NAB v Chief Commissioner of State Revenue

[2008] NSWSC 731

CITATION:	NAB v Chief Commissioner of State Revenue [2008] NSWSC 731
HEARING DATE(S):	16 July 2008
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	16 July 2008
DECISION:	Notice of motion dismissed. Defendant to pay plaintiff's costs.
CATCHWORDS:	EVIDENCE - Expert Evidence - Issue on appeal whether the provision of EFTPOS terminals were arrangements for the use of goods the provision of which is incidental and ancillary to the provision of a service if the provision of the goods is solely to enable the contractual provision of the service within the former s 186(1)(f) of the Duties Act 1997 and hence exempt from hire of goods duty - Whether expert report on general nature of the electronic banking system in Australia relevant to the question what was the intention of those responsible for the provision as to what the goods were to be used for - Whether leave to adduce the expert evidence should be granted under the Uniform Civil Procedure Rules 2005, r 31.19(3).
LEGISLATION CITED:	Duties Act 1997 Uniform Civil Procedure Rules 2005 Civil Procedure Act 2005 Payment System (Regulation) Act 1998 (Cth)
CASES CITED:	Chief Commissioner of State Revenue v Telstra Corporation Limited [2006] NSWCA 370, (2006) 65 ATR 309
PARTIES:	National Australia Bank (Plaintiff) Chief Commissioner of State Revenue (Defendant)
FILE NUMBER(S):	SC 6349/04
COUNSEL:	Mr M Richmond (Plaintiff) Dr H Sorenson (Defendant)
SOLICITORS:	Mallesons Stephen Jaques (Plaintiff) Crown Solicitor's Office (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

WEDNESDAY 16 JULY 2008

6349/04 NATIONAL AUSTRALIA BANK LTD v CHIEF COMMISSIONER OF STATE REVENUE

EX TEMPORE JUDGMENT

1 The issue before the Court on this appeal relates to an exception to duty formerly payable with respect to a hire of goods as defined under the since repealed s 183(1) of the Duties Act 1997. The exception was contained in the former s 186(1)(f). It provided that a hire of goods did not include an arrangement for the use of goods the provision of which was incidental and ancillary to the provision of a service if the provision of the goods was solely to enable the contractual provision of the service. The question is whether the provision by the National Australia Bank of EFTPOS facilities falls within the exception.

2 The application before the Court by the Chief Commissioner is for leave to adduce expert evidence in relation to the operation of that exception. The Uniform Civil Procedure Rules 2005, r 31.19(3) provides that unless the Court otherwise orders, expert evidence may not be adduced at trial unless directions have been sought in accordance with the rule and if any such directions have been given by the Court, otherwise than in accordance with those directions. The purpose of the provision is to restrict the adducing of expert evidence. It is part of the way in which the overall objective in s 56 of the Civil Procedure Act 2005, to facilitate the just, quick and cheap resolution of the real issues in proceedings, is accomplished.

3 If I grant leave to adduce expert evidence in this matter it will add to the cost of the proceedings, not only in relation to the provision of the expert evidence by the Chief Commissioner, but also in relation to the provision of any expert evidence in rebuttal.

4 In Chief Commissioner of State Revenue v Telstra Corporation Limited [2006] NSWCA 370, (2006) 65 ATR 309, the Court of Appeal took the view that what was under consideration was what the provision of the goods was for. That required consideration of the intention of those responsible for the provision as to the use for which the goods were provided. What was relevant was the intention of the provider as to what the goods were to be used for, as manifested by objective circumstances including the terms of the contract.

5 Dr Sorensen, who appears for the Chief Commissioner, argues that the case that has been put forward by the NAB is a general one. Mr Richmond, who appears for the NAB, points out that it is impossible to deal with the matter otherwise than by taking representative situations and what has been put on in the evidence as representative transactions are the arrangements between the NAB and various merchants and the arrangements between the NAB and the suppliers of the EFTPOS terminals.

6 Dr Sorensen submits that since the case is a general one, a bigger picture is relevant because if large fees are generated for the supply of the terminals, that factor will be significant with respect to whether or not there is an additional purpose outside the terms of the exception.

7 The nature of the expert evidence sought to be adduced comprises a brief overview of the Australian electronic card payments system, including the ATM network. The overview covers scheme credit and debit cards (Visa, MasterCard and Bankcard) and also the proprietary PIN debit EFTPOS system. There is also some discussion of charge card systems such as American Express and Diners Club and some other minor products such as BarterCard as well as loyalty and prepaid cards. A short history of the Australian card payments market is also included for reference and to put some of the subject matter into context. It is said that the systems described have evolved gradually over time and this helps to explain why they operate the way they do. Further, the proposed report of the expert briefly describes the regulatory work of the Reserve Bank of Australia, undertaken by the Payments Systems Board using powers granted to them by the Payment System (Regulation) Act 1998 (Cth), as their reforms were progressively implemented from 1 January 2003.

8 In my view, in determining the issue it is called upon to do, the Court is not going to be assisted by general evidence as to the electronic banking system in Australia. It seems to me to be far too broad an approach.

9 It is, of course, not disputed that the Chief Commissioner is not limited to the decision on objection in resisting an appeal to this Court. But it seems to me that what is sought to be identified in the proposed expert report bears little relationship to the intention of the NAB in providing its EFTPOS facilities. The nature of the expert evidence sought to be adduced is not such as to persuade me that I should grant leave to adduce the report under the Uniform Civil Procedure Rules, r 31.19(3).

10 The notice of motion is dismissed. I order the Chief Commissioner to pay the plaintiff's costs. I stand the matter back into the ECM Court.

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