Chief Commissioner of State Revenue v Pacific General Securities Ltd & Finmore Holdings Pty Ltd (Rd)

[2004] NSWADTAP 51

Appeal Panel - Internal

CITATION:	Chief Commissioner of State Revenue v Pacific General Securities Ltd & Finmore Holdings Pty Ltd (RD) [2004] NSWADTAP 51
PARTIES:	APPELLANT Chief Commissioner of State Revenue RESPONDENT Pacific General Securities Ltd & Finmore Holdings Pty Ltd
FILE NUMBER:	049019
HEARING DATES:	6/09/2004
SUBMISSIONS CLOSED:	09/06/2004
DATE OF DECISION:	11/16/2004
DECISION UNDER APPEAL:	Pacific General Securities Ltd & Finmore Holdings Pty Ltd v Chief Commissioner of State Revenue (No 2) [2004] NSWADT 74
BEFORE:	O'Connor K - DCJ (President); Block J - ADCJ (Judicial Member); Bennett C - Non Judicial Member
CATCHWORDS:	relevant/irrelevant considerations - statutory interpretation
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	036011
DATE OF DECISION UNDER APPEAL:	04/19/2004
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Duties Act 1997 Finance Act 1910 (UK) Income Tax Assessment Act 1936 (Cth) Stamp Duties Act 1923 (SA)
CASES CITED:	Attorney General v Cohen and anor [1937] 1 KB 478 Commissioner of Taxation of the Commonwealth of Australia v Lutovi Investments Pty Limited (1978) 140 CLR 434 House v The King (1936) 55 CLR 499 Jeffrey v Commissioner of Stamps (1980) 23 SASR 398 Old Reynella Village Pty Ltd v Commr of Stamps (S.A.) (1989) 51 SASR 378; 20 ATR 1080; 89 ATC 4916 Pacific General Securities Ltd & Finmore Holdings Pty Ltd v Chief Commissioner of State Revenue (No 2) [2004] NSWADT 74 Z v Director General, Department of Transport [2001] NSWADTAP 14
REPRESENTATION:	APPELLANT J Young, barrister RESPONDENT A J O'Brien, barrister
ORDERS:	1. Decision under appeal set aside; 2. Application for review remitted to the Tribunal, to be determined without the hearing of further evidence; 3. Leave to the Appellant to apply for further order as provided at paragraph [54] of the Reasons

1 This appeal is brought by the Chief Commissioner of State Revenue (the Commissioner) against a decision of the Revenue Division of the Tribunal setting aside a decision by the Commissioner to refuse to reduce an assessment. The applicants for the review, two companies, are the respondents to the appeal (and will be referred to in this decision, where appropriate, as the taxpayers). The decision under appeal is Pacific General Securities Ltd & Finmore Holdings Pty Ltd v Chief Commissioner of State Revenue (No 2) [2004] NSWADT 74.

2 As the Tribunal’s decision was made in respect of a ‘reviewable decision’, there is a right of appeal to the Appeal Panel (see Administrative Decisions Tribunal Act 1997 (Tribunal Act), ss 112 and 113) circumscribed as follows (s 113(2)):

‘(2) An appeal under this Part:
(a) may be made on any question of law, and

(b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision.’

3 The Commissioner limited his appeal to questions of law. There was no application to extend the appeal to the merits.

4 The appeal centres on the Tribunal’s approach to the question of assessing stamp duty payable on dutiable transactions that arguably should be treated as aggregated, and as a consequence fall subject to the higher ad valorem duty payable on aggregated transactions.

5 The relevant provision is s 25(1) of the Duties Act 1997 (Duties Act) which provides:

‘ 25 Aggregation of dutiable transactions

(1) Dutiable transactions relating to separate items of dutiable property, or separate parts of, or interests in, dutiable property are to be aggregated and treated as a single dutiable transaction if:

(a) they occur within 12 months, and

(b) the transferee is the same or the transferees are associated persons, and

(c) the dutiable transactions together form, evidence, give effect to or arise from what is, substantially, one arrangement relating to all of the items or parts of, or interests in, the dutiable property.’

