Segal v Chief Commissioner of State Revenue

[2021] NSWCATAD 163

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Segal v Chief Commissioner of State Revenue [2021] NSWCATAD 163

Hearing dates:

17 September 2020

Date of orders:

9 June 2021

Decision date:

09 June 2021

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

N S Isenberg RFD, Senior Member

Decision:

The decisions under review are affirmed.

Catchwords:

REVENUE – receivers and managers – interest (if any) of partner in real estate declared by Supreme Court to be partnership asset and ordered to be disposed of.

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Duties Act 1997 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187

Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) (2013) NSWADTAP 25

D.K.L.R. Holding Co. (No. 2) Pty Ltd v The Commissioner of Stamp Duties (New South Wales) (1982) 149 CLR 431

Nullagine Investments Ply Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Phillip Segal (Applicant)
Les Szkirpan (Second Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Counsel:
R Clark (Respondent)

Solicitors:
Applicant (Self Represented)
Second Applicant (Unrepresented)
Crown Solicitor (Respondent)

File Number(s):

2019/00363588; 2019/00407869

Publication restriction:

No restriction

REASONS FOR DECISION

Background

1. These proceedings concern two applications to the Tribunal from Dr Phillip Segal (the Applications). The application in matter 2019/363588 (Liverpool Application) seeks a review of the rejection by the Chief Commissioner of Dr Segal’s objection to an assessment of duty in respect of a transfer of an interest in land at Liverpool, New South Wales (Liverpool Property). The application in matter 2019/407869 (Campbelltown Application) seeks a review of the rejection by the Chief Commissioner of Dr Segal’s objection to an assessment of duty in respect of a transfer of an interest in land at Campbelltown, New South Wales (Campbelltown Property).

2. Both transfers were made pursuant to separate sales of the two properties (Properties) at public auctions on 12 and 13 December 2018. The Chief Commissioner asserts the relevant contracts for sale of land were liable for duty calculated on the value / auction sale price of the whole of each property. Dr Segal asserts that, because of trust arrangements and his prior interest in each property, the correct duty should have been calculated on 50% of the sale price of each property.

3. Dr Segal’s objections of 19 May 2019 to the assessments of both transactions (Objections) (Assessments) were rejected by the Chief Commissioner on 20 September 2019.

4. Dr Segal then made the Applications to the Tribunal.

5. The Tribunal made orders by consent on 4 February 2020 including that both matters were to be heard and determined together.

6. On 26 May 2020, by consent of all parties including himself, Mr Les Szkirpan was joined as an applicant to proceedings 2019/363588 (concerning the Liverpool Property). Mr Szkirpan did not file any documents with the Tribunal, nor did he attend or have any other involvement in the hearing. His role in the matter is referred to below.

Material before the Tribunal

7. Dr Segal relied on:

1. The Objections.

2. A document dated and filed with the Tribunal on 12 July 2020 headed “Grounds of Objection”, the first subheading of which is “Background facts of Liverpool Property” (AS). The parties agreed that AS be regarded as a submission and not as evidence.

3. A document headed “Applicant’s Submissions” dated 14 September 2020, which comprised Dr Segal’s proposed submissions in reply to RS (ASR).

4. Some of the documents in the two bundles filed by the Respondent and referred to below as the s 58 documents to the extent, if any, that they were specifically referred to by Dr Segal.

5. A two-part document emailed by Dr Segal to the Tribunal Registrar on 29 June 2020, the covering email stating “Please find attached submission”.

1. During the hearing Dr Segal said he intended that the first two pages of the document (comprising 30 numbered paragraphs followed by his signature immediately after the wording “Signature of deponent”) (Dr Segal’s statement) be received as evidence; and the remainder of the document was intended by him to comprise annexures to the statement. Dr Segal’s statement refers to attached documents as annexures “A” to “M”. Regrettably, none of the attached documents have annexure markings and some of the documents are illegible. Dr Segal was informed by the Tribunal by email sent to his nominated email address before the commencement of the hearing that if he wished to rely on any of the documents attached to his statement, he should remedy the defects of lack of legibility, markings, pagination and indices and provide a hard and a soft copy of each document to the Tribunal and the other parties. Dr Segal declined to do so. Dr Segal informed the Tribunal during the hearing that he did not have time to comply with the order as he had “a full-time commitment elsewhere”. He also said he relied on an email server “somewhere in Amazon in Canada, [and the order was] not served on me”. He later conceded that the order was served on his nominated email address: T3-4 at 18-34. References commencing with the letter “T” relate to the transcript of the hearing. Subsequent numbers relate to the hearing page(s) and line numbers of text on the page(s).

2. Except for legible pages after Dr Segal’s' statement which are expressly referred to during the hearing as admitted, the remaining pages attached to the 29 June email were not admitted into evidence.

3. Mr Clark did not object to the tendering of Dr Segal’s statement as evidence other than the first sentence of paragraph 26. Dr Segal agreed to withdraw that sentence. References to Dr Segal’s statement in these reasons are to the first 2 pages of the attachments to Dr Segal’s email of 29 June 2020 other than the first sentence of paragraph 26.

6. oral submissions made by Dr Segal during the hearing.

8. References to paragraph numbers of submissions by Dr Segal are to paragraphs of AS unless stated to the contrary.

9. I observe that when asked if he had any legal training, Dr Segal replied “not directly” T-2:20-24. I also observe that Dr Segal experienced some difficulties in appreciating the difference between submissions and evidence.

10. The Respondent relied on:

1. two bundles, comprising some 499 pages, of documents filed with the Tribunal on 19 December 2019 pursuant to s 58 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act);

2. the Respondent’s written submissions of 21 August 2020 (RS); and

3. oral submissions by Mr Clark during the hearing.

11. References to paragraph numbers of submissions by the Chief Commissioner are to paragraphs of RS unless stated to the contrary.

12. Both parties relied on two transfers in respect of the Campbelltown Property one marked AP110028L and the other marked AP110029J. Both transfers referred to five lots in a strata plan which the parties agree comprise the Campbelltown Property. I refer to the former Transfer as “Transfer AP110028L” and the other as “Transfer AP110029J”. The transfers were attached to an unsigned affidavit dated 21 August 2020 over the name Michael Shannon Wixted, solicitor and were tendered by the Respondent. There is no dispute as to the contents of the transfers. However, there are disputes as to other aspects of the transfers to which reference is made below.

13. In preparing these reasons I have referred to the above documents, relevant legislation and the cases cited above.

Consideration

The role of the Tribunal

14. The Tribunal was established by the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act). The objects of the CAT Act include enabling the Tribunal to review and determine appeals against decisions made by certain persons and bodies; enabling the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible; and ensuring that the Tribunal’s processes are open and transparent (ss 3(b)(ii) and (iii), 3(d) and 3(f)).

Jurisdiction of the Tribunal

15. Section 28 of the CAT Act provides “The Tribunal has such jurisdiction and functions as may be conferred or imposed on it by or under this Act or any other legislation.”

16. Dr Segal applied to the Tribunal to review the Chief Commissioner’s disallowance decisions in relation to his Objections.

17. At RS [1] – [3] the Chief Commissioner submitted that the correct decisions for review by the Tribunal were not the disallowance decisions but “were those on 18 February 2019 (the Campbelltown Decision) and 26 February 2019 (Liverpool Decision) to determine that full ad valorem duty was payable on the respective Contracts of Sale” and “The decisions of 28 October 2019 and 20 September 2019 of the Chief Commissioner were in relation to objections filed by the Applicant. Pursuant to the authority of Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [28], the decisions which are reviewable pursuant to s 96 Taxation Administration Act are the operative decisions by the Chief Commissioner, being the two Decisions determining that full ad valorem duty was payable on the Contracts of Sale, not the decision in response to the objections.”

18. During the hearing Dr Segal said he understood that the Tribunal hearing concerned a review of the original Assessments rather than the objection disallowance decisions.

19. There is no dispute, and I find, that the Tribunal is empowered to review the Assessments (ss 9 and 55 of the ADR Act and s 96 of the Taxation Administration Act 1996 (NSW) (TA Act). Section 63 of the ADR Act requires the Tribunal, in determining an application concerning an administratively reviewable decision, to decide what the correct and preferable decision is having regard to the material then before it, including any relevant factual material and any applicable written or unwritten law, and authorises the Tribunal to affirm, vary or set aside the administratively reviewable decision. If the Tribunal sets aside that decision the Tribunal is to make a decision in substitution for that decision or remit the matter for reconsideration by the administrator who made the decision.

General issues before the Tribunal

20. The Respondent submitted the relevant law is set out in [4] and [5] as follows:

1. On application for review, the Applicant and Chief Commissioner's cases are not limited to the grounds that were before the Chief Commissioner in relation to the objection decision: Taxation Administration Act s 100(2). On a review the Tribunal may affirm, vary or set aside the Chief Commissioner's decision and make orders as to costs or otherwise: s 101(1) of the Taxation Administration Act.

2. The Applicant has the onus of proving their case in an application for review. This requires the Applicant to prove on the balance of probabilities all matters necessary to enable a Tribunal to find in favour of the Applicant, and all the facts on which the Applicant rely to claim any exemption. The legislation does not place any onus on the Chief Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be supported by evidence. The burden on the Applicant is not necessarily discharged by showing an error by the Chief Commissioner in forming a judgment as to the amount of the assessment. It is for the taxpayer to discharge the burden of proof by establishing what the correct amount of an assessment should be. The ultimate question for the court or tribunal hearing the appeal is not whether the grounds have been made out but whether the amount assessed is wrong.

   21. The above two paragraphs are substantially based on excerpts from legislation or judicial or tribunal decisions and to that extent are substantially correct.

   22. There is no dispute that the Applicant was dissatisfied with the disallowance of his objections. It is the Assessments (sometimes referred to in these reasons as “the Decisions”), not the disallowance of the objections to the Assessment, which are the subject of review by the Tribunal in these proceedings.

Onus of proof

23. There is no dispute that s 100(3) of the TA Act provides “The applicant has the onus of proving the applicant’s case in an application for review” and that the Applicant bears that onus.

Standard of proof

24. The standard of proof in reviews by the Tribunal is the “balance of probabilities”. Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) (2013) NSWADTAP 25 at [31] and B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187, (2008) 74 NSWLR 481 per Allsop P at [104] (Giles and Basten JJA agreeing).

Particular issues

25. The parties agreed that the decisions the subject of review by the Tribunal are the Assessments, not the disallowance of the objections.

26. Accordingly, the initial issue for determination by the Tribunal is whether Dr Segal has proven on the balance of probability that either or both the decisions in respect of the Assessments were wrong

The substantive law

27. The applicable substantive law is the Duties Act 1997 (NSW) (Duties Act). References in these reasons to legislative provisions are to provisions of the Duties Act unless stated to the contrary.

The parties’ positions

Dr Segal’s submissions

28. Dr Segal claimed:

1. prior to various transactions, the first being the sale of each of the Liverpool Property and the Campbelltown Property by auctions held respectively on 12 and 13 December 2018, he owned a 50% interest in each property and another person, Dr Sharma, owned the remaining 50%; and

2. after the relevant transactions, the last in relation to:

1. the Liverpool Property being by transfer, an undated and unsigned copy of which is at page 13 of the s 58 documents of “an estate in fee simple” of the whole of the Liverpool Property from Mr Szkirpan to Dr Segal; and

2. the Campbelltown Property being by transfer dated 1 March 2019, registered AP110028L, signed by Jennifer Nettleton (receiver and manager) of the transferor and by the solicitor for the transferee of an estate in fee simple of the whole of the Campbelltown Property, such transfer stamped with $10.00 duty under s 18(2) on 26 February 2018 AND by transfer registered AP110029J, also dated 1 March 2019, of a 50% share of an estate in fee simple, in the property transferred by transfer registered AP110028L, from Dr Segal to Minh Xuan Truong (Dr Truong);

other than in respect of his acquisition of an additional 50% interest in the Liverpool Property he remained at all times the beneficial owner of a 50% interest in both properties and because of specific legislative exemptions:

1. “In the Liverpool purchase only half the fee simple could transfer as the Taxpayer already owned half” AS [59]; and

2. in relation to the Campbelltown Property, the submission in AS included:

52   … when the transfer from the Receivers acting for the Partnership to the Taxpayer was executed Ms Truong acquired by that transaction the 50% beneficial interest that the Taxpayer held as trustee for her at that time.

53.   The effect of the execution of the transfer to the Taxpayer therefore in the light of the resulting trust was that the Taxpayer by that transfer was constituted only "half owner" of the Property.

54.   In this case it is an undoubted fact that the contract for sale and the transfer from the Receiver of the partnership to the Taxpayer had the combined effect of transfering [sic] only half beneficial enjoyment and ownership of the property to the Taxpayer.

55.   Taxpayer was already half owner of the property…

The Chief Commissioner’s submissions

29. The Chief Commissioner’s submissions included:

1. the decisions the subject of the Tribunal’s review in these proceedings were the Campbelltown Decision and the Liverpool Decision to determine that full ad valorem duty was payable on the respective Contracts of Sale in respect of the Campbelltown Property and the Liverpool Property.

2. the Campbelltown Contract of Sale was entered into on behalf of Dr Sharma and Dr Segal by Jennifer Nettleton and Cassandra Mathews as Receivers and Managers of the Campbelltown Property as vendors and Dr Segal as purchaser, and

3. the Liverpool Contract of Sale was entered into on behalf of Dr Sharma and Dr Segal by Jennifer Nettleton and Cassandra Mathews as Receivers and Managers of the Liverpool Property as vendors and Mr Szkirpan as purchaser.

4. At [8], the apparent purpose of the transactions effected by the two Contracts was to establish a real/apparent purchaser arrangement in relation to the two properties as follows:

1. In respect of the Liverpool Property Mr Szkirpan was the apparent purchaser and Dr Segal was the real purchaser.

2. In respect of the Campbelltown Property Dr Segal was the apparent purchaser and Dr Truong was the real purchaser of a half share.

3. Shortly after completion of the two Contracts, Mr Szkirpan transferred the Liverpool Property to Dr Segal and a half share in the Campbelltown Property was transferred to Dr Truong. “Those subsequent transfers were assessed for nominal duty by the Chief Commissioner pursuant to s 55 of the Duties Act 1997 (NSW) (the Act) (with respect to real/apparent purchasers) and there is no dispute with respect to them.”

30. At [6] the Chief Commissioner provided extracts from consent orders made by Ward CJ in Equity on 26 June 2018. Certain of Her Honour’s orders are summarised at [44] below.

31. At [9] the Chief Commissioner referred to the basis of the Decisions being correct having regard to the following legislation:

1. ss 8(1)(b)(i) and 9 – the Duties Act charges duty on transactions which are agreements for sale or transfer of dutiable property. Duty is to be charged as if each such dutiable transaction was a transfer of dutiable property.

2. ss 9 and 12 – these sections provide that an agreement for sale or transfer is a dutiable transaction and the transfer occurs when the agreement (Contract) is entered into.

3. ss 19 and 21 - s 19 provides that duty is charged on the dutiable value of the dutiable property; s 21 provides that the dutiable value of relevant dutiable property is the greater of the consideration for the dutiable transaction and the unencumbered value of the dutiable property; and

4. s 32 – provides a table with a formula which allows calculation of the rate of duty chargeable on a dutiable transaction.

32. The Chief Commissioner submitted at [10] that nothing submitted by Dr Segal undermined the correctness of the above analysis.

