The Commissioner of Land Tax has forwarded the following memorandum for advice:

I beg to forward herewith a statement which has been prepared by the Deputy Commissioner of Land Tax Adelaide regarding an appeal lodged against assessment of land tax by the South Australian Jockey Club Ltd for favour of your advice on the following points:

Is the Department within its rights in assessing the Club as owners of the land held by them?

Is the Department within its rights in assessing the value of the land on the assumption that it is a racecourse?

Is the Department within its rights in attributing a special taxable value to the monopoly running with the land which

includes not only the racecourse goodwill but also apparently a totalizator goodwill?

Personally, I am of opinion that the Department is correct in assessing the Club as owners of the racecourse as such, it being considered that this is the most valuable use to which the land can be put.

This case is somewhat similar in aspect to that dealt with by the High Court in Queensland, viz. Commissioner of Land Tax v. Nathan 16 C.L.R. 654.

As it is desired to deal with the matter as expeditiously as possible I should be glad if you will be good enough to favour me with your opinion in the matter at an early date.

Copies of the following Acts of Parliament together with copy of the Memorandum and Articles of Association of the South Australian Jockey Club Ltd are enclosed: No. 426 of 1888, No. 685 of 1897, No. 789 of 1902, No. 801 of 1902.

1. In my opinion, the Department is within its rights in assessing the Club as owners of the racecourse.

The title is in the name of the limited Company, but it is expressly provided that the Company holds the racecourse in trust for the Club and the Company is to allow the Club to have possession and to manage and control the racecourse.

The Company is nothing more than a holding trustee on behalf of the real owners, the Club.

2. As regards the question of assessing the land on the assumption that it is a racecourse, Mr Justice Isaacs in delivering the judgment of the High Court in Nathan's Case 16 C.L.R. at p. 658 said:

Mr Petrie, called for the taxpayer, said he thought the outside price it would fetch as a whole would be about £4,000 or £5,000-adding, 'I give this valuation apart from any consideration of racing.' This at once vitiates the force of the testimony, because the amount which a seller would put upon it, and which a willing buyer would give, is its value for the best purpose to which it can in the circumstances be applied.

In the present case the land is very suitable for a racecourse, owing to its size, locality and conformation and has in fact since 1874, with the exception of a short interval, been used as a racecourse, and all the dealings with it have been on the basis of a racecourse.

I think there can be no doubt that at the present time use as a racecourse is the best use to which this land can in the circumstances be applied.

Mr Baker, the Solicitor for the Club, contends that the present case is distinguishable from Nathan's Case, in that Nathan's racecourse, being a proprietary course, is a going commercial concern and as such is saleable, while the Club's course is not a going commercial concern, and as such is not saleable-i.e. it has no sale value as a racecourse.

I cannot agree with that contention, as the racecourse could be sold as a racecourse, and to be used for the purpose of racing, to any racing club at present in existence or to one which might be formed for the purpose of taking over as a racecourse-in fact the land has been sold for this very purpose more than once.

In my opinion, the land has a sale value as a racecourse, and the Department is within its rights in assessing the land on the assumption that it is a racecourse.

3. The land being valued as a racecourse the question arises as to whether special taxable value should be attributed to the land on account of the use of the totalizator.

From the history of this racecourse it appears that unless betting is allowed horse-racing is not profitable for the Club.

In South Australia the totalizator is the legal medium for betting and if the right to use the totalizator were taken away, racing on this racecourse would not be profitable.

Under the Gaming Act of 1888 it is provided that no licence shall be issued for the totalizator on any racecourse situated within twenty miles of Adelaide, except for the racecourses known as the East Park Lands, Morphettville, and Onkaparinga, unless a resolution shall be passed by both Houses of Parliament to that effect.

This racecourse is therefore particularly valuable in that a statutory right to use the totalizator, upon compliance with certain conditions, is conferred on that course, and also that the right is confined within the metropolitan area to that course and two others that are named, unless Parliament extends the right to other courses by resolution.

A valuable privilege is that attached to this land by virtue of its being used as a racecourse, and in the words of Mr Justice Isaacs in Nathan's Case: 'Such a virtual monopoly, so to speak running with the land, is a real enhancement of its value as a commodity, by increasing the price it will fetch' [at p.659].

In my opinion the Department is within its rights in taking into consideration:

1. the fact that this land constitutes one of the racecourses on which the totalizator is licensed, and without which the land would not be so profitably used as with a totalizator; and also
2. the fact that under the Gaming Act this land constitutes one of the three racecourses to which the totalizator is confined within the metropolitan area, unless Parliament by resolution increases the number of racecourses to be so privileged.

[Vol. 13, p. 89]