Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Harbourlights – Strata Plan 32515 v Chief Commissioner of State Revenue [2023] NSWCATAD 172 Hearing dates: 6 March 2023 Date of orders: 30 June 2023 Decision date: 30 June 2023 Jurisdiction: Administrative and Equal Opportunity Division Before: E Bishop SC, Senior Member Decision: The Assessments are confirmed Catchwords: TAXATION AND DUTIES — Parking Space Levy — exemption — whether parking spaces "set aside exclusively" for exempt and non-exempt purposes —remission of interest — market rate component — premium rate component Legislation Cited: Administrative Decisions Review Act 1997 (NSW), ss 9, 58, 63 Congestion Levy Act 2005 (Vic), ss 3, 17(1) Parking Space Levy Act 2009 (NSW), ss 3, 4, 7, 8, 9, 12, 14 Parking Space Levy Regulation 2009 (NSW), regs 3, 7, 8, 9, Sch 1 Parking Space Levy Regulation 2019 (NSW), regs 4, 8, 9, 10, Sch 1 Taxation Administration Act 1996 (NSW), ss 3, 21, 22, 25, 96, 100(3), 101(a) Cases Cited: Adams Bidco Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 702 at [163] Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107 Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue; International Hotel Services Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657 Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19 Christopher CK Soo Pty Ltd & J Yap v Chief Commissioner of State Revenue [2017] NSWCATAD 281 Commissioner of Taxation v Ryan (2000) 201 CLR 109 Cornish Investments Ply Limited v Chief Commissioner of State Revenue [2013] NSWADTAP 25 Dang & Nguyen Pty Ltd v Chief Commissioner of State Revenue [2020] NSWCATAD 120 Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 Federal Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503; [2012] HCA 55 Lease A Leaf Property Pty Limited v Chief Commissioner of State Revenue [2011] NSWADTAP 41 Levitch Design Associates Pty Ltd atf Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215 RVO Enterprises Pty Ltd v Chief Commissioner of State Revenue [2004] NSWADT 64 Secure Parking Pty Ltd v Commissioner of State Revenue [2016] VSC 344 Singh v Chief Commissioner of State Revenue [2016] NSWCATAD 9 Sterling House 88 Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 279 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 Trust Co of Australia Ltd v Chief Commissioner of State Revenue [2002] NSWADT 21 Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773 Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2020) 282 FCR 1 Texts Cited: Revenue NSW, CPN 024: Interest and penalty tax guidelines (June 2022) Category: Principal judgment Parties: Harbourlights – Strata Plan 32515 (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: Applicant (Self-Represented) Crown Solicitor (Respondent) File Number(s): 2022/00274551 Publication restriction: Nil REASONS FOR DECISION Background 1. Harbourlights – Strata Plan 32515 (the applicant) is the owner of a mixed commercial and residential building located in Milsons Point (the Property) which comprises 7 commercial suites, 33 residential units and parking spaces in a secure underground parking area, including 5 which are the subject of this dispute. 2. Following enquiries by the Chief Commissioner of State Revenue (the respondent) about the parking spaces, on 14 August 2020 the respondent first issued a Parking Space Levy Assessment Notice for the period 1 July 2020 to 30 June 2021 with a nil amount payable. Almost a year later, on 10 August 2021, the respondent advised the previous assessment had issued in error and subsequently issued assessments for the period 1 July 2020 to 30 June 2021 and 1 July 2021 to 30 June 2022 (with amounts of $7,780.19 and $7,620 payable for each respective year). 3. The respondent subsequently conducted an audit of the applicant's parking space levy liability which ultimately culminated in the respondent issuing Parking Space Levy Assessment Notices (Assessments) for each of the financial years ending 30 June 2018, 30 June 2019, 30 June 2020, 30 June 2021 and 30 June 2022 (relevant years). The Assessments also included market rate component and premium rate component interest. 4. The applicant objected to the Assessments and on 28 July 2022 the respondent partially allowed the objection by reducing the number of parking spaces to which the levy applied from 10 to 7. The applicant now seeks administrative review in the Tribunal. 5. Prior to the hearing the respondent determined to remit the premium rate of interest for the period 2 April 2020 to 10 August 2021. Further, at the hearing, the respondent stated that two of the seven parking spaces previously in dispute were now exempt on the basis of those two spaces being casual parking spaces. Consequently, five parking spaces remain subject to the levy. Issues 1. The central issues for determination are: 1. whether the parking spaces are exempt from the levy; and 2. whether the interest assessed should be remitted. 1. For the reasons set out below, I am satisfied that the relevant parking spaces are not exempt from the levy and further remission is not warranted. Jurisdiction 1. The Tribunal's jurisdiction to review the Assessments is pursuant to the Taxation Administration Act 1996 (NSW), s 96 (TA Act) and the Administrative Decisions Review Act 1997 (NSW), s 9 (ADR Act). It is the decision to issue the Assessment, not the decision on the objection, which is the subject of the review: see Singh v Chief Commissioner of State Revenue [2016] NSWCATAD 9 at [10]-[13] and the authorities there cited. 2. In conducting that review, the Tribunal is required to determine the correct and preferable decision having regard to the materials before it and the applicable law: ADR Act, s 63. 3. The material before the Tribunal comprises that relied on by the applicant and the respondent as follows: 1. The applicant relies on written submissions filed 30 November 2022 and 17 February 2023; a copy of the relevant parts of the By-laws of the applicant; photographs of the underground car parking area; various correspondence with the respondent; correspondence from Laing & Simmons; correspondence and documents relating to the development application for the Property; 21 statutory declarations from residents of the Property; a final summary document dated 5 March 2023. 2. The respondent relies on submissions filed 6 March 2023 together with a tender bundle of documents; and a revised bundle of documents pursuant to the s 58 ADR Act filed on 11 November 2022. 1. The applicable law includes the TA Act, the Parking Space Levy Act 2009 (NSW) (PSL Act), Parking Space Levy Regulation 2009 (NSW) (2009 Regulation) for levies imposed in the financial years ending 30 June 2018 and 2019; and Parking Space Levy Regulation 2019 (NSW) (2019 Regulation) for levies imposed for years ending 30 June 2020, 2021, and 2022 and case law relevant to the operation of these enactments. Legislation Parking Space Levy Act 2009 (NSW) 1. The PSL Act, s 3 sets out the object of the legislation as follows: 3 Object The object of this Act is to discourage car use in leviable districts by imposing a levy on parking spaces (including parking spaces in parking stations), and by using the revenue to encourage the use of public transport (in particular, public transport to and from, or within, those districts). 