Hatziladas v Commissioner of State Revenue (Review and Regulation) [2025] VCAT 588

1. The Tribunal confirms the respondent's assessments (made on 3 December 2019) of Kleanthe Hatziladas (the applicant in proceedings Z718/2023 and Z719/2023) to duty under Chapter 3 of the Duties Act 2000 (Vic) ('Duties Act') in respect of his acquisitions of shares in:

(a) 277 Bay Road Developments Pty Ltd on 17 September 2014; and

(b) JFK Corporation Pty Ltd ('JFK Co') on 20 April 2016.

1. The Tribunal confirms the respondent's assessment (made on 4 December 2019) of Zelko Maric (the applicant in proceeding Z720/2023) to duty under Chapter 3 of the Duties Act in respect of his acquisition of shares in JFK Co on 1 September 2017.

1. Mr Kleanthe Hatziladas, the applicant in proceedings Z718/2023 and Z719/2023, is a property developer.[1] Mr Zelko Maric, the applicant in proceeding Z720/2023, is a certified practising accountant who describes Mr Hatziladas as his 'close friend and client'.[2] Collectively, I refer to Mr Hatziladas and Mr Maric in these reasons as the 'Applicants'.
2. In October 2019, the Commissioner of State Revenue ('Commissioner') commenced an investigation regarding the compliance of Mr Hatziladas and Mr Maric with the landholder duty provisions (in Chapter 3) of the Duties Act 2000 (Vic) ('Duties Act'), in respect of their acquisitions of the following shares in the following companies:

(271-281 Bay Road, Cheltenham ('Cheltenham Property'))

(G01 & G02, 184-186 Bay Street, Brighton ('Brighton Property'))

Mr Dimos Hatziladas ('Jim') and Mr Fabian Secatore ('Fabian')[3]

1. Following the investigation, the Commissioner assessed the Applicants as being liable to landholder duty, penalty tax and interest ('Assessments') as follows:

1. The Commissioner also assessed Mr Hatziladas as being liable to landholder duty in respect of the October 2014 Acquisition. However, as he did not object to that assessment, it does not form part of these proceedings.
2. The Applicants accept that each of the 2014, 2016 and 2017 Acquisitions were prima facie subject to landholder duty. In other words, they accept that each of BRDPL and JFK Co held Victorian land worth in excess of $1 million and the interests they acquired were relevant interests.[7] However, they contend that each acquisition was an 'exempt acquisition' under section 89(a) of the Duties Act on the basis that:

the means by which [they] acquired the interest[s] would have resulted in no ad valorem[8] duty being payable under [the transfer duty provisions in] Chapter 2 [of the Duties Act] had the subject of the acquisition been a transfer of the land of [each] landholder to the [Applicants] ...

1. In relation to the 2014 and 2016 Acquisitions, Mr Hatziladas relies on the exemption in section 36 of the Duties Act[9] concerning 'property passing to beneficiaries of fixed trusts'.
2. In relation to the 2017 Acquisition, Mr Maric relies on the exemption in section 33 of the Duties Act[10] in relation to a 'change in trustees' of a trust.
3. In broad terms, the Commissioner contends that each of the assessments should be affirmed on the basis that the requirements for the Chapter 2 exemptions are not satisfied in respect of the hypothetical land transfer contemplated by section 89D(a). Alternatively, he submits that the Applicants have not discharged their onus of proof, under section 110 of the Taxation Administration Act 1997 (Vic) ('TA Act'), to establish that they satisfy the exemption requirements.
4. For the reasons which follow, I am not satisfied on the evidence before the Tribunal that any of the 2014, 2016 or 2017 Acquisitions would have been exempt from duty under Chapter 2 if they had involved a transfer of land. As such, I have confirmed the Assessments.

1. The relevant timeline concerning the 2014 Acquisition is as follows:

BRDPL is registered and 100 shares issued to Mr Balderanos, who is appointed as the company's sole director.

BRDPL enters Contract of Sale to acquire Cheltenham Property for $2.45 million, with Mr Balderanos and Mr Hatziladas providing a guarantee and indemnity in favour of the vendor.

BRDPL becomes registered proprietor of Cheltenham Property.

Mr Balderanos transfers 95 shares to Mr Hatziladas.

1. In his first witness statement (for proceeding Z718/2023), Mr Hatziladas states that he had asked his accountant to register BRDPL but was 'reluctant to have [his] name shown as the owner of the issued share capital in the Company' due to 'some concerns regarding potential exposure from another property that [he] was in the process of also developing'.[13] In his evidence before the Tribunal, it emerged the concern was primarily with respect to GST payable to the Australian Taxation Office ('ATO') on another property development. For this reason, he says that he approached Mr Balderanos, his 'good friend and business associate', to hold the shares in the company.[14] He says that due to his 'very close relationship' with Mr Balderanos, they 'did not formalise the arrangement for Greg to hold the 95 Ordinary Shares in the company by way of a Declaration of Trust'.[15]
2. Mr Hatziladas goes on to explain that:[16]
   1. the deposit to purchase the Cheltenham Property was sourced from his 'personal funds or Family Trust funds'. In his evidence before the Tribunal, Mr Hatziladas was unable to identify the family trust(s) that provided any funds, but suggested they were lent to BRDPL;
   2. the development of the property was to be funded by way of mortgage finance facility;
   3. Mr Balderanos was 'not agreeable to providing [a] Guarantee' for that facility; and
   4. as such, it was resolved that Mr Balderanos would transfer the 95 shares 'that he held on Trust for [Mr Hatziladas] to [Mr Hatziladas or his] nominated trust entity' and resign as Director/Secretary of the Company', with Mr Hatziladas 'appointed in his place'.
3. Mr Hatziladas states that the 95 shares were transferred to him on 17 September 2014 '[i]n accordance with [their] informal Trust Agreement'.[17] He claims that the transfer 'represented a transfer of the shares held non-beneficially for [him] and ... was therefore exempt under the provisions of section 36 of the Duties Act'.[18]
4. Neither the share transfer, nor any minutes of a meeting to approve the transfer, is included in the Tribunal Book. However, the Form 484 lodged with ASIC[19] records that, on 17 September 2014, Mr Balderanos' shareholding decreased from 100 to 5 shares, and Mr Hatziladas' shareholding increased from 0 to 95 shares. In both cases, the Form 484 suggests that the shares were 'beneficially held' by the registered shareholder (i.e. before and after the transfer, respectively).
5. In his evidence before the Tribunal, Mr Hatziladas said that the shares in BRDPL were 'his shares' and that Mr Balderanos held them for him. When I asked how such an arrangement would help with the liability exposure he was concerned about, Mr Hatziladas suggested that, by the time of the transfer, he had settled the GST issue with the ATO. However, when I observed that the shares were issued to Mr Balderanos at an earlier point in time, he said he had 'no option' at the time. I take this to mean that he had no option other than to have the 95 shares registered in Mr Balderanos' name to mitigate the liability exposures he was concerned about.

