Kher v Kuljit Singh Gosal trading as Gosal Conveyancing

NCAT Appeal Panel|2022-02-22|Before: Blake AM

2021/00259518 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 24 August 2021 Before: G Blake AM SC, Senior Member File Number(s): GEN 21/16605

Summary

The appellants are purchasers ("Purchasers") of a parcel of vacant land under a contract for the sale and purchase ("Contract") with the second respondent ("Vendor"), on which they were going to build a home to live in. In accordance with the terms of Contract, at settlement an adjustment was made with the purchaser allowing $8,269.01 for land tax attributable to the land.

Background

On 21 January 2021, the Purchasers executed the Contract. On the second page of the Contract under the heading "Tax information (the parties promise this is correct as far as each party is aware)" there is a provision "Land tax is adjustable" followed by two boxes: the first box is followed by the word "NO"; the second box is followed by the word "Yes". On this Contract, the box "Yes" was marked with an "X". This meant that it was a term of the Contract that land tax was to be adjusted.
Relevant clauses in the Contract include the following: "14.1 Normally, the vendor is entitled to the rents and profits and will be liable for all rates, water sewerage and drainage service and usage charges, land tax levies and all other periodic outgoings up to and including the adjustment date after which the purchaser will be entitled and liable. 14.2 The parties must make any necessary adjustments on completion. 14.3 If an amount that is adjustable under this contract has been reduced under legislation, the parties must on completion adjust the reduced amount. 14.4 The parties must not adjust surcharge land tax (as defined in the Land Tax Act 1956) but must adjust any other land tax for the year current at the adjustment date - 14.4.1 only if the land tax has been paid or is payable for the year (whether by the vendor or by a predecessor in title) and this contract says that land tax is adjustable; 14.4.2 by adjusting the amount that would have been payable if at the start of the year - • The person who owned the land owned no other land;…"
Special Condition 33.1 to the Contract contains a number of amendments. Of relevance is 33.1(z) which provides as follows: "Clauses 14.4.2 - delete and replace it with the words 'By adjusting the amount actually paid or payable by the vendor'."
Prior to executing the Contract, on 15 January 2021 ("15 January correspondence") Mr Gosal sent an email to the Vendor's solicitor about the adjustment of land tax as follows: "1. Mark land tax as NO. Our client is not prepared to contribute towards the Vendor's land tax liability that arise from the land holdings of the vendor. Land tax is not an outgoing of the property. Notwithstanding any other clause in the contract No land tax shall be payable by the purchaser." [sic]
On 18 January 2021, the Vendor's solicitor replied stating that the Vendor did not agree to marking land tax as "NO" ("18 January correspondence").
On 19 January 2021, Revenue NSW issued a land tax certificate under s 47 of the Land Tax Management Act 1956 (NSW) ("LTMA").
On 19 January 2021, Mr Gosal executed a s 66W certificate. This had the effect of waiving the cooling off period in relation to the Contract. Mr Gosal certified in the s 66W certificate that he had explained to the Purchasers the effect of the Contract.
A Land Tax Assessment Notice for the 2021 land tax year issued to the Vendor, dated 21 January 2021, evidenced the Vendor's land tax liability in respect of the land the subject of the Contract.
On 2 March 2021, Mr Kher emailed Mr Gosal to enquire how much would be taken automatically from the St George Bank account on settlement. In an email sent on 4 March 2021 at 17:10 pm, after settlement earlier that day, Mr Kher noted that he could see a payment from his St George account for "settlement drawing" in the amount of $491,802.73 but that on 3 March 2021 Mr Gosal had indicated that an amount of $484,000 to $485,000 would be required for drawing on settlement and "luckily" he had moved $491,000 into the account yesterday otherwise the Pexa transfer would have bounced.
At some time prior to settlement of the Contract on 4 March 2021, a settlement adjustment sheet was prepared by the Vendor's solicitors. The settlement sheet recorded an adjustment made for land tax as follows: the total land tax paid by the Vendor for the period 1/1/21 to 31/12/21 was $9,994.00 and so the adjustment allowed by the Purchasers for 302/365 days was $8,269.01.
Mr Gosal provided a settlement sheet and s 47 certificate to the Purchasers on 6 March 2021; see email to Mr and Mrs Kher sent that day at 07:17 am.
On 6 March 2021, Mr Kher emailed Mr Gosal as follows: "We have queries regarding land tax as follows 1) Section 47 certificate says 'There is no land tax (including surcharge land tax) charged on the land up to and including the 2021 land tax year', does it mean our land is not subject to land tax? 2) Could you please advise how is land tax calculated and is it a one-time payment for us as we will be building a house soon? The amount of $8,269.01 appears to be huge and we did not expect it at all. 2) [sic] We were not informed of land tax when you spoke to me the other day, you had asked me to have max $485K available in St George Bank account, but St. George deducted $491,802.73 and most of the difference comes from land tax. If we only had $485K available in St. George bank account, the settlement drawing would have bounced and there would have been a delay and settlement issues in addition to penalty for us. Could you please explain?"
Mr Gosal responded to these questions in an email sent on Monday, 8 March 2021 as follows: "Land tax financial year is from 1 January to 31 December. At settlement you have paid your share of land tax from date of settlement to 31 December. You will not be liable to pay land tax in the next financial year if this land becomes your principle [sic] place of residence. If you still require further clarification you are welcome to call me or Revenue NSW."
On 8 March 2021, Mr Kher contacted Revenue NSW and was told that the Purchasers would not be liable to pay land tax for a principal place of residence and that land tax is not pro-rated.
On 18 March 2021, Mr Kher emailed the Vendor directly querying the payment of $8,269.01 for land tax. Mr Kher said that he had called NSW Revenue a couple of times and they had confirmed that they were not liable for land tax as they did not own the land on 31 December 2021 and, moreover, the land will be used to build their principal residence and was exempt from land tax. The Vendor requested Mr Kher direct any questions to his own solicitor.
On 6 April 2021, the Purchasers contacted Revenue NSW again in respect of land tax for the property. Revenue NSW emailed Mr Kher as follows: "As discussed in our phone call, the land in question … has an average value of $626,500 and is under the land tax threshold $755,000, the taxable value of each parcel of land is determined on the average value from the current year and the two past years, where applicable. Land tax is calculated on the total value of all your taxable land above the land tax threshold, not on each individual property. If the combined value of your land does not exceed the threshold no land tax is payable. Your liability for each year is based on the value of all land you own on 31 December in the previous year. I have also added a clause 6 exemption to the land, which allows your clients 4 years from the date of purchase to construct and move into their property. They will then need to occupy that property for a continuous period of six months. When they have moved in they can then claim their principal place of residence exemption."
The Purchasers brought proceedings in the Tribunal against Mr Gosal and the Vendor for misleading and deceptive conduct, misrepresentation and false representations in respect of the adjustment of land tax. Additionally, the Purchasers claimed Mr Gosal gave negligent advice and that the Vendor was unjustly enriched. The basis of the claim was to the effect that the Purchasers told Mr Gosal and the Vendor that they were purchasing the land to build a home as a principal place of residence; land tax was incorrectly charged for the land which is below the land tax threshold and also exempt as a principal place of residence; and in respect of Mr Gosal, the Purchasers were given negligent advice to pay land tax which has caused them loss.
The relief sought by the Purchasers was an order in the sum of $8269 representing the land tax adjustment.

Tribunal's decision

In the Decision, the Tribunal began by setting out the uncontroversial factual background of the case which we have summarised above.
The Tribunal set out the correct principles under the Fair Trading Act 1989 (NSW) ("FT Act") and the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (NSW) ("ACL") in relation to claims for misleading and deceptive conduct, negligence and unjust enrichment.
While the Tribunal found it had jurisdiction to determine the claim against Mr Gosal, it found it did not have jurisdiction in relation to the claim against the Vendors on the basis that the Vendor did not supply to them "goods" or "services" within the meaning of the FT Act.
The Tribunal had regard to each of the statutory declarations of Mr and Mrs Kher which stated (in identical terms) that they did not receive accurate or adequate advice about land tax before executing the Contract and if they had received that advice they would have accepted it and not executed the Contract.
The nature of the advice the Purchasers alleged they should have received was confined to advice that no land tax was payable for the reason that it was to be their principal place of residence and the value of the land was under the land tax threshold.
None of the parties to this appeal provided us with a copy of the transcript of the proceedings. However, the Tribunal's decision of 24 August 2021, records that in cross-examination: 1. each of Mr and Ms Kher gave evidence that they did not receive any advice about the payment of land tax; 2. Mr Gosal gave evidence that he explained to the Purchasers the 18 January correspondence regarding the payment of land tax, and explained that they were liable for stamp duty, land tax and other charges.
Importantly, the Tribunal was not satisfied that the Purchasers were credible or reliable witnesses. In particular: 1. The Tribunal found that it was implausible that given the 15 January correspondence where Mr Gosal expressly requested the removal of the land tax adjustment provision in the Contract, that Mr Gosal would not have communicated to the Purchasers, and the Purchasers would not have sought from Mr Gosal the Vendor's response to that request. 2. The Tribunal also found there was a "fundamental inconsistency" between the Purchasers' claim and their evidence in that in their claim they alleged they were given negligent advice to pay land tax to the Vendor and in their statutory declarations said they did not receive accurate and adequate advice about land tax but in cross-examination said they were given no advice about their liability. 3. It was implausible that the Purchasers had not collaborated on their evidence given the statutory declarations were expressed almost identically.
These findings were not challenged in this appeal. However the findings were fundamental to the ultimate conclusion reached by the Tribunal that it was not satisfied the Purchasers had established that Mr Gosal failed to inform them they were required to pay the adjusted amount for land tax.

Notice of appeal

Neither the Purchasers, Mr Gosal, nor the Vendor had legal representation on this appeal.
The appellants rely on five grounds of appeal set out in its Notice of Appeal as follows: "1.Tribunal erred in failing to consider below land tax laws and nullity principle. Tribunal erred in paragraph numbers 1 to 40 of its decision made on 24 August 2021 by failing to consider and failing to give adequate reasons that land tax terms in the contract of sale are null and void and have no legal effect being illegal contrary to land tax laws because both respondents knew that the average land value is $626,500 that is under the land tax free threshold $755,000. Tribunal failed to consider and failed to give adequate reasons that Gosal Conveyancing admits that it failed to give this advice to the applicants and if Gosal Conveyancing had given this advice then the applicants would not have paid land tax and suffered a loss of land tax money paid. 2.Tribunal erred in paragraph numbers 1 to 40 of its decision of 24 August 2021 by failing to consider and failing to give adequate reasons that land tax terms in the contract of sale are null and void and have no legal effect being illegal contrary to land tax laws because both respondents knew that land tax was not payable for the block of land being used to build a home to live in. Tribunal failed to consider and failed to give adequate reasons that Gosal Conveyancing admits that it failed to give this advice to applicants and if Gosal Conveyancing had given this advice then applicants would not have paid land tax and suffered loss of land tax money paid. 3. Tribunal erred in paragraph numbers 1 to 40 of its decision of 24 August 2021 by failing to consider with adequate reasons that land tax withdrawal by Gosal Conveyancing in Annexure B to the statutory declaration of Satish Kher being email dated 4 March 2021 at 17.10 (settlement at 11.30am on same day) "I can now see a payment amount for $491,802.73 for settlement drawing from my St George account. Yesterday you had indicated an amount of $484-485K when you spoke to me. Luckily, I had moved $491K yesterday from my online savings account. If I had moved $485K to my 768 account, the Pexa transfer would have bounced today," that made the findings that applicants received land tax advice from Gosal Conveyancing about Section 9 and Section 9AA and Section 10(1)(r) and Sch 1A Clause 6 and Section 62TBA of Land Tax Management Act 1956 an error of law contrary to evidence. 4. Tribunal erred in paragraph numbers 1 to 40 of its decision of 24 August 2021 by failing to transfer on its own motion under sch 4 of 6(1) of Civil and Administrative Tribunal Act 2013 proceedings against second respondent if Tribunal lacked jurisdiction to set aside null and void and illegal land tax terms in contract of sale. 5. Any other errors Appeal Panel notices on its own motion consistent with Prendergast at [12]."

Reply to appeal

The first respondent filed a Notice of Reply to Appeal in which it was stated: "1.The appellants have paid right amount of state tax as per Revenue NSW assessment. Land tax threshold of $755,000.00 will apply to the appellants in the next land tax year i.e. 01 January 2022 to 31 December 2022. In the current land tax year (01 January 21 to 31 December 2021) which is the settlement year, land tax has been paid by the appellants as per terms of the 'Contract or the sale and purchase of land'. Land tax threshold of $755,000.00 has applied to the vendor in the current land tax year. Copy of land tax assessment by the Commissioner of Revenue NSW has already been provided to the appellants. 2.Appellants were aware of that land tax shall be payable at the time of settlement as per terms of the contract. Both appellants attended to the office of Gosal Conveyancing prior to exchange of contracts and terms of the contract were explained to both of them. Appellants were well aware of that at settlement balance of the purchase price, stamp duty, land tax, council and Sydney Water rates, Professional fee and disbursements are payable at the time of settlement. 3. If the appellants thinks that it is unauthorised land tax then they should appeal to the Commissioner of Revenue NSW for the reassessment of the land tax. Both appellants have given authority to St George Bank to use shortfall funds required for the settlement from their saving account."
The second respondent's Reply to Appeal replied to the appellants' grounds of appeal as follows: "The appellant was provided clear instructions on land tax payable prior to exchange of contracts and at the time of settlement."
Both the first and second respondents stated that the Purchasers required permission to appeal and that they opposed permission being granted.

Materials before the Appeal Panel

The material before us relied on by the Purchasers included the application of 15 April 2021 in the Tribunal below; email correspondence of 17 April 2021 from the Purchasers to the Tribunal; a Statutory Declaration of Satish Kher and a Statutory Declaration of Sonia Kher both dated 27 July 2021. The Purchasers lodged an undated 5 page written submission, additional written submissions lodged on 8 October 2021 and an emailed submission of 22 February 2022 about the jurisdiction of the Tribunal to determine the claim against the Vendor.
The material relied on by Mr Gosal and the Vendor included the Land Tax Assessment Notice of 21 January 2021; the settlement sheet; and the Contract. Mr Gosal also lodged and relied on a section 47 land tax certificate; stamp Duties Notice of Assessment and email correspondence between the Vendor's solicitor and Mr Gosal in the period 15 January to 18 January 2021.
The second respondents did not file any written submissions.

Scope and nature of internal appeals

An appeal to the Appeal Panel does not simply provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must demonstrate either an error on a question of law, which may be argued as of right; or that permission (that is, "leave") to appeal should be granted to bring the appeal: CAT Act, s 80(2).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 ("Prendergast"), the Appeal Panel stated at [12]: "In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent."
The Appeal Panel then set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law has been applied; 4. Whether there was a failure to provide procedural fairness; 5. Whether the Tribunal failed to take into account relevant (ie mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there is no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
A failure to afford procedural fairness may arise in circumstances where the Tribunal fails to provide adequate reasons for its decision: NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (Orr). Bell P (as he then was) at [66] and [71] (Ward JA at [109] agreeing) held: "[66] In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley). …[71] That having been said, even in the less formal setting of a tribunal which has significant powers the exercise of which is capable of affecting the lives of citizens in profound ways, there are certain minimum characteristics that a Tribunal's reasons must possess. These are really supplied, in relation to the Tribunal, by s 62(3) of the CAT Act which, as noted at [52] above, requires there to be set out in reasons (when requested by a party): 62 Tribunal to give notice of decision and provide written reasons on request … (3) (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made."
A material failure by the Tribunal to respond to a "substantial, clearly articulated argument relying upon established facts" may be characterised either as a failure to afford natural justice or as a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24]-[25] (Gummow and Callinan JJ; Hayne J agreeing at [95]); DVE18 v Minister for Home Affairs (2020) 276 FCR 401; [2020] FCAFC 83 at [34].
These principles were applied by the Appeal Panel in Rice Marketing Board for the State of New South Wales v Forbidden Foods Pty Ltd [2020] NSWCATAP 182 at [170]-[175] ("Rice Marketing"). President Armstrong and Principal Member Britton stated as follows at [175]: "Where, as here, the Tribunal is presented with numerous submissions about a diverse range of issues, the dividing line between those which can be characterised as having been seriously advanced, obliging the Tribunal to consider them, and those which cannot, can be difficult to identify. The Tribunal was not required to consider every submission made by a party. As the Full Court of the Federal Court stated in Applicant WAEE at [49], the Tribunal was not obliged to consider submissions that were misconceived or those where it had rejected the factual premise upon which the submission was based. Nor, in our view, was the Tribunal required to consider poorly developed submissions or those given scant attention by the submitting party. We reject the Board's submission that had the Tribunal accepted the subject submission, a finding that cll 1(d) and 1(f) applied to the Independent Verification Reports was inevitable. Nonetheless, we accept that the subject submission was relevant to that determination. It was a substantial submission, squarely raised and seriously advanced by both the Board and SunRice. As a consequence, the Tribunal was obliged to address that submission."

Leave to appeal

The circumstances in which the Appeal Panel may grant leave to appeal from a decision made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the CAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act. As to this discretion, it was said by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [84(2)]: "(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c ) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact- finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."

Land tax legislation

Relevant to this appeal is the operation of land tax legislation.
Land tax is imposed on land in New South Wales by the combined operation of the Land Tax Act 1956 (NSW) and the LTMA. The Land Tax Act imposes land tax, prescribes the rates of land tax payable and is to be read and construed with the LTMA. The LTMA makes provision relating to the imposition, assessment and collection of land tax.
Section 4 states that the LTMA is to be read together with the Taxation Administration Act 1996 (NSW) ("TAA") which provides for the administration and enforcement of the LTMA and other taxation laws.
By ss 7, 8, 9 of the LTMA, land tax is payable by the "owner" of land upon the taxable value of the land owned by the "owner" as at midnight on 31 December immediately preceding the year for which the land tax is payable and which is not exempt from taxation.
One such exemption is the principal place of residence exemption for unoccupied land which the owner intends to use and occupy solely as a principal place of residence (cl 6 of Sch 1A LTMA).
Land tax is calculated on the value of the owner's parcel of land in excess of the relevant "land tax threshold".
Relevantly, an "owner" is defined in s 3 of the LTMA as follows: Owner includes: (a) in relation to land, every person who jointly or severally, whether at law or in equity: (i)is entitled to the land for any estate of freehold in possession, or (ii)is entitled to receive, or is in receipt of, or I the land were let to a tenant would be entitled to receive, the rents and profits thereof, whether as beneficial owner, trustee, mortgagee in possession, or otherwise… … (d) a person who, by virtue of this Act, is deemed to be the owner.
There is no provision in the LTMA that deems a purchaser, under a Contract of sale and purchase of land, to be an "owner" of the land.
Land tax is a first "charge" on land in priority to all other encumbrances on land. A certificate issued by Revenue NSW under s 47 of the LTMA effectively confirms there is no land tax "charge" on the land, that is, there is no unpaid land tax in respect of the land.
The production of a Land Tax Assessment Notice is conclusive evidence of the making of that assessment and that all the particulars are correct (s 119 TAA, Fyna Projects Pty Ltd v Chief Commissioner of State Revenue (2018) 99 NSWLR 673; [2018] NSWCA 331 at [46]-[52] per Barrett AJA, Beazley P and Meagher JA agreeing).

The Purchasers' submissions

Central to the Purchasers' argument was a contention that the land tax terms in the Contract were null and void and/or that no adjustment should have been made because there was no land tax liability in respect of the land. This contention was based on the Purchasers' construction of various documents and information received by them, in particular, the advice they received from Revenue NSW after settlement that they have no liability to land tax if the land is their principal place of residence or the land is under the land tax threshold.
The Purchasers said that the Vendor knew that the Purchasers had no land tax liability and Mr Gosal should have given them advice that they should not pay land tax under cll 14.2, 14.3 and 14.4 of the Contract because they had no tax liability. In particular, the Purchasers contended that cl 14.3 should have been applied as the land tax amount adjustable under the Contract was reduced by the land tax legislation for the reason that the land was under the land tax threshold and it was to be their principal place of residence. Therefore, so the argument went, there was no liability and no amount to adjust. They also contended that cl 14.4.2 meant that no land tax adjustment could be made because the Vendor owned other land at the relevant time. Alternatively, they said cl 14.4.2 was void for uncertainty.
The Purchasers also maintained their argument on this appeal that they did not know they were obliged to pay land tax under the Contract.
It was also contended that the Tribunal erred in finding no jurisdiction to determine the cause of action against the Vendor. This error was said to arise from the Tribunal failing to have regard to the definition of "services" in s 79F of the FT Act which includes "any other rights (including rights in relation to and interests in property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce," and the definition of "property" in s 7 of the Conveyancing Act 1919 (NSW) as including "real and personal property, and any estate or interest in any property real or personal, and any debt, and anything in action, and any other right or interest". The Purchasers contended that while the Tribunal was correct about the definition of goods, it did not have proper regard to or give adequate reasons concerning the definition of "services".
Mr Kher also submitted that the Tribunal refused to hear the case against the Vendor for the reason that the Tribunal had formed the view it had no jurisdiction at the outset of the hearing. For the first time in closing submissions, Mr Kher contended that this amounted to a denial of procedural fairness which is an error of law.
When we asked Mr Kher how the Vendor misled the Purchasers, it was contended that the Vendor knew there was no land tax liability for the land but represented that there was such liability. This contention appeared to be based on the s 47 certificate which the Purchasers understood to be a certificate to the effect that there was no land tax liability for the 2021 land tax year in respect of the land, coupled with the Purchasers' belief that as the land was under the land tax threshold and was to be their principal place of residence, there was no land tax liability in respect of the land for the 2021 land tax year. For reasons explained below this belief was fundamentally flawed.
When we asked Mr Kher how he put his case that the amount of land tax paid was recoverable loss caused by the alleged wrongful conduct of Mr Gosal or the Vendor, he said they would have refused to pay the land tax and would have proceeded to obtain title to the land through an action for specific performance of the sale contract under which they were not obliged to pay the land tax. This assumed that the sale contract had been entered into and also appeared to assume that the land tax terms would be found to be null and void.
The Purchasers requested that we transfer the proceedings to the Local Court Small Claims Division which it contended the Tribunal failed to do by its own motion under sch 4 cl 6(1) of the CAT Act.

Mr Gosal's submissions

Mr Gosal submitted that there was no error by the Tribunal. Mr Gosal submitted that the default clause in a Contract for the sale and purchase of land relating to land tax is "NO" but in this Contract it was a specific term that land tax be adjusted. It was up to the Vendor to agree or not agree to the Purchasers' proposal that there be no land tax adjustment of the Vendor's land tax liability (as communicated in the 15 January correspondence). The Vendor did not agree to amend the term and Mr Gosal informed the Purchasers.
Mr Gosal also contended that the Purchasers did not argue before the Tribunal that cl 14.3 and cl 14.4.2 required that there be no land tax adjustment. If such case had been raised, Mr Gosal said it was readily answered by reference to the adjustment at settlement which was in conformity with cll 14.2 and 14.4 as amended by special condition 33.1(z). As the Vendor's land tax liability had already been paid by the Vendors, the adjustment was made on a proportionate basis.

