Smeaton Grange Holdings Pty Ltd v Chief Commissioner of State Revenue [2016] NSWSC 1594

Supreme Court New South Wales

Medium Neutral Citation: Smeaton Grange Holdings Pty Ltd v Chief Commissioner of State Revenue [2016] NSWSC 1594 Hearing dates: 4 November 2015 Decision date: 15 November 2016 Jurisdiction: Equity - Revenue List Before: White J Decision: Refer to paras [109] and [110] of judgment. Catchwords: TAX — payroll tax — businesses grouped for payroll tax purposes by operation of subs 106I(6) of the Taxation Administration Act 1996 and s 72(6) of the Payroll Tax Act 2007 — person with controlling interest in grouped businesses who could benefit from discretionary trusts as a result of the trustees exercising some power or discretion disclaimed his right as a discretionary object on becoming aware of the grouping — whether the disclaimer meant that subs 106I(6) of the Taxation Administration Act 1996 and s 72(6) of the Payroll Tax Act 2007 had no application for the tax years in question — whether a person who may benefit from a discretionary trust as a result of the trustee exercising some power or discretion may disclaim their right as a discretionary object — held they can — whether a person who may benefit from a discretionary trust as a result of the trustee exercising some power or discretion may disclaim their right as a discretionary object in the absence of valuable consideration — held they can — whether the disclaimer of a person who may benefit from a discretionary trust as a result of the trustee exercising some power or discretion operates retrospectively — held it does — notices of assessment revoked Legislation Cited: Bankruptcy Act 1966 (Cth) Family Law Act 1975 (Cth) Finance Act 1940 (UK) Pay-roll Tax Act 1971 (NSW) Payroll Tax Act 2007 (NSW) Taxation Administration Act 1996 (NSW) Taxation Administration Act 1999 (ACT) Cases Cited: Banque Nationale de Paris v Falkirk Developments Ltd (1977) 136 CLR 177 Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1986) 8 NSWLR 621 Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642 Cronulla Sutherland Leagues Club Ltd v Federal Commissioner of Taxation (1990) 23 FCR 82 Federal Commissioner of Taxation v Cornell (1946) 73 CLR 394 Federal Commissioner of Taxation v Ramsden [2005] FCAFC 39; (2005) 58 ATR 485 Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204; [2008] HCA 55 Hardoon v Belilios [1901] AC 118 HJA Holdings Pty Ltd v ACT Revenue Office [2011] ACAT 91 Howard F Hudson Pty Ltd v Ronayne (1972) 126 CLR 449 In re Gulbenkian's Settlements (No. 2) [1970] Ch 408 In re Stratton's Disclaimer [1958] Ch 42 JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd [1985] VR 891 Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56 Lady Naas v Westminster Bank Limited [1940] AC 366 Lewis v Lohse [2003] QCA 199 Mallott v Wilson [1903] 2 Ch 494 Marshin Holdings Pty Ltd v Attorney-General of New South Wales [2013] NSWSC 326 Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 Rann v Hughes (1778) 7 Term Rep 350n; 101 ER 1014n Re Cranstoun [1949] 1 Ch 523 Re Hayes Settlement Trusts [1982] 1 WLR 202 Re Manisty's Settlement [1974] Ch 17 Re Paradise Motor Co Ltd [1968] 1 WLR 1125 Tantau v MacFarlane [2010] NSWSC 224 Townson v Tickell (1819) 3 B & Ald 31; 106 ER 575 Texts Cited: Crago, "Principles of Disclaimer of Gifts" (1999) 28 Western Australian Law Review 65 Hardingham & Baxt, Discretionary Trusts (2nd ed, 1984, Butterworths) Category: Principal judgment Parties: Smeaton Grange Holdings Pty Ltd (1st Plaintiff) Tri-City Smash Repairs Pty Ltd (2nd Plaintiff) Ifould Holdings Pty Ltd (3rd Plaintiff) Chief Commissioner of State Revenue (Defendant) Representation: Counsel: I Young (Plaintiffs) J Needham SC with S Kaur-Bains (Defendant)