Commissioner of State Taxation v Marmota Ltd - [2023] SASC 134

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
COMMISSIONER OF STATE TAXATION v MARMOTA LTD
[2023] SASC 134
Judgment of the Honourable Justice McIntyre
27 September 2023
TAXES AND DUTIES – PAYROLL TAX – ASSESSMENT, COLLECTION AND RECOVERY OF PAYROLL TAX
TAXES AND DUTIES – PAYROLL TAX – OBJECTIONS, APPEALS AND REVIEWS
PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – GENERALLY
The applicant, the Commissioner of State Taxation brought a monetary claim against the respondent, Marmota Ltd, for unpaid payroll and penalty tax plus interest for the period 1 July 2010 to 20 June 2015 inclusive. The applicant alleges that this tax arises from a partnership between Marmota Ltd and Monax Mining Ltd, the respondent denies such a partnership existed at law and as such disputes the tax assessments.
On 19 September 2022, the applicant filed an interlocutory application seeking summary judgment; on 26 September 2022, the respondent filed an interlocutory application for a permanent stay of proceedings.
Held:
1. The application for a permanent stay of proceedings is dismissed.
2.The respondent’s defence constitutes a challenge to the validity or correctness of an assessment in respect of which rights of objection and appeal are conferred under Part 10 of the Tax Administration Act 1996 (SA) (‘TAA’). Section 100 of the TAA prevents those challenges being mounted in the context of debt recovery proceedings.
3.The proper course for ventilating such a challenge is limited to the avenue provided by Part 10 or alternatively the bringing of judicial review proceedings.

4. Section 100 of the TAA is not an unlawful privative clause as contended by the respondent.
Payroll Tax Act 2009 (SA) s 79; Taxation Administration Act 1996 (SA) ss 5, 8, 10, 11, 14, 41, 46, 64, 66, 82, 83, 85, 88, 89, 92, 94, 95, 98, 100, 115, Part 3, Part 7, Part 10; Uniform Civil Rules 2020 (SA) rr 143.1, 144.2, referred to.

Adelaide Brighton Cement Ltd. v Hallett Concrete Pty Ltd (2020) 137 SASR 117, applied.
T and S Liapis Pty Ltd v Commissioner of State Taxation [2015] SASC 63, distinguished.

Tomlinson v. Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; Johns v Australia Securities Commission [1993] 178 CLR 406; Viscariello v The Legal Practitioners Disciplinary Tribunal [2021] SASCFC 18 at [119-192]; Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118; Jago v District Court of NSW (1989) 168 CLR 23; Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476; Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602; Coal Miners’ Industrial Union v Amalgamated Collieries of Western Australia Ltd (1960) 104 CLR 437; R. v Hickman (1945) 70 CLR 598, considered.

COMMISSIONER OF STATE TAXATION v MARMOTA LTD
[2023] SASC 134
McIntyre J:
Introduction

On 22 June 2021, the Commissioner of State Taxation (‘the Commissioner’) brought a monetary claim against Marmota Ltd (‘Marmota’) for unpaid payroll and penalty tax plus interest for the period 1 July 2010 to 30 June 2015. The tax debt is said to arise from a partnership between Marmota and Monax Mining Ltd (‘Monax’). Marmota denies there was a partnership at law and disputes the tax assessments.
On 19 September 2022, the Commissioner filed an interlocutory application seeking summary judgment or, in the alternative, a determination of a question of law as a preliminary question.[1] On 26 September 2022, Marmota filed an interlocutory application for a permanent stay of proceedings.[2]
[1] FDN 33.
[2] FDN 37.
For the reasons that follow I grant the Commissioner’s application for summary judgment and dismiss Marmota’s application for a permanent stay of proceedings.
Background
Marmota came into being via an IPO process of Monax divesting itself of tenements prospective for uranium in late 2007.[3] Monax was a minerals exploration company primarily searching for large-scale iron-ore and copper deposits.[4] At the relevant times, Monax was listed on the Australian Stock Exchange (‘ASX’) mining sector.[5] Marmota is a uranium explorer listed in the ASX energy sector, independently of Monax.[6]
[3] FDN 18 at [5].
[4] FDN 18 at [6].
[5] FDN 18 at [6].
[6] FDN 18 at [6], [10].
On 1 July 2010, a partnership deed came into effect between Marmota and Monax.[7] The partnership was called the Groundhog Services Partnership and was registered.[8]
[7] FDN 10 at DJK-1 p 10.
[8] FDN 10 at DJK-2.
On 17 June 2011, Monax, through its lawyer Mr Shaw, gave notice to the Commissioner that Monax, Marmota and others may constitute a group for the purposes of the Payroll Tax Act 2009 (SA)[9] (‘PTA’).[10] Enclosed with this notice was an application for exclusion by Mr Shaw, on behalf of Monax, under s 79 of the PTA for the degrouping of Monax, Marmota and others (‘Degrouping Application’).[11]
[9] Payroll Tax Act 2009 (SA) (‘the PTA’).
[10] FDN 18 at CR-22 p 359.
[11] FDN 18 at CR-22 p 360.
The Degrouping Application was assigned to a tax officer who sought further information from Mr Shaw in August 2011.[12] On 10 September 2012, the Degrouping Application was assigned to a different taxation officer.[13] The new taxation officer sought further information from Mr Shaw between September 2012 and March 2013.[14]
[12] FDN 18 at CR-22 p 421.
[13] FDN 18 at CR-22 p 421.
[14] FDN 18 at CR-22 p 421.
On 13 March 2013, the taxation officer created an exclusion request report with respect to the Degrouping Application.[15] Nothing appears to have occurred following this report.[16]
[15] FDN 18 at CR-22 p 413.
[16] FDN 18 at CR-22 p 425.
On 2 April 2014, another tax officer was assigned to the matter who appears to have taken no action on the matter.[17]
[17] FDN 18 at CR-22 p 425.
On 30 March 2015, yet another tax officer was assigned to the case.[18] On 23 May 2016, this tax officer made recommendations on groupings.[19] This tax officer accepted the recommendations of the previous tax officer, subject to several amendments.[20] The recommendations conclude with “[g]iven the delays in making and communicating the decision to deny the exclusion, I recommend that no penalty tax or interest be applied to the reassessments.”[21]
[18] FDN 18 at CR-22 p 425.
[19] FDN 18 at CR-22 p 421.
[20] FDN 18 at CR-22 p 422.
[21] FDN 18 at CR-22 p 422.
On 29 June 2016, the Commissioner sent an email to Monax.[22] This email set out the history of the matter, explaining why there was such a significant delay in making the assessment, setting out the reasons for the assessment, stating that the Commissioner did not intend to seek payment for interest or penalty, and setting out the right to object.[23] Marmota submits that they first saw this email in 2021, when the company secretary of Monax sent it to them.[24]
[22] FDN 18 at [21], CR-4.
[23] FDN 18 at CR-4.
[24] FDN 18 at [21].
On or about 5 July 2016, the Commissioner made a Partnership Assessment in relation to the Groundhog Services Partnership.[25] The Partnership Assessment comprised an assessment for the period 1 July 2010 to 30 June 2015, a reassessment for the period 1 July 2010 to 30 June 2011 and the four subsequent assessments. The reassessment did not disclose what the previous assessment was, what had been assessed, what the amount was and what the difference between the previous and new assessment was. The assessments are said to be made under s 10(1) of the Taxation Administration Act 1996 (SA) (‘TAA’).
[25] FDN 10 at DKJ-3 Annexure A.
Monax’s response to the Partnership Assessment
On 5 August 2016, Mr Shaw submitted a new application for grouping exclusion.[26] On 8 September 2016, Mr Shaw and others met with a representative of the Commissioner to discuss the new Degrouping Application.[27] On 22 September 2016, Monax sent a letter to the Commissioner making submissions with respect to the Partnership Assessment.[28] The letter opens with “These submissions are made on behalf of Monax Mining Limited. We do not act for Marmota Energy Ltd.”[29]
[26] FDN 18 at CR-22 p 336.
[27] FDN 18 at CR-22 p 425.
[28] FDN 18 at [17], CR-22 p 326.
[29] FDN 18 at [17], CR-22 p 326 at [1].
This application was assessed on 16 May 2017. It was recommended that the Partnership Assessment should be maintained.[30] This was approved by an audit manager on 7 June 2017.[31]
[30] FDN 18 at CR-22 p 432.
[31] FDN 18 at CR-22 p 433.
On 2 August 2017, Monax lodged a notice of objection.[32]
[32] FDN 18 CR-22 p 324.
On or about 19 May 2021, Monax paid the Commissioner its share of the Partnership Assessment.[33]
[33] FDN2 at [11].
Marmota’s response to the Partnership Assessment
Marmota contends that the Partnership Assessment was never issued to it.[34] It submits that it first learnt of the Partnership Assessment from Mr Shaw on 12 September 2016.[35] Marmota states that Mr Shaw has never been engaged to act for them.[36]
[34] FDN 18 at [14].
[35] FDN 18 at [15].
[36] FDN 18 at [16].
On 22 September 2016, Marmota’s managing director, Dr Colin Rose, sent a letter to the Commissioner in relation to the Partnership Assessment, setting out some of their objections and requesting that the Commissioner reconsider.[37]
[37] FDN 18 at [17], CR-3.
On or about 20 June 2017, the Commissioner made assessments relating to Marmota (‘Marmota Assessment’).[38] These were called assessments, but Marmota submits that they were, in reality, reassessments of Marmota’s payroll tax obligations.[39]
[38] FDN 18 at [18]; FDN 10 at DKJ-3 Annexure B.
[39] FDN 19 at [13]-[14].
On or about 7 September 2017, Marmota paid $426.74 towards the Marmota Assessment, leaving the outstanding balance at $18,091.85.[40]
[40] FDN2 at [15].
Marmota sent letters dated 11 August 2017, 27 November 2017 and 8 January 2018 (collectively, ‘The Objection’).[41] Across these three letters, Marmota objects to the Partnership Assessment and sets out its reasons as to why the Partnership Assessment “is not just outlandish and absurd: it is manifestly false, patently contrived, unsubstantiated and is utterly rejected.”[42]
[41] FDN 18 at [24], CR-5.
[42] FDN 18 at CR-5 p 137.
On 9 April 2019, the Minister (the Treasurer) made a determination on the outcome of the Objection (‘the April letter’).[43]
[43] FDN 18 at CR-8 p 156.
On 23 August 2019, the Commissioner issued a letter of demand to Marmota demanding payment of $66,006.88: $18,091.85 for the Marmota Assessment and $47,915.03 for Marmota’s share of the Partnership Assessment.[44] Later that day, Marmota asked the Commissioner via email about the basis on which the demand had been given, as Marmota asserted that it had not received a response to the Objection.[45] The Commissioner replied later that same day stating that the April letter had been sent to Marmota’s lawyer, Mr Shaw. A copy of the April letter was enclosed.[46] Marmota emailed the Commissioner stating that this was the first time they had seen the April letter as Mr Shaw did not represent it.[47] Marmota stated that, if the Commissioner wished to rely on the April letter, it ought to be updated to reflect the current sending date. On 26 August 2019, the Commissioner informed Marmota via email that according to their records, the April letter was posted to Dr Rose, Marmota’s Chairman, and accordingly the Commissioner declined to vary the date and intended to rely upon the April letter.[48]
[44] FDN 18 at [27], CR-6.
[45] FDN 18 at [28], CR-7.
[46] FDN 18 at [29], CR-8.
[47] FDN 18 at [37], CR-9.
[48] FDN 18 at [38], CR-10.
That same day, Marmota again emailed the Commissioner contending that it had not received the April letter[49] and requesting that either proof be provided that the letter was sent to Dr Rose or that the Commissioner send the letter again with a contemporaneous date.[50] By email of 28 October 2019, the Commissioner stated that the circumstances did not warrant a further approach to the Treasurer.[51]
[49] FDN 18 at [26].
[50] FDN 18 at [39], CR-11.
[51] FDN 18 at [40], CR-12.
On 13 November 2019, the Commissioner issued a letter of demand to Marmota for both the Partnership Assessment and the Marmota Assessment.[52]
[52] FDN 18 at [41], CR-13.
On 28 November 2019, Marmota sent a letter in response to the demand, setting out Marmota’s concerns about the actions of, and delays by, the Commissioner.[53] That same day, the Commissioner sent an email to Marmota acknowledging receipt and stating that a response would be issued in due course.[54] No response has been provided to Marmota.[55]
[53] FDN 18 at [42], CR-14.
[54] FDN 18 at [43], CR-15.
[55] FDN 18 at [44].
On 13 January 2021, the Commissioner issued another letter of demand to Marmota.[56]
[56] FDN 18 at [45], CR-16.
In March 2021, there was further correspondence between the parties which culminated with the Commissioner issuing a final notice on 23 March 2021.[57] In this letter, the Commissioner states that Marmota may no longer commence an appeal within Part 10 Div 2 of the TAA to challenge the Partnership or Marmota Assessments as it was outside the relevant time period.[58]
[57] FDN 18 at [47], CR-17.
[58] FDN 18 at [48], CR-17 [14].
On 23 April 2021, Marmota replied to the Commissioner’s final notice, contesting the determination.[59] Marmota did not receive a response.[60]
[59] FDN 18 at [49], CR-18.
[60] FDN 18 at [51].
Procedural history
On 22 June 2021, the Commissioner commenced debt recovery action against Marmota in the District Court of South Australia to recover unpaid payroll tax, penalty tax and interest owing as a debt due to the Commissioner.[61]
[61] FDN 1.
On 30 September 2021, the Commissioner filed an interlocutory application seeking summary judgment or, in the alternative, for all or most of Marmota’s defence to be struck out due to a failure to disclose a reasonable defence.[62] This application was accompanied by a signed certificate under s 115(5) of the TAA (Certificate).[63] Section 115 of the TAA provides for evidentiary aids in legal proceedings. In particular, s 115(5) of the TAA states that a certificate signed by the Commissioner which includes any of a variety of specified matters “is admissible in any legal proceedings and, in the absence of evidence to the contrary, is proof of the matters stated in the certificate”. The Certificate in this matter states that the notices of assessment for both the Partnership Assessment and the Marmota Assessment were issued pursuant to s 8 of the TAA.
[62] FDN 9.
[63] FDN 10 at [7], DKJ-3.
On 7 March 2022, a Master of the District Court heard argument on the summary judgment application. On 1 April 2022, the Master provided his reasons for decision to the parties. The learned Master dismissed the application for summary judgment and transferred the proceedings to the Supreme Court.[64]
[64] FDN 23, FDN 24.
On 19 September 2022, the Commissioner filed another interlocutory application, now in the Supreme Court, seeking similar orders to the previous application.[65]
[65] FDN 33.
Following this, on 26 September 2022, Marmota filed an interlocutory application seeking a stay of proceedings.[66]
[66] FDN 37.
The legislative scheme
The purpose of the TAA is to make general provisions for the administration and enforcement of State taxation laws.[67] Part 3 of the TAA deals with the assessment of tax liability by the Commissioner. Part 7 of the TAA deals with the collection of tax by the Commissioner.
[67] Tax Administration Act 1996 (SA) s 7 (‘TAA’).
The Commissioner’s proceedings are brought under s 41 of the TAA which provides that the Commissioner may recover the whole or a part of any unpaid amount as a debt plus any interest accrued. Section 41 is in Part 7 of the TAA.
Section 46 of the TAA provides that a decision under Part 7 of the TAA is “non-reviewable”. Section 5 of the TAA defines “non-reviewable” as follows:
If a provision of the Act provides that a decision is a non-reviewable decision, the decision cannot be the subject of objection or appeal under Part 10 and no court or administrative review body has jurisdiction or power to entertain any question as to the validity or correctness of the decision.
The Commissioner contends that the only avenue to challenge the validity or correctness of an assessment is by an appeal under Part 10 of the TAA[68] which sets out the process for objections and appeals against, inter alia, assessments. In particular the Commissioner relies on s 100(1) of the TAA which provides that:
The validity or correctness of an assessment or any other decision in respect of which rights of objection and appeal are conferred under this Part is not open to challenge in any proceedings other than proceedings by way of objection or appeal under this Part.
[68] TAA (n 67) s 100.
Marmota was dissatisfied with the Partnership assessment and the Marmota assessment. It lodged the objection with the Minister, in 2017 and 2018, under s 82 of the TAA which provides:
A person who is dissatisfied with—
(a) an assessment (other than a compromise assessment); or
(b) a decision under Part 4 concerning a refund or an application for a refund of tax; or
(c) any other decision of the Commissioner under a taxation law that is not declared to be a non-reviewable decision,
may lodge a written notice of objection with the Minister.
The grounds of an objection must be stated fully and in detail in the notice of objection.[69] The objector bears the onus of proving its case.[70] The Minister must give notice of the determination in accordance with s 89 of the TAA as follows:
(1) The Minister must give written notice to the objector of the determination of the objection.
(2) The Minister must include in the notice the reasons for the Minister’s decision on the objection.
[69] TAA (n 67) s 83.
[70] TAA (n 67) s 85.
If the person is dissatisfied with the Minister’s determination, or the Minister fails to make a determination within time, s 92 provides:
A person who has made an objection may appeal to the Supreme Court if—
(a) the person is dissatisfied with the Minister's determination of the objection; or
(b) 90 days (not including any period of suspension under section 88) have passed since the objection was lodged with the Minister and the Minister has not determined the objection and served notice of the determination on the person.
The time limits with which appeals are to be lodged are set out in s 94 of the TAA as follows:
(1)      An appeal must be made by a person not later than 60 days after the date of service on the person of notice of the Minister's determination of the person's objection.
(2)      However, if—
(a) 90 days (not including any period of suspension under section 88) have passed since the person's objection was lodged with the Minister; and
(b)      the Minister has not determined the objection and served notice of the determination on the person;
the person may appeal at any time provided that the Commissioner is given not less than 14 days written notice of the person's intention to make the appeal.
Section 95 provides that the Supreme Court has a discretion to allow a person to appeal after the end of the 60-day period but not to do so later than 12 months after the date of service on the person of notice of the Minister's determination of the person's objection.
Marmota’s defence
Marmota denies liability to pay the debt claimed by the Commissioner and seeks to challenge the Partnership Assessments and the Marmota Assessments[71] on the following grounds:
·The Groundhog Services Partnership was not a partnership at law or for any purposes of the PTA.[72]
·The Groundhog Services Partnership, Monax and Marmota were not properly grouped under the PTA.[73]
·The Partnership Assessments were not issued properly under the TAA, including because they were not authorised pursuant to s 10(1) of the TAA; were not in an approved form pursuant to s 14(1)(b) of the TAA; were not made by the Commissioner pursuant to s 8 and 14 of the TAA; other issues as to form regarding whether they were reassessments or assessments.[74]
·The Marmota Assessments were not issued properly under the TAA for largely the same reasons as the Partnership Assessments.[75]
·Marmota filed the Objection. The Minister sent the objection outcome to Mr Shaw who had acted for Monax and not Marmota. Accordingly, Marmota contends that the Minister failed to give written notice within the meaning of s 89(1) of the TAA. Marmota also says that the Minister improperly delegated the communication function with respect to the Objection.[76]
·Finally, Marmota alleges that insofar as the Commissioner seeks to rely on the assessments, it is relying on its own delay as to any appeal being out of time.[77]
[71] FDN 7 [3], [8], [18] and [19].
[72] FDN 7 [7].
[73] FDN 7 [7].
[74] FDN 7 [10].
[75] FDN 7 [14].
[76] FDN 7 [14].
[77] FDN 7 [19].
Marmota’s Application for a permanent stay

Marmota contends that a permanent stay of proceedings should be ordered because the way the Commissioner has brought this case is oppressive and an abuse of process. In addition, Marmota contends that it is prejudiced by the Commissioner’s delay prior to commencing these proceedings.
With respect to the Commissioner’s conduct after the commencement of proceedings, Marmota submits that the Commissioner’s present application for summary judgment is an abuse of process because it is, in effect, a relitigation. Before this matter was transferred to the Supreme Court, an Auxiliary Master of the District Court dismissed an application for summary judgment which was sought on similar terms. Marmota does not contend that this application raises the issue of res judicata, issue estoppel or Anshun estoppel. Marmota acknowledges that this application is in a different court. However, Marmota characterises the application as relitigation and refers to the following passage from the judgment of French CJ, Bell, Gageler and Keane JJ in Tomlinson v. Ramsay Food Processing Pty Ltd:[78]
Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.
Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel.
[78] Tomlinson v. Ramsay Food Processing Pty Ltd (2015) 256 CLR 507 [25] – [26] (‘Tomlinson’).
Marmota’s argument regarding abuse of process is therefore twofold. First, it is raised in support of Marmota’s interlocutory application for a permanent stay of the proceedings. Second, abuse of process is raised in relation to FDN 33, the Commissioner’s application for summary judgment. I will consider the arguments in relation to the Commissioner’s application for summary judgment both in the context of the application for a permanent stay and in relation to the application itself.
The Commissioner submits that a permanent stay of proceedings should not be granted. It is submitted that insofar as Marmota asserts prejudice arising from the passage of time since the tax periods (including lack of records and unavailable witnesses), those matters are relevant only to a challenge to the validity or correctness of the assessment and may not be pursued in these proceedings.
The Court has an inherent jurisdiction to stay proceedings. The general principles that inform the exercise of power to stay proceedings are well settled. It is an exceptional remedy designed to address litigation that is an abuse of the court’s processes in the traditional sense, or which would otherwise be productive of injustice or forensic unfairness to one party should the litigation be allowed to continue.[79]
[79] Walton v Gardiner (1992) 177 CLR 378 at [392]- [393] (‘Walton’).
Abuse of process generally falls into one of three categories namely:
·The court’s procedures are invoked for an illegitimate purpose;
·The use of the court’s procedures is unjustifiably oppressive to one of the parties; or
·The use of the court’s procedures would bring the administration of justice into disrepute.[80]
[80] Rogers v R (1994) 181 CLR 251 (‘Rogers’).
It is not contended that the issue of these debt recovery proceedings was for an illegitimate purpose or that the use of the court’s procedures in the circumstances of this matter would bring the administration of justice into disrepute. Rather, Marmota contends that the issuing and continuation of these proceedings is oppressive.
Marmota’s position is summarised in its written submissions[81] as follows:
The Applicant repeatedly fails to recognise, to the point of being myopic, that much more underpins the Respondent’s case for a permanent stay than the fundamentally incongruous position taken by the Applicant. Namely, that in pursuit of the revenue of the State, whether the Applicant may ignore the basic machinery provisions of the TAA for assessing taxes and notifying taxpayers of such matters and decisions on objections and seek to cure failures in the Applicant’s own implementation of those provisions by relying on a privative clause in the legislation and/or a prima facie evidence clause.
As has been repeatedly submitted in this matter, and what is submitted in support of the permanent stay is the whole of the sorry and woeful history of this matter. It started with a voluntary disclosure in June 2011, it was followed by inordinate and unexplained delays of years on the part of the Applicant and has culminated in the Applicant seeking to run yet another summary judgment application. In the situation where the Applicant was unsuccessful on the first application, when there are no new grounds and no new basis for doing so being put forward in support of the second application and whilst now complaining about the reasoning and other aspects of the decision, simply did not appeal that decision.
[81] FDN 53.
Marmota complains, with justification, about the delays on the part of the Commissioner in making the assessments and in bringing these proceedings. Marmota contends that these delays were compounded by the delay on the part of the Minister in determining Marmota’s objection. The other issues raised by Marmota in support of its permanent stay application go to the validity and propriety of the Commissioner’s actions. Marmota submits that the Commissioner’s conduct and the lapse of time since the business operations which underpin the grouping decision took place entitle it to a permanent stay.
Consideration of this application requires a balance to be struck between the interests of the community in relation to the collection of taxes and those of the individual company in receiving a fair trial. The onus of establishing that a permanent stay ought to be granted rests with Marmota. Marmota must demonstrate that the matters it complains of are sufficient to amount to an abuse of process warranting a permanent stay of these proceedings. I do not consider that Marmota has discharged this onus for reasons that I will deal with in the context of the Commissioner’s application for summary judgment.
Should the application for summary judgment be stayed as an abuse of process?
Marmota contends that FDN 33 is an abuse of process because it is a second application for summary judgment; a prior application for summary judgment having been dismissed on 1 April 2022 (FDN 9) by a Master of the District Court. The present application does not contain any new grounds.
The Commissioner on the other hand contends that, whilst circumstances may not have materially changed, the application for summary judgment does not amount to an abuse of process. The dismissal of the first application did not engage in an assessment of, nor did it determine, the merits of that application.
In dismissing the application for summary judgment, Auxiliary Master Roder said at [10]-[11]:
I cannot say that any of the propositions advanced before me are incapable of establishing a reasonable basis for defending the claim. I make it clear that I do not find that s 100 of the TAA is invalid – or ineffective. I simply say that there is an argument. There may also be an argument in respect of the stay. There are many arguments in respect of the operation and construction of privative clauses. They go both ways. It seems to me that this matter should proceed to trial and to full argument based on all of the evidence that is admissible.
For those reasons, I dismiss FDN 9.
Auxiliary Master Roder transferred the proceedings to the Supreme Court and invited the parties to consider reagitating interlocutory applications where the validity of the legislative provisions and their operation could be properly considered.[82] The Commissioner says that in those circumstances there was little utility in appealing Auxiliary Master Roder’s orders and that the preferable course was the course that has been taken by bringing this application.
[82] FDN 23 at [12].
In my view, it is not an abuse of process for the Court to hear and determine the application for summary judgment. The application has not been brought for an illegitimate purpose nor is it likely to bring the administration of justice into disrepute. Further, the application is not unjustifiably oppressive to Marmota. Auxiliary Master Roder did not evaluate the merits of the defence, nor did he evaluate the merits of Marmota’s argument in respect of the validity of s 100 of the TAA. He did not rule upon the substance of the dispute.
The Commissioner’s application for summary judgment
The Commissioner seeks summary judgment under Uniform Civil Rule (UCR)143.1(2) which provides:
143.1—Judgment for failure to disclose basis
…
(2) The Court may grant judgment in favour of an applicant in an action on the ground that no reasonable defence in the case of a claim, or basis to contest the application in the case of an originating application, is capable of being disclosed.
In the alternative the Commissioner seeks summary judgment under UCR144(2)(1)(a) which relevantly provides:
144.2—Summary judgment
(1) The Court may, on application by a party, give summary judgment in favour of an applicant—
(a) on a claim if there is no reasonable basis for defending the claim;
The Commissioner contends that the filed defence is entirely directed to challenging the validity or correctness of the Partnership and Marmota assessments. The Commissioner says that s 100 of the TAA prevents those challenges being pursued in the context of debt recovery proceedings. It is said that there is therefore no reasonable basis for the defence succeeding and the Commissioner should have summary judgment.
Marmota contends that there is a reasonable basis for defending the claim in view of the issues raised in its defence concerning the validity of the Partnership and Marmota assessments and the manner in which the Commissioner has failed to comply with the TAA. It is further contended that these issues are not appropriate to be determined on a summary basis.
Applicable principles
The Commissioner’s application under both UCR 143.1(2) and UCR 144.2(1) requires the Commissioner to establish that Marmota has no reasonable basis for defending the claim brought by the Commissioner. Whilst there is a slight difference in language there is no practical difference between the tests under those two rules.
The principles applicable to an application for summary dismissal are well settled. The approach to be taken is conveniently summarised by Doyle JA in Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd:[83]
By way of summary of the approach articulated in Spencer v Commonwealth, it can be said that the power to determine a claim summarily should not be exercised lightly. Exercise of the power requires a practical assessment of whether the applicant has real, as opposed to merely fanciful, prospects of success. While the Court need not be satisfied that the claim is hopeless or bound to fail, nevertheless it must be cautious not to do a party injustice by summarily determining an action, particularly where there are disputed issues of fact or law or mixed fact and law, merely because the Court considers that the claim is unlikely to succeed. However, beyond these very general guidelines, the Court should focus upon the words used in the rules and avoid applying any judicial gloss.
Related to the requirement that the Court undertake a “practical” assessment is the notion that the Court should not embark upon a “mini trial” of the claim. Rather, the claim should be assessed in a summary manner, while being cognisant of the incomplete nature of the evidence upon which the Court’s decision must be based. Adversarial argument may assist, and indeed may result in the emergence of a sufficiently clear answer to a complex issue that summary judgment is appropriate. On the other hand, the need for prolonged argument may be indicative of a reasonable basis for the claim.
[Citations omitted]
[83] Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117 at [59] – [60] (‘Adelaide Brighten Cement’).
Accordingly, in determining whether there is a “reasonable basis” for defending the claim I need not be satisfied that the defence is “hopeless” or “bound to fail”.[84] The test requires a practical consideration or assessment of whether there is a reasonable or real prospect of defending the action successfully.
[84] Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 (‘Spencer’).
Basis of Marmota’s defence
The Commissioner says that Marmota’s complaints[85] in relation to the partnership, grouping, and the issuing of the Partnership and Marmota assessments are questions about the correctness of the assessments.
[85] FDN 7 [7].
The issues raised in relation to the formal requirements of the assessments[86] are said to go to the validity of the assessment. Specifically, the Commissioner submits:
·there is nothing to suggest that a mistake in identifying the source of the power i.e. a reference to s 10 as opposed to s 11 invalidates the assessment.[87]
·the words “in a form approved by the Commissioner” in s 14 (1)(b) are not a requirement for there to be a prescribed form.[88]
·whilst accepting that the Commissioner did not sign the assessment, there is an expressed power for the Commissioner to delegate powers or functions under the TAA.[89] Deputy Commissioners of State Taxation have the same powers and functions as the Commissioners.[90]
·the presumption of regularity operates in the absence of proof to the contrary; the exercise of power is presumed to be regularly made.[91]
[86] FDN 7 [10], [14].
[87] Johns v Australia Securities Commission [1993] 178 CLR 406 (‘Johns’).
[88] T and S Liapis Pty Ltd v Commissioner of State Taxation [2015] SASC 63 (‘Liapis’).
[89] TAA (n 67) s 66.
[90] TAA (n 67) s 64(3).
[91] Viscariello v The Legal Practitioners Disciplinary Tribunal [2021] SASCFC 18 at [119-192] (“Viscariello”).
Marmota’s complaints about the Objection and the manner in which it was determined and communicated[92] are said to be irrelevant to the debt.
[92] FDN 7 at [19].
In summary, the Commissioner says that each of the allegations Marmota raises in its defence concerning its liability to pay tax (including whether it was properly grouped for payroll tax purposes and whether the tax was properly assessed) are a challenge to the validity or correctness of an assessment or other decision in respect of which rights of objection and appeal are conferred under Part 10 of the TAA. It is said that these are collateral issues to the debt recovery proceedings and are not permitted to be ventilated in these proceedings.
The Commissioner contends that Marmota’s submissions in response to this application are underpinned by two assumptions. First that failure to comply with the TAA renders the assessments invalid and second that Marmota is permitted to mount collateral challenges to the assessments within the Commissioner’s debt recovery proceedings.
The basis of the Commissioner’s application for summary judgment is the operation of Part 10 of the TAA. The Commissioner says that s 100 provides a single avenue for any challenge to the validity or correctness of an assessment. It is contended that Marmota has not availed itself of that avenue and has not provided an explanation. Finally, the Commissioner states as follows:
The Respondent has, at times, asserted that it is not prohibited from mounting a collateral attack. Whilst that is true in a general sense, it fails to have any regard to the statutory scheme within which the proceedings were commenced. It is plain that to the extent that the Respondent wishes to challenge the validity of the assessments or the basis of the assessments, any such challenge could only be brought by judicial review proceedings or an appeal, not by way of collateral attack in the within debt recovery proceedings: see T&S Liapis Pty Ltd v Commissioner of State Taxation [2015] SASC 63 at [117]
Marmota disputes the Commissioner’s characterisation of its defence and the limits the Commissioner contends apply. Marmota also relies on the decision of Blue J in Liapis[93] for the proposition that there is “no right of objection and no right of appeal is conferred in respect of a purported assessment that does not amount to an assessment at law and has no legal effect”. Marmota says that it has repeatedly identified inadequacies in the purported notices of assessment and contends:
It is not a matter of validity; if what is issued does not comply with legislative requirement, it is a nullity. The respondent has repeatedly highlighted this consequence based on the foregoing. If the documents are a nullity as described in that quote, then what more is there to assert?[94]
[93] Liapis (n 88) at [115].
[94] FDN 53 at [15].
Marmota further disputes the Commissioner’s submission that the proper process for ventilating a challenge to the assessment is limited to Part 10 or judicial review and says that nothing in Liapis states that a collateral attack may not be used rather than the bringing of judicial review proceedings.
How may a challenge to an assessment be brought?
Failure to comply with the TAA does not necessarily render the assessments invalid as is made clear in the High Court decision in Project Blue Sky v Australian Broadcasting Authority.[95] Both parties provided written submissions on that decision[96].
[95] Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 (‘Blue Sky’).
[96] FDN 52, FDN 53.
Blue Sky was concerned with the determination of an Australian Content Standard (‘the Standard’) by the Australian Broadcasting Authority (‘ABA’). The determination was required to be consistent with the Broadcasting Services Act 1992 (Cth.) (‘BSA’) and the Regulations under that Act. The BSA required, amongst other things, that the ABA perform its functions in a manner consistent with Australia’s obligations under any agreement between Australia and a foreign country. The appellants contended that the Standard was invalid because it was inconsistent with aspects of a trade agreement between Australia and New Zealand and hence the ABA had not complied with certain provisions of the BSA.
The majority, McHugh, Gummow, Kirby and Hayne JJ, stated that:
An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied there is not even a ranking of relevant factors or categories to give guidance on the issue.[97]
[97] Blue Sky (n 95) at [91].

The majority went on to say that the preferred or better test for determining the issue of validity was “whether it was a purpose of the legislation that an act done in breach of the provision should be invalid”. This was contrasted with tests in which the Court looks at whether compliance with the provision is mandatory or directory and whether, in the case of a directory compliance, there has been substantial compliance.[98] The majority considered the whole of the statutory scheme including the nature of the obligation and the consequences for the public if the obligation is not complied with in reaching its conclusion that whilst the BSA imposed a legal duty on the ABA, an act done in breach of that duty was not invalid.[99]
[98] Blue Sky (n 95) at [93]
[99] Blue Sky (n 95) at [99]
The issues raised by Marmota as to the assessments are complex. They require careful consideration in the context of the statutory scheme and the purpose of the TAA. Marmota seeks to draw a distinction between a challenge to the validity or correctness of an assessment and a challenge that asserts the documents the commissioner relies upon do not amount to assessments at law. This is a fine distinction. The force or otherwise of Marmota’s contention that the assessments are a nullity is not clear on the material before me. These are not matters that ought to be resolved on a summary basis. However, the question that is raised by the Commissioner’s summary judgment application is whether it is appropriate for those issues to be resolved in the context of these debt collection proceedings. As outlined above Marmota relies upon Liapis and upon the contention that, because what was issued does not comply with the requirements of the TAA, it is a nullity and therefore there is no right of appeal available to it under s 92 of the TAA. Marmota contends that, in consequence, there is no reason why these matters cannot be raised by way of defence in these proceedings. If this is permissible, then the requisite consideration could take place in the context of a full trial of the matter (subject of course to Marmota’s application for a permanent stay).
Liapis was an appeal in respect of land tax assessments. It was instituted under Part 10 if the TAA. The Commissioner of State Taxation served notice of land tax assessments. The taxpayer lodged an objection against the assessments. The Minister confirmed the assessments. The appeal was lodged under s 92(a) of the TAA.
The taxpayer contended, amongst other things, that the notice served by the Commissioner did not comprise notice of land tax assessments within the meaning of the TAA. The Commissioner disputed that contention and also contended that it was not open to the taxpayer to rely, in an appeal against an assessment, on the ground that there was no assessment. Justice Blue noted that these contentions raised an issue of construction. Specifically, whether the reference in ss 82, 88, 92 and 98 of the TAA to “assessment” means an assessment at law or whether it can also include a purported assessment. It was in this context that Blue J found:
The making of an assessment and issue of notice of assessment by the Commissioner (or indeed by the Minister on objection) is a purely administrative act. If the Commissioner undertakes an act or issues a document that does not amount to an assessment, it has no legal effect as an assessment. It is what is sometimes described as a nullity. In this respect, the position is to be contrasted with a judgment of a court (all superior courts and most inferior courts) that is later held to have been made outside jurisdiction, which judgment is not a nullity and may be the subject of appeal on the ground, inter alia, that it was made without jurisdiction.
On the proper construction of the Taxation Administration Act, the reference in sections 82 and 92 to an assessment is to an assessment at law and no right of objection and no right of appeal is conferred in respect of a purported assessment that does not amount to an assessment at law and has no legal effect.[100]
[100] Liapis (n 88) at [114] – [115].
Justice Blue then found that it was not open to the taxpayer Liapis to contend, on an appeal against an assessment under Part 10, that there was no assessment.[101] Justice Blue then went on to say that:
It would have been open to Liapis to bring judicial review proceedings seeking a declaration that the purported assessment does not constitute an assessment in law and consequential prerogative relief. Liapis has not done so and did not raise the point on appeal until shortly before the hearing of the appeal.[102]
[101] Liapis (n 88) at [116].
[102] Liapis (n 88) at [117]
Marmota did not seek judicial review in this matter. It raised objections with the Commissioner and the Minister complaining of various failures on the part of the Commissioner to comply with the TAA. When it did not receive a satisfactory, or in some cases any, response Marmota did not take any action to advance its objections. It was only when the Commissioner issued these proceedings to collect the debt based on those assessments that Marmota sought to advance its objections in the form of its defence. Marmota contends on the basis of Liapis that it was precluded from raising the objections under Part 10 because the objections render the assessments a nullity. I note that this view did not preclude Marmota from lodging the Objection with the Minister.
I consider that Blue J’s decision as to the consequences of an appeal against a purported assessment is distinguishable. Justice Blue’s consideration arose in the context of a complaint raised “shortly before the hearing of the appeal” that there was no assessment at law due to non-compliance with the TAA. The dispute in Liapis focussed upon that argument in the context of a consideration of the right to object under s 82 and to appeal under s 92 of the TAA. Justice Blue was not asked to consider the operation of s 100. Further the scenario he was dealing with, an appeal under Part 10, was different to the situation that obtains in the present matter. Here Marmota has not appealed under Part 10, nor has it sought judicial review of the assessments it contends are unlawful. Rather Marmota raises the issues in proceedings in which the Commissioner seeks enforcement of those assessments.
Subject to s 100, judicial review may be available to challenge certain decisions with respect to assessments under the TAA. It will turn on the nature of the challenge to the decision. An assessment including a purported assessment may be an administrative decision capable of challenge by way of judicial review proceedings. It is unnecessary for me to determine that issue.
The act of making a purported assessment may be invalid such that it is a nullity; on the other hand, it may not. However, to reach that view there must be a proper ventilation of reasons for the asserted invalidity.[103] As outlined above, this is a complex issue. At present Marmota has done no more than assert this is the case. Determination of that issue may require evidence; it will certainly require analysis in the context of the statutory scheme and the purpose of the TAA as discussed above. If an act by the Commissioner is said not to amount to an assessment at law, that appears to me to be a challenge to its validity. The plain language of s 100 provides an express statutory instruction for the Court to hear and determine challenges to the validity or correctness of an assessment within Part 10 proceedings. These debt recovery proceedings are not Part 10 proceedings. It follows that it is not permissible for Marmota to raise those issues by way of a collateral challenge in these proceedings. Accordingly, if s 100 is valid there is no reasonable basis for Marmota’s defence of these proceedings.
[103] Blue Sky (n 95).
Is s 100 an unlawful privative clause?
Marmota contends that s 100 is an invalid privative clause that seeks:
…
to oust the jurisdiction of the Courts and immunise certain decisions of the executive from review. The effect of the provision is to prohibit a state court to depart to a significant degree from the ordinary methods and standards of the judicial process and in effect from directing a state court in the performance of the judicial function to arrive at a particular outcome (sic). State legislatures are prohibited from enacting such laws and consequently they are ineffective where they require such conduct from a court.[104]
[104] FDN 20 at [54].
Generally, clauses seeking to make orders, awards, or other determinations final and those forbidding courts granting traditional judicial review remedies are regarded as privative clauses. In addition, clauses that limit judicial review to stipulated grounds or those that prescribe unreasonable time limits on applying for judicial review may also amount to privative clauses.[105]
[105] Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476 at [174 -176] (‘S157/2002’).
Privative clauses are not necessarily invalid. Parliament may validly enact a privative clause to limit the circumstances in which an administrative decision can be challenged.[106] Typically, privative clauses are construed in their statutory context and often allow a party to challenge a decision for jurisdictional error.
[106] Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602 at [630] (‘Darling Casino’); S157/2002 (n 105) at [7].
The “classical” or “authoritative”[107] statement concerning privative clauses and their interpretation is to be found in R. v Hickman; Ex parte Fox & Clinton[108]. In particular, Dixon J determined that a privative clause will only cure jurisdictional error if the decision is a bona fide attempt to exercise the power, relates to the subject matter of the regulation and is reasonably capable of reference to the power given to the body.[109] Accordingly, it can be seen that to be protected by a privative clause a decision maker must act in good faith, not stray too far from the subject matter of the legislation and the decision must not, on its face, exceed the decision maker’s power.
[107] Coal Miners’ Industrial Union v Amalgamated Collieries of Western Australia Ltd (1960) 104 CLR 437 at [455] (‘Coal Miners Industrial Union’).
[108] R. v Hickman; Ex parte Fox & Clinton (1945) 70 CLR 598 (‘Hickman’).
[109] Hickman (n 108) at [617].
In Plaintiff S157/2002 v Commonwealth[110] the plurality, Gaudron, McHugh, Gummow, Kirby and Hayne JJ restated and redefined Hickman:
It follows from Hickman, and it is made clear by subsequent cases, that the so-called “Hickman principle” is simply a rule of construction allowing for the reconciliation of apparently conflicting statutory provisions. Once this is accepted, as it must be, it follows that there can be no general rule as to the meaning or effect of privative clauses. Rather, the meaning of a privative clause must be ascertained from its terms; and if that meaning appears to conflict with the provision pursuant to which some action has been taken or decision made, its effect will depend entirely upon the outcome of its reconciliation with that other provision.
[110] S157/2002 (n 105).
I do not consider that, properly construed in the context of the TAA, s 100 is an invalid privative clause that displaces the jurisdiction of the Supreme Court of South Australia to review tax assessments. The language of s 100 stands in stark contrast to invalid Hickman style provisions which provide “except as otherwise provided in this section, a decision of the authority under this act is final and is not subject to appeal or review.”[111] Section 100 identifies the way in which the validity or correctness of an assessment under the TAA can be challenged and identifies the limits on the circumstances of that challenge. It allows an appeal to be commenced in the Supreme Court within reasonable time frames. The Court has discretion to extend those time frames within reasonable limits. Section 100 does not purport to exclude review for jurisdictional or any other error.
[111] Hickman (n 108).
Does the Commissioner’s delay warrant a permanent stay of these proceedings?
I have found that the proper process for ventilating a challenge to an assessment is Part 10 proceedings under the TAA or possibly a judicial review and that it is not appropriate for Marmota to raise those issues by way of a collateral challenge in these debt recovery proceedings. In those circumstances I must deal with the remaining basis of Marmota’s application for a permanent stay of these proceedings; that of delay.
Marmota points to the Commissioner’s delay in this matter following the lodgement of the Degrouping Application in June 2011. The delay appears, at least in part, to be due to inefficiencies and changes in staff within the Commissioner’s office. It was not caused by Marmota. Marmota says that the Commissioner fails to recognise the effect of that delay following the initial voluntary disclosure until the making of decisions in 2016 and 2017, compounded by the further delay of the Minister in considering the Objection and thereafter the failure of the Commissioner in responding.
Whilst I accept that Marmota’s complaints about aspects of the delay are justified, delay of itself is not sufficient to justify a permanent stay of proceedings in the absence of a clear articulation of the effect of that delay upon the fairness of the proceedings.[112] Marmota has failed to do this.
[112] Jago v District Court of NSW (1989) 168 CLR 23 (‘Jago’).
Marmota became aware of the Partnership Assessment in September 2016. Thereafter Marmota wrote to the Commissioner contesting various aspects of the Partnership and Marmota Assessments. Marmota lodged a written notice of objection with the Minister under s 82 of the TAA comprised of three letters dated 11 August 2017, 27 August 2017, and 8 January 2018. The Minister determined the Objection on 9 April 2019. Whilst there is some doubt as to when Marmota was served with this, for present purposes, it is unnecessary to resolve the issue of service. At the latest it appears that Marmota became aware of the Minister’s decision on or about 23 August 2019 and was therefore on notice of the determination.
The Commissioner did not issue the proceedings expeditiously. There is a largely unexplained delay of nearly two years from the August 2019 correspondence to the issue of proceedings in June 2021. Marmota takes issue with the Commissioner’s characterisation of this period as a delay attributable to both parties rejecting that proposition and saying:
The Respondent, on receiving communications from the Applicant about an outstanding debt on 23 August 2019, responded promptly to those communications and received a reply on 28 November 2019 that the Applicant would provide a response: that response was never received..[113]
[113] FDN 53 at para 5.2.3.
I reject this submission. Whilst the Commissioner’s failure to respond and the delay in instituting proceedings is unsatisfactory to say the least, the delay is not one-sided.
Marmota did not exercise its right of appeal to the Supreme Court under s 92(b) of the TAA notwithstanding the Minister did not determine the Objection within 90 days of the lodgement of Marmota’s Objection. Having become aware of the Minister’s decision at the latest on or about 23 August 2019, Marmota did not exercise its right of appeal under s 92(a). Marmota could have proceeded to ventilate issues concerning the validity of the Partnership and Marmota Assessments under Part 10 of the TAA at any time within 60 days after it became aware of the notice or, with leave of the Court, within 12 months of the date it became aware of the notice. Likewise, Marmota has arguably had available to it the option to pursue judicial review proceedings and it has chosen not to do so. Instead, Marmota entered into correspondence with the Commissioner, sat back and took no further action notwithstanding the relevant time limits. It is not clear whether this was due to inadvertence or a forensic decision. Regardless, Marmota did not do so and now seeks to raise these collateral issues relating to validity of the assessments as part of its defence of these proceedings. I have found that this is not permissible.
A proper course for ventilating a challenge to an assessment is under Part 10 of the TAA. Having commenced that process by lodging an Objection, Marmota effectively abandoned it by failing to appeal in the absence of a decision by the Minister and, once it became aware of the Minister’s decision, failing to appeal that decision to the Supreme Court. Alternatively, Marmota could have instituted judicial review proceedings. Marmota has done neither. In those circumstances, I decline to grant a permanent stay of these proceedings.