John XXIII College v Commissioner for Act Revenue (Administrative Review) - [2016] ACAT 152

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

JOHN XXIII COLLEGE v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2016] ACAT 152

AT 41/2016
Catchwords: ADMINISTRATIVE REVIEW – stamp duty – whether entity charitable organisation entitled to concessional duty – charitable purposes – primary purpose – student residential accommodation purpose –ancillary purpose – religious purpose – education purpose – objects and activities

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 9, 68
Charitable Uses Act 1601
Duties Act 1999 (in force 1 July 2015 – 24 November 2015) ss4, 7, 10, 11, 12, 64
Payroll Tax Act 1987
Taxation Administration Act 1999 ss 104, 108A

Subordinate
Legislation: ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2) r 7
Residential Colleges Affiliation Statute 2013 cl. 6, 8, 9

Cases cited:Aid/Watch Incorporated v Commissioner of Taxation (2010) 241 CLR 539
Australian Institute of Management(Vic) v Commissioner of State Revenue (1995) 95 ATC 2179
Australian National University Union v Commissioner for ACT Revenue [1997] ACTAAT 214

Chesterman and Others v The Federal Commissioner of Taxation (1925) 37 CLR 317
Commissioners for Special Purposes of Income Tax v Pemsel (1891) AC 531
Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204
Inland Revenue Commissioners(UK) v McMullen [1981] AC 1
Law Institute of Victoria v Commissioner of State Revenue [2015] VSC 604
Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1
Stratton v Simpson (1970) 125 CLR 138
Thompson v Federal Commissioner of Taxation (1959) 102 CLR 315

Tribunal: Presidential Member E Symons

Date of Orders:           21 December 2016
Date of Reasons for Decision:         21 December 2016
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          AT 41/2016

BETWEEN:JOHN XXIII COLLEGE

Applicant
AND: COMMISSIONER FOR ACT REVENUE
Respondent

TRIBUNAL: Presidential Member E Symons

DATE:21 December 2016
ORDER

The Tribunal orders that:

The decision under review is confirmed.

………………………………..
Presidential Member E Symons

REASONS FOR DECISION

Background

The applicant purchased Block 27 Section 75 O’Connor in the ACT (‘the property’) in August 2015. In September 2015 the applicant lodged the contract and related transfer with the respondent together with documents from the Australian Charities and Not-for-profits Commission and a copy of the applicant’s constitution. The applicant submitted that the duty charged on the contract under the Duties Act 1999 (‘the Duties Act’) should be $20.00 as the applicant taxpayer is a charitable organisation.
The respondent assessed ad valorem duty on the transfer of the property to the applicant in the sum of $60,850.00. The notice of assessment was dated 7 October 2015 (‘the decision’). The duty concession under the Duties Act, subsection 64(2), chargeable to a charitable organisation was not granted.
The applicant, through its solicitors, JS O’Connor & Co, (‘the solicitors’) objected to the decision by letter dated 2 December 2015 on the basis that the transfer falls within subsection 64(2) of the Duties Act as in force between 1 July 2015 and 24 November 2015 and contended that the transfer of land was to a charitable organisation…

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.

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Details

AGLC: John XXIII College v Commissioner for Act Revenue (Administrative Review) [2016] ACAT 152
Case: [2016] ACAT 152
Decision Date: 21 December 2016

CaseChat Overview and Summary

John XXIII College, a provider of student residential accommodation, sought administrative review of a decision by the Commissioner for Revenue disallowing its objection to the assessment of stamp duty on the transfer of its property. The central issue was whether John XXIII College was entitled to the concessional rate of stamp duty available to charitable organisations under section 64(2) of the Duties Act. The dispute centred on whether the primary purpose of the College was charitable, specifically whether it was carried on for a religious or educational purpose. The case was heard by the Administrative Appeals Tribunal, which was required to determine the primary purpose of the College and whether it was carried on for a religious or educational purpose.

The Tribunal noted that the primary purpose of the College was to provide student residential accommodation. However, the College argued that it was also carried on for a religious and educational purpose, as evidenced by its sponsorship by the Dominican Fathers, its religious and educational activities, and its promotion of Christian values. The Tribunal considered the evidence provided by the College and concluded that while it was carried on for a religious and educational purpose, this was ancillary to its primary purpose of providing student residential accommodation. The Tribunal found that the College was not entitled to the concessional rate of stamp duty available to charitable organisations.

The Tribunal confirmed the Commissioner’s decision to disallow the College’s objection to the assessment of stamp duty. The Tribunal held that the College was not a charitable organisation within the meaning of the Duties Act and was therefore not entitled to the concessional rate of stamp duty. The Tribunal found that the primary purpose of the College was to provide student residential accommodation, and while it was carried on for a religious and educational purpose, this was ancillary to its primary purpose. The Tribunal held that the College did not meet the requirements for a charitable organisation under the Duties Act.

The Tribunal ordered that the decision under review be confirmed. The College was not entitled to the concessional rate of stamp duty and was liable to pay the full rate of duty on the transfer of its property.

Orders

Orders of the court

The Tribunal orders that:

1. The decision under review is confirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The tribunal’s powers in applications for administrative review are set out in section 68 of the ACAT Act. Section 68 provides:Review of decisions (1) This section applies if the tribunal reviews a decision by an entity. (2) The tribunal may exercise any function given by an Act to the entity for making the decision. Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104). (3) The tribunal must, by order— (a) confirm the decision; or (b) vary the decision; or (c) set aside the decision and— (i) make a substitute decision; or (ii) remit the matter that is the subject of the decision for reconsideration by the decision-maker in accordance with any direction or recommendation of the tribunal. The reviewable decision before the Tribunal is the respondent’s decision to disallow the applicant’s objection pursuant to section 104 of the TAA. Subsection 104(1) provides:(1)The commissioner must consider an objection and either allow the objection in whole or in part or disallow the objection. The Duties Act, relevantly, provides[7]:(a)dutiable property includes land in the ACT and a Crown Lease (section 10);(b)an agreement for sale or transfer of dutiable property constitutes a dutiable transaction for which duty is charged (section 7);(c)a liability for duty is charged when a transfer of dutiable property occurs or if a transfer of dutiable property is effected by an instrument, when the instrument is first executed (section 11); and(d)a transferee is liable to pay duty (section 12).[7] Respondent’s statement of facts and contentions [12] – [15] At the time the transfer of the property was lodged with the respondent, 1 September 2015, subsection 64(2) of the Duties Act then stated:64 Transfer of land to certain authorities and other bodies……(2)Duty of $20 is chargeable in respect of a grant or transfer of land to a hospital school or charitable organisation or to trustees in trust for a hospital, school or charitable organisation. Charitable organisation is defined in section 4 of the Duties Act as follows:“Charitable organisation” means an association, society, institution or body carried on for a religious, educational, benevolent or charitable purpose, other than one carried on for the purpose of securing pecuniary benefits to its members. In the statement of facts and contentions the applicant contends that it is a charitable organisation pursuant to the Duties Act as it is an organisation carried on for a religious purpose and for an educational purpose. In support of its contention that it is carried on for a religious purpose the applicant refers to and relies on the following:(a)John XXIII College (‘the applicant’) is sponsored by the Dominican Fathers (a religious congregation of the Roman Catholic Church in Australia).(b)The applicant provides pastoral support and religious, educational, cultural, social and recreational opportunities.(c)The applicant’s facilities promote the Dominican charism and Catholic identity of the college.(d)Respect for Christian values is presumed of all college members; the Board of Directors comprises of Friars and Sisters of the Dominicans.(e)The applicant has chaplaincy services and the college chaplain is Fr Laurie Foote who is also the ANU Chaplain.(f)The applicant has two chapels, the larger John XXIII College of the Evangelist Chapel and the smaller chapel on the southern side of the Evangelist Chapel.(g)Mass is offered daily.

Ratio Decidendi

Legal Principle Established

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