Karimbla Properties v Council of the City of Sydney; Bayside City Council; and North Sydney Council

Land and Environment Court (NSW)|2017-03-31|Before: Sheahan J

78 Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38 Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 Greenville Pty Ltd v Commissioner of Land Tax (1977) 7 ATR 278 Hoy v Coffs Harbour City Council [2016] NSWCA 257 Hutt City Council v Aged-Care Hospitals Ltd [1998] 2 NZLR 137 Informax International Pty Ltd v Clarius Group Ltd [2011] FCA 183; (2011) 192 FCR 210 Leda Manorstead v Chief Commissioner (2010) 79 NSWLR 724; [2010] NSWSC 867 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366 Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9 Meriton Apartments Pty Limited v Council of the City of Sydney (No 3) (2011) 80 NSWLR 541; [2011] NSWLEC 65 Meriton Apartments Pty Limited v Parramatta City Council [2003] NSWLEC 309 Meriton Apartments Pty Ltd v Sydney Water Corporation [2004] NSWLEC 699; (2004) 138 LGERA 383 Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812 Micheal Harold Connor v Smith Hire Service (Casino) Pty Ltd [2017] NSWLEC 7 Minister for Minerals and Energy v Vaughan-Taylor and Anor (1991) 73 LGRA 115 Mitchell v Waugh and Anor (1993) 82 LGERA 44 National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 20 NSWLR 573 Newcastle City Council v Caverstock Group Pty Ltd 163 LGERA 83; [2008] NSWCA 249 Nix and Dunn v Pittwater Council (1994) 84 LGERA 199 N Stephenson Pty Ltd v Roads and Traffic Authority of New South Wales (1994) 83 LGERA 248 NTL Australia Pty Ltd v Minister for Land and Water Conservation (2001) 112 LGERA 403; [2001] NSWLEC 5 Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365 Pancho Properties Pty Ltd v Wingecarribee Shire Council [1999] NSWLEC 245; (1999) 110 LGERA 352 Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council (2013) 211 LGERA 337; [2013] NSWLEC 86 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28: 194 CLR 355 Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 Sandhurst Holdings (Australia) Ltd v Commissioner of State Revenue (Vic) (2009) ATC 20 - 118; [2009] VSCA 167 SH Camden Valley Pty Ltd v Camden Council [2015] NSWLEC 104 Timbarra Protection Coalition Inc v Ross Mining NL [1998] NSWLEC 19; (1998) 99 LGERA 345 Ulan Coal Mines Pty Limited v Mid-Western Regional Council [2013] NSWLEC 1167 Wuudee Australia Pty Ltd v South Sydney City Council (1993) 80 LGERA 1 Wuudee Australia Pty Ltd v South Sydney City Council (Waddell AJ, NSWLEC, 31 October 1994, unreported) Ying v Song [2009] NSWSC 1344 Texts Cited: J D Heydon, "How Far Can Trial Courts and Intermediate Appellate Courts Develop the Law" (2009) 9(1) Oxford University Commonwealth Law Journal 1, 25 Halsbury's Laws of Australia Macquarie Dictionary Category: Principal judgment Parties: Various "Karimbla Properties" Companies (Applicants) Council of the City of Sydney (Respondent) Bayside City Council (Respondent) North Sydney Council (Respondent) Representation: Counsel: Mr C McEwen, SC with Mr S Nash, barrister (Applicants) Mr P Clay, SC with Dr J Smith, barrister (Respondents - Council of the City of Sydney and Bayside City Council) Mr T Hale, SC with Mr T To, barrister (Respondent - North Sydney Council)

Solicitors: General Counsel, Meriton Group (Applicants) Council of the City of Sydney (Respondent - Council of the City of Sydney) Houston Dearn O'Connor (Respondent - Bayside City Council) North Sydney Council (Respondent - North Sydney Council) File Number(s): 2016/245526, 2016/245527, 2016/245528, 2016/245529, 2016/245530, 2016/245531, 2016/245532, 2016/247852, 2016/301331,2016/305876, 2016/305877, 2016/305878

Introduction

This judgment concerns twelve cases brought by ten "Karimbla Properties" companies, seeking to change the "categorisation" for rating purposes, of various "Meriton" development sites in the Sydney metropolitan area.
The various parcels of land have been categorised as "business", and the applicants claim they should be "residential".
In each case, the applicant applied to the relevant Council for the rating category to be changed, effective on a certain date, and Council either refused, or failed to determine, the application.
Mr C McEwen SC and Mr S Nash of counsel appeared for the applicant companies; Mr T Hale SC and Mr T To of counsel appeared for the respondent North Sydney Council; and Mr P Clay SC and Dr J Smith of counsel appeared for the other respondents, the Council of the City of Sydney and Bayside Council. Mr Hale and Mr Clay adopted quite different approaches to the applicants' case.
Success in these appeals would create the need for Councils to make "adjustments" in rates, already paid by Meriton/Karimbla, in amounts of between zero and close to $1M per property.
The applicants seek that adjustment as a refund of any overpayment, plus "statutory interest".
In its opening written submissions (par 3 - with some emphasis added by me), the respondent North Sydney Council listed the "issues thrown up by the appeal", as being "broadly": 3.1 The proper construction of the phrase "dominant use for residential accommodation" in section 516(1)(a) of the [Local Government Act 1993 ("LG Act")], and the correctness of the Court's decision in Meriton Apartments Pty Ltd v. Parramatta City Council [("Parramatta")] [2003] NSWLEC 309. 3.2 Whether the applicant's activities on the Land, comprising (in general sequence) demolition of an existing building, excavation of the land, construction of a new mixed use building comprising, in the main, residential apartments, and commencement of occupation of the apartments, answer the statutory descriptions in section 516 - and if so, at what point in time. 3.3 Whether the Court has jurisdiction to make any order as to adjustment of rates. 3.4 Whether the Court would, in the exercise of its discretion, decline to declare a category (or, if otherwise available, make an order as to adjustment) for period(s) of time when rates are not recoverable because of the Recovery of Imposts Act 1962 (sic - 1963)[("Imposts Act")] or because of the prejudice to the Council's finances and financial management.
The principal common issue at the heart of all twelve cases (subject to the particular facts of each case) is that described in 3.1 above - the proper construction of section 516(1)(a) (in respect of activities involved in construction of a residential flat building), and the correctness of Parramatta, upon which the applicants rely heavily, and which they urge me to adopt, in line with the general principles of judicial comity.
The respondents submit either that, as Mr Clay put it (T30.03.17, p28, L1), Parramatta would not be decided now as it was in 2003, or, as Mr Hale submitted, Pain J's decision was "plainly wrong" (opening subs par 6, closing subs par 18, T29.03.17, p4, LL4 - 5, and T30.03.17, p12, LL34 -35). None of the respondents submit that I should simply distinguish it on the facts.
It is with the correctness and applicability of Parramatta, therefore, that this judgment is primarily concerned.
However, some other issues and sub-issues raised - e.g. the applicability of the Imposts Act, the jurisdiction/power of this Court to order payment or repayment of money, the utility of making certain orders, the construction of the concepts of "vacancy", "dominant use", and "paid" c.f. "payable", and questions of discretion - will also be addressed.
The parties will then be invited to formulate a suite of orders for the Court to make, implementing my findings in this judgment, and acting upon the many agreements reached by them, up to and including the final moments of the hearing.
Those agreements have allowed the Court to adopt a somewhat generic approach to this judgment, and have saved it the need to deal, in great detail, at least at this stage, with any individual sites, and/or with the voluminous specific submissions filed before the hearing.

The Parties, their Evidence, and their Primary Arguments

The applicant "Karimbla" companies sit within the "Meriton" group of companies.
Seven of the twelve claims concern sites within the City of Sydney ("Sydney"), four sites are in the area of the former City of Botany Bay (now "Bayside" City Council area), and the remaining site is within North Sydney Council's area ("North"). As the case unfolded, two of the seven Sydney sites fell to be considered together (see [32] below).
The Sydney and Bayside Councils have taken very similar approaches to the claims against them, and were represented before me by the same counsel, but North has taken a different approach, and was separately represented.
Mr McEwen submitted, primarily (leaving aside "vacant" land), that the applicants had only to establish that the land was approved for a residential project, and that preparatory demolition, earthworks etc. were underway, for the Court to be satisfied that the present (as distinct from an intended), dominant use of it was "for residential accommodation". The draftsperson of the relevant section (516(1)(a)) deliberately distinguished between the words "for" and "as".
The respondents submitted that, at least until construction is complete, and an occupation certificate has been granted for a residential building, the use of the land remains for "commercial land development".
Mr Hale goes further, and would require that a substantial proportion of the residential units be actually occupied before the use becomes "residential". How can the use be "residential" when there is no physical "accommodation" available on the land? (closing subs par 10). In effect, he argues that the "for" in s 516(1)(a) should be read as "as".
Mr Hale also argues that, as these proceedings are "administrative" in character, the Court cannot exercise judicial power, such as to make orders for any rate refund. The Court can only declare a change of category, and the date when it takes/took effect.
Mr Hale made clear (e.g. T28.03.17, p14, LL5 - 40, and 29.03.17, p7, L12)) that, although North will comply with any decision of the Court, nothing in Chapter 15 of the LG Act, especially s 527, gives this Court any jurisdiction to require it to refund any amount of rates paid, in the event of Karimbla succeeding in its claim for re-categorisation. He says that "adjustment" does not embrace repayment (closing subs pars 53, 61 - 65, 69 - 74, and T30.03.17, pp17 - 21). Any company prima facie entitled to some refund of rates paid would have to bring separate restitution proceedings, in the Supreme Court, and North reserves its position in respect of defences which might be available to it in such proceedings.
The applicants say, on the other hand, that any order for payment back of rates paid flows from the rating statute, and is not a matter of restitution.
Despite the perceived need for all parties to place before the Court a huge volume of documentary material, the hearing was greatly facilitated by a series of agreements reached by them, including during the hearing: 1. on statements of facts, and on relevant dates, in each case; 2. on objections to the contents of the many affidavits sworn across the twelve cases by one Walter Gordon (Exhibit A18); 3. on the tendering of 15 lever-arch folders of site information (Exhibits A1 - A15); and 4. on various other matters, including that the claims have been brought "in time".
Indeed, the final schedules of agreed facts and issues were tendered at the very end of the hearing (T31.03.17, p16, LL45 - 49) - Exhibits S2 and B2.
Mr Gordon, in several of his affidavits (see, e.g., his affidavit of 15 February 2017, in Exhibit A6, at tab 51, fol 826) - identified himself in these terms: 1 I am employed by Meriton Property Services Pty Limited as the Head of Planning and Development for the Meriton Group of Companies. I have explained what is meant by the 'Meriton Group of Companies' below. ... 6 I have been employed by Meriton for 12 years and as Head of Planning and Development for ten years. 7 In my role I have the day to day management of all town planning-related matters for every site which Meriton acquires and develops, including preparing all the development applications, planning proposals and voluntary planning agreements for all such sites.
Mr Gordon also relevantly deposed: 2 Meriton Property Services Pty Limited, [various Karimbla Properties Pty Limited companies], and Karimbla Constructions Services (NSW) Pty Limited are all entities within the Meriton Group of Companies (Meriton). 3 Meriton is a large residential apartment development company, and was established in 1963. 4 When Meriton wishes to acquire and develop a new site, the site will be purchased under a different Karimbla entity name.
In joint submissions on behalf of Sydney and Bayside, their counsel says of Meriton/Karimbla (Exhibit A6, tab 65, par 1): The Meriton Group is a substantial land developer in New South Wales, including in the City of Sydney and Bayside local government areas. In respect of each development it undertakes it uses a special purpose vehicle, a separate corporate entity, to undertake that particular development. The vehicle is usually entitled Karimbla Properties with a number in parentheses thereafter.
Mr McEwen described Meriton's mode of operations in these terms (T29.03.17, p35, LL6 - 14): ... In each case what can be said is Meriton moves in, buys the land, the buildings are either vacant upon Meriton taking possession or they become vacant in a period after Meriton takes possession but, and the affidavits all speak in the same terms by the same author, no intention of Meriton to re lease them. Rather to make them vacant for the purpose of enabling Meriton to get on with the job of demolition of them for the purposes of residential development for which is either obtained complying development certificates for that demolition or a development consent which authorises the demolition which thereafter follows.
Affidavits were also provided to the Court from Suzanne Flynn, Revenue Manager at Sydney, and David Grima, Coordinator of Revenue at Bayside.
No witness/deponent was required for cross-examination.

North Sydney

Karimbla Properties (No. 7) Pty Limited challenges the rating of 225 Miller Street, North Sydney (2016/301331).

Sydney

Karimbla Properties (No. 24) Pty Limited is the applicant in two cases against Sydney, dealt with together. They concern the properties: (a) 56 - 60 O'Dea Avenue, Waterloo (matter no. 2016/245526), and (b) 22 - 24 Archibald Avenue, Waterloo (2016/245527)
Karimbla Properties (No. 31) Pty Limited challenges the rating of 94 - 102 Dalmeny Avenue, Rosebery (2016/245528).
Karimbla Properties (No. 40) Pty Limited challenges the rating of 230 - 234 Sussex Street, Sydney (2016/305876).
Karimbla Properties (No. 42) Pty Limited challenges the rating of 84 - 92 Epsom Road, Zetland (2016/245529).
Karimbla Properties (No. 49) Pty Limited also challenges the rating regarding two properties, dealt with separately: (i) 25 - 55 Rothschild Avenue, Rosebery (2016/305877), and (ii) 5 - 13 Rosebery Avenue, Rosebery (2016/305878).

Bayside

Karimbla Properties (No. 34) Pty Limited challenges the rating of 19 - 33 Kent Road, Mascot (2016/245531).
Karimbla Properties (No. 36) Pty Limited challenges the rating of 200 Coward Street, Mascot (2016/245532).
Karimbla Properties (No. 39) Pty Limited challenges the rating of 130 - 150 Bunnerong Road, Pagewood (2016/245530).
Karimbla Properties (No. 46) Pty Limited challenges the rating of 1 - 5 Kent Road, Mascot (2016/247852).

The Relevant Local Government Legislation

Several sections of the LG Act include the word "person". That term is not defined in the LG Act, but the Dictionary in that Act adopts the definition in the Interpretation Act 1987, namely: person includes an individual, a corporation and a body corporate or politic.
Chapter 15 of the LG Act deals with Council finances.
Councils operate on a yearly financial cycle, in which they settle upon an operational plan, arrive at a budget, categorise the lands from which rates are to be raised, make the rate(s), and then levy the landowners. As counsel observed at the hearing, all these steps are taken in quick succession.
The most relevant sections of the LG Act for present purposes are contained in Part 3 of Chapter 15 ("Ordinary rates" - ss 514 to 531). (Some emphasis is added to some of the sections in Chapter 15, quoted below.)
Section 514 provides: Categorisation of land for purposes of ordinary rates Before making an ordinary rate, the council must have declared each parcel of rateable land in its area to be within one or other of the following categories: • farmland • residential • mining • business. Note. Land falls within the "business" category if it cannot be categorised as farmland, residential or mining. The main land uses that will fall within the "business" category are commercial and industrial.
Section 516 provides: Categorisation as residential (1) Land is to be categorised as residential if it is a parcel of rateable land valued as one assessment and: (a) its dominant use is for residential accommodation (otherwise than as a hotel, motel, guest-house, backpacker hostel or nursing home or any other form of residential accommodation (not being a boarding house or a lodging house) prescribed by the regulations), or (b) in the case of vacant land, it is zoned or otherwise designated for use under an environmental planning instrument (with or without development consent) for residential purposes, or (c) it is rural residential land. ... (2) The regulations may prescribe circumstances in which land is or is not to be categorised as residential. (In argument, much attention was paid to the use of the words "dominant", "for" and "as" in s 516(1)(a), and to the concept of "vacant" in subsection (1)(b).)
Section 518 provides: Categorisation as business Land is to be categorised as business if it cannot be categorised as farmland, residential or mining.
Section 520 provides: Notice of declaration of category (1) A council must give notice to each rateable person of the category declared for each parcel of land for which the person is rateable. (2) The notice must be in the approved form and must: (a) state that the person has the right to apply to the council for a review of the declaration that the land is within the category stated in the notice, and (b) state that the person has the right to appeal to the Land and Environment Court if dissatisfied with the council's review, and (c) refer to sections 525 and 526.
Section 521 provides: When does the declaration of a category take effect? A declaration that a parcel of land is within a particular category takes effect from the date specified for the purpose in the declaration.
Section 522 provides: When does the declaration of a category cease? A declaration that a parcel of land is within a particular category ceases when a subsequent declaration concerning the land takes effect.
Section 523 provides: When are the declarations of categories reviewed? (1) A council need not annually review a declaration that a parcel of land is within a particular category, but may review a declaration: (a) as part of a general review of the categorisation of all or a number of parcels of land, or (b) because it has reason to believe that a parcel of land should be differently categorised. (2) A council must review a declaration if required to do so in accordance with section 525 by a person who is rateable in respect of a parcel of land to which the declaration applies.
Section 524 provides: Notice of change of category A rateable person (or the person's agent) must notify the council within 30 days after the person's rateable land changes from one category to another.
Section 525 provides: Application for change of category (1) A rateable person (or the person's agent) may apply to the council at any time: (a) for a review of a declaration that the person's rateable land is within a particular category for the purposes of section 514, or (b) to have the person's rateable land declared to be within a particular category for the purposes of that section. (2) An application must be in the approved form, must include a description of the land concerned and must nominate the category the applicant considers the land should be within. (3) The council must declare the land to be within the category nominated in the application unless it has reasonable grounds for believing that the land is not within that category. (4) If the council has reasonable grounds for believing that the land is not within the nominated category, it may notify the applicant of any further information it requires in order to be satisfied that the land is within that category. After considering any such information, the council must declare the category for the land. (5) The council must notify the applicant of its decision. The council must include the reasons for its decision if it declares that the land is not within the category nominated in the application. (6) If the council has not notified the applicant of its decision within 40 days after the application is made to it, the council is taken, at the end of the 40-day period, to have declared the land to be within its existing category.
Section 526 provides: Appeal against declaration of category (1) A rateable person who is dissatisfied with: (a) the date on which a declaration is specified, under section 521, to take effect, or (b) a declaration of a council under section 525, may appeal to the Land and Environment Court. (2) An appeal must be made within 30 days after the declaration is made. (3) The Court, on an appeal, may declare the date on which a declaration is to take effect or the category for the land, or both, as the case requires.
Section 527 provides: Adjustment of rates following change in category A council must make an appropriate adjustment of rates paid or payable by a rateable person following a change in category of land.
Clause 122 of the Local Government (General) Regulation 2005 provides: Land used for retirement village, serviced apartments or time-shares to be categorised as residential (section 516 (2)) If the dominant use of land is for a retirement village, serviced apartments or a time-share scheme, the land is to be categorised as residential for rating purposes.
Part 4 of Chapter 15 deals with important technical details of the "making of rates and charges". Each is made "for a specified year, being the year in which" it is made (s 533), and by resolution of Council (s 535).
Part 5 deals with the "levying of rates and charges". They are levied by service of a notice (s 546). Section 546(3) relevantly provides: A notice that is required to effect an adjustment of rates or charges may be served in the year for which the rate or charge is made or a subsequent year.
Part 6 deals with "what land is rateable?". Section 554 provides that "all land in an area is rateable unless" exempt (see ss 555 - 559 for exemptions).
Part 7 deals with "payment of rates and charges", being generally by the "owner for the time being" of the rated land (s 560), and by "a single instalment or by quarterly instalments" (s 532). A "person" levied may appeal to this Court in certain circumstances, including on the ground (s 574(2)) of wrong categorisation under Part 3, and any appeal (s 574(3)) "must be made within 30 days after service of the notice".
Part 8 includes ss 593 and 594, which relevantly use both terms in dispute in the present case, namely "adjust" and "refund". They provide: 593 Paid rates to be refunded The council must refund to a rateable person any amount of rates paid by the person which exceeds the amount of the rates remaining after part of the rates is postponed. 594 Adjustment of rates On a redetermination of the attributable part of the land value of land, a council must adjust amounts payable for rates or to be postponed as appropriate. Any amounts paid in excess are to be refunded and amounts short-paid are recoverable as arrears of rates.
I note that Part 8 also includes (in the Division dealing with "Concessions for pensioners") ss 577 and 578, which give Councils the power to make orders to "avoid hardship" (s 577). Section 578(2) provides, relevantly "in terms", for rates etc. to be refunded, "as the Council thinks fit".
Some reference was also made, in argument, to ss 511 and 511A (in Part 2 of Chapter 15), in the context of the limited powers of Council to "catch up" on any "shortfall in general income". The circumstances are very strictly defined, and the scope of the applications provided for is strictly limited.
Chapter 17 of the LG Act deals with "Enforcement". In Division 1 "Legal proceedings" (within Part 1 "General"), ss 674 and 676 may be relevant (emphasis mine): 674 Remedy or restraint of breaches of this Act - other persons (1) Any person may bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of this Act. (2) The proceedings may be brought by a person on the person's own behalf or on behalf of the person and on behalf of other persons (with their consent), or a body corporate or unincorporated (with the consent of its committee or other controlling or governing body), having like or common interests in those proceedings. (3) Any person on whose behalf proceedings are brought is entitled to contribute to or provide for the payment of the legal costs and expenses incurred by the person bringing the proceedings. ... 676 Functions of the Land and Environment Court (1) If the Land and Environment Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. (2) If a breach of this Act would not have been committed but for the failure to obtain an approval under Part 1 of Chapter 7, the Court on application being made by the defendant, may: (a) adjourn the proceedings to enable an application to be made under Part 1 of Chapter 7 to obtain that approval, and (b) in its discretion, by interlocutory order, restrain the continuance of the commission of the breach while the proceedings are adjourned. (3) The functions of the Court under this section are in addition to and not in derogation of any other functions of the Court.

The Recovery of Imposts Act 1963

One issue for the Court is whether or not the Imposts Act applies to the present claims.
For completeness, I will now set out the whole of s 1A, and much of s 2 of the Act: 1A Definitions In this Act: invalidity of taxation legislation includes invalidity of a portion of the legislation or of an application of the legislation. pay a tax includes recover the tax by legal proceedings. proceedings includes proceedings for an order in the nature of prohibition, certiorari or mandamus or for a declaration or injunction or for any other relief. tax includes a fee, charge or other impost. taxation legislation means: (a) an Act imposing or relating to a tax, or (b) a provision of such an Act, or (c) a regulation under such an Act, or (d) a provision of such a regulation. 2 Limitation on time for the bringing of proceedings to recover taxes (1) No proceedings shall be brought to recover from the Crown or the Government or the State of New South Wales or any Minister of the Crown, or from any corporation, officer or person or out of any fund to whom or which it was paid, the amount or any part of the amount paid by way of tax or purported tax and recoverable on restitutionary grounds (including but not limited to mistake of law or fact): (a) in the case of a payment made before the commencement of this Act, after the expiration of the time within which such proceedings but for the enactment of this Act might have been brought or the expiration of twelve months after the date of the commencement of this Act, whichever period first expires, or (b) in the case of a payment made subsequent to the commencement of this Act, after the expiration of twelve months after the date of payment. (2) Subsection (1) does not apply to any proceedings brought pursuant to any specific provisions of any Act: (a) providing for the mode of challenging the validity or for the recovery of the whole or any part of any tax actually paid, and (b) specifying a different period within which such proceedings must be brought. (3) Without affecting the generality of this section, and for the avoidance of doubt, it is declared that this section applies to proceedings for the recovery of money (paid by way of tax or purported tax) on the ground of, or on grounds that include, the invalidity of taxation legislation. ...
Regard must also be had to ss 5 and 7: 5 Ending of right of recovery If because of this Act money paid by way of tax or purported tax ceases to be or is not recoverable, the right to recover the money is extinguished. ... 7 Application (1) This Act applies to money paid whether voluntarily or under compulsion, and applies whether or not the payment was made under protest, and applies whether or not the payment was made under the authority or purported authority of any Act. (2) This Act has effect despite the provisions of any other Act. ...

The Court Act

Section 19(d) of the Land and Environment Court Act 1979 ("the Court Act") confers on the Court Class 3 jurisdiction in "appeals and applications" under s 526 of the LG Act.
Other relevant sections of the Court Act are ss 16, 22 and 39: 16 Jurisdiction of the Court generally (1) The Court shall have the jurisdiction vested in it by or under this or any other Act. (1A) The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act. ... ... 22 Determination of matter completely and finally The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided. ... 39 Powers of Court on appeals (1) In this section, appeal means an appeal, objection, reference or other matter which may be disposed of by the Court in proceedings in Class 1, 2 or 3 of its jurisdiction. (2) In addition to any other functions and discretions that the Court has apart from this subsection, the Court shall, for the purposes of hearing and disposing of an appeal, have all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal. (3) An appeal in respect of such a decision shall be by way of rehearing, and fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision may be given on the appeal. (4) In making its decision in respect of an appeal, the Court shall have regard to this or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest. (5) The decision of the Court upon an appeal shall, for the purposes of this or any other Act or instrument, be deemed, where appropriate, to be the final decision of the person or body whose decision is the subject of the appeal and shall be given effect to accordingly. ... (7) The functions of the Court under this section are in addition to and not in derogation from any other functions of the Court. ...
Any proceedings under s 674 of the LG Act ([64] above) are brought in Class 4, pursuant to s 20(1)(d) of the Court Act.

