Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Triston Pty Limited v Chief Commissioner of State Revenue [2018] NSWCATAP 37 Hearing dates: 11 August 2017 Date of orders: 05 February 2018 Decision date: 05 February 2018 Jurisdiction: Appeal Panel Before: M D Schyvens, Deputy President J S Currie, Senior Member Decision: 1. The Appellant is granted an extension of time to lodge its Notice of Appeal. 2.The appeal is dismissed 3. Each party is to pay its own costs of the appeal. Catchwords: REVENUE LAW – Land Tax – Land Tax Management Act 1956 (NSW), s 10AA – exemption for land used for primary production – meaning of "rural land" in s 10AA(4). STATUTORY INTERPRETATION – Interpretation Act 1987 (NSW) – application of s 33 – construction that would promote the purpose or object underlying the Act. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 41, 80(2)(b) Interpretation Act 1987 (NSW), s 33 Land Tax Management Act 1956 (NSW), ss 10AA, 10AA(1)-(4), 10AA(4)(a)-(f), 10A(1) Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 Bell v Commissioner of Taxation [2012] FCA 1042 Carr v Western Australia [2007] HCA 47; (2007) 232 CLR 138 CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Collins v Urban [2014] NSWCATAP 17 Ferella v Chief Commissioner for State Revenue [2014] NSWCA 378 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366 Leda Manorstead v Chief Commissioner [2010] NSWSC 867 Texts Cited: NCAT Guideline 1: Internal Appeals: August 2015 Category: Principal judgment Parties: Triston Pty Limited (as trustee for the Ghantous Family Trust) (Appellant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: E Bishop (Respondent) Solicitors: Schurgott & Co Lawyers (Appellant) Crown Solicitor's Office (Respondent) File Number(s): AP 17/19854 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Administrative and Equal Opportunity Citation: [2017] NSWCATAD 100 Date of Decision: 31 March 2017 Before: S Frost, Senior Member File Number(s): 1610022 reasons for decision Introduction 1. By Notice of Appeal received by the Tribunal on 2 May 2017, Triston Pty Ltd in its capacity as the trustee of The Ghantous Family Trust ("Triston" or "the Appellant") appealed against the decision and orders of Senior Member Frost of the Tribunal made on 31 March 2017. The Senior Member's orders confirmed an assessment of land tax payable by Triston made by the Chief Commissioner of State Revenue ("the Commissioner" or "the Respondent"). The Commissioner's assessment related to three contiguous lots of land at Windsor. It was based on the Commissioner's view that Triston was liable for land tax on those three lots for the land tax years 2011 to 2015 inclusive. Triston objected to the Commissioner's assessment on the ground that the land should have been exempted from land tax as land used for primary production, under s 10AA of the Land Tax Management Act 1956 (NSW) ("the LTM Act"). That objection was the subject of the proceedings before Senior Member Frost in the Administrative and Equal Opportunity Division of the Tribunal. Uncontested facts 1. The following facts appear to be uncontested. 1. Triston Pty Ltd is the trustee of the Ghantous Family Trust. Mr Bassam John Ghantous is the sole director of Triston. 2. The land which is the subject of the Commissioner's assessment and these proceedings consists of three parcels, being Lots 2, 3, and 4 of the relevant deposited plan (collectively, "the Property"). Lot 2 has an area of 0.266 ha, Lot 3 an area of 2.008 ha and Lot 4, 1.48 ha. The total area is therefore approximately 3.75 ha. 3. Each parcel has a dual zoning, being zoned both "rural landscape" (RU2) and "low density residential" (R2), under the Hawkesbury Local Environment Plan 2012. 4. Mr Ghantous estimates that the area of the Property which is within the RU2 zone comprises about 95% of the total area. That was accepted by Senior Member Frost. 5. The area of the Property which is zoned RU2 is flood-prone, whereas the area zoned R2 is higher and is not so affected. 6. The two larger lots, Lots 2 and 4, are irregularly shaped, being narrower at the roadway end and increasing in width along their length. The third lot adjoins one of the larger lots and sits slightly off to one side. 7. There are fences on the Property which broadly create six usable areas, comprising five paddocks on the low-lying areas (zoned RU2 and comprising 95% of the total area) and a nursery area on the higher ground (zoned R2 and comprising the remaining 5%). 8. There are neither stables nor any breeding equipment or structures on the Property. However on one of the lots (Lot 4), in the areas zoned R2, there is a building the size of a double garage which is used for storage of plant, machinery, and farm implements and there is a nearby small feed shed. 9. The higher ground and the lower, flood-prone-ground are used for different purposes. The higher ground, comprising about 5% of the total area, is dedicated to nursery activities which have been conducted there since 1983. The nursery area spans all three lots. 10. The lower ground comprises five paddocks and the remaining 95% of the total area. For a period up to 2011 and at least during 2010 and 2011, Triston had horses on this part of the Property. Mr Ghantous lived in the adjoining lot but sold his house in 2011 and moved away. Sometime after that, three of Triston's horses were stolen and Mr Ghantous then concluded that horses could no longer be kept on the Property. 11. It appears that no horses have been kept on the Property since that time. Mr Ghantous's evidence as to the use of the Property 1. In a witness statement and at the Tribunal hearing, Mr Ghantous described Triston's use of the land. The Senior Member recorded that evidence in his Reasons. Some of that information has been summarised under the previous heading and we summarise the remainder of it as follows. 1. Mr Ghantous asserted that the higher ground was used to conduct "a propagating nursery to grow specific plants for sale". He conceded that the market for these at the moment was very small. Most of the plants on the Property (which Mr Ghantous estimated would be 700 to 800 at any given time) were very mature plants. They are not newly cultivated or newly propagated. There is an extensive underground automatic irrigation system that provides water to the plants. 2. Mr Ghantous keeps a record of all the time he spends on the Property conducting activities connected with the nursery and he charges that time to Triston at an hourly rate. Mr Ghantous asserted that in addition to the time he spends on the Property, he also does some propagating at his residence, particularly during winter. Mr Ghantous estimated he spends on average eight to 14 hours per week on nursery activities. He asserts that he personally performs all work undertaken at the nursery. 3. The financial statements of Triston show that the income from nursery activities has been modest in recent years. The statements declare nursery sales for financial year 2012 at $6,500, financial year 2013: $1,525; financial year 2014: $50 and 2015 financial year: $1,100. The amounts of expenditure recorded as "Contract labour-nursery" were, for the following financial years: 2012: nil, 2013: $27,355, 2014: $13,501, and 2015: $13,393. The Senior Member assumed that these items represented payments for Mr Ghantous's time, as noted in (2) above. 4. The use of the lower ground comprising the five paddocks is set out in [2](10) and [2](11)) above. It appeared from Mr Ghantous's evidence that after his remaining horses were stolen he decided to go into what he described as specialised thoroughbred breeding under which he would endeavour to develop techniques for producing horses that could give a good return by sales of their progeny. He gave oral testimony that he has spent between seven and eight hours per week researching breeding and bloodstock journals and stallion books. Mr Ghantous also described in a witness statement that focusing on the breeding program to obtain the desired progeny was a long process with the objective to retain fillies and mares only if the program indicated some success. 5. Notwithstanding his efforts in this regard Mr Ghantous confirmed that since 3 horses were stolen in around 2011, no horses have been kept on the Property. The livestock accounts for the relevant financial years, apparently showed that there were between four and nine head of livestock owned by Triston on the Property throughout the financial years 2012 to 2015, but no horses kept on the Property. Relevant statutory provisions 1. This appeal is mainly concerned with the application of s 10AA of the LTM Act, which is in the following terms. 10AA Exemption for land used for primary production (1) Land that is rural land is exempt from taxation if it is land used for primary production. (2) Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land: (a) has a significant and substantial commercial purpose or character, and (b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). (3) For the purposes of this section, "land used for primary production" means land the dominant use of which is for: (a) cultivation, for the purpose of selling the produce of the cultivation, or (b) the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or (c) commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) or the commercial farming of fish, molluscs, crustaceans or other aquatic animals, or (d) the keeping of bees, for the purpose of selling their honey, or (e) a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or (f) the propagation for sale of mushrooms, orchids or flowers. (4) For the purposes of this section, land is "rural land" if: (a) the land is zoned rural, rural residential, non-urban or large lot residential under a planning instrument, or (b) the land has another zoning under a planning instrument, and the zone is a type of rural zone under the standard instrument prescribed under section 33A (1) of the Environmental Planning and Assessment Act 1979, or (c) the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land. The Tribunal's decision 1. Senior Member Frost ordered that the land tax assessments be confirmed, on the following grounds: 1. the Property was not "rural land" within the meaning of s 10AA(4) of the LTM Act; 2. in respect of the 2012 to 2015 land tax years, the Property was not "land used for primary production" within the meaning of s 10AA(3) of that Act; and 3. in respect of the 2011 land tax year only, the Senior Member was satisfied that, as at the taxing date, being 31 December 2010, Triston was using the flood-prone area of the Property for the maintenance of horses for the purpose of selling them or their natural increase, which is one of the uses prescribed in s 10AA(3) of the LTM Act and that that was the dominant use of that part of the Property; 4. however, in respect of the 2011 land tax year, the Senior Member was not satisfied that the use of the flood-prone area of land met the additional requirements imposed by sub-s (2) of s 10AA of the LTM Act. That requires that the use of the land have a significant and substantial commercial purpose or character and that it be engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). 1. That combination of conclusions is fatal to any claim for the exemption available under s 10AA of the LTM Act, because: 1. by operation of sub-s (1) of the LTM Act, land which is rural land is exempt from taxation only if it is "land used for primary production" and sub-s (3) of that Act confines that concept to land the dominant use of which is for one of the specific purposes set out in (a) to (f) of the subsection. 2. by operation of sub-s (2) of the LTM Act, land which is not rural land is subject to two separate hurdles which must be jumped in order to attract the exemption. Firstly, the land must be land used for primary production as defined by sub-s (3) of that Act. Secondly the use of the land: 1. must have a significant and substantial commercial purpose or character, and 2. must be engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). 1. In assessing whether the land was land used for primary production within the meaning of s 10AA(3) of the LTM Act, the Senior Member found that Triston did not propagate horticultural stock on the land. It seems to be accepted that propagation is a necessary element of two of the six uses specified by sub-s (3) of the LTM Act which are relevant to this case, namely: 1. paragraph (e), which refers to use of the land for "a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public"; and 2. paragraph (f), which refers to the use of land for "the propagation for sale of mushrooms orchids or flowers". 1. The Senior Member found that the evidence fell short of establishing that there was any actual propagation on the Property. He found that the evidence, particularly that of Mr Ghantous, as to the actual activities conducted in relation to the nursery was "somewhat sketchy" on this issue. 2. The Member also found that the dominant use of the land as assessed as at 31 December 2010 of each of the relevant tax years was not a use for one of the purposes specified in s 10AA(3) of the LTM Act. He found that the only physical activity undertaken on the Property at the various taxing dates was a nursery activity. He accepted that there had been no horses on the Property since sometime in 2011 and that the part of the Property on which the nursery activity was undertaken comprised no more than 5% of the Property's total area. Triston's case The Grounds of Appeal 1. The grounds of appeal appearing in the Notice of Appeal were to the effect that the Tribunal erred in making its decision in that it had: 1. committed an error of law in concluding that s 10AA of the LTM Act requires the land to be zoned exclusively rural in order to be "rural land"; (which for convenience we shall refer to as "Ground 1"); 2. committed an error of law in mistakenly concluding that the use of the land for primary production was not the dominant use of the land; (which we shall refer to as "Ground 2"); and 3. committed an error of law in mistakenly concluding that the Applicant did not propagate horticultural stock on the land; (which we shall refer to as "Ground 3"). 1. For convenience of our analysis of the Grounds we have reversed the order of Grounds 2 and 3 used in the pleadings and the submissions of the parties. Triston's submissions on Ground 1: "rural land" 1. We have analysed this Ground in detail below commencing at [27], but in summary, Triston submits that Senior Member Frost fell into error in construing s 10AA(4)(a) of the LTM Act and in particular the phrase: "the land is zoned rural". Triston says that the Senior Member erred by accepting the Commissioner's submission that land which bears a dual zoning of rural and low density residential is not within the definition of "rural land" because it is not in its entirety zoned rural. It was submitted on behalf of Triston that the alternate construction is the correct one. That is that s 10AA(4)(a) of the LTM Act applies to land which is zoned "rural" even if that land bears a dual zoning. The definition in s 10AA(4)(a) of the LTM Act does not require land to have a single zoning. Triston's submissions on Ground 2: Dominant use of the land 1. Triston's case in relation to Ground 2 is that the Senior Member made an error of law in finding that the use of the Property could not be characterised as: land the dominant use of which is for any of the activities set out in sub-s 10AA(3) of the LTM Act. The Senior Member said at [34] that this was because of: …the insignificant, practically de minimus, use of the land during those years, with the nursery area representing something less than 5% of the footprint of the entire Property. I would have concluded that the Property during those years did not have a dominant use at all. 1. It was submitted on Triston's behalf that in respect of all the land tax years in question, being 2011 to 2015, Senior Member Frost should have concluded that cultivation of plants was being conducted on the land and at least for the 2012 to 2015 land tax years the land was not used for any other purpose and the Senior Member should have concluded that the cultivation of plants was the dominant purpose. In short it is said that the Senior Member had failed to consider that because cultivation of plants was the only use to which the land was put it must have been the dominant use. Triston's submissions on Ground 3: propagation of horticultural stock 1. It was submitted on behalf of Triston that the Senior Member also erred as a matter of law in mistakenly concluding that Triston did not propagate horticultural stock on the land. 2. The Senior Member found that there was no "actual propagation" on the land in each of the 2011 to 2015 land tax years and it followed that the land was not used for primary production in any of those years. Because it was accepted that there had been no horses on the property since three horses had been stolen during 2011 and the remaining horses being removed, the only activity on the property which might have justified it being treated as "land used for primary production" under s 10AA(3) of the LTM Act were those which were relevant to a consideration of (e) "a commercial plant nursery" and paragraph (f) "the propagation for sale of mushrooms, orchids or flowers." In finding that there had been no "actual propagation", the Senior Member noted that Mr Ghantous had said in his second witness statement that Triston was carrying on a business of propagating specialised and rare plants for commercial sale, but that in cross-examination he had said that plants on the Property are not newly cultivated or newly propagated: "because it's an ongoing thing." The Senior Member said that that evidence fell short of establishing that there was any actual propagation during the relevant years and he found that there was none. (Reasons [32]). 3. On appeal, Triston's submission was that the evidence does not support such a finding and that the Senior Member was in error in applying the legislation. The Commissioner's case 1. The Commissioner's position in relation to the grounds of appeal is, essentially, as follows. 1. Ground 1 does relate to a matter of law, but there was no error of law by the Tribunal in interpretation of "rural land" as defined in s 10AA(4) of the LTM Act. It was open to Senior Member Frost to reach the conclusion that only when there is a single rural zoning covering the entire parcel of land will it be "rural land" and open to him to reach that conclusion that where each parcel of land is dual-zoned with one of those zones not being rural (as was the case here) the entire parcel of land under consideration is not "rural land". 1. In relation to Grounds 2 and 3, the Tribunal's findings were open to it on the evidence and that in any case no error of law arose. 2. The Commissioner says that Ground 2 does not raise a question of law; that the Tribunal correctly considered all of the evidence and reached a decision which was open to it. It did this by: 1. identifying the only use of the land for the 2012 to 2015 land tax years, at [15] and [31] of the Tribunal's Reasons for Decision; 2. on the basis of the evidence from Mr Ghantous, finding that there was no actual propagation; at [32] of the Reasons; and 3. determining that the nursery use of the land did not satisfy some paragraphs, (e) or (f) of sub-s (3) of s 10AA of the LTM Act, but that in any event, it was de minimis; at [34]. 1. The Commissioner says that each of Grounds 2 and 3 raises an issue of fact, not an issue of law; that accordingly Triston must seek leave to appeal and that leave should not be granted, because it was open to Senior Member Frost based on what he described as the "somewhat sketchy" evidence presented by the appellant at the hearing, to conclude that the evidence had failed to establish, respectively, that the dominant use of the land had been for a sub-section (3) (of s 10AA of the LTM Act) purpose and that any actual propagation had been conducted on the land. 2. The Commissioner also says that in any event, there is no utility in an appeal on Ground 3 if we uphold the decision of Senior Member Frost on Ground 2. If we do so, the effect is that the land is not "land used for primary production" within s 10AA(3) of the LTM Act and so cannot attract an exemption from taxation under s 10AA of that Act, whether or not any actual propagation was conducted. Time of lodgement of the Notice of Appeal 1. The Commissioner in his reply as a preliminary point noted that the Notice of Appeal was filed out of time; that is outside the period of 28 days from the appellant having been notified of the decision appealed against: see NCAT Guideline 1: Internal Appeals: August 2015 at [33]. 2. We note for completeness that a January 2018 version of the Guideline was issued shortly prior to the publication of these Reasons but clearly the August 2015 version was in force at the time of the lodgement of the Notice of Appeal and in any case the relevant provisions have not changed. 3. Triston's written submissions included at [30] a written request for an extension of time pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 (NSW). At the hearing of the appeal, the solicitor for Triston, Mr Schurgott, indicated that the lodgement of the Notice of Appeal was in fact one day out of time. We accept on the basis of the explanation contained in [30] of the appellant's submissions, which was not disputed by the Commissioner, that that was so. The Commissioner did not press the issue. We granted the request for extension. Issues for determination by us 1. The issues for our determination appear to be as follows: 1. In relation to Ground 1, did the Tribunal make an error of law in concluding that the land was not rural land within the definition in s 10AA(4) of the LTM Act? 2. In relation to each of Grounds 2 and 3: 1. Does the Ground raise an issue of fact or an issue of law? 2. If an issue of fact is involved in either Ground should we grant leave to appeal? 3. If we do grant leave to appeal, should we allow the appeal or dismiss it? OUR ANALYSIS AND DETERMINATION Ground 1: "Rural land" for the purposes of s 10AA(4)(a) of the LTM Act 1. It is useful to commence with a general description of the scheme for exemption available under section 10 AA of the LTM Act. Both rural land and land which is not rural land will be exempt from taxation if the land is used for primary production, as that term is defined in sub-s (3) of s 10AA of the LTM Act. However, if the land is not rural land then an additional requirement is imposed by sub-s (2) of that Act. That is that the use of the land for primary production has a significant and substantial commercial purpose and character and is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). 2. Triston asserts that the land comprising the Property is rural land. A finding that that is the case would be of considerable advantage to Triston because it would not then need to establish that its use of the land for primary production had a significant and substantial commercial purpose or character or was engaged in for the purpose of profit on a continuous or repetitive basis. 3. The particular issue in contention and one which is central to Triston's appeal is the proper construction of paragraph (a) of the subsection. That paragraph provides that, for the purposes of s 10AA of the LTM Act, land is rural land if: (a) the land is zoned rural, rural residential, non-urban or large lot residential under a planning instrument… 1. As noted above, the whole of the Property, that is each of the three parcels of it, is dually-zoned; being zoned both "rural landscape" (RU2) and "low density residential" (R2). 2. Triston's submission, as summarised at [12], is that Senior Member Frost fell into error by concluding that only a single rural zoning covering the entire land would satisfy the test and that where, as here, there is dual zoning, the land cannot be characterised as "rural land". 3. In the written submissions made on its behalf, Triston contends that the plain words of the provision are evident, that once it is established that the land is zoned rural that is sufficient to attract the definition of "rural land" and that that result is not affected by the fact that the land is subject to a dual zoning. Triston contends that one must look at the plain meaning of the words and the plain words are evident: the land is zoned rural and therefore it falls within the definition. 4. As part of that overall submission, Triston contends that the Senior Member fell into error by wrongly adding words to the plain text in basing his conclusion on the supposition that the legislature, if mindful to do so, could have added a qualifier such as "principally" or "mainly" or something of the sort to distinguish dual zoning from single zoning. Triston says that this amounted to a proposition that the legislation is to be read as including such words of limitation and that that was in error because it altered the plain meaning of the paragraph. 5. Triston's written submissions in this regard include propositions that: in this matter the text is straightforward (Submissions at [9]); and the plain words are evident... (Submissions at [12]). 1. We do not agree. In our view, on a proper and objective reading the words "the land is zoned rural", are open equally to two constructions; namely that the reference is either to: 1. land which is exclusively zoned rural; or 2. land which is subject to dual or multiple zonings, one of which is a rural zoning. 1. The issue of which construction is correct must be undertaken in accordance with the normal settled principles of statutory construction but also in light of the express provisions of s 33 of the Interpretation Act 1987 (NSW), which is in the following terms: 33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to construction that would not promote that purpose or object. 1. The section is in mandatory terms. It imposes an obligation to prefer a particular construction on a statutory provision. 2. Triston relies in particular on the principle that taxing statutes are to be interpreted in accordance with settled principles of statutory interpretation and not in a way that fixes upon a general legislative purpose of raising revenue. In doing so, Triston relies on Gleeson CJ's caveat to that effect in Carr v Western Australia [2007] HCA 47 (2007) 232 CLR 138 and on Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, particularly the judgment of French CJ at [57]. 3. In our view, as a general proposition it must be the case that in seeking to construe the words of a taxing statute properly and in accordance with accepted principles, there is no need to rely on some "general legislative purpose of raising revenue" in order to reach a conclusion that taxation has been properly assessed or, as more directly relevant to this case, that the conditions attached to an exemption have or have not been satisfied. It is in our view not only permissible but obligatory, in accordance with s 33 of the Interpretation Act, for us to make a genuine enquiry about the purpose or object underlying the LTM Act (whether or not that is expressly stated in the Act) and to prefer a construction which would promote that purpose or object to one which would not. 4. As was observed by the High Court in CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at [408], per Brennan CJ, Dawson, Toohey and Gummow JJ: …It must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy. 1. Significantly, that observation was noted with approval by French CJ in the Alcan (NT) case cited at [38] above, at [4]. 2. The purpose or object underlying the LTM Act is the imposition of land tax, subject to conditions limitations and exemptions. 3. When transposed to the particular provisions of s 10AA of the LTM Act, that purpose or object is consistent with: 1. allowing exemption from land tax for areas of land which are (in the generic sense) rural in nature; the test of that being that they are used for primary production as defined and are zoned rural; and 2. withholding the availability of exemption from areas of land which are not zoned rural, even though they are used for primary production, unless it can be established that the primary production: 1. has a significant and substantial commercial purpose or character; and 2. is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). 1. Our analysis seems to be consistent with the view of the NSW Court of Appeal when examining s 10AA of the LTM Act in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366 at [28], where Allsop P analysed the matter in the following terms: Looking at the terms of s 10 AA in its place in the Act, the provision is not to be understood as a statutory encouragement for primary production as that phrase is used in the colloquial sense. The provision concerns land used for primary production as defined. What the provision is apt to achieve and what can be taken as its purpose from its text and context in the Act is the provision of an exemption for land used for primary production to the extent and in the matter referred to in sub-ss (2) and (3). There is no requirement to approach the matter in some beneficial fashion striving to expand the reach of the exemption or to narrow the taxing operation of the section according to strict language. 1. If an area of land is zoned rural but is also zoned in a category or categories which are not applicable to rural land (for example residential, commercial or industrial zoning), then the existence of those non-rural zonings must, on any sensible view of it, dilute the likelihood that the area of land as a whole can be considered to have a rural use. 2. If the alternate construction contended for by Triston were adopted then, if the area of land under consideration was multi-zoned, but only a very small portion of it was used for purposes which could reasonably be regarded as rural and was "land used for primary production" under paragraph (3) of s 10AA of the LTM Act, the whole of the land might be entitled to a full exemption from land tax even where the primary production use of the land did not have a significant and substantial commercial purpose or character and was not engaged in for the purpose of profit on a continuous or repetitive basis. 3. In our view, a construction of s 10AA(4)(a) of the LTM Act in accordance with the distinctions and conclusions we have drawn in [42] and [43] is more consistent with the purposes and objects of the LTM Act than an alternative construction. It must follow that such construction should be preferred and that that would be the only construction which could be reached in accordance with s 33 of the Interpretation Act. 4. Our conclusion on this issue is supported by a reading of : 1. subsection (4) as a whole, including paragraph (c) of s 10AA of the LTM Act which applies when land is not zoned under any planning instrument. In that situation the Chief Commissioner may make a determination as to the generic "rural" use of that land and if he is satisfied as to that the land will be "rural land" for the purposes of the section; and 2. s 10A(1) of the LTM Act which applies to land used for more than one purpose and restricts the availability of a tax exemption to the situation where each of the purposes for which the land is used is an exempt purpose. 1. For completeness we add that it is not necessary in any sense to read words into the text of paragraph (a) of the subsection of s 10AA of the LTM Act in order to reach that conclusion. 2. It follows that Senior Member Frost was not in error and that Ground 1 in the Notice of Appeal fails. Ground 2: "Dominant use" of the land 1. Senior Member Frost concluded at [34] of his Reasons that the Property could not be characterised as land the dominant use of which is for any of the activities specified in s 10AA(3) of the LTM Act. Triston's case on appeal on this Ground is that the Senior Member erred at law in making this finding. An issue of law or of fact? 1. The first issue for us is whether this raises an issue of law or one of fact. This question has been considered by the superior courts in a number of cases concerned with the primary production exemption under the LTM Act. 2. A case which appears to be most directly on point is the Leda Manorstead case, the Court of Appeal decision which is referred to at [44] above. The Supreme Court decision of Gzell J at first instance is reported as: Leda Manorstead v Chief Commissioner of State Revenue [2010] NSWSC 867; (2010) 79 NSWLR 724. Gzell J addressed the purpose and scope of the "dominant use" test and concluded at [70] that the question of whether or not there has been a dominant use for the purposes of s 10AA of the LTM Act: ...is a question of fact and degree that may, in the end, be determined as an objective matter of impression having regard to the facts. 1. The same conclusion was reached by White J in Ferella v Chief Commissioner for State Revenue [2014] NSWCA 378 at [31]. 2. In both written and oral submissions made on behalf of Triston the facts upon which the Senior Member appears to have based his decision on this issue are challenged in detail, but we cannot see that they identify any question of law applicable to the issue. In his submissions, Mr Schurgott for Triston relied on the comments of Gordon J (as she then was) in Bell v Commissioner of Taxation [2012] FCA 1042 at [37] where, having acknowledged that the distinction between matters of fact and questions of law in relation to statutory construction is a vexed one, she adopted five statements of principle from the matter of Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at [287] as follows: (1) The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical meaning is a question of law… (2) The ordinary meaning of a word its non-legal technical meaning is a question of fact… (3) The meaning of the technical legal term is a question of fact… (4) The effect or construction of a term whose meaning or interpretation is established is a question of law… (5) The question of whether facts fully found fall within the provisions of the statutory enactment properly construed is generally a question of law 1. But in our view Mr Schurgott was unable to demonstrate that any of those principles resulted in this particular question being an issue of law. He was good enough to acknowledge that in respect of her last statement Gordon J went on to confirm that the task of fact-finding is for the particular Tribunal not the court and that there is no error of law simply in making a wrong finding of fact. 2. On this basis we were satisfied that the appeal on this issue raises questions of fact not of law. Should leave to appeal be granted? 1. By operation of s 80(2)(b) of the Civil and Administrative Tribunal Act, although there is an appeal to this Panel as of right on any question of law, the leave of the Panel is required for an appeal on any other grounds including an issue of fact. General principles in relation to the granting of leave to appeal were considered in Collins v Urban [2014] NSWCATAP 17 at [80] to [84]. The effect of that decision is that ordinarily, it is appropriate to grant leave to appeal only in matters which involve: 1. issues of principle; 2. questions of public importance, all matters of administration, or policy which might have general application; 3. an injustice which is reasonably clear in the sense of going beyond merely what is arguable or an error which is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. In our view, the "dominant use" issue in this case is not of itself an issue of principle or a question of public importance. We understood Mr Schurgott in argument to submit that this issue was linked to the issue of the true meaning of "rural land" in s 10AA(4)(a) of the LTM Act, that is, the focus of Ground 1, but we cannot be satisfied that any such nexus would justify the "dominant use" issue alone being considered an issue of principle or a question of public importance. 2. We cannot be satisfied that the Senior Member's findings or the way that he went about them attracts any of the grounds contended by Triston as reflected in (3), (4), or (5) above. The Senior Member in our view made every effort to have regard to all of the available evidence and he specifically considered and referred to the statements provided by Mr Ghantous. It appears that at the hearing, Triston was given a reasonable opportunity to present evidence including by way of re-examination of Mr Ghantous and at no stage was the Tribunal asked to extrapolate from Mr Ghantous's descriptions of his use of the land some conclusion other than that reached by the Senior Member. 3. For these reasons leave to appeal on Ground 2 is refused. Ground 3: "Propagation of horticultural stock" 1. As we have concluded that the Senior Member's decision in relation to Ground 2 should be upheld and the appeal against it dismissed, we can see no utility in further considering the appeal on Ground 3. That is because the effect of our decision in relation to Ground 2 is that the land is not "land used for primary production" within s 10AA(3) of the LTM Act and so it cannot attract an exemption from taxation under s 10AA of that Act, whether or not there was propagation of horticultural stock on the land at any time during the relevant period. 2. We add for completeness that if we had considered Ground 3, we would have found that a question of fact and not of law was involved. 3. That conclusion follows from application of the principle confirmed by Gordon J (as Her Honour then was) in Bell v Commissioner of Taxation [2012] FCA 1042 and in many other cases, that the task of fact-finding and the consideration of the weight which should properly be accorded an item of evidence adduced by a party is that of the Tribunal concerned, not of the appeal body. Although the appeal body may set aside a decision where the decision maker has made a finding of fact without probative evidence to support it or draws an inference not open on the primary facts, we are satisfied that Senior Member Frost made no such errors. We are satisfied that it was reasonably open on the evidence available to the Senior Member, who had the benefit of assessing Mr Ghantous in person, for the Senior Member to fail to be satisfied either that propagation was conducted on the land or that there was a commercial nursery on the land. 4. For further completeness we address briefly the submission made by Triston in [28] of its written submissions, which contended that we should allow leave to appeal on this Ground by reference to the Collins v Urban factors, summarised by us earlier at [58]. 5. Triston's contentions are set out briefly below, followed by our response. 1. The question concerning the definition of "rural land" is one of principle. Our response is that it is indeed so, but we have dealt with that question in relation to Ground 1. 2. The exclusive zoning principle is of public importance but it has no significance if leave to appeal is not granted on (Ground 2). We make the same response and see [58] and [59]. 3. Senior Member Frost made an error in concluding that the evidence supported a finding that there was no propagation and it would be unjust not to grant leave in view of the critical effect of that error. We respond that there was no error and in the circumstances and for the reasons set out in paragraphs immediately above, and for the reasons set out at [62], this issue is not "critical". 4. The lack of propagation result was unreasonably arrived at and mistaken because the evidence of Mr Ghantous was unchallenged. We respond that in our view the Senior Member has dealt appropriately with Mr Ghantous and gave his evidence appropriate weight. We accept the Commissioner's submission that there is nothing in the Senior Member's decision that indicates that mandatory considerations were not referred to, that any material was ignored, or that there was a breach of procedural fairness. To the contrary, the Appellant was given a reasonable opportunity to present evidence, including by way of re-examination of Mr Ghantous and oral submissions about the propagation issue. We accept that at no stage was the Tribunal below asked not to accept the evidence given by Mr Ghantous or to extrapolate from his admission something other than what he specifically said. Conclusion 1. The Appellant having failed on all three grounds, the appeal is dismissed. Each party will pay its own costs. Orders 1. The Appellant is granted an extension of time to lodge its Notice of Appeal. 2. The appeal is dismissed 3. Each party is to pay its own costs of the appeal. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 05 February 2018