1. The matter was heard on 13 July 2017. The Tribunal had before it the documents provide by the respondent on which its decision was based (the T Documents), the submissions and statements of facts and contentions of the parties. The applicant was represented by Mr Bill Piper, solicitor. The respondent was represented by Mr Marcus Hassall of counsel instructed by the ACT Government Solicitor.
2. The applicant and respondent called evidence, made submissions and responded to questions of the Tribunal.
3. At the conclusion of the hearing the Tribunal reserved its decision and indicated it would provide written reasons. These are those reasons.

1. The applicant is a 61 year old woman. She and her former husband jointly acquired a property in Hughes in the ACT (the property) in 1977. An extension was made to the property in 1992 to extend it to five bedrooms. The applicant and her husband separated and by transfer in 2000 she became the sole owner.
2. The applicant moved to Darwin in 2004 leaving her three adult children residing in the property, the eldest of whom Michael was then aged 23. She continued to reside in Darwin until recently. She continued to return to the home at least every two years. She has now returned to live in the home.
3. The applicant continued to pay the mortgage on the property and to pay rates. However at some time in the period August 2010 and October 2014 she fell behind in the payment of rates.
4. From the time she relocated to Darwin in 2004 until 2009 her children resided in the home and the applicant did not ask them to pay rent. By 2009 Michael was the last one there and in employment. The applicant and he agreed that he would start paying what they characterised as rent. Initially this was $600.00 per fortnight and from September 2010 increased to $1,000.00 per fortnight.
5. By October 2014 the applicant owed an accumulated debt of $6345.32 in outstanding rates.[1]
6. On 28 October 2014 the applicant sought the assistance of a financial counsellor with Anglicare NT in Darwin to prepare and lodge on her behalf a 'Hardship Arrangement Request' requesting payment of the outstanding rates debt by instalments.[2] The supporting documents for the request included a spreadsheet 'My budget' document which showed as an item of income 'rent' of $1000 per fortnight.[3]
7. On 29 October 2014 by email the respondent sought clarification from the counsellor as to the rental status of the property and indicated the applicant's obligation to notify the respondent of its rental status.[4]
8. In response on 4 December 2014 the applicant emailed to the respondent as an attachment a completed 'Notification of rental status of a residential property' form disclosing the property had been rented since 11 June 2009.[5]
9. On 5 December 2014 the respondent assessed the applicant as liable to pay land tax for the period 1 July 2009 to 31 December 2014 in the total sum of $31,239.90 plus interest of $11,026.22. The respondent issued a total of 22 assessment notices covering that period by posting them to the property as the current postal address. The applicant says she did not receive these notices.
10. On 19 March 2015 by email the respondent notified the total arrears of rates and land tax were then $49,651.15. The respondent also requested an up-to-date postal address.[6]
11. By email on 25 March 2015 the applicant provided a postal address in Casuarina, Darwin.[7]
12. On 15 April 2015 the respondent posted a land tax assessment notice to the applicant at this NT address showing a total amount payable of $46,198.43. On the reverse of that notice was a boxed section 'Objection Rights to Land Tax Assessment' which provided advice as to the process for lodging an objection to the assessment.[8]
13. In April 2015 the applicant's offer to make payment of $500.00 per fortnight to reduce the debt was accepted by the respondent for an initial period of six months. In November 2015 the respondent advised that such payments were insufficient given that a minimum of $1,100.00 per month was need to prevent the debt rising. The respondent requested the applicant to increase her repayments to $1,500.00 per fortnight.[9]
14. On 10 and 24 February 2016 the applicant was forwarded letters of demand, the latter of which advised a course of action including seeking a court order to sell the property.[10]
15. In March 2016 whilst visiting Canberra the applicant contacted the respondent by phone as to her inability to clear the debt. She says she was advised at this time as to her right to make an objection to the land tax assessments and that such objection could be made out of time. She says this was the first time she was aware of this right.[11]
16. On her return to Darwin the applicant prepared a late objection to land tax assessment and forwarded this to the respondent by email on 23 May 2016.[12] On 25 May 2016 the respondent advised the applicant she was required to provide a statement setting out fully the reasons why she did not lodge the objection in time.[13] By email of 10 June 2016 the applicant provided a declaration sworn by her on 9 June 2016 as to her reasons for delay.[14]
17. On 9 September 2016 the respondent declined to permit the applicant to lodge this objection out of time, under section 103 of the Tax Act.[15]
18. On 3 November 2016 the applicant lodged a request for internal consideration of the respondent's decision of 9 September 2016.[16]
19. On 14 March 2017 the respondent affirmed the decision rejecting the applicant's late objection.[17]
20. On 12 April the applicant applied to the ACT Civil and Administrative Tribunal (the ACAT) for review of the reviewable decision.

1. By virtue of Part 2 of the Land Tax Act 2004 (the Land Tax Act) land tax is payable on rateable land that is "rented residential land".[18] The relevant definitions for 'rent' and 'tenancy agreement' in section 7 provide:

rent means valuable consideration for which a tenant is liable under a tenancy agreement in relation to the tenancy or a period of the tenancy.

_(a) means an agreement under which a person grants to someone else for value a right of occupation of a parcel of land for use as a residence - _

(i) whether the right of occupation is exclusive or not; and

(ii) whether the agreement is express or implied; and

(iii) whether the agreement is in writing, is oral, or is partly in writing and partly oral; but

(b) does not include an agreement giving a right of occupation only as a boarder or lodger.[19]

The Land Tax Act is a 'tax law' for the purposes of the Tax Act.[20] The respondent has power under the Tax Act to make an assessment of the land tax liability of a taxpayer.[21]

1. A land tax assessment notice may be given to a taxpayer, inter alia:

_(1) A document authorised or required to be served on or given to a person by the commissioner for a tax law may be served on or given to the person - _

(b) by leaving it at the last address of the person known to the commissioner (including, for a corporation, the registered address or a business address of the corporation); or

(c) by post addressed to the person at the last address of the person known to the commissioner (including, for a corporation, the registered address or a business address of the corporation); or

(d) by a means indicated by the person as being an available means of service (for example, by fax or by delivering it, addressed to the person, to the facilities of a document exchange); or Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(e) by any means provided for the service of the document by another Act or law.[22]

1. A taxpayer may lodge a written objection with the respondent in relation to a land tax assessment.[23] An objection must be lodged not later than 60 days after the date that the notice of assessment is 'given to the taxpayer'.[24]
2. The respondent has discretion to permit an objection to be lodged out of time:
   1. Objections lodged out of time

(1) The commissioner may permit a person to lodge an objection after the 60 day period.

(2) The person seeking to lodge the objection must state fully and in detail, in writing, the circumstances concerning and the reasons for the failure to lodge the objection within the 60 day period.

(3) The commissioner may grant permission unconditionally or subject to conditions or may refuse permission.[25]

1. The Tax Act does not set out criteria to be considered in deciding whether or not to exercise its discretion under section 103. However, it was common ground between the parties that the decision of Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (Hunter Valley Developments)[26] provided a useful though non-exhaustive set of principles to be considered in reaching such decisions.

1. The applicant's evidence was that between 2004-2009 rates were paid on the property but she was confused about who paid them, maybe her son Michael. In 2009 he started giving her payments to help her out financially.[27] She said he explained it would also be beneficial to him to show a good rental record if he ever wanted to move out of home. Initially he made regular payments of $300.00 per week and then this increased to $500.00 per week. Her financial position improved in August 2011 and she started to return some of the money to him, about $200.00 per fortnight. She continued this return of money up till about October 2013.[28]
2. In 2014 she became aware of the arrears of rates and attended Anglicare who assisted her in completing a hardship application. She told them about the payments from Michael and they recorded them as rent. Up until then she had never understood the property was rented. She had not disclosed the payments as rental income in her tax returns, not claimed any expenses as deductions. She then did this for one year only, she thinks in the next tax year 2015.
3. The applicant was asked questions in re-examination about her appearance as a victim witness before the Royal Commission into Institutional Responses to Child Sexual Abuse (the Royal Commission). These questions were allowed as they went to her capacity to focus on her financial affairs. She initially gave evidence before the Commission in private session in early 2014 and then in public hearings in Darwin on 22 September 2014. She said these events were huge in her life not just on those days but in the months leading up to them and in the effects that remained well after she gave her evidence.
4. The applicant's son Michael gave evidence and said he was 23 when his mother moved to Darwin. He said he and his siblings paid bills for the property as they came in. He could not recall whether this included rates accounts. He said his mother received mail at the property. He did not open the mail addressed to her but kept it in a shoebox. His mother would either see those letters on her regular visits or else they were thrown out. He did not forward them to her in Darwin.
5. In 2009 he formed the view that the arrangements were not compatible with his mother's level of financial obligation as he was now in full time employment in the public service. He offered to help out and described the payments as "rent". He said this was also so he could rely on his bank records for a rental history or to get a loan in the future. He confirmed the payments were initially $300.00 per week and in September 2010 that increased to $500.00 per week. When his mother started to return $100.00 per week to him he still kept his payments at $500.00.
6. He said that for a number of years "mum and dad's room" which was the main bedroom was kept aside as his mother's room. She had her bed there, winter clothes and boxes of stuff. In more recent years she changed over to his sister's room. After his siblings left home he said he started to have other people living in the house on an arrangement he described as "sub-letting". This was for one room in the house and over the period May 2013 and January 2017 a succession of two single people sublet this one room. His records show that he received $33,472.00 in payments from them over this period.[29]

1. The respondent's objections officer Dennis Duermeier who handled the decision under review gave evidence. His evidence was that the land tax assessment notices which were sent to the applicant's postal address on 5 December 2014 would have contained on the reverse of each notice a boxed panel 'Objection Rights to Land Tax Assessment'. This notice specified a 60 day period for objections after the notice of assessment is given to the taxpayer. Mr Duermeier's evidence about the calculation of that period was that two days grace was given after the notice was posted for local addresses and seven days grace allowed for interstate addresses.
2. Copies of the original notices sent could not be located but duplicates were provided in the respondent's evidence.[30] These notices were not also emailed to the applicant as the legislation specifies only certain methods in section 129(1) of the Tax Act.
3. The applicant was later sent an email on 19 March 2015 which included as an attachment the most recent notice showing the outstanding land tax balance. In response to the request made in the email that the applicant update her postal address an email was received by the respondent on 25 March advising of her NT address. The records were updated on 26 March 2015. Future notices were forwarded to that address.
4. Each of the parties provided written and oral contentions framed in terms of Wilcox J's Hunter Valley Developments principles.

1. The applicant says the following with respect to the Hunter Valley Developments principles.

1. The applicant contends that she can show an acceptable explanation of the delay. She says this should be seen in the context of the length of the delay which she says was 'not long'. It was agreed between the parties that the applicant submitted a valid objection on 23 May 2016. The applicant says the first letter of 5 December 2014 enclosing land tax assessments did not come to her attention. She only became aware of her liability by email on 19 March 2015 but was not then alerted to her right to objection. She says she was first alerted to those rights in her telephone conversation with the respondent on 21 March 2016. She says on the best reading the period of delay is therefore slightly more than 60 days, or on the worst some 18 months from 5 December 2014. She urged the Tribunal to accept the former as the period of delay. She explains her delay on the basis of the weak notice she received of her liability and the delayed notice of her capacity to object. She also urged the Tribunal to take account of her background of personal hardship and distress given her involvement with the Royal Commission during this period.

1. The applicant concedes that she did not take steps to object to the assessment until 23 May 2016. However she did engage with the respondent from 19 March 2015 onwards by entering into a payment program to address the arrears.[31]

1. Mr Piper elegantly characterised the relative degree of prejudice of the applicant and the respondent as between an elephant and a mouse. The applicant in her submission has been incorrectly assessed for a liability now standing at $55,503.06 with the risk of losing her house for non-payment. The respondent has not articulated any evidence of the prejudice it has suffered other than asserting the system for the collection of revenue functions less smoothly if such objections out of time are allowed.[32]

1. The applicant contends that there is a live issue as to whether she is liable to pay land tax. The key to this argument is the meaning of the word 'liable' in section 7 of the Land Tax Act in the definition of 'rent', namely - 'rent' means "valuable consideration for which a tenant is liable under a tenancy agreement." The applicant contends the voluntary payments made by her son were made as a family member and do not have the necessary quality of liability to constitute rent under the Act. The applicant distinguishes the decision of the tribunal in Johnson & Davenport v Commissioner for ACT Revenue[33] (Johnson) where Senior Member Lunney found the meaning of 'liability' in section 8 of the Act was not confined necessarily to a legal liability but could include an agreed or assumed responsibility. That case on the applicant's argument is confined to an obligation, voluntary or otherwise, for an occupant to pay land tax not an obligation to pay rent.

Considerations of fairness between the applicant and other persons

1. The applicant contends there is no other person of which the applicant is aware that may be affected by the decision.[34]
2. In summary the applicant says the period of delay in her lodging her objection should take account of when the assessments of land tax first came to her attention and when she first became aware of her objection rights. She says the assessment issued to her by post by the respondent on the 5 December 2014[35] did not come to her attention. She says the first time the assessments came to her attention was by email of the 19 March 2015.[36] She further says she only became aware of her objection rights in March 2016.[37] In the agreed chronology of events this date was fixed at 21 March.[38] The objection was lodged on 23 May 2016.

1. The respondent says the following with respect to the H_unter Valley Developments_ principles.

1. The respondent contends that it has a limited number of statutory means by which to bring the existence of land tax liability to the attention of taxpayers. It followed one of these means in forwarding assessment notices to the applicant's recorded postal address on 5 December 2014. It conceded that consistent with the evidence of Mr Zimmermann that he "didn't open mum's mail" and rarely if ever forwarded it to her that these notices most likely did not come to her attention. The respondent also conceded that though the email of 19 March 2015 alerted the applicant to the land tax liability outstanding there was nothing said about her right to object. However the respondent says that the Tribunal can be sure that at least from the notice sent to her at her NT address on 15 April 2015 she had received a land tax assessment notice that clearly brought these objection rights to her attention. The respondent says using this as the last possible date of notice most favourable to the applicant the period of delay till the 23 May 2016 is some 13 months. The respondent says that this is an unacceptable delay given that it had done all in its power to alert the taxpayer to her objection rights.

1. The respondent contends that the failure by the applicant to take any action to notify the Commissioner of her intention to object to the assessment prior to May 2016 militates against the exercise of the discretion under s103 of the Tax Act.[39]

1. The respondent contends that the fact that the Commissioner may suffer minimal or no prejudice is by itself not a sufficient basis to justify the granting of an extension of time to lodge an objection.[40]

1. The respondent agrees that the nub of the substantive argument as to the applicant's liability to pay land tax sits squarely with whether her son was 'liable' to pay rent. The respondent contends that the merits with respect to this matter fall squarely in the respondent's favour such as to rob the applicant of an arguable case. Mr Michael Zimmermann's evidence was that he entered into arrangements which he classed as 'sub-letting' to various people over the period May 2013 and January 2017 for which he received $33,472.00 in payments. The respondent contends this gives further weight to the argument that his own payments to his mother should be characterised as rent. The respondents urged the Tribunal to follow the decision of Senior Member Lunney in Johnson with respect to the section 8(1) interpretation of 'liability' that the son's liability can include a non-legal voluntary obligation.[41]

Considerations of fairness between the applicant and other persons

1. The respondent contends that there are likely to be other taxpayers who fail to keep their postal addresses with the Commissioner up to date and/or fail to take note of their objection rights. To treat these as acceptable explanations for delay in lodging an objection would undermine the purpose and efficacy of the scheme under the Land Tax Act.[42]

1. The matter at issue is whether the Tribunal standing in the shoes of the respondent should pursuant to section 103 of the Tax Act exercise its discretion to permit the applicant to lodge an objection out of time.
2. The Tribunal has regard to the principles set out by Wilcox J in Hunter Valley Developments to guide the exercise of that discretion. The Tribunal is mindful of the caution counseled by the Full Court of the Federal Court of Australia in Zizza v Commissioner of Taxation [1999] FCA 848 (Zizza)[43] that the application of the Hunter Valley Developments principles are as Wilcox J himself said are intended "to guide, not in any exhaustive manner" and that it 'would be an error to regard the summary as complete, or to treat each of the principles it contains as necessarily applicable to any particular application for extension of time, especially an application under different legislation'.[44] The Tribunal uses the principles with this caution and draws on them to frame three questions:
   • (a) Can the applicant show an acceptable explanation of the delay?
   • (b) Would the respondent be prejudiced by granting the applicant an extension of time?
   • (c) Do the merits of the substantive application give rise to an arguable case?

Can the applicant show an acceptable explanation of the delay?

1. Being able to show an acceptable explanation of the delay is, as Wilcox J assets a pre-condition to the exercise of discretion in the applicant's favour.[45] As the applicant pointed out the length of the delay is a relevant factor in this consideration.[46] There was concurrence between the parties that a valid objection was submitted on 23 May 2016.
2. The Tribunal does not accept the applicant's contention that the period of delay should be calculated as from 21 March 2016 so as to equate to a delay of slightly more than 60 days. Nor does it accept the respondent's contention that the period should be calculated from 5 December 2014 when notices of assessment were first forwarded to the applicant's recorded postal address. The respondent had been alerted to the potential of a land tax liability for the property through a series of emails in October and December 2014. It was therefore open to the respondent to also alert the applicant of her assessed liability by that means of service which reasonably falls under s129(1)(d) of the Tax Act. Indeed it was that very method that was used by the respondent's debt recovery unit on 19 March 2015 to alert her to the arrears and accumulating interest.[47]
3. The respondent is correct in asserting that it can reasonably do no more than advise taxpayers of their objection rights. This advice clearly came to the applicant in the assessment notice sent to her at her NT address on 15 April 2015. The applicant's evidence is that she focused on the amount outstanding of more than $46,000.00 on the face of that notice and did not read the reverse. The respondent says it cannot be held responsible for her failure to observe that the rear of the notice contained a boxed section providing advice as to her objection rights. The Tribunal accepts the respondent's contention in this case given the circumstances above. The period of delay is therefore calculated as from 15 April 2015 to 23 May 2016 being a period of some 13 months.
4. Does the applicant have an acceptable explanation for this period of delay? She was not ignoring her obligation as to the assessment in this period. She did actively engage with the respondent by entering into a payment program to address the arrears and endeavouring to adjust those payments to stem the interest accruing. The latter negotiations were her focus at that time. The Tribunal accepts that it was not until her telephone conversation with the respondent on 21 March 2016 that she changed her focus to the issue of how to object to the respondent's decision. Important to the outcome of this matter, the applicant gave evidence to the Tribunal about an additional factor causing her delay in objecting - she attended twice before the Royal Commission, lastly giving oral evidence in public session in late 2014 and that these appearances adversely affected her in the months prior and after she gave her evidence. It is common knowledge that persons appearing before the Royal Commission are vulnerable to distress, sometimes for some time before and afterwards. On this basis the Tribunal accepts that the applicant's circumstances were exceptional and reaches the view that the applicant has disclosed an adequate explanation of the delay of 13 months.

Would the respondent be prejudiced by granting the applicant an extension of time delay?

1. The Tribunal accepts that the relative degree of prejudice faced by the applicant as against the respondent is disproportionately in her favour given that she is facing an assessed liability of $55,503.06 (as at 9 July 2017) if an extension to object is not granted. There is prejudice to the respondent in that its system for the collection of revenue functions less smoothly if such extensions for objections are allowed. But as the full court of the Federal Court in Zizza points out this does not have the same public policy implications as an extension of time in the nature of the administrative decisions dealt with in the relevant legislation in Hunter Valley Developments.[48] The Tribunal reaches the view that the respondent would not be unfairly prejudiced by granting the applicant an extension of time.

Do the merits of the substantive application give rise to an arguable case?

1. The argument the applicant would make if the matter proceeded to a review or a hearing on the substantive issue gives rise to an arguable case. There is an arguable issue about whether her son was liable to make the payments which he did make such as to constitute them as 'rent' under section 7 of the Land Tax Act. The Tribunal considers this is an argument with prima facie merit and as such should reasonably be left to a review on the substantive issues.

1. The Tribunal's view is that the appeal against the decision under review to refuse to accept the applicant's late objection to the land tax assessments issued 5 December 2014 pursuant to section 103 of the Tax Act should be allowed.
2. The Tribunal finds that the applicant's objection of 23 May 2016 should be considered by the respondent on its merits.

1. The Tribunal sets aside the decision of the Commissioner and in its place grants the applicant permission to lodge an objection out of time to the land tax assessments issued on 5 December 2014. The applicant's objection of 23 May 2016 and subsequent information provided should form that objection.

[1] Respondent's statement of facts and contentions dated 28 June 2017 at [24]

[2] Transcript of Proceedings 13 July 2017 page 78

[3] Transcript of Proceedings 13 July 2017 page 80

[4] Transcript of Proceedings 13 July 2017 page 83

[5] Transcript of Proceedings 13 July 2017 page 85-86

[6] Transcript of Proceedings 13 July 2017 page 85

[7] Transcript of Proceedings 13 July 2017 page 104

[9] Transcript of Proceedings 13 July 2017 page 104

[10] Transcript of Proceedings 13 July 2017 pages 107 and 110

[11] Applicant's statement dated 8 June 2017 at [29]

[12] Transcript of Proceedings 13 July 2017 pages 112-114

[13] Transcript of Proceedings 13 July 2017 page 115

[14] Transcript of Proceedings 13 July 2017 pages 131-134

[15] Transcript of Proceedings 13 July 2017 pages 138-143

[16] Transcript of Proceedings 13 July 2017 pages 145-150

[17] Transcript of Proceedings 13 July 2017 pages 9-17

[18] Section 9(1) of the Land Tax Act

[19] Section 7 of the Land Tax Act

[26] Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

[27] Applicant's statement dated 8 June 2017 at [10]

[28] Applicant's statement dated 8 June 2017 at [13]

[29] Statement of Michael Zimmermann dated 13 July 2017 at [5]

[30] Statement of Dennis Duermeier dated 28 June 2017 at [18]

[31] Applicant's statement of facts and contentions dated 8 June 2017 at [17(B)(a)]

[32] Applicant's statement of facts and contentions dated 8 June 2017 at [17(C)(c)]

[33] Johnson & Davenport v Commissioner for ACT Revenue [2016] ACAT 146 at [14]

[34] Applicant's statement of facts and contentions dated 8 June 2017 at [17(E)(a)]

[35] Transcript of Proceedings 13 July 2017 page 87

[36] Transcript of Proceedings 13 July 2017 page 85

[37] Applicant's statement dated 8 June 2017 at [29]

[39] Respondent's statement of facts and contentions dated 28 June 2017 at [61]

[40] Respondent's statement of facts and contentions dated 28 June 2017 at [62]

[41] Respondent's statement of facts and contentions dated 28 June 2017 at [64]

[42] Respondent's statement of facts and contentions dated 28 June 2017 at [63], [65]

[43] Zizza v Commissioner of Taxation [1999] FCA 848

[45] Hunter Valley Developments at [348]

[46] Applicant's statement of facts and contentions dated 8 June 2017 at [18]

[47] Transcript of proceedings 13 July 2017 page 85