NEW COUNTRY DEVELOPMENTS PTY LTD and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE - [2025] WASAT 9

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: TAXATION ADMINISTRATION ACT 2003 (WA)
CITATION:   NEW COUNTRY DEVELOPMENTS PTY LTD and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE [2025] WASAT 9
MEMBER:   JUDGE F VERNON, DEPUTY PRESIDENT
HEARD:   15 AUGUST 2024
DELIVERED          :   6 FEBRUARY 2025
FILE NO/S:   VR 8 of 2023
BETWEEN:   NEW COUNTRY DEVELOPMENTS PTY LTD
Applicant
AND
SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE
Respondent

Catchwords:

Taxation - Application to review a decision on an objection to an assessment of duty on an agreement to transfer land and a transfer of land - Whether nominal duty should apply under s 116 and s 118 of the Duties Act 2008 (WA)

Legislation:

Duties Act 2008 (WA), Ch 1, s 3A(1)(a), Ch 2, s 9, s 10, s 11(1), s 11(1)(a), s 11(1)(b), s 11(1)(c), s 11(2), s 15(a), s 19, s 19(1), s 20, s 26, s 116, s 118, Sch 1
State Administrative Tribunal Act 2004 (WA), s 27(1), s 27(2)
Taxation Administration Act 2003 (WA), s 3(1), s 10, s 13(1), s 15, s 16, s 18(1), s 34(1), s 40(1)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr C D'Angelo
Respondent	:	Mr S Cobbett

Solicitors:

Applicant	:	Main Legal Studio Pty Ltd
Respondent	:	State Solicitor's Office

Case(s) referred to in decision(s):

Freedom Willetton Pty Ltd and Commissioner of State Revenue [2019] WASAT 69
Freedom Willetton Pty Ltd v Commissioner of State Revenue [2021] WASCA 38

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

By an application dated 13 February 2023, made pursuant to s 40(1) of the Taxation Administration Act 2003 (WA) (TAA), New Country Developments Pty Ltd (the Applicant) seeks review of two assessment notices issued by the Senior Revenue Consultant as delegate of the Commissioner of State Revenue (the Respondent), namely:
(a)a duties reassessment notice, dated 14 October 2021, issued in the amount of $23,914.50 in respect of an agreement to transfer Lot 96, 59 Railway Parade, Mount Lawley; and
(b)a duties assessment notice, dated 14 April 2021, issued in the amount of $51,885.50 in respect of the transfers of lots 2 and 4, 59 Railway Parade, Mount Lawley.
The purpose of the review, which is by way of hearing de novo, is to produce the correct and preferable decision at the time of the decision upon the review: s 27(1) and s 27(2) of the State Administrative Tribunal Act 2004 (WA).
In summary:
(a)the Applicant says the transactions were incorrectly assessed under the Duties Act 2008 (WA) (Act) at the general duties rate and that the nominal rate should have been applied on the assessment referred to in [1(b)] above and, in part, on the assessment referred to in [1(a)] above.
(b)the Respondent says that:
(i)the transactions were correctly assessed under the Act; and
(ii)in any event, the Applicant does not have standing to seek review of the assessment referred to in [1(b)] above.
For the reasons set out below, I have decided that the correct and preferable decision is that the transactions were assessable at the general duties rate. Accordingly, the application must be dismissed and it is not necessary for me to determine the issue of the Applicant's standing to seek review of the duties assessment notice referred to at [1(b)].

Issues

The parties agree that the issues for determination are:
(a)what dutiable transactions occurred;
(b)were those dutiable transactions chargeable with duty at the general rate, or with nominal duty, under the Act; and
(c)does the Applicant have standing to seek review of the duties assessment notice dated 14 April 2021.

Facts

The facts set out in [7] to [29] below are derived from the facts set out in the Respondent's statement of issues, facts and contentions (SIFC) dated 15 February 2024, which were accepted by the Applicant in its SIFC dated 8 May 2024, as supplemented by the documents tendered as exhibits by the parties and concessions made in oral submissions at the hearing on 15 August 2024.[1] I make findings of fact in accordance with those paragraphs.
[1] Respondent's SIFC at paras 1 to 39; Respondent's SIFC at paras 1 to 3; ts 31 and 32, 15 August 2024 as to concession regarding the date in para 9 of the Respondent's SIFC.
Prior to 15 January 2021, 59 Railway Parade, Mount Lawley, comprised of Lot 96 on plan 2343, being the whole of the land comprised in Certificate of Title Volume 1748 Folio 882 (Lot 96).
Between 30 August 2017 and 16 January 2020, Lot 96 was owned by John Carey, Mary Carey and Lucia Stott (the Owners).
At all material times the Applicant was the sole shareholder of Yokine Building Company Pty Ltd (Yokine).
On 26 September 2018,[2] the Owners, the Applicant and Yokine entered into a written agreement called 'Heads of Agreement' (the HOA). The HOA said, relevantly, that:
(a)the parties had agreed to construct three apartments at the rear of Lot 96 and to otherwise develop Lot 96 in accordance with the diagrams annexed to the HOA (clause 1);
(b)the Owners reserved to themselves 'all right title & interest in' the existing dwelling on Lot 96 identified in the diagrams as the 'existing office' (Existing Office) and one of the apartments identified in the diagrams as the 'Owner Retained Unit' (Retained Lot) (clause 3.3(a)(ii)(A));
(c)subject to retaining its interests in the Existing Office and Retained Lot, the Owners must transfer the unencumbered title of Lot 96 to the Applicant (clause 3.3(a)(ii)(B));
(d)the transfer would be on the basis that the title to Lot 96 would be transferred to the Applicant with the Owners retaining all beneficial interest in the Existing Office and Retained Lot (clause 3.3(a)(ii)(B));
(e)the Applicant would hold the Existing Office and Retained Lot on trust for the Owners (clause 3.3(b)); and
(f)when the subdivision of Lot 96 occurred in accordance with the diagrams, the certificates of title for the Existing Office and Retained Lot would be issued 'as of right and without consideration' to the Owners free from encumbrances (clause 3.3(b)(vi));
[2] The HOA was executed by the Owners on 21 September 2018, and executed by the Applicant in his personal capacity and on behalf of Yokine on 26 September 2018.
The diagrams attached to the HOA identified 'Lot 3' as the 'Retained Unit' [sic].
On 21 September 2018, the Applicant, as trustee for the La Bianca Unit Trust (the Unit Trust), executed a document titled 'Declaration of Trust' (the First Declaration of Trust). The First Declaration of Trust:
(a)defined as the 'Trust Interest', the interests in Lot 96 reserved to the Owners beneficially identified in the HOA 'as the Existing Office and the Retained Lot being areas identified in the diagrams annexed to this Deed' (Recital E); and
(b)provided that the Applicant held the 'Trust Interest' upon trust for the Owners, and that the Applicant did not have any beneficial interest in the 'Trust Interest' (clause 1.1(a) and (b)).
On or around 21 September 2018, the Applicant executed a further declaration of trust (the Second Declaration of Trust) declaring that:
… We are acquiring 59 Railway Parade Mount Lawley WA 6050 more particularly described as Lot 96 on Plan 2343 comprised in Certificate of Title Volume 1748 Folio 882 as trustee for the La Bianca Unit Trust.
