Ghali v Chief Commissioner of State Revenue

Judgment 1BASTEN JA: The Chief Commissioner of State Revenue assessed Mr Magdi Botros Ghali (the appellant) as liable for land tax on a property known as 5 Beecroft Road, Pennant Hills, ("Beecroft Road") for the years 2005, 2006 and 2007. The property was purchased by the appellant in 1999. It remained property owned by him at midnight on 31 December before each of the tax years in question: Land Tax Management Act 1956 (NSW) ("the Land Tax Act"), s 8. The tax was therefore properly levied on the taxable value of that land unless the land was exempt from taxation under the Land Tax Act. The appellant objected on the basis that the land was his principal place of residence and therefore exempt pursuant to s 10(1)(r) and Sch 1A of the Land Tax Act. The Chief Commissioner rejected the objection. 2In each of the relevant years, Pt 2, cl 2 of Sch 1A relevantly provided: 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, .... (2) Land is not used and occupied as the principal place of residence of a person unless: (a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. 3In the final tax year (2007) the exemption was subject to certain further restrictions set out in Pt 4 of Sch 1A, dealing with trusts and family ownership. Nothing turned on those provisions in the present case. Nor was it suggested that any of the three years should be assessed differently from the others. Procedural history 4The appellant challenged the Chief Commissioner's ruling in the Administrative Decisions Tribunal. He was successful before a single member: Ghali v Chief Commissioner of State Revenue [2011] NSWADT 261 (judicial member R Perrignon - "the Tribunal"). However, an appeal by the Chief Commissioner was upheld by an Appeal Panel: Chief Commissioner of State Revenue v Ghali (RD) [2012] NSWADTAP 20 (Judge O'Connor, President, M Hole, judicial member and C Bennett, non-judicial member). From that decision, the appellant appealed to this Court, pursuant to s 119 of the Administrative Decisions Tribunal Act 1997 (NSW) ("Tribunal Act"). 5The appeal must be on a question of law: Tribunal Act, s 119(1). That meant, in effect, that the appellant was required to identify a material error of law in the decision of the Appeal Panel. The appeal from the Tribunal to the Appeal Panel was also required to be made "on any question of law" but could, with the leave of the Appeal Panel, extend to a review of the merits of the appealable decision: Tribunal Act, s 113(1) and (2). The Appeal Panel did not extend the scope of the appeal to consider the merits of the decision below. Rather, it dealt with the matter on the basis that there had been at least one material error of law, and possibly two or three. 6Despite some obscurity in the reasoning of the Appeal Panel, the conclusion it reached was not attended by doubt and the appeal to this Court must be dismissed. Issues on appeal 7The grounds in the notice of appeal were discursive in form. They were set out in four numbered paragraphs. The first paragraph provided a statement of the issues decided by the Appeal Panel and did not in terms identify a ground of challenge. Paragraphs 2, 3 and 4 were headed "Questions of law". Each of the paragraphs contained what might be described as particulars of the errors of the Appeal Panel, which required each question to be answered in the negative. The questions were as follows: "(2) Can a person cede to another exclusive occupation of a property when there is no lease? (3) Could the Appeal Panel decide the appellant could not use the property as a residence, when the respondent limited himself to saying such a use was merely against the weight of the evidence? (4) Did the Appeal Panel conclude, in a procedurally fair manner, that there was a case for extending the appeal to the merits?" 8Not all grounds were pressed on appeal. The written submissions relied on at the hearing did not make specific reference to ground (4), but appeared to rely upon the other grounds. At the hearing of the appeal, the appellant's case was largely confined to ground (2), and on the basis that a particular passage in the reasons of the Appeal Panel expressed findings of fact contrary to those made by the Tribunal and which were "not open on the evidence". 9The respondent filed a notice of contention which sought to support the decision of the Appeal Panel on four bases other than those relied upon by the Panel. Whether each of them was strictly limited to a point of law, may be doubted. However, because no legal error has been demonstrated in the decision of the Appeal Panel, it is not necessary to address the notice of contention. Findings of fact 10The uncontroversial evidence was that the appellant and his wife, having been married and cohabited since April 1978, separated in April 1999. In 1982 the appellant and his wife had jointly purchased a property at Harold Avenue, Pennant Hills ("Harold Avenue"). The property remained in joint names throughout the relevant period. Shortly after the appellant and his wife separated in 1999, he purchased Beecroft Road. The following further facts were found by the Tribunal and appear not to have been in dispute before the Appeal Panel: "9 After he had purchased the Beecroft Road property, Mr Ghali moved out of the matrimonial home at Harold Avenue, and occupied the Beecroft Road property as his home. Mrs Ghali continued to occupy the former matrimonial home in Harold Avenue. 