1. The relevant timeline concerning the 2016 Acquisition is as follows:

JFK Co is registered with Mr Hatziladas, Jim and Fabian each being appointed a director and being issued with 50 shares.

JFK Co enters Contract of Sale to acquire the Brighton Property.

Jim and Fabian transfer 50 shares each to Mr Hatziladas and cease to be directors.

The purchase of the Brighton Property is settled and JFK Co becomes the registered proprietor.

1. In his second witness statement (for proceeding Z719/2023),[20] Mr Hatziladas explains:[21]
   1. JFK Co was set up to explore 'various property development opportunities that may arise from time to time'.
   2. When he decided to acquire the Brighton Property, '[b]oth Jim and Fabian declined to be involved' and so that was purchased by another entity, 184-186 Bay St Developments Pty Ltd. Mr Hatziladas' evidence was that the company was controlled by Mr Demetrios Angelopoulos (a 'good friend'), and he was simply an investor in the company.
   3. He was keen to 'retain the large ground floor Office/Retail Space' (which he referred to as the medical centre when giving his evidence) and, as JFK Co 'had been inactive and dormant', he approached Jim and Fabian who were agreeable to him taking over the company.
   4. However, because Jim is his brother and Fabian had been a friend and business associate,[22] they 'did not take immediate steps to formalise the arrangement'.
2. Mr Hatziladas again claims that the transfer of the shares is exempt under section 36 of the Duties Act because 'it had previously been resolved that both Jim and Fabian were holding their respective share holding in the company as Trustees on [his] behalf and [for his] family trust entities'.[23]
3. Neither the share transfers, nor minutes of any meeting of the directors to approve the transfers, is included in the Tribunal Book. However, the Form 484 lodged with ASIC[24] records that, on 20 April 2016, the shareholdings of each of Jim and Fabian decreased from 50 to 0 shares, and Mr Hatziladas' shareholding increased from 50 to 150 shares. In each case, the Form 484 suggests that the shares were 'beneficially held' by the registered shareholder before and after the transfer, respectively.

1. The relevant timeline concerning the 2017 Acquisition is as follows:

JFK Co is registered with Mr Hatziladas, Jim and Fabian each being appointed a director and being issued with 50 shares.

Mr Hatziladas declares that he holds his shares in JFK Co 'as nominee of and trustee for and on behalf of Fand (Vic) Pty Ltd (As Trustee for the FAND Family Trust)' ('First Declaration of Trust').

JFK Co enters Contract of Sale to acquire the Brighton Property.

Jim and Fabian transfer 50 shares each to Mr Hatziladas and cease to be directors.

Mr Hatziladas 'acknowledges and agrees that he holds legal title to [100 shares in JFK Co] on behalf of [FAND (VIC) Pty LTD as trustee for the FAND Family Trust] who is the true beneficial owner of the [shares]' ('Second Declaration of Trust').

A meeting of the board of JFK Co is held at which Mr Maric is appointed as a director and secretary of the company, Mr Hatziladas resigns as director and secretary and the transfer of 150 shares from Mr Hatziladas to Mr Maric 'as trustee for Hatz Investments Pty Lt[d] as trustee for the Hatziladas Family Trust' is approved.

Mr Hatziladas transfers 150 shares to Mr Maric 'as trustee for Hatz Investments Pty Ltd'.

Mr Maric declares that he holds the 150 shares in JFK Co 'as nominee of and trustee for and on behalf of Fand (Vic) Pty Ltd (As Trustee for the FAND Family Trust)' ('Third Declaration of Trust').

The purchase of the Brighton Property is settled and JFK Co becomes the registered proprietor.

1. In relation to events of 10 September 2016, in his third witness statement (for proceeding Z720/2023),[25] Mr Hatziladas explains that, after Jim and Fabian transferred their shares in JFK Co to him, he 'held all issued shares in the company' and '[a]t this stage, [he] resolved to [beneficially] hold the shares as trustee on behalf of one of [his] family trusts, namely, FAND (Vic) Pty Ltd as Trustee for the FAND Family Trust'.[26]
2. Unlike the other transactions, the Tribunal Book includes the minutes of the board meeting at which the transfer of shares from Mr Hatziladas to Mr Maric was approved and the executed share transfer.
3. In his witness statement,[27] Mr Maric explains:[28]
   1. He was approached by Mr Hatziladas '[i]n or about mid June 2017' to 'assist ... by taking a transfer of 150 ordinary shares [in JFK Co]', which he agreed to do.
   2. He says he 'believe[s] that at the time [Mr Hatziladas] was concerned about some potential legal exposure' and this was why he 'agreed to assist [Mr Hatziladas] by taking a transfer of the shares to be held by [Mr Maric] on trust'. At Mr Hatziladas' request, he signed the Third Declaration of Trust.
   3. At the time he acquired the shares in JFK Co, the company was the named purchaser of the Brighton Property, although 'the company did not own the property as settlement had not yet taken place'.
   4. The deposit and all costs and expenses for the purchase of the Brighton Property were paid by Mr Hatziladas 'or his related trust entity' and Mr Maric 'did not contribute any funds towards the purchase of the property'.
   5. At Mr Hatziladas' request, he agreed to 'act as the Guarantor' for loans provided to enable settlement to proceed' based on 'an understanding with [Mr Hatziladas] that he would indemnify [Mr Maric] in the event that there was any call or claim against [Mr Maric] on the basis of the Guarantees'.
   6. The 'true beneficial owner of the shares [in JFK Co] always remained [Mr Hatziladas] and/or his trust entities' and his 'acquisition of the shares was in a trustee capacity' and, as such, he 'had no legal or beneficial interest in the company or its underlying property [i.e. the Brighton Property]'.
4. Mr Maric claims that the transfer of shares into his name 'represented a change of trustee and not a change in the underlying beneficial ownership of the company and therefore was exempt from payment of stamp duty'.[29]
5. In cross-examination, Mr Maric:
   1. Accepted that he was not aware whether Mr Hatizaladas had held the 150 shares in JFK Co beneficially or on trust prior to the 2017 Acquisition.
   2. Confirmed that he did not hold the transferred shares beneficially, but rather on trust.
   3. Accepted that the beneficiary of the trust identified in the Third Declaration of Trust (i.e. FAND (Vic) Pty Ltd as trustee for the FAND Family Trust) was inconsistent with the beneficiary identified in the minutes of the directors' meeting (i.e. Hatz Investments Ltd as trustee for the Hatziladas Family Trust). Further, while he knew the shares were being generally held for the benefit of Mr Hatziladas or his entities, he conceded he did not know the precise person or entity that he was holding the shares for.
   4. Explained that the 'legal exposure' he referred to in his witness statement was to tax debts owed to the ATO.
   5. Conceded that his statement about Mr Hatziladas or his entities paying the deposit and costs associated with the purchase of the Brighton Property was an assumption, as he 'did not physically see it' (but noting he had 'never paid a dollar or cent' himself).
   6. Explained that, 'as crazy as it sounds', he had agreed to guarantee the loans to JFK Co even though there is no written indemnity from Mr Hatziladas. His evidence was that Mr Hatziladas has made or arranged repayments of the loan but accepted that he was 'on the hook for it' (i.e. in the event of default).
   7. Denied that he had effectively bought the project to develop the Brighton Property, explaining that while he 'owns [the] shell company', he does not own the property and does not consider the project to be his.
   8. Confirmed that he still owns the shares in JFK Co and has not transferred them back to Mr Hatziladas (or his entities).
6. In answer to a question from me, Mr Maric also confirmed that he had paid $150 for the transfer of the shares, consistent with the consideration noted in the share transfer.
7. In cross-examination, Mr Hatziladas:
   1. Accepted that the ASIC forms recorded him as beneficially holding the JFK Co shares before the transfer to Mr Maric[30] and that this meant they were not held on trust. In this regard, he confirmed the shares were 'held by myself' or 'in my personal name' (before the transfer) and that (after the transfer) Mr Maric held them 'always for me', 'at the end of the day'. He suggested that his lawyer may have made a mistake in preparing his witness statement to the effect that he held the shares on trust.
   2. Said 'that's me' when taken to the board resolution suggesting that Mr Maric held the shares for Hatz Investments Pty Ltd as trustee for the Hatziladas Family Trust. Further, when Mr Morgan (counsel for the Commissioner) suggested that Hatz Investments Pty Ltd was 'related' to Mr Hatziladas, but was not him, explained that he 'runs' the company and that he and his wife were the beneficiaries of the identified trust. (In response to a question from me, he accepted that, given it was a family trust, the 'beneficiaries' were likely to include other family members and entities as well.)
   3. When taken to the First and Second Declarations of Trust explained that he just signs the documents prepared by his legal and accounting advisers, but again reiterated that the shares in JFK Co were 'always for me' and, while he understood that declaring a trust could result in beneficiaries having an interest in the shares, again suggested they were 'mine at the end of the day'. In other words, he was 'always in control' and they were his shares.
   4. Confirmed he was not aware that duty was payable on a declaration of trust over shares or whether any duty had been paid on any of the Declarations of Trust, although he thought that if a trust has 'no assets', then 'no duty' applies.

1. The relationship between Chapters 2 and 3 of the Duties Act was explained in GJ Grantham Pty Ltd v Commissioner of State Revenue ('GJ Grantham') in the following terms:[31]

The Transfer Duty Provisions in Chapter 2 of the Duties Act deal with the imposition of duty on direct transfers of land (and other 'dutiable transactions' involving 'dutiable property').

The Landholder Duty Provisions in Chapter 3 of the Duties Act deal with the imposition of duty on certain indirect acquisitions of land through the acquisition of shares (or units) in companies (or trusts) which are 'landholders'. For these purposes, a landholder is a company (or trust) holding land in Victoria with a total unencumbered value of $1 million or more.

1. In the context of the 2016 and 2017 Acquisitions, it is relevant to observe that, in assessing landholder duty, a purchaser under an uncompleted agreement for the sale of land is 'taken to be ... entitled to the whole of land'.[32]
2. The rationale for landholder duty, which also provides the context for section 89D, was also explained in GJ Grantham as follows:[33]

the imposition of duty on changes in ownership of companies (and trusts) was originally intended as an anti-avoidance measure to prevent people avoiding duty under the Transfer Duty Provisions by effecting the acquisition of land indirectly through the acquisition of the entity that holds the land.

Consistent with that underlying rationale, there is an exemption from duty under the Landholder Duty Provisions where duty would not apply to a transfer of land, which is found in section 89D of the Duties Act ...

1. In that case, the Tribunal went on to explain how section 89D operates:[34]

section 89D ... requires a comparison of the duty (otherwise) payable under the Landholder Duty Provisions with the duty payable under the Transfer Duty Provisions 'had the subject of the acquisition been a transfer of the land' ...

...

It is beyond doubt that the hypothetical transaction contemplates a direct transfer of the underlying land held by the landholder entity...

It is also beyond doubt that the hypothetical transaction contemplates that the transferee of the underlying land is 'the person' that acquired the interest in the landholder. This is because the only person ever referred to in the provision is the person who acquired the interest.

...

... [I]t is unnecessary to always identify a transferor for the purpose of the hypothetical transaction, although it may be necessary in the context of a particular exemption or concession in relation to the Transfer Duty Provisions.