On 22 May 2019, the City of Stirling issued a notice of conditional approval for a proposed development at Lot 96 (the Conditional Approval). The proposed development was required to comply with the approved plans attached to the Conditional Approval. Those plans include a floor plan depicting two ground floor units and a third unit on an upper floor.
On 9 August 2019, the Applicant, by its settlement agent, lodged a 'Duties Document Lodgment and Assessment Form' in respect of the HOA.
On or around 12 August 2019, the Owners and the Applicant signed a copy of the floor plan attached to the Conditional Approval:
(a)part of which was hatched with diagonal lines over a unit marked 'U2' and which represented proposed lot 2; and
(b)which was annotated with the words 'Approved Plans to form part of "Heads of Agreement" signed 30/9/18 and 4/10/19'.
On or around 11 October 2019, the parties executed a variation of the HOA to allow the Applicant to mortgage Lot 96.
On 7 November 2019, the Owners executed a transfer of Lot 96 to the Applicant, the consideration for which was said to be the HOA (First Transfer).
On 6 January 2020, a duties assessment notice was issued for $16,360 (the First Assessment), on the basis that Lot 96 was to be subdivided into proposed lot 1 and proposed lot 2, and proposed lot 2 was to be further subdivided. Nominal duty was charged on the transfer of proposed lot 1 and duty was charged at the general rate on the unencumbered value of proposed lot 2.
On 16 January 2020, the First Transfer was registered, transferring Lot 96 from the Owners to the Applicant, and a mortgage was registered on the title to Lot 96.
On 9 March 2020, the Owners registered a caveat on the title to Lot 96.
On 8 December 2020, the Western Australian Planning Commission issued a certificate endorsing the strata plan for Lot 96 and, on 15 January 2021, Strata Plan 82970 was approved (the Strata Plan).
On the Strata Plan, Lot 96 was divided into four lots, with areas of common property. The Existing Office was on that part of Lot 96 described as Lot 4 on the Strata Plan (Lot 4). The balance of Lot 96 was divided into three lots (individually Lot 1, Lot 2 and Lot 3). Lot 3 was depicted on the Strata Plan as being on the first floor above Lot 1 and Lot 2. The certificate of title for Lot 96 was cancelled and new certificates of title were issued for the four new lots.
On 24 February 2021, the Applicant and the Owners executed a transfer of Lot 2 and Lot 4 from the Applicant to the Owners (the Second Transfer).
On or around 24 February 2021, the Applicant's settlement agent lodged a duties valuation for Lot 2 and Lot 4 in the total sum of $1,180,000.
On 14 April 2021, a duties assessment notice was issued in the amount of $51,885 in respect of the Second Transfer (the Second Assessment).
On 7 May 2021, a 'Duties Preliminary View' was issued in relation to the assessment of duty on the HOA and the transfer of Lot 96 and, on 17 May 2021, the Applicant's settlement agent lodged a duties valuation for Lot 96 in the sum of $900,000.
On 14 October 2021, a duties reassessment notice was issued in the amount of $23,914.50 (the Reassessment), comprising $37,465.50 in respect of the HOA and a late lodgement penalty of $2,809, less the amount of $16,360, being the amount of the First Assessment. The Reassessment superseded the First Assessment.
On 12 October 2022, the Applicant's lawyer lodged an objection to the Reassessment and the Second Assessment (Objection). On 14 December 2022, the Respondent informed the Applicant that the Objection had been disallowed in full (Objection Decision).

