Robin Shand (the Deceased) died in 2022, leaving four children. Under the deceased’s 2019 Will, Fiona Shand (the plaintiff) was appointed executrix. The Will provided for specific gifts, with the residue divided into testamentary trusts for each child and their family. The plaintiff’s family trust was entitled to 27.3% of the residue.
Background
A major estate asset was an unencumbered house in Bondi Junction(“the property”). In December 2022, the plaintiff, as executrix, lodged a transmission application and became the registered proprietor, appointing an agent to sell the property by auction. At the auction in October 2023, the plaintiff was the successful bidder and signed a contract for sale, in which she appeared as both the vendor (executrix) and the purchaser (in her personal capacity). The purchase price was $5,010,000, and the completion date was January 2024, with the plaintiff paying the full amount.
Transfer Duty
The dispute concerned the application of Chapter 2 of the Duties Act 1997 (NSW), which imposes duty on transfers as well as certain transactions involving dutiable property. The contract was not a transfer, but could fall under s 8(1)(b). The issue was whether the transaction amounted to:
- A surrender of interests in land (s 8(1)(b)(iii)), in which case duty would be assessed on 72.7% of the property (reflecting the interests of the other beneficiaries); or
- An agreement for sale/transfer or another transaction changing beneficial ownership (s 8(1)(b)(i) or (ix)), in which case duty would be payable on the value of the entire property.
The Office of State Revenue (OSR) assessed duty on the full purchase price. The plaintiff submitted that because her family was entitled to 27.3% of the residuary estate, duty should apply only to the remaining 72.7% of the property’s value.
The OSR submitted that the contract was an ‘agreement’ within the meaning of s 8(1)(b)(i) of the Duties Act 1997 (NSW), requiring showing that an ‘agreement’ under the Act bore a broader meaning than under the general law.
In the context of Australian duties legislation, the term “agreement” is generally understood in its ordinary legal sense of a binding contract: see, for example, MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125; [1975] HCA 55 at 144–145 (Jacobs J), 135 (Barwick CJ), and 136, 139–140 (Stephen J).
Self dealing Contract
The principle that a contract requires at least two parties is well established in contract law. It has long been recognised that one cannot enter into a contract with oneself: Williams v Scott [1900] AC 499 at 503; Denton v Donner (1856) 23 Beav 285 at 290.
This requirement of two parties in contract law may be contrasted with the rule against self-dealing in equity. As explained by Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106 at 241, that rule operates differently.
“The self-dealing rule is … that if a trustee sells the trust property to himself, the sale is voidable by any beneficiary ex debito justitiae, however fair the transaction. The fair-dealing rule is … that if a trustee purchases the beneficial interest of any of his beneficiaries, the transaction is not voidable ex debito justitiae, but can be set aside by the beneficiary unless the trustee can show that he has taken no advantage of his position and has made full disclosure to the beneficiary, and that the transaction is fair and honest.”
Shand v Chief Commissioner of State Revenue [2025] NSWSC 818 at 34-36
Following the High Court of Australia in Clay v Clay [2001] HCA 9; (2002) 202 CLR 410 at [51]-[52].
The tension between legal form and equitable principle lies at the heart of the self-dealing rule. On one hand, the common law insists that a person cannot contract with themselves — a matter of logic and legal identity. On the other hand, equity focuses on the fiduciary obligation of loyalty: a trustee must not place themselves in a position where their personal interest conflicts with their duty. Together, these ideas explain why self-dealing is not merely unwise, but legally impossible unless expressly authorised.
The cases reveal subtle but important distinctions. When Bryson JA in Minister Administering National Parks and Wildlife Act 1974 v Halloran[2004] NSWCA 118; described self-contracting as a “conceptual difficulty which cannot be resolved,” he was pointing to the problem of legal personality: a trustee, even when wearing two hats, remains the same juridical entity. No amount of drafting can create two separate persons where only one exists. By contrast, the occasional willingness of first-instance judges to allow trustees to contract in “different capacities” reflects an equitable impulse to accommodate commercial realities — especially in modern trust structures involving managed investment schemes or corporate trustees administering multiple trusts.
Yet these pragmatic exceptions are fragile. As the High Court confirmed in Boensch v Pascoe(2019) 268 CLR 593; [2019] HCA 49 at [99], an agreement made “with oneself” is “of itself inoperative.” That statement leaves little room for judicial creativity. It reinforces that the integrity of fiduciary administration depends on structural separation — if not between the trustee and the trust, then at least between the parties controlling each.
Section 24 of the Conveyancing Act 1919 (NSW) does not soften this result. While it allows a person to assure property to themselves — enabling, for example, the vesting of legal title by deed without the fiction of a separate grantee — it does not permit a person to enter a contract with themselves. Equity distinguishes between the mechanical act of transfer and the formation of the agreement that precedes it. The latter still requires two distinct legal actors.
In practice, the lesson is clear: authority must precede action. Where trustees wish to acquire trust property, the safest path remains one expressly sanctioned by the trust instrument, by the fully informed consent of all beneficiaries, or by the Court. Anything less risks falling foul of the self-dealing rule — a rule that, even after centuries of refinement, still reflects one of equity’s simplest insights: no one can serve two masters, least of all themselves.
Statutory Interpretation
Hmelnitsky J rejected the submission that an “agreement” in the Act should extend to such arrangements, finding no indication in the statutory text to displace the general law rule. Such “agreements” are legally ineffective, and there was no basis for construing the Act to include them. Accordingly, the supposed contract between the plaintiff as vendor and purchaser was “not an agreement for the sale or transfer of dutiable property” within s 8(1)(b)(i).
The plaintiff further submitted that her objection should succeed because the residuary beneficiaries” had an ‘interest’ in land” within s 8(1)(b)(iii), and that by entering into the contract, the other residuary beneficiaries surrendered their interests. Hmelnitsky J rejected this, reaffirming the long-established rule that a residuary beneficiary of an unadministered estate has no proprietary interest in any specific asset of the estate, as seen in Lord Sudeley v A-G [1897] AC 11 (‘Lord Sudeley’s case’) at 15 (Lord Halsbury LC); Dr Barnardo’s Homes v Special Income Tax Commissioners [1921] 2 AC 1 (‘Barnado’s Homes’) at 10 (Viscount Cave).
Hmelnitsky J held that the term “interest” in s 8(1)(b)(iii) of the Duties Act 1997 (NSW) encompasses at least, but is not confined to, the concept of a general law notion of beneficial ownership in land. The Court held that the expression in s 8(1)(b)(iii) aligns with its use in s 147, extending to concepts of beneficial ownership in land but not to the indeterminate interest of a residuary beneficiary before the residue is ascertained. On this basis, the plaintiff’s claim under s 8(1)(b)(iii) failed. As the transaction was otherwise caught by s 8(1)(b)(ix), the duty assessment stood, and the summons was dismissed. ([102-103])
The Court rejected the attempt to interpret s 8 of the Duties Act 1997 (NSW) by reference to s 63(2), explaining that the two provisions operate in different contexts. Section 8 deals with transfers and transactions generally, while s 63 specifically regulates dealings with dutiable property within deceased estates.
Section 63(1) concerns transfers or appropriations made to satisfy a beneficiary’s entitlement under a Will. Section 63(2) applies where a legal personal representative transfers property to a beneficiary following an agreement to vary the trusts, reducing the duty only to the extent the property’s dutiable value is referable to the beneficiary’s pre-existing entitlement. This reduction applies only when making the transfer to satisfy that entitlement.
The Court disagreed with the plaintiff’s argument that s 63(2) ensures duty is only payable on the excess value above a beneficiary’s entitlement. The key omission in that argument was the requirement that the value must be referable to the entitlement — meaning that the legal personal representative transfers the property in full or partial satisfaction of it. Where, as in this case, the beneficiary’s entitlement remains intact and unaffected by the transfer, the transaction cannot be said to fall within s 63(2).
Accordingly, the plaintiff’s purchase of the property was not a transaction of the kind contemplated by s 63(2). The plaintiff didn’t acquire it in satisfaction of her testamentary entitlement; instead, her entitlement under the Will and the Robin Shand No 2 Testamentary Trust remained unchanged. The only consequence was that the estate now held cash instead of the property. To treat the transfer as if it were in satisfaction of her entitlement would contradict the policy underlying s 63(2).
Hmelnitsky J held that the plaintiff’s acquisition of the Property was not in satisfaction of her entitlement as a residuary beneficiary but arose solely from her authority as Executrix under the Will, which affected all beneficiaries equally. If the transaction involved a “surrender” of interests, those interests would have been surrendered by all beneficiaries, including the plaintiff. However, the Court noted that even if s 8(1)(b)(iii) were engaged, the “interests surrendered” would be the plaintiff’s own, not just those of her siblings. However, this point was unnecessary to decide. ([105]-[106]). The result was that the whole duty applied to the transaction under s 8(1)(b)(ix).
Conclusion
Shand v Chief Commissioner of State Revenue (NSW) [2025] NSWSC 818 provides essential guidance for executors, beneficiaries, and tax advisers.
First, express authorisation for executors wishing to purchase estate assets —either under the Will (clause 15.2(r)(i)(A)) requires beneficiaries’ consent— otherwise a legal personal representative risks breaching fiduciary duties (at [18], [105]). Similarly the Court’s refusal to recognise a “binding agreement” highlights the dangers of informal arrangements that may trigger unintended tax liabilities.
Second, the scope of s 63(2) Duties Act 1997 (NSW) is confined to transfers made to a beneficiary’s entitlement under a trust variation agreement (at [84]–[87]); it does not apply where the legal personal representative purchases estate assets independently of their residuary entitlement, as occurred in this matter.
Third, the catch-all provision in s 8(1)(b)(ix) captures novel or complex transactions that alter beneficial ownership, ensuring they remain dutiable (at [103]; Baxter v Chief Commissioner of State Revenue [2024] NSWCATAD 153, [53]).
Practically, Shand v Chief Commissioner of State Revenue (NSW) illustrates the need for careful tax planning in estate administration. Executors contemplating the acquisition of estate property should obtain expert advice and formal consent or approval in advance, as the OSR may assess stamp duty on the full value of the property without exception.