"In or about October of 2008, I retired for health reasons, I no longer used any land for the purpose of the horse-related business."

However it transpired during his evidence and the evidence of Ms Waterston, that that statement was wrong. It was apparent from the evidence, that Mr Pope was still carrying on his farrier business although perhaps at a reduced level of activity. Further, he still had 8 horses of his own on the land and he had horses agisted on the land what he suggested were for "friends". None of these matters were mentioned in his witness statement.

Annexed to Mr Pope's written statement was a letter he wrote for the purpose of the applicant obtaining a Land Tax Exemption pursuant to s.66 of the LTA. The letter was written on 16 September 2008. In the letter he described the use of the land in the following terms: "horse agistment and associated recreational outdoor activities has been the main focus". Later in the letter, he stated: "Although the property at first glance may seem to be used for horse agistment, these horses are used for and in connection with a business, its primary purpose of which is to provide outdoor sporting and recreational pursuits. To encourage this aspect facilities include and indoor and outdoor arena, show jumps, cross-country course, and trail riding areas, all of which are necessary for and not separated from the business of horse agistment."

1. Mr Pope said he wrote the letter of September 2008 because he believed it was unjust that the applicants should have to pay land tax on the land.
2. During the cross-examination of Mr Pope, he often broke out into long lectures without answering the question asked. I gained the impression that this behaviour was a ruse to avoid having to answer the question that was being asked by Mr Kotros, counsel for the respondent, who was cross-examining him at the time.
3. I further gained the impression, that Mr Pope was an unsatisfactory witness. All the above matters gave me the impression that he was "batting" for the applicant when he stated that the prime use of the land at the relevant time was for cattle-grazing. Mr Pope is receiving substantial benefit from the applicant in terms of rent he received for the cottages and the accommodation in the farm house. Further, it was only during his cross-examination, that he admitted that he was keeping horses for agistment.
4. In a letter of 28 August 2012, which was annexure 2 to his witness statement, Mr Pope stated:

"Sharon (Ms Waterston) was using all the property for her cattle, especially when the area was under water in winter and no grass in summer."

This statement clearly ignored the fact that Ms Waterston only had 7 cows on the property towards the end of 2008 and a total of approximately 24 horses (that is 8 belong to herself and her daughter and approximately 16 agisted).

1. Thus I have considerable doubt as to the veracity of Mr Pope's evidence and believe it should largely be put to one side except where I have indicated or will indicate otherwise.

1. Ms Waterston's written statement and Annexures, on their face, gave the impression that she used the whole of the land after Mr Pope retired in September/October of 2008 for the grazing of her 70 head of cattle. She did state in the documents, that at times the cattle were moved off the land because of flooding, but at other times they were moved from paddock to paddock according to the grass availability. She stated, "I agisted a few horses on the land. Mr Pope also had some of his own horses grazing near his house". Further she stated she maintained her herd of cattle for the purpose of selling them or their natural increase and that all cows born during 2008 and 2009 were sold except for those retained to augment the herd. However, there does not appear to have been any calves born at all during 2008 and if there was calves born in 2009 it was only to the later part of that year.
2. Ms Waterston in her oral evidence, stated that her witness statements and the letters annexed thereto were typed by the applicant, she believes by a member of the Mondous family, probably Kameel Mondous. (Ms Waterston at times had dealings with three members of the Mondous family, Sam Mondous and his adult children Kameel and Natalie Mondous, all representing the applicant).When certain matters were pointed out to her that were contained in the witness statement and the letters she seemed somewhat surprised. For example, in Annexure 2, being a letter dated 13 October 2008, it is stated:

"On the property at the time, it had approximately 70 cattle and calves. I moved the cattle 3 months into my lease due to fixing up the fencing and the troughs due to not working."

1. It turned out, that the 70 head of cattle were on the property at the commencement of her agreement with the applicant in or about June of 2007. They were moved off the property a few months after that time. It is unclear who the cattle belonged to, they may have belonged to the Mondous family, the applicant or some third party. In any event it does appear that they were trespassing on the land. It then became clear, that the only cattle owned by Ms Waterston during 2007 were the 15 head of Friesian cattle that I have described. Those cattle were later reduced to 7, 8 having been sold.
2. I gained the impression, that the letter of 13 October 2008 was annexed to Ms Waterston's witness statement, to mislead the Tribunal into believing, that she was using the land to graze 70 head of cattle. I also gained the impression, from Ms Waterston's surprise when this was pointed out to her, that this misleading statement arose from the person who typed the letter which was not Ms Waterston.
3. I thus gained the impression that Ms Waterston had been "set up" by the applicant in relation to stating matters in her witness statement and Annexure, which were not true or were designed to be misleading.

1. Primary Production is relevantly defined in LTA s.64(1)(b) to mean:

"the maintenance of animals or poultry for the purpose of selling them or their natural increase or bodily produce;"

1. S.66 of the LTA sets out the Exemption that the applicant is claiming. There is no issue in relation to subparagraphs (a) and (b) of that section. The issue relates to subparagraph (c). Section 66 reads as follows:

66. Exemption of primary production land in greater Melbourne but not in an urban zone

Land is exempt land if the Commissioner determines that the land comprises one parcel -

(a) that is wholly or partly in greater Melbourne; and

1. S.110 of the TAA provides that on review, the taxpayer has the onus of proving the taxpayer's case. In this case that means that the applicant has the onus of proving its case.

Whether the land is used for Primary Production

1. The definition in s.64(1)(b) of the LTA relevantly means for the present purposes that there must be animals maintained on the land for the purpose of selling them or their natural increase. As I have previously stated, the parties have agreed that the only relevant animals for the purpose of s.66 in this proceeding are the cattle.
2. I find that on 31 December 2008 there were 7 cattle on the whole of the land. They were Friesian cattle but they were not on the land for the purposes of their milk. In fact the cattle were not being milked at all. I further find, that none of those cattle were pregnant at the relevant time. Neither had any steps been taken to impregnate the cattle at that time. Ms Waterston gave evidence that she brought a bull onto the land some time in 2009. In order to determine, the purpose for which the 7 cattle were being maintained on the land, it is proper that I should look at the objective facts. As I have previously stated the 7 cattle were a Friesian breed. It is known in the farming industry and Ms Waterston agreed, that this is a breed primarily used for milk. It is not a breed usually used for the purpose of meat production. Ms Waterston also agreed that she did not milk the cows and did not intend to milk the cows, she said she intended to increase the herd for meat production.
3. There is no documentary evidence, as to calves being sold that were produced by the Friesians at a later time. For that matter, there is also no documentary evidence in relation to calves that may have been produced by 7 "black" cows and 1 Jersey cow that were purchased by Ms Waterston some time in 2009.
4. There was no evidence whatsoever as to the physical condition of the 7 Friesian cattle that were on the property on 31 December 2008. That is I was not told whether they were thin, fat or otherwise. Further I was not told whether they were capable or otherwise of producing offspring. It was unclear to me whether the offspring that were born apparently late in 2009 were the offspring from the Friesian cattle or from the black cattle and Jersey cow which were purchased or all. Taking all the above matters together, in spite of Ms Waterston saying she intended to use the cattle for reproduction and then sale of the offspring for beef, the objective evidence all points the other way. Friesian breed of cattle are not usually used for beef. The herd was so small that it was unlikely that there would be a commercial element to it. In fact there was no evidence or no sufficient evidence called of any commercial element. No evidence was produced, as to whether calves were born from the herd present on the property in December 2008 or the commercial value of such calves.
5. Mr Korman, counsel for the applicant, emphasised in his submissions that I should look at the intention of the occupier of the land which he stated was to run cattle on the land for the purpose of sale. However, there was no reason given as to why there were so few cattle on the land if that was the intention of Ms Waterston.
6. Mr Korman also referred to the case of Saville v Commissioner of Land Tax (NSW) [1980] 12 ATR 7 and said that as there were cattle on the property on 31 December 2008, that is the only date I should look at to see if there was primary production. Even if I accept that submission, it is difficult on the evidence before me to find that these cattle were being kept for the purpose of selling or natural increase. I have considerable scepticism of the evidence of Ms Waterston, and the objective facts all lead to the opposite conclusion. These cattle were inherited from Ms Waterston's father. She did not purchase them at all and as a consequence it is likely she had no specific intention in mind when she inherited the cattle or at 31 December 2008. In my view, it is more likely that the cattle were being kept until Ms Waterston decided what to do with them. It is unlikely that she would have kept these cattle for the purpose of beef production or their sale.
7. Ms Waterston did give evidence that she kept cattle as pets. When she bought a herd of 8 cattle in 2009 one included a Jersey cow. When I pointed out to her that the Jersey cows were a breed that was used for milking rather than beef, she readily agreed to that proposition and stated that she bought that cow for a pet. Thus on the state of the evidence, I cannot be satisfied for what purpose the herd of 7 cattle were being maintained at 31 December 2008. Further, she stated that at the present time she uses her cattle solely for sporting purposes in a pursuit called "cutting".
8. It is also noted, that a livestock owner of cattle, was by law required to have a property identification code under the National Livestock Identity System. The property identification code is required by law for the property on which livestock is grazed. Ms Waterston readily agreed that at the relevant time she did not have such a code.
9. Therefore, for all the reasons stated above, it necessarily follows that the land was not being used for primary production within the meaning of s.66 of the LTA: as the cattle were not being kept for the purposes of sale or their natural increase and the proceeding must fail on that point.

Whether land was primarily used for Primary Production

1. Having found that the land was not used for primary production, I do not have to decide what its primary use was. However, because the matter was argued before me and in case I am wrong on the finding in relation as to primary production, it is desirable that I make findings as to whether the land was used primarily for primary production.
2. The use to which the land was put as at 31 December 2008 was as follows:

1. for rental purposes and residential purposes by Mr Pope. That is he was both living on the land with his partner in the farm house and had two tenants paying him rent for the two cottages on the property; 2. for the agistment of horses owned by Mr Pope;

1. for the agistment by Mr Pope for reward of horses owned by others;

1. for the maintenance of horses owned by Ms Waterston and her daughter; 2. for the agistment by Ms Waterston for reward of horses owned by others; 3. for a farrier business conducted by Mr Pope; 4. for the grazing of 7 cattle owned by Ms Waterston.
2. The meaning of "primarily" was considered by Lush J in Abbott v Commissioner of Land Tax [1979] VicRp 31; [1979] VR 297 at 302 where His Honour stated:

"In construing the word 'primarily' in its application to a case where a parcel of land is divided into two parts, one of which is devoted to an exempt use and one not, it must be remembered that the question is whether the whole of the parcel is primarily used for the exempt purpose. In my opinion, it is not sufficient to inquire whether some difference can be discerned between the uses to justify classifying one as the main use or predominant use. The predominance must be of such a degree as to impart a character to the parcel as a whole... Further, it is the uses of the land which have to be considered, not the reasons in the mind of the owner for adopting or permitting those uses."

1. Further the primary production use must not be minimal, slight, intermittent or spasmodic (see Clarke v Commissioner of Land Tax (NSW)[1980] 11 ATR 794 at 804). It must be genuine and have some degree of substance and intensity to it (see Carjulgar Industries Pty Ltd v Commissioner of Land Tax [1983] 9 QLCR 151 at 155). It must be sufficiently substantial to prevail not only over competing use but also over the proposition that the land is substantially unused (see Saville v Commissioner of Land Tax (NSW) [1980] 12 ATR 7 at 10).
2. Mr Korman submitted, that I should place considerable emphasis on the fact that most of the area of the land was used for grazing of cattle. He conceded that a few paddocks were used for the horses, but he said when one disregarded the unusable part of the land because of its swampy nature, and that which was vulnerable to flooding, most of the land was used for grazing of the 7 head of cattle owned by Ms Waterston.
3. Mr Korman stated in paragraph 19 of his written submissions:

"The grazing of these horses did not amount to a competing 'chief' activity. Primary production was the only genuine and substantial use, and the only 'chief' or primary use. Ms Waterston's usage of the majority of the land throughout the period to maintaining her cattle, for the purposes of selling them or their offspring gave the land the character of being mainly used for primary production."

1. Insofar as the cattle raising is concerned, there was no evidence put before me of any profit made by Ms Waterston from her cattle. In fact she admitted that no profit was made. Further, in relation to any income that she may have derived from the cattle again there was not objective evidence. Ms Waterston said that she sold some cattle in 2007 - 2008 being 8 head of her 15 head herd, but short of saying that she received between $300 - $500 per head, she gave no details. The list of names of purchasers were quite unsatisfactory as a business record. They did not detail the bovines that were sold, the amount that the purchaser paid for the bovines, or copies of any receipts that were given. Ms Waterston admitted, that she did not declare any sale of cattle both before and after the relevant date in her tax returns. It was all done on a cash basis.
2. Insofar as Ms Waterston's horse agistment business was concerned, she gave evidence that she charged $20 per horse per week for agistment. Also there were the horses belonging to herself and her daughter. Mr Pope gave evidence that his business charged around about $30 per week per horse for agistment. Thus it is clear that the horse business of both Mr Pope and Ms Waterston was income-producing while the cattle business was not.
3. Further, although there were no figures produced, I accept, Ms Waterston's evidence that during the relevant period Mr Pope was carrying on a farrier business from the Pope section of the land. While no figures were presented in relation to this business, I assume that that was income-producing. Thus, there are two income-producing activities being conducted from the land, neither of which was cattle raising.
4. Further, the land was used for the keeping of many horses for personal purposes. Mr Pope had 8 horses of his own and Ms Waterston and her daughter had a similar number.
5. I find that the likely total amount of horses on the land as at 31 December 2008 were 8 horses owned by Ms Waterston and her daughter, 8 horses owned by Mr Pope, 16 horses in relation to Ms Waterston's agisting business, and possibly some horses belonging to "friends' of Mr Pope that were agisting horses on his section of the land. Taking all this into account, it is likely that there was in excess of 32 horses on the land at the relevant time. This is opposed to 7 head of cattle.
6. It was made clear in the case of VL Investments Pty Ltd v Commissioner of State Revenue [2006] VSC 215 that the applicant must establish that the cattle were kept for a commercial purpose. In this particular instance, it cannot be said that the cattle were being kept for such purpose. They were not producing any income, and were unlikely to produce any profit in the foreseeable future.
7. Mr Korman also referred to the VL Investments case, and said that I should follow the findings of Her Honour Justice Hollingsworth J in finding, that this land like the land in the VL Investments case was used primarily for primary production. However the VL Investments case is very different from the present. Both portions of the land in the VL Investments case were used for cattle grazing by farmers. It was always intended, that the cattle in the VL Investments case would be sold in due course. One of the farmers that was agisting his cattle on the land in that case, a Mr Wedgewood, had been farming in the relevant year (1997), and also between 1997 and 2003, thus the exemption was made out in that case. The situation in the present case is very different.
8. Here there were a number of uses which were being made of the land, which uses I have already described. It would seem clear that looking a the land as a whole, that an interested observer would not believe, that the primary use of the land was for maintaining cattle for the purpose of sale or their natural increase. Even though, as Mr Korman stated, the majority of the usable area of the land may have been used for raising cattle, that is only one matter to take into account. The number of horses as compared with the number of cows on the land is another matter to take into account. In my view, in this particular instance, this is a much more important factor that the actual use of certain areas of the land. Particularly in light of the evidence of Ms Waterston and Mr Pope that this land was unsuitable for rearing of cattle.
9. I also take into account the fact that the land was generally set up for the maintaining of horses rather than cattle. As I have previously said the land had indoor and outdoor arenas, a 22 horse stable and numerous horse boxes scattered throughout its area. Further, the land had a cross-country track and a disused racetrack on it. Also the land contained an electrified fence in the area where the horses were kept. All these matters an unbiased, objective observer would take into account and conclude that the land was not being used primarily for the maintaining of cattle for sale or their natural increase.
10. It is apparent from the evidence that considerably more time was spent by the occupiers of the land (Mr Pope and Ms Waterston) in attending to matters concerning non-cattle activities rather than cattle activities.
11. Taking all these matters into account, I conclude that the primary use of the land was not for maintaining cattle for primary production. I am not required to determine whether there was another primary use. I am only required to determine whether the land was primarily used for primary production which for the purpose of this proceeding is for the purpose of maintaining cattle for the purpose of selling them or their natural increase. I find it did not have that use. It thus necessarily follows, that the applicant must fail in relation to being exempt from land tax pursuant to s.66 of the LTA. That is, the applicant has failed to prove the exemption contained in s.66 of the LTA.

Variation of the Assessment in monetary terms

1. Mr Korman made submissions that I should not take into account evidence adduced from extracts produced for the internet. The extracts implied that Mr Pope's partner was making reference to Mr Pope's horse agisting and equestrian business. However because of the conclusions I have come to, it is unnecessary that I have reference to this evidence.
2. Certain values were attributed to the land by Member Vicki Brown in the Land Valuation List of this Tribunal. Those Orders were made in the Proceeding Sam Mondous v Greater Dandenong City Council on 4 June 2009. The Commissioner agreed that he failed to take into account the effect of those orders when making his assessment. The parties thus agreed that should I find that if the s.66 exemption did not apply to the land, that the amount of money payable pursuant to the 2009 Assessment be varied from $118,273.50 to $94,725.00. As the parties have agreed on this sum, I will vary the Assessment accordingly.