Monisse v Chief Commissioner of State Revenue [2023] NSWCATAP 27
Background
The Appellant appealed the Tribunal’s decision on 18 August 2022 to affirm the Land Tax Notice of Assessment dated 11 February 2021 (the “Assessment”) (see Monisse v Chief Commissioner of State Revenue [2022] NSWCATAD 276. The Assessment taxed the Appellant’s discretionary trust for surcharge land tax from 2017-2021 (“Relevant Tax Years”), because the Appellant did not amend the trust deed by 31 December 2020, as required by s. 5D of the Land Tax Act 1956 (“LT Act”).
The Appellant’s case in the Tribunal was summarised at [11] as follows:
- The Assessment was not correct in circumstances where the Appellant was not made aware of the effect of the changes made to the LT Act or of the need to amend the trust deed; and
- The failure of the Chief Commissioner or another government entity to make him aware of the amendments referred to is unfair and that failure constitutes an estoppel against the Chief Commissioner issuing the Assessment.
The Tribunal held there was no legal basis to uphold the Appellant’s claims on the basis of fairness or justice and that no conduct or representation by the Chief Commissioner was regarded at law as constituting an estoppel to prevent the Chief Commissioner from issuing an assessment.
Appeal proceedings
The Appellant lodged the Notice of Appeal (“the Notice”) on 20 October 2022 but pursuant to cl. 25 of the Civil and Administrative Tribunal Rules 2014 (“the Rules”), the appeal was required to be filed on or before 18 September 2022.
The Notice did not seek an order that time be extended to file the appeal.
The Appellant claimed the reason for the delay in filing the Notice with the Tribunal was that he was awaiting a determination on whether the Decision would be amended following to correspondence sent by the Chief Commissioner to the Tribunal noting a number of typographical errors in the Tribunal’s decision: [20]. The Appellant was further delayed because he initially made a complaint to the Tribunal, who advised the Appellant that the appropriate action was to lodge an appeal.
The Chief Commissioner consented to time being extended for lodgement of the appeal.
The grounds for the appeal were:
- The Assessment and the Tribunal’s decision were unfair given the Appellant’s record of always complying with his legal obligations and given that the Appellant was not made aware of the changes to the LT Act.
- The Appellant suffered procedural unfairness because he raised a number of questions about the conduct of officers of the Chief Commissioner, but these questions were not answered, and he was not permitted to require his questions be addressed by the Chief Commissioner.
The statutory framework
Section 5A of the LT Act imposed surcharge land tax in respect of land owned by a foreign person from the 2017 land tax year. S. 5D of the LT Act, which came into effect in June 2020, provides that the trustee of a discretionary trust is taken to be a foreign person for the purposes of s. 5A of the LT Act, if the trust does not prevent a foreign person from being a beneficiary of the trust.
Section 5D of the LT Act provided that if a discretionary trust prevents a foreign person from being a beneficiary, then the trustee is not considered to be a foreign person.
Included with the introduction of s. 5D of the LT Act were transitional provisions (contained in clause 66 of Schedule 2 of the Land Tax Management Act 1956), which provided that if a trust deed is amended prior to 31 December 2020 so as to prevent foreign persons from being a beneficiary then s. 5D(2) of the LT Act is engaged, by which the trustee is not considered to be a foreign person.
Submissions
The Appellant submitted that:
- He had been denied answers to the questions he put to the Chief Commissioner which concerned the failure of the Chief Commissioner to send communications to the Appellant via email rather than via post and a more general failure of the Chief Commissioner to inform the Appellant of the ramifications caused by the introduction of s. 5D of the LT Act.
- Having regard to his excellent record, the Chief Commissioner should have waived the imposition of the surcharge land tax given the Chief Commissioner’s failure to ensure that he had received the relevant communications.
The Chief Commissioner submitted that he did not have a duty to notify individual taxpayers of the legislative amendments that were introduced in relation to s. 5D of the LT Act and that he did not have the discretion under the law to waive surcharge land tax.
Decision
The Appeal Panel agreed that to constitute an error of law, the Appellant must establish that the Chief Commissioner failed to comply with a duty to answer the Appellant’s questions or that the Tribunal failed to consider that duty.
The Appeal Panel concluded:
- the Chief Commissioner did not have a duty to answer the Appellant’s questions and that the Tribunal had correctly and without error dealt with these issues.
- matters relating to unfairness were not a basis to set aside the Assessment, and no conduct or representation by the Chief Commissioner could estop the Chief Commissioner from issuing an assessment.
- there was no duty on the Chief Commissioner to protect the taxpayer or to warn the taxpayer of a new tax.
In determining not to grant leave for the Appellant to lodge his appeal out of time, the Appeal Panel concluded that the Appellant had not identified any relevant question of law and there was no reasonable ground for appeal. The Appeal Panel also reiterated the need for Tribunals to be efficient to ensure that proceedings are not unduly prolonged and come to finality within a reasonable time frame.
Orders
- An extension of time for the lodgement of the appeal is refused
- Appeal Dismissed
Link to the decision