Roden Security Services Pty Ltd v Chief Commissioner of State Revenue

Roden Security Services Pty Ltd v Chief Commissioner of State Revenue - [2000] VSCA 122 - VSCA 2009 case summary — Zoe

Legislation 4. The issue was whether the contractors fell within the relevant provisions of the Pay-Roll Tax Act 1971, which provides in s 3A(1)(e):-- "3A Application of this Act to certain contracts (1) A reference in this section to a relevant contract in relation to a financial year is a reference to a contract under which a person (in this subsection referred to as the designated person ), during that financial year, in the course of a business carried on by the person: (a) supplies to another person services for or in relation to the performance of work, (b) is supplied with the services of persons for or in relation to the performance of work, or (c) gives out goods to natural persons for work to be performed by those persons in respect of those goods and for re-supply of those goods to a designated person or, where the designated person is a member of a group, to another member of that group, but does not include a reference to a contract of service or a contract under which the designated person, during a financial year, in the course of a business carried on by the designated person: (d) is supplied with services for or in relation to the performance of work that are ancillary to the supply of goods under the contract by the person by whom the services are supplied or to the use of goods which are the property of that person, (e) is supplied with services for or in relation to the performance of work where: (i) those services are of a kind not ordinarily required by the designated person and are rendered by a person who ordinarily renders services of that kind to the public generally, (ii) those services are of a kind ordinarily required by the designated person for less than 180 days in that financial year, (iii) those services are provided for a period that does not exceed 90 days or for periods that, in the aggregate, do not exceed 90 days in that financial year and are not services: (A) provided by a person by whom similar services are provided to the designated person, or (B) for or in relation to the performance of work where any of the persons who perform the work also perform similar work for the designated person, for periods that, in the aggregate, exceed 90 days in that financial year, (iv) the payment of the consideration under the contract is made at a rate that is not less than $800,000 per annum, or (v) those services are supplied under a contract to which subparagraphs (i)-(iv) do not apply and the Chief Commissioner is satisfied that those services are rendered by a person who ordinarily renders services of that kind to the public generally ..." The decision below 5. The question whether Mr Strachan and Mr Armstrong were in fact independent contractors was not in dispute before the learned Tribunal member (see [3]). There was evidence from each of the contractors in the form of a statement or (in Mr Armstrong's case) a letter; neither of them was made available for cross-examination. This was despite the Tribunal offering an adjournment to allow the appellant to do so, and the respondent, subject to the sums involved, offering to cover the cost of their attendance and their lost earnings for the day. The appellant's representative indicated that despite these alternatives he did not intend to call the contractors to enable them to be cross-examined.

[36]

Respondent's Submissions 39. The respondent's submissions were relatively brief. They can be summarised as follows:- a)the statutory construction point raised by the appellant - that "render" does not mean "provide", is not necessarily correct. The Shorter Oxford Dictionary and the Macquarie Dictionary each include "to perform a service" in their definition of "render". b)the Behmer test is not that which is appropriate in the way in which it is stated by the appellant. That test - which the respondent says is not consistent with the statutory provision as stated by the appellant - would have been failed by the appellant for the same reason, a lack of evidence. c)as to the level of satisfaction required, the Tribunal is required by s 63 of the Act to determine for itself whether it is "satisfied"; the respondent submits that it is for the Tribunal to determine the basis upon which it may reach that satisfaction. The respondent further noted that the submission that High Court decisions (such as Kolotex Hosiery and Avon Downs (1949) 78 CLR 353) should not bind the Tribunal is "an ambitious one". It is fair to say that these submissions were made faintly in the light of the decision in Tasty Chicks Pty Ltd v. Chief Commissioner of State Revenue [2009] NSWSC 1007, and it was noted that the appellant should be given an opportunity reply to the citing of that authority, it being a case decided on 25 September 2009. d)the appellant's natural justice submission is, it was submitted, negatived by a reading of the transcript. The respondent submitted that a description of the proceedings as hostility, obstruction and rudeness should indeed be the very opposite; the transcript shows the learned Tribunal member trying to point out to the appellant's representative the difficulties of trying to prove a case without direct evidence. It is submitted that the parallels drawn between the conduct of this hearing and that in Damjanovic are "frankly offensive and wrong". The comments extracted in the appellant's submissions do not, it is submitted, how what they are extracted to show. e)likewise, it was submitted for the respondent, there is no evidence of prejudgment, merely an awareness and a communication to the appellant of the need for evidence to prove the appellant's case. f)further as to the natural justice point, the respondent relied on the provisions of s 73(4) of the ADT Act and the explanations given to the appellant as to the dangers if it did not seek to produce probative evidence of the nature of the businesses of the contractors. g)while a failure to provide adequate reasons was conceded to be an error of law, it was submitted that "a Tribunal is not required to tediously examine detailed evidence or a minute explanation of every step in the reasoning process" ( Soulemezis v. Dudley (1987) 10 NSWLR 247 at 259C-D). It is suggested that Drake Personnel was not referred to by the appellant in argument.

[37]

Appellant's Submissions in Reply 40. In reply, the appellant made a number of points which mostly restated the original submissions, rather than answering the specific arguments of the respondent. The further points which were raised were:- a)the meaning of "rendering of services" is a broader concept than mere "performance of services". In support of this submission, the appellant pointed to various sections of the Pay-roll Tax Act which used the phrase "performed or rendered" (for example, ss 3AA, 3AD, 3AE, 3B and 6); b)Drake Personnel did in fact adopt the Behmer test, and found that a person who was registered with personnel agencies did in fact "render services to the public". c)the decision of Gzell J, in Tasty Chicks Pty Ltd v. CCSR [2009] NSWSC 1007 was relevant in assessing whether the Tribunal had properly exercised its functions under s 63 of the ADT Act , and the import of that decision was that there was no requirement for a finding of error before the Tribunal was able to examine the quality of the Commissioner's satisfaction; d)the requirements under the payroll legislation are administrative requirements; it should not be the case that a person seeking an exemption should have to adduce "detailed historical evidence" about the contractors they have used. Accordingly, the appellant's interpretation of the relevant sub-section, and reliance on Behmer , are correct. e)as to the natural justice point, the appellant dealt with each of the respondent's arguments and pointed out that the respondent did not deal with each of the appellant's instances in detail, nor did it deal with all the authorities raised by the respondent. It was submitted that the learned Tribunal member's comments were to similar effect to those of the Judge in Damjanovic , rather than their being similar in tone. In a section entitled "Stifling effect on development of Appellant's case" the appellant listed again the references in the transcript to particular issues and noted that the respondent did not deal with all of them. "This alone should raise a real question of whether the appellant was denied natural justice". Mainly the submissions on this point were re-statements of the original arguments.

At a glance

Court

Decision date

Before

Source

Judgment (65 paragraphs)

Parties

Cases Cited (13)

Cited By (6)