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Harrison v Commissioner of State Revenue[2021] QCAT 149

Harrison v Commissioner of State Revenue[2021] QCAT 149

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Harrison v Commissioner of State Revenue [2021] QCAT 149

PARTIES:

Francis Lister Harrison

(applicant)

v

Commissioner of State Revenue

(respondent)

APPLICATION NO/S:

GAR080-16

MATTER TYPE:

General administrative review matters

DELIVERED ON:

20 April 2021

HEARING DATE:

17 July 2020

HEARD AT:

Brisbane

DECISION OF:

Member Fitzpatrick

ORDERS:

  1. The decision of the Commissioner of State Revenue made 29 January 2021 is set aside.
  2. The matter is remitted to the Commissioner of State Revenue for any assessment and necessary adjustment of land tax for the 2015-2016 financial year, on the basis that section 20(1) of the Land Tax Act 2010 (Qld) is applicable to the applicant Francis Lister Harrison

CATCHWORDS:

ESTOPPEL – ISSUE ESTOPPEL – where finding by Queensland Civil and Administrative Appeal Tribunal that tax payer was a trustee pursuant to constructive trusts for the purpose of calculating land tax - where same question arose on a review in relation to the succeeding tax  year  – whether issue estoppel against the parties -whether any exception to issue estoppel

Land Tax Act 2010 (Qld), s 11, s 19, s 20

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 164

Taxation Administration Act 2001 (Qld), s 71

Administration of Papua New Guinea v Daera Guba (1973) 130 CLR 353

Arnold v National Westminster Bank PLC [1991] 2 AC 93

Arnold v National Westminster Bank PLC [1989] Ch 63

Barns v Barns (2003) 214 CLR 169

Bigg v Queensland Trustees Ltd [1990] 2 Qd R 11

Blair v Curran (1939) 62 CLR 464

Cam & Sons Pty Ltd v Commissioner of Land Tax (1965) 112 CLR 139

Commissioner of State Revenue v Harrison [2019] QCA 50

Development and Finance Pty Ltd v The Commissioner of State Revenue [2016] QCAT 538

Giumelli v Giumelli (1999) 196 CLR 101

Haggarty v Wood [2013] QSC 327

Harrison v Commissioner of State Revenue [2016] QCAT 150

Harrison v Commissioner of State Revenue [2018] QCATA 75

Kuligowski v Metrobus (2004) 220 CLR 363

Melbourne City Investments Pty Ltd v Leighton Holdings Limited [2015] VSCA 235

Morris v Riverwild Management Pty Ltd (2011) 38 VR 103

Outram v Morewood (1803) 102 ER 630

Owen v Menzies [2013] 2 Qd R 327

Powell v Queensland University of Technology [2018] 2 Qd R 200

Queensland Trustees Ltd v Commissioner of Stamp Duties (Qld) (1956) 96 CLR 131

Riches v Hogben [1985] 2 Qd R 292

Sidhu v Van Dyke (2014) 251 CLR 505

Trustees for the Roman Catholic Church for Diocese of Bathurst v Hine [2016] NSWCA 213

APPEARANCES &

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

M Brennan, QC, with F Chen of Counsel, instructed by Crown Law

REASONS FOR DECISION

Background

  1. [1]
    This is an application for review of an objection decision of the Commissioner of State Revenue made 29 January 2016, in which the Commissioner affirmed an assessment for land tax for the 2015-2016 financial year,  based on the applicant’s landholdings, being his sole ownership of a property at Bardon and two properties at Paddington (the properties).
  2. [2]
    In short, by application of sections 19 and 20 of the Land Tax Act 2010 (Qld) (LTA), the Commissioner assessed the applicant Mr Harrison for land tax based on the aggregate value of the three properties on the basis that he is the owner of all three. Mr Harrison objected on the ground that he and his wife have made mutual wills under which the properties are left by the survivor of them to their children, who each live at the three properties. It is said that under those mutual wills, there is an institutional, not remedial constructive trust in respect of each property which arose when the relevant beneficiary first acted on the basis of the mutual wills.[1]
  3. [3]
    The Commissioner asserted that Mr Harrison is the registered owner of each of the properties and that he is the owner for land tax purposes. The Commissioner framed the relevant question as - whether Mr Harrison is holding the properties in his own capacity or as trustee.
  4. [4]
    The Commissioner found that Mr Harrison is holding the properties and receiving rent in his own capacity. The Commissioner referred to Mr Harrison’s advice that the purpose of the rent was among other things to offset the interest cost of the borrowings necessary to buy the properties and to provide he and his wife with an income after retirement.
  5. [5]
    The Commissioner concluded that it is Mr Harrison’s, and his wife’s, intention to bequeath the properties to their children upon their deaths. It was acknowledged that agreements for mutual wills may give rise to a constructive trust, however, that trust does not arise until the death of the first testator. As neither Mr Harrison nor his wife have died, the Commissioner considered they are free to alter the agreement regarding the disposition of the properties at any time. Therefore, no constructive trust has arisen yet.
  6. [6]
    Mr Harrison has applied for a review of the decision to this Tribunal.[2]
  7. [7]
    By agreement of the parties and upon a grant of leave by the Tribunal pursuant to section 71(2) of the Taxation Administration Act 2001 (Qld), the Tribunal ordered on 5 March 2020 that:
    1. the grounds on which the application for review is made are not limited to the applicant’s original ground of objection dated 25 September 2015;
    2. the review by this Tribunal of the respondent’s decision dated 29 January 2016 will proceed on the grounds of objection that the applicant is a trustee of a trust within the meaning of section 20 of the Land Tax Act 2010 (Qld) on the basis of the factual matters set out at paragraph [35] of the decision of the Queensland Court of Appeal in Commissioner of State Revenue v Harrison [2019] QCA 50, such that trusts arose:
    1. (a)
      when each of the applicant’s children acted on the basis of the mutual wills made by the applicant and his wife, by moving into houses purchased for each of them and starting to pay rent to the applicant and also in the case of one child (Tom) also (with his wife) selling the house that they currently owned, to give effect to an agreement made between the applicant, the applicant’s wife and each of their children that:
  • the applicant would purchase a house for each of the children to live in;
  • the children would pay rent to the applicant;
  • the applicant and his wife would make mutual wills, under which they would leave the houses purchased for each of their children, to the survivor of them; and
  • the survivor would leave to each of the children respectively the house in which each of them lives;
    1. (b)
      by way of estoppel by representation;
    2. (c)
      as common intention constructive trusts;
    3. (d)
      as trusts sub modo; or
    4. (e)
      by the applicant acting in a fiduciary capacity within the definition of “trustee” in the dictionary in schedule 4 to the Land Tax Act 2010 (Qld).
  1. [8]
    By leave granted at the hearing on 17 July 2020, the Tribunal granted further leave to Mr Harrison to expand his grounds of objection to include the objection that s 11 of the Land Tax Act 2010 (Qld) applies to the arrangements such that a sale of each property had occurred to each child as buyer and that they were taken to be owners of the land as soon as they were in possession of it.
  2. [9]
    The facts referred to, extracted from paragraph [35] of the Court of Appeal decision, referring to the parties’ names for clarity, are:

