The recent Queensland Supreme Court decision in Wyuna
Court Pty Ltd v Vikpro Pty Ltd  QSC 216 has determined that
it is lawful for landlords to recover land tax from commercial
tenants from 30 June 2010 under certain leases entered into before
2009. This is despite a widely held belief amongst the property and
legal professions, that Land Tax is not recoverable under existing
commercial leases that were entered into before 30 June
Land Tax recovery – a recap
To appreciate the effect of the decision, it is necessary to
recap on the recent history of land tax legislation in so far as it
relates to recovery of Land Tax from tenants:
Section 44A of the Land Tax Act 1915 (the 1915
Act) provided that any obligation to pay land tax in a
Lease entered into after 1 January 1992, was unenforceable.
In 2009, section 44A was repealed by the Revenue and Other
Legislation Amendment Act 2009 (the 2009 Amending
Act). The effect of the repeal was that from 30 June 2009,
it was lawful for new commercial leases to contain a clause
allowing for landlords to recovery Land Tax from tenants.
Importantly however, the 2009 Amending Act inserted a transitional
provision in the 1915 Act which provided that the prohibition on
landlords recovering land tax from their tenants was preserved in
Leases that were already in existence immediately before 30 June
2009 (and also for renewals of such leases).
In 2010, the Land Tax Act 2010 (the 2010 Act)
was introduced, which repealed and replaced the 1915 Act. The 2010
Act came into force from 30 June 2010. The expressed intention of
the 2010 Act was to modernise the law of land tax so as to comply
with 'contemporary drafting practices.'
The 2010 Act did not contain any transitional provision which
continued the prohibition on landlords recovering land tax from
their tenants in Leases that were already in existence immediately
before 30 June 2009.
Despite the 2010 Act not containing any transitional provision
preserving the prohibition on recovering Land Tax under leases
existing before 30 June 2009, it has been generally accepted that
that prohibition remained as a result of the Acts
Interpretation Act 1954 and principles of statutory
interpretation. Specifically, section 20 of the Acts
Interpretation Act relevantly provides that the repeal of an
Act does not affect its previous operation or anything done or
begun under the repealed Act (unless there is a clearly expressed
legislative intention that the operation of the repealed Act is not
Applying that principle to the land tax legislation, even though
there was no express transitional provision in the 2010 Act, the
operation of the Amending Act which did include a transitional
provision would not be affected by the repeal of the 1915 Act.
However, in the case in question, the Supreme Court came to a
The landlord in this case, under a lease commencing before 2009,
sought to recover land tax from its commercial tenant, for the
period of the lease arising after 30 June 2010.
The sole judge, found that section 4 of the Acts
Interpretation Act overcame the effect of section 20 of that
Act. Section 4 provides that the principles contained in the
Acts Interpretation Act may be 'displaced, wholly or
partly, by a contrary intention appearing in any Act.' The
judge found that the repeal of the 1915 Act, together with the
failure to include a transitional provision similar to that
contained in the 2009 Amending Act, showed a clear parliamentary
intention that the prohibition on recovery under pre-2009 Leases
was not to continue under the 2010 Act. Therefore, section 20 did
not have the effect of continuing the prohibition.
What Leases are affected by the case?
The decision will only affect commercial Leases which:
commenced before 30 June 2009 (including subsequent
extensions/renewal of such Leases); and
contain a clause that says the Tenant must pay Land Tax.
The decision does not affect residential tenancies, or Leases
governed by the Retail Shop Leases Act – recovery of Land Tax
is under such Leases is unlawful in any circumstances.
What does the decision mean for landlords and tenants?
As the decision has been appealed, there is a possibility that
is may be reversed. If the appeal is not successful, there also
remains the possibility that the decision may be overturned by
Landlords under affected leases who are considering now charging
Land Tax to their tenants are advised to seek legal advice about
their rights. In the case of recovering back charges, statutory
limitation periods may apply. Depending on the specific
circumstances, it may be preferable for such landlord to await the
outcome of the appeal before seeking to charge tenants.
Similarly, tenants who find themselves being asked to commence
payment of Land Tax should also seek legal advice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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