El Chami v Chief Commissioner of State Revenue

Case •

[2025] NSWCATAD 266

•

28 October 2025

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: El Chami v Chief Commissioner of State Revenue [2025] NSWCATAD 266
Hearing dates: 26 August 2025
Date of orders: 28 October 2025
Decision date: 28 October 2025
Jurisdiction:Administrative and Equal Opportunity Division
Before: J Sullivan, Senior Member
Decision:

The matter is remitted to the Respondent for

determination in accordance with paragraph 82 of

these reasons.

Catchwords:

TAXATION AND REVENUE – duty on transfer of residence between married couple – transfer intended to meet exemption conditions in s 104B – error in transfer documents lodged – penalties and interest

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Duties Act 1997 (NSW)

Real Property Act 1900 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

Bayton Cleaning Co Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657

Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126

Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19

Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19

Coles Myer Limited v Commissioner of State Revenue Victoria (1998) 98 ATC 4537

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109

Golden Age & Hannas the Rocks v Chief Commissioner of State Revenue [2024] NSWSC 249

Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 21

Nhem v Chief Commissioner of State Revenue [2024] NSWCATAD 9

Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227

Re Floridia Enterprises Pty Ltd v Commissioner of State Revenue [2012] VCAT 1574

Re Melteal Pty Ltd and Chief Commissioner of State Revenue [2010] NSWADT 116

RVO Enterprises Pty Ltd ATF the R M O’Mara Family Trust v Chief Commissioner of State Revenue [2004] NSWADT 64

Trethowan v Chief Commissioner of State Revenue [2013] NSWSC 576

O’Neill Tyres Gateshead Pty Ltd & Cessnock Tyres Pty Ltd v Chief Commissioner of State Revenue [2020] NSWCATAD 314

Texts Cited:

None

Category:Principal judgment
Parties: Marvett El Chami (Applicant)
Chief Commissioner of State Revenue (Respondent)
Representation:

Solicitors:

Gryphon Lawyers (Applicant)
Crown Solicitor (Respondent)
File Number(s): 2025/00088483
Publication restriction: None

REASONS FOR DECISION

Introduction

  1. Marvett El Chami is the Applicant. She is disputing a reassessment to duty on a transfer to her, by her husband, of their residence at Punchbowl. Penalties and interest were also imposed.

  2. The intended transfer was of a 50% interest within the exemption under s 104B of the Duties Act 1997 (NSW) (“Duties Act”). It was originally assessed as being exempt under that section on the basis of documents prepared and lodged by the Applicant’s solicitor, Mr Chanthivong of Gryphon Lawyers (who also represented her in these proceedings).

  3. But the transfer form incorrectly stated that it was a transfer of the whole property. The Applicant says no duty should be payable, because it was done in error. It is not in dispute that a second transfer a few days later resulted in the Applicant holding a 50% interest in the property as was intended.

  4. Following an investigation, the Applicant was reassessed to ad valorem duty on 11 October 2024 (the “Reassessment”) on the first transfer. The Reassessment was based on an estimated dutiable value of the Property of $1,960,000, and totalled $125,955.95. This amount comprised:

  1. ad valorem duty of $90,855.00;

  2. penalty tax (calculated at 30% of the duty) of $27,256.50; and

  3. interest (at full market and premium rates) of $7,844.45.

  1. The Respondent says the first transfer was a valid and dutiable transaction which transferred a 100% interest in the Property. It was liable for duty and not exempt, but now on a revised dutiable value of $1,075,000. The Respondent also says the penalty should be reduced from 30% to 25%, but no further remission of penalty or interest is warranted.

What are the issues?

  1. There are three issues:

  1. Whether the first transfer is liable to duty (the second transfer is not in issue);

  2. If so, what is the dutiable value; and

  3. If so, whether penalties and/or interest should be remitted.

Materials before the Tribunal

  1. Materials provided to the Tribunal before the hearing were the Applicant’s application to the Tribunal filed (within time) on 28 February 2025 (A1); documents filed by the Respondent on 1 July 2025 required by s 58 of the Administrative Decisions Review Act 1997 (NSW) (“ADR Act”) (R1); the Applicant’s submissions and attachments filed on 12 May 2025 (A2); Respondent’s bundle of evidence filed on 1 July 2025 (R2); Respondent’s submissions filed on 1 July 2025 (R3); and Applicant’s submissions in reply filed on 21 July 2025 (A3).

  2. At the hearing:

  1. the Respondent provided a Tribunal Book (which I will refer to as “TB”) containing all the materials listed in par 7 above (R4), and a bundle of authorities (R5); and

  2. the Applicant provided a document setting out their oral submissions (A4), and an email to the Tribunal attaching the full Duties Notice of Assessment dated 27 October 2023 (A5) to replace the incomplete notice at TB 13.

  1. The evidence included:

  1. for the Applicant (TB 102-104): three statutory declarations dated 17 October 2024 - of the Applicant, her husband Joseph El Chami, and Mr Chanthivong (the solicitor); and

  2. for the Respondent (TB 126-177): an affidavit of George Boulougouris with an annexed Valuation Report for the Property (as at 27 October 2023).

  1. No witnesses were required for cross-examination.

The Statutory Scheme

Duties Act

  1. The parties accepted that:

  1. the property was land in NSW and “dutiable property” for the purposes of the Duties Act (s 11(1)(a));

  2. for a transfer effected by an instrument, liability for duty arises when the instrument is first executed (s 12(3)); and an electronic registry instrument is taken to be first executed on the date the instrument was first digitally signed by the subscriber (s 12(4)(a)); and

  3. duty is payable by the transferee (s 13), and is to be paid within 3 months after the liability to pay the duty arises, or a tax default occurs (s 17).

Exemption provisions in the Duties Act

  1. Section 104B, which was the exemption sought by the Applicant, says:

104B   Exemption—transfer of residential land

(1)  No duty is chargeable under this Chapter on a transfer, or an agreement for the sale or transfer, of residential land if—

(a)  as a result of the transfer or agreement, the property is or will be held by a married couple or de facto partners as joint tenants or as tenants in common in equal shares, and

(b)  the residential land—

(i)  is land on which there is a dwelling that, when the transfer of dutiable property occurs, is used as the principal place of residence of the married couple or de facto partners, or

(ii)  is a parcel of vacant land, or land on which there is a building under construction, and the married couple or de facto partners intend to use the residential land as the site of a dwelling to be used as their principal place of residence, and

(c)  the residential land is used solely for residential purposes and not for any other purpose (such as a commercial, industrial or professional purpose), and

(d)  both the transferor and the transferee are the married couple or one of them or the de facto partners or one of them and no other person is a party to the transfer, and

(e)  in the case of de facto partners, the parties to the relationship have lived in the relationship for at least 2 years before the date of the transfer.

(2)  For the purposes of subsection (1) (c), the use of not more than one room on the land for a non-residential purpose is to be disregarded, if the use relates to a business or undertaking that is primarily conducted elsewhere.

(3)  Land may be the subject of an exemption under this section even if it is partly held by another person who is not a part of the married couple or one of the de facto partners.

  1. Also discussed in the reasons below are the following two sections in the Duties Act which exempt or exclude a liability for duty:

  1. Section 50A which says:

50A   Cancelled transfers of dutiable property

(1)  A transfer of dutiable property that is effected by an instrument is not liable to duty under this Chapter if the Chief Commissioner is satisfied that—

(a)  the transfer instrument has been cancelled and the dutiable property has not been transferred to the transferee, and

(b)  the transfer was not cancelled to give effect to a subsale.

(c)    (Repealed)

(2)  If duty has been paid on a transfer of dutiable property that is not liable to duty under this Chapter because of this section, the Chief Commissioner must reassess and refund the duty if an application for a refund is made within 5 years of the initial assessment.

(3)  The transfer instrument in respect of which the application is made must be surrendered to the Chief Commissioner unless the Chief Commissioner dispenses with that requirement.

(4)  In this section, cancelled includes abandoned.

  1. Section 65 (Exemptions from duty) which provides an exemption for correction of an error at subsection (14) and says:

(14) Correction of error No duty is chargeable under this Chapter on a transfer of dutiable property made to correct an error in a previous transfer of the same dutiable property if—

(a)  no additional consideration is paid or payable, and

(b)  the beneficial interests in the property change only to the extent necessary to correct the error.

  1. Section 293 of the Duties Act which says:

293   Reassessments—failed instruments

(1)  An instrument that fails in its intended operation and becomes useless is not chargeable with duty under this Act.

(2)  The Chief Commissioner must make a reassessment of duty in respect of such an instrument if an application for a reassessment is made within—

(a)  5 years after the initial assessment, or

(b)  12 months after the instrument has failed,

whichever is the later.

(3)  The instrument in respect of which the application is made must be produced to the Chief Commissioner unless the Chief Commissioner dispenses with its production.

(4)  This section does not apply in respect of an instrument that effects a transfer of dutiable property.

Real Property Act 1900 (NSW) (“Real Property Act”)

  1. Sections 41, 42 and 51 of the Real Property Act were also referred to by the Respondent in their submissions and are set out below:

41   Dealings not effectual until recorded in Register

(1)  No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.

(2)    (Repealed)

42   Estate of registered proprietor paramount

(1)  Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except—

(a)  the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land,

(a1)  in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act,

(b)  in the case of the omission or misdescription of any profit à prendre created in or existing upon any land,

(c)  as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and

(d)  a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected—

Provided that—

(i)  The term for which the tenancy was created does not exceed three years, and

(ii)  in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years.

(iii)    (Repealed)

(2)  In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio.

(3)  This section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section.

….

51   Interest and rights of transferor pass to transferee

Upon the registration of any transfer, the estate or interest of the transferor as set forth in such instrument, with all rights, powers and privileges thereto belonging or appertaining, shall pass to the transferee, and such transferee shall thereupon become subject to and liable for all and every the same requirements and liabilities to which the transferee would have been subject and liable if named in such instrument originally as mortgagee, chargee or lessee of such land, estate, or interest.

Taxation Administration Act

Valuation of Property

  1. Section 17A of the TA Act, which was inserted in 2023, relates to the valuation of property for the purpose of making an assessment. It provides:

17A   Valuation of property

(1)  The Chief Commissioner may, for the purpose of making an assessment of the tax liability of a taxpayer—

(a)  require the taxpayer, by written notice, to provide evidence of the value of property that the Chief Commissioner considers appropriate, or

(b)  obtain a valuation of property from a person the Chief Commissioner is satisfied is suitably qualified to provide evidence of the value of property, or

(c)  rely on a valuation of property prepared for any purpose by a person the Chief Commissioner is satisfied is suitably qualified to provide evidence of the value of property.

(2)  The Chief Commissioner may recover from the taxpayer the cost of obtaining a valuation of property under subsection (1)(b) if—

(a)  the value of the property in the valuation obtained by the Chief Commissioner differs from the value of the property provided by the taxpayer by at least 10%, or

(b)  the taxpayer fails to comply with a written notice given to the taxpayer under subsection (1)(a) within 60 days after the notice is issued.

Penalty tax

  1. Section 27(1) of the TA Act prescribes the rate of penalty tax. The default rate of 25% is the rate the Respondent now submits is appropriate.

  2. If the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with a taxation law, s 27(3)(a) allows for a determination that no penalty tax applies.  Grounds for such a determination may also arise if a tax default occurred solely because of circumstances beyond the taxpayer’s control (s 27(3)(b)).

  3. Section 33 is a wide discretion which allows for the remission of penalty tax. Section 33, as it applies from 1 February 2024, says:

33   Remission of penalty tax

(1)  The Chief Commissioner may, in such circumstances as the Chief Commissioner considers appropriate, remit penalty tax by any amount.

(2)  The imposition or remission of interest is not relevant to the imposition or remission of penalty tax.

Interest

  1. Under ss 21 and 22 of the TA Act, the general rule is that interest accrues (at both the premium and market rate) on an unpaid amount of tax when there has been a tax default, on a daily basis on the unpaid amount of tax from the date the tax was liable to be paid until it is paid.

  2. There is a discretion to remit interest under s 25 of the TA Act. That section was amended on 1 February 2024, and says:

25   Remission of Interest

(1)    The Chief Commissioner may remit interest.

(2)   The Chief Commissioner may issue guidelines setting out how interest must be remitted under this division.

(3)   If guidelines are issued, interest must be remitted only in accordance with the guidelines.

(4)   The imposition or remission of penalty tax is not relevant to the imposition or remission of interest.

Relevant facts

  1. In October 2010, the Applicant’s husband became the sole proprietor of the Property (TB 11).

  2. The Respondent accepts, and I find, that the Property was the principal place of residence of the Applicant and her husband at all relevant times.

The first transfer

  1. The first transfer is the subject of these proceedings.

The intended transfer

  1. I have had regard to the Statutory Declarations declared on 17 October 2024. It is not relevantly in dispute, and I find, that:

  1. on or about 23 October 2023, the solicitor was instructed by the Applicant’s husband to “effect a transfer of the property to include his wife on title as joint tenants”;

  2. the solicitor advised his clients that that the proposed transfer would be exempt from duty under s 104B of the Duties Act as they were married, it was their principal place of residence, and they were to be on title as joint tenants.

  1. I find that the transfer was intended to satisfy the requirements for the exemption from duty in s 104B of the Duties Act.

The transfer that occurred

  1. On 27 October 2023, an agreement for transfer was entered into by the Applicant and her husband. The transfer instrument (TB 12) prepared by the solicitor contained an error. It mistakenly recorded an agreement for the transfer of 100% of the Property from the Applicant’s husband to the Applicant:

  1. The Solicitor signed for both the Transferor (Joseph El Chami) and the Transferee (the Applicant).

  2. The tenancy of the Transferee was listed as “Sole Proprietor”.

  3. The consideration for the transfer was stated to be $1.00.

  4. In signing the document, the Solicitor certified (inter alia) that:

“4.    The Certifier has taken reasonable steps to ensure that this Registry Instrument or Document is correct and compliant with relevant legislation and any Prescribed Requirement.”

  1. Also on 27 October 2023, Gryphon Lawyers, on behalf of the Applicant, assessed the first transfer via Electronic Duties Return (“EDR”) as exempt under s 104B of the Duties Act, resulting in the issue of a “nil” Duties Assessment Number (DAN) the same day (A5). This was explained by the solicitor to the Respondent as follows (TB 46):

“…due to a genuine mistake the initial transfer was incorrectly done which on the face of it would invoke normal duty. Notwithstanding this technical error, EDR permitted the incorrect attempt at a transfer under s 104b to be completed confirming exempt duty as evidenced by DAN 10763400-001. As a result of this and the honest oversight on our part, we took it as a valid transfer and proceeded to completing the transfer on Pexa. Indeed, had the transfer been rejected on EDR for not complying with the requirement for a 50/50 transfer or shown duty payable then we would have been alerted to the error and arguably avoided the mistake but that is not the case.”

