Harvey v Commissioner of State Revenue
[2014] QSC 183
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- Notable Unreported Decision
- Appeal Determined (QCA)
- Harvey v Commissioner of State Revenue[2014] QSC 183
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Harvey v Commissioner of State Revenue[2014] QSC 183
Harvey v Commissioner of State Revenue[2014] QSC 183
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Trial |
DELIVERED ON: | 12 August 2014 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 27 March 2014, 23 May 2014 |
JUDGE: | Jackson J |
ORDERS: | The order of the Court is that: 1. The proceeding is dismissed. 2. The parties’ submissions on costs should be made forthwith. |
CATCHWORDS: | TAXES AND DUTIES – STAMP DUTIES – ARRANGEMENTS AFFECTING LIABILITY TO DUTY – where the Duties Act 2001 (Qld) imposes transfer duty on a transfer of dutiable property as a dutiable transaction – where duty is imposed at the time of signing an instrument which will effect the transfer on registration- where the transferor is not the owner of the dutiable property - where the instrument of transfer cannot be registered – whether the transaction is a transfer of dutiable property TAXES AND DUTIES – STAMP DUTIES – ARRANGEMENTS AFFECTING LIABILITY TO DUTY – where the Commissioner made a default assessment of transfer duty imposed on a dutiable transaction – where the taxpayer signed an instrument in Form 1 Transfer under the Land Title Act 1991 (Qld) – where the instrument was later cancelled – where the taxpayer as owner and the vendor had relied upon the instrument to reduce or exempt their respective land tax liabilities – whether the instrument was cancelled “before it has legal effect” ADMINISTRATIVE LAW – JUDICIAL REVIEW – PRIVATIVE CLAUSES – where the plaintiff sought declarations that the default assessment was invalid on a number of grounds – where the Commissioner relied on the privative effect of provisions in the Tax Administration Act 2001 (Qld) excluding judicial review – whether the alleged grounds of invalidity amounted to jurisdictional error – whether s 132 of the Tax Administration Act 2001 (Qld) validated error in the default assessment - whether non-compliance with s 21 of the Duties Act 2001 (Qld) within the reach of s 132 Duties Act 2001 (Qld), s 16, s 21, s 156A, Taxation Administration Act 2001 (Qld), s 77, s 132, Land Title Act 1991 (Qld) Land Tax Act 1915 (Qld), s 11 Kirk v Industrial Court of New South Wales (2010) 239 CLR 531, considered Kable v Director of Public Prosecution (NSW) (1996) 189 CLR 51, distinguishedThiess v Collector of Customs (2014) 88 ALJR 514, cited Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, cited Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, cited Taylor v The Owners – Strata Plan No 11564 (2014) 88 ALJR 473, cited Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146, considered Ainsworth v Criminal Justice Commission (1991-1992) 175 CLR 564, cited Newcastle Wallsend Coal Co Pty Ltd v Court of Coal Mines Regulation (1997) 42 NSWLR 351, cited Attorney-General (NT) v Emmerson (2014) 88 ALJR 522, cited |
COUNSEL: | L Harrison QC and T Somers for the applicant M Hinson QC for the respondent |
SOLICITORS: | Elliott & Harvey for the applicant Crown Law for the respondent |
[1] Jackson J: This proceeding was started by originating application and continued as if started by claim. The subject of the dispute is a default assessment made by the defendant Commissioner of the liability of the plaintiff, Jane Harvey, as tax payer, for transfer duty imposed on a dutiable transaction under s 16 of the Duties Act 2001 (Qld) (“DA”). The default assessment was made under s 13(2) of the Taxation Administration Act 2001 (Qld) (“TAA”). On 13 December 2010 the Commissioner issued an assessment notice for the following amounts:
(a) $274,425.00 transfer duty;
(b) $205,818.75 penalty duty; and
(c) $22,874.97 unpaid tax interest.
[2] The plaintiff claims declaratory relief that she is not indebted for transfer duty, penalty duty, unpaid tax interest, or the cost of valuations also claimed by the Commissioner to be payable in respect of the transaction or transactions in question. She also claims injunctive relief to have the relevant transfer and the agreement for transfer reassessed.
[3] The challenge to the default assessment is founded on two main contentions. First, the plaintiff alleges that the default assessment is invalid and void and thus engages no liability to pay duty or interest. There are a number of alternative bases for that contention. Second, if the default assessment is valid, she alleges that the Commissioner is obliged to make a reassessment of transfer duty (and other amounts) for the transaction because the instrument which effected or evidenced the relevant transfer of dutiable property was cancelled by the parties before it had legal effect. Both contentions turn on the proper construction of the DA applied to uncontentious facts.
[4] The Commissioner disputes both contentions. In addition, he relies on procedural defences. First, he submits that the Judicial Review Act 1991 (Qld) Pt 5 does not apply to either the default assessment or his decision disallowing the plaintiff’s objection against the default assessment, relying on the privative effect of s 77 of the TAA. Second, he alleges that his production of a copy of the default assessment notice is conclusive evidence of the proper making of the default assessment and that the amount and or particulars of the assessment are correct, relying on s 132 of the TAA.
[5] The plaintiff meets the privative effect of s 77 of the TAA with the contention that the Commissioner’s errors amount to jurisdictional errors and engage the supervisory jurisdiction of this court on the principle of Kirk v Industrial Court of New South Wales (“Kirk”).[1] In addition, she meets the conclusive evidence effect of s 132 with the contention that the section is invalid because of the principle expounded in Kable v Director of Public Prosecution (NSW).[2]
[6] It is appropriate to summarise the operation of some relevant primary provisions of the DA and to identify the relevant facts before dealing with those contentions.
Summary of primary DA provisions
[7] Chapter 2 of the DA imposes transfer duty on dutiable transactions. Section 9(1) defines dutiable transactions. Relevantly, pars (a) and (b) are “a transfer of dutiable property” and “an agreement for the transfer of dutiable property, whether conditional or not”. Section 10(1)(a) defines dutiable property to include land in Queensland.
[8] Section 11(7) relevantly defines the dutiable value of some dutiable transactions as “the consideration for the dutiable transaction” or “the unencumbered value of the dutiable property”, if, inter alia, the unencumbered value is greater than the consideration for the transaction.
[9] Section 15 provides that the unencumbered value of dutiable property is determined, for some dutiable transactions, when the liability for transfer duty arises. Section 16 provides that a liability for transfer duty imposed on a dutiable transaction in Sch 2, column 1 arises at the time stated opposite the transaction in Sch 2, column 2.
[10] There is a dutiable transaction in Sch 2, column 1 comprising a “[t]ransfer of dutiable property”. Schedule 2, column 2 opposite that transaction states that the liability for transfer duty arises for that transaction, “if an instrument effects, or when recorded in a register will effect, the transfer- when the instrument is signed by the parties to the transaction”.
[11] Schedule 2 column 1 also identifies a dutiable transaction comprising an “[a]greement for transfer of dutiable property”. Schedule 2 column 2 specifies that the liability for transfer duty arises for that transaction “[w]hen the agreement is made”.
Facts relating to the assessment
[12] In December 2008, the plaintiff began residing at 1 Heron Avenue, Mermaid Beach (“the property”). At that time, Laworld Brisbane Pty Ltd (“Laworld”) was registered as the proprietor of the indefeasible title of the property under the Land Title Act 1991 (Qld) (“LTA”).
[13] On 15 May 2009, Laworld’s sole director, the plaintiff’s husband, resolved to sell the property to the plaintiff for the price of $1,500,000. The date for completion was to be the later of 15 June 2009 or 14 days from written confirmation by the company that National Australia Bank (“NAB”) agreed to release their security in order to provide clear title to the plaintiff.
[14] On 16 May 2009, the plaintiff signed the minute of the resolution of Laworld’s director confirming her agreement to the terms and conditions set out in the minute.
[15] By 15 June 2009, NAB had not agreed to release their security over the property in order to provide clear title to the plaintiff. NAB never did so.
[16] However, on 15 June 2009, Laworld, as transferor, signed an instrument of transfer in Form 1 under the LTA in favour of the plaintiff (“the 15 June transfer”). Both Laworld, by its director, and the plaintiff signed the 15 June transfer. It was expressed to be made for the consideration of $1,500,000. It contained an acknowledgement by the transferor of receipt of the payment of that sum. It also confirmed the accuracy of the relevant Form 24, containing property information relating to the circumstances of the transaction, for the purposes of the DA. A Form 24 was executed by the parties as well.
[17] Section 11(1) of the Land Tax Act 1915 (Qld) provided that land tax shall be payable by every owner of land not exempt from taxation. Section 11(6A) exempted a parcel owned by an individual otherwise than as trustee and used as the individual’s principal place of residence.
[18] On 17 August 2009, a notice of assessment of land tax under the Land Tax Act 1915 (Qld) was issued to Laworld, including $92,333.32 in respect of the property.
[19] On 2 November 2009, the plaintiff applied to the Office of State Revenue for allowance of a deduction from land tax in respect of the property by lodging a signed Form LT12 exemption or deduction claim form for principal place of residence under the Land Tax Act 1915 (Qld). In support of the claim for deduction she later provided:
(a) a copy of a Form 23 settlement notice under the LTA relating to the property and the transfer;
(b) a letter from Laworld to the Office of State Revenue dated 17 November 2009;
(c) a copy of the 15 June transfer (enclosed with the 17 November letter);
(d) a copy of a Form 24 property information form for the property (enclosed with the 17 November letter); and
(e) a letter from the plaintiff to the Commissioner dated 18 November 2009.
[20] At the same time as the plaintiff applied for allowance of a deduction from land tax, Laworld sought to reduce it’s liability to land tax under the 17 August 2009 notice of assessment. Both applications were based, at least in part, on the 15 June transfer.
[21] On 18 November 2009, an amended notice of assessment of land tax was issued to Laworld. It deleted the property from Laworld’s land tax assessment and assessed the land tax payable by Laworld as nil, thereby reducing it from $92,333.32.
[22] Also on 18 November 2009, an amended notice of assessment of land tax was issued to the plaintiff. It included the property as land in respect of which the plaintiff was liable to pay land tax, and allowed the plaintiff a principal place of residence deduction on the property, in an amount equivalent to its full unimproved value. The amended assessment assessed the land tax payable by the plaintiff in the sum of $8,580.35.
[23] Section 141 of the LTA provides that the deposit of a settlement notice prevents registration of an instrument affecting the lot or an interest in the lot until the notice lapses or is withdrawn removed or cancelled. Section 139 provides that a settlement notice must be signed by a transferee and that it must specify all instruments directly related to the transaction to which the settlement notice relates.
[24] On 4 November 2009, the plaintiff lodged the Form 23 settlement notice at the office of the Registrar of Titles.
[25] On 25 November 2009, the Commissioner sought information from Laworld as to the value of the property at the date of the plaintiff’s acquisition.
[26] On 21 December 2009, the plaintiff obtained an appraisal of the value of the land from Burleigh Miami Realty. The “reasonable asking price” was expressed as a range from $1,048,000 to $1,520,000 as at 15 June 20009.
[27] On 8 December 2010, the plaintiff gave notice to Laworld terminating the agreement to purchase the property.
[28] On 13 December 2010, the Commissioner obtained a restricted valuation report by Candice Ashleigh, registered valuer, opining that the indicative value range of the property as at 15 June 2009 was $5,000,000 to $5,500,000.
[29] On 13 December 2010, as previously stated, the Commissioner issued the assessment notice for the default assessment. As previously stated, the Commissioner assessed the plaintiff’s liability for transfer duty in the amount of $274,425, penalty tax at $205,818.75 and unpaid tax interest of $22,874.97.
[30] The assessment notice, inter alia, stated the following particulars:
“Unpaid Tax Interest Start date: 15 August 2009
Date of transaction:15 June 2009
Consideration:$5,500,000
Transaction type:Transfer of Residential Land
Agreement to transfer dutiable property, Land in Queensland”
[31] On 2 February 2011, the plaintiff lodged an objection to the default assessment on the ground, among others, that the agreement between Laworld and the plaintiff had been cancelled.
[32] On 29 March 2011, the Commissioner disallowed the plaintiff’s objection. At the same time, the Commissioner notified that he would consider an application by the plaintiff based on s 115 of the DA.
[33] On 15 September 2011, the property was transferred by NAB to a third party as a result of the exercise of the power of sale in the mortgage held by NAB.
[34] On 18 April 2011, the Commissioner notified the plaintiff that s 115(1) of the DA did not apply, confirming the reassessment notice.
[35] On 20 April 2011, the plaintiff objected to the s 115 decision.
[36] Proceedings were started by the plaintiff in this Court. They did not resolve the dispute.
[37] On 19 March 2013, the Commissioner disallowed the plaintiff’s objection to the s 115 decision.
[38] On 11 February 2014, the plaintiff cancelled the 15 June transfer.
[39] On 13 February 2014, the plaintiff made an application for reassessment on the ground that the 15 June transfer was cancelled.
[40] By par 72 of the amended defence, the Commissioner says that the plaintiff is not entitled to a reassessment because the 15 June transfer was not cancelled before it had legal affect.
[41] I note that the plaintiff did not inform the Commissioner of the signed 15 May 2009 resolution until after the default assessment was made. Until then, the only agreement for transfer of the property to which reference was made was an oral agreement between Laworld and the plaintiff, as evidenced by the 15 June transfer, the Form 24 property information form and statements made by or on behalf of the plaintiff.
