CITATION: Murray v Chief Commissioner of State Revenue [2010] NSWADT 214 DIVISION: Revenue Division APPLICANT John Melvyn Murray PARTIES: RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 106023 HEARING DATES: 3 August 2010 SUBMISSIONS CLOSED: 3 August 2010 DATE OF DECISION: 26 August 2010 BEFORE: Verick A - Judicial Member CATCHWORDS: Jurisdiction Taxation Administration Act 1996 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Land Tax Management Act 1956 Telstra Corporation Limited v Chief Commissioner of State Revenue [2004] NSWADT 190 CASES CITED: Dickson Carriers Pty Ltd and Anor v Chief Commissioner of State Revenue [2008] NSWADT 64 Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 APPLICANT In person REPRESENTATION: RESPONDENT H El-Hage, counsel ORDERS: The Tribunal has jurisdiction to review only the assessment issued on 17 September 2009 for the 2006-2009 land tax years. REASONS FOR DECISION 1 At the directions hearing on 26 May 2010, the applicant raised a jurisdictional issue as to the relevant land tax years that the Tribunal was required to review. The applicant's case was that the review was in respect of his land tax liability for the 2001- 2009 land tax years. The respondent took the view that the Tribunal only had jurisdiction to review the 2006-2009 land tax years. The application was listed for a preliminary hearing on 3 August 2010 to determine the jurisdictional issue. Factual background 2 At the preliminary hearing this matter proceeded on the basis that all the relevant documents to determine the jurisdictional issue were in the bundle of documents provided by the respondent under s 58 of the Administrative Decisions Tribunal Act 1997 ('the ADT Act"). One important document, a letter from the applicant to the respondent dated 21 August 2005, was referred to by the respondent in his submissions and in his written chronology but was not included in the documents furnished to the Tribunal. 3 The facts as set out in the written submissions by both parties and as extracted from the s 58 documents are as follows (and also in respect of some correspondence referred to in greater detail in the reasons below). 4 On 26 July 2005, the respondent issued an assessment for land tax to the respondent under the Land Tax Management Act 1956 (the "LT Management Act") for the land tax years 2001-2005 in respect of four properties owned by the applicant - one property was situated in Katoomba, two in Merewether and one in Wangi Wangi. He was given the principal place of residence exemption for another Merewether property, which was used by the applicant as his residence. 5 The applicant had some discussions with an officer of the respondent on 20 August 2005 and, on the following day, he sent a letter to the respondent to elaborate on the matters discussed. Attached to the letter was a Land Tax Questionnaire in which the applicant requested an exemption in respect of the Katoomba property and one of the Merewether properties on the grounds that they were used for primary production. 6 On 10 October 2005, in a letter to the applicant, the respondent referred to the claim made by the applicant and forwarded a primary production form to be completed and returned to the respondent to assess his claim for exemption. 7 On 22 October 2005, the applicant lodged two Primary Production Land Questionnaires in which he claimed that the property situated at Katoomba and his principal place of residence at Merewether were exempt from land tax as he was carrying on a horticulture business at these two properties. 8 There was a long period of inaction until 8 August 2008 when the respondent advised the applicant that recovery of outstanding land tax would be suspended pending a review of the applicant's claim for the primary production exemption for his properties. The respondent also requested that the applicant provide information concerning the actual usage of his properties. 9 On 17 August 2008, the applicant provided further information to the respondent by lodging a Land Tax Questionnaire in which he claimed that he was carrying on a horticulture business at the Katoomba property and was accordingly entitled to the primary production exemption for that property. 10 The respondent did not respond to the applicant's claim for more than a year until on 17 September 2009 the respondent informed the applicant that his claim for primary production exemption for the Katoomba property for the 2001-2009 land tax years had not been accepted. In addition, the respondent enclosed an assessment for land tax years 2006-2009 and a copy of the land tax assessment issued to the applicant on 26 July 2005. The assessment for the 2006-2009 land tax years was in respect of the same four properties that were the subject of the respondent's assessment for the 2001-2005 land tax years. 