Deane v Commissioner of Stamp Duties [1994] QSC 299 [1996] 1 Qd R 133

IN THE SUPREME COURT OF QUEENSLAND Application No. 682 of 1994 BETWEEN GARY RAYMOND DEANE AND SUSAN DOROTHY DEANE Applicants and COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT - SHEPHERDSON J. Judgment delivered 17 November 1994 CATCHWORDS: ADMINISTRATIVE LAW - Judicial Review Act - s.31 and Schedule 2. cl.15 - stamp duty reassessed under s.55A(3) of the Stamp Act - Penalty demanded under s.55A(5). Whether decision not to reduce or waive penalty under s.55A(5A) is within cl.15 of Schedule 2 and excluded from review. COUNSEL: Alexander for Applicant Hanson Q.C. for Respondent SOLICITORS: Mullins & Mullins for Applicants Crown Solicitor for Respondent HEARING DATE: 31 October 1994 -- 1 of 8 -- IN THE SUPREME COURT OF QUEENSLAND Application No. 682 of 1994 BETWEEN GARY RAYMOND DEANE AND SUSAN DOROTHY DEANE Applicants and COMMISSIONER OF STAMP DUTIES Respondent JUDGMENT SHEPHERDSON J. Delivered 17 November 1994 By application filed on 6 October 1994 the applicants sought an order pursuant to s.38 of the Judicial Review Act 1991 that the respondent serve on the applicants within fourteen days a written statement of the reasons for a decision not to wholly or partially waive a penalty of $27,225 demanded in a letter dated 8 August 1994 from the respondent to the applicants. This application was provoked by an alleged refusal by the respondent, on 4 October 1994, to provide a written statement of his reasons for not wholly or partially waiving the above-mentioned penalty. The application before me was superseded by a letter dated 12 October 1994 written by the respondent to the applicants' solicitors. In that letter the respondent reduced to $20,419 the earlier imposed penalty of $27,225. Mr Hanson Q.C., who appeared for the respondent, submitted that there is no purpose in the present proceeding; however, in my view it is necessary to consider the points raised in argument because the outcome will bear on my decision as to the costs of this application. Before I come to the points at issue I shall recite relevant facts. -- 2 of 8 -- 2 During October 1992 the applicants contracted to buy a house at 207 Dewar Terrace, Corinda, Brisbane. On 3 November 1992 the applicants signed a statutory declaration in Form Q required under the Stamp Act 1894. This was to the effect that the property was acquired as the applicants' principal place of residence and that the applicants would remain in continuous occupation of the property for a period of not less than six months. The respondent assessed a concessional rate of stamp duty pursuant to s.55A of the Stamp Act. Correspondence between the respondent and the applicants followed. This focused on whether or not the applicants had occupied the Dewar Terrace house as their principal place of residence on the terms and for the continuous period declared in Form Q. On 12 August 1994 the applicants received by post a letter from the respondent. The letter was a reassessment by the respondent of duty as follows: Stamp duty on $800,000 $27,225 Less stamp duty paid on 9.12.92 $ 8,000 Primary duty payable $19,225 Add s.55A(5) penalty $27,225 Total amount payable: $46,450 I mention that although the letter included a demand of a penalty the respondent considered that he had reassessed duty. On 6 September 1994 the applicants' solicitors requested from the respondent, pursuant to s.32 of the Judicial Review Act a written statement of reasons "for failing or refusing to wholly or partially waive pursuant to" s.55A(5A) the penalty of $27,225. On 4 October 1994 the applicants' solicitors received a facsimile document from the respondent refusing to provide the written statement of reasons on the grounds that the decision not to remit was part of the reassessment decision to which Schedule 2 of the Judicial Review -- 3 of 8 -- 3 Act 1991 applied. The present proceedings then commenced. The point at issue is whether the refusal of 4 October 1994 is a decision to which Part 4 of the Judicial Review Act applies. Part 4 is headed - "PART 4 - REASONS FOR DECISION". Section 31 relevantly reads: "31. In this Part - 'decision to which this Part applies' means a decision that is a decision to which this Act applies, but does not include - ......... (b) a decision included in a class of decisions set out in Schedule 2." Schedule 2 to the Judicial Review Act is headed "DECISIONS FOR WHICH REASONS NEED NOT BE GIVEN" and refers to s.31. Clause 15 thereof relevantly provides: "15. Decisions making, or forming part of the process of making, or leading up to the making of, assessments, reassessments, calculations or determinations of - (a) tax, duty or other impost; or ...... (other than a decision on an objection made and determined under an enactment)" The point at issue as the argument developed was whether or not the decision not to waive or reduce the penalty formed part of the process of making or leading up to the making of a reassessment of duty. It was in effect agreed that stamp duty fell within "duty" in clause 15 and that the penalty in the instant case was apt to be covered by "impost". Section 55A of the Stamp Act is a lengthy section dealing with "duty relating to principal place of residence and first principal place of residence". -- 4 of 8 -- 4 In the events which the Commissioner alleges have happened, the Commissioner claims to have been enabled under a combination of s.55A(3) and s.80 of the Stamp Act to reassess the stamp duty payable by the applicants on the purchase of the Dewar Terrace house. There is no dispute that he has purported to exercise his powers under s.55A(3) and s.80 and s.55A(5). The demand for penalty was made under s.55A(5) of the Stamp Act which relevantly says: "5. Where a person fails to notify the Commissioner in compliance with subsection (4), the Commissioner, when reassessing duty payable pursuant to subsection (3) ..., may demand and receive by way of penalty an amount equal to the total amount of duty so reassessed without allowance for any amount paid in respect of the original assessment." I should at this stage say that the respondent, when reassessing, relied on a failure by the applicants to notify him in compliance with ss.55A(4) and it was this failure which attracted the exercise of the power to demand under ss.55A(5). Section 55A(5A) provides: "5A. The Commissioner may, in a particular case and for reasons which in his discretion he considers sufficient, reduce or waive the penalty which he has demanded or would otherwise demand under subsection (5)." The applicants contended that the respondent's power to remit under ss.55A(5A) is not part of the process of reassessing duty or imposing a penalty but is an independent discretion that is exercised after the determination of the penalty under ss.55A(5). The respondent contended that the remission decision formed part of the process of making or leading up to the making of the reassessment of the stamp duty and determination of the penalty. If the respondent is correct the decision for which reasons are sought is excluded from the operation of Part 4. -- 5 of 8 -- 5 Considering then s.55A(5) under which the power to demand and receive penalty is found, this subsection provides that the respondent "when reassessing duty payable pursuant to subsection (3) ... may demand and receive by way of penalty ..." Mr Hanson QC's submission is that s.55A(5) on its proper construction means that the respondent's power to impose a penalty is part of the reassessment process and cannot be exercised later. He thus submits that the imposition of the penalty is part of the process of making the reassessment and therefore Part 4 does not apply. One cannot ignore s.55A(5A) which I have already set out. The power to reduce or waive therein appearing may be exercised after a demand already made. The use of the words "would otherwise demand under subsection (5)" indicate the power may be exercised at an earlier time i.e. before or at the time when the respondent reassesses duty payable pursuant to s.55A(3). Although ss.55A(5) uses the word "may" I have decided that ss.55A(5A) by indicating quite plainly the above times at which the respondent may reduce or waive a penalty under ss.(5) shows that the legislature intended that if a penalty were to be demanded it must be demanded no later than the time of reassessing under ss.55A(3). Although this view limits the time for demanding a penalty it does not follow that the demanding of the penalty under ss.55A(5) is part of the process of making a reassessment of duty under ss.55A(3) so that clause 15 of Schedule 2 applies to exclude from Part 4 a decision concerning the determination and demand of the penalty. There are other aspects of the Stamp Act which strongly suggest that the demand of penalty under s.55A(5) is not a decision within clause 15 of Schedule 2; insofar as it is said to form part of the process of making or leading up to the making of the reassessment of duty. I mention sections 4B, 78A and 80 of the Stamp Act and the absence of any right of appeal against a penalty demanded under s.55A(5) compared with the right of objection or -- 6 of 8 -- 6 appeal against a reassessment under s.55A(3). I reject the submission that imposition of the penalty is part of the process of making a reassessment of duty. It is important to keep separate the concepts of reassessment of duty under ss.55A(3) and demand of penalty under s.55A(5). However, what is sought here are reasons for a decision not to reduce or waive a penalty imposed (see the letter dated 4 October 1994 from the respondent to the applicants' solicitor in which the respondent mentions his decision not to remit penalty). While it is in my view true to say that the power to reduce or waive penalty under ss.55A(5A) may be exercised before or after the making of the reassessment, the decision at issue is not an exercise of a power under ss.55A(5). It is a decision not to exercise one of the powers found in ss.(5A). Although the above letter of 4 October 1994 mentions a decision not to remit, if that decision is viewed as a decision not to exercise one of the powers found in ss.(5A) it is nevertheless a reviewable decision, provided always the exclusory clause 15 of Schedule 2 does not operate. I refer to s.5 of the Judicial Review Act and particularly paragraph (g) thereof. A refusal to make a decision may be a reviewable decision (Deputy Commissioner of Patents v. Board of Control of Michigan Technological University (1979) 2 ALD 711 at 724). In the present case, the exercise or refusal by the respondent to exercise his discretion under ss.(5A) is reviewable. The reassessment and the demanding of the penalty were made at the same time. Thereafter the respondent, as he said in his letter of 4 October 1994 decided not to remit penalty. The Judicial Review Act 1991 is a remedial statute (Australian Broadcasting Commission v. Bond (1990) 170 CLR 321 at 335); ss.(5A) expressly mentions reasons which the respondent in his discretion considers sufficient. As already mentioned, the applicants have no right of appeal against the penalty imposed. Section 80 of the Stamp Act which empowers -- 7 of 8 -- 7 the respondent to amend assessments and reassess duty provides for objections or appeals against any such amended assessment. Nothing is said about objections on appeals against penalties included in such assessments. Section 4B provides (inter alia) that a penalty imposed shall be a debt due to the Crown and payable to the respondent. The evidentiary force of s.78A of the Stamp Act assists the respondent in any action to recover a penalty. In Bond (supra) Mason CJ said (at p.335-6):- "The fact that the A.D.(J.R.) Act is a remedial statute providing for a review of administrative action rather than some form of appeal from final decisions disposing of issues between the parties indicates that no narrow view should be taken of the word 'decision'." So too, in the present case, clause 15 of Schedule 2 should not be so interpreted that a review of a final decision not to reduce or waive a penalty is prevented. That it is a final decision is made clear from the absence of any right of appeal. In my view, the respondent's decision not to remit (as he described it) does not fall within Schedule 2 of the Judicial Review Act. I heard from Counsel on the question of costs in the event that either succeeded. Both agreed that which ever side succeeded costs would follow the event. As the applicants have succeeded, I order the respondent to pay the applicants' costs of and incidental to the application to be taxed but in so doing draw to the attention of the taxing master some duplication of material (particularly exhibits) before me. -- 8 of 8 --