| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : LAND TAX ASSESSMENT ACT 2002 (WA) CITATION : AVELAND PTY LTD and COMMISSIONER OF STATE REVENUE [2013] WASAT 180 MEMBER : JUDGE T SHARP (DEPUTY PRESIDENT) HEARD : 7 AUGUST 2013 DELIVERED : 12 NOVEMBER 2013 FILE NO/S : DR 149 of 2013 BETWEEN : AVELAND PTY LTD Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords: Land tax - Meaning of 'land' - Use of land as at midnight 30 June in relevant year - Land used for retirement village - Retirement village scheme - Total exemption - Partial exemption Legislation: Building Act 2011 (WA)
City of Swan Local Planning Scheme No 17
Home Building Contracts Act 1991 (WA)
Interpretation Act 1984 (WA), s 19
Land Tax Act 1958 (Vic), s 9, s 9(2AB)
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Land Tax Assessment Act 1976 (WA), s 21, Pt I cl 7B
Land Tax Assessment Act 2002 (WA), s 5, s 7(1), s 11, s 13, s 17, s 18, s 19, s 20, s 21, s 21(1), s 21(1)(a), s 23, s 30, s 34, s 37, s 38A, s 38(3), s 39, s 39(a), s 39(b), s 41, s 45A, cl, 1, cl 2, cl 2.3, Pt III
Land Tax Assessment Amendment Bill 1994 (WA)
Residential Design Codes of Western Australia 2010
Retirement Villages Act 1992 (WA), s 3, s 3(1), s 15
State Administrative Tribunal Act 2004 (WA),s 29(1)
Taxation Administration Act 2003 (WA), s 34, s 40(1)
Transfer of Land Act 1893 (WA), s 34, s 70A, cl 1 Result: The Commissioner's assessment of land tax is set aside
The matter is sent back to the Commissioner for assessment in accordance with the correct and preferable decision stated by the Tribunal in the reasons for its decision to set aside the Commissioner's assessment
Summary of Tribunal's decision: The owners of a piece of land at No 21 Flecker Promenade, Aveley are developing a retirement village on that land. On 30 June 2012, six residential units were completed and occupied under a retirement village scheme, with the proposed remaining 74 units still to be constructed. The Commissioner of State Revenue issued an assessment for land tax for the assessment year to 30 June 2013, but deducted 15% of the land tax on the basis that a proportion of the land was being used for an exempt purpose. The landowner objected, arguing that the land was being used entirely for a retirement village or, alternatively, that part of the land was being used as a retirement village and the Land Tax Assessment Act 2002 (WA) did not require that the whole of the land be so used.
The Commissioner dismissed the objection and the land owner applied to the Tribunal for a review of that decision.
The Tribunal considered that even though only a part of the land was being used for a retirement village, that was sufficient for the exemption to apply to the whole of the land. The Tribunal upheld the landowner's objection and ordered the Commissioner to issue a new assessment so that the land was, as at 30 June 2012, exempt from land tax.
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Category: B
Representation: Counsel:
Applicant : Dr E Heenan
Respondent : Ms R Panetta
Solicitors:
Applicant : Gary Rodgers Solicitors
Respondent : State Solicitor's Office
Case(s) referred to in decision(s):
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] 239 CLR 27
Applewood Residential Developments Pty Ltd v Commissioner of State Revenue [2006] VSCA 207
Brightwater Care Group (Inc) and Commissioner of State Revenue [2006] WASAT 276
Commissioner of State Revenue v De Campo [2007] WASCA 136
Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16
Council of the City of Newcastle v Royal Newcastle Hospital (1957) CLR 493
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55
R v Rintel (1991) 3 WAR 527
Retirement Care Australia (Hollywood) Pty Ltd v Commissioner for Consumer Protection [2013] WASC 219
Tamas v Victorian Civil and Administrative Tribunal and Others [2003] 9 VSCA 113
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 The applicant is the registered proprietor of land upon which, on 30 June 2012, six residential units had been constructed and were occupied under residence contracts within the meaning of the Retirement Villages Act 1992 (WA) (RV Act). The applicant's intention was, and continues to be, for further residential units to be built on the balance of the land, so that ultimately there would be a retirement village on the land comprising 80 residential units and a community centre. On the relevant date, there was some development on the balance of the land, including some internal roadwork, sewerage, drainage and water facilities and the proposed community centre was also partly constructed. However, none of the further residential units had been completed. 2 The respondent (Commissioner) assessed the entire land for land tax for the assessment year to 30 June 2013, but deducted a proportion of the tax in respect of the area of land which contained the constructed and occupied units. The applicant objected to that assessment, claiming that under s 39 of the Land Tax Assessment Act 2002 (WA) (LTA Act) the entire land was exempt because it was at the relevant date being used for a retirement village. The Commissioner disallowed that objection. 3 The applicant applied to the Tribunal under the Taxation Administration Act 2003 (WA) (TA Act) for a review of the Commissioner's decision.
Agreed facts 4 The facts of this matter are largely agreed between the parties and are contained in an agreed statement dated 5 June 2013. 5 On 31 August 2010, the applicant became the registered proprietor of: a) Lot 456 on Deposited Plan 56111, being the whole of the land comprised in Certificate of Title Volume 2661, Folio 676; and b) Lot 630 on Deposited Plan 56110, being the whole of the land comprised in Certificate of Title Volume 2661, Folio 672; (together, the Properties). (Page 5)
6 On 2 March 2011, the City of Swan (City) granted development approval under the City of Swan Local Planning Scheme No 17 (LPS 17) for the Properties to be developed for 'Aged Persons Dwellings', as that term was said to be defined in LPS 17 (in which the phrase 'Aged or Dependent Persons' Dwellings' is defined to have the same meaning as is defined in State Planning Policy No 3.1 Residential Design Codes of Western Australia 2010 (SPP 3.1 Codes)). 7 The applicant's intention is to develop retirement village residential units on the Properties progressively in five stages. 8 Residential units are purchased 'off the plan'. Purchasers can purchase a residential unit on any part of the retirement village plan. 9 On 17 March 2011, the applicant registered a memorial (L578161MR) over the Properties under s 15 of the RV Act. The memorial specifies that the Properties are or are proposed to be used for the purpose of a retirement village scheme, within the meaning of s 3(1) of the RV Act. 10 On 26 May 2011, the applicant registered a second memorial (L637232) on the Properties pursuant to the Home Building Contracts Act 1991 (WA). 11 On 18 August 2011, the Properties were amalgamated into a single lot. This lot is described as Lot 102 on Deposited Plan 71577, being the whole of the land comprised in Certificate of Title Volume 2775, Folio 393 and known as Willowbank Lifestyle Village, No 21 Flecker Promenade, Aveley (Lot 102). 12 On 5 September 2011, the applicant lodged a notification under s 70A of the Transfer of Land Act 1893 (WA) (L725788NO) that: The use of [Lot 102] is subject to a condition of planning approval dated 2 March 2011, which requires that [Lot 102] and the approved development on [Lot 102] be occupied by persons who are over the age of 55 years or who are or were at the time of the initial permanent occupation of the properties, the spouse of such a person as the approval is for Aged Persons Dwelling as defined in the City's Local Planning Scheme No 17 and may not be used for any other purpose. 'Spouse' includes a person living with another person as a husband or wife of that person on a bona fide domestic basis, although not legally married to that person. 13 The Registrar of Titles on 20 September 2011 endorsed the Certificate of Title for Lot 102 accordingly. (Page 6)
14 On 28 September 2011, the Commissioner issued to the applicant a land tax Notice of Assessment based on land owned as at 30 June 2011 and the applicant paid this assessment. 15 On 29 November 2011, the City issued to the applicant Building Licence BL1157/2011, authorising the erection of retainer walls and earthworks. On 6 December 2011, the City issued to the applicant Building Licence BL1302/2011 to build 80 independent living units and a community centre. 16 By 27 February 2012, all sewerage facilities, storm water facilities and all provision for water facilities had been completed for the whole of Lot 102. By 1 June 2012, all internal roadwork necessary for stage 1 of the development of the retirement village had been completed. 17 On 30 June 2012, six residential units in the retirement village on Lot 102 were occupied or available for occupation under residence contracts within the meaning of the RV Act. Also on 30 June 2012, all approvals necessary under the Building Act 2011 (WA) (Building Act) were in force for the residential units of the retirement village which were occupied or available for occupation on 30 June 2012. 18 The extent of the retirement village constructed on Lot 102 which was occupied or available for occupation under a residence contract within the meaning of the RV Act and for which all approvals necessary under the Building Act were in force as at 30 June 2012 occupied approximately 15% of the area of Lot 102. 19 As at 30 June 2012, a community centre for the retirement village was still under construction on Lot 102. Because it had not been completed, it was not occupied and no occupancy permit under the Building Act had been issued. Further residential units were also still under construction on Lot 102, but were not occupied or available for occupation.
Assessment 20 On 4 October 2012, the Commissioner issued to the applicant a land tax Notice of Assessment based on land owned by the applicant as at 30 June 2012 for an amount of $38,016.25. No exemption from land tax was applied to Lot 102. (Page 7)
21 On 10 October 2012, the applicant applied for an exemption from land tax under s 38A of the LTA Act on the basis that Lot 102 was being used for an aged care facility. 22 On 30 October 2012, the Commissioner wrote to the applicant advising that the Commissioner: a) had incorrectly forwarded to the applicant a s 38A exemption application; b) had cancelled the land tax Notice of Assessment dated 4 October 2012; and c) would reissue to the applicant a new notice based upon its determination that Lot 102 qualified for a 15% proportional exemption on the basis that only 15% of Lot 102 was used for a retirement village. 23 On 31 October 2012, the Commissioner issued to the applicant a land tax Notice of Reassessment for an amount of $29,162.65, based on land owned by the applicant as at 30 June 2012. A 15% exemption from land tax had been applied to Lot 102. 24 On 28 November 2012, the applicant lodged an objection against the land tax Notice of Reassessment and on 18 March 2013, the Commissioner notified the applicant that its objection was disallowed.
Issues 25 The parties agree that the main issue for determination by the Tribunal is whether Lot 102 is entirely exempt from land tax for the assessment year 2012/2013 pursuant to s 39 of the LTA Act. 26 They say that two subissues arise: 27 The parties have also identified two further issues, namely: a) whether s 18 of the LTA Act applies to provide a partial exemption from land tax in proportion to the area of Lot 102 occupied by the retirement village residential units which are occupied or available for occupation under a (Page 8)
residence contract within the meaning of the RV Act and for which all approvals necessary under the Building Act were in force on 30 June 2012; or b) whether the exemption in s 39 of the LTA Act applies by its own terms only in proportion to the percentage of Lot 102 occupied by residential units occupied or available for occupation under a residence contract within the meaning of the RV Act and for which all approvals necessary under the Building Act were in force on 30 June 2012. 28 In respect of these latter issues, the Commissioner argues that the former is the case. The applicant, on the other hand, argues that the exemption in s 39 of the LTA Act either does or does not apply to the whole of Lot 102 and that there can be no partial exemption either under s 18 or s 39 or otherwise.
Legislation 29 Section 34 of the TA Act confers on a taxpayer the right to object to an assessment issued by the Commissioner. Section 40(1) of the TA Act provides, relevantly: A person dissatisfied with the Commissioner's decision on an objection … may apply to the Tribunal for a review of the decision. 30 The proceedings before the Tribunal are within its review jurisdiction and therefore the Tribunal has the functions and discretions corresponding to those exercisable by the decisionmaker in making the reviewable decision; s 29(1) of the State Administrative Tribunal Act2004 (WA).
The LTA Act 5. Taxable land Land tax is payable, in accordance with the land tax Acts, for each financial year for all land in the State except land that is exempt under section 17. … (Page 9)
31 Section 17 is within Pt 3 of the LTA Act. 17. Exempt land Land is exempt from land tax for an assessment year if (a) the Commissioner grants an exemption for the assessment year under section 20; or (b) it is exempt for the assessment year under another provision of this Part. 18. Partial exemptions or concessions If (a) an exemption or concession under another provision of this Act would apply to land if it were used or occupied solely for an exempt purpose or purposes, or owned, used or occupied solely by a person or persons in a particular class or classes, or both, as mentioned in the respective provision; and (b) the land is used or occupied partly for the exempt purpose or purposes and partly for another purpose or purposes, or is owned, used or occupied partly by persons in the particular class or classes, and partly by another person or persons, then the exemption or concession applies to the proportion of the land that is used or occupied for the exempt purpose or purposes, or is owned, used or occupied by the persons in the particular class or classes, or both, as the case requires. 19. Applying for exemption or concession The Commissioner may require an owner of land (a) to lodge an application in the approved form for an exemption or concession under this Part; and (b) to give the Commissioner any information within the owner's knowledge or control that is relevant to deciding whether or not the land is eligible for an exemption or concession. 20. Commissioner's power to exempt land
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(1) A taxpayer may apply to the Commissioner for an exemption, concession or further concession for any of the following land (a) any proportion of private residential property that is used by an individual for a purpose that is not an exempt purpose, where the private residential property is exempt to some extent under section 21, 22 or 23 because of its use by the individual as his or her primary residence as provided in the respective section; (b) land that is not exempt under section 23 for an assessment year because it was exempt under that section in the previous financial year, or because the estate derived rent or income in the assessment year; (c) land used as holding paddocks for stock that is not exempt under section 29 only because it is not used for that purpose in the course of carrying on a rural business of a kind referred to in section 29; (d) land that is not exempt under section 29 because of the operation of section 29(3) or (4); (e) land that is subject to a concession under section 30; (f) land that is not exempt under section 42 because of the operation of section 42(3) or (4); (g) Crown land of which a person is taken to be the owner under section 8(1) and which is not otherwise subject to an exemption or concession; (h) land sold by a religious body that would otherwise be taxable under section 32(2); (i) land sold by an educational institution that would otherwise be taxable under section 33(2). (2) The Commissioner may grant the exemption, concession or further concession for the whole or part of the land if the Commissioner is satisfied that there are reasonable grounds for doing so. (3) If the Commissioner refuses to grant the exemption or concession, the applicant may appeal to the Minister against the Commissioner's decision. (4) An appeal may be made within 60 days after the date on which notice of the Commissioner's decision was issued, or within any further time allowed by the Minister for reasonable cause shown by the applicant. (Page 11)
(5) The obligation to pay, or the right to receive and recover land tax, is not affected by any appeal to the Minister. (6) The Minister is to consider the appeal with all reasonable dispatch, and may either disallow it or, if the applicant satisfies the Minister that there are reasonable grounds for doing so, allow it wholly or in part. (7) The Minister is to give notice of the Minister's decision on the appeal to the applicant. (8) The Commissioner is to make any reassessment necessary to give effect to a decision of the Commissioner or the Minister under this section.
21. Residences owned by individuals, exemptions for
(1) Private residential property (except property held in trust) is exempt for an assessment year if, at midnight on 30 June in the financial year before the assessment year, it is owned (a) by an individual who uses it as his or her primary residence; or (b) by a husband and wife, at least one of whom uses it as his or her primary residence; or (c) by persons who have lived in a de facto relationship with each other for at least 2 years, whether or not they still live on that basis, at least one of whom uses it as his or her primary residence. 39. Land used for retirement villages, exemption for Land used for a retirement village within the meaning of the Retirement Villages Act 1992 is exempt for an assessment year (to any extent that it is not exempt under another provision of this Part) if, at midnight on 30 June in the previous financial year (a) the residential premises in the village are occupied, or available for occupation, under a residence contract within the meaning of the Retirement Villages Act 1992; and (b) all approvals necessary for the village under the Building Act 2011 are in force at that time. 32 Clause 1 of the Glossary to the LTA Act contains certain definitions which are relevant. exempt purpose, in relation to land, means a purpose for which the land is used or reserved and by virtue of which the land is exempt; (Page 12)
… land includes all tenements and all interests in land; … lot has the meaning given in clause 2 [of the Glossary]; … parcel means 2 or more lots of land that are treated as a single property under clause 2 [of the Glossary]; … 33 Clause 2 of the Glossary provides, relevantly: (1) In [the LTA Act] unless the contrary intention appears lot means a defined portion of land -
(a) which is the whole of the land the subject of (i) a Crown grant issued under the Land Act 1933; or (ii) a certificate of title registered under the Transfer of Land Act 1893; or (iii) a certificate of Crown land title or qualified certificate of Crown land title, created and registered under the Transfer of Land Act 1893; or (iv) a survey into a location or lot under the Land Administration Act 1997 section 27(2); or (v) a partlot shown on a diagram or plan of survey of a subdivision deposited with the Land Information Authority; or (vi) a conveyance registered under the Registration of Deeds Act 1856; or (vii) a lot depicted on a strata plan or survey-strata plan where the land the subject of the plan has been subdivided within the meaning given in clause 3(1)(d) or (e); or (viii) an entitlement to occupy a nonstrata home unit; or
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(3) If 2 or more lots of land in the same ownership have common boundaries, the Commissioner may treat the lots as a single property for valuation and assessment if it is appropriate to do so.
The RV Act 34 Section 3 of the RV Act includes the following definitions: residence contract means a contract, agreement, scheme or arrangement which creates or gives rise to a right to occupy residential premises in a retirement village, and may take the form of a lease or licence; … residential premises means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a place of residence and includes a hostel unit; … retirement village means a complex of residential premises, whether or not including hostel units, and appurtenant land, occupied or intended for occupation under a retirement village scheme or used or intended to be used for or in connection with a retirement village scheme; … retirement village scheme or scheme means a scheme established for retired persons or predominantly for retired persons, under which (a) residential premises are occupied in pursuance of a residential tenancy agreement or any other lease or licence; or (b) a right to occupation of residential premises is conferred by ownership of shares; or (c) residential premises are purchased from the administering body subject to a right or option of repurchase; or (d) residential premises are purchased subject to conditions restricting the subsequent disposal of the premises; or (Page 14)
(e) residential premises are occupied under any other scheme or arrangement prescribed for the purposes of this definition, but does not include any such scheme under which no resident or prospective resident of residential premises pays a premium in consideration for, or in contemplation of, admission as a resident under the scheme; …
The exemption under s 39 of the LTA Act 35 Section 39 of the LTA Act has three requirements before the relevant exemption can apply: 1. the land must be used for a 'retirement village'; 2. the residential premises in the retirement village must be occupied or available for occupation under a 'residence contract'; and 3. all approvals necessary for the village under the Building Act must be in force at the relevant time. 36 Looking at the second and third requirements, it is an agreed fact that on 30 June 2012 the six completed residential units on Lot 102 were all occupied or available for occupation under residence contracts within the meaning of the RV Act. It is also an agreed fact that all necessary approvals under the Building Act were in force as at 30 June 2012 in respect of those residential units.
Summary of arguments 37 I will deal with the parties' submissions in more detail later in these reasons, but it is useful at this point to summarise the arguments. 38 The Commissioner says that the 'land' referred to in s 39 of the LTA Act means the entirety of Lot 102. Accordingly, for the exemption to apply, s 39 requires that the whole of Lot 102 must be used for a retirement village. 39 The Commissioner says that in s 39, the 'retirement village' is essentially a defined term meaning the proposed 80 residential unit village, part of which is complete and part of which was at the relevant date still under construction. The Commissioner says that either: (Page 15)
40 The applicant says that the six completed residential units are sufficient to constitute in themselves a retirement village and in respect of that retirement village the conditions of s 39 were satisfied on the relevant date. The applicant says that there is no requirement in s 39 that the retirement village occupies the whole of the lot. Accordingly, Lot 102 was being used as a retirement village because part of Lot 102 was being used as a retirement village.
What is meant by 'land' in s 39 of the LTA Act? 41 The parties agree that under s 5 of the LTA Act: 42 The parties also agree that under the LTA Act, the base unit of land is the lot. As set out earlier in these reasons, Clause 2 of the Glossary to the LTA Act defines 'land' to include all interests in land and 'lot', relevantly in this case, to mean 'the whole of the land the subject of a certificate of title'. 43 The Commissioner points out that the definition of 'land' in the LTA Act is inclusory and submits that the ordinary meaning of the word 'land' is therefore enlarged. The Commissioner says that the ordinary meaning of 'land' is 'the solid substance of the earth's surface'. 44 Accordingly, the Commissioner contends that the statutory context in which the word 'land' appears in s 39 of the LTA Act as applied in the present case indicates that the term 'land' refers to the whole portion of the earth's surface the subject of Certificate of Title Volume 2775 Folio 393. The Commissioner concedes that it is clear from s 11 of the LTA Act that (Page 16)
a reference to 'land' is a reference to a particular lot, but says that it means the entirety of that lot. Therefore, in the Commissioner's submission, the reference to land in s 39 is a reference to the whole of Lot 102. 45 The applicant, on the other hand, while accepting that a reference to land in the LTA Act is a reference to a lot, does not accept that a reference to a lot is necessarily a reference to the whole of that lot. 46 The applicant says that the Commissioner's construction is inconsistent with the text and structure of the LTA Act because it would eliminate the distinction made in the LTA Act between those exemptions which apply only where the land is used solely for the exempt purpose and those exemptions which apply whenever the land is used for the exempt purpose.
The Tribunal's findings on this issue 47 I agree that a reference to land in s 39 of the LTA Act is a reference to the relevant lot. The LTA Act expressly provides that a lot is a defined portion of land. However, whether or not a reference in the LTA Act to land is a reference to the whole of a lot or to only a part of it, in my opinion, depends entirely on its context. 48 I conclude that the reference to 'land' in s 39 is a reference to Lot 102, but not necessarily to the whole or to part of it.
What is meant by 'used for a retirement village' in s 39 of the LTA Act?
Contentions of the Commissioner 49 The Commissioner contends that the 'retirement village' first mentioned in s 39 of the LTA Act is the proposed complex of 80 residential premises and appurtenant land and the proposed community centre. The Commissioner says that the use of the definite article before the word 'village' in subparagraph (a) of s 39 means that 'the village' in that subclause is a reference to the same 80 unit retirement village; … it is a natural and correct use of English to employ the definite article when one is referring to a person or thing already identified expressly or by implication. Tamas v Victorian Civil and Administrative Tribunal and Others [2003] 9 VSCA 113 at 157. 50 On that basis, the Commissioner says, Lot 102 was being used on the relevant date for an 80 unit retirement village, even though part of it was still under construction. However, because 74 of the residences in that (Page 17)
retirement village were not at that time complete, the retirement village was not on that date entirely occupied or available for occupation. Accordingly, the conditions of the exemption in s 39 were not satisfied and the exemption did not apply. 51 In the alternative, the Commissioner says that if the parts of the retirement village under construction on the relevant date were not captured by the phrase 'used for a retirement village', then Lot 102 (in the sense of the whole of the lot) was not being used for a retirement village, occupied or otherwise. Thus, the exemption in s 39 cannot apply. 52 The Commissioner says the statutory context and language of s 39 indicates that the legislative goal is to exempt the whole of the identified land only if the whole of that land is used for a retirement village of which all of its residential units are constructed and ready and safe for occupation and whose appurtenant land (including buildings) is also completed and ready and safe for use by the relevant 30 June date. 53 Further, the Commissioner says that the phrase 'appurtenant land' does not encompass land that is set aside for future development, nor that which is under construction. 54 The Commissioner accepts that the exemption in s 39 of the LTA Act is an exemption based on 'purpose of use' and that the section does not expressly specify a 'sole use' test. The Commissioner says that, nonetheless, the legislative history of the LTA Act, the statutory context of s 39 and the underlying purpose of the section, to which I will refer in more detail later in these reasons, all lead to the conclusion that, in order for the exemption to apply, the whole of Lot 102 must be used for a retirement village. 55 However, the Commissioner considers that the applicant is entitled to a partial exemption under s 18 of the LTA Act, to the extent of the retirement units completed and occupied. The Commissioner says that because the land is used only partly for the exempt purpose and partly for a nonexempt purpose, namely the current and future construction of a retirement village, the exemption in s 39 should apply to the proportion of the land that is used for the exempt purpose.
The contentions of the applicant 56 The applicant says that the expression 'land used' in s 39 of the LTA Act does not mean that the whole of Lot 102 must be used for a retirement village. The applicant says that this approach would be (Page 18)
inconsistent with the express provisions elsewhere in Pt 3 of the LTA Act for partial exemptions. 57 The applicant says that the scheme established by the LTA Act is principally concerned with the purpose for which the land is used, not the percentage or proportion of the land which is used for that purpose. The applicant says that s 39 of the LTA Act does not require that the land be used solely or principally for a retirement village for the exemption to apply. The applicant says that the land is either used for a retirement village or it is not, with the result that the land either is exempt or it is not. 58 The applicant says, and it is common ground, that on 30 June 2012: 59 The applicant therefore concludes that Lot 102 was land used for a retirement village and that the criteria of s 39(a) and (b), on 30 June 2012, were satisfied. The applicant says that Lot 102 is therefore exempt for the assessment year 2012/2013. 60 That the retirement village was incomplete, or that parts of it were still under construction, the applicant says is irrelevant. 61 Alternatively, the applicant says that even if it is relevant that the retirement village was incomplete and parts of it were still under construction, in appropriate circumstances land which is in the development phase may be considered to be land used for the end purpose that is to follow completion of construction. The applicant cites a number of authorities for this proposition, including Brightwater Care Group (Inc) and Commissioner of State Revenue [2006] WASAT 276 (Brightwater) at [30]. 62 The applicant says that the contrary reasoning in Applewood Residential Developments Pty Ltd v Commissioner of State Revenue [2006] VSCA 207 (Applewood) does not apply to this case. In Applewood, the Court of Appeal of Victoria considered land on which some residential units in a retirement village had been completed and were available for occupation. However, further development of the (Page 19)
retirement village was still under construction and so the land attracted only a partial exemption under s 9 of the Land Tax Act 1958 (Vic) (Victorian Act). However, the applicant says, s 9 of the Victorian Act is materially different from s 39 of the LTA Act, in that under s 9(1) of the Victorian Act the exemption applies only if the land was used for the sole purposes of a retirement village. Further, under s 9(2AB) of the Victorian Act there is an express partial exemption if only part of the land was used and occupied as a retirement village and for no other purpose. 63 The applicant points out that the result in Applewood turned on the existence of s 9(2AB) of the Victorian Act. The applicant submits that s 39 of the LTA Act in contrast provides for a complete exemption where the land is used for a retirement village. The words 'land used for a retirement village' includes all of the subject land because that land is being used for a retirement village, notwithstanding the fact that the village is only partially complete. 64 In the alternative, the applicant says, if s 39 requires that all of the land is used as a retirement village, then the whole of Lot 102 is in fact being used for that purpose.The applicant draws a distinction between 'land used for' and 'land used as'. The applicant says that in the former case, land must be used for the general purpose of a retirement village, whereas in the latter case the retirement village must be fully operational. 65 Turning to the Commissioner's view that a partial exemption should apply under s 18 of the LTA Act, the applicant says that s 18 only applies where the particular exemption in Pt 3 of the LTA Act qualifies the word 'use' with the word 'solely'. 66 The applicant does not consider that s 18 has any application to s 39 of the LTA Act and that under s 39 the land in question is entirely exempt, even if only part of the land was being used as a retirement village. Alternatively, s 18 does not apply because the only purpose for which Lot 102 is used is as a retirement village. 67 The applicant does not consider that it is necessary to refer to the relevant Explanatory Memoranda or other extrinsic materials at all. The applicant says that even if an Act does not reflect the words of the relevant Explanatory Memorandum, it is the Act which must be applied, not the Explanatory Memorandum. (Page 20)
The Tribunal's findings
General approach 68 The legal meaning of a statute needs to be considered by reference to the language of that statute viewed as a whole and the context, the general purpose and the policy of the provision in question; Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16 at [47] and the authorities there cited. 69 Section 19 of the Interpretation Act 1984 (WA) provides that extrinsic material may be referred to for the purpose of: 70 However, as the High Court said in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55 at [39] (the opening sentence quoting what the High Court said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] 239 CLR 27 at [47]): This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text'. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
Legislative history and extrinsic material 71 The predecessor Act to the LTA Act was the Land Tax Assessment Act 1976 (WA) (1976 Act). 72 Section 21 of the 1976 Act provided that the classes of land specified in Part I of the Schedule were to be exempt from assessment and taxation under the 1976 Act. 73 Clause 7B in Pt I of the Schedule to the 1976 Act stated: (Page 21)
(a) Interpretation In this clause "ancillary purpose" means "residence contract" and "resident" have the meanings given to them by the Retirement Villages Act 1992; "retirement village scheme" means a retirement village scheme within the meaning in the Retirement Villages Act 1992 for which all necessary approvals under Part XV of the Local Government (Miscellaneous Provisions) Act 1960 are in force. (b) Class of land Land comprised in a retirement village scheme that is (i) occupied, or available for occupation, as residential premises under a residence contract; or (ii) used for an ancillary purpose, under the scheme, but only to the extent that the land is not exempt land under any other provision of this Act. 74 Clause 7B was not included in the 1976 Act as originally enacted, but was inserted into the 1976 Act by the Land Tax Assessment Amendment Act 1994 (1994 Bill). 75 The policy and purpose for the insertion of cl 7B was explained in the second reading speech for the 1994 Bill as follows: (Page 22)
exemptions… To ensure that the proposed exemption does not open up avoidance opportunities for quasi retirement village operations, the exemption is restricted only to those premises which meet the definition of 'retirement village' as defined in the Retirement Villages Act 1992. 76 It is clear from the second reading speech relating to the Bill in respect of the LTA Act, that the LTA Act was intended to be a reenactment of the 1976 Act and that there was to be no change in policy: This Bill does not alter the policy settings of the [1976 Act] in any significant manner. 77 The Explanatory Memorandum relating to the LTA Bill relevantly provides as follows: [Clause 39] provides an exemption for certain land used for retirement villages. It ensures that retirement village units that are occupied under a form of lease or licence arrangement enjoy a similar exemption to those where the occupants have some form of title to the unit. … The exemption only applies to the extent of the land used for the exempt purpose. If, for example, there existed residential units and other units under construction at 30 June in the financial year prior to an assessment year, the area of land comprised of the units under construction would be subject to the full rate of land tax.
Conclusion in respect of the legislative history and extrinsic material 78 The overall intention of the exemption provided under s 39 of the LTA Act is clear from the LTA Act itself and from the extrinsic material. The intention is to extend the benefit of the 'primary residence' land tax exemption to include occupiers of units in a retirement village. The homes of residents in a retirement village are to in effect receive the same exemption as the homes of a home owner/occupier. 79 Neither the applicant nor the Commissioner is seeking an outcome in this matter which will thwart that intention. 80 Interestingly, because the beneficiaries of the exemption are the owners of the retirement village, the purpose of the exemption is only achieved if that benefit is passed on by the village owners to the residents. 81 I accept that the LTA Act was intended to simply re-enact the provisions of the 1976 Act, but I do not consider that in the case of s 39 this intention was in fact achieved. The retirement village exemption in (Page 23)
the LTA Act is worded quite differently from that in the 1976 Act. The 1976 Act exempts land 'comprised in' a retirement village. The LTA Act exempts land 'used for' a retirement village. There are no grounds to conclude that the difference in wording was unintentional. 82 I do not derive any other benefit from the legislative history of the LTA Act or the extrinsic material. For example, it is unclear what is meant by 'other units under construction' where that phrase appears in the Explanatory Memorandum relating to the LTA Bill. It could be a reference to units intended to be part of a retirement village scheme. It could also be a reference to other residential units which are available to the general public. 83 The phrase 'quasi retirement village operations' in the Explanatory Memorandum for the Land Tax Assessment Amendment Bill 1994 (LTA Bill) is just as difficult to understand. I take that phrase to mean residential units which are designed primarily for and suited to retired persons, but not under a retirement village scheme. 84 I do not accept in any event that the wording of s 39 requires that I displace it with the content of the extrinsic material.
'Retirement village' and 'retirement village scheme' 85 I have already set out earlier in these reasons the definition of 'retirement village' as it appears in the RV Act. It is, relevantly, a complex of residential premises and appurtenant land, occupied or intended for occupation under a retirement village scheme. 86 The word 'complex' is not defined. However, its ordinary and natural meaning is 'an assemblage of related buildings, units etc.'; Shorter Oxford English Dictionary (6th ed, 2007). 87 The phrase 'residential premises' is defined in the RV Act to mean 'any premises or part of premises (including any land occupied with the premises) used or intended to be used as a place of residence'. 88 'Appurtenant land' is land which pertains to, or is used in connection with, or which is necessary for, the use and enjoyment of the complex of residential premises; Retirement Care Australia (Hollywood) Pty Ltd v Commissioner for Consumer Protection [2013] WASC 219 (Retirement Care) at [90]. (Page 24)
89 In Retirement Care, Pritchard J provided an extensive and thorough analysis of what constitutes a retirement village and a retirement village scheme. 90 A retirement village has two key elements first, the buildings and appurtenant land which physically make up the retirement village and second, the use or intended use to which those buildings and that land are to be put. It is that use which transforms a complex of residential premises into something which is regulated under the RV Act. That use or intention to use must be for the purpose of, or in connection with, a retirement village scheme; Retirement Care at [89]. 91 A 'retirement village scheme' is said to involve a programme of action or plan or policy comprising of three elements: a) the scheme must be established for or predominantly for retired persons; b) under the scheme, residential premises are to be occupied by retired persons; and c) under the scheme, at least one resident or prospective resident pays a premium in consideration for, or in contemplation of, admission as a resident under the scheme; Retirement Care at [80] [83], and at [85]. 92 In Retirement Care at [97], Pritchard J said that the absence of any of these three elements will mean that a residential complex and appurtenant land cannot be said to be used or intended for use under a 'retirement village scheme' and therefore cannot constitute a 'retirement village' for the purposes of the RV Act. Her Honour says that, for example, a complex of residential premises which are not offered for occupation by retired persons (pursuant to a programme of action or plan or policy pursued by the owner of the land) is not used for a retirement village scheme and thus does not constitute a 'retirement village' for the purposes of the RV Act.
The retirement village on Lot 102 93 The Commissioner's position is that Lot 102 was on the relevant date used for an 80 unit retirement village, partially completed and partially under development or construction. However, I do not accept that a retirement village under construction can be a retirement village. Having regard to Pritchard J's observations in Retirement Care, one of the key (Page 25)
elements of a retirement village is that it must comprise buildings. On 30 June 2012, the only completed buildings on Lot 102 were the six fully constructed residential units. Accordingly, if Lot 102 was being used for a retirement village, it could only be a retirement village comprising the six fully constructed residential units on that lot. The question is then whether those units together fall within the definition of a retirement village, namely a complex of residential premises occupied under a retirement village scheme. 94 Taking the ordinary and natural meaning of the word 'complex' I conclude that those six residential units constitute a complex of residential premises. 95 Having regard to the three elements of a retirement village scheme as set out in Retirement Care, and noting that it is not argued in respect of the six residential units that any of those elements are absent, I also consider that the each those residential units was at the relevant date occupied or intended to be occupied by retired persons under a retirement village scheme. 96 I therefore conclude that the complex of six units constitutes, in its own right, a retirement village.
Was Lot 102 being used for a retirement village on 30 June 2012? 97 The word 'used' is a word of wide import; Council of the City of Newcastle v Royal Newcastle Hospital (1957) CLR 493 (Royal Newcastle) at 515. The ordinary meaning of the verb 'to use' is to utilise or to employ for or with some aim or purpose; R v Rintel (1991) 3 WAR 527 at 529. 'Uses' has a broad connotation but its meaning is controlled by the context; Commissioner of State Revenue v De Campo [2007] WASCA 136 (De Campo) at [41]. The uses to which property of any description may be put are manifold and what will constitute 'use' will depend to a great extent upon the purpose for which it has been acquired or created; Royal Newcastle at 515. The 'user' test is concerned with actual use, as distinct from potential or intended use; De Campo at [49]. 98 It is not in contention that on the relevant date there were completed residences on part of Lot 102. The remainder of Lot 102 was on that date the subject of site works in respect of what will ultimately be an 80 unit retirement village, with some physical work actually being carried out. 99 That does not, however, mean that I consider that the whole of Lot 102 was, by virtue of the completed residences and the future (Page 26)
development of others, used entirely for a retirement village. I do not accept the applicant's contention that the decision in Brightwater is authority for that proposition. The Tribunal said in Brightwater that during the construction phase of an aged care facility, the land in question was being used for the purpose of establishing that facility, rather than being used for an aged care facility. 100 In any event, the issue in Brightwater was in the context of s 37 of the LTA Act, which relates to the charitable objects of the taxpayer, rather than the physical or actual use of the land. As I have already mentioned, the land use in the context of s 39 of the LTA Act is the actual or physical use to which the land has been put. 101 Nor do I consider that the remainder of Lot 102 was not being used at all. 102 My conclusion is that on 30 June 2012, Lot 102 was being used partly for a retirement village and partly for another purpose. However, because part of Lot 102 was being used as a retirement village, it follows that I consider that, for the purpose of s 39, Lot 102 was on the relevant date being used for a retirement village. Section 39 does not contain any express provision requiring that the land is used solely for a purpose, in contrast with, for example, s 34, which provides that land is exempt if it is used solely for the purposes of a public hospital. Nor does s 39 contain any express provision that the land must be used solely or principally for a particular purpose, in contrast with, for example, s 41, which provides that land is exempt if it is used solely or principally for the conservation of native vegetation.
Is Lot 102 fully or only partially exempt? 103 The LTA Act provides that land tax is payable for all land except land that is exempt under s 17. 104 Section 17 provides that land is exempt if the Commissioner grants an exemption under s 20, or if it is exempt under Pt 3 of the LTA Act. Section 18 and s 39 are both in Pt 3. 105 Section 39 provides, in essence, that Lot 102 is exempt if at the relevant date it is used for a retirement village. I have already concluded that Lot 102 was on that date used for a retirement village. 106 Section 39 does not contain any express provision under which the exemption applies only in proportion to the percentage of the land (Page 27)
occupied by residential units occupied or available for occupation under a residence contract within the meaning of the RV Act and for which all approvals necessary under the Building Act were in force on the relevant date. 107 This is in contrast to s 23A(2), s 30 and s 38(3), of the LTA Act, all of which make express provision for partial exemption from land tax in respect of land which is not used solely for the particular exempt purpose. 108 I therefore conclude that it was the intention of the draughtsperson that the exemption under s 39 was to apply to all of the land in question or to none of it. 109 That would be consistent with what I consider to be the overall intention of the exemption, as described in the Explanatory Memorandum to the LTA Bill, namely to provide relief from land tax to occupants of a retirement village 'similar … to those where the occupants have some form of title to the unit'. It would be inconsistent with that intention if those residents were required, in a staged development, to have to wait until that development was entirely complete before the exemption would apply. It is not inconceivable that the entire development may never be completed. 110 Section 39 contains nothing to allow me to reach a contrary view. Even if the intention evidenced by the Explanatory Memorandum was different from the express wording of s 39, the Tribunal must apply the Act and not the Explanatory Memorandum. 111 If s 39 does not provide in its own terms for partial exemption when less than the whole of the land is being used for the required purpose, then pursuant to s 5 and s 17 of the LTA Act a partial exemption can only be provided under s 20 or s 18. Section 20, which provides for exemption at the discretion of the Commissioner under certain circumstances, clearly does not apply and the parties do not appear to be arguing otherwise. 112 It follows then that if the land in question is only to be partially exempt, it can only be so through the operation of s 18. 113 Section 18 relevantly provides that if an exemption under another provision of the LTA Act would apply to land if it were used solely for an exempt purpose and the land is used partly for the exempt purpose and partly for another purpose then the exemption applies to the proportion of the land that is used for the exempt purpose. (Page 28)
114 Unlike, for example, s 34 of the LTA Act, s 39 does not expressly require the land to be used solely for the relevant purpose before the exemption applies. Section 39 simply states that the exemption applies if the land is used for the relevant purpose. Accordingly, I consider that s 18 only has application where the exemption concerned contains a requirement that the land is used solely for the exempt purpose, not when it provides for mere use. I do not therefore consider that s 18 applies to provide a partial exemption. 115 The Commissioner points out that if I interpret the relevant provisions in this way, then s 20(1)(a) is meaningless because: 116 The Commissioner says that residential property can only be exempt 'to some extent' through the operation of s 18. 117 I disagree. I do not consider that if land is only partly used as a private residence then a partial exemption arises under s 18. If land is only partly used as a private residence, I believe that the intention of the LTA Act is that the Commissioner then has a discretion to partially exempt the land in question under s 20. I do not consider that s 18 provides a mandatory partial exemption. Under s 20, any exemption is entirely at the discretion of the Commissioner. 118 What I do accept, however, is that the Commissioner has made every effort to apply the exemption in s 39 in a way which reflects his understanding of what the legislature intended. However, I do not believe that it is open to the Commissioner to provide a partial exemption in these circumstances. 119 In my view, the correct and preferable decision in this case is that as at 30 June 2012, Lot 102 was used in circumstances that made that property exempt for assessment purposes.
Orders 120 For the reasons given above, the Tribunal makes the following orders. (Page 29)
1. The Commissioner's assessment of land tax in respect of the property the subject of these review proceedings is set aside. 2. The Tribunal sends the matter back to the Commissioner for assessment in accordance with the correct and preferable decision stated by the Tribunal in these reasons for decisions published with this order, so that the subject land is, as at 30 June 2012, exempt from land tax under the Land Tax Assessment Act 2002 (WA). |