Commissioner of State Revenue v Serana Pty Ltd - [2008] WASCA 82

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: COMMISSIONER OF STATE REVENUE -v- SERANA PTY LTD [2008] WASCA 82

CORAM: MARTIN CJ
STEYTLER P
BUSS JA

HEARD: 6 DECEMBER 2007

DELIVERED : 17 APRIL 2008

FILE NO/S: CACV 44 of 2006

BETWEEN: COMMISSIONER OF STATE REVENUE
Appellant
AND
SERANA PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram  :JUDGE J CHANEY (DEPUTY PRESIDENT)
Citation  :SERANA PTY LTD and COMMISSIONER OF STATE REVENUE [2006] WASAT 78
File No  :CC 2997 of 2005

Catchwords:

Appeal - Stamp duty - Discretionary trusts - Transfer of trust property by a trustee of a discretionary trust to a trustee of a different discretionary trust - Transferee trust a beneficiary under the transferor trust - Beneficiaries of each trust effectively the same - Whether s 73AA(1)(f) of the Stamp Act 1921 (WA) applies to a conveyance or transfer of property made by a trustee to a beneficiary under a discretionary trust - Whether a beneficial interest in the trust property transferred had passed or will or may pass - The proper construction of s 73AA(1)(f) including the meaning of 'beneficial interest', 'pass', 'scheme', 'will' and 'may'

Legislation:

Stamp Act 1921 (WA), s 63, s 73AA, s 73AA(1)(a), s 73AA(1)(d), s 73AA(1)(f), s 73AA(2), s 73E, s 75(1)
State Administrative Tribunal Act 2004 (WA), s 17(1), s 27(1), s 29(1), s 105
Taxation Administration Act 2003 (WA), s 37(2), s 40(1), s 43A

Result:

Appeal dismissed

Category: A

Representation:

Counsel:

Appellant: Mr A J Sefton
Respondent: No appearance

Solicitors:

Appellant: State Solicitor for Western Australia
Respondent: No appearance

Case(s) referred to in judgment(s):

Avon Downs Pty Ltd v The Federal Commissioner of Taxation (1949) 78 CLR 353
Barns v Barns [2003] HCA 9; (2003) 214 CLR 169
Burrell & Kinnaird v Attorney General [1937] AC 286
Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226
Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12
Commissioner of State Revenue v Lam & Kym Pty Ltd (2004) 10 VR 420
Commissioner of State Taxation (WA) v Scotford Cameron & Middleton Pty Ltd (1981) 12 ATR 406
Commissioner of Taxation of the Commonwealth of Australia v Linter Textiles Australia Ltd (In Liquidation) [2005] HCA 20; (2005) 220 CLR 592
CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria [2005] HCA 53; (2005) 224 CLR 98
Dalgety Downs Pastoral Company Pty Ltd v Federal Commissioner of Taxation (1952) 86 CLR 335
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (1982) 149 CLR 431
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510
Gartside v Inland Revenue Commissioners [1968] AC 553
Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490
Harmer v Federal Commissioner of Taxation (1991) 173 CLR 264
Kent v SS 'Maria Luisa' (No 2) [2003] FCFCA 93; (2003) 130 FCR 12
Leedale (Inspector of Taxes) v Lewis [1982] 1 WLR 1319
Livingston v Commissioner of Stamp Duties (Qld) (1960) 107 CLR 411
MSP Nominees Pty Ltd v Commissioner of Stamps (SA) [1999] HCA 51; (1999) 198 CLR 494
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306
Re Transphere Pty Ltd (1986) 5 NSWLR 309
Serana Pty Ltd and Commissioner of State Revenue [2006] WASAT 78

MARTIN CJ: The Commissioner of State Revenue (the Commissioner) appeals from a decision of the State Administrative Tribunal (the Tribunal) in which the Tribunal ordered that an assessment of stamp duty made by the Commissioner in respect of a Deed dated 30 June 2004 (the Deed) between Serana Pty Ltd (Serana) and Grier Nominees Pty Ltd (Grier Nominees) be reduced from the amount of duty which had been assessed by the Commissioner ($30,705) by reference to the value of the property the subject of the Deed, to the nominal amount of $20, pursuant to s 73AA(1)(f) of the Stamp Act 1921 (WA) (the Act).

The facts

The appeal is brought pursuant to s 43A of the Taxation Administration Act 2003 (WA). Although that section allows an appeal to be brought on a question of fact (unlike s 105 of the State Administrative Tribunal Act 2004 (WA)), the Commissioner does not challenge any of the findings of fact made by the Tribunal.
It is convenient to briefly set out the facts found by the Tribunal, of which are to be drawn from the documents in evidence before the Tribunal and which are relevant to the arguments advanced by the Commissioner in the appeal.
The Deed was entered into by Serana and Grier Nominees in their capacities as trustees of the Grier No 2 Trust and the Grier Family Trust, respectively. It is necessary to briefly record the terms of those Trusts, and in particular to identify any differences between them.

The Grier Family Trust

The Grier Family Trust was created by a Deed of Settlement made on 31 October 1978. The settlor of the trust was Michael Clyne. It is a discretionary trust, in the sense that the provision of any benefit under the trust to any beneficiary is subject to the exercise of the discretion of the trustee in their favour.
The primary beneficiaries of the trust are the children of the marriage of Mr Henry Valentine Grier and Mrs Teresa Grier. The general beneficiaries of the trust include the primary beneficiaries and 'the spouses, widows, widowers, children, grandchildren and great grandchildren (including in each generation stepchildren and adopted children) of the primary beneficiaries and the spouses, widows [and] widowers of such children, grandchildren and great grandchildren as are living from time to time in the period from the date hereof until the Vesting Day'. A schedule to the Deed of Settlement provides that Henry Valentine Grier and Teresa Grier are additional members of the class of general beneficiaries. By cl 1 of the Deed of Settlement, the settlor is expressly excluded as a beneficiary of the trust.

The Grier No 2 Trust

The Grier No 2 Trust was created by a Deed of Settlement dated 7 July 1986. The settlor was Desmond Barry Virgo. It is a discretionary trust in the sense I have described. The primary beneficiaries of the Grier No 2 Trust are the children of the marriage of Henry Valentine Grier and Teresa Grier (ie the same primary beneficiaries as the Grier Family Trust). The general beneficiaries are defined in precisely the same terms as in the Grier Family Trust. A schedule to the Deed of Settlement specifies that the additional members of the class of general beneficiaries are to be Henry Valentine Grier and Teresa Grier (as in the Grier Family Trust), and also 'the spouses, widows and widowers of each person hereinbefore described as a beneficiary'. Perhaps surprisingly, the Grier No 2 Trust contains no express provision excluding the settlor as a beneficiary of the trust. However, it is common ground that the settlor, Mr Virgo, is not, and never has been, a beneficiary of the Grier No 2 Trust.
The powers conferred upon the trustee by the Grier No 2 Trust are in all material respects identical to the powers conferred upon the trustee of the Grier Family Trust, save that, by cl 5(b)(iii) of the Grier No 2 Trust Deed, the trustee is empowered to transfer any part of the capital of the trust for the advancement or benefit of any general beneficiary. The Grier Family Trust contains no equivalent power.

The differences between the two trusts

The material differences between the two trusts can be summarised as follows.
The trusts have different corporate trustees. However, the Commissioner made no findings of fact in respect of any material differences in the personnel involved in the control or management of the two corporate trustees, nor did he invite the Tribunal to make any findings on those topics.
In relation to the beneficiaries of the trusts, the potential range of beneficiaries of the Grier No 2 Trust is marginally wider than the potential range of beneficiaries under the Grier Family Trust, because of the inclusion, as additional members of the class of general beneficiaries, of spouses, widows and widowers of all other beneficiaries. However, because of the breadth of the class of general beneficiaries, the only potential additions to that class by reason of the inclusion of the additional class in the Grier No 2 Trust, are the spouses, widows and widowers of Henry Valentine Grier and Teresa Grier. It is common ground that at the time of execution of the Deed, Henry Valentine Grier and Teresa Grier were married to each other, with the consequence that there were in fact no additional beneficiaries by reason of the slightly different definition of 'additional members of the class of general beneficiaries' in the Grier No 2 Trust.
In relation to prospective beneficiaries of the two trusts, although the Grier Family Trust expressly excludes the settlor as a potential beneficiary of that trust, as I have observed, it is common ground that the settlor of the Grier No 2 Trust was not a beneficiary, with the result that the express exclusion of the settlor of the Grier Family Trust makes no material difference to the class of beneficiaries of the two trusts.
So, in summary, despite differences in wordings of the two trust deeds, in fact, as at the date of execution of the Deed, the beneficiaries of the two trusts were identical. The only circumstance in which the beneficiaries of the two trusts will be different in the future is if Henry Valentine Grier or Teresa Grier remarry.
Another prospective difference between the potential beneficiaries of each trust arises from the fact that the vesting date for the Grier Family Trust is prior to the vesting date for the Grier No 2 Trust. Accordingly, the descendants of the primary beneficiaries, and their spouses, may be different as at the two vesting dates. However, while one would expect, in the natural order of things, the beneficiaries of the Grier Family Trust, as at its vesting date, will likely be a subset of the beneficiaries of the Grier No 2 Trust as at its vesting date, that cannot be predicted with certainty (as a result of the possibility of deaths or divorce between the two dates).
In relation to the terms of the trust, including in particular the powers given to the trustee, the only material difference between the two trusts is the power given to the trustee of the Grier No 2 Trust to advance the capital of that trust to a beneficiary prior to the vesting day.

The Deed

The Deed is (perhaps misleadingly) entitled 'Deed of Variation'. It bears the date 30 June 2004 and is between Serana and Grier Nominees. Its recitals refer to the history of the Grier No 2 Trust, and the fact that Grier Nominees is a beneficiary of that trust (pursuant to cl 1(c) which includes, in the class of general beneficiaries, the trustee of any trust under which any general beneficiary has an interest). The Deed further recites that Serana wishes all of the assets and liabilities of the Grier No 2 Trust to be transferred to and vested in Grier Nominees as trustee of the Grier Family Trust.
The operative clauses of the Deed are as follows:
1.The Trustee wishes to transfer the trust property of the Trust to Grier Nominees Pty Ltd as trustee of the Grier Family Trust as at the date of this Deed in accordance with the terms of the Trust Deed.
2.Nothing in this Deed shall cause a change in beneficial ownership.
3.This Deed shall not take effect unless it is stamped with nominal duty as defined in the Stamp Act 1921.
4.Grier Nominees Pty Ltd as trustee of the Grier Family Trust will hold the trust property in accordance with the terms of the Grier Family Trust for the benefit of the beneficiaries of that trust.

The relevant statutory provisions

Central to the issues raised in the Tribunal, and in this Court on appeal, are the construction and effect of s 73AA of the Act, which provides:
Duty on conveyance not passing a beneficial interest
(1)A conveyance or transfer -
(a)made for effectuating the appointment of a new trustee, or the retirement of a trustee, whether the trust is expressed or implied;
(b)made to a beneficiary by a trustee or by another person in a fiduciary capacity, except a discretionary trustee or a unit trustee, under any trust whether express or implied;
(c)made to a beneficiary by a discretionary trustee under any trust whether express or implied otherwise than in the exercise of any power of appointment;
(d)made by a discretionary trustee, in the exercise of a power of appointment over the property conveyed or transferred, to a beneficiary who is an individual for his own use and benefit, if -
(i)at the time when the discretionary trustee acquired the property conveyed or transferred the beneficiary was named or described in the instrument which created the power of appointment as a beneficiary or as a member of a class of beneficiaries in whose favour the discretionary trustee was empowered by that instrument to appoint the property; and
(ii)evidence of the acquisition by the discretionary trustee, as such trustee, of the property conveyed or transferred is produced to the Commissioner with that conveyance or transfer;
(e)made to the holder of a unit in a unit trust scheme by a unit trustee if -
(i)evidence of the acquisition by the unit trustee, as trustee of that unit trust scheme, of the property conveyed or transferred is produced to the Commissioner with that conveyance or transfer; and
(ii)the Commissioner is satisfied that -
(I)the conveyance or transfer has the effect of reducing the rights of the holder of the unit in respect of the property held by the unit trustee to the extent of the property, or the value of the property, conveyed or transferred; and
(II)the conveyance or transfer does not have the effect of varying, abrogating or altering the rights of the holder or holders of other units under the unit trust scheme in respect of the remaining property held by the unit trustee;
or
(f)not otherwise coming within this section but which the Commissioner is satisfied -
(i)does not pass a beneficial interest in the property conveyed or transferred;
(ii)is not made in contemplation of the passing of a beneficial interest therein; and
(iii)is not part of, or made pursuant to, a scheme whereby any beneficial interest in the property conveyed or transferred, whether vested or contingent, has passed or will or may pass,
shall be charged with duty in accordance with item 6 of the Second Schedule.
(2)A conveyance or transfer that is -
(a)made by any trustee or other person in a fiduciary capacity to a beneficiary; or
(b)made by a unit trustee to the holder of a unit in a unit trust scheme;
and that does not conform to subsection (1)(b), (c), (d) or (e), and a conveyance or transfer in respect of which the Commissioner is not satisfied as mentioned in subsection (1)(f), shall be deemed to operate as a voluntary disposition and is chargeable with duty under section 75(1).
Item 6 of the Second Schedule of the Act provides that the amount of duty payable on conveyances or transfers to be assessed in accordance with that item is the lesser of $20 or the duty which would be payable assessed by reference to the value of the property conveyed. In the present case, the duty assessed by reference to the value of the property in the Grier No 2 Trust is the amount of $30,705, whereas if duty is to be assessed by reference to item 6 of the Second Schedule, the amount of duty payable is $20.
Section 73AA needs to be read with s 63 of the Act, which defines the word 'trustee' when used within the pt IIIB of the Stamp Act in which s 73AA is located, to mean:
unless the contrary intention appears, a trustee who is not a discretionary trustee or a unit trustee.
Relevant also to the contextual interpretation of s 73AA are s 73D of the Act, which makes provision for the assessment of stamp duty payable upon a disposition of a unit in a unit trust scheme if the trust property of the scheme comprises or includes property situated in Western Australia, and s 73E of the Act, which makes provision for the payment of stamp duty upon the disposition of shares in a corporation which is a discretionary trustee.
In the context of dispositions of shares in a company which is a discretionary trustee, s 73E(4) and s 73E(5) provide:
(4)Subject to subsections (5) and (6), a transfer of a share and an instrument effecting or evidencing a disposition in relation to a share shall each be chargeable with duty as if it were a conveyance free of encumbrances of an undivided share, equivalent to the proportion of the total issued capital of the company represented by the share, in the property held by the discretionary trustee as trustee of the discretionary trust.
(5)Subsection (4) shall not apply to a transfer or instrument if the Commissioner is satisfied that it is not made in contemplation of the passing of a beneficial interest in any property held by the company as discretionary trustee and is not part of, or made pursuant to, a scheme whereby any beneficial interest, vested or contingent, in any property held by the company as discretionary trustee has passed or will or may pass to any person.

The decision of the Tribunal

The critical question before the Tribunal was whether the Deed came within par (1)(f) of s 73AA, with the result that the duty payable was $20. The Commissioner submitted to the Tribunal that par (1)(f) had no application because s 73AA should be construed in such a way that the only provision applicable to the Deed was par (1)(d), because the Deed constituted the exercise of a power of appointment by a discretionary trustee in favour of a beneficiary. The Commissioner further argued that because the other requirements of par (1)(d) were not met, including the requirement that the transfer of property be to a beneficiary who is an individual for his own use and benefit, that paragraph did not apply to render item 6 of the Second Schedule applicable, with the result that duty was payable by reference to the value of the property transferred.
The Tribunal (Serana Pty Ltd and Commissioner of State Revenue [2006] WASAT 78 at [39]) rejected that submission, ruling:
There is no reason to read down s 73AA(1)(f) so that it does not apply to conveyances which meet some, but not all, of the elements of the conveyances described in sub-paragraphs (a) – (e).
The Commissioner also submitted that two of the three requirements of par (1)(f) were not satisfied, in that, according to the Commissioner, the Deed passed a beneficial interest in the property, the subject of the Grier No 2 Trust and was part of, or made pursuant to a scheme whereby a beneficial interest in that property will or may pass. The Tribunal rejected both arguments and concluded that the Commissioner should have been satisfied that the Deed came within par (1)(f) and accordingly ordered that the assessment of duty be reduced from $30,705 to $20.

The grounds of appeal

Ground 1

Ground 1 asserts that the Tribunal erred by concluding that par (f) of s 73AA(1) applied to a conveyance or transfer of property made by a trustee to a beneficiary. Although that proposition was put to the Tribunal, the argument advanced in support of the proposition to this Court was quite different to that advanced to the Tribunal, and accordingly has not been addressed by the Tribunal in its reasons for decision.
The argument advanced in support of this ground of appeal focuses heavily upon the legislative history of s 73AA and its predecessors, and the interrelationship between pars (b), (c), (d) and (e) of s 73AA(1), on the one hand, and par (f) of s 73AA(1) on the other, and s 73AA(2). The Commissioner contends that the legislative scheme apparent from a consideration of s 73AA as a whole, read by reference to its legislative history, is that each of pars (b) - (e) of s 73AA(1) 'covers the field' of transactions of the kind specified by those paragraphs, so, for example, any conveyance or transfer made by a discretionary trustee to a beneficiary in the exercise of a power of appointment must be assessed by reference to par (d) of s 73AA(1) only, and if it does not meet the requirements of that paragraph, must be assessed for duty by reference to the value of the property conveyed or transferred.

According to the Commissioner's argument, par (f) of s 73AA(1) only applies to conveyances or transfers which are not of a kind identified in the preceding paragraphs of the section and does not therefore apply, for example, to a conveyance or transfer made by a discretionary trustee to a beneficiary in the exercise of a power of appointment.
The Commissioner contends that this construction of the section is compelled by the use of the words 'not otherwise coming within this section' at the commencement of par (f) of s 73AA(1), and by the terms of subsection (2) of s 73AA which expressly provides that a conveyance or transfer made by any trustee or other person in a fiduciary capacity (which would include a discretionary trustee) to a beneficiary and that does not conform to pars (b) ‑ (e) of s 73AA(1) is to be deemed to operate as a voluntary disposition and is chargeable with duty measured by reference to the value of the property conveyed. The Commissioner contends that because the Deed is a conveyance or transfer made by a person in a fiduciary capacity (Serana) to a beneficiary (Grier Nominees), that does not conform to any of pars (b) ‑ (e) of s 73AA(1), it falls squarely within the express provisions of subsection (2) of s 73AA and is chargeable with duty assessed by reference to the value of the property transferred.
The fundamental difficulty with the Commissioner's submission is that its acceptance would require the Court to depart from the plain and ordinary meaning of the words used in each of par (f) of s 73AA(1) and s 73AA(2).
The first plank of the Commissioner's argument relies upon the phrase 'not otherwise coming within this section' which introduces par (f) of s 73AA(1). According to the plain and ordinary meaning of those words, a conveyance or transfer could only come within the section if it conformed to, and met all the requirements of, one of the preceding paragraphs of s 73AA(1). To use as an example, a conveyance or transfer made by a discretionary trustee in the exercise of a power of appointment to a beneficiary who is not an individual, does not come within par (1)(d), and therefore does not come within s 73AA. The introductory words of par (f) of s 73AA(1) cannot therefore, in their plain and ordinary meaning, preclude such a conveyance or transfer from coming within that paragraph.
Put another way, in order to accept the first plank of the Commissioner's submission, it would be necessary to read the words 'not otherwise coming within this section', which introduce par (f) of s 73AA(1), as meaning 'not being a conveyance or transfer of a generic kind or class referred in one of the preceding paragraphs of this subsection' or perhaps as 'not being a conveyance or transfer which meets some but not all of the elements required to conform to one of the preceding paragraphs of subsection (1)'. However, the legislature has not used those words, and for reasons which I will endeavour to explain, I can see no reason in policy or inferred legislative intention which would lead a court to give such a forced and strained construction to the plain and ordinary words which the legislature has used.
The second plank of the Commissioner's argument relies upon subsection (2) of s 73AA. The fundamental difficulty with the Commissioner's argument based upon that subsection, is that it would require the Court to ignore the words 'and a conveyance or transfer in respect of which the Commissioner is not satisfied as mentioned in subsection (1)(f)'. While it is true, as the Commissioner submits, that the Deed is a conveyance or transfer made by a person in a fiduciary capacity to a beneficiary that does not conform to any of pars (b) ‑ (e) of s 73AA(1), if the Commissioner is or should be satisfied of the matters specified in par (f) of s 73AA(1), it is required to be charged with duty in accordance with item 6 of the Second Schedule, and does not and could not fall within the second limb of subsection (2) of s 73AA. Put another way, the construction of subsection (2) urged by the Commissioner would create a direct conflict between par (f) of s 73AA(1) and subsection (2) of s 73AA, in the case of a conveyance or transfer made by a trustee or discretionary trustee to a beneficiary falling within par (f), but not within pars (b) ‑ (e) of s 73AA(1), in that, under par (f), duty is to be assessed by reference to item 6 of the Second Schedule, whereas under subsection (2), duty would be assessed by reference to the value of the property conveyed or transferred. The Commissioner submits that this conflict is to be resolved by construing par (f) of s 73AA(1) as having no application to a conveyance or transfer between a trustee or discretionary trustee and a beneficiary, but this would require the court to construe par (f) of s 73AA(1) otherwise than in accordance with its natural and ordinary meaning, as I have endeavoured to show.
The Commissioner also relies upon the use of the word 'and' in subsection (2), which conjunctively links conveyances or transfers which do not conform to pars (b) ‑ (e), to those not falling within par (f) of s 73AA(1). However, the grammatical structure of subsection (2), and the use of the conjunctive linking the references to paragraphs of s 73AA(1) is dictated by its obvious purpose and effect, which is apparent from a consideration of s 73AA as a whole.
Subsection (1) of s 73AA provides that conveyances or transfers falling within one or other of the six paragraphs of that subsection are to be charged with duty in accordance with item 6 of the Second Schedule. However, subsection (1) makes no provision for the assessment of duty on conveyances or transfers which do not fall within subsection (1). That gap is filled by subsection (2). In order to fill that gap, the draftsperson could not simply provide that a conveyance or transfer which did not fall within subsection (1) was to be chargeable with duty under s 75(1), as that would have caught each and every conveyance or transfer not falling within subsection (1) of whatever type or description. It was therefore necessary to be more specific, and to identify those conveyances or transfers which might have fallen within subsection (1), but which did not conform to its requirements, and to impose duty on those conveyances and transfers. The distinction drawn by the draftsperson between conveyances or transfers not falling within pars (b) ‑ (e) on the one hand, and conveyances or transfers not falling within par (f) on the other, is explained by the fact that pars (b) ‑ (d) and (e) (in part) operate by reference to objective facts, whereas par (f) operates entirely by reference to the Commissioner being satisfied of three specified matters. Accordingly, grammatically it was necessary to distinguish between the two categories of instrument falling within subsection (1). And because, in the case of each category, a conveyance or transfer not falling within it was to be charged with duty assessed by reference to value, the conjunctive 'and' had to be used so that the operative words of subsection (2) imposing duty upon instruments falling within the subsection applied to each category of instrument.
This construction of subsection (2) is supported by the legislative history of s 73AA and its predecessors. Provisions analogous to those now found in s 73AA were originally introduced into s 73 of the Act by amendments made to that section in 1982. Following those amendments, s 73 commenced by providing that a wide variety of instruments were chargeable with duty as a conveyance or transfer of property. However, later provisions of that section exempted instruments of a kind now falling within s 73AA and provided that those instruments would instead be charged with duty assessed by reference to item 6 of the Second Schedule.
By amendments made in 1984, the exempting provisions were removed from s 73 and inserted in a new section, s 73AA. However, s 73AA only then contained subsection (1). In 1987, s 73AA was amended. As the Commissioner correctly points out in his written submissions, the effect of those amendments was to amend par (1)(f), to make clear that the onus of proof of all the matters identified in that paragraph rested on the taxpayer, and to insert subsection (2), so as to overcome the deficiency that the Act did not contain a charging provision for instruments not falling within subsection (1).
I draw two points of relevance from this legislative history. The first is that it reinforces the conclusion which I would in any event draw as to the purpose and effect of subsection (2), and which I have described. The second is that the fact that the words 'not otherwise coming within this section' have introduced par (f) of s 73AA(1) since 1984, prior to the introduction of subsection (2) in 1987, reinforces my conclusion that there is no connection between the construction of those words which the Commissioner presses, and the words used in subsection (2).
The Commissioner's contentions are also contrary to the legislative purpose evident in the provisions of s 73AA. Very broadly speaking, that evident purpose is to impose nominal duty on instruments which effect no material transfer of beneficial interest, but to impose duty assessed by reference to value on instruments which either transfer, or have the capacity to enable a transfer of beneficial interest. So, under par (a) of s 73AA(1), which does not apply to discretionary trusts (because of the definition of 'trustee' in s 63), an instrument appointing a new trustee is charged with nominal duty, because a change in trustee does not effect any transfer of beneficial interest, or create any greater capacity for the transfer of a beneficial interest, in the case of a non‑discretionary trust. Paragraph (b) of s 73AA(1) charges with nominal duty, transfers from a trustee to a beneficiary except by discretionary trustees or unit trustees, again because such a transfer will be converting an existing beneficial interest into a legal and beneficial interest, and not thereby conveying any beneficial interest.
The same purpose is evident in par (e) of s 73AA(1), which provides that a conveyance or transfer by a unit trustee to the holder of a unit in a unit trust is to be charged with nominal duty if certain conditions are satisfied which, generally speaking, would lead to the conclusion that the conveyance or transfer is converting the beneficial interest held by the unit holder to a legal and beneficial interest in the property commensurate with the unit holder's unit holding.
And the legislative purpose is perhaps most evident in par (f) of s 73AA(1), in which the three matters of which the Commissioner must be satisfied all focus upon the passing of a beneficial interest in the property.
So, if the legislative purpose evident in s 73AA is to charge instruments which do not convey a beneficial interest, or do not create a greater capacity or potential for the conveyance of a beneficial interest with only nominal duty, that purpose would not be served by construing par (f) of s 73AA(1) as having no potential application to an instrument which met some but not all of the requirements of the previous paragraphs. Put another way, if an instrument meets the requirements specified in par (f) of s 73AA(1), the legislative purpose evident in s 73AA is satisfied irrespective of whether or not the instrument meets some but not all of the requirements of the other paragraphs. This proposition can be illustrated by drawing from the Commissioner's argument. The Commissioner contended that an example of the type of instrument which might fall within par (f) of s 73AA(1) is an instrument effecting the appointment of a new discretionary trustee. The Commissioner accepted in argument that if he was satisfied that such an instrument did not pass a beneficial interest in property, and was not made in contemplation of the passing of such an interest or pursuant to any scheme whereby such an interest has passed or will or may pass, it would fall within par (f) of s 73AA(1) and be charged with nominal duty.
For reasons which will emerge in the consideration of the remaining grounds of appeal, the substantive effect of the Deed, was exactly the same as if there had been the appointment of a new discretionary trustee of the Grier No 2 Trust. That is because the general effect of the Deed was to convey the property the subject of the Grier No 2 Trust to the Grier Family Trust, which has identical beneficiaries and materially identical terms and conditions. The only material difference following the execution of the Deed was the identity of the trustee of the trust property. If it is the policy of the legislature, evident in par (f) of s 73AA(1), that an instrument appointing a new discretionary trustee should be charged with nominal duty if the requirements of that paragraph are met, I can see no sound policy reason why an instrument having the same substantive effect should not also be charged with nominal duty, and the section construed accordingly.
The Commissioner also relies upon the Parliamentary Debates at the time s 73 of the Act was amended in 1982, when provisions analogous to those now found in s 73AA were introduced. In the course of the Second Reading Speech relating to the Stamp Amendment Bill (No 6), the then Treasurer, Mr Raymond O'Connor, stated (Western Australia, Parliamentary Debates, Legislative Assembly, 26 October 1982, 4204):
Firstly, I will deal with the use of discretionary and unit trusts. While I acknowledge the fact that there are some genuine trust situations, it is evident that the vast majority of trusts these days are being used for the sole purpose of avoiding or minimising the payment of taxes of one type or another. The use of trusts as a means of avoiding or minimising stamp duty payments can be accomplished in a number of different ways.
In the case of a discretionary trust, it is possible under the present legislation to easily appoint a new trustee of the trust.
When the trustee is a corporate body, a change may be achieved by disposing of the shares in the trustee company and so effectively changing the ownership and control of the trust property.
Furthermore, the appointment of a new trustee then affords that trustee with the opportunity to vary or completely change the beneficiaries originally entitled to the assets of the trust.
Again, through the use of the discretionary powers of a trustee and the terms under which these trusts are set up, new beneficiaries can be introduced. These beneficiaries may take the form of companies or other trusts and the property of the trust then immediately can be vested in, and moved to, those new beneficiaries under the guise of a beneficial entitlement.
…
The proposals contained in this Bill will ensure that any change, whatsoever, of trusteeship will be charged full ad valorem duty on the value of the trust property at the time of the change. At the same time, provision has been made to protect any change to a genuine trust situation. In this case, it will be necessary only for the Commissioner of State Taxation to be satisfied that the change is not being made in contemplation of the passing of a beneficial interest in the trust assets.
The provisions in the Bill also will ensure that the vesting of assets to the beneficiaries will be subject to full ad valorem duty when the recipient is not a natural person or is not identified in the deed creating the trust, when the trustee acquired the property being transferred.
The effect of the Second Reading Speech was succinctly and accurately summarised by the Tribunal at [39]:
What the second reading speech demonstrates is that s 73AA is part of a series of anti-avoidance provisions in that preventing the avoidance of stamp duty by the use of trust mechanisms to convey beneficial entitlements in property. Sections 73AA itself is designed to ameliorate the consequence of those provisions by avoiding the imposition of ad valorem stamp duty where no beneficial interest in property does pass or is not contemplated to pass. There is no reason to read down s 73AA(1)(f) so that it does not apply to conveyances which meet some, but not all, of the elements of the conveyances described in sub-paragraphs (a) – (e). So long as the three requirements of s 73AA(1)(f) are met, then the clear purpose of the section is achieved.
The Parliamentary Debates reinforce the inference of legislative purpose which is in any event evident in the terms of s 73AA. That evident purpose does not support the Commissioner's contentions.

Ground 2(a)

The Commissioner asserts that the Tribunal applied the incorrect test as to when a beneficial interest passes or will or may pass for the purposes of s 73AA(1)(f)(i) and s 73AA(1)(f)(iii) of the Act. The Commissioner submits that the Tribunal should have found that under the Deed, a beneficial interest had passed or will or may pass.
It is first necessary to address what is meant by 'a beneficial interest in the property conveyed or transferred' in cl (i) and cl (iii) of par (f) of s 73AA(1). In this case, the property conveyed or transferred is all the property of the Grier No 2 Trust. Both before and after the execution of the Deed, that property was the subject of a discretionary trust, on materially identical terms. As the High Court observed in MSP Nominees Pty Ltd v Commissioner of Stamps (SA) [1999] HCA 51; (1999) 198 CLR 494 at [34]:
The use of terms such as 'beneficial interest' is apt to mislead when applied to beneficiaries' interests in a discretionary trust.
That is because the beneficiary of a discretionary trust has no proprietary interest in the property of the trust. The only right which the beneficiary of a discretionary trust has is to require the trustee to consider from time to time whether or not to exercise the discretionary powers conferred by the trust in his or her favour (see Gartside v Inland Revenue Commissioners [1968] AC 553 at 575).
In Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226 the High Court described the beneficiaries under what 'might compendiously be described as a discretionary trust' (at [39]) on the basis that they 'had no vested interests in corpus but they did enjoy rights to due administration of the trusts of the Deed of Settlement which a court of equity would protect' (at [37]). The court described those interests in the following terms (at [39]):
Beneficial interests arose thereunder only in the limited sense which was identified earlier in these reasons.
In reliance upon those observations, the Tribunal accepted that the expression 'beneficial interest' when used in s 73AA included 'interests of the nature enjoyed by beneficiaries under a discretionary trust' - being the 'right to call for the due administration of the trust' (at [53]). With respect to the Tribunal, I do not agree.
In s 73AA(1)(f), the expression used is the compendious expression 'beneficial interest in the property conveyed or transferred'. The focus of that paragraph, and indeed of the section, is not upon a beneficiary's interest in the trust, or in the due administration of the trust, but rather upon the beneficiary's interest in the property conveyed or transferred. That is entirely consistent with the characterisation of the section as an anti‑avoidance provision, intended to prevent trusts being used as a vehicle for the avoidance of duty payable on the transfer of property. As the focus of the section is upon the property conveyed or transferred, the expression 'beneficial interest' is to be construed by reference to that property. And it is clear that the beneficiary of a discretionary trust has no beneficial interest in the trust property unless and until the discretion is exercised in his or her favour, or the trust vests.
In the case of the property held by a discretionary trust, the natural and ordinary meaning of the expression 'beneficial interest in the property' must be taken to refer to the property the subject of the trust, and not merely to the equitable right of the beneficiary to insist upon the due administration of the trust.