Reassessment of an instrument of transfer under s 156A
[42] The plaintiff challenges the validity of the default assessment on a number of grounds. Alternatively, if it is valid, the plaintiff challenged the Commissioner’s rejection of her application to reassess the 15 June transfer as a transfer of dutiable property under s 156A of the DA. It is convenient to start with that part of the dispute.
[43] Section 156A of the DA provides, in part, as follows:
“156A Reassessment of duty for cancelled transfer of dutiable Property
(1) This section applies if—
(a) transfer duty has been assessed on a transfer of dutiable property effected or evidenced by an instrument; and
(b) the instrument is cancelled by the parties before it has legal effect; and
(c) the dutiable property has not been transferred to the transferee or a related person of the transferee; and
(d) the instrument was not cancelled—
(i)to give effect to a resale agreement; or
(ii) as part of an arrangement under which any of the dutiable property is or will be transferred, or is agreed to be transferred, to the transferee or a related person of the transferee.
(2) For this section, an instrument has legal effect if—
(a) for an instrument that, when recorded in a register, will effect the transfer of dutiable property—the instrument is lodged for recording in the register; or
(b) a right has been exercised, or an obligation fulfilled, under the instrument; or
(c) the instrument has been relied on in any other way.
(3) …
(4) The person may lodge an application for a reassessment in the approved form within 6 months after the instrument is cancelled.
(5) The person must lodge the instrument with the application, unless the commissioner decides lodgement of the instrument is unnecessary.
(6) The commissioner must make a reassessment of transfer duty for the transaction on the basis that transfer duty is not imposed on the transaction.” (emphasis added)
[44] The dispute between the parties as to whether the plaintiff is entitled to a reassessment of transfer duty for the transaction turns on whether the cancellation of the 15 June transfer was made “before it ha[d] legal effect” under s 156A(1)(b).
The three conditions under s 156A(2)
[45] Section 156A(2) provides that an instrument has legal effect if any one of three conditions, set out in pars (a), (b) and (c), is satisfied.
[46] Paragraph (a) operates in relation to an instrument that when recorded in a register will effect the transfer of dutiable property. A transfer in Form 1 under the LTA is an instrument of that kind. A transfer of an interest in fee simple of the indefeasible title to land held under the LTA is classically described as operating in a system of transfer of “title by registration”.[3] It is the recording of the particulars in the freehold land register which registers the transfer.[4] On registration of the instrument of transfer for a lot, the rights powers, privileges and liabilities of the transferor in relation to the lot vest in the transferee.[5] In this case, par (a) was not engaged because the 15 June transfer was not lodged for recording in the register.
[47] Paragraph (b) operates when a right has been exercised or an obligation fulfilled under the instrument. It is not necessary to consider the operation of par (b) in detail because the Commissioner does not rely on it. Nevertheless, as context for the construction of par (c), it can be observed that par (b) is engaged where the instrument which effects or evidences the transfer of dutiable property has had a legal consequence either in the form of a right being exercised under it or an obligation being fulfilled under it.
[48] It is in that context that par (c) operates as the third basis for the conclusion that an instrument has legal effect, if the instrument “has been relied on in any other way”. The reference to any “other” way connotes that par (c) is intended to operate in circumstances other than where the instrument of transfer is lodged for recording in the register or a right has been exercised or an obligation fulfilled under it. Leaving those categories aside, par (c) operates if the instrument has been relied on in any way.
[49] The plaintiff submits that par (c) has no operation in the case of an instrument of transfer in Form 1 under the LTA. The plaintiff submits that only par (a) operates in such a case. That is, par (a) covers the field applying to an instrument that when recorded in a register will effect the transfer of dutiable property. Paragraph (c) has no operation for such an instrument.
[50] In my view, there are some contextual limits on the way in which par (c) operates. Thus, although par (c) is engaged when the relevant instrument is relied on in any other way, it seems to me that it’s operation is confined to reliance on the instrument as an instrument which effects or evidences a transfer of dutiable property. For example, use of the piece of paper constituting the instrument for some physical purpose would not constitute reliance on the instrument in any way.
[51] That view is supported by the context that 156A is structured so that its application is limited by s 156A(1)(a) to a transfer of dutiable property “effected or evidenced by” an instrument. Further, the provision in s 156A(1)(b) that the section applies if the instrument is cancelled “before it has legal effect” suggests that it is the instrument’s legal effect that is to be considered, not some other physical use.
[52] Paragraph (c) also operates in the context that it is a pre-condition for the application of s 156A that the dutiable property has not been transferred to the transferee or a related person. By definition, therefore, the reliance on the instrument in another way, within par (c) is not as a transfer of title or interest in the dutiable property.
[53] Having regard to that structure and to the text of the par (c), as a matter of ordinary meaning there is no apparent basis to conclude that par (c) does not operate in the case of a instrument that when recorded in a register will effect the transfer of dutiable property which is a transfer in Form 1.
[54] In a recent case, Thiess v Collector of Customs,[6] the High Court affirmed the process of statutory construction thus:
“Statutory construction involves attribution of meaning to statutory text. As recently reiterated:
‘This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text’. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text.’”.[7] (footnotes omitted)
[55] As was said by the plurality in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue,[8] a duties case:
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”[9] (footnotes omitted)
[56] In another recent case, Taylor v The Owners – Strata Plan No 11564,[10] the High Court reaffirmed the need for statutory interpretation to accord with “the statements of principle in Cooper Brookes”,[11] referring to Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation,[12] another tax case. A salutary example of part of those statements appears from Gibbs CJ reasons as follows:
“However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that ‘it may degrade into mere judicial criticism of the propriety of the acts of the Legislature’…”[13]
[57] The plaintiff submitted that, if, for example, a caveat is lodged that relies on an instrument of transfer as supporting the interest claimed in the caveat, it would be absurd or incongruous if the caveat were later removed yet the instrument were treated as having legal effect under par (c) because the instrument has been relied on.
[58] In my view, that possibility reveals no absurdity or incongruity in the operation of par (c) which should lead to the words being given a meaning at variance with the meaning ascertained as a matter of ordinary meaning and by applying rules of grammar and syntax, having regard to the purpose of the provisions in question.
[59] By way of comparison, it can be seen that par (a) will be engaged if an instrument of transfer in Form 1 is lodged and is not registered. Let it be assumed that the instrument of transfer is later removed. The application of paragraph (a) would not be affected. When the instrument was lodged, it “has legal effect” under subsection (2).
[60] In my view the plaintiff’s submission that par (a) covers the whole field of the operation of s 156A(2) in relation to an instrument that when recorded in a register will effect the transfer of dutiable property should be rejected. The remaining question as to the application of s 156A is whether the instrument has been relied on in any way other than covered by pars (a) and (b).
Alleged reliance
[61] The Commissioner submits that the 15 June transfer has been relied on in three ways. First, in par 71 of the defence, he alleges that it was relied upon by Laworld to reduce the tax liability of Laworld. Second, also in para 71 of the defence, he alleges that the plaintiff relied on it to claim an exemption from land tax for the plaintiff. Thirdly, the Commissioner submits that the 15 June transfer was relied on to lodge the settlement notice on 4 November 2009.
[62] First, as to Laworld, was the 15 June transfer relied on to reduce its land tax liability? The plaintiff does not directly contest that contention. The basis of the reduction in land tax sought by Laworld would appear to have been that as the plaintiff had become “owner” of the property, Laworld was not the “owner” at 30 June 2009. Laworld’s correspondence with the Office of State Revenue about land tax relied on the 15 June transfer and the fact of the plaintiff’s possession of the property.[14]
[63] The 16 May agreement was an agreement for the sale of land but was not specifically relied on at the time. The plaintiff was living at the property. She had possession of the property. On the footing that there was an agreement for sale of the property, under s 3B(3)(b) of the Land Tax Act 1915 (Qld) she was taken to be the owner of the land and subject to land tax. Under s 12, the land tax was imposed as a liability arising on 30 June 2009 for the following financial year. Under s 39A, the plaintiff as a person becoming an owner was obliged to give the Commissioner notice. However, none of those things involved the plaintiff or Laworld relying on the 15 June transfer as such. Its relevance was as evidence of an agreement for sale of the property for the purpose of s 3B(3)(a) and (b).
[64] Second, did the plaintiff rely on the 15 June transfer in her application for an exemption from land tax? In making her application for “exemption” from land tax, the plaintiff provided a copy of the 15 June transfer to the Commissioner. However, she was not relying on it to make the application for “exemption”. Precisely put, the application was for an “allowable PPR reduction”[15] equivalent to the relevant unimproved value of the property.[16] That question only arose if the plaintiff was the owner of the property. But she was not owner under the transfer as an instrument. She was taken to be owner under the agreement for sale and because she had possession of the property under s 3B(a) and (b).
[65] In my view, by deploying the 15 June transfer to show that the plaintiff and not Laworld was taken to be the owner of the property, both Laworld and the plaintiff relied on the 15 June transfer as evidence of the agreement for sale to achieve that result.
[66] In my view, that was reliance upon the 15 June transfer in a way that engaged s 156A(2)(c) of the DA. For those reasons, in my view, the transfer was not cancelled by the parties before it had legal effect within the meaning of s 156A(1)(b) and s 156A(2).
[67] It follows that the plaintiff is not entitled under s 156A(6) of the DA to have the Commissioner make a reassessment of transfer duty for the transaction on the basis that transfer duty is not imposed on the transaction.
[68] It is therefore unnecessary to consider whether the plaintiff, by lodging a settlement notice, based on the 15 June transfer, to protect the register against the registration of an inconsistent dealing pending completion of her acquisition of the property, also relied on it in a way that engaged s 156A(2)(c) of the DA.
Additional construction argument
[69] In an additional submission made in writing, the plaintiff submitted that the DA did not continue to operate to impose duty for a dutiable transaction of a transfer of dutiable property, where the transferor is no longer the registered proprietor of the property, so that the instrument which would effect the transfer when recorded in the register can never be registered.
[70] In my view, there is no basis on the text or context of the DA for this suggested gloss on the operation of the sections previously summarised in these reasons. As previously discussed, duty is imposed on a dutiable transaction of transfer of dutiable property under s 16 of the DA if the instrument of transfer which when recorded in a register will effect the transfer is signed and s 17 engages the liability of the parties to thr transaction to pay the duty.
[71] Where transfer duty is paid on an agreement for transfer, liability may not be imposed on the transfer of the same property to the transferee under the agreement under s 22(2) of the DA. Further, where a transaction for property constitutes more than one dutiable transaction the Commissioner is required to decide the dutiable transaction on which transfer duty is imposed under s 21(1) of the DA. Third, when the instrument is cancelled before it has legal effect, within the meaning of s 156A, the Commissioner must make a reassessment in the circumstances provided for by that section.
[72] In my view, it would be inconsistent with those provisions to construe the DA as impliedly relieving a taxpayer from duty imposed under s 16 and payable by the parties under s 17, because the signed instrument which engaged the liability to duty subsequently became unregistrable when the transferor ceased to be the registered proprietor. Nothing supports the view that duty is not payable merely because the transfer is ultimately not registered, whether or not because the transferor ceases to be registered proprietor.
Grounds of invalidity of the default assessment
[73] The plaintiff alleges that the amended assessment is invalid on a number of grounds. It will be convenient to consider the Commissioner’s reliance on procedural defences before going to the substance of any alleged grounds of invalidity. But first it is necessary to set them out.
[74] The first ground of alleged invalidity is that the default assessment was based on a valuation of the property that expressed an indicative value range. Section 11(7) of the DA provides in part that:
“…the dutiable value of another dutiable transaction is—
(a) the consideration for the dutiable transaction; or
(b) the unencumbered value of the dutiable property … if—
(i) …
(iii) the unencumbered value is greater than the consideration for the transaction.”
[75] “Value” is not defined in the DA. The plaintiff says it is a single amount, not a range of values.
[76] However, the default assessment did not express a range of values. It stated the amount of $5,500,000 as the “consideration” in the particulars. That was an error. That amount was not the consideration under the agreement for sale. It was the amount at the top of the range of indicative values of the unencumbered value of the property.
[77] The second ground of alleged invalidity of the default assessment is that the transaction for sale of the property constitutes more than one dutiable transaction, so that imposition of transfer duty on all of the dutiable transactions would result in transfer duty being imposed more than once on the transaction. The plaintiff contends that the Commissioner was obliged to but did not decide the dutiable transaction on which transfer duty is imposed.
[78] The particulars of the default assessment state that the transaction type was “Transfer of residential land” and “Agreement to transfer dutiable property, Land in Queensland”. As defined in s 9, and stated in Schedule 2, Column 1, a transfer of dutiable property and an agreement for the transfer of dutiable property are two separate dutiable transactions.
[79] The Commissioner points to the fact that the plaintiff did not provide evidence of the 16 May agreement until after the date of the default assessment. However, it still appears that the Commissioner made the default assessment on the basis of two dutiable transactions, that is a “[t]ransfer of residential land” and an “[a]greement to transfer dutiable property…”.
[80] The third ground of alleged invalidity starts from the point that the default assessment was made under s 13(1)(a)(ii) of the TAA. Relevant parts of s 13 are as follows:
“13 Default assessments
(1)This section applies in each of the following circumstances—
(a) for—
(i)a self assessment—the assessment is not made; or
(ii)another assessment—the taxpayer does not give information required to be given under an information requirement or lodge a document required to be lodged under a lodgement requirement;
(b)the commissioner is not satisfied about the accuracy or completeness of a document lodged, or information given, for the assessment of a taxpayer’s liability for tax under a tax law;
(c)the commissioner does not have enough information to properly assess a taxpayer’s liability for tax under a tax law, including, for example, if the commissioner reasonably believes—
(i)it is necessary to make an immediate assessment; and
(ii)the time for complying with an information or lodgment requirement has not ended.
