Coverdale v West Coast Council

[2016] HCATrans 43

[2016] HCATrans 043

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Hobart  No H10 of 2015

B e t w e e n -

WARRICK COVERDALE VALUER‑GENERAL OF THE STATE OF TASMANIA

Appellant

and

WEST COAST COUNCIL

Respondent

FRENCH CJ
KIEFEL J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT HOBART ON TUESDAY, 1 MARCH 2016, AT 1.59 PM

Copyright in the High Court of Australia

MR M.E. O’FARRELL, SC, Solicitor‑General for the State of Tasmania:   If it please the Court, I appear with my learned friend, MS S.K. KAY, for the appellant.  (instructed by Acting Director of Public Prosecutions (Tas))

MR S.B. McELWAINE, SC:   May it please the Court, I appear with my learned friend, MS R.L.A. MUNNINGS, for the Attorney‑General as contradictor.  (instructed by Crown Law (Tas))

FRENCH CJ:   Yes, Mr Solicitor.

MR O’FARRELL:   Your Honours, the controversy in this case centres on section 11(1) of the Valuation of Land Act 2001 (Tas). Our central contention is that “land” bears its ordinary legal meaning which does not include the sea. The troublesome part, perhaps – although we say it is not so troublesome – of section 11 of the Act is that it includes, within the class of lands to be valued, Crown lands that are liable to be valued under the Local Government Act 1993, Part 9, which deals with local government rating. We pose the question, must “Crown lands” in the second part of section 11(1) nevertheless answer the description of land and we submit that that question should be answered in the affirmative.

We start, your Honours, with Alcan, and we say that the surest guide to the interpretation of section 11 is the text itself. Your Honours, if I can just take you to section 11, which is in the combined bundle of statutes at page 39 – primarily, your Honours, section 11 imposes on the Valuer‑General a duty. That duty is to make valuations of various different types of land values:

of all lands within each valuation district, including –

and we emphasise “including” –

any Crown lands that are liable to be rated in accordance with Part 9 of the Local Government Act 1993.

We submit, your Honours, that firstly, when one looks at the words “values of all lands”, “lands” means those things which are effectively a saver of realty, and do not include the sea.  As to the second part of the section, which is the inclusive part, we submit that the focus of the section, as I have submitted, is the duty of the Valuer‑General to value land.  It does not permit, in our submission, the Valuer‑General to value anything else.

FRENCH CJ:   What is the scope of the duty on the Valuer‑General, given the provisions of subsection (1A)?  That seems to be a fairly wide discretion to exempt land from valuation.

MR O’FARRELL:   It is, your Honour.  It is a strange provision.  It found its way into the Act under the State and Local Government Financial Reform Act 2003. That amendment, your Honours, is at page 125 of the combined bundle. At that point, your Honours, there was a shift from a provision like section 11 in its current form, where the Valuer‑General was actually invested with a discretion to value Crown lands as the Valuer‑General thought proper. That formulation was taken out of the Act, and section (1A) was included.

In my submission, your Honours, it is simply a broad discretionary provision which allows the Valuer‑General in appropriate circumstances not to value land.  One might think that one obvious circumstance is where the land is otherwise exempted.  He would not be bothered to value the land in that instance.

KEANE J:   But if it is otherwise exempted, there would be nothing for (1A) to do.

MR O’FARRELL:   That is a possibility, your Honour.  As I say, in my submission, it came in under the Financial Reform Act ‑ ‑ ‑

NETTLE J:   But it was always there, going right back at least to 1971, was it not, inasmuch as he had a discretion to value such Crown lands as he thought proper to do.

MR O’FARRELL:   Yes, your Honour.

NETTLE J:   So really, nothing has changed apart from the form of word.

MR O’FARRELL:   That is correct, your Honour.

NETTLE J:   He values such Crown lands as he thinks is appropriate.

MR O’FARRELL:   Yes, your Honour – except that in its terms, (1A) is much broader.  It can exempt any land.

FRENCH CJ:   So he could exempt marine farm leases if he thought they were land?

MR O’FARRELL:   If he thought they were land, your Honour.  Hopefully, we will get to that.  In that second part, your Honours, we simply say he does not have a duty to value anything else but land, and the word “including” - “including any Crown lands” effectively subsumes Crown lands within what is ordinarily described as land.

Your Honours, in our written submissions, we identify effectively three conditions which we submit should be present in order to trigger the Valuer‑General’s duty.  This is at paragraph 27 of our written submissions; firstly, that there is land within the meaning of the Valuation of Land Act; secondly, that the land is Crown land; and thirdly, that the land is liable to be rated under the Local Government Act, Part 9.

Now, we also put reliance on the reference to “valuation districts”, in that that does two things.  Firstly, a valuation district is essentially co‑extensive with a municipal area of a local council.  “Valuation districts” confines the class of land, including Crown land, to be valued within the boundaries of that district.  The whole section is designed to, in my submission, confine the Valuer‑General’s duty.

FRENCH CJ: We go to section 16(3), do we, to find out at least what “municipal areas” include – of the Local Government Act.

MR O’FARRELL:   That is correct, your Honour, and the schedule. That divides the State into municipal areas, and they are then defined in Schedule 3 by reference to maps on the central plan register.

Your Honours, the only other provision of the Valuation of Land Act that we emphasise so far as the context goes – although, your Honours, we do rely on the summary of the Act in the dissenting judgment of Justice Pearce in the Full Court at paragraph 42 of his judgment commencing on page 46 of the appeal book.  Section 45(1) is relevant, your Honours.  It refers to valuation lists, and the Valuer‑General’s duty to value culminates effectively in the drawing up of the valuation list which is then sent to a local council, so that it can strike its rates.

