Tooth & Co Ltd v Newcastle Developments Ltd [1966] HCA 57

High Court of Australia Barwick C.J. McTiernan, Taylor, Menzies and Windeyer JJ. Tooth & Co Ltd v Newcastle Developments Ltd [1966] HCA 57

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

Sept. 19 Barwick C.J., McTiernan, Taylor, Menzies and Windeyer JJ.

This appeal is concerned with questions relating to the liability of the appellant, as the lessee of certain land and hotel premises at Newcastle, to pay land tax under a covenant in its lease "To pay bear perform and discharge all rates taxes duties burdens assessments and outgoings of every description now charged or imposed or hereinafter to be charged or imposed upon or in respect of the demised premises or upon the lessor in respect thereof". It is common ground that the word "hereinafter" appearing in the covenant is an obvious verbal error and that it should be construed as if that word read "hereafter". So construed the clause seems simple enough but the nature and incidence of the tax imposed in New South Wales since the clause was framed give rise to considerable difficulty.

The lease in question was executed by the parties on 4th May 1955 and on 31st October 1956 there came into operation the Land Tax Act and the Land Tax Management Act of that year. By the first of these Acts it was provided that in respect of the taxable value of all the land owned by any person at midnight on the thirty-first day of October in any year there should be charged, levied, collected and paid under the provisions of the latter Act, land tax for the period of twelve months commencing on the first day of November in that year and at the respective rates set out in the Schedule to the Act. Reference to the Schedule shows that the rates of tax for each one pound of the taxable value of a taxpayer's land increase with the taxable value of the land. It is, therefore, distinguishable from rates levied pursuant to the Local Government Act where they are charged and levied upon individual parcels of an owner's land.