Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 68

Corporations Act 2001 (Cth) s 259D

Duties Act 1999 ss 77, 82, 83, 84, 85, 86, 95

Duties Act 1997 (NSW) s 163H

Taxation Administration Act 1999 ss 107A, 108A and Sch 1

Cases cited: Challenger Listed Investments Ltd v Commissioner of State Revenue (2010] [2010] VSC 464; 80 ATR 630

Commissioner for ACT Revenue v Francey [2014] ACAT 67

Federal Commissioner of Taxation v Swift [1989] FCA 413; (1989) 20 ATR 1434

_Francey v Commissioner for ACT Revenu_e 2013] ACAT 84

Kimberley v Commissioner of ACT Revenue [2021] ACAT 101

Li v Commissioner for ACT Revenue [2024] ACAT 24

Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue [2015] NSWSC 68

Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773

Winston-Smith v Chief Commissioner of State Revenue [2019] NSWCA 75

1. The reviewable decision made on 26 October 2022 disallowing the objections to two Landholder Duty Notices of Reassessment issued to the applicants dated 2 February 2021 is set aside.
2. The time for the applicants to reverse their acquisitions of shares in Five27 is extended to 9 November 2024.

1. Before the Tribunal is an application for review of a decision of the respondent, the Commissioner for ACT Revenue (the Commissioner), made on 26 October 2022 disallowing the applicants' objections to two reassessments of duty payable under section 85 of the Duties Act 1999 (the Duties Act) and the imposition of penalty tax and interest (the reviewable decision).
2. Pursuant to sections 107A, 108A and Schedule 1.1, items 1.1 and 1.2 (d) and (f) to the Taxation Administration Act 1999 (the TAA) the reviewable decision can be reviewed by the Tribunal.
3. Whilst, for the purpose of the review, the Tribunal 'stands in the shoes' of the Commissioner and conducts the review de novo,[1] pursuant to section 108B of the TAA, "the grounds of the appeal are limited to the extent of the reassessment." The Commissioner did not contend any of the grounds of appeal were not available on the review.

1. The applicants, Mary O'Neill (Ms O'Neill) and William O'Neill (Mr O'Neill) are property developers in Canberra.
2. The O'Neill Family Trust (the OF Trust) is a discretionary trust established in 2006 for the benefit of Mr McNeill, his family, companies and trusts in which he or his family have an interest, and any charity.[2]
3. Prior to January 2013, Signature Enterprises Pty Ltd (Signature) was the trustee of the OF Trust. From January 2013, Five27 Pty Ltd (Five27) has been the trustee. Five27 was registered as a company on 23 September 2011. At all material times, the directors of Five27 have been Mr and Ms O'Neill.
4. Five27 holds several properties in its own name, as well as shares and units in other companies and trusts some of which hold property themselves, in its capacity as trustee of the OF Trust.
5. In particular, at all material times Five27 owned all the shares in Bond Projects Group 1 Pty Ltd (Bond 1) which was the Crown lessee (or landholder) of 4-8 McGowan Place, Dickson, ACT (the Property) as trustee of the OF Trust.
6. In the latter half of 2017, Bond 1 applied to the National Bank of Australia (NAB) for finance ($6.6 million) to develop the Property.
7. At that time, the one issued share in Five27 was held by Signature and the two issued shares in Signature were held by Five27 (the circularity problem). This circumstance, having existed for some years, placed both companies in breach of section 259D of the Corporations Act 2001 (Cth) (the Corporations Act) which provided:

(a) A company obtains control of an entity that holds shares (or units of shares) in the company

(e) The entity must cease to hold the shares (or units); or

(f) The company must cease to control the entity.

1. Pursuant to section 259D(4), a company committed an offence if, at the end of 12 months, the company still controlled the entity or the entity still held the shares. However, pursuant to section 259D(6), a contravention did not affect the validity of any transaction whilst the company was in breach of section 259D(1).
2. On 23 November 2017, Ms O'Neill received a telephone call from Mr Young You, one of NAB's officers, who told her the bank's Credit Division was having difficulty understanding the shareholding of Bond 1 and Five27 and wanted a letter setting out who were the shareholders. Ms O'Neill asked Mr You to send her an email setting out what the bank needed to know.
3. On 23 November 2017, Ms O'Neill received an email from Mr You headed "Re Trust Deed for Five 27 P/L" that relevantly stated:

Thanks for taking the time to answer my questions.

As per our conversation, BPG 1 P/L [Bond 1] is owned by Five27 PL, Five27 PL is owned by Signature Enterprises and vice versa.

Accordingly, to meet our Know your customer requirement we need share certificates for Bond Projects Group 1, Five27 Pty Ltd and a letter from the accountant confirming which individuals are in fact beneficial shareholders for these entities.

In addition, we will need copies of the beneficial owners' drivers license and Medicare Card to complete the 100pts ID check.

Associate, ACT Business Banking (irrelevant material omitted)[3]

1. Ms O'Neill forwarded the email to the applicants' accountants, MGI Joyce Dickson (MGIJD). Mr Bramhall, an accountant with MGIJD, telephoned Mr You to obtain more information. Mr You said, in summary, it was hard for the bank to assess the requested loan because of doubt about the beneficial ownership of the stated companies and the bank needed a letter explaining the beneficial ownership.
2. The bank's enquiry prompted Mr Bramhall to review the beneficial ownership of the applicable companies, at which point (he said)[4] he recognised the problem of Five27 and Signature owning all the shares in each other contrary to section 259D of the Corporations Act. Mr Bramhall said that until receiving NAB's request for information regarding the beneficial ownership of Five27, he was unaware of the circularity problem.
3. Ms O'Neill[5] and Mr Bramhall[6] each said that up to the time of NAB's request, they had understood the applicants owned the shares in Five27 because they controlled the OF Trust.
4. Mr Bramhall said he did not prepare a letter for NAB as requested because he did not think the bank would accept it as proof of ownership for the purposes of the loan application and he did not know how he would go about explaining the ownership to the bank. He also thought that, in any event, the circularity problem needed to be fixed. After briefly discussing his intention with Mr Brewer who agreed to transfer shares was the easiest way to satisfy NAB's request,[7] he arranged for documentation to be prepared by which Signature transferred its share to Mr O'Neill and Five27 issued a second share to Ms O'Neill (the Transactions). By this means, the applicants owned all the shares (one each) in Five27.
5. Five27 continued to own the two issued shares in Signature, but that was without consequence. What mattered, for all relevant purposes, was that the applicants now owned the shares in Five27 (in its capacity as trustee for the OF Trust) which in turn owned all the shares in Bond 1 which was applying for the loan to undertake development of the Property.
6. The transfer documentation was signed and dated 24 November 2017 and the Transactions were registered with ASIC.
7. On 24 November 2017, Mr Bramhall sent Mr You a copy of the ASIC company extract for Five27 showing the applicants as the registered shareholders of Five27. Mr You responded by saying the bank no longer needed the requested letter.[8]
8. On 19 December 2017, NAB sent Bond 1 an offer of a loan facility for $6.6 million. On 21 December 2017, Mr O'Neill, as sole director of Bond 1, accepted the offer. The loan facility was secured by -

(a) A security interest and charge over all of the present and future rights, property and undertaking of Bond 1;

(b) A registered mortgage over the property; and

(c) A guarantee and indemnity for $6.6 million given by Mr O'Neill.

1. On 11 October 2019, the Commissioner issued a notice to each applicant under section 82 of the TAA requiring them to provide information pertaining to the share transaction activity that occurred on 24 November 2017 involving Five27.
2. On 17 April 2020, following correspondence between representatives of the applicants and the Commissioner, the Commissioner issued two Landholder Duty Notices of Assessment (one to each applicant). The amount payable by each applicant under the Assessments, comprising duty, penalty tax and interest, was $657,687.75, producing a combined total of $1,315,375.50.[9]
3. On 16 June 2020 the applicants lodged objections to the Assessments.
4. On 2 February 2021 the Commissioner withdrew the Assessments and issued a Reassessment to each applicant. The amount payable by each Reassessment, comprising duty, penalty tax and interest, was $523,054.79, producing a combined total of $1,046,109.58.[10]
5. On 14 May 2021 the applicants lodged objections to the Reassessments.[11]
6. On 26 October 2022 the Commissioner disallowed the Objections (the reviewable decision) and issued a Reviewable Decision Notice and Reasons Statement applicable to each applicant.

