Li v Chief Commissioner of State Revenue

[2023] NSWCATAD 81

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Li v Chief Commissioner of State Revenue [2023] NSWCATAD 81

Hearing dates:

20 March 2023

Date of orders:

31 March 2023

Decision date:

31 March 2023

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

S E Frost, Senior Member

Decision:

The Respondent’s decision to refuse to reassess and refund the duty is confirmed.

Catchwords:

TAXES AND DUTIES – Dutiable transactions – Liability – Cancelled transfers of dutiable property – Application for reassessment and refund of duty – Application lodged outside the statutory time limit – No discretion to extend the time limit

Legislation Cited:

Duties Act 1997 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

None cited

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Haodong Li (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Applicant (Self Represented)
Crown Solicitor (Respondent)

File Number(s):

2022/00324865

Publication restriction:

Nil

REASONS FOR DECISION

1. Haodong Li and his then wife signed a contract to buy an apartment. They paid duty on the agreement but the sale didn’t proceed. They applied for a refund of the duty but the Chief Commissioner said their application was lodged too late. Mr Li has asked the Tribunal to grant an extension of time to lodge the refund application.

2. The Tribunal has no power to grant an extension of time. Unfortunately the duty can’t be refunded. I will explain what happened and then explain why the duty can’t be refunded.

What happened?

3. The following outline is based on Mr Li’s affidavit, affirmed on 1 February 2023, the annexures to that affidavit and the documents provided to the Tribunal by the Chief Commissioner. There is no dispute about the facts.

4. In April 2015 Mr Li and his then wife, Ms Cao, who had married in 2013, entered into a contract to purchase an apartment ‘off the plan’. Completion of the contract was to occur 15 days after the vendor served an occupation certificate or notice of registration of the strata plan. The contract could be terminated if the purchasers failed to complete.

5. On 27 July 2016 the contract was stamped as liable for ad valorem duty and a Duties Notice of Assessment was issued. The duty was paid, apparently by Mr Li and Ms Cao.

6. Mr Li and his wife divorced under Chinese law in 2017. The ‘property right’ to the apartment became Mr Li’s under the Voluntary Divorce Agreement dated 31 August 2017.

7. During the period December 2018 to February 2019 the vendor of the apartment notified the purchasers that the strata plan had been registered and that an occupation certificate had been issued. The vendor served a notice to complete on the purchasers. The purchasers failed to complete and the vendor terminated the contract on 18 March 2019.

8. Mr Li set about trying to get a refund of the duty that had been paid. He was (and still is) living in China. He attended the Australian Embassy in Beijing in December 2019 to have his signature witnessed on a Revenue NSW form entitled Application for Reassessment and Refund: Cancelled Agreements for the Sale or Transfer of Dutiable Property. The form includes a declaration by Mr Li as to the truth of the information provided in the form.

9. But he couldn’t yet lodge the form with the Chief Commissioner’s office; he needed to get his ex-wife’s signature on a similar form because she was also a party to the contract. He had trouble contacting his ex-wife, and when he did, she didn’t want to co-operate, on the basis that she no longer had any interest in anything to do with the apartment.

10. Mr Li eventually convinced his ex-wife to complete the form but then she had to get her signature witnessed. The COVID-19 lockdowns made it difficult for her to travel to the Embassy in Beijing. Mr Li lost contact with his ex-wife from early 2020 and wasn’t able to get a signed form from her until September 2021.

11. Mr Li finally lodged an online refund application, together with the required declarations from both himself and his ex-wife, with the Chief Commissioner’s office on 1 October 2021.

12. The refund was refused on the ground that the refund application was lodged out of time. Mr Li’s objection to that decision was unsuccessful and he applied to the Tribunal for an administrative review of the Chief Commissioner’s decision.

Relevant law

13. The Chief Commissioner relied on s 50(2) of the Duties Act 1997 (NSW) to refuse Mr Li’s refund application.

14. Section 50 states that, as a general rule, an agreement that is cancelled (as this one was) is not liable to duty. Subsection (2) requires the Chief Commissioner to reassess and refund the duty, but only if an application for a refund is made within the timeframe set out in the subsection. The cut-off points under subsection (2) are:

1. 5 years after the initial assessment, or

2. 12 months after the agreement is cancelled,

whichever is later.

15. The date that would apply under paragraph (a) is 27 July 2021, that is 5 years after the initial assessment.

16. The date that would apply under paragraph (b) is 18 March 2020, that is 12 months after the vendor terminated the contract.

17. The later of those two dates is 27 July 2021. That means to get a reassessment and refund of the duty, Mr Li’s refund claim would need to have been lodged with the Chief Commissioner by 27 July 2021. The papers make it clear that the refund claim wasn’t lodged with the Chief Commissioner until 1 October 2021. It was 66 days late.

The relief sought

18. Mr Li has asked me to grant an extension of time, so that his refund application can be accepted as valid even though it was 66 days late. Failing that, he has asked that the date he signed the Application for Reassessment and Refund (see [8] above), namely 16 December 2019, be accepted as the date on which his application for refund was made, for the purposes of s 50(2) of the Duties Act.

Consideration

19. Unfortunately for Mr Li, neither course is open to me.

20. First, there is no provision in the Duties Act or anywhere else that authorises either the Chief Commissioner or the Tribunal to extend the time for lodging a refund claim in a case such as this beyond the period specified in the law.

21. The time limits in s 50(2) are strict. The limit specified in s 50(2)(a) is, in fact, consistent with other provisions such as s 9(3) of the Taxation Administration Act 1996 (NSW), which lays down a general rule that reassessments cannot be made more than 5 years after the initial assessment of a tax liability.

22. As for Mr Li’s alternative argument, I do not accept that a form signed in the Australian Embassy in Beijing, but not actually handed over to anyone in the Embassy, or sent or delivered to the Chief Commissioner’s office, can be regarded as ‘lodged’ with the Chief Commissioner, or anyone else for that matter, on the day it was signed. The substance of the claim for a refund must be brought to the attention of the Chief Commissioner or his or her officers, and that didn’t happen until 1 October 2021.

23. Mr Li also asked that his case be treated with some leniency, given his ex-wife’s initial lack of co-operation and the difficulties imposed by the COVID-19 lockdowns. Once again, and unfortunately for Mr Li, the legislation does not allow for any consideration of the circumstances leading up to the late lodgement of the refund claim. The only relevant fact is that the claim was late. Nothing can remedy that.

Decision

24. The Chief Commissioner’s decision to refuse to reassess and refund the duty is confirmed.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar