Plaintiffs v Defendant

**1 The issue in these proceedings is whether leave should be granted to the plaintiffs to appeal a decision of the Victorian Civil and Administrative Tribunal (the 'Tribunal') which confirmed five assessments of payroll tax made by the Commissioner of State Revenue (the 'Commissioner') of companies in the CXC Consulting group for the five years between 1 July 2004 to 30 June 2009.

2 The assessments totalled $316,463.82 including primary tax, penalty tax, and interest.

3 The issue before VCAT was whether CXC Consulting Pty Ltd (CXC) was an employment agent and whether contracts that it entered into with Information Technology ('IT') workers and the endusers of their services were employment agency contracts. If they were, then payroll tax was payable on the payments that CXC Consulting made to the IT workers under those contracts. The assessments were made on the basis that CXC Consulting had procured the services of contractors for the clients or endusers of the services within the definition of an 'employment agency contract'. As a result CXC Consulting was an 'employment agent' and the contractors were 'service providers' for the purposes of s 4(1) of the Pay-roll Tax Act 1971 (the '1971 Act') and s 37(1) of the Payroll Tax Act 2007 (the '2007 Act').

4 The Tribunal accepted that CXC Consulting was an ordinary member of a payroll tax group and was liable for the payroll tax that was assessed. For the years 2004-05 to 2007-08, the assessments were issued to Consultants Exchange Pty Ltd, and for the year 2008-09 to CXC Australasia Pty Ltd. The Commissioner found that in those periods, CXC Consulting was in a holding/subsidiary relationship with Consultants Exchange and CXC Australasia. Only CXC Consulting was assessed as owing tax.

5 The three plaintiffs seek leave to appeal against the Tribunal's decision arguing that it made five errors of law. The applications for leave to appeal in each proceeding and the submissions to be made on the appeals if leave were granted were heard together.

6 The questions of law that the plaintiffs seek to raise are:**

(1) Whether, as a matter of construction of s 37(1), the contract must be the relevant means by which the services of a person are procured by a taxpayer for its enduser client.[1]

(2) Further to Question 1, where there are two possible sources of the procuring of services, whether s 37(1) requires a judgment as to which of the sources is properly to be seen as the source of the procuring of the services.

(3) Further to Questions 1 and 2, where there are two possible sources of the procuring of services, one being a contract and the other a prior arrangement, whether s 37(1) requires that this judgment is to be exercised by considering the terms of the contract alone, to the exclusion of the prior arrangement.

(4) Where the unchallenged evidence is that the means by which the services of a person were procured for an end-user was a prior arrangement between the end-user and the worker, whether it is open for the Tribunal in the face of such evidence, to conclude that the services had been procured for the enduser by the taxpayer under a subsequent contract.

(5) Whether the Tribunal was obliged to provide reasons to support its conclusion that services were procured under the three-party contract.

**7 The liability of employment agents to pay payroll tax is found in Part 3, Division 8 of the 2007 Act and in Part II of the 1971 Act. The relevant provisions of the 2007 Act commenced on 1 July 2007.

8 The 1971 Act applied to the assessments for the 2005, 2006 and 2007 years. The 2007 Act applied to the assessments for the 2008 and 2009 years.

9 Payroll tax is a tax on all taxable wages. The employer by whom taxable wages are paid or payable is liable to pay payroll tax on the wages. An employment agent is deemed to be an employer.

10 The definition of an 'employment agency contract' is contained in s 4(1) of the 1971 Act and s 37(1) of the 2007 Act.

11 Section 4(1) was introduced into the 1971 Act by the State Taxation Acts (Tax Reform) Act 2004.

12 The relevant provisions of the 2007 Act are as follows, with crossreferences added to the comparable provision in the 1971 Act:**

Division 8 - Employment Agents

37. Definitions (s 4 (1) and (2) of the 1971 Act)

(1) For the purposes of this Act, an employment agency contract is a contract, whether formal or informal and whether express or implied, under which a person (an employment agent) procures the services of another person (a service provider) for a client of the employment agent.

(2) However, a contract is not an employment agency contract for the purposes of this Act if it is, or results in the creation of, a contract of employment between the service provider and the client.

(3) In this section-

contract includes agreement, arrangement and undertaking.

38. Persons taken to be employers ( section 5 (1)(a) of the 1971 Act)

For the purposes of this Act, the employment agent under an employment agency contract is taken to be an employer.

39. Persons taken to be employees ( section 5 (1(b) of the 1971 Act)

For the purposes of this Act, the person who performs work for or in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent.

40. Amounts taken to be wages (Section 5 (1)(c) of the 1971 Act)

(1) For the purposes of this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract-

(a) any amount paid or payable to or in relation to the service provider in respect of the provision of services in connection with the employment agency contract;

(b) ...

(c) ...

**13 The 1971 Act was amended in 1983[2] to insert provisions dealing with sub-contracting. It was further amended in 1998 by the State Taxation (Further Amendment) Act 1998, which commenced on 1 February 1999. That amendment inserted s 3D which defined 'employment agency contract' substantially in the terms which now appear in s 37(1) of the 2007 Act. Section 3D(2)(a) deemed a client for whom services were procured under an employment agency contract to be an employer with the result that the employer was liable to pay payroll tax. This amendment was made following the decision of Balmford J in Drake Personnel Ltd v Commissioner of State Revenue[3] that temporary workers whose services Drake Personnel Ltd provided to clients were not its common law employees. The 1998 amendments imposed liability for payroll tax on the employment agent's clients.

14 In 2000, the Court of Appeal allowed the Commissioner's crossappeals against the decision of Balmford J and held that the temporary workers were common law employees. The Court confirmed the assessments to which Drake Personnel Ltd objected.[4]

15 The State Taxation Acts (Tax Reform) Act 2004, which in relevant respects commenced on 1 January 2005, amended the 1971 Act by repealing the employment agency provisions and inserting a new Part II, including s 4, and imposing liability for payroll tax on the employment agent. Since that amendment, the enduser or client is not liable to pay payroll tax on amounts paid to contractors for the performance of services.

16 The three requirements in the definition of 'employment agency contract' are:**

1. a contract under which;
2. a person (employment agent) procured the services of another person (service provider);

**17 CXC Consulting conducts a business in the IT industry. It provides services to IT workers or the legal entities through which they operate. The workers are usually independent contractors and may be incorporated or operate through trusts.

18 CXC Consulting also provides services to clients or endusers who require the services provided by IT workers. These clients can be large or small businesses.

