Appeal Panel - Internal CITATION: Chief Commissioner of State Revenue v Doney (RD) [2006] NSWADTAP 22 APPELLANT PARTIES: Chief Commissioner of State Revenue RESPONDENT Geraldine Doney FILE NUMBER: 059046 HEARING DATES: 15/11/2005 SUBMISSIONS CLOSED: 11/15/2005 EXTEMPORE DECISION DATE: 11/15/2005 DATE OF DECISION: 05/16/2006 BEFORE: Needham J SC - Judicial Member at 1; Seve J - Judicial Member at 14; Bennett C - Non Judicial Member at 1 CATCHWORDS: leave to appeal out of time - leave to extend to the merits MATTER FOR DECISION: Preliminary matter FILE NUMBER UNDER APPEAL: 056006 DATE OF DECISION UNDER APPEAL: 07/15/2005 Administrative Decisions Tribunal Act 1997 Duties Act 1997 LEGISLATION CITED : Land Tax Management Act 1956 State Revenue Legislation Further Amendment Act 2004 Taxation Administration Act 1996 Charteris v General Manager, Leichhardt Municipal Council (GD) [2001] NSWADTAP 12 Chief Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Comcare v A'Hearn (1993) 45 FCR 441 Della Patrona v Director of Public Prosecutions (Cth) [no 1] (Court of Appeal, 1 September 1995, unreported) Fonua v The Broken Hill Proprietary Company Limited & ors (EOD) [2000] NSWADTAP 19 Full v Chief Commissioner of State Revenue [2005] NSWADT 190 Goldie and Minister for Immigration and Multicultural Affairs [2001] AATA 513 Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 CASES CITED: J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation [2000] FCA 196 Lupevo Pty Limited & Ors v Bree (EOD) [2003] NSWADTAP 18 Lupevo Pty Ltd t/as Ampol Nabiac v Bree [2002] NSWADTAP 9 Maric v Comcare (1993) 40 FCR 244 Multicon Engineering Pty Ltd v Federal Airports Corporation 47 NSWLR 631 Paing Pty Ltd & Ors v Golden Harvest (Aust) Pty Ltd [2003] NSWSC 750 Trikeriotis v Minister for Community Services 9CSD) [2003] NSWADTAP 31 University of Wollongong v. Metwally (1985) 1 NSWLR 722 Water Board v. Moustakas (1988) 180 CLR 491 Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 Y v V & X (EOD) [2003] NSWADTAP 44 APPELLANT RL Seiden, barrister REPRESENTATION: RESPONDENT S Gaegeler, SC ORDERS: 1. Leave to appeal out of time on the timing issue is refused; 2. Leave to extend the appeal on the merits in relation to that point is refused REASONS FOR DECISION Deputy President Needham and Non-Judicial Member Bennett: 1 In this matter the appellant, the Chief Commissioner of Stamp Duties, seeks leave to appeal out of time from a decision of Judicial Member Acting Judge Block given on 15 June 2005 to set aside the decision of the Chief Commissioner of State Revenue dated 1 December 2004. That decision was to set aside the decision of the Commissioner and to order a refund of vendor duty paid by the respondent together with interest. The ground upon which the member ordered the decision to be set aside was the discretion given to him in section 162B(4) of the Duties Act 1997. 2 The appellant frames its appeal on a number of bases. The appeal was filed out of time by one day. The submissions filed by the appellant on 23 August 2005 set out two main grounds of appeal. The first has been referred to in argument as a timing issue, and the second is as to the breadth of the discretion exercised by the member. There are some other grounds but these are the two main grounds. 3 Section 113(2) of the Administrative Decisions Tribunal Act 1997 ("the Tribunal Act") provides:- (2) An appeal under this Part: (a) may be made on any question of law, and (b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision. 4 The appellant seeks, in addition to leave to extend the time for the filing of the appeal, leave to extend the appeal to the merits. It became clear on the initial argument as to leave to appeal out of time, which segued into an argument as to the propriety of extension to the merits pursuant to sub-s 113(2)(b) of the Tribunal Act, that if both leaves were granted, the respondent would require an adjournment . This was because the parties foreshadowed, in relation to the argument sought to be advanced by the appellant, a tender of evidence not available to the first instance Judicial Member by both parties; and a proposed cross-examination of the respondent by the appellant as to such new evidence. 5 The leave to extend to the merits and the provision of the further evidence arises because the first ground which I have referred to, which was referred to as the timing issue, requires a revisitation of the agreed facts upon which the Judicial Member made his decision at first instance. 6 The appellant now seeks to raise the question of the ability of the member to exercise a discretion in the light of ss 147 and 150 of the Duties Act 1997 which set out provisions relating to a 'liability date'. The appellant argues that no real prejudice can be pointed to by the respondent and that the issue is an important one given the impact of similar provisions which have not been repealed, as section 162B(3) and (4) have been, in the Land Tax Management Act 1956. Counsel for the appellant also points to the difficult decision whether to appeal in the light of the previous decision of this Tribunal in the matter of Full v Chief Commissioner of State Revenue [2005] NSWADT 190 which dealt with similar issues but from which no appeal was filed. 7 The respondent counters that the timing issue is a new issue which was not argued in the Tribunal below, a point which is conceded by the appellant. The respondent says that she is now faced with running on appeal a totally different argument to that which she ran successfully in the Tribunal. 8 An unusual aspect of this case is that the Judicial Member was given a statement of agreed facts by the parties. Those facts are now, in the consideration of the issue under ss 147 and 150 of the Duties Act 1997, said not to be a complete statement or a completely correct statement of the relevant facts. The respondent says that the issue sought to be raised by the appellant will require consideration of her and her family's domestic affairs, given that the subject transaction was the sale of a family home. In our view, despite the departure from the agreed facts before the Tribunal, it would not be fair to allow a new issue to be raised on appeal and yet deny the respondent the ability to meet the issues which arise on that new ground of appeal. 9 The respondent further says that to allow the issue to be raised, and to extend the appeal to the merits, would result in an absence of finality in the proceedings. She would, in effect, be faced with running a new case, with new evidence, before the Appeal Panel before the Appeal Panel can determine the issues raised by the appellant; the matter would then need to be decided on the new facts by this Appeal Panel or the matter should be remitted to the Judicial Member for reconsideration. The provision of the new evidence would require an adjournment of this appeal hearing, and would require each party to expend considerable sums in preparing for the adjourned hearing. 10 A point which could have been raised by the respondent and which the Appeal Panel has considered in detail is the effect if leave is granted to the merits and a decision made by the Appeal Panel on the new evidence. An appeal from this panel lies to the Supreme Court on a point of law and there would be no further internal appeal available to the respondent should there be factual findings or legal findings from which she wished to appeal made by this Appeal Panel. She would be left with a remedy of an appeal to the Supreme Court with the costs and complexity which such an appeal requires. 11 The Appeal Panel has considered all of the arguments put by each side and has come to the view that leave to appeal in relation to the timing point only, that is, the new point raised in the appellant's submissions, should be refused both as far as leave to appeal out of time is concerned and for leave to extend the appeal to the merits. The severity of the prejudice faced by the respondent is the deciding factor in deciding to refuse both applications for leave, despite the short period of the delay in filing and the reasonable arguments raised by the appellant in explaining the delay. It is considered that the prejudice is such that the public interest in determining the points raised under ss 147 and 150 of the Duties Act 1997 is insufficient to grant the appellant the leaves requested. 12 In coming to this view the Appeal Panel has considered the decision of the Court of Appeal in Multicon Engineering Pty Limited v Federal Airports Corporation 47 NSWLR 631 in particular the passages from the decision of the President at page 645, and the cases cited therein, being University of Wollongong v Metwally (1985) 1 NSWLR 722 and Water Board v Moustakas (1988) 180 CLR 491. 13 Accordingly, leave to appeal out of time on the timing issue is refused. Leave to extend the appeal on the merits in relation to that point is also refused. The hearing will now continue on the remaining aspects of the Notice of Appeal. J Seve Judicial Member: Leave to extend time for first ground of appeal 14 The Commissioner's notice of appeal in this case was lodged one day outside the time provided by s113(3)(a) of the Administrative Decisions Tribunal Act 1997 ("ADT Act"). The Respondent objected to an extension of time being granted by the Appeal Panel under s113(3)(b) of the ADT Act. 15 Although prima facie, proceedings commenced outside the prescribed period will not be entertained, an extension of time will be granted, however, if it is proper to do so (Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9, Lupevo Pty Limited & Ors v Bree (EOD) [2003] NSWADTAP 18, Trikeriotis v Minister for Community Services [CSD] [2003] NSWADTAP 31 and Y v V & X (EOD) [2003] NSWADTAP 44). 16 After weighing the relevant factors, for the reasons hereunder, in my view, this is a case where it is proper to grant an extension of time, of one day, under s113(3)(b) of the ADT Act, in respect to the Commissioner's first ground of appeal. Factors relevant to accepting an appeal out of time 17 The Appeal Panel in Lupevo Pty Limited & Ors v Bree (EOD) [2003] NSWADTAP 18, held as follows: "8 The factors relevant to a consideration of this issue were set out by the Appeal Panel in Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9…In Meschino and Secretary, Department of Family and Community Services [2001] AATA 342 the AAT referred to Re Schmack and Defence Force Retirement and Death Benefits Authority (1981) 3 ALN N77 in reliance upon a number of factors relevant to the exercise of the discretion, which may be re-stated as follows:- (a) the reason for the failure to lodge the appeal. (b) the length of the delay in lodging the appeal. (c) the diligence shown by the Appellant in lodging the appeal after it came to his notice that there were circumstances justifying an appeal. (d) the nature of the decision below and the consequences of the decision upon the Appellant's rights. (e) the adequacy of the information conveyed to the Appellant at the time the decision was notified to him, both as to the reasons for the decision and of the Appellant's entitlement to appeal. (f) the extent of the Appellant's knowledge of the relevant statutory provisions. (g) the possible prejudice to the Respondent to the appeal. The AAT also referred to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 with approval. The principles to be applied in the exercise of the discretion which were summarised by Wilcox J in Hunter Valley Developments were also applied in Goldie and Minister for Immigration and Multicultural Affairs [2001] AATA 513. Those principles relevantly are:- (a) Prima facie, proceedings commenced outside the prescribed period will not be entertained. An extension of time will be granted, however, if it is proper to do so. (b) It is relevant whether the Appellant rested on his rights or took action to make the decision-maker aware that the decision was being contested. (c) Any prejudice to the Respondent that would be caused by granting an extension of time is relevant. (d) The merits of the appeal are relevant. (e) Fairness of granting the extension of time as between the applicant and other persons in a like position is relevant. To the last-mentioned principle may be added general considerations of fairness and equity: Hunter Valley Developments, Maric v Comcare (1993) 40 FCR 244 at 249. Further to the provision of an explanation for the delay in lodging the appeal, an acceptable explanation will generally be expected in support of an application for extension of time, and a failure to provide such an explanation is also a relevant factor in the exercise of the discretion to extend the time: Comcare v A'Hearn (1993) 45 FCR 441 at 444." Outcome of factors for first ground of appeal 18 Although the Commissioner, given his position, would have intimate knowledge of the relevant statutory provisions, this factor is outweighed by the cumulative effect of the following other relevant factors: a) An admission of the failure to lodge on time was volunteered by the Commissioner in his notice of appeal and a reason was also volunteered, namely, that the Commissioner engaged in lengthy and detailed consideration of the question of whether to appeal. In the context of the other factors herein referred to, this is an acceptable reason. b) The length of the delay was not extreme and was the most minimal that can exist, specifically, one day. c) The Commissioner did not appear to rest on his rights but made the Tribunal aware that the decision below was being contested, one day out of time. The Commissioner appears to have acted diligently in lodging the appeal after it came to his notice that there were circumstances justifying an appeal. There is no history of delay by the Commissioner in these proceedings as there was in Lupevo Pty Limited & Ors -v- Bree (EOD) [2003] NSWADTAP 18 where the Appeal Panel refused an extension of time on grounds, inter alia, that the same party, represented by the same legal representative, was previously refused an extension of time in relation to an appeal in the same proceedings and therefore, the time period for lodging an appeal should have been at the forefront of the appellant's mind when the substantive decision was handed down. d) The nature of the decision below is such that it directly affected the Commissioner's collection of revenue in this particular case and it also has the consequence of potentially affecting the Commissioner's collection of revenue or retention of revenue already collected from other taxpayers involved in similar (albeit necessarily different) transactions and circumstances during the relevant period from 1 June 2004 to 14 December 2004 when s162B(4) of the Duties Act 1997 ("Duties Act") applied. The Commissioner has submitted that the reasoning in the decision of the Tribunal below could also affect the interpretation of other exemption provisions of the Duties Act and the Land Tax Management Act 1956. This submission is accepted, although with minimal weight as a factor on its own, as the decision is a first instance decision of a tribunal on a tax that has since been repealed in full. e) The decision below did not address the issue of law the subject of the first ground of appeal and it is reasonably arguable that it should have done so. f) The first ground of appeal has merit and, in the circumstances, warrants the extension of time. For the reasons described hereunder, the fact that the Commissioner did not address the issue during the proceedings for the decision below does not derogate from this. g) The possible prejudice to the Respondent that has been alleged, does not outweigh the other factors in favour of granting leave to extend time by one for the first ground of appeal. The Respondent's submissions as to cost and finality of litigation are arguable in every application for leave to extend time and in the context of the shortness of the delay, the meritorious nature of the first ground of the appeal and the other factors herein referred to, are insufficient in this case. The Respondent has not established that her position is any more than marginally different to the situation which would have pertained had the notice of appeal been lodged one day earlier, within time. The Respondent's submission that the Commissioner's first ground of appeal requires a review of the merits is not accepted. For the reasons described below, the Commissioner's first ground of appeal involves solely a question of law and does not require a review of the merits. The submissions of the Respondent on incorrect findings of fact at first instance do not weigh as a prejudice to the Respondent in this context. If those submissions are sustainable (and that would require a review of the merits requiring leave to be granted) such incorrect findings of fact were caused by the Respondent. For the reasons described below, the fact that the Commissioner did not address the issue of law the subject of his first ground of appeal during the proceedings at first instance does not derogate from this. h) Unlike the position in each of the cases of Lupevo Pty Limited & Ors v Bree (EOD) [2003] NSWADTAP 18, Lupevo Pty Limited & Ors v Bree (EOD) [2003] NSWADTAP 18, Trikeriotis v Minister for Community Services [CSD] [2003] NSWADTAP 31 and Fonua v The Broken Hill Proprietary Company Limited & ors (EOD) [2000] NSWADTAP 19, in this case, the merits of the first ground of appeal are sufficient to warrant the extension of time, just as the merits of the appeal were in Charteris v General Manager, Leichhardt Municipal Council (GD) [2001] NSWADTAP 12. In light of earlier Appeal Panel decisions, in my view, a refusal to allow an extension of time by one day in the circumstances of the first ground of appeal, would be unfair to the Commissioner whilst allowing it would not appear to cause disproportionate prejudice to the Respondent. In the circumstances, allowing an extension of time is not inequitable. First ground of appeal – Issue not previously raised 19 The Commissioner's first ground of appeal was that the Tribunal below misconstrued s162B(4) of the Duties Act in error of law. The merits of the first ground of appeal are addressed later in these reasons. 20 The Commissioner admitted that he did not raise the issue the subject of the first ground of appeal at the hearing for the decision below. The Respondent submitted that accordingly, the Commissioner is precluded from raising the issue on appeal. This submission of the Respondent is not accepted for the following reasons. 21 Under s100(3) of the TAA, the applicant has the onus of proving the applicant's case in an original application for review. Under Section 63 of the ADT Act: In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision. 22 S113(2)(a) of the ADT Act, provides that a party to proceedings in which an appellable decision is made, may appeal on any question of law. Leave is not required. 23 The cases cited by the Respondent in support for precluding the Commissioner from raising the first ground of appeal are all cases where leave to appeal was required (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, Della Patrona v Director of Public Prosecutions (Cth) [no1] (Court of Appeal, 1 September 1995, unreported) and Multicon Engineering Pty Ltd v Federal Airports Corporation 47 NSWLR 631). This is not the position in this case. This is an appeal where by statute (ie s113(2)(a) of the ADT Act) the Commissioner is given the right to appeal on any question of law, without leave being required. For the reasons described hereunder, the Commissioner's first ground of appeal involves solely a question of law and as such, does not require leave. 