Grain Growers Limited v Chief Commissioner of State Revenue (No 2) [2015] NSWSC 1445

Date of judgement 30 September 2015 Proceeding No. 2014/305291
Judge(s) Black J
Court or Tribunal New South Wales Supreme Court
Legislation cited Civil Procedure Act 2005 s 98

Payroll Tax Act 2007 ss 48, 48(1), 48(2)

Uniform Civil Procedure Rules 2005 r 42.1
Catchwords PROCEDURE – where parties had mixed success – whether costs should follow the event – whether to award costs in accordance with the parties’ success of clearly separable and dominant issues
Cases cited Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue (No 2) [2014] NSWCA 128

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219

Grain Growers Ltd v Chief Commissioner of State Revenue [2015] NSWSC 925

Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748

Milne v Attorney-General (Tasmania) [1956] HCA 48; (1956) 95 CLR 460

Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 1509

Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229

Short v Crawley (No 40) [2008] NSWSC 1302

The Owners – Strata Plan 61162 v Lipman [2014] NSWSC 622


In the principal judgment, his Honour held that Grain Growers Limited (“Grain Growers”) had established that its purpose had a charitable character under s. 48(1) of the PTA. However, Grain Growers did not satisfy s.48(2) of the PTA for the 2012 to 2013 tax years with regard to employees working in successor functions to BRI and Agrecon, the businesses of two entities acquired by Grain Growers. Therefore, no payroll tax exemption was available for wages paid to Grain Growers’ employees engaged in such activities for those years.  No question arose as to s.48(2) with respect to the 2009 to 2011 tax years.

On 1 September 2015, his Honour made orders by consent to give effect to his judgment.  The orders required the Chief Commissioner to refund in full payroll tax paid by Grain Growers for the tax years 2009 to 2011, and to refund lesser amounts for the years 2012 and 2013.

Grain Growers sought an order for costs against the Chief Commissioner on an ordinary basis.  The Chief Commissioner contended that each party should pay its own costs.

The Statutory Framework

The Court has broad powers to make orders as to costs pursuant to section 98 of the Civil Procedure Act 2005 (NSW). Further, rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides:

Subject to this Part, if the Court makes any order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs.


Grain Growers relied on an offer of compromise it made on 2 April 2015. His Honour held that the offer of compromise did not advance Grain Growers’ position as it offered to settle on a basis less favourable to the Chief Commissioner than the result achieved on judgment. [1]

Grain Growers submitted that the parties did not have an opportunity to be heard or lead evidence as to the construction of s.48(2) or the “comparable activity test” adopted in the judgment.  His Honour did not agree that his findings at paragraph 90 of the judgment could be characterised as a “comparable activity test” or a test to be generally applied. [2] Additionally, his Honour stated it was not clear how the asserted lack of opportunity would affect the question of costs between the parties. [3] Notwithstanding those comments, his Honour addressed this submission by referring to the transcript and noting that he did highlight to the plaintiff at the hearing both the issue to be addressed, and the possibility that it might be addressed by an objective approach. [4]

Grain Growers submitted that the “test” said to arise from paragraph 90 of the judgment is inconsistent with the Chief Commissioner’s position as expressed in a published FactSheet.  Further, it submitted that the FactSheet put forward a different construction of s.48(2) to the position adopted by the Chief Commissioner at hearing.  His Honour found that these submissions were irrelevant to the question of costs, particularly when the FactSheet was not in evidence and was not relied upon at the hearing.

As to what the appropriate costs orders should be in circumstances where there is a “mixed result”, meaning Grain Growers  was not entirely successful in the proceedings, his Honour referred to a number of authorities, including that of the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No.2) [2009] NSWCA 304 at [38]. His Honour quoted from the Court of Appeal’s judgment in Bostik, part of which is as follows:

“...Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed...” [5]

Black J concluded that Grain Growers may be properly characterised as the “successful party” in the proceedings; and the issues as to s.48(2) on which Grain Growers was not successful did not take up a significant part of the trial, nor could those issues properly be characterised as clearly dominant or separable, so as to warrant a departure from the usual principle that costs follow the event. [6]


The Chief Commissioner pay Grain Growers’ costs of the proceedings as agreed or assessed.

Link to decision

Grain Growers Limited v Chief Commissioner of State Revenue (No 2) [2015] NSWSC 1445


  1. ^ Grain Growers Limited v Chief Commissioner of State Revenue (No 2) [2015] NSWSC 1445 [8]
  2. ^ Ibid [12]
  3. ^ Ibid [13]-[14]
  4. ^ Ibid [15]
  5. ^ Ibid [22]-[24]
  6. ^ Ibid [25]
Last updated: 16 May 2016