Perpetual Trustees Australia Ltd v Chief Commissioner of State Revenue

Land and Environment Court (NSW)|1998-06-17|Before: Bignold J, Lloyd J, Mr P

The Applicant contends for a negative answer to each of these questions and the Respondent contends to the contrary.

B. DID THE RESPONDENT INSTITUTE ITS APPEAL WITHIN THE PRESCRIBED TIME?

The Rules of Court, Pt 13 r 35(1) provide that an appeal under the LEC Act s 56A "…must be instituted within 28 days after the order or decision is made or within such extended time as the Court may fix".

The undisputed relevant facts are as follows: (i.) The Senior Commissioner's decision was delivered on 4 May 2000. (ii.) The Respondent's Notice of Motion instituting the appeal was filed on 2 June 2000.

Thus, the question is simply this - was the Respondent's Notice of Motion filed " within 28 days after the decision was made " by the Court?

By simple computation or reckoning, 2 June 2000 is 29 days after 4 May 2000. This computation or reckoning excludes the day of 4 May 2000 conformably to the LEC Rules , Pt 1 r 7(2) cf. the Interpretation Act 1987 s 36(1); cf Ex parte Tooheys Ltd Re Butler 1934 S R (NSW) 277 at 285 and 286 and Associated Dominions Assurance Society Pty Ltd v Balmford (1950) 81 CLR 161 at 186.

It follows, in my judgment, that the Respondent did not institute the appeal within the prescribed time.

In so concluding, I am unable to accept the Respondent's argument that in reckoning the 28 day period from the day following 4 May 2000, that reckoning should also recognise or accommodate the time during the day that the Court's decision was given. In my judgment, by properly excluding the day upon which the Court's decision was made, the 28 day period is to be computed from the beginning of the next day ie 5 May 2000 and that period expired at midnight on 1 June 2000.

In so reckoning, the prescribed 28 day period, I have applied to maxim that the law generally "takes no notice of fractions of a day…" per Jordan CJ in Ex parte Tooheys Ltd at 285 cf Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd (1999) 48 NSWLR 299.

It follows that the Respondent's appeal was not instituted within the prescribed period of 28 days and it therefore becomes necessary to consider the Respondent's application to extend the time, noting that the extension required is for one day.

The relevant principles for the exercise of the discretion conferred upon the Court by Pt 13 r 35(2) have been helpfully collected by Lloyd J in Australand Holdings Pty Ltd v Hornsby Council (unreported 17 June 1998) where his Honour identified the following as the "main factors" to inform the Court's exercise of discretion - (i) length of delay; (ii) reason for delay; (iii) extent of prejudice (iv) whether there is an arguable case.

These factors emerge from the judgment of the English Court of Appeal in Palata Investments Ltd v Burt and Sinfield Ltd (1985) 2 AllER 517 which has often been applied by courts in Australia, as is noted in the decision of the High Court of Australia in Jackamarra v Krakouer (1998) 195 CLR 516.

In Hibiscus Court Pty Ltd v Pittwater Council [2000] NSWLEC 58 unreported 22 March 2000), a case involving an application to extend the time to appeal against a decision of a Commissioner on a development appeal pursuant to the Environmental Planning and Assessment Act 1919, s 97 I considered these factors in the exercise of the relevant discretion. In that case, I refused to extend the time to appeal because I found (i) there was no good or cogent reason for the delay by the appellant; (ii) the other party would be exposed to the risk of significant financial prejudice if the time to appeal were extended; and (iii) the appellant's case did not appear to be strong.

