SIGNIFICANT LEGAL CASES

The vast majority of the decisions we make each year are undisputed by our customers, but there are inevitably situations where litigation is required to determine a resolution.

Duties Act 2000

Motor car duty

Mercedes-Benz Australia/Pacific Pty Ltd v Commissioner of State Revenue [2016] VSCA 194

This was an appeal from a Judicial member of the Tribunal who had decided the matter in favour of the Commissioner. The issue before the Tribunal was whether Mercedes-Benz’ primary purpose in registering two vehicles was for an exempt use as demonstrator vehicles or alternatively trading stock vehicles. 

On 11 August 2016, the Court of Appeal dismissed the taxpayer’s appeal and upheld VCAT’s decision that the two vehicles were registered with the primary purpose of use as alternative transport for customers who were having their own cars serviced.

Nature of partnership interests

Danvest Pty Ltd & anor v Commissioner of State Revenue [2017] VSC 125

The issue that arose for determination was whether the respective acquisitions of 30 per cent and 50 per cent interest by Danvest Pty Ltd as trustee for the Gold Age Trust and Bullhusq Pty Ltd, in a Partnership, constituted a ‘transfer of dutiable property’ within the meaning of s.7(1)(a) of the Duties Act 2000.

On 31 March 2017, the Supreme Court found against the Commissioner. Croft J held that the interest acquired conferred no equitable proprietary interest in the partnership assets and hence no interest in an estate in fee simple.

Land Tax Act 2005

Primary production land

CDPV Pty Ltd & Ors V Commissioner of State Revenue [2017] VSCA 89

The taxpayers objected to the land tax assessments on the basis that the land was exempt under s.66 of the Land Tax Act 2005 as it was used for primary production pursuant to an oral share-farming agreement with a local farmer.

The Supreme Court dismissed the taxpayers' appeal and confirmed the Commissioner's assessments. The taxpayers' subsequently sought leave to appeal to the Court of Appeal.

On 27 April 2017, the Court of Appeal agreed with the Commissioner and held that the question of 'purpose' in the definition of primary production directs attention to both the activities constituting the use and to the purpose of the person engaged in that use. All surrounding circumstances must be taken into account and those circumstances may include the subjective intention of the person engaged in the use of the land.

Payroll Tax Act 2007

Sole/whole or dominant purpose a charitable purpose

Victorian Farmers Federation v Commissioner of State Revenue (Review and Regulation) [2017] VCAT 19

The Victorian Farmers Federation (VFF) had requested an exemption from payroll tax under s.48(1) of the Act on the basis that the wages were paid or payable by the VFF as a non-profit organisation having as its whole or dominant purpose a charitable purpose.

By order dated 9 January 2017, the Tribunal confirmed the Commissioner's determination and concluded that VFF is not a charity within the meaning of s.48 of the Act.

Telecommunications Industry Ombudsman Ltd v Commissioner of State Revenue [2017] VSC 286

The Telecommunications Industry Ombudsman (TIO) is a company limited by guarantee established for the operation of the TIO Scheme as provided for by the Telecommunications (Consumer Protection and Service Standards) Act 1999.

TIO requested an exemption from payroll tax under s.48(1) of the Act on the basis that the wages were paid or payable by the TIO as a non-profit organisation having as its whole or dominant purpose a charitable purpose and applied for a refund.

The Commissioner denied the exemption and stated that to the extent that it affects the period post 1 July 2012, the TIO may object to the payroll tax decision. TIO objected to the decision. The Commissioner disallowed the objection, and TIO requested that the matter be treated as an appeal to the Supreme Court. 

On 1 June 2017, the Supreme Court handed down judgment in favour of the TIO, granting the TIO the exemption.

Land Tax Act 1958

Land tax amendments

Commissioner of State Revenue v ACN 005 057 349 Pty Ltd [2017] HCA 6

On 8 February 2017, the High Court delivered judgement in favour of the Commissioner, holding that he was correct to refuse to amend the 1990-2002 land tax assessments because the consequential relief sought by the taxpayer, namely a refund of land tax, was not available to it as the statutory three year period to make an application for refund had long passed. 

That refusal did not amount to conscious maladministration.

Further, the Act specifically prevents restitutionary proceedings of this kind being brought outside of the statutory regime, any other finding would render the objection and refund regimes, including s.90AA, otiose.

Congestion Levy Act 2005

Leviable parking spaces

Secure Parking Pty Ltd v Commissioner of State Revenue [2017] VSCA 68

This was an appeal by the taxpayer to the Court of Appeal, against an earlier judgment of the Trial Division of the Supreme Court in favour of the Commissioner.

The first two grounds dealt with the question of whether the parking spaces blocked off for the whole or part of 2013 'existed' as 'leviable parking spaces' for the purposes of ss.13(3) and s.26 of the Act.

On 30 March 2017, the Court of Appeal delivered judgment in favour of the Commissioner.

The Court found that the parking spaces were relevantly 'set aside' primarily due to the fact that they were parking spaces in purpose built commercial car parks which had no purpose other than the provision of facilities for the parking of motor vehicles in the conduct of commercial business.