TEISSIER and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE
[2024] WASAT 55
•31 MAY 2024
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: LAND TAX ASSESSMENT ACT 2002 (WA)
CITATION: TEISSIER and SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE [2024] WASAT 55
MEMBER: JUDGE H JACKSON, DEPUTY PRESIDENT
HEARD: 15, 16, 17, 18, 19, 22, 23, 24, 26, MAY 2023, 24 AND 30 AUGUST 2023
DELIVERED : 31 MAY 2024
PUBLISHED : 31 MAY 2024
FILE NO/S: VR 101 of 2020
BETWEEN: FRANCK PHILLIP TEISSIER
Applicant
AND
SENIOR REVENUE CONSULTANT AS DELEGATE OF THE COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Land tax - Claim for primary production business exemption - Relevant criteria - Onus borne by owner applicant - Preferable name of the respondent - Applicant did not give evidence - Evidence of other users of the land - No evidence to satisfy critical criteria - Exemption criteria not made out
Legislation:
Biosecurity and Agriculture Management (Identification and Movement of Stock and Apiaries) Regulations 2013
Evidence Act 1906 (WA), s 79C(2)(a)
Interpretation Act 1984 (WA), s 59(3)
Land Tax Assessment Act 2002 (WA), Pt 3, s 5, s 7(1), s 17, s 17(1), s 20, s 29, s 29(1)(a), s 29(1)(b), s 29(3), s 30A, s 30A(b)(iii), s 30A(1)(b), s 30B, s 30B(a), s 30B(b), s 30B(d), s 30D(1), s 30D(1)(b), s 30H, s 30H(a), s 30I
Land Tax Regulations 2003 (WA), reg 13A
Planning and Development Act 2005 (WA), s 4, Sch 3
Public Sector Management Act 1994 (WA), Pt 3
State Administrative Tribunal Act 2004 (WA), s 66, s 66(5) s 66(6)
State Administrative Tribunal Rules 2004 (WA), r 25, r 25(4)
Taxation Administration Act 2003 (WA), Pt 3, s 3, s 6, s 7, s 10, s 26
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| Respondent | : | Ms R Panetta |
Solicitors:
| Applicant | : | N/A |
| Respondent | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Chen and Law Complaints Officer [2022] WASAT 26
Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11
Cuming Smith & Co Pty Ltd v Melbourne Harbour Trust Commissioners [1905] HCA 27; (1905) 2 CLR 735
Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450
Healy and Revenue Consultant As Delegate Of The Commissioner Of State Revenue [2023] WASAT 135 (VR 94 of 2022)
Intercorp Pty Ltd ATF Intercorp Trust and Commissioner of State Revenue [2018] WASAT 90
Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107
Jones v Dunkel (1959) 101 CLR 298
Laurent and City of Greater Geraldton [2013] WASAT 57
Metricon Qld Pty Ltd v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93
Mir Bros Industries Pty Ltd v Chief Commissioner of State Revenue [2022] NSWCATAD 35
Ostrowski v Palmer [2004] HCA 30; 218 CLR 493
Quito Pty Ltd and Commissioner Of State Revenue [2014] WASAT 8
Reolon v Chief Commissioner of State Revenue [2013] NSWADT 96
Roufeil v Fiore, in the matter of the Bankrupt Estate of Peter Andrew Fiore (No 3) [2019] FCA 1231
Sarros and Commissioner of State Revenue [2022] WASAT 102
Settler's Rise Pty Ltd ATF Maison Dieu Road Unit Trust v Chief Commissioner of State Revenue [2019] NSWCATAD 238
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
The respondent has determined that the applicant is liable for land tax in relation to each of three parcels of land which he (the applicant), owns in Baldivis, for the years 2015/2016 and 2016/2017.
The applicant claims to be entitled to an exemption from such liability on the basis that the land was used by him, at the relevant time, solely for a primary production business.
There are various criteria that must be met in order to be exempt on that basis. The applicant bears the onus of demonstrating that each of those criteria are met.
The applicant has not demonstrated that, as at the relevant dates, he used the relevant land solely for a primary production business.
Accordingly, he is liable for land tax for the relevant year and his application for review of the respondent's decision should be dismissed.
The land
The land the subject of these proceedings (Subject Lots), of which the applicant was registered proprietor at all relevant times, is as follows:
(a)Lot 301 on Deposited Plan 76792, Volume 2879 Folio 594 (Lot 301);
(b)Lot 806 on Deposited Plan 66160, Volume 2745 Folio 721 (Lot 806);
(c)Lot 1099 on Deposited Plan 203322, Volume 1741 Folio 625 (Lot 1099).
The history of the Subject Lots is usefully described at paragraphs 9 ‑ 19 of the Amended Witness Statement of Mr Jack Lee[1] none of which was challenged by the applicant:
[1] Amended Witness Statement of Jack Midnight Lee, 24 October 2022, Hearing Book (HB), pages 3035 – 3036 (Mr Lee's Initial Statement).
(a)On 19 June 2003, the applicant became the registered proprietor of Lot 200 on Deposited Plan 36173, Mundijong Road, Baldivis (Lot 200);
(b)On 30 June 2005, the applicant became the registered proprietor of Lot 1099;
(c)On 12 August 2008, Lot 200 was subdivided into two new lots, Lot 800 and Lot 801 on Deposited Plan 57362 (Lot 800 and Lot 801);
(d)On 28 August 2009, the applicant became the registered proprietor of Lot 804 on Deposited Plan 62584, Mundijong Road, Baldivis (Lot 804);
(e)On 15 December 2009, the applicant disposed of Lot 804;
(f)On 4 June 2010, Lot 801 was subdivided into three new lots, Lot 805, Lot 806 and Lot 807 on Deposited Plan 66160 (Lot 805, Lot 806 and Lot 807);
(g)On 13 February 2012 the applicant disposed of Lot 807;
(h)On 21 November 2013, Lot 805 was subdivided into two new lots, Lot 300 and Lot 301 on Deposited Plan 76792 (Lot 300 and Lot 301); and
(i)On 30 June 2015, the applicant transferred Lot 300 to the Water Corporation.
As at 30 June 2015 and 30 June 2016 the various lots were as set out in the annotated aerial photo below. The Subject Lots are marked with a yellow dot. Lots owned by others at the relevant dates are marked with while dots.[2]
[2] HB, page 3073.
Statutory regime, its construction and relevant principles
Section 5 of the Land Tax Assessment Act 2002 (WA) (LTA Act)[3] provides that land tax is payable for each 'financial year' for all land in the State 'except land that is exempt under s 17'.
[3] All references to sections are references to sections of the LTA Act unless otherwise stated.
By s 7(1), land tax payable on land for an 'assessment year'[4] is payable by the person who is or was the owner of the land at midnight on 30 June in the previous year.
[4] The term "assessment year" in relation to land tax means the financial year for which the land tax is or is to be assessed (see clause 1 of the Glossary to the LTA Act).
Section 17 is contained within Pt 3 of the LTA Act. It states that land is exempt from land tax for an assessment year if the Commissioner of State Revenue (Commissioner) grants an exemption for the assessment year under s 20 or if the land is exempt under another provision of Pt 3 of the LTA Act.[5]
[5] Section 20 provides for the Commissioner to grant exemptions and concessions. No such power has been exercised in this case and the section, therefore, does not apply.
Section 30D is also contained within Pt 3 of the LTA Act. Relevantly, it provides:
(1)Land is exempt for an assessment year if, at midnight on 30 June in the previous financial year, the land is -
(a)non-rural land; and
(b)used solely for a primary production business; and
(c)used as described in paragraph (b), only by one or more of the following-
(i)an owner of the land;
(ii)if an owner of the land is a family owner, a person related to the family owner.
(2)…
It is useful to note here that:
(a)By the repeated use of the conjunctive 'and', in order for the relevant land to be exempt it must satisfy each of the three criteria; that is, it must be non-rural, it must only be used for a primary production business, and the business must be operated by the owner or, if the owner is a family owner, by a person related to the owner of the land;
(b)Although the liability date is set by s 30D(1) as 30 June of the previous financial year, regard may be had to a few months either side of that date in order to ascertain the true status of the land at that date.[6]
[6] Metricon Qld Pty Ltd v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332 at [132] – [133] (subsequent appeal on other matters dismissed - Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11; Settler's Rise Pty Ltd ATF Maison Dieu Road Unit Trust v Chief Commissioner of State Revenue [2019] NSWCATAD 238 at [15]; Mir Bros Industries Pty Ltd v Chief Commissioner of State Revenue [2022] NSWCATAD 35 at [17].
By s 29, land that is located in the 'metropolitan region' is 'non-rural land'. The LTA Act's glossary defines 'metropolitan region' as having the same meaning as it has in the Planning and Development Act 2005 (WA) (PD Act). Section 4 of the PD Act defines 'metropolitan region' as the region described in Sch 3 of that Act.
Schedule 3 of the PD Act defines 'metropolitan region' by reference to latitude and longitude. No evidence was put on in this regard and, indeed, the parties agreed the point (see paragraph 28(a) below). Before me are documents from the City of Rockingham regarding its planning regime which identifies the land as a livestock holding facility.[7]
[7] City of Rockingham Rural Land Strategy, February 2009 and July 2020, HB, pages 258 and 260. Of course, the fact that the land was so recognized does not mean that it was, in fact, being used for that purpose either at all or at a particular point in time.
The City of Rockingham is not included in any of the 'Other Regions' listed in Sch 4 of the PD Act, being regions not included in the 'metropolitan region'. On that basis, I accept that the Subject Lots are located within the metropolitan region.
Section 30A explains what is meant by land used for primary production. Relevantly, it provides:
(1)Land is used for primary production if it is used for any of the following:
(a)…
(b)the breeding, rearing or maintenance of living creatures for any of the following purposes (produce animals) –
(i)selling them, or their progeny, for food;
(ii)the production or collection of their skins, shells or bodily produce;
(iii)selling parts of them or their skins, shells or bodily produce;
(c)the breeding, rearing or maintenance of produce animals for the purpose of selling them or their progeny-
(i)for stud purposes; or
(ii)to be used for a purpose set out in paragraph (b)(i), (ii) or (iii),
(d)…
(e)any other thing prescribed for the purposes of this subsection.[8]
(2)…
[8] Although it was not raised by the parties, reg 13A of the Land Tax Regulations 2003 (WA) appears relevant. It provides that an 'agistment arrangement provided for in a contract, or agreement, that is in writing' (amongst other things) will amount to primary production. As will be seen, the applicant had an agistment type agreement with the Millers but it was not in writing. Accordingly the regulation does not apply and I need not address it further.
Section 30B explains when land is used for a 'primary production business'. Relevantly, it provides:
Land is used for a primary production business if the land is used for primary production and that use of the land –
(a)has a significant and substantial commercial purpose or character; and
(b)is directed at making a profit and has a prospect of making a profit (whether or not a profit is actually being made); and
(c)is planned, organised and carried on in a businesslike manner, rather than being carried on for recreation, hobby, sporting or similar activities; and
(d)has the same or similar characteristics as, and is carried out in the same or a similar manner to, the ordinary trade in that line of business taking into account –
(i)scale, size and permanency; and
(ii)repetition and regularity;
and
(e)is in accordance with any other factor prescribed for the purposes of this section.[9]
[9] No other factors have been prescribed.
The chapeau to s 30B makes clear that the use of land for primary production is not sufficient to amount to its use for a primary production business. Rather, the criteria set out in paragraphs (a) to (e) must also be satisfied. In Intercorp[10] Sharp DP held that:
[10] Intercorp Pty Ltd ATF Intercorp Trust and Commissioner of State Revenue [2018] WASAT 90. (Intercorp).
(a)'clearly all the criteria in s 30B must be met and if one is not then the activity concerned is not a primary production business';[11]
[11] Intercorp at [56].
(b)as to 30B(a):
(i)meaning must be given to the qualifying words 'significant and substantial';[12]
[12] Intercorp at [58] – [61].
(ii)in particular, the word 'substantial' requires the imposition of a 'more stringent test' than the common law test for a primary production business;[13]
[13] Intercorp at [68].
(iii)the Commissioner (and the Tribunal on review) 'is required[14] to consider such factors'[15] as:
[14] Emphasis added.
[15] Noting that such factors need not be discrete: Intercorp at [71].
(A)the intensity of the operation;
(B)size of herd/crop;
(C)quality of herd/crop;
(D)size of the land in question; and
(E)carrying capacity of the land in question;
(iv)in addition, other relevant considerations may include:
(A)the resources (time, labour or expenditure) put into the development and maintenance of the operation;
(B)the relative contribution (from the operation) to the (total) income of the user;
(C)whether the taxpayer's scale of use is consistent with comparable operations; and
(D)income and profitability of the operation;
(c)as to s 30B(b):
(i)the verb 'directed' should be given its ordinary meaning '... to turn (the eyes, attention, mind) straight to an object, (a person or thing) to an aim, purpose etc';
(ii)the word 'prospect' should be given its ordinary meaning of 'expectation';
(iii)the word 'profit' should be given its ordinary meaning, being 'a financial gain, especially, the difference between the amount earned and the amount spent in buying, operating, or producing something'.
By s 30H a 'family owner of land' is an owner of the land who is, amongst other things, 'an individual'.
Section 30I defines, and thereby limits, those persons who are 'related to a family owner of land who is an individual'. It is not necessary to set out the section in any detail as there was no suggestion that anyone was relevantly related to the applicant as the owner of the Subject Lots.
The applicant, as the party claiming the benefit of an exemption from the imposition of a tax, bears the onus of proving the facts necessary to satisfy the exemption[16] on the balance of probabilities.[17]
[16] Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107 at [15] (Chaney P), citing Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 at [457] and Cuming Smith & Co Pty Ltd v Melbourne Harbour Trust Commissioners [1905] HCA 27; (1905) 2 CLR 735 at [742].
[17] Sarros and Commissioner of State Revenue [2022] WASAT 102 at [86].
Finally, under this heading it is convenient to briefly outline the relevant statutory regime by which these proceedings were commenced.
By s 31 of the Taxation Administration Act 2003 (WA) (TA Act) an assessment (defined by s 13 of the TA Act to include a determination that a person is liable to pay tax) is not able to be challenged except as described, including by way of objection and in review proceedings.
Section 34 of the TA Act provides a right of objection to an assessment save for certain exceptions that do not apply. Sections 35 and 36 of the TA Act establish criteria for objections and s 37 and s 38 set out the requirements for the consideration of objections.
If a taxpayer is 'dissatisfied with the Commissioner's decision on an objection', they may apply to the Tribunal for review of that decision: s 40 of the TA Act.
No issue was taken by either party as to the procedure taken to bring the matter before the Tribunal including the right of the applicant to commence these proceedings.
Issues for determination
The parties are agreed that, as at 30 June 2015 and 30 June 2016:
(a)the Subject Lots were 'non-rural land' for the purposes of s 30D(1);
(b)the applicant was the owner of the Subject Lots;
(c)the applicant was a 'family owner' within the meaning of s 30H(a) on the basis that he was an individual for the purposes of that provision; and
(d)none of the other users of the Subject Lots (specifically, Mr Ross Miller, Mrs Ruth Miller (the Millers), their partnership Eaglenook Estate, or Mr Mervyn Williams) was related to the applicant for the purposes of s 30I.[18]
[18] Respondent's Statement of Issues, Facts and Contentions, 4 May 2021 at para 94 (HB, page 1971(i)); Applicant's Response to Respondent's Statement of Issues, Facts and Contentions at para 94 (HB, page 132).
As a result, the only issues for determination are whether, as at those dates:
(a)the Subject Lots were used solely for a primary production business; and
(b)if they were, whether they were so used by the applicant.
The respondent's name
Before stating the Respondent's case, it is necessary to say something of its name.
By s 26 of the TA Act, the Commissioner is to be appointed under Pt 3 of the Public Sector Management Act 1994 (WA).
By s 7 of the TA Act, the Commissioner has the general administration of taxation Acts, (defined in s 3 of the TA Act to include the LTA Act) and by s 10 of the TA Act may delegate his/her functions (save for some immaterial exceptions).
Until recently, the 'office' headed by the Commissioner was known as the Office of State Revenue. It is now (and was at the time of the hearing) known as RevenueWA.
In these reasons I refer to each of the Office of State Revenue (OSR) and RevenueWA. That reflects, inevitably, the evidence of witnesses relating to different periods of time. Nothing turns on those different names.
As I have previously noted, the application for review was filed by the applicant on 30 November 2020.
In his application for review, the applicant gave the name of the 'respondent' as Mr Jack Lee, but in answer to the question '[w]ho made the reviewable decision?' the applicant wrote 'The Office of State Revenue'.
The issue of the name of the respondent appears to have been raised at the earliest possible opportunity, as a result of which, amongst other things, the respondent filed submissions on 4 February 2021 by which it submitted that the proper name of the respondent should be 'Senior Revenue Consultant as delegate of the Commissioner of State Revenue'.
Despite that, orders were not made and, much later, the matter was raised before me. On 27 March 2023 I heard the argument. It is convenient to address the matter as part of the broader resolution of these proceedings.
The respondent submitted, as is the case, that the decision under review is a determination of the applicant's objection, which s 37(1) of the TA Act states must be made by the Commissioner.
As noted above, s 10 of the TA Act provides the Commissioner with the power to delegate any of his or her functions under a 'Taxation Act', save for certain irrelevant matters.
Attached to the respondent's submissions of 4 February 2021 was a copy of the Commissioner's delegation dated 10 July 2019, which revoked all previous delegations and delegated her functions under Pt 4 of the TA Act to certain position holders, one of which was 'Senior Revenue Consultant Level 6 in the Review Branch'.
At paragraph 2 of his Amended Witness Statement, Mr Lee says that he is a 'Senior Revenue Consultant in the Review branch of RevenueWA'. He signed the letter of 5 November 2020, which is the decision the subject of review, as 'Senior Revenue Consultant'.
In the absence of anything to the contrary, I am satisfied that Mr Lee held the position of Senior Revenue Consultant, Level 6, in the Review branch of RevenueWA and held delegated authority to make the decision the subject of these proceedings.
Sections 36(4) and (5) of the SAT Act provide as follows:
(4)If the proceeding is in the Tribunal's review jurisdiction, the decision-maker is also a party.
(5)In a proceeding to which a decision-maker is a party, the official description rather than the personal name of the decision-maker is to be used so far as is practicable.
The respondent's written submissions were to the effect that those provisions support the view that the preferable name of the respondent is 'Senior Revenue Consultant as delegate of the Commissioner of State Revenue'. I agree.
At the hearing of this issue on 27 March 2023, the applicant resisted the change of name on the basis that there had been several proceedings involving the applicant and the OSR over the past few years and the respondent had 'always' been the OSR. He also said that the change of name was an attempt by the OSR to absolve itself of responsibility for any mistake made by Mr Lee.
There is no basis for the latter submission.[19] As to the previous submission Ms Panetta, who appeared for the respondent, explained that since 2022 the position taken by RevenueWA had been that the correct name of the respondent was the position held by the relevant decision-maker as delegate of the Commissioner. She gave several examples of that practice. Her submissions appear made out when recent decisions of the Tribunal are considered.[20]
[19] Interpretation Act 1984 (WA), s 59(3).
[20] Compare Sarros and Commissioner Of State Revenue [2022] WASAT 102 (VR 28 of 2021) and Healy and Revenue Consultant As Delegate Of The Commissioner Of State Revenue [2023] WASAT 135 (VR 94 of 2022).
Finally, I note that the respondent's preferred name represents the Tribunal's practice in disciplinary decisions. See, for example, the President's discussion in Chen.[21]
[21] Chen and Law Complaints Officer [2022] WASAT 26, at [67] – [70].
For these reasons, I will order that the name of the respondent be amended to 'Senior Revenue Consultant as delegate of the Commissioner of State Revenue'.
The respondent's case
The respondent's case is twofold. It is that, at the relevant dates:
(a)the entirety of the Subject Lots were used by the applicant for investment purposes in that he charged third parties (specifically, the Millers and/or Eaglenook Estate and Mr Williams) for the use of that land;
(b)the applicant did not, as at the relevant dates, carry out his own primary production business on the Subject Lots but, even if he did, it was not the sole use of the Subject Lots in that they were also used for investment purposes. [22]
[22] See, for example, Respondent's Outline of Closing Submissions, 14 July 2023 at paras 27 – 30.
The applicant's case
As noted above, the applicant claims the benefit of the primary production exemption. As also noted above, to make out that exemption he must prove that, as at the relevant dates, he was using the Subject Lots solely for a primary production business.
The applicant's case is not easy to follow. He was not represented but, rather, appeared as his own counsel. In addition he chose not to give evidence. I will address this latter aspect in more detail below but, in short, it did not assist him.
The applicant's Statement of Issues, Facts and Contentions (SIFC) says, relevantly and in effect, as follows:
1.From 1987 to about 2010, Livestock Express Pty Ltd (LEPL), being a company first controlled by the applicant's father and, later, by the applicant himself, operated a livestock holding facility on the Subject Lots (although what that involved isn't clear on the face of the document);[23]
2.From about 2010 he or LEPL reached an agreement with the Millers for them to pay a fee to agist their sheep on, at least some of, the applicant's land;
3.In about 2012 or so, the applicant decided to upgrade the infrastructure on the land (yards, fences, sheds, etc.);
4.From around 2012, he and the OSR were engaged in a series of applications, assessments, decisions and appeals that the applicant says, variously, confused him and/or led him to make decisions about how the land was used and who used it.
5.In early 2015, ahead of him 'first purchasing sheep', he told the Millers to make alternative arrangements for the agistment of their sheep and in June 2015, they had no sheep on the Subject Lots. [24]
6.In February 2015, he signed a lease with Mr Williams.
7.Between February and May 2015 he purchased sheep that he 'received' at Lot 1099.[25]
8.He also carried out work by way of capital upgrades[26] in both 2015 and 2016.
9.Between August 2016 and May 2017, he purchased sheep that he 'received' on to Lot 1099.[27]
10.In June 2016, the Millers had no sheep on the Subject Lots.[28]
[23] Despite occasional references by the applicant during the hearing to a livestock holding facility, a description was not given in evidence (although the applicant's closing submissions provide a very brief description – para 19). I address this issue at the end of these reasons.
[24] Applicant's SIFC, paras 62, 68 and 72 – 73; HB, page 29.
[25] Applicant's SIFC, paras 64 and 66.
[26] Applicant's SIFC, paras 75 – 77; HB, page 32 and 36 – 37.
[27] Applicant's SIFC, paras 89 and 91; HB, page 34.
[28] Applicant's SIFC, para 94.
I note that there is no mention of manure sales in his SIFC after 2013. I will return to this issue below.
In short, he claims that he was grazing his own sheep on the Subject Lots on and around both 30 June 2015 and 2016. He also claims that the Millers were not doing so. He acknowledges that he leased a portion of Lot 1099 to Mr Williams, for which he can claim no exemption.[29]
[29] Applicant's SIFC, para 105; HB, page 38.
Finally, as is noted above, the applicant complains that as a result of his dealings with officers of the OSR from about 2012, he made decisions that he suggests are now being used against him.
I will call this his 'Reliance Case' and will address it in more detail below.
The evidence – an overview
The respondent called the following witnesses, each of whom adopted one or more written witness statements and were cross‑examined:
(a)Mr Jack Lee, an officer of RevenueWA, the maker of the decision under review and the respondent;
(b)Mrs Kathleen (Ruth) Miller;
(c)Mr Mervyn Williams;
(d)Mr Glenn Foote, an officer of RevenueWA; and
(e)Mr Efren Paolini, an officer of RevenueWA.
The applicant called the following witnesses, each of whom adopted a written witness statement and were cross-examined:
(a)Ms Laura Bushney;
(b)Mr Kim Hooton; and
(c)Mr Gary Simmons.
In addition, the applicant summonsed the following persons to give evidence:
(a)Mr Shane Hannan, an officer of RevenueWA;
(b)Mr Brett Young, an officer of RevenueWA;
(c)Ms Kerry Barrett, an officer of the Department of Primary Industries and Regional Development (DPIRD); and
(d)Mr Ross Miller.
Finally, at least one witness statement was filed with the Tribunal on behalf of each of the applicant and his mother, Mrs Rosemarie Teissier. However, the applicant did not call his mother to give evidence and neither did he make himself available for cross‑examination.
Each of the witness statements, filed ahead of the hearing, together with the parties' respective SIFC's and all other documents filed with the Tribunal by the parties were combined into a Hearing Book by the Tribunal. The result was contained in three lever-arch folders consisting of more than 3530 pages.
The process for the creation of the Hearing Book occurred pursuant to Orders made on 25 January 2023, by which the parties were provided with a draft index and invited to identify documents which should also be included.
Those orders also provided that I would only have regard to those pages of the Hearing Book which were expressly referred to by one or more party during the hearing. To that end, a list of such documents was created during the hearing process which was provided to the parties. They were each then given an opportunity after the completion of the hearing to 'correct' an initial draft. The Hearing Book is Exhibit 1.
Background
Although the issue before me is limited to the use of the Subject Lots on 30 June 2015 and 2016, the applicant's Reliance Case sought to rely on matters that predated those dates and, indeed, went back as far as 2009. As a result, both the written and oral evidence went back to at least that date.
In the event, it is convenient to briefly describe the following history which is taken from written documents, primarily being applications for, and decisions on, applications for exemption from land tax. Amongst other things it provides a useful history and context to some of the evidence.
In November 2012, Lots 1099, 805, 806 and 807 (the 2012 Lots) were exempted from land tax pursuant to the now repealed s 29(3) of the LTA Act.
However, following an audit investigation, the exemptions were cancelled for those lots for the 2011/2012 and 2012/2013 assessment years on the basis that the owner of the lots (the applicant) was not the entity which used them for a 'rural business' (being the language of s 29(3)). Rather, it was determined that LEPL was the user of the 2012 Lots in that regard, in circumstances where that section required there to be commonality of owner and user. [30]
[30] HB, pages 596 – 600.
The determination was contained in a letter dated 30 November 2012 and signed by Mr Paolini. Amongst other things, it states that:
(a)the applicant had advised that the 2012 Lots were being used for 'a sheep grazing business and that income is derived from the sale of the offspring and manure'; and
(b)the applicant's accountant, Mr Versaci, had advised that the income derived from 'the rural business' conducted on the 2012 Lots was derived by LEPL, which advise was supported by financial statements provided by Mr Versaci for LEPL.
On 24 January 2013, the applicant objected to that decision in terms which, in essence, rely on historic decisions granting exemptions from land tax but which also, confusingly, appear to allege that both that the applicant and LEPL operated the rural business.[31]
[31] HB, page 606.
On the first page of the objection he (the applicant) states that he is 'a farmer and … operate[s] a farm that is used as a sheep grazing/breeding/holding facility business' and that it is also 'partly used to package manure that is generated from the sheep grazing/holding operation'.[32] However, on page three he says that the land is 'used as a rural business – sheep grazing and breeding' and describes LEPL as the 'operating entity'.[33]
[32] HB, page 603.
[33] HB, pages 603 – 606.
I note the absence of any reference to a 'livestock holding facility' on page three of the objection letter.
The objection was dismissed on 21 March 2013 by Mr Hannan who said in the correspondence that '[w]hilst it is accepted that [the 2012 Lots are] used for a ''rural business'' of a kind referred to in s 29(1)(a) or (b) of the [LTA Act], it is not accepted that the property is used by its owner (i.e. the applicant) for that purpose.'[34]
[34] HB, pages 612 – 615.
In April 2013, the applicant's solicitors at the time alleged that the 2012 Lots were used as a rural business for 'sheep grazing and breeding' and referred to income from the sale of sheep and manure.[35]
[35] HB, page 1789.
The applicant then sought review of the March 2013 decision in the Tribunal (DR 179 of 2013), which application was conceded in September 2015 by the OSR.
The reasons for that concession are the subject of a witness statement signed by Mr Clayton Cox in 2015 in that proceeding in which he states that, amongst other things, the applicant was, at that stage, asserting a 'new set of facts' different to those upon which the objection had been refused.[36]
[36] HB, pages 1797 – 1800.
That is, while 'the objection had been determined on the basis that the rural business carried out on the relevant land were owned and carried out by [LEPL]', this was now the subject of dispute as a new set of facts were now being asserted by which I understand it to mean that the applicant was asserting that he, not LEPL, was the operator of the business.
I note, also, that by letter dated 29 November 2013, Mr Young wrote to another set of solicitors (their letter does not appear to be before me) refusing their request to exercise the Commissioner's discretion to exempt the 2012 Lots from land tax.
That letter states, consistent with the OSR's understanding at that stage, that the 'rural business' was being conducted by LEPL, being a conclusion based on that company's accounts and tax returns.[37]
[37] HB, pages 626 – 629.
By a form titled Land Tax Application for Exemption lodged on 3 January 2014, the applicant sought exemption for the 2013 assessment year for Lots 805, 806 and 1099. In it:
(a)under the heading 'Type of Business' he wrote 'sheep grazing, farming';
(b)he answered 'No' to the question whether the land was used for another purpose;
(c)under the heading 'No. of Years in Business', the applicant wrote '1';
(d)he then left blank the portion of the form that sought details as to any other user of the land; and
(e)to the question whether he had 'commenced a new rural business on the land?' he answered 'Yes' and described it as 'sheep grazing' and gave the start date as 1 January 2013.[38]
[38] HB, pages 630 – 631.
To be clear, there is no reference to LEPL or a livestock holding facility in that form, and, read fairly and objectively, the applicant states that the sheep grazing business is operated by him alone and that that business had commenced on 1 January 2013.
That application was rejected on 23 July 2015 due to a lack of supporting evidence[39] despite requests for further information to be provided.[40]
[39] HB, pages 655 – 659.
[40] HB, pages 634 – 644.
The applicant then, on 21 September 2015, objected to that disallowance in which he stated that, as at 30 June 2013, he 'operated a sheep grazing and soil product business'. He also said that the Commissioner had previously accepted that LEPL had conducted a 'genuine rural business' and that '[t]he same rural business conducted by [LEPL] over 20 years has been conducted by me in my personal capacity. This includes the sheep and soil products business'.[41] I note the confusion inherent in that statement as to the operating entity and, potentially, the nature of the operations and contrast it with the clarity of the Application for Exemption form.
[41] HB, pages 664 – 665.
That objection was rejected by Mr Lee on 16 December 2016. The considerable timeframe for that decision appears to be due to requests for further information to be provided by the applicant, the response to which was considered inadequate, and which appears to have prompted a significant investigation by Mr Lee.[42] Mr Lee's considerable letter of reasons runs to more than 14 pages and explains the investigations undertaken.[43]
[42] HB, page 685.
[43] HB, pages 679 – 693
It includes the finding that, since the end of November 2009, Mr and Mrs Miller:
… have had the continuous use of the subject land [being lots 805, 806 and 1099] except, from time to time since the second half of 2012, such small portions of lot 1099 as you [the applicant] have allowed other tenants to use, and, from time to time since February 2015, a small portion of Lot 301 (formerly lot 805), which you have occasionally used for brief periods yourself.[44]
[44] HB, page 688.
The applicant filed an application with the Tribunal for review of Mr Lee's decision[45] but Sharp DP gave leave on 20 September 2017 for the application to be withdrawn.[46]
[45] HB, pages 1400 – 1409.
[46] DR 47/2017.
On 29 July 2015, a land tax assessment notice was issued for the 2014 assessable year showing that the Subject Lots were taxable.[47] The applicant objected on the basis that 'the land is used by me for primary production as a sheep farm/grazing'.[48]
[47] HB, pages 660 – 661.
[48] HB, page 663.
The initial assessment was then withdrawn and re-issued, to which the applicant objected by email in which he stated that it was his belief that 'the operations on the farm constitutes a rural business principally being from the sale of sheep manure and the holding and trading of sheep for grazing'.[49]
[49] HB, page 703.
The decisions, and associated matters that form the basis of the current proceedings, commence on 18 May 2018.
On that date, Mr Foote wrote to the applicant in relation to the 2015/2016 and 2016/2017 assessment years and stated that, following 'a review', he had formed the view that the Subject Lots do not qualify for the primary production business exemption.[50] He attached a Statement of Reasons.[51] In short, he found that the Millers and Mr Williams used the Subject Lots for primary production but the applicant did not.
[50] HB, pages 1984 – 1994.
[51] HB, page 1986 ff.
Mr Foote's letter sought a response within 60 days, with which request the applicant did not comply. Mr Cox assessed the applicant's email of 29 August 2018 as an application to extend time to object. Mr Cox granted such extension to 26 October 2018.[52]
[52] HB, page 2007.
On that date, the applicant objected to Mr Foote's determination saying, in effect, that he had kept sheep on the Subject Lots from early 2015, that he had also 'engaged in a capital works and infrastructure investment program' and that the 2015/2016 and 2016/2017 years should be viewed in the context of the 2017/2018 and 2018/2019 years, for which an exemption had been granted.[53]
[53] HB, pages 2028 – 2029.
The decision which followed is that which is under review. On 5 November 2020, Mr Lee (the respondent) dismissed the applicant's objection. In his conclusion, he said:
You were not the sole user of the land at midnight on 30 June 2015 or midnight on 30 June 2016. Parts of [L]ot 1099 were used by Mr Williams for his stockfeed operation and for keeping sheep on the paddocks that he leased from you. The remainder of the land was used by the Millers for their sheep stud business, although from time to time you required the Millers to remove their sheep from the East Paddock so that it was available for you to use. Relevantly, the other users of the land were not related to you for the purposes of s 30D(1)(c)(ii) of the LTA Act.
These facts are sufficient to prevent the land from qualifying for exemption, as the statutory criteria for the exemption provided by s 30D of the LTA Act require that the land is used solely for a primary production business conducted by an owner of the land or a related person.
Even if any portion of the land that you used for primary production activities was not used by another user at the material date, the land does not qualify for exemption because the primary production activities you conducted on the land did not constitute a primary production business at the relevant times.
Finally, I note that you have refused to provide information and relevant material that I had sought to make a decision on your objection, and consistently maintained that I should rely upon your financial statements and personal income tax returns. I have explained above why it would not be appropriate to rely upon those documents.
The evidence
The RevenueWA evidence (Messrs Lee, Paolini, Hannan and Young)
Each of the RevenueWA officers were cross-examined by the applicant. In each case I found them to be honest and reliable witnesses whose evidence was not diminished by cross-examination.
Mr Lee
Mr Lee's written evidence covered a very considerable breadth of material, explaining his investigations, his analysis and his conclusions as to the applicant's eligibility for the exemption. Given the evidence given by others, it is not necessary to address much of his evidence in any detail.[54]
[54] In addition to Mr Lee's Initial Statement he adopted a Supplementary Witness Statement dated 30 November 2022.
One exception is his evidence as to the applicant's evasive conduct as to the existence of the Millers and, to a lesser extent, Mr Williams, as users of at least part of the Subject Lots.
In effect, Mr Lee's evidence was that the applicant failed to disclose, when he should have done, the fact that the Millers were using the Subject Lots to graze their sheep. In that way his evidence appears to expand upon one aspect of the final paragraph of the quoted portion of his decision (above at paragraph 93).
At paragraph 42 of Mr Lee's Initial Statement, he states:
Subsequent to the Commissioner's concession of the Tribunal application related to the 2011/2012 and 2012/2013 objections [in September 2015] but prior to my disallowance of the Applicant's objection to Mr Young's decision relating to the 2013/2014 assessment year [on 16 December 2016], I discovered that there were a number of other users of the Applicant's land in Baldivis, particularly, Mr Ross Miller (Mr Miller)[55] and Mrs Ruth Miller (Mrs Miller). The Applicant had never earlier revealed to RevenueWA the fact that Mr and Mrs Miller were users of his land.
[55] Emphasis in the original.
Mr Lee then notes that in his application for exemption lodged 3 January 2014, the applicant had left blank that portion of the form that sought details of other users of the land – see paragraph 80(d) above.
Mr Lee then describes the various inquiries undertaken in relation to the use of the Subject Lots (at paragraphs 44 to 111), including the manner in which he became aware of both Mr Williams (in February 2016) and the Millers (in March 2016) (at paragraphs 60 – 61 and 65).
Those inquiries included several requests of the applicant to provide information in 2014, 2015 and 2016 including requests that the applicant's accountant (Mr Versaci) provide documents (which request was not resolved until a statutory notice was issued), and enquiries with the Registrar of Stock and Apiaries at the Department of Food and Agriculture. It was through the latter that Mr Lee identified and contacted Mr Williams, who advised him of the Millers.
Whether or not the Millers were in fact grazing their sheep on the Subject Lots is a central issue between the parties in this case. Most of the evidence went to this point.
The applicant's case appears to be that his arrangement with the Millers after about 2012 or 2013 was that the Millers were entitled to use only the shed and yards on Lot 1099 and only in order to access Lot 804, which the applicant no longer owns. His case is, however, that despite that restriction, they frequently, and against his wishes, grazed sheep on other parts of the Subject Lots.
That alleged use is much less than is asserted by the respondent and, if the applicant's case is correct, there seems to me no logical reason why the applicant should not have openly disclosed that arrangement.
Such an arrangement, if it did in fact exist, might have resulted in him losing the exemption for that part of Lot 1099 occupied by the shed and yards, but it would provide a proper basis for him to insist that there was no other lawful user of the balance of the three Subject Lots.
In the absence of any contrary explanation by the applicant or any cross-examination by him of Mr Lee in this regard, I find that the fact that he did not disclose the arrangement and, indeed, appears to have actively resisted its discovery, provides support for the respondent's case that the Millers did, in fact, have an arrangement with the applicant to graze sheep across the full extent of the Subject Lots, at the relevant dates.
More generally, and as noted above, I have no hesitation in accepting Mr Lee's evidence. The applicant cross-examined him for some time. Throughout he came across as honest and forthright.
Mr Hannan
Mr Hannan was involved in the consideration of the applicant's land tax matters from January 2013. Specifically, he was involved in the review of a decision concerning the 2011/2012 and 2012/2013 assessment years following the applicant's objection to the assessment of his land for land tax.[56]
[56] See para 73 above.
Mr Hannan was not in any way concerned with the processes or decisions the subject of these proceedings. He was not, therefore, called to give evidence by the respondent. Rather, he gave evidence under compulsion after being summoned by the applicant.
On 4 October 2022 and 21 October 2022, I gave leave for the applicant to summons various witnesses, including several officers of RevenueWA.
I did so to allow the applicant to pursue what I have previously, in these reasons, described as the applicant's 'Reliance Case'.
The Reliance Case, as 'pleaded' in the applicant's SIFC, is not easy to follow but, as best as I can, it alleges that the applicant made decisions leading up to the years in question in these proceedings based on previous decisions made by officers of the OSR in relation to the applicant's land holdings, including the Subject Land.
In directions hearings at which the applicant sought leave to summons various RevenueWA officers, the applicant appeared to go further and alleged a conspiracy to, in effect, entrap the applicant. Amongst other things, on 21 October 2022 I gave leave to the respondent to file supplementary witness statements of Mr Lee and Mrs Miller responding to the allegation of collusion or/and conspiring to 'stitch up' (his words) the applicant.
At the time I had real concerns as to the relevance of the evidence that could be given by RevenueWA officers whose involvement was limited to the assessment of the applicant's liability for land tax in years previous to those in question here but, given the applicant's status as self-represented, I determined to allow certain officers, including Mr Hannan, to be summonsed.
However, in the result, only two of the RevenueWA officers for which leave was given to summons were actually required by the applicant to give evidence and neither of them were able to say much more than what was contained in the written documents they had created. Mr Hannan was one of the two.
During the hearing, and particularly ahead of Mr Hannan's evidence, Ms Panetta expressed concern that the applicant would seek to rely on Mr Hannan's evidence in other proceedings, particularly his appeal against conviction for tax fraud relating to the 2011/2012 and 2012/2013 years. I warned the applicant that to do so would be an abuse of process but allowed him to call and question Mr Hannan for the reasons given above.
As I have said, Mr Hannan's evidence effectively went no further than what is contained in the documents that he created, which were already contained in the Hearing Book and to which I had already been taken. He was, essentially, taken to documents but was largely unable to remember anything beyond what the documents show on their face. Without any criticism of Mr Hannan, his evidence was of no real assistance to my task.
There was one issue that appeared vaguely relevant to the present proceeding, in that it appeared to go to the applicant's 'Reliance Case'.
In answer to questions from the applicant, Mr Hannan accepted that his letter of 21 March 2013[57] (as to which, see above at paragraph 73) amounted to 'advice' that a 'holding facility' was a rural business and that if he, the applicant, as the owner of the land, operated such a business he would qualify for a land tax exemption.[58]
[57] HB, pages 612 – 615.
[58] ts 686 – 687, 23 May 2023.
I am not sure that I agree with the characterisation of the letter as 'advice' but it follows, logically, that if the decision made was that the sole reason for refusing the exemption was that the user was not the owner, then if the owner became the user the exemption should be available.
The issue is whether the letter in question concerns a 'holding facility'.
The transcript reads as follows:
TEISSIER, MR: So is it fair to say - or do you accept that the landowner is under the - is understanding that he has been advised that if he operates the business in his personal name, he will qualify for land tax exemption; is that correct?---Yes.
…
So would it be fair to say the landowner has advised that he's carrying on a sheep holding facility - sheep holding business? He has advised that in his - do you confirm he has advised that in his objection letter?---Yes.
…
TEISSIER, MR: Okay. I'm sorry. I will retract that, your Honour. Do you agree that you have advised the landowner that a sheep holding facility business is a rural business?---Yes.
And that if he operates it in his personal name, he will qualify for land tax exemption?---Yes.
If you could turn to page 616, Mr Hannan, and 617?---Mmm.
Do you recall his correspondence?---Not specifically given the length of time that has lapsed.[59]
[59] ts 686 – 687, 23 May 2023.
While the questions are posed and answered in terms of a holding facility, Mr Hannan's letter of 21 March 2013 makes no mention of a holding facility. Rather, it describes the applicant's objection to the assessment as being that 'Wilkinson Rd [i.e. Lot 1099] is used as a rural business – sheep grazing and breeding'[60] and it does not otherwise address the activity being undertaken, save to accept that it is such as to amount to a 'rural business'.
[60] HB, page 612.
That assessment appears to be based on a face-value acceptance of the applicant's objection letter of 24 January 2013,[61] (see, above, paragraphs 70 – 72) which describes the activities on the land as 'sheep grazing and breeding'.
[61] HB, page 603.
There is no suggestion in either document that the land was being used as a livestock holding facility (whatever that might be); but in any event, the use of the land at that stage does not appear to be in issue. Rather, the letter of 21 March 2013 is clear that only issue relevant to the land tax assessment is the identity of the entity using the land. Mr Hannan concluded that the user was LEPL on the basis of financial records provided by the applicant and that the user was a different entity to that which that owned the land being the applicant.[62]
[62] See para 73 above.
For these reasons, I give no weight to the fact that the question answered by Mr Hannan referred to a holding facility. That appears to me to be a mere slip.
Again, I have no hesitation in finding that Mr Hannan gave honest answers to the questions asked and did his best to assist me. But for the above reasons his evidence is almost entirely irrelevant to my task.
Mr Young
Mr Young's involvement with the applicant also appears to have started in 2013 and was also concerned with the 2011/2012 and 2012/2013 years.
Again, he was taken to documents but was unable to add much to their contents.
It is worth noting two matters.
First, Mr Young was taken to his letter of 29 November 2013 in which he refused the applicant's application for exemption for 2011/2012 and 2012/2013.[63]
[63] HB, pages 626 – 629.
In that letter, he wrote that he accepted that 'a rural business of sheep grazing and breeding is being conducted on the subject land. However, it has been established that the business is not being conducted by [the applicant] as the owner of the land, but rather by [LEPL] …'
The applicant sought to get from Mr Young that that letter amounted to advice, which Mr Young disputed.[64]
[64] ts 714, 24 May 2023.
Secondly, the applicant also attempted to get Mr Young to agree that he knew LEPL was operating a sheep holding facility on the land and that that constitutes a 'rural business'.[65]
[65] ts 716 – 720 and 729, 24 May 2023.
Mr Young did not agree. Rather he said that his investigations as to the nature of the user were limited because it was clear that the user was not the owner and that therefore the exemption was not available.
As for Mr Hannan, I have no hesitation in finding Mr Young to have given honest answers. His evidence was, however, of no real relevance to my task.
Mrs Miller
Mrs Miller adopted a Witness Statement dated 30 May 2022 (Miller Primary Statement)[66] and a Supplementary Witness Statement dated November 2022 (Miller Supplementary Statement).[67]
[66] HB, page 2952.
[67] HB, page 3351.
In addition, in cross-examination, she was taken to a Witness Statement prepared for other proceedings dated 16 April 2019 (2019 Statement)[68] and the transcript of an interview with her by Messrs Foote and Lee on 8 April 2016 (Interview).[69]
[68] HB, pages 2050 – 2056.
[69] HB, pages 2058 – 2074.
It is her evidence that, in effect, between late 2009 to March 2017 she and her husband, through their partnership Eaglenook Estate, paid money to the applicant to use the applicant's land, including the Subject Lots, for the grazing of their sheep.
Her evidence in that regard is largely consistent across all her various statements.
In the Interview, Mrs Miller said that:
(a)Eaglenook have a verbal agreement with the applicant;[70]
(b)as at 30 June 2015 Eaglenook had the run of all of Lots 805 and 806 [noting that Lot 805 had been subdivided into Lots 300 and 301 by this date – see para 7(h) above] and most of Lot 1099, with the balance of that lot being used by Mr Williams, and the applicant had no sheep on any of the lots;[71]
(c)the amount paid to the applicant increased as time progressed;[72] and
(d)at various times he issued invoices showing the amount charged as for the sale of sheep but save for one occasion (4 May 2014) no sheep ever changed hands between them; rather, the sum paid was, in fact, for the use of the land for grazing;[73]
(e)in September 2015, the applicant bought 200 sheep which he put on part of Lot 805 'for about two months' but, save for that and the area on Lot 1099 around the sheds, the land used by Eaglenook has not changed very much over time;[74] and
(f)the applicant sold manure from a shed where it had collected during the time the land was used as a feedlot, which was prior to Mrs Miller's use of the land. The shed in question was not able to hold sheep and she had never seen the applicant collecting manure from paddocks.[75]
[70] HB, page 2059.
[71] HB, pages 2063 and 2064.
[72] HB, pages 2060 and 2062.
[73] HB, pages2061 – 2062 and 2068 – 2069.
[74] HB, page 2063.
[75] HB, page 2072.
In her 2019 Statement she said:
(a)from August 2009 to March 2017 Eaglenook had sheep on the land in Baldivis owned by the applicant;[76]
[76] At para 4.
(b)during that time, Eaglenook had sheep 'on all of the lots, except from time to time since the second half of 2012 such small portions of Lot 1099 as [the applicant] has allowed other tenants to use, and, from time to time since February 2015, a small portion of Lot 301 (formerly Lot 805), which [the applicant] has occasionally used for brief periods himself';[77]
[77] At para 7.
(c)the initial arrangement was a price per head and started in January 2010. It was not put in writing, no invoices were issued and all payments were in cash;[78]
[78] At paras 10 – 11.
(d)from January 2010 to late January 2017 she and her husband were present on the applicant's land almost every day to 'check on, move or work with' their sheep or to cart water. As a result they had 'always been aware of what was happening on all the lots';[79]
[79] At paras 13 – 14.
(e)in about July 2011 a new agreement was reached that a certain amount of money would be paid per year as 'rent', although the agreement was not put in writing, no invoices were issued and payments were made in cash;[80]
[80] At paras 17 – 18.
(f)until Mr Williams brought sheep onto the land in about October 2014, the only sheep on the land were owned by Eaglenook;[81]
[81] At para 15.
(g)prior to that, in 2013, Mr Williams started using the large shed on Lot 1099 which reduced the amount of the land available to Eaglenook.[82] Similarly, in October 2014, Mr Williams leased some of the paddocks on Lot 1099, which again reduced the area available to Eaglenook although there was no reduction in rent;[83]
(h)in July 2013, Eaglenook was registered for GST after which, until about April 2016, the applicant issued regular invoices and accepted payments by cheque;[84]
(i)also in July 2013, she completed a form by which 'Mr Teissier's land' was added to Eaglenook's Property Identification Code (PIC) issued by the Department of Agriculture and Food which allowed the transport of stock between the applicant's land and other Eaglenook land without the need for a 'waybill';[85]
(j)in or about April or May 2014 the applicant asked to buy sheep from Eaglenook 'in order to demonstrate … that he was using the land for sheep farming'. She agreed as she 'understood that [Eaglenook] would be compelled to move out if we refused';[86]
(k)some of the invoices issued by the applicant have not accurately reflected the nature of the arrangement in that some of them record the transfer of sheep 'where in fact no livestock had changed hands and the amount payable in each case was equal to the agreed rent … However, the payments were always correctly accounted for in the books of Eaglenook Estate and in our partnership tax returns as rent';[87]
(l)over time the amount payable increased;[88]
(m)in February, March and September 2015 and May 2016, the applicant required Eaglenook to move its sheep from Lots 301 and 806 to allow him to run some sheep on those lots, which he did 'for a few weeks' except in May 2016 when he was unable to buy sheep and the paddocks therefore stayed empty. In each case, after a few weeks, the Millers moved their sheep back onto those lots;[89]
(n)between about April and October 2016 the applicant failed to provide invoices and required payment in cash;[90]
(o)at various times in 2016 the applicant either requested her, or threatened her, to either stay silent or lie about the arrangements between them;[91] and
(p)the Millers ceased using the applicant's land on 21 March 2017. On 24 March 2017 final payment was made (by cash) and she provided a receipt to the applicant marked 'rent' to which he objected and he then wrote his own receipt from her receipt book which stated that payment was to LEPL for access only to the shearing shed and yards on Lot 1099 for February and March 2017.[92]
[82] At paras 25 – 26.
[83] At para 41.
[84] At para 30.
[85] At para 32.
[86] At para 38.
[87] At para 31.
[88] At paras 21, 35, 43.
[89] At paras 42 and 45.
[90] At para 47.
[91] At paras 46, 48 – 50.
[92] At para 56.
Mrs Miller's Primary Statement was in very similar terms to the 2019 Statement. There are, however, significant additions. That is, her Primary Statement appears to build on her 2019 Statement. The additions are as follows:
(a)First, she describes how, during the period in which Eaglenook kept sheep on the Subject Lots, they also had sheep on neighbouring Lots 300, 800, 804 and 807[93] at various times, effectively pursuant to a misunderstanding as to the extent of the applicant's land holdings. Each of those lots are adjacent to one or more of the Subject Lots. They are not owned by the applicant, although Lot 807 is owned by his mother.[94] Mrs Miller says that the applicant knew that Eaglenook sheep were on these other lots and did not advise the Millers that he did not own them. As to Lot 804, she says that, initially, she did not have permission from the owner of Lot 804 but that that permission was later obtained;[95]
(b)Secondly, she explains in greater detail the circumstances surrounding the completion of the PIC form referred to above at para 142(i). She explains that she took the form to the applicant for his signature with the land description details left blank as she was unaware of them and that the applicant provided the address details to her and that she completed the form with those details at the time when he signed the document as the relevant landowner;[96]
(c)Thirdly, she provides further additional detail regarding her interaction with RevenueWA officers and she confirms that various records kept by such officers of their interactions with her accurately record those interactions;[97] and
(d)Finally, she describes a physical altercation with the applicant in June 2019 which she says was witnessed by Ms Bushney. She says that it started with the applicant approaching her (Mrs Miller) and, amongst other things, asking 'why are you trying to do me in'? She says that it ended after he verbally abused her and pushed her 'forcefully to the ground'. She says that in June 2019 she obtained an initial violence restraining order against the applicant which was finalised in September of that year.[98]
[93] At paras 7 – 9.
[94] The applicant is the former owner of each of these lots. He disposed of them at different times between 2009 and 2015 – see at para 7 above.
[95] At para 9.
[96] At paras 39 – 42.
[97] At paras 71 – 73.
[98] At paras 79 – 84.
Mrs Miller also prepared a Supplementary Statement following the grant of leave on 21 October 2022 made to allow her (and Mr Lee) to answer the applicant's allegations that she and Mr Lee had colluded to 'stitch up' the applicant.
In her Supplementary Statement, Mrs Miller describes the process by which she kept a 'cashbook' by which income and expenditure was recorded across five different bank accounts held by her, Mr Miller and the Eaglenook partnership.
(a)She says that the cashbooks were kept for 'budgeting and decision-making purposes';[99]
(b)She says that various terms were used over the years to record payments to the applicant, including 'agistment', 'lease', 'rent', and that those terms were sometimes used in conjunction with other words such as 'Mundijong', 'Franck' or 'Teissier';[100]
(c)She also says that, on occasions, those words were also used together with 'sheep' or 'rolls of hay'. In those cases, she says, that is because the invoice issued by the applicant described the transaction as being for 'sheep' or 'rolls of hay' although that was not the case; rather, the payment was just for rent/agistment;[101] and
(d)The Supplementary Statement attaches 35 pages of 'cashbook' entries over the period 2013 – 2017. Some of those entries are then explained in the Supplementary Statement, although it is fair to say that not all of those explanations can be made out.
[99] At para 10.
[100] At para 21.
[101] At para 22.
Mrs Miller was extensively cross-examined – her cross examination and re-examination took all day on 22 May 2023.
Much of the cross-examination (effectively the whole of the morning) was about where the Eaglenook sheep were at various times and whether she had permission for them to be there at those various times.
It is fair to say that much of the questioning lacked the precision necessary to allow me to follow the answers.
It is also fair to say that Mrs Miller often failed to carefully answer the question and, in several instances appeared to me to be answering the question that she thought was asked, rather than the question she was actually asked.
It is also the case that, despite several warnings to both the applicant and Mrs Miller to avoid speaking over, and arguing with, each other, both of those things happened frequently.
Despite the above, I am confident in the following factual findings:
First, I have no doubt (and I find) that Mrs Miller (whether in her personal capacity or as a partner in Eaglenook it is not possible for me to say) was paying the applicant for use of 'the land' from 2010. What 'the land' is/was is dealt with below. The point here is that the payments were made for the use of the applicant's land – for rent, agistment or similar. It was not for the purchase of sheep, rolls of hay or otherwise.
Indeed, at no stage did the applicant suggest otherwise in his cross‑examination of Mrs Miller. That is, at no stage did the applicant take her to any invoice or any other record of their financial dealings (save for a 2012 invoice which I address below). Rather, the focus of his cross-examination was on the physical location of Eaglenook's sheep.
Mr Lee, in his written evidence, and the respondent in submissions, have sought to marry up the financial records of Mrs Miller with certain records of the applicant. It is fair to say that such an exercise is not without its difficulties. But for my purposes a precise exercise is not necessary. Mrs Miller's evidence was that for about seven years, and on a monthly basis, she paid the applicant for access to his land in order to graze the Eaglenook sheep. Her evidence was not challenged in that regard and I accept it.
Secondly, I also have no doubt (and I find) that in her mind she was dealing with the applicant in his personal capacity. That is, she dealt with the applicant in person and he gave her no cause to question whether he was dealing with her as himself or as a representative of another legal entity.
In cross‑examination, she was shown a 2012 invoice written in her hand and issued to LEPL.[102] On its face it is for the purchase by LEPL of 105 wethers. However, she said several times that she had no idea about any legal entity other than the applicant in his personal capacity.[103] As best as I can see, no other documentation between them appears to use the name LEPL save for the final invoice in 2017, which was the subject of some dispute (see paragraph 142(p) above). Plainly, both the 2012 and the 2017 are outside the relevant time period in any event.
[102] HB, page 1675.
[103] ts 521, 22 May 2023.
Thirdly, I find that Mrs Miller's understanding as to what constituted 'the land' for which she was paying the applicant for access to graze Eaglenook's sheep developed over time.
It is clear that from its earliest time in late 2009 or early 2010, Eaglenook's sheep were grazed on Lot 1099 and what became Lot 301, as well as the land to the north of Lot 301 (which by 2013 had become Lots 300, 800, 806 and 807), as well as Lot 804.
As to Lot 804, she said that Lot 804 had been sold by the applicant[104] and when she discovered, sometime after the sale, that it was owned by others, she obtained permission from them.[105] It would appear (see paragraph 7 above) that the applicant only owned Lot 804 for a few months in 2009. The date she obtained permission from the 'new' owner was not given.
[104] ts 514, 22 May 2023.
[105] ts 528, 22 May 2023.
Similarly, she gave evidence that the applicant reached an agreement with Mr Williams (from Mr Williams' evidence it is clear this occurred in 2013) as to part of Lot 1099 which led to a dispute between her and Mr Williams, in effect because the applicant never advised her that part of the land to which she thought she had access was leased to Mr Williams.[106]
[106] ts 527, 22 May 2023.
Lots 300 and 800 are narrow lots that separate Lot 301 to the south from Lots 806 and 807 to the north. They appear to be owned by Water Corporation and Main Roads respectively. Mrs Miller said that she had no idea that they were no longer owned by the applicant (as per paragraph 7 above, the sale of Lot 300 occurred in June 2015 while the date of disposal of Lot 800 to Main Roads does not appear apparent on the materials before me) until fencing contractors arrived to separate them.[107]
[107] ts 530 – 531, 22 May 2023.
Equally, she did not know that Lot 807 was not owned by the applicant because he never told her that was the case.[108]
[108] ts 531, 22 May 2023.
In cross-examination, she was taken to Exhibit 7, which is a copy of several text messages apparently sent from the applicant to Mrs and Mr Miller dated 15 and 20 September 2016, 21 February and 22 March 2017. The 20 September 2016 and 22 March 2017 texts do not concern access to land. The 22 March 2017 text is at the time the relationship between them was breaking down and is outside the relevant period in any event. The only text relevant to these proceedings is that dated 15 September 2016. It is addressed to Mr Miller and says 'Hi Ross, ur sheep got into my paddock. I put them back in the water corp paddock where they came from. Regards Franck'.
In regards to that text she said that prior to the Royal Show 2016 (i.e. ~September 2016) she was asked to move Eaglenook's sheep from Lot 806 (and perhaps also Lot 301, the evidence was not clear) to allow the applicant to use that (or those) paddocks for his own sheep, which she did, by moving them to Lot 300 but that due to poor fencing, the sheep made their way back to Lot 301.[109] That appears to be in addition to the periods of time previously mentioned in February, March and September 2015 and May 2016.
[109] ts 555 – 557 and 599, 22 May 2023.
In cross-examination, the applicant repeatedly asked Mrs Miller whether she had permission to use parts of the land at various times. In several instances she answered that she did not.
But I am satisfied that in each case her answers to that effect – i.e. that she did not have permission – was not an admission that she was putting her sheep where she knew she was not allowed to put them. Rather, she was acknowledging that her sheep went onto Lots 300, 800, 804 and 807 in circumstances where, she now knows, those lots were owned by entities other than the applicant, although she was not aware of that fact at those various times. Rather, she mistakenly thought that those lots were part of the land for which she was paying the applicant to access for grazing. Having become aware of the real nature of the ownership she 'admitted' that she lacked permission.
The applicant's case is that Mrs Miller, either indiscriminately or deliberately, put her sheep on land without any regard for whether or not she had permission. That is not how I characterise it. Rather, I find that she had an agreement with the applicant to put sheep on 'the land', the full scope of which changed over time, in circumstances where her understanding followed some time later than the applicant's ownership status.
I make that finding primarily because it is consistent with the way Mr Williams characterised his dispute with Mrs Miller over his (leased) portion of Lot 1099. In what amounts to corroboration of Mrs Miller's version of events he said, in effect, that he and Mrs Miller clashed over the presence of Eaglenook sheep on his (leased) portion of Lot 1099 because the applicant failed to advise Mrs Miller of the existence of his lease.[110]
[110] ts 468 – 470, 19 May 2023.
Accordingly, I do not accept the applicant's submission that her 'admissions' as to Eaglenook sheep on Lots 300, 800, 804 and 807 support his claim that the Millers put their sheep on the Subject Lots against his express instructions. I accept Mrs Miller's explanation as to how and why Eaglenook sheep were present on those other lots.
As I understand the applicant's case it is that, at least after about early 2015 the Millers only had a right to access the yards on Lot 1099 in order to access Lot 804. His questions as to whether Eaglenook sheep were grazed indiscriminately or other lots went, ultimately, (as I understand it) to show that evidence of Eaglenook sheep on the Subject Lots does not support the respondent's case because that occurred without his permission.
In support of this aspect of his case four invoices were filed with the Tribunal which might be said to support the applicant's case.[111] Two of them are dated outside the relevant period (November 2016 and March 2017) and two were issued on the same date (14 November 2015). All were issued after the OSR began its enquiries as to the use of the Subject Lots by the Millers and the respondent says they were prepared accordingly (i.e. they are self‑serving). More importantly, they were not put to Mrs Miller and she was not, therefore given an opportunity to respond to them. Equally, as the applicant did not give evidence he did not adopt them. I therefore give them no weight.
[111] HB, 2092, 2094, 2096 and 2938.
Fourthly, in each of her written statements, Mrs Miller said that in 2015 and 2016 the applicant bought sheep and put them on part of his land to the exclusion of the Millers/Eaglenook.[112] As noted above, in her 2019 and Primary Statements, she said that he ran his sheep on Lots 301 and 806.
[112] Miller Primary Statement at paras 53 – 58 and 61 – 64; Miller Supplementary Statement at paras 39 and 41; 2019 Statement at paras 42 and 45. In her interview she mentioned only September 2015 – see para 133(e) above.
An initial version of her 2019 Statement referred only to a portion of Lot 301[113] and she appears to have made other, similar, statements to the RevenueWA officers. For example, in Mr Foote's decision of 18 May 2018, he stated that the applicant used the 'East Paddock' (which I understand to be a reference to a portion of Lot 301), for his own sheep in February 2015.[114]
[113] HB, page 2050 (para 7) and page 2053 (paras 42 – 45).
[114] HB, page 1988.
The applicant says that Mrs Miller has given multiple versions of this aspect of her evidence and has, in effect, lied in this regard. He says I should not accept any of her evidence as a result of her 'credibility' issues (I deal with other attacks on her credibility below).
I do not find it at all surprising that there are slight differences in her evidence in this regard. [115] The subject matter of her evidence is many years ago. That her recollection has changed a little over time is not surprising nor is it in my view, damaging to her credibility.
[115] Annexure E to the respondent's Outline of Closing Submissions, 14 July 2023 sets out the differences.
But in any event, what is critical to the case before me is that Mrs Miller says that for a couple of brief periods of time (a few weeks each time) in February, March and September 2015 and May 2016, (and September 2016 – see paragraph 164 above) the applicant excluded Eaglenook sheep from Lots 806 and 301 so that he could run his own sheep on those lots and that, afterwards in each case, the Millers returned their sheep to the land from which they had been excluded. She maintained the same position in cross-examination.[116]
[116] ts 549 – 550, 553, 575 and 610, 22 May 2023
That evidence is inconsistent with the applicant's case that the Millers were only ever given access to the yards and access point in Lot 1099, and minor differences in how she describes the land from which her sheep were excluded do not change that.
As noted above, that issue was but one of several attempts to challenge Mrs Miller's credibility. Another involves attempting to ask her questions about her financial affairs.[117] I did not allow those questions, which I saw as unnecessarily interfering with her privacy in relation to a matter irrelevant to the matter before me. Even if she has been less than scrupulous in her financial dealings (and I am not suggesting that is the case), that seems to me entirely irrelevant to the question whether she is giving truthful evidence as to where Eaglenook's sheep, and the applicant's sheep, were located at various times.
[117] The point that the applicant sought to make was that Eaglenook charged GST at a time when it was not registered for GST - ts 523 – 525, 22 May 2023.
Another attack on Mrs Miller's credibility was in relation to the addition of Lot 1099 and Lot 805 to the Eaglenook PIC by a form titled 'Notification of Change of Address and Property Details' under the Biosecurity and Agriculture Management (Identification and Movement of Stock and Apiaries) Regulations 2013[118] dated 12 June 2013.
[118] HB, pages 2200 – 2202.
As noted above, that document was described by Mrs Miller as one completed to allow Eaglenook to transport stock from the applicant's land to other land on which Eaglenook grazed stock without the need to complete certain paperwork.[119]
[119] 2019 Statement at para 32; Primary Statement at para 39.
By marking his signature on the Change of Address form, the applicant declared that he is the owner of the land as described in the document[120] and gave permission for the Miller's brand to be registered for use on the land, which is, critically, defined as 40 Wilkinson Rd and 805 Mundijong Rd, Baldivis.
[120] Or is otherwise authorised to consent to the land’s use.
The applicant tendered Exhibit 8, which is a colour copy of the document[121]. It shows the description of the address of the land in a different colour ink to the balance of the document.
[121] A black and white copy was previously filed with the Tribunal and was included in the hearing book – HB, pages 2200 – 2201.
The applicant suggested in cross-examination that Mrs Miller had added the address details after he had signed the form giving his consent to the use of the land.
Mrs Miller's evidence was that she added the property details to the form when she took the form to the applicant for his signature; that is, that she asked him for the property details and she filled them in with the information he gave her.[122]
[122] ts 590 – 592, 22 May 2023.
That both explains the different coloured ink and provides an explanation for the fact that the form refers to 805 Mundijong Rd, rather than Lot 805.
The applicant, in effect, asserted that the reference to Lot 805 Mundijong Rd was not a reference to Lot 805 because the correct address is Lot 805 Wilkinson Rd. That is, in my view, a hopeless suggestion borne of desperation. I return to this issue below, when dealing with the evidence of Ms Barrett. I accept Mrs Miller's evidence in this regard which is entirely consistent with her evidence more generally that she was ignorant of the different parcels of land and their ownership and that she simply paid the applicant for the right to agist the Eaglenook sheep on his 'land'.
Another attack on her credibility was to the effect that she had colluded with RevenueWA officers but, while Mrs Miller clearly has little time for the applicant, there is no evidence at all, above the applicant's bare assertion, that she has done so or that she has told deliberate untruths.
In so finding, I note that she appears to have nothing to gain from her participation in these proceedings and I accept that the only reason she is involved at all is that she has been compelled to give evidence and information by RevenueWA.
Her evidence has not changed in a material sense over several tellings and several years. And while she is clearly not one for fine detail, I was not presented with anything to doubt that she was doing her best to tell the truth. In my view, any inconsistencies within her evidence are at the margins and neither undermine her credibility nor the case put against the applicant by the respondent.
In my view, her evidence stands on its own. However, in any event, her evidence is consistent in relevant regards with that of Mr Williams (below), Mr Foote, the RevenueWA Officer who conducted a site inspection and observed sheep with the Miller's eartags on the Subject Lots (below) and the observations of Mr Ashby (now deceased) as related by Mr Foote.
Mr Williams
Mr Williams adopted his Witness Statement[123] which covered only 40 short paragraphs. His evidence is that from about February 2013 he leased part (600m2 or 1/3rd of the total area) of a shed on Lot 1099 to recycle waste bread into stockfeed.[124]
[123] HB, pages 2270 – 2290.
[124] At paras 7 – 9. A copy of the lease was in evidence at HB, page 993.
He said that he had attended the shed nearly every day for at least four hours a day.[125] As a result, he was aware of who was using what part of 'the property'.[126] He says that when he started in February 2013, in addition to himself, two others were using the shed and hardstand on 'the property'. His witness statement then says:[127]
Apart from the bunkers in which [the applicant] had stored the manure which had been removed from beneath the large shed, all of the rest of the property, including the lots to the north of Lot 1099, was being used by Ross and Ruth Miller for grazing livestock in connection with their sheep stud.
[The applicant] did not have any sheep of his own on the property at that time.
[125] At para 10.
[126] At para 12.
[127] At paras 15 – 16.
He said that as at 30 June 2014 'the only persons using the property apart from me were the Millers. [The applicant] still had no sheep on the property at that time'.[128]
[128] At para 22.
His evidence is that in October 2014 he also leased from the applicant some paddocks outside the shed and that he also had the non‑exclusive use of the yards and unloading facilities. He said that in November 2014 he started to use those paddocks to graze sheep and, in February 2015, he leased another paddock outside the shed for the same purpose.[129]
[129] At paras 23 – 27.
In February 2015, March 2015 and September 2015, he says that the applicant purchased some sheep and kept them in 'the lot immediately to the north of Lot 1099 ('the North Paddock')',[130] which I understand to be a reference to Lot 301. He says that:
(a)in February 2015 the applicant kept them in the North paddock for 'several weeks' after which Mr Williams looked after them in the paddocks adjacent to the shed;[131]
(b)in April 2015, the applicant sold his sheep, with some being sold to Mr Williams and others to a 'rural exporter';[132]
(c)the sheep bought by the applicant in September 2015 were sold after '4 to 6 weeks';[133] and
(d)in May 2016, the applicant asked the Millers to remove their sheep from 'the North Paddock as he intended to purchase sheep himself'.[134]
[130] At paras 28, 30 and 34.
[131] At para 29.
[132] At para 31.
[133] At para 34.
[134] At para 35.
Rather, the evidence of Mr Williams, which was unchallenged, is that the only manure sold from Lot 1099 was that stored in the bunkers on Lot 1099[211] and that the manure stored in those bunkers had been moved there from under the floor of the shed sometime prior to 2012.[212]
[211] Witness Statement of Mr Williams, HB, page 2966.
[212] Witness Statement of Mr Williams, HB, page 2965.
Mrs Miller's evidence was to the same effect.[213]
[213] See para 141(f) above.
On the basis of the clear and unchallenged evidence of Mr Williams and Mrs Miller, I find that the applicant was not using any of the Subject Lots for primary production in relation to the sale of manure, at any relevant time.
The applicant's sheep grazing does not amount to the use of the Subject Lots for a primary production business
The documentary evidence referred to above and the evidence of Mrs Miller and Mr Williams is sufficient for me to accept that, at least, the applicant had sheep on Lot 301 for a few weeks at a time, in or about February, March and September/November 2015 and August/September 2016.
There is also evidence that at least some of those sheep were sold for export, which I assume is a sale for their meat.
So much might be said to satisfy the definition of 'primary production' in s 30A(1)(b)(i); the maintenance of living creatures 'for their sale for food'.
However, carrying out primary production is not sufficient to satisfy the exemption. Rather, the exemption requires the use of the land for a 'primary production business'.
As noted above, that term is defined by s 30B which lists five criteria, each of which must be satisfied.[214]
[214] Intercorp at [56].
In this regard, the applicant faces the insurmountable hurdle that there is no evidence before me whatsoever that might allow me to consider the criteria described in s 30B(d).
That is, I have nothing before me that allows me to consider whether the applicant's grazing activities 'have the same or similar characteristics as, and [are] in the same or similar manner to, the ordinary trade in that line of business taking into account - scale, size and permanency; and repetition and regularity.'
It is not that I have nothing before me as to what the applicant did, although that evidence is very sparse indeed. Rather, there is no evidence before me as to what constitutes the 'ordinary trade in that line of business'.
The applicant called no one to address that issue and there is nothing otherwise before me in that regard.
In so saying, I acknowledge that there was some evidence from both Mrs Miller and Mr Williams that they grazed sheep on the Subject Lots. But there was no evidence from either of them as to how they ran their business. And, perhaps more importantly, I have no idea as to whether their businesses amount to an example of 'the ordinary trade in that line of business.
It seems to me, and I find, that absence is fatal to the applicant's case in relation to his grazing of sheep on the Subject Lots.
Accordingly, I find that the applicant did not use any of the Subject Lots for a primary production business in the assessment years 2015 and 2016.
That finding means that there is no need to address the other sub‑paragraphs of s 30B. However, given the efforts of the respondent in attending to the issues therein, I will turn briefly to those sub‑paragraphs now.
The applicant's grazing activities did not have a significant and substantial commercial purpose or character – s 30B(a)
I have briefly outlined[215] above the largely objective written evidence (which was agreed between the parties) as to the number of sheep the applicant bought and sold.
[215] At paras 284 – 292 above.
As a result, I am satisfied, and I find, that:
(a)For ~4 weeks in February and March 2015 the applicant grazed 199 sheep on Lots 301 and 806;
(b)For ~4 weeks in March and April 2015 (with a week between the end of the previous period) the applicant grazed 154 sheep (being different sheep to the 199 above) on Lots 301 and 806;
(c)For ~9 weeks in October and November 2015 he had 253 sheep on Lots 301 and 806 and 106 sheep remained for a further four weeks to 23 December 2015;
(d)For 1 week in August 2016 he had 138 sheep and, for the following ~five weeks he had a further 155 sheep (total 285 sheep) on Lots 301 and 806.
There are also objective documentary evidence as to the amounts of money which the applicant paid and received for those sheep.[216] In chronological order, each purchase and sale resulted in the following gross profit for the applicant: $3,977.59; $1,228.05; $8297.30; $3354 – a total of $16,856.94.
[216] See the footnotes to paras 284 – 285 above.
There are also before me financial documents which would, if I accepted them, allow me to put those sums into some sort of context personal to the applicant, being financial reports and tax returns.
However, in the absence of evidence from the applicant, or someone else such as his accountant, adopting those documents or otherwise confirming their accuracy, I cannot do so.
In this regard, I note that there is both evidence and submissions from the respondent to the effect that the applicant's financial statements and tax returns are unreliable.
In that regard, Mr Lee's written evidence goes into very considerable detail explaining his investigations.
On several occasions he explains how it is that the financial documents provided to him by the applicant are, putting it kindly, unreliable.
So, for example, Mr Lee sets out in some considerable detail how sums declared by the applicant as income for the sale of sheep are unlikely to have been for that purpose.
To take an example, in his Ledger Entries Report for the year ended 30 June 2015, the applicant declares a sum of $31,728.44 on 30 June 2015. That sum was explained by Mr Versaci (so Mr Lee explains) as comprised of 10 amounts recorded as 'Farm Sales' but, when regard is had to the applicant's cash book, seven of them are described as being for the sale of manure.[217]
[217] HB, pages 3057 – 3060.
Mr Lee then explains that even the cash book entries cannot be relied upon because, for example, one of the seven entries for manure referred to above appears to correspond to a payment by Mrs Miller for agistment/rent/access to the Subject Lots.[218]
[218] HB, page 3058 at para 183.
There was no attempt by the applicant to cross-examine or otherwise challenge Mr Lee on these or any other of the many examples Mr Lee gives of the unreliability of the applicant's financial records.
As I have already held, I found Mr Lee to he honest and forthright and have no hesitation in accepting his evidence.
I also place considerable weight on the fact that the applicant was unable to get his accountant, Mr Versaci, to attend to give evidence despite my previous grant of leave to issue him with a witness summons.
There was no suggestion from the applicant that Mr Versaci had disobeyed the summons in failing to attend to give evidence and the Tribunal's records show no evidence of the summons' service.[219] The need for the summons was not clear to me in that it should have been a simple matter for the applicant to ensure that Mr Versaci, as his accountant, attended to give evidence in relation to his client's financial affairs by paying him for his time if necessary. In the absence of any explanation by the applicant for Mr Versaci's absence, particularly in circumstances where the applicant sought and obtained leave to summons him, I find that Mr Versaci's evidence would not have assisted the applicant.[220]
[219] See ts 762, 24 May 2023.
[220] Jones v Dunkel (1959) 101 CLR 298.
There is, therefore, very limited evidence before me upon which I can assess the commercial quality of the applicant's grazing operations. Doing my best, I now turn to the various factors identified by Sharp DP in Intercorp as matters going to the question of significant and substantial commercial purpose:
(a)The intensity of the operation – on the evidence described above, it would appear there were only a handful of sales and purchases of sheep across the two assessment years. There are, no doubt, other factors addressed below which might also be addressed when dealing with 'intensity'. In order to avoid duplication, such matters are addressed only below.
(b)Size of the herd – this is set out above. At most, there were 285 sheep on the Subject Lots at any given time;
(c)Quality of the herd – I have no evidence about this before me;
(d)Size of the land – Lot 301 is 33.97ha; Lot 806 is 2.13ha; Lot 1099 is 74.61ha.[221] But the evidence appears to me to support the view that the applicant's sheep were only on Lots 301 and 806 – a total of 36.1ha; and
[221] Exhibit 4 at page 7.
(e)Carrying capacity of the land:
(i)Exhibit 4 is a letter from the DPIRD[222] of 28 October 2022 which advises that the carrying capacity of Lot 806 is 12.78 Dry Sheep Equivalents (DSE) and of Lot 301 is 203.82 DSE for a total of 216.6 DSE. DSE is a measure that approximates the amount of feed required by a two year old, 50kg Merino wether.
[222] See para 230(d) above.
(ii)Some of the purchase documentation describes the sheep bought and sold as wethers and gives their weight.[223] Other documents go no further than to describe them as 'lambs'.[224] Others include no description at all.[225]
[223] HB, page 2719 – sale of 126x42kg wethers and 21x50kg wethers on 30 November 2015.
[224] HB, pages 2702 and 2703 – the purchase of 199 lambs in March 2015 and the sale of 154 lambs in April 2015.
[225] HB, page 2718 – the purchase of 253 sheep on 29 September 2015.
(iii)For at least some of the transactions, I therefore have no way of assessing the sheep against the DSE standard. But if I assume that each sheep owned by the applicant was equivalent to 1 DSE, then for a couple of months in October and November 2015 and September 2016 he was (marginally) overstocking the land but for the other periods the land was being used at or below its carrying capacity.
(f)The resources (time, labour and expenditure) put into the development and maintenance grazing operation by the applicant:
(i)There is evidence of three different types of 'effort' in this regard:
i.that of the applicant in a personal sense in working the sheep and carrying out maintenance etc;
ii.the buying and selling of sheep; and
iii.the capital works done to repair/ replace yards and fences.
(ii)As to the personal efforts of the applicant, the evidence of Mrs Miller and Mr Williams (in questions asked of both of them by the applicant in cross-examination) was to the effect that the applicant spent little time doing any work on the property at all.[226] Mrs Miller said that the applicant's knowledge of sheep was 'not very good'.[227] She said that she 'didn't believe [he] had really any knowledge of managing sheep'.[228] Mr Williams said much the same.[229] There is (almost) nothing to rebut that evidence.
[226] ts 446 and 448, 19 May 2023 and ts 515, 22 May 2023.
[227] ts 518, 22 May 2023.
[228] ts 518, 22 May 2023.
[229] ts 448, 19 May 2023.
(iii)Mr Hooton said that he helped the applicant move some sheep on an unknown date and Ms Bushney said that the applicant was often at the farm but she didn't describe what he was doing and she was, by her own evidence, there only 'occasionally' in any event;
(iv)As to the purchase and sale of the sheep, that appears to constitute ~10 days of work for the two assessment years. I find that to be at the nominal end of the scale.
(v)There was some evidence from Ms Bushney and Mr Hooton to the effect that the applicant spent a considerable amount of time doing up the yards, shed and fences;
(vi)There is also a miscellany of photos, invoices and other documents which might be said to constitute evidence that certain work was done; of course, the applicant did not give evidence and those documents were therefore not proven or even explained;
(vii)As I have previously explained, I have considerable doubt whether Mr Hooton attended any part of the applicant's Baldivis property at all in 2015 and the text messages suggest that his attendances in 2016 were towards the end of the year. Mr Simmonds' evidence suggests that Mr Hooton's work was done by the middle of 2016, although (as explained above) it is unclear to me whether the two men were talking about the same work or not. Ms Bushney's evidence in this regard was only at the very highest level of generality;
(viii)In any event, there is no evidence as to why the work described by Mr Hooton and Mr Simmonds was done. That is, it is unclear to me whether the works were done for the purpose of facilitating the applicant's own grazing operations or to ensure the land was adequate for agistment by the Millers or others.
(ix)In the absence of reliable evidence as to when and why the various work was being done, I am not satisfied that such work as was done to repair and replace the yards and fences was done for the purposes of the applicant's own grazing activities.
(g)The relative contribution of the applicant's grazing operation to his total income - for the reasons set out above, there is nothing before me upon which I can rely in this regard.
(h)Whether the scale of the operation is consistent with comparable operations – there is considerable overlap between this criterion and s 30B(d). Accordingly, I find that there is no evidence at all as to what a comparable operation might be nor anything by which to compare it; and
Income and profitability of the operation – I am able to calculate the gross profit of the sheep purchases and sales but have no other reliable evidence of other costs or expenses against which to assess the profitability, although given the rather notional gross profit I would expect that a loss was suffered.
Given the number and significance of criteria for which there is no evidence (particularly the resources put into the business, the relative contribution of the business to the applicant's total income, its scale and its profitability), I find that the applicant has not discharged the onus; there is simply too much information missing for me to assess the issue at all, let alone with any degree of certainty.
Accordingly, I am not satisfied that the applicant's sheep grazing activities had a significant and substantial commercial purpose or character.
Were the applicant's grazing activities directed to making a profit and did they have a prospect of making a profit? – s 30B(b)
I have previously detailed the gross profit made by the applicant from the purchase and sale of sheep in 2015 and 2016.
I have also previously found that there is insufficient material upon which I can rely that would allow me to place those figures into the applicant's personal financial context.
Without repeating myself, for the same reasons, I find that the applicant has not discharged his onus under this criterion. I am not satisfied that the applicant's grazing activities were directed to making a profit nor that they had a prospect of making a profit.
Were the applicant's grazing activities planned, organised and carried on in a businesslike manner – s 30B(c)?
It is for the applicant to put before me evidence that demonstrates that his grazing activities were planned and organised and were carried on in a businesslike manner. He has not done so.
As noted above, a very large amount of documents were filed with the Tribunal by the applicant. It is possible that, together, they demonstrate a suitable (business-like) level of planning and organisation by the applicant as to his sheep grazing activities. But, as repeated previously, the applicant did not give evidence and has therefore not even adopted relevant documents, let alone explained them.
Further, the respondent points to the evidence of Mrs Miller and Mr Williams to the effect that the applicant told them that he only purchased sheep for the purpose of avoiding land tax.[230]
[230] HB, page 2957, Miller Primary Statement at [48] (April or May 2014); HB 2968, Williams Statement at [44].
Finally, there are only a handful of transactions whereby the applicant purchased and sold sheep across the two assessment year period.
In short, I am not satisfied that the applicant's grazing activities were planned, organised and carried on in a businesslike manner.
Any use of the subject lots by the applicant for primary production business was not a sole use
As I have previously noted, s 30D(1)(b) provides, in effect, that as at the relevant date, the applicant must have used the Subject Lots solely for a primary production business.
In my view, even if the applicant's sheep grazing activities did amount to a primary production business (which they did not, for the reasons given above), they did not amount to the sole use of the Subject Lots because as at the relevant dates the Millers and Mr Williams were using the land for grazing, and they were paying the applicant for the right to do so.
The respondent's submissions in this regard focus on the applicant's use of the land for investment.[231] It seems to me that it is equally valid to consider the use of the land by the Millers and Mr Williams.
[231] Respondent's Outline of Closing Submissions at paras 72 – 73.
That is, regardless of whether the focus is on the fact that Party A was grazing the land, or on the fact that Party B was charging Party A for the right to graze the land, in neither case can it be said that Party B was the sole user of the Subject Lots.
In his SIFC, the applicant accepts that Mr Williams had a lease over a portion of Lot 1099. He also accepts that that precludes any exemption from land tax in relation to that part of Lot 1099.[232]
[232] Applicant's Statement of Issues, Facts and Contentions at para 105, HB, page 38.
The real issue between the parties was the use of the Subject Lots by the Millers. The applicant's case is that the only right of use held by the Millers was to the yards and access area of Lot 1099 for which they paid him a fee.
However, for the reasons already made, I accept the respondent's submission that, save for the area leased by Mr Williams, and for the few weeks in and about February/March and September to November 2015 and May and September 2016, the Millers had the right to occupy all of the Subject Lots and paid the applicant for that right.
By way of repetition, I make that finding for the following reasons.
First, that is what Mrs Miller has said in evidence and, as I have previously found, I largely accept her evidence.
Secondly, it was Mr Williams' evidence that the Millers' sheep were all over the Subject Lots in 2015 and 2016, save for some brief periods (measured in weeks) when the applicant bought sheep.
Although Mr Williams gave no evidence as to the payment by the Millers to the applicant for the right to graze their sheep, as he was not privy to that arrangement, there is nothing unusual about that.
Thirdly, by signing the form described above at paragraph 179 in June 2013, the applicant expressly gave his permission for the Millers to add Lots 1099 and 301 to their PIC and, thereby, use those lots to graze their sheep.
Fourthly, the evidence of Mrs Miller and Mr Williams as to the timeframes when the applicant ran sheep on Lot 301 to the exclusion of the Millers broadly corresponds with the dates on which the applicant purchased/owned sheep as detailed above.
Fifthly, I do not accept the evidence of Ms Bushney or Mr Hooton where they disagree with Mrs Miller and Mr Williams for reasons previously described.
Miscellaneous Matters
Before concluding it is necessary to address, briefly, certain aspects of the applicant's case, noting in advance that none of the following matters were fleshed out in any detail due, primarily, to the applicant's failure to give evidence.
The applicant's 'Reliance Case'
As noted above, the applicant's SIFC contains an outline of his 'Reliance Case', which is to the effect that he relied upon previous OSR decisions in 2012 and 2013 to make his own decisions regarding the use of the Subject Lots. Implicit in the reliance case are two unstated contentions: that his own decisions made in reliance on the decisions of OSR officers were made with the intention of satisfying the primary production business exemption; and secondly, that it is those decisions which the respondent now criticises for not satisfying the criteria for that exemption.
There are many difficulties with the applicant's reliance case. What follows is not intended to be exhaustive.
Firstly, because he failed to give evidence and failed to call Mr Versaci, I have no evidence as to why he made any decisions.
Secondly, to the extent that the Reliance Case alleges the active, deliberate involvement of officers of what is now RevenueWA, his questioning of them failed to elicit anything from them that suggested that they were responsible for his current situation.
Thirdly, the only topic of cross-examination that appeared to me to address the applicant's Reliance Case concerned decisions made by officers of the OSR that rejected the applicant's claim for exemption because the owner of the land (the applicant) was a different entity to that which the applicant claimed was operating the business (LEPL).
I am prepared to accept the possibility that, following those decisions, the applicant altered the basis of his claim, such that from the Land Tax Application for Exemption Form dated 3 January 2014 (see paragraph 80 above) he alleged that it was he himself, in his individual capacity, who operated the 'rural business'.
Although there were glimmers of a suggestion that LEPL continued to have something to do with the operation,[233] the applicant's claim for the relevant years (2015/16 and 2016/17) remains on the basis that he, in his individual capacity, operated the sheep grazing activities.
[233] See, for example, para 156 above.
Not only is there no 'criticism' of the applicant in this regard from the respondent, such a position appears to me to be necessary to make out any claim for the primary production business exemption. Accordingly, the applicant's Reliance Case in this regard appears to make no sense to me.
Fourthly, his arrangement with the Millers, which is most destructive of any claim by him for the primary production business exemption, pre-dates the decisions made by officers of the OSR that he says, in effect, influenced him into changing his position. It is true that Mrs Miller's evidence was that aspects of their agreement changed over time, but its fundamental nature did not.
Fifthly, any claim by the applicant that he should have the benefit of an exemption because he acted in accordance with advice given by officers of the OSR to the effect that the exemption would be satisfied if he did so must fail; there is no estoppel against a public body exercising its powers.[234]
[234] See, generally, Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93, at page 109 ff. See, also Ostrowski v Palmer [2004] HCA 30; 218 CLR 493.
Finally, in any event, what matters in a claim for exemption from land tax on the basis of a primary production business is whether the relevant statutory criteria are met. For the reasons set out previously, the applicant (who bears the onus in this regard) has not discharged his burden. The reasons why he has not done so are not relevant to my determination.
Conspiracy/Stich Up
As noted above, during at least one interlocutory hearing, the applicant alleged that there had been a conspiracy between the respondent and Mrs Miller to 'stitch-up' the applicant, following which I granted leave for each of them to file supplementary witness statements.
I also granted leave to the applicant to examine Mrs Miller's cash book, in circumstances where he alleged that it had been tampered with.[235]
[235] Order 2 of the Orders made 21 October 2022.
As I have noted above, the applicant did not take Mrs Miller to her cash book. Neither did he put to either the respondent or Mrs Miller that they had conspired against his interests.
I am unable to say whether he took that course because he was satisfied, having considered the cash book and the supplementary statements, or otherwise. But in any case, there is nothing before me that provides a basis for me to consider the matter of a conspiracy any further.
The Context of 2017/18 and 2018/19
As I have noted above, the applicant's SIFC includes the statement that his exemption for primary production business in 2015/16 and 2016/17 should be viewed in the context of the exemption granted to him for the years 2017/18 and 2018/19.
I am not exactly clear as to the case put but as best as I understand it, the applicant says that the situation in 2015/2016 and 2016/17 was not materially different to that in place in the later years (first limb) or he says that throughout 2015/16 and 2016/17 he was carrying out works necessarily preparatory to the primary production business for which he was granted an exemption in 2017/18 and 2018/19 (second limb).
Either way, the argument does not assist him.
As to the first limb, there are several significant barriers to the applicant's claim.
First, as I have said, the Millers left the Subject Lots in March 2017. That provides a very material difference between the two scenarios in that in the later years the Millers were neither grazing sheep on the Subject Lots and nor were they paying the applicant to do so.
Secondly, as I understand it, there are significant differences in the number of sheep grazed by the applicant in the later years compared to 2015/2016 and 2016/2017. [236]
[236] HB, pages 401 – 403.
Thirdly, in any event, the decision of the relevant officer at RevenueWA to grant exemption status for 2017/2018 and 2018/2019 does not bind me as to how to proceed in relation to the years relevant to my decision.
Fourthly, as I have previously found, the evidence before me is fundamentally lacking in several material respects such that even if certain aspects of the facts and circumstances are comparable across the years (and as I have just noted, that does not appear to be the case), I would consider myself unable to be satisfied of key statutory criteria.
As to the second limb, 'work carried out to prepare the land for primary production does not of itself constitute use of the land for primary production'.[237]
[237] Reolon v Chief Commissioner of State Revenue [2013] NSWADT 96 at [61], [65], [93] – [96]. In Quito Pty Ltd and Commissioner Of State Revenue [2014] WASAT 8, the Tribunal (Sharp DP) distinguished the facts in that case from those in Reolon (at [113]) in a manner that suggests acceptance of the relevant principle.
The question before me is whether the applicant was using the land for a primary production business as at 30 June 2015 and 2016. That is, the fact that he was doing works in 2015/16 and 2016/17 that would, at some later years, allow him in future years to use the land for a primary production business does not (and cannot) impart a primary production business character to the use of the land in those earlier years.
Livestock Holding Facility
Finally, there were occasional references during the hearing to the use of the land as a livestock holding facility – see paras 53,72,119 – 126 and 134 above.
At no stage was I informed, by evidence, as to what such a facility involved. Neither was it ever explained how such a facility (if it exists) might satisfy the statutory criteria.
Whatever the case in this respect might have been it was never enunciated and I mention it now only out of completeness.
Conclusion
For the preceding reasons I find that the Subject Lots were not used for primary production business as at 30 June 2015 or 30 June 2016.
Accordingly, the applicant's claim must fail.
Orders
The name of the respondent be amended to 'Senior Revenue Consultant as delegate of the Commissioner of State Revenue'.
The application for review of the respondent's decision of 5 November 2020 is dismissed.
I will hear the parties as to any ancillary orders.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
PN
Associate to Deputy President Judge Jackson
31 MAY 2024
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