Perpetual Trustee Company (Canberra) Ltd v Commissioner for Australian Captial Territory Revenue
[1994] FCA 367
•09 JUNE 1994
PERPETUAL TRUSTEE COMPANY (CANBERRA) LIMITED v. COMMISSIONER FOR AUSTRALIAN
CAPITAL TERRITORY REVENUE
No. ACTG127 of 1993
FED No. 367/94
Number of pages - 16
Stamp Duty - Administrative Law
(1994) 28 ATR 307
(1994) 94 ATC 4403
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
DAVIES(1), NEAVES(2) AND WILCOX(3) JJ
CATCHWORDS
Stamp Duty - Deed of appointment of new trustee of unit trust - Retiring trustee registered as proprietor under Real Property Act 1925 (ACT) of Crown lease of land in Australian Capital Territory - New trustee becoming registered as proprietor of Crown lease pursuant to request to Registrar of Titles (ACT) under s.138A of Real Property Act - Whether deed of appointment of new trustee properly characterised as "an agreement for a transfer of a Crown lease" and consequently liable to stamp duty.
Administrative Law - Administrative Appeals Tribunal (ACT) - Review of decision disallowing objection to assessment to stamp duty - Question whether deed of appointment of new trustee of unit trust liable to stamp duty - Question determined on basis of agreed statement of facts and certain documentary material - Decision by Tribunal and, on appeal, by Supreme Court of the Australian Capital Territory that instrument dutiable - Decision set aside on further appeal to Federal Court of Australia - Matter remitted to Tribunal to be heard and decided again on basis that agreed facts presented to Tribunal did not deal with all those matters which Tribunal should have had before it.
Stamp Duties and Taxes Act 1987 (ACT), s.17(1)(b)
Stamp Duties (Conveyances) Determination 1987 (No.3), clauses 4 and 6
Real Property Act 1925 (ACT), s.138A
Trustee Act, 1925-1942 (NSW) as applied and modified in the Australian Capital Territory, s.9
HEARING
CANBERRA, 12 April 1994
#DATE 9:6:1994
Counsel for the appellant: Mr I. Gzell and
cross-respondent and Mr A. Robertson
Solicitors for the appellant: Mallesons Stephen Jaques
cross-respondent
Counsel for the respondent: Mr D.F. Jackson QC and
cross-appellant and Mr P.F. Carnovale
Solicitor for the respondent: ACT Government Solicitor
cross-appellant
ORDER
1. The appeal be allowed.
2. The judgment of the Supreme Court of the Australian Capital Territory be set aside and, in lieu thereof, it be ordered that the decision of the Australian Capital Territory Administrative Appeals Tribunal be set aside; that the matter be remitted to the Australian Capital Territory Administrative Appeals Tribunal to be heard and decided again with or without the hearing of further evidence but in accordance with the direction that, if the evidence before the Australian Capital Territory Administrative Appeals Tribunal remains the same, the deed of appointment is not a dutiable instrument; and that the Commissioner for Australian Capital Territory Revenue pay the costs of Perpetual Trustee Company (Canberra) Limited of the application to that Court.
3. The cross-appeal be dismissed.
4. The respondent (cross-appellant) pay the costs of the appellant (cross-respondent) of the appeal and cross-appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
DAVIES J The facts of the matter, so far as they were known to the Administrative Appeals Tribunal ("the Tribunal") and are known to this Court, and the relevant legislation to be applied are set out in the reasons for judgment of Neaves J I need not repeat them.
I agree with Neaves J that, on the agreed facts on which the Administrative Appeals Tribunal made its decision, the deed of appointment made on 14 June 1989 was not an "agreement for a transfer of a Crown Lease" for the purposes of s.17(1)(b) of the Stamp Duties and Taxes Act 1987 (ACT). A mere application to have a trustee registered under a Real Property Act, is not without more a dutiable transfer or conveyance: Dixon v. Chief Commissioner of Stamp Duties (1985) 3 NSWLR 347.
The Tribunal concluded that the deed of appointment was an agreement for a transfer of a Crown Lease and that finding of the Tribunal was upheld on appeal. However, the exercise of a power to appoint a new trustee is not in its essence a consensual act, save that the new trustee must consent to the appointment. It is the exercise of an authority which has been conferred upon the donee of the power, usually by an instrument. See Farwell on Powers, 3rd ed. p.1. As the exercise of the power is not made in the context of a contractual relationship, it is inappropriate to imply a consensual term into the deed of appointment. The implication is not required to make the appointment effective.
The matter should in my opinion be remitted to the Administrative Appeals Tribunal to be heard and decided again, with or without the hearing of further evidence. I am not satisfied that the agreed facts which were presented to the Tribunal dealt with all those matters which an administrative decision-maker such as the Administrative Appeals Tribunal, should have before it. The Tribunal was standing in the shoes of the Commissioner for Australian Capital Territory Revenue and was authorised to give such decision in the matter in substitution for the decision of the Commissioner as it saw fit.
The agreed facts did not disclose how and when Capital Property Corporation Pty Limited ("CPC") disposed of the beneficial interest in the Crown Lease in respect of the subject property, Block 19, section 23 Division of City. Nor did the agreed facts disclose whether the deed of appointment was executed as part of that transaction and with a view to implementing it, or in anticipation thereof, or whether the removal of CPC as trustee of the trust and the appointment of Perpetual Trustee Co. (Canberra) Ltd ("Perpetual") was entirely unconnected with the sale of the property.
The Commissioner suspects that the deed of appointment was not merely that which, on its face, it purported to be. Counsel for the Commissioner contended, for example, that the "T and G Trust" had come to an end when CPC became both the trustee and the sole beneficiary. Cases such as In re Selous; Thompson v. Selous (1901) 1 Ch 921 at 922, Re Turkington; Owen v. Benson (1937) 4 All ER 501 at 504 and DKLR Holding Co. (No.2) Pty Ltd v. Commissioner of Stamp Duties (1982) 149 CLR 431 at 442, 463 and 473 were relied upon. Counsel's submissions would appear to be correct but, even so, the effect would merely be that the deed of appointment, which was also executed by Perpetual, would have taken effect as a declaration of trust. Unlike most stamp duties enactments in Australia, the Stamp Duties and Taxes Act does not impose duty upon a declaration of trust.
The words in s.17(1)(b) of the Stamp Duties and Taxes Act "a transfer or an agreement for a transfer of a Crown lease" do not, in my opinion, refer only to a document which is either a transfer registrable under the Real Property Act 1925 (ACT) or an agreement for the execution of such a transfer. Although the Stamp Duties and Taxes Act does not contain a comprehensive provision such as s.65 of the Stamp Duties Act 1920 (NSW) or s.54 of the Stamp Act 1891 (UK), nevertheless it would appear that the Act may, in an appropriate case, encompass a document which the parties have executed to effect a transfer of a Crown lease or by which they agree to effect such a transfer, notwithstanding that the document is not itself a registrable transfer or an agreement that a registrable transfer will be brought into being.
Section 4(1) of the Stamp Duties and Taxes Act defines "conveyance" in broad terms to include "a transfer, assignment or grant of a lease of land" and "an agreement for a transfer, assignment or grant of a lease of land." Schedule 1, which at the time was headed "Exempt Conveyances" though it is now entitled "Conveyances Attracting Prescribed Stamp Duty", specified inter alia, in paragraph (f), a transfer or assignment made in consequence of the appointment or retirement of a trustee, or a change in the trustees, in order to vest the estate or lease, as the case may be, in the trustees for the time being entitled to hold it, but not being made in connection with a tax avoidance scheme. See also paras (g) and (h). It follows that a deed of appointment, which effects a change in the trustee or trustees, which vests the trust estate in the trustee or trustees entitled to hold it and which is effective to cause the new trustee or trustees to be registered as the holder or holders of a Crown Lease, may be regarded as a transfer for the purposes of s.17(1)(b) of the Stamp Duties and Taxes Act which would not be exempt under Schedule 1 if it was made in connection with a tax avoidance scheme.
I do not wish to deal with this matter at any length or to express any concluded views upon it, for it was not debated in the appeal. However, I should make reference to Oughtred v. Inland Revenue Commissioners (1960) AC 206 in which somewhat similar issues arose, though under the much broader provisions of the Stamp Act of the United Kingdom. At 238, Lord Jenkins referred to a point which the present appellant would rely upon when his Lordship said:-
"It is said and said truly, that stamp duty is imposed on instruments, not transactions, and that a transaction of sale carried out without bringing into existence an instrument which has the effect of transferring to or vesting in the purchaser the property sold attracts no duty."
His Lordship referred to remarks of Lord Esher MR in Inland Revenue Commissioners v. G. Angus and Co (1889) 23 QBD 579, where Lord Esher said at 589:-
"If a contract of purchase and sale, or a conveyance by way of purchase and sale, can be, or is, carried out without an instrument, the case is not within the section, and no tax is imposed. It is not the transaction of purchase and sale which is struck at; it is the instrument whereby the purchase and sale are effected which is struck at."
Lord Jenkins went on at 238-9 to mention another point which the present appellants would also make:-
"It is said further that in the present case the disputed transfer transferred nothing beyond a bare legal estate, because, in accordance with the well-settled principle applicable to contracts of sale, between contract and completion the appellant became under the oral agreement beneficially entitled in equity to the settled shares, subject to the due satisfaction by her of the purchase consideration, and accordingly the entire beneficial interest in the settled shares had already passed to her at the time of the execution of the disputed transfer, and there was nothing left upon which the disputed transfer could operate except the bare legal estate."
