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Vikpro Pty Ltd v Wyuna Court Pty Ltd

 

[2018] QSC 160

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Vikpro Pty Ltd v Wyuna Court Pty Ltd ATF Wyuna Court Unit Trust [2018] QSC 160

PARTIES:

VIKPRO PTY LTD

ACN 154 015 237

(applicant)

v

WYUNA COURT PTY LTD ATF WYUNA COURT UNIT TRUST

ACN 602 269 250

(respondent)

FILE NO:

BS 1847 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

19 July 2018

DELIVERED AT:

Brisbane

HEARING DATE:

12 July 2018

JUDGE:

Applegarth J

ORDER:

The applicant bring in minutes of order within 7 days in accordance with [46] – [49] of these reasons.  Liberty to apply as to the form of order and any issue of costs.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – OTHER MATTERS – where the applicant leases premises on which land tax has been levied against the respondent – where, between 1992 and 2009, the Land Tax Act 1915 (Qld) made contractual provisions requiring a lessee to pay land tax or reimburse the lessor for land tax unenforceable – where the Land Tax Act 2010 (Qld) failed to preserve this statutory bar – where, on 7 August 2015, this Court declared that the applicant was liable to pay the respondent land tax, which was then upheld on appeal – where, following these decisions, the Revenue Legislation Amendment Act 2017 (Qld) retrospectively restored the statutory bar but maintained the enforceability of court orders obtained by lessors requiring a lessee to pay land tax – whether the declaration made on 7 August 2015 purported to declare the rights and obligations of the parties under such a future law – whether the declaration made on 7 August 2015 is an order requiring the applicant to pay land tax which is enforceable – whether the applicant is required to pay the respondent land tax for the 2018 year

Acts Interpretation Act 1954 (Qld), s 20

Civil Proceedings Act 2011 (Qld), s 10

Land Tax Act 1915 (Qld), s 44A

Land Tax Act 2010 (Qld), s 83A, s 100

Revenue Legislation Amendment Act 2017 (Qld), s 26

Revenue and Other Legislation Amendment Act 2009 (Qld), s 76

Franklin v The Queen (No 2) [1974] QB 205, cited

Royal Insurance Co Ltd v Mylius (1926) 38 CLR 477, cited

The Queen v The Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 cited

Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225, considered

Warramunda Village Inc v Pryde (2001) 105 FCR 437; [2001] FCA 61, cited

Wyuna Court Pty Ltd v Vikpro Pty Ltd [2015] QSC 216, considered

COUNSEL:

P J Dunning QC SG and S Richardson for the applicant

M M Stewart QC and D J Pyle for the respondent

SOLICITORS:

GM Lawyers for the applicant

O’Shea & Associates for the respondent

  1. [1]
    Vikpro sub-leases premises from Wyuna under a lease that commenced on 1 July 2006 and expires on 29 September 2076.  A dispute has arisen over whether, since the commencement of the Revenue Legislation Amendment Act 2017 (Qld) (“the 2017 Amendments”), Vikpro is obliged to pay Wyuna land tax levied on Wyuna in respect of the land that is subject to the lease.
  2. [2]
    Wyuna contends that Vikpro is, and that Wyuna’s entitlement to be paid was established by a declaration made by Dalton J on 7 August 2015.  Justice Dalton ruled that the effect of the Land Tax Act 2010 (Qld) (“the 2010 Act”) “was to remove the bar on enforceability of cl 11.2 of the lease”.[1]  In reliance on the declaration made by Dalton J, Wyuna seeks an order that Vikpro pay it $53,173.89 for land tax levied by the State in respect of the leased property for the period from 1 July 2017 to 30 June 2018.
  3. [3]
    Vikpro contends it is not obliged to pay that amount, and relies upon s 83A of the 2010 Act which relevantly provides in respect of its lease:

“A provision in the lease requiring a lessee to pay land tax, or reimburse the lessor for land tax, is unenforceable.”

Its position is that the 2017 Amendments in effect restore the bar on enforceability.  Section 100(1) which was introduced by the 2017 Amendments provides:

“Section 83A is taken to have had effect on and from 30 June 2010.”

  1. [4]
    The parties also have rival contentions over the application and operation of s 100(4) of the 2010 Act, to which I will return.
  2. [5]
    The issue before me is whether upon the proper construction of:
  1. (a)
    the declaration made on 7 August 2015; and
  1. (b)
    the 2017 Amendments

Vikpro is liable to pay land tax levied on Wyuna in respect of the land the subject of the lease.

Background

  1. [6]
    The relevant legislative history up to and including the enactment of the 2010 Act is more fully described in the reasons of Dalton J in Wyuna Court Pty Ltd v Vikpro Pty Ltd,[2] which was upheld on appeal in Vikpro Pty Ltd v Wyuna Court Pty Ltd.[3]  More shortly stated, s 44A was inserted in the Land Tax Act 1915 (Qld) (“the 1915 Act”) in 1991 and applied to a lease entered into after 1 January 1992  requiring a lessee to pay land tax or reimburse the lessor for land tax.  It provided that such a provision was unenforceable.  Section 44A was repealed in 2009 by the Revenue and Other Legislation Amendment Act 2009 (Qld) (“the 2009 Amendments”), but the 2009 Amendments included transitional provisions.  These applied to the relevant lease which was entered into in 2006.  The parties agreed before Dalton J that, notwithstanding the 2009 Amendments, Wyuna remained unable to enforce the liability to recompense land tax created by cl 11.2 of the lease.[4]
  2. [7]
    In 2010 a new Land Tax Act was passed.  It was designed to make the legislation clearer and simpler.  It contained transitional provisions, but no equivalent to the specific transitional provision in the 2009 Amendments which preserved the operation of the previous s 44A.  Justice Dalton considered the issues of statutory interpretation argued by the parties and, as noted, concluded that the effect of the 2010 Act was to remove the bar on enforceability of cl 11.2 of the lease. 
  3. [8]
    Vikpro also argued before Dalton J that Wyuna was estopped from enforcing its right to collect the amount of land tax it paid pursuant to cl 11.2 of the lease.  This estoppel claim failed.  Justice Dalton disposed of the application as follows:

“[30] The applicant asked for a declaration that the respondent was liable in terms of cl 11.2 from the date of the operation of the 2010 Act.  When I raised the question of the apparent forgiveness of liability for the financial years ended 2011 and 2012, counsel conceded that the declaration was not sought in relation to those years.  The declaration I make therefore deals only with the position from 1 July 2012.

[31] I declare that from 1 July 2012 the respondent is liable to pay land tax levied on the applicant in respect of the land the subject of registered sub-lease No 710320129.”

The 2017 Amendments

  1. [9]
    Section 83A applies to a “pre-existing lease” which relevantly means a lease entered into after 1 January 1992 and before 30 June 2009.  Section 83A(2) provides that a provision in a lease to which the section applies requiring a lessee to pay land tax, or reimburse the lessor for land tax, is unenforceable.
  2. [10]
    Section 100 of the 2010 Act is a transitional provision governing the application of s 83A.  Importantly, it provides that s 83A is taken to have had effect on and from 30 June 2010: 

100 Application of s 83A

  1. (1)
    Section 83A is taken to have had effect on and from 30 June 2010.
  2. (2)
    However, if a lessee of a lease to which section 83A applies has paid an amount of land tax, or paid an amount to the lessor for land tax, before the commencement, the lessee is not entitled, only because of the operation of section 83A, to recover the amount.
  3. (3)
    Subsection (2) does not limit the grounds on which the lessee may otherwise recover an amount from the lessor for land tax paid in relation to the lease.
  4. (4)
    Also, if a court has made an order requiring a lessee of a lease to which section 83A applied to pay land tax in relation to the lease–
  1. (a)
    despite subsection (1), the lessor may enforce the order; and
  1. (b)
    section 83A does not affect the enforceability of the order.
  1. (5)
    In this section–

 land tax includes land tax levied under the repealed Land Tax Act 1915.

  1. [11]
    In general terms, the 2017 Amendments may be said to have largely reversed the effect of the interpretation adopted by this Court in relation to the transitional provisions in the 2010 Act and the savings provisions of the Acts Interpretation Act 1954 (Qld).  However, as appears, s 100(2) affects recovery by a lessee of an amount of land tax that has been paid, and s 100(4) permits a lessor to enforce certain court orders. 
  2. [12]
    The Explanatory Notes to the Revenue Legislation Amendment Bill 2017 (Qld), to which the parties referred on the issue of the proper interpretation of s 100, state:

Recovery of land tax by lessors

The 1915 LTA provided that, for leases entered into after 1 January 1992, a provision in a lease requiring a lessee to pay land tax or reimburse the lessor for land tax was unenforceable (the prohibition).  The prohibition was repealed on 30 June 2009.  However, in order to maintain equity and fairness for lessees under existing leases entered into while the prohibition was in force (pre-existing leases), a transitional provision was inserted into the 1915 LTA to ensure the prohibition continued to apply to pre-existing leases.  This is because lessees who entered into pre-existing leases would have likely negotiated rental on the basis that the lessor would be prohibited from directly passing on the cost of land tax to the lessee.

When the Land Tax Act replaced the 1915 LTA on 30 June 2010, it was the intended policy of Government to preserve the prohibition for preexisting leases, and it was assumed that a transitional provision in the Land Tax Act and savings provisions in the Acts Interpretation Act 1954 achieved this. However, on 6 September 2016, the Queensland Supreme Court of Appeal in Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225 (Vikpro) held that these provisions did not have the effect of continuing the prohibition under the Land Tax Act, and that the Land Tax Act had repealed the prohibition.

This has an unintended impact upon preexisting leases, as, from 30 June 2010, lessors can enforce lease provisions that require lessees to pay the cost of land tax imposed. Many individual businesses would have negotiated base rentals and rental reviews in preexisting leases on the understanding that they would not have to directly pay the lessor any land tax as a result of the prohibition. The cost of land tax therefore would generally have been factored into the rental. The Vikpro decision effectively allows lessors to recoup land tax twice by retrospectively recovering the cost of land tax imposed since 30 June 2010, resulting in a windfall gain to lessors at the detriment of lessees.

The Vikpro decision does not affect residential leases under the Residential Tenancies and Rooming Accommodation Act 2008 and retail shop leases under the Retail Shop Leases Act 1994, where lessors continue to be prohibited from directly passing on the cost of land tax to lessees.

In order to reinstate the intended position, it is proposed to amend the Land Tax Act to restore the prohibition retrospectively from 30 June 2010, the date the Land Tax Act commenced and the date the Court of Appeal held the prohibition was repealed.  Despite retrospective application, it is proposed to maintain the rights of any lessor who has already recovered the cost of land tax in reliance of the Vikpro decision (including the lessor in Vikpro).  Accordingly, in such cases, the lessee will be barred from seeking restitution of the amount paid, solely on the basis the prohibition has been retrospectively restored by the amendments. However, the lessee’s rights to challenge the recovery of the cost of land tax on other grounds, such as the amount of land tax collected, will be maintained.”[5]

  1. [13]
    Later, the Explanatory Notes addressed issues of retrospectivity:

“Retrospective amendment is considered necessary and appropriate to fully restore the Government’s intention that the prohibition on lessors directly passing on the cost of land tax to lessees under commercial leases entered into after 1 January 1992 and before 30 June 2009, continue under the Land Tax Act, in order to maintain the protection for lessees under pre-existing leases.  It is considered that this position was commonly accepted by lessors and lessees of pre-existing leases, who continued to act on that basis, until the Vikpro decision.

It is not proposed to undo any circumstance in which a lessor has successfully recovered the cost of land tax in reliance of the Vikpro decision, regardless of the method of recovery (e.g. whether under the provisions of the lease or through court proceedings). For example, if a court has made an order requiring a lessee to pay land tax in relation to a lease, the proposed amendment will not affect the enforceability of the order or the lessor’s right to enforce the order. Allowing existing court orders to continue to be enforced ameliorates the retrospective operation of the amendment and ensures that the interests of these lessors will not be adversely affected by the proposed amendment. The proposed amendment will, however, apply to existing court proceedings.”[6]

The issues

  1. [14]
    Two substantial issues arise.  The first is the proper construction of the declaratory order made on 7 August 2015.  The second is whether that declaration was an order to which s 100(4) applies and, if so, what consequences flow from that.

The proper construction of the declaration of 7 August 2015

  1. [15]
    Does the declaration, upon its proper construction, purport to declare the rights and obligations of the parties with respect to liability to pay land tax under a future law?

Declaratory relief

  1. [16]
    The remedy of a declaration of right is ordinarily granted as final relief, and is intended “to state the rights of the parties with respect to a particular matter with precision, in a binding way.”[7]  As an incident of the exercise of judicial power, the granting of declaratory relief involves “an inquiry concerning the law as it is and the facts as they are.”[8]  A declaratory judgment is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs.[9]  A declaratory judgment does not create rights.  It is unlike a “constituitive or investive judgment, which changes rights and creates a new right in the successful party”.[10]  It is not a judgment which is “followed by any process by way of execution.”[11]  As Young states:

“The enforceability of a declaratory order is the weak spot in its armour, as there is no sanction built into declaratory relief”.

  1. [17]
    A party may seek only a declaratory order.[12]  Often a proceeding seeking a declaratory order seeks “further or other relief”, or other specific relief that is ancillary to the declaration.  In some cases, this results in ancillary relief being granted, for example, an order that the respondent is obliged to do something, or refrain from doing something, or to pay a certain sum to the applicant.  However, such relief often is not sought or granted, and the Court simply makes a declaratory order, presuming that once a declaration of entitlement is made, it will be honoured.[13]  In Royal Insurance Co Ltd v Mylius,[14] Isaacs J stated:

“Every order for declaration of right carries with it liberty to apply, and, if the defendant acts contrary to it, the Court on a proper application and on proper notice may enforce it.”

  1. [18]
    It is unnecessary for present purposes to consider the scope to apply for ancillary orders to enforce the rights declared by a declaratory judgment.  The key point is that a declaration of right is not enforced without further order.  It differs from a judgment which is enforced by a process of execution.
  2. [19]
    As the name suggests, a declaratory judgment declares the existing rights and obligations of the parties according to the law as it is and the facts as they are.  Declaratory relief is directed to the determination of legal controversies about the rights and obligations of parties under the law as it is, not hypothetical questions about what their rights and obligations might be under a future law.

The declaration made on 7 August 2015

  1. [20]
    The declaration was a conventional exercise of the judicial power to declare the rights and obligations of the parties with respect to a particular matter, in this case their rights and obligations with respect to the payment of land tax under the registered sub-lease according to the law as it stood at the time the declaration quelled that controversy.  The controversy turned on the interpretation of statutes, namely the 1915 Act, the 2010 Act and their transitional provisions, and s 20 of the Acts Interpretation Act, particularly whether the bar on enforceability contained in s 44A of the 1915 Act had been preserved. 
  2. [21]
    Resolution of those issues of statutory interpretation had utility.  The declaratory judgment declared the rights and obligations of the parties with respect to the matter in dispute, namely whether the obligation to pay land tax under cl 11.2 of the lease was enforceable under the law as it stood.  The declaration therefore determined the rights and obligations of the parties for so long as that law had been and for so long as it continued.  It remained open to the parties to change their rights and obligations.  Similarly, their rights and obligations might change when certain facts changed, for example, if the lease was terminated.  No-one would sensibly interpret the declaration as continuing to apply so as to render Vikpro liable to pay land tax levied on Wyuna pursuant to cl 11.2 of the lease if the lease was terminated.
  3. [22]
    The declaration of 7 August 2015 declared existing rights and obligations according to the law as it stood at the time the declaration was made.  The declaration did not purport to declare what the parties’ rights and obligations would be forever and notwithstanding changes to the law.  For example, it was not purporting to state the rights and obligations of the parties with respect to the payment of land tax under the lease if the Parliament chose to enact that the bar of enforcement applied with effect from a certain date.  One would not take a declaratory order of the kind made to be stating rights and obligations under a future law because declaratory orders are made with respect to the current state of the law, not future hypothetical laws.  Apart from anything else, it would be an extraordinary exercise of judicial power to immunise the rights and obligations of parties from the law of the land, as passed by Parliament.  Justice Dalton was not invited to make a declaratory order in such extraordinary terms.  Therefore, the declaration made on 7 August 2015 should be construed as a statement of the rights and obligations according to the law as it stood at the time the declaration was made.
  4. [23]
    The declaration might have been prefaced with words such as “Upon the proper construction of the Land Tax Act 1915 (Qld), as amended by the Revenue and Other Legislation Amendment Act 2009, the Land Tax Act 2010 (Qld) and the Acts Interpretation Act 1954 (Qld), it is declared …”   However, the fact that the declaration was the result of the construction of those statutes was implicit.
  5. [24]
    The conclusion at [19] and [20] of the reasons delivered on 7 August 2015 that the effect of the 2010 Act was to bring an end to the statutory bar on enforceability was about the effect of the 2010 Act, not a future law which might restore the bar, and do so with retrospective effect.  Therefore, the declaratory judgment does not operate to define the rights and obligations of the parties with respect to the legal liability of Vikpro under a future law to pay land tax levied on the land the subject of the lease.
  6. [25]
    Wyuna’s submissions note that the form of declaration might simply have been as to the effect of the legislation, for example, a declaration that the effect of the 2010 Act was to remove the prohibition upon enforcing cl 11.2 of the lease.  However, for good reason and so as to address the question of forgiveness of liability for the financial years ended 2011 and 2012, the declaration was cast in terms of a liability to pay from 1 July 2012.  The terms of the order were:

