Commonwealth of Australia v Essendon Airport Pty Ltd

The case between the Commonwealth of Australia and Essendon Airport Pty Ltd (EAPL) concerned the interpretation of a clause in a lease agreement for the Essendon Airport site. The central issue was how to calculate the annual payment EAPL is required to make to the Commonwealth "in lieu of land tax at the relevant State rate" in respect of specified parts of the airport site. The dispute arose from differing expert valuations regarding the value of these parts. The Commonwealth argued for a higher valuation, while EAPL contended for a much lower figure.

The primary legal issues revolved around the proper method for determining the value of the specified parts of the airport site. Specifically, the court had to decide whether the value should be calculated without considering the overall value of the airport site, whether it required a valuation of land as described in certificates of title and an apportionment under the Land Tax Act 2005 (Vic), and whether the site value could be ascertained for a part of the land described in a certificate of title. Additionally, the court had to determine if the specified parts of the airport site should be assumed to be on one certificate of title.

The court found that the specified parts of the airport site should be valued as if they were separate parcels of land, without reference to the overall value of the airport site. It held that the value should not be apportioned in accordance with the Land Tax Act 2005 (Vic) and that the value of the specified parts could not be ascertained for a part of the land described in a certificate of title. Instead, the court adopted a pragmatic approach, considering the experts' agreements and the principles of valuation in determining the appropriate method for calculating the payment.

The court ordered that the parties had 14 days to agree on the form of final relief to give effect to the reasons for judgment. If they could not agree, they were to file submissions of no more than five pages concerning the orders the court should make. The final orders would be entered in accordance with Rule 39.32 of the Federal Court Rules 2011.