Victorian Civil and Administrative Tribunal|2016-01-06

For the reasons more fully set out above, the Tribunal finds that:
- (a) The only credible rationale given by Mr Kloester for not purchasing the Property in the Applicants' names was his desire to secure asset protection and shield any assets in his name from his creditors. It is otherwise inexplicable why the Applicants did not arrange their own finance, with the assistance of available cash funds from the Parents, and purchase the Property in their own names. While such rationale is not of itself fatal to the creation of a trust or the existence of a resulting trust, it is nevertheless a relevant circumstance to be taken into account;
- (b) There is no objective or contemporaneous evidence of a loan from the Parents to the Applicants of the sum of $180,000, which amount was otherwise paid directly by the Parents to the vendor of the Property;
- (c) There is no evidence that the Applicants made any financial contribution to the purchase price of the Property;
- (d) There was no caveat lodged until after correspondence had commenced with the State Revenue Office and about six months prior to the transfer from the Parents to the Applicants, which is more consistent with a decision having been made, at that time, to transfer the Property;
- (e) The Parents, at all relevant times, effectively represented a beneficial entitlement to the Property for the purposes of Centrelink entitlements and liability for land tax;
- (f) All mortgage statements were sent to the Parents at their address; mortgage repayments were made directly from accounts of the Parents; and municipal and water rates remained in the Parents' names;
- (g) While there is evidence of invoices for items of maintenance on the Property in the name of Applicants or one of them, repayments to the Parents on account of mortgage loans or the initial sum of $180,000 provided by the Parents, were mainly made out of accounts of corporate entities and not on a regular basis;

The Tribunal is not satisfied, on the balance of probabilities, that the criteria necessary to satisfy an exemption from duty pursuant to either ss 34 or 36 of the Duties Act, has been proven.
The Applicants' objections, the subject of review, are dismissed.
The decision of the Respondent is affirmed.

[3] Section 106(1) provides that if a taxpayer is dissatisfied with the Commissioner's determination of the taxpayer's objection, the taxpayer may request the Commissioner to refer the matter to the Tribunal.

[18] Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue [2004] VSCA 10; (2004) 12 VR 351 at [79].

[22] Witness statement of Ian Kloester at [2].

[23] Witness statement of Ian Kloester at [2].

[24] Witness statement of Ian Kloester at [3].

[25] Witness statement of Ian Kloester at [4].

[26] Witness statement of Ian Kloester at [5].

[27] Witness statement of Ian Kloester at [7]; T8 at [3], [9]; T9 at [2], [8].

[28] Witness statement of Ian Kloester at [9]; T8 at [5]; T9 at [4].

[29] Witness statement of Ian Kloester at [6]-[8].

[30] Witness statement of Ian Kloester at [6]; T8 at [5]; T9 at [4].

[32] Mr Kloester later confirmed that the Dandenong property was purchased in his and his wife's name as trustees of a unit trust.

[34] The Tribunal notes that no records of the mother's 'bookkeeping' were produced.

[41] Witness statement of Ian Kloester at [11], T46, T47, T48, T51.

[42] Witness statement of Ian Kloester at [11]-[12], T11-T19, T39-T43.

[44] Witness statement of Ian Kloester at [12].

[45] Witness statement of Ian Kloester at [12].

[46] Witness statement of Ian Kloester at [12], T41.

[47] Witness statement of Ian Kloester at [12]-[13], T40. The balance owing to the Parents was agreed and paid at $141,155.74, but on review seems to have been $131,384.52, such that the Applicants appear to have over-paid about $10,000 (see T40 at pages 4 and 6).

[55] Including the first set of financial statements after acquisition of the Property.

[58] Tate JA and Pagone JA; Maxwell ACJ dissenting.

[59] Lend Lease [2011] VSCA 182; (2011) 33 VR 204, 236 [130], 238-9 at [144].

[63] Vopak [2004] VSCA 10; (2004) 12 VR 351, 383-4 [78]-[81].

[64] Vopak [2004] VSCA 10; (2004) 12 VR 351, 381 [74] (citations omitted).

[66] Lend Lease [2011] VSCA 182; (2011) 33 VR 204, 249-50 [177]-[178].

[67] See [148], [151]-[153] above.

[76] Refer: Respondent's Statement of Legal Contentions dated 27 November 2015.

[77] See also Gleeson v Commissioner of State Revenue (2009) 28 VR 607 at [40], comments in relation to s 36.

[79] Gleeson v Commissioner of State Revenue (2009) 28 VR 607 at [40].

Administration Act 1997

Civil and Administrative Tribunal Act 1998

Kloester v Commissioner of State Revenue (Review and Regulation) [2016] VCAT 16 (6 January 2016)

As I have indicated, the general rule that in the situations mentioned it is presumed that a resulting trust arises in favour of the purchaser, or in favour of two purchasers in the proportions in which they contributed the purchase money, is subject to the exception created by the presumption of advancement. "It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title": Martin v. Martin [1959] HCA 62; (1959) 110 CLR 297, at p 303; in other words, it is "no more than a circumstance of evidence which may rebut the presumption of resulting trust": Pettitt v. Pettitt [1969] UKHL 5; (1970) AC 777, at p 814. The presumption arises when a husband makes a purchase in the name of his wife, or a father in the name of his child or other person to whom he stands in loco parentis.

Kloester v Commissioner of State Revenue

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Judgment (46 paragraphs)

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Kloester v Commissioner of State Revenue (Review and Regulation) [2016] VCAT 16 (6 January 2016)