Nunc Coepi Pty Ltd atf Vieira Family Unit Trust v Chief Commissioner of State Revenue

1. The Chief Commissioner of State Revenue, the respondent in these proceedings ("Respondent") assessed land tax on the appellant, Nunc Coepi Pty Ltd atf Vieira Family Unit Trust ("Appellant"). The assessment was set out in an assessment of 26 October 2023.
2. The Respondent assessed land tax on the basis that the trust of which the Appellant was trustee ("Trust") was a "special trust" and not a "fixed trust" under the Land Tax Management Act 1956 (NSW) ("LTMA").
3. The Appellant objected to the Respondent's assessment. The Respondent determined the objection against the Appellant. The Appellant then applied to the Tribunal for administrative review of the Respondent's decision.
4. On 18 June 2025, the Tribunal affirmed the Respondent's assessment and published reasons for the decision ("Reasons").
5. By Notice of Appeal dated 22 July 2025, the Appellant appealed the Tribunal's decision to the Appeal Panel. That appeal is the matter before the Appeal Panel in these proceedings.
6. The question before the Appeal Panel is whether the Tribunal erred in determining that the Trust answers the description of a "special trust" within the meaning of s 3A of the LTMA.
7. The Notice of Appeal was lodged six days out of time. In submissions the Appellant sought an extension of time and the Respondent did not object to the grant of an extension. Given those circumstances, and that the Appellant was not legally represented at the time of filing, in the interests of justice an extension of time is granted to 22 July 2025 to file the Notice of Appeal under s 41 of the Civil and Administrative Tribunal Act 2013 ("NCAT Act").

1. An appellant is entitled to appeal from an internally appealable decision on any question of law or, with the leave of the Appeal Panel, on "any other grounds" (s 80(2)(b) of the NCAT Act).
2. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 ("Unique") at [25]-[40], the Appeal Panel set out the authorities and principles concerning questions of law within s 80 of the NCAT Act, including:

(1) Absent leave to appeal, the question of law is the subject matter of the appeal and the question of law should be articulated with precision;

(2) A question of law means a pure question of law;

(3) A "pure question of law" does not depend on facts not found;

(4) A mixed question of fact and law is not a question of law.

(5) An appeal is "on" any question of law and must not be hypothetical or arid; and

(6) An appeal is against orders and not reasons.

1. In an internal appeal, an appellant must demonstrate that either an error was made on a question of law, or that leave to appeal should be granted. It is not sufficient for an appellant to disagree with the outcome and to contend that there should have been a different outcome (Brahmbhatt v Osorio [2023] NSWCATAP 188, at [28]).
2. Where an appellant is legally represented, the appellant is expected to identify questions of law with some precision, where it is asserted that the Tribunal made an error on one or more questions of law (STAR Training Academy Pty Ltd v Commissioner of Police (No 2) [2022] NSWCATAP 98 at [14]- [27]; Theophilas v Chief Commissioner of State Revenue [2016] NSWCATAP 111 at [24])).
3. We proceed on the basis of those legal principles.

1. The Notice of Appeal of 22 July 2025 set out grounds of appeal as follows:

"The member does not provide sufficient or compelling reasons:

• Why she did not follow the precedent set by a higher Court.

• As to why she judged the override clause to give effect of achieving it's intended purpose

• For introducing a specific and limited interpretation of the Sayden judgment that requires Deeds to have additional preconditions in order for the override clause to have effect where Justice Sayden did not require such preconditions.

• How and why the practice note CPN003 was ignored in as much as it states that an override clause prevails over any other provision of the deed."

1. The Appellant says that the Notice of Appeal filed in these proceedings was prepared by someone not trained in law. The Appeal Panel understands that it was only after filing the Notice of Appeal that the Appellant briefed Counsel. Counsel then prepared the written submissions presently before the Appeal Panel made on behalf of the Appellant.
2. During the appeal hearing on 24 October 2025, with consent of the Respondent, the Appellant was granted leave to amend the Notice of Appeal to remove the grounds of appeal set out above and instead state the following ground of appeal:

(1) Whether the Tribunal misconstrued cl 2.9(b) of the Trust Deed.

1. At the hearing we granted leave to amend the Notice of Appeal to include only that new ground because we considered that it was in the interests of justice, in circumstances where the Appellant at the time of filing its Notice of Appeal was not legally represented, where the Respondent had suggested the amended question and had prepared its submissions on that basis, and the question raises complex legal issues involving the construction of the terms of a trust (Secretary, Department of Education v FSO (obo FSN) [2023] NSWCATAP 160, at [15]).
2. The proper construction of a document raises a question of law. The Federal Court said in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50, at [66]:

"The interpretation of a statute or contract is directed to the ascertainment of the document's actual and true meaning. When the document is properly construed, there is only one correct meaning: Industry Research and Development Board v Bridgestone Australia Ltd [2001] FCA 954, (2001) 109 FCR 564 at [54]; Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd [2004] FCAFC 183, (2004) 139 FCR 147 at [118]. It is for this reason that the proper construction of a statute is a question of law: Adelaide Brighton Cement at [118], [139]."

1. This was also identified in Unique (at [32(2)]) as the following question of law:

"Whether the construction of a statute or contract arrived at by the Tribunal at first instance was wrong in some identified way: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 at [66]".

1. The parties agreed that the proper construction of the terms of the Trust Deed in this matter raised a question of law. The question before us is one concerning the proper construction of the Trust Deed and as such raises a question of law.
2. No leave to appeal in the absence of a question of law was sought.

1. The deed governing the Trust was in evidence before the Tribunal and the Appeal Panel. It was not disputed that the deed had been executed on 9 May 2018 and evidenced the terms of a unit trust ("Trust Deed"). There were three initial unitholders.
2. The property held under the Trust included land in NSW.
3. We set out below the provisions of the Trust Deed considered by the Tribunal at first instance. The meaning and effect of these provisions, once they have been construed, determines whether or not the Trust was a "fixed trust", under either or both of s 3A(2) and s 3A(3A).
4. Recital B of the Trust Deed, first of all, sets out the following intention shown by the settlor:

"It is further intended by this Deed that, while the Trustee is the registered proprietor of real estate in the State of New South Wales, the Trust can be treated as a "fixed trust" under section 3A of the Land Tax Management Act (NSW) 1956."

1. Sub-clauses 3.2, 3.3 and 3.4 provided that the Appellant held the trust fund for the benefit of the unitholders. They said:

"3.2 The Trustee holds and shall continue to hold the Trust Fund for the benefit of the Unitholders in accordance with the terms and conditions of this Deed.

3.3 The Trust Fund shall include any property which is acquired by the Trustee in its capacity as Trustee of the Trust and includes but is not limited to property acquired:

(a) by the transfer of property to the Trustee by a Unitholder or any other person;

(b) by purchase or by the exercise of the Trustee's powers of investment; and

(c) by accumulation of the Income of the Trust

3.4 Subject to clause 4.4, the Unitholders shall be entitled to the Trust Fund in the proportion in which they hold Units from time to time, but no property in the Trust vests in possession in any Unitholder except in the circumstances set out in this Deed."

1. Clause 2.9 made provision for how the Trust was to be conducted. It is the meaning and effect of this clause that is the question for determination. Clause 2.9 said:

"If the Trustee is obliged to conduct the Trust:

(a) as a Non-Geared Unit Trust, the most logical provisions conceivable not expressed in this Deed necessary to enable compliance with Division 13.3A of the Superannuation Industry (Supervision) Regulations 1994 to permit the Trustee to either act or to refrain from acting in a manner those regulations allow shall be taken to apply to this Deed as provisions of this Deed overriding the express provisions of this Deed; or

(a) a Fixed Trust where the Trust owns real estate in New South Wales the most logical provisions conceivable not expressed in this deed necessary to enable the Trust to be a Fixed Trust shall be taken to apply by this deed as provisions of this deed overriding the express provisions of this deed excepting paragraph (a)."

1. Clause 4.4 of the Trust Deed allowed the Appellant the power to issue units in the Trust in the following terms:

"The Trustee, on the authority of a Unanimous Resolution, may issue Units of different classes at a premium or otherwise with such preferred, deferred or other special rights or such restrictions whether in regard to income, capital or otherwise as the Trustee shall, in any particular case, determine but only if the Trustee is not obliged to conduct the Trust as a Restricted Trust."

1. Clauses 9.4 and 10.1 of the Trust Deed concerned circumstances in which units of the Trust may be redeemed. Clause 9.4 provided:

"Upon receipt of a transfer notice, the Trustee may elect to redeem the Units specified in the notice in its discretion within twenty-one days of receipt of the notice."

"The Trustee may redeem the Units of a Unitholder:

(a) for cash or for their value in property in the Trust in specie in accordance with clause 11.4 at the Fair Value fixed in accordance with clauses 9.13 and 9.15 either on the request of the Unitholder or with the authority of a Special Resolution and after giving seven days notice in writing to the Unitholder of the redemption; or

(b) by a Unanimous Resolution at a value fixed in accordance with the Unanimous Resolution but only if the Trustee is not obliged to conduct the Trust as a Restricted Trust."

1. The provisions of the LTMA in issue are those set out in s 3A that say when a trust is a "special trust" and when it is a "fixed trust". Section 3A provides as follows:

"3A Special trust - meaning

(1) For the purposes of this Act, a trust is a special trust if -

(a) the trust property includes land, and

(b) the trustee of the trust is the owner of the legal estate in the land, and

(c) the trust is not a fixed trust.

(2) For the purposes of this section, a trust is a fixed trust if the equitable estate in all of the land that is the subject of the trust is owned by a person or persons who are owners of the land for land tax purposes (disregarding section 25 (3)).

(3) For the purpose of determining whether a trust is a fixed trust under this section, any equitable interest of the trustee as trustee of the trust is to be disregarded.

(3A) If a trust satisfies the relevant criteria, the persons who are beneficiaries of the trust under the trust deed are taken to be owners of an equitable estate in the land that is the subject of the trust and, accordingly, the trust is taken to be a fixed trust.

Note.

Under section 25, owners of an equitable estate or interest in land are liable in respect of land tax as if they were legal owners of the land. Owners of an equitable estate in land are treated as secondary taxpayers.

(3B) For the purposes of this section, the relevant criteria are as follows -

(a) the trust deed specifically provides that the beneficiaries of the trust -

(i) are presently entitled to the income of the trust, subject only to payment of proper expenses by and of the trustee relating to the administration of the trust, and

(ii) are presently entitled to the capital of the trust, and may require the trustee to wind up the trust and distribute the trust property or the net proceeds of the trust property,

(b) the entitlements referred to in paragraph (a) cannot be removed, restricted or otherwise affected by the exercise of any discretion, or by a failure to exercise any discretion, conferred on a person by the trust deed,

(c) if the trust is a unit trust -

(i) there must be only one class of units issued, and

(ii) the proportion of trust capital to which a unitholder is entitled on a winding up or surrender of units must be fixed and must be the same as the proportion of income of the trust to which the unitholder is entitled".

1. Section 3 defines who is an "owner" as follows:

"Owner includes -

(a) in relation to land, every person who jointly or severally, whether at law or in equity -

(i) is entitled to the land for any estate of freehold in possession, or

(ii) is entitled to receive, or is in receipt of, or if the land were let to a tenant would be entitled to receive, the rents and profits thereof, whether as beneficial owner, trustee, mortgagee in possession, or otherwise,

(b) (Repealed)

(c) in relation to any leasehold estate in land, whether legal or equitable (other than under any lease to which section 21C or 21D applies), a person, or a person who is a member of a class or description of persons, prescribed for the purposes of this paragraph, and

(d) a person who, by virtue of this Act, is deemed to be the owner".

1. Section 3A provides for two ways in which a trust may qualify as a "fixed trust". The first is under s 3A(2). This provision applies if the equitable estate in all of the land that is the subject of the trust, is owned by a person or persons who are "owners" of the land for land tax purposes.
2. The second way in which a trust can qualify as a "fixed trust" is set out in s 3A(3A). It says that if a trust satisfies the "relevant criteria" set out in s 3A(3B), the persons who are beneficiaries of the trust under the trust deed are taken to be owners of an equitable estate in the land that is the subject of the trust. Accordingly, the trust is taken to be a "fixed trust".
3. The question is whether the Trust satisfied the requirements of either or both of s 3A(2) or s 3A(3A). If it does, the Appellant succeeds.

1. The Tribunal in the decision made at first instance found that the Trust Deed did not satisfy the requirements of a "fixed trust" set out in s 3A of the LTMA.
2. The Tribunal, first of all, considered the consequences of the Trust being a unit trust. The Tribunal said it was not the case that, given legal ownership vests in a trustee, the beneficiaries or unitholders were "automatically considered to hold the equitable estate rather than some, lesser equitable interest" (at paragraph 45 of the Reasons). The Tribunal relied on the authority of CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98; [2005] HCA 53 ("CPT Custodian").
3. The Tribunal went on to find that the Trust did not fall within s 3A(2) of the LTMA (at [50]-[52] of the Reasons):

"The Chief Commissioner submitted that the effect of these clauses was to reveal that while the Applicant was entitled to accumulate trust income (cl 3.3(c)), that accumulation right was in priority to the rights of the unitholders to income of the VF Unit Trust since they did not have a proprietary interest in the land in respect of which the Applicant was the registered proprietor. That submission is, with respect, correctly made.

Moreover, there was no evidence before the Tribunal to suggest that in any of the years the subject of the assessment, there had been a resolution to vest any of the property of the VF Unit Trust in the possession of any of its unitholders. That absence of evidence in this regard places the Tribunal in a similar position the Tribunal in Sejaca Pty Ltd v Chief Commissioner of State Revenue [2010] NSWADT 95 at [36]-[38] where it could not be established whether the trustee would exercise its power of accumulation or its other powers affecting the income available to the sole beneficiary of that trust for distribution.

Accordingly, I cannot be satisfied that VF Unit Trust should be considered a fixed trust having regard to the LTM Act, ss 3A(2) and the definition of "owner" in the LTM Act, s 3".

1. The Tribunal then went on to consider whether the Trust satisfied the requirements of s 3A(3B) of the LTMA.
2. The Tribunal found that there was no present entitlement to income as required by s 3A(3B)(a)(i). The Tribunal also stated (at [70] of the Reasons) that:

".... clause 2.9 of the Deed does not appear to operate expressly or automatically as an override to other clauses in the Deed. While the clause uses the word "overriding", that word must be read must be read in the context of cl 2.9(b) as a whole; which includes a confusing and vague phrase that obliges the Applicant to conduct the VF Unit Trust by applying "the most logical provisions conceivable not expressed in this deed necessary to enable the Trust to be a fixed trust". That phrase suggests that the Applicant, in carrying out its obligations to conduct the VF Unit Trust as a fixed trust, must have regard to a source of power provisions which are not contained in the Deed, and for which the only requirement is logicality. The manner of drafting clause 2.9(b) in this way is, in my view, fatal to the Applicant's position that the clause operates to override other provisions of the Deed, which cause it to fall outside the definition of a fixed trust under either the LTM Act, s 3A(2) or the LTM Act, s 3A(3B). automatically as an override to other clauses in the Deed".

1. The Tribunal said that the clauses of the Trust Deed could not be construed in such a way as to detect an intention, objectively ascertained, that it met the definitional requirements of a "fixed trust" under either the LTMA, s 3A(2) or ss 3A(3A) and 3A(3B).

1. The determination of this appeal turns on the proper construction of the relevant words in the Trust Deed. What we must do is ascertain the meaning and effect of the words in cl 2.9 under the accepted rules for construction of a trust, and depending on what is the meaning and effect of those words, determine whether or not the Trust is a "fixed trust".

1. The rules for construing a trust are not different to the rules that apply to construction of a deed (Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26, at [102]). How the task of construction must be undertaken was described by Buss P in Mercanti v Mercanti (2016) 50 WAR 495; [2016] WASCA 206. His Honour said, at [73]-[74] and [77].

"The search for 'intention' in relation to trusts, as with contracts, is for the intention as revealed in the words used by the parties. The expressed intention of the parties is to be found in the answer to the question, 'What is the meaning of what the parties have said?', not to the question, 'What did the parties mean to say?'. See Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 [53] (Gummow & Hayne JJ), [102] - [107] (Heydon & Crennan JJ). See also Smith v Lucas [1881] UKLawRpCh 163; (1881) 18 Ch D 531, 542 (Sir George Jessel MR); Commissioners of Inland Revenue v Raphael [1935] AC 96, 142 - 143 (Lord Wright).

Similarly, in Scott and Ascher on Trusts (5th ed, vol 1, 2006) s 4.1, it is said that 'it is necessary, when dealing with the creation of a trust and its terms, to speak not of the settlor's intention but of the settlor's manifestation of intention'. See also Byrnes [57] - [58] (Gummow & Hayne JJ).

...

