Skinner v Chief Commissioner of State Revenue [2014] NSWCATAD 66

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Skinner v Chief Commissioner of State Revenue [2014] NSWCATAD 66 Hearing dates: 8 May 2014 Decision date: 16 May 2014 Jurisdiction: Administrative and Equal Opportunity Division Before: Professor G.D. Walker, Senior Member Decision: Decision under review affirmed in part and set aside in part. Catchwords: Land tax - exemption - primary production - dominant use - commerciality test Cases Cited: Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue (CCSR) [2012] NSWADTAP 25; FCT v Smorgon (1977) 16 ALR 721; Hope v Bathurst City Council (No 2) (1983) 53 LGRA 79; Leda Manorstead Pty Ltd v CCSR (2010) 79 NSWLR 724, (2011) 85 ATR 775; Maraya Holdings Pty Ltd v CCSR [2013] NSWSC 23; Saville v Commissioner of Land Tax (1980) 12 ATR 7. Category: Principal judgment Parties: Ronald Austin Skinner and Carolyn Suzanne Skinner (Applicants) Chief Commissioner of State Revenue (Respondent) Representation: Counsel M Bennett (Respondent) R Skinner and C Skinner (Applicants in person) Crown Solicitor (Respondent) File Number(s): 136057

reasons for decision 1The applicants Mr Ronald Skinner and Mrs Carolyn Skinner on 18 October 2013 sought review in the Administrative Decisions Tribunal of the Chief Commissioner's decision denying the applicants' exemption from land tax for the relevant period, the 2008 to 2013 land tax years, for two properties that they own at Iolanthe Street, South Grafton, and 233 Lawrence Road, Great Marlow, New South Wales. The applicants had lodged an Application for Exemption - Primary Production Land dated 6 April 2009. In the initial assessments for the 2008 to 2012 the relevant properties were exempted from land tax pursuant to s 10AA of the Land Tax Management Act (LTM Act). 2Before the exemption was granted, the Chief Commissioner requested further information, which the applicants provided. On 23 July 2012, the Chief Commissioner issued a notice of investigation to the applicants regarding the primary production exemption. That request included a questionnaire which the applicants completed and, together with other information, provided to the Chief Commissioner on 5 October 2012. Between that date and 5 November 2012 the parties engaged in further correspondence. 3On 7 December 2012, the Chief Commissioner informed the applicants that they did not qualify for the primary production exemption as the relevant properties did not satisfy either test under s 10AA(2) or (3) of the LTM Act. Consequently the Chief Commissioner issued to the applicants a land tax assessment for the 2008 to 2012 land tax years assessing the relevant properties to land tax. As the taxing date for the 2013 tax year assessment had not yet arrived, the 2013 year was not included in the assessment. 4On 12 February 2013, the applicants objected to the assessments issued on 7 December 2012, and on 23 April 2013 objected to the 2013 land tax year assessment. The Chief Commissioner disallowed those objections. 5The applicants' 2013 land tax assessment, issued on 14 February 2013, was for a total of $53,616.95, but only part of that related to the South Grafton and Great Marlow properties. The applicants claim that the two properties were used for primary production, namely the maintenance of horses for the purpose of selling them or their bodily produce, and therefore exempted from land tax for the relevant period by s 10AA of the LTM Act. The Chief Commissioner contends that the exemption does not apply to the relevant properties for the relevant period. 6During the relevant period the applicants owned at various times six other properties in the North Coast area, including 200 North Street, Grafton. The South Grafton and Great Marlow properties comprise 20 acres and 25 acres respectively and are approximately 5 km apart. There is a residence on the South Grafton property, which according to the applicants has not been occupied since May 2011, and a residence at Great Marlow that is currently occupied by a caretaker, Mr Swan. 7The South Grafton property is said to contain seven stables, a dairy, a feed room, a shed and four paddocks. The applicants also state that agricultural equipment including a tractor, slasher, mower, quad bike and haymaking equipment are kept on the relevant properties, and that the holdings have been improved by fencing, irrigation and lucerne pastures. 8In addition to the dwelling, the Great Marlow property contains a structure that the respondent describes as a storage shed. Development consent was sought on 16 September 2011, and shortly thereafter granted, to construct a "farm shed extension". 9The Chief Commissioner accepts that the relevant properties were used for maintaining horses during the relevant period, but disputes whether that was sufficient for the primary production exemption to apply. 10The applicants state that they predominantly used the properties for breeding horses, as registered breeders under stud registered number 689763 from 1 July 2007 (although they acquired Great Marlow on 7 September 2007), but concede that the properties were also used for spelling racehorses. 11As the Administrative Decisions Tribunal was superseded on 1 January 2014 by the Civil and Administrative Tribunal, it should be noted that these proceedings continue in the present tribunal and that the law to be applied is that which would have applied but for the enactment of the Civil and Administrative Tribunal Act 2013 : schedule 1, part 2, division 3, item 7 of that Act.