However, Lord Jenkins rejected those contentions in the case before him and said at 241:-
"The parties to a transaction of sale and purchase may no doubt choose to let the matter rest in contract. But if the subject-matter of a sale is such that the full title to it can only be transferred by an instrument, then any instrument they execute by way of transfer of the property sold ranks for stamp duty purposes as a conveyance on sale notwithstanding the constructive trust in favour of the purchaser which arose on the conclusion of the contract." (emphasis added)
Lord Denning made the same point when he said at 233:-
"In my opinion, every conveyance or transfer by which an agreement for sale is implemented is liable to stamp duty on the value of the consideration. It is not necessary for the instrument of implementation to be between the same parties as the agreement for sale, nor for it to relate to the self-same property as the agreement for sale. Suffice it that the instrument is the means by which the parties choose to implement the bargain they have made. It is then a `conveyance or transfer `on sale' of any property - which I take to mean a conveyance or transfer consequent upon the sale of the property and in implementation of it." (emphasis added)
In Fitch Lovell Ltd v. Inland Revenue Commission (1962) 1 WLR 1325, Wilberforce J expressed the same views when he said at 1334:-
"Next, I think it is right to say that many documents which on the face of them would not appear to be conveyances or transfers on sale have been held to be such within the meaning of the Schedule to the Stamp Act, 1891. Those words `conveyance `or transfer on sale' have been given a wide extension. It is sufficient for a document to a conveyance or transfer on sale if it is the instrument chosen by the parties to complete the sale in such a way as to show that they did not intend any other document to be executed."
See also Comptroller of Stamps (Vic) v. Bromp Nominees Pty Ltd (1983) 83 ATC 4487.
It would be put by the present appellant that there was no transfer of the Crown Lease and no agreement to execute a transfer of the Crown Lease, for none was required. It would be argued that s.138A of the Real Property Act 1925 (ACT) provided a means of having the new trustee placed on the Register as the registered proprietor of the Crown lease without the necessity of bringing a transfer into existence. The point has much force but presently it seems to me that, if there was a sale and purchase of the beneficial interest in the subject Crown lease and if the deed of appointment was executed as the means by which the Crown lease would be conveyed from the vendor or a trustee for the vendor to the purchaser or a trustee for the purchaser, and thereby as the means by which the purchaser or a trustee for the purchaser would achieve registration as registered proprietor of the Crown lease, then the deed of appointment could be held to be a transfer of the Crown lease for the purposes of s.17 of the Stamp Duties and Taxes Act.
Having regard to the strange position which CPC purported to hold, that of trustee and sole beneficiary under the "T and G Trust", then if it was the vendor of the equitable interest in that trust, it could be that underlying facts if disclosed would show that the deed of appointment, executed both by itself in those two capacities and by the new trustee, Perpetual, was indeed intended to be and was the instrument by which the parties expressed their agreement that the property would be transferred into and registered in the name of Perpetual, as trustee for the purchaser of the beneficial interest.
Because these and like issues were open to be considered by the Tribunal and were not considered, I would remit the matter to the Administrative Appeals Tribunal to be heard and decided again. If, at the re-hearing, the Commissioner for the Australian Capital Territory chooses not to adduce any further evidence and the evidence remains as set out in the agreed facts, then the Administrative Appeals Tribunal will be bound to hold that the deed of appointment was not a dutiable instrument. However, if the Commissioner for the Australian Capital Territory Revenue chooses to call evidence which throws light upon the underlying events, that evidence may give a character to the deed of appointment which, on the agreed facts, it does not hold.
I would propose the cross-appeal be dismissed and that the appeal be allowed with costs. I would set aside the orders made by the trial Judge and would order in lieu thereof that the decision of the Tribunal be set aside and that the matter be remitted to the Administrative Appeals Tribunal to be heard and decided again with or without the hearing of further evidence but in accordance with the direction that, if the evidence before the Tribunal remains the same, the deed of appointment is not a dutiable instrument. The respondent should pay the costs of the application to the Supreme Court.
JUDGE2
NEAVES J:
Perpetual Trustee Company (Canberra) Limited ("Perpetual")
and the Commissioner for Australian Capital Territory Revenue ("the Commissioner") have respectively appealed and cross-appealed from the judgment of the Supreme Court of the Australian Capital Territory (Higgins J) given on 10 December 1993 in a proceeding by way of appeal pursuant to s.46(1) of the Administrative Appeals Tribunal Act 1989 (ACT) from the decision of the Australian Capital Territory Administrative Appeals Tribunal ("the Tribunal") given on 31 May 1993.
The decision of the Tribunal was given upon the review, pursuant to s.24 of the Administrative Appeals Tribunal Act and s.91 of the Taxation (Administration) Act 1987 (ACT), of a decision disallowing an objection to an assessment to stamp duty under s.17(1)(b) of the Stamp Duties and Taxes Act 1987 (ACT) notice of which was given by letter dated 9 June 1992. The assessment was based on a document dated 14 June 1989 and headed "Deed of Appointment" to the text of which it will be necessary to refer.
The objection lodged on behalf of Perpetual was based on a number of grounds. The hearing before the Tribunal, however, was, by agreement between the parties, confined to the preliminary question whether the deed of appointment was dutiable under the Stamp Duties and Taxes Act. That question was debated before the Tribunal on the basis of an agreed statement of facts and certain documentary material. The Tribunal concluded that -
"The Commissioner was correct in treating the deed of appointment as an agreement for the transfer of a Crown lease, but not in assessing duty on the basis that the value of the interest in land so agreed to be transferred was the unencumbered value of the lease ..."
The Tribunal was of the opinion that, as the whole beneficial interest in the Crown lease was the subject of a trust, the value of the property transferred was to be regarded as no more than nominal. The Tribunal decided that the decision under review, that is to say the decision disallowing the objection, be set aside and that the matter be remitted to the Commissioner for reconsideration in accordance with the directions of the Tribunal.
The Commissioner applied to the Supreme Court by way of appeal from the Tribunal's decision. In that proceeding Perpetual filed a notice of contention. The Supreme Court made the following orders -
"1. The appeal be upheld.
2. The decision of the Administrative Appeals Tribunal appealed from is set aside.
3. The matter be remitted to the ACT Administrative Appeals Tribunal for further determination in accordance with the reasons of (sic) the decision of this Court given on 26 November 1993 and the reasons given for determining the notice of motion filed by the Appellant dated 1 December 1993.
4. There be no order as to costs."
The reference in order number 3 to the Appellant is a reference to the Commissioner.
The notices of appeal and cross appeal filed in this Court proceeded on the basis that each of the parties had a right of appeal from the judgment of the Supreme Court. Upon the matter coming on for hearing, however, the parties acknowledged that the judgment of the Supreme Court was an interlocutory judgment within the meaning of that expression in s.24(1A) of the Federal Court of Australia Act 1977 (Cth). The parties respectively applied for leave to appeal and cross appeal from the judgment of the Supreme Court and such leave was granted.
At the material time, s.17(1) of the Stamp Duties and Taxes Act provided -
"(1) The determined amount of stamp duty is payable on:
(a) a transfer, or an agreement for a transfer, of an estate in fee simple;
(b) a Crown lease (not being a lease referred to in paragraph
(ca)), or a transfer or an agreement for a transfer of a Crown lease;
(ca) a Crown lease granted to the lessee of a previous Crown lease (whether or not of the same parcel of land) because of the surrender of the previous Crown lease;
(c) a lease of land (not being a Crown lease); or
(d) a transfer or assignment, or an agreement for a transfer or assignment, of a lease of land (not being a Crown lease)."
Section 4(1) of that Act provided that the expression "determined amount", in relation to stamp duty, was to have the same meaning as in the Taxation (Administration) Act. Section 4(1) of the latter Act defined the expression, in relation to stamp duty, to mean:
"(a) the amount determined under subsection 99(1) for the purposes of the provision in which the expression appears; or
(b) the amount calculated at the rate determined by the Minister under subsection 99(1) for the purposes of the provision in which the expression appears".
Section 99(1) of the Taxation (Administration) Act relevantly provided that the Minister might, by notice in the Commonwealth of Australia Gazette determine -
"(a) The amount of tax, duty or a licence fee payable under a tax law;
(b) the rate at which, or the method by which, an amount of tax, duty or a licence fee, payable under a tax law, is to be calculated;
..."
The Stamp Duties (Conveyances) Determination 1987 (No.3) dated 21 September 1987 and published in the Commonwealth of Australia Gazette of that date was expressed to be made pursuant to s.99(1) of the Taxation (Administration Ordinance) 1987 (ACT). Clause 4 provided:
"A reference in this determination to an amount set out in a Schedule means an amount calculated by applying the formula appearing in Column 2 of the relevant Schedule, opposite and in relation to the appropriate range of value or consideration specified in Column 1 of that Schedule, to the value of the interest transfered (sic) or agreed to be transfered (sic) or to the consideration given or agreed to be given, as the case may be, in respect of:
(a) a transfer, or an agreement for a transfer, of an estate in fee simple;
(b) a Crown lease, or a transfer or an agreement for a transfer of a Crown lease; or
(c) a transfer or assignment, or an agreement for a transfer or an assignment of a lease, as the case may be."
Clause 6 provided -
"The determined amount of stamp duty for the purposes of section
17(b) of the Ordinance for a Crown lease, a transfer or an agreement for a transfer of a Crown Lease is the amount set out in Schedule 1."
The reference to "the Ordinance" was a reference to the Stamp Duties and Taxes Ordinance 1987 (ACT). Schedule 1 prescribed, by means of various formulae, the method of calculating the amount of duty payable, the method of calculation varying according to "the value of the interest" in the land.
