Esplanade Wollongong Pty Limited ATF Esplanade Wollongong Trust v Commissioner of State Revenue [2015] NSWCATAD 228

Date of judgement 05 November 2015 Proceeding No. 136077
Judge(s) R Deutsch, Senior Member
Court or Tribunal Administrative and Equal Opportunity Division, NSW Civil and Administrative Tribunal
Legislation cited Administrative Decisions Review Act 1997, s88

Civil and Administrative Tribunal Act 2013, s60

Duties Act 1997, s32A, s32B
Catchwords Costs, conduct which is reprehensible, indemnity costs
Cases cited

Duffy v Du Rin (2014) 87 NSWLR 495

Habib v State of New South Wales (2014) NSWCATAP 70

Background

In February 2013, following an investigation by the Chief Commissioner, the duty payable on a transfer of land located at 72 -74 Cliff Road, Wollongong (“the property”) on 22 October 2010 was reassessed.

At the time of the reassessment, the rate of duty charged on the transaction was the ad valorem rate (s.32 of the Act), notwithstanding that the value of the property exceeded $3,000,000, which required application of the premium rate of duty.

The applicant filed an application for review of the decision in the then Administrative Decisions Tribunal on 12 December 2013 and the application was listed for hearing on 3 August 2015.

Decision

Matter remitted to the Chief Commissioner

In written submissions provided on 14 July 2015, the Chief Commissioner argued that as the value of the property was above $3,000,000, the premium rate of duty was applicable (s.32A of the Act).

At the hearing on 3 August 2015, the Tribunal formed the view the applicant did not have sufficient time to address the application of s.32A and after considering a number of options, decided to remit the matter to the Chief Commissioner to make a comprehensive decision regarding all the relevant issues including a decision in respect of ss.32A and 32B of the Act.

Costs

The applicant made an application for costs, including indemnity costs.

The Tribunal considered  whether it should apply s.88 of the Administrative Decisions Tribunal Act 1997 (“ADT Act”) or s.60 of the NSW Civil and Administrative Tribunal Act 2013 (“NCAT Act”).

SM Deutsch found that "in proceedings that commenced before the establishment of the NCAT, this Tribunal now sitting as NCAT can choose to apply the NCAT Act or the ADT Act."

As these proceedings were commenced one month before the establishment of NCAT and most of the costs were incurred in NCAT, SM Deutsch decided that the NCAT Act should apply.  The NCAT Act allows the Tribunal to award costs in special circumstances only.

In support of its application for costs, the applicant asserted that the Chief Commissioner’s failure to inform it earlier of the s.32A argument was reprehensible and that the Chief Commissioner had failed to act as a model litigant. In relation to the reprehensible submission, SM Deutsch stated at paragraphs 34 to 36:

“I find this argument of the applicant somewhat surprising and somewhat disingenuous having regard to the delays which occurred in many respects as a direct result of the applicant’s conduct.

The position appears to be one in which as a result of the conduct of both parties a key issue in the form of the possible application of s 32A of the Duties Act has arisen somewhat belatedly so much so that it became difficult to see how that matter could be satisfactorily heard at the scheduled time.

In my view, there is no basis for sheeting the blame for these circumstances onto the Chief Commissioner alone.”

SM Deutsch noted that the applicant had two weeks to seek an adjournment once it became aware of the s.32A argument but chose not to do so.

SM Deutsch noted that the assertion the Chief Commissioner had failed to act as a model litigant was not specific, and it was "unclear as to exactly which aspects of the Chief Commissioner’s conduct is being questioned with this suggestion…" (paras 38 – 39).

SM Deutsch then stated that "the Chief Commissioner was duty bound to raise the argument as to the application of the higher rate once it was realised that it was available", and he did not consider that it could be "legitimately argued that the Chief Commissioner had failed to comply with obligations as a model litigant."

SM Deutsch did not find that there were any other issues that would fall within the category of special circumstances to justify the award of costs and therefore, made no order as to costs.

In relation to the applicant's application for indemnity costs from 14 July 2015 onwards, SM Deutsch stated "there was nothing in the Chief Commissioner’s conduct that would justify a departure from the usual position that no costs order should be made."

Order

  1. The matter is remitted to the Chief Commissioner to make a comprehensive decision regarding all the relevant issues including a decision in respect of the application of sections 32A and 32B of the Duties Act (NSW) 1997.

  2. No order as to costs.

Link to decision

Esplanade Wollongong Pty Limited ATF Esplanade Wollongong Trust v Commissioner of State Revenue [2015] NSWCATAD 228

Last updated: 17 May 2016