The Trustee for O'Rourke Seven Trust v The Commissioner of Land Tax

[1996] QLC 103

[1996] QLD 103

 

LAND COURT BRISBANE

8 AUGUST 1996

In the matter of an appeal against Assessment No. 202233/E23751

for Land Tax on land owned on 30 June 1990 to 30 June 1994 inclusive. (A95-62)

The Trustee for O’Rourke Seven Trust v.

The Commissioner of Land Tax

(Hearing at Brisbane) D E C I S I O N

This matter involves an appeal against the assessments for land tax made under the Land Tax Act 1915 on land owned by the appellant at midnight on the 30th of June in the years 1990, 1991, 1992, 1993 and 1994 respectively.

The property, the subject of the appeal, is located at 7 Aquinas Court, St Lucia. The land was purchased in late 1989 or early 1990 by the trustee of a trust established for the benefit of the seven children of Kerry Bernard O’Rourke and his wife. The house which is now on the land is occupied by the O’Rourke family and was so occupied following its completion in September 1991. Mr O’Rourke appeared for and gave evidence on behalf of the appellant in each matter. Mr Boccabella of counsel appeared for the Commissioner.

Put briefly, the appeal is based on the proposition that the subject land “is used exclusively as the principal place of residence of all the beneficiaries of the relevant trust” and therefore ought to be accorded the benefit arising from such usage in the assessment of land tax. The relevant provision is s.11 (6D) of the Land Tax Act 1915 and I set this out below, together with s.11(1) and (2) which assist in explaining the context of

ss.(6D):

“11.(1) Land tax shall be payable by every owner of land upon the taxable value of all the land owned by the owner, and not exempt from taxation under this Act.

(2) The taxable value of all of the land of an owner is the amount of the unimproved value of such land or, where such land comprises 2 or more parcels, the aggregate of the unimproved values of those parcels respectively less any deduction allowable in accordance with this Act.

...

(6D) Where a person (other than a person who is an absentee) is an owner of land in the capacity of trustee and that land comprises 1 parcel that is used exclusively as the principal place of residence of all the beneficiaries of the

relevant trust who were such beneficiaries at midnight on 30 June immediately preceding the financial year in and for which the land tax is levied, in calculating the taxable value of all land of which the person is owner in that capacity there shall be deducted an amount equivalent to the unimproved value of that parcel.”

In considering whether land is used as a principal place of residence, s.3E must be applied:

“3E.  In respect of any year in respect of which land tax is leviable or payable,

land is not used as the principal place of residence of a person unless -

(a)that land and no other land has, for the period of 6 months immediately preceding the time when the ownership of land for the purposes of this Act is determined, been continuously used by that person for residential purposes and for no other purpose; or

(b)in any other case - the commissioner is satisfied that the land is used by that person as the person’s principal place of residence and for no other purpose.”

It might be noticed in passing that whereas the word “exclusively” is used in s.11(6D), this does not appear in s.3E, however as will appear later in this decision, the words in s.3E “and for no other purpose” are considered by me to be equivalent to the use of the word “exclusively” in s.11(6D).

There is constructed on the subject land is a building which comprises a main bedroom, six bedrooms on a second level, a dining-room, lounge, kitchen, two bathrooms, a laundry, a storeroom, a carport for two cars and a study. Except perhaps for the number of bedrooms, the structure does not appear to be remarkable in any way and could readily be described as a house or a residence.

Following the purchase of the subject land Mr O’Rourke, who is an architect, commenced preparing plans for the house, however, construction did not commence until May 1991 and the family moved in in September of that year.

The Deed of Settlement creating the trust was tendered in evidence. It has the usual characteristics of a discretionary trust listing, amongst other things, the beneficiaries and including a power in the trustee to expand the list of beneficiaries to include:

“Any other person or corporation (other than the Settlor) whom the Trustee in the

Trustee’s sole discretion by deed of oral declaration or, in the case of a trustee which is a corporation, by oral declaration of a director thereof, and in any case, revocable or irrevocable, appoints as a beneficiary hereunder.”

This power could be utilised to name Mr and Mrs O’Rourke as beneficiaries, it seems, but there was no evidence that the power had been acted upon.

In considering the question as to whether the land is used exclusively as a principal place of residence of all the beneficiaries, it is useful to consider the use to which the house or parts of it are put, apart from mainstream residential usages such as sleeping and eating, and in this regard the study in which Mr O’Rourke carries out certain business activities is of importance.

There is no separate entrance to the study which needs to be accessed from inside the main entrance to the house. The study is equipped with a computer which is used by Mr O’Rourke for business purposes, though not for purposes associated with architectural design, and by his children for the preparation of academic assignments and such like. There is a drawing board located in the study which apparently is used little by Mr O’Rourke as he subcontracts out drawing work, but was used at one stage by one of the children who studied architecture at the time. Business files used by Mr O’Rourke are located in the study and there is a television set there and lounge chairs, all of which are used by members of the family.

There are two telephone numbers which service the house, both listed in the 1994 Brisbane White Pages Telephone Directory, but with one entry appearing in bold type with the words “O’Rourke Kerry Architect” followed by the address and the telephone number. These two telephone lines and comparable entries in the White Pages Telephone Directories existed at each relevant date of this appeal. Mr O’Rourke explained that he uses the “house line” as the fax line and that as he and his wife have seven children the separate business line is necessary. On my own motion I have looked at the 1995 Telephone Directory covering the Sunshine Coast and note in the White Pages segment of that book that there is an entry, not in bold type, “O’Rourke KB Archt.”, whilst in the Yellow Pages there is a similar entry. In the 1995 Yellow Pages of the Brisbane Directory the business telephone number appears but not the house number, the address being given as 7 Aquinas Court, St Lucia and the Sunshine Coast number also appears, both of these numbers being listed under the index heading “Architects”. Similar entries to these 1995 examples appeared in previous years. The parties were advised of this additional evidence and invited to provide further evidence and submissions, if they wished. Both sides accepted this invitation.

Mr O’Rourke operates as a “contract architect” in that he has not worked as a payee income taxpayer during and prior to the relevant years in question. He contracts work either as a sole trader or through a company, with the arrangements as to how and where he operates turning very much on the arrangements for each project. He gave evidence about 90% of his income is derived from project management work, not architectural work as such, which is arranged through his company, Kerano Limited. Fees are paid through the company which has its Principal Place of Business listed in a tendered Historical Company Extract, as “7 Aquinas Crt, St Lucia, Qld 4067", that is, the subject property. The registered office is listed as a Brisbane city address. Mr O’Rourke said that at the time of the hearing 90% of his work is on the Sunshine Coast where the bulk of his work has been located for some years, though he spends only a couple of days a week there. The place where he actually works depends on the circumstances, working on occasions in other architects’ offices, from building sites and from the property, the subject of these proceedings, as well as from a Sunshine Coast home unit.

In evidence Mr O’Rourke said at one stage in reference to the subject property, “I have a business there and I have a business on the Sunshine Coast or I work out of a place on the Sunshine Coast. I work all around the place and all of my records are at Aquinas Court.”

From a date some time in 1990 to October 1993, Mr O’Rourke worked as a full-time contract architect in the office of an architectural firm known as “Design Network Australia”. Mr O’Rourke estimates that during this period he worked most of the time in the offices of Design Network Australia, spending about 10% of his work time only at home. He described the arrangement as being a “fluid thing” whereby on occasions he would work in the firm’s office for, say, six days a week and at nights when required, but he would frequently work at home and during part of this period he would work at home for full days from, say, two days at a time to perhaps a week.

Clients, many of whom include friends, came to the subject property regularly, however, as I understand the evidence, Mr O’Rourke would talk with clients in other locations as well, including their offices and on building sites. There is no signage outside the house nor any display of office hours within or outside the house.

So much for the material facts. The question which now needs to be asked is whether the evidence of business usage of the subject property by Mr O’Rourke or the use of it by Mr and Mrs O’Rourke as their residence along with their children, takes the property out of the province of s.11(6D) of the Land Tax Act; in particular, whether in the circumstances which prevailed at each relevant date, the land “is used exclusively as the principal place of residence of all the beneficiaries of the relevant trust”.

I have first of all directed my mind to the use being made of the subject land at the relevant dates of 30 June 1990 and 30 June 1991. At these dates the subject land was not occupied, being vacant on the first mentioned date and having a house in the course of construction on the land at the second date. For the appellant to bring the property within the provisions of s.11(6D) of the Land Tax Act, it must be demonstrated that the property is used as the principal place of residence. The term “used” in the context of this section connotes an actual user and not simply an intention to use. Mr O’Rourke submitted that the building of a residence starts once an architects puts pen to paper and, in effect, that an intention to use the land for residential purposes once the house is constructed is sufficient for the purposes of s.11(6D), however, this is a submission with which I cannot agree. One could, for example, construct a house and then, on completion, put it to a business use.

In considering the word “used” in the current context, I can do no better than to take the following quotation from the as yet unreported Land Appeal Court decision of Thomason v. Chief Executive, Department of Lands (delivered 3 March 1995:

“         The land must be ‘used’, that is, it must be applied to, employed for some

purpose, put into service, turned to account (see Macquarie Dictionary). The word ‘use’ has been held to be ‘a word of wide signification’ (British Motor Syndicate Ltd v. Taylor & Son [1900] 1 Ch 577 at 583 per Stirling J) and ‘a word of wide import’ (Shell-Mex & BP Ltd v. Clayton [1955] 3 All ER 102 at 106 per Court of Appeal) the meaning of which in any particular case depends to a great extent on the context in which it is employed (Ryde Municipal Council v. Macquarie University (1978) 139 CLR 633 at 637 per Gibbs ACJ, 651 per Stephen J, 658 per Aickin J). For land to be ‘used’ it must be actually used, not be contemplated or intended to be used nor be suitable for use (London & South

Western Ry Co v. Blackmore (1870) LR 4 HL 610 at 617 per Lord Hatherley LC.). That does not mean that there must be activity on all the land. An owner can use land by keeping land in its unimproved state where retaining it in that state is relevant to a particular purpose (Newcastle City Council v. Royal Newcastle Hospital [1959] AC 248 at 255, 1 All ER 735, 100 CLR 1 at 4, Privy Council.”

It follows that on the evidence that I have heard, the land in question was not used as a principal place of residence as at the relevant dates of 30 June 1990 and 30 June 1991. Accordingly the appeal relating to these dates will be dismissed.

Insofar as the relevant dates in 1992, 1993 and 1994 are concerned, the evidence is that the subject property was used as the principal place of residence of the beneficiaries of the trust and by Mr and Mrs O’Rourke. Early in the hearing no point was taken by the Commissioner that the property was used by Mr and Mrs O’Rourke as their place of residence, however, late in the matter, indeed at the eleventh hour, Mr Boccabella’s instructions changed. He was instructed to submit that the residential use of the subject property by the beneficiaries is, in terms of s.11(6D) of the Act, to be “exclusive” of any other use including the use of the property by Mr and Mrs O’Rourke as their place of residence. This is an additional ground to that which dominated the evidence, submissions and the pre-trial communication between the parties; that is, that Mr O’Rourke’s use of the subject property for business purposes was such that the property could not be considered as being exclusively used as a principal place of residence. The issue at these dates is whether that use by the beneficiaries is exclusive given the use also by Mr and Mrs O’Rourke.

Whilst I was provided by a Dictionary definition of “exclusive” by Mr Boccabella and had comment on that matter both from him and from Mr O’Rourke, the first authority that I refer to seems to me to be of further assistance. In Council of the Municipality of Randwick v. Rutledge (1959) 102 CLR 54 the following most lucid words appear at pp.93-94:

“The words ‘exclusively’ and ‘solely’ are familiar in fiscal and rating law.

Where an exemption from rating depends upon the use of land exclusively for a particular stated purpose, then the use must be for that purpose only (Nunawading Shire v. Adult Deaf and Dumb Society of Victoria (1921) 29 C.L.R. 98). The question arises, for example, when part of the subject land is used for the relevant purpose and another part for a different purpose (Sisters of Mercy Property Association v. Newtown and Chilwell Corporation (1944) 69 C.L.R. 369). The presence of ‘exclusively’, ‘solely’, or ‘only’ always adds emphasis; and is not to be disregarded (Reg. v. Cockburn (1852) 16 Q.B. 480, at p.491 [117

E.R. 962, at p.967]). When such words are present, it is a question of fact whether the land is being used for any purpose outside the stipulated purpose (cf. Trustees of Victorian Rifle Association v. Mayor of Williamstown (1890) 16

V.L.R. 251; Down v. Attorney-General of Queensland (1905) 2 C.L.R. 639). As Kitto J. said in Lloyd v. Federal Commissioner of Taxation (1955) 93 C.L.R. 645, at p.671, such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use.”

I note that this authority on this point has been followed on a number of occasions and it is my view that the word “exclusively” as it appears in s.11(6D) of the Land Tax Act should be understood in the sense explained by His Honour. In short, the word does not explain or qualify the concept of “principal place of residence” in any way, but rather is used to indicate that the deduction in taxable value provided for in the subsection may not be availed of in circumstances where some use other than use as a principal place of residence of the beneficiaries is carried out on the subject land. That is, the words “and for no other purpose” which appear in s.3E(a) of the Land Tax Act have an equivalent meaning to the word “exclusively” which is in s.11(6D). The following quotation taken from Rogers v. Lewisham Borough Council and Another CA (1951) 2 All England Reports 718-724 referred to me in argument by Mr Boccabella as expressed in terms consistent to those of Windeyer J:

“ ‘Used for the purposes of a place of public religious worship’ is clearly a

description which admits of more latitude of interpretation than ‘exclusively appropriated to public religious worship’ which is the description to be construed in this case.”

Similarly, in Federal Commissioner of Taxation v. Manchester Unity IOOF (1992) 113 ALR at 126 the Court said:

“The word ‘exclusively’ connotes a degree of absoluteness.   It is an adverb

meaning ‘in an exclusive sense or manner; solely’. Exclusive means ‘excluding all but what is specified’, generally see the Shorter Oxford English Dictionary. The Macquarie Dictionary is even more emphatic; thus ‘not admitting of something else’; ‘incompatible’; ‘limited to the object or objects designated’; ‘shutting out all other activities’.

It is quite clear to me that on the evidence I heard, the appellant is unable to satisfy the elements of s.11(6D) of the Act. The use of the subject property by Mr and Mrs O’Rourke for residential purposes is clearly collateral to the use by their children. The subject property is therefore not “used exclusively as the Principal place of residence of all the beneficiaries of the relevant trust”. The appeal as it relates to 1992, 1993, and 1994 will also be dismissed.

The conclusions that I have drawn thus far are sufficient to dispose of the appeal, however, given that the Commissioner has made a submission in the alternative regarding the 1992, 1993 and 1994 relevant dates, it will be appropriate if I deal with that also. In so doing, I will proceed as if the residential use of the property by Mr and Mrs O’rourke was not an issue.

If it were the case that the subject land was put to a use which was distinctly non- residential in character, such as having a guesthouse conducted on the same premises as the family lived, then there would clearly be a multiple use. The facts of the instant case are, however, not such that a ready conclusion can be drawn that there is a mulitple use on the subject land. Indeed, in address Mr Boccabella contrasted the use by Mr O’Rourke with one where someone such as a barrister takes work home at night or meets clients at home on occasions, examples which invite a closer analysis of the use described in evidence here. In carrying out such an analysis the first question which is suggested is: “what does use as a principal place of

residence mean?”. Having considered this as a general proposition, I need then to ask: “does the use made of the subject land include any use which is non-residential?”. If it does then the residential use is not exclusive.

In considering the first question I have posed, I see some benefit in referring to the judgment of Stephen J, as he then was, in Pioneer Concrete (Qld) Pty Ltd v. Brisbane City Council (1980) 54 ALJR 153 at 161:

“In Shire of Perth v. O’Keefe (1964), 110 C.L.R. 529, at p.535, his Honour,

speaking of the lawful continuation of non-conforming prior uses, denied that there was involved any ‘meticulous examination of the details’ of activities or any precise cataloguing of them but, rather, an inquiry as to what ‘according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date’. His Honour called in aid the criterion of that which would appeal ‘to practical minds as appropriate in the application of town-planning legislation’.”

His Honour referred to provisions in the relevant Ordinances then went on to say:

“ Ordinarily these requirements will be met by a simple description which accords with common usage. For example ‘Drive-in theatre’ will suffice without any reference to the usual associated snack-bars and toilets. ‘Service station’ will be enough without specific reference to the usual small repair shop, to the provision of toilet facilities, or to the sale of accessories, tobacco and sweets. ‘Milk Bar’ is nowadays an acceptable description of small mixed businesses which sell few milk shakes but large quantities of sweets, tobacco, groceries, bread and so forth.”

Now let me say immediately concerning this quotation that, whilst it was concerned with the question of the description  of intended land uses for town planning purposes, it  also expresses a general principle that, in a question of land use, which is the question that I have before me, it is appropriate to ask what, to a practical mind, the use of a property as a principal place of residence includes.

In considering whether an activity falls within a residential usage, it will be useful to analyse the class of activity to see whether it is narrowly residential in nature, whether it is incidental, whether it falls within the compass of being an expected or reasonable use of residential premises, or whether it is clearly non-residential, or collateral, in nature.  I have distilled these four classes from the cases, with some of my own refinement.

Examples of the narrow residential class might be found in Oldham Election Petition, Baxter’s Case (1869) 20 LT 302 at 308, where Blackburn J said:

“We must consider the residence to be where the voter sleeps habitually.”

In Stoke-on-trent Borough Council v. Cheshire County Council [1913] 3 KB 699 at 706, Ridley J said:

“The place of residence of a person is the place where he eats, drinks, and

sleeps.”

Now these two authorities were not concerned with the question of what is contemplated in a residential usage as such, but do serve to indicate, if indeed such is needed, that a narrow view of what is residential includes such things as eating, drinking, sleeping, washing and such like.

In turning to incidental uses, I find assistance in Rogers v. Lewisham Borough Council

cited above where at p.722 these words appear:

“         Counsel for the appellant argued and counsel for the respondent agreed that, although s.1 of the Act, in terms only exempts premises or parts of premises exclusively appropriated to public religious worship, it cannot reasonably be construed so strictly as to make the use for purposes incidental to such appropriation a disqualifying factor. Examples were given, such as the boiler rooms, vestries, cloak rooms, and store rooms for cleaning materials and so forth, commonly included in the premises of a church or chapel; and it was agreed on both sides that the exemption would not be lost merely on account of the use of such ancillary conveniences for purposes in themselves secular. This, indeed, is no more than is demanded by common sense in order to give practical effect to the section.”

In that case the Court was considering whether premises were exclusively appropriated to public religious worship. In WH Bowden against determination of Valuer-General, Shire of Pine Rivers, (1980-81) 7 QLCR, the Land Appeal Court had to consider the question of whether land was “exclusively used ... for purposes of the business of primary production ...”. The following quotation is taken from pp.142-143:

“         Mr Jones submits that whilst much of Mr Bowden’s business activities on

‘Warner Hill’ fall within the definition of the business of primary production, (namely the business of the rearing of livestock) such business does not include the preparation of the training of horses for, and taking part in, competitive events or sport. He maintains such activities are collateral to the business of a stud. He emphasises the trend for Appaloosas and Quarter Horses in Australia to take part in racing.

On the evidence as a whole we find that Mr Bowden’s activities on ‘Warner Hill’ constitute a business of primary production in that he is in the course of establishing a viable horse stud - a business of rearing of livestock. We note according to the Concise Oxford Dictionary (3rd edition) that the meaning of the word ‘rear’ is ‘raise, bring up, breed, foster, nourish, educate, cultivate, grow (cattle, game, children, crops, etc.)’

We consider that the activities subsequent to breeding namely handling, training, showing and competing in competitions are essentially an integral part of such business and are undertaken to enhance the reputation or credentials of the stud - a necessary part of the processing of the animals for market. If their qualities are so demonstrated, a higher price may be commanded when they are sold.

On the evidence before us, we regard all these subsequent activities in the subject case  as incidental  to the business of  the stud  and not  collateral or independent thereof.”

I should note that the Land Appeal Court’s use of language in this last paragraph is taken from the Council of the Municipality of Randwick case quoted from above. Following consideration of these authorities, I have concluded that uses which would be considered to be residential in nature as being incidental to a narrow residential usage would include such matters as painting and cleaning a house, or the caerrying out of repairs and such like, that is, matters which contribute to the enjoyment of the narrow residential usage. The term “incidental” has been used in Rogers v. Lewisham Borough Council to also include those activities that I have put into a separate class, that is activities that might be within the compass of being reasonably associated with a residential usage. An example may be that of after hours work in the case of a residence, or an occasional organ recital in the case of a place of public religious worship. I see a distinction in type between that class of activity which I have termed “incidental” and the class which I have termed “expected or reasonable” and will maintain that throughout this judgment, however, there is benefit in referring further to Rogers v. Lewisham Borough Council where the Court decided that both classes (referred to therein as “incidental” only” constituted valid uses for the purpose of that decision:

“The range of uses which can properly be regarded as incidental is thus much

narrower, and, generally speaking, we do not think any use (not in itself public religious worship) can properly be so regarded unless it is either reasonably necessary to enable the premises to be used for public religious worship or an activity of a kind customarily regarded as appropriate to be carried on in a place of public religious worship, though not in itself a religious service. The question whether a particular activity passes the second of these tests is necessarily one of fact and degree, but we hardly think that (for instance) an occasional oratorio, organ recital, carol concert, or mystery play could be regarded as disqualifying a church or chapel from the exemption.” (p.722)

The final class of usage on my analysis includes those matters that are collateral or clearly non-residential in nature. A clear example of this might be where part of the premises is used as a shop to which the public has general access.

It may immediately be seen that in answering the second question I posed earlier, that is: “Does the use made of the subject land include any use which is non-residential?”, the matter comes down to considering whether the business uses of  Mr O’Rourke are “expected or reasonable” or “collateral”. The distinction between these two classes, though easily seen in extreme examples, is really a distinction of degree which becomes more difficult to identify in borderline cases.

In deciding whether s.11(6D) applies as at the 1992, 1993 and 1994 dates, I have to consider the actual user of the subject land. Let me say first of all that in considering the evidence, I will consider it as a whole, for there is no single factor which is determinative in itself in deciding whether the usages concerned are such as to accord with being a residential or a collateral usage. It is not enough to say that Mr O’Rourke does not have an office in a commercial building; or that telephone directories identify a telephone in the subject property as

a business listing; or that he does work at home, or sees clients at home; or that his children use the study as well as he, and so on.

It will be useful if I now consider the relevant dates of 30 June 1992 and 30 June 1993. At these dates and for the relevant period provided for in s.3E of the Act, Mr O’Rourke worked for Design Work Australia as I have outlined in my earlier summary of the evidence. I have no difficulty in finding in respect of these two dates that the use made by Mr O’Rourke of the subject property falls into the class of being expected or reasonable residential usage. Whilst I have had regard to the evidence as a whole in drawing this conclusion, I have been particularly influenced by the amount of time spent at the offices of Design Work australia and that this was, in effect, his base, with the consequence that architectural and associated work done at the subject property was carried out more as an adjunct and as a matter of convenience. I am not dissuaded in my conclusion by the evidence which points the other way. By this I mean, in particular, the telephone listing at Aquinas Court and the fact that Mr O’Rourke’s business records were kept there at these relevant dates. These matters are relevant to the matter of usage, but it is the actual use by Mr O’Rourke that is of most influence in my mind.

I come now to the final date of the appeal, that is, 1994. As I understand the evidence, the use of the subject property for this relevant period included no abnormal arrangements such as occurred in the earlier years involving Design Work Australia, and there were no substantial absences on the Sunshine Coast as Mr O’Rourke spent only a couple of days a week there. Whilst there is no temporal precision regarding the evidence for 1994, I will proceed on my understanding that during this period Mr O’Rourke worked on occasions in other architects’ offices, from building sites, at the home unit on the Sunshine Coast for a couple of days each week and at the subject property at Aquinas Court.  All other evidence remains as stated earlier. I note that the respondent Commissioner had, by letter, sought from the appellant “the approximate number of hours per week, on average, that Mr O’Rourke spends on architectural work at the property” and was advised, by letter, in the general terms I have outlined above together with the words, “It is very difficult to determine the exact number of hours he spends on non-family activities” at the subject property. The reply also said with regard to the respondent’s inquiry about clients: “Most of Kerry’s clients are friends and it is usually these people who visit occasionally on both a professional and social basis. Again it would be difficult to determine the number of hours which could be called business related”. During the hearing there was no further attempt by Mr O’Rourke to quantify the time spent at the subject property attending to business-related matters. Whilst I appreciate that during his day-to-day activities Mr O’Rourke would not have maintained a record of work done at the house, it may have been of assistance to me were such information available.

In considering the 1994 appeal date I searched the authorities and found two that touch on the issue.

In John v. The Valuer-General (1988-89) 12 QLCR 219 the Court had before it a question, also under s.11(1)(vii) of the Valuation of Land Act 1944 as to whether the land was

used exclusively as a single dwelling-house. The facts of that case were that the land had a dwelling upon it occupied by the appellants as their home, but with a small area used to conduct a real estate business. At p.221 of the decision the Court said, “Here it is agreed that a real estate business is carried on in a part of a residence and in no way can it be suggested that this use is incidental to a residential use.” I would characterise the issue in this case as being concerned with whether the usage was incidental in terms of the second use of the word in my classification, that is being within reasonable contemplation of what a residential usage might be. The Court found on the facts that the usage was strictly non-residential in nature. Unfortunately, the judgment provides no further facts as to what was involved in the carrying on of the real estate business on the land. However, it appears to have been the sole location of the business though no doubt the landholders would have attended at a variety of locations as part of the conduct of that business.

The same provision of the Valuation of Land Act was considered in the matter, Appeal Against Determination of Valuer-General - Beaudesert Shire (Curtis) (1979) 6 QLCR 83 where the appellant sought the protection of s.11(1)(vii) of the Act in that she claimed to conduct a grazing business exclusively on the land. Evidence revealed, however, that her husband conducted his practice as an accountant also in the house and the question for the Court was whether the exclusive use requirements of the provision were satisfied. The judgment of the Court includes this summary of the relevant facts at p.86:

“         Mr and Mrs Curtis with their family reside in the brick residence on the

property. In addition to assisting in running the grazing activities Mr Curtis has continued to practise his profession as an accountant. He maintains an office in the house where he has his telephone, typewriter, adding machine, accounting machine, filing cabinet and storage space. He has ceased to do taxation work and specialises in auditing, mainly local authority audits and some private companies. He could not be really precise as to the extent of these activities but it would seem, dealing in averages as far as possible, that he is occupied on an average up to two and a half days per week with his accounting business. It is the main source of family income. He visits his clients’ premises and works in space made available by them. As to the use of his office at home he can be no more precise than saying its use would not amount, on an average, to more than 1 day per fortnight except for phone calls.”

This case is of particular interest in that firstly the Court rejected the landowner’s argument that the use of part of the property for his accountancy practice did not detract from classification of the land as being used exclusively for the business of primary production and in so doing said this about that argument:

“In A.P.M. Forests Proprietary Limited v. The Valuer-General (1975) 2 Q.L.C.R.

30 at p 37 I said ‘On present advice the degree of “exclusiveness” invoking the sub-section must be absolute’. In the intervening period I have heard  no argument to change my mind. In the subject case it was submitted that the amount of work performed by Mr Curtis in the office in the house was no more than that which would be performed by an accountant who had his office in town and who occasionally took surplus work home to attend to at night.  I do not

think that this is the test or a reasonable interpretation of the facts. The real point is that the only office or base for Mr Curtis’ accounting business is the office in the house on the subject property. It is akin to a registered office, if registration of a fixed address of a firm, was required. It is his point of telephonic and other communication. No doubt his accounts emanate from this office and it would be the address for payment. It is in effect, an integral and important part of his accounting business equally as much as if it were an office maintained in a town or city.”

Now it will be noted that the word “exclusively” applies to both “the business of primary production” and the use of the land “for purposes of a single dwelling-house”, yet at p.87 of the judgment the Court concluded that the land should be valued for its highest and best use for residential purposes, that is a single rural homesite. The Court held that any enhancement in value from further subdivision must be excluded as is required when a parcel of land is brought under the protective provision of s.11(1)(vii) whether under the limb of being used for the business of primary production or for residential usages. The learned President in his judgment did not expressly refr to a question as to whether the use of part of the property as an accountant’s office had any impact on the issue as to whether the land was exclusively used for residential purposes. I can only conclude that whilst the President saw such usage as taking the property outside an exclusive use of the business of primary production, it did not impact upon a classification of the usage of the property as being exclusively residential. Whilst there are comparable factual similarities between the case cited and the subject case, I do not see Curtis as being so close in fact as to determine the matter. I have had broad reference only to this case and to Jones, the matter finally turning on the facts before me.

For my part, I would say that the preponderance of evidence points to the business use of the subject property being collateral and not being an expected or reasonable use of a residence, to use my classification. The subject property was clearly his business base. The appellant has the task of adducing suitable evidence in support of his appeal and of advancing relevant argument. Understandably, Mr O’Rourke fell short in both areas.

In the result, the appeal is dismissed.

RP SCOTT MEMBER OF THE LAND COURT