Subjective intention is only relevant in relation to trusts, as with contracts, when the transaction is open to some challenge or some application for modification; for example, an equitable challenge for mistake or misrepresentation or undue influence. However, subjective intention is irrelevant both to the issue of whether a trust exists and also to the issue of the terms of the trust. See Byrnes [115] (Heydon & Crennan JJ)".

What is the meaning and effect of cl 2.9 of the Deed?

1. The Appellant says that the language within clauses 2.9 and 2.10 of the Trust Deed are essential in considering the question in issue. We understood the Respondent to agree that the question of whether or not the Trust satisfied the requirements of a "fixed trust" depended on whether or not cl 2.9 was effective to make the Trust a "fixed trust".
2. Clause 2.9 sets out how the Appellant must conduct the Trust. It provides for an obligation to conduct the Trust as a "Fixed Trust" in certain circumstances. It must do so "where the Trust owns real estate in New South Wales". Additionally, clause 2.9 requires that the "most logical provisions conceivable not expressed in this deed necessary to enable the Trust to be a Fixed Trust shall be taken to apply by this deed as provisions of this deed overriding the express provisions of this deed excepting paragraph (a)."
3. However, the obligation to conduct the Trust in the manner so described is not unconditional. The relevant provisions take effect only: "If the Trustee is obliged to conduct the Trust" in the requisite manner (emphasis added).
4. The Appellant says that the word "If" does not create any need to choose to conduct the Trust as a "fixed trust" or contemplate any step having to be taken to allow this to happen. The Appellant says that the obligation to conduct the Trust as a "Fixed Trust" inures, without the need for the Appellant or anyone else to do anything to enliven the obligation.
5. The word "If" is a conjunction denoting conditionality. Its primary meaning is "in case that; granting or supposing that; on condition that" (_The Macquarie Dictionar_y, online, 2024). The practice of using the term "if" as a conjunction preceding particular words in a legal document, is sometimes described as the "casuistic" technique. It is known as the "If .. then" method of drafting, denoting that something must happen ("if") before something else can happen ("then"). It is one of the oldest known forms of legal drafting.
6. It must follow that the settlor's manifested intention was that something must happen before the obligation of the Appellant to conduct the Trust as a "fixed trust" comes to life. That intention is also borne out in other provisions of the Trust Deed. Recital B in evidencing the intention underlying the Trust Deed, says that the Trust "can" be conducted in the required manner, and as such denotes the possibility of the conduct of the Trust as a "fixed trust" and not its unconditional operation as a "fixed trust". Recitals in documents may assist in interpretation.
7. There was no evidence of anything having been done by the Appellant or any other person to enliven the obligation to conduct the Trust as a "fixed trust". The absence of any evidence of something having been done to activate the operation of cl 2.9, in our opinion, means that cl 2.9 was not operative at the relevant times.
8. The Appellant says that the conditionality intended by the word "If' is the condition of holding real property in NSW expressly referred to in cl 2.9 so that if the Trust includes such property, there is no further condition to be satisfied and the Appellant was obliged to conduct the Trust as a "fixed trust".
9. The construction offered by the Appellant, however, does not accord with the language employed within cl 2.9. The provision applies "if" the Appellant is obliged to conduct a "fixed trust" and "where" the Trust holds real estate in NSW. This language, in our opinion, is indicative of two conditions, namely the first condition of holding of land in NSW and a second condition having to be fulfilled, namely something being done to activate an obligation to conduct the Trust as a "fixed trust", whether by resolution or otherwise.
10. There was no evidence before the Tribunal or the Appeal Panel manifesting the intention of the settlor, such as minutes or other extraneous materials, to assist us in determining the relevant intention of the settlor, other than the language of the Trust Deed itself. That language in its ordinary sense, requires the two conditions described above to be satisfied in order to bring cl 2.9 into effect.
11. The absence of any evidence to show what had been done in accordance with cl 2.9 to activate the obligation to conduct the Trust as a "fixed trust", in our opinion, produces the result that the Trust could not have operated as a "fixed trust" at the relevant time.
12. Our conclusion set out at [56] above is sufficient to dispose of the appeal. We will, however, go on to consider the remaining submissions of the Appellant.

Was the Trust a "fixed trust" within the meaning of s 3A(2)?

1. We understood the Appellant to say that the Trust was a fixed trust within the meaning of s 3A(2) of the LTMA because the unitholders were the "owners" of the equitable estate within the meaning of that subsection. The Appellant's argument requires consideration of the history of s 3A.
2. Section 3A(2) alone operated prior to 2 November 2006 to determine whether or not a trust was a "fixed trust". Immediately before that date, satisfying s 3A(2) as it had then stood, was the only means by which a trust could be a "fixed trust". Section 3A(3A) and s 3A(3B) were introduced into the LTMA with effect from 2 November 2006. From that date, a "fixed trust" could arise either by satisfying s 3A(2) or s 3A(3A).
3. The circumstances in which the State Revenue Legislation Amendment (Tax Concessions) Act 2006 (NSW) introduced subs 3A(3A) and (3B) into the LTMA bear upon the question in issue. The introduction of these subsections into s 3A occurred in response to the decision of the High Court in CPT Custodian. The High Court in that case was understood to say that the unitholders in a unit trust were not the "owners" of land for the purposes of the land tax legislation of Victoria applying at the time. That conclusion arose because of the limited rights of unitholders of a unit trust that fell short of what an equitable owner was required to have (as further set out at [65]-[69] below).
4. Sub-sections 3A(3A) and (3B) were subsequently enacted to allow a unit trust to be treated as a "fixed trust" by satisfying the "relevant criteria" in s 3A(3B), even if equitable ownership of the kind required by s 3A(2) could not be found.
5. The Appellant says that the amendments to the LTMA made as a result of the High Court's decision in CPT Custodian "were not (necessarily) required". The Appellant says that the primary reason why the High Court came to its decision in CPT Custodian was because until a trustee's right of indemnity and exoneration was satisfied, a unit holder did not know what its entitlement in fact was, and therefore could not be considered the "owner" of land in Victoria.
6. However, the Appellant says that the relevant provisions of the Victorian legislation at the time materially differed from those applicable in NSW. In particular, the Appellant said that there was no provision in the Victorian legislation equivalent to s 3A(3) of the LTMA. That provision says that for the "purpose of determining whether a trust is a fixed trust under this section, any equitable interest of the trustee as trustee of the trust is to be disregarded".
7. We understood the Appellant's submission to be that a trustee's right of indemnity and exoneration was an equitable interest in the trust estate (Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4, at [50]-[51]), and as such, was to be disregarded by reason of s 3A(3) in determining whether the Trust was a fixed trust. The consequence of doing so, in the Appellant's submission, was that once the trustee's right of indemnity and exoneration was disregarded, a unit holder in a unit trust may be an owner within the meaning of s 3A(2) because the unitholder's ownership was to be determined without regard to the diminution of the unitholder's rights of the kind found in CPT Custodian. As a consequence, the Appellant said that the Trust was a "fixed trust" within the meaning of s 3A(2).
8. The matters the Appellant's submission raise, require examination of the High Court's reasoning in CPT Custodian as to why a unitholder did not have equitable ownership of trust property. The High Court adopted the following findings of Nettle J at first instance in that case, which the High Court said were "in point and conclusive" (at [37]):

"It may well be that the income of the fund as finally constituted and distributed will include all of the rents and profits generated by a particular parcel of land within the fund. But it is distinctly possible that it will not. Each of the deeds gives power to the trustee to provide out of receipts for future and contingent liabilities; to apply receipts in the purchase of any property or business; to invest receipts in authorised investments and to deal with and transpose such investments; and the only right of the unit holder is to a proportionate share of the income of the fund for the year.

The Commissioner contends that the trustees' powers of disposition and transposition make no difference. He submits that insofar as receipts from particular properties may be applied in making payments other than to a unit holder, they must be seen as made on behalf of the unit holder and in that sense as received by the unit holder. He says that it is in principle no different to the case of a simple trust of land with only one beneficiary, under the terms of which the trustee is entitled to apply receipts in the payment of obligations and in the making of provisions in connection with the management of the land. The Commissioner contends that in such a case there can be no doubt that the beneficiary would be liable to tax as 'owner'.

But I think there is a difference. In the case of a simple trust of the kind instanced by the Commissioner the entitlement of the trustee to apply part of the receipts in defined ways determines the amount of the income which the beneficiary has a right to receive. Contrastingly, in a case of a complex unit trust of the kind with which I am concerned, the entitlement of the trustee to apply receipts in defined ways informs the nature of the income that the unit holders have a right to receive: not a total of all of the receipts derived from each asset the subject of the fund but rather such if any income as may be derived from the product of the application of gross receipts in various ways."

1. The High Court did not agree that the unit holders could hold beneficial ownership of the trust estate. The High Court said (at [51]):

"In the present case, the unsatisfied trustees' right of indemnity was expressed as an actual liability in each of the relevant accounts at each 31 December date ..... Until satisfaction of rights of reimbursement or exoneration, it was impossible to say what the trust fund in question was".

1. The High Court relied on a number of considerations in coming to its conclusion that the unitholder was not the "owner", going beyond the effect of the trustee's right of indemnity upon the unitholder's rights. It referred to the matters raised by Nettle J set out above including generally the trustee's power to make provisions out of receipts, to apply the receipts to make purchases and investments and to deal with and transpose investments. Nettle J also said that "in a case of a complex unit trust of the kind with which I am concerned, the entitlement of the trustee to apply receipts in defined ways informs the nature of the income that the unit holders have a right to receive" (quoted in CPT Custodian, at [37]).
2. The considerations raised by Nettle J limiting the extent of the unitholder's interests included the trustee's powers to deal with trust property without recourse to or control by the beneficiary over those dealings made in accordance with the trustee's powers. We do not in these circumstances think that disregarding the trustee's right of indemnity, is a basis for not following the High Court's opinion that a unitholder was not the equitable owner of trust property. The High Court's reasoning limiting the unitholder's interests involved more than just the trustee's right of indemnity.
3. The High Court's reasoning in CPT Custodian at [52] reveals a further basis for limiting the rights of unitholders, namely that it could not be said:

"for a statutory purpose that there is a presently subsisting interest in all of the trust assets at a particular date (midnight on 31 December of the immediately preceding year) because of what could thereafter be done in exercise of a power of termination of the trust in question but at that date had not been done. Equity often regards as done that which ought to be done, but not necessarily that which merely could be done".

1. There is no evidence that steps had been taken to terminate the Trust or vest the trust estate in the unitholders so as to allow for ownership rights to come into the hands of unitholders of a kind that could fall within s 3A(2).
2. For the above reasons, we do not think that s 3A(3) allows us to disregard the reasoning of the High Court in finding that a unitholder was not the equitable owner of trust property. That reasoning did not depend only on the trustee's claim upon the trust estate arising out of their right of indemnity.
3. We are unable in these circumstances to find that the unitholders of the Trust were owners within the meaning of s 3 and 3A(2). On this further basis the ground of appeal is therefore also not made out.

1. The Appellant said the terms of cl 2.9 satisfied s 3A of the LTMA because it incorporated within the Trust the terms required by s 3A. The Supreme Court of Victoria in Doggett v Commonwealth Bank of Australia (2015) 47 VR 302; [2015] VSCA 351 described how incorporation into a document of words taken from elsewhere can happen. McLeish JA said, at [122]:

"The process of incorporation of words taken from another instrument into a contract involves two steps or rules. The first step is to construe the incorporating clause to decide on the width of the incorporation. The incorporated words must then be read into the contract to see whether, in that setting, parts of the incorporated wording must nevertheless be rejected as 'inconsistent' or 'insensible' when read in their new context, or whether they 'in any way conflict with the expressly agreed terms'".

