Cornish Group Pty Ltd v Commissioner of Land Tax [2004] QLC 10 (2004) 25 QLCR 1

LAND COURT OF QUEENSLAND CITATION: Cornish Group Pty Ltd v Commissioner of Land Tax [2004] QLC 10 PARTIES: Cornish Group Pty Ltd (appellant) v. The Commissioner of Land Tax (respondent) FILE NO: A2003/0065 DIVISION: Land Court of Queensland PROCEEDING: An appeal against Assessment No. 9001271 of land tax on land owned by the appellant at midnight on 30 June 2002 DELIVERED ON: 27 February 2004 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Mr JJ Trickett, President ORDERS: 1. The appeal is allowed 2. Land Tax Assessment No. 9001271 was incorrectly made as it included Lots 1-24 and 26- 85 on SP 132846 which were not owned by the appellant as at midnight on 30 June 2002. 3. The assessment is remitted to the respondent to make what alterations are necessary to include the lands owned by the appellant as at midnight on 30 June 2002. CATCHWORDS: Land Tax - Liability to land tax - Owner of land at midnight on 30 June 2002 - Creation of lots - Plan registered when particulars recorded in freehold land register - Deemed to form part of freehold land register from time of lodgement of plan - Land Tax Act 1915; Land Title Act 1994. -- 1 of 8 -- 2 APPEARANCES: Mr C Coulsen for the appellant Mr FW Redmond for the respondent SOLICITORS: Bennett Carroll & Gibbons for the appellant Crown Solicitor, Crown Law for the respondent [1] This is an appeal by the Cornish Group Pty Ltd (the appellant) against Assessment No. 9001271 by the Commissioner of Land Tax (the respondent) of land tax on the unimproved value of land owned by the appellant at midnight on 30 June 2002. Background [2] The appellant was the registered owner of land described as Lot 900 on SP 127802 (title reference 50385479) and Lot 40 on RP 14808 (title reference 50385468). On 20 June 2002, the appellant lodged Survey Plan 132846 with the Department of Natural Resources and Mines land registry in respect of Lot 900 and Lot 40. That survey plan of Lots 1-24, 26-85, 901 and Easement A on Lot 45, contains the statement "Cancelling Lot 40 on RP 14808 and Lot 900 on SP 127802". [3] On 2 July 2002, the Department of Natural Resources and Mines issued registration confirmation statements that Lot 900 on SP 127802 and Lot 40 on RP 14808 had been cancelled and that Lots 1-24 and 26-85 had been registered in accordance with Survey Plan 132846. [4] On 15 November 2002, the Commissioner of Land Tax issued Assessment No. 9001271 which assessed land tax in respect of a number of parcels of land owned by the appellant as at midnight on 30 June 2002, including Lots 1-24 and 26-85 on SP 132846. The assessment indicates that the "subdivider's discount" was applied in relation to those lots on SP 132846. [5] The appellant challenged the assessment, contending that Lots 1-24 and 26-85 on SP 132846 did not exist as at the date at which land tax was assessed. The issue between the parties was whether the appellant was the owner of those lots as at midnight on 30 June 2002. The Land Tax Legislation [6] The Land Tax Act 1915 provides that land tax shall be levied and paid upon the relevant unimproved value of all lands within Queensland which are owned by taxpayers, and which are not exempt from taxation under the Act (s.8). Land tax is payable on the taxable value of the land owned by the owner and not exempt from taxation under the Act -- 2 of 8 -- 3 (s.11(1)). The Act makes provision for various exemptions from land tax, as well as deductions and other concessions in particular circumstances. [7] The taxable value of all land of an owner is the aggregate of the unimproved values of those parcels, less any deductions allowable (s.11(2)). Land tax is charged on land owned at midnight on 30 June immediately preceding the financial year in and for which the land tax is levied (s.12). [8] The definition of "owner" includes every person who is entitled to the land for an estate of freehold in possession, or to receive the rents and profits from the land, or who is taken to be the owner of the land (s.3B). [9] In this case, the respondent has applied the provisions of s.3CA of the Act in discounting the unimproved value of Lots 1-24 and 26-85 on SP 132846. That section provides that in certain specific circumstances, the unimproved value of a parcel of subdivided land is discounted by 40%. Of particular relevance to the present case, subs.