This final part of our 3 part series on the  Lotus Oaks Pty Ltd as trustee for the Bozzo Family Trust v Commissioner of State Revenue [2021] VSC 388 decision looks at the substantially full-time engagement requirement in section 67 of the Act.

Part 1 of our series examined the principal business is farming requirement while Part 2 considered what constitutes the primary production ‘of the type’ requirement. 

The background facts of this decision are set out in Part 1 of this series.

Substantially full-time engagement requirement

The Court considered whether Mario satisfied the requirement in the former section 67 of the Act which required him, being one of the beneficiaries of the Bozzo FT, to be normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the Wyndham Vale property.

The Court looked at the evidence relating to Mario’s involvement as a director of about 20 private companies as well as with numerous Bozzo Group entities.

In doing so, the Court noted that Mario appeared to not have kept a diary and there was no daily or digital record of activities which appears to exist.

Similarly, the Court noted that the Bozzo Group’s board papers for the monthly directors meetings over the Relevant Period had not been produced, and as such it was not possible to gain any real insight as to the main issues which would have attracted Marios’ attention and involvement over the Relevant Period.

A crucial factor that the Court considered in detail in determining whether the substantially full-time engagement requirement was met was the large-scale property development project involving many millions of dollars being undertaken on the Wyndham Vale property.

The Court found that given Mario’s various directorships, his other responsibilities, the likely significant time he would have been involved in the Jubilee Project and the various types of farming businesses he was involved in, the dearth of evidence showing Marios’ time involvement in the various businesses meant that the Bozzo FT had not satisfied its onus that Mario was substantially engaged in a full-time capacity in the business of the cultivation of crops for sale.

This aspect of the decision is instructive as it highlights that to successfully establish that an individual is substantially engaged in a full-time capacity, it is preferable that there be empirical evidence such as diary entries or board papers to support such a position, particularly when the said individual is involved in various directorships and business pursuits other than farming.

To discuss or for further information please contact:

Phil Broderick
Principal
M +61 419 512 801 | T +61 3 9611 0163
E pbroderick@sladen.com.au