KIEFEL J:   But that is after something has been determined to be land?

MR O’FARRELL:   Correct, your Honour.

KIEFEL J:   Are there other provisions in the Valuation of Land Act which might suggest an intention to refer to “land” in its more ordinary meaning, such as references to fee simple of land?

MR O’FARRELL:   There are, your Honour.  Justice Pearce refers to that at paragraph 45, which is pages 47 to 48 of the appeal book.  The terms “land value”, “capital value” and “assessed value” are all defined by reference to fee simple of land.

KIEFEL J: Then in section 11(3) in relation to the assessed annual value of land, what land is taken not to include – it speaks of fixtures and structures in (a) and (d).

MR O’FARRELL:   Yes, your Honour.

KIEFEL J:   Then looking at section 16, references to “parcels of land”; section 17, land “separated by a road”; section 19(2):

Where any part of a mine is under the sea . . . that part is to be valued with . . . notwithstanding that the overlying land and water are not within the boundaries of any valuation district.

I am not quite sure what to make of that.  It seems to be at least distinguishing between land per se and land which is under sea or tidal waters.

MR O’FARRELL:   Yes, your Honour.

KIEFEL J:   Is it your submission that there is nothing in the Valuation of Land Act itself which gives the wider meaning to “land”, and that it is limited to its traditional ordinary meaning.

MR O’FARRELL:   That is certainly my submission, your Honour.  So much is implicitly conceded, in my submission, by the Attorney‑General at paragraph 54 of the Attorney’s written submissions.

KIEFEL J:   Yes.

MR O’FARRELL:   Your Honours, we submit, relying on Alcan, that that is what can be taken from the text, and that forecloses any need to look further at the history or the extrinsic material.  We say that the meaning of the section is so plain it needs no further support.

NETTLE J:   Is that because the obligation to value is confined to the valuation district, which in turn is confined to the municipal district, which implicitly is confined to the low‑water mark?

MR O’FARRELL:   No, your Honour, that is not the reason.  This municipal district – that is, the West Coast Council municipal district – is not so confined. The waters of Macquarie Harbour ‑ ‑ ‑

NETTLE J:   Are within the district.

MR O’FARRELL:    ‑ ‑ ‑are within the district.  If your Honours understand the geography of Macquarie Harbour, it is a large inland sea, as it were ‑ ‑ ‑

NETTLE J:   Yes.

MR O’FARRELL:    ‑ ‑ ‑and it has a very small opening, and there is just a line drawn straight across the opening.  That is how it comes within their district.

NETTLE J:   So it is well within the district?

MR O’FARRELL:   Yes, your Honour.  We cannot submit that it is not.  What is under Macquarie Harbour is the Council’s municipal district.  The question is whether it is land.

FRENCH CJ:   The provision I drew to your attention earlier in the Local Government Act about what a municipal area includes by reference to:

accretion from the sea adjoining it –

and –

any part of the sea‑shore to the low‑water mark adjoining it –

that does not tell us what the confines of the notion of a municipal district are.  In this case, the municipal district is defined in relation to West Coast Council.

MR O’FARRELL:   That is correct, your Honour.  That provision has no operation here.

FRENCH CJ:   Yes, okay.

MR O’FARRELL:   Your Honours, insofar as the history does help us, if there are problems with the text, which we firmly submit there are not – firstly, your Honours, the history extracted in some detail in my learned friend’s written submissions shows effectively that the sea has never been expressly subject to rating provisions.  When it became permissible to value Crown lands, it fell to the discretion of the Valuer‑General, and we have had that conversation in part a little while ago.  Effectively, I think, in the Land Valuation Act 1950, the discretion was introduced for the Valuer‑General to value such Crown lands as he thought proper.  That was carried through to the Land Valuation Act 1971.

Your Honours, we have passed up an extract of the relevant Acts since the Land Valuation Act 1971, simply to assist your Honours with the history that we say is relevant.  Your Honours will see on the first page of that extract section 12, “The Valuer‑General”, and you will see that he is in fact directed not to value Crown lands.  Then it says:

of such Crown lands . . . within each valuation district as the Valuer‑General thinks proper –

The next extract is from the Land Valuation Amendment Act 1980, which is really a recasting of that provision.  The discretion remained in subparagraph (ii) of subsection (1)(a).  The next extract, which is the Land Valuation Act 1971 as at 27 June 2002, simply made some adjustments to some of the definitional sections.  Your Honours need not be concerned with that.

The extract which follows is the Valuation of Land Act 2001, section 11, when it was first introduced. We draw your Honours’ attention to, again, subparagraph (2), where the Valuer‑General was required, except where so directed by the Minister, to value such Crown lands as he thought proper.

We submit, your Honours, that here can be seen effectively the first parts of confining the duty more closely, so that the Executive was effectively gaining some control over the Valuer‑General’s ability to value land.  Then the Act which my learned friend places a great deal of weight on, the State and Local Government Financial Reform Act 2003, amended section 11 so that the Valuer‑General must, in (a), make:

valuations of the land values –

et cetera –

and Crown lands liable to be rated –

The conjunction “and” may have lent, we concede, some weight to the argument which my learned friend now puts, but the crucial ‑ ‑ ‑

GORDON J:   That reflected no more than what had – that is just different words to the same provisions which existed in the other Acts you have taken us to.

MR O’FARRELL:   Yes, your Honour.