“Declare that from 1 July 2012 the respondent is liable to pay land tax levied on the applicant in respect of the land the subject of registered sub-lease No 710320129.”

Properly construed and having regard to the nature of declaratory orders, the declaration was a statement of Vikpro’s obligation to pay Wyuna under the law as it stood, not under a future law. 

Consequences of the declaration

  1. [26]
    The declaration did not speak only to the past.  It spoke to the rights and obligations of the parties after 7 August 2015 for so long as the law governing their relations and the subject matter of the declaration remained the same.  As a result, for so long as the law and the terms of the lease remained unchanged, Wyuna could rely on the declaration as being a statement of the legal rights of the parties with respect to the payment of land tax under cl 11.2 of the lease.  It was open to Wyuna to take steps to enforce those rights, for instance, by bringing a money claim if amounts which Vikpro was liable to pay were not paid, or possibly by seeking an ancillary order in the original proceeding in accordance with the mechanism discussed by Isaac J in the Royal Insurance case.  However, the declaratory order was not self-enforcing. 
  2. [27]
    Properly construed, the declaration made on 7 August 2015 operated with respect to a particular matter, namely the rights and obligations of the parties having regard to the effect of the 2010 Act, but not their rights and obligations as governed by a future law.  The law changed on 22 June 2017.  After that, the declaration did not state the rights and obligations of the parties with respect to a different subject matter, namely their rights and obligations under the law, as amended.
  3. [28]
    As noted, s 100(1) restores the bar on enforceability which this Court held the 2010 Act had removed, and the bar is taken to have had effect on and from 30 June 2010.  Subject to consideration of the operation of s 100(4), this means that Vikpro’s obligation under cl 11.2 of the lease to pay land tax levied on Wyuna in respect of the land the subject of the registered sub-lease is unenforceable, and Wyuna’s application for an order that Vikpro pay land tax in respect of the 2018 year should be dismissed.
  4. [29]
    Wyuna submits that this is not a case where it can be said that its application seeks to enforce the obligation to pay land tax imposed by cl 11.2, since that has already been done by the declaration of 7 August 2015 which declared that Vikpro was liable to pay.  Its application seeking a money order is described as ancillary to the declaratory order made on 7 August 2015.  However, to characterise Wyuna’s application as one to enforce the declaratory order, rather than the provision of the lease itself, directs attention to the subject matter of the declaratory order and its terms.  Having regard to the nature of a declaratory order and the particular matter which was in controversy between the parties in 2015, the declaratory order was with respect to the rights and obligations of the parties under the law as it then stood, not under a future law.  The future law, in the form of the 2017 Amendments, purports to alter the rights and obligations by restoring the statutory bar in s 83A from 30 June 2010.  Whilst the declaratory order of 7 August 2015 declared the rights and obligations of the parties according to the law as it stood at the time, the 2017 Amendments now govern their rights and obligations, and have done so since 22 June 2017. 

