Al-Saeed and Association Pty Ltd ATF Al-Saeed Education and Welfare Trust v Chief Commissioner of State Revenue [2013] NSWADT 155

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Al-Saeed and Association Pty Ltd ATF Al-Saeed Education and Welfare Trust v Chief Commissioner of State Revenue [2013] NSWADT 155 Hearing dates: 16 January 2013, decided on papers Decision date: 09 July 2013 Jurisdiction: Revenue Division Before: M Hole, Judicial Member Decision: The assessment of the Respondent dated 6 January 2012 is confirmed. The interest components imposed by the Respondent are confirmed. Catchwords: 'declaration of trust' as defined in s8(3) Legislation Cited: Duties Act 1997 Cases Cited: Chief Commissioner of State Revenue v Platinum Investment (2011) 80 NSWLR 240 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431 Commissioner of Stamp Duties (NSW) v Pendal Nominees Pty Ltd (1989) 167 CLR 1 Category: Principal judgment Parties: Al-Saeed & Associates Pty Ltd atf Al-Saeed Educational and Welfare Trust (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: Adam & Partners Lawyers (Applicant) Crown Solicitor's Office (Respondent) File Number(s): 126102

REasons for decision 1The Applicant has made this application in respect of the assessment by the Respondent dated 6 January 2012. Duty on a "Deed of Trust" ("Trust Deed") was assessed at ad valorem transfer duty plus interest. The Trust Deed was executed by the Applicant on 1 December 2011.

Facts 2The Trust Deed provided (amongst other things) the following details: the Applicant was referred to as the Trustee; a Recital that the Settlor (an individual) wished to establish a fund with the advancement of public educational and welfare purposes; a Recital that the Settlor paid a settlement sum of $100.00 to the Trustee; a Recital that the Trustee wished to acquire a specified property "on behalf of the Trust"; a declaration that: "The Settlor and the Trustee declare that the Trustee shall hold the settlement sum and all monies and property both real and personal which may hereafter be given to the Trust for the general purpose of the Trust (all which sums are included below in the expression "The Trust Fund") UPON TRUST to apply them in establishing and maintaining in perpetuity, in accordance with the terms of this Deed for promoting the study of education and for the welfare of the general public and all matters relating thereto."; a description of the title of the Trust Fund as "The AL-Saeed Educational and Welfare Trust"; powers given to the Trustee being: "3.1Invest monies of the Trust Fund in the way permitted for investment of such trust funds under the Laws of Australia and of any state or territory of Australia. 3.2Change and investment or vary the terms and conditions on which an investment is held. 3.3Sell or otherwise dispose of the whole or any part of the investments or the property of the Trust Fund. 3.4Borrow or raise or secure the payment of money and secure the repayment of any debt, liability, contract, guarantee, or other engagement in any way and in particular by mortgage, charge, lien, encumbrance, debenture or other security fixed or floating over any present or future asset of any kind and wheresoever situated. 3.5Take and act on the opinion of a solicitor and/or barrister practising for no less than ten (10) years in Australia in relation to the interpretational affect of this Deed or any of the trusts or powers of this Deed without responsibility for any loss or error resulting from doing so but this provision does not stop the Trustee from applying to a Court of competent jurisdiction. 3.6Take any action for the adequate protection or insurance of any part of the Trust Fund. 3.7Purchase, draw, make, accept, endorse, discount, execute, and issue bills of exchange and other negotiable and transferrable instruments of any kind. 3.8Subject to the provisions of this Deed namely: i)perform any administrative act and; ii)pay or deduct all costs charges, commissions, stamp duties, impost, outgoings, and expenses of or incidental to the Trust Fund or its management (whether or not the Trustee is under any legal obligation to make the payment), or in connection with the preparation, execution and stamping of this Deed, as though the Trustee were the absolute owner of the Trust Fund and the income of the Trust Fund. iii)Attract and encourage donations, gifts (by will or otherwise), endowments, trust distributions and other forms of financial assistance to or for the benefit of the Trust. iv)Employ and pay or provide any benefit for any employee without being responsible for the default of the employee or for the loss occasioned by the employment. v)Engage and pay any agent, contractor or professional person without being responsible for the default of the agent, contractor or employee or for any loss occasioned by the engagement. vi)Sponsor, organise and undertake fundraising activities and arrange for the issue of appeals to the public for donations. vii)Accept as part of the Trust Fund any gifts (by will or otherwise) donations, settlements, or other dispositions of money, monies worth, or property to or in favour of the Trust Fund and either retain them in their original form without selling or converting them into money, or invest, apply or deal with them in any way that the trustee may invest, apply or deal with the Trust Fund under this Deed. viii)Carry on any qualifying trade or business either alone or in partnership. A qualifying trade or business means a trade or business the profits of which would qualify for any income tax exemption given to charities. ix)May take out insurance which protects and indemnifies the Trustee against the risk of personal liability arising from: breach of trust by the Trustees; the cost of a successful defence to a criminal prosecution brought against a Trustee in his capacity as Trustee of the Trust." the Settlor has the power to appoint Trustees during his lifetime or the party nominated pursuant to his will; an exclusion of settlors and non-charitable purposes so that trust property or its income not be permitted "to become payable to or applicable for the benefit of the Settlor or be applied for any purpose that is non-charitable. a right of indemnity in favour of the Trustee regarding reimbursement for expenses and liabilities incurred in execution of the Trustee's trusts or powers; that if the Trust Fund is wound up then all monies be paid and all property be transferred to "an eligible charity as the Trustee decides". 3The property specified in the Trust Deed was acquired by the Applicant by way of contract entered into on 2 September 2011. The purchaser was described as "Al-Saeed & Associates Pty Ltd atf Al-Saeed Educational and Welfare Trust". 4An application for exemption was received by the Respondent from the solicitor acting for the Applicant on 5 December 2011 seeking exemption pursuant to s275(3)(a) Duties Act 1997 ("Duties Act") in respect of the Trust. This application was considered by an officer of the Respondent and not approved on 23 December 2011. The officer noting that the Recital stating that the Trustee wished to acquire a specified property was not within the guidelines concerning s275(3)(b) of the Duties Act. 5By letter dated 6 January 2012 the Respondent advised the Applicant that the application received by the Respondent on 5 December 2011 was refused, that the dutiable value relied on for assessment of duty was that as shown on the contract for sale on which duty was paid on 1 December 2011 and provided with that letter a Duties Notice of Assessment. 6The representative of the Applicant requested the Respondent to review the decision by letter dated 17 January 2012. This letter canvassed the issues concerning the request for exemption pursuant to s275 of the Duties Act. 7An "Objection to an Assessment or Decision" ("Objection") was received by the Respondent on 28 February 2012. This specified the reason for objection as "exemption Charitable Trust". This objection seems to have been accompanied by a letter dated 27 February 2012 from the solicitor acting for the Trust referring to the exemption available pursuant to s275 Duties Act, a statutory declaration by the Settlor dated 24 February 2012 and an "Application for Exemption - Charitable and Benevolent Bodies" by the Settlor claiming exemption for the Trust pursuant to s275(3)(a) Duties Act. 8A further letter dated 27 February 2012 was forwarded to the Review Branch of the Respondent by the solicitor acting for the Trust Fund providing further reasons why the exemption should be applied and seeking an extension of time regarding the application for review. Paragraph 8(c) of Revenue Ruling No DUT 31 is also referred to in this letter. 9The parties agreed that the application could be considered on the papers. The Applicant and Respondent provided comprehensive written submissions and further submissions in reply. 10The parties agreed that the application is for a review of the Respondent's Notice of Assessment dated 6 January 2012 which assessed ad valorem transfer duty plus interest on a trust deed executed by the Applicant on 1 September 2011 establishing The Al-Saeed Educational and Welfare Trust. 11The Applicant bears the onus of proving the Applicant's case.