STEWARD J:
81 It is with regret that I find myself unable to agree with the judgment of the learned primary judge below and with the judgment of the learned presiding judge on this appeal. With the greatest of respect, I do not think that Scone Race Club Limited (the "taxpayer") discharged its onus of proof pursuant to s 14ZZO of the Taxation Administration Act 1953 (Cth) (the "TAA"). I do not think that the evidence the taxpayer relied upon justified the drawing of an inference that it was not liable to make payments of riding fees to jockeys during the period 1 July 2009 to 30 June 2014.
82 The applicable legislation is set out in the reasons of Griffiths J. which I gratefully adopt. I also respectfully agree with his Honour's reasons and conclusions concerning ground one of the Amended Notice of Appeal (as set out by Griffiths J.). It is otherwise unnecessary for me to consider grounds three to five as set out in that Notice. That is because, in my opinion, ground two is made out. That is sufficient to dispose of this appeal. For convenience, I reproduce ground two as follows:
The primary judge:
2.1. erred in finding (Reasons [62] and [63]), contrary to the evidence before him, that s 12(8)(a) of the SGAA did not apply so as to make the jockeys employees of the Club because that finding was contrary to the evidence; and
2.2. should have found that the Club failed to prove pursuant to s 14ZZO of the Taxation Administration Act 1953 that the assessments issued to it under the SGAA for the relevant periods were excessive, as s 12(8)(a) of the SGAA applied so as to make the jockeys employees of the Club.
83 In considering this ground of appeal I make two observations:
(a) first, I respectfully agree with and adopt Griffiths J.'s analysis of the "nature and scope of appellate review" in this Court. That requires an appellate court, in a case of this kind, to accord "proper weight" to the facts as found by the trial judge to the extent of that judge's "perceived advantage";
(b) secondly, I adhere to what I said in Commissioner of Taxation v Cassaniti [2018] FCAFC 212 at [88(1)]:
… where the onus is on the taxpayer (whether pursuant to s 14ZZO of the TAA or otherwise) the degree or standard of proof required is that which ordinarily applies in civil proceedings. The direction given to a jury in civil cases aptly describes that onus by reference to a pair of scales and to the arguments of each party being placed at each end. As Hunt J said in Allied Pastoral [Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR]:
... if the plaintiff succeeds ... in weighing down those scales ever so slightly in his favour then he has discharged the burden he carries ...
84 As Griffiths J. has observed, the issue for determination is whether the taxpayer "discharged its onus of showing that it was not liable to pay jockeys for riding in races … conducted by" the taxpayer. Fundamentally, the taxpayer led no direct or actual evidence about who was liable to pay riding fees. It could not point to any contemporaneous document which established that someone else was liable to pay such fees. Instead, its case rested on the drawing of an inference from the evidence about the legal capacity of Racing NSW when it physically made payments of riding fees to jockeys "on behalf of" the taxpayer during the period in dispute.
85 The evidence led by the taxpayer largely comprised the following:
(a) four affidavits affirmed by Mr Scott Kennedy. He was, during the period in question, the "General Manager - Industry and Analysis" for Racing NSW. He was never employed by the taxpayer;
(b) an affidavit affirmed by Ms Helen Sinclair. She was the Chief Executive Officer ("CEO") of the taxpayer from 1999 to 2011; and
(c) an affidavit affirmed by Mr Paul Heaton. He is an external accountant who was involved in the preparation and auditing of the taxpayer's annual financial reports during the relevant period.
86 It would appear that the current CEO of the taxpayer, a Mr Courtney, also gave evidence below in the form of an affidavit. However, this affidavit was not reproduced in the Appeal Book. Neither party referred to anything Mr Courtney might have said in that affidavit. He was also not cross-examined. It would seem that his evidence played no significant role below. It is not described by the learned primary judge in his Honour's reasons for judgment. Rather, the findings made by the primary judge about industry practice were, it would appear, "sourced" from the evidence of Mr Kennedy (see [24]).
87 The only evidence of industry practice prior to 1999 was given by Mr Kennedy and comprised the following paragraph from his first affidavit:
As I understand it, based on my various discussions over the years with senior and experienced racing officials, historically riding fees were paid by trainers on behalf of owners at the race meeting. In those days, trainers would pay for the ride fees, nomination and acceptance fees to the race club (these monies being advanced by or recouped from owners). The jockeys would be paid their ride fees at the end of the day's racing. Behind Tab 10 is a single page extract of the AR which were current until 30 June 2000. It shows AR91 which sets out the requirement for the payment of riding fees prior to the race.
88 It is noteworthy that Mr Kennedy only commenced working for Racing NSW in 1998. His "understanding" was based on discussions with racing officials, none of whom were called to give evidence. I note that the learned primary judge inferred (at [36]) that prior to 1999 the physical act of payment of riding fees was undertaken by the racing clubs on behalf of owners.
89 Mr Kennedy did not give evidence that a term of the contracts entered into between owners and jockeys, or between trainers on behalf of owners and jockeys, included a promise by owners or trainers to pay riding fees. His evidence about those contracts of engagement was highly generalised and comprised the following:
Jockeys are engaged by the trainer either directly or through their agent, to ride a horse in a race. These agreements are often verbal and usually unwritten, although some stables may email riders or their agents to confirm bookings. Many jockeys have their own agent who will approach trainers in the hope of obtaining for their client, a ride on a particular horse. Jockey's agents are licensed persons. Neither Racing NSW nor the race clubs have any involvement in the agreements between jockey and trainer.
Jockeys often have a pre-existing relationship with a particular trainer and will be selected to ride a horse on the strength of that relationship. Some jockeys may be 'stable riders' who ride either exclusively for that trainer or only take outside rides where not required by the trainer. In other cases, a jockey may ride track work for a particular horse or horses in the hope of being engaged to ride that horse or others in upcoming races.
90 The evidence that Mr Kennedy gave about who was liable to pay riding fees after 1999 only took the form of assertions about that issue. Here is that evidence:
'Returns to owners' is an umbrella term used in the thoroughbred racing industry to refer to amounts paid by race clubs and Racing NSW to and on behalf of owners. The concept and use of returns to owners as a metric commenced in the late 1990s as efforts began to reduce the direct costs to owners of contesting individual races. This included clubs ceasing to charge nomination and acceptance fees for most races and paying on behalf of owners the riding fees payable to jockeys. Returns to owners include:
(a) prize money and BOBS Bonuses - approximately $210.7 million;
(b) riding fees and superannuation paid to jockeys - approximately $11.6 million;
(c) jockeys insurance - approximately $4.3 million; and
(d) appearance fees (being the $200 fee paid to each horse that starts in a NSW race - excluding picnic races - but which does not receive prizemoney) - approximately $1.1 million.
…
In 1999, as I noted in paragraph 34 above, racing clubs started paying riding fees to jockeys and jockeys insurance on behalf of the owners. Behind Tab 11 are extracts from the NSW Racing calendars for May, June and July 2000 which all state "Riding fees for starters paid by clubs on behalf of connections" (or words to that effect). In the thoroughbred racing industry, the word 'connections' means owners.
…
On 1 July 2000 Racing NSW took over the administration of the race club's function (as imposed by LR72(1)) of making payments of riding fees to jockeys on behalf of the owners. Since that time, Racing NSW has paid jockeys their riding fees on behalf of the owners via the Stakes Payment System. This is to ensure that jockeys are paid in a timely matter through a centralised system, meet GST requirements and are not required to chase payment from potentially hundreds of owners each month (bearing in mind that many race horses have up to 20 owners).
Over the years, riding fees have been paid to jockeys first by trainers, then by race clubs and now by Racing NSW. At all times these payments have been made on behalf of the owners. As such, the riding fees paid to jockeys by Racing NSW through the SPS forms part of the 'returns to owners'.
91 The "racing calendars" referred to by Mr Kennedy include a statement that riding fees are paid "on behalf of connections". I do not think that this statement adds much. The primary judge thought otherwise. His Honour said at [42]:
The Racing Calendar is thus a means by which changes in the regulation of the industry are notified to the industry at large. On the evidence, it is inherently likely, and I find, that, on and from the implementation of the returns to owners maximisation policy and the related notification in the Racing Calendars, participants in the New South Wales thoroughbred industry, including owners, trainers, race clubs (including the Club) and jockeys conducted their economic relations, including the engaging of jockeys and the related riding of racehorses by jockeys on the basis that "Riding fees for starters paid by clubs on behalf of connections". In other words, from 1999 and prior to 1 July 2000, the practice of the New South Wales thoroughbred industry, inferentially mutually understood at the time when a jockey was engaged as described above, was that a race club paid riding fees on behalf of owners (who engaged jockeys via their trainers). Thus, this feature of the implementation of the returns to owners' maximisation policy did not affect the industry practice as to who engaged and was responsible for the payment of jockeys. To the contrary, by providing that a race club paid "on behalf of connections", it was predicated upon the historic practice of the thoroughbred racing industry.
