St Landco No 1 Pty Ltd v Commissioner for Act Revenue; Empire Global Developments No. 3 Pty Ltd v Commissioner for Act Revenue
[2022] ACTSC 157
•29 June 2022
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | St Landco No 1 Pty Ltd v Commissioner for ACT Revenue; Empire Global Developments No. 3 Pty Ltd v Commissioner for ACT Revenue |
Citation: | [2022] ACTSC 157 |
Hearing Date: | 24 May 2021 |
DecisionDate: | 29 June 2022 |
Before: | McWilliam AsJ |
Decision: | In proceedings SC 446 of 2020 (1) Pursuant to s 10(1) of the Administrative Decisions (Judicial Review) Act 1989 (ACT), leave is granted to extend the time in which to commence proceedings to 15 December 2020. (2) It is declared that St Landco No. 1 Pty Ltd ACN 614 636 805 (the plaintiff) is entitled to the application of DI2016-28 being the Planning and Development (Remission of Lease Variation Charges – Economic Stimulus and Sustainability) Determination 2016 (No 1) in the calculation of the Lease Variation Charge arising from the approval of Development Application 201732666 in respect of Blocks 4 and 5 Section 224 Gungahlin, ACT. (3) The defendant is to pay the plaintiff’s costs of the proceedings. In proceedings SC 28 of 2021 (1) Pursuant to s 10(1) of the Administrative Decisions (Judicial Review) Act 1989 (ACT), leave is granted to extend the time in which to commence proceedings to 29 January 2021. (2) It is declared that Empire Global Developments No. 3 Pty Ltd ACN 158 072 158 (the plaintiff) is entitled to the application of DI2016-28 being the Planning and Development (Remission of Lease Variation Charges – Economic Stimulus and Sustainability) Determination 2016 (No 1) in the calculation of the Lease Variation Charge arising from the approval of Development Application 201731587 in respect of Block 1 Section 78 Greenway, ACT. (3) The notice of assessment dated 11 November 2019, in respect of the Lease Variation Charge levied in relation to Block 1 Section 78 Greenway, ACT, is set aside. (4) The matter is remitted to the Commissioner for ACT Revenue (defendant) for further determination according to law. (5) The defendant is to pay the plaintiff’s costs of the proceedings. |
Catchwords: | ADMINISTRATIVE LAW – Judicial review – Accrual of rights – application of statutory saving provisions – amendment to statutory scheme governing payment of a lease variation charge following approval of development application – where amended statutory scheme removed a benefit conferred under the previous statutory scheme – where development application lodged but not approved before statutory amendment commenced – whether right to the benefit conferred under the previous statutory scheme preserved ADMINISTRATIVE LAW – Judicial review – extension of time – where plaintiff pursuing remedy in another forum – where defendant on notice of complaint and no prejudice arose – extension of time granted |
Legislation Cited: | Administrative Decisions (Judicial Review) Act 1977 (Cth) s 11 Administrative Decisions (Judicial Review) Act 1989 (ACT) ss 3A, 5, 10 Taxation Administration Act 1999 (ACT) s 14 |
Cases Cited: | Abbott v Minister for Lands [1895] AC 425 Attorney-General (Qld) v Australian Industrial Relations Commission [2002] HCA 42; 213 CLR 485 Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; 221 CLR 30 |
Texts Cited: | David Mossop, The Constitution of the Australian Capital Territory (Federation Press, 2021) Perry Herzfeld and Thomas Prince, Interpretation (Thomson Reuters, 2nd ed, 2020) |
Parties: | St Landco No 1 Pty Ltd ACN 614 636 805 (Plaintiff in SC 446 of 2020) Empire Global Developments No 3 Pty Ltd CAN 158 072 158 (Plaintiff in SC 28 of 2020) Commissioner for ACT Revenue (Defendant) |
Representation: | Counsel B Buckland (Plaintiffs) M Hassall (Defendant) |
| Solicitors Mills Oakley (Plaintiffs) ACT Government Solicitor (Defendant) | |
File Numbers: | SC 446 of 2020 SC 28 of 2021 |
McWilliam AsJ:
The plaintiffs in these proceedings are two property developers seeking judicial review of separate decisions made by the defendant, the Commissioner for ACT Revenue (Commissioner). The plaintiffs have each varied a Crown lease in respect of land they are developing, following which they were each issued with a notice of assessment by the Commissioner concerning their respective liabilities to pay a lease variation charge (LVC). They disagree with the LVC amount the Commissioner has assessed. They say that on the proper application of the legislation concerning the remission of lease variation charges, they are entitled to an economic stimulus remission of 25% of the value added to the lease in the proposed variation, which the Commissioner did not apply when issuing each notice.
The applications before the Court
Pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1989 (ACT) (ADJR Act), the following two applications have been made:
(1) Originating Application filed by St Landco No 1 Pty Ltd ACN 614 636 805 (St Landco) on 15 December 2020 and amended on 16 February 2021.
(2) Originating Application filed by Empire Global Developments No.3 Pty Ltd ACN 158 072 158 (Empire Global) on 29 January 2021.
The specified ground of review is s 5(1)(f) of the ADJR Act, being that each decision the subject of review involved an error of law.
Each application sought declaratory relief that the plaintiff was entitled to the 25% economic stimulus remission in relation to the LVC levied and consequential orders, effectively setting aside the legal effect of what is described as the “Commissioner’s decision” and remitting the decision to the Commissioner for further determination according to law.