1. At the point in time of the Transactions, duty was payable under Chapter 3 of the Duties Act on certain transactions, as set out in Chapter 3, that were not dutiable transactions to which Chapter 2 applied.[12]
2. In particular, at the point in time of the Transactions, sections 85 and 86 within Chapter 3 provided:
   1. When does liability for duty arise?

A liability for duty payable under this part arises when a relevant acquisition is made.

1. What is a relevant acquisition? - pt 3.2

_(1) For this part, a person is taken to have made a relevant acquisition if the person - _

_(a) acquires an interest in a landholder - _

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

(ii) that, 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) that, 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) having an interest described in paragraph (a) in a landholder, acquires a further interest in the landholder.

associated transaction_, in relation to the acquisition of an interest in a landholder by a person, means an acquisition of an interest in the landholder by another person in circumstances in which - _

(a) those people are acting in concert; or

(b) the acquisitions form, are evidence of, give effect to or arise from substantially 1 arrangement, 1 transaction or 1 series of transactions.

1. Pursuant to section 79 of the Duties Act, a "landholder" was defined as "an entity which has a landholding in the ACT."
2. Pursuant to section 78A of the Duties Act, an "entity" for the purposes of Part 3.2 within Chapter 3 (comprising sections 78-95) was defined as "a private company or private unit trust scheme."
3. Pursuant to section 82 of the Duties Act, by operation of section 82(1), "a person [who is] is a beneficiary of a discretionary trust" is, by operation of section 82(2), "taken to own or to be otherwise entitled to the property the subject of the trust", unless, by operation of section 82(5), the Commissioner is satisfied that application of section 82(2) "would be inequitable" and has "determined in writing" that section 82(2) does not apply. Section 82, in full, provides:
   1. Constructive ownership of landholdings and other property - discretionary trusts

_(1) For this section, a person is a beneficiary of a discretionary trust if the person is a person, or a member of a class of people, in whose favour, by the terms of the trust, capital the subject of the trust may be applied in the event - _

(a) of the exercise of a power or discretion in favour of the person or class; or

(b) that a discretion conferred under the trust is not exercised.

(2) A beneficiary of a discretionary trust is taken to own or to be otherwise entitled to the property the subject of the trust.

_(3) For this part, any property that is the subject of a discretionary trust (the primary trust) is taken to be the subject of any other discretionary trust - _

(a) that is a beneficiary of the primary trust; or

(b) any trustee of which (in the capacity of trustee) is a beneficiary of the primary trust.

(4) Subsection (3) extends to apply to property that is the subject of a discretionary trust only by the operation of that subsection.

_(5) However, subsection (2) or (3) does not apply in a particular case if the commissioner - _

(a) is satisfied that the application of the subsection would be inequitable; and

(b) determines, in writing, that the subsection does not apply.

Note Entity - see s 78A.

1. Pursuant to section 83 of the Duties Act, an "interest" and a "significant interest" in a landholder for the purposes of Part 3.2 was defined as follows:
   1. 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.

Note Entity - see s 78A.

1. The reasoning behind the issue of the Reassessments, arising from the application of sections 81-86, is set out in the Commissioner's Reasons Statement for the reviewable decision.[13] In summary:

(a) The Transactions resulted in each applicant, from the date of the Transactions, owning a 50 per cent share in Five27.

(b) Five27, in accordance with the terms of the Trust Deed for the OF Trust (the OFT Trust Deed), was also a beneficiary of the OF Trust immediately prior to the Transactions. As such, by virtue of section 82(2) of the Duties Act, Five27 was taken to own the property of the OF Trust notwithstanding it also being the trustee of the trust.

(c) The applicants' acquisition of all the shares in Five27 constituted a "relevant acquisition", per section 86 of the Duties Act, of an interest in a "landholder", per section 79 of the Duties Act, namely Five27, which is subject to duty under section 85 of the Duties Act.

(d) Five27, as trustee of the OF Trust, owns at least 50% of the shares in other companies which hold land in the ACT such that, by virtue of the deeming provisions in section 81 of the Duties Act, those companies are "linked entities" of Five27. The OF Trust is therefore taken to hold an interest in the properties held by those "linked entities". Five27, as a beneficiary of the OF Trust, is deemed by virtue of section 82(2) of the Duties Act to own all those properties.

1. The "linked entities" were not identified in the Commissioner's Reasons Statement or its Reassessment Notice, but it was common ground that the properties listed in Attachment A to the Reassessment Notices (with the debated exception of a property in Moncrieff, ACT) were held by linked entities.

1. The written evidence, which we have read and considered, consisted of:

(a) Statutory declaration of Ms O'Neill[14]

(b) Two witness statements of Ms O'Neill[15]

(c) Statutory declaration of Mr O'Neill[16]

(d) Two witness statements of Mr O'Neill[17]

(e) Witness statement of Georgie Rogers i[18]

(f) Witnessed statement of Alisa Taylor i[19]

(g) Statutory declaration of Jeff Brewer[20]

(h) Two witness statements of Jeff Brewer[21]

(i) Witness statement of Mark Bramhall[22]

(j) A witness statement of Amanda Thorpe[23]

(k) Tribunal Documents, pages 1-2418[24]

1. Oral evidence was given by Ms O'Neill, Mr O'Neill, Mr Brewer and Mr Bramhall.

1. The applicants applied for review on six grounds as follows:

(a) Ground 1 - for the reasons set out in _Francey v Commissioner for ACT Revenu_e (Francey)[25] the Transactions fell outside the scope of Chapter 3 of the Duties Act.

(b) Ground 2 - the Commissioner erred in refusing to accept that the Transactions do not attract duty by operation of section 95 of the Duties Act.

(c) Ground 3 - the Commissioner erred by not exercising his discretion under section 82(5) of the Duties Act not to deem Five27 to be an owner of the property (including land) held by the OF (discretionary) Trust.

(d) Ground 4 - the Reassessments overstate the dutiable value of the relevant property pool.

(e) Ground 5 - the Reassessments wrongly included liability to pay duty in respect of a property in Moncrieff ACT which, by the proper application of section 81(2)(a) of the Duties Act, falls outside the scope of Chapter 3 of the Duties Act.

(f) Ground 6 - the Commission erred in refusing to exercise his discretion to remit penalty tax pursuant to section 31(5) or 37 of the TAA.

Ground 1 - Transactions outside the scope of Chapter 3

1. In Francey the Tribunal set aside a decision of the Commissioner that the taxpayer (Ms Francey) was liable to pay duty on her acquisition on 16 August 2011 of a significant interest (59,999 shares) in a landholding entity, Un De Six Pty Ltd (UDS), that owned land in Fyshwick (the Fyshwick property). The relevant facts were as follows:

(a) The shares in UDS were owned by Ms Francey's brother-in-law, Mr Kerrill Chambers, save for one share owned by the taxpayer's then spouse and Mr Kerrill Chambers' brother, Mr Robert Chambers.[26]

(b) On 14 December 2007, Ms Francey executed an option agreement with Mr Kerrill Chambers, on which duty was paid,[27] giving her the right to purchase his shares in UDS for $1. Under the option agreement, Mr Kerrill Chambers was required not to sell, transfer or otherwise deal with any interest in the UDS shares.

(c) On 14 January 2008, UDS purchased the Fyshwick property.

(d) On 16 August 2011, Ms Francey exercised her option to purchase Mr Kerrill Chambers' shares in UDS for $1 and the shares were transferred to her.

1. In setting aside the Commissioner's decision, the original tribunal held that Ms Francey was not liable to pay duty under Part 3 of the Duties Act, consequent on her acquisition of the shares, because Ms Francey already held the beneficial interest in the Fyshwick property at the time she acquired the shares. The beneficial interest appears to have been the result of 'a factual finding of a constructive trust' arising from the option agreement. That finding was upheld on appeal.[28]
2. The Commissioner sought to distinguish Francey. The applicants said it was capable of being applied by way of analogy, after being appropriately re-interpreted.
3. The question was whether the position of Ms Francey, as a beneficial owner who called in the legal interest, is analogous to that of the applicants in this case.
4. The applicants, to their credit, noted there was doubt about whether the Tribunal had power to declare a constructive trust, that being an equitable remedy, and that to do so, even if it had power, is not to make a finding of fact. Nevertheless, the applicants relied on Francey by analogy to submit that because they were already eligible beneficiaries under the OF Trust Deed and had substantive if not entire control over distributions from the OF Trust by reason of their directorship of Five27, they did not acquire, by becoming the owners of the shares in Five27, any benefit they did not already have.
5. The respondent submitted Francey should be distinguished, and is not applicable in this case, because it turned substantially if not entirely on the finding of fact that Ms Francey held the shares under a constructive trust. The Commissioner agreed with the applicants that that finding is questionable.
6. In our view, the reasoning in Francey has no application to the facts and circumstances of the applicants. In particular, the reasoning in Francey is not applicable so as to make the Transactions fall outside the scope of Chapter 3.
7. In Francey, everything turned on the Tribunal finding there to be a constructive trust in favour of Ms Francey. The applicants, sensibly, make no suggestion they held the shares in Five27 by reason of a constructive trust or for any other reason prior to the Transactions or that by any means they acquired an interest in Five27 that was not materially different from an interest they already had. It follows, in our view, that Francey does not assist the applicants.
8. We acknowledge the applicants' submission that by reason of their pre-existing directorship of Five27, being the trustee of the OF Trust, and they already being beneficiaries under the OF Trust, their acquiring of the shares in Five27 did not give them any commercial, practical or economic benefit that they did not already have, but that does not cause Francey to be authority for why duty is not payable on the Transactions.
9. Rather, in our view, it is a submission to take into account for the purpose of determining the subjective question whether it is "inequitable" to treat Five27 as an owner of the property (that includes land) of the OF Trust. We deal with that issue in our consideration of ground 3.
10. For these reasons, ground 1 fails.

1. At the point in time of the Transactions, section 95 of the Duties Act provided:
   1. Duty concession - acquisitions securing financial accommodation

(a) the person lodging an acquisition statement under this part in relation to the acquisition of an interest in a landholder tells the commissioner when the statement is lodged that the acquisition is effected 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 statement so far as it relates to the acquisition, except as provided by subsection (3).

_(3) Duty is payable in relation to the statement 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. The words "the person lodging an acquisition statement under this part" in section 95(1)(a) is a reference to section 87 which required a person who had made a relevant acquisition, per section 86, to lodge a statement with the Commissioner within 90 days after the relevant acquisition is made. Section 87 relevantly stated:
   1. Acquisition statements

(1) A person who has made a relevant acquisition must prepare a statement and lodge it with the commissioner.

(2) The statement must be lodged not later than 90 days after the day the relevant acquisition is made.

(3) The acquisition statement must contain the following information:

1. In disallowing the objections, the Commissioner determined the exemption from duty under section 95(2) did not apply because:

(a) neither applicant lodged an acquisition statement within the required 90 days;

(b) the Commissioner was not satisfied the applicants' acquisition of the shares in Five27, being an acquisition of an interest in a landholder (Five27) pursuant to the deeming provision in section 82, was effected for the purpose of securing financial accommodation; and

(c) even if duty was not payable because the circumstances in section 95(1) were met, duty is payable pursuant to section 95(3) because the applicants' interests in Five27 were not reacquired by the persons from which the applicants acquired their interests within 5 years after the Transactions.

1. The applicants submitted duty is not payable pursuant to section 95(2) because the conditions in section 95(1) are met and the exception in section 95(3) should not be applied.
2. Regarding the Commissioner's first reason for why section 95 did not apply, the applicants acknowledged they did not lodge an acquisition statement with the Commissioner within 90 days following their acquiring of the shares in Five27 on 24 November 2017, but they did so on 15 February 2022.[29]
3. They applicants gave evidence they did not lodge the acquisition statements within 90 days of the Transactions because they were not aware of the concession, were taken by surprise by the section 82 Assessments and were focusing on whether section 82(5) relieved them of liability.
4. Regarding the Commissioner's second concern, the applicants maintained (with reliance on their evidence on oath) that their acquisition of the shares in Five27 was solely for the purpose of securing financial accommodation, namely to address the bank's concerns about who were the beneficial owners.
5. They acknowledged (as they had to) that the Transactions also rectified the circularity problem, but submitted the purpose of the Transactions was still to secure finance. The applicants submitted it is not necessary to show the Transactions were the only way they could have secured financial accommodation. It is only necessary to show the Transactions were for that purpose.
6. The applicants submitted securing financial accommodation need only be the operative reason, not the only reason, and the fact the Transactions also resolved the circularity problem does not preclude the exemption from duty under section 95(2).[30]
7. In relation to the meaning of the words "for the purpose of securing financial accommodation", the applicants submitted -

The term "financial accommodation" is not defined in section 95 and does not appear elsewhere in the Act. The term should be given its ordinary meaning, being the provision of finance. The Macquarie Dictionary, under the definition of the word "secure", includes the words "to get hold position ; obtain". The words "mortgage", "charge" and "security" (and variations of those words) are used where relevant throughout the Act - there is nothing in section 95 that would suggest that the failure to use those words was anything other than intentional. "Security" should thus be given its ordinary meaning.[31]

1. The applicants noted the word "securing" appeared in the Duties Act in several places:

(a) Section 74(2): "in this section: mortgage means any charge on dutiable property created merely for securing a debt".

(b) Heading to section 95: "duty concession - acquisitions securing financial accommodation".

(c) Section 95(1).

(d) Dictionary: "mortgage means any charge on land created merely for securing a debt".[32]

1. The applicants submitted that if the legislature had intended section 95 to contain an exemption for acquiring an interest in a landholder (in this case, by share transactions) for the purpose of providing security, rather than obtaining finance, it could have done so by using words such as "to provide security for" rather than the words used which are more in keeping with the ordinary meaning of the word "securing" in the context of section 95, namely obtaining finance, consistent with the use of that word and "security" and "securities" elsewhere in the Act.[33]
2. The applicants took issue with the Commissioner's characterisation of their letter dated 14 May 2021,[34] being their objections to the Reassessments, as evidence that the purpose of the Transactions was to resolve the circularity problem because there was no mention of the purpose being to secure financial accommodation. They contended the purpose of securing financial accommodation in the letter had been identified nearly 12 months earlier, and referred to their solicitor's letter dated 15 June 2020 to the Commissioner stating the Transactions -

took place because [the applicants] were having difficulty getting finance for projects. Their bank (the National Australia Bank) was dissatisfied with the ownership structure of Five27 Pty Ltd and Signature Enterprises Pty Ltd." (emphasis added)[35]

1. The applicants submit that position was maintained as the purpose of the Transactions on several occasions in the intervening period before being fully explained in their Objections to the Reassessments.
2. Regarding the Commissioner's third reason for why section 95 did not apply, the applicants noted that just prior to the lapsing of the 5-year period prescribed under section 95(3), by letter dated 24 November 2022,[36] they applied for an extension of three months after the Tribunal's decision on this application to reverse the Transactions. It was common ground[37] that the Tribunal, exercising the powers of the Commissioner on review, could grant that extension if it thought appropriate.
3. The applicants understandably expressed concern about reversing the Transactions earlier, where the Commissioner was not accepting section 95 applied in any event, because to reverse the Transactions might attract further duty.
4. The Commissioner pressed the above-mentioned three reasons for why section 95 did not apply.
5. Regarding the applicants' failure to lodge acquisition statements in time, the Commissioner relied on the applicants' considerable delay in doing so, but nonetheless accepted it considered the objections to the Assessments and the Reassessments regardless of not having acquisition statements.
6. The same position arose in Li v Commissioner for ACT Revenue[38] where the Tribunal said -

149. 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.

150. 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. Regarding the claimed purpose of the Transactions, the Commissioner relied on the word "the", meaning the purpose rather than a purpose, to submit section 95(1)(a) is not met if securing financial accommodation is no more than 'a' purpose of the acquisitions.[39]
2. In this case, the Commissioner maintained the Transactions were not for the purpose of securing financial accommodation. Rather they were to address the circularity in the shareholding of Five27 and Signature.
3. The Commissioner relied on many aspects of the evidence to submit that conclusion should be drawn. The Commission referred to the applicants answering "No" to the question whether the applicants' acquisition was subject to an exemption under the Duties Act in their response dated 5 November 2019 to the Commissioner's Landholder Duty Section 82 Notices[40] and nowhere stating in that response or in their initial 'skeleton' objections to the assessments lodged on 16 June 2020 that the purpose of the Transactions was to secure financial accommodation. The Commissioner submitted it was not until the letter from their solicitor sent on 14 May 2021 setting out the applicants' objections to the Reassessments some 2.5 years after the Transactions that this purpose was claimed.
4. The Commissioner also relied on the circumstance that NAB did not require the Transactions to be executed. It simply requested a letter confirming which individuals are in fact beneficial shareholders in the relevant entities.
5. The Commissioner relied on the circumstance that the Transactions was Mr Bramhall's idea, with which Mr Brewer agreed, and that the applicants simply signed the documents to execute the Transactions.
6. All of this, the Commissioner submitted, supports a finding that the true or at least dominant purpose of the Transactions was to fix the circularity problem.
7. The Commissioner submitted that, in any event, the applicants misconstrue the words "for the purpose of securing financial accommodation". The Commissioner submitted "securing" means to make to make finance safe, or to protect it from risk of loss by some means, for example by providing a mortgage over an asset, rather than to obtain finance as the applicants contended.[41]
8. Regarding the applicants' failure to reverse the Transactions, pursuant to section 95(3), the Commissioner said it did not grant an extension of the 5-year period within which to reverse the transactions,[42] and the Tribunal should not do so because the applicants made a commercial decision not to re-acquire because, to do so, would have placed both companies in breach of section 259D of the Corporations Act.
9. Turning to our consideration of whether the exemption under section 95 applies, in our view the following matters needed to be considered:

(a) Whether the time for lodging an acquisition statement under section 87 of the Duties Act is essential.

(b) The meaning of "securing financial accommodation" in section 95.

(c) When must the purpose of securing financial accommodation be notified.

(d) Under what circumstances should the discretion to extend the 5-year period for reversing the Transactions be exercised.

1. In our view, the first question and the Commissioner's first reason for why section 95 does not apply is readily answered. We agree with the Tribunal's decision in Li, acknowledged by the Commissioner in that case, that the timeframe for lodging an acquisition statement under section 87 is not mandatory in the sense that if it is not lodged within time the exemption under section 95 is not available, even though the obligation to lodge is ongoing. In this case, the applicants had told the Commissioner that their purpose in acquiring an interest in Five 27 was to secure financial accommodation prior to lodging their acquisition statements. In our view, the first condition for the exemption to apply, namely the lodgement of acquisition statements which occurred on 15 February 2022, is met.
2. The second and most important consideration is whether the Transactions were for the purpose of securing financial accommodation.
3. The first question was to determine the meaning of "securing". Two constructions were put forward. The applicants contended it means obtaining finance. The Commissioner contended it means securing in the sense of protecting finance from risk of loss.
4. For the following reasons, we prefer the Commissioner's construction.
5. The Macquarie Dictionary gives 15 meanings to the verb "secure", all but one of which are, or involve, to remove risk or danger, to provide safety, to make firm or fast, or to keep free from care; without anxiety, to be sure or certain. In the context of finance, the 14th definition is:

14. to assure a creditor of payment by the pledge or mortgaging of property.[43]

