Ryde Municipal council v Macquarie University

[1978] HCA 58

HIGH COURT OF AUSTRALIA

Gibbs A.C.J., Stephen, Jacobs, Murphy and Aickin JJ.

RYDE MUNICIPAL COUNCIL v. MACQUARIE UNIVERSITY

(1978) 139 CLR 633

19 December 1978

Local Government (N.S.W.)

Local Government (N.S.W.)—Rating—Exemption—Land vested in University used or occupied by it solely for its purposes—Land used or occupied by charity for its purposes—Building in University grounds let to shopkeepers—Convenience to staff and students of University—Whether building used by University or by charity—Whether use solely for the purposes of University—Local Government Act, 1919 (N.S.W.), s. 132.

Decisions

Dec. 19.
The following written judgments were delivered: -
GIBBS A.C.J. The respondent, Macquarie University, obtained from Waddell J. in the Supreme Court of New South Wales a declaration that certain land, which forms part of the land owned by the University and on which the University is situated, is not ratable under the Local Government Act, 1919 (N.S.W.), as amended ("the Act"). An appeal to the Court of Appeal was dismissed by a majority. The appellant, Ryde Municipal Council, now appeals to this Court by special leave. (at p635)

2. The grounds of the University extend over an area of some 336 acres. The land in question, known as the market, is more or less at the centre of that larger area and has a frontage to the north-western corner of the University court of approximately 202 ft. by a depth of about 72 ft. From the time when the University was first planned, it was intended that there should be a section of the University devoted to commercial and shopping facilities, and in order to achieve this object the land was made available to the Macquarie University Union, an association of members of the council, staff, graduates and students of the University. The objects of the Union include the promotion of the welfare of the University and the provision and maintenance for its members of a common meeting ground and social centre and such other facilities as may be necessary to secure the further objects of the Union. A two-level building was constructed on the subject land; this was done by the Union with the authority of the council of the University, and the construction was financed by a loan to the union which the University guaranteed. Thereafter, parts of the building were leased to various tenants. The leases were not put in evidence, but it appears that they were granted by the Union with the approval of the council. In the circumstances, it is not material whether the University itself let the premises or consented to the Union doing so. The tenants carry on business in the leased areas for various commercial purposes - there is a co-operative bookshop, a retail shop, a chemist shop, an office leased to the Australian Union of Students for the purposes of a travel centre, branches of two banks, a handicrafts and gift shop and an area occupied by the University Sports Association which also includes a shop. The shops operate with a view to profit but primarily serve the students and staff of the University. The banks provide a general banking service, and lend money for housing and other purposes. The shops and the banks are open to the general public but it is unlikely that many members of the public patronize them. It is common for universities nowadays to arrange for shopping and commercial facilities to be available within their grounds. The nearest similar facilities outside Macquarie University are about two miles away. The commercial centre in the market building was intended to provide a convenience to staff and students, and to save their time, but it is also a valuable source of income for the Union. (at p636)

3. The land in question does not constitute a separate parcel; it forms part of a larger parcel or parcels, the balance of which is admittedly not ratable. Under s. 139 (3) of the Act, every rate is to be levied in respect of a separate parcel of land, but by s. 134 (3) any parcel separately valued under the Valuation of Land Act, 1916 (N.S.W.) is to be a separate parcel for the purposes of the Act. In the present case it appears to be doubtful, to say the least, whether a valuation was properly made in conformity with the provisions of the Valuation of Land Act, particularly those of s. 27 (4). This question was not the subject of consideration in the courts below and I therefore express no opinion upon it. However, both parties have requested that the question whether the subject land is ratable should be determined, leaving for possible further consideration elsewhere the question whether the rate notice was otherwise properly issued, and in all the circumstances it appears convenient to adopt that course. (at p636)

4. By s. 132 (1) of the Act all land in a municipality or shire is declared to be ratable but the section contains a number of exceptions including the following:
"(d) Land which belongs to any . . . public charity, and is used or occupied by the . . . charity . . . for the purposes thereof
. . . (fii) Land which is vested in the Macquarie University, or in a college thereof, and is used or occupied by the University or college, as the case may be, solely for the purposes thereof". It was held by Waddell J. and by the majority of the Court of Appeal that the land comes within the description contained in par. (fii). In the alternative, however, the respondent contends that it comes within par. (d). (at p636)

5. The land in question is vested in the University. To come within par. (fii) it must also be used or occupied by the University solely for the purposes thereof. The word "solely" in this paragraph does not in my opinion govern the phrase "by the University"; its position in the paragraph, and the interposition of the commas, and of the words "as the case may be", show that it relates to "the purposes". In other words, the paragraph does not refer to land used or occupied solely by the University, but to land used or occupied by the University solely for its purposes. There thus arise in the present case three questions, which are, of course, interrelated, viz. (1) was the land used or occupied by the University; (2) if so, was the use or occupation for the purposes of the University; and (3) was it solely for those purposes? (at p637)

6. It was not argued by the respondent in the present case that the areas leased to the various tenants were occupied by the University. Although the leases were not put in evidence, it may be assumed that the tenants were given exclusive possession of the areas leased to them, exercised control over those areas and were in occupation of them. The question is whether those areas were nevertheless used by the University. The submission on behalf of the appellant was that the University has, by granting or approving of the leases, yielded up the exclusive use and occupation of the areas to the tenants, and that it was the tenants, and not the University, who actually used those areas. (at p637)

7. No-one can doubt that "used" is a word of wide import, and that its meaning in any particular case depends to a great extent on the context in which it is employed. It is hardly necessary to cite the observations of Taylor J. in Newcastle City Council v. Royal Newcastle Hospital (1957) 96 CLR 493, at p 515 to support those propositions. One thing that the context provided by s. 132 (1) of the Act does make clear is that "used" is not meant to be synonymous with "occupied". In some of the paragraphs of that sub-section the word "used" appears alone, i.e., without any reference to occupation: see pars (a), (b), (c), (e). In other paragraphs, the expression employed is "used or occupied": see pars (cl), (d), (d1), (f), (fi), (fii), (fiii), (fiv), (fv). In all these paragraphs the land is to be "used and occupied" by a named body, or in the case of par. (d) by a hospital, institution or charity, "for the purposes thereof" (or "solely for the purposes thereof"). Five of these paragraphs refer to land used or occupied by a named university or a college thereof. In a third group of paragraphs, the phrase is "occupied and used": pars (g), (h), (j), (1). It is quite apparent that where the expression "used or occupied" appears, "used" refers to some form of use other than actual occupancy, and Isaacs J. recognized that this was so in an early case in which the section was considered: Knowles v. Newcastle Corporation (1909) 9 CLR 534, at p 545 . In Commissioner of Valuation for Northern Ireland v. Fermanagh Protestant Board of Education (1969) 1 WLR 1708, at p 1728; (1969) 3 All ER 352, at pp 364-365 , Lord Diplock referred to authority which constrained the English courts to hold that in the context of a rating statute "the only relevant use is that of the person who in English law is in 'occupation' of the hereditament". That authority is not applicable in New South Wales, where the primary obligation to pay rates is on the owner (s. 144 of the Act) and where the context of s. 132 shows that use other than by an occupier is relevant. (at p638)

8. A person who owns land may be said to use it for his own purposes notwithstanding that he permits someone else to occupy it, even under a lease. That is almost beyond argument when the owner's purpose is to acquire income. In the ordinarily accepted meaning of the word a building is "used" for the purpose of acquiring income if rents are derived from it, and an owner of premises who leases them is making use of those premises by employing or applying them for the purpose of letting: Commissioner of Income Tax v. Hanover Agencies Ltd. (1967) 1 AC 681, at p 689 . But that is not the only way in which an owner of land may use it by letting it to someone else. An employer who provides premises in which he requires an employee to live so that the employee may perform more efficiently the duties of his position is in my opinion himself using those premises. That this is so is clear when the employee occupies them under a licence rather than under a lease. In Glasgow Corporation v. Johnstone (1965) AC 609 , it was held by the House of Lords that a house occupied rent free as a residence by a church officer, who was bound to occupy the house during his employment by the church, was "wholly or mainly used for charitable purposes" within a rating statute. Lord Reid said (1965) AC, at p 622 :

"They (the congregational board of the church) "use the house to have a servant on the spot to assist them in the more efficient performance of their charitable activities. I think that it is much too narrow a view simply to see whether any charitable activity is carried on in the house . . . If the use which the charity makes of the premises is directly to facilitate the carrying out of its main charitable purposes, that is, in my view, sufficient to satisfy the requirement that the premises are used for charitable purposes."

Lord Evershed (1965) AC, at p 624 and Lord Hodson (1965) AC, at p 628 both adopted the statement of Lord Wheatley in the Court of Session, that "the use to which they are putting the premises is to have a resident church officer for the proper and more efficient carrying out of those church affairs which are the responsibility of that officer." This decision is quite inconsistent with the view that the questions by whom, and for what purposes, premises are used must be answered by considering only what is done on the premises. In this Court, in Knowles v. Newcastle Corporation (1909) 9 CLR 534 it was held that a house vested in the Chief Commissioner for Railways, and occupied rent free by a station-master, who was required as a condition of his employment to reside there so that he might be available in case of emergency, was "actually used for the purposes of the Government railways or tramways, or purposes connected therewith", within s. 132 of the Act as then in force. It was not necessary to decide whether the house was so used by the Commissioners, but O'Connor J. said (1909) 9 CLR at p 543 :

"It is said that the actual use is by the station-master, not by the Commissioners, but if the station-master actually does use the house under the direction of the Commissioners, I find it difficult to see how it can be said that it is the station-master and not the Commissioners who uses the house."

In cases such as these it does not seem to me to be material whether the employer has given a lease or only a licence to the employee required to occupy the house. If the only relevant use is that of the person in "occupation" (as is the case under the English rating law mentioned by Lord Diplock in Commissioner of Valuation for Northern Ireland v. Fermanagh Protestant Board of Education (1969) 1 WLR 1708; (1969) 3 All ER 352 ) the fact that a lease had been granted might show that the employer was not the occupier of the demised house, but, as I have pointed out, the position is different in New South Wales. Where use, and not occupation, is in question, I can see no reason to disregard the indirect use which an employer makes of a house by providing it as a residence for the use of his employees. If, for example, a university considered it desirable in its own interests that the vice-chancellor should live in particular premises which the university owned, the university would, in my opinion, use those premises if it made them available as a residence for the vice-chancellor, and this would be so whether the premises were let or occupied under licence. (at p639)

9. In my opinion, therefore, land may be "used" by a university, in the ordinary and natural meaning of that word, if the university grants a lease of the land for the purposes of the university. I can see no reason why a restrictive meaning should be given to the word where it appears in s. 132 (1) (fii). Paragraph (fii) was inserted in the Act by an amendment effected by the Macquarie University Act, 1964 (N.S.W.). By s. 7 (b) of that Act the University may, for the purpose of discharging its functions, provide such facilities for its undergraduates as it deems desirable. Long before 1964 it had become customary for universities to permit some commercial enterprises to be carried on within their grounds. It had become recognized as convenient that students and staff should be able to do some shopping and banking business within the university precincts. The framers of par. (fii) must have contemplated that there would probably be, on the land vested in Macquarie University, small commercial establishments to provide for the needs of the students and staff. It was not perhaps necessary that members of the University should be enabled to do their shopping and banking within the University precincts, but it was normal and desirable. The provisions of both s. 7 (b) and par. (fii) should be construed in the light of these circumstances. If the University thought that its activities would proceed more efficiently and harmoniously if some parts of its land were used to set up commercial establishments for the use of students and staff, it would be entitled to provide such facilities, under s. 7 (b), and it can hardly be supposed that it was the intention of the legislature that it would lose its exemption from rating under par. (fii) if it did so. But the University might provide facilities of this kind in various ways. It might provide them itself. It might engage an independent contractor. It might grant the person supplying the goods or services a licence to occupy part of the University land for that purpose. It might grant a lease to the persons conducting the shop or other business. There is nothing in par. (fii) to suggest that if the University adopts one of these expedients, rather than another, it loses its exemption. Naturally construed, par. (fii) extends to any use of the land, direct or indirect, including such use of it as is made by granting a lease. (at p640)