Introduction

Parramatta was concerned with the operation of s 516 of the LG Act ([46] above).
The interpretation/construction of any such provision must be guided by the principles established over time by decisions which Bathurst CJ conveniently summarised as follows, in Hoy v Coffs Harbour City Council [2016] NSWCA 257, at [52]: As was stated in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27, the task of statutory construction must begin with a consideration of the text itself, although the meaning of the text may require consideration of the context, which includes the general purposes and policy of the provision in question: at [47]; see also Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39]. Context and purpose are important as the task of the Court is to give the words the meaning the legislature is taken to have intended them to bear. Such purposes can be inferred from the statute itself and, where appropriate, by reference to extrinsic material. However, in making use of such extrinsic material, it must be remembered that such material can only be used as an aid to statutory construction, not for the purpose of identifying the subjective purpose or intention of the legislature: Certain Lloyd's Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [23]-[26]; Project Blue Sky v Australian Broadcasting Authority [1988] (sic - [1998]) HCA 28: 194 CLR 355 at [69]-[71], [78].
Questions of "use" arise not only in planning and rating contexts, and many of the cases relied upon by the respondents to steer the Court away from Parramatta were decided in the Land Tax or Aboriginal Land Rights contexts.
As the learned Chief Judge of this Court has warned: "Care needs to be taken in applying dicta in cases dealing with what constitutes a use of land under other statutory provisions ..." (Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council ("Peabody") (2013) 211 LGERA 337; [2013] NSWLEC 86, at [88]).
In the NSW Court of Appeal case of Ferella v Chief Commissioner of State Revenue ("Ferella") [2014] NSWCA 378, White J (as His Honour then was) quoted with approval the following statement by Helsham ChJ in Eq, in Greenville Pty Ltd v Commissioner of Land Tax (1977) 7 ATR 278 at 280: Whether land is being used for primary production within the meaning of the definition must be decided by an objective test - the inquiry is an inquiry into actual land use; it is not to be tested by the intention of the owner ...
Parramatta is clearly on point for the present cases, as the same legal issues were involved, and the arguments raised by Meriton and the Parramatta Council mirror those raised before me.
Whether or not I should follow Pain J's decision is a question of "judicial comity", as to which I note that Pepper J said, in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38, at [278] - [284]: PLAINLY WRONG 278 Neither the dictum in [Timbarra Protection Coalition Inc v Ross Mining NL ("Timbarra") [1998] NSWLEC 19; (1998) 99 LGERA 345] nor the finding in [Parks and Playgrounds Movement Inc v Newcastle City Council ("Parks and Playgrounds") [2010] NSWLEC 231; (2010) 179 LGERA 346] is binding on me. It was urged upon me by Fullerton that, as a matter of judicial comity, I should follow Parks and Playgrounds unless I was of the opinion that it was plainly wrong (Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492; Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [134]-[135] and Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 at [90]). By contrast, it was urged upon me by Dart and the Department that the obiter dictum in Timbarra was highly persuasive and carried significant weight and therefore should be applied. 279 It has long been the case that the weight accorded to obiter dicta will vary depending on the circumstances in which the remarks are made. Considered dicta of an appellate court, although not strictly binding on courts of a lower position within the judicial hierarchy, must be afforded considerable weight and should only be departed from with caution (Ying v Song [2009] NSWSC 1344 at [19]-[21] per Ward J). 280 In Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 the Court of Appeal considered the meaning of the phrase "plainly wrong" (at [294]-[295]): 294 The phrases "plainly wrong" or "clearly wrong" can be understood to focus on at least one or more of the following attributes of a ruling: (a) the fact of error is immediately (in the sense mentioned in [283] above) apparent from reading the relevant judgment; (b) the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred (cf Chamberlain and Clutha), and (c) the nature of the error that can be demonstrated with a degree of clarity by the application of correct legal analysis. 295 In our view, the first possibility is liable to be highly subjective and should not be required, where the other two possibilities are satisfied. The existence of (b) and (c) is a precondition to the exercise of the power to depart from earlier authority. 281 Admittedly this statement was made in the context of an intermediate appellate court departing from its own decisions in relation to a matter of common law, but I nevertheless do not presently consider this to be a material point of distinction. In any event, the preponderance of authorities emphasise that the test will only be satisfied where it appears that the dispositive adjudication of the controversy has, in some way, miscarried (Informax International Pty Ltd v Clarius Group Ltd [2011] FCA 183; (2011) 192 FCR 210 at [54] per Perram J). Thus in BHP Billiton Iron Ore Pty Ltd v National Competition Council Greenwood J stated ([2007] FCAFC 157; (2007) 162 FCR 234 at [83], quoted in Informax at [54]. And see J D Heydon, "How Far Can Trial Courts and Intermediate Appellate Courts Develop the Law" (2009) 9(1) Oxford University Commonwealth Law Journal 1, 25): 83 The circumstances in which a judge in the exercise of the Court's original jurisdiction might find a decision of a single judge of the Court to be 'plainly wrong' should be approached with real and deliberative caution and would generally involve that class of case where for one reason or another there is transparent error such as the consideration of an incorrect statutory instrument in the resolution of the controversy; consideration of a provision of a statute in a form not enacted at the relevant date of the events or a failure to consider a provision of an Act relevant to the disposition of the cause, thus causing the analysis to fall into error; a failure to apply having regard to the issues raised by the controversy, a binding decision of a Full Court of this Court or the High Court; a failure to apply a decision of a Full Court of this Court, an intermediate Court of Appeal of another jurisdiction or an authority of the High Court expressing a clear persuasive emphasis of opinion in favour of a particular conclusion (particularly concerning legislation of the Commonwealth Parliament); or some other circumstance that has caused a dispositive adjudication of the controversy to miscarry. 282 According to Perram J in Informax, "'plainly wrong' means more than mere, or even strong disagreement with, the decision in question - it requires an actual conclusion that the reasoning process has miscarried" (at [56]). 283 Although neither BHP Billiton nor Informax concerned the proper interpretation of State legislation, in my opinion, they are nevertheless apposite and provide useful guidance as to the application of the 'plainly wrong' test in this instance. 284 The difficulty in the present case is that Biscoe J's pronouncement in Parks and Playgrounds, and his concomitant assumption in [Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365], that s 112 contains a jurisdictional fact, does not, with respect, disclose the reasoning process dispositive to the controversy. Undoubtedly this is because, in each case, there was no controversy on this point. Put another way, I am unable to tell if the decisions are 'plainly wrong', or conversely, if they are 'not plainly wrong'.
Her Honour referred to "Rivers SOS", in which Preston ChJ relevantly said (at [90]): Judicial comity usually dictates that a judge of first instance should follow the decision of another judge of first instance unless convinced that it is wrong: see, for example, Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812 at 820; Pancho Properties Pty Ltd v Wingecarribee Shire Council [1999] NSWLEC 245; (1999) 110 LGERA 352 at [128]-[129]; Meriton Apartments Pty Ltd v Sydney Water Corporation [2004] NSWLEC 699; (2004) 138 LGERA 383 at [29]; and Cracknell and Lonergan Pty Ltd v Council of the City of Sydney [2007] NSWLEC 392; (2007) 155 LGERA 291 at [57]. However, this does not apply where the decision is obiter dictum. Obiter dictum need not be followed by another judge at first instance even for reasons of judicial comity.
In the present debate it is Pain J's ratio decidendi in Parramatta, rather than any obiter dicta, which has to be considered.

Parramatta in detail

Pain J was considering the following questions ([8]): 1. Should the land in both appeals be categorised as residential under s 516(1)(a) of the LG Act during the period of building construction? 2. What is the appropriate date from which the Court's declaration that the land is residential (if made) should take effect under s 526(3) of the LG Act? 3. Should the land in the second appeal be categorised as residential under s 516(1)(b) of the LG Act for the period it was vacant from 1 July 2002 to 31 March 2003?
The key passages in Her Honour's reasoning were, and remain ([18] - [28], [34], and [40] - [45]): Finding on question 1 18. What does "its dominant use is for residential accommodation" mean in s 516(1)(a)? There is no guidance provided in the LG Act as to the interpretation of this phrase. Nor is there any definition of "use" in the LG Act's dictionary. I have not been referred to any cases in the ratings context precisely dealing with the issue before me. Meriton has relied on a number of cases dealing with planning law to draw on legal approaches which can inform the law applicable this case. I do not agree with the Council that such planning cases can have no relevance to the statutory context concerning rating of land before me. Consideration of the use of land in a case such as Council of the City of Parramatta v Brickworks Limited [("Brickworks")] (1972) 128 CLR 1, which considered existing use rights, can assist in the interpretation of statutory terms such as "use". Care must obviously be exercised where a decision is based on a particular statutory framework which does not apply here. 19. A useful starting point, which supports Meriton's case, is Council of the City of Newcastle v Royal Newcastle Hospital [("Royal Newcastle Hospital") (1957) 96 CLR 493] which concerned whether or not unimproved, meaning not built upon, grounds of the hospital were "used or occupied by the hospital … for the purposes thereof" under s 132(1)(d) of the Local Government Act 1919. The issue was relevant to whether that land was exempt from rates. At 515 Taylor J stated: The uses to which property of any description may be put are manifold and what will constitute "use" will depend to a great extent upon the purpose for which it has been acquired or created. Land, it may be said, is no exception and s. 132 itself shows plainly enough that the "use" of land will vary with the purpose for which it has been acquired and to which it has been devoted … His Honour continued: But where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient, in my opinion, if it be shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land. These statements were accepted by Gibbs J (Barwick CJ, Menzies and Owen JJ agreeing) in Brickworks at 22. 20. In Brickworks certain land was being used as a brickworks and quarry. Further land adjoining the brickworks and quarry had been purchased. The issue was whether the further land was the subject of existing use rights when it had not all been physically used for quarrying or brickworks. It was held at 21 - 22 that: It is not enough to bring cl. 32 into operation that land has been acquired with the intention of using it for a particular purpose in the future. On the other hand, it is not necessary, to constitute a present use of land, that there should be a physical use of all of it, or indeed of any of it. … if the whole of the land in question was acquired for and devoted to the purpose of quarrying and brick-making, the whole may be held to have been used for that purpose although only part of it was physically used. 21. In those cases part of the whole site was being used for the relevant physical purpose at the time the Court was considering vacant land within the site to determine its use, unlike here. I nevertheless agree that they support Meriton's contention that it is not necessary to have a final building ready for occupation to conclude that land is used for the purposes of residential accommodation. 22. I accept Meriton's reasoning that use of land must be for a purpose and that the erection of a building is the means in this case by which the land is made to serve that purpose (see par 13). While intention to use vacant land is not sufficient, as was conceded by Meriton, the purpose of the use of land is manifested by the commencement of building construction the use of which building is for the purpose of residential accommodation. Whose purpose is relevant? 23. I consider that the physical purpose for which the land is used, as set out at par 19 - 22, must be determinative for rating purposes rather than another purpose of the owner/occupier in using the land, in this case, undertaking the business activity of property development. I do not therefore accept the submission of the Council that it is the owner's purpose which defines for rating categorisation the purpose of the use of the land. The New Zealand decision of [Hutt City Council v Aged-Care Hospitals Ltd [1998] 2 NZLR 137] relied on by the Council concerns a different statutory context and I do not find it persuasive. 24. I agree with Meriton that the position argued by the Council would lead to anomalous results. As will become clear from my answer to question 3 concerning the second appeal, I consider Meriton's land should be categorised as residential when vacant. If the Council is correct, during the building process, from the commencement of building construction, at which point the land ceases to be vacant land under s 516(1)(b), until the completion of the building and issue of an occupation certificate authorising use and occupation of the building for residential accommodation, the land could not be categorised as residential. As the land falls within neither s 516(1)(b) nor (a) for that period, the land would be categorised as "business" pursuant to s 518 on the Council's case. It would then revert to residential when the occupation certificate issued, or was actually occupied as residential accommodation depending on the basis on which the Council's argument was accepted. 25. If the intention of the owner of premises is the relevant purpose then, for example, any residential property which is rented out may be considered as "business" for rating purposes. If the owner then moved in the property would revert to a residential category. Such a system would be extremely cumbersome for local councils and property owners to administer in my view. Is the different drafting in s 516(1)(a) and (b) relevant? 26. Is there any useful distinction between "use is for residential accommodation" in s 516(1)(a) and "use … for residential purposes" in s 516(1)(b)? 27. The Council argued it is necessary to look at the actual and present use of the property under s 516(1)(a), not the planning use as Meriton's arguments were characterised. This is contrasted, according to the Council, with s 516(1)(b) which focuses on future use and therefore does use the planning terminology of "for residential purposes". I agree with the Council that s 516(1)(a) is concerned with present use. For reasons I have given above I do not consider I am applying a "planning" approach to the interpretation of s 516(1)(a) so that I do not find the distinction the Council seeks to draw between s 516(1)(a) and (b) to be of assistance. 28. Accordingly, the land in both appeals should be categorised as residential under s 516(1)(a) during the period of building construction. Question 2 What is the appropriate date from which the Court's declaration that the land is residential (if made) should take effect under s 526(3)? ... Finding on question 2 34. Section 526(3) does not fetter the Court's discretion in any way. It states: the Court, on an appeal, may declare the date on which a declaration is to take effect or the category for the land, or both, as the case requires . Section 525 provides that a rateable person can apply to the Council at any time for a review. The fact that an application can be made at any time and that there is a 30 day limit for an appeal to be lodged under s 526(2) should not be interpreted as limiting the period of a declaration made by the Court to the date of the application for review made to the Council. Nothing in the legislation suggests such a limitation should be applied. How the Court's discretion is exercised in making any declaration sought will depend on the circumstances of each case. If the circumstances warrant a change in the rating category I consider it would generally be appropriate to make such a change from the time sought in the absence of any "disentitling" conduct by an applicant. It is not necessary to consider the issue of unjust enrichment raised by Meriton's submissions. In this case there is no reason why the Court's discretion should not be exercised to make a declaration commencing from 1 July 2002. ... Finding on question 3 40. Do the words in s 516(1)(b) mean that if an environmental planning instrument allows development of any kind, including residential, subject to obtaining development consent the section is satisfied? I agree with Meriton's submissions and the reasoning in [Wuudee Australia Pty Ltd v South Sydney City Council (Waddell AJ, NSWLEC, 31 October 1994, unreported) ("Wuudee No 2")] that they do. Wuudee No 2 concerned land zoned Residential 2(f) under an [Local Environmental Plan ("LEP")] whereby development could be carried out without development consent for the purpose of "dwelling-houses except in conservation areas". Development was also permissible with consent for a variety of other purposes including boarding houses, residential flat buildings, car repair stations, group homes, hotels, clubs, and commercial premises. 41. If it is necessary to go beyond the actual words in the section as the Council urged me to do, in the City Edge zone in this case development consent is required for dwelling houses, as for all other development except home activities. The objectives of the zone include: (b) to encourage an increase in the permanent residential population through new residential development or the conversion of existing buildings and to ensure the maintenance of a range of housing choice Given the general wording in s 516(1)(b) referring to zoning for residential purposes in an environmental planning instrument, it would appear this is satisfied by the City Edge zone. 42. The Council urged on the Court the approach of Bignold J in Wuudee Australia Pty Ltd v South Sydney City Council [("Wuudee No 1")] (1993) 80 LGERA 1 ... I note that that case was based on the previous rating provisions under the Local Government Act 1919 as amended by the Local Government (Rating) Amendment Act 1977. That case was distinguished by Meriton for that reason, because the statutory provisions were materially different to those before me. While the statutory provisions addressed were different, I consider the general approach of Bignold J supports Meriton's case if it is necessary to go beyond the words of s 516(1)(b). In his reasoning Bignold J noted that "there is no standardised content to conventional zones and zoning provisions may vary considerably". Bignold J held that the definition in question was principally concerned to identify the permissible uses to which the relevant land may be put. Furthermore, "the real inquiry is directed to the uses to which the subject land may be put as it is not only permissible, but necessary, to examine all of the provisions of the South Sydney Local Environmental Plan No 101 to ascertain what those relevant uses are" . His Honour went on to consider the objectives of the zone. He ultimately concluded that the land fell within "a business, commercial or industrial zone" under the LEP because of its potential to accommodate significant business, commercial or industrial uses although it also had potential to accommodate significant residential uses. 43. In this case I must consider the application of the words "zoned or otherwise designated for use under an environmental planning instrument … for residential purposes". The terms of the LEP, particularly the objectives, suggests that this provision is satisfied by the facts of this case. As Bignold J held, there is no application of standard drafting in environmental planning instruments and the range of zones which permit residential purposes is potentially very wide, including the City Edge zone in this case. 44. I consider s 516(1)(b) applies so that the vacant land is residential. It is not therefore necessary that I consider s 519 as s 516 applies. 45. Accordingly the vacant land in the second appeal is categorised as residential under s 516(1)(b) from 1 July 2002 to 31 March 2003. In its primary submission Meriton proceeded on the basis that the land was vacant from 1 July 2002 to 31 March 2003 including the period of excavation from December 2000 to 31 March 2003. It is clearly arguable, as Meriton put in the alternative, that the construction of the building commences with excavation, that is, from December 2002. The Council also argued that excavation meant that there was a change from vacant land as this was the commencement of building. Given my finding in question 1, the excavated land would be categorised as residential from December 2002 on the same basis as I found in question 1 in any event.

Parramatta reviewed in other courts

The respondents submit that these principles from Parramatta have been overtaken, or at least called into doubt, by two subsequent NSW Court of Appeal decisions - Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue ("Leda CA") [2011] NSWCA 366 (dismissing an appeal from the judgment of Gzell J at first instance: Leda Manorstead v Chief Commissioner ("Leda") (2010) 79 NSWLR 724; [2010] NSWSC 867), and Chief Commissioner of State Revenue v Metricon Qld Pty Ltd ("Metricon") [2017] NSWCA 11.
I reject those submissions, but will now consider those three cases (and some others).
As the applicants argue that the authorities reinforce Parramatta, and the respondents argue the opposite, it is necessary to quote at regrettable length from some of the relevant judgments.
Leda (at first instance) was a land tax case, and Gzell J noted (at [27]): The question whether land is exempt from tax will depend not only upon the particular facts of the case, but also upon the specific wording of the exemption where even subtle changes may spell the difference between exemption and non-exemption.
His Honour then said (at [55] - [60]): 55 In [Parramatta], Meriton claimed that land categorised as business for rating purposes should be changed to a residential categorisation. The [LG Act], s 516(1) provided that land was to be categorised as residential if it was a parcel of rateable land valued as one assessment and its dominant use was for residential accommodation. 56 There were two appeals from the council's refusal to change the rating category. 57 In the first appeal, development consent had been received for the erection of two residential towers above basement parking. The relevant period was 1 July 2002 to 30 June 2003. At the commencement of that period the land was in the course of construction of the basement car park. It would remain a construction site beyond 30 June 2003. 58 In the second appeal, development consent had been granted for the erection of a retail/residential development comprising apartments and retial (sic) floor space. As at 1 July 2002 the land was vacant, former industrial buildings having being demolished. Excavation of the site was completed in April 2003, when work on the foundations of the buildings commenced. It, too, would remain a construction site beyond 30 June 2003. 59 At [22] Pain J accepted Meriton's reasoning that use of land must be for a purpose and the erection of a building was the means by which the land was made to serve that purpose. While intention to use vacant land was not sufficient, the purpose of the use of land was manifested by the commencement of building construction, the use of which buildings were for the purpose of residential accommodation. 60 Meriton was concerned with a legislative provision requiring a "use for" residential accommodation. I prefer the approach taken in it and in [Educang Limited v Brisbane City Council ("Educang") [2002] QSC 374] and the British Columbia case, [Assessor of Area #10 - Burnaby/New Westminster v Intracorp Developments Ltd ("New Westminster") 2000 BCCA 121], to the approach taken in [Sandhurst Holdings (Australia) Ltd v Commissioner of State Revenue (Vic) ("Sandhurst Holdings") (2009) ATC 20 - 118; [2009] VSCA 167] which, as I have explained, is distinguishable from the case before this court.
I note here that, in Educang, to which Gzell J referred (see par 60 in the quote above), and which was decided prior to Parramatta, White J (of the Queensland Supreme Court) concluded (at [29]): In this case the applicant conducted a school, the Forest Lake College, and had done so since 1994. Since its inception, as enshrined in its memorandum and articles, it intended to have two campuses but there was only one school. The land acquired in 1997 was the realisation of that plan. From its acquisition by the applicant the land was for a school, that is, for the purposes of a school which was already established. "Conducted" does not add anything to the expression "used … for a school" in temporal terms. It governs or describes the school and is, for example, to be contrasted with a school operated by the State. The town plan for Forest Lake and the terms of the contract for the sale of the land and the planning approval for it as a school make plain that this land was used entirely for a school. To emphasise the point, if "for the purposes of" were inserted before "a school" there could be no doubt about the exemption. Bowen JA said in Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 at 533 "'use' has regard to the purpose to which the land is put". The respondent was wrong in characterising the use to which the land was put as a construction site. That activity was ancillary to its use for a school.
In Leda CA, Allsop P (as His Honour then was) said (at [24], [25], and [37] - [40]), in upholding Gzell's decision: 24 ... In evaluating any given circumstances there is no warrant within the words of the section or the meaning of the word "use" or the phrase "used for" to require beneficial return or any other like concept. There will be some circumstances in which activity on the land will be understood or evaluated as preliminary to the undertaking of a future use. That is not what s 10AA is directed to. There must be a present use for which the land is being used. That does not deny, however, the proper evaluation of any given circumstances. The appropriate task is the one which the primary judge undertook. Upon evaluation of all the material he asked himself what the people who owned the land were actually using it for. Or, to put the matter another way, what was the purpose of what the owner was doing on the land so that the question as to what the land was being used for could be answered? Here, looking at all the activities together with the surrounding circumstances of Leda's evident purpose in carrying out those activities, it could be concluded (and was concluded by the primary judge, rightly, in my view) that the land was being used for commercial land development. The fact that the land was, at that time, at the stage of earthworks does not deny the present use of the land for commercial land development. It does not matter, in my view, that the residential housing estates likely to be built in due course had not yet been completed, had not yet been sold and had not yet taken their place in a completed residential development. 25 The primary judge's overall evaluation of the use for which Leda was putting the land, as commercial land development or residential development was, in my view, correct. ... 37 In [Parramatta] Pain J was concerned with a legislative provision requiring a "use for" residential accommodation. Building had commenced for residential accommodation. Pain J held (at [22]) that the use of the land was for residential accommodation. 38 It is true that the primary judge said that he preferred the approach in Meriton, Educang and New Westminster to the approach taken in Sandhurst Holdings. 39 It is unnecessary to come to a view whether his Honour was correct in the expression of that view, just as it is unnecessary to analyse each of these cases in order to consider whether they were correctly decided on their relevant provisions. 40 It can be accepted that for the resolution of this appeal used "for" is to be seen as a present use. Leda was using the land for two purposes: cattle grazing and commercial land development. The question was whether the former was the dominant use so as to attract or satisfy s 10AA(3).
In concurring (at [47]) with Allsop P, Campbell JA added (at [51]): The judge was right to conclude that, at the relevant time for imposition of the tax in question, the land was used for commercial land development. It was used for commercial land development even though using it for commercial land development at that time was preparatory to its eventual use, when subdivided, as a vendible commodity, and to its eventual use, by people other than Leda, for residential purposes.
Metricon was also a land tax case, and, in the principal judgment, Barrett AJA said (at [46], and [59] - [66]): 46 Examination of "activities undertaken upon the land in question" is thus central to identification of "use", according to the commonly understood meaning of the expression; and, as Allsop P pointed out in the [Leda CA] case, the inquiry is not limited to activities producing beneficial or commercial return. Furthermore, past activity may be indicative of present use even if the activity is for the time being not continuing. This is because the absence of activity on the land at a given time may be part of a scheme of calculated and continuing utilisation that stems from past activity and remains in course of implementation without discernible activity at the time in question. ... ... 59 Purpose is a concept necessarily at work in s 10AA(3). Each of the six activities in paras (a) to (f) has a purpose or objective of commercial gain. There is a distinction, however, between the purpose for which land is acquired, on the one hand, and the purpose for which it is currently being devoted to use, on the other. This point is particularly important when considering any competing use under s 10AA(3). The purpose of acquisition may or may not correspond with the purpose of current use. Land acquired specifically for the sowing of crops may be put to either that use or some other use, such as cattle grazing or residential subdivision development. The inquiry directed by s 10AA(3) is as to current tangible and physical deployment and its purpose, not the purpose of acquisition. 60 Little is likely to turn on subjective purpose or intention. The question is not what an owner, lessee or other person able to do so decides is to happen in relation to the land. The task is, rather, to determine whether, as an objective matter, the things that that person causes to happen - no doubt in pursuance of the person's purpose or intention - constitute "use" and, if so, whether (and to what extent) that "use" is a use described in paras (a) to (f) of s 10AA(3). Relevant purposes and intentions are principally those already executed, although the complexion of things already done may be coloured by whatever the relevant purpose or intention envisages for the future. Conclusion on the meaning of "use" in context 61 In summary, I am of the opinion that the concept of "use" relevant to s 10AA as a whole (and s 10AA(3) in particular) - a concept in which the preposition "for" plays a central role - is one of physical deployment of Isaacs J's "concrete physical mass" ... in pursuance of a particular purpose of obtaining present benefit or advantage from it, with deployment understood as including not only activity but also inactivity deliberately adopted as a means of obtaining such actual and present advantage from the land; and with purpose understood as objectively ascertained purpose. There is no requirement that immediate productive return be achieved, as long as some benefit or advantage accrues. In a s 10AA(3) case, each "use" considered in the search for "dominant use" must be of the character I have described. Otherwise, the necessary process of comparison cannot sensibly be undertaken. The contentions of Metricon in that respect should be accepted. 62 In saying this, I respectfully depart from the approach that commended itself to the primary judge and which his Honour confirmed in his later decisions on s 10AA in Bellbird Ridge Pty Ltd v Chief Commissioner of State Revenue [2016] NSWSC 1637 and Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9. His Honour there confirmed the view that the possible uses to be considered for the purpose of determining what is the dominant use of land are not necessarily confined to physical uses of the land. That view should not be accepted. ." 63 In the judgment now under appeal, his Honour considered it meaningful to proceed in the manner adopted by the Administrative Decisions Tribunal in the proceedings that culminated in the appeal to this Court in the Ferella case, that is, by seeking to compare an alleged primary production use by an owner who kept a single horse on the land with that owner's use of the house on the land "for rental purposes" or "use as an investment property earning income from the letting". ... On the construction I consider to be correct, the use that the Tribunal should have compared, for s 10AA purposes, with any primary production use involving the horse was simply use (in the form of physical deployment) of the house as a residence. As has been noted, the section is not concerned with the identity of a person who uses the land. The fact of use and the nature of that use are alone relevant. "Future use" and "land banking" 64 There is much to be said for the view expressed by Fullagar J in the Royal Newcastle Hospital case that "intangible use" is an expression without meaning. It is, at the least, apt to confuse and, if employed at all, is probably best confined to cases of the Royal Newcastle Hospital kind where immediate and present advantage is consciously and deliberately taken of land without physical activity on or affecting it. A better description of that situation is probably "passive use". 65 In cases of what has become known as "land banking", courts have been called upon to determine the point at which land acquired with a view to its being made the subject of future commercial development is to be characterised as devoted to a current use. The issue is perhaps better framed by asking at which point in the development phase it can be said that the land is being used for the end purpose of subdivision and sale. The inquiry brings to the fore the critical distinction between a current use and an intended future use. 66 In the [Leda CA] case, it was decided that the land was being used for two purposes, namely, commercial land development and cattle grazing. Although it was common ground that the land was acquired for the purpose of commercial land development, that factor of itself did not compel the conclusion that the land was being used for that purpose. It was the evidence of substantial earthworks carried out on the land and certain other activities (which outweighed the cattle grazing use) that produced the finding that the land was being used for commercial land development. Allsop P reiterated (at [11], [24], [42]) that it would be erroneous to portray the decision below as premised on a characterisation of the earthworks and other activities as merely preparatory to the future intended use of residential subdivision. In accepting the findings at first instance in that case, this Court made it clear (at [24], [40] that s 10AA is not directed to activities that are preliminary to the undertaking of some future use, including the bare holding of land). As Allsop P put it, "[t]here must be a present use for which the land is being used" which may be ascertained by reference to the purpose of the activity under evaluation.
I adopt what counsel for the applicants said in their reply submissions (at pars 20 - 23): 20. Metricon did not cavil with the legal propositions in Leda; in fact Metricon endorsed them (see par [46]). 21. Further, Metricon and Leda are consistent with Meriton. Leda expressly affirms Meriton (at pars (55] - [60]), and the Court of Appeal in Leda did not question the correctness of Meriton (see pars [37] - [40]). To the extent that the Victorian decision in [Applewood Residential Developments Pty Ltd v Commissioner of State Revenue ("Applewood") [2006] VSCA 207] supports the Respondents' contentions, it must yield to NSW authority. 22. The Respondents in these appeals contend that the Applicants overlook the 'actual present use' of the subject land. As the Respondents correctly observe, in Metricon and Leda, the issue was whether future use or future intentions were relevant to the enquiry under s 10AA(3) of the Land Tax Management Act 1956, and found that they were not. In the present appeals, no part of the Applicant's case involves any enquiry into future use or future intentions. Rather, the Applicants contend that the actual present use is 'for' residential accommodation, as evidenced and manifested by building construction works including demolition and excavation whose purpose is and was (and is and only was) the erection of buildings 'for' residential accommodation. 23. In other words, the Applicants in these appeals rely on the findings in Leda, Metricon, Meriton and Educang. The land development process (and associated activities such as demolition, earthworks, excavation, building construction etc) is not an end in itself - it is a means to an end. The relevant 'end' on the facts in the present appeals is 'residential accommodation'. The present, and actual, use is 'for' residential accommodation as manifested by the physical activities being undertaken on the subject land, and their purpose.
Given the totally different context of a land tax case, nothing turns on any failure to expressly uphold Parramatta. Its reasoning was adopted and applied, essentially, in all subsequent NSW cases, involving land tax or otherwise.

Parramatta reviewed in this Court

In this Court, the Chief Judge not only reflected favourably on Parramatta in Peabody, he applied it, not departing from its reasoning in any way (see His Honour's judgment at, especially, [72], and [80] - [88]).
Brown C and I reviewed all relevant authorities in detail in SH Camden Valley Pty Ltd v Camden Council ("Camden") [2015] NSWLEC 104, at [13] - [32], and applied the principles in the decisions of both Pain J and Preston ChJ.

Conclusion re Parramatta

I acknowledge that Nettle JA (as His Honour then was) may be thought to have taken a different view in the Victorian Court of Appeal in Applewood (in 2006), at [20] - [21], but, if so, I respectfully agree with Mr McEwen, and prefer to follow the line of authority established in this Court and in the Court of Appeal of this State.
I see no reason whatever to alter the views I expressed in Camden.
I consider Parramatta was correctly decided, and should and would be decided in the same way now.
I adopt its construction of s 516, and its finding that activities implementing a development consent, which will lead to a residential development of a type not excluded by the section, dictate that the land in such circumstances be categorised for rating purposes as for "residential accommodation".
Parramatta should be followed and applied in the present case.

The Imposts Act

The Imposts Act can certainly apply to local government, including to defeat claims made on it for money: see Meriton Apartments Pty Limited v Council of the City of Sydney (No 3) (2011) 80 NSWLR 541; [2011] NSWLEC 65, at [122] to [147], but see especially [135]. That case was cited with approval by the Court of Appeal in Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123.
The Imposts Act's applicability in cases such as the present received no specific consideration in Parramatta. Pain J made passing reference (in [33]) to a submission founded in the concept of "unjust enrichment", described in Halsbury's Laws of Australia (at [29.1.190]) as the "underlying basis of the modern law of restitution", which is, in turn, the basis of the Imposts Act, and several specific submissions by Mr Hale: see also Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; and David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353.
Here I agree with the applicants' submissions that, as contemplated as a possibility by the Imposts Act, their claims are based in statutory rights (ss 526 - 527), and not on "restitutionary grounds".
I also agree that, if the Act did apply here, the circumstances would enliven s 2(2), so as to negate s 2(1).
Hence, I conclude that the Imposts Act, and its 12 month time limit, do not apply to Karimbla's claims. Accordingly, I do not accept Mr Hale's "utility" submission that the current rating year should be dealt with differently from the earlier years with which some of these cases are concerned.

"Vacant"

Although relevant only in respect of the detail of some present claims, it should be noted that the term "vacant" is not defined in the LG Act, and can be a "question of fact and degree" in particular circumstances. (In Camden, for example, Brown C and I had to deal with submissions regarding the vacancy or otherwise of land.)
In so far as a finding might be necessary, I am content to adopt the definition pronounced by Senior Commissioner Moore (as His Honour then was) in the land "classification" case, Ulan Coal Mines Pty Limited v Mid-Western Regional Council [2013] NSWLEC 1167, at [66] to [68], based as it was on the Macquarie Dictionary: 66 The term "vacant land" is not defined in the dictionary to the Act. I have not been able to find any case in this jurisdiction or in any other jurisdiction that would provide assistance to me where the meaning of the term "vacant land" is dealt with as a matter of general principle rather than in the context of a specific statutory definition. 67 As a consequence, it is appropriate, in my view, to have regard to the definition of the word "vacant" as set out in the Macquarie dictionary. This definition is in the following terms: Vacant 1. having no contents; empty; void. 2. devoid or destitute (of). 3. having no occupant: vacant chairs. 4. untenanted, as a house, etc. 5. not in use, as a room. 6. free from work, business, etc., as time. 7. characterised by or proceeding from absence of occupation: a vacant life. 8. unoccupied with thought or reflection, as the mind. 9. characterised by, showing, or proceeding from lack of thought or intelligence. 10. not occupied by an incumbent, official, or the like, as a benefice, office, etc. 11. Law a. idle or unutilised; open to any claimant, as land. b. without an incumbent; abandoned: a vacant estate (one having no heir or claimant). 68 It seems to me that, in light of this definition, this parcel of land should be categorised by regarding it as "vacant land" and thus to be dealt with under s 519.

JURISDICTION TO ORDER REPAYMENT

The whole Civil Procedure regime has, as key goals, the pursuit of "finality" in litigation, and the avoidance of any "multiplicity of proceedings" (see, e.g. s 64(2) of the Civil Procedure Act 2005).
In the face of that regime, North argues that "adjustment" of rates requires only amendment by Council of its rate records and notices, and, if a "refund" is sought, the commencement, by the beneficiary of an order for "adjustment", of entirely separate restitution proceedings in another court, with all the complexity that they would entail.
The "spirit" of adjustment was an element in a planning case decided by Jagot J, involving a possible claim for a refund of "section 94" contributions, paid but later struck down: Arkibuilt Pty Ltd v Ku-ring-gai Council (2006) 148 LGERA 85; [2006] NSWLEC 502.
A resistance to repayment of money was manifest also in a decision of my own, Caverstock Group Pty Ltd v Minister for Planning ("Caverstock") [2008] NSWLEC 208. See also the related Court of Appeal decision Newcastle City Council v Caverstock Group Pty Ltd ("Caverstock CA")163 LGERA 83; [2008] NSWCA 249.
It was contended before me in the present case that, in ordering a refund, I could rely on s 16(1A) or s 22 of the Court Act, and possibly also s 676 of the LG Act (in the sense that any failure to refund could amount to a breach of an order to adjust).
The law on s 16(1A) has evolved markedly over the time since its enactment in 1993.
Pearlman ChJ surveyed that evolution up to 2001, in her judgment in NTL Australia Pty Ltd v Minister for Land and Water Conservation ("NTL") (2001) 112 LGERA 403; [2001] NSWLEC 5 (see [19] to [28]).
Her Honour derived (at [28]), from that survey, the following four propositions: (a) This Court has jurisdiction to decide all questions of law and fact which it needs to decide in order to deal with a claim which is properly within its jurisdiction ([National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 20 NSWLR 573]); (b) That jurisdiction extends to all matters that are a step in the cause of action which this Court does have jurisdiction to determine, in the sense that those matters are incidental to the matter in which the Court has jurisdiction ([Minister for Minerals and Energy v Vaughan-Taylor and Anor (1991) 73 LGRA 115]); (c) Although s 16(1A) amplifies to some extent the jurisdiction of this Court ([Nix and Dunn v Pittwater Council (1994) 84 LGERA 199]), it operates only in relation to a matter which is ancillary, that is, incidental, accessory or auxiliary (Nix and Dunn v Pittwater Council). I respectfully adopt, in this connection, the statement of Talbot J in [Duncan v Moore and Ors (1999) 103 LGERA 312] at p 319 that "… the matters brought within the Court's jurisdiction by s 16(1A) are only those matters which must be resolved as part of an accessory or ancillary subservient function in the course of determining the matter within jurisdiction"; (d) Section 16(1A) does not operate to confer jurisdiction on this Court in relation to a matter which is separate to and independent of the matter properly within jurisdiction, such as a claim for damages for tort or trespass (eg [Mitchell v Waugh and Anor (1993) 82 LGERA 44]).
In 2008, in Caverstock, I felt constrained about the Court's capacity to make payment orders. When that matter went to the Court of Appeal, Spigelman CJ (with whom Bell JA and Handley AJA agreed) said (at [50]): The situation that has arisen is somewhat unusual in that payment has been made pursuant to a condition before its content has been finally determined. It is clearly desirable, in the interests of avoiding further proceedings, that the Land and Environment Court should be able to determine whether or not a person who has made a payment pursuant to a condition of a consent which is challenged is entitled to a refund and, if so, how much. Although the legal principles involved in such proceedings are not within the usual jurisdiction of that Court, such an issue is so clearly related to the issues before the Court that they should be resolved together. It may be that the requisite jurisdiction is conferred by s 16(1A) of the [Court Act], but that section was not relied upon in these proceedings. ...
In 2012, a repayment issue arose before me in a Class 3 compensation case - Brock v Roads and Traffic Authority of New South Wales (No.2) [2012] NSWLEC 114 - and I dealt, at length, with the authorities relevant to ss 16(1A) and 22 (at [57] - [90]). I said (at [89] - [90]): 89 I hasten to add that the power and jurisdiction I find in this Court to deal with this aspect of the present case arise only because the repayment question arises as "ancillary" to a case which was brought in this Court, clearly "within jurisdiction". 90 Had the overpayment occurred in circumstances, other than when an objection to a determination of compensation had been brought before the Court, I do not believe this Court would have any original jurisdiction to entertain an action for recovery of the debt involved.
Both that judgment and my primary judgment (Brock v Roads and Traffic Authority of New South Wales [2010] NSWLEC 244) were appealed to the Court of Appeal, which delivered two judgments under the name Brock v Roads and Maritime Services (formerly Roads and Traffic Authority of NSW), being [2012] NSWCA 404, and No 2 [2013] NSWCA 12. My conclusions on ss 16 and 22 were not challenged in the Court of Appeal.
Robson J recently considered "ancillary" jurisdictional issues in the context of an interaction of tort law and planning law: Micheal Harold Connor v Smith Hire Service (Casino) Pty Ltd [2017] NSWLEC 7.
His Honour relied, in particular, on par [28] of NTL, and the following earlier comment made by Talbot J in N Stephenson Pty Ltd v Roads and Traffic Authority of New South Wales (1994) 83 LGERA 248, at 266: …the role of something that is ancillary is to provide assistance to achieve a primary objective to which it is subservient. It does not have a separate or independent existence. Its purpose is to facilitate the achievement of the principal claim.
Robson J concluded (at [10]): Applying this approach to s 16(1A) of the [Court Act] to the matters in the present Proceedings, it is clear that while the Tort Claims arise from the same facts as the EPA Claims, they are not ancillary in the sense that it is not necessary to determine the Tort Claims in order to determine the EPA Claims. Rather, the Tort Claims are presented in pars 33-35 of the Statement of Claim as being claims in the alternative to the EPA Claims, and in that sense are quite separate from and independent of the EPA Claims. Accordingly, it stands that the Tort Claims are not ancillary to the EPA Claims, and s 16(1A) of the [Court Act] does not bring the Tort Claims within the jurisdiction of this Court.
I am satisfied that the Court has, in the present case, the necessary power and jurisdiction to order repayment, if I conclude that "adjustment" can mean "refund" or "repayment".
I so conclude.
In doing so, I reject Mr Hale's submissions on that question (especially his closing subs pars 60 - 76), and accept the applicants' oral submissions on it (especially T28.03.17, p14, p18, LL34 - 44, p23, L10 and L48 - p24, L3; T29.03.17, p43, LL28 - 29, p44, LL1 - 3, and L9 - p47, L15, p50, LL26 - 46; and T31.03.17, pp9 - 10, and 15).
Accordingly, the applicants are entitled to repayment of any rates paid under any previous categorisations, now found to be erroneous, of their lands as "business", subject only to any successful argument by the respondents on discretion, a topic to which I now turn.

DISCRETION

The applicants concede their failures to notify within 30 days (s 524), and that any such failure might enliven the Court's exercise of discretion, but they point out, correctly, that no prejudice to any council has been the subject of evidence.
However, the respondents counter that a council on a 12-month financial cycle would self-evidently be prejudiced by having to find the resources in the current year to refund possibly a substantial sum accumulated over a number of previous years, particularly when they argue the difficulty in the so-called "catch-up" provisions (ss 511 and 511A). Councils' orderly financial management arrangements will be disrupted.
I do not find the applicants' failure to notify to be "disentitling conduct" in this case. It has proven to be a costly oversight in some of the cases; it is often not adequately explained; and it possibly dates from 2009, but I do not accept that it ought disqualify the applicants from a refund.
I need also note, in the context of discretion, the respondents' concession that the appeals were commenced "in time".
I find no discretionary basis to decline the relief sought by the applicants in these cases.

CONCLUSION

As arranged during the hearing, I will now publish my judgment, and allow some time for the parties to negotiate, and, hopefully, agree upon, Short Minutes of Order to implement my findings.
As my conclusion is that the applicants have been entirely successful in their arguments, it is appropriate that those negotiations also address the as-yet un-argued issue of costs.
Those Short Minutes of Order should be forwarded to the Registrar, within 28 days, for referral to me, or, in my absence, perhaps to the Duty Judge.
Pending finalisation of final orders, the parties should have liberty to apply in any or all matters on three working days' notice.
Once the questions of relief and costs have been finalised, all the exhibits may be returned, except for the written submissions contained at tabs 64, 65 and 66 of Exhibit A6, and tabs 12, 13 and 14 of Exhibit A2.

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: 26 June 2017

(2007) 155 LGERA 291

(1999) 103 LGERA 312

(2004) 138 LGERA 383

(2001) 112 LGERA 403

(2011) 184 LGERA 365

(1999) 110 LGERA 352

(2010) 179 LGERA 346

(2013) 211 LGERA 337

(2009) 178 LGERA 347

At a glance

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Before

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Judgment (21 paragraphs)

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Cases Cited (70)

Cited By (6)