Grand Ridge Plantations Pty Ltd v Valuer-General Victoria
[2024] VSC 129
•22 March 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST
S ECI 2021 04209
| GRAND RIDGE PLANTATIONS PTY LTD | Applicant |
| v | |
| VALUER-GENERAL VICTORIA | Respondent |
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JUDGE: | Richards J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13–14 November 2023 |
DATE OF JUDGMENT: | 22 March 2024 |
CASE MAY BE CITED AS: | Grand Ridge Plantations Pty Ltd v Valuer-General Victoria |
MEDIUM NEUTRAL CITATION: | [2024] VSC 129 |
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VALUATION OF LAND — Appeal of determination of objection by the Valuer-General — Capital improved value of land used for forestry plantation — Whether forest produce forms part of land for valuation purposes where land subject to forestry legislation — Forest produce forms part of land to be valued — Appeal dismissed — Forests Act 1958 (Vic), ss 4, 42, 51, 52, 80, 82 — Victorian Plantations Corporation Act 1993 (Vic), Pts 3, 3A, ss 3, 22, 23, 27B.
PRACTICE AND PROCEDURE — Nature of appeal to the Court of determination of objection by the Valuer-General — Whether appeal differs from review by the Victorian Civil and Administrative Tribunal — Appeal to the Court an appeal de novo — Court’s powers on appeal limited only by scope of appeal and powers under the Valuation of Land Act 1960 (Vic) — Valuation of Land Act 1960 (Vic), Pt III Div 4, ss 21, 22, 23, 24, 25.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr S Goubran KC with Mr C Hibbard | MinterEllison |
| For the Respondent | Mr D Batt KC with Mr G Kozminsky and Ms E Bergin | Land Use Victoria Legal |
TABLE OF CONTENTS
Introduction
Summary of conclusions
The Strzelecki Property
Capital improved value — does ‘forest produce’ form part of the land in question?
Forests Act — relevant provisions
VPC Act — relevant provisions
Grand Ridge’s submissions
Valuer-General’s submissions
Consideration
Procedural questions
Valuation Act — relevant provisions
What is the nature of an appeal to the Court under s 23 of the Valuation Act?
What are the Court’s powers on an appeal from a determination under s 21(4) of the Valuation Act?
Valuer-General’s submissions
Grand Ridge’s submissions
Consideration
Disposition
HER HONOUR:
Introduction
This proceeding concerns the assessment of the capital improved value of land used for plantation forestry. The central question for determination is whether ‘forest produce’ in the form of trees growing in State forests subject to the Forests Act 1958 (Vic) and on vested land under the Victorian Plantations Corporation Act 1993 (Vic) (VPC Act) forms part of that land for valuation purposes. The question arose in the following way.
As at 1 January 2019, Grand Ridge Plantations Pty Ltd[1] owned or occupied 771 parcels of land in Gippsland, known as the Strzelecki Property, which it uses primarily for the commercial production of plantation timber. The land that makes up the Strzelecki Property is a combination of freehold, State forest that is leased to Grand Ridge under the Forests Act, and land that is licensed to Grand Ridge under the VPC Act. There are three bundles of land within the Strzelecki Property: the Flynns Creek land and the Hiawatha land, which are located within Wellington Shire, and the Koornalla land, which lies within Latrobe City.
[1]Grand Ridge is a wholly owned subsidiary of Hancock Victorian Plantations Pty Limited.
Grand Ridge is liable to pay municipal rates on all of the land that comprises the Strzelecki Property, regardless of tenure.[2] The rates are levied based on the capital improved value of the land, as determined by the relevant valuation authority.[3]
[2]Local Government Act 1989 (Vic) ss 154(2)(a), 155, 156(3), 156(5A).
[3]Valuation of Land Act 1960 (Vic) s 13DC (Valuation Act).
In August 2019, the Wellington Shire Council and the Latrobe City Council issued valuation and rates notices in respect of the various parcels of land that comprise the Strzelecki Property. Pursuant to s 16 of the Valuation of Land Act 1960 (Vic) (Valuation Act), Grand Ridge objected to the rating valuations for the 2019–20 rating year, on which these notices were based. In each case, the grounds for the objection were, first, that lands that should have been included in one valuation had been valued separately and, second, that the capital improved value assessed on the whole was too high.[4]
[4]Valuation Act, s 17(a), (d).
On 31 January 2020, the Wellington Shire Council’s valuer, Daniel Scarfo, recommended an adjustment to the valuations in respect of the Flynns Creek land and the Hiawatha land. Mr Scarfo accepted the first ground of objection, and included all of the Flynns Creek land in one valuation, and all of the Hiawatha land in a second valuation. On 11 February 2020, the Latrobe City Council’s valuer, Steven Bailey, made a similar recommended adjustment to the valuations in respect of the Koornalla land. Both recommendations were made to the Valuer-General, in accordance with s 21(3)(b) of the Valuation Act.
On 20 March 2020, the Valuer-General confirmed Mr Scarfo’s recommended adjustments in respect of the Flynns Creek land and the Hiawatha land, pursuant to s 21(4)(b) of the Valuation Act. The Valuer-General did not determine the objection to the valuation of the Koornalla land within two months of receiving Mr Williams’ recommendation, and was deemed by s 22(3) of the Valuation Act to have made a decision disallowing the recommended adjustment. However, on 6 May 2020, the Valuer-General gave notice that he confirmed the adjustment to the valuation of the Koornalla land.
On 17 April 2020, Grand Ridge made three applications to the Victorian Civil and Administrative Tribunal (VCAT) under s 22 of the Valuation Act, seeking review of the Valuer-General’s decisions of 20 March 2020 confirming the valuations of the Flynns Creek land and the Hiawatha land, and the Valuer-General’s deemed decision disallowing the recommended adjustment to the valuation of the Koornalla land. The only ground for each application for review was that the value assigned to the land was too high.[5]
[5]Valuation Act, ss 17(a), 24(1).
Grand Ridge subsequently applied to have the applications treated as appeals to the Supreme Court, under s 23(3) of the Valuation Act. The Valuer-General consented to that application, which was referred to me for consideration. After considering written submissions filed by the parties, I was satisfied that the applications raised questions of unusual difficulty and general importance concerning the valuation of land used for plantation forestry, and the interpretation of the Forests Act and the VPC Act. A question of particular difficulty concerned the value (if any) to be attached to the potential to use ‘forest produce’ (including timber) on Crown land leased under the Forests Act and land licensed under the VPC Act, in assessing the capital improved value of the land. On 25 January 2022, I made an order pursuant to s 23(3) of the Valuation Act that the applications be treated as an appeal to this Court.
In October 2023, Grand Ridge made four further review applications to VCAT in relation to the valuation of the Strzelecki Property. Three of these concerned the valuers’ recommended adjustments under s 21(3)(b) of the Valuation Act. The fourth sought review of the Valuer-General’s belated confirmation of the recommendation adjustment to the valuation of the Koornalla land. After VCAT extended the time for making all four applications,[6] the parties requested that they be treated as an appeal to the Supreme Court. I made orders to that effect on 20 October 2023.
[6]Grand Ridge Plantations Pty Ltd v Valuer-General Victoria (Land Valuation) [2023] VCAT 1173.
All seven applications were heard as a single appeal to this Court on 13 and 14 November 2023.
The substantive question for determination was whether ‘forest produce’ on land held under the Forests Act and the VPC Act formed part of the land for the purposes of assessing its capital improved value. The Valuer-General’s position was that trees and other forest produce form part of the land to be valued regardless of land tenure, and that the valuations correctly included forest produce in the assessment of capital improved value. Grand Ridge contended that forest produce should be excluded when assessing the capital improved value of land it holds under the Forests Act and the VPC Act. The Valuer-General maintained that the capital improved value of the Strzelecki Property was correctly assessed to be $110,895,000, while Grand Ridge argued that it should be reduced to $57,670,247.
The appeal also raised procedural questions as to the nature of an appeal to the Supreme Court under s 23 of the Valuation Act, and the scope of the Court’s powers on such an appeal.
Summary of conclusions
The questions for determination in the appeal, and a summary of my conclusions in relation to each question, are as follows:
Capital improved value
(1) For the purpose of determining the capital improved value under the Valuation Act, is ‘forest produce’ part of the land to be valued where that land is:
(a) reserved forest under the Forests Act;
(b) protected forest under the Forests Act;
(c) vested land under the VPC Act?
Yes. Forest produce, including timber, is part of the land to be valued in each case. The Valuation Act provides that the capital improved value of land is to be determined as ‘if it were held for an estate in fee simple’. An estate in fee simple is the highest estate in land; it is unencumbered, and subject only to restrictions imposed by public laws of general application. The Forests Act and the VPC Act are not laws of this kind. Rather, they apply only to certain land held by the Crown under the Forests Act and by the Victorian Plantations Corporation under the VPC Act. They are specific to those two landholders, under those two statutes, and do not translate to the hypothetical estate in fee simple that is used to determine capital improved value.
Procedural questions
(2) What is the nature of an appeal to the Court under s 23 of the Valuation Act? How, if at all, does it differ from a review by VCAT under s 22 of the VLA?
An appeal to the Court under s 23 of the Valuation Act is an appeal de novo, in which the Court is to determine for itself the merits of the matter referred to it as an appeal. The Court is to hear the matter afresh, and need not identify error. While the Court should have due regard to the original decision, it is not confined to the material that was before the decision-maker.
However, an appeal under s 23 is not identical in every respect to merits review by VCAT under s 22. An appeal to the Court is not subject to the provisions of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act). The hearing and determination of an appeal under s 23 is an exercise of judicial power by a superior court, as distinct from an administrative decision made while standing in the shoes of the original decision-maker.
(3) What are the Court’s powers on an appeal relating to the Valuer-General’s determination of an objection under s 21(4) of the Valuation Act?
On an appeal to the Court concerning the Valuer-General’s determination of an objection under s 21(4) of the Valuation Act, the Court has the powers set out in s 25(1), limited only by the scope of the appeal as provided in s 24. The Court is not confined to the choices available to the Valuer-General under s 21(4) to determine the objection.
These are my reasons for those conclusions.
The Strzelecki Property
The Strzelecki Property is an area of 61,240.90 hectares, roughly elliptical in shape. It is 25 kilometres wide at its widest point, and extends about 67 kilometres from the south-west to the north-east. As mentioned, the Strzelecki Property is held by Grand Ridge under various forms of tenure, specifically:
(a) about 23,362 hectares is freehold land;
(b) approximately 12,899 hectares is Crown land comprising ‘reserved forest’ and ‘protected forest’ leased from the Crown under the Forests Act;
(c) about 23,380 hectares is ‘vested land’ licensed from the Corporation under the VPC Act; and
(d) the balance is unused road and water frontage licensed from the Crown under the Land Act 1958 (Vic).
Figure 1 shows the Strzelecki Property as a whole, by reference to the different forms of tenure. Freehold land is shaded pink, Crown land is shaded blue, and VPC land is shaded yellow.
Figure 1: Map of the Strzelecki Property showing land tenures, Report of Will Gurry dated 19 August 2022, [215].
For valuation purposes, the Strzelecki Property was assessed in three parts: the Flynns Creek land, the Hiawatha land, and the Koornalla land.
The Flynns Creek land is a total area of 21,287.70 hectares at Maxfields Road, Flynns Creek. About 68% of the land is used for timber plantations, with the remainder being remnant vegetation and infrastructure.
The initial valuation comprised 42 separate assessments that assessed the capital improved value of the Flynns Creek land as at 1 January 2019 to be $42,857,000 in total. The valuer recommended that this valuation be adjusted $42,860,000, and the Valuer-General confirmed this recommended adjustment on 20 March 2020.
The Hiawatha land is located at Christies-Albert River Road, Hiawatha. It extends across 14,561.80 hectares, of which 48% is used as timber plantations.
There were 38 separate valuations returned for the parcels of land that make up the Hiawatha land, which assessed a combined capital improved value of $22,089,000. The recommended adjustment was to $22,085,000, which the Valuer-General also confirmed.
The Koornalla land is at Taylors Road, Koornalla, Victoria. It covers an area of 25,391.40 hectares, 52% of which is used for timber plantation.
The Koornalla land was initially valued in 35 separate assessments to have a capital improved value of $46,600,000 in total. The valuer recommended that this valuation be adjusted to $45,950,000. While the Valuer-General was deemed to have disallowed this recommended adjustment, because he did not confirm it within the prescribed two month period, he has since confirmed the adjustment.
Capital improved value — does ‘forest produce’ form part of the land in question?
The substantive question for determination in this appeal is whether ‘forest produce’ (including timber) forms part of the land when assessing its capital improved value, where that land is reserved forest and protected forest leased under the Forests Act and vested land licensed under the VPC Act. It was because of the importance and difficulty of this question that I considered the matter should be treated as an appeal to this Court.
The starting point for considering this question is the definition of ‘capital improved value’ in s 2(1) of the Valuation Act:
capital improved value means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realize at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require;
The capital improved value of land is to be assessed in accordance with s 5A of the Valuation Act, which relevantly provides:
(1) Unless otherwise expressly provided where pursuant to the provisions of any Act a court board tribunal valuer or other person is required to determine the value of any land, every matter or thing which such court board tribunal valuer or person considers relevant to such determination shall be taken into account.
…
(3) Without limiting the generality of the foregoing provisions of this section when determining such value there shall, where it is relevant, be taken into account—
(a) the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;
(b) the effect of any Act, regulation, local law, planning scheme or other such instrument which affects or may affect the use or development of such land;
(c) the shape size topography soil quality situation and aspect of the land;
(d) the situation of the land in respect to natural resources and to transport and other facilities and amenities;
(e) the extent condition and suitability of any improvements on the land; and
(f) the actual and potential capacity of the land to yield a monetary return.
In Valuer-General v AWF Prop Co No 2 Pty Ltd,[7] the Court of Appeal held:
In applying the definition of capital improved value, it is necessary first to identify the land in question, which involves identifying the metes and bounds of the relevant parcel (ie determining what the actual geographic area is) and what is included in the land, which brings it within the fixtures/chattels doctrine and s 154A [of the Property Law Act 1958 (Vic)]. Only once the land has been identified is the valuer asked to assess its value as a hypothetical unencumbered fee simple estate. To work backwards from the assumed estate to determine what the land is comprised of is to invert the proper order of the enquiry.
[7](2021) 65 VR 327, [153].
Grand Ridge contends that forest produce — specifically timber — is not included in the Crown land leased to it under the Forests Act and vested land licensed to it under the VPC Act, and so should not be taken into account in assessing the capital improved value of that land. This contention is based on certain provisions of the Valuation Act, the Forests Act, and the VPC Act as at 1 January 2019, the date at which the Strzelecki Property was valued.
On 13 December 2023, after I had reserved judgment on the appeal, some significant amendments to the Valuation Act came into effect. The State Taxation Acts and Other Acts Amendment Act 2023 (Vic) inserted a new s 2(2B) into the Valuation Act, which now provides that in determining the capital improved value of any land, the sum which the land might be expected to realize at the time of valuation includes the value of the fixtures on the land. In addition, ‘fixture’ is now defined in s 2(1) of the Valuation Act to mean anything that constitutes a fixture at law, and any other item fixed to the land. These amendments are not relevant to the determination of the appeal, but their effect will have to be considered in future assessments of the capital improved value of land used for plantation forestry.
Forests Act — relevant provisions
The Forests Act governs the management and protection of ‘State forest’, which is defined to include ‘reserved forests and protected forests’.[8] Those terms are in turn defined in s 3(1):
protected forest includes all unoccupied Crown land proclaimed as a protected forest pursuant to this Act or any corresponding previous enactment and every unused road and every water frontage as defined in the Land Act 1958;
…
reserved forest means reserved forest within the meaning of subsection (1) of section forty-two of this Act;
[8]Forests Act 1958 (Vic) s 3(1) (definition of ‘State forest or forest’).
Section 4 of the Forests Act provides:
Forest produce is property of the Crown
(1)All forest produce in State forest is the property of the Crown.
(2) Property in forest produce only passes from the Crown to another person in accordance with this Act.
The term ‘forest produce’ is defined in s 3(1) as follows:
forest produce means—
(a) all parts of trees or plants, including any parts below the ground;
(b) the products of trees or plants, whether or not those products have become separated from those trees or plants prior to being harvested and includes—
(i) honey;
(ii) beeswax;
(iii) oil distilled from any species of eucalypt;
(iv) firewood;
(c) stone, gravel, limestone, lime, salt, sand, loam, clay or brick-earth—
but does not include—
(d) gold, silver, metals or minerals; or
(e) subject to any specific provision to the contrary, timber resources within the meaning of the Sustainable Forests (Timber) Act 2004;
Section 7 of the Forests Act prohibits the cutting and removal of timber and forest produce in State forest, except in accordance with the regulations under the Act.[9]
[9]Forests Act, s 7(1).
Section 42(1) identifies certain land dedicated as ‘reserved forests’, while the balance of s 42 restricts the conveyance and alienation of reserved forests except in accordance with the Forests Act. At the relevant time, s 42 provided:[10]
[10]Section 42 has since been amended to update the reference to the sovereign, from ‘Her Majesty’ to ‘His Majesty’.
Reserved forests
(1) Subject to any adjustment of boundaries made as hereinafter provided and subject to any excision made under any repealed Act or enactment—
(a) all unoccupied Crown land within the areas mentioned in the Second Schedule to this Act;
(b) all land dedicated as permanent forests or as timber reserves before the commencement of the Forests (Further Amendment) Act 1962 pursuant to any enactment repealed by that Act or any corresponding previous enactment; and
(c) all land dedicated pursuant to this Act after the said commencement as reserved forests—
shall be reserved forests.
(2) A reserved forest or any part thereof shall not be alienated either wholly or in part for any estate in fee simple or for any lesser estate save as hereinafter expressly provided.
(3) Every conveyance and alienation of a reserved forest or any part thereof in contravention of this section shall be absolutely void as well as against Her Majesty as against all other persons whomsoever.
…
(8) Notwithstanding anything in this section the Governor in Council may acquire by exchange of land dedicated as a reserved forest—
(a) any alienated land or any Crown land licensed or leased with an inchoate right of purchase; or
(b) any land, public or private, and whether vested in trustees or otherwise—
and may execute the proper conveyances accordingly, and may by Order published in the Government Gazette dedicate the land as a reserved forest but no Order in Council for the acquisition by exchange of any Crown land licensed or leased with an inchoate right of purchase shall be made unless on the recommendation of the Secretary.
…
Section 58(1) provides that the Minister may at any time proclaim unoccupied Crown land to be a protected forest and may at any time alter or revoke such proclamation. Generally, a proclamation has the effect that all forest produce in protected forest is under the control and management of the Secretary.[11]
[11]Forests Act, s 58(3)(b). For protected forest that is Parks Victoria recorded land, most forest produce is under the control and management of Parks Victoria, although the Secretary has control and management of forest produce that is fallen or felled trees in a firewood collection area: Forests Act, s 58(3)(a).
Leases of land in reserved forests are provided for by s 51, pursuant to which the Minister may lease any Crown land in a reserved forest:
Leases of land in reserved forests
(1)The Minister may lease any Crown land in a reserved forest for a term of not more than 21 years for any purpose that the land manager recommends.
(2) The Minister may lease any Crown land in a reserved forest for a term of more than 21 years but not more than 65 years, if the Minister is satisfied that—
(a) the proposed use, development, improvements or works that are specified in the lease are of a substantial nature and of a value which justifies a longer term lease; and
(b) the granting of a longer term lease is in the public interest.
(3)A lease under this section is subject to—
(a) the covenants, terms and conditions that are determined by the Minister; and
(b) the payment of royalties as determined by the Minister.
(4) The Minister may, for the purposes of entering into a lease of any Crown land in a reserved forest under this section, enter into an agreement to lease that land.
(5) If the Minister enters into an agreement to lease Crown land in a reserved forest under subsection (4) and the agreement to lease grants a right to occupy land for a period of time, that period and the period of any lease entered into consequent on the agreement must not, when added together, exceed the maximum lease term permitted under this section.
Section 52 provides for licences and permits to be granted in respect of both reserved forest and protected forest. Relevantly, the Minister may grant a licence or permit to cut, dig, and take away forest produce, or to thin, cut, and remove timber in a reserved forest or protected forest.[12] The licence or permit may be ‘subject to any terms and conditions that may be prescribed, any additional covenants, terms and conditions that the Minister considers appropriate to impose in a particular case, and the payment of any rent, fees, royalties or charges that the Minister may determine’.[13]
[12]Forests Act, s 52(1A)(d)–(g), (1B).
[13]Forests Act, s 52(1).
Pursuant to s 80(1), all forest produce cut or obtained in a forest for which royalties, duties or charges are payable under the Forests Act remains the property of the Crown, and may be seized and detained or removed by any authorised officer or police officer until they are paid.
Finally, s 82 creates a rebuttable presumption as to the ownership of forest produce in favour of the Crown. In any proceedings under the Forests Act with respect to any forest produce, the forest produce is presumed to be the property of the Crown in the absence of evidence to the contrary.
VPC Act — relevant provisions
The VPC Act’s main purpose is to confer additional functions and powers on the Victorian Plantations Corporation, a State body established under the State Owned Enterprises Act1992 (Vic).[14] It also makes provision for the management of plantations on ‘freehold land’,[15] ‘managed land’,[16] and ‘vested land’.[17] Relevantly here, ‘vested land’ is defined to mean land vested in the Corporation under Pt 3, Div 1 of the VPC Act.[18] The land within the Strzelecki Property that is licensed to Grand Ridge under the VPC Act is all ‘vested land’.
[14]Victorian Plantations Corporation Act 1993 (Vic) s 1 (VPC Act).
[15]VPC Act, Pt 3, Div 2.
[16]VPC Act, Pt 3, Div 1.
[17]VPC Act, Pt 3, Div 3.
[18]VPC Act, s 3 (definition of ‘vested land’).
Section 3 of the VPC Act defines forest produce as follows:
forest produce means—
(a) vegetation of any kind, whether living or dead; or
(b) any produce or substance derived from vegetation; or
(c)stone within the meaning of the Mineral Resources (Sustainable Development) Act 1990; or
(d) honey or beeswax—
but does not include a mineral within the meaning of the Mineral Resources (Sustainable Development) Act 1990.
Part 2 of the VPC Act provides for the powers of the Corporation. Relevantly, s 5 provides for additional powers relating to plantations, including:
Additional powers relating to plantations
(a) to take or convert or permit the taking or conversion of forest produce from freehold land, managed land or vested land;
(b) to sell or otherwise dispose of forest produce which it takes;
(c) to charge royalties, rent or fees for—
(i) forest produce that the Corporation permits to be taken; or
(ii) leases, licences, permits or other authorities granted by the Corporation; or
(iii) services provided by the Corporation.
Part 3 of the VPC Act relates to plantations, and includes Div 1 relating to vested land. Section 9 deals with the consequences of land vesting in the Corporation:
Consequences of vesting
(1) On its vesting in the Corporation under this Division, vested land—
(a) ceases to be subject to any permanent or temporary reservation applying to it under the Crown Land (Reserves) Act 1978;
(b)ceases to be reserved forest;
(c) except as otherwise provided in this Act, ceases to be subject to the Forests Act 1958.
(2) This section does not—
…
(c) bring vested land under the operation of the Transfer of Land Act 1958; or
…
In Div 2 of Pt 3, s 20(2) of the VPC Act provides that the Corporation may ‘grant leases, licenses or permits over vested land’.
Division 4 of Pt 3 contains general provisions relating to plantations, including s 22:
Property in forest produce
(1) The Corporation owns forest produce on freehold land and vested land.
(2) Property in forest produce owned by the Corporation passes from the Corporation to a person authorised to take the produce when the produce is taken in accordance with that authority and any appropriate royalty is paid.
Under s 24(1), it is an offence for a person to take forest produce owned by the Corporation except in accordance with the VPC Act and a lease, licence, permit or other authority authorising that taking. Section 24(2) provides that forest produce must also be taken in accordance with any relevant approved code of practice under Pt 5 of the Conservation, Forests and Lands Act 1987 (Vic).
Part 3A of the VPC Act establishes a plantation licensing regime for forestry businesses. Section 27B relevantly provides:
Grant of licence for forestry business
(1) Without limiting section 20(2), the Corporation may grant a perpetual licence over all or any part of vested land—
(a) to establish, maintain and manage timber plantations on that land; and
(b) to take or convert forest produce on that land—
and to do all other things necessary or convenient to be done for or in connection with, or as incidental to, paragraph (a) or (b).
(2) Despite section 22, on the granting of a licence under this section over vested land, forest produce on that vested land becomes the property of the licensee.
Section 23(1) of the VPC Act applies certain provisions of the Forests Act to vested land, including ss 80 and 82.[19]
[19]See [38]–[39] above.
Grand Ridge’s submissions
Grand Ridge acknowledged that the estate in fee simple to be valued in determining the capital improved value of land is the ‘largest estate in land known to the law’ and ‘is as close to absolute ownership as the law permits’.[20] However, it argued that the common law’s concept of ‘an estate in fee simple’ could be amended by statute.[21] It submitted that both the Forests Act and the VPC Act establish a regime that separates ownership of ‘forest produce’ from ownership of the land on which forest produce is located. Each of those statutory regimes ‘affects or may affect the use or development of such land’, and so s 5A(3)(b) of the Valuation Act requires it to be taken into account when determining the value of the land. Grand Ridge submitted that the forestry legislation was no different from the planning controls that applied to Southern Cross Station, which had to be taken into account in Public Transport Development Authority v Commissioner of State Revenue.[22]
[20]Referring to Obeid v Victorian Urban Development Authority (2012) 188 LGERA 56, [79].
[21]Referring to Northern Territory v Arnhem Land Trust (2008) 236 CLR 24 at [48], [50] (Gleeson CJ, Gummow, Hayne and Crennan JJ), [141] (Kiefel J); Fejo v Northern Territory (1998) 195 CLR 96, [43] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); Valuer-General v AWF Prop Co No 2 Pty Ltd (2021) 65 VR 327, [153]; Alan Hyam, The Law Affecting Valuation of Land in Australia (6th ed, 2020), 21–3 (Valuation of Land in Australia).
[22][2017] VSCA 266, [42].
In respect of the Forests Act, it made the following submissions:
(a) The Forests Act reveals an intention to keep interests in the forest produce on land that is reserved forest and protected forest separate from interests in the ‘real property’ aspects of that land.
(b) While the Crown has title in respect of reserved forest land and protected forest land, it does not necessarily follow that it also has title in the forest produce on that land. Section 4 of the Forests Act serves the purpose of ensuring that forest produce in reserved forest and protected forest is the property of the Crown. In the case of protected forest, this is reinforced by s 58, which relevantly provides that forest produce is under the control or management of the Secretary.[23]
(c) Accordingly, the proprietary restriction in s 4 must continue to apply to the hypothetical estate in fee simple that is posited by the Valuation Act. It is a restriction imposed by statute that affects the use or alienability of the land, so that the bundle of rights associated with ownership of the land does not extend to ownership of the forest produce. Grand Ridge sought to distinguish the restriction in s 4 from the restrictions on alienating reserved forest in s 42(2) and (3), which it said bore directly on the underlying Crown land and were not relevant to the assessment of a hypothetical estate in fee simple.
(d) As a result, the valuation of the capital improved value of reserved forest land requires the valuer to consider only what would constitute the fee simple estate, excluding any interest in the forest produce.
[23]Being the body corporate established by Pt 2 of the Conservation, Forests and Lands Act 1987 (Vic): Forests Act, s 3 (definition of ‘Secretary’).
Grand Ridge made similar submissions in respect of vested land under the VPC Act. It said that s 22 of the VPC Act alters the hypothetical estate in fee simple of vested land by providing that any proprietary interest in forest produce is held by the Corporation, restricting it in the same way that s 4 of the Forests Act restricts the hypothetical estate in fee simple of reserved forest land.
Referring to some of the leases granted to it under the Forests Act, Grand Ridge pointed out that separate provision was made in those instruments for the ownership of the plantations of trees on the land during the term of the lease or licence. In the leases under s 51 of the Forests Act, the Minister agreed that ‘the Tenant is the beneficial owner of the Plantation’ and transferred ‘all of the Minister’s right, title and interest in the Plantation to the Tenant for the Term’. It also referred to a licence under the VPC Act, which gave the licensee the right, while the licence remained in force, ‘to enter, occupy and use the Licensed Land for the purposes specified in section 27B(1)(b) of the VPC Act’ — that is, to ‘take or convert forest produce on that land’.
Grand Ridge further submitted that a ‘licence’ granted under s 27B of the VPC Act in respect of vested land is not a ‘lease, mortgage or other charge’ for the purposes of the definition of capital improved value under the Valuation Act. Consistently with the common law meaning of that word, a licence granted under the VPC Act does not confer a right to exclusive possession of the relevant land. The VPC Act uses the word ‘licence’ separately from the word ‘lease’, giving rise to a presumption that the two words have different meanings in the context of the VPC Act.[24] As a result, the existence of a licence under Pt 3A of the VPC Act should not be disregarded — that is, it should be taken into account — when assessing capital improved value of the land.
[24]Referring to Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450, 452; Prestcold (Central) Ltd v Minister of Labour [1969] 1 WLR 89, 97 (Lord Diplock).
Putting the argument in another way, Grand Ridge said that any forest produce generated from reserved forest and protected forest under the Forests Act would not, in fact, be owned by the owner of the estate in fee simple, absent a separate disposition of the forest produce. The same would apply to forest produce on vested land under the VPC Act. It submitted that this was a restriction on the highest and best use of the land, which would likely have a significant deleterious effect on its capital improved value. In support of that submission, Grand Ridge referred to the Court of Appeal’s consideration, in a different context, of whether a licence created a ‘charge’ in Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd.[25]
[25][2004] VSCA 242; (2004) 22 VAR 279, [12] (Batt JA, Vincent and Nettle JJA agreeing).
Valuer-General’s submissions
The Valuer-General submitted that the definition of ‘capital improved value’ in the Valuation Act includes two hypotheticals about the land to be valued, the first of which is ‘if it were held for an estate in fee simple’. He said that Grand Ridge’s contention that the Forests Act and the VPC Act exclude ‘forest produce’ from the land was inconsistent with this first hypothetical, which demands that land be treated as if it were held for an estate in fee simple. The way in which land is held under the Forests Act and the VPC Act is inherently inconsistent with the mandated hypothetical, and thus has no bearing on the valuation exercise. The Valuer-General said that this short point was a complete answer to the contention advanced by Grand Ridge.
Expanding on that short point, the Valuer-General focused on the concept of a fee simple estate. He submitted that it must be taken to be unencumbered and subject to no condition restricting its use.[26] The hypothetical estate in fee simple does not refer to the actual title vested in the owner at the relevant date, but to ‘an absolute or pure title such as constitutes full ownership in the eyes of the law’.[27] However, not all restrictions on the use of the land are to be ignored. Public laws of general application, such as a planning scheme, are to be considered, while a restriction on title such as a lease is to be disregarded in determining capital approved value.[28]
[26]Referring to Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610, 623.
[27]Referring to Gollan v Randwick Municipal Council [1961] AC 82, 101.
[28]Referring to Royal Sydney Golf Club, 624; Perpetual Trustee Co Ltd v Valuer-General (2008) 101 SASR 110, [86] (Bleby J, Duggan and Anderson JJ agreeing); Valuer-General (NSW) v Perilya Broken Hill Ltd (2013) 195 LGERA 416, [20] (Leeming JA, Emmett JA and Preston CJ of LEC agreeing).
The Valuer-General’s central argument was that the Forests Act and the VPC Act apply only to designated lands held under certain tenures, and so are not public laws of general application.
In relation to the Forests Act, the Valuer-General said that the provisions relating to forest produce in State forests apply only to ‘reserved forest’ and ‘protected forest’, both of which comprise Crown land. He said that it follows that forest produce is only property of the Crown if it is on Crown land, which is a different form of tenure from an estate in fee simple.[29] Accordingly, once one assumes that the land is held for an estate in fee simple, any distinction between the land and the forest produce falls away.
[29]Referring to Mabo v Queensland (No 2) (1992) 175 CLR 1, 47–8 (Brennan J), 80 (Deane and Gaudron JJ); Cf Fejo, [43] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
Next, the Valuer-General pointed out that vested land under the VPC Act, like Crown land, is not held as an estate in fee simple. The VPC Act makes separate provision for ‘freehold land’ held by the Corporation, and land that is vested in the Corporation under Pt 3 Div 1. Vested land is not under the operation of the Transfer of Land Act 1958 (Vic),[30] may be the subject of a Crown grant,[31] and may revert to the Crown under s 17 of the VPC Act.
[30]VPC Act, s 9(2)(c).
[31]VPC Act, s 9(2)(d).
Section 22 of the VPC Act provides that the Corporation owns forest produce on both vested land and freehold land. The Valuer-General argued that, once one assumes that vested land is held as an estate in fee simple, s 22 no longer has any work to do in relation to that land. Similarly, freehold land for the purposes of the VPC Act is by definition owned by the Corporation. The definition of capital improved value does not tie ownership of the hypothetical estate in fee simple to the Corporation, and once the land is sold to the hypothetical purchaser it can no longer be owned by the Corporation. Following the hypothetical sale of the fee simple estate, s 22 of the VPC Act would no longer apply to the land.
For those reasons, the Valuer-General submitted it was not necessary to consider whether a licence of vested land under the VPC Act could be characterised as an encumbrance by ‘any lease, mortgage or other charge’. The value of the hypothetical pure fee simple estate in the relevant land is not affected by whether the land is in fact subject to a licence, because the licence is not a restriction arising from a public law of general application. Alternatively, he submitted that a licence should be understood to be an ‘other charge’ on the land, and disregarded on that basis.
The Valuer-General also sought support for his argument from the history and policy of the relevant provisions.
As to matters of history, he referred to the second reading speech for the Victorian Plantations Corporation (Amendment) Bill 1998, which introduced the current Pt 3A dealing with plantation licences. In that speech, the Treasurer said that licence holders under the VPC Act were to be on the same commercial footing as private plantation owners, including in respect of rates and land tax.[32] He also referred to the reports of two New South Wales inquiries that had considered the valuation of Crown land tenures and Crown leases.[33]
[32]Referring to Victoria, Parliamentary Debates, Legislative Assembly, 9 April 1998, Hansard, 968 (Alan Stockdale, Treasurer).
[33]Committee of Inquiry, Parliament of New South Wales, Report by the Committee of Inquiry on certain matters arising under the Valuation of Land Act 1916–1951 (Report, September 1960), [80]–[86]; Royal Commission of Inquiry into Rating, Valuation and Local Government Finance (Report, 9 August 1967, [3.55]–[3.69].
As to matters of policy, the Valuer-General relied on the policy behind the definition of capital improved value in the Valuation Act, which he said was to value the most ample and fullest rights in land. He referred to the High Court’s explanation in Royal Sydney Golf Club that the ‘owner of the first estate was selected as the taxpayer who was to represent all persons beneficially entitled to the land’, and its conclusion that the interpretation that best accords with that policy is that ‘in assessing the unimproved value an estate in fee simple must be taken as the hypothesis unencumbered and subject to no condition restricting the use or enjoyment of the land’.[34]
[34]Royal Sydney Golf Club, 623. The Valuer-General also referred to Harry v Valuer-General (1975) 12 SASR 446, 450, 454.
Consideration
The Valuation Act provides that land is to be valued as ‘if it were held for an estate in fee simple’ — that is, as the highest estate in land, ‘unencumbered and subject to no condition restricting the use and enjoyment of the land’.[35] The Valuation Act, like the statute considered in Royal Sydney Golf Club, selects the notional owner of the first estate of freehold as the taxpayer to represent all persons who may be beneficially entitled to the land[36] — and by extension, those who are licensed to occupy and use the land.
[35]Royal Sydney Golf Club, 623.
[36]Royal Sydney Golf Club, 623.
I do not accept Grand Ridge’s submission that the common law concept of a fee simple estate can be amended by statute. The primary authority cited for that proposition, Northern Territory v Arnhem Land Trust,[37] did not support it. That case concerned whether there was power to grant a licence under the Fisheries Act 1988 (NT) to enter and take fish or aquatic life from land held for an estate in fee simple under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (Land Rights Act). In deciding that there was not, the plurality observed that the description of the interest granted under the Land Rights Act as ‘an estate of fee simple’ was qualified by the provisions of that Act, and differed in some important ways from a fee simple estate at common law.[38] There was no suggestion that the Land Rights Act had ‘amended’ the common law concept of a fee simple estate. Rather, it had used the terminology of the common law to describe a similar but distinct statutory interest in land.
[37](2008) 236 CLR 24 (Arnhem Land Trust).
[38]Arnhem Land Trust, [48]–[50] (Gleeson CJ, Gummow, Hayne and Crennan JJ); see also [142]–[143] (Kiefel J).
What may be accepted is that the use and enjoyment of a fee simple estate in land may be restricted by a public law of general application.[39] Common examples of such laws are planning schemes, environmental laws, and legislation to preserve cultural heritage. As the High Court said in Royal Sydney Golf Club: ‘There is all the difference between a public law affecting the enjoyment of land and a restriction on title’.[40] The difficulty lies in telling the difference.
[39]Royal Sydney Golf Club, 623–4. It is this kind of statutory restriction that is referred to in Hyam, Valuation of Land in Australia, 21–3 and Fejo, [43] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[40]Royal Sydney Golf Club, 624.
In my view, the provisions of the Forests Act and the VPC Act that separate ownership of forest produce from ownership of the land are not public laws of general application that are to be taken into account in valuing a fee simple estate in the land. They apply only to certain land held by the Crown under the Forests Act and by the Corporation under the VPC Act. They are specific to those two landholders, under those two statutes, and do not translate to the hypothetical estate in fee simple that is used to determine capital improved value.
All protected forest and most reserved forest held under the Forests Act is Crown land. The Crown has ultimate, radical title in all unalienated Crown land in its sovereign territory — relevantly here, the State forests of Victoria. That is a different and distinct form of tenure from an estate in fee simple that may be the subject of a Crown grant.[41]
[41]Mabo (No 2), 46–8 (Brennan J), 80 (Deane and Gaudron JJ).
In theory at least, some reserved forest may be freehold land reacquired by the Crown and then dedicated as a reserved forest under ss 47 or 48 of the Forests Act.[42] Land in this category would be held as an estate in fee simple, with the Crown or an agency of the Crown named as the registered proprietor. Having been dedicated as reserved forest, it would be governed by the Forests Act. There was no evidence that any of the land within the Strzelecki Property is of this kind; all of the leases under the Forests Act are of Crown land.
[42]Forests Act, ss 42(1)(b)–(c), 47–48.
It does not matter whether the reserved forest within the Strzelecki Property is Crown land or freehold land that has been reacquired by the Crown. That is because, in either case, the land is subject to the Forests Act because it is State forest owned by the Crown. It is only in those circumstances that s 4 of the Forests Act, which provides that forest produce is the property of the Crown, has any effect. If the land were held by the notional vendor of the hypothetical fee simple estate, the Forests Act simply would not apply. In that case, the trees growing on the land would be part of it, and would form part of the fee simple estate to be sold to the notional purchaser.
I do not accept Grand Ridge’s submission that s 4 of the Forests Act has the effect of separating ownership of the land subject to the Forests Act from ownership of the forest produce on that land. The Crown owns both the land and the forest produce in State forest. There is nothing in s 51 of the Forests Act that suggests that a lease of Crown land in a reserved forest does not extend to the forest produce on that land. In fact, the leases to Grand Ridge under s 51 of the Forests Act grant interests in land that include the Minister’s right, title and interest in the plantations of trees on that land for the term of the lease.
In my view, the purpose of ss 4 and 52 of the Forests Act is to allow the Crown to licence or permit a person to cut, dig, and take away forest produce in State forest, without also having to grant an interest in the land. Where the licence or permit requires payment of royalties or other charges for the forest produce, s 80(1) provides that the Crown retains property in the forest produce until those royalties or charges are paid. Section 82 facilitates proof of the Crown’s ownership of forest produce in any proceedings under the Forests Act. These provisions set up a mechanism for the Crown to permit use of forest produce in State forests, such as collecting firewood, harvesting timber, keeping beehives and taking honey, and digging and removing stone and gravel. There is no question that the Crown is the owner of that forest produce unless and until it disposes of its interest by way of lease, licence or permit.
Turning to the VPC Act, both vested land and freehold land is held by the Corporation. The provisions of the VPC Act apply specifically to these two categories of land because they are owned by the Corporation. I accept the submission of the Valuer-General that vested land is a different form of tenure from an estate in fee simple.[43] Vested land is similar to Crown land, except that it is specific to the Corporation and exists only under the VPC Act. While freehold land under the VPC Act is held by the Corporation as an estate in fee simple, it also is subject to the operation of the VPC Act in a way that the hypothetical fee simple estate is not. In either case, the notional vendor of the hypothetical fee simple estate is not the Corporation, and is not subject to the operation of the VPC Act. In other words, the VPC Act is not a public law of general application.
[43]See [59] above.
Contrary to Grand Ridge’s contention, s 22 of the VPC Act does not separate ownership of forest produce on vested land and freehold land from ownership of that land. The Corporation owns both the land and the forest produce. Like ss 4 and 52 of the Forests Act, s 22 of the VPC Act enables the Corporation to authorise a person to take forest produce without having to grant that person a licence under Pt 3A. Where a plantation licence is granted over vested land under s 27B, the forest produce on that land becomes the property of the licensee, despite s 22.[44]
[44]VPC Act, s 27B(2).
Finally in relation to this question, I reject Grand Ridge’s argument that a licence under the VPC Act is not an encumbrance on an estate in fee simple for the purposes of the definition of capital improved value. The words ‘unencumbered by any lease, mortgage or other charge’ in the definition of capital improved value are not words of limitation or qualification. Rather, they serve to emphasise the unencumbered nature of a fee simple estate, as discussed at [65] above.
In any event, I consider the words ‘other charge’, in the context of the Valuation of Land Act, extend to a licence under the VPC Act. To the extent that such a licence affects the value of the relevant land, it is a ‘load, burden, or weight’[45] that encumbers the estate in fee simple, and is to be disregarded in assessing capital improved value. Sigma Constructions decided that a charge granted in a specific licence did not create an interest in the relevant land, and is of no assistance in construing the definition of capital improved value in the Valuation Act.
[45]Shorter Oxford English Dictionary, definition of ‘charge’ (noun).
For those reasons, the appeal must be dismissed. The Strzelecki Property was correctly valued on the basis that the forest produce on the land leased under the Forests Act, and licensed under the VPC Act, formed part of the land to be valued.
Procedural questions
Given the conclusion I have reached on the substantive question in the appeal, it is not strictly necessary to decide the procedural questions that arose. However, because the questions were the subject of considered argument and are likely to arise in future appeals under the Valuation Act, it will be useful to outline the questions and the views I have reached about them.
The procedural questions concern the proper interpretation of provisions in Pt III of the Valuation Act, which provides for objections, reviews and appeals. The questions are:
(a) What is the nature of an appeal to the Court under s 23 of the Valuation Act? How, if at all, does it differ from a review by VCAT under s 22 of the VLA?
(b) What are the Court’s powers on an appeal relating to the Valuer-General’s determination of an objection under s 21(4) of the Valuation Act?
I set out below the relevant provisions of Pt III, and the broader context of the Valuation Act.
Valuation Act — relevant provisions
Part I of the Valuation Act provides for a Valuer-General to be employed under Pt 3 of the Public Administration Act 2004 (Vic).[46] The functions of the Valuer-General are set out in s 5 of the Valuation Act, and include carrying out the duties and functions conferred by the Act and causing general valuations and supplementary valuations to be made.[47]
[46]Valuation Act, s 3(1).
[47]Valuation Act, s 5(1)(a) and (ab).
The Valuer-General is now the ‘valuation authority’ in relation to rateable land in a municipal district.[48] Before 2018, this function was performed by the council for each municipal district. In the course of the transition period provided by amendments to the Valuation Act made by the State Taxation Acts Further Amendment Act 2017 (Vic), the Valuer-General took over the role of valuation authority for all municipal districts in Victoria.[49] The Valuer-General is now also the valuation authority in relation to non-rateable, leviable land, for the purposes of Pt IIA of the Valuation Act.[50]
[48]Valuation Act, ss 2(1) (definition of ‘valuation authority, in relation to rateable land in a municipal district’, para (a)), 9.
[49]Valuation Act, s 10 provided for a council to be nominated as the valuation authority for its municipal district during the transition period, which ended in 2022.
[50]Valuation Act, ss 2(1) (definition of ‘valuation authority, in relation to non-rateable leviable land’, 13F. Section 13G provided for a ‘collection agency’ to be nominated as the valuation authority for an area during the transition period, which also ended in 2022.
In Pt II of the Valuation Act, s 11 requires a valuation authority to cause a general valuation of rateable land to be made each year:
General valuation to be made each year
For the purposes of the Local Government Act 1989, a valuation authority must—
(a) cause a general valuation of rateable land within an area to be made as at 1 January in each calendar year; and
(b) before 30 April that year, cause a general valuation made in accordance with paragraph (a)—
(i) to be returned to it; and
(ii) to be provided to the council of the municipal district to which the area relates.
In Pt IIA, s 13H requires a valuation authority to cause a general valuation of all non-rateable leviable land as at 1 January in each calendar year for the purposes of the Fire Services Property Levy Act 2012 (Vic) (FSPL Act).
When making a general valuation under Pts II or IIA, a valuation authority may appoint one or more qualified valuers to carry out the valuation.[51] Such a valuer may also carry out a supplementary valuation for the purposes of the Local Government Act or the FSPL Act, in the circumstances set out in ss 13DF(2) and 13L(2). In every valuation for the purposes of the Local Government Act or the FSPL Act, each separate occupancy on the relevant land must be computed at its net annual value, its capital improved value, and, if required, its site value.[52]
[51]Valuation Act, ss 13DA(1), 13J(1).
[52]Valuation Act, ss 13DC(1)(a), 13K(1)(a).
A ‘return’, in relation to a general valuation or supplementary valuation, means the act of the valuer giving to the valuation authority a general valuation or a supplementary valuation which has been signed and dated.[53] A valuer must return a valuation in the prescribed form, after making a statutory declaration that the valuation and return will be impartial and true to the best of the valuer’s judgment.[54]
[53]Valuation Act, s 2(1) (definition of ‘return’).
[54]Valuation Act, ss 13DH, 13O.
Part III of the Valuation Act provides for objections, reviews and appeals.
Section 15 sets out the requirements for giving notice of a valuation:
Notice of valuation
(1) A valuation authority that causes a general or supplementary valuation to be made must either—
(a) give—
(i) notice of that valuation, in accordance with this section; and
(ii) notice that some other authority may use one of the bases of value shown in the notice under subparagraph (i) for the purposes of a rate or tax levied by that authority; or
(b) give sufficient information to the relevant rating authority as to that valuation to enable the rating authority to give notice in accordance with this section.
* * * * *
(3) A rating authority that receives information from a valuation authority under section (1)(b) as to a general valuation must give—
(a) notice of that valuation in accordance with this section; and
(b) notice that some other authority may use one of the bases of value shown in the notice under paragraph (a) for the purposes of a rate or tax levied by that authority.
(4) A notice of valuation must be given on or before 30 September in the year in which the valuation is made.
(5) A notice of valuation must be given to each person within or outside the municipal district in respect of which the valuation has been made who is or will be liable to pay a rate made by the rating authority for the municipal district or a tax levied by the collection agency in respect of land outside the municipal district.
(6) A notice of valuation must—
(a) identify the land in respect of which the rate or tax is or will be payable; and
(b) show the capital improved value, the site value and the net annual value as assessed in respect of the land; and
(ba) show the AVPCC allocated to the land;[55] and
(c) state the date at which the value of land was assessed.
(7) If the person liable for payment of the rate or tax is not the occupier of the land, the authority responsible for giving a notice of valuation must also give such a notice to the occupier.
(8) A notice under subsection (1)(a)(ii) or (3)(b) must be given before or at the same time as the notice of valuation to which it relates.
…
[55]AVPCC means Australian Valuation Property Classification Code. Sections 13DC(1)(b) and 13K(1)(b) require each separate occupancy on land that is valued to be allocated an AVPCC based on the Valuation Best Practice Specification Guidelines.
Division 3 of Pt III sets out the process for objecting to a valuation of land. Under s 16, a person aggrieved by a valuation of any land made or caused to be made by a valuation authority may lodge a written objection to that valuation with the authority that gave the notice of valuation.[56]
[56]Valuation Act, s 16(1).
An objection must:
(a) be lodged within two months after the notice of valuation is given;[57]
[57]Valuation Act, s 18(a).
(b) contain the prescribed information;[58]
[58]Valuation Act, s 16(2)(a); Valuation of Land Regulations 2014 (Vic) (Valuation Regulations) reg 13, sch 3.
(c) give particulars of the bases of valuation to which objection is made;[59]
(d) state the grounds on which the objection is based;[60] and
(e) state the amount that the objector contends is the correct value, if a ground for the objection is that the value assigned is too high or too low and the value assigned is not less than the prescribed amount.[61]
[59]Valuation Act, s 16(2)(b).
[60]Valuation Act, s 16(2)(c).
[61]Valuation Act, s 16(3A). See also s 16(3B), which provides that an amount stated in an objection in accordance with sub-s (3A) is not binding on the objector. The ‘prescribed amount’ is a net annual value of $120,000, a site value of $1,500,000, or a capital improved value of $2,000,000: Valuation Act, s 14 (definition of ‘prescribed amount’); Valuation Regulations, reg 14.
The grounds on which an objection may be made are set out in s 17, which provides:
Grounds for objection
The grounds for objection are—
(a)that the value assigned is too high or too low;
(b) that the interests held by various persons in the land have not been correctly apportioned;
(c) that the apportionment of the valuation is not correct;
(d) that lands that should have been included in one valuation have been valued separately;
(e) that lands that should have been valued separately have been included in one valuation;
(f) that the person named in the notice of valuation, assessment notice or other document is not liable to be so named;
(g) that the area, dimensions or description of the land including the AVPCC allocated to the land are not correctly stated in the notice of valuation, assessment notice or other document.
Objections are determined in accordance with ss 20 and 21, as follows:
20 Exchange of information on certain objections
(1) This section applies to an objection if—
(a) a ground for the objection is that the value assigned is too high or too low; and
(b) the value assigned is not less than the prescribed amount.
(2) Within one month after the objection is lodged with the authority, the valuer to whom the objection has been referred must give the objector the prescribed information concerning the valuation that is the subject of the objection.[62]
(3) Within one month after receiving the prescribed information under subsection (2), the objector may lodge a written submission concerning the valuation with the valuation authority.
[62]Valuation Regulations, reg 15 prescribes the information to be given by the valuer to the objector to be the address of the land, the rating authority’s property reference number, details of the land and improvements, a description of the rating authority’s valuation approach and, if appropriate, a response to the information contained in the objection.
21 Determination of objection
(1)An objection must be determined in accordance with section 20 and this section.
(2) If an objection has been lodged with an authority that is not the valuation authority that caused the valuation to be made, the authority must refer the objection to that valuation authority.
(2A) A valuation authority with whom a valuation has been lodged or to whom an objection has been referred under subsection (2), must refer the objection to the valuer who made the valuation.
(2B) A valuer to whom an objection has been referred must provide the objector with a reasonable opportunity to discuss his or her objection with the valuer.
(3)Within 4 months after receiving the objection, the valuer must—
(a) if he or she considers that no adjustment in the valuation is justified—give the objector written notice of that decision; or
(b) if he or she considers that an adjustment in the valuation is justified—
(i) recommend accordingly to the valuer-general; and
(ii) give the objector and the valuation authority a copy of the recommendation.
(4) The valuer-general, after consultation if practical with the valuer, must determine the objection as follows—
(a) the valuer-general may disallow the recommended adjustment in whole or part if, in his or her opinion, the adjusted valuation is not correct; or
(b) in any other case, the valuer-general must confirm the recommended adjustment.
(5) Within 2 months after receiving the recommendation, the valuer-general must give written notice of his or her decision to the objector, the valuer and any rating authority that uses or proposes to use the valuation.
…
(7) If section 20 applies, subsection (2B) does not require the valuer to provide a reasonable opportunity for the objector to discuss the matter with him or her unless the objector lodges a submission under section 20(3).
…
Division 4 provides for reviews and appeals from a decision of a valuer or the Valuer-General in relation to an objection to a valuation.
An objector who is dissatisfied with the decision of a valuer or the Valuer-General on their objection may apply to VCAT for review of the decision pursuant to s 22:
Application to VCAT for review
(1) An objector who is dissatisfied with the decision of a valuer or the valuer-general on the objection may apply to VCAT for review of the decision.
(2) If the valuer for a valuation authority has not given an objector notice of a decision on the objection or a copy of a recommendation under section 21(3)(b)(ii) within 4 months after the objection was lodged with the valuation authority, the valuer is deemed to have made a decision that no adjustment in the valuation is justified.
(3) If the valuer-general has not given an objector notice of a decision under section 21(5) within 2 months after a copy of a recommendation was given to the objector under section 21(3)(b)(ii), the valuer-general is deemed to have made a decision disallowing the recommended adjustment.
(4) An application under this section must be made—
(a) in the case of an application in respect of a deemed decision referred to in subsection (2)—within 9 months after the date on which the objection was lodged with the valuation authority;
(b) in the case of an application in respect of a deemed decision referred to in subsection (3)—at any time after the end of the 2 month period referred to in that subsection;
(c) in any other case—within 30 days after the date notice of the decision is given to the objector.
(5) An applicant under this section must serve a copy of the application on the valuation authority.
(6) The valuation authority must, within 1 month after being served with a copy of the application, forward to the principal registrar of VCAT the notice of objection, copies of any notices given under section 21 in connection with the objection and any information given or submissions lodged under section 20 in connection with the objection.
(7) The principal registrar of VCAT must notify the valuer-general of an application under this section.
(8) Despite subsection (2), the valuer for a valuation authority may give an objector notice of a decision on the objection or a copy of a recommendation under section 21(3)(b)(ii) more than 4 months after the objection was lodged with the valuation authority.
(9) Despite subsection (3), the valuer-general may give an objector notice of a decision under section 21(5) more than 2 months after a copy of a recommendation was given to the objector under section 21(3)(b)(ii).
Section 23 provides for appeals to the Supreme Court. Relevantly:
Appeal to Supreme Court
(1)The President of VCAT, on his or her own initiative or on the application of a party, may refer a matter that is the subject of an application under section 22 to the Supreme Court to be treated as an appeal to the Supreme Court if the President is satisfied that the matter raises questions of unusual difficulty or of general importance.
…
(3)In addition to subsection (1), a matter that is or could be the subject of an application under section 22 may be treated as an appeal to the Supreme Court if, on the application of any party,[63] the Court is satisfied that the matter raises questions of unusual difficulty or of general importance.
…
[63]For the purposes of sub-s (3), a party includes a person who would be a party if the matter were the subject of an application under s 22: see sub-s (4).
The permitted grounds of review or appeal are set out in s 24:
Grounds of review or appeal
(1)On a review or appeal the objector’s case is limited to—
(a) the grounds of the objection; and
(b) any other grounds set out in the application for review or appeal—
unless VCAT or the Court (as the case requires) otherwise orders.
(2) If a ground for the objection or application is that the value assigned is too high or too low, the application for review or appeal (as the case requires) must state the amount that the objector contends is the correct value.
(3) Despite section 14(2) of the Interpretation of Legislation Act 1984, on a review or appeal in relation to the site value of any land contained in a general valuation or supplementary valuation as at 1 January 2018 or any later date, including a review or appeal on foot at the commencement of this subsection, no account is to be taken by VCAT or the Court (as the case requires) of section 2(8) or (9) (as in force at the date of the valuation) in determining the correct site value of the land.
Section 25 concerns the powers of VCAT or the Supreme Court on review or appeal:
Powers on review or appeal
(1)On a review or appeal, VCAT or the Court (as the case requires) may—
(a) by order, confirm, increase, reduce or otherwise amend any valuation; and
(b) make any other order it thinks fit.
(2) An appeal to the Court of Appeal from an order of the Court under this section lies only on a question of law and with leave of the Court of Appeal.
Note
Section 148 of the Victorian Civil and Administrative Tribunal Act 1998 provides for appeals on a question of law from orders of VCAT.
What is the nature of an appeal to the Court under s 23 of the Valuation Act?
The first procedural question concerns the nature of an ‘appeal’ to the Court under s 23 of the Valuation Act, and whether it differs from a ‘review’ by VCAT under s 22 of the Valuation Act.
I asked the parties to address this question in light of their shared assumption that an appeal to the Court under s 23 involves merits review. The Valuation Act is not explicit as to the nature of an appeal to the Court, and the question has not previously received detailed consideration.[64] I also considered that the answer to the question was likely to bear on the issues raised by the Valuer-General about the Court’s powers on an appeal from a determination of an objection under s 21(4) of the Valuation Act.
[64]In other cases involving appeals under s 23 of the Valuation Act, it seems to have been assumed that the Court was undertaking the same kind of merits review that VCAT undertakes in a review under s 22: see Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445, [9]; Port of Melbourne Corporation v Melbourne City Council [2004] VSC 217; AWF Prop Co 2 Pty Ltd v Ararat Rural City Council [2020] VSC 853.
The parties’ written submissions included thorough and considered argument as to the nature of an appeal under s 23. While their reasoning differed in some respects, both parties submitted that the Court’s jurisdiction in an appeal under s 23 is relevantly identical to VCAT’s review jurisdiction under s 22, and that the Court’s jurisdiction does not depend on the identification of some error affecting the decision under appeal. Their arguments proceeded from the following common propositions, all of which were based on settled authority:
(a) The nature of an application to VCAT for review under s 22 of the Valuation Act is a merits review (or ‘hearing de novo’) in VCAT’s original jurisdiction, where it has all the functions of the original decision maker and may exercise them regardless of any error in the original decision.[65]
(b) An appeal is a creature of statute, and its nature depends on the proper construction of the statute conferring the right of appeal.[66]
(c) The task of construction begins and ends with the text of the statute itself, read in accordance with the ordinary and natural meaning of the words of the text, having regard to the context in which those words appear and their purpose. Context must be looked at first, not merely to resolve ambiguity, and an effort must be made to give meaning to every word of the provision.[67]
[65]Referring to S & JG Investments Pty Ltd v Valuer-General Victoria (Land Valuation) [2023] VCAT 246, [52]; Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 51(1) (VCAT Act); Shi v Migration Agents Registration Authority (2008) 235 CLR 286, [97]; Frugtniet v Australian Securities and Investments Commission (2019) 266 CLR 250, 271; Hoskin v Greater Bendigo City Council (2015) 48 VR 715, [113]; AAA v County Court of Victoria [2023] VSC 13, [49].
[66]Grand Ridge referring to Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 125 CLR 192, 202; Re Coldham; Ex parte Brideson (No 2) (1990) 170 CLR 267, 273–4; Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (2011) 245 CLR 446, [5]. The Valuer-General referring to Re Coldham, 273–4; Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616, 621–2 (Mason J); AAA, [54].
[67]Referring to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 335, [69]–[71], [78] (McHugh, Gummow, Kirby and Hayne JJ); North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569, [11] (French CJ, Kiefel and Bell JJ); SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362, [14] (Kiefel CJ, Nettle and Gordon JJ); CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey and Gummow JJ); K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309, 315 (Mason J).
The parties then referred to various aspects of the text, context and purpose of s 23 that supported their agreed position on this question. They identified a number of similarities and cross-references between the text of ss 22 and 23. In particular:
(a) The Valuer-General pointed to the fact that sub-ss (1) and (3) of s 23 both apply to a ‘matter’ which is, or could be, the subject of an application to VCAT under s 22, and provide that the matter may be heard in the Court if it raises questions of unusual difficulty or general importance. This was said to indicate that ss 22 and 23 provide for the hearing and determination of the same ‘matter’ as an unchanging constant, while the forum may vary. The Valuer-General submitted that this is fortified by the reference in s 23(3) to the matter being ‘treated as’ an appeal to the Court, which effectively imports the terms of s 22 into the conferral of jurisdiction under s 23. If the Court’s jurisdiction was more confined than VCAT’s jurisdiction, the Court could not be said to be determining the same matter, nor could the matter be ‘treated as’ an appeal to the Court.
(b) Grand Ridge submitted that it was apparent that an appeal is a binary alternative to a review before VCAT, in the sense that an objector may pursue one avenue or another. As such, it would be anomalous if the nature of an ‘appeal’ under s 23 was appreciably different to the nature of the ‘review’ under s 22 in that context, for example, by limiting the evidence that an applicant could rely on, or by requiring the applicant to identify an error in the underlying decision in a s 23 ‘appeal’, when these are not required in a review by VCAT under s 22.
(c) In similar vein, the Valuer-General pointed to the fact that an objector who seeks merits review in VCAT under s 22 may have their matter treated as an appeal to the Supreme Court where the circumstances in s 23 apply, resulting in the displacement of VCAT’s review jurisdiction. If the Court’s jurisdiction was in any way more constrained than VCAT’s jurisdiction, this would have the effect of depriving the objector of their entitlement to a merits review of the original decision. The Valuer-General argued that such an outcome is not likely to have been intended, and nothing in the text of the Valuation Act compels it.
(d) Both parties referred to the fact that the only criterion distinguishing an appeal under s 23 from a review under s 22 is that ‘the matter raises questions of unusual difficulty or of general importance’.[68] They submitted that there is nothing about that criterion that suggests the Court is to address a different set of questions or apply a more restricted form of review where it is satisfied. The Valuer-General said that the express purpose of the Court’s jurisdiction is to address questions of unusual difficulty or general importance which would have arisen before VCAT, which presupposes that the Court will address the same questions that VCAT would have addressed. Conversely, if the issues for determination in the Court were different to those before VCAT, which would be the case if their jurisdictions were substantively different, there would be no reason to suppose that the same questions will arise in each jurisdiction. Grand Ridge also submitted that the fact that a matter raises questions of unusual difficulty or of general importance suggests that a full merits review would be more, not less, appropriate in order for the Court to be fully seized of the matter.
[68]Valuation Act, s 23(1), (3).
The parties also addressed the meaning of the words ‘review’ in s 22 and ‘appeal’ in s 23. Grand Ridge submitted that the words ‘appeal’ and ‘review’ have no specific meaning, and are often used interchangeably.[69] Both parties argued that the fact that a statute uses the word ‘appeal’ does not necessarily mean that the Court is exercising appellate jurisdiction as opposed to original jurisdiction, or otherwise shed light on the scope of the jurisdiction, as the term ‘appeal’ encompasses different types of hearings — including a ‘hearing de novo’ which refers to a merits review.[70]
[69]Referring to Batrouney v Forster (No 2) [2015] VSC 541, [186]; AJH Lawyers v Mathieson Nominees Pty Ltd [2015] VSCA 227, [97].
[70]Grand Ridge referring to Tasty Chicks, [5]. The Valuer-General referring to AAA, [49].
In its reply submissions, Grand Ridge drew attention to the decision of Nationwide Towing and Transport Pty Ltd v Commissioner of State Revenue,[71] which concerned the nature of an appeal to the Supreme Court under s 106 of the Taxation Administration Act 1997 (Vic) (Taxation Act) against a determination of a taxpayer’s objection. Section 106 of the Taxation Act enables a taxpayer to request the Commissioner to either refer the matter to VCAT or treat the objection as an appeal to the Court. Justice Croft construed Pt 10 of the Taxation Act to provide for ‘appeal’ to the Supreme Court in the nature of judicial review, while a ‘review’ by VCAT is merits review. Grand Ridge submitted that Nationwide Towing was clearly distinguishable from this case, given the differences in the language and scheme provided for by the Taxation Act and the Valuation Act.
[71][2018] VSC 262 (Nationwide Towing).
(f) the tribunal ‘stand[s] in the shoes of the decision-maker’[118] and determines for itself on the material before it the decision it considers should be made,[119] conducting ‘its own, independent, assessment and determination of the matters’.[120]
[116]Referring to Shi, [134] (Kiefel J).
[117]Referring to Shi, [134] (Kiefel J).
[118]Referring to Hoskin, [113](a), quoting Mond v Perkins Architects Pty Ltd [2013] VSC 455, [10].
[119]Referring to Frugtniet, [51] (Bell, Gageler, Gordon and Edelman JJ).
[120]Referring to Shi, [141] (Kiefel J).
It followed, submitted the Valuer-General, that when VCAT exercises its review jurisdiction in respect of a decision made under s 21(4), VCAT must stand in the shoes of the Valuer-General, address the same question as the Valuer-General was required to address, and perform the same confined task. Like the Valuer-General, VCAT is limited to disallowing the recommended adjustment in whole or part or confirming the recommended adjustment. By contrast, the task of the valuer under s 21(3) is not so confined; it is to recommend any adjustment that the valuer considers is ‘justified’.
That said, the Valuer-General drew attention to the authority of 101 Collins Street Pty Ltd v City of Melbourne (1995) 87 LGERA 207, in which Batt J held that the Court’s role under the former s 42(1) of the Valuation Act was to hear evidence and conduct a full hearing on whatever may be the issues. This included a power to increase the value assigned to the relevant land, although the ground of objection was that the valuation was too high.[121] The Valuer-General submitted that the authority could be distinguished on the basis that the former s 42(1) provided for a review of a valuation,[122] while the current s 22 provides for a review of a decision.
[121]101 Collins Street, 212–213.
[122]At the relevant time, s 42(1) of the Valuation Act provided that the Court on an appeal ‘shall review the assessment of valuation of the lands made by or for the rating authority (as the case may be) and may either confirm the valuation or increase or reduce the value assigned to the land or make such other amendment as it thinks fit’.
On the third question of what evidence is admissible on review or appeal, the Valuer-General referred to VCAT’s conclusion in S & JG Investments that s 21(4) does not permit the Valuer-General to conduct a new valuation or even to conduct the adjustment process; his power is limited to reviewing any adjustment recommended by the valuer.[123] If that analysis is correct, the Valuer-General submitted, it must follow that neither VCAT nor the Court could receive evidence of a fresh valuation when reviewing a decision under s 21(4).
[123]Referring to S & JG Investments, [128].
The Valuer-General referred to the case of Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal,[124] in which the High Court considered the nature of the Tribunal’s task on reviewing the making of a Minister’s declaration of a ‘service’ under s 44H of the Trade Practices Act 1974 (Cth). Section 44K(4) provided that the review by the Tribunal ‘is a reconsideration of the matter’.[125] The High Court held that a reconsideration of a matter was different from a rehearing of the matter, and that the Tribunal’s task was to review the Minister’s decision by reconsidering it on the material before the Minister, supplemented only by further information that might be requested by the Tribunal from the National Competition Commission under s 44K(6).[126] The Tribunal was therefore wrong to have decided the matter afresh on a new body of evidence and material. While acknowledging differences in the relevant legislation, the Valuer-General submitted that the task of VCAT or the Court on reviewing a decision under s 21(4) of the Valuation Act is similarly confined, and should be undertaken without further evidence or material.
[124](2012) 246 CLR 379 (Pilbara).
[125]Referring to Pilbara, [48] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[126]Referring to Pilbara, [58], [60], [65] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
By contrast, the Valuer-General submitted, on a review of a decision under s 21(3)(b), each party can rely on expert evidence in support of their case that the valuer’s recommended adjustment was, or was not, justified. VCAT or the Court is tasked with conducting a fresh assessment of the objection, to ‘do over again’ what the valuer was required to do under s 21(3). In that respect, VCAT and the Court are not bound by the returned valuation or the reasoning that underpinned it, and may have regard to any material that is relevant to the value to be assigned to the land in question. To the extent that S & JG Investments and WSTI Properties decided otherwise, the Valuer-General submitted that they were incorrectly decided.
The fourth and final question addressed by the Valuer-General was what orders could be made on review. He submitted that, notwithstanding the apparent breadth of s 25(1) of the Valuation Act, there are real limitations to VCAT’s powers on review and the Court’s powers on appeal.
The Valuer-General argued that the words ‘as the case requires’ in s 25(1) are used to distinguish between a review by VCAT and an appeal to the Court. He rejected VCAT’s analysis in S & JG Investments,[127] that each of the individual powers may or may not be relevant and available in a given situation, depending on the ground of objection. According to the Valuer-General, this would involve a substantial departure from established conceptions of administrative decision merits review, for which there is no clearly expressed legislative intent.[128] Instead, he submitted that the s 25(1) powers are confined by what the Valuer-General could have decided under s 21(4), and do not expand the role of VCAT on review or the Court on appeal. Hence, the only options available to the Court in this appeal are to disallow or confirm the recommended adjustment.
[127]Referring to S & JG Investments, [135].
[128]Referring to Frugtniet, [31] (Kiefel CJ, Keane and Nettle JJ).
By contrast, on review or appeal from a decision under s 21(3)(b), VCAT or the Court could vary the valuation, to whatever amount it determines appropriate on the evidence before it — in the same way as the valuer who made the original decision under s 21(3). The only limitation is that where, as here, the ground of objection is that the valuation is too high, VCAT or the Court cannot adopt a valuation higher than the returned valuation or lower than the value contended by the objector.[129]
[129]Referring to S & JG Investments, [10].
In oral submissions, the Valuer-General acknowledged that his preferred interpretation of Pt III involved some awkwardness, including in relation to timelines. However, he said that he was seeking to find a workable pathway through the objection, review and appeal process, without impermissibly rewriting the legislation. Interpreting s 21(3)(b) to be a decision of the valuer would achieve that outcome, and would enable an objector to obtain merits review of the determination of their objection.
Grand Ridge’s submissions
Grand Ridge described its position on the procedural questions as ‘agnostic’, since it had appealed both the s 21(3)(b) recommendations and the s 21(4) decisions in relation to each valuation and the Court clearly had power to make the orders it sought on the appeal. While it was not as invested in seeking answers to those questions as the Valuer-General, Grand Ridge put a considered argument against the Valuer-General’s preferred interpretation of Pt III of the Valuation Act.
Consistent with Grand Ridge’s contention that both review by VCAT and an appeal to the Court involves a full merits review, it submitted that the nature of the Court’s jurisdiction and powers on an appeal is to review the whole of the objection made by an applicant. It said that the Court is not constrained by the process for determining an objection set out in s 21 of the Valuation Act, and does not merely ‘stand in the shoes’ of the Valuer-General. Rather, Grand Ridge argued, the Court’s jurisdiction on appeal (and VCAT’s on review) to determine an objection is governed by Pt III, Div 4 of the Valuation Act, and is constrained only by the scope of the ground on which the objector relies.
Grand Ridge said that Div 4 creates a bespoke regime that governs the conduct of an appeal or review. In the case of a review by VCAT, s 51(1)(b) of the VCAT Act contemplates that VCAT has both the functions of the original decision-maker and ‘any other functions conferred on the Tribunal by or under the enabling enactment’. While no equivalent statutory provision applies to appeals to the Court, Grand Ridge said this was unnecessary given the Court’s original jurisdiction, the conferral of express jurisdiction by s 23, and the powers given by s 25 of the Valuation Act.
Grand Ridge pointed out that s 24 provides that on a review or appeal, the objector’s case is limited to the grounds of the objection, or any other grounds set out in the application. It said that this implied that those grounds, which were directed to the original valuation, would be addressed as a whole and on their merits on review or appeal. The implication was said to be reinforced by s 24(2), which requires the objector to state the amount that it contends is the correct value, where a ground for the objection is that the value assigned is too high or too low, and does not confine the amount for which the applicant can contend by reference to the decision made under s 21.
