AUST-WIDE MANAGEMENT LTD (RECEIVER APPOINTED) v CHIEF COMMISSIONER OF STAMP DUTIES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY and BEAZLEY JJA and ROLFE AJA 10 July 1996, 16 August 1996 [1996] NSWCA 29 STAMP DUTIES — Unit trust deed — redemption of units — whether transaction causing or resulting in change in beneficial ownership of estate or interest in lease of land in NSW — Stamp Duties Act 1920, s44. Aust-Wide Grosvenor Place Trust was a unit trust, of which the appellant was the Manager, and Permanent Trustee Australia Limited was the Trustee. C119 of the trust deed conferred upon unitholders a right to request the appellant Manager to re-purchase all or any of the units held by the unitholder. C120 provided for the Redemption of Units, requiring the Manager to inform the Trustee in writing of the requested redemption which then obliged the Trustee to make the payment to the Manager. On 30 June 1988, the appellant, the Trustee and the Superannuation Fund Investment Trust (SFIT) entered into a deed entitled the "Subscription Deed". The deed provided that SFIT would subscribe for a number of Aust-Wide units, and that those units would be redeemed at specified dates. Cl6 of the Subscription Deed provided for the redemption of units by SFIT. It required the appellant to provide the Trustee with a statement, pursuant to Cl120(1) of the Aust-Wide deed, certifying that units are to be redeemed. It also provided that the Trustee's obligation to redeem the SFIT units was subject to SFIT delivering the certificates to the appellant. The court examined one set of transactions, as representative of what happened on each redemption of units. On 31 October 1988, SFIT notified the appellant that it required redemption of two units. The appellant informed the Trustee, by a statement in writing, in compliance with both cl20(1) of the Aust-Wide deed and cl6 of the Subscription Deed. S44(1) Stamp Duties Act 1920 provides that stamp duty is payable on a transaction which "causes or results in a change in the beneficial ownership of an estate or interest in" land or a lease of land situated in New South Wales. S44(2)(d) provides that the redemption of units in a unit trust scheme is not a change in beneficial ownership to which s44(1) applies. The redemption by the Trustee of the 2 units clearly fell within the exemption in s44(2)(d). However, the respondent Commissioner considered that there was an intermediate transaction between SFIT and the appellant where by the appellant re-purchased the units, which caused or resulted in a change in the beneficial ownership of an interest in land in NSW. Division 3A applied, and stamp duty was payable. The trial judge held that there was such an intermediate transaction. The appellant appealed against this finding. HELD: (1) There was no evidence upon which to find that there was any transaction which caused or resulted in the beneficial ownership of the units being transferred from SFIT to the appellant. The redemption was effected by the Trustee in accordance with the terms of both Deeds, hence the beneficial interest passed from SFIT to the Trustee. ORDERS (1) Appeal allowed. (2) In proceedings No. 30070 of 1991, in lieu of the order made, that the appellant's objection dated 21 June 1991 against the respondent's assessment of stamp duty dated 21 May 1991 be allowed. (3) The respondent pay the appellant's costs of the proceedings at first instance and of the appeal. 2 UNREPORTED JUDGMENTS Handley JA In this appeal I have had the benefit of reading in draft form the reasons for judgment of Rolfe AJA. I agree with his Honour's reasons and conclusions, but prefer to state my own brief reasons for differing from the trial judge. The issue in this case turned on s44 and s44A in Div3A of Pt3 of the Stamp Duties Act. S44(1) and (2) provide: "(1) This Division applies to a transaction which, on or after 21 November 1986, causes or results in a change in the beneficial ownership of an estate or interest in: (a) land situated in New South Wales; (d) A lease of land situated in New South Wales; (2) A reference to a change in beneficial ownership in this section does not include a reference to a change in beneficial ownership occurring as the consequence of: (d) The issue or redemption of units in a unit trust scheme;" S44A(1) requires a party to a transaction to which Div3A applies, which is not effected or evidenced by an instrument chargeable with duty, to lodge with the Chief Commissioner a statement in respect of that transaction which is then liable to the duty that would have been payable on an instrument effecting or evidencing that transaction. As Rolfe AJA demonstrates, on 31 October 1988, 2 units in the Aust-Wide Grosvenor Place Trust (the Unit Trust) were redeemed by the trustee, Permanent Trustee Australia Ltd. This involved payment of the redemption price by the trustee to the appellant, the Manager of the Trust. At the same stage that day, but it is not clear when, or by whom, the unit certificates were delivered to the trustee and then cancelled. Duty was not claimed on this transaction which clearly falls within the exemption in s44(2)(d). The Commissioner claimed instead that earlier on 31 October 1988 there had been a transaction between Superannuation Fund Investment Trust (SFIT), a body corporate constituted under the Superannuation Act 1922 (Cth), and the appellant which caused or resulted in a change in the beneficial ownership of an interest in land in New South Wales and that Div3A applied. There was no dispute that units in the Unit Trust conferred on the holder an equitable interest in land in the State. The sole question was whether there had been a transaction between SFIT and the appellant that day which caused or resulted in a change in the beneficial ownership of such an interest. There was no evidence of any oral contract for the sale of these units to the appellant. However the appellant gave a notice that day to SFIT and the trustee which, omitting formal parts, read: "AUST-WIDE MANAGEMENT LIMITED (the Manager") hereby gives notice to each of SFIT and the trustee that it exercises its rights under the cl6.3 of the Deed dated 30 June 1988 between the Manager, the Trustee and SFIT and directs the Trustee to redeem two SFIT units on 31 October 1988 in accordance with the terms of Pt6 of that Deed". The same day, presumably later, SFIT received a bank cheque from the appellant for $2 million. At the same stage that day, SFIT surrendered its unit certificates but the evidence does not disclose when this occurred, or whether they were delivered to the appellant or to the trustee. There is no other evidence of any transaction between the appellant and SFIT. URIST-WIDE MANAGEMENT LTD (RECEIVER APPOINTED) v CHIEF COMMISSIONER OF STAMP DUTIES (Rolfe AJA) In my opinion the only transaction involving SFIT and the appellant evidenced by the notice and the cheque was a redemption. It is simply not possible on the evidence to find that there was any transaction which caused or resulted in the beneficial ownership of the units being transferred from SFIT to the appellant. The units constituted an equitable chose in action and the transaction the Commissioner claimed fell within Div3A can only have been an equitable assignment. A voluntary assignment is excluded by the context and by SFIT's receipt of the bank cheque. Any equitable assignment to the appellant therefore required a contract for valuable consideration with SFIT. See Meagher, Gummow and Lehane, "Equity Doctrines and Remedies", 3rd ed 1992, at 163. However, there is no evidence of any contract between these parties for the transfer or assignment of these units, and the notice received by SFIT initiated a redemption. There was therefore no transaction which fell within s44(1) and the appeal must be allowed. I agree with the orders proposed by Rolfe AJA. Beazley JA I have had the advantage of reading the reasons for judgment of Handley JA and Rolfe JA. I agree with their reasons and with the orders proposed by Rolfe AJA. Rolfe AJA INTRODUCTION: On 20 June 1988 Aust-Wide Management Ltd, ("the Manager"), entered into a Deed of Trust with Permanent Trustee Australia Limited, ("the Trustee"), and Permanent Trustee Co Ltd, ("the Guarantor'), to establish a unit trust entitled Aust-Wide Grosvenor Place Trust. The Trust was a conventional unit trust and cll19 thereof gave a right, pursuant to cl19(2) and subject to cl19(4), for any unitholder to request the Manager to re-purchase all or any of the units held by the unitholder. Subcl(4) suspended the operation of subcl(1) and cl(2) in certain circumstances, which operated at all relevant times such that the right of unitholders to request the Manager to re-purchase did not arise. C120(1), which is headed "Redemption of Units", provided:- "Tf at any time the Manager furnishes the Trustee with a statement in writing:- (i) certifying that in order that the Manager shall be able to carry out its obligations under cl19 or it is otherwise in accordance with the terms of the issue of any Units, that Units be redeemed; (ii) stating the number of Units to be redeemed and the Repurchase Price paid or payable in respect of such Units; and (iii) requesting that an amount of cash equivalent to the sum of the Unit Values of the relevant Units on the date of such statement be so released, together with a report of the Auditor to the effect that the release of the cash will be in accordance with the provisions of this clause. THEN the Trustee shall forthwith pay from the Fund such cash to the Manager, whereupon the number of Units to which the request relates shall be redeemed as from the date on which such statement is furnished to the Trustee and shall not thereafter be re-issued but such redemption shall not limit or restrict the right of the Manager to create additional and to issue further or other Units." Subcl(2) provided for cancellation of the units upon redemption. C121 stated that the Manager was entitled to re-sell the units re-purchased by it, which were not redeemed, and cl22 provided:- "(1) The Issue Price of Units re-sold pursuant to cl21 shall be the Unit Value of a Unit, as at the date of sale by the Manager. 4 UNREPORTED JUDGMENTS (2) There shall be deducted from Issue price referred to in subcl(1) of finis clause in respect of every Unit sold a service charge payable to the Manager of point eight five per centum (0.85%) of the Issue Price." In cl19(1) it is provided that the "Re-purchase Price will be the Unit Value of a Unit". "Unit Value" is defined in the Trust Deed in relation to fully paid and partly paid units. On 30 June 1988 the Manager, the Trustee and Superannuation Fund Investment Trust, which was a body corporate constituted under the Superannuation Act, 1922-1976 (Commonwealth), ("SFIT'"), entered into a Deed entitled the Subscription Deed, which recited that the Manager and the Trustee held those positions pursuant to the Deed of 20 June 1988; that concurrently with the execution of the Deed of 30 June 1988 the Trustee and SFIT: "will enter into an agreement for sale of leasehold interest under which SFIT will sell and the Trustee purchase 37.5% of SFIT's interest in the leasehold of the property known as Grosvenor Place, Sydney"; and that the Manager had requested SFIT to subscribe for not more than forty nine units, which SFIT had agreed to do:- "on the terms and conditions hereafter contained and upon the further condition that the Trustee and Aust-Wide undertake the obligations on their respective parts contained in this Deed." The Subscription Deed defined "Redemption Date" as 31 May 1989 and "the last day of each month commencing Dom and including 30 September 1988", "Selling Price" as $1m, and "SFIT Units" as:- "The Fully Paid Ordinary Units subscribed for by SFIT pursuant under cl2.2." Cl2 provided for subscription for units by SFIT up to a maximum number of forty nine, cl2.2 stating:- "SFIT covenants with Aust-Wide and the Trustee that on the Completion Date it will subscribe for the number of Fully Paid Ordinary Units specified in the notice given by Aust-Wide under cl2.1 (if any) and deliver to Aust-Wide a properly completed application for Units in the form contained in Schedule 1 together with a bank cheque made payable to the Trustee for an amount equal to the Issue Price for each Unit that is subscribed for." Pt6 is headed "Redemption" and provided:- "6.1 The parties agree that the SFIT Units shall be issued, on the terms contained in this Pt6. 6.2 Subject to compliance with its duties as trustee of the Trust, the Trustee shall on 31st May 1989 redeem all SFIT Units held by SFIT on that date, and Aust-Wide shall do all things required on its part to achieve this redemption. 6.3 The Manager may by giving a notice in the form contained in Schedule 4 to each of the Trustee and SFIT two (2) Business Days before each Redemption Date direct the Trustee to redeem the number of SFIT Units specified in the notice and the Trustee shall on the Redemption Date specified in the notice redeem such SFIT Units. 6.4 The obligations of the Trustee to redeem the SFIT Units under cl6.2 and cl6.3 is subject to:- (a) the Trustee receiving a statement pursuant to cl20(1) of the Trust Deed; (b) SFIT delivering to the Manager a Certificate or Certificates for the number of SFIT Units to be redeemed. UWRIST-WIDE MANAGEMENT LTD (RECEIVER APPOINTED) v CHIEF COMMISSIONER OF STAMP DUTIES (Rolfe AJA) All parties acknowledge that the SFIT Units are issued on the basis that they will be redeemed in accordance with this Pt6 and Aust-Wide undertakes to give to the Trustee a statement pursuant to and in accordance with cl20(1) of the Trust Deed. 6.5 Subject to cl6.4 the Trustee shall redeem the SFIT Units on the Redemption Date and notwithstanding cl19(1) of the Trust Deed pay to SFIT an amount equal to the Selling Price for each SFIT unit redeemed." The Schedule 4 notice was in the following terms:- "TO: Superannuation Fund Investment Trust ('SFIT") and Permanent Trustee Australia Ltd (the Trustee") AUST-WIDE MANAGEMENT LIMITED ("the Manager") hereby gives notice to each of SFIT and the Trustee that it exercises its rights under cl6.3 of the Deed dated 1988 between the Manager, the Trustee and SFIT and directs the Trustee to redeem *** SFIT Units on *** in accordance with the terms of Pt6 of that Deed. Dated 1988 for and on behalf of Aust-Wide Management Ltd." Pt8 is headed "Purchase by Aust-Wide" and stated:- "8.1 If