[9] Mr Harrison is married to Gailene Harrison.  They have three children, Amy, Tom and Matthew.

[10] Some time before April 2008, Mr and Mrs Harrison made agreements with Amy and Tom, and some years later, a similar agreement with Matthew, to the effect that:

  1. Mr Harrison would buy a house near his home, in which Amy and her family would live;
  2. Mr Harrison would buy a house near his home, in which Tom and his family would live;
  3. Tom and his wife would sell the house which they currently owned;
  4. Mr Harrison would buy a house near his home, in which Matthew would live;
  5. for the purpose of buying those houses, Mr Harrison would borrow funds from his bank, which would take a mortgage over each property, and Mr Harrison would make the repayments on those loans;
  6. each of Amy, Tom and Matthew would pay a reasonable rent for their respective houses to Mr Harrison while he lives and, if he pre-deceases Mrs Harrison, after his death to her while she lives;
  7. the purpose of the rent in each case was to defray the costs of the mortgages and then to provide a source of income for Mr Harrison and Mrs Harrison in their retirements; and
  8. Mr Harrison and Mrs Harrison would make mutual wills, under which they would leave each of the houses to the survivor of them and the survivor would leave to Amy, Tom and Matthew respectively the house in which each child lives.

[11] Later, to give effect to those agreements:

  1. in April 2008, Mr Harrison bought a property in Paddington, into which Amy and her family moved, where they have since lived and in respect of which Amy pays an agreed rent to Mr Harrison;
  2. in or around June 2008, Mr Harrison bought a property in Bardon, into which Tom and his family moved, where they have since lived and in respect of which Tom pays an agreed rent to Mr Harrison;
  3. at about the same time as (b) happened, Tom and his wife sold their former home;
  4. in about December 2011, Mr Harrison bought another property in Paddington, into which Matthew moved, where he has since lived and in respect of which Matthew pays an agreed rent to Mr Harrison;
  5. in October 2011, in anticipation of completion of the purchase of the property for Matthew, Mr and Mrs Harrison made mutual wills, in which they referred to the arrangements that they had made with their children concerning the properties and they provided for the properties to be left to each of the respective children on the death of the survivor; and
  6. Mr and Mrs Harrison have since made new wills, but in relevant respects they contain the same terms of the wills referred to in paragraph (e).

[12] In their wills, Mr and Mrs Harrison also made the following statements in the course of explaining the background to the gifts of the properties to their children (quoting from Mr Harrison’s will):

For their better security and to achieve flexibility and reduce the cost, including of any applicable taxes, if any of them wanted to sell their houses and buy another, I agreed (by exchange of emails) with each of Amy and Tom and has [sic] agreed orally with Matthew, such agreement to be confirmed by an exchange of emails, to sell them their house for the price I paid for it, with it being understood that if such a sale were completed, that they would continue to make payments commensurate with the rent previously paid.

  1. [10]
    The parties agree that the facts as set out are not in dispute. I note that the reference to an agreement with each of the children is agreed by the parties to be one agreement as opposed to two agreements with each of them.[3]

Previous decisions

  1. [11]
    The objection decision of the Commissioner with respect to an assessment of land tax for the 2013/2014 years in relation to the properties has been the subject of review in this Tribunal and subsequent appeal.
  2. [12]
    By a decision made 28 April 2016[4] the Tribunal was not satisfied that Mr Harrison holds each property on trust. It was concluded that section 20(1) of the LTA does not apply and that section 19(1) of the LTA does apply, so that the Commissioner is obliged to assess Mr Harrison’s liability for land tax on the total value of all three properties.
  3. [13]
    That decision was overturned by the Appeal Tribunal[5] which found that a trust arose as a result of estoppel by representation and that a constructive trust existed based on a common intention. The Appeal Tribunal found that no trust arose on the other grounds advanced by Mr Harrison, namely, on the basis of execution of mutual wills and on the basis of a promise to convey land (a trust sub modo). It also found that Mr Harrison was not acting in a fiduciary capacity within the definition of “trustee” in the LTA.
  4. [14]
    The Commissioner sought leave to appeal to the Queensland Court of Appeal. Leave was refused because the Commissioner suffered no substantial injustice and no important point of principle arose.[6]
  5. [15]
    Justice Davis in the Court of Appeal made the following observation:

Whether a constructive trust arose on the facts as found by the Tribunal in its original jurisdiction involves the application of principles which have been the subject of analysis in various decisions of the High Court of Australia.[7]In the particular circumstances of this case, the Appeal Tribunal may have erroneously applied those principles to the facts.  Obviously there is no danger that the decision of the Appeal Tribunal will throw doubt on the jurisprudence established by the High Court’s decisions.  No issue of general principle arises in relation to any of the Queensland legislation relevant to the Appeal Tribunal’s decision.[8]

