The applicant also relied upon Urban Consolidation and Development Pty Ltd v Commissioner of State Revenue[2011] VCAT 593 to equate the situation in that case to the present and say that the exemption in s.85(2) should apply. However, that case is distinguishable from the present because in that case there was only a nominal consideration in relation to the change in ownership of the transfer of the units in the land. Paragraph 91 of that decision Her Honour Judge Jenkins stated: "...(c_) the consideration paid to 2 Sands was a nominal $1 per unit and did not reflect a one quarter interest in the underlying value of the Land."_
Looking at the letters that were sent out by the applicant to the unitholders and the explanatory memorandum in relation to these particular units that I am dealing with in this proceeding, it is quite clear that full value consideration was paid or could have been paid. Thus I agree with Mr Young that the present situation is very similar to a sale. That is, these transactions were not "mergers" as categorized by Mr Richmond but rather "sales" or "takeovers".
Thus, I conclude that the exemption contained in s.85(2) of the Duties Act should not be applied in the present situation to give entire relief from the duty which has been assessed on the applicant.
[2]
Whether Partial Exemption is appropriate pursuant to s.85(2)
[3]
Mr Richmond submitted, that pursuant to s.85(2) of the Duties Act, I should allow a partial exemption to the extent that the persons that previously held shares in a Syndicate, acquired an interest as a landholder after the rollover. Mr Richmond stated as follows:
... In the present case each Acquisition made by Viento in respect of a Syndicate comprised a large number of separate acquisitions of "interests" (being the interests of each transferring unit holder which were acquired by Viento on the transfer of that unit holder's units in the relevant Syndicate to Viento) which, in aggregate, comprised a 100% interest in the relevant Syndicate. While the aggregated acquisitions are treated as a relevant acquisition of 100% under section 89E(3) this is only for the purpose of determining whether there has been a "relevant acquisition", and there are still separate acquisitions of interests in the landholder for the purposes of section 85(2).
It would be just and reasonable to exempt under section 85(2) the acquisition by Viento of a 66.1% 55.1% interest in the FEP Syndicate, a 60.2% interest in the V3 Syndicate and a 32.8% interest in the 925 Syndicate, as this was the percentage interest in the underlying land which continued to be held by the transferring unit holders by reason of the rollover of their unit holding in the Syndicates into the DPF: see...above.
A partial exemption on that basis is just and reasonable because it ensures that duty is only imposed on the change in the beneficial ownership of the Victorian land which results from the Acquisitions consistently with the policy and purpose of the land rich provisions. This accords with the approach taken in the four Victorian cases discussed above: see... above.
Mr Richmond also said that s.85(2) should not be given a restricted meaning. That is, where interest should not be given a meaning of 100% interest but rather when looking at s.89E(3) and s.75, the purpose is to find whether the acquisition taken together is a significant interest and if they are duty is payable. He stated that the word "interest" in s.85(2) should not be taken to be a single interest. But rather read as separate acquisitions.
Mr Richmond also emphasised that it would be wrong to look at the position at the end of all relevant transactions. He said the correct time to look at the position was at the end of each separate transaction. This is a very important proposition as regard to the first transaction (the FDP transaction) as that occurred many months prior to the other transactions.
In my view, the clear wording of s.89E(3), leads to the conclusion that transactions should be aggregated. That is what it says. S.85(2) gives no warrant whatsoever to de-aggregate the transaction. To do so is to defy the words of the section.
As Mr Young stated:
[4]
The reference to 'an interest' in s.85(2) is necessarily an interest in which ss.78 and 79 speak; that is, an interest that is of itself a significant interest or that is a significant interest on an aggregated basis. The whole scheme of Chapter 12 is structured around interest of that kind.
[5]
The language of s.78 or s.85(2) of the Duties Act, does not suggest any apportionability. Had Parliament intended to want apportionability it would have said so in the statute. Mr Young stated:
[6]
The policy of the land rich provisions is to bring to duty transactions that effect a change in beneficial interest in land. Fulfilment of that policy does not depend on duty being apportionable.
[7]
Mr Young also stated, correctly, "the cases on s.85(2) show the exemption may apply where there is no changein the identity of beneficial ownership but it does not follow that the exemption is available to the extent that there is no continuity of identityof the beneficial owners."
It is clear from the nature of the transactions in this particular instance that they were made for a common purpose. That is, to roll 3 Syndicates into one. The applicant made no distinction between the acquisitions based on whether or not particular unitholders of a particular Syndicate would be a unitholder in the diversified fund after the acquisition. Its sole aim was to acquire the units of each Syndicate. Therefore, in my view to dis-aggregate the acquisition for the purposes of s.85(2) would be contrary to the reality of the transaction. Delaying the realization of the unitholders entitlement such as happened in the V3 Syndicate in my view does not change the position. It is all part of one transaction.
Thus I find that no partial exemption should be allowed pursuant to s.85(2) of the Duties Act.
[8]
Pursuant to s.30(3) of the Taxation Administration Act1997 (TAA), the respondent may determine that no penalty tax is payable if he is satisfied that the taxpayer took reasonable care. Under s.28 of the TAA, the Commissioner may remit interest in such circumstances as he considers appropriate. In the particular circumstances of the instant case, the applicant sought and received advice from Hall and Wilcox, well-known solicitors in the city of Melbourne, in relation to the restructuring of the 3 Syndicates. The solicitors failed to address the issue of s.89E of the Duties Act. Thus, they failed to advise on difficulties that that particular section would have on the applicant's proposal.
Mr Richmond correctly summarizes the law when he states at paragraph [67] of his submissions:
[9]
[67] There are 2 recent Victorian decisions concerning section 30(3) of the TAA, being the Challenger case and the Snowy Hydro case. In both those cases the Courts found that the fact that the taxpayer sought and relied upon legal advice that no duty was payable plainly meant that the taxpayer had exercised all reasonable care and justified a full remission of penalty tax under section 30(3) of the TAA.
[10]
In the case of Challenger Listed Investments Ltd v Commissioner of State Revenue[2010] VSC 464 at [31] Pagone J stated:
[11]
CLIL plainly took reasonable care to comply with the taxation law. CLIL, and indeed other companies within the Challenger Group affected by the transactions, sought the advice of Mallesons on the stamp duty issues associated with what was referred to as "The Project Contender Proposal"... The advice from Mallesons did not refer to s 89C nor to any potential liability to land rich duty on account of the conversion of a private unit trust to a public unit trust scheme.
[12]
A similar view was taken by the Court of Appeal in Commissioner of State Revenue v Snowy Hydro Ltd[2012] VSCA 145 at [170] - [171]:
[13]
In our view, the Commissioner ought to have concluded that the taxpayer had taken reasonable care, within the meaning of s 30(3)(a)....
[14]
... the seeking of legal advice shows, unambiguously, that the taxpayer wished to know whether it had obligations under the Act and, if so, what they were. Seeking legal advice was both necessary and sufficient for that purpose. The non-disclosure of that advice did not, in the circumstances of this case, justify any inference that the taxpayer was acting otherwise than in good faith in applying the advice. Nor did the non-payment of the tax. As this litigation has demonstrated, the question of liability to duty raised issues of considerable complexity.'
[15]
In Revenue Ruling TAA 007, it was stated as follows:
[16]
... the following actions, alone or in combination, may indicate that a taxpayer had taken reasonable care: ...
[17]
(d) the taxpayer has sought professional advice or private rulings for uncertain or complex matters where no Revenue Ruling applied or his/or circumstances differed from those described in a Revenue Ruling.' [Emphasis added]
[18]
The February and May advice from Hall and Wilcox, is described by Mr Richmond in his submissions at paragraphs [72] - [78] inclusive as follows:
The February Advice (relating to the FEP Syndicate) stated on page 5:
[19]
Again, a similar exclusion to the NSW exclusion applies to the Victorian landholding trust if it is a 'widely held trust'.
[20]
This is a reference to comments earlier in the February Advice (at page 5) relating to the NSW landholding trusts in respect of which Hall & Wilcox advised that, on the assumption that no unit holder (or their associates) had a beneficial entitlement to more than 20% in the relevant trust:
[21]
... the NSW landholding trusts will be public unit trust schemes and the NSW land rich provisions will not apply.
[22]
Therefore the February Advice, so far as it related to the Victorian land rich duty position, was that no land rich duty would be payable, provided that the FEP Syndicate qualified as a "widely held trust". The February Advice mentioned at page 3 that there was a "technical issue" as to whether one of the requirements for a trust to be widely held was satisfied (the other three being satisfied), being whether the fact that the FEP Syndicate was registered as a managed investment scheme meant that each trust which comprised it was also so registered. In our submission there is no doubt that the answer to this question is yes - the greater includes the less.[19]
The February Advice made no mention of section 89E of the Duties Act (the relevant charging provision) and it appears that it was simply overlooked.
