The decision of the Commissioner in relation to and assessment no. 22141086 for the 2018 land tax year is confirmed.

1. On 26 September 2018, the Commissioner of State Revenue (Commissioner) referred this application to the Tribunal at the request of the applicants, Mr John Winnett and Mrs Margaret Winnett, under the Taxation Administration Act 1997 (Vic) (TA Act).
2. Mr and Mrs Winnett seek review of the Commissioner's decision[1] to disallow their objection[2] to the Commissioner's assessment of land tax under the Land Tax Act 2005 (Vic) (LT Act) for the 2018 land tax year in respect of a property they jointly own in Salisbury Street, Upper Ferntree Gully (Relevant Property). The notice of assessment was issued on 27 April 2018 and imposed land tax of $295.
3. On 26 February 2019, I heard the application. I heard evidence and submissions from Mr Winnett (who represented himself and Mrs Winnett, who was unable to attend the hearing) and the Commissioner, and then reserved my decision.
4. For the reasons explained below, each of the grounds of objection raised by Mr and Mrs Winnett to overturn the assessment fail. It follows that the determination of, and land tax assessment issued by, the Commissioner must be confirmed.

1. The LT Act imposes land tax in respect of each year on all taxable land in Victoria, with the owner of taxable land being liable to pay land tax.[3]
2. A taxpayer is to be assessed for land tax on the total taxable land of which he or she was the owner on midnight on 31 December immediately preceding that year.[4] Taxable land is defined in section 3 of the LT Act as land that is not exempt land.
3. Under section 54(1)(a) of the LT Act, land owned by a natural person that is used and occupied as the principal place of residence of that person is exempt land.
4. However, section 62A of the LT Act (which was introduced with effect from the 2013 land tax year) provides for a partial assessment if some of the land is leased for residential purposes. It provides that:

If land that would be exempt under this Division contains a separate residence that is leased for residential purposes -

(a) land tax is assessable on the part of the land that is leased for residential purposes; and

(b) section 22 applies, if necessary for that purpose.

1. Section 22(1) of the LT Act applies where:
   • (a) it is necessary to determine the taxable value of part of land (the part) for or in a tax year; and
   • (b) the part was not valued separately as at the relevant date (within the meaning of section 19) in relation to that year; and
   • (c) the whole land was valued separately as at the relevant date.
2. Where section 22 applies, section 22(2) provides that the 'taxable value of the part is the same proportion of the taxable value of the whole land as the area of the part bears to the area of the whole land'.
3. Section 21(1)(a) of the LT Act provides that, for the purposes of assessing land tax, the Commissioner may use 'valuations made by a valuation authority', and section 21(3) deems 'a valuation of occupancy on land made under the Valuation of Land Act 1960 ... to be a valuation of land for the purposes of this Act'.
4. Section 38(2) of the LT Act deals with the assessment of joint owners of land and provides that, subject to certain exceptions which are not presently relevant, 'joint owners of taxable land are to be assessed for land tax on the land as if it were owned by a single person, without regard to ... the separate interest of each joint owner'.

1. Mr and Mrs Winnett acquired the Relevant Property as joint proprietors on 20 June 1984. It contains a large house (no. 9) in which they reside.
2. At some point before 2013, Mr and Mrs Winnett arranged the construction of 4 dwellings on the property, denoted on a plan included in the folder of documents filed by the Commissioner as units 1 to 4.
3. Based on that plan, the 4 units represent 22.9% of the total area of the Relevant Property, with the house at no. 9 representing the balance of 77.1%.
4. The 4 units are leased to third parties for residential purposes, as evidenced by receipts for bonds held by the Residential Tenancies Bond Authority.
5. In 2016, the local council produced site valuations of $65,000 for each of the units. The total site valuations for the four units is $260,000, which exceeds the threshold (of $250,000), above which land tax is charged.[5]
6. Mr and Mrs Winnett lodged objections to the site valuations, which were disallowed by Mr Philip McKenzie of ValueIT Property Valuers - on behalf of the Shire of Yarra Ranges - on 12 September 2017.
7. Mr and Mrs Winnett raised a number of grounds in their objection to the assessment, to which they added in their submissions to the Tribunal. At the hearing, Mr Winnett handed up a document with 5 'addenda' to the letter headed 'reply to legal contentions by Commissioner of State Revenue' filed with the Tribunal by email on 14 February 2019 (which in turn attaches an annotated version of their 'appeal notice of objection to assessment and site value'). The applicants seek to rely on the arguments as set out in those documents.
8. It is convenient to first address the substantive grounds raised by Mr and Mrs Winnett, and then deal with the jurisdictional and procedural grounds they advanced.

Substantive ground 1 - Taxable value of the Relevant Property should be determined in accordance with section 22(2) of the LT Act

1. Mr and Mrs Winnett contend that the taxable value of the Relevant Property, for the purposes of section 62A of the LT Act, should be determined in accordance with section 22(2) of the LT Act.
2. As the total value of the land is $320,000 and the portion of the land leased for the residential purposes is 22.9%, this would mean that the taxable value is $73,280. As that amount is well below the land tax threshold (see paragraph [17]), it would mean that no land tax is payable.
3. The Commissioner responds that the operation of section 62A of the LT Act is clear and that section 22 only applies 'where necessary'. As the 'local council has separately valued the land used for residential purposes it is not "necessary" to apply s 22'.[6]
4. I agree with the Commissioner's submissions. It is clear from the structure of the legislation that the proportional area calculation in section 22 is used as a proxy for the value to be attributed to the areas leased where there is no other basis to determine the value of the leased areas. If it is possible to ascertain the values of the leased areas, by virtue of the relevant valuing authority making a valuation of the separate occupancies, then there is no need to resort to the proportional area calculation.
5. In the hearing, I asked the Commissioner whether the reference in section 62A of the LT Act to land that contains 'a separate residence that is leased for residential purposes' operates to constrain the value of multiple residences being aggregated in the manner in which the assessments have been raised. In this regard, Ms Gory pointed to the Interpretation of Legislation Act 1984 which in section 37 provides that 'unless the contrary intention appears ... (c) words in the singular include the plural'. She said that there was no contrary intention evident on the face of the legislation, rather it must be the case that land tax applies to the aggregated value of the parts of the land leased for residential purposes. I also agree with that submission.
6. Therefore, I dismiss this ground.

Substantive ground 2 - As the applicants jointly own the Relevant Property, the tax threshold should be halved

we are not subject to land tax at all because the SRO applied the tax to land as if one person owned it. Two people own it therefore the threshold should be halved.

1. They further refer to section 38(4) of the LT Act which provides a deduction against land tax assessed for a joint owner 'under section (3) an amount (if any) necessary to avoid double tax'.
2. The Commissioner relies on the 'clear' wording of section 38 that land tax applies to jointly owned land 'as if it were owned by a single person'.
3. I agree with the Commissioner's submission that section 38(1) is clear. Section 38(4) only applies where additional land tax is imposed under section 38(3) (which is not the case here) and it is necessary to make an adjustment to avoid double taxation (which is also not the case here).
4. I dismiss this ground.

Substantive ground 3 - Valuations are wrong or too high

1. Mr and Mrs Winnett raise a number of objections to the disallowance by Mr McKenzie of ValueIT of their objections to the land valuation.
2. However, the difficulty here as pointed out by the Commissioner is that section 97(3) of the TA Act expressly provides that a taxpayer cannot object to an assessment of land tax on any ground relating to the value of the land if the assessment is based on a valuation made by a valuing authority under the Valuation of Land Act 1960.
3. As such, this ground also fails.

Alleged failure of Commissioner to comply with Tribunal's orders

VCAT ordered the respondent the Commissioner of State Revenue to supply various documents to the applicants by on or before 4 February 2019.

This was clearly not done, [postmarks on envelopes are dated 2019 02 05]. All documents received after this date should be dismissed and the appeal by Mr John Winnett and Mrs Margaret Winnett be upheld.

1. The orders that Mr and Mrs Winnett refer to are the consent directions made by the Tribunal on 3 December 2018 which, by order 3, directed that:

On or before 4 February 2019, the respondent shall file with the Tribunal and serve on the applicants:

(a) a statement of evidence of each witness to be called at the hearing; and

(b) a statement of legal contentions; and

(c) any other documents on which the respondent seeks to rely as evidence.

1. The Commissioner handed up a copy of an email sent at 11.03am on 4 February 2019 addressed to Mr Winnett at his iprimus email account, which attached a copy of the Commissioner's Statement of Legal Contentions. Ms Gory indicated that the statement had also been separately posted to each of Mr and Mrs Winnett on the following day (ie. 5 February 2019).
2. In response, Mr Winnett says that this does not comply with the Tribunal's orders as there was no email sent to Mrs Winnett and he did not see or open the email for a number of days after it had been sent.
3. I have reviewed the file and note that, under cover of a letter dated 9 February 2019, Mr Winnett sent the Tribunal 'a completed notice for address of service of documents'. Although signed by Mr Winnett, the letter was headed 'J & M Winnett'. The attached notice provides "the applicants' address for the service of documents", being the Relevant Property and also include an email address being the same email as referred to in paragraph [37].
4. In these circumstances, it is clear there was no failure by the Commissioner to comply with the Tribunal's directions.
5. Further, I note that the orders of 3 December 2018 indicate the consequences of a failure to comply are that 'unless the Tribunal gives leave, neither party may: (a) present a case at the hearing different from that contained in the material filed and served by the party'.
6. The purpose of the orders is to regulate the Tribunal's procedures and ensure procedural fairness to both parties.
7. Once the Tribunal commences a review of an assessment under the TA Act, it seeks to make the correct and preferable decision, in determining whether the assessment (and associated determination) is to be confirmed, reduced, increased or varied.
8. If the Commissioner's material had been served late, then it may have necessitated an extension of time for Mr and Mrs Winnett to file their material, or an adjournment to allow them to properly consider and respond to some new legal argument. However, it does not have the consequence - in and of itself - that the submissions of the Commissioner are to be ignored with the consequence that the taxpayer necessarily succeeds in overturing the assessment.
9. This ground is dismissed.

