The parties were still unable to resolve the matter and returned to the Tribunal for a final decision. The Tribunal considered the facts as now agreed by the parties and its answer to the preliminary questions posed. The Tribunal decided that the land was being used during the relevant rating years exclusively for charitable purposes. The Tribunal determined that the land should be exempt from rates for those years.

Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2013] WASAT 89

City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [2014] WASCA 104

Retirees WA (Inc) and City of Belmont [2010] WASAT 56

Uniting Church Homes (Inc) and City of Stirling [2005] WASAT 191

1 The applicant is the Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc (RAAFA). The respondent is the City of Mandurah (City).

2 Between January 2009 and November 2011, RAAFA had lodged a series of objections with the City about the City's rate records for the 2008/2009, 2009/2010, 2010/2011 and 2011/2012 rating years (Relevant Rating Years). The objections relate to land belonging to RAAFA and comprising Lots 102, 711 and 212 Oakleigh Drive, Erskine (Land). RAAFA operates a retirement village on the Land known as Erskine Grove (Erskine Grove). RAAFA claims that for each of the Relevant Rating Years the Land was used exclusively for charitable purposes and, pursuant to s 6.26(2)(g) of the Local Government Act 1995 (WA) (LG Act), is not rateable land.

3 On 25 January 2012, the City dismissed RAAFA's objections under s 6.76(1)(a)(ii) of the LG Act. The City's reasons for its decision are set out as follows:

Each of the rating objections lodged by [RAAFA] in relation to [the Property] for the [Relevant Rating Years] BE DISALLOWED pursuant to s 6.76(5) of [LG Act] for the following reasons:

[RAAFA] uses the Land to provide accommodation and services to residents in return for the full cost of so doing;

this use does not constitute a charitable purpose within the meaning of s 6.26(2)(g) of [LG Act]; and

as a result of this, (the Land) is not being used 'exclusively for charitable purposes' within the meaning of s 6.26(2)(g) of [LG Act] and is therefore rateable land.

4 RAAFA applied to the Tribunal on 6 March 2012 for a review of that decision.

5 Part 6, Div 6 of the LG Act contains the provisions that govern the imposition of rates and service charges.

6 Pursuant to s 6.26(1) of the LG Act 'all land within a district is rateable land' except as provided in that section. However, under s 6.26(2)(g), 'land used exclusively for charitable purposes' is not rateable.

7 Section 6.26(6) of the LG Act provides that land does not cease to be used exclusively for a charitable purpose merely because it is used occasionally for another purpose which is of a charitable, benevolent, religious or public nature.

8 Section 6.41(1)(a) of the LG Act provides that a local government is required to give to the owner of rateable land a rate notice stating the date the rate notice was issued and incorporating or accompanied by the details and particulars prescribed.

9 Pursuant to s 6.76(1)(a)(ii) of the LG Act, a person may object to the rate record of a local government on the ground that there is an error in the rate record on the basis that the land or part of the land is not rateable. The local government is to promptly consider any objection and may either disallow it or allow it, wholly or in part: s 6.76(5) of the LG Act.

Any person who is dissatisfied with the decision of a local government on an objection by that person under section 6.76 may, within 42 days (or such further period as the State Administrative Tribunal, for reasonable cause shown by the person, allows) after service of notice of the decision, apply to the State Administrative Tribunal for a review of the decision.

(1) Upon a review by the State Administrative Tribunal under section 6.77 or 6.78, the State Administrative Tribunal may consider ­

(a) grounds in addition to those stated in the notice of objection; and

(b) reasons in addition to any reasons previously given for the local government's decision that is under review.

If the State Administrative Tribunal considers that an order it makes determining a matter coming before it on a reference under section 6.77 or 6.78 is of general interest or significance, it is to prepare written reasons for its order and give a copy of the reasons to each party and publish the written reasons.

13 At a directions hearing before Senior Member McNab on 8 February 2013, the parties suggested that it would assist them if, in advance of the hearing of the review of the City's decision, the Tribunal were to provide its findings in respect of certain 'preliminary issues' which the parties had formulated and which are set out in full later in these reasons. The parties considered that these questions would in any event need to be addressed by the Tribunal as part of its determination of the review application. The parties assured the Tribunal that they would be able to resolve this matter between themselves if the Tribunal provided its answers to those preliminary questions.

14 The Tribunal agreed that it would adopt the approach proposed by the parties and the parties were ordered to file a statement of the preliminary issue.

15 The preliminary questions, as finally agreed between the parties, were expressed as follows:

Could it be concluded that the Land was used exclusively for charitable purposes within the meaning of s 6.26 of (LG Act) by providing relief of the aged if:

1. the total amount paid by residents of Erskine Grove to RAAFA for services provided by RAAFA at Erskine Grove was equal to or greater than the total costs to RAAFA of providing those services (including a reasonable allocation of the cost of capital assets used by RAAFA to provide the services)?
2. for most residents of Erskine Grove, the amount paid by the individual resident to RAAFA in respect of the services provided by RAAFA at Erskine Grove was equal to or greater than the total cost to the resident if the resident had obtained the services in the marketplace?
3. the total amount paid by residents of Erskine Grove to RAAFA for services provided by RAAFA at Erskine Grove was equal to or greater than to total cost to RAAFA of providing those services (including a reasonable allocation of the cost of capital assets used by RAAFA to provide the services) but the difference was no more than a reasonable return for the activity of providing the services?
4. the total amount paid by residents of Erskine Grove to RAAFA for services provided by RAAFA at Erskine Grove was equal to or greater than the total cost to RAAFA of providing those services (including a reasonable allocation of the cost of capital assets used by RAAFA to provide the services) but the residents enjoy other intangible benefits and advantages as a result of residency at Erskine Grove that account for the difference?
5. for most residents of Erskine Grove, the amount paid by the individual resident to RAAFA in respect of the services provided by RAAFA at Erskine Grove was equal to or greater than the total cost to a resident if the resident had obtained the services in the marketplace but the resident enjoys other intangible benefits and advantages as a result of residency at Erskine Grove that account for the difference?
6. in each case described above, any surplus was dealt with as provided in the Constitution and the Lease?

In these questions 'services' means 'services, facilities, benefits and advantages'.

16 Counsel for RAAFA observed that the preliminary questions all concerned different degrees of the same single question. That question, in the submission of RAAFA, is as follows: if the Land is used to provide accommodation and other services for the aged and most residents pay the costs associated with the provision of those services to them, is the Land used exclusively for charitable purposes such that it is not rateable land under the LG Act?

17 The City summarised the preliminary questions as being 'whether or not fees and charges that are payable by the residents of Erskine Grove to [RAAFA] are such as to preclude the use of the [Land] being for a charitable purpose'.

The agreed facts for the purpose of making the preliminary findings

18 On 27 March 2013, the parties filed an agreed statement of facts. In summary, the statement provided as follows:

19 RAAFA is a body corporate and an association incorporated pursuant to s 9(1) of the Associations Incorporation Act 1987 (WA). RAAFA operates a number of aged care and independent living unit facilities in Western Australia. RAAFA is a not-for-profit organisation, the income and property of which are applied solely to the promotion of its objects and are not paid directly of indirectly by way of pecuniary profit to any member or any other person.

• registered with the Australian Taxation Office as a public benevolent institution;
• licensed as a charitable organisation with the Charitable Collections Advisory Committee; and
• approved as a charitable institution by the State Taxation Department.

21 Erskine Grove consists of 197 independent living units (ILUs) and a village centre and community centre (Village). The ILUs are operated as a retirement village under the provisions of the Retirement Villages Act 1992 (WA) (RV Act). The Village includes such facilities as a gymnasium, an activity room, a library and an arts and crafts workshop. With some exceptions, the residents may use those facilities within the Village without paying any additional fee.

22 Apart from occasional Lotterywest grants, RAAFA does not receive any funding in respect of the facilities and services provided either from the Commonwealth or State Governments or from any other external source. The costs to RAAFA of providing the facilities and services at Erskine Grove are funded through entry loans, retention sums and operating costs charges.

23 An ingoing resident to an ILU must pay an interest free entry loan to RAAFA in consideration of the grant of a lease. Upon the termination of the lease, RAAFA must repay that loan, less a retention sum, to the resident or his or her estate.

24 The residents of each ILU must also pay to RAAFA an operating costs charge as a contribution to operating costs by monthly payments in advance. The operating costs charge is an annual charge equal to 25% of the Single Aged Pension per annum where an ILU is occupied by one person and 30% if an ILU is occupied by two persons. The operating costs charge may be increased in the following financial year where it is anticipated that there will be a shortfall between this charge and the Village's operating costs. Where the actual operating costs of Erskine Grove are less than the fee collected by the operating costs charge in any financial year, RAAFA must either apply the surplus against the following financial year's operating costs or, where the residents so resolve, to a purpose that is of benefit to the residents.

25 The Tribunal heard the parties on the preliminary questions at a hearing on 5 April 2013 and delivered its preliminary findings on 17 June 2013; Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2013] WASAT 89 (First RAAFA Decision).

26 For the reasons set out in the First RAAFA Decision, I answered each of the preliminary questions in the affirmative.

27 The City subsequently applied to the Court of Appeal for leave to appeal against the First RAAFA Decision. On 17 March 2014, the Court of Appeal dismissed that application; City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [2014] WASCA 104 (Court of Appeal decision).

28 The Court of Appeal's reasons were as follows (Court of Appeal decision at [11] ­ [14]):

1. An appeal against a decision of the Tribunal lies only with leave (s 105(1) of the Act), on a question of law (s 105(2)).
2. ... the question of law which the appellant sought to have determined by this court was not clearly identified in the papers before the court. On the hearing of the application for leave to appeal, senior counsel for the appellant was asked to identify the relevant question of law. We were told the question was whether, based on the agreed statement of facts and on the basis that the same services could be obtained from other providers (either not­for-profit organisations or commercial operations), the determination in [57] of the Tribunal's reasons was correct (ts 23).
3. The difficulty, however, is that whether the same services could be obtained from other providers was neither agreed by the parties before the Tribunal nor determined by the Tribunal. As it emerged, it was also not agreed for the purposes of the application to this court. Senior counsel for the appellant said that the proposition that the same services could be obtained from other providers was essential to the appellant's case and would be asserted as a fact when the proceedings continue in the Tribunal. In the absence of such a finding, there was no appropriate question of law for determination and the application for leave to appeal should be dismissed. The application for leave to appeal was accordingly dismissed.
4. The determination of the application for leave to appeal renders it unnecessary to express any view with respect to the effect of the Tribunal's purported 'determination' of the so-called 'preliminary issues', or as to whether this was relevantly a 'decision' of a kind which could enliven an appeal under s 105 of the Act, or as to the desirability of the procedural course adopted by the Tribunal.

Further proceedings and the final determination of the matter

29 Following the delivery of the Court of Appeal decision, the parties now seek the Tribunal's final decision on RAAFA's application for review. The parties filed a further statement of agreed facts on 27 January 2015. RAAFA filed witness statements from, respectively, John Francis Murray dated 27 January 2015 (Murray's witness statement) and Matthew Garmony dated 29 January 2015 (Garmony's witness statement). The City filed witness statements from, respectively, David Norman Prattent dated 27 January 2015 (Prattent's witness statement) and Martin Langridge dated 29 January 2015 (Langridge's witness statement). The matter then proceeded to further hearings on 2, 12 and 23 February 2015.

30 When the matter was before the Tribunal on 12 February 2015, counsel for the City conceded that '... having regard to what we seek to adduce, even if everything was found as we seek to have it found, application of the law as has been expressed will lead to the City's decision being set aside'.

31 In light of the concession in paragraph 30, I considered that the evidence in the four witness statements was not relevant to my decision, and I could rely solely on the contents of the agreed statement of facts. Therefore, I concluded that it was of no assistance to the Tribunal for those witnesses to be cross­examined. However, the witness statements were not formally withdrawn and for the purposes of recording the material that was sought to be advanced, I have set out the contents of the witness statements below. Except to the extent that it supports the agreed facts, I have placed no reliance on this evidence for the purposes of reaching my final conclusion.

32 The facts as set out in the statement of agreed facts are relevantly as follows:

1. RAAFA's constitution and rules of association provide that RAAFA will:

1. undertake the care and welfare of and to provide facilities for retired, aged, pensioned and infirm persons and for the provision of relief in the form of companionship, mutual activities and security of community living to counter the effects of the isolation and loneliness of old age. This includes, but is not limited to, the provision of homes, accommodation or other care facilities for the infirm, for persons who are by reason of their age, ill-health, accident or infirmity wholly or in part unable to maintain themselves by their own exertion or for aged or retired persons or for persons who in the opinion of the RAAFA's Council are in circumstances which necessitate such care; 2. render homage to God and unswerving loyalty to the Sovereign of Australia;

1. assist and cooperate with kindred ex­service organisations and other organisations and to assist them in attaining any common object; 2. take an active interest in aviation and aeronautical research; and 3. maintain and operate the RAAFA Aviation Heritage Museum of Western Australia for the purpose of conservation of aviation heritage.
2. RAAFA's property and income is to be applied solely towards the promotion of its objects and no part of that property or income may be paid or otherwise distributed directly or indirectly, to members of RAAFA, except in good faith in the promotion of its objects.
3. If, on the winding up of RAAFA, any property remains after satisfaction of its debts and liabilities and the costs, charges and expenses of that winding up, that property shall be distributed to an organisation with similar objects.
4. RAAFA is:

1. a not-for-profit organisation, the income and property of which are applied solely to the promotion of its objects and are not paid directly or indirectly by way of pecuniary profit to a member or any other person; 2. registered with the Australian Tax Office (ATO) as a public benevolent institution;

1. endorsed by the ATO as a deductible gift recipient;

1. endorsed by the ATO as an income tax exempt charity; and 2. licensed as a charitable organisation.
2. RAAFA operates a number of aged care and retirement living facilities in Western Australia, with five estates/villages across the metropolitan area and one in Albany. Four of the estates in the metropolitan area also include residential aged care facilities.
3. Erskine Grove:

1. was constructed by RAAFA at an approximate total cost of between $30,000,000 and $33,000,000 (inclusive of GST, but exclusive of land costs); 2. consists of 197 ILUs and the Village;

1. is located next to Halls Head Sporting and Recreation Club (with four bowling greens) and the Halls Head Country Croquet Club; and

1. has discrete parking areas for caravans and boats.
2. The ILUs are operated as a retirement village under the provisions of the RV Act and in accordance with the Code of Fair Practice for Retirement Villages 2009 (WA).
3. Each ILU is self-contained and:

1. comprises of two bedrooms and a study/third bedroom (in the case of 194 of the ILUs) or two bedrooms (in the case of the other remaining three ILUs), an ensuite, extra toilet, kitchen, dining, lounge, undercover outdoor living area and a wider than normal lock­up garage for a single vehicle; 2. is situated on a discrete piece of the Land, with side and rear fences separating it from other ILUs; and

1. is supplied with a telephone, emergency call system, light fittings and exhaust fan, security doors, smoke detection system, fly screens, stove, hot water system and an air conditioner.
2. RAAFA encourages residents in the ILUs to be independent as far as possible.
3. Residents:
   1. provide their own furniture, cooking utensils, cutlery, crockery, bedding, clothing, cleaning products, medication and personal requirements; and
   2. do their own shopping, cooking, cleaning, laundry and gardening in the rear garden area of their ILU.
4. The Village's common facilities include:

1. an administration office; 2. a community centre (including meetings rooms and offices);

1. an indoor swimming pool; 2. activities rooms; 3. a hairdressers salon; 4. medical and consulting rooms; 5. a library; 6. a computer room; 7. a dining room; 8. a lounge;

1. a workshop.
2. Save for the administration office, and for the matters set in the following paragraph, residents may use the facilities within the Village without paying any additional fee.
3. Residents are required to pay:

1. any fees payable to hairdressers, doctors and nurses for any services provided to them; 2. for any meals consumed in the Village's dining room; and

1. the cost of any materials consumed by them in any of these facilities.
2. The administration office is staffed with a manager (who works 30 hours a week), a part-time administration clerk and a part-time welfare officer, who coordinate all day­to-day operations and running of Erskine Grove. In addition, RAAFA employs a full-time maintenance officer and two fulltime gardeners at Erskine Grove.
3. A social committee organised by residents of Erskine Grove and supported by RAAFA organises regular outings and activities for residents. RAAFA's support is via the use of various facilities in the Village for activities organised and provided at Erskine Grove, and the provision of a bus, which may be used by the social committee for activities organized outside of Erskine Grove.
4. Examples of activities organised and provided at Erskine Grove include the following:

1. themed dining events held in the community centre and hall, such as a 'roast night', fish and chips, Hawaiian feast and Irish evenings; 2. craft and hobby activities held in the arts and crafts room;

1. do-it-yourself activities held in the workshop;

1. family events for special occasions such as Mother's Day, Father's Day, Easter and Christmas; 2. speakers to address residents in the community centre and hall; and 3. a weekly 'happy hour' held on Wednesdays in the community centre and hall, to enable new residents to meet existing residents and for the exchange of information, news and tips.
2. Events and activities held at Erskine Grove are usually well attended. For example, the hall at the Village can comfortably accommodate 150 - 165 people for dining and is usually fully booked on the themed dining evenings.
3. Examples of other activities organised outside of Erskine Grove, using the bus provided by RAAFA, include the following:

1. weekly shopping trips to Mandurah Forum; 2. lunch and dinner outings to local restaurants, recent examples of which have been Hot Rocks Cafe, Jolly Frog Restaurant, Mandurah Quays and the Premier Hotel (Pinjarra); and

1. trips to RAAFA's other villages, in particular RAAFA's nearby village at Meadow Springs.
2. RAAFA produces a regular newsletter, 'Air Mail', providing information on activities across all of its aged care facilities and general news about RAAFA and its other activities, as well as articles on healthcare and matters of general interest to residents and other members.
3. Erskine Grove also produces its own internal newsletter with information specific to that estate. The Estate Manager and Welfare Officer in conjunction with residents produce this monthly newsletter.
4. At all material times, RAAFA has:
   1. provided prospective residents of the ILUs with a copy of the Pre­Contractual Disclosure Booklet (Disclosure Booklet); and
   2. granted to each tenant of an ILU a life-long lease (Lease) to occupy that ILU. Residents pay for the preparation, execution and stamping of the Lease.
5. The Lease also provides that the resident agrees to become a member of RAAFA.
6. Further provisions regarding the use of ILUs by residents and the use of certain other facilities forming part of the Village are contained in Erskine Grove Rules & Regulations (Rules).
7. Amongst other provisions, under the Lease and the Rules:

1. RAAFA is obliged to manage the Village in accordance with the terms and conditions of the Lease and the spirit of the Charter of Residents' Rights and Responsibilities (Charter); 2. RAAFA is obliged to maintain and repair all 'Common Facilities' and 'Common Areas';

1. RAAFA is obliged to maintain stoves, cook tops extractor fans air conditioners and hot water services where these are installed in the ILUs;

1. RAAFA is obliged to provide each ILU with an emergency call system, monitored 24 hours a day; 2. Residents must maintain their ILU in good and tenantable repair and condition; and 3. Residents are permitted to have live-in-carers and to have visitors stay with them in their ILU at all times, although prior arrangements must be made with RAAFA for visitors staying longer than a continuous period of 6 weeks or a cumulative period of 10 weeks in any year.
2. An ingoing resident to an ILU must pay an interest free entry loan to RAAFA in consideration of the grant of a Lease (Entry Loan).
3. In exchange for the Entry Loan a resident is given the right to occupy his or her ILU for life, although a resident may terminate his or her Lease on 30 days notice.
4. Upon the termination of the Lease, RAAFA must repay the Entry Loan, less a Retention Sum to the resident or his or her estate (Retention Sum).
5. The Retention Sum:
   1. equals the Entry Loan divided by 480 multiplied by the number of months the resident has occupied the ILU (but this multiplier can not exceed 120); and
   2. is payment for the resident's occupation of the ILU and for the use of the common facilities and common areas.
6. The amount of the Entry Loan is determined by RAAFA and reviewed on an annual basis having regard to matters including the median house price in the locality and equivalent charge being made by other retirement villages in the locality.
7. Since Erskine Grove commenced operations, each resident of an ILU has paid an Entry Loan ranging from $160,000 to $307,000 depending on when the Entry Loan was paid and the nature of the ILU concerned.
8. In effect, by way of the Retention Sum, a resident pays a monthly amount of 1/480th of the Entry Loan, which is fixed for 10 years, for the resident's occupation of the ILU and use of the common facilities and common areas. Save for the interest accruing to RAAFA (and foregone by a resident) on an Entry Loan, after a period of 10 years, a resident pays nothing further for the occupation of the Unit or the use of the common facilities and common areas for the remainder of his or her residency at Erskine Grove, however long that might be.
9. Upon the termination of the Lease:
   1. an ILU will be leased to a new resident, who will pay to RAAFA a new Entry Loan; and
   2. the outgoing resident (or his or her estate) is not entitled to share in any increase, or required to fund any decrease, between the amount of Entry Loan that was paid by the outgoing resident and the amount of the Entry Loan paid by the new resident.
10. From an ongoing costs perspective

1. a resident of an ILU must pay to RAAFA the 'Operating Costs Charge' (Operating Costs Charge) as a contribution to 'Operating Costs' by monthly payments in advance; 2. 'Operating Costs' is defined as meaning 'the total amount of [RAAFA's] outgoings, costs and expenses now or after the date of signing this Lease properly and reasonably assessed, charged or chargeable, paid or payable or otherwise incurred for the maintenance, management and operation of the Village';

1. such costs include but are not limited to all taxes, rates, and water consumption charges; all insurance premiums (for the Village and its plant and equipment, workers' compensation, public risks and liability); all charges for utility services; the costs of cleaning and maintaining the Village and landscaping and maintaining the common garden areas; all reasonable costs of management and administration of the Village; all costs of providing the common services and maintaining the common facilities; all costs associated with fire services, pest control; and all costs of legal, accounting and administrative support; but excludes costs which are otherwise specifically payable by a resident;

1. RAAFA must provide residents with a proposed Operating Costs Budget before the end of the Village's financial year which will be considered at an annual budget meeting; 2. 'Operating Costs Charge' is defined as meaning an annual charge equal to 25% of the Single Aged Pension per annum, where an ILU is occupied by one person (or 30% if an ILU is occupied by two persons), or a greater annual charge as determined under the provisions of the Lease; 3. the 'Operating Costs Charge' may be increased in the following financial year where it is anticipated that there will be a shortfall between this charge and the Village's Operating Costs; and 4. where the actual Operating Costs of Erskine Grove are less than the fees collected by the Operations Costs Charge in any financial year, RAAFA must either apply the surplus against the following financial year's Operating Costs (thereby reducing the monthly Operating Costs Charge) or where the residents so resolve, to a purpose that is of benefit to the residents.
2. Residents are also obliged to pay:
   1. all rents, rates and charges charged to them for the consumption and use of electricity, telephone, gas, second toilet pedestal or other services within their ILU including connection and disconnection charges; and
   2. all costs of external modification to their ILU, all costs of remedying any roof leaks caused by those modifications, the cost and maintenance of any equipment they have added to the ILUs, the cost of installing and removing wallpaper, the cost of cleaning carpets, tiles, curtains and the ILU generally and the costs associated with light bulbs, drains and tap washers.
3. From the commencement of operation of Erskine Grove to date, including throughout the Relevant Rating Years the Operating Costs Charge has remained at 25% of the Single Aged Pension where an ILU is occupied by one person or 30% where an ILU is occupied by two persons.
4. A summary of the income and expenses for each of the Relevant Rating Years is as follows:

1. The reference to 'Resident fees' is the total amount of the Operating Costs Charge paid by the residents of Erskine Grove.
2. The reference to 'Other income' comprises outdoor pool receipts, room/hall hire income, bus use income, administration recovery, telephone recovery and sundry income received by RAAFA in relation to Erskine Grove.
3. The surplus in 2008/2009 was credited to residents' maintenance accounts for 2009/2010 in accordance with the provisions of clause 6.3(a) of the Lease.
4. The surplus in 2009/2010 was applied to the cost of installing solar electricity panels at Erskine Grove in accordance with a special resolution of the residents in accordance with the provisions of the Lease.
5. The surplus in both 2010/2011 and 2011/2012 were credited to residents' maintenance accounts in accordance with the provisions of the Lease.
6. During the 2008/2009 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels of approximately 99% were maintained; and
   2. RAAFA's unit selling price remained steady at $124,000 (one bed unit) to $295,000 (three bed unit).
7. During the 2009/2010 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels were maintained although there were some noticeable delays in filling vacancies; and
   2. RAAFA's unit selling price remained steady at $124,000 (one bed unit) to $295,000 (three bed unit).
8. During the 2010/2011 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels were maintained across RAAFA's estates, although there was a slight increase in the vacancy rates; and
   2. RAAFA's unit selling prices have been kept at a sustainable level at $140,000 (one bed unit) to $319,000 (three bed unit).
9. During the 2011/2012 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. reasonable occupancy levels were maintained across RAAFA's estates, despite the slowdown in the real estate market; and
   2. RAAFA's unit selling prices have been kept at a sustainable level at $140,000 (one bed unit) to $324,000 (three bed unit).
10. The following numbers of residency agreements commenced during each of the Relevant Rating Years:

1. 2008/2009 ­ 11 (including two that commenced on 1 July 2009); 2. 2009/2010 ­ 12 (excluding two that commenced on 1 July 2009);

1. 2011/2012 ­ 8.
2. During the Relevant Rating Years:
   1. all vacancies at Erskine Grove were advertised and offered to the general public by way of:
      1. advertisements in 'Lifestyle/Retirement Village Guide' published in the Saturday edition of The West Australian newspaper;
      2. advertisements on RAAFA's website; and/or
      3. signage at the front entrance to the Erskine Grove property; and
   2. all vacancies at Erskine Grove were filled by members of the general public who responded to the advertisements referred to above.
3. In accordance with the requirements of the RV Act, at least one of the proposed residents of an ILU at Erskine Grove must be aged 55 years or more.
4. The average age of the residents in the ILUs at Erskine Grove is 76 years.
5. During the Relevant Rating Years, RAAFA did not receive any new requests for concessions in relation to the Entry Loan from people wishing to take up residency at Erskine Grove but who were unable to pay the full amount of the Entry Loan due to their financial circumstances or a shortfall in the sale price of their previous home. RAAFA had received several such requests prior to the Relevant Rating Years, all of which were agreed to and were still in effect during at least some of the Relevant Rating Years.
6. The following concessions were agreed to by RAAFA, by reference to ILU numbers at Erskine Grove:

1. Unit 22 ­ concession of $10,000.00 [request made during September 2003 for the 2003/2004 rating year]; 2. Unit 161 ­ concession of $43,200.00 [request made during March 2005 for the 2004/2005 rating year];

1. Unit 122 ­ concession of $22,000.00, which was paid back approximately two years after entry [request made during July 2004 for the 2004/2005 rating year]; and

1. Unit 68 ­ concession of $60,000.00 [request made during December 2003 for the 2003/2004 rating year].
2. In addition, in October 2008 (during the Relevant Rating Years), RAAFA received a request from the resident of Unit 24 at Erskine Grove to draw an amount of $5,000 from that resident's Entry Loan in order to meet the cost of unexpected medical expenses. RAAFA agreed to this drawdown.
3. RAAFA has also received and agreed to a number of similar requests for concessions to the amount of the Entry Loan and to draw amounts from Entry Loans in respect of other villages that it operates. Each request is considered on its merits.
4. During the Relevant Rating Years, RAAFA also agreed to a request from two residents at RAAFA's Bullcreek Village to transfer to Unit 54 at Erskine Grove. Due to the financial circumstances of the residents, RAAFA agreed to a concession in respect of the Entry Loan for the transfer to Erskine Grove and also agreed to the residents paying the Operating Costs Charge at the single rate of 25% of the Single Aged Pension rather than at the couples rate of 30% of the Single Aged Pension.
5. During the Relevant Rating Years, RAAFA did not receive any other request for any concession or waiver in relation to the Operating Costs Charge from any resident of Erskine Grove who was unable to pay the Operating Costs Charge. Had any such requests been received, they would have been considered on their merits.
6. RAAFA did not receive any funding from the Commonwealth or State Governments for the acquisition of the Land or for the construction of the ILUs and the Village at Erskine Grove, and does not receive any funding from the Commonwealth or State Governments, or from any other external source, for the day-to-day operations or maintenance of Erskine Grove.
7. It is an agreed fact that the admitted sources of funding for RAAFA in relation to Erskine Grove comprise:
   1. the Retention Sum from the Entry Loans paid by residents of Erskine Grove; and
   2. the Operating Costs Charge paid by residents of Erskine Grove.

I note that RAAFA claims, but the City does not admit, that RAAFA's only other source of funding in relation to Erskine Grove comprises RAAFA's reserve funds, accumulated over time from its various operations and activities.

33 Mr Murray is the Chief Executive Officer of RAAFA and has been in that position since May 2013.

34 He is responsible for all strategic implementation, operational and financial management at RAAFA and, amongst other things, manages the financial risks of RAAFA.

35 Mr Murray's evidence is that Erskine Grove is not used for any purpose other than as a retirement village; Murray's witness statement, paragraph 12.

36 Mr Murray's evidence is also that, to the extent that the actual operating costs of Erskine Grove have been less than the fees collected by the Operations Costs Charge in a financial year, the surplus is applied in accordance with RAAFA's constitution, the provisions of the RV Act and in accordance with the provisions of the various Leases; Murray's witness statement, paragraph 21.

37 Mr Garmony is a licensed valuer and Managing Director at Garmony Property Consultants. He is, amongst other things, a certified practising valuer from the Australian Property Institute, a licensed valuer in Western Australia and a licensed real estate and business agent in Western Australia.

38 Mr Garmony says that he was instructed by RAAFA to prepare a report addressing whether or not the costs to residents of the accommodation and services provided by Erskine Grove are 'so great as to exclude all but the very wealthy' by 'comparing the costs paid by residents of Erskine Grove to the market value of, and the market rents payable for, the retirement village units at Erskine Grove'; Garmony's witness statement, paragraph 16.

39 Mr Garmony assessed the value of each of the ILUs and also the market rent payable at the beginning of each of the Relevant Rating Years. His assessment is as follows:

40 The 'market value' is what a willing buyer would pay a willing seller on the relevant date. The 'market rental per week' is what a willing lessee would pay a wiling lessor on the relevant date; Garmony's witness statement, paragraphs 2.1 and 2.2.

41 Mr Garmony does not express a view, however, as to whether in the light of his valuation he considers Erskine Grove to be affordable by only the very wealthy.

42 Mr Prattent is employed by the City as its Manager, Financial Services. He is an accountant and he qualified for membership of the Institute of Chartered Accountants in England and Wales in 1975; Prattent's witness statement, paragraph 3.1.

43 Mr Prattent's evidence is that he has attended at and is familiar with Erskine Grove. He also visited a number of other retirement villages within approximately 15 kilometres of Erskine Grove, which he refers to as 'Comparable Retirement Villages'; Prattent's witness statement, paragraph 4.3. Based upon his observations and upon conversations which he had with the managers of those other retirement villages, Mr Prattent's evidence is that those other retirement villages offer their residents 'comparable accommodation and services to those provided at Erskine Grove'; Prattent's witness statement, paragraph 4.7.

44 Mr Prattent also provides information concerning the equivalent of the Entry Loans for the Comparable Retirement Villages and the equivalent of the Operating Costs Charge to residents of those villages. He confirms that all prices and costs as set out in his witness statement are 'in today's prices'; Prattent's witness statement, paragraph 4.10. He draws no conclusions about those prices or the costs to residents of Erskine Grove.

45 Mr Langridge is a partner in the forensic practice of Deloitte Touche Tohmatsu and he is a member of the board of the Brightwater Care Group and honorary treasurer of that organisation.

46 The issues which Mr Langridge was asked to address are in the following terms:

1. Is the money payable by residents of Erskine Grove to RAAFA the full cost of providing the accommodation and services which RAAFA provides to the residents?
2. Are those sums calculated to ensure that RAAFA will recover from residents of Erskine Grove the full cost of the accommodation and services that it provides to them?
3. Please describe the typical financial characteristics of the residents that RAAFA would need to have at Erskine Grove to ensure that RAAFA would recover the full cost of providing the accommodation and services that it provides to those residents.

47 Mr Langridge provides the following conclusions:

1. Residents are required to pay for all of the operating costs of Erskine Grove and for all the services which they receive; Langridge's witness statement, paragraph 4.39.
2. Mr Langridge has been unable to identify any costs which would be required to be borne by RAAFA that RAAFA would in turn be unable to recoup from the residents of Erskine Grove; Langridge's witness statement, paragraph 4.39.

1. RAAFA's financial model is designed to:
   1. fully fund the initial construction costs;
   2. establish a pool of funds to meet future capital costs;
   3. provide RAAFA with a pool of funds from which it is able to earn an investment return; and
   4. ensure that RAAFA receives the benefit of any capital growth in the value of Erskine Grove; Langridge's witness statement, paragraph 5.25.

1. A resident of Erskine Grove must have the financial means to be able to:
   1. fund the Entry Loan from their own resources or secure and service an external debt together with the Retention Sum per annum;
   2. fund the upfront administration and other fees and moving expenses;
   3. meet the ongoing and periodic costs incurred;
   4. financially support their normal living expenses, including medical and care needs; and
   5. furnish the ILU to their requirements;

48 The City denies that RAAFA's use of the Land during the Relevant Rating Years was exclusively for charitable purposes because:

1. save for minor exceptions, RAAFA did not subsidise the cost of providing accommodation to residents of the Village;
2. the residents paid all of the occupation costs of their ILU and for all services provided to them in the Village;

1. the residents paid an amount, namely the Entry Loan, which was determined by reference to the market value of the freehold of their ILU;

1. the charges to residents of the Village for accommodation could not be met by aged persons of modest means; and
2. the ILUs at the Village are of a kind that is generally available in the community.

49 The City says that the 'use' of the Land is to be determined by looking objectively at the actual use of the Land during the rating period; Retirees WA (Inc) and City of Belmont [2010] WASAT 56 at [20] (Retirees WA).

50 The City says that when making this assessment, the Tribunal may consider the facilities provided on the Land, the benefits flowing to aged persons from residency in the accommodation provided, the constating documents (such as the entity's Constitution) and whether the entity operates not-for-profit and enjoys charitable status; Retirees WA at [5], [112] and [113] ­ [150].

51 The City says that the Land is not used exclusively for charitable purposes because its principal use is to provide aged accommodation and there is no relief of the aged in relation to the provision of accommodation. The fact that some charitable services may otherwise be provided by RAAFA does not, in the City's opinion, affect that conclusion.

52 Having made the statement that there is no relief of the aged in relation to the provision of accommodation, the City then goes on to say that, in order for the provision of accommodation to aged persons to be charitable, the following must apply:

1. the provision of the accommodation must be subsidised;
2. if the provision of the accommodation is not subsidised, then the accommodation must be of a kind that is not generally available in the community; and

1. payments made by aged persons for the accommodation must be of a scale that could be met by a person of modest means.

53 The City concludes by saying that in the present case:

1. the residents have paid RAAFA more than the full cost of constructing their ILUs by way of Entry Loans (and the interest derived on them) and Retention Sums;
2. the residents have paid all of the costs of maintaining the Village; and

1. the residents have paid all the costs of any services provided to them.

54 Thus, according to and in the words of the City, RAAFA's residents get what they pay for. They get modern accommodation in what is, in effect, a modern private housing estate. For almost all residents there is no subsidisation. Occasional subsidies to a few residents or the provision of some services other than housing without payment does not satisfy the requirements of the LG Act. The Land must be used exclusively for charitable purposes. The principal use of the Land in the City's submission is for the provision to aged persons of accommodation that they pay for and the accommodation is of a kind that is generally available.

55 The issue in these proceedings is, simply, whether the Land was exempt from rates during the Relevant Rating Years on the basis that it was used exclusively for charitable purposes.

56 For the reasons set out below, I have determined that the Land was not rateable land during the Relevant Rating Years because it was used exclusively for the charitable purpose of relief of the aged.

57 I do not understand there to be any dispute between the parties that the provision of relief of the needs and disabilities of the aged is a charitable purpose. In setting out my reasons for my findings, I will address that issue first and then the following questions, namely, was the Land being used for a charitable purpose during the Relevant Rating Years and, if so, was the Land so used 'exclusively'?

Is the 'relief of the aged' to be considered a charitable purpose?

58 In the First RAAFA Decision, at [28] ­ [30], I said this:

1. The words 'charitable purposes' are not defined in the LG Act, but the term 'charitable' is understood in its technical legal sense; [Uniting Church Homes (Inc) and City of Stirling [2005] WASAT 191] at [95] and [Retirees WA (Inc) and City of Belmont [2010] WASAT 56] at [76].
2. As the Full Court said in West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65 at [68] (Baptist Hospital), it is generally accepted that in order to be charitable, a purpose must either fall within the list of purposes enumerated in the Charitable Uses Act 1601 ­ 'the Statute of Elizabeth I' ­ or within one of the four categories of charitable purposes laid down by Lord Macnaughton in Income Tax Special Purpose Commissioners v Pemsel [1891] UKHL 1; [1891] AC 531 at [583] (Pemsel). Amongst the purposes accepted as being 'charitable' is 'the relief of aged, impotent and poor people'; Uniting Church at [94] and Retirees WA at [77]. Those elements are to be construed disjunctively, so that the relief of the aged need not be confined to the relief of aged people who are also poor; Uniting Church at [96] and Retirees WA at [102].
3. There is then a second requirement for a purpose to be charitable (except possibly in relation to the relief of the poor) namely that there be a public benefit, meaning a benefit that is directed to the general community or to a sufficient section of the community to amount to the public: Lloyd v Federal Commissioner of Taxation [1955] HCA 71; (1955) 93 CLR 645 at 662 (McTiernan J), 667 (Fullagar J) and at 670 ­ 671 (Kitto J); Thompson v Federal Commissioner of Taxation [1959] HCA 66; (1959) 102 CLR 315 at 321 (Dixon CJ, Fullagar J and Kitto J agreeing), and at 327 (Menzies J).

59 My conclusion was and continues to be that relieving the needs of old age is to be considered as charitable.

60 I agree with the City that the 'use' of the Land is to be determined by looking objectively at the actual use of the Land during the Relevant Rating Years; Retirees WA at [20].

61 I also agree that when considering what the Land is being used for, the Tribunal should have regard to a range of factors, including the facilities provided on the Land, the benefits flowing to aged persons by reason of residency in the kind of accommodation provided, including the ILUs, and other factors relevant to the purpose for which the Land was used, including RAAFA's objectives, the charitable nature of RAAFA and the not-for-profit basis on which Erskine Grove is operated as disclosed by RAAFA's constating instruments in particular; Retirees WA at [112].

62 Those factors will then 'inform an overall judgment that needs to be made, ..., namely whether the subject land, ..., is being used for the purpose of the relief of an aged person'; Uniting Church Homes (Inc) and City of Stirling [2005] WASAT 191 (Uniting Church) at [100].

63 There are a variety of needs of aged persons attributable to their condition as being aged; Retirees WA at [95] ­ [99] and the decisions there cited. Those needs include:

1. relief from isolation, loneliness and insecurity;
2. the risk of being without prompt medical or other help in case of need;

1. inability to employ their superannuated leisure;

1. protection against the dangers and distresses incident to living alone;
2. fraternity, belonging, respect, mutual activities, interaction and security; and
3. stability and security of long-term accommodation which is affordable, which will permit independent living for as long as possible, which is low maintenance or which involves assistance with maintenance, and which offers a supportive social environment.

64 In Uniting Church, the Tribunal made a number of findings on the benefits flowing to the aged persons by reason of residency in independent living units. These benefits are, in essence, security, sense of community, village location, access to medical support and better health management. The Tribunal found that these independent living units represent a desirable choice for some older people, with the potential for mutual support in a situation where an older person would otherwise be isolated in the community, with an increased risk of loneliness. Other benefits include actual and perceived security, improved nutrition through being able to access meals cooked in the village and increased physical activity.

65 I am able to infer that the residents of Erskine Grove also enjoy similar benefits.

66 Erskine Grove is situated in close proximity to sporting and recreational facilities and has parking for caravans and boats. It consists of 197 ILUs and the Village. The ILU's are self-contained with side and rear fencing. Most of the ILUs comprise two bedrooms and a study or third bedroom, an ensuite bathroom, extra toilet, kitchen, dining, lounge, undercover outdoor living area and parking for a single vehicle. Each ILU is supplied with, amongst other things, an emergency call system, security doors and smoke detection systems. RAAFA encourages residents in the ILUs to be as independent as possible.

67 The facilities within the Village include a community centre, a gymnasium, an indoor swimming pool, a hairdresser's salon, a library, an arts and craft room and a workshop. Although residents are required to pay any fees payable to hairdressers, doctors and nurses and for meals consumed in the Village's dining room, most of the facilities are available to residents without paying any additional fee. Activities are organised for residents and a bus is provided by RAAFA for outings and shopping trips.

68 It is clear from the agreed facts that, according to RAAFA's constitution and rules of association, RAAFA is to undertake the care and welfare of and to provide facilities for, retired, aged, pensioned and infirm persons. RAAFA will also provide for the provision of relief in the form of companionship, mutual activities and security of community living to counter the effects of the isolation and loneliness of old age. It is a not­for­profit organisation and is registered with the ATO as a public benevolent institution. All of its income and property are applied solely to the promotion of its objects and are not paid directly or indirectly by way of pecuniary profit to a member or any other person.

69 Even though, during each of the Relevant Rating Years, RAAFA generated a small surplus, I do not consider that this means that RAAFA is operating for commercial gain. Those surpluses were credited to the residents' maintenance accounts or applied to repairs or improvements to the property. Any surplus generated by RAAFA from the operation of Erskine Grove was not for the private profit of RAAFA.

70 Accordingly, by reason of my findings made on the benefits flowing to aged persons by reason of residency in independent living units, the constating instruments of RAAFA and the facilities at Erskine Grove, I conclude that RAAFA, in providing the facilities on the Land, including the ILUs, uses the Land for the relief of the aged.

71 Further, I conclude that the benefits which derive from the provision of accommodation at Erskine Grove have the requisite element of a public benefit which is necessary for that use of the Land to constitute a charitable purpose. While the cost of a place in Erskine Grove may be high enough to preclude persons of modest means, there is no evidence to suggest that those costs are so great that they could be afforded only by the very wealthy.

72 In addition, all vacancies at Erskine Grove are offered to the general public and are not restricted to members of RAAFA. I maintain that view despite the fact that all residents must subsequently become members of RAAFA. I do not understand there to be any difficulties by way of eligibility for acceptance as a member of RAAFA.

73 I will now briefly address some matters raised by the City which have not been addressed elsewhere in these reasons.

74 The City states that the principal use of the Land is to provide aged accommodation and there is no relief of the aged in relation to the provision of the accommodation. I disagree. The nature of the ILUs and the integrated nature of the other facilities at Erskine Grove indicate that the Land is, in fact, devoted to, as part of a scheme, the relief of the aged.

75 I have already addressed in the First RAAFA Decision the City's concern that, to be charitable, relief must be provided by way of bounty rather than by way of bargain.

76 The City's assertion that, for the use to be considered to be charitable, the accommodation must be of a kind that is not generally available in the community, is rejected. I know of no authority for this proposition and I have not been directed to any such authority.

77 Consistent with the Tribunal's finding in Retirees WA at [150] and my conclusions in the First RAAFA Decision, I consider that the fact that the residents of Erskine Grove are required to purchase the right to occupy their ILU, and pay fees, does not alter the charitable characterisation of the use.

78 Based on those findings of fact, it is my finding that RAAFA, in providing the facilities on the Land, is clearly engaged in charitable relief of the aged.

79 The final issue is whether the use by RAAFA of the Land for charitable purposes is an exclusive use. The City says that residents meet all of the costs of their accommodation and that if the Land is used to provide other relief of the aged (which the City denies) then it is not used exclusively for charitable purposes because its principal use is to provide aged accommodation and there is no relief of the aged in relation to the provision of accommodation.

80 As I have already said, the evidence in this case indicates that RAAFA is a not­for­profit entity and operates without commercial gain.

81 I understand this to be the only basis upon which the City claims that the use of the Land for charitable purposes is not an exclusive use. There is no evidence before me that the Land is used for any other purpose and it is therefore my finding that RAAFA uses the Land exclusively for charitable purposes.

1. The application for review of the decision of the City of Mandurah to disallow the objection of Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc to the City's rate record for the 2008/2009, 2009/2010, 2010/2011 and 2011/2012 financial years in relation to the property at Lots 102, 711 and 212 Oakley Drive, Erskine is upheld.
2. That objection to the City of Mandurah's rate record for those financial years in relation to that property is allowed on the ground that there is an error in the rate record on the basis that the land in question is not rateable land under s 6.26 of the Local Government Act 1995 (WA).
3. The relevant rates notices are set aside.

I certify that this and the preceding [81] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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