Fyna Projects Pty Ltd v Chief Commissioner of State Revenue

Fyna Projects Pty Ltd and others (the appellants) appealed to the Court of Appeal of New South Wales against a decision of the Chief Commissioner of State Revenue (the respondent) concerning payroll tax. The dispute centred on the nature and extent of the joint and several liability of members of a payroll tax group when the employer member defaults in paying the tax.

The primary legal issues before the Court of Appeal were whether members of a payroll tax group, other than the defaulting employer, were liable to pay "tax" and could be considered "taxpayers" for the purposes of the Payroll Tax Act 2007 (NSW). Further, the Court had to determine whether this joint and several liability could be established without prior legal proceedings, and if the Chief Commissioner had the power to issue a notice of assessment to a person subject to such liability, and whether that notice was conclusive evidence of liability.

The Court of Appeal affirmed the principles of joint and several liability under the Act, holding that all members of a payroll tax group are jointly and severally liable for the payroll tax payable by the designated group employer. This liability arises by operation of the statute and does not require separate legal proceedings to be established against each member. The Court reasoned that the purpose of the grouping provisions is to prevent tax avoidance and ensure the collection of payroll tax, and that the Chief Commissioner is empowered to issue a notice of assessment to any person liable for the tax, including those subject to joint and several liability. Such a notice is considered conclusive evidence of the assessed liability.

The appeal was dismissed, and the appellants were ordered to pay the respondent’s costs of the appeal.