all of the SFIT Units are not redeemed in full on or before 31 May, 1989 for no less than the Selling Price per Unit, then Aust-Wide shall purchase from SFIT all of the SFIT Units held by SFIT for a purchase price equal to the Selling Price per Unit, such sale to be completed before 30 June, 1989, in which respect time shall be of the essence, and the only obligation of SFIT on settlement being to provide a transfer of the Units duly executed by SFIT, being in the form of the Australian Associated Stock Exchange common form of transfer, together with the certificates for the Units." On 31 August 1988 SFIT subscribed for thirty seven units, which were allotted. It sold one directly to another investor, which paid stamp duty. THE ISSUE The Manager asserted that the remainder of the SFIT Units were redeemed by the Trustee pursuant to cl6 of the Subscription Deed. It was not in issue that if this occurred stamp duty was not payable pursuant to s44 of the Stamp Duties Act 1920 (as amended), ("the Act"), because, put shortly, stamp duty is, relevantly for present purposes, only payable if the transaction causes or results in a change in the beneficial ownership of an estate or interest in a lease of land situated in New South Wales. Subs provides that a change in beneficial ownership does not include such a change occurring as a consequence of the redemption of units in a unit trust scheme. It was not in issue that this was a unit trust scheme as defined in s3. The Chief Commissioner of Stamp Duties, ("the Chief Commissioner") contended that the beneficial change, which brought about the liability to pay stamp duty under Division 3A of the Act, arose from the sale of the units by SFIT to the Manager and that in so far as there was a redemption of them that occurred as between the Manager and the Trustee. Accordingly, he contended that the sale and purchase between SFIT and the Manager was interposed prior to the redemption. If that were so it was not suggested that stamp duty was not payable. THE IMPOSITION OF STAMP DUTY 6 UNREPORTED JUDGMENTS The Manager was notified, by letter dated 21 May 1991, that pursuant to s127B of the Act stamp duty had been assessed in the sum of $233,502.81 based on the market value of SFIT Units "re-purchased", and a fine in the same amount had been imposed. An assessment was also raised against the Trustee. Objections were made to the assessments and were rejected. However the fine was reduced by approximately seventy five per cent. THE PRESENT PROCEEDING By Summonses filed on 22 October 1991 the Manager, in proceedings 30070 of 1991, and Trustee, in proceedings 30071 of 1991, appealed pursuant to s124 of the Act and sought orders that their objections be allowed and for consequential relief. The matters were heard by Allen J on 22 October 1992 and, on 20 November 1992, his Honour delivered judgment in which he dismissed the Manager's appeal, subject to variations to the amount of duty and the fine, which were agreed, and upheld the Trustee's appeal. The Manager has appealed against that decision, which was based on an acceptance of the Chief Commissioner's submission that there was an intermediate transaction between the Manager and SFIT whereby the Manager purchased the units, which were then redeemed as between the Manager and the Trustee. The issue on the appeal is whether that conclusion was correct. The Chief Commissioner did not appeal against the allowance of the Trustee's appeal. THE TRANSACTION It is necessary to trace through one of the transactions. Although the units were redeemed at various times it was agreed this transaction is representative of what happened on each occasion. On 31 October 1988 the Manager gave notice in the form of Schedule 4 to the Subscription Deed, save that it required redemption on that date and, accordingly, did not give the two Business Days required by cl6.3. It was not suggested that anything turned on that. On 31 October 1988 the Manager wrote to the Trustee in the following terms, omitting formal parts:- "We refer to our discussion to-day regarding the redemption of two units presently owned by SFIT and to be re-purchased by ourselves. We certify that; (1) in order that the Manager shall be able to carry out its obligations in accordance with the terms of issue of these units, that these units be redeemed; (2) the two units to be redeemed are to be re- purchased from SFIT at a price of $1 million each pursuant to the agreement with SFIT entered into on 30 June 1988; (3)the unit value of these units is $1,010,606 and accordingly request that $2,021,212 be so released from the Fund. A report from the Auditor in relation to the above redemption will be forwarded forthwith." This letter was written in compliance with the obligation contained in cl6.4(a), which created the obligation and incorporated the requirements of cl20(1). In doing so it picked up the Unit Value specified in subcl(iii). On the same day another letter was written by the Manager to the Trustee, which, omitting formal parts, read:- "AUSTRALIA WIDE LANDMARK PROPERTY TRUST We refer to our discussions to-day regarding the purchase of units in the Aust-Wide Grosvenor Place Trust. The investment policy for this Trust is to acquire units in 'unitised properties' and such units are of course authorised investments under the Trust Deed. UWRIST-WIDE MANAGEMENT LTD (RECEIVER APPOINTED) v CHIEF COMMISSIONER OF STAMP DUTIES (Rolfe AJA) We propose to purchase two units in the Aust-Wide Grosvenor Place Trust at $1,010,606 each, which is the present unit value in the Trust, by way of direct subscription. We recommend this investment proposal." On 31 October 1988 three cheque$ were drawn. One was a bank cheque drawn by the Manager in the sum of $2m to pay SFIT the Selling Price. A second was drawn by the Trustee on its Grosvenor Place Trust Account in the sum of $2,021,212 in favour of the Manager, and a third was drawn by the Trustee on the Landmark Property Trust Account in its own favour as trustee for Aust-Wide Grosvenor Place Trust in the same amount. The evidence does not make it clear in what order the cheques were drawn. However the third cheque to which I have referred was clearly the cheque drawn to take up the investment on behalf of the Australia Wide Landmark Property Trust, which was referred to in the second mentioned letter of 31 October 1988. In the result $2m was paid to SFIT for the two units it redeemed and the balance of $21,212 appears to have been retained by the Manager. The basis on which this was done and the entitlement of the Manager to retain it may be in issue as between the Manager and the Trustee, but it does not, in my opinion, impinge upon the nature of the transaction undertaken in the present case There was no doubt, on the evidence, that the units redeemed by SFIT were treated as having been redeemed and were cancelled Indeed, as I have said, the issue was not whether they were redeemed but how that occurred. A CONSIDERATION OF THE REASONING AT FIRST INSTANCE The learned trial Judge considered that the construction of Clause 20 was governed, relevantly, by cl19, so that if there was a redemption pursuant to cl20 it involved firstly a re-purchase by the Manager of the unit from the unitholder in accordance with cl19, and then a redemption by the Trustee of that unit from the Manager. His Honour was of the view that the Manager was obliged to re-purchase from its own moneys and not from assets and income of the Trust: AB633. He continued in relation to the provisions of cl20:- "Of key significance is the fact that upon the Trustee incurring the obligation to redeem it 'shall forthwith pay from the Fund' the Unit Value of the unit being redeemed 'to the Manager' (cl20(1)). The provision is specific. The payment is to be to the Manager. There is DO provision for payment to the holder of the unit being redeemed. It is not a matter of the Unit Value being paid to the Manager in its capacity as agent for the Trustee to transmit that amount to the former holder of the unit. The instant that payment is made out of the Fund by the Trustee it ceases to be Fund money. It has become the property of the Manager itself. That is the essence of the scheme. The primary requirement of redemption is that the redemption is 'in order that the Manager shall be able to carry out its obligations under clause 19" - that is in order that the Manager shall have the money to fulfil its personal obligation under cl19 to repurchase the unit at its Unit Value. The Manager is bound personally to pay. It is entitled to receive, accordingly, beneficially from the Fund where redemption is effected." From this point his Honour reasoned that the Manager therefore re-purchased the unit with its own money and that then there was a redemption as between the Manager and the Trustee. Subsequently, AB637, he said that cl20 provided for redemption from the Manager and not the former unitholder. His Honour nextly considered the Subscription Deed and said that cl6 did not assert a right to act outside cl20 of the Trust Deed. After dealing with various of its provisions he turned to cl6.5 and observed that there is no provision in the 8 UNREPORTED JUDGMENTS Subscription Deed for redemption from the Manager. Rather cl6.5 provided for payment directly by the Trustee to SFIT, but:- "That provision does not accord with the express requirement of cl20(1) of the Trust Deed that upon satisfaction of the condition precedent 'THEN the Trustee shall forthwith pay from the Fund such case (the Unit Value) to the Manager'. For the reasons which already have been stated the payment contemplated to the Manager is payment