Dr Segal’s submissions in reply (ASR)

33. ASR covered a wide range of issues, several of which had not been referred to in RS. Submissions in reply by a party are intended to provide that party with the opportunity to respond to submissions previously made by the other party. They are not intended to enable the first party to open a new line of submissions or expand on previous submissions except to the extent that the other party has made his own submissions on that issue. Accordingly, I have disregarded the Applicant’s submissions which were not “in reply” to RS.

34. In RS the Chief Commissioner submitted at [16]:

… Whatever the nature of the Applicant's interest in the Liverpool Property prior to the Contract of Sale, it was different to that which was transferred, or to be transferred, to Mr Szkirpan. The Applicant was a tenant in common in equal shares with Dr Sharma. What Mr Szkirpan was to receive was the estate in fee simple. These are different property interests.

35. In relation to the above submission, the Chief Commissioner relied on two extracts from the High Court in Nullagine Investments Ply Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635 (Nullagine Investments), the first from Brennan J, who delivered a minority judgment and the second from the majority, comprising Deane, Dawson and Gaudron JJ.

If tenants in common concur in a sale of a parcel of land to a third party, each must convey his own share to the purchaser who takes a single estate in fee simple in the whole of the land... (at 644)

Where sale is decreed, the single conveyance in fee simple by the tenants in common or joint tenants pursuant to a court order does not involve the sale or disposition of the individual share or interest of the individual tenant. The court order directing the sale of "the land" is an order for the sale of the fee simple in the whole of the land. It follows that the conveyance in such a case extinguishes the share or interest of the individual tenant and effects the sale or disposition of the freehold itself Indeed, there is strong support for the view that the making of the order for sale extinguishes the equitable interests of the co tenants in the land itself even before a sale is effected. (at 657-658)

36. Dr Segal’s response at [10] to [12] in ASR was:

1. In the present case, Segal and Sharma were tenants in common. The nature of a holding as tenants common was explained by the High Court in Nullagine Investments. At page 363 of Nullagine Investments Brennan said:

   The share or interest which a tenant in common has in land is an "undivided" share, that is to say, "a distinct share in property which has not yet been divided among the co-tenants" ((2) Megarry and Wade, The Law of Real Property, 5th ed. (1984), p.422.). A division of the property is repugnant to the nature of a tenancy in common ((3) Fisher v. Wiggs (1700) 12 Mod.296, at p 302 (88 ER 1332, at pp 1335-1336).), for it is an essential characteristic of a tenancy in common that each of the tenants has the right to occupy the whole of the property in common with the others. Like joint tenants, tenants in common have a unity of possession; unlike joint tenants, they need not have a unity of interest, nor a unity of title, nor need there be a unity in the time when the interests of the co-owners vests. Each tenant in common has a separate and individual title to the property, limited according to the estate or term granted to or acquired by the tenant ((4) Co.Litt. 188b, 189a, 190b. Section 60 of the Transfer of Land Act 1893 (W.A.) recognizes the separate title of tenants in common: it provides that "where two or more persons are entitled as tenants in common to undivided shares of or in any land such persons may receive one certificate for the entirety or separate certificates for the undivided shares."). Thus one tenant in common may be seised of an estate in fee simple, another seised of an estate for life, while a third may be a tenant for a term of years, each of their interests being separately acquired at different times. There is no right of survivorship among tenants in common ((5) Except in respect of choses in action vested in them jointly, e.g., a cause of action against a third party in trespass: Co.Litt. 198a.). And thus, at common law, a tenant in common who wished to sell his interest in land was constrained to sell subject to the right of any co-tenant to remain in possession of the whole of the land. The vendor could neither seek a division of the land among the co-tenants nor compel the other co-tenants to join in a sale of the land.

   37. I observe that I extracted the above wording from the judgment of Brennan J in Nullagine Investments. The bold print was emphasised in ASR but not in the judgment. The underlined segments were in the judgment but omitted from the ASR extract.

   38. At [11] in ASR Dr Segal stated:

2. As Deane, Dawson and Gaudron JJ explained in the same case, at page 656:

   As a matter of both law and language, there is a clear distinction between the individual "interest or share" owned by one of two or more tenants in common of a freehold estate in land and the freehold estate itself. While the theory of our land law is that the radical title of the Crown lies between the physical land and a freehold estate in it, the ownership of the freehold estate has long been, for almost all practical purposes, the equivalent of full ownership of the land. As a result, the freehold estate is, as a matter of legal and popular language, commonly treated as the land itself ((43) See, e.g., Williams, Principles of the Law of Real Property, 23rd ed. (1920), pp.6-7; Megarry and Wade, The Law of Real Property, 5th ed. (1984), p.13; Gray, Elements of Land Law, (1987), p.58.). On the other hand, the distinct "interest or share" of one of two or more tenants in common of a freehold estate cannot, on any approach, be equated with the land itself. Indeed, an essential feature of the "interest or share" of a tenant in common, and a condition precedent of its existence or survival, is that the tenant in common does not own the freehold estate and is unable alone to deal with "the land" ((44) Gray, op cit, pp.303-304.). It is that very distinction between the "interest or share" of a joint tenant or tenant in common and the freehold estate which underlies the enactment of the long series of partition statutes directed towards facilitating or enabling a joint tenant or tenant in common to obtain an effective order for the partition or sale of the land itself ...

   39. The above extract was taken from the judgment rather than from ASR. The extract does not reproduce the numerous typographical errors in ASR. The section bolded above was emphasised in that manner in ASR but was not so emphasised in the judgment.

   40. Following [10] and [11] in ASR, Dr Segal’s submission continues:

Therefore “[Dr Segal] and [Dr Sharma] were by the sale contract selling the two separate distinct shares in the property.

41. This submission is not supported by any part of Dr Segal’s' extracts from Nullagine Investments in ASR and is contrary to the clear wording of the second extract from the majority of the High Court at RS [16]. That latter extract from Nullagine Investments includes:

Where sale is decreed, the single conveyance in fee simple by the tenants in common or joint tenants pursuant to a court order does not involve the sale or disposition of the individual share or interest of the individual tenant

42. I observe that the above extract came from the same paragraph in the Nullagine Investments judgment partly extracted at [12] by Dr Segal but was not referred to by him. Dr Segal’s submission at [12] misinterprets the segment of the judgment he extracted from the majority’s reasons which deal with the interest or share of a joint tenant or tenant in common but not with the effect of the sale of partnership land by a receiver in accordance with a court order. That is expressly dealt with by the Chief Commissioner at [35] above having been extracted from paragraph [8] of the majority decision (at pages 657-658 of the judgment).

43. I find that the principle referred to by the Chief Commissioner from Nullagine Investments applies to the effect of both Contracts.

44. On 26 June 2018 Her Honour, Ward CJ in Eq, made orders by consent (including the consent of Dr Segal), in relation to the Segal Sharma Partnership. Those orders included:

1. at [1] and [2] that the Segal Sharma Partnership be dissolved and wound up.

2. at [3] a declaration that the assets of the Segal Sharma Partnership include the Campbelltown Property and the Liverpool Property.

3. at [4] an order that Jennifer Nettleton and Cassandra Matthews (collectively the Receivers) be appointed jointly and severally receivers and managers of the business and assets of the Segal Sharma Partnership, including the real property referred to in Order 3.

4. at [6] an order that the Receivers had power to enter into possession, lease or dispose of the Campbelltown Property and the Liverpool Property and execute any document in the name of Dr Segal and Dr Sharma reasonably necessary for the above purposes and apply the proceeds of sale of the Properties in payment of loans secured by specified mortgages.

5. at [7] an order that the Receivers dispose of the assets of the Segal Sharma Partnership.

6. at [9] an order that the Receivers pay into court net proceeds of the realisation of assets of the Segal Sharma Partnership.

7. at [11] an order that the proceedings be remitted to a Judge or Registrar to take accounts of the Segal Sharma Partnership and determine the extent, if any, to which Dr Segal and Dr Sharma as between themselves were liable to contribute towards discharge of partnership liabilities, were entitled to share in any surplus after liabilities were discharged or were entitled to be recouped by the other partner; and

8. at [13] ordered that Dr Segal and Dr Sharma deliver to the Receivers upon request all assets of the Segal Sharma Partnership.