Vendor's submissions

Ms Zhu, who appeared on behalf of the director of the Vendor, also contended there was no error by the Tribunal. Ms Zhu submitted there was no evidence before the Tribunal that the Vendor had misled the Purchasers; the Purchasers were not entitled to a land tax refund from the Vendor; and even if the Tribunal erred in relation to the jurisdiction finding, it would have made no difference because the Purchasers failed to demonstrate any misleading conduct or breach of the Contract by the Vendors.

Grounds 1 and 2

We do not perceive any error of the Tribunal in relation to grounds 1 and 2 set out in the Notice of Appeal.
First, we are not satisfied that the contentions made on this appeal were put to the Tribunal or put sufficiently clearly so as to require the Tribunal to address them. As noted in Rice Marketing, the Tribunal is not required to deal with misconceived arguments, those given scant attention by the submitting party or those which are poorly developed.
Secondly, even if the Purchasers' contentions, or contentions of a like nature, were put to the Tribunal, whilst it may have been desirable that they be expressly responded to in the Decision, they were in any event, wholly misconceived for the following reasons.
The advice given to the Purchasers by Revenue NSW related to their land tax liability once they became the owners of the land. No land tax liability would arise for the Purchasers in respect of the land under the LTMA until 31 December 2021 (for the 2022 land tax year). At that taxing point, any exemption or threshold which applied to the Purchasers would be relevant. The only party with a land tax liability under the LTMA for the 2021 land tax year was the owner of the land - that was the Vendor.
Further, the Purchasers misconstrued the nature and effect of the s 47 certificate. This is apparent from their contentions in this appeal and the communication to Mr Gosal on 6 March 2021 referred to in [16] above. A s 47 certificate merely records that there is no charge on the land which would otherwise exist if land tax was unpaid. The Vendor's 2021 Land Tax Notice of Assessment is conclusive evidence of the Vendor's land tax liability in respect of all of the land owned by the Vendor for the 2021 land tax year.
The obligation that the Purchasers had relating to the adjustment of the Vendor's land tax was purely a contractual obligation and not one arising under the LTMA. The Purchasers did not pay "land tax" on settlement in respect of the land: they paid an amount to the Vendor representing a proportion of the Vendor's land tax liability for the 2021 land tax year (which the Vendor had already paid) as they were obliged to do under the terms of the Contract.
Contrary to the Purchasers' contention, the pertinent contractual terms were not null and void because of land tax laws. This is for the reason that no principal place residence exemption or tax free threshold applied to the Vendor as owner of the land: the exemption and tax free threshold would only have relevance for the Purchasers for the subsequent land tax (ie as at 31 December 2021 for the 2022 land tax year) at which time they would be assessable to land tax as the owners of the land.
Consequently, Mr Gosal could not have given them the advice they contend they should have received to the effect that they had no land tax liability because the land was under the land tax threshold and the principal place of residence exemption applied to the land. Nor could the Purchasers' contention against the Vendor, to the effect that it misled or incorrectly charged land tax on land which was under the land tax threshold, be maintained.
Further, in respect of the Purchasers' contention on this appeal concerning cl 14.3 of the Contract, this had no application to the adjustment made on settlement because the land tax legislation did not have the effect contended for by the Purchasers.
Consequently, each of Grounds 1 and 2 of this appeal fail.

Ground 3

Ground 3 concerns the Tribunal's finding that it was not satisfied that Mr Gosal failed to inform the Purchasers that they were required to pay the adjusted amount of land tax. We regard this ground as raising an error of law in providing inadequate reasons about this conclusion because the email from Mr Kher to Mr Gosal on 4 March 2021 was not addressed or there was an error of law by overlooking this evidence.
However, as we have already indicated, the Tribunal's conclusion on this issue was based upon its adverse conclusion about the credibility of the Purchasers as witnesses (at [37] and [38] of the Decision) and there is no challenge to that credibility conclusion on appeal.
Furthermore, it is impossible to see how any criticism of the Tribunal of this nature could have affected the outcome of the Purchasers' claim for the amount of the land tax. If the Purchasers' claim was that they would not have entered into the sale contract if they had been informed of the requirement to pay the vendors adjusted land tax, then the measure of their loss, if this was established, was the difference, if any, between what they paid to acquire the land and the true value of the land. However, there was no evidence presented to the Tribunal about this. On the other hand, once they had entered into the Contract they were legally bound to pay the adjusted land tax.
Accordingly, this ground of appeal fails.

