Chrissie Group Pty Ltd atf All Angels Family Trust v Chief Commissioner of State Revenue

The Statutory Provisions

Both the agreement for sale and the transfer are dutiable transactions (ss 8(1)(b)(i) and 8(1)(a) of the Duties Act 1997 (NSW) (DA)). Section 18 of the DA is designed to relieve double duty in certain situations. Section 18(2) of the DA provides for nominal duty ($10.00) on the transfer if it is in conformity with the agreement, and the agreement has been stamped.
Relevantly here s18(3) of the DA provides for relief in some situations where the transfer is not in conformity with the agreement. The sub-section provided at the relevant time: (3) The duty chargeable in respect of a transfer of dutiable property that is not made in conformity with an agreement for the sale or transfer of the dutiable property is $10 if: (a) the duty chargeable in respect of the agreement has been paid, and (b) the transfer would be in conformity with the agreement if the transferee was the purchaser under the agreement, and (c) the transfer occurs at the same time as, or proximately with, the completion or settlement of the agreement, and (d) at the time the agreement was entered into, and at the completion or settlement of the agreement: (i) the purchaser under the agreement (other than a purchaser who purchased as a trustee) and the transferee under the transfer were related persons, or (ii) if the purchaser purchased as a trustee (other than as a trustee of a self managed superannuation fund)--the transferee and the beneficiary were related persons.
The Chief Commissioner accepts that ss 18(3)(a)-(c) are satisfied. He does not rely on s 18(3)(d)(ii) because the purchaser (Mrs Akkari) did not purchase as trustee, but in her own name.
The Chief Commissioner's position is that s 18(3)(d)(i) is not satisfied as Mrs Akkari and Chrissie Group Pty Ltd were not "related persons". The Dictionary in the DA defined "related person" as follows: "related person" means a person who is related to another person in accordance with any of the following provisions: (a) natural persons are related persons if: (i) one is the spouse or de facto partner of the other, or (ii) one is the parent, brother or sister of the other, or (iii) one is the spouse, or de facto partner, of a parent, child, brother or sister of the other, (b) companies are related persons if they are related bodies corporate, (c) a natural person and a private company are related persons if the natural person is a majority shareholder or director of the company or of another private company that is a related body corporate, (d) a natural person and a trustee are related persons if the natural person is a beneficiary of the trust (not being a public unit trust scheme or discretionary trust) of which the trustee is a trustee, (e) a private company and a trustee are related persons if the company, or a majority shareholder or director of the company, is a beneficiary of the trust (not being a public unit trust scheme or discretionary trust) of which the trustee is a trustee

Consideration

The guiding principles of statutory interpretation have been laid out by the High Court of Australia in cases such as Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355 and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [47] and reiterated numerous times and in numerous places since.
In Project Blue Sky their Honours McHugh, Gummow, Kirby and Hayne JJ. said at pars [69] - [71]: "The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent." (footnotes omitted).
Their Honours went on at par 78: "However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation, Mr Francis Bennion points out: "The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with." (footnotes omitted)"
I must consider the text of the statutory provision itself in the first instance; and seek its meaning by reference to the context in which it sits.
The introductory words of the definition of 'related person' say that if "any" of the following provisions apply the persons are related. The words of par (c) of definition of "related person" seem clear. The Applicant and Mrs Akkari satisfy par (c) of the definition and so by that provision of the definition they are "related".
The issue is whether the context requires the clear, natural meaning of these words to yield to another provision which deals with the relationship between a natural person and a trustee.
The words of s 18(3)(d)(ii) DA provide specifically for a situation where the transfer is not in conformity with the agreement when a purchaser has purchased as trustee, but transferee and beneficiary of that trust are related persons. It would have been straight forward to provide similarly a specific exception from pars (a) - (c) in the definition of 'related person' for persons acting in the capacity of trustee.
At another time, it may have been appropriate to have regard to interpretational approaches to revenue laws which for example construed taxation provisions strictly; or which were reluctant to accept an approach which resulted in double taxation in the absence of clear words.
These approaches are now outmoded (and were of limited utility in the stamp duty arena anyway); taxing provisions are subject to the same interpretational principles as other statutes (see Alcan (NT) above at [57]). There is no longer anything "special" about the interpretation of words of a revenue statute (see e.g. Deputy Federal Commissioner of Taxation v Chant (1991) 24 NSWLR 352 at 356 per Kirby P.)
Nor does this seem to be a case which calls for the application of the approach adopted in cases such as Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation. (1981) 147 CLR 297; [1981] HCA 26. There does not appear to be such an obvious drafting error in the definition which should be resolved by reading apparently omitted words into the provision to cure an absurdity.
In the end result (and not without hesitation) I prefer the approach urged on me by the Chief Commissioner because it seems to me that there was a purpose in the definition of 'related persons' to address the 'mischief' that could result from allowing the use of discretionary trusts in cases where a purchaser e.g. wished to make a 'subsale'. Although it could have been expressed more clearly, the definition does draw a distinction between the various capacities in which persons are acting in defining them as 'related'. It contains a provision which particularly deals with trustees as related persons. It is unfortunate that in this case that the purchasers did not give closer attention to their exposure to stamp duty, as it does not seem that there was any 'mischievous' purpose involved. Despite a perception of harshness in the sense of a double duty liability it is my view that this is an appropriate case for application of the rule of interpretation that the special overrides the general.
The Tribunal was referred on this issue to the statement of Deane J in Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat & Livestock Corp & Ors (1980) 29 ALR 333 at 347; [1980] FCA 45 where His Honour discussed the situation of repugnancy between a general and a special provision and said: "Repugnancy can be present in cases where there is no direct contradiction between the relevant legislative provisions. It is present where it appears, as a matter of construction, that special provisions were intended exhaustively to govern their particular subject matter and where general provisions, if held to be applicable to their particular subject matter, would constitute a departure from the intention by encroaching on that subject matter".
It seems to me that it would be repugnant to the purpose of par (d) of the definition of 'related person' (which prevents trustees of discretionary trusts from being related to other persons) to carve out a wide group of entities (private companies acting as trustees) simply because the directors and shareholders met the literal words of par (c) of the definition.

At a glance

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Judgment (8 paragraphs)

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Legislation Cited (2)

Cases Cited (8)