Realm Business Technology Pty Ltd As Tte V Redland City Council [2020] QLC 35

LAND COURT OF QUEENSLAND CITATION: Realm Business Technology Pty Ltd as Tte v Redland City Council [2020] QLC 35 PARTIES: Realm Business Technology Pty Ltd as Trustee ACN 095 679 922 (appellant) v Redland City Council (respondent) FILE NO: LGR079-20 DIVISION: General Division PROCEEDING: Appeal against categorisation decision under the Local Government Regulation 2012 DELIVERED ON: 17 September 2020 [ex tempore] DELIVERED AT: Brisbane HEARD ON: 16 September 2020 HEARD AT: Brisbane MEMBER: PG Stilgoe OAM ORDERS: 1. The appeal is dismissed. 2. The appellant must pay the respondent’s costs on the standard basis on the District Court scale. CATCHWORDS: REAL PROPERTY – RATES AND CHARGES – RATING OF LAND – REVIEW OF DECISIONS – APPEALS – QUEENSLAND – where the appellant company owned a house and land on Russell Island – where the house was the principal place of residence of the company’s two directors – where the respondent council levied differential rates for residential land on Russell Island – where the council rated the land as category 2a, which was for land on which there was a residential structure that was not the registered owner’s principal place of residence – where the appellant contended that the land should have been rated as category 1a, which was for land on which there was a residential structure that was the registered owner’s principal place of residence – whether the land could be rated as category 1a given that the registered owner of the land was a company – where the appeal was dismissed Land Court Act 2000 s 27A Perrin Family Trust v Commissioner of Land Tax (1980) 7 QLCR 27, cited Western Downs Regional Council v Geldard [2020] QLAC 1, cited APPEARANCES: R Sajko, a director of the appellant K Wylie (instructed by Redland City Council Legal Services Division) for the respondent [1] Realm Technology Pty Ltd bought a house on Russell Island in 2007. In 2016, the Redland City Council decided to levy differential rates for residential land. Category 1a includes all rateable land that: 1. having regard to any improvements or activities conducted upon the land, is used primarily for residential purposes; 2. the residential structure is an approved dwelling and is the registered owner’s principal place of residence; 3. has a value less than or equal to $385,000; and 4. is not categorised in rating category 1d or 1f. [2] Category 2a includes all rateable land that: 1. having regard to any improvements or activities conducted upon the land, is used primarily for residential purposes; 2. the residential structure is an approved dwelling and is not the registered owner’s principal place of residence; 3. has a value less than or equal to $385,000; and 4. is not categorised in rating category 2d or 2f. [3] It is common ground that from 2016 Realm was charged and paid rates on the category 2a rating. In 2020, Ms Sajko and Mr Solonari, who are the company’s two directors, retired and moved into the house. For convenience, I will refer to those two people as the appellants. The appellants say that, because the house is now their principal place of residence, they should be rated under category 1a rather than 2a. [4] The Court’s role is to decide the correct rating category for the house. In doing that, I am required to give a practical, sensible, broad and fair reading to the Revenue Statement, applying the orthodox principles of statutory interpretation.1 I am required 1 Western Downs Regional Council v Geldard [2020] QLAC 1 [27]. 2 to give proper effect to the intended meaning of the words used by the Council in its rating categorisations in the context of the structure and content of the Revenue Statement as a whole.2 [5] As the Land Appeal Court noted in Western Downs Regional Council v Geldard,3 decisions about rating categories usually focus on the use of the land. Category 1a focuses on both the use as the principal place of residence and on the ownership, the registered owner. The rating category 1a applies only if both conditions are fulfilled. [6] The Council’s Revenue Statement defines “principal place of residence” as a residential dwelling in which at least one of the registered owners of the land, or a person who is a life tenant of the dwelling made under a will or Court order, lives on an ongoing daily basis. Where the occupation is transient or of a passing nature, this is not sufficient to establish occupation as a principal place of residence. To qualify for principal place of residence under category rating 1a, both the ownership and the residence must align. [7] In this case, the house may be the appellants’ principal place of residence, but they are not the registered owners. Realm Technology is the owner of the house, but it is not the company’s principal place of residence. Therefore, the appeal must fail. [8] I appreciate that this technical answer to the appellants’ case does not address their submissions about fairness, or that the rating is morally and logically wrong. For that reason, I will spend some brief time responding to those submissions directly. [9] The appellants take exception to the Council’s fact sheet stating that, where the company owns the property, that will be the company’s principal place of business. The appellants say that Realm doesn’t operate any business, so it can’t have a principal place of business. There are two answers to that submission. The first, as Mr Wylie of counsel for the Council pointed out, ASIC requires that a company nominates a principal place of business, and the ASIC search annexed to the certificate of the chief executive officer shows that the appellants have nominated the house for that purpose. 2 Western Downs Regional Council v Geldard [2020] QLAC 1 [39]. 3 Ibid [32]. 3 [10] The second reason is that, by holding property on trust for the appellants’ superannuation fund, the company is, in fact, conducting business, even if in a restricted way. [11] Ms Sajko submitted that the consequences of the house being the principal place of business for the company is that she will then be homeless. That is not correct. A property can be a principal place of business and a principal place of residence. There is no suggestion that the Council will require the appellants to vacate the house because of this rating decision. [12] Ms Sajko submitted evidence that other councils in Queensland allow property owned by a company to be rated as principal place of residence. That submission highlights the problem with the appellants’ case. The Council can decide how to deal with residential land. The fact that some councils have specifically provided for the ability to apply for a principal place of residence confirms that, as a first principle, a company or trust cannot claim principal place of residence status. Similarly, the ability to claim a home exemption from land tax simply highlights the default position. Redland City Council has no equivalent exemption process, so the default position that a company is not entitled to claim principal place of residence status applies. [13] Finally, the appellants submit that the Council’s position does not keep up with current practice. They say that having property in a person’s own name is archaic. There are thousands of Queenslanders who might disagree with the proposition that people no longer hold land in their own name. Equally, it is a stretch to assert that the practice of putting land into a trust is a current practice. Trusts have existed in one form or another for centuries. The modern trust is a direct descendant of the medieval use, a devise by which land was transferred to a person (trustee) for the benefit of the beneficiary. By the middle of the 16th century, the essential characteristics of a trust were well established, and the modern trust fully emerged in the 18th and 19th centuries as the courts of equity, which had exclusive jurisdiction over trusts, developed a formal body of law.4 4 G E Dal Pont, Equity and Trusts in Australia (Lawbook Co, 5th ed, 2011) 486-88. 4 [14] Self-managed superannuation funds, which require a trust to operate, were introduced in Australia in 1999.5 While a self-managed super fund is a recent development, against a background of trusts having existed for centuries, it is no longer a novel device. [15] The appellants submit that laws are supposed to uphold people, and the Council’s rating decision has failed in this regard. The Council makes decisions for all people within its boundaries, both ratepayers and residents. It must balance the needs of the community, the revenue requirements to operate the city, and the legitimate expectations of ratepayers. The appellants are just one element of this complex equation. The fact that a trust owns property may, in the beneficiary’s eyes, produce an unjust result is not a new phenomenon. In a different set of facts, the Court has faced a similar argument. As I have done today, the Court in that case applied the plain meaning of the legislation.6 [16] As has been pointed out, there is a discretion under s 27A of the Land Court Act 2000 to order costs in a case where the legislation does not otherwise provide. It is also the case that costs are designed to compensate and not to punish. I understand Ms Sajko’s belief that this process should have been, or would have been, conducted without cost to her because the Land Court is one of the very few courts in this state where there is no filing fee to be paid.

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