|Date of judgement||26 March 2015|
|Judge(s)||P Wass, Senior Member|
|Court or Tribunal||NSW Civil and Administrative Tribunal|
Civil and Administrative Tribunal (NSW) – low cost housing – tariff – land tax exemption - application for extension of time – exercise of discretion – application refused
The Taxpayers, Mr Robert Daoud and Mr Elias Daoud, sought review of the Chief Commissioner’s land tax assessment requiring them to pay land tax in respect of a property at Enmore (“the Property”) for the 2011, 2012 and 2013 land tax years. The Taxpayers argued that the Property was an exempt low cost boarding house because the tariff did not exceed the maximum tariff specified in Revenue Ruling LT 091 after excluding a separate charge for the use of utilities.
The Taxpayers’ application was 10 months out of time. The Tribunal declined to grant an extension of time to lodge an application under s.41 of the Civil and Administrative Tribunal Act 2013 because the Taxpayers had not provided a satisfactory explanation for the delay, it would be difficult to argue that “tariff” should be construed to allow for separate costs and charges, and declining to grant leave would not work an injustice in this case.
On 20 May 2013, the Taxpayers filed an application for exemption from land tax for the 2011, 2012 and 2013 land tax years, on the basis that the Property was used to provide low cost accommodation in accordance with s. 10Q of the Land Tax Management Act 1956 (“LTM Act”).
On 12 June 2013, the Chief Commissioner declined the application for exemption on the basis that tariff limits applying for the provision of a single room providing less than full board and lodgings for the 2013 tax year.
A land tax assessment for the 2013 land tax year was subsequently issued to the Taxpayers, who objected, asserting that the Chief Commissioner had erred by including the utilities cost in the calculation of the tariff charged by the Taxpayer.
On 15 November 2013, the Chief Commissioner disallowed the Taxpayers’ objection for the 2013 land tax year on the basis that the Taxpayers charged a tariff of more than $221 per week for each room. This was the maximum tariff that may be charged for the purposes of the low cost boarding house exemption under the Guidelines which are approved by the Treasurer under s.10Q of the LTM Act and published in Revenue Ruling LT 091. The Chief Commissioner did not consider the purported objection to the 2011 and 2012 land tax assessments as the objections were lodged outside of the 60 day period allowed and no explanation was provided for the late lodgement.
On 9 October 2014, the Taxpayers sought review by the Tribunal of the Chief Commissioner’s decisions with respect to the 2011, 2012 and 2013 land tax years. In particular, the Taxpayers sought to challenge the Chief Commissioner’s inclusion of “utilities” in the prescribed maximum “tariff”.
The Taxpayers sought an extension of time from the Tribunal to file their application for review pursuant to s.41 of the Civil and Administrative Tribunal Act 2013 (“the Act”), it being over 10 months out of time in respect of the 2013 assessment. The Respondent neither consented to, nor opposed, leave being granted to extend time.
The Tribunal has a broad and unfettered discretion under s.41 of the Act to extend the period of time for the doing of anything under the legislation. However, the Tribunal noted that s. 41 must be read having regard to s.36 of the Act and the need to “facilitate the just, quick and cheap resolution of the real issue in the proceedings” [at 14]. Further, the discretion must be used for the purpose of doing “justice between the parties” [at 19]. That is, regard must be had to whether the refusal to exercise the discretion will work an injustice, having regard to a number of matters, including the conduct of the parties, the nature of the litigation and the history of the proceedings.
The Taxpayers assertion was that, between December 2013 and September 2014, they had left the progress of their case in the hands of their lawyer and accountant and they had made enquiries with those persons as to the application’s status. No evidence as to the types of enquiries that were made, nor the responses that were received, was led by the Taxpayers. Further, there was no explanation from the Taxpayers’ solicitor and the explanation provided by their accountant was “sparse”. Accordingly, and noting that the Taxpayers were represented at all times, the Tribunal found that the Taxpayers had not provided an adequate explanation of the delay in lodging the application . The absence of a proper explanation was found to weigh heavily against leave being granted to extend time for the lodging of the application .
The Tribunal also considered the prospects of success on the application if an extension of time were to be granted. The Tribunal expressed the view that it would be “difficult” to argue that “tariff” should be construed to allow for separate costs or charges, such as utility payments, given Revenue Ruling No Lt091 and s. 10Q of the LTM Act are directed to low cost accommodation.
In the absence of an adequate explanation, the Tribunal found that, having regard to the other factors weighing against an extension of time, the Taxpayers would need to satisfy the Tribunal that their case had more “substantial merit” than being merely “fairly arguable”, and the Taxpayers had failed to do so. The Tribunal decided that refusal to grant leave to extend time for the filing of the review application would not work an injustice , and for these reasons declined to do so .
The application for an extension of time in which to apply for administrative review of the Chief Commissioner’s assessments for the years 2011, 2012 and 2013 was refused.