Smith v Chief Commissioner of State Revenue [2008] NSWADT 170

CITATION: Smith v Chief Commissioner of State Revenue [2008] NSWADT 170

DIVISION: Revenue Division

APPLICANT Susan Gai Smith PARTIES: RESPONDENT Chief Commissioner of State Revenue

FILE NUMBER: 076087

HEARING DATES: 1 May 2008

SUBMISSIONS CLOSED: 1 May 2008

DATE OF DECISION: 12 June 2008

BEFORE: Verick A - Judicial Member

CATCHWORDS: Jurisdiction

MATTER FOR DECISION: Preliminary matter

Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Land Tax Management Act 1956 Taxation Administration Act 1996

Boyded (Holdings) Pty Limited v Federal Commissioner for Taxation 82 ATC 4236 CASES CITED: Federal Commissioner of Taxation v Mantle Traders Pty Limited 80 ATC 4588 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

APPLICANT R Smith, agent REPRESENTATION: RESPONDENT H Al Hage, solicitor

ORDERS: The application is dismissed.

REASONS FOR DECISION 1 The Applicant seeks a review of a reminder notice sent by the Chief Commissioner of State Revenue (the "Chief Commissioner") in respect of outstanding land tax for the 2003 to 2007 land tax years. The land tax liability was in respect of an assessment issued by the Chief Commissioner under the Land Tax Management Act 1956 (NSW) ("LT Management Act"). 2 There has been ongoing correspondence between the Applicant and the Chief Commissioner in relation to land tax liability in respect of various properties the applicant owned solely or jointly with her husband. The relevant factual background relating to the application can be shortly summarised as follows. 3 On 13 February 2007, the Chief Commissioner issued adjusted Land Tax Assessment for the 2003, 2004, 2005, 2006 and 2007 land tax years, requiring the Applicant to pay $4,289.30 in land tax. 4 No payment was made in respect of the tax debt and on 4 April 2007, the Chief Commissioner issued a "Land Tax –Final Notice" which was in the following terms: "Our records show that $4 289.30 remains unpaid and is overdue for the 2004, 2005, 2003 tax year(s). Interest will continue to accrue on this debt at 13.87% per annum daily. Please pay the total amount due by 18-APR-2007 otherwise we may commence legal proceedings without further notice. If you have genuine difficulty in paying the full amount, you should contact one of my officers immediately …" 5 On 16 April 2007, the applicant's husband sent a "Notice of Objection" to the Chief Commissioner stating as follows: "I am returning your Land Tax Final Notice to you as our records indicate no Land Tax is payable. Could you kindly re-examine your records in a fair and thorough manner, as we believe yours to be an erroneous presentment. You previously had the opportunity to object to the payment of the alleged public debt via the return to your office of a duly endorsed instrument sent from your office and you failed to object within the time specified. We deem ourselves not to be in any way in default, or dishonourable in this issue, as we have responded in a timely and responsible way at all times. I apologise if this correspondence reaches your office late, it seems the post can take up to four days to and from Sydney. Please treat this as a formal objection to your claims." 6 On 28 May 2007, the Chief Commissioner sent the applicant a letter in the following terms: "Re: Land Tax Objection Notice Cn: 51629556 Dear Mrs Smith Thank you for your letter that objected to the land tax assessment issued on 13 February 2007. We have considered your reasons carefully, however we have unfortunately decided to disallow your objection. We are satisfied that the aforementioned assessment was issued correctly. If you are dissatisfied with our decision you may request the Administrative Decisions Tribunal or the Supreme Court to review the decision within sixty (60) days of the date of this letter …" 7 On 22 June 2007 an application to review the Chief Commissioner's decision made on 28 May 2007 was filed with the Tribunal by the Applicant's husband in his own name as the applicant. The reasons for the application were as follows: "Don't owe the alleged debt, is paid" 8 At a directions hearing on 13 November 2007, the Applicant was substituted as the Applicant in place of her husband because she owned the properties. 9 At the hearing the Applicant's agent confirmed that the properties included in the relevant assessment were owned by the applicant but submitted that until a proper tax invoice to establish the debt is issued by the Chief Commissioner, there was no land tax liability. Some reliance was also placed on a written submission entitled "Notice Of Dishonour and Opportunity To Cure" with attachments. The Chief Commissioner's case was essentially that the application did not disclose any grounds for review. 10 I think this matter raises the more important question as to whether the Tribunal has any jurisdiction to consider this application. It is well settled in law that jurisdiction is a question of law and is governed by the terms of the enactment that confers jurisdiction on a court or a tribunal: see Boyded (Holdings) Pty Limited v Federal Commissioner of Taxation 82 ATC 4236 and Federal Commissioner of Taxation v Mantle Traders Pty Limited 80 ATC 4588. It is also not a matter for the parties by conduct, agreement, omission, error, neglect or otherwise to confer jurisdiction on the Tribunal if none exists in law. 11 In the case of the Tribunal, its jurisdiction is found in the Administrative Decisions Tribunal Act 1997 ("the ADT Act") and in relation to revenue applications, it is conferred with jurisdictional powers by the Taxation Administration Act 1996 ("TA Act") to review decisions made by the Chief Commissioner on objections to assessments and decisions made by the Chief Commissioner under various taxation laws. 12 Under section 38 of the ADT Act the "Tribunal has jurisdiction under an enactment to review a decision (or a class of decisions) if the enactment provides that applications may be made to it for a review of any such decision (or class of decisions) made by an administrator: (a) in the exercise of functions conferred or imposed by or under the enactment, or (b) in the exercise of any other functions of the administrator identified by the enactment." 13 Section 96 of the TA Act provides that a taxpayer may apply to the Tribunal for a review of a "decision of the Chief Commissioner that has been the subject of an objection". Under section 86 of the TA Act, a "taxpayer dissatisfied with: (a) an assessment that is shown in a notice of assessment served on the taxpayer, or (b) any other decision of the Chief Commissioner under a taxation law, may lodge a written objection with the Chief Commissioner". The meaning of "taxation laws" for purposes of the TA Act is set out in section 4 of the TA Act and includes the LT Management Act and the TA Act. 14 The jurisdictional question in this matter is whether the objection decision for review was made by the Chief Commissioner in relation to an assessment or any other decision of the Chief Commissioner under a taxation law. 15 The meaning of the term "decision" is not defined in the TA Act. The TA Act adopts the meaning of the term as set out in section 6 of the ADT Act. Section 6 of the ADT Act provides for an extended general meaning of "decision" as follows: "A decision includes any of the following: (a) making, suspending, revoking or refusing to make an order or determination, (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission, (c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument, (d) imposing a condition or restriction, (e) making a declaration, demand or requirement, (f) retaining, or refusing to deliver up, an article, (g) doing or refusing to do any other act or thing." 16 But for purposes of the ADT Act, jurisdiction to review a reviewable decision made under an enactment, is by section 6(2) of the ADT Act confined to decisions "made in the exercise (or purported exercise) of a function conferred or imposed by or under the enactment". The Tribunal will accordingly have jurisdiction to review a decision only if "an ultimate or operative determination and not mere expression of opinion or statement which can of itself have no effect on a person" is made by an administrator. (See: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 335-338). 17 In this matter, the Chief Commissioner's "Land Tax - Final Notice" dated 4 April 2007 to the Applicant, was a mere reminder informing her of her outstanding land tax liability which remained unpaid. It was not an assessment or a notice of any "ultimate or operative determination" made by the Chief Commissioner in the exercise of a function conferred or imposed by or under the LT Management Act or the TA Act. 18 The Applicant's response to the notice was her "Notice of Objection" and in returning the Chief Commissioner's Land Tax Final Notice indicated that it was issued in error and that the Applicant was not in any default. 19 Clearly, the Chief Commissioner erred in treating the Applicant's response as a notice of objection, perhaps due to its description by the Applicant. It was not an objection against any assessment issued by the Chief Commissioner or against any reviewable decision made by the Chief Commissioner under a taxation law. 20 In the letter to the Applicant dated 28 May 2007, the Chief Commissioner erroneously proceeded to disallow the "objection" and indicate to the applicant her further rights of review, which led to the current application being lodged by the Applicant. The Chief Commissioner was in error to treat the notice sent by the Chief Commissioner informing the Applicant of her outstanding land tax liability, as either an assessment or a decision made under a taxation law for purposes of the objection provisions of the TA Act. The Chief Commissioner did not have any jurisdiction under the law to treat the letter from the applicant as an objection. The Tribunal likewise has no jurisdiction to review an objection decision that was not made in accordance with the law. 21 On the assumption that there was a proper objection decision before the Tribunal, this application can be dismissed on the grounds that the Applicant has not raised any issues for determination of her land tax liability or any proper grounds for review of the assessment issued to her. 22 In respect of the land tax liability, the Chief Commissioner sent a proper notice of assessment to the Applicant but the Applicant did not lodge an objection against the assessment. As correctly submitted by the Chief Commissioner, the Applicant did not rely on any exemption under the LT Management Act to challenge her liability to pay land tax. The Applicant has in those circumstances failed to discharge the onus placed on her under section 100(3) of the TA Act of demonstrating that she had been incorrectly assessed to the land tax liability. 23 Accordingly, I must dismiss this application. Orders The application is dismissed.