Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Haddad v Chief Commissioner of State Revenue [2014] NSWCA 23 Hearing dates: 5 February 2014 Decision date: 21 February 2014 Before: Macfarlan JA at [1] Ward JA at [2] Leeming JA at [78] Decision: 1. If it be necessary, leave to appeal from the costs decision of the Appeal Panel should be granted. 2. The appeal should be dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: TAXES AND DUTIES - land tax - exemptions Legislation Cited: Administrative Decisions Tribunal Act 1997 Land Tax Management Act 1956 Supreme Court Act 1970 Uniform Civil Procedure Rules 2005 Cases Cited: Arena Management Pty Ltd (receiver and manager appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 80 NSWLR 652 AT v Commissioner of Police, NSW [2010] NSWCA 131 B & L Linings Pty Limited v Chief Chief Commissioner of State Revenue v McGrath [2008] NSWSC 387 Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 C G Maloney Pty Ltd v Noon [2011] NSWCA 397 Commissioner of Taxation v Glennan [1999] FCA 297; (1999) 90 FCR 538 Dasreef Pty Ltd v Hawchar [2010] NSWCA 154 Dillon v Gosford City Council [2011] NSWCA 328 Haddad v Chief Commissioner of State Revenue [2011] NSWADT 17 Haddad v Chief Commissioner of State Revenue (No 2) [2011] NSWADT 215 House v King (1936) 55 CLR 499 Kelly v The Queen [2004] HCA 12; 218 CLR 216 Lo v Chief Commissioner of State Revenue [2013] NSWCA 180 McGuirk v University of NSW [2010] NSWCA 1 Metricon Qld Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 982 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Teese v State Bank of New South Wales [2002] NSWCA 219 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 Wheeler v Somerfield [1966] 2 QB 94 World Best Holdings Limited v Sarker [2010] NSWCA 24; Category: Principal judgment Parties: Sally Haddad (Appellant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: Dr Haddad (Appellant - McKenzie friend) A H Rider (Respondent) M Sneddon (Amicus curiae) Solicitors: I V Knight Crown Solicitor (Respondent) File Number(s): CA 2011/290766; 2012/085399 Decision under appeal Jurisdiction: 9113 Citation: Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 35; Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 46 Before: D Patten, Deputy President; R Perrignon, Judicial Member; C Bennett, Non-Judicial Member File Number(s): 119005 Judgment 1MACFARLAN JA: I agree with the orders proposed by Ward JA. I agree also with her Honour's reasons but do not express a view on the issue concerning leave to appeal dealt with in [16] to [24] as the point was not fully argued and its resolution is unnecessary for the disposition of the appeal. I further agree with Leeming JA's additional reasoning in support of the orders to be made. 2WARD JA: Ms Haddad is the owner of land at Wadalba in New South Wales, in respect of which the respondent (the Chief Commissioner of State Revenue) issued assessments for land tax for the 2004 to 2009 land tax years. Ms Haddad unsuccessfully objected to those assessments. Ms Haddad then applied to the Administrative Decisions Tribunal for a review of the respondent's decision. The primary issue before the Tribunal was whether Ms Haddad was entitled to the principal place of residence ("PPR") exemption from land tax under s 10(1)(r) of the Land Tax Management Act 1956 (NSW) ("the Act"). 3The Tribunal was not satisfied that Ms Haddad had used and occupied the corrugated iron building on the Wadalba land as her principal place of residence ([2011] NSWADT 17) and found that neither the PPR exemption nor certain other claimed exemptions applied to the Wadalba land for the land tax years in question. It affirmed the assessments. The Tribunal declined to make any award of costs in respect of the Tribunal proceedings ([2011] NSWADT 215). 4Ms Haddad appealed to the Appeal Panel. The Appeal Panel dismissed her appeal ([2011] NSWADTAP 35) and Ms Haddad was subsequently ordered to pay the respondent's costs of that appeal ([2011] NSWADTAP 46). Ms Haddad has appealed from the whole of each of the decisions of the Appeal Panel. Background 5Ms Haddad became the owner of the Wadalba land in March 2002. There was on the land both a three bedroom building and a corrugated iron building (described in the proceedings before the Tribunal by Ms Haddad as a "non attached two bedroom unit" and by the respondent as a shed - [13] of the Tribunal's reasons). Ms Haddad was also the owner of a residential property at Telopea. 6The three bedroom building on the Wadalba land was leased to tenants from some time in 2002 until August 2007. For the balance of the relevant land tax years it was not tenanted. The corrugated iron building, which Ms Haddad claimed was her principal place of residence, was destroyed by fire in July 2007. It had not been rebuilt by the 2009 tax year. The Tribunal noted (at [10] of its first judgment - Red 61V) that it was not in dispute that no one had lived at the Wadalba land since August 2007. Dr Haddad takes issue with this, pointing to evidence given by Ms Haddad at the Tribunal that he submitted was inconsistent with this finding (Black 61M-X, 62B-D). Nevertheless, the evidence to which Dr Haddad points did not suggest that Ms Haddad had occupied the three bedroom building after 2008 on any different basis than her earlier claimed occupation of the two bedroom building (which the Tribunal was not satisfied amounted to a change in her principal place of residence from that in Telopea). 