Hobart International Airport Pty Ltd v Clarence City Council & Anor; Australia Pacific Airports (Launceston) Pty Ltd v Northern Midlands Council & Anor

Hobart International Airport Pty Ltd and Australia Pacific Airports (Launceston) Pty Ltd (the appellants) appealed to the Full Federal Court against decisions of the Federal Court of Australia concerning the valuation of their respective airport land for the purposes of the *Local Government (Rates and Charges) Act 1990* (Tas). The respondents were the Clarence City Council and the Northern Midlands Council (the councils). The core of the dispute involved whether the land occupied by the appellants, which was leased from the Commonwealth, should be valued for rating purposes on the basis of its unimproved value or its capital improved value.

The primary legal issue before the Full Federal Court was the correct method for valuing the appellants' land for the imposition of rates under the Tasmanian *Local Government (Rates and Charges) Act 1990*. Specifically, the court had to determine whether the valuation should reflect the value of the land as if it were unimproved, or whether it should include the value of the improvements made by the airport operators, notwithstanding that the land was owned by the Commonwealth and leased to the appellants. This involved an interpretation of the relevant provisions of the Act and the *Airports Act 1996* (Cth).

The Full Federal Court held that the *Local Government (Rates and Charges) Act 1990* required the valuation of the land to be based on its capital improved value, not its unimproved value. The court reasoned that the leasehold interest held by the appellants constituted a rateable interest in the land, and the improvements made by the appellants were integral to the value of that interest. The court rejected the argument that the unimproved value should be the sole basis for valuation, finding that the statutory scheme contemplated the inclusion of improvements in the valuation of leased Commonwealth land for rating purposes. The appeals were dismissed.