Ngurratjuta Pmara Ntjara Aboriginal Corporation v Commissioner for Taxes
[2000] NTSC 17
PARTIES:
NGURRATJUTA PMARA NTJARA ABORIGINAL CORPORATION
and
COMMISSIONER OF TAXES
TITLE OF COURT: SUPREME COURT OF THE NORTHERN
TERRITORY
JURISDICTION: SUPREME COURT OF THE NORTHERN TERRITORY
EXERCISING TERRITORY JURISDICTION
JUDGMENT OF: RILEY J
FILE NOS 9901699 (02/1999)
Judgment category classification: C
Judgment ID Number: ril0008
Number of pages: 14
DATE OF DECISION: 3 April 2000
#DATE 03:04:2000
Appearances
Counsel for the Appellant: C. McDonald QC
Solicitors for the Appellant: Bowden Collier &
Deane
Counsel for the Respondent: R. Webb
Solicitors for the Respondent: Povey Stirk
See paragraph 29.
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT ALICE SPRINGS
v Commissioner for Taxes [2000] NTSC 17
No 9901699 (02/1999)
BETWEEN:
NGURRATJUTA PMARA NTJARA ABORIGINAL CORPORATION
Appellant
AND:
COMMISSIONER OF TAXES
Respondent
CORAM: RILEY J
(Delivered 3 April 2000)
[1] In this matter the appellant appeals from a
decision of the Commissioner of Taxes made on 24 December 1998 whereby the
Commissioner assessed and imposed payroll tax upon the appellant in the sum of
$105,741.05. The grounds of appeal are set out in the Notice of Appeal dated
22 January 1999 and include the following principal grounds:
2. The Commissioner of Taxes erred in determining
that employees who were engaged in commercial activities designed to generate
funds to further the objects of the appellant did not thereby exclusively
engage in work of a public benevolent nature."
(2) On appeal - (a)
the objector shall be limited to the grounds stated in his objection; and (b)
the burden of proving that any assessment objected to is excessive lies on the
objector. (3) If the person's liability or assessment has been reduced on
objection, the reduced liability or assessment shall be the liability or
assessment appealed against."
(2) Alternatively, once it is demonstrated that the
Commissioner erred, the Court has the power to admit evidence limited to the
grounds relied upon below.
[6] In Kolotex Hosiery (Australia) Pty Ltd v
Federal Commissioner of Taxation (1974-1975) 132 CLR 535 Gibbs J said
at 568:
[7] See also Ballarat Brewing Co Ltd v
Commissioner of Payroll Tax (Vic) (1979) 10 ATR 228 at 235; John French
Pty Ltd v Commissioner of Payroll Tax (1984) 1 Qd R 125 at 128, 129 and
139; Federal Commissioner of Taxation v Brian Hatch Timber Co (Sales) Pty
Ltd (1971-1972) 128 CLR 28 at 57 and 59.
[8] As to the intention of the legislature in
relation to the Payroll Tax Act I note that it is for the taxpayer to
"satisfy the Commissioner" that its employee is "exclusively engaged" in a
certain class of work if the taxpayer is to bring itself within the ambit of
s 9(a) of the Act. If the decision of the Commissioner is to be
disputed then the dissatisfied person is required to lodge an objection in
writing "stating in detail the grounds on which he relies". If he remains
dissatisfied with the manner in which the Commissioner has dealt with the
objection then he has a right of appeal but that right of appeal is "limited to
the grounds stated in his objection". The scheme of the Act is to require the
taxpayer to place before the Commissioner all material upon which he seeks to
rely in order "to satisfy the Commissioner" of a particular matter. If he is
dissatisfied with the decision of the Commissioner he may object but he must
clearly identify any basis of objection at that time and do so in detail. The
Commissioner then considers those matters. Any further challenge is restricted
to the grounds already raised. The right of appeal and the scope of appeal are
intended to be narrowly focussed.
[9] It must be remembered that it is the
Commissioner, not the Court, who must be satisfied that the requirements of
s 9(a) have been met. It is the decision of the Commissioner that he is
not satisfied that is examined on appeal. The Court does not substitute its
view for that of the Commissioner. It will only interfere if the Commissioner
errs in the sense discussed by Dixon J in Avon Downs Pty Ltd v Commissioner
of Taxation (Cth) (supra at 360).
