GRICE HOLDINGS PTY LTD & ANOR v COMMISSIONER OF TAXES (NT)

Judges:
Riley J

Court:
Supreme Court of the Northern Territory

MEDIA NEUTRAL CITATION: [2001] NTSC 88

Judgment date: 18 October 2001

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Riley J

On 22 December 1999 the defendant Commissioner issued a notice of assessment under the Stamp Duty Act against the second plaintiff. That assessment related to the transfer of land from the first plaintiff to the second plaintiff in June 1999 which transfer, the Commissioner determined, effected a conveyance of land which was not exempt from stamp duty under sub-item 9A(a) of Schedule 2 to the Stamp Duty Act.

2. In January 2000 solicitors representing the first plaintiff lodged with the Commissioner a notice of objection pursuant to s 100 of the Taxation (Administration) Act in the name of the first plaintiff. In response the Commissioner determined that he did not have power or authority to consider the notice of objection as the first plaintiff was not ``a person aggrieved by an assessment'' within the meaning of s 100(1) of the Taxation (Administration) Act. The plaintiffs then sought declaratory relief in the Supreme Court and the matter came before Bailey J who, in a judgment dated 23 October 2000, determined that there was no valid objection and no basis for the Court to consider an appeal under s 101 of the Taxation (Administration) Act.

3. By letter dated 16 October 2000 the solicitors for the plaintiffs wrote to the Commissioner providing additional information relating to one aspect of the matter and requesting that he amend his earlier assessment pursuant to the power available to him under s 97(1) of the Taxation (Administration) Act. The Commissioner responded in the following terms:

``I refer (to) previous dealings in relation to this matter and in particular your letter of 16 October 2000 requesting the Commissioner of Taxes (`the Commissioner') to amend Stamp Duty Assessment No. 59893 (`the Assessment').

Subsection 97(1) of the Taxation (Administration) Act (NT) (`the Act') enables and permits the Commissioner to amend `an assessment by making such alterations or additions to it as he thinks necessary'; it does not impose upon him a duty so to do.

I write to inform you that I decline to consider whether or not to exercise the discretion under s 97(1) of the Act to amend the Assessment.''

4. In response the plaintiffs commenced the present proceedings. The parties have identified three issues to be addressed. These are as follows:

• (1) Whether the Commissioner had a duty to consider the exercise of the discretion

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  conferred by s 97(1) of the Taxation (Administration) Act.
• (2) Whether the Commissioner was required to take into consideration the matters raised in and annexed to the letter to him from the solicitor for the plaintiffs dated 16 October 2000 in determining whether to consider whether or not to exercise the discretion under s 97(1) of the Taxation (Administration) Act or, in the alternative, whether or not to exercise the discretion to amend Stamp Duty Assessment number 59893.
• (3) Whether the Court may, pursuant to s 44(1) of the Limitation Act extend the times specified in s 100(1) of the Taxation (Administration) Act within which to lodge an objection to Stamp Duty Assessment number 59893 and, if so, whether the second plaintiff is entitled to such extension.

Section 97(1) of the Taxation (Administration) Act

5. The plaintiffs seek an order in the nature of mandamus that the Commissioner consider whether or not to exercise the discretion conferred upon him by s 97(1) of the Taxation (Administration) Act to amend Stamp Duty Assessment number 59893. Section 97(1) is in the following terms:

``The Commissioner may, at any time within a period of three years after the date of an assessment by him of duty, amend the assessment by making such alterations or additions to it as he thinks necessary.''

6. The section provides the Commissioner with a discretion in relation to the making of an amendment and the plaintiffs submit that, properly construed, that discretion is coupled with a duty and therefore mandamus will lie. It is submitted that the general rule is that the holder of a discretion has a duty to consider whether or not to exercise it:
Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 at 1052-53. It is further submitted that clear words are required to displace the prima facie assumption that a duty to make a decision exists:
P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 376;
West Australian Field and Game Association v Minister of State for Conservation (1992) 8 WAR 64. I note in passing that these two cases each deal with legislative provisions that allowed a decision to be made permitting identified persons to undertake activities that would otherwise be unlawful. The legislation involved is quite different from that applicable in the matter now before the Court.

7. The plaintiffs acknowledge that there is a body of case law concerning the powers of Taxation Commissioners which holds that similar statutory provisions in other jurisdictions confer a mere power to decide, involving no duty at all. However, they seek to distinguish those cases.

8. In
The Commonwealth Agricultural Service Engineers Ltd (In Liquidation) v Commissioner of Taxes for South Australia (1926) 38 CLR 289, the High Court considered the application of s 70 of the Taxation Acts 1915 to 1918 of South Australia. That section provided that ``it shall be lawful for the Commissioner in any case, whether notice of appeal has been given or not, to alter or reduce any assessment... and to order a refund of any excess of tax that has been paid in respect thereof.'' It was argued before the Court that the section provided for a power given for the benefit of the public generally with the object of adjusting ``the proper relation of the Crown and the taxpayer''. It was submitted that there was an obligation in law upon the Commissioner to consider all the facts which an interested taxpayer may have placed before him and to apply his discretion to those facts. The Court dismissed the appeal. In his judgment Isaacs J observed:

``But I think that by the words `it shall be lawful' in that section it is intended that his action is to be entirely voluntary. He is not to be coerced into acting under s 70. The rights of the parties are fixed otherwise. It is intended that he shall take a high position in this matter and shall not claim for the Crown more than he sees the Crown is entitled to, and he is not to allow any taxpayer to escape payment of any amount which the law intends him to be liable to pay. There is no reason why the Commissioner should not in a proper case exercise his powers merely because he is requested to do so by a taxpayer. The Commissioner's action in such case is none the less voluntary. But I would be unable to give s 70 the interpretation suggested by counsel for the appellant and to stop where he stops. I would be unable to say there is an obligation

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on the Commissioner to hear every taxpayer who, having been assessed, claims a reduction, and to listen to the evidence which might be adduced in order to inform his mind, if the Legislature meant that the Commissioner might do a palpable wrong immediately afterwards by refusing to correct an error made manifest by the inquiry. That would make the section itself so inconsistent and unjust that I could not accept the interpretation. I could not go so far as to say that there is an absolute duty to hear and determine unless I could also say that, having heard and determined, there was an absolute duty to order a refund.''

9. Similar conclusions were reached in
Ex parte The Carpathia Tin Mining Company Ltd (1924) 35 CLR 552, dealing with s 33(1) of the Income Tax Assessment Act 1915 to 1918;
Boyded Industries Pty Ltd v FC of T 85 ATC 4551; (1985) 81 FLR 293, dealing with s 170 of the Income Tax Assessment Act 1936 and
Brownsville Nominees Pty Limited v FC of T 88 ATC 4513; (1988) 19 FCR 169, dealing with s 170 of the Income Tax Assessment Act 1936. In the latter case, Northrop J observed that s 170(1) of the Income Tax Assessment Act ``does not impose a duty on the Commissioner to make an amended assessment. The section is enabling in form.'' He concluded that it does not create any duty upon the Commissioner to make an amended assessment.

10. Reference to s 97(1) of the Taxation (Administration) Act reveals that it is in similar form to the sections addressed in the above mentioned authorities. It creates a power in the Commissioner within the specified period to amend an assessment by making alterations or additions to it ``as he thinks necessary''. It does not impose any duty or obligation upon him to make an amended assessment. It is his opinion alone that is applicable. In my view he cannot be compelled to exercise the power created by this section.

11. This interpretation of s 97(1) is supported by reference to the scheme of the Act. The Act provides a system for persons who are dissatisfied with assessments to object and then appeal those assessments. The relevant provisions are to be found in Part V of the Act. If s 97(1) of the Act bears the interpretation suggested by the plaintiffs then a further appeal process is effectively created uninhibited by the time constraints that are to be found in Part V of the Act. If that be so then the following observations of Isaacs J in The Commonwealth Agricultural Service Engineers Limited (In Liquidation) v The Commissioner of Taxes for South Australia (supra at 292) have application:

``If the alleged right exists, then every taxpayer who for any reason has failed to appeal within the statutory period has the same right, and that right, by s 75, continues for three years. That would be a very serious inroad upon the express policy of the Act, which limits the right of a taxpayer to challenge the assessment to a period of two months. Such a limitation is necessary for the stability of the finances. In my opinion very clear words or an extremely strong implication would be necessary to support the contention that the right asserted by the appellant exists. The appellant does not contend that there is any express term in s 70, which is the only section upon which the argument could rest, that creates the right. The words of that section, so far as they are express, are such as confer upon the Commissioner a discretionary power.''

12. Isaacs J went on to say (at 293):

``If (section 70) is read as conferring simply a discretionary power on the Commissioner, notwithstanding an assessment has been made... to so correct his assessment as to bring it, in accordance with the facts and the law, into such a condition that the right amount of tax is made payable, it is in entire harmony with the rest of the Act. If, however, it be read as coercive on the Commissioner as asserted by the appellant, it is an anomalous provision.''

13. The plaintiff sought to distinguish those cases from the present matter on basis that the plaintiffs do not suggest that the Commissioner is under a duty to make an amended assessment. It was the submission made on behalf of the plaintiffs that the Commissioner, when provided with material relevant to whether an amended assessment should properly be made, has a duty to consider whether to exercise that power. For the reasons set out above I do not accept this submission. If, as is conceded on behalf of the plaintiffs, there is no duty imposed upon the Commissioner to exercise the discretion to amend an assessment then there can be no duty to consider whether to exercise the discretion to amend the assessment. Further, the submission of the plaintiffs requires

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the exercise of the power under s 97(1) to be divided into two parts the first being a decision to decide whether to amend and the second a decision in fact to amend. That is not the effect of the section, it simply permits the Commissioner to amend an assessment if he thinks it necessary. It is not a two stage process.

14. In my view s 97(1) of the Taxation (Administration) Act does not impose a duty upon the Commissioner of the kind suggested by the plaintiffs. It follows that there is no duty upon him to take into account the plaintiffs' submissions on the merits of the original assessment. The matter is one entirely for his discretion. I should add that I am not convinced that the Commissioner did not take into account the plaintiffs' submissions when he decided to decline to consider whether or not to exercise his discretion under s 97(1) of the Act. Although it is not clear from the text of the letter it is possible, indeed more probable than not, that he did so.

Section 44(1) of the Limitation Act

15. Section 100(1) of the Taxation (Administration) Act permits a person who is aggrieved by an assessment made in relation to him under the Act ``within 30 days after the date on which he is informed of the assessment'' to lodge an objection with the Commissioner. At all times relevant to these proceedings the section did not contain any power to extend time. The section has been recently amended to include s 100(7) which permits the Commissioner to grant an extension of time for the lodging of an objection under s 100 of the Act.

16. The second plaintiff, which was not a party to the original objection to Stamp Duty Assessment number 59893, now wishes to lodge an objection to that assessment and, if the objection is disallowed by the Commissioner, to appeal to the Supreme Court pursuant to s 101 of the Act. To enable that to occur, the second plaintiff seeks an extension of time and does so in reliance upon s 44(1) of the Limitation Act.

17. Sections 44(1) and (2) of the Limitation Act provide as follows:

``(1) Subject to this section, where this or any other Act, or an instrument of a legislative or administrative character prescribes or limits the time for-

• (a) instituting an action;
• (b) doing an act, or taking a step in an action; or
• (c) doing an act or taking a step with a view to instituting an action,

a court may extend the time so prescribed or limited to such an extent, and upon such terms, if any, as it thinks fit.

(2) A court may exercise the powers conferred by this section in respect of an action that it-

• (a) has jurisdiction to entertain; or
• (b) would, if the action were not out of time, have jurisdiction to entertain.''

18. It is the submission of the second plaintiff that the lodgment of an objection is a ``step taken with a view to instituting an action'' for the purposes of s 44(1)(c). An ``action'' is defined as including any proceeding in a court of competent jurisdiction. The second plaintiff submits that it is the wish of the second plaintiff to lodge an objection and, if the objection is disallowed by the defendant to appeal to the Supreme Court. An appeal pursuant to s 101 of the Taxation (Administration) Act would be an ``action'' within the meaning of the Limitation Act and, because the lodging of an objection is a condition precedent to any appeal to the Supreme Court under that section, it is submitted that it is therefore ``an act or taking a step with a view to instituting an action''. I am unable to accept this submission.

19. In my view it is wrong to say that the lodging of an objection is the doing of an act or taking of a step with a view to instituting an action. The purpose of lodging an objection is to allow the person aggrieved to require the Commissioner to consider the objection and then ``either disallow it, or allow it, either wholly or in part''. The question of an appeal to the Supreme Court will only arise when that process is complete and then only if the Commissioner has disallowed the objection and the taxpayer is dissatisfied. That situation may never arise. The act of lodging an objection is procedurally distant from, and in my view, not sufficiently proximate to the commencement of an appeal to the Supreme Court for it to be considered a relevant act or step taken with a view to instituting an action for the purposes of

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s 44(1)(c) of the Limitation Act. There is no sufficient relationship between the act to be done (the lodging of the objection) and the instituting of the action (the appeal to the Supreme Court) for it to be said to be an act done with a view to instituting the action.

20. In all the circumstances I dismiss the claims of the plaintiffs.