|Date of judgement||23 July 2020|
|Proceeding No.||2018/335346 and 2018/335353|
|Judge(s)||Senior Member Isenberg|
|Court or Tribunal||NSW Civil Administrative Tribunal|
Land Tax, Primary Production exemption
B & L Linings Pty Ltd v Chief Commissioner of State Revenue  NSWCA 187, (2008) 74 NSWLR 481
Brown Cavallo Pty Ltd v Chief Commissioner of State Revenue  NSWCATAD 18
Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD)  NSWADTAP 25
Gaskell v Denkas Building Services Pty Limited  NSWCA 35
Jones v Dunkel (1959) 101 CLR 298
Leda Manorstead v Chief Commissioner of State Revenue  NSWSC 867
Longford Investments Pty Ltd v Commissioner of Land Tax (NSW) (1978) 8 ATR 656
Manly Council v Byrne  NSWCA 123
McIntosh Bros Pty Ltd (In Liq) v Chief Commissioner of State Revenue  NSWCATAD 124
In 2014 the Applicants agreed to licence part of the Applicant’s land to a grazier who conducted a business of cattle farming, to allow him to graze his cattle and grow and cultivate crops to feed the cattle.
The applicants disputed:
The Chief Commissioner’s investigations revealed development plans and works on part of the land for a residential development known as Waterfront Moama, a water recreational fun park known as Aqua Island, various marketing and sporting events and a quarry.
The initial issue was whether the applicants satisfied the primary production land tax exemption in s. 10AA(1) and (3)(a) of the Land Tax Management Act 1956 (“LTMA”).As the subject land was zoned rural land, the specific question was whether the dominant use of the land was for the maintenance of animals…for the purpose of selling them or their natural increase or bodily produce”.
At the end of the hearing, the Applicants confirmed they no longer required the Tribunal to review:
The applicants submitted that the standard of evidence required for the taxpayers to discharge their onus of proof concerning the “dominant use” test in s. 10AA did not require “intricate details about which lot or paddock was used at a particular point in time” but merely evidence from farmers’ about the ongoing use of land for grazing. The applicants provided no evidence as to how often and how many cattle were moved to or from the Lot 11 in 2017 and 2018. The Tribunal noted that the applicants’ evidence did not differentiate between the use of the subject land and the use of the agistee’s own adjacent land for the grazing activity.
The applicants relied on Tribunal authorities that the intensity of the use of the land can be objectively determined by comparing the maximum carrying capacity with the number of cattle actually grazed on the land. The Tribunal acknowledged this was an accepted approach. However, the Tribunal did not accept the applicants’ evidence on the intensity of the use of Lot 11, primarily because the applicant relied on evidence of grazing occurring on other land used in conjunction with Lot 11, in attempting to demonstrate the intensity of use of Lot 11.
Additionally, the Tribunal held that the carrying capacity of Lot 11 is not itself evidence of the number of cattle which were actually maintained on Lot 11 throughout the relevant period.
The Chief Commissioner submitted that the failure to call the sole director of one of the applicants to give evidence should lead to the Jones v Dunkel inference to be drawn. The Tribunal found that if the director had given evidence, that evidence may have assisted the Applicants to prove their case and their failure to do so did not assist the applicants to discharge their onus of proof.
The Tribunal was not satisfied on the balance of probability that the dominant use of Lot 11 was for the maintenance of animals for the purpose of selling them or their natural increase or bodily produce in accordance with s.10AA(3) of the LTMA.
The decision under review was affirmed.
The Tribunal made further orders if the Chief Commissioner wished to lodge a costs application, as foreshadowed during the hearing.