Bevelon Investments Pty Ltd v City Of Melbourne

Bevelon Investments Pty Ltd v City Of Melbourne - [1976] HCA 49 - HCA 1976 case summary — Zoe

[10]

The applicant's second submission was that s. 267 infringed s. 114 of the Constitution. It had, of course, to be conceded that in terms the section did not impose a tax on any property of the Commonwealth: further, that it could not. Certainly it did not in terms purport to tax the Commonwealth in respect of any property of the Commonwealth. Nor does the section tax the owner in respect of the Commonwealth property: it taxes the owner in respect of the ratable property it owns. But, according to the applicant's argument, by taxing the owner because the occupant of the property is not liable to be taxed in respect of that occupancy, the statute places an impediment in the way of the Commonwealth when it needs or desires to lease property. It was asserted by counsel as notorious that if the intending lessor was liable to pay rates in respect of the premises intended to be leased, the asking rental would for that reason be higher, at least by the amount expected to be paid for rates. Of this there was no evidence. Nor can I accept it as a proposition judicially known. I suppose the factors which determine rental are multifarious; there may possibly be a discount offered rather than a premium demanded for an occupancy by the Commonwealth of a large number of floors in a building under a single lease. But however that may be, by no stretch of reasoning can it properly be concluded that, because due to the section an owner may ask a higher rental than otherwise he might, a tax is thereby imposed on the intending lessee, in this instance the Commonwealth, upon or in respect of the subject matter of the lease. Parenthetically, it may be said that, in this case, the agreed rental is fixed upon terms that the applicant should pay whatever is properly demanded for rates. The relevant operation of s. 267(1) ends with the owner being liable for the rate and the Commonwealth not liable for the rate in respect of the Commonwealth's occupancy of the premises under the lease. In my opinion, this submission also should be rejected. I would refuse the application for a rule nisi to review the decision of the magistrate.

[16]

On behalf of the applicant it was conceded that the Act did not impose any liability on the Commonwealth to pay the rate. However, it was said that the rate was a tax on the land, and that this meant that it was a tax on every interest in the land, including the leasehold interest that had been carved out in favour of the Commonwealth, and that it was therefore a tax on the property of the Commonwealth, notwithstanding that the Commonwealth is not liable to pay it. Reliance was placed on the dicta of Latham C.J. in Essendon Corporation v. Criterion Theatres Ltd. [8] in support of the contention that an interest of a lessee is property within s. 114. It is quite unnecessary to discuss whether those dicta should be followed; it may be assumed (without deciding) that the leasehold interest was property within s. 114. However, the Act does not tax that leasehold interest. When s. 267 imposes a tax on the owner, instead of the occupier, it must refer to the owner of the freehold. Counsel for the applicant referred to the definition of owner of any property in s. 3(1) of the Act, namely, "the person for the time being entitled to receive, or who if the same were let to a tenant at a rack rent would be entitled to receive the rack rent thereof". He argued, on the authority of London Corporation v. Cusack-Smith [9] , that if the Commonwealth had taken a lease of the land at less than a rack rent it would have been an owner within that definition. It was not suggested that the land in the present case was not let at a rack rent and it is therefore difficult to appreciate how this argument would assist the applicant, but in any case the definition in s. 3 only applies "unless inconsistent with the context or subject-matter", and it would defeat the object of s. 267(1) (b) to construe that provision as meaning that where the Commonwealth was occupier under a lease under which less than a rack rent was payable the Commonwealth should be deemed to be the owner for the purposes of the paragraph. Section 267(1) (b) expressly states that the rate is levied upon the owner of the ratable property; it is implicit in this statement that the owner is levied in respect of his own interest and not in respect of the interest of someone else. The applicant is rated by reference to the value of its own property, and not by reference to the value of the Commonwealth's leasehold interest. I should, however, make it clear that I do not suggest that if the rate had been imposed by reference to the value of the Commonwealth's interest it would have been a tax on the property of the Commonwealth. In my opinion a tax on A, quantified by reference to B's property, is not a tax on B's property, unless A stands in some relationship to that property and the tax is imposed by reference to that relationship.

[20]

As I understand it, "places" here means fixed localities. Whether or not a "place" must be part of the earth's surface together with any structures thereon, is an unnecessary question for the decision of the present case. If I had to answer it, I would be inclined to think that an upper storey of a building held by a strata title could be a place acquired for public purposes. But I doubt the proposition that obtaining a leasehold interest or a temporary licence to occupy a place would amount to acquisition in the relevant sense. Certainly I would not agree that the hiring of a hall for use as a polling booth on election day - as was mentioned in argument - or the use of a city park for an afternoon's military ceremonial would amount to an acquisition of a place by the Commonwealth for the purposes of s. 52. In short, as I understand s. 52, "places acquired by the Commonwealth" means places which upon acquisition the Commonwealth holds by virtue of a proprietary right. Since in my opinion the doubt expressed by Windeyer J. was well founded, and the Commonwealth does not acquire a place simply by taking a lease of it, I do not need to express any opinion on the further question whether a portion of a building, to which a separate title can be obained, is a place within s. 52(i.). When the Commonwealth takes a lease of a place it does not "acquire" the place; what it acquires is a leasehold interest. A place will be acquired by the Commonwealth within s. 52(i.) only if the Commonwealth has, in one way or another, acquired the place itself, that is, has acquired full property in respect of the place. The words of s. 52(i.) stand in marked contrast to those of s. 51 (xxxi.). The latter provision refers to the acquisition of "property", a comprehensive term which of course includes leasehold interests. Section 52(i.) refers to "places" which have been "acquired". A constitutional provision whose effect, as has been held, is that when a place is acquired by the Commonwealth for public purposes the State in which the place is situated is deprived of the power to make a law with respect to that place and the operation of State laws formerly applicable within the place is terminated, is not likely to have been intended to apply whenever the Commonwealth obtains a right, however temporary, to occupy a place for public purposes - if the provision had such an application it would tend to throw the administration of the law into great confusion. But apart from that consideration the words "places acquired" do not, in their ordinary and natural sense, have the same meaning as "places in respect of which an interest is acquired". 1. (1970) 123 C.L.R. 89. 2. (1970) 124 C.L.R. 262. 3. (1970) 125 C.L.R. 93. 4. (1970) 123 C.L.R., at p. 124.

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