92 With great respect, what the phrase "on behalf of" meant was never established. As Griffiths and Derrington JJ. observed in Commissioner of Taxation v Racing Queensland Board [2019] FCAFC 224, these words have no necessary or precise meaning: at [58]. They might simply indicate the undertaking of some act for the benefit of another. As such, and without more, they insufficiently identify the source of the legal liability to pay riding fees. A similar observation can be made about Mr Kennedy's assertion that riding fees were paid "on behalf of the owners". Such an inexact pronouncement, in and of itself, does not establish that the liability to pay riding fees lay with the owners.
93 Mr Kennedy's second affidavit did not take things much further, and was similarly conclusive in nature. His evidence was as follows:
Annexed to this affidavit and marked 'SJK2' are single page extracts entitled 'Racing Statistics' from the Australian Fact Book for the years 2009 to 2014 inclusive. Each of these extracts includes, at the base of the statistical table, the following statement:
"Other Returns to Owners include starter rebates, appearance fees, float rebates, fees paid on behalf of owners etc. Fees paid by owners include, nominations acceptances, bonus scheme registration"
Based on my nearly 20 years of experience working in the NSW thoroughbred racing industry, I know that the line item labelled "Other Returns to Owners" includes riding fees with such fees being included in the component entitled "fees paid on behalf of owners" in the above statement.
94 The basis for Mr Kennedy's interpretation of the "Racing Statistics" was not established; he was not, it would appear, the author of the extracts he exhibited. Moreover, the extracts again used the words "on behalf of"; that phrase, for reasons already given, is inherently vague.
95 Mr Kennedy's third affidavit attempted to deal with the fact that the taxpayer had booked riding fees in its annual accounts, not only as an expense, but as "Wages - jockeys (including bonus)". This affidavit has no probative value because Mr Kennedy was not involved in the preparation of those accounts. His review of annual reports prepared by other racing clubs (as against the taxpayer's reports) again has little or no probative value; he was not employed by those other clubs.
96 Mr Kennedy's fourth affidavit describes a "Chart of Accounts" sent to "all country racing clubs" for use in applying MYOB software. It states that riding fees were to be categorised as "Race Meeting Expenditure" under the sub-heading "Returns to Owners". There is simply no evidence that Mr Heaton, in preparing the taxpayer's accounts which categorised riding fees as wages, in any way relied upon this document. Significantly, this document directs racing clubs to book riding fees as an expense of each club.
97 Mr Heaton gave no evidence about industry practice either before or after 1999. He gave no evidence that riding fees were not a liability of the taxpayer or that they were a liability of the owners of race horses. He gave no evidence that they were paid on behalf of another person. He said he could not recall why he treated in the accounts of the taxpayer riding fees as "Wages - jockeys (including bonus)".
98 Unlike Messrs Kennedy and Heaton, Ms Sinclair worked for the taxpayer at Scone. However, she did not give any evidence about who was liable to pay riding fees. Her evidence about industry practice was essentially no more than the following:
In the 12 years I worked there, the Club had no relationship or interaction with the jockeys except to provide a venue for them to ride in races. On race days held by the Club, the jockeys interacted with owners, trainers, stewards (who are employees of Racing NSW) and stable hands. Jockeys were, in effect, quarantined in the jockeys' room and mounting area immediately upon arrival at the Club. In my experience this same practice is observed throughout the racing industry since it is intended to maintain the integrity of the races. There was, therefore, little or no opportunity for them to interact with Club staff.
During my time at the Club, I never had any dealings with jockeys except in a social setting. So far as I am aware, the Club never employed a jockey and I never gave instructions to a jockey on behalf of the Club. The Club had no right to review the performance of the jockeys, negotiate their salary or handle complaints against them.
99 In my view, whilst it may be accepted that each of the foregoing witnesses gave "honest and reliable evidence" as found by the primary judge (at [15]), their evidence concerning the issue of liability was nonetheless thin, vague, sometimes hearsay and sometimes conclusionary in nature.
