TEISSIER and COMMISSIONER OF STATE REVENUE
[2015] WASAT 8
•30 JANUARY 2015
TEISSIER and COMMISSIONER OF STATE REVENUE [2015] WASAT 8
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2015] WASAT 8 | |
| TAXATION ADMINISTRATION ACT 2003 (WA) | |||
| Case No: | DR:179/2013 | DETERMINED ON THE DOCUMENTS | |
| Coram: | JUSTICE J C CURTHOYS (PRESIDENT) | 30/01/15 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application for further documents dismissed | ||
| B | |||
| PDF Version |
| Parties: | FRANCK PHILLIP TEISSIER COMMISSIONER OF STATE REVENUE |
Catchwords: | Land tax Relevant documents 'When the assessment was made' |
Legislation: | Interpretation Act 1984 (WA), s 18, s 19 Land Tax Assessment Act 1976 (WA) Land Tax Assessment Act 2002 (WA) State Administrative Tribunal Act 2004 (WA), s 9, s 24(b) Supreme Court Rules 1971(WA), O 26 Taxation Administration Act 2003 (WA), s 16, s 16(5), s 29(3), s 30 Taxation Administration Bill 2001 (WA) |
Case References: | Nil |
Orders | On the application determined on the documents by the President, Justice Curthoys, it is on 30 January 2015 ordered that:,1. This matter is listed for a further directions hearing at 10 am on 17 February 2015. |
Summary | Mr Franck Teissier made an application to the Tribunal under s 40(1) of the Taxation Administration Act 2003 (WA) for the review of a decision made by the Commissioner of State Revenue to reassess particular lots owned by him for land tax. These lots had previously been assessed by the Commissioner as being exempt from land tax.,By a minute of proposed orders dated 7 November 2014, Mr Teissier sought orders that the Commissioner provide, for each of the land tax assessment years from 1993/1994 to 2012/2013 (excluding 2010/2011), further documents and information about the Commissioner's past practices and interpretation in relation to exemptions granted under s 29(3) of the Land Tax Assessment Act 2002 where the owner and user of the land are different entities or persons.,Whether or not Mr Teissier is entitled to the documents he sought turned on the interpretation of s 16(5) of the Taxation Act.,The Tribunal determined that it only needed evidence of the interpretation of the applicable law or a particular practice of the Commissioner that was generally applied to assessments of the kind in question, during the relevant dates that Mr Teissier's lots were originally assessed as being exempt from land tax.,In addition, the Tribunal determined that the provision of documents and information about the Commissioner's past practices and interpretation in relation to exemptions granted in the years between 1993 and 2013 sought by Mr Teissier was onerous. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : TAXATION ADMINISTRATION ACT 2003 (WA) CITATION : TEISSIER and COMMISSIONER OF STATE REVENUE [2015] WASAT 8 MEMBER : JUSTICE J C CURTHOYS (PRESIDENT) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 30 JANUARY 2015 FILE NO/S : DR 179 of 2013 BETWEEN : FRANCK PHILLIP TEISSIER
- Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Land tax - Relevant documents - 'When the assessment was made'
Legislation:
Interpretation Act 1984 (WA), s 18, s 19
Land Tax Assessment Act 1976 (WA)
Land Tax Assessment Act 2002 (WA)
State Administrative Tribunal Act 2004 (WA), s 9, s 24(b)
Supreme Court Rules 1971(WA), O 26
Taxation Administration Act 2003 (WA), s 16, s 16(5), s 29(3), s 30
Taxation Administration Bill 2001 (WA)
Result:
Application for further documents dismissed
Summary of Tribunal's decision:
Mr Franck Teissier made an application to the Tribunal under s 40(1) of the Taxation Administration Act 2003 (WA) for the review of a decision made by the Commissioner of State Revenue to reassess particular lots owned by him for land tax. These lots had previously been assessed by the Commissioner as being exempt from land tax.
By a minute of proposed orders dated 7 November 2014, Mr Teissier sought orders that the Commissioner provide, for each of the land tax assessment years from 1993/1994 to 2012/2013 (excluding 2010/2011), further documents and information about the Commissioner's past practices and interpretation in relation to exemptions granted under s 29(3) of the Land Tax Assessment Act 2002 where the owner and user of the land are different entities or persons.
Whether or not Mr Teissier is entitled to the documents he sought turned on the interpretation of s 16(5) of the Taxation Act.
The Tribunal determined that it only needed evidence of the interpretation of the applicable law or a particular practice of the Commissioner that was generally applied to assessments of the kind in question, during the relevant dates that Mr Teissier's lots were originally assessed as being exempt from land tax.
In addition, the Tribunal determined that the provision of documents and information about the Commissioner's past practices and interpretation in relation to exemptions granted in the years between 1993 and 2013 sought by Mr Teissier was onerous.
Category: B
Representation:
Counsel:
Applicant : Mr H van Aswegen
Respondent : Ms R Panetta
Solicitors:
Applicant : Hardy Bowen
Respondent : State Solicitor for Western Australia
Case(s) referred to in decision(s):
Nil
Introduction
1 In this matter, Mr Franck Phillip Teissier seeks further documents from the Commissioner of State Revenue (the Commissioner).
2 In determining any application before this Tribunal, s 9 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) informs that determination.
3 Section 9 of the SAT Act provides:
The main objectives of the Tribunal in dealing with matters within its jurisdiction are -
(a) to achieve the resolution of questions, complaints or disputes, and make or review decisions, fairly and according to the substantial merits of the case; and
(b) to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties; and
(c) to make appropriate use of the knowledge and experience of Tribunal members.
4 Section 24(b) of the SAT Act provides:
If a proceeding for the review of a decision is commenced, the decisionmaker is to provide the following to the Tribunal in accordance with the rules -
(b) other documents and other material in the decision-maker's possession or under the decision-maker's control and relevant to the Tribunal's review of the decision.
5 On 6 May 2014, the Tribunal ordered that:
1. By 13 June 2014 the respondent must file with the Tribunal and give to the applicant the following documents:
(a) a statement of issues, facts and contentions it says arise in relation to the decision under review; and
(b) an indexed and paginated bundle in chronological or other logical order of the documents it is required to file under s 24 of the State Administrative Tribunal Act 2004 (WA) namely:
(i) a statement of the reasons for the decision; and
(ii) documents and other material in its possession or under its control which are relevant to the Tribunal's review of the decision.
6 By a minute of orders dated 7 November 2014, Mr Teissier sought orders that the Commissioner provide:
… for each of the land tax assessment years from 1993/1994 to 2012/2013 (excluding 2010/2011), documents and information about the [Commissioner's] past practices and interpretation in relation to exemptions granted under s 29(3) of the Land Tax Assessment Act 2002 where the owner and user of the land are different entities or persons, including the following:
(a) the number of rural business exemptions or concessions granted;
(b) the number of instances where exemptions or concessions were granted where the owner and user were not the same entity or person; and
(c) the number of instances where exemptions or concessions were denied because the owner and user were not the same entity or person.
7 The basis for Mr Teissier's application is s 16 of the Taxation Administration Act 2003 (WA) (the Taxation Act), which provides:
(1) The Commissioner must make a reassessment -
(a) if specifically required to do so under a taxation Act; or
(b) if specifically required to do so under a direction given in the course of review proceedings; or
(c) if a taxation Act provides for a rebate or refund of tax in particular circumstances, and the circumstances were not taken into account when the previous assessment was made.
(2) Subject to subsection (5), the Commissioner may also make a reassessment -
(a) on his or her own initiative, if it appears that a previous assessment is or may be incorrect for any reason; or (b) on the application of the taxpayer.
…
(5) If an assessment is based on a particular interpretation of the applicable law or a particular practice of the Commissioner that was generally applied to assessments of that kind when the assessment was made, then the Commissioner cannot make a reassessment based on the ground that the interpretation or practice is or was erroneous.
8 Whether Mr Teissier is entitled to the documents he seeks turns on the interpretation of s 16(5) of the Taxation Act.
The Lots subject to reassessment
9 The application for review before the Tribunal concerns four lots of land: Lots 805, 806, 807 and 1099.
10 In relation to Lots 805, 806 and 807, on 9 December 2010, Mr Simon Lynn, an officer at the Office of State Revenue (OSR), applied an exemption under s 29(3) of the Taxation Act to the three lots of land. The 2011/2012 and 2012/2013 assessments were made on 28 September 2011 and 10 October 2012 respectively.
11 This exemption was then automatically applied to future years' assessments (including the 2011/2012 and 2012/2013 assessments) by the computer system at OSR, until manually cancelled by Efren Paolini on 20 November 2012.
12 The Commissioner contends that Mr Lynn committed an error in the application of the user/owner test stipulated in s 29(3) of the Taxation Act.
13 The Commissioner therefore wishes to reassess those three lots for the 2011/2012 and 2012/2013 assessment years such that the three lots would be assessable to land tax.
14 Mr Teissier has provided a table of the ownership and operating history of the Lots the subject of the reassessment by the Commissioner up until 30 June 2011:
Period | Lot | Registered Proprietor | Operator | Land tax exempt |
| 1099 |
|
| Yes |
| 1099 |
|
| Yes |
| 1099 |
|
| Yes |
| 200* |
|
| Yes |
* Lot 200 was subdivided into Lot[s] 805, 806 and 807 during 2010.
15 Mr Teissier submits that the table shows that the Commissioner has applied a practice which allowed the Lots, since 1994 in the case of Lot 1099, and since 2003 in the case of Lot 200 (Lots 805, 806 and 807), to be exempt from land tax notwithstanding that throughout this period the registered proprietor and the operator of the rural business were different entities.
The information and documents supplied by the Commissioner
16 On 31 October 2014, the Commissioner filed with the Tribunal the following documents and information:
(a) witness statement of Ms Edwina Tonkin which dealt with Commissioner's past practice documents in relation to exemptions granted under s 29(3) of the Taxation Act where the owner and user of the land are different entities or persons;
(b) witness statement of Mr Laurence Jenkin which dealt with the Commissioner's practices and interpretation in relation to exemptions granted under s 29(3) and concessions granted in relation to s 30 of the Taxation Act where the owner and user of the land were different entities or persons during the period 1 July 2010 to 30 June 2011;
(c) relevant extracts from the Land Tax Manuals relating to the Land Tax Assessment Act 1976 (pre2002) and the Taxation Act (post2002) which dealt with the Commissioner's past practices and interpretation in relation to rural business exemptions and concessions; and
(d) relevant extract from Land Tax Customer Service Team Training, September 2010, Telephone Checklist.
Mr Teissier's contentions
17 Mr Teissier contends that the original land tax assessments or concessions, forming the subject of the Commissioner's reassessments for the 2011/12 and 2012/13 assessment years, was based on a generally applied practice which allowed land to be exempt from land tax notwithstanding that the registered proprietor and the operator of the rural business were different entities. Mr Teissier contends that given the Commissioner's practice he cannot now make a reassessment.
18 Mr Teissier is not contending that the Commissioner's particular manner of dealing with Mr Teissier (and his associated persons or entities) since 1994 in itself constitutes a generally applied practice, but rather that, because of the history of exemptions and concessions granted to Mr Teissier over an extended period of time, an analysis of the Commissioner's generally applied practice over that period in relation to all taxpayers is required so as to inform the Tribunal of the Commissioner's generally applied practice.
19 Mr Teissier contends that a broad interpretation should be applied to s 16(5) of the Taxation Act to ensure that the intent and purpose of the section is given effect and meaning. He contends that by applying a narrow interpretation and limiting the period of the applicable generally applied practice to the time immediately, or shortly, before the assessment in question, renders the section open to unintended consequences. The Commissioner could effectively avoid the effective operation of s 16(5) by simply initiating a new practice during a particular assessment year (which is contrary to the generally applied practice which existed prior to that particular assessment year) and thereby rely on its new practice to overcome the prohibition which would otherwise have applied because of the Commissioner's past generally applied practice.
20 Mr Teissier states that his purpose for obtaining the requested information is twofold:
(a) firstly, to determine whether its was the Commissioner's generally applied practice in the years leading up to the Commissioner's reassessments for the 2011/12 and 2012/13 years of assessment to allow land to be exempt from land tax notwithstanding that the registered proprietor and the operator of the rural business were different entities; and
(b) secondly, to determine whether the original land tax assessments or concessions, forming the subject of the Commissioner's reassessments for the 2011/12 and 2012/13 assessment years, were based on a generally applied practice and, if so, whether the Commissioner should be prevented from making the reassessments.
The Commissioner's contentions
21 The Commissioner contends that only the interpretation or the Commissioner's practice at or around the date of Mr Lynn's assessment on 9 December 2010 (for Lots 805, 806 and 807) is relevant for the purposes of s 16(5) of the Taxation Act and that the Commissioner's practices or interpretations for earlier years are irrelevant. The Commissioner relies on a narrow interpretation of s 16(5) based on the inclusion of the words 'when the assessment was made'. The Commissioner further contends that the width of the request for documents is too onerous.
The history of s 16(5) of the Taxation Act
22 Section 18 of the Interpretation Act 1984 (WA) (the Interpretation Act) provides:
In the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object.
23 Section 19 of the Interpretation Act provides:
(1) Subject to subsection (3), in the interpretation of a provision of a written law, if any material not forming part of the written law is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the written law and the purpose or object underlying the written law; or
(b) to determine the meaning of the provision when
(i) the provision is ambiguous or obscure; or
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the written law and the purpose or object underlying the written law leads to a result that is manifestly absurd or is unreasonable.
…
(e) any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of Parliament by a Minister before the time when the provision was enacted; and
(f) the speech made to a House of Parliament by a Minister on the occasion of the moving of a motion that the Bill containing the provision be read a second time in that House; and
…
(h) any relevant material in any official record of proceedings in either House of Parliament.
(1) The Commissioner must make a reassessment
(a) if specifically required to do so under a taxation Act;
(b) if specifically required to do so under a direction of a court or tribunal hearing an appeal under section 41; or
(c) if a taxation Act provides for a rebate or refund of tax in particular circumstances, and the circumstances were not taken into account when the previous assessment was made.
…
(5) A decision by the Commissioner not to make a reassessment under subsection (2)(b) is non-reviewable.
(6) No action can be brought in a court to compel the Commissioner to make a reassessment if he or she is not required to do so by a taxation Act.
25 Clause 18 of the Bill provides:
(1) A reassessment supersedes the original assessment and any earlier reassessment.
(2) A reassessment may increase or decrease the amount originally assessed.
(3) However, if an assessment was based on
(a) an interpretation of the applicable law; or
(b) the Commissioner’s practice,
that was generally applied to instruments of that kind when the assessment was made, then the Commissioner cannot make a reassessment on the ground that the interpretation or practice is or was erroneous.
Clause 16: Reassessments
This clause provides the power for the Commissioner to make a reassessment of a tax liability. A reassessment is a a type of official assessment that is covered under the general meaning of assessment in clause 13(1).
…
Subclause (5) provides that any decision by the Commissioner to make or not make a reassessment at the request of a taxpayer under subclause (2)(b) is nonreviewable. This removes the power to object to that decision as a result of clause 34(2)(d).
Subclause (6) prevents action being brought in a court to compel the Commissioner to make a reassessment. Despite the fact that subclause (5) gives the Commissioner a nonreviewable right in relation to the making of a reassessment, this subclause is considered necessary to ensure that no action can be taken outside the assessment process.
27 Clause 18 of the explanatory memorandum provides:
Effect of reassessment
…
Subclause (3) provides that a reassessment cannot increase the previous assessment on the grounds that the interpretation of the law was incorrect when the previous assessment was made.
This limitation was inserted as a result of concerns raised by peak industry bodies that the Commissioner would seek to retrospectively apply an altered interpretation of the law to the taxpayer's detriment.
For example, if a particular type of document was routinely assessed by the Commissioner at nominal duty rates, and a court case or legal advice found the interpretation underlying that assessing practice to be incorrect, this provision would prevent the Commissioner from increasing the duty applied to every instrument assessed at nominal duty rates in the preceding 5 years.
This measure was seen to be an appropriate quid pro quo, as the Commissioner would not be required to refund tax in circumstances where the court decision or legal advice has the opposite effect (except in the defining case).
…
Subclause (5) provides that for the purposes of recovery proceedings, a reassessment does not invalidate any proceedings in relation to an amount that may have been assessed under an original assessment. It provides that an adjustment is to be made to the amount recovered under the original assessment proceedings to take account of the adjustment made by the reassessment. This ensures recovery action that is in progress does not have to be recommenced if a reassessment is made.
Subclause (6) similarly provides that an objection to the original assessment remains valid if a reassessment is made prior to the objection being determined. However, the original objection will only remain 'on foot' where the objection:
• is directly applicable to the reassessment; or
• relates to matters which are the same or similar in substance.
28 Clause 16 and 18 of the Bill were amended in the Legislative Council. The Honourable Nick Griffiths explained that:
The two amendments [to clause 16: Reassessments] of the supplementary notice paper collectively amount to an amendment to remove the nonreviewable decision in subclause (5). As a result, the power contained in clause 18(3) is proposed to be relocated into this clause. The next amendment on the supplementary notice paper to clause 18 is the last part of that operation. The amendment will mean that the rights of the Commissioner of State Revenue and the rights of the taxpayer will be the same in respect of the limitation on reassessing an assessment that was made on the basis of the interpretation of the applicable law or the commissioner's practice that applied at the time of the original assessment. This will ensure that the reassessment power cannot be used to retrospectively assess further tax or make a refund if the original assessment was based on law that was generally applied, including, for example, a court case that subsequently changed the law. I move
Page 8, line 21 To insert before 'The' the words 'Subject to subsection (5)'[.]
…
Amendment put and passed.
30 The Honourable Nick Griffiths then moved:
Pages 8, lines 29 and 30 To delete the lines and insert instead
(5) If an assessment is based on a particular interpretation of the applicable law or a particular practice of the Commissioner that was generally applied to assessments of that kind when the assessment was made, then the Commissioner cannot make a reassessment based on the ground that the interpretation or practice is or was erroneous.'
Amendment put and passed.
(Hansard, Western Australia, Parliamentary Debates, Legislative Council, 4 December 2002 (Hon Nick Griffiths))
Analysis
32 Section 16(5) of the Taxation Act refers to a particular interpretation or a particular practice that was generally applied 'to assessments of that kind when the assessment was made'.
33 A reassessment is, of necessity, retrospective.
34 Obviously, an assessment will have been made at a particular date. The ordinary meaning of 'when the assessment was made' is the time at which the assessment was made.
35 The Explanatory Memorandum and Hansard establish that 'the limitation was inserted as a result of concerns raised by peak industry bodies that the Commissioner would seek to retrospectively apply an altered interpretation of the law to the taxpayers' detriment'.
36 The Explanatory Memorandum and Hansard confirm that the ordinary meaning of the words, as set out above, applies.
37 In order to determine what was the interpretation of the applicable law at the time when the assessment was made, one refers to the decisions of courts and tribunals.
38 In order to determine the particular practice of the Commissioner, documents relevant to past practice will be relevant. In most cases that will be able to be determined from the practice that applies in the year, or the preceding financial year, that the assessment was made.
39 The concern expressed by Mr Teissier that the Commissioner could effectively avoid the effective operation of s 16(5) by simply initiating a new practice during a particular assessment year and thereby rely on its new practice to overcome the prohibition is not valid.
40 Section 16(5) of the Taxation Act does not prohibit a new practice that operates prospectively. What it prohibits is a retrospective effect.
41 The narrow interpretation of s 16(5) would not permit the Commissioner to avoid the operation of s 16(5). An interpretation of s 16(5) that focuses on when the assessment was made would prevent the Commissioner initiating a new practice to overcome the prohibition.
Width of documents sought would be onerous
42 It is unnecessary to set out the submissions pertaining to the width of the documents sought by Mr Teissier in these reasons. Suffice to say that it would be an expensive and timeconsuming exercise on the part of the Commissioner.
43 I note, in particular, that the process undertaken for the period 1 July 2010 to 30 June 2011, which formed the substance of Mr Laurence Jenkin's witness statement, took over seven weeks to identify and collate. The source documents located, copied and redacted occupy approximately four lever arch files.
44 In addition, much of the requested information is unavailable.
45 In order that the objectives of the Tribunal, as set out in s 9 of the SAT Act are met, there must be a balance between the documents sought and the cost of obtaining those documents.
46 Given the Tribunal's interpretation of s 16(5) of the Taxation Act and the time and cost of obtaining the documents, the order sought by Mr Teissier is too onerous.
Future conduct of the application
47 In the light of the Tribunal's findings, the parties should confer in an attempt to reach agreement on a minute of orders.
48 In any event, the matter will be listed in the President's list on 17 February 2015 for a further directions hearing.
Order
1. This matter is listed for a further directions hearing at 10 am on 17 February 2015.
- I certify that this and the preceding [48] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J C CURTHOYS, PRESIDENT
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