Lawrence v Chief Commissioner of State Revenue

The applicant, Lawrence, sought review of assessments made by the respondent, the Chief Commissioner of State Revenue, in relation to surcharge land tax for the years 2017 to 2021. The crux of the dispute was whether the applicant was a ‘foreign person’ for the purposes of the relevant legislation, and whether he was ‘ordinarily resident’ in Australia during the relevant years. The applicant, an Australian citizen, had been living and working in Hong Kong, but intended to return to Australia. However, the COVID-19 pandemic and border closures prevented his return. The matter was heard by the Administrative Appeals Tribunal (AAT), with the AAT’s decision being reviewed by the Federal Court.

The legal issues before the court were the correct interpretation of the terms ‘foreign person’ and ‘ordinarily resident’ within the statutory framework, and the impact of the international border closures on the applicant’s residency status. The court had to determine whether the applicant’s circumstances met the legislative criteria for being a ‘foreign person’ and whether his intention and efforts to return to Australia, thwarted by the pandemic, affected his residency status. The court also considered the applicant’s status under international tax treaties and the effect of the pandemic on his ability to meet the residency requirements.

The court held that the applicant was a ‘foreign person’ as he had been living and working outside Australia, and his circumstances did not negate this classification despite his Australian citizenship. The court found that the applicant was not ‘ordinarily resident’ in Australia during the relevant years, as he was physically absent due to the border closures, which were beyond his control. The court emphasised the importance of the applicant’s actual physical presence in Australia to meet the residency requirements. The pandemic’s impact on travel was considered but did not alter the legislative criteria for residency. The court confirmed the Chief Commissioner’s assessments as the applicant did not meet the residency threshold for the surcharge land tax.

The final orders of the court were to confirm the Chief Commissioner’s original assessment for the land tax year 2017 and the revised assessments for the years 2018 to 2021. The court ruled in favour of the respondent, upholding the assessments as the applicant did not satisfy the residency requirements for the surcharge land tax during the relevant years.