(i) Witness statement of Mr Li dated 17 November 2022 (filed on 18 November 2022)[5];

(ii) Witness statement of Mr Hung Li dated 17 November 2022 (filed on 18 November 2022)[6] ;

(iii) Witness statement of Mr Liang Kheng "Tim" Tay dated 8 December 2022[7];

(iv) Statutory declaration from Ms Chung Yee Yuen dated 17 November 2022[8];

(v) Outline of Submissions - noting a complete copy was filed on the day of the hearing (filed copy missing page 3);

(vi) Change to company details for Man Office (Australia) Pty Ltd (Company Details)[9]; and

(vii) A bundle of ASIC documents.[10]

1. Mr Li, Mr Tay and Ms Yuen gave evidence and were cross examined.
2. The Commissioner filed the Tribunal documents (T-docs), but otherwise filed no further evidence.
3. The applicants filed written submissions on 18 November 2022. These were late.
4. The Commissioner filed:

(a) Submissions dated 18 November 2022;

(b) Supplementary submissions on 5 December 2022 dealing with additional matters contained in the applicants' late submissions.

1. Both parties' counsel made oral submissions at the conclusion of the hearing. I thereafter reserved my decision.

1. Section 85 of the Duties Act provides that duty is payable when a "relevant acquisition" is made.
2. "Relevant acquisition" is defined in section 86 of the Duties Act to include:

86 What is a relevant acquisition? - pt 3.2

_(1) For this part, a person makes a relevant acquisition if - _

_(a) the person acquires an interest in a landholder that - _

(i) is of itself a significant interest in the landholder; or

(ii) when aggregated with other interests in the landholder held by the person or an associated person, results in an aggregation that amounts to a significant interest in the landholder; or

(iii) when aggregated with other interests in the landholder acquired by the person or other people in an associated transaction, results in an aggregation that amounts to a significant interest in the landholder; or

_(b) the person or an associated person - _

(i) has an interest in a landholder mentioned in paragraph (a); and

(ii) acquires a further interest in the landholder.

83 Interest and significant interest in landholders - pt 3.2

(1) For this part, a person has an interest in a landholder if the person has an entitlement (otherwise than as a creditor or other person to whom the landholder is liable) to a distribution of property from the landholder on a winding up of the landholder or otherwise.

(2) A person who, under subsection (1), has an interest in a landholder has a significant interest in the landholder if the person, in the event of a distribution of all the property of the landholder immediately after the interest was acquired, would be entitled to at least 50% of the property distributed.

1. An "associated person" is defined in section 77A, relevantly to include:

(1) For this Act, an associated person means a person who is associated with another person in accordance with any of the following:

(a) people are associated people if they are related people;

(3) related person means a person who is related to another person in accordance with any of the following:

(ii) the relationship between them is that of parent and child, brothers, sisters, or brother and sister;

(b) private companies are related people if they are related bodies corporate;

41. Pursuant to section 87 of the Duties Act, persons who make "relevant acquisitions" are required to file an "acquisition statement" within 90 days of the transaction. This statement must include various details, including details of the person making the acquisition, the value of the land and the duty paid in relation to any other acquisition.

1. Section 95 deals with concessions for "securing financial accommodation" and provides:

95 Duty concession - acquisitions securing financial accommodation

_(a) a person - _

(i) acquires an interest in a landholder; and

(ii) makes a relevant acquisition; and

(iii) tells the commissioner that the acquisition is made for the purpose of securing financial accommodation; and

(b) the commissioner is satisfied that the acquisition is effected for that purpose.

(2) Duty under this Act is not payable in relation to the relevant acquisition, except as provided by subsection (3).

_(3) Duty is payable in relation to the relevant acquisition at the end of the period of 5 years after the date of the acquisition (or the longer period that may be determined by the commissioner in the particular case) if the interest concerned is not - _

(a) reacquired by the person from whom it was acquired; or

(b) for an acquisition by way of mortgage - conveyed by the mortgagee to a third person in exercise of the mortgagee's power of sale;

(4) Section 86 does not apply to the reacquisition by a person of the interest concerned.

1. Section 115H deals with transfer back from a trustee to a nominee and, paragraph (2)(f) provides:

(2) Duty is not payable in relation to a chapter 3 transaction if the land that is the subject of the interest concerned could have been acquired by the person in a way that results in no duty being payable under any of the following provisions:

(f) section 57 (1) (Transfers back from nominee), if the initial transfer from the transferor to the trustee was a chapter 3 transaction;

1. Section 57 provides for transfers back where property is transferred pursuant to a trust arrangement:

(a) dutiable property that was transferred to a person to be held by that person as trustee for the transferor is transferred back to the transferor by the trustee for no consideration; and

(b) no person other than the transferor has had a beneficial interest in the dutiable property (other than the trustee's right of indemnity) between its transfer to the trustee and its transfer back to the transferor;

duty under this chapter is not payable in relation to the transfer of the dutiable property back to the transferor.

_(2) If duty is not payable under subsection (1) on the transfer of dutiable property back from the trustee to the transferor - _

(a) duty is not payable in relation to the initial transfer from the transferor to the trustee; and

(b) the commissioner must reassess the initial transfer and refund any duty paid on application for a refund made within 5 years after the initial assessment, or 12 months after the transfer back to the transferor, whichever is later.

trustee includes a trustee appointed in substitution for a trustee or a trustee appointed in addition to a trustee or trustees.

The burden of showing that an objection should be sustained lies with the taxpayer making the objection.

1. Section 30(1) of the TAA provides that if a tax default happens, the taxpayer is liable to pay penalty tax in addition to the amount of unpaid tax. The TAA dictionary defines a tax default as a failure to pay, in accordance with tax law, the whole or part of tax a taxpayer is liable to pay. Under section 88 of the Duties Act, a tax default occurs in relation to a landholder under the Duties Act if the duty is not paid within 90 days of the relevant acquisition (i.e. the share transfer).
2. Section 31(1) of the TAA sets the default penalty for a tax default at 25%. However, a 50% penalty is payable if the Commissioner is satisfied that the default is caused wholly or partly by the taxpayer or a failure by a person to fulfil the taxpayer's obligations under a tax law. In this regard, section 31 provides:

_(2) The commissioner may increase the amount of penalty tax payable in relation to a tax default to 50% of the amount of tax unpaid if the commissioner is satisfied that the tax default - _

_(a) was caused wholly or partly by the taxpayer (or a person acting on behalf of the taxpayer) - _

(i) delaying the payment of tax; or

(ii) delaying the provision of information required for the assessment of tax; or

(iii) providing information required under a tax law that is incorrect, incomplete or misleading; or

(b) is the taxpayer's second or subsequent tax default in relation to a tax liability, or in relation to a similar or related tax liability.

(3) Subsection (2) applies to a tax default in the same way whether the tax default happened before or after the subsection commenced.

1. Mr Li's evidence consisted of his written statement and oral evidence lead at the hearing and given under cross examination. I have summarised his evidence below.
2. Mr Tay and Mr Li have been business partners since about 1998, having previously been involved in a car importation business.
3. Between 1998 and 2007, Mr Li's family loaned Mr Li and Mr Tay $1,200,000 for investment purposes (the first loan). Mr Li searched his records but has no documentation relating to this loan.
4. On 2 August 2007, Mr Li and Mr Tay established the Company with an initial shareholding of 1 share each. The Company records evidence this[11].
5. On 3 September 2007, the Company held a meeting at which Mr Li, Mr Tay and Mr Hung Li (Mr Li's father) were in attendance. At that meeting, it was agreed that $600,000.00 of the first loan would be forgiven, and the remaining $600,000.00 would be "transferred from Tim Tay and I to the Company to be repaid ... within 4 years."[12]. Mr Li annexed to his statement a "minute book" minute dated 3 September 2007 as documentary evidence in support of this[13].
6. On 22 October 2008, the Company borrowed a further $200,000 from Mr Hung Li and his wife (Mr Li's mother) - Ms Chan Suk Hing (second loan). The documentary evidence for the terms of the second loan is dealt with later in this summary of Mr Li's evidence, having been created sometime later to reflect a change in arrangements. He also provided records of bank statements from HSBC which confirm transfers of $200,000 to "Man Office"[14].
7. On 9 March 2011, Mr Li and Mr Tay held a meeting of directors of the Company at which it was agreed to purchase the Property, a property in Mitchell in the ACT, consisting of land and the glass business on it, for $2.7 million. He attached a copy of the minutes of the meeting to his statement.[15].
8. To purchase the Property, the Company borrowed:

(a) $1,800,000 from Mr Hung Li and Ms Chan (third loan); and

(b) $600,000.00 from Mr Jianhua He (fourth loan).

1. As evidence of the third loan, Mr Li relied on bank transfer receipts from a bank, HSBC[16]. These documents show a series of transfers from a HSBC account to an ANZ account over the course of 2011. The beneficiary of the transfer is a company named as "Manoffice Property Holdings Pty Ltd" (ie. a different name to the Company). Mr Li confirmed in his oral evidence that Manoffice Property Holdings Pty Ltd is "a different entity but under [Man] Office Australia"[17].
2. Turning to the fourth loan, it appears Mr He was an associate of Mr Li. Mr Li described the loan as an investment in Canberra by Mr He for business migration purposes[18]. Mr He, Mr Li explained, loaned the money and then accepted shares in the Company as security[19].
3. Mr Li's understanding of the arrangement with Mr He was that Mr He could not sell the shares. However, if the Company had defaulted, and had to sells its assets, Mr He would get a distribution from the resulting funds as repayment[20]. Other than that, he had not intended that Mr He receive a "beneficial interest ... for the business and any property we got."[21]
4. Mr Li's evidence as to the terms of the fourth loan was oral only. He produced no documentation evidencing the terms of the loan or the transfer of funds. He agreed under cross examination that $600,000 was not an ordinary amount of money to go into the Company, and that he had not produced any bank records showing the deposit[22]. He said that the records had been provided to Mr He for his migration application, and so were not available.
5. To facilitate security for the fourth loan, the Company resolved to issue 98 more shares, bringing the total shares to 100 shares and allowing for 25 of those shares to be allocated to Mr He.
6. To give effect to this, Mr Li explained, first 49 more shares were given to Mr Li and 49 more to Mr Tay. However, this first step is not reflected in any ASIC documentation.
7. The next step is recorded. An ASIC Company details form (first ASIC form) dated 18 June 2013 records a "change to share structure" as having occurred on 8 August 2011[23]. The form states that the shares were distributed:

(a) 50 shares to Mr Tay;

(b) 25 shares to Mr Li; and

(c) 25 shares to Mr He.

1. The first ASIC form records also the shares held by all parties as "beneficially held".
2. The transfer of shares to Mr He is recorded in the company register on 8 August 2011 as a "transfer for security purpose."[24]
3. Mr Li also attached to his witness statement an "audit confirmation" declaration from the Company accountant, Mr Vong, of Allen Vong and Associates, dated 10 December 2013, as evidence of the existence of a "current, not secured...interest free" loan of $600,000[25] from Mr He.
4. On 2 January 2012, Mr Tay's family agreed to loan the Company a further HKD$600,000,000 (fifth loan).
5. Shortly thereafter, Mr Li and Mr Tay agreed that the Company should enter more formal arrangements in relation to the family loans. Two loan agreements were entered into:

(a) On 18 January 2012, a loan agreement between the Company and Mr Li's mother, Ms Chan Suk Hing (Chan Suk Hing Loan Agreement) [26]; and

(b) A loan agreement between the Company and Mr Tay's wife Ms Hung Kar Tat (Hung Kar Tat Loan Agreement)[27]:

• 68. The Chan Suk Hing and Hung Kar Tat loan agreements were attached to Mr Li's statement. Mr Li's statement includes some assertions about the content of those agreements which are not quite reflected in the terms, but this may well be the result of some confusion about the language used[2]. I have summarised the agreements by reference to their written terms below.

(a) confirms Mr Li's family had loaned the Company an amount of $2 million;

(b) provides that the loan term was 4 years;

(c) provides that interest was payable in the fixed amount of $50,000pa;

(d) provides that "to protect the Lender, the Borrower gives what is known as a security interest or mortgage in an unregistered floating charge over the ... [P]roperty ... Lender has the right to exercise the floating charge right at any time by putting a caveat on the building title"; and

(e) states that Mr Li and Mr Tay provided personal guarantees and "allow the assets of [the Property] of [the Company] to be secured up to the value of AUD $2.5 million."

(a) confirms Mr Tay's family had loaned the company the fifth loan;

(b) provides that the term was four years;

(c) provides that the interest rate payable was fixed at HKD$300,000 pa;

(d) states that "to protect the Lender, the Borrower gives what is known as a security interest or mortgage in an unregistered floating charge over the ... [P]roperty ... Lender has the right to exercise the floating charge right at any time by putting a caveat on the building title"; and

(e) states that Mr Li and Mr Tay provided personal guarantees and "allow the assets of [the Property] of [the Company] to be secured up to the value of AUD $2 million.

1. Mr Li also states in his statement that the Hung Kar Tat Loan Agreement "provided that Tim Tay was required to hold at least 50% of the issued shares in the Company until the Hung Tat Loan amount was repaid in full..."[28], but this condition does not appear in the written documents.
2. Further to the Chan Suk Hing Loan Agreement, the Company attempted to register a mortgage over the Property, but was unsuccessful, and instead a caveat was lodged over the Property[29].
3. The monies loaned under the fifth loan, reflected in Hung Kar Tat Loan Agreement, was received by the Company on 27 February 2012, and is evidenced by a Fubon Bank transfer[30].
4. On 30 January 2014, the Property was valued by Colliers International at $3,500,000.00[31] (first valuation report).
5. On 20 March 2015, Mr Li, Mr Tay, and Mr He held a meeting of directors of the Company. At this meeting, Mr Li and Mr Tay agreed that their respective shareholdings would be adjusted to reflect the contribution their families had made to the Company. Mr He agreed to accept Mr Li's personal guarantee as security.
6. A copy of a minutes of the meeting is attached to Mr Li's statement[32]. The minutes provide:

"Regarding to the share which transferred to Liang Kheng TAY and Jianhua He as security purpose for their loan, because they are both working in overseas, so Mr Liang Kheng TAY and Jianhua He decided to accept Mr Chi Man Li personal guarantee instead of the shares of the company as security for the loan.

Mr Jianhua HE and Mr Liang Kheng TAY agreed to revise the transfer of 25 and 30 shares back to Chi Man Li, and the share transfer is not involved with any payment, benefit and liability transfer.

Mr Jianhua He and Liang Kheng TAY fully aware that the shares which they held as security before has no benefit interest of the company, it is mainly for security purpose for their loan to the company."

(a) Mr He transferred 25 shares to Mr Li, in exchange for a personal guarantee from Mr Li in relation to the fourth loan[33]; and

(b) Mr Tay transferred 30 shares to Mr Li, as recognition for the greater contribution by Mr Li's family and to reflect the understood share structure more accurately[34].

1. Accordingly, as at 24 March 2015[35], the shareholdings were:

(a) 80 ordinary shares held by Mr Li; and

(b) 20 ordinary shares held by Mr Tay.

1. These transactions were recorded in the Company's minutes of meeting of directors dated 20 March 2015[36], and in the Company's Register of Members[37].
2. Mr Li conceded at the hearing that he got a beneficial interest in the 30 shares from Mr Tay. It is only the transfer of 25 shares from Mr He to Mr Li that is in issue in this proceeding (ie. Acquisition 1A).
3. Mr Li's evidence was that on 2 February 2016, two further transactions were agreed:

(a) First, Mr Hung Li would take a non-beneficial interest in 65 shares in the Company as security for repayment of the first loan (Hung Li first loan security agreement); and

(b) Second, Mr Hung Li would also take a non-beneficial interest in 10 shares in the Company as security for repayment of both the second and third loans and the interest owing under them (Hung Li second and third loan security agreement).

