CITATION: Kamper and anor v Chief Commissioner of State Revenue [2005] NSWADT 256 DIVISION: Revenue Division APPLICANTS PARTIES: Stephen Kamper and Magdalene Kamper RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 056063 HEARING DATES: 10/11/2005 SUBMISSIONS CLOSED: 11/10/2005 DATE OF DECISION: 11/16/2005 BEFORE: Block J - ADCJ (Judicial Member) APPLICATION: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 Land Tax Management (Amendment) Act 1997 LEGISLATION CITED : Land Tax Management Act 1956 State Revenue Legislation Further Amendment Act 2003 Valuation of Land Act 1916 Timbs v Chief Commissioner of State Revenue [2005] NSWADT 173 Ryan v Commissioner of Land Tax [1982] 1 NSWLR 305 CASES CITED: Kinging & anor v Chief Commissioner of State Revenue [2005] NSWADT 239 Coleman & anor v Chief Commissioner of State Revenue [2005] NSWADT 236 CIC Insurance Lt v Bankstown Football Club (1997) 141 ALR 618 McMillan v Chief Commissioner of Land Tax [1972] 1 NSWLR 545 APPLICANTS REPRESENTATION: J Xenos, solicitor RESPONDENT S Free, solicitor ORDERS: The decision under review is affirmed in respect of the 2000, 2001, and 2002 land tax years and is set aside in respect of the 2003 and 2004 land tax years. REASONS FOR DECISION Part A Introduction and Background. 1 The decision under review concerns land tax assessed in respect of the property situated at 56 Woodlands Road, Taren Point (referred to in this decision as the "Second Property") for the 2000, 2001, 2002, 2003, and 2004 land tax years (collectively "the relevant years" and each a "relevant year" although individual land tax years are generally referred to simply by reference to the actual year). The relevant years are divided into two categories; the term "earlier relevant years" refers to the 2000, 2001, and 2002 land tax years, while the term "subsequent relevant years" refers to the 2003 and 2004 land tax years. 2 The Tribunal had before it the documents lodged pursuant to section 58 of the Administrative Decisions Tribunal Act 1997 and the Tribunal admitted as exhibit A1 an affidavit by Mr Kamper dated 26 September 2005, inclusive of its annexures and consisting of a number of photographs of the houses on the Properties (as defined hereafter). The Tribunal was furnished with (helpful) written submissions by both parties. 3 The application for review was made by Mr Kamper alone, although he and his wife are the owners of the Properties. An application to join Mrs Kamper as an Applicant was made at the commencement of the hearing, and that application was, with the consent of the Respondent, granted. 4 The facts fall within a comparatively narrow compass and there does not appear to be any significant dispute of fact between the parties; it was not thought necessary by either party that oral evidence be heard. It is convenient, at least by way of commencement to include the content of clause 2 of the Applicants' submissions under the head of " Facts" as follows: -- 2. Facts 2.1 In 1991 the Applicants purchased the property at 56A Woodlands Road Taren Point ("56A Woodlands Road"). Since that time the Applicant, his wife, and children have used this property exclusively as their principal place of residence and continue to do so. 2.2 In 1996 the Applicants purchased the property at 56 Woodlands Road Taren Point. The property remained vacant until 1997. In 1997 the Applicants rented the premises for a short period of time before requesting the tenants to vacate the premises. 2.3 The Applicants then allowed extended family, Magdalene Kamper's sister and her family ("the Spanos family") to live in the premises until approximately June 2002. The Applicants neither sought nor obtained rent from the Spanos family during this time. They assisted the Spanos family during a time when the Spanos family was impecunious to the extent that they also provided a motor vehicle for the Spanos family and paid their utilities accounts. 2.4 The Applicants have five children aged 20, 19, 15 and twins aged 10. Due to the growing size of their family, the Applicants wife decided to modify 56 Woodlands Road to provide additional space. The applicants carried out extensive renovations and modifications to 56 Woodlands Road. 2.5 During the course of renovations and modifications, the Applicants did not duplicate facilities that already existed in the building on 56A Woodlands Road. The renovations included providing facilities such as a gym, steam room, study area, toilet and vanity area. The gym and steam room were specifically added to accommodate Magdalene Kamper who suffers from rheumatoid arthritis, which is a life long illness, for which there is currently no known cure. The illness is degenerative in nature. The land at 56 and 56A Woodlands Road share a common driveway, paving area and fencing. The Applicants contend that the two buildings combined have been used and continue to be used exclusively by themselves and five children as their principal place of residence. 5 I use the term "Main Property" to refer to the property situated at 56A Woodlands Road Taren Point (referred to in clause 2.1 of the Applicant's submissions as "56A Woodlands Road"). I use the term "Second Property" to refer to the property at 56 Woodlands Road Taren Point (referred to in clause 2.2 of the Applicants submissions). The term "Properties" refers collectively to the Main Property and the Second Property. 6 There is not much which need be said by way of amplification of clause 2 of the Applicants' submissions; however there are some aspects which can usefully be added or aspects which can be amplified as set out in the remaining clauses contained in this part A. 7 The Main Property was acquired in 1991 and with a house on it. In 1996 the Applicants acquired the Second Property again with a house on it. The Second Property was let to tenants from a date early in 1997; a rental bond was lodged in February 1997. The tenants remained in the Second Property until November 1997. From November 1997 until May or June 2002 the Second Property was used and occupied by Emanuel and Katina Spanos and their family; (they are referred to in clause 2.3 of the Applicants submissions as "the Spanos family"). Mrs.Spanos and Mrs. Kamper are sisters. 8 Mr Xenos noted that the Applicants did not ask the Spanos family for rent in respect of their use occupation the Second Property, and that moreover the Applicants paid for utilities such as electricity and the like. (Mr. Xenos did not make any specific reference to the motor vehicle referred to in clause 2.3 of the Applicant's submissions but that may have been an oversight, and in any event nothing turns on it.) Mr Xenos drew attention in this context to the decision of this Tribunal in Timbs v Chief Commissioner of State Revenue [2005] NSWADT 173 (currently on appeal). He noted that in Timbs and where the applicant owned and occupied two flats in the same building there was evidence that the applicant (Mr Timbs) allowed relatives to occupy one of the flats at times and from time to time. Mr. Xenos sought to contend that the facts in this case are analogous to those in Timbs. However any such analogy would not be apposite because the Spanos family occupied and used the Second Property for an extended and continuous period (of nearly 5 years) in circumstances where, if Mr. And Mrs Spanos had been the owners of the Second Property, it would have been their principal place of residence ("PPR") Mr. Xenos later in the hearing conceded that for this reason and in relation to the earlier relevant years, the case for the Applicants was weak. This is so having regard to the tests in Ryan v Commissioner of Land Tax [1982] 1 NSWLR 305; in particular it was plain that in respect of the earlier relevant years and in relation to the Properties, use and occupation was divided. I do not comment further on Timbs both because it dealt with strata flats and also because it is on appeal. 9 If only for the sake of completeness I note that although the Spanos family appear to have been the recipients of generous treatment (in respect of the Second Property) the reference in clause 2.3 of the Applicants submissions to "extended family" cannot have the effect that any member of the Spanos family was in any relevant statutory sense a dependent of the Applicants, and indeed there was no contention by Mr. Xenos to this effect. 10 On the basis that Ryan is, as a judgment of a superior court of this State binding on this Tribunal it is clear that during the earlier relevant years there was as between the Properties a division of use and occupation and so that the Applicants cannot succeed in respect of the earlier relevant years. 11 Although the house on the Second Property was altered in the manner set out in clause 2.5 of the Applicant's submissions after the Spanos family vacated it, there was never any doubt, or for that matter any dispute, that there was at all relevant times and is a house on the Second Property just as there is a house on the Main Property. Mr Xenos accepted that the house on the Second Property could, notwithstanding the alterations referred to in clause 2 of the Applicants' submissions, be used as a dwelling by another family although, so he said; some modification cost would be involved. 12 Mr Xenos referred in some considerable detail to the photographs of the houses on the Main Property and the Second Property, and which were, annexed to exhibit A1. Mr Free also referred to the photographs, more particularly in the context of the plan of the Properties which is contained in Tab 2 of the section 58 documents. Specifically as regards the plan it may be noted that it illustrates the position of A and B (respectively the Second Property and the Main Property) and indicates that there is a right of way over A allowing access from the street to B. Mr Free also referred in this context to the photographs and in particular to the stepped area in front of the house on the Second Property, on the basis that the boundary of the stepped area coincides with the dividing line on the plan between A and B. Mr. Xenos said that the dividing line occurs in fact a short distance away from and in front of the stepped area. Mr. Free noted also that although there is a paved driveway which allows access to the Main Property through the Second Property, to describe it as common property might not be apposite in that the Second Property has its own gravel driveway leading up to what was, prior to the alterations, a garage; it is possible that the paved driveway does do no more than provide access to the Main Property from the street. The content of this clause is included for the sake of completeness and because it was dealt with at such length and took up so much time. Its relevance is not clear in particular because the Respondent's submissions appear to concede that the Properties are not separated. Suffice it to say that I do not regard any of this evidence as material and do not consider that it is adverse to the Applicants in respect of any of the Ryan tests in relation to the subsequent relevant years. It may be noted that Clause 26 of the Respondents submissions reads as follows: The two lots of land at 56 and 56A Woodlands Road are contiguous lots. The Chief Commissioner accepts that there is no physical separation between the two lots and that the lots are undivided in title, in that each lot is owned jointly by the applicants. If the Ryan principle is applicable, the central issue is whether, for the purposes of the 2000, 2001, 2002, 2003 and 2004 land tax years, the lots were undivided in use and occupation in the sense that they were both used and occupied as the principal place of residence of the applicant and his family. 13 The result on the evidence before me is that I find that the two Properties were not separated from each other. Although the Properties were divided as to use and occupation in respect of the earlier relevant years, this was not so in respect of the subsequent relevant years; similarly the Properties were not during the subsequent relevant years divided as to title. On a prima facie basis at least, the Ryan tests were satisfied in respect of the subsequent relevant years. Part B Ryan v Commissioner of Land Tax [1982] 1 NSWLR 305, Kinging & anor v Chief Commissioner of State Revenue [2005] NSWADT 239 and Coleman & anor v Chief Commissioner of State Revenue [2005] NSWADT 236. 14 It was necessary for me in Kinging to consider Ryan in some considerable detail. I refer, without repeating its content to clauses 12,13 and 14 of my decision in Kinging, noting that clause 15 of Kinging read as follows: 15. Hunt J. concluded by determining the issue (page 310) in the following terms: It follows, in my view, that contiguous blocks of land can comprise a "parcel of residential land" within s 10(1) (r) (ii) only where they are undivided not only by physical separation but also in use, occupation and title – (Emphasis added by the Tribunal) 15 Counsel for the applicants in Kinging contended that Ryan was distinguishable and accordingly not binding on the Tribunal. He contended that having regard to section 33 of the Interpretation Act 1987 and CIC Insurance Lt v Bankstown Football Club (1997) 141 ALR 618 I should look to the purpose of the statute, and thus adopting the modern approach to statutory construction. He argued that "purpose" was not considered in Ryan; his contention was in effect that on the same facts Ryan might be decided differently today. 16 I decided in Kinging that Ryan was binding on the Tribunal and moreover that Hunt J did have regard to statutory purpose in his judgment in Ryan. It may be noted that the facts in Kinging were similar to those in Ryan except that in Kinging the amenities on one lot were more extensive than the garden amenities on 3 Baden Road (the corresponding lot) in Ryan. In Kinging and on the corresponding lot a swimming pool tennis court, cabana and walkway were constructed. Although in Kinging there was some discussion of the fact that the cabana had a roof and that there was (possibly) a relevant distinction; it was not suggested that the cabana constituted a house. In any event the applicants in Kinging failed because title was divided in the manner applicable in Ryan. 17 It remains my view that Ryan was and is binding on this Tribunal. However Mr Free's contentions have obliged me to consider Ryan rather more closely and in the context of the relevant legislation, and in particular the Land Tax Management Act 1956 (the "Act") both before and after amendments made in 1987 and also amendments made in 2003 and commencing in respect of the 2004 land tax year. 18 Coleman, also decided by me recently, is in my view of peripheral relevance only. In particular the lot in Coleman which corresponded to the Second Property was used for two purposes and to that it was relevant to consider whether any use not related to the adjoining property would result in failure of the Ryan use test, and whether there was a question of dominance in relation to dual use. Coleman also raised the so-called "granny flat" provisions but not, as it transpired, relevantly. Part C Ryan revisited; McMillan v Chief Commissioner of Land Tax [1972] 1 NSWLR 545 19 Ryan was decided in 1982 in relation to the Act in its form at that time. Section 10(1)(r)(ii) of the Act at that time allowed a PPR exemption for "… a parcel of residential land not exceeding 2100 square metres in area that is used and occupied as his principal place of residence and for no other purpose by the owner of that land…" Of more relevance is the fact that section 10(1D) of the Act at that time provided that the expression "residential land" referred to "… land that is used and occupied for residential purposes and for not other purpose, that use and occupation being use and occupation of a building that is designed constructed or adapted for residential purposes". 20 It will be noted that in 1982 section 10(1D) referred to "a building". If those words were such that they precluded the plural form, as might have been the case it would seem that 1 Baden Road and 3 Baden Road, had they not been divided as to title, would still have resulted in failure for Mr Ryan if in relation to 3 Baden Road had there been a building (and perhaps a cabana as in Kinging) instead of garden amenities. However Ryan was decided on the basis that there was a division of title. 21 In McMillan Isaacs J was called upon to decide whether two lots in the same ownership and with a house on one lot and a garden on the other constituted a parcel of land. Isaacs J was concerned with section 9(3) of the Act as in force at that time; in accordance with subsection (e) (inserted in 1969) an exemption was allowed in respect of "land owned by a person... used and occupied by that person solely as the site of a single dwelling house…" It will be noted that the facts in McMillan were similar to those in Ryan and McMillan was cited in Ryan. In McMillan the plaintiff succeed on the basis that the whole of the "subject land was used and occupied by them as a single dwelling house…" Section 9(3) (e) of the Act at that time suggests that the decision might have been different if there had been two dwelling houses. 22 McMillan is instructive for another reason. Isaacs J thought that a relevant factor (and see page 554) was the manner in which the land was valued by the Valuer-General for the purposes of the Valuation of Land Act 1916. See in particular the passages at E and F on page 554). Part D The legislation after Ryan and McMillan. 23 As at 31 December 1999, the taxing date for the 2000 land tax year, section. 10 of the Act relevantly provided: "10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: … (r) with respect to taxation leviable or payable in respect of the year commencing on 1 January 1998 or any succeeding year, land that has a land value in respect of the year of less than the premium tax threshold and that is used and occupied as the principal place of residence of the owner of the land (or, if there are joint owners, as the principal place of residence of one or more of them) and for no other purpose (except as provided by subparagraph (iii)), being: (i) a strata lot, or (ii) a parcel of residential land, or (iii) a parcel of residential land on which there is also one of the residential occupancies referred to in subsection (1D) (b) (ii) (A)–(F),unless the owner or all of the joint owners who so used and occupied the lot or parcel (as appropriate) is such an owner by reason only of being a trustee … (1D) In paragraph (r) of subsection (1) residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes: (a) not being land that: (i) is owned by a company, (ii) is owned by or on behalf of a company and is land of which a mortgagee or person by way of security for money is in possession, (iii) is held by a trustee for or on behalf of a company, or (iv) in respect of which a company is jointly assessed with any other person, and (b) not being a building or buildings: (i) comprised of lots within a strata plan or residential units, (ii) containing (out of the total of all rooms in the building or buildings) occupancies other than that of the owner and any one of the following residential occupancies: (A) one room, (B) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy, (C) one flat, (D) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy, and one room, (E) one flat and one room, (F) 2 rooms, each of which is separately occupied, or (iii) from any part of which income is derived otherwise than as the consideration for one (but not more than one) of the residential occupancies referred to in subparagraph (ii) (A)–(F)." (emphasis added) 24 Section 3 of the Act, as it applied at the taxing date for the 2000 land tax year, relevantly provided: "3 Definitions (1) In this Act, unless the context or subject-matter otherwise indicates or requires: … Flat means a room or a suite of rooms constructed, designed or adapted for occupation or use as a separate dwelling, whether the room or suite is a detached building or forms part of a building. … principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person. … (3) For the purposes of this Act, in respect of any year in respect of which taxation is leviable or payable, land or a flat is not used or occupied as the principal place of residence of a person unless: (a) that land or flat and no other land or flat has, since before the first day of July that last preceded the commencement of that year, been continuously used and occupied by that person for residential purposes and for no other purpose, or (b) in any other case, the Chief Commissioner is satisfied that the land or flat is used and occupied by that person as the person's principal place of residence." 25 Although and after December 1999 the Act was amended from time to time I need be concerned only with the amendments effected by the State Revenue Legislation Further Amendment Act 2003 which took effect on 31 December 2003 and thus in relation to the 2004 (and later) land tax years. In accordance with those amendments the substantive provisions dealing with the PPR exemption were moved from Section 10(1) (r) to a new Schedule 1A. Section 10 of the Act now relevantly provides, and provided at the relevant time in respect of the 2004 land tax year: "10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: … (r) land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A". 26 Section 3 relevantly provides, and provided at the relevant time in respect of the 2004 land tax year: "3 Definitions (1) In this Act, unless the context or subject-matter otherwise indicates or requires: … principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person." 27 Schedule 1A of the Act provides, and provided (in part) at the time relevant for the purposes of the 2004 land tax year: "Schedule 1A Principal place of residence exemption Part 1 Preliminary 1 Definitions (1) In th is Schedule: principal place of residence exemption—see clause 2. residential land—see clause 3. taxing date—means midnight on the thirty-first day of December. (2) For the purposes of this Schedule, a reference to the owner of land includes, if there are joint owners, any one or more of those joint owners. Part 2 Principal place of residence exemption 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing on 1 January 2004 or any succeeding year, if: (a) the land has a land value in respect of the year of less than the premium tax threshold, and (b) the land is: (i) a parcel of residential land, or (ii) a lot under the Strata Schemes (Freehold Development) Act 1973 or a lot under the Strata Schemes (Leasehold Development) Act 1986. (2) Land is not used and occupied as the principal place of residence of a person unless: (a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. (3) 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. (4) The exemption conferred by this clause is referred to as the principal place of residence exemption. 3 Residential land—meaning (1) In this Schedule, residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes, other than a building or buildings: (a) comprised of lots within a strata plan or residential units, or (b) containing (out of the total of all rooms in the building or buildings) occupancies other than that of the owner, or (c) from any part of which income is derived. (2) Land does not cease to be used and occupied as provided by subclause (1) by reason of there being on that land any building or improvement that is used or occupied for a purpose ancillary to the purposes for which the building is, or the buildings are, designed, constructed or adapted. (Emphasis added by the Tribunal) 28 It is unnecessary for me to include the whole of Schedule 1A. Suffice it to say that it includes the "granny flat" provisions previously contained in section 10(1D). 29 The Land Tax Management (Amendment) Act 1997 (which is referred to as the "1997 Act") provided in section 3 for the amendment to the Act in accordance with Schedule 1. Schedule 1 in turn contained a number of amendments in respect of section 10 (land exempted from tax) and in particular so as to substitute the plural form "building or buildings" (or similar words) in certain subclauses and to introduce the so-called granny flat provisions 30 The Explanatory Note in respect of the Land Tax Management (Amendment) Bill 1997 provided that "the object of this Bill is to amend the Land Tax Management Act 1956 to expand the scope of exemption from land tax in cases of multiple occupancy of land. The Bill provides that land used as the principal place of residence of the owner of the land will not cease to be exempt because there is a "granny flat" on the land as well as the owner's home... 31 In his second reading speech is; Mr Debus said in this regard that "Finally, earlier this year the Government announced that the law would be relaxed to allow dual occupancy, thus paving the way for the construction of so-called granny flats which were not attached to an existing building. This move was designed to reduce housing costs by allowing new dwellings to be constructed on residential land, thus reducing the demand for additional new services such as roads, sewerage, power and so on." Part E Interpretation 32 I consider, as I have said, that Ryan is binding on this Tribunal. 