Compass Group Education Hospitality Services Pty Ltd v Commissioner of State Revenue (CSR) - [2021] QCA 98

SUPREME COURT OF QUEENSLAND

CITATION:

Compass Group Education Hospitality Services Pty Ltd & Anor v Commissioner of State Revenue [2021] QCA 98

PARTIES:

COMPASS GROUP EDUCATION HOSPITALITY SERVICES PTY LTD
ABN 60 129 203 998
(first appellant)
COMPASS GROUP HEALTHCARE HOSPITALITY SERVICES PTY LTD
ABN 79 114 320 615
(second appellant)
v
COMMISSIONER OF STATE REVENUE
(respondent)

FILE NO/S:

Appeal No 7920 of 2020
SC No 1026 of 2019

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2020] QSC 184 (Holmes CJ)

DELIVERED ON:

11 May 2021

DELIVERED AT:

Brisbane

HEARING DATE:

25 November 2020

JUDGES:

Morrison and Philippides JJA and Williams J

ORDERS:

1. Appeal dismissed.

2. The appellants to pay the respondent’s costs on the standard basis.

CATCHWORDS:

TAXES AND DUTIES – PAYROLL TAX – OBJECTIONS, APPEALS AND REVIEWS – where the appellants who used their own employees to provide services to charitable institutions – where charitable institutions are exempt from payroll tax pursuant to s 14(2) of the Payroll Tax Act 1971 (Qld) (PTA) – where the respondent assessed the appellants as being liable to pay payroll tax on wages paid to their employees, whose services had been provided to the charitable institutions – where the trial judge disallowed the appeal and held that Div 1B of the PTA has no application to common law employers – where the appellants contend that Div 1B of the PTA applies to a common law employer and the dictionary definition of “wages” does not apply in respect of an employment agency contract, therefore the appellants are entitled to an exemption under s 13J(2) of the PTA, with the consequence that no liability for payroll tax arises – where the respondent contends that the “only sensible construction” of the Employment Agent Provisions in Div 1B within the context of the PTA as a whole is one which does not apply those provisions to employer/employee relationships and Div 1B, in any event, does not cover the field of liability to payroll tax for employment agents – whether Div 1B of the PTA applies to a common law employer in circumstances where an employment agency contract exists, under which the employment agent provides the services of its employees to a client – whether if Div 1B of the PTA extends to a common law employer, whether the dictionary definition of “wages” applies to remuneration paid by an employment agent to its employee/service provider so as to make the employment agent liable for payroll tax – whether s 13J(2) of the PTA has the effect that the remuneration paid by the employment agent to its employee/service provider is exempt from the application of the deemed wages provision in s 13J(1)

Acts Interpretation Act 1954 (Qld), s 14A
Payroll Tax Act 1971 (NSW), s 3C
Pay-roll Tax Act 2007 (NSW), s 36A, s 40
Payroll Tax Act 1971 (Qld), s 8A, s 9, s 10, s 11, s 12, s 13G, s 13H, s 13I, s 13J, s 13K, s 13L, s 13LA, s 14, s14A, s 15, s 15A, s 131
Pay-roll Tax (Harmonisation) Amendment Act 2008 (Qld), s 131

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41, followed
Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130; [2009] FCAFC 185, followed
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55, followed
JP Property Services Pty Ltd v Chief Commissioner of State Revenue (2017) 106 ATR 639; [2017] NSWSC 1391, considered
Moore Park Gardens Management Pty Ltd v Chief Commissioner of State Revenue (2006) 62 ATR 628; [2006] NSWCA 115, cited
National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 276 FCR 382; [2020] FCA 1016, cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; (1998) 72 ALJR 841; [1998] HCA 28, cited
R v A2 (2019) 93 ALJR 1106; [2019] HCA 35, followed
Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-stock Corporation (1980) 29 ALR 333; [1980] FCA 38, cited
SAS Trustee Corporation v Miles (2018) 265 CLR 137; (2018) 92 ALJR 1064; [2018] HCA 55, cited
SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34, followed
Unions NSW v New South Wales (2019) 264 CLR 595; (2019) 363 ALR 1; [2019] HCA 1, cited
Westpac Securities Administration Ltd v Australian Securities and Investments Commission (2021) 95 ALJR 149 [2021] HCA 3, cited

COUNSEL:

B O’Donnell QC, with E Goodwin, for the appellants
M H Hindman QC, with A G Psaltis, for the respondent

SOLICITORS:

Herbert Smith Freehills for the appellants
GR Cooper, Crown solicitor for the respondent

MORRISON JA: I have had the benefit of reading the draft reasons prepared by Williams J. I agree with the orders proposed by her Honour, generally with the reasons for those orders. However, I wish to add some comments of my own.
The central issues in this appeal turn on the proper construction of the Payroll Tax Act 1971 (Qld).[1] The authorities governing the approach to construction of such a statute are set out by Williams J. Those principles were not the subject of any controversy on the appeal.
[1]To which I shall refer as the PTA.
The essence of the two questions involved in this appeal are as follows:
(a)does Division 1B of the PTA apply to a common law employer, in circumstances where an employment agency contract exists, under which the employment agent provides the services of its employees to a client;
(b)if Division 1B does extend to the employment agent, does the dictionary definition of “wages” in the PTA apply to remuneration paid by an employment agent to its employee/service provider, so as to make the employment agent liable for payroll tax; within that question, does s 13J(2) of the PTA have the effect that the remuneration paid by the employment agent to its employee/service provider is exempt from the application of the deemed wages provision in s 13J(1).
Under the contracts in place between the Queensland Children’s Hospital (QCH) and the Anglican Church Grammar School (ACGS), the appellants are employment agents who used their own employees to provide services to each of QCH and ACGS, both of which are charitable institutions exempt from payroll tax pursuant to s 14(2) of the PTA. The respondent assessed the appellants as being liable to pay payroll tax on wages paid to their employees, whose services had been provided to QCH and ACGS.
Under the contracts between the appellants and QCH and ACGS, the appellants were obliged to provide suitably trained and qualified persons to perform the services and to supervise them in their work. Payment to those workers was made by each of the appellants respectively, and the contracts with the clients (QCH and ACGS) contained provisions under which the appellants would be reimbursed for the costs they incurred in performing the contract. Under the ACGS’s contract the relevant appellant was to be reimbursed for all its costs in performing the contract, including wages and payroll tax. Under QCH’s contract the relevant appellant was to receive fees for the provision of the services.
At the heart of the appellants’ contentions is the proposition that Division 1B of the PTA applies to a common law employer, and the dictionary definition of “wages” does not apply in respect of an employment agency contract. Therefore, it is contended, the appellants are entitled to an exemption under s 13J(2) of the PTA, with the consequence that no liability for payroll tax arises.
On the appellant’s approach, Division 1B exhaustively determines the fundamental matters upon which the application of payroll tax depends in relation to an employment agency contract. Consequently, it was contended that the general provisions of the PTA are inapplicable to an employment agency contract, in relation to issues such as who is the employer, the employee, identification of wages, any exemptions and avoidance. In other words, the appellants contend that Division 1B was introduced to cover the whole subject matter of the exposure to payroll tax in respect of employment agency contracts. On that approach the dictionary definition of “wages” in the schedule does not apply.
The competing contentions as between the appellants and respondent are thoroughly summarised in the reasons of Williams J. That permits me to pass immediately to the questions of construction of the PTA.
The PTA is, as its long title reveals, an Act to impose a tax upon employers in respect of certain wages. The dictionary of definitions in the Schedule to the PTA defines various words used in the PTA. I will have reference to them shortly.
Subdivision 1 of the PTA contains provisions imposing the liability to payroll tax and identifies the “wages” which are liable to payroll tax under the Act. Section 9(1) imposes a liability on wages “paid or payable by an employer in relation to services performed or rendered by an employee”. The term “employer” is defined in the Schedule to mean “any person who pays or is liable to pay any wages and includes … any person taken to be an employer under another provision of this Act”.
The term “wages” is relevantly defined in the Schedule in this way:
“…any wages, remuneration, salary, commission, bonuses or allowances paid or payable … to an employee as an employee, and, without limiting the generality of the foregoing, includes …
…
(i)an amount taken to be wages under another provision of this Act; …”
A note added to subparagraph (i) of that definition provides an example of an amount taken to be wages, namely under s 13J, amounts paid or payable under an employment agency contract.
This Court has adopted the principle in Kelly v The Queen[2] that the proper course of statutory construction is to import the words of a definition into the substantive enactment and only then construe the substantive enactment.[3]
[2][2004] HCA 12; (2004) 218 CLR 216, at [84] and [103].
[3]Watson v Scott [2015] QCA 267 at [50]-[51]; Farnham v Pruden [2016] QCA 18 at [23].
Importing the definition of “wages” into s 9(1) has the effect that it reads as follows:
“9 Wages liable to payroll tax – nexus with Queensland
(1)Wages, remuneration, salary, commission, bonuses or allowances paid or payable … to an employee as an employee, including an amount taken to be wages under another provision of this Act, are liable to payroll tax under this Act if … they are paid or payable by an employer in relation to services performed or rendered by an employee …”
For the purposes of determining what payroll tax should be paid on wages the PTA uses a number of deemed states of affairs. These are normally denoted by the use of a phrase following the format: “For this Act, wages are taken to have been paid …” or “For this Act, a person is taken to be an employer …”.[4]
[4]Examples appear in s 9C, 13C, 13D, and 13H.
Where that occurs it is evident that the PTA uses that formula in a way which “deems” a state of affairs notwithstanding that the reality may be otherwise.
Section 12 provides that “Payroll tax shall be paid by the employer by whom the taxable wages are paid or payable”. The phrase “taxable wages” is defined in the Schedule to mean “wages that, under section 9, are liable to payroll tax”.
The provisions of the PTA therefore proceed upon the basis that the liability to pay payroll tax is upon wages which are paid “to an employee as an employee”, and the liability falls upon the employer “by whom the taxable wages are paid or payable”. That is consistent with the definition of “employer” in the Schedule, which means “any person who pays or is liable to pay any wages … and any person taken to be an employer under another provision of this Act”. The latter phrase is the subject of a note of a definition of “employer”, referring to s 13H, employment agents under employment agency contracts.
With that as the context, one can turn to the provisions of Division 1B, dealing with employment agents.
Section 13G relevantly provides:
“13G Meaning of employment agency contract
(1)An employment agency contract is a contract under which a person (an employment agent) procures the services of another person (a service provider) for a client of the employment agent.
(2)However, a contract is not an employment agency contract if it is, or results in the creation of, a contract of employment between the service provider and the client.
(3)Subsection (1) applies to a contract whether it is formal or informal, express or implied.
(4)For this section –
contract includes agreement, arrangement and undertaking.”
On its face the effect of s 13G is that a contract cannot be an employment agency contract if the relationship between the service provider and the client is (or becomes) that of employer and employee.
Following Kelly v The Queen and reading the definition of “contract” into s 13G(2), that subsection then provides that a contract “is not an employment agency contract if it is, or results in the creation of, a contract, agreement, arrangement or undertaking of employment between the service provider and the client”.
There is no temporal limit evident on the face of s 13G(2), but the words used are “if [the contract] … results in the creation of … a contract, agreement, arrangement or undertaking of employment”.[5] The temporal limit implicit in that phrase is at least the lifetime of the relevant contract. Whether it goes beyond that is not necessary to examine.
[5]Emphasis added.
The PTA then contains two provisions which use the formula “For this Act …[something is] … taken to be”. They create a deemed position in relation to employers and employees. Sections 13H and 13I relevantly provide:
“13H Persons taken to be employers
For this Act, the employment agent under an employment agency contract is taken to be an employer.
13IPersons taken to be employees
For this Act, the person who performs work in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent under the contract.”
In each case the deemed position is “For this Act”, which, in my respectful view, reinforces the fact that the assumed position is only for the purposes of determining liability to payroll tax, and the person upon whom that liability falls. Further, s 13H and s 13I compliment the provisions of s 13G(2) by making it clear that where there is an employment agency contract, regardless of the truth of the position, the employment agent is the deemed employer, and the service provider is the deemed employee of that agent. The obvious category caught by that formulation is an independent contractor engaged by the employment agent.
One can then turn to the next provision of the PTA, which deals with amounts “taken to be wages”. Section 13J relevantly provides:
“13J Amounts taken to be wages
(1)For this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract–
(a)an amount paid or payable in relation to the service provider in respect of the provision of services in connection with the contract;
(b)the value of a benefit provided in relation to the provision of services in connection with the contract that would be a fringe benefit if provided to a person in the capacity of an employee;
(c)a payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee.
(2)However, subsection (1) does not apply to an amount, benefit or payment mentioned in the subsection if–
(a)the amount, benefit or payment would be exempt from payroll tax under division 2 … if it had been paid or provided by the client in relation to the service provider as an employee …”
The first thing one notes about s 13J is that it is not concerned with what are “wages” in fact, but rather about things which are “taken to be wages”. Once again, the PTA deems a particular state of affairs to be the case, regardless of the true state of affairs.
Secondly, s 13J identifies three different categories of payment or provision of a benefit, all of which are “taken to be wages paid or payable by the employment agent”.[6]
[6]Emphasis added.
The first is “an amount paid or payable in relation to the service provider in respect of the provision of services”. As to that one can see that there are several things that the provision does not do. Section 13J(1)(a) does not refer to an amount paid or payable to the service provider, but rather “in relation to the service provider”. The subsection does not identify by whom or to whom the payment is made. Nor does the wording require that the payment be in the classic form of wages. Thus, in the case of an employment agent procuring the services of an independent contractor, subsection (a) would catch payments made by the employment agent to the independent contractor, even though they were not, in fact, wages.
But, on its face it would also catch payments made by the client to the employment agent, in relation to the service provider and in respect of the provision of services.[7] One such case could arise where the payment from the client is made to the employment agent but it has yet to be paid out to the service provider. Such an amount would then be “taken to be wages” for the purposes of imposing upon the employment agent the liability to meet payroll tax, which falls upon wages “paid or payable in relation to services performed … by an employee”: s 9(1).
[7]This is the example seen in the Explanatory Notes for the Pay-roll Tax (Harmonisation) Amendment Bill 2008, page 12.
Equally it would catch payments made by the client to the service provider (say, an independent contractor) in relation to the service provider’s services. For the purpose of the PTA those payments would be taken to be wages paid or payable by the employment agent.
The second category is “the value of a benefit provided in relation to the provision of services in connection with the contract”, if it would be a fringe benefit had it been provided to an employee. On its face s 13J(1)(b) would catch the value of a benefit provided under the employment agency contract, as between the client and the employment agent, and as between the client and the service provider, so as to render it liable to payroll tax as if it had been provided to an employee.
The third is “a payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee”. That, on its face, would similarly catch any such payment required to be made under the employment agency contract.
However, in no case caught by s 13J(1) does the payment of the amount, provision of the value of a benefit, or provision of the superannuation contribution do anything to effect those upon whom the liability to payroll tax falls (where there is an employment agency contract, the employment agent) or the relationship between the client and the service provider (which cannot be one of employer and employee).
One then turns to s 13J(2). It simply provides that s 13J(1) “does not apply” to an amount, benefit or payment mentioned in subsection (1) if the amount, benefit or payment “would be exempt from payroll tax under division 2 … if it had been paid or provided by the client in relation to the service provider as an employee”.[8]
[8]Emphasis added.
The first thing to note about s 13J(2) is that it is an exception to the operation of s 13J(1). In plain words it simply provides that s 13J(1) “does not apply” in certain circumstances. Those circumstances are where the amount, benefit or payment referred to under subsection (1) would be exempt from payroll tax under another assumed state of affairs, namely if it had been paid or provided by the client in relation to the service provider as an employee. That subsection does not provide or operate on the basis that the client did, in fact, pay or provide the amount, benefit or payment. To the contrary, it applies on the assumption that it did.

The second thing to note is that subsection (2) uses the phrase “in relation to the service provider as an employee”.[9] In context that must refer to the service provider as an employee of the client. That phrase highlights the assumed limits on the exception. As has been identified above, the PTA provides that a contract cannot be an employment agency contract “if it is, or results in the creation of, a contract, agreement, arrangement or undertaking of employment between the service provider and the client”; see paragraphs [21] - [22] above. Therefore, the basis for the exception in s 13J(2) is one which cannot exist in fact, but only under an assumed state of affairs.
[9]Emphasis added.
In my respectful view, the work which s 13J(2) does is to simply provide that subsection (1) does not apply in certain circumstances. It does not make separate provision in respect of the subject matter or the circumstances to which it refers. Put slightly differently, s 13J(2) negates the deeming effect of s 13J(1), so that the amounts, benefits and payments to which it refers are not taken to be wages. But it does not say that wages paid by an employment agent to its employees are to be taken not to be wages. As the Chief Justice pointed out at first instance,[10] the thrust of the appellant’s contentions is that s 13J(2) would create a negative, with the effect that wages paid by an employment agent would be taken not to be wages for the PTA.
[10]Compass Group Education Hospitality Services Pty Ltd & Anor v Commissioner of State Revenue [2020] QSC 184 at [59] (‘reasons below’).
In the appellants’ case, the service providers are, in fact, the employees of the appellants as employment agents, and the payments made to those employees was made by the appellants as employers. In those circumstances are there any relevant exemptions from payroll tax?
The exemptions to which the appellants refer are in Division 2 of the PTA, and the principal provision is s 14, which relevantly provides:[11]
“14 Exemption from payroll tax
(2)The wages liable to payroll tax under this Act do not include wages paid or payable –
…
(c)by a charitable institution in respect of a charitable institution to a person during a period in respect of which the person is engaged exclusively –
(i) in the work of the second mentioned charitable institution for a qualifying exempt purpose; …”
[11]QCH and the ACGS claim status as charitable institutions.
Following Kelly v The Queen the definition of the term “wages” must be read into s 14(2) in order to achieve its proper construction. Once that is done s 14(2) relevantly reads:
“(2)The wages, remuneration, salary, commission, bonuses or allowances paid or payable … to an employee as an employee … including an amount taken to be wages under another provision of this Act, liable to payroll tax under this Act do not include wages paid or payable … by a charitable institution in respect of a charitable institution to a person during a period in respect of which the person is engaged exclusively … in the work of the second mentioned charitable institution.”
The first thing to observe about s 14(2) is that it focuses on wages paid or payable to an employee as an employee. That can never be the case as between a client and the service provider under an employment agency agreement for the reasons set out in paragraphs [21] - [22] above. It could only exist under some assumed or deemed arrangement, but that is not what s 14(2) provides.
The second thing to note is that s 14(2) is relevantly concerned with wages paid or payable “by a charitable institution in respect of a charitable institution”. As subsection 2(c)(i) makes clear, the charitable institutions referred to in that phrase are separate from one another. That is not the case here.
Thirdly, the primary meaning of “wages” is a sum paid “to an employee as an employee”. In the context of s 14(2)(b) I do not consider that the primary meaning of “wages” is displaced by the fact that the definition includes amounts “taken to be wages under another provision of this Act”. Even in that circumstance the exemption would apply only if the wages were payable by a charitable institution in respect of another charitable institution. That is not the case here where there is an employment agency contract in place, the workers are the employees of the employment agent, and payments by QCH and ACGS under the employment agency contract are made to the employment agent.
That the exemption is limited in that way reinforces, in my view, the conclusion that s 13J(2) does not create a negative, but simply provides when the deeming provisions in s 13J(1) will not be applicable.
For these reasons the appellant’s contention that division 1B displaces the definition of “wages” in the schedule cannot be accepted. As the Chief Justice said at first instance,[12] the definition of “wages” in the schedule expressly makes payments falling within division 1B so as to be deemed wages, an addition to, and not a replacement for, wages falling within the general part of the definition. The inclusion of the subcategory does not displace the main category in the definition. The same can be seen in the definition of “employer” which has as its primary meaning “any person who pays or is liable to pay any wages”, and as the included category, “any person taken to be an employer under another provision of this Act”.
[12]Reasons below at [60].
I agree that the appeal should be dismissed.
PHILIPPIDES JA: I agree with the orders proposed by Williams J for the reasons given by her Honour and with the additional reasons of Morrison JA.
WILLIAMS J: This is an appeal against orders made on 24 June 2020 upholding the respondent’s decision to disallow objections made by the appellants as to their liability to payroll tax under the Payroll Tax Act 1971 (Qld) (PTA).
The appellants seek to have the order made on 24 June 2020 set aside and the following orders made:
“a.The appeal pursuant to section 69 (section 69 appeal) of the Taxation Administration Act 2001 (Qld) (Taxation Administration Act) is allowed.
b.The respondent make a reassessment in accordance with section 19 of the Taxation Administration Act necessary to give effect to the reasons of the Court of Appeal.
c.The respondent pay to the appellants, interest on the overpaid amount of payroll tax in accordance with section 61 of the Taxation Administration Act.
d.The respondent pay the appellants’ costs of the section 69 appeal.”
The learned trial judge determined that the appellants were not employment agents pursuant to s 13G PTA. Further, even if they were, as the appellants provided services through their own employees, the learned trial judge concluded that they were liable to payroll tax on wages paid to their employees in any event.
The appellants allege several errors in relation to the learned trial judge’s reasoning in reaching these conclusions. The grounds of appeal are as follows:
“1.The learned trial judge erred in law in finding that Division 1B of the [PTA] did not apply to common law employees and common law employers.
2.The learned trial judge erred in law in finding that the expression ‘procures the services of another’ in section 13G(1) of the [PTA] did not apply in circumstances where an employer directs, or even engages, its employees to provide services for a client.
3.The learned trial judge erred in law in finding that employers are not employment agents within the meaning of employment agents in section 13G(1) of the [PTA].
4.The learned trial judge erred in law in finding that the effect of sections 13J and section 14(2) of the [PTA] was not to exempt the appellants from paying payroll tax.”
Issues on the appeal
Both the appellants and the respondent agree that there are two key issues to be considered on the appeal but articulate the second issue slightly differently, but with the same effect.
The appellants identify the two issues as follows:
(a)Does Division 1B of the PTA apply to a common law employer (of a person whose services are provided to a client of the employer/employment agent)?
(b)If Division 1B does extend to a common law employer, will the dictionary definition of “wages” apply to remuneration paid by an employment agent to its employee/service provider so as to make the employment agent liable for payroll tax, notwithstanding that by force of s 13J(2) the remuneration is exempt from the application of the deemed wages provision in s 13J(1)?
At first instance, the Chief Justice decided each of these issues against the appellants. The appellants recognise that these two issues are “true alternatives” and to succeed on the appeal this Court would need to overturn both conclusions.
The respondent also identifies two issues regarding the interpretation and construction of the provisions of the PTA. The respondent contends that the issues are interrelated and turn on the interaction between the Employment Agent Provisions in Division 1B (Employment Agent Provisions) and the common law employer/employee relationship.
The respondent articulates the two issues as:
(a)Does s 13G PTA apply to common law employment relationships?
(b)Do the Employment Agent Provisions operate as deeming provisions or as a code? If the latter, such that the provisions can apply to common law employment relationships, are relevant wages paid to employees removed from the charge to payroll tax by s 13J(2) PTA.
The respondent submits that the principal issue is the second issue, as for that question it does not matter whether the Employment Agent Provisions extend to a common law employment relationship or not.
However, it is recognised that as at first instance the issues were treated as essentially intertwined, and there is a clear interaction between the two issues, both issues need to be considered.
Background facts
The appellants, using their own employees, provide services to the Queensland Children’s Hospital (QCH) and the Anglican Church Grammar School (ACGS).
Both QCH and ACGS are charitable institutions exempt from payroll tax pursuant to s 14(2) of the PTA and provided the relevant declaration under s 13J(2) of the PTA.
Relevant facts were set out in an agreed statement of facts before the trial judge.
ACGS and QCH contracts and employments contracts
The first appellant contracted with ACGS in October 2012, which was subsequently extended, in respect of the provision of services.
The contract granted the first appellant the right to provide catering, cleaning and laundry services at the ACGS and clause 4.1(a) relevantly provided:
“… provide all necessary employees and contractors (as applicable), who shall be adequately trained and hold all necessary permits and qualifications to complete their duties under this Agreement …”
The contract included a number of other terms which can be summarised as follows:
(a)The first appellant was to supervise the staff and require that they comply with occupational health and safety requirements.
(b)The first appellant was responsible for any redundancy payments for staff, unless they arose as a result of ACGS closing its premises, reducing the level of services required or terminating the agreement (in which case ACGS would bear the costs of redundancy).
(c)The first appellant was to be reimbursed for all its costs in performing the contract, including wages and payroll tax.
(d)The first appellant was also paid an annual performance fee, determined according to whether it met various performance indicators.
The second appellant contracted with QCH in October 2012 as extended in an agreement by way of a ‘Facilities Management Services Contract’. This contract contained terms similar to those in the contract between the first appellant and ACGS.
In summary, the Facilities Management Services Contract provided that:
(a)The second appellant was to provide catering, laundry, cleaning and security services at various locations at the QCH campus.
(b)The second appellant was to ensure that suitably trained and qualified persons were available to perform the services and to ensure their compliance with various requirements.
(c)The second appellant was required to have a representative supervising the performance of services and liaising with QCH’s representatives.
(d)QCH was to pay fees to the second appellant, in part fixed and in part varied according to specified hourly rates for labour.
Both the first and second appellants entered into employment contracts with their own workers to provide the services at a specified hourly rate of pay and at the locations relevant to the ACGS and QCH.
The employment contracts were in very similar terms and relevantly, included the following terms:
(a)The worker was employed on a full-time basis at the specified location where he or she was required to carry out duties as described in a position description or as directed.
(b)If there were to be any changes in the employee’s position or work location, a new contract would be entered.
(c)If the position were no longer available because of changes in “operational requirements”, alternative arrangements would be considered.
(d)The employer had the right to terminate the employment by giving notice.
(e)The employee was required to comply with the employer’s code of business conduct and to observe the client’s reasonable working conditions and policies and procedures.
The agreed position at first instance, and on this appeal, is that the relevant client contract and the employment contracts in each case are to be considered together for the purposes of s 13G PTA. That is, the relevant contracts to be considered as potentially constituting the ‘employment agency contract’ for the purposes of s 13G PTA encompass both the client contract and the employment contracts.
Appellants’ submissions
The appellants ultimately contend that Division 1B applies to a common law employer and the dictionary definition of “wages” does not apply in respect of an employment agency contract. As a result, the appellants are entitled to an exemption under s 13J(2) PTA and no liability for payroll tax arises.
To reach this conclusion, the appellants contend that the trial judge erred in relation to the two questions identified by the appellants and consequently the appeal should be allowed.
Appellants’ Question 1: Does Division 1B of the PTA apply to a common law employer (of a person whose services are provided to a client of the employer/employment agent)?
The appellants contend that the answer is “yes”.
The appellants rely on several interrelated reasons for this conclusion, including:
(a)Construction of “employment agency contract”:
(i)A common law employer comes within the ordinary meaning of “employment agency contract”.
(ii)There is no exclusion for the circumstance where the employment agent becomes the common law employer (compared to the circumstance where a client becomes the employer).
(iii)“Procures” is broad enough to capture an employer engaging and/or directing an employee.
(b)Uniformity between Queensland and New South Wales/Victorian legislation:
(i)The importance to be given to the uniformity of interpretation of the same legislation in New South Wales, Victoria and Queensland, including the operation of s 131 PTA.
(ii)The legislation in New South Wales has been interpreted that the employment agency contract provisions apply to a common law employer.
(iii)The trial judge erred by not interpreting the Queensland legislation to achieve consistency between the New South Wales/Victorian legislation and the Queensland legislation.
These are considered in more detail below.
Appellants’ Question 2: If Division 1B does extend to a common law employer, will the dictionary definition of “wages” apply to remuneration paid by an employment agent to its employee/service provider so as to make the employment agent liable for payroll tax, notwithstanding that by force of s 13J(2) the remuneration is exempt from the application of the deemed wages provision in s 13J(1)?
The appellants contend that the answer is “yes”.
This question requires consideration of how Division 1B operates within the context of the PTA as a whole. As identified by the appellants, there are two possible scenarios:
(a)Division 1B exhaustively determines the fundamental matters upon which the application of payroll tax depends concerning an employment agency contract, and as a result, the general provisions of the PTA are inapplicable in relation to issues such as who is the employer, the employee, identification of wages, exemption and avoidance. This approach accepts that the levying of tax occurs under ss 10 and 12 PTA which are outside of Division 1B.
(b)Division 1B is merely an extension of the general provisions of the PTA that determine the matters upon which payroll tax is charged, with an exemption from payroll tax applicable to that extension only.
The appellants contend that the proper interpretation of the operation of Division 1B is the first of these interpretations.
The appellants rely on several interrelated reasons for this conclusion, including:
(a)Where there is repugnancy between the general provision of a statute and provisions dealing with a particular subject matter, the latter must prevail.
(b)Division 1B was introduced to cover the whole subject matter of the exposure to payroll tax in respect of employment agency arrangements.
(c)A contrary interpretation would result in the general provisions of the PTA derogating from the special provisions in relation to employment agency contracts. The exemption in effect would never apply by operation of the deeming provisions and the chapeau of the definition of “wages”.
(d)The meaning of s 13J is not “enlarged” on the appellants’ construction. Rather the dictionary definition of wages does not apply in determining payroll tax applicable to employment agency arrangements.
(e)If the dictionary definition of “wages” is applied to the subject matter of Division 1B a conflict arises. The text, structure, purpose and legislative history all support the conclusion that Division 1B prevails.
These are considered in more detail below.
Respondent’s submissions
The respondent’s position is that the trial judge’s decision was correct for the reasons given. The respondent contends that the “only sensible construction” of the Employment Agent Provisions within the context of the PTA as a whole is one which does not apply those provisions to employer/employee relationships and Division 1B, in any event, does not cover the field of liability to payroll tax for employment agents.
The respondent contends that both issues were correctly dealt with at first instance and no error of law is made out.
Respondent’s Question 1: Does s 13G PTA apply to common law employment relationships?
The respondent contends that the answer is “no”.
On the proper construction of s 13G PTA, an employment agency contract is not one by which an employer contracts with a client to provide the services itself through its own employees, rather than procuring third parties (whether individuals, companies or trusts) to provide the services to the client. In the current case, the contracts are not employment agency contracts and the employers are not employment agents.
Respondent’s Question 2: Do the Employment Agent Provisions operate as deeming provisions or as a code? If the latter, such that the provisions can apply to common law employment relationships, are relevant wages paid to employees removed from the charge to payroll tax by s 13J(2) PTA?
The respondent contends that properly construed, the Employment Agent Provisions do not operate as a code.

Rather than being an exhaustive regime designed to cover the field in terms of imposition of payroll tax on employment agents, the provisions operate as deeming provisions to extend the reach of liability to payroll tax, such that, if an employment agent is already liable to pay payroll tax on wages paid to its own employees owing to a common law employment relationship, there is no need to engage the Employment Agent Provisions.
Further, the respondent contends that the express terms of s 13J(2) operate only to remove from the definition of “wages” deemed within s 13J(1) PTA and does not deal with actual wages (which here arise as a result of the common law employment relationship).
Consequently, s 13J(2) has no application to employer/employee relationships.
The respondent submits that the conclusions in respect of both questions (Respondent’s Questions 1 and 2 above) are supported by each of the following:
(a)The text of the provisions within their context;
(b)The absence of any relevant conflict between the general provisions of the PTA and the Employment Agent Provisions;
(c)The express departure of the current Employment Agent Provisions from previous New South Wales provisions that appear to have had the meaning for which the appellants now contend; and
(d)The extrinsic material.
These are considered in more detail below.
Decision at first instance – the trial judge’s reasoning
The reasons for decision of the trial judge delivered on 24 June 2020 set out the relevant contractual arrangements, the relevant PTA provisions, the arguments as to whether Division 1B applied to the appellants, the history of the Employment Agent Provisions in Queensland and New South Wales, a review of decisions of other jurisdictions on analogues to Division 1B of the PTA before undertaking a consideration of these issues and arriving at the conclusion that the appeal be disallowed.
The Chief Justice’s reasons for concluding that Division 1B of the PTA has no application to common law employers took into account the following considerations:
(a)The authorities relied upon “were not of any immediate assistance in resolving the issues of construction in this case”. Her Honour noted that the issue in relation to the common law employment relationship had not previously been comprehensively dealt with in any of the authorities.[13]
[13]While it had been considered in the New South Wales Administrative Tribunal decision of Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83, her Honour ultimately reached a different conclusion to that decision in respect of the Queensland legislation.
(b)The relevant principles of construction to be applied to the construction of a tax statute are as set out in the decision of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT).[14] Her Honour identified the relevant principles to be applied as:
[14](2009) 239 CLR 27.
(i)at [54] of her Honour’s reasons:
“… the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy.[15]”
[15]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [47].
(ii)at [54] of her Honour’s reasons, the fact that a statute is a taxing Act is part of the context.[16]
[16]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [57].
(c)Her Honour concluded that the correct construction of s 13G(1) is that:
“Div 1B was not intended to apply to common law employees, and the expression ‘procure services of another’ was correspondingly not intended to apply in the circumstance where an employer directs, or even engages, an employee to provide services for a client. Employers are not employment agents within the meaning of the definition in s 13G.”[17]
[17]Reasons at [62].
(d)This conclusion was based on the following:
(i)The phrase “procure the services of another” is broad enough to capture the situation where an employer enters a contract of employment with an employee for the specific purpose of having that employee provide services in and for the business of a client.
(ii)Further, it is possible that the phrase is also broad enough to include the circumstance of a direction to an existing employee to perform work for a client, although this is “less obvious”.
(iii)Whilst her Honour reasoned that it was possible that s 13G could be read as broad enough to cover those two situations, when the section was “read in the larger context of [Division] 1B, the mischief it was intended to address, and the purpose of the [PTA] as a whole”, her Honour concluded that was not the correct construction of the section.
(iv)If the phrase “employment agency contract” was to be read as extending to employers this would produce an absurdity in that the application of the deeming provisions would result in “what is in fact the case being taken by statute to be the case.”[18]
[18]Reasons at [57].
(v)Her Honour went on to recognise that whilst this was not an impossible outcome, factors pointed to it not being the correct construction, namely:
“[T]he [PTA] is described as an Act to impose a tax, and the clear legislative intent in inserting [Division] lB and its predecessors was to extend liability to payroll tax. The mischief at which those provisions were directed was the avoidance of tax by providers of labour. To include actual employers, already and independently liable to tax, in the compass of [Division] lB would be entirely superfluous.”[19]
[19]Reasons at [57].
(vi)Further, the absence of an exclusion in the 2008 definition of “employment agent contract” in respect of the service provider being employed by the agent in the circumstances was not “particularly telling”. Her Honour concluded that “it is likely to have been regarded as unnecessary, since employers who might be regarded as employment agents were already caught by the general provisions.”[20]
[20]Reasons at [58].
(vii)Further, there was an obvious reason to retain the exclusion in circumstances where the client was the employer. In that case, if the employment agent was deemed to be the employer, it would “perversely, [to] shift the burden of payroll tax from the actual employer, the client, to the employment agent.” This would give rise to a tension as the client would be protected from liability for payroll tax on wages once the employment agent had paid the tax, where in truth the client was the employer.
(e)The correct construction of s 13J(2) PTA is that the deeming effect of s 13J(1) does not apply, so that the payments to which it refers are not taken to be wages. Section 13J(2) does not go further and does not create a negative. Her Honour observed that:
“it does not say that wages paid by an employment agent are to be taken not to be wages; but that is what the appellants would have it do. The appellants’ construction runs counter to the legislative intent of expanding liability for payroll tax, and to the extent that it entails enlarging the sphere of operation of s 13J by the reading in of words, is impermissible[21].”[22]
[21]R v PLV (2001) 51 NSWLR 736 at 743-4.
[22]Reasons at [59].
(f)Division 1B does not displace the definition of “wages” in the Schedule. This conclusion was based on a number of considerations including:
(i)The definition of “wages” in the Schedule explicitly makes payments deemed to be wages under Division 1B “an addition to, not a replacement of, wages falling within the general part of the definition.”[23]
[23]Reasons at [60].
(ii)The definition of “employer” is cumulative, that is, adding to the “ordinary concept of a person liable to pay wages, persons taken to be employers under other provisions such as s 13H.”[24]
[24]Reasons at [60].
(iii)Section 13J(1) contains the expression “[f]or the Act”. It thereby describes what will be wages for the purposes of the PTA: namely, it is “bringing those payments within the definition of ‘wages’ in the schedule.”[25] In this regard, her Honour concluded that “[i]t does not purport to say what will not be wages for the Act. There is no conflict between the schedule definition and [Division] 1B which would warrant a generalia specialibus non derogant approach.”[26]
[25]Reasons at [60].
[26]Reasons at [60].
(iv)Consideration was given to the contention that the respondent’s construction resulted in a conflict resulting in an overall negation of the benefit of s 13J.
(A)     Submissions were made in respect of the contention that on this construction the exemption for employment agents would never apply as they would be deemed employers and employees and payments passing between them would in all cases be captured by the chapeau or opening general part of the definition of “wages” in the Schedule.
(B)     Her Honour concluded that the general part of the definition of “wages” would not operate in this way due to the inclusion of the words “to an employee as an employee”.
(C) In circumstances where the deeming provisions deemed an independent contractor an employee and the employment agent an employer the effect of the deeming provision in s 13I did not make the independent contractor “an employee as an employee”.
(D)     If the payments are included as wages, they are included in the extension under (i) of the definition, thereby “taken to be wages by another provision” of the PTA.[27]
[27]Reasons at [61].
(g)Following reaching these conclusions, her Honour considered some further issues.
(i)Her Honour recognised that there may be different payroll tax outcomes where workers provide their services to institutions entitled to an exemption, according to whether those workers were employees or independent contractors. Importantly, her Honour noted:
“Had the legislature wished to create an exemption from payroll tax in any circumstance where monies were paid for provision of services to an organisation entitled to an exemption, it would have been a simple matter to do so; for example by s 13J(2) providing that ‘the Act’, rather than ‘ss (1)’, did not apply in the specified circumstances. The mechanism adopted, of simply removing the consequence of those payments being deemed wages under s 13J(1), very much suggests an intent to avoid such a comprehensive result.”
(ii)Further, her Honour concluded that consideration of relevant extrinsic material did not lead to any different view. In fact, her Honour noted that the 1983 Second Reading Speech prior to the introduction of the Employment Agent Provisions and the 1996 Explanatory Notes on the amendment make it clear that:
“… the legislative intent was to ensure that providers of labour could not, by virtue of some uncertainty as to the identity of the workers’ employer, produce the result that no payroll tax was paid in respect of those workers. The Explanatory Notes to the 2008 amending Act, in referring to remuneration paid by an employment agent to a worker as ‘exempt’, were, in my view, doing no more than using a form of shorthand to describe the net result. The Notes do not suggest any equation of remuneration in that context with actual wages paid by an employer.”[28]
(iii)Additionally, the 2008 Explanatory Notes do not suggest that by removing the express provision there was any intention to effect an inclusion of employers. Her Honour concluded that in fact, this is to the contrary as the Explanatory Notes describe the application of payroll tax to payments as follows:
“… which would not fall within the common law definition of ‘wages’
and note that liability arises where
‘… the worker does not become an employee of either the agent or the client’.”[29]
(iv)In this regard, it was noted that there was no expressed intention to change the position or to widen the application of the Employment Agent Provisions. Rather, the changes were expressed to be:
“for the purpose of aligning the [PTA] with the legislation in the southern states by passing on the benefit of exempt payments to employment agents in that capacity; introducing an anti-avoidance provision; and extending the deeming effect to fringe benefits and superannuation payments.”[30]
(v)Reference was made to 2017 amendments to the New South Wales legislation to provide for more extensive protection for common law employers. Her Honour recognised that this may support a starting position, at least in New South Wales, that employers would be within the definition of Employment Agent Provisions. However, this position is not apparent on the face of the New South Wales legislation in 2008. Accordingly, in respect of the express concern of the Queensland Parliament to align the payroll tax provisions with those of other States, it cannot be said that at that time this would have included the Employment Agent Provisions being construed as extending to common law employers. Her Honour points to the absence in Queensland of any amendments similar to the New South Wales 2017 amendments as suggesting to the contrary.
[28]Reasons at [64].
[29]Reasons at [65].
[30]Reasons at [65].
Relevant provisions of the PTA
The PTA is structured into 14 Parts with Part 2 headed “Liability to taxation”.
Division 1 of Part 2 is headed “Imposition of liability”. There are two subdivisions, namely:
(a)Subdivision 1 – “Wages liable to payroll tax”; and
(b)Subdivision 2 – “Other provisions about imposing liability for payroll tax”.
Section 8A deals with the application of subdivision 1:
“8A Application of sdiv 1
(1)This subdivision applies for working out the wages paid or payable by an employer for services performed or rendered by a person that are liable to payroll tax under this Act.
(2)If wages are paid or payable for a person other than an employee, a reference to an employee in this subdivision includes a reference to the person.”
Section 9 then sets out the basis of liability for payroll tax as follows:
“9      Wages liable to payroll tax—nexus with Queensland
(1)    Wages are liable to payroll tax under this Act if—
(a)     the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely in Queensland; or
(b)     the wages are paid or payable by an employer in relation to services performed or rendered by an employee in 2 or more States, or partly in at least 1 State and partly outside all States, and—
(i)the employee is based in Queensland; or
(ii)if the employee is not based in a State—the employer is based in Queensland; or
(iii)if both the employee and the employer are not based in a State—the wages are paid or payable in Queensland; or
(iv)if both the employee and the employer are not based in a State and the wages are not paid or payable in a State—the wages are paid or payable for services performed or rendered mainly in Queensland; or
(c)     the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely outside all States and are paid or payable in Queensland.
Note—
Section 15A provides an exemption for wages paid or payable for services performed entirely in another country for a continuous period of more than 6 months.
…”
Section 10, in subdivision 2, states:
“10     Imposition of payroll tax on taxable wages
(1)Subject to, and in accordance with, the provisions of this Act, there shall be charged, levied and paid for the use of Her Majesty on all taxable wages payroll tax at the rate of 4.75% of the taxable wages paid or payable in the financial year ending 30 June 2020 or in a later financial year.
(2)However, the rate of payroll tax is increased for an employer to 4.95% of taxable wages for each return period during which—
(a)     if the employer is a member of a group—the total of the taxable wages and interstate wages paid or payable by the members of the group is more than the threshold amount; or
(b)     otherwise—the total of the taxable wages and interstate wages paid or payable by the employer is more than the threshold amount.
…”
Sections 11 and 12 deal with when the liability arises and who is liable for the payroll tax:
“11 When liability for payroll tax arises
A liability for payroll tax imposed on taxable wages arises on the return date for lodgement by an employer of a return.
12Employer to pay payroll tax
Payroll tax shall be paid by the employer by whom the taxable wages are paid or payable.”
Division 1A is headed “Contractor provisions” and Division 1B is headed “Employment Agents”.
Division 1A deals with independent contractors and applies in respect of a “relevant contract”. It contains a deeming provision which operates to bring certain amounts within the scope of the definition of wages, with the consequence that these amounts are captured by the charge to payroll tax in Division 1.
Division 1B contains the provisions central to the construction issue before the Court. The Division applies to an “employment agency contract” and also contains deeming provisions, with the consequence that certain amounts are captured by the charge to payroll tax in Division 1.
Sections 13G to 13J are central to the current considerations and state as follows:
“13G Meaning of employment agency contract
(1)An employment agency contract is a contract under which a person (an employment agent) procures the services of another person (a service provider) for a client of the employment agent.
(2)However, a contract is not an employment agency contract if it is, or results in the creation of, a contract of employment between the service provider and the client.
(3)Subsection (1) applies to a contract whether it is formal or informal, express or implied.
(4)For this section—
contract includes agreement, arrangement and undertaking.
13HPersons taken to be employers
For this Act, the employment agent under an employment agency contract is taken to be an employer.
13IPersons taken to be employees
For this Act, the person who performs work in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent under the contract.
13JAmounts taken to be wages
(1)For this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract—
(a)     an amount paid or payable in relation to the service provider in respect of the provision of services in connection with the contract;
(b)     the value of a benefit provided in relation to the provision of services in connection with the contract that would be a fringe benefit if provided to a person in the capacity of an employee;
(c)     a payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee.
(2) However, subsection (1) does not apply to an amount, benefit or payment mentioned in the subsection if—
(a) the amount, benefit or payment would be exempt from payroll tax under division 2, other than section 14(2)(j), (k) or (l) or 14A, if it had been paid or provided by the client in relation to the service provider as an employee; and
(b)     the client has given the employment agent a declaration, in the approved form, that subsection (1) does not apply to the amount, benefit or payment.”

Division 1B contains further provisions which provide protection to other parties from liability where payroll tax has been paid on wages by an employment agent (s 13K) and payroll tax avoidance (ss 13L and 13LA).
Divisions 1C and 1D are not relevant to the issues currently being considered.
Division 2 is headed “Exemptions”. It is relevant to the extent that ss 14, 14A, 15 and 15A contain exemptions from the liability to payroll tax in certain circumstances.
Section 14 provides that “wages liable to payroll tax under this Act do not include wages paid or payable” and then sets out certain categories of “payers” of wages. This includes relevantly:
“14     Exemption from payroll tax
(2)The wages liable to payroll tax under this Act do not include wages paid or payable—
…
(b)     by a public hospital to a person during a period in respect of which the person is engaged exclusively in work of the hospital of a kind ordinarily performed in connection with the conduct of public hospitals; or
(c)     by a charitable institution in respect of a charitable institution to a person during a period in respect of which the person is engaged exclusively—
(i)in the work of the second mentioned charitable institution for a qualifying exempt purpose; or
(ii)where that second mentioned charitable institution is—
(A)a hospital, in the work of that hospital of a kind ordinarily performed in connection with the conduct of a hospital; or
(B)a non-tertiary educational institution, in the work of that institution of a kind ordinarily performed in connection with the conduct of a non-tertiary educational institution of the relevant kind; …”
Section 131 contains a relevant transitional provision in respect of Division 1B which was introduced by the Pay-roll Tax (Harmonisation) Amendment Act 2008 (Qld), namely:
“131   Interpretation of amended provisions
(1)The amendments made to this Act by the Payroll Tax (Harmonisation) Amendment Act 2008 are intended to enhance the consistency of this Act with the Payroll Tax Act 2007 (NSW) and the Payroll Tax Act 2007 (Vic).
Note—
Minor variations in language used in some of the amended provisions are not intended to alter their meaning from the corresponding provisions in the New South Wales and Victorian Acts. For example—
·the phrase ‘in relation to’ used in sections 13B to 13D, 13E(1), 13F, 13I and 13J(1) and (2)(a), is intended to have the same meaning as the phrase ‘for or in relation to’, or ‘to or in relation to’, used in the corresponding provisions; and
·the phrase ‘in connection with’ used in sections 66 and 70(1), (2) and (3)(a) is intended to have the same meaning as the phrase ‘for or in connection with’ used in the corresponding provisions.
(2)     However, this section does not apply to the extent—
(a)     the Payroll Tax (Harmonisation) Amendment Act 2008 inserted section 14(2)(k)(iii) of this Act; or
(b)     section 14A, as inserted by the Payroll Tax (Harmonisation) Amendment Act 2008, section 11, applies to paternity leave.”
The Schedule to the PTA contains a dictionary which includes the following relevant definitions:
“employer means any person who pays or is liable to pay any wages and includes the Crown in right of the State of Queensland and any person taken to be an employer under another provision of this Act.
Note—
For provisions under which persons are taken to be employers, see, for example, sections 13C (relevant contract employers) and 13H (employment agents under employment agency contracts).
…
wages—
1means any wages, remuneration, salary, commission, bonuses or allowances paid or payable (whether at piecework rates or otherwise and whether paid or payable in cash or in kind) to an employee as an employee, and, without limiting the generality of the foregoing, includes—
(a)any amount paid or payable by way of remuneration to a person holding office under the Crown in right of the State of Queensland or in the service of the Crown in right of the State of Queensland; and
(b)any amount paid or payable under any prescribed classes of contracts to the extent to which that payment is attributable to labour; and
(c)any amount paid or payable by a company by way of remuneration to a director of that company; and
(d)any amount paid or payable by way of commission to an insurance or time payment canvasser or collector; and
(e)the provision by the employer of meals or sustenance or the use of premises or quarters as consideration or part consideration for the employee’s services; and
(f)fringe benefits; and
(g)a superannuation contribution, other than a superannuation contribution—
(i)      paid or payable by a company for a director of the company before 1 July 2008; or
(ii)     for services performed or rendered by an employee before 1 January 2000; and
(h)a termination payment; and
(i)an amount taken to be wages under another provision of this Act; and
Note—
See, for example, sections 13E (amounts paid or payable under a relevant contract), 13J (amounts paid or payable under an employment agency contract) and 51 (amounts paid or payable by or to third parties).
(j)a share or option granted by an employer to an employee in relation to services performed or rendered by the employee, if the share or option is—
(i)      an ESS interest under the Income Tax Assessment Act 1997 (Cwlth), section 83A-10; and
(ii)     granted to the employee under an employee share scheme within the meaning of that section; and
Note—
See part 2, division 1C for provisions that apply for interpreting this paragraph.
(k)a share or option granted by a company to a director of the company by way of remuneration for the appointment or services of the director.
Note—
See part 2, division 1C for provisions that apply for interpreting this paragraph.
2However, wages does not include a benefit that is an exempt benefit under the Fringe Benefits Assessment Act.”
Competing constructions of Division 1B of the PTA
The appellants contend that:
(a)A common law employer comes within the ordinary natural meaning of “employment agency contract”. The appellants point to decisions in New South Wales on the interpretation of the word “procures”[31] and the various dictionary definitions of “procure”.
(b)A broad construction of “procures” includes an employer engaging an employee to provide services as part of the workforce of the client and also an employer directing an existing employee to work at the client’s premises as part of the client’s workforce. In each of these situations, the appellants submit that the employer has “caused or obtained by the expenditure of care or effort” the provision of services of another person for the client.
(c)Significance should be given to the express exclusion of when the client becomes the common law employer and the absence of an exclusion in respect of the employment agent being a common law employer. It is contended that this supports the proposition that “procures the services of another for a client” is broad enough to cover the common law employer/employee relationship.
(d)The learned trial judge at [56] accepted that the definition of “procures” is broad enough to capture an employer engaging an employee but expressed a hesitation as to whether directing an existing employee to work for the client would satisfy the definition. The appellants point to the fact that the trial judge did not give reasons for the hesitancy and they submit that a direction to an existing employee would meet the definition.
(e)The trial judge did not reach a conclusion on the natural and ordinary meaning of the definition. It is submitted that had that task been undertaken, it would have led the trial judge to conclude that an arrangement of employment between an employment agent and a service provider did not preclude the circumstances coming within the definition in s 13G.
(f)Importance is to be given to the uniformity of interpretation of the legislation in three states. The payroll tax legislation adopted in 2007 in New South Wales and Victoria was adopted following the legislation being developed as a “collaborative effort” between the two states. It is submitted that in 2008, the Queensland PTA was amended by the Pay-roll Tax (Harmonisation) Amendment Act 2008 (Qld) to “harmonise” the Queensland legislation with key parts of the New South Wales and Victorian uniform payroll tax legislation.
(g)As part of this “harmonisation” exercise, the Queensland amendments included Division 1B of the PTA which was substantially Division 8 of the 2007 New South Wales and Victorian uniform payroll tax legislation.
(h)Further, s 131 of the PTA identifies that the 2008 amendments are intended to enhance the consistency of the Queensland legislation with the New South Wales and Victorian legislation, consistent with the explanatory memorandum.
(i)The trial judge did not refer in her reasons to the need to achieve consistency of interpretation.
[31]Freelance Global Ltd v Chief Commissioner of State Revenue [2014] NSWSC 127 at [115]; JP Property Services Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 1391 at [47]; HRC Hotel Services Pty Ltd v Chief Commissioner of State Revenue (2018) 108 ATR 84 at [86] and [118].
The respondent agrees with the Chief Justice’s conclusion that the clear words of the PTA, together with its context and purpose, make the construction proposed by the appellants “impossible”.
The respondent contends that:
(a)Construction starts with a consideration of the PTA as a whole. The long title of the PTA is that the PTA is “[a]n Act to impose a tax upon employers in respect of certain wages”. Part 2 contains the relevant provisions concerning payroll tax and is headed “[l]iability to taxation”. Divisions 1, 1A and 1B of the PTA deal with the different relationships giving rise to payroll tax. Divisions 1C and 1D address particular types of payments to employees which may be liable to payroll tax.
(b)Division 1 imposes liability to payroll tax on wages paid by common law employers to employees. Central to liability for payroll tax being imposed is the definition of “wages” in the Schedule to the PTA which operates on wages paid to “an employee as an employee”.
(c)The structure of the definition also extends the definition to “include” certain payments that may or do not fall within the general concept in the definition of “wages”. The definition is extended through subparagraphs (a) to (i) of the definition.
(d)Relevant to the current consideration is subparagraph (i) which states “an amount taken to be wages under another provision of this Act”. There is nothing in the structure or words contained in the definition of wages that would alter the definition applying to what the respondent describes as “wages properly so called”.
(e)Section 9 is the key provision which renders wages falling within the definition of “wages” liable to payroll tax. That is, the charge to payroll tax is imposed by s 9. Section 10 provides how payroll tax is to be levied on taxable wages and s 12 provides that the employer is liable to pay payroll tax.
(f)“Employer” is defined in the Schedule to mean:
“Any person who pays or is liable to pay any wages and includes the Crown in right of the State of Queensland and any person taken to be an employer under another provision of this Act.”
(g)“Employee” is not defined in the PTA. It is accepted that it takes its ordinary or common law meaning.[32]
[32]Office of State Revenue, Public Ruling PTA038.1.
The respondent submits that Division 1, which imposes liability to payroll tax, is directed to two liabilities:
“(a)a liability imposed upon a common law employer to pay payroll tax on wages paid to its employees; and
(b)a liability imposed upon a person who is not a common law employer to pay payroll tax on amounts paid which are taken to be wages under another provision of the PTA.”[33]
[33]Respondent’s Submissions at [16].
It is this construction of the two liabilities which is central to the respondent’s approach. The reasoning of this approach is as follows:
(a)In circumstances where a person is in fact an employer who employs employees and pays them wages then that person is liable to payroll tax under Division 1. The purpose of the PTA is fulfilled in those circumstances.
(b)No other division needs to be considered to impose a charge to payroll tax. Whilst the exemption provisions in Division 2 will need to be considered before the charge can be levied, in effect, the charge to payroll tax has arisen clearly within the legislation under Division 1.
(c)Divisions 1A and 1B provide for the circumstances where the second liability outlined above may arise. That is, they provide for situations where amounts paid to workers are “taken to be” wages for the purposes of the definition in the PTA.
(i)Division 1A applies to independent contractors. By operation of a deeming provision, that division brings certain amounts within the scope of the definition of “wages” and then as a consequence, within the charge to payroll tax in Division 1.
(ii)Similarly, Division 1B contains the Employment Agent Provisions. The respondent contends that it operates to extend the scope of payroll tax to payments made under employment agency contracts and this is achieved by bringing payments under employment agency contracts within the definition of “wages” by a combination of deeming provisions.
(iii)Sections 13H, 13I and 13J deem employment agents to be employers; persons who perform work in relation to which services are supplied to clients under employment agency contracts to be employees; and amounts paid to those workers by employment agents under the employment agency contracts to be wages. Each of these provisions is expressed to be “for the [PTA]”. These deeming provisions are not limited to just Division 1B.
It is in these circumstances that the respondent contends that these deeming provisions have no operation where:
(a)the employment agent is already an employer;
(b)the persons performing the work are already the employment agent’s employees; and
(c)the amounts paid to those workers by the employment agent are already wages.
Division 1B does not impose any charge to payroll tax and the division operates by, in effect, “feeding” the deemed wages back to the common liability to payroll tax in Division 1.
This is achieved by way of subparagraph (i) of the definition of “wages” in the Schedule. Section 13J(1) includes the deemed wages within the definition of “wages” in the Schedule.
It is submitted by the respondent that the words “for this Act” in s 13J(1) mean:
“For this Act (and not otherwise), amounts paid under employment agency contracts to workers are taken to be (not are) wages, even though at common law those amounts would not otherwise be wages.”[34]
[34]Respondent’s Submissions at [22].
The respondent submits that the deeming effects support a construction that the Employment Agent Provisions are not intended to apply to common law employers, employment agents or to cover the field of liability for payroll tax concerning employment agents. Rather, it shows an intention to bring relationships not otherwise liable to payroll tax within the scope of Division 1 and the charge in respect of payroll tax to be imposed.
Reliance is placed on the principle that an Act is to be read in its entirety and also in the order in which it is presented. Subsequent provisions should be read in light of previous provisions.[35]
[35]Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471 at 474-5; Girardi v Commissioner of State Taxation (2013) 93 ATR 822; [2013] SASC 43 at [8].
Consistent with this, the respondent’s position is that once there is a payment of wages by an employer to an employee then a charge for payroll tax arises. Once that position is reached, there is no reason to consider later provisions in the PTA imposing payroll tax. This includes any provisions that deem payments to be wages.
Further, the respondent contends that if there had been an intention for payments made to employees by employment agents to be regulated solely through Division 1B then this could have been made explicit. There is no such provision in the PTA.
Based on this analysis, the respondent submits that the learned trial judge was correct to conclude that the Employment Agent Provisions, on their proper construction, have no need to apply to common law employers.
Is there a conflict between Division 1 and Division 1B?
The second issue (as reflected in question 2 of the appellants and respondent respectively) is whether there is any conflict between Division 1 and Division 1B of the PTA. The parties also diverge in respect of this issue.
The appellants’ position is that a conflict arises. The appellants point to the principles stated by Deane J in Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-stock Corporation:[36]
“As a matter of general construction, where there is repugnancy between the general provision of a statute and provisions dealing with a particular subject matter, the latter must prevail and, to the extent of any such repugnancy, the general provisions will be inapplicable to the subject matter of the special provisions. ‘The rule is, that wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be taken to be operative…’ … Repugnancy can be present in cases where there is no direct contradiction between the relevant legislative provisions. It is present where it appears, as a matter of construction, that special provisions were intended exhaustively to govern their particular subject matter and where general provisions, if held to be applicable to the particular subject matter, would constitute a departure from that intention by encroaching on that subject matter.” (emphasis added)
[36](1980) 29 ALR 333 at 347.
Reference is also made to the principles set out in Project Blue Sky Inc v Australian Broadcasting Authority[37] as follows:
“Reconciling conflicting provisions will often require the court ‘to determine which is the leading provision and which the subordinate provision, and which must give way to the other’. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.” (footnotes omitted) (emphasis added)
[37](1998) 194 CLR 355 at [70].
The appellants contend that Division 1B was introduced to cover the whole subject matter of the exposure to payroll tax in respect of employment agency arrangements. They point to the comprehensive nature of the matters dealt with in support of the contention that it was intended to be an exhaustive statement of the matters upon which the imposition of payroll tax depends in relation to employment agents.
Further, they point to the comments of Santow and Handley JJA in Moore Park Gardens Management Pty Ltd v Chief Commissioner of State Revenue[38] in respect of s 3C of the previous New South Wales legislation. While not needing to determine the issue in that case, the majority indicated a view that s 3C is a self-contained regime exhaustively governing the liability to pay payroll tax by employment agents.
[38](2006) 62 ATR 628 at [79]-[81].
The appellants argue that Division 1B was based on Division 8 of the New South Wales legislation which was in itself modelled on s 3C, while accepting that there are differences in the legislation. In these circumstances, it is submitted that this Court should take the same view as that taken by Santow and Handley JJA in their comments in Moore Park.

Again, in SAS Trustee Corporation v Miles,[90] the purpose of statutory construction received further comment as follows:
[90](2018) 265 CLR 137.
(a)per Kiefel CJ, Bell and Nettle JJ at [20]:
“[20]    The starting point for ascertainment of the meaning of a statutory provision is, of course, the text of the provision considered in light of its context and purpose.[91] Where the text read in context permits of more than one potential meaning, the choice between those meanings may ultimately turn on an evaluation of the relative coherence of each with the scheme of the statute and its identified objects or policies...[92]”.
(b)per Gageler J at [41]:
“[41]    Statutory construction is the process by which meaning is attributed to statutory text.[93] In a doubtful case, it involves constructional choice.[94] The statutory text must be considered from the outset in context[95] and attribution of meaning to the text in context must be guided so far as possible by statutory purpose[96] on the understanding that a legislature ordinarily intends to pursue its purposes by coherent means.[97]”
(c)per Edelman J at [64]:
“[64]    The task of statutory construction involves the legal application of the meaning of statutory words, as interpreted, to the facts of a case. In Federal Commissioner of Taxation v Consolidated Media Holdings Ltd,[98] this Court said that the task of statutory construction must begin and end with the text of the statute. That statement does not mean that the text of a statute must be interpreted only according to the range of semantic meanings of the individual words. It means only that the interpretation of a statute, like any other legal instrument, is an interpretation of its words. Those words are interpreted in their context and in light of their purpose although legal rules can sometimes exclude or restrict the use of some context. In ascertaining the reasonably intended meaning of Parliament context is, literally, those matters to be considered (simultaneously) together with the text. Context can give words an interpretation that is the opposite of their ordinary meaning and grammatical sense.[99] Context can also permit a construction of words that excludes their application to matters that would have fallen within the application of their literal meaning.[100] However, as with contractual interpretation, where ‘the clearer the natural meaning the more difficult it is to justify departing from it’,[101] so too in statutory interpretation ‘questions of degree arise’ and it will be more difficult to displace an interpretation that ‘has a powerful advantage in ordinary meaning and grammatical sense’.[102]”
[91]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; 71 ALJR 312 per Brennan CJ, Dawson, Toohey and Gummow JJ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]; 72 ALJR 841 per McHugh, Gummow, Kirby and Hayne JJ; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]; 87 ALJR 98; SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at [14] per Kiefel CJ, Nettle and Gordon JJ.
[92]Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531 at [66]; 88 ALJR 473 per Gageler and Keane JJ; SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at [38] per Gageler J.
[93]Thiess v Collector of Customs (2014) 250 CLR 664 at [22]; 88 ALJR 514.
[94]SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at [38].
[95]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; 71 ALJR 312.
[96]Thiess v Collector of Customs (2014) 250 CLR 664 at [23]; 88 ALJR 514; SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at [14], [39]-[41], [43].
[97]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [70]-[71]; 72 ALJR 841.
[98]Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]; 87 ALJR 98.
[99]See, eg, Associated Newspapers Ltd v Wavish (1956) 96 CLR 526 at 528; Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 at 880; Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 at 630; 58 ALJR 469; Burragubba v Queensland (2015) 236 FCR 160 at [18].
[100]Blackstone, Commentaries on the Laws of England (1765), Introduction, §2, p 60; Ex parte Walsh; Re Yates (1925) 37 CLR 36 at 91, 93.
[101]Arnold v Britton [2015] AC 1619 at [18].
[102]Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321; 55 ALJR 434; Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 at 535-536; 66 ALJR 231; Telstra Corporation Ltd v Australasian Performing Right Association Ltd (1997) 191 CLR 140 at 186; 71 ALJR 1312.
The restatement of the “construction method” in R v A2[103] further clarifies the correct approach to construction.
[103]R v A2 [2019] HCA 35.
Kiefel CJ and Keane J stated at [32] to [37]:
“[32] The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled. It commences with a consideration of the words of the provision itself, but it does not end there. A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable,[104] has long been eschewed by this Court. It is now accepted that even words having an apparently clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete.[105] This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision.[106]
[33]Consideration of the context for the provision is undertaken at the first stage of the process of construction.[107] Context is to be understood in its widest sense. It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. It extends to the mischief which it may be seen that the statute is intended to remedy.[108] ‘Mischief’ is an old expression.[109] It may be understood to refer to a state of affairs which to date the law has not addressed. It is in that sense a defect in the law which is now sought to be remedied.[110] The mischief may point most clearly to what it is that the statute seeks to achieve.
[34]This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction. These considerations were emphasised in the decisions of this Court upon which the Court of Criminal Appeal placed some weight.
[35]The joint judgment in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue[111] rejected an approach which paid no regard to the words of the provision and sought to apply the general purpose of the statute, to raise revenue, to derive a very different meaning from that which could be drawn from the terms of the provision. The general purpose said nothing meaningful about the provision, the text of which clearly enough conveyed its intended operation.[112] Similarly, in Saeed v Minister for Immigration and Citizenship[113] the court below was held to have failed to consider the actual terms of the section. A general purpose of the statute, to address shortcomings identified in an earlier decision of this Court, was not as useful as the intention revealed by the terms of the statute itself. In Baini v The Queen,[114] it was necessary to reiterate that the question of whether there had been a ‘substantial miscarriage of justice’ within the meaning of the relevant provision required consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials, other cases and different legislation.
[36]These cases serve to remind that the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words. As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision.
[37]None of these cases suggest a return to a literal approach to construction. They do not suggest that the text should not be read in context and by reference to the mischief to which the provision is directed.[115] They do not deny the possibility, adverted to in CIC Insurance Ltd v Bankstown Football Club Ltd,[116] that in a particular case, ‘if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance’. When a literal meaning of words in a statute does not conform to the evident purpose or policy of the particular provision, it is entirely appropriate for the courts to depart from the literal meaning.[117] A construction which promotes the purpose of a statute is to be preferred.[118]”
[104]See, eg, Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case") (1920) 28 CLR 129 at 162 per Higgins J; [1920] HCA 54.
[105]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28.
[106]Bennion, Statutory Interpretation, 3rd ed (1997) at 343-344, referred to in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78].
[107]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69].
[108]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.
[109]Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638].
[110]Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg [1975] AC 591 at 614; Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 509; [1978] HCA 30; Wacando v The Commonwealth (1981) 148 CLR 1 at 17; [1981] HCA 60.
[111](2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41.
[112]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 46-48 [47]-[53].
[113](2010) 241 CLR 252 at 265 [32]-[34]; [2010] HCA 23.
[114](2012) 246 CLR 469 at 476 [14]; [2012] HCA 59.
[115]See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 46-47 [47].
[116](1997) 187 CLR 384 at 408.
[117]Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321; [1981] HCA 26.
[118]Interpretation Act 1987 (NSW), s 33.
Further, at [58]:
“A purposive approach of this kind does not suggest that the language of a statutory provision is to be ignored. It is rather that a broader meaning of the language is to be preferred over its ordinary or grammatical meaning. It is necessary to do so to give effect to the provision’s purpose.”
Most recently, in Westpac Securities Administration Ltd v Australian Securities and Investments Commission[119] Gordon J described the construction task at [54]:
“[The section] is to be read as a whole and given its ordinary meaning, in light of its context and purpose.[120] It is not to be dissected into separate words or phrases, the meanings of which are then amalgamated into some composite meaning.[121]”
[119][2021] HCA 3.
[120]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 31 [4], 46-47 [47]; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 368 [14].
[121]See Project Blue Sky (1998) 194 CLR 355 at 381 [69], 382 [71]; Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 391 [29].
Construction of PTA
Applying these principles of construction, I have reached the conclusion that the construction found by the Chief Justice at first instance, and as contended for by the respondent, is the correct construction. That is, Division 1B does not apply to common law employers and consequently, employers are not employment agents.
The appellants’ starting position is that a common law employer comes within the ordinary and natural meaning of “employment agency contract”. Emphasis is placed on the width of the word “procures” in arriving at that meaning.
That may well be the case but that is not the end of the construction exercise. To do so is to ignore the role of context in construing the text, contrary to the principles outlined above.
The appellants also rely heavily on the importance of uniformity of interpretation of the Queensland legislation with “substantially the same” legislation in New South Wales and Victoria. Section 131 refers to “enhance the consistency” and it is implicit in this language that there may be actual differences. A uniform interpretation may not be possible, particularly where the Queensland amendments were made to the existing legislation as opposed to a redraft of the entire Act as was done in both New South Wales and Victoria. This is not the case where the same Act was passed in all states. It remains necessary to undertake the construction task and to construe the Queensland statutory provisions.
This position is heightened given that Division 8 of the current New South Wales and Victorian legislation (which is in substantially the same form as Division 1B) has not been considered at appellate Court level or by a superior court. The construction exercise to be undertaken by this Court is not greatly assisted by the authorities referred to in respect of the previous New South Wales provision or more general concepts.
The appellants also seek to identify “a purpose” for applying Division 1B to common law employers. It is acknowledged that the “overarching purpose” of introducing employment agency contract provisions was anti-avoidance. That is, the Division was designed to capture for the imposition of payroll tax, amounts paid to persons who performed duties akin to those of employees where they were done for a client.
However, “a” purpose is sought to be found by the appellants in the exemption from payroll tax where the client is a not-for-profit organisation. The appellants point to the purpose of benefiting charities and the importance of the exemption applying to all “labour-hire” arrangements used by a not-for-profit organisation.
This approach runs the risk of conveniently selecting a purpose and relying on that for the construction exercise to the detriment of the primary purpose of the legislation and other contextual factors. That cannot be what was envisaged by the role of purpose in the construction methodology.
This is even more apparent when the 2017 New South Wales amendment is considered. While that amendment does extend the exemption from payroll tax for certain charitable organisations to common law employees, it required a specific amendment to achieve that outcome. The Queensland PTA does not have such a provision. The starting point for the construction exercise cannot be that the purpose sought to be relied upon by the appellants is such as to overcome the other factors supporting a construction that Division 1B does not apply to common law employers.
The issue at the heart of this appeal is when does Division 1B apply. This is to be considered in the context of the PTA as a whole. It is upon a consideration of the text in context that the various factors supporting a construction that the provisions in Division 1B do not apply to the employer/employee relationship become apparent.
Considering the text in context, the factors that support this construction are:
(a)The “overarching purpose” of Division 1B is to extend liability to payroll tax to counter avoidance of tax by providers of labour, where the worker performs duties as if they were an employee of the client.
(b)The language in the provisions in Division 1B is to bring arrangements for the provision of labour that would not otherwise be liable for payroll tax within the scope of Division 1 and thereby liable for payroll tax.
(c)The liability for payroll tax arises under Division 1 and by operation of three deeming provisions in Division 1B certain persons and amounts not otherwise caught by Division 1 are brought within the scope of payroll tax liability in Division 1.
(d)Division 1 remains the main operative provision and is augmented by Division 1B.
(e)This is also consistent with Division 1A that has similar deeming provisions and also brings independent contractors within the operation of Division 1.
(f)The PTA provisions are to be read as a whole and also in the sequence in which they are drafted.[122] The comments of Priestly JA, in Patman v Fletcher’s Fotographics Pty Ltd[123] are apt in undertaking the current task:
[122]Girardi v Commissioner of State Taxation [2013] SASC 43 at [8].
[123](1984) 6 IR 471, 474–5.
“… I see no reason why the Act should not be read in the ordinary way in which a document is read, that is, from the beginning onwards. In the ordinary course of reading, s. 4, although of course it must be read with both what precedes it and follows it, must be read after s. 3 and further, in the ordinary course it seems to me that it must be read in the light of s. 3. It is preposterous, in the literal sense, to read s. 4, make assumptions concerning its purpose based on its language, without reference to what has preceded it and then to read s. 3 in the light of the purpose thus discerned in s. 4. A much sounder way of reaching what the draftsman's purpose was is to read his Act in the sequence in which he wrote it. …”
(g)By operation of ss 9, 10 and 12 in Division 1 employers are liable to payroll tax on wages paid by common law employers to employees. The definition of “wages” captures amounts paid “to an employee as an employee”.
(h)As a result, subject to any applicable exemptions in Division 2, liability for payroll tax arises where an employer pays an employee wages.
(i)The definition of “wages” is extended by the listed subparagraphs to include amounts that may not otherwise be caught as wages. By way of example, (c) remuneration to a company director would not usually be considered “wages properly so called” but is defined to be included. Relevantly, (i) is an amount taken to be wages under another provision of the PTA.
(j)The extension in (i) of the definition of wages has the effect that under Division 1 a person who is not a common law employer will be liable for payroll tax on amounts paid which are “taken to be wages” under another provision of the PTA. Section 13J is such a provision and is expressly referred to in the note to (i).[124]
(k)Division 1B operates to include payments made under employment agency contracts within wages and the liability for payroll tax under Division 1. It deems employment agents to be employers; workers providing services to clients to be employees; and amounts paid to such workers under employment agency agreements to be wages for the purposes of the PTA.
(l)The phrase “for the [PTA]” used in ss 13H, 13I and 13J recognises that the main operative provisions in the PTA to “impose a tax upon employers in respect of certain wages”[125] are contained in Division 1.
(m)The deeming provisions in effect create a “legal fiction” and would have no operation where that was actually the true fact. For example, where the employment agent is an employer the deeming provision would have no work to do. Similarly, where the amounts paid by an employment agent are already wages then there is no need for the “legal fiction” to operate to include the amount within the definition of “wages” and within the scope of liability for payroll tax.
(n)The deeming provisions in ss 13H, 13I and 13J of the PTA are not to be construed more broadly than what is required to achieve their purpose. This principle was recently discussed by Griffiths J in National Home Doctor Service Pty Ltd v Director of Professional Services Review[126] where his Honour stated:
“… a ‘deeming provision’ of a kind which is to be construed no more broadly than that which is required to achieve its purpose (as suggested, for example, by Gageler J in Wellington Capital Ltd v Australian Securities Investment Commission [2014] HCA 43; 254 CLR 288 at [51]). His Honour’s comments there were addressed to what was described as a ‘legal fiction’. His Honour said that ordinarily ‘a legal fiction is not to be construed beyond that required to achieve the object of its incorporation’. The importance of considering the purpose for which a statutory fiction is created was emphasised by Griffith CJ in Muller v Dalgety & Company Ltd [1909] HCA 67; 9 CLR 693 at 696. A distinction is to be drawn between two different types of ‘deeming provisions’ as described by Windeyer J in Hunter Douglas Australia Pty Ltd v Perma Blinds [1970] HCA 63; 122 CLR 49 at 65. Some deeming provisions create a statutory fiction in the sense that the meaning of a concept is extended artificially to include something which would not otherwise be included in the concept. That is to be distinguished from a deeming provision which simply operates as a source of designation and does not involve any extension of meaning of the relevant concept. An example of that kind of deeming provision was identified by Windeyer J in Hunter Douglas, when he stated that a provision in the Trade Marks Act 1955 (Cth) which provided that “… a trade mark shall be registered as of the date of the lodging of the application for registration, and that date shall be deemed… to be the date of registration” did not create a fictional date of registration, but rather did no more than designate what the date should be. The phrase at the foot of s 94(1) whereby the Director ‘is taken to have made a decision’ at the end of the 12 month period is properly to be viewed as a statutory fiction because it operates to deem a decision to have been made at a point in time when no such decision was in fact made.”
(o)This purpose is achieved by bringing the captured relationships not otherwise liable to payroll tax within the scope of Division 1. These provisions and Division 1B more widely do not replace a charge to payroll tax on wages paid by an employer to an employee.
(p)The absence of an express exclusion in s 13G and/or Division 1B where the employment agent is or becomes the common law employer is not determinative. The Queensland legislation contained a carve out of this nature prior to the 2008 amendments. However, the effect of the deeming provisions in ss 13H, 13I and 13J is that common law employment relationships are not within the scope of Division 1B. They are not captured by the “legal fiction”. Consequently, it was not necessary to exclude the actual fact of being an employer as that scenario is already captured in Division 1. There was no change in meaning in respect of employers: the amendments were directed at extending the charge to payroll tax to other non-employer/employee relationships.
[124]Section 7 of the PTA states: “A note in the text of this Act is part of the Act.” The note can therefore be considered as part of the context.
[125]Long title of the PTA.
[126][2020] FCA 1016 at [55]. See also Wellington Capital Ltd v Australian Securities and Investments Commission (2014) 254 CLR 288 per Gageler J at [51]-[54].

It is also necessary to consider whether this construction results in a conflict between Division 1 and Division 1B. I have reached the view that it does not. This conclusion is based on the following considerations:
(a)The appellants’ contention that Division 1B operates as a code is not established on a consideration of the PTA as a whole. It does not operate as an “exhaustive regime designed to cover the field” in respect of the imposition of payroll tax on employment agents to the exclusion of the ordinary charge of payroll tax contained in Division 1.
(b)Further, s 13J(2) operates to cancel the “legal fiction” created by s 13J(1). It does not have an effect on the operation of the provisions in Division 1, and consequently has no impact on common law wages paid to an employee by an employer.
(c)This is also supported by the principle outlined above that deeming provisions are not to be construed to have a legal operation beyond that required to achieve the object for which they were included.
(d)Section 13J only deals with “deemed wages”, that is it deals with the “legal fiction” extending the scope of wages to include other payments. It does not regulate actual wages.
(e)Division 1B, and in particular s 13J, does not contain a general exemption. Parliament could have included a specific exemption if that is what was intended. As the Chief Justice recognised, this could have been done by including a reference to “the Act” rather than “ss (1)” in s 13J(2). The absence of a wider exemption of that nature supports the position that such an outcome was not intended.
(f)The appellants’ contention that this construction would result in the general provisions derogating from the special provisions is also not established on the proper construction of the legislation. The argument is that any payments to deemed employees by deemed employers are caught by the general words in the chapeau thereby negating the benefit in s 13J, and giving rise to a conflict. The payments captured by the deeming provision in s 13J(1) are brought into the definition of “wages” in (i), not through the chapeau. The words “to an employee as an employee” in the chapeau to the definition of wages safeguards against this outcome.
(g)Further, when the deeming provisions are construed in accordance with the principle identified by Griffiths J in National Home Doctor Service Pty Ltd v Director of Professional Services Review[127] this supports there being no conflict, consistent with the primary judge’s finding. The “legal fiction” created is only to the extent required for the purpose of what is required by the PTA to be done. Here that is for the liability for payroll tax to arise, not for the payments made to the worker to be made to them “as an employee”. If that was the case, the deeming provision in s 13J(1) would not be required at all. This also tends to support there being no conflict.
(h)In the absence of a conflict, the generalia specialibus non derogant principle does not apply.
(i)Further, the generalia specialibus non derogant principle does not apply where the specific provision adds additional powers to those contained in the general provision. The provisions in Division 1B can be classified as additional powers as they operate to extend the power to levy payroll tax on amounts paid under employment agency contracts that would not be caught under Division 1. That is, it is an augmentation of the general powers. Consistent with the principle recognised in Australian Securities and Investments Commission v Administrative Appeals Tribunal[128] the specific provision should not be used to read down the general provision:
“… The insertion of an amending provision dealing with a specific issue (in this case, a power to prohibit or restrict the publication of the names and addresses of witnesses) should not be used to read down the natural and ordinary meaning of other provisions. It should be construed as an additional power ...”
(j)Accordingly, there is no basis to contend that Division 1B prevails over Division 1.
[127][2020] FCA 1016 at [55]. See also Wellington Capital Ltd v Wellington Capital Ltd v Australian Securities Investment Commission 254 CLR 288 per Gageler J at [51] to [54].
[128](2009) 181 FCR 130 at [78].
Considerations of context also require some comment to be made in respect of the caselaw on the previous New South Wales provisions and also the extrinsic material. These factors also tend to support the construction that Division 1B does not apply to common law employers:
(a)Section 3C(4) of the PTA 1971 (NSW) (the previous New South Wales provisions) provided:
“…[a]n employment agent is not liable to pay-roll tax under this Act in relation to an employment agency contract”.
(b)The language of s 3C is quite different to the language in s 13J(2) PTA (and also s 40 of the current New South Wales PTA). The language in s 3C may have an operation similar to that contended for by the appellants in this case: that is exempting payments made by an employment agent to an employee under an employment agency contract.
(c)The language of s 13J(2) is narrower in its operation. It cancels out the deeming effect in s13J(1). That is, it reverses the creation of the “legal fiction”. It makes a payment deemed to be wages, not wages.
(d)The trial judge’s conclusion that the appellants’ construction of s 13J(2) would require impermissible “reading in of words”[129] is not in error. The words in s 13J(2) cannot operate to achieve the same result as s 3C PTA 1971 (NSW) without something further.
(e)Consequently, reliance on the authorities on the previous New South Wales provisions does not provide any real assistance in the construction exercise being undertaken.
(f)The comments in Moore Park, whilst obiter, assist to the limited extent of highlighting how s 3C may be interpreted. But it does not directly assist with the construction of the current provision.
(g)The statement in s 131 PTA that the amendments were intended to enhance the consistency of the PTA with the New South Wales and Victorian legislation does not justify reliance on caselaw dealing with earlier versions of legislation that had distinctly different wording.
(h)The extrinsic material is also consistent with this construction:
(i)The Second Reading Speech prior to the introduction of the first provision dealing with employment agents describes the provisions as being:
“… to ensure that providers of labour could not, by virtue of some uncertainty as to the identity of the workers’ employer, produce the result that no payroll tax was paid in respect of those workers”.[130]
(ii)The Explanatory Note to the 2008 amendments supports there being no change in the purpose. The operation of the Employment Agent Provisions is described as:
“In Queensland, pay-roll tax applies to certain payments made by employment agents which would not fall within the common law definition of ‘wages’. Liability arises where an agent procures for a client the services of an individual worker to perform employee-like functions and the worker does not become an employee of either the agent or the client. The employment agent is treated as the worker’s employer if the agent receives payment from the client and pays the worker for the services. An example is temporary staff engaged through an agency.”[131]
[129]Reasons at [59].
[130]Second Reading Speech prior to the introduction of the first Employment Agent Provisions in s 3 PTA (Hansard (Qld), 21 December 1983 at 1082) with effect from 1984 as well as amendments made to the Employment Agent Provisions in 1996 (Explanatory Note to the Revenue Laws Amendment Bill (No 2) 1996 (Qld).
[131]Explanatory Note to the Pay-roll Tax (Harmonisation) Amendment Bill 2008 (Qld) at p 12.
As identified above, in the Notice of Appeal the appellants allege four errors in the trial judge’s reasoning:
(a)Ground 1 – an error in law in finding that division 1B of the PTA did not apply to common law employees and common law employers.
(b)Ground 2 – error in law in finding that the expression “procures the services of another” in section 13G(1) of the PTA did not apply in circumstances where an employer directs, or engages, its employees to provide services for a client.
(c)Ground 3 – error in law in finding that employers are not employment agents within the meaning of employment agents in section 13G(1) of the PTA.
(d)Ground 4 – error in law in finding that the effect of sections 13J and section 14(2) of the PTA was not to exempt the appellants from paying payroll tax.
The Chief Justice’s conclusions and reasons are consistent with the view I have reached as to the correct construction of the PTA and the reasons for that view outlined above. Accordingly, the alleged errors of law in her Honour’s reasoning have not been established.
In these circumstances, the appeal should be dismissed.
In relation to costs, the position of the appellants is that if the appeal is unsuccessful they do not separately seek to overturn the costs order made on 27 August 2020 after the notice of appeal was filed.[132]
[132]See Appellants’ Reply Submissions at [45].
Accordingly, the costs order should be that the appellants pay the respondent’s costs of the appeal on the standard basis.

CITATION:	Compass Group Education Hospitality Services Pty Ltd & Anor v Commissioner of State Revenue [2021] QCA 98
PARTIES:	COMPASS GROUP EDUCATION HOSPITALITY SERVICES PTY LTD ABN 60 129 203 998 (first appellant) COMPASS GROUP HEALTHCARE HOSPITALITY SERVICES PTY LTD ABN 79 114 320 615 (second appellant) v COMMISSIONER OF STATE REVENUE (respondent)
FILE NO/S:	Appeal No 7920 of 2020 SC No 1026 of 2019
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane – [2020] QSC 184 (Holmes CJ)
DELIVERED ON:	11 May 2021
DELIVERED AT:	Brisbane
HEARING DATE:	25 November 2020
JUDGES:	Morrison and Philippides JJA and Williams J
ORDERS:	1. Appeal dismissed. 2. The appellants to pay the respondent’s costs on the standard basis.
CATCHWORDS:	TAXES AND DUTIES – PAYROLL TAX – OBJECTIONS, APPEALS AND REVIEWS – where the appellants who used their own employees to provide services to charitable institutions – where charitable institutions are exempt from payroll tax pursuant to s 14(2) of the Payroll Tax Act 1971 (Qld) (PTA) – where the respondent assessed the appellants as being liable to pay payroll tax on wages paid to their employees, whose services had been provided to the charitable institutions – where the trial judge disallowed the appeal and held that Div 1B of the PTA has no application to common law employers – where the appellants contend that Div 1B of the PTA applies to a common law employer and the dictionary definition of “wages” does not apply in respect of an employment agency contract, therefore the appellants are entitled to an exemption under s 13J(2) of the PTA, with the consequence that no liability for payroll tax arises – where the respondent contends that the “only sensible construction” of the Employment Agent Provisions in Div 1B within the context of the PTA as a whole is one which does not apply those provisions to employer/employee relationships and Div 1B, in any event, does not cover the field of liability to payroll tax for employment agents – whether Div 1B of the PTA applies to a common law employer in circumstances where an employment agency contract exists, under which the employment agent provides the services of its employees to a client – whether if Div 1B of the PTA extends to a common law employer, whether the dictionary definition of “wages” applies to remuneration paid by an employment agent to its employee/service provider so as to make the employment agent liable for payroll tax – whether s 13J(2) of the PTA has the effect that the remuneration paid by the employment agent to its employee/service provider is exempt from the application of the deemed wages provision in s 13J(1) Acts Interpretation Act 1954 (Qld), s 14A Payroll Tax Act 1971 (NSW), s 3C Pay-roll Tax Act 2007 (NSW), s 36A, s 40 Payroll Tax Act 1971 (Qld), s 8A, s 9, s 10, s 11, s 12, s 13G, s 13H, s 13I, s 13J, s 13K, s 13L, s 13LA, s 14, s14A, s 15, s 15A, s 131 Pay-roll Tax (Harmonisation) Amendment Act 2008 (Qld), s 131 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41, followed Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130; [2009] FCAFC 185, followed Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55, followed JP Property Services Pty Ltd v Chief Commissioner of State Revenue (2017) 106 ATR 639; [2017] NSWSC 1391, considered Moore Park Gardens Management Pty Ltd v Chief Commissioner of State Revenue (2006) 62 ATR 628; [2006] NSWCA 115, cited National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 276 FCR 382; [2020] FCA 1016, cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; (1998) 72 ALJR 841; [1998] HCA 28, cited R v A2 (2019) 93 ALJR 1106; [2019] HCA 35, followed Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-stock Corporation (1980) 29 ALR 333; [1980] FCA 38, cited SAS Trustee Corporation v Miles (2018) 265 CLR 137; (2018) 92 ALJR 1064; [2018] HCA 55, cited SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34, followed Unions NSW v New South Wales (2019) 264 CLR 595; (2019) 363 ALR 1; [2019] HCA 1, cited Westpac Securities Administration Ltd v Australian Securities and Investments Commission (2021) 95 ALJR 149 [2021] HCA 3, cited
COUNSEL:	B O’Donnell QC, with E Goodwin, for the appellants M H Hindman QC, with A G Psaltis, for the respondent
SOLICITORS:	Herbert Smith Freehills for the appellants GR Cooper, Crown solicitor for the respondent