The May Advice (relating to the V3 Property Syndicate and the 925 Property Syndicate) stated at page 4:
[23]
In Victoria, as both syndicates which own property in Victoria are managed investment schemes registered under the Corporations Act 2001 and have at least 300 registered unitholders, none of whom (together with associates) hold more than 20% of the units in the syndicates, no land rich duty should apply in Victoria.
[24]
The May Advice therefore confirmed that an exemption would apply and no land rich duty would be payable in relation to the rollovers for the V3 Syndicate and the 925 Syndicate, and also made no mention of section 89E of the Duties Act.
A tax default occurs on the date when the duty, having become due and payable, is not paid (Due Date). This is consistent with the Commissioner's views in Revenue Ruling TAA.007:
[25]
A tax default occurs when a taxpayer fails to pay tax in accordance with a taxation law. For example, a tax default occurs when there has been a late payment of tax by a taxpayer or when there has been a tax shortfall meaning that the taxpayer has paid less than the correct amount of tax.' [Emphasis added]
[26]
Mr Young submitted, that the applicant should not be allowed to have the penalty remitted because the February letter from Hall and Wilcox suggested that a Revenue Ruling be obtained. The difficulty with this submission is that the suggested Revenue Ruling was in relation to a different issue to s.89E.
S.89E was not considered in the advice at all. Therefore, even if a Revenue Ruling was sought by the applicant, there is nothing to say that that Revenue Ruling would have uncovered s.89E of the Duties Act.
The Revenue Ruling that was suggested by the February advice was as follows:
[27]
Given the Syndicate is registered as a whole instead of the 4 trusts individually, there is a technical issue in relation as to whether the 4 trusts themselves are registered The Victorian State Revenue Office is aware of this issue, but has not had the need to rule on the matter to date. The State Revenue Office's view is that it would take approximately 2 - 3 weeks to provide a ruling on this matter. The alternative to seeking a ruling would be to register with the Victorian Landholding Trust as a separate Managed Investment Scheme instead.
[28]
Thus it can be seen, that this suggestion had nothing whatsoever to do with the s.89E issue.
[29]
In my view, it would be wrong in this particular instance on the Authorities cited, to deny the applicant's the benefit of remission of the penalty on the basis that it failed to obtain a Ruling from the respondent. Such a Ruling would more than likely not have alerted the applicant to the difficulties of s.89E. Therefore in my view, the penalty imposed should be remitted as the applicant had sought and received legal advice upon which it had acted.
Mr Young also drew my attention to the fact that on 10 November 2010, s.89E was brought to the attention of the applicants. However Mr Young's submissions on this point were based on the fact that he was unaware that the applicant had obtained by that stage advice from Mr J D Merrills QC. On being informed that such advice had been obtained Mr Young did not pursue this point any further.
It should also be noted, that even though it is my intention to order that the penalty be remitted, that is not the same as the interest that has been charged on the sums that have been unpaid. The interest charged forms part of the review before me, however Mr Richmond did not seek to argue that no interest should be payable. The interest is a commercial sum of money that is payable on the money that was outstanding and therefore in my view that should be affirmed.
Uninstructed by the authority to which I have referred, I would have come to a different conclusion in relation to the remission of penalty in this proceeding. It is most unfortunate, that the taxpayers of Victoria are deprived of penalty which they otherwise may be entitled to, because of incorrect advice prepared by solicitors, which presumably they were paid a considerable amount of money to prepare. In other areas of the law, if lawyers give a client wrong advice, that wrong advice cannot automatically be relied upon to escape liability. The recipient of the wrong advice has their remedy against the lawyer. I fail to see why Revenue law should be any different. The fact is, the way the law is at the moment is that the citizens of Victoria are in fact paying for the incorrect advice given by highly-paid lawyers. However, as I have previously said, I am bound by the two authorities of Challenger and the Snowy Hydro cases, and thus the law demands that the penalty be remitted.
[30]
In conclusion, I find for the respondent on the first three issues that is the liability pursuant to s.89EDuties Act and the fact that the duty should not be remitted pursuant to s.85(2) of the Act. However, I find in favour of the applicant in relation to the question of penalty and that penalty should be remitted. That remission does not include interest that has been chargeable. Therefore I shall order that the Assessment of the respondent is confirmed save for the issue of penalty which is not payable.
[31]
[3] See SAF at [5]-[6], [11]-[12], [17]-[18], [23]-[24]; Wright at [7], [12], [14], [15], [21], [23]-[25].
[5] The calculations to generate the percentages in the table are in a spreadsheet which is approximately 900 A3 pages in length. This is available to the Commissioner on request.
[34]
[6] The calculations to generate the figures in the table are in a spreadsheet which is approximately 900 A3 pages in length. This is available to the Commissioner on request.
[11] The term 'landholder' is defined in s.71(1) as (any one of) a private unit trust scheme, a wholesale unit trust scheme or a private company.
[37]
[12] Snowy Hydro Limited v Commissioner of State Revenue (Vic) [2010] VSC 221 [47] ("Reasons").
[38]
[13] See also Commissioner of State Revenue v Landrow Properties Pty Ltd[2010] VSCA 197 at [3] and [25]-[33]; Commissioner of State Revenue v STIC Australia Pty Ltd[2010] VSC 608 [24]
[39]
[14] The only reported decision on section 89E is Commissioner of State Revenue v Australand Investments Ltd[2012] VSCA 152 affirming the decision of Mandie J, [2009] VSC 453, on appeal from VCAT, [2008] VCAT 2267.
[16] See also Affinity Health Ltd v Chief Commissioner of State Revenue[2005] NSWSC 663 at [59]- [72] to similar effect in the context of the equivalent discretion in former section 119(2) of the Duties Act 1997 (NSW).
[42]
[17] See T Document 58 (letter to FEP Syndicate unit holders); T Document 60 (Explanatory Memorandum for V3 Syndicate, section 9.2 ("Benefits and advantages of the Rollover"); T Document 64 (Explanatory Memorandum for 925 Syndicate, section 9.2 ("Benefits and advantages of the Rollover")
Denison Funds Management Ltd v Commissioner of State Revenue (Review and Regulation) [2014] VCAT 1385 (5 November 2014)
Mr Richmond submitted, that the FEP Syndicate was not a land rich landholder. He referred to the fact that pursuant to s.74(4) of the Duties Act a landholder is entitled to land held by a linked entity if, on the winding up of the linked entity and ignoring its liabilities of the linked entity the landholder would receive an interest in the land held by that linked entity. Pursuant to s.74(4), "winding up of a linked entity includes any means by which the entity's property is divested in favour of the persons entitled to it including in the case of a trust the vesting of the trust property in the beneficiaries."
Mr Richmond submitted, that in order to determine whether FEP is a land rich entity, one should look at the relevant Trust Deed and the provisions relating to winding up. Those provisions must then be related to s.74 and in particular subsections (4) and (7). Mr Richmond submitted as follows:
The winding up contemplated by section 74(4) requires an hypothesis about whether the landholder would be entitled to receive property of the linked entity if that entity was wound up: Commissioner of State Revenue (Vic) v Snowy Hydro Ltd[2012] VSCA 145 (Snowy Hydro case) at [11]-[12]. If on the winding up of the linked entity, the landholder would not be entitled to receive any land held by that linked entity, then the land is not attributed to the landholder under section 74(1).
The FEP Syndicate comprised four unit trusts - three unit trusts (Trusts No. 1, 2 and 3), the units of which were stapled together and held by public investors, and another unit trust (Trust No. 1A) all the units in which were held by Trust No.1.[8] It was Trust No. 1A which owned Victorian land.[9] Because Trust No. 1A is a trust, it is a "linked entity" within the meaning of section 74(7). However, Trust No. 1 (being the entity in which the relevant acquisition of units occurred on 25 March 2008) will only be treated as holding the land held by Trust No. 1A under section 74(1) if, on the winding up of Trust No. 1A, Trust No.1 would be entitled to receive that land.
Clauses 46 to 49 of the FEP Syndicate Deed[10] deals with "events of termination" and the rights of the holders of Units upon such events. Clause 46 provides that the "Syndicate", being Trust No. 1A and the other "Trusts" as defined in clause 1.1, must be wound up and terminated on the first to occur of certain dates (clause 46.1) and a Trust (including Trust No. 1A) can be wound up and terminated earlier in certain events (clause 46.2).
In the event of the wind up and termination of Trust No. 1A (or any other Trust) the procedures set out in clauses 47 and 49 must be followed. Under clause 47.1, the Responsible Entity must as soon as practicable after the "Termination Date" (being the date the Trust is terminated (see definition in clause 1.1)) "convert the Assets into money", "pay the Liabilities" and "pay the balance of the Assets to the Investors in accordance with the provisions of the ". In this respect clause 10.1(3) provides that a Unit confers on the Investor the right to participate in the division of any surplus assets or profits of a particular Trust or the Syndicate on the winding up of the Trust or Syndicate on a pro rata basis with all other Units.
Mr Richmond submitted that this present situation is distinguishable from what the full court was dealing with in the Snowy Hydro case as he stated in paragraph 32 of his submissions.
Mr Richmond also stated that the deemed provision in s.74(4) of the Duties Act should be construed strictly. He cited the decision of the full court of the Federal Court in Commissioner of Taxation v Comber[1986] FCA 92; [1986] 10 FCR 88 at 96 where the Court stated:
"...S.74(4) of the Act is not concerned with the practicalities of an actual winding-up of the 'linked entity'. Rather, the focus is on the entitlement of the relevant entity to the assets of the linked entity. As her Honour said (Davies J from the court below) [2010] VSC 221 [47]:
Clearly in my view, it is important to look at the statute itself. In this case, s.74 makes it clear how the term "winding-up" is to be interpreted. Where a section such as the one that I am dealing with here makes the interpretation of a situation clear, it is not permissible to go to a document such as a trust deed which in fact limits the "winding-up" to an actual "winding-up" that would be performed pursuant to the Corporations Act. In my view, in this particular instance, the statute is clear on what is involved in a "winding-up" of a trust. As such, there is no need to go back to the trust deed in this instance for this particular purpose. To do as the applicant has suggested would appear to be against good authority. In Kelly v R[2004] HCA 12; [2004] 218 CLR 216 at [103] McHugh J held that the only proper course is to read the words of the definition into the substantive enactment and then construe the substantive enactment.
Mr Young performed the task of reading the definition into the substantive enactment, and correctly came up with the following result:
The then Treasurer when introducing the 2004 Bill which enacted section 89E of the Duties Act, described section 89E as having the following purpose: "takeovers of public unit trusts effectively converting them to private unit trusts will in specified circumstances also be dutiable" [emphasis added] (Second Reading Speech to the 2004 Bill). Likewise, when introducing this provision in Parliament in June 2004, the Minister described the provision as applying to "takeovers of public unit trusts effectively converting them to private unit trusts..." [emphasis added] (Victoria, Parliamentary Debates, Legislative Assembly, 8 June 2004, 1579, Mr Lenders, Minister for Finance).
It is clear from the above that the purpose of Section 89E was to tax a takeover of a public unit trust which effectively converts it into a private unit trust. Where a unit trust is a public unit trust by reason of being a "widely held trust" immediately before the takeover transaction, the concept of a "takeover" appears to be a reference to an acquisition (or a series of acquisitions) of units in the trust which cause the unit trust to cease to have at least 300 unit holders or results in a person (individually or together with associates) acquiring more than 20% of the issued units (each of which is sufficient to cause the trust to cease to be a widely held trust). The provision is concerned therefore with imposing duty on a concentration of ultimate beneficial ownership of land held by a unit trust that previously qualified as a "public unit trust scheme".[14]
Further, Mr Richmond also looked at the words "just and reasonable" in s.85(2), and said how those words should be treated bearing in mind the purpose of the statute and the purpose of s.89E. At paragraphs [44] - [47] of Mr Richmond's submissions, he stated as follows:
The use of the phrase "just and reasonable" is also significant, as it suggests that Parliament intended to confer a broad discretion to relieve taxpayers from duty where appropriate, having regard to all the circumstances of the case which may be relevant to imposition of duty: at ; see also at . Further, it requires that the substance of the matter be looked at, consistently with the principle that the substance of the transaction is to be looked at in determining the question whether duty is payable.
[88] The cases of Challenger and [Commissioner of State Revenue v STIC Australia Pty Ltd and RE Funds Management Ltd[2010] VSC 608] both provide an insightful commentary upon the proper application of section 85(2) and identify a number of bases upon which the Commissioner's discretion miscarried in this case. In particular:
In STIC (Australia) Pty Ltd v Commissioner of State Revenue[2010] VCAT 1057 (FirstSTIC case), Deputy President Macnamara took into account, in applying the Commissioner's "just and reasonable" discretion in section 85(2) of the Duties Act, the underlying policy of the land rich duty provisions being to bring to duty transactions that effected a change in the underlying beneficial interests in land through a dealing in shares and units (at [93]). This, along with other matters mentioned at [94]-[96] of the Tribunal's reasons, led Deputy President Macnamara to conclude that it was not "just and reasonable" to impose land rich duty on the issue of units (amounting to a 90% interest) in a "land rich" unit trust, as the existing holder of units in the trust and the acquirer of the 90% interest were both trustees of trusts that had the same beneficiaries. That is, the issue of the units in the "land rich" unit trust did not effect a change in the underlying beneficial ownership of the land holdings of the trust as the beneficiaries were considered the same or "common".
The Commissioner appealed the decision in the First STIC case, and the matter was heard before Davies J in Commissioner of State Revenue v STIC Australia Pty Ltd[2010] VSC 608 (Second STIC case). The Commissioner sought to challenge the decision in the First STIC case on the basis that (among other things) it was an irrelevant consideration to take into account whether there had been a change in the underlying beneficial interests in the land holdings of the relevant unit trust. Davies J rejected the Commissioner's arguments, and concluded that it was an entirely relevant consideration as to whether there was a change in beneficial ownership of the units in the unit trust (and therefore also, the underlying beneficial interests in the land holdings of the trust): see [24]-[26]. Davies J concluded that the Deputy President in the First STIC case had not committed any error in law in exercising the Commissioner's discretion under of the .
Mr Richmond submitted, that even if there was a purchase of units or shares in a landholding, that would not be a ground for excluding the exemption in s.85(2). He stated the exemption in relation to a purchase of a landholding is contained in s.85(2). However, the exemption in subsection (1) is confined to the matters referred to therein. I do not believe that the existence of subsection (1) is a ground for widening the discretion referred to in s.85(2). In the case of CSR v STIC Australia Pty Ltd[2010] VSC 680 at [25] and [27] Davies J stated as follows:
Accordingly, upon a winding up of Trust No. 1A, the responsible entity of Trust No. 1 (and therefore Trust No.1 itself) was not entitled to receive any land of Trust No. 1A, and thereby neither could any unit holder of Trust No. 1. Rather, the trustee of Trust No. 1A (Guardian Trust Australia Limited) was required to convert the land and other property into money, pay liabilities and pay the balance remaining (if any) to the responsible entity of Trust No. 1 (Viento), which was the sole unit holder.
As Trust No. 1 did not hold any land in its own right, and as Trust No. 1 was not entitled to receive any of the land of Trust No. 1A on a winding up of Trust No. 1A, Trust No. 1 did not hold any land for the purposes of the land rich duty provisions and was therefore not "land rich". The land rich duty provisions cannot therefore apply to the acquisition of the interests in the FEP Syndicate under the "roll over" which occurred on 25 March 2008.
Challenger Listed Investments Ltd v Commissioner of State Revenue
As discussed ...above, the purpose of the land rich duty provisions as at the time of the Acquisitions was to prevent the avoidance of duty on changes in beneficial ownership of land held through a private company or private unit trust by dispositions of interests in the private company or private unit trust. This policy objective was achieved inter alia by: (a) limiting the concept of "landholder" to a private company or private unit trust; (b) by requiring the landholder to be "land rich" (ie the landholder was required to pass the $1 million threshold and 60% test) and (c) only taxing the acquisition of a "significant" interest (being a 50% interest in the case of a private company and a 20% interest in the case of a private unit trust).
It is also necessary to consider the purpose of section 89E, the provision which would otherwise tax the Acquisitions if section 85(2) does not apply. As discussed ...above, the purpose of section 89E was to tax a takeover of a public unit trust involving the concentration of ultimate beneficial ownership of land held by the public unit trust.
Accordingly, section 85(2) should be applied to exempt from duty a transaction where, in light of these purposes, it can be seen that it was not intended to be taxed under Chapter 3...
In support of the applicant's submissions, Mr Richmond referred to four Victorian decisions concerning s.85(2) of the Duties Act. He used those decisions in an attempt to argue that the discretion should be exercised in the section in order to avoid Chapter 3 duty.
Mr Richmond stated as follows:
There are 4 recent Victorian decisions (including 2 Supreme Court decisions) concerning section 85(2) of the Duties Act, the effect of which was relevantly described by Jenkins J in Urban Consolidation and Development Pty Ltd v Commissioner of State Revenue[2011] VCAT 593 (Urban Consolidationcase) as follows: