Meniscus Pty Ltd ATF the Meniscus Trust v Chief Commissioner of State Revenue

[2025] NSWCATAD 209

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Meniscus Pty Ltd ATF The Meniscus Trust v Chief Commissioner of State Revenue [2025] NSWCATAD 209

Hearing dates:

13 June 2025

Date of orders:

21 August 2025

Decision date:

21 August 2025

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

J Smith, Senior Member

Decision:

The decision under review is affirmed.

Catchwords:

TAXES AND DUTIES – surcharge land tax – discretionary trust not amended to exclude foreign beneficiaries before 31 December 2020 – extension of time to object to notices of assessment

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Duties Act 1997 (NSW)

Foreign Acquisitions and Takeovers Act 1975 (Cth)

Land Tax Act 1956 (NSW)

Land Tax Management Act 1956 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

Axiom88 Pty Ltd ATF Axiom88 Trust v Chief Commissioner of State Revenue [2023] NSWCATAD 252

Brown v Federal Commissioner of Taxation [1999] FCA 563

Chu v Chief Commissioner of State Revenue [2021] NSWCATAD 238

Commissioner of Taxation v Ryan [2000] HCA 4

FVK v Chief Commissioner of State Revenue [2023] NSWCATAD 118

Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218

Monisse v Chief Commissioner of State Revenue [2023] NSWCATAP 27

Volpatti v Chief Commissioner of State Revenue [2007] NSWADT 222

Picone and anors v Chief Commissioner of State Revenue [2022] NSWCATAD 382

Bblt Pty Ltd v Chief Commissioner of the Office for State Revenue [2003] NSWSC 1003

Texts Cited:

NCAT Procedural Direction 7- Use of Generative Artificial Intelligence

New South Wales Legislative Council, Parliamentary Debates (Hansard), State Revenue Legislation Further Amendment Bill 2020 (NSW) Second Reading Speech, 18 June 2020

Practice Note CPN 004 version 2: Surcharge land tax and surcharge purchaser duty

Category:

Principal judgment

Parties:

Meniscus Pty Ltd ATF The Meniscus Trust (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Applicant (self-represented)

Counsel:
S Kanagaratnam (Respondent)

Solicitors:
Crown Solicitor (Respondent)

File Number(s):

2024/00460580

Publication restriction:

None

REASONS FOR DECISION

Decision

1. The Applicant seeks an administrative review of the Respondent’s decision made on 24 October 2024 to refuse the Applicant’s request for an extension of time to lodge an objection to land tax assessment notices for the land tax years 2017 to 2023. The Applicant does not dispute the land tax portion of the assessment notices but objects to liability for foreign person surcharge land tax.

2. As the Tribunal has not accepted the Applicant’s submissions about delay in lodging the objection, that he has an arguable case and is prejudiced, the Tribunal has decided to affirm the decision of the Respondent not to extend time.

Background

3. The Applicant is the Director of the Meniscus Trust, which was established by trust deed dated 12 April 2004.

4. As outlined in more detail below, there was an amendment made to the Land Tax Act 1956 (NSW) during 2020 that clarified that a trustee of a discretionary trust owning residential property in NSW is taken to be a foreign person for foreign surcharges purposes, if the trust deed does not irrevocably prevent a foreign person from being a beneficiary of the trust, even in circumstances where there are no named beneficiaries who are foreign persons. Discretionary trust deeds had to be amended by 31 December 2020 to include this provision to be exempt from surcharge purchaser duty or surcharge land tax.

5. The Respondent issued land tax assessment notices (“assessment notices”) to the Applicant as follows:

1. On 11 February 2021 – land tax assessment notice for the 2017, 2018, 2019, 2020 and 2021 land tax years.

2. On 6 April 2022 – land tax assessment notice for 2022 land tax year.

3. On 4 January 2023 – land tax assessment notice for 2023 land tax year.

6. All of these assessment notices included a component of surcharge land tax, as the trust deed had not been amended to irrevocably prevent a foreign person from being a beneficiary of the trust.

7. On 27 April 2023, a deed poll was executed which varied the terms of the Meniscus Trust Deed. The variation involved the addition of the following provisions:

26.1    A transfer to a foreign person, which includes foreign individuals, corporations, trusts and governments within the meaning of the Foreign Acquisitions & Takeover Acts 1975, Commonwealth is not permitted.

26.2   The rights set out in clause 2[6] cannot be removed, restricted or affected by any subsequent amendment.

8. On 8 November 2023, the Applicant’s solicitor sent a letter to the Respondent requesting that the Respondent “agrees to write off the debt attributable to the foreign surcharge”. The Applicant’s solicitor stated that “Unfortunately, due to a breakdown in communications, the appropriate action was not taken until late last year, when I had a variation to the trust executed and a copy uplifted to your records”.

9. On 9 November 2023, the Respondent advised the Applicant’s solicitor and the Applicant that the Applicant’s account was correct. The Respondent provided the Applicant’s solicitor and the Applicant with information on how to lodge an objection,

10. On 29 January 2024, the Applicant sent an email to the Respondent, requesting an exemption from the foreign surcharge that was applied to his account. The Applicant stated that due to a communication breakdown and misunderstanding between his accountants and himself, they did not lodge the adjustment to their trust deed until May 2023.

11. On 22 February 2024, the Respondent again advised the Applicant that the assessment notices had been issued correctly. The Respondent advised the Applicant that if he believed that the legislation was applied incorrectly, he had a right to lodge a formal objection. The Respondent advised the Applicant that as the objection would be more than 60 days after the assessment in question, the Applicant should include reasons for the delay.

12. Numerous overdue land tax notices were issued to the Applicant before the Applicant commenced making payments towards the outstanding balance in 2023 and an instalment arrangement was approved by the Respondent on 2 April 2024.

13. On 15 October 2024, the Applicant lodged an objection to the assessment notices.

14. On 21 October 2024, the Respondent informed the Applicant that the objection was out of time and therefore invalid. The Respondent advised the Applicant that he could apply for an extension of time to lodge an objection, and if he wished to do so, he would need to comply with s 90(2) of the Taxation Administration Act 1996 (NSW) (TA Act), which required the Applicant to state fully and in detail the circumstances concerning and the reasons for the failure to lodge the objection within the 60-day period.

15. On 21 October 2024, the Applicant requested an extension of time to lodge the objection and provided written reasons for the delay including:

1. Ongoing phone calls the Applicant had made to the Respondent disputing the assessment notices, particularly over the past year. Due to these conversations, the Applicant believed that the matter would be resolved administratively and so he did not pursue a formal objection.

2. Miscommunication between the Applicant and his accountant.

3. Financial and emotional hardship due to the tax liability.

16. On 24 October 2024, the Respondent refused the Applicant’s request to lodge an objection after the prescribed period of 60 days in s 89 of the TA Act.

17. On the same day, the Applicant objected to this decision. On 15 November 2024, the Respondent disallowed the further objection.

18. On 11 December 2024, the Applicant filed an administrative review application seeking a review of the decision of the Respondent refusing an extension of time.

19. On 13 June 2025, with the Tribunal satisfied that it had jurisdiction to determine the matter, a hearing was held during which both parties made oral submissions.

Relevant law

Surcharge land tax – discretionary trusts

20. Since 2017, s 5A of the Land Tax Act 1956 (NSW) levies surcharge land tax in respect of residential land owned by a “foreign person”.

21. The Land Tax Act states that “foreign person” has the same meaning as in Chapter 2A of the Duties Act 1997 (NSW). Section 104J of the Duties Act states that a “foreign person” means a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the Takeovers Act) as modified by s 104J of the Duties Act. Section 4 of the Takeovers Act defines a “foreign person” by reference to a number of entities, including, amongst others, a person who is not ordinarily resident in Australia and the trustee of a trust in which an individual not ordinarily resident in Australia holds a substantial interest.

22. Section 5D of the Land Tax Act, which was introduced on 24 June 2020 by the State Revenue Legislation Further Amendment Act 2020 (NSW), provides:

5D   Surcharge land tax - discretionary trusts

(1) The trustee of a discretionary trust is taken to be a foreign person in that capacity for the purposes of section 5A if the trust does not prevent a foreign person from being a beneficiary of the trust.

(2) If a discretionary trust prevents a foreign person from being a beneficiary of the trust, the trustee is not in that capacity a foreign person for the purposes of section 5A.

(3)  A discretionary trust is considered to prevent a foreign person from being a beneficiary of the trust if (and only if) both of the following requirements are satisfied—

(a)  no potential beneficiary of the trust is a foreign person (the no foreign beneficiary requirement),

(b)  the terms of the trust are not capable of amendment in a manner that would result in there being a potential beneficiary of the trust who is a foreign person (the no amendment requirement).

Note.

Under the transitional arrangements for this section in Schedule 2 to the Principal Act, the no amendment requirement does not apply to a trust that satisfies the no foreign beneficiary requirement immediately before the commencement of this section.

(4)  A person is a potential beneficiary of a discretionary trust if the exercise or failure to exercise a discretion under the terms of the trust can result in any property of the trust being distributed to or applied for the benefit of the person.

Note.

A potential beneficiary is not limited to persons named in the trust instrument and extends to the members of any class of persons to whom or for whose benefit trust property can be distributed or applied pursuant to the discretions of the trust.

(5)  For the removal of doubt, a person is not a potential beneficiary of a discretionary trust if the terms of the trust prevent any property of the trust from being distributed to or applied for the benefit of the person.

(6)  In this section, property includes money, and a reference to the distribution or application of property includes a reference to the payment of money.

23. The explanation for this amendment in the second reading speech in the Legislative Council on 18 June 2020 was as follows:

With discretionary trusts there is a risk that trustees can unknowingly become liable for the surcharges. This is because discretionary trusts often give the trustee powers to distribute income and/or capital to a wide range of beneficiaries, including named beneficiaries, such as relatives of the settlor, and classes of beneficiary, such as charities. If any one of the potential beneficiaries is a foreign person, or if the terms of the trust deed would allow for income to be distributed to a foreign person at any time, the trustee may be deemed to be a foreign person and therefore be liable for surcharge purchaser duty and/or surcharge land tax, even though none of the beneficiaries who actually receive or are likely to receive income is a foreign person.

To address this, schedule 1 to the bill—new section 104JA and its associated transitional clause—provides for surcharge purchaser duty exemptions and refunds when the terms of a discretionary trust are amended before the end of 2019 to prevent a foreign person from being a beneficiary. The transitional provision has retrospective effect to the commencement of surcharge purchaser duty on 21 June 2016 so that trustees who may have incurred liability prior to the commencement of this bill have an opportunity to obtain relief. However, since March 2017, Revenue NSW, through revenue rulings, client education activities and engagement with the Law Society of New South Wales and other stakeholder groups, has been advising taxpayers of the potential liability for surcharge purchaser duty that can arise under discretionary trusts and the possible need to make amendments to trust deeds.

Many trust deeds have now been amended and no surcharge duty incurred as a result. With this in mind, the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds. As I mentioned previously, relief from surcharge liability will be contingent on the trust deed being amended to prevent a foreign person from being a beneficiary of the trust. This requirement has two elements: First, that no potential beneficiary of the trust is a foreign person—the no foreign beneficiary requirement; and, second, that the terms of the trust are not capable of being amended so as to allow for a foreign person to be a potential beneficiary under the trust—the no amendment requirement.

The first element essentially speaks for itself. The deed must not allow for property to be distributed to a foreign person. The second element is an important anti-avoidance measure to ensure that a deed cannot simply be amended to avoid surcharge and then be re‑amended for the purposes of distributing income or assets to foreign persons. The terms of the trust deed preventing a foreign person from being a beneficiary under the trust must be irrevocable. When this legislation commences, some trust deeds will meet the no foreign beneficiary requirement already and the transitional provision specifies that such deeds will not need to be amended to meet the no amendment requirement. However, from commencement, an existing trust that does have potential foreign beneficiaries, or a new trust, will need to meet both requirements to ensure that a trustee is not deemed to be foreign person.

24. The transitional provisions for this amendment gave trustees of discretionary trusts an opportunity until 31 December 2020 to amend their trust deeds to include the new requirements imposed by s 5D of the Land Tax Act. Part 34 of Schedule 2 of the Land Tax Management Act 1956 (NSW) (LTM Act) states:

66   Amendments relating to discretionary trusts

(1) Section 5D of the Land Tax Act 1956 applies to the assessment of land tax liability in respect of the 2017 land tax year and subsequent land tax years.

(2)  If the trustee of a discretionary trust is liable in that capacity as a foreign person for surcharge land tax in respect of the 2017, 2018, 2019 or 2020 land tax year—

(a)  the trustee is exempt from that land tax if the terms of the trust have been amended, before payment of the land tax is due and before midnight on 31 December 2020, so that the trust prevents a foreign person from being a beneficiary, or

(b)  if that land tax has been paid, the trustee is entitled to a refund of that land tax if the terms of the trust have been amended, before midnight on 31 December 2020, so that the trust prevents a foreign person from being a beneficiary.

(3) A trust that satisfies the no foreign beneficiary requirement under section 5D of the Land Tax Act 1956 immediately before the commencement of that section is considered for the purposes of that section to prevent a foreign person from being a beneficiary of the trust (without having to satisfy the no amendment requirement under that section).

(4) Despite section 5D of the Land Tax Act 1956, the trustee of an Australian testamentary trust is not in that capacity a foreign person for the purposes of the application of section 5A of that Act to residential land owned by a foreign person if—

(a)  liability for land tax is required (under clause 9 of Schedule 1A to this Act) to be assessed as if the deceased had not died and had continued to use and occupy the land as his or her principal place of residence, or

(b)  any of the following apply (even if the trust does not prevent a foreign person from being a beneficiary of the trust)—

(i)  for a trust arising from a will or codicil—the will or codicil was executed on or before 31 December 2020,

(ii) for a trust arising from the administration of an intestate estate—the deceased died before, or within 2 years after, the commencement of section 5D of the Land Tax Act 1956,

(iii)  for a trust resulting from an order of a court varying the application of the provisions of a will or codicil or of the rules governing the distribution of an intestate estate—the order was made on or before 31 December 2020.

(5)  The Chief Commissioner may in a particular case extend the date by which payment of surcharge land tax by a trustee is due so that the trustee qualifies for exemption from that surcharge land tax under this clause if the terms of the trust have been amended before midnight on 31 December 2020 (but after the date by which payment would otherwise be due) so that the trust prevents a foreign person from being a beneficiary.

(6)  In this clause—

Australian testamentary trust means a discretionary trust arising from a will or codicil or the administration of an intestate estate (or as a result of an order of a court varying the application of the provisions of a will or codicil or of the rules governing the distribution of an intestate estate) where the deceased was not a foreign person immediately before his or her death.

(7) Expressions in this clause have the same meanings as in section 5D of the Land Tax Act 1956.

25. On 1 July 2020, the Respondent issued Practice Note CPN 004 version 2: Surcharge land tax and surcharge purchaser duty which provides practical guidance on how surcharges apply in situations where residential property is held by the trustee of a discretionary trust. The Practice Note also explains what trustees of discretionary trusts need to do to be exempt from foreign surcharge.

Objections

26. Section 86(1) of the TA Act provides that a taxpayer who is dissatisfied with an assessment that is shown in a notice of assessment served on the taxpayer, or any other decisions (within the meaning of the Administrative Decisions Review Act 1997 (NSW) (ADR Act)) of the Chief Commissioner under a taxation law, may lodge a written objection with the Chief Commissioner.

Time for lodging objection

27. Section 89(1) of the TA Act provides that an objection must be lodged with the Chief Commissioner not later than 60 days after the date of the service of the notice of assessment is served on the taxpayer, except as provided by s 90 of the TTA Act.

Objections lodged out of time

28. Section 90(1) of the TA Act provides that the Chief Commissioner may permit a person to lodge an objection after the 60-day period referred to in s 89, but no later than 5 years after the date of service of the notice of the initial assessment.

29. Section 90(2) of the TA Act provides that the person seeking to so lodge the objection must state fully and in detail, and in writing, the circumstances concerning and the reasons for the failure to lodge the objection within the 60-day period.

30. The Chief Commissioner may grant permission for an objection to be lodged out of time unconditionally or subject to conditions or may refuse permission (TA Act, s 90(4)).

31. In Brown v Federal Commissioner of Taxation [1999] FCA 563, Hill J considered the discretion to extend time under s 14ZW(2) of the Taxation Administration Act 1953 (Cth), which is analogous to s 90 of the TA Act. His Honour stated at [58] to [59]:

58. In summary when a taxpayer seeks an extension of time in which to lodge an objection the following matters will require consideration:

1. The taxpayer's explanation for the delay in lodging an objection against the assessment within the time stipulated by Parliament.

2. The circumstances attendant upon that delay.

3. Whether the objection is one which, on its face, is frivolous or which in law must fail, or, to the extent that this is indeed a different test, is one in which the taxpayer has no arguable case. This matter will be considered by reference to the objection itself and such other material as the taxpayer puts before the Commissioner. It will seldom, if ever, require the decision maker to consider matters such as credit or endeavour to reconcile the evidence which the taxpayer choses to rely upon with other factual material in the possession of the Commissioner. No doubt the stronger the case the more likely that the discretion would be exercised in favour of a taxpayer even where the explanation for delay was thought not to be strong. Whether the converse is also the case need not here be considered.

4. Such other matters as the circumstances of the particular case make relevant, including, if prejudice to the Commissioner be asserted, such prejudice as is shown to arise.

59. What is required is the balancing of the delay; the explanation for it; the circumstances which gave rise to it and such prejudice if any as may be shown to exist to the Commissioner against the prejudice which may arise to a taxpayer who has by reason of the failure to object in time lost the right to a review of the assessment. In this balancing process the Commissioner or the Tribunal on a review will be guided by what the justice of the case requires. The balancing process should be approached on the basis that while Parliament has stipulated a time in which objections are required to be lodged it has entrusted to the Commissioner a power to extend that time in appropriate circumstances. The decision maker should not lose sight of the fact that s 14ZW is an ameliorating provision designed to avoid injustice.

Review by the Tribunal

32. Section 96(1) of the TA Act provides that a taxpayer may apply to the Tribunal for an administrative review under the ADR Act of a decision of the Chief Commissioner that has been the subject of an objection under Division 1 of the TA Act (Objections and reviews) if the taxpayer is dissatisfied with the Chief Commissioner’s determination of the taxpayer’s objection.

33. The task of the Tribunal is to decide what the correct and preferable decision is, having regard to any relevant factual material and any applicable law, pursuant to s 63 of the ADR Act.

Powers of the Tribunal on review

34. Section 101(1) of the TA Act provides that the Tribunal dealing with the application for review may do any one of the following:

1. confirm or revoke the assessment or other decision to which the application relates,

2. make an assessment or other decision in place of the assessment or other decision to which the application relates,

3. make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

4. remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

5. make any further order as to costs or otherwise as it thinks fit.

Onus of proof

35. In an application for administrative review to the Tribunal, the applicant has the onus of proof of proving the applicant’s case (TA Act, s 100(3)).

Material before the Tribunal

Applicant

36. The Applicant relied on:

1. Administrative review application filed on 11 December 2024 (Exhibit A1).

2. Applicant’s submissions/bundle of documents filed on 17 March 2025 (Exhibit A2).

3. Applicant’s submission note/bundle of documents filed on 28 April 2025 (Exhibit A3).

4. Applicant’s submissions/bundle of documents filed on 12 May 2025 (Exhibit A4).

5. Applicant’s supplementary submissions/bundle of documents filed on 5 June 2025 (Exhibit A5).

6. Applicant’s consolidated submissions for hearing (Exhibit A6).

7. Applicant’s timeline of events (Exhibit A7).

8. Email correspondence from the Respondent to the Applicant, attaching the Respondent’s bundle of authorities, dated 11 June 2025 (Exhibit A8).

37. During the hearing, when asked by the Tribunal, the Applicant stated that he used Generative Artificial Intelligence (Gen AI) in the preparation of his submissions (Google Gemini and ChatGPT).

38. Clause 12 of NCAT Procedural Direction 7- Use of Generative Artificial Intelligence states that Gen AI must not be used for statements, affidavits, statutory declarations, character references or other material that is intended to reflect the evidence of the maker of the statement, or deponent of the affidavit, or a witness’ evidence and/or opinion, or other material tendered in evidence or used in cross examination. The Applicant’s documents are a mix of submissions and documents. The Applicant has largely relied on records, rather than sworn written statement, as included in the bundles of documents he filed.

39. Clause 16 of NCAT Procedural Direction 7 provides that where Gen AI has been used in the preparation of written submissions or summaries of argument, parties or their representatives must verify in the body of the submissions or summaries, that all citations, legal and academic authority and case law and legislative references exist, are accurate, and are relevant to the proceedings. The Applicant did not meet this requirement in his submissions.

40. The Applicant was not aware of these requirements and was self-represented. The Tribunal accepted, without any objections made by the Respondent, the tender of the Applicant’s submissions/bundles of documents. The Tribunal has, however, placed more weight on the records included in the Applicant’s bundles, rather than the submissions which were prepared by the Applicant with the use of Gen AI.

Respondent

41. The Respondent relied on:

1. The bundle of documents filed pursuant to s 58 of the ADR Act on 13 February 2025 (Exhibit R1).

2. Respondent’s outline of submissions filed on 17 April 2025 (Exhibit R2).

3. Respondent’s tender bundle (Exhibit R3).

42. The Respondent also prepared a bundle of authorities for the assistance of the Tribunal.

43. The Respondent confirmed that it had not used Gen AI in the preparation of any of the Respondent’s evidence or submissions.

Consideration

44. The task of the Tribunal is to decide what the correct and preferable decision is, having regard to any relevant factual material and any applicable law (ADR Act, s 63).

45. In undertaking this task and determining whether to exercise discretion to extend the time for the Applicant to file an objection to the assessment notices, the Tribunal has applied the criteria in Brown. Both parties made submissions which address the matters identified in Brown.

Delay

Date of requesting an extension to lodge an objection

46. The Applicant submits that the delay resulted from a “unique combination of misleading communications, procedural unfairness, and administrator errors by the Respondent, including the non-delivery of the 11 November 2019 notice, specific assurance creating estoppel, and delays from professional advisors overcome with diligence.”

47. There was a dispute between the parties as to the date that the Applicant applied to the Respondent for an extension of time to lodge the objection to the assessment notices.

48. The Applicant submits that he lodged the objection on 8 November 2023, by the letter his solicitor sent to the Respondent on this date. This letter was sent well outside the 60-day period for lodgement of an objection, for even the last of the assessment notices.

49. The Respondent can only permit a person to lodge an objection after the 60-day period if the requirements of s 90(2) of the TA Act are met – that the person seeking to lodge the objection must state fully and in detail, and in writing, the circumstances concerning and the reasons for the failure to lodge the objection within the 60-day period.

50. The letter of 8 November 2023, however, did not address the specific requirements of s 90(2) of the TA Act.

51. As noted above, the Applicant was informed by the Respondent on 22 February 2024, that any formal objection would need to include reasons for the delay, as the 60-day period had passed.

52. It was not until 15 October 2024, that the Applicant requested an extension of time to lodge an objection, compliant with s 90(2) of the TA Act. The Tribunal finds that this is the date that the Applicant formally sought an extension of time to lodge the objection to the assessment notices.

Length of the delay

53. In terms of the length of the delay from 15 October 2024 to the date that the Applicant sought an extension of time to lodge an objection, the Respondent submits that:

1. In relation to the first of the assessment notices, issued on 11 February 2021, this is 1,283 days after the expiry of the 60-day period.

2. In relation to the second of the assessment notices, issued on 6 April 2022, this is 863 days after the expiry of the 60-day period.

3. In relation to the third of the assessment notices, issued on 4 January 2023, this is 590 days after the expiry of the 60-day period.

54. The Tribunal has verified these calculations, which are correct, except for the third one, which is 591 days.

55. The Tribunal is satisfied that the length of delay in lodging the objection is significant. Even if the Tribunal had found that it was 8 November 2023 that the Applicant sought an extension of time to lodge an objection, the Tribunal finds that this is still a significant delay.

Notification of 60-day period for lodging an objection

56. Each of the assessment notices clearly state under the heading “If you disagree with your Land Tax Assessment” (for assessment notice of 11 February 2021) or “If you believe your Assessment is incorrect” (for assessment notice of 6 April 2022 and 4 January 2023) that:

“You must lodge the objection together with your reasons and supporting evidence within 60 days of the issue date of this notice.”

57. The Applicant submits that there was a “sustained pattern of misleading assurances from Revenue NSW officers”. The Applicant relied on phone conversations he stated he had with the Respondent’s officers where he states he was led to believe that the issue was “a simple administrative fix and that a formal, adversarial objection was not required.”

58. The Tribunal finds, however, that there was clear written communication from the Respondent to the Applicant about how to make a formal objection to the assessment notices, each time an assessment notice was issued.

Notification the legislative change

59. The Applicant submits that the Respondent “failed in its duty to provide accurate information at the most critical juncture”. In making this submission, the Applicant relies on an email he sent to the Respondent on 18 December 2020 which stated: “Please note the final instalment was made today. Please update me on the status of this account when you receive this payment”. The email contained a schedule of instalment payments for tax that had been owed, the last of which had been made on 18 December 2020. On 21 December 2020, the Respondent sent an email to the Applicant stating “Yes, the payment has been cleared”. The Applicant submits that this email, ten days before the grace period for amending the trust deed expired “was materially incomplete and therefore misleading”. The Applicant submits that the Respondent did not make him aware, in this email, of the foreign person surcharge tax liability, which he claimed to be unaware of at this point.

60. These two emails, however, were in relation to the tax that Applicant owed up until 18 December 2020 and not about any future tax liability for the Applicant. The Respondent was simply confirming that the last of the instalment payments had been received.

61. In FVK v Chief Commissioner of State Revenue [2023] NSWCATAD 118 at [39], the Tribunal stated that there is nothing at law which imposes upon the Chief Commissioner a legal obligation of any sort to keep citizens, either collectively or individually, advised or warned about their potential liability for any form of taxation or duty, or to issue notice of any such liability promptly.

62. In Monisse v Chief Commissioner of State Revenue [2023] NSWCATAP 27, the Appeal Panel at [31] to [33] stated:

31. The Respondent contended that it had no duty to notify individual taxpayers of the legislative amendments that introduced s 5D and that it did not have a discretion to waive surcharge land tax. We were not taken to any provision in the Land Tax Act that may have given the Commissioner a discretion to waive the tax (other than interest on unpaid tax which was waived).

32. We are in agreement with the Respondent’s submissions and therefore we are of the opinion that the Appellant cannot point to a denial of procedural fairness in the conduct of the first instance hearing or in the fact that he has not been provided with answers to the questions which he had put to the Respondent.

33. In our view the Tribunal correctly and without error dealt with the relevant issues. In summary, these were that matters relating to unfairness are not a basis to set aside an assessment, no conduct or representation by the Respondent can estop the Respondent from issuing an assessment and that there is no duty on the Respondent to protect a taxpayer or to warn a taxpayer of a new duty.

63. Notwithstanding this, the second reading speech in the Legislative Council on 18 June 2020 in relation to the introduction of s 5D of the Land Tax Act noted that since March 2017, the Respondent, through revenue rulings, client education activities and engagement with the Law Society of New South Wales and other stakeholder groups, had been advising taxpayers of the potential liability for surcharge purchaser duty that can arise under discretionary trusts and the possible need to make amendments to trust deeds.

64. As noted above, on 1 July 2020, six months before the grace period for amending trust deeds expired, the Respondent issued a Practice Note which provided practical guidance to discretionary trusts in relation to surcharge land tax and surcharge purchaser duty.

65. The Tribunal does not accept the Applicant’s submission that the Respondent failed to provide accurate information in relation to the Applicant’s tax liability under s 5D of the Land Tax Act and therefore should be estopped or prevented from relying on a strict enforcement of the law against the Applicant. With few exceptions, the courts have concluded that estoppel does not lie against a fiscal authority on the basis that the authority cannot be prevented from carrying out the public duties cast upon it by the legislation: Bblt Pty Ltd v Chief Commissioner of the Office for State Revenue [2003] NSWSC 1003 at [111].

66. Even though the Respondent was under no legal obligation to advise the Applicant of his tax liability, there was information accessible to the public about the legislative changes, including the information available on the Respondent’s website. The Applicant also had access to at least two professional advisors from whom he could have sought specific advice about the Applicant’s tax liability.

Delays from professionals

67. The Applicant submits that delays from professionals contributed to the delay while the Applicant acted with diligence.

68. In the Applicant’s material, it is apparent that his tax agent forwarded him each of the assessment notices promptly after receiving them from the Respondent.

69. In the Applicant’s material, it is also apparent that his tax agent sent him an email on 20 October 2020 asking the Applicant if he wanted a quote to amend the deed. In an email from the Applicant to his tax agent, dated 26 February 2021 (after receiving the assessment notice of 11 February 2021), the Applicant states that he had not seen the correspondence of 20 October 2020 and stated: “We need to amend the deed as soon as possible to satisfy whatever needs to be done”. There was an issue with locating the deed, which was found in the tax agent’s offsite storage centre in March 2021. On 4 June 2021, the tax agent sought a quote from a solicitor to amend the deed to exclude foreign beneficiaries, noting that the Applicant would himself inform the Respondent of the changes made. On the same date, the solicitor provided a quote for amending the deed, which was provided by the tax agent to the Applicant. There were then emails between the Applicant and the tax agent, trying to arrange a phone call to discuss the matter. The solicitor was not engaged to amend the deed.

70. On 23 May 2022, after the Applicant had received the assessment notice of 18 April 2022, the Applicant emailed the tax agent, stating “I recall asking them (State Revenue) and they told me this was not applicable because I am an Australian citizen. Can we please pick up appealing this ridiculous bill again. Sorry I know I dropped the ball on it last time”. In response, the tax agent emailed the Applicant on 16 June 2022 stating they “are only tax agents and cannot act on your behalf in relation to taxes of a state based nature”. The tax agent provided the details of the solicitor whom they had sought a quote from in 2021, to the Applicant. The solicitor was not engaged to amend the deed at this point.

71. The Applicant then received the assessment notice of 11 January 2023. On 16 January 2023, the Applicant emailed the tax agent and asked for assistance, including assistance from the solicitor, to resolve the situation. The tax agent referred the Applicant to the solicitor. The solicitor did not receive a copy of the trust deed from the tax agent until 12 April 2023, despite a number of requests made to both the Applicant and the tax agent for a copy of the deed. The solicitor completed the deed poll on 18 April 2023, and it was executed on 27 April 2023.

72. In terms of amending the trust deed, there were at least three opportunities for the Applicant to engage the solicitor to do this – in October 2020, June 2021 and June 2022 as noted above. In May 2022, the Applicant conceded to his tax agent that he had “dropped the ball on it last time”, having not engaged the solicitor to amend the trust deed.

73. The Tribunal does not accept that there was any significant failing on the part of the tax agent or the solicitor that contributed to the delay in the Applicant seeking to object to the assessment notices.

74. The Applicant himself could have made a formal objection within the 60-day period after receiving each of the assessment notices but did not do so. As noted above, there was clear communication from the Respondent about lodging an objection within each assessment notice, however the Applicant himself took no action.

75. It follows that the Tribunal does not accept the Applicant’s explanations for the significant delay, as reasonable, adequate or sufficient.

Is the objection frivolous or doomed to fail; or is there an arguable case?

76. The Respondent submits that the Applicant’s objection, even if allowed, must fail. That is, for the Applicant to avail himself of the exemption for surcharge land tax, the terms of the trust deed had to be amended to prevent a foreign person from being a beneficiary, by midnight on 31 December 2020.

77. It is an undisputed fact that the Applicant’s trust deed was not amended, in accordance with the requirement in s 5D of the Land Tax Act until 27 April 2023.

78. Having not amended the trust deed in accordance with s 5D of the Land Tax Act before midnight, 31 December 2020, the Applicant is not eligible for an exemption or refund from surcharge land tax from the land tax years 2017 to 2023, the subject of the assessment notices.

79. As the Tribunal found in Chu v Chief Commissioner of State Revenue [2021] NSWCATAD 238 at [30] and Volpatti v Chief Commissioner of State Revenue [2007] NSWADT 222 at [27], there is no provision of the LTM Act which grants or allows the Respondent (or the Tribunal on review/standing in the shoes of the Respondent) a discretion to exempt the taxpayer from land tax if the statutory criteria are not met.

76. As the Tribunal stated in Axiom88 Pty Ltd ATF Axiom88 Trust v Chief Commissioner of State Revenue [2023] NSWCATAD 252 at [74] to [75]:

74. As noted by the Chief Commissioner, general notions of unfairness and appeals of leniency or natural justice are not relevant when considering the validity of assessment: see Commissioner of Taxation v Ryan (2000) 201CLR 109, at 123 and Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [40] to [42].

75. Instead, the Chief Commissioner (and the Tribunal on administrative review) is required to administer the law in accordance with its terms so as to not unfairly disadvantage other taxpayers who have complied with their obligations under the same laws: see Valencia v Chief Commissioner of State Revenue [2017] NSWCATAD 261 at [84].

81. The Tribunal is of the view that the Applicant’s objection, even if the extension of time was granted, is doomed to fail. The Applicant does not have an arguable case.

Prejudice to the parties

82. The Respondent did not identify any matters of prejudice to the Respondent.

83. The Applicant submits that if the extension of time is not granted, this involves the loss of the right to have assessments and interest reviewed, which has already caused him significant financial and personal hardships, depleting his savings.

84. The Tribunal, however, has found that there is no discretion for the Respondent or the Tribunal to waive the amount of surcharge land tax in the circumstances, and therefore even if an extension of time was granted, this would not result in the outcome the Applicant ultimately seeks.

85. Liability to surcharge land tax is created by direct operation of the Land Tax Act, and notions of fairness or justice do not apply when the statutory provision contains no relevant discretion: Commissioner of Taxation v Ryan [2000] HCA 4 at [19]. There is no general discretion available to the Respondent or to the Tribunal based on "fairness" and even if an assessment was unfair or unjust, this does not affect the validity of the assessment: Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [43] and [48].

86. There is nothing in the applicable legislation which gives the Respondent any authority to relieve on the basis of fairness or justice from liability to surcharge land tax a taxpayer who has failed to comply with the requirements of Clause 66 of Part 34 of Schedule 2 to the LTMA: Picone and anors v Chief Commissioner of State Revenue [2022] NSWCATAD 382 at [26].

87. In terms of the Applicant’s financial position, as stated by the Tribunal in Monisse at [35]:

35. To the extent that Mr Monisse has raised his financial position as a ground, it is clearly established that financial hardship, including where that has been caused to any extent by the COVID economic impacts is not relevant to the issue of whether an assessed tax or duty is payable: see for example Chu v Chief Commissioner of State Revenue [2021] NSWCATAD 238 (Chu) at [32]- [34].

88. The Tribunal is not satisfied that the Applicant would be prejudiced if an extension of time is not granted to the Applicant to make an objection to the assessment notices, as such an objection would ultimately fail.

Conclusion

89. Having had regard to the criteria and balancing process in Brown, the Tribunal is not satisfied that it is in the interests of justice to exercise the discretion to extend the time for the Applicant to lodge an objection to the assessment notices. This is because of the Tribunal’s findings that:

1. The length of the delay is significant, and the Tribunal does not accept the Applicant’s explanations for the delay as reasonable, adequate or sufficient.

2. The Applicant does not have an arguable case in seeking to object to the assessment notices because there is no discretion that the Respondent or the Tribunal can exercise to waive the surcharge land tax when the statutory criteria has not been met.

3. The Applicant is not prejudiced if an extension of time is not granted, as the Respondent ultimately cannot exempt the Applicant from the surcharge land tax subject of the assessment notices.

90. The Tribunal is not satisfied that the Applicant has discharged his onus to prove his case. 

91. It follows that the correct and preferable decision is that the Tribunal affirms the Respondent’s decision to refuse to extend the time to lodge an objection in relation to the assessment notices.

Order

92. The decision under review is affirmed.

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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

Decision last updated: 21 August 2025