Plaintiff v Defendant [2018] VSC 154 | Case summary

Supreme Court of Victoria|2018-04-13|Before: CROFT J

For the reasons which follow, I am satisfied that the denial of leave would not impermissibly impinge upon the right to object.

30 Turning first to the emphasised passage of the submissions of the Taxpayer, just as it is not for this Court to depart from a relevantly indistinguishable decision of the Court of Appeal, it is also not for this Court to evaluate the likelihood of the Court of Appeal or the High Court departing from previous authority, whether that authority be fresh or well-established. Thus, given the absence of a mechanism to distinguish between meritorious and unmeritorious attempts to re-agitate the correctness of decisions which are binding on this Court, it cannot be that the right to object under section 96 of the TAA transcends the orthodox interpretation of section 148 of the VCAT Act in the manner suggested by the Taxpayer. To hold otherwise would render the leave requirement under section 148 of the VCAT Act unworkable. It is also convenient to note that, while it is appropriate that paragraphs 25-98 of the Taxpayer's written submissions (being those paragraphs which seek to re-agitate the matters decided in CSR v Burgess) have been put,[64] this Court need not consider their veracity other than to reject them entirely because they are premised on CSR v Burgess being open to doubt, a premise which this Court must, and does, reject. Importantly, on no view does this approach deny the Taxpayer the substantive and substantially unconstrained right to object to the assessment in accordance with Part 10 of the TAA because the Taxpayer may still ventilate the issues decided in before the Court of Appeal and, in due course, the High Court, in seeking leave to appeal to those Courts.

31 The conclusion that section 148 of the VCAT Act is unaffected by the right to object to an assessment to tax under the TAA is supported by an analysis of the nature of that right. The Taxpayer complained that it has not yet had an opportunity to fully exercise its right to object because both VCAT and this Court are bound by the decision of the Court of Appeal in CSR v Burgess. It says that the right to object "transcends... the rigidites of any doctrine or precedent in that it is the most... relevant consideration... and the relevantly unrestricted right to object is the most relevant consideration under section 148".[67] Thus it is said by the Taxpayer that "if the doctrine of precedent is to hamstring the right to object, that must be expressed in clearer and unmistakeable language, in the same way that the denial of a right to object against a compromise assessment is expressed".[68] Yet this analysis misunderstands the nature of the common law: just as VCAT found itself to be bound by the decision of the Court of Appeal in the decision below, the Court of Appeal in CSR v Burgess found itself to be bound by the numerous authorities to which the Court made reference in that case in deciding the matter as their Honours did.[69] Contrary to the submission of the Taxpayer,[70] the legal merits of the argument of the Taxpayer have been tested, and those arguments have failed because of the binding and indistinguishable decision of the Court of Appeal in CSR v Burgess.

32 The legal fiction underpinning the common law is that the common law has always been the way that it has subsequently been found to be.[71] The mere fact that a party seeks to agitate a question of law where only a higher court may discover that the position at law is otherwise than as it is currently understood to be does not allow that party to transcend the appellate structure. In my view, the right to object conferred by Part 10 of the TAA is largely if not entirely spent upon the matter being referred to the Tribunal and the Tribunal hearing and determining the original objection, given that the Taxpayer may rely on the avenues of appeal available like any other litigant. Indeed, this is why taxation appeals do not have any special status as compared to other appeals - if the ordinary appellate structure was intended not to apply, no doubt that would have been made clear in statute. Thus, the right to object sits below but does not affect the appellate structure because the right of parties to "take issue with any adverse court decision" is enjoyed, to the extent that it is enjoyed, independently of Part 10 of the TAA.[72] This position is entirely compatible with the position that the Taxpayer has a relatively unrestricted right to object, and a right to have the determination of that objection reviewed by a court, as established by McAndrew v Federal Commissioner of Taxation and the other authorities to which reference has been made.[73]

33 Moreover, the doctrine of precedent is, together with the Constitution and legislation made under it, the source of all law.[74] It is not necessary to determine whether the doctrine of precedent may be excluded, but there are good reasons to believe that it cannot be. As Sir Owen Dixon maintained in The Common Law as an Ultimate Constitutional Foundation,[75] the common law can be conceived as the "ultimate constitutional foundation" because the Constitution of the Commonwealth of Australia has its genesis in an act of the Parliament of the United Kingdom, which in turn derives its power from the common law. Alternatively, it may be that the foundation of law is in the widespread recognition of a body having ultimate authority to make law.[76]

34 If the doctrine of precedent is essential to the common law,[77] how could legislation exclude it entirely? Yet it may be that the doctrine of precedent and the common law are distinct, and the former capable of modification by statute, as Professor Gardner writes:[78]

Indeed, comparative lawyers sometimes talk as if only legal systems with a doctrine of stare decisis can include case law. This is a mistake, for the decisions of earlier courts may add to the stock of case law even though there is no protection against these decisions being superseded by the decisions of other courts. Where there is no such protection, it is tempting to say that there is no "binding" precedent, but only "persuasive" precedent. But this is strictly speaking incorrect. Courts may change the law on Tuesday even though other courts may change the law back again on Wednesday. ... The decision of an earlier court must be binding in law for it to be necessary for a later court to overrule it. So a doctrine of stare decisis does not alter the power to make binding law. It only alters the power of later courts to change the binding law that was thereby made. It follows that one may have case law in a legal system without having a doctrine of stare decisis. On the other hand one may not have a doctrine of stare decisis without having case law.

In spite of that, the doctrine itself need not be created by case law. It could in principle be created by statute. ...

In any event, it is plain that the doctrine of precedent - being fundamental to the common law of Australia - will not be impliedly excluded by statute in the manner suggested by the Taxpayer.[79] In truth, all an applicant has a right to is the adjudication of its case on the law as it stands. If an applicant cannot succeed on the law as it stands, it must appeal to a place where it can properly argue that the law should be changed.

35 The right to object under the TAA does not detract from the well-established principles governing the interpretation of section 148(1) of the VCAT Act, both because that right is not impinged upon by that section of the VCAT Act, and because that right is limited in nature and subject to the doctrine of precedent.

36 In the Taxpayer's written submissions in reply it raised the contention that if leave to appeal is granted and the appeal is dismissed, the Commissioner ought to bear the costs of the leave application, having regard to the opposition of the Commissioner to the grant of leave.[80] The Taxpayer conceded that if leave were granted and the appeal dismissed, it must bear the costs of the hearing of the appeal.[81] In the circumstances of the present disposition, it is unnecessary to consider these submissions, or those made in response by the Commissioner, other than to observe that neither party made submissions on the cost consequences of leave to appeal being refused.

37 For the preceding reasons, leave to appeal is refused on all grounds and were leave to have been granted on any ground, that appeal would have been dismissed.

38 Parties are to bring in Orders to give effect to these reasons. I otherwise reserve the question of costs and will hear the parties further on this issue.

[1] Proposed Notice of Appeal (3 October 2017), 6.

[2] Plaintiff's Outline of Submissions (11 December 2017), [18]-[19], [23]; Plaintiff's Reply (6 March 2018), [20], referring to Commissioner of State Revenue v EHL Burgess Properties Pty Ltd (2015) 209 LGERA 314.

[5] Commissioner of State Revenue v EHL Burgess Properties Pty Ltd (2015) 209 LGERA 314 ("CSR v Burgess").

[6] See, in this respect, the first instance decision of Croft J in EHL Burgess Properties Pty Ltd v Commissioner of State Revenue [2015] VSC 295; 101 ATR 486.

[7] Transcript, 4; Plaintiff's Outline of Submissions (11 December 2017), [19]; Plaintiff's Reply (6 March 2018), [20].

[8] Proposed Notice of Appeal (3 October 2017), 3-5. These questions make up the subject matter of the proposed appeal, see Patsuris v Gippsland and Southern Rural Water Corporation (2016) 218 LGERA 167 at 180 [43]-[44]; Risi Pty Ltd v Pin Oak Holdings Pty Ltd [2017] VSCA 317, [50]-[52].

[9] Outline of Submissions of the Commissioner of State Revenue (19 February 2018), [9].

[10] Transcript, 4; Plaintiff's Outline of Submissions (11 December 2017), [19]; Plaintiff's Reply (6 March 2018), [20].

[11] See Victorian Civil and Administrative Tribunal Act 1998 s 117(5); cf Plaintiff's Outline of Submissions (11 December 2017), [121], [125].

[14] See also State of Victoria v Turner [2009] VSC 66; (2009) 23 VR 110 at 173 [240].

[15] Australian Investment and Development Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2017] VCAT 1418, [3] ("the Tribunal's Reasons").

