Black v Federal Commissioner of Land Tax [1920] HCA 23; (1920) 27 CLR 483 (15 April 1920)

HIGH COURT OF AUSTRALIA

Black and Others Appellants; and The Federal Commissioner of Land Tax Respondent.

H C of A

15 April 1920

Knox C.J., Isaacs, Rich and Starke JJ.

Bethune, for the appellants.

R. K. Manning, for the respondent,

Knox C.J.

This is a case stated by Ferguson J. for the opinion of this Court on certain questions arising under the Land Tax Assessment Act 1910-1916, in the matter of an appeal by Ann Black and others against an assessment by the Commissioner of Land Tax. Three questions are asked. With regard to the third, Mr. Bethune admitted that it ought to be answered in the negative; and that disposes of it. The first two questions raise one point, and that is whether, in the case of a mining lease which reserves a dead rent as well as a royalty on the coal won in excess of the amount which would be covered by the dead rent, the "rent reserved by the lease" in sub-sec. 3 (a) of sec. 28 is to be limited to the dead rent, or is to include also the royalty on coal extracted which was not covered by the dead rent. It is quite clear that either solution of the question leads to curious results, but I fail to see that one construction leads to any more unexpected or absurd result than the other. I am of opinion that the words "annual rent reserved by the lease" include both dead rent and royalty. Three Judges of this Court in Apperly v. Federal Commissioner of Land Tax[1] dealt with the question of royalties and my brother Isaacs, in delivering the judgment of himself and my brothers Gavan Duffy and Rich said[2]: "Royalties are true rent (Daniel v. Gracie46 Q.B., 145.) and can be distrained for, which is a characteristic of rent, subject to agreement." Daniel v. Gracie has been affirmed in a later case, and there is additional authority on the point in the decision in the case of Attorney-General of Ontario v. Mercer[4], referred to by my brother Rich, which points in the same direction.

It was argued by Mr. Bethune, in support of his contention that the rent reserved by the lease was the dead rent of £500 per annum, that a mining lease in consideration of a payment of royalty is really more akin to a sale of portion of the property than to a lease at a rent reserved. Whether that be so or not, the point cannot arise in the present case for two reasons: one is that the case is stated on the assumption that the appellants and the persons working the mine under this lease are in the position of lessors and lessees; and the other is that, if they are not in the position of lessors and lessees, sec. 28 of the Act does not apply and there is no question for the Court to consider. Apart from our having to take it as a lease, it clearly is a lease; it is a mining lease, and we must construe the section so as to apply it in every case of lessor and lessee which comes within the section.

For these reasons I think that question 1 ought to be answered No; question 2, No; and question 3, No.

The order will be that the questions be answered accordingly, that the case be remitted to the Supreme Court to be further dealt with, and that the costs of this special case be costs in the appeal.

Isaacs J.

I agree, and for the same reasons.

Rich J.

I agree.

Starke J.

I agree.

Questions answered accordingly. Case remitted to the Supreme Court to be further dealt with. Costs of special case to be costs in the appeal.

Solicitors for the appellants, Frank A. Davenport & Son.

Solicitor for the respondent, Gordon H. Castle, Crown Solicitor for the Commonwealth.

[1] [1914] HCA 13; 17 C.L.R., 535.

[2] 17 C.L.R., at p. 546.

[3] 6 Q.B., 145.

[4] 8 App. Cas., at pp. 777-778.