Campbell v Chief Commissioner of State Revenue

Federal Court of Australia|2011-05-26|Before: French J

M Campbell (First Appellant) for the Appellants File Number(s): 109065 Decision under appeal Citation: Campbell v Chief Commissioner of State Revenue [2010] NSWADT 271 Date of Decision: 2010-11-15 00:00:00 Before: J Block, Judicial Member

Introduction 1The Appellants appeal against a decision made by Judicial Member Block in the Revenue Division of this Tribunal on 15 November 2010. The effect of that decision was to affirm land tax assessments in relation to a property in Gorokan, owned initially by the First Appellant alone and subsequently by both Appellants as to 50% each. 2The history of the land tax dispute between the parties, which at one stage included a dispute in respect of a property at Mount Riverview owned by the First Appellant, is set out at paragraphs 3 to 13 of the reasons of the learned Judicial Member and we do not propose to detail it further here. It is sufficient to note that the decision under appeal, for the reasons given by the learned Judicial Member, dealt only with the question whether the Gorokan property was the intended principal place of residence of either or both of the Appellants, and specifically whether there was an "acceptable delay" so as to justify an extension to the two-year time limit for the construction of a residence on the property: see s 10T(4) of the Land Tax Management Act 1956 (LTMA).

The issues on the appeal 3There are three issues we need to decide.

The first issue is whether the appeal raises a question of law and, if it does, how that question should be answered.
The second issue is whether we should grant leave for the appeal to extend to a review of the merits of the decision under appeal.
The third issue is whether we should award costs in relation to this appeal.

Issue 1 - a question of law? 4We have found it difficult to identify a precise question of law raised in the Notice of Appeal. The Notice refers to and attaches the Applicants' Written Submissions in Reply (prepared by the Appellants' then counsel) filed on 17 November 2009 - that is, prior to the hearing conducted by Judicial Member Block - and includes the following: References cover various aspects. They do not appear in the decision of 15/11/10. Of those note 3 (last line of item 15 page 4) after "such exemption should read widely and not narrowly." Indicates ... Burt v FCT (1912) 15 CLR 469; Universal Press Pty Limited v FCT (1989) 90 ALR 332; Diethelm Manufacturing Pty Limited v FCT [1993] FCA 437; 93 ATC 4703 per French J. 5The three cases cited appear in a footnote in the Applicants' Written Submissions in Reply, in support of the proposition referred to in the Notice of Appeal that provisions exempting taxpayers from tax should be interpreted widely - that is, in favour of exemption - rather than narrowly. 6The Appellants' submissions in relation to this appeal, which were filed on 18 March 2011, are rambling and unfocused. Although the Respondent's counsel was moved to describe them, in his written submissions, as "opaque and incomprehensible", he suggested that the question of law raised by the Notice of Appeal is whether the Tribunal at first instance failed to deal with a submission that was reasonably open and seriously advanced by the Appellants (at the time, the Applicants) in argument. We think that is a reasonable, if generous, way to read the Notice of Appeal. 7Mr Malcolm Campbell, who is the First Appellant and who also appeared for his son Peter, the Second Appellant, was unable to identify any alternative or additional question of law raised in the Notice of Appeal. We have therefore proceeded on the basis that that is the only question of law raised by the Appellants. 8While the Respondent acknowledges, on the basis of the decision of the Full Federal Court in Dennis Wilcox Pty Ltd v FCT (1988) 79 ALR 267, that it may be an error of law for a tribunal not to deal with a submission that was reasonably open and seriously advanced in argument, he submits nevertheless that the learned Judicial Member did properly deal with all submissions made by the Applicants at first instance. In particular, the Respondent refers to paragraphs 20 to 40 of the Judicial Member's reasons, which the Respondent submits "are devoted to debunking the appellants' construction". 9We consider that the learned Judicial Member's reasons disclose a very careful and comprehensive consideration of the parties' submissions in relation to the construction of the legislative provisions. It is not an error of law to fail to refer, in terms, to a particular aspect of a submission or to particular authorities relied on by one of the parties, provided all reasonable submissions advanced are dealt with. 10The Judicial Member's decision in relation to the construction of the legislation is undoubtedly correct. It contains no error of law.

