Ryde Municipal Council v Macquarie University
139 CLR 633(Judgment by: Stephen J)
Ryde Municipal Council v Macquarie University
Court:
Judges:
Gibbs ACJ
Stephen JJacobs J
Murphy J
Aicken J
Judgment date: 19 December 1978
Sydney
Judgment by:
Stephen J
STEPHEN J. Near the centre of the campus of Macquarie University stands the "market", a two storeyed building of some size which houses two banks, a bookshop, a travel centre, a retail store and associated storeroom, a handicrafts gift shop, a hairdresser's shop and premises of the University Sports Association, which itself includes a small retail shop.
The local Council seeks to rate the site of this building: the University claims exemption from rates upon two grounds. The only ground which I need consider is that provided by s. 132 (1) (fii) of the Local Government Act, 1919 (NSW), which exempts "land which is vested in the Macquarie University or in a college thereof, and is used or occupied by the University or college, as the case may be, solely for the purposes thereof". This particular exemption was inserted in the Local Government Act by a provision of the Macquarie University Act, 1964 (NSW), which was the legislation by means of which this University was established.
The site of the market is vested in but is not occupied by the University: instead it is the various tenants who conduct their respective businesses at the market who are the occupiers. The market has nothing to do with any college of the University. Accordingly, if this ground of exemption is to be applicable, it must be because the market is "used by the University solely for the purposes thereof", within the meaning of s. 132 (1) (fii). This phrase, distilled from the text of par. (fii), contains no terms of art. I shall first seek to determine its meaning according to the ordinary usage of its words and how that meaning bears upon the present facts, doing this without reference to authority. I shall then turn to the authorities to see whether they require that any conclusion different from that suggested by ordinary meaning should be reached.
It is convenient to begin with the word "solely". Does this refer to "University" or, rather, to "used . . . for the purposes thereof": must land be used solely by the University or is it its use which must be solely for University purposes? Positioned as it is immediately before the words "for the purposes thereof", "solely" must, I think, be concerned with the particular use rather than the particular user, with exclusiveness of use for University purposes and not with exclusive use by the University. This is certainly the effect which the particular sequence of the words in the phrase has upon its meaning. With it may be contrasted a phrase containing the same words but in different sequence - "used solely by the University for the purposes thereof". Had that been the wording of the phrase, "solely" would clearly enough have qualified "the University", the user and not the use. As it is in fact worded, the contrary is the case.
This conclusion is supported by an examination of the wording of the remaining exemptions in s. 132 (1). There are in all eighteen of them. Of these, the last six, from (g) to (1), may be put to one side, each is concerned with a quite special case, and hence conform to no particular pattern; the remaining twelve, of which par. (fii) is one, are, however, cast in similar moulds. In each the body in which land is vested is first stated and there follows a description of a particular use, or use or occupation, to which the land must be subject. This description of use is either explicit, for example, "for a public cemetery", or is by reference to the purposes of the owner, as it is in par. (fii), in which case, after identifying the owner, for example, Macquarie University, reference is made to use or occupation by that owner "solely" for the purposes thereof". Where the description of use is explicit the word "solely" never appears: "solely" is employed only where the relevant use is described by reference to the purposes of the owner; even in par. (e), where the pattern of drafting is slightly different, this holds true. This fact, that the presence of "solely" in an exemption is coincident with the employment of the owner's purposes as descriptive of the use to which the land must be put, emphasizes the relationship between "solely" and the use in question and the lack of relationship between "solely" and the particular user.
A second and more difficult question of construction concerns the exact meaning of "used by the University". Again a study of the first twelve paragraphs of s. 132 (1) is helpful: wherever the context is such as of itself to point to some particular meaning of "used", it is the meaning of land being made available by its owner for use for a particular purpose, rather than any active personal use by the owner itself, that is conveyed. The exemptions which refer to uses "for a public cemetery" in par. (a), "for a common" in par. (b), "for a public reserve" in par. (c) or "for the purposes of a free public library" in par. (e) illustrate this. The fact that these four exemptions, unlike the other eight, contain an explicit description of the relevant use, instead of simply referring to use "for the purposes" of the specified owner, does not, I think, suggest the adoption of any different meaning of "used" in the case of the other eight paragraphs and the very descriptions of those who may be owners of exempted lands, as appearing in the latter eight paragraphs, themselves suggest that "used" has there such a meaning. It seems a particularly appropriate meaning to apply to the use of land for the purposes of the five tertiary educational institutions referred to in pars (f) to (fiv), whose principal use of land must involve the provision of facilities in which others, the student body, may undertake their tertiary studies.
This distinction that I have sought to draw, between active, personal use of the land by the owner of it and its use by being made available for use by others for a particular purpose, may in any event involve unnecessary refinement of meaning in the present case. By s. 4 (2) of the Macquarie University Act, 1964 the University is incorporated and s. 4 (1) describes the University as "consisting of a Council and Convocation and graduate and undergraduate members". Thus if undergraduates, to whom the University makes land available for their use, are in consequence the active users of that land, this use of it by them will constitute its active, personal use by the University, of which they are a constituent part.
The remaining component of the phrase "used by the University solely for the purposes thereof" consists of its last four words. The identity of that which is comprised in the "purposes" of the University, in the present context of use or occupation of land, is not, I think, to be found in whatever may, in the case of this University, be thought to correspond, however imperfectly, to the objects clause of a company's memorandum of association. It is as unnecessary in this case, as it was in Kathleen Investments (Australia) Ltd. v. Australian Atomic Energy Commission (1978) 139 CLR at p 117 , to examine what distinctions exist between the restraints imposed upon a company by its objects clause and those which affect a statutory corporation because of the limited powers conferred upon it by its constituting Act: the theory and purposes of each are quite different. It is enough for present purposes to conclude that, in determining the "purposes" of this university to which s. 132 (1) (fii) refers, inquiry should not be restricted to the first limb of the function - power dichotomy familiar in the case of entities incorporated by Act of Parliament and of which Macquarie University furnishes an instance.
Section 6 of the Macquarie University Act, 1964 provides that "the function of the University shall, within the limits of its resources, include" the matters set out in three following paragraphs. It is noteworthy that, as the use of "include" in its opening words makes clear, s. 6 does not, in contrast to a company's objects clause, purport to be any exclusive repository; the reference to "the limits of its resources" may also be noted. Of the three paragraphs of s. 6 only the first and third are relevant:
"(a) the provision of educational facilities at University standards for persons who being eligible to enrol seek the benefits of such facilities;
. . .
(c) the dissemination of knowledge and the promotion of scholarship otherwise than as hereinbefore provided."
Section 7 (b) provides that the University:
"(b) may, for the purpose of discharging its functions, provide such facilities for its undergraduates and students and other persons as it deems desirable."
Section 21 confers upon the council of the University a variety of specific powers and the scope of the by-law making power conferred by s. 23 itself indicates the broad reach which the University's functions and powers are intended to have; as, for example, in its grant of power to make by-laws for the establishment and conduct of residential colleges although no mention of the establishment of such colleges elsewhere appears in the Act.
In the present case the provision to students and staff, on the University campus, of those facilities which the market now offers is, in my view, a use of the site of the market "for the purposes" of the University within the meaning of par. (fii) of s. 132 (1): it falls within the specific terms of s. 7 (b) as a provision of such facilities for its undergraduates, for the purpose of discharging its functions, as the University deems desirable. To make good this proposition requires the application of par. (fii) to the facts of this case, a matter to which I now turn.
I have already briefly described the uses to which the market is now put; its history is recounted by the learned primary judge who heard much evidence about it. An area of the campus devoted to commercial, banking and shopping facilities was envisaged from the outset of planning of the University, its purpose being to avoid the need for staff and students to leave the campus in order to visit the nearest similar facilities, situated in suburbs over three kilometres away. The provision of such facilities on university campuses is now common both in Australia and overseas. The planning, development and, ultimately, the fulfilment of the concept represented by the present market building took place under the supervision of the University council. His Honour found that the council was fully entitled to conclude that the existence of these facilities would promote the objects and interests of the University and that in letting portions of the market to the various tenants who now occupy it the purpose was not the deriving of rental income but, rather, that the facilities which the conduct by them of their several businesses would afford might be made available to staff and students. It would, of course, have been astonishing if the fact had been otherwise: the use of university premises, no doubt erected at the public expense, for the purpose simply of deriving rental income is not lightly to be imputed to a university council.
