Commissioner of State Revenue v Harrison [2022] QCATA 102

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Commissioner of State Revenue v Harrison [2022] QCATA 102 PARTIES: COMMISSIONER OF STATE REVENUE (applicant/appellant) v FRANCIS LISTER HARRISON (respondent) APPLICATION NO/S: APL141-21 ORIGINATING APPLICATION NO/S: GAR080-16 MATTER TYPE: Appeals DELIVERED ON: 25 July 2022 HEARING DATE: 12 July 2022 HEARD AT: Brisbane DECISION OF: Judicial Member D J McGill SC ORDERS: The order of the Tribunal of 20 April 2021 is amended by including in it an order pursuant to the Taxation Administration Act 2001 (Qld) s 61(1)(c) that the appellant pay interest in accordance with s 61 on any resulting overpayment. Any procedural requirement which would otherwise prevent me from making such an order be waived. The appeal is otherwise dismissed. CATCHWORDS: ESTOPPEL – ESTOPPEL BY JUDGMENT – ISSUE ESTOPPEL – APPLICATION OF ESTOPPEL MATTERS NECESSARY TO DECISION – IDENTITY OF ISSUES – TAXATION AND RATING CASES – Land tax – finding that taxpayer trustee of certain land for purposes of land tax – review of assessment in later year – whether Commissioner bound by earlier finding – whether basis of finding relevant Land Tax Act 2010 (Qld) s 19, 20 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142 Blair v Curran (1939) 62 CLR 464 Harrison v Commissioner of State Revenue [2016] QCAT 150 Kuligowski v Metrobus (2004) 220 CLR 363 -- 1 of 7 -- 2 Mango Boulevard Pty Ltd v Spencer [2010] QCA 207 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 APPEARANCES & REPRESENTATION: Applicant: M Brennan QC and F Chen, instructed by Crown Law Respondent: Self-represented REASONS FOR DECISION [1] This is an appeal from the decision of a Member who on 20 April 2021 set aside a decision of the appellant made 29 January 2016, and remitted to the appellant for reassessment of land tax for the 2015-16 financial year, on the basis that the respondent was a trustee of certain parcels of land. The Member decided that earlier proceedings in the Tribunal had resulted in an issue estoppel, preventing the appellant from relitigating that question. In this appeal, the appellant challenges that conclusion. Background [2] The respondent was at all material times the owner of three residential properties, occupied by his children and their families. In each of the 2013, 2014 and 2016 tax years the appellant assessed the respondent to land tax on the basis that the Land Tax Act 2010 (Qld) (“the LTA”) s 19 applied to the three properties. The respondent objected to those assessments, on the basis that (relevantly) he held them as trustee for the three children respectively on a constructive trust, so that the operation of s 19 was modified by the LTA s 20, but the appellant disallowed those objections. [3] The respondent applied to the Tribunal to review the decisions in respect of the 2013 and 2014 years. The Tribunal dismissed the application,1 but the respondent appealed, and the Appeal Tribunal allowed the appeal, set aside the assessments in issue and remitted the matter to the appellant for any assessment of land tax which might be made having regard to the findings made in the appeal: [2018] QCATA 75. At paragraph [94] of its reasons, the Appeal Tribunal found that the properties were held on constructive trusts, by way of either promissory estoppel or common intention. [4] The Appeal Tribunal found that the evidence showed sufficient detriment to the three children to establish a constructive trust based on the arrangements in place between the parties: [47]. Hence the Member had erred in failing to conclude that there was evidence of sufficient detriment to establish a constructive trust based on the arrangements between the parties: [48]. The appeal Tribunal went on to conclude that there was also sufficient detriment to support a constructive trust on the basis of the common intention of the parties: [52]. [5] The appellant sought leave to appeal from that decision to the Court of Appeal, but on 26 March 2019 that court, by majority, refused leave to appeal: [2019] QCA 50. The majority judges did not decide whether an error of law by the Appeal Tribunal had been shown, deciding the matter expressly on the basis that the circumstances did not justify the grant of leave to appeal even if there had been an error of law, as the appeal 1 Harrison v Commissioner of State Revenue [2016] QCAT 150. -- 2 of 7 -- 3 did not raise a question of principle which had importance beyond the confines of that present case: [67]. [6] Morrison JA dissented, concluding that there was an error of law on the part of the Appeal Tribunal – [3] – and that leave to appeal should be granted, because the case did not present a unique set of facts unlikely to be repeated precisely – [17] – and because the monetary impact assumed some importance, “given that the respondent’s arrangements may continue for some time”: [15]. That assumption is not authoritative, as it was in a dissenting judgment. The point was not dealt with by the majority judges, who said merely that no substantial injustice to the appellant was shown on a monetary basis: [30], [67]. [7] The respondent also applied to the Tribunal to review the decision in respect of the 2016 year. That was the matter which came before the Tribunal on 17 July 2020, and which led to the decision on 20 April 2021 from which this appeal has been brought. Before the Tribunal the respondent relied on the proposition that, as a result of the decision of the Appeal Tribunal in 2018, there was an issue estoppel which prevented the appellant from denying that the relevant properties were held by him on trust for the purposes of the LTA s 20 at the relevant time. Submissions of the appellant [8] The appellant submitted that there was no issue estoppel in the present matter, on the basis that the decision of the earlier Appeal Tribunal was based on a particular set of facts set out in the decision of the Tribunal at [2016] QCAT 150 at [5] to [11], together which the further facts that it found, as set out at [4] above. In the present matter, as a result of a direction of the Tribunal, the matter was to be decided on the basis of a set of agreed facts, which did not include those additional facts. There was no agreed fact as to the existence of detriment. As a result the issue before the Tribunal was not precisely the same as the issue decided by the Appeal Tribunal, so issue estoppel did not apply. The Member had erred in concluding that it did. [9] Counsel for the appellant conceded that issue estoppel could arise in relation to decisions of the Tribunal, that it was common ground that the test for issue estoppel was that set out in Kuligowski v Metrobus (2004) 220 CLR 363 at 373, and that the second and third limbs of that test had been satisfied in the present case. In dispute was whether the first limb, that precisely the same question had been decided, was satisfied.2 It was submitted that the question whether the respondent was a constructive trustee, by way of estoppel by representation or common intention, was not the same as the question addressed by the Appeal Tribunal, because of the additional finding of detriment made by the Appeal Tribunal. Further, the finding of sufficient detriment was not a finding of an ultimate fact, and did not give rise to an issue estoppel. [10] It was also submitted that the decision of the Appeal Tribunal was clearly wrong, being not based on the facts before it, and contrary to High Court authority. I had initially thought, mistakenly, that this was relied on as a way to overcome an issue estoppel, but during the hearing this was clarified, as applicable if issue estoppel did not prevent the appellant from disputing the existence of a trust in this proceeding. In that case, it was submitted that I should not follow that decision, as a matter of 2 Kuligowski (supra) at [40]. See also Blair v Curran (1939) 62 CLR 464 at 531 – 532. -- 3 of 7 -- 4 precedent, or I suppose on the basis of comity, because it was clearly wrong. If there were no issue estoppel, that submission was open. [11] It was submitted that the Appeal Tribunal had made no finding that the respondent had resiled from his promises to the children. There was no evidence of that, and that without such a finding the basis of a constructive trust did not arise, because it was only in such a situation that equity would protect the interests of the children. In those circumstances, there was no detriment shown to support such a trust. Consideration [12] In my opinion the Member was correct in concluding that the appellant was prevented by an issue estoppel from disputing that the respondent held the relevant land as trustee. What was decided by the Appeal Tribunal was that land tax was to be assessed by applying s 20, on the basis that the respondent held the relevant land on a constructive trust. That was the matter which was in dispute in that proceeding, which determined that the provisions of s 20 applied in the way relied on by the respondent. That is the same question which the appellant seeks to dispute in this proceeding. [13] The existence of an issue estoppel does not depend on whether the parties are litigating the existence of the ultimate issue on a particular basis; it depends on whether it is the same ultimate issue. For the purposes of the land tax assessment for 2013 and 2014, the issue was whether the values of the relevant land was properly aggregated under s 19, or whether that section did not apply because at the relevant time the respondent held the land as a trustee, so that s 20 applied to modify the operation of s 19. That is the issue which was before the Tribunal in 2016, and was decided in favour of the respondent by the Appeal Tribunal. It is the same issue which arose in respect of the 2016 tax year, because the events relied on as giving the status of trustee all occurred before the 2013 tax year, and it was not suggested by the appellant that anything had changed in a relevant way since 2014. If what had happened meant that the respondent held the relevant land as trustee for the purposes of s 20 in 2013 and 2014, it necessarily followed that he still held the relevant land as trustee in the 2016 tax year. [14] The whole point of issue estoppel is that, once the parties have litigated a particular issue and it has been determined by judicial proceedings, they are bound by it, and, subject to only very limited exceptions none of which was relied on by the appellant, that issue cannot be litigated again in later proceedings. It is not confined to an issue having been decided on a particular basis, and the same issue, arising on the same basis, having to be decided also in the later proceedings. Once it is identified as the same issue, it is not to be litigated in the later proceedings at all. [15] This is made clear by the passage in the judgment of Dixon J in Blair v Curran (1939) 62 CLR 464 at 531 – 532, quoted by the Member at [43] of her reasons. I need not repeat the quotation, but would identify as particularly relevant the proposition from it that: “In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established.” In the present matter, the right the respondent sought to establish was that in the 2016 year his liability to land tax was to be assessed on the basis that the LTA s 20 applied to the relevant land. In order to establish that right, he needed to show that he held the land as trustee, for the purposes of that section. That was the very question which -- 4 of 7 -- 5 was decided by the Appeal Tribunal, by the finding in its reasons at [94].3 It therefore gave rise to an issue estoppel. [16] The Member referred to relevant authorities, and I would merely add a reference to the judgment of Frazer JA, with whom Muir and White JJA agreed, in Mango Boulevard Pty Ltd v Spencer [2010] QCA 207 at [90]. His Honour quoted there a passage from the Judgment of Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 dealing with issue estoppel.4 Like res judicata, issue estoppel is based on the broad rule of public policy, expressed in the maxim interest reipublicae ut sit finis litium, it is in the public interest that there be an end to litigation.5 At some point a line has to be drawn to avoid wasting resources and oppressing parties, and the policy of the law has drawn it at a final decision, subject to any rights of appeal. Thereafter it does not matter if the parties did not litigate the issue properly by their own errors, or if the court made some error of fact or law. The decision on the issue stands, and binds the parties in the future. [17] It is to be expected that issue estoppel would apply in this case. The Appeal Tribunal found that, as a result of prior events, the respondent held the relevant land as a trustee in the taxation years 2013 and 2014. What the appellant is in substance seeking to do in this proceeding is to relitigate that point, in the hope that the earlier decision, regarded as erroneous, will be corrected. Because of issue estoppel, however, that decision must be taken to be correct in the present proceeding. It follows that the decision of the Member in this matter was correct, and the appeal must be dismissed. [18] I can understand the frustration of the appellant in being faced in this way with the outcome of the earlier proceedings. There is much that is unsatisfactory about the decision of the Appeal Tribunal. In the Court of Appeal, Morrison JA identified an error of law, for reasons which, with respect, appear persuasive. Apart from that, it seems to me that the Appeal Tribunal, when considering the issue of detriment, may have been looking at the wrong thing. Strictly speaking, the detriment which can support an estoppel is not any detriment suffered as a result of reliance on the promise or representation; it is the detriment which would be suffered as a result of the other party not keeping the promise, or resiling from the representation.6 It is the detriment which is avoided by the court’s holding the other party to that promise or representation. It is not at all clear to me that the Appeal Tribunal was approaching the existence of detriment on the correct basis. [19] I wondered at one point whether the Appeal Tribunal might even have had jurisdiction to make the finding of fact, that the respondent held the relevant land as trustee, because apparently it did not ever give leave to appeal. Under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“the QCAT Act”) s 142(1) an appeal can be brought to the Appeal Tribunal without leave on a question of law, but leave is required to appeal on a question of fact or of mixed fact and law: s 142(3)(b). The Appeal Tribunal proceeded on the basis that it was deciding a question of law, identified as whether the facts as found fell within the terms of a statutory enactment properly construed: [6]. That is to say, whether the facts found by the member showed 3 This summarised the findings made at [48] and [52]. 4 By way of a quote from Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 507-508. 5 See also Cairns, Australian Civil Procedure, (11th Ed, 2016) #[6.130], although an issue estoppel can arise in a matter where there are no pleadings, as is the case in the Tribunal. 6 Grundt v Great Boulder Gold Mines Pty Ltd (1937) 59 CLR 641 at 676. -- 5 of 7 -- 6 that the respondent was a trustee for the purposes of s 20. The Appeal Tribunal decided that question, favourably to the respondent, which it treated as a question of law. But what if that question was really a question of fact? Did the absence of a grant of leave mean that that factual finding was made without jurisdiction? [20] The authority cited by the Appeal Tribunal7 was based on what was said by Mason J, with whom the other members of the Court agreed, in Hope v Bathurst City Council (1980) 144 CLR 1 at 7, where the proposition was stated in those terms. His Honour’s judgment however went on to note that the situation was not correctly characterised in that way, in a case where more than one conclusion was reasonably open on the facts as found, and that the true position was that the question of whether a conclusion that a statutory term was satisfied by the facts as found was reasonably open on those facts was a question of law, but that whether that conclusion was correct was a question of fact: see p 8.8 Hope is often cited for the proposition quoted by the Appeal Tribunal,9 but the best indication of the true effect of that decision is that the High Court, in Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2020] HCA 2, cited it at [41] for the proposition that: “Within the bounds of reasonableness, the application or non-application of the common understanding of an expression used in a statute to facts that have been found is itself a question of fact.” [21] That I suppose gives rise to the question of whether an issue estoppel can arise as to the issue of whether the question before the Appeal Tribunal was a question of law or a question of fact (or mixed fact and law), and whether it makes a difference that the issue goes to the jurisdiction of the Appeal Tribunal. This point was not considered by the Court of Appeal, or indeed relied on by the appellant before me, so I will say no more about it. [22] There is also the consideration that a beneficiary in an unadministered estate does not have any interest in any particular asset of the estate until the administration of the estate has been concluded.10 If the children would not have an interest in the respective parcels of land after the death of the respondent until then, how can they have an interest prior to then? Does their interest disappear on his death? Or is the true position that, whatever rights the children might have against the respondent while he is alive, as a result of a contract or promise or common understanding, they do not give the children an equitable interest in the land, and so do not make the respondent a trustee of the land? [23] These interesting questions can, however, arise only in a matter involving a taxpayer who does not have the benefit of an issue estoppel. In such a case, the decision of the Appeal Tribunal may prove to be of little value as a precedent. But even if wrong, or even “clearly wrong”, it binds the current parties. The appellant was not able to persuade the Court of Appeal to overturn the decision, and I cannot. The Appeal is dismissed. 7 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at [23]. 8 So much was recognized in Pozzolanic at [25]. 9 See for example Robertson v Brisbane City Council [2022] QCA 45 at [12], and n 3. 10 Commissioner of Stamp Duties (Qld) v Livingstone (1964) 112 CLR 12 at 16 – 17; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at [11]. This is because the administration of the estate may impose some prior call on that asset, a factor which is inherent in a promise to leave property to someone in a will. -- 6 of 7 -- 7 Interest [24] The respondent sought a variation of the order of the Tribunal, to add an order that he receive interest on any resulting overpayment of interest by the appellant in accordance with the Taxation Administration Act 2001 (Qld) s 61(2). So such order was sought or made at first instance, and there has been no cross-appeal on the part of the respondent, but counsel for the appellant did not oppose the making of the order sought by the respondent. In those circumstances I am prepared to make the necessary order, and will order that any procedural requirement which would otherwise prevent me from making such an order be waived, under the QCAT Act s 61(1)(c). [25] The decision of the Appeal Tribunal is therefore as follows: 1. The order of the Tribunal of 20 April 2021 is amended by including in it an order pursuant to the Taxation Administration Act 2001 (Qld) s 61(1)(c) that the appellant pay interest in accordance with s 61 on any resulting overpayment. 2. Any procedural requirement which would otherwise prevent me from making such an order be waived. 3. The appeal is otherwise dismissed. -- 7 of 7 --