In that case, because the opposition to the application to extend the time to appeal was founded upon the assertion of significant prejudice, I proceeded by way of examining each of the four main factors identified in the cases instead of applying the compendious and prima facie approach encapsulated in the Court of Appeal's majority judgment in Danny Kidron and Andrew Spail Architects Pty Ltd v Jarrett (1994) 35 NSWLR 512 where Priestley JA exercising the counterpart statutory discretion under Supreme Court Rules Pt 51 r 4(1) said at 578:

Where delay is small, an appeal is not hopeless, and no relevant prejudice will be caused by an extension of time, it seems to me that a due exercise of discretion requires the granting of an extension of time

Although Danny Kidron is not cited in the several judgments given in High Court's decision in Jackamarra , I would understand it (subject to one possible reservation) to be generally consistent with the established principles that were explicitly recognised in Jackamarra which was not itself a case involving an application to extend the time to appeal, and therefore did not involve any risk to the " vested right " created in favour of the successful party by the trial court's judgment. The distinction between a case involving an application to extend the time to appeal and a case involving a competent appeal where there has been a default in respect of other procedural directions given in the case was emphasised by the majority judgments in Jackamarra - see at 519/520 per Brennan CJ and McHugh J and at 542/543 per Kirby J.

The possible reservation concerns the question of "the prospects of the appeal", if time to appeal be extended. In the compendious approach adopted in Danny Kidron, Priestley JA at 578 had said "the appeal is not hopeless" after he had first noted "it was not argued that the…appeal had no prospects of success".

In Jackamarra, the majority judgments appear to have propounded the relevant criterion as requiring something more than that the "appeal was not hopeless". Thus, Brennan CJ and McHugh J said at 521.

Cases such as Palata (Palata Investments Ltd v Burt and Sinfield Ltd (1985) 2All ER 517) are therefore concerned with applications that seek to put at risk the substantive rights of the respondent. It is understandable that, where the applicant's right of appeal has gone, courts should insist, as they do (see eg Gallo (1990) 64 ALJR 418 at 459 Halliday v SACS Group Pty Ltd (1993) 67 ALJR 678) that the time for appealing will not be extended unless the proposed appeal has some prospects of success .

Earlier in their joint judgment, their Honours had referred to " the practice of the courts in a number of common law jurisdictions dealing with applications to extend the time for appealing by citing the following passage from Lord Denning's judgment in R v Secretary for the Home Department; Ex Parte Mehta (1975) 2AllER 1084 at 1088:

We often like to know the outline of the case. If it appears to be a case which is strong on the merits and which ought to be heard, in fairness to the parties, we may think it is proper that the case should be allowed to proceed, and we extend the time accordingly. If it appears to be a flimsy case and weak on the merits, we may not extend the time. We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time.

Kirby J, who gave the other majority judgment said at 540/541:

The party seeking indulgence bears the burden of persuading the decision-maker to grant its request. A consideration relevant to that exercise is whether the case is arguable. If it is hopeless, unarguable or bound to fail, the request for an extension of time will be refused (76). However, this is basically because to grant it would be futile. The practice ordinarily adopted in judging the arguability of a point was described by Lord Denning Mr for the English Court of Appeal in R v Secretary for the Home Department; Ex parte Mehta (77). It ordinarily involves consideration of the outline of the case:

We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time.

This description accords with my own experience of Australian practice. It appears to accord with that of the Federal Court of Australia where Mehta was cited and applied (78). In Esther Investments (79), Seaman J, talking of the practice of the Supreme Court of Western Australia, said that the assessment of the merits was necessarily broad because the Court, on an application to extend time, will ordinarily have only limited materials and argument . Reason and efficiency support this practice.

In the circumstances, I think it appropriate that I proceed, as I did in Hibiscus , by considering each of the four major factors that have been earlier identified, noting that in Jackamarra , Kirby J at 543 expressed the opinion that they were " by no means exhaustive " and that other circumstances have from time to time been held to be relevant eg " whether the delay was intentional or contumelious, or merely the result of a bona fide mistake or blunder and whether the delay is that of the litigant or of its lawyers with which the litigant should not be saddled ".

As pointed out, the delay is only one day - ie the appeal was filed on the 29th day instead of within " 28 days after " the Court's decision was given.

Such delay can only be reasonably regarded as insignificant.

The reasons for the delay are found in the affidavit sworn on 21 June 2000 by Mr Bradley Row, Solicitor in the employ of the Crown Solicitor who acts for the Respondent in the proceedings. In that affidavit, Mr Row deposes to what he and his client did after the Senior Commissioner had given his decision of 4 May 2000 , including conferences held with the barrister who had appeared for the Respondent in the proceedings heard by the Senior Commissioner and with other barristers whose opinions were also sought as to whether grounds existed for appealing the Senior Commissioner's decision. This process continued up to the evening 1 June 2000 when Senior Counsel advised Mr Row that there were grounds to appeal the Senior Commissioner's decision and that the time for appealing did not expire until the following day. Following this advice, Mr Row later that evening obtained instructions from the Respondent to appeal and the next day he filed the Notice of Motion purporting to institute the appeal.

In my judgment, there has been a reasonable explanation provided by Mr Row for the delay in appealing. Indeed, in filing the Notice of Motion on 2 June 2000, Mr Row had Senior Counsel's advice that the appeal so filed would be within the prescribed 28 day period.

It was only after the Applicant had filed its Notice of Motion seeking the dismissal of the Respondent's Notice of Motion on the ground that the appeal had not been instituted within the prescribed time that the Respondent filed its Notice of Motion seeking an extension of time of one day to appeal.

(iii) Will the Applicant be prejudiced by extending the time to appeal?

It is inevitable that whenever time to appeal is extended in the exercise of statutory discretion, the successful party at the trial will suffer prejudice because its vested right created by the trial judgment will necessarily be put at risk by the appeal.

It is necessary to examine more closely the nature of the prejudice apt to be suffered by the Applicant because, in a general sense, every successful litigant at trial is apt to be prejudiced by extending the time to appeal where the prescribed time has expired without any appeal having been filed. Moreover, as McHugh J pointed out in Gallo at 459 that "vested right" (to retain the trial judgment) is "unless the application (to extend the time to appeal) is granted".

That vested right was to have the land values of the two taxable properties determined at considerably lower values than the values upon which the Respondent had made his respective land tax assessments. The Senior Commissioner's decision was to reduce the land value of the Orange property from $2.75 million to $1.55 million for the 1998 tax year and from $2.75 million to $1.6 million for the 1999 tax year and to reduce the land value of the Bathurst property from $2.4 million to $1.4 million for the 1998 tax year and from $2.4 million to $1.44 million for the 1999 tax year.

The net consequence of the Senior Commissioner's decision was the significant reduction of land tax payable on each of the two properties for each of the two tax years and since the Applicant had already paid the taxes it was entitled, under the Tax Administration Act 1996, to a refund of excess tax plus interest.

Accordingly, the prejudice that the Applicant will suffer if an extension of time to appeal is granted, is the risk that these vested rights may ultimately be lost if the appeal against the Senior Commissioner's decision is successful.

Additionally, the Applicant asserts other particular aspects of prejudice that it is liable to suffer if leave to appeal is extended. These are detailed in par 31 of the affidavit sworn 20 June 2000 by Mr Nicholas Thomas, a solicitor in the employ of the Applicant's Solicitor as follows: (i.) the refunds of land tax due to the Applicant in consequence of the Senior Commissioner's decision would be delayed; (ii.) the determination of the Applicant's filed Motion for costs in the proceedings determined by the Senior Commissioner will be delayed and may ultimately (ie if time to appeal be extended and the appeal succeeds) involve wasted costs; (iii.) the Respondent may delay his consideration of the Applicant's objections to the land tax assessments made on the two aforesaid properties for the 2000 land tax year; (iv.) the Respondent may defer the reassessment of land tax for the 1996 and 1997 tax years that he has previously undertaken to carry out in consequence of the Senior Commissioner's decision; (v.) a series of pending proceedings brought by the Applicant against the Respondent's failure to reassess land tax for the 1996 and 1997 tax years may be delayed; (vi.) the Applicant's pending appeal against the Valuer-General's statutory valuation under the Valuation of Land Act 1916 may be delayed.

