WB Rural Pty Limited v Commissioner of State Revenue

In this very interesting recent decision, the applicant challenged the constitutionality of s 69 of the Tax Administration Act 2001 which provides a taxpayer a right of appeal to the Supreme Court (or QCAT) from an objection decision by the Commissioner, but only if the taxpayer first pays the amount of tax and late payment interest payable. The applicant’s argument depended upon a preliminary finding that when the State Parliament conferred jurisdiction on the Commissioner to issue an assessment, or reassessment, or to determine an objection, it conferred judicial power on the Commissioner. Justice Bond ultimately dispensed of the application by finding that Parliament did not confer judicial power upon the Commissioner and therefore the constitutional challenge failed.

Bond J

30 June 2017

The applicant was the trustee for the Whitsunday Trust, and in that capacity owned land in the Whitsunday region. [1]. Prior to 2014, the Trustee had received deductions in respect of, and later exemptions from, land tax on the basis that the land in question was used for solely for primary production. [1].

In 2014, the Commissioner determined that the Trustee was not entitled to the primary production deduction/exemption and issued reassessment notices for the financial years ended 30 June 2010 to and including 30 June 2014 (the “assessment decisions”). [3]. The Trustee lodged an objection to the assessment decisions. [5]. In 2015, a delegate of the Commissioner made a decision disallowing the objection and confirming the assessment decisions (the “objection decision”). [5].

Section 69 of the Taxation Administration Act 2001 provides a right of appeal to the Supreme Court (or QCAT) from an objection decision if the taxpayer is dissatisfied with the Commissioner’s decision. [6]. However, s 69(1)(b) makes that right conditional upon the taxpayer first paying the amount of tax and late payment interest payable under the assessment to which the decision relates. [6].

The Trustee sought a declaration that s 69(1)(b) was “beyond the legislative competence of the Queensland Parliament insofar as it purported to preclude the Supreme Court from reviewing the objection decision unless the Trustee first paid to the Commissioner the amounts the subject of the assessments”. [7]. The Trustee also filed a purported appeal against the objection decision pursuant to s 69 of the Administration Act, but without paying the amounts required by s 69(1)(b). [8]. Alternatively, the Trustee sought a declaration that the objection decision was void for jurisdictional error, on the basis that the decision was unreasonable in the sense described in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332. [9].

The Trustee’s constitutional argument depended on three propositions:

1. State Parliaments cannot confer judicial power without also conferring a proportionately regulated right of appeal to the State Supreme Court;
2. when the Queensland Parliament conferred jurisdiction on the Commissioner to issue an assessment (or reassessment) or to determine an objection, it conferred judicial power on the Commissioner; and
3. the Queensland Parliament had not conferred a proportionately regulated right of appeal, because of the burden imposed by s 69(1)(b) of the Tax Administration Act. [11].

Bond J considered it was necessary first to address whether the relevant provisions of the Tax Administration Act conferred judicial power on the Commissioner. [15]. If they did not, then it would be “unnecessary (and therefore inappropriate) to consider the correctness or application of the constitutional principle for which the Trustee contended”. [15].

His Honour ultimately was of the view that the power to make an assessment decision was not judicial power. His Honour rejected an argument that the decision of the Commissioner was a decision about whether an existing right or duty actually exists (i.e. judicial power). [37]-[39]. Other factors which supported this conclusion included the fact that (i) the Commissioner’s assessment within jurisdiction is binding and authoritative but is not final, because it may be altered by an objection decision or by the Court or QCAT, and (ii) the Commissioner is not given the power to make a decision enforceable by execution. [40]. His Honour also took the same view with respect to an objection decision, regarding it as “merely an internal review of the original decision, but not different in character to the original decision”. [43].

As there was no conferral of judicial power on the Commissioner, it was unnecessary to consider the constitutional principle for which the Trustee contended. [45]. His Honour therefore dismissed the Trustee’s application for a declaration. [45].

His Honour also rejected the Trustee’s application for relief on the basis of jurisdictional error. [46]-[73]. The Commissioner’s decision was carefully reasoned and the view that the delegate came to did not lack an evident and intelligible justification. [72].

J English