A J Holdings (NSW) Pty Ltd v Chief Commissioner of State Revenue

Questions for determination

1. The Appeal Panel's order remitting the case to the Tribunal reads: 3) Questions of whether Appellants liable under s 6(3)(b) [of the GMT Act] and, if so, whether appropriate to apportion liability remitted to Tribunal similarly constituted for determination, with the hearing of further evidence on the questions.
2. Accordingly, the Questions for determination are- Question 1: whether Appellants/Applicants are liable under s 6(3)(b) [of the GMT Act] and, if so Question 2: whether appropriate to apportion liability
3. The following extract from the Appeal Panel's Reasons provide context for the Questions- The Appeal [2] In short, liability for the tax is imposed on the person who is the hotelier, or interested in the hotel business, on the day a quarterly instalment is due. The primary question for the Appeal Panel is whether the due date is the last day of the quarter, or the 21st day after the end of the quarter (the 21st day). If the [Applicants] were the hoteliers at the relevant time, there is a subsidiary issue as to whether they were entitled to apportionment of the tax; and if they were not hoteliers at the relevant time, the subsidiary issue is whether they were nevertheless liable to pay the tax as persons interested in the hotel business, on that date. [3] There is also a jurisdictional issue: whether the Decisions are decisions to which the [Applicants] had objection rights. … Summary of legislation [10] … (references are to the GMT Act unless otherwise specified). Tax is "payable", by the hotelier, on profits from gaming machines (ss 6(1), (2)) within 21 days after the end of each quarter (s 7(1), (2)). In the case of hoteliers, the person liable for the quarterly tax instalment is the person who is the hotelier at the time the instalment is "due" (s 7(4)). In the event of a tax default, the hotelier and any person directly interested in the hotel business or profits at the time it became due, are jointly and severally liable to pay the amount concerned (s 6(3)). [11] Pursuant to s 8, hoteliers are required (if notice is published in the Gazette) to lodge a return with the CMS licensee (CMS means centralised monitoring system and a CMS licence is granted pursuant to the Gaming Machines Act 2001 (NSW) [GMT Act] Part 9 (the CMS licensee)). On receipt of the return, the CMS licensee must calculate the amount of each quarterly tax instalment payable and advise the Respondent [the Chief Commissioner] (s 9(1)) and the hotelier. In certain cases, the CMS licensee may recalculate the amount payable. The Respondent is to assess or reassess according to the calculations made under s 9 (s 9(3)). … [15] …. Hotelier is defined in the GMT Act (s 3) to have the same meaning as in the Liquor Act 2007 (NSW) (the Liquor Act). The Liquor Act (at s 4) defines hotelier to be the holder of a hotel licence. Licence is defined to mean a licence under the Liquor Act and licensee means the holder of a licence. … [19] … the First Instance Decision was premised on the basis that it was agreed that the [Applicants] were hoteliers on the 21st day, but not at the end of the quarter. Contrary to what is set out at [3] of the First Instance Decision, the [Applicants] contend that they did not begin to trade from the premises, at any time. The [Applicants] own the freehold, but contend that the business operator is AJS Hotel Management Pty Ltd and not, as set out at [5], AJ Holdings Pty Limited. The Respondent contends that this is of no moment; because of the operation of s 61 of the Liquor Act, the [Applicants] are the deemed licence holders. …. [20] At first instance, the primary issue was whether the tax liability arose at the end of the quarter or on the 21st day. The Tribunal concluded (at [53]) that the due date for liability was the 21st day; and on the basis that it was thought undisputed that the then [Applicants] were, on that date, the deemed licensees (at [5]), the Tribunal affirmed their liability to tax at [55]. … [92] Because we have determined that the liability falls due at the end of the quarter, it is of no moment that the [Applicants] may have been the deemed licensees on the 21st day. Accordingly, it is not necessary to answer the question whether the [Applicants] were deemed hoteliers on the 21st day. … Liability as an Interested Person [93] …, s 6(3)(b) of the GMT Act levies tax on persons interested in the hotel business at the relevant date (which we have concluded is the end of the quarter). [94] The Statutory Declarations that we have referred to above purport to disavow any interest of the [Applicants] in the hotel business during the relevant quarter. Whilst witnesses were not cross-examined this is an issue that was ventilated before the Tribunal, at first instance. The Respondent has asked that if it becomes relevant, it should be remitted to the Tribunal (as originally or similarly constituted) to determine. [95] As we have concluded that there is an error of law in the First Instance Decision and for reasons that this question may require further evidence and an opportunity for further submissions, we have decided to remit this question to the Tribunal similarly constituted: s 114(2)(b) of the [Administrative Decisions Tribunal Act 1997 (NSW)]. As there will be a need for evidence beyond that before the Tribunal originally constituted we do not see it necessary to remit to the original decision maker. … [99] … we have found that the Appellants were not the hoteliers at the due date. …. … [102] We did not receive submissions on whether, in the event it is ultimately held that the Appellants are liable to pay tax under s 6(3)(b) of the GMT Act, s 11(1)(a) could be engaged. It refers expressly to apportioning the tax between various hoteliers and not interested persons. It may be open to argument that read in context "hotelier" includes interested persons under s 6(3)(b). This question may never arise. Nevertheless, we leave the question of apportionment to any liability under s 6(3)(b) to the Tribunal on remittal. Conclusion [103] Primarily for the reason that the GMT Act uses, in ss 6 and 7, both the word "due" and the word "payable", we are satisfied that "due" must be given a meaning distinct from "payable". We are satisfied it has the meaning of simply owing. Liability to the tax arises, in the sense that it is owing but not yet payable, at the end of the quarter and it becomes payable thereafter. The last date for payment is the 21st day. As the parties approached the appeal on the basis that the [Applicants] were not liable under s 6(3)(a) of the GMT Act if we so concluded, we conclude that the Applicants were not liable under s 6(3)(a). Whether they were liable under s 6(3)(b) of the GMT Act and whether it is appropriate to apportion such liability, is a matter to be determined on remittal.

Legislation

1. Part 2 of the GMT Act, comprising ss 6 to 11, is headed, "Gaming machine tax". Sections 6, 7 and 11 of Pt 2 are as follows-

6 Tax on gaming machines (1) A tax is payable on profits from gaming machines kept in a hotel or on the premises of a registered club. (2) The tax is payable by the hotelier or registered club concerned. (3) In the event of a tax default (within the meaning of the Taxation Administration Act 1996) in respect of an amount of tax for which a hotelier is liable: (a) the hotelier, and (b) any person who, at the time the amount became due, was directly interested in the business, or the profits of the business, carried on under the hotel licence, are jointly and severally liable to pay the amount concerned, and section 45 of that Act applies accordingly. Note: Section 45 of the Taxation Administration Act 1996 provides for recovery of tax where two or more persons are jointly liable to pay it. (The expression "tax default" is defined in s 3 of the TAA as: "a failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay." In this instance, "tax default" refers to a tax default in respect of an amount of tax for which a hotelier is liable.)

7 Payment by instalments (1) For the purposes of this Act: (a) each tax year of a hotelier is divided into 4 periods of 3 months commencing on 1 July, 1 October, 1 January and 1 April, and (b) each tax year of a registered club is divided into 4 periods of 3 months commencing on 1 September, 1 December, 1 March and 1 June. (2) Quarterly instalments of tax are payable by a hotelier or registered club to the Chief Commissioner within 21 days after the end of each instalment period. (3) A hotelier or registered club must: (a) before the end of each such 21-day period, deposit the amount payable in a bank or financial institution, and (b) make such arrangements with the Chief Commissioner as enable the Chief Commissioner to access or appropriate that amount (such as by way of direct debit from the account of the hotelier or registered club concerned). Maximum penalty: 20 penalty units. (4) In the case of hoteliers, the liability to pay such an instalment lies with the hotelier who holds the relevant hotel licence at the time the instalment is due.

11 Apportionment of liability for tax in certain circumstances (1) The Chief Commissioner may, in such manner as the Chief Commissioner considers appropriate: (a) apportion the liability for tax as between hoteliers: (i) in any case where there has been a change in the ownership of a hotel licence, or (ii) in such other circumstances as the Chief Commissioner considers appropriate, and (b) apportion the liability for tax as between registered clubs: (i) in the event of an amalgamation of a registered club as referred to in the Registered Clubs Act 1976, or (ii) in such other circumstances as the Chief Commissioner considers appropriate. (2) Subsection (1)(a) does not affect the operation of section 7(4).

1. Sections 41 and 61 of the Liquor Act are as follows-

41 Statement as to interested parties (1) An application for a licence must be accompanied by a written statement, made by a person having knowledge of the facts, specifying: (a) that the person has made all reasonable inquiries to ascertain the information required to complete the statement, and (b) whether there are any persons (other than financial institutions) who will be interested in the business, or the profits of the business, carried on under the licence, and (c) if there are any such persons, their names and dates of birth and, in the case of a proprietary company, the names of the directors and shareholders. (2) For the purposes of subsection (1), a person is interested in the business, or the profits of the business, carried on under the licence if the person is entitled to receive: (a) any income derived from the business, or any other financial benefit or financial advantage from the carrying on of the business (whether the entitlement arises at law or in equity or otherwise), or (b) any rent, profit or other income in connection with the use or occupation of premises on which the business is to be carried on. (3) The regulations may provide exceptions to this section.

61 Application for transfer of licence on dispossession of licensee (1) This section applies in relation to a licence (other than a club licence) if: (a) the licensee is evicted from the licensed premises, or (b) the owner of the licensed premises comes into, or becomes entitled to, possession of the licensed premises to the exclusion of the licensee, or (c) the licensee is no longer employed by the owner of the business carried on under the licence ("the business owner"), or (d) the licensee is not complying, or does not have the capacity to comply, with the requirement under section 91 (1) to be responsible at all times for the personal supervision and management of the business of the licensed premises. (2) An application for a transfer of the licence may be made by the owner of the licensed premises or by the business owner. (3) The owner of the licensed premises who comes into, or is entitled to, possession of the premises, or the business owner (as the case requires), is taken to be the licensee of the premises until: (a) the day that is 28 days after this section becomes applicable, or (b) the day on which application is made under subsection (2), whichever first occurs. (4) If an application is made under subsection (2) not later than 28 days after this section becomes applicable, the applicant is, until the application is determined by the Authority, taken to be the licensee under the licence to which the application relates. (5) The Authority is not to determine an application for the transfer of a licence under this section unless: (a) the Authority is satisfied: (i) that notice of the application was given to the dispossessed licensee at least 3 clear days before the Authority determines the application (or that all reasonable steps necessary for giving notice were taken by or on behalf of the applicant and that failure to give notice was not due to any neglect or default of the applicant), and (ii) if so notified, that the dispossessed licensee has been given a reasonable opportunity to make submissions in relation to the application, and (b) the Authority is satisfied that any lessee of the licensed premises has been notified of the application for the transfer of the licence and been given a reasonable opportunity to make submissions in relation to the application, and (c) the Authority has taken any submissions made under this subsection into consideration. (5A) If: (a) an application under subsection (2) in respect of the licensed premises is not made within 28 days after this section becomes applicable, or (b) such an application is made but the transfer of the licence to the applicant is refused by the Authority, the licence is suspended until such time as the licence is transferred to another person. (6) Section 60 applies, with such modifications as are necessary, in relation to an application for the transfer of a licence under this section.

Material before the Tribunal

1. The documents filed in the Application pursuant to s 58 of the ADT Act, were admitted as an Exhibit at the hearing before the ADT. Those documents were at the remitter hearing tendered again and admitted as Ex R2.
2. Ex R1 comprise selected documents from Ex R2 said to be relevant to the current issues, and 4 additional documents, public records - company searches relating to the Applicants, a title search and a transfer of the hotel property. The Applicants' objection to the tender admitted as Ex R1, was disallowed.
3. The Applicants referred the Tribunal to blank liquor licence forms and certain other documents. Counsel for the Respondent demonstrated that, apart from the 4 additional documents mentioned in para 15, each of the other documents in Ex R1 was already part of Ex R2. Except as already noted, the Applicants adduced no evidence additional to that admitted in the earlier hearings.
4. The parties were not, in relation to the remitter hearing, required by formal directions to file written submissions or evidence on which they intended to rely. The Respondent filed written submissions on 17 October 2014 (RWS1). At the close of the hearing the Tribunal's decision was reserved. Thereafter the Applicants filed written submissions (AWS) and the Respondent filed further written submissions in response (RWS2). RWS1, AWS and RWS2 were taken into account in preparing these Reasons.

