1. This dispute involves two properties located in Plumpton, on the outskirts of Melbourne. Each of the properties is owned by the applicant. The Commissioner has assessed land tax on each of these properties for the 2011 tax year and the applicant has appealed against that assessment to this Tribunal.
2. One of the properties is a large parcel of land. I will call this the Beattys Road land. The other property is a small parcel of land. I will call this the Taylors Road land.
3. Section 7 of the Land Tax Assessment Act 2005 provides that land tax is imposed in respect of each year on all taxable land in Victoria. This obligation to pay land tax can only be displaced if the land comes within one of the exemptions in the Act.
4. Section 66 provides for one such exemption. Section 66 provides that land is exempt land if the land comprises one parcel that is wholly or partly in greater Melbourne, none of which is within an urban zone and which is also used primarily for primary production.
5. So section 66 requires the Commissioner to make a positive determination that those three elements are present in order for land to be exempt. The first two elements are not in contention in this case. What is in contention is whether the land at Beatty's Road is able to be described as being used primarily for primary production at the time at which the Commissioner's assessment is made.
6. The applicant says that the Beattys Road land is exempt from land tax under section 66 of the Land Tax Act 2005 because the evidence demonstrates that it is land that was used primarily for primary production as at the relevant date. If I am not persuaded about that then the applicant says that the land is exempt under section 68 of the same Act because it is land that was being prepared for use primarily for primary production.
7. As for the Taylors Road land, the applicant concedes that section 66 of the Act does not apply, as this land has not been actually used for primary production, but the applicant says that section 68 of the Act applies squarely to Taylors Road because the Taylors road land was also being prepared for use primarily for primary production at the relevant time.

1. Section 110 of the Taxation Administration Act 1997 provides that the applicant has the onus of proof in this proceeding to show that the exemption applies. He submitted and the Commissioner agreed that the balance of probabilities was the appropriate standard of proof.

1. The first significant question that arises in this case is the time at which the determination that the land is used for primary production is to be made. Section 66 is written in the present tense. It refers to land that is used primarily for primary production.
2. Neither section 66 nor section 68 actually refer to a particular time period at which the assessment is to be made. However section 36 (1) of the Act provides that the taxpayer is to be assessed on the total taxable value of all taxable land of which the taxpayer was the owner at midnight on 31 December immediately preceding that tax year.
3. The submission of the Commissioner was that the authorities establish and the structure of the Act is such that the assessment date must be midnight on the last day of the year to which the assessment relates. In this case that would therefore be midnight on 31 December 2010.
4. Counsel for the Commissioner submitted that this applied to both section 66 and section 68 equally because the legislation was effectively taking a snapshot at a particular test time. Counsel for the Commissioner conceded that this may in some cases create hardship, but submitted that this was the clear structure of the Act.
5. Both parties agreed that this means that my principal task is to ascertain whether or not the land is exempt land as at midnight on 31 December 2010.
6. However, this was not the end of the argument.
7. The applicant relied upon the decision of Longford Investments Pty Ltd v Commissioner of Land Tax (NSW) (1978)8 ATR 656.
8. At page 660 is the following observation, on legislation similar to that before me;

"I should emphasise it ought not to be thought that the enquiry here to be made is one which involves no more than asking the question, to what use was land put at midnight on 31 December 1974? That would be far too narrow an approach. One must take into account the provisions of section 8 to which I have earlier referred and which provides that land tax is to be charged on land as owned on the relevant date immediately preceding the year for which the land tax is levied. Moreover one would need to look at the use of the land, not only after what I may call the relevant date, but prior thereto as well. In broad terms one must ask oneself, what may fairly be said was the primary use of the property during a period not overlong nor over short within which 31st of December in the relevant year falls?"

