1. As explained by Croft J in BPG Caulfield Village Pty Ltd v Commissioner of State Revenue ('BPG'), while stamp duty was originally a tax on instruments by which land was transferred, it is now more aptly described as primarily a tax on transactions involving the transfer of land in Victoria:[3] which are imposed under Chapter 2 of the Duties Act. However, duty also applies to a range of other transactions that are treated as transfers of land: these are imposed under Chapter 3.
2. The relevant provision in this case (i.e. section 82) is found in Part 2 of Chapter 3 which treats 'acquisition of interests in certain landholders' as transfers of land ('Landholder Regime'). The landholder entities to which the Landholder Regime applies includes private unit trust schemes[4] if the trust has landholdings in Victoria with a total unencumbered value of $1 million or more.[5] Under the regime, duty arises when a 'relevant acquisition' in a landholder is made.[6]
3. In BPG, Croft J described the Landholder Regime as imposing duty on three broad classes of relevant acquisitions,[7] being acquisitions of:
   • 'direct interests' in a landholder under sections 78 to 80;
   • 'synthetic interests'[8] in a landholder - being economic entitlements to participate in the dividends or income of a landholder or a right to participate in the income, rent, profits or proceeds of sale of its land - under section 81; and
   • 'control interests' in a landholder under section 82.
4. The focus of BPG was on synthetic interests said to have arisen under an agreement whereby the applicant taxpayer was to develop land owned by the Victorian Amateur Turf Club and participate in the proceeds of sale of that land. Croft J traced the history of the Landholder Regime, particularly the changes from the previous 'land rich regime',[9] noting that section 81 had been described in the Explanatory Memorandum to the Duties Amendment (Landholder) Bill 2012 ('2012 EM') as being anti-avoidance in nature and designed to impose duty where the 'economic benefit of the ownership of land is acquired ... other than by means of a relevant acquisition [of a direct interest]'.[10] Croft J concluded that:[11]

the intention was to extend the reach of the provisions to entitlements which, whilst falling short of an interest in a landholder for the purposes of s 78, nonetheless amounted to an equivalent interest in economic terms. Moreover, for the reasons which follow, I am of the view that this intention is also manifest in the words of the statute itself and not a matter to be divined solely from the extrinsic materials, such as the Explanatory Memorandum.

1. Later in his reasons, Croft J observed that the structure of Part 2 of Chapter 3:[12]

[is] directed to substance with respect to transactions, as is evident by the very provisions of s 81, which focus on economic outcomes, rather than the nature of transactions or the structures of the entities to which they relate. Finally, it is clear, in my view, for the preceding reasons, that the legislature did not intend to create a new head of liability to duty in the enactment of s 81.

1. While section 82 was 'of no relevance' in BPG,[13] as will be seen, Mr Tao contends that the views expressed by Croft J as to the purpose and limits of section 81 should also apply to the interpretation of section 82.
2. Turning to the terms of section 82, it provides:

(1) Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a private landholder, other than by a relevant acquisition dutiable under this Part, then, on the acquiring of that control, the person is taken, for the purposes of this Part, to have made a relevant acquisition in the landholder of -

(a) 100%; or

(b) a lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(2) For the purposes of subsection (1), a person acquires control over a private landholder if the person acquires the capacity to determine or influence the outcome of decisions about the private landholder's financial and operating policies, taking into account -

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the private landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(3) Subsection (1) applies regardless of interests or economic entitlements held by any other person in the private landholder.

1. Section 82 (like section 81) is a 'deeming provision' in the sense that a person to whom it applies is 'taken, for the purposes of this Part, to have made a relevant acquisition'. Where it is engaged, duty is then charged under section 86:

at the rate specified under this Act [i.e. in Chapter 2] for a transfer of dutiable property [i.e. 5.5%] on the amount calculated by multiplying the unencumbered value of all land holdings of the landholder in Victoria ... by the proportion of that value represented by the interest acquired in the relevant acquisition.

1. The parties have been unable to identify any prior decisions of either the Supreme Court or VCAT considering the interpretation or operation of section 82 (and the Tribunal has been unable to identify any such decisions).

1. The following background is drawn from Mr Tao's submissions and supplemented by the uncontentious aspects of the evidence given by the relevant parties.

Establishment of the WCT Unit Trust and its financing of the acquisition of the Relevant Property in 2011

1. In 2011, Mr Constantinou -an experienced property developer[14] - travelled to China with Mr Tao and met with Mr Wilfred Wiemer (a German national who lives in China)[15] to discuss the potential of the parties engaging in a joint venture to conduct property development in Melbourne.

(While there was no direct evidence from Mr Tao or Mr Wiemer on this point, based on an email sent by Mr Tao to Bendigo Bank it appears Mr Wiemer may be the brother-in-law of Mr Tao.[16])

1. The parties agreed to establish a special purpose vehicle to carry on the property developments and, on (or about) 18 March 2011:
   • 66WR Pty Ltd was incorporated, with Mr Constantinou as its sole shareholder, director and secretary;[17]
   • 66WR Pty Ltd entered into a deed (with a third party as settlor) to establish the WCT Unit Trust ('Trust Deed');[18]
   • units in the WCT Unit Trust were issued at a price of $1 per unit as follows:[19]
     • - 50 units:[20] Maclaw No. 547 Pty Ltd ('Maclaw547') as trustee for The Mountain Highway Unit Trust;
     • - 25 units: Fredco Incorporated Limited ('Fredco') as trustee for Nomsec No. 1 Limited; and
     • - 25 units: Amber.
2. As already noted, Amber is an entity associated with Mr Tao. Maclaw547 and Fredco are (or were[21]) entities associated with Mr Constantinou and Mr Wiemer respectively.[22]
3. On 21 April 2011, 66WR Pty Ltd (in its capacity as trustee of the WCT Unit Trust) entered a contract to purchase the Relevant Property for $2.7 million, taking possession on 10 February 2012.[23]

(For context, this was the company's second project, as there was also an investment in the namesake property at 66 Williams Road (suburb unknown) at the time, which had been funded by a loan from the Bank of Queensland.[24])

1. In order to fund the purchase of the Relevant Property, meet the development costs and the capitalisation of interest for 12 months, 66WR Pty Ltd entered an agreement to borrow $2.79 million from Southern Finance Limited ('Southern Finance').[25] The security for the loan was a first registered mortgage over the Relevant Property,[26] a fixed and floating charge over the assets of 66WR Pty Ltd[27] and a personal guarantee from Mr Constantinou as director. However, to ensure that the loan did not exceed 70% of the value of the Relevant Property, the maximum amount that could be drawn down initially was $1.7 million. The balance of the purchase price (and associated costs, e.g. stamp duty) was funded by loans from Mr Tao and Mr Wiemer: in this regard, the accounts of the WCT Unit Trust as at 30 June 2012 record loans from Mr Tao of $581,666 and Mr Wiemer of $595,966.[28]
2. A projection prepared by CNK Urban Project Pty Ltd (a company owned by Mr Constantinou) suggested that the developed lots would be sold for a total sum in the order of $5 million, with a net development profit of around $716,000.[29]

Circumstances leading to change of ownership and directorship of 66WR Pty Ltd in February to March 2014

1. In March 2013, the loan and the securities were transferred from Southern Finance to Bendigo and Adelaide Bank Limited ('Bendigo Bank').[30]
2. By July 2013, it appears that the loan was in arrears (of around $137,000) and Bendigo Bank was 'seeking to exit this loan and ... to be repaid via the sale of the asset or refinance' and was 'not keen on providing development funding for the construction phase'.[31] At that time, Mr Tao and Mr Constantinou met with the bank and Mr Tao was seeking 'an extension of [the loan for] 6 months on the basis he could assist in making ongoing interest payments', with a 'vision ... that the time extension would allow him to undertake due diligence and look at raising equity or debt to ... acquire the land / payout the Bank and undertake the construction phase'.[32]
3. There were also problems with the loan from Bank of Queensland for the 66 Williams Road property, with that bank appointing a receiver/manager to 66WR Pty Ltd in June 2013.[33]
4. Compounding the financial issues, a receiver/manager was also appointed to Maclaw547 in June 2013.[34]
5. In late 2013, Mr Wiemer travelled to Australia and he and Mr Tao arranged for an accountant to conduct an 'informal audit of [66WR Pty Ltd's] finances', with the accountant forming the view that Mr Constantinou 'had mixed the funds (including bank loans) belonging to the WCT's two projects with his private project funds', which caused the financial situation to be 'very confusing'.[35] Further, the accountant found that there had been interest payment defaults by Mr Constantinou in respect of his personal project and the properties in the WCT Unit Trust, which created a 'risk of the land being [sold] by the bank and [exposure to Mr Constantinou's] personal bankruptcy'.[36]
6. Shortly thereafter, a meeting of the parties was arranged where Mr Constantinou was questioned 'about his [alleged] serious mismanagement as the Director of [66WR Pty Ltd]'.[37] Mr Wiemer proposed that Mr Tao replace Mr Constantinou as the director of 66WR Pty Ltd, but without change to the ownership of the WCT Unit Trust.[38] Mr Constantinou and/or Bendigo Bank had also proposed the same thing.[39]
7. As already noted, Mr Tao acquired the shares in 66WR Pty Ltd on 11 February 2014[40] and became the sole director and secretary of the company on 6 March 2014.[41]

Attempts to refinance between March 2014 and March 2015

1. The next day, Mr Tao and Mr Constantinou met with Bendigo Bank to 'discuss the way forward for [66WR Pty Ltd]'.[42] The manager indicated that Bendigo Bank would be prepared to discharge the mortgage for a discounted sum of $3 million (as compared to the amount then owing of approximately $3.15 million) subject to receiving that amount within a 'short time frame'.
2. At this time, it appears Mr Tao was approaching a state owned company in China ('Chinese SOC') to repay the debt as a lump sum by 30 June 2014.[43] In order to agree to Mr Tao's proposal to extend the duration of the loan, Bendigo Bank wanted a reduction in the debt of $400,000 by the end of March.[44] However, Mr Tao indicated that because of the Chinese SOC having a 'government background', the 'procedure and time-frame is almost the same for either $400,000 or $3,000,000'.[45] Subsequently, Mr Tao indicated that there also would be a 'need to apply' for foreign exchange approvals to get the money from China to Australia[46] and sought until the end of April 2014 to pay the sum of $400,000.[47]
3. On 8 April 2014, Bendigo Bank wrote to Mr Tao to indicate that a formal demand for repayment would be issued the next day and that if they did not receive $400,000 by 8 May 2014 and $2.6 million by 30 June 2014, Bendigo Bank 'reserve[d] its rights to proceed with legal action against [66WR Pty Ltd]'.[48]
4. On 6 May 2014, Mr Tao wrote to Bendigo Bank to advise that the 'foreign exchange regulator' had rejected his application to transfer $400,000 to the bank from his own account and asked for an extension of time to get approval for the funds to be transferred by the Chinese SOC.[49]
5. On 23 May 2014, Mr Tao again emailed Bendigo Bank to indicate that, after discussions with his brother-in-law (probably Mr Wiemer: see [19]), he had '3 plans to deal with this loan problem'.[50] The first option was for the Chinese SOC to repay the debt by 30 June 2014, but noting that they did 'not have the ability to control this decision on [their] own'. The second option was for them to 'take this project' on themselves, although noting that they would 'need some time to make sure if we can pay you off all those $2.6 million by 30/06/2014 and still have enough funds to [commence] construction'. The third option was to proceed with rapid sales of the 29 lots.
6. Bendigo Bank replied advising that the first option was the 'preferred option', the second option was 'also appealing [provided] it can be achieved within the 30-6-2014 timeframe' and that the third option is 'the least appealing' (and would involve changes to the interest rate on the loan and with no discount of the amount outstanding).[51]
7. Despite Bendigo Bank's reluctance, it appears that Mr Tao proceeded to implement the third option.[52]
8. However, by March 2015, Bendigo Bank had become fed up with the delays in the settling of lot sales, alleging that Mr Tao's 'various advices to the Bank have been misleading, and they [had] caused further delays and costs to be incurred', noting that as 'sole Director and Shareholder [of 66WR Pty Ltd] ... it [was Mr Tao's] responsibility to ensure the information provided to the Bank is correct'.[53] As a result, the manager indicated that the matter would be referred to Bendigo Bank's lawyers 'to continue the enforcement action required to recover the amounts owed to the Bank'. Mr Constatinou was copied into that correspondence 'in his capacity as Guarantor of debts in the name of [66WR] Pty Ltd'.

Bendigo Bank's sale of the Relevant Property and winding up of 66WR Pty Ltd between April 2015 and October 2019

1. Mr Bruno Secatore and Mr Daniel Juratowitch (of Cor Cordis) were appointed as controllers of 66WR Pty Ltd on 20 April 2015,[54] presumably by Bendigo Bank.
2. A sale of the Relevant Property was then arranged on behalf of Bendigo Bank, as mortgagee in possession, to a third party for $3.3 million (plus GST), with the sale completing on 16 October 2015.[55] Most of the sale proceeds were used to repay the Bendigo Bank loan (by then, approximately $2.9 million), with only $331,726.92 paid to 66WR Pty Ltd.[56]
3. There is no evidence before VCAT as to how the latter sum was disbursed, although it seems likely that it would have been used to pay the controller's costs (and perhaps some third party debts). This is consistent with:
   • Mr Constantinou's witness statement that indicates the 'unitholders did not receive any monies from the sale of [the Relevant Property and 66 Williams Road property]'.[57]
   • Mr Tao's witness statement indicating that the amounts that he and Mr Wiemer 'invested' (being a reference to the loans from them to the WCT Unit Trust of $581,666 and $595,966 as at 30 June 2014) 'were never repaid or recovered'.[58]

(For completeness, while Mr Wiemer suggests in his witness statement that Mr Constantinou had to make up some shortfall under his personal guarantee,[59] there is no document which verifies that and it is not mentioned in Mr Constantinou's statement.)

1. On 27 January 2016, Mr Andrew Beck of RSM Australia was appointed by the Supreme Court of Victoria as the liquidator of 66WR Pty Ltd and the company was finally deregistered on 20 October 2019.[60]

1. There is a considerable volume of documentary evidence before the Tribunal, with the relevant parts of the Tribunal Book (excluding the submissions and Tribunal orders) running to around 1000 pages. This supports the background as outlined in the preceding section.
2. In addition, each of Mr Tao, Mr Constantinou, Mr Wiemer and Ms Xue (Calico) Li (the accountant who prepared Mr Tao's objection to the Assessment) gave evidence before the Tribunal, confirming their witness statements and responding to questions asked in cross-examination. Below I set out a brief summary of the evidence given by each witness in cross-examination.