The plaintiffs sought an additional order under either s 10(1) of the ADJR Act, or r 3557 of the Court Procedures Rules 2006 (ACT) (the Rules) (if the application is taken as being also made in the supervisory jurisdiction of the Court), for an extension of time within which to file the application, if necessary.
Decisions challenged
St Landco’s application concerned the notice of assessment issued on 6 June 2019 (June 2019 Assessment) in respect of the LVC levied in relation to Blocks 4 and 5 Section 224 Gungahlin (Gungahlin Site).
St Landco challenged the non-application of the stimulus remission in an alternative decision of 2 August 2019, when, following a request for reconsideration, the Commissioner issued a revised assessment through a Notice of assessment Lease Variation Charge Reconsideration (August 2019 Assessment).
The application by Empire Global concerned the notice of assessment issued on 11 November 2019 (November 2019 Assessment) in respect of the LVC levied in relation to Block 1 Section 78 Greenway (Greenway Site).
Empire Global also challenged the non-application of the stimulus remission in an alternative decision made on 23 April 2020 (April 2020 Assessment). It similarly applied for reconsideration of the November 2019 Assessment. However, in this case, the Commissioner did not make a substitute decision, nor did the Commissioner confirm the original November 2019 Assessment. Pursuant to s 277F of the Planning and Development Act 2007 (ACT) (Planning Act), the Commissioner is thereby deemed to have confirmed the original November 2019 Assessment.
Issues
There are two preliminary issues:
(a)Whether there is a reviewable decision; and
(b)If so, whether the plaintiffs require an extension of time.
If both of those preliminary issues favour the plaintiffs, then the substance of the dispute is whether, on the proper interpretation and application of the Planning Act and the determinations made under it, the plaintiffs were entitled to an economic stimulus remission of 25% applied to the LVCs in respect of the respective development approvals in question.
Agreed Facts
It is convenient to understand the chronology first as the facts are relevant to the resolution of both the preliminary and substantive issues. The parties helpfully provided a statement of agreed facts and a supporting affidavit in each proceeding which includes the relevant source documents. The following summary is drawn from those documents and is uncontroversial.
On 12 May 2017, Empire Global submitted Development Application 201731587 (Empire Global DA) to the ACT Planning and Land Authority (the Authority). Following payment of an application fee, it was taken to have been lodged on 14 June 2017.
On 10 October 2017, St Landco submitted Development Application 201732666 (St Landco DA) to the Authority. It was taken to have been lodged on 19 October 2017 when the application fee was paid.
At the time the applications were lodged, the applicable disallowable instrument was DI2016-28, being the Planning and Development (Remission of Lease Variation Charges – Economic Stimulus and Sustainability Determination 2016 (No 1) (ACT) (2016 Instrument).
Each development application proposed, among other things, a lease variation pursuant to the provisions of Division 9.6.3 of the Planning Act. That gave rise to a liability to pay an LVC, to be “worked out… on the day the development approval of the chargeable variation [was] approved” (see s 276D of the Planning Act).
Each development application subsequently proceeded on a merit track, through a process of public notification, provision of further information and amendment. There were also statutory timeframes for making a decision on the applications, which are set out in s 122 of the Planning Act.
Pursuant to s 162 of the Planning Act, the Authority ultimately approved:
(1) The Empire Global DA (subject to conditions) on 27 April 2018,
(2) The St Landco DA (subject to conditions) on 5 September 2018.
By the time those approvals occurred, the 2016 Instrument had expired (on 6 March 2018). It was formally repealed on 17 May 2018 by s 4 of the Planning and Development (Lease Variation Charge Deferred Payment Scheme) Amendment Act 2018 (ACT) (Lease Variation Amendment Act).
In the meantime, on 6 March 2018, the Minister for Planning and Management and the Treasurer made a new disallowable instrument, DI2018-40, being the Planning and Development (Remission of Lease Variation Charges – Environmental Sustainability) Determination 2018 (No 1) (2018 Instrument). It commenced on 7 March 2018 (as seen from s 2).
Following each approval, notices of assessment were issued. None of the notices of assessment applied any economic stimulus remission in calculating the LVC payable. This led the plaintiffs to make subsequent applications for reconsideration by the Commissioner, and later to commence proceedings in the ACT Civil and Administrative Tribunal (Tribunal).
To the extent that they are material to any issue on review, the legislative provisions referred to in the procedural chronology below are set out as part of the legislative framework included later in these reasons. For each plaintiff, the factual and procedural history is as follows:
St Landco
(1)8 March 2019 – The Commissioner issued a notice of assessment under s 14 of the Taxation Administration Act 1999 (ACT) (TA Act) (because s 4(i) of that statute prescribes the Planning Act as a tax law), in respect of the St Landco DA, which had been approved.
(2)6 June 2019 – The Commissioner issued a revised notice of assessment (being the June 2019 Assessment).
(3)28 June 2019 – St Landco made an application for the Commissioner to reconsider the June 2019 Assessment, pursuant to s 277C of the Planning Act.
(4)2 August 2019 – The Commissioner issued a reassessment of the June 2019 Assessment (this reassessment being the August 2019 Assessment) pursuant to s 277E of the Planning Act.
(5)23 August 2019 –St Landco made an application to the Tribunal for review of the August 2019 Assessment.
(6)9 October 2020 – The Tribunal handed down its decision, finding that it did not have jurisdiction to review the Commissioner’s decisions in relation to remissions (albeit setting aside the August 2019 Assessment on other grounds).
(7)10 November 2020 – St Landco wrote to the Commissioner to follow up on a request for a statement of reasons made on 13 March 2020.
(8)18 November 2020– The Commissioner informed St Landco that a statement of reasons would not be provided.
Empire Global
(1)11 November 2019 – The Commissioner issued the November 2019 Assessment, under s 14 of the TA Act, in respect of Empire Global DA which had been approved.
(2)26 March 2020 – Empire Global made an application for the Commissioner to reconsider the November 2019 Assessment, pursuant to s 277E of the Planning Act.
(3)23 April 2020 – The November 2019 Assessment was deemed to have been confirmed in accordance with s 277F of the Planning Act, as 20 working days had passed and no action had been taken by the Commissioner.
(4)21 May 2020 – Empire Global made an application to the Tribunal for review of the November 2019 Assessment.
(5)22 December 2020 – The Tribunal handed down its decision, finding that it did not have jurisdiction to review the Commissioner’s decisions in relation to remissions.
Is there a reviewable decision?
The Commissioner contested whether there is a reviewable decision in each proceeding. The argument arises from the way in which each Originating Application has been drafted, which I accept creates some confusion.
The Originating Application for Empire Global refers to the decision on 11 November 2019, and similarly St Landco refers in its Originating Process to the decision on 6 June 2019. These appear to be references to the respective notices of assessment, although that is not expressed clearly.
The plaintiffs each requested the Court to review “the decision” of the Commissioner “under section 278(4) of the [Planning Act]” refusing to apply the 25% economic stimulus remission to the LVC levied, or alternatively the failure of the Commissioner to apply the remissions in accordance with s 278(4) of the Planning Act.
The plaintiff argued that a “decision” includes a refusal or failure to apply the remission under the previous LVC remissions regime by virtue of ss 3A(1)(a) and 3A(3)(a) of the ADJR Act.
The Commissioner submitted that the decision referred to by the plaintiffs in their originating processes as to the refusal to apply the 2016 Instrument does not attract a right of review under the ADJR Act. The relevant notices of assessment make no reference to the 2016 Instrument, nor do they expressly refuse to apply the 2016 Instrument. Further, the Commissioner’s assessment of the LVC payable was a power exercised under s 278 of the current provisions in the Planning Act dealing with remission of the LVC. In contrast to the now-repealed s 278E in the previous LVC regime, that section does not confer power on the Commissioner to apply the previous economic stimulus remission.
As a consequence, the Commissioner argued that, not only did he not make the impugned “decision” as to the application of remissions, but he also lacked the power to do so at the time the challenged notices of assessment were issued. Any refusal or failure to apply the 2016 Instrument was not a “decision” of the Commissioner. The complaint of the plaintiffs was therefore said to be beyond the Court’s review jurisdiction under the ADJR Act.
The starting point for resolving the issue between the parties is that, following an approval of a development application where a nominal rent lease is varied, a notice of assessment must be given: s 276D of the Planning Act. There was no dispute that such notices of assessment were a decision that could be the subject of judicial review under the ADJR Act. It plainly creates rights and liabilities – at the very least, a right of reconsideration pursuant to s 277C and a liability to pay the amount assessed.
The point raised by the Commissioner referred to above at [27] is technically correct, but it is an argument of form over substance. What I mean by that is that the plaintiffs have mischaracterised “the decision” under challenge as being that specific part of the process where they say an error arose, rather than seeking review of the notice of assessment that issued consequent upon that process.
The notice of assessment was the decision. It was accepted that the notice of assessment was amenable to judicial review. The plaintiffs argued it was affected by error of law. The error was the misconstruction of the legislative framework in terms of whether the 2016 Instrument applied to the DA approvals made after it had expired.
The argument made by the Commissioner about the power being exercised, and in particular, the lack of any power to apply the 25% economic stimulus remission, is an argument about the proper application of the legislative framework. It does not affect whether the Court has the power to review the decision.
An assessment by the Commissioner includes a number of components and the Commissioner is obliged to give reasons, or at least a “working out” of how the LVC figure was calculated. Where a component has not been included or considered, that might be described as an inferred or implied decision, which in turn could be described as a refusal, or a failure, or simply an omission because it was not part of the assessment process at the time the Commissioner issued the notice. However characterised, given that a notice of assessment itself is a judicially reviewable decision, if it is alleged that there was an error of law that affected the assessment, that is sufficient to give rise to the availability of relief under the ADJR Act.
Here, the plaintiffs’ contention was that the wrong disallowable instrument was applied in calculating the LVC figure included in the relevant notice of assessment. That is a legal error which was material to final LVC notified to the plaintiffs in the respective notices of assessment. This issue was ventilated with the parties in Court, and I indicated at the time that the case would be dealt with on the above basis, which the defendant accepted would not put him at any procedural disadvantage.
Do the plaintiffs require an extension of time, and if so, should it be granted?
The plaintiffs contended, at least in respect of St Landco, that the 28-day period prescribed by s 10 of the ADJR Act for the commencement of judicial review proceedings had not expired prior to proceedings being commenced in this Court.
The Commissioner submitted that the 28-day period had expired for both plaintiffs and that accordingly leave was required to extend the time. It was further submitted that an inadequate explanation for the plaintiffs’ delay of more than 12 months was provided and accordingly, the Court should refuse leave.
The debate between the parties requires some understanding of the point at which time commences to run for the limitation period provided for by the ADJR Act.
Section 10 of the ADJR Act relevantly provides:
10Period in which application for order of review must be made
(1) An application to the Supreme Court for an order of review in relation to a decision that has been made (including a decision made after the end of the period within which it was required to be made) must be made within the period required by subsection (2) (or any further time allowed by the court) if the terms of the decision were—
(a) recorded in writing; and
(b) set out in a document that was given to the applicant.
Note The court may allow further time after the end of the period required by s (2) (see Legislation Act, s 151C).
(2) For subsection (1), the period within which an application for an order of review is required to be made is the period beginning on the day the decision is made and ending 28 days after the relevant day.
…
(6) In subsection (2):
relevant day means—
(a)if the decision includes, or is accompanied by, a written statement of reasons for the decision—the day a document setting out the terms of the decision is given to the applicant; or
Note For the meaning of statement of reasons, see the dict.
(b)if paragraph (a) does not apply and a written statement of reasons for the decision is given to the applicant (otherwise than because of a request under section 13 (1)) not later than 28 days after the day a document setting out the terms of the decision is given to the applicant—the day the statement is given to the applicant; or
(c)if paragraph (a) does not apply and the applicant requests the person who made the decision to give a statement under section 13 (1)—
(i) the day the statement is given to the applicant; or
(ii) the day the applicant is told under section 13 (3) that the applicant was not entitled to make the request; or
(iii) the day the Supreme Court makes an order under section 13 (6) declaring that the applicant was not entitled to make the request; or
(iv) the day the applicant is told under section 14 (3) or section 15 (3) that the statement will not be given to the applicant.
(d)in any other case—the day a document setting out the terms of the decision is given to the applicant.
In respect of St Landco, the August 2019 Assessment was made pursuant to s 277E of the Planning Act. Under that section, when an application for reconsideration is made, the Commissioner must, within 20 working days, reconsider the original decision and either (emphasis added):
(i) Make a decision in substitution for the original decision that the commissioner could have made; or
(ii) Confirm the original decision.
The emphasised words confirm that the August 2019 Assessment was in substitution for the June 2019 Assessment. The date of the document setting out the terms of the decision is therefore 2 August 2019.
St Landco relied on the fact that it requested a statement of reasons and that it was only on 18 November 2020 that the Commissioner informed St Landco that a statement of reasons would not be provided. Section 10(6)(c)(iv) of the ADJR Act applied and the Originating Application was filed on 15 December 2020, within 28 days of such notification. I accept that St Landco does not require an extension of time but have proceeded to consider the alternative position in the event that such acceptance is later found to be incorrect.
For Empire Global, the initial decision was the November 2019 Assessment, but I consider the date of the April 2020 Assessment, being the deemed confirmation on 23 April 2020, to be the relevant day from which time commenced to run. The Originating Application was filed on 29 January 2021. No reasons were sought in the interim.
Empire Global (and St Landco in the alternative) submitted that the Court ought to extend the time within which to bring the application. The Court has the power to do so under s 151C of the Legislation Act 2001 (ACT) (Legislation Act); see also Director of Public Prosecutions (ACT) v Martin [2014] ACTSC 104 at [156] (Martin).
Although the provision dealing with extension of time under the Rules (r 3557) requires special circumstances, no such requirement arises for an extension of time under the ADJR Act: Hartigan v Treasurer of the Australian Capital Territory [2018] ACTSC 271 at [19].
That interpretation accords with judicial consideration of the equivalent provision in the Administrative Decisions (Judicial Review) Act 1977 (Cth) (s 11(1)(c)): Seiler v Minister for Local Government and Ethnic Affairs (1994) 48 FCR 83 at 97 (Seiler), quoted with approval by Griffiths J (Edmonds J agreeing) in Mentink v Minister for Home Affairs [2013] FCAFC 113 at [36] (Mentink). The discretion to extend the time may be exercised either before or after the time period has lapsed: Legislation Act s 151C(3).
Determining whether to extend the time to commence proceedings involves considering what is necessary to do justice between the parties, the general principles being established by High Court authorities such as ReCommonwealth of Australia; Ex Parte Marks [2000] HCA 67; 177 ALR 491 and Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541.
Relevant factors include but are not limited to the length of the delay, the explanation for the delay, the merit of the proceeding, and any prejudice to the parties occasioned by the delay. An example of the application of these considerations is to be found in Martin at [153]-[160].
Delay and the explanation for it
There was a delay of approximately nine months in the case of Empire Global, and assuming the alternative for St Landco, a delay of over a year.
The plaintiffs’ explanation is apparent from the agreed facts. The delay was not a result of ignorance, inertia or neglect. Rather, it is referable to the other steps they took to challenge the various assessments made by the Commissioner in the Tribunal.
The Commissioner argued that the pursuit of relief in lower forums was inadequate to explain a delay of over 12 months, given the Tribunal had no jurisdiction to review decisions in relation to remissions, and as such any delay consequent upon Tribunal proceedings was the product of the plaintiffs’ own error.
The plaintiffs did not appeal either of the Tribunal’s decisions. It is far from clear that the Tribunal was self-evidently an inappropriate forum in which to bring their complaints, but as there was no appeal, it is unnecessary to consider that matter further. The relevance of the Tribunal proceedings to the present applications is that the fact they had been brought meant that the Commissioner was plainly on notice that the decision was contested, as well as being on notice of the grounds of complaint. This is not a case where any questions of credit will be involved, such as to prejudice evidence in the proceedings, or of the delay causing any other prejudice to the Commissioner. In circumstances where I consider the plaintiffs’ applications have arguable merit, I am satisfied that an extension of time is warranted.
The substantive question – were the plaintiffs entitled to the benefit of the economic stimulus remission?
Whether the Commission erred in issuing a notice of assessment that did not calculate the LVC by reference to the 2016 Instrument requires a proper understanding of the applicable statutory framework dealing with LVC and economic stimulus remissions.
The applicable statutory framework
The legislation has been amended during the period in which the plaintiffs’ development applications were made and is already somewhat complex due to the subject matter, all of which regrettably makes for laborious reading in considering whether the Commissioner should have applied an earlier legislative instrument when issuing a notice of assessment.
There is a helpful overview of the statutory framework and how land is held and managed in The Constitution of the Australian Capital Territory (Federation Press 2021) where Mossop J (writing extra-judicially) in his chapter on Land Management discusses at 169-70 how land in the ACT is held upon Crown lease from the Commonwealth. Under s 29 of the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), the Executive of the Territory is empowered to grant leases of ACT land on behalf of the Commonwealth.
Historically, some leases granted by the Territory imposed only “nominal rent” obligations. Conditions attached to such leases, such as restricting the use of the leased land to a specified public purpose.
Chapter 9 of the Planning Act deals with leases and licences. Part 9.6 concerns lease variations and Division 9.6.3 of the Planning Act deals with what happens when a nominal rent lease is varied, with an example being a variation to permit commercial development of the land, which is what occurred in the case of St Landco and Empire Global.
If the lease is varied, then a lease variation charge or LVC is payable. Section 276D of the Planning Act provides (notes omitted, emphasis added):
Lease variation charges—notice of assessment
(1)On approval of a development application for a chargeable variation, the commissioner for revenue must give—
(a)A notice of assessment of the lease variation charge to the lessee; and
(b)If the development application in relation to the chargeable variation is made by someone other than the lessee—a copy of the notice to the applicant.
(2)A lease variation charge is taken to be worked out—
(a)on the day the development approval of the chargeable variation is approved; or
(b)if another day is prescribed by regulation—on that day.
(3)A notice of assessment lapses on the earlier of—
(a)the day the lease variation charge is paid; or
(b)the day the development approval of the chargeable variation lapses.
The words emphasised above fix the time at which market value is to be determined in calculating the LVC.
Calculating the LVC
The calculation of the LVC occurs in two ways. For some types of nominal lease variations, the Treasurer may determine the lease variation charge, and it is described as a s 276E chargeable variation. That did not occur here.
For all other types of nominal lease variation, the LVC is governed by s 277 of the Planning Act, which relevantly provides:
277Lease variation charges—s 277 chargeable variations
(1)The commissioner for revenue works out the lease variation charge for a s 277 chargeable variation of a nominal rent lease as follows:
LVC = (V1 – V2) x 75%
There is a detailed definition of LVC, V1 and V2 set out in s 277(2). For present purposes, in the above:
(1)V1 is the capital sum that would be realised if the lease were varied as proposed and genuinely offered for sale at arm’s length immediately after that variation.
(2)V2 is the capital sum that would be realised if the lease were not varied, the lease was offered for sale at arm’s length, and the rent payable remained a nominal rent.
Thus, in essence, the LVC is the amount which is 75% of the increased market value of the lease.
Remission of a lease variation charge
The current regime for remitting a lease variation charge is that which is contained in s 278 of the Planning Act, as follows (notes omitted, emphasis added):
278Remission of lease variation charges
(1)The Minister may determine circumstances in which an amount of a lease variation charge for a chargeable variation of a nominal rent lease must be remitted.
(2)If a determination is made under subsection (1), the Treasurer must determine an amount to be remitted for each lease variation charge for a chargeable variation to which the determined circumstances apply.
(3)The amount must be expressed as a percentage of the lease variation charge for a chargeable variation.
(4)The commissioner for revenue must remit the amount determined under subsection (2) for a chargeable variation to which the determination applies.
(5)A determination under this section is a disallowable instrument.
The current s 278 was inserted by the Lease Variation Amendment Act and has been in force since 17 May 2018.
At the time each of the Empire Global DA and the St Landco DA was lodged (in May and October 2017 respectively), the statutory regime for remitting an LVC was different. What was in place was ss 278-278F of the Planning Act, which had been in force since 1 July 2011, following amendments made by the Lease Variation Amendment Act.
Under the previous statutory regime, the framework listed a number of categories where the Commissioner was obliged to remit an LVC: s 278 (sustainability); s 278A (certain zones); s 278B (community purpose); s 278C (heritage significance); s 178D (environmental remediation); s 278E (other); and s 278F (chargeable variations generally). Of these provisions, ss 278E is relevant here. It provided (notes omitted, emphasis added):
(1)The Minister may determine circumstances in addition to section 278 to section 278D in which an amount of a lease variation charge for a chargeable variation of a nominal rent lease must be remitted.
(2)The Treasurer may determine an amount to be remitted for a lease variation charge for a chargeable variation in a circumstance determined by the Minister.
(3)A determination is a disallowable instrument.
(4)The commissioner for revenue must remit the amount determined under subsection (2) for the lease variation charge for the chargeable variation.
The emphasised words in the previous s 278E and the current s 278 are to draw attention to the fact that under both provisions, once certain circumstances determined by the Minister were met, the decision to remit an amount of an LVC was not discretionary. That has significance when consideration is given to the nature of the right created and whether it was preserved upon the amendment of the Planning Act (discussed below).
The 2016 Instrument was made pursuant to the now-repealed s 278E on 2 March 2016. The following clauses are material to the present dispute:
2 Commencement
This instrument commences on 7 March 2016.
3 Application
This instrument applies to a lease variation charge for a s 277 chargeable variation of a nominal rent lease if–
(a)a development application for the variation is approved on or after 7 March 2016; and
(b)the approval also relates to the development of a building on the land under the lease.
4 Determined circumstances–economic stimulus–Act, s 278E (1)
I, the Minister for Planning and Land Management, determine the following circumstances:
(a)a development application for a s 277 chargeable variation of a nominal rent lease is approved; and
(b)the approval also relates to the development of a building on the land under the lease.
5 Remission of lease variation charge–economic stimulus–Act, s 278E (2)
(1) This section applies to a chargeable variation of a nominal rent lease to which the circumstances mentioned in section 4 apply.
(2) I the Treasurer, determine the amount of the lease variation charge for the chargeable variation to be remitted is worked out as follows:
(V1 – V2) x 25%
(3) In this section:
V1–see the Act, s 277 (2)
V2–see the Act section 277 (2)
…
14 Expiry
This instrument expires on 6 March 2018.
The objective of the 2016 Instrument, as stated in the Explanatory Statement that accompanied it (at 2-3), was “to continue to generate building and construction industry activity and high level sustainability outcomes for the ACT [by] providing an economic stimulus to developers seeking to redevelop sites within the current economic climate.” The same statement later notes that “the ACT Government aims to continue to generate construction and investment activity at a time when demand is easing off”.
In respect of clause 14, the Explanatory Statement to the 2016 Instrument stated:
It is appropriate that the instrument expires at this time as the main objective of the instrument is to generate construction and investment activity for a further two years.
On 6 March 2018, the 2018 Instrument was made. It extended the operation of the Sustainability Remission provided for in the 2016 Instrument, but not the economic stimulus remission.
The 2018 Instrument contained a further expiry clause, indicating that it expired on commencement of the Lease Variation Amendment Act.
As stated above, this occurred on 17 May 2018, and upon commencement, the Lease Variation Amendment Act expressly repealed both the previous statutory regime for remission of an LVC, and a number of the instruments made pursuant to that regime, including the 2016 Instrument.
Legislation Act
To complete the framework operating on the present dispute, there are a number of provisions of the Legislation Act which require consideration.
Section 84(1) of the Legislation Act provides:
84 Saving of operation of repealed and amended laws
(1) The repeal or amendment of a law does not –
(a)revive anything not in force or existing when the repeal or amendment takes effect; or
(b)affect the previous operation of the law or anything done, begun or suffered under the law; or
(c)affect any existing right, privilege or liability acquired, accrued or incurred under the law.
Section 82 defines “law” to mean an Act or statutory instrument, and “repeal” to include “lapse and expire”.
Section 84(2) of the Legislation Act is also relevant. It provides:
(2) An investigation, proceeding or remedy in relation to an existing right, privilege or liability under the law may be started, exercised, continued or completed, and the right, privilege or liability may be enforced and any penalty imposed, as if the repeal or amendment had not happened.
Section 84 is a general savings provision. It operates here in the absence of any applicable transitional provisions included in the Lease Variation Amendment Act. Some attention was directed to transitional provisions in that statute, including s 497, which dealt with development applications lodged before the commencement of the Lease Variation Amendment Act taking advantage of provisions permitting deferral of an LVC. However, that transitional provision does not deal with the circumstances presently before this Court. Neither party referred to it as having any bearing on the issue here.
Section 84 is also a determinative provision, meaning that it can only be displaced expressly or by manifest contrary intention: Legislation Act s 6. Other provisions also worthy of attention include ss 7(3), 138 and 139 of the Legislation Act, which require the Court in working out the meaning of the relevant law to take a purposive approach to issues of statutory interpretation. That is why the purpose of the 2016 Instrument was explained above.
The arguments of the parties
The plaintiffs asserted that the lodgement of their development applications within a reasonable period prior to the expiry of the economic stimulus scheme provided them with an accrued right to remissions under the 2016 Instrument.
Relying on s 84 of the Legislation Act, they submitted that the lodgement of the development application in a form capable of approval before the 2016 Instrument expired meant that they had a right to the application of the economic stimulus remission if and when their development applications were approved.
To be clear, the plaintiffs did not put that right as being an entitlement to an approval of the DA at an earlier date. Rather, the “accrued right” said to have arisen was that when the development application was ultimately approved, the economic stimulus remission applied to the approval. That is because the benefit of 2016 Instrument had been preserved by the operation of s 84 of the Legislation Act, even though the 2016 Instrument itself had expired and then was subsequently formally repealed.
The Commissioner argued that a right to a partial remission of the LVC due to the economic stimulus remission never accrued for either of the plaintiffs. That is because the right was tied to the approval of a development application, and the 2016 Instrument had expired before an approval was obtained. The Commissioner pointed to the words of s 276D(2) of the Planning Act, that the LVC is “taken to be worked out on the day the development approval of the chargeable variation is approved” and to the express words that the remission set out in each instrument only applied to a s 277 chargeable variation of a nominal rent lease if “a development application for the variation is approved” after 7 March 2016 (for the 2016 Instrument) or 7 March 2018 (for the 2018 Instrument).
Do the plaintiffs have an accrued right that was preserved?
Although not without difficulty, I have reached the conclusion that on a construction of the statutory framework that gives primacy to the purpose and intention of the 2016 Instrument, the plaintiffs did have an accrued right to the application of the economic stimulus remission upon approval of each development application.
The principles that I consider apply here are as follows.
First, the words in s 84 of the Legislation Act, “right, privilege or liability acquired, accrued or incurred” are to be construed by reference to the provision of the repealed statute which is in question: Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; 221 CLR 30 at [96]; see also Chang v Laidley Shire Council [2007] HCA 37; 234 CLR 1 (Chang) at [117].
The common law has developed rules of statutory construction as an aid to discovering that meaning (including distinguishing between retrospective and prospective effect, and between procedural provisions and provisions affecting rights or liabilities): Attorney-General (Qld) v Australian Industrial Relations Commission [2002] HCA 42; 213 CLR 485 at 492 (Gleeson CJ). However, it is preferable to have regard to the interpretation statute (being the Legislation Act here): Ogden Industries Pty Ltd v Lucas (1967) 116 CLR 537 at 582 (Windeyer J). It has been noted elsewhere that judicial consideration of statutory provisions has been informed by the approach to the common law presumption: see Perry Herzfeld and Thomas Prince, Interpretation (Thomson Reuters, 2nd ed, 2020) at 253 and the cases there-cited.
On the facts of this case, the result is the same regardless of whether s 84 of the Legislation Act or the common law presumptions are invoked. The parties agreed that ss 276D and 278E of the Planning Act, as they stood at the time the applications were made, are provisions affecting rights and liabilities, rather than procedural provisions. If a substantive right was created, the presumption against retrospective operation applies, as opposed to what might have been the case if the sections dealt only with the procedure by which remissions were to be applied: see Rodway v The Queen (1990) 169 CLR 515 at 518.
Second, there is no right to simply take advantage of an existing statute, which has been described as a right “in abstracto”: Abbott v Minister for Lands [1895] AC 425. There must be some action by the party claiming the right to translate it from a general right available to all to “some specific right which in one way or another has been acquired by an individual, and which some persons have got and others have not got”: Starey v Graham [1899] 1 QB 406 at 411, cited with approval in Boyce v Hughes [1970] 1 NSWR 75 at 57.
In Chang at [114] this was described as a “potential right”. The plaintiffs in that case were said to have a potential right because, although an earlier version of the planning legislation had given them a right to compensation for a reduction in land value occasioned by a change in the legislative scheme regulating the subdivision of that land, they had not lodged a development application with the Laidley Shire Council prior to the amendment of the legislation which removed the right.
Third and in contrast to a theoretical right, a right that is conditional or contingent on a certain set of circumstances (an inchoate right) can be preserved: Esber v Commonwealth (1992) 174 CLR 430 (Esber) at 440; Mathieson v Burton (1971) 124 CLR 1 at 23 (Gibbs J).
What is required in such cases is that the statutory machinery for obtaining the decision has been set in train before the repeal (in this case): Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc (1960) 103 CLR 422 at 426-7; Kronen v Commercial Motor Industries Pty Ltd [2018] FCAFC 136; 264 FCR 408 at [62].
Fourth, in assessing whether a conditional right was preserved upon repeal through the application of general savings provision, consideration may need to be given to whether the right asserted was contingent on a discretionary decision. Examples applying that principle include Kentlee Pty Ltd v Prince Consort Pty Ltd [1998] 1 Qd R 162 and New South Wales Aboriginal Land Council v Minister Administering Crown Lands (Consolidation) Act & Western Lands Act (1988) 14 NSWLR 685 (known as “Winbar Claim [No 3]”). In the latter case, in considering the NSW equivalent provision to s 84 of the Legislation Act, Hope JA articulated when an inchoate statutory benefit may be preserved at 696:
… a statutory right will be preserved notwithstanding the repeal or amendment of the statute even though the right can only be implemented by a non-discretionary decision of an official or a court, provided that the statutory machinery for obtaining that decision has been set in train before the repeal or amendment.
In the present case, as at 2017 when they each lodged their development application, what the plaintiffs had was a right to the non-discretionary application of the economic stimulus remission upon approval of their development application by the Commissioner in issuing the notice of assessment. They maintained that right until 6 March 2018.
It is true that because the development applications were proceeding in the merit track under the Planning Act, there was an element of discretion whether to approve each development application and to that extent, the outcome of the development was uncertain, but that does not defeat the right being preserved. The same is true of any statutory process commenced with a view to obtaining a benefit when the process has not yet been completed. As submitted by the plaintiffs, the Commissioner’s argument that the development applications themselves were required to be determined before the right accrued wrongly conflates the concept of accrued rights (which may be conditional) with determined rights.
What is important here is the non-discretionary nature of the benefit itself: if the condition of a development approval was satisfied, the benefit of applying the economic stimulus remission automatically flowed, in that the Commissioner “must remit” the amount.
The plaintiffs here had undoubtedly set in train the statutory steps necessary to achieve the benefit in question. On one view of the facts, they had done everything within their power or control to enable the Authority to approve each development application before the 2016 Instrument expired.
During the hearing and in written submissions, the parties went to some considerable length in setting out the history of how each development application proceeded, when it was amended and what consequence that had for statutory timeframes. The parties disagreed as to how to calculate the time limits prescribed in s 122 of the Planning Act, in terms of the overall time frame for a decision to be made by the Authority. When there are amendments to a development application, the fact of amendment extends the timeframe for the making of a decision, with those circumstances governed by a process set out in s 169 of the Planning Act.
It has not been necessary to delve into that detail, because the statutory benefit in question here does not depend upon whether the Authority made a timely decision with regard to the approvals or complied with the timeframes prescribed under the Planning Act. If there was some unexplained delay on the part of the Authority, it had no consequence. It suffices to find that on the facts that were agreed, there was no suggestion that either development application was incapable of approval as at 6 March 2018 (the day the 2016 Instrument expired).
There is nothing in the statutory framework set out to detract from the above analysis as to the nature of the right. For example, apart from the limited circumstances concerning deferral of payments of an LVC (as discussed at [78] above), there are no specific transitional provisions in the 2018 Instrument or Lease Variation Amendment Act dealing with development applications lodged but not determined prior to those amendments. There is certainly no transitional provision prescribing that the 2018 Instrument only applies to development applications lodged but not approved before the commencement of the 2018 Instrument.
A purposive interpretation of the 2016 Instrument and the 2018 Instrument is also consistent with the above interpretation. As seen from the Explanatory Statement, the object that the legislature was intending to achieve was to generate building and construction industry activity by providing a stimulus measure to encourage development in the Territory. It would be contrary to that objective to introduce a measure that had the desired effect of developers making applications to redevelop sites in the period while the stimulus measure was effective (at what must be accepted as being a significant investment in time and cost) only to take away the benefit before those applications were finally approved.
The Commissioner argued that adopting a purposive construction would require a rewriting of either the 2016 Instrument or 2018 Instrument regardless of when approval was granted. However, the basis for that argument was not established. There is nothing in the words of the 2018 Instrument that requires rewriting or words of amendment. It continues to apply to those developments that receive an approval after it commenced in its terms, save that, by the operation of s 84(1)(c) of the Legislation Act, the 2018 Instrument does not affect the existing rights of those whose development applications were made under an earlier statutory regime. Indeed, contrary to the Commissioner’s submission, clear words would have been required to remove such a right, and they are absent from the Lease Variation Amendment Act or the 2018 Instrument itself.
To the extent that the Commissioner relied on the words of s 276D(2) of the Planning Act, that the LVC is “taken to be worked out” on the day the development approval of the chargeable variation is approved, those words fix the time for calculating value, but not the entitlement to any remission of an amount. It is a deeming provision directed to a different purpose. Express words would have been required for that section to be construed as removing an accrued entitlement. It follows that those words could not be relied upon to support an argument that there was a manifest contrary intention to displace s 84 of the Legislation Act.
For the above reasons, the statutory right of the plaintiffs to the application of the economic stimulus remission upon approval of the Development Applications in question was preserved.
Consequences for the Notices of Assessment
As a result of an apparent misconstruction of the legislative framework that applied to the relevant development approval, the August 2019 Assessment (in respect of the Gungahlin Site) and the November 2019 Assessment (in respect of the Greenway Site) did not apply the 2016 Instrument and therefore did not apply the economic stimulus remission. Those notices of assessment were therefore affected by error of law.
Conclusion and Orders
The plaintiffs have made out a case for declaratory relief and consequential orders, although in light of the reasoning concerning the actual substantive decisions before the Court for judicial review, the form of the orders that I consider it is appropriate to make differs from that proposed in the originating processes in each proceeding.
Further, in the proceeding brought by St Landco, the August 2019 Assessment was set aside by the Tribunal on 9 October 2020 on a separate ground which is unrelated to these proceedings. At the time of hearing, no further notice of assessment had been issued. A declaration is all that is necessary for St Landco to obtain relief. If a further notice of assessment has been made in the meantime, then it will be a matter for the Commissioner to give effect to the declaration.
Costs orders will be made on the usual discretionary basis that costs follow the event.
The orders are as follows:
In proceedings SC 446 of 2020
(1)Pursuant to s 10(1) of the Administrative Decisions (Judicial Review) Act 1989 (ACT), leave is granted to extend the time in which to commence proceedings to 15 December 2020.
(2)It is declared that St Landco No. 1 Pty Ltd ACN 614 636 805 (the plaintiff) is entitled to the application of DI2016-28 being the Planning and Development (Remission of Lease Variation Charges – Economic Stimulus and Sustainability) Determination 2016 (No 1) in the calculation of the Lease Variation Charge arising from the approval of Development Application 201732666 in respect of Blocks 4 and 5 Section 224 Gungahlin, ACT.
(3)The defendant is to pay the plaintiff’s costs of the proceedings.
In proceedings SC 28 of 2021
(1)Pursuant to s 10(1) of the Administrative Decisions (Judicial Review) Act 1989 (ACT), leave is granted to extend the time in which to commence proceedings to 29 January 2021.
(2)It is declared that Empire Global Developments No. 3 Pty Ltd ACN 158 072 158 (the plaintiff) is entitled to the application of DI2016-28 being the Planning and Development (Remission of Lease Variation Charges – Economic Stimulus and Sustainability) Determination 2016 (No 1) in the calculation of the Lease Variation Charge arising from the approval of Development Application 201731587 in respect of Block 1 Section 78 Greenway, ACT.
(3)The notice of assessment dated 11 November 2019, in respect of the Lease Variation Charge levied in relation to Block 1 Section 78 Greenway, ACT, is set aside.
(4)The matter is remitted to the Commissioner for ACT Revenue (defendant) for further determination according to law.
(5)The defendant is to pay the plaintiff’s costs of the proceedings.
| I certify that the preceding one hundred and nine [109] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam .................. Associate: Date: 29 June 2022 |
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