Mourched v Chief Commissioner of State Revenue

Supreme Court of NSW|2023-06-23|Before: Davies J

Anthony Mourched (First Plaintiff) George Mourched (Second Plaintiff) Chief Commissioner of State Revenue (Defendant) Representation: Counsel: D McGovern SC (Plaintiffs) E Graham (Defendant)

Solicitors: Auslex Law Group (Plaintiffs) Crown Solicitors Office (Defendant) File Number(s): 2022/375552 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil and Administrative Tribunal Jurisdiction: Appeal Panel Citation: Mourched v Chief Commissioner of State Revenue [2022] NSWCATAP 362 Date of Decision: 16 November 2022 Before: Dr R Dubler SC, Senior Member S Higgins, Senior Member File Number(s): 2022/203141

Proceedings before the Tribunal

The plaintiffs claimed before the Senior Member constituting the Division, and again before the Appeal Panel, that Parcel B should also be exempt, because situated on Parcel B was a septic system used for the childcare centre, and that was said to be the only current use of Parcel B. The plaintiffs submitted that the childcare centre could not be operated without the septic system.
In essence, the plaintiffs were seeking a review by the tribunal of the determination by the Chief Commissioner that the land at 297 Bringelly Road was made up of two separate valuation lots. Section 14A of the Valuation of Land Act 1916 (NSW) ("VOL Act") enabled the Valuer-General to value separately different parts of the same parcel of land and, in such a case, the VOL Act applied to each such part as if it were a separate parcel of land.
The Senior Member rejected a submission by the plaintiffs that it was the whole of Lot 105 that had to be considered for the purpose of determining whether a relevant exemption from land tax arises. He held that this was contrary to the VOL Act.
The Senior Member held that in order to succeed the plaintiffs had to show on the balance of probabilities that the sole use of Parcel B at the relevant date (31 December 2019) was a place where children were educated or cared for by an approved provider. He said that there was no dispute that a condition of the development approval for the septic system was that a fence be erected to keep the children off the land comprising Parcel B. He said that the issue before the Tribunal was what Parcel B was actually being used for at a certain date. Merely having evidence of an approval did not mean that the approval was being utilised and that the utilisation was the only use being made of the subject property.
The Senior Member held that he was not satisfied that the land which comprised Parcel B was solely used as the place where children were educated or cared for.
The plaintiffs lodged an internal appeal to an Appeal Panel. Such an appeal is only on a question of law unless leave is given on other grounds: s 80(2)(b) Civil and Administrative Tribunal Act 2013 (NSW) ("CAT Act"). The grounds of appeal were as follows: 1. The determination of the Senior Member constituted an error of law in that it was contrary to the uncontested material relied upon by the Appellants (notwithstanding that the rules of evidence do not apply to such proceeding). 2. The Senior Member ought to have found on the "balance of probabilities" or [scil. on] the available material that in respect of the totality of the property of which Parcel Be [scil. B] formed part it was used for the sole purpose as a Childcare Centre and was therefore exempt from land tax in respect of the land tax year. 3. In dealing with the application before him the Senior Member failed to adhere to the Guiding Principle under s 36(2) of the Civil and Administrative Tribunal Act 2013 in that there was an inordinate delay from the time of the receipt of evidence and submissions until the delivery of judgment so that there was a miscarriage of justice.
The relevant parts of the decision of the Appeal Panel are as follows: [70] The proper construction of section 10(1)(u) begins with an examination of the text, which we have set forth above. The exemption is firstly attracted only by land 'that is used solely for the provision of an approved education and care service'. That phrase is expressly qualified by clauses (1) and subclauses (i) and (ii) of the section. Of particular relevance in the case before us is that subclause (ii) confines the exemption to land 'but only if … the land is the place where children are educated or cared for by the service'. This phrase places particular emphasis on the location where children 'are' educated or cared for by the education and care service. [71] The ordinary meaning of this text would suggest that merely providing services which are used simply to assist in the provision of an approved education and care service located on another parcel of land, being the place where the children 'are' educated or cared for, is insufficient. [72] This would be the case even if the service in question, such as the septic service located on Parcel B, was indispensable to the operation of the educational and care service if it is still not the place where the children are actually educated or cared for. [73] In this regard, the fact that there is a fence preventing children from using Parcel B as a place where they are being educated or cared for fortifies this conclusion. [74] Such an interpretation is not inconsistent with the purpose or object underlying the LTM Act, which is to provide for the levying and payment of land tax on land in NSW, except where specific exemptions provided for by section 10 apply. Nor is it inconsistent with the purpose or object underlying section 10(1)(u) itself, which is to encourage the operation of Childcare Centres by exempting the relevant land from tax once the Centre has been approved and is operating 'but only if' the land is the place where the children are educated or cared for. [75] For these reasons, in our view, the exemption would not be attracted merely by the supply of a sewerage water facility to Parcel A. For the exemption to be attracted Parcel B must be the place where the actual conduct of educating or caring for children in an approved facility takes place. [76] Accordingly, the Tribunal did not err in failing to find that Parcel B came within the exemption, and we reject ground 2.
The appeal grounds now put forward by the plaintiffs are as follows: 1A. The Appeal Panel erred in its construction of s 10(1)(u)) of the Act in finding that land used for the provision of a service that assists in, or is indispensable to, the provision of an approved education and care service conducted on an adjacent parcel of land is not entitled to the exemption from land tax conferred by s 10(1)(u) (Judgment [71] and [72]). 1B. The Appeal Panel erred in finding that for the exemption conferred by s. 10(1)(u) of the Act to apply the land must be the place where the actual conduct of educating or caring for children in an approved facility takes place (Judgment [75]). 1C. The Appeal Panel ought to have found that the correct construction of s 10(1)(u) of the Act exempts from land tax a parcel of land used for the povision of a service that assists in, or is indispensable to, the provision of an approved education and care service conducted on an adjacent parcel of land.
The defendant has filed a response asserting that none of the grounds of appeal raises a question of law, but saying that even if the question identified in paragraph 1B is a question of law, leave to appeal should not be granted because the plaintiffs have not demonstrated that this case involves principles warranting a grant of leave to appeal. The response says that there is no general public importance, nor is there any injustice where the applicability of the exemption provided for in the statutory provision turns solely on findings of fact made at first instance in relation to these plaintiffs.

Leave to appeal

Section 83(1) of the CAT Act provides: A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings.
It is not sufficient, therefore, that a question of law is identified. A party seeking to appeal should show why leave should be granted.
In John Maiolo t/as M & N Peninsular Kitchens & Joinery v Chiarelli [2017] NSWSC 982 I said: [29] Under s 83 of the NCAT Act there are two matters which a Plaintiff must establish for this Court to have jurisdiction and intervene in the proceedings. The first is that there must be a question of law. The second is that leave needs to be given. A party seeking leave to appeal must point to something more than error. [30] In Zelden v Sewell Henamast Pty Limited v Sewell [2011] NSWCA 56 Campbell JA (Young JA agreeing) said at [22]: It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute. Those principles are ones that, in my view, apply in the present case. [31] In Jaycar Pty Limited v Lombardo [2011] NSWCA 284 Campbell JA (Young and Meagher JJA agreeing), having repeated his remarks in Zelden above, went on to say at [46]: Kirby P recognised that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond what being merely arguable.
In Targeted Property Investments Pty Ltd v Look Up Technologie Pty Ltd (No 2) [2023] NSWSC 416, Griffiths AJ, when speaking of s 83, said at [33]: There are several important points to make about this provision: (1) There is no appeal to this Court from a decision of the Appeal Panel as of right. The applicant must persuade the Court that leave should be granted. (2) An appeal is limited to "an appeal on a question of law". (3) As was recently emphasised in Thomas and Naaz at [32], "it is not sufficient merely to assert that the Tribunal erred in law in order to satisfy the limited conferral of jurisdiction". (To similar effect, see Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 at [6] and [22]; and Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]). Accordingly, it is well-settled that a challenge which is wholly or partly factual cannot be converted into a question of law merely by asserting that a question of law is involved or merely by asserting error itself. (4) What constitutes a question of law is "vexed and context dependent" in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises (see Thomas and Naaz at [52] and Da Costa v The Queen (1968) 118 CLR 186 at 194; [1968] HCA 51). (5) Although there is no clear test of what constitutes a question of law for the purposes of s 83 of the CAT Act, it is important not to lose sight of the continuing binding authority in this State of the Court of Appeal's decision (by majority) in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. Azzopardi stands for the proposition that a particular finding which is alleged to be "perverse" or "unreasonable" or "not reasonably open" is not ordinarily a question of law. At pp 155-156, Glass JA (with whom Samuels JA agreed, Kirby P dissenting) said: It is clear from these extracts that numerous pejorative expressions in common usage possess a single meaning and are interchangeable. To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Workers' Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law: R v District Court of Metropolitan District Holden at Sydney; Ex parte White (1966) 116 CLR 644 at 654. (6) Furthermore, at p 157, Glass JA said: …when the law correctly stated is applied to the facts found in order to produce a conclusion error may intrude again. An erroneous conclusion that facts properly determined fail to satisfy a statutory test, for example, injury arising out of the [course] of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open: Hope v Bathurst City Council; Australian Gas Light Co v Valuer-General. See also Thomas and Naaz at [53]. (7) It is unnecessary to decide for the purposes of this appeal whether a "question of law" encompasses a mixed question of fact and law (see generally, at the federal level, the decisions of the Full Court of the Federal Court in Haritos v Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 and May v Military Rehabilitation and Compensation Commission (2015) 233 FCR 397; [2015] FCAFC 93 and contrast the position at the State level, which is reflected in cases such as Attorney-General for the State of New South Wales v X (2000) 49 NSWLR 653; [2000] NSWCA 199 at [44]; Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [60]; and Hanave Pty Ltd v Nomad Sydney Pty Ltd (formerly Wine Nomad Pty Ltd) [2023] NSWSC 265 at [45] per Chen J). (8) The existence of a question of law is not merely a qualifying condition to the statutory right of appeal; rather, the question of law alone is the subject matter of the appeal (see Osland v Secretary to the Department of Justice (No 2) (2010) 241 CLR 320; [2010] HCA 24 at [21] per French CJ, Gummow and Bell JJ and Davis v NSW Land and Housing Corporation [2016] NSWCA 325; (2016) 18 BPR 36,459 at [77] per McColl JA, with whom Meagher and Leeming JJA agreed). (9) Whether or not an appeal is on a question of law should be approached as a matter of substance and not merely form. As the Full Court of the Federal Court said in Haritos at [107], if, as a matter of substance, there exists a question of law, the Court has "a procedural discretion, to be exercised judicially and where it is in the interests of justice to do so, to direct its formal identification in an amended notice of appeal even where the question of law has not been identified before the primary judge". It is notable that the Court there viewed this approach as consistent with that of the Court of Criminal Appeal in R v JS [2007] NSWCCA 272; (2007) 175 A Crim R 108 at [57]-[69] per Spigelman CJ (with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed). Where an appellant is unrepresented, it may be appropriate to adopt a more generous or benevolent approach in assessing whether the notice of appeal identifies a question of law (see, for example, Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314 at [75]-[77] per Mortimer J, as approved in Haritos at [104] and see also Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]). (10) A s 83 appeal to this Court is confined to a decision of the Appeal Panel and does not extend to the NCAT at first instance (see Bronze Wing International Pty Ltd v Safework NSW [2017] NSWCA 41 at [10]).
His Honour then went on to say: Principles guiding the issue of leave [36] The relevant core principles are well-settled. They were helpfully summarised by Gleeson JA (with whom Macfarlan and Payne JJA agreed) in Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]: Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted: Sharpe v Heywood [2013] NSWCA 192 at [34]; McMahon v Permanent Custodians Ltd [2013] NSWCA 275 at [57]. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]. [37] Other helpful guidance is provided by the observations of Basten JA (with whom Tobias AJA agreed) in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37]: [32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: "It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute." [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised "that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable": at [46]. [34] Kirby P in Carolan set out a number of reasons for the constraint on rights of appeal in such cases. Not all of them have been repeated in later cases. Not all are universally relevant. Thus, the delay in obtaining a hearing in this Court appears to have been greater at that time than is the case presently, although an overly liberal approach to leave applications might well result in an increase in the period between filing and hearing. [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure "recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention": at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction. [36] As the High Court has noted, an application for leave is not a proceeding in the ordinary course of litigation but a preliminary procedure: Collins v The Queen [1975] HCA 60; 133 CLR 120 at 122; Coulter at 356. On the other hand, there is no reason to doubt that s 58 of the Civil Procedure Act 2005 (NSW), requiring a court to act in accordance with "the dictates of justice" when making an order or direction "for the management of proceedings", applies in respect of a leave application. One of the factors to be taken into account pursuant to s 58 is "the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction": s 58(2)(b)(vi). That provision, like s 56, identifying the overriding purpose of the Civil Procedure Act as being to facilitate the just, quick and cheap resolution of the real issues in the dispute, recognises that questions of injustice are relative. Similarly, the requirement that this Court not order a new trial unless it appears that "some substantial wrong or miscarriage" has been occasioned, also reflects a principle of parsimony in requiring that the parties be put to the expense of a second trial: UCPR, r 51.53. [37] The idea that injustice may be measured on a scale reflects a number of underlying considerations. First, the ability to assess the existence of an injustice in a preliminary proceeding, such as a leave application, is limited. In assessing the merit of a proposed appeal, the Court may well apply a vague criterion, such as whether the judgment below is attended by "sufficient doubt". Secondly, injustice involves a balancing exercise. The delay and cost of further litigation will constitute a form of injustice to the successful party below, whatever the outcome of the appellate process. Thirdly, the entitlement of the parties to justice is not unconditional, but is dependent upon the resources of the court made available by the government and the appropriate allocation of resources by the parties, which may depend upon their individual assessments of the importance of the issues in dispute. The parties may well make disparate assessments in a particular case. [38] An applicant for leave under s 83 must demonstrate something more than that the impugned decision of the Appeal Panel is arguably wrong. Ordinarily, leave will only be granted where there is a matter that involves an issue of principle, a question of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable.

Submissions

The plaintiffs submitted, on the question of leave, that the proper construction of s 10(1)(u) of the LTM Act is of general importance, it having not been the subject of any decision of the Court. The two aspects were whether the defendant could assess tax on separate parcels of the land as designated by the Valuer-General pursuant to s 14A(4) of the VOL Act, and whether land used as providing a service that assists in, or is indispensable to, the provision of an approved education and care service, is similarly exempt from land tax. The plaintiff submitted further that a determination for the tax year under consideration will have ongoing importance, and in that way a refusal of leave would work an injustice to the plaintiffs.
The plaintiffs submitted that the Appeal Panel erred in its proper construction of the exemption by limiting the scope of the exemption to the part of the premises comprising the childcare centre and failing to apply the exemption to the premises as a whole.
The plaintiffs submitted that in construing the word "land" in the exemption the Appeal Panel did not have regard to the totality of Lot 105 being the parcel of "land" upon which the childcare centre is located. Rather, the Appeal Panel erred by taking separate parcels established for valuation purposes under s 14A(4) of the VOL Act as the basis for ignoring the one land title and the one parcel and treating them as two separate parcels.
The plaintiffs submitted that the Appeal Panel erred by treating the infrastructure connected to and affixed to the childcare centre building as other than part of the building itself and therefore as part of the childcare centre. The plaintiffs submitted that the exemption should have been construed as encompassing any land reasonably necessary to the use of the parcel which undoubtedly carries the exemption, as long as the use is ancillary or incidental to the purposes that attract the exemption.
The plaintiffs submitted that, having regard to the statutory context, the reference to "place" in the exemption should be construed broadly by reference to the premises where the childcare services are being undertaken together with the services which permit the childcare centre to have functionality.
The plaintiffs submitted that the Tribunal, by having regard to the exhibits which identified land works early in 2019, took into account irrelevant considerations. The plaintiffs submitted that there was no evidence that any other use was being made of Parcel B apart from its use for the septic system which was indispensable to the operation of the childcare centre. In both of those ways, the plaintiffs submitted that the issue of whether the plaintiffs had shown sole use of the land for the purpose in s 10(1)(u) was a question of law.

