Hay v Commissioner for ACT Revenue

In the case of Hay v Commissioner for ACT Revenue, the applicant challenged the imposition of land tax and associated penalties and interest by the Commissioner for ACT Revenue. The applicant argued that the imposition of land tax should be considered either quarterly or for each separate rental period, leading to a re-application of penalty tax and interest each time. Additionally, the applicant claimed that the penalty tax rate should be reduced from 50% to 25% for unpaid land tax post-1 July 2004. The applicant also asserted that the decision-maker must be "comfortably satisfied" that the penalty tax rate is appropriate, as per the Briginshaw principle, and that the Commissioner did not properly consider the applicant's personal circumstances.

The legal issues before the court were whether the imposition of land tax occurred quarterly or for each separate rental period, which would affect the application of penalty tax and interest provisions. The court also had to determine if the standard of proof for imposing penalty tax, namely the Briginshaw principle, was correctly applied, and if the penalty tax rate was appropriately set. The applicant argued that the Commissioner did not properly consider their personal circumstances and that the reasons provided for the decision were inadequate, resulting in an error of law.

The court found in favour of the applicant, setting aside the decision under review and remitting it to the Commissioner for recalculation of penalty tax. The court directed that the penalty tax be reduced from 200% to 25% for the period 8 October 2002 to 30 June 2004, from 50% to 25% for the period 1 July 2004 to 31 December 2006, and from 50% to 30% for the period 1 January 2007 to 31 December 2010. The court also noted that the Commissioner agreed that an error in calculating the interest payable under section 19A(2) of the LT Act had occurred, and a refund was due to the applicant.