Perry Properties Pty Ltd v Chief Commissioner of State Revenue

Court of Appeal (NSW)|2013-04-22|Before: McColl JA, Meagher JA, Preston CJ, Coll JA

Jurisdiction: 9113 Citation: Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADTAP 13 Date of Decision: 2012-04-02 00:00:00 Before: Judge K P O'Connor S Frost J Schwager File Number(s): 119032

Judgment 1McCOLL JA: I agree with Meagher JA. 2MEAGHER JA: At relevant times, the appellant owned and operated a boarding-house on land in Glebe. It commenced that use of the land on 26 January 2006, which was shortly after the date of completion of its purchase. In September 2007, the appellant received from the Chief Commissioner an assessment of land tax for the 2007 tax year. It applied for an exemption from that tax under s10Q of the Land Tax Management Act 1956 (the LTMA) on the basis that the land was used and occupied for low cost accommodation. The Chief Commissioner disallowed that application. He did so upon the basis that the land was not being used and occupied for low cost accommodation in accordance with guidelines approved by the Treasurer. The question at the heart of this appeal is whether the Treasurer can approve guidelines under s 10Q which, by the application of s 10Q(1)(c), have the effect of limiting the operation of the exemption to particular types or instances of low cost accommodation. 3The decision to disallow an exemption was subject to two reviews and appeals in the Administrative Decisions Tribunal. This appeal is from the determination of the second of those appeals: Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADTAP 13. In accordance with s 119 of the Administrative Decisions Tribunal Act 1997, it is limited to questions of law. That decision of the Appeal Panel upheld the second decision of the Tribunal: Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2011] NSWADT 145. By that decision, the Tribunal held that the appellant had not satisfied the requirement in Revenue Ruling LT78 - Exemption - Land Used and Occupied Primarily for a Boarding House - 2007 Tax Year (LT78) that at least 80 per cent of the accommodation that was actually occupied during the 2006 calendar year was occupied by long term residents. In the absence of that requirement being satisfied, the Tribunal considered that the discretionary power to grant an exemption was not engaged. 4Before identifying and dealing with the particular questions raised by the appeal, it is necessary to set out the relevant provisions of the LTMA and LT78 and to describe the different bases upon which the appellant argues that the exemption in s 10Q is available to it.

Relevant provisions of the Land Tax Management Act and the Treasurer's guidelines 5Land tax is levied and paid on the taxable value of land. It is charged on land as owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied: LTMA, ss 7, 8. In this case the relevant taxing date is 31 December 2006. By LTMA, ss 12(1A) and (1B) the appellant was required, in respect of the 2007 tax year, to furnish a land tax return to the Chief Commissioner on or before 31 January of that year; and that return was required to set out or be accompanied by such information about the appellant's land ownership as may be required to complete the return. 6LTMA, s 10Q relevantly provided: "10Q Low cost accommodation-exemption/reduction (1) Land is exempted from taxation under this Act leviable or payable in respect of the year commencing on 1 January 1995 or any succeeding year if: (a) the land is used and occupied primarily for low cost accommodation, and (b) application for the exemption is made in accordance with this section, and (c) the Chief Commissioner is satisfied that the land is so used and occupied in accordance with guidelines approved by the Treasurer for the purposes of this section. (2) The guidelines may include provisions with respect to the following: (a) the circumstances in which accommodation is taken to be low cost accommodation, (b) the types and location of premises in which low cost accommodation may be provided, (c) the number and types of persons for whom the accommodation must be provided, (d) the circumstances in which, and the arrangements under which, the accommodation is provided, (e) maximum tariffs for the accommodation, (f) periods within which tariffs may not be increased, (g) the circumstances in which the applicant is required to give an undertaking to pass on the benefit of the exemption from taxation (or, if subsection (4) applies, the reduction in taxation) to the persons for whom the accommodation is provided in the form of lower tariffs. (3) A guideline may: (a) apply generally or be limited in its application by reference to specified exceptions or factors, or (b) apply differently according to different factors of a specified kind, or both. (4) ... (5) This section does not apply to an owner of land in respect of a tax year unless: (a) the owner applies to the Chief Commissioner for the exemption or reduction, in the form approved by the Chief Commissioner, and (b) the owner furnishes the Chief Commissioner with such evidence as the Chief Commissioner may request for the purpose of enabling the Chief Commissioner to determine whether there is an entitlement to the exemption or reduction." 7The "guidelines approved by the Treasurer" for the purposes of s 10Q(1)(c) are contained in LT78, which was issued by the Chief Commissioner on 23 November 2006, and in Revenue Ruling LT79 - Exemption - Land Used and Occupied Primarily for Low Cost Accommodation - 2007 Tax Year (LT79), which was issued by the Chief Commissioner on the same date. It was not suggested that the guidelines set out in each of those Rulings had not in fact been approved by the Treasurer. 8The guidelines in LT78 provided: "3 The approved guidelines for the 2007 tax year are as follows: (i) land that is used as the site of a boarding-house will be entitled to an exemption from land tax for the 2007 tax year where, during the year ended 31 December 2006, in respect of at least 80% of the accommodation available to boarding-house residents: (a) occupation was by long term residents (a long term resident is considered to be a person who resided at a boarding-house for 3 consecutive months or for any periods totalling 3 months); and (b) where full board and lodging was provided, the maximum tariff charged was no more than: $269 per week for single accommodation or $450 per week for married or shared accommodation or where less than full board and lodging was provided, was no more than: $180 per week for single accommodation or $300 per week for family or shared accommodation (ii) where the requirements of paragraph 3(i)(a) above could not be met, land used and occupied primarily for a boarding-house may still qualify for exemption provided: (a) at least 80% of the accommodation that was actually occupied was occupied by long term residents; and (b) at least 80% of the accommodation available to boarding-house residents was either occupied or was available for occupation at tariffs within the limits shown in paragraph 3(i) (iii) where less than 80% of the accommodation available to boarding-house residents was occupied by long term residents, owners seeking an exemption must provide an explanation of the reasons that this requirement was not met and such circumstances will be considered on a case-by-case basis; (iv) The owner must provide a statutory declaration stating that, in respect of at least 80% of the accommodation available to boarding-house residents, the tariff for full board and lodging during the whole of 2007, will not exceed*; $277 per week for single accommodation or $463 per week for family or shared accommodation or where less than full board and lodging is provided, the tariff will not exceed*: $185 per week for single accommodation or $309 per week for family or shared accommodation. 4. For the purposes of these guidelines, "boarding-house" is considered to mean premises which: (i) are used in the course of conducting a business of letting rooms to boarders or lodgers; and (ii) are used and occupied by at least three (3) long term residents who: (a) are not members of the family of the owner or manager; or (b) are not directors or shareholders or members of the family of a director or a shareholder of a company if the company is the owner; and (iii) are not premises which are licensed under the Liquor Act 1982; and (iv) are not used and occupied by persons who are subject to a Residential Tenancy Agreement under the Residential Tenancies Act 1987." (emphasis in original) 9The guidelines in LT79 were stated to apply to owners of land "who provide low cost accommodation (that accommodation not being licensed premises or a boarding-house)". Because it provided low cost boarding-house accommodation, the appellant did not rely upon the guidelines in LT79 in support of its application for exemption. By their terms, those guidelines entitled owners of land situated within a five kilometre radius of the Sydney GPO to claim an exemption if they provided low cost accommodation by way of tenancy arrangements which were subject to a Residential Tenancy Agreement under the Residential Tenancies Act 1987 and imposed a weekly tariff which did not exceed the maximum amounts specified in paragraph 3(i)(b) of LT79. Those amounts varied depending upon the number of bedrooms for which accommodation was provided. 10Although the appellant does not rely upon or direct submissions to the validity of the guidelines in LT79, it will become apparent that acceptance of its principal argument as to the construction of s 10Q would have the consequence that, in approving the guidelines in LT79, the Treasurer also acted outside the power conferred by that section.