  1. It appears the following details were submitted via EDR on 27 October 2023 and recorded on the accompanying “Duties Statement” (at A5, my emphasis in italics):

“Transaction Details

Document type         Transfer of real property

Execution date         27 Oct 2023

Dutiable amount         $1.00

Transfer duty assessed      EXEMPT

Purchaser/Transferee name(s)   Marvett El Chami

Property ID(s)            D1157158/2

Exemption type         104B

Related Duties Assessment Number

Transfer Duty Details

Duty assessed   EXEMPT

0 Duplicate      $0.00   

0 Transfer      $0.00

Assessment details: S104B on Transfer

This duty statement is a summary of the transaction submitted to the Revenue NSW. This duty statement confirms that the transaction has been assessed by the Revenue NSW”

  1. That information lodged then reflected the “nil” EDR assessment which issued on 27 October 2023 (A5/T 13) with DAN 10763400-001 and stating “Exempt”.

  2. PEXA then effected the registration of the transaction with the NSW Land Registry, which occurred on 30 October 2023 with the instrument assigned the dealing number AT557701 (TB 178 and TB 179). This recorded the transfer of a 100% interest in the Property for a consideration of $1.00.

The second transfer

  1. The Applicant’s husband stated the following in his statutory declaration (TB 102):

“…there must have been an error as I found out after a title search was conducted that the property had been transferred solely to Marvett. I informed our solicitor [Mr Jack Chanthivong of Gryphon Lawyers] of this and understand that he attended to rectifying the mistake in early November. The title is now in both our names as was originally intended.”

  1. I find that on 2 November 2023, a further transfer form was executed for the Applicant to transfer a 50% interest in the property to her husband for consideration of $1.00, such that the property would be owned by the Applicant and her husband as joint tenants: TB 15-17.

  2. A “nil” assessment issued to the husband on 7 November 2023, claiming an exemption. The assessment, and the Duties Statement, were issued to Gryphon Lawyers: TB 18-20.

  3. The transfer was registered on 7 November 2023: TB 17.

Notice of Investigation and Reassessment

  1. On 29 July 2024, the Respondent issued a Notice of EDR Investigation (“the NOI”) to the Applicant’s solicitor in order to verify whether the first transfer (DAN 10763400) had been correctly assessed(TB 21). Attachment B set out documents to be provided for that transaction and a link to the webpage regarding the information required for specific transactions.

  2. The solicitor uploaded Purchaser/Transferee Declarations for each of the Applicant and her husband (I note that both were dated 30 July 2024), in which:

  1. the Applicant declared she had been the transferee in a dutiable transaction for the Property with a date of 27 October 2023, with a dutiable value of $1,400,000; and

  2. the Applicant’s husband declared he had been the transferee in a dutiable transaction for the Property with a date of 7 November 2023, with a dutiable value of $1,400,000.

  1. On 31 July 2024, the Respondent requested that form ODA 067 be uploaded, being part of the evidentiary requirements for a “section 104b transaction”.

  2. On 31 July 2024, the solicitor provided a letter and attached Form ODA 067:

  1. The letter said (TB 37) (my emphasis):

“We acted for the Proprietor on title and incoming proprietor. Our clients are married.

When the initial transfer was done on 27th October 2023 from Joseph El Chami to include his wife Marvett El Chami on title for their principal place of resident [Property address], the transfer document on Pexa was mistakenly done as a 100% transfer to the wife. Once this was apparent, we corrected this error by doing another transfer to include both parties as joint tenants as originally intended. This was completed on 7th November 2023.”

  1. Two Forms ODA 067 (“Exemption from Duty – Transfers between Married Couples and De Facto Partners”) were provided with the response.

  1. The Audit Report dated 10 October 2024 noted (TB 53):

“[The solicitor] stated that he should not be responsible as our system allowed him to transfer 100% of the property without bringing up an error. If our system provided a error notice he would have realised that the ownership % was incorrect.

…

On 4th September [the solicitor] received the form al response advising that we will require the valuation and that he will be provided the opportunity to lodge an objection and request a payment plan with the Tax Debt department.

On 5th September [the solicitor] called to advise he was unhappy with the response to his letter and that he would not be providing a valuation and taking the matter to NCAT.”

  1. The Reassessment issued on 11 October 2024 (TB 57), was objected against on 18 October 2024 (TB 65), and the objection was disallowed by the Respondent on 9 January 2025 (TB 82).

