Illawarra Retirement Trust ACN 000 726 536 v Commissioner for Act Revenue (Administrative Review) [

[2021] ACAT 56

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ILLAWARRA RETIREMENT TRUST ACN 000 726 536 v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2021] ACAT 56

AT 52/2020

Catchwords:               ADMINISTRATIVE REVIEW – rateable land –assessment of rates during first two rating periods after acquisition of land – use of land for benevolent or charitable purposes – activities which are ancillary to the primary charitable purpose – intergenerational and community activity in aged care and residential facilities – whether planning for a collocated child care centre was an ancillary activity during rating period under review

Legislation cited:        Duties Act 1999

Rates Act 2004 s 8

Cases cited:Council of the City of Newcastle v Royal Newcastle Hospital [1957] HCA 15

Council of the City of Newcastle v Royal Newcastle Hospital [1959] AC 246
Ryde Municipal Council v Macquarie University [1978] HCA 58
Salvation Army (Victoria) Property Trust v Fern Tree Gully Shire Council [1952] HCA 4

Tribunal:  Senior Member G Lunney SC (Presiding)

Senior Member M Sinclair

Date of Orders:  25 June 2021

Date of Reasons for Decision:      25 June 2021

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          AT 52/2020

BETWEEN:

ILLAWARRA RETIREMENT TRUST ACN 000 726 536

Applicant

AND:

COMMISSIONER FOR ACT REVENUE

Respondent

TRIBUNAL:Senior Member G Lunney SC (Presiding)

Senior Member M Sinclair

DATE:25 June 2021

ORDER

The Tribunal orders that:

1. The decision under review is confirmed.

   ………………………………..

   Senior Member G Lunney SC

   For and on behalf of the Tribunal

REASONS FOR DECISION

1. This is an application for review of a decision filed on 21 July 2020. The reviewable decision was dated 24 June 2020. The decision was the issue of two rate assessment notices. The issue in the proceedings is whether the property was a rateable property for the purposes of the Rates Act 2004 (Rates Act).

Background

1. The applicant (IRT) operates retirement villages and residential aged care facilities in the Australian Capital Territory, New South Wales and Queensland. It is appropriately registered as a benevolent institution and charitable organisation under state, territory and Commonwealth legislation. In the Territory it operates Kangara Waters in Belconnen which contains a co-located retirement village and aged care facility. It also operates a catering business which services most of its facilities as well as some third-party aged care providers.

2. In December 2017 Capital Estate Developments Pty Ltd was the developer of part of Denman Prospect, a suburb in Canberra. It called, by request for tender, for expressions of interest for purchase of a block in the suburb. The block was to be used as a retirement living site. It was a select tender process with submissions only being accepted from invited parties.

3. The applicant conducted investigations into the investment and submitted an offer to purchase the block on 15 March 2018. It was accepted and a contract was entered into on 20 March 2018.

4. On 8 November 2018 the Crown lease for the block was issued to Capital Estate Developments, and settlement of the purchase took place on 17 December 2018.

5. Duty pursuant to the Duties Act 1999 on the transfer was exempted for IRT on the basis that it was a charitable organisation.

6. On 25 January 2019, the respondent issued a rates notice for the period 8 November 2018 to 30 June 2019 totalling $382,677.95. This was on the basis that the land was used for commercial purposes. Certain correspondence was entered into, but on 16 September 2019 a rates notice was issued for the 2019-20 year totalling $611,495.98. This assessment was also on a commercial basis. Further correspondence ensued.

7. On 10 December 2019, the applicant applied for apportionment of rates for the block between commercial and residential bases without prejudice to the outcome of these proceedings.

8. That application was approved, apportioning the land 1.644% for commercial purposes and 98.356% for residential purposes. Two amended assessments were issued which resulted in a significant reduction in the total amounts of rates payable – for 2018/2019 to $40,469.87 and for 2019/2020 to $64,235.36 The applicant objected to these assessments.

9. The applicant’s basis of objection was that section 8(1)(b)(iii) of the Rates Act applied. It is as follows:

   8 Meaning of rateable land

   (1)     In this Act:

   rateable land—

   (a)means all land in the ACT, including Commonwealth land; but

   (b)does not include—

   …

   (iii)land leased to charitable organisations and used exclusively for religious, educational, benevolent or charitable purposes…

10. The applicant’s contention was that all its activities associated with the land were ‘uses’ of the land. All planned activities were charitable. The construction of a retirement village and aged care facility and its operation were clearly charitable. Other activities, for example, café, hairdresser, physiotherapist, and child care centre were ancillary to the primary charitable purposes and were thus also charitable. All planning and preparation activities on and associated with the land were ‘uses’ of the land. The land at all times since its acquisition had been used for charitable purposes for the provisions of section 8.

11. The applicant’s objection was disallowed. The respondent took the view that preparatory activities were not uses of the land, and that in any event, the ancillary uses were not charitable. The applicant then lodged the subject application.

Evidence and hearing

1. The evidence was mainly documentary and included the Tribunal documents and further material tendered by the respondent. Mr Stig Andersen was the applicant’s sole witness. He was the Executive General Manager - Retirement Villages for the respondent. His affidavit with annexures was marked and he gave evidence and was cross examined.

2. It was accepted, at least for the purposes of the hearing, that the applicant was a charitable organisation bound by a constitution that gave effect to that purpose. On the same basis the applicant accepted that it bore an evidentiary onus to establish the factual basis of its contention that its use and proposed use of the land fulfilled the requirements of section 8(1)(b)(iii) and at all material times was exclusively for charitable purposes.

3. The applicant’s objects were described in its Constitution as being to provide services (including housing) to elderly and aged persons in need of relief/help. The Constitution also sets out the powers of the applicant which are to be exercised in furtherance of the objects of the company.

4. The request for tender which the applicant responded to is reproduced in the Tribunal documents commencing at page 106. It includes a draft Crown lease for the block which contains a purpose clause. This shows the use of the land to be for purposes of residential care accommodation and retirement village. Additional uses listed were for community purposes, non-retail commercial uses or shop. Community use was defined to include child care centre. The purpose clause also provided that any shop or non-retail commercial use or community use should be located on the ground floor and be ancillary to residential care accommodation or retirement village.

5. The purpose clause in both the specimen lease attached to the purchase contract executed after the tender acceptance, and also the lease which was ultimately transferred to the applicant, varied to some extent from that referred to above. The variation was to permit a child care community use which did not have to be ancillary to the residential care accommodation or retirement village uses. This change gives greater freedom to the lessee in establishing, maintaining and operating a child care centre, so that it could be run on a purely commercial basis without the restraint of an ancillary relationship with the core business of the lessee.

6. The request for tender also requested applicants to submit their initial indicative design concept for the land with their tender. To assist with the preparation of the tender some sample block layouts were provided attached to the invitation. Each of the layouts made provision for some commercial space and a child care centre.

7. As has already been noted the sole witness for the applicant was Mr Andersen. His affidavit and oral evidence traces the history of the development proposal which resulted in the acquisition of the site and subsequent planning for development.

8. His affidavit commences by describing the business of the applicant in the aged care and retirement sector. It was to establish suitable premises and then to operate them. He annexed a great deal of material to his affidavit, commencing with documentation relating to the tender and acquisition of the subject land. There was other material relevant to that process included in the Tribunal documents. Further documents relating to the acquisition were produced by the applicant on subpoena and became part of Exhibit 5.

9. Annexure A to Mr Andersen’s affidavit contains the minutes of a meeting of the board of directors of the applicant at which acquisition of the property by tender was first considered. The minutes note that the developer was interested in responding to the request for tender “developing child care and some commercial (ie a café) in order to activate the precinct”.

10. Annexure B to his affidavit contains minutes of a further directors’ meeting of 8 March 2018. An architect’s drawing of a planned layout was available at the meeting and the sketch is contained in the minutes. At that time the plan was for 90 beds (aged care), 130 ILUs (Independent Living Units), with 1,100m² of commercial space, and 200m² of community facilities. The minutes described the proposal as a multi-story, co-located product with an integrated commercial/community space development. The commercial spaces would likely include a child care centre and where possible, services that would fulfil and enhance community amenity, for example a cafe, hairdresser and convenience store.

11. Following that meeting a tender was prepared. A copy of the tender is available as part of Exhibit 5. This provided for a child care centre for 100 children with an outdoor play area, and a café with an outdoor terrace in an attractive position. Under the heading ‘Proposed Amenity’, the tender said:

    The inclusion of commercial/retail space will allow for services traditionally provided by IRT to residents to be outsourced to external providers. This provision of services will meet the needs of IRT residents but also those of the broader community and provide an amenable customer base for retail tenants. The services may include a café/restaurant, bar, hairdresser, beautician, convenience store etc.

    Such services will foster participation by retirement living residents, care residents, children and also members of the wider Denman Prospect community that might seek a coffee stop following a visit to Ridgeline Park.

    It is also envisaged that the onsite childcare and aged care centres will be linked to foster socialisation between the two cohorts, further promoting intergenerational activities and interaction.

12. The tender included architectural plans of the proposal drawn by AMC Architecture dated 7 March 2018.

13. At paragraph 31 of his affidavit, Mr Andersen says that the applicant intends to proceed with development of the property consistent with the bid drawings to provide 131 ILUs, 90 aged care suites, a child care centre (909m²), café (200m²), and other commercial use (402m²). These other planned uses are for a hairdresser, a beautician and physiotherapist services. In September 2018, Knight Frank provided a town planning assessment, and AMC were retained to provide ongoing architectural advice and planning and to lead the design of the project.

14. The affidavit goes on to set out activity that has been conducted on the site of a preparatory and investigative nature. Although not referred to in the affidavit, development has not proceeded with the expected velocity. At page 22 of the transcript for 29 March 2021 he was asked the following line of questioning relating to delay:

    Mr Andersen, things have proceeded slower than you might have expected.  Is that correct?---That’s correct.

    And why was that?---There’s been a couple of events that’s occurred since we acquired the land, and the first of which the reason that we’re here today, so when we commenced the development, or acquired the land in March ’18, we progressed to a point, a couple of consultants to progress the master planning for the site.  But it became evident, from memory in January ’19, that that was the time that we had the adverse rates decision, when that came to our attention.  That significantly, I should say, surprised us, quite frankly, because it fundamentally changed – when we saw that rates assessment, it fundamentally changed the feasibility and the parameters on which we had assessed the viability of – of the development.

    …

    All right.  With that potential change to feasibility, with respect to the development at Denman Prospect, what did IRT do?---There was two things we did.  Firstly, we objected to the rates assessment and the process of some of the evidence, and the documents outline that to try and have that rates assessment overturned and, secondly, it caused us to slow down and hold off the development because we needed certainty about the treatment that we're going to get because of the impact on the e feasibility.  So we couldn’t continue doing our master plan not knowing what the outcome would be.

    All right.  Were there other consequences since you purchased this site that had an impact on your development on it?---So could I clarify - you're asking if there are any other events?

    Yes?---Since that time, well, I think if you look at - over the - since 2018 when we acquired the land, so the rates impact was number 1.  We've also during that time had a - you know, a Royal Commission that's come out which, you know, we're still - you know, we're committed to this sector as per our constitution but, you know, the Royal Commission into Aged Care happened.  That might - you know, causes a change slightly to the mix of product that we might have on the site, but more materially so also the onset of COVID, which occurred in March last year, about 12 months ago, where we across the board put all our non-live construction developments and development activities on hold to – because we have cash and the future was unknown.

    Okay.  Those things resulted in some consequence for the progress of the development?---Yes.

    All right.  Does it remain the fact that IRT is committed to developing the site for a retirement facility?—Yes, the intention is and it is just a question of timing and that – same with all the developments we have put on hold, that we will pick them up again for the purpose that they were intended, subject to the feasibility and other things stacking up.

15. In addition to the above evidence Mr Andersen later referred to delay caused by the bush fires in eastern Australia and dealing with the consequent threat to some other properties of the applicant.

16. Mr Andersen also deals with intergenerational interaction and its benefits for aged care residents then lists eleven instances of intergenerational activities in aged care facilities operated by the applicant. Due to lack of detail, it is not clear whether they could be described as programs, but they are put forward as enjoyed by the residents and judged to be beneficial. There is no expert analysis of the asserted beneficial nature of the activities.

17. Mr Andersen also annexes a significant number of articles and other written material in support of the applicant’s intention to support intergenerational practice in the property. This material was not the subject of expert comment or explanation. In its raw form the Tribunal understands it to contain evidence supportive of intergenerational interaction both for young and old participants. One of the articles by Alan Hatton-Yeo dates intergenerational practice back to the late 60s and 70s.[1] However, the author writing in 2010, describes an “increasing interest” in it “in recent years”. It is not clear whether persons in independent living accommodation would receive any benefit from the programs.

    [1] Affidavit of Mr Stig Andersen and annexures, at Annexure P, Exhibit 2

18. He then returns to dealing with all the proposed ancillary uses, including the child care centre, saying at paragraph 52 that the services included in the ancillary uses conform with best practice. He refers to two documents found in Exhibit 1 (T-documents).

19. The first is a media release from an aged care provider which has collocated a child care centre with a community medical centre, and an aged care facility in the suburb of Mordialloc in Victoria. The following statement is included in it.

    The concept of integrating child care into aged care has been around for some time, but our development at Mordialloc will be the first time in Australia that aged care, primary care and child care have come together in one place, operated by a single provider,

    ‘TLC Early Learning's first centre will be state-of-the-art and located right next door to a community medical centre: giving peace of mind to our parents. Parents will also be able to join our on-site TLC Health Club, making it easier to fit in a workout or swim knowing their child is being well taken care of.

    Our current program of child care and school visits to our aged care homes benefits everyone by bringing people of all ages together. This new project will make that valuable program an every day part of what we do.

    ….

    Spanning 4 levels, plus basement, on an almost 6,000 sqm site, housing 150 aged care places, 120 child care places, commercial gymnasium, swimming pool, café and Community Medical Centre, this development will be the first of its kind in Australia wholly owned and operated by TLC, resulting in a total investment of almost $60M. [2]

    [2] T-documents, T15 at pages 277-278

20. The material is interesting in giving insight into recent developments in the area. It gives no insight into the status for rating purposes of the property and its use.

21. The second document is a press release by the Brisbane City Council and relates to amendments to the Brisbane City Plan to improve procedures and practices in approvals for development of retirement and residential facilities for aged persons. A general theme of the release is integration of aged care facilities with community activities to provide improved services and social interaction for residents. Ancillary services are referred to as follows.

    Allowing small businesses, services and facilities to share sites and integrate with retirement and residential care facilities Council now allows care co-located uses such as small cafes, shops and community amenities to be included in retirement facility and aged care facility developments as code assessable, to serve the needs of residents and visitors.[3]

    [3] T-documents, T15 at page 282

22. The release went on to indicate that child care centres would be an eligible development under the new scheme. It is an indication of an increasing market demand for provision of onsite facilities and community and intergenerational interaction.

23. This voluminous material in Annexure P is relevant to the Tribunal’s awareness of the benefit of intergenerational interaction. However, it lacks the benefit of interpretation by expert testimony.

24. Mr Andersen’s evidence indicates that the applicant understands that to remain competitive it must follow market trends which indicate that clients and their families seek up-to-date services on site and provision of opportunities for social interaction within the communities in which the facility is located. An expression of this intent can be found in the strategic study which formed part of the applicant’s research in March 2018 and was Annexure O to the affidavit. It was headed Denman Prospect – Demographics, Competition Product Alignment and Demand. The document examines the business case for the purchase and development of the block.

1. It says the following in relation to the proposed commercial facilities.

   A multi-storey, co-located product with an integrated commercial/community space is proposed. The commercial spaces will likely include a child care centre (subject to further feasibility study) and, where possible, services that will fulfil and enhance IRT’s co-located community amenity.

   The vision is for the childcare and aged care centres to be linked to allow integration and socialisation between the two cohorts with evidence to suggest this will improve Quality of Life for those in IRT’s care.

   The inclusion of commercial/retail space will allow for services traditionally provided by IRT, to be provided by external providers. These may include a café/restaurant, bar, hairdresser, beautician, convenience store etc.[4]

   [4] Affidavit of Mr Stig Andersen and annexures, Annexure O at page 445, Exhibit 2

2. Mr Andersen’s evidence was that it was the applicant’s corporate intention to proceed during the two rating periods with the development of the land in the form proposed in its tender document.

Authorities

1. The Tribunal was referred to a number of authorities. Two were particularly helpful in relation to the issue of a charitable organisation undertaking commercial activities in furtherance of their objectives. They were also important in understanding what it is to ‘use’ land.

2. The first of these was Salvation Army (Victoria) Property Trust v Fern Tree Gully Shire Council[5] (Salvation Army). The Salvation Army maintained a residential training farm for troubled boys. Many worked on the farm which sold surplus product such as fruit, vegetables and milk. The income from sale was significant and was used for upkeep of the farm and the accommodation of the boys. Land used exclusively for charitable purposes was not rateable. The Council argued that the sale of surplus product was a commercial activity rendering the land rateable.

   [5] [1952] HCA 4

3. The case was first heard by a Magistrate, who is quoted in the judgment of Justices Dixon, Williams and Webb, who held that the work of the Army was exclusively charitable. The Magistrate said as follows.

   Still, I take the view that the mere selling of the surplus proceeds for the purpose of helping to finance the home does not necessarily mean that this land is being used for purposes other than charitable purposes. I think the whole use to which the land is put is charitable in its nature and the surplus proceeds is merely something which is incidental to the training of the boys.[6]

   [6] Salvation Army at page 167

4. The Judges said the following.

   In the present case, the magistrate found that the sole object of the institution in carrying on the various farming activities on the land was to achieve the charitable purpose of giving the boys committed to its charge an elementary education in these activities… Farming activities necessarily result in the production of various forms of primary products. It would be fantastic to hold that the land would not be rateable if the appellant destroyed or gave away the surplus products resulting from such training that remained after satisfying the needs of the inmates but that it would be rateable if it disposed of such surplus at a profit and used that profit in aid of the revenues of the institution. There is nothing in the evidence to suggest that the appellant is carrying on the farming activities to a greater extent than is reasonably necessary to achieve the above purpose or that under the cloak of this purpose it is really engaged in carrying on the business of a farmer for the purposes of gain.[7]

   [7] Salvation Army at pages 170-171

5. The principles of that case were referred to with approval in a later case, Ryde Municipal Council v Macquarie University[8] (Macquarie University). The majority in the case consisted of Chief Justice Gibbs and Justices Stephen and Murphy. They found that the University was using the land for its statutory purposes of providing appropriate facilities for staff and students. Chief Justice Gibbs said the following:

   The next question is whether the land in question was used for the purposes of the University. According to the Macquarie University Act, 1964 (N.S.W.), s. 6, the functions of the University (as one might expect) include the provision of educational facilities, the dissemination of knowledge and the promotion of scholarship. The purpose of the University was to perform those functions. Ordinarily speaking, one would not say that the purpose of the University was to provide shops or other commercial establishments for the use of staff or students. However, it is now well settled that when an exemption from rates or taxes is given in respect of land used for the purposes of a charity, the exemption is not confined to land used for those purposes the pursuit of which make the body a charity, i.e., which give it its character as such. If the land is used for purposes which are “merely a means to the fulfilment” of the charitable purposes and “incidental thereto” it is within the exemption: Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation [1952] HCA 4; (1952) 85 CLR 159, at pp 169, 171 . In other words, if the use which the charity makes of the land is “wholly ancillary to”, or “directly facilitates”, the carrying out of its charitable objects, that is sufficient to satisfy the requirements that the premises are used for charitable purposes: Glasgow Corporation v. Johnstone (1965) AC, at p 622 ; Oxfam v. Birmingham City Council (1976) AC 126, at p 139 . If, on the other hand, the use is only “collateral” or “additional” to the purposes which give the charity its character as such, the land will not be used for the purposes of the charity: Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR, at p 169.[9]

   …

   If the land in question had been let simply to raise money for the purposes of the University, the decision in Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 would have been directly applicable, and it would not have been possible to say that the land was “used” for the purposes of the University within par. (fii): see also Oxfam v. Birmingham City Council (1976) AC, at pp 140-141. However, it is proper to conclude from the evidence that the University arranged for the building to be erected on the market because the commercial enterprises which it was to contain were regarded as necessary or desirable for the functioning of a university under modern conditions.[10]

   [8] [1978] HCA 58

   [9] Macquarie University at page 643

   [10] Macquarie University at page 644

6. Justice Stephen said the following about use of land:

   Then, as to the words “used by the University” for its purposes, it is a truism that “use” is not a word having any single, precise meaning. It is “a word of wide import and its meaning in any particular case will depend to a great extent upon the context in which it is employed” per Taylor J. in Newcastle City Council v. Royal Newcastle Hospital [1957] HCA 15; (1957) 96 CLR 493, at p 515 . On appeal in that case [1959] UKPCHCA 1; (1959) 100 CLR 1, at p 4; (1959) AC 248, at p 255 Lord Denning, speaking for their Lordships, equated use of land with the deriving by the user of an intended advantage from the land. Thus an owner might use land “by keeping it in its virgin state for his own special purposes”. Here the advantage which the University intends to derive from the market is the furtherance of its purposes by the provision to staff and students of those facilities which the market now affords them. This is just such a use as par. (fii) contemplates. In the Randwick Corporation Case (1959) 102 CLR, at p 88 Windeyer J., speaking of “used” in s. 132 (1) (c), described it as referring “to the actual use to which the land is put by the persons who in law control it for the time being”. There is, I think, no marked conflict between this meaning and the sense in which I have interpreted “used” in par. (fii), as meaning the particular use for which land is made available by its owner.[11]

   [11] Macquarie University at page 651

7. Justice Stephen also agreed that establishing the commercial outlets was an appropriate use by the University in providing appropriate facilities for staff and students. He harked back to the Salvation Army case when he spoke in the following passage of the use by the University of the commercial activities:

   Many facilities on a University campus, from car parks to cafeterias, from cloakrooms to barber shops, can no doubt be conducted in different ways: they may be staffed by University servants; franchises may be given to entrepreneurs who staff those facilities, charging for their use and perhaps paying the University for the franchise; leases of the facilities may be granted to tenants. However it is done, the persons operating the facilities in a sense “use” them; certainly a franchise holder does so, having a licence to enter and use the premises in question so that he may provide the facilities in question to those who are to enjoy them. But these uses of University facilities, whether or not involving leases, are but incidental to and in no way detract from the exclusiveness of the use of the facilities by staff and students. On the contrary, they promote that use and may even be found to be essential to the full exercise of that use. They are not instances of “dual use” of land, as it is sometimes called; if an adjective were to be applied to them “subservient” might be appropriate since these uses, from their purpose and effect, subserve the primary uses to which the land is devoted. To say that a University cafeteria, whether franchised or leased to a catering firm, is any the less used “solely” for the provision of meals to students than it would be were it staffed by servants of the University seems to me to involve a distortion of language and to be no less “fantastic” in result than that which was so described in the passage from the Salvation Army Case [1952] HCA 4; (1952) 85 CLR 159 at p 171 which I have cited above. The facilities here in question include those afforded by banks, travel agents and retail general stores and it is scarcely conceivable that University servants should be employed in providing them. Yet their provision to staff and students may none the less be a proper purpose of a university whose campus is more or less remote from urban commercial development. Such is the situation at Macquarie University.[12]

   [12] Macquarie University at page 653

8. Justice Murphy agreed with Justice Stephen and did not publish a decision.

9. A factor that the cases share is a high degree of integration of the apparently commercial activity with the powers and objects of the principal organisation. In the passage quoted above, Chief Justice Gibbs refers to activities being wholly ancillary to, or directly facilitating the principal purposes of the organisation. In the Salvation Army case, the sale of produce was the end product of the education and treatment of the boys. In Macquarie University, the provision of commercial facilities was an important daily facet of the provision of facilities of an institution staying abreast of the times in executing its objects, in a location “remote from urban commercial development”.

Consideration

1. At this stage it is important to bear in mind that the task of the Tribunal is to review the administrative decisions involved in assessment of rates for two contiguous periods, they being: 8 November 2018 to 30 June 2019; and 1 July 2019 to 30 June 2020. 8 November 2018 was the date the ACT Planning and Land Authority granted a Crown lease over the subject land to the developer, which was transferred to the applicant on 17 December 2018. There is no issue regarding the dates.

2. The assessment is made on the basis of the circumstances existing during each period. The amount and liability to assessment can change from time to time, leading to change in calculation as appropriate. During both periods, the applicant was engaged in planning the development. A number of setbacks occurred which resulted in delay in the planning process with the possibility of reassessment of decisions already made. However, throughout those periods the basic plan that had been developed for the tender process was not varied. It was 90 residential care suites, 130 independent living units, a child care centre, a café, and some service provision.

3. Section 8 of the Rates Act establishes a relatively simple process of determining whether land in the Territory is rateable. All land is rateable unless excepted under the section. Section 8(1)(b)(iii) establishes the exception relied on by the applicant. There are two conditions: the user of the land must be a charitable organisation and the use of the land must be “exclusively for religious, educational, benevolent or charitable purposes”. It uses the word ‘exclusive’ in relation to the use of the land so that all uses must satisfy one of the categories in section 8(1)(b)(iii). It is not sufficient that land is owned or used by a charitable organisation; whatever use is made of the land must conform to the requirements of section 8(1)(b)(iii).

4. Section 8(1)(b)(iii) is reproduced above and the decision under review did not recognise that the applicant was ‘using’ the land for the purposes of section 8 during the planning stage. As Justice Stephen said in Macquarie University:

   ‘use’ is not a word having any single, precise meaning. It is a word of wide import and its meaning in any particular case will depend to a great extent upon the context in which it is employed.[13]

   [13] Macquarie University at page 651

5. The High Court of Australia and Privy Council case of Council of the City of Newcastle v Royal Newcastle Hospital[14] demonstrate the width of the concept, holding that vacant land can be ‘used’ by its owner. There, nearly three hundred acres of land, described as rough bushland, owned by the hospital and adjacent to the hospital was held to be ‘used’ by the hospital for its activities in support of its patients.

   [14] [1957] HCA 15 and Council of the City of Newcastle v Royal Newcastle Hospital [1959] AC 248

6. From the time that it acquired the land, IRT was engaged in developing the land into the state for which it was zoned and acquired: a collocated retirement village and aged care residence. That process commenced with a planning phase. It is the Tribunal’s view that the planning phase involved use of the land in a different physical way, but in a way essential to the later construction of buildings and their use for the purposes for which the land was acquired.

7. It was necessary that all aspects of that use comply to the requirements of section 8(1)(b)(iii). One of the ways in which the planning activities would not comply was if the subject of the planning did not conform to the requirements of section 8(1)(b)(iii). The decision maker took the view that all the ‘commercial’ proposals did not comply.

8. Of the commercial activities, café, beautician, physiotherapist, hairdresser and convenience store are services which are clearly for the benefit of the residents, and according to the evidence, are facilities expected by potential clients of the applicant. To have them available to the public increases the opportunities for interaction with the community for the residents, and increases the likelihood of commercial viability where operated by third-parties. There can be no doubt that all parties would benefit from active, successful enterprises. As in the Macquarie University case, a high degree of integration of provision of facilities with the core objects of the applicant can be seen.

9. On the evidence available, such a connection cannot be seen in the case of the child care proposal. Mr Andersen said that the applicant would not operate that as it does not have the expertise. The residents of the complex would derive no direct benefit from the existence of the child care centre in the way that staff and students were able to use the commercial outlets in Macquarie University. Visitors and staff could derive such a benefit. No evidence was given as to how the centre would be operated. Although benefits of intergenerational integration based on the available evidence could be achieved, how that would be done and the extent of any benefit was not the subject of satisfactory evidence. The lease permitted the child care centre to operate independently of the applicant, and no evidence was given on how intergenerational activity cooperation with a third-party operator would be negotiated and achieved. No satisfactory evidence supported collocation as a benefit to residents, as opposed to visiting programs. The planning that occurred in the rating periods included an activity which was not well identified with and integrated with the core objects of the applicant on the evidence presented to the Tribunal.

10. On the evidence available, the Tribunal is not satisfied that during the relevant rating periods, the applicant was using the land in compliance with section 8(1)(b)(iii) due to its planning activity to incorporate a child care centre into the development. That is the only finding that is necessary to be made to reach the conclusion that the land was not being used exclusively for charitable purposes because of the exclusivity requirements of section 8(1)(b)(iii).

11. The decision under review is confirmed.

    ………………………………..

    Senior Member G Lunney SC

Date(s) of hearing	29 and 30 March 2021
Counsel for the Applicant:	Mr P Walker SC
Solicitors for the Applicant:	Mr G Shaw, Minter Ellison
Counsel for the Respondent:	Mr N Oram
Solicitors for the Respondent:	Ms C Besemeres, ACT Government Solicitor