Health Service Pty Ltd v Chief Commissioner of State Revenue - [2014] NSWCATAD 83

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83
Hearing dates: 26 May 2014
Decision date: 23 June 2014
Jurisdiction: Administrative and Equal Opportunity Division
Before: A Verick, Senior Member
Decision:
The assessments under review are set aside.

Catchwords: TAXES AND DUTIES - Payroll tax - Employment agency contracts - Whether taxpayer procured the services of workers for clients - Whether contracts were employment agency contracts when worker in a common law employer/employee relationship - Whether Division 8 in Part 3 of Payroll Tax Act 2007 constitutes an exclusive regime to determine liability under an employment agency contract
Legislation Cited: Payroll Tax Act 2007 (NSW)
Administrative Decisions Tribunal Act 1997
Administrative Decisions Review Act 1997
New South Wales Civil and Administrative Tribunal Act 2013
Taxation Administration Act 1996 (NSW)
Payroll Tax Act 1971 (NSW)
Pay-Roll Tax Amendment Act 1987 (NSW)
State Revenue Legislation (Miscellaneous Amendments) Act 1998 (NSW)
State Revenue Legislation Further Amendment Act 1999 (NSW)
Industrial Relations Act 1991 (NSW)
Industrial Arbitration Act 1940 (NSW)
Fair Trading Act 1987
Pay-roll Tax Act 1971 (Vic)
Taxation Administration Act 1997 (Vic)
Cases Cited: Drake Personnel Ltd v Commissioner of State Revenue [2000] VSCA 122
Moore Park Gardens Management Limited v Chief Commissioner of State Revenue [2004] NSWSC 417
Moore Park Gardens Management Ltd v Chief Commissioner of State Revenue [2006] NSWSC 115
Freelance Global Ltd v Chief Commissioner of State Revenue [2014] NSWSC 127
Refrigerated Express Lines (A/Asia) Pty. Ltd. v. Australian Meat And Live-Stock Corporation And Others (No. 2) 44 FLR 455
Category: Principal judgment
Parties: Health Service Pty Ltd
Chief Commissioner of State Revenue
Representation: Counsel
I Latham (Applicant)
S Kaur-Bains (Respondent)
Binetter Vale Lawyers (Applicant)
Crown Solicitor (Respondent)

File Number(s): 136078

reasons for decision

The Chief Commissioner ("the respondent") assessed the Health Service Pty Ltd ("the applicant") to payroll tax for the years ended 30 June 2010 to 30 June 2012 and the period 1July 2012 to 30 March 2013. The applicant objected to the assessments on the grounds that the wages paid during the relevant period were exempt wages under s 40 of the Payroll Tax Act 2007 (the "PRTA 2007"). But the respondent disallowed the objection. This is an application pursuant to s 96 of the Taxation Administration Act 1996 ("the TA Act") for the review of the relevant assessments issued to the applicant.

This application was instituted in the Revenue Division of the Administrative Decisions Tribunal ('the ADT') under the provisions of the Administrative Decisions Tribunal Act 1997 ('the ADT Act'). On 1 January 2014, the ADT with a number of other Tribunals in New South Wales, were abolished and their jurisdiction and functions integrated into the Civil and Administrative Tribunal of New South Wales ('the NCAT') established under the Civil and Administrative Tribunal Act 2013 ('the NCAT Act'). Because the proceedings in this matter were 'unheard proceedings' on 1 January 2014 as defined in clause 6(1) of Schedule 1…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Health Service Pty Ltd v Chief Commissioner of State Revenue

Details

AGLC: Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83
Case: [2014] NSWCATAD 83
Decision Date: 23 June 2014

CaseChat Overview and Summary

Health Service Pty Ltd brought proceedings against the Chief Commissioner of State Revenue, contesting the latter's assessments that it was liable for payroll tax in respect of workers it engaged through contracts. The case centred around whether these contracts constituted employment agency contracts, under which the taxpayer would be liable for payroll tax. The Federal Court of Australia was tasked with determining whether the contracts in question were indeed employment agency contracts, and if the Division 8 in Part 3 of the Payroll Tax Act 2007 constituted an exclusive regime to determine liability under such contracts.

The central legal issues involved interpreting the meaning of an employment agency contract as defined in the Payroll Tax Act 2007 and determining whether the Division 8 in Part 3 of the Act was an exclusive regime for resolving payroll tax liabilities under such contracts. The court had to assess whether the contracts between Health Service Pty Ltd and the workers were employment agency contracts, considering the common law employer/employee relationship between the worker and the client, and not the relationship between the worker and Health Service Pty Ltd. Additionally, the court needed to decide whether Division 8 in Part 3 of the Act provided an exclusive regime for determining payroll tax liability under an employment agency contract.

The court found that the contracts between Health Service Pty Ltd and the workers were not employment agency contracts as defined in the Act, as they did not procure the services of workers for clients. Instead, the workers were in a common law employer/employee relationship with the clients, not Health Service Pty Ltd. Furthermore, the court held that Division 8 in Part 3 of the Act did not constitute an exclusive regime to determine liability under an employment agency contract, as it was not intended to cover all cases where payroll tax might be payable under an employment agency contract. Based on these findings, the Federal Court set aside the assessments under review.

Orders

Orders of the court

The assessments under review are set aside.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83
Hearing dates:	26 May 2014
Decision date:	23 June 2014
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	A Verick, Senior Member
Decision:	The assessments under review are set aside.
Catchwords:	TAXES AND DUTIES - Payroll tax - Employment agency contracts - Whether taxpayer procured the services of workers for clients - Whether contracts were employment agency contracts when worker in a common law employer/employee relationship - Whether Division 8 in Part 3 of Payroll Tax Act 2007 constitutes an exclusive regime to determine liability under an employment agency contract
Legislation Cited:	Payroll Tax Act 2007 (NSW) Administrative Decisions Tribunal Act 1997 Administrative Decisions Review Act 1997 New South Wales Civil and Administrative Tribunal Act 2013 Taxation Administration Act 1996 (NSW) Payroll Tax Act 1971 (NSW) Pay-Roll Tax Amendment Act 1987 (NSW) State Revenue Legislation (Miscellaneous Amendments) Act 1998 (NSW) State Revenue Legislation Further Amendment Act 1999 (NSW) Industrial Relations Act 1991 (NSW) Industrial Arbitration Act 1940 (NSW) Fair Trading Act 1987 Pay-roll Tax Act 1971 (Vic) Taxation Administration Act 1997 (Vic)
Cases Cited:	Drake Personnel Ltd v Commissioner of State Revenue [2000] VSCA 122 Moore Park Gardens Management Limited v Chief Commissioner of State Revenue [2004] NSWSC 417 Moore Park Gardens Management Ltd v Chief Commissioner of State Revenue [2006] NSWSC 115 Freelance Global Ltd v Chief Commissioner of State Revenue [2014] NSWSC 127 Refrigerated Express Lines (A/Asia) Pty. Ltd. v. Australian Meat And Live-Stock Corporation And Others (No. 2) 44 FLR 455
Category:	Principal judgment
Parties:	Health Service Pty Ltd Chief Commissioner of State Revenue
Representation:	Counsel I Latham (Applicant) S Kaur-Bains (Respondent) Binetter Vale Lawyers (Applicant) Crown Solicitor (Respondent)
File Number(s):	136078