  2. As noted above, the Applicant applied to the Tribunal for administrative review on 28 February 2025.

Findings regarding the transfers

  1. I find that:

  1. It was intended that the Applicant would be transferred a 50% interest in the Property (holding it as joint tenants with her husband).

  2. On that basis the solicitor advised that no duty was payable.

  3. The solicitor made an honest error on the transfer form.

  4. The form showed an agreement to transfer a 100% interest in the Property from the husband to the Applicant (for consideration of $1.00) entered into on 27 October 2023;

  5. The solicitor signed the form on behalf of both parties, and certified it was correct.

  6. A “nil” duties assessment issued (via EDR) based on the claim for a s 104B exemption as lodged by the solicitor.

  7. The transfer was registered on 30 October 2023.

  8. A few days later, the error was discovered by the Applicant’s husband, who told the solicitor.

  9. Upon realising the error, the first transfer was neither cancelled, nor withdrawn.

  10. Rather, the solicitor sought to “correct” the error by preparing a second transfer, whereby the Applicant (who owned 100%) would transfer a 50% interest to her husband, with both holding the property as joint tenants.

  11. No duty was payable on the second transfer because it met the requirements for the s 104B exemption. A “nil” assessment was issued via the EDR on that basis and that transaction is not in dispute.

  12. There is no evidence that the solicitor contacted or sought assistance from the Respondent or from the NSW Land Registry in respect of correcting the error.

  13. There is no evidence regarding duties advice provided by the solicitor specifically in respect of the error. I find that no concerns regarding duty were communicated by the solicitor to the Applicant (or her husband), and that they assumed he was “fixing it” such that no duty was payable.

Applicant’s submissions

  1. The Applicant’s original grounds (on the administrative review application form lodged with the Tribunal on 28 February 2025) were:

“The decision by NSW Revenue does not take the whole circumstances/intentions of the parties into consideration which is the main issue in the matter. In summation:

1.   There was a mistake;

2.   The instrument of transfer failed in its intended operation due to the mistake;

3.   The transfer that was actually intended would not have attracted duty.”

  1. The Applicant submitted that no duty was payable because:

  1. An honest mistake was made by the solicitor in the preparation of the PEXA transfer form, which was inconsistent with both the intention of the Applicant and her husband as well as their attempt to seek an exemption from duty pursuant to s 104B of the Duties Act.

  2. That honest mistake was acknowledged by the Respondent in correspondence throughout 2024 and 2025 (at TB 48, 52-54 and 82-85).

  3. No individual is impervious to making mistakes. Yet the Respondent’s demand for payment in those circumstances is “unjust and breathtakingly opportunistic”; it was also contrary to the motto and statement of objectives of Revenue NSW, being a “fair and prosperous NSW”. The following analogy was given:

“If I earn $2,000 a year which is exempt from income tax as it is below the threshold and mistakenly put $200,000 in my tax return which would incur significant income tax, would the income tax payable pursuant to that honest mistake be upheld and enforced notwithstanding my true income and entitlement to exemption? The answer would be a definitive no. Similarly, common sense and the application of justice would also suggest that such redress would apply to the circumstance at hand.”

  1. Neither the Applicant or her husband obtained any benefit from correcting the first mistake; they were eligible for, and intended, a transfer under s 104B of a principal place of residence.

  2. As the electronic duties record (“EDR”) exemption from duty application was submitted listing the exemption type as being “s 104B”, the Respondent’s system should have noticed the error on the form and rejected it, rather than processing a nil assessment.

  3. The instrument of transfer failed in its operation due to the honest mistake.

  4. The Applicant pointed to the Taxation Administration Act 1996 (NSW) (“TA Act”), notably s 101 (power to confirm or revoke assessment, or make an assessment or other decision in its place) and s 100(2) (not limited to grounds stated in the objection); submitting that the Tribunal clearly had the power to “correct the injustice” arising from the error.

  1. In the event that duty was found by the Tribunal to be payable, the Applicant:

  1. does not dispute the Respondent’s revised dutiable value of $1,075,000; and

  2. points to the wide remission discretions, submitting that in the circumstances of the clear and honest mistake made, “a complete waiver of penalty and interest would be warranted” (TB 184).

Respondent’s submissions

  1. The Respondent submitted that the transfer in dispute (the first transfer):

  1. was effected in accordance with its terms, being a 100% transfer of the Property to the Applicant from her husband;

  2. was not exempt from duty under s 104B, as it was not a 50% transfer;

  3. was not exempt under s 293, as the instrument was registered, had effected a valid transfer of the property, and did not fail in its intended operation (citing Re Melteal Pty Ltd and Chief Commissioner of State Revenue [2010] NSWADT 116 (“Melteal”); Re Floridia Enterprises Pty Ltd v Commissioner of State Revenue [2012] VCAT 1574 (“Floridia”));

  4. was not exempt from duty under s 50A, as it was registered and had not been deregistered or cancelled: cf Trethowan v Chief Commissioner of State Revenue [2013] NSWSC 576 (“Trethowan”). The property was transferred to the Applicant upon registration of the first transfer, pursuant to s 41 and 51 of the Real Property Act (and citing Coles Myer Limited v Commissioner of State Revenue Victoria (1998) 98 ATC 4537 (“Coles Myer”)); and

  5. did not meet the requirements for an exemption under s 65(14), as it was not a subsequent transfer.

  1. There was no warrant for a further remission of penalty or interest, although it should be recalculated based upon the revised duty amount (per the expert valuation report).

Jurisdiction and Onus of Proof

  1. The Tribunal has jurisdiction to review the Reassessment. The Reassessment was the subject of an objection, and the Applicant applied to the Tribunal for review within the time period prescribed: s 96 of the TA Act, s 30 of the Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”) and s 9 of the ADR Act.

  2. As noted by the Applicant, s 100(2) of the TA Act provides that neither the Applicant nor the Respondent are limited in the present application to the grounds of the objection.

  3. Nonetheless, the Applicant has the onus of proving her case in this review: TA Act, s 100(3). That means she must prove all matters necessary for the Tribunal to answer the statutory question(s) in her favour: Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [36].

  4. The standard of proof is the balance of probabilities.

Issue 1 – Liability to duty of the first transfer

  1. Turning first to the exemption in s 104B of the Duties Act, there is no dispute that the first transfer met the requirements of s 104B(1)(b), (c) and (d).

  2. However, the first transfer did not satisfy the requirement in s 104B(1)(a) of the Duties Act, because as a result of that transfer, the property was not held by a married couple as joint tenants or as tenants in common in equal shares..

  3. That requirement was not met because there was a valid (and registered) transfer of a 100% interest in the property to the Applicant by her husband. Contrary to the submissions of the Applicant, the powers granted to the Tribunal under s 101 of the TA Act to “make another assessment in place of the assessment” do not override the terms of exemption provisions. Absent a discretion in the relevant section, there is no ability for the Tribunal to waive the statutory requirements even if the outcome is fair or unjust. The High Court of Australia rejected such a proposition in Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109, at 123.

  4. In relation to other provisions of the Duties Act, I find as follows:

  1. Section 50A does not apply to exempt the first transfer from duty because I am not satisfied that the transfer instrument in respect of the first transfer has been cancelled as required under s 50A(1)(a). I agree with the submissions of the Respondent that there was no deregistration or cancellation of the first transfer to remove the dealing from the Register: compare Trethowan at [43]-[45]. It was an effective transfer under which a 100% interest in the Property passed to the Applicant from her husband. It was not undone. Rather, the validity of the first transfer was the “starting point” for the second transfer under which a 50% interest passed from the Applicant to her husband.

  2. It follows from my finding above (that there was an effective transfer) that s 293 does not exempt the first transfer from duty, because the section doesn’t apply “in respect of an instrument that effects a transfer of dutiable property”: s 293(4). And although it may not have been the transaction intended, the registration also meant that the first transfer also did not meet the requirement of being “an instrument that fails in its intended operation and becomes useless” for the purpose of s 293.

  3. Section 65(14) does not assist the Applicant, because it also does not apply. It applies to “a transfer of dutiable property made to correct an error in a previous transfer of the same dutiable property”, and also requires that no additional consideration is paid or payable.

  1. No other relevant exemption provision was raised in the submissions or at the hearing.

  2. Accordingly, I find that the first transfer was liable to ad valorem duty.

Issue 2 - value of the Property

  1. It is not disputed that the Valuation Report of Mr Boulougouris reflected the unencumbered value of the property as at 27 October 2023.

  2. No challenge to that evidence was made by the Applicant, nor did they present any other evidence.

  3. I therefore find that the unencumbered value (s 23(1)) of the dutiable property was $1,075,000 (per the expert report). I also find that this was the “dutiable value” of the property, in substitution for the estimated dutiable value of $1,960,000 upon which the Reassessment was based.

Issue 3 - Penalty tax and Interest

  1. Any penalty tax and interest will be required to be reassessed in light of the change to the dutiable value.

  2. In addition, I must consider whether the penalty and interest should be further remitted.

Penalty

  1. I find there is no basis for a reduction of the penalty to nil under s 27(3).

  2. In respect of s 27(3)(a), I am not satisfied that the solicitor (as agent of the Applicant) took “reasonable care to comply with a taxation law” for the purpose of s 27(3)(a).

  1. “Reasonable care” is not defined, but it has been held to require a determination of whether a person exercised the care that a reasonable person would be likely to have exercised in the circumstances of that person (including in respect of enquiries made and advice sought or received): see Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227 at [95]; RVO Enterprises Pty Ltd ATF the R M O’Mara Family Trust v Chief Commissioner of State Revenue [2004] NSWADT 64 at [23]; Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 21 (“Levitch”) at [113]; also the instructive Supreme Court decision of Richmond J in Golden Age & Hannas the Rocks v Chief Commissioner of State Revenue [2024] NSWSC 249 (“Golden Age”) at [70] and [111].

  2. Although I accept that a genuine error was originally made by the solicitor, there is no evidence that he engaged at that time with the Respondent (or the Land Registry) to ensure that the error was appropriately corrected. Rather, upon realising the error, he did not seek to deregister or cancel the transaction but, rather, effected a second, also valid, transfer which took as its starting point full ownership of the Property by the Applicant. The result was two separate transactions, each of which was separately recorded and registered, and required to be separately considered in respect of its liability to duty. Each was a valid and binding transaction upon registration: see Melteal at [17], [18] and [21]-[22]; also Floridia at [40].

  1. Despite some concerns I have regarding striking similarities in wording of the three statutory declarations, I accept that the Applicant (together with her husband) took reasonable care for the purpose of s 27(3)(a) by relying upon her solicitor in respect of the original advice, and because a reasonable person would have anticipated that he would inform her/them of any issues or consequences arising from his error or his attempts to correct it. Nonetheless, I am not obliged to exercise the discretion under that provision to reduce the penalties to nil, having regard to the totality of all actions of the parties, when considered together. As stated in Nhem v Chief Commissioner of State Revenue [2024] NSWCATAD 9 (at [63]-[64]):

“An additional justification for a refusal to exercise the discretion in those circumstances is obtained by having regard to the combined result of the behaviour (the acts and omissions) of the taxpayer and the person acting for them. If that combined result is that the Chief Commissioner is unable to make a proper assessment of duty because the relevant behaviour includes a failure to take reasonable care (as here) or a failure to provide complete and accurate information (as here) then, whether or not it was the intention of either of the relevant parties to mislead (and there was none established here), the Tribunal may be justified in refusing to interfere with the Chief Commissioner’s decision not to exercise the section 27(3) discretion.”

  1. Consistent with the reasoning in that case, I decline to exercise the discretion in s 27(3)(a) to reduce the penalties to nil.

  2. In respect of s 27(3)(b), I find that the prerequisite(s) for the exercise of the discretion to remit penalties to nil under s 27(3)(b) are not satisfied because the tax default did not occur solely because of circumstances beyond either the Applicant’s control or of a person acting on her behalf – being her solicitor. The nil EDR assessment was issued as a result of the information input by the solicitor, as explained above. Ultimately, this was a electronic self-assessment system, and I find that the cause of the problem was the error of the solicitor, notwithstanding a manual assessment system may have produced a different result.

  3. The next provision to consider is s 33 which provides a broad discretion to remit penalty tax. The discretion under that provision is not subject to the limits set out in s 27 (Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126). Nevertheless, that discretion should not be exercised in a way that defeats the fundamental legislative objectives of the penalty scheme. Ward CJ in Equity (as she then was) has said that except in “special circumstances”, the general discretion under s 33 should not be exercised beyond the limits in ss 27(3) and 29 when the circumstances giving rise to a remission under s 27(3) of the TA Act have not been made out (Bayton Cleaning Co Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657, at [301]).

  1. The absence of reasonable care on the part of the solicitor, though not determinative, is a relevant matter going against the exercise of a discretion under s 33. Nonetheless, in the current case, I think it is warranted to strike a balance between the actions of the solicitor and those of the Applicant. From the Applicant’s perspective, they sought to enter into a transaction where the advice was that no duty at all was payable, the error was subsequently identified and – to her understanding (and expectation) – duly corrected without being notified of any adverse duty consequences. She received no advice to the contrary from the solicitor. In combination, I find that these were circumstances out of the ordinary that justify a 50% reduction in the penalty (from 25% now proposed by the Respondent, to 12.5%), and that this remains consistent with the general legislative purpose.

Interest

  1. Pursuant to s 17 of the Duties Act, duty is to be paid within 3 months of the liability arising or a tax default will occur. The liability for duty, in this case, arose at the time the first transfer was executed on 27 October 2023. Accordingly, the duty was required to be paid by 27 January 2024 and interest commences to run from that date.

  2. There is, however, a broad discretionary power to remit interest under s 25. The Respondent may issue guidelines setting out how interest must be remitted. Although TAA001: Remission of Interest Guidelines” have been issued with effect from 1 July 2025, the Respondent confirmed that they don’t apply in this case because the objection was lodged by the Applicant before that date.

  3. I find no warrant to remit the market rate component of interest. It is well accepted that the market rate component should rarely if ever be waived, because to do so would be to devalue the amount of tax payable: Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19 (“Incise Technologies”) at [60]. I see no reason to depart from this principle in the present case in light of the matters set out above, in particular because the tax default did not occur as a result of circumstances outside the control of the Applicant or her legal representative. I am unable to identify any other grounds for the remission of the market rate of interest.

  4. The purpose of the premium rate component of interest differs from that of the market rate of interest. Premium interest is in the nature of a penalty: Southern Cross Community Health Care Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1317, at [443], per Emmett AJA; see also Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249 (“Golden Age”), and Wan v Chief Commissioner of State Revenue [2025] NSWCATAP 54 (“Wan”).

  5. I have had regard to the Respondent’s guidance in Practice Note CPN 024, but there is no relevant limit on the power to remit interest in s 25: Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126 . And in Wan, the Appeal Panel said, at [81]–[82]:

“Factors such as whether a taxpayer took reasonable care or whether there were exceptional circumstances are not irrelevant and the Tribunal was entitled to place great weight on them. Nevertheless, remission of interest is not an ”all or nothing” exercise. Further, the degree of a taxpayer’s culpability is material. An assessment of the appellant’s culpability is not limited to whether he took reasonable care or whether there were exceptional circumstances.

It follows that by asking only whether there was reasonable care or exceptional circumstances and not asking whether there were any personal circumstances of the appellant apparent from the materials before it, relevant to establishing the degree of culpability other than the failure to meet his statutory obligations that may warrant remission, the Tribunal asked the wrong question”.

  1. As stated by Richmond J in Golden Age:

“102.   In my view it is necessary to approach the remission question by recognising that the premium component is penal in nature and serves the purpose of both imposing a penalty and deterring taxpayers from delaying payment of duty in what is essentially a self-assessment regime. Consequently, the culpability of the taxpayer in failing to pay the duty liability by the due date is an important matter in the exercise of the discretion. I do not accept the Commissioner’s submission that it is a penalty at the “low end” of the scale. Depending upon the period of the delay in payment, the penalty arising from the premium component can be very significant as it was in the present case (being 24% of the duty assessed on the premium).

103.   In Incise Technologies, the Appeal Panel identified …four cumulative criteria which are relevant to the exercise of the discretion under s 25:

1.   All principal tax that is owing and not in dispute has been fully paid;

2.   There has been cooperation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments;

3.   Such cooperation has occurred prior to any investigation being commenced by the Commissioner or, at the very least, within a reasonable time after the request for information had been made by the Commissioner; and

4.   There has been no wilful default by the taxpayer in not paying tax on time.

104.   The Appeal Panel noted in Incise Technologies at [63] that the first of these criteria could be clarified to be “all principal tax that has been assessed and is not in dispute has been fully paid at the time of the request for remission of interest” and that while they were all relevant and appropriate matters for consideration, they were not exhaustive. That the four criteria are not exhaustive has been confirmed in subsequent cases, eg. Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107 at [179] and Chief Commissioner of State Revenue v E Group Security Pty Ltd (No 2) [2022] NSWCA 259 at [105]-[106].”

  1. It is also necessary to have regard to the fact that remission of interest is not an “all or nothing” approach; rather, it is necessary to assess culpability and the personal circumstances of the Applicant, i.e. other matters that may have set her case apart from the “usual situation”: Wan at [86] and [90]

  2. As noted above, there was no relevant error made by the Applicant personally. It is clear to me that she relied upon her solicitor, and that a reasonable person in her position would have assumed that he would raise any matters regarding duty payable with her (given he had provided duty advice to her).

  3. I also note that no concerns were raised by the Respondent regarding the first and fourth factors in Incise Technologies being satisfied.

  4. However, the Respondent also noted the issues regarding a lack of adequate co-operation with the Respondent after the investigation was notified, and the evidence is unclear as to what, if any, involvement the Applicant had in relation to the investigation or the responses provided. Of particular concern is the failure to respond in a timely way (or comprehensively) to requests for information, most notably the request from the Respondent to the solicitor to provide a valuation of the Property. As a result, the Respondent was put to the task of determining an estimate for the purpose of the Reassessment and, later, the expense of obtaining the valuation report filed in these proceedings.

  5. In those circumstances, and taking into account my finding above that the Applicant took reasonable care, I am satisfied that it is appropriate for the premium rate to be remitted by 50%.

  6. I also do not agree with the Applicant’s submissions that there is any useful analogy to be drawn between this case and the over-reporting of income in an income tax return. This case turns on the particular facts in respect of the system of land registrations and transfers, and the consequences that arise upon application of the specific provisions in the Duties Act. Those provisions may be difficult and complex. Ultimately, as adverted to in O’Neill Tyres Gateshead Pty Ltd & Cessnock Tyres Pty Ltd v Chief Commissioner of State Revenue [2020] NSWCATAD 314 at [56], it is important to promote attempts at compliance which are both sincere and careful.

Conclusion and orders

  1. The correct and preferable decision is that:

  1. the first transfer was liable to ad valorem duty, which is to be recalculated based on a revised dutiable value of $1,075,000;

  2. penalty tax is to be remitted to 12.5% and recalculated; and

  3. interest is to also be recalculated applying the full market rate but remitting the premium rate by 50%.

  1. I therefore make the following order, pursuant to s 101(1)(d) of the TA Act:

  1. The matter is remitted to the Respondent for determination in accordance with paragraph 82 of these reasons.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.


Registrar

Decision last updated: 28 October 2025

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