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1. This appeal arises from a decision of the Commissioner for ACT Revenue (the Commissioner) to treat share transactions in a trustee company as an acquisition of valuable property for the purposes of the Duties Act 1999 (ACT) (the Duties Act (ACT)). As a consequence of that treatment, Ms Mary O’Neill and Mr William O’Neill (the O’Neills) were ultimately issued with notices requiring them to pay a combined total of duty, including penalty tax, exceeding $1 million.

2. The O’Neills are property developers who established the O’Neill Family Trust (the Trust). Prior to January 2013, the trustee was Signature Enterprises Pty Ltd (Signature) and Mr O’Neill was its sole director. After that date, Five27 Pty Ltd (Five27) became the trustee and the O’Neills its directors. Five27’s single share was owned by Signature and the two shares in Signature were owned by Five27.

3. Five27 owned all shares in Bond Projects Group 1 Pty Ltd (Bond 1) and in 2017, Bond 1 applied for a loan from the National Australia Bank (the NAB). However, after assessing the loan request, the NAB identified the share arrangement between Five27 and Signature was prohibited by s 259D of the Corporations Act 2001 (Cth). To address the “circularity problem”, on 24 November 2017, Signature transferred its single share in Five27 to Mr O’Neill and Five27 issued a second share to Mrs O’Neill (the share transactions). The O’Neills thereafter each owned one of the two shares in Five27 and the NAB proceeded to approve Bond 1’s loan application.

4. On 11 October 2019, the Commissioner issued a notice to the O’Neills seeking information about the share transactions pursuant to s 82 of the Taxation Administration Act 1999 (ACT) (the Tax Admin Act). After considering the information, the Commissioner issued a notice on 17 April 2020 for the O’Neills to pay duty of $1,315,375.50 as Five27 was a “landholder” who made a “relevant acquisition” under s 85 of the Duties Act (ACT). On 16 June 2020, the O’Neills objected to this assessment and on 2 February 2021, a revised notice was issued in the amount of $1,046,106.58. Once again, the O’Neills raised an objection on 14 May 2021. A delegate of the Commissioner disallowed the objection on 26 October 2022 (the Reviewable Decision).

5. The O’Neills filed proceedings in the ACT Civil and Administrative Tribunal (the Tribunal) contesting the Reviewable Decision on 23 November 2022. They also sent a letter to the Commissioner that day, requesting he exercise his discretion under s 95(3) of the Duties Act (ACT) to extend the time for reacquisition of the shares in the share transactions.

6. After the Tribunal hearing, but prior to delivery of its decision, the ACT Legislative Assembly amended the Duties Act (ACT) to repeal s 95(3) and replaced it with a new regime which commenced on 1 July 2024. The Tribunal delivered its decision on 9 August 2024, allowing an extension of the time for reacquisition of the shares under the repealed s 95(3). The matter was then removed under s 83 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) to this Court.

7. The questions arising for my determination are, essentially, whether the repeal of s 95(3) removed the O’Neills’ ability to seek an extension, and whether Five27 made a “relevant acquisition” under s 85. For the reasons which follow, the answer to each question must be “no”.

The tax treatment of the share transactions

8. On 11 October 2019, the Commissioner issued a notice to each of the O’Neills pursuant to s 82 of the Tax Admin Act, seeking information regarding the share transactions.

9. Section 82 provides: 82 Power to require information, instruments or records or attendance for examination (1) The commissioner may, for a purpose related to the administration or enforcement of a tax law, by written notice given to a person, require the person— (a) to provide to the commissioner (either orally or in writing) information that is described in the notice; or … (2) If a notice to a person under subsection (1) is made to determine that person’s tax liability, the notice must state that the requirement is made for that purpose, but the commissioner is not otherwise required to identify a person in relation to whom any information, evidence, record or other document is required under this section. (3) The commissioner— (a) may specify whether information or evidence to be provided or given under this section must be given orally or in writing; and (b) may require any information or evidence given in writing to be in the form of, or verified by, a statutory declaration; and (c) may require any information or evidence given orally to be given on oath or affirmation. Note 1 The Statutory Declarations Act 1959 (Cwlth) applies to the making of statutory declarations under ACT laws. Note 2 It is an offence to make a false or misleading statement, give false or misleading information or produce a false or misleading document (see Criminal Code, pt 3.4). (4) A person must not, without reasonable excuse, fail— (a) to comply with the requirements of a notice under this section within the period specified in the notice or any further period allowed by the commissioner; or (b) to comply with any other requirement of the commissioner about the giving of evidence or how information or evidence is to be provided or given under this section. Maximum penalty: 50 penalty units.

10. Relevantly to the consideration of the matter by the Commissioner as further set out below, ss 82, 85 and 95 of the Duties Act (ACT) (as they were at the time of the assessment) provide: 82 Constructive ownership of landholdings and other property—discretionary trusts … (2) A beneficiary of a discretionary trust is taken to own or to be otherwise entitled to the property the subject of the trust. (3) For this part, any property that is the subject of a discretionary trust (the primary trust) is taken to be the subject of any other discretionary trust— (a) that is a beneficiary of the primary trust; or (b) any trustee of which (in the capacity of trustee) is a beneficiary of the primary trust. (4) Subsection (3) extends to apply to property that is the subject of a discretionary trust only by the operation of that subsection. (5) However, subsection (2) or (3) does not apply in a particular case if the commissioner— (a) is satisfied that the application of the subsection would be inequitable; and (b) determines, in writing, that the subsection does not apply. … 85 When does liability for duty arise? A liability for duty payable under this part arises when a relevant acquisition is made. 95 Duty concession—acquisitions securing financial accommodation (1) Subsection (2) applies if— (a) the person lodging an acquisition statement under this part in relation to the acquisition of an interest in a landholder tells the commissioner when the statement is lodged that the acquisition is effected for the purpose of securing financial accommodation; and (b) the commissioner is satisfied that the acquisition is effected for that purpose. (2) Duty under this Act is not payable in relation to the statement so far as it relates to the acquisition, except as provided by subsection (3). (3) Duty is payable in relation to the statement at the end of the period of 5 years after the date of the acquisition (or the longer period that may be determined by the commissioner in the particular case) if the interest concerned is not— (a) reacquired by the person from whom it was acquired; or (b) for an acquisition by way of mortgage—conveyed by the mortgagee to a third person in exercise of the mortgagee’s power of sale; within that period (or that longer period). (4) Section 86 does not apply to the reacquisition by a person of the interest concerned.

11. After receiving correspondence from the O’Neills, the Commissioner issued landholder duty notices of assessment to each of them on 17 April 2020 and, following the lodgement of objections, revised notices on 2 February 2021. On 14 May 2021, the O’Neills lodged objections to the revised notices. The Commissioner’s rejection of the O’Neills’ objections became the Reviewable Decision that was before the Tribunal.