The appellant's application for exemption 11The appellant's application for exemption was dated 24 September 2007 and relied upon paragraph 3(ii) of the guidelines in LT78. It maintained that at least 80 per cent of the accommodation that was actually occupied at its boarding-house during the 2006 calendar year was occupied by long term residents. It also maintained that at least 80 per cent of the accommodation available to boarding-house residents was either occupied or was available for occupation at tariffs which did not exceed the specified maximum amount per week for single accommodation, where less than full board and lodging was provided. That application was accompanied by an occupancy report which identified the persons who had been residents at the boarding-house during the 2006 calendar year. That report set out, in relation to each resident, the period of his or her occupancy and included, where applicable, any occupancy in the period after 31 December 2006 and until about July 2007. 12Paragraph 3(i)(a) of the guidelines describes a "long term resident" as someone who "resided at a boarding-house for 3 consecutive months or for any periods totalling 3 months". The appellant argued that when determining whether a person who was an occupant at any time during the 2006 calendar year occupied as a "long term resident", regard could be had to periods of occupation after 31 December 2006. 13The appellant also argued that if it did not satisfy the requirements of paragraph 3(ii), it was within paragraph 3(iii) which conferred a discretion on the Chief Commissioner to allow an exemption because "less than 80 per cent of the accommodation available to boarding-house residents was occupied by long term residents". 14The outcome of each of these arguments turns on the construction of the guidelines, and specifically the definition of "long term residents" in paragraph 3(i)(a) and the discretion in paragraph 3(iii). The appellant did not argue before the Tribunal or the Appeal Panel that the guidelines in LT78 were invalid or beyond power to the extent that they imposed the "long term residents" requirement or give the Chief Commissioner any general discretion to allow an exemption where he was satisfied that land was being used and occupied for low cost accommodation.

The decision and reasoning of the Appeal Panel 15The Appeal Panel held that the Tribunal was correct to conclude that the appellant was not entitled to an exemption under s 10Q for the 2007 tax year. It reasoned as follows. Section 10Q(1)(c) of the LTMA required that the Commissioner be satisfied that the land was used and occupied for low cost accommodation in accordance with guidelines approved by the Treasurer. The guidelines relied upon were contained in LT78. The appellant did not contend that it satisfied paragraph 3(i) of the guidelines. It relied upon paragraphs 3(ii) and 3(iii). It did not satisfy paragraph 3(ii) because the requirement that "80% of the accommodation that was actually occupied was occupied by long term residents" had to be satisfied in respect of the year ended 31 December 2006. No periods of occupancy before 1 January 2006 and after 31 December 2006 could be taken into account in determining whether occupation by a particular resident was to be counted as occupation by a "long term resident": [2012] NSWADTAP 13 at [25]. 16Paragraph 3(iii) did not apply to give the Chief Commissioner a discretion to grant an exemption in the circumstances of the appellant's case. That paragraph only applied where the requirement in paragraph 3(i)(a) had not been met and the requirements in paragraph 3(ii)(a) and (b) had been met. In that event paragraph 3(iii) provided for the provision of information by the land owner and enabled, on a "case-by-case basis", the exercise of a discretion as to whether the land should be exempted. It was a necessary condition to the exercise of that discretion that the land meet the requirements in paragraph 3(ii). Here those requirements were not met. In the result there was no discretion to grant an exemption: [2012] NSWADTAP 13 at [28], [33]. 17The Appeal Panel did not consider whether the Tribunal was also correct to conclude that the appellant's land was not entitled to an exemption because its use and occupation as a boarding-house in 2006 was contrary to a condition on which an earlier development consent had been granted, and for that reason unlawful: [2012] NSWADTAP 13 at [14], [34].

The issues on appeal 18The appellant's grounds of appeal and arguments raise five questions. The fourth and fifth of those questions were argued before the Appeal Panel. The remaining three were not. The resolution of those three additional questions turns on the construction of s 10Q(1). The respondent does not contend that those questions may not be raised in this appeal, notwithstanding that they were not identified as separate questions of law in dispute between the parties before the Tribunal. 19Those five questions and the grounds of appeal by which they are raised are: (1)Whether in approving the guidelines in LT78 the Treasurer acted beyond the power conferred by s 10Q. It is said that the purpose and object of that power is to assist the Chief Commissioner in being satisfied that the relevant land is used and occupied primarily for low cost accommodation (Grounds 1 and 4). (2)Whether in addressing the applicant's entitlement to an exemption the Tribunal had regard to irrelevant considerations; namely that the guidelines in LT78 were to be treated as equivalent to "binding rules" and that the "long term resident" requirement had to be satisfied. (Ground 2) (3)Whether the Tribunal erred in construing the guidelines in LT78 as equivalent to "binding rules" and in failing to give proper consideration to whether the appellant's land was being used and occupied primarily for low cost accommodation (Ground 3). (4)Whether the Tribunal erred in construing paragraphs 3(i) and (ii) of LT78 as providing that the requirements as to occupation by long term residents could only be satisfied by occupation for periods of at least three months during the calendar year preceding the relevant tax year (Ground 5). (5)Whether the Tribunal erred in construing paragraph 3(iii) of LT78 as not giving the Chief Commissioner a discretion to allow an exemption where less than 80 per cent of the accommodation available to boarding-house residents was occupied by long term residents (Ground 6). 20The respondent has also filed a Notice of Contention by which it argues that the decision of the Appeal Panel should be affirmed on the ground that for use and occupation of land for low cost accommodation to be exempt within s 10Q, that use and occupation must be lawful. The respondent contends that the appellant did not establish that its use of the land in the 2006 calendar year was lawful. Specifically, the respondent says that use during that period was contrary to the terms of an earlier development consent.