  1. [16]
    Her Honour Justice Philippides agreed with Justice Davis’ reasons to refuse leave to appeal. Her Honour did however address the different conclusion reached by Justice Morrison and made her own observations which could be interpreted as a criticism of the Appeal Tribunal’s decision.
  2. [17]
    Justice Morrison considered there had been an error of law on the part of the Appeal Tribunal in proceeding on the basis that there was only one agreement between Mr Harrison and each child in respect of the purchase of property in which each child was entitled to live, the payment of rent by that child, and the making of mutual wills leaving that property to the relevant child. His Honour said that was an error of law and that there were separate, though related agreements.  One was that Mr Harrison would buy a property in his own name, borrowing and mortgaging the property but each child would be entitled to occupy upon payment of rent.  The second was for the making of mutual wills by Mr Harrison and his wife.
  3. [18]
    Justice Morrison considered that because of the error identified by him, the Appeal Tribunal did not consider the legal effect of the arrangements on a proper footing. For example, he said it is arguable that the agreement under which the properties were acquired and rent paid, was not such as would give the children a beneficial interest in the land. It was a right to occupy upon the payment of rent. Further for the reasons given in Barns v Barns [9] the agreement and the mutual wills did not create a beneficial interest in the children, as such an interest does not arise before the death of the last survivor.
  4. [19]
    Justice Philippides said that the error of law identified by Justice Morrison was not proposed as a ground of appeal, moreover Counsel for the Commissioner conceded that there was no challenge to the finding that there was one agreement as opposed to two. Her Honour observed in passing that the Appeal Tribunal considered the issues before it were not assisted by a consideration of whether the rent was received by Mr Harrison personally and so treated in income tax returns, but concluded that it was not. Her Honour noted that Counsel for the Commissioner confirmed that conclusion was not the subject of complaint.
  5. [20]
    The area where Justice Philippides may be thought to be critical of the Appeal Tribunal’s decision relates to Her Honour’s discussion of the error of law raised before the Court of Appeal. Her Honour notes that the Commissioner argued that the Appeal Tribunal was in error in finding that the Tribunal Member below erred in failing to conclude that there was evidence of sufficient detriment and its finding that sufficient detriment was shown. Her Honour noted that the Appeal Tribunal considered the decision of Riches v Hogben[10] approved in Giumelli v Giumelli[11] and in Sidhu v Van Dyke[12] and went on to set out the Appeal Tribunal’s finding.[13] Justice Philippides expressed no view in relation to the finding, but goes on to say that: “irrespective of whether an error of law was established as contended for by the applicant, no substantial injustice was shown, nor was an important point of principle raised to warrant the granting of leave.”[14]

Issues

  1. [21]
    The Commissioner agrees with Mr Harrison that the issues for this Tribunal are:
    1. (a)
      Is there an issue estoppel against the Commissioner as a result of the decision of the Appeal Tribunal? More particularly, the issue is whether the Commissioner is estopped from denying that, on the stated facts, Mr Harrison held each of the three properties as the trustee of a constructive trust where each of those trusts arose by way of estoppel by representation and by common intention constructive trust.

It is conceded by the Commissioner that a finding by this Tribunal that the Commissioner is estopped from denying the applicant held the properties as constructive trustee would be determinative of the review before this Tribunal.

The Commissioner accepts the proposition that if an issue estoppel is found, the estoppel binds Mr Harrison and the Commissioner as to the Appeal Tribunal’s decision that, on the facts as found by the Appeal Tribunal, Mr Harrison was trustee of a constructive trust in respect of each of the properties for the purposes of the application of the LTA by reason of estoppel by representation and common intention constructive trust.[15]

  1. (b)
    If there is no issue estoppel, the Tribunal must consider whether, on the basis of the factual matters set out earlier, the trusts arose:
    1. as a result of the children acting on the basis of the mutual wills made by Mr Harrison and his wife;
    2. by way of estoppel by representation;
    3. as common intention constructive trusts;
    4. as trusts sub modo; and/or
    5. by the applicant acting in a fiduciary capacity within the definition of “trustee” in the dictionary in schedule 4 to the Land Tax Act 2010 (Qld).
  2. (c)
    Whether s 11 of the LTA applies on the agreed facts. Leave has been granted for a further ground of objection to be argued by Mr Harrison to the effect that the relationship between he and his children can be characterised as one of buyer and seller so as to fall within the terms of s 11 of the LTA.

Is there an issue estoppel?

The general principles

  1. [22]
    I accept Mr Harrison’s submissions as to the elements of an issue estoppel. The Commissioner made no submissions to the contrary.
  2. [23]
    Mr Harrison sets out the nature of an issue estoppel, as follows:
    1. (a)
      the issues which are the subject of an issue estoppel are those fundamental matters which are necessarily established as the legal foundation or justification of a previous decision;[16]
    1. (b)
      the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue;[17]
    2. (c)
      for the doctrine of issue estoppel to apply in the second set of proceedings, the requirements are:
      1. the same question has been decided;
      2. the judicial decision which is said to create the estoppel was final; and
      3. the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.[18]
    3. (d)
      The doctrine of estoppel extends to any tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute…[19]

Findings

  1. [24]
    There is no dispute and I find that:
  1. (a)
    the Appeal Tribunal decision was final; 
  2. (b)
    the parties to the Appeal Tribunal proceedings and these proceedings are the same; and
  3. (c)
    on the authorities cited by the parties a decision of the Appeal Tribunal is capable of creating an issue estoppel.

The Commissioner’s submissions

  1. [25]
    The Commissioner relies on two grounds to assert that no issue estoppel applies against the Commissioner as a result of the decision in the Appeal Tribunal. First, the issues to be determined are not the same in that the question of detriment is excluded from this Tribunal’s consideration. Secondly, that the decision of the Appeal Tribunal is wrong.

Are the issues to be determined the same?