12. It is appropriate to highlight certain aspects of the Commissioner’s reasons statement which was attached to the Reviewable Decision where the Commissioner determined, relevantly: (a) Each of the acquisitions by the O’Neills of the shares in Five27 constituted a “relevant acquisition” of an interest in a landholder, within the meaning of s 85 of the Duties Act (ACT). (b) In the absence of a finding that it would be inequitable for the deeming provision in s 82(2) of the Duties Act (ACT) to apply: (i) Five27 is deemed to own the ACT properties held by it as registered proprietor on trust for the Trust. (ii) Section 90 of the Duties Act (ACT) sets out how duty is calculated in respect of those land holdings. (iii) Entities in respect of which Five27 owns at least 50% of the shares are, by virtue of s 81, “linked entities” of Five27 such that the Trust is taken to hold an interest in land held by those linked entities. (c) Immediately before the share transactions, Five27 was already a landholder as it was a beneficiary of the Trust, being a discretionary trust which held land in the ACT. While on 5 November 2019, the trust deed was varied so a trustee could not be a beneficiary of the Trust, that was not the case at the time of the share transactions. (d) An exemption to the liability for duty arises under s 95 of the Duties Act (ACT) if the subject acquisition is temporarily made for the purpose of securing financial accommodation. The matters to be satisfied before the exemption will apply are: (i) The Commissioner is told at the time of lodging the acquisition statements that the acquisitions were effected for the primary purpose of securing financial accommodation. (ii) The Commissioner must be satisfied that is the case. (e) In this case, the O’Neills failed to advise the Commissioner the transactions were effected for the purpose of securing financial accommodation until more than four years after the acquisition statements were due, and after a number of missed earlier opportunities to communicate the same. The Commissioner was therefore not satisfied the requirement for exemption was met. (f) The O’Neills’ reliance in their objection on Commissioner for ACT Revenue v Francey [2014] ACAT 67; 99 ATR 560 was misplaced. In Francey, the Tribunal set aside the Commissioner’s decision to impose duty on the acquisition of shares because the applicant already beneficially held the relevant interest pursuant to an option deed. However, in Francey, the shares in the landholder were held on a constructive trust for the taxpayer, being a trust that is both remedial in origin and nature. Here, the trust was discretionary and there was no basis for inferring a constructive trust in favour of the O’Neills. (g) This was not an appropriate matter in which to exercise the discretion in s 82(5) of the Duties Act (ACT). The decision in Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue [2015] NSWSC 68; 89 NSWLR 43 supports the proposition that lack of an intent to avoid tax, on its own, is not a sufficient basis for the exercise of the discretion. In Milstern, the landholder did not have any ownership or control of the land and did not have any expectation of receiving the land, or any proceeds of the sale of any part of the land, or any income from it. The situation of the O’Neills is distinguished because: (i) The entity in which the shares were acquired exercises significant control over the land, the subject of the trust; and (ii) the acquisition gave the O’Neills additional control over Five27 as shareholders, including the right to appoint directors. (h) The focus in s 82(5) of the Duties Act (ACT) is not whether the application of the entirety of ch 3 of the Act would in the circumstances be inequitable, but whether the application of s 82(2), which deems the beneficiary of a trust to own the property the subject of the trust, would be inequitable. In this regard, the Commissioner referred to the case of Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773; 108 ATR 63. The following is a short summary: (i) Following the death of his mother, Mr Winston-Smith received a 100% shareholding in Company A and a 50% shareholding in Company B. The other 50% of Company B was owned by Company A. Mr Winston-Smith then wound-up Company A and asserted it would be inequitable for duty to be payable on his acquisition of the remaining 50% share in Company B. The Court determined the acquisition meant his control over Company B had not changed. Rather, a layer between Mr Winston-Smith and Company B had been removed by reason of the acquisition. (ii) However, in considering whether it was “just and reasonable” under s 163H of the Duties Act 1997 (NSW) (the New South Wales (NSW) equivalent to s 82(5) of the Duties Act (ACT)) to exempt Mr Winston-Smith from duty, the Court determined it was not. The Court determined that after acquiring the remaining share in Company B following it being wound up, Mr Winston- Smith would be entitled to the distribution of the whole of the land held by Company B for himself. Further, if the land was directly transferred to him, duty would have been payable anyway. In those circumstances, imposing duty would not result in a greater amount payable and so it was not just and reasonable for an exemption to apply. (iii) The Court closely considered the case of Milstern in its decision, but ultimately distinguished it, given the lack of practical benefit received by the plaintiff in Milstern. (i) The Commissioner also referred to the case of Gu v Chief Commissioner of State Revenue (NSW) [2020] NSWCATAD 75. The following is a short summary: (i) DA Property Group owned blocks of land in NSW. In 2014, 99 shares in DA were transferred from Mr Gu to Mr Gu and Ms Zhang as trustees of a family trust. The transaction was assessed as being liable for duty. In rejecting Mr Gu and Ms Zhang’s claim for exemption, the NSW Civil and Administrative Tribunal found Mr Gu’s reliance on the following circumstances to not enliven the discretion under s 163H: (A) He had received incorrect advice from an accountant. (B) He did not have an intention to avoid duty. (ii) In Gu, Senior Member Higgins considered whether in the transaction, Ms Zhang had an intention to avoid paying duty. The Senior Member accepted Ms Zhang intended to control shares in the company’s property for profits to be preserved in her favour if she divorced Mr Gu. However, the Senior Member nonetheless found the practical consequence of her intention was a change to the way the property would be enjoyed, i.e., she would have profits in her favour. Accordingly, there was a sufficient practical benefit to Mr Gu and Ms Zhang to prevent the exercise of the s 163H discretion and duty was applied. (j) The penalty tax and interest applied by the Commissioner is not to be remitted to the O’Neills because: (i) The relevant acquisitions were made on 24 November 2017 and the O’Neills were required to lodge acquisition statements and pay duty within 90 days. (ii) Acquisition statements were not lodged until 5 November 2019, and the full duty was never paid. (iii) In relation to the O’Neills’ assertion they were not aware of their duty liabilities, the Commissioner referred to Steele v Commissioner for ACT Revenue (Administrative Review) [2010] ACAT 15, where it was stated that the taxpayer needs to ascertain what tax liabilities may exist. (iv) Further, in relation to the O’Neills’ assertion as to their engagement of accountants to advise on the relevant share transactions, the Commissioner referred to Van Duren v Commissioner for ACT Revenue [2016] ACAT 121 in finding the taxpayer’s obligation to ascertain their tax liabilities is not negated nor shifted to an agent where such an agent is engaged. (v) In relation to interest, the Commissioner highlighted the high threshold for remitting interest to ensure equity amongst taxpayers. The Commissioner determined the threshold was not met. (vi) In conclusion, the Commissioner said: I note that under the law the onus remains on taxpayers to be aware of their tax liabilities. I do not consider the reasons provided to be exceptional circumstances such that it would be appropriate to remit interest or penalty tax, particularly noting that the liability was only identified as the result of an investigation from this Office. The decision of the Tribunal

13. The grounds for review relied upon in the Tribunal by the O’Neills are set out at [38] of O’Neill v Commissioner for ACT Revenue (Administrative Review) [2024] ACAT 55: (a) Ground 1 – for the reasons set out in Francey, the share transactions fell outside the scope of ch 3 of the Duties Act (ACT). (b) Ground 2 – the Commissioner erred in refusing to accept the share transactions did not attract duty by operation of s 95 of the Duties Act (ACT). (c) Ground 3 – the Commissioner erred by not exercising his discretion under s 82(5) of the Duties Act (ACT) not to deem Five27 to be an owner of the property (including land) held by the Trust. (d) Ground 4 – the reassessments overstate the dutiable value of the relevant property pool. (e) Ground 5 – the reassessments wrongly included liability to pay duty in respect of a property in Moncrieff, ACT which, by the proper application of s 81(2)(a) of the Duties Act (ACT), falls outside the scope of ch 3 of the Act. (f) Ground 6 – the Commissioner erred in refusing to exercise his discretion to remit penalty tax pursuant to ss 31(5) or 37 of the Tax Admin Act.

14. The Commissioner did not contend that any of the grounds relied upon were not available on the review.

Share transactions outside the scope of ch 3 based on Francey (Ground 1)

15. Before the Tribunal, the parties agreed there was a real question arising from the decision in Francey as to the capacity of the Tribunal to find the existence of a constructive trust, that being an exercise of equitable jurisdiction not possessed by the Tribunal. For that reason, the O’Neills relied upon the decision as no more than analogous to their circumstances.

16. The O'Neills submitted they were, before the subject share transactions, already eligible beneficiaries under the Trust’s deed, with substantive, if not complete, control over distributions from the Trust by reason of their directorship of Five27. As a consequence, they did not, by becoming owners of the shares in Five27, gain any benefit they did not already have. The Commissioner argued Francey should be distinguished because it turned almost entirely on the factual finding of the existence of a constructive trust.

17. The Tribunal agreed with the Commissioner and therefore concluded Francey had no application to this case. As such, they were not satisfied the transactions fell outside the scope of ch 3.

18. The O’Neills do not seek to further ventilate the matter before this Court.

Section 95 - duty concession (Ground 2)

19. The Tribunal noted the following matters as relevant to whether the exemption under s 95 applied: (a) Whether the time for lodging an acquisition statement under s 87 is essential. (b) The meaning of “securing financial accommodation”, and whether the relevant transaction in this case was indeed done for this purpose. (c) When must the purpose of securing financial accommodation be notified. (d) Under what circumstances the discretion to extend the five-year period for reversing transactions should be exercised, and if it should be exercised in this case.

