Giammarco and Giammarco v Chief Commissioner of State Revenue

NCAT Administrative and Equal Opportunity|2019-03-15|Before: Mr J

Introduction

This application relates to land tax assessed by the Respondent in respect of a property owned by the Applicants and located in Kangaroo Valley NSW (the Land) .
This application seeks the review of certain decisions made by the Respondent under the Land Tax Management Act 1956 (the LTMA). These decisions were: 1. On 28 April 2016, to deny the Applicants an exemption from land tax in respect of the Land under section 10AA of the LTMA; 2. On 28 April 2016, to issue an assessment of land tax in respect of the Land for the 2016 land tax year, on the basis that the Land was not exempt from land tax; 3. On 28 April 2016, to issue reassessments of land tax in respect of the Land for each of the 2012, 2013, 2014 and 2015 land tax years, again on the basis that the Land was not exempt from land tax; 4. On 22 November 2017, to issue an assessment of land tax in respect of the Land for the 2017 land tax year, on the basis that the Land was not exempt from land tax; 5. On 22 November 2017, to deny the Applicants an exemption from land tax in respect of the Land under section 10AA of the LTMA for the 2017 land tax year; and 6. On 22 November 2017, to deny the Applicants an exemption from land tax in respect of the Land under section 10(1)(p) of the LTMA. 7. In these reasons, the decisions made on 28 April 2016 are referred to as the 2016 decisions, and those made on 22 November 2017 are referred to as the 2017 decisions.
This is an application under section 96 of the Taxation Administration Act 1996 (TAA) for the administrative review by the Tribunal of the Respondent's decisions. The Applicants: 1. objected to the 2016 decisions by a written objection dated 29 July 2016; 2. on or shortly after 16 January 2017, received the Respondent's determination dated 16 January 2017 of that objection, in which he denied the objection (the 2017 denial); 3. objected to the 2017 decisions by letter to the Respondent dated 26 February 2018; 4. on or shortly after 16 August 2018, received the Respondent's determination dated 16 August 2018 of that objection, in which he denied the objection (the 2018 denial); 5. were dissatisfied with the 2017 and 2018 denials; and 6. applied to the Tribunal on 19 October 2018 for an administrative review of some at least of the Respondent's decisions; it is clear from certain correspondence between the Applicants and the Respondent which was attached to the application that the Applicants seek a review of at least the assessment dated 22 November 2017 comprised in the 2017 decisions, although the generality of the grounds for application set out in Section 3 of the application form suggest that the Applicants in fact also seek the review of the other 2017 decisions and of the 2016 decisions.

