Re Di Donato and Brown

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.