A construction of the expression 'beneficial interest in the property conveyed or transferred' which accords with its natural and ordinary meaning is reinforced by the structure of par (f) of s 73AA(1). That paragraph specifies three matters of which the Commissioner must be satisfied, namely, that the instrument does not pass, is not made in contemplation of the passing and 'is not part of, or made pursuant to, a scheme whereby any beneficial interest in the property conveyed or transferred' has passed or will or may pass. The references in the second and third limbs of the paragraph to a contemplation of the passing of a beneficial interest, or a scheme for the passing of a beneficial interest in the future, reinforce my conclusion that the legislature is referring to a beneficial interest in specifically identifiable items of property and not merely to a right to the due administration of a discretionary trust.
This construction of the expression 'beneficial interest in the property conveyed or transferred' does not impede achievement of the legislative purpose to which I have referred. For example, if the taxpayer fails to satisfy the Commissioner that a change in discretionary trustee has not been made in contemplation of, nor as part of any scheme for the vesting of the beneficial interest in a discretionary beneficiary, either then or at some time in the future, the instrument effecting the change of trustee will be chargeable with duty assessed by reference to the value of the property, the subject of the trust. Or to take the present case, if there was any basis upon which the Commissioner could fail to be satisfied that the Deed was not made in contemplation of the passing of a beneficial interest in the trust property to a beneficiary, nor under a scheme for the vesting of a beneficial interest in the trust property, the Deed would be chargeable with duty assessed by reference to the value of the property in the trust.
This construction of the expression 'beneficial interest in the property conveyed or transferred' disposes of the Commissioner's arguments under this ground, because neither the Commissioner nor the Tribunal made any finding, nor was any evidence identified which would suggest that the Deed had any connection or association with any proposal now or in the future to vest a beneficial interest in the property of the Grier No 2 Trust in any person.
However, even if a broader view of the expression 'beneficial interest in the property conveyed or transferred' is taken, so as to embrace the equitable right of a beneficiary in a discretionary trust to the due administration of a trust, no different conclusion is reached. Demonstration of that proposition requires a brief reference to the analysis of the differences between the Grier No 2 Trust and the Grier Family Trust which I have set out above.
As I have observed, the scope of potential beneficiaries under the Grier No 2 Trust is potentially wider than under the Grier Family Trust because of the possible inclusion of the spouses or widows of Henry Valentine Grier and Teresa Grier in the event that they remarried. However, the Grier No 2 Trust was the trust from which the property was transferred. Accordingly, the fact that there might conceivably have been beneficiaries under that trust, at some time in the future, who are not beneficiaries under the Grier Family Trust, provides no opportunity for the passage of a beneficial interest in the trust property, nor of the equitable right to the due administration of the trust, to a greater range of persons than prior to the execution of the Deed. On the contrary, in that respect, the range of persons who might potentially take a beneficial interest in the trust property, or insist upon the due administration of the trust is, by reason of the Deed, reduced rather than expanded.
The latter observation must be subject to the observation I have made in respect of the different vesting dates of the two trusts. However, as I have observed, it is impossible to predict with any certainty whether those differences in vesting dates will in fact result in any different class of beneficiaries and if so, whether the beneficiaries under the Grier Family Trust will be more or less in number than the beneficiaries under the Grier No 2 Trust. It is sufficient for present purposes to observe that the Commissioner does not suggest, nor is there any evidence to suggest that the Deed was executed in order to alter the range of beneficiaries potentially able to take an interest in the trust property either during the term of the trust or upon the vesting of the trust. Rather, the identity of the description of the beneficiaries of the two trusts compels the contrary inference.
Similarly, the fact that the Grier Family Trust expressly excluded the settlor as a prospective beneficiary, whereas the Grier No 2 Trust does not, makes no material difference, because neither settlor is in fact a beneficiary.
Nor does the fact that Serana as trustee of Grier No 2 Trust has power to vest capital prior to the vesting day, whereas there is no equivalent power in the Grier Family Trust, support any inference or conclusion relevant to s 73AA(1)(f). That is because the Grier No 2 Trust is the trust from which the property is being transferred. Accordingly, by reason of the Deed, the capacity to vest the capital of the trust and therefore to pass a beneficial interest in the property conveyed or transferred, or to insist that consideration be given to the exercise of that power, is reduced, rather than enhanced.
Accordingly, when regard is had to the facts of this particular case, whatever approach is taken to the meaning of the expression 'beneficial interest in the property conveyed or transferred', the Deed did not effect the passage of such an interest.
The Commissioner relied upon the decision of the House of Lords in Burrell & Kinnaird v Attorney General [1937] AC 286. The facts of that case were somewhat unusual, and very different to the present case. The net effect of the arrangements made was to create a trust with certain beneficiaries which was to exist until the death of a particular person, following which a new trust came into operation with some of the same but some different beneficiaries. Because of the difference in the identity of the beneficiaries, the House of Lords held that there had been a passage of property for the purposes of a revenue statute. However, that case is distinguishable from the present because at the time of the execution of the Deed, the beneficiaries of the Grier No 2 Trust and the Grier Family Trust were identical.
It is, however, true that there are passages in the judgment of Lord Russell in that case which are inconsistent with the views which I have expressed above in relation to the meaning of 'beneficial interest in the property conveyed or transferred'. Lord Russell appears to have approached the case on the basis that although no single beneficiary could claim a beneficial interest in any defined share of the property, the beneficiaries collectively could be regarded as having a beneficial interest in the property, because they were the only persons entitled to call for the exercise of the discretion. However, it seems to me, with respect, that those views are contrary to the views expressed in the subsequent House of Lords' judgment in Gartside and, in any event, depend critically upon the wording of the particular revenue statute concerned.

Ground 2(b)

The Commissioner asserts that the Tribunal erred in law by applying incorrect tests as to the construction of the word 'scheme' for the purposes of s 73AA(1)(f)(iii) of the Act. The Commissioner further asserts that the Tribunal should have found that it was open to not be satisfied that the Deed was not part of, or made pursuant to a scheme whereby any beneficial interest in the property conveyed or transferred has passed or will or may pass.
The Tribunal accepted the argument advanced by the Commissioner to the effect that the word 'scheme' should bear its ordinary meaning - namely, 'a plan of action devised in order to attain some end; a purpose together with a system of measures contrived for its accomplishment; a project, enterprise …' (at [49]).
However, the Tribunal went on to express the view that the word 'scheme' 'must necessarily refer to something more than the single transaction effected by the document which is being assessed for duty' (at [50]).
With respect to the Tribunal, nothing in the language of par (f) of s 73AA(1) supports or compels the conclusion that a 'scheme' cannot be found entirely within the transaction effected by the instrument assessed for duty. On the contrary, because the paragraph refers to a scheme under which a beneficial interest 'will or may pass', a single transaction evidenced by a single instrument may well comprise such a scheme.
However, the unduly narrow approach taken to the interpretation of the word 'scheme' by the Tribunal should only be taken to vitiate its decision if the application of the correct interpretation of that expression would have made any difference to the conclusion at which the Tribunal arrived. On the facts of this case, essentially for the reasons which I have given in relation to ground 2(a) above, whatever view is taken of the word 'scheme', there is simply no evidence to suggest any connection or association whatever between the Deed and the passage of any beneficial interest in the property conveyed or transferred.
In the course of argument, counsel for the Commissioner accepted that the appointment of a new discretionary trustee to a discretionary trust could come within par (f) of s 73AA(1) if there were no facts to suggest that the appointment had any connection or association with any passage of a beneficial interest in the property of the trust. For the reasons I have set out above, in substance, the Deed was identical to the appointment of a new trustee to a discretionary trust, because the trust to which the property was transferred had identical beneficiaries and materially identical terms and powers. In the absence of any evidence to suggest any connection or association between the Deed and the passage of any beneficial interest in the property the subject of the Grier No 2 Trust, there is no reason why the Commissioner should not be satisfied that the Deed was not part of, nor made pursuant to a scheme for the passage of such an interest, whatever approach is taken to the meaning of the word 'scheme' in that context.
Accordingly, while I would accept the Commissioner's submission that the Tribunal erred in the approach which it took to the meaning of the word 'scheme' in s 73AA(1)(f), I would not allow the appeal on this ground, because that error did not vitiate the conclusion at which the Tribunal arrived.

Ground 2(c)

This ground asserts that the Tribunal erred in law by applying an incorrect test as to the construction of 'trustee' for the purposes of s 73AA(1)(a) of the Act.
It will immediately be noticed that s 73AA(1)(a) had no direct application to the case before the Tribunal, and was therefore not directly relevant to the assessment of the instrument subject to duty. The Tribunal referred to s 73AA(1)(a) in response to an argument advanced by the Commissioner to the effect that the Deed could constitute a scheme for the passage of a beneficial interest in the trust property because it resulted in the appointment of a new trustee, who may exercise the discretionary power of appointment differently, and in favour of a different beneficiary. The Tribunal responded (at [53]) by pointing out that the same argument could be equally applied to a conveyance under s 73AA(1)(a). That response is, however, incorrect, because s 63 defines the word 'trustee' (which is the word used in par (1)(a)) to exclude a discretionary trustee.
However, this error was not central to the conclusion at which the Tribunal arrived. It is found in the portion of the Tribunal's reasons dealing with the question of whether there was a 'scheme' within par (f) of s 73AA(1). For the reasons I have already given, the Tribunal's conclusion that the Commissioner should have been satisfied that there was not such a 'scheme' was plainly correct, because the mere change of

corporate trustee, without anything more, cannot support the inference of a relevant 'scheme'. That is not, of course, to say that in another case, a change of corporate trustee, which gives rise to a circumstance in which the discretion will be exercised by different individuals, might not support the inference of such a scheme, but no evidence of that kind was adduced in this case, nor did the Commissioner rely upon anything other than the mere change in identity of the corporate trustee.

Accordingly, although the Tribunal did err in the manner asserted in this ground, I would not uphold the appeal on this ground, because that error did not vitiate the Tribunal's decision.
The appeal should be dismissed.
STEYTLER P: I have had the advantage of reading the judgments of the other members of the court. I agree with the Chief Justice, for the reasons that he has given, that grounds 1 and 2(c) have not been made out. I agree with Buss JA, for the reasons that he has given, that grounds 2(a) and (b) fail. I would dismiss the appeal.
BUSS JA: I have read the proposed reasons of the Chief Justice. I agree that the appeal should be dismissed. My reasons are as follows.

The background facts

The appellant (the Commissioner) appeals against the decision of the State Administrative Tribunal (the Tribunal), constituted by Judge Chaney, to allow the respondent's (Serana's) application to the Tribunal for a review of the Commissioner's decision to disallow Serana's objection to a stamp duty assessment made by the Commissioner.
The stamp duty assessment in question is dated 17 January 2005 and relates to a deed, described as a deed of variation, dated 30 June 2004 and made between Serana and Grier Nominees Pty Ltd (Grier Nominees). The amount of the assessment was $30,705. The Tribunal ordered that the assessment be reduced to $20.

The deed of variation

In the deed of variation, Serana is described as 'the Trustee' and Grier Nominees as 'the Beneficiary'.
The deed of variation recites, relevantly, that:
(a)Serana is the trustee of a trust known as the Grier No 2 Trust.

(b)Grier Nominees is the trustee of a trust known as the Grier Family Trust.
(c)Grier Nominees, as trustee of the Grier Family Trust, is a member of the class of general beneficiaries of the Grier No 2 Trust.
(d)The beneficiaries of the Grier Family Trust and the Grier No 2 Trust 'are the same' and the terms of those trusts are also 'the same'.
(e)Pursuant to either cl 5 or cl 6 of the Grier No 2 Trust Deed, Serana wishes to transfer to and vest in Grier Nominees, as trustee of the Grier Family Trust, all of the assets and liabilities of the Grier No 2 Trust.
(f)The transfer was intended to be stamped in accordance with s 73AA(1)(f) of the Stamp Act 1921 (WA) (the Act) or otherwise for nominal duty.

The operative provisions of the deed of variation are these:
1.[Serana] wishes to transfer the trust property of the [Grier No 2 Trust] to Grier Nominees Pty Ltd as trustee of the Grier Family Trust as at the date of this Deed in accordance with the terms of the [Grier No 2] Trust Deed.
2,Nothing in this Deed shall cause a change in beneficial ownership.
3.This Deed shall not take effect unless it is stamped with nominal duty as defined in the Stamp Act 1921.
4.Grier Nominees Pty Ltd as trustee of the Grier Family Trust will hold the trust property in accordance with the terms of the Grier Family Trust [Deed] for the benefit of the beneficiaries of that trust.

The Grier No 2 Trust Deed

The Grier No 2 Trust was created by a deed of settlement dated 7 July 1986 and made between Desmond Barry Virgo as settlor and Serana as trustee.
The relevant provisions of the Grier No 2 Trust Deed are these:
(a)The 'primary beneficiaries' are the children of the marriage of Henry Valentine Grier and Teresa Grier.
(b)The 'general beneficiaries' are defined as follows:
'general beneficiaries' mean and include:-
(a)the primary beneficiaries;
(b)the spouses widows widowers children grandchildren and great grandchildren (including in each generation step‑children and adopted children) of the primary beneficiaries and the spouses widows widowers of such children grandchildren and great grandchildren as are living from time to time in the period from the date hereof until the Vesting Day;
(c)the trustee of any trust or settlement under which any general beneficiary has any interest whether absolute or contingent or by way of expectancy and whether liable to be defeated by the exercise of any power of appointment or revocation or to be diminished by the increase of the class to which he belongs and whether or not such trust or settlement is in existence at the date of this Deed;
(d)any company any share in which is beneficially owned or held by any general beneficiary or by the trustee of any trust or settlement described in sub‑clause (c) hereof;
(e)any charitable institution body or organisation; and
(f)such additional persons and trusts (if any) as are named and described or defined in the Schedule as additions to the class of general beneficiaries
PROVIDED HOWEVER that the following persons namely:-
(i)the Trustee;
(ii)any corporation so long as any of the persons referred to in paragraph (i) of this proviso are the beneficial owners of any share therein;
(iii)the trustee of any trust or settlement in or under which any of the persons referred to in paragraph (i) of this proviso have any beneficial interest of whatsoever nature so long as such interest continues
shall notwithstanding that they may otherwise be or be qualified to be included in the class of General Beneficiaries shall be excluded from the class of General Beneficiaries.
PROVIDED THAT the Trustee at any time and from time to time may declare in writing that any person or class of persons named and defined in such declaration in writing shall be excluded from the class of general beneficiaries in respect to either income or capital or both notwithstanding that but for such exclusion he or they would otherwise have been of such class and the Trustee may at any time revoke in writing the whole or any part or parts of such declaration;
(c)The term 'the Vesting Day' is defined to mean:
the eightieth anniversary of the execution of this Deed less one day or such earlier day as the Trustee may in its discretion at any time determine and it is declared that for the purposes of the dispositions made by this Deed the perpetuity period shall be eighty years;
(d)By cl 2, relevantly, the trustee declares that it will 'henceforth stand possessed of the Trust Fund and of the income thereof upon the trusts and with and subject to the powers and provisions hereinafter expressed concerning the same'.
(e)Clause 3.1 confers on the trustee, relevantly, a power of appointment in respect of the net income of the Trust Fund. By the power, the trustee may pay, apply or set aside the whole or any part of the net income 'to or for the benefit of or for all or such one or more exclusive of the others or other of the general beneficiaries living or in existence from time to time in such proportions and in such manner as the Trustee in its absolute discretion and without being bound to assign any reason therefor shall think fit'.
(f)By cl 4, relevantly, the trustee has a power of appointment over the Trust Fund, as follows:
As from the Vesting Day, the Trustee shall stand possessed of the Trust Fund and the income thereof in trust for such of the general beneficiaries for such interests and in such proportion and for one or more to the exclusion of the other or others as the Trustee may by instrument in writing revocable or irrevocable before the Vesting Day appoint …
If the trustee fails to exercise the power of appointment before the Vesting Day, there is a disposition in default of appointment. Relevantly, for present purposes, by cl 4(a), 'in default of and subject to any such appointment', as from the Vesting Day the trustee is to stand possessed of the Trust Fund and the income thereof in trust:
for such of the primary beneficiaries as shall be living on the Vesting Day as tenants‑in‑common in equal shares and the children (if any) who shall be living on the Vesting Day of any primary beneficiary who dies before the Vesting Day, and such children shall take between them as tenants‑in‑common a share calculated per stirpes which such deceased primary beneficiary would have received had he or she survived to the Vesting Day;
Clause 4(b) makes other provision for the disposition of any part or parts of the Trust Fund which have not been effectively or validly disposed of on or before the Vesting Day pursuant to the other provisions of the Trust Deed (in particular, pursuant to the trustee's power of appointment or cl 4(a)).
(g)Clause 5 provides:
Notwithstanding anything contained herein the Trustee may at any time or times and from time to time as it thinks fit:
(a)by deed appoint that in lieu of the trusts declared herein the whole or any part or parts of the Trust Fund and the income therefrom shall be held on such trusts in favour of the general beneficiaries or any one or more exclusive of the other or others as the Trustee thinks fit PROVIDED ALWAYS THAT no exercise of this power of appointment shall affect:-
(i)the right of any beneficiary to income once applied for his benefit pursuant to the provisions hereof;
(ii)any interest in corpus already vested;
(iii)the due carrying out of any subsisting appointment previously made under Clause 4 whether or not the time for the carrying out of such appointment has arrived;
(b)by deed vary any of the powers and provisions contained herein PROVIDED THAT
(i)no such variation shall provide for an increase in any commission payable to a Trustee who is a Trustee at the date of such variation or diminish the liability of the Trustee as prescribed herein or otherwise operate to the personal benefit of the Trustee;
(ii)any such variation shall be for the benefit of all or any one or more of the General Beneficiaries or of their relatives;
(iii)the Trustee shall have power prior to the Vesting Day to vest any part of the Trust Fund in favour of any beneficiary as to such interests and to the exclusion of the other beneficiary or beneficiaries as the Trustee shall determine.
(h)Clause 6(a) provides:
Notwithstanding anything contained herein or otherwise provided the Trustee may:-
(a)if it thinks fit at any time or times and from time to time until the Vesting Day raise any sum or sums out of the capital of the Trust Fund and pay the same or transfer any portion of the Trust Fund in its existing form of investment to or for the advancement or benefit of any general beneficiary (whether absolutely or by way of re‑settlement upon such trusts as the Trustee thinks fit) freed and discharged from the trusts of this Deed and any receipt shall constitute a full and final discharge therefor to the Trustee in relation to the trusts of this Deed;
(i)By cl 15, relevantly, the trustee is prohibited from making a declaration of exclusion or revocation of an exclusion pursuant to the second proviso in the definition of 'general beneficiaries', from accelerating the Vesting Day, and from exercising any of the discretions or powers contained in cls 4, 5 and 6, without the consent of the person who is the 'guardian' for the time being under the deed. The guardian for the time being may, however, at any time or times by instrument in writing declare that thereafter the trustee shall not be obliged to obtain his or her consent or that of any future guardian. In the schedule to the trust deed, the guardian is stated to be, relevantly, Henry Valentine Grier during his lifetime and such other person as he may, by deed or will, appoint.
(j)Clause 22 provides, relevantly, that the 'appointor' has power at any time and from time to time to remove any trustee of the trust 'without assigning any reason therefor' and has power to appoint in place of any trustee so removed or in place of any trustee who dies, retires or otherwise ceases to be a trustee, any person or persons or company to be the new or an additional trustee. The appointor's powers are subject to the proviso that if and so long as the appointor is a member of the class of general beneficiaries he or she shall not be eligible to be appointed as a trustee of the trust. In the schedule to the trust deed, the appointor is stated to be, relevantly, Henry Valentine Grier during his lifetime and such other person as he may, by deed or will, appoint.
(k)In the schedule to the trust deed, additional members of the class of general beneficiaries are specified. They comprise Henry Valentine Grier, Teresa Grier, and '[t]he spouses, widows and widowers of each person hereinbefore described as a beneficiary'.

Although, unusually, the Grier No 2 Trust Deed does not expressly exclude the settlor as a beneficiary of the trust, before the Tribunal it was common ground between the parties that the settlor is not and has never been a beneficiary.

The Grier Family Trust Deed

The Grier Family Trust was created by a deed of settlement dated 31 October 1978 and made between Michael Clyne as settlor and Henry Valentine Grier as trustee.
By a deed dated 31 December 1978, Henry Valentine Grier ceased to be the trustee and Grier Nominees was appointed as trustee in his stead.
The relevant provisions of the Grier Family Trust Deed are, for the purposes of this appeal, identical to those contained in the Grier No 2 Trust Deed, with the following exceptions:
(a)Each trust has a different trustee. Serana is trustee of the Grier No 2 Trust whereas Grier Nominees is trustee of the Grier Family Trust.
(b)In the schedule to the Grier Family Trust Deed, the additional members of the class of general beneficiaries are specified as Henry Valentine Grier and Teresa Grier. By contrast with the schedule to the Grier No 2 Trust Deed, the schedule to the Grier Family Trust Deed does not specify that the additional members of the class of general beneficiaries include '[t]he spouses, widows and widowers of each person hereinbefore described as a beneficiary'. However, the definition of 'general beneficiaries' in the Grier Family Trust Deed includes all persons within that description, except for the spouses, widows and widowers of Henry Valentine Grier and Teresa Grier. Before the Tribunal it was common ground between the parties that, when the deed of variation was executed, Henry Valentine Grier and Teresa Grier were married to each other.
(c)The Grier Family Trust Deed does not contain a provision in terms of cl 5(b)(iii) of the Grier No 2 Trust Deed. Accordingly, although the trustee of the Grier No 2 Trust has power, before the Vesting Day, to vest any part of the Trust Fund in favour of any beneficiary as to such interests and to the exclusion of the other beneficiary or beneficiaries as the trustee shall determine, the trustee of the Grier Family Trust does not, in terms, have such a power. By cl 6(a) of the Grier Family Trust Deed and cl 6(a) of the Grier No 2 Trust Deed, however, the trustee of each trust may at any time or times and from time to time until the Vesting Day, raise any sum or sums out of the capital of the Trust Fund and pay those sums to any general beneficiary, or transfer any portion of the Trust Fund in its existing form of investment to or for the advancement of any general beneficiary, freed and discharged from the trusts of the deed. There is no material difference, in substance or practical effect, therefore, between cl 5(b)(iii) and cl 6(a).

The power to alter, by addition or exclusion, the beneficiaries of each trust

The trustee of the Grier No 2 Trust has power at any time and from time to time, by a declaration in writing, to exclude any person or class of persons named or defined in the declaration from the class of beneficiaries, either completely or in respect of capital or income, notwithstanding that, but for the exclusion, the relevant person or class of persons would have been within the class of general beneficiaries. The trustee may at any time revoke the whole or any part or parts of any such declaration. See the second proviso in the definition of 'general beneficiaries' at [85] above. The trustee of the Grier Family Trust has identical powers of exclusion and revocation. Plainly, however, one trustee may decide to exercise (or not exercise) its power of exclusion or revocation differently from the other. If the powers are exercised differently, then the class of beneficiaries of one trust may become materially different from the class of beneficiaries of the other trust.
By cl 5(b)(ii) of the Grier No 2 Trust Deed, the trustee may, by deed, vary any of the powers and provisions contained in the deed, provided that any such variation is for the benefit of all or any one or more of the general beneficiaries or of their 'relatives'. Clause 5(b)(ii) of the Grier Family Trust Deed is in identical terms. The term 'relative' means, of course, in this context, a person who is connected with another or others by blood or marriage. A variation for the benefit of one or more of the general beneficiaries would include a variation which excludes a person or class of persons who would otherwise fall within the definition of general beneficiaries. A variation to include, as general beneficiaries, a relative or relatives of one or more of the existing general beneficiaries could, potentially, expand significantly the class of general beneficiaries. For example, cousins of a general beneficiary would be 'relatives' of that beneficiary, but would not fall within the existing definition of general beneficiaries. Although each trustee has a power of variation in terms of cl 5(b)(ii), one trustee may exercise the power differently from the other and, if so, the class of beneficiaries of one trust may become materially different from the class of beneficiaries of the other.
As I have mentioned, the trustee's powers which I have described at [90] ‑ [91] above, are, in general, only exercisable with the consent of the guardian. See cl 15 of the Grier No 2 Trust Deed and cl 15 of the Grier Family Trust Deed.

