Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Rowntree Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 141 Hearing dates: 4 June 2015 Decision date: 07 July 2015 Jurisdiction: Administrative and Equal Opportunity Division Before: A Verick, Senior Member Decision: The reassessment is confirmed subject to remission of the interest imposed. The reassessment is accordingly remitted to the Chief Commissioner to make the necessary adjustment as directed. Catchwords: STATE REVENUE – Stamp duties - Retirement of Security Custodian – Replacement of new Security Custodian – Acquisition of property by new Security Custodian – Whether exempt as a transfer on retirement of trustee – s 54(3) of the Duties Act 1997 Legislation Cited: Duties Act 1997 Taxation Administration Act 1996 Administrative Decisions Act 1997 Cases Cited: Kern Corporation Ltd v Walter Reid Trading Pty Ltd (1987) 163 CLR 164 Haque v Haque [No 2] (1965) 114 CLR 98 Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712 Sportscorp Australia Pty Ltd v Chief Commissioner of State Revenue (2004) 58 ATR 1; 213 ALR 795 Chen v Marcolongo [2009] NSWCA 121 Commissioner of State Revenue v Victoria Gardens Developments Pty Ltd (2000) 46 ATR 61; [2000] VSCA 233 Comptroller of Stamps v Hutchins [1985] VR 599 Perpetual Trustee Company Ltd v Commissioner of State Revenue (2000) 44 ATR 273 Commissioner of Stamp Duties (NSW) v Pendal Nominees Pty Ltd (1989) 167 CLR 1 FCT v Totledge Pty Ltd (1982) 82 ATC 4168 Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor [2004] NSWADTAP 19 Trust Co of Australia v Chief Commissioner of State Revenue [2002] NSWADT21 Category: Principal judgment Parties: Rowntree Investments Pty Ltd (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: I Young (Applicant) M Sealey (Respondent) Solicitors: Rubicon Lawyers Pty Limited (Applicant) Crown Solicitor (Respondent) File Number(s): 1410530 Reasons for decision 1. The Applicant seeks a review of the Chief Commissioner's reassessment dated 6 January 2014 ("the Reassessment") made pursuant to s 9 of the Taxation Administration Act 1996 in respect of a transfer dated 16 August 2013 of a property situated at Ryde ("the Ryde Unit") from Crown Top Ryde Pty Ltd ("the vendor") to the Applicant, as Security Custodian of the Rowntree Superannuation Fund ("the Superannuation Fund"). The Rowntree family, Bruce, his wife Lisa and Fiona, their daughter, were members and trustees of the Superannuation Fund at the relevant time. 2. Initially, the Chief Commissioner accepted the transfer qualified for nominal duty under s 18(3) of the Duties Act 1997 ("the Act") but, on review, the Chief Commissioner formed the view that the transfer was a transfer of dutiable property under s 8 of the Act. Accordingly, the reassessment was issued to impose an ad valorem duty on the relevant transaction. 3. The factual background is not in dispute but, by way of background, it is necessary to refer to some earlier events leading to the transfer transaction that occurred on 16 August 2013. 4. On 14 June 2012, Lisa Rowntree personally entered into an off the plan contract to purchase the Ryde Unit with the vendor. The price was $1.45M and she paid a deposit of $145,000.00 with the intention to occupy it, on completion, as a family home. 5. However, in or about April 2013, when the Ryde Unit was nearing completion, the Rowntree family found, on inspection, that the Ryde Unit was too small for a family home. But the family agreed that it was, however, well suited as an investment property. They decided to acquire the Ryde Unit as an asset of their self-managed Superannuation Fund. 6. On 17 April 2013, Bruce Rowntree had a meeting with an officer working for the Chief Commissioner and sought advice as to the purchase of the Ryde Unit by the family Superannuation Fund rather than by his wife personally. It was alleged that the officer told him three things. First, that the existing contract entered into by Lisa Rowntree should be rescinded. Second, that the purchase moneys had to come from the Superannuation Fund. Third, that the Custodian Trust Deed would be subject to a nominal duty. 7. On 17 July 2013, the members of the Rowntree family, the then trustees of the Superannuation Fund, made a loan application to the Bank of Queensland to borrow the sum of $1,087,500 to assist in the acquisition of the Ryde Unit. They were at that time informed that an individual as the bare Security Custodian of the Superannuation Fund would be acceptable. 8. On 17 July 2013, Lisa Rowntree's solicitors sought and received agreement from the vendor's solicitors to rescind the contract with Lisa Rowntree entered into on 14 June 2012. Only the front page of the contract was required to be changed as all funds to acquire the Ryde Unit for the Superannuation Fund had to be paid by the Superannuation Fund. Under the original contract, Lisa Rowntree was required and had paid from her own funds a 10% deposit of the purchase price but no deposit was required under the second contract. 9. On 25 July 2013, Lisa Rowntree also executed a Custodian Trust Deed to acquire and hold the Ryde Unit for the trustees of the Superannuation Fund. 10. Settlement was scheduled to occur the next day, 26 July 2013, but settlement did not occur on 26 July 2013. 11. On 9 August 2013, the Bank informed the Rowntree family that it would not accept an individual as the Security Custodian for the loan and that it required a new incorporated company. The Applicant was incorporated on the same day with Lisa Rowntree as sole director and shareholder. 12. On 9 August 2013, Lisa Rowntree resigned as the Security Custodian and the Applicant was appointed as the new Security Custodian under a Deed of Retirement and Appointment of New Trustee. The Applicant, also on the same day, entered into a Custodian Trust Deed to acquire and hold the Ryde Unit as a Security Custodian for the trustees of the Superannuation Fund. 13. On 13 August 2013, the Bank confirmed that the transfer of the Ryde Unit had to be in the name of the Applicant and not in Lisa Rowntree's name as Security Custodian. But, the vendor of the Ryde Unit refused to rescind the second contract to enable the Applicant to be the purchaser of the Ryde Unit under a contract with the vendor. 14. On 13 August 2013, the second contract entered into on the 25 July 2013 was presented for stamping and was stamped with ad valorem duty of $65,240. 15. On 16 August 2013, settlement occurred with the payment by the Applicant of the full purchase price of $1,450,000 to the vendor with the transfer duly executed in the name of the Applicant as the transferee. This transfer was made in favour of the Applicant on directions of the holder of the second contract with the vendor. This transfer was stamped with the nominal duty in the amount of $10. 16. At about the time the settlement occurred, the vendor refunded Lisa Rowntree her deposit of $145,000 paid pursuant to the first contract entered into on 14 June 2012. 17. On 29 August 2013, the Applicant was registered on the title as the owner of the Ryde Unit. 18. On 24 September 2013, solicitors acting for the Applicant, presented the Custodian Trust Deed, dated 9 August 2013, for stamping and attached the front page of the 25 July 2013 Contract and extracts from the Superannuation Fund's Bank accounts with a cheque for $60.00 "to cover the duty payable on the original deed and duplicate". 19. The Chief Commissioner responded on the 6 January 2014 and informed the solicitors that ad valorem duty was payable on the Transfer dated 16 August 2013 between the vendor as transferor and the Applicant as transferee and also ad valorem duty was payable on the Custodian Trust Deed dated 9 August 2013. Pursuant to s 86(1) of the Taxation Administration Act 1996 a reassessment was issued to the Applicant as transferee, less $10 previously paid, for the amount of $65,230.00 including an interest amount. An assessment was also issued to the Applicant for an amount of $65,240.00 including interest in respect of the 9 August 2013 Custodian Trust Deed. 20. The Applicant, on 10 March 2014, lodged an objection against the two assessments. 21. On 28 July 2014, the Chief Commissioner determined the objection. 22. The Chief Commissioner disallowed the Applicant's objection against the ad valorem duty reassessment of $65,240 on the Transfer dated 16 August 2013 on the following grounds – "I advise that s. 18(3) cannot apply because as noted in the letter from OSR dated 6 January 2014, as Rowntree Investments Pty Limited was registered after the date of the contract, the s 18(3) requirement that the transferee was related at the time the agreement was entered into, could not be complied with. Regarding s. 54(3), I advise that that concession cannot apply as s. 54(3) does not apply to custodians." 1. However, the Chief Commissioner agreed to allow the objection against the ad valorem duty imposed on the Custodian Trust Deed dated 9 August 2013 on the grounds "that s. 18(6A) would apply to the Custodian Trust Deed". 2. The principal issue in this matter before the Tribunal was whether the Transfer dated 16 August 2013 qualified for concessional treatment under s 54(3) of the Act. 3. Section 54 is found in Part 6 of the Act that provides for concessional rates of duty in relation to certain transactions. Section 54 allows a concessional rate when a trustee is "appointed in substitution for a trustee or a trustee appointed in addition to a trustee or trustees". The trustee is in s 54(1) of the Act referred to as the "new trustee". 4. Section 54(3) of the Act provided as follows: (3) Duty of $50 is chargeable in respect of a transfer of dutiable property to a person other than a licensed trustee company, a special trustee, a trustee of a self managed superannuation fund or a trustee of a special disability trust as a consequence of the retirement of a trustee or the appointment of a new trustee, if the Chief Commissioner is satisfied that, as the case may be: (a) none of the continuing trustees remaining after retirement of a trustee is or can become a beneficiary under the trust, and (b) none of the trustees of the trust after appointment of a new trustee is or can become a beneficiary under the trust, and (c) the transfer is not part of a scheme for conferring an interest, in relation to the trust property, on a new trustee or any other person, whether as a beneficiary or otherwise, to the detriment of the beneficial interest or potential beneficial interest of any person. If the Chief Commissioner is not satisfied, the transfer is chargeable with the same duty as a transfer to a beneficiary under and in conformity with the trusts subject to which the property is held, unless subsection (3A) applies. 1. The parties were in agreement that the conditions set out in paragraphs (a), (b) and (c) of s 54(3) of the Act were not in issue. The parties also agreed that s 18(3) of the Act concession did not apply in this matter. That concession was only available if the purchaser under the agreement to purchase and the transferee under the transfer were related persons. 2. The only matter that is in issue is whether the concession in s 54(3) of the Act applied to the transfer of the Ryde Unit from the vendor to the Applicant in its capacity as Security Custodian. The question of law that arises is whether the concession is only available where a new trustee is appointed to an existing and continuing trust. 3. Mr Young, counsel for the Applicant, in addition to two sets of lengthy written submissions, also made further viva voce submissions at the hearing. Mr Sealey, counsel for the Chief Commissioner, filed one set of written submissions and also made oral submissions at the hearing. In addition, the Tribunal had the documents filed pursuant to s 58 of the Administrative Decisions Review Act 1997 and an Affidavit of Bruce Elliott Rowntree with some attachments. 4. Relevantly, Mr Young for the Applicant submitted that, for the concession under s 54(3) of the Act to apply, "it was sufficient for the transfer to be, by any person as transferor, provided the transfer was to a new trustee of an existing trust, as a consequence of the retirement of an existing trustee, or, the appointment of a new trustee". It was further contended that "sec 53(3) had application in the case of an existing trustee acquiring trust property from a vendor, retiring and appointing a new trustee, with a transfer by direction of the trust property to the new trustee – which are, the circumstances of the instant case". 5. The Chief Commissioner's case was put more simply by Mr Sealey. It was submitted that the above "contention is incorrect" and that "in order for section 54(3) to apply to relieve duty on a particular transfer of dutiable property, the property that is transferred must be subject to a pre-existing trust such that the trustee that acquires the property holds it as trustee of that continuing, pre-existing trust". 6. As a preliminary issue, both parties sought to determine the nature of the interest held by Lisa Rowntree under the second contract with the vendor to purchase the Ryde Unit as Security Custodian on behalf of the trustees of the Superannuation Fund. 7. Both placed reliance on the decision of the High Court (Mason J, Wilson J, Brennan J, Deane J and Dawson JJ) in Kern Corporation Ltd v. Walter Reid Trading Pty Ltd (1987) 163 CLR 164. This case arose out of the destruction by fire of a building owned by the Walter Reid Trading Pty Limited, which had entered into a binding contract to sell the land to Kern Corporation Limited. At the time of the fire, the purchase price had not been paid and the contract was to be settled some six months away. Reid remained in possession of the premises on which it was conducting a retail department store. The court was concerned with the status of the purchaser. 8. Relevantly, for purposes of the present matter, both parties sought to place reliance on what was said by his Honour Deane J in Kern Corporation Ltd v Walter Reid Trading Pty Ltd, at 191-192: "For limited purposes, the distinction between legal title and beneficial ownership may provide a useful reference point in describing the position of the ordinary unpaid vendor of land under an uncompleted contract of sale. However, and with due respect to some past statements of high authority to the contrary, it is wrong to characterise the position of such vendor as that of a trustee. True it is that, pending payment of the purchase price, the purchaser has an equitable interest in the land which reflects the extent to which equitable remedies are available to protect his contractual rights and that the vendor is under obligations in equity which attach to the land. None the less, the vendor himself retains a continuing beneficial estate in the land which transcends any "lien" for unpaid purchase money to which he may be entitled in equity after completion. Pending completion, he is beneficially entitled to possession and use. Pending completion he is beneficially entitled to the rents and profits. If the purchaser enters upon the land without the vendor's permission and without authority under the contract, the vendor can maintain for his own benefit, an action for trespass against the purchaser. While the practical significance of those continuing beneficial rights of the vendor may vary according to particular circumstances (e.g. whether completion is already overdue or is not due for some lengthy period), it is both inaccurate and misleading to speak of the unpaid vendor under an uncompleted contract as a trustee for the purchaser: see, generally, per Brett L.J., Rayner v. Preston [96] and Waters, The Constructive Trust (1964), p.74ff. There is authority for the view that after completion has actually taken place, some equitable rights of the purchaser, which (in their entirety) then constitute beneficial ownership, relate back to the date of the contract. But there is no relation back of beneficial ownership in the sense that the vendor is retrospectively deprived of his beneficial right, pending payment of the full purchase price, to the possession, use, rents and profits of the land. Regardless of whether his rights be viewed in the perspective of foresight (i.e. before completion) or hindsight (i.e. after completion), the ordinary unpaid vendor is not a trustee of the land for the purchaser." 1. Mr Young also referred to two further authorities, Haque v Haque [No 2] (1965) 114 CLR 98 and Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712, where similar observations were made. In Haque v Haque, the High Court (Barwick CJ, Kitto J, Menzies J, Windeyer J and Owen J) was considering the estate of a deceased who, during his lifetime, had sold certain lots of land in Western Australia by various contracts of sale under which moneys were still owing when he died. He was still the registered owner. In explaining the status of the deceased owner, at 124 Kitto J made the following observations: "It is to be assumed, therefore, that the contracts were still in fieri. In each instance the deceased had the legal title to the land at his death, and subject to the contract he held it for his own benefit absolutely. But by the operation of well-known equitable principles the making of the contract had to an extent transferred the beneficial ownership to the purchaser. The deceased was not a mere trustee for the purchaser, but his position was something between that of a mere trustee and a mortgagee. He could exercise for his own benefit such rights with regard to the land as were consistent with the contractual rights of the purchaser until payment of the purchase money in full and until that event he had a lien or charge for the unpaid purchase money …" 1. And in Bunny Industries, the Queensland Court of Appeal at 715 Connolly J observed as follows: "On the execution of the contract the vendor becomes a trustee for the purchaser. He is not however a bare trustee for he has a personal and substantial interest to the extent of the unpaid purchase moneys. He is 'in progress towards' bare trusteeship and finally becomes such when the whole of the purchase moneys are paid and he is bound to convey." 1. On the basis of these three cases, Mr Young submitted that in the case of a contract to purchase land "on execution the vendor is not a mere or bare trustee for the purchaser, but the purchaser does have an immediate equitable interest in the subject land commensurate with the equitable remedies available to protect that equity and one which relates back on completion". 2. Mr Sealey, counsel for the Chief Commissioner submitted that it follows from the observations of his Honour in Kern Corporation that to the extent the "applicant had any equitable interest in the Property following the entry into the Contract, that interest was contingent only, and had no value, as there was no deposit paid". Counsel further submitted that "it is inaccurate and misleading to speak of Crown (the unpaid vendor) as a 'trustee' of the Property" and that until completion of the contract, "it was Crown that remained the owner of the estate in fee simple in the Property (and who remained the registered owner under Torrens Title)". 3. I think his Honour Deane J in Kern Corporation further clarified the matter. After what his Honour had said above, his Honour went on to say: "Assuming that it could be established that the purchaser would be ready willing and able to complete in six months, Kern, as such purchaser, had equitable rights against the land. But those equitable rights did not constitute beneficial ownership. Nor did they suffice to deprive Reid completely of its equitable estate in the land. Pending completion, Reid remained beneficially entitled to the possession, use, rents and profits of the land. Its beneficial estate in the land was diminished to the extent of Kern's defeasible equitable interest in it. Otherwise it persisted." 1. The equitable interest would accordingly depend on the amount of the purchase price paid. As observed above, a vendor's beneficial estate in land would diminish to the extent of the purchaser's defeasible equitable interest in the land. In the present matter, all the purchase moneys were only paid on the settlement date. 2. Mr Sealey also referred in his submissions to authorities that "have considered the application of s 54(3) or its predecessor provision in the Stamp Duties Act 1923 ("Stamp Duties Act") or its equivalents in other jurisdictions". 3. First, counsel for the Chief Commissioner referred to the judgment of Gzell J in Sportscorp Australia Pty Ltd v Chief Commissioner of State Revenue (2004) 58 ATR 1. In this case, three partners appointed Queenscliff Pty Ltd as an agent to acquire land at Queenscliff and build residential accommodation. On completion, the lots were transferred to the partners as tenants in common and subsequently partitioned between them. The Chief Commissioner raised assessments to ad valorem duty on the transfer. The partners sought to argue before his Honour Gzell J that, inter alia, s 54(3) of the Act applied to reduce the duty to a concessional rate. In rejecting this argument, his Honour made the following observations: " 66.The partners submitted that the partnership came to an end upon the registration of the strata plan and Queenscliff's trusteeship then ended. The transfers were thus in consequence of the retirement of Queenscliff as trustee. It was submitted that the situation was similar to that considered in Dadeeton Pty Ltd v Commissioner of State Taxation [2004] SASC 88; (2004) 88 SASR 109. There a trustee held authority to fish for abalone in trust for the corporate trustee of a family trust. His purported transfer of the authority to his family company was set aside and an order made for him to execute documents to effect the registration of the transfer of the authority to the corporate trustee. The court held the word "retirement" in an analogous provision included both voluntary retirement and involuntary removal from office. 67. The decision is distinguishable. In that case there was a continuing trust in favour of family members. The effect of the orders was to terminate a sub-trust. In the instant circumstances, there was no continuation of the trust once Queenscliff transferred the lots to the partners. I reject the suggestion that a trust continued by reason of the obligations owed by the partners to each other under their holding of the lots as tenants in common. That relationship arose by reason of the transfers and did not represent a continuation of an existing trust. 68. Furthermore, the Duties Act 1997, s 54(3) differs from its South Australian counterpart by emphasising the continuing nature of the trust. Hence the reference to continuing trustees and the position after appointment of a new trustee and the lack of affectation upon potential beneficial interest. 69. In my view, the Duties Act 1997, s 54(3) did not apply to the transfers." 1. Second, counsel referred to the decision in Chen v Marcolongo [2009] NSWCA 121. In that case her Honour Beazley JA, in considering a stay application, made the following observations: "[36] The next potentially relevant provision was s 54, which provided that only nominal duty of $50 was chargeable in respect of a transfer of dutiable property on the part of a trustee. However, in Sportscorp Australia Pty Ltd v Chief State Cmr of State Revenue [2004] NSWSC 1029; (2004) 213 ALR 795, Gzell J held that s 54 only applied in the case of a continuing trust. In this case, the trust was brought to an end by Hamilton J's orders. Mr Chen drew the court's attention to Dadeeton Pty Ltd v Cmr of State Taxation (2004) 88 SASR 109 as providing support for the proposition that duty would not be payable. However, Gzell J, in Sportscorp, distinguished Dadeeton. For the limited purposes of the stay application, the decision of Gzell J should be accepted as correct." 1. Further, counsel drew attention to two Victorian decisions where the courts had, in considering an equivalent provision in the Victorian Stamp Duty Act, made observations as to the scope and purpose of the concession. 2. In Commissioner of State Revenue v Victoria Gardens Developments Pty Ltd (2000) 46 ATR 61 at [27] Ormiston JA described the scope of the provision as follows: "In my view, the primary judge was clearly correct in holding that, on 2 grounds, exemption (23) did not apply to any transfers. First, the exemption, in using the words "the appointment … of any trustee", applies only to the appointment of a trustee to perform a pre-existing trust and does not extend to the appointment of a trustee to perform a newly created trust." 1. In Perpetual Trustee Co Ltd v Commissioner of State Revenue (2000) 44 ATR 273, at [53] Hansen J explained the purpose for the concession as follows: "… In my view the purpose of the exemption is clear. It is to exempt from stamp duty a transfer of real property given in the context of a change of trustee of a pre-existing trust in order to vest the real property of the trust in the name of the trustee for the time being. In such a case the transfer is not given in consequence of a sale or other disposition of the real property for valuable consideration. In such circumstances it would be unreasonable to charge the instrument of transfer to duty. The beneficial interest has not changed. There has been a mere change in the registered proprietor (in a case such as the present which concerns land under the Transfer of Land Act 1958) consequent upon and because of the change in the office of trustee and the need for the trust property to be conveyed into the name of the trustee for the time being." 1. The Chief Commissioner's case was put by way of summary by his counsel as follows: "It can be seen from the above authorities that in order for section 54(3) of the Act to apply to relieve duty on a particular transfer of dutiable property, the property that is transferred must be subject to a pre-existing trust (Victoria Gardens, Perpetual Trustees) such that the trustee that acquires the property holds it as trustee of that continuing, pre-existing trust (Sportscorp, Chen v Marcolongo)." 1. It was further submitted by Mr Young that Lisa Rowntree's and the Applicant's role as the Security Custodians was "that of a nominee to hold the rights to the Property for the Fund" and "trustee of property impressed with trust obligations". This, it was submitted "is clear from the decision in and document under consideration in Pendal Nominees (1989) 167 CLR 1". And that on the basis of what was said in FCT v Totledge Pty Ltd (1982) 82 ATC 4168 it "is of no consequence that the nominee holds trust property for a person, who in turn, holds that property on another or further trust". 2. It was also contended by the Applicant that – "The trust arising under the 25 July CTD and subsequently the Retirement 9 August Deed and the Replacement 9 August CTD was a bare trust, as that term is understood, on account that the nominee/security custodian/trustee had no active duties of management and whose only duty was to convey the property to the beneficiary (the trustees of the Fund) or as they otherwise directed. Absent any documentation, the trust would have been a resulting trust also, because Lisa and the … Applicant did not provide the purchase moneys and the Fund registered the title in the name of a stranger to the purchase". 1. The submission, put more simply, was that Lisa Rowntree as Security Custodian under the second contract dated 25 July 2013 "had an equitable interest in the land, which was not contingent and which equitable interest was held by her on trust" and that "Lisa transferred that interest to the Applicant upon retirement as Custodian Trustee". 2. I think, for the exemption from ad valorem duty under s 54(3) of the Act to apply, the language of the relevant statutory provisions and the various authorities cited by the Chief Commissioner, clearly establish that the retirement and appointment of a new trustee must be in respect of the transfer of dutiable property of a pre-existing trust. The exemption applies to transfers where there is no change in the beneficial interest of the trust assets. The exemption simply does not extend to a transfer of dutiable property to a new trustee of a new trust. 3. It is important to note two critical events leading to the transfer of the Ryde Unit to the Applicant. 4. Lisa Rowntree resigned as the Security Custodian on 9 August 2013. As the vendor refused to rescind the second contract, she continued to be the purchaser in her own right after 9 August 2013. Whatever equitable rights she had under the contract remained with her as such. She could not and, in fact, did not transfer any of these equitable rights to the Applicant as the new Security Custodian. The second contract was in her name, the only difference with the first contract was that no deposit was paid under the second contract. 5. On 16 August 2013, when settlement occurred, the Superannuation Fund paid the full purchase price. On directions from Lisa Rowntree, the vendor transferred the Ryde Unit to the Applicant. 6. It is difficult against the above factual background to conclude that the transfer of dutiable property, the Ryde Unit, was "as a consequence of the retirement of a trustee or the appointment of a new trustee". The transfer was made by the vendor as a consequence of the full purchase price paid by the Superannuation Fund. The trustees of the Superannuation Fund acquired the full equitable and legal title to the Ryde Unit as a result of the transfer, although the property for purposes of superannuation rules had to be held by a Security Custodian on their behalf. 7. In his introductory submission, Mr Young made the observation that this was "not a case of contrived manoeuvre, rather more a botched ordinary, everyday endeavour, to vest a rental property, acquired in an off the plan arm's length development, in the family superannuation fund" (emphasis added). I agree with the general observation made by counsel for the Applicant. But, due to the various changes that occurred leading to the purchase of the Ryde Unit, both the second contract to purchase and the final transfer were in law dutiable transactions subject to ad valorem duty. That was unfortunate for the Rowntree family, but under the law, the Chief Commissioner was required to impose the duty because the transactions were independent of each other and, in all the circumstances, each attracted the ad valorem duty provisions of the Act. 8. The matter that remains is the imposition of the market rate interest on the outstanding duty payable as from the date of the transfer until the duty was paid. Three grounds were advanced by the Applicant to seek a remission of the interest under s 25 of the Taxation Administration Act 1996. 9. The first ground was the failure by the Chief Commissioner to consider its objection against the imposition of the interest. This can be dealt with shortly. The review before this Tribunal is in respect of the assessment and not the objection decision of the Chief Commissioner. 10. The second ground was "the manifest arbitrariness and disproportional assessing action of the CCSR – at first triple ad valorem duty and double interest – in respect of what is, with respect, in substance one composite transaction". This ground can also be dealt with shortly. The review before this Tribunal is as stated above, in respect of the relevant assessment and not the behaviour or conduct of the Chief Commissioner in his assessing processes or objection reviews. 11. The third ground was the delay without any explanation of "some fifteen (15) weeks to issue the assessment". 12. In Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor [2004] NSWADTAP 19 the Appeal Panel of the Administrative Decisions Tribunal, in considering remission of interest imposed at market rate, said at [60] that the market rate interest can only be remitted in exceptional circumstances "otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations in time". 13. In Trust Co of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21, at [27], the Tribunal suggested that "exceptional circumstances" would include "cases where the 'tax default' is entirely due to a fault of the Chief Commissioner" and "situations completely out of the control of the taxpayer, such as postal strikes, serious illness of the taxpayer and natural disasters (bush fires, floods and earth quakes)". 14. I accept that 15 weeks delay on the part of the Chief Commissioner would constitute a ground that would fall within the guidelines suggested in the above cases. I would accordingly remit the interest imposed for the period from the date when the transfer became liable to the duty ending on the date the assessment was issued. 15. The reassessment is confirmed subject to remission of the interest imposed. The reassessment is accordingly remitted to the Chief Commissioner to make the necessary adjustment as directed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 July 2015