WESTPAC BANKING CORPORATION v COMMISSIONER OF STAMP DUTIES (QLD)

Judges:
Ryan J

Court:
Supreme Court of Queensland

Judgment date: Judgment handed down 15 January 1993

Ryan J

The applicant made an application filed on 12 October 1992 to review the decision of the respondent Commissioner of Stamp Duties on 18 September 1992 that s. 54A of the Stamp Act 1894 required the applicant to furnish a duly completed Form S(a) in respect of the acquisition by the applicant of certain assets of Chase AMP Bank Ltd on or about 4 July 1992, and that upon the furnishing of a duly completed Form S(a) the respondent would charge it with duty under the Stamp Act as if it were a conveyance or transfer of the property to which it related for a consideration equal to the full unencumbered value of such property, and that upon the applicant failing to furnish a duly completed Form S(a) in respect of the acquisition the respondent would assess duty which in his opinion ought to be charged in respect of the acquisition (the ``Decision''). Alternatively, it applied to review the conduct of the respondent on 18 September 1992 requiring the applicant to furnish a duly completed Form S(a) in respect of the acquisition for the purpose of making a decision under the Stamp Act (the proposed decision), namely, in the event that the applicant furnishes a duly completed Form S(a), to charge the Form S(a) with duty under the Stamp Act as if it were a conveyance or transfer of the property to which it related for a consideration equal to the full unencumbered value of such property and, in the event that the applicant does not furnish a duly completed Form S(a), to assess duty which in his opinion ought to be charged in respect of the acquisition (the ``Conduct'').

It is claimed that the applicant is aggrieved by the Decision and the Conduct because:

Section 54A(2) of the Stamp Act provides that every person who acquires or agrees to acquire a business that exists in Queensland shall, within one month after he does so, deliver to the Commissioner a statement in duplicate in the prescribed form verified in the prescribed manner and showing the prescribed information. Section 54A(5) provides that a statement under subs. (2) shall be charged with duty under the Act as if it were a conveyance or transfer of the property to which the statement relates for a consideration equal to the full unencumbered value of such property and the person delivering that statement shall be liable accordingly. Section 22A(1) provides that

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where a person fails to deliver or lodge, as and when he is required to do so by or under the Act, a statement, return or other document on which duty is chargeable under the Act, the Commissioner may assess the duty which in his opinion ought to be charged on the statement, return or other document that has not been delivered to or lodged with him, as if it had been delivered to or lodged with him. An assessment made under subsection (1) is deemed to be an assessment in respect of an instrument and shall be subject to objection or appeal, as provided by the Act, by a person dissatisfied with that assessment: S. 22A(4).

The application states as the grounds of the application for a statutory order of review:

The grounds of the application for review are error of law and jurisdictional error, in that the assets acquired by the applicant from Chase AMP on or about 4 July 1991 did not amount to the acquisition by the applicant of a business that existed in Queensland or an agreement by the applicant to acquire a business that existed in Queensland within the meaning of s. 54A of the Stamp Act or alternatively that there was no or insufficient evidence or other material to justify the making of a decision to that effect.

The applicant made a further application filed on 2 November 1992 to review the decision of the respondent, on or about 16 October 1992, to assess under s. 22A of the Stamp Act 1894 the duty which in his opinion ought to be charged on a statement which ought to have been delivered under s. 54A of the Act as if it had been delivered by the applicant in respect of the acquisition by the applicant of certain assets of Chase AMP Bank Ltd on or about 4 July 1992, or in the alternative, to review the decision of such assessment.

The applicant claims to be aggrieved by the decision because:

The grounds of the application are:

A third application filed on 13 November 1992 is made by the applicant to review the decision of the respondent on or about 16 October 1992 to assess under s. 22 of the Stamp Act the duty which in his opinion is chargeable on the Offer and Fully Funded Participation Agreement dated 4 July 1991 (the ``Agreement'') or in the alternative to review the decision to issue the assessment (the ``First Decision''). Application is also made to review the decision of the respondent, on or about 16 October 1992, to assess under s. 22 of the Act the duty which in his opinion is chargeable on the offer, acceptance and assignment dated 27 September 1991, or in the alternative to review the decision to issue the assessment (the ``Second Decision'').

The applicant claims that it is aggrieved by these decisions because it is the person by which such assessments are payable, and the respondent was not entitled to assess duty pursuant to s. 22 on either the agreement or the offer. The grounds of the application for a statutory order of review in respect of each decision is that:

The grounds of the application for review are that each of the decisions was ultra vires and the subject of errors of law and jurisdictional error in that the agreement and the offer are not chargeable with any duty under the Act or alternatively that there was no or insufficient evidence or other material to justify the making of the decisions.

In each case, the respondent has moved for orders that the applications be dismissed or alternatively stayed.

It appears from this rather extensive reference to the three applications that the applicant is seeking, in the first and third applications, statutory orders of review pursuant to ss. 20 and 21 of the Judicial Review Act of 1991 and also is making application for review pursuant to s. 43 of the Act. In the case of the second application, it is applying for a statutory order of review. The respondent is seeking to dismiss or stay the application.

From affidavits filed in the proceedings, it appears that on 26 April 1991 a Confidential Purchase Memorandum was prepared by Australian Mutual Provident Society (AMP) and Chase Manhattan Holdings (Australia) Ltd. (Chase). The memorandum states that AMP and Chase are joint owners of Chase Bank (Chase AMP) and that the memorandum has been provided solely for informational purposes to assist interested parties in making their own evaluation of Chase AMP.

On 5 June 1991, Westpac Banking Corporation sent to the Australian Stock Exchange for immediate release to the market a statement that AMP and Westpac had agreed in principle to establish a long term strategic alliance. It stated the main elements of the overall arrangement which included the purchase by Westpac of the consumer bank assets and liabilities of Chase AMP.

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On 13 June 1991, a document entitled Heads of Agreement was made between Chase AMP and Westpac. It records that on 28 June 1991 Westpac would assume responsibility for all Chase AMP's consumer credit transactions. It records the purpose of the transaction as being to cause Westpac to become banker to the customers involved in the consumer credit transactions and the deposits of Chase AMP's retail consumer business.

On 4 July 1991, Chase AMP made an offer to Westpac to enter into an agreement referred to as a ``Fully Funded Participation Agreement in Queensland''.

This offer was accepted orally on behalf of Westpac. It sets out the terms and conditions on which Chase AMP agrees to grant a fully funded participation to the participant (Westpac) in the ``participated facilities'' defined as the loans and the financial arrangements underlying the loans. The ``loans'' mean the loans and the receivables located in Queensland owed by customers of the Consumer Banking Group (that is, the retail banking operations of Chase AMP known by that name) in the books of Chase AMP as at the date of the agreement. Westpac agrees to pay to Chase AMP on 5 July 1991 an amount equal to Westpac's percentage of the face value (namely 100 per cent) of the loans as at midnight on 30 June 1991, and as from that time Westpac will fund all commitments and obligations under the participated facilities to provide further loans or credits.

On the same day, an agreement was made between Chase AMP and Westpac setting out the terms on which Chase AMP would provide services as agent on behalf of Westpac if after the execution of the agreement Chase AMP Bank Ltd. sold to Westpac loans to which it was entitled in connection with its retail banking business and Westpac assumed responsibility for credit commitments made by Chase AMP in connection with its retail banking business and for deposits received by Chase AMP in connection with its consumer retail banking business.

In an explanatory memorandum to proprietors by Westpac relating to the strategic alliance with AMP, it is stated that it is the major part of the consumer banking business of Chase AMP that is the subject of this element of the alliance. Under the terms of the agreements entered into between Chase AMP and Westpac, Westpac assumed all financial liabilities and benefits of Chase AMP as a result of the assignment to Westpac of retail deposit liabilities with a face value of $531 million, together with consumer banking division loans having a face value of approximately $1,111 million. The arrangement, effective from 30 June 1991, was completed on 5 July 1991.

On 13 September 1991 an offer was made by Chase AMP to Westpac to enter into an agreement for the sale of Chase AMP as vendor to Westpac as purchaser of credit card receivables and other amounts owing to it in relation to the facility known as Line of Credit located in Queensland which were the subject (together with other receivables of the vendor) of a fully funded participation agreement with the purchaser.

On 27 September 1991, two officers of Westpac orally accepted on behalf of Westpac Savings Bank Ltd an offer made by Westpac. The offer to the Savings Bank was to enter into an agreement relating to the assignment of fully funded participation rights. It provided for the assignment by Westpac for a consideration of $1.00 of all participant rights and interests in the loans and other receivables located in Queensland owed to the Vendor by customers of Chase AMP as at 20 September 1991 in respect of the facilities known as Chase AMP Capitalizer and Chase AMP Staff Cheque Accounts as at 20 September 1991, and for the Savings Bank to assume all rights and responsibilities of Westpac in respect of the loans.

In correspondence between the solicitors for Westpac and the Commissioner of Stamp Duties, arguments were presented on the question whether there bad been an acquisition by Westpac of a business. Westpac's solicitors contended that Chase AMP's Consumer Banking Group was not a separate business of Chase AMP; this contention was rejected by the Commissioner. There was clear disagreement expressed in these letters on a number of factual issues.

On 21 February 1992, the solicitors for the applicant wrote to the Office of State Revenue in relation to the sale by Chase AMP of some of its retail assets to Westpac. They stated:

The letter goes on to assert:-

Mr. Jones, a special auditor employed in the Compliance Branch of the Office of State Revenue, had as part of his duties the investigation of the acquisition in 1991 by Westpac of the Consumer Banking Group of Chase AMP Ltd. In June 1992 he caused to be inspected and searched some 250 boxes of documents held by Westpac in Sydney which contained material relating to the acquisition by Westpac, and he also caused to be conducted an examination of documents held by Chase AMP relating to the acquisition. He extracted copies of all those documents relating to the acquisition which in his opinion were relevant to the formulation by the Commissioner of Stamp Duties of an assessment of stamp duty in respect of the acquisition. Copies of such documents are annexed to his affidavit. He expresses the opinion as a result of his consideration of these copies that the facts of the acquisition of the Consumer Banking Group of Chase AMP can be adequately detailed and set out in the case stated for consideration by the Court of Appeal.

Among the documents annexed to the affidavit by Mr. Jones are copies of correspondence between the Office of State Revenue and the solicitors for the applicant. In particular, in a letter dated 21 August 1992 Mr. Jones set out in detail the facts which he alleged evidenced clearly that Westpac had acquired a business that existed in Queensland and was therefore liable to lodge a Form S(a). These are:

Mr. Jones added:-

``Subsection 54A(2) of the Act requires every person who acquires or agrees to acquire a business that exists in Queensland to deliver to the Commissioner of Stamp Duties a Form S(a) whereunder all assets acquired are to be set forth and which statement is, pursuant to subsection 54A(5) of the Act, charged with duty as if it were a conveyance or transfer of the property to which it relates for a consideration equal to the full unencumbered value of that property.

It is considered that the facts clearly show that Westpac has acquired a business that exists in Queensland and is therefore liable to lodge a Form S(a)...

In terms of s. 54A of the above Act, I require a duly completed declaration Form S(a) to be furnished by your client in respect of the above acquisition within 21 days of the date of this letter.''

He also replied to an argument in the opinion of Senior Counsel for the applicant to the contrary. He then required a duly completed declaration Form S(a) to be furnished by the applicant in respect of the acquisition within 21 days.

Subsequently, he advised the applicant's solicitors that no action would be taken in respect of the non-lodgment of the Form S(a) pending further submissions to be made by no later than 14 September 1992. He added that if after considering the submissions made on behalf of Westpac he was still of the view that s. 54A applied, Westpac would be given a further 21 days to lodge the Form S(a).

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On 14 September 1992, the applicant's solicitors sent a detailed reply to Mr. Jones's letter of 21 August. This asserted that a number of the facts alleged in his letter were incorrect, in particular:

A reply to this was sent by Mr. Jones on 18 September 1992.

This discussed and rejected the purported factual inaccuracies of his letter of 21 August 1992 dealing with the status of the bank and goodwill. It concluded that if the applicant's solicitors disagreed with the decision expressed in the letter, then they might take advantage of the objection procedure set out in s. 23D of the Stamp Act after the applicable assessment issued.

A further letter by the applicant's solicitors of 12 October 1992 asserted that the letter of 18 September 1992 contained a number of factual errors.

On 16 October 1992, the respondent caused to be issued notices of assessment under s. 22 of the Stamp Act and also a notice of default assessment under s. 22A(a) of the Act. The notice of assessment under s. 22 of the Stamp Act assessed duty in respect of the offer and fully funded participation agreement dated 4 July 1991 in the sum of $544,150 pursuant to s. 67A of the Act, and imposed penalty under s. 26 of the Act in the sum of $114,271. He further assessed the offer, acceptance and assignment dated 27 September 1991 pursuant to s. 49 of the Act in the sum of $640,818.75, and imposed penalty under s. 26 in the sum of $108,939. The notice of default assessment under s. 22A(1) states that ``on a date during the period 4 July 1991 to 20 September 1991 Westpac Banking Corporation acquired the consumer banking business carried on by the Consumer Banking Group of Chase AMP Bank Ltd. that existed in Queensland for the purposes of s. 54A, in respect of which it was obliged to, but failed to, lodge a Form S(a)''. A default assessment was made in the sum of $6,728,088.15.

In an affidavit by Mr. Allen, a solicitor for the applicant, filed on 4 November 1992, it is stated that in order to prepare its case properly, the solicitors for the applicant will have to peruse a vast number of documents and examine a large number of potential witnesses in order to assemble the appropriate affidavit evidence. In order to determine the question whether a business was acquired, the Court will have to examine the organisational and structural function of the bank at the date of the acquisition. It is stated that there was a strong level of interdependence between the acquired assets and the remaining assets such that it is incorrect to say that a business was acquired. It is asserted that in order to determine whether a business was acquired it is necessary to understand fully the workings of the Bank and the interconnection between the various groups within the bank. It is claimed that it will be necessary to interview staff and former staff from various groups within the Bank and to peruse a vast quantity of documentation. It is pointed out that there is no agreement between the parties as to the relevant primary facts, or even as to the material on the basis of which findings as to the primary facts could be made, and it is said that neither are capable of concise summary.

The applications for statutory orders of review are brought under s. 20(1) and s. 21(1) of the Judicial Review Act 1991. Section 20(1) provides that a person who is aggrieved by a decision to which this Act applies may apply to the Court for a statutory order of review in relation to the decision. The applicant's interests are adversely affected by the decisions, and hence it is a person aggrieved by the decisions: s. 7(1). In s. 4, a decision to which the Act applies is defined. It means inter alia a decision of an administrative character made, proposed to be made, or required to be made, under an enactment (whether or not in the exercise of a discretion). I regard the decisions which are sought to be reviewed as clearly falling within that definition. In terms of the language used by members of the High Court in relation to similar language in s. 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth.), in
Australian Broadcasting Tribunal v. Bond & Ors (1990) 170 CLR 321, the decisions can be said to be required by or

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authorised by a statute which is final or operative and determinative, at least in a practical sense, of the issues of fact falling for consideration, and the decisions are substantive rather than procedural determinations.

Section 18(1) of the Judicial Review Act provides that, subject to subsection (2), this Act has effect despite any law in force at the commencement of the Act. Obviously that includes the Stamp Act 1894. By subsection (2), the Act does not affect the operation of a provision mentioned in Schedule 1. The Stamp Act is not included in that Schedule, which refer to a number of provisions which com- prehensively exclude judicial review. I note by way of contrast that the Administrative Decisions (Judicial Review) Act 1977 (Cth.) provides that a number of decisions leading up to the making of an assessment of tax are not decisions to which the Act applies. By s. 10(1) of the Judicial Review Act, the rights conferred by that Act on a person to make an application to the Court in relation to a reviewable matter are in addition to any other rights that the person has to seek a review of the matter (whether by the Court, another court or a tribunal, authority or person).

The Stamp Act provides in s. 23D that a person who is dissatisfied with an assessment of the Commissioner may, within 30 days of being notified of the assessment or within such further period as the Commissioner allows, object in writing to the Commissioner. The objection is to set out fully the grounds of the objection. As soon as possible after the objection is determined, the Commissioner must notify the person, in writing, of the Commissioner's decision on the objection and the reasons for the decision. The making of an objection does not relieve the person of liability to pay the duty assessed as required by the Act.

Section 24 provides:

``(1) A person who is dissatisfied with the determination of an objection may, within 30 days of being notified of the Commissioner's decision on the objection, appeal against the assessment to the Supreme Court.

(1A)...

(1B) Notice of the appeal is to require the Commissioner to state and sign a case setting out the questions upon which the Commissioner's opinion was required and the assessment made by the Commissioner.

(2) The Commissioner shall thereupon state and sign a case and deliver the same to the person by whom it is required, and such person shall within seven days thereafter cause the said case to be set down for hearing before the next sittings of the Court at which the same can be heard.

(3) Upon the hearing of the case the Court shall determine the questions submitted, and, if the instrument in question is in the opinion of the Court chargeable with any duty, shall assess the duty with which it is chargeable.''

Section 12 of the Judicial Review Act provides:

``Despite section 10, but without limiting section 48, the Court may dismiss an application under section 20, 21, 22 or 43 that was made to the Court in relation to a reviewable matter because-

  • (a) the applicant has sought a review of the matter by the Court or another court, otherwise than under this Act; or
  • (b) adequate provision is made by a law, other than this Act under which the applicant is entitled to seek a review of the matter by the Court or another court.''

In the instant case the applicant has not sought a review of the matter otherwise than under the Judicial Review Act. It was submitted for the applicant that s. 12(b) had no application because there was no right under the Stamp Act of review by a Court of the decisions sought to be reviewed. In my view, there is such right under s. 24 of the Stamp Act. The word ``review'' by s. 3 includes a review by way of appeal, and that right is accorded by s. 24 of the Stamp Act.

It was then submitted for the applicant that s. 24 of the Stamp Act did not make ``adequate provision'' for a review. It was said that it provides for appeal by case stated only, which is an unsatisfactory and inadequate provision, especially where the essential dispute between the parties relates to a question of fact.

There has been criticism by the Courts of the form of appeal provided by s 24 of the Stamp Act Very recently, in
Westpac Banking Corporation & Anor v. Commr of Stamp Duties

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92 ATC 4571, it was said in a joint judgment of Pincus J.A. and Demack J. [at p. 4582]:-

``The case stated is as has often been said, an unsatisfactory form of appeal. One of its unsatisfactory features is that if the facts stated are incomplete, the Court cannot decide the missing facts itself. Section 24 of the Stamp Act, which gives this Court jurisdiction, contains no express power to send the case back to the Commissioner for amendment.''

In
O'Sullivan & Ors v. Commr of Stamp Duties (Qld) 83 ATC 4684; (1984) 1 Qd.R. 212, it was held that the Supreme Court had no jurisdiction to determine the question of duty in proceedings other than as provided by s 24. In the course of his judgment, G.N. Williams J. referred to a number of passages in judgments which had stated that the procedure of case stated was unsatisfactory, as the Court was not at liberty on the hearing of the case to go outside the facts as stated by the Commissioner upon which his assessment was made.

One such statement is that by Fullagar J. in
Francis v. Commr of Stamp Duties (N.S.W.) (1953-1954) 91 CLR 368 at p. 400. He said:-

``It is obvious that the validity or correctness of an assessment of stamp duty is just as likely to depend on a question of fact as on a question of law. The value of an asset, for instance, is very likely to come into controversy, and a question of value is, of course, a question which can only be decided on evidence. In such cases the procedure by way of `case stated' is prima facie an inappropriate and defective procedure because the normal function of a case stated is to place ultimate (as distinct from evidentiary) facts before a court with a view to obtaining a decision on a question of law which those ultimate facts raise...''

In
R v. Rigby & Anor (1956) 100 CLR 146 at p. 151, it was pointed out that upon a case stated the court cannot determine questions of fact and it cannot draw inferences of fact from what is stated in the case. Its authority is limited to ascertaining from the contents of the case stated what are the ultimate facts, and not the evidentiary facts, from which the legal consequences ensue that govern the determination of the rights of parties.

The procedure is particularly unsatisfactory where, as in this case, there are numerous differences between officers of the applicant and of the respondent as to the relevant facts. In correspondence between the parties, the respondent has contended that a central issue, namely whether the applicant acquired a business existing in Queensland, was a relatively clear-cut factual question. This is denied by the applicants, who assert that there are many factual inaccuracies in the respondent's contention. They assert moreover that the determination of the accuracy of their contentions will require inter alia the perusal of considerable further documentation and interviews with the executive and staff of Chase AMP.

Section 12(b) of the Judicial Review Act corresponds to s. 10(2)(b)(ii) of the Administrative Decisions (Judicial Review) Act 1977 (Cth). In relation to that provision, it was said by Jenkinson J. in
Kimberly-Clark Ltd. v. Commr of Patents (1988) 15 ALD 740 that the present tense of the word ``entitled'' in the section did not require that the entitlement should still exist when the court is called upon to exercise its discretionary powers. The Full Court of the Federal Court has expressed the view that in many, (perhaps most) circumstances, the Court's proper response to an application, where legislation provided its own method of review, should not be to embark upon a full hearing but rather to exercise the discretion under s. 10(2)(b)(ii) adversely to the applicant. In that case, the legislation had provided specific machinery for dealing with complaints that exports were being dumped onto the Australian market. That statement was quoted and applied in
Yarmirr & Ors v. Australian Telecommunications Corporation (1990) 96 ALR 739, where Burchett J. held that an application should be refused under s. 10(2)(b)(ii) since the Australian Telecommunications Corporation Act 1989 (Cth.) made adequate provision entitling the applicants to seek review by Austel on the merits of a decision by Telecom in relation to the provision of a service.

It was submitted for the respondent that a court should be particularly slow to conclude that adequate provision is not made by an Act which entitles a person to seek a review of an assessment by the Commissioner of Stamp Duties by an appeal to the Supreme Court. The Stamp Act entitles the applicant to seek such a review, it requires the Supreme Court to

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determine the questions submitted, and obliges it to assess the duty if the instrument is chargeable with duty. At the same time, it defines precisely the effect of the notice of appeal and the obligation of the Commissioner when notice is served upon him. It was conceded that procedure is capable of criticism, but it was pointed out that it is the procedure adopted by the Legislature which has been the exclusive method by which a person charged with duty might challenge an assessment. It was submitted that to give effect to the contention that it did not make adequate provision would be to assume a power to remove limitations written into s. 24 of the Stamp Act on the basis that they may in some cases produce an unsatisfactory result.

It is essential to bear in mind the difference between the procedure of an appeal under s. 24 of the Stamp Act and that provided by the Judicial Review Act. It is pointed out by Professor Wade: Administrative Law, 6th edition, p. 36 that:

``The system of judicial review is radically different from the system of appeal. When hearing an appeal the court is concerned with the merits of the decision under appeal. When subjecting some administrative act or order to judicial review, the court is concerned with its legality. On an appeal the question is `right or wrong?' On review, the question is `lawful or unlawful?'''

The distinction is referred to in the context of the stamp duty legislation in
Cuming Campbell Investments Pty. Ltd. v. Collector of Imposts (Vic.) (1938) 60 CLR 741. The question in that case was whether an order in the nature of mandamus can be obtained commanding the Collector of Imports to assess stamp duty upon the transfer of certain land upon the footing that it was a transfer on sale at the consideration named therein. The answer was given by Latham C.J. at p. 750. He said:-

``What is asked is that the collector be ordered to arrive at a particular decision in the appellant's favour. In my opinion the court can do no more than direct the collector to perform his statutory duty. He will perform the whole of his statutory duty if he considers the instrument submitted to him and expresses an opinion whether it is chargeable with any duty and with what amount of duty it is chargeable...

... the statute expressly provides a specific method of putting the collector right if he goes wrong. The court is not authorized by the statute to make an original assessment of duty. The court is authorized to make an assessment only after the collector has assessed and when the court has the benefit of the opinion of the collector. The statute shows the intention of the legislature that the court should engage in the assessment of duty only upon an appeal from the collector. It would, in my opinion, be wrong for the court, when this specific remedy by way of appeal is given, to utilise mandamus proceedings so as to exclude the collector from the exercise of the function entrusted to him by the statute, and at the same time, to enable the court to make an original assessment of duty which is not contemplated by the Act.''

It appears from that decision that mandamus would lie to compel the Commissioner to perform his statutory duty. More generally, I consider that the legality of the decisions of the Commissioner is subject to judicial review, but that the merits of his decisions may be challenged only by the procedure laid down by s. 54 of the Stamp Act. The Court could not itself determine, in judicial review proceedings, whether an instrument is chargeable with duty and the duty with which it is chargeable. These are matters which are confided by the Legislature to the opinion of the Commissioner. It could, however, exercise the powers conferred on it by s. 30 or s. 47 of the Judicial Review Act where circumstances existed which justified the exercise of these powers.

It could not, therefore, in my opinion be said that s. 54 of the Stamp Act did not make adequate provision for a review because it provided for appeal by the unsatisfactory method of a case stated. It does not make adequate provision for review because it does not provide machinery for reviewing the legality of decisions of the Commissioner. It is precisely that machinery that the Judicial Review Act is designed to establish.

Section 13 of the Judicial Review Act provides that if an application under s. 20 is made to the Court in relation to a reviewable matter, and provision is made by a law, other than this Act, under which the applicant is entitled to seek a review of the matter by another court or a tribunal, authority or person,

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the Court must dismiss the application if it is satisfied, having regard to the interests of justice, that it should do so. The Stamp Act entitles the applicant to seek a review by a person, namely the respondent, pursuant to the procedure set out in s. 23D in relation to objections against assessment. I am not however satisfied that I should dismiss the application having regard to the interests of justice. The objection is one made by a person dissatisfied with an assessment of the Commissioner to the Commissioner. I do not consider that it is in the interests of justice to conclude that the existence of this procedure should lead to the consequence that an application under the Judicial Review Act must be dismissed. I am also not satisfied that I should dismiss the application on the ground that there exists an appeal process under s. 24 of the Stamp Act which has frequently been criticised as inadequate.

It was submitted for the respondent that I should exercise the jurisdiction conferred on me by s. 48(1) of the Judicial Review Act to stay or dismiss the applications on the ground that it would be inappropriate for proceedings in relation to the application or claim to be continued or to grant the application or claim. I was referred to decisions relating to the question whether an action should be stayed on the ground that the forum was inappropriate. The submission was that it was inappropriate for the proceedings to be continued or for the application to be granted by reason of the existence of an appropriate forum pursuant to ss. 23(2) and 24 of the Stamp Act. That seems to me to be in the circumstances of this case only another way of expressing the submission that adequate provision is made by the Stamp Act under which the applicant is entitled to seek a review of the matter by the Court, and I do not think it necessary to consider it again.

It was submitted also for the respondent that, in terms of s. 48(1)(b), no reasonable basis for the applications had been disclosed. This submission was based upon s. 78A(1A) of the Stamp Act which makes production of an assessment or of a document purporting to be under the hand of the Commissioner purporting to be a copy of an assessment, conclusive evidence of the due making of the assessment and that the amount and all particulars of the assessment are correct, except in proceedings on appeal against the assessment. I was referred to the decision in
FJ Bloemen Pty. Ltd. v. FC of T; Simons v FC of T 81 ATC 4280; (1981) 147 CLR 360 in relation to the effect of s. 177(1) of the Income Tax Assessment Act 1936 (Cth.) which is very similar to s. 78A(1A). It was said at ATC p. 4288; CLR p. 375 in the joint judgment of Mason and Wilson JJ.:-

``An explicit and, in our view, correct statement of the effect of sec. 177(1) was made by Taylor J. in McAndrew [(1956) 98 CLR] (at pp. 281-282). For the reasons there expressed his Honour concluded that `s. 177(1) was intended to make it impossible for a taxpayer, in proceedings other than appeal against it, to challenge an assessment on any ground'...

This interpretation gives expression to the policy which underlies, and is manifest in, the statutory provisions. The effect of this policy is that, once the Commissioner takes advantage of sec. 177(1) by producing an appropriate document, the taxpayer is precluded from contesting that the Commissioner has made an assessment or that in making the assessment he has complied with the statutory formalities. The taxpayer is entitled to dispute his substantive liability to tax in proceedings under Pt. V.''

The judgment proceeded to deal with a submission that this view of the operation of the Act did not offer sufficient protection to the taxpayer in the event of an abuse by the Commissioner of his powers. It was said:

``the Act does not proceed upon the hypothesis that the Commissioner will be motivated in the exercise of his powers by improper or collateral purposes. As Isaacs A.C.J. observed in
F.C. of T. v. Clarke (1927) 40 C.L.R. 246, at p. 276, after stating that sec. 39 of the Income Tax Assessment Act 1922-1925 (a provision analogous to s. 177 of the Act) made the assessment unchallengeable:

`The Act so far trusts the Commissioner and does not contemplate, in my opinion, a curial diving into the many official and confidential channels of information to which the Commissioner may have recourse to protect the Treasury.'''

It added (at ATC p. 4289; CLR p. 377):

``The Commissioner may be right or wrong in his view of the facts, but it would appear to be incontrovertible that the figure on the

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notice of assessment which records the Commissioner's view of the taxable income evidences that a process of assessment was actually undertaken however cursory or inadequate that process may have been.''

In
David Jones Finance and Investments Pty. Ltd. & Anor v. FC of T 91 ATC 4315, a majority of the Full Court of the Federal Court held that as a consequence of the enactment of s. 39B of the Judiciary Act, the due making of an assessment and the amount and all particulars thereof is open to inquiry in the Federal Court.

It was submitted for the applicant that s. 18(1) of the Judicial Review Act was intended to override any limitations in any other enactments except those in the Schedule, and hence that this included the limitations in s. 78A(1A) of the Stamp Act.

I do not think that it can be said that the same effect should be attributed to the Judicial Review Act as was given to s. 39B of the Judiciary Act. But I consider that the effect of s. 78A(1A) of the Stamp Act will be obviated if an order is made under s. 30(1)(a) of the Judicial Review Act quashing or setting aside an assessment by the Commissioner. The assessment will then not exist from the time when the order comes into effect, and if it does not exist, it will have no evidentiary effect pursuant to s. 78A(1A) of the Stamp Act.

I have set out in considerable detail the grounds on which a statutory order of review and an application for review are sought. They all amount to an assertion that the Commissioner did not have regard to evidence which would indicate that the applicant was not required to furnish a Form S(a), or that his opinion that duty ought to be charged on a statement which ought to have been delivered under s. 54A of the Stamp Act was formed because he had improperly exercised his powers under the Stamp Act. It was claimed that an opportunity should be afforded to the applicant to place further facts before the Commissioner.

I conclude that I should not stay or dismiss these applications, and that I should make an order that the Court will hear the applications on a date to be fixed. It will no doubt be necessary for directions to be given in relation to the hearing of the application.

The applicant seeks an order, under s. 29(2) of the Judicial Review Act, that the decision to issue the default assessment, the default assessment and any procedure to enforce the default assessment be stayed until the determination of these proceeds.

The applicant, after initiating these proceedings, sought the delay of the issue of any default assessment by a letter to the respondent on 12 October 1992. However, on 16 October 1992 the respondent issued a default assessment. It is claimed (a) that the default assessment was issued by the respondent as an improper exercise of the power to make a default assessment, and for the purpose of frustrating these proceedings; (b) that its issue prejudices the applicant in that it will be forced by the issue of the default assessment to lodge an objection, and if necessary appeal by way of case stated, in parallel with these proceedings, in order to pressure its rights; and (c) it will prejudice the applicant in that it will require the amount claimed by the respondent to be paid prior to a judicial determination of the issue of whether the respondent was entitled to issue the default assessment, in order to avoid incurring further penalties.

On 9 December 1992, Westpac lodged with the respondent a cheque for $6,728,088.15 pursuant to an undertaking given on its behalf at the hearing before me. This is the amount of the default assessment.

In the proceedings before me, it was said that the applicant seeks an order under s. 29(2) in order to maintain the status quo, and in order to prevent time running against it in relation to its right to object under s. 23D, which is a precondition to a right to appeal under s. 24. It was claimed that it is inappropriate for there to be parallel appeals on foot, and the issue arising in these proceedings should be determined first, before any of the consequential disputes between the parties are commenced.

The interpretation of s. 15 of the Administrative Decisions (Judicial Review) Act 1977 (Cth.), which corresponds to s. 29 of the Judicial Review Act, has been considered by the Federal Court of Australia in several cases. A review of earlier decisions was made by French J. in
Snow v. DFC of T 87 ATC 4078; (1987) 14 FCR 119. An issue which had frequently arisen was whether the test to be applied in an application for a stay was that for an interlocutory injunction, and on that issue somewhat differing opinions had been expressed. In the context of the power of state

ATC 4330

courts to stay recovery proceedings under the Income Tax Assessment Act, he referred also to several decisions which indicated that the courts will generally refuse a stay despite the fact that an appeal is pending, though other decisions were to the effect that a stay would be granted when the institution of proceedings for recovery may operate oppressively and unfairly to a taxpayer who had challenged a notice of assessment.

If the substantive issue in this case in relation to the application for a stay was whether it should be granted so that the obligation to pay the default assessment would be deferred pending the determination of the proceedings, I would be disposed to refuse it. That is not however now the issue, as the amount of the default assessment has been paid. The issue is whether a stay should be granted to prevent time running against the applicant in relation to its right to object under s. 23D of the Stamp Act. This requires an objection to be made against an assessment within 30 days of being notified of the assessment. In relation to this, I consider that there is a serious question to be tried as to whether the Commissioner has properly exercised his powers under the Stamp Act, and that, the duty assessed having been paid the balance of convenience favours the grant of a stay so that the issue whether the Commissioner has acted in accordance with the law is determined before the correctness of his decision is raised by appellate proceedings.

THE COURT ORDERS:

(a) That the applications by the respondent for a dismissal or stay of the applications be dismissed;

(b) That the applications by the applicant for orders to review be heard on a day to be fixed;

(c) That there be liberty to apply on two days' notice;

(d) That the decision to issue the default assessment and the default assessment be stayed until the determination of the applications or earlier order;

(e) That the costs of this application be paid by the respondent.

 

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