Question 1

1. For the reasons set forth below, Question 1 should be answered no.
2. The sole issue in Question 1 is whether the Applicants were, at the time the amount became due (viz., 31 December 2011), persons who were, within the meaning of s 6(3)(b) GMT Act, "directly interested in the business, or the profits of the business, carried on under the hotel licence".
3. The "business" was that carried on from the "Tommy's Tavern" hotel in Lismore. The Applicants are the registered proprietors of the freehold of the Lismore hotel property (Appeal Decision at [19] and [91]). The hotel was leased to Buckoe Pty Ltd pursuant to a lease dated 29 July 2011 (Ex R2, Tab 48) (the Lease). Buckoe operated the hotel business with its licensee, a Mr Parrott (Appeal Decision at [18]).
4. Liability for the tax is not imposed on the Applicants by s 6(3)(b) unless, as at 31 December 2011, the Applicants were "directly interested" in the Tommy's Tavern business or the profits of that business.
5. There does not appear to be any reported decision considering or commenting on the meaning, in s 6(3)(b), of "directly interested in the business, or the profits of the business, carried on under the hotel licence".
6. The Respondent submitted that the Applicants are persons who were directly interested in the business, or the profits of the business, carried on under the hotel licence as at 31 December 2011. The words "directly interested in the business, or the profits of the business, carried on under the hotel licence" in s 6(3)(b) "should", submits the Respondent, "be given the same meaning as similar words to be found in s 41(2) [of the Liquor Act 2007 (NSW) (Liquor Act)]" - particularly s 41(2)(b) (see RWS1 para 37-38, and 43). At RWS1 para 39 and 40, the Respondent says, 39 The GMTA relies on the [Liquor Act] for the meaning of "hotel", "hotel licence" and "hotelier": s.3 GMTA. Section 6(3) of the GMTA is concerned wíth a "hotelier" and the "hotel licence", and with persons "interested in the business, or the profits of the business, carried on under the hotel licence". ln these circumstances, it would be perverse to use the defined meaning of these words in s.41(2) [Liquor Act] in relation to an application for a licence, but not in relation to a liability to pay a tax arising from profits derived by the use of a licence. 40 Accordingly, persons interested in the business for the purposes of s.41(1) [Liquor Act] should be the same persons as those interested in the business for the purposes of s.6(3) GMTA. In each case, it is the same business and the same licence that is under consideration. Thus the meaning of "any person ... directly interested in the business, or the profits of the business, carried on under the hotel licence" in s.6(3)(b) GMTA should be determined by reference to the definition of similar words in s.41(2) [Liquor Act]. and, in further support of the submission (RWS1)- 44 Additionally, quite independent of s 41(2) [Liquor Act], by reason of the nature of the relationship between the Applicants and Buckoe under the written lease, the Applicants were "directly interested in the business or the profits of the business carried on under the hotel licence" within s6(3)(b) GMTA.