11 The applicant responded with letters received by the respondent on 14 October 2009, 13 November 2009 and 30 November 2009. In his letter received by the respondent on 14 October 2009, the applicant attached a 26-page reply setting out in some detail his primary production activities on the properties, which he claimed were exempt. In his letter received on 13 November 2009, the applicant indicated his objection to the amounts demanded from him for the various land tax years and, in short, also indicated that his property in Katoomba "was essentially for horticulture business". In the letter received on 30 November 2009, the applicant raised further grounds to be considered as part of his objection. 12 On 12 January 2010, the respondent wrote to the applicant and referred to the applicant's "objection received 13 November 2009". In the letter the respondent informed the applicant that under s 88 of the Taxation Administration Act, 1996 ("the TA Act") 'the objector has the onus of proving the objector's case including providing any necessary evidence". To assist in determining the objection, the respondent requested further information concerning the properties for the period July 2005 "till the present". 13 The applicant, in a letter dated 2 February 2010, provided details of his horticulture business and enclosed copies of his income tax return for 2008-2009 financial year to support his claim. 14 On 3 March 2010 the Chief Commissioner, in a letter headed "Re: 2006-2009 Land Tax Objection", referred the applicant to his objection received on the 13 November 2009 that objected to the land tax assessment issued on 17 September 2009 and, in disallowing the objection, gave reasons for rejecting the various claims made by the applicant. The applicant, as required by s 93(2B) of the TA Act, was also informed that if he was not satisfied with the Chief Commissioner's decision, of his rights to request the Administrative Decisions Tribunal or the Supreme Court to review the decision. 15 On 19 April 2010, the applicant lodged his application for review at the Tribunal. In the application, the applicant stated that the objection lodged with the Chief Commissioner was on 2 February 2010 and that the date of the decision for review was 3 March 2010. The letter dated 3 March 2010 from the Chief Commissioner was attached to the application. In addition, the applicant attached a detailed submission relating to his dispute with the Chief Commissioner. Relevant Legislative Provisions 16 The jurisdiction of the Tribunal is governed by the Administrative Decisions Tribunal Act 1997 ("the ADT Act"). In particular, the Tribunal under s 36(1) of the ADT Act is given jurisdiction to review a "reviewable decision", defined in s 8(1) to mean "a decision of an administrator that the Tribunal has jurisdiction under an enactment to review". Pursuant to s 38(1) the Tribunal is conferred with jurisdiction to review a reviewable decision if an enactment provides that application may be made to it for a review of any such decision. 17 The relevant "enactment" for purposes of this application is the Taxation Administration Act 1996 ("the TA Act"). Section 103A of the TA Act provides, inter alia, that the Tribunal has no jurisdiction or power to consider any question concerning an assessment or other decision of the Chief Commissioner under a taxation law (including the determination of an objection) except as provided by Part 10 of the TA Act. "Taxation Law" is defined in s 4 of the TA Act to include, relevantly, the LT Management Act. 18 The provisions relating to the objection and review process as set out in Part 10 of the TA Act, relevant for purposes of this application, are as follows. 19 A person dissatisfied with an assessment issued by the respondent is entitled to in the first instance to lodge under s 86 an objection with the Chief Commissioner. Section 86 provides as follows: " 86 Objections (1) A taxpayer who is dissatisfied with: (a) an assessment that is shown in a notice of assessment served on the taxpayer, or (b) any other decision (within the meaning of section 6 of the Administrative Decisions Tribunal Act 1997 ) of the Chief Commissioner under a taxation law, may lodge a written objection with the Chief Commissioner. (2) However, a taxpayer may not lodge such an objection in respect of the following: (a) an assessment made under section 12 (Compromise assessment) with the agreement of the taxpayer, (b) the determination of an objection under this Part (including such part of any reassessment that gives effect to the determination of an objection that is allowed in whole or in part), (c) a decision to reassess the taxpayer's tax liability that does not have the effect of increasing that liability where the taxpayer seeks to lodge the objection more than 60 days after the date of service of notice of the initial assessment, (d) a decision not to reassess the tax liability where the taxpayer seeks to lodge the objection more than 60 days after the date of service of the notice of the initial assessment. (3) The provisions of subsection (2)(c) and (d) do not preclude the lodgement of an objection that is sought to be lodged more than 60 days after the date of service of the notice of the initial assessment if the Chief Commissioner permits its lodgement. The provisions of section 90 (2)-(5) apply to any such objection in the same way as they apply to an objection referred to in section 90 (1)." 20 Section 87 requires the grounds of the objection to "be stated fully and in detail, and must be in writing". 21 Under s 88 on "an objection, the objector has the onus of proving the objector's case". 22 There is a 60-day period after the date of service of the notice of assessment within which the objection can be lodged: s 89. The Chief Commissioner is, however, given discretion under s 90 to "permit a person to lodge an objection after the 60-day period". 23 The Chief Commissioner is required under s 91 to "consider an objection and either allow the objection in whole or in part or disallow the objection". Pursuant to the provisions in s 93, the "Chief Commissioner must give notice to the objector of the determination of the objection" and the "Chief Commissioner must, in the notice, give the reasons for disallowing an objection or allowing an objection in part only". 24 Division 2 of Part 10 provides for review of a decision of the Chief Commissioner. Under s 96 a taxpayer may apply to the Administrative Decisions Tribunal for a review: 96 " Review by Administrative Decisions Tribunal " (1) A taxpayer may apply to the Administrative Decisions Tribunal for a review of a decision of the Chief Commissioner that has been the subject of an objection under Division 1 if: (a) the taxpayer is dissatisfied with the Chief Commissioner's determination of the taxpayer's objection' or (b) 90 days (not including any period of suspension under section 92) have passed since the taxpayer's objection was served on the Chief Commissioner and the Chief Commissioner has not determined the objection. (2) However, a taxpayer cannot apply to the Administrative Decisions Tribunal for a review under this section in respect of: (a) a decision of a kind prescribed by the regulations as an exempt decision for the purposes of this section, or … 25 The present matter is an application for review under s 96 to the Administrative Decisions Tribunal. As an alternative to a review under s 96, review is available by the Supreme Court: s 97. 26 Note also that s 103A found in Division 2 provides: " 103A Review or appeal by other courts of tribunals (1) No court or tribunal (or other body or person) has jurisdiction or power to consider any question concerning an assessment or other decision of the Chief Commissioner under a taxation law (including the determination of an objection under Division 1) except as provided by this Part. (2) Subsection (1) does not apply to a decision of the Chief Commissioner under Part 4, 7, 8, 9, or 11 (not being an assessment). Note . This subsection preserves the inherent jurisdiction of the Supreme Court to entertain an application for judicial review of any such decision of the Chief Commissioner." Submissions 27 The applicant's case was essentially that commencing with his letter dated 21 August 2005 his correspondence and dialogue with the respondent was clearly in respect of his land tax liability for the land tax years 2001-2009. 28 The respondent's case was that the "Tribunal is a creature of statute" and its "jurisdiction is governed by the ADT Act" and under s 38(1), "the Tribunal has jurisdiction under an enactment to review a decision 'if the enactment provides that applications may be made to it for a review of any decision'". It was further submitted that - "The relevant 'enactment' for present purposes is the TA Act . Section 103(A) of that Act makes it clear that the Tribunal does not have jurisdiction to review a decision of the Chief Commissioner, except as provided for in Pt. 10: see Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184. At [29]." 29 Mr Al Hage, in his written and oral submissions, examined the scope of the various relevant provisions in Division 1 and 2 of Part 10 and submitted that: "4.10 The Chief Commissioner does not dispute that the Tribunal has jurisdiction to review the 2009 Assessment. That assessment was the subject of a determination in the Objection Decision and, therefore, may be reviewed by the Tribunal: ss. 91, 93 and 96 of the TA Act . 4.11 The Objection Decision is clear. It is a determination of the applicant's objection to his land tax liability for the 2006-2009 land tax years, as assessed under the 2009 Assessment. The applicant made his objection to the 2009 Assessment in his letter to the Chief Commissioner received on 13 November 2009. 4.12 The Chief Commissioner submits that the Tribunal does not have jurisdiction to review the 2005 Assessment because that assessment has not been the subject of a valid objection and, in turn, an objection determination: ss. 96(1)(a) and 103A of the TA Act ; s. 38 of the ADT Act . In the absence of an objection determination, the Tribunal does have jurisdiction to review the 2005 Assessment because there is no "reviewable decision": Telstra Corporation Limited v Chief Commissioner of State Revenue [2004] NSWADT 190; Dickson Carriers Pty Ltd & Anor v Chief Commissioner of State Revenue [2008] NSWADT 64, at [14]. Section 96(1)(b) does not apply in this case." 30 Further, it was submitted by the respondent that the applicant's letter dated 21 August 2005 and his letter of 13 November 2009 were not objections in respect of the 2001-5 land tax years within the objection provisions of Part 10. The letter of 21 August 2005 was not an objection because it merely indicated that the applicant wished "to claim an exemption from land tax" under the primary production provisions. The letter of 13 November 2009 also "did not contain an objection to the 2005 Assessment" because it was a response to the respondent's decision of 17 September 2009 to refuse to "re-assess the applicant's liability for land tax under the 2005 Assessment". Alternatively, it was argued that if it was an objection, "such an objection would not have been within time: s.89 of the TA Act" and the applicant also did not "seek permission to lodge any such objection out of time: s. 90(2)". Discussion and Reasons 31 The issue for determination was essentially whether the objection decision made by the Chief Commissioner on 3 March 2010 was in relation to all the years in dispute or merely those in the assessment issued on 17 September 2009, which were the land tax years 2006-2009. 32 The respondent's correspondence dated 17 September 2009 constituted three different documents. Firstly, there was the letter informing the applicant that his claim for primary production exemption had "not been allowed" for the Katoomba property "from 2001-2009" land tax years. The second document attached to the letter was a fresh land tax assessment dated 17 September 2009 for the 2006-2009 land tax years for the properties owned by the respondent. The third document, also attached to the letter, was a copy of the land tax assessment issued by the respondent on 26 July 2005 for the land tax years 2001-2005. 33 The applicant responded to the correspondence dated 17 September 2009 with a lengthy submission received by the respondent on 13 October 2009 setting out details of how he managed his horticulture business and with three further letters (received by the respondent on 4, 13 and 30 November 2009) generally disputing his land tax liability. 34 On 12 January 2010, the respondent in his response to the various letters referred to the applicant's letter received on 13 November 2009 as an objection for the 2006-2009 land tax years and further requested "the following information by the 9 February 2010 -Details of your residential history from July 2005 till the present; -Complete copies of your submitted and signed income tax returns for all years relating to your objection; -The residential addresses for all properties that been leased by you between the dates of July 2005 till present. Also provide the dates that these properties have been leased from and the income received per month from these tenancies." 35 On 5 February 2009 the respondent received the applicant's response including a copy of his 2009 income tax return. It was headed "Re: Land Tax Objection 2006-9 and prior OSR correspondence and request dated 12/1/2010". 36 Against the above factual background, the Tribunal needs to consider whether its jurisdiction in relation to the application extends to only 2006-2009 land tax years or extends to all the years from 2001 to 2009 land tax years. 37 The scheme of the relevant provisions dealing with objections and reviews to determine this question was examined by the Full Supreme Court (Giles, Basten and Campbell JJA) in Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184. His Honour Basten JA (Giles and Campbell JJA agreeing) who handed down the principal judgment made the following instructive observations: 27 Importantly, the review provided by s 97 (consistently with s 96) is limited to a decision "that has been the subject of an objection under Division 1": s 97(1). Accordingly, a decision to which an objection cannot be taken, and a decision to which an objection has not been taken, will not fall within the scope of s 97 (providing a review by this Court), but will fall within the exclusion in s 103A(1). 