Example for subsection (1)(c)—
The commissioner reasonably believes a taxpayer is going to leave the State before documents that will disclose a liability for tax are required to be lodged.
(2)The commissioner may make an assessment under this section (a default assessment) for the amount the commissioner reasonably believes to be the taxpayer’s liability.”
[81] The plaintiff submits that she did not fail to give information required to be given. Therefore, no basis arose to make a default assessment under s 13(1)(a)(ii) and the default assessment is invalid. The Commissioner submits that the default assessment was made under s 13(1)(b), not s 13(1)(a)(ii). The Commissioner’s basis for the default assessment was that he was not satisfied about the accuracy of information given as to the unencumbered value of the property at 15 June 2009.
[82] The fourth ground of alleged invalidity is that the 15 June transfer was executed “as an escrow” and a transfer executed in escrow is not liable to duty until fulfilment of the condition of the escrow.
Kirk and ss 77 and 132 of the TAA
[83] Section 77 of the TAA provides, in part:
“77 Application of Judicial Review Act
The Judicial Review Act 1991, parts 3 and 5, does not apply
to—
(a)an assessment; or
(b)a decision or conduct leading up to or forming part of the process of making an assessment; or
(c)a decision disallowing, in whole or in part, an objection against an assessment; or
(d)...”
[84] Section 132 of the TAA provides:
“132 Evidentiary provisions for assessments
(1) Production of a document signed by the commissioner purporting to be a copy of an assessment notice—
(a)is conclusive evidence of the proper making of the assessment; and
(b)for—
(i)a proceeding on an appeal against a decision on an objection—is evidence that the amount and all particulars of the assessment are correct; or
(ii)another proceeding—is conclusive evidence that the amount and all particulars of the assessment are correct.
(2) The validity of an assessment is not affected merely because a provision of a tax law has not been complied with.”
[85] The Commissioner submits that the plaintiff cannot maintain any of the grounds of alleged invalidity in the face of ss 77 and 132. The argument involves two steps. First, s 77 excludes the jurisdiction of this Court to judicially review the default assessment or the process of assessment under the JRA. Therefore, the plaintiff’s application to this Court can only be made in its supervisory jurisdiction, by exercise of the constitutionally entrenched power to grant an order in the nature of certiorari, quashing a decision for jurisdictional error. This Court’s power to grant that relief continues notwithstanding the privative effect of statutory provisions such as s 77: Kirk. The plaintiff does not dispute that the effect of s 77 is to exclude the operation of the JRA in relation to the default assessment.
[86] Secondly, the Commissioner relies on Commissioner of Taxation v Futuris Corporation Ltd (“Futuris”),[17] as supporting the contention that, having regard to the effect of s 132(2), the plaintiff’s grounds of invalidity do not amount to jurisdictional error within the operation of the Kirk principle. He submits that only jurisdictional error beyond what answers the statutory description of an assessment or conscious maladministration can ground a challenge to the default assessment in this Court and that none of the plaintiff’s grounds of review amount to either of those kinds of jurisdictional error.
[87] Nevertheless, one does not reach the question of the impact of s 132(2) and Futuris, unless a relevant ground of alleged invalidity would otherwise amount to a jurisdictional error in the first place. It is appropriate, therefore, to first analyse whether any of the grounds of invalidity is capable of amounting to jurisdictional error, apart from the operation of s 132 and the effect of Futuris.
[88] In my view, the first ground of alleged invalidity does not raise a question of jurisdictional error. There is a false step in the plaintiff’s argument on this point. It is that because the valuation obtained by the Commissioner expressed the value of the property as a range, the default assessment is based on a range. The assessment notice states that the “consideration” was $5,500,000. In fact, that was wrong, because the consideration under the agreement for transfer of dutiable property and the 15 June transfer was $1,500,000. The Commissioner did not adopt that consideration as the dutiable value of either of the potential statutory dutiable transactions in making the default assessment. Instead, he adopted an amount of $5,500,000, which was the highest amount stated in the indicative value range given by Ms Ashleigh. He wrongly called it “consideration” in the assessment notice. He did not state that it was the unencumbered value in making the default assessment under s 13 of the TAA. But, in my view, that was not a jurisdictional error.
[89] Further, if the amount of $5,500,000 is taken as the amount for an assessment based on unencumbered value, it is not infected by any statement of range of values. The basis of a default assessment is to be “the amount the commissioner reasonably believes to be the taxpayer’s liability”.[18] As well, “the commissioner may make an assessment on the available information that the commissioner considers relevant”.[19] Neither of those provisions necessarily ties the assessment to the manner of expression employed in a valuation, indicative or otherwise, which the Commissioner obtains as information for those purposes.
[90] Next, in my view, the third ground of alleged invalidity also does not raise a question of jurisdictional error. There is no reason why the default assessment must be treated as one made under s 13(1)(a)(ii) of the TAA. The Commissioner’s submission is that s 13(1)(b) will support the making of the default assessment, on the basis that the Commissioner was not satisfied about the accuracy of the information given for the assessment of the plaintiff’s liability for transfer duty under pt 3 of ch 2 of the DA. In my view, that submission should be accepted. There was no error of law or jurisdictional error involved in the decision to make a default assessment under s 13(1)(b).
[91] In my view, the fourth ground of alleged invalidity also does not raise a question of jurisdictional error. Under Sch 2, column 1 a “[t]ransfer of dutiable property” is a dutiable transaction. The time “[w]hen liability for transfer duty arises” under Sch 2, column 2 is, in the case of a transfer in Form 1 under the LTA, “when the instrument is signed by the parties to the transaction”. That occurred in the present case on 15 June 2009.
[92] The plaintiff relies on cases decided under other statutory provisions as supporting the conclusion that if the instrument is delivered in escrow, it is not dutiable. However, the DA expressly deals with conditional transactions to some extent. Thus, in the case of an “[a]greement for transfer of dutiable property” which is a dutiable transaction under Sch 2, column 1, s 115 provides that “[t]ransfer duty is not imposed… if… the agreement is ended because of non-fulfilment of a condition of it”. As the liability for transfer duty arises when the agreement is made, the effect of s 115 is to lift the imposition of transfer duty which has previously been imposed. Consistently with that, s 115(3) provides for reassessment in cases where the duty has been paid before the agreement is ended.
[93] There is no similar qualification about the imposition of transfer duty where liability for it arises on the signing of an instrument which when recorded in a register will effect the transfer of dutiable property. Instead, s 156A provides for reassessment in cases where an instrument evidences a transfer of dutiable property and the instrument is cancelled before it has legal effect.
[94] In my view, there is no warrant in the text or context of the DA for importing an exception to the duty imposed on a “transfer of dutiable property” if the instrument of transfer is signed but delivered in escrow. Whether the instrument is delivered conditionally is not identified in the text of the legislation as a basis for not imposing duty on a signed instrument of transfer in Form 1. In my view, there is no process of construction of the DA which pays close attention to its text or context by which the time when liability for transfer duty arises for a transfer of dutiable property can be read as meaning when the instrument is signed, but not if the transfer is delivered or held in escrow.
[95] The remaining question is whether the second ground of alleged invalidity constitutes a jurisdictional error. In the case of a contract of sale of land held under the LTA, there will ordinarily be two potentially dutiable transactions: the agreement for the transfer of the dutiable property (s 9(1)(a) of the DA) and the transfer of the dutiable property (s 9(1)(b) of the DA).
[96] Section 22(2) of the DA provides that “[i]f transfer duty imposed on a dutiable transaction that is an agreement for the transfer of dutiable property is paid, no transfer duty is imposed on the transfer of the property to the transferee under the agreement”. It will ordinarily have the effect that no duty is imposed on the transfer of the dutiable property to the transferee under the agreement, if transfer duty is paid on the agreement for the transfer. But what of the case where transfer duty is not assessed and paid on the agreement for the transfer? Prima facie, if a Form 1 instrument of transfer is signed, there are two dutiable transactions in the one transaction for sale of the property. In that case, s 21 of the DA is engaged. It provides as follows:
“21 No double duty—general
(1) If a transaction for property constitutes more than 1 dutiable transaction for the property and imposition of transfer duty on all of the dutiable transactions for the property would result in transfer duty being imposed more than once on the transaction, the commissioner must decide the dutiable transaction on which transfer duty is imposed.
Note—
For objections and appeals against assessments of duty, see the Administration Act, part 6.
(2) For subsection (1), the commissioner must decide the dutiable transaction that is the most applicable dutiable transaction having regard to the provisions of this chapter and the primary purpose of the transaction.”
[97] In a case like the present, the Commissioner “must decide” to choose either the agreement for the transfer or the transfer of the property as the most applicable dutiable transaction. He is to have regard to Ch 2. Chapter 2 includes s 22(2).
[98] In the present case, the Commissioner did not comply with s 21. Instead, by the default assessment, he purported to assess both dutiable transactions to one lot of transfer duty. If s 21 applies, that can be done on one or the other dutiable transaction, but not on both.
[99] That error in compliance with the requirements of s 21 was an error of law. Was it a jurisdictional error? In Kirk, the plurality reasons discussed the nature of jurisdictional error in Australia by an inferior court, including in that description a case of “misconstruction of the relevant statute thereby misconceiving the nature of the function which the inferior court is performing or the extent of its powers in the circumstances of the particular case”.[20]
[100] The plaintiff submitted that “[a]lthough the foundation of the Kirk principle is the notion of the institutional integrity of the Court, it convenient to refer to it as precluding the impermissible limitation of the powers of the Court to restrain the executive from exceeding its statutory functions”. However, the thrust of the submissions made was that “ignoring… s 21 of the DA, must amount to jurisdictional error.”
[101] In the present case, in my view, the Commissioner made an error of construction of the DA in failing to apply s 21 to the agreement for transfer and transfer of property so as to decide the dutiable transaction on which the transfer duty is imposed. Instead, the default assessment notice purported to impose transfer duty on both dutiable transactions, although in the amount of the duty payable on one of those dutiable transactions.
[102] This error was not necessarily inconsequential, even though the monetary amounts of the transfer duty, penalty duty and unpaid tax interest may have been the same as if one of the dutiable transactions had been decided to be the one on which transfer duty is imposed. Let it be assumed that under s 21 the Commissioner had chosen the agreement for transfer of dutiable property as the dutiable transaction. That dutiable transaction would have engaged the plaintiff’s liability under s 17(2) to pay the transfer duty imposed under s 16 of the DA. The 15 June transfer would not have engaged any liability to transfer duty. When the agreement for transfer of dutiable property was brought to an end, whether the transfer duty was “not imposed”, because of non-fulfilment of a condition, would fall for determination under s 115 of the DA. No question would have arisen whether the plaintiff was entitled, under s 156A of the DA, to a reassessment of the transfer duty imposed on the transfer of dutiable property, as previously discussed.
[103] In my view, subject to one qualification, it might have been concluded that the Commissioner made a jurisdictional error in the default assessment in purporting to assess both the agreement for transfer of the dutiable property and the transfer of dutiable property to transfer duty. The qualification is that s 132 of the TAA may lead to a contrary conclusion. I will come to that question after considering the question whether declaratory relief would otherwise be available to the plaintiff.
Declaratory relief
[104] There is no question that the supervisory jurisdiction of this Court that is preserved by the Kirk principle may be exercised by the grant of an order in the nature of certiorari to quash a decision invalidated by jurisdictional error.
[105] However, the plaintiff claims declaratory relief, not an order in the nature of certiorari. The availability of relief by way of declaration or injunction as relief in the exercise of this Court’s supervisory jurisdiction for jurisdictional error was not debated by the parties.[21] The power of this court to grant a declaration without other relief is re-enacted in s 10 of the Civil Proceedings Act 2011 (Qld). There is no doubt that such an order may be made in some cases involving jurisdictional error. Ainsworth v Criminal Justice Commission[22] is an example, although the error in that case was a breach of natural justice.
[106] Before Kirk was decided, the question of the availability of declaratory relief exercising the supervisory jurisdiction was discussed in this court in Heery v Criminal Justice Commission.[23] The context was the privative effect of s 101 of the Criminal Justice Act 1989 (Qld). Thomas JA said:
“The point at issue is whether the court’s jurisdiction to make declarations has been ousted. Whilst it is possible for such a result to be achieved courts do not lightly infer that such jurisdiction has been excluded, and clear words are necessary. The breadth and utility of this remedy and its important role in the shaping of modern administrative law is well recognised. It has been observed that at the time of its origin, declaratory relief was about the only relief available to a subject against the Crown as the courts were unable to make coercive orders against the Crown. This supervisory jurisdiction, as it has now developed, remains one of the critical tools by which courts protect individual rights and maintain the rule of law.” (footnotes omitted)
[107] Where the error or invalidity raised is one within jurisdiction, and there is an operating statutory privative clause, both logic and principle suggest that it would be inappropriate to grant a declaration if an order in the nature of certiorari or a statutory order of review would not be available because of the effect of the privative clause. Thus, it was said in Newcastle Wallsend Coal Co Pty Ltd v Court of Coal Mines Regulation[24] by Powell JA:
“The applicants have submitted that, if the Court were of the opinion thatStaunton A-DCJ fell into error in the respects submitted, but that, for thereasons to which I have just referred, relief prerogative in nature was not
available, it was open to the Court to, and the Court should, make a declaration or declarations to that effect (reference being made, in this respect, to Ainsworth v Criminal Justice Commission (1992) 175 CLR 564).
Let it be accepted that superior courts have an inherent power to grantdeclaratory relief, it nonetheless remains the fact that that power is a discretionary one. It seems to me that, even if this Court were to conclude that Staunton A-DCJ fell into jurisdictional error in the respects asserted, this is not a case in which the Court ought to make a declaration to that effect. Ainsworth v Criminal Justice Commission was a case — as also was Greiner v Independent Commission Against Corruption — where certiorari was not available since the report in question had no legal effect and carried no legal consequence, whether direct or indirect, it following that there was no room for certiorari, the function of which is to quash the legal effect, or the legal consequences, of the decision or order under review. However, as the report which gave rise to the proceedings in each of Ainsworth v Criminal Justice Commission and Greiner v Independent Commission Against Corruption, although not affecting, or creating, legal rights or obligations, contained findings which were highly critical of the applicants who, in each case, asserted that the findings had been made in contravention of the law, and as reputation is now regarded as an interest capable of attracting judicial intervention to see that the requirements of law are observed (see, eg, Mahon v Air New Zealand Ltd [1984] AC 808) it was considered appropriate (in Ainsworth v Criminal Justice Commission) to declare that “in reporting adversely to the appellants … the respondent failed to observe the requirements of procedural fairness” and (in Greiner v Independent Commission Against Corruption) that “the determination by the defendant … that the plaintiff had engaged in corrupt conduct within the meaning of the Independent Commission against Corruption Act 1988, was made without or in excess of jurisdiction and is a nullity”. Such cases are to be distinguished from the present which, although of a type which would otherwise have been subject to relief prerogative in nature, has been said by the legislature not to be subject to judicial review except in case of jurisdictional error.”
[108] In this case, if an order in the nature of certiorari for jurisdictional error might have been granted, there is no reason to decline to grant an appropriate declaration, except on discretionary grounds. The Commissioner did not submit that there were such grounds.
Jurisdictional error and s 132 of the TAA
[109] The remaining question is the effect of s 132 upon the plaintiff’s entitlement otherwise to obtain declaratory relief. The Commissioner set up s 132 as a defence to the plaintiff’s claim of invalidity of the default assessment if there was non-compliance with s 21 of the DA in making the default assessment.
[110]The plaintiff replied to that defence in two ways. First, she submitted that Futuris did not support the application of s 132, properly construed, to non-compliance with s 21. Second, she submitted that if s 132 did apply it was invalidated as a law of the State because of the operation of the Kable principle.
[111] Futuris concerned the operation of ss 175 and 177 of the Income Tax Assessment Act 1936 (Cth) (“ITAA”). Broadly speaking, s 175 corresponds to s 132(2) of the TAA. Similarly, s 177(1) corresponds to s 132(1) of the DA or parts of it. The dispute in Futuris was whether those provisions operated to uphold a further amended assessment that was alleged to be invalid because of the Commissioner’s alleged deliberate double counting of an amount assessed under an earlier amended assessment. The ITAA made provision for review or appeal of an assessment under pt IVC. Section 177, like s 132(1)(a) and (b)(ii) of the TAA, operated as a conclusive evidence provision in proceedings brought outside the statutory review or appeal process.
[112] Following the reasoning in Futuris, s 132(1)(a) and (b) are significant in determining whether “a failure by the Commissioner in the process of assessment to comply with the provisions of the Act renders the assessment invalid; in determining that question of legislative purpose regard must be had to the language of the relevant provisions and the scope and purpose of the statute”. [25]
[113] In Futuris, the relevant provisions of the statute included the express provisions for review or appeal which were not subject to conclusive evidence provisions. In the present case, the comparator provisions are the right of appeal or review conferred by s 69 of the TAA read together with s 132(1)(b)(i). In a review or appeal under those provisions, the amount and particulars of the assessment may be challenged, because a copy of the assessment notice signed by the Commissioner is only “evidence” of the amount and the particulars, not “conclusive evidence” of those maters, as is provided in s 132(1)(b)(ii) for “another proceeding”.
[114] The critical point which emerges from Futuris is that s 175 was construed to apply to a particular proceeding for a constitutional writ (and a claim for a declaration on the same grounds) based on the alleged invalidity of an income tax assessment. By analogy, s 132(2) might be construed to apply to some proceedings in the supervisory jurisdiction of this Court for an order in the nature of certiorari or declaratory relief based on the same or similar grounds.
[115] Following that path of reasoning in relation to s 175 of the ITAA, the majority in Futuris held:
“…Where s 175 applies, errors in the process of assessment do not go to jurisdiction and so do not attract the remedy of a constitutional writ under s 75(v) of the Constitution or under s 39B of the Judiciary Act.
But what are the limits beyond which s 175 does not reach? The section operates only where there has been what answers the statutory description of an ‘assessment’. Reference is made later in these reasons to so-called tentative or provisional assessments which for that reason do not answer the statutory description in s 175 and which may attract a remedy for jurisdictional error. Further, conscious maladministration of the assessment process may be said also not to produce an ‘assessment’ to which s 175 applies.”[26] (emphasis added)
[116] In that passage, the High Court decides that an error in making an assessment is not a jurisdictional error unless it lies outside the limits that s 175 reaches. By analogy, the Commissioner’s failure to comply with s 21 does not amount to jurisdictional error unless that failure lies outside the reach of s 132(2).
[117] In Futuris, the High Court referred to cases where an “assessment” does not meet the statutory description because it is made tentatively, meaning not finally, or where the Commissioner acts in deliberate bad faith, as examples of cases falling outside the reach of s 175. Neither of those examples applies here. The Commissioner submitted that they were the only identifiable cases outside the operation of s 132(2).
[118] The plaintiff submitted that s 132(2), by using the word “merely”, only operates to protect non-compliance with provisions that are “ancillary” to the process of assessment. In my view, that is not the correct construction of s 132(2). First, there is no part of the text of s 132(2) which supports drawing a distinction between non-compliance with an “ancillary” provision and some other non-ancillary provision. Second, a distinction of that kind begs the question as to what provisions are ancillary? It is no real answer to say that s 21 of the DA is not one. Third, s 132(2) must be read with s 132(1)(b)(ii). If invalidity which takes a case outside the reach of s 132(2) is as narrow as may be suggested by the examples given in Futuris, it seems unlikely that a construction of s 132(2) which depends on an implied distinction between “ancillary” and other provisions will operate harmoniously with that. On the other hand, the greater the reach of s 132(2), the wider will be the operation of the conclusive evidence provision in s 132(1)(b)(ii).