1. So, in that case it was said that not just a matter of assessing whether primary production was present on one particular day. Rather what was important was the entire year of the assessment because the Commissioner is called upon to assess the use of the land over that whole year.
2. Relying on that authority, the applicant submitted that I should regard the use to which the land was put in the period leading up to and extending beyond the 31 December 2010 to inform my decision as to what the actual use was on that date.
3. Counsel for the applicant also referred me to Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue (2010) NSWSC 867.
4. The question in that case was whether for the appropriate land tax year the dominant use of the property was for cattle grazing or whether it had a different commercial purpose.
5. At paragraph 4 of the decision the following appears from Gzell.J.

"But enquiry is not limited to the use to which land is put on the relevant date. It extends to a consideration of its use during a reasonable period preceding and following the relevant date."

1. The decision cites Longford as authority for this proposition.
2. The judgement goes on to say;

"In my view, six months before and after the relevant date is a reasonable period for enquiry in this case. It allows for consideration of financial records pertaining to the uses to which the land was put. In the case of Manorstead a six-month period before and after was nominated as appropriate."

1. The applicant submitted that the effect of these authorities was that in making my assessment of the actual use of the land as at the assessment date, I should make my assessment taking into account the activities on the land during a period not overlong or over short, having regard to the particular circumstances and exingencies of the case before me.
2. The Commissioner agreed.

1. The word "primarily" is not defined in the Act.
2. Its meaning was discussed in the Victorian case of Abbott v Commissioner of Land Tax [1979] VicRp 31; (1979) VR 297. In that case the taxpayer sought a primary production exemption. The property consisted of 83 acres of good land, leased for a profit for use as a golf club, and the remaining 126 acres used for grazing, and run at a loss.
3. Lush J cited with approval several NSW authorities, including the observations of Rath.J in Sonter v Commissioner of Land Tax (NSW) (1976)7 ATR 30 at page 35 of the judgment;

"The word primarily, as applied to the case, means that those uses are to be weighed and evaluated. There is no particular touchstone that can be used; all circumstances bearing on the degree, extent and intensity of the uses as land uses are to be considered. The question is one of fact and degree, and one to be approached on a broad, common sense basis."

1. He also referred to the following passage from Greenville Pty Ltd v Commissioner of Land Tax (NSW) 1977 7 ATR 278 at page 280;

"The matter will be one of degree in each case. To claim an exemption under the Act the owner must be able to point to an activity being conducted on the land that will give the land the character of being mainly used for the activity, and will enable a person having to decide the matter to say that the land is, in substance and looked at as a whole, being used for an activity that gives rise to an exemption."

1. There are also relevant observations on this issue in the decision of Saville v Commissioner of Land Tax. (1980)12 ATR 7.
2. This case concerned land originally used as a dairy farm, but at the time of the assessment the only activity on the land was the pasturing of a small number of cattle.
3. At page 10 of the judgment, Roden J said this

"I am of the view that, for any purpose of the land to justify the statement that the land is used primarily for that purpose, it is necessary not only that that use prevail over any competing use, but also that it be sufficiently substantial to prevail over the proposition that the land is primarily to be regarded as unused land."

1. I apply the above principles in the case before me.

1. The applicant purchased each of the properties in July 2010.
2. At the time when the Beatty's Road land was purchased by the applicant, a neighbour, Glenn Harrison, had an arrangement with the previous owners of the property to graze his sheep on the land in return for him spraying the land.
3. Mr Harrison could not reach an agreement with the new owners and his recollection was that it took him a few months after September 2010 to move his sheep. This proceeding has been run on the basis that the sheep were removed from Beatty's Road in about November 2010.
4. Mr Harrison's witness statement was accepted without cross-examination.
5. A witness statement was also introduced and accepted prepared by Sarah North. This witness statement took the matter very little further as it effectively only deposed to meteorological data for the relevant area at the relevant time showing daily rainfall together with aerial views of the parcels of land. Although there was some suggestion in submissions that the aerial views may have shown the presence of sheep on the Beatty rd land, this was not evident to me from the photos and there was no evidence about it so I have disregarded the photos except in so far as they show the location of the land.

1. The main evidence relied upon in respect of each parcel of land was that of Grant Burns who is a principal of Agricultural Resources Pty Ltd (Agricultural Resources).
2. He told me that the business of Agricultural Resources consisted of carrying out farming activities on land owned by various developers. He described being approached on behalf of the applicant to farm the Beatty's Road and Taylor's Road land. Agricultural Resources was at the time simultaneously managing 21 different farms with 13 different owners.
3. He gave evidence of ultimately entering into an agreement with the applicant to farm each of the parcels of land, although his evidence about the agreement, and when it was actually signed was extremely patchy.
4. He said that there was an agreement drawn up between his company and the applicant but he had been unable to find that agreement. He spoke of there being multiple agreements going backwards and forth between himself and Helen Sheedy who was a property agent. He was shown a copy of an undated agreement which had been produced by the applicant to the respondent. He said he didn't know whether that was the final version of the agreement, or when the agreement was signed. He did not have any recollection of the schedule referred to in the agreement or the lease referred to in the agreement. He thought the document shown him was not complete but was unable to say anything further about it. He did recognise his signature on this document. He had no independent recollection of signing any agreement with the applicant.
5. Burns also gave evidence of what he actually did on the Beatty's Road land.
6. In his witness statement he says this;

"I visited the Beatty's rd land on several occasions to assess the land and its water resources. I drove around the land, working out which areas we could crop and which areas may pose problems.

I specifically remember that when I visited the property, a sheep farmer was still in occupation of the land. He had two silos for storing grain to feed his sheep which were unusual because they were uncovered. My staff were involved in discussions with the farmer as to when he would be able to vacate the land, and remove his silos.

I recall commencing works on the land in late November - early December 2010 including assessing the properties water resources, fencing and area we could crop. I recall we also cleaned up around the dam in order for our machines to get close enough to the dam to extract water for when we were to spray the land. We marked out rocky areas to ensure we didn't hit them with the machinery, mapped out unprofitable parcels."

"So we visited the property on multiple occasions, but the rainfall restricted any machinery activity from the beginning of late November until early March."

1. His evidence was thus crucial to my consideration of whether or not the property at Beatty's road was used primarily for primary production at the relevant time or whether either of the properties were being prepared for use for primary production at the time.
2. He also said that his business was growing Canola, wheat, and running livestock. Canola is a winter crop. He said he was accustomed to sow his winter crops in April and harvest them in the next January.

1. As I have said, both parties agree that the evidence of what occurred on the land in the period prior to and after the assessment date must be used to inform a decision as to whether as at 31 December 2010 the land was being used primarily for primary production.
2. Thus the applicant says that when you combine the evidence of Mr Harrison that sheep were being grazed on Beatty's Road until November 2010 with the evidence of Mr Burns that he had done some work on the property in November /December 2010, and then had started to plant the Canola crop in early March 2011, this evidence conclusively shows that as at the assessment date the land was primarily used for primary production.
3. As I understood it there were two different ways in which this argument was put.
4. The first was that this evidence revealed that on the Beatty's Road property there was a clear and uninterrupted transition from sheep farming during 2010 (an activity which comes under the definition of primary production, being the maintenance of animals or poultry for the purpose of selling them or their natural increase or bodily produce) to Canola cultivation in 2011 (an activity which comes under the definition of cultivation for the purpose of selling the produce of cultivation).
5. The second way in which the applicant put the argument was that leaving the issue of sheep farming aside, there was clear evidence from Mr Burns of carrying out aspects of the work required for cultivation of canola in November 2010 and continued that work into 2011 culminating in the planting of the canola crop in March of the next year.
6. The applicant concedes that there was a short break in the actual physical use of the land for canola cropping over the summer of 2010, as the spraying of land for canola production did not commence till February 2011.
7. To address this issue counsel for the applicant took me to various authorities which discussed the concept of land lying unused or fallow, and the concept of hiatus in the use of the land.

1. The principal decision on the concept of land lying unused is that of The Council of the City of Newcastle v The Royal Newcastle Hospital(1959) 100 CLR 1, a decision of the Privy Council. In that case the city council had claimed rates from the hospital and the hospital claimed to be exempt from the rates because it said the land was used or occupied by the hospital.
2. The relevant land was vacant. It consisted of 291 acres of land in its virgin state adjacent to the hospital.
3. The hospital claimed that the land was used in the sense that it kept the atmosphere around the hospital clean and unpolluted, it was a barrier against the approach of factories and houses to the hospital, and it thus provided quiet and serene surroundings for the patients.
4. The Council submitted that an owner of land could not be said to use the land by leaving it unused. The Privy Council said that an owner can use land by keeping it in its virgin state for his own special purposes. At page 4 of the judgment their Lordships explained;

"An owner of a powder magazine or a rifle range uses the land he has acquired nearby for the purpose of ensuring safety even though he never sets foot in it. The owner of an island uses it for the purposes of a bird sanctuary even though he does nothing on it, except prevent people building there or disturbing the birds. In the same way this hospital gets, and purposely gets, fresh air, peace and quiet, which are no mean advantages to it and its patients. "

1. In the same way, the applicant submitted that although as at 31 December2010 the Beatty's land could be described as unused, it was actually being used for the purpose of cultivating canola -that work of actual cultivation awaiting the end of summer.
2. The Commissioner did not quarrel with the authorities relied upon by the applicant but said rather that those authorities had no application on the facts of this case.
3. The Commissioner submitted that there is no issue about the land being unused at the relevant time. The issue was rather whether the applicant could positively prove that it was being used for primary production as at the assessment date.

1. Further, the applicant says that land tax decisions referring to the concept of land lying fallow apply in this case.
2. The crux of this submission was the assertion that the Beatty's road land was lying fallow as it was awaiting the sowing of Canola, a crop that cannot be planted until autumn. As I have said, Burns' evidence was that the break was mandated by the fact that canola is a winter crop, which cannot be planted until autumn.
3. If I was not to accept that argument it was suggested that would mean automatically that all lands on which a winter crop was being sown would not be eligible for the exemption in section 66.
4. To illustrate the argument I was taken in some detail to Greenville.
5. In that case the land that was assessed for land tax had originally been used as a golf course. The course was closed as it had become uneconomical to run.
6. The directors of the golf course investigated alternative uses for the land and decided upon market gardening.
7. However no progress was made with this until 23 December 1974, a week prior to 31 December assessment date, when a small portion of the course was ploughed up and pumpkin seed was planted, with some apparent haste.
8. The taxpayer ultimately did not succeed, as the Court agreed with the commissioner that this was but a token use of the land for primary production.
9. The applicant however relies on the following passage at page 280 of the judgment;

"As counsel for the plaintiff conceded, whether land is being used for primary production within the meaning of the definition must be decided by an objective test - the enquiry is an enquiry into actual land use; it is not to be tested by the intention of the owner.

And in applying that test one must adopt a broad approach and a common sense one. For example it would not be sufficient merely to look at the area actually under cultivation at the relevant time, if cultivation were being relied upon as the use, so as to ascertain whether for example more than half of the whole of land was under cultivation - because of course, that part not under cultivation might be unusable or lying fallow."

"it would probably not be sufficient to look merely at the financial return from the cultivation; the fact that there was none would not of itself warrant a finding that the land was not used primarily for cultivation, nor would the existence of a more rewarding cottage industry carried on by the owner on the land the same time. Likewise the quantity of produce of the cultivation taken from the land would not of itself be a determinant of its primary use. The matter will be one of degree in each case."

"To claim an exemption under the act the owner must be able to point to an activity being conducted on the land that will give the land the character of being mainly use select activity, or that will enable a person having to decide the matter to say that the land is, in substance and looked at as a whole, being used for an activity that gives rise to an exemption."

1. Now I turn to discuss the decision of Saville in more detail. As I have outlined, the land in question in that case had been farming land, but at the time of the assessment that only activity on the land was intermittent grazing of cattle.
2. The passages relied on by the applicant from that case were as follows;
3. From Page 11;

"If upon the relevant date there is no activity relating to any use or claimed use of the land, it is clearly appropriate to look both to the period prior to that date and to the period subsequent to it in order to determine the nature of the use of the land during that hiatus period, as it has been termed. Such a period can arise in any number of different circumstances. If land is allowed to lie fallow before and after periods of cultivation, that clearly, it seems, does not represent an interruption of the use of the land for the purpose of that cultivation, and the land can properly be said at that time to be used for that purpose.

There can be a chance occurrence which causes land to be unused in the sense that there is no relevant activity going on at any particular time. Such occurrence could be the disposal of the owners entire stock which is being replaced, with the replacement stock not yet arrived. In such a case again it seems clear that it would be proper to say that during the hiatus period the land was being used for that purpose."

1. So, applying those passages to the case before me, the applicant says that the delay in planting the canola can be seen to be the land lying fallow until conditions were right for planting, or the delay can be characterised as a hiatus period or a chance occurrence, similar to the hypothetical example given in Saville where the owner had disposed of existing stock before the replacement stock had arrived.
2. The Commissioner conceded that there may be situations where a land is lying fallow and could properly be described as still being used for primary production despite it being in that state as at the assessment date.
3. However the Commissioner argued that that concept could only apply where the period of fallow who was between two occasions of actual use of the land for primary production- so that it could be said that the use justifying the exemption had continued throughout the fallow period.
4. This explains why winter cropping land could take the benefit of the exemption notwithstanding that it would always be lying fallow as at the assessment date. The Commissioner suggested that the only difference between a winter and a summer crop for assessment purposes would be that the exemption would not apply to a winter crop in the first year of cropping.
5. Taking the first way in which the applicant put it its case - that there was a clear and uninterrupted transition from sheep farming to canola cultivation, the Commissioner points out that there is no evidence before me that the sheep farming described by Mr Harrison is properly to be described as giving rise to an exemption for primary production. It is for the applicant to prove this, and it cannot be assumed.
6. Secondly the activity being previously carried out - that is sheep farming -was carried out by a completely different entity unrelated to applicant in any way, and also completely unrelated to canola production.
7. The Commissioner submitted that there being no correlation between these two types of activity, it was impossible to describe the land as being fallow or there being a hiatus in the activity of the land, because both of these concepts were based upon fact situations where activity of the same type had both preceded and post-dated the hiatus or fallow period.
8. The Commissioner submitted that if one were to look at the second way in which the applicant put its case - that is that the work of cultivation of canola had commenced prior to the assessment date and was continuing after the assessment date save for a period required because it was not yet time to plant canola, then that proposition was not actually supported by the evidence of Mr Burns.

1. It was agreed by both parties that mere intention by a taxpayer to engage in primary production is not sufficient to gain the benefit of the exemption. The section is directed at the actual use of the land, not at the intention of either the owner or occupier.
2. But Counsel for the applicant also submitted that in a case such as the one before me, where there was already some evidence pointing to primary production it was appropriate for me to look at intention to clarify the actual use of the land by the owner and Mr Burns.
3. He suggested that the evidence of Burns regarding the negotiation of an agreement with the owner, and Burns evidence that he expected to be able to plant canola on the land, were both objective expressions of the intent of the applicant to farm the property.
4. So, in discerning that intention the applicant says that I can look at the various attempts to enter into an agreement with agricultural resources as illuminating the purpose for which the land was intended to be used.
5. It was suggested that I could also infer this intention from the fact that the applicant allowed Burns onto his land and even leaving the written agreement to one side, from Burns evidence about the steps he actually took to prepare the land for farming in November / December 2010.
6. The starting point is once again the Royal Newcastle Hospital case, with emphasis on this passage at page 4 of the judgment

"True it is that the hospital would get the same advantages if the land were owned by the Crown or by a trust which had determined to keep it in its natural state, or by an owner who was under a restrictive covenant not to build on the land. But the advantages then would be fortuitous or at any rate outside the control of the hospital. Here they are intended, and that makes all the difference."

1. It is that last sentence upon which the applicant placed great reliance.
2. The relevance of intention is also discussed in Saville. As I understand it, the taxpayer argued in that case that the taxpayer had always intended to restock the land with cattle and the reason it had not been done at the relevant time was because it would have been uneconomic for them to do so themselves and because they had been unable to find anyone else to lease the property for agistment. It was therefore argued that this intention of the taxpayer could be used to colour or to explain what the Court otherwise characterised as "slight intermittent and spasmodic" use of land for grazing cattle and so support the taxpayer's contention that the land was in fact being primarily used for primary production at the time.
3. I was taken to some passages at page 11 of the judgement. These are as follows.

"Basically, what is to be determined is the actual use of the land, and this may of course be quite different from any intention that the owners may have as to its later or ultimate use, or indeed any wish that the owners might have as to its use at that particular time. Nevertheless, it having been stated that, even where there is only a single use of the land, that fact alone does not necessarily establish that the land is used primarily for that purpose, I believe that intention is a matter to which regard can properly be had as a matter capable of characterising the use of land in a manner which may not emerge from a consideration simply of the rate of activity or the area of the land actually used or the period for which it is used."

1. By analogy the applicant says that one of the legitimate factors I can use in determining if I am satisfied that the Beattie's road land was being used for the purpose of primary production as at the relevant date is that the applicant had intended that that would be so used.
2. The Commissioner argues that in fact this case falls into the third category of cases discussed in Saville.
3. At page 11 of the judgment the Court contrasts the types of uses I have already outlined with a use which would clearly not be sufficient to give rise to the exemption.
4. The Court says this;

" the third situation in which there would be no activity is one in which a person gives up a particular use of the land for a period for a reason, with the intention of resuming it at a later date. If that were done it seems to me that, irrespective of the intention of the owner, it would be difficult to say that the land was being used for the purpose during that period of discontinuance."

1. The other case relevant to the issue of intention relied on by the Commissioner is Abbott, a decision I have already cited. In that case there was evidence that the elderly owner had been accustomed to running the property as a dairy farm and was still sentimentally attached to this use, but the financial viability of the farm was so imperilled that reluctantly she had made arrangements for most of the land to be leased to a golf club.
2. At page 300 of the judgement Mr Justice Lush said this.

"What is to be examined is the use of the land, and not the subjective attitude of the owner or other persons towards the land or the activities carried on on it. In the present case, I have no doubt that to the appellant the use of the retained land for farming is the only use of the land which is of importance, the golf club lease being an unwelcome development accepted only because it was necessary to enable the real use to continue. Her attitude of mind in this respect, however, is not relevant to the decision which I have to make."

1. The Commissioner also took me to the Queensland case of Carjular Industries Pty Ltd v Commissioner of land tax (1983)9 QLCR 151.
2. In that case the taxpayer argued that land was used solely for agricultural and grazing purposes and therefore came within the relevant exemption of the land tax act. In fact the only activity carried out on the land was the slashing of grass and the bringing in on two occasions of horses to eat the grass. There was no action taken to eradicate the weeds and although the land was ploughed there had been no tilling of the soil.
3. In rejecting the taxpayer's argument the Court said this.

"The use which the amending act envisages must, in my opinion, be bona fide and genuine. I think there must be some degree of substance and intensity attaching to it. If these connotations are absent the use would be mala fide, colourable, facetious or feigned. In such latter circumstances it would not be a use which the act would imply or recognise."

1. The Commissioner says that although he conceded that intention may sometimes play a role in determining actual use, intention has only marginal relevance in this case because the evidence does not establish any actual use until well after the assessment date. The Commissioner suggested that there was unsatisfactory evidence as to when the agreement was actually signed with Agricultural Resources.
2. The Commissioner suggested that this case was most comparable to that of Greenville in that any activities prior to the assessment date were merely token and not a substantial use of the land.
3. He submitted that the truth was that the owner and Mr Burns were waiting for a completely different business to start at the commencement of March 2011.

1. I accept that in an appropriate case, evidence of the intention of the taxpayer or occupier of the land can legitimately be used to assist in properly characterising the actual use of the land.
2. I am however not persuaded that the concepts of land lying fallow or of a hiatus or interruption to land use have any application to the first way in which the applicant puts its case regarding Beattys Road.
3. I have not been referred to any case in which these concepts have been applied in any other way than in explaining a break between two comparable periods of the same type of primary production. I take the view that it is an illogical and strained use of the concept to apply it to render the sheep farming of Mr Harrison part of the primary production relied upon.
4. As to the second way in which the argument is put, I accept that it is arguable that if there is evidence of Canola farming of a real and substantial, not token, nature in the lead up to the assessment date, then the concepts of land lying fallow or hiatus may potentially have some application.
5. I however do not need to go so far as to decide this point, as I have determined to reject the evidence of Mr Burns on this issue.
6. It is true that Mr Burns referred in his witness statement to aspects of use of the land in late November and early December 2010. Even if I accepted the description he gives in his witness statement, I have real doubts about whether that level of activity could be characterised as anything other than token, or in the words of Saville, "slight, intermittent and spasmodic".
7. However when he was cross-examined in the hearing before me Mr Burns certainty about when he had done work on the land and what sort of work it had been completely evaporated.
8. He was very vague about when he had been on the land and what he had done on the land.
9. He remembered meeting Mr Mondous who was the representative of the applicant at some point. He thought he'd met him after he'd signed the agreement but he was not able to say when he'd signed the agreement.
10. He appeared to be saying that because he was managing 21 different farms at the time he was not clear as to exactly what work he was doing on this particular land and when. He answered many questions in general terms, describing his usual practice rather than describing what he had actually done on the property.
11. One of the examples of this was when he was taken to his own email, sent to the owner's agent, Helen Sheedy on 13 January 2011 listing works to be done on the land in terms which seemed to suggest that no work had yet been undertaken. He was unable to provide a credible account of the circumstances surrounding the sending of this email. He was unable to say definitely if any of this work had been done before the assessment date.
12. He said that he could remember spraying the land but he didn't know when.
13. He said he remembered putting lime down and the cultivation of the land but he was unable to say in his evidence when that was. He said he couldn't remember picking up loose stones on the property but he thought that would be the first thing that he did.
14. He said that he didn't keep separate accounts for those parcels of land as distinct from the many other parcels not owned by the applicant which he also farmed.
15. Overall the evidence of Burns was flimsy and his answers inconclusive. Although it was not specifically put to him on cross examination that this evidence was so inconsistent with his witness statement as to cast serious doubt on the accuracy of that statement. This conclusion is inescapable.
16. When that vagueness in the evidence is combined with the vagueness of the written contractual arrangements between Mr Burn's company and the applicant, the inevitable conclusion is that the applicant has not established as a matter of fact that any, let alone any substantial primary production activity took place on the Beatty's Road land in the period before March 2011.
17. The applicant submitted that given that there was unchallenged evidence of Mr Burns and Mr Harrison which was not inherently improbable, I should accept that evidence in the absence of evidence to the contrary.
18. I find that the evidence given by Burns was improbable in some respects - particularly as to the circumstances of signing of the agreement, and further as to his lack of specific recollection of the timing of activities performed by him on the land. But even so, the burden of proof is on the applicant to persuade me that the exemption applies.
19. I find from the evidence that I am not positively satisfied that Mr Burns did do any work on the property until well after the end of December 2010. I am therefore not able to be satisfied that cultivation of the canola crop began prior to 31 December 2010.
20. This means that the notions of fallow, interruption or hiatus are not relevant because those concepts each presuppose that there has been some primary production activity proven on the land which is being interrupted.
21. As to the concept of unused land, I accept the Commissioners contention that the question for me is not whether or not the land is unused. The question is whether cultivation has commenced.
22. Given the findings I have made in respect of the evidence of Grant Burns, the bare evidence that he or Agricultural Resources, or the taxpayer, intended that a canola crop be ultimately planted on the land cannot be used to fill the gap in the evidence that otherwise exists. I find there to be no foundation justifying the use of evidence in that way because there is no credible evidence of actual use of the land at the assessment date.

1. In relation to the Taylors road land the applicant concedes that at the time of purchase of the land the Taylors Road land was not fit for farming without removal of the overgrown vegetation covering the land.
2. The applicant says that this could not be done until April 2011 because it required installation of a firebreak and burning off. This could not be done because of the fire danger period over Christmas 2010.
3. He submitted that the evidence showed that the Taylors road land was being prepared for primary production in the following respects.
4. Firstly he relied upon the preparations for the contract between the owner and agricultural resources that Burns was trying to reach an agreement with the applicant about the preparation of that land for the growing of canola. Secondly he said that the fact that a burn off could not happen at that time of the year meant that that he was unable to plant the canola, but also this property was to be used for winter cropping and I should find it was lying fallow until it could be so planted.
5. The applicant concedes that ultimately no primary production actually took place on the land, but submits that the fact situation outlined above compels a conclusion that as at the assessment date the Taylor's Road land was being prepared for primary production.
6. And the applicant says if I am not persuaded from the evidence that the Beatty's Road land was actually used primarily for primary production in the relevant period, it should be exempt pursuant to section 68 as land being prepared at the relevant time for use for primary production.
7. In making this submission the applicant once again relies on the evidence of Grant Burns as to the entering into of the agreement. The applicant also relies upon the physical removal of sheep from the property and Burns evidence that he was locating parts of the Beatty's Road land on which canola could grow.
8. The Commissioner says that even on the applicant's own contention the land at Taylors Road was not being prepared for use primarily for primary production because there is no evidence of any such preparation of the land itself.
9. The Commissioner says that section makes it clear that the preparation must be physical preparation of the land. The Commissioner submitted that whatever was made of the agreement between the owner and agricultural resources, that agreement could not be classified as preparation under section 68 because preparation under that section means physical preparation rather than preparation in the sense of arranging for appropriate legal formalities. The same argument is put as to the arrangements made to remove Mr Harrison's sheep from land.
10. Further the Commissioner points to the fact that on cross examination Mr Burns was shown photographs of the Taylors land and he recognised them to be photos showing a similar state to the state the land was in at the relevant time. Those photographs clearly show no preparation for cultivation.
11. In relation to each parcel of land, the Commissioner says that even though Mr Burns may have been planning or preparing in a general sense to use the land, he was not as at the 31 December 2010 actually physically preparing the land for cultivation.
12. I accept the Commissioner's arguments in relation to both the Beatty's Road land and the Taylors Road land. First, as to the suggestion that each of these parcels of land was lying fallow prior to a period of cultivation, I accept that this concept can only be appropriately used where a fallow period occurs between two continuous periods of exempt land use.
13. Given the findings I have made in respect to the evidence of Grant Burns, and the way in which evidence of intent can properly be used, the applicant's other arguments in relation to both these parcels of land fall away.
14. Even had his evidence been accepted it is my view that it amounts to little more than evidence of token preparation, or preparation which can be described as slight intermittent and spasmodic.
15. Given the findings I have made as to this and also the inapplicability of the concepts of fallow and hiatus where there is no evidence of otherwise continuous land use, the application for exemption of each parcel of land under section 68 also fails.