BUTLER LAND COMPANY PTY LTD and COMMISSIONER OF STATE REVENUE - [2012] WASAT 33

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: DEVELOPMENT & RESOURCES

ACT: TAXATION ADMINISTRATION ACT 2003 (WA)

CITATION: BUTLER LAND COMPANY PTY LTD and COMMISSIONER OF STATE REVENUE [2012] WASAT 33

MEMBER: JUDGE D R PARRY (DEPUTY PRESIDENT)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 27 FEBRUARY 2012

FILE NO/S: DR 167 of 2011

BETWEEN: BUTLER LAND COMPANY PTY LTD
Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent

Catchwords:

Taxation - Land tax - Reassessment of liability for land tax - Whether original assessments were based on a particular interpretation of the applicable law - Whether applicable law includes joint venture agreement - Whether original assessments were based on a particular practice of the respondent that was generally applied to assessments of that kind - Whether particular practice generally applied to assessments of that kind includes series of assessments in relation to land the subject of particular joint venture - Whether reassessment is contrary to the respondent's published practice - Principle of interpretation of practice or policy consistently with legislation under which practice or policy is made - Whether reassessment is inequitable or unconscionable

Legislation:

Land Tax Assessment Act 2002 (WA), s 5, s 31, s 31(1)
Taxation Administration Act 2003 (WA), s 3(1), s 4, s 11, s 16(2), s 16(5), s 34, s 37(2), s 40(1), s 92, s 94, s 95, s 95(1), s 95(4), s 97(1), s 98, s 99, s 100, s 101, s 127, Pt 8

Result:

Decision of respondent to disallow applicant's objection to reassessments of land tax for the periods 2005/2006, 2006/2007, 2007/2008 and 2008/2009 made on 4 August 2010 and assessment of land tax for 2009/2010 issued on 4 August 2010 in relation to the applicant's land under client ID 2114978 is affirmed

Category: B

Representation:

Counsel:

Applicant: Mr AWT Sceales
Respondent: Ms RC Panetta

Solicitors:

Applicant: Sceales & Co
Respondent: State Solicitor's Office

Case(s) referred to in decision(s):

Cumings v Birkhead Corporation [1971] 2 All ER 881
R v Torquay Licensing Justices; Ex parte Brockman [1951] 2 All ER 656
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The Commissioner of State Revenue erroneously granted a taxpayer a 50% exemption in respect of land tax over four assessment years owing to his officer's misinterpretation of a joint venture agreement between the taxpayer and a State authority. When the error was discovered and confirmed during a Compliance Division investigation, the Commissioner of State Revenue made reassessments for each assessment year and issued an assessment for the next assessment year, on the basis that the taxpayer did not enjoy any exemption. The taxpayer objected to the reassessments and the assessment and then sought review by the Tribunal of the disallowance of its objection. The amount of tax in issue was $1,825,559.54.
The key issues for determination were:
•Whether the Commissioner of State Revenue is precluded by s 16(5) of the Taxation Administration Act 2003 (WA) from making the reassessments, because the assessments which included a 50% discount were based on 'a particular interpretation of the applicable law' or 'a particular practice of the Commissioner that was generally applied to assessments of that kind'; and
•If the Commissioner of State Revenue is not precluded from making the reassessments, whether the discretion to make reassessments under s 16(2) of the Taxation Administration Act 2003 should be exercised against making the reassessments, because the reassessments are contrary to a published practice of the Commissioner, or because the reassessments are inequitable or unconscionable.
The Tribunal determined that:
•the Commissioner is not precluded from making the reassessments;
•the reassessments are not contrary to the published practice;
•the Tribunal would exercise the discretion to make the reassessments in the same manner as the Commissioner; and
•the decision to make the reassessments and to issue the assessment is the correct and preferable decision.
The Tribunal held, in particular, that the expression 'the applicable law' in s 16(5) of the Taxation Administration Act 2003 does not extend to a joint venture agreement and that the expression 'generally applied to assessments of that kind' in the same section does not include assessments over several years in relation to the same land, but rather refers to a broader category of assessments and, relevantly, to assessments of land tax for land the subject of a joint venture.
The Tribunal also held that the terms 'investigation' and 'investigator' in the Commissioner's published practice are to be interpreted consistently with the use of those terms in the Taxation Administration Act 2003, with the consequence that the reassessments are not contrary to that practice.
In relation to the taxpayer's arguments that the reassessments are inequitable or unconscionable, the Tribunal determined that the assessments are consistent with equity between taxpayers and the proper administration of taxation laws, and that it is for the Parliament to decide whether there should be an exemption or partial exemption from land tax for private land forming part of a joint venture for the provision of affordable housing.

Introduction

Under s 5 of Land Tax Assessment Act 2002 (WA) (LTA Act), land tax is payable for each financial year for all land in the State except land that is exempt for an assessment year under that Act. Subject to an exception that is not relevant, under s 31(1) of the LTA Act, land owned by, or vested in, the Crown, an agency or instrumentality of the Crown, or another public authority, is exempt from land tax for any assessment year. The Commissioner of State Revenue (Commissioner) issued land tax assessments to Butler Land Company Pty Ltd (Butler) for land owned by Butler, referred to under the Commissioner's client ID 2114978 (Butler Land), in relation to the assessment periods 2005/2006 and 2006/2007 (on 20 December 2006), 2007/2008 (on 10 January 2008), and 2008/2009 (on 1 July 2009). In each of these land tax assessments, the Commissioner discounted the land tax payable by Butler by 50% on the Commissioner's incorrect understanding that the land was owned jointly by Butler and the State Housing Commission of Western Australia (SHC), and was therefore subject to a 50% exemption from land tax under s 31(1) of the LTA Act. In fact, the land the subject of the assessments was, at all relevant times, wholly owned by Butler.
The Butler Land formed part of an area the subject of a joint venture agreement entered into on 26 October 2000 by Butler, Ocean Springs Pty Ltd (Ocean Springs) and the SHC to develop a residential estate described as the 'Butler Estate' (Joint Venture Agreement). Each of the parties to the Joint Venture Agreement contributed land which they owned. The Commissioner's erroneous understanding that the Butler Land was owned jointly by Butler and the SHC derived from its officer, Mr Ian Mullane's misinterpretation of certain clauses of the Joint Venture Agreement in September and December 2004. The error was only discovered and then confirmed on 10 March 2010 through a Compliance Division investigation.
On 4 August 2010, the Commissioner issued reassessments of land tax for the assessment years 2005/2006, 2006/2007, 2007/2008 and 2008/2009, and an assessment of land tax for the assessment year 2009/2010, in relation to the Butler Land, on the basis that the exemption under s 31 of the LTA Act is not applicable. In consequence, Butler owes $1,825,559.54 in respect of land tax for the Butler Land for the assessment years 2005/2006, 2006/2007, 2007/2008, 2008/2009 and 2009/2010.
Section 16(2) of the Taxation Administration Act 2003 (WA) (TA Act) states as follows:
Subject to subsection (5), the Commissioner may also make a reassessment
(a)on his or her own initiative, if it appears that a previous assessment is or may be incorrect for any reason; or
(b)on the application of the taxpayer.
Section 16(5) of the TA Act states as follows:
If an assessment is based on a particular interpretation of the applicable law or a particular practice of the Commissioner that was generally applied to assessments of that kind when the assessment was made, then the Commissioner cannot make a reassessment based on the ground that the interpretation or practice is or was erroneous.
On 22 September 2010, Butler lodged an objection with the Commissioner, pursuant to s 34 of the TA Act, in relation to the reassessments and assessment made on 4 August 2010. On 30 March 2011, the Commissioner disallowed the objection. On 18 May 2011, Butler commenced this proceeding for a review of the Commissioner's decision to disallow Butler's objection under s 40(1) of the TA Act.
The key issues for determination in this case are:
•whether the Commissioner is precluded by s 16(5) of the TA Act from making the reassessments on 4 August 2010; and
•if the Commissioner is not precluded from making the reassessments, whether the discretion to make reassessments under s 16(2) of the TA Act should be exercised against making the reassessments.

Butler's arguments as to why the reassessments and assessment are incorrect or invalid

Section 37(2) of the TA Act states that:
The onus of establishing that an assessment or decision to which an objection relates is invalid or incorrect lies on the taxpayer.
It is common ground that the previous assessments of land tax for the Butler Land, which included a 50% discount on the basis that the Butler Land was owned jointly by Butler and the SHC, were incorrect, because the land was, at all relevant times, wholly owned by Butler. Nevertheless, Butler contended that the reassessments of liability for land tax for the assessments years 2005/2006, 2006/2007, 2007/2008 and 2008/2009 are invalid or incorrect. Butler presented essentially four arguments in support of this contention which can be conveniently stated as follows:
1)The Commissioner is precluded by s 16(5) of the TA Act from making the reassessments under s 16(2) of the TA Act, because the original assessments were '… based on a particular interpretation of the applicable law…', within the meaning of s 16(5) of the TA Act.
2)The Commissioner is precluded by s 16(5) of the TA Act from making the reassessments under s 16(2) of the TA Act, because the original assessments were 'based on … a particular practice of the Commissioner that was generally applied to assessments of that kind when the assessment was made … ', within the meaning of s 16(5) of the TA Act.
3)The discretion to make a reassessment under s 16(2) of the TA Act should be exercised against making the reassessments as the reassessments are contrary to para 22 and para 23 of the Commissioner's Practice TAA 16.1 Certain Assessments and Reassessment Time Limits (TAA 16.1).
4)The discretion under s 16(2) of the TA Act to make a reassessment should be exercised against making the reassessments as the reassessment are inequitable or unconscionable in the circumstances of this case.
Although the objection lodged by Butler also challenged the decision to make a (prospective) land tax assessment for the Butler Land for the 2009/2010 assessment year, none of the arguments ultimately presented by Butler in this review sought to establish that this assessment is invalid or incorrect.
I will assess each of Butler's arguments as to why the reassessments are invalid or incorrect in turn.

Were the original assessments based on a particular interpretation of the applicable law?

Butler submitted that the Commissioner, by his officer, Mr Mullane, misinterpreted the Joint Venture Agreement 'to mean that the SHC had an interest, whether legal or equitable, in the [Butler] land to the extent of its participation interest under the [Joint Venture Agreement]', and that:
Any mistake made by the [Commissioner] in so interpreting the [Joint Venture Agreement] was a mistake of law, being an erroneous application of the law to the stated facts.
However, as the Commissioner submitted, the 'applicable law', within the meaning of s 16(5) of the TA Act, 'encompasses applicable statutory law, such as the [LTA Act], and applicable case/common law, if any', and the Joint Venture Agreement 'is not "law"'. The previous assessments issued on 20 December 2006, 10 January 2008 and 1 July 2009 were not 'based on a particular interpretation of the applicable law' that was erroneous, but rather was based on an erroneous interpretation of certain clauses of the Joint Venture Agreement. As Mr Mullane stated in evidence:
My understanding from reading this agreement was that clauses 16, 17.1, 23.2, 29 and 32 of the Joint Venture Agreement had the effect of instilling 50% ownership of the land the subject of the joint venture in State Housing, and the remaining 50% in [Butler].
On the basis of this misinterpretation of the Joint Venture Agreement, on 1 September 2004, Mr Mullane applied a 50% discount to reflect a half exemption under s 31 of the LTA Act to land that was, in fact, fully owned by the SHC. On 1 December 2004, Mr Mullane received a fax from Mr Ross Carmichael of the Satterley Property Group, on behalf of each of the land owners in the Joint Venture Agreement. In the fax, Mr Carmichael said the following:
Today I received penalty assessments under client ID's 2114978 and 2206727 on Butler Land Co. Pty Ltd and Ocean Springs Pty Ltd (copies attached).
As previously advised, the land subject to these assessments is also part of the Butler Joint Venture and on the basis of your previous determinations, would seem to warrant the same concessional treatment. … .
Following a telephone conversation with Mr Carmichael on 1 December 2004, Mr Mullane concluded that 'a 50% Crown exemption ought to apply to the Butler Land … on the basis of my earlier decision regarding the [SHC] land'. Mr Mullane then arranged for an amended land tax assessment for the Butler Land for the assessment period 2004/2005 to be issued to Butler with a 50% discount on the basis of a half exemption under s 31 of the LTA Act. Mr Mullane's decision in December 2004 to grant a 50% exemption under s 31 of the LTA Act was then followed through to subsequent years' assessments for land tax, until the error was discovered and confirmed through the Compliance Division investigation in early 2010.
The error made by Mr Mullane was an error as to the interpretation of the Joint Venture Agreement, rather than an error as to the interpretation of the LTA Act or any applicable common law principles. The erroneous interpretation of the Joint Venture Agreement does not involve 'a particular interpretation of the applicable law' within the meaning of s 16(5) of the TA Act.
It follows that the Commissioner is not precluded by s 16(5) of the TA Act from making the reassessments that were made on 4 August 2010 because the original assessments were based on a particular interpretation of the applicable law.

Were the original assessments based on a particular practice of the Commissioner that was generally applied to assessments of that kind when the assessments were made?

Butler submitted that the Commissioner 'developed a practice of assessing [Butler's] land, and all other land held by [Butler] or [Ocean Springs] in relation to the Joint Venture, by consistently applying a concession under s 31 of the [LTA Act] on the basis of that interpretation'. Butler submitted that the words 'assessments of that kind' in s 16(5) of the TA Act 'accommodates the making by the [Commissioner] of assessments in relation to the [Joint Venture Agreement] over the course of several years, as was done by the [Commissioner]'.
However, as the Commissioner submitted, on its proper interpretation, the expression 'generally applied to assessments of that kind' does not accommodate the narrow meaning contended by Butler. The words 'generally' and 'of that kind' clearly indicate that, in order to qualify as 'a particular practice of the Commissioner', the practice must have been applied to a broader category of assessments than those that merely related to a particular joint venture. Indeed, as the Commissioner submitted, under Butler's interpretation, the Commissioner's 'power to reassess for errors made in relation to the assessment of land tax for [a] specific property and specific taxpayer would be severely curtailed to the point that the [Commissioner] would be effectively precluded from correcting errors affecting a specific taxpayer'. This could not have been the intention of legislation specifically enabling the Commissioner to make a reassessment in circumstances where a previous assessment was incorrect.
Rather, the expression 'generally applied to assessments of that kind' refers, relevantly, to assessments of land tax for the land the subject of joint ventures. Mr Andrew Hamilton, who has been an officer at the Office of State Revenue (OSR) and its predecessors in various capacities of increasing seniority for over 41 years, and who is currently the Assistant Director, Duties, gave evidence, which was not questioned or contradicted, that, in August and September 2004, there was no formal, or even informal practice at the OSR specifically dealing with ascertaining the owner of land the subject of a joint venture. It was in August and September 2004 that Mr Mullane made his initial error or interpreting the Joint Venture Agreement as conferring half ownership of the Butler Land on the SHC. Mr Mullane gave evidence, which was not questioned or contradicted, that his 'conclusion that a 50% Crown exemption ought to apply to the Butler Land … was reached on the basis of my earlier decision regarding the [SHC] Land', which was made in August and September 2004. Mr Mullane's decision to give a 50% discount from land tax in relation to the Butler Land, purportedly pursuant to s 31 of the LTA Act, was, in Mr Mullane's words, 'followed through to subsequent years' assessments for land tax until the error was confirmed through a Compliance Division investigation'.
Butler has not presented any evidence to the effect that the Commissioner had a practice at any relevant time that was generally applied to assessments of land tax for land the subject of joint ventures, nor that the assessments of land tax made on 20 December 2006, 10 January 2008 and 1 July 2009 in relation to the Butler Land were based on such a particular practice.
It follows that the Commissioner is not precluded by s 16(5) of the TA Act from making the reassessments on 4 August 2010 because the original assessments were based on a particular practice of the Commissioner that was generally applied to assessments of that kind.

Are the reassessments contrary to para 22 and para 23 of TAA 16.1?

Section 127(2) of the TA Act states that the Commissioner 'cannot establish or direct a practice to be observed unless the Commissioner first publishes that practice'. Under s 4 and the Glossary of the TA Act, 'publish', for the purposes of s 127 of the TA Act, means:
…
(a)arrange for a summary of a new policy or a change in policy to be advertised in the Gazette; and
(b)arrange for the current policy to be made available, at no cost, on an appropriate internet site or from the Office of State Revenue;
…
TAA 16.1 is a 'practice' or 'policy' of the Commissioner that was 'published' under s 127(2) of the TA Act and had effect from 1 July 2008. TAA 16.1 states that:
This Commissioner's practice outlines matters relating to the time periods for which assessments and reassessments of … land tax will be made by the Commissioner.
Under 'Background', TAA 16.1 refers to the issue of assessments and the making of reassessments by the Commissioner under the TA Act. In relation to reassessments, TAA 16.1 refers specifically to the terms of s 16(2) and s 16(5) of the TA Act.

Paragraphs 22 and 23 of TAA 16.1, which relate to 'Retrospective Determinations', state as follows:
22.Where a taxpayer has previously been investigated in relation to a particular issue which the Commissioner determined was not subject to a tax liability, and is then subject to a further investigation in relation to the same issue, the Commissioner will not raise an assessment or reassessment in relation to that issue where all the factors listed in paragraph 22.1 to 22.3 occur:
22.1the previous investigation has been completed and a written report exists in the Department’s records which includes a determination made concerning that issue;
22.2the current circumstances surrounding the determination of that issue were essentially the same as when the previous determination was made; and
22.3the Commissioner is satisfied that the information supplied to the investigator to enable the initial determination to be made was complete, and that the taxpayer did not withhold information at that time, which may have changed the earlier determination had that information been available at the time of the initial investigation.
23.Where paragraph 22 applies to prevent a retrospective assessment, an assessment may be made in respect of the relevant issue on a prospective basis from the date the taxpayer is advised of the revised determination in relation to the issue.
Butler submitted that the Commissioner carried out a 'previous investigation', within the meaning of para 22 of TAA 16.1, when Mr Mullane considered Mr Carmichael's requests, on behalf of the members of the joint venture, for variations to the land tax assessments in relation to land owned by the SHC in August and September 2004 and in relation to land owned by Butler and Ocean Springs in December 2004. Butler submitted that 'the result of the first investigation was to enable the making of a reassessment and [to] apply a concession for land tax purposes to the Butler Land'. Butler submitted, further, that no information was withheld from the Commissioner at any time, the information derived by the Commissioner 'in the process of carrying out the first investigation [i.e. the 'investigation' by Mr Mullane in 2004] in order to enable him to make his determination was complete in all respects', and there is no difference between the information derived by the Commissioner from Butler or any other person in relation to 'first investigation' and the information derived by the Commissioner in relation to 'the subsequent investigation', i.e. the investigation undertaken by the Compliance Division in early 2010 which confirmed the error in the previous assessments.
It is to be noted that para 22 of TAA 16.1 uses the terms 'investigated', 'the previous investigation', 'a further investigation' and 'the investigator'. The TA Act also refers to the terms 'investigator' and 'investigation'. Under s 11 of the TA Act, the Commissioner may appoint a person 'to be an investigator for the purposes of the taxation Acts', which, under s 3(1) of the TA Act, include the TA Act, the LTA Act, and seven other Acts. Part 8 of the TA Act, which comprises s 92 s 104 inclusive, is entitled 'Investigations'. Section 92 of the TA Act states as follows:
An investigation may be carried out under this Part for any or all of the following purposes
(a)to ascertain whether a tax liability exists;
(b)to gather any information relevant to making an assessment;
(c)to gather any information relevant to making a decision under a taxation Act;
(d)to audit tax records;
(e)to gather evidence of a suspected contravention of a taxation Act;
(f)any other purpose relevant to the administration of a taxation Act.
Section 94 and s 95 of the TA Act confer broad powers on the Commissioner to obtain information from taxpayers 'for investigation purposes'. Section 95(1) of the TA Act authorises the Commissioner 'for investigation purposes, [to] require a taxpayer or any other person to attend for examination by an investigator'. Section 95(4) of the TA Act authorises 'an investigator conducting an examination' to require a person attending for examination to make an oath to answer all questions truthfully and may administer an oath, to require the person to answer a question relevant to the subject matter of the examination 'put by the investigator, or with the consent of the investigator, by another person present at the examination', and to require the person to produce relevant material for examination 'by the investigator'. Section 97(1) of the TA Act authorises an 'investigator [to] make a recording of the questions asked by an investigator and the answers given by a person who attends for examination'. Sections 98 101 of the TA Act confer broad powers on 'an investigator' to enter premises 'for investigation purposes'.
Given that TAA 16.1 is a 'practice' or 'policy' published by the Commissioner under s 127(2) of the TA Act, the terms 'investigation' and 'investigator' in para 22 of TAA 16.1 are to be interpreted consistently with the use of those terms in the TA Act. A practice or policy 'must be consistent with the statute' under and/or for the purposes of which it is made: Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634 (Brennan J sitting as President of the Administrative Appeals Tribunal); see also R v Torquay Licensing Justices; Ex parte Brockman [1951] 2 All ER 656 and Cumings v Birkhead Corporation [1971] 2 All ER 881. It follows that, as a general principle, it is sensible to interpret the meaning of words and expressions used in a practice or policy consistently with the meaning of the same words and expressions as defined or discerned in the legislation under and/or for the purposes of which the practice or policy is made.
