CITATION: Anderson & Ors v Chief Commissioner of State Revenue [2005] NSWADT 107 DIVISION: Revenue Division APPLICANTS PARTIES: Stephen William Anderson, Jeannie McDonald and Wilma Grace Cox RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 046018 and 046055 HEARING DATES: 14/11/2004 SUBMISSIONS CLOSED: 05/09/2005 DATE OF DECISION: 05/13/2005 BEFORE: Block J - ADCJ (Judicial Member) APPLICATION: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Defence Services Homes Act 1918-1973 (Cth) Land Tax Management Act 1956 Adele Grace Pty Ltd v Commissioner of Land Tax (N.S.W.) 78 ATC 4075 Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd [1999] NSWCA 471 CASES CITED: Nelson and another v Nelson and others 1995 HCA 538 New South Wales Aboriginal Land Council v Chief Commissioner of State Revenue [2004] ADT 58 Union Trustee Company of Australia and the Federal Commissioner of Land Tax 20 C.L.R. 526 APPLICANTS REPRESENTATION: P Menadue, barrister RESPONDENT T Lynch, barrister ORDERS: The objection decisions under review are affirmed REASONS FOR DECISION 1 By agreement between the parties, two separate applications for review by the Applicants of decisions by the Respondent disallowing objections against assessments of land tax in respect of 86 Ballina Street, Lennox Head ("the Property") have been linked on the basis that the relevant issues are largely the same. Case number 046018 relates to land tax assessed in respect of the land tax years 1999 to 2003 (both years inclusive) while case number 046055 relates to land tax assessed in respect of the 2004 land tax year. The land tax years to which case number 046018 applies are referred to as the "original years" and the objection decision referable to those land tax years is referred to as the "original decision". The 2004 land tax year is referred to as "2004 year" and the objection decision referable to the 2004 land tax year is referred to as the "2004 decision". The original years and the 2004 year are collectively referred to as the "relevant years", and the term "decisions" refers collectively to the original decision and the 2004 decision. 2 A hearing took place on 14th November 2004 in respect of the original decision. After argument by the parties a timetable for (further) written submissions was agreed as between the parties and directions in accordance therewith were issued. Subsequently, and at a directions hearing heard on 8 February 2005, related specifically to the subsequent decision, it was agreed that the two decisions be linked, and so that written submissions (some of which at that time had not yet furnished) would relate to both decisions. 3 The Tribunal has before it the documents (and in addition supplementary documents) lodged pursuant to Section 58 of the Administrative Decisions Tribunal Act 1997. The Section 58 documents are contained in a folder and separated by 13 numbered tabs; the supplementary documents are also separated by tabs. Since the supplementary documents are numbered sequentially after the documents originally submitted, it is necessary only to refer to the tab numbers. At the hearing in November 2004 the Tribunal admitted as Exhibits A1, A2 A3 and A4 respectively affidavits by Stephen William Anderson ("Anderson" or "the son") executed on 17th May 2004, Hazel Annie Anderson ("Mrs Anderson" or the "mother") executed on 28th May 2004, Wilma Grace Cox ("Cox" or "the daughter") executed on 17th June 2004 and Jeannie Alice Anne McDonald ("Jeannie" or "the granddaughter") executed on 17th June 2004. 4 In addition to the material referred in Clause 3 the Tribunal has been furnished with a number of written submissions by the parties. The Tribunal intends to refer in particular to the Applicants' Further Submissions ("AFS") and the Respondent submissions entitled "Respondent's Submissions pursuant to directions made on 8th February 2005 ("RS2005"). 5 The facts fall within in a comparatively narrow compass. The Property was acquired in 1958 by Mrs. Anderson for a purchase price of 1,800 pounds, and utilising for this purpose an inheritance from her own mother. From and after that date the property was used by the Anderson family as their family holiday home. Exhibit A2 specifies in clause 2 that "we stayed there during school and other holidays". The Lismore Property, acquired in 1969 and referred to below, was the family home until William Anderson (who was the husband of the. Mother, and who is referred to as "Mr. Anderson" or the "father") died in 1978. After his death, the Lismore Property was sold. In 1981 the mother caused the cottage on the Property to be demolished and a house constructed, and she has lived there since that time and at all events during the relevant years. There does not appear to be any dispute as to the fact that during the relevant years, the Property was, assuming that Mrs. Anderson was an owner as defined in Section 3 of the Land Tax Management Act 1956 ("the Act") her principal place of residence ("PPR"). 6 On 7th July 1969 the Property was transferred to the son, the daughter and Helen McDonald ("McDonald") (children of Mr. Anderson and Mrs. Anderson, and referred to collectively as "the children) in consideration of the sum of the $3,000, the receipt of which was acknowledged. That transfer of the Property is referred to in these reasons as the "Property Transfer". Mr. Anderson and Mrs. Anderson are collectively referred to in these reasons as the "parents". 7 Also on 7th July 1969 Mr. and Mrs. Anderson received a transfer entitling them to become (and they did become) the registered owners of a property in Lismore ("the Lismore Property"); to acquire the Lismore Property, Mr. and Mrs. Anderson obtained an advance of $8,000 ("the War Service Loan") from the Director of War Services Homes, and moreover, granted a mortgage over the Lismore Property. 8 The parents were not entitled to obtain the War Service Loan if either of them was the owner of any other dwelling house. This was so having regard to Section 23 of the Defence Service Homes Act 1918-1973 (Cth) formerly the War Service Homes Act 1918 (and referred to as the "War Service Loan Act"). 9 Submissions by the Applicants seek to assert that there is no evidence that the father would not have qualified for the War Service Loan in any event; the provisions of the War Service Loan Act, referred to previously are such that an assertion to this effect cannot be correct. The Applicants' Submissions in Reply contend moreover that there is no evidence that the mother was in any way involved in procuring the War Service Loan. Exhibits A1 and A2 in particular make it clear that the War Service Loan could be procured only if the mother were dispossessed of the Property, and moreover that the mother was not only aware of all relevant implications but that she participated as one of the recipients of the War Service Loan. This is a convenient point at which to note that although the evidence before the Tribunal is contradictory to some extent, there does not appear to be any dispute as to the fact that the Property Transfer was entered into in order to qualify the parents for the War Service Loan, and moreover that the War Service Loan was received by the parents and used by them in respect of the acquisition of the Lismore Property. 10 The Property Transfer, in respect of the Property, to the children by Mrs. Anderson was made, as I have noted, (and ex facie the Property Transfer), for consideration, the receipt of which was acknowledged. 11 On 4th October 2002 McDonald, who was one of the three children, and who was one of the three transferees of the Property died; probate of her will was granted on 13th March 2003 to Anderson and Cox. 12 On 5th March 2003 Anderson and Cox, as executors in the estate of McDonald swore an affidavit as to the assets on McDonald's estate and in which her interest in the Property was valued at $333,333.33. 13 On 18th March 2003 Anderson and Cox consented to the transfer of McDonald's interest in the Property to her daughter Jeannie (the granddaughter) as beneficiary in her (McDonald's) estate. The transfer in Tab 1 of the Section 58 documents makes it clear that McDonald's interest was transferred on this basis. 14 The mother in her affidavit (Exhibit A2) said that the transfer of the Property was effected to enable her husband to qualify for the War Service Loan, but that notwithstanding the transfer the Property "would still be mine". 15 The son in his affidavit (Exhibit A1) said that the Property Transfer was made to enable his parents to obtain a War Service Loan, but that notwithstanding the terms of the Property Transfer, it was not necessary to pay anything for the Property by way of consideration. 16 The daughter in her affidavit (Exhibit A3) said that her father advanced an amount of $1,000 to her to enable her to contribute her share of the purchase price payable to her mother. Exhibit A3 sets out also that the money was paid back to her father and so that "I paid nothing for the property". This methodology was adopted, according to that affidavit, at the suggestion of a bank manager. 17 Exhibit A4 is, notwithstanding that it contains evidence which is hearsay, consistent with Exhibits A1 and A3. 18 The Applicants contend in their submissions that no consideration was, despite the terms of the Property Transfer, in fact paid. 19 There is thus evidence before the Tribunal that at the time of the Property transfer it was intended that there would be a trust in favour of Mrs. Anderson in respect of the Property. There is also evidence that the acquisition was made by the children for value. It was necessary, as I have noted, for Mrs. Anderson to dispossess herself of the Property to enable the grant of the War Service Loan, and a transfer of the Property on bare trust for her, the mother, would not have served the necessary purpose. It must be noted also that the estate of McDonald was dealt with on the basis that the estate had a valuable interest in the Property, and which was transferred to Jeannie as beneficiary. 20 There are thus inconsistencies in the evidence before me. The mother said in clear terms that it was always understood that the Property would remain hers, and the other affidavit evidence is despite some discrepancy between the affidavits of the son and the daughter, consistent. That this is likely on the balance of probabilities to be so, is indicated by the mother's evidence that after the death of the father and after the sale of the Lismore Property she arranged and paid for the construction of a house on the Property in substitution for the pre-existing cottage and has borne all expenses and outgoings referable to the Property.. Those allegations are consistent with the Property Transfer having been executed in order to qualify the parents for the War Service Loan; the fact that the Property Transfer was expressed to be for value is consistent with that intention since a transfer on bare trust for the mother would not have served the required purpose and which was of course that the mother be dispossessed of the Property. At the hearing in November 2004 mention was made of the fact that at the time the Property Transfer was executed, a transfer by way of gift would have attracted duty at 6th schedule (gift duty) rates. A transfer by way of gift would then, in terms of stamp duty, have been expensive. But the fact remains that it was necessary to transfer legal and beneficial ownership for the purpose to which I have referred. The evidence as to what occurred in relation to the estate of McDonald is significant. If the three children were trustees in respect of the Property, and Mrs. Anderson was entitled, as beneficiary, to the Property, there would have been no interest in the Property devolving on Jeannie. On the contrary, the interest of McDonald in the Property as trustee would have devolved upon the surviving trustees and being the son and the daughter. This aspect is inconsistent with the existence of the trust in favour of the mother; it is conceivable however that in relation to the estate of McDonald the son and daughter as executors felt obliged to proceed in the manner in which they did act (and on the basis that McDonald was possessed of a beneficial interest which could devolve on the granddaughter). 21 On the balance of probabilities, and notwithstanding the inconsistencies to which I have referred, I think that it is likely that it was intended that the Property would remain owned (albeit beneficially but not legally) by the mother, and on the basis that it was understood as between her and the children that the children would hold the Property on trust for her. It follows of course that the Property Trust was executed for an illegal purpose and so as to avoid the consequences of section 23 of the War Service Loan Act; moreover and having regard to the fact that the War Service Loan was in fact received and used, that that illegal purpose was clearly achieved. 22 I find then that the onus of establishing that the Property transfer related to the legal estate only has been discharged, and so that from and after the Property Transfer, and moreover after the death of McDonald, the Property was held first by the children and on McDonald's death by the Applicants on trust for Mrs. Anderson. The facts in this case are reminiscent to a very considerable extent of those in Nelson and another v Nelson and others 1995 HCA538 which is directly in point. The first headnote in Nelson v. Nelson reads as follows: "A mother paid the purchase price for a house which was transferred into the names of her adult son and daughter. The purpose of the arrangement was to enable the mother, if she wished, subsequently to purchase another house with the benefit of a subsidy under the Defence Service Homes Act (Cth). She would not have been eligible for a subsidy under that Act if she owned another house. She did later purchase another house, and received a subsidised loan under the Act, falsely declaring that she did not own or have a financial interest in the proceeds of sale". At page 571 Deane and Gummow JJ. Said: "A question in the present case thus arises as to whether the trust in respect of the proceeds of sale which Mrs. Nelson asserts in her favour is tainted by illegality because of its association with or furtherance of a purpose which is contrary to the policy of the law as indicated by the scheme of the Act… In our view, the answer to the first question is in the affirmative." And at page 616 McHugh J. said: "In this case we are concerned with an agreement or transaction which was not, per se, illegal but which was entered into for an illegal purpose. If Mrs. Nelson had never made the subsidy application she would have fallen within the exception that is available when an illegal purpose is not carried out. It is only because a transaction which was otherwise lawful was carried out to achieve an unlawful purpose that the question of the impact of illegality arises." 23 Jacobs in Law of Trusts, 4th edition, states that a trust for an illegal purpose is void where the illegal purpose is achieved. In this case the evidence before me establishes that it was achieved in that (as I have noted) the War Service Loan was granted and used in connection with the acquisition of the Lismore Property. 24 The judgment in Nelson v. Nelson is of course binding on me. If the trust was void, Mrs. Anderson cannot validly contend that she is the beneficial owner of the Property. This being so, the Applicants must fail for this reason, and in respect of all of the relevant years. 25 I propose, however, for the sake of completeness and in case I am in error in my view as to illegality, to deal with the matter further, but in the alternative and on the basis that Mrs. Anderson was from the date of the Property Transfer and notwithstanding its terms, the beneficial owner of the Property, and that she is not precluded from asserting that this is so. There can be no doubt that on the evidence before me, it was, if she was the owner of the Property, and during the relevant years, her PPR. 26 The definition of owner contained in Section 3 (1) of the Act is an inclusive definition reading as follows: "Owner" includes: (a) in relation to land, every person who jointly or severally, whether at law or in equity: (i) is entitled to the land for any estate of freehold in possession, or (ii) is entitled to receive, or is in receipt of, or if the land were let to a tenant would be entitled to receive, the rents and profits thereof, whether as beneficial owner, trustee, mortgagee in possession, or otherwise, (c)(not relevant) , and (d) a person who, by virtue of this Act, is deemed to be the owner 27 The definition contained in the preceding clause must be considered in conjunction with the definition of "joint owners" also contained in Section 3 (1) of the Act reading as follows: "Joint owners" means persons who own land jointly or in common, whether as partners or otherwise, and includes persons who have a life or greater interest in shares of the income from the land and persons who by virtue of this Act are deemed to be joint owners. 28 Although the definition of owner does not specify that the registered owners are (and jointly) owners of the property, the inclusive nature of the definition ensures that this is so. See in this context New South Wales Aboriginal Land Council v Chief Commissioner of State Revenue [2004] ADT 58; Union Trustee Company of Australia and the Federal Commissioner of Land Tax 20 C.L.R. 526; Adele Grace Pty Ltd v Commissioner of Land Tax (N.S.W.) 78 ATC 4075. 29 On this basis, and during the relevant years, the Applicants were joint owners of the Property; Mrs. Anderson was also an owner within paragraph (a) (i) of the definition of "owner". That in respect of any land there can be more than one owner is clear. But it cannot be said that the Applicants and Mrs. Anderson were at any time joint owners. This is so because their respective interests or estates were in respect of each of the Applicants (on the one hand), and Mrs. Anderson (on the other) entirely different. Put in succinct terms the Applicants were the legal owners of the Property while the mother was the beneficial owner of the Property. The Applicants owned the whole of the (legal) fee simple; Mrs. Anderson was in equity an owner of the Property within paragraph (a) (i) of the definition of owner. 30 The Applicants seek to draw support from the fact that the definition of "joint owners" refers to owners who hold jointly "as partners or otherwise" The words "or otherwise" must in my view be construed ejusdem generis with "partners"; that definition plainly requires a commonality of joint ownership such as is held by partners, and which does not exist as between a trustee and the beneficiary. 31 The Applicants contend that their argument is supported by the judgment in Sendall's case (and see below) and the provisions of section 24 of the Act. That argument is contained in part B of AFS, the whole of which, in the interests of completeness, is included in these reasons as follows: The Application of s24 of the Act 11. Section 24 of the Act states that: "Any person in whom land is vested as a trustee shall be assessed and liable in respect of land tax as if he or she was beneficially entitled to the land." [Emphasis added] 12. In Sendall v Federal Commissioner of Land Tax (1911) 12 CLR 653 at 659-60 Griffith CJ referred to s33 of the Land Tax Assessment Act 1910 (Cth), which stated that: "Any person in whom land is vested as a trustee shall be assessed and liable in respect of land tax as if he were beneficially entitled to the land…" Thus s33 of the Commonwealth Act was in essentially the same terms as s24 of the NSW Act. 13. Griffiths CJ said about s33: "For the purpose of the assessment of land the trustee stands in the place of the cestui que trust. He does not incur a different and independent liability. He is liable in the same way as if he were the person beneficially entitled: no more and, generally speaking, no less. The contention for the Commissioner, however, is that, where land is held on trust, the trustee is to be taxed in respect of the whole unimproved value of the land whether the beneficiaries are liable to pay tax or not. It would be a very singular result if the trustee should be bound to make an expenditure out of the trust funds for the cestui que trust which he [i.e. the cestui que trust] is declared to be not liable to pay. As I have said, the plain meaning of the section is that the trustee stands in the place of the cestui que trust." 14. Also in Sendall O'Connor J said (at page 663), referring to ss33 and 35 of that Act (s35 being the equivalent of s25 of the NSW Act): "The liability of the trustee is thus a liability to pay a tax for which the beneficial owner is liable. There cannot be a primary liability on the trustee which is not a secondary liability on his cestui que trust. In other words, in cases where the Act relieves the cestui que trust from liability, his trustee must also be taken to be relieved." 