Cornish Group Spring Farm Pty Limited v Valuer General
[2011] NSWLEC 1039
•04 March 2011
Land and Environment Court
New South Wales
Medium Neutral Citation: Cornish Group Spring Farm Pty Limited v. Valuer General [2011] NSWLEC 1039 Hearing dates: 13 December 2010 Decision date: 04 March 2011 Before: Miller AC Decision: 1. In accordance with s 40(1)(c) of the Valuation of Land Act 1916, the matter is remitted to the Valuer General for determination in accordance with the decisions of the Court.
2. The question of costs is reserved.
Catchwords: Questions of Law - Valuation of Land Act 1916; when ascertainment of profitable expenditure under s 14L is not required; entry of profitable expenditure ascertained under s 14L on Register of Land Values maintained under s 14CC; meaning of s 14M(1)(c) and (2)(c) [in relation to building, structure or works on the land]. Legislation Cited: Valuation of Land Act 1916
Land and Environment Court Act 1979
Fire Brigades Act 1989
Mines Subsidence Compensation Act 1961
Land Tax Management Act 1956
Local Government Act 1993Cases Cited: Cornish Group Spring Farm Pty Limited v Valuer General: Cornish Group Pty Limited v Valuer General [2009] NSW LEC 205;
Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSW LEC 231;
Project Blue Sky Inc v Australian Broadcasting Authority [1998] (Project Blue Sky) HCA 28; 194 CLR 355
Wilson v State Rail Authority of NSW [2010] NSWCA 198 at paras [12]-[14]Category: Principal judgment Parties: APPLICANT
RESPONDENT
Cornish Group Spring Farm Pty Limited
Valuer GeneralRepresentation: Mr I Hemmings (Applicant)
Miss M Carpenter (Respondent)
Crown Solicitor (Respondent)
Marsdens Law Group (Applicant)
File Number(s): 30403, 30406, 30408 and 30411 of 2009
Judgment
Introduction
These matters commenced as appeals under s 37 of the Valuation of Land Act 1916 (the Act) in respect of land values assigned under s 6A(1) of the Act in respect of properties 66 and 110 Springs Road and 249 MacArthur Road, Spring Farm which have a total area of 91.256 ha (together, the subject property). The appeals were the subject of preliminary proceedings which have now been determined by the Court [ Cornish Group Spring Farm Pty Limited v Valuer General; Cornish Group Pty Limited v Valuer General [2009] NSW LEC 205].
Following the publication of the judgment in the preliminary proceedings a conference was convened under s 34 of the Land and Environment Court Act 1979 the result of which was that the parties agreed, notwithstanding the fact that the subject property is held under four separate titles, it should be valued in accordance with s 26 of the Act as one parcel. The parties also agreed that, as one parcel, the land value, under s 6(A)1, as at the base date of 1 July 2007, should be $19 million. The Court notes the agreements and proceeds on that basis.
The parties further agreed that the provisions of s 14L of the Act applied and that the sum of $619,879 was a proper allowance for profitable expenditure calculated in accordance with subs (1)(b) and carried out, by the applicant, prior to 1 July 2007.
Questions for determination
The parties formulated the following questions for the Court's determination:
(1) Whether s 14M of the Valuation of Land Act , 1916 applies in the determination of these proceedings?
(2) Whether, regardless of the application of s 14M of Valuation of Land Act, the Register of Land Values must show both the s 6A Land Value and the s 14L allowance?
(3) If the answer to question (1) is yes; whether, for the purposes of s 14M (1) of the Valuation of Land Act , the allowance in the agreed amount of $619,879.00 is excluded?
(4) If the answer to question (1) is yes; whether, for the purposes of s 14M (2) of the Valuation of Land Act , the allowance in the agreed amount of $619,879.00 is excluded?
