Savitri v Chief Commissioner of State Revenue

The nature of the review

1. The provisions of section 100 of the TAA apply to this review. Notably: 1. sub-section 100(2) of that Act provides that neither the Applicant nor the Respondent is limited in the present application to the grounds of the Objection; and 2. sub-section 100(3) of that Act provides that the Applicant has "… the onus of proving the applicant's case in an application for review", an onus which is discharged by reference to the ordinary civil standard: B&L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481.
2. Under section 63(1) of the ADRA, in conducting a review the Tribunal; ".. is to decide what the correct and preferable decision is having regard to the material then before it, including the following: 1. any relevant factual material, 2. any applicable written or unwritten law".
3. Moreover, under section 63(2) of that Act 1997, in doing so the Tribunal: "… may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision".

Legislative provisions

1. At all relevant times, Section 50 of the Duties Act provided as follows: 50 Cancelled agreements (1) An agreement for the sale or transfer of dutiable property that is cancelled is not liable to duty under this Chapter if the Chief Commissioner is satisfied - (a) that the agreement was not cancelled to give effect to a subsale, or (b) that the purchaser or transferee under the agreement is a promoter of a named company proposed to be incorporated and that the company is the purchaser or transferee of the dutiable property under a subsequent agreement, or (c) that the purchaser or transferee under the agreement and the purchaser or transferee under a subsequent agreement relating to the same dutiable property were related persons when the agreement that is cancelled was entered into. (2) If duty has been paid on an agreement that is not liable to duty under this Chapter because of this section, the Chief Commissioner must reassess and refund the duty if an application for a refund is made within - (a) 5 years of the initial assessment, or (b) 12 months after the agreement is cancelled, whichever is the later. (3) In this section, cancelled means rescinded, annulled or otherwise terminated without completion.

The parties' arguments

1. The Applicant says in summary as follows: 1. The purported cancellation of the Contract on 27 August 2019 was not effective. 2. This was for the following reason: 1. The Applicant never received the occupation certificate necessary to enliven the Applicant's obligation under Special Condition 31 of the Contract to complete the purchase of the Property [1] . 2. Accordingly, the Vendor's right under the Special Condition 32 of the Contract to give a notice to complete was not enlivened. 3. Consequently, the Vendor's purported cancellation of the Contract on 27 August 2019 was ineffective. 1. It was also ineffective because: 1. Under clause 20.6.1 of the Contract, a notice under the Contract is signed by a party if signed by the party or the party's solicitor; 2. A party's solicitor is defined as being the solicitor named as such in the Contract or in a subsequent notice to the other party; 3. The Vendor's named solicitor was Gadens Lawyers, but the relevant notices were all signed by a firm called Dentons; 4. No notice was given to the Applicant of Gadens Lawyers' replacement by that firm; and 5. Accordingly, all notices purportedly signed or served on behalf of the Vendor by Dentons were ineffective for purposes of the Contract, thus rendering ineffective the Vendor's purported cancellation of the Contract on 27 August 2019. 1. Rather, the Contract was terminated on 1 December 2021: 1. The first that the Applicant learnt of the purported cancellation of the Contract was on 1 December 2021, when the Applicant "... learned that the relevant vendor or its solicitor sent a letter purporting to terminate the Contract. It was the first and only time I received such notice". [2] 2. The Applicant in fact terminated the Contract on 1 December 2021. 1. The Applicant's application for the reassessment and refund of duty on the Contract following its termination was made on 21 April 2022. This was well within the period of 12 months after the Contract's termination on 1 December 2021 for the making of such an application under section 50(2) of the Duties Act. 2. The Respondent was thus incorrect in refusing to reassess the Applicant's liability and refund the duty paid. 3. Moreover, for the Respondent to retain the duty paid in these circumstances amounts to unjust enrichment of the Respondent. 4. Further, the Respondent should have exercised in the Applicant's favour a general power to pay refunds.
2. The Respondent says that: 1. There is no reason to conclude that the purported cancellation of the Contract in August 2019 was not effective in accordance with the terms of the Contract and the notices apparently sent under it. 2. There is no evidence to indicate that the Contract was in fact terminated in December 2021. 3. There is evidence to indicate that Dentons is the successor firm to Gadens Lawyers. 4. The application under section 50 was made on 21 April 2022, which was after both: 1. The fifth anniversary of the initial assessment, which occurred on 21 December 2016; and 2. The expiry of 12 months from the date of termination of the Contract, on 27 August 2019. 1. It was thus made after the expiry of the statutory time limit for making such an application. 2. The Respondent has no discretion to reassess the Contract or refund duty paid on it in the absence of statutory authority to do so. There is no such authority. 3. The concept of unjust enrichment has no application.