20. In relation to (a), the Tribunal agreed with the interpretation in Li v Commissioner for ACT Revenue [2024] ACAT 24, where it was held the timeframe for lodging an acquisition statement under s 87 of the Duties Act (ACT) is not a mandatory requirement in the sense that the failure to lodge within the required timeframe will result in the unavailability of the s 95 exemption. In this case, where the O’Neills advised the Commissioner prior to lodging the acquisition statements their purpose for acquiring an interest in Five27 was to secure financial accommodation, the first requirement for the application of s 95 was met.

21. In relation to (b), the Tribunal noted the first task was the determination of the meaning of the word “securing” in this context. The O’Neills said it meant obtaining finance, whereas the Commissioner contended it meant protecting finance from risk of loss. The Tribunal agreed with the Commissioner.

22. In relation to whether the purpose of this acquisition was protecting finance from risk of loss, the Tribunal accepted at [90] where an acquisition occurred for more than one purpose, the “dominant, motivating or causal purpose for the acquisition must be securing financial accommodation”.

23. After considering all of the evidence, the Tribunal determined the share transactions were for the purpose of securing financial accommodation. In reaching this conclusion, the Tribunal found where the identified circularity problem was contrary to the Corporations Act, and needed to be fixed, the “purpose”’ of the share transactions was to answer the NAB’s concerns and the concerns were answered (via the share transactions) for the purpose of securing financial accommodation for the proposed development.

24. In relation to (d), the Tribunal noted the Commissioner’s ultimate submission that an extension should not be granted to the O’Neills, as they had decided not to effect re-acquisition within the five-year period, for “commercial reasons”. The O’Neills disputed this characterisation, stating the reason for the failure to complete the re-acquisition was the existing shareholding arrangement supporting various financing facilities, resulting in further time being required to negotiate alternative arrangements with the respective financial institutions. Further, the O’Neills submitted their concern a further transaction would attract further duties was another reason for awaiting the outcome of an assessment before acting.

25. In response to a contention from the Commissioner that any re-acquisition would again render the O’Neills in breach of s 259D of the Corporations Act, the Tribunal considered this concern to be “misconceived”, as the O’Neills would have a further 12 months within which to rectify the issue, and there were reasonable alternative arrangements available to the O’Neills to enable them to avoid the issue.

26. I note the Tribunal made no finding or comment in relation to point (c).

27. In concluding their findings as to Ground 2, the Tribunal said at [118]: Where we are satisfied the purpose of the Transactions was to secure financial accommodation and we accept it is appropriate to grant an extension of time for the shares to be reacquired, we will make an order extending the time for re-acquisition to a date three months after the date of publication of our decision. Section 82(5) - the non-application discretion (Ground 3)

28. Ground 3 relates to the application by the Commissioner of s 82 of the Duties Act (ACT) in such a manner as to deem Five27, an entity which was listed as a beneficiary of the Trust, to own the land that is the property of the trust. The O’Neills contended such an action would be “inequitable” as per s 82(5) of the Duties Act (ACT). Given the significant landholdings of the entities held by Five27, a determination of the deemed ownership of these entities under s 82 is significant in its impact on the assets to which an assessment of duties is based.

29. The first issue was the meaning of “inequitable” within s 82(5). Given the relative lack of authority on the point, the O’Neills referenced the comparable NSW provision at s 163H of the Duties Act (NSW), which uses the phrase “not just and reasonable” in a similar context. In this regard, the O’Neills referenced the case of Milstern, where White J concluded at [53]: The question is whether it is not just and reasonable that Ch 4 apply to the acquisition by Nominees of the shares in Enterprises where Enterprises as a matter of fact does not own or control the land, or have any expectation of receiving the land or any proceeds of sale of any part of the land, or any income from it. The question is to be assessed against the background that Enterprises’ position as a discretionary object of the Landsell Trust was irrelevant to Nominees’ acquisition of the shares in Enterprises. In those circumstances I consider that it is not just and reasonable that Chapter 4 apply to the acquisition.

30. In summarising the outcome in Milstern, the Tribunal observed at [130]: The Court found that in circumstances, where the shares were acquired in an eligible corporate beneficiary which did not beneficially own the land and did not have any expectation of receiving it, and where the fact that the company was an eligible beneficiary was irrelevant to the decision to acquire shares in it, it would not be just and reasonable to apply duty.

31. In consideration of the principle in Milstern that all the circumstances must be considered when assessing whether it would be just and reasonable (or “inequitable”) to deem Five27 to be an owner of all the land held under the Trust, the O’Neills relied on the following circumstances: (a) No substantial benefit, nor any further control, was obtained because of the share transactions. (b) Ad valorem duty was paid on the acquisition of the various properties held within the Trust. (c) If the Tribunal is not satisfied the transactions are exempt by reason of s 95, the absence of the exemption due to technical or formality failure is a factor to take into account in consideration of s 82(5). (d) The purpose of the transactions was to resolve the NAB’s enquiries regarding beneficial ownership and no benefit was derived from the share transactions. Whilst Five27 was previously a beneficiary of the Trust, the O’Neills were not aware of this at the time the share transactions occurred, and as a result of a deed of variation dated 5 November 2019, Five27 is an “excluded person” for the purposes of distributions from the trust. (e) When executing the share transactions, the O’Neills relied on advice from accountants and would have been quite content not to have entered into the transactions so long as funding for the development was obtained. (f) There is limited judicial authority on point and there was no publication from the Commissioner available to the O’Neills regarding liability for duty under s 82.

32. The Commissioner also relied on Winston-Smith. In considering the application of these cases to the facts at hand, the Commissioner submitted: (a) The correction of the circularity problem was a practical benefit. (b) The ability for the O’Neills to arrange their federal tax affairs by utilising their control of Five27 following the relevant acquisition was a further practical benefit. (c) A practical benefit may have arisen from Signature transferring its shares in Bond 1 to Five27 as it would have enabled the O’Neills to access funds by allowing Bond Projects to loan funds directly to the Trust.

33. In relation to the balance of the O’Neills’ arguments regarding the application of s 82, the Commissioner submitted: (a) The contention regarding ad valorem duty having already been paid on the property is misconceived, as s 90(3) provides for a reduction of duty, but not in relation to duty imposed under a different chapter of the Duties Act (ACT). (b) As to whether a technical or formality failure regarding s 95 was a circumstance to be considered in the application of s 82, the Commissioner pointed to the asserted purpose of the acquisition, being to address the circularity problem, noting that s 95 is not unavailable because of a technical or formality failure, but rather because the substantive purpose of the acquisition was not to secure financial accommodation. (c) As to the purpose of the acquisition being to resolve the NAB’s issue as to the circularity problem, the Commissioner noted, consistent with the non-applicability of s 95, the purpose of the share transactions was simply to resolve the circularity problem, regardless of the NAB’s issue. (d) As to reliance on professional advice in engaging with duty consequences, the Commissioner contended the onus is on the O’Neills to be aware of and comply with their tax obligations and appointment of a third party did not relieve them of this obligation.

34. On the issue of practical benefit, the O’Neills submitted avoidance or minimisation of federal tax was not a concern of the Commissioner and further noted the level of control over Five27 was the same after the acquisition as it was beforehand.

35. Ultimately, the Tribunal found in favour of the O’Neills in determining it would be inequitable to apply s 82(2) of the Duties Act (ACT) so as to deem Five27 to be a landholder in this case. In particular, the Tribunal relied on the following matters: (a) Whilst caution is to be exercised in relation to the use of comparable legislation in other jurisdictions, the principles for deciding whether to grant an exemption (the “not just and reasonable” and “inequitable” tests) are the same in the ACT as in NSW, because the outcome is the same. (b) The O’Neills did not derive any practical or economic benefit from the share transactions. In this regard, and in consideration of the principles enunciated in Winston-Smith and Milstern regarding the control exercised over the entities, the Tribunal said at [167]: We acknowledge the applicants’ control before the Transactions was an amalgam of directorship and direct and indirect shareholding, whereas control after the transactions was available through direct shareholding of Five27, but this does not affect the effectiveness of the control: they were and remained the sole directors of Five27 and so were able to control the trust. (c) Whilst the share transactions resolved the circularity problem, which was a benefit as there was no longer a breach of the Corporations Act, the benefit was not of such a degree that duty should be paid on the transactions, especially in circumstances where the circularity problem could have been rectified in ways that did not attract a duty.

Grounds 4, 5 and 6

36. Given the Tribunal’s findings summarised above, Grounds 4, 5 and 6 were not considered.

Grounds of Appeal before this Court

37. The grounds of appeal before this Court are: (a) Ground 1 - The Tribunal erred in finding an acquisition must be “part of a process for securing a loan or other financial accommodation from risk” and it is sufficient for the purposes of s 95 of the Duties Act (ACT) if the sole or dominant purpose of the acquisition is to fulfil “part of the process leading to the securing of financial accommodation”. (b) Ground 2 - The Tribunal erred in finding the share transactions were for the purposes of securing financial accommodation. Having found the word “securing” in the phrase “securing financial accommodation” in s 95 of the Duties Act (ACT) means securing in the sense of “protecting financ[e] from risk of loss” and not “obtaining finance”, the Tribunal ought to have found the acquisition was not “effected for the purpose of securing financial accommodation” for the purposes of s 95 of the Duties Act (ACT). (c) Ground 3 - The Tribunal erred in extending time for the shares to be reacquired (pursuant to s 95(3) of the Duties Act (ACT)) when, at the time the Tribunal’s decision and orders were made, s 95 of the Duties Act (ACT) had been repealed. (d) Ground 4 - The Tribunal erred in finding the criteria for satisfaction in s 85(2) of the Duties Act (ACT) are the same as in s 163H of the Duties Act (NSW) and that the decision of the NSW Supreme Court in Milstern applied. (e) Ground 5 - In the alternative to Ground 4 that: (i) The Tribunal erred in distinguishing the NSW Supreme Court’s decisions in Winston-Smith and the appeal which upheld that decision in Winston-Smith v Chief Commissioner of State Revenue (NSW) [2019] NSWCA 75 (the Winston-Smith (Appeal)). (ii) The Tribunal erred in finding no one, and in particular the O’Neills, derived any practical or economic benefit from the share transactions and those transactions did not create a benefit that did not already exist. (iii) The Tribunal erred in treating the O’Neills together without differentiating them and failed to have regard to the different factual circumstances relating to Mrs O’Neill. The Tribunal ought to have found that, before Five27 issued the share to her, Mrs O’Neill was not a shareholder in Five27 and was not a shareholder in any entity having a shareholding in Five27. Thus, by reason of the issue of the share to her, she obtained a practical and economic benefit from the share transactions. (f) Ground 6 - The Tribunal erred in finding it would be inequitable to apply s 82(2) of the Duties Act (ACT) so as to deem Five27 to be a landholder.

Submissions on the construction of s 95 of the Duties Act (ACT) (Grounds 1-3)

38. Grounds 1, 2 and 3 concern the Tribunal’s statutory construction of s 95 of the Duties Act (ACT).

Part of a process (Ground 1)

39. The Commissioner submits the Tribunal did not ask itself the correct statutory question under s 95(1)(a). The question is whether an acquisition is effected “for the purpose of securing financial accommodation”. Instead, the Commissioner says the Tribunal added a “gloss” on s 95(1)(a) by asking whether an acquisition was “part of the process for” and “part of the processes leading to” securing financial accommodation. The Commissioner says the “gloss” led to an erroneous finding as to the status of the share transactions.

40. The O’Neills submit that s 95(1)(a) provides a “purpose test” drafted in such a way as to encompass transactions which are an “essential part somewhere along the way” to being able to secure financial accommodation. The language of s 95(1)(a) is not confined to examining whether a transaction will enable the instant or actual securing of the financial accommodation.

For the purpose of securing financial accommodation (Ground 2)

41. The Commissioner submits the Tribunal’s finding about the share transactions’ purpose is inconsistent with its construction of “securing” in s 95(1)(a). He accepts the Tribunal’s construction of “securing” as “protecting finance from risk of loss”, not “obtaining finance”. The provision is concerned with capturing those transactions which make the financial accommodation more secure. In the light of that interpretation, the Tribunal’s subsequent finding as to the purpose of the transactions is “inexplicable”.

42. The O’Neills frame Ground 2 as a contest over fact finding, which requires the Court to conclude an error has been demonstrated rather than merely a different conclusion should be drawn: House v The King [1936] HCA 40; 55 CLR 499. In any case, the O’Neills submit no error is disclosed in the Tribunal’s reasoning.

Applicability of s 95(3) (Ground 3)

43. The Commissioner says a finding on Ground 3 in its favour disposes of the appeal in respect of Grounds 1 and 2. He submits the Tribunal erred in extending the time for the shares to be reacquired under s 95(3) of the Duties Act (ACT) when that provision had been repealed at the time the Tribunal’s decision and orders were made. There must be an “accrued substantive right” which existed at the point of the provision’s repeal. The Commissioner relies upon a series of authorities: Kentlee Pty Ltd v Prince Consort Pty Ltd [1988] 1 Qd R 162, Director of Public Works v Ho Po Sang [1961] AC 901 and Robertson v City of Nunawading [1973] VR 819.

44. The Commissioner draws a distinction with Esber v Commonwealth [1992] HCA 20; 174 CLR 430. Mr Esber applied to the Administrative Appeals Tribunal for review of a decision rejecting his application for a lump sum payment of compensation under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the 1971 Act). After he lodged his application with the Tribunal, the 1971 Act was repealed and replaced by the Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth) (the 1988 Act). Section 129(2) of the 1988 Act preserved any proceedings under the repealed 1971 Act. The High Court held s 129(2) preserved a “substantive right” for Mr Esber to lodge an application with, and for, the Tribunal to determine the administrative review (at 438-41 (Mason CJ, Deane, Toohey and Gaudron JJ)).

45. According to the Commissioner, the absence of an analogous statutory provision in the Duties Act (ACT) distinguishes this case from Esber. The O’Neills’ lodgement of their application for review granted “no more than a hope” of possible success as the Tribunal was exercising a discretion. Further, under s 252(h) of the Duties Act (ACT), the Court is prevented from reviewing a grant of an extension of time made by the Commissioner under s 115HA. As a result, no right for administrative review was acquired by the O’Neills which continued after the repeal of s 95.

46. The O’Neills submit the amendments to the Duties Act (ACT) do not have retrospective effect to displace the subject review. They rely on s 84 of the Legislation Act 2001 (ACT) and in particular, s 84(1)(b): 84 Saving of operation of repealed and amended laws (1) The repeal or amendment of a law does not— (a) revive anything not in force or existing when the repeal or amendment takes effect; or (b) affect the previous operation of the law or anything done, begun or suffered under the law; or (c) affect an existing right, privilege or liability acquired, accrued or incurred under the law.

47. The O’Neills submit as the proceedings had “begun” by the time ss 115H, 115HA and 252 were enacted to replace s 95, the previous section continues to apply. As to the operation of s 84 they rely upon: Filaria Pty Ltd v Proprietors of Units Plan 932 [2002] ACTSC 8, R v William Thomas Girvan [2012] ACTSC 142; 222 A Crim R 138 and Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28; 214 CLR 318.

48. The O’Neills’ argument then proceeds on four bases: (a) Section 95 of the Duties Act (ACT) conferred a right upon taxpayers to duty concession if they met the criteria assessed at the time of the share transactions. (b) The Duties Act (ACT) gave taxpayers a “privilege” based on their purpose in transferring shares. This “privilege” is more than a bare “hope” as discretion was to be exercised by reference to certain objective factors. (c) Because of the operation of s 84 of the Legislation Act, the appeal process cannot be disturbed as the O’Neills have exercised their right, or privilege, to request the exemption, object to reassessments and appeal to the Tribunal. (d) That if (c) is wrong, then the Tribunal’s power to extend time is incidental, or part of, the reviewable decision itself and as the Tribunal acquires those powers to conduct de novo review.

49. Alternatively, the O’Neills rely upon Esber, submitting their rights to request the exemption, object to reassessments and appeal to the Tribunal accrued by the time of the repeal of s 95.

50. The O’Neills contend an argument that s 252(h) prevents the Tribunal and this Court from considering a grant of an extension of time under s 115HA is new and, therefore, sits outside the scope of the appeal to this Court and should not be entertained.

Submissions on the application of s 82 of the Duties Act (ACT) (Grounds 4-6)

51. Grounds 4, 5 and 6 concern the Tribunal’s decision under s 82 of the Duties Act (ACT).

Criteria for satisfaction of s 82(5) (Ground 4)

52. The Commissioner submits the Tribunal erred by finding the criteria for satisfaction in s 85(2) of the Duties Act (ACT) are the same as in s 163H of the Duties Act (NSW). Although the Commissioner accepts “inequitable” in s 82 of the Duties Act (ACT) is the same as “not be just and reasonable” in s 163H of the Duties Act (NSW), the criteria for consideration under s 82(5) are not synonymous with s 163H. Under the Duties Act (NSW), the criteria for satisfaction under s 163H is the application of ch 4 of that Act to an acquisition “in a particular case”. By contrast, the criteria for satisfaction under s 82(5) in the Duties Act (ACT) is whether the application of s 82(2) would be inequitable. That is, whether deeming a beneficiary of a discretionary trust to own or be otherwise entitled to the property is inequitable.

53. As a result, to reach the requisite state of satisfaction, the Commissioner submits the Tribunal was required to consider two factors: whether it was inequitable and if so, what made it inequitable for a beneficiary of a discretionary trust to be taken to own or to be otherwise entitled to the property the subject of the trust. It is not a broad discretion as to unfairness, but one confined to the application of s 82(2).

54. The Commissioner submits as the language in the Duties Act (NSW) is different to the Duties Act (ACT), Milstern should have been distinguished. The arrangement itself is also distinguishable. In Milstern, the sole director and shareholder of the company continued to control the companies after the acquisition, so the acquisition made no difference to the status quo. However, in this case, the O’Neills were directors, but not shareholders, in Five27 before the acquisition. After the acquisition, the O’Neills became shareholders each holding 50% of the company.

55. The O’Neills submit the Commissioner’s complaint does not identify a precise error of fact or law. As the provision is written in wide terms, there would need to be a clear House v The King error to disturb the Tribunal’s exercise of discretion under s 82(5). Nonetheless, the O’Neills submit the Tribunal’s reasoning on s 82(5) was not erroneous. First, the Tribunal properly identified s 82(5) is applied in relation to s 82(2) and, connectedly, it is relevant to assess the “inequity” by reference to the “effect” of that provision. Secondly, the Tribunal appreciated a distinction between the language in s 82(5) of the Duties Act (ACT) and s 163H of the Duties Act (NSW) but it correctly held the language was a “distinction without a difference”.

56. As for Milstern, the O’Neills submit the Tribunal used it as a useful guide on a reasonably comparable provision in NSW. The Tribunal drew appropriate guidance from Milstern in finding it would not be “just and reasonable” to deem a practical or economic benefit for a corporate beneficiary, which acquired shares where its status as an eligible beneficiary was irrelevant to the acquisition, and where it did not own the land nor have an expectation to receive it.

The control issue (Ground 5(a))

57. The Commissioner submits the decision in Winston-Smith should have been followed rather than distinguished in the Tribunal. In particular, the Commissioner cites Payne JA’s reasons at [42] in Winston-Smith (Appeal): This transaction removed any potential liabilities that might exist arising from the taxpayer’s 50% indirect interest in Mac’s. The removal of those potential liabilities was a thing of substance. It meant that there had been a change in the underlying practical or economic ownership of the land.

58. The O’Neills submit there are instead features of the share transactions which are distinguishable from Winston-Smith on facts unchallenged in the Tribunal, namely: (a) Signature did not beneficially own the shareholding, instead it was held on a non-beneficial trust for the O’Neills. (b) The O’Neills did not gain new or greater access following the share transactions than already existed. (c) The O’Neills varied the trust deed to exclude Five27 after they realised Five27 had been made a beneficiary automatically under the terms of the deed.

Practical or economic benefit (Grounds 5(b) and (c))

59. It is convenient to deal with Grounds 5(b) and 5(c) together.

60. The Commissioner submits the share transactions produced a change to the O’Neills’ underlying practical and economic interests in the land because of Signature’s removal and thereby, the removal of its potential liabilities. Connectedly, the issue of the share from Five27 to Mrs O’Neill gave her a practical and economic benefit.

61. The O’Neills say it was open on the evidence for the Tribunal to conclude they did not derive a practical or economic benefit from the share transactions: (a) The O’Neills shared decision-making capacity and did so in relation to the key corporate entities contained in the family trust structure. (b) The O’Neills were the only natural person actors who did so. (c) The O’Neills were already direct beneficiaries. (d) The O’Neills already held shares directly in other companies that were direct beneficiaries of the Trust.

Was it inequitable to deem Five27 a landholder under s 82(2)? (Ground 6)

62. The Commissioner submits the Tribunal asked the incorrect question under s 82(2). The correct question is whether it would be inequitable to apply s 82(2) so as to deem a beneficiary of a discretionary trust to own or to otherwise be entitled to the property the subject of the trust. Flowing from that, the Commissioner identifies a number of reasons why it was not inequitable to apply s 82(2) in circumstances where the fundamental design of this tax scheme, inequitable or not, is such that: (a) putting property in a trust incurs transfer duty; (b) moving rights in a trust or a company incurs landholder duty; and, (c) a party is caught by the scheme whether or not they have obtained advice about their prospective liabilities.

63. The O’Neills contend the application of s 82(2) was an exercise of discretion by the Tribunal and the Commissioner has not established an error of law of the kind in House v The King.

Notice of contention

64. On 2 July 2025, the O’Neills filed, with leave, a notice of contention. The respondents concede the issues raised only become relevant if the appeal is successful. Meaning of “securing” in s 95 (Ground 1)

65. The O’Neills contend the Tribunal erred in its construction of s 95(1)(a). They argue the meaning of “securing financial accommodation” in s 95 should encompass “obtain” finance for the following reasons: (a) The term “securing”, as opposed to “securities” appears only a few times in the Duties Act (ACT): ss 74(2), 95(1) and the Dictionary. The closest analogy is in s 74(2) in relation to “securing a debt” but the use of “securing” there is distinguishable to s 95(1)(a). (b) The ordinary language of s 95(1)(a) is wide enough to include the purpose of “obtaining finance”. (c) The relevant words, “financial accommodation” are capable of capturing “obtain” finance. The use of those words is distinct from the more defined use of “mortgage” and “debt” throughout the Duties Act (ACT). (d) An exemption for shares given as security to the lender could have been made explicit (as had been done in the new s 115HA). (e) Reliance is also placed on the broad dictionary definition of “financial” and “accommodation”.

66. The Commissioner submits this ground does not arise because s 95 has been repealed. If it arose, the proper construction of s 95 is as set out in their submissions for Grounds 1 and 2 in their Notice of Appeal.

Extent of s 82 discretion as beneficial in nature (Grounds 2,3,8 and 9)

67. In Grounds 2, 3, 8 and 9, the O’Neills identify matters relevant to the Tribunal’s exercise of discretion under s 82(5) of the Duties Act (ACT) which were not taken into account: (a) The practical existence of a “double duty” on the O’Neills. (b) The O’Neills’ reliance on advice from a professional adviser, and their lack of awareness of duty consequences when entering into the share transactions. (c) The absence of judicial authority or publication from the Commissioner. (d) Any technical or formalities issues that would mean s 95 of the Duties Act (ACT) does not exempt the O’Neills from duty.

68. The O’Neills argue s 82(5) is a remedial provision in the context of an anti-avoidance framework and so there should be no limitation upon considering the circumstances surrounding a relevant taxpayer.

69. The Commissioner submits: (a) There is no “double duty” the O’Neills have experienced. (b) Reliance on an advisor does not abrogate the duty upon the O’Neills as taxpayers. (c) The absence of authority or publication does not go anywhere. (d) The O’Neills’ behaviour reflects a conscious decision for commercial reasons not to comply with relevant legislation, rather than any technical or formal failures.

Benefit gained from the O’Neills becoming shareholders in Five27 (Ground 4)

70. The O’Neills do not press this ground.

Matters otherwise not decided (Grounds 5, 6 and 7)

71. These are the former Grounds 4, 5 and 6 which are contained at [13] in these reasons. In each of these grounds, the parties rely on their submissions made to the Tribunal.

