Returned and Services League of Australia (Victorian Branch) Inc & Anor v Latrobe Shire Council
[2001] VSCA 122
•10 August 2001
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 8010 of 1999
| RETURNED AND SERVICES LEAGUE OF AUSTRALIA (VICTORIAN BRANCH) INC. and TRARALGON RSL SUB-BRANCH INC. | Appellants |
| v. | |
| LATROBE SHIRE COUNCIL | Respondent |
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JUDGES: | CALLAWAY, BATT and BUCHANAN, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 27 June 2001 | |
DATE OF JUDGMENT: | 10 August 2001 | |
MEDIUM NEUTRAL CITATION: | [2001] VSCA 122 | |
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RATING – Exemptions – Land “used exclusively as a Sub-Branch of the Returned Services League” – Constituent documents determinative – Substantial gaming activities on land, but authorized by Rules of Sub-Branch – Land exempt – Local Government Act 1989, s.154(2)(f)(ii).
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr A.L. Cavanough, Q.C. | Williams Winter & Higgs |
| For the Respondent | Mr H. McM. Wright, Q.C. Mr G. Peake | Rennick & Gaynor |
CALLAWAY, J.A.:
I agree with Batt, J.A.
BATT, J.A.:
This is an appeal against a judgment given in the County Court at Melbourne on 17 December 1999 dismissing with costs the appellants’ appeal to that court against the general rate imposed and levied by the respondent council on land situate at 109-115 Grey Street, Traralgon (“the land”), in respect of the year ended 30 June 1999. The ground of the appeal to the County Court was that, by virtue of s.154(2)(f)(ii) of the Local Government Act 1989, the land was not rateable land.
Section 154(2) of that Act specifies the land that is not rateable land. It includes paragraph (f), which reads:
“(f)land held in trust and used exclusively-
(i)as a club for or a memorial to persons who served in the First or Second World War or in any other war, hostilities or special assignment referred to in the Patriotic Funds Act 1958; or
(ii)as a Sub-Branch of the Returned Services League of Australia; or
(iii)by the Air Force Association (Victoria Division); or
(iv)by the Australian Legion of Ex-Servicemen and Women (Victorian Branch).”
As paragraph (d) is referred to later, it is convenient to set it out also. It reads:
“(d)land which is vested in or held in trust for any religious body and used exclusively-
(i) as a residence of a practising Minister of religion; or
(ii)for the education and training of persons to be Ministers of religion; or
(iii) for both the purposes in sub-paragraphs (i) and (ii).”
As appears more particularly below, the land was and is owned by the first appellant as a trustee and was and is occupied by the second appellant. Under s.156(1) of the Local Government Act, unlike earlier legislation, it is the owner of land that is liable to pay the rates on it. The right of appeal for a review of a municipal rate is given by s.184(1) to “[a] person who is aggrieved”. Undoubtedly the first appellant is such a person. By clause 12(2) of the lease between the two appellants referred to below the second appellant must as between them bear the operating expenses, which are defined to include council rates. In virtue of that obligation it claims to be a person aggrieved, but it is unnecessary to decide whether that claim is correct as it is clear that the appeal to the County Court was, and that this appeal is, validly constituted through the participation of the first appellant.
Both appellants are incorporated under the Associations Incorporation Act 1981. Part 13 of the Rules of the Victorian Branch, the first appellant, provides for Sub-Branches of the Branch and in particular for the establishment of new Sub-Branches within Victoria by charter. On 14 March 1998 the first appellant, in pursuance of the powers and authority vested[1] in it by the national body, The Returned and Services League of Australia Ltd. (“the League” or “the RSL”), a company limited by guarantee, and pursuant to its own statement of purposes, rules and by-laws, established and constituted the second appellant as a Sub-Branch of the Victorian Branch and granted it a charter to that effect. Rule 13.4(a) provides that in the event that a Sub-Branch incorporates and is granted a charter in accordance with the Rules the Sub-Branch shall not without the consent in writing of the State Executive alter its constitution[2]. The other paragraphs of that Rule and other Rules contemplate that a Sub-Branch may be licensed under the Liquor Control Act 1987 or any re-enactment thereof and be the holder of a venue operator’s licence under the Gaming Machine Control Act 1991.