Grand Ridge said it was self-evident that s 25(1) conferred a discretion on the Court and VCAT to dispose of an objector’s ‘case’ under s 24(1). It pointed out that s 25(1) is directed to what the Court or VCAT may do in respect of a valuation, rather than a decision.
The legislative history of Pt III of the Valuation Act was said by Grand Ridge to support the construction it advanced. The first version of Pt III, inserted by the Valuation of Land (Appeals) Act 1965 (Vic), was held in 101 Collins Street to provide for full merits review.[130] The second version, inserted by the 1998 Amendment Act, was intended to be ‘essentially a re-enactment’ of the former Pt III, with language consistent with the new VCAT Act.[131] The aspects of Pt III that remained provided for matters in addition to the general provision made in the VCAT Act. This third version, introduced by the 2006 Amendment Act, did not alter the nature of a review or appeal, or the breadth of the jurisdiction conferred upon the Court and VCAT.
[130]Referring to 101 Collins Street, 212.
[131]Referring to 1998 Explanatory Memorandum, 40, quoted at [126] above.
Grand Ridge drew support from ISPT Pty Ltd v Melbourne City Council,[132] in which the Court of Appeal distinguished the work of VCAT’s Land Valuation List from ‘the usual process of the tribunal in other types of proceedings’. It submitted that this would be consistent with VCAT having a broader jurisdiction to conduct a review in valuation matters than in its general review jurisdiction.
[132](2008) 20 VR 447, [16].
As to the admissibility of evidence, Grand Ridge submitted that its evidence had to be directed to establishing that the relevant valuation was too high, and the amount that it contended was the correct value. The Valuer-General, on the other hand, could only rely on evidence seeking to support the original valuation, or some other, lower valuation.
According to Grand Ridge, the orders that the Court could make in a proceeding are limited only by the grounds of objection to the valuation. Where the only ground of objection was that the valuation was too high, the Court could confirm or reduce the valuation, but could not increase it. Otherwise, Grand Ridge submitted that the Court can make any of the orders listed in s 25(1) on an appeal from the Valuer-General’s determination of an objection under s 21(4).
As to the Valuer-General’s preferred interpretation, Grand Ridge said that it was a misreading of Pt III, which gave ss 24 and 25 of the Valuation Act no work to do. It said that Shi and Frugtniet do not stand for any broad or universal proposition that a body conducting merits review is limited to the functions of the decision-maker, irrespective of legislative context.[133] Grand Ridge referred to passages in both Shi and Frugtniet that emphasised the primacy of the language of the particular statutes, and pointed out that in neither case did the enabling statute contain equivalents to ss 24 and 25 of the Valuation Act.
[133]Referring to Shi, [25] (Kirby J), [92] (Hayne and Heydon JJ), [132] (Kiefel J); Frugtniet, [15] (Kiefel CJ, Keane and Nettle JJ), [51] (Bell, Gageler, Gordon and Edelman JJ).
Grand Ridge submitted further that the review jurisdiction under the AAT Act, with which Shi and Frugtniet were concerned, was relevantly different from the review jurisdiction conferred by Pt III of the Valuation Act and (in the case of VCAT but not the Court) the VCAT Act. It referred in particular to ss 25 and 43 of the AAT Act, and argued that s 51 of the VCAT Act did not limit VCAT’s review jurisdiction in the same way as s 43(1) of the AAT Act. To the contrary, it said that s 51(1)(b) expressly contemplates an enactment conferring a broader jurisdiction on VCAT than that conferred on the decision-maker whose decision is under review, and contrasted this with s 25(6) of the AAT Act. Grand Ridge submitted that Div 4 of Pt III of the Valuation Act confers on VCAT and the Court much broader ‘functions’ than are conferred on the AAT under s 43 of the AAT Act. It distinguished Pilbara on the basis that the powers of the AAT were expressly limited to ‘the same powers as the designated Minister’.
Grand Ridge disputed that a valuer’s ‘recommendation’ under s 21(3)(b) is a ‘decision’ amenable to review or appeal. It said that the different words should be construed to have different meanings,[134] and said further that it would be nonsensical to interpret s 21(3) and (4) in such a way that a full merits review is only available for an intermediate step in the decision-making process. In circumstances where s 25 clearly contemplates the final determination of an objection to the valuation, it is implausible that review of an intermediate ‘decision’ would provide a basis for the grant of final relief. Indeed, Grand Ridge said, a successful application for review of a s 21(3)(b) ‘decision’ would not finally resolve an objection, as the recommended adjustment determined by VCAT or the Court would then proceed to the Valuer-General under s 21(4). This would create the possibility of multiple rounds of review in a single objection process.
[134]Referring to Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456, [21] (Kiefel CJ, Keane, Nettle, Gordon and Edelman JJ); Bayley v The Queen (2013) 43 VR 335, [47] (Warren CJ, Neave and Coghlan JJA); Scott v Commercial Hotel Merbein Pty Ltd [1930] VLR 25, 30 (Irvine CJ).
In addition, Grand Ridge argued that the Valuer-General’s construction did not sit comfortably with the timing for decisions contemplated by s 21 and an application for review under s 22. While s 21(5) gives the Valuer-General two months in which to decide whether to disallow or confirm a recommended adjustment, an objector would have only 30 days to apply for review of a valuer’s recommendation under s 21(3)(b).[135]
[135]Referring to Valuation Act, s 22(4)(c).
Logically, Grand Ridge submitted, a ‘decision’ for the purposes of s 22(1) must be one of the final decisions on an objection to a valuation — either a decision of a valuer under s 21(3)(a) or a decision of the Valuer-General under s 21(4) — and not an intermediate recommendation. In oral submissions, it emphasised that the function performed by the Valuer-General under s 21(4) was to ‘determine the objection’, as the final step in the objection process.
For those reasons, Grand Ridge said that a recommendation under s 21(3)(b) is not amenable to review or appeal under ss 22 and 23 of the Valuation Act.
Consideration
The competing arguments on this question have exposed some difficulties with the operation of Pt III of the Valuation Act, which are not easy to resolve. The difficulties have their genesis in the 2006 Amendment Act. Before then, an objector who was dissatisfied with the determination of an objection could ask the relevant rating authority to either refer the matter to the Tribunal or to treat the objection as an appeal to the Court. It was clear that, in either case, the ‘matter’ was the determination of the objection to the valuation.
The 2006 Amendment Act inserted a new s 22 that enabled a dissatisfied objector to apply directly to VCAT, instead of having to seek referral by the rating authority. The policy reasons for this change were made clear in the Minister’s second reading speech.[136] However, in making the change, different language was used to describe the subject matter of the application. Rather than providing for an objector to apply to VCAT for review of the determination of their objection, s 22 now provided for review by VCAT of ‘the decision of the valuer or the valuer-general on the objection’.
[136]See [127] above.
It may be that this change was made without close consideration of the nature of VCAT’s review jurisdiction. The jurisprudence about the nature of administrative review was less developed in 2006, with Shi, Frugtniet, and Hoskin all yet to be decided. There is no indication in the extrinsic materials that the new s 22 was intended to confine the scope of a VCAT review by reference to the particular decision made by the valuer or the Valuer-General in relation to the objection, under the revised s 21 of the Valuation Act.
Whether the change in language was inadvertent or deliberate, it has created some difficult issues for VCAT to work through, as is clear from its recent decisions in S & JG Investments and WSTI Properties. Central questions for VCAT in each case were the nature of the decision under review and its task on review. Those questions do not arise in this appeal.[137]
[137]As noted above at [149], VCAT’s conclusions in WSTI Properties about the nature of its task on review of a decision under s 21(3)(a) are currently before the Court of Appeal.
Significantly, the use of the word ‘decision’ in s 22 did not flow through to the new s 23, which retained the familiar language of referring a matter to the Court to be treated as an appeal. In my view, the ‘matter’ that may be referred to the Court under s 23 was not altered by the 2006 Amendment Act.
Whatever may be the scope of a review by VCAT under s 22 since the 2006 Amendment Act, it is not the VCAT proceeding that is referred to the Court under s 23. Rather, the matter that is (or could be) the subject of the application to VCAT is referred to the Court — namely, the determination of the objection. An appeal to the Court under s 23 is still an appeal de novo from the determination of the objection by the valuer under s 21(3)(a) or the Valuer-General under s 21(4). As discussed, the Court is to hear such an appeal afresh, is not confined to the material before the decision-maker, and must determine for itself the merits of the determination of the objection. Having done so, it has the powers set out in s 25(1) of the Valuation Act, limited only by the scope of the appeal as provided in s 24. The Court is not confined to the choices available to the Valuer-General under s 21(4) to determine the objection.
It follows that I do not accept the Valuer-General’s submissions based on the High Court’s reasoning in Shi and Frugtniet. Both of those decisions concerned the administrative review jurisdiction and powers of the Administrative Appeals Tribunal of Australia. While the reasoning in those decisions may translate to VCAT’s review jurisdiction, depending on the particular statutory context, it does not elucidate this Court’s jurisdiction to hear and determine an appeal under s 23 of the Valuation Act.[138]
[138]See further [114]–[115] above.
The Valuer-General may be correct that a valuer’s recommendation under s 21(3)(b) may be the subject of an application for review under s 22. That interpretation is certainly open, given the breadth of the definition of ‘decision’ in the VCAT Act, and analogous authority about the reviewability of recommendations and other intermediate decisions.[139]
[139]See authorities referred to by the Valuer-General at [153] above.
However, the interpretation does not sit well within the scheme of Pt III. As Grand Ridge pointed out, the recommendation is not the ultimate determination of the objection. It is an intermediate decision that may be confirmed or disallowed by the Valuer-General under s 21(4) — whether it is made by the valuer or by VCAT on review. An application for review of a s 21(3)(b) recommendation would have to be made to VCAT within 30 days after notice is given to the objector, at a time when the objector is likely to be awaiting the Valuer-General’s determination of the objection under s 21(4).[140] That may explain why it is not a course that is commonly pursued by objectors.
[140]The Valuer-General is given two months in which to decide whether to confirm or disallow a recommended adjustment: Valuation Act, s 22(3).
Disposition
For the reasons at [65] to [78] above, Grand Ridge has not made out its ground of objection that the valuation was too high. The appeal must be dismissed.
I will hear the parties on the question of the costs of the proceeding.
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24
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