Girardi v Commissioner of State Taxation

[2013] SASC 43

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

GIRARDI v COMMISSIONER OF STATE TAXATION

[2013] SASC 43

Judgment of The Honourable Justice Gray

5 April 2013

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - OTHER CASES

TAXES AND DUTIES - LAND TAX - OBJECTIONS AND APPEALS - IN GENERAL

The Commissioner of State Taxation assessed the appellant as being liable for land tax in relation to a property at Sellicks Beach - the appellant lodged a notice of objection - the Minister has not determined the objection - the appellant appealed to the Supreme Court of South Australia - the appellant has not paid the whole of the amount of the tax to which the appeal relates and has not sought the exercise of the Minister's discretion to permit the right of appeal to be exercised - the Commissioner brought an application to dismiss the appeal for disclosing no reasonable cause of action - whether the appeal is incompetent.

Held:  Appeal dismissed - the appeal is incompetent.

Taxation Administration Act 1996 (SA) s 92, s 93, s 94 and Div 2 of Pt 10, referred to.
Metropolitan Gas Co v Federated Gas Employees’ Industrial Union (1924) 35 CLR 449; Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471; Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; Bradman v Allens Arthur Robinson (No 2) [2009] SASC 180, considered.

GIRARDI v COMMISSIONER OF STATE TAXATION
[2013] SASC 43

Civil

GRAY J.

1. On 3 May 2012, the Commissioner of State Taxation assessed Peter Girardi, the appellant, as being liable for land tax in relation to his property at 48 Esplanade, Sellicks Beach in the State of South Australia in the amount of $99,259.84.

2. On 3 August 2012, the appellant lodged a notice of objection in relation to the relevant assessment.  The Minister has not yet determined the objection.

3. On 31 January 2013, the appellant lodged an appeal to this Court pursuant to section 92 of the Taxation Administration Act 1996 (SA). The appellant has neither paid to the Commissioner the whole of the amount of the tax to which the appeal relates as assessed by the Commissioner, nor sought the exercise of the Minister’s discretion to permit the right of appeal to be exercised.

4. The Commissioner considered that by operation of section 93 of the Taxation Administration Act the appeal is incompetent.  The Commissioner has brought an application pursuant to rule 193 of the Supreme Court Civil Rules 2006 (SA) to dismiss the appeal for disclosing no reasonable cause of action.  Rule 193 provides:

   The Court may dismiss proceedings if—

   (a)     the pleadings disclose no reasonable cause of action; or

   (b)     the proceedings are frivolous, vexatious or an abuse of the process of the Court.

5. Division 2 of Part 10 of the Taxation Administration Act is entitled “Appeals” and provides:

   92—Right of appeal

   A person who has made an objection may appeal to the Supreme Court if—

   (a)     the person is dissatisfied with the Minister's determination of the objection; or

   (b)     90 days (not including any period of suspension under section 88) have passed since the objection was lodged with the Minister and the Minister has not determined the objection and served notice of the determination on the person.

   93—Appeal prohibited unless tax is paid

   (1)     A taxpayer cannot exercise a right of appeal unless the taxpayer has paid to the Commissioner the whole of the amount of any tax to which the appeal relates as assessed by the Commissioner or by the Minister on the objection.

   (2)     However, the Minister has a discretion to permit the right of appeal to be exercised even though the tax has not been paid.

   (3)     A failure or refusal of the Minister to grant permission under subsection (2) is a non-reviewable decision.

   94—Time for appeal

   (1)     An appeal must be made by a person not later than 60 days after the date of service on the person of notice of the Minister's determination of the person's objection.

   (2)     However, if—

   (a)90 days (not including any period of suspension under section 88) have passed since the person's objection was lodged with the Minister; and

   (b)the Minister has not determined the objection and served notice of the determination on the person,

   the person may appeal at any time provided that the Commissioner is given not less than 14 days written notice of the person's intention to make the appeal.

   95—Appeals made out of time

   The Supreme Court has a discretion to allow a person to appeal after the end of the 60 day period but not to do so later than 12 months after the date of service on the person of notice of the Minister's determination of the person's objection.

   96—Grounds of appeal

   (1)     The appellant's and respondent's cases on an appeal are not limited to the grounds of the objection or the reasons for the determination of the objection or the facts on which the determination was made.

   (2)     However, if the objection was to a reassessment, any limitation of the matters to which the objection could relate under Division 1 applies also to the appeal.

   97—Onus on appeal

   On an appeal, the appellant has the onus of proving the appellant's case.

   98—Determination of appeal

   On an appeal, the Supreme Court may do one or more of the following:

   (a)     confirm or revoke the assessment or decision to which the appeal relates;

   (b)     make an assessment or decision in place of the assessment or decision to which the appeal relates;

   (c)     make an order for payment to the Commissioner of any amount of tax that is assessed as being payable but has not been paid;

   (d)     make any further order as to costs or otherwise as it thinks just.

   99—Interest to be included in refund resulting from appeal

   (1)     If the result of an assessment or decision by the Supreme Court on an appeal is that the appellant has overpaid tax, the amount of a refund of the tax overpaid must include interest on the amount overpaid calculated on a daily basis from the relevant date until the date it is refunded or otherwise applied under Part 4 at the market rate from time to time applying under Part 5.

   (2)     In subsection (1)—

   the relevant date means—

   (a)     the date of payment of the amount overpaid; or

   (b)the date on which the Commissioner made the assessment or decision to which the objection and the appeal relates,

   whichever is the later.

6. The Commissioner submitted that the effect of the legislation is to make payment of the assessment in full, a condition precedent to the exercise of the statutory right of appeal provided by section 92. Attention was drawn to section 93(1) and, in particular, to the words “[a] taxpayer cannot exercise a right of appeal unless the taxpayer has paid to the Commissioner the whole of the … tax … as assessed by the Commissioner or by the Minister on the objection.” The Commissioner further contended that the statutory condition precedent has application whether an objection has been determined or not. It was said that this was the effect of the terms of section 93(1).

7. The appellant submitted that the Taxation Administration Act provides separate rights of appeal under sections 92 and 94. Attention was drawn to the words “the person may appeal” within section 94(2). It was said that this was a separate and distinct statutory right of appeal to that provided by section 92. Counsel went so far as to suggest section 92 was of no relevance.

8. In my view, there is no substance to the appellant’s submission. The ordinary principles of statutory construction lead to its rejection. Section 94 does not grant a separate right of appeal. The section, as its heading indicates, regulates the time for appeal and the references to “[a]n appeal”, “may appeal” and “make the appeal” are all references to the right of appeal conferred by section 92. There is no reason to suggest Parliament would not have intended there to be a consistent interpretation to be given to these expressions. This is supported by the principles of construction that the Act is to be read as a whole[1] and that the statutory provisions are to be read in the sequence with which they were drafted.[2] Accordingly, sections 93 and 94 follow from section 92. This latter principle was conveniently summarised by Priestley JA in Patman v Fletcher’s Fotographics Pty Ltd: [3]

   … 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, s4, although of course it must be read with both what precedes it and follows it, must be read after s3 and further, in the ordinary course it seems to me that it must be read in the light of s3. It is preposterous, in the literal sense, to read s4, make assumptions concerning its purpose based on its language, without reference to what has preceded it and then to read s3 in the light of the purpose thus discerned in s4. 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. …

   [1]    See, Metropolitan Gas Co v Federated Gas Employees’ Industrial Union (1924) 35 CLR 449, 455; see also, Pearce and Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7^th ed, 2011) [4.2].

   [2]    See, Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471, 474-475; see also, Pearce and Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7^th ed, 2011) [4.5].

   [3]    See, Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471, 474-475.

9. The rejection of the appellant’s submissions would not lead to a harsh, capricious or manifestly unfair result. In circumstances of genuine hardship, application can be made to the Minister pursuant to section 93(2) for the exercise of the Minister’s discretion to permit the right of appeal to be exercised, even though the tax had not been paid. Counsel for the Commissioner acknowledged section 93(3), the privative provision, would not stand in the way of a taxpayer’s entitlement to seek relief on account of jurisdictional error with respect to a refusal by a Minister to favourably exercise a section 93(2) discretion.[4] 

   [4]    See, Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531, [100] where French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ observed:

   This is not to say that there can be no legislation affecting the availability of judicial review in the State Supreme Courts. It is not to say that no privative provision is valid. Rather, the observations made about the constitutional significance of the supervisory jurisdiction of the State Supreme Courts point to the continued need for, and utility of, the distinction between jurisdictional and non-jurisdictional error in the Australian constitutional context. The distinction marks the relevant limit on State legislative power. Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power. Legislation which denies the availability of relief for non-jurisdictional error of law appearing on the face of the record is not beyond power.

10. A dismissal of proceedings pursuant to rule 193 of the Supreme Court Civil Rules is not a determination of the claim on the merits: it is procedural and does not settle any underlying controversy.[5] The Commissioner accepted that the dismissal of the proceedings would not prevent the appellant from exercising a right of appeal pursuant to section 92 in the future, once the statutory restrictions on the exercise of that right are overcome.

    [5]    See, Bradman v Allens Arthur Robinson (No 2) [2009] SASC 180, [10]. In particular, Kourakis J observed:

    It is convenient, however, to observe that a dismissal of proceedings pursuant to r 193 or the inherent power is not a determination of the plaintiffs’ claim on the merits. A dismissal of an action because it discloses no reasonable cause of action or because it is frivolous, vexatious or an abuse of process, can involve no adjudication of an underlying legal matter. If proceedings are dismissed because they disclose no reasonable cause of action, by definition there cannot have been an adjudication of a cause of action that was not disclosed. Similarly, the dismissal of proceedings because they are frivolous, vexatious or an abuse of process involves no adjudication of the claim made; the very reason for the dismissal is that the claim does not merit adjudication and the making of a final judicial order. It follows that in such cases there can be no objection to a further action on the ground that the claim made is res judicata. It may of course be the case that the fresh action will be again dismissed pursuant to r 193 or the inherent power, or as an abuse of process, but both the original order and the subsequent order, if it is made, are procedural or adjectival and do not settle any underlying controversy.

    Although the decision of Kourakis J was reversed by the Full Court on appeal, it was not reversed on this point.

    Conclusion

11. Having regard to the foregoing, it follows that this appeal is incompetent.  The appeal is dismissed.