15. In Cooper v Federal Commissioner of Tax (1941) 65 CLR 320 at 332, Williams J looked at s33 of the Commonwealth Act (now s24 of the NSW Act) and said: "If there is a beneficial owner the commissioner cannot, by assessing the trustees, levy a greater tax than he would obtain if he assessed the beneficial owner ( Sendall v Federal Commissioner of Land Tax )." 16. The High Court made clear in Sendall that s24 of the NSW Act is intended to avoid the possibility that a beneficial owner of land may be exempt from liability to the Commissioner (e.g. under s10(1)( r)(ii)) but still liable to indemnify his trustee for land tax which the trustee must pay. That would be a very anomalous situation. 17. In that regard, it is noteworthy that s64(d) and (e) of the NSW Act effectively duplicate provisions in the Commonwealth Act. Thus subsections 64(d) and (e) of the NSW Act provide that: "(d) Where as agent or trustee he or she pays land tax, he or she is hereby authorized to recover the amount so paid from the person on whose behalf he or she paid it, or to deduct it from any money in his or her hands belonging to that person. (e) He or she is hereby authorized and required to retain from time to time out of any money which comes to him or her in his or her representative capacity so much as is sufficient to pay the land tax which is or will become due in respect of the land." 18. Section 64 (h) of the Act provides the trustee with an indemnity. 19. Finally, it should be noted that in Commissioner of Taxation v Opalfield Pty Ltd 28 ATR 14 and Chief Commissioner of Land Taxation v Macary Manufacturing Pty Ltd (1999) 48 NSWLR 299 (see Mason P at 313) the NSW Court of Appeal did not apply Sendall. However, that was because, in both cases, the beneficial owner of the land was not entitled to the s10(1)(r)(ii) exemption because the trustee was a company (see s10(1D)(a)(i)). Thus in those cases there was no question of the trustee being made liable when the beneficiary was not liable (as was the case in Sendall). 20. However, the facts in the present case are very different to the facts in Opalfield and Macary. In the present case, the trustees (the Applicants) are all natural persons and the Respondent concedes the exemption under s10(1)(r)(ii) is available to the beneficial owner (Hazel Anderson). Thus Sendall does apply and the trustee cannot be held liable for land tax which the beneficial owner is not liable to pay. 21. Such an interpretation is consistent with what Sully J found in Opalfield Pty Ltd v Commissioner of Land Tax 26 ATR 578, at 586, to be the underlying thrust of the Act 32 The Respondent's rebuttal of the argument by the Applicants, as referred to in the preceding clause, is contained in RS 2005 (and in which LTAA refers to a federal land tax statute, long since repealed) again for the sake of completeness in full as follows: 2. The Section 24 Issue 2.1 The Appellant's argument is based upon the decision in Sendall & Anor v The Federal Commissioner of Land Tax, and proceeds as follows: (a) the ratio in Sendall was that a trustee was held not to be liable for land tax if its beneficiary was not liable for it; (b) section 24 is relevantly identical to s33 of the LTAA 1910; (c) section 64 is relevantly identical to s62 LTAA 1910; (d) thus the statutory context is relevantly identical; (e) in the circumstances in (d) above, the ratio in Sendall requires that the Applicants not be liable to land tax, because Mrs Anderson in respect of the Ballina Property was exempt from land tax by operation of para 10(1)(r). 2.2 That submission mis-states the ratio in Sendall. 2.3 Sendall was concerned with: (a) an assessment that the trustees were liable on the sum of the unimproved value of: (i) a life estate, and (ii) the estates in remainder held by them for the different beneficiaries; (b) the issue being whether s25 LTAA 1910, not ss33 or 62 thereof, had the effect that the trustee's liability was more limited, ie for the unimproved value of only the life estate. (1911) 12 CLR 653 at 654 & 656 2.4 Section 25 LTAA 1910 relevantly provided: "The owner of any freehold estate less than the fee simple shall be deemed to be the owner of the fee simple, to the exclusion of any person entitled in reversion or remainder. Provided that for the purpose of the assessment of a tenant for life … the unimproved value of the land shall be calculated …" as therein provided. at 658 2.5 It was held that the effect of s25 LTAA 1910 was that: "… the persons entitled in remainder are to be left out of consideration …" for the purposes of the proviso in s25, ie all that was to "… be calculated …" under the proviso was the unimproved value of the life estates. at 659 2.6 The ratio of the decision was that the trustees did not have a liability to land tax: (a) except pursuant to s25 LTAA 1910, and (b) upon the basis provided for therein. 2.7 Sendall is not authority for the construction of ss33 or 62 LTAA 1910. Indeed, in Sendall those provisions were regarded as irrelevant to the issue for determination: "Sec 25 contains the only provision applicable to the case. The only person to be treated as owner is the tenant for life …". Griffiths CJ at 661 similarly, Connor J at 662-3 2.8 Sendall's outcome turned upon s25 LTAA 1910 because, in the circumstances in which it was operative, it affected the meaning of "owner" for the purposes of LTAA 1910. 2.9 Accordingly, as: (a) Sendall is not authority for the construction of ss24 or s64 LTMA, (b) the Applicants are undoubtedly "owners" and joint owners for the purposes of the LTMA, and (c) no provision of the LTMA corresponding to s25 LTAA 1910 is engaged, Sendall is to be distinguished. 2.10 The above analysis of Sendall has been adopted by the Court of Appeal. Chief Commissioner of Land Tax v Macarry Manufacturing (1999) 48 NSWLR 299 Mason P at [71] to [74] Spigelman CJ and Sheller JA agreeing The Tribunal, as matter of precedent, is bound to apply the analysis adopted in Macarry Manufacturing, even if its own view is to the contrary. 2.11 Macarry Manufacturing is authority for the further proposition that the "owners" of a legal estate may be liable for land tax notwithstanding that the beneficial owner is not; at [69] the very opposite of the premise for the submissions for the Applicants. Apps' Subs at [21] To the extent that Commissioner of Land Tax v Opalfield, which is relied upon by the Applicants, decides otherwise it was overruled. 33 It will be noted that the Respondent contends that the Applicants' argument in this context is rebutted in particular by paras 71 to 74 of the judgment of the New South Wales Appeal Court in Macary and reading as follows: 71 The Trustee submitted that Sendall v Federal Commissioner of Land Tax (1911) 12 CLR 653 established that s24 of the Management Act could not be used as an independent ground of assessing a trustee who is not an "owner". I agree. But s24 is not invoked in that way in this case. 72 The Trustee conceded that if it were an "owner" then it would be no objection to its assessment that the beneficiaries might have been exempt if they had been assessed as such. This concession was properly made. Sendall does not suggest otherwise. It was a special case, because it involved a provision (s25 of the Land Tax Amendment Act 1910 (Cth) ("the 1910 Act")) which imposed a concessional tax on legal and equitable life tenants whose interests arose before 1910. The High Court (Griffith CJ and O'Connor J) held that this exemption could not be circumvented by assessing the trustee and relying upon provisions corresponding to s24 and s25 of the Management Act. To have done that would have left the trustee without power of recoupment because of the clear indication in the section in the 1910 Act that legal and equitable life tenants whose interests arose before 1910 were to be exempt from the general tax. Griffith CJ pointed out (at 661) that s25 of the 1910 Act "contains the only provision applicable to the case. The only person to be regarded as owner is the tenant for life, and the trustees of the estate are only liable to be assessed for the amount payable by the widow as such life tenant." 73 O'Connor J spoke to similar effect (at 662-3). Indeed, he made some preliminary remarks which support the conclusion that the Trustee in the present case is an "owner" liable to be taxed as such under the general taxing provisions. O'Connor J said (at 662): There is no doubt that, for the purposes of the Act, the trustee is the owner of the land, as well as the cestui que trust. The tax is made payable on the amount of the unimproved value of the land owned by a taxpayer. As a trustee may be an owner and taxpayer it is contended by the Commissioner that, according to the scheme of the Act, the tax may be imposed either on a trustee or on a cestui que trust, that is to say, on the owner of the legal estate or on the owner of the equitable estate. Mr Piddington , for the Commissioner, contends that, in this case, the tax must be paid by the owner of the legal estate. Now, in many instances it would make no difference to the amount of the tax whether the legal owner or the equitable owner were made the taxpayer. But in this case the distinction is very material, because the case of a tenant for life with estates in remainder has been expressly dealt with by sec.25. The first sentence of the passage quoted is the commencement of a lengthy passage (at 662-3) explaining why s25 of the 1910 Act covered the relevant field. 74 Here there is no provision equivalent in form or intent to s25 of the 1910 Act. The exemption to which the McCanns might have been qualified, had they been assessed as owners, is s10(1)(r) of the Management Act in the form in which it stood between 1986 and 1997 (see par 15 above). That exemption dealt with "residential land". However, s10(1D) defined "residential land" in terms excluding land owned by a company. In Opalfield, this provision was considered by the Court of Appeal in the context of its earlier holding that Opalfield Pty Ltd was the deemed "owner" (in equity) of the land at the relevant date. The company's deemed "ownership" (through s26) was held sufficient to defeat the exemption even though the land was occupied by the members of the Allen family who were the beneficiaries of the sub-trust (94 ATC at 4174-5). The company's invocation of Sendall was rebuffed, because (in Sheller JA's words at 4175): Even if one were to treat the respondent as standing in the place of the parties to the Agreement, those parties were not entitled to the exemption because the subject property was "owned by a company". I do not think the consequence is affected by s25 of the Act which provides for the owner of an equitable estate or interest to be assessed and liable in respect of land tax as a secondary taxpayer 34 While I agree that the paragraphs in Macary quoted in the preceding clause, do have the effect for which the Respondent contends, I take the view that the matter is put beyond doubt by clause 69 of the judgment in Macary which reads: 69 A trustee is answerable as a taxpayer, obliged to submit returns and armed with various rights (s64). Section 24 provides that any person in whom land is vested as a trustee shall be assessed and liable in respect of land tax as if beneficially entitled to the land. The owner of an equitable estate or interest is also liable as if he or she were the legal owner (s25). Several provisions of the Management Act contemplate multiple taxable "owners" in respect of the same land at the same time (see ss23, 24, 25, 26, 27, 30, 32). Double taxation is avoided through recognition of "primary" and "secondary" taxpayers, with the secondary taxpayer being entitled to a deduction for such amount (if any) as is necessary to prevent double taxation. As between the legal and equitable owner, the owner of the legal estate is deemed to be the primary taxpayer (s25). However, that owner's rights of recoupment, retention and indemnity are recognised by s64. 35 The fact that in Macary there was a corporate trustee is not, in my view, a relevant factor. The law may in my view be stated in brief terms in the following fashion; where there are joint owners of land it will suffice for the purpose of the PPR exemption that one owner of the land used it as his or her PPR. (A corporate trustee of course does not use land as a PPR). In this case the difficulty facing the Applicants in relation to the relevant years is that the Applicants and the mother were not joint owners. 36 The Applicants seek to draw support from LT55; they assert that the Respondent is seeking to draw a conclusion which is inconsistent with his own ruling. LT55 deals with persons with disabilities. It goes on to say that although the ruling deals with persons with disabilities, it has a more general application in relation to trustees and beneficiaries. If it is to be construed in the matter for which the Applicants contend, then it is in my view wrong. SD1 makes it clear that a ruling is nothing more than an expression of opinion, will always yield to the terms of the statute, and that there is no estoppel against the Respondent. 37 The Applicants contend in the alternative that even if the mother and the Applicants were not joint owners, they are nevertheless entitled so succeed. That argument (somewhat convoluted in the view of the Tribunal) is contained in Part D of AFS which, again for the sake of completeness, is set out in these reasons as follows: D. The Applicants and Hazel Anderson do not need to be joint owners for the purposes of s10 (1) (r) (ii). 39. If the previous argument fails then the Applicants say that, in any event, it is not necessary for them to show they were joint owners. They maintain that they are entitled to an exemption under s10 (1) (r) (ii) because that exemption is triggered by the "use and occupation of the land" by an owner, or one or more joint owners (unless that owner is such an owner by reason only of being a trustee). Thereafter, the exemption attaches to the land and thus excludes land tax being levied against any owners of the land. Thus it is the activity on the land (by a beneficial owner) which creates the exemption. 40. That is consistent with what Sully J saw as the evident purpose of s10: to ensure that beneficial owners of land are relieved of liability (see Sully J in Opalfield, above). 41. However, the Respondent relies upon the operation of s11 of the Act. However, it is difficult to know what to make of s11, which cannot be applied literally. The CCH Land Tax services states (at 5 – 150) "Section 11 provides that the exemption of land from land tax under s10 is limited to the owner specified in that section, and does not extend to any other person who is the owner of any estate or interest in the land. The provision is not clearly expressed and its proper construction is open to some doubt. In the majority of cases, the exemptions of s10 (1) are conferred in respect of land owned "by or in trust for" the particular person, entity or body and if s11 were to be applied literally it would seem that the exemption would be confined to the interest in the land of the legal owner and that the interest of the beneficial or equitable owner would not be exempt. This is manifestly not the intended effect of the exemptions and s11 cannot, therefore, be applied literally." 42. Thus s11 must be given a restricted reading and not be read as applying where the beneficial interest is exempt from taxation. Certainly, it does not apply to s10 (1) (r), which focuses on the activity undertaken on the land. 43. Indeed, recent amendments to the Act make it entirely clear that s11 has no application to s10 (1) (r). Thus clause 3 of Schedule 1A provides that: "If the owner of land is entitled to the exemption conferred by this clause, no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner's entitlement to the exemption." 44. Thus it is only necessary to show that Hazel Anderson (who was in residence) was an " owner " (which is accepted). Because of the emphasis in s10 (1) (r) (ii) on the activity , s11 of the Act has no application. The exemption attaches to the " land " and all owners are exempt. 38 I do not consider that I need to deal with the argument set out in the preceding clause in detail; suffice it to say that clause 69 of the judgment in Macary quoted in the preceding clause, ensures that it cannot be correct. The rationale can be stated in the following simple terms. The mother would have been entitled to the exemption if she were the only owner. The Applicants as trustees and joint owners would have been entitled to an exemption if the Property had been used by any one of them as his or her PPR. (It is reasonable to infer that there would not on this hypothesis, have been a "single family" problem as referred to in Schedule 1A to the Act) The fact that the mother would have been so entitled if she were the only owner, does not suffice. 39 In 2003 and with effect from the 2004 year the Act was amended by Act 80 of 2003 The PPR exemption previously dealt with in section 10 (1) (r) of the Act was moved for the most part to a new schedule 1A and which contains a clause 2(3) which has been quoted previously in these reasons. 40 The Respondent has conceded that in relation to the 2004 year only, and by reason of the amendment referred to in the preceding clause, the mother would have been entitled to the PPR exemption were it not for the illegality aspect. My view is that that concession was incorrect. The opening words of clause 2(3) refer to "the owner". Those words must refer to the defined term; it is clear that in relation to any parcel of land there can be more owners than one. A number of provisions of the Act refer firstly to "the owner" followed by a reference to "that owner". If the opening words had referred to "any owner" I would agree that the concession was properly made but they did not. So important an amendment to the law would surely, if intended, have been referred to in the second reading speeches or the explanatory notes in respect of the amending Act, but they were not. I thus infer that no change was intended and so that clause 2 (3) of Schedule 1A should be interpreted on the basis that "the owner" refers to all persons who are owners as defined. That said, it must be noted that the reference to "any other person" contained in clause 2 (3) of Schedule 1A is not easy to comprehend having regard to the width of the definition of "owner", and bearing in mind in particular that even a deemed owner (such as for example and in certain circumstances a mortgagee in possession) is an owner through paragraph (d) of the definition. What "other person" would in these circumstances not be liable for the charge? It is relevant in this context that notwithstanding the amendment to section 10 (1) (r ) of the Act section 11 was not amended and remained in the same form throughout the relevant years and as follows: 11 Limitation of exemption With respect to land which under section 10 is exempt from land tax the exemption shall be limited to the owner specified in that section, and shall not extend to any other person who is the owner of any estate or interest in the land 41 It will be noted then that section 11 and clause 2 (3) of Schedule 1A to the Act are not easy to reconcile. But section 11 remains part of the Act and in its terms, and notwithstanding clause 2 (3) of schedule 1A, provides that the fact that an owner is exempt does not have the effect that any other owner is also exempt. 42 In summary; the mother is precluded by Nelson v Nelson from asserting a trust in her favour; in relation to the original years the Applicants must fail because they were not, together with the mother, joint owners, and the argument that they are entitled to succeed even if they were not, with the mother, joint owners, is not tenable. In relation to the 2004 year the Respondent's concession was not correct, and so that the 2004 year is, for these purposes, no different from the original years. 43 There is one other matter which should be mentioned. The Applicants contended in AFS that the Respondent at the hearing in November 2004 conceded the existence of a trust. The Respondent says that he has no recollection of any such concession. My notes made on the day are not determinative one way or the other. But even if such a concession were made, and even if there were such a trust, it was clearly void as being for an illegal purpose and which was achieved. 44 In these circumstances both of the decisions must be affirmed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.