[119] The plaintiff further submitted that s 132(2) does not apply to an assessment that involves an error of law amounting to jurisdictional error, which on its face is a circular submission. However, if it means that an error of law that would otherwise amount to a jurisdictional error cannot be affected by s 132(2), I do not agree. First, there is no part of the text of the subsection which supports the view that the non-compliances to which it is directed are confined to errors of law otherwise within jurisdiction. Second, that operation of s 132(2) would be inconsistent with the view that the effect of s 132(2) is to restrict what otherwise might be jurisdictional error and would deprive it of effect. In my view, Futuris stands as authority for that view.
[120] In the end, the plaintiff rested on the submission that error in the statutorily prescribed steps forming part of the process of making a default assessment, including compliance with s 21, results in something that cannot be described as an “assessment” and therefore can not be upheld by s 132(2). In my view, that too is not the correct construction of s 132(2). Section 132(2) expressly provides that “mere” non-compliance with a tax law does not affect the validity of an assessment. Consistently with that text, it is difficult to accept that all non-compliances in the steps forming part of the process of making a default assessment lead to the opposite result.
[121] The precise question is whether the making of an assessment in contravention of the requirement in s 21 that the Commissioner must choose the dutiable transaction on which transfer duty is imposed results in the assessment being invalid for jurisdictional error because that contravention is outside the reach of s 132(2).
[122] Returning to Futuris, I accept that the joint judgment recognises that a non-compliance which results in an outcome not answering the statutory description of an “assessment” may include cases other than tentative or provisional assessments and conscious maladministration. Second, I accept that compliance with s 21 is important. The purpose of s 21 is to avoid double duty being payable on the relevant dutiable transactions.
[123] Nevertheless, it does not seem to me that the conclusion should be reached that non-compliance with s 21 results in something that is not an assessment. A taxpayer who is given an assessment notice for a default assessment has the right to lodge a notice of objection against the default assessment under ss 63 and 64 of the TAA and to appeal or apply for review of the decision relating to the objection provided for under s 69 of the TAA. An error in the assessment process made under s 21 of the DA is capable of being remedied in such a process or proceeding. The intention of s 132(2) is to restrict those cases in which non-compliance with a provision of the DA might wholly invalidate the assessment as an exercise of statutory power. Where a right of appeal or review is granted from the result of the decision making process upon the making of the assessment, there is no reason why the reach of s 132(2), properly construed, should be seen as not extending to all errors made in the application of a steps provided for by the process of making the assessment.
[124] In my view, an error made in failing to apply s 21 of the DA in the process of making a default assessment is not one that lies outside the reach of s 132(2). It follows that the plaintiff’s second ground of invalidity does not amount to jurisdictional error, having regard to s 132(2).
Kable
[125] Finally, if non-compliance with s 21 does not invalidate the default assessment, the plaintiff submits that ss 132(2) and 132(1)(b)(ii) are invalidated by the principle derived from Kable v Director of Public Prosecutions (NSW).[27]
[126] This contention was not raised in Futuris. The Kable principle was recently summarised in Attorney-General (NT) v Emmerson,[28] as follows:
“The principle for which Kable stands is that because the Constitution establishes an integrated court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts, State legislation which purports to confer upon such a court a power or function which substantially impairs the court’s institutional integrity, and which is therefore incompatible with that court’s role as a repository of federal jurisdiction, is constitutionally invalid.” (footnotes omitted)
[127] The plaintiff submitted that by requiring the Court to dismiss any attempt to challenge an assessment without first paying it, the legislature has made the tax incontestable. In my view, that submission does not engage the Kable principle at all and need not be further considered.
[128] The plaintiff further submitted that the “principle” that a tax must not be incontestable should now be seen as one aspect of the principle in Kable. There is a well recognised line of cases that a “tax” within the meaning of the power to make laws with respect to taxation under s 51 of the Constitution must not be incontestable.[29] But, in my view, there is no apparent warrant for seeing that principle as one aspect of the principle in Kable. The plaintiff submitted that the preservation of validity provided for in s 132(2) of the TAA coupled with the provision in s 69(1)(b) which restrict the right to appeal or review a decision on a taxpayer’s objection to a taxpayer who has paid the whole of the amount of the tax and late payment interest payable under the assessment to which the decision relates, makes the amounts assessed an incontestable tax.
[129] However, the present case does not tender as an issue for decision whether the transfer duty, penalty duty or unpaid tax interest are recoverable as a debt in a recovery proceeding. Nor does it raise a question about the validity or invalidity of s 69(1)(b) which restricts the application of s 69 to a taxpayer who has paid those amounts. The question in this case is whether non-compliance with s 21 of the DA is an invalidating jurisdictional error, in the face of s 132(2) of the TAA. In my view, submissions about incontestable taxes or the possible operation of the Kable principle in the context of recovery proceedings which might be brought on an assessment do not inform the answer to that question.
[130] It is unnecessary to consider the Kable principle further.
Conclusion
[131] It follows that none of the four grounds advanced by the plaintiff results in a finding that the default assessment is invalid in law in such a way as to be reviewable by a declaration that the plaintiff is not indebted for duty, penalty or interest.
[132] The proceeding should be dismissed.
[133] I will hear the parties on costs.
Footnotes
[1] (2010) 239 CLR 531.
[2] (1996) 189 CLR 51.
[3] Breskvar v Wall (1971) 126 CLR 376, 385.
[4] LTA, ss 173 and 174.
[5] LTA, s 62(1).
[6] (2014) 88 ALJR 514.
[7] (2014) 88 ALJR 514, 518 [22].
[8] (2009) 239 CLR 27.
[9] (2009) 239 CLR 27, 46-7 [47].
[10] (2014) 88 ALJR 473.
[11] (2014) 88 ALJR 473, 483 [39].
[12] (1981) 147 CLR 297.
[13] (1987) 147 CLR 297, 305.
[14] Land Tax Act 1915 (Qld), s 3B(3)(a) and (b).
[15] Land Tax Act 1915 (Qld), s 3 definition.
[16] Land Tax Act 1915 (Qld), s 11EA(2).
[17] (2008) 237 CLR 146.
[18] TAA, s 13(2).
[19] TAA, s 27.
[20] (2010) 239 CLR 531, 574 [72].
[21] See, however, Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] QCA 525, [56].
[22] (1991-1992) 175 CLR 564, 581.
[23] (2001) 2 Qd R 610, 618-619 [23]-[25].
[24] (1997) 42 NSWLR 351, 387.
[25] (2008) 237 CLR 146, 156 [23].
[26] (2008) 237 CLR 146, 157 [24]-[25].
[27] (1996) 189 CLR 51.
[28] (2014) 88 ALJR 522, 533 [40].
[29] Glennan v Commissioner of Taxation (2003) 77 ALJR 1195, 1198 [15].