(3) of s.3CA provides that: "For this section, land is taken to be subdivided when a plan of subdivision, providing for the division of the land into lots, is registered under the Land Title Act 1994." [10] The issue between the parties as to whether the lots on SP 132846 existed and therefore were taxable as at midnight on 30 June 2002, depends on various provisions of the Land Title Act 1994. The Land Title Act 1994 [11] The object of this Act is to consolidate and reform the law about the registration of freehold land and interests in freehold land (s.3). In the dictionary in Schedule 2 of the Act, "lot" is defined as a separate, distinct parcel of land created on either the registration of a plan of subdivision, or the recording of particulars of an instrument. The definition of "instrument" includes among other things, a map or plan of survey that may be lodged and "lodged" is defined to mean file in the land registry for registration. [12] A "plan of subdivision" is defined as a plan of survey providing for, among other things, a division of one or more lots (s.49). A lot defined in the plan is created as a lot when the plan is registered (s.49A). [13] The registrar must record in the freehold land register the particulars necessary to identify every lot brought under the Act and the name of the person who holds or who has held a registered interest (s.28). To "register" a lot, interest, instrument or other thing means to record the particulars of the thing in the freehold land register (Schedule 2). The Arguments -- 3 of 8 -- 4 [14] At the hearing of this appeal, Mr Coulsen, counsel for the appellant, made the following submissions. A lot defined in a subdivision plan is created only when the plan is registered, that is, the recording of particulars in the freehold land register. Indefeasible title for each lot is created on the recording of those particulars in that register (s.37). Without indefeasible title there is no ownership of lands within Queensland as required by s.8 of the Land Tax Act so as to allow taxation to be levied at the relevant date, in this case midnight on 30 June 2002. Furthermore, to be the "owner" there must be an entitlement to freehold in possession (s.3B(1) of the Land Tax Act) of land in existence at midnight on 30 June 2002. In the present case, the recording of the particulars creating indefeasible title or ownership for the purpose of the Land Tax Act occurred after the relevant date, as evidenced by the registration confirmation statements. [15] On the other hand, Mr Redmond, counsel for the respondent, argued that for the discounting provision s.3CA of the Land Tax Act, land is taken to be subdivided when the plan of subdivision providing for the division of land into lots is registered under the Land Title Act (s.3CA(3)). Section 49 of that Act provides that a plan of subdivision is a plan of survey providing for the division of one or more lots, while s.49A(2) provides that a lot defined in the plan is created when the plan is registered. Under Schedule 2, "lot" means a separate, distinct parcel of land created on the registration of a plan of subdivision, or the recording of particulars of an instrument; "instrument" includes a map or plan of survey that may be lodged. [16] Mr Redmond went on to argue that an instrument is registered when the particulars are recorded in the freehold land register (s.174). A registered instrument forms part of the freehold land register from when it was lodged (s.175). Therefore, Mr Redmond submitted, it follows that:  Lots 1-24 and 26-85 were created on the registration of SP 132846;  SP 132846 was registered when the particulars were recorded in the freehold land register;  SP 132846 forms part of the freehold land register from 20 June 2002;  Therefore, Lots 1-24 and 26-85 were created on 20 June 2002. The Issue [17] The issue in this case is the timing of the registration of SP 132846. The appellant's argument is that registration did not occur until 2 July 2002 as evidenced by the registration confirmation statements; therefore at midnight on 30 June 2002, Lots 1-24 and 26-85 did not exist and the appellant was not the owner of those lots. -- 4 of 8 -- 5 [18] However, the respondent's argument is that SP 132846 was registered on 20 June 2002 when SP 132846 was lodged, based on the reasoning that the plan was registered when the particulars were recorded in the freehold land register and those particulars form part of that register from the time when SP 132846 was lodged. In other words, the respondent argued that it is irrelevant when the actual recording of those details in the register occurred, as s.175 deems that those particulars form part of the register from the time of lodgement; once the plan is registered it operates retrospectively to the date of lodgement, in this case 20 June 2002. [19] The respondent did not concede that the particulars of SP 132846 were recorded in the freehold land register on 2 July 2002. However, the appellant contended that the registration confirmation statements were the only evidence of when the particulars were recorded. I accept that contention. Consideration of the Arguments [20] The issue between the parties as to whether the appellant was the owner of the subject lands as at midnight on 30 June 2002 depends upon whether the lots in SP 132846 were created at that time. The appellant relies on s.175 of the Land Title Act. SP 132846 is a plan of survey and therefore an instrument which was registered when the particulars were recorded in the freehold land register, which I accept occurred on 2 July 2002. However, that registered instrument forms part of the freehold land register from the time it was lodged on 20 June 2002. The respondent's argument depends on the proposition that once those particulars were entered in the freehold land register, registration operates retrospectively to the date of lodgment, 20 June 2002, therefore each lot in SP 132846 was created as a separate parcel at that time. [21] The resolution of this issue depends upon the meaning of s.175 of the Land Title Act. While it is clear that although the particulars of SP 132846 were recorded later, for the purposes of that Act they are taken to be included on the register retrospectively to the date of lodgment on 20 June 2002. However, does that mean that for the purposes of the Land Tax Act those lots were deemed to be created on the date of lodgment on 20 June 2002? [22] Either interpretation is possible. However, in my view, it is necessary to keep in mind that the Land Tax Act and the Land Title Act were enacted for different purposes. The first deals with the taxation of land held by landowners as at midnight on 30 June in each year. The other deals with the registration of interests in land and the protection of registered interests. -- 5 of 8 -- 6 [23] To be liable for taxation under the Land Tax Act, a person must be the owner of land at that very specific time. However, under the Land Title Act the benefit of registration is afforded to an interest in land from the time of lodgement, even though the recording in the register occurs at a later time. The legislature clearly intended to afford that protection by providing that the registered instrument forms part of the freehold land register from the time when it was lodged, rather than from the time it was registered. However, there does not seem to be the same legislative intention for the liability for land tax to have retrospective effect. Under the Land Tax Act a person becomes an owner and entitled to an estate in fee simple in possession from the date of registration. That date of registration in this case is 2 July 2002. [24] Section 175 of the Land Title Act backdates the benefit of registration to the date of lodgment once the instrument is registered. The section states that a registered instrument forms part of the freehold land register from when it is lodged. The section recognises that registration occurs at a different time to lodgment. However, the benefit runs from the date of lodgment. [25] There is no similar provision in the Land Tax Act. Ownership of the lots by the appellant occurs at the time of registration. There is no backdating of the liability for land tax to an earlier date. [26] The affidavit of Mr IE Tatham states that the notice of assessment of land tax was produced in reliance upon computerised records of the Department of Natural Resources and Mines. Although after registration of SP 132846 the appellant will be shown in the freehold land register as the registered owner from the date of lodgment of the plan of subdivision, if a search had been made of the freehold land register at midnight on 30 June 2002, SP 132846 was not registered at that time and the appellant could not be shown to be the owner of those lots. [27] A similar view of the meaning of s.175 of the Land Title Act was taken by the Land Court in Zadtech Pty Ltd v. Chief Executive, Department of Natural Resources and Mines (V2001-0016 to 0038) 21 September 2001 (not reported). In that case the learned Member of the Land Court had to determine when land was subdivided for the purposes of the Valuation of Land Act 1944. That depended upon the interpretation of s.8 of the Valuation of Land Act and s.49A(2) of the Land Title Act. Section 8 relevantly provides that land may be subdivided into parts by the issue of a certificate of title under the Land Title Act for a part of the land. The learned Member found that as a certificate of title is no longer issued automatically under the Land Title Act 1994 but only on the request of the registered owner, the reference in s.8 to the issue of a certificate of title should be read -- 6 of 8 -- 7 as a reference to the time when a certificate of title could issue under the Land Title Act, that is, when the relevant dealing is registered. [28] The learned Member reasoned that s.174 of the Land Title Act supports the conclusion that s.49A(2) means that separate lots were created when the plan was registered, that occurring when the particulars were inserted in the freehold land register. The learned Member considered that this interpretation was reinforced by s.181 and s.182 of the Land Title Act which provide that until registration no interest is created in land and that on registration an interest is created and vests in the person identified in the instrument as the person entitled to the interest. [29] Although concluding that s.175 backdates the benefit of registration to the date of lodgment once the instrument is registered, the learned Member pointed out that that does not mean that the date of registration of the plan is altered by the operation of s.175. The plan was registered when the particulars were recorded in the land title register and that date remains unchanged. [30] The respondent referred to the decision of the New Zealand Court of Appeal in Waitemata County v Expans Holdings Ltd [1975] 1 NZLR 34, which involved the meaning of "subdivision" in s.38(1) of the Town and Country Planning Act 1953. [31] That was a case dealing with caveats lodged by the District Land Registrar at the request of the County Council, which by resolution had prohibited the subdivision of land into lots of less than 50 acres. The central issue in that case was at what stage was the process of subdivision complete. [32] The respondent relied particularly upon the passage in the judgment of McCarthy P at 36: "But at least in legal circles the process beginning with the preparation of a plan capable of deposit under the Land Transfer Act and ending in its approval and signing by the District Land Registrar has long been treated, when completed, as having effected a subdivision. So at least one should be able to say that land is subdivided once a plan is deposited." The other two members of the Court of Appeal, Richmond and Haslam JJ, agreed that subdivision is effected upon the deposit of a plan in accordance with s.167(5) of the Land Transfer Act 1952. [33] In my view, that does not assist the respondent in the present case. The effect is similar to that of s.175 of the Land Title Act "deeming" that SP 132846 forms part of the freehold land register from when it was lodged. Conclusion [34] For those reasons I have come to the conclusion that the appellant was not the owner of Lots 1-24 and 26-85 on SP 132846 as at midnight on 30 June 2002, because those lots -- 7 of 8 -- 8 were not created until registration of the plan of subdivision on 2 July 2002. Therefore, no land tax can be charged on those lots as at midnight on 30 June 2002. [35] I am of the view that Land Tax Assessment No. 9001271 issued on 15 November 2002 by the respondent was incorrectly made as it includes Lots 1-24 and 26-85 on SP 132846 and these lots were not owned by the appellant as at midnight on 30 June 2002. However, on the evidence before me it would seem that at that time the appellant was the registered owner of Lot 900 on SP 127802 and Lot 40 on RP 14808. If that is correct, then the taxable value of those lots should have been included in the land tax assessment of land owned by the appellant as at midnight on 30 June 2002. [36] The respondent has power under the Land Tax Act to make alterations of assessments in certain circumstances. In my view, this matter should be remitted to the respondent to make the necessary alterations to the assessment. Orders 1. The appeal is allowed. 2. Land Tax Assessment No. 9001271 was incorrectly made as it included Lots 1-24 and 26-85 on SP 132846 which were not owned by the appellant as at midnight on 30 June 2002. 3. The assessment is remitted to the respondent to make what alterations are necessary to include the lands owned by the appellant as at midnight on 30 June 2002. JJ TRICKETT PRESIDENT OF THE LAND COURT -- 8 of 8 --