Under s 111(1) of the Taxation Administration Act 1997 (Vic), the assessment of the applicant to duty under Chapter 3 of the Duties Act 2000 (Vic) made on 20 November 2023 is varied to remit the penalty tax from $19,349.40 to $12,899.60 but is otherwise confirmed.

1. This proceeding concerns the assessment of Kid Kickstart Investment Group Pty Ltd ('Company') to landholder duty of $64,498 under Chapter 3 of the Duties Act 2000 (Vic) ('Duties Act') made by the Commissioner of State Revenue ('Commissioner') on 20 November 2023 ('Assessment'). The Assessment also imposed penalty tax and interest under the Taxation Administration Act 1997 (Vic) ('TA Act').
2. The Company was assessed to landholder duty in respect of two transactions relating to its shares:

(a) The 'First Acquisition' took place on 10 April 2018 when Ms Tuyen Thi Tran ('Ms Tran'), the sole director of the Company, transferred 600 shares owned by her (representing 50% of the total issued capital) to her three younger sisters as follows:

• Tam Hoa Tran ('Hoa'): 234 shares;
• Tam Dieu Tran ('Dieu'): 132 shares; and
• Tuyet Tran ('Tuyet'): 234 shares.[1]

(b) The 'Second Acquisition' took place on or about 18 January 2019, when each of Hoa, Dieu and Tuyet transferred the shares they held back to Ms Tran.

1. Save for some limited exceptions, the acquisition of 50% or more of the shares in a company that is a 'landholder' is subject to landholder duty.
2. Although each of Ms Tran's sisters acquired less than 50% of the Company, the landholder duty provisions allow for aggregation of interests acquired where the acquirers are 'related persons' or the interests are acquired by way of 'associated transactions'. As sisters, Hoa, Dieu and Tuyet are related persons. Further, as they acquired their shares from Ms Tran at the same time and under the same terms (except as to the number of shares), there is no doubt they acquired their shares in associated transactions.
3. There is also aggregation of separate parcels of shares acquired by the same person, as was the case with the Second Acquisition.
4. At all relevant times, the Company was the owner of land in Victoria worth in excess of $1 million, being a property located at 312-314 Burnley Street, Richmond ('Relevant Property') and, as such, a 'landholder'.
5. Where landholder duty applies, the person(s) making the acquisition and the landholder itself, are joint and severally liable.
6. Despite the foregoing, Ms Tran contends that no landholder duty should be imposed on the Company on the basis that the share sale agreements between her and her sisters required that they each contribute $200,000 to the Company by way of shareholder loan, which they failed to do. While she does not say so expressly, her essential argument was that the transfers the subject of the First Acquisition were void or ineffective (and likewise, the Second Acquisition was just 'paperwork').
7. Further, Ms Tran says that, because of her limited English,[2] and lack of legal knowledge, she was not aware that duty could apply to the share transfers and it was all a mistake.
8. For the reasons set out below, the share transfers the subject of both the First Acquisition and Second Acquisition were effective to provide the transferee(s) with the right to 50% of the property of the Company on a winding up and, as such, the landholder duty was correctly imposed.
9. Further, while it is appropriate to give effect to the Commissioner's determination to reduce the penalty tax from 30% to 20% of the tax default, there is no basis for the Tribunal to exercise the discretion to further remit the penalty tax or interest.

Background as to applicant, its acquisition of the relevant property and the share transfers

1. The Company was incorporated on 14 November 2017, and at all relevant times, Ms Tran has been the Company's sole director and secretary.[3] At the time of incorporation, Ms Tran was also the sole shareholder of the Company (being the registered holder of 1200 ordinary shares of $1.00 each).
2. The Company became the registered proprietor of the Relevant Property on 9 April 2018.[4]
3. At 5:00pm on the next day, a director and shareholders meeting was held at the offices of Wayne Wong & Associates, a law firm.[5] The minutes of meeting ('Minutes') record the attendance of Ms Tran (as chairperson) and her sisters, even though they were not directors or, at the time, shareholders.[6] The Minutes go on to record that:

The following applications for transfer of shares and the form of Transfer of Shares executed by the following parties are hereby approved and confirmed:

Transferor: Tuyen Thi Tran

Transferee: Thi Tuyet Tran

Number of Shares: 234 ordinary shares

Value of Share: $234.00 ($1.00 per share)

Date of Effect: 10 / 04 / 2018

Transferor: Tuyen Thi Tran

Transferee: Thi Tam Hoa Tran

Number of Shares: 234 ordinary shares

Value of Share: $234.00 ($1.00 per share)

Date of Effect: 10 / 04 / 2018

Transferor: Tuyen Thi Tran

Transferee: Thi Tam Dieu Tran

Number of Shares: 132 ordinary shares

Value of Share: $132.00 ($1.00 per share)