  1. [26]
    The Commissioner contends that what is at issue is whether the questions raised by paragraph 2(a), (b) and (c) of the 5 March 2020 Order are precisely the same as the questions determined in the applicant’s favour by the Appeal Tribunal where the Appeal Tribunal’s decision that the applicant is a trustee of a constructive trust, relied on the Appeal Tribunal’s findings as to the nature of the agreement and of the existence and sufficiency of detriment.
  2. [27]
    It is said that a different question arises in these proceedings in respect of ground 2(a), (b) and (c) of the Consent Order made on 5 March 2020.
  3. [28]
    The Commissioner submits that the stated facts as set out earlier are the uncontested findings of fact made by the Tribunal at first instance with respect to the 2013/2014 assessment. The Commissioner says that those facts do not include a finding of the existence or sufficiency of detriment or detrimental reliance. The Commissioner says the Appeal Tribunal found that the failure to conclude there was evidence of sufficient detriment to establish a constructive trust, based upon the arrangements in place between the parties, was an error on the part of the Member below. Further, the Appeal Tribunal expressed the view that there was sufficient detriment to enable a conclusion to be reached that Mr Harrison held each of the properties on constructive trust based on the common intention of the parties. The Commissioner submits that the Appeal Tribunal’s finding with respect to detriment was critical to its decision.
  4. [29]
    The Commissioner submits that the issue being raised in these proceedings is whether on the stated facts, which necessarily exclude any finding of detriment or detrimental reliance, the applicant may be found to be a trustee of a constructive trust for each of the properties by application of the principles of estoppel by representation or common intention constructive trust. The Commissioner submits that the issues are not identical, because the matter previously determined by the Appeal Tribunal relied on the fact that there was sufficient detriment. Whether the applicant is now found to be a trustee on either of the grounds cannot be determined in precisely the same manner that it was previously.  The Commissioner says that the critical foundational fact is excluded from this Tribunal’s consideration.
  5. [30]
    The Commissioner submits that the critical foundational fact of “detriment” is excluded from consideration by this Tribunal because it does not appear as a fact in the list of agreed facts referred to in the 5 March 2020 order. It is submitted that as a result, the issues to be determined are different from those previously determined by the Appeal Tribunal.
  6. [31]
    To address the Commissioner’s submissions, I conclude first that the Appeal Tribunal has decided the same overarching question as must be decided in this proceeding.
  7. [32]
    The Appeal Tribunal expressed the central issue to be determined in the appeal before it, as whether the Commissioner and in turn the Tribunal below was correct in law in concluding that the appellant is the owner in his own right of each of the three properties or whether, as the appellant contends, he is the trustee in each case and ought not to be assessed for land tax on the aggregate value of the three properties.[20]
  8. [33]
    Obviously, this Tribunal does not have an appeal function. However, it does have to decide whether the applicant is the owner in his own right of each of the three properties or whether he is the trustee in each case and ought not to be assessed for land tax on the aggregate value of the three properties.
  9. [34]
    There is no dispute that on the Appeal Tribunal’s analysis a finding with respect to detriment was critical to its decision.  In my view that finding was a finding as to an ultimate fact which, by reference to the established principles, creates a issue estoppel as to that finding.  A finding of ultimate fact is different to findings of evidentiary fact. There is no issue estoppel as to evidentiary facts found in the course of determining the affirmative or negative of an issue.[21]The finding by the Appeal Tribunal as to detriment was not a finding as to an evidentiary fact.
  10. [35]
    The conclusion that the Appeal Tribunal’s finding of detriment was a finding of an ultimate fact is revealed by the way the Appeal Tribunal approached the question. The question of “sufficient detriment” was squarely before the Appeal Tribunal. By ground of appeal number four, Mr Harrison contended:

In the alternative the applicant seeks leave to appeal from the above decision on the grounds that the learned Member ought to have characterised the facts proved as amounting to a detriment within the meaning of that expression as he used it in his reasons.[22]

  1. [36]
    The Appeal Tribunal concluded that detriment was an element of a constructive trust arising from estoppel by representation and also a common intention constructive trust. It held that the learned Member erred in failing to conclude that there was evidence of sufficient detriment to establish a constructive trust based upon the arrangements in place between the parties.
  2. [37]
    The Appeal Tribunal canvassed the evidence in the Tribunal below relevant to the question of detriment.
  3. [38]
    It noted that that the Member below had regard to clear evidence of promises to the children that they may occupy the properties during the lives of Mr and Mrs Harrison without having to buy the properties or to pay interest on the loans to purchase the properties or to pay the usual costs of ownership such as rates; and that, ultimately, they will become the legal owners of the properties.
  4. [39]
    The Appeal Tribunal referred to the Member’s finding that there was clear evidence that each child had acted on those promises by moving into the relevant house, paying rent and using it as the family home, and in the case of one child, selling their current family home.  Although there was no evidence, the Member readily inferred that each child had arranged his or her financial and family affairs on the basis of and in reliance on the promises. Despite this the Member found that there was no evidence from the children nor Mr Harrison of what they have done in this respect (other than moving in and paying rent) nor whether they have suffered any detriment as a result.
  5. [40]
    On the Appeal Tribunal’s analysis the case involved the giving of specific consideration on the part of the children, not only their promises under the agreement but in one case selling an existing property to take up occupation.  Furthermore, it was accepted that each of the children had performed their part of the agreement by paying the so-called “rent” on the property.
  6. [41]
    Those facts led to the conclusion that the Member erred in failing to conclude that there was evidence of sufficient detriment to establish a constructive trust based upon the arrangements in place between the parties.  The result was a finding that at the time of the relevant assessments, the appellant held each of the three properties on trust individually for each of the adult children.
  7. [42]
    The significance of a finding by the Appeal Tribunal as to detriment, by which term I include a finding as to whether there is sufficient detriment, is that it is capable of creating an issue estoppel because it is a finding of an ultimate fact.[23]
  8. [43]
    The reasoning is best explained by the often-cited judgment of Dixon J in Blair v Curran and Perpetual Trustee Co. (Ltd):

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.  The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared…

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded.  In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established.  Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived.  But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order.  In the phraseology of Coleridge J in R v Inhabitants of the Township of Hartington Middle Quarter (1855) 4 E & B 780 at p 794 the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue.  Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.

…Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion.[24]

  1. [44]
    The same issue of whether there is sufficient detriment to establish a constructive trust  is before this Tribunal in the review proceeding. The Commissioner accepted that if no issue estoppel is found by me, I would have to consider whether the agreed facts give rise to an inference that there was sufficient detriment.[25]
  2. [45]
    It is difficult to understand how it can be said by the Commissioner on the one hand that this Tribunal must determine if, on the facts, an inference arises as to whether there was sufficient detriment, and yet put the submission that by the terms of the 5 March 2020 Orders the question of detriment is excluded from consideration, such that identical issues do not arise as between the Appeal Tribunal and this Tribunal.
  3. [46]
    The facts set out earlier are the substratum of evidentiary facts before each of the Tribunal, Appeal Tribunal and Court of Appeal on the same question relating to the previous assessment year. The purpose of the 5 March 2020 Orders was to reduce the cost of the proceeding by setting out an agreed road map for the parties, to avoid the need for the filing of evidence and to ensure that the issues the parties required to be determined were spelled out. The 5 March 2020 Orders were made by consent and after full discussion with the parties.
  4. [47]
    At the oral hearing Senior Counsel for the Commissioner made clear that the Commissioner did not contend that by the statement of agreed facts this Tribunal sought to circumvent the doctrine of issue estoppel.[26]
  5. [48]
    The Orders do not purport to limit any finding which the Tribunal may make by reference to the agreed facts.
  6. [49]
    For those reasons, I do not consider the framing of the 5 March 2020 Orders by reference to the agreed facts creates a different question to be determined than was determined by the Appeal Tribunal.

Findings

  1. [50]
    I find that the same decision is required to be made by this Tribunal as was made by the Appeal Tribunal with respect to the previous tax year.
  2. [51]
    I find that the same ultimate fact as to “sufficient detriment” is required to be made by this Tribunal, as was made by the Appeal Tribunal, with respect to the previous tax year by reference to the same substratum of facts.
  3. [52]
    For these reasons an issue estoppel arises against the Commissioner because of the decision of the Appeal Tribunal that Mr Harrison was trustee of a constructive trust in respect of each of the properties for the purposes of the application of s20 (1) of the  LTA by reason of estoppel by representation and common intention constructive trust.
  4. [53]
    Futher, an issue estoppel arises against the Commissioner in relation to the Appeal Tribunal’s finding of ultimate fact that there was sufficient detriment to establish a constructive trust based on the arrangements between the Harrisons and their children.

Does a wrong decision by the Appeal Tribunal affect the existence of an issue estoppel?

  1. [54]
    The Commissioner submits that the Appeal Tribunal erred in two ways. First by relying on its own finding that the agreement between Mr Harrison and each of his children was an agreement to leave the property to them when that finding is contrary to the stated facts in paragraph [10](h) and [12] of the agreed facts; and secondly by finding that there was sufficient detriment when the Member at first instance found that there was no evidence of detriment.
  2. [55]
    In relation to the first issue, at paragraph [46] the Appeal Tribunal concluded that: “the evidence here demonstrates that the agreement was one to leave the property to the children and was not merely a promise to make a will in a particular form to do so at some other time”. The conclusion is not expressed in the same terms as paragraph [10](h) and [12] of the agreed facts. Mr Harrison makes the point that the Appeal Tribunal has expressed a conclusion arising out of the agreed facts. I accept that submission. The Appeal Tribunal has weighed the evidence, as it says, and has formed a conclusion based on the evidence. It has not purported to determine different facts from the agreed substratum of facts.
  3. [56]
    In relation to the second issue, at the oral hearing Senior Counsel for the Commissioner made the point that the finding by the Appeal Tribunal as to sufficient detriment was an error, because, as found by the Member at first instance, there was no evidence of detriment. Senior Counsel said that fact finding on the basis of no evidence is null and void. The submissions are that the Tribunal at first instance is the finder of fact not the Appeal Tribunal. The Appeal Tribunal’s finding of fact as to sufficient evidence being present to conclude detriment is an error of law because it was made on the basis of no evidence.[27]
  4. [57]
    Senior Counsel submits that the Appeal Tribunal found proof of detriment wrongly and in those circumstances stare decisis does not apply. The long line of High Court cases as to the existence of a constructive trust ought now be followed. On that basis, it is said that I can determine whether a constructive trust arising from an estoppel by representation or common intention applies as at 30 December 2015. Senior Counsel submits that I can look at the agreed facts and ask whether the facts give rise to the inference that there was sufficient detriment.
  5. [58]
    I draw from these submissions that it is being put that no issue estoppel arises where the first decision is wrong.
  6. [59]
    If an issue estoppel did not exist this Tribunal may in some circumstances decline to follow a decision of an Appeal Tribunal. However, if an issue estoppel does exist, it is an entirely different matter for this Tribunal to refuse to follow an Appeal Tribunal decision because if forms a view that the decision was wrong for some reason.
  7. [60]
    There has been debate in Australia as to whether there may be exceptions to an issue estoppel, including where there has been a subsequent change in the law as a result of decisions involving different parties.[28] However it is doubtful whether such an exception has been applied in Australia.[29] Professor Campbell in Relitigation in Government Cases: A Study of the Use of Estoppel Principles in Public Law Litigation, has expressed the view that it is doubtful whether the exception should be applied where the prior determination of the issue was wrong, on the basis of existing authority, and the error has simply been exposed in a subsequent case.  Professor Campbell concludes that in such a case it can hardly be said that there had been any change in the law.[30]
  8. [61]
    The Commissioner also submits that the majority in the Court of Appeal found that the Appeal Tribunal was wrong in its application of the law. Mr Harrison submits that neither Philippides JA nor Davis J found that the decision of the Appeal Tribunal was wrong and even if the Justices did, they did not set aside that decision.
  9. [62]
    I agree with Mr Harrison. No clear statement can be drawn from the Court of Appeal decision which concludes the Appeal Tribunal erred in making its findings. If their Honours intended to cast doubt on the correctness of the Appeal Tribunal’s decision, they did not identify any error with specificity. Their Honours may of course have simply been observing that whether or not the Appeal Tribunal was in error, no important principle arose from the facts which justified the attention of the Court of Appeal.
  10. [63]
    The Commissioner submits that Morrison JA in the Court of Appeal identifies that Mr Harrison’s arrangements may continue for some time but says that observation is not founded on any consideration of the principles of issue estoppel. It is not evident that the prospect of an issue estoppel was raised by the Commissioner before the Court of Appeal. Nevertheless, what His Honour says is entirely consistent with the effect of an issue estoppel.

Finding

  1. [64]
    I conclude that as the Appeal Tribunal decision has not been overturned on appeal, it stands as a determination of the identical issues sought to be determined by me in this review application.
  2. [65]
    There is no known exception to an issue estoppel which applies in this case, even if the Appeal Tribunal decision is wrong.

Is there an issue estoppel with respect to:

(a) a trust arising from promises to leave the property by will;

(b) a trust sub modo;

(c) the applicant acting in a fiduciary capacity within the definition of “trustee” in the LTA

  1. [66]
    It is conceded by Mr Harrison[31] and put by the Commissioner in his written submissions[32] that Mr Harrison is estopped from denying that no trusts arose by way of mutual wills, trusts sub modo or because Mr Harrison may be a fiduciary.
  2. [67]
    At the hearing the Commissioner put a different position, namely, that because it was not necessary for the Appeal Tribunal to consider whether Mr Harrison was a fiduciary and therefore a trustee of a trust; and because it was not necessary for the Appeal Tribunal to consider whether Mr Harrison was a trustee by virtue of a trust sub modo, then the strict application of issue estoppel is not likely to bind this Tribunal. That was said to be a concession to Mr Harrison.[33] In oral submissions no reference was made, on this reasoning, to there being no estoppel with respect to the issue of a trust by mutual wills.
  3. [68]
    The relevant principle is that parties are:

Precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them…has been, on such issue joined, solemnly found against them.[34]

  1. [69]
    Also succinctly put that:

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.[35]

  1. [70]
    I do not think that because all but two of Mr Harrison’s arguments failed as to the circumstances when a trust arose, that no issue estoppel arises with respect to the conclusion reached in relation to the failed claims. The decision or determination with respect to whether Mr Harrison was a fiduciary and therefore a trustee of a trust or whether he was a trustee by virtue of a trust sub modo related to questions of law and ultimate facts put in issue by the parties, and decided against Mr Harrison. Having found that trusts arose on other bases, it was not strictly necessary for the Appeal Tribunal to go on and determine whether trusts arose on the further bases submitted by Mr Harrison. Nevertheless, the questions were in issue and a determination was made. That determination creates an issue estoppel between the parties.

Finding

  1. [71]
    I find that there is an issue estoppel with respect to the determination by the Appeal Tribunal that there was no trust arising from promises to leave the property by will, a trust sub modo, or a trust as defined in the Land Tax Act 2010 (Qld) on the basis of the fiduciary relationship between Mr Harrison and his children.

The final ground of objection

  1. [72]
    As to Mr Harrison’s final ground of objection, which was put following a grant of leave, two problems arise. First, is there an issue estoppel? Second, having found that an issue estoppel arises with respect to the Appeal Tribunal’s findings as to the existence of a constructive trust, can those findings, by which Mr Harrison is a trustee, stand with a determination that he is a seller and his children are buyers within the terms of s 11 of the LTA?
  2. [73]
    It is a fine point as to whether there is an issue estoppel with respect to the final ground of objection. Mr Harrison argues that s 11 of the LTA applies with the result that he is not the owner of taxable land, but rather his children are owners, because they have entered into possession of the relevant land as buyers pursuant to an agreement for the sale of land. Mr Harrison says that I must interpret the section and determine what is meant by “sale”. 
  3. [74]
    The Commissioner submits that the question of whether Mr Harrison and his children were in a vendor and purchaser relationship has been decided by the Appeal Tribunal against Mr Harrison. The Appeal Tribunal considered whether Mr Harrison could be considered a vendor and whether his children could be considered purchasers in the context of his argument that a trust sub modo arose out of a promise to convey an interest in land. The determination of those questions was fundamental to the question of whether a trust sub modo arose.
  4. [75]
    What concerns me is whether the determination of those ultimate facts can be treated as the determination of ultimate facts in relation to a different question, that is, whether there has been an agreement for the sale of land within the meaning of s 11 of the LTA.
  5. [76]
    Halsbury’s Laws of Australia notes that unlike res judicata, the plea of issue estoppel may succeed although the causes of action in the two cases are entirely different.[36]
  6. [77]
    I conclude on analogous reasoning to that in Queensland Trustees Ltd v Commissioner of Stamp Duties (Qld)[37] that an issue estoppel arises on the issue that the children were not purchasers of the land in question. That issue was legally indispensable to the conclusion reached by the Appeal Tribunal that no trust sub modo arose out of an alleged promise to convey an interest in land. The ultimate finding of fact that the children were not purchasers was found by reference to the agreed substratum of facts. It was found that the only payment made by the children is by way of rent and it is not suggested that this is a contribution to the purchase price. Further, it was found that there is a promise to convey the properties on the death of Mr Harrison and his wife enforceable in equity, but there has been no payment of a deposit by the children and there has been no transfer or even partial transfer of the legal title. 
  7. [78]
    A question for determination with respect to the final ground is whether the children are purchasers of the land in question? The answer to that question will be an ultimate fact indispensable to determining whether on the substratum of agreed facts there is an agreement for the sale of land such that Mr Harrison is the seller and the children are the purchasers or buyers of the land in question.
  8. [79]
    In other words as it has been decided that the children were not purchasers for the purpose of determining if there is a trust sub modo, Mr Harrison is estopped from asserting that the children were purchasers for the purpose of determining if there is an agreement for the sale of land and that the purchasers are in possession of the land.
  9. [80]
    As to the second problem, I conclude that a finding the children are buyers of the properties they occupy and that they are in possession of those properties, in the sense that they are in actual occupation of the land or receipt of its rents and profits because the vendor retains no vestige of possession,[38] is inconsistent with the finding made by the Appeal Tribunal that the children are beneficiaries of a promise to convey the properties on the death of Mr Harrison and his wife, which promise is enforceable in equity.

Finding

  1. [81]
    I find that there is an issue estoppel raised against Mr Harrison in relation to the issue of whether his children are purchasers of the land in question.
  2. [82]
    I find that on the basis of the other issue estoppel raised against the Commissioner that a constructive trust arose on two bases, by representation and by common intention, it is not possible for the finding in that regard to stand with a finding that Mr Harrison is a seller within the terms of s 11 of the LTA.
  3. [83]
    For those reasons it is not necessary for this Tribunal to further consider the final ground of objection raised by Mr Harrison.

Conclusion

  1. [84]
    On the basis of my finding of an issue estoppel, arising from the Appeal Tribunal’s decision, the estoppel binds Mr Harrison and the Commissioner so that this Tribunal is unable to itself determine whether trusts arose on the bases advanced by Mr Harrison.
  2. [85]
    On the basis of my findings as to an issue estoppel the objections made by Mr Harrison to the assessments for the 2015-2016 financial year are upheld insofar as he holds each property on constructive trust either by way of estoppel by representation or common intention.

Orders

  1. [86]
    The decision of the Commissioner of State Revenue made 29 January 2016 is set aside.
  2. [87]
    The matter is remitted to the Commissioner of State Revenue for any assessment and necessary adjustment of land tax for the 2015-2016 financial year, on that basis that section 20(1) of the Land Tax Act 2010 (Qld) is applicable to the applicant Francis Lister Harrison.

Footnotes

[1]Bigg v Queensland Trustees Ltd [1990] 2 Qd R 11, 16; Haggarty v Wood [2013] QSC 327, [20].

[2]Taxation Administration Act 2001 (Qld), s 71.

[3]Commissioner of State Revenue v Harrison [2019] QCA 50, [25] where Counsel for the Commissioner conceded that there was no challenge to a finding by the Appeal Tribunal that there was one agreement as opposed to two agreements.

[4]Harrison v Commissioner of State Revenue [2016] QCAT 150.

[5]Harrison v Commissioner of State Revenue [2018] QCATA 75.

[6]Commissioner of State Revenue v Harrison [2019] QCA 50, [67], [68].

[7]Giumelli v Giumelli (1999) 196 CLR 101; Barnes v Barns (2003) 214 CLR 169; Sidhu v Van Dyke (2014) 251 CLR 505.

[8]Commissioner of State Revenue v Harrison [2019] QCA 50, [71].

[9](2003) 214 CLR 169.

[10][1985] 2 Qd R 292, 300.

[11](1999) 196 CLR 101.

[12](2014) 251 CLR 505.

[13]Harrison v Commissioner of State Revenue [2018] QCATA 75, [47].

[14]Harrison v Commissioner of State Revenue [2019] QCA 50, [30].

[15]Blair v Curran (1939) 62 CLR 464, 531-32; Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 164; Owen v Menzies [2013] 2 Qd R 327, [48]; Powell v Queensland University of Technology [2018] 2 Qd R 200, [89]-[90].

[16]Westlaw, The Laws of Australia, online [25.4.1070]

[17]Blair v Curran (1939) 62 CLR 464, 531-533 (Dixon J).

[18]Kuligowski v Metrobus (2004) 220 CLR 363, 373.

[19]Administration of Papua New Guinea v Daera Guba (1973) 130 CLR 353, 453 (Gibbs J); Morris v Riverwild Management Pty Ltd (2011) 38 VR 103, 122.

[20]Harrison v Commissioner of State Revenue [2018] QCATA 75, [3].

[21]Blair & Perpetual Trustee Co Ltd v Curran (Adams’ Will) (1939) 62 CLR 464, 532-3.

[22]APL172-16 Application for leave to appeal or appeal filed 27 May 2016; Trustees for the Roman Catholic Church for Diocese of Bathurst v Hine [2016] NSWCA 213, [23] (Meagher JA): “for the purpose of resolving any difficulty in identifying the questions or issues necessarily decided by…order, reference may be made to the terms of the judgment or order as well as to the pleadings or other material showing the issues that were raised and decided by the Court or Tribunal.”

[23]Blair v Curran (1939) 62 CLR 464, 531.

[24]          Ibid., 531-532.

[25]T1-12, L44-47; T1-13, L1-2; T1-14, L7-19.

[26]T1-7, L42-46.

[27]T1-10, L 30-35.

[28]Arnold v National Westminster Bank PLC [1991] 2 AC 93; Arnold v National Westminster Bank PLC [1989] Ch 63, 71.

[29]Melbourne City Investments Pty Ltd v Leighton Holdings Limited [2015] VSCA 235, [34].

[30]Enid Campbell, ‘Relitigation in Government Cases: A Study of the Use of Estoppel Principles in Public Law Litigation’ (1994) 20(1) Monash University Law Review 21, 59.

[31]Applicant’s Amended Statement of Facts, Issues and Contentions filed 7 April 2020, [20].

[32]Commissioner’s Further Statement of Facts, Issues and Contentions filed 30 April 2020, [52], [53], [56], [57].

[33]T1-21, L33-47.

[34]Outram v Morewood (1803) 102 ER 630, 633.

[35]Blair v Curran (1939) 62 CLR 464, 531.

[36]          LexisNexis, Halsbury’s Laws of Australia, (online at 25 March 2021) Issue Estoppel, ‘Principle’ [190-100].

