Cusmano v Commissioner of State Revenue (Taxation) [2010] VCAT 1056

1. The respondent's assessments in Proceedings T9/2009, T10/2009 and T11/2009 are set aside and remitted to the respondent with a direction that they be reassessed in accordance with my reasons.
2. The respondent's other assessments are affirmed.

Mr Shaun Ginsbourg of Counsel instructed by the Solicitor to the Commissioner of State Revenue

1. Mr and Mrs Cusmano are joint owners of a portfolio of residential and commercial properties in metropolitan Melbourne.
2. At least one of the properties now owned by Mr & Mrs Cusmano is held by them as trustee of the J. & H. Cusmano Superannuation Trust.
3. This proceeding concerns the Cusmanos' liability for land tax both under the Land Tax Act 1958 and the Land Tax Act 2005 as levied on their property portfolio arising out of re-assessments made by the respondent, Commissioner of State Revenue in the circumstances described below.
4. As one of the trustees of the superannuation fund, Mr Cusmano wrote to the Commissioner of State Revenue. The letter was expressed to come from the following address:

Re: Land Tax Assessment 2006 for J & H Cusmano Superannuation Fund - Place of Residence at 153 Huntingdale Road Ashwood Assessment No. 044590021 Customer No. 061922305

I have recently bought the property at 153 Huntingdale Rd Ashwood (March 2005) to occupy as Trustee for the J & H Cusmano Superannuation Fund.

Enclosed is evidence of Gas and Electricity accounts being paid by me at this property. I understand that this should make this property eligible for exemption for Land Tax. If this is correct, can you please reissue the Land Tax Assessment 2006 excluding 153 Huntingdale Rd Ashwood from the calculations.

I look forward to your response. If you need to discuss this matter with me I can be contacted on 040300889.

Gas and Electricity Bills/Accounts in 2005 and 2006 samples only.

1. According to Mr Cusmano the rationale for this letter was to make a claim for a principal place of residence exemption for the property at 153 Huntingdale Road, Ashwood. Mr & Mrs Cusmano's residence was at 8 Loranne Street, Bentleigh; the property at Huntingdale Road was owned by them as trustees of their superannuation fund as an investment. It was let as student housing with up to six rooms available for occupancy by student tenants. The property included a common kitchen, the students paid rent ranging from $75.00 per week for the smaller rooms to $95.00 per week for the larger rooms. The students paid nothing extra for the use of gas and electricity which as the enclosure with the letter indicates was metered to Mr & Mrs Cusmano's account. Mr Cusmano said that since according to his understanding the superannuation fund was a 'separate entity' the superannuation fund could be regarded as having a residence and so a second principal place of residence exemption could be claimed by the Cusmanos additional to the one for 8 Loranne Street. One of the Commissioner's officers wrote to Mr Cusmano at 153 Huntingdale Road, Ashwood by letter dated 21 November 2006. The Commissioner's records were amended so as to remove the principal place of residence exemption previously enjoyed by 8 Loranne Street, Bentleigh to the Huntingdale Road property. This led Mr Cusmano to respond by e-mail dated 24 November 2006. He referred to a telephone conversation which he had had with an officer identified as 'Alex'. The e-mail stated, inter alia:

I was under the impression that as my superannuation fund is a separate entity, it would be entitled to exemption for a holiday house or as guest house. You have now changed the PPR incorrectly on properties owned in Joseph and Maria Cusmano making the property where I actually live at 8 Loranne Street subject to Land Tax. This is totally incorrect as the [sic] is still my main residence.

I would like you to review all my tax assessments based on the above information. My principal place of residence is still at 8 Loranne Street Bentleigh. All future mail from the SRO should be directed to my home address at 8 Loranne Street Bentleigh.

1. In the course of investigating these matters relative to a principal place of residence one of the Commissioner's officers discovered that Mr & Mrs Cusmano were registered as the owners of a property at 24 Dickens Street, Moorabbin. The Dickens Street property had been the subject of a purchase settled in March 1984. Law firm Kevin Power & Co acted for Mr & Mrs Cusmano. In a letter to them dated 21 March 1984 advising the Cusmanos of settlement, that firm stated:

We are notifying all the relevant authorities of the change in ownership of the above property so that all future notices will be forwarded to you.

