|Date of judgement||15 September 2011|
|Judge(s)||Needham DP, Verick JM, Butlin NJM|
|Court or Tribunal||Administrative Decisions Tribunal Appeal Panel|
Land used for primary production – whether land used for a commercial plant nursery
Repatriation Commission v Vietnam Veterans Association (2004) 61 NSWLR 394
On 3 December 2010, the Administrative Decisions Tribunal (“the Tribunal”) affirmed the decision of the Chief Commissioner of State Revenue (the "Chief Commissioner") that the applicant's property located at Terrey Hills (the "property") was liable for land tax for the 2005 to 2009 land tax years. The property was used to conduct a business of leasing indoor plants. The Tribunal ruled that the dominant use of the land was not primary production, and refused the applicant an exemption from land tax under the "land used for primary production exemption" in the Land Tax Management Act 1956 ("the Act"). The Tribunal also declined to remit the market rate interest included in the land tax assessment. The Applicant appealed to the Appeal Panel of the Tribunal.
On 15 September 2011, the Appeal Panel dismissed the appeal and affirmed the decision of the Tribunal.
The appeal panel held that only exceptional circumstances would justify any remission of market rate interest and refused to vary the Tribunal's order to not remit the market rate interest.
Lease a Leaf Pty Ltd ("LAL") conducted an indoor plant hire business on land leased from the owner, Lease A Leaf Property Pty Limited, who was the appellant in this case. LAL maintained plants for hire to clients in Sydney, but did not propagate plants on the land.
Before the Tribunal the dispute centred on the meaning of the words "commercial plant nursery" in s.3(d) of the Act as it then was for the 2005 land tax year, and s.10AA(3)(e) for the 2006-2009 land tax years. The Chief Commissioner submitted that the phrase required the nursery to be a place where plants are propagated, rather than merely nursed or maintained, and also that the plants must be sold, not merely leased or hired.
Judicial Member Frost of the Tribunal held that propagation was required for the purpose of the exemption, but also held that leasing plants or trees could satisfy the commercial element of the expression “commercial plant nursery” (but not without propagation of plants).
The issue before the Appeal Panel was whether the phrase "commercial plant nursery" in the exemption provision required the propagation and sale of plants.
The appellant submitted that:
The Chief Commissioner submitted that:
Without statutory definitions of the meaning of the expression "commercial plant nursery", the Appeal Panel considered the ordinary meaning of the phrase. The Appeal Panel held:
The Appeal Panel accepted the Chief Commissioner's submission that there are at least 5 reasons that the exemption requires that plants be produced for the purpose of sale [see paragraphs 22 and 32]. Importantly for the interpretation of the primary production exemption as a whole, one of those reasons is that the normal meaning of the phrase "primary production" connotes the bringing into existence of some product that will be sold.
The orders of the Appeal Panel were: