Ryde Municipal Council v Macquarie University

The local Council seeks to rate the site of this building: the University claims exemption from rates upon two grounds. The only ground which I need consider is that provided by s. 132 (1) (fii) of the Local Government Act, 1919 N.S.W., which exempts "land which is vested in the Macquarie University or in a college thereof, and is used or occupied by the University or college, as the case may be, solely for the purposes thereof". This particular exemption was inserted in the Local Government Act by a provision of the Macquarie University Act, 1964 N.S.W., which was the legislation by means of which this University was established.

The site of the market is vested in but is not occupied by the University: instead it is the various tenants who conduct their respective businesses at the market who are the occupiers. The market has nothing to do with any college of the University. Accordingly, if this ground of exemption is to be applicable, it must be because the market is "used by the University solely for the purposes thereof", within the meaning of s. 132 (1) (fii). This phrase, distilled from the text of par. (fii), contains no terms of art. I shall first seek to determine its meaning according to the ordinary usage of its words and how that meaning bears upon the present facts, doing this without reference to authority. I shall then turn to the authorities to see whether they require that any conclusion different from that suggested by ordinary meaning should be reached.

It is convenient to begin with the word "solely". Does this refer to "University" or, rather, to "used for the purposes thereof": must land be used solely by the University or is it its use which must be solely for University purposes? Positioned as it is immediately before the words "for the purposes thereof", "solely" must, I think, be concerned with the particular use rather than the particular user, with exclusiveness of use for University purposes and not with exclusive use by the University. This is certainly the effect which the particular sequence of the words in the phrase has upon its meaning. With it may be contrasted a phrase containing the same words but in different sequence - "used solely by the University for the purposes thereof". Had that been the wording of the phrase, "solely" would clearly enough have qualified "the University", the user and not the use. As it is in fact worded, the contrary is the case.

This conclusion is supported by an examination of the wording of the remaining exemptions in s. 132 (1). There are in all eighteen of them. Of these, the last six, from (g) to (1), may be put to one side, each is concerned with a quite special case, and hence conform to no particular pattern; the remaining twelve, of which par. (fii) is one, are, however, cast in similar moulds. In each the body in which land is vested is first stated and there follows a description of a particular use, or use or occupation, to which the land must be subject. This description of use is either explicit, for example, "for a public cemetery", or is by reference to the purposes of the owner, as it is in par. (fii), in which case, after identifying the owner, for example, Macquarie University, reference is made to use or occupation by that owner "solely for the purposes thereof". Where the description of use is explicit the word "solely" never appears: "solely" is employed only where the relevant use is described by reference to the purposes of the owner; even in par. (e), where the pattern of drafting is slightly different, this holds true. This fact, that the presence of "solely" in an exemption is coincident with the employment of the owner's purposes as descriptive of the use to which the land must be put, emphasizes the relationship between "solely" and the use in question and the lack of relationship between "solely" and the particular user.

A second and more difficult question of construction concerns the exact meaning of "used by the University". Again a study of the first twelve paragraphs of s. 132 (1) is helpful: wherever the context is such as of itself to point to some particular meaning of "used", it is the meaning of land being made available by its owner for use for a particular purpose, rather than any active personal use by the owner itself, that is conveyed. The exemptions which refer to uses "for a public cemetery" in par. (a), "for a common" in par. (b), "for a public reserve" in par. (c) or "for the purposes of a free public library" in par. (e) illustrate this. The fact that these four exemptions, unlike the other eight, contain an explicit description of the relevant use, instead of simply referring to use "for the purposes" of the specified owner, does not, I think, suggest the adoption of any different meaning of "used" in the case of the other eight paragraphs and the very descriptions of those who may be owners of exempted lands, as appearing in the latter eight paragraphs, themselves suggest that "used" has there such a meaning. It seems a particularly appropriate meaning to apply to the use of land for the purposes of the five tertiary educational institutions referred to in pars (f) to (fiv), whose principal use of land must involve the provision of facilities in which others, the student body, may undertake their tertiary studies.

This distinction that I have sought to draw, between active, personal use of the land by the owner of it and its use by being made available for use by others for a particular purpose, may in any event involve unnecessary refinement of meaning in the present case. By s. 4 (2) of the Macquarie University Act, 1964 the University is incorporated and s. 4 (1) describes the University as "consisting of a Council and Convocation and graduate and undergraduate members". Thus if undergraduates, to whom the University makes land available for their use, are in consequence the active users of that land, this use of it by them will constitute its active, personal use by the University, of which they are a constituent part.

The remaining component of the phrase "used by the University solely for the purposes thereof" consists of its last four words. The identity of that which is comprised in the "purposes" of the University, in the present context of use or occupation of land, is not, I think, to be found in whatever may, in the case of this University, be thought to correspond, however imperfectly, to the objects clause of a company's memorandum of association. It is as unnecessary in this case, as it was in Kathleen Investments (Australia) Ltd. v. Australian Atomic Energy Commission [32] , to examine what distinctions exist between the restraints imposed upon a company by its objects clause and those which affect a statutory corporation because of the limited powers conferred upon it by its constituting Act: the theory and purposes of each are quite different. It is enough for present purposes to conclude that, in determining the "purposes" of this university to which s. 132 (1) (fii) refers, inquiry should not be restricted to the first limb of the function - power dichotomy familiar in the case of entities incorporated by Act of Parliament and of which Macquarie University furnishes an instance.

Section 6 of the Macquarie University Act, 1964 provides that "the function of the University shall, within the limits of its resources, include" the matters set out in three following paragraphs. It is noteworthy that, as the use of "include" in its opening words makes clear, s. 6 does not, in contrast to a company's objects clause, purport to be any exclusive repository; the reference to "the limits of its resources" may also be noted. Of the three paragraphs of s. 6 only the first and third are relevant:

(a) the provision of educational facilities at University standards for persons who being eligible to enrol seek the benefits of such facilities;

(c) the dissemination of knowledge and the promotion of scholarship otherwise than as hereinbefore provided.

(b) may, for the purpose of discharging its functions, provide such facilities for its undergraduates and students and other persons as it deems desirable.

Section 21 confers upon the council of the University a variety of specific powers and the scope of the by-law making power conferred by s. 23 itself indicates the broad reach which the University's functions and powers are intended to have; as, for example, in its grant of power to make by-laws for the establishment and conduct of residential colleges although no mention of the establishment of such colleges elsewhere appears in the Act.

In the present case the provision to students and staff, on the University campus, of those facilities which the market now offers is, in my view, a use of the site of the market "for the purposes" of the University within the meaning of par. (fii) of s. 132 (1): it falls within the specific terms of s. 7 (b) as a provision of such facilities for its undergraduates, for the purpose of discharging its functions, as the University deems desirable. To make good this proposition requires the application of par. (fii) to the facts of this case, a matter to which I now turn.

I have already briefly described the uses to which the market is now put; its history is recounted by the learned primary judge who heard much evidence about it. An area of the campus devoted to commercial, banking and shopping facilities was envisaged from the outset of planning of the University, its purpose being to avoid the need for staff and students to leave the campus in order to visit the nearest similar facilities, situated in suburbs over three kilometres away. The provision of such facilities on university campuses is now common both in Australia and overseas. The planning, development and, ultimately, the fulfilment of the concept represented by the present market building took place under the supervision of the University council. His Honour found that the council was fully entitled to conclude that the existence of these facilities would promote the objects and interests of the University and that in letting portions of the market to the various tenants who now occupy it the purpose was not the deriving of rental income but, rather, that the facilities which the conduct by them of their several businesses would afford might be made available to staff and students. It would, of course, have been astonishing if the fact had been otherwise: the use of university premises, no doubt erected at the public expense, for the purpose simply of deriving rental income is not lightly to be imputed to a university council.

It is to this complex of facts that the phrase "used by the University solely for the purposes thereof" must be applied. That the market and its site is in fact made available by the University for the purpose of providing commercial and shopping facilities for staff and students cannot be doubted; that represents the mode in which the land is "used" within the meaning of that word in par. (fii). This use of the land by the University is the sole use which it makes of it. The fact that it receives rent from the tenants of the market does not detract from the exclusiveness of this use: it is, in my view, and in the light of the above findings of fact, no more than an incident of this exclusive use. The facilities available at the market are just such "facilities for its undergraduates and students and other persons" (s. 7 (b)) as one might expect the council of a university established in recent years to regard as desirable for the purpose of "discharging its functions" and the fact is that the council of this University has indeed at all times been of this view. The site of the market is, accordingly, in my view, land which is used by the University solely for the purposes thereof within par. (fii) and is therefore exempt from municipal rates. The fact that rent is received from tenants is irrelevant, as is the fact that each of the several tenants may be said to make use of the particular portion of the market which is leased to it. This use is, like the receipt of rent by the University, no more than an incident of the use of the site for the provision of appropriate facilities to staff and students, which in turn is a proper purpose of the University.

It remains to see whether any authorities stand in the way either of my interpretation of the meaning of par. (fii) or of my mode of application of it to the facts of this case. First as to meaning: I take the components of the phrase "used by the University solely for the purposes thereof" in the same order as previously. "Solely" and its equivalents in comparable legislation have been the subject of much judicial commentary but for present purposes it is enough to refer to two cases only. In Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation [33] the question whether land was used "exclusively for charitable purposes" was in issue and it was held that the sale of produce grown at a training farm for delinquent boys in no way prejudiced the land's exemption from rates: "it would be fantastic to hold that the land would not be ratable if the appellant destroyed or gave away the surplus products resulting from such trading that remained after satisfying the needs of the inmates but that it would be ratable if it disposed of such surplus at a profit and used that profit in aid of the revenues of the institution": (per Dixon C.J. and Williams and Webb JJ. [34] ). The commercial activity involved in the sale of produce was "merely incidental to the pursuit on the land of the charitable objects of the occupier" [34] . So here the receipt of rents by the University is likewise incidental to the use of the Market for the purposes of the University. In the much cited judgment of Windeyer J. inRandwick Corporation v. Rutledge [36] , his Honour spoke of the use of "solely" and "exclusively" as familiar in rating law and as adding emphasis, its function being to exclude cases where land is used for purposes which are "collateral or independent, as distinct from incidental to the stipulated use" [37] . Applying this to the present case, there is, in my view, no element of collateral or independent purpose present in this case: the only use made of the market site by the University is in the provision of facilities to staff and students.

1. (1952) 85 C.L.R. 159. 2. (1952) 85 C.L.R., at p. 171. 3. (1952) 85 C.L.R., at p. 171. 4. (1959) 102 C.L.R. 54, at p. 93. 5. (1959) 102 C.L.R. at p. 94.

Then, as to the words "used by the University" for its purposes, it is a truism that "use" is not a word having any single, precise meaning. It is "a word of wide import and its meaning in any particular case will depend to a great extent upon the context in which it is employed" per Taylor J. in Newcastle City Council v. Royal Newcastle Hospital [38] . On appeal in that case [39] Lord Denning, speaking for their Lordships, equated use of land with the deriving by the user of an intended advantage from the land. Thus an owner might use land "by keeping it in its virgin state for his own special purposes". Here the advantage which the University intends to derive from the market is the furtherance of its purposes by the provision to staff and students of those facilities which the market now affords them. This is just such a use as par. (fii) contemplates. In the Randwick Corporation Case [40] Windeyer J., speaking of used in s. 132 (1) (c), described it as referring "to the actual use to which the land is put by the persons who in law control it for the time being". There is, I think, no marked conflict between this meaning and the sense in which I have interpreted used in par. (fii), as meaning the particular use for which land is made available by its owner. In this regard the language of Pennycuick J. in Parker v. Ealing Borough Council [41] is in point. His Lordship, concerned with an exemption in a rating statute for playing fields occupied for the purposes of clubs, treated "for the purposes" as signifying "carrying on the activities of", a concept which I regard as akin to that which I have adopted in the meaning which I would give to the reference to use of this land by the University for its purposes.

1. (1957) 96 C.L.R. 493, at p. 515. 2. (1959) 100 C.L.R. 1, at p. 4; [1959] A.C. 248, at p. 255. 3. (1959) 102 C.L.R., at p. 88. 4. [1960] 1 W.L.R. 1398.

There are a number of cases in which the letting of premises has been held to disqualify them from being regarded as "used" by their owner for particular purposes which would earn exemption from rates or land taxes. They are, however, cases in which the only connexion between the letting and the purposes of the owner has been the application to those purposes of the rent received from tenants. They provide a clear instance of a collateral or independent use of land such as was spoken of by Windeyer J. in the Randwick Corporation Case [43] . The judgment of Sugerman J. in Young Men's Christian Association v. Sydney City Council [44] , earlier in time that that of Windeyer J., offers a detailed analysis of the problem and clearly distinguishes between land uses which are no more than "concomitant, or ancillary or incidental" to purposes specified in s. 132 (1) and others which are "additional or collateral" thereto. His Honour said that the use of land by a charity, albeit involving the receipt of money or even of net profits, would not necessarily disqualify the land from rate exemption unless what was involved was "the pursuit of some merely additional or collateral non-charitable activity whose profits are applied in aid of the charitable purpose". Had the learned primary judge concluded that in the present case the University had erected the market and granted leases of it so as to earn income from it, in effect using its site as a rent-producing investment, it would have been of no avail that the rent received was applied to University purposes. Long-established authorities such as Commissioners of Taxation v. Trustees of St. Mark's Glebe [45] would stand in the way. However the judge's findings of fact are quite to the contrary and disclose a situation in which the receipt of rental income is no more than incidental to the pursuit of a purpose of the University.

1. (1959) 102 C.L.R., at p. 94. 2. (1954) 20 L.G.R. (N.S.W.) 35, at pp. 44-45. 3. [1902] A.C. 416.

In Waverley Municipal Council v. New South Wales Board of Jewish Education [46] the leasing by a public charity of land owned by it to an employee to serve as his residence was held to exclude the land from exemption to rates under s. 132 (1) (h). It so operated because use as a residence was "merely additional or collateral to the purposes which characterize the Board as a public charity" (per Herron J. [47] ). With the facts of that case may be contrasted the lettings in the present case, which are undertaken exclusively and directly in the course of providing facilities to staff and students. Many facilities on a University campus, from car parks to cafeterias, from cloakrooms to barber shops, can no doubt be conducted in different ways: they may be staffed by University servants; franchises may be given to entrepreneurs who staff those facilities, charging for their use and perhaps paying the University for the franchise; leases of the facilities may be granted to tenants. However it is done, the persons operating the facilities in a sense "use" them; certainly a franchise holder does so, having a licence to enter and use the premises in question so that he may provide the facilities in question to those who are to enjoy them. But these uses of University facilities, whether or not involving leases, are but incidental to and in no way detract from the exclusiveness of the use of the facilities by staff and students. On the contrary, they promote that use and may even be found to be essential to the full exercise of that use. They are not instances of "dual use" of land, as it is sometimes called; if an adjective were to be applied to them "subservient" might be appropriate since these uses, from their purpose and effect, subserve the primary uses to which the land is devoted. To say that a University cafeteria, whether franchised or leased to a catering firm, is any the less used "solely" for the provision of meals to students than it would be were it staffed by servants of the University seems to me to involve a distortion of language and to be no less "fantastic" in result than that which was so described in the passage from the Salvation Army Case [48] which I have cited above. The facilities here in question include those afforded by banks, travel agents and retail general stores and it is scarcely conceivable that University servants should be employed in providing them. Yet their provision to staff and students may none the less be a proper purpose of a university whose campus is more or less remote from urban commercial development. Such is the situation at Macquarie University.

