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Queensland Chamber of Commerce & Industry Ltd v Commissioner of State Revenue (No 2)

 

[2015] QSC 115

 

 

 SUPREME COURT OF QUEENSLAND

 

 

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Application for further orders and costs

DELIVERED ON:

8 May 2015

DELIVERED AT:

Brisbane

HEARING DATE:

Written submissions only

JUDGE:

Jackson J

ORDER:

The orders of the court are:

1.The respondent pay 50 per cent of the appellant’s costs of the appeal. 

2.There be no order as to costs of the application for judicial review.

3.The respondent pay the appellant interest on the sum of $958,886.98 at the prescribed rate under and in accordance with s 61(3) of the Taxation Administration Act 2001 (Qld). 

4.Liberty to apply.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – OTHER CASES – FAILURE IN PORTION OF A CASE – where the appellant/applicant was successful on the first question and unsuccessful on the second question on the appeal – where the first question was whether the appellant was entitled to be registered as a “charitable institution” – where the second question was whether the appellant was entitled to be registered before a particular date – whether the appellant is entitled to all its costs of the application

Taxation Administration Act 2001 (Qld), s 61(3)

Taxation Administration Regulation 2012 (Qld), s 9

Allianz Australia Insurance Ltd v Swainson [2011] QCA 179, cited

BHP Coal Pty Ltd v O&K Orenstein & Coppel AG (No 2) [2009] QSC 64, cited

Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26; [2001] QCA 191, cited

Queensland Chamber of Commerce & Industry Ltd v Commissioner of State Revenue [2015] QSC 77, related

Tabtill Pty Ltd v Cresswick: Cresswick v Cresswick & Ors [2012] QCA 78, cited

COUNSEL:

L Harrison QC for the appellant/applicant

M Hinson QC for the respondent

SOLICITORS:

PPM Tax and Legal for the appellant/applicant

Cooper Grace Ward for the respondent

1. Jackson J: This judgment follows my decision in Queensland Chamber of Commerce & Industry Ltd v Commissioner of State Revenue[1] (“principal judgment”).

2. An order made by the principal judgment remitted the appellant’s application for registration to the respondent for decision in accordance with the reasons.  On 15 April 2015, the respondent issued a notice of registration stating that the appellant is registered as a charitable institution from 30 June 2010.  Consistently with the notice of registration, the respondent refunded $958,886.98 as the amount of payroll tax paid by the appellant after 30 June 2010.

3. In accordance with another order made by the principal judgment, the parties now seek further orders and an order for costs. 

4. First, the appellant applies for an order that the respondent pay the appellant’s costs of the appeal.  It also seeks an order that the respondent pay its costs of the application.  The respondent submits that the order for costs should be that the respondent pay 50 per cent of the appellant’s costs of the proceeding (being the appeal).

5. Second, the appellant applies for an order that the respondent pay the appellant interest on the sum of $958,886.98 at the prescribed rate under and in accordance with s 61(3) of the Taxation Administration Act 2001 (Qld) (“TAA”) and s 9 of the Taxation Administration Regulation 2012 (Qld).  The respondent seeks an order that each party have liberty to apply on five days notice in respect of any issue about the calculation of interest payable under s 61(3) of the TAA. 

Costs

6. As appears from the principal judgment, the appellant was successful in the appeal on the question whether it was entitled to be registered as a charitable institution (“first question”).  However, the appellant was unsuccessful on the question whether it was entitled to be registered from a date before 30 June 2010 (“second question”).

7. Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), r 681(1), provides that the costs of a proceeding are in the discretion of the court and follow the event unless the court orders otherwise.  The appellant submits that the event is the outcome of the appeal. It was successful in setting aside the respondent’s decision to disallow the appellant’s objection to the respondent’s refusal to register the appellant as a charitable institution on its application made at the end of November 2013. 

