---

SUPREME COURT OF NEW SOUTH WALES

VOSS & SECURUS PTY. LTD. v. COMMISSIONER OF LAND TAX

Sheppard, J.

13 April 1973 - Sydney

---

Sheppard, J    : This is an appeal pursuant to s 35(5) of the Land Tax Management Act 1956-71 against an assessment of land tax made by the Commissioner of Land Tax in respect of land at 52 Mambala Road, Bellevue Hill. Mr DM Voss and Securus Pty Limited, the two appellants, are the owners of the land as tenants in common, Mr Voss as to an undivided one-tenth share and Securus Pty Limited as to the remaining nine undivided one-tenth shares. They became the registered proprietors of the land by virtue of a memorandum of transfer dated 24 September 1971 registered on 11 October 1971.

   The assessment against which the appeal is brought states that the taxable unimproved capital value of the land is $23,500. The assessment is made against the appellants jointly, and is made upon the basis that they were the owners of the land at midnight on 31 October 1971(see s 8 of the Act).

   The grounds upon which the appellants contend that the assessment is erroneous derive from the provisions of s 9(3)(c) of the Act, which is in the following terms:-

   

"There, as at midnight on the thirty-first day of October, one thousand nine hundred and seventy-one or any succeeding year, land owned by a person is used and occupied by that person solely as the site of a single dwelling house as defined in subsection nine of

 

section 160C of the Local Government Act, 1919, or is held in trust by that person for another person and is used and occupied by that other person solely as such a site, the deduction shall be-

 

(i) where the unimproved value of the land does not exceed thirty-three thousand dollars, an amount equal to such unimproved value;

 

(ii) where the unimproved value of the land exceeds thirty-three thousand dollars but is less than forty-four thousand dollars, an amount equal to thirty-three thousand dollars less three dollars for every one dollar by which such unimproved value exceeds thirty-three thousand dollars.

 

This paragraph does not apply to land owned by a person who owns other land or, notwithstanding the provisions of section twenty-seven of this Act, to land owned by more than one person where any one of such persons owns other land or to land owned by a company, not being a trustee company acting in its representative capacity."

   Erected upon the land in question is a dwelling house. No other building is erected upon the land except a double garage used as an adjunct to the house. The house is occupied by Mr and Mrs Voss and their children as their family home, and it is used only for this purpose. Securus Pty Limited is what is known as a family company. Its registered office is situated at 291 George Street, Sydney, which is the office of A. H. Dickens and Company, who are Mr Voss' accountants. The directors of the company are Mr and Mrs Voss and Mr Dickens. The issued shares in the company, except as to two A class shares, are held by Mrs Voss and the three infant children of Mr and Mrs Voss. Mr Voss and Mr Dickens each held one A class share, but these are held in trust for Mrs Voss. The company, in addition to owning a nine-tenth's share in the land, has small holdings in shares on the stock exchange. It does not carry on any other business or activity.

   The Commissioner did not, in making his assessment, accord to the appellants the deductions provided for in s 9(3)(c) because he decided that the company did not use and occupy the land solely as the site of a single dwelling house as defined in s 160C of the Local Government Act 1919 and that, in any event, the land was, within the meaning of the last paragraph of the subsection, land which was owned by a company.

   Section 190C of the Local Government Act 1919, subsection (9), defines "single dwelling house" as meaning a dwelling house or property adapted for use solely for habitation by no more than one family. It is not contested that the dwelling house in the present case falls within that definition and therefore within s 9(3)(e) of the Act. The initial question, however, is to determine whether the land owned by the appellants is used and occupied by them solely as the site of a single dwelling house. There is no doubt that Mr Voss uses and occupies the premises in this way, but the question is whether the company does so. The word "owned" as defined in s 3 of the Act has a meaning corresponding with that of "owner". "Owner", by definition includes, inter alia, every person who jointly or severally, whether at law or in equity, is entitled to the land for any estate of freehold in possession. The expression "owned by a person" accordingly is, by the application of the definition and the Interpretation Act 1897, appropriate in the instant case to refer to the two owners; that is to say, Mr Voss and the company.

   It follows that the company is clearly an owner of land upon which is erected a dwelling house, but does the company use and occupy the land as the site of a dwelling house? Dwelling houses are usually used and occupied by individuals rather than corporations, and even though "person" is defined in s 3 of the Act to include a company, if there were nothing more than the opening words of the subsection, I would be inclined as a matter of impression to think that "person" there used means an individual and does not include a company. This prima facie impression is displaced, however, when one comes to consider the concluding paragraph of the subsection, which specifically provides that the benefits arising under the subsection are not available where the land is owned by a company. It is a fundamental rule of statutory construction that effect is to be given to each and every part of an enactment if this is at all possible (Craies on Statutes, 6th Ed., pp. 104-5). It seems to me that the draftsman of the legislation contemplated that a company could in some circumstances be said to be a person using and occupying land as the site of a single dwelling house, and the problem must therefore be approached on the basis that, for the purposes of the subsection, "person" does include a company, and that a company is capable of using and occupying land as the site of a single dwelling house. It was argued on behalf of the Commissioner that this was not so and that the reference to land owned by a company in the last paragraph of the subsection was there for the sake of emphasis or, for more abundant caution, to ensure that a company did not derive any advantage from the provision. I reject this argument because it does not to my mind sufficiently take into account the principle of statutory construction to which I have referred. If, as the Commissioner submitted, it is correct to say that a company can never use and occupy land as the site of a single dwelling house, the words in the last paragraph are redundant and can never have any meaning or effect.

   Nevertheless the question arises as to whether the company in this case is in fact using and occupying the land as the site of a single dwelling house. In my opinion it is not. The persons occupying and using the land as the site of a single dwelling house are Mr and Mrs Voss and their children. Mr Voss does this in his capacity first of all as a tenant in common who, by reason of his estate in the land, has a right of use and occupation of the whole. This may be enough of itself to decide the matter in the Commissioner's favour, because there is no evidence of any agreement between the company and Mr and Mrs Voss under which they use and occupy the land on its behalf. The submission on behalf of the appellants was that, although the house was not used and occupied for any purpose of the company, it was in what was described in the argument as a "non-business situation", occupied by the company's directors and shareholders, with the exception of course of Mr Dickens. It was said that the company occupied the premises by these persons as its agents, using that term in a general or informal sense. The trouble with this argument is that neither shareholders nor directors, by reason only of their capacity as such, are agents of a company, and just because the house is occupied by the company's directors and shareholders it does not follow that the occupation of the directors and shareholders becomes that of the company, especially when it is necessary in order that the subsection may operate for the company itself to use and occupy the land solely as the site of a single dwelling house. I think that the fact is that Mr and Mrs Voss, and not the company, use and occupy the land solely as the site of a single dwelling house, probably with the implied permission of the company to do so. This means that the appeal must be dismissed.

   I should add that although I have reached the conclusion that the company in this case does not use and occupy the land as the site of a dwelling house, there could be cases where a company could be said to be so using and occupying land. These would usually arise in commercial situations where companies owned houses for the purpose of providing accommodation-permanent or otherwise-for members of their staffs or for guests. It is in these circumstances that the use and occupation would be that of the company in question, and this is no doubt why the draftsman found it necessary in the last paragraph to take away the advantage from companies who are outside those persons whom the benefits of the subsection are designed to advantage.

   Although it is unnecessary for me to do so, I propose also to deal with the second submission on which, assuming they had been successful on the first submission, it would have been necessary for the appellants to succeed in order for the appeal to be allowed. In short, the appellants say that the last paragraph of the subsection does not apply in this case because it only applies where a company is the owner of land to which the sub section applies to the exclusion of an individual. It is said that if the Legislature had not intended the subsection to be available in a case where land was owned jointly by a company and an individual, it would have said so in express terms. Reference was made to the provisions of the last paragraph of the subsection under consideration which deny the deduction therein provided for in the case of the ownership of land by more than one person where one joint owner owns other land. Reference was also made to s 11 of the Act.

   I have already referred to the definitions of the expressions "owned" and "owner" in s 3 of the Act. Prima facie the words "land owned by a company" extend to a case where a company is a tenant in common with another person. The question is whether this prima facie meaning is displaced by the considerations to which I have referred, that is, the use in the same subsection and in s 11 of expressions which expressly refer to joint owners. In my opinion the prima facie meaning to be given to the expression "land owned by a company" is not displaced. Although the two situations, that is other land owned by a joint owner and land owned by a company, are found in juxtaposition in the same paragraph, it would not have been possible for the Legislature to deprive joint owners, where one of them owned other land, of the benefit of the subsection without expressing itself in the way that it has. This is not the case when one comes to the situation of land owned by a company. The Legislature's intention can be gleaned from the words which are used with the aid of the definitions in s 3 and there is no need, if those definitions are referred to, for any additional words to be used. Similar considerations apply in relation to s 11 of the Act. I have therefore reached the conclusion that the final paragraph of the subsection in question deprives owners of land of the benefit of the subsection where one of them is a company.

   The remaining matter to be considered is the question of costs. The amount in issue in the present case is $154.60. It is true that this is a recurring amount, but that is the amount of the assessment against which the appellants have appealed. The only court or tribunal to which an appeal may be brought is the Supreme Court and it seems to me to be undesirable that a taxpayer contesting a comparatively small assessment such as that in the present case should be faced with payments of costs on the full Supreme Court scale in the event of his being unsuccessful, especially where the appeal is brought upon grounds which are not frivolous or captious. I think the appropriate thing for me to do, costs being in my discretion, is to assess them.

   I order that this appeal be dismissed and that the appellants pay to the Commissioner his costs of the appeal, which I assess at the sum of $50.