Commercial Property Management Pty Ltd & Ors v Commissioner of State Revenue [2015] QCATA 70

CITATION: Commercial Property Management Pty Ltd & Ors v Commissioner of State Revenue [2015] QCATA 70 PARTIES: Commercial Property Management Pty Ltd Slush Puppie Pty Ltd SPA Property and Investment Co Pty Ltd (Applicants/Appellants) v Commissioner of State Revenue (Respondent) APPLICATION NUMBER: APL371-14 MATTER TYPE: Appeals HEARING DATE: 16 March 2015 HEARD AT: Brisbane DECISION OF: Member Paratz Member Deane DELIVERED ON: 26 May 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. The appeal is allowed as to the manner of the hearing of the application. 2. The decision of 6 August 2014 is set aside and substituted. 3. The substituted decision is that: a. The application to strike out the proceedings, filed by the Commissioner of State Revenue on 5 June 2014, is granted; and b. The application to review a decision filed by Commercial Property Management Pty Ltd, Slush Puppie Pty Ltd and SPA Property investment Co Pty Ltd on 20 May 2014 is dismissed. 4. Any application for costs including submissions and evidence as to costs is to be filed in the Tribunal and a copy provided to the other party by 4.00pm on 16 June 2015. 5. If any application for costs is filed: -- 1 of 9 -- 2 a. the other party is to file in the Tribunal any submissions and evidence (if any) in response and provide a copy to the other party by 4.00pm on 6 July 2015. b. the application for costs will be determined on the papers without an oral hearing, unless a party requests an oral hearing, not before 6 July 2015. CATCHWORDS: APPEAL – PAYROLL TAX – payroll tax assessment – where an application to strike out for want of jurisdiction was made – whether jurisdiction to review where a payment arrangement was in place and the whole amount assessed had not been paid – where the meaning of “paid” was discussed – whether a payment arrangement results in an amount not being “payable” under an assessment under the Tax Administration Act 2001 (Qld) – where the parties were not given an opportunity to make submissions as to the manner of hearing – where it was held inappropriate to conduct an on the papers hearing – where an error of law occurred by proceeding with an on the papers hearing when it was inappropriate to do so Tax Administration Act 2001 (Qld), s 3, s 19, s 30, s 34, s 37, s 61, s 69, Schedule 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47, s 142, s 146, s 147 Acts Interpretation Act 1954 (Qld), s 14A, s 14B Fleri v Commissioner of State Revenue [2012] QCAT 135 Cowie v Commissioner of State Revenue [2012] QCAT 612 Naswari v Commissioner of State Revenue [2013] QCAT 66 Market Square (Queensland) Pty Ltd v Commissioner of State Revenue [2013] QCAT 578 Izard v Cairns Regional Council [2010] QCAT 410 DCT v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 Ericson v Queensland Building Services Authority [2013] QCA 391 Chandra v Queensland Building and Construction Commission [2014] QCA 335 -- 2 of 9 -- 3 APPEARANCES: APPLICANTS: Commercial Property Management Pty Ltd Slush Puppie Pty Ltd SPA Property and Investment Co Pty Ltd RESPONDENT: Commissioner of State Revenue REPRESENTATIVES: APPLICANTS: Commercial Property Management Pty Ltd, Slush Puppie Pty Ltd and SPA Property and Investment Co Pty Ltd represented by Mr JA Griffin QC and Mr I Klevansky of Counsel instructed by Worcester & Co RESPONDENT: Commissioner of State Revenue represented by Mr MD Hinson QC instructed by the Crown Solicitor REASONS FOR DECISION The Substantive Grounds of Appeal [1] Commercial Property Management Pty, Slush Puppie Pty Ltd and SPA Property and Investment Co Pty Ltd (collectively referred to as Slush Puppie) entered into a payment arrangement with the Commissioner in relation to payroll tax default assessments.1 [2] After the payment arrangement had been entered into, the Commissioner of State Revenue disallowed Slush Puppie’s objections to the payroll tax default assessments.2 [3] Slush Puppie brought an application to review the Commissioner’s decision.3 The Commissioner successfully applied to strike out the proceedings for want of jurisdiction,4 relying upon the failure by Slush Puppie to have complied with s 69(1)(b) of the Tax Administration Act 2001 (Qld) (TA Act). 1 Exchange of letters dated 28 February 2014. 2 Decision dated 21 March 2014. 3 GAR172-14 commenced 20 May 2014. 4 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) s 47; Application for Miscellaneous Matters filed 5 June 2014 granted by Member Allen’s decision of 6 August 2014 with reasons delivered 11 September 2014. -- 3 of 9 -- 4 [4] Section 69 of the TA Act provides: (1) This section applies to a tax payer if – (a) the taxpayer is dissatisfied with the commissioner’s decision on the taxpayer’s objection; and (b) the taxpayer has paid the whole of the amount of the tax and late interest payable under the assessment to which the decision relates. (2) The taxpayer may, within 60 days after notice is given to the taxpayer of the commissioner’s decision on the objection – (a) .... (b) apply, as provided under the QCAT Act, to QCAT for a review of the commissioner’s decision. [5] The learned Member, who heard the application on the papers, accepted that a party is only entitled to apply for a review of the objection decision if it has paid the assessments, and has paid any further unpaid tax interest in full, and that a payment arrangement did not satisfy that requirement. [6] Slush Puppie seek to appeal that decision on the grounds of errors of law only5 and seek orders that the decision be set aside, the application for miscellaneous matters be dismissed, and for the review application to continue. Both parties indicated that they wished to make submissions on the costs of the appeal once we publish our decision. [7] Slush Puppie rely upon the grounds set out in the amended application for leave to appeal or appeal.6 Substantively, Slush Puppie contend that the learned Member erred in not finding that: a) the entry into the payment arrangement equated with actual payment; b) there was no tax payable at any material time within the meaning of s 69(1)(b) of the TA Act; c) the purpose of s 69 of the TA Act was achieved by the Commissioner agreeing to the payment arrangement; d) the Tribunal had jurisdiction to hear a review where the whole amount outstanding had not been paid, but a payment arrangement was in place. [8] Slush Puppie contend that the Tribunal is not deprived of jurisdiction to review the decision to disallow the objections because a payment arrangement was in place, and that there is no tax ‘payable’ within the meaning of s 69(1)(b) of the TA Act. The Commissioner did not dispute that Slush Puppie had made payments in compliance with the payment arrangement prior to the review application being filed. [9] The right to review is conditional upon compliance with s 69(1)(b) of the TA Act. The Tribunal has previously accepted that if the condition is not 5 QCAT Act s 142. 6 Filed 8 October 2014. -- 4 of 9 -- 5 satisfied, the Tribunal has no jurisdiction to review the Commissioner’s decision7 and that is a ground for striking out the application.8 None of the decided cases involved a payment arrangement. [10] Slush Puppie contend that the payment arrangement alters the date upon which the tax is payable by deferring the date upon which it is payable, and that the purpose of the legislation to protect the Crown’s revenue by ensuring payment, is achieved because there is a formal payment agreement, which was voluntarily entered into by the Commissioner. [11] Section 14A of the Acts Interpretation Act 1954 (Qld) provides that an interpretation that best achieves the legislation’s purpose is to be preferred. [12] The main purpose of the TA Act is to ‘make general provision about the administration and enforcement of revenue laws’.9 The purpose of imposing limitations on the right to seek review is to protect the Crown’s revenue. [13] The evidence before the learned Member was that: a) as at 28 February 2014 $363,447.07 was outstanding, and that the payment arrangement required a $20,000.00 upfront payment and $5,000.00 per month thereafter; b) the payment arrangement was put in place in response to the Commissioner seeking to enforce the assessments by way of statutory demands, which were withdrawn as a consequence of the payment arrangement; c) at the time the payment arrangement was put in place Slush Puppie was trading at a substantial loss and was maintaining solvency through the support of its shareholders; d) the payment arrangement was put in place pending the outcome of Slush Puppie’s objection dated 30 October 2013; e) as at 5 June 2014 $338,011.04 was outstanding. [14] Requiring full payment prior to commencing a review ensures that a party seeking to review a decision of the Commissioner does not expend its limited available funds in pursuing the review to the detriment of its ability to pay the assessment, if unsuccessful.10 This is a long-standing legislative policy. In our view, clear words would be required to displace this policy. The legislature has not used clear words to displace this policy. 7 Fleri v Commissioner of State Revenue [2012] QCAT 135; Cowie v Commissioner of State Revenue [2012] QCAT 612; Naswari v Commissioner of State Revenue [2013] QCAT 66; Market Square (Queensland) Pty Ltd v Commissioner of State Revenue [2013] QCAT 578. 8 QCAT Act s 47; Izard v Cairns Regional Council [2010] QCAT 410. 9 TA Act s 3(1). 10 DCT v Broadbeach Properties Pty Ltd (2008) 237 CLR 473. -- 5 of 9 -- 6 [15] We find that the purpose of s 69 of the TA Act is not best achieved by interpreting the section to permit a payment arrangement, rather than by requiring payment of the assessment in full. [16] A payment arrangement does not best achieve the legislative purpose of ensuring the payment of the assessment, if the taxpayers are unsuccessful. [17] Other provisions of the TA Act are consistent with this view. If a party seeking review is successful, the TA Act provides for a mandatory reassessment,11 a refund of amounts overpaid12 and payment of interest on an overpayment.13 [18] Slush Puppie contend that upon entering into the payment arrangement there was no amount ‘payable’ under the assessment at any material time, and therefore the entry into the payment arrangement equated to payment of the tax. [19] Slush Puppie contend that, as a matter of ordinary language, ‘payable’ means ‘now due and owing’.14 The terms ‘due’ and ‘due and payable’ are found in other legislation but not the TA Act15 other than in the context of ‘due date’.16 The TA Act separates the concepts of ‘due’ and ‘payable’. Cases interpreting other such legislation are not directly relevant. [20] We find that the preferable interpretation of ‘payable’ in s 69 of the TA Act is ‘yet to be paid’. We find no error in the learned Member’s finding that a payment arrangement does not result in the amount ceasing to be payable but only affects the time for enforcing payment. Nor do we find any error in the learned Member’s finding that There is nothing in the Act to indicate a cross over between the two provisions, that is s 34 and s 69(1)(b) is contemplated.17 [21] In interpreting the ordinary meaning of s 69 we have had regard to its context in the TA Act and to the purpose of the TA Act,18 which provides that the Commissioner ‘may extend the time for paying an amount under a tax law’19 and ‘may approve an arrangement for paying the amount by way of instalments’20. [22] Relevantly, s 34(5) of the TA Act introduces a time element to the concept of ‘payable’ as it provides that if the Commissioner terminates a payment 11 TA Act s 19(1). 12 Ibid s 37(1)(a). 13 Ibid s 61. 14 Stroud’s Judicial Dictionary of Words and Phrases, 8th Edition at 2116. 15 Bankruptcy Act 1966 (Cth); Income Tax Assessment Act 1936-1979 (Cth). 16 TA Act Schedule 2. 17 Reasons at [13]. 18 Acts Interpretation Act 1954 (Qld) s 14B. 19 TA Act s 34(1). 20 Ibid s 34(2). -- 6 of 9 -- 7 arrangement, the tax is ‘immediately payable’, which infers that it was ‘payable’ but that the time for payment has been deferred. [23] Tax becomes payable when assessed,21 and the time for payment is set out in the assessment notice. Section 69 of the TA does not deal with the time for payment. It sets out the requirement that the whole of the amount be paid. [24] There is no dispute that the whole of the amount was not paid at the time of commencing the review proceedings. [25] We are not satisfied that the learned Member erred in failing to make the findings as contended by Slush Puppie. [26] We find that the learned Member did not make any error of law in relation to the substantive grounds of appeal. Failure to conduct an Oral Hearing [27] In addition to these substantive grounds, Slush Puppie contend in their amended grounds of appeal22 that the learned Member erred in law in failing to accord natural justice/procedural fairness by declining to hear oral submissions. [28] The learned Member gave a direction on 18 June 2014 that: The application to strike out will be determined by a member of the Tribunal, on the papers, without any oral evidence, not before 10 July 2014. [29] It appears that no submissions were sought from, or made by the parties, as to whether it was appropriate to hear the proceeding on the papers, prior to the direction being given for an on the papers hearing. [30] The solicitor for Slush Puppie wrote to the Commissioner on 20 June 2014 saying that it had received a copy of the Commissioner’s application for miscellaneous matters (the strike-out application), but that it had not received any information from the Tribunal about the application. In that letter the solicitor said: We, in any event, assert that such matters should be dealt with at oral hearing, as they have sufficient complexity to require oral argument by our counsel. It would save both time and money to have these matters dealt with at the final hearing. [31] The solicitor for Slush Puppie wrote to the Registry on 20 June 2014, enclosing a copy of their letter of that day to the Commissioner, and saying: Our client will be unfairly prejudiced if the matter is dealt with on the papers as opposed to an oral hearing. The matter is complex and requires oral 21 Ibid s 30. 22 Filed on 8 October 2014, Ground 3. -- 7 of 9 -- 8 argument by our counsel. It would save both time and money to have these matters dealt with at the final hearing. [32] In the ‘Applicants’ Submissions’ which were filed in the application,23 and dated 7 July 2014, Slush Puppie submitted: Oral Argument 23. The applicants note that an indication has been given that this issue could be dealt with on the papers. The applicants consider that it is more appropriate that oral argument be delivered by both sides. [33] Notwithstanding this communication, and submission, the learned Member proceeded to conduct a hearing on the papers, and the decision was delivered on 11 September 2014. [34] The learned Member did not address in his reasons the issue of an oral hearing, or indicate why he did not afford the applicants an oral hearing. [35] The Court of Appeal considered the principles to be applied by the Appeal Tribunal in hearing matters on the papers in Chandra v Queensland Building and Construction Commission.24 That decision was delivered on 16 December 2014 – about three months after the decision in this matter, and about two months after this application for leave to appeal or appeal was filed. [36] Peter Lyons J noted as to the need for an oral hearing that: Section 32(2) of the QCAT Act authorised the appeal tribunal to conduct the proceeding without an oral hearing "if appropriate". The helpful decision of the Deputy President of the tribunal, sitting as the appeal tribunal in Lyons v Dreamstarter Pty Ltd, points to the need for the appeal tribunal to accord natural justice, notwithstanding s 32. That is consistent with provisions of the QCAT Act, referred to previously. Often it will be appropriate to determine applications, such as those which were being decided by the Senior Member, without an oral hearing. However, in a particular case it may not be appropriate to do so, or to continue to do so. It will be (or become) inappropriate, if that would deny a party a fair opportunity to be heard.25 [37] Whilst those comments refer to the Appeal Tribunal, s 32(2) also applies to the Tribunal in first instance. [38] Where Slush Puppie had not been heard on the issue of an oral hearing, and where it clearly objected to an on the papers hearing being conducted on the basis that it would be unfairly prejudiced, it was inappropriate to proceed with an on the papers hearing, and to deny it a fair opportunity to be heard. 23 Adopted in the Amended Grounds of Appeal. 24 [2014] QCA 335. 25 Ibid at [60] – [61], cf [2011] QCATA 142. -- 8 of 9 -- 9 [39] Having regard to the comments in Chandra, the learned Member made an error of law in proceeding to hear the proceeding on the papers when it was not appropriate to do so. [40] We therefore find that the learned Member made an error of law as to the manner of hearing, and allow the appeal in that respect. What is the appropriate course for the Appeal Tribunal to adopt? [41] Section 146 of the QCAT Act sets out the Appeal Tribunal’s powers on appeal where the appeal is on a question of law. It does not provide for rehearing as compared to s 147, which relates to appeals on questions of fact or mixed law and fact.26 [42] If the question of law resolves the matter as a whole then the Appeal Tribunal may substitute its decision, otherwise it is to remit the matter for further consideration. [43] This matter has concerned statutory interpretation. The facts were not in dispute. There is no additional evidence required to determine this matter. [44] The appeal was conducted by way of oral hearing, and full submissions were made. In the circumstances, as Slush Puppie has now been afforded an opportunity to be heard by oral submissions, and we have found that there was no error on the substantive grounds, there is no utility in a rehearing. The determination of the questions of law on the substantive matters resolves the matter as a whole. It is therefore appropriate that we substitute our own decision, without remitting the matter for further consideration. Conclusion [45] We allow the appeal as to the manner of hearing of the application. [46] We substitute our own decision. [47] We find that the Tribunal does not have jurisdiction to hear this review, as the whole amount outstanding had not been paid at the time the proceedings were commenced. [48] Accordingly, we order that: a) The application to strike out the proceedings, filed by the Commissioner of State Revenue on 5 June 2014, is granted; and b) The application to review a decision filed by Commercial Property Management Pty Ltd, Slush Puppie Pty Ltd and SPA Property investment Co Pty Ltd on 20 May 2014, is dismissed. [49] We make directions as to submissions as to costs. 26 Ericson v Queensland Building Services Authority [2013] QCA 391 at [13] and [25]. -- 9 of 9 --