E-Synergies.com Pty Ltd Pty Ltd ATF the Num-Num Trust v Chief Commissioner of State Revenue

[2025] NSWCATAD 262

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

E-Synergies.com Pty Ltd Pty Ltd ATF the Num-Num Trust v Chief Commissioner of State Revenue [2025] NSWCATAD 262

Hearing dates:

29 September 2025

Date of orders:

24 October 2025

Decision date:

24 October 2025

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

EA MacIntyre, Senior Member

Decision:

The assessment of the Respondent is confirmed.

Catchwords:

ADMINISTRATIVE LAW - reviewable decision - correct and preferable decision - Civil and Administrative Tribunal - objection - appeal – administrative review

STATE REVENUE - land tax - exemption - land used for primary production - rural land - dominant use - cultivation - maintenance of animals - production of bottled water

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Biodiversity Conservation Act 2016 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Land Tax Act 1956 (NSW)

Land Tax Management Act 1956 (NSW)

Native Vegetation Act 2003 (NSW).

Taxation Administration Act 1997 (NSW)

Cases Cited:

Chandrala v Chief Commissioner of State Revenue [2021] NSWCATAD 50

Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11

Dwayne Taylor FT Pty Limited as trustee for Dwayne Taylor Family Trust and DA and P Taylor v Chief Commissioner of State Revenue [2024] NSWCATAD 8

Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20

Leda Manorstead v Chief Commissioner [2010] NSWSC 867

Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366

Longford Investments Pty. Limited v. Commissioner of Land Tax (N.S.W.) 78 ATC 4264

Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133

Pointsyde Investments Pty. Ltd. v. Clyne. 86 ATC 4335

Sonter v Commissioner of Land Tax (NSW) (1976) 7 ATR 30

Spedding Estates Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 117

Texts Cited:

None

Category:

Principal judgment

Parties:

E-Synergies.com Pty Ltd Pty Ltd ATF the Num-Num Trust (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Solicitors:

Self represented (Applicant)
Crown Solicitor (Respondent)

File Number(s):

2025/00169283

Publication restriction:

None

REASONS FOR DECISION

1. The applicant, E-Synergies.com Pty Ltd ATF the Num-Num Trust (“Applicant”), challenges a number of assessments of land tax made by the Chief Commissioner of State Revenue, the respondent in this matter (“Respondent”).

2. The Applicant considers that exemption from land tax should apply because the land the subject of the assessments is, in the Applicant’s submission, land used for primary production. The Respondent disagrees.

3. Exemption applies if the dominant use of the land is for;

1. cultivation, for the purpose of selling the produce of the cultivation; or

2. the maintenance of animals for the purpose of selling them or their natural increase or bodily produce.

4. The question for determination is whether or not such an exemption applies.

Background

5. The Applicant owned certain land in NSW during the land tax years in issue. The land was located in the Northern Rivers area of NSW. It was zoned rural.

6. Mr Steve Toneguzzo was a director of the Applicant.

7. The Applicant leased part of the land to a different entity, Exotic Organics Pty Ltd. That entity was a trustee of a trust. That trustee had a right to graze cattle on the leased land. The land, however, had multiple uses.

8. The first use was the grazing of cattle. The cattle were both beef and dairy cattle.

9. The land also contained two residential dwellings. They are described respectively as the villa and the cottage. The second use was the rental of both properties. The cottage was leased under residential tenancy agreements for certain periods during the relevant land tax years. The villa was also leased under residential tenancy agreements for periods during the relevant land tax years.

10. The third use was growing bamboo and trees upon the land. There was evidence of sales of bamboo and timber products grown on the land.

11. On 7 August 2022, the Applicant entered into a Property Vegetation Plan (“PVP”) with the Northern Rivers Catchment Management Authority pursuant to the Native Vegetation Act 2003 (NSW). That agreement remained in force until November 2023. Under the PVP, the Applicant undertook certain obligations for revegetation and restoration and weed control, maintenance, regrowth and riparian monitoring.

12. Between 2019 and 2021, a café/restaurant operated on the land. The operator was the lessee. This was the fourth use.

13. From 2022, the lessee started a business of bottling and selling mineral water taken from the land. This was the fifth use.

14. A sixth use included the growing of fruit, vegetables, herbs and roots on the land. The Applicant also claimed that chickens were kept on the land for the production of eggs.

15. After an investigation, the Respondent issued assessments for land tax on 18 October 2024 for the 2020 to 2024 land tax years. On 23 October 2024, the Applicant lodged an objection to the assessments. On 13 February 2025, the Respondent disallowed the Applicant’s objection.

16. On 14 January 2025, the Respondent issued a land tax notice of assessment to the Applicant for the 2025 land tax year. On 29 May 2025, the Applicant lodged an objection to that assessment. On 23 June 2025, the Respondent disallowed the objection.

17. The Applicant commenced proceedings on 2 May 2025 seeking administrative review of the assessments of land tax for the 2020-2024 land tax years. As a result of an amended application, all of the assessments for 2020-2025 are the subject of these proceedings.

Applicant’s right of review

18. Where land tax has been assessed, s 86 of the Taxation Administration Act 1996 (NSW) (“Administration Act”), allows rights of objection to a taxpayer dissatisfied with an assessment. This is an internal review process under which the Chief Commissioner of State Revenue, the Respondent in these proceedings, must consider and determine the objection (s 91 of the Administration Act).

19. A taxpayer who is dissatisfied with the decision made upon the Respondent’s determination of an objection, may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 (“NSW”) (“ADR Act”)of the decision of the Chief Commissioner of State Revenue.

20. These circumstances have arisen in the present matter as set out in the background above, so bringing the matter within the jurisdiction of the Tribunal.

21. The onus of proving their case lies with the Applicant (s 100(3) of the Administration Act).

22. The Tribunal, dealing with the taxpayer’s application, may do one or more of the following under s 101 of the Administration Act:

“(a) confirm or revoke the assessment or other decision to which the application relates,

(b) make an assessment or other decision in place of the assessment or other decision to which the application relates,

(c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

(d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

(e) make any further order as to costs or otherwise as it thinks fit.”

Consideration

23. Land tax is to be levied and paid on the taxable value of all land situated in New South Wales which is owned by taxpayers, other than land which is exempt from taxation under the Land Tax Management Act 1956 (NSW) (“LTMA”) (s 7). The rates of land tax payable are set out in the Land Tax Act 1956 (NSW).

24. Exemption for certain land used for primary production is allowed under s 10AA of the LTMA. That section provides as follows:

“10AA   Exemption for land used for primary production

(1)  Land that is rural land is exempt from taxation if it is land used for primary production.

(2)  Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land—

(a)  has a significant and substantial commercial purpose or character, and

(b)  is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).

(3)  For the purposes of this section, land used for primary production means land the dominant use of which is for—

(a)  cultivation, for the purpose of selling the produce of the cultivation, or

(b)  the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or

(c)  commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) or the commercial farming of fish, molluscs, crustaceans or other aquatic animals, or

(d)  the keeping of bees, for the purpose of selling their honey, or

(e)  a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or

(f)  the propagation for sale of mushrooms, orchids or flowers.

(4)  For the purposes of this section, land is rural land if—

(a)  the land is zoned rural, rural residential, non-urban or large lot residential under a planning instrument, or

(b) the land has another zoning under a planning instrument, and the zone is a type of rural zone under the standard instrument prescribed under the Environmental Planning and Assessment Act 1979, section 3.20, or

(c)  the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land”.

25. For the exemption claimed by the Applicant to apply, the land in question must, first of all, be “rural land” within the meaning of the LTMA. There was no dispute that the land was rural land as a consequence of its zoning.

26. Where land is rural land, the availability of exemption depends on whether the land is “land used for primary production”. Land will fall within this description if the “dominant use” of the land is a use that falls within one of the subparagraphs of s10AA(3).

27. The question for determination in this matter is whether the land in question had a dominant use for “cultivation, for the purpose of selling the produce of the cultivation” within the meaning of s 10AA(3)(a). Alternatively, the question was whether the dominant use was the maintenance of “animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce” within the meaning of s 10AA(3)(b). The Applicant claimed that both were uses of the land.

28. The Applicant also said that;

1. there was no power to assess land tax retrospectively for the 2020 to 2024 land tax years;

2. that part of the land covered by the PVP and zoned for environmental conservation should be exempt under s 10(1)(p) of the LTMA;

3. the land should be exempt from land tax for the 2021 to 2022 years as it was impacted by flooding;

4. the revenue and income received should not be the dominant or sole determinant of whether the land was exempt as primary production land;

5. The land should be apportioned relative to the percentage of land use for primary production and non primary production activities;

6. land tax should be refunded and payment deferred until the sale of the land for hardship reasons;

7. the residential tenancy agreements will need to be terminated early to facilitate sale of the land.

29. The Respondent’s submission, on the other hand, was that the Applicant had not discharged the onus of proof to show that the dominant use was what the Applicant claimed. The Respondent said that the evidence did not show that the dominant use of the land was for primary production within the meaning of s 10AA(3) but was something else, namely use as a cafe/restaurant or earning rent from the cottage and villa.

What does “dominant use” mean?

30. The question for determination is what was the “dominant use” of the land. If it was a “use” that fell within ss 10AA(3)(a) or (b), the Applicant’s will succeed in its claim for exemption from land tax.

31. The matter in issue, first of all, requires consideration of what “use” means within s 10AA(3). The Courts have said that what is a “use” of land within the meaning of s 10AA(3) is determined having regard to the physical use of the land. In Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11, the Court of Appeal said, at [61]:

“I am of the opinion that the concept of “use” relevant to s 10AA as a whole (and s 10AA(3) in particular) – a concept in which the preposition “for” plays a central role – is one of physical deployment of Isaacs J’s “concrete physical mass” in pursuance of a particular purpose of obtaining present benefit or advantage from it, with deployment understood as including not only activity but also inactivity deliberately adopted as a means of obtaining such actual and present advantage from the land; and with purpose understood as objectively ascertained purpose. There is no requirement that immediate productive return be achieved, as long as some benefit or advantage accrues. In a s 10AA(3) case, each “use” considered in the search for “dominant use” must be of the character I have described. Otherwise, the necessary process of comparison cannot sensibly be undertaken”.

32. The Applicant’s claim for exemption under s 10AA(3)(a) relevantly requires that they show that cultivation was “for the purpose of selling the produce of the cultivation”. It is well accepted that establishing what is a purpose of cultivation within the meaning of s 10AA(3)(a) depends not on the subjective intention of the user of the land but on what is objectively shown in the evidence as a purpose of commercial gain. The Court of Appeal in Metricon said at [59] and [60]:

“Purpose is a concept necessarily at work in s 10AA(3). Each of the six activities in paras (a) to (f) has a purpose or objective of commercial gain. There is a distinction, however, between the purpose for which land is acquired, on the one hand, and the purpose for which it is currently being devoted to use, on the other. This point is particularly important when considering any competing use under s 10AA(3). The purpose of acquisition may or may not correspond with the purpose of current use. Land acquired specifically for the sowing of crops may be put to either that use or some other use, such as cattle grazing or residential subdivision development. The inquiry directed by s 10AA(3) is as to current tangible and physical deployment and its purpose, not the purpose of acquisition.

Little is likely to turn on subjective purpose or intention. The question is not what an owner, lessee or other person able to do so decides is to happen in relation to the land. The task is, rather, to determine whether, as an objective matter, the things that that person causes to happen – no doubt in pursuance of the person’s purpose or intention – constitute “use” and, if so, whether (and to what extent) that “use” is a use described in paras (a) to (f) of s 10AA(3). Relevant purposes and intentions are principally those already executed, although the complexion of things already done may be coloured by whatever the relevant purpose or intention envisages for the future”.

33. The Courts have said that the word “dominant” qualifies both the word “use” as well as the “purpose” of the use. In other words, the Applicant must show that both the dominant use and the dominant purpose of that use come within s 10AA. The High Court in Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20, at [28] – [29]:

“The appellant's case turned upon what work should be given to the word "dominant" in s 10AA(3)(b). For the reasons which follow, it should not be accepted that this word only qualifies the phrase "use of which is for ... the maintenance of animals" and no more. Instead, when the text of s 10AA(3) is read in its immediate statutory context and in light of broader statutory and extrinsic context, the word qualifies one composite phrase, namely (and relevantly) "use of which is for ... the maintenance of animals ... for the purpose of selling them ...". The "use-for-a-purpose" construction is thus correct.

The "use-for-a-purpose" construction is supported by the presence of the word "for", which is the last word in the chapeau. As Kirk JA correctly observed, the provision requires that the dominant use be for something. That something is, relevantly here, all of para (b) of s 10AA(3). That paragraph uses a composite phrase that combines an identified use of the land as well as a specified purpose for that use”.

34. What is the dominant use requires assessment of all uses and determination of which use is the dominant use. In Leda Manorstead v Chief Commissioner of State Revenue [2010] NSWSC 867, Gzell J described how this was to be done. It required objective determination of the main, chief or paramount use. He said at [69] – [76]:

“Dominant in its ordinary meaning connotes ruling, prevailing, or most influential. The statute’s reference to a dominant use presupposes that land may be used for more than one purpose and requires a determination of which use of the land is the main, chief or paramount use.

That is a question of fact and degree that may, in the end, be determined as an objective matter of impression having regard to the facts.

In Saville v Commissioner of Land Tax (1980) 12 ATR 7, Roden J was concerned with whether land was used primarily for the maintenance of animals thereon under a former provision in the Land Tax Management Act. The primary use test was not unlike the dominant use test in the present legislation. His Honour said at 10:

“I am of the view that, for any use of the land to justify the statement that the land is used primarily for that purpose, it is necessary not only that that use prevail over any competing use but also that it be sufficiently substantial to prevail over the proposition that the land is primarily to be regarded as unused land.”

In Hope v Bathurst City Council (No 2) (1983) 52 LGRA 79, Perrignon J was concerned with the definition of “rural land” as land that is wholly or mainly used for carrying on the businesses or industries of grazing amongst other uses in the Local Government Act 1919, s 118. At 84 his Honour said that what was called for where land was put to a number of uses, was the weighing of the evidence relating to various uses to which land was put, including, but not limited to, the nature and intensity of such uses, the physical areas over which they extended, and the time and labour spent in conducting them.

His Honour’s decision was upheld on appeal (Hope v Bathurst Cit Council (1986) 7 NSWLR 669). A majority of the Court of Appeal held that the characterisation of rural land as land that is wholly or mainly used for carrying on the businesses or industries of grazing, amongst other uses, did not relate solely to the quantum of area of land used for relevant purposes but related to the end to be achieved by the use and included other criteria such as the nature and intensity of the use.

In Thomason v Chief Executive, Department of Lands (1994-1995) 15 QLCR 286 the Land Appeal Court of Queensland, presided over by Ambrose J, had to consider whether, at the relevant date of valuation, the subject land was “exclusively used … for purposes of farming”.

In terms similar to the Land Tax Management Act, s 10AA, “farming” was defined for this purpose in the Valuation of Land Act 1944 (Qld), s 17(2) to mean the business or industry of grazing, and other specified pursuits, or any other business or industry involved in the cultivation of soils, the gathering in of crops, or the rearing of livestock, if the business or industry represented the dominant use of the land and had a significant and substantial commercial purpose or character and was engaged in for the purpose of profit on a continuous or repetitive basis.

The Court, helpfully, gave its approach to the determination of dominant use of land at 303:

“In our view, the proper approach to be taken when ascertaining the dominant use of land is to consider such matters as the amount of land actually used for any purpose, the nature and extent and intensity of the various uses of the land, the extent to which land is used for activities which are incidental to a common business or industry of a type specified in section 17(2), the extent to which land is used for purposes which are unrelated to each other, and the time and labour and resources spent in using the land for each purpose. When undertaking this exercise, one cannot ignore the conclusion that an objective observer would reach from viewing the land as a whole.”

35. The Court of Appeal upheld the decision of Gzell J ([2011] NSWCA 366).

36. In summary, the matters that Gzell J took into consideration in determination of dominant use included;

1. the amount of land actually used for the relevant purpose

2. the nature, extent and intensity of the use

3. the extent to which land is used for activities which are incidental to a common business or industry type

4. the extent to which land is used for purposes which are unrelated to each other

5. the time and labour and resources spent in using the land for each purpose.

37. The High Court in Godolphin considered the relevance of financial gain as an additional matter in determining what the dominant use and purpose was. The High Court said that: “In some cases, the financial gain from a given activity may be an indicator of predominance” (at [34]).

38. The relevance of financial gain in determining what is the dominant use, having regard to the intensity of various uses, had been previously affirmed in Sonter v Commissioner of Land Tax (NSW) (1976) 7 ATR 30. Rath J said at 34, “the financial gain from the various activities is some indication of the comparative intensity of the activities”.

39. However, financial gain is not determinative of what is the dominant use. The Tribunal in Dwayne Taylor FT Pty Limited as trustee for Dwayne Taylor Family Trust and DA and P Taylor v Chief Commissioner of State Revenue [2024] NSWCATAD 8 found that the dominant use was not the use that produced substantial revenue. In this case, the vast majority of the land was used to maintain horses for the purpose of sale. There was no evidence of effort or time that was similar to what was spent on horse maintenance being spent on any other use. On the evidence, horse maintenance also attracted significant development investment. There is no evidence that any other use attracted such investment. The Tribunal said that in these circumstances, even where a horse sale operation was conducted at a loss, and a competing rental use attracted greater revenue, the Tribunal was satisfied that the maintenance of horses constituted the dominant use of the land in question, when compared with any other known use.

40. The time at which the assessment of what is the dominant use must be made requires consideration. The taxing date is midnight on 31 December in the year preceding the land tax year. However, uses of land for a period before the taxing date are relevant in making that determination. In Longford Investments Pty. Limited v. Commissioner of Land Tax (N.S.W.) 78 ATC 4264, the Supreme Court of NSW said, at p 4,268:

“However, I should emphasise it ought not to be thought that the enquiry here to be made is one which involves no more than asking the question, to what use was the land put at midnight on 31st December, 1974. That would be far too narrow an approach. One must take into account the provisions of sec. 8 to which I have earlier referred and which provides that land tax is to be charged on land as owned on the relevant date immediately preceding the year for which the land tax is levied. Moreover, one would need to look at the use of land, not only after what I may call the relevant date, but prior thereto as well. In broad terms one must ask oneself, what may it fairly be said was the primary use of the property during a period not overlong and not overshort within which 31st December, 1974, falls. I do not find it useful to endeavour to specify the period but I think, in having regard to it, one must bear in mind that it is the defendant's task to make an assessment and in normal circumstances he will do that during the year following the arbitrary date selected by the legislature for the ownership of lands. He will not usually be looking at the position, as I am, with the aid of what has happened in a period of more than three years after the date in question”.

41. Gzell J in Leda considered that a period of 6 months before and after the relevant date was a reasonable period for inquiry in that case (at [4]).

Uses of land

42. During the land tax years in issue, the Applicant said that the following activities occurred on the land;

1. growing of bamboo and native forest trees for timber

2. growing fruit, vegetables, herbs and roots

3. grazing cattle for breeding or sale

4. keeping chickens for sale of their eggs

5. extracting and bottling mineral water for sale

6. operating a café/restaurant

7. residential leasing of the cottage and villa.

43. It is clear that neither operating a café/restaurant nor residential use fall within s 10AA(3). This was not contested.

44. The bottling of mineral water for sale is also an activity that falls outside s 10AA(3). While the mineral water may have been extracted from the land, that extraction was not the result of “cultivation” of the land (or any other activity described in s 10AA(3)). There was no contestation of the proposition that taking something from the land without cultivation of the land, fell outside s 10AA(3)(a).

45. I set out below my consideration of whether each of the other activities set out at [42] above falls within s 10AA(3).

Use for growing bamboo and timber

46. The Applicant submitted that the land was cultivated to grow bamboo and other native trees for timber, to be sold for flooring.

47. The Respondent, on the other hand, submitted that merely allowing trees to grow on land did not constitute “cultivation”. This was because cultivation required management of the land and produce grown on the land during the relevant land tax year, in order to achieve production, including the application of labour. The Respondent said that there was no evidence of this having occurred.

48. The Tribunal in Chandrala v Chief Commissioner of State Revenue [2021] NSWCATAD 50 described what evidence may show the cultivation of land to produce timber. The Tribunal said, at [15]:

“Long lead time activities such as the planting of orchards or timber can qualify. Preparatory works can amount to cultivation if it involves labour and appropriate business diligence in relation to the land to produce a crop for sale. The land should be tended according to usual practices of land management in relation to crops. This could include ploughing, sowing, pruning, mowing, fertilising, spraying and improving the watering system”.

49. The Respondent said that the Applicant had not provided evidence of any works or activities undertaken on the land in the nature of cultivation of the land to produce bamboo or trees. Accordingly, there was, in the Respondent’s submission, insufficient evidence to show cultivation of the land within the meaning of s 10AA(3)(a).

50. Evidence of production of timber during the land tax years in question is not necessary to show cultivation of the land for the purposes of selling timber, given the long lead times for trees to grow and produce timber products. The Applicant, however, produced no evidence of what it had done on the land to produce timber, whether by way of land management or incurring expenses for production. In the absence of evidence to show what had been done upon the land to cultivate the land to produce bamboo and other timber, the Applicant has not shown that the land had been “cultivated” in the sense required by s 10AA(3)(a).

51. Simply allowing trees to grow upon land with no management of the land or other activities to achieve production, does not, in my opinion, answer the description of “cultivation”.

52. Even if it can be shown that the land had been cultivated to produce bamboo and other timber, this of itself is not enough. Section 10AA(3)(a) requires that the cultivation be for the purpose of selling the produce of the cultivation.

53. Evidence of a purpose of sale, however, was limited. The Applicant said that some slabs of timber had been sold. The only evidence of such sales is found in 2025 showing sales for a value of $2,405.45. There is no evidence of any sales of bamboo or other timber prior to that date. There was, also no evidence of any business plan for the proposed cultivation, harvesting and sale of bamboo and other timber.

54. The terms of the PVP, additionally, prevented the felling of timber or removal of fallen timber from particular parts of the land. While weeding and other repair and management activities were required under the PVP, these were activities for the purpose of complying with the PVP and were not, on the evidence, for cultivation for sale of bamboo or other timber.

Growing fruit and greens

55. The Applicant’s evidence was that the land was used to grow fruits and vegetables mainly Kiwi fruit, avocados, finger limes and various greens. They say that they cleared weeds from the land, put in irrigation, planted fruiting trees and vines and put in a greenhouse over the years. However, there was no specific details as to the time these activities occurred, in particular whether they occurred before or after 2019.

56. Despite the absence of evidence of what activities in the nature of cultivation occurred during 2019 and after 2019, I am prepared to infer that activities involving cultivation of relevant fruits and greens did occur during the period in question, on the basis of evidence of the production of these items having occurred between 2020 to 2025 and sale of produce.

57. The total value of sales for these years was as follows.

1. 2020 - $1,367

2. 2021 - $251

3. 2022 - $835

4. 2023 - Nil

5. 2024 - $222

6. 2025 - $1,770

58. These sales represent a small proportion of the total revenue gained from use of the land during the years in question (see [97] below) and the land area used for production of fruit and greens was not significant (see [76] below).

59. The evidence was that some of the fruits and greens grown on the land was sold at the café/restaurant or used in the preparation of meals served at the café/restaurant. To the extent that produce grown on the land was used as ingredients in meals made and served at the cafe, I do not think that such a use answers the description of “selling the produce of the cultivation” within the meaning of s 10AA(1)(c)(a). It is a use for secondary production.

60. To the extent that the Applicant submits that there was an “internal sale” of such produce for use in the preparation of meals, that submission must be rejected. In Spedding Estates Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 117, the Tribunal said, at [65] – [69]:

“I find that the Applicant’s analysis of an “internal sale” is flawed in that it disregards the fact (conceded by the Applicant) that the primary purpose of the cultivation is to create produce for the restaurant on Lot 3, rather than for the direct sale of that produce to third parties.

There is no doubt from a legal perspective that management accounts by which the use for restaurant purposes of produce cultivated on the Property may be described as “sale of produce”, do not mean that a legal sale of the produce has taken place.

I also find that the Applicant is confusing the ordinary meaning of ‘primary production’ which involves the act “of bringing into existence” live plants or products, as referred to in Caruana at [39] with the statutory definition in s 10AA(3) which in my opinion, and having regard to Caruana, includes a purpose of sale of the plants or products without the occurrence of further production processes. Those further processes are described in [39] as converting “(an agricultural commodity) into marketable form by some special process”.

In Delli-Carpini v Chief Commissioner of State Revenue [2015] NSWCATAD 12, a dispute as to whether certain land was entitled to a primary production land tax exemption, I referred to excerpts from Caruana including [44] and [45] extracted at [63] above and said:

39 Section 10AA requires that the relevant dominant use of land is the maintenance of animals for the sale of their bodily produce, not the use of land for the subsequent conversion of that produce for the purpose of sale.(emphasis added)

I am not satisfied that the analogous conversion of primary produce into meals (consumed by third parties), some of the constituents of which have been cultivated on the Property, is a sale of primary produce for the purpose of s 10AA(3)”.

61. I am in agreement with the observation of the Tribunal in Spedding Estates that conversion of primary produce into meals is not a sale of primary produce for the reasons it gives. However, I accept that there is evidence of cultivation of the land for the purpose of selling fruit and greens not used to prepare meals for the café/restaurant.

Maintenance of cattle

62. The Applicant says that the land was used to produce cattle for sale. The evidence of the number of cattle on the land and sales values for the relevant years is as follows:

Year	Number of Cattle	Sale value
2020	10 beef cattle	$1,795
2021	11 beef cattle	$0
2022	14 beef cattle	$0
2023	12 beef cattle	$0
2024	11 beef cattle	$0
2025	17 dairy cattle	$0

63. The Respondent says that even if the cattle had been maintained on the land, there was no evidence of a present purpose of sale as required by s 10AA(3)(b). The Applicant, however, says that building up a herd of cattle takes time and that the absence of sales during a particular year does not prevent a finding that the purpose of sale exists.

64. I agree with the Applicant’s submission. Proof of the purpose of sale does not require that sales have to occur during the period when a herd is being bred. Interruptions to breeding may also occur because of external circumstances. The Applicant’s evidence was that the activity was interrupted by flooding in 2022.

65. I accept the Applicant’s evidence that it maintained cattle for the purpose of sale, actual sales having occurred in 2020. I am also able to infer a present purpose of maintaining the animals for the purpose of selling at some point in time the cattle, their natural increase, parts of the animals or their produce. This is because the cattle were beef or dairy cattle and as such, they could serve no other use. There was no evidence of some other intended or actual use, such as a use for scientific research or a zoological use.

Limited evidence for purpose of sale

66. To the extent that the land was used for cultivation or the maintenance of cattle, the purpose of doing so must have been sale. I have found that there was evidence of use of the land for cultivation to grow produce and use of the land for maintaining cattle. I have also found that there is evidence supporting the purpose of sale required under s 10AA(3)(a) and (b) as set out above. However, that evidence was limited.

67. There was no business plan evidencing a business of producing fruit and greens or maintaining cattle for sale or both. Sales values were also not high.

68. The expenses incurred in maintaining animals and producing fruit and greens was also limited (at [86] below). The Applicant questioned whether certain expenses shown in the lessees’ tax return for 2023 as being attributable to things other than primary production actually related to primary production. However, there was insufficient evidence to determine what if any of that expenditure was for primary production.

69. These are matters that raise questions as to whether the evidence is sufficient to establish that, on the balance of probabilities, the land had been used for the purposes of cultivation or the maintenance of animals within paragraphs 10AA(3)(a) and (b). Nevertheless, I will proceed on the basis that the uses of the land included cultivation within the meaning of s 10AA(3)(a) and maintenance of animals within the meaning of s 10AA(3)(b) for the reasons set out at [56] and [65] above.

Chickens

70. The Applicant said that the land had been used for the maintenance of chickens for the purpose of selling their eggs. However, there are no records of chickens having been kept on the land during the relevant period, nor of sales of eggs. The Applicant says that wild animals “decimated” the chickens. In these circumstances, I am unable to find that the maintenance of chickens was a relevant use upon the land within the meaning of s 10AA(3)(b).

Summary of uses

71. The uses of the land I have found are several. Three of the uses do not fall within s 10AA(3). They were the uses of the land to operate a café/restaurant, to produce bottled water and residential occupancy. None of these uses, on the evidence, related to the primary production activities carried out on the land, subject to the matters set out at [79] – [80] below.

72. The remaining uses included the growing of fruit and greens. I have found that this was a use that falls within s 10AA(3)(a).

73. I have also found that the maintenance of cattle was a use that fell within s 10AA(3)(b). I am unable, however, to find on the evidence that there was a use of the land to maintain chickens falling within s 10AA(3)(b).

74. There is insufficient evidence to show that the land was cultivated for the purpose of selling timber and bamboo, even if there is some evidence of the sale of bamboo and timber products.

75. The remaining question for determination was what the dominant use of the land was for the purposes of s 10AA(3) as between the uses shown in the evidence.

Dominant use – land area

76. The first matter of relevance in determining the dominant use of the land is consideration of the respective areas within the land deployed for each use. They were as follows:

1. growth of bamboo and trees – 11%

2. growing of fruit – 2%

3. growing of greens – 18%

4. breeding of cattle – 60%

5. sheds (industrial and commercial) – 2%

6. environmental protection – 12%

7. residential – 4%

77. There was no evidence as to the area of land used to produce bottled mineral water.

78. The largest proportion of the land was deployed for maintaining cattle (60%) followed by the proportion used to grow fruit and greens (20%). 11% of the land was occupied by bamboo and trees.

79. The café/restaurant sat on a small area within the land. However, whether the land area “used” by the café/restaurant was limited to the area the facility physically occupied also requires consideration. The Applicant accepted that the main attraction of the café was that it was on a farm. The café offered consumers a “paddock to plate” product, using things grown on the land to make meals at the cafe.

80. The Respondent said that these matters allowed for the conclusion that the farm was “ancillary” to the café. I understood the Respondent’s submission to be that the connection between the café/restaurant and farm meant that the part of the land “used” for the café and restaurant was more than just the surface area occupied by the facility.

81. I accept this submission, noting that there was a specific physical use of parts of the land not occupied by the café/restaurant to grow produce used in the preparation of meals at the café/restaurant. I do not, however, think that use of the farm for the purposes of the café/restaurant went beyond that physical use to grow the relevant produce.

82. The parts of the land deployed for other uses represented smaller proportionate areas of the land.

Dominant use - Nature, extent and intensity of each use

83. The villa and the cottage were used in each relevant year as residences. This use produced rent during each of the land tax years in issue. That continuity of use shows that the extent and intensity of residential use was high, if not maximal.

83. The café/ restaurant operated on Friday and some Saturday and Sunday nights. There were “pop-up” dinner events on some weekends and live music events.

84. The supply of the café/restaurant with produce from the land also adds to the extent and intensity of the use of the land for the café/restaurant.

85. The purposes for which expenses were incurred is also relevant to determining intensity of each use. The expenses recorded in each relevant year and their recorded purpose were as follows:

Expense	2020	2021	2022	2023	2024	2025
Cattle	Nil	Nil	Nil	Nil	$704.87	$227.28
Fruit and Greens	Nil	Nil	Nil	Nil	Nil	Nil
Timber	Nil	Nil	Nil	Nil	Nil	Nil
Café/Restaurant	$113,554 (including $36,750 rent paid to the Applicant)	$138,180 (including $24,600 rent paid to the Applicant)	Nil	Nil	Nil	Nil
Bottled Water	Nil	$2,257	$65,484	$79,179	$63.64	$1,219.83
Rent (Residential)	$69,288	$57,789	$72,967	$66,152	Not produced	Not produced

87. There was no expenditure shown in the records before the Tribunal for primary production activities in the 2020-2023 period and small amounts shown for 2024 ($704.87) and 2025 ($227.28). All of this expenditure was for cattle.

88. In 2020 and 2021, the largest proportion of the expenditure was attributed to the café/restaurant (even if the rent paid by the lessee were excluded). During those years, the amount expended for the residential use made up the second highest proportion of the expenditure.

89. In 2022, the highest expenditure was for residential occupancy ($72,967) followed by $65,484 spent on the bottled water business. In 2023, the expenses for the bottled water business made up the largest proportion of expenditure ($79,179) followed by expenditure on the residential occupancy ($66,152). Expenditure for the residential occupancy was not produced for 2024 and 2025.

90. During no relevant year for which full records were produced, did expenditure for primary production make up any more than a small part of total expenditure. The Applicant says that 60% of a flood recovery grant of $25,000 received in 2022 was spent on repairing farm infrastructure. However, the records produced by the Applicant show that grant as being for the water bottling business and no expenditure is recorded for 2022 for primary production activities. The Applicant, in these circumstances, has not shown on the balance of probabilities that 60% of the grant in 2022 was spent on primary production. Even if 60% of the grant had been spent on primary production, that amount is less than what was spent in 2022 for each of the bottled water business and the residential occupancy.

91. To the extent that expenditure is one indicator of the intensity of use, the small amounts of expenditure for cattle and growing produce shows less intensive use of the land for these purposes than for other purposes.

92. The Applicant says no wages were paid for labour used in primary production because Mr Toneguzzo’s own labour was deployed for primary production activities and that he was unpaid. The Applicant also says that it carried out organic farming and that farming of this kind required few inputs. It says that fuel, maintenance and repairs were the main expenses for primary production.

93. The circumstances described at [92] above may explain to some extent the low expenditure on primary production. Even so, no expenses were recorded at all for primary production other than modest amounts for cattle in 2024 and 2025. There was no expenditure shown in the records for fuel, maintenance and repairs used for primary production. Even if the Applicant received the benefit of unpaid labour in carrying out primary production and inputs required were limited, the absence of evidence of relevant expenditure in the record sits uneasily with the proposition that primary production activities required most time and effort as between the competing uses of the land.

94. The Respondent in his submission relied upon the tax returns of the lessee. They described its main business activity as the operation of a café/restaurant in the 2020 and 2021 financial years and non-alcoholic beverage manufacturing in the 2022 and 2023 financial years. While descriptions of this kind are not determinative, they do not assist the Applicant’s case.

Dominant use - Time and labour

95. The evidence included information about the wages paid for each year in issue. That evidence was the following:

1. 2020 - $9,550

2. 2021 - $3,253

3. 2022 - $0

4. 2023 - $0

5. 2024 - $0

6. 2025 - $0

96. The wages paid in 2020 and 2021 related to the café/restaurant business. The Applicant has not otherwise provided evidence of the labour hours and time devoted to each other use of the land. It has however said that Mr Toneguzzo provided unpaid labour for primary production activities. His wife also provided unpaid labour for the café/restaurant business.

Financial return

97. The income recorded during each year for each relevant use was as follows:

Source of Income	2020	2021	2022	2023	2024	2025
Cattle	$1,795	Nil	Nil	Nil	Nil	Nil
Fruit and Greens	$1,367	$251	$835	Nil	$222	$1,770
Timber	Nil	Nil	Nil	Nil	Nil	$2,405.45
Café/Restaurant	$55,613	$44,892	Nil	Nil	Nil	Nil
Bottled Water	Nil	Nil	$25,000 (flood recovery grant)	$151	Nil	$2,384
Rent (Residential)	$26,000	$91,160	$108,915	$53,896	$85,450	$113,140.30
Rent (from lessee)	$36,750	$24,600	$20,800	$20,800	$20,800	$20,800
Other	$840 (water) $2,292 (wine)	$940 (wine)	Nil	Nil	Nil	Nil

98. The income from primary production activities for all of the years in issue was a small proportion of the total income for each relevant year and for the entire period taken as a whole. There was no income at all in 2023 from primary production activities.

Evaluation of dominant use

99. The proportion of the land area used for maintaining cattle made up most of the area of the land (60%). The areas used for the production of fruit and greens made up 20% of the total land area. In other words, at least 80% of the land area was used for activities that went to primary production within the meaning of s 10AA(3).

100. However, I do not think that the land area used for each type of activity is itself determinative of the question of what was the dominant use in the present case. Other factors also need to be brought to bear in making a determination of what was the dominant use.

101. First of all, evaluating the nature, extent and intensity of the relevant uses is one of the necessary tasks for determination of the dominant use. Having regard to these factors, the highest level of use, in my opinion, attached to the residential occupancy during the years 2022 -2025, given the continuity of that use during these years and the level of expenditure for that use (see [86] above) that exceeded expenditure for other uses (other than expenditure for bottled water in 2023 which was slightly more).

102. The use of the land as a café/restaurant occurred during the weekends in 2020 and 2021. This use also required the highest levels of expenditure compared with expenditure for other uses during these two years. Recorded wage costs were attributed to the use of the land as a café/restaurant and to no other use. Produce grown on the land was used to make meals at the café/restaurant. The labour of Mr Toneguzzo’s wife also served the use of the land as a café/restaurant.

103. Whether measured in terms of the relative expenditure for each use, the intensity of each use on a temporal measure or the deployment of paid labour, the nature, extent and intensity of use of the land for the production of crops and for the maintenance of cattle (whether taken together or individually), did not surpass the level of use of the land for either the café/restaurant in 2020 and 2021 or residential occupancy in the years following. I do not think that the unpaid labour provided by Mr Toneguzzo is sufficient to displace my assessment of the relative nature, extent and intensity of the competing uses, noting also that his wife provided unpaid labour for the café/restaurant.

104. The relative income from each of the competing uses carries relevance in making a determination of what was the dominant use. The comparatively meagre returns from the sale of forest products, fruit, greens and cattle, in my opinion, go towards showing that the relevant primary production activities were less influential uses of the land during all of the years in issue.

105. The fact of the overwhelming share of the income having been derived from other activities, in my opinion, although not determinative, weighs in favour of a conclusion that the dominant use of the land was not primary production.

106. The Applicant said that the rent it received from the lessee should be treated as being part of the financial return attributable to primary production in determining what was the financial return from primary production.

107. I do not see any proper basis for treating the rent the lessee paid, in part or whole as having to be attributed to primary production. The income generated by the activity of primary production is what was earned from the sales of produce as set out at [97] above. It does not also include any amounts paid by the lessee as rent.

108. To the extent that the rent has been sourced from receipts from the sale of primary produce, those amounts have been already counted as part of the financial return from primary production and should not be counted again as part of the rent. Where the rent has been sourced from income derived from other activities, those amounts, in any event, do not represent a financial return from primary production. Where the Applicant and lessee, who are related parties, agree on the payment of rent to the Applicant, I do not think that the rent so agreed between parties who are not arms-length, should be treated as income attributable to primary production or any other use of the land, if the income from each competing use has already been counted.

109. In these circumstances, I do not think that taking account of the rent the lessee paid, as either a return from primary production activities or as a return from some other kind of activity, assists the Tribunal in determining the financial return produced by each use of the land.

110. During the years 2020-2021, when the café-restaurant was operating, I find that the dominant use was that use. I reach this conclusion based on the exclusive deployment of wage labour to the running of the that business, the largest share of income coming from that business and the nature, extent and intensity of that use as described at [103] above.

111. For the remaining years (2022-2025), I think that the dominant use was represented by the rental activity. The largest share of the income was earned from that activity; it also involved the highest use in terms of the nature, extent and intensity of use for the reasons set out at [103] above.

112. These are circumstances that, in my opinion, result in the conclusion that the dominant use of the land was not the use of the land for cultivation or the maintenance of animals, whether each were taken as individual uses or both were taken together as a single use. While the land area used for each of these activities was greater than that used for other uses, this is only one of the relevant factors and does not carry sufficient significance to displace the weight carried by the relative financial returns and nature, extent and intensity of the dominant uses.

113. I do not think that this is a case that is comparable to Dwayne. There is no evidence of significant effort and investment into primary production activities of the kind that occurred in Dwanye to allow for a conclusion that the dominant use of the land was one of primary production.

114. I will go on to deal with the remaining matters the Applicant raises.

Retrospective assessment

115. The Applicant says that there was no power to assess land tax retrospectively for the 2020 to 2024 land tax years.

116. I do not agree. There is no limitation as to when the Respondent can issue an assessment of land tax set out in the LTMA or the Administration Act. The power to assess in s 8 of the Administration Act sets out no such limitation.

PVP land

117. The Applicant says that the part of the land covered by the PVP and zoned for environmental conservation should be exempt under s 10(1)(p) of the LTMA.

118. Section 10(1)(p) of the LTMA allows for exemption from land tax for certain land that is the subject of a biodiversity stewardship agreement under the Biodiversity Conservation Act 2016 (NSW). A PVP is not such an agreement. A PVP is an agreement under different legislation, namely the Native Vegetation Act 2003 (NSW).

119. There were no submissions made as to whether or not there was any basis in law for reading a reference to a stewardship agreement under the Biodiversity Conservation Act 2016 (NSW) as including a PVP.

120. Section 10(1)(p) of the LTMA cannot as a consequence apply in the present case.

Flooding

121. The Applicant says that the land should be exempt for the 2021 to 2022 years as it was impacted by flooding.

122. It is well established that a hiatus in primary production activity due to weather conditions does not necessarily prevent a claim for exemption (Pointsyde Investments Pty. Ltd. v. Clyne. 86 ATC 4335, p 4,338). However, to maintain such a claim, the Applicant still has to show that there was a previous dominant use for primary production that fell within s 10AA(3). There is no evidence of any previous use of this kind.

123. In these circumstances, the Applicant has not shown that the occurrence of flooding disrupted an existing primary production activity that allowed it to maintain exemption from land tax.

124. The evidence also showed that the land remained in continuous use despite the flooding for earning rental income. The Applicant has not shown that any primary production activity that would have occurred but for the flooding would have displaced the residential use as the dominant use.

Apportionment

125. The Applicant says that the land should be apportioned relative to the percentage of land use for primary production and non-primary production activities.

126. The Applicant’s submission cannot be accepted. The Respondent is correct in saying that exemption applies to the whole of the land or does not apply at all, depending on what the dominant use is. There is no provision made in the LTMA to allow apportionment of the kind claimed by the Applicant.

Hardship

127. The Applicant says that land tax should be refunded and payment deferred until the sale of the land for hardship reasons. They also say that the residential tenancy agreements will need to be terminated early to facilitate sale of the land.

128. The Tribunal does not have jurisdiction to determine the matter on the basis of hardship (Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133). Division 5 of Part 10 of the Administration Act establishes and empowers a Hardship Review Board to deal with cases in which the exaction of the full amount of tax would result in serious hardship for the person or the person's dependants. The remaining avenue available to the Applicant would therefore be an application to the Hardship Review Board.

Conclusion

129. The Applicant has not discharged the onus of proof to show that the dominant use of the land during the years in issue was for a purpose of primary production within the meaning of s 10AA(3) for the reasons set out above.

130. The Applicant complained that its purpose was to engage in relevant primary production and that it should not be prevented from claiming exemption in circumstances where hardship had required that it also earn income from other activities to obtain a viable return.

131. Despite what the Applicant’s subjectively intended purpose was, the terms of s 10AA(3) do not allow for exemption where the dominant use of land becomes for an activity that does not comprise a relevant primary production activity. That is what has happened in the present case.

132. The Respondent’s assessment accordingly should be confirmed.

Orders

(1) The assessment of the Respondent is confirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 24 October 2025