Legislation

Section 9 of the LTM Act provides: 9 Taxable value (1) Land tax is payable by the owner of land on the taxable value of all the land owned by that owner which is not exempt from taxation under this Act. (2) The taxable value of that land is the total sum of the average value of each parcel of that land. (3) The average value of a parcel of land is to be calculated, as provided for by section 9AA, on the basis of the land value of the land. (4) The land value of land, in relation to a land tax year, is the value entered in the Register as the land value of the land as at 1 July in the previous year. (5) The fact that there is no land value entered in the Register on 31 December in a year as the land value of the land as at 1 July in that year does not prevent land tax being levied and charged and becoming payable for any following tax year once that land value is entered in the Register and the average value is ascertained.
The Register referred to in that section is defined in s 3 as meaning "the Register of Land Values kept under section 14CC of the Valuation of Land Act 1916 (NSW)".
Section 14CC of the VOL Act provides: 14CC Register of Land Values (1) The Valuer-General is to keep a Register of Land Values in such form as the Valuer-General thinks fit. (2) The Register is to contain such of the following kinds of information in relation to land as is within the knowledge of the Valuer-General - (a) information as to the ownership of the land, (b) information as to the occupation of the land, (c) information as to the value of the land, (d) information as to the title of the land, (e) information as to the location or description of the land, (f) information as to the area of the land, (g) such other kinds of information as is permitted or required by this Act or the regulations to be entered in the Register. (3) An entry in the Register as to a land value, allowance or apportionment factor ascertained under this Part is conclusive evidence of the ascertaining of the value, allowance or factor on the date shown in the entry.
Section 10 of the LTM Act deals with land that is exempted from tax. It relevantly provides: 10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E and 10P, be exempted from taxation under this Act - (u) land that is used solely for the provision of an approved education and care service (within the meaning of the Children (Education and Care Services) National Law (NSW)), but only if - (i) the service is provided by an approved provider under that Law, and (ii) the land is the place where children are educated or cared for by the service,
Section 14A of the VOL Act provides: 14A Valuer-General to ascertain land values (1) The land value of each parcel of land in New South Wales, other than - (a) lands of the Crown, or (b) land that is within the Western Division and is not within the area of a rating or taxing authority, is to be ascertained each year. (2) The Valuer-General may at any time value any parcel of land, either on his or her own initiative or - (a) in the case of lands of the Crown, on the application of the public authority by or on whose behalf the land is held, or (b) in the case of land within the Western Division (including land referred to in paragraph (a)), on the application of the Secretary of the Department of Industry, or (c) in the case of land within the area of a rating or taxing authority (including land referred to in paragraph (a) or (b)), on the application of that authority. (3) (Repealed) (4) The Valuer-General may separately value different parts of the same parcel of land, in which case this Act applies to each such part as if it were a separate parcel of land. (5) Any land value ascertained under this Act is to be entered in the Register of Land Values. (6) The power to ascertain a land value includes the power to reascertain that land value, and references in this Part to the ascertainment of land value are taken to include references to the reascertainment of land value.
It should be noted that neither "parcel" nor "parcel of land" is generally defined in the VOL Act, although "parcel of land" is defined for the purposes of s 26A in relation to the Strata Schemes Development Act 2015 (NSW).
The evidence discloses that there are two parcels of the land in the Register at the address 297 Bringelly Road, Leppington being Lot 105 in DP 1204146. One parcel of land, identified as PID3866335, is 3,116 square metres (Parcel A) and the other, identified as PID 3864500, is 2.021 hectares (Parcel B).

Consideration

The grounds of appeal do not clearly articulate the issues argued before the Appeal Panel and in this Court. The way the matter was argued suggest to me that there are three issues for determination on the appeal as follows: 1. Is land tax able to be assessed on the parts of land as valued by the Valuer-General in accordance with s 14A(4) of the VOL Act? 2. Is Parcel B, on the assumption that its only use is for the septic system, entitled to the exemption in s 10(1)(u) of the LTM Act? 3. Did the Appel Panel err by determining that the plaintiffs had not proved that the sole use of Parcel B was for the septic system?
The Commissioner submitted that there were two questions only, being (a) whether the whole of Lot 105 should be assessed as one parcel, and (b) whether the land was used solely for the provision of the childcare service and that that land was the place where the children are educated for cared for. Nothing turns on the difference between those two questions and the three I have identified for any result in the proceedings, but it seems to me the issue of whether land used for an ancillary use to exempt land is capable of being exempt itself for that reason, is a separate and preliminary question to whether the land is solely used for the particular purpose.

(1) Is land tax able to be assessed on the parts of land as valued by the Valuer-General in accordance with s 14A(4) of the VOL Act?