Submissions

There is no dispute between the parties about the dutiable values of the transactions on which duty was assessed, which were derived from valuations provided by the Applicant's settlement agent. The dispute concerns the rate at which duty should have been assessed on the HOA and the Second Transfer.
The Applicant submitted that the effect of the HOA is that:
(a)until the conditions in the HOA were discharged, the Applicant held Lot 96 entirely on trust for the Owners;
(b)once the conditions were discharged, the Applicant:
(i)continued to hold that part of Lot 96 represented by the Existing Office and the Retained Lot, which ultimately became Lot 2 and Lot 4, on a bare trust for the Owners; and
(ii)became beneficially entitled to that part of Lot 96 excluding that part represented by the Existing Office and the Retained Lot, which ultimately became Lot 1 and Lot 3.
The Applicant submitted that there was 'a single transaction'. That is the Applicant appeared to submit that duty should be assessed on what it said was the net effect of the HOA, the First Transfer and the Second Transfer.
In any event, ultimately, the Applicant submitted that:
(a)the duty on the HOA should be assessed at the general rate on the unimproved value of that part of Lot 96 that was to be retained by the Applicant and not on the value of that part of Lot 96 that the Applicant held on trust for the Owners, being the Existing Office and the Retained Lot; and
(b)the Second Transfer should have been assessed for nominal duty, being limited to the portion of Lot 96 that had been held on trust for the Owners by the Applicant.
In making this submission, the Applicant relied on s 116 and s 118 of the Act, which provide for circumstances in which nominal duty will apply. In particular, as I understood the Applicant's submissions, it said that:
(a)section 116 applied to the Second Transfer because Lot 2 and Lot 4 were wholly or substantially the same as the property the subject to the First Declaration of Trust, being the Existing Office and the Retained Lot, and there had been no consideration for the transfer; and
(b)section 118 applied to the assessment of duty on both the HOA and the Second Transfer because the Applicant held the Existing Office and the Retained Lot as a bare trustee for the Owners.
In its written submissions, the Applicant also sought to rely on s 120 of the Act which imposes nominal duty on certain transfers of dutiable property by way of security. At the hearing on 15 August 2024 the Applicant's counsel abandoned reliance on that provision. In addition, the Applicant's counsel properly conceded at the hearing that:
(a)the subdivision of 59 Railway Parade was not a single tier strata scheme as defined in the Strata Titles Act 1985 (WA), Sch 2A cl 3; and
(b)accordingly, s 120A and s 120B of the Act, which provide for nominal duty on transactions for the sole purpose of facilitating the subdivision of land, do not apply by reason of the operation of s 120D of the Act.
In addition, in its oral submissions, the Applicant disclaimed reliance on the Second Declaration of Trust and said that, despite the wording of that document, the intention of the Second Declaration of Trust was not to declare that the Applicant held any property on trust for the Owners but, rather, to declare a trust in relation to the part of Lot 96 the Applicant was to take beneficially.
The Respondent contended that there were two separate transactions on which duty was chargeable, submitting that:
(a)the HOA was an agreement to transfer dutiable property, namely Lot 96, and was therefore a dutiable transaction within the meaning of s 11(1)(b) of the Act; and
(b)the Second Transfer was a transfer of dutiable property, namely Lot 2 and Lot 4, and was therefore a dutiable transaction within the meaning of s 11(1)(a) of the Act.
The Respondent submitted that the purported retention by the Owners in the HOA of a beneficial interest in part of Lot 96 is consistent with the HOA being an agreement for the transfer of Lot 96 from the Owners to the Applicant upon which duty was chargeable pursuant to s 11(1)(a) of the Act. However, the Respondent said that, even if that was not the effect of the HOA, duty was chargeable on the First Transfer.
The Respondent submitted that s 118 of the Act did not apply to either of the dutiable transactions in this case because:
(a)the Applicant did not hold Lot 96 solely on trust for the Owners;
(b)even if the Applicant had held Lot 96 solely on trust for the Owners, it did not hold Lot 96 as a bare trustee with no active duties or powers;
(c)whilst there was an initial transfer of Lot 96 from the Owners it was not transferred back to the Owners, and the transfer of Lot 2 and Lot 4 was the transfer of different dutiable property; and
(d)the Owners were not the only people to hold a beneficial interest in Lot 96 between the original transfer and the subsequent transfer.
The Respondent submitted that s 116 of the Act did not apply to the Second Transfer because the First Declaration of Trust was not duty endorsed, even if it could be said to be a declaration of trust for the purposes of the Act given that the Strata Plan had not been approved at the time the declaration was made.
The Respondent also submitted that the Applicant has no standing to apply for review of the refusal to allow the objection to the Second Assessment because, as the Owners were the persons liable to pay the duty, not the Applicant, the Applicant was not the taxpayer in relation to the Second Assessment.
On the issue of standing, the Applicant submitted that:
(a)the Applicant was a taxpayer liable to pay the Second Assessment, because the Applicant had a liability to the Owners under the HOA to pay the stamp duty assessed on the Second Transfer. The Applicant, therefore, had a right to object to the Second Assessment, under s 34(1) of the TAA, and a right to seek review of Objection Decision under s 40(1) of the TAA; and
(b)in any event, the Applicant met the definition of 'a person dissatisfied with' the Second Assessment, within the meaning of s 40(1) of the TAA, which term was not limited to a taxpayer.