[1]This is effected by Articles 20.12 and 20.18 of the League’s Articles of Association.
[2]Article 20 of the League’s Articles ensures that it has ultimate supervision and control over State Branches and Sub-Branches and that their rules are consistent with its Memorandum, Articles and By-Laws.
The objects for which the second appellant is established are set out in clause 2.1 of its Rules. They include the following:
“(h)The promotion of a social organisation and Sub-Branch of the Branch composed of those who are serving or who have served in the Australian Defence Forces, the various British Commonwealth Defence Forces, Members of Allied Defence Forces, their dependants and such other persons who from time to time may be admitted to membership in accordance with these Rules.
(i)To establish, maintain and conduct the Sub-Branch of a non-political and non-sectarian character and to provide, furnish, equip and maintain Sub-Branch rooms, reading rooms, recreation rooms and refreshment facilities; to establish and maintain billiard tables and facilities for other lawful games, sporting facilities and recreation for its Members for the maintenance and improvement of friendly relationships amongst the Members and generally afford to Members and their friends and guests all the usual privileges, advantages, conveniences and facilities of such a Sub-Branch.
(j)To provide means of social interaction between persons who are Members of the League and in particular Members of the Traralgon RSL Sub-Branch of the Branch and their friends and guests.
(k)…
(l)To make application pursuant to the appropriate legislation from time to time enacted and currently in force, or any re-enactment or amendment thereof, to:
(1)The Liquor Licensing Commission for a Club Licence or any other licence, permit or authority issued under the Liquor Control Act or any re-enactment or amendment;
(2)The Victorian Casino and Gaming Authority for a Venue Operator’s Licence or any other licence, permit or authority issued under the Gaming Machine Control Act or any amendment or re-enactment thereof;
(3)…
and to hold, … renew, … any such licence …, and to do and perform all such acts and things which may be necessary to retain and protect any such licence …”
The first appellant is and was at all material times the registered proprietor of the land in succession to the trustees for the then unincorporated Traralgon Sub-Branch. By lease dated 17 March 1998 the first appellant as trustee of the Building Patriotic Fund No.2651 for the beneficiaries of the trust contained in an annexed deed of trust, being in fact the members for the time being of the Traralgon Sub-Branch, leased the land to the second appellant for a term of one year expiring on 16 March 1999 at a rent of $120,000 per year (subject to review) and with nine options of annual renewal. Clause 17(1) of the lease provided that the second appellant might only use the land for the purpose of a licensed RSL Sub-Branch. Clause 15 required it to maintain its club licence and any venue operator’s licence and to comply fully with any venue operator’s agreement it entered into with the Trustees of the Estate of the late George Adams (who in fact trade through a company as Tattersall’s). The second appellant did enter into such an agreement on 30 September 1998 with effect from 1 July 1998 and terminating on 14 September 2002. It is a document of nearly 50 pages, providing, amongst other things, for the second appellant as venue operator to operate the venue at Grey Street, Traralgon, as prescribed in detail by the agreement and for Tattersall’s to install and maintain at the venue 35 gaming machines and associated equipment and, provisionally, a further four machines and to give support to the venue operator. The gaming machines installed remain the property of Tattersall’s, which has a right of inspection at any time. Tattersall’s is entitled to monitor and enforce “gaming machine performance”. The “net machine income” is to be banked and distributed between the venue operator, Tattersall’s and the Victorian Casino and Gaming Authority. By a deed made on 17 March 1999 the lease was renewed for a further year to 16 March 2000 at the same rent with eight options of annual renewal.
The evidence of the general manager of the second appellant showed that on the land there were clubrooms, two bowling greens and a car park. The clubrooms themselves consisted of a billiard room, a social function area, a gaming room, a bistro and areas for darts and indoor bowls. About 22 per cent of the indoor area was taken up by the gaming room. There were three bars in the premises. There were other buildings on the land, including a house which was used for administration, by welfare workers, by pension officers and by local groups which met there. In his reasons for judgment the County Court judge, summarising the general manager’s evidence, listed a number of activities carried on or functions carried out on the land which led him to say that it could not be suggested that the subject land was not used as a Sub-Branch of the RSL. They were –
“the rituals relating to the flag, the ode, the minute silence, the memorial garden, the memorabilia, the library, the support and assistance to cadet units, the social structure of the club, the welfare office, the pension office, the various equipment items for members including disabled members, the assistance to various charities etcetera.”
To that list might be added the yearly Anzac Day service and breakfast and the yearly Remembrance Day service. His Honour had earlier referred to other activities such as “provision of food, drink, games and the capacity to bring their [the members’] friends as guests.” The games were indoor bowls, outdoor bowls, darts and snooker. Lunch was served from Wednesday to Friday and dinner on Friday and Saturday nights. Live entertainment was provided on Friday and Saturday nights.
It was the extent and prominence of the gaming activities carried on on the land that led the respondent to levy rates on the land and it was “the evidence relating to social and gaming membership, the extent of gaming activities, the financial aspects of gaming at the club and the club’s general attitude to these matters” that led his Honour to conclude that the land was not used exclusively as a Sub-Branch of the RSL and so to hold that the land was rateable. In order that the force of the unchallenged findings on these topics that are contained in the careful and detailed reasons for judgment may best be appreciated I quote most of them directly. After stating that social and gaming members had a very different character from the traditional “ordinary” member, his Honour said:
“They do not require war service and there are a number of other differences. They can only be members of Sub-Branches of the League, not members of the National League or the State Branch. They have very restricted voting and control rights, eg, social members cannot vote on RSL operations, only on matters relating to facilities. Gaming members have no voting rights, just the right to use the bar, dining and gaming facilities.
…
Exhibit D (the rules of the Sub-Branch) undoubtedly do make provision for social and gaming members, albeit with the restrictions as above. These rules also make provision for applications by RSL Sub-Branches for licences to operate gaming machines and they also make provision for members, including ordinary, social and gaming members, to play gaming machines and to generally [be] part of the Sub-Branch’s social organisation.
[The general manager’s] evidence regarding membership categories indicated that in the 1998/99 period, there were 434 ordinary members, 1400 social members and 500 gaming members. He indicated that in the last two years there had been an increase of 1000 in the number of social members.
The relevant evidence relating to gaming included the following: that the gaming area of the club constituted 22 per cent of the floor space. In 1992, the club was allocated 39 gaming machines by Tattersall’s and this is likely to increase shortly after a planned refurbishing to 45 machines, all owned by Tattersall’s. Tattersall’s statistics indicate that this particular club is in the top 5 per cent of its market sector[3] in Victoria with approximately $600,000 per week going through the poker machines.
[3]According to the agreement with Tattersall’s, this was country clubs having between 30 and 59 gaming machines.
… Already there is quite prominent advertising in the local press which highlights the ‘Tatts pokies’ aspect of the entertainment provided by the club. In Traralgon, the RSL is the only club with poker machines but there are two hotels which also provide the same.
The operation of the gaming machines at the Sub-Branch is pursuant to a Venue Operator’s Agreement with Tattersall’s, exhibit 1, and in general terms it is the case that Tattersall’s has a significant monitoring function and influence over the gaming in any of its venues, including the Traralgon Sub-Branch ...
… The latest profit and loss statement covered the period from 17 March 98 (when charter was granted to the Sub-Branch incorporated) to 31 December 98, that is, a period of nine and a half months.
In this period, the club’s share of gaming revenue was $536,000 which made it the principal financial activity of the club, bringing in some $10-$15,000 per week for the club. This figure of $536,000 represented only one–third of the total gaming revenue for the period because Tattersall’s and the government claimed two-thirds of the total and the club claimed one-third.
Accordingly, it could be calculated that the total gaming revenue for a 12-month period would be approximately $2 million. Compared with this, the total gross bar sales were approximately 25 per cent, $480,000, and the net bar sales were approximately 12 per cent, $254,000.
All of the above can be compared with the earliest profit and loss statement, that is, that of the year ending 30 June 1989, which showed total bar sales to have been $428,000 and profit from bar sales to have been $212,000. The total of all other income, that is, not bar-related, in 1989 was $14,800. This was before poker machines. The total of other income for the nine and a half months of 1998 was $584,000, $536,000 from gaming.
… [The general manager] conceded that the club markets to and encourages the wider Traralgon community to come to the club and use its facilities – its bars, gaming and bistro entertainment.
Traralgon’s population is about 23,000 people. On an average, 360 – 400 members, of the different categories, would attend the premises every day, together with a further number of guests, ie, non-members, accompanying members or bona fide visitors who lived outside a 10-kilometre radius. Non-members would generally constitute about 10 per cent of those present on any given day. He conceded that of those who attended the club every day, a significant number went to play the poker machines. … He acknowledged that the club ran advertisements in the local press and on the local radio, exhibits 3 and 4, which contained statements to the following effect:
‘The Traralgon RSL is the place to head when you are after the hottest entertainment.’
‘When planning a night out, think Traralgon RSL, your friendly club.’
Whilst it is true to say that the contents of the written advertisements included the words ‘for the information of members and guests’, it is hard to see how same could have much meaning as the materials contained in the local newspaper are free for anyone to read.”
His Honour held that, although the land was used as a Sub-Branch of the RSL, it was not exclusively so used because, when regard was had to the actual use and physical activities which the Sub-Branch carried on or permitted or authorised to take place on the land, it was to be concluded that the land was not being used only for what his Honour called “the purposes of the RSL” or “RSL purposes”. There was a further purpose or use being made which was not really ancillary or incidental to “the RSL purpose” but additional or collateral, that is, independent of “the true RSL purpose”. This further purpose or use his Honour identified as the provision of “a general entertainment function for the locality, ie, with a ‘commercial’ quality”. He said that the matter was one of degree. If, for example, there were fewer than half a dozen gaming machines and they were used essentially by “the traditional members” and their guests or even by social or gaming members, if the latter category did not overwhelm the former, then it might still be strongly arguable that such activities were no more than ancillary or incidental to “the RSL purpose”.
The sole issue in this appeal is whether his Honour’s conclusion that the land was not used exclusively as a Sub-Branch of the RSL is correct. For the reasons which follow, I am of the opinion that that issue should be resolved favourably to the appellants.
A number of comments may first be made about the critical words, “used exclusively … as a Sub-Branch of the Returned Services League of Australia”. The word “exclusively” is familiar in rating law. It adds emphasis or, perhaps, precision, excluding cases where there is use collateral or independent, as distinct from incidental, to the stipulated use[4]. The word “Sub-Branch” in its relevant primary signification denotes a body, either an unincorporated association or a legal entity, being at the lowest end of the scale of bodies in the structure of the RSL. But that, to my mind, is not its precise sense here[5]. Rather, it is more concrete, denoting the place where such a Sub-Branch is conducted[6], that is, the premises or “home” of such a Sub-Branch, its place of operations. That colour, I would accept, may come in part also from the words “land” and “as”. The latter word essentially denotes the manner or mode (of use). Relevantly, The Oxford English Dictionary, 2nd edn, defines it[7] as “In the character, capacity, or rôle of”. One might add “by way of”. But there are also overtones of purpose[8], as is made clear in paragraph (d) of s.154(2), where “as a residence” in sub-paragraph (i) is described in sub-paragraph (iii) as a “purpose”, another purpose being expressed in sub-paragraph (ii) by the word “for”.
[4]Ryde Municipal Council v. Macquarie University (1978) 139 C.L.R. 633 at 644 and 650-651 and Randwick Corporation v. Rutledge (1959) 102 C.L.R. 54 at 93-94.
[5]As it is in sub-paragraphs (iii) and (iv) of s.154(2)(f), which require exclusive use “by” specified bodies.
[6]Cf. Parker v. Borough of Ealing [1960] 1 W.L.R. 1398 at 1401; [1961] 1 All E.R. 147 at 149, where the words of exemption “occupied for the purposes of” were interpreted as meaning occupied “for carrying on the activities of”, an interpretation approved by Stephen, J. in Ryde Municipal Council at 651.
[7]In sense II 11(b).
[8]Exemplified in the sentence, “He was given the book as a present or as a help to understanding.” That “use as” and “use for the purposes of” may in certain circumstances differ is shown by City of Nunawading v. Harrington [1985] V.R. 641 at 645, but the difference has no present materiality. Compare Cascone and Vella v. City of Whittlesea (1993) 11 AATR 175 at 190-191 as regards “use” and “purpose”.
Thus, although it must always be remembered that in the end it is the statutory language which must be satisfied, it may be helpful to state the question as being whether the land was being used exclusively in the capacity of the premises of a Sub-Branch of the RSL or used exclusively for the conduct of such a Sub-Branch of the RSL, the candidate Sub-Branch being the second appellant. To my mind the question so stated admits of but one answer, an affirmative one. To answer the question, one must look at what the appellants did, authorised or permitted upon the land[9] and measure that against the touchstone for exemption found in the Act. As to the latter, what a Sub-Branch of the RSL is or what its purposes are is, as Callaway, J.A. remarked during argument, not something known to the law, as in the case, for example, of “charitable purposes”. Nor is it something the meaning of which can be ascertained by reference to a dictionary, as might be done if a rare common noun had been used for all the words after “as a” in sub-paragraph (ii). Rather, as Mr Cavanough for the appellant submitted, the Act takes Sub-Branches of the RSL as it finds them, which includes being inherently capable of changing. So, one cannot say a priori that there are certain “core” or “true” RSL purposes. One can only ascertain what a Sub-Branch of the RSL is and what its purposes are by resort to evidence and in particular to the constituent documents of the second appellant and, because its existence, functions and powers ultimately derive from them, of the League and the Victorian Branch. Particularly significant in the constituent documents are the purposes or objects stated and the provisions as to creation of Sub-Branches and as to what activities may be undertaken. Having regard to the genesis of the League, it is almost inevitable that the objects and membership of it and of its subsidiary bodies will change over time.[10] Indeed it was the supervening or impending inability of RSL Sub-Branches to satisfy the equivalent of the present s.154(2)(f)(i) that led to the addition of what is now sub-paragraph (f)(ii) by the Local Government (Rates and Fees) Act 1978.[11] Parliament has trusted the RSL and the two bodies mentioned in sub-paragraphs (iii) and (iv). If it considers that any change is too great or that the exemption is being abused, it can withdraw the exemption for future years, rates being imposed annually.
[9]Association of Franciscan Order of Friars Minor v. City of Kew [1967] V.R. 732 at 734.
[10]This is reflected in the successive widenings by Parliament of the exemption now found in s.154(2)(f)(i), which was introduced in 1921 and widened by Acts passed in 1958, 1969 and 1978. When the present form of the exemption was enacted by the Act of 1989 the introductory words “for the purposes of” were replaced by the word “as”.
[11]This appears most clearly in the second reading speeches of the Hon. K. I. Wright and the Hon. I. B. Trayling in the Legislative Council on 5 December 1978 (Parliamentary Debates - Council, pp. 6886 and 6889 respectively) and the second reading speech of the Minister, Mr Maclellan , in the Legislative Assembly on 6th December 1978 (Parliamentary Debates - Assembly, p. 7219). Several speakers stated that without the amendment the welfare work of Sub-Branches might be seriously affected.
The facts stated earlier show that the second appellant was a Sub-Branch of the RSL, in that it was a legal entity duly established and constituted “as a Sub-Branch” of the Victorian Branch, and chartered, by the first appellant under authority from the League. As the occupier of the land, the second appellant necessarily used it.[12] When resort is had to the various constituent documents, it is clear that the aspects of membership and the activities which led his Honour to the conclusion he expressed were, as his Honour accepted, all authorised by the Rules of the appellant Sub-Branch and that those Rules were not inconsistent with the Rules of the Victorian Branch or the memorandum or articles (or constitution, to use the new terminology) of the national body, the League.[13] Indeed the contrary was not suggested in argument for the respondent. Nor was it suggested that any of the activities was unlawful. In particular, the Rules of this Sub-Branch authorised the installation of gaming machines and the playing of them by members, including social and gaming members, as well as the obtaining and exercising of a licence to sell liquor, and the rules of the Victorian Branch contemplated that any Sub-Branch might do that. In short, gaming and entertainment were authorised activities of the second appellant.
[12]Ryde Municipal Council at 658-659 per Aickin, J., who dissented in the result.
