Tasty Chicks Pty Limited v Chief Commissioner of State Revenue [2011] HCA 41

HIGH COURT OF AUSTRALIA

FRENCH CJ,

GUMMOW, CRENNAN, KIEFEL AND BELL JJ

TASTY CHICKS PTY LIMITED & ORS APPELLANTS

AND

CHIEF COMMISSIONER OF STATE REVENUE RESPONDENT

Tasty Chicks Pty Limited v Chief Commissioner of State Revenue

[2011] HCA 41

5 October 2011

S218/2011

ORDER

1. Appeal allowed.

2. Set aside the order of the Court of Appeal of the Supreme Court of New South Wales dated 4 January 2011.

3. Remit the matter to the Court of Appeal of the Supreme Court of New South Wales for further hearing in accordance with the reasons for judgment of this Court.

4. The costs to date in the Court of Appeal of the Supreme Court of New South Wales be determined by that Court on its final disposition of the appeal.

5. The respondent pay the appellants' costs in this Court.

On appeal from the Supreme Court of New South Wales

Representation

C J Bevan with A Tsekouras for the appellants (instructed by Legal Ease Lawyers)

G C Lindsay SC with I C Latham for the respondent (instructed by Crown Solicitor (NSW))

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Tasty Chicks Pty Limited v Chief Commissioner of State Revenue

State taxation – Pay-roll tax – Taxpayer dissatisfied with Chief Commissioner's determination of objection to assessments may apply to Supreme Court for "review" pursuant to Taxation Administration Act 1996 (NSW), s 97.

Administrative law – Courts – Original jurisdiction upon statutory "appeal" and "review" in respect of administrative decision – Nature, power and duties of court in exercise of that jurisdiction.

Words and phrases – "appeal", "review".

Taxation Administration Act 1996 (NSW), ss 97, 101.

Pay-roll Tax Act 1971 (NSW), Pt 4A.

1. FRENCH CJ, GUMMOW, CRENNAN, KIEFEL AND BELL JJ. This appeal from the Court of Appeal of the Supreme Court of New South Wales (Giles and Macfarlan JJA and Handley AJA)[1] arises from a dispute concerning assessments of the liability of the appellants to pay‑roll tax, but turns upon the construction of the statutory provisions governing objections to assessments, and "review" thereof by the Supreme Court. 2. The central provisions are found in Pt 10 of the Taxation Administration Act 1996 (NSW) ("the Administration Act"). Division 1 (ss 86‑95) of Pt 10 is headed "Objections" and Div 2 (ss 96‑103A) is headed "Reviews". Except as provided by Div 2 of Pt 10, no court or tribunal or other body or person has "jurisdiction or power" to consider any question concerning the determination of any objection under Div 1 of Pt 10 (s 103A(1)). 3. Section 97 provides that a taxpayer may apply to the Supreme Court of New South Wales for a "review" if dissatisfied with the determination by the respondent, the Chief Commissioner of State Revenue ("the Chief Commissioner") of an objection by the taxpayer under Div 1. A taxpayer may also apply under s 96 to the Administrative Decisions Tribunal ("the ADT") for a "review" in respect of a decision of the Chief Commissioner. The ADT is established by s 11 of the Administrative Decisions Tribunal Act 1997 (NSW) ("the ADT Act"). However, if the taxpayer applies to the ADT pursuant to s 96 of the Administration Act, the taxpayer cannot apply to the Supreme Court in respect of the same decision (s 97(2)). It will be apparent that in Pt 10 Div 2 the term "review" is used with respect to proceedings both in the ADT and in the Supreme Court. 4. The office of the Chief Commissioner is created by s 60 of the Administration Act; s 61 gives to that officer the general administration of the State taxation laws identified in s 4. 5. An "appeal" from an administrative decision to a court is the creature of statute and it confers original, not appellate, jurisdiction[2]. Further, where a jurisdiction called an "appeal" is enlivened, it is essential to identify its nature and the duties and power of the court in the exercise of that jurisdiction[3]. The term "review" presents similar considerations. It takes its meaning from the context in which it appears[4]. It may be used by the statute in question to empower decision‑making by an administrative body, or to confer a species of original jurisdiction on a court[5]. If the latter, again it will be necessary to identify the nature of the "review" and the duties and powers of the court in the exercise of that jurisdiction. 6. These distinctions are essential to the resolution of the issues presented on this appeal. 7. The fourth and fifth appellants, Mr and Mrs Souris, conducted in partnership a chicken meat processing business ("the Firm"). The third appellant ("Souris Holdings") owned premises portions of which were separately let to the Firm, the first appellant ("Tasty Chicks") and the second appellant ("Angelo Transport"). The Chief Commissioner "grouped" the appellants for the purposes of the Pay‑roll Tax Act 1971 (NSW) ("the Pay-roll Tax Act")[6] and the Administration Act. Mr and Mrs Souris have not challenged the "grouping" of the Firm and Souris Holdings under Pt 4A of the Pay‑roll Tax Act and have not sought their "de‑grouping" for pay‑roll tax purposes. What has been challenged is the refusal by the Chief Commissioner to "de‑group" Tasty Chicks, Angelo Transport and the Firm. 8. In the Equity Division of the Supreme Court, Gzell J[7] set aside the disallowance by the Chief Commissioner of objections made by the appellants against assessments under the Pay‑roll Tax Act and the Administration Act for six years, being the years ending 30 June 2002 to 30 June 2007 inclusive. The Chief Commissioner had applied the "grouping" provisions in Pt 4A of the Pay‑roll Tax Act and had refused to apply the "de‑grouping" provisions. Prima facie each taxpayer had the benefit of a pay‑roll tax threshold of $600,000 which applied in each of the relevant years. The "grouping" provisions were designed to counter tax avoidance through the splitting of business activities by the use of additional entities, each attracting a threshold. The "de‑grouping" provisions were available for application by the Chief Commissioner upon determination, in broad terms, that it would be unreasonable to apply the "grouping" provisions. 9. The assessments fell within three periods, and the terms of Pt 4A varied between the first period and the other two periods. With respect to the first period, ending 30 June 2003, the primary judge held that the Chief Commissioner had not been entitled to apply the "grouping" provisions to the Firm, Tasty Chicks and Angelo Transport and so did not need to consider whether the "de‑grouping" provisions should have been applied to all or any of these appellants. With regard to the second and third periods, ending respectively 30 June 2005 and 30 June 2007, no complaint was made of the "grouping" of these appellants. Rather, the proceedings before the primary judge turned upon the application of the "de‑grouping" provisions to Tasty Chicks and Angelo Transport. His Honour held that he was entitled to re‑exercise the powers of the Chief Commissioner under those provisions and, in doing so, replaced the decision of the Chief Commissioner with a decision that on and after 1 July 2003 Tasty Chicks and Angelo Transport were not members of a group with the Firm. 10. The Court of Appeal allowed the appeal by the Chief Commissioner and set aside the judgment and orders of Gzell J. 11. In delivering the leading judgment, Handley AJA indicated that it was necessary for the Court of Appeal to determine at the outset the nature of the proceeding in the Supreme Court under s 97 of the Administration Act. However, with reference to s 97, his Honour used the term "appeal" rather than "review". His Honour concluded that to this "appeal" there applied the analysis by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation[8]. Handley AJA added[9]: