units did not constitute an in-house asset, the Tribunal would have affirmed the Determination. The Tribunal stated at [15]-[16]: 15 … It is desirable, however, to say that the Commissioner's determination would have been affirmed if the asset had been found to have consisted of an investment other than an in-house asset. That is because the investment would be in substance, and in practical effect, the same as an in-house asset and within the purpose sought to be achieved by limiting investments in in-house assets to 5%, even though it might in legal form not be an in-house asset. 16. The primary policy objective of the superannuation investment rules was described in the explanatory memorandum accompanying the 1999 amendments as follows: The primary policy objective is to ensure that the investment practices of superannuation funds are consistent with the government's retirement incomes policy. That is, superannuation savings should be invested prudently, consistently with the SIS requirements, for the purpose of providing retirement income and not for providing current day benefits. The practical effect and substance of the investment by Aussiegolfa in DomaCom was to provide current day benefits to a party related to the Benson Fund. 100% of the income and capital of the Burwood Sub-Fund is held and applied by the responsible entity for the sole benefit of Aussiegolfa, and the other Part 8 associates. The unit holders control the duration of the Burwood Sub-Fund and have the power to terminate it or extend it. No other members of the DomaCom Fund have any rights or entitlements in relation to the capital or income of the Burwood Sub-Fund. The rights and entitlements attached to the units of the Burwood Sub-Fund do not confer upon Aussiegolfa and the other Part 8 associates any entitlement to income or capital that is not part of the Burwood Sub-Fund. The use of the Burwood property by Ms Benson would have resulted in the asset being an in-house asset if leased directly by Aussiegolfa. The investment by Aussiegolfa in the units in the Burwood Sub-Fund effectively exposes the assets of the Burwood Sub-Fund to the same risks that the in-house asset rules were designed to limit and allow indirectly the assets of the Benson Fund to be accessed for present day use.

The Federal Court Appeal 121 Aussiegolfa's amended notice of appeal contains twenty grounds, but Aussiegolfa does not press grounds 7, 10, 15 and 16. The remaining grounds of appeal are as follows: The Burwood Sub-Fund is not an "in-house asset" 1. The trial judge misconstrued the DomaCom Fund's Constitution in holding that an investment by the Appellant (Aussiegolfa) in units in the DomaCom Fund linked to the Burwood Sub-Fund was an investment in a related trust and therefore an in-house asset within s-ss 71(1) and 70E(2) of the Superannuation Industry (Supervision) Act 1993 (SISA). 2. In particular, the trial judge erred by treating the investment in the DomaCom Fund as though it were instead an investment in a separate trust consisting of the Burwood Sub-Fund, the unitholders in which were confined to Aussiegolfa, Mr Benson's mother, and his sister's superannuation fund. 3. The trial judge ought to have found that, by reason of various provisions in the Constitution, in particular the cl 1.1 definitions of "Assets", "Fund", "Unit", Unit Holder, and "Unit Holding"; cl 2.1 (responsible entity); paras 2.2(a) and (b) (declaration of trust), cl 2.3 (name of fund); paras 4.1(a) and (b) (interests and units); cl 4.10 (perpetuity period); cl 4.12 (confirming DomaCom Fund is a single trust); cl 19.1 (trustee's right of indemnity), and cl 25.1 (termination) Aussiegolfa's investment was in the DomaCom Fund, not in a separate trust constituted by the Burwood Sub-Fund. 4. The trial judge erred by disregarding evidence that DomaCom Fund is treated as a single managed investment scheme under the Corporations Act 2001, and prepares financial reports and tax returns on the basis that it is a single entity. 5. The trial judge erred by treating the terms of the Product Disclosure Statement (PDS) and Supplementary Product Disclosure Statement (SPDS) as relevant to determining whether Aussiegolfa's investment is in a trust consisting of the Burwood Sub-Fund but failing to indicate which of those terms (if any) were incorporated into the constitution of the DomaCom Fund and the Burwood Sub-Trust or were relevant to construing the Constitution. 6. The trial judge took irrelevant considerations into account to the extent that his Honour relied on the PDS and SPDS in identifying or construing the terms of the DomaCom Fund. … 8. The trial judge erred in law in finding that the unit holders of each sub-fund had exclusive rights to the actual income and capital of the asset held in their sub-fund. 9. The trial judge ought to have found that the scheme of the Constitution was to give unit holders the right to a return on their investment equal to the net income and capital produced by the asset in their sub-fund. … 11. The trial judge erred in finding that Aussiegolfa had invested in a separate trust constituted by the Burwood Sub-Fund; therefore its investment in the DomaCom Fund was not an investment in a widely held unit trust for the purposes of s 71(1)(h) of SISA. 12. The trial judge ought to have found that Aussiegolfa's investment was in the DomaCom Fund, and was therefore an investment in a widely held unit trust for the purposes of s 71(1)(h) of SISA The "sole purpose test" will not be breached 13. The trial judge erred by treating DomaCom Fund's purpose of leasing the Burwood property to Mr Benson's daughter to test "the related party use of residential property" as affecting adversely the compliance by the Benson Family Superannuation Fund (the BFSF) with s 62 of SISA. 14. The trial judge ought to have found that DomaCom Fund's purpose for leasing the Burwood property to Ms Benson did not affect the purpose for which Aussiegolfa maintained its investment in DomaCom Fund or at least that, provided DomaCom Fund ensured that the Burwood property produced an arm's length return, DomaCom Fund's purpose was consistent with the BFSF satisfying the sole purpose test in s 62 of SISA. … 17. The trial judge erred in law and misconstrued SISA when his Honour held that Aussiegolfa would breach s 62 of SISA if the DomaCom Fund leased a residential property to Ms Benson. 18. The trial judge should have found that because the BFSF would provide no financial benefits to a member or to a member's Part 8 associates, and because the lease to Ms Benson was on arm's length terms, there was no breach of the sole purpose test in s 62. 19. Alternatively to 18, the trial judge ought to have found that the leasing of a residential property by the DomaCom Fund to Ms Benson was at the most incidental to the purposes for which the BFSF was maintained within the sense described by Gibbs A-CJ in Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 at pp644-645. 20. Further to 17, 18 and 19 above, if the trial judge's construction of s 62 were correct it would lead to a breach of s 62 whenever a superannuation fund leases "business real property" as defined in s 66(5) to a related party of the fund in accordance with s 71(1)(g) of SISA, or whenever a superannuation fund acquires listed securities or business real property from a related party in accordance with s 66(2). 122 These appeal grounds essentially raise the three issues summarised at [15] above, namely the Related Trust Issue, the Widely Held Trust Issue and the Sole Purpose Issue. 123 The Commissioner relies on a notice of contention by which he contends, in summary, that, if, contrary to the Commissioner's primary contentions, the Full Court finds that the primary judge erred in holding that, apart from s 71(4) of the SIS Act, Aussiegolfa's units constituted an investment in a related trust of the Benson Fund and did not constitute an investment in a widely held trust, then by reason of s 71(4) and the Determination, the units in the Burwood Sub-Fund are taken to be an investment in a related trust of the Benson Fund. Accordingly, it is contended that the appeal should be dismissed.

The AAT Appeal 124 The Commissioner's notice of appeal sets out two questions of law as follows: 1. Was the objective condition under subsection 71(4)(a) of the SIS Act for the making of the determination under subsection 71(4)(b) of the SIS Act absent? 2. Was the investment by Aussiegolfa Pty Ltd as trustee of the Benson Fund in the Sub-Fund Units an investment "other than an in-house asset" within the meaning of subsection 71(4)(a) of the SIS Act? 125 The Commissioner relies on one ground in his notice of appeal. This states that, in the Federal Court Appeal, Aussiegolfa contends that the primary judge erred in finding that Aussiegolfa's units constituted an investment in a related trust of the Benson Fund and did not constitute an investment in a widely held unit trust. It is then stated that if, contrary to the contentions of the Commissioner, Aussiegolfa's units did not constitute an investment in a related trust of the Benson Fund and/or did constitute an investment in a widely held unit trust, then the Tribunal ought to have affirmed the Determination. It is thus apparent that the Commissioner's appeal in respect of the Tribunal decision is contingent on Aussiegolfa succeeding on the in-house asset issues in the Federal Court Appeal. 126 Aussiegolfa relies on a notice of contention. It contends that the decision of the Tribunal should be affirmed on grounds other than those relied on by the Tribunal. Aussiegolfa contends that, if Aussiegolfa's units did not constitute an in-house asset, the Tribunal should have found that the Commissioner should not have made the Determination. Aussiegolfa challenges [15]-[16] of the AAT Reasons.

The Related Trust Issue 127 I now turn to consider the issues raised by the Federal Court Appeal. The first issue, referred to as the Related Trust Issue, is whether the primary judge erred in concluding that the units held by Aussiegolfa in the DomaCom Fund (or the Burwood Sub-Fund) constituted an investment in a "related trust" of the Benson Fund for the purposes of Pt 8 of the SIS Act. This issue is raised by grounds 1-6, 8 and 9 of the amended notice of appeal. It is convenient to deal with these grounds together.

Aussiegolfa's submissions 128 Aussiegolfa submits that the Burwood Sub-Fund was not a separate trust; accordingly, it was not a "related trust" of the Benson Fund for the purposes of the in-house asset rules. In its submissions generally, Aussiegolfa relies on the Constitution as at May 2017, on the basis that the declarations it sought related to this version of the Constitution. 129 Aussiegolfa submits that the statement in the Supplementary Product Disclosure Statement that the Burwood Sub-Fund was a "separate trust" was incorrect and non-binding. It is submitted that it is not clear what significance the primary judge attributed to this statement - whether he regarded it as introducing a contractual term or whether he considered it to be relevant in construing the Constitution. Aussiegolfa submits that: the product disclosure statements largely consisted of disclosures required by the Corporations Act, marketing material and various explanations; most of the statements in these documents were incapable of forming part of the contract between the DomaCom Fund and Aussiegolfa, because they were not promissory in nature (see Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) v Sithiravel [2016] NSWSC 1543 at [179] and [182]); the statement that each sub-fund was a separate trust is an example of this; the statement was purely descriptive, not contractual in nature, incorrect and in any event did not override the Constitution. 130 Aussiegolfa submits that: the primary judge erred in construing the Constitution as conferring on unitholders in the Burwood Sub-Fund direct and exclusive proprietary rights in the Burwood Property and its income; rather, the Constitution entitled Aussiegolfa to distributions equivalent to the income produced by the investment and, ultimately, to the sale proceeds; but the source of those distributions was the general assets of the DomaCom Fund. 131 Aussiegolfa makes the following submissions in relation to [22] of the Federal Court Reasons: (a) The primary judge erred in stating that, because part of the beneficial interest in the DomaCom Fund was divided into units, the Responsible Entity owed separate fiduciary duties to the Burwood Sub-Fund unit holders and no fiduciary duty (in respect of the Burwood Property) to unit holders in other sub-funds. First, the duties the Responsible Entity owed to unit holders were trustee duties, which are more extensive than fiduciary duties. Secondly, those trustee duties were owed to the general body of unit holders. Thirdly, if the Responsible Entity were to commit a breach of duty that affected only one property, unit holders other than the unit holders in the relevant sub-fund could bring proceedings to restrain the Responsible Entity from committing the breach or requiring it to rectify the breach, because all unit holders have an interest in all of the DomaCom Fund's assets (cl 4.1(b) of the Constitution as at May 2017). (b) The primary judge referred to the Responsible Entity only being permitted to issue units in respect of specific assets and to all proceeds and income received having to be dealt with as the relevant scheme assets for the class, apparently relying on cl 4.4(c)(i) of the Constitution as at May 2017. But that clause does not support the proposition that each sub-fund is a separate trust because it does not confer any proprietary rights on the unit holders in respect of assets allocated to a sub-fund in which they have invested (see cl 4.1(b)). (c) Although there is a separate item of property that the trustee appropriates to each sub-fund, under cl 4.1(b) all unit holders in the DomaCom Fund have beneficial interests in the entirety of assets of the fund. DomaCom Fund unit holders therefore have beneficial interests in assets appropriated to sub-funds in which they hold no units. However, unit holders do not have interests in particular assets because they have a beneficial interest in the entirety of the assets of the Fund. (d) The primary judge said that cl 13 (of the Constitution as at May 2017) provides for the whole of the net income in respect of each sub-fund to be received by the unit holders in that sub-fund in accordance with a formula. It is unclear what formula the trial judge was referring to, because the formula in cl 13.4 is based on the income of the whole of the DomaCom Fund and provides for income to be distributed to unit holders in proportion to their total unit holdings. The starting point for determining an income distribution is the calculation of the net income of the DomaCom Fund (see cl 13.1). Clause 13.12 then imposes on the Responsible Entity a duty to keep separate accounts for each sub-fund, to allocate the income and expenses referable to a particular class to that class and to allocate other income and expenses (not referable to a particular class) to each sub-fund on a fair and reasonable basis. This is consistent with the DomaCom Fund constituting a single trust. (e) The primary judge stated that the rights and entitlements of the units in the Burwood Sub-Fund constituted 100 per cent of the distributable income from the Burwood Property, and that the unit-holders in that sub-fund were entitled to 100 per cent of the capital relating to the Burwood Property. If the primary judge meant that the unit holders were entitled to the Burwood Property and its income, then the primary judge erred. What the Constitution gives to each unit holder of the Sub-Fund is an amount equal to their share of the income and, ultimately, the sale proceeds, of the Burwood Property, after subtracting their share of the Responsible Entity's general administration expenses - that is, they are entitled to money equal to the performance of the investment, not to the investment itself. All unit holders have an interest in all the assets, including the Burwood Property and its income. The primary judge was therefore incorrect to state that no other member of the DomaCom Fund has an entitlement to the income or capital in relation to the Burwood Property. (f) The primary judge correctly noted that under cl 4.4(c)(iv) (of the Constitution as at May 2017) the Responsible Entity is not entitled to be indemnified out of the relevant scheme assets of a class in relation to relevant liabilities of another class. But far from indicating that each sub-fund is a separate trust, the trustee's right of indemnity is consistent with the existence of only one trust. Clause 19.1 provides that the Responsible Entity has a right to be fully indemnified for its expenses, liabilities and costs out of the Assets of the Fund. "Assets" of the Fund are defined in cl 1.1 to be cash, investments, rights, income and other property. Hence the Responsible Entity's indemnity extends to all the property of the DomaCom Fund regardless of whether the property has been appropriated to classes or sub-funds. The right is codified in s 36(2) of the Trustee Act 1958 (Vic) and is a hallmark of a single trust: see Lee WA et al, The Law of Trusts (Thomson Reuters, subscription service) at [13.030]; Heydon JD and Leeming MJ, Jacobs' Law of Trusts in Australia (8th ed, LexisNexis Butterworths, 2016) at [21-02]. If for any reason there were losses incurred in relation to an investment allocated to a sub-fund that could not be recovered from the unit holders in that sub-fund, the Responsible Entity has the right under cl 19.1 to recover such losses from all the assets of the Fund (except if the Responsible Entity is guilty of fraud, negligence or wilful default). Terms of the right of indemnity assume that the Responsible Entity is trustee of a single trust. 132 Aussiegolfa submits that the primary judge overlooked provisions in the Constitution (as at May 2017) that created the DomaCom Fund as a single trust: see the definition of "Fund"; cl 4.1(b); cl 4.12; and cl 24 (providing for a single perpetuity period). It is submitted that the primary judge also overlooked other relevant matters, namely: the DomaCom Fund was administered as a single trust; the Responsible Entity issued annual audited financial statements for the DomaCom Fund; the DomaCom Fund lodged a single tax return; and the DomaCom Fund was a registered managed investment scheme under Ch 5C of the Corporations Act (noting that s 601FC(1)(d) provides that the responsible entity is required to treat members who hold interests in the same class equally and members who hold interests of different classes fairly).

The Commissioner's submissions 133 The Commissioner submits that the relevant assets for the purposes of applying s 71(1) of the SIS Act are the units in the Burwood Sub-Fund held by Aussiegolfa. The Commissioner submits that: those units are units in a trust that was created over the Burwood Property; and the Burwood Property is held by the Responsible Entity (through the Custodian) on trust for the holders of the Burwood Sub-Fund units. The Commissioner relies on the following five propositions (some of which overlap) in support of those submissions: (a) The holders of the Burwood Sub-Fund units are entitled to 100 per cent of the distributable income from the Burwood Property. (b) The holders of the Burwood Sub-Fund units are entitled to 100 per cent of the capital relating to the Burwood Property. (c) The holders of the Burwood Sub-Fund units have control over the duration of the Burwood Sub-Fund and have the power to terminate it or extend its duration. (d) The Burwood Sub-Fund units confer no right or entitlement to distributions of income or capital derived from or relating to any other asset of the DomaCom Fund, apart from the Burwood Property. (e) As a corollary of (d), no other member of the DomaCom Fund has an entitlement to the income or capital of the Burwood Sub-Fund. 134 In making these submissions, the Commissioner relies on the Constitution and the product disclosure statements. The Commissioner submits that the Burwood Sub-Fund was created, and the units in that sub-fund were issued, under the Constitution as at 2015, and following the publication by the Responsible Entity of the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement. The Commissioner relies on the product disclosure statements as constituting a determination by the Responsible Entity of the rights and obligations attaching to the Burwood Sub-Fund units. In the alternative, the Commissioner relies on those documents as secondary evidence of such a determination. 135 In his submissions generally, the Commissioner refers to both the Constitution as at 2015 and the Constitution as at May 2017. The Commissioner submits that in order to ascertain the rights and obligations attaching to the Burwood Sub-Fund units, one starts with the Constitution as at 2015, the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement; and it is then necessary to consider whether there has been a change in the rights and obligations since that time.

Consideration 136 The relevant assets for the purposes of applying s 71(1) of the SIS Act were the units held by Aussiegolfa in the DomaCom Fund (or the Burwood Sub-Fund). These were units of a particular class, being a class associated with the Burwood Property. The units of this class were referred to in contemporaneous documents as units in the Burwood Sub-Fund. However, it is important to keep in mind that the Constitution did not refer to sub-funds, but to classes of units. 137 The question whether the units held by Aussiegolfa constituted an investment in a "related trust" of the Benson Fund within the meaning of s 71(1) turns on whether there was a separate trust associated with the class of units known as the Burwood Sub-Fund units: see [104] above. If there was a distinct trust associated with that class of units, then Aussiegolfa's units constituted an investment in a related trust of the Benson Fund. If there was not a distinct trust associated with the class of units, then Aussiegolfa's units did not constitute an investment in a related trust of the Benson Fund. The question whether there was a distinct trust is to be assessed by reference to the general law conception of a trust. This is because the issue raised by the statute is whether the asset is an investment in a "related trust" and it may be assumed that the legislature intended to use the word "trust", being a legal term, in its general law sense: see Attorney-General (NSW) v Brewery Employés Union of New South Wales (1908) 6 CLR 469 at 531; Pearce DC and Geddes RS, Statutory Interpretation in Australia (8th ed, LexisNexis Butterworths, 2014) at [4.13]. Neither party suggested that the word has a special meaning when used in s 71(1). 138 In considering these matters, it is useful to refer to some definitions or descriptions of a "trust". In Jacobs' Law of Trusts in Australia (8th ed, LexisNexis Butterworths, 2016), the learned authors refer to the difficulty of defining a trust and state that, if a definition is demanded, then a trust may be defined as "the whole relationship which arises between the parties in respect of the property the subject of the trust, and the obligation of the trustee to the beneficiary and the interest of the beneficiary in the property may be regarded as results flowing from the existence of that relationship" (at [1-03]). In Scott AW, Fratcher WF and Ascher ML, Scott and Ascher on Trusts (5th ed, Aspen Publishers, 2006), the learned authors write, in relation to the definition of a trust, that it is "probably impossible to define any legal term perfectly, so as to include everything that the term includes and to exclude everything else. There are always borderline cases. Most legal definitions are, in the final analysis, distinctions of degree, and words rarely capture them precisely" (at s 2.1.3). It is noted that, notwithstanding these limitations, each of the Restatements of Trusts has attempted to define, or at least describe, an express trust. The definition of an express trust in the Third Restatement was "a fiduciary relationship with respect to property, arising from a manifestation of intention to create that relationship and subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee": American Law Institute, Restatement (Third) of Trusts (2003) s 2. The authors of Scott and Ascher on Trusts note that, in this definition or description, the following characteristics stand out: (1) a trust is a relationship; (2) it is a relationship of a fiduciary character; (3) it is a relationship with respect to property, not one involving merely personal duties; (4) it subjects the person who holds title to the property to duties to deal with it for the benefit of charity or one or more persons, at least one of whom is not the sole trustee; and (5) it arises as a result of a manifestation of an intention to create the relationship. The authors state that it is "the combination of these characteristics that well describes the notion of the trust as it has developed in Anglo-American law" (at s 2.1.3). See also Tucker L, Le Poidevin N and Brightwell J, Lewin on Trusts (19th ed, Sweet & Maxwell, 2015), [1-001]-[1-004]. 139 In the particular context of a unit trust, as the High Court said in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 at [15], "a priori assumptions as to the nature of unit trusts under the general law and principles of equity would not assist and would be apt to mislead. All depends, as Tamberlin and Hely JJ put it in Kent v SS Maria Luisa [No 2] [(2003) 130 FCR 12 at [60]] upon the terms of the particular trust". The High Court also stated that, in the absence of an applicable statutory definition, the term "unit trust" "does not have a constant, fixed normative meaning". See also ElecNet (Aust) Pty Ltd v Commissioner of Taxation (Cth) (2016) 259 CLR 73 at [48]-[49] per Kiefel, Gageler, Keane and Gordon JJ, at [85]-[89] per Nettle J. 140 As these definitions or descriptions indicate, a trust is a relationship with respect to property. This requires certainty as to (among other things) the property bound by the trust: Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271 at 277 per Gummow J, citing Federal Commissioner of Taxation v Clarke (1927) 40 CLR 246 at 283-285 and Scott AW and Fratcher WF, Scott on Trusts (4th ed, Little, Brown, 1987) at s 76, 77. See also Heydon JD and Leeming MJ, Jacobs' Law of Trusts in Australia (8th ed, LexisNexis Butterworths, 2016) at [1-06]. 141 In considering whether a trust has been established, a relevant enquiry is whether there was an intention to create a trust. In Byrnes v Kendle (2011) 243 CLR 253, Heydon and Crennan JJ said (at [105]) that the "authorities establish that in relation to trusts, as in relation to contracts, the search for 'intention' is only a search for the intention as revealed in the words the parties used, amplified by facts known to both parties", referring to (among other cases) Smith v Lucas (1881) 18 Ch D 531 at 542; Commissioners of Inland Revenue v Raphael [1935] AC 96 at 142-143; Eslea Holdings Ltd v Butts (1986) 6 NSWLR 175 at 189-190; and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 121. 142 It needs to be borne in mind, in drawing on the principles discussed above, that in the present case there is no issue that a trust was created; the question is whether a distinct trust associated with the Burwood Sub-Fund units was created. Nevertheless, the above principles offer some assistance. 143 It is convenient to start by looking at the position as at July 2015, when the Burwood Sub-Fund units were created and the units in that class were issued to unit holders (Aussiegolfa, Mr Benson's mother and the superannuation fund of Mr Benson's sister and her husband), and then consider whether the position was different under the Constitution as at May 2017. 144 A threshold issue is whether regard may be had and, if so, in what way, to the relevant product disclosure statements (namely, the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement). In circumstances where many of the provisions of the Constitution were expressed to be subject to the rights attaching to a class of units, and the Responsible Entity had the power to create different classes of units "with such rights, obligations and restrictions … as it determines" (cl 3.4(a) of the Constitution as at 2015; see also cl 13.2), it is necessary to consider whether any such determination was made with respect to the Burwood Sub-Fund units. No document has been produced which is, in terms, a determination by the Responsible Entity of rights, obligations and restrictions attaching to the Burwood Sub-Fund units. Nevertheless, given the statements in the product disclosure statements, which include statements as to rights attaching to classes in general and the Burwood Sub-Fund units in particular, the question arises whether there has, in fact, been such a determination. I do not accept the Commissioner's submission that the June 2015 Product Disclosure Statement or the Supplementary Product Disclosure Statement, or both of those documents, constituted such a determination or determinations. They are not expressed in the language of a determination, and they are documents prepared for other purposes, in particular to fulfil the disclosure requirements of the Corporations Act. I do, however, accept the Commissioner's alternative submission that the product disclosure statements constitute secondary evidence of the making of a determination as to the "rights, obligations and restrictions" attaching to the Burwood Sub-Fund units. The Corporations Act contains detailed requirements as to the content of product disclosure statements (see, eg, ss 1013C, 1013D, 1014A, 1014F). In the context of these provisions, it may be inferred, in the absence of evidence to the contrary, that statements in the product disclosure statements as to the rights attaching to the classes of units in general, and the Burwood Sub-Fund units in particular, reflected (and thus constitute secondary evidence of) the making of a determination by the Responsible Entity of the "rights, obligations and restrictions" attaching to the Burwood Sub-Fund units. I would therefore reject Aussiegolfa's submission that certain statements contained in the product disclosure statements can be put to one side as being "incorrect". 145 When the provisions of the Constitution as at 2015 are considered as a whole, they allowed for, indeed facilitated, the creation of a distinct trust associated with a particular class of units. Importantly: (a) The Constitution provided expressly for the creation of classes of units (cl 3.4(a)), and conferred on the Responsible Entity a power to determine the rights, obligations and restrictions attaching to the units of a class (cl 3.4(a)). (b) The word "Assets" was defined by reference to property of the Fund "or a Class" and, where an asset was acquired on behalf of a class of unit holders, it was held by the Responsible Entity "on trust for Unit Holders in that Class" in accordance with the terms of the Constitution (cl 2.2(a)). (c) Although it was provided (in cl 3.1(b)) that each unit conferred on the unit holder a beneficial interest in the Assets as an entirety, this was "[s]ubject to the rights attaching to a Class of Units". (d) It was provided that: the assets referable to a class were to comprise a particular property and all proceeds and income received by the Responsible Entity in respect of or relating to that property; the liabilities referable to a class were only to be met from the assets referable to that class; the assets referable to a class were not to be encumbered in relation to liabilities of another class; and the Responsible Entity was not to be indemnified out of the assets referable to a class in relation to the liabilities referable to another class (cl 3.4(c)). Thus, where a class of units was created, a specific item of property was to be associated with that class, and there was (at least in a practical sense) a segregation between the assets and liabilities of one class and those of another. Similarly, the Responsible Entity was required to allocate the income and expenses referable to a particular class to that class (cl 12.13). (e) If capital referable to a class was to be distributed, it was to be distributed to the unit holders of that class (cl 12.11). (f) Classes of units could be terminated independently from the fund (cl 23(b)) and, upon termination of a class of units, the net proceeds of realisation of the assets held for that class were, in broad terms, to be distributed to the unit holders of the class (clauses 24.1(b), 24.2(a)). (g) Many other provisions of the Constitution operated, or were capable of operating, on a class by class basis. For instance, the provisions dealing with the application price for subsequent issues of units (cl 5), the withdrawal price of units (cl 8), distribution entitlements (cl 12.7(c)) and management fees (cl 15.2) operated, or could operate, by reference to a particular class of units. 146 It is true that a number of the provisions of the Constitution suggested that a single trust was established. These included the definition of "Fund", the default position under cl 3.1(b), and the single provision addressed to the perpetuity period. However, significantly, cl 3.1(b) was expressed to be "[s]ubject to the rights attaching to a Class of Units" and the Constitution provided that the Responsible Entity could determine the rights, obligations and restrictions attaching to the units of a class. It is also true that the DomaCom Fund operated as a single managed investment scheme under the Corporations Act and that there was a single responsible entity, investment manager and custodian. Nevertheless, the provisions of the Constitution referred to above demonstrate that the Constitution allowed for, and indeed facilitated, the creation of a distinct trust in connection with each class of units - a distinct relationship between the Responsible Entity and the holders of units of each class with respect to the property referable to the class. 147 While the Constitution allowed for the creation of a distinct trust with respect to each class of units, it is still necessary to consider whether or not, with respect to a particular class of units, a distinct class was created. That is because many of the provisions of the Constitution were expressed to be subject to the rights, obligations and restrictions attaching to a class of units. In the case of the Burwood Sub-Fund units, the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement point decisively in favour of the view that a distinct trust was created with respect to the Burwood Sub-Fund units. In particular: (a) In the June 2015 Product Disclosure Statement, it was stated (on the first page) that the "assets of one Sub-Fund are not available to satisfy liabilities in another Sub-Fund". (b) In section 2 of the June 2015 Product Disclosure Statement, in response to the question, "How does investing in a Sub-Fund differ from other forms of property investment?", it was stated that investing in a sub-fund allows an investor to choose the underlying property in which they seek to invest and "acquire a beneficial interest in the Underlying Property held by the Sub-Fund". (c) In section 6, in response to the question, "Is an Investor in a Sub-Fund a direct investor in the Underlying Property?", it was stated that investors "acquire a beneficial interest in an Underlying Property by holding Units in a Sub-Fund that holds the underlying property". It was also stated that investors were entitled "to receive a share of the Net Income earned in relation to the Underlying Property and, ultimately, the proceeds of sale of the Underlying Property on termination of the Sub-Fund". It was further stated that the "DomaCom Fund will distribute 100% of the Net Income it receives in respect of an Underlying Property as distributions to Sub-Fund Unit Holders". (d) The Supplementary Product Disclosure Statement stated (on the first page) that "[e]ach Sub-Fund is a separate trust and the assets of one Sub-Fund are not available to satisfy liabilities in another Sub-Fund". 148 Aussiegolfa submits that the provisions of the Constitution conferred an entitlement to an equivalent amount of income, rather than to the income itself. However, on one view at least, the rights as reflected in the June 2015 Product Disclosure Statement went further and conferred an entitlement to a share of the income derived from the relevant property. Further, even if Aussiegolfa's analysis is correct, and holders of units in the Burwood Sub-Fund were entitled to an equivalent amount of income as the income derived from the Burwood Property, this is but one factor to be considered in determining whether there was an intention to create, and the creation of, a distinct trust. 149 When the provisions of the Constitution are considered together with the statements in the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement, one is left with the clear and unmistakable impression that there was an intention to create a distinct trust in association with the Burwood Sub-Fund units and that this intention was effective. Treating the product disclosure statements as secondary evidence of a determination by the Responsible Entity, the rights attaching to the Burwood Sub-Fund units were such as to create a trust relationship between the Responsible Entity and the unit holders of that class with respect to the relevant property (namely, the Burwood Property). The class of units which the Responsible Entity created, namely the Burwood Sub-Fund units, comprised a particular class of units with specific rights and entitlements to income and capital relating solely and exclusively to the Burwood Property. 150 It is true that the Responsible Entity's right of indemnity was expressed (in cl 18.1) as a right to be fully indemnified out of "the Assets" in respect of "all Expenses, Liabilities, costs and any other matters in connection with the Fund". But regard must also be had to cl 3.4(c)(iv), which provided that the Responsible Entity was only to issue classes of units in circumstances where (among other things) "the Responsible Entity is not entitled to be indemnified out of the Relevant Scheme Assets of a Class in relation to Relevant Liabilities of another Class". In light of that provision, the right of indemnity conferred by cl 18.1 is not necessarily antithetical to the existence of a distinct trust with respect to a class of units. 151 Having regard to the above matters, and considering the matter as at the time of the creation of the class of units known as the Burwood Sub-Fund units, in my view a distinct trust associated with that class was established. 152 I turn now to consider whether the position changed as a result of amendments made to the Constitution between 2015 and May 2017. Many of the provisions discussed above were not amended or were not substantially amended. The principal amendments of present relevance were as follows: (a) the definition of "Assets" was amended - the words "or a Class from time to time" were removed; (b) cl 2.2 (declaration of trust) was amended - the effect of the amendments was to remove the Responsible Entity's declaration that it would hold "each Asset that is acquired on behalf of a Class of Unit Holders, on trust for Unit Holders in that Class"; (c) a new cl 4.12 was inserted - stating that the Assets vested in the Responsible Entity gave rise to a single trust; and (d) the clause dealing with income and distributions (cl 12 of the 2015 version; cl 13 of the May 2017 version) was amended - the default position was recast, such that it was not referable to classes of units. 153 Many of these amendments appear to be directed at improving the argument that the Constitution established only a single trust, namely the DomaCom Fund, and not a distinct trust associated with each class of units. However, even if the position is assessed by reference to the Constitution as at May 2017, I consider that there was a distinct trust associated with the Burwood Sub-Fund units. As has been noted, many of the provisions of the Constitution as at 2015 remained unchanged. Further, many of the relevant provisions of the Constitution remained subject to the rights, obligations and restrictions attaching to a class of units, and the Responsible Entity retained the power to create different classes of units with "different rights, obligations and restrictions" (cl 4.4(a) of the Constitution as at May 2017). Thus, whether one is considering the position under the Constitution as at 2015 or the Constitution as at May 2017, it is necessary to have regard to any determination of such rights, obligations and restrictions. For the reasons discussed above, the product disclosure statements constitute secondary evidence of such a determination in respect of the Burwood Sub-Fund units. Taking these matters into account, I do not consider the position to be materially different as at May 2017. 154 Aussiegolfa relies heavily on cl 4.1(b) of the Constitution as at May 2017, which provided that "[s]ubject to the rights attaching to a Class of Units, each Unit confers on the Unit Holder a beneficial interest in the Assets as an entirety and does not confer an interest in a particular Asset". (In the Constitution as at 2015, the corresponding clause was expressed in the same terms, but numbered cl 3.1(b).) The difficulty with Aussiegolfa's reliance on this clause is that the clause is expressed to be "[s]ubject to the rights attaching to a Class of Units". It is therefore necessary to consider whether a determination was made as to the rights attaching to the Burwood Sub-Fund units and, if so, the content of those rights. This takes one to the product disclosure statements, which, for the reasons given above, constitute secondary evidence of such a determination. 155 Aussiegolfa also relies on cl 4.12 of the Constitution as at May 2017. But, as was accepted by senior counsel for Aussiegolfa in oral submissions (T16), the meaning and effect of the Constitution is an objective matter for the Court to determine. For this reason, only limited weight is to be given to cl 4.12, and I do not consider it to affect the overall analysis. 156 For these reasons, I consider that the primary judge was correct to conclude that there was a distinct trust associated with the Burwood Sub-Fund units. It follows that the primary judge was correct to conclude that the units held by Aussiegolfa in the DomaCom Fund (or the Burwood Sub-Fund) constituted an investment in a "related trust" of the Benson Fund for the purposes of Pt 8 of the SIS Act.

The Widely Held Trust Issue 157 I now turn to consider the Widely Held Trust Issue, which is raised by grounds 11 and 12 of the amended notice of appeal. As set out above, an investment in a widely held unit trust is an exception to the basic definition of an in-house asset: s 71(1)(h) of the SIS Act. The expression "widely held unit trust" is defined in s 71(1A), which is set out at [105] above. Both parties proceeded on the basis that the question whether the units held by Aussiegolfa constituted an investment in a widely held unit trust turned on the same issue as discussed above, namely whether there was a distinct trust associated with the Burwood Sub-Fund units. It follows from the conclusion I have reached above, namely that there was a distinct trust, that the units held by Aussiegolfa did not constitute an investment in a widely held unit trust. The primary judge was correct to so hold. 158 In light of the conclusions I have reached in relation to the Related Trust Issue and the Widely Held Trust Issue, it is unnecessary to consider the Commissioner's notice of contention in the Federal Court Appeal.

The Sole Purpose Issue 159 The Sole Purpose Issue, which is raised by grounds 13, 14 and 17-20 of the amended notice of appeal, is whether the primary judge erred in concluding that the leasing of the Burwood Property to Mr Benson's daughter would cause Aussiegolfa to breach the sole purpose test. The question is expressed in a prospective way because, at the time that the primary judge gave judgment, the lease to Ms Benson of the Burwood Property had not yet commenced. It is convenient to continue to express the issue in that way. 160 The sole purpose test, which is contained in s 62 of the SIS Act, has been set out in [108] above. In broad terms, it required the trustee of a regulated superannuation fund to ensure that the fund was maintained solely: (a) for one or more of the core purposes; or (b) for one or more of the core purposes and one or more of the ancillary purposes. The core purposes are matters such as: the provision of benefits for each member of the fund on or after the member's retirement; and the provision of benefits for each member on or after the member's attainment of an age specified in the regulations. The ancillary purposes include matters such as: the provision of benefits for each member on or after the member's cessation of employment on account of ill health; and the provision of benefits in respect of each member of the fund on or after the member's death, if the death occurred after the member attained the prescribed age and the benefits are provided to the member's legal personal representative or dependants. The Benson Fund was a regulated superannuation fund.

Aussiegolfa's submissions 161 Aussiegolfa's submissions can be summarised as follows: (a) The primary judge found that Aussiegolfa's investment in the DomaCom Fund breached the sole purpose test because "a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of [Mr] Benson" (Federal Court Reasons, [31]). (b) There is no evidence to support the finding that Aussiegolfa originally acquired its investment in the DomaCom Fund for the purpose of providing accommodation to Mr Benson's daughter. The evidence in relation to the original investment is that Aussiegolfa invested in the DomaCom Fund to provide it with exposure to a real property investment. The idea of leasing the Burwood property to Ms Benson originated with Mr Benson's employer, DomaCom, in or about April 2017. (c) The primary judge also found that a collateral purpose of providing housing for a relative is not among the core purposes or the ancillary purposes in s 62 and was inconsistent with not providing a present benefit to members or their relatives (Federal Court Reasons, [31]). The Court should reject this finding, for three reasons. First, the Benson Fund invested in the DomaCom Fund, not in the Burwood Property. Ms Benson did not derive any benefit from Aussiegolfa's units in the Burwood Sub-Fund. (d) Secondly, "benefit" in the superannuation context refers to a financial benefit, or a right to a financial benefit: see Cameron Brae Pty Ltd v Federal Commissioner of Taxation (2007) 161 FCR 468 at [13]. Even if the Court 'looks through' the DomaCom Fund, because the lease will be at a market rent it will provide no financial benefit for the purposes of the SIS Act to Ms Benson, or at most only an incidental benefit. There have been a number of AAT and Federal Court decisions dealing with alleged breaches of the sole purpose test: see Re Trustee for the R Ali Superannuation Fund and Federal Commissioner of Taxation (2012) 86 ATR 826; [2012] AATA 44; Olesen v Parker (2011) 85 ATR 387; [2011] FCA 1096; Re Triway Superannuation Fund and Federal Commissioner of Taxation (2011) 83 ATR 766; [2011] AATA 302; Olesen v MacLeod (2011) 85 ATR 107; [2011] FCA 229; Dolevski v Hodpik Pty Ltd (2011) 82 ATR 318; [2011] FCA 54; Olesen v Eddy (2011) 81 ATR 763; [2011] FCA 13; Re ZDDD and Federal Commissioner of Taxation (2011) 81 ATR 872; [2011] AATA 3; Re JNVQ and Federal Commissioner of Taxation (2009) 74 ATR 730; [2009] AATA 522; Deputy Federal Commissioner of Taxation (Superannuation) v Fitzgeralds [2007] ATC 5105; [2007] FCA 1602; Deputy Federal Commissioner of Taxation v Rodriguez (2016) 103 ATR 662; [2016] FCA 860. These decisions all exhibit one of two features: either payments were made to members otherwise than upon retirement, or benefits were provided on non-arm's length terms. (e) The Benson Fund's investment in the DomaCom Fund did not exhibit either of the features that existed in previous cases that have found breaches of the sole purpose test. In particular, the investment was at arm's length for the purpose of deriving income and capital growth, and DomaCom Fund's investment in the Burwood Property was on arm's length terms. (f) Thirdly, other provisions of the SIS Act assume that an arm's length investment does not infringe the sole purpose test. For example, s 66(1) prohibits the acquisition of an asset from a related party, but s 66(2) creates exceptions for, among other things, the acquisition of a listed security acquired at market value and the acquisition of an asset that is "business real property" of the related party acquired at market value. "Business real property" is defined as including a freehold or leasehold interest in real property where the real property is used wholly and exclusively in one or more businesses: s 66(5). Acquisition of an asset at market value is central to these exemptions. (g) Likewise, s 71(1)(g) exempts from the in-house asset test real property subject to a lease between the trustee of a regulated superannuation fund and a related party of the fund if the property is business real property of the fund throughout the term of the lease. The exacting standard imposed by the primary judge would result in any superannuation fund that sought to take advantage of s 71(1)(g) or s 66(2) breaching s 62, an outcome that Parliament could not have intended. Even the Commissioner has never suggested in his public guidance that leasing business real property to a related party of a superannuation fund at market rent might breach the sole purpose test. For example, Self-Managed Superannuation Funds Ruling 2009/1 indicates that "business real property" exists broadly to create exceptions to the general rules in s 66 and Pt 8. There is no suggestion such a lease might breach s 62. (h) The history of the sole purpose test indicates that it was not intended to proscribe every related party transaction: see Compton v Commissioner of Taxation (Cth) (1966) 116 CLR 233; Driclad Pty Limited v Commissioner of Taxation (Cth) (1968) 121 CLR 45 at 67. The exemption in s 23(j)(i) of the Income Tax Assessment Act 1936 (Cth) was replaced by s 23F, based on the report of the Ligertwood Committee (Report of the Commonwealth Committee on Taxation, June 1961), pp 154-157. There was no suggestion in the drafting of s 23F that a superannuation fund would fail the sole purpose test in s 23F(2) if it engaged in related party transactions. The sole purpose test in s 23F(2) was adopted in an amended form in the definition of "superannuation fund" in s 3 of the Occupational Superannuation Standards Act 1987 (Cth) and, ultimately, in s 62 of the SIS Act.