to him beneficially so that the moment that the payment is made the cash ceases to be part of the Fund. It is the Manager's. The Manager does not receive it as mere agent for the Trustee to transmit on the Trustee's behalf to the former unitholder." His Honour considered that cl6.5 was not "underpinned" by the Trust Deed and noted the difference which may exist between the Unit Value and the Selling Price. In considering the operation of cl6.5 he said, AB642:- "Tt is implicit, however, in what has been done that before redemption was effected the Manager had acquired from SFIT beneficial ownership of the unit being redeemed for redemption under cl20 is redemption from the Manager not redemption from the former unitholder. This cannot be glossed over by a provision that the Trustee pay the former unitholder directly. There was no power in the Trust Deed for redemption directly by the Trustee from the former unitholder as distinct from redemption from the Manager." His Honour posed for consideration the effect of cl6.5. He concluded, correctly in my view, that if there had been a redemption directly from SFIT to the Trustee stamp duty would not have been payable, but he was of the view that there was an intermediate transaction whereby the Manager acquired title to the unit, which transaction was subject to stamp duty, and thereafter there was redemption as between the Manager and the Trustee. In my respectful opinion it is not appropriate to have regard to cl19, to the extent to which his Honour did, for the purpose of construing cl20. C120(1)(i) is concermed with two situations, viz the fulfilment of the obligations under cl19 and, relevantly for present purposes, redemption in accordance with the terms of the issue of any units. Provided there is compliance with the provisions of the other sub-clauses there is an obligation on the Trustee to pay from the Fund such cash to the Manager. If one is looking only at a cl20 redemption it occurs upon that payment being made and as from the date on which the statement required by cl20 is furnished to the Trustee, and without more, there is a redemption. The statement will be prior in point of time, although perhaps only shortly, to the payment. However, by the time the payment is made the redemption will have been effected. The only remaining obligation is to pay out the unitholder. It cannot be said in these circumstances that the payment to the unitholder brings about a change in the beneficial ownership. That has already occurred in consequence of the redemption. There is nothing in the Clause to justify the necessity for or the happening of the further transactions his Honour suggests. The discharge of the obligation to pay the unitholder will be brought about by the Manager paying the Unit Value to the former unitholder in discharge of the Trustee's obligation, ie as agent for the Trustee. If the Manager received the money beneficially it would own it and, upon payment to the unitholder it would become entitled to the unit beneficially. The redemption in those circumstances could only be achieved by the Trustee paying another amount to the Manager for the unit to which it had become so entitled. This was clearly never intended and, in my respectful opinion, is not capable of being supported by a construction of cl20. URIST-WIDE MANAGEMENT LTD (RECEIVER APPOINTED) v CHIEF COMMISSIONER OF STAMP DUTIES (Rolfe AJA) There is a further indication that in a re-purchase situation the Manager does not become beneficially entitled to the unit. C122(2) provides that from the proceeds of re-sale the Manager becomes entitled to a service fee, the clear inference being that it is not entitled to any other part of the balance of the proceeds of sale to which it would be entitled if it was the beneficial owner of the unit. As I have said his Honour approached the construction and operation of cl6.5 on the basis of his construction of cl20, which construction was, in my respectful view, erroneous. Cl20(1)(i) expressly provides that redemption shall be in accordance with the teens of issue and in relation to the SFIT Units redemption is governed by cl6. The Manager triggered the redemption of these units by giving a Schedule 4 notice provided by cl6.3. It was not suggested that the failure to give two business days' notice affected the situation, SFIT taking no point about this. The Manager furnished the Trustee with a notice purporting to comply with cl20(1). That meant the notice set out the Unit Value rather than the Selling Price, and the Trustee paid the Manager the Unit Value. However this was not done with the knowledge or consent of SFIT, which, as the evidence makes clear, only received the Selling Price from the Manager. If there was an over payment by the Trustee it was an over payment to the Manager and it will