7The Tribunal concluded that the Wadalba land had not been continuously used and occupied by Ms Haddad for residential and for no other purposes since 1 July in the year preceding each of the 2004 to 2007 land tax years and therefore that Ms Haddad was therefore not entitled to the exemption under clause 2(2)(a) of Schedule 1A of the Act. It further held that the three bedroom building on the land did not constitute an "excluded residential occupancy" and that the respondent was entitled to refuse to exercise his discretion in clause 2(2)(b) of Schedule 1A to exempt the land from land tax. 8The Tribunal further found that other claimed exemptions (under clauses 6 and 8 of Schedule 1A of the Act) did not apply to the Wadalba land in any relevant tax year; nor did ss 101(p) and (p1) apply to the land on the facts during the tax years). 9The Appeal Panel affirmed the Tribunal's decision. In so doing, it found that it was unnecessary to determine Ms Haddad's claim as to her occupation of the two bedroom building since, whatever the factual merits of that claim, for so long as the three bedroom property was tenanted it was necessary for Ms Haddad to establish that one of the concessions in Part 3 of the Act applied and the Tribunal was correct in concluding that she had not done so. In its subsequent costs decision (at [2]), the Appeal Panel expressed the opinion that the appeal was one that was bound to fail, noting that Ms Haddad had failed at first instance on the same preliminary point - namely, that the PPR exemption could not apply as the three bedroom building was not an "excluded residential occupancy" within the definition in clause 4(2) of Schedule 1A of the Act. The Appeal Panel ordered costs against Ms Haddad on the basis that in those circumstances it was fair to do so. Procedural matters Leave for Counsel to appear as amicus curiae; Representation of Ms Haddad 10At the hearing of the appeal, leave was given for Mr Sneddon of Counsel to appear as amicus curiae, to ensure that the Court had the assistance of a contradictor in the proceedings given that Ms Haddad was unrepresented and her husband, Dr Haddad, who had previously appeared as her agent, had no legal qualifications. 11Application was then made by Dr Haddad to appear on Ms Haddad's behalf. The respondent objected to such leave being granted, on the basis that good grounds for such leave had not been shown, referring to Teese v State Bank of New South Wales [2002] NSWCA 219 at [12]. However, in circumstances where one of the three issues sought to be agitated by Mr Sneddon was dependent on fresh evidence being adduced pursuant to s 75A of the Supreme Court Act 1970 (NSW), and such an application was one properly to be brought by Ms Haddad, leave was given to Dr Haddad to represent Ms Haddad as a McKenzie friend. Respondent's motion as to incompetence of appeal 12The respondent, by notice of motion filed 11 April 2012, sought the dismissal pursuant to Rule 51.41 of the Uniform Civil Procedure Rules 2005 (NSW) of the notice of appeal as incompetent both in relation to the appeal from the decisions on costs and insofar as it sought orders 2 and 4. 13Order 2 as sought in the notice of appeal asked for rulings in relation to the determination of issues relating to the claimed allowance by the respondent of a land tax exemption for the following lodgement of an initial land tax return in 2003. Order 4 sought, in effect, a determination of an entitlement to a s 9C exemption. As to the latter, this raised an issue that Dr Haddad informed the Court was not pressed on the appeal and hence need not be considered. 14As to the order 2 rulings sought in the notice of appeal, the respondent submits that these would require this Court to make a finding of fact, namely, that Ms Haddad had lodged an initial land tax return some time in March or April 2003. The rulings sought in this regard would also appear to require a further factual finding that the respondent had exercised his discretion to allow a land tax exemption in or about 2003, insofar as the rulings sought include a ruling as to whether the respondent could change such a determination (which necessarily assumes that one was made). 15This Court's appellate jurisdiction is limited, pursuant to s 119(1) of the Administrative Decisions Tribunal Act 1997 (NSW) ("the ADT Act"), to questions of law. Therefore, to the extent that the rulings sought in order 2 of the notice of appeal include the making of findings of fact, the appeal is incompetent (B & L Linings Pty Limited v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481). It is not, however, necessary to identify the particular order 2 rulings that fall outside this Court's appellate jurisdiction given the conclusion I have reached that, insofar as it is competent, the appeal should be dismissed for the reasons set out below. Leave to appeal from decisions on costs 16Ms Haddad's appeal from the substantive decision of the Appeal Panel decision is brought as of right. However, issues were raised as to whether Ms Haddad requires leave to appeal from the Appeal Panel's separate costs decision, having regard to the proper construction of s 119(1A)(c) of the ADT Act, and as to whether her appeal is incompetent insofar as it seeks to appeal the costs decision of the Tribunal at first instance. 17As to the latter, given that the Tribunal's costs decision was not the subject of any appeal to, or decision by, the Appeal Panel and this Court's appellate jurisdiction pursuant to s 119 of the ADT Act is limited to an appeal from the Appeal Panel's decisions on questions of law, Ms Haddad appeal is incompetent insofar as it seeks now to raise a challenge not raised before the Appeal Panel 18As to the former, the question whether leave is required to appeal from the Appeal Panel's decision turns on the proper construction of s 119(1A)(c) of the ADT Act, which provides that an appeal does not lie to the Supreme Court except by leave against "a decision [of the Appeal Panel] as to costs". 19In Wheeler v Somerfield [1966] 2 QB 94, where there was a similar statutory provision (though not in identical terms), it was held that leave was not necessary where an appeal was brought as of right in respect of matters other than costs and there was also a complaint as to costs. However, while similar, in that case the relevant statutory provision referred to an order "as to costs only which by law are left to the discretion of the court" (my emphasis). Section 119(1A)(c) of the ADT Act does not include the word "only". 20Wheeler has been referred to a number of times by this Court, including in AT v Commissioner of Police, NSW [2010] NSWCA 131; Dasreef Pty Ltd v Hawchar [2010] NSWCA 154; World Best Holdings Limited v Sarker [2010] NSWCA 24; McGuirk v University of NSW [2010] NSWCA 1; C G Maloney Pty Ltd v Noon [2011] NSWCA 397; Arena Management Pty Ltd (receiver and manager appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 80 NSWLR 652 and Dillon v Gosford City Council [2011] NSWCA 328. 21In McGuirk, Hodgson JA, considering the same statutory provision as the present, in a case where the only orders the subject of appeal were cost orders, was of the opinion (at [16]) that the words "decisions as to costs" should be narrowly construed and that an application for leave to appeal was necessary. A similar approach was taken in World Best, where Handley AJA (with whom Tobias and Campbell JJA agreed) noted that the word "only" did not appear in s 119(1A)(c) ([102]-[104]). That distinction was also noted in Dasreef at [61], the provision there under consideration not being one containing the word "only". 22In Arena at [129], Campbell JA (with McColl and Macfarlan JJA agreeing) observed in obiter dicta that Wheeler had been followed in this Court in Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 at [200] and Dasreef at [61] and said that if any party wished to argue that Wheeler should not be followed, consideration would need to be given to sitting a bench of five judges. There, however, his Honour was considering whether leave was required for the appeal as to costs under s 101(2)(c) of the Supreme Court Act which again refers to a decision as to "costs only". 23In my opinion, there is a relevant distinction between s 119(1A)(c) of the ADT Act, which does not include the word "only", and other similar statutory provisions that refer to decisions or orders as to costs "only". I would therefore have been of the view, consistent with that reached in McGuirk and World Best, that leave was necessary for Ms Haddad to appeal from the Appeal Panel's costs decision notwithstanding that she brings that appeal together with her appeal in relation to the Appeal Panel's substantive decision. However, I note that in Dillon, where the court was considering a statutory provision that did not include the word "only", Basten JA (with Macfarlan and Handley JJA agreeing) said that leave should not be required, in line with previous authority (at [58]). 24In light of the conflicting views on this issue, and the fact that the issue was not fully argued, in the present case it is appropriate to proceed as this Court did in C G Maloney, without finally deciding the point. Therefore, in the event that it is necessary, leave to appeal from the costs decision of the Appeal Panel should be granted. Application to adduce fresh evidence 25Mr Sneddon, as amicus curiae, raised three issues for consideration on the appeal. The first of those related to what was said to be a material change of circumstances since the decision of the Appeal Panel on 12 August 2011. That argument is necessarily dependent on Ms Haddad succeeding in her application to adduce fresh evidence. 26What Ms Haddad now seeks to adduce, pursuant to s 75A of the Supreme Court Act, is evidence of the re-valuation by the Valuer General, in November 2012, of the Wadalba land for the land tax years in question. The effect of this, it is said, is that when account is taken of the unutilised value allowance ("UVA") concession for the land, the land value falls below the prescribed land tax threshold for each of the land tax years. Hence, it is argued that the adjusted land tax assessments for land tax years 2004 to 2009 inclusive should be nil. 27Since the re-determination of the land values for the subject land tax years occurred after the decision of the Appeal Panel (and, necessarily, after the original decision of the Tribunal which was handed down on 27 January 2011), Mr Sneddon submitted that there is no need for Ms Haddad to establish special grounds for the admission of this fresh evidence and that in the interests of justice leave should be granted to Ms Haddad to rely upon that fresh evidence. Mr Sneddon contended that if the fresh evidence were not to be admitted then the determination of Ms Haddad's appeal would be on the false premise that, if the appeal failed, land tax would be payable by Ms Haddad. 28The respondent objected to leave being granted for the further evidence to be adduced but also sought, if such leave were to be granted to Ms Haddad, to adduce fresh evidence himself as to the respondent's most recent (18 December 2013) reassessment of land tax for the Wadalba land. The Court was informed that the December assessment has broadly (if not in an identical amount) reinstated the quantum of the land tax to that as assessed in the assessments reviewed by the Tribunal. Such a reassessment operates as an amendment of the initial assessment, not as an independent and additional assessment (Metricon Qld Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 982 at [27]). 29Insofar as the submission advanced by Mr Sneddon was that the issues in this appeal had been rendered hypothetical by subsequent events, that is disputed by the respondent but, in any event, that would not be a basis for the Court allowing the appeal and making orders of the kind that he submitted should be made (namely, that the respondent reimburse any and all moneys paid by Ms Haddad for the subject land tax years, with interest thereon). Both parties accepted that Ms Haddad had lodged, the day before the commencement of the appeal hearing, an objection against the December 2013 reassessment. The ultimate liability for land tax, following the December re-assessment, must await the determination of the recently lodged objection thereto. 30As noted above, this Court's appellate jurisdiction, pursuant to s 119(1) of the ADT Act, is confined to errors of law on the part of the Appeal Panel. This is not, as was readily conceded, a re-hearing. The Appeal Panel cannot be said to have erred in law in failing to consider arguments that were not (and could not have been) before it as to the applicability of any UVA concession (Commissioner of Taxation v Glennan [1999] FCA 297; (1999) 90 FCR 538 [80]-[83]). 31In B & L Linings, Basten JA (at [149]) said that s 75A of the Supreme Court Act does not operate to expand the scope of the appeal permitted by s 119(1) of the ADT Act. (See also Lo v Chief Commissioner of State Revenue [2013] NSWCA 180 at [49].) Mr Sneddon, however, submitted that the fact that this is a re-hearing does not, of itself, exclude the applicability of s 75A(7) and (8) - on the basis that, unlike the position in B & L Linings, there is no direct inconsistency between s 75A(7) and (8) on the one hand and s 119(1) on the other. 32Whether or not that argument be correct is unnecessary to determine since the fresh evidence is, on any view, irrelevant to the question whether the Appeal Panel erred on a question of law in determining the issues that were (unlike the claimed effect of the UVA concession) before it. Therefore, the fresh evidence sought to be tendered by Ms Haddad should not be admitted and it is not necessary to deal with the fresh evidence that the respondent would otherwise have sought to adduce to respond thereto. Appeal Grounds 33In the notice of appeal filed on 14 March 2012, Ms Haddad specified four grounds of appeal. Those grounds are drafted in a somewhat discursive fashion. 34As I understand them, Ms Haddad's complaints may be summarised by reference to four issues. First, that the Tribunal had erred in its determination as to her principal place of residence and that this was not determined by the Appeal Panel ("the PPR ground"). Second, that the Appeal Panel wrongly decided the appeal from the Tribunal's decision on the so-called threshold issue (i.e., as to the application of clause 4(2) of Schedule 1A of the Act) without determining Ms Haddad's principal place of residence and without clear reasons for dismissing Ms Haddad's submissions on the threshold issue ("the threshold issue ground"). Third, that the reasoning used to determine claims not related to the PPR issue was inappropriate ("the other issues ground" - now limited, as I understand it, to the claimed UVA concession). Fourth, that the Appeal Panel dismissed Ms Haddad's application for costs without reasons and on the basis of limited evidence. Those four sets of issues were encapsulated in a statement of issues signed by Dr Haddad. 35On the hearing of the appeal, Dr Haddad informed this Court that all but two of the issues in that statement of issues were still pressed. The two issues no longer pressed (both falling under the "Other Issues" heading) were as to whether Ms Haddad has a claim for exemption under s 9C "incidental to the acceptance of the Threshold issue" and whether she has a claim for exemption under s 10(1)(p1) relating to the protection of threatened species. Dr Haddad informed the Court that the only remaining issue pressed under the "Other Issues" heading should be amended to relate to whether Ms Haddad has a UVA concession under s 9A of the Act. (As noted above, that issue is not one that can be raised in this appeal.) 36As amicus curiae, Mr Sneddon raised only two issues (other than that dependent on the admission of fresh evidence with which I have already dealt): the proper construction of clause 4 of Schedule 1A (relevant to the applicability of the land tax exemption for the land tax years up to and including 2008) and the costs appeal. Relevant legislation 37At the relevant times, s 10(1)(r) of the Act provided for an exemption from land tax for land that is exempt from taxation under the PPR exemption as provided for by Schedule 1A of the Act. 38Schedule 1A, relevantly, provided as follows: 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 ... if the land is: (a) a parcel of residential land... (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. Part 3 - Concessions in application of principal place of residence exemption 4 Concession for land on which there is one other residential occupancy (1) For the purposes of the principal place of residence exemption, if a building or buildings used or occupied for residential purposes contains or contain a residential occupancy other than that of the owner, the use of the building or buildings for the purpose of that residential occupancy may be disregarded if: (a) the residential occupancy is an excluded residential occupancy, and (b) the building contains or buildings contain (out of a total of all rooms in the building or buildings) not more than one of those excluded residential occupancies (not including the occupancy of the owner). (2) For the purposes of this clause, each of the following residential occupancies is an "excluded residential occupancy": (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. (3) Accordingly, land does not cease to be residential land because there is on the land one, but not more than one, such excluded residential occupancy, even if income is derived from the residential occupancy. 39For the 2004 land tax year, the relevant definition of "flat" was: Flat means a room or 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. 