Relevant sections of the Act
I set out now the relevant provisions of the Act:
Part 1 Preliminary
7 D Valuer General not required to determine certain valuations.
(1) --
(2) --
(2A) The Valuer General is not required, in relation to a rating or taxing authority:
(a) to make any valuation, or to determine any allowance or apportionment factor, under this Act, or
(b) to comply with any other provision of this Act or any other law with respect to such valuation, allowance, apportionment factor or rating base factor,
if it appears to the Valuer General, at the time at which the valuation, allowance, apportionment factor or rating base factor would otherwise be made or determined, that the valuation, allowance, apportionment factor or rating base factor would not, at any time, be used for the purpose of any rate or tax which may be made by or payable to the authority.
(3) --
(4) This section shall have effect notwithstanding any provision of this Act or of any other law.
(5) --
Part 1B
Division 1. Land to be valued
14A Valuer-General to ascertain land values
(1) --
(2) --
(3) --
(4) --
(5) Any land value ascertained under this Act is to be entered in the Register of Land Values
(6) --
Division 2. How land is to be valued.
14 J Deduction of allowances.
(1) In determining the land value of land, there is to be deducted the amount of any allowance or allowances ascertained under Divisions 3 (Allowances for profitable expenditure) and 4 (Allowances for subdivision).
(2) If more then one provision of this Division is applicable to the determination of land value in a particular case, the applicable provisions apply cumulatively.
Division 3. Allowances for profitable expenditure.
14L Expenditure for which allowance is to be made.
(1) For the purpose of ascertaining the land value of any land, the Valuer General is to ascertain a reasonable allowance for profitable expenditure by the owner, occupier or lessee in respect of:
(a) any effective land improvements on or appertaining to the land, and
(b) any visible and effective improvements which, although not on the land, have been constructed:
(i) for the purpose of supplying water to the land, or
(ii) for the purpose of draining the land, protecting the land from inundation or making some other provision for the more beneficial use of the land.
(2) In the case of a stratum, the Valuer General is also to ascertain a reasonable allowance for profitable expenditure by the owner or occupier on any visible and effective improvements which, although not in stratum, have been constructed exclusively for the benefit of the stratum.
(3) An allowance for profitable expenditure is to be calculated on the assumption that:
(a) the allowance is being calculated at the date by reference to which the land value is being determined, and
(b) any improvements that have been taken into account for the propose of ascertaining the land value of the land were in existence at the date referred to in paragraph (a).
(4) An allowance for profitable expenditure is to be entered in the Register of Land Values in respect of any land value to which it relates.
14M Exclusion of allowances in certain circumstances.
(1) For the purposes of the Land Tax Management Act 1956 , the land value of a parcel of land is taken not to include an allowance for profitable expenditure in respect of any land tax year:
(a) if the owner of the land was not the owner of the land when the profitable expenditure was incurred, or
(b)if the profitable expenditure was incurred by an occupier or lessee of the land, and the occupancy or lease has been transferred or surrendered or has expired since that expenditure was incurred, or
(c) in the case of land zoned or otherwise designated for use for any purpose (other than rural or non-urban purposes) under a planning instrument, if any building or structure has been erected or any works have been carried out on the land, or
(d) if the profitable expenditure was incurred more than 15 years before the date by reference to which the land value is being determined, or
(e) if, as at 31 December before the beginning of that year, the parcel of land was no longer owned by the person by whom the profitable expenditure was incurred,
and land tax under the Act is to be assessed and levied accordingly.
(2) For the purposes of the Local Government Act 1993 , the land value of a parcel of land is taken not to include an allowance for profitable expenditure in respect of any rating year:
(a) if the owner of the land was not the owner of the land when the profitable expenditure was incurred, or
(b) if the profitable expenditure was incurred by an occupier or lessee of the land, and the occupancy or lease has been transferred or surrendered or has expired since that expenditure was incurred, or
(c)in the case of land zoned or otherwise designated for use for any purpose (other than rural or non-urban purposes) under a planning instrument, if any building or structure has been erected or any works have been carried out on the land, or
(d) if the profitable expenditure was incurred more than 15 years before the date by reference to which the land value is being determined, or
(e) if, as at 30 June before the beginning of that year, the parcel of land was no longer owned by the person by whom the profitable expenditure was incurred ,
and rates and charges under the Act are to be assessed and levied accordingly .