[10] I agree with Martin CJ that it is upon the basis
of the material before the Commissioner alone that the Court is to determine
whether or not the Commissioner erred in such a manner as to enable the Court
to set his decision aside and determine the question for itself. That
conclusion is consistent with the intention of the legislature as gleaned from
the legislation and further is consistent with authority addressing similar
provisions in other jurisdictions.
[11] Mr McDonald referred to the decisions of
Muirhead AJ in Meyering v Northern Territory of Australia (1987) 47 NTR
21 and O'Leary J in Rabuntja v Minister for Education (1983) 19 NTR 5.
Those cases are examples of the Court considering the intention of the
legislature in relation to specific legislative schemes which were quite
different from that applying in this case. In my opinion they do not detract
from the observations I have made in relation to this Act.
[12] The second matter raised by Mr McDonald was the
capacity of the Court to receive evidence once error on the part of the
Commissioner had been demonstrated. As is conceded by Mr McDonald, such
evidence would be restricted by s 35(2)(a) of the Act to evidence which
supports the grounds stated in the original objection.
[13] In his submissions Mr McDonald directed
attention to areas of the judgement of Martin CJ in which he claimed
his Honour erred, leading to the ultimate submission that I should not
follow the decision.
[14] It was submitted that his Honour was
incorrect in his observation that there is nothing in the Act to "prohibit
successive applications for exclusion". Mr McDonald submitted that there
was no mechanism whatsoever for further objections outside the 60-day limit
established by s 34(1) of the Act. That submission is correct insofar as it
goes. The right of a person to object to a decision, determination or
assessment made by the Commissioner is to be exercised "within 60 days after
service of notice of the decision, determination or assessment". The Act does
not contain any other method by which the particular decision of the
Commissioner may be challenged.
[15] However there is nothing to prevent the taxpayer
from putting a fresh proposal to the Commissioner dealing with the same issues
and providing such further information in relation thereto as the taxpayer
desires, and thereby requiring the Commissioner to make a further decision.
The rights created by Part VI of the Act can then be pursued once more.
[16] Mr McDonald also submits that the decision
of Martin CJ is inconsistent with a line of cases commencing with Avon
Downs Pty Ltd v Commissioner of Taxation (supra). He says that the effect
of these cases was to leave open the possibility of further evidence being
considered on the appeal once an error of the kind referred to by Dixon J
in Avon Downs Pty Ltd v Commissioner of Taxation (supra) had been
demonstrated. He submits that, despite this, his Honour "closed the door
entirely on the possibility of any new evidence on appeals under s 35". I
will deal with each of the cases referred to by Mr McDonald.
[17] As I have already observed, his Honour
adopted the approach of Dixon J in Avon Downs Pty Ltd v Commissioner of
Taxation (Cth) (supra) in relation to what is to be considered by
the Court on appeal and agreed this was limited to the material that was before
the Commissioner.
[18] In the Commissioner of Taxation v Brian Hatch
Timber Co (Sales) Pty Ltd (supra) the Court considered fresh evidence but
that occurred in special circumstances. In that case there was "very little
evidence" placed before the Court to identify the material before the
Commissioner when he made his decision. In those circumstances evidence was
admitted to permit the material to be identified. On appeal it was noted (per
Windeyer J at 57-58) that "it is not easy to see how that could be
established without evidence from the Commissioner himself of what material was
before him or perhaps from someone of his officers who had advised him in the
particular matter". That was a special case where it was necessary to get the
basic information before the Court and evidence was allowed for that purpose.
In the circumstances of the present matter and other appeals under the
Payroll Tax Act (NT), such a concern does not arise because the
material before the Commissioner and his reasons for decision do come before
this Court in the appeal process by force of the Supreme Court Rules.
