Background
This matter concerns the land tax payable for the 2015 to 2017 land tax years (the relevant period) in respect of properties in Wyndham Vale (the land) owned by taxpayer as trustee for the Bozzo Family Trust and whether the requirements of section 67 of the Land Tax Act 2005 (Vic) (the Land Tax Act) were satisfied. That is:
- Whether the principal business of the taxpayer at the relevant times was primary production of the type carried on on the land, and
- Whether Mario Bozzo (a director of the taxpayer) was at the relevant times normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the land (asserted to be cultivation of canola, wheat and barley).
Decision
On the 14 July 2021 Justice Garde delivered judgment in favour of the Commissioner, finding that he was not satisfied that the taxpayer had discharged its onus of proof in relation to the requirements of the exemptions set out in sections 67(2)(d)(i) and 67(2)(d)(iii)(A) of the Land Tax Act for the relevant period.
“Given Mario’s directorships and all of his other responsibilities, it is difficult to see how the appellant can satisfy the statutory requirement. While the cultivation of crops for sale was a significant business on which Mario worked, it was only one of the appellant’s significant businesses. As I have found, by 31 December 2014, residential subdivision was a burgeoning business which was, or shortly thereafter became the appellant’s most important business.” [217].
“The livestock businesses including the grazing of cattle, the breeding of sheep, and the production of wool were also important primary production businesses carried on by the appellant…” [218].
“… Thus, while it is clear that Mario ‘regularly participated’ in the business of the cultivation of crops for sale, it has not been established that this was, in the language of Damon [Damon v Commissioner of Land Tax (1985) 17 ATR 278, 281], ‘for a considerable part’ of Mario’s time having regard to his time commitments to the other business and his director’s duties.”
As a result, the Court held that it was not satisfied that the taxpayer had shown on the balance of probabilities that the principal business of the taxpayer was of the requisite type and its director Mario was normally engaged in a substantially full-time capacity in the business of the cultivation of crops for sale, as asserted. The assessments were therefore upheld.
