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LOGAN J: 1 Scone Race Club Limited (the Club) operates a racecourse in the rural town of Scone in the Upper Hunter region of New South Wales. Given that role, the Club is a "race club" in terms of s 3 of the Thoroughbred Racing Act 1996 (NSW) (Thoroughbred Racing Act). 2 Within New South Wales, the thoroughbred racing industry is regulated by a combination of statutory provision, as found in the Thoroughbred Racing Act, the Australian Rules of Racing (ARR) and Local Rules of Racing (LR). The Club is also a "Club" within the definition of that term in ARR 1 by virtue of its holding race meetings. 3 The ARR are made and administered by Racing Australia Limited (formerly the Australian Racing Board) (Racing Australia), a company limited by guarantee. The purpose of Racing Australia is to promote and manage the thoroughbred racing industry in Australia: ARR 208. Insofar as it relates to New South Wales, that purpose and the ARR are expressly recognised by s 13 of the Thoroughbred Racing Act, which provides (and which provided in the relevant period): (1) Racing NSW has the following functions: (a) all the functions of the principal club for New South Wales and committee of the principal club for New South Wales under the Australian Rules of Racing, (b) to control, supervise and regulate horse racing in the State, … (e) such functions as may be conferred or imposed on Racing NSW by or under the Australian Rules of Racing or any other Act … 4 The reference in s 13 to "Racing NSW" is a reference to a body corporate termed "Racing New South Wales" established by s 4(1) of the Thoroughbred Racing Act and entitled, by s 4(2) of that Act, to use the name "Racing NSW" in the exercise of its functions. By s 5 of that Act it is provided that, "Racing NSW does not represent the Crown and is not subject to direction or control by or on behalf of the Government." For the purposes of the ARR, Racing NSW is a "Principal Racing Authority": ARR 1. The terms "principal club for New South Wales" as found in s 13 of the Thoroughbred Racing Act and "Principal Racing Authority" (PRA) are interchangeable. There are like PRA in each of the other States and in the self-governing Territories, with Racing Australia being the national governing body for the industry. 5 As a PRA, Racing NSW is empowered to make LR, provided that they are not inconsistent with the ARR: ARR 6. The existence of those LR is expressly recognised by the Thoroughbred Racing Act: see, for example, the definition of "Rules of Racing" in s 3 of that Act. 6 Between 1 July 2009 and 30 June 2014 (inclusive - the Relevant Period) the Club paid fees to jockeys in respect of the riding in horse races and barrier trials (riding fees). 7 On and from 1 July 2000 and throughout the Relevant Period, LR 72(1) provided: Clubs shall pay such fee for a jockey or apprentice jockey in consideration for their riding a horse in a race or a barrier trial as may be set from time to time by the Board [i.e. Racing NSW]. The Club fell within the ambit of the reference in LR 72 to "Clubs". After the expiry of the Relevant Period, an amendment was made to LR72 such that, on and from 1 July 2014, it provides, "Clubs shall at the direction of Racing NSW pay, on behalf of the owners of a horse" the riding fees and "[n]othing in… LR72(1) makes Clubs personally liable for those fees". 8 The respondent Commissioner of Taxation formed the view that, during the Relevant Period, the Club ought to have been making superannuation contributions in relation to the riding fees that it was paying to jockeys. He concluded that, in respect of each quarter during the Relevant Period, the Club had what the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA) terms a "superannuation guarantee shortfall". Section 5 of the Superannuation Guarantee Charge Act 1992 (Cth) imposes a superannuation guarantee charge on any superannuation guarantee shortfall of an employer. Section 16 of the SGAA provides that the charge imposed on an employer's superannuation guarantee shortfall for a quarter is payable by the employer. The components of a superannuation guarantee shortfall are set out in s 17 of the SGAA. They include the total of an employer's "individual superannuation guarantee shortfalls" for the quarter concerned. An individual superannuation guarantee shortfall is calculated in accordance with a formula specified in s 19 of the SGAA. Components of that formula are a charge percentage which varies over time and the total salary and wages paid by the employer to the employee for that quarter. 9 For the purposes of the SGAA, s 12 defines who is an employee and an employer. That section makes plain that the embrace of the definitions of each term includes but extends beyond its ordinary meaning. To this end, s 12(1) of the SGAA provides: (1) Subject to this section, in this Act, employee and employer have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (11): (a) expand the meaning of those terms; and (b) make particular provision to avoid doubt as to the status of certain persons. 10 Of particular relevance for the purposes of this proceeding is s 12(8)(a) of the SGAA, which provides: (8) The following are employees for the purposes of this Act: (a) a person who is paid to perform or present, or to participate in the performance or presentation of, any music, play, dance, entertainment, sport, display or promotional activity or any similar activity involving the exercise of intellectual, artistic, musical, physical or other personal skills is an employee of the person liable to make the payment; 11 Having regard to s 12(8)(a) of the SGAA and to the then terms of LR 72, the Commissioner formed the view that the Club was, for the purposes of the SGAA, the employer of the jockeys throughout the Relevant Period. That was because it was, in the Commissioner's view, "the person liable to make the payment" under s 12(8)(b) of the SGAA. 12 In the result, on 25 and 31 March 2015, the Commissioner issued notices of assessment to the Club for unpaid superannuation guarantee charge in respect of superannuation guarantee shortfalls during the Relevant Period. On 10 December 2015, the Club lodged with the Commissioner a notice of objection to these assessments. The Commissioner granted to the Club the necessary extension for the filing of that objection but, having so done, disallowed the objection in full on 17 August 2017. On 16 October 2017, the Club filed in this Court a notice of appeal against that objection decision, thereby invoking the original jurisdiction conferred on this Court by s 14ZZ of the Taxation Administration Act 1953 (Cth) (TAA). In such statutory appeals, the applicant, in this case the Club, has the burden of proving that the assessments concerned are excessive: s 14ZZO(b)(i), TAA. 13 It is common ground between the parties that thoroughbred racing is a sport. For reasons which I gave in Racing Queensland Board v Commissioner of Taxation [2019] FCA 509 (RQB v FCT) at [53], it would have been surprising if there had been any conflict on that subject, for it is one of the oldest sports known to mankind. There is also no doubt that riding fees are a payment to a jockey for participating in that sport. 14 The upshot is that the Club seeks to prove the assessments to be excessive by proving that it was not liable to pay the riding fees. The outcome in RQB v FCT is not determinative of the present appeal. That is not just because this case must be decided on the evidence led in it but also, in particular, because, in Queensland, there was no equivalent of LR 72 as it stood throughout the Relevant Period. 15 I turn then to the evidence. Some facts were agreed. There was also a bundle of documents tendered by agreement. The Club also tendered evidence from a number of witnesses. Indeed, it was given leave to re-open its case for the purpose of leading further evidence. The witnesses who gave evidence on behalf of the Club were its current Chief Executive Officer, Mr Heath Courtney, a long-serving previous occupant of that position, Ms Helen Sinclair (now the Executive Officer of another country race club, the Manning Valley Race Club), Mr Scott Kennedy, the General Manager, Industry and Analysis of Racing NSW and Mr Paul Heaton, a chartered accountant and partner in the accountancy practice, Rose & Partners Pty Ltd which prepared and audited the Club's accounts during the Relevant Period. He is now a director and shareholder of the firm. I am well satisfied that each witness gave honest and reliable evidence. Further, Mr Courtney, Ms Sinclair and Mr Kennedy each has lengthy experience in the thoroughbred racing industry and each is well familiar with its practices. Mr Heaton has lengthy experience with the financial affairs of the Club, commencing prior to the Relevant Period and continuing to this day. 16 What emerges from regard to the Thoroughbred Racing Act, the ARR, the LR and the evidence given by Mr Courtney, Ms Sinclair and Mr Kennedy, considered collectively, is that, both before, during and after the Relevant Period, the thoroughbred racing industry in New South Wales was and is highly regulated. All economic relations by and between participants within the racing industry, be those participants Racing NSW, country race clubs such as the Club, horse owners, trainers or jockeys were and are conducted against the background of that regulation. The thoroughbred racing industry also was and is one in which there are longstanding practices in relation to the engagement of jockeys, the conduct of race meetings and in the division of responsibilities as between industry regulators such as Racing Australia and a PRA such as Racing NSW, race clubs such as the Club, owners, trainers and jockeys. These practices, in addition to the regulatory framework mentioned, also both inform and govern all economic relations between participants within the racing industry. 17 The following gives an indication of features of the regulation of the thoroughbred racing industry which are relevant to the present case. 18 The ARR, together with the applicable LR (not being inconsistent with the ARR), apply to all races held under the management and control of a PRA or any registered club (ARR6). ARR 11 required each PRA to keep a register of each club in their jurisdiction. The Club was one such club and was registered with Racing NSW accordingly. 19 ARR 81 provided that no person shall ride in a race held under the ARR and the LR unless he or she held appropriate qualifications granted in accordance with the LR. In order to ride in a race held by a registered club under the ARR and LR, a jockey was obliged to hold a licence issued by Racing NSW. Such a licence could only be issued on application and if the applicant met the eligibility requirements specified in the ARR and LR. In making his or her licence application, a jockey was obliged to acknowledge and agree to be subject to, and bound by, the ARR and the LR. 20 Owners (via horse registration) and trainers were likewise required to be registered by Racing NSW if they wished to participate in any thoroughbred racing event conducted in New South Wales. Once again, in applying for registration, an owner or trainer had to acknowledge and agree to be subject to, and bound by, the ARR and the LR. 21 Thus, throughout the Relevant Period, at and in respect of each race meeting conducted by the Club, owners, trainers, jockeys, the Club itself and Racing NSW were each bound by the ARR and the LR. 22 While it will be necessary, later in these reasons for judgement, to consider the meaning and effect of the ARR and LR, particularly LR 72, on relations inter se in the thoroughbred racing industry, it was a noteworthy feature of this case was that there was no evidence of either a race or race meeting specific contract or wider retainer between the Club and any individual jockey at all, let alone one under which the Club bound itself to pay a riding fee to a jockey. And the same was true of Racing NSW. 23 Having regard to the evidence of custom and practice in the thoroughbred racing industry in New South Wales, particularly from Mr Kennedy and Ms Sinclair, the absence of such evidence was not a coincidence. Racing NSW was (and is) an industry developer, promoter and regulator, not an engager of jockeys. The Club was (and is) a conductor of race meetings, not an engager of jockeys. 24 More particularly, and having regard to Mr Kennedy's evidence in particular (from which the following findings are sourced), the custom and practice which prevailed within the thoroughbred racing industry in New South Wales throughout the Relevant Period was as follows. 25 The process of individual horses contesting any given race commenced with its trainer nominating the horse to run in a particular race at a particular meeting on a particular day. The nomination for a race was a necessary, but preliminary step, and did not necessarily signify intent to contest that race. It was common for trainers to nominate horses for more than one race in a short period of time. A trainer nominated a horse either online or by telephone. Both the online and telephone nomination platforms were hosted by Racing Australia (or a predecessor). The nomination process was a national one and was referred to as the "Single National System". 26 In most instances, trainers decided which horses to nominate for which races. Occasionally trainers would actively consult owners regarding the race to be contested, but the management of a horse's racing programme along with its conditioning for races was usually left to the trainer. Neither Racing NSW nor the individual race clubs such as the Club had any control over the decision as to which horses would be nominated for which races. 27 Nominations opened from the time at which Racing NSW set the programme for a certain race meeting in the Single National System. That could be up to four months prior to the race date but varied depending on where the race was being held. The closing time for nominations likewise also varied as between racing venues. 28 The day after nominations closed, Racing NSW, among other things, assigned the handicaps and published the weight which had been allocated to each horse in a race. For a race being held in Sydney on a Saturday for example, weights would be released by 4pm on the Tuesday prior to the race. 29 Once the weights were released, trainers were then obliged to decide whether to "accept" for the race (again either online or by telephone) to confirm that the horse nominated by them would race that day at that particular weight. Once the acceptances closed, Racing NSW drew up the field for a race, which included determining the final field in saddlecloth or numerical order, which might include an allocation of emergency runners and conducted the barrier draw for the race. 30 Once again, throughout the Relevant Period, the practice in the thoroughbred racing industry in New South Wales was that jockeys were engaged by the trainer, either directly or through their agent, to ride a horse in a race. These engagements were often verbal and usually not evidenced in writing at all, although some trainer's stables emailed riders or their agents to confirm bookings. Many jockeys had their own agent, who approached trainers in the hope of obtaining for their client jockey, a ride on a particular horse. Jockey's agents were also licensed persons. Neither Racing NSW nor, as confirmed by Ms Sinclair's evidence, the individual race clubs such as the Club had any involvement in the making of agreements between trainer and jockey. 31 Jockeys often had a pre-existing relationship with a particular trainer and were selected to ride a horse on the strength of that relationship. Some jockeys were what were termed "stable riders". Stable riders were those on a retainer who rode either exclusively for that trainer's stable or who only took outside rides when not required by the trainer. In other cases, a jockey might ride track work for a particular horse or horses in the hope of being engaged by its trainer to ride that horse or others in upcoming races. 