Division 6. Register of land values.
14CC Register of Land Values.
(1) The Valuer General is to keep a Register of Land Values in such form as the Valuer General thinks fit.
(2) The Register is to contain such of the following kinds of information in relation to land as is within the knowledge of the Valuer General:
(a) information as to the ownership of the land,
(b) information as to the occupation of the land,
(c) information as to the value of the land,
(d) information as to the title of the land,
(e) information as to the location or description of the land,
(f) information as to the area of the land,
(g) such other kinds of information as is permitted or required by this Act or the regulations to be entered in the Register.
(3) An entry in the Register as to a land value, allowance or apportionment factor ascertained under this Part is conclusive evidence of the ascertaining of the value, allowance or factor on the date shown in the entry.
Agreed facts
The applicant settled the purchase of the subject property in or about 15 January 2007, carried out works of the type referred to under s 14L(1)(b) and remained the owner at the relevant dates, for taxing and rating purposes, of 31 December 2007 and 30 June 2008 referred to in s14M (1)(e) and (2)(e) respectively.
Two houses, together with attached or associated buildings have been constructed on the subject property; a fibro cottage erected in or about the 1960s and a brick cottage erected in or about 1948. Both buildings are habitable but are considered to have no value and must be demolished before new residential development can take place. Demolition approval has been obtained from Camden Council. The occupants of the houses undertake surveillance duties on behalf of the applicant.
The subject property is fenced but fencing is not considered to be stock proof. Other works, already in place, include a large man-made dam/lagoon.
Question one
The parties agree that the answer to this question is "Yes", that is, 14M applies. The Court notes this agreement.
Question two
The parties agreed that the answer to this question is "Yes". However, it subsequently became apparent that their respective answers were based on different assumptions and interpretations meaning that their answers needed to be qualified.
The parties agreed that the Register of Land Values must show the s 6(A) land value and that it is the Valuer General who determines when or whether s 14M is enlivened.
The applicant answered the question "Yes" as it assumed that when the provisions of s 14M were enlivened the profitable expenditure allowance under s 14L would still be ascertained and recorded in the Register of Land Values with the reduced land value being calculated thus becoming the land value under the Act.
The respondent answered "Yes" on the assumption that as long as the provisions of s 14M were not enlivened the profitable expenditure allowance under s 14L would continue to be ascertained meaning that the allowance would be recorded in the Register of Land Values as well as the reduced land value. However, once the provisions of s 14M were enlivened the allowance for profitable expenditure under s 14L would no longer be ascertained and, as a consequence, there would be nothing to record in the Register of Land Values.
Discussion
Counsel for the applicant made oral submissions on a number of matters pointing out that land value is not a defined term in the Act but is fully described in s 6A.
The heading to Division 2 is "How land is to be valued" and sets out specific instructions to cover, what I regard, as special circumstances. It includes s 14J which refers to deductions to be made for any allowance or allowances ascertained under Division 3.
Section 14L(4) requires "An allowance for profitable expenditure is to be entered in the Register of Land Values in respect of any land value to which it relates." Having been so entered the, the deduction is made and the reduced figure, often referred to in these proceedings as the " net land value", becomes the land value. The applicant submitted that this figure is used for other purposes under different Acts, such as the Fire Brigades Act 1989 (s 53) and the Mines Subsidence Compensation Act 1961 (s 11), but for the purposes of the Land Tax Management Act 1956 and the Local Government Act 1993, the allowance for profitable expenditure is excluded when s 14M is enlivened but the net land value remains unchanged for all other Acts.
At [26] of the written submissions the respondent states its position concerning the inclusion in the Register of Land Values of the allowance for profitable expenditure which was put to me orally as "where the allowance for profitable expenditure exists, the Register of Land Values shows the s 6A land value and also shows the s 14L allowance". However, "if the s 14M exclusion applies... the 14L profitable expenditure will not be shown on the Register of Land Values." [Transcript p29]
The respondent supports this position by reference to s 14P which states, in part, "An allowance for profitable expenditure is to be ascertained in relation to a rating or taxing authority". A "rating or taxing authority" is a defined term and is set out at length in s 47(1) being "The council of a local government area, The Chief Commissioner of State Revenue and the Sydney Water Corporation". This means that "if 14 M excludes the s 14L allowance, then there is no requirement for the s 14L allowance to be shown for the purposes of any other pieces of legislation. [This is] because the s 14M exclusion is specific to those two rating and taxing authorities..." [Transcript p29]
The respondent's position is that this "is an incorrect interpretation of what land value is because s 6A tells you the land value. Then if there's any allowances, you get the net land value because you may not have the allowance for time in futuro. It may be for a specific period". [Transcript p32]
An example of the Register of Land Values as maintained by a Valuer General under s 14CC was tendered as an exhibit [Ex R2] and shows a situation where s 14M had not been enlivened.
In summary, the respondent's position is that the s 14L allowance will only appear in the Register of Land Values where s 14M is not enlivened.
Having considered the submissions of both counsel I find that the Valuer General is not required to ascertain an allowance for profitable expenditure under s 14L when s 14M is enlivened; the authority for that conclusion being s 7D(2A) of the Act.
Accordingly, I have come to the conclusion that the correct answer to Question Two is "Yes, but only where the allowance for profitable expenditure under s 14 L is ascertained". This accords with the current practice being followed by the Valuer General.
Both counsel referred, at various times, to "net land value". This is not a defined term nor does it form part of the Act. It is a convenient shorthand way of describing, what is more correctly, the land value after deduction (vide s 14J) of any profitable expenditure allowance under s 14L (which has been ascertained because s 14M has not been enlivened).
Questions three and four
The applicant maintains that both questions should be answered "No" while the respondent is of a contrary opinion.
The issue put broadly
The respondent submits that as buildings and structures have been erected and works carried out on the subject property, prior to the base date of 1 July 2007, the allowance for profitable expenditure, available under s 14L is denied under s 14M(1)(e) and (2)(e). The applicant maintains that this interpretation is incorrect and inconsistent with the object/policy of the provisions.
Applicant's submissions
""(28) In order to determine whether there should be an exclusion of the allowance pursuant to s 14M it is necessary to interpret that provision. The correct approach to statutory interpretation has been recently usefully summarised by a five judge bench of the Court of Appeal in Wilson v State Rail Authority of NSW [2010] NSWCA 198 at paras [12]-[14]:
" ... however, as is now beyond dispute, in construing an Act, a Court is permitted to have regard to the words used by Parliament in their legal and historical context. Context is to be understood in the first instance, not merely when some ambiguity is discerned. Context is to be understood in its widest sense to include such things as the existing state of the law and the mischief or object to which the statute was directed. These are legitimate means of understanding the purpose of the Act and of the relevant provisions, against which the terms and structure of the provisions of the Act, [as] a whole, are to be understood. Fundamental to the task, of course, is the giving of close attention to the text and structure of the Act, as the words used by Parliament to effect its legislative purpose. Nevertheless, words, informed by an understanding of the context, and to the mischief to which an Act is directed, may be constrained in their effect."
(29) And see also at para [14]:
" ... and I use "context" in its wider sense ... as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those and other legitimate means, discern the statute was intended to remedy."
(30) In the Applicant's submission, the effect of s 14M(1)(a), (b), (d) and (e) and also (2)(a), (b), (d) and (e) are clear. The only scope for uncertainty - and the matter to be determined for the purposes of these proceedings - arises from (c).
(31) Dealing firstly with the other provisions, it is clear that the relevant context or object to which the provisions are directed is to permit a person who has carried out the profitable expenditure to obtain the allowance. It is only where that person who has procured the profitable expenditure is no longer the owner that pursuant to (a), (b), and (e) that the allowance will be excluded.
(32) Similarly, there is a direct connection with the carrying out of the profitable expenditure and the exclusion in (d). That is, if the profitable expenditure was carried out by the (current) owner more than 15 years ago, it can be excluded.
(33) The policy behind the legislative scheme is - in the Applicant's submission - clear. That is:
The effect of s 6A is that land value will be increased because of profitable expenditure that results in land improvements (on and off the site);
The operation of s 14L prevents the person that has carried out those works from having to both incur the expense and then be taxed etc because of that additional value.
(34) Of course, there are limits to that benefit. Those limits are entirely consistent with the policy. That is:
If the person that carried out the profitable expenditure no longer owns the land, it is assumed that the profitable expenditure is now embedded in the value of the land itself. As a result, it is appropriate that the new owner be levied etc accordingly;
If there has been a long standing owner (up to 15 years) that profitable expenditure would have been absorbed in other ways: either by deduction, depreciation or simple effluxion of time.
(35) As the Applicants understand the Valuer General's approach to interpretation of s 14M(l)(c) and (2)(c), the Valuer General suggests that there is simply no need for any nexus between the profitable expenditure and the erection of the building or structure upon the land.
(36) Such an approach to interpretation is to be rejected. It is inconsistent with the balance of s 14M and the object/policy of the provisions.
(37) Consistent with the balance of s 14M, and - it is submitted - the policy behind it, the exclusion is only triggered in circumstances where the building or structure is erected after the profitable expenditure. The policy reason behind that can be easily seen. That is, once the building or structure has been erected, the value of the profitable expenditure is now embedded (in whole, or in part) in the value of the improvement (the building or structure). It is at that point that the s 14L allowance ceases (and the s 14M exclusion kicks in).
(38) Further, that this is the correct approach to the interpretation of s 14M is also informed by the definition of Land Improvements in s 4 of the Act itself. Relevantly, land improvement means:
"(dl) Without limiting paragraph (d), any excavation, filling, grading or levelling o/the land ... that is associated with:
(i) The erection of any building or structure..."
(39) Land improvements associated with the erection of a building form part of land value in relation to which there may be a profitable allowance. However, once the purpose of the land improvement is fulfilled (its association) by the erection of a building the allowance comes to an end, and the s 14M exclusion is triggered.""
The Respondent's submissions
(34) ""VLA s 14M(1 )(c) and (2)(c) are the only matters relevant in s 14M for the Court's determination in these proceedings.
(35) The approach to statutory interpretation as summarised by the Court of Appeal in Wilson v State Rail Authority of New South Wales is useful where the Court has to "struggle with intricate legislation."6 The applicant cites this summary for an exposition of the modern approach to statutory construction.
(36) The respondent submits that there is no ambiguity nor "uncertainty"7 in s 14M1(c) and (2)(c).
(37) The applicant says that the Valuer General's approach suggests that there is no need for any nexus between the profitable expenditure and the erection of the building or structure upon the land. That is correct.
(38) The applicant's contention in para 37of the written submissions overlooks the Parliament's specific wording of the section.
(39) ln s 14M(1)(b) and (2)(b), the Parliament has seen fit to use the words "since that expenditure was incurred." If the applicant's position were to be accepted, one would expect to find that same wording in (1 )(c) and (2)(c) that follow directly (1)(b) and (2)(b).
(40) lt must be concluded that the Parliament did not intend the interpretation as submitted by the applicant, otherwise the Parliament would have specifically included those words to create the result as submitted by the applicant.
(41) VLA s 14M(1)(c) and (2)(c) use the words "any building or structure".
(42) The Statement of Agreed Facts states that there is a fibro cottage, a brick cottage and associated structures on the subject site thus those buildings and structures are captured by s 14M(1)(c) and (2)(c) being any building or structure. It matters not when the buildings or structures were erected upon the subject site.
(43) As a result of the existence of the buildings and structures on the subject site, s 14M is enlivened and therefore the allowance for profitable expenditure under s 14L is excluded in these proceedings.
(44) Accordingly, the answers to questions 3 and 4 are "yes".""
Discussion
As already noted there is no dispute that a "building or structure has been erected or any works have been carried out on the land" and, collectively, had been in existence for many years prior to the commencement of works referred to in s 14L.
Counsel for both parties have referred me to the Court of Appeal decision in Wilson v State Rail Authority of NSW [2010] NSWCA 198 ( Wilson ). That judgment at [13] refers to certain parts of the judgment in Project Blue Sky Inc v Australian Broadcasting Authority [1998] (Project Blue Sky) HCA 28; 194 CLR 355 which I consider to be apposite in the interpretation of the legislation in dispute.
""[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. [See Taylor v Public Service Board ( NSW ) [1976 HCA 36:137 CLR 208 at 213 per Barwick CJ). In Commissioner for Railways (NSW) v Agalianos [1955] HCA 27: 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus the process of construction must always begin by examining the context of the provision that is being construed."" [References omitted].
""[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals at [ Ross v the Queen [1979] HCA 29: 141CLR 432 at 440 per Gibbs J.] Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. [References omitted]. Reconciling conflict in provisions will often require the court "to determine which is the leading provision and which the subordinate provision and which must give way to the other" [ Institute of Patents Agents v Lockwood ] AC 347 at 360 per Lord Herschell LC] Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.""
In Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSW LEC 231 ( Parks ) Biscoe J summarised the principles of statutory interpretation relevant to that case. The following selected principles are relevant, in my opinion, to this case.
""[76] Words must be read in their context in the first instance, not merely at some later stage when ambiguity might be thought to arise. Context is used in its widest sense to include such things as the existing state of the law and the mischief or object to which the statute was directed: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 This approach has been followed in a number of subsequent judgements (mostly joint judgements) of the High Court, sometimes using the language of "mischief", sometimes using the language of giving effect to any discernible statutory "purpose" Newcastle City Council v GIO General Limited (1997) ( Newcastle ) 191 CLR 85 at 99, 113."" [Other references omitted].
"[78] The manifest intention of the statute must not be defeated by too litteral an adherence to its precise language: Minister for Immigration and Citizenship v SZJGV [2009] HCA 40, 238 CLR 642."
"[79] Where the purpose of a legislative provision is clear, a court may be justified in giving it a strained construction to achieve that purpose provided that the construction is neither unreasonable nor unnatural. If the target of a legislative provision is clear, the court's duty is to ensure that it is hit rather than to record that it has been missed. As a result, on rare occasions a court may be justified in treating a provision as containing additional words if they will give effect to the legislative purpose: ( Newcastle )"
""[80] Certain extrinsic material may be used in the interpretation of a provision of an Act if it is "capable of assisting in the ascertainment of the meaning of the provision": s 34 Interpretation Act 1987. However, statements of intention as to the meaning of words by Ministers in a Second Reading Speech, let alone other statements in Parliamentary speeches, are rarely, if ever capable of assisting in the ascertainment of the meaning of a provision: Harrison v Melhen [2008] NSWCA 67, 72 NSWLR at [12]; followed in Sheehan v State Rail Authority (NSW ) [2009] NSWCA 261 at [40]. If the meaning which would otherwise be attributed to the statutory text - which may require consideration of the context including the general purpose and policy of the provision - is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful that consideration of extrinsic material might be of assistance: Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue [2009] HCA 41, 239 CLR 27 at [52]; Catlow v Accident Compensation Commission [1989] HCA 43, 167 CLR 543 at 550.""
"[81] Conflicting provisions of the statute should be reconciled, so far as possible, on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language, the conflict must be alleviated, so far as possible, by adjusting the meaning of competing provisions to achieve the result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the Court to determine the hierarchy of provisions and which must give way to the other: Project Blue Sky at [70]; Wilson at [13]."
The applicant at [33] and [34] maintains that the policy which led to the inclusion in the Act of s 14L was to provide taxing and rating relief, following expenditure of certain types, subject to limitations set out in s 14M (1) and (2). At [37] the applicant submits that "once the building or structure has been erected, the value of the profitable expenditure is now embedded (in whole, or in part) in the value of the improvement (the building or structure). It is at that point that the s 14L allowance ceases (and the s 14M exclusion kicks in)."
In [38 and 39] Counsel for the applicant refers to the definition of Land Improvements in s 4 of the Act. However, the referenced definition was not included, (in its amended form), in the Act until 1 July 2008 and, for that reason, this particular submission has been disregarded.
The respondent at [36] ""submits that there is no ambiguity nor "uncertainty" in s 14M1(c) and (2)(c)"", at [42] "It matters not when the buildings or structures were erected upon the subject site" and at [43] "As a result of the existence of the buildings and structures on the subject site, s 14M is enlivened and therefore the allowance for profitable expenditure under s 14L is excluded in these proceedings". It was further submitted at [39] that the absence of the words "since that expenditure was incurred" in s 14 M(1)(c) and (2)(c) indicated that there was no nexus [37] "between the profitable expenditure and the erection of a building or structure upon the land." In oral submissions the respondent's Counsel reinforced her view that if any building structure or works had ever been erected or carried out on land the taxing and rating relief by virtue of s 14M would not be available.
The task to be undertaken by the Valuer General under s 14L is a valuation function and is quite distinct from the administrative function required under s 14 M.
It is quite clear that the administrative function as expressed in 14 M(1)(a), (b), (d) and (e) and (2)(a), (b), (d) and (e) refer to events which could only occur after the profitable expenditure envisaged in s 14L was incurred. The provisions of 14M (1)(c) and (2)(c) must be read in that context. Accordingly, the words "any building or structure has been erected or any works have been carried out on the land" refer, likewise, to those activities (erecting or carrying out of works) which follow the expenditure, covered under s14L, and not prior thereto.
In coming to my conclusion I believe that I have followed [69] and [70] of Project Blue Sky (being [13] of Wilson ) and [76], [78], [79], [80] and [81] of Parks .
Having reached that conclusion I am further supported by the reality of the circumstances that will be encountered in the field. I consider that very few parcels of land, if any, which may benefit from the provisions of s 14L, would be in their natural or virgin condition such that a " building" (a residence) or "structure" (which would include a shed and fencing), or "works" (such as the mounding up of soil, the construction of a contour drain or farm type dam) would never ever have been "erected" or "carried out" thereon. Adopting the respondents' position, if any of these activities had been undertaken prior to commencement of works of the type encompassed by s 14L, the provisions of that section, obviously intended to open the door for some taxing and rating relief, would, almost without exception, be completely nullified.
Adopting [80] of Parks I see no need to refer to extrinsic material as the meaning of the text in question, s 14 M (1)(c) and (2)(c), on my analysis, is not "doubtful".
For these reasons, I have come to the conclusion that the correct answers to questions three and four are "No" in each case.
Determination
The Court answers the questions as follows:
Question One, "Yes".
Question Two, " Yes, but only where the allowance for profitable expenditure under s 14 L is ascertained".
Question Three, "No".
Question Four, "No".
Orders of the Court
(1) In accordance with s40 (1) (c) of the Act, the matter is remitted to the Valuer General for determination in accordance with the decisions of the Court.
(2) The question of costs is reserved.
E Craig Miller
Acting Commissioner of the Court
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Decision last updated: 24 March 2011
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