Factual Background

6 This case arises out of the purchase of five neighbouring residential properties, situated consecutively in the same street in Dee Why. Two entrepreneurs, D and K had in March 2001 acquired from the five neighbours options to purchase the properties. They were interested in redeveloping the land as a mixed residential- unit and commercial development. In each case the contracts initially took the form of the grant of an exclusive option to purchase exerciseable by a set date, for which D and K paid an option fee. The vendors gave their consent to all development applications and agreed to provide whatever information was required and sign all documents “to enable applications for the development … of the Property to be made to the Local Council”.

7 In June 2001 D and K made a development application to the local Council covering all five parcels (the estimated cost of the development was $3,000,000). On 30 August 2001 a joint venture agreement to develop the properties was entered into between a financier, Pacific General Securities Ltd (the first applicant for review and now the first respondent) and D and K and their associated companies (Pacific General having a 65% interest, and D and K 35%). The 35% interest was transferred to Finmore Holdings Pty Ltd (the second applicant for review and now the second respondent). The agreement is in evidence. It deals in detail with such matters as borrowings, the conduct of the development application, the joint venture proportions, the obtaining of option deeds, prior capital contribution and the conduct of the project.

8 On 28 and 29 November 2001 the taxpayers exercised the options with all five vendors. There were different prices paid for each of the five lots, $640,000 being the lowest, and $815,000 the highest (total paid $3,470,000).

9 Subsequently on 18 December 2001 the Council granted development approval. The instruments of transfer were assessed for duty separately between January and March 2002. As a result of compliance activity carried out by the Commissioner, the Commissioner issued a notice of assessment requiring payment of an additional $42,740 in duty applying the aggregation provision.

10 The above statement of the circumstances is drawn from the Tribunal’s decision as well as an agreed chronology presented to the Appeal Panel by the Commissioner. (We have taken account of certain errors as to dates made in the Tribunal’s reasons and noted by both parties to the appeal.)

11 It has been accepted by all parties throughout that two of the three criteria found in s 25(1) applied to the circumstances, i.e. para (a) (transactions within 12 months of each other) and para (b) (transferees were same persons). The dispute concerns the application of the third criterion (para (c)), namely whether ‘the dutiable transactions together form, evidence, give effect to or arise from what is, substantially, one arrangement relating to all of the items or parts of, or interests in, the dutiable property’.

12 Here the debate relates, primarily, to the approach to be taken in ascertaining whether the circumstances involve ‘substantially, one arrangement’. The Tribunal found, disagreeing with the Commissioner, that s 25(1) did not apply to the above circumstances. In his submissions to the Tribunal the Commissioner had contended that: ‘The transactions indicate a concerted action by all persons involved, particularly [D] and [K].’

13 The Commissioner contends that the Tribunal erred in law in its determination of the approach to be adopted in applying s 25(1) to the facts; and, in particular, had failed to apply South Australian authority relevant to the interpretation of s 25(1), the key case being Old Reynella Village Pty Ltd v Commr of Stamps (S.A.) (1989) 51 SASR 378; 20 ATR 1080; 89 ATC 4916.

14 The aggregation provision in force in South Australia at the time of the decision in Old Reynella was s 66AB(1) of the Stamp Duties Act 1923 which provided:

‘Where land or interests in land is or are conveyed by separate conveyances –
(a) that arise from a single contract of sale; or

(b) that together form, or arise from, substantially one transaction or one series of transactions,

the conveyances shall be chargeable with ad valorem duty calculated upon the sum of the amounts …’.

15 In that provision the key term is ‘substantially one transaction’ (or ‘substantially … one series of transactions’) while in the Duties Act the key term is ‘substantially, one arrangement’. On its face ‘arrangement’ has a wider connotation.

The Main Cases

16 In the Old Reynella case, certain entrepreneurs had, over a four-month period, purchased four properties in the Reynella area and obtained options to purchase a further 16 properties. If amalgamated, the 20 properties would become one block of land. The taxpayer had obtained the benefit, through assignment from the entrepreneurs, of these contracts. The taxpayer proceeded to obtain transfers of the 17 properties covered by the contracts.

17 Mohr J reviewed two authorities on aggregation of duty dealing with broadly comparable circumstances, the English case Attorney General v Cohen and anor [1937] 1 KB 478 and another South Australian case Jeffrey v Commissioner of Stamps (1980) 23 SASR 398.

18 In Cohen the Court of Appeal (Slesser, Green LJJ; Romer LJ dissenting) found against aggregation, whereas in Jeffrey the Supreme Court (Jacobs J) had found in favour of aggregation.

19 Cohen had involved the acquisition of 6 lots in the same street, comprising 12 residential properties, by separate successful bids at public auction. They were all owned by the same vendor - two trustees of an estate. The relevant provision was the Finance Act 1910 (UK) s 73 and its effect was to apply double the usual stamp duty if the instrument of transfer in respect of ‘the transaction thereby effected’ formed ‘part of a larger transaction or of a series of transactions’.

20 Slesser LJ and Greene LJ focused on the word ‘transaction’, and agreeing with the judge below, accepted the taxpayer’s submission that some ‘interdependence’ between the transactions needed to be shown. As these were sales by public auction one transaction could not be said, on this analysis, to have ‘depended’ on the other. The purchases were seen as disparate transactions. Nor could it be said that they formed part of a ‘series’ of transactions. At 488 Greene LJ said: ‘There was no relationship between the transactions effected by the … conveyances except that the houses were all situate in the same street, the parties were the same, the conveyances all bore the same date and the contracts which they carried out were all made on the same day and at the same place.’ Romer LJ strongly dissented, considering, in essence, that the narrow approach taken to the construction of the statute in relation to the issue of what constituted a ‘series’ of transactions left it with no practical sphere of operation, thus defeating the purpose of the legislation as he construed it.

21 In the course of his judgment Greene LJ also said at 489:

‘In my judgment, if the Legislature had intended that a relationship such as that which exists in the present case between separate and independent transactions should constitute each transaction part of a series, it should have said so in clear terms, for example, by using some words such as ‘one of a number of substantially contemporaneous transactions’.
(This observation is probably the basis of the drafting of the South Australian provision.)

22 In Jeffrey’s case the same vendors sold two adjoining parcels of land to separate purchasers, a mother and son. The following factors favoured the conclusion that there was a substantial degree of connection between the transactions for the purposes of revenue law: contiguity as to the vendors, contiguity of land, and a close family relationship between the respective purchasers. Duty was assessed under the aggregation provision. The taxpayers appealed, relying on Cohen’s case. Jacobs J rejected their argument, upholding the assessment. He said at ATC 4131:

‘Upon a consideration of the [South Australian] Act itself, and of the argument addressed to me, it appears to me that the use that is made in the Statute of the word ‘one’ – one contract, substantially one transaction, one series – gives a critical clue to the application of the section. It points to some essential unity, some ‘oneness’, some unifying factor that brings the several transactions within the section. By virtue of subsec. (1a) a unity of purchasers, coupled with some unity in time, would be sufficient unless it can be shown that the transactions are separate and independent and removed from the concept of ‘contract-splitting’. If the facts were as they were in Attorney General v Cohen (supra) that would be sufficient in my view to rebut the presumption, notwithstanding the unity of time and purchaser, for whether the purchaser at auction succeeded in buying one, or four, or six of the lots offered was a mere matter of market change [sic – chance?]. Again, if a farmer were to subdivide his land into three parcels and sells each parcel to different purchasers at arms length from each other, I do not see how the section could apply…. In every case … it will be necessary to find a relationship or a connection or interdependence between the transaction [sic] that gives to them the essential unity at which s 66ab is directed.’

23 Jacobs J reviewed the circumstances, and was satisfied that this essential unity was present. He said (at ATC 4133):

‘Here we have adjoining parcels of land, admittedly in separate Certificates of Title, which have at all material times been held in common ownership as one property; the two contracts were identical in form, save for the special conditions; they were obviously prepared by the same agent, and probably on the same day; each provides for the same nominal sum by way of deposit, unrelated to the purchase price; settlement under each contract is to be effected at the same place, and on the same day; the purchasers are related as mother and son; the son is not obliged to proceed with his contract unless his mother sells her existing property and obtains consent to build on the land she intends to purchase adjoining her son’s intended purchase; both contracts are in effect subject to the same conditions, although the mother’s contract stands independently of the son’s; and the purpose of those conditions is, inter alia, to enable the mother to finance the son in his purchase.’

24 After considering these authorities, Mohr J in Old Reynella concluded that the purchases of the 17 lots from different vendors were assessable under the aggregation provision. He said (at ATC 4919) that the entrepreneurs ‘were engaged in the process of acquiring separate but adjoining blocks of land with the intention of integrating them in due course into one holding and on that land entered into a contract or contracts for the erection of a shopping complex.’

The Tribunal’s Reasoning Process

25 After reviewing the submissions and the case-law (most importantly the three cases already mentioned) the Tribunal commenced its assessment at para [58]. It is clear that the Tribunal did not regard Old Reynella as reflecting the appropriate approach and preferred, what it saw as, the consistent and narrower approach adopted in Cohen and Jeffrey.

26 The Tribunal considered that its scrutiny (and consequently that of the Commissioner) should be confined to the circumstances ‘relating’ to the relevant dutiable transaction(s), and interpreted the issue of what matters could be said to relate to the transaction(s) narrowly. The Tribunal allowed for one qualification. It could undertake a wider inquiry if there was some special factor, for example that the dutiable transactions formed part of a scheme to reduce or avoid duty.

27 Our interpretation of the Tribunal’s approach emerges from paras [58] and [59] of the Tribunal’s reasons for decision, read in conjunction with paras [64]-[66], as explained below.

28 (a) At [58] the Tribunal stated that the majority in Cohen had only treated ‘the conveyance’ as the dutiable transaction, and that had also been the approach in Jeffrey. As to Jeffrey the Tribunal said: ‘In Jeffrey, Jacobs J also restricted the inquiry to the relevant contracts that the mother and son had entered into.’ The Tribunal contrasted this with the approach taken in Old Reynella in this passage in [58]:

‘In the absence of any objection by the taxpayer, his Honour made a much wider inquiry, although his Honour was asked to rule whether the transfers or any of them should be aggregated. My view, in relation to paragraph 25(1)(c) is that it merely requires an inquiry into whether the “dutiable transactions” fall within the scope of the paragraph. As indicated, earlier, “dutiable transactions” are clearly defined in the Duties Act. In the present matter, the “dutiable transactions” are the five separate conveyances.’
(b) The Tribunal said in [59]:
‘The inquiry, in my opinion, is confined to matters directly relating to the relevant “dutiable transactions”. The relationship between the parties, timing, previous history of the “dutiable transactions”, relationship between the “dutiable transactions”, whether the “dutiable transactions” are subject to interdependency clauses and whether the “dutiable transactions” are in respect of only part or some interests in the relevant “dutiable property” are I think some of the matters that are relevant in relation to this inquiry. That is not to say that the respondent is not entitled to look at surrounding circumstances to better understand the relevant “dutiable transactions”. For example, the respondent would be entitled to look at the whole scheme under this provision if the “dutiable transactions” are part of a scheme to reduce or avoid duty.’
(c) The Commissioner sought to rely on a Ruling he had published (DUT 022). The Tribunal said:
‘64 The correctness of the ruling in respect of statements that it contains about the aggregation of separate but adjoining blocks of land with the intention of integrating them into one holding is not before this Tribunal. I will refrain from expressing any detailed views; suffice to say that it relies on Old Reynella without any reference to Jeffrey or Cohen to support a wide inquiry to determine the nature of the arrangement in each case. I have expressed my views on the limited scope of inquiry that is allowed by s 25(1) which is consistent with the policy intent of s 25 that the respondent has ruled on in paragraph 7 of his ruling. Paragraph 25(1)(c) speaks of “one arrangement” not “part of a larger transaction or arrangement” nor some such words as “one of a number of substantially contemporaneous transactions”. In the context used “one arrangement” must only relate to the relevant “dutiable transactions” taken together without any reference to any antecedent or future transactions that would have some past or future relevance to the “dutiable property” acquired under the “dutiable transactions”.

65 The respondent has submitted that in applying the provisions of s 25(1) to this matter, the respondent is entitled to treat the “arrangement” for purposes of s 25(1) to include “the circumstances of the Applicants’ acquisition, development and marketing of a commercial/residential complex pursuant to the express fundamental terms of the Joint Venture Deed” to determine that “the transactions were substantially one arrangement”. In view of what I say is the scope of the inquiry I do not think that submission is available to the respondent.

66 … I have expressed my doubts about the correctness of the decision in Old Reynella to consider a wide range of factors beyond the relevant transactions.’

Assessment

29 A tribunal of fact, if it has properly interpreted the law, has a wide discretion as to how it applies the law to the particular facts. Ordinarily the process of applying the law, properly understood, to the facts is not vulnerable to attack on error of law grounds. Ordinarily such a decision cannot be successfully appealed where the right of appeal as here is limited to errors of law.

30 The Commissioner’s contention, essentially, is that the Tribunal by virtue of its reasoning must have misinterpreted the relevant provision or not taken into account relevant considerations.

31 The provision under notice here is, we recognise, differently expressed to the UK Finance Act provision and the South Australian provision. Section 25(1) of the Duties Act seeks to catch ‘dutiable transactions’ that form part substantially of the one ‘arrangement’.

32 At the appeal hearing the taxpayers defended the Tribunal’s decision. The taxpayers renewed one submission that had failed before the Tribunal. The taxpayers submitted that the arrangement affected by s 25(1) needed to be ‘bilateral’, relying on a High Court decision, Commissioner of Taxation of the Commonwealth of Australia v Lutovi Investments Pty Limited (1978) 140 CLR 434.

33 While that was the ruling in Lutovi, it clearly depended, as the Tribunal noted, on the precise terms of the provisions of Commonwealth taxation law before the Court in that case: ss 44 (2) (b) and 44 (2D) of the Income Tax Assessment Act 1936. The term “arrangement” appeared in conjunction with the words “entered into”. It was held that those qualifying words had the effect that the term “arrangement” necessarily referred to an agreement between two or more persons, and thus not apt to encompass the company resolutions under consideration there that had effected a reduction of capital and a distribution to shareholders. As the Tribunal noted, Aickin J at 463 stated:

‘The word “arrangement” has several meanings and each reflects a broad and imprecise conception. At least one may be put aside immediately. The word may in some circumstances mean no more than a plan drawn up by and to be implemented by one person alone. In the present context it cannot have that meaning, because of the presence of the words “entered into”. …’.

34 However s 25 (1) of the Duties Act is not so qualified. The term “arrangement” as used in that section could encompass a unilateral arrangement. It is clear, as the Tribunal noted at [47] of its reasons that the term is wide enough to include a bilateral or a unilateral arrangement.

35 Here the vendors were independent of each other (with the qualification that in the sequence of the five homes, two that neighboured each other were owned by different members of the same family). The entrepreneurs, D and K, had dealt with them in the open market (by private negotiation rather than by auction). D and K were successful in putting together a parcel of properties. On its face this circumstance makes the case similar to Cohen’s case. It certainly does not possess the degree of connection between purchasers and vendors seen in Jeffrey’s case. On the other hand Old Reynella was a case where there was no evidence of any prior or special connection as between the entrepreneurs and the vendors. That factor was not conclusive in Old Reynella. There the Court took into account several other factors, many very similar to those present here. It is obvious why the Commissioner placed such importance on the decision in Old Reynella.

36 The Commissioner (and the Tribunal on review) is required in deciding whether the circumstances amount ‘substantially’ to ‘one arrangement’ to have regard to all relevant factors. The problem as we see it in this case is that the Tribunal excluded from view, in reaching the conclusion it did, material considerations. Such a failure is an error of law: see House v The King (1936) 55 CLR 499 at 505.

37 In this regard, we are satisfied that the South Australian cases are consistent with each other. They do, in our view, illustrate the proper approach. Nor, in our view, is the English case inconsistent with the South Australian cases in relation to the proper approach.

38 The same approach is appropriate when applying s 25(1) of the Duties Act.

39 The Tribunal erred in restricting its consideration in effect to the circumstances immediately surrounding the five transfers; and excluding from consideration such matters as the nature of the antecedent options, the context in which they were given, the nature of the development application and other matters such as the terms of the joint venture agreement.

40 At [58] the Tribunal had, mistakenly we consider, seen Attorney-General v Cohen as indicating that in cases involving acquisition of land only the circumstances relating immediately to the conveyances should be examined in determining whether there was a connection of a kind that attracted the operation of the aggregation provisions. It is clear, we consider, that Greene LJ did not see the question as always being restricted to an examination of the conveyances themselves. He gave an example of ‘interdependence’ of a kind which he considered would lead to the consideration shown in the instruments being aggregated (at 490-491):

‘Again, a builder developing a building estate might have under one contract an option to purchase different plots at different times, so that each option, when exercised, would create a separate contract. In each of these cases it would at least be a matter of doubt whether a particular order or conveyance could be said to form part of a larger transaction, but there would, I think, be in each case such an integral relationship between the transactions as to constitute each indubitably part of a series of transactions.’

41 Before the Appeal Panel Mr Young for the Commissioner described Cohen (aptly) as a case where there was no evidence of a connection or interdependence.

42 The Tribunal was also mistaken in its statement at [58] of its reasons that ‘in Jeffrey, Jacobs J also restricted the inquiry to the relevant contracts that the mother and son had entered into’. As the extract set out earlier in our reasons shows, Jacobs J engaged in a multi-factored analysis.

43 Old Reynella involved a similar approach. Its importance in relation to the present case is that the factors seen to favour aggregation all related to the conduct of the entrepreneurs and their successors. Though the Commissioner described the situation in the present case as one where all parties had been involved in a ‘concerted action’, there was no evidence that the vendors had, for example, sought out the purchasers. They did, of course, give the co-operation required by the options to assist the development application.

44 Mr O’Brien for the taxpayers submitted that care should be shown in giving weight to the reasons in Old Reynella, as they were somewhat brief and insufficiently detailed. In our view the judgment was as detailed as was required. It is not, we agree, to be treated as a binding precedent. Its importance, as we have indicated, lies in its illustration of the appropriate approach to provisions such as s 25(1), especially where there is no significant involvement by the original vendors in the commercial objectives of the purchasers and their beneficiaries.

45 The Tribunal failed to have regard to the following considerations which are, we consider, highly material to the ultimate determination as to whether the circumstances involve ‘substantially, one arrangement’:

(1) the grant of options in similar terms to D and K and that they were given in contemplation of a development application

(2) the subsequent development application and the connection of the grantors of the options (still at that time the owners of the affected properties) to the development application

(3) the assignment by D and K of their interests

(4) the degree of support given to the pursuit of a development application, as evidenced by their agreement to an extension of the option period

(5) the terms of the joint venture agreement

(6) the nearness of the date of execution of the contracts to the ultimate development consent, and the terms of the agreement of the purchasers to provide all relevant consents

(7) the nature and magnitude of the development application.

46 The factors that fall to be considered by the Commissioner in applying s 25(1) may well involve, entirely, a consideration of the conduct of the purchasers and their beneficiaries.

47 We do not see this as surprising. This legislation is directed to imposing tax on instruments of transfer with the liability borne by the transferee. The vendors are not at risk of tax. The objective of s 25 is to treat differentially transferee(s) involved in transactions that have no connection sufficient to amount to an arrangement, as compared to those where there is a sufficient connection. Accordingly the conduct of primary significance will be that of the transferee(s). In any assessment as to whether there is ‘substantially one arrangement’ there will be questions of degree involved. Here the Tribunal erred in not having regard to a number of considerations that we consider arose on the facts as found and were material to the application of s 25(1).

48 In other submissions the Commissioner analysed the meaning to be given to the words in s 25(1) which precede the words ‘substantially, one transaction’. Those words are ‘form, evidence, give effect to or arise from’. In light of our conclusions it is not necessary to examine these submissions.

49 Nor in our view is it necessary for us to deal with submissions as regards the Commissioner’s Ruling, an office interpretation that the Commissioner purported to apply (DUT022) to the taxpayers. It is not the function of the Appeal Panel to engage in textual analysis of Rulings. We have stated our view as to what we consider is the proper approach to the interpretation of s 25(1) and referred to a number of factors relevant to a case of the present kind. Clearly some care must always be shown in relying on cases in other jurisdictions that turn on differently-expressed provisions.

50 We noted above that the appeal was restricted to a question of law. The relevant powers of the Tribunal are found in s 114 of the Tribunal Act which provides:

‘ 114 Appeals on questions of law

(1) If an appeal under this Part is restricted to questions of law, the Appeal Panel is to determine the appeal and may make such orders as it thinks appropriate in light of its decision.

(2) The orders that may be made by the Appeal Panel on any such appeal include, but are not limited to, any of the following:

(a) an order affirming or setting aside the decision of the Tribunal (as originally constituted),

(b) an order remitting the case to be heard and decided again by the Tribunal (as originally or similarly constituted), either with or without the hearing of further evidence, in accordance with the directions of the Appeal Panel,

(c) an order made in substitution for an order made by the Tribunal.’

51 The decision should be set aside.

52 The Commissioner reserved his position at the appeal hearing on whether the matter should be remitted to the same member or heard by the Tribunal differently constituted. The usual practice is to remit matters to the same Tribunal. The main exceptions to this practice have occurred in cases where findings dependent on an assessment of credibility have been questioned or found to be in error by the Appeal Panel, or where findings of procedural unfairness have been made by the Appeal Panel affecting an unrepresented party: see generally, Z v Director General, Department of Transport [2001] NSWADTAP 14.

53 This is not a case of these kinds. We note that if, on reconsideration, the taxpayers’ application as it relates to s 25(1) is not successful, there are other grounds of that application that will require consideration, in particular the application for relief pursuant to s 25(2) if there is a finding that s 25(1) is applicable. The present Tribunal, being already familiar with the details of the circumstances, is well placed to dispose of the further grounds.

54 Our present disposition is not to remit to a Tribunal differently constituted. However we will give leave to the appellant within 7 days to apply for a hearing in relation to this question, such application to be notified to the respondents. Unless we decide otherwise after hearing any such application, the following order is to be implemented by remitting the matter to the Tribunal as presently constituted, without the hearing of further evidence (as to which, see s 114(2)(b) of the Tribunal Act).

Order

1. Decision under appeal set aside.

2. Application for review remitted to the Tribunal, to be determined without the hearing of further evidence.

3. Leave to the Appellant to apply for further order as provided at paragraph [54] of the Reasons.