1. In cross-examination, Mr Tao accepted that he was aware of his duties and responsibilities as a director. In response to a question about ensuring that, as a director, he had 'good visibility over the company's finances', Mr Tao indicated that he understood 66WR Pty Ltd was his company and that he 'wanted to save the project' and believed that he could 'borrow more money' to achieve this.
2. Later Mr Tao explained that his role as director of 66WR Pty Ltd included 'many jobs', including selling land (sometimes as individual lots and other times as a 'land package' with a townhouse), although 'at the time, the main problem [was] finance: [WCT Unit Trust] needed more money' and his 'major work was to get finance'. He explained that, in order to achieve that objective, he needed Bendigo Bank 'to have more confidence to prevent a sale of [the] project'.
3. Mr Tao also:
   • agreed he had explained to Bendigo Bank that he was responsible for negotiating the refinancing of the development project;
   • accepted that, as a director of 66WR Pty Ltd, he needed to make decisions about how to manage the property of the WCT Unit Trust;
   • admitted that, under clauses 35(a) and 39(a) of the Trust Deed,[61] 66WR Pty Ltd (as trustee) had an 'absolute discretion' as to the investment of the trust fund and dealings with assets forming part of the fund, as well as in the exercise of any powers under the Trust Deed. However, he went on to explain that, given his 'limited experience as a trustee', he would always speak or discuss matters with Mr Constantinou and Mr Wiemer and that their 'core intention or goal [was] to make the project successful';
   • suggested that his appointment as sole director was not only about his and Mr Wiemar's concerns as to Mr Constantinou's prior financial management of the WCT Unit Trust, but also:
     • - to enable him to 'monitor' the trust finances (or 'make the money more clear'); and
     • - because it was thought this would make it easier to refinance or extend the loan.

Mr Tao went on to add that Mr Constantinou had done 'a lot of work for the company' and Mr Tao 'did not want to upset or offend him' as they 'need[ed] his ability for any development' given Mr Constantinou was 'more experienced' in this regard; and

• agreed that it was up to him as to whether 66WR Pty Ltd accepted the prices which had been negotiated by Mr Constantinou for lots which had been pre-sold (i.e. prior to development), although he explained that he had discussed the matter with Mr Constantinou before deciding to seek to increase the prices to reflect increases in the value of the land since those contracts had been signed.

1. In response to a question from me about an email referencing stamp duty advice concerning his acquisition of the shares in 66WR Pty Ltd,[62] Mr Tao confirmed that he had spoken to a solicitor, [63] but there had been a misunderstanding as he believed no duty applied provided the net assets of the company were below $1 million (as opposed to its landholdings having to be less than $1 million).

1. Under cross-examination, Mr Constantinou accepted that he had a 'basic knowledge' of his duties and obligations when he was the sole director of 66WR Pty Ltd and that, at the time, he was 'primarily responsible for the strategic decisions' it made. However, he explained it was a 'bit different' in this case because there were multiple unit-holders, noting that Mr Tao was also involved.
2. Similarly, while he accepted that 'technically as a director' Mr Tao was responsible for the strategic decisions of 66WR Pty Ltd from February 2014, Mr Constantinou explained he was 'still involved as he was a guarantor to the loans' and, as such, was 'involved in negotiations with the banks'.
3. Mr Constantinou was also asked about his view on Mr Wiemer's witness statement concerning the inappropriate mixing of funds. While he had not conducted any analysis of his own, he said he could not agree. However, he accepted that he had been 'accused' by Mr Tao and/or Mr Wiemer of serious mismanagement in late 2013, despite holding 'a different opinion'.
4. In response to a question from me, Mr Constantinou observed that, from the time that the receiver and manager was appointed to Maclaw547 in June 2013, he 'had to take a back seat' so far as its investment in the WCT Unit Trust was concerned.

1. In cross-examination, Mr Wiemer accepted that Mr Constantinou was managing the affairs of the WCT Unit Trust from the time of its formation until February 2014, but that he was not happy with Mr Constantinou's management from late 2013. He added that the reason he was not happy was he felt Mr Constantinou had been 'untruthful to [him and Mr Tao]'.
2. He accepted that Mr Tao took over the management of WCT Trust from February 2014, but qualified this to say it was 'only money things, nothing else'. He also confirmed that he had kept in close contact with Mr Tao as he was 'very worried about the whole thing'.

1. In cross-examination, Ms Li - an accountant - confirmed that she prepared Mr Tao's objection to the Assessment dated 26 July 2019,[64] which was based on the notes of a meeting between Mr Tao and one of the partners in her firm, as well as her further discussions or WeChat exchanges with Mr Tao.
2. Ms Li accepted that the objection would have reflected Mr Tao's instructions, including the comment that (because Mr Tao had lent 'a lot of money' to the WCT Unit Trust) he 'had to request to fully control the financials of the unit trust by taking over the directorship and ownership of the trustee company'. This concession in cross-examination is inconsistent with her further witness statement where she suggested that she had not received instructions to that effect and instead 'intended to state that Mr Tao wanted to manage [the] project and be the front director in order to give the company a greater chance of obtaining refinance'.[65]
3. In response to a question from me, Ms Li confirmed that the partner of her firm would have seen the objection before it was sent and, while she could not specifically recall, she 'might have' also sent the draft to Mr Tao as she 'usually will' (seek client approval).

Did Mr Tao obtain control of the WCT Unit Trust when he acquired the shares in and became the sole director of 66WR Pty Ltd?

1. The essential submission put by Mr McNaught, counsel for Mr Tao, in closing is that while Mr Tao had the 'day to day management' of 66WR Pty Ltd (and therefore the WCT Unit Trust) from the time of his appointment as its sole director, this was simply fulfilling the 'big P' policy (or significant decisions) set by the unit-holders of the WCT Unit Trust at the outset, namely the development of the Relevant Property and sale of the resultant lots.
2. While it was 'not controversial' that Mr Tao was 'responsible' for negotiating the refinancing of the loan from Bendigo Bank (albeit unsuccessful) and trying to sell lots, Mr McNaught characterised this as 'small p' policy, with Mr Tao's role being to 'carry on the existing plan' (albeit thwarted when the 'bank lost patience and undertook a mortgage sale').
3. Further, given Mr Constantinou was involved in those negotiations and Mr Tao regularly consulted with Mr Wiemer in this regard, Mr Tao submits he did not have control of WCT Unit Trust's financial and operating policies as required to engage section 82.
4. In putting forward these propositions, Mr McNaught pointed to a number of provisions of the Trust Deed which he contended set out the rights or powers of the unit holders to control the WCT Unit Trust.[66] For instance, he observed that:
   • clause 8, which prevents the issue of any additional units without the consent of the unit holders, was significant because it prevents the dilution of the beneficial interest of the existing unit holders;
   • in clause 24, no discretion is given to 66WR Pty Ltd as to the distribution of the income of the trust: rather, 'distributions are to be proportional to the number of units held';
   • clause 25 provided that the capital of the trust was to be distributed in the same way and also required a resolution of 75% of unit holders (by number) to authorise such a distribution; and
   • ultimately, under clause 30, the unit holders could remove 66WR Pty Ltd as trustee (or appoint an additional trustee) by resolution of the holders of 75% of the units. As Mr Constantinou and Mr Wiemer held 75 out of the 100 units on issue, they 'had the numbers to remove' 66WR Pty Ltd (and hence any control by Mr Tao).
5. Mr McNaught also referred to the Supreme Court decision in Amcor Ltd & Ors v Barnes & Ors ('Amcor')[67] which examined a similar test as to control found in section 50AA of the Corporations Act 2001 (Cth) (that had been adopted in contractual arrangements between the parties).
6. In that decision, Sloss J noted that the definition of control used in section 50AA had its 'origin in Accounting Standard 1024: Consolidated Accounts' and, in that context, had been defined as 'the capacity of an entity to dominate decision making ... in relation to the financial and operating policies of another entity'.[68] Her honour went on to observe that there was 'little in the way of case law that informs the meaning of section 50AA', suggesting that 'perhaps the most helpful' was Hancock v Rinehart ('Hancock').[69]
7. In Hancock, Brereton J had observed that '[i]n the context of a company, [control] ordinarily means the ability to carry a resolution by majority at the general meeting - and thus to determine the composition of the board of directors'.[70] However, after noting that there may be 'circumstances in which those who have the ability to carry a resolution may become bound to act on the direction of another', His honour noted that the control requirement is:[71]

