Franke and Repatriation Commission (Veterans’ entitlements) - [2015] AATA 733

Franke and Repatriation Commission (Veterans’ entitlements) [2015] AATA 733 (21 September 2015)

Division

VETERANS' APPEALS DIVISION

File Number(s)

2015/0955

2015/0956

Re

Horst Franke

Linden Franke

APPLICANT

And

Repatriation Commission

RESPONDENT

DECISION

Tribunal
Dr Gordon Hughes, Member

Date 21 September 2015

Place Melbourne
The Tribunal affirms the decision under review
...........[sgd].............................................................
Dr Gordon Hughes, Member
VETERANS’ AFFAIRS – Whether a trust is a "controlled private trust" – whether applicants were "attributable stakeholders" – whether purported variation of the trust deed is legally effective – decision affirmed
Legislation
Veterans' Entitlements Act 1986 sections 52ZZB, 52ZZH, 52ZZJ
Cases
Jenkins v Ellett [2007] QSC 154
Secondary Materials
Veterans' Entitlements (Attributable Stakeholders and Attribution Percentages) Principles 2001
REASONS FOR DECISION
Dr Gordon Hughes, Member
21 September 2015

The applicants sought a review of a decision by the respondent which determined that Mr Franke's assets, for service pension assessment purposes, included 100% of the assets of the H&L Franke Family Trust (the Trust).
Specifically, the Tribunal was required to determine whether the Trust was a "controlled private trust" under the Veterans' Entitlements Act 1986 (the Act), whether the applicants were "attributable stakeholders" in the Trust, and the effect of a purported variation of the trust deed on 1 May 2015.
Legislation
Section 52ZZB(1) of the Act provides that:
(1) For the purposes of this Division, a trust is a designated private trust unless:
(a) all of the following conditions are satisfied:
(i) the trust is a fixed trust;
(ii) the units in the trust are held by 50 or more persons;
(iii) the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual or individuals to avoid the application of this Division and/or Part 3.18 of the Social Security Act; or
(b) the trust is a complying superannuation fund (see subsection (3)); or
(c) the trust is an excluded trust (see subsection (4)); or
(d) the trust is an FHSA trust (within the meaning of the First Home Saver Accounts Act 2008).
Section 52ZZH of the Act provides as follows:
Controlled private trusts
(1) For the purposes of this Division, a trust is a controlled private trust in relation to an individual if the trust is a designated private trust and:
(a) the individual passes the control test set out in subsection (2); or
(b) the individual passes the source test set out in subsection (3).
Control test
(2) For the purposes of this section, the individual passes the control test in relation to a trust if:
(a) the individual, or an associate of the individual (other than an associate covered by paragraph 52ZQ(1)(j)), is the trustee, or any of the trustees, of the trust; or
(b) a group in relation to the individual was able to remove or appoint the trustee, or any of the trustees, of the trust; or
(c) a group in relation to the individual was able to vary the trust deed or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] AATA 733
Decision Date: 21 September 2015

CaseChat Overview and Summary

In the case of Franke and Repatriation Commission, the applicants sought to challenge the Commissioner of Repatriation's decision regarding the status of a trust and their entitlements under veterans' affairs legislation. The dispute centred on whether the trust in question was classified as a "controlled private trust" and whether the applicants were "attributable stakeholders". Additionally, the applicants contested the legality of a purported variation of the trust deed. The matter was brought before the Administrative Appeals Tribunal in Australia.

The primary legal issues for the court to decide were the classification of the trust as a "controlled private trust" and the legitimacy of the proposed variation of the trust deed. The applicants argued that the trust was not a "controlled private trust" and that they were not "attributable stakeholders", thereby entitling them to certain benefits. The court was also required to determine whether the purported variation of the trust deed was legally effective.

The Tribunal found that the trust was indeed a "controlled private trust" and that the applicants were "attributable stakeholders". The court held that the purported variation of the trust deed did not affect the trust's status as a "controlled private trust" or the applicants' entitlements. The Tribunal concluded that the Commissioner's decision was legally sound and affirmed it.

The Tribunal's decision was affirmed, and the applicants' claims were dismissed. The applicants were not entitled to the benefits they sought under veterans' affairs legislation. The court did not find it necessary to determine whether the trust would cease to be a "controlled private trust" if the proposed variation of the trust deed were to take effect in the future. The orders of the Tribunal were that the decision under review be affirmed, and the applicants' claims were dismissed.

Orders

Orders of the court

The Tribunal affirms the decision under review

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

For the same reason, the Tribunal does not consider it necessary or appropriate to determine at this stage whether, in the event the trust deed is subject to an effective future variation in the manner proposed by the applicants, it would no longer be a "controlled private trust".Decision For the reasons set out above, the Tribunal affirms the decision under review.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Division	VETERANS' APPEALS DIVISION
File Number(s)	2015/0955 2015/0956
Re	Horst Franke Linden Franke
APPLICANT
And	Repatriation Commission
RESPONDENT

Tribunal	Dr Gordon Hughes, Member
Date	21 September 2015
Place	Melbourne