24 Even if I am wrong in this regard, and the cases cited by the Respondent do apply where leave is not required for an appeal on a question of law in this Tribunal, the Commissioner's submission that his first ground of appeal in this case falls within the exception contemplated by those cases should be accepted. This is because there is merit in the substance of the Commissioner's first ground of appeal and if such ground of appeal is correct, it is a "knock-out point" as contemplated by Mason P (with whom Gleeson CJ and Priestly JA agreed) in Multicon Engineering Pty Ltd v Federal Airports Corporation 47 NSWLR 631 at 646. If s162B(4) properly construed, does not give the Commissioner a discretion in the circumstances of the findings of fact of the Tribunal below, the Commissioner could not exercise a discretion under s162B(4) in favour of the Respondent. 25 Furthermore, for the reasons mentioned earlier, allowing the Commissioner's first ground of appeal to be argued is not against the interests of justice and does not itself require a further hearing as contemplated by Gleeson, CJ, McHugh and Gummow, JJ in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447. Based on the view that there is merit in the substance of the Commissioner's first ground of appeal, if such ground of appeal is correct, it would have been open, and it should have been the case, for the Tribunal below to have correctly applied the law to the findings of fact at the time, and conclude a result contrary to the decision that was made. Question of law or review of merits 26 If the decision of the Tribunal below involves a conclusion, which, on application of the law properly construed, to the findings of fact made by the Tribunal, is a conclusion that is untenable, that is an error of law and does not involve a review of the merits. 27 In Paing Pty Ltd & Ors v Golden Harvest (Aust) Pty Ltd [2003] NSWSC 750, after considering High Court authorities on the distinction between questions of fact and the question of law in appellate matters, Newman AJ held (at paragraph 10) "….Thus if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description the contrary decision is wrong in law". 28 In J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation [2000] FCA 196 Sundberg J held: "16 Whether the application of the law to the facts of a particular case is a question of law or of fact was considered in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280. The full court held that the question whether facts fully found fall within a statutory provision properly construed is generally a question of law. However, an exception to this general proposition exists where a statute uses words according to their ordinary meaning and the question is whether the facts as found fall within those words. Where it is reasonably open to hold that the facts do fall within those words, the question whether they do or do not is a question of fact. …However, the court identified an "exception to the exception" - where the determination whether facts fall within the words of a statute involves making a value judgment about the range of facts the Act is intended to cover. In that case the determination will involve a question of law. …" 29 The exception and exception to the exception referred to in the Pozzolanic case are not relevant in this context. Here, the issue is whether s162B(4) was misconstrued by the Tribunal below. If s162B(4) was misconstrued by the Tribunal below, then if application of s162B(4), properly construed, to the facts as found at first instance, would lead to a different result than was decided by the Tribunal below, that is an error of law. If s162B(4), properly construed, does not give the Commissioner a discretion in the circumstances of the findings of fact of the Tribunal below, the order of the Tribunal below setting aside the decision of the Commissioner is in error of law and warrants being set aside. This does not involve a review of the merits. Respondent's submissions on findings of fact 30 The Respondent submitted that findings of fact in the decision below, namely, that the subject land was tenanted at the liability date and the Respondent was not in occupation of the subject land at the liability date, were incorrect. These findings of fact were made more than once in the decision below, specifically: a) at paragraph 8: "That tenant resided in the Residence during the agreed term of six months and remained in occupation on a month- to- month basis thereafter"; b) at paragraph 13: "AS indicates, as set out previously, that the Residence was rented out for a six months term and that the tenant remained in it thereafter on a month-to-month basis. It is thus common cause that the Residence was rented out during the relevant period, and in a technical and legal sense, became a rental property"; and c) at paragraph 17: "The Applicant did not fall within any of the subsections of section 162B (3). At the time of sale of the Residence she was not in occupation, and so that section 162B (3) (a) did not apply"; d) at paragraph 31: "… when she sold the Residence ….It is true that she was not living in it at the time because, for good and proper reasons she had vacated the Residence in order to live firstly in the Rental Home and thereafter (for a short period prior to sale of the Residence) in the second Artarmon property". 31 However, the findings of fact which are disputed by the Respondent were based upon and supported by the evidence that was before the Tribunal below and as such, were justified. In such circumstances, the findings can not be disturbed without a review of the merits. In Paing Pty Ltd & Ors v Golden Harvest (Aust) Pty Ltd [2003] NSWSC 750) Newman JA held (at paragraph 10) as follows: "(3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences. (4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences; or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences". 32 S113(2)(b) of the ADT Act provides that an appeal to an Appeal Panel may extend to a review of the merits with leave of the Appeal Panel. However, as stated, the Commissioner's first ground of appeal involves solely a question of law and under s113(2)(a) of the ADT Act, leave is not required for such an appeal. 33 Paragraph 23 of the Respondent's submissions stated that: "If leave (ie for the Commissioner's first ground of appeal) is granted, the Vendor (ie the Respondent) seeks leave to file a further statement of Geraldine Doney setting out the correct position in relation to her use and occupation of the property at the time of sale" (brackets and words in italics added). If by this paragraph, the Respondent intended to apply for leave for a review of the merits, then it is not clear that such leave should be granted. The High Court authority cited by the Respondent against the Commissioner, namely, Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 would appear to need to be (and has not been) addressed by the Respondent in the context of such an application for leave. This is because the evidence sought to be admitted by the Respondent is evidence that contradicts the evidence produced by the Respondent at the proceedings at first instance and is evidence that could have been produced by the Respondent during those proceedings. 34 The Respondent argued that incorrect evidence on the disputed findings of fact was tendered and not disputed by the Respondent during the proceedings below because neither the Commissioner nor the Tribunal below focused at the time, on the point of law raised in the Commissioner's first ground of appeal. However, this argument is not persuasive given that: a) under s100(3) of the TAA, it is the applicant that has the onus of proving the applicant's case in an application for review; and b) the application for review of the Respondent was for the review of the Commissioner's decision under s162B(4) of the Duties Act, not a review of the grounds for his decision (see s96(1) of the TAA). 35 The Respondent had the onus under s100(3) of the TAA of proving that the Commissioner's decision under s162B(4) of the Duties Act was incorrect, not merely an onus of proving that the grounds for the decision were incorrect. 36 Although the Commissioner indicated in his submissions in reply, that he now accepted that the subject land was not tenanted at the liability date (at paragraph 4), the Commissioner disputed that the Respondent was in use and occupation of the subject land as her principal place of residence at the liability date. The Commissioner submitted that there appeared to be no dispute by the Respondent that she did not reside at the subject land after vacating it (paragraph 11). 37 The Respondent has not established that the evidence sought to be admitted by the Respondent falls within the exception contemplated by Whisprun Pty Ltd v Dixon (2003) 200 ALR 447. Absent a review of the merits with leave of the Appeal Panel, the findings of fact by the Tribunal below remain undisturbed (Paing Pty Ltd & Ors v Golden Harvest (Aust) Pty Ltd [2003] NSWSC 750). This is the position that pertains in the context of the Commissioner's application for an extension of time of one day under s113(3)(b) of the ADT Act. Merits of the first ground of appeal 38 Re-stated, the first ground of appeal was that the Tribunal below misconstrued s162B(4) of the Duties Act in error of law. The Commissioner submitted that on a proper construction of the Duties Act, the discretion in s162B(4) may only be invoked if, as at the liability date, the subject land is used and occupied as the principal place of residence of the vendor (Chief Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50). 39 S162B(4) of the Duties Act that applied from 1 June 2004 to 14 December 2004 provided that: "Despite any other provision of this Act, the principal place of residence exemption is also taken to apply to any land used and occupied as a principal place of residence if the Chief Commissioner is satisfied that it is fair and reasonable for the exemption to apply in the particular case". 40 According to Section 162B(4), no discretion exists if land is not used and occupied as a principal place of residence (as defined in Section 162A(1) of the Duties Act). The question is, when? 41 S162B(3) is expressed in terms that land is not used and occupied as the principal place of residence of a person unless: "(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes for a period of at least 2 years ending immediately before the date on which, but for this Division, a liability for vendor duty would arise, or (b) the land has been used and occupied by the person for residential purposes and for no other purposes for a total period of at least 3 years in the 5 years ending immediately before the date on which, but for this Division, a liability for vendor duty would arise and during those 3 years no other land was used and occupied by the person for residential purposes, or (c) if the vendor became an owner of the land less than 2 years before the date on which, but for this Division, a liability for vendor duty would arise, the Chief Commissioner is satisfied that the land has been used and occupied by the person as the person's principal place of residence since the vendor became an owner of the land". 42 Schedule 4(1) of the Second Schedule provides that: "If the Chief Commissioner is satisfied that land to which a vendor duty transaction relates has been occupied by the vendor as his or her principal place of residence for a period ending within 6 months before the liability date, that use and occupation is taken, for the purpose of the principal place of residence exemption, to have continued until the liability date." 43 S162H(2) is expressed in terms that the farm exemption applies to land used for primary production in the course of carrying on a business of primary production: (a) for a continuous period of at least 2 years ending immediately before the date on which, but for this Division, a liability for vendor duty would arise, or (b) for a total period of at least 3 years in the 5 years ending immediately before the date on which, but for this Division, a liability for vendor duty would arise, or (c) in any other case, for such other period as the Chief Commissioner may allow. 44 In this case, the liability date was the date of first execution of the subject agreement for sale (s150(2)). 45 The Tribunal below found (at paragraph 31) that "It is true that she (ie the Respondent) was not living in it (ie the subject land) at the time because, for good and proper reasons she had vacated the Residence (ie the subject land) in order to live firstly in the Rental Home and thereafter (for a short period prior to sale of the Residence) in the second Artarmon property" (brackets and words in italics added). The Tribunal below also found (at paragraph 19) that Clause 4 of Schedule 2 was not applicable. No other clauses in Schedule 2 were relevant. In other words, the findings of the Tribunal below were that immediately prior to the liability date, the land was neither actually nor deemed under Schedule 2 to have been used and occupied as the principal place of residence of the Respondent. Yet, the Tribunal below held that s162B(4) applied and that in the circumstances, the Commissioner should have exercised his discretion in favour of the Respondent. 46 This conclusion of the Tribunal below necessarily means that on that Tribunal's construction of s162B(4), actual or deemed use and occupation of land as a principal place of residence of the vendor at or immediately prior to the liability date was not a pre-requisite for the section to apply. 47 The construction of s s162B(4) adopted by the Tribunal below effectively involved the words "at any time" being implied into the section in the context of the use and occupation of the land. It is not clear that this is a correct interpretation of the Section. 48 I find that the Commissioner's submission that the Tribunal below misconstrued s162B(4) is arguable. I do not however agree that the construction proffered by the Commissioner, that s s162B(4) may only be invoked if, as at the liability date, the subject land is used and occupied as the principal place of residence of the vendor, is necessarily the correct one. It may be argued that the scheme of the vendor duty exemptions which relate to use of the land by the vendor focus on the time immediately before the liability date and that accordingly, on a proper construction of s162B(4), the section may only be invoked if, at or immediately before the liability date, the subject land is used and occupied as the principal place of residence of the vendor. 49 That the legislature might have intended the discretion in s162B(4) to be limited to circumstances where the subject land was, either actually or, deemed under Schedule 2 to have been, used and occupied as the vendor's principal place of residence at or immediately prior to the liability date, is supported by the amendment that was made to Clause 4 of Schedule 2 by the State Revenue Legislation Further Amendment Act 2004. That amendment inserted into Clause 4, an additional sub-clause (4) which gave the Commissioner a discretion, if there was a good reason for doing so, to extend the period of 6 months referred to in sub-clause (1) in a particular case. That amendment would not have been necessary if the Commissioner's discretion under s162B(4) extended to circumstances contemplated by Clause 4(1) of Schedule 2, that is, to circumstances where occupation of land as the principal place of residence of a vendor ended more than 6 months before the liability date. 50 This is confirmed by the Explanatory Note to the State Revenue Legislation Further Amendment Bill 2004 which, on enactment, inserted sub-clause (4) in Clause 4 of Schedule 2. That Explanatory Note recited as follows: "(f) The vendor duty concession that applies to the sale of a former principal place of residence within 6 months of ceasing to occupy the residence will be broadened so that (i) the Chief Commissioner will be able to extend the period of 6 months if satisfied that there is good reason for doing so, and (ii) an owner who ceased occupation within 6 months before 1 June 2004 (the commencement of the vendor duty provisions) will get the concession if they sell within 6 months after 1 June 2004. See Schedule 1 [22] and [24]." 51 If s162B(4) extended to circumstances where occupation of land as the principal place of residence of a vendor ended more than 6 months before the liability date, the legislature would have had no need to "broaden" the vendor duty concession in Clause 4(1) of the Second Schedule as referred to in the Explanatory Note, by giving the Commissioner another discretion in Clause 4(4) of Schedule 2. 52 At paragraph 17 of the decision below, it was held that "…clause 4 (4) of Schedule 2 came into effect, as will be noted later in this decision, after the sale". This is not correct. Under Clause 43(1) of Part 19 of Schedule 1 of the Duties Act (which was inserted by the State Revenue Legislation Further Amendment Act 2004), the amendment to Clause 4 of Schedule 2 was deemed to have taken effect as if it had commenced on 1 June 2004 (as referred to in the Explanatory Note quoted above). However, it was still not open for the Respondent to have applied for an extension of time under Clause 4(4) of Schedule 2 because, based on the findings at paragraphs 13 and 31 of the decision below, income was derived from the use or occupation of the land since the actual use or occupation of the land by the Respondent ceased (Clause 4(3) of Schedule 2). 53 For the foregoing reasons, a construction of s162B(4), that gives the Commissioner a discretion where the subject land is used and occupied as the principal place of residence (as defined in s162A(1) of the Duties Act) of the vendor "at any time", is arguably incorrect. 54 A purported exercise by the Commissioner of a discretion under s162B(4), in circumstances where, at the relevant time, the subject land was neither actually nor deemed, by virtue of one of the provisions in Schedule 2 to have been, used and occupied as the principal place of residence of the vendor, would be beyond power - ultra vires. 55 Based on the findings of fact at first instance, the subject land was neither actually nor, deemed under Schedule 2 to have been, used and occupied as the Respondent's principal place of residence at or immediately prior to the liability date. If s162B(4), properly construed, only applies where, at or immediately prior to the liability date, the land is used and occupied as a principal place of residence, then s162B(4) could not have applied to the facts at first instance. This would be an error of law. Conclusion 56 For the reasons given, my decision would be to allow an extension of time, of one day, under s113(3)(b) of the ADT Act in respect to the Commissioner's first ground of appeal and allow the Commissioner to argue the first ground of appeal that the Tribunal below misconstrued s162B(4) of the Duties Act in error of law. 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.