directed to the ultimate power to decide how an entity acts, as distinct from beneficial ownership, and also as distinct from the delegated power of directors or officers. Although typically those who wholly own a company will control it, that is not necessarily so: it is not unknown for those entitled to exercise voting power to become bound or accustomed to exercise their voting rights in accordance with the direction of another ...

1. Returning to the decision in Amcor, Sloss J went on to note the submissions of the plaintiffs that the reference in section 50AA to 'financial and operating policies' was 'a reference to small 'p' policies, not capital 'P' policies'.[72] Her honour concluded:[73]

one does not discern or ascertain whether there is a change of control by simply looking at the number of shares held at any particular time, or to strict legal rights, or to the rights of directors etc. Rather one must look to see whether the entity has the capacity, in a real and practical sense, to determine the important decisions of the company that set the framework for the operation of the business, in meeting its legal and regulatory obligations and in achieving its financial and other corporate objectives, as distinct from the day to day decisions made within that framework.

1. Mr McNaught contended that the intention of Mr Tao (i.e. in acquiring the shares in and becoming the sole director of 66WR Pty Ltd) was 'irrelevant' and, further, that the reference to the capacity to determine or influence the 'outcome of decisions' in relation to financial and operating policies 'raises the bar' which was not satisfied in circumstances where the unitholders could remove 66WR Pty Ltd as trustee if Mr Tao undertook a course of action they did not agree with.

1. In closing, Ms O'Gorman (senior counsel for the Commissioner) observed that the Commissioner did 'not doubt that Mr Tao showed appropriate respect to the other unit holders and consulted with them when appropriate'. However, the Commissioner contended that Mr Tao obtained control in the relevant sense in February/March 2014 because:

(a) when he acquired the shares in 66WR Pty Ltd and became its sole director, he 'acquired not just the capacity, but the practical ability, to determine or influence [WCT Unit Trust's] financial and operating policies';

(b) he 'did not have the capacity to determine' those matters before he became a director; and

(c) the Tribunal could comfortably draw the necessary link between Mr Tao's 'control of the trustee company and the trust's policies'.

1. In relation to [68(a)], Ms O'Gorman submitted that Mr Tao had 'effectively accepted' the point in cross-examination. Further, on becoming the sole director and shareholder of 66WR Pty Ltd, Mr Tao 'necessarily had capacity to determine the trust's decisions' and, as acknowledged by a number of the witnesses, Mr Tao was 'responsible for the refinancing' of the loan which the Commissioner submitted was 'determinative of the question'.
2. In relation to [68(b)], Ms O'Gorman noted the evidence of Mr Constantinou to the effect that when he was the director 66WR Pty Ltd, he would consult with Mr Tao. She submitted that this was evidence that Mr Tao had 'influence' about the financial and operating policies of the trust, but his 'ability to determine those matters was only from the time he became director and shareholder of the trustee'. This was said to be evidenced by Mr Tao's communications with Bendigo Bank from March 2014 suggesting that he had taken charge of the company, and confirmed in Mr Wiemer's witness statement where he states that:[74]

[s]ince [Mr Tao] became the Director of the Trustee of WCT [Unit Trust], he has continued [Mr Constantinou's] unfinished work on the Lynbrook project such as: land subdivision, pre-sale and loan co-ordination with Bendigo Bank.

1. Ms O'Gorman also referred to Mr Constantinou's evidence to the effect that Mr Tao was 'responsible for the strategic direction' of the WCT Unit Trust from February 2014, submitting that Mr Constantinou's continued involvement was 'by way of Mr Tao's respectful dialogue'.
2. In relation to [68(c)], Ms O'Gorman submitted that the Tribunal could 'comfortably' draw a link between Mr Tao's control of 66WR Pty Ltd and control of the financial and operating policies of the WCT Unit Trust by reference to the absolute discretions conferred on the trustee under clauses 35(a) and 39(a) of the Trust Deed.
3. Lastly, Ms O'Gorman submitted that the ability of the unit holders to remove 66WR Pty Ltd as the trustee of the WCT Unit Trust (i.e. under clause 30 of the Trust Deed) was 'not relevant' because the only relevant question was what control was held by Mr Tao when he was a director of 66WR Pty Ltd (rather than what might be the case if and when that company were removed as trustee).

1. While I accept that the concept of control over 'financial and operating policies' envisaged by section 82 of the Duties Act is focused on the strategic direction of a landholder, as opposed to its day to day management, I consider that Mr Tao controlled the strategic direction of the WCT Unit Trust between March 2014 (when he was appointed as the sole director of its trustee, i.e. 66WR Pty Ltd) and April 2015 (when the bank appointed controllers to the trustee company).
2. As Mr Tao indicated in his evidence (see [47]), finance was the 'main problem' for the WCT Unit Trust from March 2014 and his 'major work was to get finance'. Indeed, if anything, his evidence downplays the trust's dire financial situation at the time. Bendigo Bank's wish to bring the loan to conclusion (see [26]) represented an existential threat to the WCT Unit Trust because, if Mr Tao could not convince Bendigo Bank to extend the existing loan facility while he pursued the attempts to refinance (via the Chinese SOC) and/or to realise land sales, the whole project would fail. The inevitable result would be that the financial investment that he and Mr Wiemer had made, almost entirely by way of loans to the WCT Unit Trust, would be lost.
3. Ultimately, that happened when Bendigo Bank lost its patience in March 2015.
4. I accept that, throughout that period, Mr Tao continued to consult with:
   • Mr Constantinou as to the development of the lots and, to some extent, as to the refinancing (particularly given Mr Constantinou remained a guarantor); and
   • Mr Wiemer as to options for refinancing the WCT Unit Trust.
5. To that extent, they continued to exercise some 'influence' as to those matters. Nevertheless, as properly accepted by Mr Tao (see [48]), and made clear in Bendigo Bank's final email (see [39]), Mr Tao was responsible for making strategic decisions concerning the WCT Unit Trust (e.g. as to the loan) as the sole director and shareholder of 66WR Pty Ltd.
6. While, between them, the two other unit holders in the WCT Unit Trust could have used the power in clause 30 of the Trust Deed to remove 66WR Pty Ltd as trustee of the WCT Unit Trust and brought any control exercised by Mr Tao to an end, the fact is that they never did so. Moreover, at a practical level, Mr Constantinou had already lost control of Maclaw547 by the time that Mr Tao became the sole director of the company (see [53]) and, as such, Mr Constantinou was not even in a position to exercise any voting power held by his company.

