Lotus Projects Pty Ltd v Commissioner of State Revenue

[2017] VSC 63

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TAXATION LIST

S CI 2016 04743
S CI 2016 04745
S CI 2016 04747

LOTUS PROJECTS PTY LTD (ACN 162 174 521)	Plaintiff
v
COMMISSIONER OF STATE REVENUE	Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 February 2017 and by written submissions of 1 and 3 March 2017 (by the Plaintiff and the Defendant respectively)
DATE OF JUDGMENT:	17 March 2017
CASE MAY BE CITED AS:	Lotus Projects Pty Ltd v Commissioner of State Revenue
MEDIUM NEUTRAL CITATION:	[2017] VSC 63

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LAND TAX – Exemption – Land leased for outdoor sporting, outdoor recreational or similar outdoor activities available for use by members of the public where the proceeds of leasing are applied exclusively for charitable purposes – Land leased for public golf course – Meaning of “Land” for the purposes of exempting provisions – Land Tax Act 2005, s 71 – Commissioner of State Revenue v Famajohn Nominees Pty Ltd (1999) 43 ATR 29 – Applewood Residential Development Pty Ltd v Commissioner of State Revenue (2006) 64 ATR 291 – Capital Club Pty Ltd v Commissioner of State Revenue (2007) 17 VR 357 – Wines v Commissioner of State Revenue [2011] VCAT 310.

WORDS AND PHRASES – Meaning of “Land” under the Land Tax Act 2005.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T. Grace	Maddocks
For the Defendant	Mr C. Horan QC with Mr C. Tran	Solicitor to the Commissioner of State Revenue

HIS HONOUR:

Introduction

1. This appeal arises from a determination by a delegate of the Commissioner of State Revenue (“the Commissioner”) dated 16 September 2016 disallowing the Plaintiff’s objections to reassessments of land tax under the Land Tax Act 2005 (“the Act”) for the 2014, 2015 and 2016 Land Tax years (“the Reassessments”).[1]

   [1]See documents filed pursuant to r 7.06 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (“Documents”), Tab 2.

1. The Plaintiff was assessed to land tax on land comprising a residential development known as Silverwoods Estate in Yarrawonga, Victoria (“the Estate”).  In each of the tax years in question, the land was the subject of a single certificate of title.  Part of that land was leased to another company for use as a golf course and club house.

1. The issue in the appeal is whether the Plaintiff was entitled to an exemption under s 71(1) of the Act in respect of that part of the Estate comprising the golf course and club house the subject of the lease. This turns on the meaning of “[l]and vested in a person or body” in s 71(1). The critical issue in this context is whether “land” refers to all of the land described in the certificate of title on which the Plaintiff was identified as the registered proprietor, or is it capable of referring only to that part of the land which is leased.

1. The Commissioner contends that, on its proper construction, s 71(1) refers to the land that is vested in the Plaintiff as described in the relevant certificate of title on the basis that this construction accords with the natural and ordinary meaning of the language of s 71(1), and is consistent with the context of the Act. The Plaintiff contends that the Commissioner’s construction gives a “contorted meaning” to the word “land” in s 71(1).[2]  The Commissioner rejects this contention; emphasising that the Commissioner’s approach does not require any additional words to be read into the statutory text.[3]  Moreover, the Commissioner says that the construction adopted is not simply for reasons of administrative convenience,[4] but because it accords with the text, context and purpose of the Act.

   [2]Plaintiff’s Submissions (23 December 2016) [7].

   [3]Cf Plaintiff’s Submissions (23 December 2016) [8]–[10].

   [4]Cf Plaintiff’s Submissions (23 December 2016) [7].

Factual background

1. The Plaintiff carries on a business of conducting urban residential development projects, one of which is the Estate.[5]  Part of the Estate land (“the Leased Land”) was leased by the Plaintiff to Black Bull Golf Club Pty Ltd (“Black Bull”) pursuant to a lease entered into on 23 December 2013 (“the Lease”).[6]  The Leased Land was set aside for a golf course and club house, with a total area of 74.95 ha.  The nature and extent of the Leased Land is addressed in further detail in the Plaintiff’s Submissions,[7] but there is no factual issue of relevance in contention in this respect.[8]

   [5]Appendix 1 to the letter dated 10 May 2016 [1.2] (“the Objection”); Affidavit of Daniel Michael Smith affirmed on 15 March 2016 (“the Smith Affidavit”), [3].

   [6]Objection, [1.4]; Smith Affidavit, [5]; Documents, Tab 8.

   [7]Plaintiff’s Submissions (23 December 2016) [3], [14]–[22].

   [8]Plaintiff’s Submissions (23 December 2016) [23].

1. The Leased Land formed part of the land described in the following titles at each of the relevant dates for the Land Tax years in question:[9]

(a)As at 31 December 2013, the Leased Land was part of the land described in Certificate of Title Vol 11154 Fol 135 and identified as Lot S10 on Plan of Subdivision 547281N (parent title Vol 11112 Fol 623), with a total area of 129.3 ha.

(b)As at 31 December 2014, the Leased Land was part of the land described in Certificate of Title Vol 11499 Fol 216 and identified as Lot S11 on Plan of Subdivision 547281N (parent title Vol 11154 Fol 135), with a total area of 124.59 ha.

(c)As at 31 December 2015, the Leased Land was part of the land described in Certificate of Title Vol 11577 Fol 380 and identified as Lot S18 on Plan of Subdivision 547281N (parent titles: Vol 11499 Fol 216 and Vol 11499 Fol 217), with a total area of 121.257 ha.

[9]The folio reference and total area of land was different in each tax year as parts of the Estate were progressively subdivided and removed from the title containing the Leased Land: see Objection, [1.5]; Smith Affidavit, [6].

1. As at 31 December 2013 and 31 December 2014 respectively, a 13–hole golf course had been constructed on the Leased Land, and 5 further holes were under construction.[10]  As at 31 December 2015, construction of an 18–hole golf course had been completed.  In each year, the golf course (in so far as it had been constructed) was open to members of the public on payment of an appropriate green fee.[11]  The balance of the land comprised within each certificate of title was set aside for the purposes of residential development.  It is uncontroversial that, pursuant to clause 3.2 of the Lease, the Plaintiff has donated the rent payable under the Lease to the St Vincent de Paul Society in Victoria.[12]

   [10]Objection, [1.11]; Smith Affidavit, [11].

   [11]Objection, [1.12], [1.13]; Smith Affidavit, [12]–[13].

   [12]Objection, [1.15], [1.16]; Smith Affidavit, [14]; and see Plaintiff’s Submissions (23 December 2016) [23].

Assessments and objections

1. The Plaintiff was assessed to land tax in 2014, 2015 and 2016.  Following reassessments, the Plaintiff was liable to pay $248,259.46 in 2014, $281,795.88 in 2015 and $270,106.81 in 2016.[13]

   [13]Documents, Tabs 4, 5, 6.

1. Following ongoing correspondence between the Plaintiff and the Commissioner from March 2014,[14] the detail of which is not necessary to rehearse for present purposes, the Plaintiff lodged its Objection by letter dated 10 May 2016.  The Objection stated, in part, as follows:

   [14]Plaintiff’s Submissions (23 December 2016) [24]–[34].

3.3 Lotus Projects objects to the Land Tax Assessments on the basis that the Commissioner should have determined that the Leased Land was exempt land pursuant to section 71 of the Act for the 2014, 2015 and 2016 land tax years.

We say this because:

3.3.1 The Leased Land, being the physical area of land identified in the Lease as the Leased Land is, and at all relevant times has been, leased to Black Bull for outdoor recreational activities, namely for the playing of golf by members of the public. In this regard, we note the following:

(a)the Leased Land contains an operational golf course as depicted in the Lease and the copy of the master plan in Annexure A;

(b)item 9 of the Schedule to the Lease provides that the ‘permitted use’ of the Leased Land is for ‘outdoor sporting purposes and operation of club house and pro shop and Black Bull has, for the 2014 to 2016 land tax years, used the Leased Land for that purpose;

(c)the Leased Land has, for all relevant land tax years, been used as a golf course with:

(i)13 operational holes and 5 holes under construction in the 2014 and 2015 land tax year[s];

(ii)18 operational holes in the 2016 land tax year;

(iii)thousands of rounds of golf being played by members of the public in each of the 2014 to 2016 land tax years as detailed in paragraph 1.1.2 above;

(iv)the golf course Leased Land has been made available to members of the public for the 2014 to 2016 land tax years to play golf; and

(d)the Leased Land is, and was at all material times, ‘land’, in fact and in law.  That land was identifiable by reference to the Lease.

3.3.2 the proceeds of the leasing, namely the rent, under the Lease have all been donated by Lotus Projects to the St Vincent de Paul Society. This is evidenced by:

(a)the obligation on Lotus Projects to do so in clause 3.2 of the Lease; and

(b)the documentation between Lotus Projects and St Vincent de Paul Society enclosed …

1. The Objection continued:[15]

As detailed above, the Leased Land is, and was at all material times, ‘land’, in fact and in law. That land was identifiable by reference to the Lease. In this regard, we submit that ‘land’ for the purposes of the Act means identifiable land either by its physical use or otherwise identified through, for example, a lease.

We submit that if identifiable land, as identified by its use and in the Lease in this case, meets the requirements for it to be exempt under section 71 of the Act, the Commissioner must treat the identifiable land as exempt land.

If the identifiable land is contained within a certificate of title then it is necessary, in accordance with section 22 and 46 of the Act, for the land tax value for that certificate of title to be apportioned between the identifiable land and the remainder of the certificate of title.

[15]Paragraphs 3.5–3.7.

1. The principal submission by the Plaintiff—which reflects the position put in the Objection[16]—is that “land” as referred to in s 71 of the Act is the physical area of land that is the subject of the Lease and the definition of “Land” in s 3(1) of the Act to include “all interests in land” indicates that “land” for the purposes of the Act is not confined to that land contained in a certificate of title.

   [16]Paragraph 3.12.

1. By letter dated 16 September 2016, the Commissioner disallowed the Objection (“the Notice of Determination”)—after exercising his discretion to permit the Objection to be lodged out of time.

1. In the Notice of Determination, the Commissioner states that “the background circumstances are not in dispute”.  More particularly, the Commissioner’s Notice of Determination states:[17]

   [17]Pages 2 and 3.

Part of the land comprising the Silverwoods Estate (the Leased Land) is leased by the Company to Black Bull Golf Pty Ltd … (Black Bull), pursuant to a lease entered into on 23 December 2013 (Lease).  The Leased Land comprises those areas identified on the master plan as a golf course and clubhouse facility, with a total area of 74.95 ha.