40During the 2005-2008 land tax years, the definition of "flat", was amended to read as follows: "flat" means a room or a suite of rooms (whether or not forming part of a building or a detached building): (a) used or occupied as a separate dwelling, or (b) so constructed, designed or adapted as to be capable of being used or occupied as a separate dwelling, but does not include a single dwelling. (my emphasis) 41For the 2009 land tax year, the words "but does not include a single dwelling" were omitted from the definition of "flat" (and the definition of "single dwelling" was correspondingly omitted). 42"Single dwelling" was defined, for the 2005 - 2008 tax years, as follows: "single dwelling" means a house: (a) used or occupied as a separate dwelling, or (b) so constructed, designed or adapted as to be capable of being used or occupied as a separate dwelling. PPR ground of appeal 43Mr Sneddon did not address the Court on this ground other than insofar as he suggested, somewhat faintly, that there was a finding by the Appeal Panel that Ms Haddad "occupied" the two bedroom "unit". The difficulty with that submission is that it is clear from [12] of the Appeal Panel's reasons that the Appeal Panel was not intending to make any finding of that kind. 44Dr Haddad, on the other hand, filed detailed submissions as to the errors he contends were made as to the determination by the Tribunal of Ms Haddad's principal place of residence and made oral submissions also on this ground. 45In particular, Dr Haddad criticised the basis on which certain matters were contained, or conclusions were reached, in the Land Tax Objection Report made at the time of the respondent's dismissal of Ms Haddad's objection to the land tax assessments. Those matters related to the conclusions to be drawn from: electricity usage data for the corrugated iron building on the Wadalba property during some of the years; data as to Ms Haddad's electronic shopping transactions over the period from 2003 to 2007; the operation of a construction company business, with which the Haddad family were connected, from the Telopea residence; the distance between the Wadalba property and Ms Haddad's place of work at West Ryde; and the fact that Ms Haddad had given the Telopea residence as her mailing address to various entities. 46Dr Haddad's submissions set out in some detail Ms Haddad's response in relation to those matters, pointing to the material that was before the Tribunal and contending that there were gross errors in the Objection Report that it is said had led the respondent (wrongly) to conclude that Ms Haddad's principal place of residence was the Telopea residence. Dr Haddad submitted that the respondent did not give proper consideration to the evidence and suggested that the issue had been pre-determined by the respondent. 47Dr Haddad contended that the finding of the Tribunal as to Ms Haddad's principal place of residence was in error and that Ms Haddad had discharged her onus of proof in the evidence that was provided to the Tribunal. Criticism was made of the steps taken on behalf of the respondent in those circumstances to defend the proceedings brought in the Tribunal. Dr Haddad stressed, in his oral submissions, the impact on Ms Haddad of the proceedings and the respondent's conduct of the proceedings; in particular, complaining as to the use of a private investigator and the issue of subpoenas to third parties in order to investigate her circumstances. 48However, the relevant issue before this Court is whether the Appeal Panel erred in law in finding that the Tribunal did not err in its determination that the PPR exemption did not apply to the Wadalba land. For that purpose, as the Appeal Panel said, it was unnecessary for the Appeal Panel finally to determine Ms Haddad's principal place of residence if (whatever the factual merits of Ms Haddad's claim that she occupied the two bedroom building over the relevant period), she could not, on the facts found by the Tribunal establish her claim to the PPR exemption. 49Until the 2009 land tax year, that issue necessarily turned on the applicability of the Part 3 concessions since, for so long as the three bedroom building was tenanted, the PPR exemption could not otherwise apply as the Wadalba land did not satisfy the definition in s 3 of a "parcel of residential land", not being land "continuously used and occupied by [Ms Haddad] for residential purposes and for no other purposes" and the respondent not being satisfied that it was land used and occupied as Ms Haddad's PPR (for the purposes of clause 2(2)(a) and (b) of Schedule 1A, respectively). 50There is no dispute that the three bedroom building was tenanted during the relevant tax years up to the time that the two bedroom building was destroyed by fire (wrongly said by the Appeal Panel to be 7 July 2007 but in fact August 2007 - [12]). Therefore, even if the latter had been her principal place of residence, Ms Haddad could only establish an entitlement to the PPR exemption for the land tax years 2004-2008 if a relevant Part 3 concession applied. (The Appeal Panel held that for the period after the two bedroom building was destroyed, Ms Haddad's claim for the PPR exemption was not established given the Tribunal's finding that she did not satisfy the requirements of clause 6(3) of the Schedule - [13]-[14]. That finding is not the subject of challenge.) 51Therefore, unless one of the concessions in Part 3 applied, there was no error in the finding of the Appeal Panel that the PPR exemption did not apply. That squarely raises what was described in the appeal as the threshold issue. The Threshold issue 52The threshold issue was the focus of the second issue on which the amicus curiae made submissions and was also an issue on which Dr Haddad made submissions. Relevantly, the issue arises by reference to the provisions of clause 4 of Schedule 1A (extracted earlier in these reasons). 53The Appeal Panel dealt with this issue at [11] of its reasons. It proceeded on the basis that, to attract the operation of the concession in Part 3, Ms Haddad must show that the three bedroom building was a residential occupancy "contained within" the two bedroom building and that it (i.e., the three bedroom building) was an "excluded residential occupancy" within the meaning of clause 4(2). 54The Appeal Panel said that the uncontested evidence was that the "house" (by which it was clearly referring to the three bedroom building that had been tenanted) was not "contained" within the two bedroom building and that they were separate. It went on to say that, even if it were otherwise, the three-bedroom house did not fall within any of the criteria set out in clause 4(2), stating that the three bedroom dwelling "seems to fall squarely" within the definition of a single dwelling and that it was therefore excluded from the definition of "flat". The Appeal Panel also found that the three bedroom building was not a "suite of rooms", an expression it said had a well-established meaning in common parlance. 55Mr Sneddon submitted that the Appeal Panel was incorrect in construing the opening words of clause 4(1) as requiring that the three bedroom building be physically "contained" within the two bedroom building. Emphasis was placed on the use of the plural in the opening words of clause 4(1) for the proposition that the provision contemplated that there might be more than one building and did not require that those buildings be attached. It was submitted that if the relevant residential occupancy were required to be contained within the building occupied by the owner then the plural reference to "buildings" in clause 4(1) would have no work to do. 56The respondent made no submission on this issue other than to say that he did not cavil with the Appeal Panel's finding. 57It is only necessary to determine the construction of "contain[s]" in the opening words of clause 4(1) when considering the application of the PPR exemption for the 2004 land tax year. That is because, for the 2005-2008 land tax years, it is clear that the three bedroom building on Wadalba did not fall within the definition in clause 4(2) of "excluded residential occupancy" because it was a "single dwelling". 58The only descriptions in clause 4(2) within which the three bedroom building could possibly fall are a "flat" (in sub-clause (c)) or a "suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy" (in sub-clause (b)). As extracted earlier, "flat" was defined, for the land tax years from 2005 to 2008, as including a suite of rooms but excluding a single dwelling. 59The concept of "suite of rooms" in clause 4(2) is not defined but must be something that is capable of being a flat (by reference to the definition of "flat" in the legislation) but which is not a "flat" for the purposes of clause 4(2). This suggests that it must be distinguishable from a structure that falls within the definition of a "single dwelling". It was submitted by the respondent that, given that the types of residential occupancy identified in clause 4(2) increase in size from sub-clauses (a) to (f), a suite of rooms must be read as meaning something more than a room but not enough to be a flat. 60The three bedroom house, on the evidence before the Tribunal, was clearly a "single dwelling", as Dr Haddad in his submissions seems to concede (Orange 33 G-K). Indeed, Dr Haddad contended that both buildings on the Wadalba land were capable of being, and had been constructed to be used as, separate dwellings. He submitted that there was no basis for treating one as a house and the other as a flat. 61Therefore, for the 2005-2008 land tax years, there was no error in the Appeal Panel's conclusion that, whatever the factual merits of Ms Haddad's claim to have occupied the two bedroom building, the PPR exemption did not apply. 62As to the 2004 land tax year, however, the definition of "flat" did not exclude a single dwelling. Therefore, Mr Haddad contends that at least for this year, even if his argument on the threshold issue otherwise fails, the three bedroom building is an "excluded residential occupancy" for the purposes of the clause 4(1) exemption. 63The question then is whether the Appeal Panel erred in finding, in effect, that the opening words of clause 4(1) require, on the facts of this case, that the excluded residential occupancy be physically contained within the two bedroom building. 64The opening words of clause 4(1) must be read as referring to one or more buildings "used or occupied [by the owner] for residential purposes", by contrast with the reference to a residential occupancy "other than" that of the owner. I see no reason not to give the word "contain" its ordinary meaning. If so, then the excluded residential occupancy must be an area forming part of a larger area in order to be contained within it. 65The meaning of "contain[s]" in this context must be that there needs to be a building or buildings used or occupied by the owner for residential purposes within which, or within one of which if the owner uses and occupies more than one building, is contained a residential occupancy of someone else. Such an interpretation is consistent with the comment by Gzell J in Chief Commissioner of State Revenue v McGrath [2008] NSWSC 387 (at [48]) (albeit that this is a case on distinguishable facts since there the respective buildings were on two parcels of land with no unity of title) to the effect that the exemption in clause 4 of Schedule 1A permits a 'granny flat' "in the residence" (my emphasis). 66In other words, if Ms Haddad had established that her use and occupation for residential purposes of the Wadalba land was not confined to use and occupation of the two bedroom building but encompassed at least part of both buildings, in the sense of those two buildings, though detached, forming part of an overall residence used or occupied by her for residential purposes, then the occupancy of part of the three bedroom building by another person could be an excluded residential occupancy contained within the three bedroom building within the exemption. 67Here, however, the Tribunal found that the three bedroom building had been tenanted from some time in 2002. On the facts found by the Tribunal, the two separate buildings cannot readily be described as a set of buildings occupied by Ms Haddad in part of which there was an excluded residential occupancy, even if, as Dr Haddad asserts, there was a connection in terms of the access to the property, electricity supply and the like. Dr Haddad's own submissions emphasise the independence of the two buildings on the Wadalba land. 68On that basis, in my opinion the Appeal Panel did not err in concluding that the clause 4(1) exemption did not apply to the 2004 land tax year, even though the Appeal Panel seems incorrectly to have assumed that there was no excluded residential occupancy for that year on the same basis as it correctly reached that conclusion for the 2005-2008 years. 69Mr Sneddon, who ultimately accepted that the three bedroom dwelling would not fall within the definition of "flat", sought to maintain an argument that if land tax would not be applicable had the respective occupants of the three and two bedroom buildings been reversed (i.e., had the two bedroom building been that which was tenanted and the three bedroom building that which Ms Haddad claimed to occupy) then the proprietor should be able to claim the land tax exemption for the converse situation. The difficulty with this argument for the 2005-2008 land tax years is that it finds no support in the terms of the legislation, which clearly excludes single dwellings from the definition of "excluded residential occupancy". For the 2004 land tax year, the difficulty is in characterising the three bedroom building as contained within a building or buildings used or occupied by Ms Haddad for residential purposes. 70There has been no error shown in relation to the Appeal Panel's findings in relation to the threshold issue. Whether or not this was an issue that should have been raised at an earlier stage in the respective proceedings, as Dr Haddad contends, it was a matter correctly determined by the Appeal Panel. Costs issue 71Ms Haddad unsuccessfully sought an order from the Appeal Panel that the respondent pay her costs of the appeal. Dr Haddad not only pressed for such an order on this appeal, he also pressed for an order for costs of the Tribunal proceedings. 72As to the latter, Dr Haddad submitted that the Tribunal had incorrectly stated that no claim was made that Dr Haddad was a professional agent representing the applicant for fee. Dr Haddad maintains that this was incorrect because "a medical practitioner [as Dr Haddad is] is classified as a professional and there is no onus on the agent to declare upfront intentions to charge a fee". The Tribunal's reasons, however, appear to be recording that no claim had been made before it by Ms Haddad for costs in relation to her husband's representation. In any event, as noted above, this Court does not have jurisdiction to consider whether the Tribunal erred in declining to award costs to Ms Haddad at first instance. 73As to the appeal from the Appeal Panel's costs decision, it is necessary for Ms Haddad to establish that there has been error in the House v King (1936) 55 CLR 499 sense in the determination by the Appeal Panel. Mr Sneddon submitted that there was error in the requisite sense on the basis that it could not be said that the arguments agitated in relation to the proper statutory construction of clause 4 (i.e., the threshold issue) were untenable and therefore that there was an error of law on the part of the Appeal Panel in its finding that the appeal was bound to fail. 74In my opinion, it has not been shown that the Appeal Panel erred in the exercise of its discretion in awarding the respondent the costs of the appeal. It took into account that, pursuant to s 88 of the ADT Act, ordinarily each party is to bear its own costs. It considered whether the exception to that general rule, namely that it was fair to do so, was applicable in the circumstances. It concluded that it was having regard to what was a relevant consideration, namely whether Ms Haddad had made a claim that had no tenable basis in fact or law. It formed the view that Ms Haddad's appeal was bound to fail as a matter of law, noting that she had failed at first instance on the same preliminary point ([2] of its reasons for the costs decision). That was not a view that could not reasonably have been reached by the Appeal Panel in my opinion. I am not persuaded that the Appeal Panel's discretion miscarried in this regard. 75It is therefore unnecessary to consider Dr Haddad's further submission that costs should be ordered in Ms Haddad's favour on an indemnity basis having regard to the manner in which the respondent had acted in relation to the claim and had conducted the proceedings. Suffice it to say that I am not persuaded that the defence by the respondent of the proceedings was shown to have been so unreasonable as to suggest that a failure by the Appeal Panel to award indemnity costs would have been a miscarriage of its discretion in that regard. Conclusion 76For the reasons set out above, I am of the view that: 1. If it be necessary, leave to appeal from the costs decision of the Appeal Panel should be granted. 2. The appeal should be dismissed with costs. 77I note, for completeness, that since preparing these reasons I have had the opportunity to read in draft the reasons of Leeming JA. I agree with his Honour's more detailed exposition of the construction of clause 4 in the form that it took in 2004, which leads to the same conclusion I have reached as to that issue. 