Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue

Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue - [1999] VCAT 1327 - VCAT 2009 case summary — Zoe

[11]

6 The facts extracted from the documents lodged by the respondent under s 58 of the ADT Act leading to the proceedings are in a chronological order as follows: 1. On 3 April 2007, the applicant's accountants lodged a response to a Pay-roll Tax Questionnaire that the respondent had sent to the applicant. In the response the accountants disclosed the applicant's taxable wages for the years ended 30 June 2003-2006. Attached were details of commissions paid by the applicant in 2003-2006 years, the applicant's financial reports for the year ended 30 June for years 2004 - 2006. 2. On 20 April 2007, the respondent carried out a search on the Australian Tax Office database to obtain the amount of wages paid by the applicant in the tax years 2002 to 2005. 3. On the 8 May 2007, the respondent requested further information from the applicant's accountants. 4. On 7 August 2007, the respondent issued assessments by grouping the applicant with Panivan Enterprises. 5. On 23 August 2007, the applicant and Panivan Enterprises, represented by Townhills Group, a firm of accountants, lodged notices of objection against the Notices of Assessment. 6. On 19 November 2007 and 27 February 2008, the respondent requested further information which was supplied by the applicant on 22 January 2008 and 11 March 2008. 7. On 3 June 2008, the respondent disallowed the objections. 8. On 26 June, T Davis & Associates, a firm of solicitors, wrote to the respondent indicating that the applicant would seek a review of the respondent's objection decision in the Supreme Court of New South Wales. 9. In a letter dated 14 July 2008, the solicitors for the applicant informed the respondent that it had lodged on behalf of the applicant an application at the Administrative Decisions Tribunal. In that letter, the solicitors also stated as follows: "However, we wish to point out that in order to save costs there is a fundamental error in your letter to Townhills Group dated 3 June 08. It may well be the case that Townhills, who were our client's accountants, but have now been dismissed, failed to properly explain to your department the correct way that our client operates. … In light of the above and clearer description of our client's method of operation you may care to review your decision."

[12]

7 The conduct of the proceedings before the Tribunal have been summarised by the respondent in his submissions as follows: "15. On 13 August 2008, the application was first listed for Directions before Deputy President Needham. Mr Davies appeared for the applicant by telephone. Orders were made for the filing and service of s.58 documents, the applicant's evidence and the application was listed for further directions on 8 October 2008. 16. On 26 September 2008, the applicant's submissions, which had been filed on 11 September 2008, were served on the Crown Solicitor's Office. 17. On 8 October 2008, the application was listed for Directions before Deputy President Hennessy. Mr Davies appeared for the applicant by telephone. Orders were made requiring the respondent to reconsider the decision by 29 October 2008 or to file and serve evidence by that time. The application is adjourned for further directions to 19 November 2008. On the same date, the applicant wrote to the Tribunal (and did not provide copy to respondent), suggesting that the respondent have leave to reconsider his position and a Statement of Facts be agreed, if appearance by telephone not possible. 18. On 6 November 2008, the respondent wrote to the Tribunal requesting that the application be remitted under s.65 of the ADT Act and listed for further directions on 21 January 2009. The applicant consents to the request. 19. On or about 14 November 2008, the Tribunal remitted the application under s.65 of the ADT Act and listed the application for further directions on 21 January 2009. 20. On 21 January 2009, the application was listed for Directions before Deputy President Needham. Ms Haddad appeared for the respondent and mentioned the appearance of Mr Davis. The respondent requested additional time to reconsider the decision. Deputy President Needham adjourned the application to 4 March 2009. 21. On or about 25 February 2009, the respondent reconsidered his decision and allowed the objection. The applicant's solicitor was informed on that date. 22. On 4 March 2009, the application was listed for Directions before Deputy President Needham. Ms Haddad appeared for respondent and mentioned the appearance of Mr Davis. Ms Haddad informed the Tribunal that the objection had been allowed and that the applicant intended to make an application for costs. The application was adjourned to 18 March 2009."

[14]

9 The Administrative Decisions Tribunal Amendment Act 2008 introduced changes to the provisions found in s 88 of the ADT Act under which the Tribunal can make orders for with costs in proceedings before the Tribunal. The new s 88 which applies from 1 January 2009, is in the following terms: " 88 Costs (1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) causing an adjournment, or (v) attempting to deceive another party or the Tribunal, or (vi) vexatiously conducting the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claim made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) any other matter the Tribunal considers relevant. (2) The Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. (4) In this section, "costs" includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application."

[15]

10 The applicant's case was essentially that "it is entitled to costs against the respondent in this matter for the following reasons: 1 The respondent had no grounds in fact or in law to ascertain that the applicant was liable to pay roll tax. 2 The applicant's submissions state in detail as to why the respondent was incorrect both as to fact and as to law. 3 On 14 July 08 the applicant's solicitor sent a letter to the respondent, Office of State Revenue, which in the 2nd paragraph states "however, we wish to point out that in order to save unnecessary time and cost there is a fundamental error in your letter to Townhills Group dated 3 June 08". The letter then goes on to explain in considerable detail why the respondent was incorrect. 4 No response was received to the letter of 14 July 08. Subsequent to the filing of the applicant's submissions the respondent applied under Sec 65 for a review to take place of the original determination. 5 The matter was adjourned for such review to take place and on the return summons for directions on each occasion the respondent applied for a further adjournment to further consider its position. The records will show the respondent applied for 4 adjournments. 6 Eventually the respondent conceded that the applicant's submissions and the facts in the applicant's solicitors letter of 14 July 08 were correct. 7 The Office of State Revenue is an organisation with unlimited financial funds at its availability. The applicant on the other hand are an elderly couple who have retired from business and live off their retirement income. The husband has suffered heart trouble and these proceedings have caused the applicants great stress and anxiety and finding the amount of tax had to be paid under protest was great hardship to them particularly as the respondent threatened to charge interest at over 14.5% pa. 8 The applicants have incurred substantial accountancy and legal fees in establishing their complete innocence as to the suggestion they had failed to pay payroll tax. 9 The applicant submits under the above circumstances it is just and equitable that the respondent pay the applicant's costs incurred by way of these proceedings."

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