Liquor Act, s 41

1. Section 41(2) describes the circumstances in which a person is taken to be "interested in the business, or the profits of the business, carried on under the licence". ("Licence" here means a licence under the Liquor Act (see s 4(1)). Section 10 of the Liquor Act provides for the grant of 7 types of licence (including a hotel licence) each of which "authorises the licensee to sell or supply liquor in accordance with this Act and the conditions of the licence.")
2. GMT Act s 6(3)(b) stipulates that the person be "directly interested" in a business, or the profits thereof, carried on under a "hotel licence"; in s 41, the term "interested" is unqualified and so may comprehend both "directly interested" and "indirectly interested". Beyond that difference, a major logical difficulty about importing the s 41(2) definition into the GMT Act is that s 41(2) proscribes its operation with the limitation, "For the purposes of subsection (1)": R v Scott (1990) 20 NSWLR 72 at 75G.
3. The legislation that together comprise "the gaming and liquor legislation" for the purposes of the Gaming and Liquor Administration Act 2007 (NSW) includes the Liquor Act, the Gaming Machines Act 2001 (NSW) (GM Act), and Pt 4 and Schedule 1 only of the GMT Act: Gaming and Liquor Administration Act, s 4; and see note in s 1 of the Liquor Act and the GM Act. That is, Pt 2 of the GMT Act (which includes s 6) is not part of "the gaming and liquor legislation". (Pt 4 and Schedule 1 of the GMT Act deal with grants to registered clubs.)
4. Sugerman J in M Collins & Son Pty Ltd v Bankstown Municipal Council (1958) 3 LGRA 216 at 220.5 cast doubts on the use that could be made of the definition of a word or phrase in a statute in the interpretation of that word or phrase in a similar statute in which it was not defined. His Honour noted that a definition in one statute is not, generally speaking, of value in the interpretation of another, since the attachment of a meaning to a word in the interpretation clause of a statute very commonly involves some artificial extension or limitation of the natural meaning of the word for the purposes of that statute. And concluded, statutes definitions thus depend so much upon context that little, if any, benefit is to be derived in the consideration of the meaning of a word in one statute from its definition in another statute.
5. According to Mason J in Yager v R (1977) 139 CLR 28 at 43 "a statutory definition exists for the purposes of the particular statute in which it is contained, unless it appears in a statute expressed to have a more general application such as the Acts Interpretation Act …."
6. The predecessor of s 41 of the Liquor Act is s 38 of the Liquor Act 1982 (NSW). Section 41(2) re-enacts s 38(4) - the two provisions are in the same terms save that the former operates "For the purposes of subsection (1)" and the latter, "For the purposes of subsection (3)". Section 38(4) was inserted into the 1982 Act by the Liquor and Registered Clubs Legislation Amendment (Enforcement) Act 1996 (NSW) No 42, Sch 1[8].
7. If it were intended that a definition to the effect of s 41(2) should apply to s 6(3)(b) GMT Act, the legislature could easily have manifested that by a device such as including, in relation to s 6, a s 41(2) style provision, or expressly adopting the Liquor Act definition - GMT Act s 3(1) already enacts, "In this Act: … 'hotel', 'hotel licence' and 'hotelier' have the same meanings as in the Liquor Act 2007".
8. In my view s 41(2) cannot properly be taken to dictate, or, as being relevant to, the proper construction or operation of s 6(3)(b).
9. If a person is, within the meaning of s 41(2)(b), "entitled to receive … any rent, profit or other income ..." in connection with the use or occupation of premises, it does not necessarily follow that he is thereby, and for the purposes of s 6(3)(b) GMT Act, "directly interested in the business, or the profits of the business, carried on under the hotel licence" from those premises.

