Perpetual Corporate Trust Limited v Commissioner of State Taxation - [2022] SASC 7

Supreme Court of South Australia

(Civil)

PERPETUAL CORPORATE TRUST LIMITED v COMMISSIONER OF STATE TAXATION

[2022] SASC 7

Judgment of the Honourable Auxiliary Justice Bochner

25 January 2022

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - OTHER MATTERS

TAXES AND DUTIES - STAMP DUTIES

TAXES AND DUTIES - STAMP DUTIES - EXEMPTIONS - CONVEYANCE OR TRANSFER ON SALE OF REAL PROPERTY

Stamp Duties Act 1923 (SA) s 72(8), s 105A(2); Taxation Administration Act 1996 (SA); Valuation of Land Act 1971 (SA); A New Tax System (Goods and Services Tax) Act 1999 (Cth); Development Act 1993 (SA); Residential Tenancies Act 1995 (SA); Residential Tenancies and Rooming Accommodation Act 2008 (Qld), referred to.
Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue of the State of New South Wales [2011] HCA 41; Kyren Nominees v Commissioner of State Taxation (2013) 116 SASR 153; Marana Holdings Pty Ltd v Federal Commissioner of Taxation (2004) 141 FCR 299; South Steyne Hotel Pty Ltd v Federal Commissioner of Taxation (2009) 71 ATR 228; ECC Southbank Pty Ltd v Commissioner of Taxation (2012) 205 FCR 505; Corporation of the City of Marion v WC Projects Pty Ltd [2017] SASC 74; Burt v Federal Commissioner of Taxation (1912) 15 CLR 469; RSAYS Ltd v Commissioner of State Taxation (2007) 100 SASR 448; State Transport Authority v Corporation of the City of Adelaide (1980) 24 SASR 481; Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation (1993) 44 FCR 450; Commissioner of Taxation (Cth) v Bargwanna (2012) 244 CLR 655; GrainCorp Operations Ltd v Liverpool Plains Shire Council [2013] NSWCA 171; North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd (1990) 21 NSWLR 532; City of Swan v West Australian Shalom Group Inc [2017] WASC 217, considered.

PERPETUAL CORPORATE TRUST LIMITED v COMMISSIONER OF STATE TAXATION

[2022] SASC 7

CIVIL

The applicant appeals a decision of the Commissioner of State Taxation (“the Commissioner”), in respect of the assessment of stamp duty and foreign ownership surcharge following the transfer of a property situated at 231 Waymouth Street, Adelaide (“the property”).

The relevant legislation

This appeal calls into question the interpretation and operation of s 105A of the Stamp Duties Act 1923 (SA) (“the Act”), in respect of liability to stamp duty, and s 72(8), in respect of liability to the foreign ownership surcharge. Section 72(8) and s 105A(2) are in the same terms, and set out what, in this context, is to be regarded as land used for residential purposes. Section 105A provides:
105A—Abolition of duty on designated real property transfers
(1)        In this section—
qualifying land means land that is being used for any purpose other than—
(a)    land that is taken to be used for residential purposes in accordance with subsection (2)(a), other than land of a classification excluded by the regulations; or
(b)   land that is taken to be used for primary production in accordance with subsection (2)(b), other than land of a classification excluded by the regulations.
(2)        For the purposes of the definition of qualifying land—
(a)      land will be taken to be used for residential purposes if—
(i)     the Commissioner, after taking into account information provided by the Valuer‑General, determines that it is being predominantly used for that purpose; or
(ii)    the Commissioner, after taking into account information provided by the Valuer‑General, determines that although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for residential purposes due to improvements that are residential in character having been made to the land; or
(iii) the Commissioner, after taking into account information provided by the Valuer‑General, determines that the land is vacant, or vacant with only minor improvements, that the land is within a zone established by a Development Plan under the Development Act 1993 that envisages the use, or potential use, of the land as residential, and that the land should be taken to be used for residential purposes due to that zoning (subject to the qualification that if the zoning of the land indicates that the land could, in a manner consistent with the Development Plan, be used for some other purpose (other than for primary production) then the vacant land will not be taken to be used for residential purposes); and
(b)      land will be taken to be used for primary production if—
(i)     the Commissioner, after taking into account information provided by the Valuer‑General, determines that it is being predominantly used for primary production purposes; or
(ii)    the Commissioner, after taking into account information provided by the Valuer‑General, determines that although the land is not being used at the relevant time the land should be taken to be used for primary production purposes due to a classification that has been assigned to the land by the Valuer‑General.
(3) Subject to subsection (4), this section applies to the conveyance or transfer of an interest in qualifying land executed on or after 1 July 2018.
(4) This section does not apply to a conveyance or transfer of an interest that arises from a contract of sale or other transaction entered into before 1 July 2018 (and the duty chargeable in relation to such a conveyance or transfer will be calculated according to the rates in force as at the date on which the contract of sale or other transaction was entered into as if the conveyance or transfer had been executed on that date and, if relevant, according to the provisions of section 71DC).
(5) No liability to duty arises in relation to a conveyance or transfer of property to which this section applies (to the extent to which it provides for the conveyance or transfer of an interest in qualifying land).
(6) Despite section 16, the duty chargeable in relation to a conveyance or transfer to which this section applies executed before 1 July 2018 but produced to the Commissioner for the purposes of being stamped on or after that date will be calculated according to the rates in force as at the date on which the conveyance or transfer was executed (and, if relevant, according to the provisions of section 71DC).

Background

In September 2016, a developer obtained final approval from the Development Assessment Commission (“the DAC”) to build a 17-level purpose‑built student accommodation facility on the property. Following its completion, the building was leased to Excel Leasing Pty Ltd, an operator of purpose-built student accommodation facilities, which operated the business from 1 February 2019 until 30 September 2019.
On 30 September 2019, the applicant, as trustee of the Scape Australia (Waymouth) Trust acquired the property; the lease and all business agreements in respect of the business were assigned to Scape Waymouth Operator Pty Ltd by the sale agreement. Since that date, Scape Waymouth Operator Pty Ltd has operated the purpose-built student accommodation facility at the property. The facility is operated under the Atira brand. For convenience, I will refer to the operator of the facility as Atira.
Following the transfer of the property, the applicant received a stamp duty notice of assessment, dated 17 October 2019, in the sum of $6,868,830, which included a foreign ownership surcharge in the sum of $3,850,000. By way of notice of objection dated 18 November 2019, the applicant objected to the assessment, on the basis that the property is not used predominantly for residential purposes, as a result of which it qualified for an exemption from both stamp duty and the foreign ownership surcharge, pursuant to s 105A of the Act.
On 7 June 2020, the applicant received the Treasurer’s objection decision. The Treasurer affirmed the decision of the Commissioner. The Treasurer said, inter alia:
Residential land used for the commercial purpose of providing long-term accommodation does not constitute qualifying land and is ineligible for a stamp duty reduction (and can therefore be subject to the FOS, if applicable). Examples include retirement villages, aged care facilities, student accommodation and other residential premises where the accommodation can best be described as ‘long-term accommodation’.
In contrast and as outlined in RevenueSA’s Information Circular No: 103, “Stamp Duty on Conveyance or Transfers of Non-residential, Non-primary Production Real Property (Qualifying Land)”…, the provision of short-term accommodation on a commercial basis in hostels, hotels, motels, serviced apartments and other short-term unit accommodation is considered to be qualifying land for stamp duty purposes, and is therefore eligible for a stamp duty reduction (and exclusion from the FOS).
Thus, the Treasurer determined that the property was used for residential purposes, rather than for commercial purposes, as a result of which it was subject to both stamp duty and the foreign ownership surcharge. This is the decision to which this appeal relates.

The nature of the appeal

The right to appeal an objection decision is contained in Part 10, Division 2 of the Taxation Administration Act 1996 (SA) (“the TAA”). Section 92 of the TAA provides:
92—Right of appeal
A person who has made an objection may appeal to the Supreme Court if—
(a) the person is dissatisfied with the Minister's determination of the objection; or
(b) 90 days (not including any period of suspension under section 88) have passed since the objection was lodged with the Minister and the Minister has not determined the objection and served notice of the determination on the person.
The way in which the appeal is to be conducted, and the power of the Supreme Court, on appeal, are set out in ss 96 – 98:
96—Grounds of appeal
(1) The appellant's and respondent's cases on an appeal are not limited to the grounds of the objection or the reasons for the determination of the objection or the facts on which the determination was made.
(2) However, if the objection was to a reassessment, any limitation of the matters to which the objection could relate under Division 1 applies also to the appeal.
97—Onus on appeal
On an appeal, the appellant has the onus of proving the appellant's case.
98—Determination of appeal
On an appeal, the Supreme Court may do one or more of the following:
(a)      confirm or revoke the assessment or decision to which the appeal relates;
(b)   make an assessment or decision in place of the assessment or decision to which the appeal relates;
(c)    make an order for payment to the Commissioner of any amount of tax that is assessed as being payable but has not been paid;
(d)      make any further order as to costs or otherwise as it thinks just.
It is apparent that this appeal is in the nature of a rehearing de novo. In Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue of the State of New South Wales, the High Court, when considering legislation in similar terms to the TAA, made it clear that the appellant is not required to show error on the part of the decision maker. The appeal is brought in the Court’s original jurisdiction; thus, the Court stands in the shoes of the Commissioner. As Kourakis CJ said, in Kyren Nominees v Commissioner of State Taxation:
It is a necessary consequence of s 96(1) and s 98(b) of the Taxation Administration Act 1996 (SA) that the appeal is by way of rehearing. The rehearing is a rehearing de novo because the cases on appeal are not limited to the “facts on which the determination was made”. This Court on appeal therefore stands in the shoes of the Commissioner. It follows that the question for the Court is whether it holds the opinion that the purpose, or one of the purposes, of the conveyances was to reduce land tax.

The applicant’s position

The crux of the applicant’s position is that the property is not predominantly used for residential purposes, because it operates a business of providing accommodation of a short-term and transitory nature. “Residential” connotes permanent, or at the very least, extended occupation; as a result, accommodation of the sort offered at the property does not fall within the scope of the use of the word in s 105A. The applicant says that the accommodation offered at the property is more akin to that offered at a hotel, motel or hostel, rather than at a retirement village or aged care home, the former being regarded by the Commissioner for the purpose of s105A as being commercial rather than residential and the latter being regarded as residential.
In determining whether the property is used for a residential purpose, the applicant says that the Court is entitled to take into consideration information which is in the possession of the Valuer-General, or readily ascertainable by the Valuer-General, including the zoning of the land, the relevant land use code assigned to the land, the relevant development plan, including its objectives and controls, and valuations prepared under the Valuation of Land Act 1971 (SA).
The applicant contends that the terms of the Commissioner’s Information Circular 103 (IC103), dated 7 December 2018, are relevant when exercising the functions of the Commissioner. In discussing the operation of s 105A, IC103 says, in part:
Land will be taken to be used for residential purposes where the Commissioner, after taking into account information provided by the Valuer-General, determines that:
• it is being predominantly used for that purpose;
• although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for residential purposes due to improvements that are residential in character having been made to the land; or
• the land is vacant, or vacant with only minor improvements, and the land is within a zone established by a Development Plan under the Development Act 1993 that does not envisage the use, or potential use, of the land as non-residential and non-primary production.
A further exception is in relation to land which although coded as residential by the Valuer-General will nevertheless be considered by the Commissioner to be commercial in nature.
This treatment will be consistent with the Local Government zoning of the land. Land uses that fall into this category are Hostels, Hotels, Motels, Serviced Apartments and short-term unit accommodation.
The applicant contends that this is consistent with the ordinary and natural meaning of “residential purposes”. It submits that, given the similarity in character of the property to hostels, hotels, motels, serviced apartments and short-term unit accommodation, it should, likewise, be considered that the property is used for commercial rather than residential purposes. In determining that the property was akin to a retirement village or aged care facility, the Commissioner was mistaken.
The applicant submits that an examination of the dictionary definitions of “residence” and “residential” makes it clear that these words encapsulate a notion of permanence. The applicant relies on the decision of Marana Holdings Pty Ltd v Federal Commissioner of Taxation (“Marana”), where the Full Court of the Federal Court examined the meaning of the term “residential premises” in the context of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (“GST Act”). The Court said:
[19] The appellants submit that these meanings should not be determined by reference to dictionaries alone, and that other sections of the GST Act cast light upon the intended meanings. We will first discuss the words “residence” and “residential” separately, having regard to the Oxford English Dictionary (OED), the Shorter Oxford English Dictionary (Shorter Oxford) and the Macquarie Dictionary (revised 3rd ed) (Macquarie). We will then consider the expression “residential premises”. To avoid unnecessary complication in considering the dictionary references, we will dispense with quotation marks and other unhelpful punctuation.
Residence
[20] In commencing this discussion we will first consider the word “reside”. OED defines the word to mean:
• To settle; to take up one’s abode or station.
• To dwell permanently or for a considerable time, to have one’s settled or usual abode, to live, in or at a particular place.
• Of persons having some special status or position. Hence to live (at a place) for the discharge of official duties; to be “in residence”.
[21] As to the word “residence” OED offers the following meanings:
• To have one’s usual dwelling place or abode; to reside.
• To take-up one’s residence, to establish oneself; to settle.
• So to have (etc) residence.
• The circumstance or fact of having one’s permanent or usual abode in or at a certain place.
• The fact of residing or being resident.
• The fact of living or staying regularly at or in some place for the discharge of special duties, or to comply with some regulation; also, the period during which such stay is required of one.
• The place where one resides one’s dwelling place; the abode of a person
(especially one of some rank or distinction).
• A dwelling, abode, house, especially one of a superior kind; a mansion.
[22] Shorter Oxford defines the term “reside” relevantly as:
• Settle; take up one’s station.
• Of a person holding an official position: occupy a specified place for the performance of official duties; be in residence.
• Dwell permanently or for a considerable time, have one’s regular home in or at a particular place.
[23] The expression “residence” is said to mean:
• The circumstance or fact of having one’s permanent or usual abode in or at a certain place; the fact of residing or being resident.
• The fact of living or staying regularly at or in a specified place for the performance of official duties or for work; a period of time required for this.
• The action of remaining in a place for a limited period of time; lingering; procrastination (said to be obsolete).
• The place where a person resides; the abode of a person.
• A dwelling, a house, especially an impressive, official or superior one; a mansion.
[24] Macquarie defines the word “reside” as:
• To dwell permanently or for a considerable time; have one’s abode for a time.
[25] Of the word “residence” it says:
• The place, especially the house, in which one resides; dwelling place; dwelling.
• A large house.
• Living or staying in a place of official or other duty.
[26] Clearly, both “reside” and “residence” have the connotation of permanent, or at least long-term commitment to dwelling in a particular place. We note also the usage which associates dwelling in a particular place with the performance of duties at that place.
Residential
[27] Of this word OED says:
• Serving or used as a residence; in which one resides.
• Adapted or suitable for the residence of those belonging to the better class; characterised by houses of a superior kind.
• Connected with, pertaining or relating to, residence or residences (in general or specific sense).
• A residential hotel (as a noun, that is, a “residential”).
[28] OED refers to Bradshaw’s Railway Guide (April 1910) where a hotel was described as “[f]irst-class family and residential”. The word “residential” was obviously meant to suggest something other than ordinary hotel accommodation. OED also refers to the expression “[a]n untidy boarding-house in Torrington Square, Bloomsbury, which called itself a Residential Hotel” (W J Locke, Moordius & Co); and to the statement that “[t]he Inns of Court ... operated like residential clubs or hotels”: J Carey, John Donne. These usages suggest that the word “residential” implies a special kind of accommodation, probably long-term.
[29] Shorter Oxford gives the following meanings:
• Serving or used as a residence.
• Suitable for or characterised by private houses.
• Connected with, entailing, or based on residence.
[30] Macquarie gives the following meanings:
• Of or relating to residence or residences.
• Adapted or used for residence; a residential district.
• Of a hotel etc, catering for guests who stay permanently or for extended periods.
[31] All three references stress the relationship between the word “residential” and the word “residence”, suggesting the aspect of permanent or long-term occupation to which we have previously referred. They recognise use of the expression in connection with hotels but generally suggest that such usage describes a hotel that caters for long-term residents. We accept that it is not uncommon to speak of long-term residents in a hotel, but when one speaks of persons who stay for shorter terms, the more common usage is to describe them as “guests”.
Residential premises
[32] The term is defined in s 195-1 of the GST Act as:
• land or a building which is either occupied as a residence; or
• is intended to be occupied, and is capable of being occupied as a residence.
The definition expressly includes a “floating home”, which expression is defined in s 195‑1 to mean:
... a structure that is composed of a floating platform and a building designed to be occupied as a residence that is permanently affixed to the platform, but does not include any structure that has means of, or is capable of being readily adapted for, self-propulsion.
[33] Obviously, such a structure would not normally be land and may or may not be a building. As we have said, the definition of the term “residential premises” in s 195-1 depends to some extent upon the meaning of the term “residence”. We consider that the latter term usually connotes permanent, or at least extended occupation. We are inclined to attribute an analogous meaning to the expression “residential premises” unless the context of the GST Act or extrinsic evidence suggests otherwise. We turn to those matters.

The applicant notes that the Federal Court declined to follow a number of English authorities which held that “residential accommodation” encompassed accommodation where a person could sleep overnight, regardless of the duration of the stay. Thus, according to these authorities, a place would be regarded as residential accommodation, even though the anticipated stay of the occupant was no more than one night. The Federal Court rejected this construction, on the basis that common usage of the words “residential” and “residence” connotes long term occupation. Following the delivery of Marana decision, the relevant provision of the the GST Act was amended to include the words “(regardless of the term of occupation or intended occupation)”, in order to address the definitional issue raised by the decision.
The ordinary meaning of “residence” and “residential” was confirmed by Stone J in the later decision of the Federal Court in South Steyne Hotel Pty Ltd v Federal Commissioner of Taxation (“South Steyne Hotel”), a case which dealt with the same provision of the GST Act, but after it had been amended in response to Marana.
The applicant also refers to the dictionary definition of “hostel”, and the conclusion reached by the Federal Court in respect of student accommodation in ECC Southbank Pty Ltd v Commissioner of Taxation. In that case, the Court said:
It is true that meals are not provided to residents or customers of the Urbanest premises as they might usually be in the case of a more traditional hostel. However, that does not mean that the Urbanest premises may not be fairly described as a hostel or, at least, as being similar to a hostel. In my opinion, if the Urbanest premises is not a hostel, it is very similar to a hostel.
Similarly, the applicant relies on the case of the Corporation of the City of Marion v WC Projects Pty Ltd. In that case, Blue J dealt with an appeal from a decision granting approval to build purpose-built student accommodation within a council area. He said:
…the reference in the Development Plan to “student accommodation” is a reference to special purpose accommodation in the nature of a boarding house rather than to a residential flat building that happens to be occupied by students.
In relation to the construction of s 105A of the Act, the applicant submits that the approach to taxing legislation, outlined in Burt v Federal Commissioner of Taxation, should be applied. In that case, Barton J said:
The several deductions allowed by sec. 30 are exceptions to the general rule of taxation prescribed by the Act. Where the construction of such exceptions is seriously in doubt, the interpretation should favour those whose claims are based upon the exceptions.
It also relies on the case of RSAYS Ltd v Commissioner of State Taxation, where Layton J discussed the decision in Burt, as well as a different approach set out by Wells J in State Transport Authority v Corporation of the City of Adelaide. She then described a “middle ground”, set out by French J in Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation and said:
On the other hand, French J in DiethelmManufacturing Pty Ltd v Federal Commissioner of Taxation, expressed a middle ground, stating that the interpretation of an exemption in a taxing act will depend upon the perceived purpose of the exemption:
As a general proposition the taxpayer claiming the benefit of an exemption from the imposition of tax has the burden of proving the facts necessary to fall within the exemption … On the other hand an exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is not to be given a narrow application. [Emphasis added, footnote omitted]
French J’s approach has considerable attraction and was specifically endorsed by Hill J in TAB v Federal Commissioner of Taxation, and is similar to the approach taken by Kirby J in Federal Commissioner of Taxation v Murry. In my view, this approach recognises that tax acts vary in the manner in which exemptions are expressed and the purpose which they serve in the overall regime of taxation. I agree that whilst the taxpayer bears the burden of proving that the exemption applies, in deciding the scope of the exemption, it is necessary for the court to have regard to the perceived purpose of the exemption in order to decide whether it should be given a liberal interpretation.
The applicant endorses this approach and says that it is supported by the context in which the stamp duty exemption in s 105A was introduced into the Act. In this regard, the applicant relies on the Budget Speech in which the Treasurer announced the proposed abolition of stamp duty on non-residential land transfers, where he said:
Our aim is to create an efficient tax system that rewards effort, minimises the harm to the economy and incentivises investment decision making by businesses by removing destructive transactional taxes.
The second reading speech further emphasizes the purpose behind the abolition of stamp duty in respect of transfers of non-residential land:
The changes that the Government is making in this bill will remove significant cost barriers to business investment and expansion, encourage the creation of new businesses in the State, and provide lasting improvement to the South Australian economy.
These changes will reduce the harmful impact inefficient taxes have on the economy and are consistent with the views expressed by South Australians during the State Tax Review.
The applicant contends that it is clear from this material that the Parliament sought to abolish stamp duty on the transfer of land which is used primarily for commercial or business purposes. Thus, it can be inferred that the Parliament intended to adopt the meaning of “residential” established by earlier authorities, so that a use “predominantly for residential purposes” was a use that required permanent or at least extended occupation. The respondent accepts that hostels, hotels, motels and serviced apartments do not fall into the class of properties used predominantly for residential purposes; the applicant says that the property should be treated in the same way as this class.
The applicant submits that an examination of the zoning of the land and the terms of the relevant Development Plan will lead to the conclusion that the property is not used predominantly for residential purposes. The planning report, prepared for the purpose of obtaining development approval, addresses the requirements of the Capital City Zone of the Adelaide (City) Council Development Plan, in which the property is situated. The report submits that the development meets the requirements of a number of different provisions of the Development Plan, including fulfilling the objectives (amongst others) of offering a mix of student accommodation with retail premises (Objective 2), and “high‑quality student accommodation that creates an affordable, safe, healthy and comfortable living environment” (Objective 9). In addressing this latter objective, and the Principles of Development Control (Principles) that underpin it, the report states:
The fundamental land use for the building is for the purpose of providing high quality Student Accommodation. Blue Sky are experienced owners, developers and managers of student accommodation across Australia and understand the needs and services associated with the successful delivery of accommodation for their residents.
…
Every student room has access to light via a window. As an integrated student accommodation facility, the proposed development also includes a range of indoor and outdoor communal areas to meet the social, educational and cultural needs of the student residents. These facilities are exclusive to the occupants of the building and enhance the comfortable living environment.
The applicant submits that the Principles dealing with student accommodation reflect a compromise between smaller and more affordable living spaces, and the minimum standards required for accommodation generally. The Principles allow “reduced internal floor areas, car parking, storage areas and/or areas of private open space” against a trade-off of shared or common facilities, such as cooking, laundry and communal open space, windows and natural light in all living rooms, and bedrooms “of a suitable size to accommodate a single bed, book shelves, a desk and workspace and a cupboard/wardrobe.” The applicant relies on the evidence of Gregory Vincent, a planner whose company assisted in preparing the Development Application for the property. He notes that Objective 9, dealing with student accommodation, and its underlying Principles do not contemplate long-term accommodation for students, nor does the Development Plan contemplate any other form of student accommodation other than that set out in Objective 9.
The applicant notes that the property is zoned by the Adelaide City Council as part of the Capital City Zone. The Land Use Code assigned to the property by the Valuer-General is “1720 – College and University residential accommodation”. The Land Use Code 1720 is given a Local Government Code of “9”, which comprises “any other use of land not referred to in another category”. It should be noted that, in the context of Local Government Codes, residential properties are given the Local Government Code “1”, and are described:
Residential comprising the use of land for a detached dwelling, group dwelling, multiple dwelling, residential flat building, row dwelling or semi-detached dwelling within the meaning of the Development Regulations.
Thus, for the purpose of assigning a Local Government Code, the property is not regarded as residential.
The applicant submits that an examination of the living spaces available at the property make it clear that long term accommodation is not contemplated. The private living spaces are small, and significantly smaller than those required in residential developments. The individual apartments do not have separate Certificates of Title.
Students are able to book accommodation at the property through education agents, accommodation websites, or direct through the property. Students are able to select their dates of stay and are charged either on a daily or weekly basis, depending on the length of the stay. The rates are reviewed on a weekly basis and are adjusted depending on vacancy and demand. Gas, water, electricity and internet use are not charged to the student separately; the daily or weekly rate incorporates all such charges.
The facility is operated by a team on site. The on-site team is supported by central management from Atira’s head office. The property’s reception desk is staffed every day, and a staff member is available 24 hours per day, 7 days per week. The property provides, through its operators, printing and scanning for students, airport shuttles, compulsory orientation sessions and group social activities. It houses a gym, library, games room, lounge, cinema, communal study spaces and meeting rooms. Senior residential assistants are employed to provide pastoral care and to deal with incidents and concerns raised by students. Students must comply with house rules, and there are curfews for visitors and students under 18.
Lauren Storey, the General Manager – Operations for Atira, gave oral evidence to supplement her affidavit of evidence (FDN 8, Court Book Document No 6). Ms Storey has been employed by Atira in a number of roles since 2018, prior to which she worked in a similar role with another organization which provides purpose-built student accommodation. She has previously worked for a number of years as a duty manager at a five-star hotel in Sydney, where she was responsible for the front office team and the day-to-day operations of the hotel. She gave evidence in relation to the activities at the property, including the weekly pricing adjustments already referred to. In particular, she gave evidence in respect of occupancy rates, student demographics and average length of stay. She also gave evidence of the booking system used by Atira.
Ms Storey’s evidence was authoritative and convincing. I accept that she is appropriately qualified to give the evidence that she gave, and I do not consider that her credibility or her authority were challenged. I accept her evidence.
Ms Storey’s evidence was that the booking system used by Atira is similar to a hotel booking system. While there are a number of different ways in which a student can book accommodation at the property, accommodation was typically booked through a third-party agent based in the student’s home country. These agents are commonly referred to as agents, consultants, education agents, aggregators and student accommodation websites. Bookings are managed through a bookings platform called StarRez, which manages all aspects of a booking, including personal information, room type, check in and out information, educational institution information, room allocation and billing information.
Bookings are typically based on a university semester, with a booking for one semester usually being for up to 26 weeks, and for 2 semesters, up to 48 weeks. Generally, students prefer to book for shorter periods of six months or less, rather than for a full academic year. Atira seeks to incentivise longer stays, by having a sliding scale of room rates based on length of stay. In addition, Atira offers incentives for students to renew their booking at the end of the booking period. Despite these incentives, most students do not intend, and do not stay at the property long term. It is not uncommon for students to leave before their scheduled end of stay.
At the end of their stay, most students either return home or move to the private rental market.
In 2018, 89% of students stayed for fewer than 52 weeks (two semesters), and 72% stayed for fewer than 35 weeks. 14% of students stayed for fewer than 4 weeks. 31% stayed for between 5 and 20 weeks. 18% stayed for between 21 and 26 weeks. 37% of students stayed for between 27 and 52 weeks. Thus, 63% of students stay for 26 weeks (or one semester) or fewer. The average length of stay was 175 days or 25 weeks, and the median stay was 150 days or 21 weeks. 65% of students did not extend their stay beyond the initial booking period.
In 2019, 86% of students stayed for fewer than 52 weeks and 58% stayed for fewer than 35 weeks. 12% of students stayed for fewer than 4 weeks, 19% stayed for between 5 and 20 weeks, and 18% stayed for between 21 and 26 weeks. Thus, 49% of students stayed for 26 weeks or fewer. The average length of stay was 206.77 days (29 weeks) and the median stay was 184 days (26 weeks). 83% of students did not extend their stay beyond the initial booking period.
Across both years, the majority of students was aged 25 years or younger. In 2018, 94% of students were from overseas. In 2019, 95% of students were from overseas, mainly from China, Malaysia and India.
Atira also offers short stay hotel style accommodation to the general public. Stays of up to 28 days are regarded as short stays and are charged on a daily basis. Stays of longer than 28 days are charged on a weekly basis. For stays of longer than 28 days, students sign a residential tenancies agreement, although the terms differ somewhat, depending on whether the stay is longer or shorter than 90 days. Bonds are not taken for arrangements of less than 90 days.
Students are required to clean their own rooms. All of the rooms have cooking facilities, with the larger rooms having more comprehensive facilities. Students are required to take out their own rubbish. Students staying for periods longer than 28 days are expected to provide their own bed linen, towels and cooking utensils. Students are called either residents or guests.
Atira attempts to create a sense of community for the students. Themed food nights, cooking classes, social activities and special activities during exam periods are offered it an attempt to create something similar to a home environment. A peer-to-peer support network is facilitated by Atira. As the majority of students are from overseas, Atira attempts to provide a supportive community for them while they are away from home.
Resident assistants are employed to deliver Atira’s engagement program, and to be the first point of contact for students who need assistance, or where there is conflict between students.
Mr Vincent also gave oral evidence. Mr Vincent was a credible witness who is clearly qualified to give the evidence that he gave. I accept his evidence. As with Ms Storey, I do not consider that Mr Vincent’s evidence was seriously challenged.
In his oral evidence, Mr Vincent discussed the objectives set out in the Adelaide (City) Development Plan (the Development Plan). In particular, he gave evidence about the difference between Objective 22 and Objective 9.
In respect of Objective 22, Mr Vincent’s evidence is that it deals with medium to high scale residential and serviced apartment developments, including student accommodation. While Objective 22 includes student accommodation, Objective 9, which deals specifically with student accommodation, recognises that student accommodation, as a separate and distinct land use can be distinct in-built form and functionality, from other high scale residential developments. The Principles of Development Control which relate to Objective 9 allow specific features of student accommodation that can be approved in accordance with the Development Plan. The Principles provide a discretion to allow lesser amenity and floor space, private open space and storage space, as compared to other types of residential development. Where the Principles relating to Objective 9 refer to reduced internal floor areas, car parking and storage space, and private open space, the areas that are referenced are those that are found in the Principles under Objective 22. For example, Principle 70 refers to the minimum internal floor areas of studio, 1 bedroom, 2 bedroom and 3 bedroom apartments; Principle 10 under Objective 9 allows for smaller areas for student accommodation. Mr Vincent’s evidence is that Principle 10 specifically acknowledges that student accommodation is for a different demographic than other residential developments, which may have different needs and requirements. His evidence is that the development would not have obtained development approval if it was for general residential use; approval was obtained on the basis that it was specifically for short-term occupation by students, and therefore came under Objective 9 of the Development Plan. Mr Vincent’s conclusion is that:
From a planning perspective I believe that [student accommodation] would be a short-term accommodation on the basis that the type and nature of the amenity of the rooms being provided expressly contemplated as being, for want of a better phrase, providing a lesser amenity than what would normally be considered appropriate in higher density residential development. Under those circumstances being able to tolerate a lesser amenity for a particular period of time might be acceptable compared to if you were living there for a longer term.
The applicant says that the totality of the evidence leads to the conclusion that the property is not predominantly for residential use, but for commercial use. It is akin to hostels, hotels, motels and serviced apartments, which the respondent acknowledges, in IC103, fall within the description of qualifying land in s 105A of the Act. No weight can be place on the fact that the property is given the Land Use Code 1720; while there is no doubt that this is a residential code, hostels, hotels and motels also receive residential codes. The Local Government Code supports the conclusion that the property is not residential, as the Local Government Code “9” is designated “other”, rather than “residential”.
The evidence of Ms Storey and Mr Vincent make it clear that the property is not used for residential purposes, within the ordinary, dictionary definition of the word “residential”. The development approval obtained was on the basis that the accommodation that was to be offered was short-term and for a specific class of residents, namely students, who have different needs to other occupants of high‑density accommodation. The students who reside at the property can properly be regarded as short-term occupants; the majority stays for no more than one university semester, and frequently departs the property to find accommodation in the ordinary rental market. The evidence supports a finding that the property is a purpose-built student accommodation facility, to provide accommodation on a short-term and transitory basis. Consequently, it satisfies the description of qualifying land in s 105A of the Act.

The applicant says that, to adopt a broader definition of “residential” than that identified by the High Court in Marana, would lead to properties such as the property falling outside the ambit of s 105A, when they are clearly the type of properties that the Act sought to target. They are clearly commercial in character, and the Second Reading Speech and Budget Speech where the amendments to the Act were introduced make it clear that transactions involving commercial properties are the intended beneficiaries of the amending legislation.

The respondent’s position

It is the position of the respondent that the property is used predominantly for residential purposes, and so is not qualifying land within the meaning of s 105A of the Act. Alternatively, the respondent argues that the improvements on the land are residential in character, thus bringing it outside the description of qualifying land. As a result, the transfer of the property was subject to both stamp duty and foreign ownership surcharge.
In construing the Act, the respondent relies on the case of Commissioner of Taxation (Cth) v Bargwanna (“Bargwanna”), where the High Court, considering taxing legislation said:
The respondents submitted that the exemption provisions of Div 50 of Pt 2-15 of the Act with which this appeal is concerned should be interpreted “generously”, that is to say to favour the interests of those claiming exemption. This was said to be so because “[c]harity [is] involved”. The phrase is that of Barwick CJ in Ryland v Federal Commissioner of Taxation. The general law favours the advancement of charitable purposes in various respects so as, for example, to permit perpetual duration and to provide for cy-pres schemes. But this state of the general law provides no ground for some special rule of construction of the revenue law.
Thus, there is no call to construe s 105A generously in favour of the applicant. She says that the applicant is in error to rely on Burt, and that its reliance on RSAYS is misconceived. The Commissioner says that, rather than supporting the beneficial approach advocated by the Court in Burt, Layton J in RSAYS relied on a “middle ground” set out by French J in Diethelm and quoted at [21] hereof. As a result, the usual approach to statutory construction should be adopted, and:
Words or phrases not accorded a special meaning should be construed according to popular usage.
Further, the respondent says that the appropriate task is to construe the word “residential” and then determine whether the property is used for a purpose which comes within that construction; it is not appropriate to seek to fit the use of the property into the perceived purpose behind the introduction of s 105A. As to the use of extrinsic material in construing “residential”, the respondent says that such material amounts to a relevant consideration but does not otherwise derogate from the task before the Court. The task is not informed by the content of IC103, the Valuer General’s Land Use Codes, or any other extrinsic material, which have no statutory force and offer no more than administrative assistance.
In determining the meaning of the word “residential”, the Commissioner relies on the statement of Ward JA, in GrainCorp Operations Ltd v Liverpool Plains Shire Council, where she said:
What can be drawn from the above is that the appellation "residential" may in some contexts connote a degree of permanence but can also connote an habitual or usual abode, or even a place where one lives for a time or while performing a particular purpose or function, in which respect it would not be inapt to refer to the occupation of workers during the period that they are fulfilling work functions at the mines.
In that case, the Court found that an accommodation facility, designed to accommodate fly in fly out workers, was properly characterised as residential, despite the transient nature of its proposed occupants.
The Commissioner submits that there are various “subsets” of “residential use”, which involve greater or lesser degrees of permanency. In this regard, she relies on North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd, (“Sydney Serviced Apartments”) where the Mahoney J said:
The definition of ‘residential building’ requires nothing more than use for human habitation. However, it includes within its terms descriptions of buildings or usages involving different kinds of human habitation. The kind of human habitation required to satisfy each of these will vary according to the nature of each of them and will, inter alia, require different degrees of permanency. Thus, a residential hotel may have a smaller degree of permanence than a residential club or hostel. It is, I think, not inconsistent with the thrust of the definition that there should be within it a kind or category of residential building which envisages a significant degree of permanency or occupancy. The description of a flat as a ‘dwelling’ or ‘domicile’ carries with it the notion of that degree of permanency.
In reliance on these decisions, the Commissioner says that it cannot be accepted that use of the adjective “residential” implies permanent or extended occupation. The Commissioner also contends that reliance on Marana is misconceived, as, in that case, the Court was dealing with the meaning of “residential premises”, in legislation which defined the term.
It is the Commissioner’s position that “residential” and “residence” are broad concepts that encompass permanent or settled abodes, to temporary or transitory places to stay. Further, she says that a person can have more than one residence at any one time. Whether a use is “residential” will depend on the statutory context and on the circumstances of the case.
The respondent submits that the fact that the individual apartments within the property have smaller floor areas, and less private open space, car parking and storage than other types of accommodation does not prevent the property from being residential in use. In this regard, she relies on Blue J in WC Projects, where he said:
If the premises are fit for occupation by students, it is not evident why they would also be fit for occupation by some other categories of other tenants who may be expected to have limited needs or limited means. Considered as a built form, there is nothing about the proposed building that makes if fit for students and unfit for other members of the population.
It is the respondent’s position that a review of the authorities demonstrates that “residential” is a broad concept, and need not refer to a person’s sole residence, or their usual or settled abode. Consequently, the respondent submits that the property is properly characterised as residential in nature. While some of its occupants may reside there for a relatively short period of time, the property provides a residential function for its occupants, regardless of the length of time that they reside there.
The respondent accepts that the applicant is a commercial entity whose purpose is to derive income from the property. She submits, however, that the applicant’s purpose is an irrelevant consideration, and the use to which the property is put must be determined by reference to use of the property by those who occupy it, rather than its owners. This approach is demonstrated by the Court in GrainCorp and Sydney Serviced Apartments.
The respondent notes that the words, “residence” and “residential” are not defined in the Act, the Development Act 1993, the Development Regulations 2008 or the Development Plan. In fact, the Development Plan contemplates different types of residential development, including student accommodation, low-scale residential, and medium to high scale residential apartments. These different sub‑categories are all residential; student accommodation is no more than another subset of residential development. While each type of residential development may have its own requirements, all remain residential in character. In making this submission, the respondent relies on the evidence of Mr Vincent, where he identified student accommodation as a subset of residential development. While students require a different level of amenity to other residents, they remain residents, and the property must be characterised as residential.
The respondent points to a number of the features of the property and Atira’s arrangements with students which, she says, indicate that property is predominantly used for residential purposes. The majority of students stay at the property for more than four weeks, and the average stay is approximately one semester. During the time that the students are living at the property, it is, for them, performing a residential function.
The respondent says that it is relevant that the majority of students are subject to Residential Tenancy Agreements. Longer term residents pay a security bond that is deposited in the Residential Tenancies Fund, they pay their rent on a weekly basis, and must provide their own bed linen, towels and cooking utensils. They must clean their own apartments and remove their own garbage. They have quiet enjoyment of their apartment. If any dispute arises between Atira and a student who has signed a Residential Tenancies Agreement, the South Australian Civil and Administrative Tribunal has jurisdiction under the Residential Tenancies Act 1995 to deal with the dispute. Consequently, even if the apartments do not fulfil the requirements of long-term apartment accommodation, they are being used for residential purposes.
The respondent submits that the language used by Atira is consistent with the property being used for residential purposes. The “Atira Resident Handbook” is entitled “Welcome Home” and there is an intention to offer a home environment with a sense of community. The applicant’s own marketing portrays the property as residential, by using slogans such as “Don’t stay here, live here”. The applicant considers that its direct competitors are other purpose-built student accommodation facilities, and the private rental market.
The respondent says that the valuation method employed by the Valuer‑General when valuing the property is not relevant when determining its character.
The respondent relied on the evidence of Andrew Weinmann, who provided a report dated 23 December 2020, a supplementary report dated 6 April 20212 and gave oral evidence. She also relied on an affidavit of Anthony Smit, filed on 9 April 2021. Mr Smit did not give evidence. In his affidavit, he addressed various methods of valuation adopted within the Office of the Valuer-General.
Mr Weinmann was not an impressive witness. He is a Senior Audit Valuer with the Office of the Valuer-General, in whose office he has worked since 1996. He clearly has extensive experience as a valuer; however, he has no expertise beyond his undoubted qualifications and experience in this regard. His evidence was both confused and confusing, and at times he appeared to have difficulty understanding the questions asked. At other times, he was obstructive and unhelpful. In respect of a confusion arising in his first report, I note, for example, Mr Weinmann said:
I do not consider apartments described as studio or twin share to fit the definition of residential as per the statutory definitions.
I do however consider that the studio and twin share apartments are predominantly used for residential purposes.
I do not know to what he is referring with the words “statutory definitions”; while the question that he is asked makes reference to regulation 14 of the Local Government (General) Regulations 2013, that regulation is not set out anywhere in his report, and it is not clear that it is regulation 14 to which he refers. Further, he provides no explanation why he considers that studio and twin share apartments are predominantly used for residential purposes, despite expressing the view that they do not “fit the description of residential as per the statutory definitions.”
In cross-examination, Mr Weinmann provided an explanation:
So I’m saying that people are using those studio apartments for residential purposes, they reside in there. They sleep there, so for that purpose I’m saying they are residential.
It seems therefore, that Mr Weinmann concluded that the property was residential in character because people slept there. It appeared from his evidence that Mr Weinmann in fact found it difficult to articulate why he reached that view.
Where Mr Weinmann referred to dictionary definitions in his report, he failed to reference the sources that he consulted; he conceded that he consulted only on‑line dictionaries, and was selective as to the definitions that he included in his report. His evidence was that he did not include certain definitions because he did not consider they were relevant. Further, he obtained other information for the purpose of his report from other people and from the Land Services SA computer system, and yet failed to reference those contacts appropriately so as to enable the reader to understand whom he consulted and on what basis. In my view, his reports fall short of the standard required by Chapter 7 Part 14 of the Uniform Civil Rules 2020.
I have also reached the conclusion that a number of the matters that he was asked to address are outside the area of his expertise, or are otherwise not matters of expert evidence. Mr Weinmann was asked to provide his expert opinion on:
If the Land was being used for a particular purposes (sic), whether that use was predominantly for residential purposes [where the term ‘residential’ and the phrase ‘residential purposes’ have their ordinary and natural meaning].
It is difficult to see how this question, referring as it does to the ordinary and natural meaning of certain words, is a matter of expert opinion of a valuer. It is not suggested, by Mr Weinmann or the respondent, that a qualified valuer has any particular expertise in identifying the character or purpose of a development, over and above an individual without any qualifications as a valuer, nor are terms peculiar to the profession of a valuer being used. Further, Mr Weinmann says, in his first report, that he has no expertise in respect of the National Construction Code, however he seeks to use the National Construction Code to support his thesis that the property is being used predominantly for residential purposes.
I have placed little weight on Mr Weinmann’s reports or his oral evidence. The respondent submitted that I should regard his evidence as of assistance. She submits that, as s 105A specifically makes the opinion of the Valuer-General a relevant consideration, his opinion, as a valuer employed within the Valuer‑General’s office is relevant. She also submits that the criticisms of Mr Weinmann’s report were minor in nature, and that he accepted those criticisms. I am unable to adopt this approach to his evidence. I took a very different view of his evidence, as I have summarised, and have concluded that it is of little assistance, as it appeared to be based on his own personal view of the matter, without being informed by any particular expertise.

Consideration

Do the different methods of characterizing or classifying the property assist in determining whether the property is qualifying land for the purpose of s 105A of the Act?

It is clear from the evidence that there are various different ways to characterise a development, depending on the purpose of the characterisation. Some characterisations are broad while others contain more nuanced categories or subsets. A property that might be regarded as residential by one method of characterisation will not necessarily be regarded as such by another. Caution must be taken when attempting to draw any sort of principal from these different methods.
Perhaps the best example of this is in the Land Use Codes prepared by the Office of the Valuer-General. The “residential” code has ten different categories, and twenty-four different sub-categories. A number of those sub-categories have sub-categories of their own. Each of the sub-categories (including the sub‑categories of the sub-categories) is assigned its own Local Government Code. Four different Local Government Codes are attached to the various subsets of the “residential” Land Use Code. They are:
1. Residential comprising the sue of land for a detached dwelling, group dwelling, multiple dwelling, residential flat building, row dwelling or semi-detached dwelling with the meaning of the Development Regulations.
4. Commercial – Other comprising any other commercial use of land not referred to in categories 2 or 3.
Primary Production, comprising –
a.           Farming within the meaning of the Development Regulations; and
b.     Horticulture within the meaning of the Development Regulations; and
c.     The use of land for horse keeping or intensive animal keeping within the meaning of the Development Regulations; and
d.     In respect of a dairy situated on a farm – the use of land for a dairy within the meaning of the Development Regulations; and
e.           Commercial forestry.
9. Other comprising any other use of land not referred to in another category.
Under the Valuer-General’s Land Use Codes, the property is coded as “1720 – College and University residential accommodation”; the Local Government Code assigned to the property, however, is that of “Other”, rather than “Residential”, or even one of the three different “Commercial” designations. Land Use Code 1720 includes other forms of institutional accommodation, including retired and aged care accommodation, which incorporates both independent living units and supported residential care. Private hotels and boarding houses, hostels, and motels each have their own Land Use Code.
The National Construction Code classifies buildings differently to both the Land Use Codes and the Local Government Codes. The National Construction Code has ten separate classifications, some of which are further broken down into sub-classifications. A building may be assigned more than one classification, depending on the use of different parts of the building, something which does not appear to be contemplated by either the Land Use Codes or the Local Government Codes. Four separate classifications relate to buildings in which people reside; the classifications vary depending on the size and structure (for example, whether they are standalone buildings or multi-story) of the building, the number of residences contained therein, and whether the people residing in the building require assistance with daily activities and evacuation in the case of an emergency. A Class 3 building is described as follows:
Class 3 applies to residential buildings other than Class 1 or Class 2 buildings, or a Class 4 part of a building. Class 3 buildings are a common place of long term or transient living for a number of unrelated people. Examples include a boarding house, guest house, hostel or backpackers (that are larger than the limits for a Class 1b building). Class 3 buildings could also include dormitory style accommodation, or worker’s quarters for shearers or fruit pickers.
Class 3 buildings may also be “care-type” facilities (such as accommodation buildings for children, the elderly, or people with a disability) which are not Class 9 buildings.
The publication, Building Classifications – Understanding the NCC, contains the following:
Did you know?
Class 3 incudes residential care buildings and the residential parts of hotels, motels, schools, or jails.
It is unclear from a reading of this document, whether, by the description “residential parts of hotels, motels…” it intends to refer to the individual accommodation rooms as compared to the office and other parts of the premises, or whether it means private hotels, within the meaning of Land Use Code 15, in the Valuer-General’s Land Use Codes.
It is clear that the different methods of classification or categorisation of buildings provide little assistance in determining whether the property falls within the designation of qualifying land for the purpose of s 105A of the Act. The categories or classes have been devised by different organisations (whether government organisations or not) to assist them in carrying out their own specific functions, and not to inform any other person or body of the use of the building so classified. They do not assist in reaching, other than in a peripheral way, a conclusion as to the correct classification of the property for the purpose of the Act. For the purpose of the Act, it is of little assistance to know that the property has been variously characterised as:

• The same as retired and aged care accommodation (regardless of the level of assistance required by residents) and prisons, but different to hotels, motels, hostels, and boarding houses;

• Neither residential nor commercial;

• The same as boarding houses, hotels, motels, retired and aged care accommodation where no more than 10% of the residents require assistance to evacuate, back packers accommodation, shearers quarters and prisons.

Do the authorities assist in determining whether the property is qualifying land for the purpose of s 105A of the Act?

The cases fall into two categories, planning cases and tax cases.

The taxation cases

In Marana, the applicant bought a hotel in 2002. It obtained council approval to convert the hotel rooms into residential apartments, for which purpose it applied for strata title conversion. One apartment was sold in 2003, at which time it was treated by the respondent as a taxable supply for the purpose of the GST Act. The relevant section of the GST Act provided that a sale of real property was not input taxed “to the extent that the residential premises are…new residential premises other than those used for residential accommodation before…1998”. “Residential premises” was defined as land or a building that is occupied, or intended to be and capable of being occupied, as a residence. “Residence” and “residential” were not otherwise defined in the GST Act.
As previously set out, the Court examined dictionary definitions of both words, as well as the word, “reside”. It said:
Clearly, both “reside” and “residence” have the connotation of permanent, or at least long-term commitment dwelling in a particular place.
It went on to say:
All three references stress the relationship between the word “residential” and the word “residence”, suggesting the aspect of permanent or long-term occupation to which we have previously referred. They recognize use of the expression in connection with hotels but generally suggest that such usage describes an hotel that caters for long-term residents. We accept that it is not uncommon to speak of long-term residents in an hotel, but when one speaks of persons who stay for shorter terms, the more common usage is to describe them as “guests”.
The Court then went on to examine the definitions set out in the GST Act, and to discuss a number of decisions in the United Kingdom, where the notion of “residence” was found to include short-term and temporary accommodation. It concluded, however, that:
We are not sure that any such usage is as common in Australia as the Court of Appeal in Owen v Elliott considered it to be in England.
The Court then said:
Even if the expression “residential premises” may, in common usage, have the wider meaning urged by the appellants, the starting point for present purposes must be the statutory definition which focuses upon the word “residence”. Beaumont J concluded, and we agree, that such definition, taken in isolation, can only include premises which are either used as a residence or are intended to be, and are capable of being so used. In common usage, that dictates the element of permanent or long-term occupation to which we have referred.
The Court concluded that the word “residence” indicated a degree of permanent or long-term commitment to the occupation of the premises in question.
South Steyne Hotel involved an analysis of the same provision of the GST Act as Marana; after the decision in Marana, it was amended to provide that the term of occupation of premises was to be disregarded when determining whether it was a residence. The Court, at first instance, acknowledged that the ordinary and natural meaning of “residential” was that set out in Marana; that meaning had, however, been substituted with a special meaning by the amendment to the GST Act.
The GST Act was again under scrutiny in ECC Southbank, this time in respect of the meaning of “commercial residential premises”. The premises in question in this case was very similar to that offered by the applicant. As with the property, the premises were classified as a Class 3 building for the purpose of the National Building Code. Like the property, the premises comprised shared apartments, studio apartments and common areas, which included a laundry, games room, TV area, bike storage, library, and group and individual study spaces. Students occupied rooms pursuant to “Rooming Accommodation Agreements”, which made reference to the Residential Tenancies and Rooming Accommodation Act 2008 (Qld), and which “more closely resemble tenancy agreements than agreements which one would expect to see between a proprietor of a hotel and a guest.” Students were required to comply with house rules. Nicholas J found:
Hostel
[65]  According to the Macquarie Dictionary, a hostel is a supervised place of accommodation usually supplying board and lodging provided at a comparatively low cost particularly to students.
[66]  In my view, the Urbanest premises bears a much closer resemblance to a hostel than a hotel. The accommodation available at the Urbanest premises is intended to be (at least in the case of the shared apartments) comparatively low in cost and is obviously configured with the needs of students seeking low cost accommodation in mind. The accommodation provided at the Urbanest premises is supervised in the sense that the reception desk is manned 24 hours a day. I infer that residents may lodge complaints with management through the reception desk about the behaviour of other residents or visitors including in relation to excessive noise, failures to maintain the cleanliness of shared apartments and like matters dealt with in the House Rules.
[67]  It is true that meals are not provided to residents or customers of the Urbanest premises as they might usually be in the case of a more traditional hostel. However, that does not mean that the Urbanest premises may not be fairly described as a hostel or, at least, as being similar to a hostel. In my opinion, if the Urbanest premises is not a hostel, it is very similar to a hostel.
Inn and boarding house
[68]  In my view the Urbanest premises is not similar to an inn or a boarding house. An inn is an establishment at which board and lodging is provided to travellers. Similarly, a boarding house is a place at which board and lodging are provided to guests or residents.
The Explanatory Memorandum to the 2006 Amendments
[69]  It is useful to compare the attributes of the Urbanest premises to those specified in para 15.12 of the Explanatory Memorandum to the 2006 amendments some of which were referred to by Greenwood J in Meridien Marinas (above) at [74]. According to the Explanatory Memorandum, commercial residential premises normally:
•are run by a controller for a commercial purpose;
•have multiple occupancy;
•are held out to the public as such;
•have a central management;
•provide services in addition to commercial accommodation;
•are used for the main purpose of accommodation.
[70] The Urbanest premises meet all of these requirements. It is true that in comparison with some other types of establishment referred to in the relevant definition, the level of services provided in addition to accommodation may seem slight. But the services provided by staff to residents through the reception desk are by no means insignificant and, considered along with all other relevant matters, confirm my view that the Urbanest premises are properly regarded as commercial residential premises for the purposes of the GST Act.
In my view, these cases are of limited use. Marana provides a useful consideration of the dictionary definitions of “reside”, “residence” and “residential”, and lands on what the Court considers is the ordinary, natural meaning of those words. South Steyne Hotel confirms the ordinary, natural meaning of the words considered in Marana; otherwise it deals with a specific definition in the GST Act which was introduced to extend the words beyond their ordinary and natural meaning. ECC Southbank provides guidance in that it compares the premises in question with hotels, motels, hostels, inns and boarding houses, according to their ordinary usage. Otherwise, the case deals with the interpretation of a specific term, “commercial residential premises” and so is not directly analogous.
While these cases are instructive in part, they cannot operate as direct authority when seeking to interpret s 105A of the Act.

The planning cases

In Sydney Serviced Apartments, the defendant sought to use apartments in a building, which had been designated “a residential flat building” by the relevant planning laws, as serviced apartments. In determining whether serviced apartments fell within the meaning of “a residential flat building”, Mahoney JA said:
I find the matter nicely balanced. I am conscious that persons living in a building consisting of residential flats may find the amenity of the building disturbed if it is occupied in the manner of the company’s units. In the end, my conclusion is that the meaning of the consent, though not determined by, is to be read consistently with, the use of language in the relevant definitions in the County of Cumberland Planning Scheme Ordinance. The definition of “residential building” requires nothing more than use for human habitation. However, it includes within its terms descriptions of buildings or usages involving different kinds of human habitation. The kind of human habitation required to satisfy each of these will vary according to the nature of each of them and will, inter alia, require different degrees of permanency. Thus, a residential hotel may have a smaller degree of permanence than a residential club or hostel. It is, I think, not inconsistent with the thrust of the definition that there should be within it a kind or category of residential building which envisages a significant degree of permanency of habitation or occupancy.
The description of a flat as a “dwelling” or a “domicile” carries with it the notion of that degree of permanency…
I do not think that the use to which the company’s units are put has that degree of permanence.
In GrainCorp, the appellant sought a declaration of invalidity of a development consent granted on behalf of the respondent. The consent allowed the construction of a “workforce accommodation facility” to accommodate the fly in fly out workers of a nearby mine, on land that was zoned “general agricultural”. According to the local development plan, development for the purpose of residential buildings was prohibited in a general agricultural zone. Ward JA examined the dictionary definitions of “residence” and “reside”, and said:
What can be drawn from the above is that the appellation "residential" may in some contexts connote a degree of permanence but can also connote an habitual or usual abode, or even a place where one lives for a time or while performing a particular purpose or function, in which respect it would not be inapt to refer to the occupation of workers during the period that they are fulfilling work functions at the mines.
Moreover, reliance on a connotation of "permanence" begs the question of what degree of permanence is sufficient to bring a development within the connotation "residential building". As Sackville AJA pointed out in the course of argument on the appeal, permanence does not necessarily connote continuity of use.
She then considered a number of authorities, and in respect of Sydney Serviced Apartments noted that it was important to note that use of a term must be construed within the context of the instrument in which it appears, rather than to take a uniform definition to apply across all instruments. She then said:
… However, I also consider that on the ordinary meaning of “residential” it is sufficient that structures are used as the usual abode of people or as their abode “for a time” (in the sense of more than a fleeting stay) or even, in some of the older usages of the expressions “in residence”, for the purpose of abode for a stated function.
The legal basis on which one occupies such a building or part of such a building…seems to be irrelevant to the question whether use of the buildings is a residential use.
Her Honour then asked the following question:
Turning then to the proper characterisation to be put to the purpose of the facility as a whole, having regard to what is accepted to be its intended use (namely, the provision of accommodation and other facilities to mine workers during the period of their rostered shifts at nearby mines), does this facility fall within the concept of a residential building?
She found that a number of features were irrelevant, including whether the occupants were labelled guests, residents or some other similar term, the fact they had to check in and out on arrival and departure, whether they occupy the rooms under licence or some other legal arrangement, and the name by which the occupants referred to the facility, such as “home”. She concluded:
I do not accept that those features detract from the residential character of the facility: namely, that it will provide accommodation and living facilities for mine workers for considerable periods of time, in aggregate, over their working life at the mine (however long or short that may be). The fact that workers will stay elsewhere (unless they are otherwise homeless or peripatetic) during the periods when they are not at the workforce accommodation facility does not mean that during the period they are in occupation at the facility it is not performing a residential function.
In City of Swan v West Australian Shalom Group Inc (Shalom Group), the Court considered an appeal from a decision refusing to allow the approved use of a property to be changed from “grouped dwelling” to “community purpose”. The property was zoned Rural-Residential, on which ‘residential buildings’ were not permitted. The appellant had classified the property as a residential building. After considering a number of authorities, Banks-Smith J said:
The authorities establish that where they are not otherwise defined, the terms ‘residential’ or ‘residence’ generally refer to one’s usual or settled abode. That might be ‘for the time being’ or ‘for a time’. It need not be the person’s only residence. The concept of ‘residential’ is a broad one.

(citations omitted)

In WC Projects, the respondent applied for development plan consent to build a student accommodation facility, which comprised eight separate flats. Blue J said:
In approaching the construction of the Development Plan, I observe that it is not to be construed in the same manner, and in particular with the same rigour, as a statue, but rather as a practical planning document. It remains appropriate to construe a development plan by reference to the text, context and evident purpose of the relevant provision, albeit with a higher degree of flexibility than in respect of a statute.
After reviewing a number of authorities dealing with student accommodation, Blue J concluded:
…the reference in the Development Plan to “student accommodation” is a reference to special purpose accommodation in the nature of a boarding house rather than to a residential flat building that happens to be occupied by students.
Ultimately, however, he concluded:
In the present case, the imposition of a condition constraining the occupation of the premises to students has an air of artificiality. If the premises are fit for occupation by students, it is not evident why they would not also be fit for occupation by some other categories of other tenants who may be expected to have limited needs or limited means. Considered as a matter of built form, there is nothing about the proposed building that makes it fit for students and unfit for other members of the population. The imposition of this condition supports the conclusion already reached that the proposed development is not compatible with the relevant provisions in the Development Plan. The imposition of this condition seeks to confine the development in a strait jacket which will constrain the development from being used in the ordinary way.
In my view, these cases are even less analogous to the matter before me, than the taxation cases. Perhaps the most fundamental difference is the fact that the planning instruments can be construed with more flexibility and with a pragmatic approach, as pointed out by Blue J in WC Projects, and Banks-Smith J in Shalom Group.
The planning cases are also regulating very different things to the legislation in the taxation cases. The taxation cases are generally concerned with a particular transaction and it is, in effect, the transaction that is being characterised (that is it the transfer or sale of a particular type of premises). The planning cases, on the other hand, are directed towards the practical use of the premises. In cases such as GrainCorp, residential premises are in fact prohibited developments in the areas where they are proposed. In such cases, it is appropriate to examine the use to which the building is to be put; to focus on the general use made of the premises, rather than on the occupation of individual rooms or apartments by separate students, workers, or other occupants.