1. The Commissioner contends that because of the Chapter 2 exemptions being relied upon by the Applicants_,_ it is necessary to identify a transferor in these proceedings, which should be the transferor of the shares.[35]
2. The main Chapter 2 exemption relied upon by the Applicants is the exemption for property passing to beneficiaries of fixed trusts found in section 36(1), which provides:
   1. Property passing to beneficiaries of fixed trusts

(1) No duty is chargeable under this Chapter in respect of a transfer of dutiable property that is subject to a fixed trust (the principal trust) to a beneficiary of the trust if -

(a) the duty (if any) charged by this Act in respect of the dutiable transaction that resulted in the dutiable property becoming subject to the principal trust has been paid or the Commissioner is satisfied that the duty will be paid; and

(b) the beneficiary was a beneficiary at the relevant time; and

(c) the transfer is -

(ii) to the beneficiary as trustee of another trust all the beneficiaries of which are -

• (A) natural persons who were beneficiaries of that other trust at the relevant time; ...

...

(d) the dutiable value of the property transferred does not exceed the value of the beneficiary's interest in the principal trust; and

(e) the Commissioner is satisfied that the transfer is not part of a sale or other arrangement under which there exists any consideration for the transfer.

1. The other Chapter 2 exemption relied upon, in relation to the 2017 Acquisition, is the exemption applicable for a transfer of land on change of trustees found in section 33(3), which provides:
   1. Change in trustees

(1) In this section -

new trustee means a trustee appointed in substitution for a trustee or trustees or a trustee appointed in addition to a trustee or trustees; ...

...

(3) No duty is chargeable under this Chapter in respect of a transfer of dutiable property to a person other than a special trustee if the Commissioner is satisfied that the transfer is made solely -

(a) because of the retirement of a trustee or the appointment of a new trustee, or other change in trustees; and

(b) in order to vest the property in the trustees for the time being entitled to hold it.

1. Of course, both of the exemptions necessarily raise issues of trust law and associated issues concerning the onus of proof in state tax proceedings. In this regard, both parties made reference to Chapter 5 of Jacob's Law of Trusts in Australia ('Law of Trusts').[36] That textbook makes reference to the observations of Dixon CJ, Williams and Fullagar JJ in Kauter v Hilton[37] referencing the 'established rule' that:

in order to constitute a trust the intention to do so must be clear and that it must also be clear what property is subject to the trust and reasonably certain who are the beneficiaries'.

1. In relation to the certainty of intention to create a trust, the authors of the textbook state:[38]

A court cannot hold that an express trust exists unless it is satisfied that there was the intention to create such a trust. The question will be whether there is language or conduct which shows a sufficiently clear intention to create such a trust. No formal or technical words are required; any apt expression of intention will do. The conclusion that the intention existed may be drawn as an inference from the available evidence. In order to infer intention, the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties and known to them ...

... It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created, whether or not the creator is aware of it, provided that in substance the creator's actions have the legal effect of creating the relationship which is known in law as a trust. If the language manifests an intention to create that legal effect, then a trust will be created whether the words 'trust' or 'trustee' are used, or not.

1. In LDY Pty Ltd & Anor v GE & L International Investment Pty Ltd & Ors (No 4) ('LDY'), it was observed that the '[t]he manifestation of the intention [to create a trust] can be established by clear inference'.[39] Of course, '[d]etermining whether the intention was manifested is an objective, not subjective, enquiry'.[40]
2. In the following passage, the authors of the Law of Trusts highlight an English decision, Re Snowden (dec'd),[41] which draws a distinction between a trust relationship and a moral or family obligation:[42]

[T]he deceased had told her solicitor that she was leaving her estate to her brother absolutely in order that the brother might split up the estate between her numerous relatives 'as he thought best'. Sir Robert Megarry VC held that she had merely imposed a moral or family, but not a trust, obligation upon her brother.

1. In addition to the certainty of intention to create a trust, there must be certainty as to the 'object' of the trust (i.e. the beneficiaries or the person or persons for whose benefit the trustee holds particular property). As the authors observe:[43]

The objects of a private trust must be identified with sufficient certainty, failing which the trust will be invalid. The requisite level of certainty depends on whether the trustees are obliged to distribute to a class of beneficiaries (a fixed trust), or have a discretion to select beneficiaries within a class to whom distributions are to be made (a discretionary trust).

In the case of a fixed trust, the objects must be defined with sufficient precision to satisfy 'list certainty'. That will occur if it is possible for the trustees, or the court in their stead, to identify all of the beneficiaries ...

1. Lastly, the authors suggest that if a trust that 'fails both for uncertainty of intention and for uncertainty of object', 'the person to whom the property has been given will retain it unfettered by any trust'.[44]
2. As for the onus of proof, section 110 of the TA Act provides that, on review, 'the taxpayer [i.e. the Applicants] has the onus of proving the taxpayer's case'.
3. The impact of a taxpayer carrying the onus of proof in a case relating to the existence or otherwise of a trust is illustrated in Kloester v Commissioner of State Revenue.[45]
4. In that case, one of the grounds relied upon by the applicants to set aside a duty assessment was that the transfer in question was from the trustee (the parents of the first applicant) of a fixed trust (created orally) to the beneficiary of that trust (the applicants), such that the transfer was exempt under section 36 of the Duties Act. It was suggested that the parents had purchased the property concerned on trust for the applicants because the applicants were unable to obtain finance due to their financial problems.
5. Judge Jenkins rejected that ground, concurring with the Commissioner's analysis that the asserted trust failed for lack of certainty of intention and certainty of object.[46] In discussing the evidence as to the oral declaration of trust, her honour observed:[47]

Mr Kloester relies upon a conversation that happened over 20 years ago, the precise contents of which he cannot recall. His former wife was present during this conversation but has neither provided a witness statement nor been called to give evidence. Equally, neither of the Parents have provided a witness statement for the purpose of the review hearing and were not called to give evidence. Accordingly, there is no corroborative evidence from any other party present to the conversation to which Mr Kloester has referred.

1. I consider it appropriate to start with the 2017 Acquisition because this is the transaction with the most evidence.

1. In the Applicant's Legal Contentions in relation to proceeding Z720/2023 dated 31 May 2024 ('Maric Submissions'), Mr Maric submits that:[48]

the transfer of 150 Ordinary Shares in [JFK Co] (being the total issued shareholding) [was] at all times [held] in the capacity of a Trustee on behalf of [Mr Hatziladas] and his family trust entities and ... accordingly the Transfer of the Shares was an exempt transaction within the meaning of Section 36 of the [Duties Act].

1. In his oral closing submissions, Mr Jegatheesan (counsel for the Applicants) indicated that Mr Maric generally relied on his written submissions and submitted that:
   • Mr Maric's evidence was 'quite clear' that 'he was not holding the shares in JFK Co himself but rather held them on trust'.
   • The Third Declaration of Trust represents a 'positive expression' that the shares were held on trust and therefore satisfies the requirements as to certainty of intention.
   • Despite there being 'difficulty' in identifying the precise legal entity that is beneficiary of that trust, it is 'sufficient' (in terms of certainty of object) that 'all persons for whom [Mr Maric] holds the shares are the same'.
   • To the extent that Mr Hatziladas suggested that, prior to the 2017 Acquisition, he held the JFK Co shares for himself, that was a 'misapprehension' based on being the registered owner, noting that he was not someone with a legal background.

1. In closing submissions on behalf of the Commissioner, Mr Morgan submitted that section 33 of the Duties Act 'does not apply where property is moved from one trust to another even if they have the same beneficiaries'. Rather, to satisfy section 33, Mr Maric would have to establish that Mr Hatziladas held the shares on trust for FAND (Vic) Pty Ltd before the 2017 Acquisition and that he likewise held those shares for FAND (Vic) Pty Ltd after the acquisition. The Commissioner contends that neither matter is established.
2. In this regard, in the Commissioner's written submissions of 25 July 2024 ('Respondent's Contentions'), he submits that the Tribunal 'could not find that there was no change in beneficial ownership of the JFK [Co] shares'.[49] This is because:
   • before the 2017 Acquisition, the shares were either held by Mr Hatziladas beneficially or as trustee for FAND (Vic) Pty Ltd; and
   • after that acquisition, the shares were either held by Mr Maric beneficially or as trustee for Hatz Investments Pty Ltd.
3. In the latter regard, Mr Morgan submitted the Tribunal 'should not accept the [Third] Declaration [of Trust] had effect' as it was inconsistent with the company documents (e.g. the minutes of meeting) and, if it were effective, duty would have been payable on the declaration of the trust, but there is no evidence of any duty having been paid.
4. Mr Morgan suggested that there were three 'options' available to the Tribunal on the evidence:
   • First, given Mr Maric's uncertainty as to whom he held the JFK Co shares for, the Tribunal might find that he has 'not met the burden of proof'.
   • Second, the Tribunal might make a 'positive finding' that the asserted trust failed for lack of certainty of object.
   • Third, if the Tribunal considers that Mr Maric held the shares on trust, it should conclude the beneficiary was Hatz Investments Pty Ltd given this is consistent with the corporate records and documentation that involved Mr Hatziladas (i.e. he attended the Board meeting and signed the share transfer form). By contrast, he observed that Mr Hatziladas is not a party to the Third Declaration of Trust.
5. Further, even if there was no change in beneficial ownership, 'the other requirements of s 33 would not be made out'.[50] Noting that Mr Maric paid $150 for the shares, the Commissioner submits the shares 'were transferred to him, at least in part, because he purchased them for their par value' (which was likely to be the same as their market value at the time) and, as such, 'the transfer was not solely because of the retirement of one trustee and the appointment of another'.[51]

1. Under section 89D(a) of the Duties Act, Mr Maric is only exempt from landholder duty if it is established that a hypothetical transfer of the Brighton Property from Mr Hatziladas to him ('Notional 2014 Land Transfer') would have been exempt from duty under section 33.
2. To be exempt under section 33, the Notional 2014 Land Transfer must have been made solely because of the retirement of one trustee and the appointment of a new trustee and in order to vest the property in the trustee entitled to hold it.
3. The purpose of that exemption was described in Perpetual Trustee Co Ltd v Commissioner of State Revenue as follows:[52]

In such a case [involving a change in trustee] the transfer is not given in consequence of a sale or other disposition of the real property for valuable consideration. In such circumstances it would be unreasonable to charge the instrument of transfer to duty. The beneficial interest has not changed. There has been a mere change in the registered proprietor...

1. Consistently, in Rakmy Pty Ltd v Commissioner of State Revenue,[53] it was made clear that section 33(3) applies to exempt a 'transfer to give effect to a change in trustees of the same trust' but does not apply to exempt a 'transfer of dutiable property between the trustees of two different trusts'.
2. I accept Mr Maric's evidence that he took a transfer of the JFK Co shares on the basis that he would hold them on trust (see [25(b)]). However, it is clear from his evidence that he was never certain as to whom he held those shares on trust for, other than that they were generally held for Mr Hatziladas and/or or his entities (see [25(c)]).
3. In those circumstances, it is arguable that the asserted trust failed for want of certainty of object.
4. Turning to the position immediately prior to the Notional 2014 Land Transfer, while I accept Mr Hatziladas signed two Declarations of Trust in favour of FAND (Vic) Pty Ltd (over his initial 50 shares and then the additional 100 shares acquired from Jim and Fabian), there is reason to doubt his intention to create a trust over those shares in light of his evidence that they were 'always' his (see [27(a) and (c)]).
5. Further, even if I were to accept that the First and Second Declarations of Trust were effective, there would still be the problem that the trusts created by those declarations (i.e. for FAND (Vic) Pty Ltd) is not the same as the trust created by Mr Maric (i.e. for Mr Hatziladas and/or his entities).
6. It follows that the Notional 2014 Land Transfer involved more than a 'mere change in the registered proprietor' and, as such, could not be said to have been a transfer made solely because of a change of trustee of the same trust.
7. For these reasons, Mr Maric has not discharged his onus of proof to establish his entitlement to the section 33 exemption for the Notional 2014 Land Transfer or the section 89D exemption from landholder duty in respect of the 2017 Acquisition.

1. I next turn to the 2016 Acquisition given it also concerns the shares in JFK Co.

1. In the Applicant's Legal Contentions in relation to proceeding Z719/2023 dated 31 May 2024 ('2016 Acquisition Submissions'), Mr Hatziladas appears to make identical submissions to those made by Mr Maric in proceeding Z720/2023. This does not make any sense given that proceeding Z719/2023 concerns the earlier transfer of 50 shares each from Jim and Fabian to Mr Hatziladas.
2. In his closing submissions (on behalf of Mr Hatziladas), Mr Jegatheesan accepted that Mr Hatziladas bears the onus of proof, but submitted that the Tribunal ought to accept his evidence that, while there was some delay in formalising the arrangements, it had been resolved that Jim and Fabian were holding their shares in JFK Co as trustees for Mr Hatziladas and his entities (see [17(d)] and [18]).
3. In relation to the ASIC Form 484 which recorded Jim and Fabian holding the shares beneficially prior to the transfer (see [19]), Mr Jegatheesan observed that those forms were prepared by Mr Hatziladas' accountants (Papathomas & Co Pty Ltd) and submitted that what really matters is the settlor's intention (i.e. the intention of Jim and Fabian).
4. As for the failure to call Jim or Fabian, Mr Jegatheesan says that even where the rule in Jones v Dunkel[54] applies, it only allows a 'neutral' inference (i.e. that the evidence of the witness would not have assisted) rather than an 'adverse' inference (i.e. that the evidence of the witness would have been unhelpful) to be drawn.