33 Ryan was, again as noted previously decided at a time when section 10(1D) of the Act referred to "a building" As to how Ryan would have been decided if there had been a building on 3 Baden Road (and if title had not been divided) is a matter of conjecture. It seems likely that McMillan would have been decided differently if there had been a house where the garden was. 34 The 1987 amendments were enacted, according to the Explanatory Note in order to enact the so-called granny flat provisions. It is important to remember that in respect of a granny flat the construction of accommodation of this nature on the property would not cause the loss of the PPR exemption notwithstanding the fact that the granny flat would be occupied and used by someone other than the owner. The granny flat provisions in other words deal with concepts of occupation. They are designed to ensure that occupation of the granny flat by someone other than the owner is permissible and does not preclude the PPR exemption. (The provisions in question are not of course confined to a granny flat; they extend to other structures but which need not be considered in these reasons.) 35 It must be arguable that the 1987 amendments were designed only to enact the "granny flat" provisions and for no other purpose and so that conceivably it was intended that the then existing law would otherwise be unchanged. 36 Notwithstanding the preceding clause the legislation both prior to and after the 2003 amendments (effective as from the commencement of the 2004 land tax year) are cast in a form which in its terms does not preclude more buildings than one. After the 1987 amendments section 10(1D) referred to "building or buildings". Section 10(1D)(b) then proceeded to exclude certain buildings but not, per section 10(1D)(b)(ii), occupancies of the owner and the other residential occupancies referred to in (A) to (F). 37 Post the 2003 amendments clause 3(2) of Schedule 1A provided that land would not cease to be used and occupied because there were buildings or improvements of an ancillary nature. 38 Having regard to section 33 of the Interpretation Act 1987 and CIC v Bankstown I must have regard to the purpose of the Act. The 1987 amendments were enacted, as I have said, to allow for inter alia the so-called granny flat provisions. I do not read the Act in its amended form so as to preclude the application of the Ryan principles where there are two houses on lots said to constitute a parcel and where, as is the case in this matter, one house was adapted so as to constitute an adjunct to the other. It is possible that amendments to the legislation have had an effect which goes further than was intended by the 1987 amendments. 39 Clauses 33 to 36 of the Respondents submissions read as follows: 33.It is certainly the case that the LT Management Act contemplates that a parcel of residential land may be the site of more than one building. This can be seen from the reference to "building or buildings" in the definition of "residential land" in cl. 3 of Sch 1A of the Act, which relevantly provides that "residential land" means: "land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes". 34. Accordingly, the mere fact that there are two separate buildings in the present scenario – one situated on the lot at 56 Woodlands Road and one situated on the lot at 56A Woodlands Road – is not determinative in showing that there are separate parcels of land. However, in the context of considering whether two separate lots constitute a single parcel of residential land, the presence of two separate buildings does become significant where the buildings are self-contained, freestanding houses, each being separately accessible and each adapted for and capable of being used as an independent, complete dwelling house. 35. The situation would be different if the building on the secondary lot was a building of an ancillary nature to the main residence, such as a garage, shed, poolhouse, greenhouse or granny flat (as to the treatment of granny flats under the "excluded residential occupancy" provisions, see below). But where the building on the secondary lot is a separate, self-contained house the secondary lot should not be treated as part of the same parcel of residential land as the primary lot. 36. To consider an example of the former situation, if one has to characterize an area of land that is bordered by a single fence and contains a house, a garden, a swimming pool, a poolhouse and a greenhouse all used by the one family which resides in the house, it is natural that the entire area be described as a single parcel of residential land. The effect of Ryan is that (provided the elements as to title are also satisfied) this characterization is not changed merely because the land happens to be divided into separate lots. However, where one considers the area of land that is at issue in the present case – an open area not united by a single fence boundary, featuring two separate, freestanding houses each separately accessed from a common driveway – it is not comparably natural to characterize the entire area as a single parcel of residential land. 40 As I read the Respondents submissions the Respondent contends that a poolhouse or a greenhouse is one thing whereas a self-contained house is quite another. I do not see why this should be so. In this case the house on the Second Property was adapted in such manner that it was and is ancillary to the use of the house on the Main Property. (It is also conceivable that the house on the Second Property could be ancillary without alteration. Assume by way of hypothesis only that it had not been adapted in any manner at all but that the Applicants' large family (five children) need the house on the Second Property in which to live perhaps because the Applicants needed more space in the house on the Main Property, and more particularly because of Mrs. Kamper's health problems. It does not seem to me that it is likely that the latter alternative would bring about any different result; on this hypothesis the house on the Second Property would nevertheless be ancillary) 41 If anything and under the Act as amended the Ryan tests are easier to apply. The words "a building" have been replaced by "building or buildings". The question in Kinging as to the status of the cabana would not be relevant. Assuming compliance with the Ryan tests, which is the case in this matter, I can see no reason why a seemingly arbitrary limitation or distinction not referred to in the Act should be adopted. If the legislation which is couched in plain and ambiguous language, goes further than was intended or desired, that it is a matter for the legislature to rectify. 42 Mr. Xenos said that a consolidation of the Properties would have cured any possible problem. I am not at all sure that this is so. Leaving aside any other considerations I doubt whether the local authority would permit consolidation. In Coleman subdivision was necessary in order to achieve the passing of plans for a second house, on what was previously the same lot. In any event there was no such consolidation and so that comment as to what might have been is hardly relevant, 43 In McMillan Isaacs J thought it relevant to enquire as to how the land was valued by the Valuer-General. The Respondent referred to McMillan and the fact that the Main Property and the Second Property are separately valued, and in particular to section 26 of the Valuation of Land Act 1916 which reads as follows: "Where several parcels of land adjoin, are owned by the same person, and where no part is leased, they shall be included in one valuation, unless the Valuer-General otherwise directs: Provided that any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation." While, in my view this is a relevant factor, it is not decisive and does not detract from the Ryan principles. Ryan which was decided after McMillan did not specify this aspect as a further test. 44 In respect of the subsequent relevant years the Applicants are entitled to the PPR exemption for the Second Property and the assessment is to this extent set aside. Part F Interest and costs: 45 The Respondent submissions indicate in clause 2 that the assessment referable to the 2001 and 2002 land tax years includes interest in consequence of late lodgement of returns... Mr Xenos said nothing whatever about interest and did not seek any reduction in this regard. (I note however that interest apparently relates to the 2001 and 2002 land tax years and which fall within the earlier relevant years and in respect of which the Applicants have failed). I do not consider it necessary in the circumstances to consider or deal with this aspect. 46 The Applicants sought an order for costs. This case is in no way appropriate for such an order in favour of either party and I make no order as to costs. Part G Conclusion 47 In summary and leaving aside the earlier relevant years, and in respect of which the Applicants have no case, the position in respect of the subsequent relevant years is that, as the Respondent concedes, the Ryan tests were satisfied. The legislation now allows the PPR exemption where there are buildings. The term "building" is a term which could have a wide range of meanings. It could mean a shed and it could also mean a large house. So long as it is used in ancillary fashion the statutory provisions are satisfied. There can be no doubt that the house on the Second Property is ancillary. It may be an expensive and perhaps even extravagant ancillary but that is not to the point. 48 Accordingly the decision under review is affirmed in respect of the earlier relevant years and set aside in respect of the subsequent relevant years. 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.