1. In their annotated 'appeal notice of objection to assessment and site value', Mr and Mrs Winnett submit:[9]

We object to this land tax because we are self funded retirees living off the rent of this single block of land which we purchased in 1984 and it is our superannuation scheme. It should not be subject to land tax.

Contributions were made after tax was payed (sic) so that the money could be withdrawn partially or in full with no further tax payable as we are both above retirement age.

1. The document goes on to quote section 109 of the Commonwealth of Australia Constitution which provides that where a state law is inconsistent with the law of the Commonwealth, the latter prevails to the extent of any inconsistency.
2. This ground was not raised by Mr and Mrs Winnett in their objection. Under section 109 of the TA Act, on review a taxpayer is limited to the grounds of objection unless the Tribunal gives leave to raise additional grounds.
3. The Commissioner says leave should not be granted because the ground is misconceived.
4. I agree with the Commissioner's submission. The Relevant Property is owned by Mr and Mrs Winnett, not by any superannuation fund. That they may use the income generated from the Relevant Property for the purposes of self-funding their retirement is admirable, but it does not bring the arrangements within the Commonwealth superannuation law which would be necessary (but not sufficient) to make good the suggestion the LT Act is subject to the operation of section 109 of the Constitution.
5. Leave is not granted for Mr and Mrs Winnett to rely on this ground. Further, even if leave were to be granted, I would dismiss this ground for the same reasons.

1. Mr and Mrs Winnett raise two estoppel type arguments.
2. First, they submit that:[10]

We object to this assessment as Liam McCare of your office on 2017 12 22 advised he was withdrawing the 2017 assessment [similar to this] and later followed up in writing.

Refer to hardcopy SRO letter of withdrawal of 2018 02 12 signed by Martin Pritchard.

We object to this land tax because we are not subject to land tax at all because you advise us so in your letter of 1/3/2013 following. This letter was written after "Royal Assent of amendment" on 4/12/2012 and it says we are not liable for land tax. The SRO was aware of amendment existence prior to sending this letter.

1. The Commissioner responds to these grounds by saying that:

1. The 2013 letter related to the 2012 land tax year and did not represent that the Relevant Property would never be subject to land tax. 2. The withdrawal of the 2017 assessment was made on a without prejudice basis and the Commissioner expressly reserved his position on future tax years.

1. There is no estoppel against the Commissioner.[12]

1. The Tribunal steps into the shoes of the Commissioner on review and so, there is again no estoppel.
2. The contentions of Mr and Mrs Winnett in relation to estoppel are misconceived. Not only is there no estoppel against a revenue agency in collection of taxes in accordance with law, I do not consider the basis for any estoppel is made out on the facts. There was simply no representations made by the Commissioner of the type alleged. Further, even if there was a representation as to the application of land tax to the 2018 land tax year, it is unclear how Mr and Mrs Winnett can be said to have relied upon such a representation to their detriment.
3. As such, I dismiss this ground.

Policy arguments and concerns about behaviour of State Revenue Office

1. Mr and Mrs Winnett also raised various arguments in relation to policy and concerns about the behaviour of the State Revenue Office in this matter, including that:
   • 'the state government have failed to adjust their minimum threshold values, to land tax site values, to allow for inflation, to which land tax applies';[13] and
   • 'the SRO followed only parts of the acts which suited them and turned a blind eye to everything else'.[14]
2. The Commissioner denies that he is in breach of any obligations as a model litigant and says that matters of tax policy are not appropriate for review.
3. I agree that such matters are not proper grounds of objection for a review of a land tax assessment. In this regard, I refer to the decision of Macnamara DP (as his honour then was) in Cusmano v Commissioner of State Revenue,[15] who observed of similar submissions:[16]

the process of decision making as distinct from the substance of the decision itself is not a matter proper for consideration by the Tribunal in this jurisdiction. The Tribunal looks at the underlying merits of the relevant dispute and reaches its own conclusion as to what is the correct or preferable decision. The Tribunal's powers in carrying out such a review entail affirming, setting aside or varying the relevant re-assessments. ... These elements of the applicants' claim must therefore fail.

Similarly, issues such as the rates at which Land Tax is levied and the application or non-application of indexation factors to valuations are matters for Parliament or to be dealt with by Regulation and not for the Tribunal. These issues likewise can be set aside. The arguments and claims based upon them must fail.

1. As such, I dismiss all of the grounds that relate to matters of policy or alleged failures of the Commissioner.

[6] Commissioner's Statement of Legal Contentions dated 4 February 2019 [21].

[7] Appeal notice of objection to assessment and site value [4] and [9].

[10] Annotated 'appeal notice of objection to assessment and site value' [1].

[11] Annotated 'appeal notice of objection to assessment and site value' [3].

[12] Federal Commissioner of Taxation v Wade [1951] HCA 66; (1951) 84 CLR 105 at 177. This has also been applied in a state tax context: see, for example, Terick Pty Ltd v Commissioner of State Revenue [2015] VCAT 1901 [20].

[13] Annotated 'appeal notice of objection to assessment and site value' [21].

[15] [2010] VCAT 1056.

[16] At paragraphs [35]-[36] (references omitted).