Should s 105A be given a liberal construction?

In my view, the approach set out by French J in Diethelm Manufacturing, and applied by Layton J in RSAYS, should be applied. French J said:
As a general proposition the taxpayer claiming the benefit of an exemption fomr the imposition of tax has the burden of proving the facts necessary to fall within the exemption…on the other hand an exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is not to be given a narrow application.
I do not accept the submission of the respondent that Bargwanna has limited this approach. I am of the view that the Court, in Bargwanna, was dealing specifically with cases dealing with charities, and not generally with taxation laws.
In my view, s 105A should not be given a narrow interpretation. It protects certain transactions from attracting stamp duty, by providing an exemption from stamp duty for the transfer or conveyance of land, other than land used for residential or primary production purposes.

Use of material provided by the Valuer-General

Section 105A requires the respondent to make a determination whether land is being predominantly used for residential purposes. In making that determination, she is to take into account information provided by the Valuer-General. As a result, in determining whether the property is qualifying land, I am entitled to take into consideration the method by which the Valuer-General values the property.

Is the property being predominantly used for residential purposes, within the meaning of s 105A of the Act?

“Residential purposes” is not defined elsewhere in the Act. Given the controversy between the parties as to its meaning, it is appropriate to look at the intention that Parliament had in introducing s 105A. In the Bill’s Second Reading Speech, the Treasurer said:
The changes that the Government is making in this bill will remove significant cost barriers to business investment and expansion, encourage the creation of new businesses in the State, and provide lasting improvement to the South Australian economy.
These changes will reduce the harmful impact inefficient taxes have on the economy and are consistent with the views expressed by South Australians during the State Tax Review.
…
In addition by 1 July 2018 stamp duty will be abolished on non-residential real property transfers.
The intention to benefit business investment was further emphasised in Treasurer’s 2015 – 2016 Budget Speech, where he said:
Our aim is to create an efficient tax system that rewards effort, minimises the harm to the economy and incentivises investment decision making by businesses by removing destructive transactional taxes.
…
We must lower the cost of doing business in south Australia and unlock the entrepreneurial spirit that has grown this state, helping South Australian Business invest and grow.

It is clear that the intention behind the introduction of s 105A was to benefit business, and in particular, to encourage business transactions. The purpose of the removal of “the harmful impact [of] inefficient taxes”, such as stamp duty, was “to remove significant cost barriers to business investment and expansion”. The focus of the amendment is on the entity or entities undertaking the transaction. It is businesses who are the intended beneficiaries of the stamp duty exemption. It is in this light that the property must be characterised, to determine whether it is qualifying land, or whether it is used predominantly for residential purposes. The character of the premises is to be determined in light of the character of the transaction.
I consider that, as “residential purposes” has not been defined by the Act, save to say that land is used for residential purposes if predominantly used for that purpose, it is appropriate to interpret the word “residential” according to its ordinary usage. In this regard, I reject the submission of the respondent, that “residence” and “residential” have a common law meaning. They do not. They have a common or ordinary meaning, but not a common law meaning. Given the careful and considered analysis of the dictionary definitions of “residence” and “residential” in Marana, I consider that it is appropriate to adopt the meaning distilled by the Court in that case. I consider that “residence”, “reside” and “residential” imply a permanent or long-term commitment to living in a particular place.

Do students living at the property make a long-term or permanent commitment to live there?

In my view, they do not. The statistics produced by Ms Storey show that, in 2018, 63% of students stayed for one semester or less, with the average length of stay being 25 weeks. In 2019, 49% of students stayed one semester or less, with the average length of stay being 29 weeks. The only occupants of the property who were not students were people utilizing the property as short-term, tourist accommodation. It is clear that the majority of students did not envisage living at the property for an extended period of time.
I place little weight on the fact that students who stayed longer than four weeks were required to provide their own bed linen, towels and kitchen utensils. Nor do I place much weight on the fact that students were required to clean their own rooms. Neither of these facts detracts from the fact that students did not commit to living at the property on a long-term or permanent basis. Indeed, one would assume that it would not be possible to live at the property permanently.
I place no weight on the fact that students who stay longer than four weeks sign a Residential Tenancies Agreement. The nature of the contract entered into by students does not, of itself, change the nature of their commitment to living at the property. The fact that they sign Residential Tenancy Agreements, and assume the rights and responsibilities provided by the Residential Tenancies Act, does not change the nature of their commitment to staying at the property.
I place no weight on the advertising material generated by Atira. In the same way that an organisation should not be able to define its character by the way it advertises itself, it should also not be defined by it. It does not make itself a residential property for the purpose of the Act simply by describing itself as “a home away from home”, by placing the words “Welcome Home” on the front page of its residents handbook, or by calling its occupants “residents”.
I am of the view that, for the purpose of the Act, the property is not analogous to a retirement village or aged care facilities. Based simply on the average length of stay, it is clear that they are vastly different. The average length of stay in a retirement village is seven years, and the average length of stay in residential aged care (apart from respite care) is two years and seven months. By far the biggest cause of departure from residential aged care is death.
The amenities offered by the property support the proposition that the property is not intended to offer long-term residence. Appropriately, the Adelaide (City) Development Plan differentiates between purpose-built student accommodation, provided for in Objective 9 and Principles 10 to 13, and other types of accommodation. The relevant Principles recognize that students have different requirements in respect of amenity as compared to residents who are contemplating a long-term or permanent commitment to living in a particular place of accommodation. They allow for reduced private living areas, amongst other things, on the basis that there is a trade off in sufficient common or shared facilities, adequate natural light, and the easy adaptation of the accommodation for an alternative use. It is clear that the property meets these requirements; the private floor space offered in individual apartments is substantially smaller than that allowed in private residential premises, and the provision for private open space and car parking is also substantially different.
It is clear that the Development Application in respect of the property was made on the basis that it complied with the requirements of Objective 9 and its underlying principles. I note, too, that the Associate Government Architect, Mr Tridente, described the property as accommodation of a “predominantly short‑term nature”. This, in my view, is supportive of the conclusion that accommodation occupied by students, where the majority of students stay one semester or less, is appropriately regarded as short-term accommodation.
I place little weight on IC103. As a statement of policy, it provides little assistance in determining the correct characterisation of premises that are not specifically referred to in it. I also place little weight on the method of valuation adopted by the Valuer-General in respect of the property. The appropriate approach to valuation of the property will not necessarily indicate whether the property is predominantly being used for residential purposes. It is conceivable, and indeed likely, that a property may both be qualifying land for the purpose of the Act, while also being characterised as residential for other purposes. An example of this would be a hotel, which, according to IC103 is qualifying land, while being regarded as residential for the purpose of the Valuer-General’s Land Use Codes. In my view, the property is another such building. I am also of the view that the SAILIS records in exhibit A7 are of little probative value. An examination of the evidence in this matter makes it clear that there are many different ways and reasons for classifying a property; the fact that the Valuer-General classifies land in one way does not necessarily inform the way in which the respondent must classify the land for an entirely different purpose.
The fact that all of the business agreements and other commercial aspects of the property were transferred to Atira at the time that the sale agreement in respect of the property was entered into supports the conclusion that the property is qualifying land for the purpose of the Act. It was not just the land (with the facility) that was the subject of the transfer to the applicant; all of the related business interests and contracts were also transferred to Atira, a related entity, to enable the commercial aspects of the property to continue to operate seamlessly. This indicates that the subject of the transfer was a commercial entity, rather than a residential property.

Conclusion

The property is qualifying land for the purpose of the s 105A of the Act.

The appeal is allowed.