1. We accept that a trust deed may incorporate terms found in some other place including a statute if that was the intention (Everest Capital Limited as Trustee of the EBI Income Fund v Trust Company Limited [2010] NSWSC 231).
2. Clause 2.9 contemplates the inclusion within the Trust Deed of terms it describes as "the most logical provisions conceivable not expressed in this deed necessary to enable the Trust to be a Fixed Trust ... overriding the express provisions of this deed ...". The question is whether these words were effective to incorporate within the Trust Deed the necessary provisions required by s 3A to make the Trust a "fixed trust".
3. Section 3A allows for a "fixed trust" in two distinct cases. First of all, such a trust can arise where the equitable estate in all of the land that is the subject of the trust is owned by a relevant person or persons. Secondly, a fixed trust can arise if, regardless of who is the owner within the meaning of s 3A(2), the Trust satisfies the "relevant criteria" set out in s 3A(3B).
4. The provision of two pathways to compliance with the requirements for a "fixed trust" raises the first question in determining whether cl 2.9 was effective to incorporate the required terms. The question is what are the "most logical provisions conceivable not expressed in this deed" necessary to enable the Trust to be a "fixed trust" as between the two ways in which compliance can be achieved.
5. If the Trust were to be brought within s 3A(2), the provisions to be incorporated within the Trust are those necessary to give ownership of the equitable estate in all of the land that is the subject of the Trust to a person or persons "who are owners of the land for land tax purposes (disregarding section 25 (3))".
6. What provisions need to be incorporated to do this is not readily apparent. One possibility is that the words of s 3A(2) are to be lifted into the Trust Deed in some form, so as to provide that equitable ownership was vested in the unitholders and also rely on cl 2.9 to override provisions of the Trust Deed that would otherwise be inconsistent. Another possible means of achieving the desired end may be to amend particular provisions of the Trust Deed to achieve the required result rather than overlaying on the Trust the words of s 3A(2). What specific amendments could be made to the Trust to incorporate what s 3A(2) requires, however, remains an unanswered question.
7. This leaves the question of whether the intention of cl 2.9 was to incorporate the "relevant criteria" of s 3A(3B) into the Trust as the "most logical provisions" within the meaning of cl 2.9. The Appellant says that this was the intention.
8. Section 3A(3B)(a) requires that there be a relevant present entitlement in respect of both "capital" and "income". Establishing entitlements of the kind specified in s 3A(3B) would first of all require a determination of what constitutes "capital" and "income" and then aligning these concepts with what the Trust Deed identifies as the property of the Trust. Clauses 3.3 and 3.4 of the Trust Deed describe the "Trust Fund" as including relevant "property" but do not refer to "capital" or "income".
9. Even if the terms of cll 3.3 and 3.4 could be read so as to capture both "capital" and "income", if cl 2.9 were to have the effect the Appellant contends, the Appellant would have to operate the Trust on the basis of overriding effect being given to cl 2.9, so as to vest in the unitholders the required present entitlement to both "capital" and "interest". This will require a determination as to what variations must be overlaid upon cll 3.3 and 3.4 and other provisions of the Trust Deed to allow a vesting of present entitlements to both "income" and "capital" of the kind required by s 3A(3B)(a) and extinguish the operation of provisions that would otherwise prevent such entitlements.
10. Having to make the necessary judgments to achieve the intended outcome may not be impossible and will be necessary if that was the intention. Clause 2.9, however, does not assist in the identification of what those variations ought to be in the context of the complexities of a unit trust. Such judgments having to be made as to what variations may be required to align the terms of the Trust with what s 3A(3B) requires, in our opinion, falls short of the requirement that the Trust Deed "specifically provide" for the matters set out in s 3A(3B).
11. What also remains unanswered is whether or not the "most logical provisions" were those found in s 3A(2) or s 3A(3B). We are unable to determine whether cl 2.9 shows an intention to incorporate into the Trust Deed provisions that bring the Trust within ss 3A(2) or 3A(3B).
12. The matters set out at [79] - [83] above, in our opinion, result in cl 2.9 failing to incorporate within the Trust with the required degree of certainty, the terms necessary to make the Trust a "fixed trust" within the meaning of s 3A. Even if incorporation had been intended, these are uncertainties that do not allow identification of what was to be incorporated, whether objective intention were to be discerned through the eyes of a "reasonable business person" or by bringing to bear fiscal considerations.

1. It follows we consider the Tribunal did not misconstrue cl 2.9(b) of the Trust Deed.
2. The ground of appeal has not been made out because the Appellant has not established that the Tribunal erred in determining the relevant trust was a "special trust" and not a "fixed trust" under the LTMA.
3. The appeal must therefore be dismissed.

1. The Appellant sought an order that costs be awarded to them.
2. The ordinary position as regards costs is set out in s 60 of the NCAT Act. Under s 60, each party to proceedings in the Tribunal is to pay the party's own costs. The Tribunal may, however, award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
3. We see no basis for awarding costs to the Appellant having found that the appeal is to be dismissed. The Respondent opposed the Appellant's application for costs and in submissions contended that there were no special circumstances in the appeal warranting an award of costs.
4. We see no special circumstances allowing us to depart from the ordinary position.

(1) The appellant is granted an extension of time to 22 July 2025 to file the appeal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.