The effectiveness of the State Administrative Tribunal as a cost-effective judicial forum could be eroded if government agencies appealed all adverse decisions to the Supreme Court, lawyers have told WA Business News.
Their concern was sparked by the Commissioner of State Revenue’s decision to appeal two tax judgements handed down by the SAT.
Wilson & Atkinson partner Teague Czislowski, who handled the two claims, said it would not be feasible for at least one of his clients to take part in the appeal given the possibility of an adverse costs order and the size of legal fees.
“It’s a pyrrhic victory if you end up in the Supreme Court whenever you have a win in the tribunal,” Mr Czislowski said
Attorney-General Jim McGinty has hailed the establishment of the SAT as one of his major reforms, as it provides a single tribunal able to hear a wide range of matters in a cost-effective manner.
Taxpayers, who previously had no option but to apply direct to the Supreme Court if they objected to a tax assessment, have embraced the opportunity.
Since the tribunal commenced in January 2005, there have been 52 requests to review stamp duty, land tax and payroll tax decisions, according to the Office of State Revenue.
Many of these have subsequently been settled by agreement (seven), conceded by the commissioner (six) or withdrawn by the taxpayer (nine).
Of the balance, only nine have been heard and had a decision handed down – seven have been in favour of the commissioner and two have been in favour of the taxpayer.
Mr Czislowski believes the state government should adopt the Commonwealth approach, where the treasury can indemnify taxpayers’ costs in appeals by the Australian Taxation Office.
Mr Czislowski said the state government should also consider implementing a test case funding program where matters required judicial clarification.
Norton & Smailes senior associate Johanne Thomas said she would welcome measures to make legal action more affordable.
“The problem is that the costs hit taxpayers like a brick wall and they don’t take matters any further,” she said.
Ms Thomas said taking matters to the SAT was less expensive than before the Supreme Court, but was still significant.
In a letter to Mr Czislowski, Treasurer Eric Ripper said he would be willing to investigate with the attorney-general changes to the Suitors’ Fund Act to cover taxpayer appeals.