1. According to Mr Li's written statement, it was a term of these loans that "my father would hold the shares pursuant to a non-beneficial interest as security."[38] There is no written record of this agreement.
2. Mr Li's oral evidence was that he thought the 75 shares would come from his shareholding[39].
3. Accordingly, following the execution of the loan agreement, 75 ordinary shares were transferred from Mr Li to Mr Hung Li. This resulted in a shareholding as follows:

(a) 5 ordinary shares held by Mr Li;

(b) 20 ordinary shares held by Mr Tay; and

(c) 75 ordinary shares held by Mr Hung Li.

1. On 8 February 2016, the Company register recorded the shares transferred to Mr Hung Li as fully paid and beneficially held. Mr Li stated in both his written statement and his oral evidence that this was an error in the Company Register, as the intention was that they be security for the first, second and third loans[40].
2. The Chan Suk Hing Loan Agreement was extended on 28 February 2016[41] and the Hung Kar Tat Loan Agreement was extended in June 2016. Mr Tim Tay and Mr Li provided a personal guarantee to Ms Hung[42]. A copy of the personal guarantee is before the Tribunal. In contrast to much of the rest of the documentation, it is a multi-page template agreement signed by both guarantors[43].
3. Also attached to Mr Li's statement is a document recording the extension of the Chan Loan Agreement [44] (Chan Loan Extension Agreement), titled "attachment to the corporate loan agreement." It is dated 28 February 2016. This document records an agreement between Mr Li, on behalf of the Company, and his mother, Ms Chan, and is witnessed by Ms Yuen from Vong and Associates. The document records that Ms Chan agreed to accept 65% of the shares as a guarantee, and that the shares would be transferred back to Mr Li when the debt is repaid. Under the agreement, Ms Chan appointed her husband, Hung Li, to hold the shares for her[45].
4. Mr Li agreed that there was no agreement "in writing" in relation to the other 10 shares held by Mr Hung Li on behalf of Ms Chan[46].
5. On 25 June 2016, Mr Li, Mr Tay and Mr Hung Li attended a meeting of directors of the Company, along with Ms Chan and Ms Hung. At that meeting, it was decided that:

(a) The Company would consent to a caveat being lodged over the Property as security for payment of the second and third loan amounts and the fifth loan amount;

(b) The 75 shares held by Mr Hung Li would be transferred back to Mr Li.

1. The agreement was noted in the Company's minute book[47].
2. Following this meeting, on 1 July 2016, Mr Tay, "in error" transferred 20 shares in the Company to Mr Li[48] (Tay transfer error). This is recorded by a Change in Company Details form dated 8 July 2016[49]. Mr Li's oral evidence was that he could not recall why the transfer was made[50] but it was not intended to leave Mr Tay with no shares in the Company.
3. At the time of preparing his statement, Mr Li had understood that, as a result of the reacquisition of the 75 shares held by Mr Hung Li, and the transfer of Mr Tay's shares, he held all 100 shares in the Company[51].
4. On 7 March 2017, Ms Chan and Ms Hung lodged a caveat against the Property.
5. In October 2017, the property was valued by Colliers International at $3,100,00.00 (second valuation report).
6. Mr Li's written and oral evidence was slightly inconsistent in how the Tay transfer error came to light. In his written statement, he says he was advised by the Company's bookkeeper about the share transfer to Mr Tay. His oral evidence was he worked it out when he noticed Mr Tay holding no share in the company. Ultimately, it does not matter. Following Mr Yuen's advice, Mr Li transferred 20 shares back to Mr Tay on 11 December 2017. This means the error was identified on around 6 December 2017 and corrected 6 days later. In his oral evidence, Mr Li acknowledged that the share transfer form was lodged by Mr Tay[52].
7. Hence, according to his statement, it was Mr Li's understanding that as at 11 December 2017, the shareholding in the company was, or at least should have been:

(a) 80 ordinary shares held by Mr Li; and

(b) 20 ordinary shares held by Mr Tay.

1. This was still Mr Li's understanding at the hearing[53]. He maintained this position after being shown a Company extract that recorded the current shareholding allocation as being him holding 5 shares and Mr Tay 20. "The correct position should be I got 80 shares and Mr Tay got 20."[54]
2. Mr Li's evidence is that the fourth loan to Mr He was repaid in 2020[55]. He produced no records evidencing this. He conceded that the loan was not recorded as a liability in the Company's financial accounts for the year 2015-2016[56].
3. Both the Hung Kar Tat Loan and the Chan Suk Hing Loan Agreements were extended for a further 4-year term and remain current.
4. After receiving a Notice of Investigation from the Commissioner, Mr Li wrote to the Commissioner on 5 February 2018 advising that the shares were for security purposes. A copy of the letter was attached to his statement[57]. The letter provides:

"Regarding to the Notice of Investigation for the shares transfer of 65% to Mr Hung Li in 2016, we would like to notify you that the shares are for the security of a loan from his wife, my mom, Mrs Chan Suk Hing, and the full 65% will be returned to me after the loan being repaid before or at the terms expired in 2020.

So, the shares transfer purpose is mainly as security for a loan in the loan period. This is not a sale for the shares.

I attached a loan agreement which signed in Feb 2012 with Mrs Chan."

1. On 18 June 2018, the Commissioner requested Mr Li lodge revised acquisition statements in respect of the transactions on 24 March 2015 (Acquisitions 1A and 1B), 8 February 2016 (Acquisition 2) and 1 July 2016 (Acquisition 3). Mr Li did this so on 18 July 2018. Mr Li's oral evidence is that he was not aware of the requirement to file acquisition statements until advised by the Commissioner and does not know why their accountant didn't know about them[58].
2. On 30 June 2018, Mr Li sent the respondent a further letter regarding the shares transferred to Mr Hung Li[59]. In that letter he reiterated that the shares were intended to be security and were not beneficially held by his father. He advised that since the caveat was in place, his family did not need the shares, and "I need to hold a major share at that time to make the bank more comfortable."[60] It is apparent from the letter that Mr Li found the record keeping and taxation requirements imposed confusing and frustrating. He stated:

"I will revise the share transfer of that 65% from my father Mr Hung Li and let them just keep the caveat for the company property to save all this hassle."

1. On 10 September 2018, Mr Li provided the Commissioner with, amongst other things, two documents entitled "memorandum of understanding" (the MOU note) further explaining his position[61]. These were not 'memorandums of understanding' in the legal sense, but file notes recording Mr Li's understanding of what had transpired. One document notes that "[s]hares still under Mr Hung LI will be transferred back to the company under Mr Chi Man LI after the investigation."
2. When questioned by Ms Weir as to whether there has been an intention that the 75 shares be returned to him earlier, Mr Li said that Mr Hung Li "did transfer the share back" but they "lost the submission of the transfer."[62] He was unclear on when the attempt had been made, but conceded it was not immediately after the meeting on 25 June 2016[63].
3. Under cross-examination, Mr Li was unable to answer who had the beneficial interest in the shares then held by Mr Hung Li - "no one should hold any beneficial interest on those shares"[64].
4. The Company did not have a distribution of profits[65] nor provide any other benefit[66], and at no time did Mr He[67] or Mr Hung Li[68] receive dividends. Mr Li maintained that they would not have been entitled to sell the shares.
5. Mr Li agreed that one of his obligations as a director was signing off on the Company' financial statements each year[69] but conceded he did not always understand them[70].
6. When questioned about how long these matters took to get to hearing before the Tribunal, Mr Li denied deliberately delaying the proceeding and said that any delay was due to pain from a medical condition.

1. Mr Tay signed a witness statement dated 8 December 2022. He gave evidence and was cross examined at the second day of the hearing.
2. At the time of making his statement, Mr Tay was the sole director and a shareholder of the Company.
3. Mr Tay had been business partners with Mr Li since 1998. His evidence in relation to the formation of the Company and purchase of the property was largely consistent with Mr Li's.
4. I note that Mr Tay purported to give evidence about Mr Li's intentions in relation to some of the transactions. The respondent, appropriately, objected to this evidence. I can give these assertions minimal weight, beyond accepting that they reflect what Mr Tay understood to be Mr Li's or Mr Hung Li's intentions in authorising the transactions.
5. Mr Tay's recollection was that the Property was purchased with loans of $2.4 million from a bank, $1.2 million from Mr Li's family, $700,000 from his family and $600,000 from Mr He.[71]
6. In relation to the distribution of shares that followed the property acquisition, Mr Tay explained that it was his understanding that Mr He was a friend of Mr Li who needed to invest $600,000 in Australia for the purpose of obtaining permanent residency. He and Mr Li gave Mr He 25% of the shares as "security" for that investment. - "[t]hen after he [got] the PR ... he [got] the money back, and then he released the shares back to us." [72]. He was firm that the money was a loan, not an investment[73].
7. Mr Tay agreed that there should have been records of the repayment of loan from Mr He, and said the records and translation were done by the accountant[74]. He thought the money was paid back in China[75].
8. Mr Tay recalled that on 2 January 2012 his family agreed to loan the Company HKD$600,000,000, and that money was paid on 27 February 2012. He had no contemporaneous records of these transactions, although he referred to the drafting of subsequent loan agreements to reflect the arrangements that had been met.[76]
9. Mr Tay's understanding at the time he made his statement was that Mr Li reacquired the 75 shares from Mr Hung Li on 25 June 2016 and the Company provided alternative security for the loan.
10. Mr Tay said that on 1 July 2016 he transferred 20 shares to Mr Li "in error"[77]. Both his statement and his oral evidence was that at this time - mid 2016, and after the reacquisition of Mr Hung Li's shares - their respective shareholdings had been revised to represent their relative family investments.[78]
11. He had thought that his shareholding remained the same after that, until their "bookkeeping lady", Ms Yuen, advised him that he had zero share in the Company.[79]
12. Mr Tay was surprised to find out that he had no shares. He was not able to explain how this happened. The situation was promptly remedied once the problem was identified. He called Mr Li straight away, and Mr Li called the accountants to "fix it". Mr Tay said in oral evidence that he did not get involved. However, Mr Tay was shown a copy of the ASIC Change in Company Details form dated 28 September 2020, and particular "C4 Changes to the register of members." The form recorded 75 shares held by Mr Hung Li. Mr Tay confirmed that he had signed the form. The purpose of signing the form, he said, was to record that Mr Hung Li held the shares for security purposes only. He conceded that: "after this I find Li Hung shares disappear, after I submit this form."[80]. Mr Hassall asked him if that is what was supposed to happen, and he conceded "I have no idea."[81]
13. On 27 February 2023, he filed another Change of Company Detail form, requesting that the 75 shares be revised back to Mr Li.
14. When under cross examination, Mr Tay was shown a copy of the Chan Suk Hing Loan Extension Agreement. Ms Weir had anticipated questioning him as to why the document referred to 65% and not 75%/75 of the shares, but unfortunately the document as shown to him was already marked up as identifying a typographical error, and Mr Tay pre-emptively offered that explanation. I certainly do not draw any adverse inference about Mr Tay from this, but it was an unfortunate mishap that undermined the value of any evidence he could give about the discrepancy in the number of shares.
15. Ms Weir then took Mr Tay to the minute book of a Company meeting of 25 June 2016. Present were Mr Tay, Mr Li, Mr Hung Li, Ms Hung Kar Tat and Ms Chan. At that meeting, it was agreed that both families would be allowed to lodge a caveat against the Property, and both would withdraw the caveat when the loan was repaid. The document states "security shares will be revised after caveat".[82]
16. Mr Tay frankly conceded that the documentation for the large loans was inexpert, but noted that the documents were prepared by an accountant, and that was enough for him because he was borrowing money from his father-in-law[83].

1. Ms Yuen provided a statutory declaration declared 17 November 2022. She appeared by telephone at the hearing to confirm the contents of her statutory declaration.
2. In that declaration, Ms Yuen states that she discovered an irregularity in the register of the Company involving the transfer of 20 ordinary shares from Mr Tay to Mr Li on 1 July 2016:

"There was no reasonable basis for this transfer as it left Mr Tim Tay with 0 shares in the Company.

I informed Mr Chi Man Li of the finding, and it was rectified on 11 December 2017 when 20 ordinary shares were transferred back from Mr Chi Man Li to Mr Tim Tay."[84]

1. In her oral evidence, Ms Yuen confirmed that she had no other conversations with Mr Tay or Mr Li about their shareholdings the company in June or July 2016.[85]
2. Her evidence was not otherwise challenged.

1. The material relied upon by the respondent is incorporated in the T-docs. For the most part, the Commissioner's position has been that the necessary information was in the sole hands of the applicants, and it is for them to prove their case.
2. Nonetheless, it is useful to set out here the documents and material relevant to how the Commissioner became aware of the alleged tax defaults, and what the Commissioner's office knew at the time of making the decisions.
3. Under section 87 of the Duties Act, a person who acquires a dutiable interest is required to lodge an acquisition statement within 90 days. Neither of the applicants did this in relation to any of the relevant transactions. The Commissioner accepts they were unaware of the obligation to do so. Accordingly, the Commissioner became aware of the acquisitions through other channels.
4. On 20 December 2017, a delegate of the Commissioner (the delegate), after becoming aware of Acquisitions 1A, 1B and 2, wrote to the applicants and:

(a) advised Mr Li he was the subject of an investigation in relation to Acquisitions 1A and 1B[86]; and

(b) advised Mr Hung Li that he was the subject of an investigation into Acquisition 2[87].

1. The delegate issued a notice to each of the applicants under section 82 of the TAA requesting information by 24 January 2018[88]. This date was extended to 7 February 2018[89].
2. The applicants and the Commissioner engaged in correspondence about this, and the applicants provided documentation relating to the Chan Suk Hing Loan Agreement, the Chan Loan Extension Agreement and the caveat[90].
3. On 18 June 2018, the delegate wrote to Mr Li:

(a) issuing a further section 82 request for information in relation to Acquisition 3[91];

(b) noting discrepancies in the documents provided[92]; and

(c) requiring the submission of acquisition statements within 14 days[93].

1. Mr Li provided further documents on 1 July 2018[94], including the first valuation report.
2. In the course of this correspondence, Mr Li advised[95] that the Company would transfer the 65 shares transferred to Mr Hung Li back to himself. In the letter of 2 July 2018, the Commissioner's delegate advised that:

I note your comment in your letter in respect of your intention to transfer 65 shares from yourself to Mr Hung Li. As outlined above, this transaction would be considered a relevant acquisition in accordance with section 86 of the Duties Act and, therefore, duty would be payable.[96]

1. On 2 July 2018, the delegate advised Mr Li that as no duty had been paid in 90- days, a tax default had occurred. The delegate allowed a further 7 days to provide the acquisition statements, through which a request for an exemption could be lodged[97]. The document also set out the Commissioner's understanding of sections 86, 87 and 88 of the Duties Act and the applicants' duty to file an acquisition statement, even if they believe the acquisition to be exempt[98]. Mr Li agreed to file acquisition statements, and asked for, and was granted, an extension to 13 July 2018 to do so[99].
2. On 13 July 2018, Mr Li lodged acquisition statements for the relevant acquisitions, claiming an exemption under section 50A of the Duties Act[100]. On 17 July 2018, the delegate advised Mr Li that this exemption did not apply to landholder's duty and set out the exemptions that did apply to landholders.[101]
3. On 18 July 2018, Mr Li lodged acquisition statements for all the relevant acquisitions, claiming the loan exemption and trust exemption for all of them[102].
4. On 20 July 2018, the delegate wrote to Mr Li[103] and advised:

(a) The trust exemption was not relevant because no trusts were involved; and

(b) Further information was required in relation to the loan exemption.

1. Mr Li responded that day, providing a copy of the Hung Kar Tat Loan Agreement and advising that he did not have any documentation in relation to the fourth loan (i.e. the He loan)[104].
2. On 3 August 2018, the delegate advised Mr Li that the Commissioner was not satisfied that the loan exemption applied and inviting further submissions from him as to why it did[105].
3. In response to this, on 10 September 2018, Mr Li provided the delegate with the MOU note.
4. On 24 September 2018, the delegate asked Mr Li to provide evidence and details for payment of the loan amounts[106].
5. Mr Li responded by:

(a) providing a bank transfer receipt for the Tay family loan dated 27 February 2012[107];

(b) advising he did not have any records of the fourth loan, but providing a copy of the letter from Vong and Associates confirming the loan[108]; and

(c) attaching the bank transfers in relation to the Li family loan[109].

1. The Commissioner was not satisfied that the evidence established that the loan exemption applied and issued the Notices for Assessment on 26 April 2019[110].
2. The notices imposed 50% penalty tax in relation to each acquisition.

Preliminary notes on the acquisition statements

1. In relation to the acquisition statements, the Duties Act provides that an acquisition statement has to be lodged within 90 days of the relevant acquisition. That permitted 90 days had long passed when the defaults were identified, and the statements were not lodged until 2018. However, the Commissioner's Counsel advised the Tribunal that in relation to this obligation, the Commissioner takes the practical position that the requirement that a person's eligibility for the exemption is assessed at the time they lodge an acquisition statement, even if that statement is later than the 90 day period required by section 87(3) of the Duties Act, and that this is consistent with section 152 of the Legislation Act 2001, which provides that where there is a timeframe for doing something mandatory in an Act, that obligation continues even where the timeframe has lapsed. So, anyone who undertakes any of these transactions that would be dutiable remains obliged to file an acquisition statement, and when filed, that acquisition statement is taken to be an acquisition statement made under part 3.2 of the Duties Act.
2. The Commissioner acknowledged it is open to the Tribunal to take a different interpretation. However, in circumstances where the Commissioner's concession appears open on the words of the legislation, and is not contested, and is in any case in the applicants' favour, I see no reason to take a different view.

1. In broad terms, the applicants submit that the Tribunal should look to the substance of the acquisitions, rather than the form. They say that acquisitions 1A and 2 were transfers of shares to provide security for loans and subject to the "loan exemption" in section 95 of the Duties Act, while Acquisition 3 was an error that was subsequently rectified. In the alternative, they argue that all acquisitions were made "on trust" and are therefore covered by the "trust exemption" in section 115H.

Applicants' submissions on the nature of the transfer of interest of the shares

1. The applicants submit that in the cases of Acquisition 1A and 2, the interest in the share that was transferred was a "non-beneficial" interest only.
2. To their credit, the applicants frankly concede that the ASIC documents state otherwise, and indeed record the transfers as beneficial. However, they say the record is an error, and is in any case not determinative of the true factual situation.
3. In this regard, the applicants rely on the decision of Presidential Member Symons in Francey v Commissioner for ACT Revenue [2013] ACAT 84, upheld on appeal in Commissioner for ACT Revenue v Francey [2014] ACAT 67 (Francey). In that case, the original decision of the Commissioner was based on ASIC documents showing that shares in a particular company were beneficially held by another company (KTC) and had been transferred to the applicant. The agreed facts, set out in paragraph 8 of the decision, were that immediately prior to the purchase of land, the applicant had entered a purchase option to acquire all the shares. The option was exercised three and a half years later, at a nominal price. The Commissioner relied on the ASIC documents, which said that KTC was the beneficial owner, therefore there was a transfer of beneficial ownership of the shares in August 2011 and duty was payable. The applicant argued, as summarised at paragraph 25 of the decision, that because of the existence of the option, there was a constructive trust from the date when the option came into effect through until the date when the option was exercised, which meant that there was no change in beneficial ownership and therefore no duty payable. The Tribunal's conclusion, at paragraph 58, was that a constructive trust arose no later than 14 January 2008, which was the date of purchase of the property, and that therefore beneficial ownership was vested in the applicant from that date, notwithstanding that the ASIC documents indicated the contrary, what was transferred in August 2011 was bare legal title. This decision was upheld on appeal.
4. The applicants concede that the facts in Francey are distinguishable from those in the present case, but say some of the principles are relevant - first that what is recorded in ASIC is not necessarily conclusive; and, secondly, beneficial ownership does not necessarily coincide with bare legal ownership.
5. The applicants contend that, taken as a whole, the evidence of Mr Li and Mr Tay is consistent with the shares having only been transferred as a form of security, with no entitlement to a dividend or other beneficial interest.

1. The applicants accept that credit is a key issue in the case. In response to the accusation that they have "constructed" the loan-exemption/non-beneficial transfer argument retrospectively, they submit that this was not born out by the evidence.
2. The applicants contend that the sequence of events undermines any suggestion of construction of the defence:

(a) A notice of investigation was issued on 20 December 2017, together with a section 82 notice[111].

(b) Mr Li responded on 5 February 2018[112] stating that the 65 per cent share transfer in 2016 was as security for a loan (noting that he was actually asked about Acquisition 1 but responded about Acquisition 2).

(c) The Commissioner's representative tried to assist the applicants[113], and on 18 June 2018 issued an email and a section 82 notice requiring Mr Li to provide acquisition statements within 14 days[114].

(d) Mr Li then provided a further response[115] saying:

"All the funds to support the business activity are from my family from our overseas business. Till today, the company still not repay any money or interest to the loan ... I'll reverse the share transfer of that 65% from my father Mr Hung Li and let them just keep the caveat for the company property to save all this hassle."

(e) The Commissioner's representative, on 2 July 2018, warned Mr Li that there may be further duty payable if he did that. He also agreed to an extension for lodgement of the acquisition statements until 13 July 2018.

(f) On 13 July 2018, the applicants filed the initial acquisition statements seeking to rely on section 50A of the Duties Act, which the applicants now agree is not relevant[116].

(g) The Commissioner's representative then explained what exemptions are available for these types of transactions and Mr Li learned that section 95, section 115J and section 115H are available for the first time on 17 July 2018.

1. The applicants say that the Tribunal should conclude that much of the evidence around the existence of the loans predates the applicants learning that there was a loan exception, and that this should convince the Tribunal that these were in fact genuine arrangements.

1. Subsection 95(1)(b) of the Duties Act provides for an exemption to duty where the Commissioner is satisfied that the acquisition is for the purpose of securing financial accommodation at the time the statement is lodged.
2. "Financial accommodation" includes an arrangement to provide security for a loan.
3. The Company was established with Mr Li and Mr Tay, as directors, holding a 50% interest each.
4. In August 2011, the directors resolved to buy the Property. To facilitate that purpose, there were a series of loans[117] including a loan of $1.8 million[118] from Mr Li's family, and $600,000 from Mr He.
5. Mr He's investment was associated with his application for permanent residency, which required that he invested money in Australia. He did this by loaning money to the Company.
6. The applicants concede that there is no available documentary evidence of this, the fourth loan, nor is there any of documentary evidence of a transfer of money, or the repayment of the loan, but there is other evidence in the form of:

(a) the oral evidence of Mr Li and Mr Tay;

(b) a note in the company register on 8 August 2011[119] which indicates that the share transfer to Mr He was for a security purpose; and

(c) the letter from Mr Allen Vong, the company accountant at the time, dated 10 December 2013, which on its face confirms that as at 30 June 2013, the company had a current liability in the form of an unsecured interest free loan from Mr He for $600,000[120].

1. The repayment of the He loan happened in China, which partially explains why no evidence has been presented by the applicants.
2. At the time that the loans were made, Mr Tay and Mr Li had one share each, or 50 per cent each. They resolved to amend the structure to reflect the respective investments made by their families and to give Mr He security.
3. To do this, they issued 98 more shares, 49 of those shares went to Mr Tay to give him 50% of the shares; another 24 shares to Mr Li, so he became a 25 per cent shareholder; and 25 shares to Mr He. This arrangement reflected the greater investment by Mr Li's family in the Company. The share dispositions are reflected in the change to company details record of 8 August 2011[121]. An ASIC document reflecting those new arrangements was lodged later, in 2012[122].
4. The share arrangement is clear evidence of Mr He's investment in the Company.
5. The applicants acknowledge that the ASIC document and to some extent the share register refer (mistakenly) to a change of beneficial ownership, but the share register also indicates that the transfer of shares to Mr He was as security for his loan.
6. The applicants submit that the overall effect of this transfer of shares to Mr He was that he was in an equivalent position to a mortgagee under old title land who holds the certificate of title. There was no change in beneficial ownership as such, at least unless and until there is a default on the relevant loan, at which point the mortgagee or the shareholder (the legal shareholder in this case) becomes entitled to take further action, or at least has a claim on any proceeds of any sale. This, the applicants say, means that there was no dutiable transfer of the shares at all.
7. To the extent there was a dutiable transfer, it was for security purposes. The financial accommodation had been given back at the time of the original loan (which was before the Property was purchased), but it would be a nonsensical interpretation of section 95 to say that the transfer back of shares, when the loan is repaid, would be dutiable. So, on a common sense, purposive, interpretation to the provision, the Tribunal should hold that it encompasses a reacquisition of the type that occurred with Mr He and that therefore by operation of the loan exemption no liability would arise in relation to the first reacquisition.

1. This acquisition concerns the transfer of 75 per cent of shares from Mr Li to his father, Mr Hung Li. The duty is payable by Mr Hung Li.
2. Mr Hung Li was not available to give evidence. He is elderly and has health concerns. His position was represented by Mr Li.
3. The evidence of Mr Li and Mr Tay was that the purpose of this transfer was to provide security for the loans that had been provided by Mr Li's family, including Mr Hung Li, to the Company. Evidence of this arrangement is found in notes in the share register on 8 February 2016 saying that the transfer of the shares was as security for the loan funds that Mr Li's parents had provided.
4. This was an informal family arrangement, and that is some explanation for the limited contemporaneous documentation. However, the existence of the loans was not put in dispute by the respondent, and it should follow that if the loan is found to exist, then the need for security should similarly be accepted.
5. Further, evidence of the security arrangement can be inferred from the evidence of Mr Tay that in June 2016, it was determined that the transfer of shares was not necessary because the Li family was given permission to lodge a caveat over the Property. There is a minuted agreement that the shares be transferred back.
6. The applicants conceded that things then get complicated, as it is not clear what has happened to these 75 shares.
7. Mr Tay gave evidence that he endeavoured, admittedly some years after the event, to convince ASIC to recharacterize the 75 per cent transfer from Mr Li to Mr Hung Li. This was not reflected in ASIC registrar, and (to adopt the words of the applicants' counsel), it appears that 75 per cent of shares have, in the words of Mr Hassall:

"just sort of gone off the radar altogether, sort of disappeared, but we submit that the tribunal has no reason not to find that the intention of the parties was that that 75 per cent of shares go back to [Mr] Li."

1. The applicants submit that the Tribunal would be satisfied relatively comfortably that that transfer was connected with the fact that the Li family had lent substantial amounts of money to the Company and that the purpose was both to reflect that and to ensure that such a situation continued. When the loan was secured by alternative means, the shares were transferred back, and no duty is payable.
2. The applicants acknowledged, again, that the ASIC documents and part of what was recorded in the Company share register talked about a change of beneficial ownership, but again cited Francey as authority for the proposition that what is recorded in the ASIC is not determinative.

1. This is the 1 July 2016 acquisition by Mr Li of 20 shares from Mr Tay.
2. Mr Li could not explained - or perhaps more accurately, could not remember - the purpose of this transfer but neither he nor Mr Tay contemplated that it would result in Mr Tay having no shares in the Company.
3. Ms Yuen says she identified the error in 2017. It was never put to her that she did not in fact identify an error and nor was her evidence challenged. Within days of her advising Mr Tay and Mr Li of the situation, the transfer was reversed, such that Mr Tay got the 20 per cent of shares back.
4. The applicants submit that duty should not be applied in relation to something which was "manifestly an error" and was corrected as soon as it was identified.
5. The applicants referred to the case of Wambo Coal Pty Ltd v Stuart Karim Ariff & 1 Or, [2007] NSWSC 589 (Wambo Coal) per White J of the NSW Supreme Court. In that case, there was a transfer of property in error, and White J considered what the law was in relation to that type of situation, where there was a resulting trust potentially, or a constructive trust, and referred to some of those cases where banks deposit money into people's bank accounts and then sue them when they spend it. Hence, at paragraph 42, White J observed:

I do not see why, in principle, a constructive trust arising from the retention of moneys known to have been paid by mistake, and for which there was no consideration, would not arise from the time the payee acquired such knowledge, if the moneys paid could still be identified at the time such knowledge was acquired. Such a trust is as much an institutional trust as a trust imposed on property in the hands of the thief.

1. The applicants submit that the same conclusion should be reached in this case. The Tribunal needs no more to find that it was an error and that the Duties Act does not apply to errors.

1. In the alternative, the applicants submitted that all three relevant reacquisitions are covered by section 115H(2)(f) of the Duties Act.
2. Section 115H is a strangely worded provision. It applies when the land the subject of the interest concerned could have been acquired by the person in a way that results in no duty being payable under any of the listed provisions. This, the applicants' counsel submitted, requires something of a hypothetical exercise - could the Property "that is the subject of the interest concerned could have been acquired by the person ... in a way that results in no duty being payable...?"[123]
3. One part of the applicants' argument is that there does not need to have been a transfer of the shares on trust - if there had been a transfer then section 115H(2)(f) would have had no work to do. Instead, the issue is the potential transfer of the land. Following this, the applicants submitted that the question for the Tribunal is whether the land "could have been" effectively initially transferred and then transferred back pursuant to a trust arrangement in accordance with section 57 of the Duties Act.
4. Turning to section 57(1), the applicants submitted that if there is:

(a) an initial transfer to a trustee for the transferor,

(b) then a transfer back for no consideration, and

(c) no person other than the transferor has had a beneficial interest in the dutiable property in the meantime,

then duty is not payable in relation to the transfer back, nor is it payable in relation to the original transfer, as per section 57(2), and section 115H(2)(f) applies to the reacquisition.

1. Accordingly, the applicants submitted, the share transactions which are the subject of the Acquisition 1A could have been given effect by a transfer of the land to Mr He to be held by Mr He as trustee for the first applicant, and the subsequent transfer of the land back from Mr He, in circumstances where no person other than the first applicant had a beneficial interest in the land in the interim; and because there was no default on the loan (if there was a loan).
2. A similar approach could be taken to the second and third transfers. Undertaking the hypothetical exercise, 20 per cent of the Property could have been acquired by Mr Li in a way resulting in duty not being payable under section 57 because it could have been transferred by Mr Tay to Mr Li as trustee. It could then transferred back for no consideration and no person other than the transferor had a beneficial interest in it at any stage. Accordingly, the Property the subject of Acquisition 3 could have been acquired in a way that resulted in no duty being payable and is therefore not liable for duty by operation of the trust exception
3. The applicants further submitted that, setting aside hypotheticals, if the Tribunal does not accept that there was a loan from Mr He to the Company, then the trust exemption would still apply, because it would be a situation where there was no consideration moving in any direction and a trust would arise:

"if [the Tribunal] accept[s] that, notwithstanding the evidence that it was required as part of Mr He's permanent residency and so forth, that it was nothing more than a sham, then it must follow from that that there's no consideration and therefore that section 57(1) is in play, and by extension, section 115H(2)(f)."[124]

1. In relation to the transfer to Mr Hung Li of the 75 shares, the applicants say that the same analysis is available, that as the parties decided to reverse the transfer "within a matter of months", upon other security being arranged, there wasn't an intention to change beneficial ownership. It was akin to a mortgagee under old system land who holds a certificate of title on trust and the trust exemption would apply.

