Victory International Pty Ltd v Commissioner of State Revenue (No 2)
[2025] VSC 633
•8 October 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
TAXATION LIST
S ECI 2023 05809
| VICTORY INTERNATIONAL PTY LTD (ACN 153 434 809) AS TRUSTEE FOR THE VICTORY INTERNATIONAL HYBRID UNIT TRUST (ABN 17 813 624 975 | |
| Appellant | |
| - v - | |
| COMMISSIONER OF STATE REVENUE | Respondent |
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JUDGE: | Sloss J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers – Appellant’s submissions on final orders dated 2 September 2025; Respondent’s submissions on final orders dated 2 September 2025 |
DATE OF JUDGMENT: | 8 October 2025 |
CASE MAY BE CITED AS: | Victory International Pty Ltd v Commissioner of State Revenue (No 2) |
MEDIUM NEUTRAL CITATION: | [2025] VSC 633 |
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TAXATION – Appeal from Commissioner’s determination disallowing appellant’s objection against an assessment for landholder duty under Part 2 of Chapter 3 of Duties Act 2000 – Where appeal dismissed – Where parties are not agreed as to final orders including as to costs – Where the Commissioner, by leave, advanced new or re-vamped basis to support the assessment on appeal – Where the Commissioner acknowledged that there were ‘inaccuracies’ in the assessment as made but on appeal was seeking to recover duty in the same amount but on the re-vamped basis contended for (i.e. reflecting ‘what the Commissioner in effect did’) – Where Court has determined it is appropriate to remit the assessment to the Commissioner to give effect to the Court’s reasons – Where appellant has been put to significant trouble and expense as a result of the Commissioner’s late change of position on appeal – Appellant ordered to pay 75% of the Commissioner’s costs on the standard basis – Final orders made – Taxation Administration Act 1997 (Vic) ss 109, 112, 114; Supreme Court Act1986 (Vic) s 24; Civil Procedure Act 2010 (Vic) s 65C.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr T Grace | Madgwicks Lawyers |
| For the Respondent | Mr C Young KC and Mr D Morgan | Solicitor for the Commissioner of State Revenue |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Relevant legislative provisions....................................................................................................... 2
Appellant’s submissions on final orders...................................................................................... 4
Appellant’s submissions on leave under s 109 of the TAA.................................................... 5
Appellant’s submissions on orders as to costs......................................................................... 5
Commissioner’s submissions on final orders............................................................................ 10
Consideration and disposition...................................................................................................... 13
HER HONOUR:
Introduction
On 13 August 2025 the Court delivered reasons for judgment in this proceeding,[1] which was brought by way of an appeal instituted under Part 10 of the Taxation Administration Act 1997 (Vic) (TAA) against a determination made by the respondent, the Commissioner of State Revenue (Commissioner) on 29 August 2023, disallowing the taxpayer’s objection.
[1]Victory International Pty Ltd v Commissioner of State Revenue [2025] VSC 484 (Reasons).
In those reasons, the Court summarised the outcome of the appeal, stating:[2]
[2][2025] VSC 484 at [8]-[9], [306]-[307].
8For the reasons which follow, I am satisfied that the rights each of the Transferees acquired in a landholder, being the Victory Hybrid Unit Trust, pursuant to the 10 October 2012 Transactions entailed a ‘relevant acquisition’ under s 78 of the Duties Act. That is because on a statutory winding up of the landholder each of them, as holders of units, being ‘C Class Units’ (which are ‘Capital Units’) in a ‘unit trust scheme’ acquired an ‘interest’ in a landholder under s 79(1). The interest that each of the Transferees acquired was, of itself, and when aggregated with the significant interest of each of its associates, a ‘significant interest’ in the landholder under s 79(2), and was a ‘relevant acquisition’ under s 78(1), rendering Victory as trustee of the Victory Hybrid Unit Trust liable under s 85(1)(b) to pay landholder duty on each such relevant acquisition under s 77.
9Accordingly, I would dismiss the appellant’s appeal. However, in circumstances where the Commissioner has, on the appeal, advanced a new or re-vamped basis on which he contends the appellant is liable for the amounts of duty that were claimed in the Assessment, and has acknowledged that the Assessment is inaccurate in a number of ways, it is nevertheless appropriate that the Assessment be remitted to the Commissioner.
. . .
Conclusion
306For the reasons set out above, the appellant’s appeal will be dismissed. However, as the Commissioner has, during the appeal, with leave, moved ground and re-stated his case, and is now relying upon grounds other than those on which the Objection was disallowed, such that the Assessment made on 30 September 2020 is inaccurate, and does not accord with the ‘relevant acquisition(s)’ now relied on, it is appropriate for the Court to remit the Assessment to the Commissioner.
307In due course, I will hear from the parties as to the appropriate form of orders, including as to whether a formal order is required for a grant of leave under s 109 of the TAA and as to costs.
Following delivery of the reasons, the parties informed the Court that they were unable to agree on the orders to be made. In those circumstances, on 26 August 2025, orders were made by consent establishing a timetable for the delivery of short written submissions by each party within seven days.
On 2 September 2025, each party filed a short written submission as to final orders and costs and a proposed form of final order. Those submissions revealed that while it remained the case that the parties were agreed that the Commissioner should formally be granted such leave as may be required pursuant to s 109 of the Taxation Administration Act 1997 (Vic) (TAA) to rely upon grounds other than those on which the Objection was disallowed, as set out in his Aide-mémoire – Duties Act 2000 (Vic) s 89H(3) filed on 20 December 2024 (Commissioner’s Aide-mémoire – s 89H(3)) there was no consensus as to the form of the final orders to be made or the orders as to costs.
Relevant legislative provisions
The relevant legislative provisions concerning an appeal to the Supreme Court instituted under Part 10 (headed ‘Objections, reviews and appeals’) of the TAA are set out in Division 2 (headed ‘Reviews and appeals’).
Where a taxpayer who is dissatisfied with the Commissioner’s determination of the taxpayer’s objection to an assessment makes a request under s 106(1) that the Commissioner treat the objection as an appeal and cause it to be set down for hearing in the Supreme Court, s 109 operates to limit the grounds of appeal unless the Court otherwise orders, as follows:[3]
[3]The parties have agreed that the relevant version of the TAA is Authorised version No. 086, incorporating amendments as at 1 July 2024.
109 Grounds of review or appeal
On a review or an appeal—
(a) the taxpayer's case is limited to the grounds of the objection; and
(b)the Commissioner's case is limited to the grounds on which the objection was disallowed—
unless the Tribunal or Court otherwise orders.
Section 112 provides for the orders that may be made on the hearing of an appeal by the Supreme Court, as follows:
112 Supreme Court appeals
(1)On the hearing of an appeal by the Supreme Court, the Court may make any order it thinks fit and may by order confirm, reduce, increase or vary the assessment or decision.
(2) The costs of the appeal are in the discretion of the Court.
Section 114 addresses when a decision on appeal becomes ‘final’ and provides for giving effect to a decision on appeal, as follows:
114 Giving effect to decision on review or appeal
(1)Subject to section 115,[4] within 60 days after the decision on review or appeal becomes final, the Commissioner must take any action that is necessary to give effect to it.
(2) If no appeal to a court from—
(a) a decision of the Tribunal on a review; or
(b) a decision of the Supreme Court on an appeal—
is instituted within 30 days after the day on which the decision is made, the decision is to be taken, for the purposes of this section, to have become final at the end of that period.
[4]Section 115 deals with the refund of any amount paid under the assessment that is in excess of a requirement for payment under the relevant taxation law.
In addition, Order 7 of the Supreme Court (Miscellaneous Proceedings) Rules 2018 (Vic) sets out the rules and procedure that apply to ‘Victorian taxation appeals’. Relevantly, where a taxpayer objects and requests that the objection be treated as an appeal to the Court, the applicable procedure is set out in rules 7.04 to 7.07. There is nothing in those rules that is applicable in the present context.
In relation to the issue as to costs, s 24(1) of the Supreme Court Act 1986 (Vic) provides:
24 Costs to be in the discretion of Court
(1)Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
Further, under s 65C(1) of the Civil Procedure Act 2010 (Vic) (CPA), the Court has power to make any order as to costs it considers appropriate to further the overarching purpose of the CPA, being to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
Appellant’s submissions on final orders
The appellant submits that rather than dismissing the appeal, as the Court proposed in its reasons,[5] ‘the more appropriate order, if an order of that kind were to be made, would be that the “proceeding” be dismissed’.[6] But even if such an order were made, the appellant contends that ‘an order dismissing the proceeding would not be dispositive of the actual subject matter of this proceeding, which is the Assessment’.[7]
[5]Reasons, at [9].
[6]Appellant’s submissions on final orders (Appellant’s submissions (02.09.2025)), at [2].
[7]Appellant’s submissions (02.09.2025), at [2].
The appellant points to the inaccuracies in the Assessment that were formally acknowledged in the Commissioner’s Aide-mémoire – s 89H(3), filed on 20 December 2024 after the hearing had taken place, and the Court’s findings that the Commissioner’s ‘re-vamped’ approach (as set out in his aide-mémoire) ‘does not accord with the Assessment he made on 30 September 2020’[8] and that ‘the “relevant acquisition(s)” now relied upon by the Commissioner do not accord with the “Relevant Acquisitions” stated in the Assessment’,[9] and submits:[10]
4.As her Honour found, the Assessment could never have been supported by the Commissioner’s new basis for the Assessment, based on s 89H, as the percentages in the Assessment were completely different from the percentages contended for by the Commissioner at trial (among other shortcomings in the Commissioner’s approach). The Commissioner himself could not reconcile his new basis for the Assessment with the Assessment itself.[11] The only order that can therefore be made in light of the Commissioner’s decision to abandon the original basis for the Assessment and, more importantly, in light of her Honour’s findings on the matter,[12] is that the Assessment be set aside.
5.The Assessment cannot be remitted to the Commissioner in light of her Honour’s reasons. Once an assessment has been set aside by a court, the Commissioner can, subject to law, issue a “reassessment”.[13] There is no provision to “amend” an assessment.
6.The original Assessment is now moribund in light of the findings of her Honour at [306], being a finding which her Honour had no option but to make in light of the decision by the Commissioner to abandon the basis for the Assessment, as issued. The Assessment cannot be set aside and, at the same time, remitted to the Commissioner. But, the matter can be remitted to the Commissioner, to deal with according to the reasons of the Court. Accordingly, an order to that effect should be made (in conjunction with an order setting aside the Assessment).
7.Finally, as is apparent from the submissions above (and her Honour’s Reasons), on no view can the Assessment be upheld, or confirmed, by the Court. The Assessment, as issued, is fundamentally different from the “assessment” that the Commissioner was arguing for at trial. At trial – and for the first time – the Commissioner was arguing for, and was asking the Court to uphold, an assessment based on s 89H, which had never been issued, and which did not exist. If the deficiency in the Commissioner’s assessment-making process is to be cured, it can only be cured through the reassessment process under s 9 of the TAA, subject to law.
[8]Reasons, at [297].
[9]Reasons, at [300]. In the Assessment, the ‘relevant acquisition(s)’ were described as follows:
[10]Appellant’s submissions (02.09.2025), at [4]−[7] (footnotes and emphasis (in italics) in original).
[11]Reasons, last sentence of [297]; and [302]−[303].
[12]Ibid.
[13]Section 9 of the TAA.
Appellant’s submissions on leave under s 109 of the TAA
In its outline, the appellant also confirmed that it ‘consents to an order that the Commissioner have leave to rely on a different ground, namely s 89H, to defend the Assessment’.[14]
[14]Appellant’s submissions (02.09.2025), at [11].
Appellant’s submissions on orders as to costs
Against the background of the Commissioner having advanced ‘at the very last minute’[15] a new or re-vamped basis on which he contended the appellant was liable for the amounts of duty that were claimed in the Assessment, the appellant submits that ‘the costs of the proceeding relating to the Commissioner’s original basis for the Assessment have to be paid for by the Commissioner’[16] and the costs of that part of the proceeding relating to s 89H should be paid by the appellant.[17]
[15]Appellant’s submissions (02.09.2025), at [8].
[16]Appellant’s submissions (02.09.2025), at [8].
[17]Appellant’s submissions (02.09.2025), at [10].