The Leased Land comprises part of a single folio/certificate of title, although the reference and total area of the title of which the Leased Land forms part has changed from time to time as parts of the Silverwoods Estate were subdivided and removed from the title containing the Leased Land …

The Leased Land comprises an 18–hole golf course and a club house / pro shop facility.  Pursuant to the terms of the Lease, the permitted use of the Leased Land is for outdoor sporting purposes and operation of a club house and pro shop.  On the relevant dates for assessing land tax:

●as at 31 December 2013 — 13 holes were constructed and operational (comprising an area of 56.02 ha) and 5 further holes were under construction (comprising an area of 18.93 ha);

●as at 31 December 2014 — 13 holes were constructed and operational (comprising an area of 56.02 ha) and 5 further holes were under construction (comprising an area of 18.93 ha); and

●as at 31 December 2015 — 18 holes were constructed and operational from 30 May 2015 onwards, so that the entire Leased Area of 74.95 ha was operational.

The number of rounds played on the golf course in each of the years in question is set out below:

●year ended 31 December 2013 — 7,265 rounds of golf;

●year ended 31 December 2014 — 10,022 rounds of golf;

●year ended 31 December 2015 — 12,645 rounds of golf.

Black Bull makes the golf course open to the public on payment of an appropriate green fee.

Clause 3.2 of the Lease requires the Company to donate all the rent payable under the Lease to a charitable organisation that operates within the Shire of Yarrawonga, or where no such organisation exists, the St Vincent de Paul Society in the State of Victoria (St Vincent de Paul).

[emphasis omitted]

1. Continuing, the Notice of Determination stated:[18]

… the Commissioner has determined that “land” in s 71 of the LTA refers to land which is described in a certificate of title, as opposed to any land which is identifiable “either by its physical use or otherwise identified through, for example, a lease”.

The ordinary meaning of the word “land” refers to a “portion of the Earth’s surface”. However, there remains a question of how to identify the relevant area or “portion of the earth’s surface” for the purposes of applying s 71 and other provisions of the LTA.

While the inclusive definition of “land” in s 3(1) of the LTA prima facie extends the meaning of the term “land” to include any interests in land, the definition must nevertheless be understood in the context of the substantive provisions of the LTA …

The purpose of the LTA is to impose tax on the owners of land.  Against the background of the Torrens title system, it is consistent with this legislative purpose to look to the certificates of title by which ownership is conferred, and the land described or identified in those certificates.

[18]Page 6 (citations omitted).

1. The Plaintiff also addresses in some detail the principles and authorities with respect to the drafting of leases, with particular reference to the description of the subject matter of a lease—both in the context of its Objections and also the matters raised in these proceedings.[19] These matters are not, however, in contention in these proceedings as the Commissioner’s position is not that there is any deficiency in the drafting of the Lease in this respect but, rather, that the land so described and demised is not “land” for the purposes of s 71 of the Act. Moreover, there is no issue with respect to leases demising parts of Torrens system land. As the Plaintiff submits:[20]

50.It is understood that the Commissioner does not question that it is legally possible for an owner of (Torrens title) land to demise part of the land represented by a given certificate of title by way of lease (a position confirmed by the judgment of Barwick CJ, Menzies and McTiernan JJ in Claude Neon).  For completeness, reference is made to the commentary in Victorian Conveyancing Law Commentary,[21] at 25–830:

Lease of part of land

In some other States, if it is desired to lease part of land described in a Certificate of Title or part of an old system parcel it is first necessary to register a subdivision of the land.

It is submitted that this is not the case in Victoria.  The various legislative provisions relating to subdivision, unlike the situation in some other jurisdictions, do not apparently apply to leases.  Nor is the matter complicated, as in other States, by any requirement of registration of Torrens leases exceeding three years …  It is submitted that providing the subject of the lease is expressed with certainty there is no peculiar problem in demising part of land or premises.

[19]Plaintiff’s Submissions (23 December 2016) [42]–[51]; and see, below, [27].

[20]Plaintiff’s Submissions (23 December 2016) [50].

[21]Peter R Best, CCH Victorian Conveyancing Law Commentary (at 31 October 2013) 25–830.

Legislative provisions

1. The Act imposes an annual tax on all “taxable land” in Victoria of which a person was the owner at midnight on 31 December of the year immediately preceding the year of assessment. An “owner” relevantly includes “a person entitled to land for a freehold estate in possession” (s 10(1)(a)). “Taxable land” is defined in s 3(1) to mean “land that is not exempt land”, being “land that is declared by or under [the Act] to be exempt land”.

1. The Plaintiff objected to the Assessments on the basis that the Leased Land was exempt land under s 71(1) of the Act, which provides as follows:

(1)Land vested in a person or body is exempt land if the Commissioner determines that—

(a)it is leased for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities and is available for use for one or more of those activities by members of the public; and

(b)the proceeds from the leasing are applied exclusively by the person or body for charitable purposes.

Construction of section 71(1) of the Land Tax Act

General approach

1. The principal issue in this proceeding is the meaning of the word “land” as used in s 71(1) of the Act, in the context of the words “[l]and vested in a person or body”; words which the Commissioner contends define or describe the subject of the exemption provided for in the section.

1. It is common ground that “the task of statutory construction must begin with a consideration of the text itself”, and that “[t]he language which has actually been employed in the text of legislation is the surest guide to legislative intention”.[22]  Nevertheless, the meaning of the statutory text may require consideration of the context, including the general purpose and policy of a provision.[23]  Moreover, the High Court has recently restated the position that, “as with the meaning of any word, the meaning of “land” depends on the context and purpose of the legislation in which it appears.”[24]

   [22]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 46–47 [47].

   [23]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 46–47 [47].

   [24]Coverdale v West Coast Council (2016) 90 ALJR 562 at 566 [18].

1. The relatively recent series of High Court authorities concerning the rules of statutory construction, confirming the primacy of the text, are now well known.[25]  Nonetheless, legislative purpose is also significant and may, depending on the nature, language and clarity of the provisions considered, carry more or less weight.  Thus, in the recent decision of Colonial Range Pty Ltd v Ces–Queen (Vic) Pty Ltd,[26] the Court of Appeal said “[w]here the ordinary meaning of the text is consistent with the legislative purpose, the court will apply that as the legal meaning.”[27]

   [25]Refer, for a recent example, to the useful summary by the Court of Appeal of these rules in Colonial Range Pty Ltd v Ces–Queen (Vic) Pty Ltd [2016] VSCA 328, [47]–[51] (“Colonial Range”).

   [26][2016] VSCA 328.

   [27][2016] VSCA 328, [50].

1. More particularly, the Court of Appeal in Colonial Range continued:[28]

54Recent statements of the High Court have emphasised the primacy of the text in the resolution of any perceived tension between the text and the legislative purpose of the Act.[29]  Such statements include the following:

(a)“The words of the statute, not non–statutory words seeking to explain them, have paramount significance”.[30]

(b)“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text itself … The language which has actually been employed in the text of legislation is the surest guide to legislative intention”.[31]

(c)“A second and not unrelated danger that must be avoided in identifying a statute’s purpose is the making of some a priori assumption about its purpose.  The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions”.[32]

[28][2016] VSCA 328, [54].

[29]See examples cited in Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269, [56]–[62] and the discussion in Di Paolo v Salta Constructions Pty Ltd [2015] VSCA 230, [32]–[48] and Lowe v R [2015] VSCA 327, [12]–[18].

[30]Nominal Defendant v GLG Australia Pty Ltd (2006) 228 CLR 529 at 538 [22].

[31]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46–7 [47].

[32]Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 at 390 [26].

1. Quite clearly, caution must be exercised in interpreting statutory provisions as though they contained additional words.  Thus, the Court of Appeal in Colonial Range continued:[33]

55.In the High Court decision in Taylor v Owners—Strata Plan No 11564[34] the majority stated that, in considering whether a provision could be interpreted as if it contained additional words, “the task remains the construction of the words the legislature has enacted. … any modified meaning must be consistent with the language in fact used by the legislature”.[35]  The majority said that whether such a construction is justified involves a judgment of matters of degree and explained:[36]

That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision.  It is answered against a construction that fills “gaps disclosed in legislation” or makes an insertion which is “too big, or too much at variance with the language in fact used by the legislature”.

[citations omitted]

[33][2016] VSCA 328, [55].

[34](2014) 253 CLR 531.

[35]Taylor v Owners—Strata Plan No 11564 (2014) 253 CLR 531 at 549, [39].

[36]Taylor v Owners—Strata Plan No 11564 (2014) 253 CLR 531 at 548, [38].

1. I also emphasised these points in Clarke (as trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (receivers and managers appointed),[37] where I said that “[t]he requirement to identify the legislative intention disclosed by the meaning of the statutory language directs attention to the legislative text”.[38]

   [37][2014] VSC 334.

   [38]Clarke (as trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (receivers and managers appointed) [2014] VSC 334, [466].

1. In support of the objection, the Plaintiff submitted that “land” for the purposes of the Act means any “identifiable land either by its physical use or otherwise identified through, for example, a lease”.[39] However, as is discussed in further detail in the reasons which follow, what is—in a sense—an ambulatory meaning would be incompatible with many provisions of the Act which are premised on the possibility that it may be necessary to identify a “part of land”, and would effectively render redundant the statutory concept of an identifiable part of land for the purposes of the Act. On the Plaintiff’s approach, any identifiable part of land would itself be “land” capable of being separately or discretely assessed as “taxable land” or treated as “exempt land”. The Commissioner contends that such an approach is clearly untenable as a general proposition having regard to the provisions of the Act, particularly those express “part of land” provisions.

   [39]Objection, [3.5].

1. The Plaintiff also seeks to bolster its argument by reframing the construction for which the Commissioner contends in an attempt to suggest that it contorts the statutory text or requires the insertion of additional words.[40] In my view, this both inaccurately states and over-complicates the Commissioner’s position, which is based simply on the ascertainment of the proper meaning of “[l]and vested in a person or body”, and the identification of the land which is so vested. The Commissioner’s construction does not require any additional words to be read into s 71(1), let alone the elaborate and lengthy addendum suggested by the Plaintiff.[41]

   [40]Plaintiff’s Submissions (23 December 2016) [6]–[12].

   [41]Cf Plaintiff’s Submissions (23 December 2016) [8]; and the submissions which follow, at [9]–[12]: cf Commissioner of State Revenue v Australian Football League (2006) 14 VR 35 at 40 [16].

1. In my view, the Commissioner is correct in contending that the construction advanced by the Plaintiff is circular and confuses or conflates the substantive requirement imposed in s 71(1)(a)—that the “[l]and vested in a person or body” be leased for specified activities—with the subject of the exemption itself. Moreover, as a matter of language it is clear that the subject of s 71(1) is the “[l]and vested in a person or body”, as opposed to “land leased” to a person or body. The word “leased” does not appear until the body of s 71(1)(a), when it is used as part of the requirements that must be satisfied in order for the subject land to be exempt.

1. The Plaintiff’s submissions address at some length uncontroversial propositions that a lease must specify the area over which a lessee is given exclusive possession for a finite period, and that such an area need not encompass the entirety of the land identified in a certificate of title.[42]  As the Commissioner submits, so much may be taken as common ground in this proceeding, and the Commissioner has never suggested the contrary.  These propositions do not, however, advance or resolve the questions of statutory construction which lie at the heart of this proceeding as there is no suggestion that the Lease does not satisfy the requirements for characterization as such as a matter of law.

   [42]Plaintiff’s Submissions (23 December 2016) [42]–[51]; and see, above, [15]; generally, see also Bradbrook, Croft and Hay, Commercial Tenancy Law (3^rd ed, LexisNexis Butterworths, 2009) 19–24 [1.5].

Text of s 71(1)

1. It may be accepted that the ordinary meaning of “land”, as Griffith CJ stated in Isles v Federal Commissioner of Land Tax, is a “portion of the earth’s surface”.[43] Nevertheless, Griffith CJ was not addressing the manner in which a relevant portion of the earth’s surface is to be identified for the purposes of applying a statutory provision such as s 71(1) of the Act, and his observations do not answer the question posed for this Court’s determination in the present case: what is the “[l]and vested in a person or body” for the purposes of s 71(1)? In other words, the relevant question here concerns the delimitation or identification of the relevant area of land or “portion of the earth’s surface”—is the area of land comprised in the certificate of title or is it the area of land the subject of the lease?

   [43](1912) 14 CLR 372 at 376; Clifford v Deputy Federal Commissioner of Land Tax (NSW) (1915) 19 CLR 593 at 619; and see Re Lehrer and the Real Property Act (1961) 61 SR (NSW) 365 at 369; and Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11, [55] and see also [61].

1. Insofar as the ordinary meaning of the word “land” as described by Griffith CJ distinguishes between physical land and the legal or equitable concepts inherent in the doctrine of estates that denote estates and interests in such land, this must be read in the light of the statutory definition of “land” in s 3(1) of the Act, which includes “all land and tenements” and “all interests in land”.[44] This statutory definition is cast in “wide and general terms”,[45] and potentially encompasses “freehold and leasehold, corporeal and incorporeal interests of every description”.[46] The definition of “land” in s 3(1) of the Act prima facie expands the kinds of interests in land which may attract a liability to land tax so as to include any tenements (being “everything in which a man can have an estate of freehold and which is connected with land”[47]) and any other “interests in land”. In that sense, “land” for the purposes of the Act does not simply mean “a portion of the earth’s surface”.[48]

   [44]This specific definition of “land” would displace the operation of the definition of “land” in s 38 of the Interpretation of Legislation Act 1984 for the purposes of the Land Tax Act 2005.

   [45]Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199 at 215.

   [46]Re Lehrer and the Real Property Act (1961) 61 SR (NSW) 365 at 370.

   [47]Re Lehrer and the Real Property Act (1961) 61 SR (NSW) 365 at 370; Commissioner of State Revenue v Oz Minerals Ltd (2013) 304 ALR 602 at 623 [116].

   [48]Cf Plaintiff’s Submissions (23 December 2016) [12].

1. Nevertheless, liability to land tax is imposed (subject to express statutory exceptions) on the “owner” of land within the meaning of s 10 of the Act, which relevantly includes “a person entitled to land for a freehold estate in possession”.[49]  The reference to the freehold estate naturally directs attention to the land described in a certificate of title, by which a person now obtains legal ownership of land in fee simple as the registered proprietor,[50] or to the land described in a conveyance of general law land in fee simple.  There is no suggestion by the Commissioner, as the Plaintiff implies in its submissions, that a “freehold estate in possession” has origins other than the feudal land law—and certainly not that it is a concept deriving from the Transfer of Land Act 1958.[51]  The Act does not generally impose land tax on a lessee of land (other than a person entitled to land under a lease of Crown land).[52]  As the delegate of the Commissioner stated in the notice of determination:

Thus, accepting that the leasehold interest of Black Bull in the Leased Land could fall within the definition of “land” in s 3(1), that interest is not the relevant “land” of which [the Plaintiff] is the owner and which attracts the liability to land tax. It is the land described in the relevant certificate of title, including the Leased Land, which remains vested in [the Plaintiff].

[49]Thus, the inclusive definition of “land” must be understood in the context of the specific substantive provisions in which that term is used: see Kelly v The Queen (2004) 218 CLR 216 at 253. A provision cannot always be understood to operate on the full width of the potential meaning of “land” as set out in an inclusive statutory definition: Re Lehrer (1961) 61 SR (NSW) 365 at 371.

[50]See Breskvar v Wall (1971) 126 CLR 376 at 385; Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149 at 159 [20].

[51]See Plaintiff’s Reply Submissions (17 February 2017) [9] and the footnote (6) references as to the nature and origins of the freehold estate in possession, as follows:

See Megarry’s Manual of the Law of Real Property, 2–002; see also the discussion by Bleby J in Perpetual Trustee Co v Valuer–General (2008) 101 SASR 110, [53]–[56]; and observations of Croft J in Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184, [61]–[64], including the citation of Debelle J’s statements in the Trust Company (No 2) Case, relating to the feudal origins of the concept of “possession”, and estates in possession in the common law – as explained by Pollock and Wright in their work, An Essay on Possession in the Common Law.  See also the discussion by Griffith CJ in Glen v Federal Commissioner of Taxation (1915) 20 CLR 490, 496, 498.

[52]See s 10(1)(b) of the Act. Cf s 45 (by which, in respect of certain pre–1978 leases of private land, both the lessee and the owner of the freehold estate are to be assessed for land tax on the land)—this provision, which is of limited and historical application, implies an identity between the land the subject of the lease and the land the subject of the freehold estate.

1. Significantly, the term “land” is used in s 71(1) of the Act as part of a composite expression “[l]and vested in a person or body”. While the meaning of the word “vested” varies with the context, it is generally construed as meaning legal ownership of an estate in fee simple, such that land is “vested” in its registered proprietor notwithstanding that the land is subject to a lease.[53] Again, this naturally directs attention to the land described in the certificate of title. It is, in my view, of no significance that the Act does not contain any express reference to “Torrens title”.[54]  The identification of the land which is “vested” in an owner is capable of application in the context of the system of land registration established by the Transfer of Land Act 1958.[55] This approach to the meaning of the word “land” as used in s 71(1) of the Act does not involve reading any additional words into this sub–section but, rather, gives meaning to the words “[l]and vested in a person or body”. Nor does it involve any “qualification” or limit on the operation of s 71(1),[56] and to suggest otherwise does beg the central question of construction.

   [53]Sydney Harbour Trust Commissioners v Harriott (1923) 32 CLR 53 at 59, 61, 64, 67.

   [54]Cf Plaintiff’s Submissions (23 December 2016) [12].

   [55]Cf Land Tax Act, ss 96 and 97, which deal with registration of a charge in respect of unpaid land tax.

   [56]Cf Plaintiff’s Submissions (23 December 2016) [59]–[61].

1. The Plaintiff, on the other hand, contends that s 71(1) should be construed as if its reference to “[l]and vested in a person or body” were instead a reference to “land leased to a person or body”; primarily on the basis that s 71(1)(a) goes on to refer to the land being “leased for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities”. The difficulty with this approach is that s 71(1)(a) does not do the work which the Plaintiff would have it do. In particular, s 71(1)(a) does not identify the land which is the subject of the exemption (which has already been identified in the chapeau to s 71(1) as the “[l]and vested in a person or body”), but rather describes the requirements which must be met in order for that land to obtain an exemption. Section 71(1)(a) begins with the word “it”, which is clearly a reference back to the “[l]and vested in a person or body” that is first–mentioned in s 71(1), and then imposes substantive requirements for exemption that such land must be: (i) leased for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities; and (ii) available for use for one or more of those activities by members of the public. The pronoun “it” refers to “[l]and vested in a person or body” not “land that is leased”.

1. On the Plaintiff’s approach to s 71(1)(a), it would be necessary to treat the exemption in s 71(1) as capable of application not just to the particular area of land that is leased for the specified activities, but even to the particular part of the leased land that is in fact available for use for such activities by members of the public.[57]  This would be a strained and awkward reading of the statutory text, which would treat the substantive requirements of the exemption as operating to “self–identify” the boundaries of the exempt land.

   [57]That is, on the plaintiff’s approach, why would the relevant question to identify the subject land under s 71(1) stop at “What land was leased under the Lease?” (Plaintiff’s Submissions (23 December 2016) [55]).  Why wouldn’t the question be, “What land was leased under the Lease for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities and was available for use for one or more of those activities by members of the public?”.

1. In summary, for the preceding reasons, I accept the position put by the Commissioner that neither the ordinary meaning of “land”, nor the extended meaning in s 3(1) of the Act are of direct assistance in this proceeding. The text and grammatical structure of s 71(1) strongly support the Commissioner’s construction that the exemption is applicable to the “land vested” in the Plaintiff, as opposed to the part of that land the subject of the Lease, which is leased to Black Bull. On the other hand, the Plaintiff’s position, though purporting to apply the principles of statutory construction that give primacy to the text and its surrounding context, essentially ignores or gives no operation to the word “vested” in s 71(1), and fails to address the broader context of the Act in which Parliament has given an express indication whenever it intends to refer to a “part of land” for the purposes of the imposition and assessment of land tax. As indicated previously, I am of the opinion that the broader context of the Act further supports the position advanced by the Commissioner. It is to this broader context that I now turn.

Broader context of the Land Tax Act

1. It is a fundamental rule of construction that the words of a statute must be read in their context.[58] The Plaintiff’s submission that “it is not strictly necessary to search for the ‘true meaning’ [of s 71(1)] from the surrounding provisions, or from the purpose of the exemption, or from any extrinsic materials” is incorrect as a matter of principle and, consequently, a submission which I reject.[59] The context of the Act is, on the other hand, consistent with the construction of s 71(1) contended for by the Commissioner.

Words to be given a consistent meaning

[58]Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1 at 28 [57] referring to Mason J in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315.

[59]Plaintiff’s Submissions (23 December 2016) [70]. As submitted above, statutory context should be considered in the first instance, and not only where an ambiguity is identified; see e.g. K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 cited with approval in Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1 at 28 [57].

1. Although it is capable of rebuttal (particularly in taxing legislation), there is a general principle of construction that words in a statute are presumed to be used consistently and with the same meaning.[60]

   [60]Tabcorp Holdings Ltd v Victoria (2016) 90 ALJR 376 at 387, [65]; Lygon Nominees Pty Ltd v Commissioner of State Revenue (2007) 23 VR 474 at 482 [31].

1. In the context of the Act, there are numerous examples of the use of the term “land” in contexts which are consistent with the Commissioner’s construction, and inconsistent with a construction that “land” can mean any identifiable part of the land described in a certificate of title (for example, the land identified in a lease).

(a)There are many provisions in the Act which refer to a “part of land” or an equivalent expression.[61] Such provisions would arguably be otiose if the meaning of “land” was sufficiently ambulatory to encompass any discrete identifiable portion of the earth’s surface. The provisions are premised on there being a distinction between “land” (or “the whole land”) and a “part” of land, so that “land” cannot be treated as itself meaning any discrete or identifiable part thereof. The provisions also suggest that, in those cases where Parliament intended that the use of a “part” of land for a particular purpose was sufficient to attract an exemption, it made express provision to that effect. The exemption contained in s 71 does not do so.

(b)There are also several provisions of the Act that use the concept of a “parcel” of land—which is defined to mean any land owned by the same person that is contiguous or separated only by a road, railway or other similar area across or around which movement is reasonably possible.[62]  The concept of a “parcel” of land is consistent with the relevant components of that parcel being the land described in two or more certificates of title.  If “land” was capable of meaning any discrete identifiable piece of land, the scope of the term “parcel of land” would become uncertain and potentially problematic as it could encompass any contiguous parts of land, even within a single certificate of title.

(c)The provisions of the Act which provide for partial exemptions in respect of a principal place of residence (see ss 62 and 62A) would be otiose if “land” could mean something other than the land described in a certificate of title. Similarly, in providing an ancillary exemption for land which is contiguous to and enhances principal place of residence land, s 54(3) does not suggest any differential treatment for land tax purposes of different parts of that contiguous land.[63]

(d)In relation to “home units”, the special definition of “land” in s 12(3) of the Act would probably be otiose if “land” could encompass any discrete identifiable piece of land. If that were the case, it would be open to treat the “land” in question as the land on which the home unit is situated without the need for any special definition, because that land would be readily “identifiable” as a discrete physical area.

(e)Sections 96 and 97 of the Act provide for the registration of a charge in respect of unpaid land tax on the land on which the tax is payable. The charge is recorded on the certificate in the Register (s 97(2)). This further supports a construction of “land” as referring to the land which is described in a certificate of title.

(f)Both s 22 (taxable value of parts of land not separately valued) and s 46 (land tax on parts of land) draw a distinction between a “part of land” and “the whole land”. The latter can only mean the land described in a certificate of title. The distinction is difficult to reconcile with a construction of “land” which is capable of encompassing any identifiable piece or part of land.[64]

[61]See ss 22, 34(2), 46, 62, 62A, 65(2), 73, 74(2), 75(5), 76(3), 76A(3), 77(3), 78(2), 78A(7), 80(2), 81(2), 83(2), 84(2) of the Act. There are also references to a “part of a parcel of land”; see ss 37(4) and 70.

[62]See ss 3(1), 37(4), 66, 67, 70 of the Act. It may be noted that the predecessor provision in s 3(1) defined “parcel” to mean “lands” which are contiguous (rather than “any land” that is contiguous).

[63]See Wines [2011] VCAT 310, [17].

[64]The use of the expression “the whole land” in ss 22 and 46 should not be taken to suggest that the word “land”, when used on its own in other provisions, does not refer to the land described in a certificate of title. Rather, the reference to “the whole land” in ss 22 and 46 is used in contradistinction to the phrase “part of land”, and is necessary to prescribe the integers in the formula by which the apportionment of taxable value and land tax is calculated.

1. The word “leased” also appears in several provisions of the Act, none of which use the word to qualify the meaning of “land” or to inform the manner in which land is to be identified. To the contrary, each of these provisions uses language that refers to “land or part” of land being leased. A reference to a “part” of land being leased is absent from s 71(1).

Apportionment machinery

1. Section 46 of the Act makes provision for the assessment of land tax on a part of land, namely by reference to the proportionate taxable value of the part relative to the whole land. Section 22 of the Act deals with the situation in which it is necessary to determine the taxable value of part of land where that part has not been separately valued. Both provisions only apply if “it is necessary” to assess land tax on a part of land or to determine the taxable value of part of land. The Commissioner submits that having regard to the provisions of the Act as a whole, it is plain that “it is necessary” to do so only when the Act makes express provision to that effect. For example, the Commissioner submits, the Act contains numerous provisions which expressly provide that land tax is assessable on a part of land, and that s 22 is to apply if necessary for that purpose.[65] Thus, the Commissioner says that there is no occasion to resort to s 22 or s 46 unless there is express provision for the assessment of land tax on a part of land; referring to Dixon J in R v Wallis,[66] where his Honour said: “an enactment in affirmative words appointing a course to be followed usually may be understood as importing a negative, namely, that the same matter is not to be done according to some other course”. Whilst I accept these submissions in general terms, I do not regard these provisions as impinging on the proper construction of s 71(1). Rather, the position is, in my view, that, were I to accept the Plaintiff’s construction of s 71(1), it would follow that the application of these provisions would become “necessary”.

   [65]See ss 62A(b), 74(2)(b), 75(5)(b), 76(3)(b), 78(2)(b), 78A(7)(b).

   [66]R v Wallis; Ex parte Employers Association of Wool Selling Brokers (1949) 78 CLR 529 at 550; see also Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219 at 236 [43]; Anthony Hordern and Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1.

1. For these reasons, I reject the Commissioner’s submission that there is no statutory mechanism for carrying out the apportionment that would need to take place if the Plaintiff’s construction were to be adopted. It follows that I also reject the Commissioner’s conclusionary submission in this respect that this is a telling indication that all of the land which is vested in the person or body must be leased in order to attract the exemption in s 71(1) of the Act.

Purpose

1. The Commissioner contends that the evident purpose of the Act is to impose tax on the “owners” of land: see ss 10 and 36(1). Against the background of the Torrens title system, it is said to be consistent with that purpose to focus on the land described or identified in the certificates of title by which ownership is conferred. To the extent that one can discern a specific purpose for the exemption in s 71,[67] it is to encourage owners to make their land available for use by members of the public for outdoor sporting, recreational or cultural activities, other than for profit or gain by the owner of the land.[68] The parties are of the same mind with respect to the purpose, generally stated in this way—the difference lies in relation to which construction of s 71(1) would effectively, or more effectively, give effect to this purpose.

   [67]Cf s 72, which covers land owned by non–profit organisations which is used primarily or substantially for sporting activities or outdoor recreational, outdoor cultural or similar outdoor activities. It may be noted that, unlike s 71(1), the exemption under s 72 extends to both indoor and outdoor sporting activities.

   [68]However, the exemption in s 71(1) does not necessarily preclude the lessee from making a profit from the activities conducted on the land.

1. Contrary to the Plaintiff’s submissions, the Commissioner says that the purpose of s 71(1) as indicated does not render the Commissioner’s construction senseless.[69] It is, of course, as the Commissioner contends, open to the legislature to advance the purposes of the section by encouraging owners to lease the whole of the land in which they held a freehold estate for the specified activities, as opposed to leasing only part of that land and retaining a portion for non–exempt uses (including where the leased area might be intended ultimately to advance those non–exempt uses, as with a golf course associated with a residential development). It may be that, as the Plaintiff contends, a construction of s 71(1) allowing for leasing of part of the land on a land tax exempt basis would encourage such “public benefit” land use. However, this is mere speculation in the context of these proceedings and, in any event, that assessment is a matter for Parliament and its resolution of the position in this respect is to be discerned as a matter of construction of the words of the Act; and unaided by speculation. It is the position that s 35(a) of the Interpretation of Legislation Act 1984 directs courts to a construction of legislation which “promote[s] the purpose or object underlying the Act”. However, provisions of this nature do not open the process of statutory interpretation to such speculation but, rather, mandate this approach when the provisions of the legislation, together with relevant extrinsic materials, make clear the legislative purpose. In the present circumstances, to the extent that legislative purpose is established, it is one which is, in my view, consistent with, and given effect by, the approach advocated by the Commissioner.[70]

   [69]Plaintiff’s Submissions (23 December 2016) [61].

   [70]And see below, the discussion in relation to legislative history and extrinsic materials (below, [44]–[51]).

1. In some respects, the means of addressing s 71(1) in the present circumstances lay in the hands of the Plaintiff, insofar as it would have been open to give effect to a subdivision of the Estate land under which a separate certificate of title was created for the Leased Land on which the golf course and club house are situated. It is beyond the scope of the issues raised by this appeal to speculate as to why the Plaintiff chose not to do so. The possibility that such an approach might be adopted does not detract from the arguments in support of the Commissioner’s construction of s 71(1).[71]

   [71]Cf Commissioner of State Revenue v Pattison (2001) 3 VR 520 at 524 [19].

Legislative history and extrinsic materials

Land Tax Act 1958

1. Section 71(1) of the Act is derived from s 9(1)(da) of the Land Tax Act 1958 (“the 1958 Act”), which provided:

… land which is vested in any person or body and which is leased to be used for out-door sporting recreation or cultural purposes or similar out-door activities where the proceeds from the leasing are applied exclusively by that person or body for charitable purposes…

1. Section 9(1)(da) was inserted into the 1958 Act by the Land Tax (Assessment) Act 1981.  The extrinsic material does not shed much light on the operation of this exemption.[72]  It may be observed that the word “land” was used throughout the list of exemptions in s 9(1) of the 1958 Act, most of which did not refer to land that was “leased”, which is consistent with a construction that would identify land by reference to a certificate of title rather than by reference to a lease instrument.

   [72]See Victoria, Parliamentary Debates, Legislative Assembly, 17 November 1981, 2993–4 (Lindsay Thompson, Premier and Treasurer); Victoria, Parliamentary Debates, Legislative Assembly, 1 December 1981, 3920-32.

1. It may also be noted that several provisions in the 1958 Act contained a reference to the plural expression “lands”, including a reference to “different lands” in s 52 of the 1958 Act (which was the provision in issue in Commissioner of State Revenue v Famajohn Nominees Pty Ltd[73]).

Land Tax Act 2005

[73](1999) 43 ATR 29 (“Famajohn Nominees”).

1. The extrinsic materials accompanying the Act did not directly address the meaning of “land”. There was nothing to suggest that the term “land” in s 71(1) of the Act was intended to have any different meaning to “land” in former s 9(1)(da) of the 1958 Act.[74]

   [74]See Victoria, Parliamentary Debates, Legislative Assembly, 8 September 2005, 717–719 (John Brumby, Treasurer).

1. The Explanatory Memorandum stated in relation to Division 3 of Part 4 (in which s 71(1) is found):[75]

Sporting, recreational and cultural land (Division 3)—this Division exempts sporting, recreational and cultural land in specified circumstances.  The criteria for the exemption varies, depending on whether the land is owned or leased.

[75]Explanatory Memorandum, Land Tax Bill 2005 (Vic) 14.

1. If the land is used for the specified activities by the owner, any exemption will be governed by s 72. If the land is leased, any exemption will be governed by s 71. But in both instances the land is to be identified in the same way, namely by reference to the land owned by or vested in the owner who claims the exemption.

1. The Explanatory Memorandum relevantly stated in respect of s 71:[76]

[Clause 71] provides an exemption from land tax for an owner of land who leases the land for sporting, recreational, cultural or similar activities, where the land is available for use for these activities by members of the public and where the proceeds from the leasing are applied exclusively for charitable purposes.  The owner must apply to the Commissioner for the exemption.

[emphasis added]

[76]Explanatory Memorandum, Land Tax Bill 2005 (Vic) 21.

1. The reference to “the land” refers back to the expression “owner of land”, which in turn can be understood as a reference to the land to which a person is entitled by way of a freehold estate in possession, being the land described in the certificate of title by which the registered proprietor of the freehold estate is identified.

Previous authorities

1. The Plaintiff relies upon Famajohn Nominees,[77] in which Balmford J rejected a submission made by the Commissioner that “land” (or a “land”) for the purposes of the 1958 Act meant the land comprised in a single certificate of title, and concluded that the lands owned by the taxpayer in that case, although comprised in a single certificate of title, were “readily identifiable as different pieces of land, that is, different portions of the earth’s surface”.[78]

   [77](1999) 43 ATR 29.

   [78](1999) 43 ATR 29 at 34–35, [23].

1. Famajohn Nominees was concerned with the provisions of the 1958 Act, which had some differences in terminology from the current provisions of the Act.[79]  The Plaintiff correctly concedes that “the issue under consideration was different in Famajohn to the issue in question here”.[80]  Moreover, the conclusion reached by Balmford J on the meaning of “different lands” for the purposes of s 52 of the 1958 Act was not essential to her decision, by which the Commissioner’s appeal was allowed on other grounds.  In any event, the Commissioner submits that the Court should not follow Famajohn Nominees in construing and applying s 71(1) of the Act in the present case. As discussed in these reasons, there are compelling indications in the text, context and purpose of the Act as a whole that the subject “land” in s 71(1) is the land described in a certificate of title.

   [79]For example, several provisions of the 1958 Act contained references to the plural “lands” and there were also references to “a portion” of land or lands.

   [80]Plaintiff’s Submissions (23 December 2016) [88].

1. In Wines v Commissioner for State Revenue,[81] the Victorian Civil and Administrative Tribunal distinguished Famajohn Nominees and stated that the conclusion reached by Balmford J “does not constitute a binding precedent excluding the view that ‘land’ means the land comprised in a title or Crown lease”. Deputy President Macnamara (as his Honour then was) addressed the question of what is the “integer” of land for the purposes of assessment to land tax under the Act. The issue for decision in Wines concerned whether a taxpayer was entitled to an exemption under s 54(3) of the Act for a part of land that was contiguous to land used and occupied as his principal place of residence. While approximately two–thirds of the adjoining land (comprising a garden) was used for the private benefit and enjoyment of the taxpayer and his family, approximately one–third of the land (comprising a house) had been fenced off and was let to a tenant. The Tribunal confirmed the assessment, rejecting the taxpayer’s submission that the requirements for exemption under s 54(3) could be satisfied in respect of part of the adjoining land, and that he should be liable for land tax on no more than one-third of the land. Having set out the provisions of s 10 of the Act [who is the owner of land?], Deputy President Macnamara said:[82]

   [81][2011] VCAT 310, [29] (“Wines”) (emphasis in original).

   [82][2011] VCAT 310, [24]–[28].

24.It will be seen therefore that despite the breadth of the definition of land in Section 3 of the Act, inferentially an ordinary commercial leasehold interest in land is not to be regarded as land. This follows from the fact that the person liable to pay Land Tax is the “owner” of land and the holder of an ordinary commercial leasehold estate in land is not in accordance with Section 10 of the Act to be regarded as an owner of that land. The concept of owner is extended in various ways in the following sections, say for instance a life tenant is “deemed to be the owner of the land instead of the person entitled to the fee simple reversion”.  Someone who disposes of land but remains in possession of it is also deemed to be the owner (Section 14) and a purchaser of land in possession is deemed to be the owner under Section 14 and so on.

25.If one were guided solely by the definition of land in Section 3 one would suppose that Section 103 of the Land Tax Act which provides as follows:

103.Notice of acquisition of land

(1)A person who acquires land must give notice of the acquisition—

(a) to prescribed persons; and
(b) within a prescribed period.

(2)The notice must—

(a) contain the prescribed information; and

(b) be in the prescribed form (if any); and

(c) be given in the prescribed manner.

(3)Any information contained in a notice under this section may be disclosed to the Valuer-General.

would oblige someone who took out a five year commercial lease to give a notice of acquisition to the Commissioner. Inferentially however since such a person would in terms of the Act neither be the owner nor deemed to be the owner. This cannot be right and when Section 103 refers to persons acquiring land it must mean in effect “becoming the owner or the deemed owner in accordance with the terms of this Act”.  All of these considerations lead me to be inclined to the view despite the very wide definition of land to be found in the Land Tax Act that the word land is used in the Act “to designate a portion of the earth’s surface”.  To quote what was said by Griffith CJ in Isles v Federal Commissioner of Land Tax[1912] HCA 24; (1912) 14 CLR 372, 376 (speaking of the word in the Commonwealth Land Tax Assessment Act 1991) His Honour’s statement was adopted and approved by Balmford J in Famajohn (1999) 43 ATR 29, 32 [13]–[14]. Nevertheless this leaves open the question as posed by Balmford J in Famajohn what is “a land” for the purposes of the Act. Mr Kotros drew my attention to a remark that I made in Arifoglau v Commissioner of State Revenue[2006] VCAT 2679 at [31] where I said once again in the context of an exemption claimed under the equivalent of Section 54, for land contiguous to a principal place of residence:

The contiguous land at 659–663 should be regarded as a single entity having geographic unity and the application of the criterion of exemption laid down by the first paragraph, paragraph (a) of Section 13A(3) of the Land Tax Act 1958 should be applied accordingly.

26.I reached that conclusion despite the fact that the two pieces of land seeking exemption under the Section 54(3) equivalent were separated by a street.

27.In my view there is no ground for treating number 16 [Silver Street] as being other than a single piece of land. The existence of a leasehold interest relative to the house which does not affect the back garden assuming that this is the correct view of the facts should make no difference. … No. 16 remains a single piece of land despite the creation of the tenancy over the residence. It is a single piece of land which must be treated in a non–differential manner for Land Tax purposes in the absence of any section which requires it to be dealt part by part and for the reasons given above I believe there is no such authority or requirement to be found in the Act.

28.My own inclination is to accept the view expressed by Mr Kotros on behalf of the Commissioner that to use the terminology of Balmford J “a land” under the Land Tax Act means the land comprised in a certificate of title held under the Transfer of Land Act 1958 in the case of freehold land or in a Crown lease in the case of Crown land.

1. While the Plaintiff seeks to challenge the decision in Wines and to re-characterise the facts on which the decision turned,[83] the Tribunal’s reasoning does, in my view, provide persuasive support for the Commissioner’s construction of s 71(1) in the present case. Moreover, I should add that I regard this comprehensive statement by Deputy President Macnamara as to the meaning of “land” under the Act as highly important and persuasive, and an exposition which should be regarded as having been adopted by this Court. The Commissioner’s construction of “land” in s 71(1) of the Act is also consistent with other decisions which are authority for the proposition that “land” in various statutory schemes refers to the land described in a certificate of title.[84]

   [83]See Plaintiff’s Submissions (23 December 2016) [71]–[85].

   [84]See Harry v Valuer–General (1975) 12 SASR 446 at 452–453; McDowall Village Shopping Centre Pty Ltd v Commissioner of Land Tax (2009) 74 ATR 395 at 400 [20].

Effect of re-enactment of Land Tax legislation

1. The Plaintiff raised the further argument that the reasoning of Balmford J in Famajohn Nominees took on particular significance in light of the re-enactment in the Land Tax legislation in the Act in 2005, where all relevant concepts were adopted from the Land Tax Act 1958, including the concept of “land”. Thus, the Plaintiff submits:[85]

28.Since the time of the Famajohn decision, the Commissioner has not contended for a different outcome in any litigation in this Court, nor has the Commissioner, between 1999 and 2005, prevailed upon Parliament to amend the Land Tax Act 1958 to legislate his “certificate of title” argument. The effect of this part of the Famajohn decision was therefore that “land”, in the Land Tax Act 1958, was not “the land comprised in the particular certificate of title” — and the absence of any amendment to the 1958 Act served to endorse this operation of the Act.

…

33.In this case, the relevant decision of Balmford J was to unambiguously reject the Commissioner’s contention that “land” in the Land Tax Act 1958 meant “the whole of the land comprised in a particular certificate of title”. So, at the very least, we know what “land” does not mean in the 1958 Act — and the definition of “land” in the 1958 Act was never amended by Parliament.  Further to this, by its adoption of all relevant concepts from the 1958 Act into the Land Tax Act 2005, Parliament is taken to have generally adopted the meaning of “land” from the 1958 Act (which was not the land as “comprised in a particular certificate of title”). Even if there were any doubt about the correctness of the reasoning in Famajohn (and, respectfully, there is not), it is now too late to alter that position, to re–define “land” for the land tax purposes.

[85]Plaintiff’s Reply Submissions (17 February 2017) [28], [33] noting the references to Commissioner of Taxation v Energy Resources Australia Ltd (2003) 135 FCR 346 and other cases at [30]–[32] of those submissions.

1. The principle of statutory interpretation on which the Plaintiff relies has been referred to as the “re-enactment presumption”[86]—namely, that “where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already ‘judicially attributed to [them]’.”[87] However, for the reasons which follow, this principle or presumption either has no application, or is of little assistance in resolving the proper construction of s 71 of the 2005 Act in the present case.

   [86]Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489 at 502 [15].

   [87]Re Alcan Australia Ltd; Ex parte Federation of Industrial Manufacturing and Engineering Employees (1994) 181 CLR 96 at 106.

The presumption is only an aid to construction, which may be of minimal weight

1. Although the “re-enactment presumption” subsists as an aid to statutory construction and has not been overruled, it is of minimal weight in most cases, and is primarily used only to reinforce an interpretation which is reached through the application of other legal principles.[88]  Then in Salvation Army (Vic) Property Trust v Fern Tree Gully Corporation,[89] Fullagar J described an argument based on the presumption as “a familiar, but somewhat artificial, argument” which “never carries great weight: indeed it can seldom be effectively used except as lending additional support to a view which is already supported by an independent argument”.  Dixon CJ expressed similar sentiments in R v Reynhoudt:[90]

In any case the view that in modern legislation the repetition of a provision which has been dealt with by the courts means that a judicial interpretation has been legislatively approved is, I think, quite artificial.  To repeat what I have said before, the mechanics of lawmaking no longer provide it with the foundation in probability which the doctrine was supposed once to have possessed.

These observations were endorsed in Flaherty v Girgis by Mason ACJ, Wilson and Dawson JJ, who stated that “[f]or the reason given by Dixon CJ, the suggested rule nowadays is little use as a guide and it will not be permitted to prevail over an interpretation otherwise appearing to be correct”.[91]

[88]R v Porter (2004) 61 NSWLR 384 at 392 [37]. See also Director of Public Prosecutions (Vic) v Hore (2004) 10 VR 179 at 197 [71]: “[t]he so–called ‘re–enactment rule’, even if it were applicable to these circumstances, is at best a guide in ascertaining Parliament’s intention and its use should not be permitted to strain or alter the plain and ordinary meaning of the language …”

[89](1952) 85 CLR 159 at 182.

[90](1962) 107 CLR 381 at 388.

[91]Flaherty v Girgis (1987) 162 CLR 574 at 594; see also Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329 and the discussion and application of these authorities in Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 at 575–576 [87]–[92].

1. Moreover, it is clear that the “re-enactment presumption” cannot prevail over a correct interpretation of legislation based on the text of the statutory provision in question, construed in accordance with the ordinary principles endorsed in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue and subsequent cases.[92]  Accordingly, the presumption has no application in cases where the previous judicial interpretation is regarded as incorrect.  As Dixon, Williams and Webb JJ acknowledged in Salvation Army (Vic) Property Trust v Fern Tree Gully Corporation,[93] the principle “should not lead the Court to perpetuate the construction of a statutory provision which it considers to be erroneous”.

   [92]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46–47 [47]; see also Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378 at 388–390 [23]–[26]; Thiess v Collector of Customs (2014) 250 CLR 664 at 671 [22]; Commissioner of State Revenue v EHL Burgess Properties Pty Ltd (2015) 209 LGERA 314 at 330–331 [56]–[63].

   [93](1952) 85 CLR 159 at 174; see also Williams v Oataway (2005) 11 VR 529 at 540 [20].

1. This position is consistent with the following oft-cited observations of Mason J in Babaniaris v Lutony Fashions Pty Ltd:[94]

The fundamental responsibility of a court when it interprets a statute is to give effect to the legislative intention as it is expressed in the statute.  If an appellate court, particularly an ultimate appellate court, is convinced that a previous interpretation is plainly erroneous then it cannot allow previous error to stand in the way of declaring the true intent of the statute.  It is no part of a court’s function to perpetuate error and to insist on an interpretation which, it is convinced, does not give effect to the legislative intention. … The fact that Parliament can, if it so chooses, displace an erroneous interpretation does not provide a justification for the Court's refusal to give effect to the law as declared by Parliament.  There are factors that may militate against Parliament taking steps to enact appropriate remedial legislation.

Reasoning in Famajohn Nominees does not attract the presumption

[94](1987) 163 CLR 1 at 13–14 (footnotes omitted).

1. The reasoning of Balmford J in Famajohn Nominees on the meaning and application of “different lands” in s 52 of the 1958 Act does not represent a settled interpretation that is capable of attracting a presumption that the Parliament intended “land” in the 2005 Act to have the same or a similar meaning, whether in s 71 or elsewhere in the 2005 Act. The Plaintiff’s attempt to invoke this presumption therefore, as the Commissioner contends, fails at the threshold.

1. First, Balmford J’s reasoning and conclusion that the properties were “different lands” within the meaning of s 52 of the 1958 Act were clearly obiter dicta, in that they were unnecessary to the ultimate decision in favour of the Commissioner that the lands were not held for “different beneficial owners” for the purposes of s 52.  The outcome meant that the Commissioner had no opportunity to test the correctness of the reasoning on the meaning and application of “different lands” in s 52 of the 1958 Act on appeal.[95]  As Pearce and Geddes have noted:[96] “[i]f a court is merely expressing an opinion on a point not necessary for the decision of the particular case, legislation enacted after the expression of that opinion should not be regarded as being affected by it”.

   [95]In fact, the Commissioner did seek to bring an appeal from the finding of Balmford J on this question, but the appeal was regarded as incompetent because the Commissioner did not challenge the judgment or orders at first instance.

   [96]D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8^th ed, 2014) 140 [3.46].

1. Second, the issue addressed in Famajohn Nominees was in relation to a differently worded expression in a different provision (namely, “the owner of different lands” in s 52 of the 1958 Act), and those words have not been re-enacted in the 2005 Act.[97] The reasoning of Balmford J did not directly consider the meaning of “land” for the purposes of the predecessor provision to s 71 of the 2005 Act (see s 9(1)(da) of the 1958 Act).

   [97]Cf Thompson v Smith (1976) 135 CLR 102 at 109.

1. Third, the interpretation adopted by Balmford J had not been applied on any other occasion prior to the enactment of the 2005 Act.[98]

   [98]Cf R v Porter (2004) 61 NSWLR 384 at 391 [36].

1. As stated by Macfarlan JA in R v Aubrey,[99] “[i]n order for the presumption to carry any weight, the state of the law must have been certain at the time the provision was re–enacted.”  The state of the law on the meaning of “land” or “lands” in the 1958 Act cannot be seen as having been definitively established by the obiter dicta of Balmford J in Famajohn Nominees.

   [99](2012) 82 NSWLR 748 at 758 [50].

Land Tax Act 2005 was a consolidating Act only

1. The Plaintiff accepts that the 2005 Act was replacement or consolidation legislation that was intended to re-enact and not to alter “the fundamental concepts as to how land tax is assessed, calculated or collected”.[100]  This is consistent with the primary legislative purpose stated in s 1(a) of the 2005 Act as being “to re-enact and modernise the law relating to land tax”, and with the extrinsic material in relation to the Land Tax Bill 2005.[101]  The Plaintiff’s acceptance of this relationship between the 2005 Act and the 1958 Act is an additional reason not to give any weight to the “re-enactment presumption”.

   [100]Plaintiff’s Reply Submissions (17 February 2017) [29].

   [101]Explanatory Memorandum, Land Tax Bill 2005 (Vic) 1; Victoria, Parliamentary Debates, Legislative Assembly, 8 September 2005, 717 (John Brumby, Treasurer).  See also Commissioner of State Revenue v Oakbee Pty Ltd (2013) 96 ATR 619 at 629 [43].

1. In the case of consolidating legislation, the re-enactment presumption does not apply, because the operative legislative intention is to re-enact the law whatever its interpretation, rather than to endorse any previous judicial interpretation of a specific provision or provisions.  Thus, in Williams v Official Assignee of the Estate of William Dunn,[102] Griffiths CJ said:

The doctrine that, where a particular provision in a Statute has received definite judicial interpretation and the legislature afterwards repeals that provision and substitutes for it another in the same language, it should be presumed that they intended to adopt the interpretation that had been put upon the words by the Courts, has no application unless it appears that the legislature intended to apply their minds to the subject.  In the present case it appears from the nature of the legislation that the legislature intended a mere consolidation of existing statutory provisions, whatever they might mean.

In other words, in enacting a consolidating statute, Parliament “was addressing its mind not to the matter but the form of the law, and was considering not what it should enact but how existing law should be arranged”, and “[s]tatutory provisions were collected and systematized, but with the intention that their effect was to be precisely the same after the work was completed as before”.[103]

[102](1908) 6 CLR 425 at 441. See also R v Porter (2004) 61 NSWLR 384 at 391 [34].

[103]Melbourne Corporation v Barry (1922) 31 CLR 174 at 188 (emphasis omitted).

1. After referring to the authorities referred to above, Pearce and Geddes conclude:[104]

From these decisions it appears that the presumption has little application in relation to consolidating Acts.  And this is as it should be.  Even if one accepts the proposition that the parliament is aware of existing judicial interpretations, in enacting consolidating Acts, as Isaacs J says, parliament does not reconsider the content of the law but only its form.  The general principle ought therefore to have no application.

The absence of amendment following Famajohn Nominees

[104]D C Pearce and R S Geddes, Statutory Interpretation in Australia (8^th ed, 2014) 140 [3.45].

1. No authority is cited by the Plaintiff in support of a related argument—namely, that the Court can rely on the mere absence of any specific amendment to the 1958 Act to address the decision in Famajohn Nominees, so that it is now “too late” to contend for any different construction.[105]  For the following reasons, this argument should be rejected.

   [105]See Plaintiff’s Reply Submissions (17 February 2017) [16], [28], [33].

1. The Plaintiff’s argument is tantamount to raising some form of estoppel against Parliament, or against the courts and the parties in subsequent proceedings, which would preclude or restrict the ascertainment of the meaning of the statutory text in accordance with settled principles of construction.  The legislative intention must ultimately be discerned from the text and context of the relevant statutory provisions, and no inference can legitimately be drawn as to that legislative intention merely from the subsequent inaction of Parliament following a judicial decision.[106]  Finally, insofar as the Plaintiff seeks to rely on this argument to enhance the authority of the reasoning in Famajohn Nominees, it is important to recall that the weight to be accorded to a previous judicial decision on the construction of a statutory provision is governed by principles of stare decisis, and not by any presumed endorsement or acceptance of a particular interpretation to be inferred merely from the silence of a subsequent Parliament.

   [106]See also Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378 at 389 [25], where French CJ and Hayne J stated that “[d]etermination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted.” A fortiori, it cannot depend on an inference as to the state of mind of members of Parliament or government departments or agencies in not proposing specific amendments to address a particular judicial decision.

The Plaintiff’s alternative argument

1. The Plaintiff puts an alternative submission that “[i]f s 71 requires all of the land within a given certificate of title to be leased for the required purpose, then all of the land within the relevant certificates of title were so leased, having regard to the essential and overall use made of the land”.[107]

   [107]Ground 2 in Plaintiff’s Submissions (23 December 2016). Insofar as this amounts to a new ground of objection, the Commissioner does not oppose the grant of leave pursuant to s 109 of the Taxation Administration Act 1997.

1. I accept the Commissioner’s contention that the immediate answer to this alternative submission is that the whole of the land vested in the Plaintiff was not leased to Black Bull or at all. Section 71(1) clearly requires an identity between the “[l]and vested in a person or body” and the land which is leased for the specified activities in s 71(1)(a)—“it”, being the “[l]and vested in a person or body”, must be leased for the specified activities. Accordingly, if the Plaintiff fails in its primary argument and the “[l]and vested in a person or body” for the purposes of s 71(1) refers to all of the land described in a certificate of title, this would be fatal to its alternative submission because not all of that land was leased to Black Bull or at all. In other words, s 71(1) does not expressly or by implication leave any scope for applying the requirements of the exemption by reference to the “essential and overall use” of the land (nor the “primary” or “substantial” use—cf s 72(2)(a)).

1. In any event, the use of part of the land for a purpose which is not ancillary or incidental to the requisite statutory purposes in s 71(1)(a) (namely, being leased for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities), and which is properly characterised as an independent or collateral purpose, would prevent the land as a whole from satisfying the conditions of the exemption.[108]  In the present case:

(a)The use of a significant part of the land for residential development cannot be regarded as “merely ancillary and incidental” to the use of the Leased Land as a golf course and clubhouse facility.[109]

(b)On a purely quantitative basis, the area reserved for residential development outweighed the area available for use for sporting activities in the 2014 and 2015 tax years. Even as at 31 December 2015, the area occupied by the golf course and clubhouse was only slightly more than 60% of the whole land, and cannot be said to have been so predominant as to impart a character to the land as a whole or to lead to the conclusion that the whole land was leased and available for use for an exempt purpose under s 71.[110]

(c)Particularly given that the Plaintiff is in the business of conducting urban residential development projects, it might be inferred that residential development was the principal purpose for which the land as a whole was being used at the relevant dates, and the golf course was incidental to the residential development rather than the other way around.

[108]See Mayor, Councillors and Citizens of the City of Essendon v Cox [1967] VR 545 at 551; Capital Club Pty Ltd v Commissioner of State Revenue (2007) 17 VR 357 at 371 [58].

[109]Cf Capital Club Pty Ltd v Commissioner of State Revenue (2007) 17 VR 357 at 371 [58], where it was held that the provision of residential accommodation for greenkeepers was not to be fairly regarded as ancillary or incidental to the use of the land as a whole for a golf course, no matter how convenient it may have been to have those employees living close at hand. Mandie J observed that “[i]n any event I think that the provision of residential accommodation is a domestic or private matter that cannot be treated, in the context of the exemption [under s 9(1)(g) of the 1958 Act], as ancillary or incidental to the use of the land for out–door sporting activities”.

[110]Cf Abbott v Commissioner of Land Tax [1985] VR 164 at 164, 166, 169–170.

1. In such circumstances, the fact that part of the land was leased and available for use for the specified activities was not sufficient to impart that character to the whole of the land in satisfaction of the requirements of the exemption under s 71(1) of the Act.

All of the leased land was not available for use

1. Alternatively, the Commissioner contends that, as was found by the Commissioner’s delegate in the notice of determination, not all of the Leased Land was “available for use … by members of the public” at the relevant date for the 2014 and 2015 tax years, in that a substantial portion of the golf course (5 out of 18 holes, and 18.93 ha out of 74.95 ha) remained under construction at each of those dates.  In this respect, the Commissioner draws a comparison with Sandhurst Holdings (Australia) Ltd v Commissioner of State Revenue:[111]  “[u]se for the specified purposes … does not cover use for a preliminary activity, such as construction or development preparatory to such use”.  See also Applewood Residential Developments Pty Ltd v Commissioner of State Revenue:[112] “in a case like the present where the project is still being developed, the land on which the project is being developed is not being used for the purpose for which it will be used once it has been developed”.  This, the Commissioner says, is an additional and independent reason for disallowing the objection to the 2014 and 2015 land tax assessments.

   [111](2009) 25 VR 59 at 73 [77].

   [112](2006) 64 ATR 291 at 296 [20] (“Applewood”).

1. In response, the Plaintiff submits that it is necessary, first, to state in full the relevant part of paragraph (a) of s 71(1), which provides:

(a)it is leased for outdoor sporting … activities and is available for use for one or more of those activities by members of the public.

[emphasis added]

It is then said that the requirement that the leased land be “available for use for one or more of [the] activities by members of the public” is a requirement comprised of two parts. This condition in s 71(1), in its composite form, is, the Plaintiff submits, really directed to ensuring that this exemption will only be available if the relevant outdoor recreational activity on the leased land is one that is open to any member of the public; in the sense that it is not a private, or “exclusive”, club. The s 73 concession, by contrast, applies to not–for–profit clubs, established for members only.

1. The golf course, in this case, is open to any member of the public (upon payment of the green fees), and was open to the public in the 2014 and 2015 years.[113]  It has been held, in different statutory contexts, that the payment of some form of fee will not prevent land from being regarded as being “open to the public”.[114]  In the context of a provision using the expression “for purposes of public recreation”, Brereton J held that this expression “necessarily involves the use of such land by the public for their recreation”, but that “[i]t is obviously not necessary that the public must at all times have access to all parts of the land”.[115]

   [113]See Smith Affidavit, [12]–[13].

   [114]See Zerella Holdings Pty Ltd v Williams (2012) 113 SASR 573, 584–5 [40]; Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd (2013) V ConvR 54–836, 65-371 [34].

   [115]Attorney–General v Cooma Municipal Council (1963) 63 SR (NSW) 287, 294 (Plaintiff’s emphasis). See also Application of Willoughby City Council [2016] NSWSC 1717, [51].

1. For the 2014 and 2015 years, the land was leased for use as a golf course, except that, for those years, only 13 holes were operational; the other five holes were still being built.  In the 2014 and 2015 years, members of the public were, without discrimination, able to play the course, and did play the course.  On this basis, the Plaintiff contends that the land that was leased was therefore leased “for outdoor sporting … activities”, in that all of the leased land was leased “for” that purpose. The Plaintiff then observes that the Commissioner has not contended otherwise here. Rather, and bearing in mind, as discussed further, this is not the relevant test for the purposes of s 71(1) of the Act, the point taken by the Commissioner, in his alternative ground, is that all of the leased land was not, in these years, “available for use for [golfing] activities by members of the public”. The Plaintiff says that the fact that five holes were still under construction is not to the point; what is relevant, it says, is that the public had full access to the course, such as it was, in these years—appreciating that the work being done on the land was being undertaken in order to facilitate the further and better use of the land for the required purpose.

1. The Plaintiff submits that, here, most of the leased land was “available for ‘active’ use” in the 2014 and 2015 years.  While the five holes that were under construction were not being immediately used in those years for golf, the land upon which these holes were being built was, plainly, being put to a use wholly consistent with the existing use of the land—which was as a golf course. For this reason, it is said that, while there were five holes under construction, this did not, and could not, serve to deny the predominant (and visible) use of the land, viewed as a whole, as a golf course. Moreover, it is said that the authorities, in this respect, recognise that there is a “tolerance” for land which may not be used directly for the principal purpose to which the majority of the land is being put—but, provided that this secondary use (or non–use) is consistent with the principal purpose for which the land is being used, the use of the other land will take its character from the principal use of the land. However, for reasons which follow, these authorities must be viewed in the context of the different requirements in the legislative provisions which underpinned them, as compared with the requirement of s 71(1) of the Act.

1. In Sandhurst, the question was whether the land upon which two 18–hole golf courses, which were under construction was “used for out–door sporting … purposes or similar out–door activities”.  In Sandhurst, no part of the golf course had been completed, and no golf therefore had been played on the land.  In the course of her Honour’s judgement, Dodds–Streeton JA said:[116]

   [116](2009) 25 VR 59 at 72–74 [67]–[77].

67.Few of the authorities relied on by either party concerned a provision with the same structure or the same unusual terminology as s 9(1)(g) of the Act.

68.City of Newcastle involved the determination of whether the retention of a vacant part of a total holding was “used for the purposes of” an established hospital, which was currently operating.

69.Educang involved the determination of whether land on which a new school campus was being constructed was “used for educational purposes” and “entirely for” an established and operational school.

…

71.While Cox required an analysis of the prior equivalent provision to s 9(1)(g) … it was in relation to a different question and factual context—viz, whether where some parts of a total landholding were already actively used for the specified “end” purpose, other parts used for purposes ancillary to, rather than independent of, that end purpose, were likewise not liable to a general rate under the Local Government Act 1958.

…

73.Applewood, on which the respondent relied, also involved wording which differed materially from that of s 9(1)(g) … [The Court of Appeal] opined that land on which residences were being constructed in a “phase” of developing a retirement village would not be exempt under s 9(1)(j) until at least one residence comprising the phase was completed to the point of availability for occupation. Before that, the land would merely be being developed and not yet used and occupied as the thing for which it would ultimately be used and occupied.

74.In contrast to s 9(1)(g), s 9(1)(j) specifies use and occupation as (rather than for) a retirement village … Further, Nettle JA’s conclusion that land on which buildings were being constructed was being developed, rather than used or occupied as the thing for which it would ultimately be used and occupied, is not applicable to s 9(1)(g), given its different terminology.

75.Unlike s 9(1)(j), s 9(1)(g) has not been narrowed by drafting designed to exclude the uncertainties that attend the determination of whether land is used for a designated purpose. The specific language of s 9(1)(g) nevertheless indicates that it does not cover the preliminary stage of development, principally for the reason emphasised by the primary judge.

…

77.… The phrase “for [specified] purposes” in isolation might import a prospective element covering construction on the land directed towards the ultimate purposes. The specified activities, however, must be current, not future, activities … Use for the specified purposes in the context of the second condition in s 9(1)(g) is thus, in my opinion, confined to use for, or ancillary and incidental to, the prescribed end purposes and does not cover use for a preliminary activity, such as construction or development preparatory to such use.

[citations omitted]

1. Thus, Dodds-Streeton JA “ruled out” the construction activities in Sandhurst as capable of constituting “use” of the land “for out–door sporting … purposes or similar out–door activities” in s 9(1)(g) of the 1958 Act. In Sandhurst, however, there had only been construction activities on the land—and nothing else.  The land had not been used at all for the playing of any golf (and could not have been used for golf).

1. The Plaintiff seeks to distinguish the present case on the basis that 13 holes were “available for use”, and had been used, by the public in the 2014 and 2015 years; and, during this time, the other five holes were completed.  Moreover, the Plaintiff says that, given that use of the land on which the five holes were being built was wholly consistent with the very purpose for which the land had been leased, and was wholly consistent with the “active” use of the land as a 13–hole golf course, it would be incorrect, and inapt, to say that the leased land was not relevantly “available for use” as a golf course for members of the public.  The Plaintiff also submits that there is a telling difference between construction activity that is anterior to the use of land as a golf course (as in Sandhurst), and construction activity that is complementary to an existing golf course (this case—and Educang Limited v Brisbane City Council,[117] in the context of an existing school).

   [117][2002] QSC 374.

1. In general terms, the word “used”—depending on content—may cast a wide net.  Thus, Taylor J stated in Council of the City of Newcastle v Royal Newcastle Hospital:[118]

The word “used” is, of course, a word of wide import ...  But where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient, in my opinion, if it be shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land.

[118](1956) 96 CLR 493 at 515.

1. In Educang Limited v Brisbane City Council, White J had to consider whether land upon which a new school was being built, adjacent to an existing school owned by the taxpayer, was “used entirely for a school”[119] (although the exemption provided that “land used for … educational purposes” was exempt,[120] the case was considered, and decided, on the narrower test of “used entirely for a school”, under the regulations).  In concluding that the land had been “used entirely for a school”, her Honour said:[121]

In this case the applicant conducted a school, the Forest Lake College, and had done so since 1994.  Since its inception, as enshrined in its memorandum and articles, it intended to have two campuses but there was only one school.  The land acquired in 1997 was the realisation of that plan.  From its acquisition by the applicant the land was for a school, that is, for the purposes of a school which was already established.  “Conducted” does not add anything to the expression “used ... for a school” in temporal terms.  It governs or describes the school and is, for example, to be contrasted with a school operated by the State.  The town plan for Forest Lake and the terms of the contract for the sale of the land and the planning approval for it as a school make plain that this land was used entirely for a school.  To emphasise the point, if “for the purposes of” were inserted before “a school” there could be no doubt about the exemption.  Bowen JA said in Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 at 533 “‘[u]se’ has regard to the purpose to which the land is put”. The respondent was wrong in characterising the use to which the land was put as a construction site.  That activity was ancillary to its use for a school.  

[emphasis added]

[119][2002] QSC 374, [9], [18].

[120]Educang Limited v Brisbane City Council [2002] QSC 374, [7].

[121]Educang Limited v Brisbane City Council [2002] QSC 374, [29]; and this case was discussed by Dodds–Streeton JA in Sandhurst (2009) 25 VR 59 at 68–69 [40]–[45].

1. In Applewood,[122] the question was whether the “disputed land”, being the land “upon which buildings were under construction, and a further nine stages awaiting future development”[123] was “land which [was] used and occupied as a retirement village and for no other purpose” (under s 9(1)(j) of the 1958 Act).  In rejecting the taxpayer’s appeal and upholding the judgment of the trial judge, Nettle JA stated that “[m]ost importantly, however, the Judge said, the Tribunal had missed the critical issue raised by s 9(1)(j), of whether at the relevant time the disputed land was used and occupied as a retirement village and for no other purpose, as opposed to whether the land was held for the purposes of a retirement village”.[124]  Later, Nettle JA said that “[t]he draftsman [of s 9(1)(j)] has eschewed reference to use for a [specified] purpose, and instead employed the expression ‘used and occupied as a retirement village’ in order to ensure there can be no doubt that the exemption is not engaged unless land is actually used and occupied as a retirement village at the relevant time”.[125]  Consequently, the Plaintiff contends that Applewood is of little assistance to this case.  In this proceeding, it is, the Plaintiff says, a matter of characterisation and impression, as to whether it could fairly be said that the land was available for use for golf by members of the public.[126] Moreover, s 71(1) does not contain the prescriptive provisions found in s 9(1)(j), nor does it have any apportionment formula, as contained in s 9(2AB). For this reason, the decision in Applewood was of little assistance in construing s 9(1)(g); the same observation applies here, the Plaintiff says, in relation to the usefulness of Applewood in construing s 71(1).

   [122](2006) 64 ATR 291 at 293 [4].

   [123]Applewood (2006) 64 ATR 291 at 293 [4].

   [124]Applewood (2006) 64 ATR 291 at 295 [13].

   [125]Applewood (2006) 64 ATR 291 at 297–8 [26] (Plaintiff’s emphasis).

   [126]Echoing similar observations by Dodds–Streeton JA in Sandhurst (2009) 25 VR 59 at 73 [74]–[75] (set out above at [80]).

1. The construction contended for by the Plaintiff has, it says, the additional advantage over that contended for by the Commissioner of enabling s 71 to work sensibly in a practical context. Public golf courses, it is said, are often located on flood prone lands which can make vast parts of a course unplayable for lengthy periods of time. Operators of golf courses are continuously working on their courses to improve their quality and consequently it is not uncommon for one or more holes, or parts of the course generally, to be out of play pending a redevelopment of the course or the reseeding, returfing or reconstruction of a fairway or a green. Thus, the Plaintiff says that on the Commissioner’s construction, the exemption under s 71 would not be available if any part of the leased land was not in a playable condition as at 31 December. That, it is said, would be an outcome not contemplated by s 71, because, if correct, it would serve to deny the exemption for the entire course, notwithstanding its unmistakeable character, and identity, as a public golf course.

1. In response, the Commissioner submits that, if s 71(1) of the Act is capable of application to that part of the land vested in the Plaintiff which comprises the Leased Land, the land was not “available for use for [outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities] by members of the public” in the 2014 and 2015 tax years because a substantial portion of the land was under construction and was therefore unavailable for use for one or more of those activities.

1. The Commissioner observes that the Plaintiff contends that the requirement in s 71(1)(a) is “really directed” to ensuring that the exemption is only available where the relevant outdoor activity is “open to the public”, as opposed to a private or exclusive club.[127] This submission does, as the Commissioner contends, reveal the same defect which affects its broader submissions about the construction of s 71(1)—namely, the assertion of a postulated legislative purpose which is not derived from or based in the terms of the statute itself. As the Commissioner also observes, the High Court has warned repeatedly against the danger of making an “a priori assumption” about a statute’s purpose, and has stressed that “[t]he purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions”.[128]  Moreover, stating the purpose of legislation does not itself resolve the questions of construction and application of the statutory text, particularly given the recognition that legislation does not pursue its purposes at all costs.[129]  Thus, the question posed by the Plaintiff—whether the golf course is open to the public—substitutes a different question for the statutory text (whether the land is “available for use for [outdoor activities] by members of the public”).

   [127]Plaintiff’s Supplementary Submissions (1 March 2017) [4]–[5].

   [128]Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 at 390 [26]; see also Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1 at 14 [28]; Deal v Father Pius Kodakkthanath (2016) 90 ALJR 946 at 955 [37].

   [129]CFMEU v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at 632–633 [40]–[41]; Carr v Western Australia (2007) 232 CLR 138 at 142–143 [5]–[7].

1. In this regard, the second limb of the requirement in s 71(1)(a) can be distinguished from statutory requirements directed to the purpose for which land is used, and from the first limb of s 71(1)(a) which is directed to the purpose for which the land is leased. In this legislative context, it is not to the point to ask whether the construction activities were consistent with or ancillary to the use of the land as a golf course,[130] nor whether the “predominant” use of the land “viewed as a whole” was for the purposes of a golf course.[131]  The question remains whether the land was “available for use” for outdoor sporting or recreational activities at the relevant dates.[132] Moreover, it is the case that the Plaintiff’s submissions on the “available for use” limb of s 71(1)(a) are difficult to reconcile with its submissions that the exemption applies to that part of the land vested in the Plaintiff which has been leased—namely, the Leased Land. In contrast, when addressing the second limb of s 71(1)(a), the Plaintiff submits that the Leased Land must be “viewed as a whole”, without any distinction between those parts, or identifiable areas, which are “available for use” and those parts which are not so available.

   [130]In any event, it is debatable whether the construction activities on the five holes can properly be regarded as incidental to the use of the balance of the land as a golf course, as opposed to simply being preparatory to the future use of the five holes for outdoor sporting activities.

   [131]Cf Plaintiff’s Supplementary Submissions (1 March 2017) [7], [8], [12].

   [132]The cases relied upon by the Plaintiff—Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493 and Educang Limited v Brisbane City Council [2002] QSC 374—speak to the analysis of purpose, not the analysis of availability.

1. Additionally, as the Commissioner submits, insofar as the Plaintiff suggests that members of the public had “full access” to the course and were “able to play the course”,[133] there is no evidence that the land on which the five holes were being construed was able to be accessed while under construction.  The evidence is that the five holes were not operational.[134]  The Plaintiff carries the onus of proving its case on appeal.[135]  There is no basis for a finding that this substantial portion of the Leased Land was accessible or available for use by members of the public while the holes were under construction.

   [133]Plaintiff’s Supplementary Submissions (1 March 2017) [6], [7].

   [134]See Smith Affidavit, [11].

   [135]Taxation Administration Act 1997 s 110.

1. Finally, it is to be observed that the Commissioner does not contend that s 71(1)(a) of the Act cannot be satisfied whenever any part of the land was not in playable condition as at 31 December immediately preceding the relevant tax year.[136]  The focus is not on whether particular holes are “playable”, nor is the inquiry confined in a strict or literal sense to the physical condition of the land as at midnight on 31 December.  The question does, in my view, involve a factual inquiry as to whether the land was “available for use” for the specified outdoor activities by members of the public as at the relevant time, having regard to surrounding circumstances including the history and pattern of use of the land as at the relevant time.[137] As the Commissioner says, in a different case, the fact that one or more holes of a golf course were temporarily unplayable—whether due to flooding, maintenance or redevelopment—would not necessarily require a conclusion that the land in question was not “available for use” for outdoor sporting or recreational activities. However, the position is different where, as in this case, the relevant land has not yet become available for use, and is under construction preparatory to its future use for outdoor sporting or recreational activities. It is the position, and consistently at least in general terms with the authorities to which reference has been made, that the application of the second limb of s 71(1)(a) may be a matter of fact and degree having regard to the evidence. The Commissioner does not contend that the requirement cannot be satisfied unless every part of the land is at all times accessible and available for use for outdoor activities by members of the public.[138] In the present case, a substantial portion (18.93 ha or about 25%) of the Leased Land was under construction and not available for use at the relevant times for the 2014 and 2015 tax years. In such circumstances, it cannot be said that the Leased Land was available for use for outdoor activities by members of the public as required by s 71(1)(a).

   [136]Cf Plaintiff’s Supplementary Submissions (1 March 2017) [20].

   [137]Thus, for example, the golf course need not be open 24 hours a day and 7 days a week.

   [138]Cf Plaintiff’s Supplementary Submissions (1 March 2017) [2].

Conclusion and orders

1. For the preceding reasons, the appeal should be dismissed.  I reserve the question of costs.