Lease A Leaf Property Pty Limited v Chief Commissioner of State Revenue

[2011] NSWADTAP 41

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

Lease A Leaf Property Pty Limited v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 41

Hearing dates:

16 June 2011

Decision date:

15 September 2011

Jurisdiction:

Appeal Panel - Internal

Before:

J Needham SC, Deputy President
A Verick, Judicial Member
J Butlin, Non-Judicial Member

Decision:

1. Appeal dismissed.

2. The order made by the Tribunal on 3 December 2010 is confirmed.

Catchwords:

Land used for primary production - whether land used for a commercial plant nursery

Legislation Cited:

Land Tax Management Act 1956
Taxation Administration Act 1996
Horticultural Stock and Nurseries Act 1969
Interpretation Act 1987

Cases Cited:

Colusso v Chief Commissioner of State Revenue [2008] NSWADT 79
Wyong Council v Christian Boes [1995] NSWLEC 3
Craig Williamson Pty Ltd v Borrowcliff [1915] VLR 450
Safety Beach Estates Pty Ltd v Commissioner of Land Tax 79 ATC 4032
Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27
Repatriation Commission v Vietnam Veterans Association (2004) 61 NSWLR 394

Category:

Principal judgment

Parties:

Lease A Leaf Property Pty Ltd (Appellant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Counsel
R L Hamilton SC (Appellant)
GR Kennett SC and AH Rider (Respondent)
Crow Horwath (Appellant)
Crown Solicitor (Respondent)

File Number(s):

109066

 Decision under appeal 

Citation:

Lease a Leaf Property Ltd v Chief Commissioner of State Revenue [2010] NSWADT 289

Date of Decision:

2010-09-21 00:00:00

Before:

Revenue Division

File Number(s):

106008

REASONS FOR DECISION

1. (APPEAL PANEL J NEEDHAM SC (DEPUTY PRESIDENT), A VERICK (JUDICIAL MEMBER) AND J BUTLIN (NON-JUDICIAL MEMBER)): The short question raised by this appeal is whether the Appellant's land, used by Lease A Leaf Pty Ltd (LAL), a related company, for LAL's indoor plant hiring business, was used in the relevant land tax years as a "commercial plant nursery" and exempt from land tax within the meaning of the relevant provisions found in s 3(d) of the Land Tax Management Act 1956 ("the Act").

1. In the first instance, Judicial Member Frost held that the business was not a commercial plant nursery because it did not involve the propagation of any plants.

1. In addition to the principal issue, a consequential issue arises as to whether the market rate interest included in the assessment should be properly remitted under s 25 of the Taxation Administration Act 1996.

The Facts

1. The facts of the matter were not in contest and were set out by the Tribunal as follows:

11 The Applicant leased the land to LAL for $36,000 per annum. There was no written lease of the land from the Applicant to LAL.

12 The land was used partly for residential purposes and partly for business purposes.

13 There were two residential houses on the land. One of the houses (with a street address 4 Larool Road) together with its associated outbuildings, garages, gardens and lawns, took up about 1,524 square metres and was occupied by two people. The other house (with a street address 4a Larool Road), together with its associated outbuildings, garages, gardens, lawns and swimming pool, took up about 995 square metres and was occupied by four people.

14 None of the people occupying the houses paid rent to the Applicant.

15 The land had significant paved areas that were used as driveways and parking areas for both residential and business purposes. Two cars that were used for private purposes by the people living at 4 Larool Road were parked on the land. One car that was used for private purposes by the people living at 4a Larool Road was parked on the land.

16 LAL conducted its indoor plant hire business from the land. The land was LAL's principal place of business and it conducted its business from no other address.

17 LAL did not propagate any plants on the land. It purchased plants from nurseries in northern New South Wales and Queensland, trucked them to the land and placed them in various bush and shade houses and "igloos" where the plants were maintained.

18 Staff arrived at the land in the morning and selected plants they needed for the day in order to service plants hired to clients in the city and suburbs. Staff attended at the clients' premises to service plants (e.g. checked for water, removed dead foliage, pruned when required and controlled pests) and removed and returned to the land plants that were no longer presentable. These plants were either composted at the local tip or rehabilitated on the land.

19 The total approximate area of the land that LAL used for the maintenance of plants, office, warehouse and storage in connection with its indoor plant hire business was 2,770 square metres. A further area of 2,814 square metres was not used during the relevant tax years and was fenced off for future expansion of the business. Part of the land, being an area of about 1,500 square metres (roughly one-eighth of the total area), was not used at all because it was too steep.

20 LAL operated its business five days per week between 6:30 a.m. and 5:30 p.m. and on weekends if required.

21 LAL"s business involved five employees, plus two of the shareholders and directors of LAL, namely David Gritching (the managing director of LAL) and his father, Joe. David Gritching lives in one of the houses on the land, and his father lives in the other.

22 LAL used on average six motor vehicles in its business, of which only two on average parked on the land.

23 During the relevant tax years, LAL's business generated revenues of between $800,000 and $900,000 each financial year and its annual operating results ranged between a loss of $13,000 and a profit of $56,000.

24 During the relevant tax years, LAL was an "allied trader" member of Nursery & Garden Industry, NSW & ACT Ltd, and a member of the National Interior Plantscape Association.

Relevant Legislative Provisions

1. The appeal relates to the assessments made by the respondent for 2005, 2006, 2007, 2008 and 2009 land tax years. In respect of the 2005 land tax year, the relevant provisions of the Act were in the following terms:

"Section 10 Land exempted from tax

(1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act:

...

(p) with respect to taxation leviable or payable in respect of the year commencing on1 January 1991 or any succeeding year, land that:

(i) is land used for primary production in the course of the carrying on of a business of primary production, or

(ii) is land used for primary production (whether or not in the course of carrying on a business of primary production) if the land is within a "rural" or "non-urban" zone under a planning instrument or (in the case of land not within a zone under a planning instrument) is land that the Chief Commissioner is satisfied is rural land.

1. The words "land used for primary production" for the 2005 land tax year were defined in s 3 as follows:

" land used for primary production " means land used primarily for:

(a) the cultivation thereof for the purpose of selling the produce of such cultivation,

(b) the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce,

(b1) the purpose of commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) and the commercial farming of fish, molluscs, crustaceans or other aquatic animals,

(c) the keeping of bees thereon for the purposes of selling their honey,

(d) a commercial plant nursery, but not including a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or

(e) the propagation for sale of mushrooms, orchids or flowers,

and includes all land owned by a society registered as a rural society under the Co-operation, Community Settlement and Credit Act 1923, as amended by subsequent Acts.

1. In respect of the 2006 to 2009 land tax years, the relevant provisions were as follows:

10AA Exemption for land used for primary production

(1) Land that is rural land is exempt from taxation if it is land used for primary production.

(2) Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land:

(a) has a significant commercial purpose or character, and

(b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).

(3) For the purposes of this section, "land used for primary production" means land the dominant use of which is for:

(a) cultivation for the purpose of selling the produce of the cultivation, or

(b) the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or

(c) commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) or the commercial farming of fish, molluscs, crustaceans or other aquatic animals, or

(d) the keeping of bees, for the purpose of selling their honey, or

(e) a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or

(f) the propagation for sale of mushrooms, orchids or flowers.

(4) For the purposes of this section, land is "rural land" if:

(a) the land is zoned "rural", "rural residential" or "non-urban" under a planning instrument, or

(b) the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land.

Submissions

1. The Appellant's case was essentially, as submitted by counsel, a "straightforward interpretational" issue and that there was no basis "to read anything into the definition" of the words "commercial plant nursery". In particular, it was submitted that the Tribunal had erred to hold that "nursery" necessarily involves propagation. Counsel referred to various forms of primary production set out in the various paragraphs and submitted that it was "anomalous" to read into the definition some words when not done for exemptions found in the preceding and succeeding paragraphs of the relevant exemption unless the provision has "propagation" as an element.

1. Counsel also submitted that no weight should be given to extrinsic materials when the words requiring interpretation are clear. And that as directed by s 34(3) of the Interpretation Act (NSW) there "is no warrant to engraft onto the plain, ordinary meaning of the words of the relevant paragraphs an additional unexpressed requirement derived from repealed provisions no longer applicable".

1. In the written submissions, counsel had relied on five grounds of appeal. At the hearing, counsel indicated that the Appellant was only relying on the first 4 grounds and not pressing the other ground.

1. The four grounds relied upon were "conveniently dealt with together" in the written submissions.

1. Firstly, it was contended that the Tribunal below was "correct in rejecting the principal basis" for the decision in Colusso v CCSR [2008] NSWADT 79 but "did not refer to any authority in giving a meaning to the expression 'commercial plant nursery' which included a propagation requirement".

1. Secondly, it was submitted that "there are 5 or 6 indications from the context in which the relevant paragraphs found why propagation is not a necessary element of the meaning of commercial plant nursery. The "indications" were -

"(1) There is no definition in the LTMA of 'commercial plant nursery'. In its ordinary meaning a 'nursery' is defined by the Macquarie Dictionary as:

... Any place in which something is bred, nourished, or fostered ... A place where young trees or other plants are raised for transplanting or for sale.

And by the Oxford English Dictionary as:

A place where young plants or trees are grown until fit for transplantation; a collection of such plants. In later use also: a place where plants are grown to be sold; a garden centre. (see also Wyong Council v. Christian Boes [1995] NSWLEC 3)

(2)Within the relevant paragraphs is a reference to:

(a)'cultivation' of plants; and

(b)'maintenance' of plants.

'Cultivation' is also used in subparagraph (a) of the definition, so that land dominantly used for 'cultivation', for the purpose of selling the product of the cultivation, will also be land used for primary production.

The word 'cultivation' would ordinarily be expected to bear the same meaning when used more than once in the same subsection. (In subparagraphs (a) and (e).)

There ought to be very strong reasons before the Court holds that words in one part of a section have a different meaning from the words appearing in another part of the same section. ( Craig Williamson Pty Ltd v Borrowcliff [1915] VLR 450 at 452 per Hodges J and other cases quoted at [4.4] Pearce & Geddes - 6 th Ed.)

The ordinary meaning of 'cultivation' is derived from the definition of 'cultivate' in the Macquarie Dictionary:

To bestow labour upon (land) in raising crops; till; improve by husbandry; to use a cultivator on; to promote or improve the growth of (a plant, etc) by labour and attention.

And from the Oxford English Dictionary:

The tilling of land; tillage, husbandry. Improvement (of land); increase of fertility; the production or raising of a 'crop' of any kind (as oysters, microscopic organisms, etc.); also the product of such cultivation (of bacteria etc.)

It will be noted that the word 'propagation' is not mentioned in either definition, the essence of the meaning of cultivation here being the development and care of a plant or plants.

Included within the concept of cultivation of land in paragraph (a) would be, for example, the planting of trees (whether propagated on the land or not) for forestry or fruit growing purposes, which are then nurtured by fertilising, watering, pruning etc. ( Safety Beach Estates P/L v. Commissioner of Land Tax 79 ATC 4032.)

The specific use of the words 'maintenance of plants' in the relevant paragraphs itself carries the implication that the maintenance of plants which have already been propagated can constitute the use of land as a plant nursery, but if the maintenance is pending sale of the plants to the general public, it will be outside the exemption.

(3) The definition of 'land used for primary production' makes express provision for propagation activities in para (e)/(f) which deals with land used "for the propagation for sale of mushrooms, orchids or flowers".

Parliament, having made no reference to propagation in the relevant paragraphs and by dealing expressly with certain propagation activities in other paragraphs, can be assumed to have excluded the need for propagation in the relevant paragraphs . A reference to propagation could readily have been included if Parliament had so intended.

(4) None of the other paragraphs in the definition of "land used for primary production" (except para (f)) appear to require that the primary product be propagated (or bred) on the land in question for it to be land used for primary production. As mentioned above, trees could be bought in and cultivated, or developed and cared for, on the land (para (a)); as could animals (including birds) (para (b)); fish and other aquatic animals para (c)); and bees (para (d)).

It is anomalous to read into the relevant paragraphs a requirement for propagation where none of the preceding paragraphs require a "reading in", and the succeeding paragraphs covers the propagation situation in specific terms.

(5) There is no need to resort to extraneous materials. Even if there was, there is very little in the extraneous materials to suggest that Parliament intended that propagation should be a necessary part of use as a plant nursery.

The Tribunal below was correct to reject (at [33] and [34]) the submission of the Chief Commissioner that a different historical definition of 'nursery' as defined by reference to the Horticulture Stock & Nursery Act 1969 (repealed) should continue to govern interpretation.

1. In relation to the imposition of market rate interest, it was submitted that the "Tribunal was in error when it simply relied at [40] on the approach to remission of the market rate used in CCSR v. Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19 at [60]". In the Appellant's submission, the discretion given under s 25 of the Taxation Administration Act 1996 should be exercised by taking into "account of all relevant factors, and not simply treat one factor, "commissioner's contribution to the default', as determinative".

1. The Respondent in response and by way of a summary submitted that:

15. The dictionary definitions cited by the Appellant refer relevantly to a place where young plants are "raised" or "grown". The dictionary meanings of "raise" include "cultivate, produce, breed"; and references to young plants being raised or grown "for transplanting", or "until fit for transplantation", strongly suggest a process that begins with propagation of such plants. The dictionary definitions are at least consistent with the view that a "commercial plant nursery" is a place where plants are propagated, and propagated for sale.

16. This view is also supported by the context in which the expression "commercial plant nursery" appears.

1. Counsel for the Respondent submitted that statutory provisions must be read in the context used and "it was legitimate to look at materials and history" to determine the purpose and policy of statutory provisions. In support, counsel cited Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 where at p.47 the High Court had said:

This Court has stated on many occasions that the task of statutory construction must begin with consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy. (Reference to authorities omitted)

1. It was submitted that the expression "commercial plant nursery" was rather vague and it was necessary to look at historical background and the policy for the exemption to properly interpret the expression. Counsel submitted that the original exemption was linked to the definitions in the Horticultural Stock and Nursery Act 1969 which defined 'nursery' to mean 'any place at which any horticultural stock is propagated for the purpose of sale'. When the LTMA was amended in 2000, the purpose of the amendment, as explained by the Minister's Second Reading Speech and the Explanatory Memorandum to the Bill for that Act, 'was to accommodate the repeal of the Horticultural Stock and Nursery Act 1969 (HSN Act) upon which the previous definition of "land used for primary production" had relied. The new definition was included 'with essentially the same meaning' and that in the Explanatory Note to the amending bill it was also noted that the new definition was introduced 'to preserve' the 'effect' of the old definition.

1. Counsel acknowledged that these "sentiments" in the Second Reading Speech and the Explanatory Note cannot override the clear language of the statutory provision. It was submitted that, if the language used in the new definition was different from the old definition then the sentiments expressed were clearly wrong. But the language of the expression 'Commercial Plant Nursery' is clear and that "one can see instantly that it is a place where plants are or not propagated".

1. It was pointed out by counsel that what is 'significant' is that each paragraph of the exemption provision '(like the concept of primary production itself) involves the creation - not merely the care or maintenance - of a product that is then sold'. It was further submitted that:

26. In this context, the expression "commercial plant nursery" must also be read as involving the creation of products - those products being plants. That follows from the fundamental nature of "primary production". As noted above, it is also consistent with the ordinary meaning of "nursery", being "a place where young trees or other plants are raised for transplanting or for sale".

27. Further, the requirement for a "commercial plant nursery" to be a place where new plant-based products are created (i.e. propagated) is reinforced by the words "but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public". Relevantly, these words refer to a place where the principal "cultivation" of plants is the "maintenance" (i.e. the keeping in existence or continuance) of plants pending their sale to the general public. Thus, these words exclude from the exemption land where no plants are propagated but the main activity is to keep plants pending their sale to the general public. This makes it clear that the exemption was intended to be limited to land which is principally used for production of (relevantly) plants, and was not intended to include retail enterprises such as suburban garden centres, even though part of the activities of such enterprises necessarily involve tending to plants.

1. Counsel also cited with approval the observations made by the Tribunal in the Colusso case at pars [72] -[75] and submitted that the Tribunal in the first instance in this matter should have relied on the history of the definition which would have supported the conclusion finally reached by the Tribunal.

1. It was also submitted that it is necessary to examine the internal structure and logic of any composite term definition to ascertain the 'most revealing word' in order to give the expression a proper interpretation (cf. Repatriation Commission v Vietnam Veterans Association (2004) 61 NSWLR 394).

1. In relation to the Respondent's Notice of Contention contending that the 'Tribunal erred in failing to hold that the phrase "commercial plant nursery", in context, refers to a place where plants are produced for the purpose of sale', it was submitted there are five reasons that the exemption requires that plants be produced for the purpose of sale. The five reasons were set out in the Respondent's written submissions as follows:

First, as noted above, the normal meaning of "primary production" connotes the bringing into existence of some product that will be sold. That is what distinguishes primary industry from "secondary" industry (processing products into something else) and "tertiary" industry (the provisions of services).

Secondly, each of the other paragraphs of the definition either explicitly refers to production for sale or necessarily involves such an intention. ("Commercial" fishing or fish farming must involve the sale of fish, molluscs etc that are extracted from the water, since it is hard to imagine what else might be done with them.)

Thirdly, the reference to "sale to the public" in the exception contained in para (d) gives indication of the basis on which the paragraph was drawn. It was thought necessary to exclude the keeping of plants for retail sale, but not keeping of plants for hire or display to the public, even though that is equally unconnected from the activity of primary production as normally understood. The obvious explanation is that the latter activities were not understood to come within the expression "commercial plant nursery".

Fourthly, the dictionary definition of "nursery" upon which the Appellant relies are consistent with that understanding. Those definitions refer to young plants being grown for transplanting or for sale. The addition of the adjective "commercial" narrows the concept down to the latter of these alternatives.

Fifthly, while "commercial" can carry broader meanings, its primary meanings involve engagement in "commerce" - which itself primarily relates to the interchange of goods or commodities (Macquarie Online Dictionary). A "commercial" nursery is a business that produces plants or objects of commerce - not a depot where plants are maintained for their role as equipment to be hired out from time to time.

1. Finally, in respect of the market rate interest included in the assessments, it was submitted that the Appellant has failed 'to identify any reason for departing from the policy or rule laid down in Incise Technologies which the Tribunal is said not to have considered' and that even 'if the Tribunal did misstate the scope of the discretion, that error was not material to its decision and does not form a proper basis for setting aside its decision'.

Consideration

1. The central issue in this appeal is whether the expression 'Commercial Plant Nursery' in the relevant exemption requires propagation of plants and sale of plants to qualify for the exemption. That is essentially a question of law. In the absence of any statutory directions as to the interpretation of the expression, it is necessary to determine the ordinary meaning of the expression.

1. We think the dominant element in the definition is found in the term 'nursery'. We have been referred to dictionary definitions of the term by the Appellant and are able to distil some essential features that assist in the identification of a 'nursery'. The features from both dictionary definitions we find useful are that a 'nursery' is a place where young trees or young plants are grown or bred for transplanting or grown until fit for transplanting or for sale or to be sold. These features we think determine one important feature of a 'nursery'. The activities are essentially confined to 'early' cultivation of plants or trees. The definitions refer to 'young' plants and trees and indicate that the activity is carried out until the young plants or trees are fit for transplanting or for sale

1. As a preliminary observation we make is that any cultivation or maintenance of plants subsequent to the early cultivation is an activity not normally carried out at a nursery. Early cultivation would, in our opinion, end when the plants are ready for transplanting or sale.

1. We think reliance on a general definition of the term 'cultivation' without the necessary 'early' qualification leads to difficulties in giving the expression 'commercial plant nursery' a proper meaning. In the case of a nursery the cultivation activities are those involved in growing or breeding young plants or trees.

1. We have been referred by counsel for the Respondent to the historical background to the current provisions and statements made by the Minister in the Second Reading Speech and the Explanatory Note at the time the amendment to introduce the current provisions was in Parliament. These are instructive but we agree with counsel for the Appellant that, where the words are clear, and we find the ordinary meaning conveyed by the text of the relevant provisions clear, resort to extrinsic material is not necessary or permitted.

1. Our earlier observation, that the growing activities of a nursery are in relation to early cultivation of plants or trees, also leads us to conclude that the very nature of those activities must commence with the propagation of plants. The dictionary definitions refer to 'grown and bred'. These words clearly suggest that the early cultivation must commence with propagation. We also agree with the submission made by counsel for the Respondent 'that the requirement for a 'commercial plant nursery" to be a place where new plant-based products are created (i.e. propagated) is reinforced by the words "but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public" and that 'these words exclude from the exemption land where no plants are propagated but the main activity is to keep plants pending their sale to general public.' We also agree with counsel for the Respondent that these words in the exemption 'makes it clear that the exemption was intended to be limited to land which is principally used for production of (relevantly) plants, and was not intended to include retail enterprises such as suburban garden centres, even though part of the activities of such enterprises necessarily involve tending to plants'.

1. We accordingly, conclude that a 'commercial plant nursery' would, in the context of the exemption read as a whole, necessarily mean a place where any horticultural stock is propagated as part of the early cultivation of plants.

1. In the present matter, the undisputed evidence was that no propagation of plants occurred on the Appellant's land. The plants were purchased from nurseries in northern New South Wales and Queensland after the early cultivation at these nurseries. The plants were "warehoused" on the Appellant's land ready for use in its indoor plant hiring business. The only maintenance was that necessary to ensure the plants remained in a condition for the hiring business.

1. This appeal on the principal issue can be disposed on the basis of the conclusion we have reached as to our interpretation of the exemption requiring propagation activities. But we also need to consider the Respondent's Notice of Contention contending that 'the Tribunal erred in failing to hold that the phrase "commercial plant nursery", in context, refers to a place where plants are produced for the purpose of sale'. In this regard we find the use of the term "commercial" in the definition as determinative of this issue. The term "commercial" was used to distinguish the exempting nursery from a private nursery, where plants are grown or bred for use of the particular garden or private gardens. We agree with submissions made by the Respondent that there are at least five reasons why the exemption requires that plants be propagated for the purpose of sale. The dictionary definitions referred to us also refer to 'sale' of the young plants or trees grown by a nursery.

1. The matter that remains is the imposition of market rate interest in the assessments issued to the Appellant by the Respondent. We agree with the Appellant's submission that in the exercise of the discretion to remit interest under s 25 of the Taxation Administration Act the Respondent "must take account of all relevant factors, and not simply treat one factor, 'Commissioner's contribution to the default' as determinative".

1. However, we note that the Appeal Panel in Incise Technologies Pty Ltd was also expressing the policy that should be taken into account in granting any remission of the market rate interest imposed in an assessment. We agree with the Appeal Panel that the market rate interest "is intended to compensate the Commissioner (on behalf of the Government of New South Wales) for not having the benefit of the tax payment from time it was due" and that "it is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time".

1. Accordingly where an amount of interest is imposed by the application of the market rate, only exceptional circumstances would justify any remission. We think only a very narrow category of circumstances would justify any remission. These, without setting out any exhaustive list of circumstances, would in addition to cases where the 'tax default' is entirely due to a fault of the Chief Commissioner include situations completely out of the control of the taxpayer, such as postal strikes, serious illness of the taxpayer and natural disasters (bush fires, floods and earthquakes).

1. In this matter, no exceptional circumstances were brought to the attention of the Panel to justify the remission of the market rate interest included in the assessments.

1. The Appeal is accordingly dismissed.

Order

1. We make these orders:

1. Appeal dismissed.

2. The order made by the Tribunal on 3 December 2010 is confirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.

Registrar

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Decision last updated: 15 September 2011