Antegra Pty Ltd v Chief Commissioner of State Revenue

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 CPT Manager Ltd v Broken Hill City Council [2010] NSWLEC 69 Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 Fisk v Chief of Defence Force (No 2) [2017] FCA 1490 Grain Growers Ltd v Chief Commissioner of State Revenue [2015] NSWSC 925 King v Commissioner of State Revenue [2019] VCAT 1169 Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9; (2017) 104 ATR 420 Perry Properties Ltd v Chief Commissioner of State Revenue (2013) 85 NSWLR 240; [2013] NSWCA 274 Prowse v McIntyre (1961) 111 CLR 264; [1961] HCA 79 R v Brown [1996] 1 AC 543 Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue of the State of New South Wales (2011) 245 CLR 446; [2011] HCA 41 Taylor v The Owners - Strata Plan No.11564 (2014) 253 CLR 531; [2014] HCA 9 Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773; (2018) 108 ATR 63 Texts Cited: Community Land Development Bill 1989 (NSW) Explanatory Note, Community Land Management Bill 1989 (NSW) New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 18 September 2013 at 23730 Pearce, Statutory Interpretation in Australia (9th ed, 2019, LexisNexis) Pearce and Geddes, Statutory Interpretation in Australia (7th ed, 2011, LexisNexis) Perry Herzfeld and Thomas Prince, Interpretation (2nd ed, 2020, Thomson Reuters) Residential (Land Lease) Communities Bill 2013 (NSW) Revenue Ruling LT 071 (guideline version 1) Revenue Ruling LT 071v2 (guideline version 2) Revenue Ruling LT 071v3 (guideline version 3) State Environmental Planning Policy No 36 - Manufactured Home Estates (NSW), cl 8 Category: Principal judgment Parties: Antegra Pty Ltd (First Plaintiff) Dominico Capitani (Second Plaintiff) Josephine Grace Carmel Capitani (Third Plaintiff) Chief Commissioner of State Revenue (Defendant) Representation: Counsel: A Rider (Plaintiffs) K Lord (Defendant)

Solicitors: Dentons (Plaintiffs) Crown Solicitor's Office (Defendant) File Number(s): 2019/232538 Publication restriction: Nil.

Judgment

1. PAYNE JA: The plaintiffs, Antegra Pty Ltd (Antegra), Dominico Capitani and Josephine Capitani are the proprietors of land at Leppington. In 2007, the plaintiffs purchased the land, which had been used as a caravan park, subject to development consent which had been granted to construct a manufactured home estate.
2. In July 2008, the relevant consent authority approved a community plan subdivision of the plaintiffs' land to create 225 community development lots and one community property lot under the provisions of the Community Land Development Act 1989 (NSW).
3. Over the relevant years 2015 to 2018, the plaintiffs' land was subdivided, and manufactured homes were gradually placed on each of the separate community development lots. The purchasers of the manufactured homes entered into lease agreements with the plaintiffs for 99 year lease terms, subject to the various rights retained by the plaintiffs to bring the leases to an end if redevelopment for the purposes of the mooted South West growth corridor was permitted by the NSW Government.
4. Each of the separate community development lots was assessed as liable for land tax in the 2016, 2017 and 2018 land tax years. The plaintiffs sought, and were refused, an exemption in the 2016, 2017 and 2018 land tax years from land tax under s 10Q of the Land Tax Management Act 1956 (NSW). It is the application of this section which is the subject of this case.
5. The plaintiffs initially sought a review of the following assessments issued by the Chief Commissioner (the Commissioner): 1. Land Tax Assessment Notice (ID 1696733375) issued by the defendant to the plaintiffs on 14 October 2019, which reassessed land tax of $76,025.05 on the plaintiffs' land at Leppington, NSW owned as at 31 December 2015 for the 2016 land tax year (2016 reassessment) (unless the Court found that the 2016 reassessment was invalid under s 9(2) of the Taxation Administration Act 1996 (NSW)); or 2. Land Tax Assessment Notice (ID 1641703689) issued by the defendant to the plaintiffs on 26 October 2016, which reassessed land tax of $47,675.90 on the plaintiffs' land owned as at 31 December 2015 for the 2016 land tax year (2016 assessment) (if the Court found that the 2016 reassessment was invalid under s 9(2) of the Taxation Administration Act); and 3. Land Tax Assessment Notice (ID 1696733375) issued by the defendant to the plaintiffs on 14 October 2019, which reassessed land tax of $215,270.55 on the plaintiffs' land owned as at 31 December 2016 for the 2017 land tax year (2017 reassessment) (unless the Court found that the 2017 reassessment was invalid under s 9(2) of the Taxation Administration Act); or 4. Land Tax Assessment Notice (ID 1678299932) issued by the defendant to the plaintiffs on 2 October 2018, which assessed land tax of $179,811.20 on the plaintiffs' land owned as at 31 December 2016 for the 2017 land tax year (2017 assessment) (if the Court found that the 2017 reassessment was invalid under s 9(2) of the Taxation Administration Act); and 5. Land Tax Assessment Notice (ID 1678299932) issued by the defendant to the plaintiffs on 2 October 2018, which assessed land tax of $295,426.20 on the plaintiffs' land owned as at 31 December 2017 for the 2018 land tax year (2018 assessment).

Relevant facts

1. There was no disagreement at the trial about the principal facts. The affidavits read were those of Vanessa Walsh affirmed 26 July 2019 with exhibit VW-1, Bernard McCool affirmed 13 July 2020 with exhibit BM-1 and 6 October 2020 with exhibit BM-2 [1] and Ryan McGowan affirmed 24 August 2020 with exhibit RAJM-1. There was a limited cross-examination of Mr McCool. No credit submission was made about his evidence. Whilst I accept that Mr McCool gave evidence honestly, other than to the extent that his evidence annexed relevant documents, I gave little weight to his subjective views about what he regarded as the relevant issues. Those views were apparently based on assumptions, that were not made out, about the correct operation of the statute. Whilst no doubt sincerely expressed, Mr McCool's subjective motivations to act as he did and his views about the meaning and operation of the elements contained within s 10Q of the Land Tax Management Act were of little assistance.
2. The relevant entities the subject of these proceedings are: 1. Antegra ACN 080 385 011. Antegra has traded under this name since 13 April 2010. From registration on 13 October 1997 to 13 April 2010, Antegra was known as Transition Resort Holdings Pty Ltd (Transition Resort Holdings); 2. Antegra Management Leppington Pty Ltd ACN 146 588 436 (Antegra Management). Antegra Management is the operator of the property known as the Antegra Estate; and 3. Lepcon Pty Ltd ACN 134 411 706 (Lepcon). Lepcon sold manufactured homes to incoming residents at the Antegra Estate as trustee for the Leppington MHE Construction Unit Trust.

Stages of development

1. On 8 November 2006, Liverpool City Council (the Council) approved the redevelopment of an existing caravan park at Lot 13 DP 707337, Camden Valley Way, Leppington NSW (the Development Site), for "256 manufactured home sites and associated amenities and recreational facilities, car parking, landscaping, internal roadways, acoustic mound and site works".
2. On 31 July 2007, Antegra, Dominico and Josephine Capitani purchased the Development Site. Antegra owns a two-thirds share of the Development Site as a joint tenant with Dominico and Josephine Capitani, who together own a one-third share as tenants in common.
3. On 27 September 2007, the Council approved a modification to the 2006 development consent to reduce the number of approved manufactured home sites from 256 to 225. The application to modify the development consent was made under former s 96 of the Environmental Planning and Assessment Act 1979 (NSW) (since renumbered as s 4.55).
4. On 24 July 2008, the Council approved a community plan subdivision of land at the Development Site to create 225 community development lots and one community property lot under the provisions of the Community Land Development Act. I will return to the importance of this issue in detail below. The approval was given in accordance with cl 8 of the State Environmental Planning Policy No 36 - Manufactured Home Estates. Clause 8 relevantly provided: 8 Subdivision of manufactured home estates (1) Land on which development for the purposes of a manufactured home estate may be lawfully carried out (whether or not because of a development consent granted pursuant to this Policy) may be subdivided: (a) under s 289K of the Local Government Act 1919 for lease purposes, or (b) under the Community Land Development Act 1989, only with the development consent of the council. …
5. On 25 July 2008, the Council approved the operation of a manufactured home estate with up to 225 dwelling sites on the Development Site. The approval was given under s 68 of the Local Government Act 1993 (NSW), subject to conditions which, among other things, modified the operation of the Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 2005 (NSW) in relation to the Development Site.
6. On 29 June 2010, the Council approved modifications to the 2006 development consent and the 2008 subdivision consent to allow, relevantly, for the staged redevelopment of the Development Site.

Entry on the register of residential parks

1. On or before 12 December 2011, the plaintiffs' land was entered on the residential parks register maintained under the Residential Parks Act 1998 (NSW).
2. On 1 November 2015, the Residential Parks Act was repealed and the Residential (Land Lease) Communities Act 2013 (NSW) (the RLLC Act) commenced. The plaintiffs' land was taken to be registered under the register of communities required to be kept under s 14 of the RLLC Act: see cl 4(1) of Sch 2 to that Act. The plaintiffs' land remains on the register of communities under the name "Antegra Leppington" and with the address "1 Antegra Drive, Leppington NSW".

Structure of transactions regarding the manufactured homes on the plaintiffs' land

1. The residents of manufactured homes sited on the community development lots do not own the land on which their manufactured home is situated. Each of the original residents purchased the homes, designed to be movable, from Lepcon as trustee for the Leppington MHE Construction Unit Trust.
2. Antegra, Dominico and Josephine Capitani retain ownership of each parcel of land and lease the land to the residents under 99 year lease agreements. In each agreement, Antegra, Dominico and Josephine Capitani are the lessors. Annexure A to the standard lease agreement comprises a "Standard Form Residential Site Agreement" (the site agreement). Antegra, Dominico and Josephine Capitani are parties to the site agreement. Antegra Management is also a party to the site agreement and is identified as the "operator" of the Antegra Estate.
3. The leases are registered. Residents agree to pay a site fee, as rent, to Antegra Management on a weekly, fortnightly or monthly basis. The manufactured homes are not subject to stamp duty and the owners receive 100% of the proceeds of sale when they leave or re-sell.
4. Under the site agreement, Antegra Management is required to maintain the residential site, common areas, mail facilities and all services and facilities required by the development consent to be available for the life of the community.
5. It is apparent that the plaintiffs adopted this structure to maintain ownership of the land against a background of the possible future redevelopment of the entire area as part of the mooted South West growth corridor. For that reason, the plaintiffs needed to assure the Council that the proposed subdivision would not lead to fragmentation of landholdings (other than on paper), potentially impeding development as part of that growth corridor. I also accept that at least part of Mr McCool's subjective purpose in effecting the community title subdivision was to allow for the creation of leases that extended for greater than 20 years. This would no doubt have increased the value to the plaintiffs of the relevant sales of manufactured homes and attendant lease values, whilst maintaining the option value of the land should the mooted South West growth corridor be approved and redevelopment of the site become viable within that period.

Challenged assessments

1. The relevant assessments of land tax in this case were based on what the Valuer General had done under the Valuation of Land Act 1916 (NSW).
2. The Valuer General valued the separate parcels by reference to the property identification numbers of the individual parcels as they were created by subdivision. Those land values were taken by the Commissioner and applied in issuing an assessment in each of the tax years which was comprised of calculations based on an aggregation of the land tax taxable value of each of those individual parcels of land: 1. In the 2016 reassessment (which is the relevant assessment for the purposes of this case), the supporting information identified 41 separate parcels of land and identified a separate land tax taxable value for each, for the purposes of calculating an aggregated taxable land value, to which land tax was applied in accordance with the formula in the Land Tax Management Act. 2. In the 2017 reassessment (which is the relevant assessment for the purposes of this case), the supporting information identified 137 separate parcels of land and identified a separate land tax taxable value for each, for the purposes of calculating an aggregated taxable land value, to which land tax was applied in accordance with the formula in the Land Tax Management Act. 3. In the 2018 assessment, the supporting information identified 225 separate parcels of land and identified a separate land tax taxable value for each, for the purposes of calculating an aggregated taxable land value, to which land tax was applied in accordance with the formula in the Land Tax Management Act. [3]

Expert evidence

1. As I will explain, the expert evidence relied upon by the parties was of little relevance to the issues I must determine. The plaintiffs read the expert report of Michael Dyson dated 10 July 2020, expert report in reply of Michael Dyson dated 23 September 2020 and the joint expert report of Michael Dyson and Gregory Jones dated 30 October 2020. The defendant read the expert report of Gregory Jones dated 24 August 2020.
2. Both experts were property valuers. No challenge was made to their expertise to express the opinions they were asked to express. The experts were instructed to provide their expert opinion about whether the manufactured houses sold at the Antegra Estate could be described objectively as "low cost" accommodation during the 2016, 2017 and 2018 land tax years.
3. Mr Dyson, who was retained by the plaintiffs, concluded that the manufactured houses at Antegra Estate comprised "low cost" accommodation because: 1. the selling prices of all the dwellings in the calendar years 2016, 2017 and 2018 were significantly below the median price of dwellings (both houses and units) in the Sydney Metropolitan Area; and 2. the rental paid by the lessees of the community development lots was approximately the same as or lower than the rental charged at other mobile housing estates in comparable areas of the Sydney Metropolitan Area.
4. Mr Jones, who was retained by the Commissioner, applied a different valuation methodology. [4] For each year, Mr Jones selected a "subject property" within the Antegra Estate (being a home that had been sold that year) and compared its sale price to the sale price of other properties in the local area outside of the Antegra Estate. Mr Jones calculated the freehold equivalent cost of the subject property, based on local sales evidence, for comparison against the adjusted "Antegra price" of the same property.
5. Mr Jones concluded that the "Antegra price" was above the adjusted price derived from local sales evidence for the calendar year 2018 by 13%, at or about the price derived in 2017 and below the price derived in 2016 by 10%. Mr Jones did not express an opinion as to whether the accommodation at the Antegra Estate was objectively "low cost" accommodation in 2016 by reason of it being 10% below the adjusted sale price of properties in the local area.
6. The joint expert report was dated 30 October 2020. The experts addressed nine substantive issues: 1. Issue one was whether there is a single comparator price data set considered to be the best representation of the market for the accommodation at the Antegra Estate. The experts agreed that sales in the Liverpool Local Government Area provided the best comparable evidence for the sale of dwellings at the Antegra Estate. Whilst Mr Jones considered the "total" category or "all dwelling category" a better representation for the purposes of comparison than either houses or units, Mr Dyson considered that the accommodation at the Antegra Estate was equivalent to a house. I prefer Mr Jones' conclusion. The issue in assessing comparability always involves value judgments of fact and degree. Using the "all dwelling" category of sales in the Liverpool Local Government Area much better aligns as a relevant comparator with the bundle of rights that purchasers of manufactured homes at the Antegra Estate acquired. 2. Issue two was whether the median price, or lower quartile price, or some other price point, was the most useful price to compare with the accommodation at the Antegra Estate to determine whether the land was used and occupied primarily for "low cost accommodation". Mr Jones considered that either the median price or the lower quartile price was a useful indicator whilst Mr Dyson considered that the median price was the most useful price. I conclude that the broader approach adopted by Mr Jones provides far more useful information for comparison purposes if I am to determine whether manufactured homes on the plaintiffs' land were objectively providing "low cost accommodation". 3. The experts agreed that the date of the contract was the best date to use for the purpose of benchmarking the sales price for each home: issue three. I accept that agreement. 4. The experts agreed that the transfer duty (applied to the data set property prices) and revised adjustments (applied to Antegra sales) as set out by Mr Jones could be applied: issue four. I accept that agreement. 5. The experts agreed that the purchase price of the land (being land and buildings) could be determinative of whether land is used and occupied primarily for low cost accommodation where the ongoing costs and expenses associated with the land, being the subject of the investigation, are generally similar to the ongoing costs and expenses of the prices (transactions) comprising the comparisons: issue five. I accept that agreement. 6. Issue six was whether the direct comparison approach should be preferred to an approach that compared the cost of accommodation at the Antegra Estate to the median price or lower quartile price of a price data set. The experts agreed that, in theory, the direct comparison approach was more reliable than a medial or lower quartile comparison to a price data set. However, the experts agreed that the direct comparison approach could not be preferred over, or considered superior to, the use of medial or lower quartile indicators in the price data sets considered. I accept that agreement. 7. The experts agreed that the direct comparison approach did not require the compared properties to be identical to produce a reliable result: issue seven. This is self-evidently correct, and the agreement of the experts informs my conclusion in relation to issue one. 8. The experts agreed that the small number of sales contracts in 2018 made data analysis and medial prices unreliable: issue eight. I accept that agreement. 9. Issue nine was whether the expansion of the 2018 Antegra sales data by including resales meaningfully assisted the analysis of the data. Mr Jones considered that the inclusion of the resales (five transactions) did not meaningfully assist in the analysis of the data. Mr Dyson considered that the expansion of the database assisted, although the database was still relatively small at eight properties. I find that the small number of resales should not be taken into account as they do not meaningfully assist in the analysis of the data.

Legislation

1. At all relevant times, s 10Q of the Land Tax Management Act provided: [5] 10Q Low cost accommodation - exemption/reduction (1) Land is exempted from taxation under this Act leviable or payable in respect of the year commencing on 1 January 1995 or any succeeding year if - (a) the land is used and occupied primarily for low cost accommodation, and (b) application for the exemption is made in accordance with this section, and (c) the Chief Commissioner is satisfied that the land is so used and occupied in accordance with guidelines approved by the Treasurer for the purposes of this section. (2) The guidelines may include provisions with respect to the following - (a) the circumstances in which accommodation is taken to be low cost accommodation, (b) the types and location of premises in which low cost accommodation may be provided, (c) the number and types of persons for whom the accommodation must be provided, (d) the circumstances in which, and the arrangements under which, the accommodation is provided, (e) maximum tariffs for the accommodation, (f) periods within which tariffs may not be increased, (g) the circumstances in which the applicant is required to give an undertaking to pass on the benefit of the exemption from taxation (or, if subsection (4) applies, the reduction in taxation) to the persons for whom the accommodation is provided in the form of lower tariffs. (3) A guideline may - (a) apply generally or be limited in its application by reference to specified exceptions or factors, or (b) apply differently according to different factors of a specified kind, or both. (4) If the Chief Commissioner is satisfied that part only of land or premises is used and occupied primarily for low cost accommodation in accordance with the Treasurer's guidelines, the land value of the land is to be reduced for the purposes of land tax in accordance with the principles in section 10R (3)-(3C). (5) This section does not apply to an owner of land in respect of a tax year unless - (a) the owner applies to the Chief Commissioner for the exemption or reduction, in the form approved by the Chief Commissioner, and (b) the owner furnishes the Chief Commissioner with such evidence as the Chief Commissioner may request for the purpose of enabling the Chief Commissioner to determine whether there is an entitlement to the exemption or reduction. (6) Without limiting the other ways in which this section may cease to apply to a person, it ceases to apply to a person if the person breaches an undertaking given as referred to in subsection (2) (g).

Issues to be determined

1. Whilst the plaintiffs in their written submissions raised a number of so-called "preliminary issues" which they asserted needed to be determined first, on the correct construction of s 10Q, most do not arise or arise only peripherally. That is because much of the plaintiffs' case was predicated upon an operation of guideline version 1 in the 2016, 2017 and 2018 tax years which I do not accept. A number of additional issues tendered by the plaintiffs as raised by this application are, upon analysis, subsumed in consideration of the construction issue concerning s 10Q and in the application of guideline versions 2 and 3.
2. The real issues I am required to determine are as follows: 1. the correct construction of s 10Q of the Land Tax Management Act; 2. whether on its correct construction guideline version 1 applied in the 2016, 2017 or 2018 tax years; 3. whether the plaintiffs' land was a "community or residential community" within the meaning of the RLLC Act in the 2016, 2017 or 2018 or all tax years. This includes consideration of the issue whether each of the lots comprising the plaintiffs' land qualified for an exemption from land tax under guideline version 2 in the 2016 and 2017 tax years and under guideline version 3 in the 2018 tax year; and 4. whether further remissions of interest should be granted.

Principles of construction

1. The relevant principles of construction were not controversial on the appeal. The meaning of words and phrases is influenced by the immediate context in which they are used. The meaning of the whole may be different to the sum of the meaning of the parts: Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 at 396-397 (Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ) quoting Lord Hoffmann in R v Brown [1996] 1 AC 543 at 561.
2. The modern approach to statutory interpretation uses "context" in its widest sense "to include such things as the existing state of the law and the mischief which, by legitimate means … one may discern the statute was intended to remedy": CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ).
3. Those "legitimate means" include any material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act, including all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer: Interpretation Act 1987 (NSW), s 34(2)(a). A construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object: Interpretation Act, s 33.
4. In Taylor v The Owners - Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 French CJ, Crennan and Bell JJ said at [39]: "[39] …the task remains the construction of the words the legislature has enacted. In this respect it may not be sufficient that 'the modified construction is reasonably open having regard to the statutory scheme' because any modified meaning must be consistent with the language in fact used by the legislature. Lord Diplock never suggested otherwise. Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd, the language of a provision will not admit of a remedial construction. Relevant for present purposes was his Honour's further observation, '[i]f the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances'." (Footnotes omitted.)

Construction of the guidelines

1. Although this question was not squarely addressed in the parties' written submissions, I granted leave to supply references to cases where the proper interpretation of guidelines such as those here engaged was considered. Both sides took up that opportunity.
2. A convenient starting point in considering this issue is Pearce, Statutory Interpretation in Australia (9th ed, 2019, Lexis Nexis), where the observation is made at [1.2] that: "… A governor may issue a proclamation, a minister an order, a departmental officer a rule or an instrument of delegation. These are all commands of various kinds that will have to be complied with. While they may be regarded strictly as executive orders rather than legislation, it is difficult to draw a line between the two. The courts will, in any case, endeavour to ascertain the meaning of a document, whether it is legislative or executive in origin, by adopting broadly the same approach. … Government-related documents that are not legislative in character but which are nevertheless intended to influence decision-making, such as sets of standards and guidelines, are commonly designated 'soft law'. Despite the non-legislative nature of such documents, many of the interpretive principles that are discussed in this book are applied in their interpretation."
3. Herzfeld and Prince, Interpretation (2nd ed, 2020, Thomson Reuters) states on this topic at [16.10]: "Even if an instrument is of a non-legislative character, if it is made under or given force by statute the principles which apply to its interpretation are likely to be similar to those applicable to the interpretation of legislation [City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426; [2006] FCA 813, [53] (French J) (industrial award); Channel Seven Brisbane Pty Ltd v Australian Communications and Media Authority (2014) 227 FCR 162 (FC), [52]-[53] (Mortimer J) (industry code of conduct); Fisk v Chief of the Defence Force (No 2) [2017] FCA 1490, [29]-[41] (Perry J) (instrument of delegation); Sandalwood Properties Ltd v Huntley Management Ltd (2018) 131 ACSR 215]."
4. Each party urged me to apply the ordinary principles of statutory interpretation in construing the guidelines. A number of cases from related areas were referred to by the parties in the case references supplied after the hearing. For example: 1. Instruments of delegation must be construed in accordance with ordinary principles of statutory construction, including applicable statutory provisions: Fisk v Chief of the Defence Force (No 2) [2017] FCA 1490 at [29], [32] (Perry J). 2. Commercial tariff concession orders should be considered as a species of delegated legislation. The general principles relating to the interpretation of Acts of Parliament are equally applicable to the interpretation of delegated legislation: "To use the words of Dixon J, 'subordinate or delegated legislation ... [stands] on the same ground as an Act of Parliament and [is] governed by the same rules of construction'." [7] 1. Development control plans have been interpreted in accordance with the normal principles of statutory construction, that is, by reference to their text, context and purpose: see CPT Manager Ltd v Broken Hill City Council [2010] NSWLEC 69 at [171]-[173] (Craig J).

Issue 1 - correct construction of s 10Q of the Land Tax Management Act

1. The first issue to be determined is the correct construction of s 10Q of the Land Tax Management Act. Some background needs to be sketched. Land tax is levied on the taxable value of all land in NSW owned by the taxpayer at midnight on 31 December immediately preceding the year for which the land tax is levied which is not exempt from taxation: see ss 7, 8 and 9(1) of the Land Tax Management Act; Perry Properties Pty Ltd v Chief Commissioner of State Revenue (2013) 85 NSWLR 240; [2013] NSWCA 274 at [5]; Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 at [34].
2. Land tax is levied on particular "parcels" of land. As Barrett AJA (with whom Macfarlan and Ward JJA agreed) explained in Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11; (2017) 105 ATR 11 at [11] fn 4: "In general land tax is assessed and the applicability of exemptions is determined according to parcels taken into account by the Valuer General."
3. White J, as his Honour then was, explained in much more detail why this was so in Ferella. Given the plaintiffs' complaint in this case about the reference in guideline versions 2 and 3 to "parcels" of land, his Honour's explanation of the mechanical aspects relating to the assessment of land tax should be set out at length: "[34] Land tax is levied on the taxable value of all land in New South Wales owned by the taxpayer at midnight on 31 December immediately preceding the year for which the land tax is levied which is not exempt from taxation (Land Tax Management Act 1956 (NSW), s 9(1)). The taxable value of the land on which land tax is payable is calculated by reference to an average of land values entered in the Register of Land Values kept under s 14CC of the Valuation of Land Act 1916 (NSW) (Land Tax Management Act, ss 9(2), (3) and (4), 9AA and 3). Section 14A of the Valuation of Land Act requires the Valuer-General to ascertain each year the land value of each parcel of land in New South Wales other than Crown lands and land in the Western Division that is not within the area of a rating or taxing authority (s 14A(1)). Section 14A(4) provides that the Valuer-General may separately value different parts of the same parcel of land. Land values are to be entered in the Register of Land Values. If different parts of the same parcel of land were valued differently, separate land values for the different parts would be required to be entered in the Register. That did not happen in this case. A single land value for the entire parcel of land was entered in the Register. For the purposes of the Land Tax Management Act, the land value of the parcel was determined by the average of the land values for the land tax years in question and the two preceding years."

Issue 2 - application of relevant guidelines to tax years - does guideline version 1 apply to the 2016, 2017 or 2018 tax years

1. Guideline version 2 applies in the 2016 and 2017 tax years and guideline version 3 applies in the 2018 tax year. The text, context and purpose of the guidelines demonstrates why this is so.
2. So far as the text of guideline version 1 is concerned, it refers to a "residential park to which the Residential Parks Act 1998 applies." Two critical matters should be noticed. First, the Residential Parks Act which was repealed during 2015 was not in force at midnight on 31 December 2015 being the relevant taxing date for the 2016 tax year. Guideline version 2 was issued on 17 December 2015 and was expressed to apply from 1 January 2016. The text does not support a conclusion that guideline version 1 was to apply for the purposes of the 2016 tax year when a replacement version of the guideline had been issued which addressed the new legislative regime. Secondly, guideline version 1 refers to a residential park to which the Residential Parks Act applies. The use of the present tense is significant.
3. So far as context is concerned, the repeal of the Residential Parks Act and the enactment of the RLLC Act is significant. That matter tends strongly in favour of guideline version 2 applying in the 2016 and 2017 tax years. Guideline version 2 refers to land which is or includes a "community or residential community within the meaning of the [RLLC Act]" (emphasis added).
4. An additional matter of context is that the guidelines issued to date under s 10Q fall into two broad categories: 1. Guidelines for boarding houses and for low cost rental accommodation. Those guidelines and rulings are replaced annually with a different numbered ruling as maximum tariffs change from year to year. Those rulings specify that the guidelines apply for a particular tax year and provide that they are "effective from" 1 January of that year and "effective to" 31 December of that year. 2. The guidelines for residential parks in guideline versions 1, 2 and 3. Those guidelines do not provide for maximum tariffs and their application is not limited, at least necessarily, to a single land tax year. Guideline version 1 applied for several years.
5. So far as purpose is concerned, it is clear on the face of the guidelines, following Perry Properties, that guideline version 2, as approved by the Treasurer, was intended to be a statement of policy binding on the Commissioner and taxpayers. It makes little sense to construe that policy as applying a test by reference to an Act which has been repealed.

Validity of the guidelines

1. As I have said, there were several aspects of the plaintiffs' submissions raising what were described as "preliminary" issues which tended to confuse rather than illuminate. There were a few respects in which it was said that the guidelines were invalid. That argument fails at the first hurdle. Paragraph 33 of Perry Properties makes clear that the ultra vires argument advanced by the plaintiffs in this case must also fail: "[33] Adopting this construction of s 10Q, the appellant's arguments as to the guidelines being beyond power, in the various ways those arguments have been put, must be rejected. They depend upon the purpose of the guidelines being to give guidance to the Chief Commissioner in being satisfied that land is used and occupied primarily for low-cost accommodation. That is not the purpose of the guidelines."
2. Essentially the same argument as that described in Perry Properties was made here. It was submitted that if the Court concluded that the guidelines were invalid, it followed that the Court (standing in the shoes of the Commissioner) was free to conclude that the plaintiffs' land was used and occupied primarily for low cost accommodation. I reject that submission.
3. I also reject the plaintiffs' submission that guideline version 2 or guideline version 3 are invalid in whole or in part in purporting to restrict the exemption available under s 10Q to a "parcel of land", to the extent that this term means something other than an "area of land" which is or includes a "community or residential community" under the RLLC Act. As I have explained at [89]-[94] above, a central feature of the system of land tax is the identification of parcels of land to which land tax is charged and, if it were available, the exemption would be applied. It is not only permissible but logical and correct that the guidelines binding the Commissioner about the operation of the exemption should do so by referring to parcels of land which is the way the Commissioner is required to tax the land and to which an exemption, if it is available, is to be applied: see Ferella; Metricon; Adams Bidco Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 702. There is no inconsistency, let alone an inconsistency going to the validity of the guidelines, between the language of s 10Q ("area of land") and the language of "parcel of land" used in the guidelines approved by the Treasurer.

All the parcels of land should be aggregated

1. The plaintiffs submitted, in the alternative, that all of the separate parcels of their land at Leppington comprised a "parcel of land" for the purposes of guideline versions 2 and 3, because all of the separate parcels of land factually (and physically) comprised "an area of land on which manufactured homes have been, are or are to be placed".
2. I reject the plaintiffs' submission. It is, factually and legally, incorrect. It is clear from the analysis in the cases that the "parcels of land" referred to in guideline versions 2 and 3 are those upon which land tax is imposed and about which the s 10Q exemption is sought.
3. I have set out at [88]-[94] the legal framework for the imposition of land tax. Legally, land tax is imposed on each separate community development lot here engaged. The exemption sought is one applying to each separate community development lot here engaged. The same is true factually. Land tax was imposed on each separate "parcel of land" owned by the plaintiffs and not the aggregated sum of all of the plaintiffs' separate community development lots: see the factual findings at [38] above.

"Low cost accommodation"

1. A great deal of the written submissions and the evidence was taken up with the plaintiffs' submission that the question of whether land is used and occupied primarily for "low cost accommodation" under s 10Q(1)(a) is determined by: 1. the type of accommodation provided; and 2. the type of persons who primarily use and occupy the accommodation provided on the land (e.g. persons with low incomes in boarding houses and "retired persons" in a "residential park" or "community or residential community" comprising a "manufactured home estate").
2. I do not agree. Whilst it is correct that objectively the land the subject of exemption under s 10Q must be "low cost accommodation", Perry Properties establishes that the guidelines approved by the Treasurer are a statement of policy binding on the Commissioner and the plaintiffs on this topic.
3. Thus, the plaintiffs' submission that land will objectively be used and occupied for "low cost accommodation" under s 10Q(1)(a) if it is a "residential park" or "community or residential community" comprising a "manufactured home estate" primarily used and occupied by "retired persons" must be rejected. The plaintiffs submitted that neither the Land Tax Management Act nor the guidelines prescribe a "bright line" dollar amount for determining when "accommodation" in "residential parks" is "low cost". So much may be accepted. That rather emphasises the point that the plaintiffs, in order to succeed, must establish that they comply with the relevant guidelines approved by the Treasurer for the application of the exemption.
4. As I have said, however, I am prepared to proceed on the assumption that the plaintiffs' land is properly to be considered as "low cost accommodation". That assumption does not avail the plaintiffs here.

Issue 3 - whether the plaintiffs' land was a "community or residential community" within the meaning of the RLLC Act in the 2016, 2017 or 2018 or all tax years

Consequences of s 8(1)(b) of the RLLC Act in connection with the operation of the guidelines

1. At the heart of the plaintiffs' case about the operation of guideline version 2 and guideline version 3 was that proposition that: ".. the only relevance of the RLLC Act to Guidelines 2 and 3 is that they adopt some of its definitions, such as "community or residential community", the satisfaction of which is a question of fact."
2. I reject that submission. Paragraph 3 of both guideline version 2 and guideline version 3 refers to land which is or includes a community or residential community within the meaning of the RLLC Act. It is not in dispute that there was a community plan subdivision and accordingly there is a community scheme under the Community Land Management Act as defined in s 3 of that Act.
3. I have found that on each lot in each tax year there was sited only a single freestanding home, or the lot was vacant, or a single home was under construction. I conclude that on the correct construction of guideline version 2 and version 3 each relevant parcel of the plaintiffs' land was not, or did not include, a "community or residential community" within the meaning of the RLLC Act. Each lot was wholly subject to a community scheme for the relevant tax years.
4. As to text, each lot of the plaintiffs' land was not, or did not include, a "community or residential community" within the meaning of the RLLC Act. Section 8 of the RLLC Act has a clear operation in this case. Each lot of the plaintiffs' land was a "place" to which the RLLC Act does not apply. It is not correct, as the plaintiffs' submissions tended to do, to treat definitions contained elsewhere in guideline version 2 and guideline version 3 as divorced from the RLLC Act. The text of guideline version 2 and guideline version 3, in requiring the land the subject of the guideline to be a "community or residential community" within the meaning of the RLLC Act, does not support such a reading of the text.
5. As to relevant context, guideline version 2 and guideline version 3 plainly requires a "community or residential community" within the meaning of the RLLC Act. The guidelines approved by the Treasurer, used to limit the availability of the exemption, have thus fastened upon a description of land available to attract the exemption with a firm statutory basis. In context, the plaintiffs' land fell outside that description because the land is not a "community or residential community" within the meaning of the RLLC Act: see s 8 of the RLLC Act.

The land was not used and occupied in accordance with the guidelines in the 2016, 2017 or 2018 tax years

1. There is an additional reason that the plaintiffs' land is not entitled to exemption from land tax. It will be recalled that paragraph 5 of guideline version 2 provides: "5. This paragraph applies if a parcel of land is used for the purposes of a community and no part of the land is used for another purpose. If more than 50% of the homes on the land are used and occupied by at least one qualifying owner, the land is exempt low cost accommodation under s. 10Q of the LTM Act."
2. Paragraph 5 of guideline version 3 is materially the same.
3. Guideline version 2 and guideline version 3 set out definitions which have the meanings given by the RLLC Act. The definition of "community or residential community" refers to an area of land "that comprises or includes sites on which homes are, or can be, placed, installed or erected for use as residences by individuals, being land that is occupied or made available for occupation by those individuals under an agreement or arrangement in the nature of a tenancy, and includes any common areas made available for use by those individuals under that agreement or arrangement."
4. That definition, together with the definition of "home", has the effect that a "community" (being the term used in the rulings) includes a "manufactured home estate", which is defined in the Dictionary to the Local Government Act to mean "land on which manufactured homes are, or are to be, erected."
5. I have concluded that it is significant that the definition of "community or residential community" consistently refers to "sites", "homes", "residences" and "individuals" in the plural. Similarly, the definition of "manufactured home estate" requires that there be "homes". The general concepts of a community or an estate also indicate that there are expected to be multiple dwellings on the land.
6. Guideline version 2 and guideline version 3 require that there be more than one home on the subject land. In respect of each parcel of land in respect of which an exemption was sought, at the relevant taxing point for each tax year the circumstances were one of the following: 1. only a single freestanding home was located on the parcel. In that case, the single home did not constitute a "manufactured home estate" and a "community" as described in the guidelines; or 2. a single freestanding home was being constructed on the parcel. As a preliminary matter, until there is a completion certificate, a structure is not available for occupation. Paragraph 9 in guideline version 2 and guideline version 3 requires the operator to prove that the site is available for occupation. Without the completion certificate that is not possible. Again, a single home does not constitute a "manufactured home estate" and a "community". In the absence of a completion certificate, the land was not "occupied or available for occupation" as required by the definition of "community or residential community". Further, paragraph 9 of guideline version 2 (for the 2016 and 2017 tax years) could not apply as the operator could not permit the site to be used by homeowners in the absence of a completion certificate. For the 2018 tax year paragraph 9 of guideline version 3 would similarly not apply; there also was not an existing home that was temporarily unoccupied; or 3. the land was vacant. That land was not "occupied or available for occupation" as required by the definition of "community or residential community". Similarly, paragraph 9 of guideline version 2 and guideline version 3 could not apply.

The land was not a "residential park" to which the "Residential Parks Act 1998 applies" in the 2016, 2017 or 2018 tax years

1. Even if I had concluded that guideline version 1 applied in the 2016 tax year (or in any later year), that would not avail the plaintiffs. Guideline version 1 refers to a "residential park to which the Residential Parks Act 1998 applies."
2. The Residential Parks Act was repealed on 1 November 2015. Paragraph 1 in Appendix A of guideline version 1 identifies the subject matter of the guideline as being the "residential park to which the Residential Parks Act 1998 applies …" (emphasis added).
3. After 1 November 2015, the Residential Parks Act no longer "applies" to any property. Even making all the other assumptions favourable to the plaintiffs, there was no "residential park to which the Residential Parks Act 1998 applies" on 31 December 2015 or on 31 December 2016 or on 31 December 2017.
4. The savings provisions in Sch 2 to the RLLC Act do not assist the plaintiffs. The use and occupation of a particular parcel of land was not a circumstance created under the repealed Residential Parks Act immediately before its repeal. There is nothing in the savings provisions of the Residential Parks Act that provides the repealed Act with an application to future events. The transitional provisions preserve rights or even things that existed at the time of the repeal, but do not go beyond that. That outcome is consistent with s 30 of the Interpretation Act, which is designed to preserve rights as they existed at the time of the repeal, but not to provide that the Act should continue to apply beyond that preservation of rights. [9] No submission was advanced by the plaintiffs that an accrued right to rely on guideline version 1 existed.
5. Even if, contrary to my earlier conclusions, guideline version 1 continued to apply in any one of the relevant tax years, a "residential park" within the meaning of the Residential Parks Act (which includes a manufactured home estate) requires more than a single manufactured home. Throughout guideline version 1, the references to "retired persons" and "residential site agreements" are in the plural, which reflect the intention that there be more than one manufactured home or other moveable dwelling on the subject land, which, it will be recalled, refers to each separate parcel of land.

Issue 4 - remission of interest

1. The plaintiffs also sought a remission of interest. The position at 14 October 2019 (the date of the 2016 and 2017 reassessments) was as follows: 1. for the 2016 tax year - no interest was charged. Interest of $267.80 was paid to the plaintiffs; 2. for the 2017 tax year - interest of $36,319.57 was charged but remitted in full; 3. for the 2018 tax year - interest of $22,548.41 had accrued to 14 October 2019. No remission was granted.
2. Interest has been assessed, and continues to accrue, by operation of Part 5 of the Taxation Administration Act, at the sum of the market rate component and premium component: s 22 of the Taxation Administration Act.
3. For the interest to be remitted below that which was imposed, the plaintiffs bear the onus of satisfying the Court that their conduct, considered as a whole, justifies further remission under s 25 of the Taxation Administration Act.
4. I have concluded that the market rate component of interest should not be remitted. In Adams Bidco, Ward CJ in Eq accepted at [163] that the purpose of the market rate of interest is to compensate the revenue for the loss of tax. I agree that an important purpose of the market rate component of interest is to compensate the revenue for not having the benefit of tax payment from the time it was due.
5. I am not satisfied that the circumstances relating to the assessments justify a remission of the market component of interest pursuant to s 25 of the Taxation Administration Act.
6. In particular, I reject the plaintiffs' submission that they were misled when exemption forms were lodged by what are now suggested to be the references in a form to "Appendix A" and thus, it is submitted, guideline version 1.
7. The plaintiffs' objection lodged against the 2016 and 2017 assessments refers only to guideline version 2 and guideline version 3.
8. The plaintiffs' summons filed on 26 July 2019 referred only to guideline version 2. [10] The plaintiffs' appeal statement filed on 12 August 2019 was predicated on the use and occupation of the land satisfying guideline version 2. [11]
9. I am not satisfied that the plaintiffs were misled when exemption forms were lodged by what are now suggested to be the references in a form to "Appendix A".
10. In Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19; (2004) 56 ATR 82 at [62], four non-cumulative criteria were suggested as being relevant to remission of the premium component: 1. all principal tax that is owing and not in dispute has been fully paid; 2. there has been co-operation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments; 3. such co-operation has occurred prior to any investigation being commenced by the Commissioner, or, at the very least, within a reasonable time after a request for information had been made by the Commissioner; and 4. there has been no wilful default by the taxpayer in not paying tax on time.

Conclusion and orders

1. For the foregoing reasons I have concluded that the plaintiffs failed to discharge the onus they bore and that the reassessments for the 2016 and 2017 tax years and the assessment for the 2018 tax year should be affirmed. The orders of the Court are: 1. The plaintiffs' amended summons is dismissed; 2. The reassessment for the 2016 tax year (ID 1696733375), the reassessment for the 2017 tax year (ID 1696733375) and the assessment for the 2018 tax year (ID 1678299932) are each affirmed; 3. The plaintiffs are ordered to pay the Commissioner's costs.

Annexure A (234559, rtf) Annexure B (247651, rtf) Annexure C (259559, rtf)

Endnotes

1. Subject to rulings as to admissibility which were made and are set out in MFI 1.
2. On 11 January 2018, lot 236 was converted into lot 1 (the community property lot) such that there were 225 Torrens title lots and one community property lot.
3. It will be recalled that there were 226 community development lots on 31 December 2017 and this was subsequently changed to 225 lots in 2018. Neither party suggested that anything turned on this minor discrepancy.
4. Mr Jones described his approach as the 'Alternate Preferable Approach" at 7.0 of his 24 August 2020 report.
5. The provision has not been amended since 1994.
6. Sections 4 and 8 were amended in 2017 and 2015 respectively, but those amendments related to parts of the sections that are not presently relevant.
7. Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 at 398 (Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ) (Footnotes omitted.)
8. Perry Properties at [29].
9. Pearce and Geddes, Statutory Interpretation in Australia (7th ed, 2011, LexisNexis) at [6.8]-[6.9] and the cases cited therein.
10. An amended summons was filed on 20 April 2020 which referred to all the guidelines, but this does not affect the point being made.
11. An amended appeal statement was also filed on 20 April 2020, but this does not affect the point being made.

Amendments 22 February 2021 - Formatting error in fn 1 fixed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 February 2021