1. The applicant was registered as a joint proprietor of the property with his wife, Pauline Galea, on 17 November 2000. The purchase price was $4.575 million. Stamp duty of $251,625 is recorded as having been paid in respect to the purchase on 15 December 2010.[2] The property consisted of approximately 40 hectares of uncultivated land in Kurunjang, which is located north of the Melton township.
2. The Commissioner levied land tax on the property for the land tax years 2011, 2012 and 2013. The applicant objected on the basis of a claimed exemption that the property came within the ambit of section 66 of the Act in that it was "used primarily for primary production".[3] The substance of the applicant's claim for exemption is set out in a letter dated 8 May 2015 sent by the applicant's solicitors to the respondent.[4]
3. There was no challenge that the property was in very poor condition at the time it was purchased by the applicant and his wife. Mr Galea gave evidence that there were rocks, dead trees, thistles and old fencing on the land, it had been used apparently for some form of horse agistment prior to its purchase by the applicant. There was effectively no work done in relation to the property until August 2011. At that time work was performed over a couple of weekends by a contractor who cleared fencing, dirt and trees from the property.
4. In December 2011 the property was sprayed for weeds and thistles in preparation for cropping and a sunflower crop was planted by a second contractor who had other agricultural interests nearby. This crop had not fully grown by the early part of 2012 and the arrangements between the applicant and the second contractor were terminated at that stage. The crop was not harvested.
5. After the failure of the sunflower crop another farmer who had engaged in share farming arrangements at other locations with the applicant ploughed in the sunflower crop and subsequently sprayed for weeds, harrowed the soil and planted a barley crop. Due to insufficient rain that crop also failed and was left in the land to fallow.
6. In 2013 the farmer again sprayed for weeds, fallowed the land and planted a further barley crop. Once again the crop failed due to insufficient rain. A further crop was planted in 2014 and the evidence established that about 14 to 15 tonnes of acceptable quality barley was harvested from the property. There was a distribution of profit as between the farmer and the applicant in that year in accordance with an informal share-farming agreement.

1. A witness statement made by Mr Dominic Dalli made on 26 May 2016 was tendered in evidence without objection.[5] Mr Dalli is a bobcat and truck driver who performed the initial clearing work on the property on two Saturdays, being 21 and 28 August 2011. He charged a total of $1,831.50 including GST for this work. The bill was sent to the applicant's company on 6 December 2011 and Mr Dalli states that it was paid the next day. The statement goes on to say:

"7. I do recall that Kurunjang was divided by fencing, and had a fence across the middle. It was apparent that the property had been used as a horse paddock.

8. I used my bob cat to pull the fence posts out of the ground, and to transport posts and fencing materials onto a truck. I took that to Sam's main property at Plumpton, which is nearby, and then left them there.

9. Sam and I also removed dirt and trees from the property, leaving it as clear land."[6]

1. Mr Galea gave oral evidence to the Tribunal. He is 78 years of age and has been engaged principally in rock blasting for 58 years. He conducts business activities in partnership with his wife and also has children involved in his business activities. Apart from the property which is the subject of this application, he owns land in Little River and Lethbridge and Digger's Rest.
2. In relation to the Kurunjang land, he gave evidence that he had engaged Brodie Toohey in 2011 and paid a total amount of $13,500 to Mr Toohey who he described as a "share farmer".
3. I note from the documents forming part of Exhibit 2 that the applicant was invoiced $5,200 by Mr Toohey for initially spraying the property for weeds and thistles preparatory to cropping.[7] The documents record Mr Toohey charged the applicant a further amount of $1,400 in respect of "100 acres sown to sunflower for stock feed".[8] The tax invoices for spraying and planting the sunflower crop were each dated 17 January 2012.
4. The applicant then entered into an arrangement with Mr Glen Harrison to share farm the property during 2012 and thereafter.
5. He stated that Mr Harrison had put in a barley crop in 2012, but this had failed due to a lack of rain.
6. When cross-examined the applicant agreed that he owned a number of parcels of land and stated:

1. He acknowledged in cross-examination that he had bought the land for $4.575 million in 2010 and stated:

1. He maintained that the use of the land was for cultivation, but agreed that it was situate very close to the urban boundary and identified its position by reference to an aerial photograph shown to him.[9] He further stated:

"I bought the land because at some point I would sell it to a developer."

1. He was taken in cross-examination to the contents of a letter written by his solicitors to the respondent on 3 July 2015.[10] Portions of that letter were read to the applicant during cross-examination and he generally agreed with its accuracy.
2. He was cross-examined about why there had been no work done in relation to the land until August 2011 when he had purchased it in 2010. He agreed that there was approximately a nine month delay before he had done any active work in relation to the land.
3. He stated in relation to this that the land was in very poor condition with old fencing, rocks, dead trees and thistles and that horses had been using it. He relied on the expertise of the share farmers in relation to what crops were planted.
4. He agreed that work done by Mr Toohey was probably done on 17 January 2012 and did not know why work had not been done spraying the land earlier than mid-January.
5. Finally in cross-examination the applicant did not suggest that any crops other than those described by Mr Toohey and Mr Harrison had been planted at the property in the relevant period.
6. Mr Brodie Toohey was the next witness called to give evidence. His statement, made 27 May 2016, was tendered in evidence as Exhibit B with one minor alteration as to his residential address.
7. The contents of that statement are consistent with the applicant's evidence, describing initial spraying of the property preparatory to cropping in December 2011, and continuing:

"It was too late in the season to plant a barley crop, which was my preference. But I thought that if I planted a sunflower crop and there was adequate rain, the crop would grow in the summer. Sunflower seeds are harvested for stock food. I therefore ploughed and farrowed the land, and planted sunflowers.

There was little rain in late 2011, and the crop had not fully grown by early 2012. By that time, it was not likely that the crop could be saved even if it did rain, and it was too late."[11]

1. In cross-examination Mr Toohey agreed with the contents of the invoices dated 17 January 2012. He stated further that he had met Mr Galea in late 2011.
2. When pressed as to the timing of the work done he stated he was certain he would have done the bill probably four to six weeks after the work was done as he was not good with paperwork.
3. The final witness to give evidence in these applications was Mr Glen Harrison. His statement made 27 May 2016 was tendered as Exhibit C.
4. Mr Harrison has been engaged as a contract farmer and share farmer in Victoria for 25 years. His statement describes the nature of share farming arrangements which were conducted on a handshake basis with no written contracts. The statement continues:

"As a share farmer, I have (by which I mean that my company has) agreements with land owners for the owners to supply the farm land to me rent free. In return, I meet all (or almost all) of the farming expenses and I keep 80% to 90% of any profit it makes and "shares" the remaining 10% to 20% with the land owners. I am responsible for all losses."[12]

1. Mr Harrison's statement described the share farming activities at the property in some detail. This share farming arrangement had commenced in 2012. The statement continued:

"... Mr and Mrs Galea had had someone else farming it with them in the prior year. A sunflower crop had been planted. But there had not been enough rainfall, and the crop was not viable. I therefore ploughed the sunflower crop into the ground, and through the soil. Over time, I then sprayed for weeds, farrowed the soil and planted a barley crop. I also planted a barley crop at Plumpton."[13]

1. The statement continues describing failed crops due to lack of rainfall in the 2013 and 2014 seasons, and a marginally acceptable crop in 2015.
2. Mr Harrison was briefly cross-examined and agreed that the letter dated 11 June 2015 forming part of Exhibit 2 had been written at Mr Galea's request. When taken to the 2013 date in that letter he was unsure as to whether it was 2013 or 2012 when he started share farming the Kurunjang property. He was reasonably confident that he had planted barley in 2014 and could remember ploughing in the sunflower crop.
3. In re-examination Mr Harrison stated that he was still farming on his own account and in share farming arrangements. In relation to the Kurunjang property there had been three crop failures and one good crop.
4. The further evidentiary material was confined to the documentation contained in Exhibit 2 and the separately tendered aerial photograph identified by the applicant as showing the relevant property bordered by Coburn's Road to the west and Minns Road to the south.[14]

1. The applications each concern section 66 of the Land Tax Act 2005 and the definition of "primary production" contained in section 64. It is appropriate to set out the relevant portions of the legislation:

(a) cultivation for the purpose of selling the produce of cultivation

(whether in a natural, processed or converted state);

1. 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

(c) that is used primarily for primary production."

1. The onus rests with the applicant to satisfy the Tribunal that the entitlement to an exemption from duty is made out in respect of both the 2012 and 2013 years. It is inappropriate for the Tribunal to look at the situation at large, but rather to consider it in broad terms in respect of "a period not over long and not over short within which 31 December falls."[15]
2. It is clear in this case that following the failed sunflower crop planted by Mr Toohey in late 2011 the farming activities on the land were conducted by Mr Harrison during the relevant periods for 2013 and later years. I found Mr Harrison to be a satisfactory witness and I accept his evidence that he had conducted share farming activities over many years on what is described in his witness statement as a "handshake" basis.[16]
3. I accept Mr Harrison's evidence that it would have been uneconomic for him to share farm the property were it not for a larger property also owned by the applicant nearby.[17]
4. It is also clear from Mr Harrison's statement that he has actual knowledge of the methods of cultivation, harvesting and marketing of crops, including barley.[18]
5. I am satisfied that Mr Harrison did engage in the share farming arrangement with the applicant to make a profit from crops grown at the property. It is clear that it was only after the 2015 crop was harvested and sold that there was an actual profit made. The evidence given by Mr Harrison, and indeed the other witnesses, is unchallenged in terms of the poor climatic conditions which impacted adversely on the barley crops planted at the property in the 2012 and 2013 years.
6. Nevertheless a finding that Mr Harrison did not wish to make a loss, and intended to make a profit, does not of itself satisfy the onus faced by the applicant in these applications.
7. The applicant must satisfy the Tribunal that the requisite character of the property as at midnight on 31 December of the year immediately preceding the land tax year in question had a character "of land that is used primarily for cultivation for the purpose of selling the produce of cultivation."
8. In assessing the evidence to reach a conclusion on this central issue I am greatly assisted by the submissions of both counsel, and particularly the further written submissions received following judgment handed down in CDPV Pty Ltd & Ors v Commissioner of State Revenue.[19] In that case Croft J considered sections 64 and 66 of the Act and analysed the authorities dealing with the expression "cultivating for the purpose of selling." His Honour referred to Safety Beach Estate Pty Ltd v Commissioner of Land Tax (NSW)[20] noting the court there held that cultivation for the purpose of selling produce should not be limited to annual crops but:

"... the idea conveyed by the expression is the improvement of the land for the purpose of selling the produce of the improved land."[21]

1. I am satisfied in this case that in each of the relevant years subsequent to Mr Harrison's involvement with the property, that the primary use of the land was directed towards the cultivation of crops with the intention of selling the produce of that cultivation.
2. What remains essentially unclear is the date at which Mr Harrison actually became involved in the handshake share farming arrangement with the applicant. In cross-examination Mr Harrison was taken to his letter written at the request of the applicant on 11 June 2015. That letter stated:

"In 2013 in approximately April/May we ploughed the failed Sunflower Crop into the Land ... In 2014 we then entered the Coburns site and prepared the Paddock and then began the planting process of Barley. Barley was sown and did grow over the 2014 Season."[22]

1. When cross-examined about the dates Mr Harrison stated that this could have been 2013 or 2012.
2. The statement made by Mr Toohey notes that he sprayed the property for weeds and thistles in December 2011. It goes on to state:

"It was too late in the season to plant a barley crop, which was my preference. But I thought that if I planted a sunflower crop and there was adequate rain, the crop would grow in the summer. ... There was little rain in late 2011, and the crop had not fully grown by early 2012. By that time, it was not likely that the crop could be saved even if it did rain, and it was too late."[23]

1. In my view it is unlikely that in the time relevant to the 2012 tax year (i.e. a period around 31 December 2011), Mr Harrison had not yet done anything in relation to the land. It seems reasonable to conclude that the end of 2011 and the early months of 2012 were such that Mr Toohey was still hopeful about the prospects of a sunflower crop.
2. I am mindful of the test that was applied by Croft J in CDPV Pty Ltd & Ors v Commissioner of State Revenue at [33] noting that:

"... the principal question is, as the Commissioner contends, whether the land had the character of land that is used primarily for cultivation for the purpose of selling the produce of cultivation."[24]

1. His Honour went on to state that the process of cultivation:

"... as would be appreciated from common experience, (is) likely to require a period of preparation before any crops are planted or provide any yields, and that cultivated land may well, as a matter of good farming practice, lie fallow and allow the land to recover."[25]

1. I found Mr Toohey also to be an acceptable witness, although it was clear from his response in cross-examination as to the invoices sent by him on 17 January 2012, that he had not done any work on the property until early to mid-December 2011. He stated that he would probably have billed four to six weeks after doing the work. Mr Toohey's witness statement notes that it was too late in the season to plant a barley crop and the sunflower crop was planted as an alternative. There is very little further detail in Mr Toohey's statement concerning that sunflower crop other than the following:

"There was little rain in late 2011, and the crop had not fully grown by early 2012. By that time, it was not likely that the crop could be saved even if it did rain, as it was too late."[26]

1. There is no further relevant evidence concerning the sunflower crop.
2. Conversely the more detailed statement made by Mr Harrison refers to the cultivation of barley stating:

"Barley grows annually and it is possible to plant it between January and August in any year. For a crop to be successful, it requires rainfall in correct amounts and takes about three to four months to grow. It is generally harvested from about Christmas to early January. But there was insufficient rain in 2012, and the crop failed. I left the failed crop in the land to fallow."[27]

1. I am satisfied that Mr Harrison's reference to 2012 should in fact be 2013 as the sunflower crop had not been planted by Mr Toohey until midDecember 2011, at the very earliest. As I have stated above, there is simply no other evidence to satisfy me what prospects there were for a sunflower crop planted so late in the calendar year to be successful, even if there was some late rain. I am more inclined to accept the evidence of Mr Harrison that planting occurs following the harvest up until about August in a calendar year and the crop then takes some months to grow before it is harvested.
2. I am therefore satisfied in this case that Mr Harrison, as a matter of probability, ploughed in the failed sunflower crop in the early to midmonths of 2012 and then planted barley to be harvested in January 2013.
3. Although there is little if any evidence from the applicant as to what return he could have expected from the arrangement with Mr Harrison, I am satisfied largely on the basis of Mr Harrison's evidence, that the planting of barley and the husbandry directed towards the property from the early to mid-months of 2012 was directed towards cultivation of the barley crop for the purpose of selling the produce of cultivation. It could not be said in this case that work performed at the property by Mr Harrison was merely incidental to work being performed on a neighbouring property as was the factual background in CDPV.
4. I am therefore satisfied that the property was used primarily for primary production when viewed as at 31 December 2012 so as to satisfy the requirement of section 66(c) in respect of the 2013 land tax assessment.
5. I cannot be so satisfied that the same situation occurred in the 2012 tax year. Although I am prepared to accept that a sunflower crop could be cultivated profitably, I am not satisfied that its planting so late in 2011 was such that when viewing the use of the land at the relevant time an exemption is made out in respect of the 2012 land tax year.
6. The application for review of the respondent's land tax assessment in respect of the 2012 land tax year is refused.
7. The application for review of the respondent's land tax assessment in respect of the 2013 land tax year is granted.

[1] CDPV Pty Ltd & Ors v Commissioner of State Revenue [2016] VSC 322

[2] Exhibit 2, Clause 89(1) material, Tab 25

[3] Land Tax Act 2005 section 66(c)

[4] Exhibit 2, Clause 89(1) material, Tab 1

[7] Exhibit 2, Clause 89(1) documents, Tab 9 (Invoice 455)

[8] Exhibit 2, Clause 89(1) documents, Tab 10 (Invoice 457)

[10] Exhibit 2, Clause 89(1) documents, Tab 6

[15] Longford Investments Pty Ltd v Commissioner of Land Tax (NSW) ( 1978) 8 ATR 656 at 660

[19] [2016] VSC 322

[20] (1979) 9 ATR 451

[22] Exhibit 2, Clause 89(1) documents, Tab 13

[24] CDPV Pty Ltd & Ors v Commissioner of State Revenue at [33]