COMMISSIONER OF STATE REVENUE (VIC) v KONANN PTY LTD & ANOR

Judges: Hansen JA
Tate JA

Robson AJA

Court:
Supreme Court of Victoria, Court of Appeal

MEDIA NEUTRAL CITATION: [2015] VSCA 278

Judgment date: 16 October 2015

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Robson AJA

128. I have had the benefit of reading in draft the judgment of Hansen JA. I agree with his Honour ' s reasons and the orders that he proposes.

129. I wish to add the following brief comments on the facts that establish that at all times the beneficial interest of Tulliallan was held for Annacott Pty Ltd (Annacott) under the terms of an express trust.

130. Although the parties were prepared to proceed before Croft J on the basis that the land was held on a resulting trust for Annacott, the evidence establishes that at all material times prior to and after the transfer to Konann Pty Ltd by Peter and Garry White, Tulliallan was held on an express trust for Annacott and the transfer of Tulliallan from Peter and Garry White to Konann was intended at all times to be merely a change of trustee.

131. The Commissioner objected to the tender before the Tribunal of the declaration of the express trust on the hearing of Konann ' s objection to the Commissioner ' s assessments. Nevertheless, in my opinion, the Commissioner was duty bound to ensure that any assessment he issued was complete and accurate. In my opinion, the Commissioner should have taken into account that Konann took the transfer of the land subject to the express trust in favour of Annacott.

132. I turn briefly to the facts. The Peter White Family Trust (PWFT) was established by a trust deed dated 3 October 1973. The trustees were Peter and Garry White.

133. In May 1994, Annacott was incorporated. Shortly after, on 30 May 1994, Annacott was acquired by Peter White to act as a corporate beneficiary of the PWFT.

134. On 1 August 1994, Peter White signed a contract of sale by which Tulliallan was purchased by ' Peter White and/or nominee ' for the price of $ 3,000,000.

135. At that time, Mr White used Mr Donaldson of Arthur Robinson & Hedderwicks (AR & H) as the solicitor for conveyancing matters. Mr White used as his accountants Mann Judd & Associates (Mann Judd) and would also use solicitors recommended by them for commercial matters.

136. Shortly before deciding to buy Tulliallan, Mr White sought advice from his accountants, Mann Judd, as to whether a corporation could be the nominated purchaser to Tulliallan. As mentioned at [ 133 ] above, Mr White had already acquired Annacott, intending it to be a corporate beneficiary of the PWFT.

137. On instructions of Mr White, Mann Judd retained Maddock Lonie & Chisholm (MLC) to advise as to the requirements of having a corporation qualify as a corporate beneficiary of the PWFT. On 5 September 1994, Mr Merralls QC was instructed by MLC to advise on the ability of a corporation to become a corporate beneficiary of the PWFT.

138. On 5 September 1994, however, before receiving the advice from Mann Judd in relation to the nomination of a corporate beneficiary of the PWFT, Mr White sent a handwritten note to Mr Donaldson, containing details in relation to the purchase of Tulliallan stating:

' Confirming purchaser Peter White Family Trust '

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ATC 17699

' Confirming trustees PE White and GR White '

139. On 13 September 1994, Mr White received advice from Mr Lean of Mann Judd of the advice of Mr Merralls QC given in conference. In substance, Mr Merralls advised that a corporation could be a beneficiary of the PWFT to whom income of the trust could be distributed so long as all the shares in the corporation were held by on or on behalf of primary beneficiaries of the PWFT.

140. Following the advice of Mr Merralls QC, Mr White says that Mr Lean of Mann Judd advised that a declaration of trust between Annacott and himself and his brother Garry should be executed under which Mr White and his brother declared that they would hold Tulliallan on behalf of Annacott.

141. The Trust deed was prepared and executed by the parties on 14 September 1994. Mr White deposed in an affidavit of 8 December 2011 that his intention on and from 14 September 1994 was that Tulliallan would be purchased by Peter White and Garry White as trustees for Annacott rather than PWFT.

142. On or about 8 September 1994, Mr Donaldson had prepared a Sale of Real Estate Nomination form under which Mr White as initial purchaser nominated himself and his brother as purchasers of the Tulliallan property. The Nomination did not state expressly the capacity in which Peter and Garry White were nominated as purchasers. Subsequently, by a letter dated 28 September 1994, Mr Donaldson noted that Mr White had not returned the nomination form and asked him to duly execute it.

143. Mr White deposes that he had no recollection of having forwarded the Annacott Declaration of Trust to Mr Donaldson, which he said was an oversight on his behalf. On 26 September 1994, Mr White executed the nomination form and supporting declaration in the presence of Mr Alan Forster, who was then with AR & H, and who acted for Konann on the objection and appeal to Croft J.

144. Mr White deposes that the declaration was entirely consistent with the Annacott Declaration of Trust executed two weeks earlier but it was unfortunately also consistent with his note to Mr Donaldson of 5 September 1994, referred to in paragraph [ 138 ] above.

145. Mr White deposes that the mistake that he made in September 1994 in relation to the ' nomination ' of Garry and himself as purchasers in their capacity as trustees for Annacott, was that he did not inform Mr Donaldson at that time of the advice provided by Mr Lean on 13 September 1994 or of the Annacott Declaration of Trust executed on 14 September 1994. Mr White says that it was an oversight on his part, which has contributed to the later confusion as to who was the real purchaser of Tulliallan.

146. Settlement took place on 2 November 1994 and Peter and Garry White were registered as joint proprietors of the land. On 8 November 1994, Mr Donaldson wrote to Peter White confirming registration of ' the transfer by which you and Garry as trustees of the PE White Family Trust have purchased " Tulliallan " . '

147. Mr White deposed that from September 1994 to 2004, the affairs of Annacott and the affairs of the PWFT were conducted on the basis that Annacott was a corporate beneficiary of the PWFT and that Annacott was the beneficial owner of Tulliallan.

148. In 2004, Peter and Garry White appointed Konann as trustee for the express purpose of it holding the land on trust for Annacott. As explained in the judgment of Hansen JA there was a mistaken view by Mr Donaldson that the land was an asset of the PWFT whereas in fact it was held on trust by Peter and Garry White under a separate express trust in favour of Annacott.

149. The mistake of Mr Donaldson was merely as to the identity of the trust under which the land was held. There was no mistake by the previous trustees Peter and Garry White (or Konann) that Konann would thereafter hold the land on trust for the beneficial owner which was and always had been, Annacott.