Consequently, on the proper interpretation of TAA 16.1, when read in light of the provisions of the TA Act, the terms 'the previous investigation' and 'a further investigation' in para 22 of TAA 16.1 refer to investigations under Pt 8 of the TA Act and the term 'the investigator' refers to an investigator appointed by the Commissioner under s 11 of the TA Act to be an investigator for the purposes of the taxation Acts.
Ms Nicole Suchenia, who has been an officer employed by the OSR in various capacities of increasing responsibility since 1990, and is currently Director, Legislation Training and Review, gave the following evidence, which was not questioned or contradicted:
From approximately 1996 onwards, the Compliance Division of OSR was the only division of OSR which had investigators with functions of investigation under the various provisions of the Acts administered by the Commissioner.
Furthermore, since the commencement of the [TA Act], the only officers who have been appointed as investigators under s 11 of the [TA Act] and had the ability to use the powers conferred on investigators under Part 8 of the [TA Act] have been officers occupying positions located in the Compliance Division of OSR.
When Mr Mullane responded to Mr Carmichael's requests for variations of the land tax assessments issued to the parties to the Joint Venture Agreement, he was not an officer of the Compliance Division of the OSR and was not appointed as an 'investigator' under s 11 of the TA Act with the ability to use powers conferred on 'investigators' in carrying out 'investigations' under Pt 8 of the TA Act. Rather, as Mr Mullane said, he was, at the relevant time, an officer in the Land Tax Assessing section of the OSR and:
… working in a team environment dealing with, amongst other things, land tax queries from taxpayers, solicitors, settlement agents and the like regarding applications for exemptions and the raising of land tax accounts, as well as chasing up payments of land tax accounts.
In assessing Mr Carmichael's requests for variations to land tax assessments in 2004, Mr Mullane was therefore not an 'investigator' carrying out an 'investigation' for the purposes of para 22 of TAA 16.1. Moreover, under para 22 of TAA 16.1, the 'previous investigation' must have resulted in a 'written report [that] exists in the Department's records which includes a determination made concerning [the] issue'. As Ms Suchenia explained:
When an investigator (from the Compliance Division) carries out an investigation, he or she is required to follow various procedures grouped into several general areas which include, amongst other things, the examination of all relevant records and compilation of all relevant data/records and the preparation of a written investigation report.
The purpose of the written investigation report is to record the information gathered and the findings made during the course of the investigation. The report also substantiates the investigator's basis for determining any outcome from the investigation (eg. issue of an assessment or a refund of tax). The report then supports further actions by the officers in OSR, including for example the investigator's supervisor who checks and approves the investigator's conclusions, the revenue officer who may issue any required assessment notice, the review officer who considers any objection to the assessment and the recovery officer who may have to start proceedings to collect any outstanding amounts. Finally, the report is a permanent record of findings should the taxpayer in question ever be subject to a further investigation/inquiry.
In the present case, there is no 'written report … in the Department's records which includes a determination made concerning [the] issue' of a partial exemption from land tax for the Butler Land. The only written record that exists of Mr Mullane's decision to grant a 50% exemption in relation to the Butler Land in 2004 is the amended land tax assessment that Mr Mullane arranged to be issued and a brief handwritten note that Mr Mullane wrote on the cover sheet of the fax from Mr Carmichael dated 1 December 2004 referring to his telephone conversation with Mr Carmichael on that day. The note states as follows:
Spoke with Ross Carmichael 1/12/04 + all lots folios 13 should have 50% Crown Lands Exemption. This is a joint venture between Butler Land Co P/L & SHC. See also 2206359 & 2206727.
This note of the telephone conversation is not a 'written report' of an 'investigator' of the nature contemplated by TAA 16.1, because it does not record the information gathered and the findings made during an 'investigation' and does not substantiate the basis for determining the outcome.
It follows that the reassessments in question in this case are not contrary to para 22 of TAA 16.1. Furthermore, para 23 of TAA 16.1 expressly contemplates the issue of an assessment 'on a prospective basis from the date the taxpayer is advised of the revised determination in relation to the issue', even where the taxpayer was previously 'investigated in relation to a particular issue', within the meaning of para 22 of TAA 16.1.

Should the discretion be exercised against making the reassessments because the reassessments are inequitable or unconscionable?

Butler submitted that, if the Commissioner is not precluded by s 16(5) of the TA Act or by the terms of para 22 of TAA 16.1 from making the reassessments which are the subject of the objection, then the discretion as to whether or not to make the reassessments under s 16(2) of the TA Act should be exercised against making the reassessments in question. Butler contended that it had relied upon the reassessments originally issued by the Commissioner in setting prices for the sale of the developed joint venture land and that the majority of that land has now been sold. Butler submitted that it, and the SHC, 'have not had any opportunity to take into account the [re]assessed tax in setting land prices'. Accordingly, Butler submitted, it is 'inequitable' to exercise discretion so as to make the reassessments in question. Further, or alternatively, Butler submitted that it is 'unconscionable' to issue the reassessments 'in circumstances where [Butler] and the SHC previously enjoyed an exemption under s 31(1) of the LTA Act as determined by the Commissioner', and where 'the effect of the reassessment is and will continue to be to constrain and adversely affect the development and provision of affordable housing in Western Australia by [Butler] and the SHC in joint venture with each other'.
While the Commissioner conceded that there is a discretion under s 16(2) of the TA Act as to whether or not to make a reassessment where a previous assessment was incorrect, the Commissioner submitted that 'the fact that [Butler] and [SHC] may have relied upon the previous [assessments] which were based on the ground of a 50% Crown/government exemption in setting prices for the sale of the developed Joint Venture Agreement Land is not a relevant consideration the [Commissioner] was bound to take into account in exercising his discretion'.
It is unnecessary to decide, in this case, whether or not Butler's reliance on the exemption incorrectly granted to it and its inability to take the reassessed land tax into account in setting land prices, is an irrelevant consideration in relation to the exercise of discretion under s 16(2) of the TA Act. Assuming that Butler's reliance on the incorrect assessments and its inability to recover the reassessed land tax from purchasers is a relevant consideration in the exercise of discretion, the Tribunal is satisfied that the reassessments are not inequitable and that Butler's submissions in relation to inequity would not warrant the exercise of discretion so as not to make the reassessments. As the Commissioner submitted, a purpose of the TA Act is to ensure equity between different taxpayers. Consequently, 'one taxpayer should not benefit over other taxpayers in circumstances where one taxpayer benefits from an isolated error and other taxpayers are not so fortunate to have their assessments based on the same error'. Furthermore, Butler has had the benefit of 50% of the land tax that should have been paid in relation to the Butler Land in each of the assessment years between 2004/2005 and 2009/2010. It would be inequitable to other taxpayers and inappropriate, in terms of the proper administration of taxation laws, to enable Butler to retain that money because of Mr Mullane's misinterpretation of the Joint Venture Agreement.
Finally, Butler's alternative submission, that it is 'unconscionable' to make the reassessments in question because 'the effect of the reassessment is and will continue to be to constrain and adversely affect the development and provision of affordable housing in Western Australia', is, in effect, an argument for legislative change and, in particular, for the conferral of an exemption or partial exemption from land tax for private land forming part of a joint venture for the provision of affordable housing. It is a matter for Parliament as to whether there should be legislative change in this respect. Furthermore, insofar as the Butler Estate involves affordable housing, the majority of the land has now been sold. This argument does not warrant the exercise of discretion under s 16(2) of the TA Act so as not to make the reassessments in question.
It follows that the Tribunal would exercise the discretion under s 16(2) of the TA Act in the particular circumstances of this case in the same manner as the Commissioner.

Conclusion

Butler has not discharged its onus of establishing that the reassessments of land tax in relation to the Butler Land for the assessment periods 2005/2006, 2006/2007, 2007/2008 and 2008/2009 and the assessment of land tax in relation to the Butler Land for the period 2009/2010, to which the objection relates, are invalid or incorrect. The Commissioner's decision to make the reassessments and the assessment on 4 August 2010 is the correct and preferable decision in the circumstances of this case. It follows that the application for review should be dismissed and the decision of the Commissioner to disallow Butler's objection to the reassessments and the assessment should be affirmed.

Orders

For these reasons, the Tribunal makes the following orders:
1.The application for review is dismissed.
2.The decision made by the respondent on 30 March 2011 to disallow the applicant's objection to the reassessments of liability for land tax for the assessment periods 2005/2006, 2006/2007, 2007/2008 and 2008/2009 made on 4 August 2010, and the assessment of liability for land

tax for the assessment period 2009/2010 issued on 4 August 2010, in relation to the applicant's land under client ID 2114978, is affirmed.

I certify that this and the preceding [50] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE D R PARRY, DEPUTY PRESIDENT