The Commissioner's submissions 162 The Commissioner's submissions can be summarised as follows: (a) The primary judge found that a not incidental, but independent and collateral, purpose of the Benson Fund's investment in the Burwood Sub-Fund Units was to provide housing and accommodation to a related party of the fund, Ms Benson (Federal Court Reasons, [31]). It follows from that finding that the Benson Fund was not maintained solely for the core and ancillary purposes prescribed by s 62(1) of the SIS Act. In reaching those findings, his Honour correctly applied a strict approach to the application of s 62: see Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 at 644-645; Randwick Corporation v Rutledge (1959) 102 CLR 54 at 94; Case 43/95 (1995) 95 ATC 374. (b) Aussiegolfa challenges the finding that it originally acquired the Burwood Sub-Fund units for a purpose of providing accommodation to Mr Benson's daughter. However, the test in s 62 focuses on the purpose for which the assets of a fund are maintained. From at least April 2017, the Benson Fund held its Burwood Sub-Fund units for a purpose of providing accommodation to Ms Benson (Federal Court Reasons, [8]). A fair reading of his Honour's reasons demonstrates that the primary judge applied s 62 correctly, by reference to the purposes for which the Benson Fund was maintained, and not by reference to the purposes for which the units were initially acquired (Federal Court Reasons, [27]-[31]). (c) Contrary to Aussiegolfa's submissions, from April 2017 the Benson Fund, through Mr Benson, utilised its position as a Burwood Sub-Fund unit holder and the rights attaching to those units for purposes that included the purpose of providing accommodation to Mr Benson's daughter, and to test "the related party use of residential property" within self-managed superannuation funds (Federal Court Reasons, [33]). For the reasons expressed by the primary judge, such a purpose is neither a core purpose under s 62(1)(a), nor an ancillary purpose under s 62(1)(b). Aussiegolfa's submissions do not reveal any error in that conclusion.

Consideration 163 The primary judge's findings as to purpose, at [30]-[31] of the Federal Court Reasons, were expressed in terms of Aussiegolfa's investment in the DomaCom Fund and its acquisition of units in the DomaCom Fund. In particular, at [31], his Honour said that "a purpose of the investment by Aussiegolfa in DomaCom was to provide accommodation to a relative of Mr Benson". His Honour also stated in that paragraph that "a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of [Mr] Benson". See also [30]. However, there was no evidence to support the proposition that this was a purpose of Aussiegolfa's original investment in the DomaCom Fund (in 2015). The proposal that the Burwood Property would be leased to Ms Benson emerged only in April 2017. It may be that his Honour was intending to refer to Aussiegolfa's purpose in maintaining its investment in the DomaCom Fund, rather than its purpose in investing in the first place. However, this is difficult to square with the express reference to a purpose of Aussiegolfa "in acquiring the units" in the DomaCom Fund. Insofar as his Honour found that a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of Mr Benson, that finding cannot stand. In relation to appellate review of primary fact finding, see Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43] and the cases there cited. See also Warren v Coombes (1979) 142 CLR 531 and Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93 at [2]-[10], [45]-[54] and [169]. 164 In light of this error, it is necessary to consider afresh whether the Benson Fund would be maintained other than for the core purposes, or the core purposes and the ancillary purposes, referred to in s 62 upon the leasing of the Burwood Property to Ms Benson. This question is to be determined on the basis of the facts and matters referred to in the Federal Court Reasons. It was not suggested that the Court needed to refer to additional materials in order to determine the issue. 165 Prior to the enactment of s 62 of the SIS Act, a number of earlier provisions in effect required a superannuation fund to be established and applied for particular purposes in order to qualify for concessional tax treatment. Other provisions, pertaining to the deductibility of employer contributions to funds for employees, required the payment to be made for particular purposes. In Driclad Pty Limited v Commissioner of Taxation (Cth) (1968) 121 CLR 45, the High Court considered ss 23(j) and 66 of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth). Section 23(j) relevantly provided that the following income was exempt income: "the incomes of the following funds, provided that the particular fund is being applied for the purpose for which it was established - (i) a provident, benefit or superannuation fund established for the benefit of employees". Section 66 provided, in brief summary, that where a taxpayer, "for the purpose of making provision for individual personal benefits, pensions or retiring allowances" for employees, set aside or paid a sum to a fund from which such benefits, pensions or allowances were to be provided, an amount ascertained in accordance with the provision was an allowable deduction. At first instance in the High Court, Taylor J held (at 61-62), in relation to the "A" section of the fund, that the evidence (which included loans by the trustees to the companies) did not indicate that the fund was being used for the benefit of the contributing companies or that it was not being applied for the purpose for which it had been established. Taylor J considered it to be "erroneous to say that the evidence reveals that the trustees were not applying the fund for the purpose for which it was established but, rather, for the benefit of the companies concerned". Taylor J continued (at 62): I do not say that if it could be shown that the trustees, in exercising their powers of investment, were applying the fund in derogation of, or, so as to defeat, the rights of employees in the fund as constituted, the conclusion would not follow that the fund was not being applied for the purpose for which it was established. But there is nothing to suggest that this was so in this case. 166 On appeal, Barwick CJ and Kitto J (at 65), with whom McTiernan and Menzies JJ agreed, agreed with Taylor J's conclusions in relation to the "A" section of the fund. Barwick CJ and Kitto J also made observations (at 67-68) pertaining to the 'purpose' requirements of ss 23(j) and 66 in the context of the "B" section of the fund. Their Honours referred to Compton v Commissioner of Taxation (Cth) (1966) 116 CLR 233 as establishing that, if a fund was not exclusively for the benefit of employees, then it did not fall within s 23(j). Their Honours continued: Turning to s 66 we find in that section a very precise requirement that the payments allowed as deductions must be for the purpose of making provision for individual personal benefits of employees and for that purpose only. If, therefore, it were the case that the payments were simply made to the trustees of a fund, and, that the fund had been established from which such benefits are to be provided and for another purpose as well, eg, to return to the company as loans payments made by the company to trustees, we ourselves would think that the income of the fund would not be within s 23(j) nor would payments to the fund be allowable deductions under s 66. So, for instance, if a deed were to contain a clause requiring the trustees to lend to taxpayers the payments made by them to the trustees as and when made, and to do so at favourable rates of interest, we would think that much could be said against treating such a deed as constituting a fund falling within either s 23(j) or s 66. In this case, evidence has shown that the bulk of the moneys in the hands of the trustees were lent to the taxpayers making the payments, but, although the deed permits this, it does not require it, and attention was not directed to the question whether or not there was, towards the end of a financial year, an arrangement whereby payments were made to avoid tax liability and moneys which would otherwise have had to be found to meet that liability were paid to trustees for the benefit of employees and also for return to the companies as loans, with the advantage of the payments being, by the terms of the deed, ultimately secured to the shareholders of the companies. In circumstances that were proved, however, we think that the income of the whole fund, both "A" section and "B" section, was exempt income under s 23(j) and the payments by the companies to the trustees of the fund - "A" section and "B" section - were allowable deductions under s 66. 167 In the first paragraph quoted above, Barwick CJ and Kitto J referred by way of example to a trust deed that required the trustees to lend to the taxpayers the payments made by them as and when made "and to do so at favourable rates of interest". In that situation, the fund would not be constituted so as to fall within either s 23(j) or 66. On the facts of the case, which included loans by the trustees to the taxpayers of amounts paid by them, and in the absence of evidence of an arrangement as described, their Honours considered the income of the fund to be exempt income under s 23(j) and the payments to be allowable deductions under s 66. The implication is that the loans to the taxpayers making the payments did not, in and of themselves, preclude a conclusion that the fund was being applied for the purpose for which it was established, being a provident, benefit or superannuation fund for the benefit of employees, or the payments by the taxpayers satisfying the purpose requirement in s 66. 168 In 1987, the Occupational Superannuation Standards Act 1987 was enacted. That Act contained, in s 3(1), a definition of "superannuation fund" expressed in terms of sole purpose. "Superannuation fund" was defined as meaning a fund that (among other things): (b) is maintained solely for either or both of the following purposes: (i) the provision of benefits for each member of the fund in the event of the retirement of the member from any business, trade, profession, vocation, calling, occupation or employment in which the member is engaged; (ii) the provision of benefits for dependants of each member of the fund in the event of the death of the member; or for either or both of those purposes and for such ancillary purposes as the [Insurance and Superannuation] Commissioner approves. It is apparent that, although forming part of a definition rather than an obligation imposed upon the trustee, this definition contained the architecture of the current sole purpose test. 169 By 1992, the definition of "superannuation fund" in the Occupational Superannuation Standards Act 1987 had been expanded: see the joint report of the Australian Law Reform Commission and the Companies and Securities Advisory Committee, Collective Investments: Superannuation, Report No 59 (1992) at [2.1]. The report, which was influential in the formulation of the SIS Act, proceeded on the basis of that definition of superannuation fund: see, eg, [9.24]. 170 In 1993, the SIS Act was enacted, containing a sole purpose test, being an obligation imposed on the trustee of a regulated superannuation fund, in s 62. The section has been amended a number of times since the enactment of the Act, but not in ways that are material for present purposes. 171 A number of decisions of this Court have considered provisions concerning the deductibility of employer contributions to funds for employees, in particular Raymor Contractors Pty Ltd v Federal Commissioner of Taxation (1991) 21 ATR 1410 (Davies, Wilcox and Hill JJ) and Cameron Brae Pty Ltd v Commissioner of Taxation (2007) 161 FCR 468 (Stone, Allsop and Jessup JJ). 172 Raymor was centrally concerned with s 82AAC of the Income Tax Assessment Act 1936. Section 82AAC provided in summary that, where a taxpayer "for the purpose of making provision for superannuation benefits" for an eligible employee, set apart or paid an amount to a fund from which the benefits were to be provided, the amount was, subject to certain conditions and exceptions, an allowable deduction. Davies J, with whom Wilcox J agreed, said (at 1412) that the "word 'purpose' has a meaning which is readily understood. It refers to the end in view". His Honour also stated: In s 82AAC(1), the word "purpose" required that the sum set apart or paid in the year of income effected a contribution towards superannuation benefits for or for a dependant of an eligible employee. The term did not look primarily to the subjective factors actuating the setting aside or payment of the sum claimed. Thus, in the ordinary case, it was sufficient to found a deduction that a superannuation fund had been established solely for the provision of superannuation benefits for employees and their dependants, that the fund had been maintained for that purpose, that a sum appropriate, having regard to the provisions of s 82AAE and 82AAM, had been set aside or paid into the fund for the fund's purposes and that the rights of the employees and dependants to receive benefits from the fund were fully secured. If such were the case, it was not pertinent that the sum was set apart and paid into the fund not out of beneficence but out of a duty imposed by law or by an industrial award and not of consequence that the employer had taken into account in establishing and maintaining the fund that incidental benefits such as taxation benefits or the borrowing of sums from the fund at a low rate of interest could be obtained. 173 Hill J said (at 1423): There is a fundamental distinction between purpose and motive just as there is ambiguity in the concept of purpose. However as Lord Wright observed in Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435 at 469, the words: "motive", "object", "purpose" are in application to practical matters difficult strictly to define or distinguish This difficulty arises in part because "motive" is often used colloquially as meaning "purpose" and because in some cases at least a finding of motivation may lead inexorably to a finding of purpose. 174 His Honour stated that the word "purpose" appeared in various contexts in the Income Tax Assessment Act 1936. In relation to s 82AAC, his Honour stated (at 1423-1424): In the context of s 82AA, purpose is the object which the taxpayer has in view or in mind. There may be a fine distinction between purpose and intention but it is not necessary to explore that distinction, cf Plimmer v IRC (NZ) (1957) 7 AITR 286; 11 ATD 480 at 483-484. Generally speaking a person will be said to intend the natural and probable consequences of his acts and likewise his purpose may be inferred from them. In the present case the taxpayer's purpose in making the payments in each year of income may be inferred from the objective evidence that in the years of income in question benefits were continually being forfeited and only one person was in fact paid out, that person being a director of the appellant. Coupled with the fact that virtually the whole of the contributions were lent back to the contributing companies these facts suggest that the appellant's purpose was not to benefit those persons who were members of the fund; or certainly that that was not the sole or dominant purpose in making the contributions in the years in question. … It is not necessary in this case to determine whether the reference to purpose in s 82AAC is a reference to the sole purpose, or a reference to the dominant or principal purpose. There is however much to be said for the view that the section is concerned with sole purpose, cf Compton, supra, at (CLR) 248 and 252. 175 Cameron Brae was concerned with s 82AAE of the Income Tax Assessment Act 1936, which provided that a deduction was allowable "in respect of an amount paid by a taxpayer as a contribution to a non-complying superannuation fund … for the purpose of making provision for superannuation benefits for an eligible employee". The appellant paid $500,000 as a contribution to a fund, and claimed a deduction. Stone J and Allsop J (as his Honour then was) held that the payment was not made for the purpose of making provision for superannuation benefits of an eligible employee, because it did not provide for individual personal benefits for any existing employees of the appellant (at [39]-[49], [54]); cf Jessup J at [112]-[121]. 176 Although the cases discussed above concerned other provisions, they usefully discuss the concept of "purpose" in a similar statutory context. (As noted by Gleeson CJ in News Limited v South Sydney District Rugby League Football Club Limited (2003) 215 CLR 563 at [18], the appropriate description or characterisation of the end sought to be accomplished (purpose), as distinct from the reason for seeking that end (motive), may depend upon the legislative or other context in which the task is undertaken.) Consistently with the approach taken in the above cases, the word "purpose" in s 62 of the SIS Act is concerned with the way in which the fund is being maintained; the term does not look primarily to the subjective factors actuating the trustee. Further, the statutory context in which s 62 appears does not suggest that a fund will not be treated as being maintained solely for the core purposes, or the core purposes and the ancillary purposes, simply because the trustee enters into a transaction with a related party. The statutory context includes s 66(2) of the SIS Act, which, as noted above, creates an exception to s 66(1) for the acquisition of a listed security acquired at market value and the acquisition of an asset that is "business real property" of the related party acquired at market value. The statutory context also includes s 71(1)(g), which, as noted above, exempts from the in-house asset test real property subject to a lease between the trustee of a regulated superannuation fund and a related party of the fund if the property is business real property of the fund throughout the term of the lease. Another provision forming part of the context is s 109, which relates to investments of a superannuation entity. Section 109(1) provides: A trustee or investment manager of a superannuation entity must not invest in that capacity unless: (a) the trustee or investment manager, as the case may be, and the other party to the relevant transaction are dealing with each other at arm's length in respect of the transaction; or (b) both: (i) the trustee or investment manager, as the case may be, and the other party to the relevant transaction are not dealing with each other at arm's length in respect of the transaction; and (ii) the terms and conditions of the transaction are no more favourable to the other party than those which it is reasonable to expect would apply if the trustee or investment manager, as the case may be, were dealing with the other party at arm's length in the same circumstances. It may be observed that this provision does not preclude non-arm's length transactions in the context of the investments of a superannuation entity, but rather requires the terms and conditions of the transaction to be no more favourable to the other party than those which it is reasonable to expect would apply in an arm's length transaction. 177 Applying the principles discussed above to the present case, in my view the Benson Fund would not be maintained for a purpose other than the core purposes and the ancillary purposes set out in s 62 upon the leasing of the Burwood Property to Ms Benson. Importantly, in the present case, although the Burwood Property, being the underlying property associated with the Burwood Sub-Fund units held by Aussiegolfa, would be leased to the daughter of the sole member of the Benson Fund, the lease would be at market rent. In these circumstances, there does not appear to be any financial or other non-incidental benefit to be obtained by Ms Benson by leasing this property rather than another; nor does there appear to be any financial or other non-incidental benefit to be obtained by Mr Benson by the property being leased to his daughter rather than another tenant. It is true that Ms Benson would obtain a benefit in the sense that she obtains accommodation. But in circumstances where this is obtained at market rent, it does not appear to be a relevant benefit for present purposes. If and to the extent that there may be some comfort or convenience - from the perspective of Ms Benson or Mr Benson or both - from the arrangement, I would regard these matters as merely incidental benefits in the circumstances of the present case (including, in particular, the fact that the lease was at market rent). I do not consider the fact that Mr Benson submitted the application for lease on Ms Benson's behalf, or agreed to act as guarantor of Ms Benson's obligations under the lease, to suggest otherwise. These matters do not provide a basis to infer that either Ms Benson or Mr Benson would obtain a benefit from the arrangement other than, perhaps, some comfort or convenience. Further, I do not consider the fact that (as the primary judge found) the selection of Ms Benson as the tenant was explained, in part, by the desire of Mr Benson and DomaCom to test the ability for residential properties held by self-managed superannuation funds to be used by related parties, to be a relevant factor. This may be described as a matter going to motive rather than purpose. In any event, it does not affect the analysis of the way in which the fund would be maintained upon the leasing of the property to Ms Benson. In the absence of a financial or non-incidental benefit being obtained by Ms Benson or Mr Benson, and in the absence of any other facts or matters pointing to a collateral purpose, I conclude that the fund would be maintained solely for the core purposes, or the core purposes and the ancillary purposes, set out in s 62 upon the leasing of the Burwood Property to Ms Benson. 178 The above conclusion as to purpose is necessarily dependent on the facts and circumstances of the particular case. For example, the situation would be different if the lease were not at market rent. In the present case, there was strong evidence to support the proposition that the lease was at market rent. (The rent was the same as that paid by the two previous tenants, who had no relationship with Mr Benson or the Benson Fund. Further, the leasing of the property was handled by Student Housing Australia, which was unrelated.) If, however, the lease were not at market rent, then an inference would probably readily be drawn that the fund was being maintained for a collateral purpose, namely to provide discounted accommodation to a relative of a member of the fund, contrary to the sole purpose test. The situation would also be different if the Benson Fund's investment policy had been affected by the leasing of the property to Ms Benson. However, there is no suggestion to this effect on the facts and matters referred to in the Federal Court Reasons or in the materials to which we were taken during the hearing of the appeals. 179 For the above reasons, in my view, the primary judge erred in concluding that the leasing of the Burwood Property to Mr Benson's daughter in the circumstances set out in these reasons would cause Aussiegolfa to breach the sole purpose test.

Consideration of the AAT Appeal 180 In circumstances where the Commissioner's appeal against the Tribunal decision is effectively contingent on Aussiegolfa succeeding on the in-house asset issues in the Federal Court Appeal, it follows from the rejection of the grounds of appeal relating to those issues that the AAT Appeal is to be dismissed. In summary, the Tribunal proceeded on the basis that the units held by Aussiegolfa in the DomaCom Fund (or the Burwood Sub-Fund) constituted an in-house asset. Therefore, the Tribunal reasoned, the condition for the exercise of the Commissioner's power to make a determination under s 71(4) of the SIS Act was absent. For the reasons set out above, the units held by Aussiegolfa did constitute an in-house asset. It follows that the Tribunal proceeded on a correct basis and the decision to set aside the Determination was correct. It should be noted that this outcome is consistent with the Commissioner's primary position in relation to the appeals. 181 In these circumstances, it is unnecessary to consider Aussiegolfa's notice of contention in the AAT Appeal. However, I note for completeness that, had it been necessary to consider the matter, I would not have been persuaded by Aussiegolfa's challenge to the Tribunal's alternative conclusion that, if Aussiegolfa's units did not constitute an in-house asset, the Tribunal would have affirmed the Determination. The thrust of Aussiegolfa's submission is that, although the Tribunal was proceeding on an alternative basis, namely that the units held by Aussiegolfa were not an in-house asset, the Tribunal failed to adopt a construction of the Constitution consistent with that outcome in this part of its reasoning. The short answer to this submission is that, in [15]-[16] of the AAT Reasons, the Tribunal focussed on the substance and practical effect of Aussiegolfa's investment in the DomaCom Fund (or the Burwood Sub-Fund) rather than assuming a particular construction of the Constitution. In my view, no error has been shown in [15]-[16] of the AAT Reasons.

Conclusion 182 In relation to the Federal Court Appeal, it follows from the conclusion in relation to the Sole Purpose Issue that the appeal is to be allowed in part. It would appear to be appropriate for there to be a declaration reflecting the outcome on the sole purpose test issue notwithstanding the resolution of the in-house asset issues adversely to Aussiegolfa. Aussiegolfa's prayer for relief at first instance sought a declaration in relation to the sole purpose test independently of the declarations sought in relation to the in-house asset issues. The resolution of the sole purpose test issue may have significance for the parties independently of the in-house asset issues. The appropriate orders would appear to be: (a) The appeal be allowed in part. (b) The order made by the primary judge be set aside and in lieu thereof: (i) There be a declaration to the effect that the leasing of the Burwood Property by the DomaCom Fund to Mr Benson's daughter in the circumstances described in these reasons, including that the Burwood Property was appropriated to the class of units referred to as the Burwood Sub-Fund units, the Benson Fund held units in that class, Mr Benson was the sole member of the Benson Fund, and the leasing was at market rent, would not cause Aussiegolfa as trustee of the Benson Fund to breach the sole purpose test in s 62 of the SIS Act. (ii) It be ordered that the proceeding otherwise be dismissed. It is appropriate to receive submissions from the parties both as to the form of the orders and costs. 183 In relation to the AAT Appeal, the appeal is to be dismissed. In circumstances where the two appeals were heard together, it is appropriate to receive submissions from the parties as to costs. It is convenient to defer making substantive orders in relation to the AAT Appeal, and to make these at the same time as the substantive orders in the Federal Court Appeal. I certify that the preceding one hundred and eighty-two (182) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky.

STEWARD J: 184 I have read the reasons for decision of Moshinsky J and respectfully agree with the conclusions his Honour has reached and with the orders his Honour has proposed. I also generally agree with his Honour's reasons for decision. Because of the importance of the issues raised in this appeal, I wish to express some additional reasons for determining the appeals before this Court. For that purpose, I gratefully adopt his Honour's findings of fact and defined terms.

Section 71 of the SIS Act 185 The issue for determination concerning s 71 of the SIS Act is whether the subscription for units by Aussiegolfa in what has been called the Burwood Sub-Fund constituted an investment in a related trust. That will be so, if it can be said that Aussiegolfa, and the related unit holders, had a "fixed entitlement" to more than 50% of the capital or income of "the trust" for the purposes of s 70E(2)(a) of the SIS Act.

"Trust" for the purposes of s 70E 186 The answer to the foregoing question turns upon whether it can be said of the Burwood Sub-Fund that it is a separate "trust" for the purposes of that provision. Aussiegolfa contends that it is not a separate "trust" but merely a sub-fund of a much larger trust known as the DomaCom Fund. The Commissioner disagrees and contends that the Burwood Sub-Fund is a separate fixed trust of the kind considered by the High Court in Charles v Federal Commissioner of Taxation (1954) 90 CLR 598. 187 The SIS Act does not define what is a "trust". I agree with Moshinsky J that the word "trust" should be assessed here by reference to the general law conception of a trust. 188 Putting aside for one moment the statutory context of the SIS Act, there is an immediate difficulty with the question posed here. A trust is not an entity which might or might not have distinct parts. As Moshinsky J has observed, it is a relationship governing the basis upon which property is held. Mayo J said in Re Scott [1948] SASR 193 at 196: No definition of a "trust" seems to have been accepted as comprehensive and exact. The word is sometimes applied to the trust premises, sometimes to the duties related thereto, sometimes to both. Strictly, it refers, I think, to the duty or the aggregate accumulation of obligations that rest upon a person described as a trustee. The responsibilities are in relation to property held by him, or under his control. That property he will be compelled by a court in its equitable jurisdiction to administer in the manner lawfully prescribed by the trust instrument, or where there be no specific provision written or oral, or to the extent that such provision is invalid or lacking, in accordance with equitable principles. 189 More recently, in Investec Trust (Guernsey) Ltd v Glenalla Properties Ltd [2018] UKPC 7; 2 WLR 1465, in advice given by the Judicial Committee of the Privy Council, Lord Hodge, with whom Lords Sumption and Carnwath agreed, cited Re Scott and said at [89]: The editors of Lewin on Trusts (19th ed, para 1-001) cite, as a useful starting point in the absence of any single really satisfactory common law definition of a trust, that used in the Convention on the Law Applicable to Trusts and on Their Recognition 1985, of which this is an extract: "the term 'trust' refers to the legal relationship created - inter vivos or on death - by a person, the settlor, when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a specified purpose." (Article 2.) 190 On this basis, the question for determination might be whether the Custodian of the DomaCom Fund held the Burwood Property as part of the same relationship or "aggregate accumulation of obligations", to use the language of Mayo J, in which it held other property the subject of the Constitution for the DomaCom Fund. Answering that question in the affirmative might preclude the Burwood Sub-Fund from being a separate and distinct trust for the purposes of s 70E(2)(a) of the SIS Act. 191 Turning to statutory context, there are three provisions of the SIS Act which may bear upon the nature of a "trust" for the purposes of s 70E, and a determination of when a sub-fund may constitute a separate and distinct trust. First, there is the definition of "entity" in s 10(1) of the SIS Act, which provides: entity means any of the following: (a) an individual; (b) a body corporate; (c) a partnership; (d) a trust. In my view, this provision does not alter the essential proposition that a trust is a relationship over identified property. Rather, it means that where there is a reference in the SIS Act to an "entity" there is also a reference to a relationship of that kind. 192 Secondly, there is the definition of "widely held unit trust" in s 71(1A) of the SIS Act. Section 71(1)(h) excludes investments in these types of trust from being an investment in an in-house asset. The provision is set out in the reasons of Moshinsky J. The definition is a statutory recognition that property or properties may be held as part of a singular relationship with multiple beneficiaries. 193 The third provision which may be relevant is s 69A of the SIS Act which is also set out in the reasons of Moshinsky J. Section 69A does not expressly apply to the word "trust" in s 70E(2)(a). It addresses the situation of the investing superannuation fund and not the trust in which funds are invested. Nonetheless, contextually, s 69A arguably demonstrates a recognition, for the purposes of the SIS Act, of the concept of a "sub-fund" which may exist within a singular relationship of trust, and not constitute a separate and distinct trust. Section 69A, when satisfied, treats, as a statutory fiction, each sub-fund as a separate regulated superannuation fund. Inferentially, but for s 69A, a sub-fund which: (a) had separately identifiable assets and beneficiaries; and (b) beneficiaries whose interests were determined by reference only to the conditions governing that sub-fund, might not have been treated by the SIS Act as a separate and distinct regulated superannuation fund. On one view, and arguably, as a matter of statutory context, the same might be said of a sub-fund of a "trust" for the purposes of s 70E(2)(a). One should, however, be careful not to overstate the significance of s 69A. Neither the provision, nor the SIS Act, defines what a sub-fund is. Presumably, the term refers to some form of segregation of property or income, or both, from other property or income of a trust, for a particular purpose, or reserved or set aside for a particular beneficiary or beneficiaries. 194 Next, statutory purpose is relevant in construing the word "trust" as it appears in s 70E(2)(a). In the Explanatory Memorandum to the Superannuation Legislation Amendment Bill (No. 4) 1999, which introduced the new in-house asset provisions to the SIS Act, including ss 70E and 71, the following is said under the heading "Policy Objective" at 5: The primary policy objective is to ensure that the investment practices of superannuation funds are consistent with the Government's retirement incomes policy. That is, superannuation savings should be invested prudently, consistent with the SIS requirements, for the purpose of providing retirement income and not for providing current day benefits. Limiting the exposure of a regulated superannuation fund to "in-house assets" both promotes prudent investment and avoids a distribution or conferral of "current day benefits" to fund members or their associates. 195 The importance of considering legislative context and purpose is illustrated by the decision of Menzies J in Truesdale v Federal Commissioner of Taxation (1970) 120 CLR 353, which concerned the payment of money to an existing trust with instructions that the money was to be applied subject to that trust. The question for determination was whether the payment "created a trust" for the purposes of s 102 of the Income Tax Assessment Act 1936 (Cth). Technically, and subject to statutory language, context and purpose, every disposition of property to a trust creates a separate trust. As Kiefel J (as her Honour then was) said in Kennon v Spry (2008) 238 CLR 366 at [229]: There appears to be no reason why each disposition of property to the Trust, from the time of the parties' marriage, cannot be viewed as a separate trust created at that time, albeit on the terms of the Trust. (Citations omitted.) See also: Atwill v Commissioner of Stamp Duties (1970) 72 SR (NSW) 415 at 426 per Mason JA. 196 In Truesdale, Menzies J did not adopt this approach. His Honour decided that the payment did not create a new trust because of the applicable statutory scheme. 197 Here, statutory purpose does not require the conclusion that each disposition of property to an existing trust constitutes the creation of a new trust for the purposes of s 70E(2)(a). That is especially so given the complexity of modern managed investment schemes which may receive a continuous flow of subscriptions. 198 Turning to the decided cases, previous authorities have considered in different statutory contexts the question of when a sub-fund can constitute a distinct settlement or trust. In Roome v Edwards [1982] AC 279, the issue for determination by the House of Lords was whether the creation, in 1955, of a new fund by exercise of a power conferred by a settlement in 1944, was a separate "settlement" for the purposes of s 25(1) of the Finance Act 1965 (UK). Lord Wilberforce said that it did not and at 292-293 said: There are a number of obvious indicia which may help to show whether a settlement, or a settlement separate from another settlement, exists. One might expect to find separate and defined property; separate trusts; and separate trustees. One might also expect to find a separate disposition bringing the separate settlement in existence. These indicia may be helpful, but they are not decisive. For example, a single disposition, e.g., a will with a single set of trustees, may create what are clearly separate settlements, relating to different properties, in favour of different beneficiaries, and conversely separate trusts may arise in what is clearly a single settlement, e.g. when the settled property is divided into shares. There are so many possible combinations of fact that even where these indicia or some of them are present, the answer may be doubtful, and may depend upon an appreciation of them as a whole. Since "settlement" and "trusts" are legal terms, which are also used by business men or laymen in a business or practical sense, I think that the question whether a particular set of facts amounts to a settlement should be approached by asking what a person, with knowledge of the legal context of the word under established doctrine and applying this knowledge in a practical and common-sense manner to the facts under examination, would conclude. To take two fairly typical cases. Many settlements contain powers to appoint a part or a proportion of the trust property to beneficiaries: some may also confer power to appoint separate trustees of the property so appointed, or such power may be conferred by law: see Trustee Act 1925, section 37. It is established doctrine that the trusts declared by a document exercising a special power of appointment are to be read into the original settlement: see Muir (or Williams) v. Muir [1943] A.C. 468. If such a power is exercised, whether or not separate trustees are appointed, I do not think that it would be natural for such a person as I have presupposed to say that a separate settlement had been created: still less so if it were found that provisions of the original settlement continued to apply to the appointed fund, or that the appointed fund were liable, in certain events, to fall back into the rest of the settled property. On the other hand, there may be a power to appoint and appropriate a part or portion of the trust property to beneficiaries and to settle it for their benefit. If such a power is exercised, the natural conclusion might be that a separate settlement was created, all the more so if a complete new set of trusts were declared as to the appropriated property, and it if could be said that the trusts of the original settlement ceased to apply to it. There can be many variations on these cases each of which will have to be judged on its facts. In my view, concordantly with Lord Wilberforce's speech, asking whether the provisions of the original settlement continue to apply to the sub-fund, or whether the fund was liable in certain cases to "fall back into the rest of the settled property", will be relevant considerations in determining whether, for the purposes of s 70E, a sub-fund is a separate trust. 199 More recently, in Swires v Renton [1991] STC 490, Hoffmann J (as his Lordship then was) said at 500: The cases show there is no single litmus test for deciding that question. The paradigm case for the creation of a new settlement would involve the segregation of assets, the appointment of new trustees, the creation of fresh trusts which exhaust the beneficial interest in the assets and administrative powers which make further reference to the original settlement redundant ... The absence of one or more of those features is not necessarily inconsistent with a resettlement. It seems to me that the question is one of construction of the settlement using the approach recommended by Lord Wilberforce and looking at the documents in the light of surrounding circumstances. Putting the same thing another way, it is a matter of endeavouring to ascertain the intentions of the parties. 200 Again, concordantly with this passage, asking whether there has been an appointment of new trustees, the creation of fresh trusts which exhaust the beneficial interest in the assets, and the creation of administrative powers which make further reference to the original settlement redundant, will be relevant in determining whether, for the purposes of s 70E, a sub-fund is a separate trust. 201 In Australia, in Oswal v Federal Commissioner of Taxation (2013) 233 FCR 110, Roome v Edwards was distinguished. In that case, the trustee of an existing family trust resolved to appoint a part of the corpus of the trust for the absolute benefit of certain existing beneficiaries. Edmonds J decided, amongst other things, that this was a declaration and settlement of trust for the purposes of CGT event E1 of the Income Tax Assessment Act 1997 (Cth). His Honour said at [37]: In the context of the issue under consideration in the present case, it needs to be understood that there was never any issue in Roome v Edwards that the appointment of the 1955 fund became subject to trusts which were distinct and different from the trusts of the main fund, the only question being whether a new "settlement" was created for the purpose of s 25(1) of the Finance Act 1965 (UK). That is a very different question to the one with which we are here concerned, namely, whether a trust was created over an asset, and for that reason, what his Lordship had to say in the passage from his speech extracted in [33] above, does not assist the applicants' case contended for in [25] above. Its relevance to the question of whether any trust so created, was created by "settlement" is another matter, and is considered below in the context of my analysis of whether CGT event E1 happened in consequence of the appointment and declaration, if any, made by the 13 March 2007 resolution. Having regard to the terms of the resolution in Oswal, Edmonds J decided that a new trust had been declared. At [54], his Honour concluded: I am therefore of the view that the resolution of 13 March 2007 is a "declaration" of trust within the ordinary conception of a declaration of trust. As such it is difficult to see why it does not create a trust over the assets the subject of the declaration and not merely, as the applicants contended, a separate fund of them. 202 In addressing Roome v Edwards, his Honour emphasised that the issue confronting him was to be judged on the facts. As Edmonds J said at [60]: Moreover, I do not think anything said by Lord Wilberforce in Roome v Edwards mitigates against that view. Indeed, what his Lordship said in the third last and second last sentences of the passage extracted in [33] above, supports the view. As his Lordship said in the very last sentence of the extract, each case "will have to be judged on its facts". 203 The concept of a trust as a single continuing but changing relationship was considered by this Court in Federal Commissioner of Taxation v Commercial Nominees of Australia Ltd (1999) 43 ATR 42; [1999] FCA 1455. In that case, significant amendments had been made to a deed which had established a complying superannuation fund. The fund had carry forward tax losses. The Commissioner contended that the changes had either extinguished the trust, replacing it with a new trust, or had effected a resettlement of the original trust, and that, as a result, the losses could not be used thereafter. The changes included a new trustee, a new category of beneficiaries, changing the fund from a defined benefit to an accumulated benefit fund, the appointment of an administrator with a fee structure, and the promotion of membership to the public. Lee, Emmett and Gyles JJ rejected the Commissioner's submission. At [52], the Court said: The trust obligations of the trustee and the corresponding rights of the beneficiaries may vary from time to time, in accordance with law. Similarly, the property that is the subject of such obligations and rights will not be static. Parts of the property might be distributed so as to cease to be subject to trust obligations. Further property may accrue as income or by further settlement so as to become subject to obligations where previously that additional property was not. At [54], the Court observed: "Superannuation fund", as that term is defined in the SIS Act and the ITAA 1936, contemplates a continuing regime regulating the manner in which a fund may be added to and the manner in which payments may be made from it. So long as one can identify a continuity of that regime, that will be sufficient. The Court concluded at [56]: So long as any amendment of the trust obligations relating to such trust property is made in accordance with any power conferred by the instrument creating the obligations, and continuity of the property that is the subject of trust obligation is established, there will be identity of the "taxpayer" for the purposes of s 278 and ss 79E(3) and 80(2), notwithstanding any amendment of the trust obligation and any change in the property itself. 204 The decision was upheld on appeal to the High Court: (2001) 47 ATR 220; [2001] HCA 33. At [32] the High Court made the following observation about the nature of a superannuation fund: The nature of an eligible entity is such that changes in the incidents of the trust relationship established at its creation are not only possible, but in some respects probable. In the case of an indefinitely continuing superannuation fund, operating under the regulatory scheme in the SIS Act, the trustee might change from time to time. The trust property would almost certainly be in a constant state of change, as contributions were received and employee benefits were paid. The identity of the persons entitled to benefit under the trust would be likely to change over time, as new members came into the scheme and others left. The nature of the benefits provided by the scheme might alter over the years, in response to industrial or market pressures, or regulatory requirements. In the case of a public offer superannuation fund, there would be likely to be substantial changes of membership over time, as new participating employers brought their employees in. 205 In my view, the same or similar observations may be made about the Constitution in this case. The Constitution, by its terms, facilitates investment in real property by members of the public. Within the framework of that Constitution one would expect churn in the composition of its beneficiaries, and in the property administered. One might also expect amendments to be made to the Constitution from time to time. Importantly, Constitutions of this type may authorise the creation of sub-funds in favour of a beneficiary or beneficiaries, as well as the issue of different classes of units. All of these changes or features are potentially consistent with the presence of a singular continuing relationship of trust. Whether that is so depends, however, upon the particular terms of the Constitution in question. 206 I derive the following general propositions from the foregoing survey of statutory language, context and purpose, as well as from the authorities: (a) first, that the word "trust" in s 70E(2)(a) is apt to refer to a singular continuing relationship of trust with the possibility of multiple and changing beneficiaries, in respect of multiple and changing items of property; (b) secondly, that within that singular relationship there may be created sub-funds which may not constitute separate and distinct trusts; (c) thirdly, the creation of a sub-fund would probably constitute a new or separate relationship of trust where there was, to use the language of Hoffmann J, a segregation of assets, the appointment of a new trustee, and the exhaustion, by the terms of the sub-fund, of the beneficial interest in the property of the fund; (d) fourthly, the creation of a sub-fund would probably not constitute a separate and distinct relationship of trust where the fund remained subject to the provisions of the original settlement and its property remained available, whether contingently or otherwise, to be deployed for the trust's original purposes, or to use the language of Lord Wilberforce, to "fall back into the rest of the settled property"; (e) fifthly, a key consideration would be whether the other beneficiaries, who were not members of the new sub-fund, could be said to enjoy, whether contingently or otherwise, an equitable interest in, or equitable rights over, the assets or income of the sub-fund. Conversely, it will be relevant to determine whether the members of the sub-fund had, whether contingently or otherwise, an equitable interest in, or equitable rights over, the other assets or income of the original trust. Asking such questions will assist in determining whether the terms of issue of the sub-fund had segregated the sub-fund from the original trust; (f) finally, the question as to whether a given sub-fund is a separate trust turns upon a close analysis of the terms governing that sub-fund. Those terms will reveal the intentions of the parties. Each case will, as Edmonds J has emphasised, need to be judged on its particular facts.

The contentions of the parties 207 The contentions of the parties are summarised in the reasons of Moshinsky J which I respectfully adopt. 208 A critical feature of Aussiegolfa's case is that it accepted that what is called the Burwood Sub-Fund was constituted by the issue of a distinct class of units and that the unit holders in that sub-fund had a fixed entitlement to the income of that fund. However, it was otherwise unable to identify any document, such as a determination or resolution made by the Responsible Entity, which contained the "terms of issue" of that sub-fund for the purposes of cl 3.4 of the Constitution (as in force in 2015). 209 The Court was invited by Aussiegolfa to assume, effectively, that the class of units comprising the Burwood Sub-Fund was issued on terms pursuant to cl 3.4(a) that complied with cl 3.4(c) of the Constitution. In my view, and with respect, this is not sufficient information to enable me to determine whether the Burwood Sub-Fund was, or was not, a distinct and separate trust. In particular, it did not permit me to know whether the unit holders in the Burwood Sub-Fund had any rights or interests against the other assets or income of the DomaCom Fund or whether the beneficiaries of the other sub-funds had interests or rights against the assets or income comprising the Burwood Sub-Fund. 210 In contrast to Aussiegolfa, the Commissioner did identify documents which he submitted recorded the rights, obligations and restrictions of the unit holders in the Burwood Sub-Fund. These he contended could be found in the June 2015 Product Disclosure Statement, the Supplementary Product Disclosure Statement, and the application form completed by Aussiegolfa to subscribe initially to the cash pool in the DomaCom Fund. In the Commissioner's submission, these documents created the relevant "terms of issue" for the purposes of cl 3.4(a), or, at least, represented secondary evidence of those rights, obligations and restrictions. 211 I agree with Moshinsky J that these documents do not constitute the "terms of issue" of the Burwood Sub-Fund. The Commissioner's contention that these documents contained enforceable rights and obligations rested, in part on the language used in these documents, and on the fact that in the application form Aussiegolfa acknowledged as follows: I/We acknowledge that I/we am/are bound by the relevant provisions of the Constitution provisions, terms and conditions contained in and related to a right, power or authority, discretion or obligation in the relevant Constitution (as amended from time to time) and the PDS. In my view, that acknowledgement should be read as referring to "relevant provisions" in the "PDS" or June 2015 Product Disclosure Statement, if any. That is, if that document contained provisions which were intended to create legal relations then they probably became enforceable by reason of this acknowledgement. But the acknowledgement could not have the effect of turning non-promissory statements into statements with contractual force. 212 The June 2015 Product Disclosure Statement and Supplementary Product Disclosure Statement are documents mandated by the Corporations Act which compel the disclosure of information to proposed investors. Their function and purpose is not to be a source of contractual terms, but to convey a description of a proposed investment. As the Explanatory Memorandum to the Financial Services Reform Bill 2001, which introduced the provisions concerning product disclosure in Div 2 of Pt 7.9 of the Corporations Act, states at [14.28]: Division 2 of proposed Part 7.9 deals with point of sale disclosure in relation to all financial products other than securities (as defined in proposed section 761A). The broad objective of point of sale disclosure obligations is to provide consumers with sufficient information to make informed decisions in relation to the acquisition of financial products, including the ability to compare a range of products. 213 The June 2015 Product Disclosure Statement here contains, for that purpose, a series of questions and answers concerning key issues that bear upon a decision to invest. Some of the language used in some of the sentences is self-evidently intended to be a dissemination of information and no more. Other sentences, on one view, appear to have been drafted as representations or promises that would be made if a person were to make an investment. But the June 2015 Product Disclosure Statement itself makes clear that the legal force of such promises or representations was to be derived from the Constitution of the DomaCom Fund. Under the heading "Material Contract" the following representation is made: The DomaCom Fund is governed by a Constitution dated 13 December 2013. 214 The conclusion that the June 2015 Product Disclosure Statement is not a source of contractual terms is supported by authority. In Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) v Sithiravel [2016] NSWSC 1543, it was contended that statements made in a product disclosure statement contained the terms of a contract. The claim was rejected by Robb J who said at [176], [177] and [179]: 176 Mr Sithiravel submitted, at par 76, that he applied for the products and services offered by Gunns Plantations on the basis of what was contained in the PDSs, and that appears to be the basis of his claim that the PDSs contained terms of the contract. He relied upon a number of statements in the Woodlots Project 2006 PDS (court book p 145) concerning "Key Features" of the project that: "Growers are offered a unique investment opportunity allowing the flexibility of three planting options" and "Growers are offered the opportunity to acquire a Forestry Right over Woodlots..." (emphasis added in both cases) as signifying that the PDSs were offers capable of acceptance. He said that these offers were "akin to the offer to the world at large in the contract case which sticks in all law students' minds Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256". 177 There is no place in the analysis of the effect of the PDSs for the principles governing unilateral contracts, where the offeror makes an offer to a class which is capable of acceptance by the doing of an act identified in the offer. … 179 While the statements relied upon do make various assertions about the nature of the project and the rights of investors, those statements are expressed in descriptive rather than promissory language. They plainly constitute representations, but they do not appear to be independent sources of contractual obligations. 215 I respectfully agree with Robb J's analysis of the effect of a product disclosure statement. I also respectfully agree with Buss JA, who rejected a similar argument about contractual intent, this time made with respect to an information memorandum, in Emu Brewery Mezzanine Limited (in liquidation) v Australian Securities and Investments Commission (2006) 32 WAR 204. At [90], his Honour said: In my opinion, the statements in the information memorandum relied on by the respondent were not intended, objectively, to have contractual force. Some of the statements are imprecise and lack detail, and others are merely explanatory or descriptive. The absence of precision and detail is more consistent with the statements as a whole being intended, objectively, to be representations. No doubt, the sole or dominant purpose of the statements was to induce potential investors to invest in the promissory note issue. However, even if the investors were induced to invest in reliance on the statements, that circumstance would not, in itself, be sufficient to support a conclusion that the statements were intended, objectively, to be promissory. In my opinion, the statements were not, either individually or collectively, the subject matter of an assurance. They conveyed representations, but did not constitute enforceable promises. 216 That reasoning applies here to the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement: see also, to similar effect, Huntley Management Ltd v Timbercorp Securities Ltd (2010) 187 FCR 151 at [41] and [42] per Rares J. 217 However, I otherwise accept, in the particular circumstances of this case, the Commissioner's contention that the June 2015 Product Disclosure Statement and the Supplementary Product Disclosure Statement are secondary evidence of the "terms of issue" of the class of units comprising the Burwood Sub-Fund. Drawing on various statements contained in those documents, and from the affidavits filed by Aussiegolfa deposing to what, as a matter of fact, had occurred in relation to the issue of those units, senior counsel for the Commissioner contended that the class of units comprising the Burwood Sub-Fund was issued subject to the following five features: (a) the first is that it is only the Burwood Sub-Fund unit holders who are entitled to the distributable income from the Burwood Property that is the subject of that sub-fund trust; (b) the second is that it is only the Burwood Sub-Fund unit holders who are entitled to the capital of the Burwood Sub-Fund; (c) the third is that the Burwood Sub-Fund unit holders are entitled to terminate the Burwood Sub-Fund and require the capital to be distributed to them; (d) the fourth is that the rights associated with the units held by the Burwood Sub-Fund unit holders do not entitle them to any income or capital from any other source other than from the Burwood Property; and (e) the fifth is that there is no other member of the DomaCom Fund, apart from the unit holders in the Burwood Sub-Fund, who can have an entitlement to the income or capital of that sub-fund. 218 This identification of the "terms of issue" should be accepted in the absence of any resolution or determination of such terms made by the Responsible Entity in accordance with cl 3.4(a) of the Constitution.

Disposition 219 The issue is whether the Burwood Sub-Fund was created as a distinct and separate relationship of trust over the property of that fund by reason of its terms of issue. In my view, the terms governing the Burwood Sub-Fund, as described by senior counsel for the Commissioner, evinced an intention to create a distinct trust very much separate from any other sub-funds or trusts created by the DomaCom Constitution. It was a pivotal commercial attribute of the arrangement here that the Burwood investors pool their resources to purchase a particular property they had chosen, and then be only exposed to the financial performance of that property and no other. As the letter to investors, contained in the June 2015 Product Disclosure Statement, explained: The DomaCom Fund provides Investors with a unique opportunity to obtain exposure to specific property investments without having to either purchase a whole property or surrender investment decisions to an investment manager. As a DomaCom Fund Investor, investors have the opportunity to invest indirectly in specific properties that investors have chosen themselves with relatively small investment amounts. Through the DomaCom Fund Investors can build a diversified portfolio of small property investments with control over the investment and diversification decision. An Investor can simulate an investment in a property of their choice by acquiring units in a Sub-Fund. …. The value of an investment in a Sub-Fund will go up and down in accordance with the fluctuating value of the Underlying Property. 220 The particular terms of issue of the class of units here, as identified above by senior counsel for the Commissioner, lead to the conclusion that the property of the Burwood Sub-Fund is not impressed with a relationship of trust that extends beyond the sub-fund itself. The terms ensure that the Burwood Sub-Fund unit holders, and no one else, have the right to the income and capital of the fund, can bring the fund to an end by early termination, and are not exposed to the risk that the income and property of the fund can be diminished by the performance of other sub-funds, save in the limited sense I discuss below. The terms of issue also ensure that the Burwood Sub-Fund unit holders have no rights or interest in the assets or income of any other sub-fund. These terms thus delimit how an investor can "simulate an investment in a property", to use the language of the letter set out above. It follows that the terms fully "exhaust the beneficial interest" in the assets of the Burwood Sub-Fund, to use the language of Hoffmann J in Swires v Renton. They also do not permit the Burwood Property to "fall back into the rest of the settled property" of the DomaCom Fund, to use the language of Lord Wilberforce in Roome v Edwards. These propositions, in my opinion, are decisive considerations. 221 It is true that the Burwood Sub-Fund remains subject to other provisions of the Constitution of the DomaCom Fund together with any other sub-funds. It is also true that the quantum of the return to be enjoyed by unit holders is, in part, affected by the performance of the other sub-funds by reason of the formula for calculating the management fee payable in cl 15.1. There is also potential for generalised expenditure to be allocated to a sub-fund and for the Responsible Entity's right of indemnity in cl 18.1 to be available in respect of such expenditure (when that clause is read with cl 3.4(c)(iv)). In this sense, the Burwood Sub-Fund is connected with other sub-funds (if any), and remains, on one view, a creature of the DomaCom Constitution. However, the burdens of paying fees and expenses are, I consider, like any other external burden on a trust estate. Their existence cannot affect the true characterisation of the sub-fund which flows from the five essential terms identified by senior counsel for the Commissioner. Because the commingling of assets or income for the purposes of either quantifying rights to income or property, or for the purposes of discharging liabilities, is antithetical to the fundamental purpose of the establishment of the Burwood Sub-Fund, it follows that it is a separate trust. It subsists for that purpose in confederation with any other trusts or sub-funds established by the DomaCom Constitution. 222 I otherwise adopt and agree with Moshinsky J's reasons concerning this issue, including, in particular, his Honour's analysis of the changes made to the DomaCom Constitution after 2015. 223 For these reasons, the Custodian of the DomaCom Fund held the Burwood Property as part of a separate relationship or "aggregate accumulation of obligations" and thus as a separate trust for the purposes of s 70E(2)(a) of the SIS Act. 224 The foregoing conclusion concerns the Burwood Sub-Fund. Whether other sub-funds of the DomaCom Fund do, or do not, constitute separate trusts would depend upon their particular terms of issue.