The proper interpretation of the 2017 Amendments

  1. [30]
    The 2017 Amendments do not wholly reverse the effect of the Vikpro decision.  As noted, despite s 83A being taken to have had effect on and from 30 June 2010, s 100(2) has the effect that a lessee who has paid an amount for land tax to which s 83A applies before the commencement of the amendment is not entitled to recover that amount.  Section 100(4) also confers a benefit upon a lessor in certain circumstances.  It applies if, at the date of the 2017 Amendments, a court has made an order requiring a lessee of a lease to which s 83A applies to pay land tax in relation to the lease.  In such an event, despite s 100(1), the lessor may enforce the order.
  2. [31]
    Wyuna submits that the declaratory order of 7 August 2015 qualifies as such an order.  In response, Vikpro submits:
  1. (1)
    That “order” in s 100(4) is not directed to declarations made prior to 22 June 2017, but merely to executory orders.
  1. (2)
    The extrinsic material confirms that the legislature did not intend to capture the judgment of 7 August 2015.
  1. (3)
    The order of 7 August 2015 was simply a declaration, and not a judgment which by an order required Vikpro to pay land tax.
  1. (4)
    In any event, once the law changed on 22 June 2017, the declaration did not endure and ceased to be a pronouncement of the legal state of affairs of the parties.

The meaning of “order”

  1. [32]
    Vikpro submits that “order” when used in s 100(4) is not directed to declarations, but merely executory orders.  I doubt whether in using the ordinary word “order” the Parliament was concerned about such distinctions.  The word should be given its ordinary meaning and the kind of declaratory judgment made on 7 August 2015 is an “order”.  The real issue is not whether it is an “order”, but whether it is an order requiring Vikpro to pay land tax in relation to the lease.  I return to this issue in considering Vikpro’s third argument.

Vikpro’s second argument

  1. [33]
    Vikpro’s second argument is without merit.  It relies on a strained interpretation of the extrinsic material so as to suggest that s 100(4) was intended to protect recoveries in court proceedings which relied on the Court of Appeal judgment.  Such an interpretation is inconsistent with the terms of s 100(4) which makes no such distinction between the order which Wyuna obtained and orders obtained by other lessors who obtained orders in reliance on its success in the previous proceeding.  In any event, the extrinsic material makes no distinction between Wyuna and other lessors.

Does the declaration of 7 August 2015 require Vikpro to pay land tax?

  1. [34]
    Vikpro is correct that the order of 7 August 2015 “was declaratory and did not order the payment of any money”.  The distinction drawn between a declaratory order and an executory order which requires a party to pay money, or the distinction drawn between a declaration of right and an ancillary order in aid of it requiring the payment of money, favours Vikpro’s argument that the declaration of 7 August 2015 is not an order “requiring” it to pay land tax in relation to the lease.  It is simply a declaration that it is liable to pay land tax levied on Wyuna in respect of the relevant land.  Notwithstanding these arguments, I am inclined to adopt an interpretation of s 100(4) which is consistent with its purpose.  The extrinsic material does not illuminate the present issue as to the kind of orders which Parliament intended to capture in s 100(4).  Instead, page 8 of the Explanatory Notes indicate that it did not intend to undo any circumstances in which a lessor had successfully recovered land tax, for example, through court proceedings.  The Explanatory Notes stated that allowing existing court orders to continue to be enforced “ameliorates the retrospective operation of the amendment and ensures that the interests of these lessors will not be adversely affected by the proposed amendment.”
  2. [35]
    Adopting a purposive approach to the interpretation of s 100(4), I doubt whether the Parliament intended to make a distinction between a lessor who had obtained an order in the form of a declaration to the effect that the lessee was required to pay land tax (and who assumed or was assured that the declaration would be honoured by the lessee without the need to obtain an ancillary order for payment) and a lessor who obtained both a declaratory order that the lessee was required to pay land tax and an ancillary order which actually required payment.  The Parliament probably intended to have regard to substance over form and to accord some protection to a lessor who had obtained a court order which, in effect, required payment.  A lessee who is prepared to abide by a declaration may not wish to have a money order made against it, since such an order may be misinterpreted as reflecting on its honouring of obligations or its solvency.  It would be unreasonable to interpret s 100(4) as disadvantaging lessors who obtained a court order in their favour and who expected a lessee to pay in accordance with the order, without the need for an additional, ancillary order for payment.  Nothing in the legislation suggests that such a distinction is necessary in order to advance the purpose of the statute. 
  3. [36]
    The declaration of 7 August 2015 did not in terms “require” Vikpro to pay land tax, as distinct from declaring it liable to do so, and assuming that Vikpro would honour the Court’s declaration of Wyuna’s entitlement to be paid without the need to make an ancillary money order.  In the circumstances, the order of 7 August 2015 should be interpreted as, in effect, requiring payment in accordance with the rights it declared. 
  4. [37]
    While the law in relation to declaratory orders makes an important distinction between an order in the form of a bare declaration and an order which, in addition, orders a party to do something so as to enforce the rights so declared, the terms of s 100(4) should be interpreted so as to advance its purpose and to capture court orders which, in substance and effect, require a lessee to pay land tax.  The order of 7 August 2015 is such an order.

What rights does the 7 August 2015 order declare which are capable of enforcement?

  1. [38]
    If the declaratory order is one to which s 100(4) applies according to an interpretation which characterises the order according to its substance rather than form, the right which s 100(4)(a) gives the lessor is one to “enforce the order”.  This returns one to the subject matter of the order and the rights which, upon its proper construction, it declared.  For the reasons given in relation to the proper construction of the declaration of 7 August 2015, it did not declare rights and obligations which might exist under a future law.  It had a potential, future operation and allowed Wyuna, by an ancillary order or a money judgment in another proceeding, to enforce at some future date the rights which it declared.  As a result, if Vikpro did not pay land tax it was liable to pay after 1 July 2012 then Wyuna might enforce the declaratory order.  As matters transpired, it was not required to do because Vikpro made payments in subsequent years including in respect of land tax for the 2017 year. 
  2. [39]
    Any obligation to pay land tax after new laws came into operation is, as it were, a different matter, and not one governed by the declaration of 7 August 2015.  The rights and obligations of the parties in respect of land tax levied on Wyuna in respect of the land after 22 June 2017 is not the subject matter of the declaration which was made which, upon its proper construction, declared the rights and obligations of the parties according to the law as it then stood, not according to a hypothetical future law.  Because the 7 August 2015 declaration, properly construed, did not declare the rights and obligations of the parties after the law changed on 22 June 2017, the declaration was not able to be enforced by an ancillary order in respect of land tax levied on Wyuna after 22 June 2017. 

Conclusion – the application of s 100(4)

  1. [40]
    If, on a proper interpretation of s 100(4), the declaration of 7 August 2015 is an order for the purposes of s 100(4) which requires Vikpro to pay land tax in relation to the lease, one is left to identify the rights which were declared by that order and which are capable of being enforced by enforcing that order.  For the reasons given, the rights which were declared under that order were rights concerning the law as it was, not rights under a future law. 
  2. [41]
    Expressed differently, under s 100(4)(a), Vikpro was only able to enforce the rights which the court order declared.  The Court did not purport to declare rights under a future law, including a future law which had retrospective effect.  Wyuna is still entitled to enforce the rights declared by the 2015 order.  However, after 22 June 2017, the rights and obligations of the parties were governed by legislation which included the 2017 Amendments. 
  3. [42]
    In the events which have happened, the order of 7 August 2015, properly construed, does not declare the rights of the parties after 22 June 2017.  The subject matter of the declaration was Vikpro’s liability to pay under law as it then stood.  As a result of the 2017 Amendments, and subject to ss 100(2) and (4), Vikpro enjoys the benefit of the bar on enforceability provided by s 83A.  Section 100(4) does not entitle Wyuna to enforce rights which were not the subject matter of the declaration made on 7 August 2015. 

Wyuna’s argument that Parliament did not wish to deprive it of the benefit of its judgment

  1. [43]
    Wyuna submits that the Explanatory Notes reveal that, in making the 2017 Amendments, Parliament did not wish to deprive it of the benefit of its judgment.  In my view, this submission is misplaced.  The extent to which Parliament wished to deprive Wyuna and other lessors of the benefit of the “Vikpro decision” is to be found in the terms of s 100.  This section clearly deprives Wyuna and other lessors of the benefit of the interpretation adopted by this Court.  Subject to the protections given by ss 100(2) and (4), lessors, including Wyuna, were deprived of the benefit of the Court’s decision in respect of the recovery of land tax which had been levied prior to the 2017 Amendments, but not recovered or subject to a court order as at the time of the 2017 Amendments.  The 2017 Amendments deprive Wyuna of the benefit of the Court’s judgment to a substantial extent, whilst allowing it and other lessors to keep amounts which had been recovered and entitling it and other lessors to enforce certain court orders.

Conclusion

  1. [44]
    The judgment of 7 August 2015 concerned the interpretation of the 2010 Act and declared the rights and obligations of the parties under that law.  It was not a judgment which declared the rights and obligations of the parties for all time, and irrespective of future amendments to the 2010 Act. 
  2. [45]
    Section 100(4) does not avail Wyuna.  If for the purposes of s 100 one treats the declaration of 7 August 2015 as an order “requiring” the payment of land tax, s 100(4)(a) permits enforcement of that order.  No question arises as to enforcing an order with respect to rights and obligations which the declaratory order did not purport to declare.  The rights and obligations of Wyuna and Vikpro in relation to land tax levied on Wyuna in respect of the land the subject of the registered sub-lease are governed by the current law, not the law which this Court considered and construed in making the declaratory order on 7 August 2015.

Disposition

  1. [46]
    Subject to hearing the parties as to the form of order, it seems appropriate to declare that the lease is a lease to which s 83A applies. 
  2. [47]
    Because of the view I have taken concerning the proper construction of the declaration made on 7 August 2015, and the proper interpretation of s 100(4), I do not consider it is appropriate to make a declaration of the kind sought in paragraph 2 of Vikpro’s application.  Instead, it would be open to declare that upon the proper construction of:
  1. (a)
    the declaration made on 7 August 2015 and
  1. (b)
    the 2017 Amendments

Vikpro is not liable to pay land tax levied on Wyuna in respect of the land the subject of registered sub-lease No 710320129.

  1. [48]
    Wyuna’s cross-application, filed by leave, to recover land tax in respect of the 2018 year should be dismissed.
  2. [49]
    Vikpro has enjoyed substantial success both in respect of its application and in opposing Wyuna’s cross-application.  Subject to any submissions as to costs, I would propose to order that Wyuna pay Vikpro’s costs of and incidental to both applications to be assessed on the standard basis.

Footnotes

[1]Wyuna Court Pty Ltd v Vikpro Pty Ltd [2015] QSC 216 at [20].

[2]  [2015] QSC 216.

[3]  [2016] QCA 225.

[4]  [2015] QSC 216 at [8].

[5]  Explanatory Notes to the Revenue Legislation Amendment Bill 2017 (Qld), pp 5-6.

[6]  Ibid p 8.

[7] Warramunda Village Inc v Pryde (2001) 105 FCR 437 at 440 [8]; [2001] FCA 61 at [8].

[8] The Queen v The Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374.

[9]  Zamir and Woolf, The Declaratory Judgment (3rd edition) at [1.02].

[10]  P W Young QC, Declaratory Orders (Butterworths, 2nd edition) at [201].

[11]  Ibid.

[12] Civil Proceedings Act 2011 (Qld) s 10.

[13] Franklin v The Queen (No 2) [1974] QB 205 at 218.

[14]  (1926) 38 CLR 477 at 497.

Close

Editorial Notes

  • Published Case Name:

    Vikpro Pty Ltd v Wyuna Court Pty Ltd ATF Wyuna Court Unit Trust

  • Shortened Case Name:

    Vikpro Pty Ltd v Wyuna Court Pty Ltd

  • MNC:

    [2018] QSC 160

  • Court:

    QSC

  • Judge(s):

    Applegarth J

  • Date:

    19 Jul 2018

  • Selected for Reporting:

    Editor's Note

Litigation History

Event Citation or File Date Notes
Primary Judgment [2018] QSC 160 19 Jul 2018 (Subject to formal order submitted by the parties) applicant as sub-lessee is not liable to pay land tax levied on the sub-leased land; respondent's cross-application dismissed: Applegarth J.

Appeal Status

No Status