• The impact of this case on ATO policy is discussed in Decision Impact Statement: Melbourne Apartment Project Pty Ltd (as trustee for Melbourne Apartment Project) v Commissioner of Taxation (VID 887 of 2019).

Melbourne Apartment Project Pty Ltd (as trustee for Melbourne Apartment Project) v FC of T

Judges:
Kerr J

Court:
Federal Court of Australia

MEDIA NEUTRAL CITATION: [2019] FCA 2118

Judgment date: 19 December 2019

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Kerr J

1. The question posed in this proceeding is whether the sale by a registered charity of an apartment to a person eligible to receive social housing on a non-commercial basis for consideration less than 75% of the GST inclusive market value of the property is exempt from the GST.

2. The answer to that question depends on whether a supply of freehold title to an apartment is, or is not, a "supply of accommodation" within the meaning of those words as they appear in s 38-250(1)(b)(i) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) . For the reasons that follow, I have concluded it is.

3. Section 38-250(1) of the GST Act is located within Subdiv 38G which deals with "Activities of charities, etc". Within that subdivision, s 38-250 is headed "Nominal consideration etc". It provides, inter-alia, as follows:

• (1) A supply is GST-free if:
  • (a) the supplier is an *endorsed charity, a *gift-deductible recipient…; and
  • (b) the supply is for *consideration that:
    • (i) if the supply is a supply of accommodation - is less than 75% of the *GST inclusive market value of the supply; or
    • (ii) if the supply is not a supply of accommodation - is less than 50% of the GST inclusive market value of the supply.

4. The Applicant, Melbourne Apartment Project Pty Ltd as Trustee for Melbourne Apartment Project ( MAP ), is a Private Ancillary Fund. MAP is endorsed as a charity and as a deductible gift recipient. On its behalf, counsel submits that:

The sole issue in dispute is the statutory construction of the words "supply of accommodation" in s 38-250(b)(i) of the GST Act. Do those words include the sale of a residential apartment?

5. It is uncontentious that these proceedings challenge a private ruling issued by the Commissioner to the Applicant on 8 November 2018 relating to the supply of residential apartments by the Applicant at Shiel Street, North Melbourne (the Private Ruling).

6. The Respondent ( the Commissioner ) does not contest the Applicant's general framing of the issue. Correctly however, the Commissioner locates the dispositive issue concretely in the specific facts of the Private Ruling: whether sales of real property, being apartments situated at 1 Shiel Street in North Melbourne ( the Apartments ), are "[supplies] of accommodation" for the purposes of s 38-250(1) of the GST Act. That acknowledged, the Commissioner does not suggest that that there is anything material in the particular facts that would require the question which MAP poses to be differently expressed.

7. It is common ground that in determining an appealable objection from a Commissioner's private ruling the Court should apply the principles explained by Gilmour J in
Cooperative Bulk Handling Ltd v Federal Commissioner of Taxation [2010] FCA 508; 79 ATR 682 at [12]-[13]. Those principles are that the Applicant has the burden of proving that the Private Ruling should not have been made or should have been made differently. Further, the Applicant bears the onus of satisfying the Court that the Commissioner's opinion as to the application of the law to the facts of the Private Ruling was wrong.

8. The Court adopts and applies the reasoning of his Honour at [14] and [16]:

Jurisdiction with respect to the specified scheme

14. The Court's powers on an appealable objection decision are set out in s 14ZZP [of the Tax Administration Act 1953] as follows:

Where the Federal Court hears an appeal against an appealable objection decision under section 14ZZ, the Court may make such order in relation to the decision as it thinks fit, including an order confirming or varying the decision.

…

16. In reviewing the Commissioner's opinion on the application of the law to the specified scheme, the only material to which the Court can have regard is the ruling and documents identified in the description of the scheme which were either provided by the applicant or were used by the Commissioner:
Bellinz v Commissioner of Taxation [1998] FCA 615; (1998) 84 FCR 154 at 160. The Court is confined by the scheme description in the ruling, which remains constant throughout any appellate process. Neither the Commissioner nor the applicant can make good any deficiency in the scheme description. The Court is unable to consider a different scheme; it cannot investigate the facts on which the Commissioner's opinion was formed and make its own findings of fact, make assumptions, redefine the scheme or create its own description of the scheme:
Hastie Group Ltd v Commissioner of Taxation [2008] FCAFC 187; (2008) 172 FCR 496 at [3], (a case under Division 359 of the TAA); Commissioner of Taxation v McMahon at 133, 141 and 145;
Lamont v Commissioner of Taxation [2005] FCA 513; (2005) 144 FCR 312 at [13], [21] and [26].

Background facts and circumstances

9. The facts that the Commissioner identified and relied on for the purposes of the Private Ruling are not in dispute. They are those as were referred to in the Private Ruling:

• 1. The Australian Charities and Not-for-profits Commission (ACNC) website shows that the Melbourne Apartment Project is a Private Ancillary Fund which is endorsed as a charity and as a deductible gift recipient.
• 2. On 30 May 2018, MAP requested a private ruling in relation to sale of Apartments situated at Shiel Street, North Melbourne. The following information was sourced from your ruling application and telephone conversation on 16 August 2018.

  The Arrangement:

• 3. MAP described the arrangement relating to the sale of the Apartments as follows:
  • (a) MAP acquired the Apartments from the family trust which built them. The purchase price MAP paid aligned with the amount paid by the family trust for the purchase of the land (apportioned) and construction of the relevant apartment
  • (b) MAP sold the apartments to a person or persons (purchaser) who has/have been identified as suitable purchasers by the Melbourne City Mission and who were then living in social housing provided by the Victorian State Government
  • (c) Each purchaser(s) entered into a contract of sale and an 'Advance Agreement'. The sale price listed on the contract of sale is the market value of the relevant apartment at the time of signing the contract and MAP secures its interest in the Advance Agreement with a registered second mortgage
  • (d) At the time of settlement, the purchaser pays MAP the amount equivalent to the amount MAP paid to acquire the relevant apartment from the family trust. This amount is less than a 75% of the market value of the apartment. The remaining amount, being the difference between MAP's cost of purchasing the apartment and the market value of the apartment, was secured under the terms of the 'Advance Agreement'
  • (e) The debt associated with the Advance Agreement is required to be repaid at the earlier of 99 years or when the purchaser sells the relevant apartment. The Advance Agreement included for some reductions in the associated debt over the first four years, including a reduction of approximately $16,000 at settlement
  • (f) On the day of settlement, MAP assigned all interest and estate in the Advance Agreement and the associated debt to a public benevolent institution (PBI). The assignment is a gift to the PBI
  • (g) The eligible purchasers are required to pay a cash component of the consideration which is effectively the same amount as the cost of the apartment to MAP.
• 4. MAP provided a copy of one contract of sale which includes:
  • (a) Sale price listed as $604,000.
  • (b) Advance Agreement with an associated debt of $250,660 which included details of further debt reductions.
  • (c) Deed of Assignment of Advance.

10. Only one qualification needs be recorded regarding the parties' agreement as to the facts as set out in the Private Ruling. MAP submits that the reduction in the debt associated with the Advance Agreement referred to in paragraph 3(e) was $30,200.00 rather than $16,000.00. Whether or not that is so, the Court need make no finding in that regard. Neither party submits that anything relevant to the disposition of the application turns on that difference.

11. The challenged ruling of the Commissioner is as follows:

Question 1

Is the sale of residential premises situated at Shiel Street, North Melbourne (the Apartments) by the Applicant, a 'supply of accommodation' for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act?

Answer

No, the sale of the Apartments by the Applicant is not a 'supply of accommodation' for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act.

12. On 10 December 2018, MAP objected to the Commissioner's answer to that question and on 15 July 2019, the Commissioner disallowed MAP's objection (the objection decision ).

13. On 14 August 2019, MAP lodged a Notice of Appeal with this Court against the objection decision under s 14ZZ of the Taxation Administration Act 1953 (Cth). MAP applied for orders that the Commissioner's objection decision be set aside and that in lieu thereof the Commissioner rule on Question 1 as follows:

Yes, the sale of the Apartments by the Applicant is a 'supply of accommodation' for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act.

The legislative context

14. The parties are agreed as to the legislative context.

15. GST is payable on "taxable supplies": s 7-1(1) GST Act. "Taxable supply" is defined in s 9-5 to mean, inter alia, "a supply for consideration".

16. "Supply" is defined in s 9-10(1) to mean "any form of supply whatsoever". Without limiting that definition "supply" includes, under s 9-10(2), the following matters:

• (a) a supply of goods;
• (b) a supply of services;
• (c) a provision of advice or information;
• (d) a grant, assignment or surrender of * real property;
• (e) a creation, grant, transfer, assignment or surrender of any right;
• (f) a * financial supply;
• (g) an entry into, or release from, an obligation:
  • (i) to do anything; or
  • (ii) to refrain from an act; or
  • (iii) to tolerate an act or situation;
• (h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

17. "Real property" is then defined by s 195-1 of the GST Act to include:

• (a) any interest in or right over land; or
• (b) a personal right to call for or be granted any interest in or right over land; or
• (c) a licence to occupy land or any other contractual right exercisable over or in relation to land.

18. The parties agree, and the Court accepts, that for the purposes of this proceeding "supply" comprehends the assignment of the freehold interest in the Apartments.

19. A supply is not a taxable supply to the extent that the supply is GST-free or input taxed: s 9-5. In this context:

• (a) A supply is GST-free if it is GST-free under Division 38: s 9-30(1);
• (b) A supply is input taxed if it is input taxed under Division 40: s 9-30(2); and
• (c) To the extent that a supply would be both GST-free and input taxed, the supply is GST-free and not input taxed: s 9-30(3).

20. Generally, an entity will be entitled to input tax credits for any "creditable acquisitions" it makes "in carrying on [its] enterprise": ss 11-20, 11-5, 11-15(1). However, an acquisition is not a "creditable acquisition" to the extent that it relates to making supplies that would be input taxed: s 11-15(2)(a);
AXA Asia Pacific Holdings Limited v Commissioner of Taxation (Cth) [2008] FCA 1834; 173 FCR 500 at [38].

21. Section 9-30(3) thus operates as a "tie-breaker" provision. It ensures that a supply that is both GST-free and input taxed will be GST-free rather than input taxed. Where it applies, acquisitions made by an entity in making the supply will be "creditable acquisitions". The entity will therefore be able to claim input tax credits with respect to those acquisitions.

22. Subdivision 38G deals with the activities of charities. Within that subdivision is s 38-250(1). The terms of that provision are set out at [3] above. As is evident, the proper construction of that provision is the battle ground of this case.

23. A number of other provisions of the GST Act refer to supplies of accommodation and to residential rent and residential premises, and are therefore potentially also relevant to the circumstances of the Private Ruling.

24. Subdivision 40B deals with "Residential rent". Within that subdivision, s 40-35(1) provides that a supply of "residential premises" by way of lease, hire or licence is input taxed. However, such a supply is input taxed only to the extent that the premises are to be used predominantly for residential accommodation (regardless of the term of occupation): s 40-35(2)(a).

25. "Residential premises" is defined in s 195(1) as follows:

Residential premises means land or a building that:

• (a) is occupied as a residence or for residential accommodation; or
• (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation.

26. Subdivision 40C then deals with "Residential premises". Within that subdivision, s 40-65 deals with "Sales of residential premises". Section 40-65(1) provides that a sale of "real property" is input taxed, but only to the extent that the property is "residential premises" to be used predominantly for residential accommodation (regardless of the term of occupation). Such a sale is not input taxed to the extent that the residential premises are "new residential premises": s 40-65(2). "New residential premises" are residential premises that have not previously been sold as residential premises: s 40-75(1)(a).

Common ground as to the commencing point of analysis

27. It is common ground between the parties that the sales of the Apartments by MAP were input taxed supplies under s 40-65 of the GST Act because they were sales of "residential premises" that were to be used predominantly for residential accommodation. The Apartments were not "new residential premises" because they had previously been sold by the family trust to the Applicant as residential premises.

28. Because the Apartments were input taxed supplies, MAP is not liable to pay GST on their sale. However, as such MAP would not be entitled to claim input tax credits with respect to any acquisitions that relate to the making of the supplies (including the purchase of the Apartments and other associated costs such as conveyancing fees). Those are not "creditable acquisitions" due to the operation of s 11-15(2)(a).

29. However, it is also common ground that if the sales of the Apartments are not only input-taxed supplies but also GST-free supplies then under s 38-250, the tie-breaker provision in s 9-30(3) would apply such that the sales would be GST-free supplies rather than being input taxed. The result would be that MAP is not liable to pay GST on the sale of the Apartments, and is entitled to claim input tax credits for its creditable acquisitions including the purchase of the Apartments and other associated costs such as conveyancing fees.

30. It is further common ground that the Court is not required to determine whether the consideration provided for the supply of the Apartments in the instances which are the subject of the Private Ruling was less than 75% of the GST inclusive market value of those supplies. For the purposes of this decision, that circumstance is to be assumed. If that assumption is later disputed, however that issue might be resolved will not affect the correctness of the answer to the question before this Court.

31. Accordingly if, as is contended by the Applicant, the relevant supply was a "supply of accommodation" for the purposes of s 38-250(1)(b)(i) of the GST Act then the supply will be GST-free. MAP's application must succeed.

32. Conversely, if the supply of the Apartments by MAP was not a "supply of accommodation" within the meaning of that provision then that supply would be GST-free only if the consideration provided was less than 50% of the GST inclusive market value of the supply: s 38-250(1)(b)(ii). Because MAP does not suggest that the consideration for the sales referred to in the Private Ruling was less than 50% of the GST inclusive market value of the supply, it is common ground that in that circumstance the Commissioner's answer to Question 1 in the Private Ruling would be correct. Without the benefit of the tie-breaker provision, the supply must be input taxed under s 40-65.

33. It is uncontentious that neither the word "accommodation" nor the phrase "supply of accommodation" are defined terms in the GST Act.

34. It is also common ground, to the extent that extrinsic materials may be material to the construction of those expressions, that the relevant terms of the Explanatory Memorandum for the Bill which introduced the 75% threshold for a qualifying "supply of accommodation" were as follows:

Apply a 75% test to supported accommodation supplied by charities

1.73 Consultation with charities indicate that the 50% test is too low to give effect to the policy of making non-commercial supplies of charities GST-free in the supported accommodation/community housing sector.

1.74 Supported accommodation agencies charge clients an income-based contribution towards rental costs. In many cases this contribution is marginally above the 50% of market-value test. Not meeting the 50% test would make the supplies input taxed as residential rents, or taxable as commercial accommodation in the case of some boarding houses. Either treatment would have a negative impact on funding for this sector.

1.75 Items 67 and 68 increase the 50% market value and cost of supply tests for the non-commercial supplies of charities to 75% for supplies of supported accommodation/community housing. The test for supplies other than accommodation remains at 50%. [ New paragraphs 38-250(1)(b) and 38-250(2)(b) ]

The Applicant's submissions

35. MAP submits that a "supply" for the purposes of the GST Act is defined in s 9-10 in very broad terms. In that regard MAP cites the observations of Middleton J (Kenny J agreeing) in
Commissioner of Taxation v Gloxinia Investments (Trustee) [2010] FCAFC 46; 183 FCR 420 at [87]:

Subsection 9-10(1) indicates that a narrow or restricted interpretation is not intended by the notion of supply and in particular it does not permit, unless the particular context of the provision in question requires it, any restriction as to what was posited as a physical supply as opposed to other forms of supply. Furthermore, s 9-10(2), without limiting the forms of supply which are within the definition of supply, provides specific inclusions: for example, a grant or assignment of real property (s 9-10(2)(d), and a creation, grant, transfer, assignment or surrender of any right (s 9-10(2)(e).

36. MAP then submits that the ordinary meaning of "accommodation" includes any premises that are used by a person as their place of residence. Ms Symon QC, senior counsel for MAP, summarised the Applicant's position in oral submissions as follows:

The term is not defined and so it's to be given its ordinary meaning. If an apartment is not accommodation, then it's difficult to conceive of what is, we say, your Honour.

37. In MAP's statement to the Commissioner describing the scheme with respect to which it sought a Private Ruling, the Applicant quoted the Oxford English Dictionary's definition of accommodation as:

a room, group of rooms, or building in which someone may live or stay: Synonyms: housing, lodging(s), living quarters, quarters, rooms, chambers, place, place to stay, billet, shelter, board, a roof over one's head; informal: digs, pad; formal: abode, residence, place of residence, dwelling, dwelling place, habitation.

38. Having regard to that dictionary definition of the word "accommodation", MAP submits that:

26. The composite phrase "supply of accommodation", then, plainly incorporates a spectrum of meaning, which includes the sale of the Apartments. Inherent in any supply of "real property" (as it is broadly defined in the GST Act) upon which an apartment is constructed, is the right of the acquirer to occupy and use the apartment as accommodation - as a residence or a place to live - whether that supply be:

• (a) the sale of a freehold interest in land;
• (b) the grant of a leasehold interest in land; or
• (c) the grant of a licence to occupy land.

39. MAP submits that the terms of the Explanatory Memorandum are not inconsistent with its position. It submits in that regard:

36. The Applicant makes three comments on these extracts:

• (a) Having regard to the scheme identified in the Private Ruling and the arrangement between the Applicant and the Melbourne City Mission, the supplies of the Apartments by the Applicant can readily be described as supplies made in "the supported accommodation/community housing sector".
• (b) The reference to rent is readily to be seen as an example to illustrate the beneficial operation of the amendment, taken from the experience of particular agencies, rather than an exhaustive categorisation of the application of the section.
• (c) At a more general level, the conceptual basis is the same whether the supported accommodation/community housing is supplied by way of sale or rent: the GST-free exemption is designed to avoid a "negative impact on funding [for the supported accommodation/community housing] sector". That negative impact is the imposition of GST or the loss of input tax credits, which the charity will be required to pass on to the recipient or to bear as a cost.

40. It submits that the construction for which it contends is consistent with the beneficial purpose of s 38-250, which as the Explanatory Memorandum specifically identifies is "to give effect to the policy of making non-commercial supplies of charities GST-free in the supported accommodation/community housing sector". In that regard MAP cites the observations of Edmonds J in
Commissioner of Taxation v Bargwanna [2009] FCA 620; 72 ATR 639 at [28] in support of the proposition that the provision should be given a liberal interpretation, so as not to detract from that purpose:

It can be accepted that where Parliament has enacted legislation to encourage a particular activity, for example, legislation which gives particular concessions to the mining or petroleum industries, the legislation must be construed so as to promote Parliament's purpose and not so as to detract from that purpose:
Totalizator Agency Board v Commissioner of Taxation (1996) 69 FCR 311 at 323A per Hill J, with whom Tamberlin J and Sundberg J agreed. Thus an exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is to be given a liberal rather than a narrow construction and application: see
Commissioner of Taxation v Reynolds Australia Alumina Ltd (1987) 18 FCR 29 at 35 per Beaumont J and at 46 - 47 per Burchett J; Diethelm
Manufacturing Pty Ltd v Commissioner of Taxation [1993] FCA 437; (1993) 44 FCR 450 at 457 per French J.

41. MAP rejects the Commissioner's submission (see below at [51]-[52]) that read in context, the statute is to be understood to import a temporal element (limiting the term of occupancy) into the composite expression "supply of accommodation". To the contrary, MAP submits that there is nothing in the text of s 38-250(1)(b)(i) to suggest an intention of excluding any form of supply: whether that supply be by way of sale, lease or licence.

42. MAP also submits that the Commissioner's proposed construction conflicts with the input taxed treatment of the supply of "residential premises". It notes that in the relevant provisions of the GST Act, any purported relevance of the period of occupation is expressly excluded by the words "regardless of the term of occupation": see s 40-35(2)(a) with respect to the grant of a leasehold interest and the grant of a licence to occupy, and s 40-65(1) with respect to the sale of a freehold interest.

43. MAP submits that:

5. The Commissioner accepts that the bundle of rights that comprises a freehold estate includes a right to occupy the property - a right to use the property as accommodation. The Commissioner nevertheless contends that the expression "supply of accommodation" is inapt to cover the supply of a freehold interest. The basis for the Commissioner's contention is that the "essential character" of the supply of the freehold interest is one of ownership of the property, not "a mere right of occupation".

6. The fundamental difficulty with the Commissioner's contention is that s 38-250(1)(b)(i) applies to a "supply of accommodation" and not to a "supply of a right of occupation". That latter concept involves the granting of a licence to occupy land. The Commissioner's construction focuses on only one element of the broad definition of "real property" in s 195-1 of the GST Act, "a licence to occupy land" at paragraph (c). If Parliament's intention had been to restrict the operation of s 38-250(1)(b)(i) to that element of the definition it could have easily done so by using the words "supply of a right of occupation" - as was done in other parts of the GST Act, such as the definition of "student accommodation" in s 38-105 and the definition of "commercial accommodation" in s 87-15. See further at [11] below.

7. The Commissioner's construction ignores the remaining elements of the definition of "real property", including paragraph (a) "an interest in…land" which encompasses the supply of a freehold estate and a leasehold estate.

8. Having regard to the broad definition of "real property" in the GST Act, the conclusion that the expression "supply of accommodation" includes the supply of a freehold interest in land does not involve an artificial approach focused on the rights of occupation and use for accommodation that are inherent in the freehold interest. Rather, the Commissioner makes an artificial distinction between a freehold interest and a leasehold interest. He accepts that the latter is a "supply of accommodation" for the purposes of s 38-250(1)(b)(i). A freehold interest and a leasehold interest both:

• (a) Give the holder a proprietary interest in land3 and an "interest in…land" within paragraph (a) of the definition of "real property" in s 195-1 of the GST Act;
• (b) Give the holder the right of exclusive possession, being 'the right to exclude anyone and everyone from the land for any reason or no reason'.
• (c) Give the holder the right to register their interest over the land5 and to register a caveat claiming an estate or interest in the land.

9. The recipient of the supply of a freehold interest and a leasehold interest in each case acquires a bundle of rights that includes the rights of occupation and use for accommodation. Both supplies fall within the composite expression "supply of accommodation".

(Footnotes omitted).

44. MAP further submits that failing to give the compound phrase found in s 38-250 its ordinary grammatical meaning would be inconsistent with the use of the same expression "supply of accommodation" in s 38-260 of the GST Act in connection with retirement villages. That provision is as follows:

A supply is GST-free if:

• (a) the supplier is an *endorsed charity that operates a *retirement village; and
• (b) the supply is made to a resident of the retirement village; and
• (c) the supply is:
  • (i) a supply of accommodation in the retirement village, or a supply of a service related to the supply of the accommodation; or
  • (ii) a supply of meals.

45. Having regard to the various state legislative regimes within which retirement villages operate, MAP submits that the phrase "supply of accommodation" as found in s 38-260 plainly extends to the sale of a freehold interest in premises within a retirement village. Indeed, it observes that the Explanatory Memorandum which accompanied the enactment of s 38-260 stated that the current law (s 38-250) would continue to operate with the result that "a charitable retirement village can elect whether to use s 38-250 or s 38-260". MAP submits that the phrase "supply of accommodation" as it appears in different sections of the GST Act should be consistently construed. It follows, MAP submits, that where the phrase appears in s 38-250 it also encompasses the sale of a freehold interest.

The Commissioner's submissions

46. The Commissioner submits that the object of statutory construction is to ascertain legislative intention, being the intention that ought to be imputed to the legislature determined by reference to language of the statute viewed as a whole:
Certain Lloyd's Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [24]-[25] per French CJ and Hayne J, and at [88] per Kiefel J ( Certain Lloyd's Underwriters) .

47. The Commissioner accepts that that task must begin with a consideration of the text itself, but submits that the application of the rules of statutory construction will involve the identification of a statutory purpose which may appear from "an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials":
Lacey v Attorney-General for the State of Queensland [2011] HCA 10; 242 CLR 573 per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ at [44].

48. With respect to MAP's submission that the text of s 38-250(1)(b)(i) should be read so as to give the word "accommodation" in the expression "supply of accommodation" a meaning that accords with the Oxford English Dictionary definition of "accommodation" it cites, the Commissioner relies on the observations of Gordon J (Besanko J agreeing) in
Sea Shepherd Australia Ltd v Commissioner of Taxation [2013] FCAFC 68; 212 FCR 252 at [34] ( Sea Shepherd ):

The task [of construction] is not to pull apart a provision, or composite phrase within a provision, into its constituent words, select one meaning, divorced from the context in which it appears, and then reassemble the provision…

49. In his oral submissions Mr Wheelahan QC cited the three dictionary definitions which the Commissioner had identified in the Private Ruling:

Macquarie Dictionary

Accommodation

noun 1. the act of accommodating.

2. the state or process of being accommodated; adaptation.

5. anything which supplies a want; a convenience.

6. lodging, or food and lodging.

Lodging

noun 1. accommodation in a house, especially in rooms for hire: to furnish board and lodging.

2. a place of abode, especially a temporary one.

3. (plural) a room or rooms hired for residence in another's house.

Oxford Dictionary of English

Accommodation

1. [mass noun] British a room, group of rooms, or building in which someone may live or stay: they were living in temporary accommodation.

• • the available space for occupants in a building, vehicle, or vessel: there was lifeboat accommodation for 1.178 people.
• • the provision of a room or lodgings: the building is used exclusively for the accommodation of guests.

Collins English Dictionary

Accommodation

1. uncountable noun Accommodation is used to refer to buildings or rooms where people live or stay

[British]

The government will provide temporary accommodation for up to three thousand people.

Prices include flights and hotel accommodation.

Rates are higher for deluxe accommodations.

2. uncountable noun Accommodation is space in buildings or vehicles that is available for certain things, people or activities

The school occupies split-site accommodation on main campus.

Some trains carry bicycles, but accommodation is restricted so a reservation is essential

(Footnotes omitted; formatting and numbering as in original).

50. Mr Wheelahan submitted those various definitions entitle the Court to conclude that the word "accommodation" has no single ordinary meaning, but rather a number of ordinary meanings.

51. Mr Wheelahan submitted that most of the ordinary meanings of "accommodation" so identified share a common element: they convey an inherent sense of temporariness. The Commissioner thus submits that read in context, the expression "supply of accommodation" should be understood as adopting those definitions which convey that sense. In the context of s 38-250, the expression:

is inapt to cover the supply of title to premises-albeit that the purchaser may intend to live or stay in the premises. Rather it contemplates the supply of a right to occupy premises for the time being. When viewed in their totality the dictionary definitions reinforce this temporal aspect of the concept. They include the "state or process of being accommodated" and the examples refer to "temporary accommodation" or "accommodation of guests."

52. Accordingly, the Commissioner submits that the once-and-for all supply of a freehold estate of indefinite duration is not relevantly a supply of "accommodation". That conclusion, the Commissioner submits, is not altered by the fact that the bundle of rights that constitute a freehold estate includes a right to occupy the property. Focussing on that right in the statutory context is "artificial, involving an impermissible 'juristic disaggregation and classification of rights'". The essential characteristic of the supply of a freehold estate is the supply of a right of ownership of the property, not a mere right of occupation.

53. As textual support, the Commissioner points to other provisions of the GST Act which refer to "accommodation":

• (a) section 38-105 relevantly defines "student accommodation" as meaning "the right to occupy the whole or part of the premises used to provide the accommodation";
• (b) section 87-15 relevantly defines "commercial accommodation" as meaning "the right to occupy the whole or any part of commercial residential premises" (which is defined to mean certain types of premises including hotels, inns, hostels, boarding houses and the like);
• (c) the definition of "residential premises" in s 195-1 draws a distinction between premises (being land or a building) and their occupation for residential accommodation. Moreover, the definition was extended to cover "occupation … for residential accommodation" in order to remove the constraint of permanence or long-term commitment to dwelling in a particular place found by the Full Court of the Federal Court in Marana Holdings Pty Ltd v Federal Commissioner of Taxation21 to be inherent in the terms "reside" and "residence". That is, the reference to "accommodation" was introduced to address more temporary arrangements;
• (d) section 40-65 makes a distinction between premises and the "use" of the premises for residential accommodation;
• (e) section 40-35 which concerns the supply of premises by way of lease, hire or licence draws a distinction between a supply of commercial residential premises and the supply of accommodation "in" commercial residential premises;
• (f) section 38-90 refers to a "supply of accommodation" as part of an excursion or field trip being, necessarily, temporary accommodation.

(Footnotes omitted).

54. The Commissioner further submits that the references to "rental costs" and "boarding houses" in the Explanatory Memorandum are consistent with the construction advanced, as is the absence of any reference in that document to the supply of premises by way of sale.

55. The Commissioner disputes the comparability of the provision in question with s 38-260 as it uses the phrase "supply of accommodation" in the context of the taxation status of retirement villages:

20. The applicant's reliance on the State legislative regimes is misplaced. In particular:

• (a) the GST Act and the respective State Acts do not form part of a statutory scheme and, in accordance with the principles in
  Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378, there is no warrant for reading the GST Act by reference to the State legislation;
• (b) there is no basis for assuming the Commonwealth Parliament's intention was to align the GST-free treatment of the supply of accommodation in retirement villages with the respective State legislative schemes as the applicant contends. The objects and operation of the respective statutes are markedly different. The State legislation is principally concerned with the regulation of the retirement village industry. The definition of "residence right" to which the applicant refers has evidently been drafted so as to capture those persons whom the State legislature thought it appropriate to subject to such regulation. That criterion has no bearing on the operation of the GST Act and the circumstances when the supply of freehold property should be GST-free;
• (c) in any event, none of the State or Territory retirement villages legislation uses the words "supply of accommodation".

  (Footnotes omitted except where expressly set out).

56. The Commissioner finally submits, on the authority of what the plurality (French CJ, Kiefel, Bell and Keane JJ) stated in
New South Wales Aboriginal Land Council v Minster Administering the Crown Lands Act [2016] HCA 50; 260 CLR 232 at [32]-[34], that the principle that provisions providing concessions or having a beneficial purpose should be afforded a liberal interpretation has no application to the present case:

• [32] It has been said that remedial or beneficial legislation should be accorded a "fair, large and liberal interpretation", rather than one which is literal or technical (94). At issue in R v Kearney; Ex parte Jurlama was whether a claim could be made under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) with respect to land which could only acquire the necessary character of being "traditionally owned" by reference to land which lay outside that which was available to be claimed. Gibbs CJ (with whom Brennan, Deane and Dawson JJ agreed) said (96): "If the section is ambiguous it should in my opinion be given a broad construction, so as to effectuate the beneficial purpose which it is intended to serve." The statute in that case left the question open and provided the Court with choices in its approach to the statute's construction. In such a circumstance the Court was clearly justified in adopting a broader approach on the basis of the beneficial purpose of the statute.
• [33] That is not the situation which arises with respect to s 36(1) of the ALR Act, where it is the meaning of particular words which is in question. In Victims Compensation Fund Corporation v Brown it was pointed out that to commence the process of construction by posing the type of construction to be afforded - liberal, broad or narrow - may obscure the essential question regarding the meaning of the words used. It is one thing to say that no restricted construction should be given to legislation which confers benefits; but if the focus is on the meaning of specific words, the circumstance for a liberal application may not arise. Instead, the Commissioner submits, the beneficial object of providing a concession to certain taxpayers (those having charitable status) must be balanced against the stated policy of ensuring that such taxpayers do not obtain an unfair advantage over other businesses. Accordingly the Court should not approach the question with a bias in favour of a liberal construction as might be appropriate in other cases.

(Footnotes omitted).

Consideration

57. The challenge of statutory construction lies in the nature of language. As Frankfurter (Justice Felix Frankfurter, "Some Reflections on the Reading of Statutes" (1947) 47 Columbia Law Review 527, 533) notes:

The difficulty is that the legislative ideas which laws embody are both explicit and immanent. And so the bottom problem is: what is below the surface of the words and yet fairly a part of them?

58. In addressing that inherent challenge, the High Court of Australia repeatedly has emphasised that the task of statutory construction requires close attention to be given to the text. Thus in
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 ( Alcan ) the plurality, Hayne, Heydon, Crennan and Kiefel JJ stated at [47]:

This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.

(Footnotes omitted).

59. The reasoning of the plurality in Alcan at [48] makes plain that what the Court is referring to as "the text itself" are the words enacted by Parliament given their "ordinary and natural meaning".

60. If that meaning has been clearly expressed then not only must statutory construction begin with the text itself: "[s]o must the task of statutory construction end":
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 ( Consolidated Media) per French CJ, Hayne, Crennan, Bell and Gageler JJ at [39].

61. However, as the passage at [39] of Consolidated Media from which that observation is extracted later acknowledges, the text must be read in its statutory context. The context in which any particular text is located may require the words that Parliament has enacted to be understood as intended to convey something other than their ordinary and natural meaning. Thus in
Lacey v Attorney-General Qld) [2011] HCA 10; 242 CLR 573, drawing on the decision of
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 ( Project Blue Sky ) , French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ held at [43]-[44]:

• 43 The objective of statutory construction was defined in Project Blue Sky … as giving to the words of a statutory provision the meaning which the legislature is taken to have intended them to have. … The legislative intention there referred to is not an objective collective mental state. Such a state is a fiction which serves no useful purpose. Ascertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts. …
• 44 The application of the rules will properly involve the identification of a statutory purpose, which may appear from an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials. The purpose of a statute is not something which exists outside the statute. It resides in its text and structure, albeit it may be identified by reference to common law and statutory rules of construction.

  (Footnotes omitted).

62. In Project Blue Sky the plurality, McHugh, Gummow, Kirby and Hayne JJ had reasoned (at [78]):

…. the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning …

(Footnotes omitted).

63. The approach set out in Lacey and Project Blue Sky has remained influential. Thus in Certain Lloyd's Underwriters French CJ and Hayne J held:

• 24 The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky …, "[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute" [emphasis added]. That is, statutory construction requires deciding what is the legal meaning of the relevant provision "by reference to the language of the instrument viewed as a whole" and "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed".
• 25 Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure …

  (Footnotes omitted).

64. Similarly in
Akiba v Commonwealth [2013] HCA 33; 250 CLR 209, after citing Lacey, French CJ and Crennan J observed (at [31]):

The identification of a statute's purpose may aid in its construction. That identification may be done by reference to the apparent legal effect and operation of the statute, express statements of its objectives and extrinsic materials identifying the mischief to which it is directed.

65. More recently, in
SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at [14] Kiefel CJ, Nettle and Gordon JJ restated the approach required to be taken to statutory interpretation in substantially similar terms, as follows (at [14]):

The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.

(Footnotes omitted).

66. Having regard to the above principles, I proceed on the basis that I am to commence first by focussing close attention on the text of the relevant provision. I am to give the words in which the provision has been expressed by the Parliament their ordinary and natural meaning. However, from the outset I am also to be mindful that having regard to the statutory context in which those words appear and any express statements of the statute's objectives or extrinsic materials identifying the mischief to which the provision is directed may require me to ascribe a meaning to the statutory language that differs from its ordinary grammatical meaning.

67. It will be recalled that the relevant text of 38-250(1) is as follows:

A supply is GST-free if:

• (a) the supplier is an *endorsed charity, a *gift-deductible recipient…; and
• (b) the supply is for *consideration that:
  • (i) if the supply is a supply of accommodation - is less than 75% of the *GST inclusive market value of the supply; or
  • (ii) if the supply is not a supply of accommodation - is less than 50% of the GST inclusive market value of the supply.

The natural and ordinary meaning of "accommodation"

68. In my opinion, MAP's submission that the ordinary and natural meaning of "accommodation" includes an apartment or any premises that are used by a person as their place of residence is to be accepted. Such usage is well within the natural, ordinary and primary meaning of "accommodation" as that noun is commonly used in everyday speech. So understood, the meaning of the word falls within one or more of the definitions contained in each of the three dictionaries cited by the parties. Mr Wheelahan made no riposte to Ms Symons' rhetorical question: "[i]f an apartment is not accommodation, then it's difficult to conceive of what is".

69. I acknowledge Mr Wheelahan's submission that the word has more than one ordinary meaning and that, viewed in their totality, the dictionary definitions of the word "accommodation" suggest that there is commonly a temporal aspect conveyed by that "concept". The Commissioner in his written submissions highlighted that one such definition is the "state or process of being accommodated". However, that definition cannot be imported into the language of the provision in question; a supply of the state or process of being accommodated is grammatically incomprehensible and inconsistent with the natural or ordinary meaning of the expression. The Commissioner also noted that the definitions cite the term as being used to refer to "temporary accommodation" and "accommodation of guests". It might however be observed that those two examples in fact refer to what are subsets of the wider concept.

70. Moreover, the Oxford English Dictionary's synonyms for the term "accommodation" (housing, lodging(s), living quarters, quarters, rooms, chambers, place, place to stay, billet, shelter, board, a roof over one's head; informal: digs, pad; formal: abode, residence, place of residence, dwelling, dwelling place, and habitation) are inconsistent with the Commissioner's submission that a temporal aspect is implicit in the ordinary meaning of the word.

71. Putting aside contextual considerations as might be relevant for the moment, I reject the Commissioner's submission that the ordinary and natural meaning of the word "accommodation" does not extend to any place that is used by a person as their place of residence because of an inherent temporal limitation. The word, in its ordinary sense, in my opinion, includes an apartment in which a person resides, whether their right of residency is conferred be by licence, lease or ownership.

The meaning of "supply of accommodation"

72. I turn then to what Mr Wheelahan for the Commissioner submits to be the compound expression: "supply of accommodation". As identified at [51] -[52] above, the Commissioner submits that, understood in its statutory context, the compound expression "supply of accommodation" is inapt to cover the supply of title to premises; albeit that the purchaser may intend to live or stay in the premises. Rather, the expression contemplates the supply of a right to occupy premises for the time being.

73. In support of that submission the Commissioner's written submissions rely on the reasoning of Gordon J (Besanko J agreeing) in Sea Shepherd at [34]:

The task [of construction] is not to pull apart a provision, or composite phrase within a provision, into its constituent words, select one meaning, divorced from the context in which it appears, and then reassemble the provision…

74. There are two difficulties with that submission which lead me to reject it.

75. First, it may be doubted that "supply of accommodation" is relevantly a compound phrase. In the GST Act, "supply" is a defined term comprehending the widest possible range of methods of transferring something of value from one person to another: see ss 9-10(1) and 9-10(2). The better view in my opinion is that the words "supply of accommodation" as found in 38-250(1)(b)(i) do not relevantly form a compound expression. Read together, those words do no more than apply the definition of a "supply" to a particular subject: "accommodation." The words read together, in my view, convey no separate and distinct meaning as a compound phrase.

76. Second, assuming I am incorrect in that regard I am, in any event, satisfied that the circumstances as were the subject of decision in Sea Shepherd are not analogous to those in this matter. In that proceeding, the Sea Shepherd organisation sought to squeeze its campaigning against the killing of whales into the language of a charitable object of "providing short term direct care of animals (but not only native wildlife) that have been lost or mistreated or are without owners". To do so, Sea Shepherd relied (so the majority found) on breaking that object into its constituent words without regard to their contextual meaning as part of that long sentence. The majority rejected that approach as giving the words of the charitable object a meaning that extended beyond their ordinary and natural meaning when read as a whole. The rejection of Sea Shepherd's application, inter-alia for the reasons given by Gordon J cited above at [73], was in those circumstances entirely predictable.

77. By contrast, in the present case MAP does not advance its case on the basis that it is necessary to pull apart s 38-250(1)(b)(i) into its constituent words; select meanings for those words divorced from the context in which they appear; and then reassemble the provision. It simply seeks to rely on the words of the provision, in statutory order, read in their ordinary and natural sense. The case therefore does not assist the Commissioner.

78. The High Court has stated on many occasions that the language which has actually been employed in the text of legislation is the surest guide to legislative intention. I discern nothing in the text of 38-250 itself as can support the Commissioner's submission that the expression "supply of accommodation" is inapt to cover the supply of title to premises, albeit that the purchaser may intend to live or stay in the premises, and instead contemplates only the supply of a right to occupy premises for the time being.

Contextual considerations

79. The question that then arises is whether there is any contextual reason inhering in the Act, read as a whole, as might suggest that the primary reading of the provision should not be applied. In my view, there is no such reason.

80. I am unpersuaded that the other provisions of the GST Act that use the word "accommodation" which the Commissioner cites as textual support (see above at [53]) can provide any sufficient basis to support the Commissioner's contentions as to the construction of the words of 38-250(1)(b)(i):

• • It can be accepted that s 38-105(3) relevantly defines "student accommodation" as meaning "the right to occupy the whole or part of the premises used to provide the accommodation". However, that is a specific reference to a particular form of accommodation dealt with on its own terms. It has no relevance to the construction of s 38-250.
• • Similarly, it may be accepted that s 87-15 defines "commercial accommodation" as meaning "the right to occupy the whole or any part of commercial residential premises" (which is defined to mean certain types of premises including hotels, inns, hostels, boarding houses and the like). However, that provision also stands on its own as a specific subject of the GST Act.
• • The same issue arises with respect to the definition of "residential premises" in s 195-1, which the Commissioner observes draws a distinction between premises (being land or a building) and the occupation of such premises for residential accommodation:

  "residential premises" means land or a building that:

  • (a) is occupied as a residence or for residential accommodation; or
  • (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation;

  (regardless of the term of the occupation or intended occupation) and includes a * floating home.

  The Commissioner submits, more specifically, that the reference to "accommodation" in s 195-1 was introduced to address more temporary arrangements. The statutory definition was extended to include occupation "for residential accommodation" in order to overcome what the Full Court of the Federal Court in
  Marana Holdings Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 307; 141 FCR 299 found to be inherent in the terms "reside" and "residence": an implication of permanence or long-term commitment to dwelling in a particular place.

  However, any force that submission might otherwise have had in suggesting that "supply of accommodation" should carry a narrower meaning is put to rest by noting the words then following in brackets: "(regardless of the term of the occupation or intended occupation)". That addition means that use of the word "accommodation" in s 195-1 is equally entirely consistent with that word embracing, as MAP submits, any premises that are used by a person as their place of residence whatever might be the bundle of legal rights as confers their right of occupancy.

• • Insofar as s 40-65 of the GST Act draws a distinction between premises and the "use" of the premises for residential accommodation, that also fails to support the Commissioner's position. The provision is as follows:

  Sales of residential premises

  • (1) A sale of *real property is input taxed, but only to the extent that the property is *residential premises to be used predominantly for residential accommodation (regardless of the term of occupation).
  • (2) However, the sale is not input taxed to the extent that the residential premises are:
    • (a) *commercial residential premises; or
    • (b) *new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998 …

  That provision addresses a quite different subject matter: the GST treatment of non-charitable sales of real estate used predominantly for residential accommodation.

  In any case, to the extent that the provision has relevance to the construction to be given to s 38-250 (which I do not accept), that it was thought necessary to include the words in brackets "(regardless of the term of occupation)" may similarly be thought to be more consistent with MAP's position than that of the Commissioner.

• • I accept that s 40-35, which concerns the supply of premises by way of lease, hire or licence, draws a distinction between the supply of commercial residential premises and the supply of accommodation "in" commercial residential premises. Again, however, that is a particular provision of the GST Act addressed specifically to the treatment of such premises. The manner by which the distinction is expressed cannot govern the construction which should be given to s 38-250.
• • Finally, it can also be accepted that where s 38-90 refers to a "supply of accommodation" as part of a school excursion or field trip, in that context the phrase necessarily refers to a supply of temporary accommodation. Once again however, that is a separate and distinct matter dealt with on its own terms in the GST Act. It has no bearing on the construction to be given to s 38-250.

81. In
Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 ( Barrowcliff ), Hodges J said at 452:

I think it is a fundamental rule of construction that any document should be construed as far as possible so as to give the same meaning to the same words whenever those words occur in that document, and that applies especially to an Act of Parliament and with especial force to words contained in the same section of an Act…

82. However, in each and every one of the above examples the word "accommodation" (which the Commissioner submits should be construed uniformly with the word as it appears in s 38-250(1)(b)(i)) is not contained in the same section of the GST Act. Rather, the word appears in different sections each specifically dealing with different subject matters. In any case, the "fundamental rule" stated by Hodges J is merely a presumption of statutory construction that is readily rebuttable: see
Commissioner of Taxes (Vic) v Lennon [1921] HCA 44; 29 CLR 579 per Higgins J at 590.

83. In oral submissions Mr Wheelahan did not seek to support the Commissioner's case directly on the Barrowcliff principle. He instead submitted that the "sense" of the word "accommodation" (being that, in the Commissioner's submission, it relates to a term of occupancy rather than to premises) is common to all the other circumstances in which it appears within the GST Act.

84. However, that proposition is contested. MAP submits that where the expression "supply of accommodation" appears in s 38-260 of the GST Act it does not convey that "sense". Consistently with the submissions Ms Symon advanced in respect of the construction of s 38-250, MAP submits that where it appears in s 38-260 the expression must be understood as extending to the sale of a freehold interest in premises within a retirement village.

85. Mr Wheelahan does not dispute that the states can permit, and have permitted, the sale of freehold interests in such properties. Extracts of the relevant statutory provisions of the various states as were in force at the time of passage of the amendments introducing s 38-250(1)(b)(i), and as are currently in force, were before the Court.

86. I acknowledge Mr Wheelahan's submission that the GST Act and the respective state acts which govern the conduct of retirement villages do not form part of a statutory scheme. Accordingly, as he submits, the principles in Certain Lloyd's Underwriters do not warrant reading the GST Act by reference to that state legislation. However, the Commissioner's submission in that respect misses the point pressed on behalf of the Applicant. That point is that s 38-260 of the GST Act operates indifferently to the manner in which the several states regulate retirement villages. There is nothing self-evident in its language to suggest that it applies in any more limited way.

87. MAP submits that the phrase "supply of accommodation" in s 38-260 therefore can incorporate the supply of a freehold interest in land. Having regard to that conclusion, MAP submits that it follows that the phrase "supply of accommodation" as it appears in s 38-250 should be consistently construed.

88. No doubt if the expression "supply of accommodation" as it appears in s 38-260 properly construed does extend to the sale of real estate in a retirement village, then the Barrowcliff presumption, albeit weak, might suggest that the phrase is to be read as conveying the same meaning where it appears in s 38-250.

89. However, for present purposes the resolution of that point can be put to one side. That is because it at least seems incontestable that the word "accommodation" as found in s 38-260 is neither in terms nor by implication limited in accordance with the "sense" Mr Wheelahan submits that the word conveys in every other provision of the GST Act. The only way in which that might be established is if by circular logic the word "accommodation" as it appears in s 38-260 is also required to be construed having regard to the "sense" that Mr Wheelahan suggests is implicit in its use in the other provisions of the GST Act he cites: a proposition that depends on the very conclusion it is advanced to support.

90. In
Taylor v Owners - Strata Plan No 11564 [2014] HCA 9; 253 CLR 531 ( Taylor ), Gageler and Keane JJ stated:

• 65. Statutory construction involves attribution of legal meaning to statutory text, read in context. "Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning … But not always". Context sometimes favours an ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves reading statutory text as containing implicit words. Implicit words are sometimes words of limitation. They are sometimes words of extension. But they are always words of explanation. The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.
• 66. Context more often reveals statutory text to be capable of a range of potential meanings, some of which may be less immediately obvious or more awkward than others, but none of which is wholly ungrammatical or unnatural. The choice between alternative meanings then turns less on linguistic fit than on evaluation of the relative coherence of the alternatives with identified statutory objects or policies.

  (Footnotes omitted).

91. Although Gageler and Keane JJ were in dissent in that case, that does not appear to affect the correctness of their Honours' statement of the relevant principles in the above passage. Their Honours' judgment at [65] was cited with apparent approval in
HFM043 v Republic of Nauru [2018] HCA 37; 359 ALR 176 at [24] by Kiefel CJ, Gageler and Nettle JJ.

92. Having regard to what appears at [66] of Gageler and Keane JJ's reasons, the (submitted for) existence of several alternative (albeit more limited) ordinary meanings of the word "accommodation" might be relevant to the task of construction if the context in which the word appears in the GST Act were to reveal one of those alternative meanings to be more coherent.

93. However, it appears to the Court that having regard to the analysis above at [80] of these reasons the word "accommodation" is used within the GST Act as an undefined term to serve a number of different specific purposes in a number of different provisions. I decline to conclude that the "sense' of its use in those other provisions is a sufficient reason to give the word as it is employed in s 38-250(1)(b)(i) as a noun, unconfined by any words of limitation. anything other than its generic, plain and ordinary meaning. I reject the proposition that the context in which s 38-250(1)(b)(i) appears requires that one of the more limited dictionary or ordinary meanings is to be selected to substitute for that meaning.

94. Indeed, Mr Wheelahan stopped short of advancing such a submission. He confined the Commissioner's submissions to the proposition that s 38-250(1)(b)(i) should be construed having regard to the "sense" said to be conveyed by most of the dictionary meanings. For the reasons set out above, I do not find that submission persuasive. In any event however I am satisfied that the indicia within the GST Act to which the Commissioner points provide too frail a foundation upon which to rely to accept that submission. As their Honours' in Taylor note at [65]: statutory construction is not speculation.

95. Finally, I reject as implausible the Commissioner's submission that in the statutory context in which the relevant provision is located that there can be discerned some relevant and inherent difference between the transfer of the bundle of rights that constitute a freehold estate (which the Commissioner contends is not within the meaning of a "supply of accommodation") and the transfer of a bundle of rights that constitutes a leasehold estate (which the Commissioner in his written submissions accepts is within that meaning) as would justify reading s 38-250 as excluding the former and including the latter.

96. I accept MAP's submission that a freehold interest and a leasehold interest both:

• (a) Give the holder a proprietary interest in land and an "interest in…land" within paragraph (a) of the definition of "real property" in s 195-1 of the GST Act;
• (b) Give the holder the right of exclusive possession, being "the right to exclude anyone and everyone from the land for any reason or no reason" (
  Queensland v Congoo [2015] HCA 17; 256 CLR 239 at [8]); and
• (c) Give the holder the right to register their interest over the land and to register a caveat claiming an estate or interest in the land.

97. In oral submissions Ms Symon drew the Court's attention to the definition of a "long term lease" in s 195-1 as referring to a supply by way of lease, hire or licence for at least 50 years.

98. Having regard to that defined term, other provisions of the GST Act such as s 38-445 treat certain grants of freehold and long term leases identically for the purposes of the Act. At common law, an option to renew a lease is an incident of the lease: Alcan per French CJ at [8].

99. I observe that in the Australian Capital Territory, the largest estate in land an ordinary purchaser usually can acquire is a 99 year lease.

100. I reject the proposition that in that statutory and common law context, such differences as may be accepted to exist between those estates require the conclusion that the legislature intended that very long, potentially renewable leases would fall within the language of s 38-250(1)(b)(i) of the GST Act while freehold estates would be excluded. From the point of view of a person in need of charitable assistance seeking to acquire accommodation (whose interests the provision may thought intended to benefit), a freehold estate offers only limited advantages over a long leasehold interest.

101. In oral argument, Mr Wheelahan sought to refine the Commissioner's position. He submitted that it was not that a supply by way of lease, hire or licence would fall within the meaning of s 38-250(1)(b)(i) and a supply of a freehold interest would not. Rather, because a degree of temporality was to be implied within the meaning of "accommodation" any supply - however manifested - conferring a long term right of occupancy was necessarily to be excluded.

102. However, as junior counsel for MAP Mr Sievers tellingly submitted in reply, where that line might be drawn was left hanging. Would it apply to a right to occupy for more than one year, or ten years, or more? The Commissioner had advanced no criteria or principle as would enable a practical, commercial determination of what would fall within or outside that exclusion. A basis for its application was wholly lacking from the analysis advanced by Mr Wheelahan on the Commissioner's behalf in oral submissions. Mr Sievers therefore submitted that the Commissioner's submission in that regard did not provide a plausible basis to support a conclusion as to the proper construction of s 38-250(1)(b)(i). I agree. The Commissioner's refined submission cannot be accepted. Mr Wheelahan pointed to no basis in the text, context or purpose of the provision which would reveal an appropriate discriminant. Moreover the application of any such discriminant, assuming one could be identified, would have the seemingly perverse effect of privileging the tax treatment of the supply of insecure short term tenure to disadvantaged persons over the supply of more secure entitlements.

103. The Commissioner does not suggest that the charitable status of MAP has been abused, or that by the scheme upon which MAP has sought a private ruling it has attempted to do anything other than to supply accommodation to persons both in need and eligible to benefit from public housing assistance. Those persons have been assisted into that accommodation by way of a 99 year no-interest loan. The arrangements for repayment of that loan on any subsequent sale ensures that such funds as are repayable, when recovered, will be applied to the same charitable objective.

104. Further, in my view, the Commissioner does not advance any plausible reason why MAP's transaction should be viewed, as the Commissioner appears to contend, as having been entered into on a commercial basis. I accept that Mr Wheelahan is correct that the GST Act generally deems any supply by a charitable organisation for more than 50% of the market value to be a commercial supply. However, assuming that MAP is correct in its submission that the supply of accommodation by MAP was for consideration less than 75% of the market value then MAP's scheme simply gives effect to an express exception to that principle which Parliament has seen fit to enact. On that basis, the posited supply does not and cannot fall within the description of a commercial supply. The balancing considerations that the Commissioner submits may apply to the commercial operations of charities are therefore not engaged.

105. To the extent that it is possible to discern an overarching public purpose underpinning the provision in question, I am satisfied that that purpose has not been abused by this specific instance of its application. MAP's scheme has enabled purchasers identified to the MAP by the Melbourne City Mission to obtain secure long term accommodation, which they would not otherwise be able to afford.

106. Having regard to the above, I am satisfied that the ordinary and natural meaning of a supply of accommodation as is contained in s 38-250(1)(b)(i) is that for which MAP contends. I am satisfied that having regard to the context of the legislation in which the provision appears, there is no reason to depart from that ordinary and natural meaning. There is no adequate foundation to support a finding that a literal or grammatical construction of the provision; the purpose of the statute; or the canons of construction require its words to be read other than in accordance with their plain meaning.

107. There is thus nothing as would support the Commissioner's conclusion that what is meant by a "supply of accommodation" in the relevant provision excludes the circumstances set out in the facts of the Private Ruling.

108. For completeness I should address three matters which in my view are not dispositive, and upon which I have placed no weight.

109. First, in my opinion what is contained in the Explanatory Memorandum assists neither party. There is nothing in the relevant paragraphs of that document (see at [34] above) which appears to be clearly consistent with, or clearly inconsistent with, the respective submissions of either party. I accept MAP's submissions in that regard.

110. Second, I am not persuaded that the text of the relevant Minister's Second Reading Speech can control the meaning to be given to the provision. It may be accepted, as Mr Wheelahan submits, that that speech reveals that the circumstance which motivated the introduction of the amendments to s 38-250 was that the government, having regard to consultation with the charity sector, had identified that the income based client contributions associated with charitable schemes for the provision of temporary residential accommodation were then often marginally above the 50% market test. However, the statutory language used to express Parliament's response to that triggering concern was not so limited. Had Parliament wished to confine the benefit afforded by the provision to that precise circumstance, it could have done so. Indeed, as Ms Symon pointedly observed, the GST Act is replete with instances of precisely such limited statutory language being used to confine a benefit or to define an exception. Many such examples were referred to by Mr Wheelahan himself in his submissions in support of the Commissioner's contentions. Parliament could have chosen to use such statutory language had it intended precisely to confine the benefit afforded by s 38-250(1)(b)(i) to the limited triggering concern to which the Minister referred in the Second Reading Speech. It did not do so.

111. Third, I am uninfluenced by MAP's submission that a liberal construction must be given to the provisions of s 38-250 because it is remedial or beneficial legislation.

112. In
JMB Beverages Pty Ltd v Federal Commissioner of Taxation [2009] FCA 668; 73 ATR 191 (a case about the application of the GST-free exemption for food) Edmonds J (at [60]) referred with approval to the following observations made in
Commissioner of Taxation v Bargwanna [2009] FCA 620 (at [28]):

It can be accepted that where Parliament has enacted legislation to encourage a particular activity, for example, legislation which gives particular concessions to the mining or petroleum industries, the legislation must be construed so as to promote Parliament's purpose and not so as to detract from that purpose:
Totalizator Agency Board v Commissioner of Taxation (1996) 69 FCR 311 at 323A per Hill J, with whom Tamberlin J and Sundberg J agreed. Thus an exemption which exists for the purpose of encouraging, rewarding or protecting some class of activity is to be given a liberal rather than a narrow construction and application: see
Commissioner of Taxation v Reynolds Australia Alumina Ltd (1987) 18 FCR 29 at 35 per Beaumont J and at 46 - 47 per Burchett J;
Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 at 457 per French J.

113. That passage is relied upon by MAP. However, those submissions ignore that his Honour had continued in the same paragraph:

But in the case of a provision which confers an exemption upon a particular kind of body or fund which meets certain requirements, Parliament's purpose is not promoted by construing the provision in a manner favourable to the body or fund referred to in it: see TAB at 323C per Hill J. Indeed, there is much to be said for the view that the privileged status of exemption from income tax on the income of a fund which aspires to that status demands strict adherence to the requirements that must be met before that status is conferred …

114. In my view the provision under consideration is of the second character; that is, properly understood, it confers an exemption upon a particular kind of body assuming that body has met the requirements set out in the statute. I accept the Commissioner's submission that there is no warrant to give s 38-250(1)(b)(i) a broader construction than would otherwise apply on a reading of its text understood in its ordinary sense in order to promote the Parliament's purpose or so as to not detract from that purpose.

115. However, that is of no consequence. I am satisfied both that MAP is the kind of body to which the provision in question was intended to apply, and that it has complied with its requirements. That is sufficient to dispose of this matter.

Commissioner's interpretation of s 38-260

116. Out of an abundance of caution, before concluding these reasons I should record that in the course of oral argument the occasion arose to consider the possible relevance of the Commissioner's interpretation of s 38-260 of the GST Act. In consequence, consistently with the Commissioner's duty as a model litigant, Mr Wheelahan provided the following note after I had settled the above reasons in draft.

• 2. Consistent with the oral submissions made at the hearing, the respondent's position is that the expression 'supply of accommodation' should be interpreted consistently in both ss 38−250 and 38−260.
• 3. The Commissioner does not accept that a supply of a freehold interest in a residential unit in a retirement village made by an endorsed charity that operates a retirement village would be a supply of 'accommodation' for the purposes of s 38−260 of the GST Act (which appears to be the premise underlying the applicant's submissions concerning s 38−260).
• 4. That is not to say that the supply of a freehold interest in a residential unit in a retirement village will necessarily either be input taxed as a supply of residential premises or subject to GST as a supply of new residential premises. Rather, the supply may be GST-free under s 38-25(4A) if it constitutes a supply of real property that is residential premises consisting of a serviced apartment in a retirement village and it is made to a person who requires the requisite kind of aged care services.
• 5. Relevantly, both s 38−25(4A) and s 38−260 were enacted by the Tax Laws Amendment (Retirement Villages) Act 2004 (Cth), so the express reference to a 'sale of real property' in one provision and not the other is textually significant.
• 6. For completeness, the respondent has reviewed its databases of public advice and guidance, previous private rulings and published edited versions of private rulings. The respondent has found nothing in those searches that suggest that the respondent has ever taken a position that is inconsistent with the position set out above. That is, the respondent has not interpreted s 38−260 as applying to treat a supply of a freehold interest in a residential unit in a retirement village made by an endorsed charity as being GST−free. However, equally, it appears from those searches that the issue has not previously been required to be addressed directly by the respondent.

  (Footnotes omitted).

117. The Commissioner's submission that the express reference in s 38-25(4A) to the supply of real property and the absence of such a reference in s 38-260 is textually significant to the interpretive question posed, having regard to those two provisions both having been enacted by the Tax Laws Amendment (Retirement Villages) Act 2004 (Cth), was not the subject of submission by either party.

118. Notwithstanding that circumstance, no requirement to hear further argument arises. That is because, accepting for these purposes that the Commissioner is correct in that regard, the point advanced is neutral in the present instance. That is because there is no analogous provision to s 38-25(4A) as would be similarly textually significant in the construction of s 38-250(1)(b)(i) of the GST Act as opposed to s 38-260.

119. I am satisfied that that there is otherwise nothing in the note that requires further exposition or revision of these reasons.

Disposition

120. MAP has discharged its burden of satisfying the Court that, in the facts identified and relied on for the purpose of the Private Ruling, that ruling is incorrect as a matter of law. The objection decision of the Commissioner dated 15 July 2019 must be set aside to the extent of its answer to Question 1. That answer is to be substituted for in the terms proposed by the Applicant. I will make orders accordingly.

121. Because the Commissioner funded this proceeding, there need be no order as to costs.

122. Finally, the Court would be remiss if it failed to express its gratitude to counsel for both parties for their very considerable assistance in these proceedings.

THE COURT ORDERS THAT:

1. The objection decision of the Respondent dated 15 July 2019 be set aside.

2. The Respondent rule on Question 1 stated in the Notice of Private Ruling dated 8 November 2018 by substituting the following answer:

Yes, the sale of the Apartments by the Applicant is a "supply of accommodation" for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act.