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Chief Commissioner of State Revenue (NSW) v Shell Energy Operations No 2 Pty Ltd [2023] NSWCA 113 – NSW Court of Appeal holds that power stations were ‘goods’
The NSW Court of Appeal has held that interests in power stations which were severed from the land on which they stood were ‘goods’ for the purposes of the landholder duty provisions in Chapter 4 of the Duties Act 1997 (NSW).
The reason for this was that the ordinary understanding of the notion of ‘goods’ at general law, which the relevant statutory usage of the word encompassed, included former fixtures which had been legally severed from the land. As such, the items which made up the power stations became ‘goods’ within the meaning of Chapter 4 when they were legally severed from the land pursuant to two statutory vesting orders, there being nothing in those orders which had the effect of changing the legal character of those items to become innominate sui generis property interests. Further, even if the vesting orders had had such an effect, the Court found that such a property interest would still fall within the concept of goods for the purposes of Chapter 4.
In so doing, the Court overturned the decision of Ward CJ reported at [2022] NSWSC 1074 (covered in the Birchstone Brief for the week ended 19 August 2022).
Integrated Trolley Management Pty Ltd v Chief Commissioner of State Revenue (NSW) [2023] NSWSC 557 – NSW Supreme Court finds trolley collection services not procured under employment agency contract
The NSW Supreme Court has held that trolley collection services provided to three major supermarkets pursuant to a subcontracting arrangement were not procured under employment agency contracts within the meaning of section 37(1) of the Payroll Tax Act 2007 (NSW).
The taxpayer operated a trolley collection business and had contracts with three major supermarket operators. However, they did not employ people to collect the trolleys, but instead engaged subcontractors to perform the specified trolley collection services on its behalf. These subcontractors were a mixture of sole traders, partnerships, family trusts and small proprietary companies, who themselves may have engaged employees or other agents to actually perform the trolley collection work.
Contrary to the Commissioner’s contentions that the contracts were employment agency contracts as the subcontractors performed work and had duties that would otherwise be carried out by employees of the supermarkets, the Supreme Court found that the subcontractors were independent contractors operating their own businesses who were retained by the supermarkets through an intermediary, and as such could not be seen as undertaking the relevant work ‘in and for’ the businesses of the supermarkets. Significant factors leading to this conclusion included that the trolley collection services provided were a defined and discrete task performed outside the supermarket and requiring no coordination with or supervision from the supermarket staff, and that the use of trolley collection contractors was common in the supermarket industry.
FCT v Wood [2023] FCA 574 – Federal Court affirms deductibility of settlement fee
The Federal Court has affirmed a decision of the AAT, reported at [2022] AATA 4147 (covered in the Birchstone Brief for the week ended 16 December 2022), that the relevant taxpayer was permitted to deduct a payment made to settle litigation pursuant to section 8-1 of the ITAA 1997.
Matthews v FCT [2023] AATA 1329 – AAT affirms Commissioner’s decision to deny substantial deductions
The AAT has affirmed an objection decision in which the Commissioner denied $148,666 in deductions claimed by an individual taxpayer. This was because, due to a lack of evidence from the taxpayer, the AAT was not convinced that the taxpayer was carrying on a business or required to use his own vehicle to produce assessable income. The taxpayer had also failed to properly substantiate the expenses related to his car using the logbook method, and did not produce any evidence to show that other claimed expenses were not private or capital in nature.
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