New South Wales Supreme Court CITATION : Evatt v Chief Commissioner of Land Tax [1999] NSWSC 1317 CURRENT JURISDICTION : Administrative Law Division FILE NUMBER(S) : 30069/98 HEARING DATE(S) : 7/6/99, 2/7/99 JUDGMENT DATE : 9 February 2000 PARTIES : Victor Evatt (Plaintiff) Chief Commissioner of Land Tax (Defendant) JUDGMENT OF : Dunford J COUNSEL : C Robinson (Plaintiff) HR Sorensen (Defendant) SOLICITORS : Ward Maxwell & Co (Plaintiff) IV Knight, Crown Solicitor (Defendant) CATCHWORDS : TAXES AND DUTIES - land tax - exemption - whether land used "solely" as a "site" for a "public garden" - used also for other purposes - WORDS & PHRASES - public garden - public reserve - site. Land Tax Management Act 1956, ss 9, 10; ACTS CITED : Taxation Administration Act 1996; Evidence Act 1995, s 54. JAW & S Property Management Nominees Pty Ltd v Commissioner of Stamp Duties [1989] 1 Qd R 530; Council of the Municipality of Randwick v Rutledge & Ors (1959) 102 CLR 54; McMillan v Commissioner of Land Tax [1972] 1 NSWLR 545; CASES CITED : Commissioner of Land Tax v Christie [1973] 2 NSWLR 526; Stephen v Federal Commissioner for Land Tax (1930) 45 CLR 122; Federal Commissioner of Taxation v Royal Sydney Golf Club (1943) 67 CLR 599; Penrith Rugby League Club Ltd v Commissioner of Land Tax (1983) 2 NSWLR 616; St George Leagues Club Ltd v Commissioner for Land Tax (1983) 83 ATC 4736 . DECISION : Summons dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES ADMINISTRATIVE LAW DIVISION DUNFORD J 9 FEBRUARY, 2000 30069/98 - Victor EVATT -v- Chief Commissioner of Land Tax HEADNOTE The plaintiff sought an exemption from land tax under the provisions of s 10(1)(g)(vi) of the Land Tax Management Act 1956 ("the Act"). The section provides that certain lands shall be exempted from taxation under the Act, including: "(g) land owned by or in trust for any person or society and used or occupied by that person or society solely as a site for . . . (vi) a public garden, public recreation ground or public reserve." The plaintiff was the registered proprietor of the land described in three Certificates of Title consisting of eleven lots. There was a single fence around the perimeter of the entire eleven contiguous lots, which included a large house part of which was used as a private residence, whilst the balance and adjoining building were used to house a toy and railway museum, and there were extensive gardens on parts of the remaining land. A common admission fee was charged to gain entry to the house, gardens and museum, which were open to the public between 10 am and 5 pm daily. The plaintiff received no financial profit from this revenue which was spent on maintenance of the gardens. Held: (i) Parts of the property satisfied the requirements of a "public garden": Council of the Municipality of Randwick v Rutledge & Ors (1959) 102 CLR 54 considered and followed. (ii) To come within the exemption, the land must have been used or occupied "solely" as a "site" for the specified purpose: McMillan v Commissioner of Land Tax [1972] 1 NSWLR 545 referred to. (iii) The concept of "site" is not the same as ownership, title deed, lot or enclosed area, but depends on there being a unity in the land, both in its topography and in its use and occupation: Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 applied. (iv) Because a common admission fee was charged to the public for access to the whole of the property, no part of it could be said to have an independent or separate use, and therefore, the plaintiff's land constituted a single site which was not used or occupied solely for the relevant purpose (i.e. a public garden), and therefore such land was not exempt from tax under the Act: Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 applied. Stephen v Federal Commissioner for Land Tax (1930) 45 CLR 122; Federal Commissioner of Taxation v Royal Sydney Golf Club (1943) 67 CLR 599; St George Leagues Club Ltd v Commissioner for Land Tax (1983) 83 ATC 4736 considered. THE SUPREME COURT OF NEW SOUTH WALES ADMINISTRATIVE LAW DIVISION DUNFORD J 9 FEBRUARY, 2000 30069/98 - Victor EVATT -v- Chief Commissioner of Land Tax JUDGMENT 1 HIS HONOUR: By his Summons, as amended during the hearing on 7 June 1999, the plaintiff claims the following: "1. An order setting aside the assessments for the Land Tax Years 1991 to 1995 issued by and on behalf of the Commissioner of Land Tax in respect of the Plaintiff's property "Leurella" at 41 Balmoral Road Leura. 2. A declaration that Lots 1 to 5, and Lots 7, 22, 23, 24 and 25 of Section 6 DP3469 were, exempt from Land Tax under the provisions of Section 10(1)(g)(vi), or 10(1)(r)(iii) of the Land Tax Management Act during the Land Tax Years 1991 to 1995. 3. A declaration that Lot 6 of Section 6 DP3469 was exempt from Land Tax under the provisions of Section 10(1)(r)(iii) of the Land Tax Management Act during the Land Tax Years 1991 to 1995. 4. A declaration that Lot 6 of Section 6 DP3469 was exempt from Land Tax under the provisions of Section 10(1)(r)(iii) of the Land Tax Management Act during the Land Tax Years 1991 to 1995. 5. An order including an interlocutory order staying payment of the assessments until further order of the Court. 6. Such further or other orders and declarations as to this Honourable Court shall be deemed necessary. 7. Costs." I observe that paras 3 and 4 are in identical terms. Later during the hearing, on 2 July 1999, the claims for exemption under s 10(1)(r)(iii) on the basis that part of the land was used as the plaintiff's principal residence were abandoned. 2 Since 27 September 1984 the plaintiff has been the registered proprietor of the land comprised in Certificates of Title volume 1617, folio 149 (being lots 3 to 7 inclusive), volume 1617, folio 159 (lots 1 and 2) and volume 2444, folio 209 (lots 22 to 25 inclusive). The land is located at Leura, is bounded on three sides by Olympian Parade, Balmoral Road and Gordon Road and is known as "Leurella", 41 Balmoral Road, Leura. There was no direct evidence as to its size but on my calculations and based on the measurements noted on the certificates of title it appears to comprise approximately 5 acres, 1 rood, 25½ perches; approximately 2¼ hectares. It is enclosed within a single fence around the perimeter of the whole 11 contiguous lots. Balmoral Road runs north-south and lots 1 to 7 are on its western side. The northern boundary is constituted by Gordon Road onto which lots 22, 23 and 1 abut, whilst the southern boundary of lots 7, 24 and 25 is formed by Olympian Parade. It has for the relevant land tax years, all been the subject of a single assessment. 3 The land was acquired early in the twentieth century by the grandfather of the present owner who had a large family home built on lots 6 and 7 in 1914. The house comprises approximately 12,000 square feet of which 7,500 square feet is used as a private residence and is currently exempt under s 9(3C) (principal private residence), and whether this exemption is justified is not one of the issues in this case, whilst the balance and adjoining building has been used since 1984 to house the "New South Wales Toy and Railway Museum" which is open to the public between 10 am and 5 pm each day. 4 Apart from the house and the adjoining building there is also a garden area which is also open to the public each day from 10 am to 5 pm. Up to 700 members of the public visit the museum and garden area each week. There is an admission charge which covers both the museum and garden area which goes towards defraying the cost of maintenance of the garden by employed gardeners, and the plaintiff receives no financial profit from the revenue. 5 At the request of the parties a view was held on 7 June last. Such a view now constitutes evidence of the facts: Evidence Act 1995 s 54. 6 The house is towards the south eastern area of the property and whilst a dining room, lounge room and music room are roped off so that members of the public can view such rooms from their respective doorways, other rooms to which the public are admitted contain family and other memorabilia, badges, photographs including photographs of racehorses owned by Mr CA Evatt winning races, rocking horses, model aeroplanes, a display of old costumes, toys of various generations and such like, whilst one room upstairs is substantially a memorial to the late Dr HV Evatt QC. 7 North of the house along the Balmoral Road frontage are extensive gardens which are well maintained and which extend north as far as the Gordon Road boundary. There are wide pathways delineated by hedges, and dotted around this part of the property are a number of seats of the kind formerly used at railway stations which still bear the names of the stations from which they apparently came e.g. Enfield, North Sydney. Some of the seats also provide shelter from wet weather. There is also erected a sign "Redfern" of the same construction as was formerly (and possibly in places still is) used on railway stations to designate the name of the station. This area would be suitable for persons to walk in, relax and admire the flowers and greenery, and the seats would be suitable for use and relaxation in conjunction with such activities. 8 Another area to the north-west of this is described as "the meadow" and is entered through a gate which has obviously come from a railway level crossing, and which has at its side the old "level crossing" sign that was common in this state years ago. In this area the grass is not mown close but is a little longer, thus giving the "meadow" appearance. 9 South of the meadow there is a building which was formerly a barn in which are stored machinery, chemicals, hoses, gardening and general tools, and near it is an open lawn with a trellised rose-covered walkway through its middle. The grassed area also contains seats which apparently did not come from the railways and are not marked as such. 10 South of this area is a sign from Eveleigh Railway Workshops, old fashioned indicators for the next train's destination, and the front of a steam locomotive made up as if it is coming out of the doors of a workshop. This is surrounded by more garden area, but is close to another area which leads to the building containing the model railway display and contains a lot more railway memorabilia including signals, and more signs of various kinds such as were formerly common on railway stations. On the southern side of the building holding the model railway is a model reconstruction of the 1944 Allied landing at Dunkirk. 