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

Background

The appellant appealed against a decision of Senior Member Isenberg in the Tribunal that the Chief Commissioner was correct to assess duty on two separate transfers of interests in land located at Liverpool and Campbelltown calculated on the auction sale price of the whole 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 that:
   1. the Segal Sharma Partnership be dissolved and wound up;
   2. the Liverpool and Campbelltown properties were assets of the Partnership; and
   3. the receivers had power and a duty to dispose of those assets and pay the net proceeds into Court.
2. in December 2018:
   1. the Campbelltown contract of sale was entered into on behalf of Dr Sharma and Dr Segal by the 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 the Receivers and Managers of the Liverpool property (as vendors) and Mr Szkirpan (as purchaser).

Submissions

The appellant submitted that, prior to the transactions, he owned a 50% interest in each property, and 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 appellant in respect of the Campbelltown property and Mr Szkirpan in respect of the Liverpool property).
• in respect of the properties, the appellant was a tenant in common in equal shares with Dr Sharma, and what the stated purchaser was to receive was the estate in fee simple, which was a different property interest (relying on Nullagine Investments Pty Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635 at 657 – 658).

The Chief Commissioner sought that, irrespective of the outcome of the appeal, the Appellant pay one-half of the costs incurred by it in obtaining the transcript of the proceedings at first instance in accordance with a direction of the Tribunal of 27 July 2021.

Decision

The Appeal Panel found that the Tribunal at first instance was correct to recognise that the declaration by the Supreme Court that the Campbelltown and Liverpool properties were partnership assets meant the appellant was no longer beneficially entitled to 50% of either property (at [72]). In this regard the Appeal Panel accepted the Chief Commissioner’s submission that the nature of the appellant’s interest in the properties changed by virtue of the Court orders, particularly having regard to the High Court’s decision in Commissioner of State Revenue v Rojoda Pty Limited (2020) 268 CLR 281.

The Appeal Panel also referred approvingly to the High Court’s decision in Nullagine, that where a sale is decreed, a conveyance by tenants in common or joint tenants pursuant to a court order does not involve the sale or disposition of the individual share or interest of the individual tenant, but rather is an order “for the sale of the fee simple in the whole of the land” (at [73]).

The Appeal Panel also relied on the view expressed in Nullagine that the making of such an order for sale “extinguishes the equitable interests of the co-tenants in the land itself even before a sale is effected” (also at [73]).

In light of these findings, the Appeal Panel determined that no appeal ground had been made out by the appellant, and so dismissed the appeal.

Orders

1. The Appeal is dismissed.
2. The Appellant is to pay the Respondent the sum of $552.50 within 28 days.

Link to decision

https://www.caselaw.nsw.gov.au/decision/17cfd8233b33d5a3ea88d1ce