[19] In Kolotex Hosiery Australia Pty Ltd v
Federal Commissioner of Taxation (supra) Gibbs J adopted the approach
of Dixon J in Avon Downs Pty Ltd v Commissioner of Taxation (Cth)
(supra) and then went on to say (at 568):
[22] In Ballarat Brewing v Commissioner of Payroll
Tax (Vic) (supra) Gray J considered the Victorian equivalent of the
Northern Territory legislation. His Honour held that the right of appeal
in that case was an appeal in the strict sense and limited to a consideration
of the material before the Commissioner. He went on to say (at 235):
[25] In John French Proprietary Limited v
Commissioner of Payroll Tax (1984) 1 Qd R 125, a decision of a Full Court
of the Supreme Court of Queensland, there was a difference of view expressed by
the members of the Court. McPherson J, with whom Campbell CJ agreed,
said (at 139):
[27] Having reviewed the cases relied upon by Mr
McDonald I agree that their effect is to leave open the issue of the
possibility of further evidence being considered on an appeal, once an error of
the kind referred to by Dixon J in Avon Downs Pty Ltd v Commissioner of
Taxation (Cth) (supra) has been demonstrated. However it does not follow
that Martin CJ was wrong in ruling that further evidence should not be
received. Of the cases referred to the only case which specifically permitted
the calling of fresh evidence in circumstances similar to those applicable in
this case was Kolotex Hosiery (Australia) Pty Ltd v Federal
Commissioner of Taxation (supra) and there the matter was not argued.
[28] Miss Webb for the respondent referred me to
authorities dealing with judicial comity and in particular to La Macchia v
Minister for Primary Industries and Energy (1992) 110 ALR 201 at 204 per
Burchett J; Attorney-General v Wurrabadalumba (1990) 74 NTR 5 at 8
per Asche CJ; and Commonwealth v Skonis Housing and Development (NT)
(1993) NTSC 38 per Mildren J at para 7. It is clear that I
should not depart from the decision in Crusher Holdings Pty Ltd v
Commissioner of Taxes (NT) (supra) unless I am convinced that the
decision was clearly wrong.
[29] As Martin CJ observed the matter is not the
subject of binding authority. The cases in which the issue has been addressed
in other jurisdictions do not provide clear guidance. Whilst competing views
may be open as to how a court should proceed after it has been demonstrated
that the Commissioner has erred, the observations of Martin CJ have force in
relation to the Northern Territory legislation. I am not satisfied the
decision is wrong. In this matter I propose to proceed in a manner consistent
with the rulings of Martin CJ in Crusher Holdings Pty Ltd v
Commissioner of Taxes (NT) (supra).
"1. The Commissioner of Taxes erred in determining that employees
of the appellant who were engaged in activities relating to "accounts and
management" were not (during the relevant period) exclusively engaged in works
of a public benevolent nature within the meaning of s 9(a) of the
Payroll Tax Act.
[2]
The right of appeal under the Payroll Tax Act is to be
found in Part VI of the Act. Under the Act a matter such as this commences
with a claim by a taxpayer to be treated in a certain way by the Commissioner,
eg as a public benevolent institution, for the purposes of the Act. Section 34
then permits such a person, who is dissatisfied with any decision,
determination or assessment made by the Commissioner, to lodge with the
Commissioner an objection in writing "stating in detail" the grounds upon which
he relies. The Commissioner is obliged to consider the objection and may
either disallow it or allow it, wholly or in part. The Commissioner is
required to serve on the objector written notice of his decision on the
objection. Section 35 then allows a right of appeal from the decision of
the Commissioner. That section is in the following terms:"(1) A person who is dissatisfied with a decision of the
Commissioner on an objection made by that person may, within 30 days after
service on him of notice of that decision or within such further time as the
Commissioner may allow, appeal to the Supreme Court.
[3] The
nature of the appeal provided by s 35 and the question whether the Court
should receive and consider evidence additional to that which was before the
Commissioner at the time he made his decision, was discussed by Martin CJ
in Crusher Holdings Pty Ltd v Commissioner of Taxes (NT) (1993) 117 FLR
485. His Honour made the following observations at p494:"There is no authority binding on this Court regarding the receipt
of evidence on this type of appeal, other than that prescribed by the Rules.
It is upon the basis of the material before the Commissioner alone that the
Court is to determine whether or not the Commissioner erred in such a manner as
to enable the Court to set his decision aside and determine the question for
itself. There is no warrant for receiving evidence beyond that. It is up to
the taxpayer to satisfy the Commissioner on the material available to the
Commissioner, and, in the event that an error is found in his reasons, giving
rise to a review of the material by the Court, that should be no opportunity to
enhance the submission or introduce any new basis for it. Taxpayers ought to
be bound by their submissions to the Commissioner. After all, the taxpayer is
in possession of all the relevant facts. There is nothing to prohibit
successive applications for exclusion, even in relation to the same period of
time if it was thought that there was material omitted from a submission which
on reflection should have been included, or omitted by oversight. Accordingly,
if the Court finds a relevant error on the part of the Commissioner, it will
review the original material for itself and determine the question upon that
material alone."