Upon the coming into operation on 11 May 1989 of s.22 of the Australian Capital Territory (Self-Government) Act 1988 (Cth) and by virtue of the operation of s.5 of the Self-Government (Citation of Laws) Ordinance 1989 (ACT), the Taxation (Administration) Ordinance 1987 (ACT) and the Stamp Duties and Taxes Ordinance 1987 (ACT) respectively became the Taxation (Administration) Act 1987 (ACT) and the Stamp Duties and Taxes Act 1987 (ACT). The present matter has proceeded on the basis that the Stamp Duties (Conveyances) Determination 1987 (No.3) continued in force on and after 11 May 1989 but amended by substituting for the references therein to the Stamp Duties and Taxes Ordinance references to the Stamp Duties and Taxes Act (see s.3 of the Self-Government (Transitional Provisions) Ordinance 1989 (ACT), s.6 of the Self-Government (Citation of Laws) Ordinance and the definition of "subordinate law" in s.14(1) of the Interpretation Act 1967 (ACT)). It has also been accepted that the reference in cl.6 of the Stamp Duties (Conveyances) Determination 1987 (No.3) to "section 17(b) of the Ordinance" is to be read as referring to s.17(1)(b) of the Stamp Duties and Taxes Act.
Reference should also be made to the provisions of s.18 of the Stamp Duties and Taxes Act. That section provided that stamp duty was not payable on a conveyance of a kind specified in Schedule 1 to the Act. The expression "conveyance" was defined in s.4(1) to mean -
"(a) a lease of land, or a transfer, assignment or grant of a lease of land;
(b) an agreement for a transfer, assignment or grant of a lease of land;
(c) a transfer of an estate in fee simple; or
(d) an agreement for a transfer of an estate in fee simple."
Schedule 1, which was headed "Exempt Conveyances", relevantly provided:
"A conveyance:
...
(f) by way of a transfer or assignment of an estate in fee simple or a lease of land, being an estate or lease held on trust, where the transfer or assignment:
(i) is made in consequence of the appointment or retirement of a trustee, or other change in the trustees, in order to vest the estate or lease, as the case may be, in the trustees for the time being entitled to hold it; and
(ii) is not made in connection with a tax avoidance scheme;
(g) by way of a transfer or assignment of a lease of land, or a transfer of an estate in fee simple, where the transfer or assignment:
(i) is from a trustee to a person who contributed the purchase money for the conveyance to the trustee; and
(ii) is not made in connection with a tax avoidance scheme;
(h) of land held on trust where:
(i) the conveyance is made by the trustee to a beneficiary of the trust (otherwise than for valuable consideration) and does not constitute a breach of the trust;
(ii) stamp duty on the conveyance of the land to the trustee has been paid or was not payable; and
(iii) the conveyance referred to in subparagraph (i) is not made in connection with a tax avoidance scheme;
..."
The deed of appointment upon which the assessment to stamp duty was based was in the following terms -
"DEED OF APPOINTMENT
THIS DEED is made the 14 day of June 1989
BETWEEN: CAPITAL PROPERTY CORPORATION PTY LIMITED a company incorporated in the Australian Capital Territory and having its registered office at Advance Bank Centre, 60 Marcus Clarke Street, Canberra (the 'Unit Holder') AND: CAPITAL PROPERTY CORPORATION PTY LIMITED the company referred to above (the 'Existing Trustee') AND: PERPETUAL TRUSTEE COMPANY (CANBERRA) LIMITED a company incorporated in the Territory and having its registered office at 4th Floor, Perpetual Trustees Building, 10 Rudd Street, Canberra (the 'New Trustee') RECITALS:
A. By deed made 2 March 1977 between PATRICK JOSEPH McGLADE as Settlor and the Existing Trustee (then called 'Stirling Finance Co. Pty Limited') (the 'Trust Deed') the Settlor settled upon the Existing Trustee the sum of $100 and established the 'T and G Trust'.
B. The Unit Holder as trustee of the 'Empire Trust' is the sole unit holder of the T and G Trust.
C. The Existing Trustee wishes to be removed from the trusts of the T and G Trust.
D. It is provided in clause 25(d)(i) of the Trust Deed that the unit holders of the T and G Trust may remove any trustee from office and it is further provided in clause 25(d)(ii) of the Trust Deed that the unit holders of the T and G Trust shall have power by resolution to appoint a substitute trustee upon any rustee ceasing for any reason whatsoever to be a trustee of the T and G Trust.
E. It is further provided in clause 25(f) of the Trust Deed that a new trustee so appointed shall execute a deed in such form as is submitted by the unit holders whereby such new trustee shall undertake to the unit holders all of the obligations of the trustee under the Trust Deed and that from the date of the deed any retiring or removed trustee shall be released from all further obligations under the deed.
F. The Unit Holder has resolved to remove the Existing Trustee as the trustee of the T and G Trust and to appoint the New Trustee as substitute trustee of the TandG Trust in place of the Existing Trustee.
G. The New Trustee has sought an indemnity from the Existing Trustee in relation to any action claim or demand which may be made against the New Trustee as a result of the acts or omissions of the Existing Trustee.
OPERATIVE PROVISIONS:
1. The Unit Holder being the sole unit holder of the T and G Trust in exercise of the power given to it in clause 25(d)(i) of the Trust Deed resolves to remove the Existing Trustee as trustee of the T and G Trust.
2. The Unit Holder in exercise of the power given to it in clause 25(d)(ii) of the Trust Deed resolves to appoint as substitute trustee of the T and G Trust in place of the Existing Trustee the New Trustee and declares that the estate and interest in the property of T and G Trust shall vest in the New Trustee from the date of this deed.
3. The New Trustee consents to its appointment as trustee of the T and G Trust and at the request of the Unit Holder undertakes to the Unit Holder all of the obligations of the trustee under the T and G Trust.
4. From the date of this deed the Existing Trustee is released from all obligations under the Trust Deed.
5. The Existing Trustee HEREBY INDEMNIFIES the New Trustee in respect of any action claim or demand brought against the New Trustee as a result of the acts or omissions of the Existing Trustee in the performance of its obligations under the Trust Deed SUBJECT ALWAYS to any indemnity the Existing Trustee may have against the assets of the T and G Trust."
The deed was executed by Capital Property Corporation Pty Limited ("CPC") in two capacities, as trustee of the "Empire Trust" and as trustee of the "T and G Trust". The deed was also executed by Perpetual.
The unit trust known as the "T and G Trust" was established by a deed expressed to have been executed on 2 March 1977 between Patrick Joseph McGlade, referred to as "the Founder", and Stirling Finance Co. Pty Limited, referred to as "the Trustee". The original number of units was 2,000,000. The original unit holders were two companies, M.R.T. Properties Pty Limited and Vancouver Nominees Pty Limited, each of which held 1,000,000 units. The Trustee was to stand possessed of the Trust Fund and the income thereof upon trust for the unit holders upon the trusts and subject to the powers and provisions expressed in the deed (cl.2). The expression "The Trust Fund" was defined in cl.1 to include all moneys, investments and property paid or transferred to and accepted by the Trustee by way of application moneys for units and the moneys, investments and property from time to time representing the said moneys, investments and property (if any) and any accretions thereto.
Clause 1(C) of the deed provided that nothing in the deed was to constitute or to be deemed to constitute the relationship of principal and agent between the Trustee and the Unit-holders nor the relationship of partners as between the Trustee and the Unit-holders.
Clause 25 relevantly provided:
"(d) The Unit-holders shall have power by Resolution:
(i) to remove any trustee from office
(ii) to appoint a substitute trustee upon any trustee ceasing for any reason whatsoever to be a trustee hereof, and
(iii) to appoint an additional trustee or trustees up to any number subject to such limit (if any) as may for the time being be imposed by law.
(e) A trustee shall on retirement or removal take such action as is necessary to vest the Trust Fund or cause it to be vested in any new trustee or trustees and shall deliver to such new trustee or trustees all books documents records and other property relating to the Trust Fund;
(f) A new trustee so appointed shall execute a deed in such form as is submitted by the Unit-holders whereby such new trustee shall undertake to the Unit-holders jointly and severally with any other new or continuing trustees all of the obligations of the Trustee hereunder and from the date of the Deed any retiring or removed trustee shall be released from all further obligations under this Deed."
At the relevant time, CPC, as trustee of "The Empire Trust", was the holder of all the units in the "T and G Trust", having acquired those units on 21 June 1985. There was, however, no material before the Tribunal as to the circumstances in which CPC acquired those units.
"The Empire Trust" was established by a deed made on 24 May 1984 between Robert Alva Snow, described as "the Settlor", and Stirling Finance Co. Pty Limited, described as "the Trustee". "The Empire Trust" was a discretionary trust and has been referred to in the course of the proceedings herein by that description.
At the time of the execution on 14 June 1989 of the Deed of Appointment to which reference has been made, CPC was registered under the Real Property Act 1925 (ACT) as the proprietor of the Crown lease over the subject land in the Australian Capital Territory, being Block 19 Section 23 Division of City (Register Book Volume 1104 Folio 39). That Crown lease was acquired by CPC after 21 June 1985.
At the relevant time, s.9(1) of the Trustee Act, 1925-1942 (N.S.W.) as applied and modified in the Australian Capital Territory by the Trustee Act 1957 (ACT) provided:
"Where a new trustee is appointed, the execution and registration of the deed of appointment shall, without any conveyance, except as otherwise provided in this section, vest in the persons who become and are the trustees for performing the trust, as joint tenants and for the purposes of the trust, the trust property for which the new trustee is appointed."
Section 9(3) provided, inter alia, that land, an expression defined in s.5 to include a leasehold estate, which was subject to the Real Property Act 1925 (ACT) did not vest until -
(a) the appropriate transfer was registered so that the land was duly transferred; or
(b) an entry of the vesting of the land was made in the proper register kept under the provisions of the Act to which the land was subject.
By s.9(3A), for the purposes of s.9(3), an entry of the vesting of land was to have the same effect as the registration of a transfer of the land.
By a document also dated 14 June 1989, Perpetual requested the Registrar of Titles (ACT), pursuant to s.138A of the Real Property Act, "to make an entry on Crown Lease Volume 1104 Folio 39 of the vesting in Perpetual Trustee Company (Canberra) Limited the new trustee of the leasehold estate comprised in the Crown Lease consequent upon the execution of the deed". The reference to "the deed" is, of course, a reference to the Deed of Appointment dated 14 June 1989. Section 138A of the Real Property Act provided:
"(1.) Where any land, estate or interest under the provisions of this Act is held by a trustee, either solely or jointly with other trustees, and -
(a) the trustee vacates his office and a new trustee is appointed in his place or the vacancy is not filled; or
(b) an additional trustee is appointed to hold the land, estate or interest jointly with the existing trustees,
the Registrar, upon receipt of the instrument effecting the vacancy or appointing the new or additional trustee, or of an office copy thereof, or of a copy thereof verified by affidavit, or upon production of such other evidence as the Registrar thinks sufficient, and upon being satisfied that the vacation of office or the new or additional appointment, as the case may be, is in accordance with law, shall, subject to this Act, enter in the Register Book upon the folium constituted by the grant or certificate of title of the land effected and on such instruments as he thinks fit, a memorandum setting forth the fact of the vacation of the office or of the new or additional appointment, as the case may require.
(2.) Upon the entry being made, the new trustee, the continuing trustees, or the continuing trustees and the new trustee or the additional trustee, as the case may be, shall be deemed to be the registered proprietor or proprietors of the land, estate or interest, and as such to be subject to the provisions of this Act as if he or they were the trustee or trustees originally registered as proprietor or proprietors of the land, estate or interest.
(3.) For the purposes of this section, 'trustee' includes an assignee or trustee of a bankrupt or insolvent registered proprietor, and an executor or administrator of the estate of a deceased proprietor."
It may be assumed, though there is no direct evidence on the point, that an appropriate entry was subsequently made.
By letter dated 30 August 1989, CPC wrote to Perpetual in the following terms:
"Advance Bank Centre
We note that you are the registered as (sic) proprietor of the crown lease issued in respect of Block 19 Section 23 Division of City upon which is erected the Advance Bank Centre and that you hold the lease as trustee of the T and G Trust. As we have disposed of our beneficial interest in the property, we request that you execute declaration of trust in respect of the property in favour of Capital Property Trust."
There was before the Tribunal no material concerning the establishment of the Capital Property Trust and no material to show how the Crown lease here in question became subject to that trust.
By deed made on 31 August 1989, Perpetual declared "that it holds the unexpired residue of the leasehold estate to block 19 section 23 division of city in certificate of title volume 1126 folio 73 in its capacity as trustee of the Capital Property Trust".
The threshold question, which was decided by the Tribunal and by the Supreme Court adversely to the appellant, is whether the Deed of Appointment dated 14 June 1989 is properly to be characterised, in terms of s.17(1)(b) of the Stamp Duties and Taxes Act, as "an agreement for a transfer of a Crown lease".
The basis upon which the Tribunal reached its decision was that the Deed of Appointment alone could not be fully effective for the purpose of enabling Perpetual to become, and exercise the rights of, the registered proprietor of the relevant Crown lease and that it must, therefore, be assumed to have been in the contemplation of the parties to that deed that some further step would take place to achieve that result. The Tribunal said that, without that further step, the arrangement would not have been effective to allow CPC to retire completely as trustee, although that appeared plainly to have been the intention of the deed and, in particular, the latter part of clause 2 of its operative provisions. In the Tribunal's view, the Deed of Appointment was, in consequence, properly treated as an agreement for a transfer of a Crown lease.
The Supreme Court reached the same conclusion. Having said that the Deed of Appointment did not require CPC to execute a memorandum of transfer of its legal title or to make application under s.138A of the Real Property Act but did effect a transfer in equity of all the right, title and interest of that company in the Crown lease to Perpetual, the Court continued:
"It seems to me that the President was correct to assume that, by virtue of its appointment as trustee in place of CPC, Perpetual was entitled to require CPC to cooperate in perfecting its legal title. That entitlement was created by the Deed of Appointment. It follows that the Deed can properly be characterised as an agreement by CPC to transfer its title to Perpetual and to execute all such documents as may be necessary to effect that result."