78LEEMING JA: I agree with the orders proposed by Ward JA, and save for two matters, with her Honour's reasons. The first is that, like Macfarlan JA, I prefer not express to a view as to whether leave was required to appeal from the costs decision. The authorities conflict, the point was not argued fully, and it is not necessary to resolve it in this appeal. 79However, it is necessary to resolve whether there was material error of law in the Appeal Panel's resolution of the "Threshold issue" in respect of the 2004 year. That issue only arises in respect of the 2004 year, because the amicus conceded, properly, that the three bedroom building was (a) a "single dwelling", (b) therefore expressly excluded from being a "flat" when the definition changed for subsequent years, and (c) for that reason could not be an "excluded residential occupancy" within the meaning of cl 4. 80The Appeal Panel appears not to have noticed the difference in the definition of "flat" in the 2004 year, which has the consequence that the second strand of its reasoning (that the three bedroom structure was a "single dwelling" and therefore not a "flat") was inapplicable for that year. The Chief Commissioner's written submissions repeated the error. The Chief Commissioner advanced no positive submissions orally in support of the first strand of the Appeal Panel's reasons (that the three bedroom structure was not "contained" in the two bedroom structure); that may be because at the time of the hearing it was not appreciated that the second strand of the Appeal Panel's reasons could not support its decision for the 2004 year. When the Chief Commissioner's helpful supplementary submissions, filed in accordance with the Court's direction after the hearing, pointed out the amendment, no application was made to be heard further on the first strand. 81My reasons for construing cl 4 in the form it took for the 2004 year expand on those given by Ward JA, in that I rely not merely upon the meaning of "contain" but also on the structure of cl 4 and the definition of "flat". However, I do not regard any aspect of these reasons as inconsistent with her Honour's reasons. 82The following matters may be observed from the structure of cl 4. First, central to cl 4 is the idea of "excluded residential occupancy". Secondly, once it is observed that every "flat" is necessarily either a room or a suite of rooms, then every excluded residential occupancy is one or two rooms or a suite of rooms or a suite of rooms and another room. Thirdly, the clause does not use the legal language of lease or licence or other form of tenure, but instead the language of bricks and mortar: "building", "room" and "suite of rooms". Fourthly, the clause does not use the legal language of fixtures or structures on the land, but instead uses the physical language of buildings which contain, or building which contains. Fifthly, the verb that is used four times in the clause to link "building" with "room" or "suite of rooms" is "contain". The question posed by the statute is not whether there is no more than one excluded residential occupancy on the land, but whether there is not more than one excluded residential occupancy contained in one or more building(s). 83The 2004 definition of "flat" also links "building" with "room" and "suite of rooms", but it employs a different approach. Its concluding words "whether the room or suite is a detached building or forms part of a building" should, in accordance with settled principles of construction, be given work to do: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [71]. Those words confirm that there are two ways in which a room or suite of rooms that is a flat may relate to a building. Either the room or the suite of rooms may itself be a building, or they may form part of a building. 84This is a case where the defined term "flat" is to be read into cl 4 in the manner indicated by McHugh J in Kelly v The Queen [2004] HCA 12; 218 CLR 216 at [103]. When that is done, the list of "excluded residential occupancies" in cl 4(2) includes both classes of flats: those which are themselves buildings, and those which form part of a building. However, only if the building or buildings contain an excluded residential occupancy is cl 4(1) satisfied. 85In circumstances where the definition of "flat" expressly includes flats which form part of a building, the harmonious approach to construction required by Project Blue Sky at [69] gives to the verb "contain" its natural meaning. An excluded residential occupancy which is a flat is capable of falling within cl 4(1) if it is within the class of flats being a room or suite of rooms which forms part of a building. However, if the flat is within the other class of flats, namely, a room or suite of rooms that is a detached building, then it is not contained in a building or buildings within the meaning of cl 4(1). 86That construction respects the semantic relationship between "forms part of" and "contains". Moreover, it gives to "contains" what I regard to be its natural meaning in this bricks and mortar context. For, given the focus on rooms and suites of rooms in contradistinction to buildings in cl 4, there is no reason for the verb "contain" to lose its ordinary meaning: a building "contains" a room or suite of rooms when the room or suite of rooms is part, but not the whole, of the physical fabric of the building. 87That reasoning leads to the same construction favoured by Ward JA, and to the consequence that there was no error of law in the result reached by the Appeal Panel in relation to the three bedroom structure in the 2004 year, although its reasoning was erroneous. 88I agree with the reasons given by Ward JA in relation to the other years, and all other aspects of the appeal. ********** 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. Decision last updated: 21 February 2014