72. Grounds 5 and 6 are interlinked. In the O’Neills’ submissions, under Ground 6, s 81(2)(a)(iii) of the Duties Act (ACT) requires a principal entity to be entitled to at least 50% of the assets of the “linked entity” upon winding up. However, as Five27 is only eligible to receive 40% of the assets of the linked entity, the relevant property at Moncrieff which was in the reassessment falls outside the scope of the relevant chapter in the Duties Act (ACT). Consequently, under Ground 5, the Moncrieff property should be removed from the reassessments.

73. The Commissioner submits s 81(2)(a)(iii) is not the relevant provision, but s 82. That is, a beneficiary of a discretionary trust is deemed to own or be entitled to the property subject to the trust. As a result, the Moncrieff property is properly included in the taxation assessment for the purposes of Ground 5.

74. In respect of Ground 7, the O’Neills submit the Commissioner failed to exercise a discretion in relation to the O’Neills’ liability for penalty tax. They point to having taken reasonable care to comply with the tax law, as being sufficient under s 31(5) of the Tax Admin Act to enable the Commissioner to be satisfied that no penalty tax is payable. Alternatively, and for the same reasons, there should be a remittal of an amount of penalty tax under s 37 of the Tax Admin Act.

75. The Commissioner says the O’Neills did not take reasonable care to comply with the tax law under s 31(5) because, among other things, of their failure to seek relevant tax advice.

Disposition of the Appeal

Ground 3 - did the Tribunal err in extending time for the shares to be reacquired?

76. I will deal with Ground 3 first on the basis that, if successful, it is dispositive of the entire appeal. Central to the determination of the question is whether the passing of the Revenue Legislation Amendment Act 2023 [No 2] (ACT) had the effect of extinguishing the entitlement otherwise available to the O’Neills under s 95(3) to seek an extension of the time within which the shares may be reacquired.

77. The Revenue Legislation Amendment Act commenced on 1 July 2024. Although s 115HA, which commenced as part of the amendment, included provision for an exemption for relevant acquisitions to secure finance, it was expressed in quite different terms. The new section applies only where the person making the relevant acquisition of shares is the person providing finance, and the borrower is the person from whom the shares are acquired. The subject transactions in this case would not have met the exemption provision had the terms of s 115HA applied at the relevant time.

78. Section 95 was in much broader terms applying on its face to any acquisition effected for the purpose of securing financial accommodation as long as the acquired interest was reacquired within five years. Section 95 provided duty was payable in relation to the acquisition of the shares if five years had passed from the date of acquisition and the interest concerned was not reacquired. An extension of time was required in this case because the time provided for in s 95 for the reacquisition of the shares had already passed.

79. The Commissioner says there was no accrued substantive right to seek an extension held by the O’Neills at the time of repeal of s 95. Although their application for review in the Tribunal had been lodged, it granted no more than a hope of possible success as the Tribunal was being called upon to exercise a discretion. The O’Neills rely on ss 84(1)(b) and (c) of the Legislation Act to support their argument that s 95 still applied in this case after its repeal, as the repeal could not affect anything done, begun or suffered under the repealed law, or affect an existing right, privilege or liability acquired, accrued or incurred under the law.

80. By the time of the repeal of s 95, the O’Neills had lodged their application for the Tribunal to review the Reviewable Decision, rejecting their earlier submission to the effect s 95 applied to the subject share transactions and an extension of time within which to permit the reacquisition of the transferred interest was appropriate. One impact of s 84(1)(b) of the Legislation Act is the repeal does not affect the right of the Commissioner to pursue the payment of duty assessed in accordance with the repealed provision. Another impact contended for by the O’Neills is the commencement of a legitimate process of review of the Commissioner’s decision as to the applicability of s 95 of the Duties Act (ACT), ensured the repeal did not affect the previous operation of the law as it applied in the review process itself. It therefore remained open for the Tribunal to apply s 95 in determining the review.

81. There is no doubt the power vesting in the Commissioner under s 95 to determine whether a longer period ought to apply for the reacquisition of the subject shares was discretionary.

82. The Commissioner places significant reliance upon the decision of the Queensland (QLD) Court of Appeal in Kentlee. That case concerned approval of a subletting arrangement in relation to part of a particular licensed premises. An application for approval was pending before the relevant approval authority. While the application was pending the law was changed, prohibiting a subletting arrangement of the kind envisaged. The question was whether the process that was pending gave to the party seeking approval an accrued right, such that under the Acts Interpretation Act 1954 (Qld), the QLD equivalent to the Legislation Act, an entitlement to pursue the approval was preserved even though the legislation was repealed. The Court of Appeal rejected the suggestion that the circumstances created any accrued right. The Court did so because the approving party retained a broad and largely unfettered discretion to grant or refuse the application. The decision of the High Court in Esber was distinguished as it was concerned with a substantive right existing under the repealed legislation at the time of its repeal. In referring to the judgment of Brennan J in Esber, Fitzgerald P observed at 172: As I read his Honour’s judgment, he was categorically of the view that a request, application or claim for an administrative approval or other benefit under an enactment does not create a right to have the proceeding so commenced completed under the enactment after its repeal.

83. Before turning to Esber, it is relevant to consider the decision of the Privy Council in Ho Po Sang which is referenced with approval by the Court of Appeal in Kentlee, and in a line of cases following that decision, including the decision of the Full Court of the Supreme Court of Victoria in Robertson (also relied upon by the Commissioner in this case).

84. Ho Po Sang was concerned with rights over a property in Hong Kong the Crown lessee sought to develop. There were existing tenants in the property when the Crown lease expired and the Crown lessee negotiated a new Crown lease to enable him to develop the site. The development would involve the demolition of the existing building and it was therefore necessary that the existing tenancies be brought to an end. Under legislation then in place in Hong Kong, the Crown lessee was able to seek the issue of a rebuilding certificate, which would in turn have empowered him to end the leases and enable the site to be developed. The Crown lessee lodged an application for such a certificate, but before the application was considered, the legislation enabling the issue of a rebuilding certificate was repealed.

85. The argument that ultimately proceeded in the Privy Council included the claim of the Crown lessee to an existing right to seek a rebuilding certificate having lodged an application for that purpose when the relevant legislation was repealed. Under comparable Interpretation Acts legislation in Hong Kong at the time, the Crown lessee claimed he was entitled to rely upon the repealed legislation for the purposes of seeking a rebuilding certificate.

86. The Privy Council rejected the application because there were a number of steps to be met before a rebuilding certificate would issue and, ultimately, there was a residual discretion in the relevant authority as to whether such a certificate should be issued. The Board concluded there was no existing right. In particular, their Lordships rejected the proposition there was an accrued right to a certificate, and consequently to vacant possession of the property. The Crown lessee’s entitlement was described as no more than a “hope or expectation that he would be given a rebuilding certificate even though he may have had grounds for optimism as to his prospects”. Their Lordships quoted with approval the following passage from the judgment of Blair-Kerr J in the court below: It is one thing to invoke a law for the adjudication of rights which have already accrued prior to the repeal of that law; it is quite another matter to say that, irrespective of whether any rights exist at the date of the repeal, if any procedural step is taken prior to the repeal, then, even after the repeal the applicant is entitled to have that procedure continued in order to determine whether he shall be given a right which he did not have when the procedure was set in motion.

87. The case of Robertson is a decision of the Full Court of the Supreme Court of Victoria. The dispute involved a plan of subdivision. After the plan was lodged, but before it was approved by the local government authority, a change was made to the Local Government Act 1958 (Vic) as it applied to subdivisions. In essence, the change was to impose a fee on developers equal to 20% of the value of the site to be subdivided. It was thus a substantial impost. Mr Robertson resisted the application of the fee to his subdivision application on the basis that he had a right to have his application considered under the repealed legislation.

88. Of significance in the reasoning of the Full Court was the subdivision application was not lodged at a time when there was an existing law that was subsequently changed. The case involved the implementation of a process which previously did not exist at all. The Full Court concluded there was no accrued right for the developer arising from the mere lodgement of an application which was itself no more than a procedural step taken under a statute, “in the expectation of achieving a benefit from an administrative authority” (at 826). In the course of their reasons, Winneke CJ, Gowans and Starke JJ said at 822: It needs to be borne in mind that this is not a case where something was done under a repealed provision and there is a question as to how much of what was done is deemed to survive notwithstanding the repeal of the provision under which it was done. Nothing had been done under the repealed subsection 8A and nothing could have been done under that subsection in respect of this land although some steps had been taken before the repeal…

89. The situation in Robertson is markedly different from the position of the O’Neills. In their case something was done by the Commissioner - the making of a determination concerning the tax liability attaching to the share transactions. That determination was made pursuant to the repealed legislation. The determination of the Commissioner led to the lodgement of an application seeking review of the Commissioner’s interpretation of the subsequently repealed legislation.