[4] Mr McDonald QC, who
appears on behalf of the appellant, submits that Crusher Holdings Pty Ltd v
Commissioner of Taxes (NT) (supra) was wrongly decided and that I ought not
to follow it. He submitted that:(1) Section 35 of the Act permits the adduction of evidence
provided such evidence is limited to the grounds relied upon before the
respondent below;
[5] I deal
with each of those submissions in turn. In concluding that the Court is to
determine whether or not the Commissioner erred by reference only to the
material before the Commissioner, Martin CJ made reference to Builders'
Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616
and in particular to the judgment of Mason J at 621. Martin CJ noted
that, in determining the nature of an appeal, "in the end result it all depends
upon the intention of the legislature to be gleaned from the legislation".
This is clearly correct. He then reviewed the relevant authorities dealing with
similar provisions in other jurisdictions. These authorities reveal a
consistency of approach. For example, reference was made to Avon Downs Pty
Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353. That case concerned
an appeal from a decision of the Commissioner to a court under the Income
Tax Assessment Act. In that case Dixon J made it clear (at p360) that
the function of the court on appeal was to consider the conclusion of the
Commissioner on the basis of "the material that was before him". "It seems that a court in deciding whether some ground has appeared
to justify a review of the Commissioner's conclusion that he is not satisfied
should consider the question on the basis of the material which was then before
the Commissioner even though further material is before the
Court."
Stephen J expressed similar views at 578."However, it would appear to me that once it is decided that the
conclusion of the Commissioner should be disturbed, for example, on the ground
that it was based on error, it is right for the Court to reach its final
conclusion as to whether or not the Commissioner ought to be satisfied by
reference to all the material before the Court, because if the matter were
referred back to the Commissioner to reconsider the question he would obviously
be entitled and bound to consider all the information then
available."
[20] Similarly,
Stephen J said (at 578): "... but once it is established that the Commissioner has, in this
case through error of law, failed properly to perform his statutory function
the Court will then determine what state of mind concerning the matters in
s 80A(1) and s 80C(1) will amount to a discharge of that function and
will do so having regard to the facts then before it, viewed in the light of
what the Court regards as the true effect of the
legislation."
[21] In that case both
parties submitted that once an error had been found the appeal should be
decided by reference to all the material before the Court. It seems the issue
was not the subject of argument."It may be that in cases where error on the part of the
Commissioner can be shown to have occurred, fresh evidence can be admitted so
the Commissioner can deal with the matter upon amplified evidence when it is
sent back to him. Problems of this sort may arise in cases where it is not
clear upon what evidentiary material the Commissioner acted: see Federal
Commissioner of Taxation v Bryan Hatch Timber Co or where it can be seen
that, through error of law, the Commissioner has failed to perform his
statutory function: see Kolotex Hosiery (Aust) Pty Ltd v Federal
Commissioner of Taxation".
[23] He
concluded (at 236) that:"I am of opinion that the evidence led upon this appeal can only be
looked at (if at all) if it can be shown that the Commissioner's finding
involves a miscarriage of judgment."
[24]
The views expressed by Gray J are, at least, equivocal.
His Honour was obviously in some doubt as to the position regarding
evidence led on appeal but he did not have to address the issue as he was not
satisfied that there was error in the Commissioner's findings."Once the requisite error is by this means demonstrated or
demonstrable it no doubt then becomes appropriate to permit evidence to be
adduced, which on the authority of Cannan & Peterson v Commissioner of
Payroll Tax (1975) Qd R 177 in Queensland may ordinarily include oral
evidence."
[26] A reference to Cannan
& Peterson v Commissioner of Payroll Tax reveals that Andrews J
there discussed how evidence should be presented to the Court on appeal. He
concluded that in the circumstances there applying this should be done orally.
He did not address the question of whether such evidence should be admitted.
It seems the matter was not argued or considered.