(For completeness, there is no evidence to suggest that the receiver and manager that had been appointed to Maclaw547 would have been willing to join with Mr Wiemer to bring about a change in trustee even if Mr Wiemer had sought to do so despite proposing him in the first place (see [30]) and any family relationship (see [19]).)

1. For these reasons, I find that on or about 6 March 2014, Mr Tao acquired the capacity to determine or influence the outcome of decisions about the WCT Unit Trust's financial and operating policies.

Can section 82 be engaged in the absence of Mr Tao acquiring any interest in the WCT Unit Trust equivalent to a beneficial interest?

1. In closing, Mr McNaught contended that, in issuing the Assessment, the Commissioner has 'sought to make dutiable a transfer that did not give rise to a legal or beneficial interest in a landholder' (i.e. at no stage did Mr Tao obtain any (or Amber increase its) unit-holding in the WCT Unit Trust). He suggested this was contrary to the purpose of the Landholder Regime as explained by the then Treasurer (the Hon. John Brumby):[75]

the rules for calculating the duty on high-value property transactions conducted through private companies and trusts are to be revised in light of current business practices, which have the effect of reducing taxation liabilities ...

The fundamental basis of stamp duty is that changes in beneficial ownership in land, however achieved, are subject to a conveyance duty. For reasons of equity and revenue protection, it is essential that duties are applied equitably and effectively.

1. Mr McNaught submitted that, consistent with section 35 of the Interpretation of Legislation Act 1984 (Vic), a construction of section 82 of the Duties Act that promotes that purpose is to be preferred. He contended that the section contemplates circumstances where control of a company is ceded to a person and confers a beneficial interest or equivalent on that person. Adopting the position and approach described in BPG¸ he contended:
   • there is 'no warrant for treating a [control interest] as being more readily dutiable than a direct interest', rather '[i]n each case ... a 50 per cent or greater interest in the whole of the landowner ... is needed';[76] and
   • section 82, like section 81, is 'anti-avoidance in nature and intended to fill a "gap" in the machinery of ss 78 and 79 of the [Duties Act]' and 'not ... to create a new head of liability'.[77]
2. Mr McNaught contended that, if section 82 was 'read in isolation, it creates what the legislature did not intend', i.e. a new head of liability. To prevent an 'absurd' outcome and ensure that section 82 simply fills the gap left by sections 78 and 79, a control interest 'must have some equivalence to a beneficial interest' for duty to apply. He pointed to two examples on the State Revenue Office ('SRO') website that illustrate the kind of equivalent beneficial interests contemplated, being:[78]
   • rights obtained by a minority shareholder under an unlimited and irrevocable power of attorney granted by a majority shareholder; and
   • the acquisition of control of a unit trust scheme via the acquisition of six companies that each hold less than 20% of that unit trust (but collectively hold 100%).
3. On the same webpage, the SRO indicates that:[79]

The provisions can also apply to a person who is appointed to the board of directors of a landholder (or the corporate trustee of a landholder). Provided the shareholders or unit holders have not made arrangements that allow the director to benefit, or exercise rights which confer benefits similar to holding an interest in the landholder, the Commissioner will take the view that the director has not acquired control (and made a relevant acquisition of an interest of 100%) as a result of such an appointment.

1. Mr McNaught contended that, in the present case, Mr Tao 'did not acquire any benefit or ability to exercise rights as a landholder' when he became the sole shareholder and director of 66WR Pty Ltd.

1. Ms O'Gorman contended that Mr Tao's submissions amount to not much more than a complaint as to the 'unfairness of taxing him in the way the legislation provides'. She went on to point to the observations of the majority of the High Court in Taylor v The Owners - Strata Plan No 11564 ('Taylor') that construing legislation as containing additional words 'involves a judgment of matters of degree', with the question:[80]

readily answered in favour of addition ... in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision [but] ... answered against a construction that fills "gaps disclosed in legislation" or [which] makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".

1. In this case, so Ms O'Gorman contended, the construction for which Mr Tao contends is not a case of 'simple grammatical error', with the identified gap being 'enormous and not capable of coherent explanation'. Noting that the current case does not fit within the examples given on the SRO website, she suggested that a test requiring an interest to be acquired which is equivalent to a beneficial interest would raise a number of questions that Mr Tao was unable to answer, such as:
   • how the relevant equivalent interest was to be measured;
   • how much of an interest might be sufficient to enliven the provision;
   • whether any interest should be assessed relative to the interests of others (and, if so, would this be limited to unit holders or extend to creditors); and
   • if it depends on some kind of 'arrangement' between unit holders, what kind of arrangement would suffice (noting that arrangement is a defined term in the Duties Act).
2. Ms O'Gorman submitted that these difficulties were 'critical to the defeat of Mr Tao's construction', asking rhetorically 'what words in section 82 leave room for an equivalence test'?
3. Turning to the context of the Duties Act, Ms O'Gorman observed that section 82 is expressed to only apply where control over a landholder is acquired 'other than by a relevant acquisition dutiable under this Part', i.e. under sections 78 and 81. Accordingly, there is 'no textual or structural basis to link section 82 to [the direct or synthetic interests identified in] sections 78 or 81'.
4. As for the SRO website, Ms O'Gorman noted that the circumstances in this case are distinguishable from the examples and, in any event, there is no estoppel against the Commissioner.[81] Further (while it is 'not necessary to descend into analysis of any benefit') she suggested there was evidence of 'nuanced ways' in which Mr Tao would benefit given:
   • He was the 'only human who could act' for 66WR Pty Ltd (and the WCT Trust) as its only director and in circumstances where the company had no employees.
   • The 'commercial' (and 'sensible') reasons for Mr Tao to obtain control, namely to monitor the finances of the WCT Trust which were 'amplified' given Mr Tao was 'also a lender to the trustee'.

1. The process of statutory interpretation requires the text of a provision to be considered in light of its context and purpose and has been accepted as being applicable to state tax legislation.[82]
2. Starting with the text, on its face, section 82 of the Duties Act applies to any situation where control of a landholder is obtained. While the provision may have been modelled on the test of control in section 50AA of the Corporations Act 2001 (Cth), the application of the test is necessarily broader because the notion of a 'private landholder' extends to private unit trusts as well as private companies.
3. Companies are legal entities, the control of which is ordinarily vested in its board of directors. By contrast, trusts are not legal entities and, subject to other arrangements (e.g. any agreement between unitholders of a unit trust), control of a trust is normally vested in the trustee (notwithstanding that the trustee owes fiduciary obligations to the unit holders as beneficiaries of the trust).
4. If the legislature had intended to entirely carve out changes in control of a corporate trustee of a private unit trust scheme from the scope of section 82, it would have been relatively simple for the legislature to have done so (e.g. by limiting the application of section 82 to landholders that are private companies).
5. Returning to the text, on its face, it simply refers to control and does not require any other beneficial, synthetic or other 'equivalent' interest to be held by the person to whom it applies.
6. Turning to the context, it is important to recognise that section 82 only applies where there is no relevant acquisition under sections 79 (i.e. of a direct or beneficial interest in a trust) or 81 (i.e. of a synthetic or economic interest in a trust). This, of itself, suggests that section 82 is not intended to be linked to any beneficial or synthetic interest in the trust.
7. Further, section 82 does not contain any mechanism to determine the extent of the interest in the trust taken to have been acquired (whether beneficial, synthetic or equivalent), but rather defaults to a prima facie relevant acquisition of a 100% interest.[83] This may be contrasted with the ability to quantify the exact extent of any interest taxable under:
   • section 79, where the extent of the interest is identified by reference to a person's entitlements to distributions (other than as a creditor) on a winding up;[84] and
   • section 81, where the extent of the interest is identified by reference to a person's entitlements (not excluding those of a creditor) from units or an arrangement by which they participate in dividends or income of the landholder, its income rent or profits, capital growth or the sale of its landholdings.[85]
8. Another important aspect of the context is the provision in both sections 81 and 82 for a reduction in the extent of the 'relevant acquisition' where the Commissioner determines that to be 'appropriate in the circumstances'.[86] As contended for Mr Tao in relation to Ground 3, this recognises it may be inappropriate to levy duty on the entirety of the prima facie relevant acquisition if a person has a pre-existing direct or synthetic interest. Again, this rather suggests that control is not directly linked to the holding of such interests.
9. Turning to purpose, I accept that section 82 is part of the Landholder Regime which was (at least originally) conceived of as an anti-avoidance measure to ensure that indirect changes of beneficial ownership of land could not be used to avoid duty.
10. However, unlike the synthetic interest rule in section 81 which was first introduced as part of the Landholder Regime, there was an equivalent of section 82 dealing with control interests under the previous land rich regime.[87] That historical context is an indicator that:
    • the purpose of section 82 differs from section 81, i.e. it is concerned with something other than the economic entitlements to which the latter relates; and
    • some caution needs to be exercised in applying the interpretative approach accepted in BPG in the context of section 82.
11. It is true that, in the explanatory memorandum which first introduced the control test in the context of the land rich rules ('2004 EM'), there was reference to:[88]

[the] holders of interests usually ced[ing] control to [a] person and mak[ing] such arrangements in respect of their interests that may allow the person to benefit or exercise rights which could confer benefits similar to holding an interest.

1. I also accept that section 35(1) exempts a transfer of land from duty under Chapter 2 where it involves a change in trustee of a trust without any change in beneficial ownership of the land held by the trustee. In that context, it may seem incongruous that duty is imposed under section 82 on a change in the control of a trustee that is not also accompanied by a change in the beneficial ownership of the land held by that trustee.
2. However, three things can be said in the latter regard:
   • First, had it been sufficient for Mr Tao to achieve his objectives, he could have made arrangements to set up his own company to become trustee in place of 66WR Pty Ltd and then organise for 66WR Pty Ltd to transfer the land to the new trustee company (and claim the exemption in section 35). That he did not do so suggests that the alternative would not have met his needs.
   • Second, by March 2014, the financial position of the WCT Unit Trust was (extremely) dire. It seems to me that any steps to extend the loan or refinance in order to complete the development project was only likely to benefit Mr Tao and/or Mr Wiemer as (unsecured) creditors of the trust. In my view, it was unrealistic to expect that, even if the development had been completed, there would have been sufficient net proceeds from lot sales to:
     • - repay Bendigo Bank (or any substitute lender);
     • - repay Mr Tao and Mr Wiemer (who were collectively owed more than $1 million); and
     • - provide a return to the unit holders (who had, in any event, only invested a nominal sum for their units).
   • Third, I accept the Commissioner's submission that, if any such incongruity reveals a gap in the legislation, the words required to be read in to the provision to address that gap would be enormous and, in light of the view of the majority of the High Court in Taylor, goes well beyond what can be achieved through an exercise of statutory interpretation.
3. For these reasons, I consider it is not necessary that Mr Tao also obtained an interest equivalent to a beneficial interest in the WCT Unit Trust for section 82 to be engaged.

Should leave be granted to the applicant to raise Ground 3?

1. As observed by Pagone J in Conder Towers v Commissioner of State Revenue, the discretion under section 109 of the TA Act to allow a taxpayer to add to the grounds of objection 'is large and expressed in unfettered terms' and is to be exercised having regard to the 'same considerations of justice upon which such decisions are regularly made in litigation'.[89] That case suggests relevant considerations include:
   • when the ground is raised and whether there will be prejudice to the other party;
   • whether the party seeking to rely on the additional ground has filed the necessary evidence and whether the other party could have filed any evidence in opposition to the ground;
   • whether (or not) the point is 'discrete, confined and [adds] little time to the hearing'; and
   • whether the ground raises 'important questions of principle of general application'.
2. In this case, leave should be granted.
3. It is true that Ground 3 was raised very late (i.e. at the commencement of the hearing) rather than when Mr Tao served and filed his submissions (in March, May and September 2023), which points against the grant of leave.
4. However, the additional ground is a discrete one which requires little evidence and which was already contained in the Tribunal Book (i.e. as to the interest in the WCT Unit Trust held by Mr Tao through his interest in Amber). As the Commissioner invariably relies on the documentary material gathered in the course of his investigation, it is improbable that he would have sought to obtain and file further evidence even if he had received more notice of the additional ground.
5. Further, given that section 82 of the Duties Act has not previously been considered by either the Supreme Court or VCAT, it seems to me that the scope of the Commissioner's discretion to determine a lesser percentage raises an important question of principle of general application. Indeed, it appears from the original Assessment decision[90] and the determination of the objection[91] that the Commissioner did not even turn his mind to that discretion. As the Tribunal's role on review is to make the 'correct and preferable decision', and in doing so VCAT has all of the functions of the Commissioner,[92] it is necessary that the Tribunal consider the matter fully.
6. Lastly, in terms of prejudice, although it is fair to say the Commissioner was taken by surprise when the new ground was raised at the hearing:
   • the Commissioner was represented by both senior and junior counsel and junior counsel was able to make credible oral submissions on the substantive point; and
   • any residual prejudice has been ameliorated by allowing both parties to make supplementary submissions in writing after the hearing.

Is it appropriate in the circumstances to determine a percentage less than 100% as the relevant acquisition?

1. Mr Tao contends that it is appropriate that the percentage of the relevant acquisition be reduced to 75% to take account of the interest in the WCT Trust held by Amber. In oral submissions, Mr McNaught contended that an adjustment was required as a matter of 'fairness' as well as consistency with how duty is charged under section 86 of the Duties Act which 'contemplates aggregation of the interests held by a person and an associated person'.
2. In response to the Commissioner's submission that Mr Tao is not the only director of Amber, Mr McNaught submitted he is nevertheless a related person of Amber (such that their interests are aggregated under the Landholder Regime) in circumstances where he holds 6 out of the 10 shares on issue.
3. In Mr Tao's supplementary submissions filed on 5 July 2023 ('AsS'), Mr Tao submits that:
   • Mr Tao was the 'majority shareholder' and therefore had 'majority voting control' of Amber and its interest in the WCT Unit Trust;[93]
   • although Mr Tao 'did not hold any actual control over the [WCT Unit Trust], it had the right to benefit of 25% of the income and capital of the trust';[94] and
   • in 'exercising the discretion in s 82(1), it is relevant to consider the purpose of s 82 and take into account the existing benefit held in a Landholder in reassessing to a lesser percentage'.[95]

1. In oral submissions, Mr Healer (junior counsel for the Commissioner) submitted there is 'no basis in the circumstances to depart from the default position in section 82(1)(a)', i.e. that the relevant acquisition obtained is 100%.
2. In this regard, Mr Healer pointed to the fact that section 82 differs from section 79 in that the latter allows the 'precise quantification' of the interest acquired and hence percentage of the relevant acquisition. By contrast, there is 'no similar mechanism' in section 82 and he discretion in section 82(1)(b) operates as 'the exception rather than the rule'.
3. The Commissioner submits that Mr Tao has failed to establish the 'nature or extent of any control interest held prior to the relevant acquisition, personally or in combination with Amber'. In his supplementary submissions filed on 27 June 2024 ('RsS'), the Commissioner adds that Mr Tao 'has not discharged his onus' to establish any adjustment is appropriate in circumstances where Amber 'is not the same person (ie, Mr Tao) who acquired 100% of control of the Trust'.[96]
4. As Mr Healer suggested, while it 'might be accepted that Amber is a vehicle through which Mr Tao holds an equitable interest in the WCT Unit Trust', Amber is a 'separate legal person' and should not be equated with Mr Tao. This is particularly so in circumstances where Mr Tao is not the only director or shareholder of Amber[97] and there is no evidence as to how Amber operates or makes its decisions.
5. In his written submissions, the Commissioner adds that section 82 'creates a separate class of relevant acquisition' and the 'Parliament has sought fit to enact a default presumption' (of an acquisition of 100%), with the discretion still having 'work to do' if, '[f]or example, ... Mr Tao (and not Amber ...) held 25% of the unitholding in the Trust as at February 2014'.[98] However, in this case, the 'acquisition of control by Mr Tao ... was complete in that it changed from nil control to 100% control' (and prior to that, 'Mr Tao held no "control" - in the requisite sense'.[99] Thus, 'an evaluation of the nature and extent of the control ... tells against any departure from the default presumption'.[100]
6. Further, the Commissioner observes that:
   • Mr Tao's argument is '(wrongly) premised on an assumption' that Amber held a 25% interest in the control of the WCT Unit Trust when, having regard to the limited powers reserved to unitholders in the Trust Deed, 'nothing in the evidence supports a finding' that Amber could determine or influence the outcome of the WCT Unit Trust's financial or operating policies;[101] and
   • in any event, to establish a pre-existing 25% interest in the control of WCT Unit Trust, Mr Tao would 'have need to establish that he also held 100% control of, or 100% beneficial interest in' Amber, neither of which is the case (i.e. he is one of two directors and does not hold all of the shares).[102]
7. Lastly, the Commissioner contends that section 86 is a 'machinery provision' concerning how duty is charged on a relevant acquisition and so is of no relevance to the interpretation of the discretion in section 82.[103]

1. The unfettered discretion in section 82(1)(b) is to be exercised having regard to those relevant considerations 'to be found in the subject-matter, scope and purpose of the provisions'.[104]
2. In my view, that section 82 operates on a residual basis, i.e. only where there is no relevant acquisition of a direct or synthetic interest, reflects:
   • the intrinsic relationship between that discretion and the operation of sections 78 and 81 (i.e. at the minimum, regard should be had to any pre-existing direct and synthetic interests); and
   • the potential for the default presumption to give rise to inappropriate outcomes (i.e. it may result in duty on a 100% interest when, in fact, the person who has obtained control has really only increased their interest in the landholder by a lesser percentage).
3. That it operates as a discretion, rather than being tied to some formula based on pre-existing direct and/or synthetic interests, belies the complexity of the concepts and the difficulty of being prescriptive.
4. Nevertheless, in circumstances where the Landholder Regime has been accepted as an anti-avoidance provision, to prevent the indirect acquisition of a landholder without paying duty, I consider it appropriate to take account of pre-existing interests held in the landholder, even where those interests are not held directly.
5. In the present case, it is unclear whether Mr Tao did, in fact, control Amber since he was only one of its two directors and there is no evidence of how decisions of Amber were made. However, he personally held 6 out of its 10 shares and therefore stood to receive 60% of any distributions Amber received from the WCT Unit Trust.
6. In those circumstances, Mr Tao can be seen to have held a pre-existing indirect economic interest of 15% (i.e. 25% x 60%) in the WCT Unit Trust.
7. It follows, in my view, that the appropriate reduction is not the full 25% interest held by Amber, but rather the 15% economic interest Mr Tao already held.

(a) Mr Tao made a relevant acquisition in the WCT Unit Trust, under section 82 of the Duties Act, when he became the sole shareholder and director 66WR Pty Ltd;

(b) it is appropriate to reduce the percentage of the relevant acquisition from 100% to 85%, which will reduce the amount of duty from $199,650.00 to $169,702.50.

(c) the penalty should be reduced accordingly (from $49,912.50 to $42,425.62); and

(d) the amount of the interest will need to be recalculated, applying the market rate to the reduced amount of duty.

1. As the Tribunal is not in a position to recalculate the interest, it is appropriate that the Assessment be set aside with a direction that the Commissioner reassess in accordance with these Reasons.

Annexure: Extracts of clauses of Trust Deed referred to by parties

This deed is made with the intention that its benefits and obligations may ensure to the extent provided herein to every unit holder who by applying for units or upon the transfer of units to him must be deemed to be bound by the provisions of this deed.

The benefits of the trust created by this deed are intended to pass to those unit holders who are bound by its provisions, and who are in turn bound to fulfil the obligations imposed by this deed.

After the first issue, no further units may be issued except to existing holders of units in proportion to their respective holdings, unless the trustee has the written consent of all existing unit holders.

The trustee will recognize the unit holder or his legal personal representative as the only persons having an interest in the units and must not, unless ordered by a court, take notice of any trust or equitable interest affecting the unit. The receipt of the unit holder or his legal personal representative for money payable or property transferable pursuant to this deed will be a complete discharge to the trustee.

The income in each year is to be distributed between the unit holders as directed by this deed. If there is no other provision, distributions are to be proportional to the number of units held. The trustee may during a distribution period make an interim distribution of income

Capital held by the trustee is to be distributed in the same way as income, save that a resolution of 75% of unit holders by number of units must be passed to authorize a capital distribution.

By written resolution of the holders of 75% of the units in the trust the trustee may be removed and a new trustee appointed. An additional trustee may also be appointed by a similar resolution. A trustee may retire on giving 30 days notice in writing to the unit holders.

By written resolution of the holders of 75% of the units in the trust the trustee's remuneration may be fixed. The trustee is entitled to recover all expenses incurred by it in the management of the trust and if the trustee is a solicitor or accountant, he may charge normal professional fees for legal or accounting work conducted by him on behalf of the trust.

(a) Has absolute discretion as to the investment of any asset forming part of the trust fund and as to all dealings with the assets forming part of the fund from time to time.

Without limiting the promises made by the trustee:

(a) The trustee, has absolute discretion as to the manner and time of the exercise of all of its powers.

The trustee may, with the prior approval of the holders of 75% of the units in the trust fund, by deed determine the trust created by this deed.

