Frontlink Pty Ltd v Commissioner of State Revenue
[2016] VSC 25
•11 February 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
TAXATION LIST
S CI 2015 02714
| FRONTLINK PTY LTD (ACN 074 034 496) | Plaintiff |
| v | |
| COMMISSIONER OF STATE REVENUE | Defendant |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 January 2016 |
DATE OF JUDGMENT: | 11 February 2016 |
CASE MAY BE CITED AS: | Frontlink Pty Ltd v Commissioner of State Revenue |
MEDIUM NEUTRAL CITATION: | [2016] VSC 25 |
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TAXATION – Growth Areas Infrastructure Contribution – GAIC – GAIC levy – Excluded subdivisions of land – Sequential subdivisions – Purpose of subdivision – Planning and Environment Act 1987, Pt 9B, s 201RF – Commissioner of State Revenue v Challenger Property Nominees Pty Ltd (2006) 63 ATR 65 – R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603.
WORDS AND PHRASES – Meaning of “purpose”.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S.R. Morris QC with Mr J. Korman | Best Hooper |
| For the Defendant | Mr C.M. Caleo QC with Mr C. Young | Solicitor to the Commissioner of State Revenue |
HIS HONOUR:
Introduction
This proceeding has been brought pursuant to s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”). The Plaintiff, Frontlink Pty Ltd, is seeking to appeal from an order of the Victorian Civil and Administrative Tribunal (“the Tribunal” or “VCAT”) constituted by Senior Member R Davis made on 12 May 2015 in proceeding number Z1138/2014.[1]
[1]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741.
As at 28 June 2013, the parcel of land at 181 Grices Road, Clyde North, was one of a number of parcels that fell within the Clyde North Precinct Structure Plan (“the Precinct Structure Plan”). The Precinct Structure Plan is a plan for the urban development of all of the land. Amongst other things, it provided for the development of schools, roads, utilities and residential lots. Under the Casey Planning Scheme, the land at 181 Grices Road could not be subdivided without a permit and then only to implement the Precinct Structure Plan. On 28 June 2013, a statement of compliance was issued for a subdivision of land which divided land at 181 Grices Road into two parts. Under the Precinct Structure Plan, one part (designated R-1) was to be used for the future widening of a road. Under the Precinct Structure Plan, the other part (designated Y) was to be further subdivided for residential housing.
Part 9B of the Planning and Environment Act 1987 (“the Act”) imposes the “Growth Areas Infrastructure Contribution” (“GAIC”) on the “first GAIC event to occur in relation to any land in the contribution area unless the person liable to pay the contribution is exempted from that liability”.[2] The issue of a statement of compliance for a subdivision of land is a GAIC event, unless that subdivision is an excluded subdivision of land.[3] Excluded subdivisions of land are specified in s 201RF of the Act, which relevantly provides:
[2]Planning and Environment Act 1987, s 201S.
[3]Planning and Environment Act 1987, ss 201RA, 201RB.
201RF Excluded subdivisions of land
For the purposes of this Part, a subdivision of land is an excluded subdivision of land if—
…
(b) the purpose of the subdivision is solely to provide land for transport infrastructure or any other public purpose;
…
The content and operation of these and other statutory provisions is considered in more detail in the reasons which follow.
The issue on this appeal is whether the purpose of the subject subdivision was solely to provide land for transport infrastructure. The Plaintiff contends that this was the position, whereas the Commissioner contends that the subject subdivision, viewed in the light of the Precinct Structure Plan and the other subdivisions of land that occurred immediately before and after the subject subdivision, had two purposes: to provide land for transport infrastructure and to provide land for future residential subdivision. While the provision of land for transport infrastructure was, it is common ground, one purpose of the subdivision, the Commissioner contends that it was not the sole purpose and that, consequently, the exclusionary provisions of s 201RF of the Act do not apply. The Tribunal accepted the Commissioner’s contentions in this respect, and found against the Plaintiff accordingly. The Plaintiff, on the other hand, contends that the purpose of the subdivision is to be determined with respect to the particular subdivision, and that, on this basis, it follows that the sole purpose of that particular subdivision was to provide a plan for transport infrastructure and therefore the exclusionary provisions of s 201RF of the Act apply.
The appeal raises a number of particular questions. They are, first, what facts may be taken into account to determine “the purpose of the subdivision” and, secondly, is the fact that one part of the subdivided land will be used for a future residential subdivision irrelevant? The Plaintiff contends that the only facts that may be taken into account to determine the purpose of the subdivision is the plan of subdivision itself and the statement of compliance[4] and that other facts—such as the Precinct Structure Plan, subdivisions of the same land that took place before and afterwards, and inferences drawn therefrom—are irrelevant and may not be taken into account.[5]
[4]Plaintiff’s Submissions (30 October 2015) [35].
[5]Plaintiff’s Submissions (30 October 2015) [28], [35].
At the outset, it should be observed that this is not a case in which the Plaintiff contends that no GAIC is payable. Both parties accept that the Plaintiff is liable to GAIC. The dispute between the parties is whether the “first GAIC event” was the subject subdivision of land, or a later subdivision of land. As the GAIC is calculated on a per hectare basis, the dispute between the parties is whether GAIC is payable on 23.695 hectares of land, as the Commissioner contends, or on 22.37 hectares of land, as the Plaintiff contends. In terms of the quantum of GAIC payable, on the basis of the Commissioner’s contentions, the Plaintiff would have a GAIC liability of $2,013,127.20, and on the basis of the Plaintiff’s contentions, a GAIC liability of $1,900,555.20. The difference in GAIC payable is not insignificant but, in the course of submissions, the parties emphasise that these GAIC provisions have not previously been considered by the Court and that as the operation of these provisions is of significant importance in relation to land development within the State, it is desirable that the Court hears and determines the substantive matters raised by this appeal.
The Commissioner observes in his submissions that there was no legal obligation on the Plaintiff to carry out four subdivisions of land on 28 June 2013, instead of one. It is said that this was a choice made by the Plaintiff. True that might be, but it might also be observed that there was no obligation on the Plaintiff to carry out any further subdivision or subdivisions subsequent to the subject subdivision. Moreover, it appears from the reasons which follow that the choice or choices made by the Plaintiff might well be thought to depend upon the proper construction and operation of the relevant provisions of the Act.
The Commissioner accepts that this is an appropriate case for the grant of leave to appeal under s 148 of the VCAT Act. More particularly, the Commissioner accepts that the Plaintiff has identified a question of law about the proper construction of s 201RF of the Act and that question has public importance. That is not to say, the Commissioner says, that he accepts that there is a real or significant argument that error exists in the Tribunal’s decision but, rather, that the Court should hear argument to confirm that there is no error.
Principles applicable with respect to appeals
Section 148(1) of the VCAT Act provides:
A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.
It follows from this provision that any appeal is dependent upon two important qualifications. First, that the appeal be on a question of law, and secondly, that the Court gives leave to appeal. The legislative policy underlying these provisions is that “VCAT decisions should not generally be disturbed where cases have been decided in that forum other than on questions of law and where there is something about the decision bearing upon the question of law which warrants a grant of leave to appeal.”[6] It follows that “[t]his Court is not entitled to enter into the fact finding exercise which the legislature has deliberately entrusted to a specialist tribunal.”[7]
[6]Commissioner of State Revenue v Frost (2011) 83 ATR 832 at 834 [5] citing Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 and Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48 at 55 [28].
[7]Boucher v Dandenong Ranges Steiner School Inc (2005) 145 LGERA 21 citing Spurling v Development Underwriting (Vic) Pty Ltd [1973] VR 1 and Whitehorse City Council v Golden Ridge Investments Pty Ltd [2005] VSCA 198.
The leave requirement under s 148(1) of the VCAT Act is designed to maintain this position. As Pagone J said in Commissioner of State Revenue v Frost:[8]
The requirement for leave under s 148(1) of the VCAT Act “is a safeguard that the appeal is on a pure question of law and that the grounds supporting the question of law articulated for determination by the Court do found the subject matter of the appeal”.[9] It also confers a discretion about whether to grant leave[10] which an applicant must persuade the Court to exercise in its favour. What must be shown will depend upon the particular case bearing in mind the statutory criteria being a grant of leave and not special leave.[11] It will ordinarily be necessary (in addition to a clearly articulated question of law)[12] for an applicant to make out a prima facie case[13] and in an appropriate case it may be necessary for the applicant to show that the question upon which leave is sought has public or general importance.[14]
[8](2011) 83 ATR 832 at 833–4 [3].
[9]Commissioner of State Revenue v STIC Australia Pty Ltd (2010) 81 ATR 682 at 687 [10].
[10]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331; Al-Hakim v Monash University (Unreported, Victorian Supreme Court of Appeal, 28 March 2003); Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48.
[11]See Morris v R (1987) 163 CLR 454 at 475.
[12]Osland v Secretary to the Department of Justice [No 2] (2010) 241 CLR 320 at 333 [21].
[13]Morris v R (1987) 163 CLR 454 at 475; Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335.
[14]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6; Commissioner of State Revenue v Challenger Property Nominees Pty Ltd (2006) 63 ATR 65 at 69 [20], 77 [65] (“Challenger”).
In considering an application of this nature, courts have been concerned to respect the role entrusted by the legislature to the particular tribunal and not, in effect, subvert this position by seeking out error. Thus, Kirby J in Roncevich v Repatriation Commission said:[15]
[15](2005) 222 CLR 115 at 136 [64].
Courts conducting this form of review have been repeatedly enjoined by this Court to avoid overly pernickety examination of the reasons.[16] The focus of attention is on the substance of the decision and whether it has addressed the “real issue” presented by the contest between the parties.
Similarly, in Vegas Nominees Pty Ltd v Werribee Sports & Community Club Inc, Ashley J said:[17]
This Court has said more than once that it should not examine briefly stated reasons by an expert Tribunal in an over-legalistic manner or by the over-zealous drawing of inferences in order to disclose some supposed error; although where unambiguous language is used, the user should be taken to mean what the words say. I should add that the Court is not entitled to interfere with the Tribunal’s decision unless it is satisfied that there was in fact a vitiating error of law. It is not enough for the appellant to show that the Tribunal’s reasons for its decision are so expressed as to suggest the possibility that it proceeded upon a wrong view of the law. In support of the several propositions that I have just stated I refer to Portland Properties Pty Ltd v Melbourne & Metropolitan Board of Works,[18] Michaelis Bayley (Vic) Pty Ltd v Melbourne & Metropolitan Board of Works[19] and Teston Investments Pty Ltd v Melbourne & Metropolitan Board of Works.[20]
Additionally, “[o]n appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal. It is these realities to which a Tribunal must respond in its reasons.”[21]
[16]Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 575, 597. Cf Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 348 [74].
[17](Unreported, Supreme Court of Victoria, Ashley J, 21 December 1994) [13].
[18](1971) 38 LGRA 6 at 18.
[19](1980) 44 LGRA 65 at 67–8.
[20](1985) 62 LGRA 346 at 349–50.
[21]The Gombac Group Pty Ltd v Vero Insurance Ltd [2005] VSC 442, [59].
For the reasons which follow, I am satisfied that the Plaintiff has both established a question of law which warrants the grant of leave to appeal and, further, has been successful in this appeal. Were this simply an application for leave to appeal, I would, on the material to which reference has been made in these reasons, find that a sufficiently arguable case has been established on the part of the Plaintiff, as discussed in Secretary of the Department of Premier and Cabinet v Hulls.[22] Moreover, I am also satisfied that the application raises a question which has public importance.[23]
[22][1999] 3 VR 331.
[23]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 [11].
Nature of the appeal
The Proposed Notice of Appeal which is exhibited to the Affidavit in Support of Application for Leave to Appeal sworn by Matthew David Francke on 27 May 2015 identifies the relevant question of law, the ground of appeal and the orders sought, in the following terms:
QUESTION OF LAW
1.Where land that is held for future predominantly residential subdivision is subdivided such that a portion of the land is excised to provide land for transport infrastructure, and the balance of the land is retained for the future predominantly residential subdivision, is that subdivision an excluded subdivision of land for purposes of s 201RF(b) of the Planning and Environment Act 1987?
GROUND OF APPEAL
2.The Tribunal erred in its construction of s 201RF(b) of the Act and should have found that, on the true construction of s 201RF(b), subdivision pursuant to Plan of Subdivision 713400J Version C was an excluded subdivision because the purpose of that subdivision was solely to provide land for transport infrastructure.
ORDERS SOUGHT
1. Appeal allowed, with costs.
2.Set aside the order of the Victorian Civil and Administrative Tribunal made on 12 May 2015 and in place thereof order that the decision of the respondent is set aside and in its place the Tribunal orders that Assessment Notice No 81638763 dated 9 July 2013 of Growth Areas Infrastructure Contribution (GAIC) liability under Part 9B of the Planning and Environment Act 1987 and the Taxation Administration Act 1997 be wholly set aside.
It follows that the appeal question—pithily stated—is: “What is the true construction of the legislative words, ‘the purpose of the subdivision’?” The question can be expressed with greater particularity as: “Which of several possible purposes, each applicable at a different level of generality, is the purpose which is referred to by the legislation?” Moreover, the answer to that question can be given by determining the level of generality intended by Parliament in framing the legislation. As is discussed in the reasons which follow, that is the approach taken by the leading authorities, Challenger[24] and R & R Fazzolari Pty Ltd v Parramatta City Council.[25]
[24]Challenger (2006) 63 ATR 65.
[25](2009) 237 CLR 603 (“Fazzolari”).
The appeal does not raise the question of what facts may be taken into account in order to determine the purpose of the subdivision. That is an ancillary evidentiary issue. Once the meaning of the words “the purpose of the subdivision” is elucidated, the response to the Commissioner’s question is, in my view, obvious: the facts to be taken into account are those which are relevant to the determination of the landowner’s purpose in effecting the subdivision. I accept that, as submitted by the Plaintiff, by formulating the issue as he has, the Commissioner is inviting the Court to approach the task of construing legislation by a process of “reverse engineering”—first determining the relevant facts and then construing the legislation in such a way as to take account of those facts. However, the issue of whether a fact is relevant to a question arising under statute can only be answered once the meaning of the statute has been determined.
Factual matters
The factual context of this proceeding is not in any relevant respect controversial as between the parties. Although the interpretation of relevant provisions of the Act is not factually dependent, an understanding of the factual context enhances an understanding of the divergent positions of the parties and the operation of these statutory provisions.
The land at 181 Grices Road was originally 24.4067 hectares in area.[26]
[26]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [7].
In September 2011, the Precinct Structure Plan was prepared by the Growth Areas Authority.[27] The subject land was within the Precinct Structure Plan Area. The Precinct Structure Plan expressly referred to the widening of Grices Road and included a diagram of the intersection that showed the land required for widening.[28] The Precinct Structure Plan also referred to the school and to the future residential subdivisions.
[27]Court Book 177.
[28]Court Book 261.
On 12 October 2011, the Plaintiff submitted an application for a planning permit to the City of Casey (“the Council”).[29]
[29]Court Book 368.
On 10 November 2011, by amendment C153, the Precinct Structure Plan was incorporated into the Casey Planning Scheme by the introduction of sch 3 to the Urban Growth Zone. The critical aspects highlighted in this respect are:
(a)The Casey Planning Scheme makes provision for the Urban Growth Zone in cl 37.07. A precinct structure plan applies to land when the precinct structure plan is incorporated in the scheme.
(b)For land in the Urban Growth Zone, a permit is required to subdivide land.[30] A permit to subdivide land must be generally in accordance with the precinct structure plan.
(c)Under sch 3, a planning permit must include conditions which ensure that any requirements or conditions set out in the precinct structure plan are implemented.[31]
[30]Casey Planning Scheme, cl 37.07–10.
[31]Casey Planning Scheme, cl 4.0.
On 24 May 2012, the Council issued a planning permit allowing for the subdivision of land. That permit was subsequently amended on 24 July 2012 and 7 February 2013.[32] The planning permit included clauses dealing with amended plans for the intersection with Grices Road (cl 1(i)), the layout of and stages of subdivisions (cll 3–4), a public infrastructure plan addressing land required for infrastructure works and the provision of road works (cl 6), the transfer of land required for road widening (cl 7), the requirement to provide plans for certification that show land required to be set aside for road widening (cl 10(f)), detailed construction plans for the intersection at Grices Road (cl 16) and the transfer of land required for road widening (cl 34).
[32]Court Book 372, 394, 415.
On 1 February 2013, PS 713402E (Plan E—the School Subdivision) was submitted to the Council for certification.
On 6 February 2013, PS 713400J (Plan J—the Road Widening Subdivision) was submitted to the Council for certification.[33] A copy of the Road Widening Subdivision is contained in the Appendix to these reasons.
[33]Court Book 157–8.
On 8 February 2013, PS 713401G (Plan G—the Gas Easement Subdivision) was submitted to the Council for certification.
On 13 March 2013, PS 640448H (Plan H—the Residential Subdivision) was submitted to the Council for certification.
The Council certified each of the plans between 16 and 23 April 2013.
At 3.19pm on 28 June 2013, a statement of compliance was issued for a plan of subdivision for a two lot subdivision, which excised Lot 1, being 0.7121 hectares of land for a primary school, from the original block. The Commissioner had earlier issued a Certificate of No Liability for this subdivision.[34] The Commissioner had certified that this subdivision did not trigger the GAIC because the subdivision was solely to provide a lot for a school or a proposed school. It is noted that during the course of the hearing of this matter, the Commissioner said that he now took the view that this decision to certify was wrong, not being in accordance with the provisions of s 201RF of the Act.[35]
[34]Court Book 13.
[35]See below [91].
At 3.30pm on 28 June 2013, a statement of compliance was issued[36] for the Road Widening Subdivision. This subdivision did not create two lots, but created one lot and provided land, having an area of 0.7782 hectares, as a reserve for a road. By reason of s 24 of the Subdivision Act 1988, the land provided as a reserve vested in the Council upon the registration of the subdivision and became a public highway.
[36]Court Book 316–9.
At 3.38pm on 28 June 2013, a statement of compliance was issued[37] for a two lot plan of subdivision (PS 73401G) which excised land, having an area of 0.55 hectares, for a gas easement.
[37]Court Book 320–3.
At 3.48pm on 28 June 2013, a statement of compliance was issued[38] for a plan of subdivision (PS 640448H), which provided for subdivision of the residual 22.37 hectares parcel into 42 residential blocks and into superlots.[39]
[38]Court Book 324–35.
[39]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [2].
On 9 July 2013, the Plaintiff was issued a GAIC assessment in relation to the 181 Grices Road land.[40] The assessment was based on the Commissioner’s determination that the issue of the statement of compliance on 28 June 2013 for the Road Widening Subdivision triggered a liability to pay the GAIC.
[40]Court Book 339–41.
On 20 August 2013, the Plaintiff objected to the Commissioner’s assessment.[41]
[41]Court Book 342–52.
On 23 July 2014, the Commissioner determined to disallow the objection.[42] The basis upon which the Commissioner confirmed the decision was that the Road Widening Subdivision was not an excluded subdivision, so that the issue of the statement of compliance in respect of the Road Widening Subdivision was a GAIC event.[43]
[42]Court Book 438.
[43]Court Book 438–45. See especially Court Book 443.
The Commissioner’s assessment to GAIC is in respect of 23.695 hectares of land at 181 Grices Road.[44] The Plaintiff contends that if the Commissioner had applied the relevant legislation in the manner for which it contends, the GAIC assessment would have been in respect of only 22.37 hectares of land at 181 Grices Road.
[44]Court Book 3.
Legislation
Section 201S of the Act imposes GAIC liability in the following terms:
201SImposition of growth areas infrastructure contribution
(1)Subject to section 201SA, a growth areas infrastructure contribution is imposed in respect of the first GAIC event to occur in relation to any land in the contribution area unless the person liable to pay the contribution is exempted from that liability, in which case a growth areas infrastructure contribution is imposed in respect of the next GAIC event that occurs in relation to that land.
(2)Subject to section 201SLA, a growth areas infrastructure contribution may be imposed once only in respect of any land in the contribution area.
There was no dispute that the land at 181 Grices Rd was land in the contribution area.
Section 201RA makes provision for GAIC events in the following terms:
201RAGAIC events
For the purposes of this Part, a GAIC event means any of the following—
(a)the issue of a statement of compliance relating to a plan of subdivision of land in the contribution area;
…
but does not include an excluded event.
Section 201RB of the Act needs to be understood in the context of s 201SB, which provides that any liability to pay a GAIC levy that arises in respect of a GAIC event is taken never to have arisen if, in the case of the issue of a statement of compliance, the Registrar of Titles does not register the plan (other than for a reason relating to GAIC compliance). It follows that, effectively, the GAIC is payable upon registration of the plan of subdivision.
Section 201RB of the Act makes provision for “excluded events” in the following terms:
201RB Excluded events
For the purposes of section 201RA, an excluded event means—
(a)the issue of a statement of compliance relating to a plan of subdivision of land in the contribution area that is an excluded subdivision of land; …
Section 201RF of the Act makes provision for “excluded subdivisions of land” in the following terms:
201RFExcluded subdivisions of land
For the purposes of this Part, a subdivision of land is an excluded subdivision of land if—
(a)the purpose of the subdivision is solely to create a lot for utility installation; or
(b)the purpose of the subdivision is solely to provide land for transport infrastructure or any other public purpose; or
(ba)the purpose of the subdivision is solely to provide a lot for a school or a proposed school;
…
Section 201RF of the Act does, as is clear from its provisions, define excluded subdivisions of land in terms which extend to a lot for a utility installation, land for transport infrastructure, a lot for a school or proposed school and certain subdivisions carried out by public authorities. On their face, these legislative exclusions mean that GAIC is not required to be paid in respect of land that is used for a utility installation, transport infrastructure or a school; as also appears from the Explanatory Memorandum to the Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill 2009. This is on the basis that land used for such purposes does not create a demand for urban infrastructure. As one might reasonably infer, this is because land use for these purposes is actually providing urban infrastructure, rather than generating a demand for that infrastructure. The provisions of s 201RF of the Act are consistent with s 201TC(2) of the Act, which provides that no GAIC is payable in respect of an acquisition of land by a public authority or municipal council in accordance with Part 2 of the Land Acquisition and Compensation Act 1986.
When the GAIC contribution is levied, the amount is calculated on a per-hectare basis on land in the contribution area.[45] The GAIC is levied in respect of the first GAIC event to occur in relation to the relevant land,[46] and may be imposed once only in respect of any relevant land.[47]
[45]Planning and Environment Act 1987, s 201SG.
[46]Planning and Environment Act 1987, s 201S(1).
[47]Planning and Environment Act 1987, s 201S(2).
The time at which a GAIC event is taken to have occurred is provided for in s 201SE of the Act, as follows:
201SE Time of occurrence of GAIC event
For purpose of this Part, a GAIC event occurs—
(a)in the case of a plan of subdivision of land, when the statement of compliance relating to the plan of subdivision is issued;
...
In relation to these provisions, the Plaintiff submits that an excluded subdivision occurring prior to a GAIC event will reduce the area of land upon which the GAIC is levied—though it is said that this will not be the case where an excluded subdivision occurs after the first GAIC event. Thus, the Plaintiff submits that the order in which subdivisions are performed is important in determining the land subject to the GAIC levy. In this respect, the Plaintiff makes reference to the speech by the then–Shadow Minister for Planning (but now Minister for Planning), Mr Wynne, to the Legislative Assembly in relation to the Planning and Environment Amendment (Schools) Bill 2011 in support of its submissions as to the framework and operation of the legislation. This Bill was passed and amended s 201RF of the Act to extend, expressly, to non-Government schools. The critical statement made in the debate by Mr Wynne upon which the Plaintiff relies is as follows:[48]
The bill requires that subdivisions for different purposes be done separately, and I think that is an important thing. In effect it is not done in globo, and land for housing and land for schools must be subdivided separately in order to apply the GAIC exemption correctly. Often what you find in some of these subdivisions is that when the land is subdivided it may be part of a housing development or there may be other social facilities that attain to that subdivision. I think it is important that where you are seeking to annex out a particular purpose—in this context, that being non-government schools—it be clearly indicated within the subdivision process. It should be separately identified and taken out of the subdivision process.
[48]Parliamentary Debates, Legislative Assembly, 26 December 2011, 6092 (Richard Wynne, Member for Richmond).
As appears from the preceding discussion of factual matters and the relevant provisions of the Act, the proper construction of s 201RF of the Act—particularly s 201RF(b)—is critical to these proceedings. It is to this aspect that I now turn.
The proper construction of s 201RF
Critical issues
The task of construing s 201RF, particularly s 201RF(b), requires analysis of the meaning of the word “purpose” in this statutory context. The immediate statutory context in which this word falls to be construed is: “The purpose of the subdivision is solely to provide land for transport infrastructure”.
The Tribunal apparently regarded the landowner’s intentions in relation to the land in its entirety[49]—“the entire purpose of the subdivision”[50]—as determinative, as the following parts of its reasons indicate:[51]
[19]The first question I must decide in this proceeding is what was the purpose of the subdivision? As I have already stated, it is clear that from 2011 until 18 minutes after the actual certificate of compliance was issued in relation to the arterial road widening subdivision, that the developer intended to, and always intended to subdivide land for road widening and the 42 blocks in question. To look at what happened at a particular moment in time in a situation like the present, in my view, is quite artificial. One has to look at the entire circumstances and the entire transaction.
[20]The entire circumstances are, in this case, that from 2011 onwards the applicant intended to and in fact did, subdivide the 42 blocks as well as the road widening section of the land. That was always its intention and its stated intention.
[49]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [19].
[50]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [33].
[51]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [19]–[20].
The Tribunal also approached the question of purpose by treating the subdivision as creating two blocks of land, each for its own purpose:[52]
In this particular instance ... the purpose for what occurred ... is in fact the subdivision of the two blocks, one for the road widening and the other for residential development are both the purposes [sic].
[52]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [32].
The Plaintiff submits that:
(a)the Tribunal’s approach in determining “purpose” on the basis of global intention is wrong in law;
(b)the Tribunal was wrong, in ascertaining the purpose of the subdivision in question, to identify the combined purpose of a number of subdivisions and then to conclude that this was the purpose of the subdivision in question;
(c)the Tribunal’s approach in treating a subdivision of land into two blocks as having two purposes is misconceived, and leaves s 201RF(b) with little or no work to do; and
(d)the preferred construction of s 201RF(b) is that which accords with the intention of the legislature that landowners should not pay the GAIC levy in relation to a subdivision that does not create demands on infrastructure.
For the reasons which follow, I am of the opinion that the position contended for by the Plaintiff is correct.
General approach to assessment of “purpose”
The Commissioner relies upon the approach of Lockhart J as to the assessment of “purpose” in Parker Pen (Aust) Pty Ltd v Export Development Grants Board:[53]
Purpose may be gleaned either from subjective or objective elements or, more usually, both. A person may say what his purpose is, but the objective facts may cast doubt upon the credibility or reliability of his statement. It is for the Tribunal of fact to consider all the circumstances and conclude whether the requisite purpose has been established. Objective facts are usually more reliable than mere protestations of purpose, intent or state of mind, which, although susceptible of testing in cross-examination, are intrinsically impenetrable and inscrutable.
[53]Parker Pen (Aust) Pty Ltd v Export Development Grants Board (1983) 67 FLR 234 at 242 (“Parker Pen”) (emphasis added by the Commissioner).
This approach as expounded by Lockhart J was not, however, as the Commissioner contends to be regarded as a “general approach”. Rather, it is a statement made with respect to “purpose” in a particular statutory context. This is emphasised by Lockhart J in the immediately preceding part of the paragraph quoted above:[54]
The word “purpose” is, of course, susceptible of a variety of meanings depending on its context. In the context of s 4(1) the inquiry must be to ascertain whether the expenditure was incurred by the person primarily and principally for the purpose of creating or seeking opportunities or creating or increasing demand for the stipulated objects, including the sale by that person for export of eligible goods manufactured in Australia. This involves a subjective element. The purpose must be someone’s purpose. It is the purpose of the person mentioned in the sub-section. To ignore subjective elements is wrong. There is, of course, a difference between the essential elements in the notion of purpose and the means whereby purpose is ascertained. Purpose may be gleaned …
The significantly different statutory context in Parker Pen was s 4(1) of the Export Market Development Grants Act 1974 (Cth).
[54]Parker Pen (1983) 67 FLR 234 at 242.
The Commissioner also submits that statements to similar effect were made by the plurality of the High Court in Fazzolari with respect to the discernment of the council’s “purpose” for compulsorily acquiring land in that case.[55] The circumstances of Fazzolari were that the council made an agreement with a developer for the latter to develop an area of land.[56] The council owned about half the land in that area, including two roads that were vested in it. It was a condition precedent of the agreement that the council acquire all of the land to be developed. Under the agreement, upon acquisition of the land, the council was to declare itself trustee of the land for the benefit of the developer in exchange for the developer providing money or money’s worth. Two companies that owned land within the area of the proposed development were each given a notice that the council intended to compulsorily acquire their land. The High Court held, unanimously, that the land sought to be acquired was being acquired for the purpose of resale, a purpose which was not permitted under the relevant statutory provisions. The plurality judgment of Gummow, Hayne, Heydon and Kiefel JJ is relied upon, particularly, by the Commissioner:[57]
[95]The purpose of the acquisition can be expressed at different levels of generality and abstraction. So, for example, it can be described as being for the purpose of the Civic Place development, or for the purpose of fulfilling the development agreement, or for the purpose of the Council performing its obligations under that agreement. Perhaps there are other expressions of the purpose that could be adopted. But whatever level of generality or abstraction is chosen when identifying the purpose of the acquisition, closer examination of that purpose will always reveal that, upon the land being acquired, the Council is to declare itself trustee of the land in return for Grocon’s provision of money and money’s worth. For that is the means that is stipulated in the development agreement as the means of achieving whatever more general or abstract statement of purpose is adopted.
[96]No doubt the acquisitions of the Fazzolari land and the Mac’s land are only two steps in a much larger arrangement recorded in the development agreement. And the development agreement can be described as being directed to the end of implementing the Master Plan for the development of Civic Place. It is therefore possible to describe each of the steps for which the development agreement provides as a step towards implementing the Master Plan or effecting the development of Civic Place. But when the Council gave proposed acquisition notices to Fazzolari and to Mac’s, the Council had made the development agreement with Grocon. The development of Civic Place for which the appellants’ land was to be acquired is for the development as the Council and Grocon stipulated in the development agreement. Stating the purpose of the acquisition as being to implement the Master Plan or to develop Civic Place, or at some other similar level of generality, must not be permitted to obscure the fact that when the acquisitions were proposed a precise form of development had been agreed. Very particular terms governing both acquisition and disposition of the appellants’ land had been stipulated in the development agreement.
[55]See Fazzolari (2009) 237 CLR 603 at 631–2 [95]–[96].
[56](2009) 237 CLR 603.
[57]Fazzolari (2009) 237 CLR 603 at 631–2 [95]–[96] (emphasis added by the Commissioner).
The Commissioner contends that the reasons set out in the judgment of the plurality confirm that:
(a)in identifying the purpose of a transaction or event in relation to land, it is relevant to consider what is intended to happen to the land upon completion of the transaction or event; and
(b)to identify what is intended to happen, it is relevant to consider the arrangements already in place in relation to the land as stipulated by the parties involved in the transaction or event. In the present case, it is submitted that this includes the Precinct Structure Plan, the planning permit and the Casey Planning Scheme.
The Plaintiff, on the other hand, contends that Fazzolari is analogous to the present case.[58] It submits that in the context of a statute which prevented the council compulsorily acquiring land for the purpose of resale, the plurality recognised that the purpose of the acquisition could be expressed at different levels of generality: the land was acquired for the purpose of the Civic Place Development, or for fulfilling the development agreement, but these could not obscure the very particular term of the agreement governing the acquisition and disposition of the appellant’s land.[59] Moreover, reference is made to the judgment of French CJ and the gravamen of the Chief Justice’s reasoning that the purpose of acquisition had to be determined in relation to each owner’s “lot”, to determine the purpose of that lot’s acquisition by the council.[60]
[58](2009) 237 CLR 603.
[59]Fazzolari (2009) 237 CLR 603 at 631–2 [95]–[96].
[60]Fazzolari (2009) 237 CLR 603 at 623 [57].
In my view, the Plaintiff’s analysis of Fazzolari is to be preferred.[61] The Commissioner’s analysis, on the other hand, ignores the different layers, or levels of generality and abstraction, with respect to “purpose” as the High Court did, in Fazzolari, recognise that there were other, less proximate, but no less real purposes for which the council acquired the land. The council and the developer stipulated in their agreement that the land was to be acquired for the development of Civic Place. The land could not have been utilised in the development of Civic Place, given the agreement between the council and the developer, unless it was on-sold by the council (by declaration of trust in return for money or money’s worth) to the developer. Although the High Court found that other purposes could also be described, at different levels of generality and abstraction, it did, nevertheless, find that there was only one purpose for which the land was acquired: the purpose of resale to the developer. The council did not acquire the land for the development of Civic Place, as the council and the developer had stipulated in the development agreement. Rather, the onsale of the land to the developer was the means of achieving the more general purposes.
[61](2009) 237 CLR 603.
Although Fazzolari[62] is not a decision based on similar statutory provisions, the Plaintiff argues that the decision is relevant and analogous because of its focus on the very particular term of the agreement governing the acquisition and disposition of the appellant’s land and the focus on each owner’s “lot”. Putting it another way, perhaps more generally, the point made by the Plaintiff is that Fazzolari militates against a “global” approach to statutory provisions with reference to “purpose” and thus requires a particular, rather than general, approach to the relevant transaction in the context of such provisions. As has been discussed previously, this is, in my view, the position which follows from the judgment of Lockhart J in Parker Pen.[63] More particularly, the Plaintiff contends that the relevant propositions arising from Fazzolari can be stated as:
(a)the sole purpose for entering into a transaction is the immediate and proximate purpose (“the Immediate Purpose”) of the transaction;
(b)any purpose served by the Immediate Purpose (“the Subsequent Purpose”) is not a purpose of the transaction;
(c)the fact that the Immediate Purpose is a necessary prerequisite for attaining a Subsequent Purpose does not make the Subsequent Purpose a purpose of the transaction; and
(d)the fact that the transaction was entered into in order to bring about a Subsequent Purpose does not make the Subsequent Purpose a purpose of the transaction.
In my view, the judgments in Fazzolari to which reference has been made support these propositions for which the Plaintiff contends. Clearly, this approach is at odds with that adopted by the Tribunal in the present circumstances.
[62](2009) 237 CLR 603.
[63](1983) 67 FLR 234. See above [51].
The Plaintiff also makes reference to Challenger, a case which concerned s 33(3) of the Duties Act 2000, which provided that no duty was payable in certain circumstances if the Commissioner was satisfied that a transfer of dutiable property was made solely because of the retirement of a trustee.[64]
[64]Challenger (2006) 63 ATR 65.
In Challenger, Hollingworth J rejected the Commissioner’s submission that regard should be had to the “wider agenda”, being the entirety and effect of all transactions that occurred on the day the trustee retired. Her Honour said the proper approach was not to ask, “why did the trustee resign?” and say that that was the purpose of the transfer. Rather, the question was, “is the only purpose of the transfer to give effect to the change of trusteeship?”[65] Moreover, her Honour accepted that it was appropriate to look at the wider context—not in order to answer the question of why a transaction occurred, but in order to perform some sort of “reality check”.[66] This expression was used by Hansen J in Perpetual Trustee Co Ltd v Commissioner of State Revenue[67] in reference to the submission that only some of the steps effectively constituting a certain transfer of land should be considered by the court. That submission, Hansen J said, had “the ring of artificiality about it”.[68] A related submission that a line be drawn separating different components of a single transaction “seems artificial and removed from the reality of the parties’ own actions”.[69] Hollingworth J went on to say, in Challenger, that in order to determine the purpose of a transfer, it must be analysed from a legal point of view.[70] Her Honour said that the Tribunal was “not allowed” to ignore “the proper legal characterisation of what in fact occurred.”[71] Citing Gleeson CJ’s decision in Prime Wheat Association Ltd v Chief Commissioner of Stamp Duties,[72] her Honour said that the courts have stressed that liability for duty must be determined by reference to the actual transaction.[73]
[65]Challenger (2006) 63 ATR 65 at 72 [32], [34].
[66]Challenger (2006) 63 ATR 65 at 72–3 [36].
[67](2000) 44 ATR 273 at 288 [59] (“Perpetual”).
[68]Perpetual (2000) 44 ATR 273 at 287–8 [58].
[69]Perpetual (2000) 44 ATR 273 at 288 [59].
[70]Challenger (2006) 63 ATR 65 at 72–3 [36].
[71]Challenger (2006) 63 ATR 65 at 73 [37].
[72](1997) 42 NSWLR 505.
[73]Challenger (2006) 63 ATR 65 at 72–3 [36].
In addition to relying upon Fazzolari[74] and Challenger[75] in support of the contention that the Court’s focus in the present proceedings must, in the relevant statutory context, be on the particular transaction, the Road Widening Subdivision, the Plaintiff made reference to a number of other authorities which distinguish purpose from motive.
[74](2009) 237 CLR 603.
[75]Challenger (2006) 63 ATR 65.
Thus, distinguishing purpose and motive, Gleeson CJ, in Woollahra Municipal Council v Minister for Environment, said:[76]
[76](1991) 23 NSWLR 710 at 714–5.
In the context of planning law, a statement of the purpose for which land is being used is a description or characterisation of what is being done with, or upon, the land, not an account of the motives of the persons involved in that activity.
Similarly, in the Privy Council’s advice in Newton v Federal Commissioner of Taxation, Lord Denning said that in determining whether the purpose of a contract, agreement or arrangement was to avoid tax, the relevant statute was not concerned with the motives of individuals, but only with the means that they employed:[77]
The purpose of a contract, agreement or arrangement must be what it is intended to effect and that intention must be ascertained from its terms. These terms may be oral or written or may have to be inferred from the circumstances but, when they have been ascertained, their purpose must be what they effect.
Again, in similar vein, Gleeson CJ said, in News Ltd v South Sydney District Rugby League Football Club Ltd:[78]
Purpose is to be distinguished from motive. The purpose of conduct is the end sought to be accomplished by the conduct. The motive for conduct is the reason for seeking that end.
[77](1958) 98 CLR 3 at 8 quoting Commissioner of Taxation v Newton (1957) 96 CLR at 630 (emphasis in original).
[78](2003) 215 CLR 563 at 573 [18].
Thus, against the background of these authorities, the Plaintiff submits that whilst it may be the case, consistently with the Tribunal’s view, that the motive of the “development” was “the developer’s income and profit making”, and the motive of the Road Widening Subdivision was most likely to be a step in the implementation of urban development and, indeed, the subdivision may have been an essential pre-requisite, that development was not its purpose. The Plaintiff contends that what was being done must be ascertained from the statement of compliance and the plan of subdivision. Clearly, it is said, the end sought to be accomplished by the Road Widening Subdivision was the provision of land for transport infrastructure.
“Purpose” in the statutory context
The Commissioner submits—conceding that the Road Widening Subdivision was not artificial or contrived—that the “purpose” of the subdivision is the end sought to be accomplished by the subdivision. In this respect, reference is made to the judgment of Gleeson CJ in News Ltd v South Sydney District Rugby League Football Club Ltd, relying on the proposition as appears from that part of the judgment of Gleeson CJ set out above, that the purpose of conduct “is the end sought to be accomplished by the conduct”.[79] The Commissioner says that the parties agree on this point, referring to that part of the Plaintiff’s submissions extracting sentences from the judgment of Gleeson CJ in News Ltd v South Sydney District Rugby League Football Club Ltd.[80]
[79](2003) 215 CLR 563 at 573 [18].
[80]See Plaintiff’s Submissions (30 October 2015) [38]. See above [60].
Taken at its most general level, one would not quarrel with this submission, but in the present context it does, of course, beg the question—the question being, what is the end sought to be accomplished by the subdivision? In this respect, I have already made reference to the Plaintiff’s submission that the motive of the Road Widening Subdivision was most likely to be a step in the implementation of urban development and that this subdivision may have been an essential prerequisite—but this was not its purpose. Thus, the Plaintiff’s submission is that the end sought to be accomplished by the Road Widening Subdivision was the provision of land for transport infrastructure, an approach which focuses upon the subdivision itself and not the “global” picture which was adopted by the Tribunal in the present context and, by analogy, was rejected in Fazzolari[81] and also in Challenger.[82] In my view, these cases do, as discussed, support the Plaintiff’s submissions in this respect.
[81](2009) 237 CLR 603.
[82]Challenger (2006) 63 ATR 65.
Moreover, in my view, a more complete reading of the passage from the judgment of Gleeson CJ which is relied upon by the Commissioner makes clear the different statutory context—by reading the quoted passage in the context of the discussion of the provisions of the Trade Practices Act 1974 (Cth) which were being considered in News Ltd v South Sydney District Rugby League Football Club Ltd:[83]
We are concerned with the purpose of a provision (here, the 14 team term), in the context of a definition section (s 4D) of the Act defining an expression used in another section (s 45) which distinguishes between purpose and effect. The distinction between purpose and effect is significant. In a case such as the present, it is the subjective purpose of News and ARL in including the 14 team term, that is to say, the end they had in view, that is to be determined. Purpose is to be distinguished from motive. The purpose of conduct is the end sought to be accomplished by the conduct. The motive for conduct is the reason for seeking that end. The appropriate description or characterisation of the end sought to be accomplished (purpose), as distinct from the reason for seeking that end (motive), may depend upon the legislative or other context in which the task is undertaken. Thus, for example, in describing, for the application of a law relating to tax avoidance, the purpose of an individual, or of an arrangement, it will be necessary to look at what is sought to be achieved that is of fiscal consequence, not at a more remote, but fiscally irrelevant, object, such as increasing a taxpayer’s disposable income. Similarly, in the context of competition law, it is necessary to identify purpose by describing what is sought to be achieved by reference to what is relevant in market terms. The purpose of the 14 team term was the objective, in relation to the nature of their business arrangements, that News and ARL sought to achieve; not the reason why they sought to achieve that objective. They may have had different, and multiple, reasons for their conduct. The manifest effect of a provision in an agreement, in a given case, may be the clearest indication of its purpose. In other cases, it may be difficult, or even impossible, to determine the purpose (of a kind relevant to the operation of the Act) of a provision in a written contract merely by reading the document. And, of course, the legislation deals with contracts, arrangements or understandings.
Thus in the present case, the “conduct” is the Road Widening Subdivision, not the implementation of the residential subdivision and urban development.
[83](2003) 215 CLR 563 at 573 [18] (emphasis added).
The Commissioner also submits that a “subdivision” is the division of land into two or more parts which can be disposed of separately.[84] Thus, the Commissioner contends, it follows that to determine “the purpose of the subdivision”, it is necessary to consider each of the parts into which the land is divided. It is said that in the present case this involves a consideration of both pieces of land, R-1 and Y.
[84]Subdivision Act 1988, s 3.
In response, the Plaintiff observes that all subdivisions must divide land into two or more parts that can be disposed of separately; again, referring to the same provision of the Subdivision Act 1988 upon which the Commissioner relied.[85] The Tribunal took the view that where a landowner has a purpose for holding the residual land, it can (almost) never[86] be the case that the purpose of a subdivision is solely to create a lot for utility installation, or land for transport infrastructure or a lot for a school or proposed school.[87] Continuing, the Plaintiff submits that, on this view, s 201RF(b) of the Act can only apply where a subdivision provides land for transport infrastructure and the landowner holds the residual land for no purpose at all. As the Plaintiff says in this respect, it is difficult to conceive of a situation where this would ever be the case.
[85]Namely, Subdivision Act 1988, s 3.
[86]See below, [67].
[87]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [38].
Continuing, the Plaintiff submits that since it is “improbable that the framers of legislation could have intended to insert a provision which has virtually no practical effect, one should look to see whether any other meaning produces a more reasonable result.”[88] The Tribunal responded to this objection with an example of the work which the section would have to do on the Tribunal’s “narrow interpretation”:[89]
[I]f a farmer who desired to continue his farming activities cut off or subdivided a road from his land, for the purposes of a highway, and then continued his farming purposes, then in those circumstances it may well be considered that the subdivision was solely for the purpose of the road as in fact if the farmer continued with his farming activities [sic].
The Plaintiff contends that this example appears to stand for the proposition that the ongoing use of the residual land for pre-subdivision purposes does not constitute a purpose of the subdivision in terms of the operation of s 201RF(b). For the reasons which follow, this is not a proposition which I accept. On this basis, the Plaintiff says that the current case must be an excluded subdivision as there has been ongoing use of the residual land for the pre-subdivision purpose of holding it for purposes of urban development.[90] Returning to the subject of ongoing use of residual land in a subdivision, it appears to me to be artificial in the extreme to seek to give s 201RF some work to do where the approach adopted is to look to the purpose of the creation of each lot in a subdivision by, in effect, deeming the lot retained for continuing use as having “no purpose”. In the farming land example, the lot retained for continuing use—farming—clearly has a purpose: “farming”. For the reasons discussed, what may be described as the “dual purpose” approach (at least with a two lot subdivision) is erroneous and not supported by the legislation—but, in any event, if that path of reasoning is taken, it must be consistent in terms of its logic. Thus, if the approach is applied with logical consistency, there is no work for s 201RF of the Act.
[88] Minister of State for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 566 at 574.
[89]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [36].
[90]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [19]–[20].
At a more general level, the Plaintiff submits that the Commissioner’s approach of directing attention to each of the lots produced by a subdivision reflects his flawed approach to the problem, requiring the Court to first determine which facts are relevant and irrelevant. The Commissioner’s approach does, as the Plaintiff contends, commence with an intuitive judgment as to which facts are relevant (“each of the parts into which the land is divided”), and then proceeds from this premise to the implied (but unstated) conclusion that since there are separate parts of land, there must also be separate purposes for which each part of the land was created. It is, however, only when the statutory construction task is complete that the practical question of how the existence of that “purpose” is to be established may be approached. The landowner’s purpose may be apparent from written agreements, other documents, contemporaneous questions, witness testimony and, perhaps, consideration of “each of the parts into which the land is divided”. This practical issue is irrelevant to resolution of the appeal question.
The issue raised in the Plaintiff’s submissions, both specifically and more generally, to which reference has been made, namely that the interpretation contended for by the Commissioner and apparently adopted by the Tribunal is a matter to which I will return. In the meantime, it is also helpful to consider submissions in relation to what flows from the use of the words “solely” and “to provide” in the context of the relevant provisions of s 201RF(b) of the Act.
The Commissioner contends that the use of the word “solely” is a strong indicator of legislative purpose, particularly as to the narrowness of the concept of excluded subdivisions of land. In this context, and according to the ordinary meaning of the word, it is submitted that it must be established that the subdivision was only for the purpose of providing transport infrastructure and that it was not for any other purpose.[91] However, the Commissioner says that when the subdivision is placed in the context of the Precinct Structure Plan, the planning permit and the Casey Planning Scheme, it is apparent that the subdivision was but one step amongst many taken to implement the overall development plan set out in the Precinct Structure Plan, which included the future subdivision of lot Y for residential housing. The Commissioner does not dispute that a purpose of the subdivision was to provide the land designated as R-1 for transport infrastructure. But providing land for the future subdivision of lot Y for residential housing was also a purpose of the subdivision. The Plaintiff does not dispute the rather prosaic proposition that “solely” means “only”. The question, however, as submitted by the Plaintiff, is not what meaning should be given to the word “solely”, but the meaning to be given to the words “the purpose of the subdivision”. The Commissioner, in support of his submission as to the significance of the word “solely” in the legislation, places particular reliance on the decision of the Court of Appeal in Commissioner of State Revenue v Lend Lease Funds Management Ltd.[92] This case, apart from having been decided in a different statutory context, does not advance the Commissioner’s position. Rather, it emphasises the need to focus on the legal effect of the particular transaction under consideration and is, in my view, consistent with the approach applied in the Challenger[93] and Perpetual[94] cases, as discussed.[95]
[91]See Commissioner of State Revenue v Lend Lease Funds Management Ltd (2011) 33 VR 204 at 214–17 [43]–[49], 247–8 [173] and the cases there cited.
[92](2011) 33 VR 204.
[93]Challenger (2006) 63 ATR 65.
[94](2000) 44 ATR 273.
[95]See above [57]–[58].
Moreover, the Commissioner submits that the use of the words “to provide” confirm that the enquiry about the “purpose of the subdivision” necessarily looks to the future use of the land. More than that, the words “to provide”, on their ordinary meaning, mean to supply something for use; to make available.[96] In the context of a subdivision of land, “to provide” land must, it is said, mean to make that land available for a use that was not previously available. In this case, the Commissioner says that it is clear from the controls on the use of land imposed by the Precinct Structure Plan, the planning permit and the Casey Planning Scheme that the use of the land designated as Y for future residential subdivision was not available without the provision of the land designated as R-1 for transport infrastructure. The Precinct Structure Plan provided for and required the subdivision of the land designated as R-1 as part and parcel of allowing the use of the land designated as Y for future residential subdivision. So, the Commissioner contends, the subdivision certainly provided land for transport infrastructure, but it also provided land for future residential subdivision, a use of the land that was not previously available. In my view, these submissions do not advance the Commissioner’s position. The element of futurity inherent in the expression “to provide” exists in relation to land when subdivided, with respect to future use—except perhaps in the ongoing use of residual land, such as in the “farming” example. Thus, this submission really adds nothing of significance to the “dual purpose” approach contended for by the Commissioner.
[96]Oxford English Dictionary (Oxford University Press, 3rd ed, September 2007).
With respect to the Plaintiff’s submissions, the Commissioner says that other than stating bald conclusions, the Plaintiff’s submissions do not address the points made by the Commissioner, as set out above, as a matter of construction. Thus, the Commissioner submits that it may be accepted that the Road Widening Subdivision was not artificial or contrived;[97] it may be accepted that the Tribunal should consider the proper legal characterisation of the subdivision when determining the purpose of the subdivision;[98] and it may be accepted that the Plaintiff’s motives for staging the subdivisions are to be distinguished from the purpose of the subdivision.[99] However, the Commissioner says that none of that explains why, as a matter of construction and in light of the authorities to which reference was made in support of the Commissioner’s position, the Tribunal was bound only to consider the statement of compliance and the plan of subdivision when determining that purpose.[100] Nor, it is said, does it explain why the Tribunal was bound not to consider any other circumstances, notwithstanding the subdivision could not have occurred without a planning permit, that it did occur under the authority of a planning permit (which permit was expressly identified on the plan of subdivision), which permit itself expressly referred to the Precinct Structure Plan and which permit was granted under a planning scheme that incorporated the Precinct Structure Plan. Instead, the Commissioner says, by way of criticism, that the Plaintiff directs its submissions to arguing against the result of the Commissioner’s construction of s 201RF. In this respect, the Commissioner makes two principal points. For the preceding reasons and for those which follow, I reject those submissions of the Commissioner and those made with respect to the two points which he foreshadows.
[97]Plaintiff’s Submissions (30 October 2015) [32].
[98]Plaintiff’s Submissions (30 October 2015) [33]–[35].
[99]Plaintiff’s Submissions (30 October 2015) [36]–[39].
[100]Cf Plaintiff’s Submissions (30 October 2015) [39].
First, the Commissioner cites the Plaintiff’s contention that “the preferred construction of s 201RF(b) is that which accords with the intention of the legislature that landowners should not pay the GAIC levy in relation to a subdivision that does not create demands on infrastructure”.[101] The Plaintiff relies on statements from parliamentary debates, explanatory memoranda and its own submissions (particularly as to “sequential subdivisions”) to identify what it says was the intention of the legislature. Leaving aside issues about whether the Plaintiff has correctly identified Parliament’s intention, the difficulty with that contention is that it runs directly counter to the proposition that legislative history and extrinsic material cannot displace the meaning of the statutory text.[102] This does, of course, depend upon the clarity of the statutory text and, in any event, the provisions of the Interpretation of Legislation Act 1984 cannot be ignored.
[101]Plaintiff’s Submissions (30 October 2015) [28(d)].
[102]The Commissioner relies in this aspect upon Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; though it may be observed that a purposive approach may, in some cases, transcend what otherwise might be regarded as a set of coherent statutory provisions: see Subway Systems Australia Pty Ltd v Ireland [2014] VSCA 142.
In the present case, however, and as Fazzolari both recognises and demonstrates, there can be several different meanings attributed to the word “purpose”, at different levels of abstraction and generality.[103] As discussed in these reasons, I accept that Fazzolari stands for the proposition that the most immediate and proximate purpose is the purpose intended by parliament when statutes refer to the “purpose” of a transaction; at least in a statutory context similar to that now under consideration. This proposition or approach does not, however, displace the meaning of the statutory text. Rather, it constitutes a choice of one of several meanings, each of which is harmonious with the everyday meaning of the word “purpose”.
[103](2009) 237 CLR 603.
The extrinsic materials and the terms of the provisions of the Act which have been considered establish, clearly in my view, that the intention of the excluded subdivision provisions is to ensure that the GAIC only applies to proposals that lead to significant new urban development with demands on infrastructure. The construction of the term “purpose” arising from Fazzolari and favoured by the Plaintiff promotes that intention, by allowing s 201RF to exclude subdivisions that do not lead to such significant new urban development from GAIC.
Moreover, there is no ready explanation, and none is provided by the Commissioner, as to why he asserts that construing “purpose” to mean “immediate and proximate purpose” would displace the meaning of the statutory text. The Commissioner rejects the position expressed in the Explanatory Memorandum that the purpose of providing for excluded subdivisions of land is to ensure that the GAIC applies only to subdivision proposals that will lead to significant new urban development and demands on infrastructure.[104] It is unclear whether, as well:
(a)the Commissioner rejects the proposition that the excluded subdivisions comprising s 201RF are all subdivisions that do not lead to significant new urban development; and
(b)he submits that the Tribunal fell into error in stating that it “did not disagree” with the Plaintiff’s submissions as to the purpose of the legislation.[105]
[104]Commissioner’s Outline of Submissions (27 November 2015) [40].
[105]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [37].
Secondly, the Commissioner refers to the Plaintiff’s contention that the Commissioner’s construction leaves s 201RF(b) with “no work to do”. To support this argument, the Commissioner says, the Plaintiff constructs a “straw man”: “On [the Tribunal’s approach] s 201RF(b) can only apply where a subdivision provides land for transport infrastructure, and the landowner holds the residual land for no purpose at all.”[106] Nor, the Commissioner says, is it an accurate description of the circumstances in which s 201RF(b) may operate. The purpose for which the landowner holds land is not determinative of, nor a proxy for, the purpose of the subdivision. Section 201RF(b) will operate where there is only one purpose for a subdivision and that purpose is to provide transport infrastructure.
[106]Plaintiff’s Submissions (30 October 2015) [41].
The “farmer” example given by the Tribunal is, the Commissioner says, an example of a subdivision which would likely have only one purpose because all that was “provided” by the subdivision (in the sense of a use not previously occurring and which could not otherwise occur) was land for “transport infrastructure”. Moreover, it is said that the Plaintiff’s attempt to bring itself within the Tribunal’s “farmer” example by arguing that “there has been ongoing use of the residual land for the pre-subdivision purpose of holding it for purposes of urban development”[107] conflates the use of the land (“what is being done with, or upon, the land”[108]) with the motives of the landowner. It also, in the Commissioner’s submission, fails to recognise that under the Precinct Structure Plan, the planning permit and the Casey Planning Scheme, use of the land for urban development could not occur without the Road Widening Subdivision. The Commissioner submits in this respect that two things were “provided” for by the Road Widening Subdivision (in the sense of a use not previously occurring and which could not otherwise occur): land for transport infrastructure and land for future residential subdivision.
[107]Plaintiff’s Submissions (30 October 2015) [43].
[108]Woollhara Municipal Council v Minister for the Environment (1991) 23 NSWLR 710 at 714–5.
Concluding, the Commissioner contends that the terms of s 201RF(b) itself, particularly the use of the word “solely”, demonstrate the paragraph is likely to have a narrow field of operation. But it is said that is not the same thing as saying the paragraph has “no work to do”. It may, it is said, be that developers such as the Plaintiff cannot “take advantage”[109] of the paragraph by using a “sequential subdivision model”.[110] Again, as the Commissioner submits, that does not mean the paragraph has “no work to do”. The paragraph will operate, the Commissioner contends, where there is only one purpose of a subdivision and that purpose is the provision of transport infrastructure. As discussed previously, I reject this approach contended for by the Commissioner.
[109]Plaintiff’s Submissions (30 October 2015) [50].
[110]Plaintiff’s Submissions (30 October 2015) [48].
Moreover, apart from giving the relevant statutory provisions little work to do, the Commissioner’s submissions do, in my view, put a significant gloss on the provisions of s 201RF of the Act. Close analysis of the Commissioner’s submissions[111] reveals, as the Plaintiff submits, that he construes the statutory words “the purpose of the subdivision is solely to provide land for transport infrastructure” as meaning that—
[111]See Commissioner’s Outline of Submissions (27 November 2015) [37], [41], [42].
the purpose of the subdivision is to provide land for transport infrastructure and not for any other use not previously occurring and which could not otherwise occur—
or, which amounts to the same thing:
the purpose of the subdivision is solely to provide land for transport infrastructure and/or for any other use so long as that use was previously occurring or could have occurred without the subdivision.
I accept that this construction does not advance the Commissioner’s case. The Road Widening Subdivision provided land for transport infrastructure and not for any other use not previously occurring.
Moreover, as contended by the Plaintiff, the Commissioner’s error lies in his assertion that the subdivision “also provided land for future residential subdivision, a use of the land that was not previously available.”[112]
This is incorrect, because prior to the subdivision, the land designated as Y was land for future residential subdivision. That use remain unchanged. As observed by the Plaintiff, the Commissioner may be taking the view that prior to the issue of the Road Widening Subdivision statement of compliance, the residual land was potentially available for future residential subdivision (conditional upon registration of Plan J, the Road Widening Subdivision plan), whereas after the issue of the Road Widening Subdivision statement of compliance, the subdivision would make the land actually (or unconditionally) available for future residential subdivision.[113] That view, as well, is also incorrect. Both before and after the issue of the Road Widening Subdivision statement of compliance, the residual land was only potentially available for future residential subdivision. Residential subdivision of the residual land was at both times conditional upon the issue of further statements of compliance for Plan G (the Gas Easement Subdivision Plan), and Plan H (the Residential Subdivision Plan). Thus at the time the Road Widening Subdivision statement of compliance was issued, that subdivision would not have provided other land for any use not previously available. The residual land was and remained potentially but not actually available for future residential subdivision and, on the Commissioner’s preferred construction of 201RF(b), the Road Widening Subdivision was an excluded subdivision. It is a position analogous to the “farm” subdivision example which is discussed in the preceding reasons.
[112]Commissioner’s Outline of Submissions (27 November 2015) [37]
[113]See Commissioner’s Outline of Submissions (27 November 2015) [37]: “[T]he use of the land designated as Y for future residential subdivision was not available without the provision of the land designated as R-1 for transport infrastructure.”
In any event, the Commissioner’s construction must be rejected. As discussed, it places a gloss on the words of the statute that cannot be justified by reference to the statutory text or context, or the extrinsic materials. The flaw in the Commissioner’s logic is that his proposed construction does not arise from the premises he postulates. Rather, interpretation of “to provide” to mean “to provide for a use that was not previously available” suggests that the statutory words should be construed to mean that—[114]
the purpose of the subdivision is solely to provide land for transport infrastructure, so long as the land thus provided was not previously available for transport infrastructure.
That construction sheds no light on the appeal question, because it is the word “purpose” and not “provide” which is the source of ambiguity.
[114]Commissioner’s Outline of Submissions (27 November 2015) [37].
In this particular case, the Plaintiff contends the legal effect of the Road Widening Subdivision was to vest 0.778 hectares of land in Council for transport infrastructure. The remaining parcel (a lot) continued to be held for the same purpose as it was held before the subdivision, namely future residential subdivision. The legal effect of the Road Widening Subdivision was not to subdivide 42 residential blocks of land. The Tribunal thus failed to appreciate the proper legal characterisation of the Road Widening Subdivision. The Tribunal also failed to consider and apply the certificate of compliance for the subdivision in question. Applying Fazzolari,[115] the Plaintiff contends that the Tribunal was required to look at the particular terms of the Road Widening Subdivision, rather than focusing on the “entire circumstances” or the purpose of the entire series of subdivisions. For the preceding reasons, I accept that this is the position.
[115](2009) 237 CLR 603.
In the present circumstances, but mindful of the authorities with respect to statutory interpretation to which reference has been made, it is artificial not to have regard to apparent legislative intention having regard to the ambiguities inherent in the provisions of s 201RF of the Act.
The GAIC is intended to be a means of funding State infrastructure in growth areas.[116] The legislation deems the issue of a statement of compliance in relation to a subdivision to be a GAIC event because—
most subdivisions (except those being excluded) lead to urban development that will require significant investments by Government to provide essential infrastructure over time.[117]
[116]Explanatory Memorandum, Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill 2009, 1. See also Planning and Environment Act 1987, ss 201V, 201VA, 201VB.
[117]Explanatory Memorandum, Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill 2009, 5.
In relation to excluded events, the Explanatory Memorandum says:
This ensures that the GAIC applies only to subdivision proposals that will lead to significant new urban development and consequent demands on infrastructure and does not capture minor activity.[118]
[118]Explanatory Memorandum, Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill 2009, 7.
This explanation is borne out by the legislative context. None of the subdivisions deemed to be excluded subdivisions in s 201RF lead to significant new urban development. The excluded subdivisions provide land for public purposes or infrastructure, realign property boundaries, create lots which are not appropriate for residential subdivision, or do not add to the existing urban density.
Thus, if Parliament intended the GAIC legislation to apply only to subdivisions which lead to significant new urban development, and to provide that landowners may avoid the GAIC in relation to excluded subdivisions, it is most unlikely that the legislation would not provide for a mechanism that would allow this to occur.
Moreover, ss 201S and 201SE are compatible with the sequential subdivision model, whereby excluded subdivisions are carried out first, so that the first GAIC event affects land which is devoted, either wholly or in part, to residential development. Section 201S has the effect of denying an exemption for potentially excluded subdivisions where they occur after the first GAIC event: it can be assumed that the legislature was aware that this provision would encourage landowners to ensure that excluded subdivisions preceded the first GAIC event. Section 201SE explicitly states that the time that the GAIC event occurs in the case of a plan of subdivision is when the statement of compliance is issued. Timing is of the essence for sequential subdivisions.
The Tribunal’s interpretation of s 201RF(b) is incompatible with sequential subdivisions. The “entire purpose” of a series of sequential subdivisions (urban development) is a purpose foreign to the sole purposes required by ss 201RF(a)–(ba)—utility installations, transport infrastructure or any other public purpose, and schools or proposed schools. Further, each of these subdivisions would leave a residual block intended for residential subdivision: again, according to the Tribunal, a purpose foreign to the statutorily prescribed sole purposes.
As the Plaintiff also points out, the legislation offers no mechanism other than sequential subdivisions by which property developers can take advantage of the relevant excluded subdivision of land provisions.[119] It is, in my view, telling against the interpretation for which the Commissioner contends that whilst accepting that the excluded subdivision provisions would not apply to a single stage multi-lot, multi-purpose, subdivision,[120] the staging of two lot subdivisions is, in effect, to be disregarded in favour of a global approach to the legislation. As has been discussed, this would, on the Commissioner’s arguments, leave, at best, an extremely narrow field of operation for this legislation—a narrowness which, for the reasons indicated, is at odds with both the statutory language and the legislative intent which, in my view, is clearly demonstrated by both the statutory language and relevant extrinsic materials. It is also an approach which would render almost entirely pointless Parliament’s deliberations on, and amendments effected by, the Planning and Environment Amendment (Schools) Act 2012.[121] The counter argument by the Commissioner seeking to save some operation for this amending legislation is, in my view, simply a revisitation of the “farm” example with reference to continuing residual use in one of the subdivided lots and is, for the preceding reasons, not persuasive. Moreover, the reference to the obligation of a school to “pay the tax” in the Parliamentary Debates on the 2011 amending bill takes matters no further.[122] It is a comment, at least superficially, at odds with the statutory language and should, in the context of the debates, be viewed as a general comment. It is a general comment in the sense observed by the Plaintiff, because whether or not a school, the beneficiary of a subdivided parcel, “pays the tax” itself when the lot is subdivided for the purpose of a school, it does not thereby vest in the school and, consequently, the land must be purchased by the school. It follows that, unless the developer is altruistic, it is clear that the “tax” will be added to the price of the lot sold to the school. Thus, in substance and reality, the school would “pay the tax”.
[119]See also above [44].
[120]Transcript 92.
[121]Transcript 20–33, 61–3, 67, 94–7.
[122]Transcript 96.
The Tribunal “did not disagree” with the Plaintiff’s submissions as to the purpose of the legislation.[123] Given this common ground, the Plaintiff’s construction of s 201RF(b) must be preferred to that of the Tribunal, pursuant to s 35(a) of the Interpretation of Legislation Act 1984:
[123]Frontlink Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 741, [37].
35 Principles of and aids to interpretation
In the interpretation of a provision of an Act or subordinate instrument—
(a)a construction that would promote the purpose or object underlying the Act or subordinate instrument … shall be preferred to a construction that would not promote that purpose or object;
…
In my view, these provisions are clearly engaged having regard to the arguments advanced by the parties in this proceeding—arguments which demonstrate the inherent ambiguity in s 201RF of the Act; at least having regard to the position contended for by the Commissioner. I make this observation with respect to the Commissioner’s position because in many respects the position contended for by the Plaintiff is a literal interpretation, reliant on the words of the statutory text—“the purpose” of “the subdivision”; namely, the Road Widening Subdivision.[124]
[124](emphasis added).
As the Tribunal decision the subject of these proceedings proceeded on a fundamentally erroneous basis—having misconstrued the relevant statutory provisions—it is not necessary to itemise the variety of consequential and other errors in the decision. It is sufficient to note that the Plaintiff has done so in its oral submissions and that, for the preceding reasons, I accept that it has done so accurately.[125] The Commissioner argued a contrary position, but based on an interpretation and approach to the statutory provisions which I have rejected.[126]
[125]Transcript 73–85.
[126]Transcript 112 and following.
Conclusion and orders
For the preceding reasons, I am of the opinion that the following propositions do apply to the present case:
(a)the immediate and proximate purpose of the Road Widening Subdivision was to provide land for transport infrastructure;
(b)the purpose served by providing land for transport infrastructure—implementation of the residential subdivision—is not a purpose of the Road Widening Subdivision;
(c)the fact that the Road Widening Subdivision was a necessary prerequisite for implementation of the residential subdivision does not make implementation of the residential subdivision a purpose of the Road Widening Subdivision;
(d)the fact that the Road Widening Subdivision was entered into in order to bring about the residential subdivision does not make the residential subdivision a purpose of the Road Widening Subdivision.
It follows that the Road Widening Subdivision is an excluded subdivision because the purpose of that subdivision was solely to provide land for transport infrastructure.
The parties are to bring in orders to give effect to these reasons. The question of costs is reserved and I will hear the parties further on this issue.
APPENDIX
Road Widening Subdivision
(PS 713400J)
0
8
0