19 The title or description of the three participants in the transactions that led to the assessments need to be clarified as different terms were used in the evidence. CXC Consulting was often referred to as the Consultant, the IT worker as the contractor or worker, and the end-user business receiving the services of the IT worker was often referred to as the client. I will on most occasions refer to the IT worker as the contractor and the business receiving the service as the enduser or client.

20 CXC Consulting has three principal business arms. By its corporate services arm it undertakes payroll administration for clients, including making payments to revenue and insurance bodies. By its recruitment agents' services arm it provides contractor management services to recruitment agents.

21 However, it is the business of CXC Consulting's contractor services arm which has led to these assessments. In this part of its business, CXC Consulting administers remuneration and other matters for IT workers and their business entities who provide IT services to clients or end users. This is a substantial proportion of CXC Consulting's business. Mr Christopher Thuell, the Commercial Manager of the CXC Group of companies, made an affidavit and gave evidence before the Tribunal. He stated:**

Specifically, under the contractor services arm the contractor would engage CXC Consulting to manage the payment of the contractor's remuneration after the contractor had sourced and negotiated a contract from an end-user.

22 He described the contractor management services that CXC Consulting provides to clients, including contractors, as including:

Structuring and taxation advice, administration and accounting services in relation to the establishment of a contractor business 'structure' which includes providing advice on business requirements and regulations, insurance cover (such as worker's compensation and professional indemnity), goods and services tax, income tax in relation to payasyougo withholding requirements and the alienation of personal services income;

Registration services in relation to Australian Business Names, goods and services tax and Business Activity Statements;

Preparing contractor invoices for the contractor;

Administering the payment of a contractor's remuneration by which I mean undertaking the payment of the worker's compensation insurance premium, professional indemnity insurance premium, withholding income tax (if required to under the income tax withholding provisions), making superannuation contributions (if required to under the superannuation laws), attending to the payment of fringe benefits (if the contractor is eligible) and other allowances and then paying the balance to the contractor;

Providing advice on taxeffective salary packaging including eligibility for fringe benefits, car leases and other work deductions;

Arranging for the preparation of the contractor's personal income tax returns; and

Arranging the provision of financial planning, superannuation, income protection insurance and investment advice to contractors. [5]

**23 Mr Thuell stated that CXC Consulting remits payroll tax due on payments made to individual contractors, but does not consider that it is obliged to do so in respect of payments made to subcontractors. These latter payments are the subject of the assessments which the Tribunal confirmed.

24 CXC Consulting also enters into contracts with the client or enduser who receive the IT services from the contractor. It collects the IT contractors' fees from the client and pays them to the contractors after subtracting its own administrative services charge of between 2 per cent to 7.5 per cent of the fee.

25 Mr Thuell gave the following further evidence concerning the contractor services arm of CXC Consulting's business:**

Under the contractor services arm, CXC Consulting is approached by the contractor after the contractor has agreed to provide services to the end user.

I verily believe in all cases the end user and the contractor negotiate the terms of their contract through an exchange of contracts, discussions or an exchange of emails.

The end user and the contractor would have discussed and negotiated the particular contract, the position description and requirements, the terms of the placement, remuneration and any other key terms.

The end user offers the contract by providing an unsigned contract, by e-mail correspondence or in discussions.

The contractor then approaches CXC Consulting about obtaining the contractor management services. For example they may contact us and say "I have a contract with IBM" or "I am about to accept a contract with IBM". The contractor may have used CXC Consulting in the past or may have been referred to CXC Consulting by a contractor colleague. Now produced and shown to me is Annexure "D", copies of a sample of e-mails from contractors where a contractor approaches CXC Consulting after the contractor has negotiated a contract with an end user.

CXC Consulting does not participate in, or influence, the discussions or communications between the contractor and the end user in relation to the terms of the particular contract, the remuneration or any other aspect of the contract. It is only at the time that CXC Consulting is approached by the contractor that the particular contract requirements and the end user's name are communicated to CXC Consulting by the contractor.

When CXC Consulting is approached, a CXC Consulting representative will initially discuss with the contractor the most appropriate business structure through which the contractor will provide their services and provide relevant structuring and taxation advice in relation to income tax, registrations and insurances.

If the contractor wishes to form a business and a subcontracting arrangement, the representative will assist the contractor in establishing the structure (that is, incorporating a company or establishing a trust, partnership or sole trader structure) and with the necessary registrations (such as applying for an Australian Business Name and registration for goods and services tax).

CXC Consulting then requests the contractor to let the end user know that the contractor is utilising CXC Consulting for remuneration and administration purposes. The contractor will usually contact the end user and inform them that they will be utilising the services of CXC Consulting.

Once CXC Consulting has been informed that the contractor has informed the end user, CXC Consulting will enter into the relevant contracts. The end user will usually accept the involvement of CXC Consulting.[6]

**26 Mr Thuell gave evidence that CXC Consulting's services were different from those provided by labour hire or recruitment firms, which typically recruited contractors. When a contractor engaged CXC Consulting to manage its remuneration, its client was the contractor and not the enduser. The contractors typically had little experience in managing their remuneration in the most costeffective manner available.

27 The contractors did not engage CXC Consulting to find them a contract. It did not maintain a database or a record of its contractors' work experience, skills and qualifications which would enable it to determine if they were appropriately qualified for a particular contract.

28 Mr Thuell gave the following evidence of the means by which CXC Consulting collected the payments due to the contractors:**

Throughout the term of the contract, CXC Consulting arranges for the payment of the contractor's remuneration. CXC Consulting effectively acts as a payment intermediary in these arrangements. The contractor sends its timesheets and invoices to CXC Consulting. CXC Consulting forwards the timesheets and invoices to the end user. The end user pays the amount invoiced by the contractor to a CXC Consulting bank account. CXC Consulting deducts its management fee and then attends to make the necessary payments on behalf of the contractor (such as payasyougo (if required to do so under the income tax withholding provisions)), superannuation contributions (if required to do so under the superannuation laws), fringe benefits (if eligible), other allowances and insurance premiums. The balance is paid to the contractor's bank account.

CXC Consulting is not required, is not equipped to and does not check or perform any independent verification of the contractor's work, performance or timesheet.[7]

**29 Mr Thuell produced three contracts that CXC Consulting commonly entered into in the operation of its contractor services arm. The case was presented on the basis that these contracts could be taken as representing all the forms of relevant contracts that CXC Consulting entered into.

30 The first was a threeparty contract between CXC Consulting, the contractor entity (the contractor or service provider) and the client or enduser of the IT services.

Commencing on the Start Date and for the Period the Company will provide their Client with Consultancy Services as set forth in the Second Schedule and will allocate the Nominated Consultant to perform such Consultancy Services on its behalf.

