Deputy Commissioner of Taxation v Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust

The case between Deputy Commissioner of Taxation and Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust was heard in the Federal Court of Australia. The primary dispute revolved around the validity of certain declarations of trust executed by the defendant company, which held properties on trust for a discretionary trust. The Australian Taxation Office (ATO) contested the validity of these declarations, alleging they were void under section 37A of the Conveyancing Act 1919 (NSW) due to the intent to defraud creditors. The ATO also argued that the declarations constituted an "alienation of property." The defendant sought declaratory relief, requesting the court to confirm that it held the properties on trust for specific land tax unit trusts, free from any interest as the trustee of the discretionary trust. Additionally, the defendant sought to remove itself as trustee and have other corporate trustees appointed in its place.

The legal issues before the court were multifaceted. Firstly, the court had to determine whether the declarations of trust were valid or void under section 37A of the Conveyancing Act. This required an assessment of whether the declarations were made with the intent to defraud creditors. Secondly, the court needed to consider whether the requested declarations of trust would conflict with the corporate trustee's right of indemnity over trust assets. The court also had to consider whether the liquidator of the corporate trustee might have grounds to set aside these transactions. Lastly, the court examined whether the defendant, currently in liquidation, was insolvent and if winding up orders should be made due to a debt in respect of GST liability and a judgment debt against the company for other tax debts.

The court found that the declarations of trust were not void under section 37A of the Conveyancing Act. It concluded that there was no intent to defraud creditors and that the declarations did not constitute an "alienation of property." The court granted the requested declaratory relief, confirming that the defendant held the properties on trust for the specified land tax unit trusts, free from any interest in favour of the corporate trustee as trustee of the discretionary trust. The court also ruled that the declarations were not inconsistent with the right of indemnity over trust assets. However, the court declined to remove the defendant as trustee and appoint new trustees, considering the lack of evidence regarding the likelihood of success of the ATO's winding up application. Finally, the court decided not to make winding up orders due to insufficient evidence of the company's insolvency.

The court's final orders included a declaration that Peter Sleiman Investments Pty Ltd held the properties on trust for the land tax unit trusts free from any interest in favour of the corporate trustee as trustee of the discretionary trust. The court did not remove the defendant as trustee or appoint new trustees and did not make winding up orders.