Except for the question of any adverse consequences for the Applicant's pending Notice of Motion seeking an order for costs against the Respondent in respect of the proceedings determined by the Senior Commissioner, it is to be noted that the recurring theme in the Applicant's assertion of prejudice is based upon the consequences of delay in the process currently underway in respect of (a) the refunding of overpaid land tax; and (b) the hearing of the pending proceedings brought against the Respondent or the Valuer General in respect of land valuations for other tax or rating years in respect of each of the two aforesaid properties.

In respect of the asserted prejudices flowing from delay, I am satisfied that that prejudice will be substantially overcome by the expedited hearing of any appeal, if time to appeal be extended. To this end, the Court notified the parties immediately following the hearing on the Motions that 21 August 2000 would be provisionally fixed for the hearing of any appeal if time to appeal be extended.

In respect of the asserted prejudice based upon the Applicant's pending Motion seeking costs against the Respondent in respect of the proceedings determined by the Senior Commissioner, it is to be noted that the Applicant filed its Motion seeking an order for costs on 15 May 2000, just some 11 days after the Senior Commissioner had delivered his judgment and where there remained 17 days of the prescribed period of 28 days within which an appeal might be brought against the judgment.

It is also to be noted that par 10A of the Court's Practice Direction provides that "the practice of the Court is that no order for costs is made in valuation appeals…unless the circumstances are exceptional".

In the result, I am satisfied that the Applicant will be exposed to some additional risk if time to appeal be extended, by virtue of its pending, but not yet determined Motion for costs.

In so concluding, I am unable to accept the Respondent's argument that consideration of prejudice apt to be caused to the party successful at trial by virtue of extending the time to appeal is limited to that prejudice that flows from the delay involved in failing to appeal within the prescribed 28 day period ie in this case, the delay of one day. That submission, is in my respectful opinion far too restrictive of what is entailed by the consideration of "prejudice" in the present context. The relevant prejudice is that caused by the grant of the extension of time to appeal, and not the prejudice caused by the delay in appealing.

Accordingly, and for all the foregoing reasons, I find that there is relevant prejudice apt to be caused to the Applicant if time to appeal be extended, namely the risk to its vested right created by the trial judgment posed by the appeal against that judgment. This risk is of the same nature and quality as any risk that is posed for a party successful at trial by virtue of extending the time to appeal in circumstances where the prescribed time to appeal has expired. However, that "vested right" is "unless time to appeal be extended": Gallo.

The only other particular risk is that generated by the existence of the Applicant's Motion for costs in the proceedings determined by the Senior Commissioner. This risk is similar in nature and quality to the general risk that I have earlier identified, although here there is no "vested right" (as there is with that created by the trial judgment) because the Costs Motion is yet to be adjudicated upon.

I have earlier discussed the proper ambit for this Court's assessment of this particular consideration. To that discussion, I would merely add the observation that in the two decisions cited by the joint judgment in Jackamarra , the relevant assessments of the prospects of success for the appeals were respectively " cannot possibly succeed ": Gallo and " without substance ": Halliday

In its Notice of Motion purporting to institute the appeals, the Respondent had stated (conformably to Pt 13 r 37 of the Rules of Court), the following grounds for appeal:

(a) Misdirected himself regarding the approach to the valuation of the land in this case by assuming that a decision of the Court in respect of any earlier valuation was binding unless evidence of later matters established that the decision should be altered. (b) Refused to consider, or to consider adequately, fresh evidence relating to the sale of land when he had, in a previous case, already considered the sale (c) Demonstrated a bias in taking the decision of the Court on a previous occasion as the basis for the valuation of the subject land in a subsequent year. (d) Failed to give reasons for the rejection of certain of the comparable sales relied upon by the valuers. (e) Failed to give any weight to the onus which was on the Applicant to prove its case.

On the hearing of the Respondent's Motion for an extension of time to appeal, Senior Counsel for the Respondent concentrated attention upon the first of those stated grounds which was slightly re-worded to reflect the conventional category of legal error upon the part of a tribunal that is created when "it asks itself the wrong question".

In considering the prospects of success for the appeal, it is to be noted at the outset that an appeal pursuant to the LEC Act, s 56A is limited to errors of law.

