Mobil Oil Australia Ltd (Respondent 1) v the Valuer-General (Respondent 2) and the Corporation of the City of Port Adelaide No. SCGRG 91/1691 Judgment No. 3908 Number of Pages 11 Local Government (1993) 80 Lgera

[1993] SASC 3908

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), OLSSON(2) AND PERRY(1) JJ

CWDS
Local government - valuation of land - objections and appeals - no right of objection in Council under s. 24 Valuation of Land Act - valuation made in response to Council's invalid objection ineffectual as correction of valuation adopted by Council for year ended 30th June 1991 - amended rate notices for that year based upon such valuation made after adoption of estimates by Council, invalid - such valuation nevertheless a valuation attracting operation of s.171(3) of Local Government Act and therefore forming valid basis of rate assessments for year ended 30th June 1992 - application of s.184(7) to circumstances.

HRNG ADELAIDE, 4 March 1993 #DATE 29:4:93
Counsel for appellant:             Mr B R M Hayes QC with
   Mr M J Roder
Solicitors for appellant:         Norman Waterhouse
Counsel for respondent Mobil:     Mr D J Bleby QC with
   Mr M J Liebich
Solicitors for respondent:         Thomson Simmons and Co
Counsel for respondent:            Mr D J Bleby QC with Valuer-General: Mr M J Liebich
Solicitors for respondent:         Crown Solicitor Valuer-General

ORDER
Appeal allowed.

JUDGE1 KING CJ This is an appeal against a decision of Justice Matheson in an action for judicial review whereby he made declarations of invalidity in relation to certain rate assessments of the defendant Council. 2. The facts and relevant statutory provisions are set out in the judgment of Olsson J. 3. I agree for the reasons given by Matheson J for the judgment appealed from and by Olsson J on this appeal that the purported appeal by the Council against the Valuer-General's valuations of the plaintiff's land was invalid because the Valuation of Land Act confers no right of objection upon a Council. 4. It follows that the purported correction of the valuation adopted by the Council for the year ended 30th June 1991 has no legal foundation. 5. The position is rather more complex with respect to the year ended 30th June 1992. The valuation made in consequence of the invalid appeal, increasing the values of the two parcels of land to $250,000 and $3,200,000 respectively, was notified to the Council on 15th May 1991. The amended values were not included on the Valuation Roll immediately. Consequently when the Council adopted the Valuer-General's valuations on 3rd June 1991 for the year ended 30th June 1992, the values shown on the Valuation Roll were $250,000 and $2,000,000 respectively. The Valuation Roll which contained these values was expressly referred to in the Notice in the Gazette notifying the adoption by the Council of the Valuer-General's valuation. That, however, does not conclude the question whether the 1991-2 assessment of the freehold land should not have been based upon the value of $3.2 million instead of the value of $2 million. 6. When a Council adopts the valuations of the Valuer-General, what governs the assessment, according to s.171(3) of the Local Government Act, is not the value appearing on the Valuation Roll at the time, but the most recent valuations available to the Council at the time the Council adopts the estimates of income and expenditure for the year under Part IX of the Act. Section 159 which is contained in Part IX provides that the estimates must not be adopted more than one month before the commencement of the financial year. The estimates for the year ended 30th June 1992 must therefore have been adopted after the receipt by the Council of the notification by letter dated 15th May 1991 of the increase in the valuation of the freehold land to $3.2 million. The letter also notified the increase in value of the leasehold land to $250,000. These valuations were therefore available to the Council when the estimates were adopted and must govern the assessment of rates for the year ended 30th June 1992. 7. It was argued that a valuation made in order to assist in the determination of an invalid objection has no legal status and cannot be a valuation for the purpose of s.171(3) of the Local Government Act. I cannot accept that argument. The valuation made by the Valuer-General and notified to the Council by letter dated 15th May 1991 is in every sense a valuation. It is true that the occasion for making the valuation was an invalid objection by the Council, but that, in my opinion, cannot deprive it of its character as a valuation. The making of valuations other than the general valuation under s.14 of the Valuation of Land Act is authorised by s.15 where that course is necessary or expedient. The valuation itself demonstrates that in the view of the Valuer-General the land had been valued at figures far below the true value. That alone must make it expedient to make another valuation. I do not think that the fact that the Valuer-General by his valuation purported to determine an objection under s.24 of the Valuation of Land Act deprives what he did of the character of a valuation capable of attracting the operation of s.171(3) of the Local Government Act. 8. It follows from what I have said that, in my opinion, when the Council declared the rate pursuant to s.174 of the Local Government Act for the year ended 30th June 1992, the respondent ratepayer's assessment for that year fell to be arrived at by applying that rate to the latest valuations available to the Council being the sums of $250,000 and $3.2 million notified to the Council on 15th May 1991. The declaration of the rate created a liability pursuant to s.183 to pay the rates so assessed. It appears that the respondent's rates were due in one instalment pursuant to s.184 on a day determined by the Council pursuant to s.184(2)(c). That day was 2nd September 1991. 9. The Council was required by s.184(7) to send an account for the rates to the respondent ratepayer at least 60 days before the date on which the rates fell due. It did that in relation to each property by means of separate documents each entitled "Notice of Rates" dated 1st July 1991 which nominated 2nd September 1991 as the "last date to pay". A problem arises from the fact that the notice relating to the freehold land embodied an assessment of $20,740 being calculated upon the wrong valuation, that is to say the valuation of $2 million instead of $3.2 million. 10. The Council sought to overcome this problem by sending a document also entitled "Amended Notice of Rates" on 22nd August 1991. It showed the assessed value as $3,200,000. It showed the total assessment as $33,184 made up of "Difference for original account $12,444 due 22/10/91" and "$20,740 due 2/9/91". 11. Mr Bleby for the plaintiff ratepayer criticised the Notice given on 22nd August as being a Notice for payment by two instalments which did not comply with s.184 of the Act as to equality of instalments or the month in which the second instalment was to be paid. It is quite clear, however, that these rates were not payable by instalments. The determination of the Council was for one instalment due on 2nd September 1991. The Notice was an attempt to comply with s.184(7) as to the excess over the previous incorrect assessment. 12. The obligation imposed on the Council by s.184(7) is to send the account at least 60 days before "the instalment falls due". The sending of the account is therefore not a pre-condition of liability. The rates fall due independently of the subsection. The underlying liability is created by the combination of sections 171, 174 and 183. The liability crystallises when the rates fall due on the date determined by the Council pursuant to s.184(2). Failure to send an account, or to send an account within the prescribed time, cannot affect that liability. The rates still become due on the determined date for payment and, if not paid, are in arrears from that date (s.184(8)). 13. It is difficult to apply the procedure prescribed by s.184(7) for the sending of accounts to a situation in which an error by way of understatement of the true assessment, has been made in the original account. The requirement for payment to be made on the due date determined in accordance with s.184(2) is in conflict, as to the excess, with the obligation to send an account at least 60 days before that date. The procedure can only be applied mutatis mutandis. I think that the Council followed the correct course by showing a date 60 days ahead as the date for payment of the excess. Perhaps the course followed can be regarded as an informal postponement of payment by the Council pursuant to s.185(1)(b). If that is not so and the ratepayer was in arrears in strict law, the power to remit in s.185 could be used to remit fines and interest in respect of the additional period allowed. 14. In my opinion therefore the plaintiff's liability for rates for the year ended 30th June 1992 is as notified in the account entitled "Notice of Rates" dated 1st July 1992 in respect of the leasehold land and the account entitled "Notice of Rates" sent on 22nd August 1991 in respect of the freehold land. 15. I would therefore allow the appeal for the purpose of setting aside such of the declarations and orders made by Matheson J as invalidate the increased assessment for the year ended 30th June 1992. I would affirm such of the declarations and orders as invalidate the increased assessment for the year ended 30th June 1991. I would reserve liberty to speak to the Minutes.

JUDGE2 PERRY J I agree with the reasons published by His Honour the Chief Justice, and with the orders proposed by him. 2. The disposal of the appeal on this basis makes it unnecessary to consider the argument advanced by the respondent Mobil Oil Australia Ltd that the Valuer-General had failed to observe the requirements of the rules of natural justice in preparing his revised valuation, as that argument related to the procedures applicable where there is a valid appeal or objection from the Valuer-General's valuations.

JUDGE3 OLSSON J This is an appeal against a decision of Matheson J whereby, on an application for judicial review, he made orders in the nature of certiorari to remove into this Court to be quashed certain decisions of the Valuer-General. He also declared invalid certain actions of The Corporation of The City of Port Adelaide ("the Corporation") related to rates payable in respect of real estate of which Mobil Oil Australia Ltd ("Mobil") was the registered proprietor. 2. The facts giving rise to the present litigation are not in dispute. