Commissioner of Taxation v Racing Queensland Board

• Jurisdiction: Australia Federal only
• Court: Full Federal Court (Australia)
• Judgment Date: 16 December 2019
• Neutral Citation: [2019] FCAFC 224
• Date: 16 December 2019

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Racing Queensland Board [2019] FCAFC 224

Appeal from:	Racing Queensland Board v Commissioner of Taxation [2019] FCA 509
File number:	QUD 275 of 2019
Judges:	GRIFFITHS, DERRINGTON AND STEWARD JJ
Date of judgment:	16 December 2019
Catchwords:	SUPERANNUATION – whether principal racing authority liable to pay superannuation guarantee charges – construction of s 12 of Superannuation Guarantee (Administration) Act 1992 (Cth) – whether principal racing authority is “employer” of jockeys – whether principal racing authority liable to pay riding fees to jockeys – where principal racing authority stated that it would pay jockeys – where principal racing authority in fact paid jockeys – where principal racing authority prepared recipient created tax invoices reflecting liability to pay – whether payments made “on behalf of” another person – where amounts paid not reimbursed by another person ; TAXATION – appeal from objection decision – onus of establishing that assessments excessive or otherwise incorrect – whether onus discharged ; CONTRACTS – nature of contractual relations in regulated industry of thoroughbred horse racing – relevance of statutory instruments and rules of sport to formation of contracts – engagement by third parties to participate in races ; APPEAL AND NEW TRIAL – whether appellable error in approach to evidence adduced on appeal from objection decision – where evidence of past events not adduced from contemporaneous witnesses – relevance of evidence relating to arrangements prior to the relevant period
Legislation:	A New Tax System (Goods and Services) Act 1999 (Cth) s 195-1 Income Tax Assessment Act 1936 (Cth) s 80C (repealed) Superannuation Guarantee (Administration) Act 1992 (Cth) ss 11, 12, 16, 17 and 19 Superannuation Guarantee Charge Act 1992 (Cth) ss 5 and 6 Taxation Administration Act 1953 (Cth) s 14ZZO Racing Act 2002 (Qld) s 6
Cases cited:	Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 Bosanac v Commissioner of Taxation [2019] FCAFC 116 Braverus Maritime Inc v Port Kembla Coal Terminal Ltd (2005) 148 FCR 68 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Clarke v The Earl of Dunraven and Mount-Earl (The “Satanita”) [1897] AC 59 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 Financial Synergy Holdings Pty Ltd v Federal Commissioner of Taxation (2016) 243 FCR 250 Golden v V’landys (2016) 339 ALR 610 Hogno v Racing Queensland Ltd [2012] QSC 303 Hogno v Racing Queensland Ltd [2013] QCA 139 Lismore City Council v Stewart (1989) 18 NSWLR 718 McHugh v Australian Jockey Club (No 13) (2012) 299 ALR 363 Mercato Sports (UK) Ltd v The Everton Football Club Co Ltd [2018] EWHC 1567 New South Wales Thoroughbred Racing Board v Waterhouse (2003) 56 NSWLR 691 NT Power Generation Pty Ltd v Power and Water Authority (2001) 184 ALR 481 NT Power Generation Pty Ltd v Power and Water Authority (2002) 122 FCR 399 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231 Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (2004) 140 FCR 445 R v Toohey; Ex parte Attorney-General (NT) (1980) 145 CLR 374 R v Wadley, ex parte Burton [1976] Qd R 286 Racing Queensland Board v Commissioner of Taxation (2019) 371 ALR 358 Re Queensland Principal Club (unreported, Supreme Court of Queensland, Williams J, 29 January 1999) Richard Walter Pty Ltd v Commissioner of Taxation (1996) 67 FCR 243 South Australian River Fishery Association Inc v South Australia (2003) 85 SASR 373
Date of hearing:	21 November 2019
Date of last submissions:	10 December 2019
Registry:	Queensland
Division:	General Division
National Practice Area:	Taxation
Category:	Catchwords
Number of paragraphs:	131
Counsel for the Appellant:	P A Looney QC and C M Pierce
Solicitor for the Appellant:	Australian Government Solicitor
Counsel for the Respondent:	P G Bickford and F Chen
Solicitor for the Respondent:	Clayton Utz

ORDERS

		QUD 275 of 2019
BETWEEN:	COMMISSIONER OF TAXATION Appellant
AND:	RACING QUEENSLAND BOARD Respondent

JUDGES:	GRIFFITHS, DERRINGTON AND STEWARD JJ
DATE OF ORDER:	16 December 2019

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The orders made below on 12 April 2019 be set aside, and in lieu thereof it be ordered that the applicant’s appeal against the respondent’s objection decision of 17 August 2017 be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GRIFFITHS AND DERRINGTON JJ:

Introduction

1. The Racing Queensland Board is the Principal Racing Authority for Queensland and has effective control of, inter alia, thoroughbred horse racing in that State. For convenience, in these reasons the Board will be referred to as the QPC, being a shorthand expression for “Queensland Principal Club”. Its statutory position affords it power to control thoroughbred racing in Queensland. It does so by the application of the Australian Racing Rules (ARR) and Local Rules.

2. Coinciding with the introduction of the goods and services tax (GST) on 1 July 2000, the QPC’s progenitor entity introduced a new system for the distribution of money to industry participants. It was called the “Centralised Prizemoney System” (CPS). Through it, the QPC has paid riding fees to jockeys in respect of their participation in races and barrier trials. Such fees were separate to the prizemoney which the QPC paid to the jockeys, the trainers and the owners in their respective proportions.

3. In the quarters between 1 July 2009 and 30 September 2014, referred to in this action and in these reasons as “the Relevant Periods”, the QPC did not pay any superannuation guarantee charges pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA). It says that it was not liable to do so because it had no liability to pay riding fees to the jockeys, and was merely paying them on behalf of racehorse owners. The Commissioner issued a number of default assessments to the QPC on the basis that it had a liability to pay superannuation guarantee charges. The QPC objected to the assessments and that objection was upheld by the primary judge.

4. The central issue on appeal is whether the QPC was liable to pay the riding fees to the jockeys in respect of their participation in thoroughbred horse racing. If that question is answered in the affirmative, the QPC was obliged to pay the superannuation guarantee...