1. Section 8 of the PSL Act imposes a parking levy on leviable premises. It provides: 8 Imposition of parking space levy (1) A parking space levy is imposed on 1 July each year on all leviable premises. (2) The amount of the levy for any leviable premises is the amount calculated in respect of the premises in accordance with the regulations. (3) A person who, as at 1 July in any year, is the owner of leviable premises is liable for payment of the levy for the premises. (4) If the premises are owned by 2 or more persons, the owners are jointly and severally liable for payment of the levy. (5) The levy is to be paid to the Chief Commissioner. 6) The Chief Commissioner may retain from the levies paid under this section such commission (if any) as may be agreed on between the Chief Commissioner and the Minister. (7) A tax default does not occur for the purposes of the Taxation Administration Act 1996 if the levy is paid by 1 September in the year in which liability for payment of the levy arises. Note— If a tax default occurs, interest and penalty tax may be charged under the Taxation Administration Act 1996. 1. Section 7 of the PSL Act provides the following definition for leviable premises: 7 Leviable premises (1) For the purposes of this Act, premises are leviable premises in any financial year if, at any time during the previous financial year— (a) the premises were located in a leviable district, and (b) one or more parking spaces were situated on the premises. (2) Despite subsection (1), premises are not leviable premises if they are declared by the regulations not to be leviable premises. 1. The PSL Act, s 4 provides definitions for relevant terms in the legislation as follows: 1. "leviable district" means a district established by the regulations as a leviable district; 2. "parking space" means a space that is situated on premises in a leviable district, being a space: 1. that is used, or set aside, for the parking of motor vehicles, or 2. that is declared by the regulations to be a parking space for the purposes of this Act; 1. "premises" includes any land and any building; and 2. "owner", in relation to leviable premises, includes any person who jointly or severally, whether at law or in equity, is entitled to the premises for any estate of freehold in possession. 1. As at 1 July in any year, the owner of leviable premises must furnish a return to the respondent in relation to parking spaces on the Property: PSL Act, s 9. 2. Section 12 of the PSL Act provides that the respondent may publish Guidelines, as follows: 12 Chief Commissioner's guidelines (1) The Chief Commissioner may, by order published in the Gazette, establish guidelines, not inconsistent with this Act or the regulations, as to— (a) what does, and what does not, constitute a parking space in any particular circumstances, and (b) whether, in particular circumstances, a parking space is, or is not, to be exempted from the calculation of the levy in respect of any leviable premises. (2) Such an order may only be made with the approval of the Minister. (3) In any proceedings in which a matter referred to in subsection (1) (a) or (b) is called into question, a court must have regard to any such guideline for the purpose of determining the question. (emphasis added) 1. Section 14 of the PSL Act provides for regulations to be made to make provision for various matters, which include the manner of calculation of parking spaces; the levy amount and the manner of calculation; and the circumstances in which parking spaces may be exempted from the calculation of the levy. 2. As noted above, the relevant regulations pursuant to PSL Act, s 14 are the 2009 Regulation for levies imposed in the financial years ending 30 June 2018 and 2019; and 2019 Regulation for levies imposed for years ending 30 June 2020, 2021, and 2022. The 2009 Regulation was repealed and replaced by the 2019 Regulation. Parking Space Levy Regulation 2009 (NSW) and Parking Space Levy Regulation 2019 (NSW) 1. The 2009 Regulation, reg 3 provides that "Each district referred to in Schedule 1 is established as a leviable district for the purposes of the Act". 2. Schedule 1 provides that the identified part of the City of Sydney is a Category 1 area, and exemptions on leviable premises are covered under reg 7 of the 2009 Regulation as follows: 7 Exempt parking spaces (s 14) (1) A parking space on leviable premises in a Category 1 or Category 2 area is an exempt parking space while it is set aside exclusively for one or more of the following purposes: (a) the parking of bicycles or motor cycles, (b) the parking of motor vehicles by persons who reside on the premises or on adjoining premises, (c) the parking of motor vehicles by persons who hold mobility parking scheme authorities, (d) the parking of motor vehicles for the purpose of loading or unloading goods or passengers, but not if vehicles are permitted to park in the space otherwise than while goods or passengers are being loaded or unloaded, (e) the parking of motor vehicles by persons who, on a casual basis, provide services to the premises, other than vehicles used by employees, contractors or consultants whose usual place of work is on the premises, (f) the parking (without charge) of a mobile crane, a forklift truck, a tractor or a front-end loader, (g) the parking (without charge) of an ambulance, fire brigade motor vehicle or police motor vehicle, but only if the parking space is the one used for garaging the vehicle overnight, (h) the parking (without charge) of a motor vehicle used only for the carrying out of deliveries or the provision of services, but only if: (i) the parking space is the one used for garaging the vehicle overnight, and (ii) the owner of the vehicle is also the owner or occupier of the premises, (i) in the case of premises owned or occupied by the council of the local government area, the parking (without charge) of motor vehicles by persons other than officers or employees of the council, (j) in the case of premises owned or occupied by: (i) a religious body or religious organisation in respect of which a proclamation is in force under section 26 of the Marriage Act 1961 of the Commonwealth, or (ii) a religious body within a denomination in respect of which such a proclamation is in force, or (iii) a public charity or public benevolent institution, the parking (without charge) of any motor vehicle. (2) For the purposes of subclause (1) (b), the several lots in a strata scheme under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 are taken to adjoin each other, regardless of their location. (3) A parking space on leviable premises in a Category 1 or Category 2 area is an exempt parking space while it is an unused casual parking space or an unleased tenant's parking space. (4) For the purposes of subclause (3): (a) a parking space is an unused casual parking space if it is set aside for use by the public for the parking of motor vehicles but remains unused for that purpose, and (b) a parking space is an unleased tenant's parking space if it is unavailable for use as a parking space except under a lease or licence under which a tenant of the premises in which it is located has exclusive use of it and no such lease or licence is in force. (5) A parking space on leviable premises in a Category 2 area is an exempt parking space while it is set aside exclusively for one or more of the following purposes: (a) the parking of motor vehicles by customers of a retail shop, (b) the parking of motor vehicles on the shopping centres referred to in Schedule 2 by persons employed at a retail shop on those premises, (c) the parking of motor vehicles by guests or customers of a hotel or motel, (d) the parking of motor vehicles by members and guests of members of a registered club, (e) the parking of motor vehicles by customers of a restaurant, (f) the parking of motor vehicles by patients of a medical centre, (g) the parking of motor vehicles by customers of a car sales establishment, car servicing or repair centre, or car wash, (h) the parking of motor vehicles by clients and guests of clients of a funeral parlour, (i) the parking of motor vehicles that are displayed or stored on the premises for the purpose of their being offered for sale or hire. 1. Regulations 8 and 9 of the 2009 Regulation, and regs 9 and 10 of the 2019 Regulation provide for the calculation of the amount of the levy. 2. The 2019 Regulation, reg 4 provides that "Each district referred to in Schedule 1 is established as a leviable district for the purposes of the Act". 3. Schedule 1 provides that the identified part of the City of Sydney is a Category 1 area, and exemptions on leviable premises are now covered under reg 8 of the more recent 2019 Regulation as follows: 8 Exempt parking spaces (section 14) (1) A parking space on leviable premises in a Category 1 or Category 2 area is an exempt parking space while it is set aside exclusively for one or more of the following purposes— (a) the parking of bicycles or motor cycles, (b) the parking of motor vehicles by persons who reside on the premises or on adjoining premises, (c) the parking of motor vehicles by persons who hold mobility parking scheme authorities, (d) the parking of motor vehicles for the purpose of loading or unloading goods or passengers, but not if vehicles are permitted to park in the space otherwise than while goods or passengers are being loaded or unloaded, (e) the parking of motor vehicles by persons who, on a casual basis, provide services to the premises, other than vehicles used by employees, contractors or consultants whose usual place of work is on the premises, (f) the parking (without charge) of a mobile crane, a forklift truck, a tractor or a front-end loader, (g) the parking (without charge) of an ambulance, fire brigade motor vehicle or police motor vehicle, but only if the parking space is the one used for garaging the vehicle overnight, (h) the parking (without charge) of a motor vehicle used only for the carrying out of deliveries or the provision of services, but only if— (i) the parking space is the one used for garaging the vehicle overnight, and (ii) the owner of the vehicle is also the owner or occupier of the premises, (i) in the case of premises owned or occupied by the council of the local government area, the parking (without charge) of motor vehicles by persons other than officers or employees of the council, (2) For the purposes of subclause (1) (b), the several lots in a strata scheme under the Strata Schemes Development Act 2015 are taken to adjoin each other, regardless of their location. (3) A parking space on leviable premises in a Category 1 or Category 2 area is an exempt parking space while it is an unused casual parking space or an unleased tenant's parking space. (4) For the purposes of subclause (3)— (a) a parking space is an unused casual parking space if it is set aside for use by the public for the parking of motor vehicles but remains unused for that purpose, and (b) a parking space is an unleased tenant's parking space if it is unavailable for use as a parking space except under a lease or licence under which a tenant of the premises in which it is located has exclusive use of it and no such lease or licence is in force. (5) A parking space on leviable premises in a Category 2 area is an exempt parking space while it is set aside exclusively for one or more of the following purposes— (a) the parking of motor vehicles by customers of a retail shop, (b) the parking of motor vehicles on the shopping centres referred to in Schedule 2 by persons employed at a retail shop on those premises, (c) the parking of motor vehicles by guests or customers of a hotel or motel, (d) the parking of motor vehicles by members and guests of members of a registered club, (e) the parking of motor vehicles by customers of a restaurant, (f) the parking of motor vehicles by patients of a medical centre, (g) the parking of motor vehicles by customers of a car sales establishment, car servicing or repair centre, or car wash, (h) the parking of motor vehicles by clients and guests of clients of a funeral parlour, (i) the parking of motor vehicles that are displayed or stored on the premises for the purpose of their being offered for sale or hire. (6) In this clause— medical centre means premises that are used for the purpose of providing health services (including preventative care, diagnosis, medical or surgical treatment, counselling or alternative therapies) to out-patients only, where such services are principally provided by health care professionals. It may include the ancillary provision of other health services. retail shop has the same meaning as in the Retail Leases Act 1994. Taxation Administration Act 1996 (NSW) 1. The PSL Act is a taxation law for the purposes of the TA Act. 2. "Tax default" is defined in the TA Act, s 3 as meaning the "failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay". 3. Interest in respect of tax defaults is calculated on a daily basis on the unpaid tax from the last day for payment until the day it is paid: TA Act, s 21. 4. The interest rate is the sum of the market rate component and the premium component: TA Act, s 22. 5. The respondent may, in circumstances in which it is considered appropriate, remit either component, or both, by any amount: TA Act, s 25. 6. The applicant has the onus of proving, on the balance of probabilities, that the parking space levy exemption applies for the relevant years and if so, whether the interest should be remitted. It must prove all matters necessary to enable the Tribunal to answer the statutory questions in its favour. In the absence of that evidence the Assessments will prevail: TA Act, s 100(3); Cornish Investments Ply Limited v Chief Commissioner of State Revenue [2013] NSWADTAP 25. Relevant facts 1. The applicant provided comprehensive evidence about the parking spaces. I adopt the respondent's summary of facts which are not in dispute. "a) The SP32515 Harbourlights Strata Schemes Management Regulation 2016 Schedule 2 By-Laws for Pre-1996 Strata Schemes provides that 'an owner or occupier of a lot must not allow any motor or other vehicle to park or stand on any common property except with the written approval of the Owners Corporation' and 'the "Visitors Car Park" is restricted to short-term visitors to residential apartments only.' b) The parking spaces are behind a security gate and can only be accessed by the holder of a registered access fob, or if admitted by a resident. The parking spaces are CCTV monitored and use of the access fobs are electronically recorded. The entry to the visitor parking space area is designated with a sign stating 'Visitor Car Parking. Strictly Controlled'. c) Each individual parking space contains a sign that states 'Visitors. Residential Visitors Only.' One of the parking spaces has a further (paper) sign that states 'Priority given to mobility parking scheme and permit holders'. The photographs depicting the signage on the parking spaces are not dated. d) JM Kelly Cleaning Services is engaged by the Applicant to provide services to the Property. Jennifer Kelly is the Building Manager at the Property. The contract for those services specifies that the Building Manager or a member of JM Kelly Cleaning Services staff will be on site at the Property for a minimum of four hours per day, six days per week. e) Jennifer Kelly, the Building Manager at the Property, works at the Property between five to six days each week for approximately four to six hours each day. She parks her vehicle in one of the seven visitor parking spaces during that time. f) The Applicant employs a cleaner (Liam) who works at the Property for four to six hours each day, between five to six days a week. He parks his vehicle in one of the seven visitor parking spaces during that time. g) Contractors engaged by the Applicant who work on capital projects at the Property (lift installation, replacement of cooling tower, painting and remedial works) use at least two of the visitor parking spaces for eight hours a day during projects (which last at least 6 months). h) Maintenance contractors engaged by the Applicant (gardeners, tradesmen, window cleaners, locksmiths, lift maintenance and repairs, air-conditioning, fire and insurance inspectors) occupy one to two of the visitor parking spaces for three to four hours each weekday. i) Contractors engaged by specific residents, including tradesmen, cleaners, IT services, aged carers, real estate agents, use at least two of the visitor parking spaces for four to six hours a day for two to three days a week. j) The parking spaces are used by the following visitors to individual residents of the Property: i. Family and friends; ii. Tradesmen attending to do repairs; iii. Carers and physiotherapists; iv. Cleaners; v. Window cleaners; vi. Gardeners; vii. Managing agents and landlords inspecting rented apartments; viii. Committee meetings; ix. Deliveries and/or installation of items; x. Deliveries of food. k) Spaces are available for use by bike or motorcycle contractors once or twice a month. I) There is always available access to a visitor parking space for persons holding a mobility parking scheme authorisation, either at the time the parking space is required or by prior arrangement. m) Visitor parking spaces are used for the unloading and loading of goods or passengers approximately once a month. n) A maximum of two spaces are vacant each day (but only rarely)." 1. A large portion of the residents on the premises are elderly. On the evidence before me I accept that the care and assistance of those elderly people extends to helping with domestic activities and transportation to and from appointments. The availability of the parking spaces for those who provide the care and assistance is of great benefit to those elderly residents. The applicant's submissions 1. The applicant was self-represented at the hearing by two of the owners of units: Mr Christie and Mr Ngan. 2. The main thrust of the applicant's primary submission was that the parking spaces are set aside exclusively for use by residents and residents only, within the exemption in reg 7(1)(b) (2009 Regulation) and reg 8(1)(b) (2019 Regulation). This is so even where the resident might not own the vehicle being parked or be driving the vehicle. In particular, the applicant argued that intent and purpose of the PSL Act does not apply to resident car spaces as it was intended to exempt residents which, so the applicant said, was clear when one reads the extrinsic materials to the PSL Act. In the Second Reading to the predecessor to the PSL Act (Parking Space Levy Act 1992 (NSW)) it was stated by Minister for Transport Mr Baird, that the levy was "to apply to non-residential, off-street parking … in high-density commercial areas of North Sydney and Milson's Point". Mr Baird went on to say: "There are a number of exemptions to the levy … parking spaces used by residents … are to be exempt." 3. It was argued that the word "by" in the regs 7(1)(b) (2009 Regulation) and 8(1)(b) (2019 Regulation), does not necessarily equate to a requirement that the actual parking of the vehicle be undertaken by the person who resides on the premises but that it is enough to come within the regulations if the owner has direction and control over the parking of the vehicle. This, it was submitted, was similar to a parking attendant at the cricket ground who directs the parking of a vehicle in the carpark. This means that whether the visitor is a tradesman, cleaner or an aged carer or a relative, the parking of their motor vehicle is at the direction and control of the resident and therefore "by" the resident. The applicant says this interpretation more closely conforms to the original stated legislative intent of the PSL Act to exempt residents from the levy. 4. Alternatively, it was argued that the parking spaces in dispute are exempt pursuant to reg 7(1)(a),(c)-(e) (2009 Regulation), and reg 8(1)(a),(c)-(e) (2019 Regulation) as being set aside for one or more of the exempt uses there listed. While the respondent has now accepted that two of the visitor parking spaces are exempt, the applicant argued all seven should be exempt and there is no differentiation between them. 5. The applicant further submitted that it is the By-law which makes the designation of the parking spaces for visitors only and the absence of signage does not undermine the argument that the parking spaces are set aside exclusively for visitor parking: signage is just one method. 6. The applicant said that there were also a number of the parking spaces that were unused casual car parking spaces or unleased tenant's parking spaces during certain periods while works were being undertaken to the Property and that the spaces were used for storage and conveyance of equipment, materials and machinery on other occasions. Consideration 1. It is common ground for each of the relevant financial years the Property is "premises" as defined in PSL Act, s 4 (Premises); the applicant is the owner of the Premises; the Premises are in a leviable district; and the parking spaces were situated on the Premises. It follows that the Premises are leviable premises under the PSL Act. 2. It is also common ground that the parking spaces are on leviable premises in a Category 1 area. 3. The formula for the calculation of the amount of the levy is set out in reg 9 (2009 Regulation) and reg 10 (2019 Regulation). The levy is payable only for days on which a parking space is not exempt: reg 9 (2009 Regulation) and reg 10 (2019 Regulation). 4. The applicant contends that at all times during the relevant years the parking spaces were exempt parking spaces and has not sought to prove that any particular individual parking space was set aside for a specific exempt purpose for a particular period of time in any given year. 5. As noted above, the applicant has the burden of proving on the balance of probabilities that the parking spaces are set aside exclusively for one or more of the exempt purposes in the regulations. 6. In Dang & Nguyen Pty Ltd v Chief Commissioner of State Revenue [2020] NSWCATAD 120 (Dang) the Tribunal stated: "[21] Within the PSL Act and the PSL Regulation, the concept of a parking space being set aside is quite distinct from the concept of a parking space being used. This is clear from: (1) the definition of 'parking space' in s 4 of the PSL Act, which refers to a space 'that is used, or set aside for the parking of motor vehicles'; (2) the definition of 'parking area' in reg 2 of the PSL Regulation, which refers to 'that part of any premises that is used, or set aside, for the parking of motor vehicles'; (3) regs 7(1) and (5) of the PSL Regulation, which provide that a parking space in a particular Category area is exempt while it is 'set aside' exclusively for one or more of various specified purposes; (4) the exemptions provided for by regs 7(1)(g) and (h), which are only available if the parking space 'is the one used for garaging the vehicle overnight'; and (5) regs 7(3) and (4), which provide that a parking space is exempt as: (a) an 'unused casual parking space' if it is 'set aside for use by the public for the parking of motor vehicles but remains unused for that purpose'; and an 'unleased tenant's parking space' if it is 'unavailable for use as a parking space except under a lease of licence under which a tenant of the premises in which it is located has exclusive use of it and no such lease or licence is in force'. … [24] A parking space is set aside when it is separated out or apart for a particular purpose: see Secure Parking Pty Ltd v Commissioner of State Revenue [2016] VSC 344 at [66]-[67], and on appeal: Secure Parking Pty Ltd v Commissioner of State Revenue [2017] VSCA 68 at [65]. [25] Such setting aside requires both an intention to set aside the parking space for a particular purpose and an act giving effect to that intention: see Monsgrove Developers Pty Ltd v Chief Commissioner of State Revenue [2010] NSWADT 303 at [46]-[47]; Secure Parking Pty Ltd v Commissioner of State Revenue [2017] VSCA 68 at [65]. [26] The act giving effect to the intention to set aside a parking space for a particular purpose may take a variety of forms. One such form is the posting of appropriate notices which are in place and visible at all relevant times: see Monsgrove Developers Pty Ltd v Chief Commissioner of State Revenue [2010] NSWADT 303 at [47]; Sterling House 88 Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 279 at [20]; Christopher CK Soo Pty Ltd & J Yap v Chief Commissioner of State Revenue [2017] NSWCATAD 281 at [24]." 1. The requirement that the parking space is set aside "exclusively" for the purpose of the parking of motor vehicles for a particular purpose, indicates that no other purpose (except another exempt purpose/s) is allowed: Sterling House 88 Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 279 at [20]; Christopher CK Soo Pty Ltd & J Yap v Chief Commissioner of State Revenue [2017] NSWCATAD 281 at [24]. 2. To the extent there is evidence of the setting aside of or actual use for a purpose other than an exempt purpose, this may be relevant to determining whether it was set aside exclusively for exempt purposes as it would be unlikely the owner would tolerate use for another purpose. 3. Having considered all of the evidence, I find that the parking spaces during the relevant years were set aside exclusively for "visitor parking". That is made clear by the By-law and the evidence that the applicant enforces the By-law. I accept the applicant's evidence in this case that it did not tolerate the parking spaces being used for anything other than visitor parking. 4. I find that visitor parking comprises: 1. parking of motor vehicles by family, friends and carers, who visit or attend to residents on the premises; 2. parking by tradesmen, cleaners and other contractors and consultants to perform on the Premises (including in the individual units of residents and commercial spaces) on a casual basis; 3. for the loading and unloading of vehicles and passengers; 4. for the parking of bicycles and motorcycles including for the delivery of food; 5. for the parking of motor vehicles by mobility permit holders; 6. for parking of motor vehicles by Ms Kelly, the building supervisor or another member of her staff, to provide services on the premises; 7. occasionally the parking of heavy equipment while construction is taking place; 1. I also find that at times, one or more of the parking spaces are unused. 2. By reason of regs 7 (2009) and 8 (2019), if a parking space is set aside for a range of purposes and one of those is non-exempt, the exemption cannot apply for the reason that it cannot then be said it is set aside "exclusively" for the exempt purpose or purposes. This has relevance here because the evidence does not establish that each particular parking space on the premises is set aside "exclusively" for a specific purpose in the relevant period. Rather, all of the parking spaces have been set aside exclusively for visitor parking which, as I have determined above, is for a variety of purposes. The question is whether all of these purposes are exempt within the meaning of regs 7 (2009) and 8 (2019). For the applicant to succeed on its arguments, it has the onus of demonstrating that either the residential exemption applies to all of the parking spaces or that one or more of the individual parking spaces are set aside exclusively for one or more exempt purposes. Residential Exemption: reg 7(1)(b) (2009 Regulation) and reg 8(1)(b) (2019 Regulation) 1. The applicant's construction of the residential exemption is that provided the parking of the motor vehicle is at the direction or control of the person who resides on the premises or adjoining premises, it is parking "by" that person. This construction is said to best uphold the purpose of the legislation – to exempt residents from the levy. 2. The process of statutory construction begins with a consideration of the text: Federal Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503; [2012] HCA 55 at [39]. This requires consideration of the ordinary and grammatical meaning of the words of the provision by reference to all the provisions of the statute and its purpose: SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 per Kiefel CJ, Nettle and Gordon JJ at [14]. 3. In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2020) 282 FCR 1 Allsop CJ at [4] stated: "The principle is clear: Meaning is to be ascribed to the text of the statute, read in its context. The context, general purpose and policy of the provision and its consistency and fairness are surer guides to meaning than the logic of the construction of the provision. The purpose and policy of the provision are to be deduced and understood from the text and structure of the Act and legitimate and relevant considerations of context, including secondary material." 1. The word "by" used in the expression "parking of motor vehicles by" is an adverb which identifies the person performing the action of parking. I was not directed to any authority for the proposition that "by" had a different meaning in this context. Having regard to the residential exemption in its context, it can be seen that on each occasion in the 2009 Regulation and 2019 Regulation where the expression "parking of motor vehicles by" is used, it is directed to the identity of that person parking such as in regs 7(1)(c), 7(1)(e), 7(5)(a), 7(5)(c)-(h), regs 8(1)(c), 8(1)(e), 8(5)(a), 8(5)(c)-(h). 2. If Parliament had intended that parking of motor vehicles by guests of residents be included, it could have used words similar to that used in reg 7(5)(a) or (d) (2009 Regulation) and reg 8(5)(c) or (d) (2019 Regulation) in respect Category 2 premises. Further, if the applicant's construction of the residential exemption was accepted, it would "cover the field" and give little, if any, work to do for some of the other stated exemptions such as parking of motor vehicles by contractors and consultants providing services on the Premises (including on the individual resident's unit), who, on the applicant's construction, would presumably be otherwise covered under the residential exemption. A construction which renders other provisions otiose is not to be preferred: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [70]. 3. The construction I have given to the residential exemption is not inconsistent with the object of the legislation being to discourage car use in the area (with the imposition of the levy acting as a deterrence). I accept that it seems unfair that Parliament would cater for guests of businesses in Category 2 premises (see for example reg 7(5) (2009 Regulation), reg 8(5) (2019 Regulation)) but not guests of residents in Category 1. This is particularly so where, as submitted by the applicant, the extrinsic materials to the predecessor to the PSL Act indicated that the levy was not to apply to residential use of parking spaces. 4. The residential exemption requires the parking of the motor vehicle by a person who resides on the premise or an adjoining premise and not merely at the direction or control of that resident. Consequently, I am not satisfied that the parking spaces are for parking of motor vehicles by visitors that are family members, carers and friends of residents or visiting the Property in a capacity not otherwise covered under the other exemptions in reg 7 (2009 Regulation) and reg 8 (2019 Regulation), is a non-exempt purpose within the meaning of the PSL Act. 5. I accept that the construction of the residential exemption which I have taken means that the PSL Act has harsher consequences than its Victorian counterpart (Congestion Levy Act 2005 (Vic)) which was considered in Secure Parking Pty Ltd v Commissioner of State Revenue [2016] VSC 344. That is because in that Act, there is an express exemption in s 17(1)(c) for parking by a person who is visiting the premises on which the parking space is located, unless those premises are the person's usual place of business or work. 6. While the construction I have given to the residential exemption may produce unfair results, concepts of fairness are not relevant to the statutory task the Tribunal is required to undertake on a merits review. In Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 123, the High Court stated: "But the question for decision is what are the circumstances in which an amended assessment may lawfully be issued? That question is not answered by asserting the existence of any 'policy' or 'general intention' unless that policy or intention is to be found reflected in the provisions of the Act. Appeals to general notions of 'fairness' or 'justice' do no more than attempt to mask the absence of any foundation in the legislation for the conclusion which is asserted." 1. Further, it has been said on numerous occasions in respect of revenue matters that though the operation of the provisions may be harsh they reflect a legislative policy to protect the interests of the revenue: Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 at [44]. Here policy aligns with the object of the PSL Act to discourage car use in the area and impose the levy to disincentivise motor vehicle usage. Alternative argument: Other Exemptions 1. In relation to the other specific exempt purposes relied on by the applicant, as I have already found the parking spaces were set aside exclusively for a combination of purposes, at least one of which is non-exempt; and as individual parking spaces have not been delineated by the applicant for particular purposes, the only way one or other parking space could still fall within any of the other exemptions in reg 7(1)(c)-(e) (2009 Regulation) and reg 8(1)(c)-(e) (2019 Regulation) (Other Exemptions) would be for the applicant to prove that a particular parking space was set aside exclusively for an exempt purpose. I consider each of the Other Exemptions below: 1. I accept the applicant's evidence that throughout the relevant period, there was always a space available for mobility scheme parking. This is an exempt purpose under reg 7(1)(c) or reg 8(1)(c). Where all of the parking spaces are set aside for exempt purposes, I would not be required to determine specific periods for which a specific parking space would be set aside for mobility scheme parking. Here however, as there is no differentiation between particular parking spaces, I am unable to be satisfied that a specific parking space was designated exclusively for mobility scheme parking. I note the evidence that signage was put above one particular parking space indicating it was for mobility scheme parking but the evidence does not establish when this particular space was first designated for this exclusive purpose. The photograph taken is of a paper sign stuck on the wall and is dated after the relevant period the subject of this dispute. It seems likely from the date that sign was erected, that particular parking space was exclusively set aside for that use, however, I am not satisfied on the evidence that this designation was in place in the relevant period. 2. The same can be said in respect of reg 7(1)(d) and reg 8(1)(d). While I am satisfied the loading and unloading of goods and/or passengers is an exempt purpose, I am not satisfied that a particular parking space is set aside exclusively for this purpose. 3. I am satisfied that the use by Ms Kelly and/or an employee of JC Kelly Cleaning is casual. I do not accept that the Premises are Ms Kelly or her employee's permanent place of employment nor that parking is for set hours on specific days on a consistent basis. The parking, like the work performed by Ms Kelly and/or an employee, is casual. I am therefore satisfied that the parking by Ms Kelly or an employee of JC Kelly Cleaning is by a person who on a casual basis provides services to the premises within the meaning of reg 7(1)(e) or reg 8(1)(e) and is therefore an exempt purpose. I am also satisfied that the parking by other contractors and consultants such as tradesmen, gardeners and cleaners falls within the same exemption even though they provide their skills to residents in individual units (the "premises" include the entire strata complex). However, as there is no differentiation between particular parking spaces in the Visitor Parking, I am unable to be satisfied that a specific parking space was designated exclusively for this exempt purpose. 4. I accept that motorcycles and bikes sometimes park in one or other of the parking spaces in the relevant years including for the delivery of food to residents. This falls within the exemption in reg 7(1)(b) or reg 8(1)(b). However, as there is no differentiation between particular parking spaces in the Visitor Parking, I am unable to be satisfied that a specific parking space was designated exclusively for this exempt purpose. 5. I have had regard to the Guidelines for Unused Casual Parking Spaces. I am satisfied that for periods of time one or more of the parking spaces were unused casual parking spaces. This is exempt within the meaning of reg 7(4) or reg 8(4). Where all of the parking spaces are set aside for exempt purposes, I am not required to determine specific periods for which specific parking spaces were unused casual parking spaces. However, here, as I have already found at least one purpose is non- exempt and individual parking spaces have not been delineated for particular purposes, I am unable to be satisfied that any particular parking space was an unused casual or unleased tenant's parking space in the relevant period. 1. The respondent places emphasis on a purported requirement to have each parking space signposted if it is to be accepted as set aside exclusively for an exempt purpose. I do not agree that signposting is the only way to set aside exclusively in circumstances where the entire carpark is underground in a secure parking facility and not available to the public. Had all of the parking spaces been set aside only for exempt purposes, signposting would have made little if any difference to the characterisation of the parking spaces. However, where, as I have found here, that the parking spaces in the relevant years were set aside for a combination of exempt and non-exempt purposes, signposting for individual exempt purposes would have been useful as it would have assisted in determining whether an individual parking space or spaces would have been exempt. On the evidence before me, I am unable to be satisfied that any particular individual parking space was designated for a specific purpose and so that exercise is not possible. 2. As a result, I find the setting aside of the parking spaces is for a combination of exempt and non-exempt purposes and therefore is not "exclusively" set aside for one or more exempt purpose. 3. Having found that the parking spaces are, set aside exclusively, for a range of purposes and one of those is non-exempt, I am not able to be satisfied that the applicant has demonstrated the five parking spaces have been set aside exclusively for one or more exempt purposes. Consequently, the five parking spaces remain liable to the levy. Remission of interest 1. As noted above, liability for payment of the parking space levy is imposed on each person who at 1 July in a relevant year is an owner of leviable premises. Provided the levy is paid by 1 September in the relevant year no tax default occurs. 2. The applicant did not pay the levy by 1 September in each of the relevant years and so has committed a tax default. 3. Under s 21 of the TA Act, interest accrues on unpaid levies from the date of the tax default. Interest accrues at market and premium rate. 4. Section 25 of the TA Act provides that the respondent may, in such circumstances as he considers appropriate, remit the market rate component or the premium rate component of interest or both by any amount. 5. The question is whether the applicant has demonstrated a basis to remit either the market rate component or the premium rate component of the interest which has been assessed. 6. In respect of the interest, the applicant submitted that as the Assessment was retrospective for a period of five years and was without notice, there is an unreasonable lack of equity and fairness particularly for new owners and so interest charged on the Assessment should be remitted. Market rate component 1. The authorities are clear that, as the market rate component of the interest imposed by the respondent is intended to compensate the respondent for not having the benefit of the tax payment from the time it was due, it is a component that would rarely be waived, otherwise tax would be paid at a discounted amount which would be unfair to taxpayers who pay their tax on time. Only exceptional circumstances would justify remission, such as where the tax default is entirely due to a fault of the respondent or in situations completely out of the control of the taxpayer such as postal strikes, serious illness and natural disasters: Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19 at [60] (Incise Technologies); Lease A Leaf Property Pty Limited v Chief Commissioner of State Revenue [2011] NSWADTAP 41 at [34]; Trust Co of Australia Ltd v Chief Commissioner of State Revenue [2002] NSWADT 21; Adams Bidco Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 702 at [163] (Adams Bidco). 2. The applicant said that the tax default was due to the fault of the respondent for two reasons: first, by not responding to communication with the applicant until April 2020; and second, delaying the issues of assessments for five years. 