NSW Supreme Court rejects effort to shift burden to Commissioner of State Revenue
A Transtar Linehaul action in the New South Wales Supreme Court against the Chief Commissioner of State Revenue (CCSR), seeking coverage of the firm’s legal costs, has failed.
Transtar is one of three companies – Fleet Repairs and Maintenance Pty Ltd, Transtar Linehaul Pty Ltd and Edgely Pty Ltd – the CCSR had grouped for payroll tax purposes between 2013 and 2017.
It was a move that the NSW Civil and Administrative Tribunal ruled on a year ago after Fleet Repairs and Maintenance’s 2017 objection.
The CCSR’s reasoning for the grouping was that the late Ronald Searle, a director in all three companies, was entitled to exercise greater than 50 per cent of the voting power at the board meetings of all three companies.
This was based on a 2004 Transtar deal with RJK Logistics through its director, Robert Keel, worth $100,000 a year “for services including: the generation of business, management of client relationships and introduction of new clients”.
Exemptions from the state Payroll Tax Act’s section 32(2) were sought but deemed inapplicable and the “cumulative element” of the relationship meant that the argument failed.
Read how the NSW Supreme Court views HVNL section interactions, here
Once the issue reached the Supreme Court for review, Transtar argued that it had been wrongly grouped with another related labour hire entity Kagua, Pty Ltd, which had been liquidated, but this and the hearing were dismissed.
But, last month, the case then moved to costs, with Transtar arguing the CCSR amendments in a statement for an appeal hearing last November meant CCSR was using a different section to the one Transtar was defending.
Therefore it should not bear the extra cost.
This was rejected because the hearing was dismissed and the CCSR’s actions were not deemed unreasonable given issues that arose from affidavits from the other side.