FSX v Chief Commissioner of State Revenue

Introduction

1. We agree with the respondent that the appellant's eight grounds of appeal may be appropriately grouped and, in part, dealt with together.

Characterisation of the grounds of appeal

1. In her notice of appeal, the appellant has grounds of appeal in which she has: 1. provided the following glossary: "Agreed Facts means the parties Agreed Statement of Facts in Relation to Planning Issues filed in the Proceedings on 7 March 2023. Decision means the decision of the Tribunal in the Proceedings dated 18 August 2023. Land means the land having the address of [address omitted]. LTMA means Land Tax Management Act 1956 (NSW). NCAT Act means Civil and Administrative Tribunal Act 2013 (NSW). Proceedings means NCAT proceedings no. 2022/00091110 and 2022/00261923." 1. raised the following seven "questions of law": "1. Did the Tribunal err at [31] of the Decision by identifying the wrong issue or asking the wrong question, namely: "Whether the intended use of the land solely for residential purposes is lawful"? 2. Did the Tribunal err at [31] of the Decision by construing the words or phrase, "the intended use and occupation of the land is not unlawful", in Clause 6(2)(c) of Schedule 1A of the LTMA, as if it read instead, "Whether the intended use of the land solely for residential purposes is lawful"? 3. Did the Tribunal err at [38] and [39] of the Decision in applying a wrong principle of law by substituting the words or phrase, "the intended use and occupation of the land is not unlawful", in Clause 6(2)(c) of Schedule 1A of the LTMA, with the question set out at [31] of the Decision, namely: "Whether the intended use of the land solely for residential purposes is lawful"? 4. Did the Tribunal err at [38] and [39] of the Decision in finding Clause 6(1) read in conjunction with Clause 6(2)(c) of Schedule 1A of the LTMA was not satisfied in circumstances where: a. there was no dispute as to the facts; b. the Tribunal accepted, at [8] of the Decision, the expert evidence set out in the parties' Agreed Statement of Facts in relation to Planning Issues; c. the Tribunal accepted, at [8(9)] that "it is not unlawful for FSX to refrain from seeking approval for initial use of those areas, or to leave the commercial spaces vacant"; d. the Tribunal made the findings of fact set out in [26] and [30] of the Decision including that "Development in accordance with those plans is and was lawful", with the consequence that the facts having been fully found, resolution of the Proceedings necessarily fell within the description of the words or phrases in Clause 6(1) and 6(2)(c) in Schedule 1A of the LTMA? 5. Did the Tribunal err at [31], [38] and [39] of the Decision by taking into account an irrelevant consideration, namely, "Whether the intended use of the land solely for residential purposes is lawful"? 6. Did the Tribunal err at [38] of the Decision by concluding "FSX's intention to leave them [the areas of the designated commercial space] vacant amounted to an intention to use them for residential purposes" which "use is unlawful" in circumstances where, on the facts as found, there was no evidence or other material to justify the making of the decision? 7. Did the Tribunal err in that its Decision was so unreasonable that no reasonable person could have come to it?" 1. raised the following "mixed questions of fact and law" for which she seeks leave to appeal if we decline to follow and apply Haritos (which we have referred to as ground 8): "1. Did the Tribunal err by concluding at [39] of the Decision that the "Requirement (c) of clause 6(2) is not satisfied" and in reaching that conclusion in circumstances where: a. it identified the wrong issue or asked the wrong question at [31]; b. there was no dispute as to the facts given the Tribunal accepted, at [8] of the Decision, the parties' Agreed Statement of Facts in Relation to Planning Issues; c. it made the findings of fact set out in [26] and [30] of the Decision; d. it took into account an irrelevant consideration at [31] and [38], namely, "Whether the intended use of the land solely for residential purposes is lawful".
2. In Commissioner of Police (NSW Police Force) v Adam [2022] NSWSC 789 (Adam) Beech-Jones CJ at CL heard an appeal under s 56(1)(e) of the Crimes (Appeal and Review) Act 2001 (NSW) which conferred on a prosecutor a right of appeal to the New South Wales Supreme Court against an adverse costs order made by the Local Court in summary proceedings, which are not with respect to an environmental offence, "but only on a ground that involves a question of law alone". His Honour held at [18]-[21]: "[18] As for s 56(1), "[a] question of law alone" as distinct from a question of law or a complaint about error of law, is a question that "can be stated and considered separately from the facts with which it may be connected in a given case" (see Williams v The Queen (1986) 161 CLR 278 at 287; [1986] HCA 88 per Gibb CJ at [314] per Wilson and Dawson JJ). [19] Even so, a conclusion of mixed fact and law can be challenged on an appeal restricted to a question of law alone if it can be determined that that conclusion "[p]roceed[ed] from a misdirection of law" (Williams at 287). In R v PL [2009] NSWCCA 256 at [27], Spigelman CJ stated that a contention that a presiding judicial officer erred may involve a question of law alone if a stand alone legal proposition can be identified which was a "distinct and separate step in the reasoning process". [20] In Bimson, Roads and Maritime Services v Damorange Pty Limited [2014] NSWSC 734 at [41], I stated as follows: "If that task [of identifying a question of law in abstract terms] is undertaken, then the consequential questions that will arise are whether the lower court or tribunal either answered that question or proceeded on an assumption concerning that answer, whether its answer or assumption was correct or incorrect, and whether that answer or assumption was material to the outcome, in the sense that it could have affected the outcome..." [21] Leaving aside the approach to materiality that is referred to in this passage, the end result is that an appeal on a question of law alone may raise a question of law, the answer to which is obvious. Further, the appeal will only "involve" that question of law alone if that answer was a "distinct and separate step in the reasoning process" of the court below (PL supra), even accepting that such a step may only be implicit in the lower court's reasoning. Answering that question will only of itself lead to a conclusion that a decision should be set aside if the court either addressed that question incorrectly or proceeded on an assumption as to the answer which was incorrect and it was material to the outcome. If the court did not proceed on a misapprehension as to the law, then, at most, its decision will only be affected by an error or mixed fact of law and no question of law alone will ultimately either arise or be involved in the proceedings (see White v DPP [2021] NSWSC 1629 at [13])."
3. The interpretation of a statute or contract is directed to the ascertainment of the document's actual and true meaning. When the document is properly construed, there is only one correct meaning. It is for this reason that the proper construction of a statute is a question of law: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 (Bianco Walling) at [66] (Flick, White and Perry JJ).