Evidence

1. Clause 20.6 of the Contract [3] , as varied by Special Conditions 23.1(y) and (z) of the Contract, provides as follows: 20.6 A document under or relating to this contract is - 20.6.1 signed by a party if it is signed by the party or the party's solicitor (apart from a direction under clause 4.3); 20.6.2 served if it is served by the party or the party's solicitor; 20.6.3 served if it is served on the party's solicitor, even of the party has died or any of them has died (this clause 20.6.3 also applies to any document in an action in connection with this contract including any writ of summons or originating process); 20.6.4 served if it is served in any manner provided in s170 of the Conveyancing Act 1919; 20.6.5 served if it is sent by fax to the party's solicitor, and is taken to have been received at the time shown in the transmission report that the whole fax was sent; 20.6.6 served on a person if it (or a copy of it) comes into the possession of the person; and 20.6.7 served at the earliest time it is served, if it is served more than once.
2. The italicised terms used in that clause are defined in clause 1 of the Contract [4] , and are relevantly as follows: party each of the vendor and the purchaser serve serve in writing on the other party solicitor in relation to a party, the party's solicitor or licensed conveyancer named in this contract or in a notice served by the party.
3. The cover page of the Contract [5] specifies: 1. At Item 3, that the Vendor's solicitor is Gadens Lawyers, and provides a postal address, DX address, telephone number, fax number and contact name within the firm; and 2. At Item 11, that the Applicant's solicitor for purposes of the Contract is Alim Lim & Partners, and provides a street and postal address, telephone number, fax number and contact name within the firm.
4. Nowhere in the evidence is anything to indicate that: 1. The Vendor gave notice to the Applicant in any way contemplated by the Contract that its solicitors had ceased to be Gadens Lawyers and that Dentons had become its solicitors; or 2. The Applicant gave notice to the Applicant in any way contemplated by the Contract that: 1. the fax number referred to in Item 11 of the Contract had ceased to be an adequate method of serving notices on the Applicant or its solicitors; or 2. Alim Lim & Partners were no longer the Applicant's solicitors for purposes of the Contract; or 3. Alim Lim & Partners physical address had changed.
5. The evidence indicates that: 1. On 21 May 2019, Dentons sent to the Applicant's solicitors by courier to the street and postal address set out in Item 11 of the Contract a letter: 1. giving notice that the Strata Plan incorporating the Property had been registered, 2. giving notice that an occupation certificate had been issued in respect of the Property. 3. stating that it enclosed a copy of the occupation certificate, and 4. informing the Applicant's solicitors that completion "... must now take place in accordance with the time frames set out in the contract" [6] ; 1. On 24 June 2019, Dentons sent a Notice to Complete the Contract signed by a partner of Dentons, claiming to be acting as solicitors for the Vendor, by fax to the Applicant's solicitors, at the fax number provided for in Item 11 of the Contract [7] ; 2. A fax delivery report indicates that the fax in question was successfully sent to that fax number, between 10:53:12 am and 10:54:13 am on that date [8] ; 3. On 27 August 2019, Dentons sent a Notice of Termination signed by a partner of Dentons, claiming to be acting as solicitors for the Vendor, by fax to the Applicant's solicitors, at the fax number provided for in Item 11 of the Contract; the notice gave notice that the Contract was terminated, that the deposit paid by the Applicant was forfeited, and that the Vendor reserved its rights under the Contract and at law [9] ; and 4. A fax delivery report indicates that the fax in question was successfully sent to that fax number, between 10:59:28 am and 11:03:59 am on that date [10] .
6. The only evidence that the Applicant terminated the Contract on a date later than 27 August 2019 is in paragraphs 6 and 7 of the Applicant's affidavit dated 17 April 2023, which state as follows: "6 That Contract was terminated on 1 December 2021. 7 On or about 1 December 2021, I learned that the relevant vendor or its solicitor sent a letter purporting to terminate the Contract. It was the first and only time I received such notice".
7. There was no notice of termination or other communication (however entitled) between the Applicant or the Applicant's solicitors and the Vendor or the Vendor's solicitors appended or exhibited to the affidavit which documented or otherwise corroborated the statement in paragraph 6 of the Affidavit.
8. The Respondent provided to the Tribunal in unverified form a copy of an email dated 5 June 2023 from the Crown Solicitor, representing the Respondent, to the Applicant's solicitors. This email referred the recipients to: 1. The website of a publication named Lawyers Weekly, and 2. A Wikipedia entry, concerning an international law firm named Dentons.
9. The Respondent also provided the Tribunal, also in unverified form, with printouts of this on-line material. These reports state that "In December 2016, Dentons launched in Australia and Papua New Guinea by combining with leading Australian law firm Gadens" [11] and that on 5 December 2016 it was expected that "The Gadens Sydney and Perth offices will officially become part of the global mega firm Dentons as they pursue new and extended business opportunities" [12] .

Reasoning

1. The Applicant's argument that the Contract was not terminated on 27 August 2019 is unconvincing, since: 1. The documentary evidence described above is consistent with that having occurred; and 2. The Applicant has not demonstrated on the balance of probabilities to the contrary.
2. The Applicant's first argument was that she had never received the occupation certificate, so that the consequential notice to complete and notice of termination of the Contract were misconceived. However, the letter dated 21 May 2019 from Dentons clearly states that a copy of the occupation certificate is enclosed with it. The Applicant's solicitors recognise in their letter dated 22 April 2022 to the Respondent that they received this letter; indeed, they attach a copy of it. That the Applicant herself has not received a copy of the occupation certificate, as she deposes in her affidavit, does not demonstrate on the balance of probabilities that the occupation certificate did not accompany Dentons letter of 21 May 2019, since: 1. There are at least two other scenarios that are entirely consistent with the Applicant's statement: first, that the occupation certificate was not passed on to her by her solicitors, and secondly that it was mislaid by them; and 2. It is highly implausible that solicitors experienced in acting for developers on "off the plan" sales: 1. in issuing to a purchaser such as the Applicant a letter such as their letter of 21 May 2019, would fail to enclose with the letter a copy of the occupation certificate, when: 1. provision of that copy is, under the terms of the relevant sale contract, an essential precondition to triggering the purchaser's obligation to complete the purchase (for which detailed logistical arrangements are set out in the letter); and 2. the first paragraph of the letter expressly states that a copy of the occupation certificate is enclosed; or 1. if by some oversight they had failed to include the occupation certificate with their letter, would not: 1. quickly be informed by their client or other purchasers' solicitors of their failure; and 2. act promptly on becoming aware of their neglect to remedy the situation by serving the occupation certificate, at the cost of a delay in the timetable for settlement.
3. In their letter of 21 April 2022 seeking a refund, the Applicant's solicitors observe that "In August 2019 the Vendor had apparently sent us a termination notice via facsimile, However, we had stopped using a facsimile machine by that time" and "... although we remained on record as solicitor, we had actually moved office in 2018 and that is a further reason that we never received the termination notice visa [sic] an outdated technology such as a facsimile". As noted above: 1. Clause 26 of the Contract treats as served a document under or relating to the Contract if "it is sent by fax to the party's solicitor, and is taken to have been received at the time shown in the transmission report that the whole fax was sent"; 2. The evidence summarised above indicates that, technologically outdated or not, at all material times service of notices by fax was provided for in the Contract and the Applicant's solicitors' fax number agreed for purposes of the Contract was as set out in Item 11 of the Contract's cover page; and 3. The evidence indicates that the notice to complete sent on 24 June 2019 and the notice of termination sent on 27 August 2019 were sent to that fax number.
4. What follows is that the Applicant has not demonstrated on the balance of probabilities any defect in the content or mechanics of delivery of those notices such as to impeach the apparent termination of the Contract on 27 August 2019.
5. The next issue raised by the Applicant concerns the effect of Dentons becoming the Vendor's solicitors without any formal notice to that effect being given under the definition of solicitor in clause 1 of the Contract, and the consequences of that unnotified change for the various communications purportedly given by Dentons on behalf of the Vendors (including the notice to complete and the notice of termination): 1. At the outset, there is nothing in the on-line material referred to in the Crown Solicitor's email of 5 June 2023 which provides a basis to reach any conclusion as to the nature of the events that took place on 5 December 2016 in relation to the firms of Gadens Lawyers and Dentons, other than that from that date some part of the practice previously conducted by the former was conducted by the latter. Hence no view can be reached as to whether from that date: 1. Dentons continued to be the same legal entity as Gadens Lawyers (in which case for purposes of the Contract there was merely a change of name), or 2. the relevant part of Gadens Lawyers' practice was conducted by a new legal entity (in which case there is every possibility that Dentons were not, without specific notice to that effect under the Contract, the Vendor's solicitor as defined in the Contract). 1. Since there was no evidence of any such notice being given under the Contract, the Tribunal must consider the consequences, if any, of Dentons not being the Vendor's solicitor (in the defined sense) in relation to the purported termination of the Contract in 2019. 2. The Applicant says that if Dentons were not the Vendor's solicitor as so defined, the relevant notices were: 1. formally invalid, because not signed by the Vendor or the Vendor's solicitor, as required under clause 20.6.1 of the Contract; and 2. not properly served under clause 20.6.2, because not served by the Vendor or its solicitor. 1. This argument assumes that clause 20.6 operates prescriptively to establish exclusively the methods by which notices under the Contract are to be signed and served. However, this is not what clause 20.6 provides. It is expressed, not prescriptively, but rather as a set of rules that, if followed, ensure that notices and other communications cannot be challenged on formal grounds or because of the way in which they are communicated. It provides that a notice or other communication "is served" if the notice meets certain formal conditions and its provision meets certain conditions of delivery; it does not, however, provide that a notice or communication must meet those conditions, or must not depart from them. It thus operates as a safe harbour, not as a prescriptive code. 2. The Vendor, as is evident from Item 2(b) of the Contract, is a body corporate [13] . It is thus an artificial legal person that is only able to undertake juristic acts, such as entering into or giving notices under a contract, either: 1. ".. through the activity of a person who had the actual or apparent authority of the company" [14] ; or 2. By one of the methods prescribed by law for the execution of documents by corporations [15] . 