The appellant’s references to ‘the Commissioner’s original basis’ and ‘that part of the proceeding relating to s 89H’ were explained earlier in the appellant’s submission, as follows:[18]
3.. . . The Assessment was “inaccurate” in a fundamental respect – because the Commissioner had, at the last minute at trial, abandoned the basis upon which he had issued the Assessment on 30 September 2020 (being the ss 79(1) and (2) ground[19]) and was, at trial (some four years later) and for the first time, relying on a completely new, and different, basis for the Assessment (being the s 89H ground). The Commissioner made his initial determination, on 30 September 2020, to issue the Assessment on the basis that the three unitholders acquired interests of 37%, 37% and 26% (under ss 79(1) and (2)).[20] That basis for the Assessment was maintained by the Commissioner in his Notice of Determination, on 23 August 2023[21] (three years later), through to 29 [sic] November 2024 (four years later). That basis was, then, suddenly and without notice, abandoned by the Commissioner at trial on 30 [sic] November 2024 (being a one-day trial).[22]
[18]Appellant’s submissions (02.09.2025), at [3] (footnotes in original) (emphasis in bold italics added).
[19]Assessment letter dated 30 September 2020 from the Commissioner to the appellant’s then solicitors: CB, Tab 70, pp 585−587; and the Assessment, at Tab 5, p 77.
[20]Ibid.
[21]CB, Tab 7, p 88.
[22]The original basis for the Assessment was abandoned by the Commissioner: Reasons, [294], [296]: “However, on the appeal, the Commissioner contends [referring to s 89H(3)]; at [297], where reference is made to the Commissioner’s “revamped approach”; and at [300]: “ … where the Commissioner has … re-stated his position as to the basis on which he contends the appellant is liable for duty”; and at [306]: “as the Commissioner has, during the appeal … re-stated his case …”.
In support of its claim that the costs of the proceeding relating to the Commissioner’s original basis for the Assessment (i.e., being the ss 79(1) and (2) ground) have to be paid for by the Commissioner, the appellant relies upon the decision of Delany J in Razzy Australia Pty Ltd v Commissioner of State Revenue (No 2),[23] another landholder duty case, where the Commissioner had ‘at the very last moment, without explanation, … changed course’.[24]
[23][2021] VSC 409 (Razzy (No 2)).
[24]Razzy (No 2), at [60].
By way of background, the costs determination in Razzy (No 2) had its genesis in two proceedings (the South Melbourne Trust proceeding and the Lonsdale Trust proceeding) that were heard together before his Honour.[25] The claims in each proceeding arose from a deed whereby two individuals, each of whom was a member of three superannuation funds (that held units in two landholder unit trust schemes), agreed to separate their interests so that each became the sole member of a separate superannuation fund, and as restructured, the respective superannuation funds were to contain net assets equal to the relevant person’s existing aggregate entitlement in the three funds. The Commissioner imposed duty in respect of each transaction in the restructuring, based upon the resultant increase in the percentage of units held in the landholding unit trust, but the plaintiff trustees contended that the transactions were exempt from duty under s 89D(a) in Chapter 3 of the Duties Act 2000 (Vic)[26] in conjunction with s 40 in Chapter 2 of the Act. The plaintiff trustees paid the duty as assessed but sought restitution of money paid as stamp duty, alternatively, an order that the Commissioner refund duty previously paid on the basis that the transactions brought to tax were exempt from duty under Chapter 3.
[25]Razzy Australia Pty Ltd v Commissioner of State Revenue (2021) 65 VR 206 (Razzy).
[26]The agreed version of the legislation was as at 26 February 2018 being authorised version no. 112, incorporating amendments as at 20 December 2017.
Justice Delany found that in the South Melbourne Trust proceeding, the plaintiff trustees were entitled to a full refund of duty, and in the Lonsdale Trust proceeding, that the plaintiff trustees were entitled to a partial refund of duty.[27] As to costs, in the Lonsdale Trust proceeding, the parties were agreed that the plaintiff trustees were entitled to their costs, including reserved costs, on the standard basis to be paid by the Commissioner. In the Lonsdale Trust proceeding, however, there was no such agreement. Rather, in circumstances where the Commissioner had changed course at the hearing and abandoned his argument that s 89D(a) did not apply to redemptions, the plaintiff trustees sought an order that the Commissioner pay their costs on an indemnity basis for the whole of the proceeding, alternatively for part of the proceeding from the specified date(s) respectively when a Calderbank offer and an offer of compromise were made. The Commissioner opposed the making of any order for indemnity costs.
[27]Razzy (2021) 65 VR 206.
When his Honour was dealing with the plaintiff trustees’ application for an award of costs on an indemnity basis, he outlined the position and approach taken by the Commissioner in the face of the plaintiff trustees’ continued assertion that the argument was ‘hopeless’. Relevantly, for present purposes, His Honour stated:[28]
[28]Razzy (No 2), at [52], [56]-[62].
52The trial took place on 29 September 2020. Contrary to the position that had been maintained by the Commissioner consistently since 19 July 2019, during the hearing, the Commissioner accepted that s 89D(a) of the Act does not exclude an acquisition resulting from a redemption of units. No reason was given why that argument, that until the trial formed a central plank in the Commissioner’s case, was abandoned.
. . .
56The Commissioner did not elaborate upon why, at trial, the Commissioner accepted that as a matter of construction a notional transfer arising as a result of an acquisition caused by a redemption of units in a landholder could be exempt under s 89D(a) of the Act. As submitted on behalf of the plaintiffs in support of an indemnity costs order, both the proper construction of the section and the complex legislative history was found to support the construction of s 89D(a) of the Act, importing s 40, for which the plaintiffs contended.
57I do not accept that the Commissioner’s persistent pursuit of the redemption argument, and late abandonment of it without any explanation, necessarily means that the position previously contended for was ‘hopeless’. However, in abandoning what was undoubtedly a central plank of the case for the Commissioner at trial without explanation, the Commissioner did nothing to explain why the ‘concession’ was made. Was it made because the Commissioner had formed the view that the argument was ‘hopeless’ or was the concession made for some other and if so what reason?
58As the person having responsibility for the administration of taxation law for the State of Victoria, and, as the Commissioner submits, a person having an interest in obtaining the guidance of the Court as to the correct construction and application of relevant provisions of the Act, the failure to explain the very belated ‘concession’ and to elaborate upon the construction arguments that led to the point being abandoned was, to say the least, unhelpful.
59The costs submissions on behalf of the Commissioner contended that as the Reasons devoted 29 paragraphs to ‘explaining why the concession was rightly made’, the redemption argument could not properly be characterised as ‘hopeless’. I do not agree. The fact that 29 paragraphs of the Reasons are occupied with a consideration of s 89D(a) of the Act, of its text, purpose, context and its detailed legislative history is not a matter that assists the Commissioner in resisting an award of indemnity costs, at least in connection with the redemption of units issue.
60Of more relevance to the indemnity costs application is the fact that having maintained that a redemption of units did not satisfy the requirements of s 89D(a) of the Act from mid-2019 and, having caused the plaintiffs to prepare their case, and no doubt to incur substantial costs on the basis this was a critical issue, at the very last moment, without explanation, the Commissioner changed course. That conduct, in the absence of explanation, while not sufficient to support an order for indemnity costs of the whole of the proceeding, is conduct that supports the making of an order for indemnity costs from the outset in relation to that issue.
61That is the case not because of a finding of bad faith or because to maintain the argument was necessarily hopeless. It is appropriate to make an order for indemnity costs of that issue because the Commissioner put the plaintiffs to very considerable trouble and expense in relation to the issue. The Commissioner did so and then abandoned the argument without explanation. The overarching obligation to narrow the issues in s 23 of the CPA is not a duty that only applies once the case gets to trial. It is a duty that applies throughout the whole of the proceeding.
62The Court found the argument, upon which the Commissioner for so long relied, flawed both as a matter of construction and having regard to the detailed legislative history. The pursuit and then the abandonment of the argument in such unexplained circumstances is not conduct for which the plaintiffs should bear any part of the costs. While conduct falling short of the language employed by Tadgell J in AGC v de Jager, it is nevertheless conduct for which the innocent party should not be out of pocket. In that case his Honour said:
The Court may order costs on a solicitor/client basis, or on an indemnity basis, whenever a party has been subjected to high handed and unmeritorious conduct and it is just that the innocent party not be out of pocket thereby.
After considering the parties’ further submissions and arguments about the appropriateness of an order for indemnity costs, his Honour determined that ‘[t]he appropriate order is that the Commissioner pay the plaintiffs’ costs in the South Melbourne proceeding concerning the redemption of units issue and question 3 on an indemnity basis’.[29]
[29]Razzy (No 2), at [79].
In the present case, the appellant submits that the reasoning applied by Delany J in Razzy (No 2) is equally applicable here, even though no order for indemnity costs is sought. The appellant submits:[30]
9.. . . the Commissioner has put the appellant to significant trouble and expense by defending the Assessment on the original basis for so long (being a period of more than four years), only for the Commissioner to abandon that basis for the Assessment on the first (and only) day of the trial (and more than four years after the Assessment was issued). In the circumstances, and in light of the authority of Razzy, the appellant could seek an order for indemnity costs from the Commissioner in relation to this part of the proceeding, but it does not do; it simply seeks, as is just, an order for costs on the standard basis in relation to that part of the proceeding pertaining to the original basis on which the Assessment was issued.
10.As for the costs of that part of the proceeding relating to s 89H, the costs of that part of the proceeding should be paid by the appellant.
[30]Appellant’s submissions (02.09.2025), at [9]−[10] (emphasis in bold italics added).
Commissioner’s submissions on final orders
The Commissioner submitted that, as the Court found that each of the Transferees — being the three newly-formed trustee companies — had acquired a significant interest in a landholder, being the Victory Hybrid Unit Trust, the Court ‘rejected the ‘central plank of the Appellant’s appeal, which must therefore be wholly dismissed’.[31] Further, the Commissioner noted that ‘[i]n no respect was the Appellant successful in the proceeding’.[32]
[31]Respondent’s submissions on final orders (Commissioner’s submissions (02.09.2025)), at [2].
[32]Ibid.
The submission continued, stating:[33]
The Court considered that the Assessment was inaccurate in how it described the manner in which the Commissioner calculated the Appellant’s duty liability. It therefore concluded that it is appropriate to remit the Assessment to the Commissioner.
[33]Commissioner’s submissions (02.09.2025), at [2].
While the bare facts stated above are correct, the Commissioner’s submission fails to mention that the reason why the Court considered that the Assessment was inaccurate was because at, or following, the hearing of the taxpayer’s appeal, the Commissioner re-vamped or re-stated the basis on which he sought to defend the Assessment.
The context in which the Court reached that position is relevant. By way of background, the position was that at the hearing of the appeal on 26 November 2024, at the close of oral submissions made by counsel for the Commissioner, the Court requested that the Commissioner file an ‘aide-mémoire’ setting out the re-vamped basis which he had outlined in oral submissions as being the basis on which the Commissioner now sought to defend the Assessment.
The Commissioner’s Aide-mémoire – s 89H(3) was filed on 20 December 2024. Subsequently, the appellant raised the issue of whether the Commissioner required leave under s 109(b) of the TAA to rely on grounds other than those on which the taxpayer’s objection was disallowed. The issue having been raised, amongst others, the Court then listed the matter for mention, which took place on 14 February 2025. At the mention, counsel for the appellant informed the Court that ‘it did not oppose the respondent being granted such leave as may be required pursuant to s 109(b) of the Taxation Administration Act 1997 (Vic) for his defence of the assessment’,[34] whereupon counsel for the Commissioner sought leave.
[34]Reasons, at [161].
The Reasons record that the Commissioner, in his Aide-mémoire – s 89H(3), acknowledged that the Assessment was ‘inaccurate’ in the following ways:[35]
(a)it describes the interests acquired by each Acquirer as being less than 100%, and the aggregate of interests being 100% rather than 300%; and
(b)it does not record that the Commissioner ‘determined otherwise’ under s 89H(4) and he accepts that in terms he did not do so.
[35]Reasons, at [298] citing the Commissioner’s Aide-mémoire – s 89H(3), at [9].
Furthermore, the Reasons record that while the Commissioner submitted in his Aide-mémoire – s 89H(3), that ‘[n]otwithstanding these inaccuracies’, in circumstances where ‘the Assessment charged the correct amounts of duty, penalty tax and interest on the appellant it would not be appropriate to remit the Assessment to the Commissioner’ as ‘[a]ny error in the Assessment is immaterial’, the Court did not share the Commissioner’s view regarding the correctness of the Assessment nor his view that any error in the Assessment is immaterial.[36]
[36]Reasons, at [299]−[300] citing the Commissioner’s Aide-mémoire – s 89H(3), at [10].