[16] Tribunal's Reasons, [60]-[65], [103] et seq.

[17] VCAT Transcript (25 June 2017), 9 (10-14), 14 (12-14), 20 (17-20).

[18] Outline of Submissions of the Commissioner of State Revenue (19 February 2018), [14]-[17]. The exemption under s 67 imposes more stringent requirements than that under s 65, including that the land is "used solely or primarily for the business of primary production" (s 67(1)(a)(iii)) and, for corporate owners, that the principal business of the owner of the land must be "primary production of the type carried on on the land" (s 67(2)(b)).

[19] Plaintiff's Reply (6 March 2018), [16].

[20] See Boucher v Dandenong Ranges Steiner School Inc [2005] VSC 400; (2005) 145 LGERA 21, [15].

[21] See Mark Leeming, Authority to Decide: The Law of Jurisdiction in Australia (Federation Press, 2012) 276, citing Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551; Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 210-2; Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at 138-9 [37]-[40]; House v The King (1936) 55 CLR 499; Macedonian Orthodox Community Church St Petka Inc v Petar [2008] HCA 42; (2008) 237 CLR 66 at 125 [190]; Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 at 542-4 [73]-[76]; Lacey v Attorney-General (Qld) [2011] HCA 10; (2011) 242 CLR 573 at 580-1 [12]-[14].

[22] See Pin Oak Holdings Pty Ltd v Risi Pty Ltd [2016] VSC 773; Swan v Uecker (2016) 50 VR 74; Casdar v Fanous [2017] VSC 616; Primrose Meadows Pty Ltd v River View Pty Ltd [2017] VSC 487; CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23; Risi Pty Ltd v Pin Oak Holdings Pty Ltd [2017] VSCA 317.

[23] An expression now well understood: see R (on the application of Miller and another) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin).

[24] Commissioner of State Revenue v Frost (2011) 83 ATR 832 at 834 [5] citing Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-6 and Myers v Medical Practitioners Board (Vic) [2007] VSCA 163; (2007) 18 VR 48 at 55 [28].

[25] Boucher v Dandenong Ranges Steiner School Inc [2005] VSC 400; (2005) 145 LGERA 21, [15] citing Spurling v Development Underwriting (Vic) Pty Ltd [1973] VicRp 1; [1973] VR 1 and Whitehorse City Council v Golden Ridge Investments Pty Ltd [2005] VSCA 198.

[26] (2011) 83 ATR 832 at 833-4 [3]; affirmed in Risi Pty Ltd v Pin Oak Holdings Pty Ltd [2017] VSCA 317, [53].

[27] Commissioner of State Revenue v STIC Australia Pty Ltd [2010] VSC 608; (2010) 81 ATR 682 at 687 [10].

[28] Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331; Al-Hakim v Monash University (Unreported, Victorian Supreme Court of Appeal, 28 March 2003); Myers v Medical Practitioners Board (Vic) [2007] VSCA 163; (2007) 18 VR 48.

[29] See Morris v R [1987] HCA 50; (1987) 163 CLR 454 at 475.

[30] Osland v Secretary to the Department of Justice [No 2] [2010] HCA 24; (2010) 241 CLR 320 at 333 [21].

[31] Morris v R [1987] HCA 50; (1987) 163 CLR 454 at 475; Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335.

[32] Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-6; Commissioner of State Revenue v Challenger Property Nominees Pty Ltd [2006] VSC 203; (2006) 63 ATR 65 at 69 [20], 77 [65].

[33] Outline of Submissions of the Commissioner of State Revenue (19 February 2018), [9], citing Knight v Secretary to the Department of Justice [2003] VSC 341, [24]; Transcript, 19.

[35] MacCormick v Federal Commissioner of Taxation [1984] HCA 20; (1984) 158 CLR 622 at 640-641, 645-646, 658.

[36] Cf Coco v The Queen [1994] HCA 15; (1994) 179 CLR 427 at 435-438.

[38] McAndrew v Federal Commissioner of Taxation [1956] HCA 62; (1956) 98 CLR 263.

[39] McAndrew v Federal Commissioner of Taxation [1956] HCA 62; (1956) 98 CLR 263 at 270; see also Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 621.

[40] Plaintiff's Reply (6 March 2018), [5].

[41] [1958] HCA 2; (1958) 100 CLR 32 at 40; see also Geoffrey Kennet and David FC Thomas, 'Constitutional and Administrative Law Aspects of Tax' in Neil Williams (ed) Key Issues in Judicial Review (Federation Press, 2014) 216, 218-22.