90. Esber was concerned with an application to redeem weekly payments of compensation under the Commonwealth compensation regime in place pursuant to the 1971 Act. Mr Esber made an application to redeem his entitlements and his application was rejected by the review officer. He then exercised his entitlement to seek a review of the decision in the AAT. The application for review was lodged, but before it was determined, there was a change in the Commonwealth compensation scheme, which precluded a redemption of weekly entitlements in circumstances such as those applying to Mr Esber. The question for determination was whether in view of the institution of review proceedings, Mr Esber had an accrued right under the 1971 Act which entitled him to have his application for review determined under that Act, or alternatively whether the new Act applied. If the new Act applied the review application was destined to fail.

91. The situation in Esber was different to the case before me in that the amending legislation included a provision expressly providing for the continuation of proceedings commenced prior to the amending legislation. The provision was in the following terms: 129 Application for review and other proceedings under previous Acts … (2) Where the Commonwealth is a party to any proceedings relating to any matter arising under the 1912 Act, the 1930 Act or the 1971 Act (including proceedings under Part V of the 1971 Act), being proceedings instituted but not completed before the commencing day, those proceedings may be continued on and after that day and, where the proceedings are so continued, the relevant authority and the Commonwealth shall be parties to those proceedings.

92. The majority in Esber applied s 129(2) as providing something more than a procedural entitlement. It ensured the application to the Tribunal continued with a view to resolution of the entitlement to redeem in accordance with the 1971 Act.

93. However, it is the alternative ground pursued by the claimant in Esber that is of particular relevance to this case. Mr Esber also placed reliance upon the Acts Interpretation Act 1901 (Cth) which was in equivalent terms to the Legislation Act. He contended he had a right to have the Tribunal determine his application for review of the delegate’s decision and that right was not affected by the repeal of the 1971 Act. The majority agreed. Their Honours accepted the existence of a right to have the decision of the delegate reconsidered and determined by the Tribunal, stating at 440 (Mason CJ, Deane, Toohey and Gaudron JJ): Once the appellant lodged that application to the Tribunal to review the delegate’s decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely “a power to take advantage of an enactment”. Nor was it a matter of procedure; it was a substantive right. (Citations omitted.)

94. Consistent with previous authority, something more than a “mere hope of a better outcome” is required before it can be said the O’Neills had an existing right under the repealed law that is not affected by its repeal. In a similar vein, something more than the mere commencement of an administrative process is required before it can be said something has been done or begun under the repealed law which is not affected by its repeal. In this case, there was something more than a mere administrative process that had begun. The O’Neills had exercised their right of review of a decision the Commissioner made under the existing law. As in Esber, it is the right to have the earlier decision reviewed that constitutes something more than a mere hope, or something more than simply the commencement of an administrative process, and distinguishes this case from the authorities relied upon by the Commissioner. I am therefore satisfied s 84 of the Legislation Act operates so as to preserve the operation of s 95 for the purposes of determining this appeal. Ground 1 - s 95, construction of “part of a process”

95. In finding the share transactions to be “part of a process” of securing financial accommodation, the Commissioner argues the Tribunal was inserting words into the section resulting in it falling into error. Particular complaint is made about paragraph 88 of the Tribunal decision: Having regard to the ordinary meaning of the word when used in a financial context and the context in which it appears in section 95, we consider the proper construction is that an acquisition must be part of a process for securing a loan or other financial accommodation from risk. The obvious example is a mortgage on land. In other words, an acquisition in land may be necessary in order to present the land as a means of securing the loan.

96. Complaint is also made about the Tribunal’s acceptance it is sufficient to demonstrate the sole or dominant purpose of the acquisition was the securing of financial accommodation. It is noteworthy the approach taken by the Tribunal in this regard is not inconsistent with the submissions of the Commissioner at the Tribunal hearing.

97. I do not accept the Tribunal’s reference to the share transactions being “part of a process” amounted to any error on their part. The critical words are the acquisition is effected “for the purpose of” securing financial accommodation. The language is thus directed to discerning the motivation for the transaction. The process followed by the Tribunal was to first determine why the transactions occurred. The second point to consider was whether there was any other identified purpose and, if so, whether the Tribunal could still be satisfied the dominant motivation for the transactions was for securing financial accommodation. The language complained of is simply illustrative of that approach. As the Tribunal observed, in the course of securing finance it is entirely plausible that an applicant for finance may have cause to satisfy a number of threshold matters, all directed to the goal of satisfying the financier’s requirements and thus securing the financial accommodation. The process followed by the Tribunal and the determination it reached does not bespeak error with reference to the plain words of s 95.

Ground 2 - s 95, construction of “securing financial accommodation”

98. The Tribunal determined the word “securing” is to be applied in the sense of protecting finance from risk of loss as opposed to obtaining finance. The Commissioner does not cavil with the interpretation, but objects to the application of the interpretation to the facts of this case. The Commissioner argues the transactions did not protect finance from risk of loss in the way that a mortgage might. At issue is the protection of the financier, not the borrower. That is why the section requires reacquisition within five years, or such longer period as may be determined by the Commissioner, or duty will become due and payable. The kind of transaction envisaged is one where a lender requires transfer of the security as a means of securing the debt owed to the financier by the borrower.

99. In seeking to understand why the Tribunal at [108] determined the subject transactions were for the purpose of “securing financial accommodation” it is necessary to carefully consider their analysis of the evidence. It begins at [99] with the finding that the evidence of the O’Neills and their accountants satisfied the Tribunal the acquisition was unrelated to the winding up of Signature. The Tribunal accepted the circularity problem had to be fixed, but the accountant’s purpose in recommending the transactions and the O’Neills’ purpose in entering into them was to answer the NAB’s concerns about its need to know its customer. That made the share transactions for the purpose of securing financial accommodation for the proposed development. In support of those findings, the Tribunal highlighted, amongst other things: (a) The transactions would not have occurred but for the need to satisfy the NAB as to the beneficial shareholding of Five 27 in the context of seeking approval for finance. (b) Although the circularity problem existed independently there were other means of addressing it. (c) The NAB’s requirement to understand the financial structure of the related entities was understandable in the context of the finance they were being asked to provide. (d) The transactions satisfied the NAB’s enquiry and the financial arrangement proceeded.

100. The Tribunal’s understanding of the intention of s 95 is best illustrated at [91] where they state: …Its obvious application is to enable a corporate grouping to make land held by one entity in the group available to secure temporary finance for a project being undertaken by another entity in the group. Enabling the efficient use of capital in that way is likely intended by the legislature as the core purpose of the provision, given that Part 3.2 is designed to counter avoidance of duty by the acquisition of an interest in a landholder.

101. It is apparent the Tribunal accepted the transactions occurred within a corporate grouping and was for the purpose of securing temporary finance for a project being undertaken in that group. As the Tribunal observed, the point of s 95 is to enable group assets to be put to best use for the purpose of securing finance. I find no error in their approach.

102. The conclusions reached above are sufficient to dispose of the appeal in favour of the O’Neills, but as the remaining grounds were argued before me in full, they should be dealt with.

Ground 4 - were the criteria in s 82(5) of the Duties Act (ACT) satisfied?

103. The point of contention is whether the criteria to be satisfied under s 82(5) of the Duties Act (ACT) relate to whether the application of s 82(2) would be inequitable (the Commissioner’s position) or alternatively, whether the provision creates a broader discretion as to unfairness in the particular case (the O’Neills’ position).

104. The Commissioner contends the Tribunal, having been presented with the NSW equivalent provision in s 163H of the Duties Act (NSW), and the decision of Milstern determined with reference to section 163H, failed to consider the different criteria for satisfaction of s 82(5). The Tribunal’s consideration begins at [156]. There, they accept the Commissioner’s word of caution about the use of comparable legislation and state the only assistance taken from s 163H was “a consideration of methods of reasoning when applying the comparable Territory legislation”. The Tribunal acknowledges the NSW provision is an overarching discretionary provision in contrast with s 82(5) which addresses the specific circumstances of whether a beneficiary under a discretionary trust should or should not be deemed to be the owner of the trust property.

105. The Tribunal concluded at [160] it would be inequitable to deem Five 27 to be a landholder and thus subject to duty on the share transactions. Their reasons for reaching that view were: (a) No-one, and in particular the O’Neills, derived any practical or economic benefit from the share transactions. (b) The situation in this case was different from Winston-Smith where the removal of a layer in the corporate structure, with the consequent removal of potential liabilities to third-party creditors, was seen to be a practical or economic benefit. (c) In the present case, distributions from the trust were already controlled by the O’Neills such that the transactions effected no change in the practical and economic interests in the subject property. (d) Accepting the legal structure changed as a result of the transactions, the effectiveness of the O’Neills’ control was not altered. (e) The absence of a practical benefit is a relevant matter to the exercise of the discretion under s 82(5). (f) Their effective control of the corporate group led the Tribunal to conclude that becoming shareholders in Five 27 failed to provide to the O’Neills any benefit regarding distribution of profits and income they did not already hold. (g) Accepting the resolution of the circularity problem was, on its face, of benefit, it was a benefit that could have been achieved in other ways and thus should be viewed independently of the transactions.

106. As the Tribunal appeared to acknowledge, s 82(5) is directed to the Commissioner’s satisfaction that the application of the subsection would in a particular case be inequitable for these purposes. The inequity in this case must arise from the determination the O’Neills own or are otherwise entitled to the property the subject of the trust. The residual question then was what if any inequity arose from that determination.

107. It was in seeking to give meaning to the term “inequitable”, the Tribunal turned to the NSW authorities. The Tribunal first determined the text of s 82(5) was not different in substance from the comparable provision in NSW. As a result, the principles for granting an exemption were the same as in Winston-Smith. Although the Tribunal applied the test in Winston-Smith, it also observed at [159] that the alternative would lead to the same result. Milstern was used by the Tribunal to draw a parallel with the factual matrix in that case, where there was no creation of a benefit which did not already exist. The substantive inequity arising here as a direct consequence of section 82(2) is that in taking the O’Neills to own or otherwise have an entitlement to the property the subject of the trust they incur a substantial tax liability but they secure no greater control over the assets of the trust than that which they enjoyed before the transactions. That is an inequity arising directly from the application of s 82(2) in the context of the subject transactions. In concluding there is an inequity in those circumstances I find no error in the Tribunal’s approach.

Ground 5(a) - the control issue and distinguishing Winston-Smith

108. The Commissioner’s consideration of Winston-Smith begins at page 22 of the Reviewable Decision. The primary judge in Winston-Smith, whose decision was upheld by the NSW Court of Appeal, found as relevant the distinction between the persona of a company and members or shareholders of a company in finding the transfer of shares from a company Mr Winston-Smith controlled to him personally was a dutiable transaction. Applying the analysis as comparable to the facts of this case the Commissioner concluded the discretion in s 82(5) should not be exercised.

109. In determining not to follow the outcome in Winston-Smith, the Tribunal pointed to a critical factual difference between that case and the present. The share transactions in Winston-Smith achieved the removal of a layer in the ownership structure, being the removal from the structure of one corporate entity with certain accrued liabilities, thus delivering a practical benefit to the taxpayer and ultimate owner. The Tribunal quoted the following passage from the Court of Appeal in Winston-Smith: His Honour concluded that the relevant acquisition changed the appellant's underlying practical or economic interest of the land to his advantage. A "layer of legal and beneficial ownership that had existed" was removed, one consequence being that "there would no longer be a possibility that the financial position of TCL, such as liabilities to a third party creditors, could interfere with the capacity of the [appellant] to ensure that he received all of the income derived from the land owned by Mac's". (Citations omitted.)

110. The Tribunal concluded at [167]-[168]: 167. We acknowledge the applicants’ control before the Transactions was an amalgam of directorship and direct and indirect shareholding, whereas control after the Transactions was available through direct shareholding of Five27, but this did not affect the effectiveness of the control: they were and remained the sole directors of Five27 and so were able to control the trust. 168. There is a significant difference between the roles ‘removed’ in Winston-Smith and in this case. As the applicants submitted, Signature had a trading history, as did TCL, but the latter was not a trustee. Signature traded in its own right, but any liabilities it might have accrued could not give rise to any indemnity out of the assets of the OF Trust. At worst it may mean the company may be liquidated in a creditors' winding up, but a new trustee could be appointed. Accordingly, in our view, a practical benefit as suggested in this form does not exist.

111. I find no error in the Tribunal’s approach. The distinction drawn between Winston-Smith and the present case was clearly open to them in circumstances where the entity removed from the ownership structure in Winston-Smith carried prospective liabilities from which the taxpayer was protected as a consequence of the subject transaction. No such prospective liabilities were identified in this case as relating to Signature.

Grounds 5(b) and (c) - was there a practical or economic benefit from the share transactions?

112. The Commissioner’s argument is twofold: (a) The removal of Signature from the ownership structure removed its potential liabilities to the benefit of the O’Neills. (b) Mrs O’Neill acquired a share in Five 27, delivering her a practical and economic benefit not enjoyed previously.

113. As the Tribunal observed, Signature had a trading history but it traded in its own right and any liabilities it accrued could not have created any right to indemnity out of the assets of the Trust. There was the residual possibility the liabilities of Signature procured independently may result in that entity being wound up, but the only impact from the perspective of the O’Neills would be the need to appoint a new trustee. As such, no practical or economic benefit was delivered. As for Mrs O’Neill, she did not, as a result of her acquisition of a share in Five 27, gain any additional effective powers regarding distribution of profits and income she did not already hold by virtue of her directorship of Five 27 and, in concert with Mr O’Neill, her control of the Trust. That is, as a director of the Trustee, Five27, Mrs O’Neill had control of the Trust which is unaffected by her becoming a shareholder in the Trustee.

114. The O’Neills did as a consequence of the share transactions achieve a resolution of the circularity problem and the benefit of its return to compliance with the relevant Corporations Act requirements. However, that benefit was in no way related to Five 27’s beneficial ownership of the land.

115. This ground is not made out.

Ground 6 - deeming Five27 to be a landholder?

116. In essence, the Commissioner argues the imposition of duty as a consequence of the deeming of Five 27 to be a landholder is not inequitable in circumstances where the fundamental design of the tax scheme imposes a liability for duty in a range of transactions that involve the transfer of rights in trust property.

117. The Commissioner says the Tribunal should have asked itself not whether it is inequitable to deem an entity to be a landholder but whether it is inequitable to apply s 82(2) so as to deem a beneficiary of a discretionary trust to own or otherwise be entitled to the property of the Trust.

118. The O’Neills contend the application of s 82(2) was an exercise of discretion by the Tribunal and, as no error of law is established, there is no proper basis upon which this Court would interfere with that exercise.

119. The Commissioner does not cavil with the conclusion of the Tribunal to the effect the word “inequitable” in s 82(5) is almost synonymous with “not just and reasonable” in s 163H of the Duties Act (NSW). In Winston-Smith, Emmett AJA observed at [46] that a “criterion of reasonableness is a relative term… importing a requirement to consider the circumstances of the case as a whole”. His Honour went on to describe the determination of just and reasonable as an exercise of discretion. The determination of that which is inequitable for the purposes of s 82(5) is to similar effect. It is a determination that is inherently discretionary.

120. I am not satisfied the Commissioner has identified any error of principle in the approach taken by the Tribunal to determine whether the application of section 82 (2) would in this instance be inequitable. The question as it is framed by the Tribunal at [160] appears as no more than a shorthand version of the section itself. In their application of this section to the facts of the case no error of principle is identified.

121. This ground is not made out.

The notice of contention

122. As the appeal is unsuccessful, I am not required to deal with the issues ventilated in the notice of contention.

Orders

123. The orders of the Court are: (1) The appeal is dismissed. (2) The appellant is to pay the respondents’ costs.

I certify that the preceding one hundred and twenty-three [123] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Muller.

Associate: Date: