Bannerblade Pty Ltd v Commissioner of Taxation

[2008] AATA 259

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(Decision by: Handley SM)

Bannerblade Pty Ltd
vCommissioner of Taxation

Tribunal:

Member:
Handley SM

Subject References:
Diesel Fuel Rebate
application for an off road credit (an 'energy grant') for diesel fuel used in earthworks at retirement villages
entitlement to an energy grant dependent on whether the facilities were a home for aged persons
finding that the facilities were residential premises
decision affirmed

Legislative References:
Acts Interpretation Act 1901 (Cth) - 15AA; 15AB
Aged Care Act 1997 (Cth) - The Act
Aged or Disabled Persons Care Act 1954 (Cth) - 2; 3(1)
Energy Grants (Credits) Scheme Act 2003 (Cth) - 4; 53(4)(c); 53(4)(d)
The Retirement Villages Act 1999 of Queensland - 3; 5; 7
The Retirements Village Act 1999 of New South Wales - 5
Social Security Act 1991(Cth) - The Act

Hearing date: 29 January 2008
Decision date: 2 April 2008

Melbourne

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Decision by:
Handley SM

REASONS FOR DECISION

1. The Energy Grants (Credits) Scheme Act 2003 (the Act) entitles persons to a off-road credit (an 'energy grant') if diesel fuel is purchased or imported for a qualifying use.

2. The applicant has applied to review a decision made by an officer of the Australian Taxation Office who declined a claim made for an energy grant under the Act for diesel fuel used off-road in earthworks at the Albany Creek Retirement Village and the EdenLea Retirement Village in Queensland.

3. The applicant's representative contended that the applicant was engaged in a qualifying use of diesel fuel off-road at the above premises because those premises were each a home for aged persons pursuant to s 53 (4) (d) of the Act.

4. The respondent decision-maker, and its representative at the hearing, submitted that the premises were each a retirement village and accordingly the decision under review should be affirmed. Put another way, use of diesel fuel off-road at retirement villages does not constitute a qualifying use under the Act. Section 53 (4) of the Act is reproduced as follows:

(4) Each of the following is a use that qualifies:

(a)

use at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that:

(i)

has, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality; and

(ii)

does not have, at those premises, ready access to a commercial supply of electricity;

(b)

use at residential premises to generate electricity for use in:

(i)

providing food and drink for; or

(ii)

providing lighting, heating, air-conditioning, hot water or similar amenities for; or

(iii)

meeting other domestic requirements of;

residents of the premises;

(c)

use at a hospital or nursing home or at any other institution providing medical or nursing care;

(d)

use at a home for aged persons.

5. The applicant did not call any evidence and largely relied on a Statement of Facts and Contentions lodged with the Tribunal. The respondent had previously lodged a Statement of Facts and Contentions and also lodged an extensive outline of its submissions on the day of hearing.

6. Each of the two premises namely, EdenLea and Albany Creek have published promotional brochures which were lodged with the Tribunal prior to the commencement of the hearing. Each brochure refers to the opportunity to purchase a stand alone dwelling at each location.

7. The dwellings at the EdenLea facility which are each for sale at $375,000 comprised three bedrooms, laundry, kitchen, dining, living, ensuite, bathroom and lockup garage. The brochure refers to the Queensland Registrar of Retirement Villages issuing a title to each property purchased. Relevant extracts from the EdenLea brochure are reproduced as follows:

EdenLea - made for those who appreciate quality:

In keeping with its excellent location, EdenLea is comprised of residences of a distinctly superior standard in terms of setting, quality, features and finish.

In addition to the impressive and easily-accessible Community Centre, EdenLea Residents enjoy the luxury, perhaps unique amongst contemporary retirement development, of exceptional individual privacy, combined with a sense of space, good planning and visual amenity.

As an exclusive residential estate for those over 65 years of age, EdenLea on Buderim offers a relaxed, peaceful lifestyle.

8. The Albany Creek brochure refers to the purchase of one, two or three bedroom homes with prices ranging between $367,000 to $448,000. Additionally, serviced apartments are available for purchase at prices commencing at $179,000. The brochure does not refer to the issue of a title. Relevant extracts from the Albany Creek brochure are reproduced as follows:

Welcome to Aveo Albany Creek

Capturing the very essence of Pine Rivers, Aveo Albany Creek offers relaxed living and peace of mind for retirees. Set high on a hill with sweeping views and gentle breezes, this scenic village presents a distinctive atmosphere with almost 11 hectares of beautifully landscaped gardens and well established trees.

Independent Living Units

You'll find an abundance of choice in these architecturally-designed stylish units. Choose from one bedroom plus study, two or three bedroom options with quality finishes throughout such as granite bench tops and European appliances. Rooms are spacious, allowing you to bring your favourite furniture along to your new home. You'll appreciate the thoughtful details throughout such as the handrails that make living easier. Every unit also includes a garage and parking is available for when family and friends pop by for a visit.

Serviced Apartments

For those who prefer or need daily living support, a Serviced apartment is a reassuring option. Residents enjoy their privacy, while cleaning, linen laundering and maintenance is handled by professional, caring staff. One and two bedroom units offer secure, worry-free living. You can relax knowing there's always a helping hand nearby. There's no need to bother with cooking either. Delicious, nutritious meals prepared by our chef are served daily in the stylish dining room, while breakfast is provided in the resident's apartment.

SUBMISSIONS

9. In written submissions lodged prior to the commencement of the hearing, the applicant contended a home for aged persons under s 53 (4) (d) of the Act was not restricted to a home for aged persons facility which provided medical or nursing care. Whilst acknowledging that an institutional home for age persons may provide low level care and be staffed by nursing or medical personnel, it is more likely to be encompassed by ss (c) whereas, non-institutional and non-medical care for aged persons is envisaged by ss (d) being a retirement village.

10. In submissions at the hearing it was contended that persons who purchase homes in a retirement village as a principal residence are persons who have purchased a home for aged persons.

11. Additionally, it was submitted, that eligibility guidelines for the Diesel Fuel Rebate Scheme in 1999 distinguished premises used as a home for aged persons and premises used as a hospital or nursing home or any other institution providing medical or nursing care. It was submitted that the guidelines recorded that a home for aged persons takes on its ordinary common meaning and includes such premises as retirement homes, units and villages.

12. The respondent contended that the premises in issue in these proceedings should be found to be residential premises. It was noted that s 4 of the Act defined residential premises but specifically excluded premises used as a home for aged persons. In effect, the definition defined what a home for aged persons is not. Additionally, the entitlement to an off-road credit for diesel fuel is consequent upon a use at qualifying premises under ss (4). The use of diesel fuel for the purposes of this application was not at a home for aged persons.

13. By reference to the brochures published by each of EdenLea and Albany Creek it should be found as a fact that both institutions were residential type premises, they being premises where persons reside, sleep and eat and being premises which are regarded as either a house where a person resides or a home where the resident owners live independently and are not in need of care.

14. In the absence of evidence from the corporation which constructed and which promotes each of these facilities and in the absence also of evidence from those persons who live in the homes or houses within these facilities, it should be found as a fact that the premises do not constitute a home for aged persons but rather amount to residential premises.

15. It was contended that by reference to explanatory memorandums published with respect to the Act, to s 15AA and s 15AB of the Acts Interpretation Act 1901 and the commonly understood meaning of the words house and home that each of the facilities could not be found as a fact to be a home for aged persons.

CONCLUSION AND REASONS FOR DECISIONS

16. For reasons which follow I am satisfied that the submissions made on behalf of the respondent are sound and the decision made by the respondent's delegate is to be preferred.

HOME

17. The expression a home for aged persons is not defined by the Act nor are the words home, aged or persons. For the purposes therefore of comprehending the meaning of those words comprising s 53 (4) (d), regard will be had in the analysis which follows to extraneous materials as permitted by s 15AB of the Acts Interpretation Act 1901.

18. Premises in which there is a substantial degree of occupation is a home (refer Herbert v Byrne (1964) 1 AE 882). Those premises, that is, the home, is likely to be a place where a person or persons ordinarily eat morning and night, where they sleep, where they receive friends and visitors and from where they depart for other purposes and eventually return and which has the characteristic of permanency (Todd v Nichol (1957) 1 SASR 72). A home has been defined as the place where the centre of gravity of one's domestic life is found (Geothermal Energy NZ Ltd v Commissioner of Inland Revenue (1979) 2 NZLR 324). A home is also likely to refer to the affinity or relationship between a person or persons and the premises and its usage (Inland Revenue Commissioner v Lysaght (1928) AE 575 and Koitaki Para Rubber Estates Ltd v Federal Commissioner of Taxation (1941) 64 CLR 241).

19. I think it can be found that persons who live in a home for aged persons or at a retirement village, each reside in a home. There is a similarity of occupation of each type of residence to permit this conclusion.

AGED

20. The word aged is not defined by the Act or by the Aged Care Act 1997. Pursuant to the permission given by s 15AB of the Acts Interpretation Act 1901, reference will be given to other materials outside the Act to assist in the meaning of this word.