be a matter to be adjusted with the Manager. It does not affect the position qua SFIT. The steps in cl6.4 having been taken, cl6.5 requires that, firstly, the Trustee "shall redeem" and, secondly, that notwithstanding cl19 it shall pay to SFIT an amount equal to the Selling Price. There is a difference between the steps leading to redemption in cl20 and in cl6.5. However that only means that redemption may take place in two ways, which is consistent with its taking place in accordance with the terms of the issue. The procedure to be adopted will depend on the units being redeemed. Under cl20 redemption is effected by the steps I have identified. Under cl6.5 it is effected in accordance with the terms of Pt6, including payment to SFIT. Nothing is "glossed over" by the use of the clear words and once it is understood that the two methods of redemption are available. There is, in my opinion, no justification for seeking to construe those provisions as creating an intermediate step. In the case of the disputed redemptions SFIT received the notice under Schedule 4 and, subsequently, the amount to which it was entitled. There was obvious sense in the Trustee paying the money to the Manager for it to on-pay to SFIT: firstly, the Manager was the party which dealt with SFIT, and, secondly, it was the party to which SFIT had to deliver the unit certificates (cl6.4(b)), to which redemption was subject. In all the circumstances the proper inference is that the Manager acted as the Trustee's agent to effect the payment. The evidence does not permit of any other inference requiring the payment by the Manager to SFIT. I would also draw attention to cl8, which shows that when a purchase by the Manager of the SFIT Units was to take place the craftsman was well able to say so. The Chief Commissioner submitted that the Court must characterise what in fact occurred by reference to the provisions of the Trust Deed, rather than by analysing them without reference to what occurred. He pointed to the various steps to which I have referred and noted what he submitted were inconsistencies between the provisions of cl20 and cl6.5. He submitted the redemption could not be characterised as one made pursuant to cl20 and that; no other provision of the Trust Deed authorised a redemption on those terms. I disagree. Cl6 provided for the redemption relevantly for present purposes and there was incorporated the requirement that a notice required by C120 be furnished. 10 UNREPORTED JUDGMENTS The Chief Commissioner sought to characterise the transaction as a re-purchase of the SFIT Units by the Manager and, in doing so, placed emphasis upon the terms of the second quoted letter of 31 October 1988. However, there was no suggestion that that letter was furnished to SFIT and there is simply no evidence of an underlying sale and purchase from SFIT to the Manager. All the evidence points to the conclusion that the parties were acting in accordance with the proper construction of the two Deeds, which did not bring about any such underlying transaction. Nor do the facts support a conclusion that there was any such transaction. The Manager carried the onus of establishing that the assessment was erroneous. It has proved that the parties were acting conformably with the Deeds. It has no obligation thereafter, in my opinion, to disprove other suggested factual situations whereby the beneficial interest in the units is said to have passed, particularly where there is no evidence to support their existence. CONCLUSIONS In my opinion there is no basis for concluding that redemption would only take place through a re-purchase by the Manager, nor that in the circumstances of this case there was such a re-purchase. The redemption was effected by the Trustee in accordance with the terms of the Deeds, which meant that the beneficial interest passed from SFIT to the Trustee in consequence of the redemption. Hence no stamp duty was payable by the Manager. ORDERS I would propose the following orders:- (1) Appeal allowed. (2) In proceedings 30070 of 1991, in lieu of the order made, that the appellant's objection dated 21 June 1991 against the respondent's assessment of stamp duty dated 21 May 1991 be allowed. (3) The respondent pay the appellant's costs of the proceedings at first instance and of the appeal. (1) Appeal allowed. (2) In proceedings 30070 of 1991, in lieu of the order made, that the appellant's objection dated 21 June 1991 against the respondent's assessment of stamp duty dated 21 May 1991 be allowed. (3) The respondent pay the appellant's costs of the proceedings at first instance and of the appeal. Counsel for the appellant: AH Slater QC/ P Braham Solicitors for the appellant: Messrs Ternes and Salier Counsel for the respondent: RF Edmonds SC/SJ McMillan Solicitors for the respondent: HK Roberts, AGS