The trustee may, with the prior approval of the holders of 75% of the units of the trust, by deed alter this deed in any respect at all, including this clause, but provided that the beneficial interest of the unit holders in the trust is not to be affected by the alteration without the unit holders' written consent.

[1] CSLC [3]. This was on the basis of evidence provided by Mr Tao to the effect that there been no changes to the unit-holdings in the WCT Unit Trust since its formation.

[2] Duties Act, s 82(2).

[3] (2016) 103 ATR 1; [2016] VSC 172 [19].

[4] A term defined (in Duties Act, s 3) as any unit trust other than a public unit trust or a wholesale unit trust. It is uncontentious that WCT Unit Trust was a private unit trust scheme.

[5] Duties Act, s 71(1).

[6] Ibid, s 77.

[7] (2016) 103 ATR 1; [2016] VSC 172 [25].

[8] Croft J accepted the nomenclature used by the applicant taxpayer: ibid [25].

[9] To be a land rich entity, the value of its Victorian land had to exceed $1 million and the value of its total landholdings (not limited to Victorian land) had to represent 60% or more of the value of its total assets.

[10] (2016) 103 ATR; [2016] VSC 172 [28] (citing 2012 EM, 15).

[14] Mr Constantinou gave evidence of having completed property developments in Cranbourne and Craigieburn.

[15] Statement of Winfried Wiemer dated 20 September 2023 ('Wiemer WS') [5].

[16] Email dated 12 June 2014: TB, 509-510..

[17] Company Extract Current & Historical for 66 William Rd Pty Ltd: TB, 774-782.

[18] Unit Trust Deed for the WCT Unit Trust: TB, 29-46.

[20] While the number 50 is included in Schedule 1 of the Trust Deed, there is also a reference to the words 'thirty'. However, as this discrepancy was not raised with the witnesses, it has been assumed that the interests are as recorded above.

[21] Maclaw547 was deregistered on 30 October 2016: Company Extract Current & Historical for Maclaw No. 547 Pty Ltd: TB, 783-791.

[22] Ibid and Memorandum of Association and Articles of Association of Fredco Incorporated and associated documents: TB, 959-985.

[23] Notice of acquisition of an interest in land dated 9 February 2012: TB, 884.

[24] See balance sheet as at 30 June 2012: TB, 48-49

[25] Signed letter of offer dated 29 November 2011 and Acceptance of letter of offer dated 2 December 2011: TB, 102-112.

[27] Form of Fixed and Floating Charge over All Assets of a Company: TB, 696-711.

[28] TB, 48; See also, Witness Statement of Zhiyong Tao dated 6 March 2023 ('Tao WS') [13].

[29] Development Summary of Returns, Land Development Feasibility: TB, 740.

[30] Letter from Southern Finance to 66WR Pty Ltd dated 18 March 2013: TB, 114.

[31] Internal Bendigo Bank email prepared by Mr Arthur Eskitzis (manager, asset management) dated 9 July 2013: TB, 456-457.

[33] Tao WS [17]; Company Extract Current & Historical for 66 William Rd Pty Ltd: TB, 778.

[34] Company Extract Current & Historical for Maclaw No. 547 Pty Ltd: TB, 786.

[39] Ibid and Tao WS [21]. Mr Constantinou is more ambiguous as to whose idea it was: Witness Statement of Nicolaos Constantinou dated 6 March 2023 ('Constantinou WS') [11].

[40] ASIC Form 484 'Change to Company Details' dated 11 February 2014: TB, 829-830.

[41] ASIC Form 484 'Change to Company Details' dated 6 March 2014: TB, 831-832.

[42] Email from Mr Eskitzis to Mr Tao and Mr Constantinou dated 7 March 2014: TB, 460.

[43] Email from Mr Tao to Mr Eskitzis dated 13 March 2014: TB, 463.

[44] Email from Mr Eskitzis to Mr Tao dated 17 March 2014: TB, 466-467.

[45] Email from Mr Tao to Mr Eskitzis dated 17 March 2014: TB, 466.

[46] Email from Mr Tao to Mr Eskitzis dated 19 March 2014: TB, 472.

[47] Email from Mr Tao to Mr Eskitzis dated 3 April 2014: TB, 479.

[51] Email from Mr Eskitzis to Mr Tao dated 28 May 2014: TB, 496-497.

[52] In re-examination, Mr Tao explained that the first option did not proceed because the Chinese SOC never obtained the foreign exchange approval required to make the investment or loan.

[53] Email from Mr Eskitzis to Mr Tao dated 6 March 2015: TB, 86.

[54] Company Extract Current & Historical for 66 William Rd Pty Ltd: TB, 778.

[55] Tax invoice issued by Bendigo Bank to Lynbrook Developer Pty Ltd dated 16 October 2015: TB, 625.

[56] Statement of Adjustments: TB, 626.

[60] Company Extract Current & Historical for 66 William Rd Pty Ltd: TB, 774.

[61] Extracted in the Annexure to these Reasons.

[62] Email from Jean Li to Mr Constantinou dated 2 October 2013: TB, 85.

[63] He could not recall the name of the solicitor and did not receive any written advice.

[65] Witness Statement of Xue (Calico) Li dated 25 September 2023 [6].

[66] Reference was made to clauses 1(b), 1(c), 8, 17.1(d), 23, 24, 30, 31, 41 and 43. These are extracted in the Annexure to these Reasons.

[69] Ibid [1275] (citing Hancock v Rinehart (2015) 106 ACSR 207; [2015] NSWSC 646).

[70] Hancock v Rinehart (2015) 106 ACSR 207; [2015] NSWSC 646 [152].

[75] Parliamentary Debates, Legislative Council, 13 May 2004, 1316.

[76] Referencing the argument of the taxpayer in BPG: (2016) 103 ATR 1; [2016] VSC 172 [57].

[78] SRO, 'Relevant acquisitions', available at https://www.sro.vic.gov.au/relevant-acquisitions#:~:text=A%20relevant%20acquisition%20occurs%20when,control%20over%2C%20a%20private%20landholder.

[80] (2014) 253 CLR 531; [2014] HCA 9 [38] (French CJ, Crennan and Bell J) (citations omitted).

[81] Winnett v Commissioner of State Revenue [2019] VCAT 403 [56].

[82] See, for example, GJ Grantham Pty Ltd v Commissioner of State Revenue [2019] VCAT 1275 [49] and Sharlin Pty Ltd v Commissioner of State Revenue [2022] VCAT 378 [9]-[10].

[83] Duties Act, s 82(1)(a).

[84] Ibid, s 79(1).

[85] Ibid, s 81(2).

[86] Duties Act, s 81(5)(d) and

[87] See section 79(5)-(7) of version 87 of the Duties Act (incorporating amendments as at 28 June 2012).

[88] Explanatory Memorandum to the State Taxation Act (Tax Reform) Bill 2004, 18-19 (emphasis added).

[89] [2012] VSC 107 [33] (in the latter respect quoting Lighthouse Philatelics Pty Ltd v Federal Commissioner of Taxation (1991) 32 FCR 148, 156.

[92] Astakhov v Commissioner of State Revenue [2018] VCAT 1363 [8].

[97] The share register of Amber (TB, 987) records two directors - Mr Tao and Zhiqiang Tao (who resides at a different address) and the register of members shows the latter holds four out of 10 shares on issue (TB, 989-990).

[104] Ibid [5] (see, likewise, AsS [4]).