Plaintiff v Defendant

Plaintiff v Defendant - [2012] VSC 389 - VSC 2012 case summary — Zoe

[20]

Your Letter invites the Commissioner to be bound by any declaration made by the court in the proceeding and asks the Commissioner to appear as amicus curiae, to make submissions, and to cross-examine such witnesses as he wishes.

The Commissioner declines the Contradictor's invitation to participate in [this proceeding] as amicus curiae and does not agree to be bound by any declaration made by the court for the reasons set out below.

The Commissioner cannot resile from his position as previously outlined to Annacott and Konann in correspondence relating to previous proceedings: [the first and second proceedings].

The Commissioner cannot be involved in these proceedings in any capacity as he is of the view that the proceedings circumvent the Taxation Administration Act 1997 (TAA) and the SRO's taxation assessments and objections scheme as formulated by Parliament. It is clear from the scheme of the TAA that state taxation questions can only be determined by the mechanisms set out in Part 10 of the TAA (see in particular ss 96(2) and 127) and Part 4 of the TAA (see s18(1)). See eg Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 at 427 per Walsh J: '[T]he special procedures laid down by the statute should be allowed to take their course and should not be displaced by the making of declaratory orders concerning the respective rights of the parties under the statue.'

The Commissioner maintains the position confirmed by Pagone J on 28 October 2011 at directions of [the second proceeding], that the Commissioner should not be involved in any matter concerning private ownership of land and constructive trust issues as the Commissioner's role is that of a taxation collector.

Further, the Commissioner states that in the circumstances of this matter, any declaration that might affect the land as between Annacott and Konann cannot bind the Commissioner in the exercise of his function under the Duties Act 2000 given the clear ulterior motive of the parties in bringing this proceeding, that is, to 'directly affect the SRO and its administration of the Duties Act 2000' as advised by the solicitors acting for the parties. The practical utility of the declaration sought in this matter appears to be for state taxation purposes as can be inferred from the circumstances set out in your Letter (thus, your invitation). Accordingly, any issues regarding state taxation should be dealt with under the TAA regime not through declaratory relief of the court in this proceeding, as this would usurp or pre-empt the power vested in the Commissioner to administer state taxation laws including the making of assessments (see s 63 TAA).

[51]

36 Property passing to beneficiaries of fixed trusts

(1) No duty is chargeable under this Chapter in respect of a transfer of dutiable property that is subject to a fixed trust (the principal trust) to a beneficiary of the trust if -

(a) the duty (if any) charged by this Act in respect of the dutiable transaction that resulted in the dutiable property becoming subject to the principal trust has been paid or the Commissioner is satisfied that the duty will be paid; and

(b) the beneficiary was a beneficiary at the relevant time; and

(c) the transfer is -

(i) to the beneficiary absolutely; or

(ii) to the beneficiary as trustee of another trust all the beneficiaries of which are -

(A) natural persons who were beneficiaries of that other trust at the relevant time; or

(B) a corporation as trustee of a further trust all the beneficiaries of which are natural persons who were beneficiaries of that further trust at the relevant time; and

(d) the dutiable value of the property transferred does not exceed the value of the beneficiary's interest in the principal trust; and

(e) the Commissioner is satisfied that the transfer is not part of a sale or other arrangement under which there exists any consideration for the transfer.

(2) If a beneficiary would be entitled to an exemption from duty under subsection (1) but for subsection (1)(d), the beneficiary is entitled to a concession from duty in respect of so much of the dutiable value of the dutiable property that does not exceed the value of the beneficiary's interest in the principal trust.

(3) Nothing in this section limits the application of the exemption in section 34.

(4) A reference in this section to dutiable property becoming or first becoming subject to a trust includes a reference to property from which that dutiable property was derived, by subdivision or consolidation of titles, becoming or first becoming subject to the trust at a time when the transferee was a beneficiary of the trust.

(5) In this section -

fixed trust means a trust other than -

(a) a discretionary trust (within the meaning of section 36A); or

(b) a trust to which a unit trust scheme relates; or

(c) a superannuation fund (within the meaning of section 41A);

relevant time in relation to dutiable property that is subject to the principal trust, means the time at which the property first became subject to the principal trust.

At a glance

Court

Decision date

Before

Source

Judgment (147 paragraphs)

Parties

Legislation Cited (32)

Cases Cited (7)