Upon the hearing of the Respondent's Motion to extend the time to appeal, the Court has received detailed submissions from Senior Counsel appearing for each party carefully analysing the reasons for decision of the Senior Commissioner. Indeed, so detailed were the competing analyses that it is not easy to contemplate how much more could be said of the competing cases upon the full hearing of the appeal, if time to appeal be extended.

Unsurprisingly, the Court was left with two radically divergent views, supported by detailed analyses, of the Senior Commissioner's judgment.

The Respondent contended (par 37 of its written submission)

…the Senior Commissioner did not merely regard his previous decision as being one relevant consideration to take into account along with all of the other evidence on a full hearing de novo, rather, that his earlier determination fixed the land value. This land value could only be varied if it was established to be in error or if there was escalation in price in the intervening period to the valuation years under current consideration. This is a direct rejection of the proper approach summarised by Bignold J. in Perpetual Trustees Australia Pty Limited v. Chief Commissioner of State Revenue, 25 September 1998.

The Applicant advanced the opposing contention ( par 36 of its written submissions ):

…even if it could be said that the Senior Commissioner assumed that the decisions in the Previous Valuer-General Proceedings were binding in the absence of other evidence (which, as is clear from his reasons for judgment, he did not), the Senior Commissioner analysed all of the evidence before him in the Land Tax Proceedings and concluded that:

…the figures proposed by Mr Smith [the Applicant's expert valuer] represent a more rational and reasonable reflection of the probable value of these large parcels of land in Bathurst and Orange than the figures proposed by the Valuer-General [that is, the Respondent's expert valuer].

Moreover, the Senior Commissioner concluded that the Respondent's arguments were not…sustainable on the basis of this evidence (see, in particular, judgment, paragraph 44). This approach does not disclose an error of law, much less an error that could be said to vitiate the Senior Commissioner's decisions in the Land Tax Proceedings.

The focus of these competing analyses and submissions is the reliance said to be placed by the Senior Commissioner upon his earlier judgments given in separate proceedings between the same parties involving appeals under the Valuation of Land Act 1916 whereby he determined the " land values " of the Orange property and of the Bathurst property as at the base dates of 1 July 1992 and 1 July 1993 respectively.

The extract from the Respondent's submissions refers to these decisions as "his earlier determination" and the extract from the Applicant's submissions refers to these decisions as "the decisions in the Previous Valuer-General proceedings".

I need to say something of my earlier judgment which is referred to in the extract of the Respondent's written submissions and was referred to by the Senior Commissioner in his judgment.

My judgment was given in a Motion brought by the Applicant in these proceedings to extend the time to appeal pursuant to the Taxation Administration Act 1996, s 98. (It was in these appeals that the Senior Commissioner's judgment was given).

In the course of my reasons for judgment extending the time to appeal and in the context of considering the explanation for the Applicant's delay in appealing to the Court, I made the following observations:

The explanation for the delay is said to be found in the affidavit of Mark William Bailey, sworn 21 September 1998, he being the Chief Executive Officer of Countrywide Retail Management Limited. The present Applicant is the Trustee of the relevant trust held by that former company. In short, the explanation for the delay is founded upon the honest but mistaken belief on the part of the company that a decision of this Court in respect of two rateable properties, in which the valuations for rating purposes fixed by the Valuer General were considerably reduced on appeal, necessarily would flow on to later years' valuations. As I say, that view is clearly a mistaken view of valuation and rating law and it is long established that a decision for one rating year does not provide any basis for determining the same question for a (or the) subsequent rating year. However, having said that, the juxtaposition of the critical events in this case I think explains, though does not excuse, the mistake. [par 3]

As I say, the juxtaposition of facts goes some way to explain the error on the part of the company though the error was fundamentally an error of law in terms of valuation and rating law and practice. [par 6]

To similar effect are the following observations made at par 7 when considering whether the Applicant had an " arguable case ":

The second matter to note is that if leave is given and the appeal is prosecuted, the Applicant's case is no doubt a clearly arguable one, the decisions under appeal being the next cycle for base date valuations post the base date valuation the subject of decision by the Senior Assessor. However, as I say, his decision in the earlier proceedings, will not be determinative in the adjudication of the present appeals, if leave to prosecute them, is granted.

