A sale of land at Lot 45 Wright Road, Piara Waters in the State of Western Australia

Taxes and duties - Land tax - Exemption for rural business land - Exemption abrogated when rural business land is subdivided - Meaning of subdivided - Land not subdivided when conditional subdivision approval granted

Interpretation Act 1984 (WA), s 18, s 19

Land Tax Assessment Act 2002 (WA), s 2, s 5, s 15, s 20, s 29

Planning and Development Act 2005 (WA), s 135, s 138, s 143, s 145, s 146

Planning and Development Regulations 2009 (WA), r 20

Strata Titles Act 1985 (WA)

Town Planning and Development Act 1928 (WA), s 20

Declaration that the land was not subdivided for the purpose of the Land Tax Assessment Act s 15 by reason of the conditional subdivision approval

The money held under the Escrow Agreement, including any interest earned on that money, to be paid to the plaintiffs as being part of the balance of the purchase price due to them

1 JENKINS J: The plaintiffs owned land at Piara Waters in Western Australia which was exempt from land tax because it was rural business land under the Land Tax Assessment Act 2002 (WA) (LTA Act) s 29. On 2 August 2013, the plaintiffs contracted to sell the land to the first defendant. The effect of the conditions of the contract was that the plaintiffs were to pay any land tax due up to and including the date of settlement. However, the plaintiffs and the first defendant disagreed on whether the plaintiffs had an existing liability or, alternatively, a contingent liability to pay land tax. The possibility of an existing or contingent liability to pay land tax arose from a conditional subdivision approval for the land which was issued to the plaintiffs on 8 June 2012 (the conditional approval). The LTA Act s 15 provides that when rural business land is subdivided and other conditions are met, land tax is payable by the subdividing owner of the land for each of the five financial years reckoned retrospectively from and including the financial year in which the land is subdivided. The plaintiffs disagreed with the first defendant's assertion that the conditional approval was a subdivision of the land for the purpose of the LTA Act s 15.

2 On 4 September 2013, the plaintiffs and the first defendant entered into a written agreement (the Escrow Agreement) by which they agreed, amongst other things, that the first defendant would pay $641,660 to an escrow account on the date of settlement until the issue of the plaintiffs' liability to pay land tax was determined by a court and that the issue of the plaintiffs' liability to pay land tax would be referred to a court. Settlement occurred on the same date.

3 Pursuant to the Escrow Agreement, the plaintiffs seek a declaration that the land was not subdivided by reason of the conditional approval and an order that the money held under the Escrow Agreement (including any interest earned on that money) be paid to the plaintiffs. The first defendant seeks alternative declarations that the land was subdivided when the conditional approval was issued and that the plaintiffs were liable to pay land tax when the land was subdivided.

4 The second defendant has the general administration of the LTA Act, including responsibility for the assessment of land tax. The second defendant has filed a notice that he will abide by the decision of the court.

5 For the reasons which follow, the land was not subdivided by reason of the conditional approval. That being my determination, the parties are in agreement that the money held under the Escrow Agreement (including any interest earned on that money) should be paid to the plaintiffs as being part of the balance of the purchase price due to them.

6 The evidence upon which I make my decision is contained in a statement of agreed facts and two affidavits sworn by the firstnamed plaintiff.

7 Between 19 January 1993 and 4 September 2013, the plaintiffs were the registered owners of Lot 45 Wright Road, Piara Waters in the State of Western Australia, more particularly described in certificate of title volume 1936 folio 272 of deposited plan 226007 (the Land).

8 For the land tax assessment periods 2007/2008, 2008/2009, 2009/2010, 2010/2011, 2011/2012, 2012/2013 and 2013/2014 the plaintiffs received a 100% rural business exemption for land tax on the Land. The exemption was stated to be by reason of the operation of the LTA Act s 29.

9 On 7 March 2012 the plaintiffs, by their agent, applied to subdivide the Land into residential lots.

10 The Western Australian Planning Commission (WAPC) issued the conditional approval by letter dated 8 June 2012 to the plaintiffs' agent. It was titled 'Approval Subject To Condition(s) Freehold (Green Title) Subdivision' and it stated that the WAPC was 'prepared to endorse a deposited plan in accordance with the plan datestamped 08 March 2012 once the condition(s) set out have been fulfilled'. The conditional approval further provided that 'the deposited plan for this approval and all required written advice confirming that the requirement(s) outlined in the condition(s) have been fulfilled must be submitted by 8 June 2016 or this approval no longer will remain valid'. This was consistent with another statement in the WAPC's letter that the conditions had to be fulfilled before the copy of the deposited plan was submitted to the WAPC for endorsement. The reference to the deposited plan was a reference to the diagram or plan of survey which had to be submitted to the WAPC for approval once the conditions of the conditional approval had been complied with.

11 There were 39 conditions listed in the conditional approval. Some of them were straight forward and others required complex actions. A number of the conditions required government bodies to cooperate with the plaintiffs in order to fulfil the conditions and one condition required an expert to report that the Land was physically capable of development. The plaintiffs did not fulfil the conditions set out in the conditional approval. The WAPC has not endorsed its approval on a deposited plan or a diagram or plan of survey of the Land.

12 On 2 August 2013, the plaintiffs and the first defendant entered into a Contract for Sale of Land or Strata Title by Offer and Acceptance (for nonmembers of the Real Estate Institute of Western Australia (REIWA)) (Sale Agreement). The 2011 Joint Form of General Conditions for the Sale of Land published jointly by the Law Society of Western Australia and REIWA (2011 General Conditions) were incorporated into the Sale Agreement. Clause 7.1 of the 2011 General Conditions provides that the Seller must pay all Outgoings 'payable up to and including' settlement. Outgoings are defined so as to include land tax. There are separate provisions relating to the payment of land tax for subdivided land.

13 A Certificate of Land Tax Charges dated 6 August 2013 stated that the plaintiffs were not liable to pay any land tax charges on the Land for the 2013/2014 financial year. Contrary to this Certificate, the first defendant asserted that the plaintiffs had an existing liability, or, alternatively, a contingent liability to pay land tax up to the date of settlement.

14 On 27 August 2013, the plaintiffs' solicitor spoke by telephone to Steve Trehern, a senior revenue officer in the Land Tax Branch of the Office of State Revenue, about whether the conditional approval had triggered a liability for land tax. The contents of the telephone call are not in evidence. Mr Trehern sent an email on the same date to the solicitor which said, in part:

I can find no evidence of a subsequent approved subdivision of Lot 45 at Landgate that might trigger a 'clawback' assessment as provided under [the LTA Act s 15].

15 On 4 September 2013, the plaintiffs and the first defendant entered into the Escrow Agreement.

16 After the Escrow Agreement was signed and also on 4 September 2013, settlement of the purchase of the Land was effected. On the settlement date the first defendant became the registered owner of the Land. Since settlement, land tax has been payable on the Land because it is not being used to produce income from a rural business as required by the LTA Act s 29 in order to be exempt. However, the land tax status of the Land prior to the date of settlement may affect the amount of land tax payable by the first defendant in that if the Land was already subdivided, for the purpose of the LTA Act s 15, when settlement occurred, the first defendant will not be liable to pay land tax for any year that land tax has been charged: LTA Act s 15(5).

17 The LTA Act s 5 provides that land tax is 'payable' for each financial year for all land in Western Australia except land that is exempt under the LTA Act s 17. Section 17, relevantly, provides that land is exempt from land tax for an assessment year if it is exempt for the assessment year under the LTA Act s 20 or another provision of the LTA Act pt 3. The plaintiffs and the first defendant agree that unless the first defendant's preferred construction of the LTA Act s 15 is correct in its application to the facts of this case, the Land up until the date of settlement was exempt from land tax by virtue of the LTA Act s 29, which is contained in the LTA Act pt 3. Section 29 provides that land, except land in a nonrural zone, is exempt from land tax if it 'is or was used solely or principally on a commercial basis to produce income to the user from the sale of produce or stock in the course of carrying out one or more specified kinds of rural business'.

18 The issue between the plaintiff and the first defendant is whether, on the proper construction of the LTA Act, the Land was subdivided when the conditional approval was issued and, as a consequence, the plaintiffs had to pay land tax for each of the five years reckoned retrospectively from and including the financial year in which the Land was subdivided.

Newly subdivided rural business land, tax payable on

(1) Land tax is payable in accordance with this section when rural business land is subdivided if -

(a) the land was exempt from land tax under section 29 or subject to a concession under section 30 for any of the 5 financial years reckoned retrospectively from and including the financial year in which the land was subdivided; and

(b) the subdivision was not carried out only for the purpose of defining an area of land to be taken or resumed under an enactment relating to the compulsory acquisition of land.

(2) The land tax is payable by the subdividing owner of the land on the value of the taxable portion of the land for each of the 5 financial years reckoned retrospectively from and including the financial year in which the land is subdivided.

...

(5) If an amount of land tax has already been charged on any part of the taxable portion of the land under another provision of this Act for any of those 5 financial years, the amount of land tax payable for that year under this section is reduced by the amount already charged.

(6) For the purposes of subsection (2), the value of the taxable portion of the land for a financial year is -

(a) if the financial year is 2008/09 or earlier - the amount that bears to the unimproved value of the whole of the land at midnight on 30 June immediately before the financial year the same proportion as the area of the taxable portion bears to the whole area of the land; or

(b) in any other financial year - the amount that bears to the taxable value of the whole of the land for the financial year the same proportion as the area of the taxable portion bears to the whole area of the land.

(7) Nothing in this section affects the liability of any person for land tax on the taxable portion of the land for any financial year after that in which the land is subdivided.

(8) Despite section 17(4) of the Taxation Administration Act 2003, the Commissioner must make any reassessment necessary to give effect to this section.

20 Section 15 is in a division of the Act which contains special rules in respect of the assessment of land tax for particular types of land. It does not specifically state that it removes an exemption that is provided for in another part of the Act. However, that may be its effect in the sense that if rural business land, which would usually be exempt from land tax under the LTA Act s 29, is subdivided land tax becomes payable pursuant to s 15 not only from the date of subdivision but for the five financial years prior to the financial year in which the land was subdivided.

21 The LTA Act defines 'rural business land' to mean land on which a rural business has been or is being carried on. 'Rural business' is defined in relation to land, to mean 'the use of land on a commercial basis to produce income to the user from the sale of produce or stock in the course of carrying out a business' of a kind referred to in s 29(1)(a) or (b). There is no dispute that prior to settlement the Land was rural business land.

22 The meaning of 'subdivided' in the LTA Act s 15 is found in the LTA Act Glossary (the Glossary) cl 3 which states:

(a) a plan of subdivision of the land is approved by the Western Australian Planning Commission for the purposes of section 135 of the Planning and Development Act 2005; or

(b) a transfer, conveyance, lease or mortgage of any land is approved by the Commission under section 147(1) of that Act or an application for the creation and registration of a certificate of title is approved by it under section 147(2) of that Act and the effect of the approval is to allow a dealing with a part of the land which is less than a whole lot; or

(c) on an application for review under section 251 of that Act, the State Administrative Tribunal gives an approval referred to in paragraph (a) or (b); or

(d) in the case of land that is the subject of a strata plan -

(i) if the plan is required to be accompanied by a certificate under the Strata Titles Act 1985 section 25 - the plan is approved by the Commission; or

(ii) if not - a certificate required under the Strata Titles Act 1985 section 5B(2) is given by a local government;

(e) a statement is endorsed on a plan under section 25B of the Strata Titles Act 1985.

(2) An approval referred to in subclause (1) is conclusively presumed to have been given on the date appearing in the approval as endorsed on the plan, instrument or application referred to in that paragraph.

23 Given that cl 3(1)(a) says that land is subdivided when a plan of subdivision is approved by the WAPC for the purposes of the Planning and Development Act 2005 (WA) (the PD Act), it is necessary to have regard to the PD Act s 135, which relevantly states:

(b) amalgamate any lot with any other lot, whether within the same district or otherwise; or

(2) A person who contravenes subsection (1) commits an offence.

24 The PD Act s 138(1) says that the WAPC may give its approval under s 135 'subject to conditions which are to be carried out before the approval becomes effective'. In order to understand the parties' contentions it is necessary to refer to other provisions of the PD Act and the regulations made under it which relate to the subdivision of land.

25 The Planning and Development Regulations 2009 (WA) (the PD Regulations) set out the procedure for making an application for approval to subdivide land, under the PD Act s 135. Regulation 20 says that to make an application under s 135 a person must give the WAPC an application in an approved form and eight copies of a plan which illustrates the proposed subdivision and contains other information (a plan of subdivision). The WAPC is statutorily obliged to consider various matters when it receives an application under s 135 and to consult with other bodies. The PD Act s 143(1) states:

(1) After considering any objections or recommendations contained in a memorandum forwarded to the Commission under section 142, and any advice of a relevant environmental condition forwarded to it under that section, the Commission is to -

(c) approve the plan of subdivision and require the applicant for approval to comply with such conditions as the Commission thinks fit before the diagram or plan of survey will be endorsed with the approval of the Commission.

26 Section 143 distinguishes the plan of subdivision which is required by reg 20 to be submitted with an application to subdivide land from the diagram or plan of survey of the subdivision. The latter document must be endorsed with the approval of the WAPC when the applicant for subdivision has complied with the conditions the WAPC has placed on the subdivision approval.

27 Details of the endorsement procedure are in the PD Act s 145. Section 145(1) provides that an applicant 'to whom approval of a plan of subdivision has been given' may, within prescribed periods, submit to the WAPC a diagram or plan of survey of the subdivision and request the WAPC to approve the diagram or plan of survey of the subdivision. The PD Act s 145(4) states:

(4) Subject to subsection (6), if the Commission is satisfied that -

(a) the diagram or plan of survey is in accordance with the plan of subdivision approved by the Commission; and

(b) if that approval was given subject to conditions -

(i) the conditions have been complied with or will be complied with at the time a certificate of title is created or registered; or

(ii) in the case of a diagram or plan of survey submitted in relation to a stage of subdivision, the conditions imposed in relation to that stage of subdivision, or that in the opinion of the Commission are relevant to that stage of subdivision or the subdivision as a whole, have been complied with or will be complied with at the time a certificate of title is created or registered,

the Commission is to endorse its approval on the diagram or plan of survey.

28 The prescribed period referred to in s 145(1) is either three or four years after the Commission has approved the plan of subdivision, depending on the number of lots created. Section 145(7) provides that if at the expiration of the prescribed period a diagram or plan of survey of the subdivision has not been submitted to the WAPC, 'the approval of the plan of subdivision ceases to have effect and the diagram or plan of survey cannot be submitted' to the WAPC. Section 146(1) provides that the Registrar of Titles is not to create or register a certificate of title for land the subject of a plan of subdivision unless a diagram or plan of survey of the subdivision of that land has been endorsed with the approval of the WAPC within a specified period of the endorsement.

29 Thus, the scheme of the PD Act and PD Regulations requires an application to subdivide land to go through a process before it is complete. In broad terms the process is as follows:

(1) an application, comprising an approved form and a plan of subdivision, is made to the WAPC to subdivide the land;

(2) the application may be approved with or without conditions;

(3) an applicant to whom approval of a plan of subdivision has been given may submit a diagram or plan of survey of the subdivision to the WAPC and request it to approve the diagram or plan of survey of the subdivision;

(4) the WAPC may endorse its approval on the diagram or plan of survey if it is in accordance with the approved plan of subdivision. In the case of an approval of a plan of subdivision that was given subject to conditions, the WAPC may only endorse its approval on the diagram or plan of survey if it is satisfied that the conditions it imposed have been complied with or will be complied with at the time a certificate of title is created or registered or in the case of a diagram or plan of survey submitted in relation to a stage of the subdivision, the conditions imposed in relation to that stage of subdivision have been complied with or will be complied with at the time a certificate of title is created or registered; and

(5) the Registrar of Titles can create or register a certificate of title for land the subject of a plan of subdivision if the diagram or plan of survey of the subdivision of that land has been endorsed with the approval of the WAPC.

30 In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 the plurality of the High Court said:

This court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy [47].

31 In Alcan the court was required to construe the Taxation (Administration) Act (NT) and the way in which stamp duty was assessed in a particular situation. The court found that the words in the relevant section bore their natural and ordinary meaning, which was not displaced or reversed by contextual or historical considerations. Further:

The general purpose of the Act to raise revenue is insufficient to support an intention to exclude a clearly expressed definition and to substitute a quite different meaning [53].

32 Although it was unnecessary for it to do so given the basis on which the appeal was allowed, the court considered briefly the appellant's argument that Anderson v Commissioner of Taxes (Vic) [1937] HCA 24; (1937) 57 CLR 233 could be relied on for the proposition that the imposition of a tax must be in plain terms. The appellant also relied on the principle that penal statutes should be construed strictly, as exemplified in Waugh v Kippen [1986] HCA 12; (1986) 160 CLR 156, 164. In respect of these arguments the plurality said:

First, tax statutes do not form a class of their own to which different rules of construction apply; they are to be construed by application of the settled principles referred to above. Secondly, the fact that a statute is a taxing act, or contains penal provisions, is part of the context and is therefore relevant to the task of construing the act in accordance with those settled principles. Whether or when 'rules' of the kind considered in Anderson and Waugh v Kippen may be relied upon need not be decided [57].

33 The parties also referred me to the wellknown dicta of the plurality in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. Their Honours said:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court 'to determine which is the leading provision and which the subordinate provision, and which must give way to the other'. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume, Griffith CJ cited R v Berchet to support the proposition that it was 'a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent' [69] - [71].

34 These common law principles are consistent with the provisions of the Interpretation Act 1984 (WA) s 18 and s 19. Section 18 provides that when interpreting a provision of a written law, a construction that promotes the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object. Section 19 provides that when interpreting a statutory provision, if any material not forming part of the written law is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material either to confirm its meaning (s 19(1)(a)) or to determine its meaning, when the provision is ambiguous or obscure or its ordinary meaning, in the context of its purpose or object, leads to a manifestly absurd or unreasonable result (s 19(1)(b)).

35 The plaintiffs submit that given that the PD Act s 135(2) makes it an offence to subdivide land without the WAPC's approval, the subdivision of land contemplated by s 135 must be the actual subdivision of a lot, and not a preliminary step of obtaining approval, conditional or unconditional, for such a subdivision. Thus, they submit that rural business land is not subdivided for the purpose of the LTA Act s 15 if the WAPC has granted only conditional approval for subdivision in accordance with a plan of subdivision submitted to it.

36 The plaintiffs submit that the precise point in time that approval of a plan of subdivision is treated as a subdivision for the purpose of the LTA Act is made clear by the Glossary cl 3(2) which provides that an approval of a plan or subdivision is 'conclusively presumed' to have been given on the date when the WAPC's approval is endorsed on the plan of subdivision.

37 The plaintiffs make the point that no endorsement on any plan was made and, nor could it have been made when the WAPC sent the conditional approval to the plaintiffs. The WAPC's letter containing the conditional approval expressly stated that an endorsement would be made if the conditions specified in the WAPC's letter were fulfilled. This is consistent with the scheme of the PD Act. As of the date of settlement, the conditions specified in the conditional approval had not been fulfilled.

38 The plaintiffs also rely on the PD Act s 138(1), s 143, s 145 and s 146 to support their contention that a conditional approval is not an approval for the purposes of the Glossary cl 3(1)(a).

39 The plaintiffs submit that having regard to those provisions and the scheme of the PD Act it is clear that a conditional approval is not an effective approval (s 138) and only an effective approval is an approval for the purposes of s 135. Until there is an effective approval, there is no approved subdivision that can lawfully result in the division of a lot without contravening the PD Act s 135(2). That is the point in time contemplated by the LTA Act s 15 and the Glossary cl 3(1)(a) as triggering the liability for land tax on the basis that rural business land has been subdivided.

40 The plaintiffs say that the statutory purpose of levying land tax, retrospectively, on land that is to be subdivided would not be served if land tax was imposed on land that may never be subdivided because conditions imposed by the WAPC on the approval of subdivision are never met and the land continues to be used as rural business land. A construction which has the effect of levying land tax, retrospectively, on land that has conditional subdivision approval but which is not subdivided should not be accepted because it does not serve the policy or purpose or mischief to which the LTA Act s 15(1) is directed.

41 The first defendant submits that the Glossary cl 3(1)(a) identifies that the point at which the WAPC approves a plan of subdivision, whether or not it is subject to conditions, is when land is to be taken to be subdivided for the purpose of the LTA Act. It submits that approval, even with conditions, of a plan of subdivision is a separate stage to approval of a diagram or plan of survey or the endorsement of the diagram or plan of survey. If parliament had intended to refer to one of these other stages as being when land is subdivided it could easily have done so. The first defendant says that regard must be had to the ordinary meaning of the words used by the legislature.

42 The first defendant submits that an approval of a plan of subdivision, whether or not it is subject to conditions, is an approval for the purposes of the PD Act s 135 because it is an approval under the PD Act s 143. It submits that the requirement in the LTA Act for land to be subdivided does not require an effective or full subdivision. Rather, it only requires a plan of subdivision to be approved for the purpose of the PD Act s 135 and that occurs when approval, whether conditional or unconditional, is given under the PD Act s 143.

43 The first defendant submits that the plaintiffs' position is not supported by the language of the Glossary cl 3(1) (a) which refers to the approval of a plan of subdivision and not to endorsement of a diagram or plan of survey. The first defendant says that the plaintiffs impermissibly ignore the words used by the legislature and read the latter term when the legislature has used the former.

44 As to the plaintiffs' recourse to the Glossary cl 3(2) to support their argument, the first defendant says that it is only an evidentiary provision. It speaks of a means by which approval of a plan of survey may be proved and nothing more. It does not say what amounts to approval of a plan of subdivision or say how else such approval may be proved.

45 As to the plaintiffs' submission based on the purpose of the LTA Act s 15, the first defendant says that there is equally a policy or purpose discernable in its interpretation of the LTA Act. That is, that the legislature intends that the land tax exemption should not apply to land when its apparent purpose has been changed and its value has been increased by the approval of a plan of subdivision.

46 In order to determine whether land tax was and remains payable by the plaintiffs for the period in which they owned the Land it is necessary to determine whether the LTA Act s 15 applied to the Land after the grant of the conditional approval.

47 By inserting the meaning of when land is subdivided, found in the Glossary cl 3(1), into the LTA Act s 15(1) the following propositions become apparent. Land tax is payable on rural business land:

(1) when a plan of subdivision of the land is approved by the WAPC for the purposes of the PD Act s 135;

(2) if the land was exempt from land tax under the LTA Act s 2 for any of the five financial years reckoned retrospectively from and including the financial year in which a plan of subdivision of the land is approved by the WAPC for the purposes of the PD Act s 135; and

(3) the WAPC's approval for the purposes of the PD Act s 135 of a plan of subdivision of the land was not carried out only for the purpose of defining an area of land to be taken or resumed under an enactment relating to the compulsory acquisition of land.

48 It is common ground between the parties that (2) and (3) are satisfied in respect of the Land, so that only (1) above is in issue. Before dealing with (1), I note that the LTA Act s 15(2) states that if land tax is payable, it is only payable on the taxable portion of the land. Section 15(3) states how the taxable portion is determined and it is reasonably clear that s 15(3) would not exclude land from forming part of the taxable portion, if it was no longer exempt because of subdivision.

49 The question for me is whether the conditional approval which was granted under the PD Act s 143(1)(c) amounted to a plan of subdivision approved by the WAPC for the purposes of the PD Act s 135?

50 In my opinion, the answer to this question in turn depends on the meaning of the phrase 'for the purposes of [the PD Act s 135]' in the Glossary cl 3.

51 The phrase 'for the purposes of [the PD Act s 135]' is a limiting phrase, which must be given meaning. The presence of the phrase means that it is not when any plan of subdivision is approved by the WAPC that land is subdivided. Rather, it is only when a plan of subdivision is approved by the WAPC for the purposes of the PD Act s 135 that rural business land is subdivided and land tax is payable on it.

52 The apparent and relevant purpose of the PD Act s 135 is to make it an offence to subdivide a lot without the approval of the WAPC. Subdivide is not defined in the PD Act but subdivision is defined to include amalgamation. This inclusive definition is not helpful to the resolution of the issue before me.

53 What is clear from the wording of the PD Act s 135 is that the word subdivide in that section means something other than a subdivision approval. This is because it would not make sense if s 135 made it an offence to obtain subdivision approval, conditional or unconditional, from the WAPC, without the WAPC's approval. Simply stating it like that is enough to show that subdivide in s 135 does not bear that meaning. What the section is clearly directed to is the subdivision of a lot in a general and nontechnical sense.

54 The Shorter Oxford English Dictionary defines subdivide to mean 'to divide (a part of a divided whole); to divide again after a first division'. The Macquarie Dictionary defines subdivide to mean 'to divide (a part, or an already divided whole) into smaller parts; divide anew after a first division' and 'to divide into parts'. Thus, the PD Act s 135 makes it an offence to divide a lot of land into parts, without the approval of the WAPC.

55 Logically, by stating in the Glossary cl 3 that land is subdivided when a plan of subdivision is approved 'for the purposes of [the PD Act s 135]', the legislature must mean that land is subdivided when a plan of subdivision is approved which avoids the prohibition in the PD Act s 135 against subdividing a lot into parts without the approval of the WAPC. This meaning is consistent with the PD Regulations which set out the procedure for applying for 'the approval of the [WAPC] under [s 135]'. The question for me is whether the conditional approval was a plan of subdivision approved by the WAPC which avoided the prohibition in the PD Act s 135. In other words, did the conditional approval legalise the division of the Land into smaller lots?

56 I am of the opinion that this question must be answered 'no'. The conditional approval did not make it legal to divide the Land into smaller lots. The correctness of this proposition can be proved by asking whether the plaintiffs would have breached the PD Act s 135 and committed an offence if they had obtained the conditional approval and, without complying with the other stages of subdivision or without complying with the conditions of the conditional approval, they had divided the Land into smaller lots. The answer, selfevidently, is yes because even with the conditional approval the plaintiffs could not divide the Land into smaller lots. That could only occur when further stages of subdivision had been completed. The conditional approval was but the first step in the process of legalising the division of the Land into smaller lots, for the purposes of the PD Act s 135. It did not satisfy the purposes of the PD Act s 135.

57 I am confirmed in this interpretation when I take into account the alternative criteria in the Glossary cl 3(1) for determining when land is subdivided. Putting aside the exception for a lease which does not contain an option to purchase the land, the Glossary cl 3(1)(b) provides that land is subdivided when an otherwise registrable instrument of conveyance is approved by the WAPC under the PD Act s 147(1). Once approval is given by the WAPC it is lawful for the registrar of titles to register the conveyance. The Glossary cl 3(1)(b) further provides that land is subdivided when an application for the creation of a new certificate of title for a portion of land has been endorsed with the approval of the WAPC under the PD Act s 147(2). Neither s 147(1) nor s 147(2) permits the WAPC to give conditional approval. Thus, land that is subject to the Glossary cl 3(1)(b) could not be regarded as subdivided if anything less than full approval was given by the WAPC. Clause 3(1)(c) is not relevant because it provides for when the State Administrative Tribunal exercises the powers of the WAPC on review.

58 The Glossary cl 3(1)(d) says land which is the subject of strata plan is subdivided when the WAPC gives a certificate of approval or, if that certificate is not required, a certificate of occupancy or a building approval certificate. One of these certificates must accompany the strata plan when it is lodged for registration under the Strata Titles Act 1985 (WA). The Strata Titles Act does not permit a conditional certificate to be given and the grant of one of the certificates is the last or one of the very last steps that is taken before registration of the strata plan.

59 Finally, the Glossary cl 3(1)(e) says that land which is the subject of a strata plan and plan of resubdivision or consolidation for a strata scheme is subdivided when it has endorsed on it a statement that the approval of the WAPC has been granted. What is endorsed is the final approval of the WAPC and not a conditional approval.

60 Thus, consistent with the dicta in Project Blue Sky [69], the construction of the Glossary cl 3(1)(a) which I prefer is consistent with the language of the Glossary cl 3(1), viewed as a whole. That is, each of the subclauses in cl 3(1) is consistent that land is only subdivided when a final and unconditional approval has been given to enable the subdivision to be registered. None of the subclauses require actual registration of the newly created lots in the subdivision but each subclause requires an approval which is substantially closer to registration than the conditional approval given in this case.

61 My preferred construction is also consistent with the PD Act s 138(1) which requires the conditions on a subdivision approval to be carried out before the approval becomes effective.

62 It is unnecessary for me to decide whether an unconditional approval granted under the PD Act s 143(1)(c) would amount to a plan of subdivision approved by the WAPC for the purpose of legalising the division of the Land into smaller lots or whether only an endorsed diagram or plan of survey would suffice. However, I lean towards the latter view. What is clear is that the grant of the conditional approval did not meet the definition in the LTA Act s 15 of when land is subdivided.

63 I acknowledge that the reference in the Glossary cl 3(1)(a) to a plan of subdivision being approved by the WAPC, at first blush, makes it arguable that it is the initial decision of the WAPC to approve a plan of subdivision, with or without conditions, which is the point at which land is subdivided. However, when the whole of the Glossary cl 3(1)(a) is considered, in particular the words 'for the purposes of [the PD Act s 135]', and the purposes of s 135 are taken into account, it is clear that a conditional approval of a plan of subdivision does not satisfy the criteria for when land is subdivided contained in the Glossary cl 3(1)(a). The reference in cl 3(1)(a) to a plan of subdivision being approved must be interpreted more broadly as being the finalisation of the subdivision process with the approval of the WAPC, so that the creation of new lots would not be an offence under the PD Act s 135. Only then does an approval of a subdivision meet the purposes of the PD Act s 135.

64 As the meanings of the Glossary cl 3(1)(a) and, thus, s 15(1) are clear without recourse to historical considerations, it is unnecessary for me to provide a detailed analysis of the arguments of the parties based on the legislative history of the LTA Act and the PD Act. It is sufficient for me to say that I accept the plaintiffs' argument that prior to the enactment of the PD Act, the LTA Act, read with the Town Planning and Development Act 1928 (WA) (Rep) (TPD Act) s 20(2), relevantly provided that land was subdivided when a plan of subdivision was endorsed with the approval of the, now, WAPC. The PD Act replaced the TPD Act but its purpose was to consolidate the existing planning legislation and not to change it, significantly. The explanatory memorandum to what was then the Planning and Development Bill, which became the PD Act, said that cl 135 'provides that approval is required for subdivision'. When the PD Act was enacted, consequential amendments were made to other Acts, including deleting the reference to the TPD Act s 20(2) in the Glossary cl 3(1)(a) and substituting a reference to the PD Act s 135.

65 My preferred interpretation of the Glossary cl 3(1)(a) is consistent with the legislative intention being to retain the same meaning of when land is subdivided in the Glossary cl 3(1)(a), despite the repeal of the TPD Act and the enactment of the PD Act.

66 However, what the legislative history suggests is that insufficient consideration was given to whether the Glossary cl 3(2) should also have been amended at the time the TPD Act was repealed and the PD Act enacted so as to delete the confusing reference in that clause to '... the approval as endorsed on the plan ...'. This is because, as a consequence of the procedural changes made to the stages of subdivision at that time, a plan of subdivision is no longer endorsed with the approval of the WAPC as it used to be under the TPD Act.

67 For these reasons the plaintiffs are entitled to a declaration that the Land was not subdivided for the purpose of the LTA Act s 15 by reason of the conditional approval. Thus, at the time of the sale of the Land to the first defendant they had neither an existing or contingent liability to pay land tax in respect of the Land. They are further entitled to an order that the money held under the Escrow Agreement (including any interest earned on that money) be paid to them.