Legislative Framework

The Act is a 'taxation Act' under s 3(1) of the TAA. Under s 10 of the TAA the Commissioner may delegate any of the Commissioner's functions under a taxation Act except certain powers not presently relevant. It is not in dispute that the Respondent was the Commissioner's properly authorised delegate.
Section 13(1) of the TAA provides for the determination of tax payable under a taxation Act, and the liability of a person for the payment of that tax. Section 15 of the TAA provides for the Commissioner to issue assessments of the tax payable by a person. Section 16 of the TAA provides for the circumstances in which the Commissioner must, or may, make a reassessment. Under s 18(1) of the TAA, a reassessment of an assessment supersedes the assessment.
A taxpayer may object to an assessment other than a compromise assessment under s 34(1)(a) of the TAA. Under s 40(1) of the TAA 'a person dissatisfied with the Commissioner's decision on an objection' may apply to the State Administrative Tribunal for a review of the decision.
Section 10 of the Act provides that duty is imposed on dutiable transactions. Section 11(1) of the Act defines dutiable transactions subject to certain exceptions set out in s 11(2). Relevantly a 'dutiable transaction' includes the transfer of dutiable property,[3] an agreement for the transfer of dutiable property whether conditional or not,[4] and a declaration of trust over dutiable property.[5] Relevantly, the term 'dutiable property' includes land in Western Australia.[6] 'Land' is defined to include any estate or interest in land.[7]
[3] Duties Act 2008 (WA) (Duties Act), s 11(1)(a).
[4] Duties Act, s 11(1)(b).
[5] Duties Act, s 11(1)(c).
[6] Duties Act, s 15(a).
[7] Duties Act, s 3A(1)(a).
Section 9 of the Act defines a declaration of trust as:
any declaration (other than by will) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons, or the purpose or purposes, mentioned in the declaration, although the beneficial owner of the property, or the person entitled to appoint the property, may not have joined in or assented to the declaration.
In summary, by the operation of s 19(1), s 20 and Sch 1 of the Act:
(a)where there is a transfer of dutiable property within the meaning of s 11(1)(a) of the Act, the dutiable transaction is the transfer, the liability for transfer duty arises when the property is transferred, and the person liable to pay the transfer duty is the transferee; and
(b)where there is an agreement for transfer of dutiable property within the meaning of s 11(1)(b) of the Act, the dutiable transaction is the agreement for transfer, the liability for transfer duty arises when the agreement is made, and the person liable to pay the transfer duty is the purchaser or transferee.[8]
[8] The Applicant accepts that the HOA was not terminated at any time. Accordingly, s 19(2) of the Duties Act has no application.

Section 26 of the Act provides that duty is chargeable at the general rate of duty unless otherwise provided by Ch 2 of the Act. In this case, s 116 and s 118 are the only relevant provisions of Ch 2.
Section 116 of the Act provides that:
(1)Nominal duty is chargeable on a transfer of, or an agreement for the transfer of, dutiable property by the trustee of a trust, other than a unit trust scheme or a discretionary trust, other than a unit trust scheme or a discretionary trust, to the beneficiary of the trust if —
(a)there is no consideration for the transfer or agreement; and
(b)the transfer, or agreement, is under or in conformity with the trusts contained in the declaration of trust.
(2)Subsection (1) applies only if the property the subject of the agreement or transfer is —
(a)wholly or substantially the same as the property the subject of the declaration of trust and the declaration of trust is —
(i)duty endorsed; or
(ii)an exempt transaction;
or
(b)dutiable property representing the proceeds of reinvestment of property referred to in paragraph (a); or
(c)property to which both paragraphs (a) and (b) apply.
(3)Subsection (1) does not apply to a subsequent transfer to which section 118(1) applies.
Section 118 of the Act provides that:
(1)Nominal duty is chargeable on a transfer (the subsequent transfer) if —
(a)there has been a dutiable transaction (the original transfer) that is a transfer of dutiable property from a person (the transferor) to another person who is to hold the property solely as a bare trustee for the transferor; and
(b)any of the following transactions (the endorsed transaction) is duty endorsed —
(i)the original transfer
(ii)the agreement for the original transfer;
(iii)the declaration of trust;
and
(c)the subsequent transfer is a transfer of the dutiable property back to the transferor or to a person to whom the transferor's beneficial interest in the property has been transmitted by death or bankruptcy; and
(d)the Commissioner is satisfied that, between the original transfer and the subsequent transfer, no person other than the transferor has held a beneficial interest in the dutiable property (other than the trustee's right of indemnity).
(2)In subsection (1) –
bare trustee —
(a)means a trustee of a trust, other than a unit trust scheme or a discretionary trust, if the trustee has no active duties or powers in relation to the trust other than conveying the dutiable property to the transferor or as directed by the transferor; and
(b)includes a trustee appointed in substitution for a trustee or a trustee appointed in addition to a trustee or trustees.
(3)If nominal duty is chargeable on a subsequent transfer under subsection (1), nominal duty is also chargeable on the endorsed transaction.
(4)The Commissioner, on the application of the taxpayer, is to reassess the liability to duty of the endorsed transaction in accordance with subsection (3)[.]