[13]Whilst the terms of the lease from the Victorian Branch did not of themselves ensure that the land was exclusively used as a Sub-Branch of the RSL, they tended to make that likely, for, if complied with by the second appellant, they confined the use of the land to use as a Sub-Branch. I note in passing that the respondent did not suggest in argument that the first appellant could not rely on the second appellant’s use of the land: cf. Franciscan Order of Friars at 734; Parker v. Borough of Ealing at (W.L.R.) 1401-1402; (All E.R.) 149-150 and Ryde Municipal Council generally.
Mr. Wright for the respondent submitted that, in view of Tattersall’s ownership and maintenance of the gaming machines and its extensive rights of access and of supervision, together with the fact that two-thirds of the proceeds of the gaming machines were paid to it, the second appellant was a minion of Tattersall’s and Tattersall’s was a user of the land for its own business purposes. It was using the Sub-Branch as an outlet for its own business, rather than the Sub-Branch using Tattersall’s for its business. I accept, however, the submission for the appellants that the involvement of Tattersall’s did not disqualify the land from exemption. In the light of the evidence, including the relatively infrequent visits to the land by staff of Tattersall’s, it is, I consider, quite unrealistic to treat Tattersall’s as an occupier or user of any part of the land. Even if use by someone other than the appellants be relevant[14] and even if, contrary to my view, there was use by Tattersall’s, such use was, to adapt the words of Stephen, J. in Ryde Municipal Council[15], but incidental to, and in no way detracted from, the exclusiveness of the use of the land by the appellants: the suggested use merely subserved the primary use of the land by the second appellant. I record that Mr. Wright made no like submission about the activities of the caterers.
[14]Cf. Franciscan Order of Friars Minor at 734.
[15]At 650.
There being, then, no use other than the stipulated one, it follows that at the material time the land was used exclusively in the capacity of the premises of a Sub-Branch of the RSL, namely, the Traralgon RSL Sub-Branch Inc., or, to put the matter another way, was used exclusively for the conduct of that Sub-Branch.
Use as a Sub-Branch of the RSL would be deprived of its exclusiveness if, for instance, a Sub-Branch sub-leased part of the land to an organisation quite outside its objects or (as might happen with a hall) alternated with such another organisation in the use of the whole of the land. Nothing like that occurred here.
I respectfully consider that the appellants are correct in submitting that his Honour was led astray by, in substance, importing into the exemption a requirement that the land should be used for “historical” or “traditional” purposes of the RSL. A purpose which is not traditional or historical is not for that reason not an RSL purpose. If it could from one perspective be said that the land was used in part as a general entertainment centre or as a gaming venue, any such use was not a separate or dual or collateral use. There is nothing inconsistent between the exclusive use of the land as a Sub-Branch of the RSL and its use for general entertainment or for gaming. The way land is used may satisfy two or more descriptions at the same time. Any use for general entertainment or gaming was, in the light of the constituent documents, still use of the land as a Sub-Branch. Mr Wright submitted several times that the fact that use for gaming (or general entertainment) was permitted by the Rules of the second appellant (or was an RSL use) was not to the point if use of that kind developed a dominance, scale or intensity such that it might fairly be described as a use of the land in its own right. In my opinion, this submission carried the seeds of its own rejection: the fact that gaming (or general entertainment) was authorised necessarily meant that in that regard the land was being used in the capacity and for the purposes of, and therefore as, a Sub-Branch of
the RSL. Cadit quaestio. Whether or not the gaming (or general entertainment) activity was predominant or preponderant is immaterial. Mr. Wright also asserted more than once that “the passenger on a Traralgon bus”, going past the land, would say that it was a gaming venue and an RSL Sub-Branch. I very much doubt that, but in any case, for reasons just given, that would not gainsay the necessary exclusive use as an RSL Sub-Branch.
For the reasons given, the appeal to this Court should be allowed, the judgment below set aside, the appeal to the County Court allowed and relief granted to vindicate the exempt status of the land for the year ended 30 June 1999. I would hear the parties as to the precise form of that relief and to costs.
BUCHANAN, J.A.:
In my opinion the appeal should be allowed for the reasons stated by Batt, J.A.
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