1. (1959) 5 L.G.R.A. 122. 2. (1959) 5 L.G.R.A., at pp. 126-127. 3. (1952) 85 C.L.R. 159 at p. 171.

There is, in my view, nothing to be found in the authorities which runs counter to the view which I have formed as to the meaning of par. (fii) of s. 136 (1). Accordingly I conclude that the site of the Markets falls within that paragraph.

I have had the advantage of reading the reasons for judgment prepared by Aickin J. I agree with his conclusion that the appeal should be allowed and with his reasons for that conclusion.

I agree with Stephen J.'s conclusions and reasons. The appeal should be dismissed.

The proceedings out of which this appeal arises were commenced in the Equity Division of the Supreme Court of New South Wales where the respondent Macquarie University ("the University") sought a declaration that certain land, the subject of a rate notice dated 15th February 1974 issued by the Ryde Municipal Council ("the Council"), was not ratable under the Local Government Act, 1919 N.S.W., as amended ("the Act"). The University appealed against the levying of that rate to the Land and Valuation Court pursuant to s. 133 (2) of the Act. For reasons which are referred to in the judgment of Waddell J. in the Equity Division, the parties agreed that the issue should be determined by a proceeding for a declaration in the Equity Division [49] .

A further preliminary point which should be mentioned is that it is now said that the rate notice issued by the Council is invalid because the valuation on which it is based was not made in accordance with the provisions of the Valuation of Land Act, 1916 N.S.W., as amended, which governs the making of valuations by the Valuer-General in relation to land in certain parts of the State, including the municipality of Ryde. Section 26 of that Act deals with circumstances in which more than one parcel of land may be included in a single valuation notice and s. 27 (1) provides that where several parcels of land owned by the same person are not of the same class of tenure or are separately let to different persons, they shall be valued separately. Section 27 (4) then provides that, "Where a part only of a parcel of land is subject to a particular rate, the value of such parcel shall be apportioned so as to show separately the value of that part which is subject to the particular rate." The land now in question forms part of the land owned by the University and is the subject of leases relating only to small portions of that land. It is said this mode of valuation was not followed, but there was obtained from the Valuer-General a valuation only of the area subject of the leases. We were informed after the conclusion of the hearing that it was common ground that the rate as levied was invalidly levied. It was said, however, that if the correct method of valuing had been adopted the issue would be the same, namely, whether the areas the subject of the leases were ratable at all. It was urged, therefore, that the issue in this proceeding was nonetheless a live issue as between the University and the Council because if the Land and Valuation Court were to take the correct step of quashing the rate or the assessment the correct valuation procedure would presumably then be adopted by the Valuer-General and a new rate notice issued in respect of which a fresh notice of appeal would then be lodged.

It can scarcely be regarded as satisfactory that these proceedings have gone through two courts and have now reached this Court without this point being drawn to the attention of the Court. However the written objection to the rate notice did not raise this ground and s. 133 (2) suggests that time has gone by for raising this objection. Accordingly, it seems to me that as the question of ratability has now been argued in full before three courts it is proper for this Court to deal with the appeal on its merits.

The facts relating to the issue are not in dispute and it is convenient to take them from the judgment of Waddell J. with such minor adaptations as reflect only the present stage of the proceedings.

The University was established and incorporated by the Macquarie University Act, 1964. Section 4 (1) provides:

A University, consisting of a Council and Convocation and graduate and undergraduate members, shall be established at Ryde in the State of New South Wales. Section 6 provides that the functions of the University shall include the provision of educational facilities at University standards and the establishment of such facilities as the University deems desirable for the provision of courses of study and the dissemination of knowledge and the promotion of scholarship. Section 21 (1) confers certain powers on the Council. Among these powers are that the Council: "shall have the entire control and management of the affairs and concerns of the University and may act in all matters concerning the University in such manner as appears to it best calculated to promote its objects and interests." The subject land is in a central position on the University campus. It has a frontage to the north-west corner of approximately 202 ft and a depth of approximately 72 ft. It is vested in the University. It has been the subject of a separate valuation by the Valuer-General purporting to act pursuant to the Valuation of Land Act 1916. There is erected on it a separate building having two levels. Portions of this building are leased for commercial purposes. The upper level includes the University Co-op Bookshop, a retail shop conducted by Grace Bros. Pty. Ltd., a chemist shop and an office leased to the Australian Union of Students for the purposes of a travel centre. The lower level includes a branch of the C.B.C. Bank and the Rural Bank, a storeroom used by Grace Bros. Pty. Ltd., a handicrafts and gift shop and an area occupied by the University Sports Association known as "The Union "Downstairs" " which also has in it a shop known as "Dave's Place".