1. In his written submissions, the Commissioner contends that 'there is an absence of supporting evidence of the existence of a trust' in circumstances where 'neither [Jim or Fabian] has given evidence of any conversation or other matters that constituted the creation of a trust over the shares that they told ASIC they held beneficially'.[55] He submits that if either Jim or Fabian held their shares on trust for Mr Hatziladas 'one would expect that they could give evidence of the matter' and goes on to provide notice that he may invite the Tribunal to draw a Jones v Dunkel inference.[56]
2. The Commissioner's submissions go on to note that JFK was established by Mr Hatziladas, Jim and Fabian 'as a vehicle for their joint activities' and, as such, submits that it 'could not be concluded that any of them held their shares on trust for another' at the time the company was established.[57] He asks, rhetorically, '[w]hen, then, did this change and by force of what language or conduct?'.[58]
3. The Commissioner concludes that there is 'no basis in the evidence for a finding that, as at April 2016, [Jim and Fabian] held their respective shares in JFK [Co] on trust for Mr Hatziladas'.[59]
4. In closing submissions, Mr Morgan suggested that in light of Mr Hatziladas' evidence, the Commissioner was no longer clear as to what his case is. To the extent that it was being suggested that there is some form of purchase money resulting trust (based on Mr Hatziladas' evidence of paying the costs associated with the Brighton Property), he identified two difficulties:
   • First, at the time that Mr Hatziladas acquired the shares from Jim and Fabian, no purchase money had been paid for the Brighton Property (noting that the Contract of Sale did not provide for any deposit). In this regard, that Mr Hatziladas may have paid a deposit or funded the purchase after April 2016 'does not assist'.
   • Second, the evidence suggests the deposit was funded from various family entities.[60] While Mr Hatziladas' witness statement had referred to an annexure which was to contain 'a true copy of the bank statements and receipts confirming payment of the deposit monies by [his] company', that exhibit 'does not exist'.
5. As such, Mr Morgan reiterated the submission that there was 'no basis to conclude' that Jim and Fabian held their shares on trust for Mr Hatziladas.

1. It is quite clear that, when JFK Co was first registered on 16 March 2007, each of Jim, Fabian and Mr Hatziladas held their shares in the company beneficially.
2. In my view, Mr Hatziladas' evidence that Jim and Fabian agreed to him taking over JFK Co at some time prior to 20 April 2016 (see [17(c)]) is insufficient to establish that Jim and Fabian intended to hold those shares on trust until the arrangements were formalised. This is because:
   1. While it may be accepted that any agreement that Mr Hatziladas would take over JFK Co implies that Jim and Fabian agreed to transfer their shares to Mr Hatziladas, I consider it implausible that they would have agreed to do so without at least receiving the amount paid up on the shares (i.e. $50 each). While an agreement to transfer property in the future, on payment of the agreed consideration, may give rise to some form of equitable interest in the purchaser,[61] this falls short of creating a trust in favour of the purchaser or otherwise conferring beneficial ownership on the purchaser.[62]
   2. Mr Hatziladas had declared a trust in writing over his own shares in JFK Co on 11 September 2015 (see [20] (second row)), shortly before the Contract of Sale to acquire the Brighton Property was signed. In those circumstances, I consider it improbable that the parties would have failed to document the arrangement if there had been some understanding between Mr Hatziladas (on the one hand) and Jim and Fabian (on the other) that the latter would hold their shares on trust for Mr Hatziladas at or around the same time.
   3. Mr Hatziladas' evidence as to the arrangements with Jim and Fabian is extremely vague. In particular, he does not say when the supposed conversations happened or recount what was said. Further, it is non-contemporaneous evidence given that his witness statement was prepared after the proceeding was referred to the Tribunal. Indeed, it is likely to have been prepared around the same time as his statement of legal contentions (May 2024), more than eight years after the events in question.
   4. Mr Hatziladas' evidence is contradicted by the only documentary evidence available. In particular, the ASIC records continued to record Jim and Fabian as the beneficial owners of their shares until they were transferred to Mr Hatziladas (see [19]). Further, the Tribunal Book includes an email from Ms Vicky Mitsianis (whose office address is the same as Mr Hatziladas' office) to Mr Augustinos Papathomas (presumably from Papathomas & Co Pty Ltd) dated 2[63]April 201663 which simply instructs the latter to 'change the company information in relation to JFK [Co]' to 'remove [Jim and Fabian] as directors and shareholder[s] from the company' with Mr Hatziladas 'to hold the shares and directorship'. The absence of any reference to a trust is, in my view, significant.
   5. Mr Hatziladas' evidence is uncorroborated by any other witness whose evidence has been tested. In this regard, Fabian has not provided any witness statement and was not called. While the Tribunal Book includes a Statutory Declaration from Jim which was declared in April 2020,[64] as he was not called to give evidence, his account is not contemporaneous, has not been tested and (significantly) contains details not addressed in Mr Hatziladas' own account. In the latter regard, Jim suggests a discussion about the transfer of shares occurred at a meeting of the directors of JFK Co '[i]n or about August/September 2015', at the conclusion of which, both he and Fabian advised Mr Hatziladas that they 'would both hold [their] initial 50 x Ordinary shares in JFK [Co] on trust for [Mr] Hatziladas until they were formally transferred to [Mr Hatziladas] or his nominee as directed'.[65] If the matter was discussed at a directors' meeting, as Jim claims, it would be expected that Mr Hatziladas would have mentioned it in in his own witness statement. Further, it would also be reasonable to expect there would be some contemporaneous minute of that meeting to corroborate the account. No such document has been produced by the Applicants (noting that Mr Maric presumably has or is able to access JFK Co's register of director's minutes given he is now the company's sole director).
3. On the evidence before the Tribunal, I am not satisfied on the balance of probabilities that Jim and Fabian held their shares on trust for Mr Hatziladas at any time prior to the 2016 Acquisition.
4. For these reasons, Mr Hatziladas has not discharged his onus of proof to establish his entitlement to the section 36 exemption (in respect of the notional transfer of the Brighton Property from Jim and Fabian to him) or the section 89D exemption from landholder duty in respect of the 2016 Acquisition.

1. In the Applicant's Legal Contentions in relation to proceeding Z718/2023 dated 31 May 2024 ('2014 Acquisition Submissions'), Mr Hatziladas submits that the 95 shares that Mr Balderanos held in BRDPL were 'at all times in the capacity of a Trustee on behalf of [Mr Hatziladas] and his family trust entities' and, as such, the exemption in section 36 would have applied to a notional transfer of 95% of the Cheltenham Property from Mr Balderanos to himself.[66]
2. In closing submissions, Mr Jegatheesan accepted that there were some inconsistencies in Mr Hatziladas' witness statement concerning the 2014 Acquisition. For instance, while Mr Hatziladas had suggested that BRDPL had been registered '[s]hortly after purchasing the [Cheltenham] property' (i.e. after 10 March 2014),[67] the ASIC records show that the company was actually registered on 18 February 2014, at least a few weeks before its entry into the Contract of Sale.[68]
3. Nevertheless, Mr Jegatheesan maintained that Mr Balderanos held the 95 shares on trust for Mr Hatziladas, suggesting that the ASIC records recording Mr Balderanos as the beneficial owner of the shares (see [14]) is not conclusive evidence pointing away from a trust. Rather, he suggested the 'relevant evidence is the evidence of the settlor' and suggesting that the witness statement of Mr Hatziladas shows a 'consistent expression of the intent to create a trust' for which the 'lack of contemporaneous documents is not fatal'.
4. Mr Jegatheesan also submitted that there was no need for Mr Balderanos to attend and give evidence because there was evidence that he held the shares on trust for Mr Hatziladas.

1. In his written submissions, the Commissioner suggests there are a 'great many difficulties' with Mr Hatziladas' explanation of the circumstances surrounding Mr Balderanos holding of the shares in BRDPL.[69] In this regard, the Commissioner submits that his explanation is:[70]

almost entirely uncorroborated, either by documentary evidence or by ... Mr Balderanos ... [and] [w]here there is documentary evidence, it is often inconsistent with Mr Hatziladas' explanation. For example, Mr Hatziladas says that Bay Road was incorporated after he personally entered into the Cheltenham Road Contract. In fact, Bay Road had been incorporated first and was the party to the Cheltenham Road Contract, not Mr Hatziladas.

1. Further, the Commissioner submits that the 'role of Mr Balderanos is central to [Mr Hatziladas'] argument', observing that:[71]

If [Mr Balderanos] held his 95 shares on trust for Mr Hatziladas, presumably he would be able to say so. Yet he has not given a witness statement. This fact casts significant doubt on Mr Hatziladas' assertion of a trust relationship.

1. The Commissioner gave notice that he may ask the Tribunal to draw a Jones v Dunkel inference in respect of Mr Balderanos.[72]
2. In any event, the Commissioner submits that Mr Hatziladas' explanation 'for why Mr Balderanos held the 95 shares is vague and unconvincing', observing that he had not explained 'why his potential exposure from another project made it desirable to "hide" his ownership of the Cheltenham [Property] or why, only five months later, this concern had gone'.[73]
3. Noting that Mr Hatziladas' explanation 'consists entirely of self-serving, non-contemporaneous statements of the sort Croft J said [in CDPV Pty Ltd v Commissioner of State Revenue] must be treated with caution',[74] the Commissioner submits the 'Tribunal should not be satisfied that Mr Balderanos held his shares on trust for Mr Hatziladas'.[75]
4. In closing submissions, Mr Morgan maintained that the contention that Mr Balderanos held his shares in BRDPL on trust for Mr Hatziladas was 'not supported by [evidence from] Mr Balderanos or any documents'. Rather, it was 'only based on a witness statement full of errors that could not be relied upon'.
5. Further, to the extent Mr Balderanos held the shares on trust, Mr Morgan contended there was a 'real question as to who the beneficiary was', noting that the purchase money for the Cheltenham property had been provided by various entities and so the shares 'may have been held on trust for Mr Hatziladas' companies or trusts'.
6. Mr Morgan noted Mr Hatziladas evidence that Mr Balderanos was the godfather of one of Mr Hatziladas' children and would 'not do the wrong thing by me or him'. In that context, when Mr Hatziladas referred to Mr Balderanos holding the shares 'on trust', Mr Morgan suggested that he was referring to a 'mere moral obligation' that is insufficient (see [38]).

1. The fact that Mr Hatziladas provided a guarantee in respect of BRDPL's obligations under the Contract of Sale relating to the Cheltenham Property, despite Mr Balderanos being the sole director and shareholder of the company at the time, is inconsistent with the suggestion that Mr Balderanos held the shares in BRDPL beneficially.
2. However, when examined in the totality of the evidence,[76] I am not satisfied (on the balance of probabilities) that Mr Balderanos held those shares on trust for Mr Hatziladas.
3. While I do not consider that Mr Hatziladas' evidence to be dishonest, the many errors in his witness statements demonstrates the unreliability of his narrative.
4. Further, Mr Hatziladas' assertion that Mr Balderanos held the shares in BRDPL on trust for him cannot be accepted at face value because it is evident from his evidence before the Tribunal that he does not really understand what a trust is and therefore fails to distinguish between his assets and those that are held on trust for others.
5. I do not consider the fact that Mr Balderanos transferred the shares to Mr Hatziladas on his own account as corroborative evidence to demonstrate that Mr Balderanos held those shares on fixed trust for him. As already noted (see [15]), any trust was necessarily created at the time the shares were issued to Mr Balderanos. Given Mr Hatziladas' concerns about tax liabilities at that time, it would be entirely inconsistent with his asset protection objective to have Mr Balderanos hold the shares in the company on trust for him. This is because, if a fixed trust of this nature had been created over the shares, those shares would remain available to Mr Hatziladas' creditors.
6. I accept that Mr Hatziladas and Mr Balderanos were close friends and that Mr Hatziladas trusted Mr Balderanos to do the right thing. That tends to speak to a moral rather than legal obligation.
7. However, even if I were to accept there were a more formal arrangement between Mr Hatziladas and Mr Balderanos (despite the lack of any evidence from Mr Balderanos), I consider that, at its highest, the arrangement was to hold the shares on trust for Mr Hatziladas, his family or such of his companies or trusts that he might nominate from time to time. It is by no means clear that an arrangement of that nature satisfies the requirement for certainty of object. However, even if that hurdle was passed, any trust would not meet the description of a 'fixed trust' because the beneficiary or beneficiaries that might take the shares remains unknown unless and until such nomination occurs.
8. For these reasons, I am not satisfied on the evidence before the Tribunal that the notional transfer of the Cheltenham Property from Mr Balderanos to Mr Hatziladas would be exempt from duty under section 36 of the Duties Act or that the exemption in section 89(a) applies to exempt Mr Hatziladas from the landholder duty otherwise payable on his acquisition of 95 shares in JFK Co.