Applicant's submissions on the value of the land

1. The applicants' contention is, effectively, that the 2016 transactions are closer in time to the second valuation report, and so that's the figure that should be adopted in terms of calculating duty, at least in relation to the latter acquisition.

1. In terms of the appeal on the penalty tax issue, the applicants noted that the documents did not identify the date of the tax default and the date from which penalty tax has been calculated as being payable.
2. The applicants further noted that the Commissioner had imposed a 50 per cent rate of penalty tax because, among other things, the applicants sought to exercise their rights and sought to try to rely on the exemptions[125]. They cited the following passage in the decision in support of this:

I consider that penalty tax at 50 per cent remains appropriate here in accordance with section 30(2)(a)(iii). The taxpayer attempted to avoid payment of duty by claiming multiple exemptions and upon being refused under one exemption, simply tried to claim another, ultimately culminating in objection once the investigation was concluded and a Notice of Assessment issued.[126]

1. The applicants submitted that effectively what is being put there is that the applicants are being punished for seeking to claim the exemptions.
2. The applicants acknowledged they had the advice of accountants from time to time, but at the critical times they didn't have the assistance of an accountant.

1. The Commissioner's position is that the Tribunal cannot be satisfied on the evidence before it that any of the exemptions are made out, having regard to section 101(3) of the TAA.
2. The Commissioner rejected the applicants' position that the Tribunal should look to the end result of this series of transactions (a 30 per cent increase in Mr Li's shareholding) and contended that each transaction should be viewed separately[127]. The Commissioner conceded that were there a series of transactions very close together that are intended to, in practice, be all part of the same transaction, there might need to be some leeway to this, but that's not the case here where the transactions unfolded over a period of about nine years. The Duties Act deals with each relevant acquisition separately, and that is defined in sections 85 and 86 of the Duties Act.
3. In terms of the loan exemption, the Commissioner agrees that "financial accommodation" includes a loan and that duty is not payable in relation to a transfer of shares made for the purpose of securing a loan so long as those shares are transferred back within five years.
4. The respondent accepts that the Tribunal's role is to stand in the shoes of the decision-maker and the tribunal can make that assessment itself.
5. On this basis, the respondent submitted that the questions in relation to each transaction for the loan exemption are:

(a) whether the Tribunal can be satisfied that the acquisition was effected for the purpose of securing financial accommodation; and

(b) if so, whether the shares were transferred back within five years.

1. The Commissioner submitted that in terms of the facts before the Tribunal, this was "really a matter of credibility in terms of the evidence of Mr Chi Man Li...".[128] The respondent did not submit that Mr Li was attempting to be deliberately dishonest in his evidence to the Tribunal, but rather submitted that the Tribunal would have reservations about the reliability of his evidence.
2. The Commissioner submitted that Mr Li:

(a) repeatedly asked during cross-examination what his evidence was in his statement; and

(b) showed a lack of knowledge of the day-to-day workings of the Company, in terms of reliance on the accountant and confusion to date about the significance of particular transactions;

(c) recollected matters that were directly contradicted by other evidence; and

(d) failed to produce any documentary evidence to support the submissions made.

1. The respondent submitted that for these reasons, the Tribunal should not accept assertions made by Mr Li unless they're corroborated by documentary evidence, noting that authorities say that contemporaneous documents prepared without an eye to legal proceedings should be preferred over latterly constructed documents, and that is particularly the case here, where large transactions have left no paper trail, or no available paper trail, or are obviously incomplete.
2. The respondent conceded that there were consistent references to the share transfer being "for the purposes of" providing security in some documents, but submitted it is not clear what was meant by that.[129]
3. Finally, the Commissioner submitted that the statements of Mr Tim Tay, Ms Yuen and Mr Hung Li cannot give evidence as to Mr Chi Man Li's intentions or purposes, although they can provide support for some facts. The Commissioner submitted that the evidence of Mr Tay was limited to confirming some assertions made by Mr Li without reference to records, and in any case, it lacked precision.

Commissioner's submissions in relation to Acquisition 1A

1. This is the transfer of 25 shares from Mr He to Mr Li on 24 March 2015.
2. The respondent makes two submissions in relation to this acquisition.
3. First, the respondent submits that the Tribunal cannot be satisfied from the evidence before it that there was any loan from Mr He to the Company because there was no evidence of money received or repaid by the Company including no bank records. Mr Li, the Commissioner notes, could not explain why that was and has proffered no documents, nor any dates. At its highest, Mr Tay has confirmed that money was repaid, on an unstated date, to Mr He in China. He also offered no documents to support his recollection.
4. The respondents noted that, to the extent Mr Li also said that the funds were repaid in 2020, bank records should ordinarily be readily available, whether in China or Australia. That the documents may have been in Chinese was also not a reasonable explanation, as the T-docs and material annexed to Mr Li's statement included translated versions of other international transfers. There is no mention in the Company's financial reports of this loan from Mr He as a liability in 2016 or 2017, when Mr Li contends the money was still owed. Mr Li was taken to those financial statements in cross examination and could not explain this[130].
5. The Commissioner contended that given how long it took this matter to progress through review and then the Tribunal, the applicants have had ample opportunity to obtain those records. Drawing on Jones v Dunkel,[131] the respondent invited the Tribunal to find that those banking and transactional records would not have assisted the applicants if they in fact exist.
6. The only documentary evidence of the loan from Mr He to the Company is the audit confirmation letter in 2013 prepared by the accountant, Mr Vong, confirming the loan[132], and the personal guarantee apparently signed by Chi Man Li and Mr Tay in March 2015[133]. Mr Vong did not provide a witness statement and was not called to give evidence, and nor was Mr He. No explanation has been offered for the absence of these witnesses, and the Tribunal should draw the inference that neither's evidence would have assisted the applicants.
7. Further, the respondent submitted, even if the Tribunal accepts that there was a loan from Me He to the Company, that there is insufficient evidence, from Mr He or the Company, as to the terms of the loan and its relationship to the share transfer. There is also no evidence that the shares were held by Mr He on anything other than a beneficial basis, that is, that he held full legal title, and the available documentary evidence is to the contrary. It is unclear what benefit Mr He was intended to get from the shares.
8. Further, the Commissioner submitted, even if the shares were security, a beneficial interest may have been passed. Mr Li was asked how the shares would have provided any security to Mr He if Mr He was prevented from dealing with the shares himself - and he conceded that they provided security because if there was a default and the Company was forced to sell the land, and Mr He would get a distribution of the assets because of his ownership of the shares[134]. That is, the respondent contended, consistent with beneficial ownership, and with a relevant interest passing.
9. The respondent conceded that Mr Li gave "a perfectly acceptable explanation of what he understood by the term 'beneficial ownership'[135] but he was unable to name who did have beneficial ownership of the transferred shares if Mr He did not, stating that "no one" had the beneficial ownership of the shares.[136]
10. The Commissioner further submitted that it was perfectly plausible that parties could enter into a loan agreement - in some ways consistent with a 'mortgage' - where the shares are transferred fully on condition that they will be transferred back on repayment of the loan. That doesn't require any trust to be in place or any question to be held about the beneficial status of the shares. It's just a simple contractual term, and of course, if the recipient of the shares sells them in the meantime and is not in a position to transfer the shares back at some point later, they would be in default of a contract.
11. The respondent accepted the applicants' contention, drawn from Francey, about the ASIC documents not necessarily being determinative and definitive, but in this case, there are no other documents. However, the Commissioner noted that in Fancey the Tribunal had the benefit of the evidence of the recipient of those shares, who was able to give evidence that they understood that they were not receiving the beneficial interest of those shares. It had a written agreement that provided for a constructive trust, and clearly set out the basis on which Ms Francey could assert her beneficial title to those shares, that on the happening of a certain event she was entitled to pay 1 dollar and have those shares transferred to her. No equivalent documentary or oral evidence was provided in this case.

Commissioner's submissions in relation to Acquisition 2

1. Acquisition 2 is the transfer of 75 shares from Mr Li to Mr Hung Li on 8 February 2016. Mr Hung Li is liable for the duty.
2. The Commissioner does not dispute that the Li family did in fact loan the Company money and conceded that there was "plenty of documentary evidence showing the transfer of sums of money."[137]
3. The Commissioner also does not dispute that there was loan agreement that 65 shares would be transferred from in 2020[138], but notes that other than Mr Li's oral evidence, there's no evidence of any such agreement in relation to the other ten shares. Mr Tay's evidence about this should, the Commissioner, be disregarded.
4. In any case, the Commissioner says that the exemption in section 95 of the Duties Act cannot apply to acquisition of 65 shares because there is no evidence that they have been transferred back within five years, or indeed at all, as is required by section 95(3).
5. Mr Li gave evidence that they were transferred back in 2020, but there is no record of that happening. Moreover, as at 30 September 2020[139],he was communicating with the Revenue Office on the basis that 75 shares were still held by Mr Hung Li.
6. Mr Tay says in his statement that the 75 shares were transferred back on 25 June 2016, but he conceded that that was the date when it was decided that the transfer would happen, not the date when it did happen.
7. Mr Tay filed a change in details document with ASIC[140] on 28 September 2020. Mr Tay gave evidence that the purpose of that document as at September 2020 was to correct the share register as to the status of Mr Hung Li's shares - that is, whether beneficially held or not - rather than any change to the ownership of those shares.
8. A month before the hearing, Mr Tay then filed a document[141] which appears to be requesting the shares be revised back from Mr Hung Li to Mr Li - but that is an action that's taken many years after the fact and should be viewed by the Tribunal in light of the fact that the current proceedings are on foot and the applicants are attempting to establish that those shares were transferred back in 2020.
9. What has happened to those 65 shares is now unclear. It appears that they have 'fallen off' the ASIC register, in the sense that contemporary records no longer record them as appearing on it. No one appears to know how this happened, but one can assume they were not reacquired by Mr Li
10. Accordingly, the applicants' submission that those 65 shares have been transferred back is unsustainable, and the loan exemption cannot apply.
11. The loan exemption for the remaining 10 shares cannot be established either. The Hun Kar Tat Loan Agreement does not contain any reference to the transfer of shares as security for the loan from the Tay family. The only evidence is found in Mr Hung Li's statement, but the respondent submitted that should be given little weight considering he was not available for cross-examination.
12. In terms of the trust exemption, there is insufficient evidence for the Tribunal to be satisfied that Mr Li retained beneficial ownership of the shares following the transfer to his father, which the respondent says is what is required under section 115H(2)(f).
13. Similarly to Acquisition 1A, the respondent noted that agreement that the shares were security for the loan does not in itself mean that beneficial ownership did not pass from Mr Li, and in this regard Mr Li's evidence was in any case contradictory. He acknowledged that a shareholder would have had the benefit of a distribution of assets if the Company needed to sell the land. However, he did state in his re-examination that as far as he was concerned, his father was not able to sell the shares or claim ownership of the Company's assets. The respondent submitted that this confusion supports the respondent's position that the status of the shares, and whether there was a transfer of the beneficial ownership, was never clarified and is not clearly what was intended. There is, the Commissioner says, no reason to go beyond the standard approach that a transfer of the shares transfers legal ownership.
14. Further, to the extent that there is documentary evidence, it does not support the transfer of a non-beneficial interest. The Chan Suk Hing agreement, which described the agreed arrangements, is silent as to a beneficial or non-beneficial interest assigned. It does say that the shares are to be given as security for the loan, but it that does not decide the issue.

Commissioner's submissions in relation to Acquisition 3

1. This was the transfer of 20 shares from Mr Tay to Mr Li on 1 July 2016, which was said to be a mistake.
2. The minutes of the directors meeting of 25 June 2016[142] record a decision that the Tay family, like the Li family, would be allowed to put a caveat on the Company's building on the Land as security for the Tay Loan, instead of Mr Tay's shares, which would be transferred back to Mr Li.
3. The respondent agrees that transfer of all Mr Tay's shares appears to have been a mistake, and as soon as the members realised that, steps were taken to return the shares to Mr Tay, albeit well over a year after the acquisition.
4. The respondent further concedes that this raised some interesting questions about mistake of fact. However, they argue that it is not made out in this case.
5. The applicants' case is that because the transfer was made in error, a constructive trust arose as per the Wambo v Ariff case,[143] which states that a constructive trust arises at the time that the receiver acquires knowledge of the mistake and not from the date of the receipt. However, there are problems with applying the case. Mr Li didn't realise the mistake until December 2017, so what is the status of those shares for the 17 months prior when the court says a constructive trust only arises when a person realises there has been an error?
6. Further, the respondent queries, what was the mistake: that the applicants just never intended to transfer the shares or only that they never intended for Mr Tay to have zero share? On the evidence, it appears to be the latter. Accordingly, the Commissioner submits, it was not the transfer itself that was a mistake, but rather the unintended consequence. Mr Li and Mr Tay gave evidence that the minutes of the meeting where the transfer was agreed were accurate, and that all members, including Mr Tay, agreed he would transfer the 20 shares to Mr Li.
7. The respondent submitted that there was "obviously confusion about why that was happening, but the fact remains that decision was taken by the directors and then implemented, and it seems nonsensical to then say it was a mistake".[144] Consistent with contract law, the subjective intention of the parties is not relevant and it's the objective intention to be gleaned from the evidence of whether those shares were intended to be transferred.
8. The respondent submitted that Ms Yuen's evidence adds nothing to what the Tribunal needs to consider. She gave evidence that she was not privy to the directors' meeting, to the decisions of the Company or discussions with either of those shareholders, Mr Li or Mr Tay, in the period between that meeting and the transfer of the shares. So to the extent that she discovered that there was zero share held by Mr Tay 17 months later or that Mr Li told her it was a mistake does not assist the Tribunal's assessment of that situation.
9. Accordingly, the respondent's position is that there was no trust, because the shares were in fact fully transferred.
10. Finally, the Commissioner noted that the acquisition statements that were filed on 18 July 2018[145] assert the loan exemption in relation to all the acquisitions. Including this one. This, the Commissioner submitted, was further evidence that the applicants were confused as to what was happening with the transactions.

Commissioner's submissions in relation to the trust exemption

1. The Commissioner agreed section 115H was "curiously worded," noting that:

"by itself, I think if you were to take that purely literally, leaves open an infinite hypothetical possibility that really any transaction could have been structured in a certain way."[146]

1. However, the Commissioner submitted that the provision needs to be interpreted in its context and purpose, and if we look at the purpose of part 3.2 of the Duties Act, it is about the acquisition of interests in certain land holding entities. The purpose of that part is to treat certain transactions, such as acquisitions in a land holding company, in the same way as an acquisition of the interest in the land itself. It is aimed at ensuring that a person cannot avoid the payment of duty relating to the transfer of interest in land by using a corporate structure instead. Consistently with that, the purpose of section 115H(2) is to provide a taxpayer who is caught by these provisions with the benefit of the same exemptions from duty that they would have been entitled to had the same transaction been entered into directly in respect of the dutiable property. Therefore, the respondent submitted, the correct approach is to apply the chapter 2 exemptions - those in sections 54 to 63, including section 57 as relied on by the applicants - as if the reference to "transfer of dutiable property" in those exemptions instead refers to the acquisition of an interest involving land.

Commissioner's submissions in relation to the Valuation

1. The respondent submitted that the relevant transactions all took place before the second valuation, in 2017, in between March 2015 and July 2016, and the practice of the Revenue Office is to accept generally what's been provided by an applicant in terms of the value of the property, and the first valuation, for 2014, was provided first.
2. A valuation after the transactions is, the respondents say, not appropriate, because it is not possible to tell when the change in those valuations occurred or how to discount for any changes.
3. The respondent did not make any submissions about what the legislation says about what needs to be taken as the valuation. Rather, the Commissioner submitted it was appropriate to do what the Commissioner did and to use the only valuation that was in effect, or in existence, at the time of the transactions.

Commissioner's submissions on the penalty tax issue

1. The Commissioner submits that 50% penalty tax is appropriate because each of the grounds in section 31(2) to the TAA are satisfied:

(a) The applicants took no action to lodge acquisition statements in relation to the acquisitions, or to notify the Commissioner of the acquisitions, in the one and a half to two and a half years following each transaction until December 2017;

(b) After being notified that they were under investigation in December 2017, the applicants provided information "in a piece-meal fashion, and only in response to repeated prompting or invitation",[147] hereby delaying the assessment for another year;

(c) The information provided by the applicants was incomplete and misleading;

(d) In relation to Acquisition 3, both the applicants have already incurred a tax default in respect of an earlier acquisition, and as such it was their second or subsequent tax default in relation to a similar transaction.

1. In oral submissions, the respondent acknowledged that the letter from the Commissioner to the applicants was "poorly worded",[148] and agreed with the applicants that a party cannot be subject to penalty tax merely for claiming an exemption. However, they submitted that the letter was in response to unsubstantiated applications for an exemption, asserted without any evidence at all to support them, and the officer was making requests for information and not receiving any. The respondent also submitted that the applicants brought considerably more evidence at the last minute in these proceedings, which was available to it at an earlier stage. All of the evidence that was brought in these proceedings was available to the applicants at the time that the Revenue Office first notified them that they were under investigation.

1. In response to the question as to why Mr He was not available, the applicants said that he had gone back to China.[149]
2. In relation to the transfer of 65 or 75 shares from Mr Li to Mr Hung Li, the applicants noted the entry on the share register in 2016[150] "Shares acquired: 75", and the note that the "Shares [were] for loan security". However, they acknowledged that the other documents referred only to 65 shares.
3. The applicants noted that the respondent appeared to accept that the loan exemption would have been applicable but for the fact that it says the shares were not transferred back within the five years. However:

(a) Firstly, in the first document Mr Man Li provided to the Commissioner on 5 February 2018,[151] it says, "and the full 65% shares" - 65, not 75 - "the full 65% shares will be returned to [Mr Li] after the loan being repaid before or at the terms expired in 2020."

(b) Then, in letter of 30 June,[152] Mr Li said "I will revise the share transfer of that 65% from my father, Mr Hung Li, and let them just keep the caveat for the company property to save all this hassle."

(c) Further, in response to that statement from Mr Li essentially indicating his intention to transfer the 65 per cent shares back to avoid all the hassle, the Commissioner's delegate, responded that "I note your comment in your letter in respect of your intention to transfer 65 shares from yourself to Mr Hung Li" and "[t]his transaction would be considered a relevant acquisition in accordance with section 86".[153] The applicants submitted that the delegate should have warned the applicants at this point about the need to make sure the shares were transferred it back within five years if they wished to rely on the loan exception.[154]

1. The applicants invited the Tribunal to "make any comments in your decision that you think appropriate about the propriety of the respondent, on the one hand saying today, the loan exemption is available but for the fact that the shares weren't transferred back, but on the other hand, having told Mr Li in an email on 2 July 2018 that if he transfers them back he'll be liable for more duty.[155] This, Mr Hassell contended, was akin to "Well, we gotcha, because you didn't transfer the shares back, even though we effectively told you not to."[156]
2. The applicants conceded that the evidence was unclear as to whether the shares were ever actually transferred back, but submitted that the Tribunal would be satisfied that there was an intention to transfer them back, which was at the point of being acted on, in mid 2018.
3. In relation to the alleged mistaken transfer of 20 shares, the applicants suggested that the mistake could only be explained on the basis that there was a misconception that some shares had previously been transferred from Mr Li to Mr Tay's family in the same way that had occurred with Mr Li's own family: "it would seem to be a triumph of form of over substance if that did result in a liability under the Duties Act in those types of circumstances."[157] No beneficial interest passed at any point because of what was from the outset an error, even if it wasn't discovered by the recipient until sometime later.

1. This matter is majorly one of credibility, and primarily the credibility of Mr Li.
2. A question of credibility is definitely not the same thing as a question of honesty. The respondent did not submit, and I do not find, that Mr Li gave dishonest evidence. Instead, credibility extends to such things as witness's ability to observe or remember facts and circumstances about which the witness is giving evidence.[158]
3. Clearly, Mr Li left some of the business of running the Company to his accountant. He was not entirely 'hands off'. He was involved in the strategic decisions, he attended directors' meetings, he reviewed documents prepared by the accountant, and he signed them, but did not have a thorough grasp of the technical and legal obligations of dealing in shares. So much was evident from his cross examination, where he relied on his written statement and was at time uncertain as to what had happened or what that meant.
4. This is hardly unusual. Many people, including no doubt a fair share of successful businesspeople, engage expert assistance and rely on it in good faith. The problem for Mr Li, however, is that he is the primary witness in this proceeding and thus upon him fell the task of explaining and evidencing the circumstances surrounding the acquisitions in issue. Yet his knowledge was at times incomplete, or limited to what he subjectively intended to do, rather than what happened. Poor or informal record keeping, informal arrangements, absent witnesses, and especially the failure to call the accountant whose advice he relied upon made his task even harder.
5. The Tribunal is not a Court. It may inform itself in any way it considers appropriate in the circumstances[159] and is not bound by the rules of evidence[160]. Nonetheless, its decisions must be rational and the evidence it relies upon must have a character of reliability and reasonable substance; the Tribunal cannot just accept any "mere evidence" that is put before it[161].
6. The question of credibility comes down to this: can I accept Mr Li's evidence as to states of affairs that existed at various times, even when that evidence is either unsupported by documentary evidence, or in some cases, contrary to it? The short answer is, with a few exceptions, I cannot. Having regard to all these circumstances, the Tribunal cannot accept Mr Li's uncorroborated evidence as to what he thought was happening, or what he wanted to happen, as evidence as to what, in fact or law, happened, and it especially cannot do so in circumstances where Mr Li's evidence conflicts with objective, documentary evidence. This has had significant consequences for his case.

1. One of the most challenges I have had in trying to get a grasp on the facts in this case is the apparent absence of some important documentary evidence. That is not to suggest a lack of documentary evidence per se - there is a lot of paper before the Tribunal - but there are things missing.
2. This case involves a series of share transfers, with associated questions about the factual and legal nature of those transfer, including the interest transferred. Yet there is little in the way of internal Company documentation evidencing those transfers.
3. Neither party made any submissions about how one transfers shares, either generally, or in the context of the Company specifically. However, regard can be had to the Corporations Act 2001 (Cth) (Corporations Act), and some general principles that are not contentious. A share is a form of personal property that is transferable or transmissible as provided by the company's constitution and rules[162]. When it issues shares, a company must issue share certificates that specify the number of shares in the company, the class of shares, and any amount unpaid on the spares[163]. A person who has been issued shares may dispose of their shares in a private company in one of two ways:

(a) A share sale or transfer, where they sell or transfer their shares to existing shareholders or, if permitted by the company constitution, a third party; or

(b) A share buy-back where they sell their shares back to the company.

1. All the transactions in this case were sales or transfers. How shares may be sold, and to whom, is a matter that is governed by the Corporations Act and the company's constitution (or shareholder's agreement, if there is one).
2. Pursuant to the Corporations Act, in order to affect a sale or transfer, there must be an "instrument of transfer" that meets the requirements of the Corporations Act and Regulations.[164] The form does not appear to be important, but the content is. The transferor will usually lodge the instrument of transfer and the share certificate with the company and the company records the transfer in its register. The company then registers the transfer with ASIC.
3. In this case, the Company's constitution[165] largely reflects the Corporations Act process. Shares in the Company are stated to be transferable by "written instrument in such forms as the Directors may in the circumstances accept...[e]very transfer shall be signed by both the transferor and the transferee"[166]. The Company is obliged to keep a copy of any registered instrument of transfer[167].
4. Having regard to the legal framework, I do not have any difficulty accepting, on the basis Francey and as a general statement in any case, that the ASIC register is not a definitive record of share owners or transfers. It could well be inaccurate. But where questions arise about the accuracy of the ASIC register, one would usually, presumably, look to the instrument of transfer. No such instruments have been produced in this case in relation to any of the acquisitions or reacquisitions in issue. The Company has maintained its share register[168] and I do have relevant extracts from the share register that purport to record the share transfer for Acquisition 1A, which may be sufficient where produced. Otherwise, these records, if they exist, have not been produced. I deal with the consequences of that below.

1. On the material before me, I am satisfied of the following facts, be they contested or otherwise:

(a) The Company was incorporated on 2 August 2007, and at that time it had two shareholders, Mr Li and Mr Tay, each holding 1 share each.

(b) In late 2011, Mr He "invested" $600,000 in the Company "to meet his migration requirement";

(c) On 8 August 2011, the Company issued a further 98 shares[169] and Mr He received 25 of those shares as "security" for something, as per the note recorded in the Company Register;

(d) On 22 December 2011, the Company purchased the Property, with the transfer being registered on 29 March 2012, making the Company a landholding entity from that date[170];

(e) Stamp duty of $164,000 was paid at that time of the purchase;

(f) On 20 March 2015 Mr Li, Mr Tay and Mr He reached an agreement whereby Mr He would "revise the 25% of the company's shares that used as security for the loan and resign from the position of the director of the company" and Mr Li and Mr Tay would instead offer Mr He a personal guarantee for the money;

(g) On 24 March 2015, the 25 shares that had been held by Mr He were transferred back to Mr Li;

(h) The transfer is recorded in the ASIC register as a transfer of a "beneficial interest";

(i) No duty was paid in relation to Mr Li's acquisition of the shares from Mr He, and nor was an acquisition statement filed within 90 days;

(j) No acquisition statement was lodged, but this was an oversight, not a deliberate attempt to avoid liability.

1. There does not appear to be any real contest that, while he held the shares, Mr He would have been entitled to a distribution of property from the Company had there been a default on obligations and the company was wound up.
2. The question for the Tribunal is whether I can be satisfied that:

(a) The 25 shares were ever beneficially held by Mr He; and/or

(b) Whether Mr He acquired the shares as a form of "financial accommodation" for a $600,000 investment in the Company and that they were transferred back to Mr Li upon either repayment of the loan, or an alternative form of security being provided.

1. Importantly, this is a revenue matter, which is different to other applications for review before the Tribunal because the onus expressly lies with the applicants. As the Tribunal observed in Planet Red Pty Ltd v Commissioner of ACT Revenue [2017] ACAT 18 at [17]- [18]:
   1. In the ordinary course of administrative review and the Tribunal deciding under section 68 of the ACT Civil and Administrative Tribunal Act 2008 whether to confirm, vary or set aside the decision under review, an applicant is not subject to any burden or onus of proof. The Tribunal's obligation is to hear the matter 'afresh' and to decide what it considers to be the correct or preferable decision on the material before it.
   2. Section 101(3) of the TAA modifies that position in relation to an objection to a reviewable tax decision by requiring the applicant to sustain its objection, ...

1. This means that the onus lies on Mr Li to satisfy me, on the balance of probabilities, that the exemptions apply and the objections are upheld. On an evenly balanced case, he would not be successful.
2. The first question is what "financial accommodation" means.
3. While the term "financial accommodation" is not defined in any of the Duties Act, the TAA or the Legislation Act 2001, both parties agree that it includes security for a loan.
4. The fact of the share transfer to Mr He is not in doubt, only the nature of it and the reasons for it and whether it was as security for a loan.
5. It is common ground that security for a loan can be provided by way of a share transfer. However, the Commissioner's position in this case is that the Tribunal cannot even be satisfied that there was a loan, let alone that the transfer of shares was intended as security for it.
6. The primary evidence in the support of the applicants' case is the oral testimony of Mr Li and Mr Tay. Ms Weir squarely put to Mr Li that there was no loan from Mr He.[171] Mr Li maintained that there was. Mr Tay also maintained the money was a loan, not an investment.
7. I do not find that Mr Li or My Tay were lying about when they gave evidence about Mr He's involvement with the company. Clearly, Mr He invested money and had shares transferred to him. However, this does not mean that I can be positively satisfied that the money Mr He provided to the company was a "loan", as opposed to an investment, and that the shares were transferred as security for it.
8. That is some documentary evidence in the form of the Company register, which contains a record dated 8 August 2011 describing a transfer of 25 shares to Mr He as being a "transfer for security purpose"[172]. However, there is no detail about what that "security purpose" was, nor any mention of a loan of $600,000.
9. In term of the letter of Mr Vong, prepared December 2013, but it is not clear what information was available to Mr Vong when preparing the letter, and whether it was more than was available to the Commissioner or the Tribunal. I do not place a lot of weight on this letter.
10. The applicants have provided no:

(a) documentary evidence of a transfer of $600,000 (or any amount) from Mr He to the Company at all;

(b) record of the term and conditions of the asserted loan; and

(c) documentary in relation to the transfer of the shares to Mr He, other than the note in the Company register (eg. they have not provided a copy of an instrument of transfer);

(d) documentary evidence of repayment of the loan.

