Needham & Anor v Com of Land Tax [1998] QCA 347

(i) land owned by Advance Bank Australia Limited described as lots 1, and 2 on registered plan 4170 ("the Advance Bank land") ; and

(ii) land owned by St George Bank Limited described as lot 3 on registered plan 4170 ("the St George Bank land").

4 The contract for the purchase of the Advance Bank land was completed on 30 March 1995. At the time of completion the building which had been on it when the contract was executed had been partly demolished. Demolition was completed before 30 June 1995.

5 The contract for the purchase of the St George Bank land was completed on 16 June 1995. At the time of completion the buildings which had been on it when the contract was executed had been completely demolished.

6 The Club obtained finance of $24 million for the acquisition and redevelopment of the additional club facilities, obtained all necessary town planning consents and building approvals and called tenders for the construction of the additional club facilities before 30 June 1995. As at midnight on 30 June 1995, lots 1, 2 and 3 were vacant land. Construction commenced shortly after 30 June 1995 (although the building contract was not executed until 28 August 1995), and was completed on or about 30 May 1997.

7 By a notice of assessment dated 18 June 1996 the respondent assessed the Club to land tax on land owned at midnight on 30 June 1995. The assessment has been paid.

8 By a notice of objection dated 15 August 1996 the Club objected to the notice of assessment on the grounds that lots 1, 2 and 3 were exempt in whole or in part from land tax under s 13(1)(vii)(c) (now s 13(1)(g)(i)) of the Land Tax Act 1915. The objection was disallowed and the appellants appealed unsuccessfully to the Land Court of Queensland. Thereafter they appealed to the Land Appeal Court which stated this case for the opinion of the Court of Appeal.

9 The Court of Appeal's opinion is sought on the following point of law:-

"Were lots 1, 2 and 3 exempt from land tax under the Land Tax Act 1915 as at midnight 30 June 1995 on the basis that such land being `land owned by or in trust for' Tattersall's Club was `used or occupied by' the Club `solely as a site for ....a building owned and occupied by' the Club within the meaning of s 13(1)(vii)(c) (now s 13(1)(g)(i)) of the Land Tax Act 1915 ?"

10 Section 13(1)(g) of the Land Tax Act 1915 provides:-

13.(1) The following land shall be exempt from taxation under this Act, namely -

(g) "all 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 building owned and occupied by a society, club, or association, not carried on for pecuniary profit;

(v) a public garden, public recreation ground, or public reserve;

11 It is common ground that the Club is not carried on for pecuniary profit.

12 The contention of the Commissioner is that such a club may obtain exemption from land tax only while there is an actual building owned and occupied by the Club on the land. The contention of the Club is that the exemption relates to land that is a site for a building, as well as land that is the site of an existing building, owned and occupied by the Club. In short, land may qualify for the exemption before erection of a building so long as the Club genuinely intends to erect and occupy a building on its land. There can, in the present case, be no doubt about the Club's intention and commitment to such an objective at all material times.

13 The introductory words in paragraph (g) "all land owned by or in trust for any .... society and used or occupied by that .......... society solely as a site for" govern the succeeding 7 subparagraphs. The expression used is "as a site for'" rather than "as the site of." It contains an element of futurity as well as an element of present use. In Commissioner of Land Tax (NSW) v Joyce [1974] HCA 39; (1973-74) 132 CLR 22 at 29 Gibbs J (as he then was), with whom Mason J agreed, said of similar introductory words in s 10(1)(g) of the Land Tax Management Act 1956 (NSW) -

"The word `site' can refer to a piece of ground intended for building purposes, as well as to one on which a building is constructed. When one speaks of `a site for a church,' rather than of `the site of a church,' the words naturally suggest that the church is to be built, but has not yet been built, on the site mentioned. ...........

I am disposed to think that the exemption conferred by s10(1)(g) is not restricted to land on which something of the kind mentioned in the paragraph is already built or constructed. For example, if the other conditions laid down by the paragraph were fulfilled, land on which a church was in the course of erection, as well as land on which a church had been erected, would be exempt from the tax."

See also Penrith Rugby League Club Ltd v Commissioner of Land Tax [1983] 2 NSWLR 616 at 619

14 Counsel for the respondent submitted that to interpret the exemption as applying to land on which a building is to be constructed would require the importation of such words as "to be" after "building" in sub-para. (i). Such a meaning would naturally be implied from the introductory words "as a site for...". In ordinary language, words such as "to be" might properly be omitted as unnecessary in such a context. The insertion of words such as "whether a building is on the site or not" might be regarded as tautologous. The element of futurity in the words "as a site for" is an important component of the section. It may be noted that the construction advanced by counsel for the respondent would require the words "site for" to be replaced by the words "site of."

15 The respondent relied on the decision of the New South Wales Court of Appeal in Gosford RSL Club Co-operative Limited v Commissioner of Land Tax (NSW) 82 ATC 4505 for the proposition that the exemption is directed to the identity of the user or occupier of a building on a site rather than to the purpose for which the site is used or occupied. He submitted that to construe the exemption as being satisfied merely because the relevant occupier intends to erect a building on the site and to occupy it would be to apply a purposive test to the occupation of the site (ie to have regard to the intention of the occupier) rather than to have regard to the identity of the occupier of the building. He submitted that such a construction would be at odds with the distinction drawn in Gosford RSL Club, which ought to be followed.

16 In Gosford RSL Club the issue before the Court was whether, in order to qualify for the exemption, the land had to be occupied for club purposes, as opposed to other (eg business) purposes. The court had to construe s 10(1)(g) of the New South Wales Act, which was as follows -

"(iii) a building owned and solely occupied by a society, club, or association not carried on for pecuniary profit."

(Emphasis added.) In holding that the land had to be owned and occupied by the club, but not necessarily for club purposes, Hope JA, with whom the other members of the Court agreed, said at pp 4507 - 8:-

"Section 10(1)(g)(iii) is not as well drafted as it might be, but importantly it provides for an exemption in a way which is different to that adopted in respect of the other exemptions given in para (g).The other subparagraphs provide exemptions in respect of 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 an identified purpose, as, for example, a place of worship, a public cemetery, a public garden, a fire brigade, and so on. Subparagraph (iii) is not in this form - the exemption which it provides is not directed to a purpose, but to ownership and occupation - `a building owned and solely occupied by a society, club or association not carried on for pecuniary profit.' The building must be one which can properly be described as owned and solely occupied by (for relevant purposes) a club not carried on for pecuniary profit, but provided it can be so described then, in my opinion, it falls within the exemption."

17 In our view the issue in the present case, whether there must in fact be a building owned and occupied by the Club, is to be answered in favour of the appellants because of the element of futurity in the expression "as a site for." If there were the further question of whether the building need be owned and occupied by the Club for club purposes, then the decision in Gosford RSL Club might be relevant. We say it might become relevant because the provision considered there, s 10(1)(g) of the New South Wales Act, was different from the Queensland subparagraph (i) in that it contained the word "solely" in subparagraph (iii) as well as in the introductory words. That may explain the Court's focus on the occupation of the building. The question that arises in the present case would not seem to have been in the Court's contemplation, that is to say, whether the sub-section may be satisfied by ownership of the land as the site for a building before erection of the building. The Court was concerned with an existing building and naturally focussed upon whether sub-para. (iii) of the section was satisfied, rather than upon the wider question that arises in the present case. By contrast, Gibbs J. in Joyce's case (above) considered the wider question that arises here. We do not think that there is any necessary inconsistency between Gibbs J.'s view and that of Hope J.A. in the Gosford RSL case, but if there is we prefer the former view.

18 Neither party challenged the Commissioner's longstanding practice of granting a partial exemption in respect of a parcel of land by apportioning the valuation, a practice which is consistent with the decisions in Joyce and Pro-Campo Limited v Commissioner of Land Tax (NSW) 81 ATC 4270.

19 In the circumstances the question asked is answered as follows:-

Lots 1, 2 and 3 were exempt from land tax under the Land Tax Act 1915 as at midnight 30 June 1995 on the basis that such land being `land owned by or in trust for' Tattersall's Club was `used or occupied by' the Club `solely as a site for ....a building owned and occupied by' the Club within the meaning of s 13(1)(vii)(c) (now s 13(1)(g)(i)) of the Land Tax Act 1915 .

20 The respondent is ordered to pay the appellants' costs of and incidental to the appeal to be taxed.