6 November 1974 -

Samuels J    The appellants W F Woodlock, R J Woodlock, M M Woodlock and Reedy Corner Pty Ltd carried on the business of graziers in partnership under the firm name of W F Woodlock & Co pursuant to a partnership agreement executed on 1 July 1961, which was in force at all material times. The partnership used for the purposes of its business land severally owned by W F Woodlock, R J Woodlock and M M Woodlock, and by M M Woodlock Pty Ltd which was not, of course, a partner. Reedy Corner Pty Ltd owned no land. There was no lease to the partnership of the land owned by M M Woodlock Pty Ltd, nor, up to the relevant time, had any rent been paid in respect of its use or occupation.

   By assessment No 30772, the Commissioner, under the provisions of the Land Tax Management Act 1956 as amended ("the Act"), assessed the partners to tax for the year 1970-71 in respect of the separate parcels of land owned respectively by W F Woodlock, R J Woodlock, M M Woodlock and M M Woodlock Pty Ltd. To that assessment the partners objected, and the matter now comes before me as their appeal under the provisions of s 35 of the Act.

   Before considering the arguments which have been advanced, I must notice certain provisions of the Act. Section 3defines "owner" to include "every person who, by virtue of this Act, is deemed to be the owner"; and "joint owners" similarly to include those deemed to be joint owners.

   Section 10(1)(p) exempts from taxation "land used for primary production, not being-

   (a) land owned by a company;...

   (d) land in respect of which a company is jointly assessed with any other person;"

   Section 27 provides for the assessment of "joint owners of land", and s 28 is in these terms:-


"Where separate parcels of land are owned by different persons, and such parcels are occupied, controlled, or used by a partnership whereof all such persons are members either by themselves or together with other persons, such persons shall, for the purposes of this Act, be deemed to be joint owners of such parcels, and to hold such parcels in such shares or proportions as the Commissioner may determine."

   Section 32(1) provides:-


"Where land is occupied, controlled, or used by a person who is not the owner and there is no lease or agreement for a lease for a definite term in respect of the occupancy, control, or user of the land, the person occupying, controlling, or using the land shall be deemed (though not to the exclusion of the liability of any other person) to be the owner of the land: ...


(2) The owner of the land shall be deemed to be the primary taxpayer and the person so occupying, controlling, or using such land to be the secondary taxpayer; and from the land tax payable by the latter there shall be deducted such amount (if any) as is necessary to prevent double taxation."

   The appellants concede that the land owned by M M Woodlock Pty Ltd is assessable by dint of s 32(1), the predicates of which are clearly satisfied. But they object to the assessment of the partners in respect of the partners' own land on the basis that these lands are used for primary production (as to which there is no dispute) and are therefore exempt by reason of the provisions of s 10(2)(p) .

   Mr Smart for the Commissioner seeks to uphold the assessment on the footing of the following argument. First, he goes to s 32(1) and submits that Reedy Corner as a member of the partnership is occupying or using the land owned by the other three partners, whom I may call "the Woodlocks". This proposition of fact is clearly established. Hence, Reedy Corner is deemed to be the owner of that land, that is, the owner of each of the three parcels. Then he points to s 28 and argues that by the force of its provisions, the Woodlocks and Reedy Corner are deemed to be joint owners of the Woodlocks' lands. Since, therefore, in respect of these parcels of land a company, that is, Reedy Corner, is jointly assessed with the Woodlocks themselves, s 10(2)(p)(d) applies and the exemption from tax is lost. So the Commissioner's argument depends upon the proposition that the Woodlocks come to be assessed jointly with Reedy Corner in respect of their lands, a consequence which depends upon the joint operation of ss 28and 32(1).

   Mr Beaumont, for the appellants, answers this argument by the assertion that the fictional ownership which s 32 contrives cannot be relied on as the foundation of the equally fictional joint ownership which emerges from the application of s 28. The ownerships, he says, upon which s 28 is predicated, is a true ownership which gives rise to a fictional joint ownership; but that fictional joint ownership cannot be made to depend upon some prior fiction. I think that this submission is sound.

   The Act contains a number of "deeming" provisions, for example, in ss 20, 21, 23, 26, 29, 30and 31, apart from s 32. In addition, there are "as if" provisions, for example, in ss 22, 24and 25 which have much the same effect, but which have been preferred, it seems to me, as a matter of draftsmanship as more appropriate to their immediate context or in order to avoid a tautology which might arise from the use of the "deeming" machinery coupled with certain definitions in s 3. As Lord Radcliffe pointed out in St Aubyn v Attorney-General [1952] AC 15 at 53, the word "deemed" is used a great deal in modern legislation. It has various purposes. In this Act, it is used on occasions to impose upon a state of facts a consequence which would not otherwise prevail or which might otherwise be indeed legally impossible. For example, in s 29(1) it is provided that any two or more companies which consist substantially of the same shareholders may be deemed to be a single company. Plainly, this is a result which could not ordinarily ensue; but the Commissioner has the power to invent it, as it were, in order to give effect to the intention of the Act.

   In other sections, the "deeming" provisions serve to make certain what might otherwise be doubtful, for example, in s 26 read with the definition of "owner" in s 3, or in other cases to impose an artificial character upon a true state of affairs which would otherwise be unable to sustain it. For example, in s 32(1) a person occupying land of which he is not the owner, even in the absence of a lease or agreement for a lease, would not ordinarily become the owner. In law (apart from the Act) he is not. Equally, I would have thought that a mortgagee in possession is not the owner of the land - s 23(1). Section 28 operates in the same way. If A and B severally own separate parcels of land which they work together in partnership, they are not in law (apart from the Act) the joint owners of the two parcels; but the Act imposes upon the true fact of their several ownership and joint occupation the artificial character of joint ownership. But before the Act delivers any of these fictions, their conception is generated by the existence of a true, as opposed to a fictitious, state of affairs.

   Accordingly, s 28, in my view, depends upon the satisfaction in fact, as opposed to fiction, of its opening predicate, that is, the ownership by different persons of separate parcels of land occupied by those persons (together, it may be, with others) as partners. But the Commissioner's argument depends upon the insertion into the predicates upon which s 28 depends of an introductory fiction. In the present case, Reedy Corner was not in law (apart from the Act) or in fact the owner of any of the three parcels of land upon which the partnership carried on its business. It only became the owner for the purposes of the Act by dint of the deeming provision in s 32(1). Hence, to produce the result for which the Commissioner contends, it is necessary, in order to attract s 28, to mount one deeming provision upon another so that the first fiction produces a second. Section 3 makes its definitions subject to context or subject matter and in my opinion, the context of s 28 requires or indicates that the word "owned" is not to be given the extended meaning which s 3 provides. Hence, I do not think that it includes a deemed owner.

   I may say that I do not think that Jamieson v Federal Commissioner of Land Tax (1938) 60 CLR 760 upon which Mr Beaumont relied, provides much assistance to his argument. The Land Tax Assessment Act 1910, as amended, of the Commonwealth (as it was then called) did not define "joint owners" to include those deemed to be such and it did not include any equivalent of s 28.

   For these reasons, I allow the appeal; I set aside the assessment and order the Commissioner to pay the appellants' costs.

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