1. In a letter before settlement dated 5 March 1984 the firm had stated:

The Land Tax Office advise that Land Tax is not adjustable on the property.

1. A letter of 21 March stated that the firm would contact the Cusmanos 'as soon as we receive the title back from the Titles Office', indicating presumably that the purchase was settled without the assistance of mortgage finance (if a mortgage financier were involved it and not the purchaser's solicitor would have controlled the title). Mr Cusmano said that the funds to meet the purchase came from his mother as an advance inheritance or a 'portion' (cf Luke chapter 15 verse 12). In fact Mrs Cusmano senior lived until 2004.
2. Mr Cusmano had had dealings with Mr Martyn Pritchard of the State Revenue Office with respect to his mother's deceased estate. As a result of those dealings he telephoned Mr Pritchard on 24 August 2008 with regard to his own Land Tax affairs. In the course of that conversation Mr Pritchard told him that his Land Tax assessments from 2003 onwards would be amended so as to include the Dickens Street property.
3. Land Tax in Victoria which at times relevant to this proceeding was levied first by the Land Tax Act 1958 and latterly by the Land Tax Act 2005 is charged upon a progressive scale. Thus the inclusion of an additional taxable property means not only that additional tax is payable by reference to the value of that property but also that the taxpayer or taxpayers may be moved into a higher bracket given their larger landholdings such that the tax is chargeable at a higher rate. The addition of a further property to the list of taxable properties therefore has 'knock-on' effects.
4. On 5 September 2008 the respondent Commissioner of State Revenue issued amended Land Tax assessments under the Land Tax Act 1958 and the Land Tax Act 2005 for the Land Tax years 2003 to 2008 (six assessments).
5. Mr Cusmano attended a conference at the State Revenue Office in June 2009. The Commissioner was represented by Mr Azad Raheem a principal solicitor to the Commissioner and a Ms Chivakul, solicitor in the Legal Branch of the office. Mr Raheem asked Mr Cusmano to:

Provide explanations for [the Cusmanos] failure to disclose their ownership of a property known as 24 Dickens Street Moorabbin to the SRO.

1. According to Ms Chivakul, Mr Cusmano responded that he:

Inherited 24 Dickens Street Moorabbin from his mother and was therefore under the impression that he did not have to declare inherited property to the SRO for Land Tax purposes because the time granted when the property was acquired was before the introduction of Capital Grains Tax.

1. In May 2009 Mr Cusmano had furnished the Commissioner with copies of the correspondence from Kevin Power & Co relative to the purchase of the Dickens Street property from which I quoted earlier in these reasons.
2. The amended assessments increased the liability of Mr & Mrs Cusmano by assessing the Dickens Street property. From 2006 onwards they included a property being Shop 20, 70 Warringa Crescent, Hoppers Crossing which is part of a small local shopping centre and is let by the Cusmanos for operation as a community supermarket.
3. The transfer to the Cusmanos for the Hoppers Crossing property was lodged for registration on 31 October 2005.
4. Objections to these re-assessments were disallowed by the Commissioner. Mr & Mrs Cusmano seek review of the Commissioner's disallowance of their objections under the Taxation Administration Act 1997 for the reassessments for the 2006 Land Tax year onward and under the Land Tax Act 1958 for the years 2003 to 2005.

1. Mr Cusmano represented himself and Mrs Cusmano.
2. He submitted first, that in dealing with the issue of Dickens Street, Bentleigh, the Commissioner had not acted in accordance with his published policy statements which in the circumstances would have limited the retrospective re-assessments to some three Land Tax years. The result he submitted was that three additional years of retrospective assessments were made relative to Dickens Street leading to an increase in the tax liability by the sum of $20,577.60. This amount he submitted should be remitted.
3. Next, he submitted that the assessments insofar as they related to the Hoppers Crossing property should be reduced by some $17,549.04 relative to the Land Tax years 2007 and 2008. The tax he said was levied with respect to the unimproved capital value of the subject property. The municipal rate notices for the property were directed to the tenant which in accordance with the lease between the Cusmanos and the tenant were for the tenant's account. The amended Land Tax assessment was received in 2008. It was too late, he said, for him to seek review of what he regarded as the excessively high unimproved capital values assessed by the valuer appointed by the City of Wyndham. In 2009 he was able to make submissions to the valuer leading to the unimproved capital values being reduced to a realistic figure. In the event the municipality levied its rates on the capital improved value and the reduced unimproved value therefore had no impact on the size of the municipal rates. Mr Cusmano submitted that the unimproved capital values for the Land Tax years 2007 and 2008 should be readjusted by a straight line or linear method so as to follow a constant trend from the unimproved capital value in 2006 to the revised unimproved capital value in 2009. The result, he submitted, would be to reduce the Cusmanos Land Tax liability with respect to the Hoppers Crossing property by $17,549.04.
4. He submitted that there should be a further remission of his liability for the knock-on effect of the two matters above referred to as it affected the tax payable on the Cusmano's individual assessments. He calculated this in the sum of the $891.16.
5. Finally Mr Cusmano submitted that land values in metropolitan Melbourne had reached a peak in December 2007 through to approximately February 2008. Since that time these values had decreased generally by 10%. Mr Cusmano noted that in years gone by when municipal valuation lagged behind the market the Commissioner of State Revenue in levying Land Tax had applied indexation factors. In the present circumstances he submitted the Commissioner should apply a negative indexation factor. He submitted he and his wife should also be compensated for 'pain and suffering with pressure from SRO to pay up bills or incur penalties'. He assessed these amounts as 'up to $30,000'.
6. Mr Cusmano made lengthy submissions to the effect that he had been 'up front' with the Commissioner at all times. He contended that he had relied upon the solicitors who acted for him to give any necessary notifications to the Commissioner. He referred to the letter from Kevin Power & Co quoted above. He complained that the Commissioner had displayed no 'transparency' in failing to indicate to him prior to the issue of the amended assessments in September 2008 that he and his wife were the subjects of an investigation. Given that the Commissioner seemed to have discovered the additional land in Hoppers Crossing and Moorabbin in 2006, he was critical of the delay in the issue of the amended assessments. This delay he contended had led to his being deprived of the opportunity to object to the municipal valuation of the unimproved capital value of the Hoppers Crossing property.

1. Mr Ginsbourg who appeared for the Commissioner submitted that the Commissioner's re-assessments should be affirmed.
2. He submitted that the onus of proof lay upon the applicants . He referred to Section 110 of the Taxation Administration Act 1997.
3. Mr Ginsbourg contended that the Tribunal's task was to carry out a re-hearing de novo. It had to make its own determination as to the proper liability and was not concerned to adjudicate upon the fairness of the procedures adopted by the Commissioner.
4. He submitted that Section 21 of the Land Tax Act 2005 permitted the Commissioner to use the municipal valuation made under the Valuation of Land Act 1960. He contended it was not competent in these proceedings to challenge the correctness of these valuations.
5. The power to issue the amended assessments was to be found in Section 19 of the Land Tax Act 1958 and Section 9 of the Land Tax Act 2000. The Revenue Rulings GEN.013 for the 2003 to 2005 assessments and GEN.014 for the 2006 to 2008 assessments were not binding on the Commissioner or the Tribunal. He referred to V.L. Investments Pty Ltd v Commissioner of State Revenue (2006) 63 ATR 319 where at [45] Hollingworth J said that such policy statements could not 'operate as an estoppel against the operation of the provisions of the Act'.
6. He contended that even if regard were paid to the revenue rulings it would be proper to restrict the retrospectivity of the amended assessments only if the Cusmanos established that they had not intentionally disregarded the taxation law by failing to disclose their ownership of the Dickens Street property. He submitted that the evidence did not establish any such thing. He drew attention to a provision on the reverse side of each relevant assessment and re-assessment under the heading 'Other Property Holdings' which said 'if you own additional property ... that is not included in the assessment you must advise the SRO'.
7. Mr Ginsbourg cross-examined Mr Cusmano obtaining concessions that in the course of his correspondence with the Commissioner commencing in 2006, Mr Cusmano had given careful attention to the various properties included in his Land Tax assessment. Accordingly he must necessarily have noted the omission of the Dickens Street property and yet said nothing to the Commissioner.
8. Mr Ginsbourg submitted that in his talks with Mr Pritchard and then with Ms Chivakul and Mr Raheem, Mr Cusmano lied in saying that he and his wife had 'inherited' the Dickens Street property from his late mother. Mrs Cusmano senior died in 2004 some 20 years after the acquisition by Mr and Mrs Cusmano of Dickens Street. Even if the Cusmanos had not engaged in intentional disregard of the taxation law, he submitted a re-assessment back to 2006 would be in conformity with the revenue rulings 'unless the applicants could prove they did not 'mislead' the [Commissioner]'. Mr Ginsbourg drew attention to the non-disclosure not only of the Dickens Street but also of the Hoppers Crossing property. He also submitted that there were 'false and/or misleading claims about [the] use of the Huntingdale property'.
9. Mr Ginsbourg said that the revenue rulings did not have any special statutory standing or force except perhaps an exercise of the Commissioner's power of administration relevant to revenue statutes. He submitted however that nevertheless it was proper to accord standing and consideration to such policy statements. He referred to and relied upon the determination of Brennan J in Drake v Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634, 645 where His Honour remarked:

Where the policy would ordinarily be applied, an argument against the policy itself or against the application in a particular case will be considered but cogent reasons will have to be shown against its application, especially if the policy is shown to have been exposed to Parliamentary scrutiny.

In the present case there is no suggestion that the policies in question were exposed to Parliamentary scrutiny. He also referred to an unreported decision of the Full Federal Court of Australia in Skoljraev v Australian Fisheries Management Authority (unreported Federal Court of Australia General Division 13 May 1996 Burchett, Einfeld and Kiefel JJ BC 9602478) where their Honours approved and applied the dictum of Brennan J as he then was in Drake's case. Mr Ginsbourg conceded that it was part of the Tribunal's function in carrying out a complete merits review to re-exercise the Commissioner's discretion as to the period of retrospectivity which should apply to the relevant re-assessment.

1. Some elements of the applicants' case can be dealt with in short compass. The respondent is correct insofar as it submits that the process of decision making as distinct from the substance of the decision itself is not a matter proper for consideration by the Tribunal in this jurisdiction . The Tribunal looks at the underlying merits of the relevant dispute and reaches its own conclusion as to what is the correct or preferable decision Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577. The Tribunal's powers in carrying out such a review entail affirming, setting aside or varying the relevant re-assessments. It has no power to consider the award of compensation whether for pain and suffering or otherwise. These elements of the applicants' claim must therefore fail.
2. Similarly, issues such as the rates at which Land Tax is levied and the application or non-application of indexation factors to valuations are matters for Parliament or to be dealt with by Regulation and not for the Tribunal. These issues likewise can be set aside. The arguments and claims based upon them must fail.
3. I turn then to the issue of the retrospective assessments. Mr Cusmano's contention is that in conformity with the Commissioner's revenue rulings no more than three years of retrospectivity should be provided for. Section 19 of the Land Tax Act 1958 provides as follows:

The Commissioner may from time to time amend an assessment by making such alterations or additions to it as he thinks necessary to ensure its completeness and accuracy, and shall notify to the taxpayer affected every alteration or addition which has the effect of imposing any fresh liability or increasing any existing liability and unless made with the consent of the taxpayer every such alteration or addition shall be subject to objection in the same manner and to the same extent as the original assessment but the validity of an assessment shall not be affected by reason only that any of the provisions of this Act have not been complied with.

1. Mr Ginsbourg conceded that the making of the amended assessments in 2008 was insofar as Section 19 of the 1958 Act was invoked an exercise of discretion by the Commissioner which was open to re-exercise by the Tribunal on review.
2. Similarly re-assessments affecting liability under the 2005 Act could be made under Section 9 of the Taxation Administration Act 1997 which states:

(1) The Commissioner may make one or more reassessments of a tax liability of a taxpayer.

(a) from making a reassessment of a tax liability of a taxpayer after an amount previously assessed as being payable by the taxpayer has been paid; or

(b) from making a reassessment of a tax liability under which the taxpayer is assessed as having liabilities that are additional to or greater than those under the previous assessment.

(3) The Commissioner cannot make a reassessment of a tax liability more than 5 years after the initial assessment of the liability, unless -

(a) the reassessment is to adjust tax to give effect to a decision on an objection, review or appeal as to the initial assessment; or

(b) at the time the initial assessment or a reassessment was made, all the facts and circumstances affecting the tax liability under the relevant taxation law of the person in respect of whom the assessment or reassessment was made were not fully and truly disclosed to the Commissioner; or

(c) the reassessment is authorised to be made more than 5 years after the initial assessment by another taxation law.

