| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : VALUATION OF LAND ACT 1978 (WA) CITATION : GRIFFIN WINDFARM HOLDINGS PTY LTD and VALUER GENERAL [2013] WASAT 164 MEMBER : JUDGE T SHARP (DEPUTY PRESIDENT) HEARD : 21 JUNE 2013 DELIVERED : 4 OCTOBER 2013 FILE NO/S : DR 315 of 2011 BETWEEN : GRIFFIN WINDFARM HOLDINGS PTY LTD Applicant
AND
VALUER GENERAL
First Respondent
GRIFFIN POWER PTY LTD
Second respondent
Catchwords: Valuation of land - Preliminary issue - Power station - Meaning of the word 'machinery' - Meaning of improvements Legislation: Valuation of Land Act 1978 (WA), s 4, s 23, Pt IV, s 33(2)
Valuation of Land Regulations 2009 (WA), reg 2(b)
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Result: The word 'machinery' defined and applied
Summary of Tribunal's decision: The applicant is the proprietor of land upon which is located a power station. The first respondent valued the gross rental valuation of the applicant's land. The applicant objected to the first respondent's valuation, and the first respondent disallowed that objection. The applicant applied to the Tribunal for review of the decision to disallow the objection.
The parties agree that a correct valuation under the Valuation of Land Act 1978 (WA) requires an assessment of the unimproved value of the land plus any improvements. Under the Valuation of Land Act 1978 (WA) the definition of improvements excludes machinery.
At the hearing, the parties agreed that the main issue in dispute was the definition of 'machinery' and that the parties could agree on the valuation of the land if the term 'machinery' was defined. The Tribunal defined machinery and concluded that the items on the land in dispute between the parties did not fall within its definition of 'machinery'. However, the Tribunal determined to hear from the parties regarding the orders to be made.
Category: B
Representation: Counsel:
Applicant : Mr M Hotchkin
First Respondent : Ms F Seaward
Second respondent : Mr M Hotchkin
Solicitors:
Applicant : Hotchkin Hanly
First Respondent : State Solicitor's Office
Second respondent : Hotchkin Hanly
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Case(s) referred to in decision(s):
Auckland City Corporation v Auckland Gas Co Ltd [1919] NZLR 561
Boans Ltd and Valuer General and the City of Perth (Supreme Court of Appeal No 228 of 1981)
Carbery Milk Products v Commissioner of Valuation Appeal (No VA95/4/026 Valuation Tribunal)
Griffin Windfarm Holdings Pty Ltd and Valuer General [2012] WASAT 224
Hutt Valley ElectricPowerboard v Lower Hutt City Corporation [1949] NZLR 611
John Reilly v National Insurance and Guarantee Corporation Ltd [2008] EWCA Civ 1460
Mayor and Councillors of Perth v Perth Gas Company Ltd (1903) 5 WALR 28
Trust Company of Australia Ltd v The ValuerGeneral [2007] NSWCA 181
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 The applicant, Griffin Windfarm Holdings Pty Ltd, (Griffin Windfarm) is the proprietor of Lot 101 as shown on Deposited Plan 61201 (Blue Waters site) with a street address at Boys Home Road, Collie, Western Australia. 2 In May 2010, the first respondent (Valuer General) valued the gross rental value (GRV) of the Blue Waters site. Griffin Windfarm objected to the valuation and on 6 July 2011 the Valuer General disallowed that objection. 3 Griffin Windfarm sought a review of the Valuer General's decision to disallow the objection pursuant to Pt IV of the Valuation of Land Act 1978 (WA) (VL Act). The Valuer General referred the valuation to the Tribunal for review under s 33(2) of the VL Act in September 2011. Preliminary issues arose and have been addressed by the Tribunal; Griffin Windfarm Holdings Pty Ltd and Valuer General [2012] WASAT 224. The proceedings in respect of the remaining issues then took place on 21 June 2013.
Facts 4 There is little or no factual dispute between the parties in this matter.
The Blue Waters site 5 The Blue Waters site houses the Blue Waters Power Station, which has two power generation units, construction of which was completed in 2009. Unit 1 was commissioned on 1 August 2009 and Unit 2 was commissioned on 1 December 2009. The two units are virtually identical. 6 The Blue Waters site is located within the Shire of Collie.