Section 73AA of the Act

Section 73AA of the Act provides (and at all material times provided):
(1)A conveyance or transfer -
(a)made for effectuating the appointment of a new trustee, or the retirement of a trustee, whether the trust is expressed or implied;
(b)made to a beneficiary by a trustee or by another person in a fiduciary capacity, except a discretionary trustee or a unit trustee, under any trust whether express or implied;
(c)made to a beneficiary by a discretionary trustee under any trust whether express or implied otherwise than in the exercise of any power of appointment;
(d)made by a discretionary trustee, in the exercise of a power of appointment over the property conveyed or transferred, to a beneficiary who is an individual for his own use and benefit, if -
(i)at the time when the discretionary trustee acquired the property conveyed or transferred the beneficiary was named or described in the instrument which created the power of appointment as a beneficiary or as a member of a class of beneficiaries in whose favour the discretionary trustee was empowered by that instrument to appoint the property; and
(ii)evidence of the acquisition by the discretionary trustee, as such trustee, of the property conveyed or transferred is produced to the Commissioner with that conveyance or transfer;
(e)made to the holder of a unit in a unit trust scheme by a unit trustee if -
(i)evidence of the acquisition by the unit trustee, as trustee of that unit trust scheme, of the property conveyed or transferred is produced to the Commissioner with that conveyance or transfer; and
(ii)the Commissioner is satisfied that -
(I)the conveyance or transfer has the effect of reducing the rights of the holder of the unit in respect of the property held by the unit trustee to the extent of the property, or the value of the property, conveyed or transferred; and
(II)the conveyance or transfer does not have the effect of varying, abrogating or altering the rights of the holder or holders of other units under the unit trust scheme in respect of the remaining property held by the unit trustee;
or
(f)not otherwise coming within this section but which the Commissioner is satisfied -
(i)does not pass a beneficial interest in the property conveyed or transferred;
(ii)is not made in contemplation of the passing of a beneficial interest therein; and
(iii)is not part of, or made pursuant to, a scheme whereby any beneficial interest in the property conveyed or transferred, whether vested or contingent, has passed or will or may pass,
shall be charged with duty in accordance with item 6 of the Second Schedule.
(2)A conveyance or transfer that is -
(a)made by any trustee or other person in a fiduciary capacity to a beneficiary; or
(b)made by a unit trustee to the holder of a unit in a unit trust scheme,
and that does not conform to subsection (1)(b), (c), (d) or (e), and a conveyance or transfer in respect of which the Commissioner is not satisfied as mentioned in subsection (1)(f), shall be deemed to operate as a voluntary disposition and is chargeable with duty under section 75(1).
Section 73AA is to be found in Pt IIIB of the Act. Section 63(1) provides that in Pt IIIB, relevantly:
(a)'discretionary trustee' means a trustee of any property over which any person has a power of appointment which was not created by will;
(b)'trustee' means, unless the contrary intention appears, a trustee who is not a discretionary trustee or a unit trustee;
(c)'unit' means any right or interest, whether described as a unit or otherwise, of a beneficiary under a unit trust scheme and includes an interest in a unit;
(d)'unit trust scheme' means, unless the contrary intention appears, a private unit trust scheme within the meaning in s 63(2);
(e)'unit trustee' means a trustee of a unit trust scheme.
Section 75(1) of the Act (which is referred to in s 73AA(2)) provides, relevantly, that a conveyance or transfer chargeable as a conveyance operating as a voluntary disposition inter vivos shall be chargeable with duty under Item 19 of the Second Schedule in respect of the unencumbered value of the property disposed of. Item 19, in turn, imposes duty, on an ad valorem basis, by reference to the rates set out in Item 4.
Item 6 of the Second Schedule (referred to in s 73AA(1)(f)) imposes duty on a conveyance or transfer of any kind not described elsewhere in the Second Schedule, and not being a settlement, a deed of gift or an exchange, at the lesser of:
(a)$20; and
(b)the duty that would be payable under Item 4 if the conveyance or transfer was chargeable with duty under that item.

The Tribunal's decision and reasoning

The Tribunal recorded the agreement of the parties that the conveyance or transfer under the deed of variation was made pursuant to a power of appointment [13].
The Tribunal construed s 73AA of the Act. It said:
s 73AA is part of a series of anti‑avoidance provisions … preventing the avoidance of stamp duty by the use of trust mechanisms to convey beneficial entitlements in property. Sections 73AA itself is designed to ameliorate the consequence of those provisions by avoiding the imposition of ad valorem stamp duty where no beneficial interest in property does pass or [sic] is not contemplated to pass. There is no reason to read down s 73AA(1)(f) so that it does not apply to conveyances which meet some, but not all, of the elements of the conveyances described in sub-paragraphs (a) - (e). So long as the three requirements of s 73AA(1)(f) are met, then the clear purpose of the section is achieved [39].
The Tribunal decided that no beneficial interest in the Trust Fund of the Grier No 2 Trust passed under the deed of variation, for the purposes of s 73AA(1)(f)(i). The first limb of par (f) was therefore satisfied. The Tribunal's reasoning was as follows:
Clause 4 of the Deed of Variation provides that Grier Nominees as trustee of the Family Trust is to hold the trust property in accordance with the terms of the Family Trust for the benefit of the beneficiaries of that trust. Prior to the operation of the deed, the property was held by Serana as trustee of the No 2 Trust in accordance with the No 2 Trust deed. As I have already concluded, beneficiaries of both trusts are, as a matter of fact, the same in each trust. The terms of the two trust deeds are substantially the same. To the extent that additional trustee powers are enumerated in the No 2 Trust deed, those powers do not in substance alter the nature or extent of the beneficial interests of the beneficiaries. Although it may be said that, after the transfer in accordance with the deed, the property is held under a "different trust", there is no change to the nature or extent of the beneficial interest of the beneficiaries to the trust property [45].
The Tribunal then noted, at [47], that the Commissioner did not contend that the deed of variation was made 'in contemplation of the passing of a beneficial interest' in the Trust Fund of the Grier No 2 Trust, within s 73AA(1)(f)(ii) and, accordingly, the second limb of par (f) was satisfied.
The Tribunal considered the meaning of the term 'scheme' in s 73AA(1)(f)(iii). It said:
In my view, the word 'scheme' in s 73AA(1)(f)(iii) must necessarily refer to something more than the single transaction effected by the document which is being assessed for duty. The words 'is not part of, or made pursuant to' suggest that the document being assessed is one element of a broader 'system of measures' designed to pass, or lead to the passing of, a beneficial interest in the property conveyed. If the document being assessed is the only transaction or step leading to the passing of a beneficial interest in property, then it will not meet the requirements of par (i) or (ii) of s 73AA(1)(f).
Having concluded that the Deed of Variation does not, itself, pass a beneficial interest in the property conveyed, there is nothing to suggest that it forms part of, or is made pursuant to, any wider scheme or plan to pass, either immediately or in the future, a beneficial interest in the property [50] ‑ [51].
The Commissioner made two submissions to the Tribunal to the effect that there 'may' be a passing of a beneficial interest in property, within s 73AA(1)(f)(iii), as a result of the transfer of the Trust Fund from Serana to Grier Nominees.
The Commissioner's first submission was expressed as follows:
First, as the transferred property, prior to the transfer, was subject to the discretion of Serana Pty Ltd as trustee of the Grier No 2 Trust, and after the transfer, is subject to the discretion of a different trustee, Grier Nominees Pty Ltd as trustee of the Grier Family Trust, there is a possibility that different beneficiaries would have been and will be chosen in the exercise of a power of appointment by different trustees having different views as to how to exercise their individual discretions. For example, Serana Pty Ltd as trustee of Grier No 2 Trust may have exercised the power of appointment in favour of one beneficiary, whereas now the property is transferred, Grier Nominees Pty Ltd may exercise the power of appointment in favour of a different beneficiary. Further, as both Trust Deeds contain clauses allowing each trustee to exclude certain beneficiaries … then the fact that a different trustee is now vested with the transferred property, [sic] there may be an exercise of the exclusion power by the different trustee in a different manner to the former trustee. Accordingly, it can be said that with the transfer, the beneficial interest in the property 'may pass' in the future, as an objective possibility [52].
The Tribunal described that submission as 'tenuous and speculative' [53]. It then said, in relation to the submission:
It elevates the nature of the interest of any beneficiary in the trust fund to something more than a right to call for the due administration of the trust – see Gartside v Inland Revenue Commissioners [1968] AC 553 at 617 ‑ 618. Whilst I accept that the expression 'beneficial interest' for the purposes of s 73AA includes interests of the nature enjoyed by beneficiaries under a discretionary trust (see Chief Commissioner of Stamp Duties (NSW) v Buckle and Others (1998) 192 CLR 226 at [37] and [39]), the same class of beneficiaries enjoys effectively the same rights in relation to the trust property before and after the transfer.
Even if it is accepted that one trustee may exercise its discretions differently from the other, there is no reason to suspect that the deed has been executed as a part of any scheme to achieve that end. Both trustees are parties to the transaction. If Serana wished to bring about some particular exercise of discretion, it could simply exercise its own discretion rather than transferring the trust property to Grier Nominees in order for the latter company to exercise some particular discretion. The alteration of beneficial interest by the exercise of a power of appointment may occur at some time in the future, but it cannot be said that there is any present scheme in respect of which that future exercise of discretion can be said to be a part [53] ‑ [54].
The Commissioner's second submission was expressed as follows:
Secondly, another objective possibility is that but for the transfer, Serana Pty Ltd as trustee of the Grier No 2 Trust may have never exercised the power of appointment such that the takers in default would have enjoyed the property on the vesting day. Whereas now that property has been transferred, Grier Nominees Pty Ltd as trustee of the Grier Family Trust, being a different trustee may choose to act differently and exercise a power of appointment in favour of a beneficiary. Therefore, it can be said that with the transfer, there is now an objective possibility that the beneficial interests of the takers in default may pass to the beneficiaries or vice versa by virtue of there being a different trustee with a potential to exercise its discretion differently [55].
The Tribunal noted that the second submission was, in substance, a reformulation of the first submission and, for the reasons the Tribunal had given in relation to the first submission, the second submission was without merit.
The Tribunal concluded that the Commissioner should have been satisfied that the deed of variation does not pass a beneficial interest in the Trust Fund of the Grier No 2 Trust, is not made in contemplation of the passing of a beneficial interest in the fund, and is not part of, or made pursuant to, a scheme whereby any beneficial interest in the fund has passed or will or may pass. The Tribunal therefore decided that the deed of variation should have been charged with duty in accordance with Item 6 of the Second Schedule to the Act, and an assessment should have been issued for $20.

The onus of proof in relation to the Commissioner's assessment

By s 37(2) of the Taxation Administration Act 2003 (WA), the onus of establishing that an assessment or decision of the Commissioner to which an objection relates is invalid or incorrect lies on the taxpayer.

The nature of the proceedings before the Tribunal

The proceedings before the Tribunal were within its review jurisdiction. See s 40(1) of the Taxation Administration Act and s 17(1) of the State Administrative Tribunal Act 2004 (WA) (the SAT Act). By s 27(1) of the SAT Act, the review of a reviewable decision is to be by way of a hearing de novo. Section 29(1) of the SAT Act provides:
The Tribunal has, when dealing with a matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision‑maker in making the reviewable decision.

The nature of the proceedings before this court

The Commissioner's appeal was instituted pursuant to s 43A of the Taxation Administration Act. By s 43A(1), an appeal from a decision of the Tribunal can be brought on a question of law, of fact, or mixed law and fact, without having first obtained leave to appeal. Compare s 105(2) and (13) of the SAT Act. The Commissioner does not, however, in this appeal, attack any of the Tribunal's findings of fact.
Section 73AA(1)(f) provides, relevantly, that a conveyance or transfer (not otherwise coming within s 73AA) in respect of which 'the Commissioner is satisfied' as to each of the matters in paras (i), (ii) and (iii) shall be charged with duty in accordance with Item 6 of the Second Schedule.