1. OBLIGATIONS OF THE NOMINATED CONSULTANT AND THE CLIENT

3.1 During the Period of the this Agreement the Nominated Consultant will be subject to the exclusive supervision, direction and control of the Client and will abide by such laws, rules, regulations and the Client's policies and procedures as are in force. However the Nominated Consultant will have freedom in the way tasks are performed subject to the job specifications of the Client.

...

3.2 The Nominated Consultant will supply plant and equipment, or tools of the trade (including but not limited to a lap-top computer or other electronic device) needed by the Nominated Consultant to perform the work from which the Nominated Consultant produces the result as a consequence of providing the services to the Client on behalf of the Company, the Nominated Consultant will be responsible to the Client for the cost of rectifying any defects in such work performed by the Nominated Consultant on behalf of the Company.

5.1 Upon receipt from the Nominated Consultant of time-sheets duly approved and signed by the Client Manager the Company will submit to the Client Calendar Monthly Invoices and payment thereunder will be due seven (7) days from the date of invoice unless otherwise agreed in writing.

...

Nothing in this Agreement shall be construed so as to create an employment or partnership relationship between the Client and Nominated Consultant.

The Client acknowledges that it has selected the Nominated Consultant and is solely responsible for determining the suitability of the Nominated Consultant in respect of the provision of Consultancy Services and the Client is satisfied that the Nominated Consultant has the requisite qualification and other requirements to provide the Consultancy Services as required by the Client.

...

16.1 This Agreement constitutes the entire agreement between the parties and supersedes all other communications, representation, inducements, undertakings and verbal agreements between them. The parties have not entered into this Agreement relying on this representation made by or on behalf of the other.

32 The Second Schedule referred to in clause 2 consisted only of the words 'Principal Consultant'. The First Schedule was in the following terms:

CXC CONSULTING Pty Limited undertakes to provide Consultancy skills and services of a specialist nature as set out in the Second Schedule to be provided by the Nominated Consultant named below for 40 hours per week as per the aforegoing agreement and the First and Second Schedules.

**33 The Second Schedule gave details of the Client, the Nominated Consultant, the place of work, the period of work, the rate and the start and end dates.

34 Approximately 70 per cent of the CXC Consulting contracts were threeparty contracts. However, in every instance CXC Consulting entered into a separate contract with the contractor who was to provide services to the enduser. That contract is described below after the twoparty contract made with the client or enduser is first described.**

The twoparty contract with the client or enduser

35 Mr Thuell gave evidence that when the enduser was unwilling to execute a threeparty contract, CXC Consulting entered into a 'twoparty' contract with it. In that form of contract, CXC Consulting is referred to as the Consultant and the enduser is referred to as the Company. The recitals to this twoparty contract provided:

1. The Company wishes to engage the Consultant to provide the Services set out in Item D of the Schedule.
2. The Consultant has agreed to provide the Services as requested by the Company on the terms and conditions contained in this Agreement.

36 Clause 2 of this twoparty contract provided in relevant parts:

Engagement of Consultant

2.1 The Company engages, and the Consultant agrees to accept the engagement, of the Consultant to provide the Services on the terms and conditions contained in the Agreement.

...

37 Other relevant provisions of this twoparty contract provided:

3.1 The Consultant is engaged by the Company to provide the Services specified in Item D of the Schedule. The Consultant will provide the Services through the Key Person.

3.2 During the Consultant's engagement under this Agreement, the Consultant, shall:

(a) perform the Services to the best of its ability, skill, experience and knowledge;

(b) avoid any action, public pronouncement or conduct which may reflect adversely upon or prejudice the interests of the Company;

(c) provide at its own cost and expense all materials, tools, implements, plant and everything necessary for the proper carrying out and completion of the Services except insofar as specified in this Agreement;

(d) not delegate or sub-contract all or any of its obligations under this Agreement except with the prior written consent of the Company which consent shall be conditional upon the Consultant remaining liable for the wilful or negligent acts or omissions of its delegates or sub-contractors and may be subject to other conditions imposed by the Company;

(d)[8] give to the Project Manager such information concerning the affairs or activities of the Company within the knowledge of the Consultant as the Project Manager shall require from time to time;

(e) comply with all laws, decrees and regulations applicable to the Services and with all requirements and orders of any government or semigovernmental body or agency.

...

8.1 By way of fees for the Services, the Company shall pay to the Consultant the sums specified in Item 3 of the Schedule.

8.2 The remuneration shall be payable in the manner specified in Item F of the Schedule.

...

38 The Schedule named the persons who were the Key Person and the Project Manager and described the Consultancy Services and Consultancy Fees.

The third contract - the contract between CXC Consulting and the contractor or service provider

39 The third form of contract was headed 'Sub Contracting Agreement' and was a contract between CXC Consulting[9] (the 'Company') and the contractor (the 'Specialist'). The recitals or 'Background' stated:

1. The Company agrees to supply the services described in the brochure published by the Consultants Exchange A'asia Pty Ltd in its booklet "Contracting- Options" ("the Brochure") to the Specialist.
2. The Company and the Specialist agree that the terms and conditions of this Agreement will cover the provision of the Company's services to the Specialist.

40 Clauses 2, 3 and 4 of the third contract provided:

2.1 REMUNERATION & TAXATION

2.1 The Specialist is engaged by the Company in the capacity of a computer Specialist and will be paid consultancy fees (the "fees") calculated from the revenue received by the Company from third parties who enter into agreements for the Specialist's services (the "Client").

2.2 The Specialist authorises the Company to deduct from the fees:

(a) A Management Fee for services rendered by the Company to the Specialist;

(b) Premiums for Professional Indemnity Insurance; and

(c) Premiums for Workers Compensation, unless the Specialist has provided the Company, within seven (7) days of the date of this Agreement, with a copy of the Specialist's Workers Compensation Certificate of Currency and a written statement by the Specialist that all Workers Compensation premiums applicable to the services to be provided by the Specialist the subject of this Agreement have been paid.

2.3 The Company will not deduct from the fees payable to the Specialist any amount for superannuation, statutory charges and taxes, including but not limited to, PAYG withholding deductions, fringe benefit tax and payroll tax (the "On-Costs").

2.4 The Specialist agrees to be solely responsible and liable for the payment of the On-Costs and the Specialist agrees to indemnify and protect the Company against any breach non-compliance or non-performance of this clause by the Specialist. If the Company has an obligation to pay any amount of the On-Costs in respect of the Specialist, the Company agrees to pay the On-Costs and the fee payable by the Company to the Specialist will be reduced by an amount equal to the On-Costs paid by the Company.

2.5 If no money is received from the Client then the Company will not make any payment to the Specialist.

2.6 The Specialist will not be paid by the Company unless the Specialist issues the Company with an invoice in a format approved by the Company in respect of services rendered by the Specialist to the Client. This invoice must be accompanied by a time sheet in a format approved by the Company such time sheet to be signed by both the Specialist and the Client.

...

3.1 The Specialist agrees to abide by the terms and conditions of the various contracts which the Company will sign with the agencies and Clients on the Specialist's behalf and with the Specialist's permission. In any event of non-performance by the Specialist, the Company will not be responsible for any loss to the Client or agency.

3.2 The Specialist will inform the terms and conditions of this agreement to all Clients and agencies with which the Company will sign a contract on behalf of the Specialist.

3.3 Without limiting any other provision of this Agreement the Specialist will at all times during this Agreement:

(a) exercise the utmost good faith in all transactions relating to the Company;

(b) give to the Company a just and faithful account of those transactions as requested;

(c) use its best skill and endeavour to promote the interest and welfare of the Company;

(d) not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or its business.

4.1 In order to provide the services the Company will not exercise nor does it wish to exercise any form of direction or control over the actions of the Specialist other than as specified in the brochure.

4.2 The Specialist will be under the direction and control of third parties and therefore the Company will not exercise any disciplinary action against the Specialist. The Specialist in turn will not have any recourse to a grievance procedure within the Company.

4.3 The Company will not be responsible for any actions of the Specialist to any Client or other third party with which the Specialist provides services to, or the Company enters into an agreement on behalf of the Specialist. Similarly the Specialist will not be responsible for any agreement the Company enters into on behalf of other Specialists. The Specialist will indemnify Company against any and all losses arising out of the action or inaction of the Specialist and in respect of unauthorised representations, promises or agreements made by the Specialist.

4.4 The Specialist does not have the authority to enter into any agreement on behalf of the Company and will not bind the Company to any agreement or otherwise hold himself out as being authorised to deal as an agent of the Company except as authorised by the Company.

...

**41 The brochure entitled '[Contracting] Options', which is referred to in the Recital to the third contract, described the services that CXC Consulting provided and contained statements about contracting in Australia and the purpose and benefits of working with a management company.

42 Before the Tribunal, CXC Consulting also relied on an affidavit of Mr Aaron Judah. He is a software developer who works as an independent contractor. He was not required to attend for crossexamination. In 2006, he accepted a software development position on a onemonth contract with Red Ant Technologies Pty Ltd. He was informed that CXC Consulting arranged insurance for contractors. He would not have been able to obtain professional indemnity and public liability insurance for the short period of his contract as it was only available to him for twelve months. He approached CXC Consulting to arrange his insurance, his remuneration and other work affairs. He entered into a threeparty contract with CXC Consulting (which was referred to as the 'Supplier') and Red Ant for the provision of contractor services. This three-party contract contained differences in form from the three-party contract described above. The recitals to it stated:**

1. Red Ant intends to engage the Supplier on a Contractor services basis.
2. Red Ant requires the Supplier to provide the services described in the First Schedule (the "Services").

1. The Supplier has agreed to provide the Services on the terms and conditions of this agreement.

43 Clause 2, which was headed 'Provision of Services', stated:

2.1. Red Ant engages the Supplier as an independent contractor to provide the Services to Red Ant, and the Supplier agrees to provide the Services to Red Ant.

2.2. The Supplier acknowledges that if it has provided various components of the Services prior to the date hereof and agrees that in all respects it shall have performed such components as though the Agreement was applicable to the components so provided.

2.3. The Supplier must:

1. provide the Services with due care, skill and diligence and to the best of its knowledge and expertise;
2. ensure the Services are provided to Red Ant's reasonable satisfaction;

1. ensure the Services are provided in accordance with the Term set out in the First Schedule;

1. comply with any reasonable instructions and directions given by Red Ant from time to time.

44 Clause 3, which was headed 'Obligations and Undertakings of Supplier', stated in relevant parts:

3.1. The Supplier must ensure that it has sufficient skills and availability to enable the Supplier to provide the Services in accordance with this Agreement.

3.2. The Supplier must inform Red Ant on all matters regarding the Services as it is requested to do so.

3.3. The Services will be provided in a timely and professional manner and in accordance with any other requirements set out in this Agreement or as otherwise stipulated by Red Ant and will without prejudice to any other requirement hereunder conform to the standards generally observed in the industry for similar services.

....

45 The First Schedule named Mr Judah as the person providing the services and described the 'skills of persons providing services' as:

IT application developer (internet & MS Windows applications).

**It also set out the term of the Agreement and the rate to be paid.

CXC Consulting had no involvement in arranging my contract position with Red Ant. When I made contact with CXC Consulting I already had a standing contract offer with Red Ant. By the time the relevant contracts were organised by CXC Consulting I had commenced working with Red Ant.

Ultimately, the contract with Red Ant was extended beyond the original duration of the contract, which was for one month. All contract extensions were negotiated and agreed between myself and Red Ant without any involvement of CXC Consulting ...

47 Under the heading 'Analysis', the Tribunal considered the parties' submissions and set out its conclusions as follows:[10]

1. The existence of an employment agency contract which has the required procuration effect as between the parties triggers the effect of PTA 2007 s-s37(1). It is immaterial that the services of the service provider were also or more substantially procured outside the contract and/or that the services were procured by some other party. The inquiry starts and ends with the contract. In order to succeed in this appeal CXC Consulting must show that it did not procure the services of a service provider in the contracts annexed to Mr Thuell's affidavit.
2. The sense of procures as the connective used in the second clause of the s-s37(1) in the PTA 2007 is therefore essential to understand the workings of the composite definitions which the subsection contains. The terms employment agent and service provider take their defined form and liability is established if an employment agent procures the services of a service provider for a client of the employment agent.
3. Referring to the decision of Davies J in R v F; ex parte A-G (Qld) [2003] QCA 70 at [3], the applicants in their objection submitted that "procure" is a plain English word. It is not a term of art. However, the meaning of "procure" may change according to the context in which it is used. "The ordinary meaning of procure" was said to be

to find and obtain by care, effort or the use of special means. To obtain by care connotes an active obligation on the procurer to find or source the item, person, result or thing being procured and not a passive obligation merely to provide or pass on something that has been given. Relevantly, in the context of prostitutes, procure is defined to mean to get and make available or in other words to actively find, source or recruit and then make available.

30.[11] The applicant referred the Tribunal to a number of statutory contexts for the word "procures". Most were criminal statutes. The Tribunal was also referred to a number of inconsistent dictionary definitions. For the most part, I did not find these matters helpful.

1. The burden of the applicant's submission on the word "procure" in the PTA 2007 s-s37(1) definition was that the word implied an active agency on the part of the procurer and this was more than is required merely to "supply", "enable", "facilitate" or "bring about" a certain result.
2. Pursuant to the employment agency contracts annexed to Mr Thuell's affidavit the applicants procured nothing, on this submission. Instead, clients procured the services of the service providers through earlier treaties negotiated directly between these parties. This was in the absence of CXC Consulting. Mr Aaron Judah's affidavit described such a sequence of events. Where IT services were concerned, the effect of the contracts with CXC Consulting was only to formalize dealings which had already occurred between consultants and clients. Contractors' services were procured in an active sense by contractors' prior dealings with clients rather than contracts with CXC Consulting.
3. In a slightly different argument for the applicant, Mr Grace asserted that whether an applicant employment agent procures the services of a service provider is a question of fact. The Tribunal should consider how the contract was performed rather than the meaning of the terms which the contract contained.
4. Further to the preceding point, it was suggested that there was a patent inconsistency between clauses 2 and [1]4 of the 3party "Agreement". CXC Consulting, on the one ha[n]d, "allocated" the service provider in clause 2 and, on the other hand, the client acknowledged in clause 14 that it "has selected" the service provider. Prior dealings between the parties were said to be admissible to resolve the uncertainty which arose from this inconsistency.
5. However, no evidence was led by the applicants to the effect that the contracts were performed otherwise than in accordance than with their terms. This was noted by Mr Linden. The effect of the parol evidence rule in construction of contracts was that negotiations of the parties prior to entry into the contracts cannot be called in aid when interpreting the contracts. I note that each of the contracts was prepared by the applicants, as Mr Thuell was unable to deny.
6. Neither the applicant nor the respondent's counsel referred the Tribunal to the use of cognate expressions of the word "procures" in the PTA 2007. These occur twice in Division 7. In s 32 headed "What is a relevant contract?" the word occurs in a phrase forming part of a ss2(d)(ii) exclusion from a defined term "services solely for or in relation to the procurement of persons desiring to be insured ..." In ss32(3) of the Act the expression occurs "is procured by an employment agent". Other provisions, such as paragraph 33(1)(b) refer to persons "to whom services are supplied."
7. There may be a division of labour between the words "procures" and "supply" in the scheme of the PTA 2007. The draftsperson's usage suggests that persons are "procured" to achieve various ends. Services, on the other hand, are "supplied".
8. Cognate uses of the word "procures" in the PTA 2007 may imply independent agency on the part of the person procured. Services of a service provider are appropriately "procured" by a third party like an employment agent, rather than merely supplied or made available by that party. Moral independence of the actors is acknowledged by this choice of words. Perhaps it would demean service providers to suggest that their services can be "supplied" or "brought about" and are at the disposal of employment agents.
9. Limited authority exists on the meaning of the word "procures" in ss 37(1) of the PTA 2007. In Value Engineering (Australasia) Pty Ltd v Commissioner of State Taxation (WA) (1985) 85 ATC 4152 the Full Court of the Supreme Court of Western Australia interpreted a section of an Act corresponding to the PTA 2007 s-s 37(1).
10. Mr Grace asserted for the applicant that Value Engineering was of no assistance because the Full Court decision was based on an agreed statement of facts. This is incorrect. Each of the 12 points of agreement referred to in the judgment of Burt CJ at [4153] was uncontroversial as between the applicants and the respondent in the present appeal. No part of the present controversy was preempted by what was agreed in that case.
11. The appellant in Value Engineering argued that it was not an "employment agent" because the sense of "procures the services of another person" in the [ss 37(1)] definition of an "employment agent" contemplated a direct engagement between the employment agent and the person or individual performing the services in question. Three examples of agreements between the appellant and subcontractor entities were put before the Court at the hearing of the appeal. The appellant in Value Engineering conceded "that if it had itself engaged the worker then it would satisfy the definition of "employment agent"".
12. The majority of the Court in Value Engineering (Brinsden J dissenting) rejected the claim that the word "procures" in [s-s37(1)] implies a "direct relationship" between the person procuring and the person who performs the services procured. "In my opinion," Kennedy J observed at 4164-4165,

the contracts tendered by consent constituted arrangements whereby the appellant procured the services of workers for the client. Under those contracts ... the subcontractor undertook, for present purposes, to supply the professional services of another person or persons for the client and, in my opinion, the appellant relevantly procured those services which were eventually rendered. The use of the term "procure" does not, in my view, require there to be a direct contractual relationship between the appellant and the person providing the services.

1. Unlike Value Engineering, there was no problem in this case about whether the interposition of contracting entities displaced the words of s-s 37(1) of the PTA 2007. The question instead was whether a person relevantly "procures" the services of another when those services may have been previously committed or dedicated to a task. I find that the answer is yes. Subsection 37(1) of the PTA 2007 uses the word "procure" in a sense functionally equivalent to "supply", "obtain" or "make available".
2. The Sub Contracting Agreement is the contract where CXC Consulting most clearly "procures" for its clients IT services to be supplied by consultant entities. Clause 3.1 makes the point most clearly. "The Specialist" (including workers employed by subcontractor entities) agrees to enter engagements with the client for the supply of IT services to the client. Whilst terms of the Consultancy Agreement (between CXC Consulting and the client) refer to what CXC Consulting has done or will do in relation to contractor entities, there is no privity with those entities by which they can be procured.

48 The Tribunal referred to three aspects of Mr Thuell's evidence. First, in every case there was a separate agreement between the contractor and CXC Consulting. Secondly, CXC Consulting or a related entity, drafted each of the contracts. Thirdly, CXC Consulting invoiced the client or enduser for IT services supplied and CXC Consulting then paid the contractor.

**49 CXC Consulting submitted that leave to appeal should be granted and that its questions of law were directly relevant to the relief that it claimed and arose from the Tribunal's decision.

50 It submitted that the Tribunal had misconstrued s 4(1) and s 37(1) because all actions connected to the procuring of the contractors' work occurred in prior negotiations and dealings between the service providers and the endusers. The Tribunal failed to identify the means by which the services were procured. It erred in deciding that it was immaterial that the services of the service providers were entirely, or more substantially, procured by negotiations occurring or agreements reached before the execution of the CXC Consulting contracts. The Tribunal ignored the evidence of the antecedent dealings between the service providers and end-users. Sections 4(1) and 37(1) required that the service providers' (contractors') services were procured under a contract, whether formal or informal, express or implied. That contract had to be the operative means or medium by which the services were procured. If the services were procured by prior actions, then a subsequent contract could not also be treated as the means by which the services were procured. Mr Judah's evidence was that Red Ant procured his services before he entered into any written contract with CXC Consulting. The contractors did not approach CXC Consulting to be placed with a client or enduser.

51 The Tribunal was obliged to determine the source of the IT contractors' obligations to provide services. It erred in stating in paragraph 29 of its reasons that 'the inquiry starts and ends with the contract'.

52 CXC Consulting submitted that the employment agency provisions were introduced to apply to organizations that carried out a labour hire function. CXC Consulting did not perform that function, it did not source or actively obtain its subcontractors for the purpose of onhiring them.

53 The reference in s 37(1) to a contract 'under which' the services were procured required the establishment of a connection between the execution of the contract and the actual procuring of the contractor's services.[12]

54 The unchallenged evidence before the Tribunal was that the prior arrangement between the contractors and the endusers procured their services. Therefore, the CXC Consulting contracts were not the means or the only means by which the services were procured.

55 In respect of the fifth proposed question of law, CXC Consulting submitted that the Tribunal had failed to provide reasons for its conclusion that it had procured services under the threeparty contracts within the meaning of s 4(1) or s 37(1).**

**56 The Commissioner identified two arguments which it said were the basis of CXC Consulting's case before the Tribunal and which it submitted had been rejected on the facts. The first was that it was necessary to look at the performance of the contract to determine whether CXC Consulting procured the services of a contractor under that contract. This argument raised a question of fact which the Tribunal found against CXC Consulting. The Tribunal correctly concluded that CXC Consulting led no evidence that the contracts were performed other than in accordance with their terms. CXC Consulting's proposed questions of law did not challenge that conclusion.

57 The Commissioner submitted that CXC Consulting's second argument before the Tribunal was that there was no evidence that the contractors' provision of services for clients were under the written contract made with it, as the provision of the services had been procured by antecedent dealings between the clients and the contractors. The Tribunal rejected this argument, concluding that the services were procured, at least, pursuant to the terms of the Sub Contracting Agreement made between CXC Consulting and the contractors. The Tribunal also rejected CXC Consulting's argument that it was not possible for it to procure by its written contracts services which had already been arranged by antecedent negotiations.

58 None of CXC Consulting's questions of law directly attacked the Tribunal's conclusions.**

**59 I consider that CXC Consulting's first four questions of law do arise in or from the Tribunal's decision and bear directly upon the relief which it seeks in these appeals. The argument that ss 4(1) and 37(1) should not be read as applying to services which had already been the subject of an agreement or arrangement raises a question of law. That argument, which was not accepted by the Tribunal, underpins questions one to four and concerns the correct interpretation of ss 4(1) and 37(1).

60 CXC Consulting has established sufficient doubt about the Tribunal's decision concerning the interpretation of ss 4(1) and 37(1) to justify the grant of leave to appeal on those grounds. If CXC Consulting established the arguments on which it bases questions one to four, then to allow the Tribunal decision to go uncorrected would impose a substantial injustice.[13] Leave to appeal should therefore be granted under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 in respect of grounds one to four.

61 CXC Consulting by question of law five sought to argue that the Tribunal erred in law by not giving separate reasons for its conclusion that services provided under the threeparty contracts came within the terms of ss 4(1) and 37(1).[14] However, the Tribunal's path of reasoning was clear enough, even if not expressly applied to the threeparty contracts. It considered that the obligations undertaken under each of the three forms of contract attracted the operation of ss 4(1) and 37(1). It is clear enough that its reasons were the same for the threeparty contracts as for the twoparty contracts. That approach is understandable because whenever a threeparty contract was entered into, CXC Consulting and the worker also entered into a twoparty contract.

62 Question five is not arguable, and I do not grant leave to appeal in respect of it. Proposed ground of appeal seven relates to question of law five and therefore does not require consideration.

63 Proposed ground of appeal six contained in the Further Amended Proposed Notice of Appeal alleges that the Tribunal erred by failing to provide reasons for excluding from consideration the prior arrangement between the worker and the enduser when applying s 37(1). No question of law that CXC Consulting sought to argue related to this ground and no separate submissions were directed to it. In any event, it is sufficient to say that the Tribunal in paragraphs 43 and 44 of its reasons provided its path of reasoning for its conclusion that ss 4(1) and 37(1) applied to the written contracts that CXC Consulting entered into.**

Consideration of the grounds of appeal one to five

**64 The first, second, third and fifth grounds of appeal can be considered together. The fourth ground requires separate consideration.

65 The first ground of appeal alleges that the Tribunal erred in its construction of s 37(1) (and s 4(1)) by not construing them as requiring that the identified contract be the relevant means by which the services were procured. The second ground of appeal alleges that the Tribunal erred by failing to exercise a judgment as to whether it was the contract or prior arrangements between the worker and the end-user which was properly to be seen as the source of the procuring of the contractor's services. The third ground of appeal alleges that having misconstrued the effect of s 37(1), the Tribunal erred by regarding the question of whether the contract was one under which the services were procured by the taxpayer as a question to be resolved by reference to the terms of the contract alone, to the exclusion of the prior arrangement between the contractor and the enduser. The fifth ground of appeal alleged that by failing to exercise the judgment called for under s 37(1), the Tribunal failed, as a consequence, to take into account the prior arrangement between the worker and the end-user, which was a relevant consideration under s 37(1).

66 In my opinion, CXC Consulting has not established any of these grounds.

67 The Tribunal's conclusions are set out in paragraphs 43 and 44 of its reasons. It decided that s 37(1) (and s 4(1)) used the word 'procure' in a sense functionally equivalent to 'supply', 'obtain' or 'make available'. It then concluded that the Sub Contracting Agreement was the contract where CXC Consulting 'mostly clearly procures for its clients IT services to be supplied by consultant entities'. The Tribunal had previously noted that there was no evidence led by the plaintiffs to the effect that the contracts were performed otherwise than in accordance with their terms. For reasons that I give later, the Tribunal's statement in paragraph 29 'that the inquiry starts and ends with the contract' was not erroneous in the context presented by these proceedings.

68 In my opinion, the Tribunal's conclusions were correct and did not involve any error of law. In order to provide my reasons for that conclusion, it is first necessary to consider the meaning of ss 4 and 37, and then to explain why CXC Consulting procured the services of service providers for clients under contracts.**

The interpretation of s 4 and s 37

**69 Statutes, including revenue statutes, are to be interpreted according to the ordinary and grammatical sense of the words used in them.[15]

70 However, the verb 'procure' has various meanings depending on the context in which it is used. Those meanings generally require some causal connection between an action and an outcome. CXC Consulting's case appeared to be that the word 'procure' connoted an active obligation on the procurer to find or source the person or services procured.

