The Commissioner of Stamps v MSP Nominees Pty Ltd and Sharrard Pty Ltd No. Scgrg-96-1686 Judgment No. 6197 Number of Pages 6 Stamp Duties (1997) 68 Sasr 266 - [1997] SASC 6197

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

DOYLE CJ, MATHESON AND OLSSON JJ

Stamp duties - what transactions or instruments are liable - Unit Trust - redemption of units - whether redemption liable to stamp duty - whether redemption is "transfer" as defined - whether redemption of units at the request of a unit holder can be described as a surrender by that unit holder of the beneficial interest previously held. Stamp Duties Act, 1923 s24(4), s71(3),(4) and (15), referred to. Read v Commonwealth (1988) 167 CLR 57; Costa and Duppe Properties Ltd v Duppe [1986] VR 90, applied.

ADELAIDE, 3 June 1997 (hearing), 13 June 1997 (decision)

#DATE 13:6:1997

Representation

Appellant:

Counsel: Mr B M Selway QC (Solicitor-General) with Dr N A Manetta

Solicitors: Crown Solicitor's Office

Respondents:

Counsel: Mr J M Wilkinson

Solicitors: Cowell Clarke

Order: appeal allowed.

DOYLE CJ

Introduction

1. This is an appeal against a decision by a judge of this Court. By his decision the judge allowed an appeal, by case stated under s24(4) of the StampDuties Act ("the Act"), against a decision by the Commissioner of Stamps.

2. The point at issue before the judge, and on appeal from him, is whether stamp duty is payable upon the Register of Unit Holders ("the Register") kept for the purposes of a Unit Trust ("the Trust").

Facts

3. The Respondent, MSP Nominees Pty Ltd is the trustee of the Trust. The Trust appears to be a unit trust of the usual kind.

4. The position of each unit holder in such a Trust is summarised by Mason CJ, Deane and Gaudron JJ in Read v The Commonwealth (1988) 167 CLR 57 as follows (at 61-62):

"A unit holder thus has a beneficial interest in the assets of the Trust, a right to have the Trusts executed in accordance with the Deed, and a right to proportionate distribution of the proceeds representing the assets of the Trust Fund upon termination of the Trust. The extent of the unit holder's beneficial interest at any given time is that proportion which his or her units bear to the total number of units issued." 5. While each unit holder has a proprietary interest in all of the assets of the trust, it is the case, as Brooking J said in Costa & Duppe Properties Pty Ltd v Duppe [1986] VR 90 at 96 that:

"...no unit-holder can claim to have any particular asset appropriated to his share or transferred to him otherwise than in accordance with the Deed." 6. It was common ground before the judge that the Trust was a "unit trust scheme" as defined in s4 of the Act.

7. When the Trust was first constituted there were three unit holders. They were Budget Investments Pty Ltd ("Budget"). Sharrard Pty Ltd ("Sharrard") and Galaxy Homes Pty Ltd ("Galaxy"). The trust property at all material times comprised cash, land and buildings, being the assets of a business known as "Acacia…

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.

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Details

AGLC: The Commissioner of Stamps v MSP Nominees Pty Ltd and Sharrard Pty Ltd No. Scgrg-96-1686 Judgment No. 6197 Number of Pages 6 Stamp Duties (1997) 68 Sasr 266 [1997] SASC 6197
Case: [1997] SASC 6197
Decision Date: 13 June 1997

CaseChat Overview and Summary

The case involves an appeal by the Commissioner of Stamps against a decision made by a judge of the Supreme Court of South Australia, concerning the payment of stamp duty on the redemption of units in a Unit Trust. The respondents, MSP Nominees Pty Ltd and Sharrard Pty Ltd, were involved in the trust and had appealed against the Commissioner's decision. The central legal issue was whether the redemption of units in the trust was liable to stamp duty under the Stamp Duties Act 1923. Specifically, the court had to determine if the redemption constituted a "transfer" as defined by the Act, which would make it liable to stamp duty. The court considered whether the redemption could be described as a surrender by the unit holder of their beneficial interest in the trust property.

The Full Court of the Supreme Court of South Australia, consisting of Doyle CJ, Matheson, and Olsson JJ, held that the redemption of units upon request by a unit holder could be regarded as a surrender of their beneficial interest in the trust property. The court found that the redemption involved a termination of a beneficial interest and resulted in an increased beneficial interest for the remaining unit holders. This decision was based on the ordinary language interpretation of the Act and the definition of "transfer" under s71(15). The court concluded that the redemption, upon request, involved a surrender of a beneficial interest, and thus, was liable to stamp duty. The appeal by the Commissioner was allowed, and the decision of the judge below was set aside.

Orders