Section 71(4) of the SIS Act 225 I agree with Moshinsky J, that the appeal from the Tribunal in relation to the exercise of power under s 71(4) of the SIS Act must fail. That is because of the conclusion reached that the units acquired by Aussiegolfa were in-house assets. 226 Section 71(4) is an unusual section because the criteria for its application are not expressed. The legislative scheme appears to be that there exists in s 71(1) positive criteria for determining what is an in-house asset, which is then juxtaposed against a power, in s 71(4), to undo the application of that criteria in particular cases. The power to undo the application of s 71(1) is seemingly unlimited. 227 A provision cast in such terms, raises the possibility that it is an unconstitutional delegation of legislative power: cf Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365. I need not decide that issue because of the finding that the investment here is an in-house asset. As it happens, both parties accepted that one criteria for application which may be implied from the terms of the provision is that it permits the Commissioner to decide that an asset, which is not an in-house asset pursuant to s 71(1), should nonetheless be treated as an in-house asset if an application of the criteria in s 71(1), as a matter of substance, shows that it should be so treated. It is not desirable for me to determine whether the language, statutory context and statutory purpose support that construction of the provision. And as the matter was not argued before the Court, it is also not desirable for me to say anything further about this construction of s 71(4).

Section 62 of the SIS Act 228 Section 62 of the SIS Act is set out in the reasons of Moshinsky J. 229 The judge below found at [31] of the Federal Court Reasons, as a fact, that "a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of [Mr] Benson". That relative was the daughter of Mr Benson. Mr Benson was the sole director of Aussiegolfa, and the sole member of the Benson Fund. It will be recalled that Aussiegolfa is the trustee of that Fund. Mr Benson was also the Victorian State Manager of the DomaCom Fund. The basis for the judge's finding would appear, in part, to be an email sent in 2017, described by the primary judge in these terms: "[o]n 3 April 2017 Mr Benson (as DomaCom's Victorian State manager) informed DomaCom's client services manager in an email that Mr Benson and some family members were using the Burwood Property to test 'the related party use of residential property within' self-managed superannuation funds." The primary judge reasoned at [30]: That statement bears upon an evaluation of the facts to determine whether the Benson Fund was maintained solely for the purposes contemplated by s 62(1) or also for the not incidental, but independent and collateral, purpose of providing housing for Ms Benson. An available inference from the evidence, including the frankly candid statement by Mr Benson, is that an investment in units in the DomaCom Fund was for the collateral purpose of the superannuation fund being used to provide accommodation to a person related to the superannuation fund. The other basis for the judge's conclusion below was the fact that there was a lease to the daughter. This was said to be inconsistent with the "high standard" set by s 62 of the SIS Act: at [31] of the Federal Court Reasons. 230 I disagree with these conclusions. 231 I commence with the following legal propositions concerning s 62: (a) First, s 62 requires a fund to be maintained solely for a series of core and ancillary purposes. It is a question of fact for consideration in each year of income whether a fund is or is not so maintained. In this proceeding, the finding made below was an inference made by the judge from objective material. This is not a case where the primary judge's finding depended upon an evaluation of the credit of any witness. (b) Secondly, the purpose here is that of Aussiegolfa and not that of Mr Benson, save in his capacity as a director and controller of that entity. In Federal Commissioner of Taxation v Whitfords Beach Pty Ltd (1982) 150 CLR 355, Gibbs CJ (as his Honour then was) said at 370: …in deciding whether what was done was an operation of business, it is relevant to consider the purpose with which the taxpayer acted, and, since the taxpayer is a company, the purposes of those who control it are its purposes. In Ruhamah Property Co. Ltd. v. Federal Commissioner of Taxation [(1928) 41 CLR 148] the majority of the Court regarded as important, if not decisive, the purposes with which the shareholders and directors of the company acted, although Isaacs J., who dissented, thought it erroneous to consider a company merely as machinery for carrying out individual purposes [(1928) 41 CLR, at pp 160, 162, 166]. However, in my opinion Isaacs J. took too rigid a view of the effect of Salomon v. Salomon & Co. [[1897] AC 22] if he thought that in determining the purpose with which a company acted it was not permissible to have regard to the intentions of the directors who controlled it. (c) Thirdly, the subjective motivation of a controlling director is not to be confused with the purpose of the corporation he or she may control. (d) Fourthly, purpose in the context of s 62 looks to the object of acts of maintenance of a fund on a yearly basis. If those acts have the sole object of achieving the core purposes and/or ancillary purposes, the provision is satisfied: see Raymor Contractors Pty Ltd v Federal Commissioner of Taxation (1991) 21 ATR 1410 per Davies J at 1412 and Hill J at 1423. (e) Fifthly, the word "solely" may not add much to the statutory scheme. As Gibbs ACJ (as his Honour then was) observed in Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 at 644: "[t]he word 'solely' may do no more than add emphasis, or perhaps precision". (f) Sixthly, there is no necessary dichotomy between the maintenance of a fund for core and/or ancillary purposes and the receipt by a related person or entity of a benefit. In some cases, the conferral of a benefit may reveal the presence of a purpose which is collateral to the core and ancillary purposes defined by s 62. Investing directly in rental property which is leased to a relative for a peppercorn rent would justify an inference that there existed a collateral purpose. But if the rent paid is market value, and if the property otherwise constitutes a prudent investment, the personality of the tenant may not justify a similar inference. In such a case, the income and the assets of the fund are enhanced, or at least preserved, and the capacity of the fund to provide benefits to members in the future is not affected. Whether such an investment might otherwise be an in-house asset would require separate consideration. (g) The decision of the High Court in Driclad Pty Limited v Commissioner of Taxation (Cth) (1968) 121 CLR 45, supports the foregoing conclusion. As Moshinsky J has explained, that case relevantly concerned an application of the former s 23(j) of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) which exempted from tax the income of a fund established exclusively for the benefit of employees: see Compton v Commissioner of Taxation (Cth) (1966) 116 CLR 233. The fund in question lent money to, and invested in shares in, employer companies which had contributed to that fund for the benefit of their employees. The existence of these investments did not preclude satisfaction of s 23(j). (h) Seventhly, I do not think that it is necessarily of assistance to describe the criteria in s 62 as imposing a "strict standard" or a "high standard". The provision does not adopt such language. There is a danger that such descriptions can unduly influence the construction of a provision or its application to the facts. 232 To determine the existence of the collateral purpose found by the primary judge, attention should be drawn to certain aspects of the evidence. Mr Benson swore an affidavit in which he deposed that the decision to invest in property through the DomaCom Fund was made in February 2015. His evidence was as follows: In February 2015, my mother, brother, sister and I met at a family dinner at my mother's house. Jointly, we resolved to make residential property investments in the Melbourne area, particularly in student accommodation and other "relatively low-cost, relatively high-return" opportunities. My brother and sister set up their own self-managed superannuation funds shortly after the meeting. Because I had started work with the DomaCom Fund in the month before my February 2015 family meeting, I was well aware that fractional real property investment could be undertaken through the DomaCom structure. In March 2015, my family and I inspected a prospective studio apartment investment in a student accommodation complex located at Unit 1, 390 Burwood Highway, Burwood Victoria (the Burwood Property). Several features of the Burwood Property made it a suitable joint investment for members of my family if undertaken through the DomaCom Fund, including the ability to move unit investments around our family group. … Details of a proposed fractional investment in the Burwood Property to be made through Sub-Fund DMC0114AU of the DomaCom Fund are set out in a Supplementary Product Disclosure Statement dated 17 July 2015, a copy of which is annexed marked "[CAB-5]". The Supplementary Product Disclosure Statement provides that the Burwood Property as the asset underlying the proposed Sub-Fund DMC0 114AU would be acquired for the DomaCom Fund at a price of $104,000. This price was equal to a July 2015 valuation of the property plus acquisition costs of $4,886 amounting in total to approximately $109,000. Anticipated rental return was stated to be $847 per month net, less rates, insurance and other lessor's outgoings. This represented an annual rental return of approximately 6.5% on the sum invested. On 31 March 2015, as a director of Aussiegolfa Pty Ltd on behalf of the [Benson Family Superannuation Fund (the "BFSF")]. I completed and forwarded to the DomaCom Fund, an application for units in Sub-Fund DMC0114AU. … The BFSF paid $28,080 for 28,080 $1.00 units in the Sub-Fund on or about 2 April 2015. Initially, the BFSF initially invested $20,000. A further $8,080 was invested shortly after. DomaCom completed due diligence, contract review and valuation procedures in respect of the Burwood Property in July 2015. The property was sold by Peter Tyrikos to Perpetual Corp Trust Ltd (ACF) DomaCom Sub Fund on 21 July 2015 with settlement completed on 18 August 2015 for $104,000 (exclusive of ancillary costs). 233 At this point in the evidence, namely mid-2015, it could not be inferred that there existed a collateral purpose of conferring a benefit on a relative of Mr Benson. There was no plan at that stage to lease the Burwood Property to the daughter. Nor is there any reason to doubt that the investment was otherwise prudent, and was well suited to the provision of membership benefits in the future. 234 The property was initially leased to a student unknown to Mr Benson from 8 January 2016 until 23 January 2017. She paid a monthly rental of $869. It was not suggested that this was anything other than an arm's length sum. A second tenant, unknown to Mr Benson, leased the premises from 20 February 2017 until 15 February 2018. He paid the same rent. At this point in the evidence, again, it could not be inferred that there existed a collateral purpose of conferring a benefit on a relative of Mr Benson. 235 On 3 April 2017, the email, referred to above, was sent internally within DomaCom, by Mr Benson in his capacity as DomaCom's Victorian State Manager. It was not sent by Aussiegolfa. 236 Mr Benson's daughter became the third tenant in February 2018. She contracted to pay the same rent of $869. She is a student. The property is conveniently located for the purpose of her travelling to University. There is nothing to suggest, and it was not suggested, that there is something about the daughter that rendered her an unsuitable tenant. Throughout all this time, DomaCom, acting through agents, and not Aussiegolfa or Mr Benson, was responsible for letting out the Burwood Property. As Mr Laidlaw, the Executive Director and Chief Operating Officer of DomaCom, said in his affidavit: After Christopher Benson contacted DomaCom to propose the acquisition of the property known as Unit 1, 390 Burwood Highway, Burwood (Burwood Property), he had no involvement in the decisions or process regarding the acquisition of the property. DomaCom followed the same procedures in relation to this property as with any other property acquired for the DomaCom Fund. I know this as a result of having reviewed the DomaCom file with respect to the purchase of the Burwood Property. I can confirm that the "on-boarding" process was handled by DomaCom's Head of Property, who followed the same due diligence process as with the other 43 properties acquired to date for the DomaCom Fund. 237 At this final point in the narrative, in my opinion, it could not be inferred that there existed a collateral purpose of conferring a benefit on a relative of Mr Benson. The Benson Fund continued to be maintained for core and ancillary purposes, as defined. It remained invested in a suitable property from which it continued to receive an appropriate return for the purposes of funding the provision of membership benefits into the future. In the circumstances of this case, the personality of the tenant is irrelevant to the Fund's ability to meet its core and ancillary purposes, as defined by s 62 of the SIS Act. 238 In these circumstances, I disagree with the finding made by the primary judge below at [31] that "a purpose of Aussiegolfa in acquiring the units in the DomaCom Fund was to provide accommodation to a relative of [Mr] Benson" for the following four reasons. 239 First, that finding was not open on the evidence that in 2015 the Benson family had made a decision to invest in "student accommodation and other 'relatively low-cost, relatively high-return' opportunities" through a DomaCom sub-fund with a return of approximately 6.5%. The decision to lease the Burwood Property to the daughter was not made until 2017. That decision could not explain the purpose of acquiring the units in 2015. The explanation given by Mr Benson for investing, set out above, makes no reference to leasing the property to his daughter as a reason for subscribing for units in the Burwood Sub-Fund. 240 Secondly, upon the Custodian, on behalf of the Responsible Entity, entering into a lease in 2018 with the daughter, it could said that a purpose of the Responsible Entity was to supply accommodation to a relative of Mr Benson. That purpose, however, was a purpose of that entity, and not that of Aussiegolfa as trustee of the Benson Fund. 241 Thirdly, I am also not persuaded that "benefits", in the sense that the word is used in the Explanatory Memorandum to the Superannuation Legislation Amendment Bill (No. 4) 1999, supra, were conferred on the daughter. Of course, in one sense, she obviously got a benefit in the form of student accommodation. Whenever a person purchases property or services it can be said that he or she obtains a benefit. But the SIS Act, and in particular s 62, is not concerned with that type of benefit. When a fund is established to invest for the purposes of providing superannuation benefits for its members in the future, the concern is with the protection of that fund from dissipation so that the fund fulfils its function and purpose. Thus, when a benefit is conferred which imperils a fund so exclusively dedicated, the presence of a collateral purpose is likely to exist. Generally speaking, this is the type of benefit with which s 62 is concerned. Here, the continued payment by the daughter of market rent did not diminish or threaten the capacity of the Benson Fund to provide superannuation benefits to its members in the future. It continued to receive the same return from this investment. 242 Finally, it is not clear to me whether Mr Benson was or was not cross-examined about his, or Aussiegolfa's purpose, concerning the lease of the Burwood Property to his daughter (the transcript was not before us). In those circumstances, it may perhaps be doubted whether the email sent by Mr Benson can be attributed to Aussiegolfa as an expression of its corporate intent. It is true that Mr Benson was a director of that entity and probably controlled it. But the email comprised an internal DomaCom Fund communication written, it would appear, by Mr Benson in his capacity as an employee of that Fund. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Steward.