The deed establishing the "T and G Trust" empowered the Unit-holders, by resolution, to remove a trustee from office and appoint a substitute trustee (cl.25(d)). The Deed of Appointment dated 14 June 1989 evidences the making of such a resolution by CPC as the sole Unit-holder, the resolution having the effect of removing that company from office and substituting Perpetual as trustee. The Deed of Appointment also records the consent of Perpetual to its appointment as such trustee and, in accordance with cl.25(f) of the deed establishing the "T and G Trust", its undertaking all the obligations of the trustee under that deed. The only other relevant provision in the Deed of Appointment is the declaration in cl.2 by CPC, as sole Unit-holder, that "the estate and interest in the property of the T and G Trust shall vest in the New Trustee from the date of this deed". The effect of that declaration is by no means clear as the property was vested in CPC not as the sole Unit-holder but as trustee. As such trustee, it was obliged by cl.25(e) of the deed establishing the "T and G Trust" to take such action as was necessary to vest the Trust Fund, including the Crown lease here in question, or cause it to be vested in Perpetual as the new trustee.
As the Crown lease was subject to the provisions of the Real Property Act, it could become vested in Perpetual as the new trustee only upon compliance with the requirements of that Act. In the events which occurred, it became unnecessary for CPC to take any steps towards effecting the registration of Perpetual as the proprietor of the Crown lease. Such registration was effected by virtue of the operation of s.138A of the Real Property Act upon the request made under that section by Perpetual.
Although the parties to the Deed of Appointment no doubt contemplated that Perpetual would, by some appropriate means, become registered as the proprietor of the Crown lease, the Deed of Appointment does not, in terms, record any agreement between the parties as to the necessity for such registration or the means by which it was to be achieved. Nor is it necessary, in order to give efficacy to the document, to imply any agreement in relation to those matters. In those circumstances, I am unable to agree with the conclusion reached by the Tribunal and the Supreme Court that the Deed of Appointment is properly to be characterised, in terms of s.17(1)(b) of the Stamp Duties and Taxes Act, as "an agreement for a transfer of a Crown lease". It follows that the Deed of Appointment was not subject to stamp duty under that Act.
In the light of the conclusion which I have reached on the threshold question, it is unnecessary to consider the other questions on which submissions were made.
I would, therefore, allow the appeal, set aside the judgment of the Supreme Court and, in lieu thereof, order:
(1) that the decision of the Tribunal be varied by deleting the words "and that the matter be remitted to the Commissioner for A.C.T. Revenue for reconsideration in accordance with the directions of the Tribunal" and substituting therefor ", the objection to the assessment to stamp duty notice of which was given by letter dated 9 June 1992 be allowed and the assessment be set aside";
(2) that the appellant Commissioner pay the costs of the respondent Perpetual of the application to the Supreme Court.
I would dismiss the cross-appeal. I would further order that the respondent (cross-appellant) pay the costs of the appellant (cross-respondent) of the appeal and cross-appeal.
JUDGE3
WILCOX J I agree with the reasons expressed by Neaves J for concluding that, on the facts so far disclosed, the deed of appointment dated 14 June 1989 is not an "agreement for a transfer of a Crown Lease". If those are the whole of the material facts, the document is liable to no more than nominal duty.
However, I agree with Davies J that the procedure adopted in this case by the Administrative Appeals Tribunal was unsatisfactory. The Tribunal agreed to determine the critical question in the case on the basis of a statement of agreed facts that was patently inadequate. If we were concerned with a decision of a court, made on the basis of issues framed by the parties' pleadings, there would be much force in an argument that, the case having been fought on those issues, the unsuccessful party should not be allowed a second chance. However, we are not concerned with such a decision, but with the decision of a body whose function was "to review the administrative decision that is under attack before it". Those words were used by Bowen CJ and Deane J in Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 in relation to the Commonwealth Administrative Appeals Tribunal, but they apply equally to its Australian Capital Territory counterpart. The statutory function of the Tribunal requires that it form its own view about the matter in issue. In approaching that task, it is legitimate for the Tribunal to be guided by the parties as to the salient issues and to accept relevant admissions of fact, but the Tribunal should never permit parties to place it in the position of deciding a case on an artificial or inadequate factual basis.
The facts agreed between the present parties, and tendered to the Tribunal as the basis for its decision, included a reference to the disposition of Capital Property Corporation Pty Limited's beneficial interest in the leasehold parcel that was the subject of the trust. The parties did not spell out the significance of this fact. Nor did they give the Tribunal any information as to the transaction that gave rise to the disposition. They did not reveal whether the disposition was part of the same transaction as the appointment of the new trustee in June, or was otherwise linked to it. If it was, as Davies J demonstrates, it may have a critical bearing upon the matter the Tribunal has to determine. If it was not, it is unclear why the parties included a reference to the disposition in the statement of agreed facts. Its inclusion suggests that the parties thought the matter relevant; yet the facts surrounding it were never explored.
The determination of a case on the basis of a statement of agreed facts is often a convenient course, but only where it is clear that the statement extends to all material facts. This condition was not fulfilled in the present case. Having regard to its statutory responsibility to make the appropriate decision, the Tribunal erred, in my opinion, in agreeing to use this statement for the purposes of determining whether the deed of appointment of new trustee was a transfer or an agreement for a transfer of a Crown lease.
I agree with the order proposed by Davies J.
1
3
0