Needham v Commissioner of Land Tax

[1998] QCA 347

IN THE COURT OF APPEAL	[1998] QCA 347
SUPREME COURT OF QUEENSLAND

Appeal No. 4727 of 1998

Brisbane

[Needham & Anor v. Com. of Land Tax]

BETWEEN:

ROBERT CUST NEEDHAM AND LLOYD STANDRING

HOLDWAY AS TRUSTEES FOR TATTERSALL’S CLUB

Appellants

AND:

COMMISSIONER OF LAND TAX

Respondent

CASE STATED BY THE LAND APPEAL COURT PURSUANT TO SECTION 45A

OF THE LAND ACT 1962

McMurdo P
Thomas JA

Wilson J

Judgment delivered 30 October 1998

Judgment of the Court

ANSWER TO QUESTION RAISED PURSUANT TO S. 45A OF THE LAND ACT 1962

LOTS 1, 2 AND 3 WERE EXEMPT FROM LAND TAX UNDER THE LAND TAX ACT 1915 AS AT MIDNIGHT 30 JUNE 1995 ON THE BASIS THAT SUCH LAND BEING ‘LAND OWNED BY OR IN TRUST FOR’ TATTERSALL’S CLUB WAS ‘USED OR OCCUPIED BY’ THE CLUB ‘SOLELY AS A SITE FOR ... A BUILDING OWNED AND OCCUPIED BY’ THE CLUB WITHIN THE MEANING OF S 13(1)(vii)(c) (NOW S 13(1)(g)(i)) OF THE LAND TAX ACT 1915.

ORDER THE RESPONDENT PAY THE APPELLANTS’ COSTS OF AND INCIDENTAL

TO THE APPEAL AND THE HEARINGS BELOW TO BE TAXED.

CATCHWORDS:	LAND TAX - exemption - land owned by club not carried on for pecuniary profit - used or occupied solely as a site for a building - intention to erect and occupy building on land - whether there must be existing building owned and occupied by club.
Land Act 1962 s 45A Land Act 1994 s 521 Land Tax Act 1915 s 13(1)(vii)(c) (now s 13(1)(g)(i))
Commissioner of Land Tax (NSW) v Joyce (1974) 132 CLR 22 Gosford RSL Club Co-operative Limited v Commissioner of Land Tax (NSW) 82 ATC 4505
Counsel:	Mr H.L. Alexander for the appellants Mr P.R. Dutney Q.C. with him Mr P.J. Flanagan for the respondent
Solicitors:	Allen Allen & Hemsley for the appellants Crown Solicitor for the respondent
Hearing Date:	21 October 1998

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4727 of 1998

Brisbane

Before McMurdo P Thomas JA Wilson J

[Needham & Anor v. Com. of Land Tax]

BETWEEN:

ROBERT CUST NEEDHAM AND LLOYD STANDRING

HOLDWAY AS TRUSTEES FOR TATTERSALL’S CLUB

Appellants

AND:

COMMISSIONER OF LAND TAX

Respondent

CASE STATED BY THE LAND APPEAL COURT PURSUANT TO SECTION 45A

OF THE LAND ACT 1962

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 30 October 1998

1. Pursuant to s 45A of the Land Act 1962 the Land Appeal Court has stated a case for the opinion

   of this Court on a point of law as to whether certain land was exempt from land tax as at midnight on 30

   June 1995. (That section continues to have effect despite the repeal of that act by the Land Act 1994: see

   s 521 of the 1994 Act.)

2. The appellants are trustees of Tattersall’s Club, which has at all material times been a club or society

   of more than 5,000 members not carried on for pecuniary profit.

3. By early 1995 the Club had for many years owned and occupied premises with frontages on Queen

   and Edward Streets, Brisbane. In the first half of that year it contracted to purchase the following properties,

   on which buildings were then standing, for redevelopment as additional club facilities:

   (i)          land owned by Advance Bank Australia Limited described as lots 1, and 2 on registered

   plan 4170 (“the Advance Bank land”) ; and

   (ii)         land owned by St George Bank Limited described as lot 3 on registered plan 4170 (“the

   St George Bank land”).

4. The contract for the purchase of the Advance Bank land was completed on 30 March 1995. At

   the time of completion the building which had been on it when the contract was executed had been partly

   demolished. Demolition was completed before 30 June 1995.

5. The contract for the purchase of the St George Bank land was completed on 16 June 1995. At the

   time of completion the buildings which had been on it when the contract was executed had been completely

   demolished.

6. The Club obtained finance of $24 million for the acquisition and redevelopment of the additional club

   facilities, obtained all necessary town planning consents and building approvals and called tenders for the

   construction of the additional club facilities before 30 June 1995. As at midnight on 30 June 1995, lots 1,

   2 and 3 were vacant land. Construction commenced shortly after 30 June 1995 (although the building

   contract was not executed until 28 August 1995), and was completed on or about 30 May 1997.

7. By a notice of assessment dated 18 June 1996 the respondent assessed the Club to land tax on land

   owned at midnight on 30 June 1995. The assessment has been paid.

8. By a notice of objection dated 15 August 1996 the Club objected to the notice of assessment on

   the grounds that lots 1, 2 and 3 were exempt in whole or in part from land tax under s 13(1)(vii)(c) (now

   s 13(1)(g)(i)) of the Land Tax Act 1915. The objection was disallowed and the appellants appealed

   unsuccessfully to the Land Court of Queensland. Thereafter they appealed to the Land Appeal Court which

   stated this case for the opinion of the Court of Appeal.

9. The Court of Appeal’s opinion is sought on the following point of law:-

   “Were lots 1, 2 and 3 exempt from land tax under the Land Tax Act 1915 as at midnight 30 June 1995 on the basis that such land being ‘land owned by or in trust for’ Tattersall’s Club was ‘used or occupied by’ the Club ‘solely as a site for ....a building owned and occupied by’ the Club within the meaning of s 13(1)(vii)(c) (now s 13(1)(g)(i)) of the Land Tax Act 1915 ?”

10. Section 13(1)(g) of the Land Tax Act 1915 provides:-

    “Land exempted from tax

13.(1) The following land shall be exempt from taxation under this Act, namely -

(g) “all land owned by or in trust for any person or society and used or

occupie

d	by
that
person
or

society

solely as

a site for

-

(i)          a building owned and occupied by a society, club, or association, not carried on for pecuniary profit;

(ii)         a public library, institute, or museum;

(iii)        a show ground;

(iv)        a public cemetery or public burial ground;

(v)         a public garden, public recreation ground, or public reserve;

(vi)        a public road;

(vii)       a fire brigade station.”

1. It is common ground that the Club is not carried on for pecuniary profit.

2. The contention of the Commissioner is that such a club may obtain exemption from land tax only

   while there is an actual building owned and occupied by the Club on the land. The contention of the Club

   is that the exemption relates to land that is a site for a building, as well as land that is the site of an existing

   building, owned and occupied by the Club. In short, land may qualify for the exemption before erection of

   a building so long as the Club genuinely intends to erect and occupy a building on its land. There can, in the

   present case, be no doubt about the Club’s intention and commitment to such an objective at all material

   times.

3. The introductory words in paragraph (g) “all land owned by or in trust for any .... society and used

   or occupied by that .......... society solely as a site for” govern the succeeding 7 subparagraphs. The

   expression used is “as a site for’” rather than “as the site of.” It contains an element of futurity as well as

   an element of present use. In Commissioner of Land Tax (NSW) v Joyce (1974) 132 CLR 22 at 29

   Gibbs J (as he then was), with whom Mason J agreed, said of similar introductory words in s 10(1)(g) of

   the Land Tax Management Act 1956 (NSW) -

   “The word ‘site’ can refer to a piece of ground intended for building purposes, as well as to one on which a building is constructed. When one speaks of ‘a site for a church,’ rather than of ‘the site of a church,’ the words naturally suggest that the church is to be built, but has not yet been built, on the site mentioned. ...........

   I am disposed to think that the exemption conferred by s10(1)(g) is not restricted to land on which something of the kind mentioned in the paragraph is already built or constructed. For example, if the other conditions laid down by the paragraph were fulfilled, land on which a church was in the course of erection, as well as land on which a church had been erected, would be exempt from the tax.”

   See also Penrith Rugby League Club Ltd v Commissioner of Land Tax [1983] 2 NSWLR 616 at 619

   per Hunt J.

4. Counsel for the respondent submitted that to interpret the exemption as applying to land on which

   a building is to be constructed would require the importation of such words as “to be” after “building” in

   sub-para. (i). Such a meaning would naturally be implied from the introductory words “as a site for...”. In

   ordinary language, words such as “to be” might properly be omitted as unnecessary in such a context. The

   insertion of words such as “whether a building is on the site or not” might be regarded as tautologous. The

   element of futurity in the words “as a site for” is an important component of the section. It may be noted that

   the construction advanced by counsel for the respondent would require the words “site for” to be replaced

   by the words “site of.”

5. The respondent relied on the decision of the New South Wales Court of Appeal in Gosford RSL

   Club Co-operative Limited v Commissioner of Land Tax (NSW) (1982) 82 ATC 4505 for the

   proposition that the exemption is directed to the identity of the user or occupier of a building on a site rather

   than to the purpose for which the site is used or occupied. He submitted that to construe the exemption as

   being satisfied merely because the relevant occupier intends to erect a building on the site and to occupy it

   would be to apply a purposive test to the occupation of the site (ie to have regard to the intention of the

   occupier) rather than to have regard to the identity of the occupier of the building. He submitted that such

   a construction would be at odds with the distinction drawn in Gosford RSL Club, which ought to be

   followed.

6. In Gosford RSL Club the issue before the Court was whether, in order to qualify for the exemption,

   the land had to be occupied for club purposes, as opposed to other (eg business) purposes. The court had

   to construe s 10(1)(g) of the New South Wales Act, which was as follows -

“(iii) a building owned and solely occupied by a society, club, or association not carried
on for pecuniary profit.”

(Emphasis added.) In holding that the land had to be owned and occupied by the club, but not necessarily

for club purposes, Hope JA, with whom the other members of the Court agreed, said at pp 4507 - 8:-

“Section 10(1)(g)(iii) is not as well drafted as it might be, but importantly it provides for an exemption in a way which is different to that adopted in respect of the other exemptions given in para (g).The other subparagraphs provide exemptions in respect of land owned by or in trust for any person or society and used or occupied by that person or society solely as a site for an identified purpose, as, for example, a place of worship, a public cemetery, a public garden, a fire brigade, and so on. Subparagraph (iii) is not in this form - the exemption which it provides is not directed to a purpose, but to ownership and occupation - ‘a building owned and solely occupied by a society, club or association not carried on for pecuniary profit.’ The building must be one which can properly be described as owned and solely occupied by (for relevant purposes) a club not carried on for pecuniary profit, but provided it can be so described then, in my opinion, it falls within the exemption.”

1. In our view the issue in the present case, whether there must in fact be a building owned and

   occupied by the Club, is to be answered in favour of the appellants because of the element of futurity in the

   expression “as a site for.” If there were the further question of whether the building need be owned and

   occupied by the Club for club purposes, then the decision in Gosford RSL Club might be relevant. We

   say it might become relevant because the provision considered there, s 10(1)(g) of the New South Wales

   Act, was different from the Queensland subparagraph (i) in that it contained the word “solely” in

   subparagraph (iii) as well as in the introductory words. That may explain the Court’s focus on the

   occupation of the building. The question that arises in the present case would not seem to have been in the

   Court’s contemplation, that is to say, whether the sub-section may be satisfied by ownership of the land as

   the site for a building before erection of the building. The Court was concerned with an existing building and

   naturally focussed upon whether sub-para. (iii) of the section was satisfied, rather than upon the wider

   question that arises in the present case. By contrast, Gibbs J. in Joyce’s case (above) considered the wider

   question that arises here. We do not think that there is any necessary inconsistency between Gibbs J.’s view
   and that of Hope J.A. in the Gosford RSL case, but if there is we prefer the former view.

2. Neither party challenged the Commissioner’s longstanding practice of granting a partial exemption

   in respect of a parcel of land by apportioning the valuation, a practice which is consistent with the decisions

   in Joyce and Pro-Campo Limited v Commissioner of Land Tax (NSW) (1981) 81 ATC 4270.

3. In the circumstances the question asked is answered as follows:-

   Lots 1, 2 and 3 were exempt from land tax under the Land Tax Act 1915 as at midnight 30 June 1995 on the basis that such land being ‘land owned by or in trust for’ Tattersall’s Club was ‘used or occupied by’ the Club ‘solely as a site for ....a building owned and occupied by’ the Club within the meaning of s 13(1)(vii)(c) (now s 13(1)(g)(i)) of the Land Tax Act 1915 .

4. The respondent is ordered to pay the appellants’ costs of and incidental to the appeal to be taxed.