1. We acknowledge the meaning on which the applicants rely, namely "8. to get hold or possession of; obtain", but are not persuaded that meaning should be preferred in the face of the remaining 14 meanings and the meaning in the context of finance in particular.
2. The definition in the context of finance, having regard to the surrounding meanings of the word "secure", is consistent with the Commissioner's construction.
3. Responding to the applicants' submission, we were not persuaded the legislature would have written "for the purpose of providing security for", rather than "for the purpose of securing" if it intended concepts of protection from risk. That, in our view, would simply introduce inelegant language. We prefer that if the legislature had intended "obtaining" rather than "securing" it would have said so.
4. At hearing, the applicants referred to an old system mortgage, where land was transferred subject to an equity of redemption, as the "simplest example" of transferring property on the basis of it being security for a loan, that being the "clearest possible indication of a case where property had been transferred to secure a financial accommodation".[44] We respectfully observe this example supports the Commissioner's interpretation.
5. Likewise, the word "securing" in section 74(2) and in the Dictionary to the Duties Act is consistent with the meaning of "securing" put forward by the Commissioner and, with respect, inconsistent with "obtaining".
6. Having regard to the ordinary meaning of the word when used in a financial context and the context in which it appears in section 95, we consider the proper construction is that an acquisition must be part of a process for securing a loan or other financial accommodation from risk. The obvious example is a mortgage on land. In other words, an acquisition in land may be necessary in order to present the land as a means of securing the loan.
7. We turn next to the purpose of the acquisition, read in the context of securing as interpreted, which needs to be determined as a finding of fact.
8. We accept, by reason of the definite word "the" in section 95(1)(a), that in a situation where an acquisition has occurred for more than one purpose, the dominant, motivating or causal purpose for the acquisition must be securing financial accommodation. That being an incidental or secondary purpose is not sufficient.
9. In our view, that is consistent with the intention or purpose of section 95 generally. Its obvious application is to enable a corporate grouping to make land held by one entity in the group available to secure temporary finance for a project being undertaken by another entity in the group. Enabling the efficient use of capital in that way is likely intended by the legislature as the core purpose of the provision, given that Part 3.2 is designed to counter avoidance of duty by the acquisition of an interest in a landholder.
10. There would simply be no point in acquiring an interest in a corporate landholder and then re-transferring the interest five years later if all that was involved was an unsecured loan. The point of section 95 is to enable group assets to be put to best use for the purpose of securing finance.
11. Section 95, unlike section 82, addresses temporary (as opposed to permanent) acquisitions. Section 82(5) enables the Commissioner to filter out transactions which were not intended to be caught by section 82(2) by reference to when it would be "inequitable". That, as discussed in response to ground 3, requires consideration of all the circumstances in a particular case.
12. For section 95, the filtration is more specific, namely the acquisition needs to be for the purpose of securing financial accommodation. Given the role of finance, essential to commercial activity and fundamental to the economy, it is to be expected the legislature would not wish to inhibit the availability of finance unnecessarily. Accordingly, for the purposes of section 95, where the acquisition of shares in a constructive landholder is not for the purpose or dominant purpose of securing financial accommodation, the acquisition is dutiable.
13. That is consistent with the proviso that the arrangement must be reversed within five years, subject to an extension of time, to prevent the acquisition continuing indefinitely without the payment of duty.
14. A question arising is whether an acquisition which does not itself secure financial accommodation, but is a part of a process leading to the securing of financial accommodation, attracts the exemption from duty under section 95. In our view it is sufficient for the purposes of section 95 if the sole or dominant purpose of the acquisition is to fulfil part of that process. The fact that other forms of security, for example a personal guarantee, might also be necessary to secure financial accommodation is not relevant. That said, a claim that an acquisition was the purpose of securing finance where, on the wider facts of a case, there was no real prospect of finance being secured regardless of the acquisition is likely to cast doubt on the claimed purpose.
15. We turn to the question whether, having regard to all the facts and circumstances, the Transactions were for the purpose of securing financial accommodation.
16. In this regard, we took into account the written evidence in the witness statements and statutory declarations of the applicants, Mr Brewer and Mr Bramhall, all of whom gave oral evidence and were cross-examined[45]. We consider each of them to be honest and reliable witnesses.
17. At hearing, various explanations for the Transactions were put to the witnesses in cross-examination. On the basis of their answers, we are satisfied that although there was earlier discussion between the applicants and their accountants as to the winding up of Signature, this did not play any part in the motivation for the Transactions.
18. We are also satisfied that, although the accountants appreciated there was a problem with the shareholding circularity and knew it was a prohibited arrangement under the Corporations Act that needed to be fixed, their 'purpose' in recommending the Transactions and the applicants' purpose in executing them was to answer NAB's concern about its need to "know its customer" which was answered for the purpose of securing financial accommodation for the proposed development from the bank.
19. Several aspects of the evidence support our conclusion.
20. First, the Transactions would not have occurred in November 2017 but for the need to satisfy NAB as to the beneficial shareholding of Five27 which occurred in the context of NAB determining whether to approve the requested loan.
21. Second, it is speculative to think the Transactions would have occurred in the future when it was discovered that the shareholding arrangement was in breach of section 259D. Also, almost certainly, the applicants would not have fixed the circularity problem in the way they did had they known that to do so in that way would or might incur duty in excess of $1 million.
22. Third, the bank had been asked to approve finance to Bond 1, a company whose sole director was Mr O'Neill and whose sole shareholder was Five27, a company whose sole shareholder was Signature, the sole shareholder of which was Five27. In terms of assessing the financial risk the bank was being asked to undertake, it is not surprising the bank wished to understand who were the persons standing behind the arrangement - or, as the bank expressed it, there was a need to "know your customer". The Transactions were to address the bank's concern.
23. Fourth, following the Transactions, the bank approved the finance without further query.
24. Fifth, the arrangement put in place, namely the applicants becoming the owners of the trustee of the OF Trust (Five 27) reflected the understanding which all concerned had had for years regarding control of the OF Trust.
25. Sixth, the bank accepted as security for its loan the company charge, the real property mortgage, and the personal guarantee.
26. Accordingly, we are satisfied (standing in the shoes of the Commissioner) that the Transactions were for the purpose of securing financial accommodation.
27. We were not persuaded Mr Brewer's statement in 2019, and in subsequent correspondence, for which we agree the applicants must accept responsibility, stating "no" to the question whether the acquisitions were exempt from duty and not raising earlier the purpose of the Transactions shows that the purpose was not to secure financial accommodation.
28. The statement and timing need to be put in context. When the correspondence is read as a whole, the answers were given in the context and for the purpose of submitting it would be inequitable, per section 82(5), to characterise Five27 as an owner of the trust property and therefore a landholder. In that context, where the whole purpose of Mr Brewer's letter was to contend the Commissioner should exercise his discretion under section 82(5), it is not surprising he answered "no" to whether there was an exemption.
29. We turn to the Commissioner's third reason for why the concession under section 95 does not apply, namely the exception under section 95(3) applies because the shares in Five27 acquired by the applicants were not reacquired within 5 years of the Transactions.
30. The Commissioner submitted an extension should not be granted because the applicants had made a decision, reflected in their solicitor's letter, not to effect re-acquisition within the time allowed for "commercial reasons". The applicants disputed this. The reason expressed, at the time, was that the continuation of the shareholding arrangement (namely, the applicants being the owners of Five27) supported (or secured) financing facilities, though not the particular facility provided, and time would be required in which to negotiate alternative arrangements with the bank.
31. The applicants also expressed their concern that to reverse the Transactions might attract further duty as another reason for waiting for the outcome before acting.
32. The Commissioner submitted that re-acquisition was not likely because it would involve a further breach of the Corporations Act.
33. We are satisfied that Signature can reacquire from Mr O'Neill the share in Five27 he acquired from it for the purposes of complying with section 95(3)(a) and presumably would, if necessary, for the purpose of causing the duty concession to be applicable. Likewise, Ms O'Neill could arrange for her share to be cancelled, that being an acquisition of the share per section 84(2)(a(iii) of the Duties Act.
34. The concern about further breaching section 259D of the Corporations Act if the Transactions are reversed is, in our view, misconceived. True, the circularity problem would be recreated by Signature re-acquiring a share in Five27 and the share allotted to Ms O'Neill being cancelled, but Signature and Five27 would have 12 months within which to rectify the resulting circularity problem before a breach would (again) have occurred.
35. Whilst it is for the applicants, not us, to decide how to rectify the circularity problem without triggering possible liability for duty, to do so seems feasible. For example, noting Five27 is now an "excluded person" for the purpose of distributions from the OF Trust,[46] Five 27 can no longer be deemed a landholder with the result that the shares could be re-transferred and re-allotted to Mr O'Neill and Ms O'Neill, respectively, and possible duty under section 85 would not arise.
36. Where we are satisfied the purpose of the Transactions was to secure financial accommodation and we accept it is appropriate to grant an extension of time for the shares to be reacquired, we will make an order extending the time for re-acquisition to a date three months after the date of the publication of our decision.

Ground 3: section 82 (5) - non-application discretion

1. With reliance on section 82(5), the applicants contended the Tribunal should be satisfied that the application of section 82(2) to deem Five27, as a beneficiary of the OF Trust, to own the land that is the property of the trust would be inequitable.
2. The applicants began with submissions on the meaning of "inequitable" for the purposes of section 82(5). By reference to the Macquarie Dictionary, it noted "inequitable" is synonymous with terms such as "unfair", "unjust" and "not equitable". They submitted "inequitable" is arguably a lower threshold than the words "not just and reasonable".
3. Noting the absence of authority on the meaning of inequitable for the purposes of section 82(5), save (arguably) for Francey, the applicants referred to the comparable provision in the Duties Act 1997 (NSW), section 163H, which provides:

163H Discretion to grant exemption or concession

(1) The Chief Commissioner may, if satisfied that the application of this Chapter to an acquisition in a particular case would not be just and reasonable--

(a) grant a full exemption in respect of the acquisition, or

(b) grant a partial exemption in respect of the acquisition.

(2) If the Chief Commissioner grants a full exemption in respect of the acquisition, the acquisition is an exempt acquisition.

(3) If the Chief Commissioner grants a partial exemption in respect of the acquisition, the Chief Commissioner may make any reduction in the duty chargeable in respect of the acquisition that the Chief Commissioner considers just and reasonable in the circumstances.

1. The applicants then drew on a decision of the NSW Supreme Court, per White J, in Milstern Nominees Pty Ltd v Chief Commissioner of State Revenue[47] (Milstern) in which the Court commented on when a full or partial exemption should be granted because to impose duty "would not be just and reasonable".
2. Milstern concerned the acquisition by Milstern Nominees Pty Ltd (Nominees), a company controlled by a Mrs Phillips, of shares in another company in the Phillips group of companies, Milstern Enterprises Pty Ltd (Enterprises). Landholder duty was imposed under comparable legislation to that in the ACT.
3. Mrs Phillips controlled Enterprises through her control of Mamark Holdings Pty Ltd (Mamark) which was the holder of 200 A class ordinary shares which enabled Mamark to control the voting power in a general meeting of Enterprises. The acquisition by Nominees of the various ordinary shares in Enterprises brought with it a right to a distribution of surplus profits or assets on a winding up or return of capital, but otherwise brought no right to a distribution of surplus assets or profits.
4. Mrs Phillips said the purpose in acquiring the shares was to remove her son and daughter from any participation in the group of companies (although they each received $4 million) as a result of a falling out with them. Although there was a relevant acquisition in a landholder, that acquisition did not bring with it the prospect of any economic benefit because it did not bring with it control of the landholder.
5. In considering the operation of the dispensation power in section 163H, White J observed that "no express guidance is given as to when it might be considered just and reasonable for a full or partial exemption to be granted in respect of an acquisition". White J quoted from decisions in other jurisdictions applicable to the legislation:

Instead of endeavouring to spell out the circumstances in which burdens imposed by the legislation might be lifted, the Parliament has provided for dispensation that is capable of exercise by reference to the widest range of factors..... The dispensing power is incidental and ancillary to the primary object of the legislation."[48]

It may readily be accepted... That the purpose of dispensing power is to avoid (in many if not all in all cases) the need to specify the minutiae of every circumstance where the tax burden is to be relieved

It is a feature of modern taxing legislation that the basis of tax is at times expressed more broadly than the policy underlying the tax requires and that the language used to impose the tax is expressed less precisely than may be desirable in every case. The discretion in the Commissioner to relieve a taxpayer from the burden of tax is a means by which the legislature has entrusted to the Commissioner the duty to administer the tax legislation by reference to its terms to the extent that they are consistent with the policy they express. The exercise of the discretion is a matter for the Commissioner but a matter that may be relevant to its exercise is the extent to which the assessment brings to tax 'changes in beneficial ownership in land'.[49]

[T]hat section 159 that deems a discretionary object of a discretionary trust to own or otherwise be entitled to the property the subject of the trust was an anti-avoidance measure to deal with a situation whereby a person, without acquiring any interest in the land, might, by acquiring a "significant interest" in a discretionary object, achieve the economic benefits of ownership of land held by the trustee, as an arrangement whereby the trustee will exercise the power to appoint income or capital to a discretionary object. No such issue arises in the present case.

