Deputy Commissioner of Taxation v Haritos

The case of Deputy Commissioner of Taxation v Haritos involved a dispute over the beneficial ownership of shares in a company. The Deputy Commissioner of Taxation sought declarations that the company listed as the shareholder was beneficially entitled to the shares. The matter was heard in the Supreme Court of Victoria. The legal issues centred on whether the proceeding, which sought only declaratory relief, constituted a ‘recovery proceeding’ under the Taxation Administration Act 1953 (Cth). Further, the court had to determine if the proceeding was one ‘relating to recovery’ and whether it was to recover an amount of a tax-related liability. Another issue was whether the Deputy Commissioner had the standing to bring the current proceeding under the Supreme Court Act 1986 (Vic).

The court held that the proceeding was not a ‘recovery proceeding’ as it did not aim to recover an amount of tax-related liability. Instead, it sought declaratory relief. Consequently, the Deputy Commissioner had standing to bring the proceeding. The Commissioner relied on contemporaneous corporate documents as prima facie evidence of beneficial ownership of the shares. The evidence provided by the defendants did not displace the Commissioner’s evidence. The court found that the entitlement to the declaratory relief sought was established. The purported declarations of trust were not valid and effective and did not alter the manner in which the shares were held. The court made the declarations accordingly. Additionally, the declarations of trust and associated share transfers were not voidable transactions under the Property Law Act 1958 (Vic).