1. I would not necessarily need to be satisfied of all or even most of details of the loan arrangement to find for the applicants, but in the absence of any details, and indeed the absence of any evidence from Mr He, and in light of my observations on creditability, I find it difficult to be satisfied that Mr Li's or Mr Tay's subjective understanding of what they intended by the arrangement is reflective of what objectively or legally actually occurred.
2. Again, my difficulty is the lack of documentation that should be available. I find it hard to believe that Mr He would lend such a significant amount of money, even to a friend, without written terms and conditions, if only basic ones. I also do not accept that such a large amount of money can be transferred between legal entities without there being a record. Even if I accept that the original documents may have been provided to Mr He for his residency application, I am unclear as to why copies could not have been obtained from him. That Mr He is in China is not a convincing excuse for non-compliance. Chinese banks keep records, and documents in Chinese can be translated. It may be that there are good reasons why the records of these financial transactions were not provided to the Commissioner, or to the Tribunal, but none was offered. Further, even if the originals could not be obtained, surely the Company, or Mr Vong (as the Company's accountant, and someone who wrote a letter about the loan) have a copy of at least some of these documents for their records? Or can obtain them?
3. Also problematic is that there is no other evidence as to the terms of the loan, such as interest, repayments, duration, or the circumstances under which there would be a "default" giving rise to interests in the shares. Even if the original documents were not available, it was open to the applicants to give clear testamentary evidence about discussions and agreed terms such that the Tribunal could make factual findings about them. I found both Mr Li and Mr Tay's evidence on the detail of the loans and discussions very vague and not helpful. Their evidence tended to be about subjective intention, not what was said. Perhaps many of these matters were never discussed in any detail, but whatever the case, it is hard for me to accept Mr Li's or Mr Tay's evidence as to the legal characterisation of the arrangements between the parties without evidence of the terms of that arrangement.
4. Even more problematic, neither Mr He nor Mr Vong was called as witnesses. Perhaps this would be understandable were this a small claim matter where the witness costs would be disproportionate to the claim, but this is a dispute over hundreds of thousands of dollars. It is surprising that no good reason has been provided for either witnesses' absence, beyond the unconvincing explanation that Mr He has "returned to China". The Tribunal showed a degree of flexibility in allowing proceedings to be adjourned to let Mr Tay give evidence from overseas, and likely leave would have been granted for Mr He to do so too, had leave been sought.
5. The respondent invited the Tribunal to draw inferences from the absence of these documents and witnesses consistent with the rule in Jones v Dunkel[173]. This is an evidentiary rule that operates where there is an unexplained failure by a party to call witnesses they could have called or to tender documents or other evidence they have access to. In appropriate circumstances, this may lead to an inference that the uncalled evidence would not have assisted the party. I do not think that I need to go quite that far as to draw such a conclusion. The onus is on the applicants to prove their case, and the dearth of relevant documentary and witness evidence has compromised their ability to do, even without concluding that any additional evidence would not have helped them.
6. That said, on what is before me, I am of the view that a Jones v Dunkel inference would be open to the Tribunal.
7. It short, therefore, while I am satisfied that Mr He has some involvement with the Company, including investing a significant amount of money, and being a shareholder and director for a period of time, I cannot be satisfied that the initial share allocation to Mr He was a "financial accommodation" for a loan as contended, or accordingly that the reacquisition of those shares by Mr Li id exempt under the loan exemption.
8. I note also, for completeness, that there is no contemporaneous documentary evidence before the Tribunal of the initial allocation, on or about 8 August 2011, of an initial 49 more shares Mr Li and 49 more to Mr Tay, that is said to have occurred before the allocation of 25 of Mr Li's shares to Mr He. The ASIC documents do not record this initial allocation.
9. As to the nature of the interest in the shares transferred, there was much discussion at the hearing about whether the shares in question were transferred 'beneficially' or 'non-beneficially', but again, no conclusive evidence was offered.
10. Neither party pointed to a statutory or common law definition of 'beneficial interest', but I do not think it would be controversial to say that shares are held non-beneficially when held by a person as trustee, nominee, executor or on account of another person. The 'beneficial interest' continues to belong to that other person, who is entitled to the benefit of them - eg. can sell them, receive a dividend etc.
11. It is not contentious that one way of giving financial accommodation to a person may be to allow them to "hold" shares in the Company on agreed terms and conditions that include that certain legal rights (eg. to a share of the property of the Company upon winding up) accrue only on default. Mr Li and Mr Tay gave evidence about the nature of the fourth loan - that Mr He was not entitled to a dividend and could not sell the shares but may be entitled to a distribution if the Company must sell the Property - that may be consistent with such an arrangement.
12. Again, however, records are sparse.
13. The only objective record available of the nature of the interest transferred is that of the ASIC register, which states that the interest in the shares transferred to Mr He, and reacquired by Mr Li, was of the full beneficial interest in the shares. Francey is convincing authority for the principle that the ASIC register is not determinative, errors can be made, and the Tribunal needs to look at the facts of the case, but in Francey there was competing documentation establishing an alternative intention. None has been produced here.
14. Notably, Mr Li could not say who held the beneficial interest in the shares if Mr He did not.
15. I am not convinced it necessarily follows that shares transferred for "financial accommodation" have to be non-beneficially held. There seems to be no reason why the transfer could not include the right to, for example, a dividend or a distribution from the proceeds, or even a right to sell (subject to the Company constitution). Of course, no matter the nature of the interest transferred, to avoid liability for duty, such shares would need to be returned within 5 years.[174] As such, even if I were satisfied that the shares were transferred to Mr He for the purpose of financial accommodation, I would not necessarily be satisfied that this excluded the transfer of a beneficial interest in the shares.
16. In terms of what was intended, Australian law takes an objective approach to the construction of contracts. This means that words are to be understood by determining what a reasonable person would understand them to mean. The first step in understanding the meaning of a contract is to look at the words themselves. This does not necessarily require documents, but where an oral contract is in issue, one would usually have reference to the words spoken by the parties. As noted, I do not have any evidence of the discussions between the parties about the terms of the loan or the arrangements with Mr He.
17. It may well be that Mr Li and Mr Tay did not intend for Mr He to have a beneficial interest in the shares, unless or until the Company defaulted on whatever terms of repayment that may have been agreed, but that intention is reflected only in their subjective evidence as to what they intended, and that is not sufficient evidence of that the contractual arrangements were at law.
18. Turning to the trust exemption, I agree with the Commissioner that the purpose of the exemption in section 115H is to prevent the anti-avoidance provisions accidentally creating additional liability, not to provide for an endless spiral of hypothetical scenarios about how transfers of property could be done in a way that avoids duty. In any case, for the reasons set out above, I am not convinced, on the evidence, that the shares transferred to Mr He were ever held non-beneficially or "on trust so to hypotheticals are unconvincing.
19. If there is no loan, that what was the transfer of shares for? One logical conclusion, consistent with the evidence, is Mr He and the Company, is that he purchased the shares, consistent with his investment of funds into the company, and later sold them back. However, I acknowledge there is no evidence of that, either.
20. It is unclear to me what business migration scheme Mr He was interested in and whether a repayable loan would have been sufficient to meet the requirements of it. I have no evidence on that point.
21. In summary, I do not believe that Mr Li and Mr Tay gave deliberately dishonest evidence, but I cannot be satisfied that they are sufficiently aware of the full facts for their evidence to be credible as to the factual or legal characterisation of whatever arrangement was made between themselves and Mr He in relation to either the investment of funds or the share transfer. The oral evidence is un-persuasive, the documentary evidence incomplete, and the evidence taken as a whole ambiguous.
22. The TAA is very clear - the onus is on the applicants to prove the exemption applies. The applicants have not done that. Although prepared to accept, even without documentary evidence, that Mr He invested $600,000 in the Company, I do not have sufficient evidence before me to conclude that he did so by way of a loan, or that his acquisition of the shares was a financial accommodation for that loan. Accordingly, I am not satisfied that the transfer (or allocation) of 25 shares to Mr He was:

(a) intended to be of a non-beneficial interest only;

(b) in fact or law actually of a beneficial interest only; or

(c) for the purposes of financial accommodation for a loan such that the loan exception applies; or

(d) otherwise a transfer of shares to be held on trust for Mr Li.

1. I am therefore not satisfied that Acquisition 1A, being the requestion reacquisition by Mr Li of those 25 shares held by Mr He, falls within either the loan exemption or the trust exemption.
2. In answering to the questions in relation to Acquisition 1A:

(a) Was there a "relevant acquisition" under Part 3.2 of the Duties Act:

Yes. Acquisition 1A is the acquisition of a "significant interest" in the Company by Mr Li, being the reacquisition of shares that would have entitled Mr He to a distribution of property upon the winding up of the Company.

(b) If so, are any of the exemptions in Chapter 3 of the Duties Act applicable, namely:

(i) Section 95 (loan exemption); or

(ii) Section 115H(2)(f) (the trust exemption);

No. On the evidence before me, I cannot be satisfied on the balance of probabilities that either exception applies.

(c) In relation to the transaction under review, was there been a tax default?

1. Further to the factual findings at paragraph 275 above, I am also satisfied that:

(a) From 20 March 2015, Mr Li held 80, or 85%, of the shares in the Company, having acquired:

(i) 25 shares/25% of the shares from Mr He; and

(ii) 30 shares/30% of the shares from Mr Tay;

(b) The purpose of the transfer of the 30 shares from Mr Tay was to reflect the greater investment in the Company by Mr Li's family;

(c) On 2 February 2016, Mr Li agreed to transfer 75 of his shares to his father, Mr Hung Li; and

(d) It was intended that at least 65 of these shares were transferred as security for loans made to the Company by Mr Li's family;

(e) On 8 February 2016, the Company registered with ASIC a transfer of 75 shares in the Company from Mr Li to Mr Hung Li; and

(f) On 25 June 2016, Mr Li and Mr Hung Li agreed that Mr Li would reacquire the shares upon the Li family (and the Tay family) being permitted to put a caveat against the Property; and

(g) The caveats were lodged on 6 March 2017 and registered the following day.

1. Credibility is again an issue, and in this case the main witness is not available. I accept Mr Hung Li has a reasonable explanation for his failure to appear. Nonetheless, in a matter where the applicants bear the onus, his absence did not assist his case. I note that Mr Hung Li's wife, Ms Chan Suk Hing, was a witness to some of these events and was not called either. No explanation was offered for her non-attendance.
2. The circumstances of this acquisition are factually clearer than the others because the documentation is better. Mr Li's family clearly loaned money to the Company, and it logically follows that Mr Li's family would want some kind of security the loans. There is some evidence of the terms of the loans, in the form of the 2016 loan agreement and the Chan Loan Extension Agreement. There is also documentary evidence supporting the applicants' contention that another form of security was offered instead of the 65 shares, including a note in the Company's minute book[175]. On balance, I am satisfied that the purpose of the transfer of at least 65 of the 75 shares was for the purpose of providing security, of some kind, for monies loaned by the Li family to the Company, although I can make no determination in relation to the other 10 shares the subject of Acquisition 2.
3. None of these documents suggest that the transfer was for a "non-beneficial interest", and the ASIC documentation suggests the contrary ie. that ownership was transferred with the share transfer. On balance, I am not persuaded that the transfer was for a non-beneficial interest only. Even if a non-beneficial transfer were intended by one or more of the parties to the transaction, I am convinced, on the balance of probabilities, that it happened.
4. More fatally to the applicants' case, I cannot be satisfied that the requirements of section 95(3) of the Duties Act are met, in that the shares were transferred back within five years.
5. What has emerged from the evidence is a very strange situation. While I am satisfied Mr Li, at least, intended to reacquire at least 65 shares from his father, as per the mints of the 25 June 2016 board meeting, I cannot be satisfied this happened. It certainly does not seem to have been done immediately after the board meeting where the members decided it should happen. The agreed alternative form of security - the caveat - was not registered until March 2017, some eight months after the board meeting at which the reacquisition of shares was agreed. It seems unlikely that the shares would have been transferred back prior to this, at least, and (whatever was intended) there is no evidence to suggest any attempt to transfer them back at this time anyway.
6. Mr Li's belief that the shares were transferred back in 2020 appears to be incorrect. Again, there is no record of this happening eg. no instrument of transfer, company record or ASIC record.
7. Mr Tay contended in his oral evidence that he transferred at least 65 of the shares shortly after the board meeting on 25 June 2016, but this is not reflected in any documentation. Later, in 2020, Mr Tay filed documentation with ASIC attempting to change the nature of Mr Hung Li's shareholder to "non-beneficial"[176]. This submission of a change in company details form suggests that by this time, Mr Tay knew that even if the attempt to transfer the shares back had been made, it had been unsuccessful.
8. It seems that the result of Mr Tay filing this form was that the ASIC Registrar changed Mr Hung Li's shares from "fully paid" to "not" fully paid.
9. There is no current company search before the Tribunal, but there is a "profile report" from the respondent[177] that contains similar information and is dated 10 March 2021. This shows the share allocation at that time as Mr Tay holding 20 shares and Mr Li holding 5. What has happened to the other 75 shares that were held by Mr Hung Li is unclear. They appear to have (in words adopted by both parties' counsel) "fallen off" the register, presumably sometime around 2 July 2017. Immediately prior to that, they were held by Mr Hung Li, and there is nothing evidencing that he transferred them back to Mr Li.
10. So, while I can be satisfied that Mr Li and Mr Tay intended that the shares would be transfer back to Mr Li, whether in June 2016, or later upon the Li feel family being granted a caveat over the Property, and that they had an expectation that would happen at least from the time the caveats were entered in March 2017, there is nothing before me to suggest this transfer happened. What records the Tribunal has do not assist the applicants, as they do not show the reacquisition of the shares by Mr Li (or Mr Tay). There was no suggestion made to the Tribunal of any share buyback.
11. This is an entirely unsatisfactory situation. I am at a loss to explain what has happened to the shares and why the register says what it says, or how that could happen. No one was able to give a convincing explanation, and I am neither willing nor able to speculate. The short answer is, I cannot be satisfied that the shares were reacquired by the Company or Mr Li within five years of the transfer to Mr Hung Li. This leaves the Tribunal with little in the way of options, because even were I to accept that the shares were transferred for the purposes of "financial accommodation", I cannot be satisfied that the requirement in section 95(3) that the shares were reacquired within 5 years (or at all) is satisfied. Accordingly, I cannot be satisfied that the loan exception applies.
12. The applicants have asked that I make some comment on the exchange between the Commissioner's office and Mr Li in July 2018. That is the exchange in which the delegate effectively warned Mr Li (who was acting as the representative for his father) about the financial risks of transferring the shares again. Had Mr Hung Li transferred the shares back to Mr Li at this time, he may well have had a sustainable objection to the duty imposed in relation to Acquisition 2.
13. I agree with the applicants that the exchange between the Commissioner's delegate and Mr Li could have been more clearly worded, and may have led to some confusion. However, I do not accept the applicants' submission that it resulted a "gotcha" situation. The Commissioner's delegate was, quite rightly, advising the applicants that further transfers of shares may incur further duty, and was working on the information provided by the applicants. He was not in a position to consider what other exemptions the applicants could have relied upon and was not attempting, on any reasonable view, to advise them what to do. The sensible course for the applicants at that time would have been to get professional advice.
14. Moreover, even if I were satisfied that the letter was misleading, that would not alter the legal situation that presents itself - being that there is, in fact, no evidence that the shares were transferred back in the 5-year period permitted. At best, this could go to penalty tax.
15. In short, the applicants have not established that the loan exemption in section 95 of the Duties Act applies.
16. As to the trust exemption in section 115H(2)(f), the same problems that prevented this ground being made out in relation to acquisition 1A are present. There is no documentary evidence to establish that the transfer was of a non-beneficial interest. Contrary evidence exists in the form of official ASIC documentation, to suggest that in fact the opposite occurred. Mr Li himself seemed uncertain as to how the shares were intended provide security if they did not include a right to sell or a right to a distribution of profits or proceeds (at least on winding up). Mr Hung Li was not present to give any evidence about how he thought the arrangement would work or what he agreed. There was no evidence of what was said during relevant discussions. The written documentation is silent as to the nature of the interest transferred, save for those ASIC records that do not benefit the applicants. Again, given the onus is on the applicants, it is neither appropriate nor possible to draw a conclusion, contrary to the documentation, from merely the subjective evidence of one person.
17. Accordingly, in answer to the questions before the Tribunal in relation of Acquisition 2:

(a) Was it a "relevant acquisition" under Part 3.2 of the Duties Act?

Yes. This was the acquisition of a significant interest in the Company by Mr Hung Li.

(b) If so_,_ in relation to each of the transactions, are any of the exemption under Chapter 3 of the Duties Act applicable, namely:

(i) Section 95 (loan exemption); or

(ii) Section 115H(2)(f) (the trust exemption);

(c) In relation to the transactions under review, was there a tax default?

1. This was the transfer of 20 shares from Mr Tay to Mr Li on 1 July 2016, in relation to which I am satisfied of the following facts:

(a) At a Company meeting on 5 June 2016, the company resolved that the Tay family would be allowed to put a caveat against the property and that 20 shares would be revised back to Mr Li;

(b) On 1 July 2016, Mr Tay transferred 20 shares in the Company to Mr Li;

(c) Unknown to either Mr Tay or Mr Li, this amounted to a transfer to Mr Li of all Mr Tay's shares in the Company;

(d) Kar Tat Hung placed a caveat on the Property on 6 March 2017 and it was registered on 7 March 2017[178], some nine months later;

(e) Ms Yuen identified the error and the shareholders acted quickly to remedy the situation;

(f) Mr Li and Mr Tay do not deny that they intended that the transfer took place, but say that they did not appreciate what the outcome would be;

(g) Ms Yuen says she identified the error in 2017 and the shares were promptly transferred back to Mr Tay on 11 December 2017.

1. The applicants argue that duty should not be imposed on what is "manifestly" an error. In support of this argument, they rely on the decision in Wambo Coal, as cited above. They argue that as the shares were mistakenly transferred from Mr Tay to Mr Li, a constructive trust arose, such that Mr Li was not the beneficial owner of the shares.
2. I accept that it was never the intention of the parties that Mr Tay would transfer the entirety of his shareholding to Mr Li. However, this does not mean that the transaction, itself, was a "mistake" in the legal sense that would give rise to a constructive trust.
3. The difficulty I have with the mistake/error argument is this: what seems to have happened is that the transfer of shares from Mr Tay to Mr Li was consistent with what the Company had been decided should happen, but the transfer had the unintended consequence of leaving Mr Tay with no shares in the Company, something they did not want to happen. I accept that had Mr Li and Mr Tay been aware of their respective share holdings, they would not have made the transfer. However, the transfer itself was both intended and properly authorised. The transfer itself was not a mistake, only the outcome.
4. This leaves the question as to what kind of "error" is needed for a constructive trust of the kind found in that case to arise?
5. Unfortunately, neither party was in a position to fully articulate this argument or provide case law beyond the discussion in Wambo Coal.
6. There is little doubt that when a person makes a mistaken payment for no consideration, a constructive trust can arise, although only after the recipient has knowledge of the mistake[179]. It is unclear to me whether this transfer had any consideration attached to it, as the Tay family caveat (in the name of Kar Tat Hung) was lodged many months after the transfer took place, but again the evidence here is not entirely clear.
7. On the available authorities cited above, it does not appear that a trust arising from a mistake exists prior to the recipient being given knowledge of the trust. It is therefore not clear, even on a favourable reading of the facts, that a "trust" arose at the time of the transfer of the shares from Mr Tay to Mr Li. The trust, if it arose, arose later, after the duty became payable. Again, neither party was able to make any submissions on the consequences of this situation for the matter before the Tribunal, but on that sequence of events, duty was nonetheless payable at the time of the transfer.
8. I again find myself back at the question of the onus - and that lies with the applicants. Although I can empathise with the position the applicants find themselves in, I cannot be satisfied, on the arguments put to me, that a constructive trust arose such that the parties were exempted from the obligation to pay duty by the operation of sections 115H and 57 of the Duties Act. This is because, while I am satisfied there was a mistake about who held what number of shares, and what the outcome of the transfer would be, I do not accept the transaction was a mistake, although the consequences clearly were.
9. Accordingly, in answering to the issues before the Tribunal:

(a) Was it a "relevant acquisition" under Part 3.2 of the Duties Act;

Yes. This was the acquisition of a significant interest in the Company by Mr Hung Li.

(b) If so, in relation to each of the transactions, are any of the exemptions under Chapter 3 of the Duties Act applicable, namely section 115H(2)(f) (the trust exemption)?

No (there is no suggestion that the loan exception applies).

(c) In relation to each of the transactions covered by the review, whether there has been a tax default?

Conclusion on liability for duty on the acquisitions

1. The applicants' case, as competently and creatively argued as it was, requires the Tribunal to accept the evidence of the Mr Li and Mr Tay as credible, and to draw supporting inferences from incomplete and sometimes contradictory evidence.
2. If I were to draw any inferences from the evidence, it would be that the applicants had no idea when they were moving shares around that they would be liable for duty under the Duties Act. They have, inadvertently, arranged their affairs in a way that exposes them to it, perhaps excessively so. This is unfortunate. They are facing a very significant penalty.
3. However, I do not accept that section 115H of the Duties Act allows the Tribunal to hypothesise about how the shares could have been transferred in a way that minimises duty and apply those exceptions. Rather, I accept the Commissioner's position that the purpose of this section is to provide a taxpayer caught by these provisions by reason of a share transfer with the same exemptions they would have been entitled to had they acquired the dutiable Property directly. The applicants must prove a relevant exception applies to what they did.
4. The applicants' assertion of a transfer of a non-beneficial interest in relation to Acquisitions 1A and 2 may well reflect what they wanted or even perhaps intended to happen, being that the shares were offered only as a kind of security only, with rights accruing only on default. However, there is no convincing evidence to establish that this was achieved at the time. Acquisition 3 was clearly an error, but only as to the outcome. There is no basis upon which I can find a relevant trust arose at the time of transfer. The applicants' objections, accordingly, are not sustainable, and the Commissioner's decisions to impose stamp duty on Acquisitions 1A, 2 and 3 are confirmed.

Consideration in relation to the valuation issue

1. Neither party made detailed submissions about the principles of valuation. Both parties relied upon the valuation reports, and neither called the writers or the report, or any other witness. The only issue was which of the first or second valuation reports was the best estimate as to the value of the Property at the acquisition dates.
2. The approach to be taken to valuation reviews in revenue matters was considered by the Tribunal in Planet Red Pty Ltd v Commissioner of ACT Revenue [2017] ACAT 18[180] as follows:
   1. In the ordinary course of administrative review and the Tribunal deciding under section 68 of the ACT Civil and Administrative Tribunal Act 2008 whether to confirm, vary or set aside the decision under review, an applicant is not subject to any burden or onus of proof. The Tribunal's obligation is to hear the matter 'afresh' and to decide what it considers to be the correct or preferable decision on the material before it.
   2. Section 101(3) of the TAA modifies that position in relation to an objection to a reviewable tax decision by requiring the applicant to sustain its objection, meaning in this case to establish that the valuations are too high.
   3. Section 101(3) of the TAA is a general provision applying to a wide spectrum of decisions to which a taxpayer may object under section 100 of the TAA. Whether the onus has been discharged is sometimes readily decided: the Tribunal finds that a decision is right or wrong, for example whether land tax or payroll tax is payable, or not, and the amount payable according to a statutory formula. However, concerning land valuation, to decide whether the onus has been discharged is problematic. The parties agreed (and properly so) that there is no 'correct' decision, when determining the UV of land. It is necessarily a subjective exercise where legitimate opinions can and invariably will differ, as they do in this case. How then can the applicant discharge the onus?
   4. In Re Sharkey and Commissioner of Taxation the Administrative Appeals Tribunal (Cth) said in relation to 14ZZK of the Taxation Administration Act 1953, being the material equivalent of section 101(3) of the TAA:

But the practical reality in most cases is more likely to be that proper consideration of all of the material will lead the tribunal to a state of comfortable satisfaction that a particular outcome is either 'correct or preferable' in all the circumstances. Comfortable satisfaction that a different result is 'preferable' will justify the tribunal in regarding an applicant for review as having discharged the burden imposed by s 14ZZK(b) of the Taxation Administration Act - of showing that the taxation decision 'should not have been made or should have been made differently'

1. In Rawson Finances Pty Ltd v Commissioner of Taxation Jagot J, sitting as a judge of a Full Court of the Federal Court on appeal, said as follows regarding this passage from Re Sharkey:

These observations seem to me to confuse the Tribunal's general obligation as a merits decision-maker which may by s 43(1) of the AAT Act "exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision" (a power which has been held to oblige the Tribunal to make the correct or preferable decision on the available material) with the Tribunal's duty to apply s 43(1) subject to the modification imposed by, relevantly in this case, s 14ZZK(b)(i) of the TA Act. In a case where s 14ZZK(b)(i) of the TA Act applies the correct or preferable decision is to set aside the decision under review if the applicant has discharged the burden of proving that the assessment is excessive and to dismiss the review application if the applicant has not discharged that burden. The fact that the Tribunal cannot be satisfied that the Commissioner's assessments represent the correct or preferable decision does not mean that the applicant must succeed and the Commissioner fail. This would involve not only the casting of an onus of proof on the Commissioner but would also relieve the applicant of the applicant's burden of proof. Both would be impermissible.

1. In Rigoli v Commissioner of Taxation the Federal Court endorsed Jagot J's approach and then said:

... where s 14ZZK applies, the only state of satisfaction that the AAT is required to reach is whether, on the facts as found by the AAT, the taxpayer has proved that the assessment is excessive. If that state of satisfaction cannot be reached, the application for review must be dismissed.

1. These authorities demonstrate, in our view, that the Tribunal must approach its task not by endeavouring to determine what the valuations ought to be on the evidence before it and then substituting those valuations as the 'preferable' decisions for those of Commissioner. Rather, the Tribunal must first determine whether, on the evidence, the applicant has established within margins reasonably open to the Commissioner that the valuations are too high. Where valuation is necessarily a discretionary decision, in our view for the applicant to show that its viewpoint or the Tribunal's conclusion is merely marginally preferable in all the circumstances to the Commissioner's determination would not discharge the onus. In The Optimise Group Proprietory Limited and Commissioner of Taxation Forgie DP said:

49. The Tribunal's task was explained more fully in Federal Commissioner of Taxation v Dalco. Brennan J observed that the purpose behind an assessment, objection and appeal or review "... is to ascertain the true tax liability of the taxpayer under the substantive provisions of the Act." Speaking of an appeal, but the principles are equally apt to a merits review in this Tribunal, his Honour continued:

... It would be inappropriate for a court determining an appeal to make an order altering the tax liability assessed ... unless the court were satisfied that the amount to which it proposed to alter the assessment represented the true tax liability of the taxpayer. Although the grounds of objection limit the grounds of appeal, the ultimate question for the court hearing the appeal is not whether the grounds have been made out but whether the amount assessed as taxable income is wrong. The burden which rests on a taxpayer is to prove that the assessment is excessive and that burden is not necessarily discharged by showing an error by the Commissioner in forming a judgment as to the amount of the assessment.(emphasis added)

1. To the extent that the Tribunal considers (and has considered in this case) what the valuations ought to be, it is done to establish as a reference point whether the applicant has discharged its onus. If and only if the onus is discharged may the Tribunal proceed - but need not do so - to decide the extent to which the valuations are too high and substitute different valuations.

The two tasks (on the one hand, being satisfied on the facts as found that the applicant has proved that the assessment is excessive and, on the other hand, being satisfied on the facts as found as to the amount of the liability in the impugned decision) are conceptually different. The statute consigns the first task only to the Tribunal. It may be accepted that, in performing the first task, the Tribunal may consider and/or resolve the second task. No doubt in a case where the Tribunal can satisfy itself, in accordance with the second task, that the facts as found by the Tribunal give rise to the amount of the liability in the impugned decision the Tribunal can also discharge the first task with a high degree of confidence and conclude that the applicant has not proved that the assessment was excessive. Provided the Tribunal's consideration of the second task does not distract it from the task which the statute requires to be performed there will be no question of law capable of vitiating the Tribunal's decision. But the second task cannot be substituted for the first task.

1. In other words, in order to succeed, the applicants would need to satisfy the Tribunal not just that there is preferable valuation (ie. the second valuation report), but rather that the valuation undertaken by the Commissioner was incorrect or excessive_._
2. Taking their argument at its highest, the applicants contend that the Tribunal should have regard to the second valuation report, on the basis it is closer in time to the latter acquisitions than the earlier report. No authority was offered to support the principle that a later, but more proximate, valuation is to be preferred. Logically, it does not follow that a later report would be more reliable only by reason of being closer in time to the valuation date, at least unless the later report was prepared with the intention of valuing a property as a certain past date. No evidence pointed to the conditions at the time of the second valuation report being a better basis for assessing the approximate value of the Property as the acquisition times.
3. The difference in time between the respective reports and the acquisition dates is fairly minimal - the second valuation report was undertaken in October 2017, as opposed to 30 January 2014, for acquisitions that occurred between March 2015 and July 2016. An argument could be made for using different reports for different acquisitions, depending on proximity in time, but again, that is dependent on temporal proximity alone being the relevant consideration.
4. Given the differences in the valuations, presumably, something did change between January 2014 and October 2017, but neither party put on evidence about what that was, when it occurred, or the consequences for the valuation adopted by the Commissioner. The applicants did not put on any evidence to suggest that something happened in the market that would render the earlier valuation unreliable by the date of the acquisitions.
5. In the circumstances, I do not see any basis upon which I could conclude that the Commissioner's valuation was excessive or otherwise in error. There simply is not enough evidence for me to decide one way or the other, and in the absence of such evidence, I see no basis to conclude the valuation was too high, nor anything to disturb the Commissioner's assessment. I am satisfied in any case that reliance on the earlier report is, in the circumstances, correct.

1. A defaulting taxpayer is liable for penalty tax under section 30 of the TAA. The default rate of penalty tax is 25%[181], but a higher rate of 50% may be imposed in the circumstances of section 31(2) of the TAA[182].
2. The Commissioner contends that a 50% penalty tax is appropriate because the applicants:

(a) delayed the provision of information required for the assessment of tax; and

(b) provided information required under a tax law that is incorrect, incomplete or misleading; and

(c) and Mr Li in particular, defaulted a second, related time with Acquisition 3.

1. Neither of the parties made detailed submissions about any authority on the application or interpretation of section 31(2).
2. It is uncontroversial to say that the imposition of penalty tax and interest is intended to promote compliance with the self-reporting scheme for acquisitions in landowning entities, encourage cooperation and provide general deterrence of tax default.
3. Section 31 of the TAA was amended with effect from 1 July 2019, and much of the relevant caselaw relates to the legislation before this period. In the Revised Explanatory Statement of the Revenue Legislation Amendment Bill 2019, the amendment is discussed as follows:

The Bill amends the penalty tax provisions to re-align the 25 per cent rate as the "base default" penalty rate. Previously the 50 per cent rate was an additional rate for tax defaults where the Commissioner for ACT Revenue is satisfied that the default was caused wholly or partly by a failure to take reasonable care.

This amendment clarifies that the 25 per cent penalty tax rate will be applied for tax defaults. Under existing provisions where the Commissioner is satisfied that a taxpayer took reasonable care to comply with tax laws, no penalty is payable.

The Commissioner may apply the 50 per cent rate if satisfied that the tax default was caused by the taxpayer delaying the payment of tax, delaying the provision of information required to the assessment of tax , or providing information required under a tax law that is incorrect, incomplete or misleading. This rate is also applicable in instances of repeat tax defaults.

These amended penalty tax arrangements will apply to tax defaults occurring before or after 1 July 2019.

This is expected to result in fewer taxpayers being subject to the 50 per cent penalty tax rate from 1 July 2019. However, this is not expected to result in a change of outcome for those taxpayers currently subject to the application of the 50 per cent penalty tax rate as the circumstances specified in these amendments are consistent with the circumstances for a failure to take reasonable care described in Revenue Circular GEN006 of 6 July 2018.

1. In other words, post the amendments, a failure to take reasonable care attracts a default penalty of 25% and this is the baseline. The 50% penalty is for situations where there is a higher degree of culpability on the part of the defaulting taxpayer.[183]
2. There is no suggestion of deliberate tax avoidance. The applicants had no idea about the operation of the Duties Act on share transactions of this kind, which took place largely within a family and friendship group.
3. While the authorities are clear that ignorance is no excuse not to meet legal obligations[184], awareness and risk mitigation can go toward the penalty tax.
4. To their credit, the applicants did seek some professional advice, albeit from an accounting firm. It would appear, based on Mr Li's evidence, that the accountants did not advise the applicants as to their liability under the Duties Act, but it is impossible to make any finding as to why not. Apart from the limited evidence from Ms Yuen about the discovery of the error in Acquisition 3, there is no evidence before the Tribunal as to the scope of the firm's retainer and the nature of the advice it provided. In any case, the general position is that the taxpayer is liable for any default by an advisor, and there is nothing before me that suggests that the default was out of the applicants' control. The applicants concede that they did not keep good records.
5. In the circumstances, I am satisfied that the applicants did not take reasonable care. The penalty for this is the standard 25% penalty tax.
6. Whether the applicants are liable for a further penalty comes down to an analysis of their conduct after having been advised about the possible defaults.
7. The applicants submit that they are being penalised for raising arguments and exploring exemptions that were later abandoned. The applicants certainly should not be penalised for exploring which exemptions apply or pressing their rights for review. However, notwithstanding the less than precise language of the delegate, the applicants' exploring options was clearly not the basis upon which the 50% penalty tax was imposed. Rather, the true basis for the penalty tax is the delayed and inaccurate information. After being notified that they were under investigation in December 2017, the applicants (or, more precisely, Mr Li) provided incomplete information in a piece meal fashion. Certain relevant information, including fulsome explanations as to the nature of several transactions, was not provided until this hearing.
8. The Commissioner appears to believe the applicants made a strategic decision to delay responding. If that was the strategy, it was most unwise, given the significant statutory interest imposed on matters of this kind. It seems more likely, taking into account all the circumstances, and the evidence of both Mr Li and Mr Tay, that the delays were caused by a lack of understanding of the law, limited professional advice, poor organisation, unfortunate ill health and perhaps a degree of panic over the determinations and the debt. These factors explain much of the applicants' unsatisfactory response to the Commissioner's enquiries.
9. But these are explanations, not excuses.
10. As noted above, some documents are still missing. The continuing failure to produce relevant, probative evidence amounted to a delay in the provision of information. This is particularly concerning in relation to allegation 1, where additional documents must be available and were never produced. Acquisition 2 is supported by some of the better evidence, and much of that evidence was provided to the Commissioner during the investigation, albeit in a rather haphazard manner. However, the full explanation and accompanying documentation were only provided when Mr Tay filed his witness statement in these proceedings.
11. In relation to Acquisition 3, the issue is more a late explanation. The applicants did not raise the issue of the transfer being for the purposes of correcting an error until sometime into the Commissioner's investigation. For example, in the MOU document attached to the September letter to the Commissioner notes only that "In July 2016, further 20 shares transferred back to Mr Chi Man Li from Mr Liang Kheng Tay,"[185] and there is no mention at this stage of the transfer being in error. There may be a reason for this oversight - perhaps the applicants did not, at that time, understand that the error would be a ground of objection - but had that explanation been advanced up front, perhaps the matter could have been better sorted without the resort to litigation.
12. The applicants' approach was unhelpful, and I can understand the Commissioner's frustration. Although I am not convinced that the applicants were being deliberately recalcitrant or strategic in their approach, it does appear that they were at the least disorganised and (understandably given the significant amount of money involved) and distressed when presented with the Commissioner's requests. They appear to have become defensive, were sometimes less than frank, and then grasped at solutions in a way that seems to have ultimately been unhelpful.
13. Given the purpose of the penalty tax provisions, particularly the emphasis on self-reporting, understanding one's liabilities, and co-operation with the investigation, the Commissioner's decision to impose a 50% penalty tax is not without basis, and I am satisfied that the criteria for the imposition of the higher penalty tax is met.
14. That is not, however, the end of the matter. Section 37 of the TAA provides that the Commissioner may, if the Commissioner considers it appropriate in the circumstances, remit penalty tax by any amount.
15. The intended purpose of the penalty provisions of the TAA, is to encourage compliance and deter default, with the discretion available in section 37 of the TAA to recognise that mistakes do happen and to take account, when imposing penalty, of a taxpayer's genuine efforts to address the reasons for the default and ensure future compliance[186].
16. In Kessey v Commissioner for ACT Revenue [2019] ACAT 83, Member Warwick made the following observations about the operation of section 37, albeit in relation to land tax rather than duty:
    1. Under section 37 of the TAA, the Commissioner may, if the Commissioner considers it appropriate in the circumstances, remit penalty tax by any amount. The conditions or factors to be considered in exercising this discretion are not expressly stated. The discretion must be exercised within the boundaries created by the subject matter, scope and purpose of the statute and of the particular provision by which the discretion is conferred.
    2. In considering whether it is appropriate to remit penalty tax by any amount, the Tribunal must take into account subject matter, scope and purpose of the LTA, the TAA, and in particular section 37 of the TAA. The Tribunal must keep in mind the purpose for which land tax is imposed and paid. The Tribunal must keep in mind that the imposition of penalty tax and interest is intended to promote compliance with the self-reporting scheme for land tax, and to provide general deterrence of tax default . The Tribunal must keep in mind the legislative intention that the taxpayer is liable for any default by the taxpayer's agent. The Tribunal must keep in mind that section 37 does not require special or exceptional circumstances for the remission of penalty tax. Keeping all these matters in mind, the Tribunal must consider whether the penalty (as imposed by the Commissioner) is harsh, having regard to the particular circumstances of the taxpayer.
17. The applicants submit that the Tribunal should find, to adopt the Senior Member's words, that the outcome is "harsh, having regard to the particular circumstances of the taxpayer."
18. I have some sympathy for the applicants. They are facing a very large penalty for a series of familial and fraternal transactions for which they made no profit and had no anticipation of any form of taxation liability. They did not set out to avoid tax, or even to minimise it. They took some care for their affairs, and sought some degree of expert advice, albeit from an accountant, and clearly not enough.
19. Further, it is not lost on me that the applicants have probably failed to make out their objections in part due to their poor record keeping. They are paying a heavy price for those failings, and there is some unreasonableness in punishing them twice for the same mistake.
20. On the other hand, this criterion looks to hardship and personal circumstances, and I have little evidence of any relevant special personal circumstances or actual financial or other hardship to be suffered by Mr Li or Mr Hung Li. I have no information about their financial circumstances or capacity to pay, and no basis to find the penalties impose an unreasonable impact upon them as individuals. I do not know anything about their broader circumstances at all, save that commentary from Mr Li in correspondence with the Commissioner indicates that duty under the Duties Act is not the only revenue liability he accrued during his business ventures in Australia due.
21. In contrast to some other cases where the higher level of penalty tax has been reduced on review by the Tribunal, there was no evidence before the Tribunal of the steps the applicants have taken to ensure compliance in the future. Still, one can hopefully conclude that they will now seek advice and take greater care and I would expect them to proceed with more caution in the future. Hence, while general deterrence remains an important consideration, specific deterrence is now less so.
22. The unchallenged evidence of the applicants is that neither they, nor anyone else, made any profit from these arrangements, beyond perhaps avoiding the increased costs of commercial finance. There were no distributions of profits by the Company during the relevant period (or, I understand, at all).
23. Section 37 of the TAA provides that the Commissioner, in whose shoes the Tribunal is standing, may remit penalty tax "by any amount". There are no limits on this sum - there is nothing in the language used that suggests, for example, that the Tribunal is bound to remit the entirety of the additional penalty tax payable under section 31(3) of the TAA.
24. In this case, I am satisfied that the applicants did delay the provision of information required for the assessment of tax, being relevant documentation relating to all transactions, and that Acquisition 3 was a second default, in relation to a similar or related tax liability. I am, however, also satisfied that the penalty to be imposed is harsh, when the breaches are viewed as a whole and the arrangements that underlay them are fully considered. The late provision of documentation is, ironically, why the Commissioner was not able to do this at the time of the initial review.
25. In summary, therefore, while I am not satisfied that I should alter the penalty payable rate of 50% pursuant to section 31(2) of the TAA, I am satisfied that the consequences of this decision are harsh, and I consider it appropriate to remit some portion of the tax pursuant to section 37. I therefore reduce the additional penalty tax payable under section 31(2) by half, to 12.5%, making the penalty tax payable in total 37.5%.
26. The interest calculated in accordance with section 25 of the TAA should be added to this amount.
27. I do note, however, that I remain concerned about the apparent "disappearance" of the shares that should have been transferred from Mr Hung Li to Mr Li. Had there been evidence that these shares had been transferred back within the requisite time, my decision may well have been different. I cannot, however, see any way I can resolve this on what is before me.

1. The Commissioner's decision is confirmed, save that penalty tax in relation to each of the acquisitions is to be applied at the rate of 37.5%.

[1] See paragraph [14] of these reasons

[2] Duties Act s 77A(3)

[3] Respondent's outline of submissions dated 18 November 2022 at [22]

[4] Respondent's outline of submissions dated 18 November 2022 at [25]

[12] Witness statement of Mr Li dated 17 November 2022 at [18]

[17] Transcript of proceedings dated 9 December 2022, page 29, line 45. The respondent did not explore this distinction at the hearing, so I have not considered it further either

[18] Transcript of proceedings dated 9 December 2022,page 26, lines 40-41

[19] Transcript of proceedings dated 9 December 2022,page 26, lines 34-35

[20] Transcript of proceedings dated 9 December 2022,page 54

[21] Transcript of proceedings dated 9 December 2022,page 26, lines 35-36

[22] Transcript of proceedings dated 9 December 2022, page 51, line 32

[28] Witness statement of Mr Li dated 17 November 2022 at [31]

[29] Witness statement of Mr Li dated 17 November 2022 at [32]

[33] A copy of the personal guarantee, in both Chinese and English, was at CML-19; and the register of members as at 10 March 2015

[34] CML-21 register of members as at 24 March 2015

[38] Witness statement of Mr Li dated 17 November 2022 at [39]

[39] Transcript of proceedings dated 9 December 2022, page 34, lines 20-22

[40] Witness statement of Mr Li dated 17 November 2022 at [42]; Transcript of proceedings dated 9 December 2022, page 34, line 40

[46] Transcript of proceedings dated 9 December 2022, page 68, line 21

[48] Witness statement of Mr Li dated 17 November 2022 at [48]

[50] Transcript of proceedings dated 9 December 2022, page 77, lines 24-26

[51] Witness statement of Mr Li dated 17 November 2022 at [49]

[52] Transcript of proceedings dated 9 December 2022, page 39

[53] Transcript of proceedings dated 9 December 2022, page 40

[54] Transcript of proceedings dated 9 December 2022, page 40, lines 31-32

[55] Witness statement of Mr Li dated 17 November 2022 at [60]

[56] Transcript of proceedings dated 9 December 2022, pages 62-64, noting that Mr Li appeared confused and thought perhaps it was mis-recorded as a loan from him to the Company

[58] Transcript of proceedings dated 9 December 2022, page 43, lines 7-8

[62] Transcript of proceedings dated 9 December 2022, pages 73-74

[63] Transcript of proceedings dated 9 December 2022, page 75, line 45

[64] Transcript of proceedings dated 9 December 2022, page 70, lines 12-13

[65] Transcript of proceedings dated 9 December 2022, page 52, line 40

[66] Transcript of proceedings dated 9 December 2022, page 54, line 4

[67] Transcript of proceedings dated 9 December 2022, page 54, lines 12-13

[68] Transcript of proceedings dated 9 December 2022, page 53

[69] Transcript of proceedings dated 9 December 2022, page 50, line 37

[70] Transcript of proceedings dated 9 December 2022, page 65, lines 37-38

[71] Transcript of proceedings dated 9 March 2023, page 6

[72] Transcript of proceedings dated 9 March 2023, page 6, lines 16-17

[73] Transcript of proceedings dated 9 March 2023, page 16, line 37

[74] Transcript of proceedings dated 9 March 2023, pages 16-17

[75] Transcript of proceedings dated 9 March 2023, page 17, lines 13-28

[76] Witness statement of Mr Tay dated 8 December 2022 at [14]-[15]

[77] Witness statement of Mr Tay dated 8 December 2022 at [23]

[78] Transcript of proceedings dated 9 March 2023, page 7, lines 44-46, page 8, lines 7-8

[79] Transcript of proceedings dated 9 March 2023, page 8

[80] Transcript of proceedings dated 9 March 2023, page 13, lines 21-22

[81] Transcript of proceedings dated 9 March 2023, page 13, line 26

[83] Transcript of proceedings dated 9 March 2023, page 27, lines 27-28

[85] Transcript of proceedings dated 9 March 2023, pages 32-33

[86] T-docs in relation to Mr Li (CML T-docs), page 118

[87] T-docs in relation to Mr Hung Li (HL T-docs), page 118

[88] CML T-docs, page 119; HL T-docs, page 119

[90] CML T-docs, pages 124-202; HL T-docs, pages 127-295

[102] CML T-docs, pages 84-85; HL T-docs, page 84-85

[110] CML T-docs, page 78; HL T-docs, page 78

[111] CML T-docs, pages 126-127; HL T-docs, pages 118-119

[113] Citing correspondence from the Commissioner 's representative to the applicants

[116] Section 50 of the Duties Act relates to cancelled agreements

[117] One of which Mr Tay thought was about $2.4 million (which isn't referred to in the outline of written submissions)

[118] I note the differing evidence between Mr Li and Mr Tay as to these arrangements, with Mr Tay giving evidence for $1.2million

[122] Transcript of proceedings dated 9 March 2023, page 37, lines 19-24

[123] Transcript of proceedings dated 9 March 2023, page 45, lines 7-9

[124] Transcript of proceedings dated 9 March 2023, page 47, lines 13-17

[126] Reviewable decision notices to Mr Li and Mr Hung Li

[127] Other than the initial distribution of the 100 shares, which may have been a two stage process but was close in time

[128] Transcript of proceedings dated 9 March 2023, page 53, lines 43-44

[129] Transcript of proceedings dated 9 March 2023, page 54, lines 27-29

[131] Jones v Dunkel [1959] HCA 9

[134] Transcript of proceedings dated 9 December 2022, page 54

[135] Transcript of proceedings dated 9 March 2023, page 56

[136] Transcript of proceedings dated 9 December 2022, page 52

[137] Transcript of proceedings dated 9 March 2023, page 57, lines 38-39

[143] Wambo Coal Pty Ltd v Stuart Karim Ariff & 1 Or [2007] NSWSC 589

[144] Transcript of proceedings dated 9 March 2023, page 60, lines 25-27

[146] Transcript of proceedings dated 9 March 2023, page 52, lines 37-39

[147] Respondent's outline of submissions dated 18 November 2022 at [88]

[148] Transcript of proceedings dated 9 March 2023, page 62, line 14

[149] Transcript of proceedings dated 9 December 2022, page 27

[154] Transcript of proceedings dated 9 March 2023, page 63, lines 36-27

[155] Transcript of proceedings dated 9 March 2023, page 63, lines 41-47

[156] Transcript of proceedings dated 9 March 2023, page 64, lines 18-19

[157] Transcript of proceedings dated 9 March 2023, page 64, lines 31-32

[158] Evidence Act 2011 dictionary pt 1

[159] ACT Administrative Tribunal Act 2008 s. 26

[160] ACT Administrative Tribunal Act 2008 s. 8

[161] G_iusida Pty Limited v Commissioner for ACT Revenue_ [2016] ACTSC 275 at [40]

[162] Corporations Act s 1070A

[163] Corporations Act s 1070C

[168] Corporations Act s. 169

[171] Transcript of proceedings dated 9 December 2022, page 64

[173] Jones v Dunkel [1959] HCA 9

[174] Duties Act s 95(3)

[179] Wambo; see Peter Radan and Cameron Stewart, Principles of Australian Equity and Trusts (LexisNexis Butterworths, 2010) at [28.120]-[28.141]

[180] Cited in Eldridge v ACTPLA [2020] ACAT 22 at [38]; Gusida Pty Ltd v Commissioner for ACT Revenue [2019] ACAT 100 at [38].

[182] The Act has been amended since the issue of the Notice of Assessment and the Statement of Reasons, but pursuant to section 31(3), the current provision applies

[183] A 75% penalty remains for certain other defaults where there is a degree of culpability by the taxpayer, but it is not suggested that applies here.

[184] Jokhan and Jokhan v Commissioner for ACT Revenue [2012] ACAT 15 at [21]; Theron v Commissioner for ACT Revenue [2013] ACAT 33

[186] A Plus Plumbing and Building Services Pty Ltd & the Commissioner for ACT Revenue (Administrative Review) [2012] ACAT 76 at [92]