QE Family Pty Ltd ACN 138 123 154 v Australian Taxation Office (Appeal)

[2022] ACAT 63

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

QE FAMILY PTY LTD ACN 138 123 154 v AUSTRALIAN TAXATION OFFICE (Appeal) [2022] ACAT 63

AA 17/2021 (XD 1193/2020)

Catchwords:               APPEAL – civil dispute – appeal from a decision that the Tribunal does not have jurisdiction to review a decision of the Commissioner of Taxation (Cth) to impose a luxury car tax under Commonwealth legislation – absence of power for the Tribunal to review a decision made under a law of the Commonwealth – absence of power for the Tribunal otherwise to hear and determine the claim where the claim is not a civil dispute application – appeal dismissed

Legislation cited:        A New Tax System (Luxury Car Tax) Act 1999 (Cth) s 25-1

ACT Civil and Administrative Tribunal Act 2008 ss 9, 16, 17, 22

Appeal Tribunal:       Presidential Member G McCarthy

Date of Orders:  08 July 2022

Date of Reasons for Decision:      08 July 2022

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          AA 17/2021

BETWEEN:

QE FAMILY PTY LTD ACN 138 123 154
Appellant

AND:

AUSTRALIAN TAXATION OFFICE
Respondent

APPEAL TRIBUNAL:        Presidential Member G McCarthy

DATE:08 July 2022

ORDER

The Tribunal orders that:

1. The application for appeal is dismissed.

………………………………..

Presidential Member G McCarthy

REASONS FOR DECISION

1. In 2018, the appellant bought a Mercedes-Benz V class V250 vehicle (the Vehicle) for a total purchase price of $97,609. Included in the purchase price was a luxury car tax of $4,443.

2. Dr Michael Quach, as the secretary, sole director and sole shareholder of the appellant, owns and controls the appellant. In 2019, the appellant, via Dr Quach, applied to the Commonwealth Commissioner of Taxation (the Commissioner) for a private ruling that the luxury car tax was not payable. The Commissioner issued a private ruling that it was.

3. On 16 August 2019, the appellant lodged an objection with the Commissioner to the private ruling. On 28 November 2019, the Commissioner made a decision not to allow the objection and provided the appellant with reasons for his decision.

4. In summary, the Commissioner decided that the Vehicle met the definition of a luxury car. The Commissioner also decided that the Vehicle did not meet the definition of a commercial vehicle for the purposes of section 25-1 of the A New Tax System (Luxury Car Tax) Act 1999 (the LCT Act) and so was not an exempt vehicle under the LCT Act.

5. The Commissioner’s written decision dated 28 November 2019 notes that the appellant had a right of review to the Administrative Appeals Tribunal (Cth) (the AAT) or the Federal Court of Australia, exercisable within 60 days of the date when the decision was made.

6. By application dated 15 October 2020, the appellant applied to this Tribunal for an order that the Australian Taxation Office (the ATO) refund the luxury car tax ($4,443) on the grounds that the Vehicle “is not subject to the luxury car tax”. In its application, Dr Quach stated that the application was brought under an “authorising law” and identified section 25-1 of the LCT Act as the authorising law.

7. At a directions hearing on 24 February 2021, the Commissioner objected to the application on the grounds the Tribunal did not have jurisdiction to hear it. The Commissioner relied on section 9 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act) which states:

   A person may apply to the tribunal if an authorising law provides that the application may be made.

8. An ‘authorising law’ is defined in the Dictionary to the ACAT Act to mean:

   authorising law means—

   (a)a territory law that provides that an application may be made to the tribunal; and

   (b)for a civil dispute—includes this Act.

9. The Commissioner pointed out that section 25-1 of the LCT Act is not a territory law.

10. At the original hearing, Dr Quach did not contend that the appellant’s claim is a civil dispute application, as defined in section 16 of the ACAT Act. Notwithstanding the form of his application, Dr Quach clarified that he was seeking administrative review of the Commissioner’s decision.[1] Following an exchange between the original tribunal and the officers who attended the hearing on behalf of the Commissioner, Dr Quach said to the tribunal member: “[I]f you choose not to hear it, then that’s fine, … I’ll head off to the Administrative Appeals Tribunal”.[2]

    [1] Transcript of proceedings, 24 February 2021, page 20, lines 20 - 28

    [2] Transcript of proceedings, 24 February 2021, page 23, line 25 and page 24, lines 9-10

11. The Original Tribunal dismissed the application on the grounds that the application was for review of an administrative decision, namely the Commissioner’s decision that the appellant was liable to pay the luxury car tax, and that there was not an authorising law that gave the Tribunal jurisdiction to review it.

12. Notwithstanding Dr Quach’s statements at the original hearing, the appellant appealed from the original tribunal’s decision. It did so on several grounds.

13. First, it submitted that sections 71 and 77(iii) of the Australian Constitution vest federal jurisdiction in the Magistrate Courts of the States and Territories; that the ACAT has the same jurisdiction as the ACT Magistrates Court up to $25,000; that the Tribunal therefore has jurisdiction in “this civil dispute” meaning the appellant’s claim for “a loss equal to the luxury car tax”.

14. Second, it submitted that the “loss” is due to a “false representation” by the ATO, namely that the Vehicle is subject to the luxury car tax.

15. Third, it submitted that the Commissioner’s decision is “an error for fact and law” and that “in the context of the function of ACAT” it was seeking “civil and administrative review” because ACAT “is non-judicial and its decisions are of an administrative character”.

Consideration

1. The first submission misunderstands the Tribunal’s jurisdiction. The Tribunal is a subordinate body created under statute, namely the ACAT Act. It has jurisdiction only insofar as it is granted jurisdiction under statute.

2. The appellant submitted that the Tribunal has the same jurisdiction as the ACT Magistrates Court for claims up to $25,000. That is not correct. Per section 17 of the ACAT Act, it is first necessary that the claim be a “civil dispute application” defined in section 16(1) of the ACAT Act as follows:

   civil dispute application means an application that consists of 1 or more of the following applications:

   (a)a contract application;

   (b)a damages application;

   (c)a debt application;

   (d)a goods application;

   (e)a nuisance application;

   (f)a trespass application;

   (g)an application for a debt declaration;

   (h)an application for a common boundaries determination;

   (i)an application for an order under the Australian Consumer Law (ACT);

   (j)an application stated to be a civil dispute application in an authorising law.

3. If the claim is of such a kind, it may be for a sum up to the Tribunal’s “jurisdictional limit”, namely $25,000 unless the parties agree to the Tribunal deciding the application for a greater amount.

4. I acknowledge that section 22 of the ACAT Act gives the Tribunal the same jurisdiction and powers as the Magistrates Court, but section 22 applies only “in relation to a civil dispute application”.

5. The appellant’s claim is not a civil dispute application. It is an application for review of the Commissioner’s decision that it is liable to pay a tax. It follows that none of the provisions in the ACAT Act concerning civil dispute applications, including section 22 giving the Tribunal the same jurisdiction and powers as the Magistrates Court, is applicable. The first ground of appeal fails.

6. Dr Quach provided written submissions in support of the appellant’s second ground of appeal. The submissions went to two propositions.

7. First, he drew on the definition of ‘variant’ in the Macquarie Dictionary to contend that the Vehicle is a ‘variant’ of the Mercedes-Benz Vito Van W447, which (he said) is a commercial vehicle. He submitted that the Vehicle, being a variant of the Vito Van, is therefore not subject to the luxury car tax. He submitted that the Commissioner’s determination that a ‘variant’ of a commercial vehicle is a passenger vehicle is an “untruth” for the purpose of the Commissioner “winning money” and “a false representation”.

8. Second, he relied on the High Court’s decision in Gedeon v NSW Crimes Commission [2008] HCA 43 to contend that any application of the luxury car tax to the Vehicle, based on the marketing of a Mercedes-Benz V class V250 as a luxury car, is invalid. He contended that the application of a luxury car tax on a car that is marketed as a luxury car per se is an “untruth” and a “false representation”.

9. The appellant’s second ground of appeal is misconceived. The Commissioner did not ‘represent’, falsely or otherwise, that the Vehicle is subject to the luxury car tax. It made a decision that it was. I acknowledge that the appellant does not agree with the decision, but that does not make the decision “false”. The decision is a conclusion reached by the Commissioner, about which the appellant was able to seek review in the AAT. Also, it is incorrect to characterise the tax as a “loss”. The appellant has not lost anything, and nothing has been taken from him. The decision was a statement of a statutory obligation to pay a tax.

10. In any event, Dr Quach does not point to any statutory provision that gives the Tribunal jurisdiction to consider whether the Commissioner’s “representation”, decision or finding that the Vehicle is subject to the luxury car tax is “false”. The second ground of appeal fails.

11. The third ground of appeal is similarly misconceived. Dr Quach’s characterisation of the Tribunal as “non-judicial” and of its decisions as “of an administrative character” does not give it some kind of wide ranging “function” to decide applications or correct “an error” of fact or law. As stated, the Tribunal is a subordinate body established under statute. It has no power to decide a claim or make an order otherwise than where it is empowered under statute to do so. The third ground of appeal fails.

12. Where the Original Tribunal dismissed the appellant’s civil dispute application on the grounds that it did not have jurisdiction to hear it, and where the appellant has not persuaded me of any error in that decision, the application for appeal is dismissed.

13. The Commissioner made a late supplementary submission that the application for appeal should be dismissed in any event on the grounds that the Tribunal “cannot make orders binding on the Commonwealth”. Where the application for appeal is dismissed for the reasons given, it is unnecessary to decide whether the Tribunal cannot make an order against the Commonwealth generally.

………………………………..

Presidential Member G McCarthy

Date of hearing: Appellant:	Heard on the papers Dr M Quach, authorised representative
Solicitors for the Respondent:	Mr V Tavolaro, Australian Government Solicitor