Commissioner of State Revenue v Rojoda Pty Ltd

The Commissioner of State Revenue sought special leave to appeal from a decision of the Court of Appeal of Western Australia. The dispute concerned the assessment of stamp duty on declarations of trust made by a party named Maria in relation to partnership properties. The Commissioner contended that these declarations created new beneficial interests, attracting duty, while the respondent argued that the declarations merely confirmed pre-existing equitable interests held by the former partners.

The central legal issues before the High Court were whether the Court of Appeal erred in finding that, upon the dissolution of a partnership and in circumstances where partnership assets were sufficient to meet liabilities, former partners held a specific and fixed beneficial interest in partnership land equivalent to that of beneficiaries under a bare trust. Further, the Court was asked to consider whether the declarations of trust constituted a transfer of pre-existing interests attracting a reduction in duty under section 78 of the relevant Duties Act, or the creation of new interests.

The Court of Appeal had reasoned that following the dissolution of the partnerships and prior to the execution of certain deeds, the former partners possessed a vested beneficial interest in the partnership properties. This interest was characterised as being akin to that of beneficiaries under a bare trust, arising by operation of law due to the sufficiency of current assets to cover partnership liabilities. Consequently, the Court of Appeal concluded that the subsequent deeds merely confirmed these pre-existing trusts, rather than creating new ones. The Commissioner argued this principle was contrary to established High Court authority, particularly *Henschke v The Government Insurance Office of New South Wales*, and that the respondent's submissions did not squarely support the Court of Appeal's reasoning.

The High Court granted special leave to appeal. The Commissioner's primary contention was that the Court of Appeal's enunciation of a principle that former partners immediately hold a vested beneficial interest in partnership land upon dissolution, provided assets exceed liabilities, was an incorrect statement of the law and an unwarranted exception to *Henschke*. The Commissioner also raised issues regarding the proper construction and application of section 78 of the Duties Act, arguing that the deeds created new rights and interests, rather than merely confirming pre-existing ones, and thus did not qualify for any duty reduction.