11 South and east of the house are manicured lawns and gardens with more seats containing railway station names whilst, along the Olympian Parade frontage are signs describing the premises, directing visitors to the front door to pay and matters of that nature. The main sign at the front reads: "Leurella Toy and Railway Museum of New South Wales, Best and Biggest Collection in Australia, Historic Mansion, Superb Gardens, DR HV Evatt Memorial, World Famous Collection, Toys, Dolls, Model Trains, Ships, Planes, Soldiers, Railways Memorabilia. Open 10 am to 5 pm everyday." Another sign states that admission to the house, garden and museum is adults $6, children $2. 12 The property was featured in an article in the June 1993 edition of the magazine "Home Beautiful", and also in a publication entitled "Guide to the Gardens of the Blue Mountains". 13 Although the evidence is not specific or detailed on this point and there is no survey evidence, it appears that the house, the model railway display, toy soldier display and the front garden are on lots 6 and 7 (part CT 1617-149), the garden fronting Balmoral Road, the meadow, the trellis-covered rose garden and locomotive mock-up emerging from the railway workshop are all on lots 1, 2, 3, 4 and 5 (balance CT 1617-149 and CT 1617-159), and nothing in particular except a chicken coop and virgin bush on lots 24 and 25 (CT 2444-209). 14 By Notice of Assessment issued 8 May 1995, the defendant assessed land tax payable on the whole of the property for the 1991 tax year, and by further notices issued 5 July 1995 similarly assessed land tax for the tax years 1992, 1993, 1994 and 1995. The plaintiff objected to the assessments and by Notice of Determination dated 11 May 1998 the objection was allowed in part to the extent that it was determined that part of Lot 6 was in the relevant years used as the plaintiff's principal place of residence and the Valuer-General was requested to determine the land values at the relevant times for the remainder. It is against the refusal to allow exemption for the remainder of the property that this appeal is brought. 15 By notice of motion filed 28 September 1998 the defendant sought summary judgment on the ground that the objections were out of time. In my judgment of 16 October 1998 I dismissed this application, and at the final hearing this point as to the objections being out of time was not pursued. 16 By virtue of s 9(1) Land Tax Management Act 1956 ("the Act") land tax is payable by the owner of land on the "taxable value" of all the land owned by that owner which is not exempt from taxation under that Act, and is charged on land as owned at midnight on 31 December immediately preceding the year for which the tax is levied (s 8). For the 1991 and 1992 tax years the taxable value was the "adjusted value" which was based on the "land value" (s 3(1)) which in turn was its value as determined by the Valuer-General or the Western Lands Commissioner, (as the case may be) (s 54). For the 1993 and subsequent tax years, the "taxable value" of land is the "land value" of each parcel of land (s 9(2)) and "land value" is its value as ascertained by the defendant (ss 7(1), 55, 62U), although he may delegate such power to the Valuer-General, a person engaged in the administration of the Act or a registered and practising real estate valuer (s 62W). 17 By s 10 certain lands are exempted from taxation under the Act including: "(g) land owned by or in trust for any person or society and used or occupied by that person or society solely as a site for . . . (vi) a public garden, public recreation ground or public reserve." There are also, and have been, under paragraph (r) exemptions in respect of premises used and occupied as the principal place of residence of the owner which have varied from time to time, but as the plaintiff no longer presses this as a ground of exemption in this appeal, it is not necessary to consider the terms of such exemption any further. 18 Appeals against determinations of objections to assessments are now governed by the Taxation Administration Act 1996 ss 96-101 and the onus of proving the case is on the appellant (plaintiff): s 101. As the plaintiff relies on statutory exemptions to the general provision, it is for the plaintiff to establish that the conditions stipulated by those exemptions are satisfied: JAW & S Property Management Nominees Pty Ltd v Commissioner of Stamp Duties [1989] 1 Qd R 530 at 538, 88 ATC 4966 at 4973. 19 To qualify for exemption under s 10(1)(g)(vi), the land must be used or occupied by the owner "solely as a site for . . . a public garden, public recreation ground or public reserve". The nature of a "public reserve" was considered by the High Court in Council of the Municipality of Randwick v Rutledge & Ors (1959) 102 CLR 54 where the issue was whether the Australian Jockey Club was exempt from liability to pay rates on the ground that the Randwick Racecourse was used for a "public reserve" within the meaning of the Local Government Act 1919 and "public reserve" was defined by the same Act as including land dedicated for "public health, recreation, enjoyment or other public purpose of a like nature". 20 Windeyer J, with whom other members of the Court agreed, said at 88-9 that for land to be used for public recreation and enjoyment, so as to be in some sense akin to a public park, two conditions needed to be fulfilled; the land must generally be open to the public as of right, and it must not be a source of private profit. His Honour said that it was not necessary for all members of the public to have free access to all parts of the land at all times, they could be excluded for misbehaviour, the land could be limited to use for a particular purpose e.g. golf course, ocean beach etc, and at certain times e.g. at night, the public could be wholly excluded. Finally, it was not incompatible with land being used for public recreation that the public were charged an entry fee, provided that such entry fees were all devoted to the maintenance of the reserve and no profits were earned by the owner. Menzies J at 64-5, in a separate judgment, described the requirements of a public reserve in substantially similar terms. 21 Although the phrase "public garden, public recreation ground or public reserve" or any parts of it, are not defined in the Act, I am satisfied that Rutledge's Case provides an authoritative guide to how the matter should be approached, and I am satisfied that parts of the property satisfy the requirements of a "public garden" including the extensive gardens north of the house along the Balmoral Road frontage described in para 7 above and also the areas described as "the meadow" (para 8) and the lawn with a trellised rose-covered walkway (para 9) notwithstanding the reference to railway signs on seats and such like. Seats are incidental to a public garden (as is the barn used as the gardener's store and work room) and the railway references in such areas can fairly be regarded as merely decorative. 22 On the other hand, the area south of the rose garden with the mock-up of a locomotive appearing to come out of a workshop and the other railway indicia in that area, although partly in a garden setting, are in substance part of the railway museum and the manicured lawns between the residence and Olympian Parade form part of the curtilage of the house providing aspect and setting for the building and can fairly be described as the front garden of the house. My conclusion that the parts of the land indicated constitute a public garden is not affected by the considerations that an entry fee is charged which does not provide a profit to the plaintiff or the fact that members of the plaintiff's family have access to the property after hours when the public are excluded. 23 However, to come within the exemption, not only must the land be used or occupied as a public garden or another specified purpose, but it must be used or occupied "solely" as a "site" for such purpose. As Isaacs J pointed out in McMillan v Commissioner of Land Tax [1972] 1 NSWLR 545 at 558 quoting from Rutledge's Case at 93: "The words "exclusively" and "solely" are familiar in fiscal and rating law. Where an exemption from rating depends on the use of land exclusively for a particular stated purpose then the use must be for such purpose only . . . The presence of "exclusively", "solely" or "only" always adds emphasis; and is not to be disregarded . . . As Kitto J said in Lloyd v Federal Commissioner for Taxation (1956) 93 CLR 645 at 671, such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral to or independent, as distinguished from incidental to the stipulated use." 24 It is therefore first necessary to identify the "site", and then examine whether such "site" was used or occupied "solely" for the relevant purpose. The concept of "site" is not identical to that of ownership, title deed, lot or enclosed area, but depends on there being a unity in the land, both in its topography and in its use and occupation: Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 at 534, 538. In some cases it may involve a question of fact and degree: ibid at 533. 25 In Stephen v Federal Commissioner for Land Tax (1930) 45 CLR 122 land was exempt from land tax under the Land Tax Assessment Act 1910 (Cth) if it was "used or occupied . . . solely as a site for . . . a building owned and occupied by a society, club or association, not carried on for pecuniary profit": s 13(g)(3), and it was held that buildings erected on Randwick and Warwick Farm Racecourses were not exempt although owned or occupied by the Australian Jockey Club, which was a body not carried on for pecuniary profit, because they were all used in connection with the respective racecourses and were within the racecourse enclosures. Dixon J said at 141 in reference to this claim for exemption: " It fails because the buildings do not stand on distinct parcels of land and are not separately occupied. They are built upon land used as a racecourse and form part of its equipment. Their "site" is the racecourse and this is not solely used for the buildings owned and occupied by the Club." See also Starke J at 136 to a similar effect. 26 A similar question arose in Federal Commissioner of Taxation v Royal Sydney Golf Club (1943) 67 CLR 599 where enclosed within the one area owned by the Club were a golf course, tennis courts, bowling greens, squash courts and a club house. Section 13(h) provided for exemption of land used primarily and principally for athletic sports or exercises (other than horseracing or golf) and exemption for the tennis courts, bowling greens and squash courts was upheld on this ground, which contained no reference to a "site". As regards the club house, which was used for accommodation and as a social meeting place and for the convenience of members playing any of the games mentioned, exemption was claimed under s 13(g)(3) as land "used or occupied solely as the site for . . . a building . . ." At first instance, Herron J upheld the claim for exemption of the club house and its surrounding curtilage, and on appeal the High Court was equally divided. Latham CJ, who would have allowed the Commissioner's appeal, referred at 607 to what had been said by Starke and Dixon JJ in Stephen's Case and went on: "This interpretation of site must be regarded as binding on the Court. In my opinion Stephen's case has decided that where a building occupies a position on an area of land owned by one owner, but does not occupy the whole of that area, then, unless the building is "owned or occupied separately" (by which I understand completely separately) from the rest of the area, no part of the area can be said to be land used or occupied solely as the site for a building within the meaning of s 13(g)(3) of the Act", whilst Starke J (who also would have upheld the appeal) said at 614 that the exemption did not extend to cases where the site of the building was portion of an area of land owned and occupied as one area or an integral whole. On the other hand, Rich and McTiernan JJ were not prepared to upset the primary judge's findings that the club house was used separately from the golf course and other sporting facilities, although McTiernan J at 617 pointed out that to justify the exemption it was necessary to establish that the land on which the club house stood was not included in the golf course so that it merged in the lands used as a site for the golf course, but rather that it was a site which was independent of the golf course and formed the site of the club house. 27 In Penrith Rugby League Club Ltd v Commissioner of Land Tax (1983) 2 NSWLR 616 Hunt J held that a car park used for club purposes was exempt as part of the "site" of the club building under s 10(1)(g)(iii) notwithstanding that it was separated from the walls of the club building by a public road which was in reality no more than a driveway for club patrons because there was a "clear unity" between the club building and the car park. 28 Finally, in St George Leagues Club Ltd v Commissioner for Land Tax (1983) 83 ATC 4736 at 4745, Lee J held that the Royal Sydney Golf Club Case was authority for the proposition that there could be an exemption for part although not all of the land owned in a single ownership, but said that case left untouched the notion of "site" expressed in Stephen's Case. He held in that case that certain club buildings used by members of the club when visiting the complex had an "independent existence" from the adjoining caravan park and were therefore exempt as a separate "site" although the remainder of the club land in the area was not exempt. 29 In some respects it can be suggested that the land owned by the plaintiff consists of a number of separate "sites" such as the gardens fronting Balmoral Road (lots 1-5) with the meadow and rose garden as one site, the main home with its front garden as a second site and the model railway and railway museum with the signs, paraphernalia, locomotive front etc as a third site; but it is ultimately a question of fact and degree, and it is necessary to consider whether there is a unity in the whole of the land both in its topography and in its use and occupation so that the whole land should be regarded as a single whole, or whether any part of it has an independent or separate use. 30 In my view the whole of the plaintiff's land must be regarded as a single site; the gardens fronting Balmoral Road are not really separate and distinct from the other areas of garden such as those fronting Olympian Parade, the toy museum (apart from the model soldiers and model railway) is located in the main house building, and the railway memorabilia, although largely located near the model railway display, is also spread throughout the garden area with the railway station seats, level crossing sign etc. Although, as already indicated, I do not consider the location of these seats would of themselves prevent the garden area being classified as an area used "solely" as a garden, their presence is not without some significance in considering the unity of the land in the context of defining the "site". 31 But the most decisive consideration in my view is that a common admission fee is charged to the public for access to the whole property including the home, the toy and railway museum, the model railway and the garden areas. In these circumstances no part of the property can be said to be used or occupied independently of any other part; but there is a unity in its use and occupation as an integral whole. It follows that the whole of the plaintiff's land constitutes a single "site", which "site" is not used or occupied "solely" as a "site" for a public garden, public recreation ground or public reserve, and the land is not exempt from land tax under s 10(1)(g)(vi) of the Act. 32 For these reasons I order that the Summons be dismissed with costs and direct the entry of judgment accordingly. 33 The costs of the day of 15 September 1998 were reserved - I make no order for the costs of that day. *********** Last Modified: 06/26/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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