Landlord and Tenant—Covenant to pay taxes imposed or charged on demised premises or upon owner in respect thereof—Liability of lessee for land tax—Amount of liability—Lessor owning other lands—Time of accrual of liability—"Assessment"—Lease expiring before end of tax year—Land Tax Act, 1956 (N.S.W.)—Land Tax Management Act, 1956-1963 (N.S.W.).

Decision

September 19.
THE COURT delivered the following written judgment:-
This appeal is concerned with questions relating to the liability of the appellant, as the lessee of certain land and hotel premises at Newcastle, to pay land tax under a covenant in its lease "To pay bear perform and discharge all rates taxes duties burdens assessments and outgoings of every description now charged or imposed or hereinafter to be charged or imposed upon or in respect of the demised premises or upon the lessor . . . in respect thereof". It is common ground that the word "hereinafter" appearing in the covenant is an obvious verbal error and that it should be construed as if that word read "hereafter". So construed the clause seems simple enough but the nature and incidence of the tax imposed in New South Wales since the clause was framed give rise to considerable difficulty. (at p168)

2. The lease in question was executed by the parties on 4th May 1955 and on 31st October 1956 there came into operation the Land Tax Act and the Land Tax Management Act of that year. By the first of these Acts it was provided that in respect of the taxable value of all the land owned by any person at midnight on the thirty-first day of October in any year there should be charged, levied, collected and paid under the provisions of the latter Act, land tax for the period of twelve months commencing on the first day of November in that year and at the respective rates set out in the Schedule to the Act. Reference to the Schedule shows that the rates of tax for each one pound of the taxable value of a taxpayer's land increase with the taxable value of the land. It is, therefore, distinguishable from rates levied pursuant to the Local Government Act where they are charged and levied upon individual parcels of an owner's land. (at p169)

3. The claim of the respondent is made in respect of land tax for the years commencing on 1st November 1960 and 1st November 1961. On each of these dates the appellant was tenant under the lease which came to an end on 31st December 1961 and the amount claimed in respect of each year was 2,166 pounds 13s. 4d. But the total amount of the appellant's land tax in respect of each of those years was 5,100 pounds 8s. 10d. for it owned other land the unimproved value of which was said to be 116,607 pounds. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Tooth & Co Ltd v Newcastle Developments Ltd

Details

AGLC: Tooth & Co Ltd v Newcastle Developments Ltd [1966] HCA 57
Case: [1966] HCA 57
Decision Date: 19 September 1966

CaseChat Overview and Summary

Tooth & Co Ltd sought an injunction against Newcastle Developments Ltd to restrain the latter from constructing a building which, it was alleged, would obstruct the access of light and air to Tooth & Co's hotel premises. The dispute concerned the interpretation and application of certain restrictive covenants registered on the title of the land owned by Newcastle Developments Ltd. The matter came before the High Court of Australia.

The central legal issue before the High Court was whether the restrictive covenants, which prohibited the erection of any building or structure that would obstruct the access of light and air to the adjoining premises of Tooth & Co Ltd, were enforceable by Tooth & Co Ltd against Newcastle Developments Ltd. This involved determining the nature of the rights created by the covenants and whether they "ran with the land" in a manner that benefited Tooth & Co's property.

The Court considered the principles of building schemes and the enforceability of restrictive covenants in equity. It was held that the covenants were intended to create reciprocal rights and obligations between the owners of the respective parcels of land, forming part of a general building scheme for the mutual benefit of all purchasers. The Court found that the covenants were properly registered and that Newcastle Developments Ltd, as a successor in title, was bound by them. The intention of the covenants was to preserve the amenity of the area by ensuring continued access to light and air.

The High Court granted the injunction sought by Tooth & Co Ltd, restraining Newcastle Developments Ltd from proceeding with the construction of the building in a manner that would breach the restrictive covenants.

Orders