Penrith Rugby League Club Ltd. v. Commissioner of Land Tax (N.S.W.).Judges:
David Hunt J
Supreme Court of New South Wales
David Hunt J.
This appeal pursuant to the Land Tax Management Act 1956 sec. 35, is taken against an assessment made by the Commissioner of Land Tax for the tax year 1981 in relation to land owned by the Penrith Rugby League Club Limited (``the Club'') as at 31 December 1980.
The Club is licensed in accordance with the provisions of the Liquor Act 1912 and it conducts a large social and sporting club at Penrith. At the relevant date, it had some 25,000 members and was described in argument as the major social organization in the Penrith district.
The Club building is located upon a block of land owned by the Club and bounded upon all four sides by public roads: Station St. to the West. Reserve St. to the North, Woodriff St. to the East and League St. to the South. The main entrance to the Club building is in League St., which street is used almost exclusively by Club-generated traffic. It has a tarred and sealed surface. On the opposite side of League St., and to its south, there is an extensive area also owned by the Club which is used for car-parking. The parking area is itself divided by Frederick St., an unformed road which runs north and south and perpendicular to League St. Although it was dedicated as a road, this strip of land had never in fact been used as such. On the east side of Frederick St. there is an area which is fenced and mainly sealed with a bitumen surface. This is regarded as the ``official'' car park. On the west side of Frederick St. there are three areas, of which in 1980/8 1 one still had buildings on it and the other two, although unsealed, unlevelled and mainly unfenced, were also used as car parks. The more southern of those two areas is that which is in issue in this appeal by the Club against the assessment of land tax. The Club's objection against a similar assessment in relation to the more northern area has yet to be considered by the Commissioner; and the Commissioner has allowed the Club an exemption in relation to the ``official'' car park pursuant to the Land Tax Management Act, sec. 10(1)(g)(iii). The exemption which the Club claims in relation to the land which forms the car park in issue in this appeal is given by the same statutory provision.
Section 10(1)(g)(iii) exempts from land tax:
``... land owned by... any person... and used or occupied by that person... solely as a site for... a building owned and solely occupied by a... club... not carried on for pecuniary profit.''
A ``person'' includes a company: sec. 3(1). It is common ground that the Club is a company and is ``not carried on for pecuniary profit'', in the sense that the Club is not carried on for the pecuniary profit of its members:
Theosophical Foundation Pty. Ltd. v. Commr. of Land Tax (1966) 67 S.R. 70 at pp. 84-85. The land upon which the Club building is built and that which is used for car parking is, as I have stated, owned by the Club. It is not disputed that the Club building is solely occupied by the Club. There is a dispute between the parties as to whether the land which is used for car parking and which is in issue in this appeal is used and occupied by the Club solely as a site for the Club building. In particular, the Commissioner disputes that any land not contiguous with that upon which the building stands can ever form part of the ``site'' for that building. (His allowance of an exemption for the ``official'' car park, which is also separated from the Club building by League St., is said to have been made in error.)
Before going to the cases, it is necessary to relate some recent history in relation to the provision of these car parks. In 1977, the Club applied to the Penrith City Council for the approval of major extensions to the existing Club building. A report by the
ATC 4711Deputy Town Planner to the Council noted that the proposed development would produce a deficiency of 850 car parking spaces. In 1978, the Club gave to the Council an undertaking that additional car parking spaces would be provided. The particular land in question was purchased by the Club in 1979 for use as such a car park, providing some 160 additional parking spaces in partial satisfaction of that undertaking. The land had previously been used as a commercial car park. Meanwhile, the Club had begun to investigate building completely new Club premises upon land situated some distance away. In 1980, a development application was submitted for some temporary additions to the existing premises. These temporary additions were approved by the Council upon the basis that the Club was using, inter alia, the area in issue in this appeal as a car park, and the additions were completed. On 31 December 1980, which is the relevant date in this appeal (sec. 8), the Club was unsure as to whether it would be carrying out the major extensions proposed in 1977 or whether it would be building completely new Club premises. Ultimately, it determined upon the latter course; no development application was ever submitted in relation to the major extensions initially proposed. In the meantime, however, the particular land in question has in fact been used by the Club as a car park. It receives very extensive use on Friday, Saturday and Sunday evenings, when the various car parks are filled to capacity, and also use on those nights when functions take place in the Club's building. On 31 December 1980 it was packed.