1. The letter dated 21 May 2019 from Dentons indicates that Dentons were in fact (if not formally, in terms of the Contract's definitions) acting as the Vendor's solicitors for the purposes of carrying through the property development and sale scheme of which the Contract was one element. Paragraph 4 of that letter, which states as follows: "Please note that an annexure page will be attached to the Transfer for the Transferor's execution and the Transfer will be signed under power of attorney. A copy of the Power of Attorney can be downloaded from our settlement website" [16] is significant, since it indicates that Dentons fulfilled that role with the active participation of the Vendor, as demonstrated by the latter's power of attorney being made available for inspection and downloading on the Dentons settlement website. 1. It is uncontroversial that a solicitor acts as his client's agent. It is in particular well established that: "... where a vendor so arranges matters that his solicitor undertakes on his behalf the carrying out of a conveyancing transaction as a whole he thereby not only authorizes his solicitor to perform all necessary steps but also places the solicitor in the position of acquiring at first-hand knowledge of relevant facts ..." [17] . 1. The consequence, in the Tribunal's view, is that whether or not Dentons were the Vendor's solicitor within the meaning of the Contract, they were in fact acting with the Vendor's authority as its solicitor for purposes of "performing all necessary steps" (in Stephen J's words) to ensure completion of the property development and sale scheme of which the Contract was a part. This necessarily extended to giving notices to complete and notices of termination to defaulting purchasers, such as the Applicant. The Applicant did not, therefore, demonstrate any formal deficiency in the notice to complete or the notice of termination of the Contract, or any defects in the processes by which they were given such as to impeach the termination of the Contract on 27 August 2019.
6. Where this all leads to is that in the Tribunal's assessment: 1. the Contract was terminated on 27 August 2019; 2. this was a cancellation of the Contract within the meaning of section 50(3) of the Duties Act 1997; 3. the period of 12 months from cancellation of the Contract that was available to the Applicant under section 50(2) of the Duties Act 1997 to seek a reassessment and refund of duty ran from that date, and expired on 27 August 2020; 4. the alternative period under section 50(2), of 5 years from the date of the initial assessment expired on 21 December 2021; and 5. the application under section 50 was made by the Applicant outside the statutory time limit under that section.
7. In any event, the Applicant provided no evidence, apart from paragraph 6 of her first affidavit [18] , that the Contract was terminated on 1 December 2021. This statement was an assertion as to a particular legal position, rather than evidence of any factual matter relevant to deciding the legal matters under consideration. As noted earlier, it was unsupported by any documentation or evidence as to facts, events or circumstances that might indicate some relevant action by the Applicant in December 2021. It thus had little, if any, evidentiary value.
8. The Applicant argued that the Respondent should have exercised in her favour a discretion to refund the duty paid on the Contract. The Tribunal does not accept this proposition: 1. Section 50 of the Duties Act is clear, that a reassessment and refund are available only if application is made under section 50(2) within the time limits specified in that section; 2. The application for reassessment and refund was made on 21 April 2022, which was well after both: 1. The fifth anniversary on 21 December 2021 of the initial assessment; and 2. The expiry on 27 August 2020 of 12 months from the date of termination of the Contract. 1. There is no statutory provision that allows the Respondent to vary or disregard these periods, as the Tribunal has previously pointed out [19] . 2. Moreover, the Respondent has no general statutory discretion to waive or vary tax liabilities. The Applicant did not identify any legislative provision or court or tribunal decision that confers or recognises any such general discretion but did refer to section 18 of the TAA. This requires the Respondent to refund tax paid, but only: 1. where the taxpayer has paid "a greater amount of tax [paid] in relation to a tax liability than the amount assessed for that liability" [20] , and 2. to the extent of that excess. This provision can have no application in the present case, since there is no dispute that the duty originally paid by the Applicant in relation to the Contract was the correct amount. Rather, the issue in the present case goes to the availability of a reassessment and a refund under section 50, to which section 18 is irrelevant. 1. Nor do general notions or fairness or justice allow the adjustment of tax liabilities. The High Court of Australia unambiguously rejected such a proposition in Federal Commissioner of Taxation v Ryan [21] . 2. That the Respondent may not have expressly considered in relation to the Applicant's request whether it had a general discretion to refund tax payments is not, as the Applicant argued, an appropriate basis on which to remit the matter for further consideration by the Respondent. The Respondent's statutory function under section 61 of the TAA includes authority to "do all such things as are necessary or convenient to give effect to this Act and the other taxation laws". This is not a discretion to refrain from administering the taxation laws in accordance with their terms; indeed, it is quite the reverse.
9. Finally, the Applicant argued that the principles set out in Davids Securities Pty Ltd v Commonwealth Bank of Australia [22] , for the recovery of money paid under a mistake of fact or law, should apply. While it is clear that this doctrine extends to payments of tax or duty made by a taxpayer in the mistaken belief that he or she was under a legal obligation to pay [23] , the Applicant's situation is different. She paid duty on the Contract in accordance with the Duties Act 1997, and upon the Contract's termination on 27 August 2019 became entitled to make application, until at the latest 21 December 2021, for a reassessment and refund of the duty paid. By failing to make a timely application, she did not avail herself of this entitlement. While this was a regrettable outcome for the Applicant, it does not demonstrate any mistake of fact or law on her part which might engage the application of Davids Securities Pty Ltd v Commonwealth Bank of Australia and Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd.

