Nova Security Group Pty Ltd v Chief Commissioner of State Revenue - [2025] NSWCATAD 124

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: Nova Security Group Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCATAD 124
Hearing dates: 5 September 2024
Date of orders: 03 June 2025
Decision date: 03 June 2025
Jurisdiction: Administrative and Equal Opportunity Division
Before: C Mulvey, Senior Member
Decision:
The Assessment be remitted to the Chief Commissioner of State Revenue for determination in accordance with these Reasons for Decision.

Catchwords:
TAXES AND DUTIES – payroll tax – employment agency contracts - whether services were provided in and for the conduct of the clients’ businesses

Legislation Cited:
Liquor Act 2007
Payroll Tax Act 2007 (NSW)
Security Industry Act 1997 (NSW)
Taxation Administration Act 1996 (NSW)

Cases Cited:
Chief Commissioner of State Revenue E Group Security Pty Limited (2022) 109 NSWLR 123
Chief Commissioner of State Revenue v Integrated Trolley Management Pty Ltd [2023] NSWCA 302
Commissioner of State Revenue v Liquid Rock Constructions Pty Ltd (2012) 87 ATR 921
E Group Security Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1190
HRC Hotel Services Pty limited v The Chief Commissioner of State Revenue (2018) 108 ATR 84
Infinity Security Group Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCATAD 28
J P Property Services Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 1391
Southern Cross Group Services Pty Limited v Chief Commissioner of State Revenue (2019) 108 ATR 16
UNSW Global Pty Ltd v Chief Commissioner of State Revenue (2016) 104 ATR 577

Texts Cited:
None cited

Category: Principal judgment
Parties: Nova Security Pty Ltd (Applicant)
Chief Commissioner of State Revenue (Respondent)
Representation:
Counsel:
D Stretton (Respondent)
Solicitors:
Gupta & Co (Applicant)
Crown Solicitor(Respondent)

File Number(s): 2024/00095909
Publication restriction: None

REASONS FOR DECISION

Before the Tribunal is an application lodged by Nova Security Group Pty Ltd (“Nova”) concerning its liability to payroll tax for the financial years ended 30 June 2019 to 30 June 2022 under the Payroll Tax Act 2007 (NSW) (“PTA”). Nova is a private security firm.
Nova disputes how the Chief Commissioner of State Revenue (“Chief Commissioner”) has determined to characterise the security services Nova provides to its clients for payroll tax purposes. In the financial years ended 30 June 2019, 30 June 2020 and 30 June 2022 (“relevant years”), Nova provided security services at licensed venues such as pubs and clubs, and supplied guards to other security firms for larger events such as rugby games. It used subcontractors to provide the services.
The principal issue in dispute is whether the arrangements between Nova, its clients and third-party labour hire companies used by Nova are "employment agency contracts" as defined in s 37 of the PTA.
The Chief Commissioner determined that Nova's services occurred "in and for" its clients' businesses. Under Part 3 Division 8 of the PTA, the Chief Commissioner determined that this made Nova an "employment agent" liable to payroll tax on payments it made to subcontractors in the relevant years. The Chief Commissioner issued payroll tax assessments to Nova on that basis (“assessments”).
Nova disputes this determination and seeks review under s 96 of the Taxation Administration Act 1996 (NSW) (“TAA”). Nova contends that it does not procure the services of the security guards from third party labour hire companies "in and for the conduct of the business of its clients, as explained in UNSW Global Pty Ltd v Chief Commissioner of State Revenue (2016) 104 ATR 577 at 593 [62] (“UNSW Global”).
The Chief Commissioner contends that the assessments should be confirmed. The Chief Commissioner asserts that while Nova's contracts with its clients must be examined individually, characterising security services as not "in and for" a client's business "is suggestive of error" - Chief Commissioner of State Revenue v Integrated Trolley Management Pty Ltd [2023] NSWCA 302 (“ITM Appeal”), [54] (Basten AJA). The Chief Commissioner contends this follows from the close relationship between security services and the ordinary conduct of the client's business: the services attach to the clients' premise; customers and staff; they help fulfil the client's liquor licence obligations; they are regularly required; and they implement the client's policies. The security licensing framework and Nova's contracts do not suggest otherwise.
The resolution of this dispute will determine whether Nova is liable to pay payroll tax in respect of amounts that relate to the labour of security guards provided by third-party labour hire companies to it.
Nova also contends there is a dispute about double taxation concerning on-hire guards and whether penalties and interest should be remitted and, if so, whether in whole or in part.

Nova’s business and its contractual relationships

Since Nova was incorporated in 2018, it has held a master licence under the Security Industry Act 1997 (NSW) (“SIA”). It is not in dispute that Nova enters into contracts with its clients to provide security services for a fee (“security contracts”). Nova’s security services involve crowd control, checking identification documents, monitoring patron’s intoxication and behaviour, searching bags and ensuring safety within a venue. Nova provides these services in accordance with a security management plan that it prepares for each venue that it provides security services. Nova has had many clients over the years, usually being licenced venues, predominantly pubs and clubs (“business clients”). Security contracts between Nova, Opera Bar and Quay bar in Sydney and UOW Pulse Pty Ltd (“UOW Pulse”) are before the Tribunal.
With the exception of Parramatta Leagues Club, and a partial exception for UOW Pulse, Nova’s customers do not hold a master security licence under the SIA. UOW Pulse’s parent entity University of Wollongong holds a master licence and deploys security guards across its campus.
Apart from the business clients, Nova also on-hired guards to other security businesses during the relevant years (“security clients”). These guards were provided to other security firms when a request was made to Nova. Nova also used security guards from other security firms when it was required to increase the number of guards required for a particular job or event. Invoices for the on-hire of guards were rendered by the company which supplied the guards.
Security clients held their own master licence.
Nova mostly used subcontractors to provide its security services. The main providers of subcontracted labour in the years 30 June 2019 to 30 June 2020 were the Heckenberg Group, Headquarters Group Pty Ltd and Makk Plumbing Services Pty Ltd (“three subcontractors”), each holding a master security licence.

The assessment

I have adopted the following from the Chief Commissioner’s written submissions as the assessment is relevant to this application.
On 22 November 2022, the Chief Commissioner, having completed an investigation issued assessments to Nova for the financial years ended 30 June 2019, 30 June 2020 and 30 June 2022. No assessment was issued for the financial year ended 30 June 2021. This was because Nova was below the payroll tax threshold for that year. The Chief Commissioner determined that the basis for the assessments was that Nova was liable to payroll tax in respect of payments made to its NSW subcontractors during the relevant years. Nova was also liable to interest on unpaid tax pursuant to ss 21 and 22 of the TAA (comprised of the market rate component only), plus 20% penalty tax pursuant to ss 26, 27 and 29 of the TAA (reduced from the usual 25% because Nova had provided adequate information during the investigation).
The assessment was as follows:

FY Ended 30 June	Subcontractor Payments	Primary Tax	Interest	Penalty Tax	Total Assessment
2019	$2,421,613.00	$89,049.35	$753.42	$17,809.87	$107,612.64
2020	$3,282,255.16	$104,060.71	$26.92	$20,812.14	$124,899.81
2022	$3,604,554.95	$63,043.39	$0.00	$12,608.68	$75,652.07
Total	$9,308,423.11	$256,153.45	$780.38	$51,203.69	$308,164.52

On 23 January 2023, Nova objected to the assessments. It later provided additional documents and information.
On 18 December 2023, the Chief Commissioner disallowed the objection.
The Chief Commissioner confirmed his determination that the security contracts between Nova and its business clients and security clients were "employment agency contracts" within the meaning of s 37(1) of the PTA. That is, they were contracts under which Nova (“the employment agent”) procured the services of others (“subcontracted security guards”) "for" - in the sense of "in and for" the conduct of the businesses of - Nova's clients. On that basis, Nova was liable to payroll tax in respect of payments made to its NSW subcontractors during the relevant years. Those amounts are taken to be wages under s 40(1)(a) of the PTA, because they are amounts paid in respect of the provision of services under an employment agency contract. This resulted in a tax default because Nova had not paid payroll tax on those amounts. This default led to the imposition of interest (at the market rate) and 20% penalty tax, as reflected in the assessments.
On 13 March 2024, Nova filed these proceedings seeking administrative review of the assessments.

Issues to be determined

The following issues arise in these proceedings:

The "In and for" question. Were the security contracts between Nova and its clients "employment agency contracts" within the meaning of s 37(1) of the PTA? Since other aspects of s 37(1) are not in dispute as conceded by Nova, the question to be determined is - Did Nova's guards provide security services "in and for" its clients' businesses?

Double taxation issue. Have Nova's subcontractors already paid payroll tax in respect of Nova's guards, and if so, does s 41 of the PTA then excuse Nova from liability to payroll tax?

Penalty tax and interest issue. Should penalty tax and/or interest be remitted under the general powers in ss 25 and/or 33 of the TAA?

The legislative regime

The following provisions of the legislative regime are not in dispute.

PTA Act

Sections 6, 7 and 11 of the PTA requires employers to pay payroll tax for services provided by employees. This can include in some circumstances the requirement of employers to pay payroll tax for services provided by non-employees, for example, independent contractors.
Section 10 provides that taxable wages are wages that are taxable in this jurisdiction. Section 13(1)(e) provides that wages include an amount that is included as or taken to be wages by any other provision of the PTA.
Section 37 of the PTA provides:

(1) For the purposes of this Act, an
"employment agency contract" is a contract, whether formal or informal and whether express or implied, under which a person (an "employment agent" ) procures the services of another person (a "service provider" ) for a client of the employment agent.
(2) However, a contract is not an employment agency contract for the purposes of this Act if it is, or results in the creation of, a contract of employment between the service provider and the client.
(3) In this section--
"contract" includes agreement, arrangement and undertaking.

A contract being an employment contract brings payments under the contract within the definition of taxable wages. The employment agent under an employment agency contract is taken to be an employer – s 38 of the PTA. The person who performs work for or in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent – s 39 of the PTA.
Section 40 of the PTA provides:

(1) For the purposes of this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract--
(a) any amount paid or payable to or in relation to the service provider in respect of the provision of services in connection with the employment agency contract,
(b) the value of any benefit provided for or in relation to the provision of services in connection with the employment agency contract that would be a fringe benefit if provided to a person in the capacity of an employee,
(c) any payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee.

(2) Subsection (1) does not apply to an employment agency contract to the extent that an amount, benefit or payment referred to in that subsection would be exempt from payroll tax under Part 4 (other than under section 50 or Division 4 or 5 of that Part), or Part 3 of Schedule 2 (other than clause 5 or 13A), had the service provider performed the services as an employee of the client, if the client has given a declaration to that effect, in the form approved by the Chief Commissioner, to the employment agent.

An employment agency contract, in s 37(1), means a contract under which a person (the employment agent) procures the services of another person (the service provider)” in and for the conduct of the business of” the employment agents client: UNSW Global at [62]; Chief Commissioner of State Revenue E Group Security Pty Limited (2022) 109 NSWLR 123 (E Group Appeal) 127 [11]-[12], 130 [23].

Security Industry Act

Ward CJ, as she then was, in E Group Security Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1190 (“E Group Security”) set out the relevant provisions of the Security Industry Act. It is convenient to reproduce those paragraphs at [32]–[49] here:

Security Industry Act
32 Part 2 Div 2 of the Security Industry Act provides for three classes of security licences, each of which is divided into subclasses. Section 7 provides for offences for unlicensed persons engaging in the conduct that would be permitted by the licences.
33 The relevant classes of licence are as follows: s 10 provides for master licences (which allow the holder of the licence to provide her or his services to carry on security activities … or to provide other persons to carry on security activities, each of whom must hold a class 1 or class 2 licence…
34 In relation to master licences, the subclass determines the number of persons that the licensee may provide. For example, subclass MB allows for the provision of up to three persons; subclass ME allows for the provision of 50 or more persons.
35 Section 10(3) provides that:
A master licence does not authorise the licensee to enter into any arrangement, by contract, franchise or otherwise, with another person for the purpose of providing persons to carry on security activities unless the other person is the holder of a master licence or is a person holding a visitor permit authorising its holder to carry on security activities of a kind authorised by a master licence.

36 Section 38(1) provides:
A licensee must not delegate the carrying on of a security activity to a person who is not the holder of a licence authorising the person to carry on the same security activity.

Maximum penalty: 40 penalty units.
…
38 Section 29B(1) provides that:
A person who is the holder of a class 1 or class 2 licence must not carry on a security activity authorised by the licence unless the person:
a) is employed by a master licensee or the holder of a visitor permit authorising the holder to carry out security activities of a kind authorised by a master licence, or
b) is self-employed and is the holder of a master licence.
Maximum penalty: 500 penalty units or imprisonment for 2 years, or both.

…
40 I was taken to the second reading speech to the Security Industry Bill 1997 (NSW) (Security Industry Bill), which identified that the licensing system under that new legislation was “largely based on the IRC recommendations” (a reference to the 28 February 1997 report of Justice Peterson of the Industrial Relations Commission of NSW in relation to the cash in transit security industry (New South Wales, Industrial Relations Commission, Reference by the Minister for Industrial Relations pursuant to s 345(4) of the Industrial Relations Act 1991 regarding the transport and delivery of cash and other valuables industry, (February, 1997) – the IRC Report)).
…
42 The IRC Report also recognised deficiencies in the predecessor legislative regime, which imposed training and competency requirements on the individual holders of security licences but imposed no such requirements on the holders of business licences (then referred to as class 2 licences) (at 175-176). This led to a number of recommendations as to the requirements that should apply to the holder of a business licence. Recommendation 10(d) (at 182) was that business licensees should:
(d) be responsible for all failures by their franchisees, licensees and sub-contractors to satisfy minimum conditions while working for them. This is a two-fold requirement. The principal must exercise supervision and control to ensure that all requirements of the Code of Practices are met, as well as rectify and be responsible for any failures by his franchisees, licensees and sub-contractors to meet the conditions referred to above. [Emphasis as per E Group Security’s submissions]
…
45 That recommendation was followed. In the explanatory note to the Security Industry Bill it was said that:
The object of this Bill is to replace the Security (Protection) Industry Act 1985 with a legislative scheme that reflects the expansion and changing nature of the security industry.
The main feature of the proposed Act is a modified licensing scheme that is designed to provide greater control over persons who work in the security industry or who conduct a business in the security industry. Under the proposed Act, a person will require a licence if the person intends to work in the security industry (eg as a security guard, bouncer or security consultant) or to conduct a business in the security industry. A licence applicant will need to satisfy stringent probity assessments and suitability criteria in order to obtain a licence.

The SIA does not apply to persons identified in the Security Industry Regulation as being exempt. This was explained by Ward P in E Group. Relevantly, both the Security Industry Regulation 2007 (which relevantly applied from 1 July 2015 to 31 August 2016) and the Security Industry Regulation 2016 (which applied from 1 September 2016) exempted under Schedule 1 (item 8):

8. Licensees under the Liquor Act 2007 and employees who perform activities relating to the exclusion of persons from licensed premises as authorised by that Act (other than any such employee who is employed for the purposes of carrying on security activities), but only to the extent to which they act in that capacity.

TA Act

The TA Act applies in respect of “taxation laws” which are defined in s 4 of the TA Act to include the PTA.
Section 96 of the TA Act provides that a taxpayer may apply to the Tribunal for an administrative review of a decision of the Chief Commissioner that has been the subject of an objection.
Section 100 of the TA Act provides that Nova’s and the Chief Commissioner’s cases on an application for review are not limited to the grounds of the objection. Section 100(3) provides that Nova has the onus of proving its case in an application for review.
Section 101 of the TA Act sets out the powers of the Tribunal in dealing with an application for review and provides that the Tribunal may, amongst other things, confirm or revoke the assessment or other decision to which the application relates, make an assessment or other decision in place of the assessment or decision to which the application relates or remit the matter to the Chief Commissioner for determination in accordance with its finding or decision.

Principles concerning the ‘in and for’ test

White J, in UNSW Global at [63]-[65] said:

63. Whether the worker is to be characterised as an employee or a contractor, the employment agency contract provisions were intended to apply to cases where the employment agent provided individuals who would comprise, or who would be added to, the workforce of the client for the conduct of the client’s business.
...
64. One of the hallmarks of an independent contractor is that he or she carries on his or her own business. But sometimes that is done, or is said to be done, by the individual, in substance, working for the client in the same way as would an employee of the client. Where the services of the individual are provided through the intermediary, that is, the employment agent, to help the client conduct its business in the same way, or much the same way, as it would do through an employee, then the arrangement is within the intended scope of the section.
65. But where the services, although provided for the client’s benefit, are not provided by the service provider working in the client’s business, the arrangement does not fall within the intended scope of the provision….
[my emphasis]

Whether the services of a service provider are procured “for” the client, requires consideration of whether the service provider is sufficiently integrated into the clients business to be seen as an addition to the client's workforce, and works in much the same way as the clients employees: Southern Cross Group Services Pty Limited v Chief Commissioner of State Revenue (2019) 108 ATR 16 [60]; HRC Hotel Services Pty limited v The Chief Commissioner of State Revenue (2018) 108 ATR 84 at 116 [153].
Nova, in its written submissions makes the following distinction between the concept of being integrated and the concept of being integral, with which I agree. Nova contends: the correct test is whether the service provider is integrated into the client's workforce, not whether the services performed by the service provider are integral to the clients business, in the sense that the business could not operate without those services. This appears to follow from the reasoning of Ward P in HRC at 116 [153], in considering the various factors pointing to the contract housekeeping staff being ‘integrated’ into the client’s workforce. Her Honour found that the factors indicated that it would not be apparent to an ordinary hotel guest that there was a distinction between the arrested service providers and the employed staff. This is also consistent with her Honour’s findings in E Group Security at [328]-[329], the ITM Appeal at [3] and Senior Member Dunn in Infinity Security Group Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCATAD 28 at [124].
The Tribunal in Infinity Security Group said at [25]-[27], which I adopt:

25. White J’s construction was adopted in a large number of cases which followed including by Ward CJ in E Group Security Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1190 at [29] where it was common ground between the parties that the definition of employment agency contract was to be construed in accordance with the reasoning of White J in UNSW Global.
26. However on appeal, following a decision by Basten J in Bonner v Chief Commissioner of State Revenue [2022] NSWSC 441 in which His Honour suggested that that construction warranted appellate review, the Chief Commissioner contended that UNSW Global was wrongly decided.
27. The Court of Appeal in the First Appeal Decision rejected that argument holding that there should be no departure from the construction of s 37 in the existing case law: Chief Commissioner of State Revenue v E Group Security Pty Ltd [2022] NSWCA 115, noting at [46]:
The construction in UNSW Global accords with the purpose of the Act, by taking relationships which fall short of traditional employer/employee relationships and deeming them to be such. There is nothing to suggest however that Division 8 should entirely outflank its role as an add-on to common law notions of employment. This is not impermissibly to gloss the section. It is to recognise that the preposition “for” is protean and is capable of bearing a very wide range of meanings depending upon context, and the presently relevant context is its appearance in provisions which create a legal fiction – a deemed relationship of employer and employee – in a Payroll Tax Act.

The evidence

Nova relied upon the following evidence:

Application filed 13 March 2024

Bundle filed 28 June 2024 – (excising Ms Fiona Dolan statement 24 June 2024)

Statement Evan Wall 26 August 24

Exhibit EW-1

PTA 027 ruling

The Chief Commissioner relied upon the following evidence:

S58 bundle filed 18 April 24

S58 first bundle filed 18 April 24

S58 second bundle filed 11 July 24

Affidavit Tina Wu 2 August 2024

Exhibit TW 1 2 August 24

Tender bundle 6 August 24

Each party filed written submissions and a bundle of authorities.
Mr Evan Wall gave oral evidence and was cross-examined.

The Evidence

George Hales (Opera Bar)

Mr Hales provided a statement dated 25 June 2024. He was not cross-examined. Mr Hales was the manager of Opera Bar at the Sydney Opera House for about 5 years from September 2018 until January 2023. He has 15 years' experience working in hospitality venues, including overseas.
Mr Hales described the Opera Bar as a large venue with a capacity of 1800. Food and beverage is sold to the general public. Opera Bar hours are from 11am to 12am Sunday - Thursday and 11am to 1am Friday and Saturday.
Mr Hales gave evidence that Opera Bar staff did not perform any security duties. Opera Bar staff were not trained, or licensed to do so. Nova provided all security services to Opera Bar. Mr Hales had conversations with Nova managers on a daily basis in his role. This included planning the guard roster and weekly rosters and incidents at the venue. Nova was responsible for all rostering of guards at Opera Bar and provided a regular team of 7-8 guards. During peak times about 24 Nova guards were on shift. Guards shifts started at about 3pm to 4pm on weekdays, and 11am on Fridays, Saturdays, and Sundays. The guards would stay on duty until the venue closed at about 1:00am to 1:30am.
Nova Guards duties included, including access control, checking patrons' identification and intoxication levels upon entry, assessing patrons' intoxication levels throughout the night and ejecting patrons who were unruly or exhibiting antisocial behaviour. Guards were stationed all around the venue, including at entry points and bathrooms. The Nova supervisor would direct Nova guards and liaise with the Opera Bar managers to ensure that the guards were covering high-traffic areas in the venue. Mr Hales had discussions at the start of the night with Nova supervisor about the days plan.
Opera Bar owned radios and earpieces used by Nova guards. Opera Bar has separate radios for front-of-house and kitchen staff. Nova Staff would use the radios to communicate with each other and to communicate with front-of-house staff if there was a hazard present, such as broken glass. Front-of-house staff would clean up any broken glass if advised by Nova guards. Opera Bar staff did not get involved in security decisions. Any eviction of patrons was done in consultation with Opera Bar management and nova Security guards being present.
Nova guards wore plain black uniforms at Opera Bar during that time and were distinguished from Opera Bar staff. Nova guards used public toilets in the venue and usually brought their own meals. A discount for Opera Bar food was at the venue managers discretion.
I accept Mr Hale’s evidence.

John Stack (Opera Bar)

Mr John Stack provided a statement dated 21 June 2024. Mr Stack is the second-in-command to the licence of Opera Bar, John Gallas. Mr Stack’s evidence corroborates the evidence of Mr Hales. Mr Stack was not required for cross-examination. I accept his evidence.

Stephen Clark (UniBar)

Stephen Clark provided a statement dated 20 June 2024. He was not called for cross-examination. Mr Clark was the manager and licensee of UniBar at the University of Wollongong ('the University') since October 2022. Prior to that he was the assistant manager for two years with 16 years' experience working in and managing hospitality venues.
UOW Pulse Pty Ltd (UOW Pulse') is a not-for-profit organisation which runs all non-academic facilities and activities at the University including hospitality venues (UniBar) on the University campus. UniBar operates as a bistro-style pub, with happy hour from 4:30pm to 5:30pm. On the weekends, the UniBar becomes a live entertainment venue with event capacity ranging from 200 to 3,500 people. UniBar has about 30 employees who do not carry out any security duties, nor are they trained to do so.
UOW Pulse does not have a security license. UniBar's liquor plan of management states requires one security guard per 100 patrons at events. It is a requirement of the venues liquor licence to comply with the management plan.
UniBar only uses Nova for its events. Mr Clark, himself speaks to Nova office staff on a weekly, sometimes daily basis, to give feedback on their guards and organise security for future events.
When engaged for an event, Nova undertake a site visit to develop and execute a security management plan. Nova managers liaise with licensing police implement any suggestions made by the police, such as bag searches as entry points. For larger events, UniBar will also engage 'user pay' police who liaise with Nova management to carry out site inspections before the event, identify hazards and potential weak points, and advise on the number of guards. Mr Clark has a close working relationship with Nova, and he trusts and relies on their expertise to help us run events safely.
Nova has assisted UniBar in developing a written plan of management for liquor licencing purpose. UniBar management does not select the security guards that work at our events. Nova’s, Evan Wall is the contact point for this. A Nova supervisor coordinates all guards at the events. Mr Clark’s evidence sets out the duties performed by Nova guards which includes checking identification, assessing intoxication levels, monitoring patrons' behaviour, and ejecting patrons if they pose a security risk. Guards use their expertise in deciding whether to eject patrons from events.
Nova guards wear Nova-branded uniforms with their security license either on a lanyard around their neck or on an armband when they are working at UniBar events. UniBar staff wear UOW Pulse-branded uniforms. Nova Security guards use public toilets at events and do not have key access to any staff areas.
Nova uses its own technology for rostering and incident registers which. While UniBar has its own incident registers for Occupation Health and Safety and Liquor and Gaming matters, it uses Nova's incident register for security purposes. Nova security guards do not get any staff discounts at UniBar.
I accept Mr Clark’s evidence.

Drew Davies (Kubarz)

Drew Davies provided a statement dated 21 June 2024. He was not cross-examined. Mr Davies owns a mobile bar service business Kubarz, which has been operating in Australia since 2003.
Kubarz has operated alongside Nova Security (Nova) at events for approximately the last 4 years. When Nova and Kubarz have been engaged to provide services for the same event, Mr Davies has attended site visits with Evan Wall or other Nova managers. The purpose of the site visits is to identify various hazards and risk factors, both from a security perspective and alcohol service perspective. Nova is responsible for developing a security management plan for the event, and Kubarz develops a separate alcohol management plan.
Mr Davies understands Nova keeps a separate incident register for security-related incidents. On two to three occasions over the last 4 years Kubarz directly engaged Nova to provide security services where it was required to have security present under Kubarz liquor license. Kubarz liaised with Nova management to organise these events. Kubarz management did not select the particular guards that worked at these events. The roster was handled by Nova management and invoices were issued to Kubarz by Nova.
Kubarz staff members are not trained in, nor do they perform any security duties. At events hosted by Kubarz, Nova guards were positioned at the entry point to the licensed area and Nova was responsible for monitoring patrons' behaviour and ejecting patrons if they become unruly. Kubarz staff members usually wear all black uniforms. Nova staff always wore Nova branded uniform to events hosted by Kubarz.
I accept Mr Davies’ evidence.

John Stack (Opera Bar)

John Stack provided a statement dated 21 June 2014. He was not called from cross-examination.
Mr Stack had been the manager of Opera Bar at the Sydney Opera House since January 2022. He has 12 years' experience working in hospitality venues both domestically and internationally. Mr Stack is the second-in-command to the licensee of Opera Bar, John Gallas. Opera Bar has 6 assistant managers working at the venue, as well as 2 restaurant managers, 4 supervisors, and 170 staff members who comprise kitchen, bar, and waitstaff.
He gave evidence that Opera Bar staff members do not perform any security duties, nor are they trained, skilled, or licensed to do so. He understands Nova had been providing security to the Opera Bar for about 7 to 8 years. Mr Stack liaised with Evan Wall from Nova at least twice a week to discuss Opera Bar's security needs for the upcoming week. They also discussed Nova guards' performance over the previous weekend and changes to the security roster. He said, Nova is responsible for all rostering of security guards and the Opera Bar management does not “have any say over whether particular guards are rostered at the venue, however we have a team of 7-8 guards who regularly service the venue.”
On Monday to Thursday, Nova usually provide 6 guards, and between 8 and 11 guards from Friday to Sunday. Nova Guards carry out the following duties at Opera Bar:

Access control, checking patrons' identification and intoxication levels upon entry.

Assessing patrons' intoxication levels throughout the night.

Ejecting patrons who are unruly or exhibiting antisocial behaviour.

Providing security presence.

Gregor Bishanin, Nova guard supervisor, is at Opera Bar 6 days a week. Gregor is the point of contact for Opera Bar managers and he directs Nova guards and liaises with the Opera Bar managers to ensure that the guards are covering high-traffic areas in the venue.
Opera Bar has purchased through a Nova supplier radios and earpieces for security personnel. A dedicated security channel is used by guards, separate from food and beverage staff. The equipment is stored in a security room, which is only accessible by Gregor and Opera Bar managers and Nova guards, who may take their breaks in the security room.
Nova guards wear only Nova security-branded uniforms display their security license on an arm band. Nova guards do not use any staff facilities at the Opera Bar. They use public toilets in the venue.
Nova Guards typically bring their own food to eat during their breaks, or they will purchase food outside of the venue. They get a 20% 'contractor discount' discount if they purchase food and beverages from the venue. Staff members at Opera Bar get a 50% discount on food.
Mr Stack understands Nova uses an app called Guard House for invoicing and rostering purposes. Opera Bar management can view the Guard House app for visibility concerning Nova's weekly roster for the venue. Nova and the Opera Bar use separate logins to an app called Aus Comply for the recoding of incidents at the venue.
Opera Bar staff do not get involved in security decisions, apart from a high level of communication between Nova staff and Opera Bar management to ensure the venue is operating smoothly.
I accept Mr Stack as reliable witness.

Navid Alipor (previous director of Nova)

Navid Alipor provided a statement dated 19 June 2024. He was not cross-examined. Mr Alipor was a director of from 20 September 2018 holding various security and first aid qualifications during this time. During the tax years 2019, 2020, 2021, and 2022, Mr Alipor was mostly responsible for management of the company accounts. Evant Wall, Nova’s general manager was responsible for operational matters, including rostering, onboarding new clients and guards, undertaking risk assessments of client's venues, and developing security management plans.
Mr Alipor gave evidence that Nova was issued and renewed annually a Master Security License in 2018. Nova is subject to random audits and inspections by the Security Licensing and Enforcement Directorate of the NSW Police ('SLED') to ensure that we are complying with the SIA. All Nova security guards have 1A and 1C security licenses, first aid training and a Responsible Service of Alcohol (RSA) qualification.
Mr Alipor gave evidence that None of Nova's business clients during his time as director had a security license except Parramatta leagues club and University of Wollongong.
Mr Alipor gave evidence that when Nova is engaged by a new business client, it will undertake a risk assessment and inspection of the venue to understand the potential risks and hazards associated with the venue. Nova creates a security proposal and management plan for each client, usually led by Evan Wall. Nova will also make recommendations on the security protocols required for each individual venue.
Nova has created a suite of policies and procedure, including, standard operating procedures (“SOP"), fit to work policies and anti-discrimination policies. The polices are provided to all guards during their onboarding session.
Mr Alipor said, Evan Wall is the main contact point to deal with operational matters with Nova clients. When Evan is away, Mr Alipor would take in this role.
Nova uses an app called 'Guard House' for rostering, invoicing, payroll, and incident registers for each client. Nova stores its master license, standard operating procedures and policies on the Guard House app. Each of Nova’s clients and guards are given login access to the Guard House app. Some venues we use Aus Comply instead of Guard House for an incident register. Only Nova Guards can only report incidents on the Nova incident register on Aus Comply. Guards do not have access to individual client incident registers.
Mr Alipor said the schedule for Nova guards varies depending on its clients individual needs which, can be increased during public events such as Australia Day, and Mardi Gras. Nova’s clients are not able to supervise Nova guards, as they do not have a security license.
Nova guards have their own security licenses, and they work independently when they are positioned at a client's venue. Clients do not provide any training to Nova guards. At large venues, we have a Nova supervisor onsite to supervise and coordinate the guards.
All of Nova's guards wear Nova Security-branded uniforms.
Nova usually provides radios and earpieces to its clients at no additional cost.
I accept Mr Alipor as a reliable witness.

Evan Wall (Nova staff)

Evan Wall provided a statement dated 20 June 2024. He was cross-examined. Mr Wall has been the general manager of Nova its inception in 2018. Mr Wall holds a security licence and has been working as a security guard for 24 years.
Mr Wall gave evidence that during the tax years 2019, 2020, and 2022, Nova had approximately 25 "business clients”, mostly owning and operating licenced venues such as bars and hotels. Some business clients operate colleges, restaurants, construction companies, and country clubs.
Nova's business clients (except for Parramatta Leagues Club) do not have a security licence, so they must outsource their security operations through a licensed security provider. Parramatta Leagues Club has its own security licence; however it hires Nova Security to perform its security functions on game days due to the size of the security operation.

Nova's quality management systems were independently audited by Guardian Independent Certification Ltd in July 2021. When Nova onboards a new security guard, the guard undergoes an induction program and is provided with copies of Nova’s policies and procedures. Nova holds public and products liability insurance to the value of $20,000,000.00.
Mr Wall confirmed when Nova is engaged by a new business client, it will undertake a risk assessment onsite to understand the nature of the venue and determine potential hazards. Nova will then create a risk assessment matrix and a security management plan for that site, which he said is a requirement under the SIA. NSW Police checks that Nova maintains its security management plans for each client in its audit.
Mr Wall gave evidence that when a new guard is being deployed to a client's venue, Nova provides the guard training for that specific venue. Large venues such as Opera Bar, Nova stations a supervisor at the venue, who provides a venue specific induction. For smaller venues a NOVA area manager or general managers provides onsite induction.
Mr Wall confirmed the use of the Guard House app as set out above.
Mr Wall said that Nova is responsible for its security services and determines how many guards should be used based on the capacity of the venue. Nova liaises with clients on a weekly basis about guard requirement, which fluctuates depending on the venues events.
At client venues, Mr Wall gave evidence that the Nova Standard Operating Procedure sets out the security guards' general duties including: controlling patrons' access to the venue; checking identification of patrons; bag searches; monitoring behaviour and intoxication levels of patrons and ensuring the safety of all patrons.
On occasion, Nova guards will collect empty glasses from around the venue to avoid a risk of glasses being used as a weapon in fights between patrons.
Nova managers undertake site inspections and visits for clients at least once a month. A number of issues are considered including, workplace health and safety, checking the number and quality of Nova guards, ensure our security management plan is effective for the venue, review the site incident registers, and ensure that the venue managers are happy with Nova services.
Mr Wall gave evidence that Nova's security guards control themselves at a venue. Each guard holds a security licence, and is responsible for ensuring that they follow the Nova SOP (a copy of which is in evidence).
Mr Wall said Nova generally provides radios and earpieces to its clients as part of its security services at no additional cost. Some large clients, such as Opera Bar, purchased their own radio and earpieces through Nova’s radio provider. Other venues may be charged an additional fee for radio and earpiece hire from Nova.
Nova security guards generally do not have access to clients' staff facilities such as toilets, break rooms, and back offices. The Nova supervisor for Opera Bar is the exception- they have access to the security room for the purpose of collecting and returning radios and earpieces.
Mr Wall said Nova’s guards interact with patrons of client's venues usually when patrons enter and exit a venue. This includes deciding whether to admit a patron, including conducting a bag search. Nova guards speak with patrons in their capacity as a security guard when making decisions to remove a patron for anti-social behaviour including to determine a patrons level of intoxication. Nova at times interacts with client’s staff about these matters, but ultimately it has the responsibility to decide whether to remove a patron. Nova guards will assist with basic first aid until another responder attends.
Mr Wall said he disagrees with the Chief Commissioner of State Revenue's contention that Nova's client UOW Pulse has a security licence. He said the UOW has its own security licence, which is utilised for security personnel on the university grounds. UOW Pulse is a separate legal entity which organises events on the UOW campus, including parties and gigs at the UniBar. He said that UOW Pulse does not have a security licence, so Nova is engaged to provide security services in the UniBar and for events run by UOW Pulse. Events run by UOW Pulse outside of the UniBar are fenced off by UOW Pulse, and Nova guards are posted at the entrance to those events.
The UniBar and events run by UOW Pulse on campus grounds are outside of the jurisdiction of the security guards who monitor the UOW campus. The UOW security guards do not monitor those events or the UniBar. If a Nova guard ejects a patron from the UniBar or a UOW Pulse event for unruly behaviour, then the patron will be dealt with by campus security once they have left the jurisdiction of UOW Pulse.
In the 2019 to 2020 financial years, Nova's main labour providers were Heckenburg Group (ABN 68624429750), Headquarters Group Pty Ltd, and Makk Plumbing Services Pty Ltd. A copy of the relevant agreements are annexed to Mr Wall’s evidence.
At the early stages of Nova being established it on-hired guards to a business known as Goldcrest. Guards were on-hired to Goldcrest under this agreement but at a very low margin of $1-2 per hour. NOVA no longer on-hire guards to Goldcrest. Mr Wall said that guards obtained from our usual labour hire companies, Heckenburg Group, Headquarters Group and Makk Plumbing Services were on-hired to Goldcrest. There was no separate agreement between Nova and these labour hire companies related to the on-hiring of guards to Goldcrest (ie, the agreement between Nova and its subcontractors was the same regardless of whether Nova's clients were business clients or security clients such as Goldcrest).
Mr Wall said Nova has a strong working relationship with other security companies, including National Events Services ('NES"), CVEM Security, Challenger Security, and Charlie's Angels Security. NES provides services to Allianz Stadium, and CVEM Security provides services to Qudos Bank Arena in Sydney Olympic Park.
When these security companies require additional support for big jobs, NOVA assists them. Other companies provide labour to NOVA requires additional support. Mr Wall gave evidence that on-hiring of guards to Goldcrest in 2019 and 2020 and on-hiring guards to other security services companies in some circumstances is incidental to NOVA’s work as a full service security provider.
In a second statement dated 26 August 2024, Mr Wall set out the training required to obtain a class 1 security licence and the requirements for a security training organisation. Mr Wall also sets out the following duties NOVA guards conduct under the SIA:

a. How patrons are to be removed from the premises;
b. How the guards may remove patrons;
c. How to check patrons' identification;
d. Factors to consider in assessing intoxication levels;
e. Screening patrons prior to entry into the venue.

Mr Wall said Nova guards have extensive security knowledge, training, and experience to hold a security licence and understand their obligations under the SIA and the Security Industry Regulation 2016 (NSW). Nova guards do not defer to venue staff or management in carrying out security duties, but rather the NOVA manager when required to do so.
During cross-examination Mr Wall said when other security companies wanted extra guards, NOVA would provide a list of the guards and the other company and it would sign off on the guards provided. He said, NOVA would tell the guards where and when to go. It was not the other company which directed this. He conceded that when the guards arrived at a location they received a briefing form the other company and from Nova. He said the guards may be supervised at the venue, not necessarily by the security company the guards are hired to.
Mr Wall said the guards are distinguishable because they wear a security licence.
Mr Wall agreed that before Nova works at a venue it creates a security management plan. The purpose of the plan is to set out the procedures and expectations of requirements, not specifically how to carry out the guards work. He said each SOP is adapted to a particular event and venue.
Mr Wall gave evidence that it is important Nova’s guards follow the procedure, that they are important documents and the safety management plan is sent to police, after the venue confirming the plan.
Mr Wall was cross-examined about the control Nova guards had at the ‘Spring loaded’ event at the Wollongong Uni Bar. He was asked question about the SMP for that event. I find the cross-examination did not reveal that Nova guards were required to comply or be directed by management of the event in them making intendant decisions as security guards. While Nova guards were involved in consulting the client’s management about some things such as when a person was to be evicted from the event, I find that the Nova security guards relied upon their skills, training and expertise in how they carried out their role. This is because the venue management nor its staff tell or instruct the guards, for example, how to check ID’s, how to do RSA checks, and how to remove someone from the venue. In undertaking these tasks, I accept Mr Wall’s evidence that the guards rely upon their specialised training for which they hold a security licence. If in any doubt, I accept that the guards defer to Nova management and their SOP’s.
I accept Mr Wall as a reliable witness.

Brandon Tennent

Brandon Tennent provided a statement dated 25 June 2024. He was not cross-examined. Mr Tennent is, and, has been for 2 years, the licensee and general manager of the Oxford Hotel. He has experience working in and managing hospitality venues since 2013.
The Oxford Hotel is a heritage-listed hospitality venue located in Paddington. It has four distinct entertainment spaces hosting weekly events such as drag shows, music performances, trivia nights, and bingo. A bistro, at the venue serves food daily from 5pm to 9pm.
The Oxford Hotel operates from 10am to 4am Sunday to Thursday, and 10am to 6am on Fridays and Saturdays. It is required under its liquor license to have a security presence at varying times throughout the week. For the last years, the hotel relies upon NOVA to discharge our security obligations. Of the 20 staff members at the hotel none of them hold a security licence, nor do they provide any security services.
During the week, there is usually one security guard rostered at the venue and at least 3 security guards on the weekend. One guard mans each entry door, the third roams the venue. The guards' duties include checking IDs, assessing intoxication levels, managing the headcount in the venue and the ratio of guards to patrons, and assisting with refusals of service and ejecting patrons from the venue. The guards do not undertake any non-security related roles.
Nova’s supervisor/head guard is Benson who supervisors the guards on weekends. Benson is the key contact point between the staff and management at the Oxford Hotel about guards performance, or if it is a serious issue, Evan Wall is contacted. NOVA arranges the guards roosters.
Mr Tennent liaises multiple times a week with Nova management. They discuss the venue’s events, needs for guards and the guards' performance. From time to time, Nova attend the venue and check that the security management plan is effective.
Nova trains its guards specifically for the venue which services the Sydney queer community. Nova provides its guards with anti-discrimination training.
Staff at the venue liaise with NOVA guards when a patron is required to be removed Nova security guards assist our staff members if patrons refuse to leave the venue after bar staff make such requests. Nova guards will also eject patrons if they pose a security risk. An Oxford Hotel manager will usually accompany Nova guards when they are ejecting a patron. Oxford Hotel patrons, particularly those who are part of the queer community, are familiar with the managers, and they respond better to ejections from the venue when security guards are supported by management.
Nova guards wear radios and earpieces which are used to communicate with each other and Oxford Hotel management. Nova provides this equipment to the venue as part of its service.
Mr Tennent gave evidence that Nova guards wear Nova-branded uniforms when they are working at the venue. All guards have their security license and responsible service of alcohol certification on display in an armband. Nova security guards do not have keys to access staff areas of the venue. Nova security guards do not get any discounts or free food at the venue.
I accept Mr Tennant as a reliable witness.

Tina Wu

Tina Wu is an employed solicitor within the office of Karen Smith, Crown Solicitor for New South Wales. Ms Wu provided an affidavit affirmed on 2 August 2024. Ms Wu was not cross-examined. Ms Wu conducted various searches of a database known as MARS (Modernised Advanced RECOUPS System). MARS is Revenue NSW’s internal system for state taxes. The searches reveal that Headquarters Group Pty Ltd has never been registered for, and has never paid, payroll tax (including in the relevant years). Makk Plumbing Services Pty Ltd has not paid payroll tax. Heckenberg Group Pty Ltd was registered for, but has never paid, payroll tax (including in the relevant years). Ms Wu’s evidence was not challenged. I accept her evidence and find accordingly.

The Parties’ submissions

There is no dispute that Nova procured the services of its security guards for its clients. The only issue in dispute is whether Nova did so “in and for the conduct of the business of” its clients in the sense required by UNSW Global. The Chief Commissioner contends that it did. Nova contends that it did not.
The following is a summary of the parties submissions as to the factors they say are relevant to the determination of the “in and for” test.

Nova

Nova contends that the focus of the inquiry is on the manner the service provider provides the service, and whether that manner of provision of services is indicative of the service provider being integrated into the clients workforce and working in much the same manner as the clients employees. In determining whether the agreements constitute employment agency contracts, various factors concerning whether the service provider is integrated into the client's workforce or business is required to be examined.
Despite Nova security guards performing their duties which very between different clients and client industries, Nova contends that across all of its clients industries, the evidence demonstrates that security guards are not integrated into the clients workforce. In that regard Nova contends that it strictly maintains control of its guards and its clients do not exercise any degree of control over them. The security guards follow Nova’s directions, operating procedures and instructions and they remain distinctly within Nova’s command, control and reporting structure. There is no role for, and its clients do not provide directions or instructions to the security guards, and the security guards remain entirely separate from the command, control and reporting structure that applies to the clients workforces.
Nova submits that the SIA, which regulates the performance of security activities, mandates that Nova must maintain control over the security guards. This mandatory requirement prohibits security guards from being integrated into the control, command and reporting structure that applies to the clients workforces, and prohibits them from being integrated into those workforces. Nova says that it ensured the guards comply with this requirement by itself maintaining the command control and reporting structure of the guards separate from its clients.
As the SIA prohibits a licensee from delegating its functions to another person who is not the holder of the relevant class of licence, and a master licence does not permit the provision to an unlicensed person of persons to carry on security activities, Nova ensures that its commercial arrangements comply with these requirements.
Nova contends that its business clients do not have master security licences. They cannot and do not employ security guards nor carry out security activities. Nova submits it does not and cannot provide a labour force of security guards to those clients, nor can it or does it delegate its functions to those clients.
Nova relies upon the following factors which it says demonstrates that its security guards are not integrated into the clients’ workforces, including:

they wear uniforms with Nova’s branding;

they us publicly available facilities and do not use staff rooms available to the client’s staff;

Nova is responsible for all site inductions, training (both initial and ongoing), licensing compliance and rostering for the security guards;

Nova provides training to guards based on each venue’s particular needs;

Nova prepares instruction manuals and other documentation used by the security guards for direction and guidance in the performance of their functions. The clients of Nova are relatively large businesses and operate in a highly regulated industry, often having their own operating procedures and other staff manuals. But they are not specifically related to the provision of security services or encompass the regulation of security industry and services pursuant to the SIA.

In relation to the security clients, Nova contends that its agreements with the three labour hire companies, were not employment agency agreements and the labour hire companies were required to pay payroll tax on the payment of the labour. Nova says that requiring it to pay payroll tax will lead to double taxation.
Nova contends the ITM Appeal is distinguishable on its facts and rejects the Chief Commissioner’s contention that previously decided cases, such as E Group Security are no longer good law with respect to the question of determining “in and for” the business of, in s 37 of the PTA.

The Chief Commissioner’s Submissions

The Chief Commissioner relies on the security contracts between Nova and its clients as employment agency contracts. The three security contracts which are in evidence are those which relate to Opera Bar, Quay Bar and UOW Pulse. The Chief Commissioner makes the following submissions in respect of each of those contracts.

Opera Bar and Quay Bar

Opera Bar’s Liquor Licence requires it to comply with a plan of management dated 26 April 2016 which relevantly provides under the heading “Security Staff”:

“The licensee shall require any security personnel when employed at the premises to:
(i)   Be dressed in readily identifiable uniform so that a member of the public would readily be aware of their position and duties. This may include a particular uniform or badge.
(ii)   Fill in a timesheet (with start and finish times) which is to be initialled by the manager/licensee on duty.
(iii)   Report to the manager/licensee to obtain a briefing on any specific duties to be addressed before commencing duty.
(iv)   Ensure that persons entering the premises are suitably attired in accordance with the premises [sic] dress code, which shall require patrons, at least, to be neatly dressed in casual wear, with footwear and to be clean. No person wearing any clothing, jewellery or accessories indicating association with any gang, including colours, patches, abbreviations, etc., including 1 percent, or 1 percenter insignia are to be permitted entry.
(v)   Prevent any person, detected as intoxicated, entering the premises and bring to notice of the licensee or manager, any person on the premises who might be considered to be in, or approaching, a state of intoxication.
(vi)   Prevent patrons from leaving the premises with glasses or alcoholic drinks.
(vii)   Monitor patron behaviour in, and in the vicinity of, the premises until all patrons have left, taking all practical steps to ensure the quiet and orderly departure of patrons.

(viii)   Collect any rubbish in the vicinity of the premises that may be associated with the business.
(ix)   Collect any glass located in the vicinity of the premises to remove potential weapons.
(x)   Coordinate with the police, Sydney Opera House security and other private security personnel operating in the vicinity of the premises.
(xi)   Patrol all toilets, at random intervals, notifying the licensee or management of any suspected illegal activity, or if the toilets need attention in regard to cleanliness. If there are no female security on duty then prior to entering female toilets an announcement is to be made of the incoming patrol by knocking on the door and clearly stating that these toilets are about to be inspected by a male security person.
(xii)   In the event of an accident, clearly identifying themselves as security belonging to the premises and attempt to rectify the problem.”

The Chief Commissioner contends that Opera Bar needs to maintain a degree of control over its security services so that it can set and enforce those specific requirements of the plan of management.
The Chief Commissioner makes similar submissions with respect to Quay Bar’s development approval requirements (rather than the requirements Opera Bar has with respect to its Liquor Licence), requiring a similar set of conditions for security employed at Quay Bar to comply with. Those factors do not need to be set out in detail as they reflect the same or similar factors as outlined above.
The Chief Commissioner then relies upon various provisions of security contracts between Nova and Opera Bar dated 29 November 2018 and Nova and Quay Bar dated 9 December 2019. Those include, but are not limited to:

Requiring Nova to provide security services at Quay Bar and Opera Bar including ID checks, monitoring intoxication and antisocial behaviour (including drug use and property damage), and providing first aid assistance.

Nova and its guards must ‘comply with the reasonable requirements of Opera Bar and Quay Bar as advised from time to time.

Nova must use its best endeavours at all time to promote the businesses and interests of Opera Bar and Quay Bar.

Nova and its guards must comply with the client’s policies including its security guard venue policy, licence conditions and in-house security guidelines, including a plan of management for each venue, the venue’s security door policy, meet and greet.

Nova and its guards are to comply with policies such as taking the manager of the venue’s lead with respect to intoxication and where a guard finds any person in possession, selling or using illicit drugs on the premises.

The hotel manager is responsible for the security rostered hours.
The Opera Bar security management plan and Quay Bar security management plan include general duties of guards:

reporting to the supervisor manager for a day briefing at the start of each shift;

client management ensuring all reasonable requests from the client are met in a timely manner and to following instructions given by management;

venue management in performing routine duties and carrying out other duties reasonably requested by staff at the venue;

strict compliance with the client’s policies;

the general manager of the venue licensee is responsible for the guards rostering of work and timesheet approval including sending guards home on a quiet night or requesting the removal of unsuitable guards.

The Chief Commissioner submits these types of clauses support the following factors:

Firstly, that the services are closely related to the client’s ordinary business;

secondly, the services show significant regularity and continuity;

thirdly, the services are to a significant degree under the client’s direction and control, requiring Nova to follow the client’s reasonable requirements and requests and its in-house security policy;

fourthly, the services might have been supplied by employees of the client. They are regular services which do not require independence from the client, and so would otherwise naturally require direct employees.

In applying those factors and the principles in the ITM Appeal, the security contracts between Nova and its clients Opera Bar and Quay Bar are “employment agency contracts” for the purposes of s 37(1) of the PTA.

UOW Pulse Limited

The Chief Commissioner refers to UOW Pulse’s UniBar Liquor Licence which mandates compliance with a January 2016 plan of management. The plan of management requires the following in terms of security, being responsible for:
entrance procedure ensuring IDs are checked, counting numbers in/out, validating tickets and screening patrons for intoxication;
guards will be present through the venue monitoring patron behaviour and intoxication levels;
monitoring the perimeter fencing ensuring no patrons enter illegally;
increased security presence at the stage when bands are onstage to ensure patron and staff safety;
monitoring numbers inside the UniBar and Uni Hall buildings and ensure safe levels are maintained;
regular toilet checks;
a strict “no pass out” rule is applied to patrons for the duration of the event, unless due to sickness or injury.
So as to enforce these specific requirements of the plan for management, UOW Pulse needs to maintain a degree of control over its security services.
The Chief Commissioner also refers to a written security contract between UOW Pulse dated 28 June 2021 which includes the following terms:

The services are the supply of crowd control services to the client (including checking identification, assessing intoxication levels, monitoring patrons’ behaviour, and ejecting patrons if they pose a security risk).

Specifying a minimum shift level of 4 hours under the Security Services Industry Award Act with no specification of the number of guards required.

In practice, the Chief Commissioner alleges UOW Pulse emails Nova with a request for the number of guards required. I accept that the emails provide events, ticket sales and a column for guards with a number. However, I prefer and accept Mr Wall’s unchallenged evidence that it was Nova who decided how many guards were to be rostered at each event. The author of the email from UOW Pulse was also not called give evidence about the email and what it meant.
The Chief Commissioner contends that those clauses support the following findings:

firstly, the services are closely related to the client’s ordinary business;

secondly, the services show regularity and continuity;

thirdly, the services are to a significant degree under the client’s direction and control;

fourthly, the services might have been supplied by employees of the client, because they are regular services which do not require independence from the client.

In applying those factors and the principles in the ITM Appeal, the security contract between Nova and UOW Pulse is an “employment agency contract” for the purposes of s 37(1) of the PTA.
In relation to other business and security clients, the Chief Commissioner contends that Nova has not met its onus of proof in providing the terms of its contracts with those clients.

The ITM Appeal

The Chief Commissioner relies on parts of the Court of Appeal’s decision in the ITM Appeal. In that regard the Chief Commissioner contends that the Court of Appeal (consisting of Basten AJA; Ward P and Pain JA) clarified the “in and for” test and resolved several areas of uncertainty. In the ITM Appeal the relevant services provided to a number of supermarkets by subcontractors included the collecting of trolleys from car parks, external trolley bays and the surrounding streets, and returning them to the front of the supermarkets to ensure a continuous supply of trolleys during trading hours. ITM also had contracts to provide twice weekly cleaning services to two of the supermarkets. The Chief Commissioner assessed ITM to pay payroll tax in respect of payments from ITM to its subcontractors on the basis that the trolley collectors and cleaners provided services (“in and for”) the businesses of ITM’s clients.
The Chief Commissioner contends the ITM Appeal clarified three aspects of the “in and for” test.
Firstly, the scope of PTA s 37 and the general approach to be followed:

Identification of the work to be done and the nature and ordinary conduct of the client's business: ITM Appeal, [49] (Basten AJA); cf. AS [15].

The Chief Commissioner contends, the ‘employment agency contract’ is the head contract between the employment agent and its client, not the subcontract between the employment agent and the service provider which, is ‘the employment agency contract’ under assessment: ITM Appeal, [111] (Basten AJA).

Where (comprehensive) written contracts are identified, the essential task is to characterise those contracts: ITM Appeal, [61] and [111] (Basten AJA).. A focus on which clauses were or were not enforced in practice is therefore unhelpful and the "commercial context" may also be relevant: ITM Appeal, [62], [112] (Basten AJA).

Secondly, ITM Appeal clarifies the indicia of working "in and for" the client's business:

The "in and for" test seeks to identify individuals who work for the client "in much the same way as would an employee of the client. That mean[s] that the business would involve work having a degree of regularity and continuity, and where the nature of the work was to a significant degree under the control and direction of the client": ITM Appeal, [86] (Basten AJA, emphasis added).

The ways in which the client may exercise control and direction over the nature of the work include a "reasonable directions" clause and clauses requiring compliance with the client's standards, policies and procedures (at least where these contain prescriptive directions on how to perform the services): see ITM Appeal, [12], [14(6)-(7)) (Payne JA); (108] (Basten AJA).

It is also instructive to ask "whether [the client] might have conducted its business by employing workers directly, to carry out the services obtained through the [employment] agency agreement" - that is, to ask "whether such services were, or might have been, supplied by employees of the client": ITM Appeal, [88] & [90] (Basten AJA). An affirmative answer tends to support a finding that the services are "in and for" the client's business. Some services cannot properly be undertaken by employees of the client, because they require independence from the client - for example, the independent expert witness services in UNSW Global: ITM Appeal, [89] (Basten AJA).

Examining the "hypothetical circumstances of direct employment by the client" may also illustrate relevant "features of the arrangement, including the degree of control which would be exercised in each case, whether employees would be maintained on a regular and continuous basis and whether the nature of the services would be different": ITM Appeal, [91] (Basten AJA). A sufficiently "high level of similarity between the [actual and hypothetical] situations" indicates the services occur "in and for" the client's business: ITM Appeal, [91] (Basten AJA).

"[The location at which services are to be carried out may, in some contexts, be material": /TM Appeal, [74] (Basten AJA).

Other "indicia" of working "in and for" the client's business may also be relevant depending on the circumstances, but the "indicia" relevant to one case "will have little if any precedential value...in another case involving different circumstances": ITM Appeal, [40] (Basten AJA).

Thirdly, ITM Appeal clarifies that some factors are not relevant to determining the "in and for" issue, which includes:

Whether the workers are independent contractors carrying on their own businesses: ITM Appeal, [92)-[94] (Basten AJA).

The "independence" of the subcontractor's business from that of the client: ITM Appeal, [65] (Basten AJA).

The discrete or "defined nature of the task" undertaken by the workers, and the fact of "an established market for such services": ITM Appeal, [71] (Basten AJA).

The provision of equipment by the employment agent or its subcontractors, and "[the structure of s 37(1) is entirely consistent with the concept of service providers entering [as independent contractors] into subcontracts with the employment agent": see ITM Appeal, [78]-[80] (Basten AJA). Nova contends that ITM Appeal does not relate to the factual matrix of this proceeding. It says the contractors in ITM were independent contractors. In this review, Nova submits that it subcontracted to three companies and this argument does not arise. Further Nova refers to Infinity Security Group where the Tribunal found that the ownership of equipment by Infinity was a relevant factor in respect of determining the ‘in and for’ test.

The possibility of working for multiple "clients" simultaneously: ITM Appeal, [661-[67] (Basten AJA); [14(9)] (Payne JA).

Whether the workers are "integrated into" the client's business. That language is inappropriate: ITM Appeal, [98] (Basten AJA); see [3] (Ward P).

Whether the workers supplement an existing workforce (that is, whether they perform the same tasks as the client's employees), work during business hours, or assist with a core function of the client's business: ITM Appeal, [431-[44], [54] (Basten AJA).

Whether the workers wear a distinctive uniform indicating they are not the client's employees, or whether customers would perceive them as employees: ITM Appeal, [14(2)] (Payne JA); [42], [98], [110] (Basten AJA). Nova contends that Basten AJA at [42] of ITM Appeal did not find that customer perceptions were an irrelevant consideration. But rather, in that specific case in determining the ‘in and for’ question uniforms worn by trolley collectors was not a relevant factor. Nova says uniforms are relevant to the ‘in and for’ issue in this review and necessary to comply with the obligations of s 36 SIA regarding the display of security licences. Nova contends that the court in ITM Appeal did not find the reasoning in Ward CJ in E group at [333] was incorrect, namely that the wearing of a specific uniform was a relevant factor to take into consideration in determining the ‘in and for’ test.

The levels of interaction between the workers and the client's staff and customers: ITM Appeal, [14(5)] (Payne JA). Nova supports this contention.

Whether the workers sign in and out of the client's visitor book: ITM Appeal, [991 (Basten AJA); cf [14(3)] (Payne JA).

Whether the workers use the client's staff facilities: TM Appeal, [14(4)] (Payne JA); [100] (Basten AJA). Nova contends this is a minor factor which, does not change the overall position that guards were not working ‘in and for’ their clients’ business.

Who trains the workers: ITM Appeal, [14(8)] (Payne JA). Nova contends this is specific to the facts of ITM Appeal. It says that the training Nova provides is required pursuant to the SIA regulations and SLED requirements. The type of training a trolley collector may have required in ITM Appeal con be distinguished to what is required of Nova. The training relevant to this review is very technical and specific and is not able to be provided by Nova’s business clients. Nova submits this is a very relevant factor and one considered as such in Infinity Security Group at [120(8)].

Whether the employment agency contract "provides for the provision of a particular outcome or result": Bayton Cleaning Co Pty Ltd v Chief Commissioner of State Revenue (2019) 109 ATR 879, 899 [105). This point did not arise in ITM Appeal, but the Commissioner contends that it bears mention.

In summary, Basten AJA said in ITM Appeal at (54] and [113]:

(54] While the terms of the employment agency contract must, in each case, be addressed, the characterisation of cleaning and security services as otherwise than services provided in and for the conduct of the client's business is suggestive of error.
[113] What the case law may establish is, for example, that cleaning services are generally something necessarily carried out for the conduct of many businesses and will, where [otherwise] the subject of an employment agency agreement, readily be found to fall within the scope of the employment agency provisions in the Payroll Tax Act. Whether they are carried out during business hours or after hours will rarely be a relevant consideration, except to the extent that the nature of the service and the nature of the business suggest otherwise. Similarly, because trolley use, and therefore maintenance of the availability of trolleys for customers was part of Woolworths' business, the fact that trolley collection might involve work outside Woolworths premises was of no significance.

The Chief Commissioner contends that most of Nova’s work was crowd control at licenced venues requiring compliance with the Liquor Act 2007 (“Liquor Act”). He submits that where licensee usually retain security guards it is on the basis to assist the licensee complying with their statutory obligations under the Liquor Act and any conditions attached to the licence. Nova contends that nothing in the Liquor Act allows the licensee to carry our prescribed security and crowd controller activities. The ss 4 and 7 of the SIA require a person carrying out such activities to hold a master security licence. Nova also rejects that a security guard can be an ’agent’ of the venue within the meaning of s 77 of the Liquor Act. This is because it would lead to a violation of the SIA.
As it concerns the application of the SIA, the Chief Commission contends that outsourcing security activities to licensed security firms such as Nova, is neutral as to whether the security activities occur “in and for” the client’s business. Nova contends that the submission fails to reflect the specific security duties undertaken by Nova guards and the very limited direction provided by Nova’s clients over the control of security services. Nova client’s may notify guards of a security risk, but, the guards decide the manner of the response. The guards rely on their specific training to respond as required without deferring to the venue client, nor taking instructions from them. To do so would potentially offend ss 7 and 38 of the SIA.
The Chief Commissioner concludes, the "in and for" test depends on the relationship between the services and the ordinary business of the client. That relationship is very close in security services cases because the services attach to the client's premises, customers and staff, and they are a means by which the client carries out its liquor licensing obligations. It should therefore be accepted - subject to the terms of the employment agency contract, which must always be examined - that security services are ordinarily provided "in and for" the client's business.

Nova’s further submissions

The central issue is whether contracts involving the provision of security guards are employment agency contracts under s 37(1) of the PTA, which if they are, would trigger payroll tax liability.
Nova relies upon UNSW Global, where White J held that a contract is only an employment agency contract if the employment agent provides a person to work "in and for the conduct of the client's business"—meaning as part of the client's workforce.
As identified above, Nova contends that the determining factor in establishing “for” the client is whether the worker is integrated into the client's workforce (working like an employee), not merely whether their services are integral or important to the client's business. Nova submits that it is not correct to ask whether the client is able to operate its business without the services provided by the service provider. The focus of the inquiry is on the manner the service provider provides the services, and whether that manner of provision of services is indicative of the service provider being integrated into the client's workforce and working in much the same manner as the clients employees.

Nova submits that its security guards are not integrated into clients' workforces because:

They follow Nova’s instructions, not the clients’.

They remain within Nova’s command and reporting structure.

Clients do not control or direct the guards.

Nova contends that the SIA legally requires it to maintain full control over its security personnel. Therefore, security guards cannot lawfully be integrated into clients’ businesses. However, integration remains a factual issue: if, in practice, guards were taking instructions from clients, integration could still be found.
In Commissioner of State Revenue v Liquid Rock Constructions Pty Ltd (2012) 87 ATR 921, the court distinguished between employees performing duties for the client’s business, and employees performing duties for the employer, even if benefiting the client. The key test was whether the client had the practical ability to direct the worker.
Nova refers to many provisions of the SIA which it contends prohibits security guards from operating as a labour force available for hire to be added to a person’s workforce, where no security licence is held. As such, the unlicensed person does not have the ability and expertise to control, direct and supervise security guards.
Nova’s business clients do not hold master security licences and cannot and do not employ security guards, nor carry out security duties. Nova contends that it does not provide a workforce to these clients, nor can it delegate its security functions to those clients.
Nova relies upon the following factors which it contends demonstrate that Nova guards are not integrated into the clients’ workforces:

They wear uniforms with Nova branding;

they use publicly available facilities and not clients’ staff rooms;

Nova is responsible for all on site inductions training licence compliance and rostering for the guards;

Nova provides training to guards based on each venue's particular needs;

Nova prepares instruction manuals and other documentation and policies for a particular venue specifically related to the provision of security services or compliance with the SIA.

In respect of its business clients, Nova contends that it's security guards did not take directions or instructions from the venues staff. They independently determined where they had to be based upon their own risk assessments, subject to receiving directions or instructions from the supervisor. Venue staff do not get involved in making security related decisions apart from accompanying Nova guards in ejecting patrons from a particular venue.
As it relates to security clients, Nova contends that the three labour hire company companies which were used were not an employment agency contract to source labour that was on hired stop Nova submits that its contracts with the three labour hire companies required the labour hire company to pay payroll tax rather than Nova. Requiring Nova to pay payroll tax will lead to double taxation. Nova notes that the chief commissioner has the discretion to require the final agent in the chain of on higher labour arrangements to pay the payroll tax. It says that Nova received between $1.00 to $2.00 per hour margin on the labour Nova on-hired to security clients and that the payroll tax had been paid by the three companies and again double taxation should not be required.

The ITM Appeal

In its submissions in reply, Nova contends that the Chief Commissioner has cherry picked part of paragraph [54] of the ITM Appeal. When set out in its entirety, Nova contends it is clear that Baston AJ’s statement is not applicable in this review. Paragraph [54] reads:

In Securecorp, Payne J disagreed both with the description and the application of the test. Asking if the services were “incidental to” the client’s business, imposed an “impermissible gloss on the statute”. [31] To apply that test by rejecting the operation of the Act on the basis that services provided outside ordinary business hours could not qualify as services provided “in and for the business of the client” should not be accepted. It was rejected in terms by Ward CJ in Eq in Bayton. [32] While the terms of the employment agency contract must, in each case, be addressed, the characterisation of cleaning and security services as otherwise than services provided in and for the conduct of the client’s business is suggestive of error. It will be necessary to return to this case in addressing the judgment in the present matter.

In Securecorp (NSW) Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 744 Payne J said at [97]:

Before leaving this case, the Chief Commissioner submitted that, while not crucial to the present case, one aspect of the decision of Kunc J in JP Property Services is problematic. At [79]-[80] and [92], Kunc J appeared to suggest that if “incidental” services are provided outside of ordinary business hours, then they are not provided “in and for the conduct of a business”. I am unable to agree. The introduction of a requirement that services provided not be “incidental” to a client seems, with respect, to involve an impermissible gloss on the statute. An accountant providing after-hours technical support is, in my view, working in and for the conduct of the accounting firm. It is an irrelevant enquiry to ask, in addition, whether the services provided are provided outside normal trading hours. Much less is it relevant to enquire whether the services provided are “incidental” services. Nothing in s 37(1) or in White J’s construction of s 37 refers to “core” or “incidental” services and the enquiry suggested is not one that I would adopt.

Nova submits that it is evident upon consideration of the entirety of paragraph [54] of the ITM Appeal, read together with paragraph [97] of Securecorp, that Basten AJA was confirming that the fact that services are provided outside of business hours does not, ipso facto, mean that those services are not being provided 'in and for' the business. I agree with the application contended by Nova. When considering the entirety of [54] and when read in conjunction with [97], the findings by Basten AJA, in my view, are applicable to the specific issue which was being considered in the ITM Appeal, namely, services being provided outside of business hours and whether those services were provided ‘in and for’ the business. I reject the Chief Commissioner’s submission for a broader and more general application of the following part of [54] in this proceeding “While the terms of the employment agency contract must, in each case, be addressed, the characterisation of cleaning and security services as otherwise than services provided in and for the conduct of the client’s business is suggestive of error.”
Nova contends that whether a contract is an employment agency contract depends on functional integration into the client’s workforce, not the essential nature of the services provided. In this case, due to the legal and operational structure, the security guards remain under the control of the applicant and are not integrated into the clients’ businesses. Therefore, the arrangements do not constitute employment agency contracts, and no payroll tax liability arises.
Nova submits that even if some level of direction or instruction were permitted in contractual documents or practically occurred at the clients venues, it would not extend to the control over or giving of binding instructions as to security decisions of a kind required under the legislation to be made by a security licenced holder. Notice it contends that the findings in the E GroupSecurity decision should be applied in this review and that the ITM Appeal does not change that approach.
Nova contends that the Chief Commissioners submission that the provision of security services by Nova are, practically speaking, necessary for the operation of its clients businesses should be rejected As this was considered in the E Group Security and was rejected. (- see E Group at [318], [328] and [333]).

Consideration

It is settled law that an “employment agency contract”, in s 37(1) of the PTA, means a contract under which a person (the employment agent) procures the services of another person (the service provider) “in and for the conduct of the business of”, the employment agents client UNSW Global at [62]. Kunc J in J P Property Services Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 1391 at [72] and [75] considered whether the services were provided “in and for the conduct of the business of the clients”:

72 … will be determined by asking whether or not the individuals provided by the employment agents comprise, or are added to, the workforce of the client for the conduct of the client’s business. Adopting White J’s language: are the individual’s services provided to help the client conduct its business in the same way, or much the same way, as it would through an employee, or are they services which, although provided for the client’s benefit, are not provided by the service provider working in the client’s business?
…
75 I do accept the Commissioner’s submission that the application of UNSW Global does require careful attention to both the service and the business of the client to whom it is being provided. It involves fact sensitive analysis of each of the service and the business and of the connection between the two. For example, circumstances may arise where services provided to Business A will meet the description of being services provided to help it conduct its business in the same way, or much the same way, as it would through an employee. The same services provided to Business B may not meet that description, even though in broad terms Businesses A and B are the same types of business
(emphasis added)

As Ward P said in E Group Security at [318]:

…
It is well-recognised that the analysis is a fact sensitive one and much was made of the indicia identified in cases such as HRC Hotel Services when determining whether there is the requisite integration of the service providers into the relevant client’s workforce. It is not disputed (though the emphasis placed on each varies in the respective parties’ submissions) that those indicia include, as the Chief Commissioner has submitted, matters such as the location at which the services are provided by the workers; the regularity with which the workers provide the services to the client; the level of any interaction between the workers and the client’s customers on the one hand and the client’s employees on the other; the level of any direction or instruction provided by the client to the workers; the workers’ access to, and use of, client staff facilities; and the relevance or connection to the client’s business of the services provided by the workers to the client. What is not relevant in this context is whether the services performed by the workers are integral or ancillary, as the case may be, to the client’s business.

Her honour at [324] said:

Further, by way of introductory observation, while the capacity to direct or control the tasks that are performed or the manner in which they will be performed is a relevant consideration and will in some (perhaps many) cases be significant, I do not consider that this factor alone will necessarily be determinative in all cases.

When considering the interaction between possible breaches of the legislative regime, for example the arguments raised by both parties concerning the Liquor Act and SIA, her Honour in E Group Security at [325] said, which I adopt:

…
However, a contractual ability to give (or obligation to comply with) a direction would not seem to me necessarily to involve any breach of the legislation and nor would a refusal (if based on the security industry constraints) to accede to such a direction necessarily involve a breach of contract (since the contractual obligation to comply with such a direction could surely only be with a direction that was lawful – and hence, it would seem to me that there would be no contractual obligation to comply with a direction that would or might place E Group Security in breach of its security licence) (see by way of analogy the discussion as to lawful directions in a master/servant relationship in Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [35]-[36] at first instance, for example). On the one hand, if, looked at pragmatically there would be no enforceable obligation to comply with directions that might place E Group Security in breach of its security licence, then a contractual provision reserving to the client the ability to give directions takes the matter no further because it says nothing about what in practice occurs in the performance of the contract. On the other hand, the mere existence of the constraints imposed by the legislation (as E Group Security in submissions quite fairly conceded) would say nothing if those constraints were not in practice regularly observed.

In this proceeding, the Chief Commissioner contends that the court of appeal in ITM Appeal, has changed the landscape in respect of previous decisions, particularly, concerning security services. The Chief Commissioner submits, which I reject, that characterising security services as not “in and for” a client’s business “is suggestive of error” because of the findings made by Basten AJA in the ITM Appeal at [54]. ITM Appeal can be distinguished on the facts. I am persuaded by Nova’s argument that the findings made by Ward P in E Group Security have not been overturned by the court of appeal in ITM Appeal and should not be followed in the way as submitted by the Chief Commissioner. However, I accept that it is relevant to take into consideration the relevant contractual documents when considering the requirements of Nova, together with the other factors Ward P, took into consideration in E Group Security.

Nova’s business clients

In considering Nova’s business clients, in the words of Ward P in E Group at [333] “While they provide an integral function for the clients, they are not an addition in the sense of being integrated into the workforce.” I have considered the Chief Commissioner’s argument about the ITM Appeal [98] and [3] finding that the language “integrated into” the clients business is inappropriate. I reject the contention that “integrated into” is inappropriate language to adopt and apply Ward P’s comments at [3]. That is “that this was used in the sense of the question whether the workers were an addition to the work force of the employment agent’s client (i.e., whether they were performing services in and for the conduct of the client’s business) and was not intended as a substitution for or gloss on the statutory test.”
The relevant factors which demonstrate they were not sufficiently integrated into the clients business during the relevant tax years, I find:

The guards’ equipment (with some minor variations or exceptions, such as the opera bar) was the property of Nova and it provided the security services at the client’s venue. This is of course the nature of the provision of security services.

Nova was responsible for rostering its own security guards at the venue in consultation with its clients. I do not consider the client’s consultation about staffing with Nova, or where a contract required a minimum level of guards, a factor which removes the control or direction of security guards away from Nova. Each of Nova’s business clients’ witnesses who gave evidence, which I accept, leads to the conclusion that, at least in a practical sense, Nova was responsible for the routine and regular rostering of security guards and services. This is despite in some circumstances where the agreement between Nova and its business clients’ prescribed the number of guards (for example Opera Bar). Nova retained the discretion to provide the relevant number of guards at the venue in accordance with specialised training and statutory obligations (where relevant under the SIA), and to ensure compliance with the Liquor Act.

In general, and mostly, Nova guards wore distinguishable security uniforms, at times branded with the company’s information, and, always with the facility to display the guards security licence as required by the SIA. I reject the Chief Commissioners submission that the ITM Appeal decision is proposition for uniform’s should not be a factor to take into consideration in determining the “in and for test”, particularly with regard to security services. This is because the ITM Appeal was specific to trolley collectors and can be distinguished on its facts. I prefer and apply the reasoning of Ward CJ in E Group Security at [333].

I accept that Nova guards had interaction from time to time with guests at the venues. This would usually be general information or where the guards were carrying out their security duties such as, ID checks, questions concerning intoxication of guests, crowd control and the like. These interactions were necessary for the guards to carry out their security duties and comply with regulatory requirements. Similarly, I have considered an applied Ward P reasoning in E Group Security at [325] and [326].

Guards had either no, or very little, access to staff facilities at the various venues. They were required to use public toilets and received no free food or beverages at the venues. While a discount was offered, the evidence establishes that that discounts was less than what was offered to venue staff.

I find that the clients did not have control over the guards in the performance of their security duties. I accept and find that the clients did have some input into the scope of services to be provided and the Standard Operating Procedures document. This included input into the security management plan. The security guards were trained by Nova, rostered on by Nova, took their instructions from and were supervised by either their Nova supervisor or Nova head office. I have considered the various three agreements between Nova and Quay Bar, Nova and Opera Bar and Nova and UOW Pulse Ltd. While a number of clauses in the written agreements do provide that the guards while on-site included (report to the manager/licensee to obtain a briefing, to fill in a time sheet initialled by the licensee/manager, be suitably dressed, wear a uniform (not venue branded) prevent and remove intoxicated customers from the venue, monitor patrons behaviour, act under the client’s instruction and collect rubbish and glass), the evidence was clear that, generally Nova did not. It has been established that business clients staff do and have made requests of the guards about the removal of customers from a venue. However, I accept Nova’s submission despite there being some degree of direction about how customers are managed, it remained in the absolute discretion of the security guards to decide how a customer was to be managed and evicted from venue premises so as to ensure compliance with the SIA (and the Liquor Act). Each of the business clients gave consistent evidence in this regard, and I have accepted that evidence. In making this finding I have also considered and applied the reasoning of Ward P in E Group Security at [326]: “Furthermore, let it be assumed that client participation in determining the parameters of an SOP (whether by way of suggestion or request) did occur from time to time (or can be said to have occurred by way of the setting or monitoring of performance to stipulated KPIs), I do not accept that this would necessarily amount to sufficient control or direction to warrant a conclusion that the security guards were integrated into the clients’ workforce. There seems no doubt at a practical level that E Group Security personnel were required to perform their tasks at the client’s premises subject to the direction and instruction of their E Group Security supervisors. In that regard, I accept the evidence of those responsible for supervision of the security operations at various of the clients’ sites to the effect that, on the ground so to speak, the security guards were directed to comply with E Group Security’s instructions and to report back to E Group Security. Responding to a request from a client (or answering a query from a customer of the client) does not change that.”. Even after reviewing the provisions in the various agreements, I find that the ITM Appeal has not overturned this reasoning.

While Nova’s guards do protect the clients assets and customers, they are providing security services which are complimentary, and, independent of the client’s business, particularly in circumstances where the guards are required licenced under the SIA and to ensure compliance with the clients regulatory obligations under the Liquor Act in some circumstances (for example when the client does not hold a master security license). In similar circumstances, police arresting a person accused of destruction of property or an assault of a patron, is not a service closely related to the clients ordinary business. Like a security guard, the service is provided independently and subject to legislative regime (LEPRA).

While some of the duties of a security guard and employee of the client may overlap, the predominate duty of the security guard is the provision of security services which is heavily regulated by the SIA and cannot be said to be in the client’s control. As Ward P said in E Group Security at [323], the “in and for” test “requires an analysis as to whether the workers in question were integrated into the client’s business (or added in effect to its workforce), not whether the workers or the provision of their services were integral or essential (as opposed to ancillary) to the client’s business or workforce; …”

I find that the function of the guards was to carry out security services. The services were integral to the client’s business but the guards were not integrated into the that business. This is so, even after reviewing the relevant agreements between Nova and its business clients.

Each venues requirement for regularity of security services varied. Some venues did have the same guards and required a similar number each week, such as the Opera bar. However, some did not and the requirement varied. Where Nova would at times put guards at the same venue for continuity, this was not the same for each venue.

I adopt and apply Senior Member Dunn’s analysis of the SIA at [120(7)]:

Under the Security Industry Act individuals carrying out security activities must be employed by the holder of a Master Licence (or be self-employed and be the holder of a Master Licence). While there was no evidence that the guards in fact satisfied those criteria, it was not in dispute that Infinity’s clients did not hold Master Licences and their staff were not trained or licensed to provide security services. While the exemption under the Security Industry Regulation allowed licensed venues to retain the ability to perform activities related to excluding persons from licensed premises, I agree that as, a matter of law, the security guards could not actually have been added to the clients’ workforces. However, (while I do not accept the Respondent’s construction of s 10(3) of the Security Industry Act) I agree with the Respondent that that does not determine the question as to whether as a matter of fact the guards were added to the workforce of the clients for the conduct of their businesses.

Balancing all of the factors, while I have found Nova was performing integral services to its business clients, I find the guards were not integrated into the clients’ businesses nor effectively added to their workforces. After reviewing the detail in each of the three agreements between Nova and its business clients, I find that Nova was not providing services “in and for” the conduct of the clients’ businesses. I find that the arrangements between Nova and its business clients were not employment agency contracts within s 37 of the PTA.

Double tax issue

I have already found that the Chief Commissioner has established that the three subcontractors have not paid payroll tax pursuant to s 41 of the PTA.
The Chief Commissioner contends that Nova is liable to pay payroll tax in circumstances where the three subcontractors have not. Nova relies upon to avoid what it says would be double taxation. Section 41 provides:

Subject to section 42, if an employment agent under an employment agency contract--
(a) by arrangement procures the services of a service provider for a client of the employment agent, and
(b) pays payroll tax in respect of an amount, benefit or payment that is, under section 40, taken to be wages paid or payable by the employment agent in respect of the provision of those services in connection with that contract,
no other person (including any other person engaged to procure the services of the service provider for the employment agent's client as part of the arrangement) is liable to pay payroll tax in respect of wages paid or payable for the procurement or performance of those services by the service provider for the client.

I am not satisfied that Nova has established that the three subcontractors have paid payroll tax. Accordingly, I find Nova’s reliance upon s 41 is of no avail.

Remission of Penalties and Interest

Given my findings on the principal issue “in and for” the business of, and where I have found Nova agreements not employment agency contracts within s 37 of the PTA, this issue does not arise.

Orders

The Assessment be remitted to the Chief Commissioner of State Revenue for determination in accordance with these Reasons for Decision.

**********

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: 03 June 2025

Medium Neutral Citation:	Nova Security Group Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCATAD 124
Hearing dates:	5 September 2024
Date of orders:	03 June 2025
Decision date:	03 June 2025
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	C Mulvey, Senior Member
Decision:	The Assessment be remitted to the Chief Commissioner of State Revenue for determination in accordance with these Reasons for Decision.
Catchwords:	TAXES AND DUTIES – payroll tax – employment agency contracts - whether services were provided in and for the conduct of the clients’ businesses
Legislation Cited:	Liquor Act 2007 Payroll Tax Act 2007 (NSW) Security Industry Act 1997 (NSW) Taxation Administration Act 1996 (NSW)
Cases Cited:	Chief Commissioner of State Revenue E Group Security Pty Limited (2022) 109 NSWLR 123 Chief Commissioner of State Revenue v Integrated Trolley Management Pty Ltd [2023] NSWCA 302 Commissioner of State Revenue v Liquid Rock Constructions Pty Ltd (2012) 87 ATR 921 E Group Security Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1190 HRC Hotel Services Pty limited v The Chief Commissioner of State Revenue (2018) 108 ATR 84 Infinity Security Group Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCATAD 28 J P Property Services Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 1391 Southern Cross Group Services Pty Limited v Chief Commissioner of State Revenue (2019) 108 ATR 16 UNSW Global Pty Ltd v Chief Commissioner of State Revenue (2016) 104 ATR 577
Texts Cited:	None cited
Category:	Principal judgment
Parties:	Nova Security Pty Ltd (Applicant) Chief Commissioner of State Revenue (Respondent)
Representation:	Counsel: D Stretton (Respondent) Solicitors: Gupta & Co (Applicant) Crown Solicitor(Respondent)
File Number(s):	2024/00095909
Publication restriction:	None