71 The Oxford English Dictionary contains a number of definitions of the word 'procure', including:**

1. To endeavour (also: to connive, conspire) to do something; to expend effort, strive for something, or unto an end; to use means, take measures.

1. a. To prevail upon, induce, persuade, get (a person) to do something.
2. a. To acquire or obtain, esp. with care or effort; to gain, get possession of (now the usual sense). In early use also: to secure the help of, to win (a person) over to one's side; to recruit.
3. a. To bring about, cause, or produce, esp. with care or effort; to cause to be done.

72 The Macquarie Dictionary gives the following definition:

1. to obtain or get by care, effort, or the use of special means: to procure evidence. 2. to effect; cause; bring about, esp by unscrupulous or indirect means: to procure a person's death. 3. to obtain for the gratification of lust or purposes of prostitution. -v.i. 4. to act as procurer or pimp.

73 The Tribunal referred to the statement of Davies JA in R v F; ex parte A-G (Qld),[16] in considering a provision of the Queensland Criminal Code that:

The word 'procure' is a plain English word. It is not a term of art. However its meaning may change depending on the context in which it is used. In particular the degree of proximity between procurement and what is procured may vary depending on the context in which the word is used.

**74 An example of the consideration of the term 'procure' in connection with the use of the term 'procure' in payroll tax legislation dealing with the liability of employment agents is the decision of the Full Court of the Western Australian Supreme Court in Value Engineering (Australasia) Pty Ltd v Commissioner of State Revenue(WA),[17] which involved the Pay-roll Tax Assessment Act 1971 (WA) and which was referred to in the Tribunal's reasons which are set out above. The facts of that case differed from the present, in that the taxpayer performed a role more like, although not identical to, the traditional labour hire firm. The Full Court held that the contracts entered into between the taxpayer and the subcontractors constituted arrangements whereby the taxpayer procured the services of workers for the clients.

75 The relevant passage in the judgment of Kennedy J, who together with Burt CJ formed the majority of the Court that dismissed the taxpayer's appeal, is set out in the Tribunal's reasons which are set out above. I will only repeat one sentence:**

The use of the term "procure" does not, in my view, require there to be a direct contractual relationship between the appellant and the person providing the services.[18]

**76 However, the Value Engineering Case[19] is not of direct assistance in determining whether CXC Consulting did procure the services of contractors under contracts for the clients.

77 The verb 'procure' can refer to the provision of either services or persons, or both. When used in ss 4(1) and 37(1), the word 'procure' refers to both the provision of services and to the person providing the services.

78 The phrase 'under a contract' in ss 4(1) and 37(1) refers to the source of the obligation under which the services were performed and to the connection between the contract and the performance of the obligation.[20]**

Did the evidence justify the Tribunal's conclusion that CXC Consulting procured the services of service providers under contracts for clients?

**79 The effect of the three forms of contract is best identified by bearing in mind that in every case CXC Consulting entered into a contract, being the two-party contract, with the contractor. Under that contract, CXC Consulting engaged the contractor and the contractor was to be paid consultancy fees calculated from the revenue that CXC Consulting received from third parties who entered into agreements for the contractors' services.

80 In a commercial context, when a business seeks the provision of services, contracts are usually preceded by negotiations, and a written contract may often replace earlier oral contracts or arrangements. When IT workers engaged CXC Consulting they, the endusers and CXC Consulting, decided to record the terms on which services would be provided in contracts drafted by CXC Consulting. Those contracts should be taken as meaning what they say.

81 There was limited evidence of the negotiations and arrangements between the clients and the contractors that occurred before the written contracts with CXC Consulting were executed. There was Mr Thuell's belief that in all cases the enduser and the contractor had negotiated the terms of their contract through an exchange of contracts, discussions or emails. There were four emails from contractors to CXC Consulting in evidence. There was also the evidence of Mr Judah.

82 CXC Consulting bore the onus of proving its case: see s 110 of the Taxation Administration Act 1997.

83 It is important to note that CXC Consulting presented no other evidence of antecedent negotiations between contractors and endusers. On CXC Consulting's case there must have been numerous negotiations leading to the contractors providing services to the endusers. No evidence of such negotiations, other than that referred to in the paragraph 81, was presented to the Tribunal. It might be thought that, as CXC Consulting contended that such negotiations led to the procuring of the contractors' services, it needed to present a considerably greater body of evidence of the content of those negotiations than it did.

84 However, taking the limited evidence that CXC Consulting presented to the Tribunal into account, I assume that most, if not all, of the CXC Consulting contracts were preceded by discussions and often agreements between the enduser and the contractor about the work the contractors would do, the rate they would be paid and the length of their engagement. Nevertheless, as I have previously stated, in each case CXC Consulting and the contractor entered into a twoparty contract. In 70 per cent of cases, there was also a threeparty contract.

85 No party suggested that the CXC Consulting contracts were not intended to have legal force. Nor was there any evidence that the three forms of written contracts and the rights and obligations that they created were not intended by the parties to be given their ordinary meaning.

86 CXC Consulting's contracts provided the legal mechanism for the contractor or worker to provide services to the enduser. The evidence suggested that if the contractor commenced work before the CXC Consulting contract was signed, the contract was expressed to apply from the commencement of that work.

87 CXC Consulting by its contracts engaged the contractors to provide services to its clients. Under the contracts made with each of the contractors, they were engaged by CXC Consulting as computer specialists and paid consultancy fees from the revenue received by CXC Consulting from clients for whom the contractors provided services. Under the threeparty contracts, CXC Consulting agreed to provide consultancy skills and services to the client by the contractors. Contracts made between CXC Consulting and the endusers had a similar effect. Clause 3.1 provided that CXC Consulting was engaged by the enduser to provide services to the client through a Key Person - that is, the contractor or service provider.

88 I do not consider that the terms of clause 14 of the three-party contract, whereby the client acknowledged that it had selected the Nominated Consultant ie the contractor, affects the analysis of the contracts that I have attempted in the previous paragraph. As I have stated, the written contract with the contractor provided that CXC Consulting engaged the contractor as a computer specialist.

89 CXC Consulting provided no explanation of why its contracts contained provisions extending beyond salary packaging and the administration of contractors' remuneration to matters such as its engagement and payment of the contractors.

90 I accept CXC Consulting's submission that these cases are to be decided by applying the terms of the statute and not principles of contract law that may restrict the weight that can be given to precontract discussions.[21] However, the provisions of the statute are to be applied to the terms of the contract and not just to antecedent negotiations. The contracts are to be taken as meaning what they say and as thereby binding the parties to their legal terms upon which the contractors provided services to the endusers.

91 The three-party contract between CXC Consulting, the enduser and contractor procured the contractor's services on behalf of CXC Consulting for the enduser.

92 The twoparty contract between CXC Consulting and the contractor required the contractor to supply services to the enduser and authorised it to receive payments from the endusers on the contractor's behalf. It also provided that contractors were bound by contracts that CXC Consulting signed with clients on their behalf and with their permission.

93 The twoparty contract between CXC Consulting and the enduser procured the supply of the contractor's services to the enduser in exchange for payment of the contractors' fees to be made to CXC Consulting.

94 The existence of the written contracts supports the conclusion that CXC Consulting brought about or obtained and, applying the dictionary definitions, procured the provision of the contractors' services to its clients on terms contained in the written contracts. It entered into contracts with the contractors and the endusers which obligated the contractors to provide specified services to endusers for an agreed rate of payment. It, therefore, by its own actions in arranging for the entry into the written contracts, brought about, obtained and procured the provision of services by contractors for its clients.

95 The Tribunal's task was to decide whether the provision of services under the written contracts came within the definition of 'employment agency contract' in ss 4(1) and 37(1). I consider that the Tribunal correctly decided that CXC Consulting procured the services of the contractors for its clients under the contracts. It follows that ss 4(1) and 37(1) applied to the provision of the services under the contracts, so that CXC Consulting was an employment agent and the contracts were employment agency contracts. The fact that there had been previous arrangements between the contractors and endusers for the provision of the services does not prevent that conclusion.

96 There was nothing in the extrinsic materials, ie the Parliamentary debates and Explanatory Memoranda, relating to the 1971 and the 2007 Acts that suggests that effect that I have given to ss 4(1) and 37(1) on the facts presented by these proceedings was not intended by Parliament.

97 It does not alter my conclusion that the contractors' services might still have been provided if they had not entered into the CXC Consulting contracts. The parties to those contracts became bound by their terms upon their execution. Those contracts regulated the provision of the services by the contractors for CXC Consulting's clients.

98 I do not consider that the Tribunal's statement in paragraph 29 of the reasons that 'the inquiry starts and ends with the contract', if taken literally and out of the context of the whole of the reasons, accurately describes the effect of ss 4(1) and 37(1). I accept that in cases where a contract did not reflect the agreement between the parties, it would be incorrect to apply the provisions of ss 4(1) and 37(1) to the terms of the written contract, without also considering the details of previous arrangements reached between the end-user and the contractor.

99 I do not accept the Commissioner's submission that the Tribunal's statement in the third sentence of paragraph 29 was merely recording the submissions made by the Commissioner. The statement appears under the heading 'Analysis' in a section of the decision containing other conclusions reached by the Tribunal. The terms of the footnote to the sentence also suggest that the sentence was a conclusion and not just a recording of the Commissioner's submission.

100 However, when the whole of paragraph 29 is read and the terms of paragraphs 43 and 44 are considered, it is clear enough that the Tribunal was referring in the third sentence of paragraph 29 to the effect of the CXC Consulting contracts. I do not consider that statement to contain an error of law. The Tribunal was entitled to conclude that CXC Consulting procured the contractors' services for its clients under the written contracts.

101 For the above reasons I consider the Tribunal applied the correct interpretation of ss 4(1) and 37(1) in concluding that CXC Consulting did procure the service providers' services under the contracts for its clients. The Tribunal was correct to find that the written contracts were the means of procuring the contractors' services for the endusers because they contained the terms upon which the services were provided. The Tribunal did not find that the written contracts were the only steps that brought about the provision of the services, but rather that CXC Consulting had procured the services of the contractors for the clients under those written contracts.

102 The fourth ground of appeal alleged that the Tribunal reached a conclusion that was not open to it, having regard to the unchallenged evidence of the original procuring of the worker's services under the prior arrangements between the workers and the endusers. An allegation that a Tribunal has reached a conclusion that was not open on the evidence can in certain circumstances provide a ground of appeal.[22] However, I do not consider that the unchallenged evidence before the Tribunal was that services were only procured by prior arrangements between the endusers and the contractors. That submission ignores the effect of the written contracts. They contained the terms upon which the contractors did provide the services to the endusers.

**104 Leave to appeal is granted against the decision of the Victorian Civil and Administrative Tribunal dated 11 September 2012 in each proceeding in respect of Questions of Law numbered one to four, as contained in the Further Amended Proposed Notice of Appeal dated 25 June 2013.

[1] Section 37(1) of the Payroll Tax Act 2007 is the provision relevant to the 2008 and 2009 assessments, which are the subject of the proceedings SCI 5696 and 5697 of 2012. Section 4(1) of the Payroll Tax Act 1971 is the provision relevant to the 2005, 2006 and 2007 assessments which are the subject of proceedings SCI 5690, 5692 and 5695 of 2012.

[2] See the Pay-roll Tax (Amendment) Act 1983.

[4] Drake Personnel Ltd v The Commissioner of State Revenue [2000] VSCA 122; (2000) 2 VR 635.

[5] Affidavit of Christopher Robert Thuell of 5 June 2012, paragraph 28.

[6] Affidavit of Christopher Robert Thuell of 5 June 2012, paragraphs 52-61.

[8] There were two sub-paragraphs numbered (d).

[9] The CXC company which was a party to the third contract exhibited to Mr Thuell's affidavit was Consultants Exchange Australasia Pty Ltd.

[11] The reasons use the numbering 30 and 31 twice and I have repeated that numbering.

[12] See Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 at 539, [49].

[13] Secretary to the Department of Premier and Cabinet v Hulls[ [1999] VSCA 117; 1999] 3 VR 331.

[14] Section 117 of the Victorian Civil and Administrative Tribunal Act 1998 imposes a duty on the Tribunal to give reasons for its orders.

[15] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at [4] and [47].

[16] [2003] QCA 70; (2003) 140 A Crim R 447 at 448 [3].

[20] See eg Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 at 537 and Asciano Services Pty Ltd v Chief Commissioner of State Revenue [2008] HCA 46; (2008) 235 CLR 602 at 616.

[21] The plaintiffs relied on the principles concerning the use of extrinsic evidence for the interpretation of contracts stated by Mason J in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337.

[22] Myers v Medical Practitioners Board (Vic) [2007] VSCA 163; (2007) 18 VR 48 at [46].