In this matter, Applegarth J considered amendments in 2017 to the Land Tax Act 2010 which re-introduced a bar on the enforceability of provisions in leases requiring a lessee pay land tax such provisions, subject to an exception where a court had made an order requiring a lessee of a lease to pay land tax. At issue was whether a declaration made in relation to the pre-2017 amendment provisions that the applicant was liable to pay the respondent land tax was an order to which this exception applied. Applegarth J held that the declaration could be such an order, but that the declaration did not apply to any obligation to pay land tax after any new laws came into operation. Accordingly, the lessee enjoyed the benefit of the bar on enforceability for the period after the 2017 amendments came into effect.
19 July 2018
The applicant in this matter, Vikpro, leased premises from the respondent, Wyuna, under a lease that commenced on 1 July 2006. . The central issue in the dispute was whether Vikpro was obliged to pay land tax levied on Wyuna in respect of the land the subject of the lease on the basis of cl 11.2 of the lease which purported to have this effect. . An amount of $53,173.89 was levied by the State for the period from 1 July 2017 to 30 June 2018. .
The legislative history to the dispute was as follows. In 1991, s 44A was inserted into the Land Tax Act 1915. . It provided that a lease entered into after 1 January 1992 which required a lessee to pay land tax or reimburse the lessor for land tax was unenforceable. . In 2009, this section was repealed by the Revenue and Other Legislation Amendment Act 2009. . However, the transitional provisions meant that the relevant clause in the lease in this case remained unenforceable. . In 2010 a new Land Tax Act was passed (the “2010 Act”). . In earlier proceedings, Dalton J had concluded that the effect of the 2010 Act was to remove the bar on enforceability of cl 11.2 of the lease. Her Honour had made a declaration to that effect in the following terms:
“Declare that from 1 July 2012 [Vikpro] is liable to pay land tax levied on [Wyuna] in respect of the land the subject of registered sub-lease No 710320129.” (the “declaratory order”). , .
In 2017, the Revenue Legislation Amendment Act 2017, in effect, restored the bar on enforceability. Section 83A of the 2010 Act now provides:
“A provision in the lease requiring a lessee to pay land tax, or reimburse the lessor for land tax, is unenforceable.”
Section 100 of the 2010 Act provides that s 83 is taken to have had effect on and from 30 June 2010. .
However, by sub-section (4), s 83 provides:
“[I]f 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–
(a) despite subsection (1), the lessor may enforce the order; and
(b) section 83A does not affect the enforceability of the order.” .
Applegarth J stated that two questions arose in this application. First, the proper construction of the declaratory order made by Dalton J. Secondly, whether that declaration was an order to which s 100(4) applied. .
As for the first issue, Applegarth J determined that 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”. . Properly construed, therefore, “the declaration was a statement of Vikpro’s obligation to pay Wyuna under the law as it stood, not under a future law.” . As s 100(1) restored the bar on enforceability, which the Supreme Court held had been removed, this meant that Vikpro’s obligation under cl 11.2 of the lease to pay land tax was unenforceable. .
This was, however, subject to the operation of s 100(4), which led Applegarth J to consider the second issue. As for this issue, Wyuna had submitted that “order” in s 100(4) was not directed to declarations but merely to executory orders. . Applegarth J doubted “whether in using the ordinary word ‘order’ the Parliament was concerned about such distinctions”. . His Honour also considered that "the order of 7 August 2015 should be interpreted as, in effect, requiring payment in accordance with the rights it declared”. .
His Honour said:
“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.” 
However, Applegarth J held that “[a]ny 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” (emphasis added). . As such, “[t]he rights and obligations of the parties in respect of land tax levied on Wyuna in respect of the land after 22 June 2017 [was] not the subject matter of the declaration”. . Accordingly, s 100(4) could not apply to the tax levied for the period from 1 July 2017 to 30 June 2018 and as a result, Vikpro enjoyed the benefit of the bar on enforceability provided by s 83A of the 2010 Act. .