TOWNROW and COMMISSIONER OF STATE REVENUE
[2019] WASAT 28
•15 MAY 2019
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: TAXATION ADMINISTRATION ACT 2003 (WA)
DUTIES ACT 2008 (WA)
CITATION: TOWNROW and COMMISSIONER OF STATE REVENUE [2019] WASAT 28
MEMBER: JUDGE T SHARP, PRESIDENT (ACTING)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 15 MAY 2019
FILE NO/S: CC 108 of 2019
BETWEEN: MARK TOWNROW
Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Duties assessment - Purchase of business - Dutiable transaction - Objection - Late application to Tribunal - Penalty - Extensive delay - Extension of time
Legislation:
Duties Act 2008 (WA), s 10, s 11(1)(b), s 15(d), s 19(1), s 20, s 23
State Administrative Tribunal Act 2004 (WA), 60(2)
State Administrative Tribunal Rules 2004 (WA), r 10
Taxation Administration Act 2003 (WA), s 40, s 40(1), s 42(1)
Result:
Application for extension of time refused
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| Respondent | : | Ms R Panetta |
Solicitors:
| Applicant | : | N/A |
| Respondent | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Burns v Corbett [2018] HCA 15
CSBP Limited and City of Kwinana [2015] WASAT 42
Curlewis and City of Albany (2011) 77 SR (WA) 87
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Hartwig and City of Canning [2008] WASAT 243
Summergreene v Parker (1950) 80 CLR 304
van der Feltz and City of Vincent [2017] WASAT 133
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
On 11 November 2013, an agreement to purchase a business (Agreement) was entered into between the applicant as purchaser and Dinyar Marfatia and Meheroo Marfatia as vendor. The Agreement stated that the applicant as purchaser was acting as agent for an entity yet to be incorporated.
On 28 October 2015, the Agreement was sent to the respondent for the assessment of duty.
A duties assessment notice was issued in relation to the Agreement on 28 June 2017. Duty was assessed on the Agreement, payable by the applicant, and, because the Agreement was lodged outside the timeframe set out in s 23 of the Duties Act 2008 (WA) (Duties Act), a late lodgement penalty was applied.
Payment of the duty and the late lodgement penalty had not been received by the due date and so on 8 August 2017, a notice of penalty tax for late payment was issued by the respondent.
In a letter dated 18 September 2017 from the respondent to the applicant, the applicant was advised to forward payment of the outstanding amount in order to prevent recovery action. On 13 October 2017, recovery action was commenced.
The applicant on 9 January 2018 lodged an objection to the duties assessment notice. An extension of time within which to lodge the objection had been earlier granted, on 4 January 2018, to the applicant, by the respondent.
On 7 March 2018, the respondent disallowed the objection and on 22 January 2019 the applicant made an application to the Tribunal under s 40 of the Taxation Administration Act 2003 (WA) (TA Act) for a review of the respondent's decision upon objection.
Proceedings in the Tribunal
As mentioned, the applicant's application is dated 22 January 2019 and was filed with the Tribunal on that date.
On 6 February 2019, the applicant filed a bundle of documents upon which he intended to rely in support of his application (Applicant's Bundle).
At the first directions hearing on 22 February 2019, two preliminary issues were raised by the respondent, namely whether the applicant should be allowed to make his application to the Tribunal out of time and whether in any event the Tribunal had jurisdiction to hear the matter. The directions hearing was adjourned to 5 March 2019 to allow the applicant time to make submissions on the first of those issues. At the directions hearing on 5 March 2019, the time limit for those submissions was extended to 12 March 2019.
On 19 March 2019, the respondent was ordered to file her responsive submissions within 14 days and on receipt of those submissions the Tribunal decided pursuant to s 60(2) of the StateAdministrative Tribunal Act 2004 (WA) (SAT Act) that it would determine the issue of whether or not the applicant should be allowed to make his application out of time entirely on the basis of the documents and submissions filed and, if necessary, to determine the jurisdiction issue. The Tribunal's decision on those points was reserved on 22 March 2019.
Documents before the Tribunal
Following the aforementioned filing of the Applicant's Bundle by the applicant on 6 February 2019, the respondent filed her submissions opposing the giving of an extension of time (RS) on 28 February 2019. On the same date, the respondent filed her submissions on the jurisdiction issue.
The applicant filed his submissions in support of the Tribunal allowing him an extension of time (AS) on 7 March 2019 and the respondent filed her responsive submissions on 22 March 2019.
Statutory framework
Section 40(1) of the TA Act provides:
A person dissatisfied with the Commissioner's decision on an objection … may apply to the State Administrative Tribunal for a review of the decision.
Section 42(1) of the TA Act provides:
An application to the State Administrative Tribunal for a review of a decision must be made within 60 days after notice of the decision is served on the taxpayer.
Rule 10 of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) provides as follows:
(1)The Tribunal, on application by any applicant, referring person or on its own initiative, may extend any time fixed under the Act, an enabling Act or these rules for the commencement of a proceeding.
(2)Under this rule, the Tribunal may extend time even if the time fixed expired before an application for an extension was made or the Tribunal on its own initiative considered extending the time.
Application for extension of time principles to be applied
The applicant for an extension of time bears the onus of satisfying the Tribunal to exercise its discretion to extend time in the circumstances of the case; Curlewis and City of Albany (2011) 77 SR (WA) 87 (Curlewis) at [69]. Each case requires careful consideration and balancing of all relevant circumstances and '[c]are must be taken in referring to other exercises of discretion in other cases, because, necessarily, circumstances will vary from case to case': Curlewis at [69].
The discretion to extend time under r 10 of the SAT Rules is broad and is guided by at least four major factors:
1)the length of delay;
2)the reasons for delay;
3)whether there is an arguable case for review; and
4)whether the extension would cause prejudice;
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 (Esther) at 198.
However, the range of considerations in relation to whether to extend time is not closed and other considerations may be relevant in the circumstances of a particular case; Esther at 198; Curlewis at [69].
In CSBP Limited and City of Kwinana [2015] WASAT 42 at [55], the Tribunal stated that the discretion to extend time under r 10 of the SAT Rules:
'can only be exercised in favour of the applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether there would be an injustice it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for an extension of time'.
(Citation omitted)
Length of delay
The respondent's decision upon objection is dated 7 March 2018 and was served on the applicant on the same date; RS para 22. Under s 42(1) of the TA Act, an application to the Tribunal for a review of that decision must be made within 60 days after the notice of the decision was served on the applicant.
Accordingly, the application to the Tribunal should have been made on or before 6 May 2018.
As I have already mentioned, the application to the Tribunal was received on 22 January 2019. Accordingly, the application was made around 321 days after the date of the decision upon objection and therefore some 261 days (or over eight months) after the time allowed.
A delay of three or four months has been described by the Tribunal as 'considerable'; van der Feltz and City of Vincent [2017] WASAT 133 and a length of five months has been described as 'clearly significant' by the Tribunal; Hartwig and City of Canning [2008] WASAT 243.
The Tribunal considers that, by any calculation, the delay in making this application by the applicant must be regarded as extensive.
Reasons for the delay
The applicant confirms that he received the respondent's decision upon objection on 8 December 2017; AS at para 22.
It is difficult to draw from the applicant's submissions, the applicant's reasons for lodging his application with the Tribunal out of time. He says that he is 'a selfrepresented party' and that he does not have the financial means for legal representation. He also says that he has no legal qualifications or experience.
I do not consider that not having qualifications in law or legal advice is good reason for the delay. In any event, I note that in correspondence with the respondent, the applicant refers to his lawyer (email to the respondent dated 15 December 2017, email to the respondent dated 30 December 2017, both attached to AS).
The applicant also makes mention of the fact that he now resides in Queensland and has been 'very busy in the process of opening two retail shops in Queensland and Western Australia'; AS at para 14.
The applicant says that he was unaware that upon receipt of the respondent's decision, his 'only course of action was to appeal to the State Administrative Tribunal'; AS at para 23(f).
However, the respondent's decision upon objection dated 7 March 2018 (included in the Applicant's Bundle) contains a section at page 5 headed 'Right of Review'. That section is as follows:
If it is considered that this decision is incorrect, you have the right under sections 40 and 42 of the [TA Act] to apply to the State Administrative Tribunal, for a review of the decision.
If an application is to be made to the State Administrative Tribunal, it must be made within 60 days of service of the notice of the objection decision and a copy of the application must be forwarded to the Commissioner.
The Tribunal accordingly finds that the applicant does not have any reasonable excuse for making his application to the Tribunal outside of the 60 days allowed under the TA Act.
Arguable case for review
Under s 10 of the Duties Act, duty is imposed on dutiable transactions.
An agreement for the transfer of dutiable property is a 'dutiable transaction'; s 11(1)(b) of the Duties Act.
A business asset in Western Australia is 'dutiable property'; s 15(d) of the Duties Act.
Liability for duty on an agreement for the transfer of dutiable property arises when the agreement is executed; s 19(1) of the Duties Act.
The purchaser, the person named as such in the contract, is the liable party for the duty; s 20 of the Duties Act.
A copy of the Agreement has not been provided to the Tribunal. However, it is not in contention between the parties that the purchaser under the Agreement is the applicant 'as agent for an entity yet to be incorporated for the purpose of purchasing this business'; RS at para 30(j), Annexure A to AS (copy of email dated 23 October 2017 from the applicant to Mr Farrell of the Office of State Revenue) (23 October 2017 email).
A company yet to be incorporated and thus not in existence at the date of execution of a contract cannot said to be the purchaser. In such a case, that contract is said to be between the vendor and the agent as principal; Summergreene v Parker (1950) 80 CLR 304 at 318.
The applicant says that the reference in the Agreement to the 'entity yet to be incorporated for the purpose of purchasing this business' was Pembertown Accounting Pty Ltd; AS para 27 and 23 October 2017 email.
However, Pembertown Accounting Pty Ltd was incorporated on 27 November 2012 and therefore could not be described as 'an entity yet to be incorporated for the purpose of purchasing this business' at the date of the agreement, 11 November 2013.
It is therefore unlikely that the applicant's argument that he was acting as agent of Pembertown Accounting Pty Ltd would be successful and that it is more likely that the Tribunal would find that the applicant had entered into the Agreement as principal.
Prejudice
The respondent does not contend that an extension of time would result in prejudice to it. I therefore conclude that there would not be any prejudice to any person if an extension of time were granted in the circumstances of this case.
Other relevant factors
The applicant has not raised further considerations which he considers should be taken into account.
In Curlewis at [107], the Tribunal decided that some consideration should be given as to whether or not the applicant was given notice of his or her right to seek review. However, I have already dealt with this point and found that the applicant was in fact given notice of this right of review.
There are no other considerations which I consider should be taken into account.
Exercise of discretion
In summary, the delay on the part of the applicant in submitting his application for review is extensive and he has provided no acceptable reason for that delay.
I also consider that the applicant has been given ample notice of his right to seek a review from the Tribunal and the time limit for so doing.
For the reasons given, I am not satisfied that the applicant has an arguable case. It follows that I am not satisfied that it is in the interests of justice to grant the applicant an extension of time for making his application for review of the respondent's decision upon objection.
Accordingly, I will order that the applicant's application for an extension of time to commence the review proceedings is refused and that therefore the applicant's application dated 22 January 2019 is dismissed.
Jurisdiction to hear the substantive application
On 28 February 2018, the respondent also filed an application to the Tribunal for the determination of another preliminary issue, namely whether the Tribunal has jurisdiction to deal with this matter in the light of the decision in Burns v Corbett [2018] HCA 15.
The issue raised by the respondent is, in essence, that the applicant resides in the State of Queensland and is therefore a resident of a State other than the State of Western Australia.
The respondent considers that the proceeding arising from the applicant's application is a 'matter' for the purposes of s 75(iv) of the Constitution and that the Tribunal, not being a 'Court of a State' for the purposes of that section has no jurisdiction to hear this matter.
In my view, these issues do not in any way preclude the Tribunal from making a decision to not exercise its discretion under r 10 of the SAT Rules. Having decided that the application for an extension of time for the applicant to lodge his application for review is refused, there is no need for the Tribunal to deal with this issue.
Orders
For these reasons, I make the following orders:
1.The application under r 10 of the State Administrative Tribunal Rules 2004 (WA) for an extension of time in which to seek review of the respondent's decision to disallow the applicant's objection is refused.
2.The applicant's application for review dated 22 January 2019 is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
JUDGE T SHARP, PRESIDENT (ACTING)
15 MAY 2019
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