Montessori Children's Foundation v Commissioner of State Revenue
[2025] QCAT 63
•17 February 2025
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Montessori Children’s Foundation v Commissioner of State Revenue [2025] QCAT 63
PARTIES:
MONTESSORI CHILDREN’S FOUNDATION ATF THE MASTERMAN MONTESSORI INDIGENOUS CHILDREN’S TRUST (Applicant)
v
COMMISSIONER OF STATE REVENUE (Respondent)
APPLICATION NO/S:
GAR 134-23
MATTER TYPE:
General administrative review matters
DELIVERED ON:
17 February 2025
HEARING DATE:
16 October 2024
HEARD AT:
Brisbane
DECISION OF:
Judicial Member Forrest SC
ORDERS:
1. Pursuant to section 24(1)(b) of the Queensland Civiland Administrative Tribunal Act2009 (Qld) (QCAT Act), the Respondent’s objection decision made on 20 December 2022 be set aside.
2. Pursuant to section 24(1)(b) and (c) of the QCAT Act:
(a) the Applicant’s application for registration of a charitable institution dated 2 November 2020 be approved pursuant to s 149B of the Taxation Administration Act 2001 (Qld) (Administration Act);
(b) the Masterman Montessori Indigenous Children’s Trust be registered as a charitable institution under s 149D and 149G of the Administration Act with a date of registration of 26 October 2020;
(c) the Applicant (being the Montessori Children’s Foundation as trustee for the Masterman Montessori Indigenous Children’s Trust) be registered as a charitable institution pursuant to s 149D and 149G of the Administration Act with a date of registration of 26 October 2020; and
(d) the matter is otherwise returned to the Respondent for the Respondent to amend the assessments made on 31 March 2022 and amended on 1 April 2022, pursuant to s 19(2) of the Administration Act, such that the duty assessed is nil.
3. If either party seeks an order for costs, that party must provide submissions in writing supporting such an order to the Associate to the President and to the other party within twenty-one days of this decision.
4. If such submissions are provided, the other party may provide submissions in writing in response to the Associate and to the party applying within twenty-one days of receiving such submissions.
5. Any submissions in writing in reply are to be provided within seven days of receiving the submissions in response.
6. If submissions seeking costs are received, the Tribunal will decide the question of costs on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
CATCHWORDS:
TAXES AND DUTIES – STAMP DUTIES – EXEMPTIONS – CONVEYANCE OR TRANSFER ON SALE OF REAL PROPERTY – QUEENSLAND – where the Commissioner of State Revenue refused an exemption to stamp duty – where the Applicant sought a review of the Commissioner’s decision to refuse the exemption – whether the Applicant is an “institution” within the meaning of s 149C of the Taxation Administration Act 2001 (Qld)
Taxation Administration Act 2001 (Qld) s 69(2)(b), s 149A, s 149B, s 149C, s 149I
Mayor etc of Manchester v McAdam [1986] AC 500
Minister of National Revenue v Trusts & Guarantee Co Ltd [1940] AC 138
Stratton v Simpson (1970) 125 CLR 138
APPEARANCES & REPRESENTATION:
Mr M. May instructed by Donovan Winkler Lawyers Pty Ltd for the Applicant.
Mr H. Lakis instructed by Commissioner of State Revenue for the Respondent.
REASONS FOR DECISION
On 24 November 2020, the Applicant executed three transfers giving effect to contracts it had entered into for the purchase of properties in Cairns. It sought exemption from stamp duty liability in respect of those transfers on the basis of registration as a charitable institution under Part 11A of the Taxation Administration Act 2001 (Qld) (“the Administration Act”). That registration was refused by the Respondent and stamp duty of an amount close to $200,000 was assessed to be paid by the Applicant.
The Applicant objected to the refusal decision and has been in dispute with the Respondent on this issue ever since, making application for review of the refusal decision to this Tribunal pursuant to s 69(2)(b) of the Administration Act.
When the review application came before me for hearing, the Applicant and the Respondent remained in dispute about one essential matter, namely, whether as at the relevant date, being 24 November 2020, the Masterman Montessori Indigenous Children’s Trust (“the Trust”) was “an institution” within the meaning of that term and thus entitled to registration pursuant to s 149C(1) of the Administration Act. It was further agreed that if the Trust was “an institution” as such, then, consequently, the Applicant was the trustee of “an institution” pursuant to s 149C(4), and thus also capable of being registered pursuant to s 149C(1) of the Administration Act.
As determination of that essential issue just described is dispositive of this review application, for all the reasons I now give, I am satisfied that the Trust was “an institution” within the meaning of that term in subsections 149C(2) or (3) of the Administration Act as at 24 November 2020 and thus entitled to registration under Part 11A of that Act effective as at that date, so as to entitle the Applicant to exemption from stamp duty on the assessed transfers. Accordingly, I will order that the Respondent’s objection decision made on 20 December 2022 be set aside, along with further consequential orders.
Some Factual Background
Mr Leslie Charles Masterman died in July 1991 at the age of almost 87 years. By his last will dated 17 April 1989 he appointed the Public Trustee to be his executor and trustee and made certain dispositions of certain property and gifts of money. He bequeathed much of his estate (said to total about $4 million) upon trust to “fall into and form part of property of the Aboriginal Montessori Educational Trust, a charitable trust established to further the education through the Montessori method of Aboriginal children in the Weipa area of Cape York Peninsula to be held and applied pursuant to the terms of the Deed establishing such trust”. However, no such Deed existed at the time of Mr Masterman’s death or ever did prior thereto. Supreme Court litigation followed in which the Public Trustee sought determination of the validity of the gift.
White J found that there was a valid gift and determined that it was to be given effect to by an administrative scheme developed by the Public Trustee. A pilot scheme was established in Cairns and was run by Mr Masterman’s daughter for a few years. Ultimately, in or around June 2005, the Supreme Court determined that the program had been a success and ordered the residual fund to be distributed. Pursuant to those orders, the Montessori Children’s Foundation was established and registered as a public company limited by guarantee. The Trust was established by Trust Deed on or about 31 December 2005 with the Montessori Children’s Foundation as the trustee.
There is no dispute that the objects of the Foundation and the Trust include pursuing charitable purposes only and to apply the income and property of the Foundation and the Trust to further the education of Indigenous children in the Cape York area through the application of the Montessori educational philosophy and method.
The board of the Foundation was to be selected by a person who was involved in various Montessori organisations. Under the Trust Deed, a member of the Masterman family was entitled to be an Advisory Trustee under a clause of the Trust Deed but had no entitlement to go to the board meetings of the Foundation. Between 2005 and 2018, a representative of the Masterman family would go to board meetings held for the Trust from time to time but not to board meetings of the Foundation.
In late 2018, a grandson of Mr Masterman’s, Mr Jorian Cunliffe, a man of some international business experience, returned to live in Cairns and began to enquire of the board of the Foundation as to how the Trust was operating. Mr Cunliffe has deposed to learning the following things:
(i)That between 2005 and 2009 the Trust established Montessori early childhood classrooms and curriculum through a number of islands in the Torres Strait, training local facilitators, with the Trust still providing funding to another organisation that continues delivering that project;
(ii)That for about three years commencing in or around 2013, the Trust paid to train a Montessori teacher to deliver such teaching in the Cape York area;
(iii)That between 2005 and 2013 the Trust engaged sponsor facilitators for Montessori style education programs throughout Cape York on an as needed basis, usually one to two times per year at schools throughout Cape York;
(iv)That the Trust supported the Puuya Foundation in the Lockhart River area of Cape York, providing funding for an early childhood centre there.
Concerned about some aspects of the running of the Trust and also by the fact that the money his grandfather had bequeathed was only earning interest in an investment account, Mr Cunliffe became more engaged, seeking to make it more reflective of the vision of his grandfather. In September 2019, Mr Cunliffe was appointed a director on the board of the Foundation and in December 2019, he was appointed CEO of the Foundation and CEO of the Trust. On appointment, he began an audit of the operation of the Trust which resulted in the Trust shifting its focus and activities.
Significantly, in terms of my determination of the dispositive issue in this review, under Mr Cunliffe’s leadership, the Trust began to increase its direct activities, in addition to its provision of funding to other organisations to provide Montessori services. Mr Cunliffe undertook study in the Abecedarian Approach Australia (a set of evidence-based teaching and learning strategies for early childhood educators), the circle of security parenting training, and other Montessori training methods. The Trust began to develop the program the Trust initially called “Raising Kids Right” and now calls “Raising Happy Kids.” In March 2020, the Trust engaged Ms Julia Hilson, said by Mr Cunliffe to be one of Australia’s pre-eminent Montessori trainers, to develop the curriculum for the program. Ms Hilson also worked with Mr Cunliffe in strategic planning for the roll-out of the program and the Trust reached out to its old partners it had been funding over the years in an effort to obtain data that the Trust could use in developing the program. A strategic planning session was facilitated in Byron Bay in mid-2020 with all the board members attending and a determination was made that it would be practical for the purposes of the Trust to have premises in Cairns out of which to direct and conduct the activities of the Foundation and the Trust.
On 14 October 2020, the Applicant entered into contracts to purchase three properties in Cairns and the sharehouse business operated from them so as to provide the Trust with real property assets that generated income and premises from which to conduct its activities and administration. The Trust then began delivering the Raising Happy Kids program to the Indigenous community in the Cairns area through a weekly playgroup that is free of charge to members of that community. The Trust has published the course content of the Raising Happy Kids program online, available for parents and program facilitators and it is available to be delivered in playgroup settings.
Why am I satisfied that the Trust was “an institution” within the requisite meaning of that term?
Pursuant to s 149A(1) of the Administration Act a person authorised by an institution may apply to the commissioner for registration of the institution under Part 11A. Pursuant to s 149B the commissioner must approve or refuse the application. Pursuant to s 149C(1) the commissioner may register the institution if it is an institution mentioned in subsections (2) to (4).
Sub-section 149C(3) provides that an institution may be registered if its principal object or pursuit:
(a)is fulfilling a charitable object or promoting the public good; and
(b)is not a leisure, recreational, social or sporting object or pursuit.
As I have already observed, there was no dispute between the parties that the Trust’s principal object or pursuit satisfies the criteria provided for in s 149C(3) set out in the immediately preceding paragraph. The only issue I had to be satisfied of was whether the Trust was an institution within the meaning of that term in the relevant section at the relevant time, namely 24 November 2020.
The term “institution” used in the context of revenue statutes similar to the Administration Act, has been the subject of much judicial discussion over the many decades since such legislation began to appear in the UK and throughout the common law jurisdictions.
In 1896, the House of Lords considered an exemption from income tax with respect to any building, the property of any literary institution. In that case, Lord Herschell referred to a dictionary definition that considered an institution “a system, plan or society, established either by law, or by the authority of individuals, for promoting any object, public or social”.[1] In the same case, Lord Macnaghten said:
It is a little difficult to define the meaning of the term “institution” in the modern acceptation of the word. It means, I suppose, an undertaking formed to promote some defined purpose having in view generally the instruction or education of the public. It is the body (so as to speak) called into existence to translate the purpose as conceived in the mind of the founders into a living and active principle.[2]
[1]Mayor etc of Manchester v McAdam [1986] AC 500, 507.
[2] Ibid, 511d.
In 1939, in a decision of the Privy Council on an appeal from the Supreme Court of Canada, delivered by Lord Romer, it was said:-
It is by no means easy to give a definition of the word “institution” that will cover every use of it. Its meaning must always depend upon the context in which it is found. It seems plain, for instance, from the context in which it is found in the subsection in question that the word is intended to connote something more than a mere trust. Had the Dominion legislature intended to exempt from taxation the income of every charitable trust, nothing would have been easier than to say so.[3]
[3]Minister of National Revenue v Trusts & Guarantee Co Ltd [1940] AC 138, 149-150
These British judicial pronouncements have been considered by our own Courts. Gibbs J in the High Court relevantly concluded that an institution is “an establishment, organisation or association instituted for the promotion of some object, especially one of public utility”.[4] The other judges of the High Court with the exception of Windeyer J agreed with Gibbs J’s consideration of the matter.
[4]Stratton v Simpson (1970) 125 CLR 138, 158
Accepting that Australian authority eschews a “mere trust” from being considered an “institution” in this statutory context, and that the legislative scheme, particularly through s 149I’s empowering the Commissioner to cancel an institution’s registration if satisfied that it is no longer entitled to be registered under Part 11A, creates a temporal relevance or context for the determination of the question. The evidence in this matter has satisfied me that the Trust was more than just a “mere trust” as at 24 November 2020. It was, I am satisfied, a body existing to translate the purpose as conceived in the mind of Mr Masterman and those who brought the Trust into existence into its living and active principle, to use the words of Lord Macnaghten.
I have set out the level of activity undertaken by the Trust from the time Mr Cunliffe became involved with it in 2019. None of his evidence about that was challenged or disputed by the Respondent. “Limited” though it may have been, as respectfully described by counsel for the Respondent, it nevertheless satisfied me that it took the Trust beyond simply being something that could be properly described as a “mere trust” and to the level of being an “institution” within the meaning of that term as intended in Part11A.
It follows that I consider that the Applicant was entitled to registration under Part 11A as at 24 November 2020 and that the Commissioner’s decision to refuse its registration was wrong.
The Consequence of my Findings
Section 20 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) provides that the purpose of the review of a reviewable decision, that is heard by way of a fresh hearing on the merits, is to produce the correct and preferable decision. That is what my orders must now provide for having regard to my findings.
The Applicant’s counsel handed up a draft of the orders sought on a successful review. Counsel for the Respondent respectfully pointed out that they needed to be amended slightly in the event that the Applicant was successful. Counsel for the Applicant respectfully accepted that was correct.
Accordingly, the orders I make are those asked for in the draft handed to me at the commencement of the review application incorporating the change urged upon me by counsel for the Respondent in the event I found in the Applicant’s favour. I also give directions for submissions as to costs.
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