Date of Effect: 10 / 04 / 2018

1. The Minutes also record that:
   • The share sale agreements between Ms Tran and each of her sisters were 'affirmed and approved by the company for the Company to execute'.
   • Ms Tran (as sole director) was 'directed to record all the changes in the register of the company members'.
2. The Tribunal Book includes the signed Share Transfer Forms,[7] as well as the Share Sale Agreements between Ms Tran, the Company and each of Ms Tran's sisters ('SSAs').[8]
3. The operative provisions of the SSAs, so far as relevant to this proceeding, provide that:
   • Cl 2 (Sale and Purchase):

'2.2 In consideration of the purchase price [i.e. the value of the share identified above] ... paid to the Vendor [i.e. Ms Tran] by the Purchaser [i.e. each sister], the Vendor agrees to sale (sic) and transfer to the Purchaser the number of Ordinary Shares [as set out above] ...'.

The Purchase Price ... must be paid by the Purchasers to the Vendor as follows:

(a) a deposit (10% of the purchase price) ... payable on the date hereof and the receipt of which shall be acknowledged by the Vendor; and

(b) the balance of the Purchase Price ... payable on the Completion Date'.

• Cl 3.2: 'Shares passed to the Purchaser upon Payment of Balance of Price

In consideration of the Purchase Price .... Paid by the Purchaser, [the Shares] shall be sold and transferred to the Purchaser by the Vendor ... on the Completion Date'.

'5.1.1. Completion of the sale of the Shares is conditional on fulfilment of the following conditions which are for the benefit of the Purchaser and may be waived only by the Purchaser:-

(i) the Purchaser has provided Finance to the Company in accordance with Subclause 5.1.3 hereof this Agreement;

If any of the conditions contained in clause 5.1 hereof are not fulfilled or waived by the Purchaser on or before the Completion Date then this agreement may be terminated by written notice by the Purchaser. If this agreement is terminated by the Purchaser pursuant to this clause, all monies paid by the Purchaser to the vendor shall be refunded to the Purchaser as soon as reasonably practicable.

5.1.2 Completion of the sale of the Shares is subject to and conditional upon that the Purchaser provides finance to the Company by way of contributing to and making a payment to the company in a sum of Two Hundred Thousand Dollars ($200,000.00) being an unconditional and interest-free shareholder's loan to the company on or before the Completion Date and upon receipt of such payment, the Company shall make an immediate payment of an amount equivalent to $200,000.00 to the Vendor as a refund and repayment of the shareholder's loan previously advanced to the Company by the Vendor of which shall completely satisfy a partial clearance and release of the debts and liabilities owed by the Company to the Vendor in proportion to the amount that the Company has repaid the Vendor.

5.1.3 Notwithstanding the provision of Subclause 5.1.2, it is agreed by the parties that it is a pivotal and essential condition precedent of this Agreement that the Purchaser must make and complete the payment no less than $200,000.00 as specified by Subclause 5.1.2 on or before 30th September 2018. The Purchaser's failure to comply with this subclause will amount to a fundamental and essential breach of contract and as a result of breach, the Vendor is entitled to, apart from all her rights at law and equity, immediately terminate this Agreement and reinstate the shares and transfer the shares back to the vendor if they have been transferred without a need to giving any notice to the Purchaser. For the purpose of this subclause, the Purchaser irrevocably and exclusively appoints the Vendor as her attorney to sign and execute on behalf of the Purchaser any instruments or documents or agreements in transferring the shares back to the Vendor as for the purpose to give effect of this Subclause.'

'9.2 On the Completion Date the Vendor must: -

(a) transfer and deliver the number of Ordinary Shares to the Purchaser pursuant to Clause 2 and 3 of this agreement;

(b) deliver or cause the Company to issue and deliver to the Purchaser:-

(i) the share certificate(s) in respect of the Shares to effect the transfer;

(ii) properly executed transfers of the Shares to the Purchaser, such transfers to be in a registrable form and signed by the Vendor;

(c) procure the Board to resolve that the aforesaid transfers of Shares are registered (subject to the payment of any stamp duty on the said transfers which will be borne by the Purchaser[)] in the books of the Company;

(e) procure or cause the Company or the Board to timely register the transfer or change of shares and shareholder's details with ASIC in accordance with the Corporations Act 2001;

(g) make necessary updates alterations or amendments to the Company's Share Register [and] Register of Member[s] ... to reflect the transfer of the shares and change of details of shareholders pursuant to provisions of this agreement;'.

• Cl 9.3: 'Obligations of the Company on Completion

(a) ensure that a duly convened board meeting of the Company is held at which a quorum of directors is present and acting throughout at which:

(i) the transfer of the Shares to the Purchaser, the cancellation of the existing share certificates for the Shares and the sealing and delivery by the Company to the Purchaser of new share certificates for the Shares in the name of the Purchaser are each approved;'

• Cl 12 (Entire Agreement): 'This Agreement sets forth the entire agreement and contains understanding between the parties hereto with respect to its subject matter hereof and supersedes all prior agreements understandings and representations between the parties in connection with it.'
• Schedule 1:

Date of this Agreement: 10 April 2018[9]

Business of the Company: residential property development

The Purchaser warrants and undertakes to make and complete the payment for an amount of no less than $200,000.00 as specified by Subclause 5.1.2 on or before 30th September 2018.

Date the shares shall be transferred to the Purchaser

... (10% @ [amount of purchase price]) payable by the Purchaser to TUYEN THI TRAN (the Vendor) on the date of this Agreement

... payable by the Purchaser to TUYEN THI TRAN (the Vendor) on 10/04/2018[11]

The date on which each of the Conditions Precedent have been completed but not later than 01/10/2018 or upon such a date when the condition set by Subclause 5.1.3 is completed, whichever is later.[12]

1. Some points about the terms of the SSAs should be noted:
   • The amount of the shareholder loan to be provided by Hoa, Dieu and Tuyet was the same, notwithstanding the differences in the number of shares being acquired by each of Ms Tran's sisters. This is somewhat inconsistent with there being a link between the provision of the shareholder loans and the entitlement of Ms Tran's sisters to a transfer of the shares.
   • The obligation to provide the shareholder loans is described consistently as a 'condition precedent'. However, it is clear that the loans were to be advanced on a date (i.e. by 30 September 2018) which was well after the deposit and purchase price for the shares was to be paid, and the shares were required to be transferred to each of Ms Tran's sisters (i.e. on 10 April 2018, see Item 7 of the Schedule). This is buttressed by the mechanism in clause 5.1.3 to enable Ms Tran to affect a transfer back of those shares in the event the shareholder loan was not provided. In those circumstances, the provision of finance was not a condition precedent to the binding obligation on Ms Tran to transfer the shares to her sisters.[13]
   • Clause 5.1.2 envisaged that the shareholder loans provided by each of Ms Tran's sisters to the Company would be used by the Company to repay shareholder loans that she had advanced to the Company. However, in the Minutes it was 'confirmed and approved that the current shareholder loan from XIA JIN in a total sum of $600,000.00 shall be fully repaid to her by the company [using the funds from Ms Tran's sisters]'. In cross-examination, Ms Tran was unable to say who Xia Jin was, but suggested that the Company had in fact borrowed $600,000 from a lender by the name of 'RedZed'[14] to fund the balance of the purchase price of the Relevant Property.

Further, Ms Tran went on to suggest that the shareholder loans from her sisters were 'just paperwork' and that the transfers were only made so that, if Ms Tran were to pass away, her sisters could sell the Relevant Property to look after her children. When it was put to her by Mr Chaile (counsel for the Commissioner) that this explanation did not make sense (given her sisters could become shareholders without agreeing to provide shareholder loans), Ms Tran said that she initially wanted the loans from her sisters to pay to the lenders, but her sisters were unable to pay her.

1. The Tribunal Book includes limited documentation relating to the Second Acquisition. Unlike the First Acquisition, there are no share transfers, share sale agreements, minutes of any meeting or extracts from the company's share registers before the Tribunal. However, it can be observed that the Second Acquisition is consistent with clause 5.1.3 of the SSAs which envisaged that there would be a transfer back to Ms Tran of the shares held by her sisters in the event they did not provide the shareholder loans required. Further, the following 'changes to the register of members' are reflected in an ASIC Form 484 'Change to company details' which was (electronically) certified as true and correct by Ms Tran on 21 January 2019:[15]
   • Tuyet's shareholding decreased by '-234' on 18 January 2019, with the total number now held by her being recorded as '0'.
   • Ms Tran's shareholding increased by '600' on 18 January 2019, with the total number of shares now held being '1200'.
   • Hoa's shareholding decreased by '-234' on 18 January 2019, with the total number now held by her being recorded as '0'.
   • Dieu's shareholding decreased by '-132' on 18 January 2019, with the total number now held by her being recorded as '0'.

1. Ms Tran did not file formal submissions, although she sent the Commissioner an email on 7 July 2024 with the subject line of 'Request for reconsideration of taxes and penalties due to uncompleted share transfer'.[16]
2. In that email, Ms Tran writes to 'present this case of incorrect tax and penalty charges' explaining that:

On the 10th April 2018, at 5pm I asked the 1awyer to transfer 50% of shares to three of my sisters. At that time If I had a good lawyer he would have stopped me from doing it because I already signed with the company Cornwall Stodart to have 100% of the shares. However, my lawyer didn't advise me correctly and he proceeded to help with my request without letting me know I had to pay a tax transfer fee.

In an effort to attract more investors to the company I signed an agreement to sell 50% of the shares to my three sisters ...

However, after signing the agreement, my sisters Tuyet and Tam Hoa (who reside in Vietnam) discovered that transferring a large amount of money overseas was very complicated. Therefore they were unable to fulfil their financial obligations to complete the share transfer process.

Due to my lack of legal knowledge and English, I didn't update the information about this uncompleted transaction. I should have contacted the State Revenue Office to let them know about the incomplete transfer. But because my English isn't very good I did not contact them directly so they were unaware of the incomplete transfer.

...

Later on I borrowed $600,000 from Perpetual Trustee Company Limited. The requirement of borrowing this money was also that I had 100% of the shares. I just signed paperwork with the requirement from the broker to transfer the names from the shareholders back to me. It was only paperwork, not the real process of paying back money to shareholders. You can check my bank account and see that I didn't transfer money back to shareholders, therefore no shares were sold. I signed the paperwork on the 18th of January 2019. At that time I had 100% of the shares.

...

I realise that due to my lack of understanding and over reliance on lawyers, I signed all the documents without fully comprehending their content or tax laws. The lawyers did not guide me properly, leading to these mistakes. l am very sorry and respectfully request that you reconsider my case and verify the taxes I must pay, as these transactions did not actually occur.

1. Doing the best I can, my understanding of the Company's contention is that no landholder duty should apply because the First Acquisition was never completed due to the failure of Ms Tran's sisters to provide the shareholder loans required under the SSAs. Further, the Second Acquisition did not have legal effect as a transfer because no shares were sold to her.
2. Insofar as penalty tax is concerned, the Company appears to submit that this should be remitted because the lawyer failed to advise Ms Tran and her Company properly as to the duty consequences of the transaction(s) into which she entered.
3. In her closing submissions, Ms Tran submitted that 'one of the root causes' of the Company's duty issues was because of her 'limited English' and because she has 'no knowledge of the legal system' and 'could not afford a lawyer'. She said she 'blamed everything as a stupid mistake' and has 'learnt a lesson in a very hard way'. She hoped for 'some leniency and sympathy in the situation'.

1. In the Commissioner's Statement of Legal Contentions ('CSLC'),[17] it is contended that while Ms Tran's submissions 'purport to provide an explanation for the Acquisitions', they 'do not establish an exemption from the Company's liability to duty under Chapter 3 of the Duties Act, nor provide any reason why the Company should not otherwise be liable to duty'.[18]
2. The Commissioner submits 'the only outcome on the application of the provisions in Chapter 3 to the relevant circumstances is that the Company is liable to duty by virtue of the Acquisitions'.[19]
3. While the Commissioner's written submissions do not step through the basis of this conclusion, in closing submissions, Mr Chaile made the following points:
   • The 'first element' of Chapter 3 of the Duties Act is 'proof that the applicant is a landholder'. He suggested that it was 'not disputed' that the value of the Relevant Property was $1.7 million at the time of the acquisitions, noting that was the consideration paid by the Company when it acquired the property in March 2018[20] (i.e. shortly before the First Acquisition) and was confirmed to be its value in January 2019[21] (i.e. shortly before the Second Acquisition). Accordingly, it was submitted that the Company was a landholder as defined in section 71 of the Duties Act 'at the time of both [share] transfers'.
   • The share transfer forms and the changes to the register of members of the Company were 'sufficient to prove the First Acquisition'. This is because section 176 of the Corporations Act 2001 (Cth) ('Corporations Act') provides that, in the absence of evidence to the contrary, the register of members is proof of the matters shown in the register. It was submitted there was no evidence to the contrary in this case.
   • Aggregation of the shares acquired by each of Ms Tran's sisters in the First Acquisition was permitted because the sisters were 'associated persons' or acquired their interests 'as part of a single arrangement' in that they either acquired their interests in order to ensure they could look after Ms Tran's children (in the event of her passing) or in order to provide shareholder loans to repay the Company's debts. As they collectively acquired 50% of the shares in the Company, this was a 'significant interest' and hence the First Acquisition was a 'relevant acquisition' under section 78.
   • While the evidence in relation to the Second Acquisition was 'different', it 'could be inferred' the transfers had been effected from the ASIC form lodged (see [19]) and the operation of section 1017B(2) of the Corporations Act, which provides that a company can only transfer shares if there is a proper instrument of transfer.
   • The further 50% interest acquired by Ms Tran in the Second Acquisition was 'in and of itself' a significant interest. Chapter 3 does not state that holding a significant interest in a company (i.e. the original 50% interest held by Ms Tran) 'precludes obtaining a further significant interest'.
4. Although not raised by Ms Tran, Mr Chaile went on to address (and discount) the availability of the exemptions from landholder duty. In particular, Mr Chaile acknowledged that section 89F of the Duties Act provides a concession for 'acquisitions securing the provision of finance'. He submitted this could not apply because 'no finance was provided' by Ms Tran's sisters to her (or the Company) and noting that Ms Tran 'prevaricated in her evidence as to the purpose of the transfer'. If her explanation about ensuring her children would be looked after in the event of her passing was accepted, even if finance had been provided, it would not satisfy the 'sole purpose' test set out in the provision. Further, there was no acquisition statement lodged by Ms Tran or the Company which is 'a precondition' to the exemption.
5. In terms of penalty tax, Mr Chaile submitted that Ms Tran had not taken 'reasonable care' in that she had not sought legal advice on the duty consequences of either transaction and, in fact, 'did not obtain any legal assistance for the Second Acquisition' (with the ASIC forms prepared by a broker or accountant). Further, she had not made any voluntary disclosure and there was a 'shifting element' in her explanations as to the purpose of the shareholder loans (see [18], last dot point). In any event, Ms Tran's 'personal hardship and misunderstanding is insufficient to satisfy the requirements of section 30(3)' of the TA Act. Similarly, the 'authorities make clear that complexity alone is insufficient as reasonable care is objective'.
6. Mr Chaile confirmed that, in light of the Commissioner's determination (reducing the penalty tax from 30% to 20% of the duty), it was 'sufficient [for the Tribunal] to confirm the assessment including the reduction in penalty tax', or the Tribunal could vary the penalty tax.

1. As indicated at the outset of these Reasons (see [3]), the acquisition of 50% or more of the shares in a company that is a 'landholder' is subject to landholder duty.
2. Based on the consideration paid to acquire the Relevant Property, and the subsequent valuation obtained in 2019, I am satisfied that the Company owned land worth greater than $1 million at all relevant times and, as such, was a landholder as defined in section 71 of the Duties Act.
3. In relation to the First Acquisition, I am satisfied that each of Hoa, Dieu and Tuyet acquired an interest in the Company on 10 April 2018.
4. An interest is defined in section 79(1) of the Duties Act as 'an entitlement ... to a distribution of property from the landholder on a winding up of the landholder'. It has been observed that a shareholder's 'interest in the surplus on the winding up of [a] company is a legal right to a proportionate share of any surplus of assets of the company, remaining after all liabilities have been paid'.[22] Further, it is a 'legal right which attaches to the shareholding itself'.[23]
5. Hoa, Dieu and Tuyet became shareholders of the Company when the transfers from Ms Tran to them were approved at the meeting held on 10 April 2018 and their names were entered into the register of members.
6. Under section 176 of the Corporations Act, the register of members is proof of the matters shown in it (i.e. that Hoa, Dieu and Tuyet were members of the Company), 'in the absence of evidence to the contrary'.
7. For the reasons explained at [18] (second dot point), the provision by Hoa, Dieu and Tuyet of shareholder loans to the Company did not operate as a condition precedent to their entitlement to have the shares transferred to them and for them to be registered as members of the Company. To the contrary, the SSAs contemplated that the shares passed to them on payment of the balance of the purchase price, which took place on 10 April 2018. It follows that their subsequent failure to provide the loans is not evidence to the contrary of the kind that might rebut or displace the operation of [24]ction 176.24
8. The interest in the Company acquired by each of Hoa, Dieu and Tuyet was less than 50% and, as such, was not 'of itself a significant interest' giving rise to a 'relevant acquisition' under section 78(1)(a)(i) of the Duties Act. However, under section 78(1)(a)(ii), a relevant acquisition is made if a person acquires an interest 'that amounts to a significant interest ... when aggregated with other interests ... acquired by ... an associated person; or any other person in an associated transaction'.
9. As Hoa, Dieu and Tuyet are sisters, they are associated persons under the Duties Act.[25]
10. Further, having regard to Judge Macnamara's decision in Oliver Hume Property Funds (Broad Gully Rd) Diamond Creek Pty Ltd v Commissioner of State Revenue,[26] it is also clear that their acquisitions are 'associated transactions' as defined[27] because they 'form, evidence, give effect to or arise from substantially one arrangement' in circumstances where:
    • the vendor of each parcel of shares was Ms Tran;
    • save as to the quantum of shares acquired, the terms on which the shares were acquired by each sister was identical, including as to the amount of the shareholder loan required to be provided;
    • the documentation to give effect to the share transfers was all signed on the same day, i.e. 10 April 2018; and
    • the documentation to give effect to the share transfers was approved at a meeting which was attended by each sister.
11. Accordingly, the First Acquisition was a relevant acquisition under section 78 and hence a liability for duty under Chapter 2 arose when those transfers were made.[28]
12. Although there is an absence of documentation relating to the Second Acquisition, there is little doubt that there were transfers of the shares held by each of Hoa, Dieu and Tuyet back to Ms Tran on or about 18 January 2019 as reflected in the ASIC form 484, which Ms Tran confirmed to be 'true and complete' on 21 January 2019 and which recorded the changes that had been made to the register of members.
13. The Second Acquisition also gave rise to a relevant acquisition under section 78(1)(a)(ii) because the interest which Ms Tran acquired from Hoa (i.e. 234 shares representing a 19.5% interest) on or about 18 January 2019 'amounts to a significant interest [i.e. of 50%] in the landholder [i.e. the Company] when aggregated with other interests in the landholder acquired by ... the person [i.e. Ms Tran]' being the interests acquired from Dieu and Tuyet.
14. Under section 85(1)(b), the Company as the relevant 'landholder' was jointly and severally liable to pay the duty in respect of each acquisition. It follows that the Assessment issued to it is correct.
15. While Ms Tran has not sought to contend that any of the exemptions from landholder duty apply, I agree with the Commissioner's submissions that the duty concession for acquisitions securing the provision of finance does not apply to the First Acquisition. This is because any finance has to be provided by 'the person acquiring the interest ... to the person from whom the interest ... is acquired'.[29] The shareholder loans provided for in the SSAs were never advanced by Ms Tran's sisters and, in any event, the finance was to be provided to the Company, rather than Ms Tran.
16. Further, none of the more specific exemptions in section 89D are applicable in the circumstances.
17. There is a further concession in section 89E for cases where there is an 'anomalous duty outcome'. However, this is contingent on the 'duty payable' under Chapter 3 being 'greater than the duty that would be payable under Chapter 2 [i.e. transfer duty] had the subject of the relevant acquisition been a transfer of the land of the landholder to the person'. That concession could not apply as transfer duty would apply to the transfer of a 50% interest in the Relevant Property to Ms Tran's sisters (in respect of the First Acquisition) and Ms Tran (in respect of the Second Acquisition). Further, there is nothing about the imposition of landholder duty in the present case that could be accurately described as an 'anomalous duty outcome'.
18. For these reasons, I am satisfied the imposition of landholder duty on the Company in respect of both the First and Second Acquisitions was 'correct' and the Assessment should be confirmed to this extent.

