Van Dairy emails, letters read out in court over $20m tax bill appeal
Lawyers for the State’s Revenue Office set their case on Friday, reading to a Hobart court Van Dairy company letters and emails. What the letters said about the company’s business plans >
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Chinese company Van Dairy, headed by Xianfeng Lu, had its director’s emails read out in court as part of its appeal over a $20m stamp duty bill.
Mr Lu, as well as Van Dairy and Ningbo Kaixin Investment Co, are in court appealing a decision by the State Revenue Commissioner that Mr Lu pays a further $20m stamp duty as a result of the sale of the Woolnorth dairy in 2016, for $280m.
Van Dairy, formerly known as Moon Lake Investments, paid around $8m in duty at the time of purchase and was at that time owned wholly by Mr Lu.
The State Revenue Office previously argued in court last year that shares transferred within Moon Lake constituted a change in ownership of the dairy, requiring a further payment of royalties.
Mr Lu’s lawyer Anthony Young KC argued in the Supreme Court of Tasmania on Thursday that it was incorrect for the State Revenue Office to have made this finding.
The State Revenue Commissioner’s lawyer Phillip Jackson SC responded on Friday in front of Acting Justice Shane Marshall that advice from Moon Lake’s lawyers and internal emails showed the “beginning of the trail” of these share transfers.
Four days after the sale and purchase agreement was executed to Moon Lake in 2016, the company’s lawyers shared advice for Moon Lake directors about whether changes for Moon Lake shareholders between the signing of the sale agreement for the Woolnorth dairy and its completion would result in “duty consequences”.
Mr Jackson said the advice by lawyers that it would not have stamp duty consequences was correct “but didn’t address the effects of the changes on landholders”.
Another paragraph from Moon Lake’s lawyers said Moon Lake could transfer shares without stamp duty consequences until the property is transferred to its name, which Mr Jackson said was incorrect.
“In all respect to the person who wrote this report, the advice they gave was wrong and is evidence of why the share transfers proceeded when they did,” he said.
Another email between a company partner and Moon Lake’s co-director Simon Lyons, stating that one of two directors of the company knew nothing about a shareholder transfer.
The partner stated the transfer came from “advice from the China end that Mr Lu’s shareholding should be interposed with Chinese entities”.
A letter attached stated that two share transfers were to occur to “put distance” between Mr Lu from the ultimate ownership of the properties in Moon Lake.
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Originally published as Van Dairy emails, letters read out in court over $20m tax bill appeal
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