Ground 4

This ground of appeal is misconceived. The Tribunal's conclusion about jurisdiction was not founded upon any decision that it lacked jurisdiction to set aside the land tax terms, nor was the Tribunal required to direct a transfer of proceedings to another Court.
The Tribunal found that it had no jurisdiction in respect of the claim against the Vendor as there was no consumer claim within the meaning of s 79E of the FT Act "having regard to the meaning of "goods" in s 79D of the FT Act which excludes an interest in land, and "services" in s 79F(1) of the FT Act": at [26].
In a submission filed on the morning of the hearing of the appeal, the Purchasers also contended that the Tribunal erred in determining that the Purchasers did not have a consumer claim against the Vendor.
The Purchasers submitted that the definition of "services" in s 79F(1)(i) of the FT Act includes any rights in relation in an interest in property. It was submitted that while the Vendor had the legal interest in the land, it supplied to the Purchasers, pursuant to the terms of the Contract, rights in relation to land and/or in the Vendor's interest in the land.
Unlike the definition of "goods" in s 79D, the definition of "services" does not contain an express exclusion in respect of an "interest in land". Section 79F(1) provides: 79F Meaning of "services" (1) For the purposes of this Part, a reference to services is a reference to any of the following-- (a) the performance of work (including work of a professional nature), whether with or without the supply of goods, (b) the provision of gas or electricity or the provision of any other form of energy, (c) the provision, or the making available for use, of facilities for amusement, entertainment, recreation or instruction, (d) the letting of premises for vacation or recreational purposes, (e) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction, (f) the provision of insurance cover, (g) the rights or benefits provided, granted or conferred under a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking, (h) the provision of credit, (i) any other rights (including rights in relation to, and interests in, property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce.
At the hearing of the appeal Ms Zhu contended that even if the Tribunal erred in respect of the issue about jurisdiction, that made no difference to the outcome for the reason that the Purchasers failed to satisfy the Tribunal that there had been a breach of the terms of the Contract and that the Vendor had engaged in misleading conduct. This was said to be because the Purchasers had not proved its claim against the Vendor.
The Tribunal did not refer to the expanded definition of "services" in s 79F(1)(i) and did not elaborate on its conclusion that the circumstances did not fall within the definition of "services".
However, it is unnecessary for us to decide whether the Tribunal erred in this regard because it is clear that even if we had come to the conclusion that the Tribunal did have jurisdiction with respect to the claim against the Vendor (about which we express no view) the claim against the Vendor must fail. It was a term of the Contract that the Vendor's land tax liability be adjusted on settlement. That had nothing to do with whether the Purchasers had a land tax liability under the LTMA once it became the owner of the land. There was no evidence of misleading and deceptive conduct or unjust enrichment and the Purchasers arguments against the Vendors were misconceived for the reasons expressed at [71]-[76] above and [95] below.

Leave to appeal

The Purchasers relied upon Grounds 1 to 4 not only as errors of law but also as appealable errors for which leave to appeal was sought on the grounds that the decision was not fair and equitable or was against the weight of the evidence.
For the reasons we have already given we do not accept that these grounds for seeking leave to appeal have been established.
Furthermore, the Purchasers' contentions do not establish that they may have suffered a substantial miscarriage of justice or that the Tribunal's decision was affected by an error of principle or plain error of an important fact or an unorthodox approach to fact finding such as to warrant there be a grant of leave to appeal.

At a glance

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Before

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Judgment (21 paragraphs)

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Legislation Cited (8)

Cases Cited (22)