4. In Rogers v Vinoly [2016] NSWCATAP 2 (Rogers) at [11]-[14], the Appeal Panel relevantly explained when a question of law will arise in the context of the construction or application of a statutory provision: "[11] The question whether the undisputed facts necessarily fall or do not fall within the provision of a statutory enactment properly construed is generally a question of law. Hope v Bathurst City Council (1980) 144 CLR 1 at 7; Collector of Customs v Agfa-Gevaert (1996) 186 CLR 389 at 395. 21. [12] The Federal Court in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 (Pozzolanic) identified five general propositions in relation to the distinction between questions of law and fact. These were extracted by the High Court in Collector of Customs v Agfa-Gevaert (1996) 186 CLR 389 at 395 (Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ) (Agfa-Gevaert): … 5. The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law." (26) Hope v Bathurst City Council (1980) 144 CLR 1 at 7, per Mason J with whom Gibbs, Stephen, Murphy and Aickin JJ agreed; Australian National Railways Commission v Collector of Customs (SA) (1985) 8 FCR 264 at 277, per Sheppard and Burchett JJ. In Pozzolanic, the Full Court qualified the fifth proposition. The Court said that, when a statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words, the question as to whether they do or do not is one of fact. (27) Pozzolanic (1993) 43 FCR 280 at 288, citing Hope (1980) 144 CLR 1 at 8. [13] In relation to the fifth proposition, in Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 Hill J noted at 16 as follows: The rule that a question of fact is involved in determining whether facts fall within the meaning of a word once that meaning is ascertained, may cause confusion. The confusion comes about because there are actually two related rules, the distinction between which is not always readily apparent. The first of these rules is generally expressed as being that where the facts have been fully found or there is no dispute as to the facts and the question is whether those facts necessarily fall within the description of a word or phrase in a statute, that will be a question of law. This is the sixth proposition enunciated by [Jordan] CJ in the Australian Gas Light Co case. The rationale for this principle is clear enough. If only one meaning is open but a tribunal arrives at a different meaning, underlying the Tribunal's conclusion must be an error of principle, that is to say, an error of law. The second related principle is that where the facts found are capable of falling within or without the description used in the statute, the decision which side of the line they fall on will be a decision of fact and not law. Such a decision will generally involve weight being given to one or other element of the facts and so involve matters of degree. [14] The Full Federal Court in Commissioner of Taxation v Crown Insurance Services Limited (2012) 207 FCR 247 said at [39]: When the statute under consideration has no technical meaning, but is understood in its plain ordinary meaning, a question of law will arise if the facts found must necessarily have come within the statutory description, but only a question of fact will arise if the facts found are capable of coming within the statutory description. In that second case, no question of law arises because, as Hill J said at 16 in Sharp Corporation of Australia Pty Ltd v Collector of Customs, the decision "will generally involve weight being given to one or other element of the facts and so involve matters of degree". To put it another way, a choice between two conclusions open on a consideration of the facts is a question of fact."
5. The question of whether there was no evidence to support a factual finding is a question of law, not a question of fact: Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 (Kostas) at [91] (Hayne, Heydon, Crennan and Kiefel JJ).
6. In AW v WW (No 2) [2024] NSWSC 146 (AW (No 2)), Kunc J considered the question of what constitutes a "question of law" for the purposes of an appeal under cl 14(1)(b) of Sch 6 to the NCAT Act from a decision of the Guardianship Division of the Tribunal. Relevantly, his Honour made the following observations at [9] and [52] (referring to Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680): "[9] ... The reason, in summary, is that in the relevant provision of the GA a "question of law" means a pure question of law, and not a question of mixed fact and law (or anything else). The question advanced by AW is not a pure question of law because it requires the Court to investigate the facts before the Tribunal in an inquiry which is, first, less and other than the demanding inquiry undertaken to determine jurisdictional error for grounds such as 'Wednesbury unreasonableness' or constructive failure to exercise jurisdiction and, consequentially, is in reality an invitation to a merits review. …" "[52] Their Honour's exclusion at [109] of "a question which may ultimately disclose an error of law depending on an analysis of the facts but where this cannot be known without scrutiny of the facts" is a reminder of one source of complication in this area of discourse, being that some questions of law, properly framed and understood as such, will require an examination of the facts. However, in my respectful opinion, this latter category is generally and necessarily confined to submissions of jurisdictional error on grounds such as 'Wednesbury unreasonableness' or constructive failure to exercise jurisdiction. This reflects the nature of such challenges which the High Court summarised in its recent judgment of Mounib Ismail v Minister for Immigration, Citizenship and Multicultural Affairs [2024] HCA 2 (emphasis added): 25 The making of a decision, the decision-maker having failed to inquire about a relevant fact or matter, may involve jurisdictional error capable of characterisation as either a constructive failure to exercise jurisdiction or a legally unreasonable exercise of a particular duty or power. While decisions have expressed the criteria for an error of this kind as including that the potential fact was readily ascertainable and was critical or central to the decision, these criteria merely reflect the usually high threshold for a conclusion that a power has been unreasonably exercised as a matter of law.
7. In Julie (a pseudonym) v John (a pseudonym) [2024] NSWSC 964 (Julie v John) at [102], Meek J cited AW (No 2) at [9] and [52] with approval.
8. We are satisfied as to the following matters in relation to the grounds of appeal in the notice of appeal: 1. questions 1 to 3 and 5 raise the question of the proper interpretation of cl 6(2)(c) of Sch 1A of the LTMA and having regard to the principles in Bianco Walling at [66] are questions of law within s 80(2)(b) of the NCAT Act; 2. question 4 raises the question of whether the facts fully found necessarily fall within the description of a word or phrase in cl 6(2)(c) of Sch 1A of the LTMA and having regard to the principles in Rogers at [11]-[14] is a question of law within s 80(2)(b) of the NCAT Act; 3. question 6 raises the question of whether there was no evidence to support a factual finding and having regard to the principles in Kostas at [91] is a question of law within s 80(2)(b) of the NCAT Act; 4. question 7 raises the question of whether there was a legally unreasonable exercise of a particular duty or power by the Tribunal and having regard to the principles in AW (No 2) at [9] and [52] and Julie v John) at [102] is a question of law within s 80(2)(b) of the NCAT Act; 5. question 8 raises a mixed question of fact and law. We note that the appellant did not contend that having regard to the principles referred to in Adam at [19] this ground raises a question of law. In these circumstances, having regard to the principles referred to in [9] and [10] above, leave to appeal is required.
9. It follows that the appellant has an appeal as of right in respect of grounds 1 to 7 and can only appeal in respect of ground 8 if she obtains leave to appeal.

Questions 1, 2 and 3 - correct identification of the statutory test

Appellant's submissions

1. The appellant submits that the Tribunal improperly substituted the statutory test in cl 6(2)(c) of Sch 1A of the LTMA as to whether the appellant's intention to use and occupy the land solely as her principal place of residence (PPR) was or was not lawful, with one in which the appellant must have an intention to use the land "solely for residential purposes [that] is lawful." Though the Tribunal at [31] correctly identified the latter question as 'a different issue', it was neither a question posed to the Tribunal by either party, nor one which was, properly, to be answered.
2. Therefore, the Tribunal has posed for itself, and then proceeded to answer, an irrelevant and improper question.
3. The express twin findings, first, that the appellant complied with cl 6(1) and second, that the development was lawful, ought properly to have concluded the matter. The only conclusion that could have been reached once the Statement of Agreed Facts was accepted by the Tribunal and upon the rejection of the respondent's opposing grounds (at [30]), was a finding that cl 6(2)(c) was satisfied.
4. The appellant submits that the Decision at [38]-[39] has the effect of inserting the respondent into the role of a local authority. The Tribunal was not at liberty to, nor did it have the power, to conclude that the appellant had acted, or would act, unlawfully in circumstances where the Council did not form any such a view and the Statement of Agreed Facts proved otherwise. The development consent remains valid, and the appellant is aware of no events which would prevent the development from reaching completion and achieving an occupation certificate.
5. As ground 1, the appellant says the Tribunal's misidentified the relevant issue and the question it was tasked to answer in respect of cl 6(2)(c). At [31], the Tribunal substituted the words in cl 6(2)(c) with the following words or phrase: "Whether the intended use of the land solely for residential purposes is lawful is, however, a different issue." (emphasis added)
6. The issue that should have been identified and the question that the Tribunal should have asked, were the words of the statute as enacted in cl 6(2)(c).
7. As to question 2, the appellant submits that the words of the statute should be construed as they are written and enacted. The appellant cites Alcan (NZ) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41, where the plurality (Hayne, Heydon, Crennan and Kiefel JJ) said at [47] with citations omitted that: "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."

Respondent's submissions

1. The respondent submits that these questions should be rejected for three reasons.
2. Firstly, the Tribunal expressly set out the terms of cl 6(1) and cl 6(2) of Sch 1A of the LTMA at [3] of the Decision. At [4] of the Decision the Tribunal identified that one of two determinative matters in dispute was, under cl 6(1), whether the appellant intended to use the land "solely" as her principal place of residence (excluding all other purposes). At [6] of the Decision, the Tribunal identified the applicable test under cl 6(2)(c) as the second of two determinative matters. At [36] the Tribunal made a finding as to cl 6(1), that the 'use' to which the commercial areas were put was as the appellant's principal place of residence, there being no dispute that the use of the remaining areas met that condition. At [39] the Tribunal made its determination of the second determinative matter, finding that cl 6(2)(c) was not satisfied.
3. Secondly, paragraphs [31] and [38] of the Decision, properly construed, are findings of fact made by the Tribunal in the course of the determination process and not a statement of an incorrect statutory test or interpolation of a repealed statutory predecessor to cl 6. Paragraphs [31] and [38] must be read in the context of the Decision as a whole, the Tribunal having earlier identified the two determinative matters in paragraphs [4] and [6] of the Decision being as to the application of cl 6(1) and cl 6(2)(c).
4. At [30], the Tribunal found that, on the evidence, the proposed development on the land was the subject of development consent and was lawful. At [31], the Tribunal distinguished between the proposed development being lawful and the intended use of the land by the applicant solely for residential purposes being lawful. The reference to the time at which the use of the commercial spaces for residential purposes may become lawful was a reference to the agreed facts recorded at (6) and (7) of paragraph [8] of the Decision and the appellant's lay evidence recorded at (10) of paragraph [9] of the Decision. It was a statement of fact, based on the evidence and not the introduction of a different test.
5. At [36], having considered the authorities in Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493; [1957] HCA 15 (Royal Newcastle Hospital) and Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 (Christie) regarding the meaning of use and occupation, the Tribunal found that the use of the vacant commercial spaces on the land was to facilitate the appellant's intended and actual use of the land as her principal place of residence. That was a finding the appellant submitted the Tribunal should make. As a consequence of that finding, the Tribunal also found, at [37], that the appellant intended to use the commercial spaces for the purpose of using and occupying the land as her principal place of residence.

Appellant's submissions in reply

1. The appellant submits that this is not a case of reading the Decision fairly and as a whole resolving her concerns. She submits that the point is best illustrated by comparison with the actual text of cl 6(2)(c) with that which the Tribunal articulated at [31], noting: 1. clause 6(2)(c) reads: "the intended use and occupation of the land is not unlawful." 1. whereas, at [31] the Tribunal states: "Whether the intended use of the land solely for residential purposes is lawful is, however, a different issue."
2. The Tribunal's departure from the issues it correctly identified at [3] and [6] of the Decision to its identification of a "different issue" from [31] onwards is unexplained beyond an articulation that there was a "different issue". The reasoning thereafter culminating in the finding at [39] is problematic beyond the respondent's concession the Tribunal expressed its reasoning "in a shorthand form". What is set out at [31] is indeed a "different issue" but it is further the incorrect issue to that relevant to the statutory test prescribed in cl 6(2)(c) and an error of law.
3. The words of the statute did not direct the Tribunal to consider a "residential purpose" in preference to the actual language in the statute. When the Decision is read fairly as a whole, the conclusion at [39] merely referred to the statute but the conclusion was reached by identifying a "different issue" at [31], with the various findings at [36]-[38] wrongly directed at that "different issue".
4. If accepted that cl 6(2)(c) was not construed correctly as manifested in the "different issue" at [31] and thereafter with various findings at [36]-[38] (directed towards the determination of that "different issue" in substitution to the legal test prescribed in the text of the statute), all findings of fact or law directed towards the "different issue" have no bearing on the determination of the correct legal test.
5. Further, notwithstanding the respondent urging the Appeal Panel to leave the Decision undisturbed, the respondent seemingly takes issue with part of the reasoning therein without filing a cross appeal; for example, criticism is raised at the Decision and the significance of the appellant's intention to leave the putative designated commercial space vacant in the context of both cll 6(1) and 6(2) of the LTMA and similarly the respondent suggests the Tribunal may have erred in relation to cl 6(1). However, this appeal is only concerned with the correct construction and application of cl 6(2)(c) of the LTMA.

Resolution

1. Firstly, we are not persuaded that the Tribunal had reference to, or was directly influenced by, the long-repealed s 10T(2)(a) of the LTMA. There is no evidence that the Tribunal was referred to that section that we were taken to, nor reason to draw an inference that it had it in mind when making its decision. If interpretive error crept into the Tribunal's decision, that was not the window through which it entered.
2. Secondly, the appellant's reliance on the comments of Gzell J at [127] of De Marco is misplaced. There, the Court was asked to impute a requirement of "lawfulness" into cl 8 of Sch 1A of the LTMA as it was at that time, where the Parliament had not sought to include such a requirement in the statutory text. His Honour's comments address that issue, in that context. Relevantly, the requirement for lawfulness in cl 6(2)(c) of the LTMA also existed at the time and it was cited by the Court in contradistinction to what was contained in cl 8.
3. Had Gzell J intended his comments at [127] to relate to provisions other than cl 8, it is inconceivable that his Honour would not have commented on how such a position could apply to the statutory language of cl 6(2)(c) in that context.
4. Thirdly, we are not persuaded that the Tribunal's reference at [31] to "[w]hether the intended use of the land […] is lawful" was anything more than a paraphrasing of the correct statutory test in cl 6(2)(c) that was acceptable, and which did not add an impermissible gloss, where the correct test had been identified and stated earlier in the Decision. The phrase "intended use" fairly encompasses "use and occupation" and "not unlawful" is indistinguishable from "lawful" in this context: in a like manner see, West Australian Newspapers Ltd v Bridge (1979) 141 CLR 535; [1979] HCA 10 at 542 per Gibbs J; De Marco at [72] per McColl JA (dissenting but not on this point).
5. However, whether that paraphrasing, and the respondent's submissions at first instance led the Tribunal to pose for itself and answer the wrong question remains to be considered, as does the issue of whether the words we have excised from the quote, being "solely for residential purposes" is indicative of the Tribunal conflating the tests to be applied or is simply reflective of it inserting a factual finding as to what the appellant's intent was.
6. The resolution of that issue requires an assessment of whether the proper interpretation and application of cl 6 of Sch 1A of the LTMA requires the whole of the land to be used as a PPR or, to put it another way, whether the land must be used "solely" as a PPR in a lawful manner in the context of the dispute between these parties.

Grounds 4 and 6 - correct application of the statutory test and a finding made without evidence

Appellant's submissions

1. The Tribunal accepted the appellant's lay evidence and the Statement of Agreed Facts. The intention to leave the designated perfunctory commercial spaces vacant was not unlawful and neither was the development of the land, which complied with the existing development consent: Decision at [8], [26] and [30]). The Tribunal's findings had the consequence that the facts, having been fully found, resolved the proceedings by falling squarely within the description of the words or phrases in cll 6(1) and 6(2)(c).
2. The appellant submits that the Tribunal erred at [31] and [38]-[39] by finding that the appellant's intention to leave the areas marked red on the ground floor plan as being exclusively designated for commercial use as vacant, amounted to an intention to use them for residential purposes that was unlawful. The appellant's lay evidence was uncontested, the Tribunal satisfied itself by considering the expert evidence and reconciling material points of differences with the parties' Statement of Agreed Facts. The evidence as accepted, and the facts as found did not establish that leaving the designated perfunctory commercial space vacant amounted to an unlawful use. The Tribunal erred in its conclusions at [38] and [39] as there was no evidence or other material before the Tribunal to reach that conclusion.

Respondent's submissions

1. The respondent submits that it was not sufficient to satisfy cll 6(1) and 6(2)(c) of Sch 1A of LTMA that the appellant intended to leave the commercial spaces vacant.
2. The Tribunal found that the appellant intended to use the commercial spaces for the purposes of using and occupying the land as her PPR at [36] and [37]. That finding was based on the following: 1. the sworn evidence of the appellant and her husband that their intention was to use and occupy the land solely as their home, that they had no intention to use and occupy the land for any other purpose and that the inclusion of the commercial spaces was solely to facilitate development consent for the land as shop top housing: Decision at [9] and [19]); and 2. the submission by the appellant that, on the basis of that evidence, her intended use of the land was to "facilitate [her] intended and subsequent actual use of the [land] as her principal place of residence": Decision at [35].
3. The Tribunal accepted the appellant's admission in her Reply Submissions as to her intended use of the land. That was open to the Tribunal in circumstances where use and occupation of one part of a parcel of land may characterise the otherwise vacant part of the land as used and occupied for a particular purpose: Royal Newcastle HospitaI.
4. The respondent says that, to the extent that the appellant submits that the Tribunal was bound by the agreed facts, the Tribunal correctly concluded at [18] that the appellant's intended use of the commercial spaces was to be ascertained objectively and not solely by reference to the appellant's subjective intention. Further, there is no concept of estoppel as to the operation of revenue laws or in administration of those laws by an administrative decision maker. Accordingly, the agreement as to facts did not constrain the Tribunal's fact finding or preclude it from making factual findings as to intended use of the commercial spaces on other material before it.
5. Having found that the appellant intended to use the commercial spaces for the purposes of using and occupying the land as her principal place of residence, on the basis of the matters outlined above, and the application of the principles in Royal Newcastle Hospital and Christie as to the use of part of the land characterising the use of a vacant part of the land, the Tribunal found that intended use was unlawful.

Appellant's submissions in reply

1. The respondent does not properly engage with questions 4 and 6. It is not appropriate for the respondent to criticise the Tribunal's satisfaction of the primary requirement in cl 6(1) in circumstances where the respondent has not cross-appealed on that particular question of law.
2. The Tribunal found at [26]: "I am satisfied that at all relevant times - including, as at the taxing dates for the 2021 and 2022 tax years - FSX intended to use and occupy the land solely as her principal place of residence. The primary requirement of clause 6(1) is satisfied."
3. The Tribunal's findings at [36]-[37] were directed at an intended use and occupation of a subcomponent of the land is at odds with its finding at [26]; that approach is inconsistent with the rule of statutory construction in Tamas and was made in support of the "different issue" at [31]. It was neither open to nor necessary for the Tribunal to make the findings at [36]-[37] as to cl 6(2)(c).
4. The respondent elides the Tribunal's finding at [26]. That finding encompassed the appellant's intended use and occupation of "the land" and not a subcomponent of it as is the focus of the respondent's submissions. The respondent's emphasis on the Tribunal's reasoning at [36]-[37] merely serves as to draw attention to the incongruency in the Tribunal's reasoning as to [3] and [6] at its substitution as a "different issue" at [31].
5. The respondent's position does not conform with the approach as to use and occupation as expressed in cases such as Christie and Royal Newcastle Hospital. The Tribunal held, at [26], that it was satisfied the appellant intended to use and occupy the land solely as her PPR. In doing so, conformably with the statutory test in cl 6(4), the Tribunal was satisfied there was no other intended use or occupation of the land by the appellant. It does not necessarily follow that the entirety or whole of the land must be physically occupied. This was acknowledged by the Tribunal at [33], citing Christie at 533-534.
6. Here, the putative designated commercial space was intended to be kept vacant; and as the Tribunal correctly held in relation to the primary requirement in cl 6(1), that did not preclude a finding the appellant held the requisite intention to solely use and occupy the land as her PPR.
7. Seemingly, the Tribunal's approach was agitated by the respondent's written submissions at the primary hearing, where it was submitted: "At 44: Central to both of the above issues is whether the intended use and occupation must be of the whole of the Property as a PPR. At 51: …This means that the Property cannot be intended to be used for any other purpose and necessarily, that the entirety of the Property must be intended to be used as a PPR. At 52: The intention of the Applicant to use part of the Property, being the upper levels, as a residence is not sufficient to satisfy clause 6, which applies to the land as a while [scil whole] and thus the entirety of the Property. At 57: The relevant planning instruments and development consent that apply to the Property in this case do not permit that the whole of the Property can be used for residential purposes. At 69: The intended residential use of the Property as a whole is therefore not permitted by the relevant planning laws and consents. Any intention to use and occupy the Property as a whole solely as a PPR is not lawful, In those circumstances the Tribunal cannot be satisfied that the intended use and occupation of the Property solely as a PPR is not unlawful."

Resolution

1. At this point, the horns of the dilemma raised by these proceedings become clear. To succeed at first instance, the appellant needed to demonstrate that, in accordance with the principles in Royal Newcastle Hospital and Christie, her non-use of the area marked in red on the ground floor (in a day to day or physical sense), would nonetheless meet the test of use and occupation. Otherwise, the land would be assessed for land tax, as has occurred.
2. At the same time, the appellant needs to rely on the lawfulness of her exercise of her development consent, which remains lawful only if she does not use or occupy the area marked in red on the ground floor (in a day to day or physical sense) as part of her residence.
3. At this point, we are able to answer the question posed by ground 4 as to whether the facts established by the agreed facts, coupled with the Tribunal's findings at [26] and [30], meant that the appellant necessarily fell within the description in cl 6(1) of Sch 1A of the LTMA. The answer to that question is "yes". However, that answer is not material in terms of identifying error, because the initial satisfaction of cl 6(1) was not the end of the Tribunal's necessary enquiry under cl 6(2)(c), as we found earlier at [85].
4. Similarly, we can answer the question posed by ground 6, as to whether the Tribunal's conclusion that "FSX's intention to leave [the areas of the designated commercial space] vacant amounted to an intention to use them for residential purposes" which "use is unlawful" was reached without evidence or other material to justify the making of the decision? The answer to that question is "no". The accepted evidence of the appellant that she intended "to leave [the areas of the designated commercial space] vacant" was sufficient evidence upon which the Tribunal could reach its conclusion, having regard to its interpretation of the statute. Whether that conclusion was correct is a different question.
5. It is convenient now to return to ground 3 and the question it poses, which is whether the Tribunal erred at [38] and [39] of the Decision in applying a wrong principle of law by substituting the words or phrase, "the intended use and occupation of the land is not unlawful", in cl 6(2)(c) of Sch 1A of the LTMA, with the question set out at [31] of the Decision, namely: "[w]hether the intended use of the land solely for residential purposes is lawful?"

Ground 5 - whether the Tribunal took into account an irrelevant consideration

Appellant's submissions

1. The appellant submits that the Tribunal erred by taking into account an irrelevant consideration by the words or phrases it substituted at [31] in lieu of the words or phrases of cl 6(2)(c). The substituted words or phrases were irrelevant as the legislation does not require the intended use of the land be solely for residential purposes.

Respondent's submissions

1. In considering the use of the land for "residential purposes" the Tribunal did not take into account an irrelevant consideration. That factual matter was germane to cl 6(1) which, if satisfied, was germane, as a matter of fact, to the non-satisfaction of cl 6(2)(c). That is, the finding that the intended use of the land was solely as a principal place of residence, it could not be demonstrated, as a matter of fact, that such intended use was not unlawful.
2. An irrelevant consideration is a matter which is prohibited from being considered because, having regard to the subject matter, scope or purpose of the decision making power, it can be seen to reflect an extraneous or improper purpose or to render the decision arbitrary or capricious. There are a range of matters that can be taken into consideration between a mandatory consideration and an irrelevant consideration which the decision-maker may weigh or disregard without committing an error of law: Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180 at [9] per Basten JA (Beazley P agreeing).
3. There is nothing in cl 6 of Sch 1A of the LTMA generally that prohibits consideration of whether the appellant intended to use and occupy the land for residential purposes. It is plainly a matter of fact material to cl 6(1), an issue conceded by the appellant at Appeal Book, Tab 13, p.1454. Consideration of whether the land was intended to be used as a PPR requires regard to be had to the purpose to which the land is put.
4. In any event, for reasons consistent with the respondent's submissions in respect of questions 1 to 3, the Tribunal's consideration of "residential purposes" was in the context of consideration of the evidence before it regarding the use of the commercial spaces for "residential purposes". That was not an irrelevant consideration.
5. There is also nothing in cl 6 of Sch 1A of the LTMA generally that prohibits consideration of whether the intended use of the land was lawful or unlawful. Clause 6(2)(c) clearly indicates that such a factual inquiry is relevant and determinative. In circumstances where the appellant had the onus of satisfying the Tribunal that the intended use or occupation of the land was "not unlawful" the Tribunal could not be satisfied of that matter where it had found that an intended use of the commercial spaces as a principal place of residence was unlawful. The Tribunal was not obliged to express its conclusion by saying in terms, "I am not satisfied that the intended use and occupation of the land is not unlawful" when it did so in summary terms at [38] and [39].

Resolution

1. For the reasons we have given when determining the earlier grounds of appeal, we agree with the respondent's position. Had the Tribunal intended to import the terms of the former s 10T(2)(a) of the LTMA to consideration of cl 6(2)(c), it would have imported an irrelevant consideration. However, as we have found, that is not what occurred. Rather, it was the nature of the use the appellant intended for the premises, considered in total, that went to the question of lawfulness that the Tribunal was required to consider in cl 6(2)(c). In the context of these proceedings, that use was solely as a principal place of residence in accordance with the development consent she had obtained.

Ground 7 - whether the decision was so unreasonable no reasonable person could have come to it

Appellant's submissions

1. The appellant submits that the Tribunal erred at [31] and [38]-[39] by finding that the appellant's intention to leave the areas marked red on the ground floor plan as being exclusively designated for commercial use as vacant, amounted to an intention to use them for residential purposes that was unlawful. The appellant's lay evidence was uncontested, the Tribunal satisfied itself by considering the expert evidence and reconciling material points of differences with the parties' Statement of Agreed Facts. The evidence as accepted and the facts as found did not establish that leaving the designated perfunctory commercial space vacant amounted to an unlawful use. The appellant submits the Tribunal erred in its conclusions at [38] and [39] of the Decision as there was no evidence or other material before the Tribunal to reach that conclusion.

Respondent's submissions

1. The respondent submits that the appellant seeks to deploy the concept of Wednesbury unreasonableness, which is a concept more appropriate to judicial review of the exercise of statutory discretions (Re Minister for Immigration and Multicultural Affairs, Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59 at 76 per McHugh J and at 87 per Gummow J) rather than fact finding in a merits review decision: Attorney-General (NSW) v Quin (1990) 170 CLR 1; [1990] HCA 21 at 36 per Brennan J.
2. In any event, no such unreasonableness is made out. The Tribunal did not identify or apply the incorrect statutory test or fail to consider the relevant legal principles. For the reasons set out the findings of fact made by the Tribunal were open to it on the evidence before it and the Tribunal correctly applied the statutory test to those facts.

Resolution

1. Again, for the reasons we have given above, this ground is not made out and the answer to the question it poses is "no". Whilst the concept of legal unreasonableness has bled beyond the bounds of discretionary decision making (Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [85] per Nettle and Gordon JJ), the simpler way to challenge the Tribunal's method of statutory interpretation and application of a statute to the facts as found is usually to demonstrate that either or both aspects of the decision were wrong, rather than to invoke the concept of legal unreasonableness. Where the Tribunal's decision is not discretionary, but rather demands a unique outcome, the correctness standard of appellate review applies.
2. To find that the Tribunal's decision was unreasonable in the Wednesbury sense would require, as Lord Greene MR stated in Associated Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 at 230, 'something overwhelming'. In Marrickville Metro Shopping Centre Pty Limited v Marrickville Council [2010] NSWCA 145; (2010) 174 LGERA 67, Tobias JA referred to the Wednesbury formulation in the following terms at [104]-[106]: 104 Finally, as her Honour noted at [115], in Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10; (2005) 138 LGERA 11 Spigelman CJ, with whom Beazley JA and myself agreed, stated at [129]: "Perhaps the most appropriate formulation [of Wednesbury unreasonableness] is whether the decision is 'illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds". 105 This formulation was adopted by myself in Westfield Management Ltd v Perpetual Trustee Co Ltd [2006] NSWCA 245 at [71]. It was also adopted and applied by myself, with the agreement of Mason P and Hodgson JA, in Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at [122]. In Notaras I cited (at [124]) [31] of the judgment of Biscoe J in Save Our Streets Inc v Settree [2006] NSWLEC 570; (2006) 149 LGERA 30 where His Honour drew a distinction between a decision which the court considers is unreasonable and a decision which the court considers is so unreasonable that no reasonable body could have come to it. The latter required "something overwhelming": Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [44]. 106 In Wednesbury itself, Lord Greene MR at [229] referred to the relevant unreasonableness as "something so absurd that no sensible person could ever dream that it lay within the power of the authority". In Bromley London Borough Council v Greater London Council [1983] 1 AC 768 at [821], Lord Diplock defined Wednesbury unreasonable decisions as those which "looked at objectively, are so devoid of any plausible justification that no reasonable body of persons could have reached them". In Puhlhofer v Hillingdon London Borough Council [1986] UKHL 1; [1986] 1 AC 484 at 518, Lord Brightman said that the unreasonableness must be "verging on an absurdity". (emphasis in original)

Appellant's submissions

1. The appellant submits that the Tribunal erred in failing to apply the correct principle of law in relation to cl 6(2)(c) of Sch 1A of the LTMA to the undisputed facts found by the Tribunal at [8], [26] and [30] and reached a mistaken conclusion at [38] and [39] of the Decision that: 1. the appellant's intention to leave the areas marked red on the ground floor plan as being exclusively designated for commercial use vacant amounted to an intention to use them for residential purposes is unlawful; 2. clause 6(2)(c) of Sch 1A of the LTMA is not satisfied; and 3. the exemption in cl 6 of Sch 1A of the LTMA does not apply.

Respondent's submissions

1. The respondent submits that this ground does not arise as the Tribunal did not err in its construction or application of cl 6(2)(c) of Sch 1A of the LTAA.
2. The respondent also submits that even if the Appeal Panel was minded to grant leave to extend the appeal to the merits, the Appeal Panel would not reach a different result.
3. The requirement in cl 6(1) of Sch 1A is that the appellant intend to use the land solely as a principal place of residence. This means that the entirety of the land must be intended to be used as a principal place of residence and that the land cannot be intended to be used for any other purpose. If the Tribunal erred in finding that the appellant intended to use the commercial spaces as her principal place of residence, then the alternate finding must be that the appellant did not intend to use the commercial spaces as her principal place of residence. Accordingly, the appellant did not intend to use the land, as a whole, solely as her principal place of residence and cl 6(1) is not satisfied.

Resolution

1. Having resolved the questions of law posed by the appellant, there is no further issue of principle or general public importance to be considered in the appeal. The matter turns on the need to consider a very specific and unusual factual matrix.
2. Here, we return to the dilemma earlier identified. Having relied upon the principles identified in Royal Newcastle Hospital and Christie to establish that she intends to use the entire property for residential purposes, the appellant cannot escape the conclusion that such use is unlawful as it is forbidden under the development consent. In that regard, we agree with the respondent's submissions at [135] above and, as a consequence, there is no more than an arguable injustice.
3. Leave to appeal is refused.

Conclusion

1. For these reasons the appeal should be dismissed in respect of grounds 1 to 7 and leave to appeal should be refused in respect of ground 8.

Costs of the appeal

1. Upon completion of our determination of the substantive appeal, we have had regard to the parties' position as to costs and the preliminary submissions they have made in that regard, in accordance with directions made in the appeal.
2. The appellant sought an order for indemnity costs of the appeal and of the proceedings at first instance. It is inappropriate for us to determine an application for costs of the first instance proceedings in the absence of an order in that regard in those proceedings that is a subject of the appeal, for the reasons set out in Estate of Bovaird v Milstern Retirement Services Pty Ltd [2022] NSWCATAP 174 at [26]. Any application in connection with costs of the proceedings at first instance should be first brought in the Administrative and Equal Opportunity Division. As to her costs of the appeal, the appellant has been unsuccessful and there is no other reason she should be awarded costs.
3. The respondent indicated a desire to be heard on the issue of costs, but only addressed opposition to the appellant's application, rather than evincing an intention to make an application for the costs of the appeal.
4. Having regard to the outcome of the appeal, we do not need to hear further from the parties. Section 60(1) of the NCAT Act applies, and the parties are to bear their own costs in the absence of special circumstances warranting another outcome.
5. We will make no order as to costs of the appeal, with the effect that the parties are to bear their own costs, but in case we have misinterpreted the respondent's position we will grant liberty to apply to the respondent to make an application for costs, if that was intended.

Orders

1. Our orders are as follows: 1. Pursuant to section 64(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW), the true names of the Applicant and her husband are not to be disclosed, including by way of publication or broadcast; 2. Leave to appeal is refused; 3. The appeal is dismissed; 4. There is no order as to the costs of the appeal. 5. In the event that an application for a different costs order is made in accordance with the directions below, order 4 above ceases to have effect and the following directions apply: 1. Any application for a different costs order is to be filed and served, supported by evidence and submissions, within 7 days of the date of these orders; 2. Any evidence and submissions in response to the application for a different costs order are to be filed and served within 14 days of the date of these orders. 3. Any material in reply is to be filed and served within 21 days of the date of these orders. 4. The Appeal Panel may dispense with a hearing and determine any application for a different costs order on the basis of the written submissions and evidence provided. If the parties oppose this course, they should make submissions on this issue when complying with the directions as to their submissions on the substantive costs application. If a hearing is not dispensed with the parties will be notified of a date for hearing to determine the application.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 August 2024