Application made out of time

The Respondent says that the application, to the extent that it relates to the 2016 decisions, has been made out of time, since: 1. The Respondent's decision rejecting the Applicants' objection to the 2016 decisions was made on 16 January 2017 and communicated to them by the Respondent on or shortly after that date; 2. Section 99(1) of the TAA requires that an application for the administrative review of a decision by the Respondent be made within 60 days of the date of issue of notice of the Respondent's determination of the objection; 3. the Applicants' application for administrative review of the 2016 decisions was lodged on 19 October 2018, so that the present review, to the extent that it relates to those decisions, is manifestly out of time by a little over 19 months; and 4. the Application should therefore be dismissed by the Tribunal, to the extent at least that it relates to the 2016 decisions.
The Respondent also: 1. recognises that Section 99(1) authorises the Tribunal to ".., allow a person to apply for a review after that 60-day period", and that this provision itself complements section 41 of the Civil and Administrative Tribunal Act 2013, which allows the Tribunal to "… extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction …"; and 2. says that having regard to the considerations outlined by the Tribunal in Daoud v Chief Commissioner of State Revenue [2013] NSWCATAD 53, and more recently applied in DW Tolson Management Pty Limited v Chief Commissioner of State Revenue [2016] NSWCATAD 113 concerning extensions of time for reviews, the Tribunal should not in the present case exercise its discretion under section 99(1) of the TAA to allow the present application to proceed in relation to the 2016 decisions.
The relevant passage from Daoud v Chief Commissioner of State Revenue [2013] NSWCATAD 53 is found at paragraphs [13] to [16] and is as follows: Principles Regarding an Extension of Time 13. Section 41 of the Civil and Administrative Tribunal Act 2013 (NCATA) provides that the Tribunal may by application extend the period of time for the doing of anything under any legislation in respect of which the Tribunal had jurisdiction despite anything to the contrary under that legislation. Such an application may be made even though the relevant period of time has expired. 14. Accordingly, the discretion to extend time is broad and unfettered. However, it must be exercised judicially and having regard to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings". 15. The grant of an extension of time is not automatic. The discretion to extend time is given for the sole purpose of enabling the Tribunal to do justice between the parties. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. It is also necessary to consider the prospects of the Applicants succeeding in their application. In order to justify the Tribunal extending the time, there must be some material upon which the Tribunal can exercise its discretion: see Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2] per McHugh J. and the authorities referred to therein. See also Opera Australia Ltd v Carr [1999] NSWADTAP 6 at [16] and Chand v Rail Corporation of New South Wales No 3 [2010] NSWADTAP 11 at [20]. 16. Time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings, and to achieve finality in litigation. For these reasons, time limits should generally be strictly enforced unless the interests of justice require that the extension be granted. 17. As set out in Jackson v Land and Housing Corporation at [22] albeit in the context of an Appeal, the relevant considerations in deciding whether to grant an extension of time include: 1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the Applicant Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; 2) The discretion is to be exercised in the light of the fact that the Respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success Jackamarra at [7]; 3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: a) The length of the delay; b) The reason for the delay; c) The Applicant's prospects of success, that is usually whether the applicant has a fairly arguable case; and d) The extent of any prejudice suffered by the Respondent (to the appeal): Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and 4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the Applicant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] [59].
Applying these considerations: 1. On the one hand 1. The delay was nearly 19 months, which in the context of a statutory period of 60 days for seeking review is clearly lengthy and significant; 2. The Applicants were not able to point to any particular circumstance which prevented them from lodging the review application within the 60-day period; 3. The respondent's letter dated 16 January 2017 states clearly, under the heading Appeal Rights, that "If you are dissatisfied with our decision you may request the NSW Civil & Administrative Tribunal or the Supreme Court to review the decision within sixty (60) days of the date of this letter" [underlining added]; the Applicants were clearly on notice that any request for review was to be made within the relevant period; and 4. On a broad overview, the Applicants' substantive arguments face some difficulty in meeting the threshold, that they amount to a fairly arguable case; but 1. On the other: 1. At the time at which the 60-day period expired the Applicants were engaged in discussions with the Respondent concerning the possibility of applying for the Land's exemption from land tax as land which is subject to a biobanking agreement; this is clear from the Respondent's email dated 15 March 2017 to Mr Giammarco, which concludes as follows: "As this exemption application will require a new decision, any objection rights will recommence from the date after our decision is made. However, your current liability remains due and payable until such time as we make a determination on your new exemption application. Delays in making payments on time, may attract interest" ; 1. These discussions continued for some months at least, as is clear from exchanges of emails between Mr Giammarco and the Respondents in May 2017; 2. In their submissions in reply dated 8 March 2019, the Applicants refer to (and reproduce) an exchange of emails between them and the Respondents, in which: 1. On 15 March 2017 the Applicants by email sent at 4:07 pm seek ".. an extension of time to apply for an appeal .."; 1. The Respondent's officer replied by email sent on that day at 4:15pm as follows: "Unfortunately we can't grant an extension of time to appeal. That is up to the Tribunal. You would need to contact them. We certainly wouldn't oppose any request for an extension of time" ; 1. Mr Giammarco replied to the Respondent at 9:37am on 16 March 2017 as follows: "I need a letter from you saying that there is no objection to an extension of time. So that I can request it in writing from NCAT. Lets say another 60 days. By then we should all know where its all going and hopefully resolved"; and 1. In response, an officer of the Respondent emailed Mr Giammarco at 10:58am on 16 March 2017 as follows: "Thank you for your email. We will not oppose a late application to NCAT nor a request to lodge a late application. However it is up to the Tribunal to make the decision"; and 1. There appear to be no substantive issues to be considered in the Applicants' requested review of the 2016 decisions which are not also to be considered in relation to the review of the 2017 decisions.
The present application, to the extent that it relates to the 2017 decisions, may also be slightly out of time, since it was made on 19 October 2018 while the Applicants appear to have received the 2018 denial on or shortly after 16 August 2018. However, by email dated 15 October 2018 one of the Respondent's officers agreed with the Applicants that the Respondent did not object to a 2-week extension - that is to say, until 30 October 2018 - for them to lodge with the Tribunal their application for review of the 2017 decisions. The application was made well within that 2-week period.
In view of this communication from the Respondent, and having regard to the following: 1. counsel for the Respondent did not object, either in his oral or his written submissions, to conduct of the review of the 2017 decisions, despite the possibility that the application may have been made several days outside the statutory period for doing so; 2. the application was made well within the 2-week period specified in the respondent's email of 15 October 2018; and 3. the period by which lodgement of the application fell outside the statutory period of 60 days under section 99 of the TAA was, at most, 4 days, 4. I am satisfied that the principles set out in section 36 of the Civil and Administrative Tribunal Act 2013, together with the interests of justice referred to in from Daoud v Chief Commissioner of State Revenue [2013] NSWCATAD 53 at paragraph [16], are better served by allowing the application to proceed, at least in relation to the 2017 decisions, despite any slight lateness with which it was made.
So far as the application concerns the 2016 decisions, however, in the ordinary course of matters I would have been disinclined to allow any extension of time, having regard to the matters outlined in paragraph 10(1) above and the observation in Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53, at [16], that ".. time limits should generally be strictly enforced …".
However, I am conscious that at the very time in March 2017 when the Applicants should have been taking steps to lodge their review application in order to meet the timing requirements of section 99: 1. the email exchanges set out in paragraph 10(2)(c) above were occurring, and 2. these ended relevantly with the Respondent's emailed assurance on 16 March 2017 that "We will not oppose a late application to NCAT nor a request to lodge a late application. However it is up to the Tribunal to make the decision".
I note that this statement was made in response to the immediately preceding email from Mr Giammarco suggesting an extension of 60 days, but nonetheless its wide and unqualified terms: 1. are inconsistent with the Respondent's submissions in the present review, that I dismiss the application so far as it relates to the 2016 decisions because of lateness; and 2. could reasonably have been taken by its recipient as a representation by the Respondent that he would not object generally to an application by the Applicants for review of the 2016 decisions being made out of time.
Hence, in my view, for the Tribunal to reject the application so far as it relates to the 2016 decisions on the basis that it was made out of time would risk unfairness to the Applicants, since: 1. there is a realistic possibility that the Applicants' failure to lodge in a timely way their applications for review of those decisions was based, to some degree at least, on their reliance on the Respondent's email sent at 10:58am on 16 March 2017; 2. the interests of justice, referred to in Daoud v Chief Commissioner of State Revenue at paragraph [16] as a qualification on the desirability of ensuring the strict enforcement of time limits, require that the application be permitted to be made out of time in relation to the 2016 decisions in order to eliminate this risk of unfairness; 3. the issues raised by the Applicants in relation to the 2016 decisions are also raised by them concerning the 2017 decisions, so that the same arguments and considerations need to be addressed in relation to both sets of decisions; and 4. in consequence, to allow the application to proceed in respect to the 2016 decisions despite its lateness does not impose any significant additional expense or delay on the Respondent.
I must emphasise that this is a decision made in the exceptional circumstances of this matter and should not be taken as suggesting any general willingness on the part of the Tribunal to depart from the principle stated in Daoud v Chief Commissioner of State Revenue, that time limits should generally be strictly enforced.

The nature of the review

The provisions of section 100 of the TAA apply to this review. Notably: 1. Sub-section 100(2) of that Act provides that neither the Applicants nor the Respondent are limited in the present application to the grounds of the objection; and 2. sub-section 100(3) of that Act provides that the Applicants have "… the onus of proving the applicant's case in an application for review", an onus which is discharged by reference to the ordinary civil standard: B&L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481.
Under section 63(1) of the Administrative Decisions Review Act 1997, in conducting a review the Tribunal ".. is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law".
Moreover, under section 63(2) of the Administrative Decisions Review Act 1997, in doing so the Tribunal "… may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision".

Legislative Background

The legislative starting point is the LTMA. This establishes a regime for: 1. imposing and calculating a tax, known as land tax, by reference to the value of land owned by taxpayers on 31 December in each year, and 2. exempting from that tax certain categories of land.
The first relevant exemption is set out in section 10AA of the LTMA, which provides as follows: 10AA Exemption for land used for primary production (1) Land that is rural land is exempt from taxation if it is land used for primary production. (2) Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land: (a) has a significant and substantial commercial purpose or character, and (b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). (3) For the purposes of this section, land used for primary production means land the dominant use of which is for: (a) cultivation, for the purpose of selling the produce of the cultivation, or (b) the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or (c) commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) or the commercial farming of fish, molluscs, crustaceans or other aquatic animals, or (d) the keeping of bees, for the purpose of selling their honey, or (e) a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or (f) the propagation for sale of mushrooms, orchids or flowers. (4) For the purposes of this section, land is rural land if: (a) the land is zoned rural, rural residential, non-urban or large lot residential under a planning instrument, or (b) the land has another zoning under a planning instrument, and the zone is a type of rural zone under the standard instrument prescribed under section 33A (1) of the Environmental Planning and Assessment Act 1979, or (c) the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land.
This exemption was inserted into the LTMA by Schedule 4 of the State Revenue Legislation Further Amendment Act 2005, which also omitted from the LTMA paragraph 10(1)(p) of the LTMA (old section 10(1)(p)). This paragraph had previously dealt with the exemption from land tax of land used for purposes of primary production, and provided relevantly as follows:
Land exempted from tax Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: (a) ………………………………………………… (p) with respect to taxation leviable or payable in respect of the year commencing on 1 January 1991 or any succeeding year, land that: (i) is land used for primary production in the course of the carrying on of a business of primary production, or (ii) is land used for primary production (whether or not in the course of carrying on a business of primary production) if the land is within a "rural" or "non-urban" zone under a planning instrument or (in the case of land not within a zone under a planning instrument) is land that the Chief Commissioner is satisfied is rural land. (p1) ……………………
The amendments made by Schedule 4 of the State Revenue Legislation Further Amendment Act 2005: 1. took effect on 7 December 2005; 2. were expressed in Part 17 of the LTMA (which was itself inserted into the LTMA by Schedule 4 of the State Revenue Legislation Further Amendment Act 2005): 1. to apply in respect of the assessment of land tax in the land tax year commencing on 1 January 2006 and subsequent years, and 2. not to apply in respect of the assessment of land tax in the land tax year commencing on 1 January 2005 and previous years, 3. so that the previous provisions of the LTMA continued to apply in respect of the assessment of land tax in the land tax year commencing on 1 January 2005 and previous years.
The second relevant exemption is that which as at 1 January 2017 was contained in section 10(1)(p) of the LTMA (new section 10(1)(p)). This provided relevantly as follows: 10 Land exempted from tax Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: (a) ………………………………………………… (p) land that is the subject of a biobanking agreement under Part 7A of the Threatened Species Conservation Act 1995, (p1) ……………………
This was inserted into the LTMA by Schedule 2 of the Threatened Species Conservation Amendment (Biodiversity Banking) Act 2006 No 125, with effect from 4 December 2006.
The expression biobanking agreement was defined in Part 7A of the Threatened Species Conservation Act 1995 as ".. an agreement entered into under Division 2" of that Act. Section 127I of that Act requires that any such agreement be recorded on the title of land to which it relates which is under the Real Property Act 1900: On being notified by the Minister that a biobanking agreement has been entered into, or that any such agreement has been varied or terminated, the Registrar-General must: (a) in the case of a biobanking agreement relating to land under the Real Property Act 1900 - register the agreement, variation or termination by making an entry concerning the agreement, variation or termination in any folio of the Register kept under that Act that relates to that land,
The Threatened Species Conservation Act 1995 was repealed with effect from 25 August 2017.

The Applicants' position

The Applicants' arguments appear, in summary, to be as follows: 1. The Land was recognised by the Respondent as exempt from land tax pursuant to old section 10(1)(p) under a letter issued by the Respondent to Mr P Giammarco dated 18 July 1997. There has been no relevant change in the nature or use of the Land since then, and in consequence it should remain exempt from land tax. 2. No notification was given to the Applicants in 2005 concerning the repeal of old section 10(1)(p) and the introduction of section 10AA. In the absence of any such notification, which would have allowed the Applicants the opportunity to reconsider in a timely way their continued ownership of the Land, the Land should continue to enjoy exemption from land tax. 3. Following the Land's subdivision into two titles in 2014 the Respondent initially did not treat it as exempt from land tax for the 2015 tax year. After representations made by Mr Giammarco, as set out in his email to the Respondent dated 2 February 2015, the Respondent: 1. accepted on 9 February 2015 that the Land was exempt from land tax pursuant to the primary production exemption consistently with the letter dated 18 July 1997, and 2. issued on 9 February 2015 a land tax assessment which recognised the Land as so exempt. 3. Having recognised the Land as exempt in 2015, the Respondent cannot properly reverse its position. 1. The Land satisfies the requirements for exemption from land tax under new section 10(1)(p) of the LTMA, relating to biobanking agreements. 2. The Respondent's conduct in reassessing the Land has been unfair and has denied them natural justice.

The Respondent's position

The Respondent's position is in summary as follows: 1. The Respondent's issue of reassessments in respect of the Land was a perfectly conventional exercise of his powers to do so under section 9 of the TAA, and was made in respect of land tax years to which section 10AA applied. 2. The Respondent is not in some way estopped or otherwise prevented from making the 2016 or 2017 decisions because he had, in 2015, treated the Land as continuing to be exempt from land tax. 3. The Applicants have conceded that the Land is not entitled to exemption under section 10AA. 4. The Land is not exempt by reason of the biobanking exemption in new section 10(1)(p) because it does not satisfy the conditions for such exemption. 5. The Applicants have not identified any conduct on the part of the Respondent which amounts to a breach of natural justice, and their engagement of the review provisions set out in Part 10 of the TAA indicates that they have in fact obtained procedural fairness.

Some relevant findings

According to a detailed report dated 17 February 2015 prepared by Dr AnneMarie Clements, of Anne Clements and Associates Pty Limited, environmental and Botanical Consultants, the bulk of the Land was zoned E3 Environmental Management under the Shoalhaven Local Environment Plan 2014, while a small portion was zoned RU1 - Primary Production.
Title searches indicate that: 1. There is not registered against the Land an agreement of the kind contemplated by Part 7A of the Threatened Species Conservation Act 1995; and 2. Lot 1 in deposited plan 1197003 has registered against it a positive covenant (dealing number AK035700) in favour of Shoalhaven City Council, relating to the management of certain vegetation on that lot. No more than 12% of the Land is suitable for use for primary production. The Applicants have investigated what types of primary production might successfully be undertaken on the Land. They have, moreover, obtained a water entitlement for the Land and a pipeline easement appurtenant to the Land, but in their own words: " …were obstructed from carrying out primary production by the unavailability of water organized via a water licence .. and an access easement …, through a non-willing property owner"; and "The 1997 intention of PP was converted to actual by proposed improvement to water supply, via an easement into adjoin property, but by obstructing the adjoining owner made it impossible and has therefore frustrated the PP not been realised for 12% of the land".

Reasoning

The Applicants' arguments are, with respect, rather convoluted, sometimes contradictory, at times incoherent, and sometimes more than a little difficult to follow. In considering them for purposes of this review I have attempted to distil them to their essentials, and in doing so have identified a number of key strands. It is to these strands of argument that I will subsequently refer.

The continuing relevance of the Respondent's letter dated 18 July 1997

The first recurrent strand is that since: 1. the Respondents recognised in a letter to the Applicants dated 18 July 1997 that their use of the Land was such as to entitle it to an exemption from land tax as land used for primary production (at the time, under old section 10(1)(p)), and 2. it continues to be used in the same way, 3. so it should continue to be so entitled.
The letter dated 18 July 1997 sent to Mr Giammarco by the Office of State Revenue is reproduced on page 13 of the Applicants' Reply Submissions dated 8 March 2019. This letter: 1. Refers to a property described as Lot 2, Kangaroo Valley Rd, Kangaroo Valley (which I assume for present purposes is identical with the Property), and 2. States that "…It is advised that after reviewing the circumstances outlined in previous correspondence to this office, it is advised that an exemption under section 10(1)p [sic] of the Land Tax Management Act 1956 is to apply to the above mentioned property".
The letter confirms the applicability to the Land of an exemption provided for under old section 10(1)(p). It does not establish that, as the Applicants appear to believe, the then use of the Land is one which confers on the Land in perpetuity an immutable status as satisfying whatever tests must be met in order to qualify for whatever exemption is from time to time allowed under the LTMA in relation to land used for primary production. Rather, the scope and applicability of the letter follow from the terms of the exempting provision to which it applies, and when - as in fact occurred - the legislative provision giving rise to the exemption was repealed and replaced, it followed that the letter necessarily ceased to have any continuing direct relevance in determining the future application to the Land of any exemption for land used in primary production. The factual considerations as to the use of the land which underlay the original issue of the letter may well continue to be relevant, but the letter itself does not.
As is clear from the brief legislative history set out above under the heading Legislative Background, the exemption to which the letter of 18 July 1997 refers: 1. ceased to be applicable to exempt land from taxation under the LTMA with effect from and including the land tax year beginning 1 January 2006; but 2. continued to apply in relation to the land tax year beginning on 1 January 2005 and earlier land tax years.
Several conclusions follow: 1. First, that the tests which the Land would have to satisfy in order to qualify for the primary production exemption from land tax on and from 1 January 2006 were different from those which it had to satisfy before that date; 2. Secondly, the conclusion in the 1997 letter, that the Land satisfied the tests for exemption under old section 10(1)(p), was of no direct relevance in determining whether it satisfied the tests applicable on and from 1 January 2006 under section 10AA; and 3. Thirdly, contrary to the Applicants' view, the legislative change made by the State Revenue Legislation Further Amendment Act 2005 to the regime for exempting land used for primary production was not retrospective in nature; it operated prospectively in and from the land tax year beginning on 1 January 2006 while respecting and preserving the exemptions applicable before that tax year.
That the Respondent continued for some years to treat the Land as exempt land used for primary production is clear from his letter to the Applicants dated 22 November 2017.
Equally clear, however, is that: 1. under section 9 of the TAA the Respondent is authorised to reassess the tax liabilities of a taxpayer in respect of the preceding 5 years: "9 Reassessment (1) The Chief Commissioner may make one or more reassessments of a tax liability of a taxpayer. (2) A reassessment of a tax liability is to be made in accordance with the legal interpretations and assessment practices generally applied by the Chief Commissioner in relation to matters of that kind at the time the tax liability arose except to the extent that any departure from those interpretations and practices is required by a change in the law (whether legislative or non-legislative) made after that time. (3) The Chief Commissioner cannot make a reassessment of a tax liability more than 5 years after the initial assessment of the liability …"; 1. the assessment issued by the Respondent on 28 April 2016 which reversed the primary production exemption allowed in respect of the Land for the 2012, 2013, 2014, 2015 and 2016 land tax years was issued in exercise of the authority conferred on the Respondent under that section; 2. by having regard to the tests set out in section 10AA of the LTMA, which had been in force since its commencement on 7 December 2005 the Respondent acted consistently with the requirements of section 9(2) of the TAA.
The Respondent's acceptance on 9 February 2015 of Mr Giammarco's representation, that the exemption recognised on 18 July 1997 should still determine the application to the Land of a primary production exemption, does not alter this conclusion. This is for two reasons: 1. First, the provisions of section 9 of the TAA are clear, that the Respondents may issue reassessments of taxation liabilities, and 2. Secondly, as explained in the next paragraph, even if the Respondent's decision on 9 February 2015 was either (or both) legally in error or inconsistent with the subsequent 2016 decisions, the Respondent was not thereby prevented, as the Applicants appear to be arguing, from issuing the assessments comprised in the 2016 and 2017 decisions.
It is a well-established principle that officers charged with the administration of revenue statutes must administer them in accordance with their terms, and that they are not required to perpetuate prior errors or inconsistencies of approach in subsequent cases: 1. In BBLT Pty Ltd v Chief Commissioner of the Office of State Revenue [2003] NSWSC 1003 at [111] Gzell J summarised as follows the law concerning the imposition of estoppels or similar restraints based on their previous conduct on officers responsible for the administration of revenue statutes: " … with few exceptions the courts have concluded that estoppel does not lie against a fiscal authority on the basis that the authority cannot be prevented from carrying out the public duties cast upon it by the legislation (Federal Commissioner of Taxation v Wade [1951] HCA 66; (1951) 84 CLR 105, AGC (Investments) Ltd v Federal Commissioner of Taxation 91 ATC 4180, Federal Commissioner of Taxation v Australia & New Zealand Savings Bank Ltd [1994] HCA 58; (1994) 181 CLR 466, Bellinz v Federal Commissioner of Taxation [1998] FCA 615; (1998) 84 FCR 154, Oamington Pty Ltd (Receiver & Manager Appointed) v Commissioner of Land Tax 98 ATC 5051)". and 1. In Bellinz v Federal Commissioner of Taxation [1998] FCA 615 the Federal Court of Australia goes beyond the doctrine of estoppel, to consider whether the departure in a particular case by the Federal Commissioner of Taxation from previous informal practice was unfair or discriminatory in nature. The Court there said, at page 167, that: " …where the Commissioner is charged to administer the law … and one might say bound to do so in accordance with the language used in the statute as passed by Parliament, it is difficult to see how the Commissioner can properly be said to have acted unfairly, even if there is an element of discrimination, where he has acted in accordance with the law itself".
The Respondent was therefore correct when he made the 2016 and 2017 decisions in declining to treat the 1997 letter as determinant of the application to the Land of the exemption provided for in section 10AA of the LTMA.

Unfairness

A second recurrent strand in the Appellants' arguments appears to be that it was unfair, to the point of impugning in some way the 2016 and 2017 decisions, that: 1. the State Revenue Legislation Further Amendment Act 2005 repealed the primary production exemption in old section 10(1)(p) and replaced it with that in section 10AA, but 2. no notification of this change was provided to the Applicants.
It may well have been desirable from the Applicants' perspective that they became aware of the changes made by the State Revenue Legislation Further Amendment Act 2005 sooner than they did, and thus had an early opportunity to reconsider their continuing ownership of the Land. That they did not, however neither: 1. detracts from the Respondent's obligation to apply the law as so varied, nor 2. confers on the Applicants any right to be shielded from its application.
It is legally axiomatic that: 1. The Crown in right of New South Wales and the New South Wales parliament, as a legislative body, may together not only make new laws but also vary existing ones; and 2. Persons subject to the laws of New South Wales are bound by the laws so made from time to time, 3. The Applicants' arguments under this strand, however, are entirely at odds with these axiomatic legal propositions, and must be rejected.

Natural justice

A third strand in the Applicants' arguments is that by reassessing the Land's liability to land tax the Respondent has denied them natural justice.
To the extent that this argument reiterates the unfairness argument discussed above, my rejection of that argument is equally applicable here.
To the extent that it suggests some deficiency in the Respondent's preparedness to receive and consider the Applicant's objections or representations, or his conduct towards them in respect of those objections or representations, I also reject it.
I do so because the Applicants have provided no evidence that the Respondent has failed to receive and consider the Applicants' views, to communicate with them in the way required by law, or to comply with the requirements of the TAA and the Administrative Decisions Review Act 1997 in its dealings with the Applicants concerning the land tax status of the Land.
Moreover, the evidence indicates that the Respondent has, if anything, conducted itself openly and fairly in relation to the Applicants and their claims: 1. The Respondent has provided the Section 58 Documents for purposes of this review. 2. These disclose extensive correspondence between the Applicants and the Respondent concerning the land tax status of the Land, in which the Respondent invites the Applicants to submit information relevant to the exemption of the Land, reminds them to submit land tax returns, proposes plans for the payment by instalments of land tax, provides responses or guidance to the Applicants in relation to their objections or their proposed review application, and provides guidance to the Applicants concerning the suggestion that the Land may be entitled to exemption from land tax on environmental grounds, while the Applicants themselves seek or submit information concerning possible environmental exemptions; 3. The Applicants lodged objections to the 2016 decisions and the 2017 decisions, which were considered by the Respondents and ultimately denied in, respectively, the 2017 denial and the 2018 denial; and 4. The Applicants have applied for and conducted this review, in which the Respondent has participated fully.
I therefore reject the Applicants' arguments that in making the assessments under review the Respondent has denied them natural justice. I acknowledge that the Applicants have found the legislative and administrative processes in their application to the Land to have been at times a distressing, puzzling and overwhelming exercise of state power, and have expressed that view in at times colourful language. None of that, however, is a reason to conclude that they have been either treated in a way which is legally unfair or denied natural justice.

Exemption under section 10AA

Although the Applicants do not appear generally to assert that the Land satisfies the requirements for exemption under section 10AA of the LTMA, there are instances, notably on page 24 of the Applicants' submissions dated 31 January 2019, where the submissions may possibly be read as attempting to do so. This is a further possible strand in their arguments which I address in these reasons.
The relevant submission states as follows: "Primary Production use of our land amounts to 12% as compared to 88% for use as a biodiversity site. This has always been the situation. We have been busy using it for both uses. At the exemption grant in 1997 till now we are engaged at the whole of the land. In 1997 exemption was granted on the basis of clause 10.1(p) which had (i) and (ii). We believe eventually it was due to the land being in a rural zone (ii) rather than the use of primary production which has at all times been very marginal as highlighted in OSR original refusal letter …… The 1997 intention of PP was converted to actual by proposed improvement to water supply, via an easement into adjoin property, but by obstructing the adjoining owner made it impossible and has therefore frustrated the PP not been realised for 12% of the land".
The Applicants, however, have provided no evidence that at any relevant time: 1. any part of the Land has been used for any of the purposes listed in section 10AA(3) of the LTMA, such as to make it "land used for primary production" for purposes of section 10AA; or 2. that part of the Land which is zoned for environmental purposes, has been used for a purpose listed in section 10AA(3) with the commercial purpose or character or profit-making purpose required by section 10AA(2).
That the Applicants may have: 1. contemplated the use of some or all of the Land for purposes of primary production, 2. undertaken investigations and assessments of the Land's suitability for those purposes, and 3. obtained water rights and easements such as to allow water to be brought to the Land for primary production purposes, 4. are not individually or collectively sufficient, in the absence of any evidence as to the actual use of the Land for any of the purposes set out in section 10AA(3), to allow the Land to satisfy the tests for exemption set out in section 10AA.
Equally, that the Applicants may have regularly and consistently undertaken a variety of land management practices in relation to the Land, which (in the words of the Applicants' submissions dated 31 January 2019) are "… congruent and equivalent to routine maintenance of rural land ownership …" does not mean that the Land is "land used for primary production" for purposes of section 10AA. These practices are described in the Applicants' submissions as including "the exclusion of stock, weed control, management of fire risk, management of human disturbance, retention of regrowth and remnant native vegetation, replanting or supplementary planting (where necessary, retention of dead timber, erosion control and stabilisation, retention of rocks and other geological material, control of feral and/or overabundant native herbivores, management of pests - including pigs, foxes and dogs" . None of these practices come within the activities specified in section 10AA(3) of the LTMA, with the consequence that they are not sufficient to ensure that the Land is "land used for primary production" for purposes of section 10AA.
I therefore reject any argument by the Applicants that the Land was at any relevant time for purposes of the assessments under review "land used for primary production" for purposes of section 10AA.

Biobanking agreement exemption

The Applicants claim that the Land is exempt from land tax under new section 10(1)(p). This is a further strand in their arguments.
The reasons why the Applicants say that the Land falls under this exemption are, with respect, less than entirely clear, but appear to have two broad limbs: 1. That since the letter from the Respondents dated 18 July 1997 states "… that an exemption under section 10(1)p [sic] of the Land Tax Management Act 1956 is to apply to …" the Land, that letter is a recognition by the Respondent that the Land satisfies the tests for exemption under new section 10(1)(p); and 2. That because the bulk of the Land: 1. is (and for many years has been) managed by the Applicants on a basis consistent with the environmental management standards applicable to land under a biobanking agreement, 2. is capable of being the subject of a biobanking agreement, 3. is entered on a public register of lands which are available to form the subject of a biobanking agreement, and 4. has registered against it a positive covenant (dealing number AK035700) in favour of Shoalhaven City Council, relating to the management of certain vegetation, 5. the Land should be considered to satisfy the exemption set out in new section 10(1)(p).
I do not accept that the Land or any part of it at any relevant time came within the exemption provided for under new section 10(1)(p), for "land that is the subject of a biobanking agreement under Part 7A of the Threatened Species Conservation Act 1995": 1. By using the present tense - "is the subject of" - this exemption clearly requires for its satisfaction that, at the time at which the applicability of the exemption to Land is to be tested for purposes of assessing the liability of the Land to land tax, a biobanking agreement actually be in place which covers the Land. 2. The Applicants, however, have not provided any evidence that such an agreement is (or at any relevant time was) in place and have thus not discharged the onus imposed on them by section 100(3) of the TAA. 3. This absence of evidence is underlined by the real property searches comprised in the Section 58 Documents. These do not disclose the registration on the title to the Land of a biobanking agreement. 4. Even if, as the Applicants claim: 1. their environmental stewardship of the Land meets the standards required under a biobanking agreement, 2. the Land is (and is publicly held out as being) available to be included in such an agreement, and 3. the Land could usefully and appropriately form the subject of such an agreement, 1. none of that satisfies the statutory test in new section 10(1)(p), that at the relevant time Land "…. is [underlining added] the subject of a biobanking agreement under Part 7A of the Threatened Species Conservation Act 1995". 2. It is clear from the evidence that part at least of the Land is subject to a positive covenant (dealing number AK035700) in favour of Shoalhaven City Council, relating to the management of certain vegetation on that lot. Whatever the effect or purpose of such a covenant may be, it cannot be a biobanking agreement within the meaning of section 127D of the Threatened Species Conservation Act 1995, since: 1. It is an essential element under section 127D(1) of a biobanking agreement that the Minister be a party; but 2. The positive covenant is in favour of Shoalhaven City Council, not the Minister.
I do not accept the Applicants' other proposition (if, as is not entirely clear, that is in fact what their submissions argue), that the Respondents' letter dated 18 July 1997, recognising that the exemption which was then provided for in old section 10(1)(p) of the LTMA applied to the Land, also operates under some form of administrative apostolic succession to confirm that the exemption under new section 10(1)(p) also applies to the Land. The letter speaks to old section 10(1)(p) only. The simple coincidence, that new section 10(1)(p) which was introduced over 9 years after the letter was issued happens to have the same section and paragraph numbers as the exemption to which the letter refers, cannot logically be taken to extend the letter's recognition to new section 10(1)(p). The letter's author could only have been referring to old section 10(1)(p), and it makes no sense to suggest that he intended his assurances to extend to a future legislative provision which deals with an entirely different topic but which, through sheer coincidence, happens to share a section and paragraph number.
I therefore reject any argument that at any relevant time for purposes of the assessments under review the Land was exempt under new section 10(1)(p) of the LTMA.

Conclusion

What follows from all this is that I do not accept that there is any basis to set aside the decisions of the Respondent which are under review, and accordingly I make the following orders.

Orders

Pursuant to section 99(1) of the Taxation Administration Act and section 41 of the Civil and Administrative Tribunal Act 2013, the time for the Applicants to lodge their request to review the Respondent's decisions concerning certain land at 1361 Kangaroo Valley Road, Kangaroo Valley and made on 28 April 2016 and 22 November 2017 is extended to 5:00pm (Sydney time) on 19 October 2018.
Pursuant to section 63(3)(a) of the Administrative Decisions Review Act 1997, I affirm the decisions under review. 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: 01 May 2019

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (15 paragraphs)

Parties

Cases Cited (16)

Cited By (3)