100 I nonetheless accept that the taxpayer did not "engage" jockeys to ride horses. In that respect, the riding fee might be seen as one of a number of costs of racing that owners in the past had been liable to pay. In such circumstances, it might be thought, one should hesitate to infer that this liability had been transferred to the taxpayer and the other racing clubs. However, the force of that contention is very much diminished by the explanation of the "returns to owners" policy described below.
101 I also, without any hesitation, accept the accuracy of the learned primary judge's description of industry practice (save for his conclusion about who was liable to pay riding fees). I accept that the taxpayer was and is a conductor of race meetings; I accept that trainers nominated which horses ran which races; I acknowledge that trainers "accept" races to confirm the nomination of horses; I accept that jockeys were engaged by trainers (on behalf of owners); and I accept that trainers could declare which jockeys would ride which horses. I also accept the correctness of the following finding at [33] below:
Further, throughout the Relevant Period, neither Racing NSW nor the individual race clubs such as the Club had any involvement in, or control over, the decision as to which riders would be declared to ride a horse in a particular race.
102 However, it is not the case that the taxpayer had no involvement with jockeys. Racing NSW, on behalf of the taxpayer, paid riding fees to jockeys. In any event, and with great respect, the findings made about industry practice did not justify the conclusion that owners were liable to pay riding fees during the period in dispute. That is because those findings said nothing about the locus of that liability. They never descended to that level of detail.
103 The evidence against the drawing of an inference that the taxpayer was not liable to pay riding fees during the period in dispute was, in my view, extensive. It was as follows:
(a) first, the physical payments of riding fees were made by Racing NSW as agent for the taxpayer (no one suggested that Racing NSW was liable to pay riding fees). No payments were made by any owner or trainer;
(b) secondly, it was accepted that neither the taxpayer nor Racing NSW ever sought to recover the fees from any owner or trainer (or indeed from anybody else). The complete assumption of the economic burden of paying riding fees by the taxpayer is at odds with the proposition that owners were legally liable to pay such fees. What, one may ask, would be the point of such a liability being retained by owners given those circumstances;
(c) thirdly, the riding fees were booked in the accounts of the taxpayer as a "race day expense". In cross-examination, Mr Heaton accepted that the riding fees "reduced the profit of the club". In my view, if the taxpayer had never been liable to pay riding fees, but only paid such fees on behalf of owners or trainers, such payments would probably not have been booked as an expense in the accounts in this way. Whether they should also have been described as "wages" may, as the trial judge observed, be doubted. Mr Kennedy's evidence was that they should have been booked as a category of "Race Meeting Expenditure" entitled "Returns to Owners". That concept is discussed below. For the moment, I note that on his evidence this category included payments which were clearly not paid on behalf of owners, or anyone else. For example, it included "prize money", "trophies" and "bonuses". All of these appear to describe liabilities which may be incurred by a racing club. In my view, in the absence of contradictory evidence, the taxpayer's accounts comprised "prima facie" evidence of its liability to pay riding fees: s 1305 of the Corporations Act 2001 (Cth);
(d) fourthly, in cross-examination Ms Sinclair stated that the jockeys were "subcontractors" of the taxpayer. As such, she said the taxpayer was "reporting the GST as we would with any other subcontractor though the BAS system". This answer can only mean that the taxpayer claimed, for GST purposes, input tax credits in its "BAS" statements for the payment of riding fees and that it treated the jockeys, regarded as subcontractors, as making taxable supplies to it. The claiming of such input tax credits under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (the "GST Act") by the taxpayer is consistent with the presence of a legal liability to make such a payment: s 11-5 of the GST Act;
(e) fifthly, the concept of "returns to owners" does not support the conclusion that the liability to pay riding fees during the relevant period was imposed on owners. In his affidavit, Mr Kennedy described this concept as a "metric" used "to reduce the direct costs to owners of contesting individual races". Ms Sinclair gave evidence in cross-examination that the "free racing concept" included the payment of riding fees by the taxpayer and not by the owners and trainers. She said that the concept resulted in jockeys being "guaranteed their income". Mr Kennedy, in cross-examination, described the "returns to owners" as a "way that we measured the success of racing and offsetting the costs of owners" (emphasis added). The following exchange then took place:
But that's why you talk about it as on behalf of owners, because you're capturing some information about something that used to be paid by owners that's now being paid by the clubs?---That's correct.
It's not a reflection that it - you're not seeking to convey any legal statement. You're not a lawyer, and you don't seek to tell his Honour that any such payments are legally on behalf of owners?---No.
It's just this context of how you've recorded it in the accounts as an expense of the club under the heading Returns To Owners?---That's correct.
In my opinion, the forgoing shows that the "returns to owners" concept represented a subsidy, or assumption of liability, paid by the clubs to promote horse racing in New South Wales. As Mr Kennedy expressly recognised in his first affidavit, without the benefit of this policy:
… the costs of owning a race horse would be prohibitive for all but the very wealthiest people in our society and even then, would be too costly to attract interest. Racing NSW develops and implements policies aimed at maximising returns to owners as a means of improving the viability of participating in racing as a racehorse owner. The possibility of reasonable returns to owners complement the social and intrinsic benefits of being involved in racing a thoroughbred.
In other words, it was in the interests of the racing clubs to assume the liability to pay riding fees, as a way of promoting the sport of racing horses. It was paid "on behalf of" owners in the sense that it was paid for their benefit. The contention that owners somehow retained a legal liability to pay riding fees is, I think, inconsistent with the very purpose of this policy;
(f) sixthly, no evidence was called from any owner, trainer or jockey. Given that agreements between owners/trainers and jockeys were "often verbal", the lack of such evidence is telling. No written contracts were otherwise tendered into evidence. Indeed, no documents were tendered from any owner, trainer or jockey. If the owners were here truly liable it would have been a simple matter to call a sample of them to declare their liability; perhaps even one might have been enough;
(g) seventhly, none of Mr Kennedy, Ms Sinclair or Mr Heaton gave any evidence that it was a term of the contracts entered into between owners/trainers and jockeys, that owners were liable to pay riding fees. Mr Kennedy and Ms Sinclair only gave evidence of their respective understanding that the taxpayer paid such fees "on behalf" of such owners. It was by no means clear to me that this was evidence about anybody's liability to pay these fees. On one view, consistently with the evidence given about the "returns to owners" concept, the statements made by Mr Kennedy and Ms Sinclair merely demonstrated that riding fees were paid by the taxpayer for the benefit of owners;
(h) eighthly, examples of statements of accounts sent by Racing NSW to the taxpayer, and to an owner, a trainer and a jockey, were in evidence. These had been prepared in accordance with Racing NSW's "Cash Flow Management Policy". The statement of account sent to the taxpayer shows debits for a "rider payment". This is consistent with Racing NSW on-charging the riding fees it paid in relation to race meetings held at Scone to the taxpayer. The statement of account sent by Racing NSW to an owner records a crediting of that account for prize money. There is no debiting of the account for riding fees. The statement of account sent to the trainer records a series of credits for the receipt of prize money. Again, there is no debiting of the account for riding fees. The statement of account sent to the jockey contains a series of credits for prize money and for riding fees. It contains a "GST summary". These "statements of account" were prepared consistently with the "Stakes Payment System" operated by Racing NSW. This was a "centralised system" for the processing of amounts paid to and received from stakeholders in the racing industry. Respectfully, that "System" and those statements of account, do not support the existence of a liability on owners to pay ridings fees to jockeys. Rather, they only show Racing NSW paying riding fees and billing the taxpayer for those fees.
104 The plain meaning of former Local Rule 72 (applicable at the time) does not support the proposition that the taxpayer was not liable to pay riding fees. That rule is set out in the reasons of Griffiths J., but is set out again below for convenience:
Clubs shall pay such fee for a jockey or apprentice jockey in consideration for their riding a horse in a race or a barrier trial as may be set from time to time by the Board [i.e. Racing NSW].
105 Both the learned primary judge and Griffiths J. have observed that the rule is silent as to whether the taxpayer must make the payment of riding fees in its own right or on behalf of an owner. With respect, the taxpayer does not advance its evidentiary burden through such silence. The fact is:
(a) Local Rule 72 rule identified the clubs as the entities that "shall pay" the riding fee. It did not identify anyone else. It also expressed that such a fee shall be paid "in consideration" for a jockey riding a horse. The language of this rule may usefully be compared with the applicable language of s 12(8)(a) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (the "SGA Act") as follows:
a person who is paid to perform … sport ... is an employee of the person liable to make the payment;
In a very real sense, Local Rule 72 tells one precisely the identity of the person who is liable to make the payment of riding fees to jockeys: it is the Club who "shall" make such payments; and
(b) the Local Rule simply does not state that the Clubs are to make the payment "on behalf of" owners, or anyone else. In my view, if owners are truly liable to make such payments Local Rule 72 would have expressly said so.
106 Like Griffiths J., I am more than satisfied that the learned primary judge took account of all the evidence before his Honour. No evidence was ignored. That was not the error that I think was made below. Rather, the error was in deciding that the evidence sufficiently supported the drawing of an inference that the liability to pay riding fees had never been imposed on the taxpayer during the relevant period, which had only ever paid such fees on behalf of owners. As his Honour said at [41] below:
I further so infer, that, responding to this policy, race clubs (including the Club) throughout New South Wales ceased to charge owners nomination and acceptance fees for most races and also commenced paying on behalf of owners the riding fees payable to jockeys. The existence of this policy response by race clubs is evident from advice in these terms or to this effect in New South Wales Racing Calendars for the months of May, June and July 2000, "Riding fees for starters paid by clubs on behalf of connections". Within the New South Wales thoroughbred racing industry, "connections" is an industry specific term generally understood to mean owners.
107 With great respect, the evidence did not support, on the balance of probabilities, the drawing of this inference. In that respect, I note that this is not a case about the credibility of witnesses. Nor is this a case about matters of impression or evaluative judgment. This is a case in which a mixed conclusion of fact and law concerning the locus of liability was inferred from the totality of the evidence. In drawing the inference set out at [41], I do not think that the learned primary judge enjoyed any significant advantage as a trial judge. Like this Court, his Honour relied upon the affidavits and their exhibits; his Honour also had the benefit of the answers given in cross-examination. Transcripts of that cross-examination were before the Court. Given the nature of the issue the subject of this appeal, and the content of those answers, the advantage of hearing those answers (and seeing the witnesses), as distinct from reading them, is I think slight. This is a case where the following observation of Hill J. in Federal Commissioner of Taxation v Chubb Australia Ltd (1995) 56 FCR 557 (described as a "very helpful judgment" by Allsop C.J. in Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301 at 309 [10]) at 573 is apt:
To paraphrase what was said in Warren v Coombes (1979) 142 CLR 531, albeit in a slightly different context, an erroneous decision should not be upheld, nor should demonstrated error be perpetuated. However, while that case made it clear that it is the duty of an appellate court to decide both fact and law for itself, subject to the case where the trial judge has had the advantage of observing the witnesses, it nevertheless recognises that the appeal court should give "full weight" to the decision of the trial judge and only where the appeal court considers that that judgment was wrong must they give effect to their own judgment.
108 As to the drawing of inferences, in Warren v Coombes (1979) 142 CLR 531 at 551, the majority of the High Court said:
… in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.
Cited with approval by Gleeson C.J., Gummow and Kirby JJ. in Fox v Percy (2003) 214 CLR 118 at 127 [25].
109 In this case the taxpayer contended that owners of race horses, and not it, were liable to pay riding fees. It bore the onus of establishing this. The salient factors were that Racing NSW paid the fees on behalf of the taxpayer; that the taxpayer never sought to recover the fees from owners or anybody else; that the taxpayer booked the fees as an expense in its accounts; that it claimed input tax credits for GST purposes when it paid the fees to jockeys which it treated as "subcontractors"; that the concept of "returns to owners" was concerned with the elimination of costs which had been imposed on owners in order to promote racing in New South Wales; and that Local Rule 72 clearly stated that the taxpayer, as a club, "shall" pay such fees to jockeys. In addition, no evidence was led that it was a term of any contract entered into between owners and jockeys that the owners were liable to pay riding fees; and no evidence was led from any owner, trainer or jockey. No statement of account sent out by Racing NSW suggested that liability lay with the owners. In these circumstances, the taxpayer nonetheless asserts that it was not liable to pay the riding fees. In my view, given these factors, the trial judge erred in inferring that the riding fees were paid on behalf of owners, in the sense that the owners, and not the taxpayer, were liable to pay such fees. The evidence in favour of the drawing of that inference was simply overwhelmed by the evidence denying its existence.
110 I otherwise agree with Griffiths J.'s construction of s 12(8)(a) of the SGA Act which followed from this Court's reasons for judgment in Commissioner of Taxation v Racing Queensland Board [2019] FCAFC 224.
111 This appeal should be allowed.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Steward.