T & a Skills Care Service Pty Ltd v Chief Commissioner of State Revenue - [2025] NSWCATAD 18

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: T & A Skills Care Service Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCATAD 18
Hearing dates: 14 and 15 November 2024
Date of orders: 15 January 2025
Decision date: 15 January 2025
Jurisdiction: Administrative and Equal Opportunity Division
Before: J Sullivan, Senior Member
Decision:
(1)   The name of the Applicant is corrected from T & A Skills Care Services Pty Ltd to T & A Skills Care Service Pty Ltd.
(2)   The assessments of the Land to land tax for the 2019, 2020, 2021 and 2022 land tax years are confirmed.
(3)   If any party desires to make an application for its costs of these proceedings:
   (a)   that party is to so inform the other party within 21 days of the date of these reasons;
   (b)   the applicant for costs is to lodge with the Tribunal and serve on the respondent to the costs application any written submissions of no more than five pages on or before 28 days from the date of these reasons;
   (c)   the respondent to any costs application is to lodge with the Tribunal and serve on the applicant for costs any written submissions of no more than five pages on or before 42 days from the date of these reasons;
   (d)   any reply submissions limited to three pages are to be lodged with the Tribunal and served on the other party within 49 days of the date of these reasons.
   (e)   the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application and, if they do not consent, why an oral hearing should be conducted rather than the application being determined on the papers.

Catchwords:
TAX AND REVENUE – land tax – primary production exemption – onus of proof not satisfied

Legislation Cited:
Administrative Decisions Review Act 1997 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)
Land Tax Management Act 1956 (NSW)
Taxation Administration Act 1996 (NSW)

Cases Cited:
Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 25
Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25
Cornish Investments Pty Limited v Chief Commissioner of State Revenue [2012] NSWAD 204
Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20
Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 355
Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867
Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408
Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 23
McIntosh Bros Pty Ltd (In Liq) v Chief Commissioner of State Revenue [2019] NSWCATAD 124
Metricon Qld Pty Limited v Chief Commissioner of State Revenue (No. 2) [2016] NSWSC 332
Safety Beach Estate Pty Ltd v Commissioner of Land Tax (NSW) (1979) 79 ATC 4032
Triston Pty Ltd atf The Ghantous Family Trust v Chief Commissioner of State Revenue [2017] NSWCATAD 100
Triston Pty Ltd v Chief Commissioner of State Revenue [2018] NSWCATAP 37
Vartuli v Chief Commissioner of State Revenue [2014] NSWSC 678
Vartuli v Chief Commissioner of State Revenue [2015] NSWCA 372
Warriewood Pty Ltd v FCT 93 ATC 4653

Texts Cited:
None cited

Category: Principal judgment
Parties: T & A Skills Care Service Pty Ltd (Applicant)
Chief Commissioner of State Revenue (Respondent)
Representation:
Counsel:
C Bolger (Applicant)
J Mitchell (Respondent)
Solicitors:
Vince Margiotta Law Practice (Applicant)
Crown Solicitor (Respondent)

File Number(s): 2024/00051319
Publication restriction: Pursuant to orders made on 15 November 2024 under s 64(1)(a) of the Civil and Administrative Tribunal Act 2013, publication or broadcast of the name of the Respondent’s expert bamboo shoot witness is prohibited. The expert is referred to as “Ms N” for the purpose of these proceedings.
Note: A reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.

REASONS FOR DECISION

The Applicant is T & A Skills Care Service Pty Ltd. It has owned a number of properties, including 75-115 Martins Rd at Badgerys Creek in New South Wales (the Land).
The Respondent assessed the Applicant to land tax in respect of the Land for the 2019, 2020, 2021 and 2022 land tax years (Relevant Years). The Applicant objected, but the Respondent disallowed the objection.
The issue is whether the Land was exempt from land tax because it satisfied the primary production exemption:

in s 10AA(1) of the Land Tax Management Act 1956 (NSW) (LTM Act). for the 2019 and 2020 land tax years (when it was “rural land”); and

in s 10AA(2) for the 2021 and 2022 land tax years (when it was not “rural land”).

The Applicant says that the dominant purpose (and use), as aggregated, of the Land was to cultivate bamboo for the sale of timber and, from 2021 onward, to also breed and maintain goats for sale. It says it engaged in this commercial endeavour for the purpose of deriving profit, and therefore met the requirements for an exemption under s 10AA of the LTM Act. It also points to additional use of the Land said to have been conducted in the Relevant Years in respect of stock owned by the lessee of a residence located on the Land.
The Respondent says that the Land was not exempt from land tax in any of the Relevant Years because the Applicant has not discharged its onus of proof and therefore not satisfied the legislative requirements for the exemptions in s 10AA in any Relevant Year.
For the reasons set out below, I agree with the Respondent and the assessments to land tax are confirmed.

Material before the Tribunal

The Applicant filed:

its application to the Tribunal on 9 February 2024 (A1);

a witness statement of Van Tri Huynh (Mr Huynh) dated 22 April 2024 with annexures “A” to “P” (Huynh Statement) (A2);

written submissions (A3);

an affidavit of Mr Huynh dated 12 November 2024 (Huynh Affidavit) (A4);

email correspondence dated 23 October 2022 relating to Mr Huynh (handed up at the hearing and marked A5).

The Respondent filed:

documents under s 58 of the Administrative Decisions Review Act 1997 (ADR Act) (R1);

an affidavit of Edmund Simon Winter dated 13 September 2024 (R2) annexing an expert witness report (Winter Report);

affidavits of Rebecca Kiu dated 12 September 2024 (R3) and 16 September 2024 (R4);

an affidavit of Jennifer Snyders dated 20 September 2024 (R5) annexing an expert witness report (Snyders Report);

an expert witness report of Ms N filed on 20 September 2024 (N Report) (R6);

written submissions dated 20 September 2024 (R7);

a further affidavit of Ms Kiu, and written submissions of the Respondent, requesting a suppression order (refer para 9 below) (R8 and R9); and

11 photographs of the Land in August 2024 handed up at the hearing (R10).

Mr Huynh, Mr Winter and Ms Snyders attended the hearing and were cross-examined. Mr Huynh was assisted by a Vietnamese interpreter. Ms Kiu and Ms N were not required for cross-examination. The name of Ms N (and accompanying affidavit to her expert witness report) was subject to a confidentiality (suppression) order made by the Tribunal at the hearing.

The Assessments under review

Land Tax Assessment Notices for the Relevant Years issued on 15 August 2023 (R1, p107ff), relating to the Land and other land owned by the Applicant. The additional land tax payable on the basis that the Land was not regarded as exempt (although not separately calculated on those notices) was in the order of:

$119,200 for the 2019 land tax year (average land value $5.96m);

$201,800 for the 2020 land tax year (average land value $10.09m);

$273,000 for the 2021 land tax year (average land value $13.65m); and

$698,000 for the 2022 land tax year (average land value $34.9m).

The Applicant objected against the assessments for the Relevant Years on 19 September 2023 (R1, p200), which was disallowed by the Respondent on 13 December 2023 (R1, p240).
The Application to the Tribunal was filed within time.

THE LAND

The Applicant bought the Land in in 2002 for $1.9m. It was around 42 acres or 16.8 ha, comprising 6 lots (30, 31, 32, 33, 34 and 35) in DP 3050. An aerial photograph of the Land taken in 2024 – with handwritten descriptions by Mr Huynh) – was annexed to the Huynh Statement and is referred to below as Annexure F.
The Land was zoned as rural land (“RU4”) when purchased. It was rezoned to non-rural land (“Enterprise”) in October 2020, as it was part of the Badgerys Creek “aerotropolis” area.
The Applicant sold the land in July 2023 for $70 million.

USE OF THE LAND

Tenancies – 85 and 115 Martins Rd

Two parts of the Land were tenanted. Rental records obtained by the Respondent under summons – requesting (inter alia) all lease agreements for the property “in effect from 1 January 2011 to 31 December 2022” – show (R3, Tabs 3 and 4):

85 Martins Rd (part of Lot 34) – was leased to Ms Turner for $350 p/wk ($18,200 p/a) from 10 October 2015 until 28 February 2022. The lease was terminated following issue of a notice dated 7 December 2021.

115 Martins Rd (part) – was leased to Mr Chum for $120 p/wk ($6,240 p/a) from 5 October 2010 to 25 May 2023.

The Applicant’s evidence - Bamboo

Mr Huynh grew up on a bamboo farm in South Vietnam. He migrated to Australia from Vietnam in 1976 or 1977. He is the director and shareholder of the Applicant, as is his wife. The Applicant and other family companies conduct various businesses. Their children assist with the businesses.
The Applicant purchased the Land in 2002 with the intention of using it to cultivate bamboo for the production of bamboo shoots for sale as foodstuffs.
The Applicant owned other properties in the Relevant Years, including at Nardoo Road in Peats Ridge (Nardoo Rd), purchased “shortly after” the Land, and on which bamboo was also being grown.
Between 2002 and 2007, the Applicant prepared the Land for bamboo production. This preparation work included: clearing the land; constructing three dams and other water management infrastructure for irrigation; constructing a bore hole; and researching which bamboo species would be best to produce, including a trip to China by Mr Huynh. The Applicant also purchased equipment for its bamboo venture, including an irrigation system, tractor lawnmower, backhoe, wood-chipping machine, Nissan tip truck, Toyota Hi Ace and other mowers.
There were records of purchases of bamboo plants in earlier years. Mr Huynh said that hadn’t bought any for the Land since 2007. His evidence changed several times, possibly due to the translation. But as he repeated this answer with consistency when Counsel for the Respondent sought his clarification, I accept it to be correct.

No bamboo shoot operations

Despite sales figures in Mr Huynh’s statement referring to income from the sale of bamboo shoots and poles during the period under review, the Applicant conceded on Day 2 of the hearing there were no sales of bamboo shoots, or bamboo poles, in any Relevant Year in respect of the Land. The Applicant said it therefore did not “read or rely on” the submissions where references were made to income or bamboo shoots, or “the cultivation of bamboo for the sale of bamboo shoots”. Mr Huynh confirmed to the Tribunal that the income related to Nardoo Rd, and not the Land. He explained that although bamboo shoots were harvested from the Land during earlier years (when, he told the Tribunal “both he and the caretaker were in better health”), no bamboo was sold or harvested from the Land after 2016.
Although not required for cross-examination, Ms N had said in her expert report (R6 at C3) that of the three varieties observed on the Land, the majority of the bamboo species was Old Hamii, which was not suitable for producing bamboo shoots. There were two areas of the land that had stands of Latiflorus growing, and several stands of “mostly deceased” Asper plants, being the only two species that she would deem viable for bamboo shoot production.
I therefore find that in the Relevant Years, there was no bamboo shoot business, or relevant sales, in respect of the Land.

“Bamboo timber business”

Mr Huynh said the Applicant had changed its business model from shoots and poles to “bamboo timber production”. That meant that during the Relevant Years, the bamboo was essentially left alone to grow until harvesting occurred in a later year.
Following from the Applicant’s concessions, I also find there was no harvesting from the Land, or sales, of bamboo poles for timber during the Relevant Years.
The only evidence presented by the Applicant in respect of any activity undertaken on the Land relating to tending to the bamboo plants was the following comments in the Huynh Statement (A2):

At [34] (albeit in the context of the production of bamboo shoots, which is no longer pressed), he said:

… Once the bamboo plant (or clump) has been established it requires very little ongoing maintenance. This is because the plant:
a. does not need fertiliser;
b. does not need pruning;
c. is self-seeding; and
d. Only needs to be watered for the first few years and thereafter is somewhat self-sufficient.

At [46], he referred to “running expenses for bamboo operations” of $5,399.02 for FY2019, $9,079.46 for FY2020, $9,873.25 for FY2021 and $7,089.13 for FY2022. There was no documentary evidence in support of these expenses. It was not explicitly stated to be running expenses relating to the Land.

At [40] and [47] he referred to the role of the caretaker who lived on the Land at 115 Martins Rd, and his own injury in 2010:

40. I employed a caretaker to manage the bamboo crop and the property on a full-time basis and harvest the bamboo shoots. The manager was paid a wage in cash of approximately $420 a week in cash. The manager also had the use of the dwelling house at 115 Martins Road, Badgerys Creek (being Lot 31 of DP 3050) at a subsidised rate of $120 per week.
…
47. In 2010 I suffered an injury while working at the Peats Ridge property which impacted my ability to work the property and harvest the bamboo. The caretaker became unwell due to high blood pressure and diabetes in 2012 which also impacted his physical ability to work the property and harvest the bamboo. The physical limitations impacted the harvesting of bamboo from after 2015 and I started to consider alternatives to harvesting bamboo shoots as a means of making money agricultural use of the land [sic]

At [51] he referred to some of the Relevant Years:

51. Between the financial years of 2021 and 2022 I also undertook to maintain [the Land] in connection with the bamboo farming and goat herding, including:
a. Mowing overgrown grass with tractor;
b. Welding irrigation pipes for water feeders and cleaning of goat’s house;
c. I engaged builders to change the roof for the goat house and
d. some renovations to the premises at 85 Martin Road so that an office could be set up where the tenants were once residing

At [52], he referred to Attachment “I”, being a photo of “my son cutting the grass at [the Land] on the tractor”. It was undated.

At [53], he referred to Attachment “J” being “a photo of sons welding the irrigation pipes at [the Land]”. It was also undated.

In his (later) affidavit (A4), responding to the expert evidence filed by the Respondent (discussed below), Mr Huynh said:

20 … Most of the bamboo on [the Land] is Old Hamii bamboo. It wasn’t ready for harvesting until 2019….
21 After 2019 I was allowing the Old Hamii bamboo to grow for poles and furniture. The crop was not being fertilised as it would have encouraged growth and the poles would not be as suitable for timber goods or timber furniture. The crop did not need watering as it had already been established.
22 I acknowledge that there was dead wood in the bamboo crop. That dead wood was available to be used for other purposes on the property including use in a treatment plant for the bamboo crop for use as timber goods or furniture. The plant was not purchased as the property was sold.

Annexure F showed an area next to the dams which was marked “Cleaning and packing Bamboo”. Mr Huynh told the Tribunal that it was used for cleaning and packing bamboo shoots, and stayed there for a few years for the “second farm”. When asked whether that area was used for the 2019, 2020, 2021 and 2022 years, he said “No”.
There was no comprehensive explanation by Mr Huynh of the “bamboo timber business”, although he said that each pole had to be “at least 10 years old” and that harvesting “could not occur until 2019”. It was not made apparent what the end product for the sale of the bamboo (timber goods, timber furniture, timber flooring) was proposed to be, nor to whom the sales would occur. No business plan for the “bamboo timber business” was in evidence.

The Respondent’s expert evidence - bamboo

Ms Snyders is the Chief Executive Officer of House of Bamboo and Australian Bamboo Plantations. She has a Bachelor of Science in Architecture, and leverages her technical expertise to promote the adoption of bamboo as a viable building material. With over 20 years of experience, I am satisfied she has extensive knowledge in bamboo cultivation, product manufacturing, processing, marketing and distribution. She is a member of the Australian Institute of Architects and serves as the President of the Bamboo Society Australia.
She confirmed the contents of her affidavit (R5) and annexed report and they were accepted into evidence.
The bamboo grown on the Land was observed, in 2024, to be constituted of about 80% Old Hamii. The other 20% was constituted of Latiflorus and Asper species.
She said it was “very likely that all bamboo timber in Australia has been imported from overseas and not grown onshore”. She confirmed that Old Hamii is a suitable variety of bamboo for bamboo poles and bamboo wood production (e.g. for engineered floors). It was a “clumping” species which she described as “very fast growing and very straight”, meaning the culms (stems) grow straight up rather than fanning out.
She explained to the Tribunal that every year, a bamboo plant sprouts new culms. These can be harvested as young shoots, or continue to grow. Once a culm is cut, it doesn’t regrow. But another culm sprouts the following year. If not harvested, the culms grow into bamboo poles. Older and larger poles may be used for bamboo timber.
In her report at 5.1 she said (my summary):

There were approximately 2,000 clumps of bamboo (bamboo plants) on the property. The majority, Old Hamii, was not listed in Annexure D of the Huynh Statement (showing purchases of bamboo plants made in 2005, and stated on the invoice to be shipped to Nardoo Rd, Peats Ridge, and not the Land).

She said the clumps across both plantations were “around 20 years old” (an estimate based on Google photos from 2008 and 2021, and expected age of plant stock when purchased).

She estimated each clump consisted of approximately 80 culms with up to 10 new culms being generated annually, which aligned to the estimated age of 20 years.

She said the majority of existing living culms were well over 10 years of age and “well beyond the practical lifespan for bamboo pole harvesting because they have not been appropriately maintained”.

In her report, she pointed to the following cultivation practices relating to bamboo:

Irrigation [5.2]: There was no evidence of a current, functioning irrigation system, although there were indications of a prior use irrigation system which did not appear to cover all of the bamboo plantation areas. The lack of adequate irrigation supported her claim that the clumps appeared to be comparatively smaller than expected for their age and genus types. She noted that the Applicant had produced a quotation for irrigation which related to a Peats Ridge property, not the Land.

Fertiliser [5.3]: There was no residual evidence of fertilisers used on the bamboo plantations. Soluble or granulated fertiliser would be required on a regular basis to support growth of the bamboo. Evidence such as discarded fertiliser bags were not observed. Fertiliser would have positively impacted the growth rate, leading to thicker and taller culms than were observed.

Thinning [5.1] and [5.4]: The photos she took (Images 4-7) showed very dense bamboo clumps, indicating that no thinning out had been undertaken. She said:

… the clumps and culms were inconsistent in size. This indicates that the plantations were not maintained in a systematic way. When maintained appropriately, bamboo requires ‘thinning’ of the new shoots to ensure existing shoots grow thicker and more uniformly to promote vigorous new growth. This thinning out process usually happens prior to the new culm shooting season.
When all shoots are the same size, it generally indicates growth has been managed for optimum yield, which was not evidenced at the property.
There is no indication that thinning of the bamboo clumps has taken place over the last 8 to 10 years.

Keyholing [5.5]: Keyholing is a common practice to remove dead wood; for bamboo, this includes removing dead culms inside the clump. She saw no evidence of keyholing of the clumps. This would have supported more vigorous growth and higher yield production – either for shoot or pole production.

She said it is usual practice to “mark” the culms every year so that the growth every year can be measured accurately, and the age of the plant can be easily identified. There was no evidence of such marking on the plants.
She concluded that “a proper bamboo commercial farm does need regular tending to support commercial production – the bamboo does not appear to be cultivated according to good management principles.”.
It was clear from her report that Ms Snyders had taken the term ‘bamboo timber’ in Mr Huynh’s Witness Statement (which she had reviewed in preparing her report) to be a reference to ‘bamboo poles’, because Australia did not have a functioning bamboo (engineered) timber manufacturing industry.

Cross-examination of Ms Snyders

In cross-examination by the Applicant, Ms Snyders was taken to paragraphs 3.3 (Bamboo Poles) and 3.4 (Bamboo Timber) of her report. She was asked whether there was any difference in the species of bamboo for poles versus timber. She said there are more than a thousand species of bamboo, most of which could be used for poles, but only around 12 species (including Old Hamii) were used worldwide for bamboo timber production.

when asked “was it possible to harvest the existing poles and clumps?”, she said that it could have been suitable for poles, which she clarified to be “decorative poles”, but not for timber;

she confirmed that there was “nothing inconsistent” with moving from shoots to poles and timber. But she said that the pole has to be 5-7 years of age before it is ready to be harvested, and should have been marked to show the yearly growth;

she reconfirmed her view that thinning was “essential”;

she disagreed with the suggestion that by not using fertiliser, the yield was not as thick and therefore better for timber, saying “No, not from my experience”.

Ms Snyders was taken to section 6.3 of her report (Rate of Return) in which she stated:

It is difficult to estimate a reasonable rate of return from the bamboo planted at the Land. A rough calculation can be based on the following conservative assumptions.
There were approx. 2,000 clumps sighted on the property.
Each plant is estimated to produce 20kg of bamboo shoots per annum which can be sold for $5/kg. This means the total revenue from the bamboo shoots would be estimated at $200,000 per annum.
Further to this, we would estimate 5-10 poles per annum can be harvested for this purpose from each clump. The average price of these poles is $15. This means the estimated annual income is $150,000-$300,000 per annum.
So the total income from selling bamboo shoots and poles would be $350,000 to $500,000 per annum.

As noted above, the Applicant no longer pressed the harvesting or sale or bamboo shoots.
It was put to Ms Snyders that, based on her answers above, that 5-10 poles per clump could have been harvested and sold for the prices stated, which she did not appear to dispute.
On re-examination, she confirmed that there were no markings on any poles when she did her inspection. In respect of the “Rate of Return”, she confirmed that her calculation was based on an assumption that you have a well-maintained plantation in which thinning, marking and proper tending had been done. It was also, I observe, based on “sales” pricing put in evidence by the Applicant but no longer relied upon to evidence sales of bamboo poles (which, as noted by the Respondent, was for a species (Moso) not actually grown on the Land).
Although Ms Snyders’ Report was focussed on bamboo poles, I find no material differences were adduced in respect of appropriate cultivation practices if the bamboo was grown for bamboo timber production; and her evidence in this regard was not relevantly challenged under cross examination.

The Applicant’s evidence – “Cattle/Goat business” (Animals owned by Ms Turner)

Mr Huynh said that Ms Turner “and her partners” were conducting a cattle and goat business from around the time the tenancy commenced, until the termination of her lease in March 2022. The Applicant’s submissions referred to this as the “Cattle/Goat business”, relying on the following passages from the Huynh Statement:

73 In or about December 2011, [the Applicant] leased part of lot 34 being 85 Martin Road to [Ms Turner and Mr Adams]. [Ms Turner] remained a tenant until March 2022, however, during that period she changed partners and [Ms Tedesco] became a tenant instead of [Mr Adams].
74. [Ms Turner] operated a cattle and goat business from [the Land]. [Ms Turner] had approximately 50 head of cattle and 50 head of goats at any one time. I allowed [Ms Turner] to run her livestock over the [Land]. The rent that [Ms Turner] paid was for the use of the dwelling house and the land for the grazing of livestock for her business. [Ms Turner] installed a pen and loading ramp for the loading and unloading of her livestock. I understood from [Ms Turner] that she sold the livestock for profit.
75. There was no apportionment in the rent charged and paid by [Ms Turner] between the livestock and the dwelling house. In or about late 2021 the cattle and goats started to eat the bamboo. I complained to [Ms Turner] and said to her that she did not address this issue and contribute to installing a fence on 85 Martins Road to protect the bamboo. [Ms Turner] did not agree to do this and I asked her to move out, which she did in March 2022.
76. After [Ms Turner] moved out 85 Martins Road [sic] that property was not offered for lease again. I decided to breed and sell goats from the property myself together with continuing the bamboo business, focussing on future timber production.

In his oral testimony, Mr Huynh was taken to the 2015 lease agreement. He said that its terms had been “verbally agreed between the agent and tenant and I didn’t sign the lease”. He said he agreed to let her have cattle on the land on the condition she took care of it, and it didn’t encroach on the bamboo land. But, he said, in 2021 she let them encroach, and “she let cattle eat my bamboo leaves” and so he terminated the lease. There was no evidence the Land was ever fenced to stop animals roaming through the bamboo.
He said that when 85 Martins Rd was leased to Ms Turner, she “always” had cattle and goats on the property. He said it was not temporary, because “I needed the goats to eat the grass”. He said “there were a lot running around”.
The version of Ms Turner’s lease agreement before the Tribunal commenced on 10 October 2015 (not 2011), for weekly rental of $350 for “residential premises” being 85 Martin Road (sic) Badgerys Creek. I find that to be the relevant terms of the lease in place for the Relevant Years.
It stated “House only land is not including” (sic). The tenant agreed not to keep animals on the residential premises without obtaining the landlord’s consent, and the landlord agreed that the tenant could keep “Dogs” and “Cat”.
Photographs of goats and cattle present on the Land during the Relevant Period (some undated) are discussed below. None show any number approaching “50 cattle and 50 goats”.
The Applicant said Ms Turner could not be located, despite attempts by its solicitor. There is no statement from Ms Turner, nor any business records of her cattle and/or goat operations.
Nor did the Applicant produce:

an agistment agreement (or full details of its terms);

evidence that rental of $350 p/wk exceeded market rent for the residential premises;

evidence in support of Mr Huynh’s statement that “[Ms] Turner installed a pen and loading ramp”;

evidence of any maintenance or tending to Ms Turner’s stock while on the Land; or

evidence in support of Mr Huynh’s statement that it was his “understanding that she sold the livestock for profit”.

The Applicant’s evidence – the Applicant’s “goat breeding” business

Mr Huynh said that in 2021, he decided to change to “goat breeding production”. The Applicant’s submissions referred to this as “a further business of breeding goats for sale, independent of the tenant’s business”, relying on the following passages from the Huynh Statement:
This was set out in his statement (A2) as follows:

Breeding and Maintaining Goats
64. In or about 2021 T&A Skills commenced a further business of breeding goats for sale in Australia.
65. The reason I undertook this new business was because I suffered an injury which inhibited me from harvesting the bamboo.
66. From 7 December 2021 and June 2023 [sic] I undertook to make the following infrastructure investments to [the Land] in preparation for the goat business:
a. Replace the roof on the goat shed and the workshop;
b. Repaint walls of the goat shed;
c. Underpinning of piers to shed;
d. Laid concrete for the goat shed;
e. Make good existing roof beams;
f. New electrical wiring;
g. Plumbing work to provide water trough for the goats and water to clean goats.

67. This preparatory work totalled $142,873.00
68. Attached and marked “O” under the heading Shed and Building improvement is a list of the construction works prepared by my accountant for the financial year ending 2022.
69. Additionally, I undertook construction works completed by myself with my sons help which included:
Soldering copper pipes for water irrigation for the animal drinking troughs (22 May 2022);
Cutting grass with my tractor so that the livestock could graze;

70. On or about 2^nd April 2022 I purchased an initial number of goats being four female Boar Goats for $2,200 and one male boar goat for $600 which was never delivered to us.
71. Attached and marked “O” is a copy of the invoice for the goats dated 2^nd April 2022.
72. We attempted to purchase more goats because we had the capacity for up to 200 goats however despite our efforts we were unable to purchase any others.

There was an invoice (at Annexure P, not Annexure O) for four female Boar goats purchased by the Applicant in April 2022 for $2,200. There was no invoice for the purchase of a male goat.
There is some evidence, in the form of an “Annual General Ledger” extract for the 2022 financial year showing “Shed and Building Improvements for 85 Martins Road”, for expenditure of $142,873 on a goat shed (Huynh Statement at [67]) but no full reconciliation of these amounts to invoices. There are invoices dated 17 August and 4 October 2022 totalling $101,450 (not annexed to his statement) which refer to work undertaken on the goat shed roof (R1 at pp 44, 45). The “goat shed” was described on Annexure F as “Pick house (later goat house)”. Mr Huynh explained this meant “Pig house” which was on the Land when it was acquired.

Cross-examination of Mr Huynh

In cross-examination, Mr Huynh was taken to Exhibit R10 (comprising 11 photographs taken on the Land in August 2024):

At pages 1-2: The photographs showed a pile of gravel on the Land. Mr Huynh said that his neighbour had some gravel and he asked if he could “put driveway to include the gravel, but then it was sold”. He said it “stayed there” after it was sold, but he did not pay for it. He referred to “tried to pour gravel”, but it is reasonably clear that the pile remained in that location from the time of its placement in 2021 until after the Land was sold in 2022.

At pages 3-4: The photographs showed metal framing and a piece of equipment (shown in the foreground on p.4). Both were clearly sitting on the Land, abandoned and in disrepair, with many pieces of metal sharp metal protruding from them, and long grass growing in and around them. Mr Huynh said the equipment was “fake flowers equipment” which had been “put on the Land 2005, ages ago”, but it was not clear whether it had once been in the warehouse and later removed from the warehouse and placed on the Land. The metal framing, Mr Huynh said, was “Kings Grove nursery equipment”; he said “starting 2021, started to buy equipment from nursery”. He did not say that either item related, in any way, to the primary production operations alleged in this case, and I find they were not.

At pages 5-11: Mr Huynh confirmed that the photos showed items which had been located in the shed labelled on Annexure F as the “Equipment Storage Shed”. He said the items related to another business and 6 operating offices, and had been put in the shed in 2005. I find that shed was used, at all relevant times, for storage of items unrelated to any primary production operations alleged in this case.

Mr Huynh was also taken to the Annual Returns of Land and Stock as at 30 June 2019, 2020 and 2021 for the Land which were produced under a summons issued by the Respondent (Kiu Affidavit, R3, Exh “RK-1” at p41ff). Mr Huynh confirmed that no animals were disclosed on those returns as present on the Land. He was asked if he knew that all animals, whether owned or not, were required to be disclosed on the returns. Mr Huynh said that the returns were prepared by his daughter, and not by him. He said that he “did not have much to do with the cows or goats”, which I infer to mean the cows or goats owned by Ms Turner.
A Property Identification Code (PIC) was requested for the Land in 2023.

The 2023 “business plan”

Although there was a business plan relating to the “goat business”, it was dated in May 2023 (R1, p81ff) and was not annexed to Mr Huynh’s Statement or Affidavit so its authorship is unverified. It estimated that the goat herd would be acquired at a cost of $100,000 in 2023/24, but the purchases and closing stock were both noted as entries under “expenses”. It showed that a net profit would arise in 2025/26, but there was no detail regarding the pricing or proposed markets relating to the sales figures, nor any supporting verifiable documentation. Although considered by Mr Winter, it is to be regarded with some caution as to its relevance in my assessment of the use of the Land as at 31 December 2021 (the 2022 land tax year).

Expert evidence of Edmund Simon Winter – cattle and goats

Mr Winter was an expert witness for the Respondent.
He affirmed the contents of his Affidavit dated 13 September 2024 and the accompanying expert report (Winter Report), other than requesting the addition of “land” to para [36], which was accepted.
Mr Winter’s area of expertise is livestock production and marketing, specifically beef cattle, sheep, goats and alpacas. I am satisfied of his expertise as an expert witness.
The Winter Report was based on his inspection of the Land on 10 July 2024, and included photographs he took.

Observations regarding “Ms Turner’s stock”

Mr Winter had regard to the Applicant’s assertion that the Land was alleged to have carried 50 head of cattle and 50 head of goats (Hyunh Statement [74]-[75] extracted above). Mr Winter said (at [26]) that he had seen “no evidence to support this claim”. He referred to photos submitted by the Applicant (noting the location appeared to have been the Land) showing:

Approx. 29 cattle (undated);

Approx. 11 goats (11 May 2019);

Up to five cattle and two goats (23 June 2021); and

Up to 13 cattle (30 January 2022).

He said the type and number of cattle completely changed between 23 June 2021 and January 2022 (at 26h) from British European breed cattle to a mixed line of breeding (at 26i).

Area of the Property available for cattle and/or goats

Based on total land area of 16.8ha, Mr Winter said the estimated area of the Land “left for grazing” was 5.5ha.
This was based on estimated percentages of “utilised land” being 67.2% (11.3ha) of the Property. This was calculated to comprise “Bamboo” (51%), “Houses” (4.8%), “Dams” (3.9%), “Greenhouses” (2.3%), and “Sheds and yard” (5.2%).
Mr Winter said the calculation was based on either Annexure F or “Nearmaps” information (included in s 58 documents), but could not recall. On being shown Annexure F, Mr Winter said he was “pretty sure he marked it up by drawing lines and boxes” and he had used a ruler to do that. He did not annex workpapers to his report, or bring any papers or worksheets to the hearing.
When asked how the area of 51% for bamboo had been calculated, he said that he “drew a straight line up” from the bottom so that the areas marked as bamboo on the left and right hand sides of the page were sectioned and then he calculated that area relative to the total area as 51%. He confirmed that this was “certainly” only an estimate. He acknowledged that some areas marked as “previously bamboo” were not included. He acknowledged there were other areas of bamboo marked elsewhere on Annexure F which were not included. It is not relevantly in dispute, and I find, that the majority of the Land was planted with bamboo as at 31 December prior to each Relevant Year.

Pasture and DSE calculations

He then determined the carrying capacity of the 5.5ha for animal use. For this purpose, “dry sheep equivalents” (DSE) was used. So – for example - a dry (non-lactating) goat or sheep was 1 DSE, a cow with calf 13 DSE, and a growing yearling “approximately 8 DSE”.
The NSW Government Local Land Services had applied 8.77 DSE to the Land, so on the basis of the estimated 5.5ha, he concluded that the Property could carry 48 DSE, which he explained as follows:

[33] To summarise, the carrying capacity of the Land that is available for grazing … equals 5.5ha. On this land, you could sustainably graze 48 goats, or 24 does with kids, or 4 cows with calves, or 6 growing yearlings.

He noted the absence of any actual sales information, and estimated the following gross returns for cattle (cow/calf operation) or goats (either one or the other) as follows:

Year

Cattle

Goats

2019

$3,000

$2,800

2020

$4,400

$2,800

2021

$5,200

$2,800

2022

$6,000

$2,800

And after allowing for variable costs (livestock health, contract services and transport selling of $40/head) and fixed labour costs of $7,000 (at [39]), he said:

[40] Even though these figures are indicative only, they identify that gross returns from cattle or goats would be between $2,800 and $6,000 per annum, but the costs of producing those livestock would be at least $7,000 and $40/head. It is also worth noting that the Applicant reported spending $142,873 between December 2021 and June 2023 on upgrading the goat shed (Applicants Evidence, p10, para 67). These costs, alone, would take decades to recover, if at all.
[41] From this I conclude that the scale and operation of the livestock enterprise (as far as it is known) is incapable of producing a positive financial return over the foreseeable future on a continuous and repetitive basis, even if there was a favourable market feed and stock growing conditions.

Observations regarding the alleged cattle and goat operations

He said (at [49]) that his expectations of a cattle or goat operation on the Land with regard to the intensity of the operation, size and quality of the herd, size and carrying capacity of the Land and resources put into the development and maintenance would include the following:

a A demonstrated commitment to agricultural production. Images from the Relevant Tax Years, and my visit, highlight a lack of commitment to either bamboo or livestock production. Without dividing fences, livestock were able to graze the bamboo, which undermined the potential returns of both enterprises.
b. This is exacerbated by the Land being used as a storage/dumping ground for a variety of machinery, equipment and structures, as shown below [images were included in the report]
c. A grazing management plan would be apparent, including the use of grazing and fertiliser the maximise pasture production, achieve a greater grass / clover mix and restriction in weeds.
d. Improved internal fencing to stop livestock accessing buildings and facilities and divide the grazable Land into manageable paddocks.
e. Due to the good seasons that prevailed during the Relevant Tax Years, some evidence of fodder conservation practices, such as haymaking or silage production, would have been expected.
f. Development of appropriate infrastructure, such as laneways, yards and loading ramps to be able to adequately manage the livestock.
….

And at [50] and [51]:

[50] … If farming is taken seriously, then the purpose is to maximise the opportunities. This was not the case on the Land during the Relevant Tax Years, or since.
[51] It appears that many different opportunities were considered/commenced but not followed through. This includes areas of bamboo that did not grow were not replanted, remnants of bird aviaries on the property (example at Image 5, above), development of the goat shed on the Land (although never used), storage of office furniture in sheds on the Land….

Cross-examination of Mr Winter

Under cross-examination, in respect of the Applicant’s “goat operation”:

Mr Winter confirmed that the carrying capacity could be increased if feed was brought on to the Land;

He did not agree with the Applicant’s suggestion that if the shed was used for goats, it should be included in the available acreage. He had also excluded the area marked as “greenhouse” and agreed that available acreage would be increased if it (the greenhouse) was removed.

He said the business plan’s estimate of 200 goats would be akin to a “feedlot” and that would be “unprecedented” in his opinion. He conceded it “could” be done, but it would need a lot of additional planning.

He noted the business plan said the intention was to house the goats in one of the sheds. He observed there were 25 pens in the shed. However, unlike stalls for pigs (where sows could produce big litters), doe goats produced one kid and sometimes twins by exception. So the shed would be unlikely to house all the goats.

He explained that goats were ruminants and had 4 stomachs. A foreign object eaten by mistake “can cause injury or death”. So foreign objects and materials on the land would have to be cleaned up, or fenced off; that was not included in the business plan (e.g. no fencing costs).

On re-examination, Mr Winter said:

Even if the acreage estimate was more generous (e.g. 50% of the Land available for goats and/or cattle), his conclusion at [41] of his report would not change.

Goats are a “marginal operation” and sheep provided better returns.

The intensive management of goats is “high risk”. The usual goat farms operated across very large paddocks where goats could roam across farms, were brought in under muster, and then selected from those mustered for sale or breeding.

Grazing must work in conjunction with pasture management. In this case, there was evidence of some pasture improvement, and the grass type was predominantly Kikuyu.

There was no evidence of internal fencing of the land. In the images produced (and included in the s58 documents (R1)), cattle were “running through the sheds and grazing the bamboo”.

The proposed nursery business

At paragraphs [60] – [63] of the Huynh Statement, there was reference to a proposal for a nursery business to be conducted on the Land. That did not proceed.
I agree with the submissions of the Respondent that it is not relevant to my consideration of the matters before me, other than noting (as above) that some nursery equipment and a greenhouse was present on the Land.

Funding costs

No funds were borrowed for the purchase of the Land, or subsequently. A subsequent extension to the Applicant’s line of credit facility did not change this position. Notwithstanding this was the matter of some focus by the Respondent in cross-examination of Mr Huynh, in respect of documents obtained by the Respondent under summons, I find that there was no interest expense relating to the Land for any Relevant Year.

Other business records

The Respondent obtained income tax records and business activity statements from the Commissioner of Taxation (R1 at p222-230), which evidence the following (as summarised in the Respondent’s submissions (R7 at [2.23])):

(a) The Applicant carried on business in the “Technical and Vocational Education and Training” sector and made sales and purchases as follows:
(i)    FY 2019: $1,075,676 in sales; $1,076,905 in purchases.
(ii)    FY 2020: $673,830 in sales; no purchases.
(iii)    FY 2021: $836,056 in sales; $237,103 in purchases.
(iv)    FY 2022: $3,433,581 in sales; no purchases.

(b) [The Applicant] derived income from a business address at 525 Cabramatta Road Cabramatta in “Other Livestock Farming” as follows:
(i)    FY 2019: $710,057.
(ii)    FY 2020: $625,804.
(iii)    FY 2021: $804,848.
(iv)    FY 2022: $811,615.

(c) The Applicant had 1 or 2 employees in the Relevant Years, with gross wages as follows:
(i)    FY 2019: $5,400.
(ii)    FY 2020: $28,000.
(iii)    FY 2021: $34,649.
(iv)    FY 2022: $62,000.

consideration

Jurisdiction and onus of proof

The Tribunal has jurisdiction to conduct this administrative review: s 96 of the Taxation Administration Act 1996 (NSW) (TA Act), s 9 of the ADR Act and s 30 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act).
The Tribunal “stands in the shoes” of the Respondent in conducting a merits review. The Tribunal’s task is to decide what the correct and preferable decision is having regard to the material before it, including any relevant factual material and any applicable written or unwritten law: ADR Act, s 63.
Importantly, the Applicant has the onus of proving its case: TA Act, s 100(3). That means it must prove all matters necessary for the Tribunal to answer the statutory questions in its favour: Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 (Cornish) at [36]. The standard of proof is the balance of probabilities. In Cornish, a case similar to the one before me, the Appeal Panel of the Administrative Decisions Tribunal agreed that the taxpayer failed to discharge its onus, in respect of a question arising under the predecessor provisions of ss 10AA(1) and 10AA(3)(a); at first instance (in Cornish Investments Pty Limited v Chief Commissioner of State Revenue [2012] NSWAD 204), the following comments by SM Verick are still relevant to the task before this Tribunal:

[23] Although I am required to make a finding concerning the use of the Cornish Land on 31 December for each Tax Year under review, but as suggested by his Honour in Leda Manorstead v Chief Commissioner of State Revenue it is permissible to look at the evidence in relation to a reasonable period before and after that relevant date. In Leda his Honour considered “six months before and after the relevant date is a reasonable period for inquiry”.
[24]  It is, however, first necessary to consider the question of the burden of proof, which is I think a question of much importance in this matter. The inquiry is, essentially, to establish whether the Applicant has discharged the onus placed on the Applicant under s 100(3) of the TA Act, which provides that the “applicant has the onus of proving the applicant’s case in an application for review”. Also note “in an application for review to an Appeal Panel of the Tribunal the applicant in the application for review continues to bear the onus of proving the applicant’s case in an appeal if the Appeal Panel grants leave for the appeal to extend to a review of the merits of the decisions” (s 100(4)).
[25]  There is no onus on the Chief Commissioner to show that the assessment was correctly made. This was made clear by Mason J when construing a similar provision in the Commonwealth income tax law in Gauci v Federal Commissioner of Taxation [1975] 135 CLR 81 at 89 —
The Act does not place any onus on the Commissioner to show that the assessments were correctly made. Nor, is there any statutory requirement that the assessments should be sustained or supported by evidence. The implication of such a requirement would be inconsistent with s 190(b) for it is a consequence of that provision that unless the appellant shows by evidence that the assessment is incorrect, it will prevail.
[26]  More recently the above view was approved by the High Court in Federal Commissioner of Taxation v Dalco( 1990) 168 CLR 614.
[27]  I think it is clear from the authorities that the onus of proof in relation to the main issues of fact is on the applicant (see Krew v Federal Commissioner of Taxation 71 ATC 4091) and that, if the applicant is unable to establish that it is entitled to the exemption under s 10AA of the LTM Act, the assessment must stand irrespective of any error in the Chief Commissioner’s assessment or his understanding of the facts. The latter is a principle of long standing (see Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63 and affirmed by the High Court in Federal Commissioner of Taxation v Dalco).
[28]  In Dalco, Brennan J, who handed the principal judgment and with whom all members of the court agreed with his Honour’s reasoning, provided the following guidance as how to discharge the onus at p 624:
The manner in which a taxpayer can discharge that burden varies with the circumstances. If the Commissioner and a taxpayer agree to confine an appeal to a specific point of law or fact on which the amount of assessment depends, it will suffice for the taxpayer to show that he is entitled to succeed on that point. Absent such a confining of the issues for determination, the Commissioner is entitled to rely upon any deficiency in proof of the excessiveness of the amount assessed to uphold the assessment …

[29]  Land tax, like income tax is an annual impost, in discharging the onus an applicant is required to consider each year separately and “it must be shown in respect of a particular year that the challenged assessment was wrong” (see Krew).
[30]  To discharge the onus borne by the Applicant, the Applicant was required to establish affirmatively, on the balance of probabilities, that in each of the Tax Years under review the Cornish Land was predominantly used for an activity or activities recognised in s 10AA as a primary production activity or activities.
[31]  Under s 73(2) of the ADT Act, the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. But in considering an application the Tribunal must, however, not ignore the commonly accepted rules of evidence as was suggested by Evatt J when considering a provision similar to s 73(2) in R v The War Pensions Entitlement Appeal Tribunal and another; ex parte Bott (1933) 50 CLR 228 at 256:
Some stress has been laid by the present respondents upon the provision that the Tribunal is not, in the hearing of appeals, “bound by any rules of evidence”. Neither it is. But this does not mean that all rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of inquiry best calculated to prevent error and illicit truth. No Tribunal can, without grave danger of injustice, sit then on one side and resort to methods of inquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such do not bind, every attempt must be made to administer “substantial justice”.

[32] More recently, Deputy President Forgie Re Optimise Group Pty Ltd and Commissioner of Taxation [2010] AATA 782 at [32] explained to the extent a tribunal needs to rely on the rules of evidence in making a determination:
For all practical purposes, there is often little difference between the task of a court bound by the rules of evidence and that of the Tribunal in assessing the relevance and probity of material. Each must assess the weight that it gives to the pieces of evidence or other material that it has. Each must also consider the weight, if any, to be given to the failure of a person to produce evidence or material in its control or to call a witness who might be expected to have relevant evidence. When considering omission, the principles in Jones v Dunkel are, on their face, just as relevant in Tribunal proceedings as in court proceedings even though they are regarded as among the rules of evidence.

[33] The Deputy President at [58] also made the important observation that —
Merely establishing on the balance of probabilities that the Commissioner has made an error cannot satisfy the taxpayer’s burden of proof …

[34] Although there is no statutory requirement for an applicant to produce as a witness any particular person or produce any documentary evidence (see Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 83 ATC 4015), it is, however, necessary for the applicant to produce sufficient evidence to discharge the onus.

In conducting its review, the Tribunal may (among other things) confirm or revoke the assessments, or make a decision in place of the reviewable decision, and make orders as to costs or otherwise as it thinks fit, s 101(1) of the TA Act.

The Land Tax exemption - relevant legislation and principles

Land tax is levied on the owner of land at midnight on 31 December immediately preceding the year for which land tax is levied, s 8 of the LTM Act.
Section 10AA of the LTM Act says:

10AA Exemption for land used for primary production
(1)    Land that is rural land is exempt from taxation if it is land used for primary production.
(2)    Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land—
(a)    has a significant and substantial commercial purpose or character, and
(b)    is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).

(3)    For the purposes of this section, land used for primary production means land the dominant use of which is for—
(a)     cultivation, for the purpose of selling the produce of the cultivation, or
(b)     the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or
…

(4) For the purposes of this section, land is rural land if—
(a)  the land is zoned rural, rural residential, non-urban or large lot residential under a planning instrument, or
(b)  the land has another zoning under a planning instrument, and the zone is a type of rural zone under the standard instrument prescribed under the Environmental Planning and Assessment Act 1979, section 3.20, or
(c)  the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land.

Godolphin (High Court 2024)

The High Court in Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20 (Godolphin) has recently confirmed that s 10AA requires a “use-for-a-purpose” approach. As stated by the plurality of Gordon, Edelman and Steward JJ at [28] and following, my emphasis (with whom Gageler CJ and Jagot J agreed):

28.   …when the text of s 10AA(3) is read in its immediate statutory context and in light of broader statutory and extrinsic context, the word [“dominant”] qualifies one composite phrase, namely (and relevantly) “use of which is for ... the maintenance of animals ... for the purpose of selling them ...”. The “use-for-a-purpose” construction is thus correct.
29.   The “use-for-a-purpose” construction is supported by the presence of the word “for”, which is the last word in the chapeau. As Kirk JA correctly observed, the provision requires that the dominant use be for something. That something is, relevantly here, all of para (b) of s 10AA(3). That paragraph uses a composite phrase that combines an identified use of the land as well as a specified purpose for that use.
30.   Further, the structure of a number of exemptions for primary production in s 10AA(3) follows the same pattern: each paragraph sets out first the genus for the exemption followed by a particular species, delineated by reference to a purpose, which must also be satisfied. Thus, in the case of s 10AA(3)(a), the genus is “cultivation”; this is then qualified by a more specific species, namely “for the purpose of selling the produce of the cultivation”. In the case of s 10AA(3)(d), the genus is “the keeping of bees”; the species is “for the purpose of selling their honey”. In each case, both the genus and its species must be satisfied. And the word “dominant”, appearing as it does in the chapeau to s 10AA(3), qualifies both.
31.   The same observation can be made about s 10AA(3)(b). The genus is land being used for the maintenance of animals; the species of that genus is that the maintenance is “for” the purpose of selling those animals or their natural increase or bodily produce. Once again, the word “dominant” qualifies both. That a “significant” use of the land was for breeding horses falls short of demonstrating that the “dominant” use of the land was the maintenance of horses for the purpose of selling them or their natural increase or bodily produce. In that respect, the word “dominant” should be given its natural meaning; it refers to that which is “ruling, prevailing, or most influential”.
32.   The broader statutory context also supports the Commissioner’s construction. Section 10A(1) operates where land is used for multiple purposes each of which is exempt; without having to show which use is “dominant” the whole of the land is exempt from taxation. The premise of this provision assumes, relevantly in the case of s 10AA, that a “dominant” purpose would otherwise need to be demonstrated.

Jagot J - Consideration of prior cases and establishment of principles

Jagot J conveniently reviewed prior cases in order to summarise principles that were relevant to the construction and interpretation of the relevant exemption provisions (citations/footnotes omitted) at [63]-[67] (my emphasis, and spacing added at [67]):

63. In Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue, Gzell J, considering s 10AA(2) and (3) of the Act, said that “[d]ominant in its ordinary meaning connotes ruling, prevailing, or most influential. The statute’s reference to a dominant use presupposes that land may be used for more than one purpose and requires a determination of which use of the land is the main, chief or paramount use.” In determining that question, his Honour applied the approach of the Land Appeal Court of Queensland in Thomason v Chief Executive, Department of Lands, namely that “the proper approach to be taken when ascertaining the dominant use of land is to consider such matters as the amount of land actually used for any purpose, the nature and extent and intensity of the various uses of the land, the extent to which land is used for activities which are incidental to a common business or industry of a type specified ... the extent to which land is used for purposes which are unrelated to each other, and the time and labour and resources spent in using the land for each purpose. When undertaking this exercise, one cannot ignore the conclusion that an objective observer would reach from viewing the land as a whole.”

64 In the appeal from Gzell J, in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue, Allsop P (with whom Campbell and Whealy JJA agreed) found nothing in the extrinsic material relevant to the insertion of s 10AA into the Act as justifying approaching the provision “in some beneficial fashion striving to expand the reach of the exemption or to narrow the taxing operation of the section according to strict language. More particularly, there is nothing in the purpose of the legislation, drawn from its words and context or from the secondary material insofar as that addresses mischief to require used ‘for’ to be limited to use of land which is producing beneficial or commercial return”.
65. In Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue, White J considered the application of s 10AA(3) to land used for multiple purposes. White J said that:
In this case, three competing uses are to be considered. The question is not simply whether the primary production use is the chief use, being of a greater scale, intensity, character or importance than either of the other two competing uses, but whether having regard to both competing uses, it is the use that dominates.
Section 10AA(3) requires weighing the nature and intensity of the competing uses, the physical areas over which they are conducted, the time and labour spent in conducting the different uses, the money spent or assets deployed in each use and the value derived or to be derived from it.

66. In Chief Commissioner of State Revenue v Metricon Qld Pty Ltd, Barrett A‑JA (with whom Macfarlan and Ward JJA agreed) reviewed these and other cases. Having done so, Barrett A‑JA made these points: (a) ”[e]xamination of ‘activities undertaken upon the land in question’ is thus central to identification of ‘use’”; (b) ”s 10AA is concerned with ‘use’ at large rather than ‘use’ by any particular person”; (c) ”[t]he expression ‘dominant use’ [in s 10AA(3)] has regard to quantification of uses within paras (a) to (f) as against uses that are not within those paragraphs”; and, (d) the context surrounding s 10AA(3) points to the “physical concept of land” as relevant to the provision, rather than “land” meaning estates or interests in land as defined in s 21 of the Interpretation Act 1987 (NSW).
The principles
67. Several propositions emerge from these cases which should be accepted as the foundation for the contemporary incarnation of the exemptions in the Act.
First, close attention to the precise terms of the exempting provision is required.
Second, the accepted orthodoxy in which the Act was enacted and has been amended is that use of land is for a purpose.
Third, in the ordinary case, the question is one of identifying the physical acts conducted on the land by which the land is made to serve some purpose.
Fourth, the question of the use of land for a purpose is one of objective fact to be determined in all relevant circumstances, but particularly the degree, extent and intensity of the physical activities on the land.
Fifth, as an objective fact, determined in all relevant circumstances, the same land may be used for more than one purpose.
Sixth, in determining the objective fact whether the same land is being used for more than one purpose it may be necessary to consider if the various physical activities conducted on the land, on the one hand, are wholly ancillary to or directly facilitative of a single purpose or, on the other hand, serve an additional, independent or collateral purpose. If the former, the correct characterisation will be that the land is being used for one purpose. If the latter, the correct characterisation will be that the land is being used for more than one purpose.
Seventh, and finally, where the same land is being used for more than one purpose, the question whether the use of the land is “solely”, “primarily and principally” or “dominantly” for the specified exempt matter requires a comparison between such uses (being for the specified statutory exemptions) and other uses (not being for the specified statutory exemptions) to ascertain whether the former is the main, chief or paramount use for purpose.

Present use, not contemplated use

Her Honour also confirmed that notions of potential future or contemplated use are not “use” of the Land in the relevant sense, saying at [82] and [86], my emphasis:

Godolphin’s view of its business operating on the basis that “it bred horses to race and raced horses to breed where the breeding farm supply the stock for the racing stable, the stable then proves them on the track that creates the supply of high end bloodstock assets of stallions and breeding females” – does not mean that, for s.10AA(3), it was using the Land for one integrated purpose. The necessary focus is not Godolphin’s conception of its business model, but rather the objective features of the physical activities being conducted on the two properties
…
It is the terms of the statutory exemptions which determine the relevant use for purpose, and it is the objective features of the physical activities on the land which determine the character of the actual use for purpose being conducted on the land.

This is not to say that preparatory works conducted on the Land may not be taken into account. As observed by Allsop J in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 355 (upholding the decision of Gzell J in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867) at [22]-[24]:

22 Reliance was placed on the ordinary dictionary definition of use, being: “The act of putting something to work, or employing or applying a thing, for any (esp. a beneficial or productive) purpose; the fact, state, or condition of being put to work, employed or applied in this way; utilization or appropriation esp. in order to achieve an end or pursue one’s purpose”; the Oxford English Dictionary (online).
23 None of these elements of the meaning of use requires a conclusion that use must involve productive return to be present use. As Mason P said in NSW Aboriginal Land Council v Minister Administering the Crown Lands Act [2007] NSWCA 281; 157 LGERA 18 at 25 [32] “use” is a “protean” term and can be measured from a number of different perspectives. In the High Court in the NSW Aboriginal Land Council case it was held that use of land involves utilisation, exploitation or employment and that it requires actual physical use, not some notional or potential future or contemplated use: at 293-294 [22], 296-297 [30]-[32] (per Kirby J) and 306-307 [73] (per Hayne J, Heydon J, Crennan J and Kiefel J) and see Thomason at 293.
24 I am unable to accept the bright line distinction made by Leda in its submissions. The words of the section (other than identifying particular uses in paras (a)-(f)) do not otherwise prescribe any particular use for which the land could be otherwise used. The particular uses identified in paras (a)-(f) are the uses for which the land must be dominantly used for the application of sub-s (3). As the appellant, Leda, submits, if there is another use for which the land is being put, it must be compared with the relevant use in, here, para (b). In evaluating any given circumstances there is no warrant within the words of the section or the meaning of the word “use” or the phrase “used for” to require beneficial return or any other like concept. There will be some circumstances in which activity on the land will be understood or evaluated as preliminary to the undertaking of a future use. That is not what s 10AA is directed to. There must be a present use for which the land is being used. That does not deny, however, the proper evaluation of any given circumstances. The appropriate task is the one which the primary judge undertook. Upon evaluation of all the material he asked himself what the people who owned the land were actually using it for. Or, to put the matter another way, what was the purpose of what the owner was doing on the land so that the question as to what the land was being used for could be answered? Here, looking at all the activities together with the surrounding circumstances of Leda’s evident purpose in carrying out those activities, it could be concluded (and was concluded by the primary judge, rightly, in my view) that the land was being used for commercial land development. The fact that the land was, at that time, at the stage of earthworks does not deny the present use of the land for commercial land development.

The time at which the assessment is required

Although the imposition of, and exemption from, land tax fixes upon ownership and use of land as at midnight on 31 December (of the year prior to the land tax year), the enquiry as to the use of land is not restricted to that one day of the year. As White J said in Metricon Qld Pty Limited v Chief Commissioner of State Revenue (No. 2) [2016] NSWSC 332 (Metricon) at [132]-[133]:

[132] Liability for land tax arises as at midnight on 31 December immediately preceding a calendar land tax year. In Longford Investments Pty Ltd v Chief Commissioner of Land Tax [(1978) 8 ATR 656], Sheppard J said (at 660-661) that although the liability for land tax arises as at midnight on 31 December, the question of whether land was used primarily for primary production was to be considered having regard to the facts spanning “some few months” before and after that date. In Leda Manorstead [v Chief Commissioner [2010] NSWSC 867], Gzell J applied this reasoning and said that in the circumstances of that case a reasonable period for inquiry was six months before and after the relevant date (at [4]). His Honour observed that that allowed for a consideration of the financial records pertaining to the uses to which the land was put.
[133] This approach recognises that the question of the dominance of a particular use, or whether a primary production use has a significant and substantial commercial purpose or character, requires examination not of a single event but of a state of affairs that exists as a continuum. Experience before and after 31 December that is part of that continuum can throw light on the position as it existed at that date. But that does not alter the fact that liability to land tax is imposed and hence a claimed entitlement to exemption is to be determined as at midnight on 31 December. This is significant where there is a material change occurring after 31 December.

The additional requirements in s 10AA(2)

For years in which the Land was not “rural land”, the use of the Land must also meet the two additional tests prescribed by s 10AA(2), requiring a finding that the use of the land had a significant and substantial commercial purpose or character, and was engaged in for the purpose of profit on a continuous or repetitive basis.
Section 10AA(2) was introduced into the LTM Act in 2005. Gzell J traced the background to its introduction in Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 23 (Maraya NSWSC) at [59]-[64]:

[59] Section 10AA of the Management Act was introduced by the State Revenue Legislation Further Amendment Bill 2005. The second reading speech contained the following (New South Wales, Parliamentary Debates (Hansard), Legislative Council, 29 November 2005, p 20060 (The Hon Michael Costa, Minister for Finance, Infrastructure)):
Land currently qualifies for a land tax exemption if it is within a rural or non-urban zone and is used primarily for primary production; or if it is within an urban zone and is used in the course of carrying on a business of primary production.
The Local Government Act definition of ‘farmland’ contains a more precise business test. The bill amends the land tax provisions to be consistent with that definition.

[60] The reference was to the Local Government Act 1993, s 515 which provided:
515 Categorisation as farmland
(1) Land is to be categorised as farmland if it is a parcel of rateable land valued as one assessment and its dominant use is for farming (that is, the business or industry of grazing, animal feedlots, dairying, pig-farming, poultry farming, viticulture, orcharding, bee-keeping, horticulture, vegetable growing, the growing of crops of any kind, forestry or aquaculture within the meaning of the Fisheries Management Act 1994, or any combination of those businesses or industries) which:
(a) has a significant and substantial commercial purpose or character, and
(b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).
(2) Land is not to be categorised as farmland if it is rural residential land.
(3) The regulations may prescribe circumstances in which land is or is not to be characterised as farmland.

[61] Section 515 of the Local Government Act 1993 replaced a similarly worded s 118 of the Local Government Act 1919. In the second reading speech to the 1988 bill introducing amendments to s 118 it was stated that the purpose of the amendments was to: “weed out persons who have exploited the vagueness of the current rule rating provisions of the Act to obtain rate concessions when in fact they have not been genuine primary producers.” (New South Wales, Parliamentary Debates (Hansard), Legislative Assembly, 10 November 1988, 3186).
[62] It was Walsh J who coined the phrase “significant commercial purpose or character” when speaking of a business in Thomas v Federal Commissioner of Taxation (1972) 3 ATR 165 at 171.
[63] And it was Mason J in Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 who said of s 118 of the Local Government Act 1919, which then defined rural land to include a parcel of land which exceeded 8,000 square metres in area and was wholly or mainly used for the time being by the occupier for carrying on the business or industry of grazing:
I accept, then, that ‘business’ in the sub-section has the ordinary or popular meaning which it would be given in the expression ‘carrying on the business of grazing’. It denotes grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis.

[64] In Hope it was held that an occupier of land who used over 80 percent of it for the agistment of other persons’ cattle or horses was carrying on a business. It was to overcome this decision that the 1988 amendments to s 118 of the Local Government Act 1919 were made.

Gzell J also noted at [66] that the amendment introduced a more stringent test for the availability of the exemption when the land in question is not rural land, a point confirmed on appeal in Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408 (Maraya NSWCA) at [64-65], where Emmett JA, with whom Meagher and Leeming JJA agreed, said:

[64] The primary judge observed that s 10AA(2) introduced “a more stringent test” for the availability of the exemption. The Taxpayers complain that the criteria to be found in s 10AA are not more stringent than the earlier language, which simply provided an exemption for land “used for primary production”. However, in circumstances where the language of s 10AA(2) appears to be derived from observations made by the High Court, it is significant that the Parliament chose to add the word “substantial” to the phrase used in Thomas. It was not erroneous to suggest that the substitution of s 10AA for the phrase “land used for primary production” involved a more stringent test.
[65] The Taxpayers also contended that the language of s 10AA was not intended to alter the effect of its predecessor. They say that the terms of s 10AA(2) are satisfied if it can be concluded that business as a primary producer is clearly being carried on on taxable land. Such a contention ignores the clear intention of the parliament in changing the language in question in order to avoid the vagueness of the original provision, which was being exploited by persons who were not genuine primary producers….

The second requirement - that the primary production activity be engaged in for the purpose of profit on a continuous or repetitive basis does not require an actual profit to be derived in the Relevant Year. But it does require a well structured, long term character with the aim of generating a profit year to year over a succession of years. This would usually be supported and evidence by appropriate business plans (including references to relevant markets for sale), administration and support, although it is accepted that a family farming operation may involve a less rigid approach. The overall approach to s 10AA(2) was explained as follows by the Appeal Panel of the Administrative Decisions Tribunal in Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 25 (Ashleigh Developments)at [45]-[47]:

45 In contrast to the position in relation to land that is rural land, it is not enough that there be some primary production activity on land. Sub-s (2) requires the following steps:
(i) A threshold determination that the land is used for primary production. That means more, we consider, than some de minimis use of the land. It should be shown that the land as a whole is used for primary production in the requisite sense, even if that occurs in combination with some non-primary production uses. (There is no dispute in this case that Mr Porter’s farming operation passes this threshold.)
(ii) If the threshold determination is favourable, there must be a level of use that ‘has a significant and substantial commercial purpose or character’ (factor (a)). This criterion eliminates hobby or token operations even though they may have passed the de minimis threshold to which we have referred in (i). The taxpayer then needs to show that the operation is run on a commercial basis with appropriate attention to the orthodoxies of income, expenditure and the aim of profitability; cognisant of the elements of unpredictability of any business operation, especially primary production. This is a higher standard than the one that applies to rural land. This is where the dispute starts in the present case.
(iii) The next criterion, factor (b), takes the issues raised by factor (a) to a further level of exactitude. The activity must be engaged in for the purpose of profit ‘on a continuous or repetitive basis (whether or not a profit is actually made)’. The reference to ‘continuous’ or ‘repetitive’ we see as connoting a business enterprise of a well structured, long term character, with administrative features (organisation, management, book keeping) which support the conclusion that it is set up with the aim of generating a profit year to year over a succession of years.

46 We accept, as did the Chief Commissioner, that the consideration of these factors can take appropriate account of the overall farming enterprise, here the other 280 hectares.
47 It may be that some concession involving a less rigid approach to profitability is acceptable in a family farming operation where a subsistence level of income may be seen as sufficient in the circumstances, especially where the farmer is of a later age.

Observations on the Applicant’s submissions and evidence

The Applicant has the onus of proving, for each relevant year, that the statutory requirements for the exemption have been satisfied.
It was accepted by both parties at the hearing, and is not in dispute, that the rezoning of the Land from October 2020 meant it was “rural land” as defined in s 10AA(4) for the purposes of the 2019 and 2020 land tax years, but not the 2021 and 2022 land tax years.
The Applicant must discharge its onus of proof, in respect of the use of the Land as at 31 December prior to each land tax year (noting the timing aspects set out above), that the Land was predominantly used for purposes which met the statutory description of “land used for primary production” in s 10AA(3)(a) and/or (b). For the 2021 and 2022 land tax years, the commerciality test in s 10AA(2) must also be satisfied.

I should first address the following matters arising from the Applicant’s submissions and evidence.
First, the Applicant’s submissions for each year rely on the evidence of Mr Huynh, who was the only witness for the Applicant. The courts have consistently warned against the unqualified acceptance of self-serving statements by taxpayers in the revenue context. See, for example, the comments of Lockhart J. in Warriewood Pty Ltd v FCT 93 ATC 4653 at 4662; Triston Pty Ltd atf The Ghantous Family Trust v Chief Commissioner of State Revenue [2017] NSWCATAD 100 at [50], a decision of SM Frost which was not disturbed by the Appeal Panel of this Tribunal in Triston Pty Ltd v Chief Commissioner of State Revenue [2018] NSWCATAP 37.
In this case, this warning is exacerbated by the following:

In circumstances where Mr Huynh said he did not read or write English well, provided his evidence with the assistance of a Vietnamese translator, said he required his daughter’s assistance to prepare his statement (contrary to his Affidavit), and no Vietnamese version of his statement or later affidavit by an authorised translator, was produced to Mr Hyunh or the Tribunal, his understanding of the contents of the statements is called into question.

The Huynh Statement was challenged, and found to be incorrect, in respect of the sales evidence, which did not relate to sales of bamboo shoots, or indeed bamboo poles, grown on the Land. This led to the retraction of the Applicant’s reliance on a “Bamboo shoots business” in respect of each Relevant Year, this business simply described in the Applicant’s submissions as being “as detailed at paragraphs [15] to [21], [29] to [47] and [51]-[53] of the Huynh Witness Statement”.

There are inconsistencies between the evidence now given to the Tribunal, and past correspondence to the Respondent. On 14 June 2023 (R1 at p21), Subject: “Request for Primary Production Land Exemption for Property at 75 Martin Rd, Badgerys Creek”, Mr Huynh wrote (inter alia, my emphasis):

…
For the year 2023, our sales plan focuses primarily on the bamboo shoots and poles harvested from our farm. It is important to emphasise that in the previous years, we have successfully sold bamboo shoots in the market. However, recent floods and the ongoing pandemic have unfortunately hindered our ability to harvest these products. Despite these obstacles, we remain hopeful that our upgraded infrastructure will enable us to resume and increase bamboo shoots and poles’ sales, contributing significantly to our revenues in 2023. Our financial records show a total sale of bamboo poles amounting to $2,660 for the fiscal year 2022-2023.

I accept the Respondent’s submissions that Mr Huynh’s evidence was also general in nature. It did not set out in any detail what occurred, on the Land, on a year-by-year basis by reference to any activities performed on the Land by him, the caretaker, his children, Ms Turner or any other person.

Most statements were uncorroborated by any contemporaneous documentation.

Second, there was no other documentary evidence which established the commerciality, organisation or record keeping relevant to the Applicant’s purported business operations in respect of the Land.
Third, the Applicant’s submissions (A3 at [105]) assume the Tribunal reviews the objection decision. That is incorrect. The Tribunal reviews the assessment which was the subject of the objection, not the objection decision. The Respondent has made no concession before this Tribunal as to any facts. The onus, as stated above, lies with the Applicant.
Fourth, the Applicant’s submissions (A3 at [62]) say that “For 2019 Assessment Period the Tribunal should have reference to the 2019 financial year being the six months before and after 31 December 2019”. This error is repeated in respect of each subsequent year. However, for the 2019 land tax assessment, the relevant date of examination is 31 December 2018, not 31 December 2019.

The amount of land

The total area of the Land was 16.8ha. In the absence of any contrary evidence by the Applicant, I find that of this area, as at 31 December prior to each Relevant Year:

The majority (51%) was planted with bamboo – which would also, in my view, have been observed by any reasonable observer;

3.8% comprised the residential tenancy areas

3.9% comprised dams;

2.3% comprised unused greenhouses; and

5.2% comprised sheds and yards

with the balance of 5.5 ha being available for general grazing purposes.

I also find that, at all relevant times:

the dams on the Land could have been utilised for stock, or for irrigation of pasture or bamboo, although the extent and use of the dams cannot be determined on the evidence;

the following areas were not part of any asserted primary production use (being either unusable areas, or used in respect of other business activities of the Applicant):

the “Equipment Storage” shed, which housed office furniture and other items;

the disused greenhouse, relating to a nursery business that did not commence;

the “cleaning and packing bamboo” area, which was for the bamboo shoot business not operating from the Land in the relevant years and no longer pressed by the Applicant; and

areas of land (possibly in the “yard” area) upon which was located old equipment, gravel or other rubbish/debris.

Ms Turner’s animals (the “Cattle/Goat business”)

In respect of the Cattle/Goat business, there is insufficient evidence to satisfy me that any part of the Land was “used-for-the-purpose” in s 10AA(3)(b) at any time, i.e. used for “the maintenance of [Ms Turner’s] animals …. for the purpose of selling them or their natural increase”.
I agree with the Respondent’s submissions that agistment of animals is insufficient of itself to meet the definition of “land used for primary production” in s 10AA(3)(b), because it does not establish that they were maintained for the purpose of sale by the owner.
There is no reliable evidence that the cattle and/or goats owned by Ms Turner (or their bodily increase) were proposed to be sold. The Applicant’s evidence was essentially Mr Huynh’s statement at [74] that Ms Turner’s animals were maintained for the purpose of sale. In addition to that statement, the only documents before me were photographs of various animals on various dates, none of which were disclosed on the land information notifications to the NSW lands office. Although the Tribunal is not bound by the rules of evidence, a statement based on hearsay, or observation, without further verification, falls far short of establishing that as a fact. If Ms Turner’s livestock operations met the definition in s 10AA(3)(b), her use of the Applicant’s land on which part of her herd was agisted could be part of the same operation (see McIntosh Bros Pty Ltd (In Liq) v Chief Commissioner of State Revenue [2019] NSWCATAD 124 per SM Hamilton at [194]). But there is no evidence of Ms Turner’s operations, nor any business records relating to those operations. Even if I accept that the Applicant sought to locate Ms Turner to give evidence, the fact remains she did not do so. The only objective evidence before the Tribunal is that some animals were present on the Land (including in the area planted with bamboo), at some but not all of the relevant times.
I accept the evidence of Mr Winter having regard to the “usual practice” for maintaining cattle and goats. I accept that the maintenance of animals which graze is a test that is (usually) quite easily satisfied. But that still requires evidence to be adduced before the Tribunal. Here, there is no evidence sufficient to satisfy me that the cattle / goats were maintained for the alleged purpose of sale. The Applicant has not established what acts were undertaken - in each Relevant Year, by whom, and when - to look after the animals on the Land; to tend to their needs so as not to neglect them and to ensure their health and physical condition so as to promote their sale. Ms Turner, as noted above, provided no evidence. The caretaker was also not called. Mr Huynh himself (the only witness) said he had “little to do” with Ms Turner’s cows or goats. He said that he wanted them on his Land “to “keep the grass down”, and some evidence of clover being grown, but there was no evidence as to when that was done and the Relevant Year to which it related. Mr Huynh also said that he terminated the tenancy of Ms Turner because the animals were getting into the bamboo and destroying it.
I therefore do not accept Mr Huynh’s statement that Ms Turner’s animals were maintained for the purpose of sale. I am not satisfied that the Land was used for the maintenance of animals in respect of the cattle and/or goats owned by Ms Turner as at 31 December 2018, 2019, 2020 or 2021 (her lease terminating on 28 February 2022) nor that the Land was used for maintenance of those animals for the purpose of sale under s 10AA(3)(b).

The Applicant’s “Goat Breeding business”

I reject the Applicant’s submissions (at [90]) that “from and in the 2021 land tax year T&A Skills commenced a further business of breeding goats for sale”. There is no evidence that any use of the Land related to the Applicant’s “Goat Breeding business” in respect of the 2021 land tax year (assessed as at 31 December 2020). There is no evidence relating to that business relevant to the 2019, 2020 or 2021 land tax years.
In respect of the 2022 land tax year, the test is required to be satisfied “as at” 31 December 2021. The permitted assessment of surrounding circumstances, as established by Gzell J in Leda NSWSC, does not alter that position.
I accept that the Applicant purchased 4 goats in 2022, of which three were delivered (all female). Only three were observed by Mr Winter, still located on the Land in 2024 after its sale. The other may have died or been removed. It was not explained.
The Applicant submitted (at [92]), my emphasis:

The use of the Land for the breeding of goats involved significant improvements and investment to be made by [the Applicant], including for infrastructure. That expenditure commenced in 7 December 2021 and continued through to June 2023 and included $142,873 to 30 June 2022, which is relevant to the 2021 land tax year.

This is a reference to the works undertaken on the “goat shed”. The statement is said to be supported by the Huynh Statement at [66]-[69] and attachment O. This evidence does not prove any particular amount of expenditure in respect of the “infrastructure” as at 31 December 2021, and Mr Huynh simply said “From 7 December 2021 and June 2023” (sic) that he undertook to make the stated infrastructure investments. Attachment O was said to have been prepared “as a list” by his accountant, who was not a witness in these proceedings. The financial records before me regarding the construction of “goat shed” renovations and upgrades have not been verified by an accountant, nor do they sufficiently evidence (by way of supporting invoices) the major items of expenditure by reference to specified dates. I have also noted, above, the inconsistency with previous correspondence to the Respondent.
Annexure F showed this shed with a dark grey roof in 2022. “Nearmaps” photographs produced by the Respondent showed the roof changed from an existing white/light grey roof to a dark grey roof between 19 May 2022 and 14 June 2022 (R3, Exh RK-1 at p28). I therefore find that the goat shed renovations occurred during this period and were not observable as at 31 December 2021. The date 7 December 2021 appears to be a convenient reference to the date on which Ms Turner was given notice, but her lease continued in place until 28 February 2022. As noted by the Respondent, there were no accounts of the Applicant in evidence (in the form of a profit and loss, balance sheet or cashflow statement) referable to any activities conducted on the Land for each of the Relevant Years, including the 2022 land tax year.
In any event, the Applicant has not satisfied the onus of proving that the first requirement – being the test in s 10AA(3)(b) – has been satisfied. There is no evidence that the Land was “used for the purpose of maintaining goats for the purpose of sale”.
As with Ms Turner’s stock, there is insufficient evidence regarding the purpose of maintenance of goats, let alone maintenance of goats for the purpose of their sale - that were actually present on the Land, at any time.
I have discussed the “business plan”, dated 2023, above. It is not contemporaneous. I have considered the statements of Mr Huynh concerning his intention for 200 goats, and the “goat shed renovations”. I have balanced the evidence presented against the observations of Mr Winter, which I accept.
I have also had regard to the Applicant’s evidence produced at the hearing (comprising the email) which shows, in October 2022, that he sought to buy more goats but was advised they were not available. It is irrelevant. It does not establish: (i) that the proposed purchase was for the Land rather than another property; (ii) any use of the Land as at 31 December 2021; or even (iii) how many goats were requested to be purchased, and for what price.
Accordingly, I find that there is insufficient evidence to satisfy me that the Land was used – in respect of the Applicant’s “Goat Breeding Business” – for the purpose prescribed in s 10AA(3)(b).

Applicant’s “Bamboo timber business”

The Supreme Court of NSW in Safety Beach Estate Pty Ltd v Commissioner of Land Tax 79 ATC 4032 considered the question of whether an exemption for land used for primary production could be claimed under provisions of the LTM Act that were predecessors to s 10AA(3). Rath J in considering what comprised the “cultivation” of land, said (at 4,036-7, my emphasis):

ln my opinion the expression “cultivation thereof for the purpose of selling the produce of such cultivation” should not be limited to annual crops, or crops with periodical production. The idea conveyed by the expression is the improvement of the land for the purpose of selling the produce of the improved land. The land may in the relevant sense be cultivated in some instances by breaking it up, as by ploughing, or in other instances by activities that may or may not be associated with the breaking up of the soil. lt is the land, not the soil alone, which is the subject of cultivation. This may be achieved by improvement to the water supply to the plants, by fertilising, by spraying plants with insecticides and fungicides and by the establishment of windbreaks. It is unnecessary to decide whether land can be said to be used for primary production in subsequent years of production where the crop (I am using the word in the widest sense) is planted and not thereafter tended, except to extract the produce. This is not such a case. But however the crop is sown, there is cultivation of the land in a particular year if in that year it is tended, or subject to a programme of tending, in accordance with the practices of husbandry applicable to that crop. If this principle is correct it is applicable to natural forest as well as to planted forests; and it is applicable to either sort of forest whether there is a programme of regeneration or not.

I reject the Applicant’s submission that the nature of growing bamboo was simply “set and forget”.
I accept the evidence of Ms Snyder and find as follows regarding the programme of tending in accordance with the practices of husbandry applicable to bamboo:

Some irrigation is required, although due to the nature of bamboo, it need not be intensive. Although there was evidence of an irrigation system in place, there was no evidence whether it was used during any of the Relevant Years. Indeed, Mr Huynh said it did not need to be irrigated.

It was also appropriate to undertake:

thinning the bamboo so that the best product (culm) would be produced;

general tending and inspections;

spraying, if required, for pests and/or scale; and

installing and checking fencing to stop the egress of any animals, including cattle and/or goats, into the bamboo plantation. This was an admitted concern of Mr Huynh, yet not remedied at any time.

The Applicant has not proved any facts relating to any activities, nor was there any evidence of expenditure incurred in this regard. This was despite Mr Huynh’s statement that the caretaker had previously “managed” the bamboo, prior to his illness.
I cannot find that the Land was cultivated in respect of the bamboo, in respect of any Relevant Year.
Nor has the Applicant proved that the Land (even if cultivated) was cultivated for the purpose of sale of bamboo produce.
There were no sales, as is clear from the above. That is not fatal, but no other evidence has been adduced by the Applicant – such as business records, accounts or proposed markets that could lead me to conclude there was a purpose of sale. In the absence of any evidence to establish any purpose of sale, the assertion in the statement of Mr Huynh that this requirement was satisfied is not accepted.
Accordingly, I find that there is insufficient evidence to satisfy me that the Land was used – in respect of the Applicant’s “Bamboo timber business” – for the purpose prescribed in s 10AA(3)(a).

Conclusion

I have found above that for each of the Relevant Years, the Applicant has not discharged its onus of proof that the requirements of s 10AA(3)(a) or (b) have been satisfied in respect of the above three categories of use. As a result, there could be no “dominant use” of the Land for such purposes in respect of any Relevant Year.
It follows that there was no “land used for primary production” (as defined in s 10AA(3)) in any Relevant Year and as a result:

section 10AA(1) did not apply to exempt the Land from land tax in the 2019 or 2020 land tax years; and

section 10AA(2) did not apply to exempt the Land from land tax in the 2021 or 2022 land tax years.

Although that disposes of the matter, in favour of the Respondent, I would also have concluded, if it were necessary, that the onus of proof was also not discharged by the Applicant in respect of the “more stringent” tests in s 10AA(2)(a) and (b) for the 2020 and 2021 land tax years. This conclusion has regard to my acceptance of the expert evidence of Mr Winter and Ms Snyders, and the paucity (or lack of veracity) of evidence regarding the matters referred to in Ashleigh Developments at [45]; including structure, management and the commerciality of the operations having regard to sales (including that no sales or profits were made in the relevant years), the prospect of profit, proposed markets, business records, and activities (including labour and resources applied) actually conducted on the land, notwithstanding my finding that there were no funding costs referable to the holding of the Land. This conclusion is also reinforced by:

the high capital value of the Land as at the relevant dates, following the rezoning in 2020: see Maraya NSWCA at [60] and [66] per Emmett JA, and Vartuli v Chief Commissioner of State Revenue [2014] NSWSC 678 (Vartuli) at [138] per White J; and

the losses from the primary production activities on the Land in the Relevant Years not making a contribution to the income of the Applicant, having regard to the income tax returns obtained by the Respondent: see Vartuli at [138] per White J; and on appeal in Vartuli v Chief Commissioner of State Revenue [2015] NSWCA 372 at [126] .

The correct and preferable decision is that the Land was not exempt from land tax under s 10AA of the LTM Act for any of the Relevant Years.

Costs

At the conclusion of the hearing, the Respondent’s counsel indicated it may wish to seek a costs order in respect of these proceedings. Orders have been made below (with an extended timetable taking into account this decision being issued in January), and any application will be dealt with on its merits.

Orders

I make the following orders:

The name of the Applicant is corrected from T & A Skills Care Services Pty Ltd to T & A Skills Care Service Pty Ltd.

The assessments of the Land to land tax for the 2019, 2020, 2021 and 2022 land tax years are confirmed.

If any party desires to make an application for its costs of these proceedings:

that party is to so inform the other party within 21 days of the date of these reasons;

the applicant for costs is to lodge with the Tribunal and serve on the respondent to the costs application any written submissions of no more than five pages on or before 28 days from the date of these reasons;

the respondent to any costs application is to lodge with the Tribunal and serve on the applicant for costs any written submissions of no more than five pages on or before 42 days from the date of these reasons;

any reply submissions limited to three pages are to be lodged with the Tribunal and served on the other party within 49 days of the date of these reasons.

the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application and, if they do not consent, why an oral hearing should be conducted rather than the application being determined on the papers.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 January 2025

Medium Neutral Citation:	T & A Skills Care Service Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCATAD 18
Hearing dates:	14 and 15 November 2024
Date of orders:	15 January 2025
Decision date:	15 January 2025
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	J Sullivan, Senior Member
Decision:	(1) The name of the Applicant is corrected from T & A Skills Care Services Pty Ltd to T & A Skills Care Service Pty Ltd. (2) The assessments of the Land to land tax for the 2019, 2020, 2021 and 2022 land tax years are confirmed. (3) If any party desires to make an application for its costs of these proceedings: (a) that party is to so inform the other party within 21 days of the date of these reasons; (b) the applicant for costs is to lodge with the Tribunal and serve on the respondent to the costs application any written submissions of no more than five pages on or before 28 days from the date of these reasons; (c) the respondent to any costs application is to lodge with the Tribunal and serve on the applicant for costs any written submissions of no more than five pages on or before 42 days from the date of these reasons; (d) any reply submissions limited to three pages are to be lodged with the Tribunal and served on the other party within 49 days of the date of these reasons. (e) the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application and, if they do not consent, why an oral hearing should be conducted rather than the application being determined on the papers.
Catchwords:	TAX AND REVENUE – land tax – primary production exemption – onus of proof not satisfied
Legislation Cited:	Administrative Decisions Review Act 1997 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Land Tax Management Act 1956 (NSW) Taxation Administration Act 1996 (NSW)
Cases Cited:	Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue (RD) [2012] NSWADTAP 25 Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 Cornish Investments Pty Limited v Chief Commissioner of State Revenue [2012] NSWAD 204 Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 355 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867 Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408 Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 23 McIntosh Bros Pty Ltd (In Liq) v Chief Commissioner of State Revenue [2019] NSWCATAD 124 Metricon Qld Pty Limited v Chief Commissioner of State Revenue (No. 2) [2016] NSWSC 332 Safety Beach Estate Pty Ltd v Commissioner of Land Tax (NSW) (1979) 79 ATC 4032 Triston Pty Ltd atf The Ghantous Family Trust v Chief Commissioner of State Revenue [2017] NSWCATAD 100 Triston Pty Ltd v Chief Commissioner of State Revenue [2018] NSWCATAP 37 Vartuli v Chief Commissioner of State Revenue [2014] NSWSC 678 Vartuli v Chief Commissioner of State Revenue [2015] NSWCA 372 Warriewood Pty Ltd v FCT 93 ATC 4653
Texts Cited:	None cited
Category:	Principal judgment
Parties:	T & A Skills Care Service Pty Ltd (Applicant) Chief Commissioner of State Revenue (Respondent)
Representation:	Counsel: C Bolger (Applicant) J Mitchell (Respondent) Solicitors: Vince Margiotta Law Practice (Applicant) Crown Solicitor (Respondent)
File Number(s):	2024/00051319
Publication restriction:	Pursuant to orders made on 15 November 2024 under s 64(1)(a) of the Civil and Administrative Tribunal Act 2013, publication or broadcast of the name of the Respondent’s expert bamboo shoot witness is prohibited. The expert is referred to as “Ms N” for the purpose of these proceedings. Note: A reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person.

Year	Cattle	Goats
2019	$3,000	$2,800
2020	$4,400	$2,800
2021	$5,200	$2,800
2022	$6,000	$2,800