Roofing Services Queensland Pty Ltd ATF Roofing Services Qld Trust v The Commissioner of State Revenue t/as Office of State Revenue
[2025] QCAT 604
•8 November 2024
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Roofing Services Queensland Pty Ltd ATF Roofing Services Qld Trust v The Commissioner of State Revenue t/as Office of State Revenue [2025] QCAT 604
PARTIES:
ROOFING SERVICES QUEENSLAND PTY LTD ATF ROOFING SEVICES QLD TRUST (applicant)
v
THE COMMISSIONER OF STATE REVENUE T/AS OFFICE OF STATE REVENUE (respondent)
APPLICATION NO/S:
GAR257-22
MATTER TYPE:
General administrative review matters
DELIVERED ON:
8 November 2024
HEARING DATE:
29 July 2024
HEARD AT:
Brisbane
DECISION OF:
Member King-Scott
ORDERS:
1. The decision of the Commissioner to disallow the objections to reassessments in respect of Aqua Fix Roofing and Guttering Pty Ltd, NSM Roof Services Pty Ltd, CWT Roofing and Sunshine Coast Maintenance Plumbers is confirmed.
2. The Commissioner’s decision to disallow the objection to reassessment in respect of S.A.S Roofing is set aside and the objection is returned to the Commissioner to be reconsidered in accordance with the Tribunal’s findings.
CATCHWORDS:
TAXES AND DUTIES – PAYROLL TAX – LIABILITY TO TAXATION – GROUPING OF EMPLOYERS – Where Commissioner assessed payments to various sub-contractors as taxable wages – conceded that the contractors were independent contractors and not employees – exemptions under s 13B(2)(b)(iii) and s 13B(2)(c)(iii) of the Payroll Tax Act 1971 (Qld) disallowed – Where respondent sought review of Commissioner’s decision to disallow objection against assessment
Payroll Tax Act 1971 (Qld)
Taxation Administration Act 2001 (Qld)
AGC Roof Maintenance Northern Division Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 199
B&L Linings v Chief Commission of State Revenue (No 3) [2007] NSWADTAP 32
B&L Linings v Chief Commissioner of State Revenue (2008) 74 NSWLR 481
Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657Salemade Pty Limited v Commissioner of State Revenue (2021) 113 ATR 557
APPEARANCES & REPRESENTATION:
Applicant:
Self-represented by A Gardiner
Respondent:
F Chen instructed by OSR
REASONS FOR DECISION
Introduction
The Applicant, Roofing Services Queensland Pty Ltd as trustee for the Roofing Services QLD Trust (‘Roofing Services’) seeks a review of the Commissioner's decision (‘the objection decision’) to disallow its objection to reassessments, which assessed the Applicant for payroll tax and unpaid tax interest.
If a taxpayer is dissatisfied with the Commissioner’s decision on a taxpayer’s decision the taxpayer may seek a review of that decision, inter alia, by QCAT pursuant to s 69 of the Taxation Administration Act 2001 (Qld) (‘TAA’).
When reviewing a decision of the Commissioner, the Tribunal has all of the functions of the Commissioner.[1] The Commissioner's role is to assist the Tribunal.[2] The Tribunal's review is to be decided in accordance with the same law that applied to the making of the original decision.[3]
[1]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 19(c) (‘QCAT Act’).
[2]Ibid, s 21.
[3]TAA, s 71(3)(b).
The purpose of the hearing is to make the correct and preferable decision.[4] The Tribunal may confirm or amend the decision, set it aside and substitute its own decision, or return it for reconsideration by the Commissioner.[5]
[4]QCAT Act, s 20(1).
[5]Ibid, s 24(3).
Background
Roofing Services was incorporated on 12 November 2013 and acts as trustee for the Roofing Services Qld Trust. The sole director of Roofing Services is Andrew Gardiner and the sole shareholder is his wife Shannon Gardiner.
Since around 2013, Roofing Services has conducted roof replacements including new roofing, asbestos removal and tile to tin conversions often due to storm damage. It provides these services in Queensland and NSW.
Roofing Services employs employees and engages contractors for the provision of its services.
The Commissioner did not dispute that the contractors that Roofing Services engaged to perform roofing services for its business were independent contractors and not common law employees.[6]
[6]Objection decision Volume 1 Hearing Book page 10 paragraph 5.
In a letter to the Applicant dated 10 January 2022, the Respondent asserted the following payroll tax was assessed:
Year Wages of Employees Payments to Contractors Total assessed as Taxable Wages FY18 $820,207 $185,408 $1,005,615 FY19 $1,019,373 $618,770 $1,638,143 FY20 $1,097,331 $435,899 $1,533,230 FY21 $784,438 $220,969 $1,005,407
As a result of the above findings, the Commissioner issued “reassessment notices” dated 10 January 2022 as follows (‘the Assessments’):
Year Payroll Tax Penalty Tax Unpaid Tax Interest Total Payment Ref FY18 $0 $0 $0 $0 100020153480 FY19 $31,952.25 $0 $6,466.09 $38,418.34 100022411449 FY20 $13,848.06 $0 $1,496.48 $15,344.54 100024804609 FY21 $0 $0 $0 $0 100027485471 Total $53,762.88
The payments in dispute were identified as:
(a)Aqua Fix Roofing Qld Pty Ltd;
(b)Ben Turner;
(c)BWR Pty Ltd;
(d)CASPA Constructions;
(e)Chris Turner;
(f)CWT Roofing;
(g)Jason Hall;
(h)JH Superior Metal Roofing Pty Ltd;
(i)NSM Roof Services Pty Ltd;
(j)Ratto's Roofing;
(k)S.A.S Roofing;
(l)Sunshine Coast Maintenance; and
(m)TNC Roofing Solutions Pty Ltd (collectively, ‘the Contractors’).
Under the Payroll Tax Act 1971 (Qld) (‘PT Act’), payroll tax is imposed on “taxable wages” at the general rate of 4.75%[7] if they satisfy the requisite nexus with Queensland. Wages paid by an employer to an employee are within the definition of taxable wages. Payments made by a principal to a contractor also may be within the definition of taxable wages.
[7]PT Act, s 10(1).
Roofing Services maintains that payments made to the Contractors are payments within section 13B(2)(c) of the PT Act.
Roofing Services submits that the Commissioner was incorrect in his Decision to disallow Roofing Services’ objection and was incorrect to include as “taxable wages” payments made by Roofing Services to certain contractors in FY19 and FY20.
Roofing Services submits that the Decision should be set aside, the Tribunal should revoke the consequential assessments and decide that the payments in question fall within the exemption set out in s 13B(2)(c) of the PT Act.
Section 13B(2)(b) and (c) of the PT Act relevantly provides:
13B Meaning of relevant contract
(1) …
(2) However, a relevant contract does not include a contract of service or a contract under which a person (the designated person), in the course of a business carried on by the designated person—
(a) …
(b) is supplied with services in relation to the performance of work, if—
(i) …
(ii) …
(iii)the services are provided for a period that does not exceed 90 days or for periods that, in the aggregate, do not exceed 90 days in the relevant financial year and are not services—
(A)provided by a person by whom similar services are provided to the designated person; or
(B)in relation to the performance of work where any of the persons who perform the work also perform similar work for the designated person;
for periods that, in the aggregate, exceed 90 days in the relevant financial year; or
(c)is supplied by a person (the contractor) with services in relation to the performance of work under a contract to which paragraphs (a) and (b) do not apply, if the work to which the services relate is performed—
(i)by 2 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or
(ii)if the contractor is a partnership of 2 or more individuals—by 1 or more of the members of the partnership and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or
(iii)if the contractor is an individual—by the contractor and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor.
The Commissioner published his view on how the Commissioner interpreted and applied s 13B(2)(c) of the PT Act in the Public Ruling PTA023.2 - Payroll Tax Act - Harmonised: Contractors Engaging Others (‘Public Ruling PTA023’) which provided that all the following conditions must be met for the exemption in s 13B(2)(c) of the PT Act to apply in each or the above circumstances.
Public Ruling
Public Ruling PTA023 provides guidance on how the Commissioner interprets and applies s 13B(2)(c) of the PT Act.
The Public Ruling relevantly sets out that:
5. Section 13B(2)(c) of the Payroll Tax Act may apply to exclude a contract from the definition of ‘relevant contract’ in any of the following situations:
(a)where the entity contracted to provide services (the contractor) is a company—the work under the contract is performed by two or more persons
(b)where the contractor is a partnership of natural persons—the work under the contract is performed by either:
(i)one or more partners and one or more other persons or
(ii)two or more persons, none of whom is a partner and not only by one or more partners alone
(c)where the contractor is an individual (i.e. a sole trader)—the work under the contract is performed by either:
(i)the individual and one or more other persons or
(ii)two or more persons, none of whom is the individual.
6. In addition, all the following conditions must be met for the exemption in s.13B(2)(c) of the Payroll Tax Act to apply in each of the above circumstances:
(a)the contractor must be carrying on a business (includes a trade, profession, or any other activity generally provided for a fee, gain or reward, carried out in systematic and repetitive manner)
(b)the contractor must have the overall responsibility to fulfil the terms of the contract in the course of the contractor’s business
(c)the person(s) performing the work under the contract must be engaged directly by the contractor and not the principal, even though the principal may also benefit from those services
(d)the services supplied by the person(s) performing the work must be a necessary part of and are supplied in the course of the contractor’s business and
(e)the person(s) must be engaged by the contractor to perform the work which is the object of the contract.
‘Buddy gang’
8. It is common for contractors to operate in a team or ‘buddy gang’ system where two or more contractors work together on a job or number of jobs. Often, it is difficult to establish the formal relationship between members of the gang, or whether the gang constitutes a legal entity.
9. Where there is a lack of documentation supporting the status of the gang, a contract is deemed to exist between the principal and each contractor if the principal pays each of the contractors separately. In these circumstances, the exemption does not apply to a buddy gang of contractors…
The Commissioner submits that the onus is on Roofing Services to establish, on the balance of probabilities, that it is entitled to the exemption and that each of the services provided to Roofing Services were performed by two or more persons employed by the contractor.
Roofing Services filed an application in the Tribunal seeking leave to adduce new evidence in the proceeding. The application was not opposed by the Commissioner. The new evidence comprised statutory declarations from Jason John Hall dated 15 August 2022, Scott Anthony Stimson dated 24 August 2022 and Andrew Iain Gardiner dated 25 August 2022.
A further ground of objection was granted to Roofing Services by the direction of the Tribunal on 21 July 2023 for Roofing Services to rely upon the exemption that services were provided for no more than 90 days in a financial year.
The evidence
The Commissioner identifies the evidence in this proceeding as including the following:
(a)The Section 21 Documents;[8]
(b)The new evidence that has been adduced in the proceeding (leave being sought in an application filed 25 August 2022) being:
(i) Statutory Declaration from Jason Hall dated 15 August 2022;
(ii) Statutory Declaration from Scott Stimson dated 24 August 2022;
(iii) Statutory Declaration from Andrew Gardiner dated 25 August 2022.
(c)The Supplementary Section 21 documents.
(d)Further new evidence adduced by the Roofing Services pursuant to Application for miscellaneous matters (Form 40) filed 30 January February 2023, which can broadly be described as:
(i) examples of Safe Work Method Statement (‘SWMS’);
(ii) examples of contractor invoices, subcontractor rate cards, quote & customer work order; and
(iii) Transaction history called a “Supplier Fast Report”.
[8]Documents provided pursuant to s 21(2) QCAT Act.
Other evidence included the oral evidence of Andrew Gardiner and Scott Stimson given at the hearing.
Roofing Services’ case is that during the Relevant Years a number of contractors were exempt from being considered under relevant contracts pursuant to s 13B(2)(c)(iii) and 13B(2)(b)(iii) of the PT Act being:
(a)Aqua Fix Roofing QLD Pty Ltd (2019);
(b)NSM Roof Services Pty Ltd (FY2019 & 2020);
(c)S.A.S Roofing (FY 2019 & 2020);
(d)Sunshine Coast Maintenance (FY 2020).
Roofing Services and the Commissioner advised at the outset of the hearing that the claims in respect of the following contractors were no longer in issue because of concessions made by either the Commissioner or Roofing Services:
(a)Ben Turner;
(b)Jason Hall and Hall Family Trust;
(c)TNC Roofing Solutions Pty Ltd;
(d)CWT Roofing;
(e)Chris Turner; and
(f)Ratto's Roofing.
In order to establish an exemption for each of the contractors the Commissioner required evidence where the entity was a company that the work under the contract was performed by two or more persons, where the contractor was an individual (i.e. sole trader). The work under the contract was performed by the individual and one or more persons. Alternatively, the Commissioner submits that Roofing Services has not discharged its onus in relation to claiming the exemption under s 13B(2)(b)(iii) of the PT Act as the evidence did not appear to show that the contractor provided less than 90 days of services in a financial year.
Relevant Cases
Counsel for the Commissioner referred to and commented upon the following authorities in the course of her submissions.
The Queensland Court of Appeal in Salemade Pty Limited v Commissioner of State Revenue[9] (‘Salemade’), in relation to New South Wales payments, required consideration of the New South Wales equivalent of s 13B(2)(c) of the PT Act (being s 32(2)(c) of the Payroll Tax Act 2007 (NSW), which is drafted in materially similar terms). In that case, Bond JA set out that establishing this exemption requires the following:
[37] Proof that a payment was within exemption (two or more persons) would require —
(a)proof of the contract between the designated person and the other party (in this context the contractor) and under which the payment was made;
(b)proof that under the contract the services supplied to the designated person were supplied to the designated person in the course of a business carried on by the designated person;
(c)proof that the contractor supplied the designated person with services for or in relation to the performance of work under a contract to which exemptions number 1 and 2 do not apply; and
(d)proof that the work to which the services relate was performed in one of the three ways identified by s 32(2)(c)(i) to (iii).”
[9](2021) 113 ATR 557.
In Salemade, at first instance the taxpayers adduced evidence that payments to a particular contractor attracted a “relevant contracts” exemption on the basis that “Concreting services required 2 or more persons to perform” and that this evidence applied generally to other payments. The primary judge evaluated this evidence and held that in relation to the particular payments the evidence fell short of providing the facts which were necessary to allow Her Honour to understand the basis for the payments and to judge whether or not an exemption could be established, let alone applying generally to all of the transactions. No error in this analysis was found on appeal.
In AGC Roof Maintenance Northern Division Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 199, which also considered the New South Wales provisions, the taxpayer sought to establish the exemption on the basis of evidence that:
(a)it was not practical or possible to carry out roofing works of some $96,853 without employees, because one individual could not safely complete the work; and
(b)the taxpayer's director had witnessed the companies/contractors engaging other workers on many occasions and relied upon job sheets that referred to at least two workers providing services on particular jobs (although the taxpayer did not maintain records of whether the contractors worked with other people).
In that case, the Tribunal determined that the evidence was clear and consistent and was satisfied that the two-person exemption applied. In one instance, the exemption was denied where there was only one worksheet, and it was not clear whether the contractor engaged the services of two other people or whether they were the taxpayers’ employees.
In Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657, the Court considered the “two-person exemption” and in relation to the issue of onus cited B&L Linings v Chief Commissioner of State Revenue (2008) 74 NSWLR 481 (‘B&L Appeal’) and, in particular, the acceptance by the Court of Appeal (at [87]) of the conclusion by the Appeal Panel of the NSW Administrative Decisions Tribunal (in B&L Linings v Chief Commission of State Revenue (No 3) [2007] NSWADTAP 32 (‘B&L Appeal Panel’) at [107]). That is, it is not necessary to prove that every single payment made to a contractor was for services provided by two persons. What Allsop P (as His Honour then was) said (at [87] of the B&L Appeals, with Giles and Basten JJA agreeing, was that:
... From a practical point of view, the provision creating the two-person exemption would be unworkable if a taxpayer seeking to invoke it with respect to a series of payments made to one or more independent contractors was compelled to adduce documentary and/or oral evidence establishing, with regard to each individual payment, both (a) the engagement of one or more identified ‘second persons’ by the contractor in order to carry out the task that the contractor had agreed to perform for the taxpayer and (b) actual participation in this task by the second person or persons. A case like the present, involving numerous small-scale tasks that were performed by numerous contractors and (allegedly) numerous ‘second persons’, illustrates clearly why such a requirement would impose an undue burden on taxpayers and, indeed, on the Commissioner. The Commissioner would be bound to scrutinize detailed evidence of this nature before deciding whether any claim for the exemption should be accepted.
In that case, the taxpayer relied upon evidence in relation to their general practice, certificates of currency in relation to insurance that identified in the vast majority of cases that the subcontractors provided their services by way of two or more persons, and evidence of the scope of works and clients which necessitated at least two persons completing the work.
The Court held that the Certificates of Currency were not conclusive and, rather, undertook a calculation of the fees earned by each contractor to work out whether it was likely that in order to earn the amount of fees, more than one worker was required.
In Salemade, Bond JA made three preliminary observations. They were:
First, the appellants bore the onus of proof on the appeal before the primary judge: s 70A of the TAA.
Second, in a case where tribunal of fact is deciding facts according to the civil standard of proof on limited material, the orthodox approach is to regard the tribunal of fact as dealing with two questions: first, what are the probabilities on the limited material which it has, and, second, whether that limited material is an appropriate basis on which a to reach a reasonable decision: see Ho v Powell (2001) 51 NSWLR 572 at [14] per Hodgson JA (with whom Beazley JA agreed). Hodgson JA noted further (at [15]):
In considering the second question, it is important to have regard to the ability of parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so: .... As stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 at 65; at 970:
[All] evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.
Third, proof that payments were not "taxable wages within the meaning of a corresponding law" because they fell within one or more of the exemptions to the definition of "relevant contract" was itself a matter of some complexity, in which much more would need to be demonstrated than merely showing that payment had been made to someone who was a contractor.
Roofing Services evidence
Counsel for the Commissioner submitted that Roofing Services needed to satisfy the Tribunal not only with evidence of written contemporaneous documents that identified two or more persons as having been employed but also direct evidence from a director or someone having overseen the projects, or able to depose to those projects as having two or more people engaged. Only Mr Stimson trading as S.A.S Roofing gave oral evidence and testified to working on projects with people he employed.
I will deal with that evidence and other evidence relied upon by Roofing Services and the Commissioner’s comments in relations to each of the above contractors seriatim:
Aqua Fix Roofing and Guttering Pty Ltd
The evidence in relation to Aqua Fix established it had been paid $193,757.00 in the financial year. It was registered as a business. There was no insurance workers’ compensation evidence. The licences, certificates and resumes did not establish that Aqua Fix engaged contractors in the course of its business. References in relation to Mr Scott Brunner, the principal, did not mention that he worked with a team but only referred to him as working as an individual. Other evidence relied upon by Roofing Services did not relate to the financial year nor established that Aqua Fix engaged employees or subcontractors in the course of its business. The Commissioner detailed the evidence as follows:
(a)The AAMI Mobile Business Insurance Policy,[10] effective from 13 September 2019 to 7 August 2020, did not relate to the relevant financial year; and
(b)the GIO Mobile Business Protect Insurance Certificate of Currency,[11] for the period from 26 October 2018 to 26 October 2019, did not evidence that Aqua Fix engaged employees or subcontractors in the course of its business.
[10]Section 21 Documents at p 167-168.
[11]Section 21 Documents at p 170. Another GIO Certificate of Currency for the period 28 June 2016 to 28 June 2017 does not relate to the relevant financial year, see Section 21 Documents al 183.
The Commissioner submits that there was no evidence available to him from third party data or online that would suggest Aqua Fix, as a company, employed or engaged other people to provide services for it in the course of the business carried on by it.
Specifically, Aqua Fix had an online presence, through the website.[12] In respect to this the Commissioner observed:
(a)The contact was Scott Brunner;[13]
(b)The "reviews" suggested that a single person carried out the work, with multiple references to "Scottie" conducting the work; and
(c)It was not clear whether the online reviews were by property owners who had contracted with Roofing Services (or with Aqua Fix only).
(d)In the Andrew Gardiner Statutory Declaration, only one example was provided for a job that required a re-roof and guttering for $3,441, wherein a SWMS was provided that showed that two people signed the section entitled “persons involved in the activity”. The Commissioner submitted that this single SWMS did not on balance establish that all works undertaken by Aqua Fix for Roofing Services was performed by two or more people, particularly in light of the other factors already established.
(e)In the new evidence, there were only two tax invoices that identified that two people were required to undertake work, which were invoices for modest amounts of $200 and $500 relating to labouring work.
(f)A number of SWMSs have been provided. However, they appeared to be signed by Scott from Aqua Fix and another person called "Andy". There is no evidence available to identify who Andy was, and whether Andy was an employee or contractor engaged by the Applicant or Aqua Fix.
[12]Section 21 Documents p 1-4.
[13]Section 21 Documents p 1.
In conclusion in relation to Aqua Fix the Commissioner submitted the documentary evidence did not identify that two or more people performed the work provided by Aqua Fix to Roofing Services and that the documentary evidence was insufficient to enable this Tribunal to draw that inference. I agree with that submission.
NSM Roof Services Pty Ltd (FY2019 & 2020)
Evidence provided by Roofing Services to bring it into the exception provided by s 13B(2)(c)(iii) of the PT Act and the Commissioner’s response to the evidence was as follows:
(a)NSM Roof Services provided its services as a trust, with work being performed by Mr Nathan McTaggart. It had been paid $180,410 in FY2019 and $61,710 in FY2020. The Commissioner submits that amounts paid to NSM Roof Services was not indicative of how many people performed the work.
(b)The documentation relied upon in relation to NSM Roof Services did not establish or refer to NSM Roof Services engaging employees or subcontractors in the course of its business, other than Mr McTaggart under his sole trader ABN being the Roofing Services Induction Letter and Subcontractor Declarations.[14]
(c)The WorkCover policy[15] provided was effective from 1 July 2018 to 30 September 2019, being for only some of the relevant financial years, but in any event did not establish or refer to other employees required to perform Roofing Services’ work.
(d)The completed Roofing Services Job Sheet identifies the person performing the work as Nathan McTaggart under his sole trader ABN 66 902 074 431.
(e)The licenses[16] did not evidence that it or he had engaged employees or subcontractors in the course of their business and only related to Mr McTaggart.
(f)The Trades Liability Insurance Policy and the OnePath EasyProtect Income Policy Certificate of Currency did not relate to the relevant financial years, but in any event only insured Mr McTaggart.
(g)The invoice from NSM Roof Services to Roofing Services dated 17 November 2019 did not indicate that multiple persons were required to perform the work.[17]
[14]Section 21 Documents pp 275-278 and 281-283.
[15]Section 21 Documents p 56.
[16]Section 21 Documents p 274.
[17]Section 21 Documents p 124.
The Commissioner submits that there was no evidence available to him from third party data or online information that would suggest that NSM Roof Services employed or engaged other people to provide services for it in the course of the business carried on by it.
Andrew Gardiner, in his Statutory Declaration, provided an example of a job that required metal roofing which appeared to have required two people as a SWMS was provided that showed that two people signed the section entitled “persons involved in the activity”, in which Mr McTaggart and one other person signed on an unknown date.[18] An invoice was also included for the work and is dated 17 November 2019.
[18]Statutory declaration Andrew Gardiner Exhibit A p 125-155.
In the new evidence, the SWMS documents are inconclusive as to whether NSM Roof Services provided services with two or more people to Roofing Services, as:
(a)Nathan McTaggart and another person (either Chasse Theale, Liam Drumm or Aaron Pollard) were listed;
(b)There was no evidence available to identify who Liam Drumm or Aaron Pollard[19] were, and whether they were employees or contractors engaged by the Applicant or NSM Roofing Services;
(c)Chasse Theale appeared to be a contractor related to CWT Roofing. Most of the SWMSs were unsigned.
[19]Transcript 1-30 line 6.
In conclusion, in relation to NSM Roof Services, the Commissioner submitted the documentary evidence provided did not cover all of the relevant financial years relating to NSM Roof Services (being the 2019 and 2020 financial years) and in any event did not identify that two or more people performed the work for NSM Roof Services that was provided to Roofing Services. The Commissioner submitted that one example of a SWMS that indicated that two people performed a job for Roofing Services by NSM Roof Services was insufficient for Roofing Services to discharge its onus of proof. I agree.
S.A.S Roofing (FY2019, 2020 & 2021)
The Commissioner submits the relevant evidence and documentation relating to S.A.S Roofing in the Objection Decision did not on balance establish that all work undertaken by S.A.S Roofing for Roofing Services was performed by two or more people for the following reasons:
(a)S.A.S Roofing provided its services through Mr Scott Stimson trading as S.A.S Roofing under his sole trader ABN 53 441 858 454 and was paid $95,590 (FY2019), $145,920 (FY2020), and $35,510 (FY2021). The amount paid to S.A.S Roofing was not indicative of how many people performed the work.
(b)The documentation relied upon did not establish or refer to S.A.S Roofing engaging employees or subcontractors in the course of its business other than Mr Stimson, such as the Induction Letter and Subcontractor Declarations.
(c)The WorkCover policy did not relate to the relevant financial years, and in any event did not establish or refer to other employees required to perform the Roofing Services work.
(d)The licenses did not evidence that Mr Stimson engaged employees or subcontractors in the course of his business and only related to Mr Stimson.
(e)The QBE Business Pack Insurance Policy only insured Mr Stimson and therefore did not evidence that he engaged employees or subcontractors in the course of his business.
(f)The tax invoice issued by Mr Stimson, dated 25 August 2020, did not evidence that Mr Stimson engaged employees or subcontractors to provide services to him in the course of his business.
The data available online did indicate that S.A.S Roofing may have employed or engaged other people to provide services for it, in the course of the business carried on by it, as there were some references to a “team”. However, Roofing Services had not established that the online reviews were by property owners who had engaged it.
Mr Stimson provided a statutory declaration, in which he deposed that he never allowed any of his employees to work alone and neither did he, that he hired six employees in his business between 1 July 2018 to 30 June 2020, and that he would generally allocate four people per job.
Mr Gardiner in his statutory declaration provided an example of a job that required metal roofing. It appeared to have required more than two people as the SWMS provided showed that more than two people signed the section entitled “persons involved in the activity”, as four people signed on 18 August 2020.
In the new evidence, SWMS documents appeared to indicate that S.A.S Roofing provided services with two or more people to Roofing Services, as they were signed by two or more people who were identified in the Statement of Scott Stimson dated 24 August 2022 which identifies those persons as being employees or contractors of S.A.S Roofing.
However, the Commissioner asserted that the SWMS documents for the 2019 financial year only identified Scott Stimson. Further, there were a few invoices that also charged for two or more people's work, which may have indicated that two or more people supplied the services by S.A.S Roofing to the Applicant.
The Commissioner submitted: the documentary evidence provided did not cover all of the relevant financial years relating to S.A.S Roofing, being 2019 to 2021 financial years, some of the documents that are provided do not relate at all to the relevant financial years, and in any event they do not identify that two or more people performed the work for S.A.S Roofing that was provided to Roofing Services.
Although there was an example provided where two or more people did undertake the work provided by S.A.S Roofing to Roofing Services, the Commissioner submitted that this evidence is insufficient to enable the Tribunal to draw the inference or conclusion that all jobs undertaken by S.A.S Roofing to Roofing Services during the relevant financial years were all performed by two or more persons employed or engaged by them.
The Commissioner submits that Roofing Services has not discharged its onus in establishing, on the balance of probabilities, for each of the financial years, and for each job it undertook for Roofing Services, that two or more people performed the work. The Commissioner submits that Roofing Services has not discharged its onus in relation to claiming the exemption under s 13B(2)(b)(iii) of the PT Act as the evidence does not show that the contractor provided less than 90 days of services in a financial year.
This was the only contract where evidence was given by someone who had direct evidence in relation to the work it carried out. I accept Mr Stimpson’s evidence as being frank and truthfully given and the best he could do having to recall matters of earlier contracts that he would not have expected to recall at a later date.
Mr Stimpson had no record of the actual number of days he worked in each financial year but approximated the number of days from the jobs he did and an estimate of how long each job took to complete.[20] Those jobs did not exceed 90 days for either financial year. I accept his evidence on this point.
[20]Transcript I-12 lines 35-50 and I-13, I-14 lines 1-20.
Mr Stimpson testified to having a lot of employees over the years. He thought he hired well over 200 employees since 2000. He could not remember every single employee, especially ones that came in for a day or two. He could not imagine another contractor working on the rooves, he thought the exception may have been if they were engaged in rubbish removal.[21]
[21]Transcript I-15 - I-16.
I am satisfied that Roofing Services has discharged its onus in establishing, on the balance of probabilities, for each of the financial years, and for each job S.A.S Roofing undertook for Roofing Services, that two or more people performed the work and further that Roofing Services has discharged its onus in relation to its claim for the exemption under s 13B(2)(b)(iii) of the PT Act.
Sunshine Coast Maintenance Plumbers
The decision maker considered the relevant evidence and documentation in relation to Mr Stuart Wills trading as Sunshine Coast Maintenance Plumbers (‘Sunshine Coast Maintenance Plumbers’ or ‘Mr Wills’), in the Objection Decision.[22] Roofing Services relied upon the following evidence, which the Commissioner submits did not on balance establish that all work undertaken by Mr Wills for Roofing Services was performed by two or more people for the following reasons:
(a)Mr Wills provided his services under his sole trader ABN 25 480 051 373 and was paid $29,968.[23] The amount paid to Mr Wills was not indicative of how many people undertook the work.
(b)The documentation relied upon did not establish or refer to him engaging employees or subcontractors in the course of its business, being the Subcontract Agreement, WHS Management Plan, Induction letter, Roofing Services Qld Attachment A - Insurance Information, Subby Information Sheet, and Subcontractor Declarations.[24]
(c)The AIG Certificate of Currency[25] showed that Mr Wills was the only insured and therefore did not evidence that he engaged employees or subcontractors in the course of his business.
[22]Objection Decision Section 21 Documents p 13.
[23]Section 21 Documents pp 147 and 156.
[24]Section 21 Documents p 299-300.
[25]Section 21 Documents p 307.
There was no third party data that indicated that Mr Wills had engaged employees or subcontractors.
In the new evidence, the documents provided did not identify that two or more people provided the services by Sunshine Coast Maintenance Plumbing to the Applicant.
In the Supplier Fast Report it was unclear whether services were provided for more than 90 days, as it showed that Sunshine Coast Maintenance Plumbing provided services consistently for six months throughout the financial year, though did not indicate how many days of work were performed.
The Commissioner submits that the paucity of documentary evidence provided by the Applicant is insufficient to discharge its onus to prove that on the balance of probabilities, all of the work undertaken by Sunshine Coast Maintenance Plumbers for the Applicant was performed by two or more people. I agree.
Submissions of the parties
Roofing Services relies upon the statutory declarations of Mr Hall and Mr Stimson in which they declare that generally re-roofing is undertaken in a crew and that the work is unsafe undertaken alone because:
(a)Based on Mr Hall's experience, most re-roofing required a crew, but re-roofing of low-set roofs or small jobs may be undertaken alone;
(b)In Mr Stimson's experience, roofing installation work should not be performed alone and that it is important that at least two people work on a job; and
(c)Mr Gardiner's annexures to his statutory declaration included a number of SWMSs for all of the relevant contractors for which exemptions were sought except Sunshine Coast Maintenance Plumbers.
Mr Stimson was the only subcontractor to give evidence. He had an imperfect recollection of the work he carried out for Roofing Contractors. That is not surprising in view of the number of contracts he was engaged in and the time that has expired since he completed the work.
The Commissioner submits that the reasoning in Salemade[26] demonstrates that general evidence cannot be applied generally to all payments and falls short of establishing that an exemption would be established on this evidence.
[26]Paragraphs [44]-[47].
Further, in terms of the general evidence, Mr Hall acknowledged that some small jobs and low set houses could be performed alone.[27] There was no evidence in relation to the scale of any of the work performed by the relevant contractors.
[27]Hearing Book 1 A2 p 33.
Roofing Services has provided other documentary evidence to establish that the work undertaken by the contractors was in fact performed by two or more persons, being several SWMSs. However, this evidence has little utility in allowing the Tribunal to draw an inference that all transactions and jobs undertaken by the relevant contractors are similar to the jobs for which SWMSs have been provided as:
(a)a SWMS has not been provided for all of the relevant contractors;
(b)even if one is provided, a SWMS has not been provided for all of the relevant financial years for that contractor; and
(c)even if a SWMS is provided for a contractor for all of the relevant financial years, then only one example has been provided.
The Commissioner submits that the documentary evidence did not enable Roofing Services to establish on the balance of probabilities that all payments and jobs undertaken by the contractors for Roofing Services were performed by two or more persons.
In AGC Roof Maintenance Northern Division Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 199, although the director of the taxpayer gave evidence of a contractor having engaged other workers, the exemption in relation to that particular contractor was denied on the basis that only one worksheet was produced, and it was unclear whether the workers were the taxpayer's employees or other workers. The Commissioner submits that by analogy, despite Roofing Services’ contention that two or more persons regularly performed work, the limited production of documentary evidence, such as multiple SWMSs, to substantiate this regularity suggests those contentions should be given limited weight.
The WorkCover and other insurance documents do not establish that a contractor has employees or contractors undertaking the work provided to Roofing Services. Similar reasoning was adopted in Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue.[28] Further, these documents indicated that only one person was insured, being a requirement of Roofing Services. Regarding WorkCover insurance specifically, this was not conclusive as it did not specify the work that employees covered under the policy are undertaking, or whether that work was in connection with Roofing Services, or otherwise in support of the contractor’s business generally.
[28][2019] NSWSC 657.
The Commissioner submits that this general evidence that roofing should not be undertaken alone or that it should be undertaken by two or more people does not assist Roofing Services. While those requirements indicated that work of this nature was often not performed alone, the Commissioner submits that it does not assist in ascertaining by whom the persons performing that work are employed or contracted. Further it was submitted that the evidence did not establish that a contractor engaged or employed two or more people to undertake the work.
The Commissioner concedes that the onus that Roofing Services has to establish to come within the exception does not require it to prove that each and every job it engaged contractors for required two or more workers.
With the exception of S.A.S Roofing, I find that Roofing Services has not satisfied the onus that it bears in proving that the other sub-contractors being Aqua Fix Roofing and Guttering Pty Ltd, NSM Roof Services Pty Ltd, CWT Roofing and Sunshine Coast Maintenance Plumbers come within the exception for the exemption under s 13B(2)(b)(iii) of the PT Act.
I confirm the Commissioner’s decision to disallow the objections to reassessments in respect of Aqua Fix Roofing and Guttering Pty Ltd, NSM Roof Services Pty Ltd, CWT Roofing and Sunshine Coast Maintenance Plumbers.
I set aside the Commissioner’s decision to disallow the objection to reassessment in respect of S.A.S Roofing and direct that the Commissioner reconsider his decision in accordance with the findings of the Tribunal.
0
6
2