Orders

1. The Tribunal confirms under section 101(a) of the Taxation Administration Act 1996 the Respondent's decision on 13 May 2022.

Endnotes

1. Applicant's affidavit dated 30 May 2023.
2. Applicant's affidavit Dated 17 April 2023.
3. Second Section 58 Documents, pages 18, 32 and 33.
4. Second Section 58 Documents, page 13
5. Second Section 58 Documents, page 1
6. First Section 58 Documents, Tab 1(a)(ii), pages 13 to 16
7. Second Section 58 Documents, page 383
8. Second Section 58 Documents, page 385
9. First Section 58 Documents, Tab 1(a)(ii), pages 13 to 16Tab 4a, pages 41 and 42
10. Second Section 58 Documents, page 386
11. https://en.wikipedia.org.wiki/Dentons
12. https://www.lawyersweekly.com.au/corporate-counsel/20155-gadens-duo-undergoes-dentons-rebrand.
13. Corporations Act 2001 (Cwth), s119
14. Austin RP and Ramsay IM, Ford, Austin and Ramsay's Principles of Corporations Law, 16th edition, paragraph [14.010]
15. Austin RP and Ramsay IM, Ford, Austin and Ramsay's Principles of Corporations Law, 16th edition, paragraph [14.020].
16. First Section 58 Documents, page 38
17. Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634, per Stephen J
18. Applicant's affidavit Dated 17 April 2023
19. Li v Chief Commissioner of State Revenue [2023] NSWCATD 81, at [20] and [21].
20. Taxation Administration Act 1997, s18(1).
21. (2000) 201 CLR 109, at 123
22. (1992) 175 CLR 353
23. Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 66-68. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 29 November 2023 - Description of the legislative provisions under s.50(2)(a) of the Duties Act 1997 ("the Act") DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 November 2023