Accordingly, in circumstances where the Commissioner had acknowledged that the Assessment made on 30 September 2020 was inaccurate, and did not reflect ‘what the Commissioner in effect did’ or accord with the ‘relevant acquisitions(s)’ now relied on by the Commissioner, as set out in his Aide-mémoire – s 89H(3), the Court determined that it is appropriate for the Court to remit the Assessment to the Commissioner. Accordingly, the Commissioner now seeks an order for remittal, which will operate to enliven the process under s 114, requiring the Commissioner to take ‘action that is necessary to give effect to the [Court’s] decision’.[37]
[37]Section 114 is set out earlier in these reasons.
As to the issue of costs, the Commissioner submits that the appropriate order is that the appellant pay the respondent’s costs on the standard basis.[38]
[38]Commissioner’s submissions (02.09.2025)), at [3].
First, the Commissioner maintains that he has ‘succeeded in the proceeding, albeit on a different basis from that appearing on the face of the Assessment’.[39] He submitted that the ‘Appellant’s challenge to its liability to pay duty has been wholly rejected’ and while the Assessment should be remitted to the Commissioner, ‘this is for the purpose of regularising it, not altering the duties liability of the Appellant’.[40]
[39]Commissioner’s submissions (02.09.2025)), at [8].
[40]Commissioner’s submissions (02.09.2025)), at [8].
Secondly, the Commissioner says that having made two Calderbank offers to the Appellant to settle the proceeding, each on a basis more favourable to the Appellant than the result it has obtained, but where ultimately both offers were rejected, the Commissioner is entitled to an award of costs.
Thirdly, the Commissioner points to the intemperate language used in the Appellant’s Memorandum of 20 December 2024[41] that was filed with the Court, and observes that language of the kind used by the Appellant is ‘unnecessary and inappropriate’ and is a matter the Court may take into account when formulating an appropriate costs order.
[41]The Appellant’s Memorandum referred to the Commissioner’s re-vamped argument that it is s 89H that supports the assessment and comments (at [12]) that ‘[t]his argument by the Commissioner is, with great respect, a waste of the Court’s time’. Further, the Appellant submitted (at [141]):
No court should have an argument so devoid of merit presented to it in the hope that the court might “buy it” – as it carries with it the risk of embarrassment to the court if that does happen, and the decision is later overturned on appeal. This criticism of the Commissioner’s submission applies not only to his submissions on s 89H(2), but to his submissions on s 89H(3) as well – which are, in the appellant’s submission, equally devoid of merit.
Accordingly, the Commissioner seeks an order that:[42]
The Appellant pay the Respondent’s costs on the standard basis, to be taxed in default of agreement.
[42]Commissioner’s submissions (02.09.2025)), at [3].
Consideration and disposition
As there is no dispute between the parties concerning the issue of leave under s 109, I propose making the order for leave, in the terms sought by the Commissioner.
As to the disposition of the appeal, I do not accept the appellant’s submission that while the Court indicated in its Reasons that the appeal would be dismissed, ‘the more appropriate order, if an order of that kind were to be made, would be that the “proceeding” be dismissed’.[43] In my view, in circumstances where a taxpayer who is dissatisfied with the Commissioner’s determination of an objection has exercised its rights under s 106 of the TAA and requested that the Commissioner ‘treat the objection as an appeal’ and cause it to be set down for hearing in this Court, the proceeding is one brought by way of an appeal. As the appellant has not been successful, the appropriate order is, as the Commissioner submitted, that the appeal be dismissed.
[43]Appellant’s submissions (02.09.2025)), at [2].
Nor do I accept the appellant’s submissions in relation to the remitter. On the hearing of an appeal, s 112 empowers the Court to ‘make any order it thinks fit’ and the Court ‘may by order confirm, reduce, increase or vary the assessment or decision’. Section 114(1) then provides that within 60 days after the decision on review or appeal becomes ‘final’ — which is addressed in s 114(2) — ‘the Commissioner must take any action that is necessary to give effect to it’, being the decision on the appeal.
