Contextual considerations
79 The question that then arises is whether there is any contextual reason inhering in the Act, read as a whole, as might suggest that the primary reading of the provision should not be applied. In my view, there is no such reason.
80 I am unpersuaded that the other provisions of the GST Act that use the word "accommodation" which the Commissioner cites as textual support (see above at [53]) can provide any sufficient basis to support the Commissioner's contentions as to the construction of the words of 38-250(1)(b)(i):
It can be accepted that s 38-105(3) relevantly defines "student accommodation" as meaning "the right to occupy the whole or part of the premises used to provide the accommodation". However, that is a specific reference to a particular form of accommodation dealt with on its own terms. It has no relevance to the construction of s 38-250.
Similarly, it may be accepted that s 87-15 defines "commercial accommodation" as meaning "the right to occupy the whole or any part of commercial residential premises" (which is defined to mean certain types of premises including hotels, inns, hostels, boarding houses and the like). However, that provision also stands on its own as a specific subject of the GST Act.
The same issue arises with respect to the definition of "residential premises" in s 195-1, which the Commissioner observes draws a distinction between premises (being land or a building) and the occupation of such premises for residential accommodation:
"residential premises" means land or a building that:
(a) is occupied as a residence or for residential accommodation; or
(b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation;
(regardless of the term of the occupation or intended occupation) and includes a * floating home.
The Commissioner submits, more specifically, that the reference to "accommodation" in s 195-1 was introduced to address more temporary arrangements. The statutory definition was extended to include occupation "for residential accommodation" in order to overcome what the Full Court of the Federal Court in Marana Holdings Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 307; 141 FCR 299 found to be inherent in the terms "reside" and "residence": an implication of permanence or long-term commitment to dwelling in a particular place.
However, any force that submission might otherwise have had in suggesting that "supply of accommodation" should carry a narrower meaning is put to rest by noting the words then following in brackets: "(regardless of the term of the occupation or intended occupation)". That addition means that use of the word "accommodation" in s 195-1 is equally entirely consistent with that word embracing, as MAP submits, any premises that are used by a person as their place of residence whatever might be the bundle of legal rights as confers their right of occupancy.
Insofar as s 40-65 of the GST Act draws a distinction between premises and the "use" of the premises for residential accommodation, that also fails to support the Commissioner's position. The provision is as follows:
Sales of residential premises
(1) A sale of *real property is input taxed, but only to the extent that the property is *residential premises to be used predominantly for residential accommodation (regardless of the term of occupation).
(2) However, the sale is not input taxed to the extent that the residential premises are:
(a) *commercial residential premises; or
(b) *new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998 …
That provision addresses a quite different subject matter: the GST treatment of non-charitable sales of real estate used predominantly for residential accommodation.
In any case, to the extent that the provision has relevance to the construction to be given to s 38-250 (which I do not accept), that it was thought necessary to include the words in brackets "(regardless of the term of occupation)" may similarly be thought to be more consistent with MAP's position than that of the Commissioner.
I accept that s 40-35, which concerns the supply of premises by way of lease, hire or licence, draws a distinction between the supply of commercial residential premises and the supply of accommodation "in" commercial residential premises. Again, however, that is a particular provision of the GST Act addressed specifically to the treatment of such premises. The manner by which the distinction is expressed cannot govern the construction which should be given to s 38-250.
Finally, it can also be accepted that where s 38-90 refers to a "supply of accommodation" as part of a school excursion or field trip, in that context the phrase necessarily refers to a supply of temporary accommodation. Once again however, that is a separate and distinct matter dealt with on its own terms in the GST Act. It has no bearing on the construction to be given to s 38-250.
81 In Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 (Barrowcliff), Hodges J said at 452:
I think it is a fundamental rule of construction that any document should be construed as far as possible so as to give the same meaning to the same words whenever those words occur in that document, and that applies especially to an Act of Parliament and with especial force to words contained in the same section of an Act…
82 However, in each and every one of the above examples the word "accommodation" (which the Commissioner submits should be construed uniformly with the word as it appears in s 38-250(1)(b)(i)) is not contained in the same section of the GST Act. Rather, the word appears in different sections each specifically dealing with different subject matters. In any case, the "fundamental rule" stated by Hodges J is merely a presumption of statutory construction that is readily rebuttable: see Commissioner of Taxes (Vic) v Lennon [1921] HCA 44; 29 CLR 579 per Higgins J at 590.
83 In oral submissions Mr Wheelahan did not seek to support the Commissioner's case directly on the Barrowcliff principle. He instead submitted that the "sense" of the word "accommodation" (being that, in the Commissioner's submission, it relates to a term of occupancy rather than to premises) is common to all the other circumstances in which it appears within the GST Act.
84 However, that proposition is contested. MAP submits that where the expression "supply of accommodation" appears in s 38-260 of the GST Act it does not convey that "sense". Consistently with the submissions Ms Symon advanced in respect of the construction of s 38-250, MAP submits that where it appears in s 38-260 the expression must be understood as extending to the sale of a freehold interest in premises within a retirement village.
85 Mr Wheelahan does not dispute that the states can permit, and have permitted, the sale of freehold interests in such properties. Extracts of the relevant statutory provisions of the various states as were in force at the time of passage of the amendments introducing s 38-250(1)(b)(i), and as are currently in force, were before the Court.
86 I acknowledge Mr Wheelahan's submission that the GST Act and the respective state acts which govern the conduct of retirement villages do not form part of a statutory scheme. Accordingly, as he submits, the principles in Certain Lloyd's Underwriters do not warrant reading the GST Act by reference to that state legislation. However, the Commissioner's submission in that respect misses the point pressed on behalf of the Applicant. That point is that s 38-260 of the GST Act operates indifferently to the manner in which the several states regulate retirement villages. There is nothing self-evident in its language to suggest that it applies in any more limited way.
87 MAP submits that the phrase "supply of accommodation" in s 38-260 therefore can incorporate the supply of a freehold interest in land. Having regard to that conclusion, MAP submits that it follows that the phrase "supply of accommodation" as it appears in s 38-250 should be consistently construed.
88 No doubt if the expression "supply of accommodation" as it appears in s 38-260 properly construed does extend to the sale of real estate in a retirement village, then the Barrowcliff presumption, albeit weak, might suggest that the phrase is to be read as conveying the same meaning where it appears in s 38-250.
89 However, for present purposes the resolution of that point can be put to one side. That is because it at least seems incontestable that the word "accommodation" as found in s 38-260 is neither in terms nor by implication limited in accordance with the "sense" Mr Wheelahan submits that the word conveys in every other provision of the GST Act. The only way in which that might be established is if by circular logic the word "accommodation" as it appears in s 38-260 is also required to be construed having regard to the "sense" that Mr Wheelahan suggests is implicit in its use in the other provisions of the GST Act he cites: a proposition that depends on the very conclusion it is advanced to support.
90 In Taylor v Owners - Strata Plan No 11564 [2014] HCA 9; 253 CLR 531 (Taylor), Gageler and Keane JJ stated:
65. Statutory construction involves attribution of legal meaning to statutory text, read in context. "Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning … But not always". Context sometimes favours an ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves reading statutory text as containing implicit words. Implicit words are sometimes words of limitation. They are sometimes words of extension. But they are always words of explanation. The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.
66. Context more often reveals statutory text to be capable of a range of potential meanings, some of which may be less immediately obvious or more awkward than others, but none of which is wholly ungrammatical or unnatural. The choice between alternative meanings then turns less on linguistic fit than on evaluation of the relative coherence of the alternatives with identified statutory objects or policies.
(Footnotes omitted).
91 Although Gageler and Keane JJ were in dissent in that case, that does not appear to affect the correctness of their Honours' statement of the relevant principles in the above passage. Their Honours' judgment at [65] was cited with apparent approval in HFM043 v Republic of Nauru [2018] HCA 37; 359 ALR 176 at [24] by Kiefel CJ, Gageler and Nettle JJ.
92 Having regard to what appears at [66] of Gageler and Keane JJ's reasons, the (submitted for) existence of several alternative (albeit more limited) ordinary meanings of the word "accommodation" might be relevant to the task of construction if the context in which the word appears in the GST Act were to reveal one of those alternative meanings to be more coherent.
93 However, it appears to the Court that having regard to the analysis above at [80] of these reasons the word "accommodation" is used within the GST Act as an undefined term to serve a number of different specific purposes in a number of different provisions. I decline to conclude that the "sense' of its use in those other provisions is a sufficient reason to give the word as it is employed in s 38-250(1)(b)(i) as a noun, unconfined by any words of limitation. anything other than its generic, plain and ordinary meaning. I reject the proposition that the context in which s 38-250(1)(b)(i) appears requires that one of the more limited dictionary or ordinary meanings is to be selected to substitute for that meaning.
94 Indeed, Mr Wheelahan stopped short of advancing such a submission. He confined the Commissioner's submissions to the proposition that s 38-250(1)(b)(i) should be construed having regard to the "sense" said to be conveyed by most of the dictionary meanings. For the reasons set out above, I do not find that submission persuasive. In any event however I am satisfied that the indicia within the GST Act to which the Commissioner points provide too frail a foundation upon which to rely to accept that submission. As their Honours' in Taylor note at [65]: statutory construction is not speculation.
95 Finally, I reject as implausible the Commissioner's submission that in the statutory context in which the relevant provision is located that there can be discerned some relevant and inherent difference between the transfer of the bundle of rights that constitute a freehold estate (which the Commissioner contends is not within the meaning of a "supply of accommodation") and the transfer of a bundle of rights that constitutes a leasehold estate (which the Commissioner in his written submissions accepts is within that meaning) as would justify reading s 38-250 as excluding the former and including the latter.
96 I accept MAP's submission that a freehold interest and a leasehold interest both:
(a) Give the holder a proprietary interest in land and an "interest in…land" within paragraph (a) of the definition of "real property" in s 195-1 of the GST Act;
(b) Give the holder the right of exclusive possession, being "the right to exclude anyone and everyone from the land for any reason or no reason" (Queensland v Congoo [2015] HCA 17; 256 CLR 239 at [8]); and
(c) Give the holder the right to register their interest over the land and to register a caveat claiming an estate or interest in the land.
97 In oral submissions Ms Symon drew the Court's attention to the definition of a "long term lease" in s 195-1 as referring to a supply by way of lease, hire or licence for at least 50 years.
98 Having regard to that defined term, other provisions of the GST Act such as s 38-445 treat certain grants of freehold and long term leases identically for the purposes of the Act. At common law, an option to renew a lease is an incident of the lease: Alcan per French CJ at [8].
99 I observe that in the Australian Capital Territory, the largest estate in land an ordinary purchaser usually can acquire is a 99 year lease.
100 I reject the proposition that in that statutory and common law context, such differences as may be accepted to exist between those estates require the conclusion that the legislature intended that very long, potentially renewable leases would fall within the language of s 38-250(1)(b)(i) of the GST Act while freehold estates would be excluded. From the point of view of a person in need of charitable assistance seeking to acquire accommodation (whose interests the provision may thought intended to benefit), a freehold estate offers only limited advantages over a long leasehold interest.
101 In oral argument, Mr Wheelahan sought to refine the Commissioner's position. He submitted that it was not that a supply by way of lease, hire or licence would fall within the meaning of s 38-250(1)(b)(i) and a supply of a freehold interest would not. Rather, because a degree of temporality was to be implied within the meaning of "accommodation" any supply - however manifested - conferring a long term right of occupancy was necessarily to be excluded.
102 However, as junior counsel for MAP Mr Sievers tellingly submitted in reply, where that line might be drawn was left hanging. Would it apply to a right to occupy for more than one year, or ten years, or more? The Commissioner had advanced no criteria or principle as would enable a practical, commercial determination of what would fall within or outside that exclusion. A basis for its application was wholly lacking from the analysis advanced by Mr Wheelahan on the Commissioner's behalf in oral submissions. Mr Sievers therefore submitted that the Commissioner's submission in that regard did not provide a plausible basis to support a conclusion as to the proper construction of s 38-250(1)(b)(i). I agree. The Commissioner's refined submission cannot be accepted. Mr Wheelahan pointed to no basis in the text, context or purpose of the provision which would reveal an appropriate discriminant. Moreover the application of any such discriminant, assuming one could be identified, would have the seemingly perverse effect of privileging the tax treatment of the supply of insecure short term tenure to disadvantaged persons over the supply of more secure entitlements.
103 The Commissioner does not suggest that the charitable status of MAP has been abused, or that by the scheme upon which MAP has sought a private ruling it has attempted to do anything other than to supply accommodation to persons both in need and eligible to benefit from public housing assistance. Those persons have been assisted into that accommodation by way of a 99 year no-interest loan. The arrangements for repayment of that loan on any subsequent sale ensures that such funds as are repayable, when recovered, will be applied to the same charitable objective.
104 Further, in my view, the Commissioner does not advance any plausible reason why MAP's transaction should be viewed, as the Commissioner appears to contend, as having been entered into on a commercial basis. I accept that Mr Wheelahan is correct that the GST Act generally deems any supply by a charitable organisation for more than 50% of the market value to be a commercial supply. However, assuming that MAP is correct in its submission that the supply of accommodation by MAP was for consideration less than 75% of the market value then MAP's scheme simply gives effect to an express exception to that principle which Parliament has seen fit to enact. On that basis, the posited supply does not and cannot fall within the description of a commercial supply. The balancing considerations that the Commissioner submits may apply to the commercial operations of charities are therefore not engaged.
105 To the extent that it is possible to discern an overarching public purpose underpinning the provision in question, I am satisfied that that purpose has not been abused by this specific instance of its application. MAP's scheme has enabled purchasers identified to the MAP by the Melbourne City Mission to obtain secure long term accommodation, which they would not otherwise be able to afford.
106 Having regard to the above, I am satisfied that the ordinary and natural meaning of a supply of accommodation as is contained in s 38-250(1)(b)(i) is that for which MAP contends. I am satisfied that having regard to the context of the legislation in which the provision appears, there is no reason to depart from that ordinary and natural meaning. There is no adequate foundation to support a finding that a literal or grammatical construction of the provision; the purpose of the statute; or the canons of construction require its words to be read other than in accordance with their plain meaning.
107 There is thus nothing as would support the Commissioner's conclusion that what is meant by a "supply of accommodation" in the relevant provision excludes the circumstances set out in the facts of the Private Ruling.
108 For completeness I should address three matters which in my view are not dispositive, and upon which I have placed no weight.
109 First, in my opinion what is contained in the Explanatory Memorandum assists neither party. There is nothing in the relevant paragraphs of that document (see at [34] above) which appears to be clearly consistent with, or clearly inconsistent with, the respective submissions of either party. I accept MAP's submissions in that regard.
110 Second, I am not persuaded that the text of the relevant Minister's Second Reading Speech can control the meaning to be given to the provision. It may be accepted, as Mr Wheelahan submits, that that speech reveals that the circumstance which motivated the introduction of the amendments to s 38-250 was that the government, having regard to consultation with the charity sector, had identified that the income based client contributions associated with charitable schemes for the provision of temporary residential accommodation were then often marginally above the 50% market test. However, the statutory language used to express Parliament's response to that triggering concern was not so limited. Had Parliament wished to confine the benefit afforded by the provision to that precise circumstance, it could have done so. Indeed, as Ms Symon pointedly observed, the GST Act is replete with instances of precisely such limited statutory language being used to confine a benefit or to define an exception. Many such examples were referred to by Mr Wheelahan himself in his submissions in support of the Commissioner's contentions. Parliament could have chosen to use such statutory language had it intended precisely to confine the benefit afforded by s 38-250(1)(b)(i) to the limited triggering concern to which the Minister referred in the Second Reading Speech. It did not do so.
111 Third, I am uninfluenced by MAP's submission that a liberal construction must be given to the provisions of s 38-250 because it is remedial or beneficial legislation.
112 In JMB Beverages Pty Ltd v Federal Commissioner of Taxation [2009] FCA 668; 73 ATR 191 (a case about the application of the GST-free exemption for food) Edmonds J (at [60]) referred with approval to the following observations made in Commissioner of Taxation v Bargwanna [2009] FCA 620 (at [28]):
It can be accepted that where Parliament has enacted legislation to encourage a particular activity, for example, legislation which gives particular concessions to the mining or petroleum industries, the legislation must be construed so as to promote Parliament's purpose and not so as to detract from that purpose: Totalizator Agency Board v Commissioner of Taxation (1996) 69 FCR 311 at 323A per Hill J, with whom Tamberlin J and Sundberg J agreed. Thus an exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is to be given a liberal rather than a narrow construction and application: see Commissioner of Taxation v Reynolds Australia Alumina Ltd (1987) 18 FCR 29 at 35 per Beaumont J and at 46 - 47 per Burchett J; Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 at 457 per French J.
113 That passage is relied upon by MAP. However, those submissions ignore that his Honour had continued in the same paragraph:
But in the case of a provision which confers an exemption upon a particular kind of body or fund which meets certain requirements, Parliament's purpose is not promoted by construing the provision in a manner favourable to the body or fund referred to in it: see TAB at 323C per Hill J. Indeed, there is much to be said for the view that the privileged status of exemption from income tax on the income of a fund which aspires to that status demands strict adherence to the requirements that must be met before that status is conferred …
114 In my view the provision under consideration is of the second character; that is, properly understood, it confers an exemption upon a particular kind of body assuming that body has met the requirements set out in the statute. I accept the Commissioner's submission that there is no warrant to give s 38-250(1)(b)(i) a broader construction than would otherwise apply on a reading of its text understood in its ordinary sense in order to promote the Parliament's purpose or so as to not detract from that purpose.
115 However, that is of no consequence. I am satisfied both that MAP is the kind of body to which the provision in question was intended to apply, and that it has complied with its requirements. That is sufficient to dispose of this matter.