The construction of s 10Q and whether the guidelines in LT78 were beyond power (grounds 1 and 4) 21The appellant argues that the object of s 10Q is to provide an exemption in relation to land which is used and occupied primarily for low cost accommodation. Section 10Q(1)(c) provides for the approval of guidelines by the Treasurer. It is contended that the purpose of those guidelines is to assist or enable the Chief Commissioner to be satisfied that land in respect of which an exemption is sought is actually used and occupied primarily for low cost accommodation. The expression "in accordance with guidelines approved by the Treasurer" in s 10Q(1)(c) qualifies "satisfied" and requires that the Chief Commissioner be satisfied in accordance with the guidelines that the relevant land is used and occupied for low cost accommodation. Whilst the guidelines are not delegated legislation, whether their approval was beyond power is to be determined by reference to the same general principles. The implied power conferred upon the Treasurer is circumscribed by the object and purpose for which it was conferred. It does not authorise the approval of guidelines which are inconsistent with the scheme of s 10Q or which are not reasonably proportionate to the achievement of its purpose. Reference was made to various formulations of the tests for invalidating delegated legislation: and in particular, Williams v Melbourne Corporation [1933] HCA 56; 49 CLR 142 at 155 (Dixon J); Morton v Union Steamship Co of New Zealand Ltd [1951] HCA 42; 83 CLR 402 at 410 (Dixon, McTiernan, Williams, Webb, Fullagar and Kitto JJ); South Australia v Tanner [1989] HCA 3; 166 CLR 161 at 165 (Wilson, Dawson, Toohey and Gaudron JJ). 22Two things are said to follow from the application of the principles referred to above. First, a guideline which purports to lay down inflexible requirements by reference to which the Chief Commissioner must be satisfied that land is used and occupied primarily for low cost accommodation is likely to be repugnant to or inconsistent with the provisions of s 10Q because it may exclude land which in fact is used for low cost accommodation. The second is that a guideline which includes as a factor which must be present before the Chief Commissioner can be satisfied that land is used for low cost accommodation, a matter which cannot be relevant to whether that is so, would be repugnant to or inconsistent with the scheme of s 10Q. 23For these reasons it is argued that LT78 is ultra vires. The requirement that accommodation be provided to "long term residents" is not relevant to whether land is used primarily for low cost accommodation and "goes beyond and/or diminishes and derogates from the power" conferred by s 10Q. Alternatively, to impose a requirement of minimum occupancy periods of three months as a determinant of long term residency is a disproportionate exercise of the power and goes beyond what is reasonable. It is also said that if LT78 contains such a provision and is construed as laying down "binding rules" which confer no general discretion on the Chief Commissioner in being satisfied as to use for low cost accommodation, the guidelines are inconsistent with the scheme of s 10Q. 24Each of these arguments takes as its starting point the interpretation of s 10Q(1) for which the appellant contends. A consideration of that question of construction must begin with the text: see, for example, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47]; and the summary of the relevant principles in Griffiths v The Trustees of the Parliamentary Contributory Superannuation Fund [2012] NSWCA 231 at [10]. 25Section 10Q(1) exempts land from taxation if three conditions are satisfied. Those conditions are set out in s 10Q(1)(a), (b) and (c). Paragraph (a) describes an objective state of affairs, namely that the land is used and occupied primarily for low cost accommodation. Paragraph (b) is concerned with a procedural matter. It requires that the application for exemption, which by s 10Q(5) must be made for the section to apply, be made in the form approved by the Chief Commissioner and with such evidence as may be requested in accordance with s 10Q(5)(b). Paragraph (c) requires that the Chief Commissioner be satisfied that the land "is so used and occupied in accordance with guidelines approved by the Treasurer". The expression "so used and occupied" refers to the use and occupation described in s 10Q(1)(a). Understood in this way, paragraph (c) by its terms requires that the Chief Commissioner be satisfied that land, which is used and occupied primarily for low cost accommodation, is used and occupied in accordance with guidelines which describe particular types or forms of low cost accommodation or the circumstances in which it must be provided. If the object of the guidelines had been to provide guidance to the Chief Commissioner in being satisfied that the land was being used in accordance with s 10Q(1)(a), the phrase "in accordance with guidelines" would more naturally have appeared after the words "is satisfied". 26There are other indications in the language of s 10Q which confirm that paragraph (c) is to be read in this way. First, where one condition for exemption is the fact that the land is used and occupied primarily for low cost accommodation (which is the effect of paragraph (a)), there is no good reason for imposing a further condition, framed in the "subjective" form, that the Chief Commissioner be satisfied of that fact. Secondly, the Chief Commissioner, who has responsibility for the general administration of the Taxation Administration Act 1996 (the TAA Act), is given no power to approve or vary the guidelines. They are to be approved by the Treasurer which is consistent with their purpose being to enable the Treasurer to determine which land used and occupied primarily for low cost accommodation is to be entitled to an exemption in any tax year. 27Thirdly, the terms of s 10Q(2) show that their purpose is not to provide guidance as to how the Chief Commissioner might be satisfied of the fact in paragraph (a), but rather to describe types or forms of, or arrangements for, low cost accommodation to which the exemption is to apply. For example, s 10Q(2)(c) and (d) provide that the guidelines may specify the number and types of persons for whom the low cost accommodation "must" be provided or the circumstances in which, and the arrangements under which, the accommodation "is provided". Similarly, s 10Q(2)(g) provides that the guidelines may set out circumstances in which the applicant for exemption is "required" to give an undertaking to pass on the benefit of the exemption to the persons for whom the accommodation is provided. 28This is also apparent from the terms of s 10Q(3) which provide that the guidelines may operate by inclusion or exclusion and differently depending upon specified circumstances. That they might do so is only consistent with their purpose being to identify the particular low cost accommodation to which the exemption is to apply. 29By imposing the condition that the Chief Commissioner be satisfied that land answering the description in s 10Q(1)(a) is used "in accordance with the guidelines", the guidelines are able to be used to limit the availability of the exemption so as to encourage particular low cost accommodation outcomes by providing the exemption as an incentive. Reference to the history of this legislation and its context confirms that the guidelines were intended to be used in this way and to allow flexibility in the identification of the low cost accommodation to which the exemption was to apply. 30Section 10Q was first included in the LTMA by the Land Tax Management (Amendment) Act 1989, s 3, Schedule 1(2). As first enacted, its operation was limited by s 10Q(2) to boarding-houses in the metropolitan areas of Sydney, Newcastle and Wollongong. Section 10Q(3)(c) provided for the making of guidelines, and was in similar terms to s 10Q(1)(c) as currently enacted. In the second reading speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 21 November 1989 at 12926), the Minister assisting the Premier, Mr Fahey, said of s 10Q: "As announced in the Budget, it is proposed to provide an exemption from land tax for boarding-houses in the Sydney, Newcastle and Wollongong metropolitan areas, provided they meet approved guidelines. ... The guidelines will be drawn up to ensure that the exemption will apply only to boarding-houses providing long-term accommodation for pensioners and other disadvantaged groups. ... The use of approved guidelines, rather than attempting to specify criteria in the Act or Regulations, will allow a flexible approach to meet changing needs." 31The geographical restriction in s 10Q(2) was removed by the Land Tax Management (Amendment) Act 1991, s 3, Schedule 1(4). In the second reading speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 12 November 1991 at 4253), Mr Souris, the Minister assisting the Premier, noted: "To qualify for the exemption, a boarding-house must meet guidelines approved by the Treasurer. These guidelines include maximum tariffs which are specified as a percentage of the aged pension, the percentage varying from 50 per cent for lodgings only to 75 per cent for full board and lodgings. The tariff limits have restricted eligibility to approximately 150 boarding-houses in 1991, and this has restricted the effectiveness of the measure in providing incentives to maintain the existing stock of boarding-houses. As a consequence, the government has decided to change the approved guidelines to ensure that boarding-houses which allocate a substantial proportion of available accommodation to boarders who are on income support schemes will be eligible for the exemption." 32The current form of s 10Q was inserted in the LTMA by the State Revenue Legislation (Further Amendment) Act 1994, s 4, Schedule 2(3). The Explanatory Note to the Bill for that Act noted, in relation to that amendment to s 10Q: "Under s 10Q of the Land Tax Management Act 1956, land used and occupied primarily as a boarding-house for persons with low incomes is exempt from land tax, subject to guidelines approved by the Treasurer being met. Section 10Q is substituted to extend the exemption to all forms of low cost accommodation, again, subject to the Treasurer's guidelines being met." 33Adopting this construction of s 10Q, the appellant's arguments as to the guidelines being beyond power, in the various ways those arguments have been put, must be rejected. They depend upon the purpose of the guidelines being to give guidance to the Chief Commissioner in being satisfied that land is used and occupied primarily for low cost accommodation. That is not the purpose of the guidelines.

Did the Tribunal err in having regard to any irrelevant considerations? (ground 2) 34This argument depends upon the correctness of the construction of s 10Q(1) urged by the appellant which I have rejected. It proceeds on the premise that the Chief Commissioner, and the Tribunal conducting a review under s 96 of the TAA Act, were required to be satisfied, in accordance with the guidelines approved by the Treasurer, that the land was used and occupied primarily for low cost accommodation. It is argued that in addressing that question each took into account irrelevant considerations, namely treating the guidelines as binding rules and giving effect to the "long term resident" requirements in paragraphs 3(i) and 3(ii) of LT78. This argument is not available when s 10Q is correctly construed. The Chief Commissioner is not exercising a discretionary power in being satisfied in accordance with s 10Q(1)(c) and the purpose of the guidelines is not to provide guidance in the exercise of such a power.

Did the Tribunal err in applying the guidelines as if they were binding rules? (ground 3) 35This argument also depends upon the correctness of the construction of s 10Q(1) which I have rejected. It is that the Chief Commissioner and the Tribunal erred in treating the guidelines as binding rules which did not permit of any discretion in addressing the question whether the land was used and occupied primarily for low cost accommodation. This argument must also be rejected.

Did the Tribunal err in its construction of the "long term resident" requirement? (ground 5) 36The appellant argues that its land was exempt from land tax under paragraph 3(ii) of the guidelines. That paragraph contains, as one of its conditions, that at least 80% of the accommodation that was actually occupied was occupied by "long term residents". The term "long term residents" is defined in paragraph 3(i)(a) as "a person who resided at a boarding-house for 3 consecutive months or for any periods totalling 3 months." 37The appellant argues that the Tribunal and the Appeal Panel erred in construing "long term residents", as defined, as requiring that only occupation for periods of at least three months during the 2006 calendar year could be taken into account when determining occupation by long term residents. It submits that a resident during the 2006 calendar year could qualify for that description by reference to events occurring after 31 December 2006. Thus, a resident who occupied accommodation from 1 December 2006 to 1 March 2007 would be a "long term resident" in relation to the one month period of occupation in December 2006 and that period would be counted for the purposes of paragraphs 3(i)(a) and 3(ii)(a) of LT78. 38Those paragraphs describe ways in which an entitlement to an exemption will or may exist. Paragraph 3(i) uses as the unit of calculation "the accommodation available to boarding house residents" for the relevant calendar year. That accommodation is measured as the number of bed nights available. It requires that a part, namely "at least 80%", of that available accommodation have been occupied by "long term residents" (paragraph 3(i)(a)) and that the maximum tariff charged not exceed the relevant specified rate (paragraph 3(i)(b)). Paragraph 3(ii) uses a different unit of calculation, and applies "where the requirements of paragraph 3(i)(a) above could not be met". That unit of calculation is "the accommodation that was actually occupied" in the relevant calendar year and paragraph 3(ii)(a) requires that a part, again at least 80%, of the accommodation actually occupied have been occupied by "long term residents". 39These calculations are concerned with available and actual occupation of the boarding-house during the calendar year 2006. That is because the guidelines published in LT78 apply only to the 2007 land tax year and provide for an exemption depending upon actual use and occupation during the calendar year which ends on the relevant taxing date, 31 December 2006. 40In their terms paragraphs 3(i)(a) and 3(ii)(a) are concerned with a characteristic of the occupation and not simply with the identity of the occupant. That is consistent with the purpose of the guidelines being to secure occupation having that characteristic during the calendar year immediately preceding the relevant land tax year. For actual occupation to be taken into account in determining whether the 80 per cent threshold of "available" accommodation (in the case of paragraph 3(i)(a)) or accommodation "actually occupied" (in the case of paragraph 3(ii)(a)) has been satisfied, it must in the language of those paragraphs, and giving the expression "long term residents" its defined meaning, be occupation during the 2006 calendar year by persons "who resided at [the] boarding-house for 3 consecutive months or for any periods totalling 3 months." 41This interpretation of the guidelines gives effect to the language of paragraphs 3(i)(a) and 3(ii)(a). It also directs attention only to use and occupation of the land during the calendar year which ends on the relevant taxing date. The interpretation urged by the appellant would permit periods of occupation in that calendar year of less than three months to be counted. It would also require reference to events occurring after 31 December 2006 in order to identify those periods. The consequence of having to do so would necessarily introduce uncertainty into the assessment process because whether or not the "long term resident" requirement had been satisfied could depend upon the time at which the relevant assessment or reassessment was made and the answer to that question could change over time. 42The Appeal Panel did not err in holding that the requirement as to occupation by long term residents could only be satisfied by occupation during periods of at least three months during the 2006 calendar year.

Did the Tribunal err in construing paragraph 3(iii) as providing for the exercise of a discretion only in the event that the requirements in paragraph 3(ii)(a) and (b) were met? 43The Appeal Panel considered that paragraph 3(iii) did not confer an independent discretion to allow an exemption. The appellant argues that each of paragraphs 3(i) to (iv) is freestanding and that paragraph 3(iii) confers a discretion to be exercised on a case-by-case basis where less than 80 per cent of the available boarding-house accommodation was actually occupied by long term residents. 44Paragraphs 3(i), (ii) and (iii) of LT78 are concerned with actual use and occupation in the 2006 calendar year. Paragraph 3(iv) is concerned with proposed use and occupation in the 2007 calendar year. Paragraph 3(i) describes circumstances of actual use in which the land "will be entitled" to an exemption. Paragraph 3(ii) describes circumstances of actual use in which land "may still qualify" for exemption. Those circumstances are that the requirements in paragraphs 3(ii)(a) and (b) are satisfied. Paragraph 3(iii) addresses the position in the event that the requirement in paragraph 3(i) is not satisfied and requires owners seeking an exemption to do certain things. The only persons who could be eligible for such an exemption are those whose land "may still qualify" for exemption because the requirements in paragraph 3(ii) are satisfied. 45This construction of paragraph 3(i), (ii) and (iii) gives those provisions a congruent operation which makes sense. The interpretation suggested by the appellant would render paragraph 3(ii) superfluous because the guidelines would relevantly provide for two circumstances which cover the universe of possibilities. The first is that at least 80 per cent of the available accommodation was actually occupied by long term residents. That circumstance would attract the application of paragraph 3(i) and the exemption if the maximum tariff condition was also satisfied. The second is that less than 80 per cent of the available accommodation was actually occupied by long term residents. That circumstance would attract the operation of the general discretion said to be conferred by paragraph 3(iii). The qualifying factors described in paragraph 3(ii) would be irrelevant. 46An interpretation which gives effect to each of these provisions is plainly to be preferred to one which does not. As McHugh, Gummow, Kirby and Hayne JJ point out in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [71], a "court construing a statutory provision must strive to give meaning to every word of the provision". No clause, sentence or word in a statute or instrument should be treated as superfluous or insignificant if by another available construction they have a meaning and are made "useful and pertinent". The same principle applies to the construction of instruments which operate between parties: Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 at [16]. Whilst this is only a presumption or rule of construction, there is no reason apparent in the language of LT78 or in the context which rebuts its application in this case. 47The Appeal Panel was correct to conclude that paragraph 3(iii) does not confer an independent discretion on the Chief Commissioner to allow an exemption.

Conclusion 48Each of the appellant's grounds of appeal is rejected. This makes it unnecessary to address the Chief Commissioner's Notice of Contention. 49The orders I propose are: (1)Appeal dismissed. (2)Appellant pay respondent's costs of the appeal. 50PRESTON CJ of LEC: I agree with the proposed orders of Meagher JA and his Honour's reasons for rejecting each of the appellant's grounds of appeal. I agree that it is unnecessary to address the Chief Commissioner's Notice of Contention.

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: 29 August 2013

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