3. I have had regard to the evidence relied upon by the applicant including email correspondence from Sean McNamara of Bright & Duggan dated 2 April 2020 and conclude that the contention that the respondent did not acknowledge, consider or respond to the applicant is inaccurate. I find the respondent made requests of the applicant in August and September 2019 for information about the seven claimed car spaces but it was the applicant who did not respond until April 2020, following which, the respondent requested further information from the applicant which went unanswered. Consequently, the applicant's first argument fails. 4. As for the second argument, liability to a parking space levy arises under s 8 PSL Act not by the actions of the respondent in issuing an assessment. Further there is no limitation as to time on the respondent as to when an initial assessment of parking space levy liability should be made. Rather, the obligation is with the taxpayer to furnish accurate returns. In this case, accurate returns were not lodged. Any delay in issuing the Parking Space Levy Assessments flowed from the failure of the applicant to comply with the statutory obligation to furnish accurate returns. 5. The applicant has not put forward other circumstances which would justify remission of the market rate component of the interest. 6. For these reasons, I find that the tax default was not caused by the respondent and I am not satisfied that exceptional circumstances have been demonstrated for the remission of market rate component of interest. Premium rate interest 1. The premium component of the interest is a form of penalty. Its purpose is to provide an additional economic deterrent against taxpayers failing to meet their obligations on time: Incise Technologies at [61]. 2. In Incise Technologies the Appeal Panel at [62] considered four criteria as being relevant and appropriate to the consideration of remission of the premium component of the interest (although noting that there may be other circumstances which it may be appropriate also to take into account) and these criteria have been considered in a number of subsequent cases (see eg Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773 at [81]; Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107 at [177]), namely that: "(1) all principal tax that is owing and not in dispute has been fully paid; (2) there has been co-operation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments; (3) such co-operation by the taxpayer has occurred prior to any investigation being commenced by the Commissioner (voluntary disclosure) or, at the very least, within reasonable time after requests for information have been made by the Commissioner – i.e. the taxpayer has taken reasonable care; and (4) there has been no wilful default by the taxpayer in not paying tax on time." 1. Courts have held that the respondent's rulings and guidelines are also relevant to the exercise of the remission discretion in s 25: see for example Adams Bidco; Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue; International Hotel Services Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657. The respondent has issued a practice note (Revenue NSW, CPN024: Interest and penalty tax guidelines, June 2022) that sets out circumstances where the respondent may reduce the premium rate component of interest. This practice note indicates two broad categories where remission may be considered appropriate: circumstances outside the control of a taxpayer (such as illness or death, natural disasters); and where the evidence demonstrates the default was within the taxpayer's control but reasonable care has been taken to ensure payment of tax. 2. In each case it is essentially a question of fact whether the taxpayer has taken reasonable care in complying with their tax obligations. In RVO Enterprises Pty Ltd v Chief Commissioner of State Revenue [2004] NSWADT 64, the Tribunal said at [23]: "Factors that would indicate that a taxpayer took reasonable care include reasonable attempts to comply with the tax law, reasonable professional and other inquiries to ensure compliance, reliance on professional advice or on official published views of the tax law. Factors which indicate that a taxpayer failed to take reasonable care include oversight or forgetfulness to meet with obligations, failure to maintain adequate records and procedures to prevent errors from occurring, not seeking professional advice and errors in complying with the law." 1. Simply hiring an accountant to prepare returns or assuming an adviser would review returns is not of itself "taking advice" on the operation of the relevant provisions: Levitch Design Associates Pty Ltd atf Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215 at [113]. 2. I am satisfied that the applicant cooperated with the respondent and provided the requested documents both during the audit and objection process but no disclosures of potential liability were made by the applicant prior to an investigation commencing. On the evidence before me, that seems to have occurred because the applicant was unaware of the potential liability and considered it was complying with its tax obligations. 3. While I accept that the applicant relied on the expertise and guidance of its strata manager, Bright & Duggan, in lodging the parking space levy returns, however, this is not sufficient to establish that reasonable care was taken to determine whether it was liable for the levy. Bright & Duggan are not lawyers but also, there is no evidence that the applicant actually sought advice that would have been required to form a view about whether it was liable for the levy. I am therefore not satisfied that the applicant took reasonable care to comply with its taxation obligations. 4. I am also not satisfied that the applicant has established on the evidence that any circumstances outside the control of the applicant led to the tax default. 5. The onus is on the applicant to prove its case on the balance of probabilities. It has not done so. The Tribunal cannot, in the absence of evidence addressing the matters referred to above, be satisfied that the applicant has taken reasonable care to comply with its obligations or that it is appropriate in the circumstances to remit any amount of the premium component of the interest imposed. Consequently, I am not satisfied that the premium rate component of interest should be remitted. 6. As a result, whether the tax default is "wilful default" in the sense intended in Incise, is not a question I need to determine and is not, in any event, something the respondent contended for. Conclusion 1. For the reasons set out above, reg 7(1)(b) of the 2009 Regulation and reg 8(1)(b) of the 2019 Regulation do not apply, nor do to reg 7(1)(a),(c)-(e) of the 2009 Regulation, and reg 8(1)(a),(c)-(e) of the 2019 Regulation. Pursuant to s 101(a) of the TA Act, the Assessments are confirmed. Order 1. The Assessments are confirmed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar Amendments 03 July 2023 - Coversheet - "Note" removed: not relevant. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 July 2023