Issue 2 - whether the appeal should extend to a review of the merits 11The Appellants say that the appeal should be extended to the merits for the following reasons, as set out in their Notice of Appeal: It is not clear from the decision (15/11/10) that the understanding is that the reluctance shown by financial institutions in 2001/2002 to provide funds for a home on the Gorokan land included as a significant factor the termites and moisture. Preference was for the income producing home for similar support pending a history of saving. Payments by Peter have gone to pay the mortgage. The Mount Riverview land to date (from the 1970s) has not been able to be developed or sold. The Rural Fire Service (Rural Fires Act) and Integral Energy (Electricity Supply Act) use it for access. Some extracts including from submissions of 30/7/10 and 02/11/10 herewith. Both intend to live at Gorokan. 12We have found these propositions difficult to understand. 13Mr Malcolm Campbell explained in the appeal hearing that the "electricity authority" has a "proposed right of way" over the Mount Riverview property and that as a result the property cannot be developed or sold. Unless it is sold the Appellants are unable, they say, to fund the construction of a residence on the Gorokan property. These financial circumstances, they say, amount to an "acceptable delay" in the construction activities, sufficient to warrant the exercise, in their favour, of the discretion in s 10T(4) of the LTMA. They say that these issues were not fully explored by the Tribunal at first instance. 14The Respondent meets that assertion with the response that no evidence was presented to the Tribunal at first instance in support of an argument that those financial considerations were a cause of the delay in construction. In those circumstances, the Respondent says, the Appellants should not be permitted to reformulate their case on appeal. Leave to extend the appeal to the merits should be refused. 15We accept the Respondent's submission, for the following reasons. 16Mr Malcolm Campbell's principal witness statement in the proceedings at first instance was filed in the Tribunal on 20 August 2009. In it he referred, at paragraphs 13 to 22 and 25 to 28, to the problems he had experienced with termites, summarising the position at paragraph 29 as follows: For the whole of the relevant period, I intended Gorokan to be my principal place of residence. The reason why I did not commence building work and move into a house on the property is because of the enormous problems I have experienced with termites in the trees on the property. 17At paragraph 41 he said: The delay in the commencement of the building works on the Gorokan property necessary to enable me to use and occupy the Gorokan property as my principal place of residence was due primarily to the reasons referred to above - i.e. the extensive delays caused by the termite issue and the Wyong Shire Council. These reasons were beyond my control. 18Nowhere in that statement did Mr Campbell assert that his inability to develop or sell the Mount Riverview property was a factor that delayed construction work on the Gorokan property. 19The Applicants' Written Submissions at first instance, also filed on 20 August 2009, similarly emphasised the termite problem, as follows: [7] However, termites were discovered on the Gorokan property in the 1980s. Accordingly, Council would not approve the development plans for the construction of any house on the Gorokan property until the termite problem had been solved. For the reasons referred to in the Affidavit of Malcolm William Campbell, due to Council delays and the enormous problem concerning the existence of termites on the Gorokan property, Council approval could not be obtained to the development plans and, as of today, has still not been obtained. ... [48] ... The Applicant submits that there has been an "acceptable delay" in the circumstances of the case, which has been beyond the control of Malcolm Campbell. Relevantly, the Applicant draws the Tribunal's attention to paragraphs 13-27 & 40 ( sic - probably should be 41) of the statement of Malcolm William Campbell. The reason for the extensive delays in the commencement of the building works was the extensive nature of the termite problem on the Gorokan property and the delays experienced with Wyong Shire Council to obtain approval for the development plans in light of the termite problems. Such delays were beyond the control of Malcolm Campbell. 20On 8 January 2010 Mr Malcolm Campbell made a supplementary statement which included the following at paragraph 26: The reasons for the delay in the construction of a house on the Gorokan property since 2002 have been outlined in the previous statement. In particular, I refer to paragraphs 14, 19-22, and 25-30 of the previous statement. They consist of the enormous problems with termites on the Gorokan property since 2002 together with Council delays in obtaining approval for the removal of trees and the construction of a house. 21On the same day, 8 January 2010, Mr Peter Campbell made a statement which included the following at paragraph 16: If not for the termite problem on the Gorokan property then I would like to have a house built on it subject to my father's consent and agreement. 22Further written submissions filed on 8 January 2010 contained this, at paragraph 11: The reasons for the delay in not moving onto the Gorokan property from 2002 onwards are referred to in the statements - i.e. the enormous termite problem on the Gorokan property, the delay in Council approvals to remove trees and obtain consent for the building of a house on the Gorokan property, my late mother's illness and Peter's illness from 2005 onwards. All these reasons were beyond the control of both Peter and I which led to delays in building a house on the Gorokan property and moving into it to live. 23Although Mr Malcolm Campbell suggested in his oral evidence before the Tribunal at first instance that the inability to sell or develop the Mount Riverview property was a factor delaying construction work on the Gorokan property, that evidence was given little or indeed no weight and, in our opinion, properly so. It was, like much of Mr Campbell's evidence, unspecific and difficult to follow, and in any event it differed markedly from the evidence given in the various witness statements. It is also a proposition that did not rate a mention in the written submissions. 24In the circumstances we refuse leave to extend the appeal to a review of the merits of the decision at first instance.

Issue 3 - costs 25The Respondent seeks an award of costs against the First Appellant, but not the Second Appellant, in relation to this appeal. The claim is based on s 88(1A)(c) of the Administrative Decisions Tribunal Act 1997 (ADT Act), in that, on the Respondent's submission, we should be satisfied that it is "fair" to displace the general position (that is, that the parties should bear their own costs) by awarding costs having regard to "the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law". 26The Appellants' case, propounded by Mr Malcolm Campbell, is entirely without foundation. As our reasons indicate, it has no tenable basis in fact or law. As an Appeal Panel of this Tribunal said in GA v University of Sydney (No. 2) [2010] NSWADTAP 53 at [19] (references omitted): In line with these considerations, the Tribunal in dealing with review applications at the Divisional level rarely is called on to deal with costs applications from respondent agencies. The Tribunal has tended only to grant such an application where the review applicant has engaged in conduct that has exacerbated or prolonged unnecessarily the disposal of the matter. But Appeal Panels have recognised that a less generous outlook should be applied to appeals involving weak or hopeless cases. A successful party at first instance (whether citizen or agency) should not be put to the inconvenience and expense of meeting a weak or hopeless case a second time around. 27This is the circumstance faced by the Respondent in this appeal. We consider it fair, having regard to s 88(1A)(c) of the ADT Act, to order the First Appellant to pay the Respondent's costs of this appeal.

Orders (1)Dismiss the application for leave to extend the appeal to a review of the merits. (2)Dismiss the appeal. (3)Order the First Appellant to pay the Respondent's costs of the appeal as agreed or as assessed on a party and party basis.

I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal. 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: 03 June 2011

At a glance

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Judgment (8 paragraphs)

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