City of Newcastle
v Royal Newcastle Hospital

Judges: Williams J
Webb J
Fullagar J
Kitto J
Taylor J

Subject References:
Local government
Rating
Exemption from liability
Land of public hospital

Legislative References:
Local Government Act 1919 (NSW) - 132

Judgment date: 1 January 1957

Sydney

Judgment by:
Taylor J

TAYLOR J. In the action which has given rise to this appeal the appellant sued the respondent to recover municipal rates alleged to be payable by the latter, in respect of the years 1946 to 1952 inclusive, as the owner of some two hundred and ninety-one acres of land situated on the outskirts of Newcastle. The action failed ^[F34] and an appeal subsequently brought to the Full Court of the Supreme Court was dismissed ^[F35] . This appeal is brought from the order of dismissal.

The land in question is part of a larger area of three hundred and twenty-seven acres known as Rankin Park and upon the land, or part of it, is erected a number of buildings used by the respondent as a hospital and sanatorium for the treatment of tuberculosis. The main buildings, comprising Rankin Hall, the chest hospital and nurses' quarters, are erected towards the south-eastern boundaries of the land adjacent to Lookout Road and the land in the immediate vicinity of the buildings is laid out in lawns and gardens. The area so laid out is said to be seventeen and one-half acres in extent and this area is surrounded by a fence. Except for a short distance at its northern extremity the fence appears to consist of steel posts and wire strands. The residue of the land beyond the fence has been described as virgin country. It is still in its natural timbered state and it slopes away to the west. For some reason or other-and one explanation was suggested to us by counsel but this does not appear from the evidence-the appellant, whilst attempting to levy rates on approximately two hundred and ninety-one acres of this land has forborne to do so in respect of the remaining eighteen and one-half acres. The latter is in no way distinguishable from the balance of the unmade land; it is precisely of the same character though it is situated adjacent to the fence referred to and is, therefore, not as remote from the existing buildings.

The respondent is and at all material times was a public hospital within the meaning of s. 132 (1) (d) of the Local Government Act 1919 as amended and its answer to the appellant's claim is that the two hundred and ninety-one acres in question were at all material times used or occupied by it, being a public hospital, "for the purposes thereof".

The land which is now owned by the respondent was not acquired by it in one parcel. It purchased two parcels in 1926, aggregating ninety-two acres, and an additional area of four and one-half acres was purchased in 1934. The first purchase included an old home which apparently was, subsequently, used for the purposes of the respondent. In 1941, during the recent war, the area then owned by the respondent was taken over by the Commonwealth for the establishment of an emergency hospital. The Commonwealth retained control of the area until 1944 and at, or towards, the end of this period the possibility of the establishment of a hospital and sanatorium in this vicinity for the purpose of the treatment of tuberculosis appears to have come under consideration. At that time provision was made for the treatment of patients suffering from this disease at the respondent's main hospital, a large general institution situated in the City of Newcastle itself. The evidence of what was then done lacks a considerable amount of essential detail but it is plain enough that the project came up for consideration by the board of the hospital and by the Department of Public Health. About the middle of 1944 an inspection was made of the locality in which Rankin Park is now situated. This inspection was made by the president of the Hospital Board, who is now deceased, in company with Dr. Hughes, who was the Deputy Director of the Tuberculosis Division of the Department of Public Health, and Dr. McCaffrey, the superintendent of the hospital. Following this inspection, a further purchase of a small area was made by the respondent and, a few years later, the remaining portion of the present area, that is, two hundred and twenty acres, was resumed under the provisions of the Public Works Act 1912 "for the purposes of the Newcastle Hospital". This occurred on 10th April 1946 and the land so resumed is included in the two hundred and ninety-one acres in respect of which the appellant seeks to recover rates. Apparently, in anticipation of the resumption, work had already commenced on the construction of one or some of the buildings previously referred to with the result that one of the main buildings, Rankin House, was in a position to receive some patients in 1947. Some thirty patients were then received and within eighteen months the hospital was in a position to receive approximately another seventy. The precise times at which the chest hospital and the nurses' quarters were erected do not appear but it would be unreasonable to suppose that they were not erected in the course of carrying out a project envisaged in 1944 and, indeed, actually commenced during or very shortly after that year.

The question in these somewhat scantily proved circumstances is whether, during the relevant years, the respondent, being a public hospital, used or occupied the land in question for its purposes. For the appellant it is asserted that it did not and as I understand the argument two notions are involved. The appellant concedes that the enclosed land was so used and, ex gratia, is prepared to treat the additional eighteen and one-half acres previously referred to as if they were so used. But the balance of two hundred and ninety-one acres, it is asserted, is neither used nor occupied by the hospital. Up to this point the argument treats the whole of the land owned by the hospital as consisting of several parcels some of which it has occupied and used and one, including the last land acquired, as never having been used or occupied for any purpose. The boundary between the latter portion and the residue of the land is marked out by a series of white posts which were placed in the position by the appellant, to delineate thirty-six acres which had been valued separately by the Valuer-General and this may account for the somewhat arbitrary division between the land which the appellant considers rateable and the land which it does not.

The second notion involved in the appellant's argument appears to have been intended to anticipate, at the hearing, a claim by the respondent that the land in its entirety had been devoted to the establishment of the project in question. It is said, first of all, that the original project conceived the establishment, in addition to a hospital and sanatorium of a village settlement for the convalescence and regeneration of patients and, that in 1946 or shortly thereafter, recently devised forms of treatment rendered the establishment of such a settlement unnecessary. Evidence was given which indicated that new forms of treatment did tend to render obsolescent, in some cases at least, forms of after-treatment which, previously, had been more or less common and which could be effective only if administered over a long period of time. On this basis it was said that it became unnecessary for the hospital's purposes to occupy or use the whole of the land and that its continued retention of the land in question in no way served any such purpose.

Three observations should be made at once concerning these submissions. First of all, it may be said that, although the evidence is scanty it sufficiently appears that the project envisaged in 1944 and which, about that time, the respondent commenced to carry out involved a single, though comprehensive, purpose. But though it was a long term project capable of development only over a number of years it could in no sense be said that it comprised a series of projects to be carried out on several parcels of land. Secondly, although the contrary assertion was made in argument, the evidence does not show that the land in question was acquired or held for the establishment of a village settlement or that it was held, merely, to fulfil a future purpose which it was, for a time, contemplated that the land might serve. It may be that, originally, it was thought that some part of the land might be put to such a use but, even if this were so, I can find nothing to suggest that it was a material factor in determining the area which Dr. McCaffrey and Dr. Hughes appear to have thought desirable or necessary for the establishment of a sanatorium and hospital. Finally, it may be said that it is of little assistance to the appellant to assert that the acquisition of the whole of the area by the respondent was, in point of fact, unnecessary to permit the effective establishment of a sanatorium and hospital if, upon the facts, it may be said that it has been used for the purposes of the respondent as a public hospital. If, within the meaning of s. 132 (1) (d), it was so used it is nothing to the point that newly developed forms of treatment made it unnecessary in the opinion of some people for a tuberculosis sanatorium to be established in open country or that, in the present case, the appropriation of a substantial area of bushland did not, in fact, result in any benefit or advantage in the treatment by the hospital of its patients.

A medical practitioner called as a witness by the appellant testified that a sanatorium of this type does not require any greater area of land than a general hospital. This, however, was not the effect of medical evidence called on behalf of the respondent. But what is more to the point, the effect of the evidence of Dr. McCaffrey -who was and still is the superintendent of the hospital and who recommended the acquisition of the additional two hundred and twenty acres-was that he regarded the tract of land comprising the total area as the minimum necessary for the establishment of a hospital and sanatorium of this character and that, after the inspection in 1944 at which Dr. Hughes and the president of the hospital were present, he fixed that area as the minimum the hospital should have. And notwithstanding the fact that new forms of treatment have been devised his view at the hearing was that if he could persuade the board of the hospital to acquire more land for that purpose he would do so. Dr. McCaffrey's evidence was acceptable to the learned trial judge as was that of Dr. Hughes who, quite obviously, agreed with Dr. McCaffrey concerning the land which should be acquired and there is nothing in his evidence to suggest that what was thought to be necessary then is not necessary now. On the contrary it is clear that Dr. Hughes regarded and still regards the whole of the land as "a necessary adjunct to the hospital".

The onus of establishing the facts necessary to support the defence which is raised rested of course upon the respondent and it may be that in attempting to discharge this onus attention was directed predominantly to the issue whether ownership of the land in question, having regard to more modern forms of treatment, has been advantageous to the hospital in carrying on its work. But as Owen J. observed in the Supreme Court "the derivation of benefit is not the test" ^[F36] . Although the evidence is scanty the picture as I see it is that in 1944 a project was envisaged and that the carrying on of this project required, in the view of those responsible for it, appropriation of land additionally to that already owned by the hospital. What then occurred has already been related. A further area, thought to be necessary if a hospital and sanatorium of the type referred to were to be provided, was resumed and the project commenced. The hospital, itself, was concerned with but a single piece of land devoted to one object and thought to be necessary for carrying out of that object. And nothing appears to suggest to my mind that the whole area did not remain devoted to this purpose during the whole of the relevant period. In these circumstances it is nothing to the point to say that the appellant or some other person or body considers that such an extensive area was unnecessary for the purposes which the hospital had in mind or became unnecessary as new forms of treatment were devised.

The question then is whether, upon these facts, the hospital is entitled to say, in the language of s. 132 (1) (d), that the whole of the land was occupied or used by it for its purpose. At the least I feel bound to say that it was so used. That it should be so used was a matter for the hospital to determine and it is unnecessary to speculate whether it was used to advantage or whether, in the opinion of some other body, the hospital used more than was necessary.

The word "used" is, of course, 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. The uses to which property of any description may be put are manifold and what will constitute "use" will depend to a great extent upon the purpose for which it has been acquired or created. Land, it may be said, is no exception and s. 132 itself shows plainly enough that the "use" of land will vary with the purpose for which it has been acquired and to which it has been devoted. It may be used for a public cemetery, for a common, for a public reserve, in connection with a church or school and so on. Each of the forms of user referred to in the section relate to use by the owner and some of them, no doubt, contemplate a use which is synonymous with actual physical occupation and enjoyment. Others contemplate a use in a less direct form. But where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient, in my opinion, if it be shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land. In my opinion where a hospital acquires or sets apart, for a project which may properly be described as a purpose of a public hospital, a tract of land which it considers is the minimum requirement for its contemplated project and thereupon proceeds to carry out that project it, thereby, uses the whole of the land. How its purposes shall be fulfilled is, within reason, for it to decide and, as I have already said, it is nothing to the point to say that it has employed in the project more land than may, upon the views of others, be thought to have been necessary, or that in fact, it has derived no benefit or advantage therefrom in the fulfilment of its purposes.

For the reasons given the appeal should, in my opinion, be dismissed.