Abbey Beach Resort Management Ltd v Water Corporation Ltd
[2007] WASC 268
•20 NOVEMBER 2007
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ABBEY BEACH RESORT MANAGEMENT LTD -v- WATER CORPORATION LTD [2007] WASC 268
CORAM: NEWNES J
HEARD: 18 SEPTEMBER 2007
DELIVERED : 20 NOVEMBER 2007
FILE NO/S: SJA 1018 of 2007
BETWEEN: ABBEY BEACH RESORT MANAGEMENT LTD
Appellant
AND
WATER CORPORATION LTD
Respondent
ON APPEAL FROM:
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram :MR P McNAB (MEMBER)
Citation :[2006] WASAT 231
Catchwords:
Appeal - State Administrative Tribunal - Rating - Sewerage charges - Classification of land - Holiday resort - Managed investment scheme - Owners of strata units limited in own occupation of strata unit - Strata units let to public for short stay accommodation - Whether strata units used as 'residence' of owner or occupier - Whether used for commercial or business purposes - Turns on own facts
Legislation:
Country Towns Sewerage Act 1948 (WA)
Managed Investments Act 1998 (Cth)
Water Agencies (Charges) Bylaws 1987 (WA)
Water Agencies (Powers) Act 1984 (WA)
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant: Ms K A Vernon
Respondent: Mr M E Herron
Solicitors:
Appellant: Metaxas & Hager
Respondent: Corinne Old
Case(s) referred to in judgment(s):
Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1
Hafza v Director‑General of Social Security (1985) 60 ALR 674
Marana Holdings Pty Ltd v Commissioner of Taxation (2004) 141 FCR 299
McGraw‑Hinds (Aust) Pty Ltd v Smith (1978) 144 CLR 633
Murphy v Farmer (1988) 165 CLR 19
NEWNES J: This is an appeal against the decision of the State Administrative Tribunal (the Tribunal) that the various strata lots which make up and are known as the 'Abbey Beach Resort' (the Resort) at Busselton were correctly classified by the respondent for the purposes of sewerage charges as 'country commercial/industrial property' under the relevant by‑laws.
The facts
The appellant is the manager of 193 strata lots which together are known as the Resort. The 193 strata lots are made up of 185 accommodation units and eight amenities units, the latter units being utilised as an office, outdoor amenities, café and other amenities. The strata units are each privately owned and the owners are the members of the Abbey Beach Resort Scheme (Scheme). The Scheme is a registered managed investment scheme pursuant to the Managed Investments Act 1998 (Cth). The appellant is the Responsible Entity of the Scheme pursuant to the Managed Investments Act.
The land is zoned 'tourist' under the relevant town planning scheme. Pursuant to that scheme, no person is entitled to occupy any of the strata lots in the Resort for more than three months in any 12‑month period. As the appellant noted in its statement of facts and contentions filed in the proceedings before the Tribunal, the tourist zoning is intended to ensure that parts of the coastline are retained for short‑term tenancies by visitors to the area and that the coastal land is not entirely taken up by permanent residences and private holiday homes.
It is unnecessary, for present purposes, to describe in any detail the arrangements which exist between the members of the Scheme and the appellant. Suffice it to say that, under those arrangements, each member of the Scheme leases their unit to the appellant which then lets the unit to the public in the periods in which the owner, or any guest of the owner, is not using the unit. The rental income derived from letting the units is the subject of a pooled rental income scheme and each member of the Scheme is entitled to share in the pooled income in respect of any period in which their unit is available for rental by the public.
The Resort is marketed by the appellant as a holiday resort available to members of the public for short‑term stays for conventions, functions, meetings and holidays and it appears that that is consistent with the information provided to the owners prior to their acquisition of units in the Resort.
The respondent issues annual sewer service accounts to the individual strata lot owners and a separate sewer volume charge account to the appellant. The annual service charges are based upon the number of fixtures (toilets or urinals) on each individual lot. The sewer volume charge is based on the total volume of effluent discharged from the Resort. The charges were previously based on the gross rental value of each unit and charged to the unit holders.
The relevant statutory framework
The Resort is situated on land within the Busselton Sewerage Area, under the Country Towns Sewerage Act 1948 (WA), and is therefore subject to charges relating to the provision of sewerage services to country areas by the respondent under the Water Agencies (Charges) By‑laws 1987 (WA). The by‑laws are made under s 34(1) of the Water Agencies (Powers) Act 1984 (WA).
Section 41 of the Water Agencies (Powers) Act provides that by‑laws made under s 34(1) of that Act may provide for the payment to the respondent of charges relating to the provision by the respondent of water services. Water services are defined in s 3 of that Act to include sewerage and drainage. Section 41(1)(e) provides that the by‑laws may, for the purposes of applying provisions for differential rates or charges, prescribe classes of land according to the use to which the land is put.
The Water Agencies (Charges) By‑laws contains five parts; pt 1 deals with general matters, and the remaining parts concern the manner of charging for services provided by the respondent, pt 2 dealing with water supply, pt 3 dealing with sewerage, pt 4 dealing with drainage and pt 5 dealing with irrigation.
By‑law 23 is contained in pt 3, dealing with sewerage charges. By‑law 23 prescribes the basis upon which land may be classified by the respondent in a country sewerage area. It provides, so far as relevant:
(2)For the purposes of this Part, land, not being land mentioned in sub‑bylaw (1), may, irrespective of any other classification under these by‑laws, be classified by the [respondent] as follows -
(a)Residential, if the land is used wholly or primarily for the purpose of providing the owner or occupier of the land with a residence for himself, his family or servants, or any of them;
(b)country Commercial/Industrial property, if the land is in a country sewerage area and is used for business, professional or commercial purposes or for manufacturing or processing;
(c)Vacant Land, if there is no building on the land.
It was not in issue that by‑law 23(1) has no application to the strata lots in question.
It is necessary for an understanding of the reference in by‑law 23(2) to 'any other classification' of the land under the by‑laws to note that in each of pt 2, pt 3, and pt 4 of the by‑laws, there is a different system for the classification of land for the purposes of charges for water supply, sewerage and drainage respectively. The classification system in relation to water supply in pt 2 contains 16 separate categories. It includes a category of 'residential' but that is defined in terms which are somewhat different to the category of 'residential' in by‑law 23(2). There are no categories of 'country Commercial/Industrial' or 'vacant land'. The classification system of land for drainage purposes in pt 4 contains only two categories - 'residential' and 'vacant land', both of which are defined in the same terms as in by‑law 23(2).
It is clear, therefore, that the same land may be classified differently for the purposes of water, sewerage and drainage charges respectively.
In by‑law 2, in pt 1 of the by‑laws, 'residence' is defined to mean 'a private dwelling house, home unit, or flat, and includes any yard, garden, outhouse, or appurtenance belonging thereto or usually enjoyed therewith'.
The Tribunal's decision
The question before the Tribunal was whether the respondent had correctly classified the strata units in the Resort as 'country Commercial/Industrial property' within the meaning of by‑law 23. The appellant, which appeared without objection before the Tribunal as the representative of the owners, argued that the strata units were properly classified as 'residential'.
The Tribunal found that the Resort was conducted as a commercial operation or business. The Tribunal concluded that this necessarily meant that the land was used for business or commercial purposes within the meaning of by‑law 23(b). The Tribunal considered that the essential facts were first, the land was used as a managed investment and made a return to scheme members; secondly, it was used in the sense that it was advertised and marketed as a resort, making it indistinguishable from its commercial competitors; and thirdly, the Resort was carrying on as a business undertaking trading for profit in the commercial hotel and resort accommodation market in Busselton and the land was used for that purpose.
The Tribunal found that the fact that otherwise unconnected individuals, by way of their unit entitlement, were the ultimate beneficiaries of the syndicated arrangements did not mean that they were to be regarded as individual landlords, nor did the occasional personal use of their unit destroy the characterisation of the use of the land as being a commercial business.
The Tribunal rejected the appellant's contention that a strata unit could be regarded as the residence of each of the occupants from time to time of it. It concluded that 'residence' in the by‑law meant an intention to treat a place as a settled or usual place of abode. In the present case, there could be no suggestion that any of the owners or occupiers intended to use a unit as their settled or usual place of abode.
The grounds of appeal
The grounds of appeal are as follows:
1.that the Tribunal erred in law in determining the application on the basis of the position of the appellant rather than by reference to each of the individual owners of the 185 strata lots;
2.the Tribunal erred in law in concluding that the respondent had no option but to classify each of the units as either residential or country commercial/industrial property when the provisions of bylaw 23(2) … was facilitatory not mandatory in its nature by use of the word 'may';
3.the Tribunal erred in law in failing to distinguish between the use to which land was put, and the operation, from the standpoint of each of the owners, made it a business operation. That an investment property is rented to tenants in occupation may make the property a business for taxation and other reasons but the use to which it is put in planning terms which is directly applicable to the determination of sewerage charges remains residential;
4.the Tribunal erred in law in identifying the issue for determination as whether the units and each of them could be classified as residential when the issue properly before the Tribunal was whether the classification adopted by the respondent as country commercial/industrial property was correct and as a result the Tribunal wrongly imposed a burden upon the appellant which in the context of the application it did not bear;
5.the Tribunal further erred in law in concluding that the occupancy on a short term or short stay basis by persons who used the units for no other purpose but to stay there made the use of that unit and each of the 185 units as being used for business purposes;
6.the Tribunal erred in law in failing in considering whether the classification as country commercial/industrial property was correct, to consider or consider adequately the whole of the expression 'used for business, professional or commercial purpose or for manufacturing or processing'.
The appellant's submissions
It was submitted on behalf of the appellant that the Tribunal was in error in considering the matter on the basis that the land in question was the entire resort and not each strata lot. None of the land in question was owned by the appellant, which was a party to the proceeding before the Tribunal only as a representative of the individual strata lot owners. The Tribunal had therefore erred in considering the use to which the Resort was put, rather than the use to which each individual strata lot was put.
Counsel argued that when the position of the individual strata lots is considered, each strata lot is appropriately categorised as a residence for the occupant of it for the duration of that occupant's time in the unit. It was an error to conclude that by‑law 23 required that the unit be the occupant's 'settled or usual place of abode'. Nor was it relevant that the land generated taxable income, and the fact that the units were let for holiday accommodation for commercial gain did not mean that the land use ceased to be residential.
It was submitted that the Tribunal had erred in concluding that the units were used for a commercial purpose on the basis that the Resort was a managed investment scheme and the units were let to short‑stay visitors. Whilst the Resort and the proprietor of each unit may be carrying on a business, that does not mean the land in question is used for commercial or business purposes within the meaning of by‑law 23(b). In determining whether land is used for business or commercial purposes, regard must be had to the nature of the actual activities conducted on the land. Each of the strata units is used simply to provide accommodation for the occupants from time to time - that is, in essence, for domestic purposes - not for the carrying on of any commercial or business activities in or from the unit. Where land is so used to provide accommodation - of whatever duration - it cannot be said to be used for business or commercial purposes simply because it is provided as accommodation for reward. It is more properly described, in the context of by‑law 23, as being used as a residence for each of its occupants.
The use of the strata units is therefore 'residential' within the meaning of the by‑law.
The respondent's submissions
The respondent argued that 'residence' in by‑law 23 should be given its normal meaning of usual or settled place of abode.
None of the strata units was, nor could it be, used by the owner or an occupier as their usual place of abode. A person could only occupy a unit for a maximum of three months in any 12‑month period and when it was not occupied by the owner, or guests of the owner, the unit was used for commercial purposes by being let to the public for short‑term holiday accommodation.
Nor was a strata unit the 'residence' of any member of the public who occupied it for a short‑term stay for a holiday, conference or suchlike. It was submitted that there was a distinction between a person leasing a property to a tenant for the tenant to use wholly or primarily to reside in and a property being let for short‑term holiday accommodation. In the former, the property provides a tenant with their usual or settled place of abode, whereas in the latter, the occupier retains a residence elsewhere and stays at the Resort as a guest for a short period of time.
None of the strata units, therefore, was used wholly or primarily as a residence. Neither the owner, nor an occupier who is not an owner, uses the unit wholly or primarily for the purpose of providing him or herself with a residence. The strata units were properly classified as 'Commercial/Industrial'.
The construction of the by-law
The question in the appeal is whether the Tribunal erred in concluding that the strata units were not used wholly or primarily for the purpose of providing the owner or occupier (or their family or employees) with a 'residence' within the meaning of by‑law 23(2)(a), and were properly classified by the respondent as 'country commercial/industrial property'.
It was not in issue that none of the strata units was, nor could they be, used by the owner or an occupier as their usual place of abode. The zoning of the land precluded that. The question of whether the strata units fell within by‑law 23(2)(a) therefore turned essentially on whether, as contended by the respondent, on its proper construction the by‑law required that, in order to be classified as 'residential', the land must be used as the permanent or usual place of abode of the owner or occupier.
In the Shorter Oxford Dictionary, 'residence' is defined, relevantly, as 'the circumstances or fact of having one's permanent or usual abode in or at a certain place … the place where a person resides; the abode of a person'.
'Reside' is defined, relevantly, to mean 'dwell permanently or for a considerable time, have one's regular home in or at a particular place'.
In Marana Holdings Pty Ltd v Commissioner of Taxation (2004) 141 FCR 299, the Full Federal Court, having reviewed the meaning of 'residential' in the Oxford English Dictionary, the Shorter Oxford Dictionary and the Macquarie Dictionary, said:
All three references stress the relationship between the word 'residential' and the word 'residence', suggesting the aspect of permanent or long‑term occupation to which we have previously referred. They recognise use of the expression in connection with [residential hotels] but generally suggest that such usage describes an hotel that caters for long‑term residents. We accept that it is not uncommon to speak of long‑term residents in an hotel, but when one speaks of persons who stay for shorter terms, the more common usage is to describe them as 'guests' (305 ‑ 306).
In Hafza v Director‑General of Social Security (1985) 60 ALR 674, Wilcox J referred to the judicial consideration of the meaning of 'residence' as follows:
There is a plethora of decisions, arising in various contexts but predominantly matrimonial causes and revenue cases, relating to the legal concept of residence. As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Ltd v FC of T (1941) 64 CLR 241 at 249, by Williams J: 'The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode.'
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place, even involuntarily (see Inland Revenue Commissioners v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VLR 383) a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 together with an intention to return to that place and an attitude that that place remains 'home' (see Norman v Norman (1969) 16 FLR 231 at 236). It is important to observe, firstly, that a person may simultaneously be a resident in more than one place - see the facts of Lysaght and the reference by Williams J to 'a home or homes' - and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as 'home', a change of intention may be decisive of the question whether residence in a particular place has been maintained (680 ‑ 681).
It is, of course, trite law that in determining the meaning of a word regard must be had to its context and that a meaning given to a word in one statutory context must be treated with great caution when sought to be applied to a different context.
Counsel for the appellant submitted that for the purposes of construing by‑law 23(2)(a), it was important to have regard to by‑law 13(1) where the same words are used. By‑law 13 is not concerned with sewerage but with water supply. By‑law 13, so far as relevant, provides:
(1)For the purposes of this Division, land may, irrespective of any other classification under these by‑laws, be classified by the [respondent] as follows -
(a)residential, if the land -
(i)is used wholly or primarily for the purpose of providing the owner or occupier of the land with a residence for himself, his family or servants, or any of them; and
(ii)in the opinion of the [respondent] is not used in whole or in part for the purpose of providing holiday accommodation;
(b)commercial residential, if the land, although not used wholly or primarily for the purpose mentioned in paragraph (a), is used for the purpose while also being used for the purpose of a shop, workshop, office, bakery, surgery or another business purpose;
…
(d)non‑residential, if the land is used for business, professional, holiday accommodation, manufacturing, processing or other commercial processes that are not the subject of another class prescribed in this by‑law;
(e)vacant land, if there is no building on the land and it is not appropriate to otherwise classify the land under this by‑law;
…
(n)…
In the by‑laws, 'holiday accommodation' is defined to mean:
[A]ccommodation which, at any time during the year for which a charge is to be assessed -
(a)is held out by the owner or occupier of the land on which the accommodation is situated as being available; or
(b)is made available by that owner or occupier,
for occupation for holiday purposes by persons other than that owner or occupier unless, in the opinion of the [respondent], the accommodation is not so held out or made available substantially by way of trade or business or for the purpose of any trade or business.
On behalf of the appellant it was submitted, in effect, that the inclusion of by‑law 13(1)(a)(ii) was explicable only on the basis that otherwise holiday accommodation, as defined, would fall within by‑law 13(1)(a)(i). In other words, the terms of by‑law 13(1)(a)(i) - which is in identical terms to by‑law 23(2)(a) - encompass holiday accommodation, so that by‑law 13(1)(a)(ii) is necessary to exclude holiday accommodation from the definition of 'residential' in by‑law 13. There is no such exclusion in by‑law 23(2)(a).
Counsel referred to the rule of construction that where identical words are used in the same piece of legislation they should be given the same meaning, unless it clearly appeared that they were not intended to bear the same meaning. It was submitted that no such contrary intention appeared here. Accordingly, it must have been intended that holiday accommodation was within the category of 'residential' under by‑law 23(2)(a), there being in respect of by‑law 23(2)(a) no exclusion comparable to by‑law 13(1)(a)(ii) or any other relevant exclusion.
I do not, however, consider that any real assistance is to be gained from that rule of construction. While there is a presumption that where the same words are used on more than one occasion in a section of legislation they are intended to have the same meaning in each case, it is not a presumption of very much weight and it readily yields to the context: Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1, 10 (Gibbs CJ), 15 (Mason J). See also McGraw‑Hinds (Aust) Pty Ltd v Smith (1978) 144 CLR 633, 643 and Murphy v Farmer (1988) 165 CLR 19, 26 ‑ 28 (Deane, Dawson & Gaudron JJ).
In the present case, the context of the classification of 'residential' in by‑law 13 is different to that which occurs in by‑law 23(2). The number and nature of the various classifications of property included in by‑law 13 are quite different to those contained in by‑law 23(2). I do not, therefore, consider that any significant weight can be attributed to that assumption of construction.
The question, in my view, is whether any meaning other than the ordinary meaning of residence, with its connotations of permanent, or at least long term commitment to, dwelling in the place, was intended in by‑law 23(2)(a).
In my view, it would be an unusual choice of language to describe a place let to a person for a short‑term stay, such as a holiday, conference or meeting, as that person's 'residence'. As the Full Federal Court suggested in Marana Holdings Pty Ltd v Commissioner of Taxation, a person in short‑stay or temporary accommodation would not ordinarily be described as a resident, but rather as a 'guest', and the place would not normally be described as their residence.
It does not seem to me that there is any reason to give to the word 'residence' in by‑law 23(2) anything other than its ordinary meaning. The reference to the land being 'used wholly or primarily for the purpose of providing the owner or occupier … with a residence' does not seem to me to envisage each of a series of short stay holiday‑makers or function attendees as being the 'occupier', but rather to the land being used as a 'residence' in the ordinary sense of that word.
Construing the by‑law in that way does not appear to lead to any apparently unintended or anomalous results. On the contrary, it is readily explicable that in respect of sewerage charges a different approach might be taken to a property that is used principally as the permanent or usual abode of the owner or occupier, as opposed to a property that is intended to be let to the public for reward as short‑term accommodation for a substantial proportion of the year. In my view, in the present context, it also involves no distortion of the language of by‑law 23(2)(b) to describe the strata units as being used for commercial or business purposes.
I consider, albeit for somewhat different reasons, that the Tribunal was not in error in concluding that the units were not used as 'residential' land within the meaning of by‑law 23(2)(a) and that the units were properly classified by the respondent as 'country Commercial/Industrial property' under by‑law 23(2)(b).
I would dismiss the appeal.
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