10 This state of affairs continued until 2001. Mrs Ghali then asked Mr Ghali if he would please renovate the home at Harold Avenue for her. She admired the way he had renovated his home at Beecroft Road, and wished to enjoy a similar standard of living. She reminded him that she had assisted him to purchase Beecroft Road by consenting to the use of [an investment property held in joint names] as security. 11 Mr Ghali obliged her. He arranged for Mrs Ghali to move out of Harold Avenue, and into the Beecroft Road property, with all her furniture. ... 12 In May 2001, Mr Ghali moved out of his home at Beecroft Road, and into the Harold Avenue property. The latter was bereft of all furnishings, except a bed and a kitchen table, which Mr Ghali brought with him. He also brought his clothes, toiletries and bed linen. 13 On moving into Harold Avenue, he commenced to renovate it. The renovations were extensive. ... The renovations took over six years to complete, finishing in November 2006. 14 In March 2007, Mr Ghali moved back into the Beecroft Road property, and Mrs Ghali moved back to her home at Harold Avenue. 15 During the long course of the renovations, Mr Ghali lived at the Harold Avenue property, and Mrs Ghali lived at the Beecroft Road property, except for two occasions each year. On these occasions, they would swap residences - Mr Ghali would move back into Beecroft Road and Mrs Ghali into Harold Avenue. This occurred annually for about three weeks from around 20 December to 10 January, and for about the same period of time from mid-July to early August. 16 Mr Ghali explained that he was a member of the Coptic Christian religion. During the Christmas and New Year period, he would celebrate Christmas at the appropriate time for members of that faith, and entertain his friends at the Beecroft Road home. He explained that his wife would not attend these celebrations, as she was of Japanese background, and did not speak Arabic, which was the language of his guests. 17 In the period July to August, Mr Ghali would celebrate the anniversary of his purchase of his Beecroft Road home, again by entertaining his friends there and living there. His wife would again return to her home at Harold Avenue at this time. 18 Mr Ghali is a bus driver. While he lived at Harold Avenue, he would work his normal shift, and return home to the Harold Avenue property to live. His spare time was consumed in executing the renovations there." 11It was accepted that the appellant could not satisfy cl 2(2)(a) of Sch 1A and therefore relied upon (b). It was also not in dispute that the Tribunal stood in the shoes of the Chief Commissioner, so that it was required to be satisfied, on the facts presented to it, that Beecroft Road was used and occupied by the appellant as his principal place of residence, in the relevant taxation years. 12Two facts on which the case turned were ultimately not controversial. First, the appellant divided his time in each year between Harold Avenue and Beecroft Road, spending 42 weeks in the former and six weeks in the latter. Secondly, he in fact lived primarily in Harold Avenue for some seven years for the purpose of carrying out renovations, with the intention that he would ultimately return to Beecroft Road and his estranged wife would then move to Harold Avenue. 13The reference in the last paragraph to the appellant having "lived primarily in" Harold Avenue was not tendentious. It was consistent with language used by the Tribunal: for example, the Tribunal stated at [32]: "The period it took to complete the renovations, and the period during which Mr Ghali resided at Harold Avenue for that purpose, was remarkably long. However, I am satisfied that he resided there solely for the purpose of executing the renovations. Such an intention is corroborated by the Spartan conditions in which he lived throughout the long period of his residence there." [Emphasis added.] 14Before leaving the findings of fact, it is necessary to set out one further paragraph which was at the heart of the appeal, as presented at the hearing. Having set out the relevant legislative provisions and referred to particular authorities, the Tribunal analysed the facts in Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57; 54 ATR 400. The principal facts in that case were succinctly stated in the following terms as part of the agreed facts: "6 The Respondent owned a property at Willoughby NSW ('Willoughby property'), in which she lived with her two sons. However, from 1998 the Respondent began to spend a lot of time with her then partner (now her husband) at a property owned by him at Drummoyne, NSW ('Drummoyne property'). 7 At that time, the Respondent was not sure whether her relationship with her partner was going to work. Her sons remained at the Willoughby property. They never paid rent. They paid the utility bills, while she paid the rates and insurance. Apart from her clothing her other possessions remained at the Willoughby property. When her partner was away on business and on other occasions she stayed with her sons at the Willoughby property." 15Having recited these facts of Mesiti, the Tribunal said, at [53]: "In this case, as in Mesiti, Mr Ghali was the owner of the subject property throughout the period in question. He had control over it. It was he who invited Mrs Ghali to live there, and to install her furniture and belongings there. It was he who decided the duration of her stay, and who decided that she would vacate the property twice a year to accommodate his desire to recreate and entertain friends. Like Mrs Mesiti, he used the land for residential purposes and for no other purposes, even though he arranged for his wife to live in the property for most of the time while he was living elsewhere. Like Mrs Mesiti, he occupied the land because, as its sole owner, he enjoyed control over it and exercised that control. He maintained the right to exclude strangers, and even - however politely - to exclude Mrs Ghali when it suited his convenience. There is no evidence that the Beecroft Road property was used for any purpose other than residential purposes." Issues before Appeal Panel (a) place of residence 16There are circumstances where, for the purposes of taxation, a person may have more than one place of residence. In Gregory v Deputy Federal Commissioner of Taxation (WA) [1937] HCA 57; 57 CLR 774, the issue was whether the taxpayer derived income from primary production in the Northern Territory, as a resident of that Territory. Dixon J noted that the taxpayer was in Darwin (NT) for approximately 131 (or possibly 113 days), in Broome (WA) for 161 days and travelling for some 73 days: at 777. His business was pearl fishing. Dixon J accepted that he had two residences, one of which was in the Territory. 17Despite the significant and regular discrepancy in the periods spent by the appellant at each property during the relevant tax years, the Tribunal accepted that the appellant had two residences, but that only one (Beecroft Road) was his principal place of residence. However, the Appeal Panel upheld ground 4 on the Chief Commissioner's appeal to it, which was formulated as follows: "4 Whether the Tribunal erred in finding that the applicant used and occupied the Beecroft Road property as a residence in the relevant land tax years because there was no factual basis for that finding (see decision below at [62])." 18The parties accepted that the word "because" was intended to mean "as" or "when": that is, the finding was not open because there was no factual basis for it. The reasons of the Tribunal at [62], were as follows: "As Mr Ghali resided both at Beecroft Road and at Harold Avenue during the relevant period, it is also necessary to consider which of them was his 'principal' residence." 19The Appeal Panel upheld this ground, concluding that "no arguable competing residences issue could in fact arise": at [34]. The reasons continued: "His place of living - Harold Avenue - was for those weeks his place of residence on any reasonable view of the circumstances, albeit spartan. The fact that he returned to Beecroft Road for two limited periods in each year did not convert Beecroft Road into a residence in its ordinary sense." 20The reasoning of the Appeal Panel underlying this conclusion is not easy to follow. However, it appears to have held that because, as a matter of fact, the appellant did not have access to Beecroft Road for 46 weeks of the year, Beecroft Road could not, as a matter of law, have constituted a residence for him during such a year: at [29], set out below at [37]. The Appeal Panel distinguished the situation where a person moves between two properties, each of which is available for him or her to use as a residence throughout the year, or at least a significant part of the year. On this approach, whether the appellant could, in exercise of his legal rights of ownership, have obtained exclusive use and occupation of Beecroft Road was not to the point; as a matter of fact, he did not seek to exercise such a right. 21There are a number of problems with the analysis of the Appeal Panel, although they were not at the forefront of the appellant's case. First, the analysis removes the term "residence" from the statutory phrase "principal place of residence". Generally, such statutory phrases are not to be construed in this manner. Thus, in OV and OW v Members of the Board of the Wesley Mission Council [2010] NSWCA 155; 79 NSWLR 606, Handley AJA and I said: "29 In the area of statutory construction, the perceived difficulty arises from a distinction commonly drawn in the authorities between the propositions that, (a) the ordinary meaning of a word is a question of fact, but (b) the effect or construction of a term whose meaning or interpretation is established is a question of law: see Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322; 43 FCR 280 at 287. This distinction encourages a three stage approach to identifying the construction of a statutory provision. Thus, the first question asked is whether a particular word is used in its ordinary meaning, rather than a technical meaning; if so, the second question is to identify the ordinary meaning and the third question is to place that meaning into the statutory context, in order to identify the proper construction of the provision. 30 That approach is misconceived; it involves the fallacy identified by Lord Hoffmann in R v Brown [1996] AC 543 at 561, being 'one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence'. His Lordship continued: 'This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.' 31 As the High Court explained in Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36, 186 CLR 389 at 397, accepting that the notions of meaning and construction are inter-dependent, 'it is difficult to see how meaning is a question of fact while construction is a question of law'." 22The problem of extraction of individual words from their context is compounded when judicial exegesis in one statutory context is transferred to another. Phrases like "use and occupation" and "use or occupation" seem particularly susceptible to such treatment. It is thus an irony that one of the cases which commenced this process in Australia included the remark of Griffith CJ that "[t]here is nothing more illusory than to attempt to illustrate one Statute by a differently-worded section of another": Knowles v Council of the Municipality of Newcastle [1909] HCA 72; 9 CLR 534 at 538-539. 23Isaacs J in Knowles said at 544: "... occupation is not synonymous with mere legal possession. Occupation includes possession as its primary element, but it also includes something more." Referring to the particular section of the Local Government Act 1906 (NSW) there in issue, he continued at 545: "The first condition of liability is that it must be 'used or occupied for any purpose.' 'Used' is there not necessarily synonymous with 'occupied,' and probably points to utilization in some other way than merely actual occupancy." 24To say that two concepts are "not synonymous" is not to say much: however, to say that occupation includes possession, but also something more, may be misleading. Land may be occupied by a licensee who does not have legal possession. Further, the phrase "used or occupied" may well indicate that different concepts are envisaged, whereas the phrase "used and occupied for [a specified] purpose" may better be understood as a single concept in which each element is governed by the specified purpose. 25Although no other member of the Court in Knowles used the language of Isaacs J, it has been adopted in subsequent cases. In Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 this Court considered s 9 of the Land Tax Act, as then in force, which operated where land owned by a person was "used and occupied by that person solely as the site of a single dwelling house": at 532D. Bowen JA (with whom Jacobs P agreed) thought that the use of the two concepts suggested that each was used in a different sense and that the requirement was cumulative, referring to the comments of Isaacs in Knowles dealing with a disjunctive, rather than a conjunctive construction: see Christie at 533E. Bowen JA also cited the reference to 'occupation not being synonymous with legal possession', noting that it involved "an element of control, of preventing or being in a position to prevent the intrusion of strangers": at 533G. 26As will be seen, this last reference appears to have been interpreted in later cases as indicating that the capacity to control is sufficient to satisfy "occupation". However, that interpretation is much to be doubted. Legal possession implies the capacity to control: K Gray and SF Gray, Elements of Land Law (5th ed, 2009, OUP) [2.1.6]. Or, as it was expressed by McHugh J in Western Australia v Ward [2002] HCA 28; 213 CLR 1 at [518], "[a] person may retain legal possession - exclusive possession - even though some other person has sole physical occupation of land", referring to Windeyer J in Radaich v Smith [1959] HCA 45; 101 CLR 209 at 223. Thus, if legal possession connotes capacity to control, the reference to "an element of control" in Christie must be understood as a factual description of physical activity, as the rest of the paragraph, referring to fencing and physical presence on land, suggested. (Christie was a case far removed from the present, the issue being whether a house surrounded by land on three adjacent lots, purchased as one parcel, but being contained on four separate titles, was all used and occupied as a dwelling house.) 27The idea that mere legal possession might be sufficient to demonstrate use and occupation as a principal place of residence underlay the ground of appeal in this case which asked whether a person could "cede exclusive occupation of a property when there is no lease". The short answer is in the affirmative: as explained by Windeyer J in Radaich at 223, "persons who are allowed to enjoy sole occupation in fact are not necessarily to be taken to have been given a right of exclusive possession in law." 28The underlying implication in the question was that, absent a lease to his estranged wife, the appellant remained in exclusive possession and thus in occupation. That assumption appears to have gained credence from the judgment of Gzell J in Flaracos v Chief Commissioner of State Revenue [2003] NSWSC 68. However, such a reading would be erroneous and must result from taking words out of context. Thus, Gzell J noted that it was open to the Chief Commissioner to conclude that "in leasing his home, he had parted with the possession of it in favour of the tenant": at [17]. The judge, however, was satisfied that "[h]is leasing of portion of the dwelling to tenants involved joint physical presence in the dwelling and not the handing over of exclusive possession to the tenant": at [18]. Use of the language of "leasing" and "tenants", together with a denial of conveying exclusive possession, may be an unusual use of language, but the negative inference, that if he had not leased the premises, he retained possession and thus use and occupation, is not available. The factual finding of the judge was that the home was used "as his sole and, therefore, his principal place of residence": at [23]. Apart from the fact that others shared the premises with him, the case was primarily one of an itinerant worker (or person seeking employment) who, when not travelling, used the home as his sole place of residence. 29Secondly, the focus of the statutory test is that the land "is used and occupied" as a principal place of residence. In De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86, in considering the language of cl 2(1), I suggested at [71]: "The terms 'use' and 'occupation' may not be synonymous, though in a practical sense they will usually be identified by the same characteristics which, where use and occupation are associated with ownership, will commonly involve the exercise, or at least the intention to exercise, the legal right of control which flows from ownership: Council of the City of Newcastle v Royal Newcastle Hospital (1959) 100 CLR 1 at 4 (PC, Lord Denning). That fact suggests that the phrase 'use and occupation' should be treated as an hendiadys, thus relieving of the need to consider each concept separately." 30A similar approach might be adopted to the language of cl 2, namely "used and occupied". As further stated in Royal Newcastle Hospital (at p 4), "[o]ccupation is a matter of fact". Use of land is also a matter of fact. It may be said that the appellant used Beecroft Road by allowing his separated wife to reside there. He did that in the exercise of his rights and powers as owner. Thus the house was used as a residence, but it was not used as his residence. This appears to be the analysis adopted by the Appeal Panel. 31That analysis is correct, and involves an application of the statutory language to the facts of the case. The next question is whether in reaching that conclusion the Appeal Panel was addressing a question of law. The Panel itself appears to have identified the question of law as turning on the proposition that no other conclusion was reasonably open on the facts of the case. In Bill Williams Pty Ltd v Williams [1972] HCA 23; 126 CLR 146 at 156, Walsh J stated: "In some cases it is a difficult task to determine whether different conclusions or but one conclusion are or is reasonably open. It is easy, in endeavouring to make a decision on that question, to slip across the boundary which must be maintained between the evaluation of the legal consequences of facts already found and the making of findings of fact." 32In order to appreciate the nature of the issues addressed by the Appeal Panel, it is necessary to go back to the reasoning of the Tribunal. It commenced with the application of cl 2(2)(a). It did that in two parts. First, considering the evidence as to the ownership and legal rights of the appellant and the use of the premises by his wife, it concluded at [54]: "For those reasons, I am satisfied that at all relevant times the land was 'continuously used and occupied by [Mr Ghali] for residential purposes and for no other purposes', in satisfaction of the requirements of clause 2(2)(a) of Schedule 1A." 33Nevertheless, the Tribunal concluded that cl 2(2)(a) was not satisfied because it could not be said that "no other land" satisfied that test: the land at Harold Avenue clearly did: at [57]. The Tribunal then went on to consider the requirements of cl 2(2)(b), having determined that the appellant had continuously used and occupied Beecroft Road for residential purposes and for no other purposes. 34The reasoning of the Tribunal was erroneous for one or both of two reasons. Either it took the view that the intention of the appellant to return to Beecroft Road, once he had completed renovations at Harold Avenue (a process which took six years and was not completed within the relevant period), demonstrated "use and occupation" of Beecroft Road, or it took the view that the use of the property by his wife, with his permission, constituted use for residential purposes. So far as the first view is concerned, an intention to use and occupy land in the future does not by itself demonstrate present physical use and occupation. So far as the second view is concerned, the statutory reference to use and occupation of the land as a residence is to use and occupation by the owner as his or her residence, not use and occupation by another person with his or her consent. Were it otherwise, an owner would always use and occupy residential premises as a residence, but that would not conform to the statutory purpose. 35When read in the context of the decision of the Tribunal, the Appeal Panel found that the reasoning of the Tribunal was erroneous in point of law. That conclusion was correct. (b) erroneous finding of fact 36As the oral submissions were developed, the appellant focussed on the proposition that the Appeal Panel had erred in a manner summarised in the written submissions in reply in the following terms, at paragraph 8: "The conclusion that Mr Ghali had effectively ceded exclusive occupation of the Beecroft Road Property to his estranged wife is erroneous because (a) it was contrary to an express finding of fact by the Tribunal, from which finding the Appeal Panel was precluded from departing by the operation of s 113(2)(a) of the Administrative Decisions Tribunal Act 1997; and (b) it was not open on the evidence, in that it was unsupported by any evidence, and was contradicted by all of such evidence as related to the issue." 37The offending passage in the reasons of the Appeal Panel was said to be found in the second sentence of [29], which should be set out in full. "The Tribunal was mistaken in treating the present circumstances as being analogous to cases such as Mesiti. The key difference, as we see it, is that in the present case the taxpayer had ceded to his separated wife, as a practical matter, exclusive occupation of the Beecroft Road property for 46 weeks of the year. The fact that Mr Ghali may have had 'control' (reasons, [53]) in a legal and, perhaps emotional, sense over the occupation of the Beecroft Road property does not displace the primary circumstance in this case, that he did not come and go as he pleased. The fact of their separation is in that regard, of course, a significant matter; and is a material difference from the other two residence cases that the Tribunal has considered." 38The findings said to be inconsistent with the second sentence in this paragraph were those to be found in the reasons of the Tribunal at [53], set out above at [15], and in particular the finding that the appellant "occupied the land because, as its sole owner, he enjoyed control over it and exercised that control...[,] maintained the right to exclude strangers, and even - however politely - to exclude Mrs Ghali when it suited his convenience." 39There are two preliminary points to be made in reference to the appellant's submissions. First, given that the Appeal Panel did not extend the scope of the internal appeal to cover the merits of the decision below, it was, as the appellant correctly submitted, limited to questions of law arising from the findings of fact made by the Tribunal. If the Appeal Panel made a fresh finding of fact, whether consistent with findings of the Tribunal or not, that course was impermissible. Accordingly, it was irrelevant whether any fresh finding of fact was supported by the evidence or not. 40There is a second point, however, which concerns the exercise undertaken by the Tribunal upon which the Appeal Panel was commenting. Subject to the caution set out above as to construing legislation, it was entirely appropriate for the Tribunal to seek assistance from decisions of the Appeal Panel and the courts with respect to the meaning of the legislative provisions it was required to apply. However, the primary task, once the meaning had been established, was to apply the legislation and, in so doing, to make such findings of fact on matters in dispute as were necessary for that exercise. To use another case, which appears to provide analogous factual circumstances, as a template against which to measure similarities and departures of the present case is a misguided approach, because it will tend to distract attention from the proper application of the statutory language to the specific facts of the case before the relevant tribunal. While statements of principle should be read in their factual context, precedents are authority for principles of law; the result of applying the law to particular facts is merely an application of principle: Donnellan v Woodland [2012] NSWCA 433 at [197] (Beazley JA). Thus, whether or not the Tribunal was mistaken in treating the present case as 'analogous to' Mesiti, it was mistaken in approaching the present case by reference to other 'analogous' circumstances. 41Addressing the appellant's argument in its own terms, it must be rejected. For reasons which have already been explained, the Appeal Panel correctly assessed the circumstances of the present case by reference to "a practical matter" (not a legal capacity), namely that the taxpayer had permitted his estranged wife exclusive occupation of Beecroft Road for most of the year. That was precisely what the Tribunal had found at [53] where it said that he had "invited Mrs Ghali to live there, and to install her furniture and belongings there" and that he had "arranged for his wife to live in the property for most of the time while he was living elsewhere". Those circumstances were unlike those of Ms Mesiti, who had not installed any other person to occupy her home, which she continued to use from time to time as it suited her, whilst maintaining contact with her two sons who also lived there as part of the family. It is true that the Tribunal had not described the situation as the appellant having "ceded" exclusive occupation to his estranged wife, but nothing turns on the use of that term. 42No doubt Mrs Ghali could not have lived in his house without his consent, but the fact was that for 46 weeks each year she did live there, no doubt exercising control over the property as against strangers and in favour of invitees, pursuant to the consensual arrangement which, as a matter of fact, he did not seek to end in the relevant period. The point behind the statement of the Appeal Panel, as revealed in the third sentence of [29], was that legal capacity did not provide an answer to the factual circumstances involved in the concept of use and occupation. Not only did the Appeal Panel not purport to make any finding of fact at [29]; the factual circumstances which it sought to describe (in order to contrast them with Mesiti) fairly reflected the undisputed circumstances revealed by the findings of the Tribunal set out above. 43This ground of challenge to the decision of the Appeal Panel must be rejected. Future intentions 44The Appeal Panel also addressed the use made by the Tribunal of the "subjective intention of the taxpayer", stating: "37 The Tribunal gave considerable emphasis to the respondent's long term intentions. It accepted the respondent's evidence that his intention was to return to live at Beecroft Road on a full-time basis once the renovations at Harold Avenue had been completed. 38 The focus of the legislation is the living circumstances of those claiming the exemption in the relevant period. As this is an annualised tax system the focus is the circumstances on the taxing date, as reasonably informed by the period surrounding it on either side .... 39 Here the taxpayer left Beecroft Road around 2001 and was away for six years. His future intention to return to Beecroft Road involving such a distance in time should not, we consider, have been taken into account in the away that it was." 45Subjective intentions can indicate the nature or quality of activities carried out on the land: however, intentions as to the future will not overcome the absence of physical use and occupation in the relevant tax year. The Appeal Panel identified an error of law on the part of the Tribunal, by placing the use of future intentions into the proper statutory context. It did not deny that subjective intentions could be permissible considerations: it merely denied that intentions as to future use could, in the circumstances of this case, render that which was not use and occupation of the land to be use and occupation of the land as the appellant's residence in the particular tax years: cf Lo v Chief Commissioner of State Revenue [2013] NSWCA 180 at [9]-[10]. In this the Appeal Panel was correct. 46To have a present intention to use and occupy Beecroft Road in the future was not inconsistent with a present intention to reside at Harold Avenue, where he in fact resided in the taxation years. Conclusions 47Although the reasons of the Appeal Panel were by no means pellucid, when read in the context of the decision from which the appeal was brought, the particular errors of law identified by the Appeal Panel are revealed and the conclusions shown to be correct. The appeal should be dismissed. The appellant must pay the Chief Commissioner's costs in this Court. 48TOBIAS AJA: I agree with Basten JA. 49McDOUGALL J: I agree with Basten JA.