In a majority decision (Philippides JA dissenting), the Qld Court of Appeal affirmed that an appellant (lessee) was liable to pay land tax pursuant to a lease.
- The appellant was the lessee, and the respondent the lessor, under a sub-lease of a property entered in August 2006 for a 70 year term.
- Clause 11.2 of the head lease required the lessee to pay all taxes in respect of the demised land, but at the time the lease was entered, s 44A of the Land Tax Act 1915 (Qld) rendered such a provision unenforceable in respect of land tax imposed under that Act.
- That continued to be the position after the repeal of s 44A in 2009, by virtue of a transitional provision, which preserved the section’s effect.
- The question for the primary judge in Wyuna Court Pty Ltd v Vikpro Pty Ltd  QSC 216 was whether, after the repeal of the 1915 Act and its replacement by the Land Tax Act 2010 (Qld), a transitional provision in the latter Act continued to preserve the operation of s 44A.
- Her Honour concluded that the transitional provision did not have that effect and made a declaration that the lessee was liable to pay land tax levied on the lessor.
The Court of Appeal dismissed the appellant’s appeal with costs. It held the primary judge’s conclusion that the enactment of the 2010 Act removed the bar on enforceability of clause 11.2 was correct.
(Vikpro Pty Ltd v Wyuna Court Pty Ltd  QCA 225, Qld Court of Appeal, Holmes CJ and Philippides and Philip McMurdo JJA, 6 September 2016.)
[FJM Note: The Qld land tax law prevented landlords passing on land tax to tenants until 2009, but the prohibition was preserved for pre-2009 leases. Then, 1 year later the land tax law was replaced by the 2010 Act (to make it ‘clearer and simpler and apparently only for post-2010 leases). Despite this, both the first instance judge and the appeal court held that the landlord could now get the tenant to pay the land tax. This was largely because of vague transitional provisions and the 2010 changes not expressly preserving the prohibition on passing on land tax to tenants.]
[LTN 174, 8/9/16]