21. The Aged or Disabled Persons Care Act 1954 defines an aged person as a person who has attained the age of 60 years. The purpose of that Act is found at s 3 (1) and is reproduced as follows:

3. (1) The purposes of this Act are to encourage and assist:

(a)

the provision of suitable homes for eligible persons, being homes at which eligible persons may reside in conditions approaching as nearly as practicable normal domestic life; and

(b)

the provision of accommodation at which care services may be provided for eligible persons; and

(c)

the provision of community aged care services to eligible persons.

22. An eligible person is defined at s 2 of that Act as an aged or disabled person who is assessed as requiring hostel care and or personal care services or other residential, hospital or nursing home type accommodation having regard to their qualification as being an aged person or an disabled person.

23. There is no consistent meaning of the word aged. As may be seen above, the Commonwealth legislation refers to an aged person as a person who has attained the age of 60 years whereas the definition of a residential care facility within the meaning of the New South Wales State Environment Planning Policy No 5 / Housing For Older People or People With A Disability refers to accommodation for older people being people aged 55 years or over.

24. In the decision of the New South Wales Land and Environment Court in Owners of SP39204 v Sutherland Shire Council (Sutherland Shire Council) (2003) NSWLEC 255 the Court considered a decision of the New South Wales Court of Appeal in Ku-ring-gai Municipal Council v Geoffrey Twibill and Associates and Another (Geoffrey Twibill) (1979) 39 LGRA 154. Samuels JA decided that a home for aged persons is a home where all the residents are aged persons. That analysis - for the present purposes - is probably unhelpful but significantly the Judges in Geoffrey Twibill decided that upon attaining the age of 55 years a person did not then become an aged person. Glass JA, at p159, by reference to life expectancy tables for the period 1970 to 1972, decided:

Guided by what they show, I would not feel any degree of satisfaction in describing as aged a group of persons having an unspecified upper age limit but of unknown average age and undefined sexual composition unless the lower limit was a minimum of sixty years of age. If it were, I would be so satisfied. It follows that although a retirement village for persons of minimum age fiftyfive would be a home within the meaning of the expression it would not in my view be a home for the aged.

25. Samuels JA in Sutherland Shire Council whilst deciding that a person of 55 years does not step into the category of the aged, he thought the word aged was difficult to define and does not depend upon individual physical or mental idiosyncrasy or frailty. It is a question of what society generally regards as the qualification for entry into the category. I would myself be inclined to take pensionable age as an adequate guide.

26. Mahoney JA decided that by application of dictionary meanings aged refers to persons who are old. He decided that aged is to be determined by context and a residential type development - where occupation is restricted to persons 55 years of age or more - was not, in 1971, or, at the time of the decision in 1979, limited to persons who are aged.

27. The Court in Sutherland Shire Council (decided in 2003) followed the Geoffrey Twibill decision and decided that a housing development for persons having attained the age of 55 years was not a home for aged persons and that logic applied - in 2003 - with as much if not greater force than when that case (Geoffrey Twibill) was decided in 1979. His Honour had regard to increases in life expectancy after 1972 and also noted that pensionable age has increased since 1972.

28. The Court in Sutherland Shire Council concluded in my opinion the proper interpretation of those development consents is that they each approved housing for aged persons in the sense that the residents of such housing must themselves be aged persons and the meaning of that term is relevantly a person who has attained the age of 60 years (conformably to the reasoning and result in Geoffrey Twibill).

29. Whilst I would agree that regard for the whole of life tables and the subjective and objective regard for individual physical or mental frailty is a guide to interpreting the word aged, some care should be exercised by having regard alone to pensionable age. For the purposes of entitlement to an age pension under the Social Security Act 1991, women, generally, qualify at age 60 but men qualify at age 65. No one would agree, surely, that women are aged at 60 years but men are aged only at 65 years. The references by the legislation and authorities above to the meaning of aged adopt either actual age as a criteria - and then ranging either between 55 and 65 years - or use the word old or older or retired. I think it would be preferable to have a number of factors assisting to interpret the word aged rather than define it. As the New South Wales decisions above refer, those factors would be a combination of actual age, societal regard, physical and intellectual capacity, whole of life tables and the age to qualify for pension and superannuation entitlements to name a few.

30. As may be seen from the above, persons who reside in a home for aged persons and in a retirement village may each be aged. But as will be discussed below, reference must be given to both the occupants and the physical structure inhabited to determine whether there is any compatibility of meaning. As stated earlier and for the reasons which follow, I am satisfied there is no such compatibility.

A HOME FOR AGED PERSONS

31. The above discussion concerning the words home and aged cannot be taken in isolation from the meaning to be given to the entire phrase appearing at s 53 (4) (d).

32. Care in regard to use of extraneous materials is I think amply found in the decision of the Northern Sydney and Central Coast Area Health Service and Another v Attorney-General For New South Wales and Another (2007) NSWSC 881 where the Court decided at [21] that a convalescent home was not a nursing home but rather a nursing home is commonly understood as a home for aged persons (in order to give meaning to the expression a home for aged person). That decision should not be followed in the present application because a hospital or a nursing home is specifically distinguished in s 53 (4) at (c) from ss (d) of the Act being the sub-paragraph concerned with use at a home for aged persons.

33. Whatever might be meant or understood by the phrase a home for aged persons, few would dispute that persons would reside in such a facility. But a home for aged persons is not residential premises as defined in s 4. In fact such a facility is excluded. In the absence of a more precise definition , residential premises at s 4 of the Act means premises used as a house or other premises at which at least one person resides. In my view a house is the physical structure intended for occupation as residential premises. When occupied, by one or more persons and when those persons furnish, eat, sleep and interact at those premises, it becomes a home. Section 4 of the Act is not helpful because it does not refer to a home but rather a house.

34. It is by regard especially to the promotional pamphlets produced by EdenLea and Albany Creek and by reference to the Act and other extraneous materials referred to above that I am satisfied that the premises in issue constitute a retirement village and neither constitute a home for aged persons.

35. A retirement village is not defined by the Act but its meaning may be gleaned by reference to New South Wales and Queensland legislation.

36 . The Retirements Village Act 1999 of New South Wales at s 5 defines a retirement village as a complex containing residential premises that are predominantly or exclusively occupied by retired persons. A retirement village does not include a building used for residential care or respite care, a nursing home, a boarding house or lodging house or residential premises that are the subject of a residential tenancy agreement. Also excluded from the definition are residential parks which by definition refer to caravan parks or a manufactured home estate on which manufactured homes have been placed. A resident of a retirement village is defined as a retired person who has a residence right in respect of residential premises in the village. A retired person is not defined. A residence right is defined as a person who has a right to occupy residential premises . Residential premises is defined as any premises used or intended to be used as a place of residence.

37 . The Retirement Villages Act 1999 of Queensland has the object (s 3) of promotion of consumer protection and fair trading practices in the operation of retirement villages by declaring rights and obligations of residence and scheme operators and facilitating disclosure of information to prospective residents. It is concerned also with encouraging growth and viability of the retirement village industry. A retirement village is defined at s 5 as premises where older members of the community or retired persons reside or are to reside in independent living units or serviced units under a retirement village scheme. A retirement village scheme is defined at s 7 as a scheme where a person enters into a residence contract and in consideration of paying a contribution under a residence contract a person has a right to reside in a retirement village.

38. The EdenLea facility is described in its promotional brochures as an exclusive residential estate for those over 65 years of age. It offers unencumbered property title registered with the Queensland Registrar of Retirement Villages.

39. The Albany Creek facility is described in its promotional material as offering peace of mind for retirees (there is no reference to age). The brochure describes the facility as a scenic village and complete community. The facility has been constructed by the business AVEO being a subsidiary of F K P Limited and is described as Australia's leading provider of retirement communities and having more than 15 years experience and over 50 villages Australia wide . . .

40. Each promotional brochure clearly promotes a lifestyle for persons who intend to purchase the residential premises in each of the facilities. In addition to purchasing residential premises, residents have access to community facilities, swimming pools, gardens, transport, a library, hairdressing facilities, a medical centre and - in the case of Albany Creek - a restaurant, bowling green, tennis court and gymnasium. Each promotional brochure recommends that persons should seek independent advice from a lawyer, financial adviser or an accountant before entering into any agreement with either facility.

41. I am not satisfied that the two facilities could be found to be a home for aged persons. I acknowledge the applicant contends that a retirement village can be a home for aged persons but I do not think this submission is sound. A home for aged persons refers to the premises and the occupants. The premises - a home - is described in the singular. It is clear from the promotional material that each facility is a village or community in type containing a cluster or collection of individual detached residential domestic dwellings where persons live independently of each other and are entitled to do so by purchase of a title and by entering into a contract with respect to use of certain amenities. Additionally it is likely that residents of a retirement village are subject to the decisions of a Body Corporate and are liable to ongoing maintenance type fees. Charges and regulations of this type are not imposed on persons who reside in a home for aged persons. Each facility promotes a lifestyle and is pitched at retired older persons but not necessarily (especially in the case of Albany Creek where a minimum age is not specified) in my view persons who may be regarded as aged. Persons who acquire a proprietary interest in the retirement villages - which I am satisfied EdenLea and Albany Creek are - do so by choice. The Albany Creek facility, offers the opportunity to purchase a serviced apartment with staff to assist in cleaning, laundry and maintenance and provision of meals. Such premises, within Albany Creek do not amount to a home for aged persons because it is not, singularly a home. But of significance, the Albany Creek promotional brochure records that Adjacent to Aveo Albany Creek is Albany Gardens Nursing Home, an independently owned and operated residential aged care facility. This type of facility describes premises as a combination of premises referred to at s 53 (4) (c ) and (d) (there is no reference to age in ss (c)). But these premises - the nursing home - sufficiently distinguish the difference between the premises at Albany Creek and a home for aged persons. Albany Creek and EdenLea comprise dwellings which are residential premises included in the definition at s 4.

42. There is nothing to indicate that persons who would enter into contracts to purchase in a retirement village are in poor health or are in need of care that might be expected or available in a home for aged persons. It is unfortunate that that phrase is not defined and whilst again acknowledging that the word care does not appear at ss (d) of the Act, such a facility in my view and by adopting a common or ordinary meaning is referrable to a facility where there is multiple occupation, usually within individual units or rooms providing some degree of privacy but where the facility is specifically constructed with regard to the needs of those persons who are of mature age and who need to reside in such a facility, (as opposed to residing independently in a residential home, privately owned and acquired by choice in a village or cluster type environment). The particular construction type would ensure the provision of handrails, adequate bathroom and toilet access (either ensuite or communal) and ramps and would probably provide meals to the residents. It would also probably be staffed by nursing or like personnel to provide care if needed. The residents would not have title over the premises and their occupation would be subject to compliance by the proprietor with the Aged Care Act 1977. None of those characteristics or features exist at either EdenLea or Albany Creek and that is because in my view, those facilities are in a nature of a retirement village and not a home for aged persons.

43. The EdenLea and Albany Creek facilities are in the nature of residential premises. Neither constitutes a home for aged persons which is excluded by the definition. The decision under review must be affirmed.

SUPPLEMENTARY MATTER

44. The applicant submitted that it was disadvantaged or misled by a decision of the respondent to retrospectively apply the provisions of Australian Taxation Office Interpretive Decision 2006 / 256. This submission with respect is without merit for the following reasons.

•

The claim for rebate was made on 12 April 2005. At that date an Interpretive Decision had not been issued.

•

On 16 September 2005 Interpretive Decision 2005 /269 was issued but was later withdrawn and replaced by Interpretive Decision 2006 / 256. Both Interpretive Decisions concerned the Energy Grants (Credits) Scheme and the entitlement if any to a rebate with respect to use of diesel fuel at a home for aged persons - retirement village.

•

The first Interpretive Decision advised that a retirement village, for people over 55, designed for independent living where medical or nursing care is not provided, is a home for aged persons. Those circumstances were withdrawn by the subsequent Interpretive Decision which then recorded that premises approved under the Aged Care Act 1997 providing residential aged care services will be regarded as having satisfied the meaning of a home for aged persons.

•

An Interpretive Decision is in the nature of advice or assistance to persons who may have an interest in a claim upon the respondent. It is not a substitute for the legislation nor for any decision of a Court or Tribunal. If a Court or a Tribunal makes a finding contrary to an Interpretative Decision, a taxpayer will be liable for unpaid tax and to repay any grant or benefit.

•

At the date of the claim, and at all times subsequently, (for the reasons given above) the applicant did not ever have an entitlement to a rebate with respect to the diesel fuel used at the retirement villages of EdenLea and Albany Creek. As decided above I have concluded that those premises were not a home for aged persons. The advice contained in the first Interpretative Decision, with respect, was erroneous. The application for an energy grant was made before the first Interpretative Decision was issued. The applicant could not, then have been disadvantaged or misled.

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The applicant therefore has not been disadvantaged by the former Interpretive Decision and or its revocation by the subsequent Interpretive Decision.

I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of:

Mr John Handley, Senior Member

Signed: Grace Carney, Personal Assistant

Representative of the Applicant Mr Anthony Tong
Counsel for the Respondent Mr P Ginnane
Solicitor for the Respondent Ms J Proimos, Australian Taxation Office