The University claims that the subject land is not liable for rates upon two grounds of exemption contained in s. 132 (1) of the Local Government Act 1919 being: "(d) land which belongs to [a] public charity, and is used or occupied by the charity for the purposes thereof." and "(fiii) land which is vested in the Macquarie University, and is used or occupied by the University solely for the purposes thereof."

The relevant history of the subject land is as follows. Since the initial planning of the University it has always been provided that there should be a section devoted to commercial and shopping facilities enabling the University to avoid the necessity for its students and members of staff to make a special trip in order to obtain access to banking or shopping facilities not provided on the University campus. In order to achieve this object the subject land, which is described as "the market" was placed under the control of the Macquarie University Union pursuant to the terms of its constitution which designates the Council of the Macquarie University as the ultimate supervising authority of the Union's activities. The constitution of the Union, the initial construction of the Union facilities and the building on the subject land and the negotiations with various tenants with respect to the proposed occupancy of the building, which came to be known as the "Union Commercial Centre", all took place entirely under the supervision and subject to the consent of the University council.

The proprietors or managers of the various commercial activities on the subject land have each sworn an affidavit to the effect that their activities are directed to the special needs of the staff and students on the University campus and that their customers do not appear to include members of the general public. It is inherently unlikely that members of the public would patronize any of the shops or commercial premises in question because access to the University is in general restricted to persons who go there for purposes associated with its activities, and the position of the premises in the centre of the campus is, in any event, unlikely to attract members of the public.

It is formally admitted by the University - 1. The various shops on that part of the University's land the subject of the summons, whilst primarily serving the students and staff of the University, are open to the general public and operate with a view to profit. 2. Each of the banks provides a general banking service to its customers including the lending of money, inter alia, for housing.

It is said for the Council that the provision of these facilities is no more than a convenience because there are two adequate shopping centres within a reasonable distance of the campus, namely the Epping shopping centre which is by road some 3.3 kilometres away and the Eastwood shopping centre which is 3.9 kilometres away. However, in each case it would be necessary to travel by private motor vehicle or public transport and the great convenience of having commercial facilities on the campus is undeniable. Mr. Barclay, the Deputy Vice-Chancellor of the University, has given evidence that during the course of approximately twenty-six years' association with universities he has extensively visited universities both in Australia and overseas and that it is a common practice, where a university is not in close proximity to commercial and shopping facilities, for some limited shopping and commercial area to be provided for the convenience of staff and students. In this respect it is to be noted that during the academic year 1974 there were 336 students and members of staff actually resident upon the campus. The total student population was approximately 8,012 and the number of staff employed approximately 1,350. The total area of land owned by the University is some 336 acres and staff and students are about the University campus throughout the whole of the day and until late in the evening during every week day and on most weekends during term time. During vacation there are always a considerable number of staff on duty and usually students attending the University to use its facilities and especially the library.

Copies of the leases were not put in evidence, but they must be assumed to be in a form which creates a leasehold interest in the land and which entitles the tenant to exclusive possession, subject only to such restrictions as may be imposed by the terms of the lease, and subject to compliance with the terms and conditions of the lease. It appears from the affidavits that the leases purport to be granted by the Macquarie University Union, but in this respect, it must have been acting as the agent of the University itself. The Union is, so far as appears, an unincorporated association deriving its authority from the University itself and in no sense of the term having any title to the land in question.

There is no dispute about the nature of the activities of the various tenants nor as to the fact that the great bulk of the customers are students or members of the staff of the University, academic and otherwise, and other persons having some connexion with the University. There is a degree of unanimity of expression in the affidavits sworn by or on behalf of the tenants, which might otherwise have aroused suspicion, but as these points are not in dispute no problem arises.

The relevant provision of the Act is s. 132 which so far as material provides that:

(1) All land in a municipality or shire (whether the property of the Crown or not) shall be ratable except -

(fii) land which is vested in the Macquarie University, or in a college thereof, and is used or occupied by the University or college, as the case may be, solely for the purposes thereof;

The general scheme of the Act so far as rating is concerned is that the rates fall upon the owner of land and that all land is ratable, except in so far as it falls within exemptions which are set out in a lengthy list. Paragraphs (a), (b), (c) and (e) are concerned with land owned by the Crown and the exemptions are expressed in those paragraphs by reference to its use. Paragraph (g) exempts land owned by the Crown, not being let to any person for private purposes, and not being occupied and used by the Crown for an industrial undertaking. In the light of that provision it is not easy to see the purpose of pars (a), (b), (c) and (e), but nothing turns on that. The remaining exemptions are expressed in terms of land vested in or belonging to particular bodies and in those cases the exemption depends upon the land being "used or occupied", or "used and occupied", by that owner, and in most cases with the addition of the words "solely for the purposes thereof". The principal point which was argued is whether the land fell within the exemption in par. (fii) of s. 132 (1) of the Act.

There are a great many cases in which the terms "use" and "occupy" have been discussed in relation to land and premises as used in a variety of Acts, in particular in rating Acts and land tax Acts. The context in which the words have been used has varied greatly and cases decided on one piece of legislation must be examined with great care before being applied to other legislation.

In the field of rating the general tendency has been to treat the expressions "used" and "occupied", when used together, as involving two distinct conceptions, not as synonyms or in a cumulative sense, but as each involving a separate relationship to the land, though in many cases they overlap. However the compound expression "used and occupied" is found both in statutes and in judgments, and is used in s. 132 (1) (h) and (j) of the Act. The true position seems to be that one who occupies land necessarily uses it, while one who uses may, but does not necessarily, occupy. Thus, for example, a licensee may use land without occupying.

I shall begin with the term "occupy" and note first that it is used in relation to land, and in the present case in relation to land which is let by the owner to tenants which are carrying on their own businesses on the land. That relationship is one which normally produces the consequence that the owner is not in occupation, but the tenant is. The grant of a lease involves the grant of the right of exclusive possession to the tenant. Unless a tenant has sublet or otherwise permitted some person to occupy, it is abundantly clear that, as between landlord and tenant, it is the tenant who is in occupation and in possession. It may be that questions could arise as between a landlord and a licensee, or a tenant and a licensee, as to who was in occupation, but that is not the present case. There is ordinarily implied from the relationship of landlord and tenant a covenant for "quiet enjoyment". An implied, as well as an express, covenant for quiet enjoyment secures to the tenant at least the right to exclusive possession of the land as against the landlord and those claiming under him.

The evidence makes it clear that each tenant is in occupation of the relevant part of the leased area and is using it for, and by, carrying on its business thereon, and that the tenant's occupation and possession is exclusive of the University.

I am, therefore, of opinion that the University cannot succeed in these proceedings upon the footing that it is in occupation of these premises at all.

The question is whether it can be said that the premises are "used" by the University "solely for the purposes thereof". As an ordinary matter of language I would not consider it possible to say that land which has been let by the University to a tenant who is in occupation and carrying on his business thereon, can be said to be "used" by the University "solely for the purposes thereof". There can be no doubt that land occupied by a tenant, upon which the tenant carries on its own business, is used by the tenant for its own purposes.

A question arises as to the meaning of the phrase "used" by the University "solely for the purposes thereof". It may mean first that only the University uses it and such use is solely for the purposes of the University, or second, that in so far as the University uses it, such use is solely for University purposes. If it bears the first meaning the University cannot succeed because, even if it is used in the relevant sense by the University, it is also used by the tenants for their own purposes. Thus the use of the land is not solely by the University. In my opinion, that is the correct meaning of the expression. It is, however, necessary to consider the other possible meaning. If it bears the second meaning, two overlapping questions arise, first, does the University use the land at all, and second, does it use it solely for its own purposes? One must therefore ask, what are the purposes of the University?

Sections 6 and 7 of the Macquarie University Act, 1964 provides as follows:

6. The functions of the University shall, within the limits of its resources, include -

(a) the provision of educational facilities at University standards for persons who being eligible to enrol seek the benefits of such facilities;

(b) the establishment of such facilities as the University deems desirable for -

(i) the provision of courses of study, whether at Ryde within the University or elsewhere, for evening students;

(ii) giving instruction to and the examination of external students;

(iii) providing courses of study or instruction at such levels of attainment as the Council deems appropriate to meet the special requirements of industry, commerce or any other section of the community;

(c) the dissemination of knowledge and the promotion of scholarship otherwise than as hereinbefore provided.

(a) shall, as soon as convenient after the commencement of this Act, proceed to provide facilities for study in the disciplines of Arts, Science and Economics; and

(b) may, for the purpose of discharging its functions provide such facilities for its undergraduates and students and other persons as it deems desirable.

For the purpose of this section the University may establish such Faculties, Schools and Departments as it sees fit.

In addition s. 21 confers certain powers on the council, including:

4. (a) Subject to this Act and the by-laws the Council -

(a) may provide courses in Arts, Science and Economics, and such other courses as it deems fit and may confer the several degrees of Bachelor, Master and Doctor, and such other degrees and grant and issue such certificates in the nature of degrees, diplomas or otherwise as it thinks fit;

(b) may appoint and terminate the appointment of academic and other staff of the University;

(c) shall have the entire control and management of the affairs and concerns of the University and may act in all matters concerning the University in such manner as appears to it best calculated to promote its objects and interests;

(g) shall have the control and management of all real and personal property at any time vested in or acquired by the University, and may dispose of real or personal property in the name and on behalf of the University;

It is important to bear in mind the familiar distinction between objects (or purposes or functions) and powers. I would not doubt that the University has power to operate a bookshop or to provide meals for, or sell food to, its staff and students, but equally I would not doubt that those are not part of its objects, purposes or functions as a University. Again there can be no doubt that the University has no power to operate a bank. Even if the University has power to operate a chemist's shop, a travel agency, or a department store, which I would seriously doubt, I am satisfied that not one of its purposes is to do so. The argument, however, is that it is convenient to the University and to its staff and students that these banks and shops should be located in the grounds of the University, and that the same practice is followed in other universities, and those facts again are not in doubt. The question is whether they are enough. In my opinion they are not; none of these activities are purposes of the University in any sense of that term.

It is necessary to examine some of the authorities cited. It is convenient to consider first the relevant cases which have been decided on this Act and directly comparable provisions in rating and land tax Acts in the various States. I begin with Commissioners of Taxation v. Trustees of St. Mark's Glebe [50] , though it is by no means the earliest relevant case. It dealt with certain Glebe lands (being Crown lands vested in trustees for parochial church purposes) partly let on building leases and partly waste. The question was whether the lands let on building leases were "occupied or used exclusively for, or in connection with, public charitable purposes, churches, " within the meaning of s. 11 (5) of the Land and Income Tax Assessment Act 1895 N.S.W.. It may be noted that the exempt purposes are much less strictly confined than in the provision now in question, but the case is important because of what was said about "use". The Privy Council held that the leased land was not exempt from land tax and Lord Davey said [51] :

reading the whole of s. 11, subsection (5), of the taxing Act, their Lordships think that the words point rather to the use and occupation of the land itself, and do not prima facie apply to the use or purpose to which the rents and profits derived from the land may be applied. A private dwelling-house is used and occupied by the owner or lessee of it as a residence for himself and his family, and it would, in the opinion of their Lordships, be a forced construction to say that it was used by the lessors for their own purposes because they apply the rent which they receive in a particular way. If it be said that the land is used by the trustees, though not by the lessees, for the charitable purpose, the answer would seem to be that the land is, strictly speaking, not used by the trustees at all. They have parted with the use and occupation of it during the term of the lease. 1. [1902] A.C. 416. 2. [1902] A.C. 416, at pp. 420-421.

In Council of the City of Newcastle v. Newcastle Hospital [52] it was held by a majority of this Court (and approved by the Privy Council [53] ) that land was "used or occupied by the hospital for the purposes thereof" within the meaning of s. 132 (1) (d) and accordingly was exempt from rating in the following circumstances. The hospital owned some three hundred and twenty-seven acres of land of which some two hundred and ninety-one acres was rough bushland, heavily timbered and in substantially its wild natural condition. On the remaining thirty-six acres the hospital buildings were erected; they and their surroundings occupied a fenced area of seventeen and a half acres and the remaining eighteen and a half acres was outside the fence, and although not physically distinguishable from the three hundred and twenty-seven acres of bushland, was not in fact rated by the Council. No physical use was made of the two hundred and ninety-one acres, but it was proved that that area ensured a clear atmosphere for the treatment of patients, provided psychological advantages for patients, and provided opportunities for future expansion. It is to be noted that there was no suggestion that anyone other than the hospital "used" the land in any way. Williams J. said that, "There can be no suggestion in the present case that the area of two hundred and ninety-one acres was acquired to be left derelict. It was purchased so that it should be occupied by the respondent to the exclusion of anyone else and it is the respondent that is in occupation" [54] . Taylor J. said that the land was "used by the hospital" and that:

The uses to which property of any description may be put are manifold and what will constitute "use" will depend to a great extent upon the purpose for which it has been acquired or created where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient in my opinion, if it is shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land. [55] . In the Privy Council Lord Denning said [56] : An owner can use land by keeping it in its virgin state for his own special purposes legal possession is not the same as occupation. Occupation is matter of fact and only exists where there is sufficient measure of control to prevent strangers from interfering, 1. (1956) 96 C.L.R. 493. 2. (1959) 100 C.L.R. 1; [1959] A.C. 248. 3. (1956) 96 C.L.R., at p. 505. 4. (1956) 96 C.L.R., at p. 515. 5. (1959) 100 C.L.R., at p. 4; [1959] A.C., at p. 255.

In my opinion, nothing in these two cases assists the University in any way. On the contrary, what they decide about "use" is contrary to the arguments for the University and, if they do not require a decision against the application of the exemption, they point strongly against it.

In Randwick Corporation v. Rutledge [57] this Court decided that certain land which was reserved from sale and set apart for use as a racecourse and then granted to trustees who were permitted to use it "as a racecourse, as a racehorse training ground or for any other public amusement or purpose declared by the Governor in Council " was not exempt from rating. The land was leased to the Australian Jockey Club. That Club used the land as a racecourse and admitted the public on race days on payment of reasonable charges and on special occasions permitted selected members of the public to come on the land for parties or the like. The land was also used for the training of racehorses. Members of the Club enjoyed various facilities on the land not available to the public. It was held by this Court (Dixon C.J., Fullagar, Kitto, Menzies and Windeyer JJ.) that the land was not exempt from rating as "land which has been dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purposes of the like nature, and is used for one of those purposes" and that it was not used as a public reserve. Dixon C.J. and Kitto J. agreed with the judgment of Windeyer J. as did Fullagar J. The judgment of Windeyer J. contains a detailed account of the establishment of public reserves and the reservation, appropriation and alienation of the waste lands of the Crown in New South Wales. For present purposes interest in the judgment lies in its discussion of the expression "use" of land and of the words "exclusively" and "solely" in relation to use of land [58] . Speaking of the facts of the case itself he said [59] :

The only way in which the trustees use the land is by leasing it to the Club, to be used by it as a racecourse in accordance with the grant and the Australian Jockey Club Act. Indeed the land is not really used by the trustees at all, for they have parted with the use and occupation of it for the term of the lease. (Commissioners of Taxation v. Trustees of St. Mark's Glebe [60] .) When the Act speaks of land used for a public reserve it is referring to the actual use to which the land is put by the persons who in law control it for the time being. Many of the early cases are there discussed and I do not need to add to Windeyer J.'s account of them. He said [61] : 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 (Nunawading Shire v. Adult Deaf and Dumb Society of Victoria [62] As Kitto J. said in Lloyd v. Federal Commissioner of Taxation [63] , such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use. Even without such words, an exemption from rating based upon use or occupation for a particular purpose or in a particular manner can only apply when the property is so used that it can properly be described as used for that purpose or in that manner, any other user being merely incidental, or at least not inconsistent with such main user. 1. (1959) 102 C.L.R. 54. 2. (1959) 102 C.L.R., at pp. 88-94. 3. (1959) 102 C.L.R., at p. 88. 4. [1902] A.C. 416, at p. 421. 5. (1959) 102 C.L.R., at pp. 93-94. 6. (1921) 29 C.L.R. 98. 7. (1955) 93 C.L.R. 645, at p. 671.

All these observations are in my opinion opposed to the decisions of the trial judge and the majority of the Court of Appeal in this case and to the University's argument. Even if one can say, contrary to the observations which I have quoted above, that the University is using the land subject of these leases, it cannot be said that the land is being used solely for its purposes or that the University's use by letting is solely for the purposes of the University. The land is undoubtedly being used by, and for the purposes of, the tenants, which purposes are by no means identical with those of the University. I think that "use" means physical use and that mere letting does not in this exemption constitute "use". The fact that the University finds the use to which the tenants put the land convenient to it cannot make their use that of the University. The use by the tenants for their own purposes is independent of whatever use (if any) by the University is involved in its letting of the premises; in my opinion it cannot be described as "incidental" to the University's use for its purposes.

In my opinion both the ordinary meaning of the words of the exemption in s. 132 (1) (fii) and the cases to which I have referred are fatal to the exemption claimed by the University.

The University relied on the decision of the Privy Council in Commissioner of Income Tax v. Hanover Agencies Ltd. [64] . Under the income tax legislation of Jamaica a deduction was allowable for "a reasonable amount for exhaustion, wear and tear of any building or structure used by the owner thereof for the purpose of acquiring income". It was held that, where a building was let to tenants and rent received, it was used by the owner for the purpose of acquiring income. In its context the decision appears, with respect, to be inescapable. It is indeed difficult to find another example of how a building itself could be so used, as distinct from being used as a site for the carrying on of a business which itself earns income. I cannot, however, regard it as of any assistance in the construction and application of s. 132 (1) of the Act.

It was argued for the University that the facts showed that the provision of these premises was an integral part of the planning of the University and that the facilities were designed for the use of staff and students and to promote the more efficient use of their time. So much may be granted, but does it follow that such fact showed that there was "use" by the University? It was argued that, unless the letting of the premises denied such use, it did constitute use. It was also said that the obtaining of rent was not a primary consideration, but the fact is that the obtaining of rent was one of the purposes because it was an essential part of the financing of the building. In the present statutory context I would not regard such letting as use by the University, although the letting produced a situation in which the actual use by others was convenient for and planned by the University.

This argument comes close to, but is not the same as, the basis on which Wells J. decided Council of the South Australian Institute of Technology v. Corporation of Salisbury [65] . The case concerned premises leased by the Institute to persons who conducted a bookshop but which were claimed to be "used for the purposes" of the Institute within a rating exemption in s. 5 of the Local Government Act 1934-1972 S.A.. It appeared that there was close collaboration between the staff of the Institute and those operating the bookshop and that the Institute exercised substantial influence over its activities. Wells J. said [66] , "All of those facts, it seems to me, lead to the conclusion that the Book-store, having regard to its essential functions, is part and parcel of the Institute judged by the way in which it actually functions." Although Wells J. points out that the words of the exemption referred to "used for the purposes of the Institute" and not to "used by the Institute for the purposes of the Institute", he held that "the Institute of Technology has, through setting up and authorising the creation and managing of, this book-shop, used the land for the purposes of the Institute of Technology." [84] . That conclusion goes further than was required by the words of the exemption and I am, with respect, unable to agree with it. For reasons which I have set out already I cannot regard the letting of land for use by a tenant as a bookshop or for other commercial purposes of its own (even assuming that there was a covenant requiring such use) which purposes are convenient for the University, as use by the University solely for its purposes. Whether the actual decision of Wells J. can be supported on the ground that the use was for the purposes of the Institute (though not by it or solely for its purposes) I do not need to consider.

1. (1975) 10 S.A.S.R. 225. 2. (1975) 10 S.A.S.R., at p. 230. 3. (1975) 10 S.A.S.R., at p. 235.

Reliance was also placed on par. (d) of s. 132 (1) which provides exemption for "land which belongs to any public hospital, public benevolent institution, or public charity and is used or occupied by the hospital institution or charity, as the case may be for the purposes thereof". It was said that exemption applied because the University was a "public charity". Assuming that to be so it is still necessary to show use or occupation by the University. The reasons I have expressed above show that the land is neither "occupied" nor "used" by the University for its purposes, and accordingly this exemption is not available.

For those reasons I am of the opinion that the premises are not exempt from rating under the Act and that the appeal should therefore be allowed.