In the present case, in circumstances where the Commissioner is seeking to recover duty in the same amount as was assessed, the Reasons indicated the gist of what is required to be done by the Commissioner to give effect to the decision on the appeal, as follows:[44]
305In my view, in the circumstances, it is appropriate for the Court to remit the Assessment to the Commissioner. If the Commissioner is seeking to recover duty in the same amount but on the basis contended for on the appeal — reflecting ‘what the Commissioner in effect did’ — then the relevant acquisitions relied on must be specified and any exercise of the Commissioner’s discretion to ‘determine otherwise’ under s 89H(4) should be recorded.
[44]Reasons, at [305] (emphasis in bold italics added).
As to the issue as to costs, I note that each of the Calderbank offers upon which the Commissioner relies were effectively ‘counter-offers’ made by the Commissioner after rejecting offers made by the appellant.[45] The Commissioner’s first Calderbank offer was dated 12 April 2024, which was several months before the Commissioner’s Outline of Submissions (22.07.2024) was filed, and well in advance of the hearing of the appeal on 26 November 2024. The Commissioner’s second Calderbank offer, dated 9 December 2024, was filed after the hearing took place. But as each of those Calderbank offers was made in advance of the Commissioner filing his Aide-mémoire – s 89H(3) on 20 December 2024, in which the Commissioner acknowledged that the Assessment is inaccurate in a number of ways, and revealed, for the first time, ‘what the Commissioner in effect did’ I am not satisfied that the appellant’s rejection of those offers bears materially on the question of costs.
[45]The respective offers made by the Appellant are not before the Court.
As was noted in the Reasons, on the appeal the Commissioner advanced a new or re-vamped basis on which he contended that the appellant is liable for the amounts of duty that were claimed in the Assessment. In so doing, the Commissioner moved ground and re-stated his case, and in his Aide-mémoire – s 89H(3) he effectively relied on grounds other than those on which the Objection was disallowed. The appellant did not oppose the grant of such leave as may be required to permit that course, but this late change of position by the Commissioner necessitated the matter being called on for mention and the filing of a further response by the appellant.[46]
[46]Appellant’s response to Commissioner’s note on section 89H, dated 23 December 2024.
In the circumstances, it is not surprising that the appellant calls in aid the observations of Delany J in Razzy, as being ‘equally applicable here’, and submits that:[47]
the Commissioner has put the appellant to significant trouble and expense by defending the Assessment on the original basis for so long (being a period of more than four years), only for the Commissioner to abandon that basis for the Assessment on the first (and only) day of the trial (and more than four years after the Assessment was issued).
[47]Appellant’s submissions (02.09.2025), at [9].
I accept that the appellant has been put to significant trouble and expense as a result of the Commissioner re-vamping his case. Also, from the Court’s perspective, late changes of position of this kind by the Commissioner are something that should be avoided at all cost.
Accordingly, in my view, the appellant should not be required to pay the entirety of the Commissioner’s costs of the appeal. Rather I propose to fix the proportion of the Commissioner’s costs that are payable by the appellant at 75 per cent, that figure being an assessment which, in my view, is fair and just in all of the circumstances.
There is one further matter to be addressed. It is understandable that the appellant was not pleased with the Commissioner’s late change of position and was critical of the Commissioner bringing forward his argument on s 89H at the hearing, after having defended his Assessment for many years on the (now abandoned) original basis. However, the intemperate language the appellant used in his memorandum, when responding to the Commissioner’s change of position, is inappropriate and has no place in submissions filed, or made, in this Court. Submissions expressed in that vein do not assist the Court and the appellant’s legal representatives should desist forthwith from engaging in such conduct.
In the circumstances, I propose making the following orders:
(a) To the extent necessary, the respondent is granted such leave as is required under s 109 of the Taxation Administration Act 1997 (Vic) to defend the assessment on the basis set out in the ‘Respondent’s aide-mémoire – Duties Act2000 (Vic) s 89H(3)’ filed on 20 December 2024.
(b) The appeal is dismissed.
(c) Duties assessment No 23568485 issued by the respondent to the appellant on 30 September 2020 be remitted to the respondent to give effect to the Court’s reasons.
(d) The appellant pay 75% of the respondent’s costs on the standard basis, to be taxed in default of agreement.
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