Anderson v Commissioner for Act Revenue (Administrative Review) - [2023] ACAT 9

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ANDERSON v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2023] ACAT 9

AT 32/2022
Catchwords: ADMINISTRATIVE REVIEW – land rent scheme – review of decision that applicant is not entitled to discount on land rent – Crown lease held by the company of which applicant is the sole director – applicant made loan to company for purchase of land – loan secured against the land – whether secured loan constitutes an “interest in land” for the purposes of the land rent scheme – the possibility of a previous application for discount by applicant –tribunal lacks jurisdiction in respect of any earlier application – effect of deregistration of company – decision under review confirmed

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 9
Corporations Act 2001 (Cth) ss 601AD, 601AE, 601AH
Land Rent Act 2008 ss 10, 11, 12, 33, 34
Land Rent Amendment Act 2013
Land Titles Act 1925 s 104

Subordinate

Legislation cited: ACT Civil and Administrative Procedures Rules 2020 r 8

List of
Texts/Papers cited: A J Bradbrook, S V MacCallum and A P Moore, Australian Real Property Law, 2007, Lawbook Co, 4^th ed
B J Edgeworth, C J Rossiter, M A Stone and P A O’Connor, Sackville and Neave: Australian Property Law, 2008, LexisNexis Butterworths, 8^th ed
Concise Australian Legal Dictionary, Butterworths, 2004, 3^rd ed

Tribunal: Senior Member M Hyman

Date of Orders: 10 February 2023
Date of Reasons for Decision: 10 February 2023

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 32/2022

BETWEEN:
SIMON ANDERSON
Applicant

AND:
COMMISSIONER FOR ACT REVENUE
Respondent

TRIBUNAL:Senior Member M Hyman

DATE:10 February 2023

ORDER

The Tribunal orders that:

The decision under review is confirmed.

………………………………..
Senior Member M Hyman

REASONS FOR DECISION

Introduction

This decision is about whether the applicant, Mr Simon Anderson, should receive a discount on his payments of land rent to the ACT Government. Mr Anderson holds the Crown lease on a block of land in the suburb of Wright. He applied for and was approved to pay land rent when he was granted the Crown lease. Under certain circumstances, a person may pay land rent at a discounted rate. Mr Anderson applied for such a discount, but his application was denied on 20 October 2021. Mr Anderson objected to that denial decision on 22 October 2021, and the ACT Revenue Office disallowed the objection on 22 April 2022. On 20 May 2022 Mr Anderson applied to the ACAT for review of the disallowance decision. Section 33 of the Land Rent Act 2008 (the LR Act) allows objections to the Commissioner of ACT Revenue (the Commissioner) where an application for discounted land rent has been rejected, and section 34 allows application to the ACAT for administrative review of objection decisions made under section 33. Under section 9 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act), a person may apply to the ACAT for review of a decision where the legislation governing the decision so authorises.
The matter came before me on 16 November 2022. The applicant was self-represented and appeared in person. The respondent was represented by Mr Brodie Buckland of Counsel, with Ms Shauna Ng of the ACT Government Solicitor and Nithya Sambasivam of the ACT Revenue Office, all appearing in person. Mr Anderson gave evidence and was cross-examined. No other witnesses were called. The documents provided by the parties comprised statutory declarations by Mr Anderson and Ms Rebecca Anderson, provided by the applicant, and the T-documents assembled by the respondent. At the hearing, Mr Anderson tendered extracted records of messages and memoranda from the ACT Revenue Office (Exhibit A1). The respondent tendered a historical title search for a block of land in the suburb of Wright (Exhibit R1) and a current title search for the same block (Exhibit R2).

Issues

The issues before me in this matter are:
(a)whether the applicant is entitled to a discount on land rent in the year in which he applied for that discount; and
(b)if so, whether he meets any of the criteria for the grant of a discount in the years preceding his application.

The legislative framework

The LR Act introduced a scheme whereby residents of the ACT could seek to avoid or reduce the capital cost associated with the grant of a Crown lease over land by applying for approval to pay land rent as an alternative. The scheme has been subject to moderately frequent legislative change, but a major change in its design came in 2013. Before 1 October 2013, the land rent scheme was open to any applicant, and in addition applicants who met certain criteria could pay land rent at a discount. After passage of the Land Rent Amendment Act 2013, which came into effect on 1 October 2013, applicants could only be approved to participate in the scheme if they met the criteria that would entitle them to the discounted rate of land rent.
The criteria for a person to be approved for the discounted rate include a test of the applicant’s income, a requirement that the lessee, or one of the lessees, reside in the property for which land rent is sought, and that the applicant not own other real property. Section 11 of the LR Act reads as follows:
(1)     The lessee of a land rent lease is eligible to pay discounted land rent only if—
(a)the lessee, or any of the lessees, does not own other real property; and
(b)the total income of the lessee, or the sum of the total incomes of all the lessees, does not exceed the income threshold amount for—
(i)the year in which the application for discounted land rent is made; and
(ii)the year before the application is made; and
(c)if a certificate of occupancy is issued for the lease—the lessee, or at least 1 of the lessees, lives on the parcel of land under the lease.
Note 1 The Minister may determine how the lessee’s total income is worked out (see s 9A).
Note 2 Income threshold amount is defined in the dictionary.
(2)     For subsection (1) (a), the former owner of a parcel of land is not taken to own other real property if the former owner—
(a)owns the parcel of land; but
(b)does not own other real property.
(3)     In this section:
certificate of occupancy—see the Building Act 2004, dictionary.
former owner—see section 7A (4).
The Land Rent Amendment Act 2013 inserted into the Dictionary for the LR Act a definition of ‘own’ to the effect that “own, in relation to real property, includes having a legal or beneficial interest in the property”. Before that amendment the Act was silent on the meaning of ‘own’.
Section 10 of the LR Act provides for a person seeking to pay the discounted land rent to make an application. Section 12 allows the Commissioner to make a decision on an application:
(1)     On receipt of an application under section 10 (Discount—application), the commissioner must—
(a)if the commissioner believes on reasonable grounds that the applicant is eligible to pay discounted land rent—grant the discount; or
(b)in any other case—refuse to grant the discount.
(2)     The commissioner must give the applicant written notice of—
(a)the decision under subsection (1); and
(b)if the discount is refused—the reasons for the refusal.
(3)     If the commissioner grants the discount, the discount applies from—
(a)if the application for the discount was made before the grant of the lease—the day the lease is granted; or
(b)in any other case—
(i)the day on which the application for the discount was received by the commissioner; or
(ii)any other day, including a day before the application was received, which the commissioner considers appropriate.

The facts of the matter

Most of the facts in this matter are not in dispute and can be ascertained from the documentation that has been made available. Mr Anderson was granted a Crown lease over a block of land in Wright in Section 12 of that suburb (the Section 12 block) in 2012. The grant is dated 27 March 2012, lists the applicant as the sole proprietor and the purpose as “single dwelling housing”.[1] The lease was approved as a land rent lease in 2012.[2]
[1] T-documents, pages 22-23
[2] No documentation confirming the approval appears to be in evidence, but it is common ground that the approval was given
The applicant maintains that he applied for the discounted rate of land rent at the same time as he applied for approval of the Section 12 block as a land rent lease. He says that although his application for the land rent lease was approved, his application for the discounted rate was not processed and he has never received any response from the ACT Government. Over an extended period he appears to have agitated for a response, without success; he tendered a tabulation of records that he says illustrate his continued attempts to have the matter resolved,[3] and attempts of that kind are also the main focus of his witness statement. During this period Mr Anderson held back from paying land rent, on the basis that the rate at which he should pay was undecided; he now owes substantial arrears of land rent.[4]
[3] Exhibit A1
[4] T-documents, pages 30-37
After several years of what was to this point a vain struggle, the ACT Revenue Office told Mr Anderson that he would need to make a new application for the discounted land rent, and he did so on 6 July 2021.[5] That application was rejected on 20 October 2021.[6] Mr Anderson objected to that ruling on 22 October 2021[7] and the ACT Revenue Office disallowed the objection on 22 April 2022.[8] Mr Anderson applied to this Tribunal on 20 May 2022 seeking review of the disallowance of his objection.
[5] T-documents, pages 24-29
[6] T-documents, page 51
[7] T-documents, page 52
[8] T-documents, pages 67-72
Mr Anderson is Company Secretary and the sole Director of a company, Andara Homes (ACT) Pty Ltd (Andara Homes).[9] The sole shareholder in Andara Homes is another company, Rebecca Anderson T2 Pty Ltd.[10] Andara Homes is the registered proprietor of a separate and distinct parcel of land, also in Wright, in Section 42 of that suburb (the Section 42 block).[11] Mr Anderson lodged a caveat for the Section 42 block on 20 December 2021.[12] In oral evidence Mr Anderson said that he had lodged the caveat because he had made a loan to Andara Homes to enable purchase of the land; and under cross-examination he acknowledged that the loan to Andara Homes was secured against the land. He also said that the Section 42 block had been recently sold (he did not give a precise date but suggested that the sale had occurred in about October 2022).

The arguments of the parties

[9] T-documents, pages 58-59

[10] T-documents, page 59

[11] T-documents, pages 60-63

[12] Exhibit R1

As set out above, there are three criteria for eligibility for discounted land rent, which might be summarised as having no other interests in land, meeting an income test, and meeting a residence test. Only the first of these was at issue in these proceedings. It does not appear to be in dispute that for the tax year in which he applied, the applicant met the second and third criteria. If his eligibility for receiving the discount in earlier years were to be assessed, he would need to establish that in each of the preceding tax years he met the second and third criteria.
With the exception of the applicant’s claim that he applied for the discounted rate of land rent in 2012, to which I return below, the facts presented above are not disputed. Mr Anderson says that his personal interests in land are limited to the Section 12 block, and that the interests of Andara Homes are distinct and separate from his personal interests. He therefore meets the criterion that he does not own other land. The respondent says that the loan that Mr Anderson made in a personal capacity to Andara Homes, a loan that is secured against the Section 42 block, constitutes an equitable charge against the land. That falls within the “legal or beneficial interest” in land that is included in the definition of “own”, and Mr Anderson is therefore excluded from the discounted rate.

Consideration

During the hearing Mr Anderson raised two procedural objections, and although both were resolved at the time, it is perhaps useful to comment on them. First, when Mr Buckland proposed to tender the documents received into evidence as Exhibits R1 and R2, Mr Anderson objected strenuously on the basis that he was being compelled to respond to new evidence without proper prior notice.
From time to time new evidence comes forward at a hearing that puts one of the parties at a disadvantage because the information is new. The usual course, supposing that the evidence is relevant, is the grant of an adjournment to enable the disadvantaged party to respond, including with their own evidence. But this was not such an occasion; the evidence was obtained by the search of public information registers and the information that the search revealed was information about the Section 42 block of which Mr Anderson must have been aware. It seemed to me that Mr Anderson’s objection was not because he was caught unawares, but rather because he was hoping that certain information might not come to light.
Similarly, during the hearing I asked the parties, in the way commonly done at the start of a hearing, about appearances of witnesses and the like. Mr Anderson said he would give evidence, but that the sole focus of his evidence would be to affirm the truth of his witness statement. Mr Buckland then said that he would not seek to cross-examine if that was the evidence that would be coming forward. In the event, Mr Anderson volunteered some additional evidence to explain why he had lodged a caveat over the Section 42 block, and then responded to a few questions that I asked, seeking clarification on some points. Mr Buckland then chose to cross-examine. Mr Anderson objected strenuously, once again, claiming that Mr Buckland was not acting consistently with his earlier statement that he would not cross-examine.
I allowed Mr Buckland to continue cross-examination. In the first place, I did not think that he had made some kind of enforceable undertaking when he said he would not cross‑examine; rather, he was providing his expectation of how matters might proceed, and nothing more. Second, his statement was clearly contingent on Mr Anderson’s statement that his evidence would be limited to an endorsement of his witness statement; when Mr Anderson departed from that course it was plainly open to Mr Buckland to depart equally from his foreshadowed course, and to test Mr Anderson’s additional and new evidence through cross-examination.
I rehearse these minor procedural points because they illustrate a point of broader importance: in administrative review the search for the correct or preferable decision relies on the parties being thorough and complete in providing information, subject to the usual tests of relevance and the protections afforded by privilege and the like. Rule 8 of the ACT Civil and Administrative Procedures Rules 2020 requires parties to cooperate with the tribunal to give effect to the objects and principles of the Act. That implies that a party will make relevant information available to the tribunal even if it is unhelpful to their case.
Turning then to the issues to be decided, the tribunal’s jurisdiction in this matter is limited to the scope of the decision under review. Mr Anderson is adamant that he made an earlier land rent application to which he has received no response; but regardless of the extent to which he might be able to substantiate that assertion, I have no jurisdiction to deal with any earlier matter, as my jurisdiction is determined by the application and the decision for which review is sought.
It is perhaps worth pointing out that the T-documents do not include Mr Anderson’s application in 2012 for a land rent lease, nor the approval of that application. His argument that his application for a discount may have gone astray is thus not without some element of the possible. But the evidence he has brought forward would not allow me to make a finding that he had in fact made an application for discounted land rent in 2012; it is possible, even plausible, that he did so, but the evidence is insufficient to make a finding to that effect. And even if I were able to make such a finding, my jurisdiction does not extend to taking any action in relation to such an application; the scope of this matter extends only to the review of the decision to disallow Mr Anderson’s objection in respect of his 2021 application.
That review, if successful, would open the door to the grant of a discount for earlier years, in that section 13(3)(b)(ii) of the LR Act allows the Commissioner to apply the discount from a date earlier than the application. But I could only do that, standing in the Commissioner’s shoes, if I were first to grant the discount applied for in this review; that, in turn, depends on whether the loan by Mr Anderson to Andara Homes constitutes “owning” land – including having a legal or beneficial interest in land.
In the law of real property the term ‘own’ is rarely used. A major reason is that there are many and various, rights over and interests in land, of varying degrees of possession and contingency. The concept of property is sometimes described as a “bundle of rights”, one of the points being that there may be more than one right to any piece of property, and different rights may be held by different people. Thus a person may hold title to a single parcel of land in fee simple (or in the ACT as a Crown lease), but other people or institutions may hold other interests in the same parcel – a neighbouring property may have an easement, the land may be under lease to a tenant, and a financial institution may have issued a mortgage, to take just three examples. All of these are interests in the land, and they can happily co-exist. In those circumstances, it is no simple matter to say who “owns” the land or what “owning” the land might mean. And the law in England and subsequently in Australia has tended to focus on possession of land rather than on some broader question of ownership, so that in a dispute over land the question is likely to be which of the parties has better title rather than whether either party has title that is good against the whole world.[13]
[13] See A J Bradbrook, S V MacCallum and A P Moore, Australian Real Property Law, 2007, Lawbook Co, 4^th ed, [1.185] – [1.245]; B J Edgeworth, C J Rossiter, M A Stone and P A O’Connor, Sackville and Neave: Australian Property Law, 2008, LexisNexis Butterworths, 8^th ed, [1.5] – [1.33]
Some of this complexity is well understood in lay circles. In the course of the hearing the applicant said at one point “just because a bank lends money on land doesn’t mean that the bank owns the land”, but even a person unfamiliar with property law is likely to understand that a mortgagee has real and substantial interests in the land under mortgage, for example through rights of sale or foreclosure. These rights are contingent, and do not come to be exercised unless the mortgagor defaults on the loan, but they are substantial interests nonetheless. These considerations are not obscure elements of the law of which only experts would be aware; in a general sense they are well known and widely understood aspects of participation in the market for real property. It is not unusual for a person who has bought a property to say to others that they share ownership of the property with the financial institution that provided the mortgage (“the bank owns half of it”).
The phrase “interest in land”, while undefined in the LR Act, has an established legal meaning: “any legal or equitable estate in land, or restriction on the use of land, or any other right, charge, power or privilege over or in connection with land”[14] (technically, an “interest” may be distinguished from an “estate” in land, but that distinction is of no relevance here). I take the definitional phrase from the LR Act, “includes any legal or beneficial interest in land”, to coincide with the definition quoted above (in the context of land, a beneficial interest equates to an equitable interest). The clear intention is to capture any kind of interest in land as an excluding factor in relation to the land rent discount.
[14] Concise Australian Legal Dictionary, Butterworths, 2004, 3^rd ed

The question then is whether the loan to Andara Homes, secured against the Section 42 block, constitutes an interest in land. If it were a legal interest it would appear on the register and have come to light through a title search. That the loan operates as an equitable instrument is confirmed by the appearance in the title searches of the caveat taken by Mr Anderson to protect his loan.[15] A caveat is lodged in order to protect an unregistered interest in land. Under section 104(1) of the Land Titles Act 1925, a caveat may only be lodged by a person transferring a property to a trustee, or by a person claiming an interest in land (or that person’s legal practitioner or agent). Under section 104(6) of the same Act the person lodging the caveat must identify the interest claimed. In the application seeking lodgement of the caveat, Mr Anderson identified his interest as “Caveatable interest by consent of the proprietor arising from a debt or loan to purchase the land and relevant expenses or costs”.[16]
[15] Exhibits R1, R2
[16] T-documents, page 60
It seems inescapable, based on the above, that Mr Anderson, in his personal capacity, and not as Director of Andara Homes, has acquired an interest in the Section 42 block by securing a loan against it. Mr Buckland identified the interest as an equitable charge. A charge over land gives the chargee rights to take possession of, or receive payment out of the proceeds of sale of, the charged property. There are some technical distinctions between an equitable charge and an equitable mortgage, a mortgage being defined in the Land Titles Act 1925 as a charge on land created merely for securing a debt. But whether Mr Anderson’s loan to Andara Homes constitutes an equitable charge or an equitable mortgage over the Section 42 block is of no consequence for present purposes; either way, Mr Anderson holds an interest in land other than the parcel on which he is seeking discounted land rent, and is therefore not eligible for the discount.

Other considerations

Mr Anderson has been strident in his assertion that he made an application for land rent discount in 2012. Because no application and approval for land rent has come forward from the Commissioner for inclusion in the T-documents, it seems possible, as noted earlier, that some papers have gone astray. But, also as noted earlier, the question is beyond my jurisdiction; it is a matter for the ACT Revenue Office.
Mr Anderson also raised questions about the effect of deregistration of Andara Homes. The evidence does not disclose the detail of what has occurred, and it is not clear to me whether after the deregistration the same company was subsequently reinstated at a later time, or whether a separate company with a similar name was created to take on the role intended for the earlier company.
When a company is deregistered, its property vests in the Australian Securities and Investment Commission (ASIC).[17] ASIC then has the rights and liabilities of the deregistered company with respect to its property, and can deal with the property as it sees fit.[18] If ASIC reinstates the company, the reinstated company continues on as if it had never been deregistered, and the property of the deregistered company revests in the reinstated company, and is subject to any claims on or interests in the property.[19]
[17] Corporations Act 2001 (Cth), section 601AD
[18] Corporations Act 2001 (Cth), section 601AE(2)
[19] Corporations Act 2001 (Cth), section 601AH(5)
Whatever course was followed in this particular case – and Mr Anderson has not put on any evidence to establish what that course might have been – it does not disturb the conclusion I have reached that Mr Anderson is not eligible for a discount on land rent in respect of the Section 12 block. The ASIC search undertaken by the respondent in the period leading up to the hearing[20] lists four different and related company names, with a different ACN for each: Andara Homes Pty Ltd; Andara Homes (ACT) Pty Ltd; Andara Homes (Canberra) Pty Ltd; and A. A. and R. Homes Pty Ltd. The first, second and fourth are listed as deregistered, and the third as under external administration. But none of the details of what might be happening to these companies changes the fundamental picture that is established by the documentary and oral evidence – Mr Anderson made a loan to the company (and it does not matter which one) to buy the Section 42 block and it is his evidence that that loan is secured against the land. That means he has an equitable interest in the Section 42 block, and is not entitled to the discount on land rent in respect of the Section 12 block.
[20] T-documents, page 64
For the reasons given above, the Tribunal orders that the decision under review is confirmed.

………………………………..
Senior Member M Hyman

Date(s) of hearing:	16 November 2022
Applicant:	In person
Counsel for the Respondent:	Mr Brodie Buckland
Solicitors for the Respondent:	Ms Shauna Ng, ACT Government Solicitor