The decision concerns an application by Kurt Kennedy to review a decision of the Commissioner for ACT Revenue that disallowed an objection to the payment of rates regarding a residential property in the ACT. The report notes that Kennedy is "a qualified legal practitioner" who has a master's degree in law. What's more, "at the time of the transactions in question [Kennedy] was working in the office" of the Commissioner for ACT Revenue. It states that -
In documents filed with the tribunal, the applicant made serious allegations of fraud and malfeasance against various officers of the Territory government, including the respondent and members of his staff and the Registrar General. No credible evidence, or indeed evidence of any sort, was brought to support those allegations, and the tribunal completely disregards them. The Registrar General was not joined as a party to the proceedings. To make such allegations without evidence and in the case of the Registrar General without giving the person against whom the allegations are being made the opportunity to respond, reflects adversely on the credit of the appellant. This is particularly so as he is an admitted legal practitioner, who must be taken to know of the seriousness of making allegations of this nature without supporting them by credible evidence.In identifying the basis of the application the report had earlier noted that -
While the applicant and his wife are now the registered owners of the Property, at the time that the rates notice issued the crown lease under which they held, and continue to hold, their interests was not registered pursuant to the Land Titles Act 1925 ('LT Act'). The crown lease had been signed by both parties and was registrable, but the applicant had elected not to lodge it for registration with the Registrar General.Paragraphs 27-31 note that
The applicant was issued with a rates notice by the respondent, but refused to pay it. He objected to the payment of the rates on the basis that his crown lease was not registered. This was because of this decision to not lodge the signed and stamped lease with the Registrar General. He maintained that he and his wife were not the 'registered owners' upon whom the liability to pay rates devolves.
The applicant by letter of 1 September 2007 objected under the provisions of the Taxation Administration Act 1999 ('TA Act') to the payment of rates and taxes. This objection was disallowed by the respondent.
The applicant further contended that the respondent had no power to levy rates on the Property, because the Property was held by him on a lease from the Commonwealth. The imposition of rates on the Property would amount to a charge by the Territory government against the Commonwealth. The applicant contended that the Territory government had no power to bind the Commonwealth, and therefore it could not levy rates on the Property.The fun increases in para 42 -
The applicant further contended that as the rates assessment notice had been issued in the name of "K A Kennedy" rather than his full name "Kurt Alim Kennedy" the assessment notice was thereby invalid. (He did not make a similar submission in relation to the description of his wife, who is referred to in the valuation notice and assessment notice as “O Berjaoui” (T docks 38 and 39) As noted above, she arguably remains jointly and severally liable with the applicant for the payment of the rates as a matter of contract, having signed the New Lease.)
At the hearing of this matter the applicant also contended that the imposition of rates on the Property amounted to a charge by the Territory in the nature of customs or excise duties, and that as these were the exclusive province of the Commonwealth government under section 86 of the Constitution, the attempt by the respondent on behalf of the Territory to levy rates was unconstitutional.
In his written submissions (Paragraphs 42 of each of the applicant's submissions of 17 March 2009 and 4 May 2009) the applicant also contended that the imposition of an obligation on him to lodge the New Lease for registration and to pay rates was a breach or limitation of his human rights as protected by international agreements, but this matter was not pressed at the hearing.
The applicant also stated that as he had not received any services from the respondent in respect of the rates he did not consider that he had an obligation to pay them. The applicant did not appear to consider that because the payment of rates provided the many municipal services (not necessarily directly in respect of the Property) that he, along with other residents of the Territory took advantage of every day, he was deriving a benefit from payment of rates.the report continues that -
The applicant is a qualified legal practitioner with a master's degree in law, and at the time of the transactions in question was working in the office of the respondent. He acknowledged that he had access to the calendar indicating when the rates notices for various properties were sent to their owners. He did not concede that the timing of the surrender and the issue of the New Lease had been undertaken having regard to these dates. The tribunal found his evidence on this point to be unconvincing.Unsurprisingly -
The applicant contended that the use of initials for his given names together with his surname did not amount to a correct description of him. He did acknowledge that his letter of objection dated 1 September 2007 to the delegate of the respondent gave as his name on the first page "K A Kennedy" and that he had signed the letter in the same way. He did not dispute that the description of himself in this letter and his signature were references to him. The applicant also acknowledged that there was no other person with the initials "K A" and the surname "Kennedy" living at the Property.
The applicant stated his view that the imposition of rates through the agency of the respondent amounted to an action by of the Territory government that imposed a liability on the Commonwealth as the owner of the freehold of the land in the territory.
The applicant stated that the imposition of rates by the Territory amounted to the imposition of customs and/or excise duties, because the business of leasing out land is part of the commerce of the Commonwealth, and of getting a productive use of its land. The applicant contended that the provisions of the ACT (Self-Government) Act of the Commonwealth limited the power of the Territory to impose rates on the land, due to the absence of the RA and the TA Act from the schedule to the regulations made under the self-government act. Accordingly, in his view the imposition of rates on the Property exceeded the powers of the Territory government.
The applicant also denied that he had been involved in a tax avoidance scheme, because he was motivated by his preference to have an unregistered crown lease and not pay the fees for registration, rather than avoid tax. ...
Having considered all of these matters, the tribunal is satisfied that the steps taken by the applicant constitute an attempted tax avoidance scheme. This conclusion is reinforced by the failure of the applicant to give any coherent or substantial reason for entry into the scheme. The applicant would not acknowledge the indefeasibility of title and the ordinary security and commercial advantage that results from a registered crown lease. The applicant's failure to do so satisfies the tribunal that the only real motive for the surrender of the old crown lease and the acceptance of the New Lease was an attempt to avoid rates on the Property by means of a tax avoidance scheme.
The tribunal determines that the decision of the respondent on the objection of the applicant to the assessment for rates on the Property, was correct and should be upheld. There are no discretionary reasons why the tribunal should not do so: the applicant has not argued for the exercise of discretion. The tribunal notes that to waive the rates on the Property as a matter of discretion, even if that was available, would simply be to impose obligations on other ratepayers who comply with their legal obligations, while allowing the applicant to take advantage of the many municipal services that the payment of those rates provides.