Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue

Solicitors: Marsdens Law Group (Plaintiff) Crown Solicitors Office (Defendant) File Number(s): 2015/358292015/123762

Judgment

1. HIS HONOUR: These proceedings concerned applications by the plaintiff taxpayer for the review of four land tax assessments. The plaintiff was successful in having two of the land tax assessments revoked. The Chief Commissioner was successful in having two of the assessments confirmed. The plaintiff submits the Chief Commissioner should pay its costs. It submits it was the successful party. The Chief Commissioner submits there should be no order as to costs in recognition of the fact both parties were partially successful and partially unsuccessful.
2. The Chief Commissioner also relies upon observations in my reasons (Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9), in which I was critical of aspects of the plaintiff's case and its presentation (see in particular at [21], [98]-[100], [106] and [179]-[181]). The Chief Commissioner submitted that by reason of the conduct of the plaintiff unnecessary costs were incurred, and that in those circumstances, having regard to the equal success and lack of success of the parties, an order there be no order as to costs would be more than fair.
3. For its part, the plaintiff submitted that it substantially succeeded on a number of issues, as well as having succeeded on two of the four claims. It submitted that its success on particular issues should be reflected in the costs order. The plaintiff ultimately accepted that one of the issues it raised was a neutral consideration. The others were as follows: "2. That application is made on the basis that the Plaintiff substantially succeeded in the matter, including in respect of the following critical issues: … b. That 'use' for the purposes of the 'dominant use' test under s.10AA(3) did not include the Plaintiff merely holding the land as part of its stock in trade nor the Greenfields Development Corporation Pty Ltd merely acquiring rights in respect of the Farmland under the Development Rights Agreement (all Tax Years) ([148]-[151]) Decision). This, again, was relevant to (and expressed in the Judgment as being potentially determinative of) all appeals. c. That the Farmland was used for 'primary production' under s.10AA(3)(b) of the Act, including to the extent that fodder grown on the land was used to maintain animals on other land (all Tax Years) ([50] and [94] Decision.) Although factually the quantum as found by the Court referable to this item was held to be insufficient for the dominant purpose test for the 2011 and 2014 years, this, again, was relevant to all appeals. d. That the use of the Farmland to maintain animals for the purpose of selling them or their natural increase or their bodily produce satisfied the 'commerciality test' under s.10AA(2) of the Act (all Tax Years) ([50] Decision). This, again, was relevant to all appeals."