The fact that the criteria for liability are established by the acquisition of an interest in a landholder does not elucidate the grounds on which an exemption from liability should be considered to be just and reasonable.[50]

Duty is imposed on the relevant acquisition of an interest in landholder that is a discretionary object[51] but that is subject to the exempting power in 163H.

The question is whether it is not just and reasonable that Ch 4 apply to the acquisition by Nominees of the shares in Enterprises where Enterprises as a matter of fact does not own or control the land, or have any expectation of receiving the land or any proceeds of sale of any part of the land, or any income from it. The question is to be assessed against the background that Enterprises' position as a discretionary object of the Landsell Trust was irrelevant to Nominees' acquisition of the shares in Enterprises. In those circumstances I consider that it is not just and reasonable that Chapter 4 apply to the acquisition.[52]

1. The Court found that in circumstances, where the shares were acquired in an eligible corporate beneficiary which did not beneficially own the land and did not have any expectation of receiving it, and where the fact that the company was an eligible beneficiary was irrelevant to the decision to acquire shares in it, it would not be just and reasonable to apply duty.[53]
2. With reliance on the statements in Milstern about the need to consider all of the circumstances of the case when deciding whether to apply duty would "not be just and reasonable", or in this case whether it would be "inequitable" to deem Five27 to be the owner of all the land held under the OF Trust, the applicants relied on six circumstances:

(a) The applicants did not derive any substantive or practical economic benefit from the Transactions and did not gain any practical control over the property (including land that formed part of the property) of the OF Trust that they did not already have.

(b) Ad valorem duty has already been paid consequent on acquisition of the different pieces of real property held within the OF Trust. The applicants now have the same interest in those properties as they did before the Transactions. To impose duty by reason of the deeming provisions in section 82(2) would, in substance, require the applicants to pay duty twice.

(c) If, for whatever technical reason, the Tribunal is not satisfied the Transactions are exempt from duty pursuant to section 95, the absence of exemption because of the technical or formality failure is nevertheless a factor to take into account in the exercise of the section 82(5) discretion.

(d) The purpose of the Transactions was to resolve NAB's enquiries regarding beneficial ownership of the applicable companies which was done for the purpose of securing finance. The applicants have never derived any economic benefit from the Transactions. Further, as a result of a deed of variation of the OT Trust dated 5 November 2019,[54] Five27 (as trustee) became an "excluded person" for the purpose of distributions from the OF Trust. In any event, the fact that Five27 was previously a beneficiary of the OF Trust and therefore potentially stood to benefit could not have been a purpose for the Transactions because the applicants were not aware of that fact at the time the Transactions occurred.[55]

(e) When executing the Transactions, the applicants relied on MGIJD's advice about how best to resolve the bank's wish to know who were the beneficial owners of the applicable companies. The applicants say they would have been quite content not to enter into the Transactions so long as funding for Bond 1 was obtained.[56] [57] MGIJD acknowledge to execute the Transactions was their solution for resolving the bank's concerns and they never advised the applicants of any prospect the Transactions would result in a liability for duty.[58]

(f) The law on the subject is unclear. There is little judicial authority and there was no publication from the Commissioner available to the applicants regarding possible liability for duty under section 82 in this case or when the discretion available under section 82(5) might or would be exercised.

1. The applicants relied by analogy on some of the absurdities that could arise if section 82 was strictly applied. For example, if any member of the applicant's family acquired a single share in a company linked to the OF Trust, that company would become an eligible beneficiary of the OF Trust and so be liable for duty on all the property not only held by the OF Trust but held by any entity in which the OF Trust holds shares or units.
2. The applicants addressed the decision of the NSW Supreme Court in Winston-Smith v Chief Commissioner of State Revenue[59] (Winston-Smith), relied on by the Commissioner, by distinguishing it on the facts. The applicants noted the Court in Winston-Smith distinguished Milstern from the facts in issue in Winston-Smith and that, on appeal, in Winston-Smith v Chief Commissioner of State Revenue the NSW Court of Appeal approved the reasoning in Milstern.[60]
3. Winston-Smith concerned a will in which the deceased (Ms Selle) had a 50% shareholding in Mac's Pty Ltd (Mac's) and a 100% shareholding in Town & Country Plans Pty Ltd (TCL). Meanwhile, TCL owned the remaining 50% shareholding in Mac's. Mr Winston-Smith was a beneficiary under the will. It was a condition of his taking under the will that he make a specified payment to his sister. He received advice that he could meet the condition in a tax effective manner by winding up TCL. He did so.
4. TCL had a trading history.
5. Consequent on the winding up of TCL, Mr Winston-Smith acquired a further 50% shareholding in Mac's. This gave him a practical benefit because, although the extent of his control did not change, in that previously he had 50% direct control and 50% indirect control, his changed position of 100% direct control coupled with the removal of TCL and its attendant risks (because of its trading history) left him in an overall better position. The Court was not satisfied it was just and reasonable to exempt the acquisition from duty. The Court of Appeal dismissed Mr Winston-Smith's appeal.
6. _Milster_n was closely considered by the Court of Appeal in Winston-Smith. Meagher JA[61] who noted -

although there was taken to be an acquisition of a significant interest, that acquisition did not convey to or create in Milstern Nominees any beneficial or economic ownership or control in the trust's land. Milstern Enterprises did not have that power or control before the acquisition, and that remained the position after it

Mrs Phillips controlled both the discretionary object of the trust and the trust, and that was the position before the acquisition and continued to be the position after it, in circumstances where the acquisition had no practical consequence for either of those matter [62]

1. There being no practical benefit to Mrs Phillips akin to the practical benefit acquired by the appellant in Winston-Smith, Milstern was distinguished.
2. The Commissioner did not quarrel with the statements of principle in Milstern about the need to consider all the circumstances in the case, but contended the reasons on which the applicants relied did not make it inequitable to deem Five27 an owner of land for the purposes of section 82(2).
3. As for the first reason, the Commissioner initially submitted the fact that the applicants did not obtain a substantive or practical economic benefit from the Transactions was irrelevant.[63] They later submitted that to correct the circularity problem was a practical benefit such that it was not inequitable to apply section 82(2).
4. In closing submissions, the Commissioner recast its response about the absence of benefit by submitting a benefit that accrued to the applicants was their ability to arrange their federal tax affairs by utilising their control of Five27 after the Transactions. In that context, the Commissioner [64] relied on the OF Trust income statements for the financial years ending 30 June 2017 and 2018 which record substantial distributions of profits to another company controlled by Five27, Bond Projects Group Pty Ltd (BPGPL),[65] in which Five27 owned shares.
5. The Commissioner also submitted that in October 2017 the shares in BPGPL were transferred from Signature to Five27. Five27 then owned the shares in its own right (it said), not-non-beneficially per a correction lodged with ASIC on 18 February 2021, and that the beneficial ownership of the shares enabled BPGPL to lend money back to the OF Trust and enabled the applicants to access funds directly.[66]
6. In support, the Commissioner pointed to a sequence of transactions:

(a) Distribution to BPGPL of $1,741,174 million[67], recorded in Notes as "unpaid present entitlement"[68], and as income to BPGPL[69]

(b) Drawings of $224,242 by BPGPL[70]

(c) Loan to the OFT of $1,516,933[71]

(d) 31 October 2017 - Signature transfers its shares in BPGPL to Five27

(e) 10 November 2017 - ASIC form shows shares owned "beneficially" by Five27

(f) 24 November 2017 - the Transactions took place

(g) 16 February 2021 the Reassessments were issued

(h) 18 February 2021 - forms lodged correcting "beneficial" to "non--beneficial".

