Segal v Chief Commissioner of State Revenue [2021] NSWCATAD 163

Background

In these two proceedings, the applicant sought review of two duties notices of assessment issued by the Chief Commissioner in respect of two separate transfers of interests in land located at Liverpool and Campbelltown.  Both transfers were made pursuant to separate sales of the two properties at public auctions.

The key issue in dispute in each proceeding was the dutiable value of each transfer. The Chief Commissioner had assessed duty, and submitted in each proceeding, that the relevant contracts for sale of land were liable for duty calculated on the auction sale price of the whole of each property. The applicant submitted that, because of trust arrangements and his prior interest in each property, the correct duty should have been calculated on 50% of the sale price of each property.

The key facts in this matter were:

1. on 26 June 2018, Ward CJ in Eq made orders in respect of a partnership (known as the Segal Sharma Partnership), including:
   1. that the Segal Sharma Partnership be dissolved and wound up;
   2. the Liverpool and Campbelltown properties were declared by the Court to be assets of the Segal Sharma Partnership; and
   3. the receivers had power and a duty to dispose of those assets and pay the net proceeds into Court; and
2. in December 2018:
   1. the Campbelltown contract of sale was entered into on behalf of Dr Sharma and Dr Segal by Jennifer Nettleton and Cassandra Mathews as Receivers and Managers of the Campbelltown property (as vendors) and Dr Segal (as purchaser); and
   2. the Liverpool contract of sale was entered into on behalf of Dr Sharma and Dr Segal by Jennifer Nettleton and Cassandra Mathews as Receivers and Managers of the Liverpool property (as vendors) and Mr Szkirpan (as purchaser).

Submissions

The applicant submitted that, prior to the transactions, he owned a 50% interest in each property, such that by the transfers he only acquired a further 50% interest in each property.

The Chief Commissioner submitted that whatever the nature of the applicant's interest in the properties prior to the contracts of sale, it was different to that which was transferred, or to be transferred, to the stated purchaser (which was the applicant in respect of the Campbelltown property and Mr Szkirpan in respect of the Liverpool property).  In respect of the properties, the applicant was a tenant in common in equal shares with Dr Sharma, and the stated purchaser was to receive the estate in fee simple, which was a different property interest (relying on Nullagine Investments Ply Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635 at 657 – 658).

Decision

The Tribunal accepted the Chief Commissioner’s submission that the interest of the applicant in the properties (as a tenant in common) prior to the transactions was a different property interest to the estate in fee simple which was received by the stated purchasers under the relevant contracts for sale.

Accordingly, having found (at [58]) that the interest in each of the properties being transferred was an estate in fee simple in the whole of each property, the Tribunal determined that the full value of that fee simple was the sale price of each property, rather than a 50% interest in each property as submitted by the applicant. Further, the Tribunal found that the applicant did not hold a beneficial interest in either property at any relevant time after Ward CJ in Eq made the orders in respect of the dissolution of the partnership, and prior to the auctions.

Orders

The decisions under review are affirmed.

https://www.caselaw.nsw.gov.au/decision/179e9937e94beb275da1d1bc