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Re Di Donato and Brown

Re Di Donato and Brown

Case [2015] NSWSC 1923 18 December 2015

Statutory Construction

Adverse Possession

Mortgages & Security Interests

Taxation Law

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Supreme Court

New South Wales

Medium Neutral Citation: Re Di Donato & Brown [2015] NSWSC 1923
Hearing dates: 4 December 2015
Date of orders: 07 December 2015
Decision date: 18 December 2015
Jurisdiction: Equity
Before: White J
Decision:
Refer to para [1] of judgment.

Catchwords: DUTIES AND TAXES – mortgage duty – whether a charge created by solicitors’ costs agreement secured an “advance” within s 206 of the Duties Act – whether a forbearance to require payment was a “constructive” provision or obtaining of funds, and therefore an advance – consideration of Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCA 6; (2014) 85 NSWLR 443 – held that the forbearance was not an advance because it did not result in the provision or obtaining of funds in a real or effective sense
Legislation Cited: Civil Procedure Act 2005 (NSW)
Duties Act 1997 (NSW)
Legal Profession Act 2004 (NSW)
Cases Cited: Rix v Mahony [2009] NSWSC 675
Rix v Mahony [2011] NSWSC 1308
Rix v Mahony [2012] NSWCA 241
Rix v Mahony (No. 2) [2012] NSWCA 332; (2012) 16 BPR 31,315
Rix v Wells [2013] NSWSC 672
Rix v Wells (No. 2) [2013] NSWSC 1608
Jackson v Richards [2005] NSWSC 630; (2005) 12 BPR 23,091
Prime Wheat Association Limited v Chief Commissioner of Stamp Duties (1997) 42 NSWLR 505
Tozer Kemsley & Millbourn (Australasia) Pty Ltd v Point (1961) SR (NSW) 751
Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCA 6; (2014) 85 NSWLR 443
Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 21; (2013) 87 ATR 722
Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260
Texts Cited: Pannam, The Law of Money Lenders in Australia and New Zealand (1965) Law Book Company
Category: Procedural and other rulings
Parties: Romano Natalino Di Donato (1st Plaintiff)
Malcolm George Brown (2nd Plaintiff)
Benjamin & Khoury (Applicant)
Mr and Mrs Mahony (Applicants)
Frederick George Rix (Applicant)
R W Washington (Applicant)
Representation:
Counsel:
P R Glissan (Benjamin & Khoury)
M Oakes SC (Mr and Mrs Mahoney)
In Person (F Rix)
T Bray, solicitor (Estate of R W Washington)
Solicitors:

File Number(s): 2015/139269

Judgment

HIS HONOUR: On 7 December 2015 I made the following orders:

Order that the moneys paid into Court by the plaintiffs on 11 May 2015 and interest earned thereon be paid out to Benjamin & Khoury Pty Ltd (“Benjamin & Khoury”).

Note the agreement between Benjamin & Khoury and the representatives of the estate of the late Ronald William Washington that Benjamin & Khoury Pty Ltd will pay 14.184 per cent of the funds paid out of Court to the representatives of the late Mr Washington's estate.

Order that as soon as reasonably practicable after receipt of the funds to be paid to it pursuant to order 1 Benjamin & Khoury pay 14.184 per cent of such funds to Carolyn McEwan Washington and Elizabeth Carolyn Washington in their capacity as representatives of…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Re Di Donato and Brown

Details

AGLC: Re Di Donato and Brown [2015] NSWSC 1923
Case: [2015] NSWSC 1923
Decision Date: 18 December 2015

CaseChat Overview and Summary

The case of Re Di Donato and Brown involved a dispute over mortgage duty under section 206 of the Duties Act. The respondents, who were the executors of the estate of their deceased mother, sought a review of a decision of the Commissioner of State Revenue that imposed mortgage duty in relation to a charge created by a solicitors' costs agreement. The respondents argued that the charge did not constitute an "advance" within the meaning of the Act. The case was heard in the Supreme Court of Victoria.

The legal issue before the court was whether the forbearance to require payment under the solicitors' costs agreement constituted a "constructive" provision or obtaining of funds, and therefore an advance. The court considered the decision in Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue, which held that a forbearance to require payment was not an advance if it did not result in the provision or obtaining of funds in a real or effective sense.

The court found that the forbearance to require payment under the solicitors' costs agreement did not result in the provision or obtaining of funds in a real or effective sense. The court held that the charge created by the agreement did not constitute an advance within the meaning of the Act, and therefore no mortgage duty was payable. The court rejected the argument that the charge created a security interest in the property, which would have resulted in the provision or obtaining of funds in a real or effective sense.

The court's decision provides guidance on the interpretation of the term "advance" in section 206 of the Duties Act. The court held that a charge created by a solicitors' costs agreement does not constitute an advance if it does not result in the provision or obtaining of funds in a real or effective sense. This decision is likely to be of interest to practitioners in the field of tax law, particularly those dealing with mortgage duty.

Orders