Paul Murphy Pty Ltd v Chief Commissioner of State Revenue

[2009] NSWADTAP 71

Appeal Panel - Internal

CITATION:	Paul Murphy Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADTAP 71
PARTIES:	APPELLANT Paul Murphy Real Estate Pty Ltd RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	099029
HEARING DATES:	30 September 2009
SUBMISSIONS CLOSED:	30 September 2009
DATE OF DECISION:	4 December 2009
BEFORE:	Callaghan P, SC, Deputy President; Hole M - Judicial Member; Bennett C - Non-Judicial Member
CATCHWORDS:	Review application – appeal – issue not prosecuted below
DECISION UNDER APPEAL:	Paul Murphy Pty Ltd & Anor v Chief Commissioner of State Revenue [2009] NSWADT 105
FILE NUMBER UNDER APPEAL:	086026
DATE OF DECISION UNDER APPEAL:	05/13/2009
LEGISLATION CITED:	Pay-roll Tax Act 1971
CASES CITED:	AON Risk Services Australia Ltd v Australian National University [2009] HCA 27 Chief Commission of State Revenue v Sacco [2008] NSWADTAP 61 Comcare v Fiedler (2001) 115 FCR 328 Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409 Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 54 FLR 334 Peacock v Repatriation Commission (2007) 161 FCR 256 Perpetual Trustee Company (Canberra) Ltd v Commissioner for ACT Revenue (1994) 50 FLR 465 Repatration Commission v Warren (2008) 167 FCR 511 Shi v Migration Agents Registration Authority (2008) 235 CLR 286
REPRESENTATION:	APPLICANT J Hyde Page, solicitor RESPONDENT A Rider, counsel
ORDERS:	The first ground of appeal is struck out

REASONS FOR DECISION

1 As the hearing of this appeal developed on 30 September 2009 the Appeal Panel came to reserve its decision on the course to be followed in relation to the question of law specified in the Notice of Appeal as filed, namely, “whether the Commissioner had discretion under s16B of the Pay-roll Tax Act 1971 to exclude one or both of the Applicants from a pay-roll tax ‘group’” (“the s16C issue”). There was added to the Notice of Appeal earlier that day, without objection, a second question of law “whether s42 of the Pay-roll Tax Act 1971 excludes the operation of the grouping provision in this particular case” (“the s42 issue”). The hearing of the Appeal was otherwise adjourned pending the delivery of this decision.

2 There were three separate decisions by the Respondent which were the subject of the review application: dated 12 March 2007 – “the grouping decision”; dated 30 April 2007 – “the motor vehicle decision”; and dated 13 October 2007 – “the de-grouping decision”. Those decisions are included at Tabs 3, 8 and 12 respectively in the s58 documents lodged with the Tribunal. The motor vehicle decision included adjustments in respect of the grouping decision and a presently irrelevant superannuation adjustment, as well as the disallowance of the motor vehicle allowance claimed.

3 The Tribunal decision under appeal was made on a review application by the Appellant and The Belmore Maitland Pty Ltd. It included a ruling on a point relating to a deed bearing date 27 January 2009 and no issue as to that point is raised in the appeal. The s42 issue was dealt with in the decision under appeal and with the amendment of the Notice of Appeal to specify this having now been made, the appeal on that point is in order and will ultimately proceed. The s16C issue was not dealt with in the decision.

4 At the hearing below, concessions were made by both the Applicants and the Respondent. These are noted in the decision under appeal at pars 5 and 6, with the issues left to be decided being noted in par.7:

“5 When the matter came up for hearing, the respondent conceded that the motor vehicle allowances paid during the relevant period were exempt in accordance with s10B of the Act. It was further conceded by the respondent that the only period during which the respondent could group the applicants was for the period 7 January 2005 to 30 June 2007. The latter concession was made in view of changes to the Act that came into effect from 1 July 2007. Section 79 of the Act from 1 July 2007 allows the respondent to de-group businesses where substantial independence of those two businesses can be established. The respondent also exercised his discretion to de-group the applicants up to and inclusive of 6 January 2005.

6 The applicants’ representative also conceded that unless the applicants succeeded on the ground that s42 of the Act prevented the grouping of trustees or on the ground that the changes to the beneficiaries as a result of the Deed entered into on 27 January 2009 did not allow the applicants to be grouped under s106I, the respondent was entitled to group the applicants and refuse to de-group them in respect of the relevant period.

7 In view of the concessions made by the parties, the only two issues for determination were:
(a) Whether, given the provisions of s42 of the Act, the grouping provisions found in s106I of the TA Act apply to trustees who carry on business in their capacity as trustees and which are trustees of businesses in which wages are paid?
(b) Whether the deed executed on 27 of January 2009 had its intended effect of removing certain beneficiaries of the Trust retrospectively?”

5 The presently relevant concession by the Applicants was made during the course of the hearing orally by the solicitor then appearing for the Applicants, apparently also in written submissions put in by the solicitor and again in subsequent written submissions prepared on the Applicants’ behalf by Counsel. It seems clear that this concession was to the effect that in the period 7 January 2005 to 30 June 2007 the Commissioner was precluded from de-grouping the two businesses.

6 Because of that concession and the consequent non-prosecution of any issue concerning it, no decision was sought from, or made by, the Tribunal on the de-grouping decision. Nevertheless, it is a question of law in relation to the de-grouping decision to which the first question of law specified as the s16C issue in the Notice of Appeal relates.

7 At the hearing on 30 September 2009 Mr A. Rider of Counsel maintained a preliminary objection expressed in conclusion in written submissions from the Respondent thus:

“In summary, the Appeal Panel should dismiss the s.16C issue as misconceived or lacking in substance, as neither the Tribunal nor the Appeal Panel is empowered to review the Degrouping Decision.”

Ultimately, Mr Hyde Page, the solicitor for the Appellant (who did not appear below), accepted that if the first question of law were appropriate to be decided it would require, as Mr Rider submitted, determination of issues of fact, particularly those set out in an Appendix to the Respondent’s Written Submissions and that consequently, and for that reason alone, the matter would have to be remitted by this Appeal Panel to the (or another) Judicial Member for determination. That Appendix refers to matters relevant to the controlling interests in respect of the Appellant and The Belmore Maitland Pty Ltd.

8 The Appellant’s principal contentions in response to the preliminary objection are to the effect that the concession concerning the s16C issue was in respect of a matter of law; that the Judicial Member should in any event have dealt with it notwithstanding the concession; and that while, not having been argued below or referred to in the decision, it is still an available question of law on appeal.

9 To ground his submissions, Mr Hyde Page relies principally on authorities going back to the oft-cited (e.g. Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at [35], [98] and [141]) aspect of Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409 at 419 where Bowen CJ and Deane J said in respect of Tribunals such as ours sitting on external reviews:

“The question for the determination of the Tribunal is not whether the decision which the decision maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.”

10 The function there described is explicitly stipulated for this Tribunal in s63(1) of the Administrative Decisions Tribunal Act 1997 (“the ADT Act”) :

“In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:
(a) any relevant factual material,
(b) any applicable written or unwritten law.”

11 In development of his submissions, Mr Hyde Page has referred to paragraphs in Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 54 FLR 334, Perpetual Trustee Company (Canberra) Ltd v Commissioner for ACT Revenue (1994) 50 FCR 405 and Peacock v Repatriation Commission (2007) 161 FCR 256. We will deal with those decisions in reverse order.

12 As to Peacock, Mr Hyde Page’s written submissions quote three sentences within [23] of that decision. We repeat them with additional sentences preceding them and succeeding them in that paragraph:

“When Mr Peacock applied to the Tribunal to review the decision of the Veterans’ Review Board, the Commission’s decision, as affirmed by the Board, was removed to the Tribunal for reconsideration on its merits. When the matter was remitted to the Tribunal for further consideration, it was the matter remitted which the Tribunal had to reconsider. The parties had no power to extend the role of the Tribunal, as they might have done if the subject was litigation in a court, where the parties ultimately decide what the issues are. This is so even though the parties might have been able, in practical terms, to narrow the issues by concession. Nevertheless, even a concession does not permit the Tribunal to avoid its duty as an administrative decision-maker to make the correct or preferable decision (Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419) on all relevant aspects of the matter before it. It does, however, permit the decision-maker to reach the correct or preferable decision by reference to the concession as well as to its findings on disputed questions (see Comcare v Fiedler (2001) 115 FCR 328 at 337-338). …”

13 There are also quoted by Mr Hyde Page from [22] in Peacock the opening five sentences thereof and we set that full paragraph out:

“We do not, however, accept that the applicant should be deprived of the opportunity to prosecute the appeal because the point raised was not agitated below. It is unusual for a party who presents evidence on an issue to successfully argue on appeal that the Tribunal should not have addressed that issue. Such a result may be especially unlikely in litigation. However, proceedings before the Tribunal are not litigation. The Tribunal is an administrative decision-maker. It exercises administrative power, not judicial power. It is not open to a party before the Tribunal to present an issue for determination which is otherwise not before the Tribunal. If the remittal excluded consideration of s24(1)(c), the parties had no power to include it. Even though parties may induce the Tribunal to accept that a matter not remitted is actually before it, such conduct cannot alter the fact that it is not.”

14 Peacock was a decision on appeal to the Federal Court of Australia from an Administrative Appeals Tribunal decision in respect of a claim under the Veterans’ Entitlement Act 1986. The appeal was referred to a Full Court. The Tribunal decision had been made in respect of matters which a single Judge of the Federal Court had, following an earlier appeal, remitted to the Tribunal for further consideration in accordance with law. The earlier appeal had dealt with an issue relating s24(1)(c) of the Veterans’ Entitlement Act and in the Tribunal hearing which was the subject of that appeal it was conceded by the applicant that there was no issue concerning s24(1)(b), which concession the Tribunal said had been properly made. In the remitted hearing an issue concerning s24(1)(b) was also dealt with by the Tribunal which found against the applicant on both s24(1)(b) and s24(1)(c). On the appeal referred to the Full Court the applicant contended that the Tribunal in reconsidering the matter erred in law by addressing s24(1)(b). The Full Court held that the remittal by the Federal Court to the Tribunal had been unqualified and that in the absence of some express qualification or limitation, it was for the Tribunal rehearing the matter to determine all questions of fact and law relevant to the applicant’s claim, including any s24(1)(b) issue.

15 As to Peacock the Appellant submits first, that “…the effect of a concession on the jurisdiction and the responsibilities of an administrative tribunal is negligible” and “where a tribunal retains power to re-make a decision, it is obvious that its jurisdiction over that matter is intact”; and secondly that, while it may be the situation in a court proceeding “that a party cannot raise an appeal if the point has been expressly conceded at first instance”, that is not the case before an administrative Tribunal such as this.

16 An appropriate context for appraisal of those arguments appears, we think, in Comcare v Fiedler (2001) 115 FCR 328 at 336-338 (cited in Peacock at [23]). There the Full Court of the Federal Court in dismissing an appeal from the Administrative Appeal Tribunal dealt with (among others) a ground of appeal to the effect that before the Tribunal could reach a conclusion in favour of a compensation claimant, it was necessary that it make an express finding on whether the claimant has satisfied the criterion set out in a particular section in the Safety, Rehabilitation and Compensation Act 1988. The Court considered the Drake, Kuswardana and Canberra Perpetual Trustee cases referred to by the Appellant here, as noted above.

17 In referring to Drake the Court said at [34]:

“It is true that the Tribunal’s function is administrative, not judicial, that it must review the merits of the claimant’s claim, not just the determination of the primary decision-maker.”

18 The Court in [36] prefaced its consideration of Kuswardana by noting that:

“the Tribunal is not obliged in every case to make a finding on every matter upon which the original decision-maker was bound to form a view”.

concerned a deportation order under the Migration Act 1958 and the Tribunal hearing was conducted on common ground that the applicant was an immigrant. Nevertheless, there was material placed before the Tribunal (Comcare v Fiedler at [37]) as noted by Fox J at 348:

“suggesting that the applicant (had) at, or before, the relevant time become a member of the Australian community.”

In his judgment in the Court’s unanimous overturning of the Tribunal’s decision, Bowen CJ (Comcare v Fiedler at [36]) said at 343:

“The case before this Court is not merely one of parties agreeing upon what facts should be decided by the trier of fact, nor a case of facts, peculiarly within the knowledge of the party, being conceded. Rather, there was a clear statutory precondition upon which the Tribunal had to be satisfied and enough material and evidence before it to raise the issue independently of the parties’ submissions. In these circumstances it was an error of law not to consider and decide the issue of immigrant status.”

19 The Canberra Perpetual Trustee Case was explained in Comcare v Fiedler at [38] by reference to a passage in the judgment of Wilcox J at 418-419:

“However, I agree with Davies J that the procedure adopted in this case by the Administrative Appeals Tribunal was unsatisfactory. The Tribunal agreed to determine the critical question in the case on the basis of the statement of agreed facts that was patently inadequate. If we were concerned with a decision of the Court, made on the basis of issues framed by the parties’ pleadings, there would be much force in an argument that, the case having been fought on those issues, the unsuccessful party should not be allowed a second chance. However, we are not concerned with such a decision, but with the decision of a body whose function was ‘to review the administrative decision that is under attack before it’. Those words were used by Bowen CJ and Deane J in Drake at 419 in relation to the Commonwealth Administrative Appeals Tribunal, but they apply equally to its Australian Capital Territory counterpart. The statutory function of the Tribunal requires that it form its own view about the matter in issue. In approaching that task, it is legitimate for the Tribunal to be guided by the parties as to the salient issues and to accept relevant admissions of fact, but the Tribunal should never permit parties to place it in the position of deciding a case on an artificial or inadequate factual basis.”

20 The coverage recounted above in Comcare v Fiedler of the cases relied on by the Appellants makes it unnecessary, in our view, for us to express at this stage further analysis of them individually. What we think emerges from an application of that material and from Peacock as discussed by us above, to this aspect of the appeal before us, is that:

(a) There was not a situation in respect of the s16C issue before the Tribunal below wherein there was “a clear statutory precondition upon which the Tribunal had to be satisfied” and “enough material and evidence before it to raise the issue independently of the parties’ submissions” in the language of Bowen CJ in Kuswardana.

(b) Nor was there a situation of a “statement of agreed facts that was patently inadequate” in the language of Wilcox J in the Canberra Permanent Trustee case.

(c) It was, again in the language of Wilcox J in Canberra Perpetual Trustee, a situation where it was “legitimate for the Tribunal to be guided by the parties as to the salient issues…”

(d) It was, in the language of the Court’s judgment in Peacock a situation where parties “(had) been able, in practical terms, to narrow the issues by concession”.

(e) It was the reverse of the situation in Peacock where it had been alleged that “the parties had no power to extend the role of this Tribunal” to an allegedly non-remitted issue.

21 We would make the following comments with respect of provisions in the ADT Act:

(a) As the hearing below developed, and concessions were made, the de-grouping ceased to be a decision subject to review and any factual material relating to it was no longer “relevant” and any law relating to it was no longer “applicable” in terms of s63(1) which we have quoted above. The Judicial Member’s consideration of material and law was confined by the way the legal practitioners explicitly selected the relevant issues and presented their respective cases at the hearing.

(b) The Appellant also submits there was no explicit or complete withdrawal of the application to review the de-grouping decision, under s73(5)(g) and therefore the Tribunal could not dismiss the application under that provision. It seems to us that the Judicial Member did not purport to act under that provision, but rather that the Applicants did not press any application for review of the de-grouping decision and the Judicial Member did not review the de-grouping decision.

(c) At this stage, the appeal lies from the review decision below “on any question of law” (s113(2)). The Judicial Member dealt with the issues and the parties by agreement confined their respective cases and presented evidence and submissions accordingly. The s16C issue was not included in those issues and was not dealt with by the parties (except in relation to relevant concession) or in the decision. The s16C issue was not an issue or question below and we do not see that it can be a question of law on appeal. It does not arise in respect of the decision below.

22 Our conclusion, therefore, is that the s16C issue is not a question of law which may arise in this appeal.

23 We see that conclusion as arising as a matter of law, rather than discretion. To the extent, if any, that it involves discretion, our decision is that the Appellant should not be permitted to raise the s16C issue as a question of law in this appeal. We say that by reason of the following matters in particular (and because of the full consideration we have already set out above, we express these matters at the outset and in somewhat short form):

(a) The issue arises in respect of a matter which was explicitly withdrawn below by the Appellant’s legal representatives.
(b) The issue does not arise as some adjunct to, otherwise relate to, a point decided below, bur rather, it is a discrete issue (properly) not dealt with below.
(c) It would require, as the Appellant has conceded here, factual investigation and evidence and thus remission to the (or some other) Judicial Member.
(d) Dealing with it now would transgress ideals of finality, timeliness and cost effectiveness in respect of proceedings in this Tribunal.

We will now develop the considerations which we have undertaken in respect of these matters.

24 Numerous cases are cited and/or quoted in part in the written submissions concerning any discretion involved. We have considered all those but we feel that it is necessary to deal here with only a couple of them.

25 Not surprisingly, the Respondent refers to cases such as Coulton v Holcombe (1986) 162 CLR 1 to support its contention that “…it is a fundamental principle of litigation that a party cannot raise an issue on appeal which it chose to abandon at first instance”. In Coulton v Holcombe at 7, Gibbs CJ, Wilson, Brennan and Dawson JJ said:

“It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.”

The Respondent also referred to Chief Commissioner of State Revenue v Sacco [2008] NSWADTAP 61 at [15] where it was pointed out that “the Appeal Panel does not exist to be a second trial court”.

26 Not surprisingly also, the Appellant points to differences between the Courts and this Tribunal, particularly in its review jurisdiction. In doing so it quotes the concluding part of [78] in Repatriation Commission v Warren (2008) 167 FCR 511. The concluding part of that paragraph deals with situations where the Federal Court on appeal from the Administrative Appeals Tribunal will more readily permit a matter to be raised for the first time in that Court. The earlier parts of the paragraph bear on matters of relevant principles and authorities some of which we have sought to deal with above and they, with respect, complement what we have said. We therefore quote the full paragraph:

“The following principles, which we take to be established, must be understood against the background that the tribunal under consideration, like the Tribunal here, is required it ‘review’ a primary decision, is given all the powers and discretions that were conferred on the original decision-maker, is not bound by the rules of evidence, is required to proceed with little formality and technicality, and is, of course, bound to apply the provisions of the relevant statute, even if there is no challenge by the parties:

- The general rule that a litigant is bound by, and accordingly is entitled to act on, admissions and concessions does not automatically apply, although cases concerned with the exercise of judicial power may be of assistance (Kuswardana 54 FLR at 342; 35 ALR at 194 per Bowen CJ).
- A party to the proceeding is not necessarily precluded from arguing on ‘appeal’ matters that were conceded before the tribunal. Whether the party is so precluded depends on the nature of the matter conceded, its conduct of its case, whether the concession represented an agreement by the parties as to the facts to be decided and other relevant circumstances (Kuswardana 54 FLR at 343; 35 ALR at 195 per Bowen CJ and at 348; 199 per Fox J).
- Where a concession is made, there must be some difficulty in finding an ‘error of law’ when the contrary of the concession is raised for the first time in this Court (Federal Commissioner of Taxation v Raptis (1989) 20 ATR 1262 at 1267 per Gummow J).
- A tribunal does not err in law in failing to regard as material a fact which counsel failed in submissions to contend was material (Federal Commissioner of Taxation v Perkins (1993) 26 ATR 8 at 10 per Davies J).
- There is a difference between factual matters to canvassed before the tribunal and a new issue relating to the validity of a regulation (Tefonu Pty Ltd v Insurance and Superannuation Commissioner (1993) 44 FCR 361 at 367 per Beazley J).
- Even though the parties may be ‘able, in practical terms, to narrow the issues by concession … even a concession does not permit the [t]ribunal to avoid its duty as an administrative decision-maker to make the correct or preferable decision … on all relevant aspects of the matter before it’ (Peacock v Repatriation Commission (2007) 161 FCR 256 at [23]);
- A concession ‘does, however, permit the decision-maker to reach the correct or preferable decision by reference to the concession as well as to its findings on disputed questions’ (Peacock 161 FCR 256 at [23]; and see Comcare v Fiedler (2001) 115 FCR 328 at 337-338).
- The Court will more readily permit a matter to be raised for the first time in this Court on an appeal from a tribunal where:
(a) the matter is a pure question of law, such as a question as to the validity of a regulation (Kuswardana 54 FLR at 343; 35 ALR at 195; Tefonu 44 FCR at 367) or a question as to whether the tribunal had applied the correct standard of proof on the true construction and application of legislation (Ferriday 69 FCR at 527-528 per Lee J);
(b) the matter goes to a misapprehension that was shared by the parties before the tribunal and therefore by the tribunal itself (Perpetual Trustee Company (Canberra) Ltd v Commissioner for Revenue (ACT) (1994) 50 FCR 405 at 418-419 per Wilcox J) such as a shared misapprehension as to the applicable law (cf Thomas 50 FCR at 120 per Beazley J); or
(c) the matter goes to a condition precedent to the availability of a power, the exercise of which will have a serious impact on the individual (Kuswardana 54 FLR 334; 35 ALR 186).

We need not comment further on the early parts of the paragraph. As to the last part (the last dot point) we doubt that any of the three lettered sub-paragraphs is met here: (a) is not, because matters of fact are also included; as to (b) there does not seem to have been “a misapprehension shared by the parties before the tribunal and therefore by the tribunal itself” and, in particular, no evidence has been tendered as to what misapprehension there may have been; and “serious impact on the individual” seems not to be involved as referred to in (c) – in Kuswardana which is referred to in (c), what was involved was the deportation order of a person.

27 To those cases we would add a reference to AON Risk Services Australia Ltd v Australian National University [2009] HCA 27 where the High Court revisited the possible tension between case management principles in litigation involving considerations such as finality, timeliness and cost effectiveness and the objective of doing justice between the parties according to law. We bear in mind those sorts of matters as considered in AON and we note also the indication in [103] of the decision that:

“Generally speaking, when a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for.”

28 By way of explanation, Mr Hyde Page relies on matters which the applicants asserted in submissions below in support of a claim for costs, basically to the effect that the determination had given inadequate reasons and then, inadequate particulars, until the respondent lodged certain submissions below on 4 December 2008. To that end also Mr Hyde Page belatedly (on 28 October 2009) tendered a bundle of correspondence between 13 October 2007 and 19 August 2008 involving the Respondent, the Accountants for the applicants below, the Crown Solicitor’s Office and the applicants’ (then) Solicitors. The Respondent objected to the tender of that correspondence principally on the ground of relevance. We have decided that we should accept the tender on the basis that the material may go to any discretion which we may have in respect of the s16C issue. Nevertheless, our consideration of this material as leads us to the assessment that it does really no more than confirm that the degrouping decision was under consideration by the parties until its withdrawal in the proceedings below. Clearly enough, views on the law as to the s16C issue must now be held by Mr Hyde Page which differ from those held by the Appellant’s previous legal advisers but nothing has been put before us suggesting that those legal advisers did not at all relevant times properly hold and implement their views.

29 For these reasons we have concluded that the first ground of appeal, constituting the s16C issue, is not properly brought in this appeal and (if there be, contrary to our opinion, power to do so) we should not permit it to be brought in this appeal. The first ground of appeal should be struck out, and we so order.

30 The appeal should now be relisted before us by the Registrar so that we may deal with the second ground of appeal.