[37](1956) 96 CLR 131, 151.

[38]Cam & Sons Pty Ltd v Commissioner of Land Tax (1965) 112 CLR 139, 144 – 145; Development and Finance Pty Ltd v The Commissioner of State Revenue [2016] QCAT 538, [48] – [53].

Close

Editorial Notes

  • Published Case Name:

    Harrison v Commissioner of State Revenue

  • Shortened Case Name:

    Harrison v Commissioner of State Revenue

  • MNC:

    [2021] QCAT 149

  • Court:

    QCAT

  • Judge(s):

    Member Fitzpatrick

  • Date:

    20 Apr 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353
2 citations
Jump To
Cite 1 - (1973) 130 CLR 353
Cite 2 - (1973) 130 CLR 353
Arnold v National Westminster Bank plc [1991] 2 AC 93
2 citations
Jump To
Cite 1 - [1991] 2 AC 93
Cite 2 - [1991] 2 AC 93
Arnold v National Westminster Bank plc [1989] Ch 63
2 citations
Jump To
Cite 1 - [1989] Ch 63
Cite 2 - [1989] Ch 63
Barns v Barns (2003) 214 CLR 169
3 citations
Jump To
Cite 1 - (2003) 214 CLR 169
Cite 2 - (2003) 214 CLR 169
Cite 3 - (2003) 214 CLR 169
Bigg v Queensland Trustees Ltd [1990] 2 Qd R 11
2 citations
Jump To
Cite 1 - [1990] 2 Qd R 11
Cite 2 - [1990] 2 Qd R 11
Blair v Curran (1939) 62 C.L.R., 464
6 citations
Jump To
Cite 1 - (1939) 62 C.L.R., 464
Cite 2 - (1939) 62 C.L.R., 464
Cite 3 - (1939) 62 C.L.R., 464
Cite 4 - (1939) 62 C.L.R., 464
Cite 5 - (1939) 62 C.L.R., 464
Cite 6 - (1939) 62 C.L.R., 464
Blair v Curran (1993) 62 CLR 464
1 citation
Jump To
Cite 1 - (1993) 62 CLR 464
Cam & Sons Pty Ltd v Commissioner of Land Tax (1965) 112 CLR 139
2 citations
Jump To
Cite 1 - (1965) 112 CLR 139
Cite 2 - (1965) 112 CLR 139
Commissioner of State Revenue v Harrison [2019] QCA 50
6 citations
Jump To
Cite 1 - [2019] QCA 50
Cite 2 - [2019] QCA 50
Cite 3 - [2019] QCA 50
Cite 4 - [2019] QCA 50
Cite 5 - [2019] QCA 50
Cite 6 - [2019] QCA 50
Development and Finance Pty Ltd v The Commissioner of State Revenue [2016] QCAT 538
2 citations
Jump To
Cite 1 - [2016] QCAT 538
Cite 2 - [2016] QCAT 538
Giumelli v Giumelli (1999) 196 CLR 101
3 citations
Jump To
Cite 1 - (1999) 196 CLR 101
Cite 2 - (1999) 196 CLR 101
Cite 3 - (1999) 196 CLR 101
Haggarty v Wood [2013] QSC 327
2 citations
Jump To
Cite 1 - [2013] QSC 327
Cite 2 - [2013] QSC 327
Harrison v Commissioner of State Revenue [2018] QCATA 75
4 citations
Jump To
Cite 1 - [2018] QCATA 75
Cite 2 - [2018] QCATA 75
Cite 3 - [2018] QCATA 75
Cite 4 - [2018] QCATA 75
Harrison v Commissioner of State Revenue [2016] QCAT 150
2 citations
Jump To
Cite 1 - [2016] QCAT 150
Cite 2 - [2016] QCAT 150
Kuligowski v Metrobus (2004) 220 CLR 363
2 citations
Jump To
Cite 1 - (2004) 220 CLR 363
Cite 2 - (2004) 220 CLR 363
Melbourne City Investments Pty Ltd v Leighton Holdings Limited [2015] VSCA 235
2 citations
Jump To
Cite 1 - [2015] VSCA 235
Cite 2 - [2015] VSCA 235
Morris v Riverwild Management Pty Ltd (2011) 38 VR 103
2 citations
Jump To
Cite 1 - (2011) 38 VR 103
Cite 2 - (2011) 38 VR 103
Outram v Morewood (1803) 102 ER 630
2 citations
Jump To
Cite 1 - (1803) 102 ER 630
Cite 2 - (1803) 102 ER 630
Owen v Menzies[2013] 2 Qd R 327; [2012] QCA 170
2 citations
Jump To
Cite 1 - [2013] 2 Qd R 327
Cite 2 - [2013] 2 Qd R 327
Powell v Queensland University of Technology [2018] 2 Qd R 200
2 citations
Jump To
Cite 1 - [2018] 2 Qd R 200
Cite 2 - [2018] 2 Qd R 200
Queensland Trustees Ltd v Commissioner of Stamp Duties (Qld) (1956) 96 CLR 131
2 citations
Jump To
Cite 1 - (1956) 96 CLR 131
Cite 2 - (1956) 96 CLR 131
R v Hartington Middle Quarter (1855) 4 E & B 780
1 citation
Jump To
Cite 1 - (1855) 4 E & B 780
Riches v Hogben [1985] 2 Qd R 292
2 citations
Jump To
Cite 1 - [1985] 2 Qd R 292
Cite 2 - [1985] 2 Qd R 292
Sidhu v Van Dyke (2014) 251 CLR 505
3 citations
Jump To
Cite 1 - (2014) 251 CLR 505
Cite 2 - (2014) 251 CLR 505
Cite 3 - (2014) 251 CLR 505
Trustees for the Roman Catholic Church for Diocese of Bathurst v Hine [2016] NSWCA 213
2 citations
Jump To
Cite 1 - [2016] NSWCA 213
Cite 2 - [2016] NSWCA 213

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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