DE CAMPO and COMMISSIONER OF STATE REVENUE
[2006] WASAT 230
•16 AUGUST 2006
DE CAMPO and COMMISSIONER OF STATE REVENUE [2006] WASAT 230
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 230 | |
| TAXATION ADMINISTRATION ACT 2003 (WA) | |||
| Case No: | DR:15/2006 | 18 JULY 2006 | |
| Coram: | HON R VIOL (SUPPLEMENTARY DEPUTY PRESIDENT) | 16/08/06 | |
| 21 | Judgment Part: | 1 of 1 | |
| Result: | Applications allowed Decisions of respondent set aside Reassessment ordered | ||
| B | |||
| PDF Version |
| Parties: | ROSANNA DE CAMPO COMMISSIONER OF STATE REVENUE |
Catchwords: | Taxation Land Tax Exemption Private residential property Whether lots were established and used as an integrated area Three adjoining lots with dwelling house on one lot |
Legislation: | Land Tax Assessment Act 2002 (WA), s 21, Glossary cl 2, cl 2(3) and cl 2(4) State Administrative Tribunal Act 2004 (WA), s 17(1), s 17(3), s 27(1), s 29(1) Taxation Administration Act 2003 (WA), s 3, s 34, s 37, s 40 |
Case References: | JM Bestall and Commissioner of State Revenue [2005] WASAT 32 Young and Commissioner of State Revenue [2005] WASAT 296 Nil |
Orders | 1. The applications for review brought pursuant to s 40 of the Taxation Administration Act of the disallowance by the respondent of the applicant's objections to the assessment of liability for last tax for 2004/2005 and 2005/2006 are allowed.,2. The decisions of the respondent are set aside.,3. The matters be remitted back to the respondent for new assessments to be issued in accordance with the decision of the Tribunal.,4. The parties be given liberty to apply. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : TAXATION ADMINISTRATION ACT 2003 (WA) CITATION : DE CAMPO and COMMISSIONER OF STATE REVENUE [2006] WASAT 230 MEMBER : HON R VIOL (SUPPLEMENTARY DEPUTY PRESIDENT) HEARD : 18 JULY 2006 DELIVERED : 16 AUGUST 2006 FILE NO/S : DR 15 of 2006
- DR 112 of 2006
- Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Taxation Land Tax Exemption Private residential property Whether lots were established and used as an integrated area Three adjoining lots with dwelling house on one lot
Legislation:
Land Tax Assessment Act 2002 (WA), s 21, Glossary cl 2, cl 2(3) and cl 2(4)
State Administrative Tribunal Act 2004 (WA), s 17(1), s 17(3), s 27(1), s 29(1)
Taxation Administration Act 2003 (WA), s 3, s 34, s 37, s 40
(Page 2)
Result:
Applications allowed
Decisions of respondent set aside
Reassessment ordered
Category: B
Representation:
Counsel:
Applicant : Mr PF Fletcher
Respondent : Ms KL Low
Solicitors:
Applicant : Solomon Brothers
Respondent : State Solicitor's Office
Case(s) referred to in decision(s):
JM Bestall and Commissioner of State Revenue [2005] WASAT 32
Young and Commissioner of State Revenue [2005] WASAT 296
Case(s) also cited:
Nil
(Page 3)
Summary of the Tribunal's decision
1 A taxpayer objected to assessment of land tax on the basis that two properties and an adjoining property on which the tax payer's dwelling house was erected should be treated as a single private residential property.
2 The property on which the dwelling house was constructed was separated from the adjoining lot by a brick wall – no wall separated these lots from the third adjoining property.
3 A studio and garage were constructed on the lot adjoining the dwelling house and planting of trees, shrubs and vegetables had taken place on the two adjoining lots. The tax payer and her family used the lots for recreational and other purposes.
4 The Tribunal was satisfied that the three properties were established and used by the tax payer and her family as one integrated area that constructed her place of residence.
5 The tax payer appeals against the assessments upheld by the Tribunal.
Background
6 At all material times the applicant was the owner of three lots of land in Wavell Road Dalkeith; they are street No 11 (Lot 11), street No 13 (Lot 13), street No 15 (Lot 15). There is a private residence on Lot 11 which was occupied at all material times by the applicant and her family. At the moment no private residences exist on Lots 13 and 15.
7 For assessment years ending the 30 June 2004, 30 June 2005 and 30 June 2006 the respondent assessed land taxes as payable on Lots 13 and 15 on the basis that firstly, Lots 11 and 13 were together not a single property, and secondly, Lots 11, 13 and 15 were together not a single property and therefore neither Lots 13 or 15 were exempt in the relevant years from land tax pursuant to s 21 of the Land Tax Assessment Act 2002 (WA) (the LTA Act). In short, the respondent refused to grant the exemption because each of Lots 13 and 15 together with Lot 11 were not established and used by the applicant and her family as an integrated area that constituted the applicant's place of residence, and therefore could not be treated as a single private residential property.
(Page 4)
8 Objections were lodged by the applicant to the assessments and the respondent disallowed such objections. The objections by the applicant were on the basis that Lots 11 and 13 and Lots 11, 13 and 15 formed part of her "private residential property" within the meaning of s 21 of the LTA Act and cl 2(4) of the Glossary to the LTA Act (the Glossary).
9 The applicant then appealed to this Tribunal pursuant to s 40 of the Taxation Administration Act 2003 (WA) (the TA Act) seeking a review of such decisions.
10 Before the hearing the appeal in relation to the year ending 2003/04 was withdrawn.
The issues
11 The primary issue for determination by the Tribunal is whether the respondent was correct in disallowing the applicant's objections to the assessment of land tax for the assessment years ending 30 June 2005 and 30 June 2006 on: (a) Lot 13; and (b) Lot 15.
12 There are other questions which are required to be determined in relation to the primary issue, for example,
(a) for the purpose of determining the use of a lot or parcel as "private residential property" whether the lot on which the private residence is constructed being Lot 11 and Lot 13 and/or Lot 15 are established, and used by the applicant and her family who reside there, as one integrated area that constitutes the place of residence, and therefore are to be treated as a single private residential property pursuant to the LTA Act;
(b) if the answer to (a) is yes, is it appropriate to treat (i) Lot 11 and, either Lot 13 or Lot 15; or (ii) Lot 11, Lot 13 and Lot 15 as a single property for evaluation and assessment pursuant to the LTA Act;
(c ) if the answer to (b) is yes, Lot 11 and; (i) either Lot 13 or Lot 15; or (ii) Lot 13 and Lot 15; are used by the applicant as "primary residence" for the purpose of the exemption in s 21 of the LTA Act.
The relevant legislation
13 The statutory context in which these appeals arose was canvassed and set out by the Tribunal in JM Bestall and Commissioner of State
(Page 5)
- Revenue [2005] WASAT 32 and followed by the Tribunal in Young and Commissioner of State Revenue [2005] WASAT 296.
14 It would be of assistance to the parties and to a proper understanding of these reasons for the Tribunal to repeat the summary of the statutory context set out by the Tribunal in Bestall at pages 6 to 9:
"The Statutory Context
10. Section 5 of the Land Tax Assessment Act provides that land tax is payable for each financial year for all land in the State except land that is exempt under s 17. Section 17 provides that land is exempt from land tax for an assessment year if the Commissioner grants an exemption for the assessment year under s 20 or if it is exempt for the assessment year under another provision of Pt 3 of the Act.
11. The respondent has not granted an exemption for any of the assessment years in question under s 20 of the Land Tax Assessment Act. Section 21 of the Act, which is contained in Pt 3, provides, in part, as follows:
'21. Private residential property owned by individuals
(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; …'
'lot' has the meaning given in clause 2; …
- 'parcel' means two or more lots of land that are treated as a single property under clause 2;
'primary residence', in relation to an individual, means the individual's sole or principal place of residence;
'private residence' means a building or part of a building that was occupied or fit to be occupied and intended by the owner to be occupied, as a place of residence of one or more individuals [with relevantly immaterial exceptions] …
'private residential property' means -
(a) a lot of land on which there is a private residence;
(b) a parcel of land on which there is a private residence constructed so that part of the residence stands on each of the lots of land that constitute the parcel;
(c) an interest in a home unit; or
(d) for the purposes of s 24 and s 28 -
a lot of land on which a private residence is being or has been constructed;'.
- 13. Clause 2 of the Glossary to the Land Tax Assessment Act provides, in part, as follows:
'2. Lots and parcels of land
(1) A reference to a lot of land is a reference to a defined portion of land -
(a) that is depicted on a plan or diagram publicly exhibited in the office of the Department of Land Administration, or deposited in the Department within the meaning of the Transfer of Land Act 1893 or the Registry of Deeds and for which a separate … certificate of title has been or can be issued, registered or depicted on a
- subdivisional plan or diagram, whether so exhibited or deposited or not; and
- (b) that is approved by the Town Planning Board or the Western Australian Planning Commission …
- (2) A reference to a lot of land includes a reference to the whole of any land that is the subject of -
…
(c) a certificate of title registered under the Transfer of Land Act 1893; [or] …
(g) a lot depicted on a strata plan; …
(3) If two 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.
(4) However, for the purpose of determining the use of a lot or parcel of private residential property, two or more lots of land are not to be treated as a single private residential property unless the Commissioner is satisfied that the lot or lots on which the private residence is constructed and each other lot are established, and used by the individuals who reside there, as one integrated area that constitutes the place of residence.' (Emphasis added.)
- 14. Section 3 of the Land Tax Assessment Act and s 3 of the Taxation Act each provide that the two Acts are to be read together as if they formed a single Act. Section 34 of the Taxation Act confers on a taxpayer the right to object to an assessment. Section 37 provides, in part, as follows:
'37. Consideration of objections
(1) The Commissioner must consider and determine an objection, having regard to -
- (a) the grounds set out in the objection and any other relevant material submitted by the taxpayer;
(b) any other information obtained by the Commissioner that is relevant to considering the objection, whether the information was obtained before or after the objection was lodged.
- (2) The onus of establishing that an assessment or decision to which an objection relates is invalid or incorrect lies on the taxpayer. …'
- 15. Section 40 of the Taxation Act provides that a person who is dissatisfied with the respondent's decision on an objection may apply to the Tribunal for a review of the decision.
16. In accordance with s 17(1) of the Tribunal Act, the present proceedings fall within the Tribunal's 'review' jurisdiction. In accordance with s 17(3) of the Tribunal Act, the decisions of the respondent to disallow the applicant's objections are each a 'reviewable decision' for the purposes of the Tribunal Act. Section 27(1) of the Tribunal Act provides that 'the review of a reviewable decision is to be by way of a hearing de novo. Section 29(1) of the Tribunal Act provides that:
'The Tribunal has, when dealing with a matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision-maker in making the reviewable decision.'"
16 It was pointed out by the Tribunal in Bestall that cl 2(4) by including the words "and each other lot" has the effect of extending the exemption status under s 21 to a lot which does not contain any part of a private
(Page 9)
- residence where the precondition as set out in that subclause is satisfied. The Tribunal concluded that:
"On the proper construction of cl 2(3) and cl 2(4) of the Glossary, in order for the discretion under cl 2(3) to treat the lots in question as a single, private residential property to be enlivened, the respondent or the Tribunal must be satisfied by the taxpayer of the following two preconditions:
(i) 'that the lot or lots on which the private residence is constructed and each other lot are established … as one integrated area that constitutes the place of residence'; and
(ii) 'that the lot or lots on which the private residence is constructed and each other lot are … used by the individuals who reside there, as one integrated area that constitutes the place of residence'."
"29. These are each non-technical English words and are to be given their natural and ordinary meanings. According to the following Australian dictionaries, the relevant meaning of these words is as follows:
'established' - (verb)
'to set up on a firm or permanent basis; institute; found: to establish a government, a business, a university, etc.' (The Macquarie Dictionary Revised Third Edition p 643)
'set up or consolidate (a business, system, etc.) on a permanent basis' (The Australian Oxford Dictionary p 445)
'used' - (verb)
'to avail oneself of; apply to one's own purposes: use the front room for a conference' (The Macquarie Dictionary Third Revised Edition p 2068)
- 'cause to act or serve for a purpose; bring into service; avail oneself of (rarely uses the car; use your discretion)' (The Australian Oxford Dictionary p 1475)
'integrated' - (adjective)
'of or relating to a … whole; harmonious' (The Macquarie Dictionary Third Revised Edition p 983)
'whole; complete' (The Australian Oxford Dictionary p 682).
- 30. The dictionary definitions set out above suggest that the requirement that the lots in question 'are established' as one integrated area necessitates a degree of permanence. The definitions also suggest that the concept of an 'integrated area' involves all of the lots in question constituting a 'whole' that can be characterised as a place of residence. The ordinary meaning of the words conveyed by the text of the statute is confirmed by reference to the Explanatory Memorandum to the Bill which became the Act; see Interpretation Act 1984 s 19(1)(a). The Explanatory Memorandum states at p 47 that:
'Residential usage of the vacant lot may comprise a common boundary fence, a tennis court or swimming pool, or some other structure that evidences that the lot is being used as an integral part of the residence of the owner.'
31. The two pre-conditions identified above each involve questions of fact and degree; cf BHP Billiton Petroleum Pty Ltd v Chief Executive Officer of Customs(2003) 129 FCR 31 at 39. These questions of fact are to be determined entirely objectively…"
18 In their arguments counsel for each of the applicant and respondent agreed with the approach taken by the Tribunal in Bestall (and in due course Young) as to the interpretation of the relevant legislation.
19 As to the application of the facts in Bestall and Young to the law, counsel for the appellant submitted that each case could be distinguished from the present. On the other hand the respondent suggested that the
(Page 11)
- reasoning, and the result of Bestall and Young could be applied in the present case. This will be commented on in due course.
20 In the course of their submissions the respondent in particular referred to the Explanatory Memorandum made available to the Parliament on the introduction of the LTA Act. The Memorandum said (pages 47 and 48):
"Subclause (3) allows the Commissioner to treat two or more lots with common boundaries that are in the same ownership as a single property for land tax purposes if it is considered appropriate. Where this occurs, the 'single property' is considered to be a 'parcel' as per the definition of that term in the Glossary.
Subclause (4) provides that for determining the use of a lot or parcel or private residential property, 2 or more lots are not to be treated as a single private residential property unless the Commissioner is satisfied that the lots are established and actually used by the owners as one integrated area that constitutes a place of residence.
The operation of subclauses (3) and (4) can be illustrated as follows.
Where a person owns two adjoining lots, one of which is vacant and the other includes the person's residence, the vacant lot is assessed for land tax purposes. However, were both lots are clearly used as part of the residence, they are treated as one parcel and an exemption is granted.
Residential usage of the vacant lot may comprise a common boundary fence, a tennis court or swimming pool, or some other structure that evidences that the lot is being used as an integral part of the residence of the owner. Where the vacant lot is not actually used by the owner as an integral part of the residence at 30 June (eg. he or she may intend to develop a tennis court or add a swimming pool in the future), the lot will be subject to tax."
21 Counsel for the applicant made the point, and the Tribunal agrees, that the examples in the Explanatory Memorandum were not exhaustive and that other situations could come within the operation of subclauses (3)
(Page 12)
- and (4) including a situation where lots were being examined upon which there were no buildings or other structural improvements.
22 There must, in the view of the Tribunal, be some use which is connected to the occupation of the "town lot", on the other lots, the Tribunal having to examine carefully the usage from a point of view of some necessary interaction between the lot upon which the residence is built and the vacant lot or lots under consideration.
23 In the course of making the assessments complained of by the applicant, the respondent relied upon certain practice directions issued by the respondent from time to time pursuant to the LTA Act. The applicant contended, and the respondent agreed, that in dealing with a review of this nature by the Tribunal, the Tribunal is not bound by the practice directions as the determination by the Tribunal is on a de novo basis, the relevant statutory provisions being applicable and as described as above. This is obviously the correct approach.
The facts and application of the statute to such facts
24 The agreed facts are as follows:
As at midnight 30 June 2004:
1. Prior to 22 November 2002, the applicant made separate offers to purchase Lot 11 and Lot 13, with the offer to purchase Lot 13 conditional upon the applicant succeeding in purchasing Lot 11.
2. On 22 November 2002, the applicant became the registered proprietor of Lot 11, which had an existing near-new two-storey house.
3. On 25 February 2003, the applicant became the registered proprietor of Lot 13, which had an existing brick and tile house.
4. The house on Lot 13 was leased out to a third party until sometime in August 2003. As soon as the tenancy arrangement came to an end, the applicant demolished the house on Lot 13 and cleared the entire block, apart from specific mature trees and shrubs.
5. At all relevant times:
- a) there was an uninterrupted brick wall cross the whole of the boundary separating Lot 11 and Lot 13;
b) Lot 11 and Lot 13 were not commonly fenced as one common area.
- 6. Prior to 30 June 2004, the applicant made an application to the City of Nedlands to conduct various works on Lot 13.
- Between 1 July 2004 and midnight 30 June 2005:
7. On 17 September 2004, the applicant became the registered proprietor of Lot 15, which had an existing house.
8. As soon as feasible after 17 September 2004, the applicant demolished the house on Lot 15 and the dividing fence between Lot 13 and Lot 15, and cleared much of the vegetation from the block.
9. At all relevant times:
a) there was an uninterrupted brick wall across the whole of the boundary separating Lot 1 and Lot 13; and
b) Lot 11, Lot 13 and Lot 15 were not commonly fenced as one common area.
10. Prior to 30 June 2005, the applicant applied to the City of Nedlands to conduct various works on Lot 13 and Lot 15, and a building licence was granted to the applicant to construct on Lot 13 a two-car garage with a studio on top and front gates across Lot 13 and 15.
(Page 14)
- she decided, jointly with her husband, to establish a new home in suburban Perth (instead of the farm) which needed to have a large amount of outdoor land associated with it. Once she had acquired such a property she would sell the farm. The applicant said that after inspecting Lots 11 and 13, she concluded together they met her requirements.
26 She saw and was attracted to the house on Lot 11 because it was one of the more modern houses in the area and because it was next to an old house on Lot 13 which was capable of demolition. It was her intention, if possible, to purchase both Lots 11 and 13 and then to use Lot 13 as a "backyard" to Lot 11. To achieve this aim, it was a condition of the applicant's offer to purchase Lot 13 that she would succeed in purchasing Lot 11 – the contract for sale attached to the applicant's statement confirms that the offer for Lot 13 was "conditional upon the purchaser's offer to purchase 11 Wavell Road, Dalkeith being accepted by the vendor of such property and the sale and purchase of such property being fully completed and settled". Further, it was a condition of the contract that Lot 13 would become available for vacant possession etc and lease agreements would expire and not be renewed after the 26 July 2003 – the offer was dated 2 October 2002. The conditions being fulfilled, the applicant was able to purchase Lots 11 and 13.
27 The applicant said that she was attracted to Lot 13 because it had what she wanted as a backyard in the sense that there were substantial established native trees and shrubs, room in which you could establish a vegetable garden and a natural environment and room in which her son could play, supervised, until such time as she could obtain planning approval for and completing of the construction of a front fence of the block facing on Wavell Road.
28 The applicant was not interested in purchasing Lot 11 on its own because it had very little space at the rear of the house for her son to play or for her to do any gardening – the photographs relied on by the applicant show that the back area of Lot 11 is taken up largely by a swimming pool with only small areas of lawn and other areas for recreation purposes. There seems to be some objective support for the applicant's evidence in relation to Lot 11.
29 As soon as the tenancy arrangement on Lot 13 came to an end, the applicant demolished the house and cleared the entire block apart from certain mature trees and shrubs.
(Page 15)
30 Lot 13 was to be developed in two stages – firstly, to remove the house and use it as a native bush garden/vegetable garden, and, secondly, once plans were finalised and improved to transform the garden into a formal landscape garden which would fit in better with the style of the house on Lot 11.
31 Shortly after demolishing the house on Lot 13, therefore, the applicant engaged a building designer and landscape architect to commence design work for the property. This took a considerable amount of time during which eight different design concepts were prepared before the applicant settled on a particular concept. Approval from the City of Nedlands was required for the works she proposed to conduct as part of the second stage.
32 After the demolition of the house the son played in the area on Lot 13 which the applicant described as the "backyard" of Lot 11 "doing what a child of that age would normally do", also the family generally had picnics there etc.
33 There was and is a dividing wall between Lots 11 and 13. It was decided that the demolition of this wall should be delayed until a new fence had been constructed along the Wavell Road boundary of Lot 13 because the demolition of the house on that lot left the whole of Lot 13 open and unsecured. Lot 13 was already secured at its western boundary because of the existing dividing fence between Lots 13 and 15. There was a fence on the northern boundary of Lot 13. The applicant made a number of security improvements to Lot 11 including large gates for the front driveway and metal grills between the open piers at the front of the lot.
34 A vegetable garden was also commenced in Lot 13 and she planted some native plants which were later stolen.
35 The applicant was persistent in her evidence that the reason for the continuance of the dividing fence between Lots 11 and 13 was security and in order to access Lot 13, she and her family walked from the front yard of Lot 11 and around the end of the fence into Lot 13.
36 It was rather difficult for the Tribunal to understand why a gate was not made into the common wall with some security locking arrangements; however, it may have been, as the applicant said, that it was equally as easy and appropriate in terms of the visual appearance to use the access around the front of the block.
(Page 16)
37 The applicant said that her family used Lot 13 on an almost daily basis as part of living in the house of Lot 11, growing vegetables there and planting native trees and shrubs. The water supply was provided by hoses draped across the wall from Lot 11 to Lot 13. The vegetable garden established on Lot 13 was used for their family, the vegetables being cultivated until clearing where it was done for the construction of a garage and studio on Lot 13 – the vegetable garden was moved within Lot 13 on the advice of her landscape gardener and ultimately moved to a position on Lot 15. The applicant pointed out the positions of the original vegetable garden on Lot 11 and the new one on Lot 15 on the aerial photographs which were to be seen attached to the statement of Mr Jonathan Neil Raven on behalf of the respondent (JNR 1, 2 or 3). When the house on Lot 13 was demolished, damage was done to a particular tree and at considerable expense another tree was relocated onto that property.
38 In September 2004 the property at 15 Wavell Road (Lot 15) became available for purchase. Because the applicant wanted to incorporate its land as an extended garden for the land at Lots 11 and 13, she bought Lot 15 in September 2004 and immediately demolished the house on that lot together with the dividing fence between that and Lot 13.
39 She had still retained the dividing fence between Lots 11 and 13 because she had not obtained final approval from the Council for the new fence in front of Lots 11 and 13, the design of which had been objected to by neighbours and which now would extend all the way from Lot 11 to the western boundary of Lot 15. She was also then required to change her plans for landscaping which had been submitted to the Council.
40 On 1 November 2004, the plans for building on Lot 13 were finally approved by the City of Nedlands except for the front fence; on 24 November 2004 the front fence plans were refused but the Council was prepared to approve these plans requiring an open rather than a solid fence. The applicant reluctantly accepted this condition and proceeded toward a contract for the building of the agreed fence together with a substantial two-car garage together with a studio on top, on Lot 13. This substantial structure was built to match the house on Lot 11 and for the use of the family living in Lot 11. She also relocated some substantial trees between Lots 13 and 15 and moved a large tree from Lot 13 to Lot 15. The cost of removing the fig tree was some $7000. The family continued to access Lots 13 and 15 as before as there was no gate in the fence itself "yet". She said that they do this on a daily basis.
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41 Although the applicant was inclined to exaggerate from time to time in the course of her evidence, the Tribunal is prepared to accept that there was a considerable amount of use by the family of Lots 13 and 15 once they became available to the family. There is no evidence to the contrary from the respondent.
42 Occasionally, the applicant would take flowers and other vegetation from Lots 13 and 15 and use them for decorating the house and on one occasion took a part of a tree from Lot 13 for use as a Christmas tree. Some fruit was collected from trees on Lots 13 and 15.
43 The building works on Lot 13 were substantially completed by March 2006.
44 The applicant was shown the aerial photographs taken on behalf of Mr Raven on 1 January 2003 (JNR 1), 2 December 2003 (JNR 2) and December 2004 (JNR 3). She pointed out the various changes to the lots which had occurred over the time and pointed to the vegetation etc which existed on the properties when they were bought and also additions to them by her.
45 She said that on Lot 13 she had planted native trees to block views to the south to Waratah Avenue but these were removed in September 2005 because they were not capable of being moved. The aerial photographs are helpful in the sense that they provide a aerial view of the position of the lots etc although in the opinion of the Tribunal, do not clearly show the extent of vegetation on the lots as it was at ground level. The Tribunal is of the view that the photographs show the vegetation to be more sparse than in fact one would see if one were to be at ground level. Accepting that there was a vegetable garden on the lots at certain stages the aerial views do not show clearly what they in fact consisted of and the Tribunal accepts that there was a degree of cultivation on Lots 13 and 15 at various times.
46 Photographs also provided by the applicant show that there have been some trees bulldozed to build the garage on Lot 11 to park cars and store other items.
47 The applicant was cross-examined on her evidence, the photos again being referred to, and confirmed that no specific play area was cornered off on Lot 13, she wanted her child to "run free" on the land. There was no sand patch prepared because there was adequate grass and sand on the properties. She was rather vague as to the number of native trees she had
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- planted (although it seemed to be up to 20 in number) and also as to the specifics of the vegetable garden.
48 As the applicant gave her evidence concerning the various photos they tended to confirm rather than detract from the evidence of the applicant – in general terms the cross-examination of the applicant did little to detract from her evidence she had given.
49 On behalf of the respondent, evidence was given by Mr Jonathan Neil Raven by way of a statement (Exhibit B) – Mr Raven is a Senior Inspector employed by the respondent. Relevantly, he said that on 7 September 2005 together with Mr Glen Foote, an inspector in the Compliance Division of the office, they inspected Lots 11, 13 and 15 from the curb side and took three digital photographs from the curb side – document No 17 in the respondent's bundle of documents. He said that there were a few dead trees devoid of leaves down the right hand side of Lot 13 and the rest of Lot 13 was "just shrub grass". He saw no plants or trees which formed any native garden or other type of garden on either Lots 13 or 15 and saw no landscaping work or other work as depicted on the plans supplied by the applicant – the applicant had stated that there had been landscaping plans none of which had come to fruition. He gained the impression that Lots 13 and 15 had been amalgamated and were part of a property development. As a result of his inspection, he concluded that the applicant's claim that Lot 13 formed an integral part of a residence located on Lot 11 could not be established.
50 He again inspected the lots on 18 October 2005 and took a digital photograph from the curb side of Lot 13 (document No 11 on the respondent's bundle of documents) – he stayed there for about 5 minutes. His observations of the lots were the same as that in September 2005, however, he saw an elaborate garage built on the properties - the building appearing to be nearing completion with a wrought iron gate being erected at the entrance of Lot 13.
51 Mr Raven's evidence was of limited value to the respondent. Its strength is somewhat reduced by the limitations Mr Raven faced in not being able to make an "on-site" inspection of the properties and then for any length of time. He was not really in a position to contradict the applicant's evidence and therefore the Tribunal accepts the applicant's evidence that the family used Lots 13 and 15 as the "backyard" of Lot 11 although the planned landscaping etc has not come to fruition as at this stage. There was a photograph submitted by the applicant which showed a street frontage of Lots 11 and 13 which shows the existing, and some
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- intended extension, of landscaping of the front; fencing and paving is in fact completed.
52 Looking at the evidence as a whole the Tribunal is of the view that there is little evidence on the part of the respondent which had the effect of contradicting the evidence of the applicant and therefore her case to any great degree.
53 One significant fact in favour of the applicant's position is the clear lack of room for recreational purposes other than the swimming pool in the back area of Lot 11 – this is consistent with the applicant's position that Lot 13 was purchased so that that could provide the recreational area unavailable in Lot 11. It further supports the applicant's position that Lot 15 was purchased to extend the available area in Lot 13 and therefore to Lot 11, for ongoing recreational and other uses by the family.
54 The respondent submitted that Bestall and Young could be relied on by it, not only from the point of view of the legal principles established but also the decision itself. It is clear however that both cases are distinguishable on the facts. For example, in Bestall the adjoining vacant land had been developed as strata lots by the applicant with separate services such as water, sewerage and postal addresses. Further, the applicant did not share a central driveway with the owners with some of the other lots. In relation to Young's case each of the two lots sought to be treated as one had upon them built a separate residence.
55 Turning to the first of the two preconditions identified in Bestall and applicable here, and remembering that any establishment on the lots must be "firm and permanent" "as one integrated area", in the present case as soon, as possible, the houses on Lots 13 and 15 were demolished and the wall between those lots was removed. The purchase of Lot 11 was conditional on Lot 13 being available for purchase – this was achieved and the applicant was able to hold, on a permanent basis, two lots side by side. Lot 15 was bought as soon as it became available. A common frontal fence was built and the dividing wall between Lots 13 and 15 was removed – these arrangements have a flavour of permanence. The garage and studio was built on Lot 13 for regular use by the family and a number of trees planted on Lots 13 and 15.
56 In the Tribunal's view, these various matters, and the evidence generally, satisfy the first of the two pre-conditions under cl 2(3) of the Glossary.
(Page 20)
57 As to the second pre-condition, the facts as found (and the evidence generally) shows a continuous and varied use by the applicant and her family of the lots; such use involving recreation, the growing of vegetables and use of the garage on Lot 13. The regular supplying of water from Lot 11 to Lot 15 with the paying of the costs by Lot 11 confirm the permanence of this arrangement.
58 Once again, in the Tribunal's view, the second pre-condition has been satisfied by the applicant – Lots 11, 13 and 15, on the evidence suggest a "whole" that can, as required by cl 2(3), be regarded as a single property that constitutes the applicant's place of residence.
59 The only factor which could be seen to detract from this conclusion is the continued existence of the wall between Lots 11 and 13, and the method of access adopted by the family into Lots 13 and 15. In the end the Tribunal considered that the applicant's explanation for this was reasonable in the circumstances and that security was the overriding factor in the decision not to demolish the wall or to build an entry gate into Lot 13.
Conclusions on Issues
60 In the light of the above findings, the Tribunal determines that the respondent was in error in disallowing the objections to the assessment of land tax for the years 20 June 2005 and 30 June 2006 on Lots 13 and 15.
61 In particular, therefore, the Tribunal finds:
a) Lots 11, 13 and 15 are established and used by the applicant and her family as one integrated area and therefore should be treated as a single residential property under the LTA Act.
b) It is appropriate to treat Lots 11, 13 and 15 as a single property for evaluation and assessment under the LTA Act.
c) Lots 11, 13 and 15 are used by the applicant as her "primary residence" for the purpose of exemption under s 21 of the LTA Act.
Orders
1. The applications for review brought pursuant to s 40 of the Taxation Administration Act of the disallowance by the
- respondent of the applicant's objections to the assessment of liability for last tax for 2004/2005 and 2005/2006 are allowed.
- 2. The decisions of the respondent are set aside.
3. The matters be remitted back to the respondent for new assessments to be issued in accordance with the decision of the Tribunal.
4. The parties be given liberty to apply.
I certify that this and the preceding [61] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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HON R VIOL, SENIOR SESSIONAL MEMBER
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