Noble v Chief Commissioner of State Revenue [2021] NSWCATAD 159

Background

On 17 January 2019 the Applicants signed a purchase contract and declaration.

On 27 January 2019, the Applicants and their son each signed an untitled document which stated:

“Allan David Noble and Kim Narelle Noble, confirm Joel Noble is responsible for and is paying the full mortgage repayment and deposit for [the Property]”

On 31 January 2019, a Declaration of Trust was executed which contained an acknowledgement that the Applicants had purchased the Property in their names for their son.

On 4 March 2019, settlement of the sale and purchase of the Property occurred.  At settlement, the sum paid by the applicants was $562,970.57, using a NAB Home Loan Account and Line of Credit Account.

Since 15 March 2019, the Applicants’ son has made weekly payments to the Applicants, into their NAB Account, from which the Applicants have made weekly payments to the Home Loan Account which exceeded the amounts of the instalments due from that account to the NAB Home Loan Account ($665).

On 23 August 2019, the Chief Commissioner assessed the Declaration of Trust to ad valorem duty, and it was that assessment which was the subject of this review proceeding.

The Statutory Framework

Section 55 of the Duties Act provides:

1. Duty of $50.00 is chargeable in respect of:
   1. a declaration of trust made by an apparent purchaser in respect of identified dutiable property
      1. vested in the apparent purchaser upon trust for the real purchaser who provided the money for the purchase of the dutiable property, or
      2. to be vested in the apparent purchaser upon trust for the real purchaser, if the Chief Commissioner is satisfied that the money for the purchase of the dutiable property has been or will be provided by the real purchaser, or

…

(1A)  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.

Submissions

The Applicant submitted that the s 55 concession was applicable to the Declaration of Trust, on the basis that money was provided by NAB to the Applicants for the purchase of the Property, and that the agreement to repay the loan and post-contractual conduct of their son made him the real purchaser who has been repaying the loan.

The Chief Commissioner submitted that s 55(1A) requires that the loan must have been made to the real purchaser, because:

1. the purpose of s 55 is to provide a concession from ad valorem duty if the real purchaser paid for the property;
2. s 55(1A) must be interpreted with that purpose in mind;
3. this purpose requires that the real purchaser be the borrower on the loan and thus liable to repay it; and
4. this is confirmed by the use of the word “repaid” in s 55(1A), rather than “paid”, because a borrower “repays” their loan but a third party who makes payments against a borrower’s loan merely “pays” rather than “repays”.

Decision

The Tribunal found the money for the purchase of the Property was $562,970.57, which was provided by the Applicants using moneys borrowed by them from NAB.

The Tribunal held that s 55 contemplates that a real purchaser may provide the money for the purchase of the Property either in fact or by way of the deeming provision in s 55(1A).

Senior Member Goodman cited Triantafilis v Commissioner of Stamp Duties for New South Wales (1998) 98 ATC 4484 and Al Haddad v Chief Commissioner of State Revenue [2018] NSWCATAD 91 in holding this was an absolute requirement with no basis for apportionment or discretion (Gleeson v Commissioner of State Revenue [2009] VSC 464).

The Tribunal rejected the Chief Commissioner’s submission that s 55(1A) requires that the loan must have been made to the real purchaser for the following reasons:

1. In construing s 55(1A), the start and end point is its text considered in its context (including the Duties Act as a whole, its legislative history and any extrinsic materials) and purpose;
2. The text of s 55(1A) (or the remainder of the Duties Act) does not support the Chief Commissioner’s construction. The limitation suggested by the Chief Commissioner does not appear in the text.
3. The use of the word “repaid” rather than “paid” is not of such significance as to require a different conclusion.
4. Citing Re Landfall Pty Ltd and Chief Commissioner of State Revenue [2012] NSWADT 270; (2012) 91 ATR 613 at [17], Senior Member Goodman held the purpose of s 55 is to remove the obligation to pay a second amount of ad valorem duty upon a declaration of trust in favour of a real purchaser, or a transfer of property to the real purchaser, where the real purchaser provided the money for the purchase of the Property. He held that the statutory purpose is achieved if the real purchaser bears all of the costs of the purchase regardless of whether the real purchaser is the borrower, and it is not necessary to read additional words into s.55(1A) as suggested by the Chief Commissioner.

Citing Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, the Tribunal held that the Declaration of Trust and the post contractual conduct of the parties were sufficient to satisfy the requirement that the loans would be repaid by the Applicants’ son.

The Tribunal held that:

1. the money for the purchase of the Property was $562,970.57;
2. all of that money was (deemed to be) provided by the Applicants’ son because:
   1. all of it was provided by the Applicants, by way of loans from NAB;
   2. the Applicants’ son had agreed to repay those loans; and
3. therefore s 55 is satisfied.

Orders

1. The Duties Notice of Assessment No. 9632419-001, dated 23 August 2019 was set aside.

https://www.caselaw.nsw.gov.au/decision/179d4bc3d1975c03ee43b19d