1. Under section 30(1) of the TA Act, the base amount of penalty tax is 25% of the amount of tax unpaid. However, the TA Act allows for that percentage to be automatically increased or reduced to reflect a statutory assessment of the culpability of the taxpayer.
2. An example of circumstances where the penalty tax may be increased is found in section 32(1), which provides the amount of penalty tax can be increased by 20% (i.e. from a rate of 25% to a rate of 30%) if:

after the Commissioner commences an investigation into a known or suspected tax default or notification default by the taxpayer and before the investigation is completed, the taxpayer took steps to prevent or hinder the Commissioner from becoming aware of the nature and extent of the default in whole or part.

1. Examples of circumstances where the penalty tax may be reduced are found in sections 30(3) and 31. Section 30(3)(a) provides that the Commissioner may determine that no penalty tax is payable where he is satisfied that the 'taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the taxation law'. Section 31 provides for the penalty to be reduced where a taxpayer makes voluntary disclosure of 'sufficient information to enable the nature and extent of the default to be determined'. If this occurs before an investigation commences, the penalty tax is reduced by 80%.[30] If the voluntary disclosure is made after an investigation commences, the reduction is 20%.[31]
2. As noted, the Company was originally assessed to penalty tax at the rate of 30%. This appears to reflect an increase from the base penalty on the basis that the Company took steps to prevent or hinder the Commissioner becoming aware of the nature and extent of the default. However, the Commissioner did not seek to argue that this increase ought apply, and there is nothing in the material before the Tribunal which would support a finding that the Company (through Ms Tran) took the kind of steps referred to in section 32(1).
3. It is true that the Company failed to lodge an acquisition statement (as required under section 83(1) of the Duties Act) which would have alerted the Commissioner to the liability. However, this was a result of Ms Tran's admitted ignorance of the law. It cannot be characterised as a step which was taken to prevent or hinder the Commissioner.
4. In the Commissioner's determination of the Company's objection in January 2024 ('Determination'),[32] the Commissioner determined that the rate of penalty tax should be reduced from the standard rate to 20% 'in recognition of the fact that sufficient information was provided to the Commissioner during the Investigation to enable the nature and extent of the tax defaults in the present matter to be determined'. The Commissioner did not seek to resile from that conclusion before the Tribunal. On the facts before the Tribunal, I agree that the penalty tax should be reduced by 20% reflecting voluntary disclosure after the commencement of the Commissioner's investigation.
5. Turning to section 30(3)(a), and the question of whether the Company took reasonable care to comply with its duty obligations, it is relevant to observe that the explanation provided for incurring the landholder duty is essentially that the lawyer engaged to act for it failed to advise Ms Tran that the First Acquisition (or the Second Acquisition if triggered by a failure of her sisters to provide the shareholder loans) would give rise to landholder duty (see [21]).
6. In this regard, it should be noted that the Tribunal Book includes an email from the relevant firm (Wayne Wong and Associates) to the State Revenue Office dated 28 June 2023 providing the following explanation as to their involvement in the acquisitions:

[O]ur firm was instructed to act for Ms. Tran and her company Kid Kickstart Investment Group Pty Ltd to prepare draft share sale and transfer documents as well as lodgement of company changes with ASIC in or about April 2018. The purpose of transfer of share is the company seeking to acquire shareholders loan from the transferee to the company. As indicated in the share sale agreement, the transfer of share is subject and conditional upon the transferees to advance a certain amount of shareholders loan to the company. We were not acting for the transferees of the shares and they were advised to seek independent legal advice before their entering into the agreement.

We are not aware that the subsequent transaction of share transfers took place in May 2019 as indicated in your email and did not have instruction to act in those transactions. After discussion with Ms Tran and relevant search, it is revealed that the change of share was lodged by an accounting firm according to Ms. Tran. Please verify it with Ms Tran for details.

Ms Tran further advised that all the transferees relating to the first transactions of share transfers failed to pay the loan amount to the company pursuant to the condition of the share transfer, and hence the share sale agreement had not been complied with by repudiation of contract.

1. While it may be accepted that the law firm was not acting for Ms Tran's sisters (and so could not be obliged to provide them with duty advice), it is unclear from that response whether the firm advised Ms Tran or the Company of the possibility that, if landholder duty applied, it might be imposed on the Company in relation to:
   • the First Acquisition, particularly in circumstances where two out of the three purchasers are resident in Vietnam making enforcement of any assessment issued to them more difficult;[33] or
   • any transfer of the shares back to Ms Tran under clause 5.1.3 in the event that the Hoa, Dieu and Tuyet failed to provide the shareholder loans to the Company.
2. However, noting that neither party sought to call the relevant solicitor from Wayne Wong & Associates to give evidence, it would be inappropriate for the Tribunal to draw a conclusion about the firm's degree of responsibility, if any.
3. Nevertheless, even assuming the firm was required, and failed, to advise the Company or Ms Tran about the prospective landholder duty liabilities, this would not enliven the discretion in section 30(3) of the TA Act because there is no evidence that the firm (being a person acting on the Company's behalf) considered the landholder duty consequences. Accordingly, it cannot be concluded on the material before the Tribunal that the Company took reasonable care.
4. Under section 35 of the TA Act, the Commissioner has a residual discretion to 'remit penalty tax by any amount' in 'such circumstances as the Commissioner considers appropriate'. On review, the Tribunal steps into the shoes of the Commissioner and can re-exercise that discretion: see, for example, Wilkinson v Commissioner of State Revenue ('Wilkinson').[34] The Tribunal will take account of, but is not strictly bound to apply, the considerations set out in the Commissioner's ruling on interest and penalty tax ('Ruling').[35]
5. The Commissioner's written submissions do not address this discretion and, in closing, Mr Chaile simply submitted that the reduced level of penalty tax (i.e. at the rate of 20%) was the 'appropriate outcome'.
6. In the Ruling, the Commissioner explains that he 'will examine all the relevant circumstances and take into account any mitigating factors' in determining whether to exercise this discretion.[36] Further, in the case of a notification default, he indicates that 'relevant circumstances' include 'the complexity of the matter' and the 'level of sophistication and commerciality of the taxpayer'.[37]
7. I accept Ms Tran's evidence that English is not her first language and that she does not have any legal training or understanding as to stamp duty. I also accept that the application of landholder duty in the present case is complex.
8. On the other hand, this was not a simple residential property transaction undertaken by an individual. Rather, Ms Tran set up a company and used that company to borrow money from external lenders to acquire a property with the intention that it engage in 'residential property development' (see item 4 of the schedule to the SSAs at [17] above).
9. It was incumbent on Ms Tran, as the sole director of the Company, to ensure that it obtained any necessary legal advice in relation to the acquisition of the Relevant Property, its financing and the shareholding arrangements, including as to the tax and duty consequences. It is likely that, in failing to do this, Ms Tran breached her duties as a director.
10. In those circumstances, I do not consider it appropriate to exercise the discretion to remit the penalty tax.

1. There is also a discretion, under section 28 of the TA Act, for interest payable by a taxpayer to be remitted in 'such circumstances as the Commissioner considers appropriate'.
2. In the present case, the interest was imposed at the market rate only and, as indicated in various cases,[38] such interest reflects the time value of money in circumstances where a taxpayer has not paid the relevant tax liability when due.
3. In the Ruling, the Commissioner indicates that he may remit the market rate of interest where he has contributed to the tax default or in exceptional circumstances.[39]
4. There is no evidence that the Commissioner contributed to the tax default in this case and I am not satisfied that any of the matters raised by Ms Tran on behalf of the Company support the favourable exercise of the discretion to remit the interest imposed in the present case.