GORDON J:   That was a cumulative requirement.

MR O’FARRELL:   Yes, but then in the final amendment, which was made in 2006, which is the final page of the extract, the section as it now appears was introduced, using the word “including”.  That must have meant something, your Honours.  The change from “and” to “including” had to effect some logical change to the provision, and we submit that it is as we say it is, that it effectively subsumes Crown land into those lands which must be valued.  We then, of course, get back to the essential problem in the case; what does “land” mean?

FRENCH CJ:   Well, you say the reference to Crown land begs the question of what is the construction of land.

MR O’FARRELL:   Yes, your Honour.

NETTLE J:   Mr Solicitor, is not the change from “and” to “including” as between the second‑last and the last pieces of legislation simply because in the last, the words “within the valuation district” are used only once and have to govern both kinds of land, namely “land” and “in Crown land” - when it was in the penultimate form at subparagraphs (a)(i) and (a)(ii) it was necessary to have the conjunction “and”, but when it was consolidated, as it were, into its final form, the words “within the valuation district” now govern both classes of land – ordinary land and Crown land – thus making “including” the appropriate conjunction.

MR O’FARRELL:   Your Honour, I would accept that.

NETTLE J:   If that is right, does it not mean that it is still just as telling against your argument as it was before that change from “and” to “including”?

MR O’FARRELL:   No, your Honour, because “including”, in my submission, still must relate back to “all lands”.

NETTLE J:   But that is not so as a matter of authority.  It is plain, is it not, that the conjunction “including” may add something without being in any way included in what goes before?

MR O’FARRELL:   Your Honour, in my submission, no.  The construction to be placed on the section as it is now put, in my submission, is that “Crown lands” fall within “lands” – fall within that class.  It is the only construction, in my submission, which is available.

GORDON J:   Can I ask one other aspect about that submission? If you go to section 87 of the Local Government Act, where it identifies the exemptions, one of them is a marine facility.  If you are right about that, I would have thought that a marine facility would be something which would, at least in some circumstances, be in a position which was not on land but somewhere else, i.e. in the middle of a harbour or some other water‑based foundation.

MR O’FARRELL:   Your Honour, a marine facility within the meaning of the Marine and Safety Authority Act is not a marine farm ‑ ‑ ‑

GORDON J:   No, no, no, it is a thing used for navigation, like a thing sitting in the middle of a harbour with a buoy on the top.

MR O’FARRELL:   Yes, your Honour.

GORDON J:   Why would you need to exempt it, if, on your construction, “land” did not include items attached to the seabed?

MR O’FARRELL:   I think “marine facility” is also – I do not have the Marine and Safety Act with me.  They would include, I think, your Honour, jetties and things attached to the land.

GORDON J:   I think it is defined to mean:

any facility, structure or equipment used in relation to the navigation and operation of vessels ‑ ‑ ‑

MR O’FARRELL:   Yes, your Honour.

NETTLE J:   That could be a navigation mark both on and off the water.

MR O’FARRELL:   It could, your Honour, yes.  Your Honours, we rely on Risk as the closest authority to support the construction we advance.  Your Honours will be aware that the definition of “land” in the Valuation of Land Act is similar to the definition of “land” in our Acts Interpretation Act, section 22.  A similar section was considered in Risk v Northern Territory.  That case came on before your Honour the Chief Justice and Justice Kiefel in the Federal Court.  If I can take your Honours in the combined bundle of authorities to page 161 of that judgment, your Honours will see that the discussion commences at paragraph 32 and paragraph 33 – I will not bother to read these – and over the page to 162 of the book.  Then at paragraph 34, it was pointed out:

The question raised in this case is not answered by the definition of “land” in s 22(1)(c) of the Acts Interpretation Act.  That definition makes clear that land includes all manner of interests in land.  What it means simply is that “[i]n the absence of a contrary context the term includes estates or interests in land” . . . The only “contrary intention” relevant to that definition would be an intention to exclude some class of estate or interest from the content of the word “land” as used in the definition . . . In our opinion the ordinary and ordinary legal meaning of “land” does not extend to the seabed of coastal waters beyond the low water mark.

In my submission, the definition of “land” in section 3 of the Valuation of Land Act requires no different treatment.  Your Honours, if I can also refer you to paragraph 39 of the judgment at page 164, which is the conclusion, and in particular in the last five lines:

It is inconceivable that the Land Rights Act was intended to extend to the seabed of bays and gulfs within the Territory and yet failed to make that explicit.

There are no provisions, as I have submitted, in the Valuation of Land Act which make it explicit that “sea” or “seabed” must be included in those things which the Valuer‑General must value.

NETTLE J:   Except for the reference to “Crown lands” in section 11(1), which is only detracted from if you are correct in saying that “include” means it must come within the genus established by “land” in the first line of the section.

MR O’FARRELL:   Quite so, your Honour.

KIEFEL J:   The extended definition of “land” in the Crown Lands Act, as including land covered by the sea or other waters – are you able to point to provisions within the Crown Lands Act to which that definition would specifically apply?  The only one I have seen on a quick survey is section 53, “Reclamations from the sea”.

MR O’FARRELL:   Yes, your Honour.

GORDON J:   Under section 29, you can have a lease of Crown land which includes the sea.

MR O’FARRELL:   Thank you, your Honour.  I thought there was – it may be in the Marine Farming Act – a provision which specifically related to marine farming under the ‑ ‑ ‑

KIEFEL J:   There is section 41, “Marine plant licences”.

MR O’FARRELL:   No, your Honours, it is not that provision.  We will see, your Honours, if we can find any other provision.

KIEFEL J:   But the purpose of the Crown Lands Act, at least in its title, is basically with respect to the management of the Crown lands.

MR O’FARRELL:   That is correct.  It is the management ‑ ‑ ‑

KIEFEL J:   So it would be giving much wider powers with respect to everything which came under the Crown’s control.

MR O’FARRELL:   Indeed, your Honour.  We say that there is a clear distinction between the purpose of the Crown Lands Act to administer Crown land, and the purpose of the Valuation of Land Act, which is to value land.  Indeed, we submit it is simply impermissible to do, as my learned friend would invite the Court, to effectively transpose into the Valuation of Land Act the concept of “Crown land” as informed by the Crown Lands Act.  One would expect that that would have been made plain.

NETTLE J:   It was made plain before the last iteration, when the conjunction was “and” rather than “includes”, was it not?

MR O’FARRELL:   No, your Honour, with respect.  I do not think that any of the provisions to which I have taken you refer to the Crown Lands Act so understood.  They refer to “Crown lands”, but there is no provision which says that you must interpret “Crown lands” as being Crown lands within the meaning of the extended definition of “land” in the Crown Lands Act.

NETTLE J:   So even at that penultimate version, the 2003 Act, you would say it was still apparent that Crown lands were only lands within the meaning of this Act if they were lands within the ordinary connotation of “land”?

MR O’FARRELL:   Yes, your Honour, I would submit that and your Honour this point is made against us by my learned friend in what he says about - or how you deal effectively with the problem.  He says Crown lands are lands of the Crown.  If I could just pick up – “land belonging to the Crown”, your Honour, this is page 8 of my learned friend’s written submissions, paragraph 42:

The common meaning is simply ‘land belonging to the Crown’.

Well, we would agree with that, your Honour.

NETTLE J:   Why would you not read “Crown lands” as defined in the Crown Lands Act?  With respect to Chief Justice Blow, why is it not in pari materia?

MR O’FARRELL:   Well, because, your Honour, it does not form part of the rational integrated system of statutes such as can be seen in this case between the Local Government Act and the Valuation of Land Act which, effectively, work co‑operatively to pick values up which are made under the Valuation of Land Act and then applied as instruments of rating. 

NETTLE J:   But if Parliament determined, as it plainly did in 2003, to subject Crown lands to rating, why is then not the Crown Lands Act part of the scheme?

MR O’FARRELL:   Your Honour, if that was intended to be the case, in my submission, you would find somewhere either in the Acts Interpretation Act or within the Financial Reform Act some reference which would say, well, where we mean Crown lands – where we say Crown lands, we mean what is defined in the Crown Lands Act.  This does not appear, your Honour.  It is not part of the scheme.

GORDON J:   In the defence, you accepted that the seabed of Macquarie Harbour was Crown land.

MR O’FARRELL:   Yes, we do, your Honour.

GORDON J:   So, what is the definition then of “Crown land” that you have pleaded to?

MR O’FARRELL:   We simply say, your Honour, it is Crown land within the meaning of the Crown Lands Act but it is not that definition. 

GORDON J:   It does not get taken into Valuation of Land Act? But if you are wrong about the way in which the first and second bits of section 11 interact then you accept for the second part that “Crown land” means Crown land under the Crown Lands Act?  That is what you have pleaded to, as I understand the submission.  I think it is appeal book 13.  The pleading is:

The seabed of Macquarie Harbour is Crown land ‑ ‑ ‑

MR O’FARRELL:   Thank you, your Honour.  I accept that your Honour.  In my submission, the case has been fought on the basis that it is not Crown land within the meaning of the Crown Land Act - sorry, it is Crown land within the meaning of the Crown Land Act but it is the sea effectively, and that is not carried forth into the Valuation of Land Act. 

GORDON J:   Thank you.

FRENCH CJ:   If there be a constructional choice, you are presenting us with one and the Attorney with another, what purpose is served by your constructional choice which excludes waters from rateable land?

MR O’FARRELL:   Only, your Honour, that ‑ ‑ ‑

FRENCH CJ:   By purpose I mean legislative purpose, I suppose, yes.

MR O’FARRELL:   Well, because, your Honour, the Valuation of Land Act contains a reference to land and that is what is supposed to be valued.

FRENCH CJ:   That is what it does.  I am just asking what is the purpose of the distinction.

MR O’FARRELL:   Your Honour, in my submission, there is nothing in the history, the context or the purpose which would suggest that Parliament ever intended that an area of the seabed be made available to the Council for rating. 

FRENCH CJ:   Well, it has put the seabed within the municipal boundary, has it not?

MR O’FARRELL:   Yes, your Honour, I would accept that, of course.  It has. 

FRENCH CJ:   Then why leave it out of liability for rating?

MR O’FARRELL:   Your Honour, because those things which are ordinarily constructed and done on land are commonly recognised as things which can be rated.  Those things which are in the middle of the harbour, growing fish and doing all those things which are incidental to that are not, with respect, commonly related to rating.  One would have thought that in the whole of the history and context of this legislation that if the Parliament had intended to bring in things it has seen for the purposes of rating then it would have said so quite plainly.

FRENCH CJ:   It is an historical limitation rather than a purposive one. 

MR O’FARRELL:   Partly, your Honour, partly, but there is, in my submission - I suppose I have to answer your Honour in the negative in a way but there is no discernible purpose in these statutes apart from the Crown Lands Act which we leave to one side which would suggest that the Parliament intended local councils to rate things at sea, effectively.

