Commissioner of State Revenue v Oakbee Pty Ltd & Ors [2013] VSC 672
This matter concerned the land tax liability for the 2009 assessment year in respect of two vacant land properties owned by the taxpayer. The taxpayer entered into contracts of sale in respect of each property before 31 December 2008. As it transpired one contract settled in early 2009, and one contract was not completed. The basis of the taxpayer’s objection was that the purchasers of each of the properties had taken possession of the land after entry into the contracts of sale, and as such by the operation of the deemed ownership provisions in the Act the respective purchasers were liable for any land tax for the 2009 assessment year.
At first instance, the Tribunal found the purchasers of each of the lands had not taken possession of the lands after entry into the contracts of sale. The Tribunal, however, set aside the assessment of the taxpayer’s land tax liability for the properties, having construed s. 16(3) of the Act, as having a separate and distinct operation from s. 16(1), in that s 16(3) is not dependant on the requirement for the purchaser to have “taken possession”.
The Commissioner successfully appealed the Tribunal’s order to the Supreme Court. The Court held the Tribunal misconstrued s. 16(3) as having a separate and distinct operation from s. 16(1) and held that s. 16(3) must necessarily be read subject to s. 16(1). The Court also articulated the meaning of ‘taken possession’ under s16, concluding that becoming “entitled” to possession was not sufficient for the purchasers to “take possession” as required by that section. Based on the factual findings, the Court ultimately held the purchasers had not taken possession of the properties by the relevant date, and therefore the land tax assessment was correct.
