|Date of judgement||26 April 2018|
|Judge(s)||JS Currie, Senior Member|
|Court or Tribunal||New South Wales Civil and Administrative Tribunal Administrative and Equal Opportunity Division|
REVENUE LAW - Duties Act 1997 (NSW), s55 (1)(b) - claim for refund of ad valorem duty on transfer of land – whether Chief Commissioner correctly applied s55(1)(b) in deciding to refuse Applicant’s claim for refund of ad valorem duty - onus of proof on Applicant - whether real purchaser “provided the money for the purchase” – proper construction of “money” and ”consideration” - necessity to establish that real purchaser provided the whole of that money - finding that he did not do so. Respondent’s decision affirmed
PRACTICE AND PROCEDURE - Taxation Administration Act 1996, s99 (1) Time for making application for review - Applicant allowed to apply for review after the period prescribed
On 22 February 2010, Mr Ali Rajib Mohamed Al Haddad (“the Applicant”), sold his residence in Villawood (“the Villawood property”). On 1 April 2010, the Applicant directed the purchaser’s solicitor to release the deposit paid on the transaction in order to enable him to assist his son in purchasing a property in Casula (“the Casula property”). The Applicant also signed an authority instructing his solicitor to forward a cheque for $20,000 to a real estate agent, stating that it was for the purchase of the Casula property by his son.
On 8 April 2010, the purchaser was granted unconditional approval of a loan from Westpac for $330,000 to be secured by the Casula property. The loan was in the son’s name. On 13 April 2010, the son contracted to purchase the Casula property for $457,000 with a deposit of $22,850. The Transfer was marked “exempt” from duty on the basis that Mr Mohammad Al-Haddad was a first home owner.
On 5 May 2010, the son also completed an application for the First Home Owners Grant in relation to the Casula property. In that application he declared that he applied in his capacity as a natural person whose interest in the property “is not held subject to a trust”. On 6 May 2010, the Applicant’s sale of the Villawood property was completed, the net proceeds of the sale being $86,636.97. On 25 May 2010, the Applicant signed an authority instructing his solicitor to forward the proceeds towards the purchase of the Casula property. On 9 June 2010, the purchase of the Casula property was completed.
On 30 April 2015, an instrument (“the Deed of Trust”) was executed between the Applicant and his son in relation to the Casula property. On 23 July 2015, the son transferred title to the Casula property to the Applicant. Ad valorem stamp duty of $24,740 was assessed and paid on the memorandum of transfer (“the Transfer”).
The Applicant subsequently sought a refund of ad valorem duty on the transfer, by operation of the concessional duty provisions in section 55 of the Duties Act 1997 (NSW). S.55(1)(b) provides that duty of $50 will apply in relation to transfers of dutiable property from an apparent purchaser to the real purchaser which meet certain conditions. Those conditions are set out in sub-paragraphs (i) and (ii) of the subsection. In pursuing the refund request the Applicant asserted that the Casula property had been purchased by his son upon trust for the Applicant. Accordingly, the Applicant claimed he was the real purchaser; he had provided the money for the purchase and any improvements, satisfying the requirements of s55(1)(b) and so was entitled to a refund of the ad valorem duty of $24,740 which he had also paid.
The Applicant submitted that he had satisfied s. 55 and that only $50 of duty was therefore chargeable. The Chief Commissioner argued that s. 55 did not apply as the Applicant had not provided all of the money for the purchase of the property as required by s. 55(1)(b)(ii).
The Tribunal identified two conditions that are required to be met in order for s55(1)(b) of the Duties Act to apply:
The Tribunal noted that in order to satisfy the second limb, regard must be had to the additional interpretation provision contained in subsection (1A) of section 55 which states:
“For the purposes of subsection (1), money provided by a person other than the real purchaser is taken to have been provided by the real purchaser if the Chief Commissioner is satisfied that the money was provided as a loan and has been or will be repaid by the real purchaser.” (Emphasis added)
Thus, in order to satisfy the second limb of s. 55, the whole of the money must have been paid by the real purchaser. The Tribunal referred to a definition provided by Priestley JA in Triantafilis v Commissioner of Stamp Duties for New South Wales  NSWSC 112, which provided that the whole of the purchase money has to be actually paid by the real purchaser, although title has been taken to the property by an apparent purchaser.
The Applicant’s request for a review of the Chief Commissioner’s decision to refuse a refund was lodged late but the Chief Commissioner did not object to an extension of time under s. 99 of the Taxation Administration Act 1996.
The Tribunal found that through the son’s application for a First Home Owners Grant in relation to his purchase of the Casula property, he had declared, in his personal capacity as a natural person that his interest in the property “is not held subject to a trust”. In addition, the First Home Owners Grant monies of $7,000 were provided by the son towards the purchase price of the Casula property. The Tribunal noted that even if the Applicant had repaid the amount within 18-24 months of the settlement, the First Home Owner’s Grant patently constitutes money provided for the purchase of the Casula property by someone other than the real purchaser. Accordingly, the Tribunal held that the Applicant had failed to discharge his onus of establishing his entitlement to a refund of the duty.