It is to this complex of facts that the phrase "used by the University solely for the purposes thereof" must be applied. That the market and its site is in fact made available by the University for the purpose of providing commercial and shopping facilities for staff and students cannot be doubted; that represents the mode in which the land is "used" within the meaning of that word in par. (fii). This use of the land by the University is the sole use which it makes of it. The fact that it receives rent from the tenants of the market does not detract from the exclusiveness of this use: it is, in my view, and in the light of the above findings of fact, no more than an incident of this exclusive use. The facilities available at the market are just such "facilities for its undergraduates and students and other persons" (s. 7 (b)) as one might expect the council of a university established in recent years to regard as desirable for the purpose of "discharging its functions" and the fact is that the council of this University has indeed at all times been of this view. The site of the market is, accordingly, in my view, land which is used by the University solely for the purposes thereof within par. (fii) and is therefore exempt from municipal rates. The fact that rent is received from tenants is irrelevant, as is the fact that each of the several tenants may be said to make use of the particular portion of the market which is leased to it. This use is, like the receipt of rent by the University, no more than an incident of the use of the site for the provision of appropriate facilities to staff and students, which in turn is a proper purpose of the University.
It remains to see whether any authorities stand in the way either of my interpretation of the meaning of par. (fii) or of my mode of application of it to the facts of this case. First as to meaning: I take the components of the phrase "used by the University solely for the purposes thereof" in the same order as previously. "Solely" and its equivalents in comparable legislation have been the subject of much judicial commentary but for present purposes it is enough to refer to two cases only. In Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85 CLR 159 the question whether land was used "exclusively for charitable purposes" was in issue and it was held that the sale of produce grown at a training farm for delinquent boys in no way prejudiced the land's exemption from rates:
"it would be fantastic to hold that the land would not be ratable if the appellant destroyed or gave away the surplus products resulting from such trading that remained after satisfying the needs of the inmates but that it would be ratable if it disposed of such surplus at a profit and used that profit in aid of the revenues of the institution":
(per Dixon C.J. and Williams and Webb JJ. (1952) 85 CLR, at p 171 ). The commercial activity involved in the sale of produce was "merely incidental to the pursuit on the land of the charitable objects of the occupier" (1952) 85 CLR, at p 171 . So here the receipt of rents by the University is likewise incidental to the use of the Market for the purposes of the University. In the much cited judgment of Windeyer J. in Randwick Corporation v. Rutledge (1959) 102 CLR 54 , at p 93 , his Honour spoke of the use of "solely" and "exclusively" as familiar in rating law and as adding emphasis, its function being to exclude cases where land is used for purposes which are "collateral or independent, as distinct from incidental to the stipulated use" (1959) 102 CLR at p 94 . Applying this to the present case, there is, in my view, no element of collateral or independent purpose present in this case: the only use made of the market site by the University is in the provision of facilities to staff and students.
Then, as to the words "used by the University" for its purposes, it is a truism that "use" is not a word having any single, precise meaning. It is "a word of wide import and its meaning in any particular case will depend to a great extent upon the context in which it is employed" per Taylor J. in Newcastle City Council v. Royal Newcastle Hospital (1957) 96 CLR 493 , at p 515 . On appeal in that case (1959) 100 CLR 1 , at p 4; (1959) AC 248, at p 255 Lord Denning, speaking for their Lordships, equated use of land with the deriving by the user of an intended advantage from the land. Thus an owner might use land "by keeping it in its virgin state for his own special purposes". Here the advantage which the University intends to derive from the market is the furtherance of its purposes by the provision to staff and students of those facilities which the market now affords them. This is just such a use as par. (fii) contemplates. In the Randwick Corporation Case (1959) 102 CLR, at p 88 Windeyer J., speaking of "used" in s. 132 (1) (c), described it as referring "to the actual use to which the land is put by the persons who in law control it for the time being". There is, I think, no marked conflict between this meaning and the sense in which I have interpreted "used" in par. (fii), as meaning the particular use for which land is made available by its owner. In this regard the language of Pennycuick J. in Parker v. Ealing Borough Council [1960] 1 WLR 1398 is in point. His Lordship, concerned with an exemption in a rating statute for playing fields occupied for purposes of clubs, treated "for the purposes" as signifying "carrying on the activities of", a concept which I regard as akin to that which I have adopted in the meaning which I would give to the reference to use of this land by the University for its purposes.
