MacLachlan v The Commissioner of State Revenue
[2016] QCAT 463
•24 November 2016
CITATION: | MacLachlan v The Commissioner of State Revenue [2016] QCAT 463 |
PARTIES: | Malcolm Richard MacLachlan |
| v | |
| The Commissioner of State Revenue (Respondent) | |
APPLICATION NUMBER: | GAR128-16 |
MATTER TYPE: | General administrative review matters |
HEARING DATE: | On the Papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Gardiner |
DELIVERED ON: | 24 November 2016 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The reassessment notice issued by The Commissioner of State Revenue dated 26 September 2014 is confirmed |
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – TAXATION – where parties contracted to buy a unit in a retirement village – where 6 months later the unit was sold under a put option or buyback contract – where resold to village management not original seller – where duty re-assessment made by Commissioner – where party sought refund of original duty as option exercised – whether one contract or separate contracts of sale and resale for purposes of duty Duties Act 2001 (Qld): s91, s115 |
This matter was heard and determined on the papers, pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
Malcolm MacLachlan and his wife contracted to buy a unit in a retirement village on 11 December 2014. They settled the contract and took possession of the unit on 22 December 2014.
The contract was for the purchase of a residential lot in a Community Titles Scheme and used the contract form approved by the Queensland Law Society and the Real Estate Institute of Queensland.
The contract was for the sale of the unit by the then owner and resident of the unit to Mr and Mrs MacLachlan. The seller was not the management company operating the Village. The completion of the contract was subject to Mr and Mrs MacLachlan also entering a Residence Agreement with the management company.
The Commissioner assessed transfer duty on the acquisition at the concessional rate as Mr and Mrs MacLachlan intended to live in the unit as their home[1].
[1]Duties Act 2001 (Qld) s 91.
This intention changed and Mr and Mrs MacLachlan sold the property on 30 June 2105.
It was sold under a clause of the Residence Agreement which was an annexure to the original contract called a “put option” or buyback contract which was agreed between the partes for the considertion of $1.00 and was to operate for 6 months after the commencment date of the original sale contract.
The Put Option bound Mr and Mrs MacLachlan to sell to the Village operators.
The Commissioner for State Revenue re-assessed the original duty paid to remove the concession previously allowed as Mr and Mrs MacLachlan had not lived in the unit for 12 months from the date of purchase. A re-assessment of duty on the original sale was issued on 6 August 2015.
Mr MacLachlan requested the whole of the original duty be returned to him on the basis that the unit was sold under the terms of the original contract. The Commissioner took this request to be an objection to the re-assessment.
In Mr MacLachlan’s view, the re-sale of the unit was simply an option available to him under the contract that put the parties back in the position they were in before the orignal transaction. As such, the duty paid should also be refunded.
Mr MacLachlan views the contact as a conditional contract[2]. He says:
·Either the procession was to the completion of the sale of the unit or to release Mr MacLachlan from his obligation to purchase the unit if he changed his mind under the buyback or put option in the contract;
·The option was exercised and accepted in the time allowed under the contract;
·The Commissioner cannot separate the individual parts of the contract;
·Considering the contract as a whole, no sale has taken place and the duty paid should be refunded.
[2]Submissions received 24 August 2016.
Section 24 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) sets out the function of this Tribunal on review. The Tribunal may confirm or amend the decision, set aside the decision and substitute its own, or set aside the decision and return the matter for reconsideration to the decision maker with directions if appropriate.[3]
[3]QCAT Act s 24(1).
The purpose of the review is to produce the correct and preferable decision and is heard and determined by way of a fresh hearing on the merits.[4]
[4]Ibid, s 20.
The Commissioner submits that:
·The contract for the purchase of the unit was performed and the legal title of the property changed to show Mr and Mrs MacLachlan as the title holders;
·The exercise of the put option gave rise to a new contract made on 30 June 2105 and this cannot affect a contract completed for the purchase of the property on 22 December 2014;
·This later contract did not operate to substitute obigations as those obligations under the original contract had been fulfilled;
·The original purchase money was not “refunded” but rather Mr MacLachlan received consideration under the buyback contract from the management company – someone not a party to the original contract;
·The parties to the original contract were not returned to their orignal positions – only Mr MacLachlan – as the unit was sold to a different third party and not back to the original owner;
·Section 115 of the Duties Act 2001 (Qld) does not apply because the original contract was not cancelled for breach by a party, non-fulfilment of a condition, or frustration;
·In fact the original contract was wholly performed.
Discussion
A plain reading of the Residence Agreement satisfies me that this buyback agreement – set up with its own consideration, terms and different parties to the original contrat of sale, is a separate contract to the original contract.
Further evidence of this separate agreement is that the parties to the original contract were not returned to their orignal positions – only Mr and Mrs MacLachlan – as the unit was sold to a different third party and not back to the original owner
Having been satisfied of the existence of a separate later contract, I accept the submissions of The Commissioner.
I am satisifed the original contract was wholly performed and the legal title of the property changed to show Mr and Mrs MacLachlan as the title holders.
I find the exercise of the put option gave rise to a new contract made on 30 June 2105 and this did not affect the original contract completed for the purchase of the property on 22 December 2014. Mr MacLachlan received consideration under the buyback contract from the management company who was not a party to the original contract.
Section 115 of the Duties Act 2001 (Qld) does not apply because the original contract was not cancelled for breach by a party, non-fulfilment of a condition, or frustration.
I am therefore satisfied that the re-assessment decision of The Commissioner of 6 August 2015 shoud be confirmed and will so order.
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