28 It is also important to note that the right of review under s 97 is given by reference to the operative decision of the Chief Commissioner and not to a ruling made on an objection. Although the existence of an objection is a necessary precondition to the power of review by the Court, and it is the taxpayer's dissatisfaction with the determination of the objection which provides standing to seek review, it is the initial decision which is the subject matter of the review. Consistently, the parties are not limited to the grounds of the objection in relation to the application for review: s 100(2). Further, it is the original assessment or other decision which is confirmed, revoked or replaced: s 101(1)(a) and (b). 29. There are assessments and other decisions which fall within s 86(2), as to which a taxpayer may lodge an objection. Such a decision cannot be the subject of review under ss 96 or 97. It would be surprising if, given that policy, judicial review might be available under s 69 of the Supreme Court Act in relation to those assessments or decisions. Section 103A imposes a blanket "no jurisdiction" embargo, except as provided by Part 10 itself. If Part 10 provides no exception, the embargo would apply. 30 Where the Chief Commissioner refuses permission to lodge an objection after the 60 day period, there seems to be no reason why a written objection may not be lodged with respect to that decision. If an objection were to be lodged, but rejected, there would appear to be statutory power to review the decision to refuse permission to lodge out of time an objection to an assessment. That would mean that a general review would be available under ss 96 or 97, a conclusion which would suggest strongly that such decisions were not to be treated differently for the purpose of the privative clause in s 103A from other decisions which might be subject of review. 38 In respect of the relevant correspondence dated 17 September 2009, the only decision made by the respondent that the applicant was entitled to object to under s 86 was the assessment dated 17 September 2009 issued by the respondent for land tax years 2006-2009. The respondent treated the applicant's letter received on 13 November 2009 as an objection to that assessment. The subsequent correspondence between the parties also referred to the assessment for the 2006-2009 years, although the applicant's responses were in very general terms and could be read to deal with his total land tax liability. The respondent's determination of the objection as conveyed to the applicant also referred clearly to the "2006-2009 Land Tax Objection". In the application to the Tribunal the applicant also relied on the determination made by the respondent on 3 March 2010. 39 As pointed out by the Court of Appeal in Paspaley, the jurisdiction of the Tribunal in relation to revenue applications is governed by s 96 of the TA Act. The review provided by s 96 is "limited" to a decision of the Chief Commissioner that has been the subject of an objection under Division 1 of the TA Act. In this matter, the only decision that fell under these provisions was the Chief Commissioner's assessment made on 17 September 2009 in respect of the applicant's land tax liability for the 2006-2009 land tax years. Section 103A, referred to by the Court of Appeal in Paspaley as "the privative clause" provides that a decision to which an objection cannot be taken, and a decision to which an objection has not been taken, will not fall within the scope of s 96. 40 The copy of the assessment issued on 26 July 2005 for the 2001-2005 land tax years was merely attached to the correspondence dated 17 September 2009 to inform the applicant of his outstanding land tax liability for those land tax years. 41 Accordingly, the only decision that is properly before the Tribunal is the assessment for the 2006-2009 land tax years. 42 The applicant claimed that the letter dated 21 August 2005 to the respondent was an objection to the assessment issued on 26 July 2005. The respondent's case was that the applicant has not, pursuant to s 89 of the TA Act lodged an objection within 60 days against the assessment issued on 26 July 2005 for the 2001-2005 land tax years and that the applicant has also not applied to lodge an objection out of time under s 90 of the TA Act. The Tribunal has no jurisdiction to consider these claims because, as explained above, the Tribunal's jurisdiction in this matter is limited to review only the respondent's assessment dated 17 September 2009 for the 2006-2009 land tax years. Order The Tribunal has jurisdiction only to review the assessment issued on 17 September 2009 for the 2006-2009 land tax years. 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.