1. In accordance with the Tribunal's current procedures, proceedings are only listed for hearing following the filing of a Tribunal Book which is required to 'contain all the material upon which the parties will seek to rely at the hearing'.[77] The Tribunal Book in these proceedings was filed in August 2024 following the exchange of evidence and statements of legal contentions between the parties.[78] While the Applicants were given the opportunity to provide 'materials in reply' following the filing of the Commissioner's statement of legal contentions,[79] they chose not to file any such material.[80]
2. On 20 September 2024, the Commissioner's solicitors wrote to the Tribunal indicating that the parties 'jointly request the Tribunal to make orders to list the proceedings for a hearing'. Orders were made on 25 September 2024 listing the applications for a two day hearing, in person at 55 King Street, Melbourne, starting on Thursday 12 June 2025.
3. On 30 May 2025, VCAT's registry wrote to the parties to advise that I would be unavailable on 12 June 2025 and seeking to confirm their availability for the hearing to instead proceed on Friday 13 June 2025 and Monday 16 June 2025.
4. In correspondence with VCAT on 4 June 2025, the Applicants' solicitor confirmed his availability on those dates but:
   • noted that, because of health issues, he was 'in the process of preparing a brief for counsel to appear at the hearing on behalf of [the Applicants]';
   • raised his 'concerns that counsel may have insufficient time to properly prepare for the hearings'; and
   • suggested that 'ideally' a 'short adjournment would ensure that counsel has sufficient time to prepare'.
5. An urgent directions hearing was listed on 10 June 2025 to consider the request for an adjournment. The Applicants' solicitor filed a document entitled 'Submissions for Direction Hearing: 10 June 2025 at 2pm' providing an explanation of his health issues and noting that:
   • he had 'recommended to [the Applicants] that [they] seek alternative legal representation for this proceeding'; and
   • the Applicants had 'accepted this advice' and had agreed to engage counsel, but were 'concerned that there will be insufficient time for a new legal representative, to become familiar with the file' and had been 'unable to secure a barrister at short notice for what is a reasonably complex matter'.
6. For reasons given (and briefly outlined in the orders), I further adjourned the hearing to start on Monday 16 June 2025 and proceed on Tuesday 17 June 2025.
7. On 11 June 2025, the Applicants' solicitor again wrote to the Tribunal indicating that the Applicants had attempted to retain an alternative firm to act for them, but the firm declined to take instructions 'at such short notice'. The correspondence goes on to 'again request an adjournment' and note that Mr Hatziladas was 'presently in Denver Colorado' and, if the hearing were to proceed, he would need to attend by video link. The Tribunal declined to schedule a further directions hearing, instead indicating that any applications (for adjournment or otherwise) could be dealt with at the start of the hearing.
8. When the hearing started on 16 June 2025, Mr Jegatheesan made a further adjournment application on behalf of the Applicants. He did so on the bases that:
   • Mr Hatziladas was in Denver, Colorado.
   • The Applicants' solicitor was only able to participate online due to medical procedures later that day.
   • The Commissioner had criticised the Applicant's failure to call witnesses, such as Mr Balderanos, Jim and Fabian. An adjournment would allow him to give the Applicants 'proper advice' which he considered would reduce the hearing to one day, most likely focused on legal issues.
9. Mr Hatziladas was then called to give evidence by video link (and be cross-examined) on the circumstances in which he was in Denver, Colorado on the first day of hearing. The Applicants' solicitor also briefly gave evidence (and was cross-examined).
10. After I heard that evidence and the submissions from both parties, I refused any further adjournment and indicated that I would provide my reasons for doing so as part of the reasons for decision in respect of the proceedings.
11. In circumstances where the Applicants were now represented by counsel, Mr Maric was present in person, Mr Hatziladas was available by video link and the Commissioner was also ready to proceed, I considered that any further adjournment would be prejudicial to the expeditious determination of the proceeding, contrary to efficient case management and was otherwise not justified.
12. In this regard, it seemed to me that the Applicants were seeking an opportunity to address the absence of witness statements from Mr Balderanos and Jim in circumstances where they had been on notice of the Commissioner's contentions (including the potential request for Jones v Dunkel inferences to be drawn) since receiving the Commissioner's submissions (in July 2024) and had chosen not to file any reply material in accordance with the Tribunal's procedural orders. Even if an adjournment was granted, the Applicants would need leave to file any further material and, should such leave be granted, the Commissioner would need to be given an opportunity to respond.
13. All of that would simply be productive of considerable delay and prejudicial to:
    • the Commissioner, in terms of unrecoverable additional costs;[81]
    • the Tribunal, as time had been set aside for me to prepare for and conduct the hearing and then to write a decision, and it would not be possible to bring forward another case on such short notice; and
    • other parties, whose hearings and matters would be adversely impacted by any adjournment granted.

[1] Applicant Witness Statement of Kleanthe Hatzialadas for proceeding Z718/2023 (undated) ('Hatziladas FWS') [2]: Tribunal Book ('TB'), 670-674.

[2] Applicant Witness Statement of Zelko Maric dated 3 June 2024 ('Maric WS') [3]: TB, 894-898.