By Barry Diamond
Senior Fellow in the Melbourne Law Masters and PwC Partner
When a partner ‘confirms’ she holds land on trust for other partners upon dissolution of the partnership, is this a confirmation of a pre-existing relationship, or a new trust for the purposes of stamp duty?
Commissioner of State Revenue v Rojoda Pty Ltd  HCA 7 arose when a registered proprietor of land in Western Australia and a partner in a partnership, ‘confirmed’ that she held the land on trust for the partners in their respective shares following dissolution of the partnership. If the ‘confirmation’ was a declaration of new trust for the partners, duty was chargeable under the Duties Act 2008 (WA). However, if it was merely an acknowledgement of the same pre-existing trust relationship, no duty was chargeable. So, what was the legal nature of the pre-existing relationship between the partners? Did that differ to the relationship following the ‘confirmation’? Resolution of this question meant identifying the legal nature of the relationship between the partners and particularly the nature of a partnership interest.
The five-member High Court was divided 4:1. The majority (Bell, Keane, Nettle, Edelman JJ jointly) ruled in favour of the Commissioner of State Revenue that a new trust was created. Gageler J dissented and held that it was simply a confirmation of a pre-existing relationship. The respective judgments enlighten us on the different perspectives of the nature of a partnership interest, and I have considered both. There are other issues raised in the judgment, but I have not sought to discuss them here.