(4) The time limited by subsection (3) applies even if the initial assessment is withdrawn.

1. Once again Mr Ginsbourg conceded that the decision to re-assess under this provision entailed an exercise of discretion on the Commissioner's part which was reviewable by the Tribunal in this proceeding.
2. It is necessary to turn first to the revenue rulings which are relied upon by Mr Cusmano. As previously observed there are two which seem to be directly relevant: GEN.013 with respect to the 1958 Act and GEN.014 with respect to the 2005 Act. Whilst there are some differences in layout, the two rulings do not significantly diverge except as to the period of retrospectivity, three years for GEN013 and five years for GEN014. GEN.013 states, inter alia:

As a general rule, the SRO will limit the period of retrospectivity for an assessment to a three year period. The commencement date of the period of retrospectivity is determined by reference to the date of a voluntary disclosure, the date on which an investigation commenced or the date on which the taxpayer is advised of a tax liability, whichever occurs first.

1. The ruling also contains the following statement:

However, the SRO does not consider that any limitations should apply when a taxpayer's unpaid taxes arise from an intentional disregard of a taxation law (refer to TAA.006 - Interest and Penalty Tax for examples of intentional disregard of a taxation law).

Liability for Land Tax is assessed on a calendar year basis and accordingly, the period of retrospectivity is three calendar years prior to the current calendar year. The calendar year runs from 1 January to 31 December.

If a taxpayer has an outstanding or untaxed liability and the SRO has not previously assessed the taxpayer in respect of that tax liability, the SRO will assess the taxpayer's Land Tax liability only for the current calendar year. However this will not apply to matters involving special Land Tax assessments or if the SRO is of the view that the taxpayer has mislead the SRO, whether by withholding information or providing inaccurate information relevant to the Land Tax liability. For example, a taxpayer not informing the SRO of a change in entitlement to an exemption previously granted. In this instance the period of retrospectivity set out in the above paragraph will apply [presumably this means three years].

1. Paragraph 26 of Ruling TAA.006 states as follows:

Intentional disregard of a taxation law means circumstances where the tax default is caused by a deliberate act or omission by the taxpayer or the person acting on behalf of the taxpayer. This is determined on the basis of direct evidence of a taxpayer's intention (eg admission by taxpayer) or can be inferred from the surrounding circumstances and conduct of the taxpayer.

1. Paragraph 27 of the ruling gives examples of such conduct. Mr Ginsbourg on behalf of the Commissioner said the Commissioner places reliance upon the following examples as being relevant to these disputes:

(c) Knowingly making false or misleading records or statements;

(d) Knowingly concealing relevant facts on a tax liability.

1. I accept Mr Ginsbourg's submissions that the rulings do not create any binding estoppel on the Commissioner see the VL Investments' case but they are proper matters for both the Commissioner at first instance and the Tribunal on review to consider Drake's case.
2. In the present instance according to Mr Ginsbourg's submissions the Commissioner regards himself as having imposed five years of retrospectivity. Mr Cusmano sees the amended assessments as imposing some six years of retrospectivity. Mr Ginsbourg submits it was right and proper for the Commissioner to do so because the Cusmanos had engaged in intentional disregard of the taxation law. I turn first to the question whether such intentional disregard has been demonstrated.
3. Mr Ginsbourg submitted that the 1958 Act, Section 15(2) as it stood in 1984 required the Cusmanos as persons acquiring an interest in land to lodge a notice in accordance with Form 3 headed 'Include' of Schedule C to the Land Tax Regulations 1969 made under the Land Tax Act. Mr Pritchard's search demonstrated that this had not been done. If the failure to do so was a failure by the law firm acting for the Cusmanos in 1984, this was no excuse. Mr Ginsbourg submitted the obligation to notify of acquisitions of land under the Land Tax Act was so fundamental to the operation of the statute and the collection of land tax that it was a 'non-delegable' duty and the Cusmanos could not be heard to say that they relied upon their solicitors.
4. It is necessary at this point to focus on the nature of the question which I must consider. That question is not whether the Cusmanos were obliged to notify the then Commissioner of Land Tax of their acquisition of the Dickens Street property in 1984 which they undoubtedly were, but rather whether if I conclude that they failed to do so, this failure could be regarded as a wilful disregard of the taxation law on their part.
5. The law firm which acted for the Cusmanos in 1984 on the acquisition of Dickens Street no longer exists, indeed its principal has since served as the Director of Professional Practice of the Law Institute of Victoria. Even if the firm still existed, in accordance with normal document destruction processes the file would long since have been pulped or burned. It is possible that despite the assurances given by the firm to the Cusmanos that all necessary notifications would be given, it simply failed to do so. It is also possible that due notification was made but the notification was misfiled in the Office of the Commissioner. The whole thing becomes the more inexplicable when one considers that Section 15(3) of the Land Tax Act 1958 in 1984 required the vendor to provide notification of the sale to the Commissioner in the form of Schedule D to the Regulations. The evidence before me does not indicate whether a law firm acted for the vendor or not. Given that one law firm might have 'fumbled the ball' on this point, it would seem unlikely that in the same transaction both firms would have 'fumbled the ball'. Yet the transaction does not appear to have come to the attention of the revenue. On balance whilst we cannot be confident as to what happened, it seems more likely that the error was within the office of the Commissioner.
6. Even if contrary to my inclination I were to conclude that the Cusmanos' solicitors failed to give the notification even allowing for the fact that the duty to make notification is not delegable, I could not regard such failure as amounting to a wilful disregard of the tax laws. In a general sense it was reasonable to assume that Mr Cusmano's solicitors would complete the conveyancing processes for which they had been retained especially when the Cusmanos received a letter specifically assuring them that this would be done. Where a proposed plaintiff in a proceeding has sought an extension of time under the Limitation of Actions Act 1958 he or she has been allowed to excuse failure to meet the primary limitation period by explaining that the matter had been left in the hands of competent solicitors with no reason to suppose that they would not have complied with any relevant time limits. See for instance Repco Corporation Limited v Scardamaglia [1996] VicRp 2; [1996] 1 VR 7.
7. Nor do I believe that the Cusmanos could be regarded as guilty of wilful disregard of the taxation law in failing to make a subsequent disclosure. It may well be that the obligation to notify of the acquisition was a continuing one. Mr Cusmano said that he had little in the way of significant Land Tax liabilities until after the year 2000. This is a familiar experience in Victoria. He conceded that in the course of his communications with the Commissioner from 2006 onwards he gave careful attention to the Schedule of Lands for which he and his wife were being taxed. It must have been evident to him that the Dickens Street property was not on the list. Was his failure at that stage to volunteer the ownership of the Dickens Street property to the Commissioner a case of wilful disregard? First, if as I am inclined to conclude, the failure to note the Cusmano's ownership of the Dickens Street property was the result of the Commissioner's error rather than the error of the Cusmano's solicitors, the obligation to notify under the Land Tax Act 1958 had already been satisfied and there was no continuing statutory obligation. Even if that were not so and there were a continuing obligation, Mr Cusmano had said he believed it was significant that the land had been acquired prior to the commencement of Commonwealth Capital Gains Tax which he seems to have thought might make it tax free. He did concede however in answer to a question from me that he had had at one stage owned another pre-Capital Gains Tax property which was subjected to land tax. Mr Cusmano said the issue was 'out of sight out mind for him' in seeking to deal with those matters for which he was being taxed rather than investigating why he was not being taxed for something else Mr Cusmano was less than a model citizen. In the circumstances however I do not believe that his failure to raise the issue with the Commissioner amounted to a wilful disregard of the taxation law.
8. The very small note on the reverse side of the assessment does not change this conclusion. Mr Cusmano said he had not noticed it. Certainly it is a provision on Land Tax assessments which I as a taxpayer have not myself noted. I was not taken to any statutory provision which created the duty referred to on the assessment notice. If as I think likely happened here an error by the Commissioner leads to a taxpayer not being taxed on a particular piece of land, what provision of the Act or the Regulations requires a disclosure from the taxpayer?
9. Mr Ginsbourg said that Mr Cusmano 'lied' when he said that he had inherited Dickens Street from his mother. Mrs Cusmano senior had died in 2004. If Mr Cusmano was to be regarded as having said that he only acquired Dickens Street in 2004 it would be a very considerable and very material lie indeed. If accepted it would dramatically mitigate any legal liability or moral culpability which might attach to him and his wife for having held this land tax free. The period would be only a couple of years rather than over 20. This was the light in which Mr Ginsbourg invited me to see Mr Cusmano's statement that he had had inherited Dickens Street. I cannot however accept that this is the way Mr Cusmano's statement should be seen. First, Ms Chivakul agrees that Mr Cusmano told her that he acquired Dickens Street before Capital Gains Tax was introduced. It is notorious in the matter of public record that Capital Gains Tax was introduced by the Commonwealth Parliament with effect from 1985. Mr Cusmano could not therefore have been seeking to convey to Ms Chivakul that he acquired Dickens Street in 2004 or thereabouts. The point is clinched when one considers that the correspondence from Kevin Power & Co from 1984 relating to the purchase of the property was furnished to the Commissioner in May 2009, that is the month before the meeting with Ms Chivakul took place at the State Revenue Office in June 2009. If it matters, the fact that as I read the limited material, there was no mortgagee involved in funding the acquisition of Dickens Street is supportive of the view that the acquisition was made with some sort of 'portion' provided by Mrs Cusmano senior.
10. The attempt to obtain a principal place of residence exemption for the Huntingdale Road property is in my view best characterised as a 'try on' on Mr Cusmano's part. Mr Cusmano presented as a person full of opinions on what the law might be and what public policy should be in relation to the taxation of landholding. The attempt to obtain exemption for Huntingdale Road was a mixture of presumption and naiveté. I do not believe it amounted to a wilful disregard of the taxation law. Moreover, given that it did not relate to the taxation of Dickens Street at all (except perhaps in some 'knock-on' manner) I do not believe it is relevant to the question as to what retrospectivity if any should be applied to the assessment of Land Tax liability relative to Dickens Street.
11. The final matter for consideration on this question of wilful disregard is the matter of the Hoppers Crossing property. Even although this is now relied upon by the Commissioner on the subject of retrospectivity, it received little or no mention in the course of the hearing. The statement of Ms Chivakul gives the impression that at the 2009 meeting where Mr Cusmano was challenged with respect to disclosure of his family's acquisition of Dickens Street no such challenge seems to have been laid down with respect to the Hoppers Crossing property. Nor was Mr Cusmano cross-examined about this. Amongst the documents filed by the Commissioner I find an e-mail from Mr Cusmano to Ms Chivakul on 29 May 2009 he copies an e-mail from Ms J.A. Pickett of Hayton Kosky Lawyers of Bentleigh where Ms Pickett earlier on 29 May 2009 states:

Attached is a copy of the notice of acquisition which was handed to your bank at settlement.

The bank would have provided same to the SRO together with a copy of the contract in order for the transfer documentation to be stamped prior to registering with the Land Registry.

1. The document in question appears to be under the logo of the State Revenue Office. I note that it refers to the 1958 Act rather than the 2005 Act. It showed an acquisition from a company known as Simcot Assets Pty Ltd with the date of possession being given on 5 September 2005. I note however a date at the very foot of the attached document, 29 May 09 which is difficult to square with the statement that the notice of acquisition was 'handed over to your bank at settlement'. The transfer which is also to be found in the material filed by the Commissioner under Clause 89 of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 shows that National Australia Bank Limited was the lodging party at the Office of Titles. In the circumstances there is sufficient material to exclude any finding of a wilful disregard of the taxation law with respect to the acquisition of the Hoppers Crossing property. In any event even if this were contrary to my inclination the case of wilful disregard it would be wilful disregard with a subject matter different from assessment of Land Tax for the Dickens Street property and therefore not material to retrospectivity as to that property.
2. On the material before me I conclude that the Cusmanos have not with respect to their Land Tax liability for Dickens Street been guilty of wilful disregard of the taxation law, nevertheless as previously observed Mr Cusmano has not acted as a model citizen would. I do not believe in the circumstances that the option provided for in the revenue ruling for no retrospectivity at all would be appropriate.
3. I conclude therefore that the proper period of retrospectivity of assessment relative to Dickens Street should be three years. The next question is how and from what date is that three years to be calculated.
4. I should observe for completeness that GEN.014 which is the current revenue ruling on retrospectivity and which postulates a five year period of retrospectivity 'does not apply to tax arrears which occurred before 1 July 2004'. Moreover, it is expressed to be made under the Taxation Administration Act 1997 which does not apply to Land Tax assessments before 2006. GEN.014 also does not apply to retrospective Land Tax assessments from and after 1 January 2009, this matter being dealt with in another ruling ATO007.
5. Returning then to GEN.013. The three year period which I regard as the appropriate period of retrospectivity is according to the ruling to be calculated by reference to the date of a voluntary disclosure, the date on which the taxpayer is advised of a tax liability or the date on which an investigation commenced. An investigation is said to commence 'when a taxpayer is informed by the SRO in writing of an investigation into a possible tax default by the taxpayer'. Mr Cusmano complained bitterly that he was not advised that his Land Tax affairs were under investigation. I did not understand the Commissioner to deny this allegation prior to the issue of the reassessments. The result then was that given that the reference date is in 2008, the retrospectivity should not reach back beyond 2006.
6. I turn then to the issue of the valuations of Hoppers Crossing. Mr Cusmano's complaint is that the unimproved capital value should be revisited and that in the way in which events have occurred he has been deprived of any effective means of seeking redress against what he regarded as an excessive unimproved capital value fixed for municipal purposes and adopted by the Commissioner for Land Tax purposes.
7. Mr & Mrs Cusmano became entitled to possession of the land at settlement in 2005 hence the first relevant taxation year is 2006. All assessments therefore have been made under the 2005 Act. Section 97(3) of the Taxation Administration Act 1997 which deals with objection at the Tribunal with respect to assessments of Land Tax under the land Tax Act 2005 provides that a taxpayer:

Cannot object to an assessment of Land Tax on any ground relating to the value of the land if the assessment is based on a valuation made by a rating authority under the Valuation of Land Act 1960.

1. That seems to be a conclusive answer to the applicant's case on this valuation issue. If as a matter of general law there were in the circumstances some entitlement which Mr & Mrs Cusmano had to compensation it would be necessary for them to pursue it elsewhere.
2. Moreover, Section 16(6A) of the Valuation of Land Act 1960 provides as follows:

A person who has been given a notice of valuation and who is subsequently assessed for land tax based on that valuation is deemed to be a person aggrieved by the valuation when the person receives the notice of assessment.

1. This appears to give a separate right of objection to the Cusmanos based upon their assessment for Land Tax for the Hoppers Crossing property. By virtue of Section 18(c) the Cusmanos had two months 'after receiving the notice of assessment of Land Tax' to commence the objection processes under the Valuation of Land Act. An objection so launched could ultimately find a review proceeding in the Tribunal but under a different statute and under a different List. Sitting in the Taxation List exercising jurisdiction under the Taxation Administration Act 1997 I cannot entertain such a matter.

1. Section 111(1) of the Taxation Administration Act is as follows:

The Tribunal must review a matter referred to it and, subject to subsection (2), may confirm, reduce, increase or vary the assessment or decision.

1. This applies to the Tribunal's jurisdiction insofar as it relates to the 2005 Act with respect to matters arising under the 1958 Act. No specific set of powers is set out in the 1958 Act which itself deals with the issue of Tribunal reviews for tax assessed under its terms.
2. I have expressed uncertainty in the past as to whether in matters such as this the Tribunal has available to it the review powers set out in Sections 50 and 51 of the Victorian Civil and Administrative Tribunal Act 1998 or whether the provisions in the Taxation Administration Act are to be regarded as implicitly excluding those powers. I considered this issue at some length at paragraphs [20] to [34] in Roth v Commissioner of State Revenue [2006] VCAT 2356, ultimately refraining from expressing a final view. The answer to the question is not entirely plain. The powers set out in Section 111 are relatively limited. In my view the convenient course is to regard the sets of powers in Section 11 and Section 51 as cumulative. The Victorian Civil and Administrative Tribunal Act 1998 postdates the Taxation Administration Act so the thought that the earlier Act seeks to exclude the later Act raises certain conceptual difficulties. Moreover, treating the powers as cumulative is in accordance with the approach adopted in similar circumstances but under a different statute by Balmford J in Rumpf v Mornington Peninsula Shire Council [2000] VSC 311; (2000) 2 VR 69 106 [128] - [132]. Accordingly the order which I propose making is in accordance with Section 51(2)(d) of the Victorian Civil and Administrative Tribunal Act 1998. I will set aside the assessments in Proceedings T9/2009, T10/2009 and T11/2009 remitting those assessments to the respondent Commissioner with a direction that they be varied in accordance with these reasons. The respondent's assessments are otherwise affirmed.