The authority for the principle that I was referring to in these passages is the decision of the Privy Council in The Broken Hill Proprietary Company Ltd v The Municipal Council of Broken Hill (1925) 37 CLR 284 where, in rejecting the submission that the question was res judicata by virtue of an earlier judgment of the High Court of Australia, the Privy Council said at 289:

There is, however, no substance in this contention. The decision of the High Court related to a valuation and liability to a tax in a previous year, and no doubt as regards that year the decision could not be disputed. The present case relates to a new question, namely, the valuation for a different year and the liability for that year. It is not eadem questio , and therefore the principle of res judicata cannot apply.

In his reasons for judgment, the Senior Commissioner, in par 9 (under the heading " History of the Matter ") quoted some relevant passages from my earlier judgment and in par 36 (under the heading " Conclusions ") commenced his findings with these words:

Notwithstanding the cautionary remarks of His Honour Mr Justice Bignold in regard to the need for a fresh consideration of land value on a year by year basis, it seems patently clear that the present dispute has arisen because of a monocular determination by the Valuer General's Department not to accept the previous decision of the Court.

In the present context, where my consideration of the prospects of success of the appeal is necessarily limited (the parties, despite their extensive competing analyses and submissions in respect of the reasons for the Senior Commissioner's judgment, not having invited me to determine the question as if I were hearing the full appeal) I do not think it appropriate or necessary to express any view on the competing cases other than to say that each is clearly arguable and neither is self evidently so cogent as to effectively oust or exclude the acceptability of the other.

In the light of this conclusion, it necessarily follows that the Respondent's appeal is clearly arguable and that it cannot reasonably be concluded that to extend the time to appeal would be "futile" or would wrongly subject the applicant "to further pointless litigation, delay, inconvenience and expense": per Mason CJ at 679 in Halliday.

Having regard to my findings in respect of each of the four specific considerations which collectively inform the Court's exercise of statutory discretion in the present case, I am clearly of the opinion that "justice will be done between the parties" (Gallo; Halliday) by extending the time to appeal.

Accordingly, I make the following orders -
Pursuant to the Rules of Court Pt 13 r 35(2), time to appeal be extended to 2 June 2000.
The Applicant's Notice of Motion filed 9 June 2000 be dismissed.
The hearing of the appeal provisionally fixed for 21 August 2000 be confirmed.
The question of costs be reserved.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Perpetual Trustees Australia Ltd v Chief Commissioner of State Revenue [2000] NSWLEC 173 PARTIES : APPLICANT: Perpetual Trustees Australia Ltd v Chief Commissioner of State Revenue FILE NUMBER(S) : 30294-5 of 1998 CORAM: Bignold J KEY ISSUES: Practice & Procedure :- LEGISLATION CITED: Land and Environment Court Rules 1996, Pt 13 r 35 Associated Dominions Assurance Society Pty Ltd v Balmford (1950) 81 CLR 161; Australand Holdings Pty Ltd v Hornsby Council (unreported 17 June 1998) per Lloyd J; Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd (1999) 48 NSWLR 299; Danny Kidron and Andrew Spail Architects Pty Ltd v Jarrett (1994) 35 NSWLR 512; CASES CITED: Ex parte Tooheys Ltd Re Butler 1934 S R (NSW) 277; Gallo (1990) 64 ALJR 418 at 459· Halliday v SACS Group Pty Ltd (1993) 67 ALJR 678; Hibiscus Court Pty Ltd v Pittwater Council [2000] NSWLEC 58· Jackamarra v Krakouer (1998) 195 CLR 516; Palata (Palata Investments Ltd v Burt and Sinfield Ltd (1985) 2All ER 517; R v Secretary for the Home Department; Ex Parte Mehta (1975) 2AllER 1084 DATES OF HEARING: 27 June 2000 DATE OF JUDGMENT: 08/09/2000

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Judgment (78 paragraphs)

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Cases Cited (9)

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