45. In summary the Liverpool Property and the Campbelltown Property were declared by the Court to be assets of the Segal Sharma Partnership and the Receivers had power and a duty to dispose of those assets and pay the net proceeds into Court. Her Honour also ordered that a Judge or Registrar shall determine the extent (if any) to which each partner is as between themselves liable to contribute to discharging liabilities of the Partnership or entitled to share in any surplus or be recouped by the other partner. Her Honour also ordered that each partner may purchase from the Receivers, any of the assets of the Partnership.

Bare trust issue

46. At [12] Dr Segal submitted “By reason of the terms of the Bare Trust Deed Mr Szkirpan as purchaser was a bare trustee”.

47. In his 27 June 2020 statement Dr Segal refers at [26] to an email dated 7 February 2020 from a named officer of Revenue NSW.

48. An email dated 7 February 2020 from the named officer to a solicitor then acting for Dr Segal is annexed to the statement. That statement includes the comment “Even if the bare trustee … is holding 50% for the beneficial owner [Dr Segal] [the Liverpool Property] is Partnership property not property of the Partners to the Partnership”.

49. The officer goes on to state “I understand that no bare trust deed was entered into.” Dr Segal did not dispute that statement by the officer.

50. I observe that the hearing transcript refers on nearly 100 occasions to the phrase “bare trust”. However, there is no reference to any bare trust deed or other document creating a bare trust. If there is no bare trust deed, there can be, contrary to Dr Segal’s evidence, no “terms” of such a deed. If there was a bare trust, and I make no comment at this time on that issue, there is no probative evidence before the Tribunal that the trust was created by deed.

51. At [9] in AS, Dr Segal refers to the 7 February 2020 email and states the Revenue NSW officer on behalf of the Chief Commissioner “insisted on ad valorem duty on 100% and transfer to the taxpayer as a second transfer in full knowledge that Mr Szkirpan was only an apparent purchaser.” At [10] Dr Segal asserts that two transfers were executed (the first between the Receiver and Mr Szkirpan and the second between Mr Szkirpan and himself) as a consequence of correspondence between the Chief Commissioner and Dr Segal’s solicitor. At [11] Dr Segal asserts the second of the transfers and “the Deed of Bare Trust which was produced at that time to the Commissioner were stamped ...“ I have commented above as to the lack of evidence as to the existence of the deed.

52. At [6] in ASR, Dr Segal submitted “The [Chief] Commissioner insisted on the two transfers despite a request to transfer under s 18(3).” Dr Segal had referred to an email chain between his then solicitor and an officer of Revenue NSW. I have considered the emails in evidence. They contain requests from the solicitor (representing Dr Segal in relation to transactions involving the sale by the Receivers of the Liverpool Property) for advice, including in respect of ad valorem duty on the Contract, “On 100% or on 50% (transferred to a beneficial owner)?” and the solicitor asks how a transfer from Mr Szkirpan to Dr Segal can be stamped under s 55 prior to settlement.

53. The emails referred to prior discussions the details of which are not in evidence.

54. The emails from the Chief Commissioner provide advice and “the view” of the Chief Commissioner in relation to certain matters. The advice refers, in part of a 7 February 2019 email, to some assumptions being made by the Chief Commissioner and an opinion that the Liverpool Property “is Partnership property not property of the Partners to the Partnership.” The word “not” was emphasised by the Chief Commissioner.

55. I have considered the contents of the email chain in evidence at pages 14-20 of the s 58 documents. The first email is dated 6 February 2019 and the last is dated 27 February 2019. Notwithstanding Dr Segal’s submissions at ASR [6] I am not satisfied that the Chief Commissioner “insisted” on the form of the transaction. Rather it seems to me that the Chief Commissioner provided advice, as requested, as to his opinion concerning duty payable in respect of certain documents or transactions. I also note that notwithstanding Dr Segal’s submission to the contrary, there is no reference to “s 18(3)” in the emails in evidence.

56. Section 18(1) states “If a dutiable transaction is effected by more than one instrument, one instrument is to be stamped with the duty payable on the dutiable transaction and each other instrument is chargeable with duty of $50.”

57. Section 18(3) provides that duty chargeable “in respect of a transfer of dutiable property that is not made in conformity with an agreement for the sale or transfer of the dutiable property is $10”. However, a pre-condition is that the duty chargeable in respect of the agreement has already been paid.

58. To the extent that the “duty chargeable” relates to the value of the real estate being transferred, I have commented separately in these reasons that the interest in each of the Properties being transferred was an estate in fee simple in the whole of each Property. The full value of that fee simple, in these circumstances was the sale price of each Property. Not as Dr Segal submitted, a 50% interest in each Property. Notwithstanding Dr Segal’s numerous submissions, he did not at any relevant time after Ward CJ in Eq orders and prior to the auctions, hold a beneficial interest in either Property.

59. Dr Segal refers at [15] and [16] in his statement to the decision of the High Court in D.K.L.R. Holding Co. (No. 2) Pty Ltd v The Commissioner of Stamp Duties (New South Wales) (1982) 149 CLR 431 (DKLR). Dr Segal refers to Gibbs CJ in DKLR mentioning the situation where a declaration of trust had preceded the entering into the dutiable transaction being a contract for sale or transfer and the effect (as described by Dr Segal) of Gibbs CJ’s description “of a transfer of land where a trustee had first declared a trust of the land in favour of the transferor and where the land was then transferred to the trustee” and then extracts from His Honour’s reasons the statement:

Before the transfer there had been no severance of the legal and equitable interests in the land. It was only when the declaration of trust took effect, which of course was immediately after the transfer, that there was a separate of legal and equitable interests.

60. I observe that Dr Segal did not refer to the context in which that judgment was made.

61. On page 443, shortly before that part of the judgment extracted by Dr Segal, His Honour said at [11] and [12]:

1. The question then arises whether the declaration of trust comes within par. 3(b) of the description in the second schedule. In my opinion it does not, for two reasons. First, the words "was conveyed" in par. 3(b) are in my opinion deliberately used in the past tense, to refer to a conveyance made before the declaration of trust was executed. The framers of the Act no doubt intended that if the transfer to the person declaring the trusts had attracted ad valorem duty, a subsequent declaration of the trusts upon or subject to which the property was transferred should escape it. Similarly, … if the declaration of trust was the first of the documents to be executed, and attracted ad valorem duty, a subsequent transfer might escape duty…

12. … I conclude that the declaration of trust is liable to the same duty as if it were a conveyance, and since, as I have said, there was no consideration for it, it was right to charge it to ad valorem duty under s. 66(3)(a) of the [former] Act.

62. After His Honour made the statement extracted by Dr Segal, he continued:

1. The present case bears a close analogy to Commissioner of Stamp Duties (N.S.W.) v. Perpetual Trustee Co. Ltd. (Quigley's Case) (1926) 38 CLR 272 . In that case Q., who was beneficially entitled to certain property subject only to a life interest of one K. in part of it, conveyed the property to a trustee in trust for himself for life, with certain remainders over in favour of others. It was held that the instrument was liable to ad valorem duty in respect of the whole of the property thereby settled, including the life interest limited to Q. Counsel in that case submitted an argument similar to that which was advanced in the present case, saying, "The beneficial interest during the lifetime of the settlor was not conveyed. It remained after the conveyance where it was before" (1926) 38 CLR, at p 276 . This argument was rejected.

   63. The emphasis at the end of the last extract is mine. It serves to indicate that a party, in this case Dr Segal, cannot rely on part of a judgment without regard to the surrounding context.

Findings and decision

64. Having regard to the above findings, I am not satisfied on the balance of probability on the material before me that Dr Segal has satisfied his onus. Accordingly, the correct and preferable decision of the Tribunal is to affirm the Assessments.

Orders

1. The decisions under review are affirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 09 June 2021