Consideration of the Issues

What dutiable transactions took place?

Lot 96 was land in Western Australia and therefore dutiable property within the meaning of s 15(a) of the Act. As the HOA was an agreement for the transfer of dutiable property, duty was chargeable on the HOA, whether it was conditional or not, by s 10 and s 11(1)(b) of the Act.
By s 19(1) and Sch 1 of the Act, liability for duty on the HOA arose at the time of its execution on 26 September 2018. By s 20 and the Sch 1 of the Act, the Applicant, as the transferee, is the person liable to pay the duty.
Lot 2 and Lot 4 are also land in Western Australia and therefore dutiable property within the meaning of s 15(a) of the Act. As the Second Transfer was a transfer of dutiable property, duty was chargeable on it, by s 10 and s 11(1)(a) of the Act. The Owners, as the transferees, were liable to pay the duty, pursuant to s 20 and Sch 1 of the Act.
By s 118(3) of the Act, if s 118 does apply, nominal duty would be chargeable on both the HOA, as the 'endorsed transaction', and the Second Transfer, as the 'subsequent transfer'.
Section 116(1) of the Act cannot apply to the assessment of duty on the HOA as there is no dispute the HOA was not an agreement to transfer dutiable property by a trustee of a trust to a beneficiary of a trust, as is required. In addition, by s 116(3), s 116(1) can only apply to the Second Transfer if s 118(1) does not apply. Accordingly, I will deal with the application of s 118 first.

Is nominal duty chargeable pursuant to s 118 of the Act?

There are a number of matters that, in my view, prevent the Applicant from falling within s 118(1) of the Act in this case.
First, in this case the 'original transfer' under s 118(1) is the First Transfer, by which 'dutiable property' was transferred by the Owners to the Applicant. As envisaged by the HOA, the whole of Lot 96 was transferred to the Applicant by the First Transfer. On the Applicant's case, the Applicant held part of Lot 96 for its own benefit, and not 'solely' as trustee for the Owners.
Second, the same dutiable property that was the subject of the First Transfer was not transferred back to the Owners by the Applicant under the Second Transfer, as required by s 118(1)(c) of the Act. Only a part of the land that formerly comprised Lot 96 was transferred back to the Owner; being Lot 2 and Lot 4.
In relation to these two points, it may be that what the Applicant was seeking to argue is not that there was a single dutiable transaction governed by the HOA but rather that, by the HOA there were two dutiable transactions being:
(a)an agreement to transfer to the Applicant absolutely that part of Lot 96 that ultimately became Lot 1 and Lot 3, which would attract duty at the general rate; and
(b)an agreement to transfer to the Applicant, on trust for the Owners, that part of Lot 96 that ultimately became Lot 2 and Lot 4, which should attract duty at the nominal rate.
However, as the Respondent submitted, an absolute owner does not hold separate legal and equitable estates. The Court of Appeal held, in Freedom Willetton Pty Ltd v Commissioner of State Revenue[9] (Freedom Willetton), that:[10]
… An absolute owner does not hold two estates, one legal and one equitable; an absolute owner holds only the legal estate with all the rights and incidents that attach to that estate. Thus, where the holder of the fee simple estate in land transfers it to another to hold it on trust for the transferor, it is not correct to say that only a bare legal estate is transferred. Any equitable interests are not carved out of the legal estate, as transferred, but are engrafted onto the legal estate held by the transferee.
[9] Freedom Willetton Pty Ltd v Commissioner of State Revenue [2021] WASCA 38.
[10] Freedom Willetton [81].
The Applicant argues that the facts of Freedom Willetton are different from the current situation. That may be accepted. However, in my view, the factual differences do not negate the relevance of the underlying principle.
Accordingly, by the First Transfer, the Owners transferred the whole of the fee simple in Lot 96. After that transfer occurred, the Owners had enforceable equitable rights against the Applicant, under the terms of the HOA, creating an interest in Lot 96 sufficient to support a caveat, which they lodged. It may be that terms of the HOA would have entitled the Owners to enforce the transfer of Lot 2 and Lot 4 to them, when those lots came into existence, had the Applicant refused to do so. However, the effect of the First Transfer was to transfer the whole of the Owners' estate in Lot 96 to the Applicant.
Third, the Applicant did not hold Lot 96 as a bare trustee, as that term is defined in s 118(2)(a) of the Act. The Applicant clearly had power to deal with Lot 96 beyond conveying that land to the Owners or as directed by the Owners. In particular, the Applicant had the power to mortgage Lot 96, which it exercised. Even assuming that the Applicant separately held the part of Lot 96 that ultimately became Lot 2 and Lot 4 on trust for the Owners, which it did not, it still could not be said that the Applicant held that part as a bare trustee. Clearly, the parties intended the Applicant to exercise the power to mortgage over the entirety of Lot 96, as it did.
In addition, it has been held that the powers conferred on trustees by the Trustees Act 1962 (WA) must be expressly excluded in order for the provisions of s 118 of the Act to apply.[11] There is no evidence of that in this case.
[11] Sharpe J in Freedom Willetton Pty Ltd and Commissioner of State Revenue [2019] WASAT 69 at [199] on a point not raised in the subsequent appeal, concerning a previous wording of s 118 which did not require the trust be a 'bare' trust.
For these reasons, in my view, nominal duty is not chargeable on either the HOA or the Second Transfer by reason of s 118(1) of the Act.