There are a number of cases in which the letting of premises has been held to disqualify them from being regarded as "used" by their owner for particular purposes which would earn exemption from rates or land taxes. They are, however, cases in which the only connexion between the letting and the purposes of the owner has been the application to those purposes of the rent received from tenants. They provide a clear instance of a collateral or independent use of land such as was spoken of by Windeyer J. in the Randwick Corporation Case (1959) 102 CLR, at p 94 . The judgment of Sugerman J. in Young Men's Christian Association v. Sydney City Council (1954) 20 LGR (NSW) 35, at pp 44-45 , earlier in time that that of Windeyer J., offers a detailed analysis of the problem and clearly distinguishes between land uses which are no more than "concomitant, or ancillary or incidental" to purposes specified in s. 132 (1) and others which are "additional or collateral" thereto. His Honour said that the use of land by a charity, albeit involving the receipt of money or even of net profits, would not necessarily disqualify the land from rate exemption unless what was involved was "the pursuit of some merely additional or collateral non-charitable activity whose profits are applied in aid of the charitable purpose". Had the learned primary judge concluded that in the present case the University had erected the market and granted leases of it so as to earn income from it, in effect using its site as a rent-producing investment, it would have been of no avail that the rent received was applied to University purposes. Long-established authorities such as Commissioners of Taxation v. Trustees of St. Mark's Glebe (1902) AC 416 would stand in the way. However the judge's findings of fact are quite to the contrary and disclose a situation in which the receipt of rental income is no more than incidental to the pursuit of a purpose of the University.
In Waverley Municipal Council v. New South Wales Board of Jewish Education (1959) 5 LGRA 122 the leasing by a public charity of land owned by it to an employee to serve as his residence was held to exclude the land from exemption to rates under s. 132 (1) (h). It so operated because use as a residence was "merely additional or collateral to the purposes which characterize the Board as a public charity" (per Herron J. (1959) 5 LGRA, at pp 126-127 ). With the facts of that case may be contrasted the lettings in the present case, which are undertaken exclusively and directly in the course of providing facilities to staff and students. Many facilities on a University campus, from car parks to cafeterias, from cloakrooms to barber shops, can no doubt be conducted in different ways: they may be staffed by University servants; franchises may be given to entrepreneurs who staff those facilities, charging for their use and perhaps paying the University for the franchise; leases of the facilities may be granted to tenants. However it is done, the persons operating the facilities in a sense "use" them; certainly a franchise holder does so, having a licence to enter and use the premises in question so that he may provide the facilities in question to those who are to enjoy them. But these uses of University facilities, whether or not involving leases, are but incidental to and in no way detract from the exclusiveness of the use of the facilities by staff and students. On the contrary, they promote that use and may even be found to be essential to the full exercise of that use. They are not instances of "dual use" of land, as it is sometimes called; if an adjective were to be applied to them "subservient" might be appropriate since these uses, from their purpose and effect, subserve the primary uses to which the land is devoted. To say that a University cafeteria, whether franchised or leased to a catering firm, is any the less used "solely" for the provision of meals to students than it would be were it staffed by servants of the University seems to me to involve a distortion of language and to be no less "fantastic" in result than that which was so described in the passage from the Salvation Army Case (1952) 85 CLR 159 at p 171 which I have cited above. The facilities here in question include those afforded by banks, travel agents and retail general stores and it is scarcely conceivable that University servants should be employed in providing them. Yet their provision to staff and students may none the less be a proper purpose of a university whose campus is more or less remote from urban commercial development. Such is the situation at Macquarie University.
There is, in my view, nothing to be found in the authorities which runs counter to the view which I have formed as to the meaning of par. (fii) of s. 136 (1). Accordingly I conclude that the site of the Markets falls within that paragraph.
I would dismiss this appeal.