Directly interested …

1. I think the term "interested", in the context of s 6(3)(b), should be widely construed (cf Tasker v Fullwood [1977] 1 NSWLR 688 at 691D, 692C); the term encompasses interests of a pecuniary or proprietary nature (Ford v Andrews (1916) 21 CLR 317 at 331 per Isaacs J). However, the condition that must be satisfied is not, "interested", but rather, "directly interested".
2. Sections 24(1) and (1A) of the Liquor Act 1912 (NSW) is broadly comparable to s 41 of the Liquor Act: see Tasker v Fullwood [1977] 1 NSWLR 688 at 690 and, on appeal, [1978] 1 NSWLR 20 at 22. Section 24(1) required every person wishing to obtain a spirit merchant's license deliver a notice to the clerk of the Licensing Court. Section 24(1A)(a) required the notice be accompanied by a statement verified by a statutory declaration setting out the names of all persons "directly or indirectly interested" in the application, or in the business or the profits of the business to be carried on under the license applied for. Pursuant to s 24(1A)(c)- Where any person, other than the applicant, is interested in the business or the profits of the business as aforesaid, the applicant shall produce to the licensing court an agreement between such person and the applicant evidencing that - (i) the applicant shall have the full free and unfettered control of the conduct of the business of the licensed premises; and (ii) no payment or part payment shall be made to the applicant by way of commission or allowance from or upon the receipts of the business of the licensed premises for liquor sold or supplied.
3. In Tasker v Fullwood the applicant for the conditional spirit merchant's license was an employee of the lessee of the premises for which the license was sought. The business conducted by the lessee from the premises was a retail supermarket. Under the lease the lessor was entitled to a specified percentage of the turnover, or to a fixed per annum sum, whichever was the greater. The estimated annual turnover was greater than the fixed per annum sum. One question for the court was whether the lessor was a person directly or indirectly interested in the business or the profits of the business within the meaning of s 24(1A)(c). The Court of Appeal held that the lessor was a person interested in the business, or the profits of the business, of the lessee.
4. The court accepted that the "interest" described in the section was not limited to proprietary interests and embraced some pecuniary interests as well, and found that, "the financial interest both of a lessor receiving rent in the ordinary way, and of a lessor whose rent was proportionate to turnover" was excluded. The court concluded (as did the trial judge, Sheppard J) that the lessor, "whose entitlement to rent fluctuates with the receipts of the whole business, including the liquor section", had a requisite pecuniary or financial interest. See [1978] 1 NSWLR at 23E; [1977] 1 NSWLR at 693D-F.
5. Tasker v Fullwood supports the view that the entitlement of a lessor to receive rent "in the ordinary way", or a rent that is proportionate to turnover, is neither a direct nor an indirect interest in the lessee's business or profits. Although the Court of Appeal did not expressly identify whether particular interests were direct or indirect, Sheppard J did. As to his Honour's finding that the identified rent entitlement was a relevant pecuniary or financial interest, the Court of Appeal said, "the trial judge fell into no error" ([1978] 1 NSWLR at 23E). Sheppard J held (having regard to the entitlement to rent) that the lessor was a person "indirectly interested" in the business: [1977] 1 NSWLR at 693E. See also, Mitchforce v Industrial Relations Commission & Ors [2003] NSWCA 151 at [44] per Spigelman CJ.
6. Under the Lease, rent is a fixed sum, that is, the Applicant's entitlement to rent is to receive rent "in the ordinary way". If the entitlement to rent were an "interest" in the business or the profits of the business, it would at most, in my view, be an indirect interest.

The Lease

1. Provisions of the Lease summarized and referenced in RWS1 para 48 are said by the Repondent to give rise to a relationship between the Applicants and Buckoe whereby the Applicants were "directly interested in the business or the profits of the business carried on under the hotel licence". The summarized referenced provisions are as follows- (a) Buckoe acknowledges that the Lessor is the beneficial owner of the licence and that the Lessor is permitted by its nominee to exercise the liquor licence while Buckoe is the Lessee (clause 2.2); (b) The liquor licence shall not be exercised or dealt with by Buckoe or Mr Parrott (the Licensee) so that, inter alia, the licence is placed in jeopardy (clause 2.4(c)); (c) Buckoe is obliged to ensure that, on expiration or termination of the lease, the liquor licence and gaming machine entitlements are transferred to the Lessor's nominee (clause 2.6(a)); (d) Buckoe is prohibited and severely restricted, without the consent of the Lessor, from making applications in respect of the liquor licence and from dealing with the liquor licence (clauses 2.7, 2.7A and 2.78); (e) Buckoe can only use the property for the Permitted Use of a "Licensed Hotel with gambling" (clause 7.1, ltem 10) and this is an essential term of the lease (clause 18.6(iii)); (f) Buckoe must keep current all licences required for the above Permitted Use (clause 7.2); (g) the Lessor is entitled to enter and audit the licensed hotel premises and the liquor licence, including to inspect the books, sales figures and records required by the Liquor Act, the Gaming Machine Act and the GMTA (clause 7(4)(a); (h) Buckoe must submit without demand from the Lessor quarterly sales accounts, gaming machine turnover reports and monthly profit and loss statements disclosing monthly and year to date operating profit (clauses 7.4(e) and 7.4(f)); (i) Buckoe is not entitled to any payment or compensation for its business conducted from the premises on expiration or termination of the lease, and the business of Buckoe conducted from the premises forms part of the Lessor's reversionary interest in the premises (Division 10); (j) the Lessor is entitled on termination of the lease to purchase various items of Buckoe's property, including items in the premises or used in connection with the hotel business, stock in trade at the price applied by the lndependent Liquor Group Co-op and any new licence, permit, gaming entitlement or other authority in respect of the business or the premises (clause 24.1); (k) the Lessor is entitled to re-enter the premises and terminate the lease if, amongst other things, the liquor licence is placed at risk (clause 18.3(h)); (l) Buckoe irrevocably appoints the Lessor as its attorney to transfer the liquor licence and gaming machine entitlements and to make various applications in respect of them (clause 18.4(d)); and (m) a number of the clauses in respect of the liquor licence are essential terms of the lease (clause 18.6(a)(ii)).
2. The recited obligations are, of course, obligations pursuant to the Lease. Such obligations restrain the lessee departing from the common assumption upon which the lease was based; they go to maintaining the value of the asset to the owner, as a lessor of property, and to preserve the licence. Doubtless the maintenance of the licence is a crucial aspect of the capital value of the lessor's asset. A lease provides a part only of the means for the lessee to conduct its business, a business conducted on the lessee's own account. Such considerations are not in my view indicative of the lessor being "directly interested" in the lessee's business conducted from the leased premises.
3. It seems that provisions such as those recited by the Respondent are common in the liquor industry and go to preserving the licence - they do not confer on the lessor a direct interest in the business or the profits. See Jabetin Pty Ltd v Benwine Pty Ltd (2005) 63 NSWLR 602 per Mason P- [2] Jabetin Pty Ltd (Jabetin) is the registered proprietor of land at Muswellbrook on which stands the Prince of Wales Hotel (the Hotel). The lessee and holder of the hotelier's licence is Benwine Pty Ltd (Benwine). [3] The current lease, which expires on 27 September 2005, contains usual covenants for a hotel. These include covenants restraining the lessee from using the premises other than as a hotel (or similar use), requiring the lessee to keep the hotelier's licence current and in good standing, and appointing the lessor as the lessee's attorney for the purpose of applying to transfer the licence to the lessor or its nominee and/or applying for a new licence at the end of the tenancy. [4] These covenants recognise that the hotelier's licence is held by the lessee, Benwine, with the statutory incidents provided in the Liquor Act 1982. The covenants nevertheless recognise and protect the interests of the owner Jabetin. To adopt the words of Gavan Duffy CJ, Starke J and Dixon J in Slatter v Railway Commissioners (NSW) (1931) 45 CLR 68 at 78, 79: "These stipulations appear … to be intended to preserve the licence in the interests of the landlord, so that at the end of the term the premises would enjoy the advantage of being licensed …. The tenant remains entitled to exercise the licence for [its] own benefit so long as [it] is entitled to occupy the premises. But the licence is exercisable by its terms only in the premises which the tenant holds of the landlord and when [it] ceases to occupy the premises [it] can no longer exercise the licence. The contractual rights given to the landlord to ensure that the licence is not destroyed or removed to other premises, but is kept on foot and transferred to a person chosen by the landlord, do no more than safeguard the interests of the owner which [various sections of the Liquor Act] recognise." [5] One such section is s 42 that reinforces the contractual position of a lessor by deeming it to be the licensee immediately upon the dispossession of a licensee. [6] The covenants undoubtedly enhance the value of the owner's reversionary interest (see generally (1953) 53 SR (NSW) 407 at 410-411; 70 WN (NSW) Tooheys Ltd v Housing Commission of New South Wales 243 at 244-245). But they do not confer on the owner a beneficial interest in the licence (Slatter (at 79)). (See too Garcia v Masters [2005] NSWSC 480 at [56-57] per Einstein J.)
4. So far as I have been able to determine, nothing of what Mason P said in Jabetin v Benwine would be wholly inapplicable to the Liquor Act.
5. The fact of a licence's existence has been accepted as having a value to the owner's reversionary interest when that licence has been transferred to a lessee or a lessee's nominee (Sunset Investments Pty Ltd v Casino Liquor and Gaming Control Authority [2010] NSWSC 1411 at [23] per Davies J). This advantage of enhanced value is not an entitlement arising at law or equity or otherwise but rather one that would simply arise as a matter of fact as a consequence of the business activity under the licence (Jabetin v Benwine at [95] per Hodgson JA). Such an advantage is not, vis-à-vis the lessor, a direct interest in the business or the profits.
6. Preservation and enhancing of capital value of the reversionary interest and the licence arise to the Applicants from the Lease and the Liquor Act. Although rent may be paid from the profits of the subject business, there is no requirement that rent must be paid from the profits. The Lease per se, confers no entitlements in respect to the business on the Applicants. Any advantage to the Applicants from the Lease that may be described as an "interest" in the Tommy Tavern business or the profits of that business, cannot be and is not, in my view, a direct interest. Accordingly, the Applicants were not, as at 31 December 2011 and within the meaning of GMT Act s 6(3)(b), "directly interested" in that business or the profits of that business.

Question 2

1. Under the remitter, an answer to Question 2 is required only if Question 1 (whether Appellants/Applicants are liable under s 6(3)(b) [of the GMT Act]) is answered yes.
2. I concluded Question 1 should be answered no (see para [17] above). Accordingly, the tribunal is not required to answer Question 2.

Jurisdiction

1. At the commencement of the hearing Mr Sidgreaves, a director of A J Holdings (NSW) Pty Limited, asserted that the tribunal had no jurisdiction in the present matter. According to Mr Sidgreaves the Applicants were not appellants because they had not appealed against the Appeal Panel decision; and because there was no appeal there was no "decision" for review.
2. With respect, the submission is misconceived. The matter and Questions are before the tribunal pursuant to orders made under s 114(2) of the ADT Act. This proceeding is a proceeding in the Application and so within the tribunal's jurisdiction. See paras [1-6] above.

Conclusion

1. For the purposes of the Application, the Decisions are the decisions notified to the Applicants, by letters dated 4 and 1 May 2012 respectively, that the Applicants were jointly and severally liable to an amount for unpaid gaming machine tax for the quarterly instalment period 1 October 2011 to 31 December 2011. The Applicants are not liable under GMT Act s 6(3)(a) (Appeal Decision at [103]) or s 6(3)(b) (para 17 above).
2. The orders made in the First Instance Decision were- 1) The decision of the Chief Commissioner made on 1 May 2012, that Cumedo Pty Limited is liable to pay the quarterly instalment of gaming machine tax in respect of the period 1 October 2011 to 31 December 2011, is affirmed. 2) The decision of the Chief Commissioner made on 4 May 2012, that A J Holdings Pty Limited [sic] is liable to pay the quarterly instalment of gaming machine tax in respect of the period 1 October 2011 to 31 December 2011, is affirmed.
3. The Appeal Panel allowed the Applicants' appeal and further ordered the Orders of the First Instance Decision set aside. The Respondents seek the same orders made in the First Instance Decision (RWS1 at para 55).
4. The ADT Act s 114(2)(b) contemplated that on a remitter ordered by the Appeal Panel, the application for review will be dealt with. I have taken the Appeal Panel in making the remitter orders, as intending that if possible and appropriate, orders finally dealing with the Application should be made. Pursuant to TAA s 101(1) the court or tribunal dealing with the application for review may, "(a) confirm or revoke the assessment or other decision to which the application relates", and "(e) make any further order as to costs or otherwise as it thinks fit."

Orders

1. I make the following orders. 1. The question in Order 3 of the Appeal Panel's orders of 11 August 2014, namely: "whether Appellants liable under s 6(3)(b)"? 2. be answered "no". 3. The decision of the Chief Commissioner made on 1 May 2012, that Cumedo Pty Limited is liable to pay the quarterly instalment of gaming machine tax in respect of the period 1 October 2011 to 31 December 2011, is revoked. 4. The decision of the Chief Commissioner made on 4 May 2012, that A J Holdings (NSW) Pty Limited is liable to pay the quarterly instalment of gaming machine tax in respect of the period 1 October 2011 to 31 December 2011, is revoked. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 February 2015