The particular land in question has also been used as a car park in other circumstances upon which the Commissioner relies as destroying the factual basis for the Club's assertion that this land has been used and occupied solely by the Club. Access to this particular car park may be obtained from both League St. to the north and Station St. to the west. On the opposite side of Station St., and to its west, are located the Penrith Showground and Penrith Park. The Penrith Paceway conducts race meetings at the Showground on approximately 30 evenings throughout the year. The Paceway is not associated with the Club or with the Club premises. The Penrith District Rugby League Football Club plays ``home'' games at Penrith Park on approximately 11 afternoons throughout the football season. Upon these occasions, the Club has permitted this particular car park to be used by patrons of both events, notwithstanding that they may not be members of the Club. The control of the car park for this purpose is given to the Penrith District Schools Rugby League Committee to enable that Committee thereby to raise funds. This is done by the Club pursuant to its objects of promoting and propagating the game of Rugby League football within its district and of rendering financial aid to the Schools Committee as one of the associations conducting football within that district. The use of the car park for fundraising by the Committee was adopted by the Club instead of giving direct financial aid, although clearly the result is the same. This use of the car park is, in my view, directly related to or incidental to or conducive to the purpose of the objects of the Club. It is the same as if a raffle for the Schools Committee were conducted by that Committee inside the Club's premises. If this were done, no-one could reasonably suggest that as a result the Club no longer solely occupied those premises.
It is also conceded by the Club that this car park is probably used by patrons of other events at the Showground who are not members of the Club, but there are not very many functions at the Showground and it is obvious, in my view, that it would be impossible as a practical matter to prevent some such incidental use of the car parks by non-members. I therefore propose to proceed upon the basis that the land which is used for car parking and which is in issue in this appeal is used and occupied solely by the Club. The only issue which remains is whether this land is so used and occupied ``solely as a site for'' the Club building.
Two matters should, however, be stated at this stage if only for the purpose of putting them to one side. At the relevant time (31 December 1980), the land in question had not been levelled or surfaced in any way by the Club. It is therefore unnecessary for me in this appeal to decide whether such work if done upon the car park would have constituted it a ``building'' within the meaning of sec. 10(1)(g)(iii): cf.
Gosford R.S.L. Club Co-operative Ltd. v. Commr. of Land Tax (N.S.W.) 81 ATC 4203 at pp. 4205-4206,
ATC 4712in which the Commissioner had allowed an exemption in relation to a swimming pool which had been used almost entirely in a business which he had argued was unassociated with the Club building; and cf. also
St. George Leagues Club Ltd. v. Commr. of Land Tax (N.S.W.) (Lee J. 83 ATC 4736) in which a swimming pool was apparently assumed to constitute a building for that purpose.
The second matter relates to the word ``for'' in the phrase ``solely as a site for... a building''. Upon its face, it would appear that the exemption relates only to a piece of land intended for building purposes rather than to land upon which a building has been built. But this is not the accepted construction of the exemption, which relates to land of both descriptions:
Commr. of Land Tax (N.S.W.) v. Joyce & Ors. (1973-1974) 132 C.L.R. 22 at p. 29.
Is then this car park land used and occupied by the Club solely as a site for the Club building? It is accepted that the site for or of a building is not limited to the land upon which the walls of the building stand:
Royal Sydney Golf Club v. F.C. of T. (1942) 6 A.T.D. 235 at p. 242;
Joyce & Ors. v. Commr. of Land Tax (N.S.W.) (1973) 1 N.S.W.L.R. 402 at p. 411. What additional land is included within the site depends upon the use to which that additional land is put:
Commr. of Land Tax (N.S.W.) v. Christie (1973) 2 N.S.W.L.R. 526 at p. 542. The exemption given by sec. 10(1)(g)(iii) is not restricted to that additional land which is reasonably necessary to the use of the building which attracts the exemption: Christie's case (supra) at pp. 535-536; nor is it restricted to the immediate curtilage of that building: Commr. of Land Tax (N.S.W.) v. Joyce & Ors. (supra) at p. 35. It extends to land which surrounds the building and which is used for purposes ancillary to those of the building itself: Joyce & Ors. v. Commr. of Land Tax (N.S.W.) (supra) at p. 411; Commr. of Land Tax (N.S.W.) v. Joyce & Ors. (supra) at p. 35. As it was also put in the judgment of Hardie J.A., in Joyce's case in the Court of Appeal (at p. 411), structures and facilities provided in the area surrounding the building and used for purposes which contribute to the more effective use of that building, if held in the same ownership, are to be treated as part of the land forming the site of that building.
In Joyce's case, it was held that vacant land used as a car park for those attending services in a building which served as a Gospel Hall was part of the site of that building. In the present case, it is obvious that the car park in question is used by the Club for purposes ancillary to those of the Club building, or for purposes which contribute to the more effective use of that building, and it is held in the same ownership. Indeed, and notwithstanding that there is no longer any requirement to do so (Christie's case, supra, at pp. 535-536), I am prepared to find that the car park in question is and was at the relevant time reasonably necessary for the use of the Club building, by reason as much of the requirements of the local Council as the expectations of its members. The car park is also land which ``subserves'' the purpose of the Club building:
Royal Sydney Golf Club v. F.C. of T. (1955) 10 A.T.D. 453 at p. 459; (1954-1955) 91 C.L.R. 610 at p. 626.
In the face of this overwhelming authority, it was ultimately conceded by the Commissioner that, had the car park in question been on the same side of the street as the Club building and immediately adjoining that building, the Club would have been entitled to the exemption which it sought. But unless the additional land in question is, in effect, contiguous with the land upon which the walls of the building stand, the Commissioner says, such additional land cannot be treated as part of the land forming the site of that building.
The Commissioner's argument is that the concept of a ``site'' cannot include land which is physically separated from the land upon which the walls of the building stand. He points to the way in which the Courts have progressed in their interpretation of ``site'' from that land upon which the walls of the building stand, to the curtilage of that building, to land which surrounds the building and which is used for purposes ancillary to those of the building itself. In each case, he says, the Courts have permitted the concept to spread a little further; but in none has a Court allowed an exemption where the additional land has been physically separated from the land upon which the walls
ATC 4713of the building stand. All the cases, he says, are consistent with both areas of land being contiguous, even the unsuccessful claims for exemption: the two racecourses in
Stephen v. Commr. of Land Tax (Cth.) (1930) 45 C.L.R. 122; the golf course in the various Royal Sydney Golf Club cases; the parking area for and the access to the Gospel Hall in Joyce's case; the contiguous domestic dwellinghouse lots in Christie's case, and so on. I am prepared to assume that no-one has ever sought previously to argue that additional land divided by a roadway from that upon which the walls of the building stand should be treated as part of the land forming the site of that building. But, as Lord Denning once remarked, if we never do anything which has not been done before, we shall never get anywhere; the law will stand still whilst the rest of the world goes on, and that will be bad for both:
Packer v. Packer (1954) P. 15 at p. 22.
The Commissioner says that there are statements made in the cases which support his stand. Of course, if no-one has ever previously sought to argue this point, those statements cannot amount to more than obiter dicta.
Cremations (Newcastle) Pty. Ltd. v. Commr. of Land Tax (N.S.W.) (1965) N.S.W.R. 749, the taxpayer had purchased land adjoining its own land for the purpose of developing it into a means of egress for vehicles. Between the new land and that upon which the walls of the crematorium stood there was a large area of land which, although owned by the taxpayer, was not used by it for the purposes of the crematorium itself. The original holding was 27 acres, of which only 8 acres was regarded as properly exempt (including, incidentally, a car park for persons attending the taxpayer's business). The additional land which had been purchased was only some 50 perches in size and a long distance away from this 8 acres where the crematorium business was carried on. The use to which this additional land was actually put (as opposed to the use for which it had been purchased) was for obtaining soil for use in the gardens near the Chapel, to burn discarded wreaths and to bury ashes from the furnace. In rejecting the exemption claimed, Maguire J. said (at p. 751):
``To be exempt, my opinion is that the land must be contiguous to the buildings which are essential or conventionally used for the operation of a crematorium and must be used or occupied in a way directly associated with the primary function of a crematorium. I do not think that land which is more or less remote from the building where human remains are incinerated and which is used occasionally and more or less haphazardly for purposes ancillary to the crematory (sic) itself can properly be regarded as being used or occupied `solely as a site for a crematorium'.''
In that case, of course, the additional land was separated from the land upon which the walls of the crematorium stood by a large tract of land which was also owned by the taxpayer. There was a separation not only as a physical fact but also in the purpose for which the land was used. There could not have been, in the words of the next case to which I refer, any ``unity in the land, both in its topography and its use and occupation'' in determining whether it qualified as a site.
Those words were used by Bowen J.A. (as he then was), in Christie's case (supra) at p. 538 (see also pp. 533 and 536). They must, however, be considered against the background of the facts which were before the Court. Two of the three cases being considered in that matter concerned blocks of land for private dwellinghouses which had been subdivided into lots, and in one case the land was comprised in two separate certificates of title. It had been upon the basis of those facts that the Commissioner had argued that, where the land was either subdivided or subdivisible, the site for a private dwellinghouse was restricted to one such subdivisible lot. The various statements made by Bowen J.A. to which I have referred were clearly directed to saying that what must be looked at is not the conveyancing details of the land but rather its actual use and occupation. Those statements were intended to extend the concept of ``site'', not to reduce it.
In Gosford R.S.L. Club Co-operative Ltd. v. Commr. of Land Tax (N.S.W.) supra, the taxpayer had purchased a block of land upon which a motel was being conducted. It continued to conduct the motel, but added to
ATC 4714it in order to operate also as a club on the land. The Commissioner treated as exempt under sec. 10(1)(g)(iii) only the area of the Club building and certain associated facilities (again including, incidentally, a large car park for Club members and visitors). On appeal, Lee J. held that the motel business was ultra vires the rules of the Club, and adjourned the appeal to enable the parties to determine the area of land attaching to the taxpayer's club activities, as opposed to its motel activities. In reciting the Commissioner's concession that the exemption given by sec. 10(1)(g)(iii) could apply to part only of the taxpayer's land, his Honour said (at p. 4208):
``The case, I should point out, has proceeded upon the footing that an exemption under sec. 10 can attach to land which is part only of one entire area of land: Royal Sydney Golf Club v. F.C. of T. (1942) 6 A.T.D. 235 at p. 240; Commr. of Land Tax (N.S.W.) v. Joyce & Ors. (1973-1974) 132 C.L.R. 22; and the assessments made by the Commissioner in this case were made upon that footing.''
In the Court of Appeal (reported at 82 ATC 4505), the taxpayer's appeal was allowed, it being held (at p. 4509) that the motel business was ``fairly incidental or conducive to the purpose'' of the objects of the Club and (at the same page) that the site of all its buildings fell within the exemption. The whole of the property was regarded (at p. 4510) as being within the site for the purposes of the exemption. There was no discussion in either judgment of the question which I have to resolve, and the use by Lee J. of the words ``one entire area of land'' was not directed to the resolution of that question. Rather, they were used simply in order to underline that part of the land could be exempted as opposed to the whole of that land. That is the issue discussed in the two cases which are cited in his Honour's judgment.
I see no problem in applying the concept of a ``site'' to an area which, although physically divided by a road, is nevertheless used as a whole. The site of Martin Place does not suffer as a concept by reason of the fact that Martin Place consists of five City blocks and is intersected by four streets. The site of the Sydney Technical College in Ultimo consists of three City blocks intersected by two streets. The site of the main Grace Bros. store at Broadway is similarly divided by a street. The site of Centennial Park is literally criss-crossed by roadways. In the present case, League St., which divides the Club building from the various areas used as car parks, is on the evidence and in reality no more than a driveway for Club patrons. There is, in my view and notwithstanding the presence of League St., a clear unity in the land used and occupied by the Club in the present case. I see nothing wrong in such an area of land being exempted from land tax as the site for the Club building. The intention of sec. 10(1)(g)(iii) is clearly enough not to raise revenue; rather it is to relieve certain community groups from the burden of land tax upon the land used and occupied by them. Such an exemption should not be construed narrowly:
F.C. of T. v. Top of the Cross Pty. Ltd. & Anor. 81 ATC 4563 at p. 4571. it is only by the narrowest and the most pedantic of constructions that the car park in question in this appeal can be excluded from that exemption. Whether additional land which is separated from the land upon which the walls of the building stand by more than a roadway such as League St. would qualify as part of the site of that building I leave open to some future case. The particular unity in the land in the present case, taken together with the use to which the car park in question is put (ancillary as it is to the use of the Club building), is sufficient in my view to enable the land which is used as such a car park to be treated as part of the land forming the site of that building, and thus sufficient to entitle the Club to the exemption given by sec. 10(1)(g)(iii) in relation to that car park.
Pursuant to sec. 37(4), I vary the assessment of land tax made by the Commissioner by reducing it to accord with the exemption to which I have referred. I direct the parties to bring in Short Minutes giving effect to this judgment. I order the Commissioner to pay the plaintiff's costs. I direct the entry of judgment accordingly.