32 Except for emergency runners or where permission was granted by the stewards, trainers had until noon on the day of acceptances to declare the jockey to ride their horse in a race. In the majority of cases trainers declared their rider at the time they accepted for a race (which was sometimes well in advance of the closing time for acceptances). Only once a trainer had formally declared a rider (via the Single National System), would Racing NSW know which jockey would be riding which horse in any given race. 33 Further, throughout the Relevant Period, neither Racing NSW nor the individual race clubs such as the Club had any involvement in, or control over, the decision as to which riders would be declared to ride a horse in a particular race. 34 In general, throughout the Relevant Period, licensed jockeys in New South Wales received a standard riding fee for each ride. The amount of that fee was determined from time to time by Racing NSW pursuant to ARR 90, which provides: In the absence of a special agreement registered with the Principal Racing Authority the fees of jockeys and riders shall be prescribed by the Principal Racing Authority. This amount so determined was not inclusive of a 9.5% superannuation payment. After the Relevant Period this has come to be paid separately into a jockey's fund of choice by Racing NSW. 35 The riding fee was payable to a jockey once he or she had been declared to ride a horse for a race. Except in the case of runners declared as emergencies at acceptance time, the riding fee remained payable even if the horse were subsequently scratched. However, if a jockey were able to secure a ride in the race concerned on another runner following the scratching of the horse they were originally booked to ride, the ride fee then became payable for that horse only. This typically occurred when an emergency runner obtained a start in the race of if another jockey became unavailable to ride. 36 Historically, prior to 1999, the practice within the thoroughbred racing industry within New South Wales was that riding fees were paid by trainers on behalf of owners at the race meeting. The practice was that trainers would pay for the ride fees, nomination and acceptance fees to the race club (these monies being advanced by or recouped from owners). The jockeys would be paid their ride fees at the end of the day's racing. The version of ARR which was current until 30 June 2000 required (at ARR91) the payment of riding fees prior to the race, with prize money being deducted from any owner's winnings. What I infer from Mr Kennedy's evidence as to the historic practice is that ARR91 was regarded within the industry as being satisfied by the payment by the trainer on behalf of the owner of the ride fee to the Club before the ride, which received and held it on behalf of the jockey, with the Club paying the fee out at the end of the day's racing. Presumably this was done so a trusted third party retained the fee, ensuring payment by the owner/trainer and performance by the jockey. 37 Within the thoroughbred racing industry within New South Wales, both before, during and after the Relevant Period, "returns to owners" was (and is) an umbrella term used in the industry to refer to amounts paid by race clubs or, as the case came as related below to be, Racing NSW to and on behalf of owners. 38 Returns to owners now include the following: prizemoney and Breeder Owner Bonus Scheme Bonuses (known in the industry as "BOBS" - an incentive scheme introduced by Racing NSW to benefit the New South Wales Breeding Industry, trainers and owners); riding fees and superannuation paid to jockeys; jockeys' insurance; and appearance fees (being the fee paid to each horse that starts in a race in New South Wales - excluding picnic races - but which does not receive prizemoney). 39 Commencing in the late 1990s (and continuing to this day), Racing NSW developed and implemented policies aimed at maximising returns to owners as a means of improving the viability of a racehorse owner participating in thoroughbred racing. Racing NSW regarded the possibility of reasonable returns to owners as a means of broadening the range of persons who could participate in the industry via the ownership of a thoroughbred racehorse and as complementing the social and intrinsic benefits of being involved in racing a thoroughbred. Representing as it did the extent to which owners were collectively compensated for the expense of acquiring and breeding horses to race and the costs of their training, spelling, veterinary care and racing, Racing NSW regarded (and continues to regard) returns to owners as an important measure of the health of the thoroughbred racing industry in New South Wales. 40 As part of its industry regulation role and to ensure consistency in the industry, Racing NSW provided each race club with a "Chart of Accounts". This was a list of codes to be entered into a club's MYOB accounts. Ms Sinclair prepared the Club's MYOB records in accordance with this "Chart of Accounts". According to her, riding fees were classified in the Chart of Accounts as "Race Meeting Expenditure" under the heading "Returns to Owners". This was another manifestation of Racing NSW's "returns to owners" policy being implemented. This treatment of riding fees was consistent with Mr Kennedy's evidence to the effect that riding fees were charged to race clubs, and that the charges for riding fees related to LR 72. During the Relevant Period, riding fees are categorised as wages in the Club's financial reports. For reasons given below, the correctness of that categorisation is, to say the least, doubtful. In any event, the Commissioner did not submit that the categorisation was determinative of the status of the jockeys. 41 I infer from Mr Kennedy's evidence that, by 1999, as a matter of policy, Racing NSW regarded the reduction of direct costs to owners as one way of maximising returns to owners. I further so infer, that, responding to this policy, race clubs (including the Club) throughout New South Wales ceased to charge owners nomination and acceptance fees for most races and also commenced paying on behalf of owners the riding fees payable to jockeys. The existence of this policy response by race clubs is evident from advice in these terms or to this effect in New South Wales Racing Calendars for the months of May, June and July 2000, "Riding fees for starters paid by clubs on behalf of connections". Within the New South Wales thoroughbred racing industry, "connections" is an industry specific term generally understood to mean owners. 42 The Racing Calendar is an industry publication, published to and for the New South Wales thoroughbred industry by Racing NSW. It has statutory recognition as a means of notification to the industry at large, by the Thoroughbred Racing Act (s 42(1)(e)), in relation to rights of appeal against decisions of a racing authority by a person aggrieved. It is a means by which changes in rules of racing and in policies and practices applicable to the industry are notified to the industry at large. The Racing Calendar is thus a means by which changes in the regulation of the industry are notified to the industry at large. On the evidence, it is inherently likely, and I find, that, on and from the implementation of the returns to owners maximisation policy and the related notification in the Racing Calendars, participants in the New South Wales thoroughbred industry, including owners, trainers, race clubs (including the Club) and jockeys conducted their economic relations, including the engaging of jockeys and the related riding of racehorses by jockeys on the basis that "Riding fees for starters paid by clubs on behalf of connections". In other words, from 1999 and prior to 1 July 2000, the practice of the New South Wales thoroughbred industry, inferentially mutually understood at the time when a jockey was engaged as described above, was that a race club paid riding fees on behalf of owners (who engaged jockeys via their trainers). Thus, this feature of the implementation of the returns to owners' maximisation policy did not affect the industry practice as to who engaged and was responsible for the payment of jockeys. To the contrary, by providing that a race club paid "on behalf of connections", it was predicated upon the historic practice of the thoroughbred racing industry. 43 This industry policy and this policy response were in place in the New South Wales thoroughbred racing industry prior to the commencement of the goods and services tax (GST) regime on 1 July 2000. 44 On 1 July 2000, Racing NSW, in the course of its regulation of the New South Wales thoroughbred racing industry, introduced what is known as the Stakes Payment System (SPS). SPS is a centralised system, operated and managed by Racing NSW, for the processing of amounts paid to and received from the various stakeholders in the racing industry. The coincidence of the commencement of the GST regime and the SPS was not happenstance. Mr Kennedy deposed, and I find, that the introduction of the SPS was responsive to the commencement of the GST regime. SPS was designed to streamline the flow of funds throughout the New South Wales thoroughbred racing industry. Inferentially, "streamline" embraced the reduction of the administrative burden which would otherwise fall on Race clubs (including the Club), trainers and jockeys within the industry in relation to compliance with the GST regime. 45 In the operation of the SPS, Racing NSW maintains a central account, known as the 'Stakes Payment Account'. In summary, the flow of funds through that account under the SPS was during the Relevant Period (and is) as follows: Stakeholder Description Race Clubs Racing NSW debits the Stakes Payment account of race clubs for prizemoney, insurance, the cost of providing stewards, ride fee payments to jockeys whilst also crediting Clubs in respect of TAB Distribution, prizemoney support from Racing NSW, scratching fees and nomination fees. Owners The Stakes Payment accounts of owners are credited for their share of any prizemoney or BOBS bonuses won and appearance fees. Trainers Trainers are credited through their Stakes Payments accounts for their share of any prizemoney or BOBS bonuses won in respect of horses trained. The accounts of trainers are debited for public liability insurance, workers compensation insurance, non-acceptance fees, scratching fees and barrier trials. Jockeys Jockeys are credited for their ride fees, their share of any prizemoney or BOBS bonuses won from riding in races. They are also credited for barrier trial fees and riding fees. Since 1 July 2014, the relevant percentage representing compulsory superannuation is also paid into the jockey's nominated superannuation account in relation to barrier trials and riding fees. If applicable, jockeys are also debited for membership payments to the NSW Jockeys Association. Stablehands Stablehands are credited prizemoney based on returns that are provided from their employing trainer.