The plaintiffs accepted that the Amended Summons did not clearly identify this point as a separate ground of appeal, but it was said to be caught up in the grounds put forward. The point was argued before the Senior Member in the Division and before the Appeal Panel. As noted earlier, submissions have been made in this Court on the point.
The question is a pure question of law, as the Commissioner appears to accept, since it concerns the proper construction of s 9 of the LTM Act and its relationship to s 14A of the VOL Act. The matter is of general importance, sufficient to justify the grant of leave to appeal to this Court.
The main point made by the plaintiffs is that the scope of s 14A is for valuation purposes and not for exemption purposes. However, ss 9 and 10 of the LTM Act must be read together. Section 9 provides for the assessment of land tax based on the Valuer-General's valuation, but s 10 provides a series of exemptions. It is difficult to see why the Register would cease to be relevant for exempting land from tax where it provides the basis for the imposition of tax in the first instance.
The interplay between s 9 of LTM Act and ss 14A and 14CC of the VOL Act is a complete answer to the plaintiffs' submission noted at [20] above (paragraph 8 of the plaintiffs' written submissions). The defendant is able to assess the land tax payable on any parcel of land entered into the Register by the Valuer-General: Leppington Pastoral Co Pty Limited v Chief Commissioner of State Revenue [2017] NSWSC 9 at [46]. In the present case, the land being Lot 105 consists of two parcels as described. There can be no basis for the suggestion that where "land" is referred to in s 10 of the LTM Act, it should be treated differently from where it appears in s 9. It is a general rule of statutory construction that where a word is used consistently in a single piece of legislation, it should be given a consistent meaning unless there is a reason to do otherwise: The Registrar of Titles of the State of Western Australia v Franzon (1975) 132 CLR 611 at 618; D151 v New South Wales Crime Commission (2017) 94 CLR 738 at [72]. Accordingly, land tax may be assessed on, and an exemption may apply to, a parcel of land contained in the Valuer-General's Register even though it is less than a single lot of land.
The thrust of the submission made to the Appeal Panel on the construction of s 10(1)(u) of the LTM Act was that the defendant should have assessed the land for tax as one lot by reason of the services on Parcel B being indispensable to the conduct of the business in Parcel A.
In my opinion, the answer to the plaintiffs' submission that the whole of land should have been treated as one title and assessed accordingly, is what is provided in s 9(4) of the LTM Act. In that regard, I entirely agree with the remarks of the Senior Member constituting the Administrative and Equal Opportunity Division in Australian Native Landscapes Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 189 at [30]-[33]: [30] What the Applicant seeks in this matter is for the Chief Commissioner to create two or more parcels of land form a single parcel of land which has been so constituted and valued by the Valuer-General. The Chief Commissioner's power is in my opinion, confined to deal with land or parcels of land with taxable values, values calculated on the basis of the value entered in the Register kept by the Valuer-General as required by the provisions of the Valuation of Land Act. The Chief Commissioner, can under the powers given to him in s 68 of the Act, request copies of the Register of Land Values and the Valuer-General is obliged to furnish such copies of the Register of Land Values, and any valuation list or supplementary list prepared by the Valuer-General, as the Chief Commissioner may require. [31] But the Chief Commissioner has no power to review the valuations provided nor question any decision to treat lots as a single parcel of land by the Valuer-General. [32] However, there is ample power for owners of land to have valuations reviewed under Part 3 of the Valuation of Land Act on various grounds. For example, under s 34(1)(e) of the Valuation of Land Act an owner can raise an objection on the ground "that lands which should be valued separately have been included in one valuation". The cases cited and relied upon by the Applicant, in particular Attard and Triguboff were against the Valuer-General and sought relief under the provisions of the Valuation of Land Act. They clearly do not assist the Applicant in this matter. [33] The Chief Commissioner was accordingly required to consider the review of the relevant assessment on the basis of a single parcel of land of the various lots included in the valuation by the Valuer-General. The Chief Commissioner is not given any power under the Act to ignore the Valuer-General's determination and create a new set of parcels of land in respect of any parcel of land so constituted by the Valuer-General.
I do not think the decision in McMillan v Commissioner of Land Tax [1972] 1 NSWLR 545 compels a different conclusion. The legislation was in a different form, and the question was whether the taxpayer owned "other land" by reason of the other parcel which was not "separated by physical severance nor in title nor by use nor by occupation" (at 556).
There is also force in the Commissioner's submission, made below and in this Court, that if the plaintiffs were disputing the division of the land into the two parcels, their approach ought to have been to the Valuer-General. I endeavoured to ascertain, during the hearing, how it came about that the land was divided into the two parcels. I was taken to emails and to a lease between the plaintiffs and the childcare centre in 2007, and it was suggested that the division came about by reason of the part of the land leased. The lease was for five years, and registered under the Real Property Act 1900 (NSW), although it is not clear how that was effected when the lease itself does not appear to specify what "part" of the whole land, then being FI 100/1051963, was being leased. Ultimately, it does not matter why two separate parcels were created by the Vauler-General.
There was no error in the determination of the Appeal Panel that the land in Parcel B could be separately assessed under the LTM Act.

(2) Is Parcel B, on the assumption that its only use is for the septic system, entitled to the exemption in s 10(1)(u) of the LTM Act?

This question seems to me to amount to a question of law. The question is whether the land, that is, Parcel B, is the place where children are educated or cared for by the approved education and care service. Determination of the question involves the construction of the exemption, and in particular, the meaning of "land" and "place": Industry Research and Development Board v Bridgestone Australia Ltd (2001) 109 FCR 564 at [50], [53]-[54].
Although "land" is not defined in the LTM Act or the VOL Act, it is defined in s 21 of the Interpretation Act 1987 (NSW) as follows: land includes messuages, tenements and hereditaments, corporeal and incorporeal, of any tenure or description, and whatever may be the estate or interest therein. Both the Macquarie Concise Dictionary of Modern Law and Osborn's Concise Law Dictionary define "messuage" as meaning: A house together with its gardens, orchards and outbuildings.
The question is, therefore, whether the "land" in Parcel B falls within the exemption in s 10(1)(u). Certainly, the exemption requires that the land must be used "solely" for the purpose stated, but before considering that issue it must first be determined if the land is used for the stated purpose at all. Both counsel indicated that there was no authority where this exemption has been considered. There are, however, a number of cases which deal with similar issues, and they can provide guidance on the present enquiry.
In Penrith Rugby League Club Ltd v Commissioner of Land Tax (NSW) [1983] 2 NSWLR 616, the taxpayer was a club which owned a building used for its members' activities. On the other side of the road (League St) from the club was further land owned by the taxpayer which was used as a carpark by club patrons and for other carparking purposes associated with the taxpayer's objects. The taxpayer claimed that the car parking area was exempt from land tax under what was then s 10(1)(g)(iii) of the LTM Act, as land used as the site for a building owned and solely occupied by a club.
The Commissioner did not allow an exemption for the area and the taxpayer appealed to the Supreme Court against the assessment. It was contended by the Commissioner that the concept of a "site" in the exemption could not include land which was physically separated from the land on which the actual building stood.
Section 10(1)(g)(iii) exempted from land tax: …Land owned by…any person…and used or occupied by that person…solely as a site for…a building owned and solely occupied by…a club.
Justice Hunt said (at 619): Is then this car park land used and occupied by the club solely as a site for the club building? It is accepted that the site for or of a building is not limited to the land upon which the walls of the building stand: Royal Sydney Golf Club v Federal Commissioner of Taxation (1942) 6 ATD 235, at 242; Joyce v Commissioner of Land Tax [1973] 1 NSWLR 402, at 411. What additional land is included within the site depends upon the use to which that additional land is put: Commissioner of Land Tax v Christie [1973] 2 NSWLR 526, at 534. The exemption given by s 10(1)(g)(iii) is not restricted to that additional land which is reasonably necessary to the use of the building which attracts the exemption: Christie's case (at 535, 536); nor is it restricted to the immediate curtilage of that building: Commissioner of Land Tax (NSW) v Joyce (at 35). It extends to land which surrounds the building and which is used for purposes ancillary to those of the building itself: Joyce v Commissioner of Land Tax (at 411); Commissioner of Land Tax (NSW) v Joyce (at 35). As it was also put in the judgment of Hardie JA in Joyce's case in the Court of Appeal (at 411), structures and facilities provided in the area surrounding the building and used for purposes which contribute to the more effective use of that building, if held in the same ownership, are to be treated as part of the land forming the site of that building.
His Honour said also (at 622): I see no problem in applying the concept of a "site" to an area which, although physically divided by a road, is nevertheless used as a whole. ...There is, in my view and notwithstanding the presence of League Street, a clear unity in the land used and occupied by the club in the present case. I see nothing wrong in such an area of land being exempted from land tax as the site for the club building. The intention of s 10(1)(g)(iii) is clearly enough not to raise revenue; rather it is to relieve certain community groups from the burden of land tax upon the land used and occupied by them. Such an exemption should not be construed narrowly: Federal Commissioner of Taxation v Top of the Cross Pty Ltd (1981) 81 ATC 4563, at 4571. It is only by the narrowest and the most pedantic of constructions that the car park in question in this appeal can be excluded from that exemption.
In Commissioner of Land Tax v Christie; Commissioner of Land Tax v Shennen; Commissioner of Land Tax v Richmond [1973] 2 NSWLR 526 each of the taxpayers owned land consisting of more than one lot or parcel of land on which their houses were situated. Section 9(3)(e) of the LTM Act then provided: Where, as at midnight on the thirty-first day of October, one thousand nine hundred and seventy-one or any succeeding year, land owned by a person is used and occupied by that person solely as the site of a single dwelling-house, the taxpayer was entitled to claim a deduction. The section contained a proviso in these terms: This paragraph does not apply to land owned by a person who owns other land….
The question was whether the parcels or portions of land where the dwelling house was not situated constituted "other land" to deprive the taxpayer of the deduction.
Justice Bowen (with whom Jacobs P agreed) said (at 533): Provided there is a unity in the land in question in a physical sense and a unity in what is done in devoting it to the purpose of providing or constituting the site, and provided there is a sufficiently proximate and not too remote connection between the dwelling house and its requirements or the requirements of its users or occupants on the one hand and the whole of the land in question on the other hand, then this element will be sufficiently established to demonstrate "use" as the site of the dwelling house.
Both Hunt J and Bowen JA in their respective cases had made reference to what was said by Herron J in Royal Sydney Golf Club v Federal Commissioner of Taxation (1942) 15 LGR (NSW) 57 at 63: However, it appears to me that the site is not limited to the land upon which the walls of the building stand, and it would extend the lands reasonably necessary to the use of the building as a clubhouse. It would include a reasonable area for parking and garaging motorcars, a reasonable area of lawns and gardens immediately adjacent to the clubhouse, and the area used for a driveway.
Although that case went to the High Court, the four judges who sat were equally divided, with the result that s 23(2) of the Judiciary Act 1903 (Cth) meant that the decision appealed from was affirmed. The judges in the High Court did not either dissent from what Herron J had said nor they did adopt his remarks.
However, in Commissioner of Land Tax for the State of New South Wales v Joyce (1974) 132 CLR 22, Stephen J (who gave the principal judgment) appeared to endorse a similar sentiment to what Herron J had said, by making reference to another High Court judgment of Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610. In Joyce there was a hall on land at Ashfield which was used solely as a meeting place for members of a Christian sect known as the Brethren, with the remainder of the land being used for purposes ancillary to and dependent upon the use of the hall. The exemption in s 10(1)(g) of the LTM Act was one for: Land owned by or in trust for any person or society and used or occupied by that person or society solely as a site for - (i) a place of worship for a religious society, …
Land tax had been assessed on the whole of the Ashfield land and the question was whether the land was exempt by reason of paragraph (g). Justice Stephen (with whom Gibbs and Mason JJ agreed) said (at 35): I accordingly conclude that part at least of the Ashfield land is used by the respondents as a site for a place of worship for a religious society. Nor am I disposed to restrict the area so used to the site upon which the gospel hall itself is erected together with its immediate curtilage. The uses to which other portions of the Ashfield land is put, the vacant land as a car park for those attending services at the hall and as access ways to and from the car park, the buildings as rest rooms for those attending services, as furniture storage areas for equipment used in the gospel hall, as shelters for passengers alighting from cars bringing them to services and as premises for the hall caretaker, all these appear to me to be directly ancillary to and dependent upon the use of the gospel hall as a place of worship. As was said by Hardie JA in the Court of Appeal Division "surrounding land used for purposes ancillary to those of the church building is within the description contained in the exempting provisions"; I agree, with respect, with his Honour's view that this accords with the approach adopted by this court, in a somewhat different context, in Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610 at 626; [1955] ALR 479, the vacant land and buildings to which I have referred all subserve and contribute to the enjoyment of the gospel hall as a place of worship and are a part of the "site for a place of worship".
Although the word used in the LTM Act in relation to the exemptions in those cases was "site", I do not consider there is any difference in the application of those authorities to the word "land" in the present exemption under consideration.
Although the evidence about the use of Parcel B was left in a somewhat unsatisfactory state at the hearing (a matter particularly relevant to considering the third question), the proceedings were conducted on the basis that there was a septic system on Parcel B which serviced the building on Parcel A: Appeal Panel Mourched at [6]. At the hearing of the present appeal, the Commissioner accepted that that was so.
The Commissioner submitted that the authorities to which I have made reference, and others identified by the plaintiffs, concerned other revenue matters or dealt with the issue of a principal place of residence which involved different type of exemptions from what is contained in s 10(1)(u). In that way, it was submitted that they were distinguishable and did not assist in the proper construction of s 10(1)(u).
Whilst it is true that the wording of the exemptions in those cases differed slightly from the exemption under consideration here, the main question in each case was what constituted either the site or the land, and whether such terms should be confined. In my opinion, when regard is had to the definition of "land" in the Interpretation Act, and to what emerges from those cases in ascertaining whether associated land was exempt from land tax, those cases assist me to conclude that where the term "land" and the term "place" in s 10(1)(u) are used, they include land containing ancillary services to the land in respect of which there is an unchallenged exemption. In reaching that view, I have had particular regard to what French J said in Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation (1993) 44 FCR 450 at 457: [A]n exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is not to be given a narrow application. That is precisely the basis for the present exemption, which is for the purpose of encouraging, rewarding or protecting those who operate approved education and care services for children.
Accordingly, if it is established that Parcel B is only used for the septic system, it is entitled to an exemption under s 10(1)(u) of the LTM Act because of its connection with the building on Parcel A.

(3) Did the Appel Panel err by determining that the plaintiffs had not proved that the sole use of Parcel B was for the septic system?

Under s 100(3) of the Taxation Administration Act 1996 (NSW) the applicant for a review has the onus of proving the applicant's case, and as French J said in Diethelm at 457: As a general proposition the taxpayer claiming the benefit of an exemption from the imposition of a tax has the burden of proving the facts necessary to fall within that exemption: Cuming Smith & Co Pty Ltd v Melbourne Harbour Trust Commissioners (1905) 2 CLR 735 at 742; Jackett v Deputy Federal Commissioner of Taxation [1932] SASR 405 at 407.
It was therefore necessary for the plaintiffs to satisfy the Tribunal that the land, that is, Parcel B, was used solely for the provision of an approved education and care service. The highest the evidence rose in proof of this matter consisted of two letters written by lawyers acting for the plaintiffs to Revenue New South Wales.
On 8 October 2019 Brown Wright Stein Lawyers wrote saying (inter alia): Situated on parcel B is the septic system used for the childcare centre. This is the only current use of parcel B. The childcare centre could note be operated without the septic system. Planned development of Parcel B In the interests of transparency, our client confirms that he has submitted a development application to develop part of parcel B into a carpark. No physical activity has yet been conducted on parcel B. … The only current use of parcel B is for the childcare centre.
In a letter of 28 November 2019 from the law offices of Dr Dion Accoto, the following was said: The current use of the rear of the property The rear of the property currently contains part of the septic system which is solely used for the operation of the childcare centre. The rear of the property is not being used for any other purpose. Speaking candidly, our client would like one day make use of that property and has approached counsel by way of a development application, but that is a future use. Land tax is not to be levied on future use. The childcare centre cannot operate without the septic system. There is no sewerage system in place apart from the septic system.
The development application referred to in the letters was for the construction of a commercial commuter carpark, as the Appeal Panel noted at [33] of its decision. In response to those letters the Commissioner tendered exhibits which were identified as R3, R4 and R5, to demonstrate that the plaintiffs had carried out preliminary steps in commercial land development, including test trenches, bore holes and proposed further excavation works. The Commissioner contended before the Tribunal that this evidence contradicted the proposition that Parcel B was not used at all other than for the use for the sewerage treatment facility (Appeal Panel Mourched at [33]).
In response to the evidence contained in those exhibits, the plaintiffs did not adduce any further evidence. The position was, therefore, that there was evidence of preparatory exploratory work in relation to the development application that had been conducted early in 2019. It was accepted that, although the issue concerned the use of the land on 31 December in any given year, a consideration of the land's use during a reasonable period preceding and following the 31 December date is relevant, and six months either side may be a reasonable period: Leda Manorstead v Chief Commissioner [2010] NSWSC 867 at [4].
The Appeal Panel accepted at [47] from what had been said in Leda Manorstead, that for the purposes of s 10AA of the LTM Act, preparatory work for a particular use could amount to the land being used for that purpose. Section 10AA concerns exemption for land use for primary production, but the principle is equally applicable in relation to other uses for exemptions in s 10(1).
The Tribunal at first instance said at [54]: …However, there is no evidence as to any such work not continuing at any time in the following 10 months to 31 December 2019… There is no evidence as to the continuing existence of excavations on Parcel B at or near to 31 December 2019.
Whilst that was certainly an unfortunate way of expressing the problem for the plaintiffs, this Court is not concerned about the reasons of the Tribunal at first instance but about whether an error of the Appeal Panel gives rise to a question of law. In a similar manner, the Appeal Panel said at [53]: Given that the Appellants were pursuing approvals to construct a commercial car park on Parcel B, it may be that such work has occurred earlier in 2019 if continued to 31 December 2019 may have amounted to a competing use, that of the development of the commercial car park.
That was also an unfortunate way of making a finding on the issue because, as the plaintiffs submitted, it involved speculation on the part of the Appeal Panel.
The Appeal Panel's conclusion is better expressed at the following paragraphs: [58] The potential for further works to take place was alluded to in the evidence referred to by the Tribunal and relied upon by the Respondent. In this regard, it is clear that the Tribunal was looking for and regarded it as necessary to discharge the Appellants' burden of proof, specific evidence in the nature of primary facts as to what was being conducted on Parcel B, in particular in and around six months either side of 31 December 2019, but none was forthcoming from the Appellants. [59] In our view, the Tribunal was pointing out that a bald statement in the letters in question that Parcel B was only used for a septic tank for the Childcare Centre located on Parcel A did not condescend to deal satisfactorily with the various factual matters and submissions placed before the Tribunal by the Respondent at first instance including: (a) That there was evidence of the use of Parcel B for preparation for land development; (b) Parcel B was not necessarily used in a manner consistent with the use for a Childcare Centre because it was fenced off from Parcel A; and (c) The letters relied upon did not put forward any evidence as at 31 December 2019 to refute the evidence of development applications and ground works for the development of Parcel B that may have been inconsistent with its sole use as a place where children are educated or cared for; and (d) Finally, there was no evidence before the Tribunal as to the state of trenches, exploratory boreholes and the like on or closer to the date of 31 December 2019. [60] The Tribunal was entitled to regard this state of evidence as being unsatisfactory and insufficient to discharge the onus on the Appellants to demonstrate that commercial land development might not have been one of the uses for Parcel B so as to preclude the application on the Childcare Centre exemption for land tax.
It may be accepted that, in the circumstances, the plaintiffs had the usual difficulty of proving a negative, but instead of endeavouring to do that, at least by an affidavit from one of them providing information about what, if anything, had happened after the preliminary work ceased, they adduced no further evidence, when it was their onus to prove what Parcel B was used for. Even allowing for the fact the rules of evidence did not apply to the proceedings before the tribunal, it is not surprising that the tribunal considered that mere assertions in letters by the plaintiffs' lawyers did not satisfy their burden of proof.
What is of greater significance is the conclusion of the Appeal Panel at [54] and [62], where the Appeal Panel correctly says that the question of the current use of Parcel B at the relevant time was a question of fact and not a question of law.
The plaintiffs submitted, however, that the question is one of law on the basis that the Tribunal took into account irrelevant considerations, being the evidence of the use of the land in the early months of 2019, and, secondly, that on the facts, the only conclusion open on the evidence was that the land was used solely for the provision of an approved education and care service within the exemption of s 10(1)(u).
In my opinion, no question of law was or is involved. The onus was on the plaintiffs to demonstrate what the land was used for on 31 December 2019, having regard to an approximate six month period on either side of that date in accordance with Leda Manorstead. The only evidence that the Tribunal had was the evidence contained in exhibits R3, R4 and R5. Whilst it may be accepted that the rules of evidence did not apply before the Tribunal, that does not have the effect of elevating the assertions contained in the letters of 8 October 2019 and 28 November 2019 to evidence. The proceedings were adversary proceedings and the plaintiffs bore the onus of proof.
In the face of evidence of what was occurring on the land in early 2019, it was open to the Tribunal to conclude that the plaintiffs had failed to discharge their onus that the land was used solely for the provision of an approved education and care service, even accepting that the septic system should be regarded as part of the "land" for the purposes of the exemption. Characterising what the Tribunal did as taking into account irrelevant considerations cannot elevate the question of fact into a question of law. Nor can it be found, on the paucity of evidence available, that the only conclusion open was that the land was used solely for that use.
In Council of the Municipality of Randwick Corporation v Rutledge (1959) 102 CLR 54 Windeyer J (with whom Dixon CJ, Fullagar J and Kitto JJ agreed) said (at 93): The words "exclusively" and "solely" are familiar in fiscal and rating law. Where an exemption from rating depends upon the use of land exclusively for a particular stated purpose, then the use must be for that purpose only. The question arises, for example, when part of the subject land is used for the relevant purpose and another part for a different purpose. The presence of "exclusively", "solely", or "only" always adds emphasis; and is not to be disregarded. When such words are present, it is a question of fact whether the land is being used for any purpose outside the stipulated purpose. (citations omitted)
That decision was followed by Isaacs J in McMillan v Commissioner of Land Tax [1972] 1 NSWLR 545 at 558 in a case involving land adjoining exempted land under the LTM Act.
Accordingly, the Appeal Panel was correct in refusing leave to appeal in the circumstances. Nor was the Appeal Panel in error in upholding the Tribunal's decision that it was not satisfied on the balance of probabilities that Parcel B was solely used as a place where children were educated or cared for. It did so on the basis that the question was one of fact in the first instance, and even when the facts were examined, the tribunal's conclusion was not shown to be in error.
The ultimate question which the Tribunal and the Appeal Panel had before it was whether the land was used solely for the provision of an approved education and care service. That was a question of fact, and there is no right of appeal to this Court from such a determination.

Conclusion

Accordingly, I make the following orders:
Dismiss the amended summons filed 8 March 2023.
The plaintiffs are to pay the defendant's costs of the proceedings.

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: 07 July 2023

Land Tax Management Act 1956(NSW)ss 9, 10, 10AA

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