Singh v Commissioner of Land Tax

[2006] QLAC 56

LAND APPEAL COURT OF QUEENSLAND

CITATION:

Singh & Anor v Commissioner of Land Tax [2006] QLAC 56

PARTIES:

Manjit Singh & Lai Leng Chew
(appellants)

v.

Commissioner of Land Tax
(respondent)

FILE NOS:

LAC2005/1358

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

An appeal from a decision of the Land Court dated 22 August 2005 ordering that the appellants appeal against land tax assessments imposed by the Commissioner of Land Tax pursuant to the Land Tax Act 1915 be dismissed and that the appellants pay the respondent's costs of and incidental to the appeal.

ORIGINIATING COURT:

Land Court of Queensland

DELIVERED ON:

14 September 2006

DELIVERED AT:

Brisbane

HEARD AT:

Brisbane

MEMBERS:

Justice White
Mr J J Trickett, President of the Land Court and
Mr R S Jones, Member of the Land Court.

ORDERS:

1. The appeal is dismissed.

2. Each party is to bear their own costs of and incidental to the adjournment of the hearing on 31 March 2006.

3. The appellants are to otherwise pay the respondents costs of and incidental to the appeal to be assessed on the standard basis.

CATCHWORDS:

Land Tax Appeal – statutory construction – date at which tax liability arises – change of ownership – liability of absentee owners – no separate liability on foreign owners – Land Tax Act 1915 ss.8, 26G, 27.

Practice and procedure – obligation on court to give reasons for decision – to inform unsuccessful party and enable proper review if appealed.

APPEARANCES:

Mr Singh in person for the appellants
Mr F Redmond of counsel for the respondent

SOLICITORS:

Crown Law for the respondent

1. Manjit Singh and Lai Leng Chew (the appellants) have appealed against a decision of Mr G Koppenol, a part time Member of the Land Court of Queensland.  The proceedings before the Land Court concerned an appeal by the appellants against decisions of the Commissioner of Land Tax (the respondent) to impose certain land tax obligations on them pursuant to the Land Tax Act1915.  While the lands which attracted the tax liability in the first place are located within the borders of this State the appellants do not reside in Queensland.  They are residents of Singapore.

2. On 22 August 2005 the Member ordered that the appeal be dismissed and that the costs of the respondent incidental to and associated with the appeal be paid by the appellants.  These orders were made in the absence of the appellants and more will be said about that below. 

History of the Appeal and Chronology

1. On 2 November 2004, the Office of State Revenue issued two notices of assessment of land tax to the appellants.  Notice 202358 concerning six separate parcels of land was addressed to Mr Singh.  Notice 202359, concerning the same six parcels of land was addressed to Ms Chew.  The notices of assessment identified that the amount of tax payable was for the "tax year" 2004.

2. On or about 22 November 2004, the appellants lodged an objection to both notices of assessment. On 18 March 2005, the respondent notified the appellants that their objection had not been successful and that the assessments issued on 2 November 2004 had been confirmed. Dissatisfied with that decision the appellants exercised their rights to appeal to the Land Court pursuant to ss26G and 27 of the Land Tax Act 1915.  The grounds of appeal as pleaded in the notice of appeal filed in the registry of the Land Court, as far as is relevant, raised a number of matters which are materially the same as those relied on by the appellants in their appeal to this Court.

3. On 3 August 2005, the Land Court issued a Court Notice stating that the appeal was to be heard in Brisbane at 2.30pm on 22 August 2005.  On 10 August 2005, the appellants addressed correspondence to the Registrar of the Land Court and to Crown Law as the respondent's solicitor on the record, seeking a "deferral" of the 22 August hearing.  The appellants contended that the hearing should be delayed until after the determination of their objection pursuant to the Valuation of Land Act 1944 against the unimproved value attributed to one of their jointly owned properties.  This particular property is known as Garden Island located in Moreton Bay. 

4. On 18 August 2005, Crown Law wrote to the appellants advising that, in its view, the grounds raised in support of the deferral of the hearing were irrelevant and that, on 22 August 2005, it would strenuously oppose any adjournment of the proceedings and seek orders that the appeal be dismissed.  This correspondence also repeated an apparently earlier suggestion that the appellants seek independent legal advice.  In response, on 18 August 2005 the appellants again corresponded with Crown Law and the Registrar of the Land Court.  The former correspondence asserted that the Court Notice of 3 August gave insufficient notice of the hearing date and, if no adjournment was granted, the appellants would "… do what is necessary as best we can from here."  The correspondence to the Land Court repeated their inability to be present on 22 August 2005 and included certain material and argument which the appellants put forward in support to their appeal in the event that an adjournment was not granted.

5. When the matter came before the Member on 22 August 2005 the respondent was represented by counsel and an instructing solicitor.  The appellants did not appear and were not represented.  By reference to the transcript of the proceedings on that date it is clear that there was little or no argument about either the merits or otherwise of the appellants' request for an adjournment or of their grounds of appeal.  The end result was that the appeal was dismissed and the respondent was awarded costs.

The Land Appeal Court Proceedings

1. Under cover of correspondence dated 29 September 2005, addressed to the Registrar of the Land Appeal Court, the appellants filed their appeal against the decision below. Section 27(3) of the Land Tax Act 1915 essentially provides that Chapter 7, Part 3 of the Land Act 1994 applies to the hearing and determination of appeals such as this by the Land Appeal Court. Relevantly, s.429 of the Land Act 1994 provides:

   "(1) In deciding an appeal, the Court –

   (a)  has the same powers as the decision maker; and
   (b)  is not bound by the rules of evidence; and
   (c)  must comply with natural justice; and
   (d)  may hear the appeal in court or in chambers.

   (2)   An appeal is by way of rehearing.

   (3)   The Court may –

   (a)   confirm the review decision; or
   (b)   set aside the review decision and substitute another decision; or

   (c)set aside the review decision and return the issue to the Minister with directions the court considers appropriate."

2. As mentioned above, while many of the grounds of appeal relied on by the appellants in the Land Court proceedings are common to those relied on in this Court, the appellants now rely on the decision of the Court below to proceed in their absence as an additional ground or reason for setting the orders made below aside and allowing the appeal.

3. On 31 March 2006, when this appeal first came before the Land Appeal Court, the proceedings were adjourned.  The reason for the adjournment was essentially as a consequence of the respondent's failure to serve its written submissions on the appellants within a reasonable time.  When the appeal came before us on 4 August 2006, both sides were content to rely on their written submissions.  For reasons which will become apparent we consider it appropriate to deal not only with the issue of the conduct of the proceedings below but also with the other substantive grounds of appeal raised by the appellants.

4. The grounds of appeal, as articulated in the appellants written submissions at pages 31 to 56, really come down to six points or arguments, some of which are inter-related.

5. The first point is that the assessments appealed against are not valid because of the failure to notify the appellants of the increase in the unimproved value attributed to their three units located at Hope Island.

6. In our opinion this argument has no merit. Relevantly, pursuant to s.8 of the Land Tax Act 1915, subject only to the exceptions and exemptions provided for within the Act, land tax is to be paid on the "relevant unimproved value" of land within Queensland which is not exempt from taxation owned at the relevant date by the taxpayer.  The "relevant unimproved value" also sets the taxable value of non exempt land pursuant to s.11 of the Act.  The meaning of the phrase "unimproved value" is defined by s.3C and the "relevant unimproved value" is defined in s.3 so as to identify which value it is that has to be considered by the respondent in assessing the tax liability (if any) of the owner for the relevant financial year. 

7. While it is clear that the "relevant unimproved value" attributed to taxable land in the subject financial year is a matter material to the assessment of the land tax obligation of the landowner, nowhere in the Land Tax Act 1915 does it provide that the liability to pay land tax is in any way dependent upon the taxpayer having to be notified or advised of the "unimproved value" attributed to his or her land.  In this context we note that even the omission to give any notice of the amount of tax imposed does not invalidate the tax assessment.[1]

   [1]            s.58(5A).

8. The second point arises in this way.  The appellants contend that they should not be liable to pay land tax for their unit described as Lot 130 located at Hope Island.  That is so, according to them, because as at 2 August 2004 they were no longer the "owners" of that land.  Here, the relevant land tax assessments are for the financial year commencing 1 July 2004 and ending 30 June 2005.  It is the appellants' contention that, by entering into a contract for the sale of that land on 2 June 2004, with settlement occurring on 2 August 2004, their land tax liability ended no later than 2 August 2004.  The appellants say there is no foundation at law authorising land tax to be imposed on "past owners" of land.

9. Again it is our opinion that there is no merit to these arguments. Pursuant to s.3B(3)(a) of the Land Tax Act 1915, if an agreement has been made for the sale of land, whether or not the agreement has been completed by the actual conveyance of the land, the seller is taken to be its "owner" until possession is delivered to the buyer.  Pursuant to s.3B(3)(b) the buyer becomes the owner of the land for the purposes of the Act upon him or her obtaining possession of the land.

10. In circumstances where the appellants were the owners of the land for the purposes of the Act as at midnight 30 June 2004, s.12 provides:

    "Land tax shall be charged on land as owned at midnight on 30 June immediately preceding the financial year in and for which the tax is levied."

11. Contrary to the argument advanced by the appellants, their obligation to pay the land tax imposed, is not one imposed on "past" owners.  It is an obligation which is, as required by the Act, determined by the actual ownership of the land as at the end of the financial year proceeding the material financial year.  As Fitzgerald P and McPherson JA said in Re Australian and Overseas Telecommunications Corporation Ltd[2]

    "…

    Although the Land Tax Act specifies the point of time at which ownership of land is to be determined for the purpose of the imposition of land tax, no express provision is made concerning the time when it is to be determined whether or not land is exempt from taxation.

    However, on closer analysis of the material sections, it becomes apparent that both land ownership and whether land is exempt from taxation are to be determined at the same point of time.  The factors relevant to liability are all determined by reference to the circumstances which exist at the end of the year preceding the material financial year.  The land ownership with which the Act is concerned is ownership of land which is not exempt from tax.  This is confirmed by the circumstance that the material ownership is ownership by a taxpayer, who is defined as a person who is liable to pay tax; that is, whose land is not exempt.

    Such an approach also seems necessary for the practical administration of the Land Tax Act, which would otherwise involve arbitrary decisions concerning liability or exemption from liability based on whatever circumstances existed at the various points of time when assessments were made during a financial year, or constant adjustment of assessments to respond to changing circumstances."

    [2] (1994) 2 QdR 350 at 359.

12. At a practical level, land tax and/or rate credits or liabilities would usually be expected to be taken into account in determining the final price to be paid by the purchaser of land at the time of settlement of the contract of sale and conveyance of the land.  We were not told whether or not this occurred on the settlement of the contract and conveyance of Lot 130.

13. The third matter raised by the appellants concerns the relevant unimproved value attributed to the Garden Island property.  The appellants contend that the appropriate figure is $975,000.  As we understand it, that amount was the result of negotiations between the appellants and representatives of the Chief Executive of the Department of Natural Resources and Mines (DNRM), concerning the unimproved value to be attributed to that land pursuant to the Valuation of Land Act 1944 effective as at 30 June 2003.  That is, for the year prior to the relevant tax year in this appeal.

14. On 25 October 2004 DNRM issued a new valuation of the land stating that its unimproved value was $1,450,000 effective as at 30 June 2004.  The 2 November 2004 notice of assessment of land tax issued by the respondent was based, in part, on the unimproved value of Garden Island being $1,450,000.  By 5 November 2004 the appellants had lodged an objection to the new unimproved value with DNRM.  In their notice of objection the appellants contend that the unimproved value was still $975,000.

15. By correspondence dated 5 April 2005 the appellants were notified by DNRM that their objection had been partly successful and that the unimproved value had been reduced from $1,450,000 to $1,200,000.  On 17 May 2005 the respondent issued an amended notice of assessment of land tax which took into account the reduction in the unimproved value of the Garden Island property.  That is, the appellants land tax liability in respect of that land is based on its unimproved value being $1,200,000 and not $1,450,000.  However, the appellants continue to contend that the correct valuation is still $975,000.

16. It is not open for this Court, or for that matter the Land Court, in appeals such as this to entertain and resolve disputes about whether or not the unimproved value attributed to land is excessive. Section 27(1A) of the Land Tax Act 1915 makes that clear.  Accordingly, we are of the opinion that this ground of the appeal also fails.  No error of fact and/or law on the part of the respondent has been revealed.

17. The fourth matter raised by the appellants concerns the tax rate applied by the respondent.  The appellant's argument about this is quite straightforward.  They say that, if they succeed on both or either of their arguments concerning the Hope Island units[3] and the Garden Island Property[4] the land tax rate as applied will have to be adjusted.

    [3]            See paras [12] to [14] above.

    [4]            See paras [20] to [23] above.

18. Unfortunately for the appellants, as we have rejected their arguments concerning those properties this ground of their appeal also fails.

19. The fifth matter raised by the appellants concerns the failure by the respondent to allow them any of the land tax "deductions" or "rebates" provided for in the Land Tax Act 1915.  The appellants contend, as we understand it, that the refusal to grant these benefits is unlawful because it discriminates against them on the basis of them being foreigners or foreign investors.  No specific section or sections of the Land Tax Act 1915 were referred to by the appellants in support of their argument about this.

20. In our opinion, the Act is not concerned with or about owners who are foreigners or foreign investors.  It is however concerned about owners who are "absentees".  Pursuant to s.3A(1) an absentee is a person who does not ordinarily reside in Australia or an External Territory.  The appellants, as they ordinarily reside in Singapore, are therefore "absentees" for the purposes of the Act.

21. The Act then provides that landowners who are absentees are not entitled to certain tax exemptions.  For example, absentees under s.11(3) of the Act are not ordinarily entitled to the tax benefits applicable to land used solely for farming or other agricultural uses.  And, by necessary implication, an absentee landowner would not be entitled to the benefits associated with land being used as the "principal place of residence" of the owner.

22. These circumstances do not however, in our opinion, mean that the Act in any offensive way discriminates against foreign landowners.  No doubt many landowners who are Australian citizens and/or who ordinarily reside in Australia are not be entitled to the "principal place of residence" exemption.  Also, due to the operation of s.3A(2)(b), for any relevant tax year an Australian citizen or person ordinarily a resident of Australia may not, from time to time, be entitled to the benefits provided by s.11(3).

23. It is our opinion that the appellants have not been able to show how any part of the Land Tax Act 1915 could be the subject of a successful legal challenge on the basis of it discriminating against them as foreigners or foreign investors.  Accordingly, this ground of appeal also fails.

24. The sixth and final ground of appeal concerns the failure of the appellants to be heard on the appeal.  As the chronology reveals the appellants not only contended that they were given no or no adequate notice of the hearing of the appeal but also that it should be "deferred until after the outcome of the objection conference.  There was some expectation by the appellants that there would be a consensual resolution of the dispute and accordingly an adjournment would be granted.  It is clear from their correspondence to the respondent and to the Registrar dated 18 August 2005 that the appellants recognised that the respondent would press ahead on 22 August with the appeal and seek its dismissal whether or not the appellants were present.  The appellants sent submissions and supporting correspondence to the court and concluded:

"We understand that a Court of law will give regard to all valid considerations regardless of whether a party is present. In our instance, we humbly submit that there are disturbing features to the case. We highlight in particular the fact that we were not served with any notice to increase land value in respect of 3 properties, the fact that we are made to pay tax for land that we no longer own and our opinion that for a long time now s 12 of the Land Tax Act has been misinterpreted by the tax office as ostensible authority to apply current tax to past owners. The underscored portions provide our basis and reasoning.

We would be deeply obliged if your Honour would place this letter and the attachments before the Honourable Judge in the Land Court having conduct of this matter. . . "

1. This letter to the court was in response to that from the respondent indicating that an application for an adjournment would be strenuously opposed and suggesting that the appellants might like to engage legal representation for the hearing on 22 August 2005. 

2. On the afternoon of 22 August the appeal was called on for hearing.  Counsel appeared for the respondent and read an affidavit exhibiting the correspondence.  The appellants complain that they were never served with this affidavit.  There was no obligation to serve the affidavit exhibiting the correspondence in advance of the hearing.  It was the appropriate way to inform the court of the attitude of the appellants should they not appear or be represented on the appeal.

1. There was some brief exchange between the Member and counsel about some of the grounds of appeal addressed in the respondent's submissions.  The Member then said:

"I'm satisfied of all of those points."  Transcript page 3

Counsel asked that the appeal be dismissed with costs to which the Member acceded.

1. Notwithstanding the appellants' written submissions on this appeal, it was clear to them that the hearing of the appeal was to take place on 22 August in the absence of some other order being made.  It was clearly not a directions hearing and not understood to be one.  An error was made in the order subsequently issued by the court in so describing it but the appellants are not disingenuous enough to suggest that they have been misled by this.  Whilst it may be accepted that it was inconvenient for the appellants to attend in person, they could have sought to be heard by telephone conference or instructed a lawyer or other agent to appear and, at the least, request an adjournment, particularly in light of the respondent's letter of 18 August.  They may have been required to compensate the respondent for the costs thrown away but it is unlikely that an adjournment would not have been granted.  There could have been no prejudice to the respondent, Queensland v J L Holdings Pty Ltd [1997] 189 CLR 146 per Dawson, Gaudron and McHugh JJ at 154 and Kirby J at 165. The appellants are people apparently of considerable financial means. If, as Mr Singh said on this appeal, they prefer to act for themselves, they must be prepared to put to one side other commitments to attend to their affairs in this jurisdiction. Twelve days was, of itself, not unreasonably short notice. This ground is without merit but it is necessary to say something about the appeal hearing.

2. Having embarked upon the appeal and, given that the application to dismiss the appeal was not for want of prosecution, it was necessary for the Member to consider each of the grounds of appeal, not just by reference to the respondent's outline, but also by reference to the appellants' submissions.  From the transcript it is clear that the Member perused the respondent's outline of submissions and was persuaded in respect of each ground of appeal that there was no merit in any of them.  There were no contested facts so the Member was required only to make findings on the application of the law to the facts as presented in the material but this was done in a cursory way. 

3. The obligation to give reasons for decisions by judicial officers has been long established.  Gibbs CJ in Public Service Board of NSW v Osmond (1986) 159 CLR 656 observed at 66-7:

   "The decision in that case [Pettitt v Dunkley [1971] 1 NSWLR 376] that the failure to give reasons was an error in law may have broken new ground, but there was nothing new in saying that judges are under an obligation to give reasons where that is necessary to enable the matter to be properly considered on appeal. It has long been the traditional practice of judges to express the reasons for their conclusions by finding the facts and expounding the law (see Deakin v. Webb (58) and Jacobs v. London County Council (59)) and there have been many cases (some of which are collected in De Iacovo v. Lacanale (60)) in which it has been held that it is the duty of a judge or magistrate to state his reasons. That does not mean that a judicial officer must give his reasons in every case; it is clear, to use some of ­the words of Woodhouse P. in Reg. v. Awatere (61), that there is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Nevertheless, it is no doubt right to describe the requirement to give reasons, as Mahoney J.A. did in Housing Commission (N.S.W.) v. Tatmar Pastoral Co. (62), as "an incident of the judicial process", subject to the qualification that it is a normal but not a universal incident."

1. The appeal below was not one which involved the exercise of a discretionary judgment but the application of legislative provisions to known facts.  Nonetheless it is important that litigants, especially those not present and those who lose, understand the basis for their lack of success, see Kirby J's analysis in Reasons for Judgment: "Always Permitted, Usually Desirable and Often Obligatory" (1985) 12 Aust Bar Rev 121.  As Keane JA discussed in Townsville City Council and Anor v Chief Executive Department of Mains Roads [2005] QCA 226 at [37] and following, the obligation of the Land Court to exercise its jurisdiction according to "equity, good conscience and the substantial merits of the case" must be given effect. Where a right of appeal is given, the publication of reasons by the lower court enables the appellate tribunal to examine the process by which the decision appealed from was reached, Beale v G1O of New South Wales (1997) 48 NSWLR 430 per Mason P at 431, Meagher JA at 441-444.

2. Because the issues for decision before the Member essentially concerned the construction of legislation in the circumstances of undisputed facts, this court has been able to address the several grounds of appeal for itself.

3. The last matter that needs to be decided concerns the costs of the adjournment of the hearing on 31 March 2006 and the costs of the hearing on 4 August 2006.  Having regard to the circumstances leading up to the adjournment and the result of the substantive appeal it is our view that each party should bear their own costs of and incidental to the adjournment.  This approach is consistent with the submissions made by Mr Singh on 31 March 2006.  In respect of the hearing before this Court on 4 August 2006, having regard to the matters addressed above, we can see no real basis for not making the usual orders that costs should follow the event.

Disposal of the Appeal and Orders

1. For the reasons expressed above, we are of the opinion that the appeal should be dismissed and order as follows:

   1.   The appeal is dismissed.

   2.Each party is to bear their own costs of and incidental to the adjournment of the hearing on 31 March 2006.

   3.The appellants are to otherwise pay the respondents costs of and incidental to the appeal to be assessed on the standard basis.

WHITE J
JUSTICE OF THE SUPREME COURT

J J TRICKETT

PRESIDENT OF THE LAND COURT

R S JONES

MEMBER OF THE LAND COURT