(i) Drawings of $1,516,933 by BPGPL

1. Mr Brewer was cross-examined about these transactions;[72] about the beneficial or non-beneficial status of Five27's ownership of the shares in Signature from 31 October 2017 through to 18 February 2021; and about the forms lodged with ASIC on those dates.
2. He described the latter ASIC form as a correction of a "clerical error" made in the initial transfer form - ticking the 'Beneficially owned' box as 'Y' instead of 'N', that error being subsequently carried through in the office electronic system to subsequent relevant forms.[73] He said that in the years before the error was formally corrected, accounts and tax returns were lodged in line with the OF Trust being the beneficial owner.[74] He was not challenged about either of these statements. Mr Brewer was not cross-examined about the purpose of the transactions, nor as to any particular significance they might have had with respect to each other.
3. In oral submissions, Mr Wells said:

Now, it's odd that it's described as a loan and not as the unpaid present entitlement from the O'Neill family trust, but what we deduce is that there's a payment back from the bond project group Pty Ltd to the O'Neill family trust and that raises the curious result, if Five27 held the shares in Bond projects group non-beneficially, that is, for the O'Neill Family Trust, the O'Neill Family Trust has made a payment to Bond projects group which goes back into the O'Neill Family Trust

He then made reference to a series of subsequent documents (Minutes of Meetings, share transfers and the like) which referred to beneficial ownership. After referring to Winston-Smith and the 'removal of a layer' he continued[75]:

Now how do they relate to this case? Well it appears from the financial statements of Bond Projects Group in the O'Neill Family Trust that amount of 1.7 million has been paid by way of distribution from the O'Neill Family Trust to Bond Projects Group which has then gone back into the O'Neill Family Trust by way of a loan and then shortly after there is the removal of Signature, which allows Mr and Mrs O'Neill to directly access, without the interposed layer of Signature, amounts that may be paid by Five27. Now that does not appear to have occurred, but there is no explanation that has been given about this transaction involving Bond Projects Group and combined with the rest for the correction of the register, which we are told had been incorrect for over three years, and on which the assessment and reassessments were issued-so the reassessments were issued on 16 February 2021 and the request for correction occurred on 18 February 2021, so a mere two days later.[76]

1. Mr Wells conceded that much of what was being asserted as to the actual beneficial interest the applicants gained by this share transaction, in particular the engagement of the money transfers to BPGPL and back with the loan, was all new. He said that until Mr Brewer was asked those questions, it had not been deciphered by the Commissioner from looking at the documents and that it had not been put in submissions previously.[77]
2. Ultimately, it was said the financial statements for the years after the financial year ending 2020 and tax returns for relevant years, are the point where "the trail goes cold"[78] but "might"[79] show a payment back to the applicants.
3. The Commissioner's position was that it is for the taxpayer to make all disclosures necessary to show that a practical benefit was not obtained, and this had not been done.
4. As for the applicants' second reason, the Commissioner noted (persuasively in our view) that section 90 of the Duties Act, and in particular section 90(3) provided for a reduction of duty, but not in relation to duty imposed under a different chapter of the Duties Act (Chapter 2) such as ad valorem duty imposed on the initial purchase of real property. Accordingly, the Commissioner said, the applicants' argument about liability for "double duty" was misconceived.
5. As for the applicants' third reason, the Commissioner returned to the claimed purpose of the Transactions, namely to address the circularity problem, to submit the exemption under section 95 was not available not merely for reasons of technicality or formality failures but because of the substantive reason that the Transactions were not for the purpose of securing financial accommodation.
6. As for the fourth reason, consistent with non-applicability of section 95, the Commissioner submitted the motive or purpose of the Transactions was to solve the circularity problem.
7. As for the fifth reason, the Commissioner submitted (persuasively in our view) that the applicants' reliance on advice from a professional adviser or not being aware of duty consequences when executing the Transactions was not a principled basis to exercise the discretion under section 82(5). The Commissioner submitted the onus is on the applicants to be aware of and comply with their tax obligations. The appointment of an agent does not relieve them of their obligation to do so.[80]
8. In reply, on the question of practical benefit, applicants submitted that avoidance or minimisation of federal tax was not a concern of the Commissioner. The applicants otherwise pointed to the high if not complete control held by the applicants such that there was nothing they could do after the Transactions to benefit themselves which they could not do beforehand.
9. The applicants made the same submission in response to the Commissioner's review of the OF Trust income statements for the financial years ending 30 June 2017 and 2018, the relationship between Five27 and BPGPL and Signature and doubt about whether shares were owned beneficially or non-beneficially. Whatever be the case, the Transactions did not give the applicants any practical benefit or economic benefit arising from these dealings that they did not already have.
10. In our consideration of whether to deem Five27 as the owner of the property including land held by the trust is inequitable, we acknowledge the Commissioner's word of caution about using comparable legislation in other jurisdictions, in this case section 163H of the Duties Act 1997 (NSW), for the purpose of construing provisions under the Duties Act. Accordingly, the only assistance we took was a consideration of methods of reasoning when applying the comparable Territory legislation.
11. In particular, we note section 163H is an overarching discretionary provision to grant an exemption or concession from liability to duty. By contrast, section 82(5) addresses the specific circumstance of whether a beneficiary under a discretionary trust should not be deemed to be an owner of the trust property.
12. The criterion for satisfaction in section 82(5) - 'inequitable' - and its counterpart in New South Wales - 'not be just and reasonable' - is textually different. However, in our view, the words are a distinction without a difference. Emmett AJA in Winston-Smith at first instance[81] traced the history of the legislation, noting that prior to the enactment of section163H, the criterion was 'inequitable'. It was not suggested there was any difference in approach required by the change. In our view, the two expressions are virtually synonymous. The change, in our view, was likely only for the purpose of using more contemporary language.
13. We concluded the principles for deciding whether to grant an exemption, namely the "not be just and reasonable" test or the "inequitable" test, remained the same because the outcome is the same: if Five27 is not taken to be a landholder, the applicants' acquisition of shares in Five27 has no duty consequence for the purposes of section 85.
14. Having considered the parties' competing considerations, we concluded it would be inequitable to deem Five27 to be a landholder with the consequence of duty being payable on the Transactions. That is not to suggest it would be inequitable to deem Five27 to be the owner of land for all purposes. In our view, the question of inequity must be assessed by reference to consequence on a case-by-case basis and in this case whether the duty is payable by reason of the Transactions.
15. Several matters drew us to the conclusion it would be inequitable.
16. First and perhaps foremost is our conclusion that no one, and in particular the applicants, derived any practical or economic benefit from the Transactions. We note that was the point of distinction between Milstern and Winston-Smith.
17. In particular, critical to the Court at first instance and on appeal in Winston-Smith was the 'removal of a layer' in the course of the transaction which gave rise to a practical benefit for the taxpayer. The reasons of the primary judge, especially at [66]-[67] quoted by the Commissioner in his Reasons Statement, noted the importance of that factor when distinguishing Winston-Smith from Milstern. In approving that passage, the Court of Appeal said:

His Honour concluded that the relevant acquisition changed the appellant's underlying practical or economic interest of the land to his advantage. A "layer of legal and beneficial ownership that had existed" was removed, one consequence being that "there would no longer be a possibility that the financial position of TCL, such as liabilities to a third party creditors, could interfere with the capacity of the [appellant] to ensure that he received all of the income derived from the land owned by Mac's": Judgment [66], [71].[82]