In CPT Custodian, Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ referred to the observations of Viscount Radcliffe in Livingston and Lord Wilberforce in Gartside, and then said:
When Livingston had been before this Court, Fullagar J and Kitto J each had spoken to similar effect (Livingston v Commissioner of Stamp Duties (Qld) (1960) 107 CLR 411 at 438 per Fullagar J; at 450 per Kitto J). Hence, perhaps, the development of the 'dogma' respecting concurrent and exhaustive legal and beneficial interests which has been referred to earlier in these reasons and which was decisively discounted by the Privy Council in Livingston. Terms are used here which lack a universal contemporary or historical meaning, divorced from the context, particularly any statutory context in which they are employed (See Speed, 'Beneficial Ownership', Australian Tax Review, vol 26 (1997) 34) [31].
The word 'beneficial' is usually employed in trust law as a cognate of 'beneficiary'. See Linter Textiles, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ explained:
That term identifies those persons for whose benefit the trustee of a private trust (ie not a charitable purpose trust) is bound to administer the trust property [52].
The word 'beneficial', in the context of a beneficial interest in property, ordinarily denotes a proprietary interest to which a person or persons, other than the person in whom legal title to the property is vested, is entitled. That is, a beneficial interest in property usually denotes a proprietary interest held for the benefit of another or others. Compare Dalgety Downs, 342.
In Re Transphere Pty Ltd (1986) 5 NSWLR 309, McLelland J emphasised, however, 'the imprecision of the notion that absolute ownership of property can properly be divided up into a legal estate and an equitable estate' (311). His Honour added:
An absolute owner holds only the legal estate, with all the rights and incidents that attach to that estate. Where a legal owner holds property on trust for another, he has at law all the rights of an absolute owner but the beneficiary has the right to compel him to hold and use those rights which the law gives him in accordance with the obligations which equity has imposed on him by virtue of the existence of the trust. Although this right of the beneficiary constitutes an equitable estate in the property, it is engrafted onto, not carved out of, the legal estate (311).
Also see the analysis of Hope JA in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510, 518 ‑ 520. After noting that a trustee is under a personal obligation to hold the trust property for the benefit of another and that the personal obligation is annexed to the property, Hope JA said that several consequences follow:
Firstly, an absolute owner in fee simple does not hold two estates, a legal estate and an equitable estate. He holds only the legal estate, with all the rights and incidents that attach to that estate. If he were to execute a declaration that he held the land in trust for himself absolutely, the declaration would be of no effect; it would give him no separate equitable rights; he would remain the legal owner with all the rights that a legal owner has. At least where co-extensive and commensurate legal and equitable interests are concerned, '… a man cannot be a trustee for himself.': Goodright v Wells ((1781) 2 Dougl 771, 778), per Lord Mansfield. 'You cannot have a legal estate in trust for yourself.': Harmood v Oglander ((1803) 8 Ves Jun 106, 127), per Lord Eldon. Secondly, although the equitable estate is an interest in property, its essential character still bears the stamp which its origin placed upon it. Where the trustee is the owner of the legal fee simple, the right of the beneficiary, although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him. The trustee, in such a case, has at law all the rights of the absolute owner in fee simple, but he is not free to use those rights for his own benefit in the way he could if no trust existed. Equitable obligations require him to use them in some particular way for the benefit of other persons (519).
Both McLelland J and Hope JA quoted from Maitland - Lectures on Equity 2nd ed (1949) at 17:
… Equity did not say that the cestui que trust was the owner of the land, it said that the trustee was the owner of the land, but added that he was bound to hold the land for the benefit of the cestui que trust. There was no conflict here.
The passages from the reasons of McLelland J in Re Transphere and Hope JA in DKLR Holding Co (No 2), to which I have referred, were approved by Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Linter Textiles [30].
The law of property does not require the location at all times and in all circumstances of distinct legal and beneficial ownership. See Linter Textiles [30]. Similarly, where ownership is vested in a trustee, equitable ownership is not necessarily vested in someone else. It is not an essential attribute of a trust that it confers upon individuals a complex of beneficial legal relations which may be called ownership. See CPT Custodian [25]; Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 [50] (Gummow and Hayne JJ); Commissioner of State Revenue v Lam & Kym Pty Ltd (2004) 10 VR 420 [32] (Nettle JA, Vincent JA and Hansen AJA agreeing). In CPT Custodian [25], Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ approved certain observations of Griffith CJ in Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490; in particular, where his Honour said, of an argument for the Revenue, that it was:
based on the assumption that whenever the legal estate in land is vested in a trustee there must be some person other than the trustee entitled to it in equity for an estate of freehold in possession, so that the only question to be answered is who is the owner of that equitable estate. In my opinion, there is a prior inquiry, namely, whether there is any such person. If there is not, the trustee is entitled to the whole estate in possession, both legal and equitable (497).
Accordingly, in some circumstances, property may be held on trust but, at least for the time being, none of the beneficiaries may have an equitable estate or interest in the property, except in the sense that the beneficiaries have a right to due administration of the trust property in accordance with the trustee's duties.
Section 73AA(1) confers exemptions from the ad valorem duty which is ordinarily, and would otherwise, be payable under Item 4 or Item 19 of the Second Schedule on a conveyance or transfer of property if the conditions for exemption specified in at least one of the paragraphs of s 73AA(1) are satisfied in relation to the conveyance or transfer.
Section 73AA(1) (including s 73AA(1)(f)) is predicated on the existence of a conveyance or transfer which conveys or transfers property. It is essential to identify accurately the estate or interest in property that is being conveyed or transferred.
Section 73AA(1) (including s 73AA(1)(f)) is also predicated on a distinction between legal ownership of property, on the one hand, and beneficial ownership of or a beneficial interest in property, on the other.
Section 73AA(1) (including s 73AA(1)(f)) is not concerned with the passing of legal ownership, as such, of property. Rather, the provisions are concerned, in general, with the passing of beneficial ownership of or a beneficial interest in property.
Section 73AA(1)(f)(i) is fulfilled if the Commissioner is satisfied that the conveyance or transfer does not pass a beneficial interest in the property in question. The passing of the beneficial interest in the property must occur under or pursuant to the conveyance or transfer itself. Section 73AA(1)(f)(ii) is fulfilled if the Commissioner is satisfied that the conveyance or transfer is not made 'in contemplation of' the passing of a beneficial interest in the property. The beneficial interest does not pass under or pursuant to the conveyance or transfer itself, but the conveyance or transfer is made with a view to the future passing of such an interest. Section 73AA(1)(f)(iii) is fulfilled if the Commissioner is satisfied that the conveyance or transfer is not part of, or made pursuant to, a 'scheme' whereby any beneficial interest in the property, whether vested or contingent, has passed or will or may pass. The beneficial interest does not pass under or pursuant to the conveyance or transfer itself. The Commissioner must be satisfied that a 'scheme' does not exist whereby any beneficial interest in the property (whether vested or contingent) 'has passed' or 'will or may pass', and that the conveyance or transfer is not part of or made pursuant to such a scheme.
The word 'pass' and cognate forms of that word, in the context of s 73AA(1)(f) and a beneficial interest in property passing, denote some actual change in the existing equitable proprietary interests in the property, so that, after the change, a proprietary interest is beneficially held by or on behalf of a person who did not previously have that interest. An actual change may occur, or may have occurred, for example, if the person by whom or on whose behalf the relevant proprietary interest is beneficially held, previously had a proprietary interest which was different in its nature or extent. Also, an actual change may occur, or may have occurred, for example, by the conveyance or transfer of a new equitable proprietary interest or an existing equitable proprietary interest in the property in question.
The word 'scheme' is not defined in the Act. 'Scheme', in the context of s 73AA(1)(f)(iii) and a conveyance or transfer of property being part of or made pursuant to a scheme whereby any beneficial interest (whether vested or contingent) in the property has passed or will or may pass, denotes a plan or course of action to be followed or implemented.
The plan or course of action is not limited or confined by reference to the actual parties to the conveyance or transfer in question, the time when any such beneficial interest has passed or will or may pass, or the means by which the interest has passed or will or may pass.
The plan or course of action cannot comprise merely the conveyance or transfer in question. This is apparent from the requirement in par (iii) that the relevant conveyance or transfer be part of, or made pursuant to, the scheme. No doubt, the conveyance or transfer will be an element or aspect of any such plan or course of action.
Contrary to the Commissioner's submission, a scheme will not exist, for the purposes of s 73AA(1)(f)(iii), merely where a 'structure or state of affairs' has been created which may enable the passing, in the future, of a beneficial interest in the property which has been conveyed or transferred. There must be a plan or course of action to be followed or implemented.
The Commissioner's decision as to whether he or she is satisfied that the conveyance or transfer is not part of, or made pursuant to, a scheme etc, must be made by reference to the facts and circumstances which existed as at the date of the conveyance or transfer, though regard can be had to subsequent events in order to discover the true position as at that date. See DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (1982) 149 CLR 431, 454 (Mason J, Stephen J agreeing). Those facts and circumstances may include, however, the terms of any relevant instruments and any rights or powers of any person with respect to the property being conveyed or transferred.
The word 'will', in the context of s 73AA(1)(f)(iii) and whether any beneficial interest (whether vested or contingent) in property 'will pass', denotes that, objectively, it appears that, by some means, an actual change in the existing equitable proprietary interests in the property in question will occur in the future, so that, after the change, a proprietary interest is beneficially held by or on behalf of a person who did not previously have that interest.
The word 'may', in the context of s 73AA(1)(f)(iii) and whether any beneficial interest (whether vested or contingent) in property 'may pass', denotes that, objectively, there is a possibility that, by some means, an actual change in the existing equitable proprietary interests in the property in question may occur in the future, so that, after the change, a proprietary interest is beneficially held by or on behalf of a person who did not previously have that interest.
The term 'beneficial interest' may have a broader connotation in par (iii) than in pars (i) and (ii) of s 73AA(1)(f). Paragraphs (i) and (ii) refer merely to 'a beneficial interest' passing in the relevant property, whereas par (iii) refers to 'any beneficial interest' passing in the property 'whether vested or contingent'. It is unnecessary, however, in this appeal, to resolve the point. It is sufficient to note, in relation to par (iii), the plain intention of the Parliament that par (iii) is not limited to present or vested equitable proprietary interests, but extends to future or contingent interests. This is consistent with par (iii) requiring that the Commissioner be satisfied that, relevantly, the conveyance or transfer is not part of, or made pursuant to, a scheme whereby any beneficial interest, etc, 'may pass'.
Section 73AA(1)(f)(i) requires that the Commissioner be satisfied the conveyance or transfer of the relevant property does not itself effect an actual change in the existing equitable proprietary interests in that property, so that, after the change, a proprietary interest is beneficially held by or on behalf of a person who did not previously have that interest.
Section 73AA(1)(f)(ii) requires that the Commissioner be satisfied the conveyance or transfer of the relevant property was not made with a view to an actual change, in the future, in the existing equitable proprietary interests in that property, so that, after the change, a proprietary interest is beneficially held by or on behalf of a person who did not previously have that interest.
Section 73AA(1)(f)(iii) requires that the Commissioner be satisfied the conveyance or transfer of the relevant property is not part of, or made pursuant to, a plan or course of action whereby an actual change in the existing equitable proprietary interests, whether vested or contingent, in that property has occurred, or will or may occur, so that, after the change, a proprietary interest, whether vested or contingent, is beneficially held by or on behalf of a person who did not previously have that interest.

The merits of grounds 2(a) and 2(b): in the circumstances, did the Tribunal make an error in failing to decide that it was not satisfied (in terms of s 73AA(1)(f)(i) or s 73AA(1)(f)(iii)) the conveyance or transfer under the deed of variation did not pass a beneficial interest in the Trust Fund, alternatively was not part of, or made pursuant to, a scheme whereby any beneficial interest in that Trust Fund, whether vested or contingent, will or may pass?

