|Date of judgement||16 November 2020|
|Judge(s)||N S Isenberg RFD, Senior Member|
|Court or Tribunal||New South Wales Civil and Administrative Tribunal|
Surcharge land tax – onus - foreign person – ordinarily resident in Australia - actually been in Australia.
B & L Linings Pty Ltd v Chief Commissioner of State Revenue  NSWCA 187, (2008) 74 NSWLR 481
Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD)  NSWADTAP 25
Chief Commissioner of State Revenue v Paspaley  NSWCA 184
Gao v Chief Commissioner of State Revenue  NSWCATAD 216
O'Sullivan v Farrer  HCA 61; (1989) 168 CLR 210
Mr Barsoum was not an Australian citizen on the taxing date for the 2017 land tax year, but he claimed that he was not a “foreign person” for the purposes of surcharge land tax, and was therefore not liable for surcharge land tax on his residential property for the 2017 land tax year.
Under the LT Act, “foreign person” has the same meaning as in Section 104J(1) in Ch 2A of the Duties Act 1997 (NSW) which states:
“foreign person means a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (“FAT Act”) of the Commonwealth, as modified by this section”
Section 4 of the FAT Act provides:
“foreign person means
Section 5(1) of the FAT Act further provides:
It was submitted by Mr Barsoum that the wording of s 5(1) of the FAT Actdid not require that an individual had to be physically present in Australia. Rather, he submitted the section merely required that “the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding” the relevant taxing date, namely midnight on 31 December immediately preceding the particular land tax year.
In relying on his own business records for 2016 which he described as being “very accurate”, Mr Barsoum further submitted that he met the 200 days requirements of s 5(1)(a) of the FAT Act. The business records for 2016 purported to show the number of days Mr Barsoum was absent from Australia on various occasions totalling 161 days. Mr Barsoum claimed to be present for some or all of each of the remaining 205 days in 2016.
The Chief Commissioner, relying on Mr Barsoum’s business records for 2016 as well as International Movement Records of Mr Barsoum from 1 January 2016 to 31 December 2016, submitted that a calculation of the days Mr Barsoum was absent using either set of records shows that he was not present in Australia for the required 200 days. The Chief Commissioner contended that there were errors in the recorded absences, including omission of a month from the calculation of the 161 days he claimed to be outside Australia, based on International Movement Records. Mr Barsoum submitted that the International Movement Records were inaccurate, based on a copy of an aeroplane boarding pass in his name which showed the imprint of “Migration Australia” and “DEPARTED AUSTRALIA” for a flight from the Gold Coast to Sydney.
Further submissions were made by Mr Barsoum to the effect that the Chief Commissioner has wide-ranging discretion to decide matters on their merit. In particular, Mr Barsoum referenced exceptional work-related circumstances, financial hardship and the corona economic crisis as reasons as to why the Chief Commissioner should exercise discretion not to assess him for surcharge land tax.
It was also submitted by Mr Barsoum that his presence in Australia for 173 days in 2016 is substantial compliance with the 200 day requirement. He further submitted that he disputes the missing 27 days and the accuracy of the information relied upon by the Chief Commissioner.
Finally, Mr Barsoum submitted that he was present in Australia as he was “in constant and continuous contact with his business to do his work remotely”.
The Tribunal rejected Mr Barsoum’s submission regarding his reading of the requirements of s 5(1) of the LT Act. The Tribunal referred to the recent decision in Gao v Chief Commissioner of State Revenue  NSWCATAD 216. The Tribunal agreed with the finding of Frost SM in that case, that the expression “actually been in Australia” means, in its statutory context, “physically been in Australia”.
The Tribunal found in accordance with the International Movement Records that Mr Barsoum was absent from Australia from 10 November 2016 to 31 December 2016 inclusive. There was no evidence to the effect that Mr Barsoum had returned to Australia after 10 November 2016 and before 1 January 2017.
With regard to the Chief Commissioner’s calculations and the lack of evidence that after his departure from Australia on 9 or 10 November 2016, Mr Barsoum did not return to Australia before 31 December, the Tribunal was not satisfied that Mr Barsoum had “actually been in Australia during 200 or more days in the period of 12 months immediately preceding” midnight on 31 December 2016
The Tribunal also rejected Mr Barsoum’s submissions that the Chief Commissioner had a broad discretion, or that substantial compliance was sufficient, or that his contact with Australia was relevant, on the basis that Mr Barsoum failed to provide any authority or evidence to support such submissions.