Is nominal duty chargeable on the Second Transfer pursuant to s 116 of the Act?

It does not appear to be in dispute that there was no consideration paid by the Owners for the Second Transfer and the Applicant did not hold Lot 2 and Lot 4 under a unit trust scheme or a discretionary trust, as required by s 116(1)(a) of the Act.
There is a lack of evidence to support a finding that the property the subject of the Second Transfer could be said to be 'substantially the same' as the property the subject of the First Declaration of Trust, as required by s 116(2)(a), even assuming that property could be said to be 'identified' at the time of the First Declaration of Trust. Although the First Declaration of Trust identified the Trust Interest by reference to 'annexed' diagrams, the copy of the First Declaration of Trust in evidence does not have a diagram attached to it. However, it was not in dispute that that part of Lot 96 that became Lot 2 was not the part originally identified as the Retained Lot under the HOA. That appears, originally, to have been the part that became Lot 3. It appears from the facts in [16] above that the change in the part of Lot 96 which was identified as the Retained Lot occurred in August 2019, nearly a year after the First Declaration of Trust was made. Accordingly, it might be inferred that the First Declaration of Trust did not identify the area that became Lot 2 as part of the Trust Interest. However, I make no finding in relation to this, as the deficiency in the exhibited copy of the First Declaration of Trust was not drawn to the Applicant's attention at the hearing.
However, even assuming that the First Declaration of Trust was a declaration that the Applicant held on trust that part of Lot 96 that became Lot 2 and Lot 4, the Applicant accepted that the First Declaration of Trust was not duty endorsed as required by s 116(2)(a)(i) of the Act. There was no evidence before me that it had been submitted for duty. There was no submission that it was an exempt transaction falling within s 116(2)(a)(ii). Accordingly, nominal duty is not chargeable on the Second Transfer by reason of s 116 of the Act.

Conclusion

I have concluded that s 118 of the Act does not apply to the HOA or the Second Transfer, and that s 116 of the Act does not apply to the Second Transfer, and nominal duty was not chargeable on either transaction. As a result, duty was chargeable on both transactions at the general rate of duty, under s 26(1)(b) of the Act.
For these reasons I conclude that the correct and preferable decision is that:
(a)the Second Assessment correctly charged duty on the Second Transfer at the general rate of duty;
(b)the Reassessment correctly charged duty on the HOA at the general rate of duty; and
(c)the Applicant's application should be dismissed.
Given this conclusion, it is not necessary for me to determine the issue of the Applicant's standing to seek review of the Second Assessment.

Orders

The Tribunal orders that:
1.The application is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
GH
Associate to Deputy President Judge Vernon
6 FEBRUARY 2025