CPT Custodian Pty Ltd v Commissioner of State Revenue

The High Court of Australia considered appeals from the Court of Appeal of the Supreme Court of Victoria concerning assessments for land tax under the *Land Tax Act 1958* (Vic). The dispute arose because the Commissioner of State Revenue assessed taxpayers for land tax as "owners" of land, where the registered proprietors of that land were trustees of unit trusts. The taxpayers held units in these trusts, and in some instances, the trustee of a trust also held units in another trust which, in turn, held units in a trust whose trustee was the registered proprietor of the land in question. The core of the dispute was whether the holders of issued units in these unit trusts, or in a chain of unit trusts, qualified as "owners" of the land for the purposes of the Act.

The legal issues before the High Court were whether a holder of issued units in a unit trust is an "owner" of the land for the purposes of the *Land Tax Act 1958* (Vic), and whether this position changes if the holder of units in one trust also holds units in a further trust, the trustee of which is the registered proprietor of the land. The Court also had to consider whether the position of a beneficiary holding only some of the issued units differs from that of a beneficiary holding all units, and the relevance of the rule in *Saunders v Vautier* to these determinations, particularly in circumstances where the trust deed makes provision for trustee and manager fees. The Court was asked to determine if "unit trusts" constitute a distinct class of trust that informs the meaning of "owner" and whether beneficial ownership must always exist where legal title is vested in a trustee.

The High Court reasoned that the definition of "owner" in the *Land Tax Act 1958* (Vic) did not extend to unit holders in a unit trust, as they do not possess the legal or equitable interest in the land itself. The Court distinguished between the rights of a unit holder and the rights of a beneficiary with an immediate and absolute entitlement to the trust property, as contemplated by the rule in *Saunders v Vautier*. The Court found that the unit trust structure, as presented, did not confer upon unit holders the requisite proprietary interest in the land to be considered its "owner" for land tax purposes. The existence of provisions for fees did not alter this fundamental analysis of beneficial ownership.

In relation to the specific matters before it, the High Court allowed some appeals and dismissed others, with costs. The orders of the Court of Appeal were set aside and replaced with new orders. In several matters, the appeals to the Supreme Court of Victoria were allowed, the amended assessments were set aside, and the subject-matter was remitted to the Commissioner for reconsideration and determination in accordance with law. In other matters, the appeals were dismissed with costs.