Calligeros v Brisbane City Council [1997] QLC 370

[1997] QLC 370 1 LIBRARY COPY LAND COURT BRISBANE 29 October 1997 In the matter of an appeal against a categorisation under the provisions of the City of Brisbane Act 1924 BCC division: Yeerongpilly VC97-55 Manuel AG calli geros and MF Calli g eros and Brisbane City Council DECISION The appellants, Manuel Gerard Calligeros and Matina Fay Calligeros, own land which is situated at 596 Gowan Road, Calamvale and which is described as Lot 27 on Registered Plan 861440 Parish of Yeerongpilly, County of Stanley ("the subject land"). In a rate notice issued by the Brisbane City Council ("BCC") on 8 January, 1997, the subject land was categorised as Category B for the purpose of making and levying differential rates by the BCC on the land. On 5 February, 1997, Mr and Mrs Calligeros lodged an objection to the categorisation. That objection was disallowed by a delegate of the BCC on 17 March, 1997. On 16 April, 1997, Mr and Mrs Calligeros lodged an appeal against the BCC's decision. 2. At the hearing of that appeal, Mr and Mrs Calligeros were represented by Mr Philip Fletcher who is a town planner and an economist. The BCC was represented by Mr Traves of counsel. Oral evidence was given by Mr Calligeros, Mr Schultz -- 1 of 31 -- and Mr Fletcher. Various documents were admitted in evidence and I will refer to them in the course of these reasons. Both parties made written submissions. THE ISSUE 3. The only issue in this case is whether, as at 8 January, 1997 when the rate notice was issued, the subject land should have been included in Category A:Residential. In this case, that issue is determined by considering the dominant purpose for which the subject land is used. That is to be ascertained by reference to the "visual, economic and spacious (sic) aspects of the uses." (BCC's resolution, clause 3, see paragraph 7 below) THE LEGISLATIVE FRAMEWORK 4. Rates and charges which the BCC may make and levy are the subject of Part 3 of the City of Brisbane Act 1924 ("the Act"). The particular rates and charges which it may make and levy for a financial year are set out in section 48. Among those rates and charges are differential general rates (paragraph 48(a)). A "differential general rate" is: 5. " a rate (other than a separate rate) made and levied equally on the unimproved value of all rateable land in the city included in a category determined by the council for the purpose of levying the rate." (paragraph 49(2)) Before the BCC makes and levies a differential general rate for a financial year: " (a) (b) 6. it must, by resolution, determine- the categories into which rateable land in the city is to be categorised; and the criteria by which land is to be categorised." (section 81) After the categories and criteria have been determined, all rateable land must be categorised by either the BCC or, at its request, the chief executive (valuations), 2 -- 2 of 31 -- who is the chief executive within the meaning of the Valuation of Land Act 1944 (section 82 and see also the definition of "Chief executive (Valuations)" in sub-section 3(1)). There was no question in this case that the BCC had followed the appropriate procedures in determining the categories and criteria or in categorising the subject land. In addition, there was no question that Mr and Mrs Calligeros had been properly notified of the categorisation under section 85, that they had properly objected under section 86, or that the appropriate procedures had been followed under section 87 to determine their objection. 7. For the purposes of making and levying differential general rates during the financial year ending 30 June, 1997, the BCC made a resolution determining the categories into which the rateable land is to be categorised (Exhibit 2, pages 12a-16, clause 3). Six categories were determined. They were identified in the Differential Rating Table ("the Table") which was set out in clause 3 of the resolution. 3(a) (ii) of the resolution provides that Sub-clause 8. "the criteria by which land is to be categorised as being in a particular one of those categories are specified in the column 'Criteria' of the Differential General Rating Table opposite the identification and explanation of the particular category." this case. Only Categories A and B of the Table are relevant in They are: Category General Intent Criteria A. In general terms covers all land Land to which codes where the dominant purpose for 01 - vacant urban land, which that land is used or 04 - large homesite - vacant, intended for use is a 06 - outbuilding and residential purpose. The use of 94 - vacant rural land premises for what under the Town of the Land Use Codes apply Plan is a home activity in this where that land is residential context is to be regarded as zoned land, part of the residential use of and those premises. land which codes In the case of land on which 02 - single unit dwelling there is erected a single unit 05 - large homesite - dwelling, domestic dwelling, or a single 08 - building unit and 3 -- 3 of 31 -- B. unit domestic dwelling and a granny flat, to the extent that the dominant use of the land is residential, it falls into this category regardless of the zoning of the land. Where the land is used for single unit domestic dwelling purposes and some other purpose, then the dominant purpose for which the land is used or intended for use will be ascertained by reference to the visual, economic and spacious [sic)aspects of the uses. Vacant land will only fall within this category where it is wholly residential zoned land. In general terms is intended to cover all commercial and industrial properties where the dominant purpose for which the land is used or intended for use is other than for residential purposes. The use of the premises for what under the Town Plan is a home occupation and for associated residential purposes in this context is to be regarded as a use of those premises only for home occupation . In the case of land on which there is erected a building or buildings where the visual economic and spacious [sic) aspects are normal to that of a commercial or industrial usage the land falls within this category. Vacant land falls within this category where it is not residential zoned land. 4 09 - group title of the Land Use Codes apply, other than a lot on a building units plan or group titles plan registered under the Building Units and Group Titles Act 1980 where that lot is used for predominantly non-residential purposes or for purposes other than a single unit dwelling . Land to which codes 01 - vacant urban land, 04 - large homesite - vacant, 06 - outbuilding and 94 - vacant rural land of the Land Use Codes apply where that land is not residential zoned land and land which codes 08 - building unit, 09 - group title, 10 - combined multiple dwelling and shop, 11 - shop (single) 12 - shops - shopping group (more than 6 shops), 13 - shopping group (2 to 6 shops), 14 - shop (main retail), 15 - shop (secondary retail), 16 - drive-in shopping centre, 17 - restaurant 18 - special tourist attraction, 19 - walkway, 20 - marina, 21 - residential institution (non-medical) 22 - car park, 23 - retail warehouse, 24 - sales area outdoor, 25 - office, 26 - funeral parlour, 27 - hospital/convalescent home (medical care, private), 28 - warehouse and bulk store, 29 - transport terminal, 30 - service station, 31 - oil depot, 32 - wharf, 33 - builder's yard/contractor's yard, 34 - cold store/ice works, 35 - general industry, 36 - light industry, 37 - noxious/offensive industry, 38 - advertising/hoarding, -- 4 of 31 -- 39 harbour industry, 40 extractive, 41 - child care, 42 - hotel/tavern, 43 - motel, 44 - nursery, 45 - theatres, cinemas, 46 - drive-in theatres, 47 - licensed club, 48 - sports club/facilities, 49 - caravan park, 50 - other club (non business), 51 - religious, 52 - cemetery, 55 - library, 56 - showground/racecourse/ airfield, 57 - park and garden, 58 - educational, 90 - stratum, 91 - transformer, 92 - defence force establishment , 95 - reservoir, dam, bore, 96 - public hospital, 97 - welfare home/institution, and 99 - community protection centre of the Land Use Codes apply, other than a lot on a building units plan or a group titles plan registered under the Building Units and Group Titles Act 1980 where that lot is used for a predominantly residential purpose . 9. As I said in paragraph 3 above, whether or not the subject land in this case should be categorised as Residential is determined by considering the dominant purpose for which the subject land is used. That is to be ascertained by reference to the "visual, economic and spacious (sic) aspects of the uses." If the dominant purpose for which the subject land is used is residential, it is categorised as Category A. If the dominant purpose for which the land is used is other than residential purposes and if" ... the visual economic and spacious (sic) aspects are normal to that of a commercial or industrial usage the land falls within ... " Category B. 5 -- 5 of 31 -- BACKGROUND 10. With one exception, Mr Calligeros agreed with the report prepared on 27 February, 1997 by Mr Stuart Denholm, who is the Inspections Officer Internal Services with the BCC (Exhibit 2, pages 70-71). On that basis, I will set out as my findings of fact regarding the description of the improvements on the subject land by setting out the relevant part of Mr Denholm's letter: "Visual Situated on property is the Shapland Swimming School pool and associated building. The swimming pool building is a single level brick building that consists of a viewing area for the children's parents, male and female toilets and a reception area. The swimming pool is screened off totally by a 2 metre fence thus not enabling anyone to see into this area who is not within the complex. Also situated on the property is a car parking area that accommodates customers cars. The car park was fully concreted as well as line marked and consisted of 8 car parking spaces. At the time of my inspection the car park had 6 cars parked in it. Located towards the centre of this property was a large low set single unit dwelling. This single unit dwelling is the principal place of residence for the owners and their children. The single unit dwelling featured a combined lounge dining room, entry/foyer, kitchen, four bedrooms, two bathrooms, double garage, laundry and a pergola. Situated in the back yard was the families personal inground swimming pool. The remainder of this property was landscaped grounds. At the time of my inspection I sighted four large signs. The first two signs were located at the front of the property adjacent to the Gowan Road frontage. These signs stated Learn To Swim Shapland Swim Schools and the phone number. This sign can be easily viewed by passing motorists. The second sign was located next to the customer car park and this stated swim school entry with an arrow. The third sign was attached to the swim school building and this stated swim school entrance with an arrow. During my inspection I sighted five adults in the viewing area and three children who were being instructed in the swimming pool." (Exhibit 2, pages 70-71) 6 -- 6 of 31 -- 11. I note that the signs are counted as four in number as one two sided structure facing on to Gowan Road comprises two signs. THE EVIDENCE Purchase of subject land and obtaining approval for the Swim School 12. Mr Calligeros said that he and his wife purchased the subject land in 1994 although they had made the decision to do so some time earlier in 1993. In cross-examination, he said that he assumed that he and his wife had signed the contract for the purchase of the subject land at some time before 29 October, 1993. The purchase price was $328,000. Mr Calligeros said that he had decided to start the swim school either at or before the time that he and his wife entered the contract. He also said in cross-examination that he had wanted to live on a block of land that was larger than average. 13. At first, Mr Calligeros agreed, it "might have been" one of the terms of that contract that it was subject to his being able to obtain a town planning consent for him to establish the swim school. Mr Calligeros later agreed that it was a term but that there was a time limit within which he had to obtain the consent. 14. On 29 October, 1993, Mr Calligeros lodged an application for town planning consent (Exhibit 2, page 38). A Town Planning Consent Permit ("TPC permit") was sought to carry out "commercial, outdoor recreation and caretaker's flat" (Exhibit 2, page 38). The then current use of the subject land was described as "residential" and the proposed use as "commercial outdoor recreation (swimming tuition) and caretaker's flat" (Exhibit 2, page 39) The application 7 -- 7 of 31 -- stated that the existing dwelling was to remain as the owner's residence while a new building was to be used for dressing rooms, toilets and a parent viewing room. The site would not be subdivided. No external employees would be employed as the owners would operate the swim school. 15. The application for a TPC permit was considered by the Assessment Committee ("the Committee") of the BCC on 21 December, 1993. The Committee raised no objection to the proposal subject to certain requirements being met. It noted that the number of persons being instructed at any one time would be 3 and that the facilities were not used for competitive training/sports or practice for older children . The hours of operation would be limited to beginning at 7.00am and concluding by 7.00pm. No loudspeakers for public address were to be used on the site. (Exhibit 2, pages 43-44) 16. After the Committee's meeting, Mr Michael Kerry, the Manager of the Department of Development and Planning of the BCC, wrote to Mr Calligeros on 5 January, 1994 (Exhibit 2, pages 45-46). Mr Kerry advised that Mr Calligeros should provide an amended plan of the layout to show landscaping in accordance with Planning Policy Nos. 7.19 and 19.15. Dense landscaping was to be provided along the side boundary and road frontage to visually screen the pool and parking area. The dimensions of the parking and manoeuvring areas were to be in accordance with Planning Policy No.18.06. Other details that were required included details of the proposed fence to surround the pool and whether it was to act as an acoustic barrier. An acoustic report was also required (Exhibit 2, pages 45-46) 17. Mr Fletcher, as Planning Consultant with Phil Fletcher Planning and Investment Services Pty Ltd, wrote on 25 February, 1994 to Mr Kirby (Exhibit 2, pages 59-60). In that letter he wrote: 8 -- 8 of 31 -- 18 . "On behalf of the applicant I would request an early decision as the contract period for the purchase of the property has now expired and the applicant has been forced to finalise the purchase in good faith on the basis of the understandings reached in the discussions to date." (Ex hibit 2, page 60) In cross-examination, Mr Fletcher said that he did not know on what basis Mr Calligeros had settled the contract. His statement in this paragraph was a "device" to get the BCC to move more quickly in relation to the application. 19. At its meeting on 1 March, 1994, the Committee adhered to its previous decision. It noted that the number of children to be taught at any one time had increased from 3 to 6. It considered that 6 parking bays should be provided. (Exhibit 2, page 47) 20. G.E. Kirby, the Secretary of the Council Registration Board, wrote to Mr Calligeros on 12 April, 1994 advising him of the conditions that would attach to the TPC permit if it were to be issued (Exhibit 2, pages 48-53). That letter noted that there had been an objection to the application for the TPC permit as well as a petition with 40 signatures opposing the swim school. The TPC permit was issued on 1 June, 1994 (Exhibit 2, page 56) 21. Mr Calligeros said that he had settled the contract before he received the TPC permit. He agreed with Mr Fletcher's proposition that, at the time he settled, he did not know or believe that he would be granted the permit on terms acceptable to him. 22. Mr Fletcher said that, when he had prepared his report for the application for the TPC permit, he had been dealing, in the main, with the franchisor of the swim school. The franchisor had not signed the franchise agreement with Mr Calligeros until after the permit had been obtained. 9 -- 9 of 31 -- 23. Mr Calligeros said in cross-examination that the improvements for the swim school cost him approximately $90,000. 24. With regard to the use of the subject land in the future, Mr Fletcher said that, in his: " opinion the property will remain dominantly for residential use in the long-term, being in a residential area as it needs to be. Council, prior to the submission of a town planning application insisted that if an approval were to be forthcoming it would be in a very restrictive form which would not allow of any other non- residential use. Council insisted, rightly, that the use could not be considered as a 'home occupation' and although it was acknowledged that the use did not really comply with the Town Plan's definition of 'commercial outdoor recreation', Council insisted that a consent approval for that use was the only way in which an approval would be granted. The appropriate and legally correct way of proceeding would have been a rezoning to the Particular Development zone, however this was unacceptable since it was held that this would imply the acceptability of some other non-residential use if the swim school ceased. The approval ultimately obtained carries with it the implication that in the event of the cessation of the swimming safety classes there is no expectation that the property my be converted wholly or in part to some other non-residential use. All the indications given were that the site should not be regarded as a predominantly commercial site." (Exhibit D, pages 5-6) Description and location of subject land 25. The subject land is approximately 4,047 square metres in area. It is located next door to a subdivision of houses on much smaller 32 perch allotments. (Exhibit 2, page 19) At the time he purchased the subject land, Mr Calligeros said, the subdivision did not exist and he did not know that it would. It has come into existence in the last two years . 10 -- 10 of 31 -- He agreed that the subject land appeared different from its neighbouring 32 perch blocks but so too did other acreage blocks. In Mr Calligeros's view, the swimming pool and its associated structures are of a size and character and appearance which could readily be anticipated as part of the residential use on any of the one acre residential blocks in the area. Valuation 26. Mr Fletcher submitted that the value of the subject land is relevant in considering the issue in this case. He called as a witness Mr Brett Schultz, who has been a valuer since 1994. He holds a Bachelor of Business (Real Property Valuation and Administration) and is currently responsible for undertaking residential valuations (Exhibit C). In his oral evidence, Mr Schultz said that he is qualified to value commercial properties but not businesses. 27. Mr Schultz said in examination in chief that the highest and best use of the subject land is for residential purposes. It would be unlikely that a potential purchaser would want to purchase it for business purposes. In cross- examination, Mr Schultz said that he was aware that the swim school was being conducted at a loss but he had minimal information about the business. He agreed with Mr Traves that it could be relevant to know that the business could be operated at a greater capacity. 28. Mr Schultz regarded one of the two swimming pools as an over capitalisation of the subject land. The change rooms added minimal value to the property as did the car parking. Viewed as a whole, the residential component of the subject land was significant. The change rooms could be converted to a granny flat. In cross-examination, Mr Schultz said that he did not regard the change rooms as an over capitalisation as 11 -- 11 of 31 -- people did have change rooms on residential premises. In all, he considered that the subject land had been over capitalised to the extent of some $100,000. 29. Also in cross-examination, Mr Schultz did not agree with Mr Traves' proposition that, in a visual sense, the improvements had gone beyond those of a residence. When asked whether he knew of a comparable property, he replied that he did not. He could think of others which had swimming pools and gazebos or imposing structures in the back of the property but none which had them in the front as does the subject land. While Mr Schultz agreed with Mr Traves that street appeal is important, he considered that the structures on the subject land either did not detract, or detracted only slightly, from its street appeal . The Shapland Swim School 30. In his statement made on 16 June, 1997, Mr Calligeros spoke about the principal function of the Shapland Swim School ("the swim school") of which he is the registered proprietor (Exhibit 2, page 89) That function, he said, 31. " is to teach basic water safety and survival. It is not for swimming training as a sporting or competitive activity or for recreation. The vast majority of our students are babies and toddlers under three years. We teach only three students at a time and for sessions lasting 20 minutes." (Exhibit A, page 1) In cross-examination, Mr Calligeros said that the fact that he did not use the pool for competitive swimming meant that there was less noise and traffic. In addition, training usually took place early and late in the day. 32. Swimming classes are held between 8.40am and 6.00pm with none held for the hour between 2.20pm and 3.20pm. The classes run for 20 minutes. As a rule, three classes are held each hour but, at times, there may be only one or two students 12 -- 12 of 31 -- and not three. At any one time, the swim school can have between 200 and 350 students on its books . Just before it closed for its winter break in 1997, it was operating at 65- 70% capacity. Visual aspects 33. Mr Calligeros said in his statement that he and his wife had landscaped what was a "reasonably bare" block when they purchased it (Exhibit A, page 2). After the TPC permit was obtained, Mr and Mrs Calligeros did much of the landscaping themselves. They also spent some $5,000 on landscaping out of some $100,000 in connection with the swim school. 34. Mr Calligeros said that he had to extend the driveway. He agreed that the parking bays could be seen from the street but did not assume that they would be regarded as a car park. The Greeks, he said, have a lot of visitors. Eight parking bays are shown in the photograph at page 75 of Exhibit 2. 35. Mr Calligeros agreed that it was clear from the photographs in Exhibit 2, page 69 that the roof and one corner of the house could be seen. He did not agree that the house could appear to be on a separate property from the swim school. Indeed, if the swim school sign were removed, the swim school would appear to be an extension of the house. The landscaping separates the garage from the swim school rather than the house from the swim school. 36. Mr Calligeros said that their block of land was identical to any of the other one acre blocks in the street. 13 -- 13 of 31 -- 37. In his oral evidence, Mr Calligeros said that a lot of mothers walked into the house as they could not find the swim school. 38. Mr Fletcher said of the visual aspects: "The site is located in a relatively newly established residential area. The visual character of the subject property is, in my opinion, overwhelmingly residential and consistent with the character of that area. This is illustrated by reference to a series of photographs submitted with this report. The 'commercial' component does little to alter that character. There is no building or structure having any distinguishable commercial appearance or character, nor is there any building or structure located or designed so as to be visually or commercially prominent. The small facilities building and the structure over the pool are residential in scale and appearance and are designed and constructed in appropriate materials and colours and are so located as to have the appearance of being part of the residential development. The property is little different from typical residential premises commonly observed on the one acre residential blocks to the north and east, many of which are improved with large homes with tennis courts or swimming pools, and in some cases both. The main feature that distinguishes the property from surrounding properties is the small sign at the front. This sign does not create a sufficient visual impact to warrant regarding the premises as being predominantly commercial. The landscaping and general nature of development of the site essentially maintains a residential character. In my personal experience much of this was commenced prior to obtaining town planning consent. It was also my personal experience that the instructions from the appellants in designing and locating the swim school and in integrating the parking area into the residential driveway rather than creating a separate parking area, the dominant considerations were to maintain the dominance of the residential character and to ensure that what was done should not detract from the enjoyment of the property as the appellants' place of residence . 14 -- 14 of 31 -- 39. The visual character of the premises has not been impacted on in a manner or to an extent which would justify regarding the commercial use on the site as being predominant." (Exhibit D, page 3) The photographs at pages 66-78 of Exhibit 2 show various aspects of the subject land and its improvements. The middle photograph on page 69 shows three signs associated with the swim school (or four if the double sided sign is counted as two signs) when the property is viewed from a position near the junction of Gowan Road and Pallantine Road. Mr Fletcher agreed that the signs led a person to conclude that the building to the left of the car park was the swim school. He disagreed, however, that this led the property to have a commercial appearance. The subject land must be viewed overall. There are many trees, he said, with parts of buildings being exposed. Signs placed in the middle of the subject land do not give an impression or create an expectation that it is used for a commercial use. 40. Mr Fletcher said that there is something about commercial buildings that promote them as commercial. They tend to be less attractive and to be hard and angular in appearance. Generally, they are not surrounded by soft plantings and grass. Commercial buildings have a lot of parking. The buildings are not disguised in any way. While he did not disagree that the change rooms on the subject land are not unlike those at other swimming pools, he said that they had been designed to match the house. Consequently, the windows were the same as the house as well as the bricks. Economic aspects 41. Mr Calligeros said that the swim school was not a major retail concern utilising the majority of the land as a profitable commercial venture. In that sense, it was not in the same league as a Coles or Woolworths supermarket. He and his wife worked approximately four hours per day at the swim 15 -- 15 of 31 -- school. In return for that, the swim school returned them " a nett profit before paying wages to us of only $24,636 " for the financial year ending 30 June, 1996. "That is all the business will support", Mr Calligeros continued. The swim school had shown a loss during the previous two years. 42. Financial statements for the Manuel Calligeros Family Trust ("the trust") for the financial year ending 30 June, 1996 were admitted in evidence (Exhibit B). They showed that the swim school had sales of $119,386 in that financial year. Its gross profit was $117,463 but, as its expenses amounted to $129,419, it operated at a loss of $11,956 in that year (Exhibit B, page 9). Included in those expenses were salaries and wages of $36,592 for Mr and Mrs Calligeros. Salaries totalling $5,524 were paid to two other people who were each employed for six hours per week on a part time basis. The financial statements also indicate, as Mr Calligeros said in his evidence, that he and his wife also earned income from other investments but those investments are not relevant in this case. Those investments led to further income to the trust of $40,137 during the financial year ending 30 June, 1996. The total amount available from the trust for distribution to Mr and Mrs Calligeros was $28,179.72 . 43. Mr Calligeros said that his wife devoted some four hours per week day to the swim school while he spent 6 1 / 2 hours per week day teaching in the pool as well as time undertaking maintenance. In all, he estimated that he spent 9 hours each day on matters related to the swim school. 44. Mr Calligeros said that he and his wife had chosen the swim school as a lifestyle business. He wanted to maintain the income he earned from the business but he did not seek to increase it. By working only part of the year, he is 16 -- 16 of 31 -- able to spend time with his parents during the Australian winter. 45. There are other reasons why the business cannot be expanded, Mr Calligeros said. The observation room can hold only six chairs. Further car parking would be required if additional lessons were held. 46. In his evidence, Mr Calligeros said that, if the subject land is categorised as Category B, the Trust will pay a further $6,000 or so in additional rates and charges. As the business was not one of significance, the additional rates and charges will have a substantial impact. Mr Calligeros also expressed concern about the rates he paid for water. He was charged commercial rates for water, rather than residential rates. He understood commercial rates to be some 50% greater than residential rates. That was so even though some of the water was used in their house for such things as drinking and washing. The loss of water from the pool is minimal, he said. They had never paid excess water rates. Mr Calligeros understood from his enquiries with the BCC that the average use of water for a one acre property was approximately 500 kilolitres per recording period. He considered it inequitable to be charged commercial rates for water when the vast amount of water is used for residential purposes. 47. Mr Calligeros said that the swim school operates only during eight and a half months each year. For the remainder of the year, the subject land is used solely for residential purposes. Two and a half months of the time during which the swim school is closed are winter months. The swim school is also closed for two weeks at Easter and another two at Christmas. Mr and Mrs Calligeros have investment property which supplements their income. In his view, the swim school was " . . . very much a 'part- income' concern." (Exhibit A, page 3) 17 -- 17 of 31 -- 48 . In his oral evidence, Mr Calligeros said that there were never more than three babies in the pool at any one time. That was a lot fewer than could be found in a suburban pool on any weekend. 49. In his statement, Mr Calligeros said that, if he and his wife were to sell the property, it would be to change their place of residence. He would expect that the second pool would be a disadvantage to a prospective purchaser and would probably need to be filled in. Advice he had received indicated that the swim school facilities add little value to the property. If he and his wife were to sell the swim school, they would expect to sell the franchise and remain in the residence. 50. Mr Fletcher said in his statement of the economic aspects: "The swim school is commercial in function, but it cannot reasonably be compared with or considered as an average or typical commercial venture when compared with truly commercial properties. The property should not be treated on the same basis as a shop, service station or restaurant which are 100% commercial, particularly where there are reasonable expectations of long-term continuance of alternative commercial use; in comparative terms it would be grossly inequitable to do so. The swim school is open for only eight and a half months of the year; it is not even a full-time economic activity. Its purpose is to teach babies and toddlers water survival and this is done with a maximum of 3 children per class. Frequently two (and sometimes all three) of the children will be from the same family so the number of families visiting the site at any time is quite limited. The site is not used for swimming training for competitive purposes and is not used as a public pool; tuition is by appointment only. 18 -- 18 of 31 -- Given the limited operation times and limited percentage of the site occupied by the 'swim school', in my opinion it constitutes a very limited level of economic activity. I have examined the financial accounts of the swim school and have formed the opinion that they firmly reinforce that conclusion." (Exhibit D, page 4) Spatial aspects 51. Mr Calligeros stated both in his statement and in his oral evidence that the swim school occupies only 7% of the subject land. The remaining 93% of the subject land is used for residential purposes. Mr Denholm reached a slightly different conclusion when he wrote in his report of 27 February, 1997: 52. "The swimming pool complex including improvements occupies a land area of 248.40 sqm. The customer car park including the driveway occupies a land area of 258.99 sqm. This combined equals a total land area of 507.39 sqm which represents approximately 13% of the total land area. The dwelling, front yard and back yard occupies 3421.61 sqm which represents approximately 87%. (Exhibit 2, page 70) Mr Calligeros said that all of the landscaped areas were used for residential purposes. That included the area at the front of the property. Mothers and their children were discouraged from running in the grounds. The driveway was widened as it was only a narrow entry and driveway suited to one vehicle when the subject land was purchased. 53. In his statement, Mr Fletcher considered that the swim school occupied only 4.5% of the subject land or, if the parking area was taken into account, 7.00%. Given that it occupies such a small portion of the site, Mr Fletcher continued, the swim school is not the predominant use of the site. In addition, from a functional point of view, the swim school could not be said to exist for three and a half months of each year. 19 -- 19 of 31 -- 54. In the Town Planning Report which Mr Fletcher prepared on 25 October, 1993, for the swim school, it is stated that the franchisor of the swim school advises potential franchisees of the need for a minimum of 2,000 square metres. Potential franchisees are advised of the need for the site either to be in or to abut residential areas. (Exhibit 2, page 27) 55. Mr Traves suggested to Mr Fletcher that the landscaping might be regarded as buffering the swim school and so be regarded as part of that activity. Mr Fletcher said that the landscaping should not be viewed in this way for it would be there even if the swim school were not . CONSIDERATION 56. Whether or not the subject land should be included in Category A or Category B will be determined by reference to its "dominant purpose". In general terms, the dominant purpose will be determined in relation to both categories by reference to the visual, economic and spatial (sic) aspects of the various uses made property. 57. Both Mr Fletcher and Mr Traves submitted that I should determine the question on an objective basis and that the words "dominant purpose" should be construed to mean the purpose which was the ruling, prevailing or most influential purpose. That submission is consistent with the judgements of the High Court in Commissioner of Taxation v Spotless Services Ltd (1996) 71 ALJR 81 at 85, to which Mr Traves referred in support of his submission. In that case, the Commissioner of Taxation had issued assessments on the basis that certain amounts of interest formed part of the taxpayers' assessable income. He did so after issuing a determination that the taxpayers had obtained a tax benefit in connection with a scheme to which Part IVA of the Income Tax Assessment Act 1936 20 -- 20 of 31 -- applied and that the amount of that benefit was to be included in their assessable income. Those amounts of interest were included on the basis that they might have been included, or might reasonably be expected to have been included, in the taxpayers' assessable income if the scheme had not been entered into or carried out. The Commissioner may only make such a determination where, in accordance with paragraph 177D(b), he is satisfied that the taxpayer's dominant purpose in entering the scheme was to obtain a tax benefit. 58. Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ said: 59 . "Much turns upon the identification, among various purposes, of that which is 'dominant'. In its ordinary meaning, dominant, indicates that purpose which was the ruling, prevailing, or most influential purpose, In the present case, if the taxpayers took steps which maximised their after-tax return and they did so in a manner indicating the presence of the 'dominant purpose' to obtain a 'tax benefit', then the criteria which were to be met before the Commissioner might make determinations under s 177F were satisfied. That is, those criteria would be met if the dominant purpose was to achieve a result whereby there was not included in the assessable income an amount that might reasonably be expected to have been included if the scheme was not entered into or carried out." (page 85) In the context of the judgement, it is implicit that the test must be an objective one for the dominant purpose is to be determined by reference to the eight criteria set out in paragraph 177D(b). That the dominant purpose must be assessed objectively is expressly stated in the separate judgement of McHugh J (page 90). 60. The words "dominant purpose" were also considered in a different context in earlier cases in the Federal Court - Epitoma Pty Ltd v Australasian Meat Industry Employees' Union and Others (Nol) (1984) 54 ALR 724, Gray J, and GTS Freight Management Pty Ltd v Transport Workers Union of Australia and 21 -- 21 of 31 -- Others (1990) 95 ALR 195, Von Doussa J . Both cases were concerned with determining the "dominant purpose" of certain conduct in the context of section 45D of the Trade Practices Act 1974. If the dominant purpose of certain conduct of a person was substantially related to certain conditions of employment or to the employer's having terminated an employee's employment, a person is not taken to have contravened sub-section 45D(l) or 45D(1A). Von Doussa J said in GTS Freight Management: 61. "When considering whether conduct is of the kind proscribed bys 45D(l) or (lA), it will be appropriate to inquire what was the immediate purpose of the conduct: see Barneys Blu-Crete Pty Ltd v Australian Workers' Union (1979) 43 FLR 463 at 473. This is so because for the purposes of s 45D(l) and (lA), s 45D(2) provides that a person shall be deemed to engage in conduct for a purpose mentioned if he engages in that conduct for purposes that include that purpose. The immediate purpose which brings the conduct withins 45D(l) or (lA) may be only one of the purposes of the respondent, and not necessarily the dominant one: Tillmanns Butcheries (1979) 27 ALR 367 at 374 per Bowen CJ (with whom Evatt J agreed) and at 384 per Deane J; see also Mudginberri (1985) 9 FCR 425 at 429; 61 ALR 417. I agree with the criticism of Wribass Pty Ltd v Swallow made by Gray J [in Epitoma]. In my opinion the dominant purpose is not necessarily to be treated as the immediate purpose which the relevant conduct is intended to achieve by those engaging in it." (pages 209-210) What then, is the meaning of the words "dominant purpose" in the context of the Differential Rating Table? It seems to me that the words are intended to have their ordinary meaning as adopted by both the High Court and the Federal Court. That is, the dominant purpose is that which is the ruling, prevailing or most influential purpose. That purpose is determined by objectively assessing the uses to which the land is put and doing so by reference to the visual, economic and spatial (not spacious, see paragraph 86 below) aspects of the uses. There is nothing to suggest that any of those aspects is to be given any greater weight than the others. 22 -- 22 of 31 -- Whether or not the determination of the dominant purpose will involve a consideration of only the most immediate uses of the land or whether it will be done by reference to some less immediate purpose of the uses will depend on the circumstances of the case. 62 . What is meant by the terms "visual", "economic" and "spacious" and what is dominant purpose of the uses having regard to them? In this case, there are only two uses made of the subject land: residential and the swim school. 63. I will consider first the visual aspects. The meaning of the word "visual" is, in part: 64. "A. adj. 1. Of beams: Coming, proceeding, or directed from the eye or sight. Obs. exc. in visual line, ray below (in which it is now understood in sense 2). lME 2 Of, pertaining to, or connected with the faculty of sight or the process of vision. Cf. OPTIC a.I. Ll5. 3. That is by nature perceivable to the eye; able to be seen; visible. Ll5. 4 (Of knowledge) attained or obtained by sight; (of an action) performed by the eye; (of an impression etc.) received through the sense of sight; based on something seen. Ml7. 5. Of or pertaining to vision in relation to the object of sight; optical. ElB. 6 Of the nature of a mental vision produced or occurring as a mental image. El9." In the context of the Differential General Rate Table, it seems to me that the "visual ... aspects" of the uses are those components or appearances (aspects - New Shorter Oxford English Dictionary) of the uses that are seen. They will be determined by considering the impression the uses make on the eye or by how they look. 65. Mr Traves submitted that the most important visual aspect is that from Gowan Road, onto which the subject land fronts . There is, however, nothing in the Differential General Rating Table which suggests that the visual aspect from the street frontage of a property is the only aspect to 23 -- 23 of 31 -- which regard should be had in a visual sense. Regard should be had to the property as a whole. 66. Looking first at the Gowan Road aspect, I am satisfied that three signs, one of which is double sided, are clearly visible from the road. The purpose of the double sided sign is clearly to attract the attention of those passing by, or those looking for it, to the swim school located on the premises. The purpose of the other two signs is to direct those on foot to find the swim school itself. The signs are in themselves indicative of an activity, other than a residential activity, taking place on the property. 67. That perception is heightened by the eight marked and paved parking bays shown in the photograph at page 67 of Exhibit 2. Those parking bays are clearly visible from the street. The driveway has been widened and the effect of that widening is to enable the cars to be manoeuvred from the space and driven, rather than backed, down the driveway to Gowan Road. I do not accept that the presence of such marked parking bays is consistent with a residential use even if I were to accept that, as Mr Calligeros said in evidence, people of a Greek cultural background have a large number of visitors. 68. Mr Traves submitted that the swim school effectively runs the length of the Gowan Road frontage. I do not accept that submission in its entirety. None of the plans submitted seems to reflect the pool and related features as they have ultimately been constructed. It is clear from the photographs in Exhibit 2 that, apart from the area occupied by the widened driveway and the parking bays, an area extending from the front fence and back several metres is taken up with grass and trees. The trees are planted in two separate lines as appears from the photograph at page 67 of Exhibit 2 . 24 -- 24 of 31 -- 69 . The pool is built to one end of the Gowan Road boundary of the subject land. It and the amenities block occupy, in general terms, one third of the Gowan Road frontage. Along the wall screening the pool are planted shrubs and various plants but the wall remains largely visible at this stage of the plants' growth. The amenities block is quite apparent from Gowan Road. It is built in the same colour brick as the house and I accept that it is built in a style that matches the house. The wall of the pool is built in a colour that tones in with the colour of the brick. 70. A little less than a third of the centre section of the frontage appears from Gowan Road to be quite heavy vegetation (Exhibit 2, pages 67 and 69). It shields a double garage used by the Calligeros family for its vehicles as well as screening part of the house from the street (Exhibit 2, page 76). The house used as a residence by Mr and Mrs Calligeros and their family is set back behind the garage and extends from a point behind the swim school across to a point behind the parking bays. The house is not generally visible from the street. 71. The final third, in broad terms, of the Gowan Road frontage is occupied by the parking bays, the widened driveway and a garden bed which is quite densely planted. 72. In general terms the trees, lawns, shrubs and vegetation are not indicative of either a commercial or a residential purpose. They can be consistent with both. I note that I have already found that all of the subject land is landscaped (see paragraph 10 above). Some of the landscaping was required by the BCC before it gave its approval for the swim school. It follows that its purpose when it was planted might well have been to obtain the approval. That it was planted for a particular purpose does not determine the purpose for which it is now used. Mr Calligeros said that the 25 -- 25 of 31 -- swim school patrons and their children were not allowed to use the garden. In the absence of any evidence to the contrary, I accept that is so. I find, therefore, that the gardens are not used on a day by day basis in connection with the swim school. They are used to beautify the subject land. It is not possible to determine whether that beautification is now for the purpose of its use as a residential property or to enhance its attractiveness in so far as the swim school is concerned. It may well be for both purposes. I have concluded that the landscaping, when taken on its own, takes me no further in determining the issue. 73. Mr Traves submitted that the residential aspects are muted in a visual sense in that they are barely visible from the street. That is so but it does not necessarily follow that the commercial aspects of the subject land are enhanced. Mr Fletcher has made the point, as I have found, that the pool and the amenities block are built in a style to match the house. Visually, there is not a great deal to distinguish the amenities block from the house. There is not a great deal to distinguish the residential from the commercial purposes simply by looking at the buildings. That is apparent from the photographs of the garage and the house and of the amenities block (Exhibit 2, page 66 and see also page 76). 74. The amenities block could be either commercial or residential from its appearance. It does not appear to be an extension of the house for the house is not visible. The lack of visibility of the house, though, does not lead to the conclusion that the amenities block has the appearance of a commercial enterprise. Given the characteristics of the architecture and construction of the house and the amenities block, the amenities block could, in a visual sense, be part of the residence itself . 26 -- 26 of 31 -- 75. Regard must also be had to the rest of the property other than the view from Gowan Road. I have already mentioned the landscaping on the rest of the property. Mention should also be made of the screening which I accept surrounds the swimming pool. The pool is, I find, entirely screened, so that the pool and those using it cannot be seen from the remainder of the subject land. 76. The word "economic" is defined in the New Shorter Oxford English Dictionary to mean, in so far as it is relevant: "A. . .. 1. Pertaining to household management ... Relating to pecuniary position ... Practical, industrial . . . B. . . . Housekeeping . . . Financial or material condition." The Macquarie Dictionary defines it to mean: 77. "adj. 1. pertaining to the production, distribution, and use of income and wealth. 2. of or pertaining to the science of economics. 3. pertaining to an economy, or system of organisation or operation, esp. of the process of production. 4. pertaining to the means of living; utilitarian: economic entomology, botany etc. 5. Colloq. economical. 6. Collaq. cheap." In light of these meanings, a consideration under the Differential General Rating Table of the economic aspects of the uses will involve a consideration of such matters as the income which is generated by any of the uses, the level of activity required to generate that income, the cost to the owner if the uses were carried on elsewhere and the capital devoted to the uses. 78. I find that the turnover generated by the swim school was $119,386. That was generated from swimming classes which I find were held for eight hours and twenty minutes between 8.40am and 6.00pm each week day. Each class lasted for twenty minutes and was held with between one and three 27 -- 27 of 31 -- students. As the school was in operation for only eight and a half months each year, the level of income shows a high level of patronage when compared with the maximum of twenty five lessons that could be held each day . It indicates a constant movement of babies and toddlers and of parents escorting them to their lessons. Also indicated is a steady movement of cars through the car park on the subject land. 79. The swim school employs Mr Calligeros on a full-time basis as I find that it employs him either in teaching or in associated work for some nine hours per day during the week. His wife is employed for fours per day and two other coaches are each employed for six hours per week. Although only a small employer, the swim school is a significant employer. 80. Whether or not there is scope for significant growth is a matter upon which I cannot make a firm finding of fact on the evidence available. There would no doubt be additional income generated if the swim school were to operate all year round or with only a briefer holiday break at Christmas/New Year and at Easter. Whether additional income could be generated from its operation on the days on which it is currently operating is a matter of conjecture. 81. A capital sum of some $90,000, I find, was invested in the pool and building works associated with it. The purchase price of the land and house had been $328,000. Both were investments of some substance but it cannot be said that the initial purchase price was attributable solely to residential aspects and the $90,000 to the swim school. A part of the $328,000 must be attributed to the land on which the swim school and the associated car park stands. On the evidence, it is not possible to determine the way in which the purchase price can be attributed to one purpose or the other. 28 -- 28 of 31 -- 82. Mr Fletcher sought to rely on the evidence of Mr Schultz to support his submission that the swim school was not the dominant purpose when viewed from the economic point of view. Mr Schultz said that the swim school facilities added little if anything to the value of the property. They represented an overcapitalisation of the property. If I accept that evidence, as I do, it does not support Mr Fletcher's submission that the residential uses were dominant. The evidence indicates that the swim school has been established for a substantial capital outlay without a commensurate capital gain in the value of the subject land. That would seem to indicate that the implementation of the plan to operate the swim school was being carried out despite the impact upon the residential use of the property. 83. There is no evidence of any dollar value which can be ascribed to the on-going residential use made of the subject land by the Calligeros family. In relation to the business, there is evidence of the dollar values which can be ascribed to the ongoing costs of operating the swim school. That information is found in the documents relating to the family trust (Exhibit B). 84. The investment in the franchise is also of some substance for I find that the franchise fees amounted to $33,293.56 in the financial year ending 30 June, 1996. The interest paid by the swim school was $12,373 in the same financial year. 85. The level of capital investment expenditure indicate that the swim school is a business of some substance. It is not a hobby but a full-time occupation for Mr Calligeros and a part-time occupation for three other people, including Mrs Calligeros. This conclusion is not weakened by the suggestion, put forward by Mr Fletcher, that the swim school does not have the capacity to meet the additional rates which 29 -- 29 of 31 -- would be charged if the property were found to be Category B rather than Category A under the Differential General Rating Table. It does not detract from the level of business activity already indicated by the evidence. 86. In relation to the last aspect of "spacious", both parties have submitted that this should refer to "spatial". Given that the word "spacious" does not make sense in its context, I agree with their submission. The word "spatial" is defined in the New Shorter Oxford English Dictionary to mean, in so far as it is relevant: "1. Having extension in space; occupying space; consisting of or characterized by space. M19. 2. Of or relating to space; subject to or governed by the conditions of space; II The Macquarie Dictionary's definition is in similar terms. 87. On the basis of Mr Denholm's evidence, I find that the swimming pool, amenities block, car park and driveway occupy an area of 507.39 square metres, or 13%, of the subject land. The house and the remainder of the property occupy approximately 3,421.61, or 87%, of the subject land. For the reasons I gave at paragraph 72 above in relation to landscaping, I do not accept that additional areas of "passive use" should be added to the area attributed to the use made by the swim school. 88. The spatial aspects of the use of the subject land would favour a conclusion that the dominant purpose for which it is used is residential. Looking at the visual aspects of the subject land from the Gowan Road, I am satisfied that there is certainly a strong indication that a commercial use is carried out on the property. That indication is conveyed by the signs and the lined parking bays. Apart from those signs and the car parking bays, however, the appearance of the subject land is ambivalent; that is to say, it could be either 30 -- 30 of 31 -- commercial or residential. The visual aspects of the remainder of the property are clearly related to residential purposes. The swim school is shielded from the remainder of the property. The economic aspects of the uses of the subject land reveal that the swim school is a significant activity. 89. Taking all of these aspects into account, I have concluded that, on the balance of probabilities, the dominant purpose for which the land is used is residential rather than commercial. The spatial and visual aspects which I have identified favouring residential purposes are not lessened by those visual aspects which I have described as ambivalent. They are not outweighed by the economic aspects which support a significant level of commercial activity on the property. 90. For the reasons I have given, I order that the land which is situated at 596 Gowan Road, Calamvale and which is described as Lot 27 on Registered Plan 861440 Parish of Yeerongpilly, County of Stanley is categorised as Category A under the Brisbane City Council's Differential General Rating Table. 31 SA FORGIE MEMBER OF THE LAND COURT -- 31 of 31 --