The power station 7 The two generators comprising the Blue Waters Power Station are coal fired, each with a rated output of 208 megawatts. The car park and the administration/workshop building are located in the central northern portion of the Blue Waters site. The chemical storage area and the water tanks are located immediately southeast of the administration/workshop building. The ash conditioning and service water ponds are located south of the administration/workshop building and the waste water holding ponds and cooling towers are located to its northeast. (Page 5)
8 The two power generator units are located to the southeast of the administration/workshop building. The main structures within each generator unit comprise coal conveyor lines, a coal handling plant, boiler plant (57.5 metres in height), steam turbine generator plant, ash handling plant, a chimney stack and switch rooms.
Method of valuation 9 Up until 1 July 2009, the appropriate value of the Blue Waters site for rating purposes was the unimproved value (UV). However, on 24 February 2009, the Shire of Collie resolved to apply to the Minister for Local Government to change the method of rating from UV to GRV. As mentioned later in these reasons, the Blue Waters site capital value could not be reasonably determined as a basis for assessing GRV. Therefore, the Valuer General based its valuation on the unimproved value of the site and the 'estimated replacement cost of improvements to the land after making such allowance for obsolescence, physical depreciation, and such other factors that are appropriate in the circumstances'; s 4 of the VL Act. 10 The parties agree that: Valuation under review 11 The Blue Waters site was valued by the Valuer General in 2010 under s 23 of the VL Act (Interim valuations) with effect from 1 January 2010, with the date of valuation being 1 August 2005. 12 GRVs for the Shire of Collie are revalued every four years and the date of coming into force of the GRV for the Blue Waters site (1 January 2010) falls within the 1 July 2006 to 30 June 2010 revaluation period. Hence it is an 'interim value' under the VL Act.
Legislation 13 Section 4 of the VL Act defines the term 'gross rental value' as follows: (Page 6)
gross rental value of land means the gross annual rental that the land might reasonably be expected to realize if let on a tenancy from year to year upon condition that the landlord were liable for all rates, taxes and other charges thereon and the insurance and other outgoings necessary to maintain the value of the land, provided that (a) where the gross rental value of land cannot reasonably be determined on such basis, the gross rental value shall be the assessed value; and (b) the gross rental value of any land not used for residential purposes only shall, where the value of the improvements on the land is less than one-third of what would have been the value of the land if it were vacant land, in any event, be not less than what would be the assessed value of the land if it were vacant land; and (c) the gross rental value of any land separately valued shall, in any event, be not less than $20; and (d) calculation of the gross rental value of any land shall include any payment normally or usually made for or in relation to a tenancy of the kind in question but shall not include any allowance, by discounting or otherwise, for advance payment or late payment of rent that may apply; … 14 The parties accept that the GRV of the Blue Waters site cannot be assessed by reference to the gross annual rental that the land might reasonably be expected to realise because there is insufficient market evidence of rental for uses such as power stations. The parties also accept that the valuation of the improvements on the Blue Waters site is greater than one third of what would have been the value of the Blue Waters site if it were vacant land. 15 The definition of GRV in the VL Act provides that in such circumstances the GRV is to be determined by reference to the assessed value. Section 4 of the VL Act defines assessed value as follows: (Page 7)
16 The percentage of capital value of the land has been prescribed by the Valuer General at 5%; (reg 2(b) of the Valuation of Land Regulations 1979 (WA). 17 Section 4 of the VL Act defines the term 'capital value' as follows: capital value of land means the capital amount which an estate of fee simple in the land might reasonably be expected to realize upon sale provided that where the capital value of land cannot reasonably be determined on such basis, the capital value of such land shall be the sum of, first, the unimproved value of the land, and, secondly, the estimated replacement cost of improvements to the land after making such allowance for obsolescence, physical depreciation, and such other factors as are appropriate in the circumstances; … 18 The capital amount which the Blue Waters site, as an estate in fee simple, might reasonably be expected to realise upon sale cannot be reasonably determined because, as with rental evidence, there is no or little evidence of comparable sales of power stations in Western Australia. Accordingly, the parties agree that the Blue Waters site needs to be valued using the alternative method of valuation to determine the capital value, namely the sum of: 19 Section 4 of the VL Act relevantly defines UV as 'the capital amount that an estate in fee simple in the land not including improvements might reasonably be expected to realize upon sale'. 20 Section 4 of the VL Act defines 'improvements' as follows: improvements in relation to land means the value of all works actually effected to land, whether above or below the surface, and includes fixtures, but does not include (a) machinery, whether fixed to the land or not; or (b) any below ground works used in the extraction of minerals or petroleum (Page 8)
