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Ward & Anor v Commissioner of State Revenue

 
Unreported Citation: [2020] QSC 59
EDITOR'S NOTE

This matter concerned an appeal under s 69 of the Taxation Administration Act 2001 from the Commissioner of Stamp Revenue’s decision to disallow the appellants’ objections to the assessment of transfer duty payable on a dutiable transaction under the Duties Act 2001. Justice Jackson held that the Commissioner had been correct to find that s 93 of the Duties Act applied to the transaction, but the Commissioner had erred in its determination that s 93(3) applied s 93 to the transaction. His Honour found that the only basis for the application of s 93 was if s 93(1) applied it. It followed that the amount of transfer duty assessed as payable was in error, and was to be reduced. The resolution of the relevant questions of construction involved statutory provisions which, in his Honour’s view, were not “well-drafted or well synchronised” and which had “meaning and inter-operations” which were “far from clear”.

Jackson J

1 May 2020

In 2019, the appellants acquired a half interest in fee simple in a particular lot of land (“the Lot”), upon registration of a transfer, for a consideration of $500,000. [2]. The whole interest in fee simple of the land was valued at $1,000,000. The appellants already owned the other half interest, and occupied the Lot as their home both before and after the transfer. [3]. The Commissioner assessed transfer duty as payable under s 93 of the Duties Act 2001 (“the Act”). [11]. A dispute arose between the appellants and the respondent Commissioner as to the amount of transfer duty payable. [1]. The amount in dispute was $4,375. [1].

Justice Jackson explained ([4]–[8]) that, under the regime in Ch 2 of the Act, the transfer of the half interest was a “dutiable transaction” under the Act and so transfer duty was payable. [5]–[6]. The amount payable was based on the “dutiable value”, in this case the consideration for the transfer. Schedule 3 provided the starting point for assessing the amount payable, based on the “dutiable value”. Concessions in Pt 9 of Ch 2 then altered the amount of duty where the dutiable transaction involved a “home”. Under s 86 of the Act, a residence was a “home” if the person’s occupation date – the date the residence was occupied by the owner as their principal place of residence – “is within 1 year after” the transfer date. [10]. Whether certain of these concessions, in ss 91 and 93 of the Act, applied formed the foundation of the dispute in this matter. [8].

The Commissioner had applied s 93 of the Act to the transaction, while the appellants argued that s 91(1) ought to have been applied. Justice Jackson noted that s 93 could only apply if it was applied to the dutiable transaction by s 93(1) or s 93(3). [11]. Section 93(3) was a means of applying s 93 in addition to where it was applied by s 93(1). [14]. Construing the provisions according to their ordinary meaning ([12]–[25]), Jackson J considered that s 93(1) of the Act applied s 93 to a transfer of a part interest in land provided that the particular requirements contained in ss 93(1)(a)–93(1)(d) were met ([19]), whereas s 93(3) of the Act applied s 93 to a transfer of a part interest in land where the transfer of a part interest was to a single, rather than multiple, transferees. [25].

Section 93(1) could apply to the transfer in this case, provided that it extended to transfer of a half interest. Contrary to the Commissioner’s submission, Justice Jackson held that it could – the contrary conclusion would “raise some incongruities”. [26]–[33]. His Honour held that:

“ … although the contrary view is reasonably arguable, the better construction of s 93(1) and s 93(3) is that s 93(3) applies only to a transfer to a single transferee and s 93(1) applies to a transfer of a part interest to more than one transferee.” [32].

As the dutiable transaction in this case involved a transfer to two transferees, s 93(3) was not relevant and so the “only basis” for applying s 93 to the transaction was s 93(1) of the Act. [33].

Whether s 93(1) actually applied s 93 to the transaction depended upon satisfaction of s 93(1)(c)(i), which required “the residence [to be] the home of all the transferees”. [34]. Pursuant to s 86, which Jackson J held applied to s 93, this required the occupation date to be “within 1 year after” the transfer date (as noted above). There was a complication in that the appellants had occupied the Lot as their principal place of residence years before the dutiable transaction, in circumstances where they were already joint proprietors of the other half interest. [35]–[38]. Justice Jackson held, however, that the phrase “within 1 year after” should be construed to mean “before or within 1 year after”. Thus, the Lot was the “home” of the appellants at the relevant time and s 93(1) had effect. [44].

On appeal, the appellants had argued that s 91(1) of the Act applied, not s 93. This argument was rejected by Jackson J as s 91(1) of the Act, properly construed, applied where the occupation date was in the future at the date when liability for the dutiable transaction arose and was assessed. Section 93(1) applied where the occupation date was before the date on which duty was assessed. [45].

Although s 93 of the Act applied to the dutiable transaction, not s 91(1) as contended by the appellants, the Commissioner had found that s 93(3) applied s 93 to the transaction, rather than it being applied by s 93(1). This meant that duty had erroneously been calculated pursuant to s 93(7). [52]. The relevant provision for assessment of duty where s 93(1) applied s 93 to the transaction was s 93(6) of the Act. [50]. When the amount of duty was assessed pursuant to the correct provision, it followed that the appeal had to be allowed and the amount of duty reduced by $4,375. [51]–[54].

In the result, the appeal was allowed with no order as to costs. [54].

S Walpole