The property that was conveyed or transferred under the deed of variation comprised the assets of the Trust Fund of the Grier No 2 Trust. Those assets included a parcel of land with improvements at 14 Howson Way, Bibra Lake. The total value of the relevant assets was $600,000.
In my opinion, the Tribunal was correct in deciding that it was satisfied the conveyance or transfer under the deed of variation did not itself pass a beneficial interest in any of the assets of the Trust Fund, for the purposes of s 73AA(1)(f)(i).
When the deed of variation was executed:
(a)Serana, in its capacity as trustee of the Grier No 2 Trust, was the owner of the assets;
(b)its ownership was, however, subject to the equitable obligations imposed by or arising from the Grier No 2 Trust Deed;
(c)each of the primary beneficiaries of the Grier No 2 Trust had a future and contingent equitable proprietary interest in the assets of the Trust Fund; and
(d)subject to sub‑par (c) above, none of the beneficiaries of the Grier No 2 Trust had an equitable proprietary interest in the assets of the Trust Fund, except in the sense that they had a right to due administration of the Trust Fund in accordance with the trustee's duties.
Upon the deed of variation being executed:
(a)Grier Nominees, in its capacity as trustee of the Grier Family Trust, became the owner of the assets in question;
(b)its ownership was, however, subject to the equitable obligations imposed by or arising from the Grier Family Trust Deed;
(c)each of the primary beneficiaries of the Grier Family Trust had a future and contingent equitable proprietary interest in the assets of the Trust Fund; and
(d)subject to sub‑par (c) above, none of the beneficiaries of the Grier Family Trust had an equitable proprietary interest in the assets of the Trust Fund, except in the sense that they had a right to due administration of the Trust Fund in accordance with the trustee's duties.
At all material times, the beneficiaries of the Grier No 2 Trust and the beneficiaries of the Grier Family Trust were identical, except that Serana, in its capacity as trustee of the Grier No 2 Trust, was a beneficiary under the Grier Family Trust and Grier Nominees, in its capacity as trustee of the Grier Family Trust, was a beneficiary under the Grier No 2 Trust. See sub‑clause (c) of the definition of 'general beneficiaries' at [85] above. However, neither Serana nor Grier Nominees, in its capacity as trustee, was a primary beneficiary under the trust of which it was a discretionary object. Also, any interest of Serana or Grier Nominees was beneficially held for the persons and entities who were beneficiaries under both trusts.
The conveyance or transfer under the deed of variation did itself effect an actual change in the existing proprietary interests in the assets of the Trust Fund of the Grier No 2 Trust in that ownership of the assets was transferred from Serana to Grier Nominees. The conveyance or transfer did not, however, itself effect an actual change in any existing equitable proprietary interests so that, after the change, a proprietary interest was beneficially held by or on behalf of a person who did not previously have that interest.
In Burrell & Kinnaird v Attorney General [1937] AC 286, a testator's will created a discretionary trust during the life of H for the payment of so much of the income of the trust property as the trustees thought fit to or for the benefit of H and his wife and children, a class of five persons. The will also provided that after H's death, there was to be another discretionary trust during the life of W for the payment of so much of the income as the trustees thought fit to or for the benefit of another class which, immediately after H's death, comprised three persons, namely, W, his wife and his brother M. Two of the beneficiaries of the second discretionary trust, namely W and M, had been discretionary objects of the first discretionary trust. To the extent that the trustees did not distribute the income to one or other of the discretionary objects, it was payable by operation of law to the heir‑at‑law or next‑of‑kin. The House of Lords held that on H's death, the whole of the trust property 'passed' within the meaning of s 1 of the Finance Act 1894 (UK). Section 1 provided, relevantly, that in the case of every person dying after the commencement of the Part of the Act in which s 1 appeared, estate duty shall be levied and paid upon the principal value of 'all property, real or personal, settled or not settled, which passes on the death of such person'. The House of Lords decided that estate duty was payable under s 1 in that on H's death the property the subject of the first discretionary trust passed to the second discretionary trust, even though there was some overlap in the two groups of discretionary objects.

In my opinion, the decision in Burrell is distinguishable from the present case both on its facts and in respect of the ratio decidendi. First, in the present case, at all material times, subject to the exception I have mentioned in relation to Serana as trustee of the Grier No 2 Trust and Grier Nominees as trustee of the Grier Family Trust, there was a complete overlap between the beneficiaries of the Grier No 2 Trust and the beneficiaries of the Grier Family Trust. The exception is not relevant, for present purposes, in that any interest of Serana or Grier Nominees, in its capacity as trustee, in the capital or income of the trust under which it was a discretionary object had to be held for the benefit of the beneficiaries of the discretionary trust of which it was trustee. In other words, the exception did not concern an entity that received or would in any circumstance receive, for its own benefit, any part of the trust property in question. Secondly, the statutory language, in the present case, is materially different from the statutory language under consideration in Burrell.
In my opinion, the Tribunal was also correct in deciding that it was satisfied, in terms of s 73AA(1)(f)(iii), that the conveyance or transfer under the deed of variation was not part of, or made pursuant to, a scheme whereby any beneficial interest in the assets of the Trust Fund of the Grier No 2 Trust, whether vested or contingent, had passed or will or may pass.
As I have mentioned, the onus of establishing that an assessment or decision of the Commissioner to which an objection relates is invalid or incorrect lies on the taxpayer. Notwithstanding that onus, Serana adduced a paucity of evidence in relation to the conveyance or transfer and its commercial purpose.
By letter dated 6 July 2004, Serana's solicitors informed the Commissioner, relevantly, that:
The aim of the deed of variation is to reduce the administrative burden and costs associated therewith arising from the administration of two trusts which are identical.
The solicitors then said, relevantly, that they could 'confirm' that the deed of variation was not pursuant to a scheme whereby any beneficial interest in the property, whether vested or contingent, has passed, or will or may pass.
By letter dated 10 August 2004, Serana's solicitors informed the Commissioner, relevantly:
Our client is currently reorganising his financial affairs for commercial reasons. His interests in the relevant trusts constitute a substantial portion of his personal assets. In that respect, it is integral that the assessment be conducted so that the reorganisation can continue efficiently.
On 17 January 2005, the Commissioner issued the stamp duty assessment.
Serana's notice of objection dated 22 February 2005 to the Commissioner's assessment set out various grounds of objection based on the terms of the deed of variation, the Grier No 2 Trust Deed and the Grier Family Trust Deed, and the provisions of the Act, but did not refer to any additional facts bearing upon the existence or otherwise of a scheme of the kind referred to in s 73AA(1)(f)(iii). Serana did not adduce any oral evidence at the hearing de novo before the Tribunal. It merely tendered, relevantly, the documents which had been before the Commissioner when its objection was determined.
The onus which Serana bore required it to establish at the hearing de novo before the Tribunal, amongst other things, that the Tribunal should be satisfied the conveyance or transfer under the deed of variation was not part of, or made pursuant to, a plan or course of action whereby an actual change in the existing equitable proprietary interests, whether vested or contingent, in the Trust Fund of the Grier No 2 Trust will or may occur, so that, after the change, a proprietary interest, whether vested or contingent, is held for or on behalf of a person who did not previously have that interest. In other words, Serana carried the onus of satisfying the Tribunal, amongst other things, in relation to a negative circumstance or state of affairs (namely, the absence of a scheme) in relation to a future or possible future event (namely, whether a beneficial interest will or may pass).
The onus on the taxpayer to satisfy the Commissioner or the Tribunal (as the case may be) in relation to a negative circumstance or state of affairs (namely, the absence of a scheme) in relation to a future or possible future event (namely, whether a beneficial interest will or may pass) is a significant feature of s 73AA(1)(f)(iii).
The Commissioner was not obliged, before the Tribunal, to establish the existence of such a scheme. The Commissioner did, however, point to objective facts which formed the basis for a rational means by which a beneficial interest in the property conveyed or transferred may subsequently pass.
Serana's focus in its submissions to the Commissioner before the assessment was issued and the objection was disallowed, and in its submissions to the Tribunal on the review application, was upon the terms of the deed of variation, the Grier No 2 Trust Deed and the Grier Family Trust Deed, the proper construction of s 73AA(1)(f), and the application, in the particular circumstances, of the statutory provisions to the trust instruments.
As I have mentioned, (subject to the consent of the guardian) each of the trustee of the Grier No 2 Trust and the trustee of the Grier Family Trust has power at any time and from time to time, by a declaration in writing, to exclude any person or class of persons named or defined in the declaration from the class of beneficiaries, either completely or in respect of capital or income. Also, (subject to the consent of the guardian) each trustee may, at any time, revoke the whole or any part or parts of any such declaration. At all material times, the trustee of the Grier No 2 Trust (Serana) was a different legal entity from the trustee of the Grier Family Trust (Grier Nominees). Each trustee may decide to exercise (or not exercise) its power of exclusion or revocation differently from the other. If the powers are exercised differently, then the class of beneficiaries of one trust may become materially different from the class of beneficiaries of the other trust.
Further, as I have mentioned, (subject to the consent of the guardian) the trustee of the Grier No 2 Trust and the trustee of the Grier Family Trust may, by deed, vary any of the powers and provisions contained in the deed, provided that any such variation is for the benefit of all or any one or more of the general beneficiaries or of their 'relatives'. Although each power of variation is identical, one trustee may exercise the power differently from the other and, if so, the class of beneficiaries of one trust may become materially different from the class of beneficiaries of the other.
In addition, there is no restriction under the Grier Family Trust Deed upon a change in the composition of the board of directors or the shareholders of a trustee company and there is no relevant restriction upon the power of the existing guardian and appointor to resign from those offices and appoint, by deed, a replacement. In other words, there is no impediment under the Grier Family Trust Deed to changing the individuals who control the trustee for the time being and its decision‑making powers and discretions.
On the evidence before the Tribunal, there was an objective possibility that an actual change in the existing equitable proprietary interests, whether vested or contingent, in the relevant trust property may occur in the future; for example, as a result of the exercise by the trustee for the time being of the Grier Family Trust of the powers conferred by the Grier Family Trust Deed to alter, by addition or exclusion, the beneficiaries of the trust. I refer, in particular, to the following:
(a)the paucity of evidence adduced by Serana in relation to whether a scheme of the kind referred to in s 73AA(1)(f)(iii) existed or not (notably, the absence of any oral evidence from the individuals who controlled Serana and Grier Nominees);
(b)the trustee of the Grier Family Trust being a different legal entity from the trustee of the Grier No 2 Trust;
(c)the power of the trustee of the Grier Family Trust to alter, by addition or exclusion, the beneficiaries of the trust; and
(d)the absence of any relevant restriction upon changing the identity of the individuals who control the trustee for the time being of the Grier Family Trust or the identity of the guardian and appointor under that trust.
However, critically, in the present case:
(a)the Commissioner did not challenge, either in determining Serana's objection or before the Tribunal, the assertion in the letter dated 6 July 2004 from Serana's solicitors to the Commissioner to the effect that the aim of the deed of variation was to reduce the administrative burden and costs associated therewith arising from the administration of two trusts which (subject to the exception I have mentioned) had identical beneficiaries;
(b)an actual change in the existing equitable proprietary interests in the trust property in question could have occurred or could have been effected in the future, as part of, or pursuant to, a plan or course of action which had been or was to be followed or implemented, with equal legal efficacy and by identical means, under the Grier No 2 Trust as under the Grier Family Trust; and
(c)on the evidence before the Tribunal, there was no reason to suspect that there was any commercial or other advantage (for example, based on income tax considerations) for any such plan or course of action to be followed or implemented under the Grier Family Trust instead of or in preference to the Grier No 2 Trust.
In the circumstances, the Tribunal was entitled to be satisfied that there was no 'scheme' for the purposes of s 73AA(1)(f)(iii). That is, it was reasonably open to the Tribunal to be satisfied the conveyance or transfer under the deed of variation was not part of, or made pursuant to, a scheme whereby any beneficial interest in the trust property in question, whether vested or contingent, had passed or will or may pass.

The merits of grounds 2(a) and 2(b): conclusion

Grounds 2(a) and 2(b) fail.

The merits of ground 2(c)

I agree with the Chief Justice, for the reasons he gives, that the Tribunal erred in the manner alleged in ground 2(c). I also agree with his Honour, for the reasons he gives, that the Tribunal's error in that respect did not vitiate its decision.

Conclusion

I would dismiss the appeal.