8. The appellant relies on a line of cases to the effect that a successful party will not usually be deprived of an order for costs because it failed on an alternative ground for the claim or defence.[2]  The cases support such an outcome even though there may be separate issues or questions capable of being treated as separate events for the purposes of r 681(1) UCPR.[3]

9. The respondent does not dispute the principles as expounded in the cases.  Instead, he submits that the second question was not an alternative ground for the success that was achieved on the appeal.  It was an additional substantive question on which the appellant failed.

10. It appears that the appellant’s lack of success on the second question reduced the appellant’s entitlement to a refund from a possible $2,262,731 to a maximum of $958,886.98, leaving interest aside.

11. As well, the appellant’s failure on that question was not purely based on legal argument as to the operation of the legislation.  The appellant’s case was originally propounded on the basis that it had been registered as an exempt body for land tax and was therefore exempt from payroll tax as a deemed charitable institution because the operation of s 168 of the TAA.  That basis was abandoned by the appellant at or before the hearing of the appeal. 

12. The respondent does not submit that there should be separate orders for costs in relation to a separate event for each of the two questions decided.  As previously mentioned, it submits that it would be appropriate to order that the respondent pay 50 per cent of the appellant’s costs of the appeal, relying on the fact that the appellant recovered slightly less than half of the amount that it sought to recover by the appeal.

13. In my view, that order is the appropriate one to make, but not because of the monetary quantum of the recovery involved.  It is not possible to make an informed assessment of the costs that were incurred on one question as opposed to the other.  Nevertheless, making what is a rough estimate, there were substantial costs incurred on both questions and it is possible that more costs were incurred in preparing the evidence and for hearing on the second question on which the appellant was not successful, than upon the first question on which it did succeed.

14. Apart from the appellant’s application for an order for costs of the application for a statutory order of review under the Judicial Review Act 1991 (Qld), no other submissions are made about that application.  The questions resolved and the orders made by the principal judgment did not involve any consideration of the application for judicial review.  Accordingly, I make no order as to the costs of that application. 

Interest

15. Section 61 of the TAA provides for the court to make an order that the Commissioner pay interest on the overpaid amount where a taxpayer is entitled to a refund of tax because of a reassessment giving effect to a decision of the court made under s 74 on an appeal by the taxpayer. 

16. It appears that because the appeal has resulted in a reassessment of the appellant’s liability to payroll tax, and a refund of $958,886.98, the appellant may be entitled to an order under s 61(2) of the TAA.  Such an order must be calculated pursuant to s 61(3) of the TAA on a daily basis at the prescribed rate from the date the overpaid amount was paid to the Commissioner to the date the refund is made by the Commissioner.

17. Neither party submits a relevant calculation for me to decide. Nor is the amount yet agreed.  Accordingly, both parties apply for a form of order that will permit the resolution of any dispute as to the amount required to be paid by way of interest, as previously mentioned.

18. As there does not appear to be contested that the respondent is obliged to pay interest in accordance with s 61(3) of the TAA, it is appropriate to make an order to that effect and to grant liberty to apply. 

Footnotes

[1] [2015] QSC 77.

[2] Tabtill Pty Ltd v Cresswick: Cresswick v Cresswick & Ors [2012] QCA 78, [6]; Allianz Australia Insurance Ltd v Swainson [2011] QCA 179, [4]; Yarra Nipro Pty Ltd v Interfort Australia Pty Ltd [2010] QCA 164, [8]; BHP Coal Pty Ltd v O&K Orenstein & Coppel AG (No 2) [2009] QSC 64, [6]-[8].

[3] Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26, 61.

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Editorial Notes

  • Published Case Name:

    Queensland Chamber of Commerce & Industry Ltd v Commissioner of State Revenue (No 2)

  • Shortened Case Name:

    Queensland Chamber of Commerce & Industry Ltd v Commissioner of State Revenue (No 2)

  • MNC:

    [2015] QSC 115

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    08 May 2015

Litigation History

No Litigation History

Appeal Status

No Status