[42] Plaintiff's Outline of Submissions (11 December 2017), [9], [14]-[17]; Transcript, 3-4.

[43] Plaintiff's Outline of Submissions (11 December 2017), [19]-[20]; Transcript, 5-8.

[44] Plaintiff's Outline of Submissions (11 December 2017), [21]; Transcript, 12.

[45] Plaintiff's Outline of Submissions (11 December 2017), [20], [100], [106]; Plaintiff's Reply (6 March 2018), [3], [10].

[46] See Deputy Commissioner of Taxation v Brown [1958] HCA 2; (1958) 100 CLR 32 at 40.

[47] Plaintiff's Reply (6 March 2018), [9]-[10].

[48] Dodoro v Knighting [2004] VSCA 217; (2004) 10 VR 277 at 283 [23].

[49] Myers v Medical Practitioners Board of Victoria [2007] VSCA 163; (2007) 18 VR 48 at 55 [27].

[50] Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 at 180.

[51] Minister for Immigration v Jia Legeng (2001) 205 CLR 507 at 547.

[52] See House v R (1936) 55 CLR 499 at 505; see also [29] below.

[54] Plaintiff's Reply (6 March 2018), [10]; see also Transcript, 18.

[58] Freeman v Rabinov [1981] VicRp 52; [1981] VR 539 at 548.

[63] Plaintiff's Outline of Submissions (11 December 2017), [16]-[18].

[64] See Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7-8.

[65] See, for a discussion of the nature of the doctrine of precedent, Larry Alexander and Emily Sherwin, 'Judges as Rule Makers' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 27.

[66] See Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 at 157 [24].

[67] Transcript, 12, see also 4-5, 30-1.

[71] See e.g. Babaniaris v Lutony Fashions Pty Ltd [1987] HCA 19; (1987) 163 CLR 1, especially at 15. See also Lord Reid, 'The Judge as Lawmaker' (1972) 12 Journal of the Society of Public Teachers of Law 22; Sir Anthony Mason, 'The Judge as Law-maker' (1996) 3 James Cook University Law Review 1.

[73] See above, [15]-[18].

[74] Though perhaps there is such a thing as customary law, which sits apart from legislated and judge made law. In this respect, see John Gardner, 'Some Types of Law' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 51.

[75] Sir Owen Dixon, 'The Common Law as an Ultimate Constitutional Foundation' in Jesting Pilate (Law Book Co, 1965) 203; see also Jeffrey Goldsworthy, 'The Myth of the Common Law Constitution' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 204.

[76] John Gardner, 'Some Types of Law' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 51, 61.

[77] Cf. Jeffrey Goldsworthy, 'The Myth of the Common Law Constitution' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 204, 208-9.

[78] John Gardner, 'Some Types of Law' in Douglas E. Edlin (ed) Common Law Theory (Cambridge University Press, 2007) 51, 74.

[79] See David Wright, Common Law in the Age of Statutes: The Equity of the Statute (LexisNexis Butterworths, 2015) 10-1, citing American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd [1981] HCA 65; (1981) 147 CLR 677 at 682-3. Note the distinction between stare decisis and the doctrine of precedent discussed in M J Beazley, P T Vout and S E Fitzgerald, Appeals and Appellate Courts in Australia and New Zealand (LexisNexis Butterworths, 2014) 28 et seq.

[80] Plaintiff's Reply (6 March 2018), [19].

[81] Plaintiff's Reply (6 March 2018), [20].

PRACTICE AND PROCEDURE - VCAT - Whether application for leave to appeal decision of VCAT may succeed where appeal is doomed to fail - Relevance of applicant's intention to revisit recent intermediate appellate authority - Powers of Court of Appeal upon appeal from decision to refuse leave - Myers v Medical Practitioners Board (Vic) [2007] VSCA 163; (2007) 18 VR 48 -Commissioner of State Revenue v Frost (2011) 83 ATR 832 - Victorian Civil and Administrative Tribunal Act 1997, s 148.

TAXATION AND REVENUE - Whether right to object to assessment to tax affects appellate procedure - Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd [1995] HCA 44; (1995) 184 CLR 453 - McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263 - Taxation Administration Act 1997, s 96.

(2015) 209 LGERA 314

(2016) 218 LGERA 167

Plaintiff v Defendant

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