KIEFEL J:   I suppose the other point that arises from your submissions is one of coherence with the terms of the Valuation of Land Act.

MR O’FARRELL:   Yes, your Honour, we do make that point. Can I draw your Honours’ attention to section 29(2A) of the Crown Lands Act which says that:

The Minister must not grant a lease under this section in respect of an area within State waters as defined by the Living Marine Resources Management Act 1995 for a purpose for which a lease may be issued under the Marine Farming Planning Act 1995.

That was the provision I was trying to think of before.  Effectively, your Honours, we advanced that section as a reason why a lease of Crown land – sorry, a marine farming lease, would not constitute an interest or estate in land, which was the second limb of the argument which was referred back to Justice Blow but which had never been determined.

Your Honours, can I just, perhaps for the purpose of identifying how we say the appeal grounds work, take your Honours firstly to page 40 of the appeal book which is the decision of her Honour Justice Tennent. It is notable, your Honour, we submit, that my learned friend does not rely on Justice Tennent’s judgment. In paragraph 9 of her judgment, her Honour refers to section 11(1) and also to the definition of “land” and then she asks herself what lands may be liable to be rated in Part 9 and finds that all land except for that land which is exempted. Then, over the page, your Honours, towards the bottom, line 40 paragraph 14, is effectively her Honour’s reasoning. She picks up the definition of “land” in the Crown Lands Act.  She says that it:

does not need to include a specific reference to the term “seabed” or the waters above it, because the definition as it stands cannot sensibly refer to anything other than the seabed and the waters above it. This interpretation of the definition of “land” in the Crown Lands Act must lead to a conclusion that the seabed and the waters of Macquarie Harbour are Crown land for the purposes of the Crown Lands Act; or in other words they are land held or owned by the Crown.  As such, it follows they must be “Crown lands that are liable to be rated” because they are not exempt. 

We challenge that conclusion in grounds 2 and 3. We do not find any particular ground in her Honour’s judgment that arises under ground 1. So far as ground 1 is concerned, we submit that it is to be found in Justice Estcourt’s judgment and that is at page 44 of the appeal book. At paragraph 25, line 15, his Honour refers to section 87 of the Local Government Act. If one reads section 87 as “all land that is a parcel of land in a valuation list under the Valuation Act is rateable” then, in my submission, that sends one back to the Valuation of Land Act as opposed to sends one on a – effectively, an inquiry about the Crown Lands Act and the exemptions because in order for that section to work it is susceptible to the definition of “land” in section 86 which refers to a parcel of land in a valuation list.

NETTLE J:    It all comes back to “includes”, does it not, or “including”. 

MR O’FARRELL:   Yes, thank you, your Honour.

KEANE J: Mr Solicitor, can I ask you, in section 87(1)(b) which refers to “land held or owned by the Crown”, that is, a “national park” or “a conservation area” or “a nature recreation area” or “a nature reserve”, et cetera, under the Nature Conservation Act, those various terms, are they defined so as to include land and waters?

MR O’FARRELL:   I think the Nature Conservation Act does have the definition in that Act:

land includes –

(a)      land covered by the sea or other waters; and

(b)      the part of the sea or those waters covering that land ‑ ‑ ‑

KEANE J:   So there are exemptions of land that can include land covered by waters of particular kinds that are set out in the list in 87(1)(b) and would it be fair to say that the feature that is common to all those exemptions is that they are concerned with public use as opposed to private advantage?

MR O’FARRELL:   I would accept that, your Honour, yes.

KEANE J:   So, if there is some rational theme that explains what is rateable land and what is not, is it fair to say that the difference is between land held or owned by the Crown that is dedicated to public use as opposed to private advantage?

MR O’FARRELL:   I would accept that is a difference, your Honour, yes.

KEANE J:   So far as the marine farm leases are concerned they are granted, I take it, for the purpose of enabling the seabed and waters to be exploited by the lessee.

MR O’FARRELL:   That is all correct, your Honour. 

FRENCH CJ:   Well, it is absent the grant of the lease in the relevant area.  Your contention would not be defined by reference to any private use by it, it only comes into existence when the lease is granted. 

MR O’FARRELL:   That is correct, your Honour.  It only crystallises on my learned friend’s case when – it is only referable – I suppose it is only capable of being a parcel of land in a way when the lease is created but that creates other problems because the moment you create a parcel of land then the balance of the land, on my learned friend’s argument, then becomes liable as well to be rated.  So that, we say, would be a surprising conclusion. 

FRENCH CJ:   The rateable land – what is put against you as rateable land is the tenement or interest?

MR O’FARRELL:   Rateable land in the local government?

FRENCH CJ:   I am talking about – looking at the definition of “land”: in the Valuation of Land Act, we are looking at an interest which is created by the grant of the lease. 

MR O’FARRELL:   Correct, your Honour.

FRENCH CJ:   The interest happens to be in relation to what would otherwise be Crown land. 

MR O’FARRELL:   Yes, your Honour, yes, but we submit that that particular definition – well, in the case of Lehrer it was referred to - it “savours of, realty”.  It does not savour of anything that might be found under the sea.  Your Honour, what we say about Justice Estcourt’s formulation of the problem is effectively that he asked himself the wrong question.  He asked what must be rated under the Local Government Act. 

I think, your Honour - this is perhaps the answer we have to the question you asked a minute ago, Justice Keane - he asked what must be rated under the Local Government Act?  We say that the correct question is what must be valued under the Valuation of Land Act? All of the provisions, including the definition of “land” in section 86 of the Local Government Act, point back to the Valuation of Land Act.  So we must, in my submission, start there and once we start there we are fixed, in my submission, with the ordinary and ordinary legal meaning of the word “land” and we say look at Risk effectively.

Now, if I can just make a couple of points about some of the things the Attorney‑General has submitted. Firstly, the Attorney‑General suggests that section 11(1) works as a definitional section because of the use of the word “including”. In my submission that is not correct. The definition enacts substantive law and its purpose is not to define “land” or “Crown land”. That problem is found elsewhere in the Act or not found elsewhere in the Act. Again, we say, it is informed by the ordinary legal meaning.

The second thing, which is perhaps getting back to the in pari materia point – what my learned friend would seek to do is to introduce into the Valuation of Land Act or impute to it the definition of “Crown land” in

the Crown Lands Act.  We submit that is impermissible for two reasons – firstly, because the statutes that is, the Crown Lands Act and the Valuation of Land Act, are not in pari materia and, secondly, because in order to impute a provision in that way one would need to effectively find that there was a disconformity between the words used in section 11 and the statutory scheme evinced by the Act.  We submit that there is no disconformity.  This Act, we say first and last, is about the valuation of land in its ordinary meaning. 

We submit that the reference in the Attorney‑General’s submission to extrinsic material is unhelpful. The second reading speech for the Financial Reform Act does not explain what happened in 2007 when the word “including” was introduced. Secondly, the Minister in the second reading speech simply repeated the text of section 11(1) as it was then to be introduced. But, more importantly, nowhere is it suggested in the second reading speech that it was intended to bring in an ability to value or rate an area of sea or seabed. If your Honours please, those are my submissions.

FRENCH CJ:   Yes, thank you, Mr Solicitor.  Mr McElwaine.

MR McELWAINE:   If your Honours wish to take a moment to read our outline.

FRENCH CJ:   Yes, all right, just take a seat.  Thank you, Mr McElwaine.

MR McELWAINE:   Thank you, your Honour. Clearly, this case turns on some deceptively simple language in section 11, but we say which must be read as part of a cognate legislative scheme with section 87. Where the fundamental departure is between the learned Solicitor and the Attorney‑General is that we say it is not a necessary precondition to the valuation of Crown land that it otherwise be land within the meaning of the Valuation of Land Act, whatever meaning that might be for present purposes.  We accept, as we have said in our written submissions, that ordinarily land does not include the sea or the seabed but, of course, everything depends and turns on the particular statutory context and the words used with which we are concerned. 

We have given the Court in some little detail – and it is in our materials – the detailed legislative history as far we have been able to ascertain and of course we will not take the Court through that.  But what it reveals, and we submit is essentially important, is that until the Financial Reform Act the scheme was that by and large Crown land, or lands of the Crown, or lands occupied by the Crown were exempt.  They were not exempt because of the general provision that one sees at section 6(6) of the Interpretation Act – they were specifically exempt. 

One first sees that as long ago as 1857 with the Hobart Incorporation Act.  Your Honours will see that in the agreed bundle at page 132.  Crown land was always exempt.  Your Honours will see there at the bottom of page 132, section 104, and the reference to the inability to raise or levy rates on:

the property of or occupied on behalf of Her Majesty –

Essentially, that statutory scheme was carried forward until the Reform Act with limited exceptions which we have dealt with in our submissions.  The limited exceptions were service rates and service charges, but only to the extent that services were actually supplied to Crown land.  So it was a consumption levy or a consumption - or an availability, your Honours.

As is clear from the wording of the Reform Act and, we say, is abundantly clear from the second reading speech, there was a significant readjustment of State and local government financial relationships which occurred.  A range of exemptions and limitations which applied as to local government and State Government were dispensed with.  If your Honours turn to the second reading speech which is in the bundle commencing at page 218, your Honours will see in the last third of the last paragraph on 218 the sentence commencing “Non‑discrimination”.  Then, turning the page to the top of 219, your Honours will see the reason for reciprocal taxation arrangements, and the words:

local government will be subject to the full application of State Government taxes and that the State Government will be subject to the rating of its crown land holdings.

The structure of the statutory scheme in consequence of the Reform Act we say is very clear. Instead of general non‑rateability, we have substituted general rateability subject only to prescriptive exemptions. It is perhaps an easy submission to make and perhaps a dangerous one, but clearly it would have been open to Parliament to put another exemption category at section 87, but Parliament did not do that.

There are various categories of exempt land in section 87 which include substantial areas of the seabed. Your Honours will that in our written outline. We have the documentation here if the Court would like to see. But, for example, the boundaries of the South West National Park include the whole of Bathurst Harbour and Port Davey. The South West National Park is, of course, a national park so declared under the Nature Conservation Act which falls within the section. 

The learned Solicitor was taking your Honours to the NatureConservation Act 2002 which defines “Crown land” in the same way as “Crown land” is defined in the Crown Lands Act but also defines “land” as including land covered by the sea. 

Another example which we point to is Hydro‑Electric Corporation land. That is the subject of a specific exemption at section 87(1)(c) in respect of electricity infrastructure assets. Your Honours will see in our written outline we have just handed up, that obviously includes dams. Hydro land is not Crown land. But it includes, obviously, very substantial areas of land covered by water which are specifically exempt. So we say to the extent to which one can discern choices having been made by Parliament, the choices are set out in section 87. Against that background, we turn to the wording of section ‑ ‑ ‑

FRENCH CJ:   …..mean just a general reference to coverage of land which has water on it may be weakened by the specific reference to waters and watercourses on land in the definition of “land” in the VLA.

MR McELWAINE:   Yes, there is, your Honour.  Perhaps I could give an example of that.  That would pick up, we say, large farm dams.  So when the Valuer‑General goes to value a particular property in the Midlands, the large area of the dam falls within the footprint which is the subject of the valuation.  That is an example of how that provision operates, in our submission. 

FRENCH CJ:   Does it matter how big the dam is?

MR McELWAINE:   Probably not, your Honour, no, but there are some large ones.  So, one then turns to the apparently deceptively simple language at section 11.  The contest in the arguments is absolutely clear.  Our position is  – or the Attorney’s position is the concept of including any Crown lands liable to be rated is not cut down by the words which precede it.  It is deliberate drafting, we submit, which expanded what otherwise might have been the valuation obligation. 

The Court asked the learned Solicitor some questions about what is the effect of section 11(1A) - if I may turn to that in the Valuation of Land Act which one sees at page 39 at the front. This case is concerned with eight marine farming leases which are within the municipal area of the west coast. That is only because the central plan register which is picked up in Schedule 3 of the Local Government Act through section 16, is a plan which shows the municipal area as having been drawn across the very narrow heads of Macquarie Harbour.  That is not generally the case.  If one looks at, for example, the central plan register for Hobart, it is drawn at the low‑water mark.

So the same sorts of problems do not arise in the River Derwent.  That, in part, answers the submission that was put in the written submissions of the Solicitor‑General.  Where does this end?  Is it an ever‑extending obligation?  The answer is, generally speaking, these problems do not arise because municipal areas are confined to the low‑water mark. 

In this particular case, and as was admitted on the pleadings – not that we say this case turns on the pleadings – there has never been any dispute that we are dealing with Crown land within the municipal district of West Coast. So against that, if one then turns to section 11(1A), an obvious example of when the Valuer‑General may exercise his discretion – we would accept may well do so lawfully – is to say, all right, I will not value the whole of Macquarie Harbour, I will only value the area, the subject of these leases. He has given that discretion. It is a relatively uncontrolled discretion.

But the distinction we say is, here we have the State Government exploiting Crown land for commercial purposes.  There is no logical reason why those leases ought not be rated.  My learned friend, in his submissions, describes Crown land as simply a subset of the lands to be valued.  With respect, the Solicitor‑General is submitting inconsistently.  His whole argument is that Crown lands must be greater than lands per se.  They simply cannot be a subset.

KIEFEL J: Speaking of subsets, the definition of “land” in section 3 of the Valuation of Land Act does appear to include waters and watercourses as an incidental aspect of land, does it not – “land” in its ordinary sense?

MR McELWAINE:   Yes, that is true, your Honour.  I suppose one thing that one can say about this case is there are arguments either way – it clearly would not have come this far if there were not.  The legislative scheme is not abundantly clear.  One other aspect, if I could just stay with section 11, it is not only the rating for purposes of local government which the section is dealing with.  It is, for example, dealing with the imposition of duties under the Duties Act and land tax.  It is a general obligation to provide valuations to taxing authorities for other purposes under other Acts. 

Now, under the particular statutory scheme which governs local government, one cannot impose a rate or charge unless the particular property is rateable land. Under section 3 of the Local Government Act, your Honours will see “rateable land” is defined as meaning land in respect of which rates are payable. One then reads that with the definition of “land” at section 86, means a parcel of land which is shown as being separately valued. Unless it gets on to the list, there is no question of rateability.

We say in the context of this case it is essentially important to give effect to what is the clear legislative purpose of the Reform Act. The arguments put against us, with respect, do not. They seek to cut down the Reform Act and create further exemptions which Parliament did not choose to specify in the list. We say, essentially, this is now a prescriptive specification system of exemptions, if at all. We say, yes, there are two limbs to section 11(1) but the second is not dependent on the first. One cannot state the difference in the arguments more simply than that.

NETTLE J:   Mr McElwaine, you expressly disavowed the Chief Justice’s indication of the in pari materia rule.  You still do?

MR McELWAINE:   At this level, no, I now do not, now that I have listened carefully to the arguments of the Court.  We have re‑characterised it – instead of the in pari materia rule to say that it is simply a cognate legislative scheme and we were criticised for that.  But, no, at this level, I now do not disavow it having listened carefully to the arguments from the Bench.

FRENCH CJ:   I do not think we are putting any.

NETTLE J:   They might well be wrong.

KIEFEL J:   We do not argue, we just assist.

MR McELWAINE: The problem which we faced, your Honours, is that identified by Justice Pearce in his reasons at paragraphs 62 and 63 which commences at page 52 of the appeal book. His Honour’s reasoning at paragraph 63, at least until a little while ago, seemed somewhat persuasive that the Crown Lands Act does not form part of the rational integrated legislation created by the Valuation of Land Act. 

We saw the pathway around that was to simply say, well, in this State, Crown land has a particular meaning.  In very many statutes – and we have footnoted them in our written submissions – Crown land is simply referred to.  It is not defined.  There is no cross‑referencing to the Crown Lands Act.  Another variation of the scheme is, a number of statutes define “Crown land” but differently to the Crown Lands Act and some define them as consistent with the Crown Lands Act. 

In the first category of case which we say this case falls into, it picks up, we say, land that has a particular characteristic or status.  It either is Crown land or it is not Crown land.  Otherwise, what does “Crown land” mean?  Does its meaning vary across all of those statutes?  Why have a Crown Lands Act which provides for a definition and management system of Crown land if it does not have a meaning which then has utility in subsequent statutes.  So the starting point is a system of land classification.  That is the Crown Lands Act. 

The next step is, in this scheme, is it correct to construe the LocalGovernment Act and the Valuation of Land Act as picking up land which has a particular status and then applying some rules to it.  We say, yes, that is the statutory scheme in this particular case.  If that is right, then we submit, with respect, the primary submission is correct and that is essentially the pathway of reasoning of Justice Estcourt which we come here today to support. 

If that is wrong, we have a more difficult pathway.  We accept that.  We accept what was said in Risk.  But, of course, what was said in Risk is not the final word so far as this statutory scheme is concerned.  One turns to the later decision of this Court in Northern Territory v Arnhem Land Aboriginal Trust, which your Honours will have at page 85 of the agreed authorities bundle.  The particular passage which we draw to the Court’s attention is paragraph 58 on page 88.

By reference to similar reasoning we say step one is Macquarie Harbour is drawn within, not without, the municipal boundary.  Step two is it is therefore within a valuational rating district under the Valuation of Land Act.  Step three, it is Crown land and step four, it must include Crown land covered by water.

It is also consistent, we say, with the ordinary and natural meaning of the phrase “Crown land” of which Justice Isaacs spoke in the Royal Metals Case.  The particular passage is at page 19 of the authorities bundle.  It is the first and second sentences of the second paragraph, your Honours, commencing “The meaning of the expression”.  So what we say is, even if the scheme does not pick up the statutory definition, we fall back to the ordinary meaning of the words “Crown land” which clearly, and on the pleadings, included this portion of the seabed.

Your Honours might find of assistance some of the definitions of “land” to which Justice of Appeal Basten drew attention to in Chief Commissioner of State Revenue v Pacific National.  Your Honours will see that at page 9 of the bundle, commencing at paragraph 73 and through to and including 75. 

Of course, there is the single Judge decision of Justice Mason of this Court in Goldsworthy Mining, which we accept was not entirely embraced in Risk but still stands as, we say, persuasive authority for the general proposition that in some contexts “land” may include the seabed – a point which Justice Callinan drew attention to in summary in Risk from paragraph 117. 

Your Honours will see that at page 145 of the bundle.  It is Justice Callinan’s decision commencing at 117 and through to 121 where he sets out the essentially important passages – first from the Royal Metals Case that “land” simply means a “defined portion of the terrestrial globe”.  I realise I am beginning to skate on thin ice because the terrestrial globe normally refers to terrestrial as land, but we say in certain contexts can include the sea and the seabed.

Your Honours, the problems which are thrown up by Risk, we say are not problems in this case because of the way in which the statutory scheme is assembled. On the alternative argument, if “Crown land” has its ordinary and natural meaning, simply meaning lands belonging to or owned by the Crown, then that is sufficient on the alternative argument. We place reliance then on the structure of the statutory scheme, that is, section 87, all land is rateable, whereas as Crown land before was not, except to the extent to which there is a list of prescriptive exemptions and it does not include land covered by the sea, although, as I attempted to illustrate, in certain of the exemptions, does include the seabed and does include water on the mainland.

So, so far as achieving the statutory purpose is concerned – consistently with sections 8 and 18 of the Interpretation Act – we say that the plain purpose of this whole scheme was to remove general exemptions and substitute general rateability.  If that is so, it follows that section 11 ought to be construed consistently with that purpose so that the second limb is not cut down by the first.  Unless there is any other point that your Honours would require assistance upon, I would say that frames the argument, if it please.

FRENCH CJ:   Thank you, Mr McElwaine.  Yes, Mr Solicitor.

MR O’FARRELL:   If your Honours please.  Firstly, your Honours, there were some questions directed to my learned friend about the definition of “land” in the Valuation of Land Act and the issue of watercourses under that definition.  If I can refer your Honours to the judgment of Justice Blow at first instance, at page 28 of the appeal book, at about line 35 in paragraph 19, your Honours we, I suppose in shorthand, adopt that paragraph as our submission about the meaning of paragraph (a). 

Secondly, your Honours, my learned friend was asked about the in pari materia rule.  We submit that the judgment of Justice Pearce remains highly persuasive of the non‑application of that rule to the CrownLands Act.  Further, your Honours, my learned friend’s reference to the Northern Territory v Arnhem Land Case and the steps that he took the Court to, in my submission do not give any effect in the statutory scheme in

the Local Government Act to the definition of “land” in section 86(1). That section, as I say, sends the inquiry back to the Valuation of Land Act. 

Fourthly, my learned friend referred to Commonwealth v New South Wales and to the reference to Crown land or the State Acts in that case and Justice Isaacs – this is at page 19 of the combined bundle – in that case, pointed out that it is not the phrase familiar in State Acts, Crown lands which has a different signification specially framed for the purposes of the State department and we would say the same applies to the Crown Lands Act 1976 (Tas) that it is specially framed for the purposes of the management, sale and disposal of Crown land by the Minister.

Your Honours, just in closing, my learned friend referred to Justice Callinan in Risk.  If I can refer your Honours also to the judgment of the plurality which is at page 114 of the combined bundle – paragraphs 26 and 27 – and then to Justice Gummow at page 128 of the combined bundle, paragraphs 78 and 80.  In my submission, those passages support the judgments of the judges of the Federal Court.  If your Honours please.

FRENCH CJ:   Thank you, Mr Solicitor.  The Court will reserve its decision.

The Court adjourns until 10.15 tomorrow morning.

AT 3.23 PM THE MATTER WAS ADJOURNED