10. I need not review the multitudinous authorities in which the courts have explained the meaning of "use" or "used" in particular contexts. There are however some decisions upon which particular reliance was placed and to which I should refer. In Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 the question for decision was whether glebe lands, vested in trustees for church purposes, but let on building leases, were exempt from land tax as being lands "occupied or used exclusively for or in connection with" public charitable purposes or a church. The statutory provision there considered did not make it necessary to decide by whom the use was made; the question was for what purposes the lands were used. The decision is of more importance in relation to the second question which arises in the present case than to the first, but there are some words in the judgment which Lord Davey delivered on behalf of the Judicial Committee which do touch upon the first question. Lord Davey said (1902) AC, at pp 420-421 :

"But, reading the whole of s. 11, sub-s. 5, of the taxing Act, their Lordships think that the words point rather to the use and occupation of the land itself, and do not prima facie apply to the use or purpose to which the rents and profits derived from the land may be applied. A private dwelling house is used and occupied by the owner or lessee of it as a residence for himself and his family, and it would, in the opinion of their Lordships, be a forced construction to say that it was used by the lessors for their own purposes because they apply the rent which they receive in a particular way. If it be said that the land is used by the trustees, though not by the lessees, for the charitable purpose, the answer would seem to be that the land is, strictly speaking, not used by the trustees at all. They have parted with the use and occupation of it during the term of the lease. It is the money derived from the rents and profits which they use and not the land."

The decision is authority that church lands, let for the purpose of creating income for the church, are not used for the purposes of the church within a taxing or rating statute. The penultimate and antepenultimate sentences of the passage cited do, it is true, suggest that in such a case the church does not use the lands at all, and thus support the appellant's argument. However, Lord Davey's words must be read in the light of the facts of the case and the question in issue. Their Lordships were not called on to decide whether the land was used or occupied by the trustees; the question was for what purpose were they used. (at p641)

11. The next case is Stephen v. Federal Commissioner of Land Tax (1930) 45 CLR 122 . One of the questions that there arose was whether land at Randwick, vested in trustees and leased by them to the Australian Jockey Club, which used it as a racecourse, was exempt from taxation by reason of s. 13 (g) (7) of the Land Tax Assessment Act 1910 (Cth), as amended which exempted "all land owned by or in trust for any person or society and used or occupied by that person or society solely as a site for . . . a . . . public recreation ground". The whole court held that the racecourse was not used as a public recreation ground and that for that reason the claim to exemption failed. In that respect the case has no bearing on the present question. However Isaacs J. stated briefly an additional reason for his conclusion. He said (1930) 45 CLR, at p 132 : "As to the leased property, there is the further answer that it is not used or occupied by the owner of the land at all." That observation is of course entitled to the weight that attaches to any statement by that learned judge, but he gave no reasons in support of it. Even if it may be regarded as one of the grounds of his decision, it was not part of the ratio decidendi of the Court, for no other member dealt with that aspect of the matter. Dixon J. (1930) 45 CLR, at p 140 , said that s. 13 (g) (7) "looks to the actual use or occupation of the land". This statement also was relied on in argument before us, but it appears to me to have nothing to do with the present question. What Dixon J. was saying was that what had to be considered was the actual use to which the land was put, rather than the use to which it theoretically ought to be put, for example, having regard to the recital in the Crown grant, which, as Dixon J. mentioned (1936) 45 CLR, at p 139 , was to the effect that it was desirable that the land should be dedicated for the purposes of public recreation. When the question is whether land is used as a public reserve, it seems clearly necessary to have regard to what is actually done on the land itself. However, Dixon J. did not discuss whether, in some circumstances, land can be used by a person who lets it. (at p642)

12. Reliance was also placed on Randwick Corporation v. Rutledge (1959) 102 CLR 54 , which also concerned the land on which Randwick racecourse was situated. The question for decision was whether that land was exempt from rating under s. 132 (1) (c) of the Act, as land "used for a public reserve". It was not necessary to decide whether the use was that of any particular person. However Windeyer J. said (1959) 102 CLR, at p 88 :

"But is the land used for a public reserve? 'This provision', as Dixon J., as he then was, said in a similar matter, 'looks to the actual use . . . of the land' (Stephen v. Federal Commissioner of Land Tax (1930) 45 CLR, at p 140 ). The only way in which the trustees use the land is by leasing it to the club, to be used by it as a racecourse . . . Indeed the land is not really used by the trustees at all, for they have parted with the use and occupation of it for the term of the lease (Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 ). When the Act speaks of land used for a public reserve it is referring to the actual use to which the land is put by the persons who in law control it for the time being."

In that passage Windeyer J., himself speaking obiter, repeated the dictum of Lord Davey in Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 . His statement is of course entitled to the highest respect, but it was not directed to the question that arises in the present case. (at p643)

13. I do not understand any of the learned judges whose words I have cited to have been purporting to lay down an inflexible rule of construction that land can never be "used" (within the meaning of a rating statute) by an owner who has leased it. The decisions to which I have referred do not bind me to give a narrow construction to "used" in the context of par. (fii). In my opinion land vested in the University may be "used . . . solely for the purposes thereof" within that paragraph, notwithstanding that it is occupied by a tenant holding under a lease. (at p643)

14. The next question is whether the land in question was used for the purposes of the University. According to the Macquarie University Act, 1964 (N.S.W.), s. 6, the functions of the University (as one might expect) include the provision of educational facilities, the dissemination of knowledge and the promotion of scholarship. The purpose of the University was to perform those functions. Ordinarily speaking, one would not say that the purpose of the University was to provide shops or other commercial establishments for the use of staff or students. However, it is now well settled that when an exemption from rates or taxes is given in respect of land used for the purposes of a charity, the exemption is not confined to land used for those purposes the pursuit of which make the body a charity, i.e., which give it its character as such. If the land is used for purposes which are "merely a means to the fulfilment" of the charitable purposes and "incidental thereto" it is within the exemption: Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR 159, at pp 169, 171 . In other words, if the use which the charity makes of the land is "wholly ancillary to", or "directly facilitates", the carrying out of its charitable objects, that is sufficient to satisfy the requirements that the premises are used for charitable purposes: Glasgow Corporation v. Johnstone (1965) AC, at p 622 ; Oxfam v. Birmingham City Council (1976) AC 126, at p 139 . If, on the other hand, the use is only "collateral" or "additional" to the purposes which give the charity its character as such, the land will not be used for the purposes of the charity: Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR, at p 169 . The same tests are applicable under par. (fii). (at p643)

15. If the land in question had been let simply to raise money for the purposes of the University, the decision in Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 would have been directly applicable, and it would not have been possible to say that the land was "used" for the purposes of the University within par. (fii): see also Oxfam v. Birmingham City Council (1976) AC, at pp 140-141 . However, it is proper to conclude from the evidence that the University arranged for the building to be erected on the market because the commercial enterprises which it was to contain were regarded as necessary or desirable for the functioning of a university under modern conditions. Although it is no doubt right to concentrate attention upon the use to which the particular parcel of land the subject of an appeal is put, that does not mean that the land is to be regarded in isolation from its surroundings. It is in my opinion relevant and important that the subject land in the present case is a small area near the very heart of the University, and that the construction of the building on the market, and its use for commercial purposes, were intended from the time when the University was first planned. The use of the land was wholly ancillary to, and directly facilitated, the carrying out of the principal objects of the University; it was not collateral or additional to those purposes. The land in question was rightly held to be used for the purposes of the University. (at p644)

16. Was it used "solely" for those purposes? The question must be considered from the point of view of the University - was the use, by the University, solely for its purposes? The fact that the University derives some subsidiary and incidental benefit from using the land for its purposes does not mean that the land is not used exclusively for University purposes: Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR 54, at p 170 . In Randwick Corporation v. Rutledge (1959) 102 CLR, at p 94 , Windeyer J. said:

"When such words" (as 'exclusively' or 'solely') "are present, it is a question of fact whether the land is being used for any purpose outside the stipulated purpose . . . As Kitto J. said in Lloyd v. Federal Commissioner of Taxation (1955) 93 CLR 645, at p 671 , such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use."

The word "solely" may do no more than add emphasis, or perhaps precision. The present is not one of those cases in which part of the land in question was used for one purpose, and part for another. The question is whether in letting the land, or in approving of the grant of the leases by the Union (whichever was technically the position), the University was pursuing the independent object of obtaining revenue from the rents. It was put in argument before us that the learned primary judge did not expressly find that the purpose of gaining revenue was only incidental, but that is, I consider, implicit in his findings. He found that the council of the University was "fully entitled to come to the conclusion that the establishment of the facilities in question was calculated to promote the objects and interests of the University by avoiding the necessity of students and staff seeking such facilities having to spend time travelling to other shopping centres". He further found that the land "should be regarded as used by the University for its purposes because, although leased to various tenants for commercial purposes, they provide facilities which the University considers to be necessary or incidental to achieving its purposes". It cannot be inferred from his findings, and the evidence does not suggest, that the University, in letting the land, was pursuing the independent purpose of raising money. The receipt of the rent by the Union was a subsidiary and incidental (although, no doubt, by no means a negligible) benefit from the use of the land for the purposes of the University. (at p645)

17. For the reasons I have given I have reached the conclusion that Waddell J. and the majority of the Court of Appeal were correct in holding that the land was used by the University solely for the purposes thereof within par. (fii) of s. 132 (1) of the Act. It is therefore unnecessary to consider whether the land also fell within the description contained in par. (d) of that sub-section. (at p645)

18. I am of the opinion that the appeal should be dismissed. (at p645)

STEPHEN J. Near the centre of the campus of Macquarie University stands the "market", a two storeyed building of some size which houses two banks, a bookshop, a travel centre, a retail store and associated storeroom, a handicrafts gift shop, a hairdresser's shop and premises of the University Sports Association, which itself includes a small retail shop. (at p645)

2. The local Council seeks to rate the site of this building: the University claims exemption from rates upon two grounds. The only ground which I need consider is that provided by s. 132 (1) (fii) of the Local Government Act, 1919 (N.S.W.), which exempts "land which is vested in the Macquarie University or in a college thereof, and is used or occupied by the University or college, as the case may be, solely for the purposes thereof". This particular exemption was inserted in the Local Government Act by a provision of the Macquarie University Act, 1964 (N.S.W.), which was the legislation by means of which this University was established. (at p646)

3. The site of the market is vested in but is not occupied by the University: instead it is the various tenants who conduct their respective businesses at the market who are the occupiers. The market has nothing to do with any college of the University. Accordingly, if this ground of exemption is to be applicable, it must be because the market is "used by the University solely for the purposes thereof", within the meaning of s. 132 (1) (fii). This phrase, distilled from the text of par. (fii), contains no terms of art. I shall first seek to determine its meaning according to the ordinary usage of its words and how that meaning bears upon the present facts, doing this without reference to authority. I shall then turn to the authorities to see whether they require that any conclusion different from that suggested by ordinary meaning should be reached. (at p646)

4. It is convenient to begin with the word "solely". Does this refer to "University" or, rather, to "used . . . for the purposes thereof": must land be used solely by the University or is it its use which must be solely for University purposes? Positioned as it is immediately before the words "for the purposes thereof", "solely" must, I think, be concerned with the particular use rather than the particular user, with exclusiveness of use for University purposes and not with exclusive use by the University. This is certainly the effect which the particular sequence of the words in the phrase has upon its meaning. With it may be contrasted a phrase containing the same words but in different sequence - "used solely by the University for the purposes thereof". Had that been the wording of the phrase, "solely" would clearly enough have qualified "the University", the user and not the use. As it is in fact worded, the contrary is the case. (at p646)

5. This conclusion is supported by an examination of the wording of the remaining exemptions in s. 132 (1). There are in all eighteen of them. Of these, the last six, from (g) to (1), may be put to one side, each is concerned with a quite special case, and hence conform to no particular pattern; the remaining twelve, of which par. (fii) is one, are, however, cast in similar moulds. In each the body in which land is vested is first stated and there follows a description of a particular use, or use or occupation, to which the land must be subject. This description of use is either explicit, for example, "for a public cemetery", or is by reference to the purposes of the owner, as it is in par. (fii), in which case, after identifying the owner, for example, Macquarie University, reference is made to use or occupation by that owner "solely" for the purposes thereof". Where the description of use is explicit the word "solely" never appears: "solely" is employed only where the relevant use is described by reference to the purposes of the owner; even in par. (e), where the pattern of drafting is slightly different, this holds true. This fact, that the presence of "solely" in an exemption is coincident with the employment of the owner's purposes as descriptive of the use to which the land must be put, emphasizes the relationship between "solely" and the use in question and the lack of relationship between "solely" and the particular user. (at p647)

6. A second and more difficult question of construction concerns the exact meaning of "used by the University". Again a study of the first twelve paragraphs of s. 132 (1) is helpful: wherever the context is such as of itself to point to some particular meaning of "used", it is the meaning of land being made available by its owner for use for a particular purpose, rather than any active personal use by the owner itself, that is conveyed. The exemptions which refer to uses "for a public cemetery" in par. (a), "for a common" in par. (b), "for a public reserve" in par. (c) or "for the purposes of a free public library" in par. (e) illustrate this. The fact that these four exemptions, unlike the other eight, contain an explicit description of the relevant use, instead of simply referring to use "for the purposes" of the specified owner, does not, I think, suggest the adoption of any different meaning of "used" in the case of the other eight paragraphs and the very descriptions of those who may be owners of exempted lands, as appearing in the latter eight paragraphs, themselves suggest that "used" has there such a meaning. It seems a particularly appropriate meaning to apply to the use of land for the purposes of the five tertiary educational institutions referred to in pars (f) to (fiv), whose principal use of land must involve the provision of facilities in which others, the student body, may undertake their tertiary studies. (at p647)

7. This distinction that I have sought to draw, between active, personal use of the land by the owner of it and its use by being made available for use by others for a particular purpose, may in any event involve unnecessary refinement of meaning in the present case. By s. 4 (2) of the Macquarie University Act, 1964 the University is incorporated and s. 4 (1) describes the University as "consisting of a Council and Convocation and graduate and undergraduate members". Thus if undergraduates, to whom the University makes land available for their use, are in consequence the active users of that land, this use of it by them will constitute its active, personal use by the University, of which they are a constituent part. (at p648)

8. The remaining component of the phrase "used by the University solely for the purposes thereof" consists of its last four words. The identity of that which is comprised in the "purposes" of the University, in the present context of use or occupation of land, is not, I think, to be found in whatever may, in the case of this University, be thought to correspond, however imperfectly, to the objects clause of a company's memorandum of association. It is as unnecessary in this case, as it was in Kathleen Investments (Australia) Ltd. v. Australian Atomic Energy Commission (1978) 139 CLR at p 117 , to examine what distinctions exist between the restraints imposed upon a company by its objects clause and those which affect a statutory corporation because of the limited powers conferred upon it by its constituting Act: the theory and purposes of each are quite different. It is enough for present purposes to conclude that, in determining the "purposes" of this university to which s. 132 (1) (fii) refers, inquiry should not be restricted to the first limb of the function - power dichotomy familiar in the case of entities incorporated by Act of Parliament and of which Macquarie University furnishes an instance. (at p648)

9. Section 6 of the Macquarie University Act, 1964 provides that "the function of the University shall, within the limits of its resources, include" the matters set out in three following paragraphs. It is noteworthy that, as the use of "include" in its opening words makes clear, s. 6 does not, in contrast to a company's objects clause, purport to be any exclusive repository; the reference to "the limits of its resources" may also be noted. Of the three paragraphs of s. 6 only the first and third are relevant:
"(a) the provision of educational facilities at University standards for persons who being eligible to enrol seek the benefits of such facilities;
. . . (c) the dissemination of knowledge and the promotion of scholarship otherwise than as hereinbefore provided." Section 7 (b) provides that the University:

"(b) may, for the purpose of discharging its functions, provide such facilities for its undergraduates and students and other persons as it deems desirable."

Section 21 confers upon the council of the University a variety of specific powers and the scope of the by-law making power conferred by s. 23 itself indicates the broad reach which the University's functions and powers are intended to have; as, for example, in its grant of power to make by-laws for the establishment and conduct of residential colleges although no mention of the establishment of such colleges elsewhere appears in the Act. (at p649)

10. In the present case the provision to students and staff, on the University campus, of those facilities which the market now offers is, in my view, a use of the site of the market "for the purposes" of the University within the meaning of par. (fii) of s. 132 (1): it falls within the specific terms of s. 7 (b) as a provision of such facilities for its undergraduates, for the purpose of discharging its functions, as the University deems desirable. To make good this proposition requires the application of par. (fii) to the facts of this case, a matter to which I now turn. (at p649)

11. I have already briefly described the uses to which the market is now put; its history is recounted by the learned primary judge who heard much evidence about it. An area of the campus devoted to commercial, banking and shopping facilities was envisaged from the outset of planning of the University, its purpose being to avoid the need for staff and students to leave the campus in order to visit the nearest similar facilities, situated in suburbs over three kilometres away. The provision of such facilities on university campuses is now common both in Australia and overseas. The planning, development and, ultimately, the fulfilment of the concept represented by the present market building took place under the supervision of the University council. His Honour found that the council was fully entitled to conclude that the existence of these facilities would promote the objects and interests of the University and that in letting portions of the market to the various tenants who now occupy it the purpose was not the deriving of rental income but, rather, that the facilities which the conduct by them of their several businesses would afford might be made available to staff and students. It would, of course, have been astonishing if the fact had been otherwise: the use of university premises, no doubt erected at the public expense, for the purpose simply of deriving rental income is not lightly to be imputed to a university council. (at p649)

12. It is to this complex of facts that the phrase "used by the University solely for the purposes thereof" must be applied. That the market and its site is in fact made available by the University for the purpose of providing commercial and shopping facilities for staff and students cannot be doubted; that represents the mode in which the land is "used" within the meaning of that word in par. (fii). This use of the land by the University is the sole use which it makes of it. The fact that it receives rent from the tenants of the market does not detract from the exclusiveness of this use: it is, in my view, and in the light of the above findings of fact, no more than an incident of this exclusive use. The facilities available at the market are just such "facilities for its undergraduates and students and other persons" (s. 7 (b)) as one might expect the council of a university established in recent years to regard as desirable for the purpose of "discharging its functions" and the fact is that the council of this University has indeed at all times been of this view. The site of the market is, accordingly, in my view, land which is used by the University solely for the purposes thereof within par. (fii) and is therefore exempt from municipal rates. The fact that rent is received from tenants is irrelevant, as is the fact that each of the several tenants may be said to make use of the particular portion of the market which is leased to it. This use is, like the receipt of rent by the University, no more than an incident of the use of the site for the provision of appropriate facilities to staff and students, which in turn is a proper purpose of the University. (at p650)

13. It remains to see whether any authorities stand in the way either of my interpretation of the meaning of par. (fii) or of my mode of application of it to the facts of this case. First as to meaning: I take the components of the phrase "used by the University solely for the purposes thereof" in the same order as previously. "Solely" and its equivalents in comparable legislation have been the subject of much judicial commentary but for present purposes it is enough to refer to two cases only. In Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR 159 the question whether land was used "exclusively for charitable purposes" was in issue and it was held that the sale of produce grown at a training farm for delinquent boys in no way prejudiced the land's exemption from rates: "it would be fantastic to hold that the land would not be ratable if the appellant destroyed or gave away the surplus products resulting from such trading that remained after satisfying the needs of the inmates but that it would be ratable if it disposed of such surplus at a profit and used that profit in aid of the revenues of the institution": (per Dixon C.J. and Williams and Webb JJ. (1952) 85 CLR, at p 171 ). The commercial activity involved in the sale of produce was "merely incidental to the pursuit on the land of the charitable objects of the occupier" (1952) 85 CLR, at p 171 . So here the receipt of rents by the University is likewise incidental to the use of the Market for the purposes of the University. In the much cited judgment of Windeyer J. in Randwick Corporation v. Rutledge (1959) 102 CLR 54, at p 93 , his Honour spoke of the use of "solely" and "exclusively" as familiar in rating law and as adding emphasis, its function being to exclude cases where land is used for purposes which are "collateral or independent, as distinct from incidental to the stipulated use" (1959) 102 CLR at p 94 . Applying this to the present case, there is, in my view, no element of collateral or independent purpose present in this case: the only use made of the market site by the University is in the provision of facilities to staff and students. (at p651)

14. Then, as to the words "used by the University" for its purposes, it is a truism that "use" is not a word having any single, precise meaning. It is "a word of wide import and its meaning in any particular case will depend to a great extent upon the context in which it is employed" per Taylor J. in Newcastle City Council v. Royal Newcastle Hospital (1957) 96 CLR 493, at p 515 . On appeal in that case (1959) 100 CLR 1, at p 4; (1959) AC 248, at p 255 Lord Denning, speaking for their Lordships, equated use of land with the deriving by the user of an intended advantage from the land. Thus an owner might use land "by keeping it in its virgin state for his own special purposes". Here the advantage which the University intends to derive from the market is the furtherance of its purposes by the provision to staff and students of those facilities which the market now affords them. This is just such a use as par. (fii) contemplates. In the Randwick Corporation Case (1959) 102 CLR, at p 88 Windeyer J., speaking of "used" in s. 132 (1) (c), described it as referring "to the actual use to which the land is put by the persons who in law control it for the time being". There is, I think, no marked conflict between this meaning and the sense in which I have interpreted "used" in par. (fii), as meaning the particular use for which land is made available by its owner. In this regard the language of Pennycuick J. in Parker v. Ealing Borough Council (1960) 1 WLR 1398 is in point. His Lordship, concerned with an exemption in a rating statute for playing fields occupied for purposes of clubs, treated "for the purposes" as signifying "carrying on the activities of", a concept which I regard as akin to that which I have adopted in the meaning which I would give to the reference to use of this land by the University for its purposes. (at p651)

15. There are a number of cases in which the letting of premises has been held to disqualify them from being regarded as "used" by their owner for particular purposes which would earn exemption from rates or land taxes. They are, however, cases in which the only connexion between the letting and the purposes of the owner has been the application to those purposes of the rent received from tenants. They provide a clear instance of a collateral or independent use of land such as was spoken of by Windeyer J. in the Randwick Corporation Case (1959) 102 CLR, at p 94 . The judgment of Sugerman J. in Young Men's Christian Association v. Sydney City Council (1954) 20 LGR (NSW) 35, at pp 44-45 , earlier in time that that of Windeyer J., offers a detailed analysis of the problem and clearly distinguishes between land uses which are no more than "concomitant, or ancillary or incidental" to purposes specified in s. 132 (1) and others which are "additional or collateral" thereto. His Honour said that the use of land by a charity, albeit involving the receipt of money or even of net profits, would not necessarily disqualify the land from rate exemption unless what was involved was "the pursuit of some merely additional or collateral non-charitable activity whose profits are applied in aid of the charitable purpose". Had the learned primary judge concluded that in the present case the University had erected the market and granted leases of it so as to earn income from it, in effect using its site as a rent-producing investment, it would have been of no avail that the rent received was applied to University purposes. Long-established authorities such as Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 would stand in the way. However the judge's findings of fact are quite to the contrary and disclose a situation in which the receipt of rental income is no more than incidental to the pursuit of a purpose of the University. (at p652)

16. In Waverley Municipal Council v. New South Wales Board of Jewish Education (1959) 5 LGRA 122 the leasing by a public charity of land owned by it to an employee to serve as his residence was held to exclude the land from exemption to rates under s. 132 (1) (h). It so operated because use as a residence was "merely additional or collateral to the purposes which characterize the Board as a public charity" (per Herron J. (1959) 5 LGRA, at pp 126-127 ). With the facts of that case may be contrasted the lettings in the present case, which are undertaken exclusively and directly in the course of providing facilities to staff and students. Many facilities on a University campus, from car parks to cafeterias, from cloakrooms to barber shops, can no doubt be conducted in different ways: they may be staffed by University servants; franchises may be given to entrepreneurs who staff those facilities, charging for their use and perhaps paying the University for the franchise; leases of the facilities may be granted to tenants. However it is done, the persons operating the facilities in a sense "use" them; certainly a franchise holder does so, having a licence to enter and use the premises in question so that he may provide the facilities in question to those who are to enjoy them. But these uses of University facilities, whether or not involving leases, are but incidental to and in no way detract from the exclusiveness of the use of the facilities by staff and students. On the contrary, they promote that use and may even be found to be essential to the full exercise of that use. They are not instances of "dual use" of land, as it is sometimes called; if an adjective were to be applied to them "subservient" might be appropriate since these uses, from their purpose and effect, subserve the primary uses to which the land is devoted. To say that a University cafeteria, whether franchised or leased to a catering firm, is any the less used "solely" for the provision of meals to students than it would be were it staffed by servants of the University seems to me to involve a distortion of language and to be no less "fantastic" in result than that which was so described in the passage from the Salvation Army Case (1952) 85 CLR 159 at p 171 which I have cited above. The facilities here in question include those afforded by banks, travel agents and retail general stores and it is scarcely conceivable that University servants should be employed in providing them. Yet their provision to staff and students may none the less be a proper purpose of a university whose campus is more or less remote from urban commercial development. Such is the situation at Macquarie University. (at p653)

17. There is, in my view, nothing to be found in the authorities which runs counter to the view which I have formed as to the meaning of par. (fii) of s. 136 (1). Accordingly I conclude that the site of the Markets falls within that paragraph. (at p653)

18. I would dismiss this appeal. (at p653)

JACOBS J. I have had the advantage of reading the reasons for judgment prepared by Aickin J. I agree with his conclusion that the appeal should be allowed and with his reasons for that conclusion. (at p653)

MURPHY J. I agree with Stephen J.'s conclusions and reasons. The appeal should be dismissed. (at p653)

AICKIN J. The proceedings out of which this appeal arises were commenced in the Equity Division of the Supreme Court of New South Wales where the respondent Macquarie University ("the University") sought a declaration that certain land, the subject of a rate notice dated 15th February 1974 issued by the Ryde Municipal Council ("the Council"), was not ratable under the Local Government Act, 1919 (N.S.W.), as amended ("the Act"). The University appealed against the levying of that rate to the Land and Valuation Court pursuant to s. 133 (2) of the Act. For reasons which are referred to in the judgment of Waddell J. in the Equity Division, the parties agreed that the issue should be determined by a proceeding for a declaration in the Equity Division (1976) 2 NSWLR 36 . (at p654)

2. A further preliminary point which should be mentioned is that it is now said that the rate notice issued by the Council is invalid because the valuation on which it is based was not made in accordance with the provisions of the Valuation of Land Act, 1916 (N.S.W.), as amended, which governs the making of valuations by the Valuer-General in relation to land in certain parts of the State, including the municipality of Ryde. Section 26 of that Act deals with circumstances in which more than one parcel of land may be included in a single valuation notice and s. 27 (1) provides that where several parcels of land owned by the same person are not of the same class of tenure or are separately let to different persons, they shall be valued separately. Section 27 (4) then provides that, "Where a part only of a parcel of land is subject to a particular rate, the value of such parcel shall be apportioned so as to show separately the value of that part which is subject to the particular rate." The land now in question forms part of the land owned by the University and is the subject of leases relating only to small portions of that land. It is said this mode of valuation was not followed, but there was obtained from the Valuer-General a valuation only of the area subject of the leases. We were informed after the conclusion of the hearing that it was common ground that the rate as levied was invalidly levied. It was said, however, that if the correct method of valuing had been adopted the issue would be the same, namely, whether the areas the subject of the leases were ratable at all. It was urged, therefore, that the issue in this proceeding was nonetheless a live issue as between the University and the Council because if the Land and Valuation Court were to take the correct step of quashing the rate or the assessment the correct valuation procedure would presumably then be adopted by the Valuer-General and a new rate notice issued in respect of which a fresh notice of appeal would then be lodged. (at p654)

3. It can scarcely be regarded as satisfactory that these proceedings have gone through two courts and have now reached this Court without this point being drawn to the attention of the Court. However the written objection to the rate notice did not raise this ground and s. 133 (2) suggests that time has gone by for raising this objection. Accordingly, it seems to me that as the question of ratability has now been argued in full before three courts it is proper for this Court to deal with the appeal on its merits. (at p655)

4. The facts relating to the issue are not in dispute and it is convenient to take them from the judgment of Waddell J. with such minor adaptations as reflect only the present stage of the proceedings. (at p655)

5. The University was established and incorporated by the Macquarie University Act, 1964. Section 4 (1) provides:

"A University, consisting of a Council and Convocation and graduate and undergraduate members, shall be established at Ryde in the State of New South Wales."

Section 6 provides that the functions of the University shall include the provision of educational facilities at University standards and the establishment of such facilities as the University deems desirable for the provision of courses of study and the dissemination of knowledge and the promotion of scholarship. Section 21 (1) confers certain powers on the Council. Among these powers are that the Council: "shall have the entire control and management of the affairs and concerns of the University and may act in all matters concerning the University in such manner as appears to it best calculated to promote its objects and interests." The subject land is in a central position on the University campus. It has a frontage to the north-west corner of approximately 202 ft and a depth of approximately 72 ft. It is vested in the University. It has been the subject of a separate valuation by the Valuer-General purporting to act pursuant to the Valuation of Land Act 1916. There is erected on it a separate building having two levels. Portions of this building are leased for commercial purposes. The upper level includes the University Co-op Bookshop, a retail shop conducted by Grace Bros. Pty. Ltd., a chemist shop and an office leased to the Australian Union of Students for the purposes of a travel centre. The lower level includes a branch of the C.B.C. Bank and the Rural Bank, a storeroom used by Grace Bros. Pty. Ltd., a handicrafts and gift shop and an area occupied by the University Sports Association known as "The Union 'Downstairs'" which also has in it a shop known as "Dave's Place". (at p656)

6. The University claims that the subject land is not liable for rates upon two grounds of exemption contained in s. 132 (1) of the Local Government Act 1919 being: "(d) land which belongs to . . . (a) public charity, and is used or occupied by the . . . charity . . . for the purposes thereof." and "(fiii) land which is vested in the Macquarie University, . . . and is used or occupied by the University . . . solely for the purposes thereof." (at p656)

7. The relevant history of the subject land is as follows. Since the initial planning of the University it has always been provided that there should be a section devoted to commercial and shopping facilities enabling the University to avoid the necessity for its students and members of staff to make a special trip in order to obtain access to banking or shopping facilities not provided on the University campus. In order to achieve this object the subject land, which is described as "the market" was placed under the control of the Macquarie University Union pursuant to the terms of its constitution which designates the Council of the Macquarie University as the ultimate supervising authority of the Union's activities. The constitution of the Union, the initial construction of the Union facilities and the building on the subject land and the negotiations with various tenants with respect to the proposed occupancy of the building, which came to be known as the "Union Commercial Centre", all took place entirely under the supervision and subject to the consent of the University council. (at p656)

8. The proprietors or managers of the various commercial activities on the subject land have each sworn an affidavit to the effect that their activities are directed to the special needs of the staff and students on the University campus and that their customers do not appear to include members of the general public. It is inherently unlikely that members of the public would patronize any of the shops or commercial premises in question because access to the University is in general restricted to persons who go there for purposes associated with its activities, and the position of the premises in the centre of the campus is, in any event, unlikely to attract members of the public. (at p656)

9. It is formally admitted by the University - 1. The various shops on that part of the University's land the subject of the summons, whilst primarily serving the students and staff of the University, are open to the general public and operate with a view to profit. 2. Each of the banks provides a general banking service to its customers including the lending of money, inter alia, for housing. (at p657)

10. It is said for the Council that the provision of these facilities is no more than a convenience because there are two adequate shopping centres within a reasonable distance of the campus, namely the Epping shopping centre which is by road some 3.3 kilometres away and the Eastwood shopping centre which is 3.9 kilometres away. However, in each case it would be necessary to travel by private motor vehicle or public transport and the great convenience of having commercial facilities on the campus is undeniable. Mr. Barclay, the Deputy Vice-Chancellor of the University, has given evidence that during the course of approximately twenty-six years' association with universities he has extensively visited universities both in Australia and overseas and that it is a common practice, where a university is not in close proximity to commercial and shopping facilities, for some limited shopping and commercial area to be provided for the convenience of staff and students. In this respect it is to be noted that during the academic year 1974 there were 336 students and members of staff actually resident upon the campus. The total student population was approximately 8,012 and the number of staff employed approximately 1,350. The total area of land owned by the University is some 336 acres and staff and students are about the University campus throughout the whole of the day and until late in the evening during every week day and on most weekends during term time. During vacation there are always a considerable number of staff on duty and usually students attending the University to use its facilities and especially the library. (at p657)

11. Copies of the leases were not put in evidence, but they must be assumed to be in a form which creates a leasehold interest in the land and which entitles the tenant to exclusive possession, subject only to such restrictions as may be imposed by the terms of the lease, and subject to compliance with the terms and conditions of the lease. It appears from the affidavits that the leases purport to be granted by the Macquarie University Union, but in this respect, it must have been acting as the agent of the University itself. The Union is, so far as appears, an unincorporated association deriving its authority from the University itself and in no sense of the term having any title to the land in question. (at p657)

12. There is no dispute about the nature of the activities of the various tenants nor as to the fact that the great bulk of the customers are students or members of the staff of the University, academic and otherwise, and other persons having some connexion with the University. There is a degree of unanimity of expression in the affidavits sworn by or on behalf of the tenants, which might otherwise have aroused suspicion, but as these points are not in dispute no problem arises. (at p658)

31. This argument comes close to, but is not the same as, the basis on which Wells J. decided Council of the South Australian Institute of Technology v. Corporation of Salisbury (1975) 10 SASR 225 . The case concerned premises leased by the Institute to persons who conducted a bookshop but which were claimed to be "used for the purposes" of the Institute within a rating exemption in s. 5 of the Local Government Act 1934-1972 (S.A.). It appeared that there was close collaboration between the staff of the Institute and those operating the bookshop and that the Institute exercised substantial influence over its activities. Wells J. said (1975) 10 SASR, at p 230 , "All of those facts, it seems to me, lead to the conclusion that the Book-store, having regard to its essential functions, is part and parcel of the Institute judged by the way in which it actually functions." Although Wells J. points out that the words of the exemption referred to "used for the purposes of the Institute" and not to "used by the Institute for the purposes of the Institute", he held that "the Institute of Technology has, through setting up and authorising the creation and managing of, this book-shop, used the land for the purposes of the Institute of Technology." (1975) 10 SASR, at p 235 . That conclusion goes further than was required by the words of the exemption and I am, with respect, unable to agree with it. For reasons which I have set out already I cannot regard the letting of land for use by a tenant as a bookshop or for other commercial purposes of its own (even assuming that there was a covenant requiring such use) which purposes are convenient for the University, as use by the University solely for its purposes. Whether the actual decision of Wells J. can be supported on the ground that the use was for the purposes of the Institute (though not by it or solely for its purposes) I do not need to consider. (at p666)

32. Reliance was also placed on par. (d) of s. 132 (1) which provides exemption for "land which belongs to any public hospital, public benevolent institution, or public charity and is used or occupied by the hospital institution or charity, as the case may be for the purposes thereof". It was said that exemption applied because the University was a "public charity". Assuming that to be so it is still necessary to show use or occupation by the University. The reasons I have expressed above show that the land is neither "occupied" nor "used" by the University for its purposes, and accordingly this exemption is not available. (at p666)

33. For those reasons I am of the opinion that the premises are not exempt from rating under the Act and that the appeal should therefore be allowed. (at p666)

Orders

Appeal dismissed with costs.