The Blue Waters Power Station 21 Before I go to the issues between the parties and the parties' submissions, I will first briefly set out the structure and operation of the Blue Waters Power Station. To that end, I am greatly assisted by the engineers' reports provided to the Tribunal by the parties. 22 As previously noted, the Blue Waters Power Station consists of two individual generating units plus supporting common infrastructure and facilities. The Blue Water Power Station is based on typical, conventional, sub-critical coal fired power generation technologies, with no unique features. 23 The principal processes involved in the operation of the Blue Waters Power Station are: a) combustion; b) thermodynamics and heat transfer; c) fluid flow; d) aerodynamics; e) material handling and logistics; f) pollution control; and g) electrical power conversion. 24 In essence, the combustion process generates the high temperatures which create high temperature gases. The heat from those gases evaporates pressurised boiler feedwater and generates steam. 25 The thermodynamic processes seek to maximise efficiently the energy at the inlet to the steam turbine, while lowering the temperature at the steam turbine exhaust. The overall temperature difference between the turbine inlet and the turbine exhaust is a primary motive force of the energy conversion cycle. 26 Fluid flow processes include fuel supply, both coal and oil, water systems, chemical supply systems, steam and vapour systems and waste streams. (Page 9)
27 The aerodynamic processes are implemented through fans, including cooling towers, air supply ducts, air compressors and the generator cooling air paths. 28 Material handling and logistics processes are continuously employed throughout the Blue Waters Power Station, including the delivery, storage and supply of coal and oil, the collection, processing and disposal of ash and the delivery, storage and treatment of the various water streams within the overall processes. 29 Pollution control processes include the discharge of exhaust gases to the atmosphere through high chimney stacks, the removal of particulate ash from the discharged combustion gases, the containment and safe disposal of contaminated liquid effluent streams and noise abatement. 30 Electrical power is generated by the continuous rotation of the generator rotor, produced by the steam turbine, within the generator stator magnetic field. The arrangement of the generator windings generates the electrical voltage at the terminals of the generator. The electrical voltage is then converted, within the transformer equipment, for export to the transmission and distribution systems.
Issues 31 In essence, the dispute between the parties is simply this: what elements of the Blue Waters Power Station are machinery and should therefore be excluded when assessing the capital value of the Blue Waters site? 32 The parties filed an agreed statement of the issues which remain to be determined, in the following terms 1. What is the meaning of 'machinery' under the VL Act and, applying that meaning, what items on the Blue Waters site are machinery, the cost of which is not to be taken into account in determining the replacement cost of 'improvements' to the Blue Waters site? 2. What is the estimated replacement cost of nonmachinery 'improvements' to the Blue Waters site after making allowance for obsolescence, physical depreciation and such other factors as are appropriate? 3. What is the appropriate GRV of the Blue Waters site, assessed under the VL Act? (Page 10)
33 However, at the hearing, the parties agreed that a finding on the first issue will enable the parties to determine the second and third issues (T:5657; 21.06.13). 34 A further issue was then raised by counsel for Griffin Windfarm late in the proceeding, one which had not been raised in Griffin Windfarm's earlier statement of issues, facts and contentions. Griffin Windfarm says that the Valuer General has proceeded on the basis that if anything constructed on or in the Blue Waters site is not machinery, then it must be an 'improvement'. Griffin Windfarm says that this is not correct and cites authority for the proposition that not all alterations of land by 'human hands' effect improvements. Accordingly, even if I find that certain things in or on the Blue Waters site are not machinery, then Griffin Windfarm submits that I should find that some or all of them are not improvements either. 35 I will deal with this in more detail later in these reasons. I should add though that I only had the benefit of some brief written submissions on this point from Griffin Windfarm and oral submissions at the hearing. Further, because this issue had not been raised previously, the Valuer General had no opportunity to make any considered comments at the hearing. 36 The Valuer General was at the end of the hearing given leave to make a written submission on this issue. However, the Valuer General elected not to do so.
The parties' submissions 37 The parties accept that the term 'machinery', which is not defined in the VL Act, is to be understood by its ordinary and popular meaning. 38 The Macquaire Dictionary (5thed, 2009) defines machinery to mean 'machines or mechanical apparatus'. It defines the term 'machine' as: an apparatus consisting of interrelated parts with separate functions, which is used in the performance of some kind of work. 39 The Oxford English Dictionary (3rded, 2010) defines 'machinery' to mean 'machines, or the constituent parts of a machine, regarded collectively'. It defines the term 'machine' to mean: A complex device, consisting of a number of interrelated parts, each having a definite function, together applying, using, or generating mechanical or (later) electrical power to perform a certain kind of work. (Page 11)
40 Both parties in their submissions on the meaning of 'machinery' cite a decision of the New Zealand Court of Appeal in Auckland City Corporation v Auckland Gas Co Ltd [1919] NZLR 561 (Auckland Gas). Auckland Gas is a case which involved an interpretation of a statutory provision which defined rateable property to include lands, tenements or hereditaments with building and improvements thereon and which expressly excluded machinery whether fixed to the soil or not. The case concerned gas works constructed in the City of Auckland. The gas company asserted that all of its gas pipelines laid throughout the City of Auckland were part of a 'machine'. 41 In that case, the majority held that gas pipes were not machinery so that the land in question was held to be rateable property. Hosking J at page 590, by reference to Professor WJM Rankine's Manual of machinery and millwork (5th ed 1883) described 'machinery' as being something used to transmit and modify motion and force and says that the parts of which it consists may be distinguished into two principal divisions: 42 After considering Auckland Gas, together with a number of other decisions which the Valuer General considers to be of 'limited assistance', the Valuer General contends that an appropriate definition for the term machinery is: A complex apparatus that consists of a number of interrelated moving parts to perform a certain kind of work. 43 The Valuer General derives this definition from the dictionary meanings of machinery, read in conjunction with Auckland Gas and with the decision in John Reilly v National Insurance and Guarantee Corporation Ltd [2008] EWCA Civ 1460 (John Reilly). This is a case dealing with an insurance claim after a fire where the policy excluded coverage if the fire was caused by failure of machinery. In John Reilly, MooreBick LJ said at [13]: A similar point can be made in relation to the word 'machinery' which has no precise definition but in ordinary usage generally connotes a mechanical device of a certain level of size and complexity that operates by means of moving parts. (Page 12)
44 The Valuer General says that a specialist processing plant such as a power station should not be treated as a single interconnected machine, but rather as an integrated operation comprising both machinery and nonmachinery items. Regard should be had, the Valuer General contends, to each item in order to ascertain whether it constitutes machinery or not. 45 The Valuer General submits that structures which house or support machinery do not constitute machinery for the purposes of the definition. The Valuer General cites by way of example, pipe racks, frames for elevated conveyors, conveyor transfer stations and plant houses. Other examples which the Valuer General considers to be nonmachinery items include buildings, roads, towers, exhaust stacks, tunnels, gas storage vessels, ponds, dams, hopper bins, loadout silos and general plant site works and civil works. 46 The Valuer General accepts that items which fall within the definition of machinery include ore crushers, ball mills, pumps, generators, thickener tanks and conveyors. 47 Griffin Windfarm disagrees with the Valuer General's meaning of 'machinery', saying that it relies on only one of the two divisions of the definition of machinery referred to in Auckland Gas, namely the mechanism of moving parts. Griffin Windfarm says that Auckland Gas and a later New Zealand case of Hutt Valley ElectricPowerboard v Lower Hutt City Corporation [1949] NZLR 611 (Hutt Valley) which cited Auckland Gas and adopted it with approval, do not support the Valuer General's approach. That said, Griffin Windfarm accepts that those cases stand for the proposition that if the function of a machine is to manufacture gas or electricity, then items which transmit the manufactured product to a location at a distance do not form a necessary part of that function and are therefore not part of the 'machine'. However, it is Griffin Windfarm's submission that both Auckland Gas and Hutt Valley make it clear that the infrastructure of a 'machine' constitutes 'machinery', because that infrastructure is an integrated part that serves the functionality of the 'machine'. 48 Griffin Windfarm then goes further. It says that all of the improvements on the Blue Waters site, including earthworks, are there for the purposes of a power station. A power station is a machine. Griffin Windfarm therefore considers that all items in or on the Blue Waters site are machinery (see for example, (T:20; 21.06.13)). (Page 13)
49 Accordingly, Griffin Windfarm says, all of those items on the Blue Waters site should be excluded when assessing the site's GRV. 50 The responsive view of the Valuer General to that approach is that it is too simplistic. According to the Valuer General, Griffin Windfarm is arguing that a power station is simply one large machine. However, the Valuer General considers that when the power station is examined further, it is clear that it is composed of different processes, each containing different components and each which have their own function. The Valuer General says that each component needs to be examined in order to determine whether it constitutes machinery (whilst keeping in mind the role of the component in the 'whole'). When this examination takes place, the Valuer General says, it is clear that some components do not operate so as to apply, use or generate mechanical or electrical power to perform a certain kind of work. Some components are merely passive or supportive. These are distinct from those other components which do operate so as to apply, use or generate mechanical or electrical power to perform a certain kind of work. 51 The Valuer General concedes that it is not appropriate to break down an identifiable item (such as a thickener tank or a washing machine) into parts, for example, the lid of the washing machine, and then ascertain whether that part is a machine or not. The Valuer General does not consider that the power station in this case should be analysed to this degree, and says that it has not done so. 52 Finally, the Valuer General makes the point that Griffin Windfarm's approach will produce some 'illogical results'. For example, foundations and footings on that approach are to be machinery because they are attached to the relevant machine and necessary for it to operate. That means that when the machine is sitting on a concrete slab, the slab will constitute a machine, but when the machine is taken off the slab it will not. In each case, the Valuer General says, the concrete slab is identical. In each case it does not consist of moving parts and is merely passive and supporting. However, in one case, the Valuer General says, it constitutes a machine and in the other it does not.
The Tribunal's findings 53 The issue about which I am to make findings can be divided into two parts. First, there is the meaning of 'machinery' under the VL Act. Second, applying that meaning, I am asked what items on the Blue Waters site are machinery. (Page 14)
54 I will deal with these two questions separately.
The meaning of 'machinery' 55 In Boans Ltd and Valuer General and the City of Perth (Supreme Court of Western Australia Appeal No 228 of 1981) (Boans) Brinsden J considered an earlier decision of the Full Court, the Mayor and Councillors of Perth v Perth Gas Company Ltd (1903) 5 WALR 28 (Perth Gas), which had held that gas pipes beneath the streets of the City of Perth were 'machinery' for the purposes of the statutory definition of 'improvements' for rating purposes. Brinsden J held that the Perth Gas was 'not really helpful as to the meaning then to be ascribed to the word "machinery" as it amounted only to an application of the word to a particular set of facts'; Boans at 10. He went on to say that more helpful guidance could be found in Auckland Gas where in the judgments of the majority the view is expressed that the word should be interpreted in its popular sense. 56 The issue in Boans centred on the meaning of the word 'machinery' in the definition of 'improvements' in the VL Act. Brinsden J concluded that in his view the word 'machinery' in that definition should be given the same meaning as found favour with the majority in Auckland Gas; Boans at 11. 57 The definition of 'improvements' in the VL Act has not substantially changed since the date of that decision and accordingly I believe that I am bound by the decision in Boans. Even if that is not the case, I respectfully consider that the approach taken in Boans is correct. 58 The decision in John Reilly is not of any great assistance to me. The definition of machinery suggested in that decision was raised in the context of explaining why fire protection equipment is not machinery. I do not consider that machinery necessarily needs to consist exclusively of moving parts, so long as it applies, generates or uses mechanical or electrical power to perform work. However, I do accept that at least some aspect of a machine must involve movement. 59 Further, I agree with Griffin Windfarm that the Valuer General's interpretation of the word 'machinery' must be broadened to include also the second limb of the Auckland Gas definition. 60 However, I do not go so far as to agree with Griffin Windfarm's contention that the second part of the definition includes the 'infrastructure' of the machine in question. The second part of the (Page 15)
definition refers to the 'frame' of the machine, a significantly narrower term than 'infrastructure'. I consider the 'frame' of the machine to be its enclosing structure. 61 Finally, I agree with the Valuer General that the entirety of the Blue Waters Power Station should not be regarded as 'a single interconnected machine' but rather as an integrated operation comprising both machinery and nonmachinery items. Only by using the word 'machine' in a metaphorical sense could I regard the entirety of the Blue Waters Power Station as a machine; see AucklandGas at 591. 62 Taking all this into account, I consider that an appropriate meaning for the term 'machinery' is: A complex device that consists of a number of interrelated parts, together applying, using or generating motion and force to perform a certain kind of work, and includes the casing or enclosing frame of the device.
What items on the Blue Waters site are machinery? 63 As mentioned earlier in these reasons, the parties have already agreed that items to be regarded as machinery include ore crushers, ball mills, pumps, generators, thickener tanks and conveyors. 64 For the purpose of the valuation, the parties have produced a schedule of the items at the Blue Waters site about which agreement has not been reached (Schedule). For ease of reference, I have attached a copy of the Schedule to these reasons. It names and describes some 82 items and gives, amongst other things, an assessable cost for each one. 65 A number of those items have been crossed out, signifying that the parties have subsequently agreed that the items concerned are machinery. There are, however, about 70 items still in dispute. 66 Griffin Windfarm in its written submissions says that each of the items in the Schedule falls within one of three 'sections', namely: (Page 16)
proper reduction of the risk of injury or hazards to the environment or individuals (and here Griffin Windfarm suggests by way of example, fire services, security and waste management); and 67 I will deal with the items in the Schedule by reference to the three categories suggested by Griffin Windfarm.
The built infrastructure 68 Griffin Windfarm describe the built infrastructure of the Blue Waters Power Station as physical structures which are used to support, contain, and house equipment and other items necessary for the operation of the power station. While I agree that the plant, buildings, stations and store rooms are parts of the power station which house plant essential for the proper and sufficient operation of the power station, I do not consider that any of these items are machinery. Accordingly, any of the items in the Schedule which comprise buildings, earthworks, trenches, footings or pilings should be excluded.
Fire services and security 69 I do not consider that fire service items, items for the protection or safety of the environment or safety items generally (including perimeter fencing) can be regarded as machinery. They do not apply, use or generate motion and force to do their work, nor are they an integral part of any of the items that do so. 70 This is despite the fact that these items are undoubtedly necessary or desirable for the overall purposes of the Blue Waters Power Station and, in the case of the environmental protection and safety items, necessary for the licensing and other regulatory requirements of the Blue Waters Power Station.
Receptacles 71 Griffin Windfarm cites an Irish decision which concluded that receptacles, which may include tanks or ponds, may be part of a 'machine' if the receptacle in question is 'in itself a proximate part of the manufacturing process'; Carbery Milk Products v Commissioner of Valuation Appeal(No VA95/4/026 Valuation Tribunal) (delivered 14 March 1997) (Carbery). (Page 17)
72 In Carbery, where the rateability or otherwise of eight milk tanks was in issue, it was held by the Tribunal that three of the tanks were rateable and five were nonrateable. 73 However, Carbery involves a consideration of whether or not, when valuing property, certain tanks and receptacles could be excluded because they are constructions which are 'designed or used primarily to induce a process of change in the substance contained or transmitted'. The Tribunal in that case considered that the three tanks which were held to be rateable, did nothing more than store skimmed milk. The five tanks which were considered to be unrateable, and therefore excluded, were part of the process in question, being the process of producing skimmed milk. 74 The issue is different in this case. In considering whether or not the items in the Schedule are 'machinery', the test is not whether or not they are part of the process of producing electricity. The test is whether or not they apply, use or generate motion and force to perform their function. I consider that the items in question are no more than holding receptacles and cannot be described as machinery.
Improvements 75 I turn now to consider briefly Griffin Windfarm's suggestion that nothing on or in the Blue Waters site is in any event an 'improvement' and therefore should not be included in any consideration of GRV. 76 Griffin Windfarm refers to a decision of the New South Wales Court of Appeal, Trust Company of Australia Ltd v The ValuerGeneral [2007] NSWCA 181. There, Campbell JA said at [24] that 'the notion of an increase in value or profitability is an inherent part of the concept of an "improvement"'. At [30], he said that improvements to land involve 'a notion of something that improves the value of the land'. 77 Griffin Windfarm says that in the context of a power station, if the power station does not operate then the 'improvements' are nothing that would add any value to a purchaser of the land. 78 The difficulty which I have with Griffin Windfarm's argument in this respect is that it does not take into account the fact that the word 'improvements' is defined in the VL Act, whereas in the New South Wales Act the Court relied on the popular or dictionary meaning of improvements. (Page 18)
79 In the VL Act, 'improvements' means, relevantly, '… the value of all works actually effected to land …' (emphasis added). While I might accept that some of the 'improvements' on the Blue Waters site do not in fact enhance the value of the land in the circumstances described by Griffin Windfarm, they are most certainly works and therefore, unless they are also machinery, they must be taken into account when assessing the capital value of the site.
Conclusion 80 I consider that all of the remaining items in the Schedule are improvements within the meaning of the VL Act and that, based on the descriptions of each in the Schedule, none of those items are machinery. 81 However, the description of each item in the Schedule is somewhat brief, and the engineers' comments in the case of some of the items focus on the purpose of those items within the process of generating electricity rather than describing their function. Griffin Windfarm therefore has liberty to apply to the Tribunal in respect of any items of the Schedule which it considers fall within the definition of 'machinery' given in these reasons.
Orders 82 I will hear from the parties as to the form of the orders which should be made.
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Schedule
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