1. The reference to the removal of a layer was a reference to the winding up of the company TCL, which had a trading history, and the transfer of the shareholding it had in Mac's to the taxpayer - the acquisition of the significant interest in that case. There was a practical benefit obtained, for the reasons identified by the Court of Appeal. In particular, the winding up of TCL and transfer of a 50% shareholding in Mac's to the taxpayer meant that there was no possibility of interference with the distribution of 100% of income to the taxpayer thereafter.
2. The applicants submitted -

[Winston-Smith] is easily distinguishable from the present case, wherein the Applicants already controlled distributions from and were already direct beneficiaries of the OFT, such that the Transactions effected no change in their practical and economic interests in the subject property. Put simply, it was not the case that acquiring shares in Five27 would remove any layer between the Applicants and the underlying property. Not only did it add a layer, but it was superfluous in doing so as, prior to the Transactions, the Applicants could already have distributed OFT property to other corporate beneficiaries in which they personally owned shares...[83]

1. This repeats, appropriately, the submission that the applicants had the same level of control in all respects before and after the Transactions. We agree.
2. We acknowledge the applicants' control before the Transactions was an amalgam of directorship and direct and indirect shareholding, whereas control after the Transactions was available through direct shareholding of Five27, but this did not affect the effectiveness of the control: they were and remained the sole directors of Five27 and so were able to control the trust.
3. There is a significant difference between the roles 'removed' in Winston-Smith and in this case. As the applicants submitted, Signature had a trading history, as did TCL, but the latter was not a trustee. Signature traded in its own right, but any liabilities it might have accrued could not give rise to any indemnity out of the assets of the OF Trust. At worst it may mean the company may be liquidated in a creditors' winding up, but a new trustee could be appointed. Accordingly, in our view, a practical benefit as suggested in this form does not exist.
4. We were not persuaded by the Commissioner's submission that the absence of a practical benefit is irrelevant to the exercise of the discretion under section 82(5). That approach, in our view, contradicts the reasoning in Milstern for why it would not be just and reasonable to impose duty. In Milstern, the acquisition of an interest in the constructive landholder did not create a benefit did not already exist and was therefore irrelevant. That is the position in this case.
5. Regarding the Commissioner's later submissions about interactions between Five27, BPGPL and Signature, the distribution of profits, and whether Five27 owned the shares in BPGPL beneficially or non-beneficially, whatever may be made of these circumstances, we were not persuaded the Transactions gave the applicants a benefit they did not already have. By reason of their directorship of Five27 and their effective control of all aspects of the OF Trust, we were unable to see how the applicants becoming shareholders in Five27 provided any benefit regarding distribution of profits and income that they did not already have.
6. We acknowledge of course that the Transactions resolved the circularity problem and that was a benefit, in the sense of Five27 and Signature no longer being in breach of the Corporations Act, but we do not accept that benefit was of such a kind or degree that duty should be paid on the Transactions, especially where the circularity problem could have been rectified in ways that did not attract duty. That benefit was incidental to the purpose of the Transactions, namely securing financial accommodation for Bond 1.
7. Put another way, we accept that resolving the circularity problem was not dependent on, or linked to, the fact that Five27 was the beneficial owner of land. In our view that is essentially the same point made by White J in Milstern.[84]
8. For these reasons, we are satisfied it would be inequitable to apply section 82(2) so as to deem Five27 to be a holder of land in this case.

1. Where we are satisfied the reviewable decision should be set aside on two grounds, for the reasons given, it is unnecessary to consider grounds 4, 5 or 6.

[1] ACT Civil and Administrative Tribunal Act 2008 section 68

[4] Witness statement of Matthew Bramhall dated 3 March 2023 at [13]

[5] Statutory declaration of Mary O'Neill dated 15 February 2022 at [11]

[6] Witness statement of Matthew Bramhall dated 3 March 2023 at [14]

[7] Witness statement of Jeff Brewer dated 3 March 2023 at [18]

[8] Statutory declaration of Mary O'Neill declared on 15 February 2022 at [16], Exhibit "I"

[9] T documents, Reasons statement, page 9

[10] T documents, Reasons statement, page 10

[12] Duties Act 1999, section 77

[25] [2013] ACAT 84

[26] [2013] ACAT 84 at [24 ii]

[27] [2013] ACAT 84 at [12]

[28] Commissioner for ACT Revenue v Francey [2014] ACAT 67

[30] Applicants' submissions in reply dated 5 June 2023 at [15]-[17]

[31] Applicants' opening written submissions dated 28 February 2023 at [48]

[32] Applicants' closing written submissions dated 5 June 2023 at [35]

[33] Applicants' closing written submissions dated 5 June 2023 at [37]-[38]

[35] Witness statement of Alisa Taylor dated 13 April 2023, attachment "AT 1"

[37] Commissioner's opening submissions dated 24 March 2023 at [80]; Applicants' closing submissions dated 5 June 2023 at [50] - [54]

[38] [2024] ACAT 24

[39] Commissioner's closing submissions dated 16 May 2023 at [35]

[41] Commissioner's closing submissions dated 16 May 2023 at [32]-[34]

[42] The Commissioner did not respond to the request

[44] Transcript of proceeding, 1 May 2023, page 9, lines 4-9

[45] Transcript of proceeding, 1 May 2023, pages 73-81 (Ms O'Neill), pages 85-100 (Mr O'Neill); pages 112-140 (Mr Brewer) and pages 145-159 (Mr Bramhall)

[46] T documents, page 845, witness statement of Mary O'Neill dated 3 March 2023 at [19]

[47] [2015] NSWSC 68

[48] Federal Commissioner of Taxation v Swift [1989] FCA 413; (1989) 20 ATR 1434 at 1451

[49] Challenger Listed Investments Ltd v Commissioner of State Revenue (2010] [2010] VSC 464; 80 ATR 630 at [27], [29]

[50] [2015] NSWSC 68 at [45]

[51] This a reference to a beneficiary of a discretionary trust

[52] [2015] NSWSC 68 at [53]

[53] Applicants' written submissions dated 28 February 2023 at [58]

[55] Statement of Mary O'Neill at [19]; Statement of William O'Neill at [17]

[56] Statement of Mary O'Neill at [21]; Statement of William O'Neill at [18]

[57] In our view, Ms O'Neill's wish to obtain finance does not contradict our conclusion on the evidence that the purpose of the Transactions was to secure the proposed financial accommodation

[58] Statement of Matthew Bramhall at [21]; Statement of Jeff Brewer at [19]

[59] [2018] NSWSC 773

[60] [2019] NSWCA 75

[61] with whom Payne JA and Sackville AJA agreed

[62] [2019] NSWCA 75 at [25]- [26]

[63] Commissioner's opening submission dated 24 March 2023 at [84]

[64] Commissioner's closing submission dated 16 May 2023 at [15]-[19]

[65] Bond Projects Group Pty Ltd is a separate company from Bond Projects Group 1 Pty Ltd which applied to NAB for finance that led to the Transactions

[66] Commissioner's closing submissions dated 16 May 2023 at [25]-[26]

[72] Transcript of proceeding, 2 May 2023 at page 117, line 22 - page 121, line 29, page 125, line 39 - page 136, line 6 and page 140, lines 11-25

[73] Transcript of proceeding, 2 May 2023, page 133, lines1-7. See also Transcript of proceeding, 5 June 2023, page 242, line 42 - page 243, line 4

[74] Transcript of proceeding, 2 May 2023, page 132, lines 34-35

[75] Transcript of proceeding, 16 May 2023, page 210, line 42 - page 211, line 10

[76] Transcript of proceeding, 16 May 2023, page 208, lines 41-47

[77] Transcript of proceeding, 16 May 2023, page 227, lines 16-47

[78] Transcript of proceeding, 5 June 2023, page 264, lines 4-8

[79] Transcript of proceeding, 5 June 2023, page 268, lines 27-41

[80] Kimberley v Commissioner of ACT Revenue [2021] ACAT 101 at [52]- [54]

[81] [2018] NSWSC 773 at [2]- [9]

[82] [2019] NSWCA 75 at [22]

[83] Applicants' opening submissions dated 28 February 2023 at [67]

[84] [2015] NSWSC 68 at [53]