1. The Commissioner's written submissions address a question not explicitly raised by the Company, but which might possibly be inferred from Ms Tran's plea for 'some leniency and sympathy' (see [24]). That question is whether the Commissioner, and the Tribunal on review, has a residual discretion 'not to assess a taxpayer as liable to duty under the landholder provis[40]ns'.40
2. The Commissioner refers to the Tribunal's decision in Pitard v Commissioner of State Revenue ('Pitard')[41] in support of the contention that, while the Commissioner may have a discretion to not assess a taxpayer (under section 8 of the TA Act), 'the (non) exercise of that discretion is not reviewable by the Tribunal'.[42] Likewise, the Commissioner references the Tribunal's decision in Wilkinson[43] for the proposition that the Tribunal is 'unable to exercise any discretion under s 13 of the [TA Act] to withdraw an assessment issued by the Commissioner'.[44]
3. Further, the Commissioner submits that 'none of the matters raised by the Company would have provided a basis for the Commissioner to exercise his discretion not to assess the Company as liable to duty (assuming such a discretion exists)'.[45] In this regard, the Commissioner notes observation of the Tribunal in Pitard that the exercise of the discretion 'may be informed by matters of public policy and good administration'.[46] The Commissioner submits that, as was the case in Pitard,[47] this is a proceeding 'in which the Company has embarked upon a course of action (for whatever reason) without any real consideration of the duty consequences' and that this does not provide an appropriate basis for the exercise of the discretion to not assess (or to withdraw any assessment).[48]
4. The Commissioner's submissions provide an accurate summary of the Tribunal's decisions in Pitard and Wilkinson to the effect that, in conducting a review of a duty (or other state tax) assessment, the Tribunal cannot exercise any discretion available to the Commissioner to not assess a taxpayer to whom a substantive tax liability applies (or to withdraw any such assessment). Those decisions have been regularly followed by this Tribunal[49] and (at this time) there has been no decision of any Court to suggest that the decisions are incorrect.[50] In those circumstances, I do not consider that I have any discretion to show some 'leniency' by determining not to assess the Company or withdraw the Assessment.
5. Further, while the Tribunal has sympathy for Ms Tran's situation, the matters raised in the context of penalty tax remissions (see [64]-[65]) also point away from the favourable exercise of any discretion should it be found to exist.

[1] The given names of Hoa, Dieu and Tuyet are used in these Reasons to avoid confusion with Ms Tran.

[2] The Tribunal arranged for a Vietnamese interpreter to interpret for Ms Tran.

[6] The minutes are signed by Ms Tran and her sisters.

[10] The day and month were inserted by hand.

[11] The day and month were inserted by hand.

[12] The day and month were inserted by hand.

[13] This is consistent with the decision in Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, where Gibbs J observed (at 543) that 'it probably does not matter ... whether the condition is described as "precedent" or "subsequent", provided that it is understood that its non-fulfilment did not prevent a binding contract from coming into existence'.

[14] An internet search on RedZed suggest that it a lender that seeks to be a 'preferred lender to Australia's self-employed' and 'committed to supporting and empowering small business owners and the self-employed, a traditionally underserviced market': available at www.redzed.com/about/.

[21] Valuation by Preston Rowe Paterson dated 24 January 2019: ZTB, T54.

[22] See Re BM2008 Pty Ltd (in liq) [2010] VSC 337 [11].

[24] For a discission of the evidence required to displace the presumption, see cases such as Pearce v Mulhern [2010] FCA 446 Endless Solar Corporation Limited v Australian Securities and Investments Commission, in the matter of Speedpanel Australia Ltd (no 3) [2024] FCA 236, Zegna & Zegna (No 2) [2022] FedCFamC1F 558 and Re Chambeyon Pty Ltd; Colbart Pty Ltd v Parsons (as litigation guardian for Gerraty [2017] VSC 241.

[25] Duties Act, s 3 (para (a) of definition of 'associated persons' provides that 'persons are associated persons if they are related persons' and para (a) of the definition of 'related persons' provides that 'natural persons are related persons if one of them is a relative of the other').

[26] [2023] VCAT 634 (appeal dismissed: [2024] VSCA 175).

[27] Duties Act, s 3.

[28] Duties Act, s 77.

[29] Duties Act, s 89F(1)(a).

[33] Under general conflict of law principles, in the absence of a treaty providing for enforcement, the courts of a country will not assist to enforce a tax debt owed to another country.

[34] [2024] VCAT 807 [168]-[172].

[35] Kamirice v Commissioner of State Revenue [2017] VCAT 2087 [36] (compare section 57 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) which provides the Tribunal must apply a policy certified by a Minister). Revenue Ruling TAA-007v5 is available at www.sro.vic.gov.au/about-us/laws-legal-cases-and-rulings/rulings/interest-and-penalty-tax-6.

[38] See, for example, Tran v Commissioner of State Revenue [2025] VCAT 581 [67].

[41] [2019] VCAT 1074.

[43] [2024] VCAT 807 [149].

[46] [2019] VCAT 1074 [107].

[49] See, for example, Hu v Commissioner of State Revenue [2025] VCAT 143 [24].

[50] While the taxpayers in Pitard and Wilkinson commenced appeals, those appeals were discontinued without a hearing. The Tribunal is aware of one matter where a declaration is being sought from the Supreme Court of Victoria to the effect that the Tribunal can exercise the discretion to not assess a taxpayer. The Tribunal understands that application has been heard but is yet to be determined.