Commissioner of State Revenue v Burdinat
[2012] WASC 359
•25 SEPTEMBER 2012
COMMISSIONER OF STATE REVENUE -v- BURDINAT [2012] WASC 359
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 359 | |
| Case No: | GDA:6/2012 | 25 SEPTEMBER 2012 | |
| Coram: | McKECHNIE J | 25/09/12 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | COMMISSIONER OF STATE REVENUE GUY ROBERT LOUIS BURDINAT RHONDA DOROTHY BURDINAT |
Catchwords: | Revenue and taxation Whether premises principal residence when let by owners for three months Owners on holiday Turns on own facts |
Legislation: | Land Tax Assessment Act 2002 (WA) Taxation Administration Act 2003 (WA) |
Case References: | Browne v Commissioner of State Revenue (2001) 27 SR(WA) 249 Burdinat and Commissioner of State Taxation [2012] WASAT 105 Commissioner of State Revenue v De Campo [2007] WASCA 136; (2007) 33 WAR 542 Commissioners of Inland Revenue v Lysaght (1928) AC 234 Deane v Commissioner of Stamp Duties (1996) 2 Qd R 557 In Re Rowell Deceased; Public Trustee v Bailey (1982) 31 SASR 361 Kotaki Para Rubber Estates Ltd v Federal Commissioner for Taxation (1941) 64 CLR 241 Levene v Commissioners of Inland Revenue (1928) AC 217 Rothenbury v Commissioner for State Taxation (1994) 11 SR(WA) 345 Semmens and Commissioner of State Revenue [2006] WASAT 219 Stone v Commissioner of State Taxation, Appeal No 56 of 1989/90 and 69 of 1989/90, reasons delivered 15 February 1991 Unkovich v Commissioner for State Taxation (1994) 11 SR(WA) 107 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
GUY ROBERT LOUIS BURDINAT
First-named Respondent
RHONDA DOROTHY BURDINAT
Second-named Respondent
ON APPEAL FROM:
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram : MR P McNAB (SENIOR MEMBER)
File No : DR 21 of 2012
Catchwords:
Revenue and taxation - Whether premises principal residence when let by owners for three months - Owners on holiday - Turns on own facts
(Page 2)
Legislation:
Land Tax Assessment Act 2002 (WA)
Taxation Administration Act 2003 (WA)
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant : Ms R C Panetta
First-named Respondent : In person
Second-named Respondent : No appearance
Solicitors:
Appellant : State Solicitor for Western Australia
First-named Respondent : In person
Second-named Respondent : No appearance
Case(s) referred to in judgment(s):
Browne v Commissioner of State Revenue (2001) 27 SR(WA) 249
Burdinat and Commissioner of State Taxation [2012] WASAT 105
Commissioner of State Revenue v De Campo [2007] WASCA 136; (2007) 33 WAR 542
Commissioners of Inland Revenue v Lysaght (1928) AC 234
Deane v Commissioner of Stamp Duties (1996) 2 Qd R 557
In Re Rowell Deceased; Public Trustee v Bailey (1982) 31 SASR 361
Kotaki Para Rubber Estates Ltd v Federal Commissioner for Taxation (1941) 64 CLR 241
Levene v Commissioners of Inland Revenue (1928) AC 217
Rothenbury v Commissioner for State Taxation (1994) 11 SR(WA) 345
Semmens and Commissioner of State Revenue [2006] WASAT 219
(Page 3)
Stone v Commissioner of State Taxation, Appeals No 56 of 1989/90 and 69 of 1989/90, reasons delivered 15 February 1991
Unkovich v Commissioner for State Taxation (1994) 11 SR(WA) 107
(Page 4)
- McKECHNIE J:
How this matter comes to court
1 Mr and Mrs Burdinat are a retired couple who have lived in their Bicton home for 25 years.
2 Like many others in a similar position, during the winter months of 2011 they headed north to Broome living in a caravan on their own Vacation Village site. While they were away from early June to early September 2011, they rented out the Bicton property on a fully furnished basis, mainly for security reasons. They always intended to return to their Bicton home after their holiday.
3 Shortly after their return, the Burdinats were issued with a land tax assessment which was re-assessed on 2 November 2011 in respect of three items of taxable land, one of which was the Bicton property. This re-assessment allowed for the grant of a residential exemption for the property in the Broome Vacation Village. They objected to the assessment and the Commissioner overruled the objection. They sought a review in SAT and were successful. Undaunted, the Commissioner appeals to this court contending that the SAT Senior Member was wrong. He was not and the appeal is dismissed.
The issue
Q. Was it open to find that the Bicton property was the Burdinats' principal residence on 30 June 2011 and therefore not subject to land tax?
A. Yes.
4 On review at SAT Burdinat and Commissioner of State Taxation [2012] WASAT 105 the Senior Member held:
It cannot, in the Tribunal's view, be said, in the particular facts and circumstances of this case, that the temporary letting of premises by a retiree couple 'mainly for security reasons', while that retiree is on holiday for a period well recognised as relatively 'short term' in broadly analogous areas of the law elsewhere, thereby destroys the character of the property as the applicants' 'sole or principal place of residence' as at the relevant date.
Nothing the Tribunal has said in these reasons means that anybody who lets their premises for, say, less than 90 days, is thereby somehow automatically entitled to an exemption. Every case will depend upon its
(Page 5)
- particular circumstances, and then there will be questions of fact and degree [25] - [26].
The basis of the appeal
5 The Commissioner is entitled to bring an appeal on a question of law, of fact or mixed law and fact, without having first obtained leave to appeal: Taxation Administration Act 2003 (WA) s 43A. The respondents have indicated they do not wish to take part in the appeal. However, Mr Burdinat has appeared today. These are the grounds:
1. The learned Senior Member erred in law in finding that the letting of the property located at 48 Blackwall Road Parade, Bicton ('the relevant property'), by the Respondents ('the owners') to a tenant for the period 5 June 2011 to 4 September 2011, while the owners were on holiday, did not destroy the character of the property as the owners' sole or principal place of residence as at 30 June 2011, in that:
(a) the learned Senior Member took into account an irrelevant consideration, namely, examples of planning and strata law and zoning practice cited in Owners of Pearl Beach Survey-Strata Plan 49019 v Heyns [2011] WASAT 66 and Stewart v City of Albany [2009] WASAT 45 as well as statutory provisions under the Residential Tenancies Act 1987 (W) and the Residential Parks (Long-stay Tenants) Act 2006 (WA), which 'choose [a] figure of 30 days [sic: 3 months] for greater or different regulation or control' of tenancy and long-stay residential park arrangements (page 3 of reasons for decision of Senior Member, Mr P McNab in DR 21 of 2012);
(b) the learned Senior Member took into account an irrelevant consideration, namely, the brevity of the term of the lease of the relevant property which straddled 30 June 2011;
(c) the learned Senior Member failed to take into account a relevant consideration, namely, the fact that the owners of the relevant property were precluded from using the property (save for the limited rights of entry reserved) for the term of the lease by virtue of the fact that the property was subject to a lease which involved a grant of a legal right of exclusive possession to the tenant;
(d) alternatively to ground (c), the learned Senior Member failed to give any weight, or any sufficient weight, to the fact that the owners of the relevant property were precluded from using the property (save for the limited rights of entry reserved) for the term of the lease by virtue
- of the fact that the property was subject to a lease which involved a grant of a legal right of exclusive possession to the tenant.
The Land Tax Assessment Act 2002 (WA)
6 Land tax is payable each financial year for all land except land that is exempt for the assessment year under pt 3. Under pt 3 div 2, s 21 exempts private residential property if, at midnight on 30 June in the financial year before the assessment year, it is owned by a husband and wife, at least one of whom uses it as his or her primary residence: s 21(1)(b). A primary residence in relation to an individual means the individual's sole or principal place of residence. A private residence is a building occupied and intended by the owner to be occupied, as a place of residence, except a building or part of a building that is ordinarily used for holiday accommodation: Glossary cl 1.
7 In Commissioner of State Revenue v De Campo [2007] WASCA 136; (2007) 33 WAR 542 Buss JA noted:
The ordinary meaning of the verb 'uses' is utilises or employs for or with some aim or purpose. See R v Rintel (1991) 3 WAR 527 per Malcolm CJ at 529. Although 'uses' has a broad connotation, its meaning is, of course, controlled by the context. In s 21(1)(a), the thing which an individual 'uses' is 'private residential property', and the use in question is as the individual's 'primary residence'. It is apparent that s 21(1)(a) is concerned with actual use at midnight on 30 June in the financial year before the relevant assessment year. The nature and extent of the use of the private residential property which is required to constitute use as an individual's primary residence involves questions of fact and degree. Compare Handiside v Attorney-General [1969] NZLR 650 at 651 - 652 [41].
8 It is apparent that s 21(1)(a) is concerned with actual use at midnight on 30 June in the financial year before the relevant assessment year. The nature and extent of the use of the private residential property which is required to constitute use as an individual's primary residence is the issue. In determining the issue the governing principle is that the answer is a question of fact and degree.
9 Beyond that, the cases provide examples by way of analogy, sometimes close, sometimes less so. Because the Senior Member confined his decision to the particular facts and circumstances, none of the analogies precisely answer the question but they do provide guidance.
(Page 7)
Levene v Commissioners of Inland Revenue(1928) AC 217
10 Viscount Cave LC:
In most cases there is no difficulty in determining where a man has his settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purpose of business or pleasure. Thus, a master mariner who had his home at Glasgow where his wife and family lived, and to which he returned during the intervals between his sea voyages, was held to reside there, although he actually spent the greater part of the year at sea (222).
11 He noted that in cases of a wanderer the question is one of fact and degree and must be determined on all the circumstances of the case.
Commissioners of Inland Revenue v Lysaght (1928) AC 234
12 Viscount Sumner:
I think it is the shortness of the aggregate time during which Mr Lysaght is here, that constitutes the principal, though by no means the only point in his favour, but the question of a longer or a shorter time, like other questions of degree, is one peculiarly for the Commissioners (245).
13 Lord Buckmaster was of opinion (247) that the word 'residence' is essentially a question of fact whether a man does or does not comply with its meaning.
InRe Rowell Deceased; Public Trustee v Bailey (1982) 31 SASR 361
14 At issue was the construction of a will and the words 'my principal place of abode at the time of my death'. The testatrix owned a dwelling house but was a patient in a hospital three years prior to death and the house untenanted for that period. Wells J considered the meaning of the word 'abode' and how it assimilated the implication of a dwelling place, and of a stay other than transient or temporary. He said:
But one facet of the meaning of 'abode' has, I apprehend, never changed or been lost. Whatever the place or the stage, whatever the duration of the stay or pause, an abode is a place or stage, resorted to or maintained by free or untrammeled choice (370).
15 A little further on:
Furthermore, I am of the opinion that the testatrix's inability, and consequent failure, to enter into occupation of her intended home makes no difference to the operation of the disputed passage in the will. Where a person has established a place of abode, mere physical absence from it, does not, in his or her contemplation of it, change its status. It would
(Page 8)
- require the sort of choice or decision referred to above to effect such a change (370).
Deane v Commissioner of Stamp Duties (1996) 2 Qd R 557
16 Fryberg J had under consideration the Stamp Act s 55A and the definition of 'prescribed principal place of residence'. He said:
It also seems to me that the word 'principal' in the definition allows a wide range of factors to be taken into account and also implies an objective test of what is the principal place of residence. That is not to say that the intention of the person acquiring the relevant residence is not relevant ... It seems to me that intention is relevant, but not dominant.
The evidence regarding the applicants mail, their usage of electricity, the electoral roll, the time which they spent at Dewar Terrace compared with the time which they spent at Weinholt Street, the number of nights slept at each place, all combines to find a proper inference as to what was their place of abode or their residence - to put it another way, the place where their home was (566 - 567).
Stone v Commissioner of State Taxation, Appeals No 56 of 1989/90 and 69 of 1989/90, reasons delivered 15 February 1991
17 The appellant had owned land in Mount Pleasant for 20 years. A land tax assessment was made on the property while the appellant was away from home in the eastern states on an extended honeymoon, a camping holiday and in order to work and do work related research. The appellant and his wife travelled in a campervan for most of the time away, although they spent some time with his wife's family in Adelaide. The appellant was not resident at the house from 10 December 1985 to 20 October 1987, except on two occasions when he returned with his wife, one being a brief visit and the other for six weeks.
18 During his absence, all of the appellant's furniture remained in the house as did most of his belongings. His nephew resided in the house in order to look after it, but the appellant retained the right to have unlimited access to the house. The nephew paid a nominal amount to cover the costs of rates and taxes.
19 The house remained the permanent postal address of the appellant. It was always the intention of the appellant to return to his home after the holidays.
20 The Tribunal held that the evidence established that the land was used solely as the appellant's place of residence at all material times. The appellant's nephew was not entitled to take the land for any estate but was
(Page 9)
- merely an occupant in a caretaker's capacity. The facts revealed a regular habitual mode of life in Perth continuous for many years. The appellant clearly intended to resume life in Western Australia at his Applecross property where his belongings remained. The appellant did not adopt another residence elsewhere during the period that he had travelled by campervan. The duration of residency does not determine the question.
Rothenbury v Commissioner for State Taxation (1994) 11 SR(WA) 345
21 The appellants owned land at Coolbinia. They lived there until they moved to Karratha for the husband to take up a permanent position. Their furniture and belongings remained at the Coolbinia property, and their daughter remained there paying $10 a week towards the expenses of the property. The appellants lived in Karratha in a rented property which was partly furnished, and which had no fixed term of tenancy. The Land Valuation Tribunal was not construing the phrase the 'principal place of residence' but 'ordinary place of residence'. It relied on three cases for the proposition that:
[A] degree of continuity or regularity of residence if required, apart from accidental or temporary absences for the purposes of business or pleasure, although it is a question of fact and degree at what point an absence becomes so prolonged or of such a nature as to affect such continuity or regularity (Levene v IRC (at 222 - 223, 225); Akbarali v Brent London Borough Council [1983] 2 AC 309 at 344; Re Vassis; Ex parte Leung (1986) 9 FRC 518 at 524 - 525) (346).
Browne v Commissioner of State Revenue (2001) 27 SR (WA) 249
22 The appellants owned land in Fremantle. They left on an extended holiday in December 1999 with their three children. Their mail was collected and forwarded by their neighbour. Part of the house was locked but tenants were in place during their absence. It was in the hands of a managing agent and continuously let for nearly a year. The utilities were paid by the tenants. The key issue in the appeal was whether, as at 30 June 2000, the subject property was the appellants' sole or principal place of residence. The Land Valuation Tribunal held:
It is significant that:
(i) the tenant was permitted to have access to the property and, inter alia, quiet possession thereof, subject to performance of their obligations under the tenancy agreement;
(ii) appellants' agent was required to give seven days notice of any proposed entry for inspection; and
(Page 10)
- (iii) the appellants were required to give notice to the tenant to vacate possession and request the tenants' permission to re-enter the premises prior to the expiration of the tenancy period (251).
23 The Tribunal noted that the effect of the amendment from 'ordinary place of residence' to 'sole or principal place of residence' is that a taxpayer who owns more than one property cannot rely on the sole or principal residential exemption in respect of more than one property. The use of the phrase 'sole or principal' does not appear to vary from the notion of being the 'ordinary' place of residence save that it focuses the attention of the exemption on the primary or significant place of residence. After reference to authority, the Tribunal was satisfied that the appellants did not have sufficient connection with the subject property for it to be their 'sole or principal place of residence'. The tenants in possession enjoyed exclusive occupation. Inspection of the property required seven days notice to the tenants. When the appellants sought to return early from their travels it was necessary to obtain the tenants' consent to vacating the property and enable the appellants to retake possession.
Unkovich v Commissioner for State Taxation (1994) 11 SR(WA) 107
24 The appellants were the registered proprietors of land at Bayswater. From March 1992 to early June 1993 they lived in Kununurra for the male appellant's employment. A sister of the female appellant moved into the Bayswater home during this time and the appellants claimed a residential exemption from land tax.
25 The Tribunal held:
The place of residence of an individual is determined by reference to where he eats and sleeps and has his settled or usual abode: Koitaki Para Rubber Estates Ltd v Commissioner of Taxation (Cth) (1941) 64 CLR 241.
In Levene v Inland Revenue Commissioners [1928] AC 217 at 225 it was stated that 'ordinary residence' connotes some degree of continuity apart from accidental or temporary absences and that this question is one of fact and degree (108).
26 The Tribunal was satisfied that the appellants had set up home in Kununurra and that any return to Perth during that period was at best simply as visitors when they temporarily resumed occupancy of their Bayswater home.
(Page 11)
Semmens and Commissioner of State Revenue [2006] WASAT 219
27 The applicants owned land on which they proposed to construct a new dwelling. Due to delays, the construction of the dwelling was delayed. The applicants found another property to live in until their house was built. Barker P noted that:
As at midnight on 30 June 2004 and 30 June 2005 the applicants' land was vacant land as there was no building being constructed and no building on the land at all.
Thus the subject land was at all material times incapable of constituting 'private residential property' [36].
28 This review of relevant cases establishes the principle I have earlier set out. The review also demonstrates the range of factors that are taken into account. Across all the authorities there is no one factor which clearly stands out as determinative.
SAT's reasons for decision
29 The Senior Member noted the following facts:
The lease was for three months. The couple were retirees and went on an extended holiday in the north of the State. The Commissioner accepted that the leasing out was 'mainly for security purposes'. The rent was below market value and the scope of the lease was subject to certain formal and informal access arrangements agreed between the applicants and the lessee [4].
30 The fact that the property was leased over a period which covers 30 June 2011 is significant as are the terms of the lease which the Commissioner submits precluded the Burdinats from use of the property as at 30 June 2011.
31 However, the focus remains whether the property was in use as a private residence at that date. Whether a person eats or sleeps there is a factor in whether it is the 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 ...': Kotaki Para Rubber Estates Ltd v Federal Commissioner for Taxation) (1941) 64 CLR 241, 249 (Williams J). That question is not answered by having regard only to the lease, but to all the circumstances. The Senior Member accepted that the residence always formally remained in the tenants' exclusive possession ([20]).
(Page 12)
32 The attachment of the Burdinats to the Bicton property was permanent. No doubt a lawyer might have advised them to take their holiday at a different time of the year, regardless of the possible inclemency of the weather at home or in Broome, then they would not have had a problem with the 30 June.
33 Taking a broad view of 'use' and applying it to the particular facts and circumstances of a retired couple leasing out their premises, mainly for security purposes, while they took a holiday in Broome, I cannot conclude that the Senior Member was in error. His consideration of other statutory provisions choosing three months was not irrelevant to the judgment that had to be made and he noted that there was 'no particular "magic" in this specific period, nor is it considered by itself, necessarily a determinative factor' ([24]).
34 The length of the lease, and in particular its brevity, is a relevant consideration as are the terms of the lease and any exclusive occupancy it creates.
35 The Senior Member did take into account that the residence formally remained in the tenant's exclusive possession ([20]). But as I have said, that does not entirely answer the question of 'use' as a primary residence.
36 The alternative ground of appeal (d) that the learned Senior Member failed to give any weight, or any sufficient weight, is always a hard ground to make good. In this case, the Tribunal expressly gave weight to the nature of the lease.
37 I am not persuaded that the grounds of appeal have been made out. I consider that the decision made by the learned member was open on the material before him. The appeal is dismissed.
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