Chief Commissioner of State Revenue v E Group Security Pty Ltd (No 2)

The Chief Commissioner of State Revenue appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court concerning the application of payroll tax. The dispute centred on whether certain arrangements between related entities constituted "employment agency contracts" under the *Payroll Tax Act 2007* (NSW), thereby making the Chief Commissioner liable for payroll tax on payments made under those arrangements.

The Court of Appeal was required to determine whether the Commissioner had correctly applied the employment agency contract provisions of the *Payroll Tax Act 2007* (NSW) to the factual circumstances. Specifically, the court had to consider whether the Commissioner’s assessment of the respondent’s payroll tax liability for the period 1 July 2015 to 30 June 2018 was lawful, given the nature of the contractual relationships between the entities involved.

Brereton JA, with whom Simpson AJA and Griffiths AJA agreed, allowed the appeal. The Court found that the Commissioner's assessment was not in conformity with the Act and remitted the matter for reassessment. The Court also made orders regarding the costs of the proceedings, with the defendant ordered to pay 50% of the plaintiff’s costs.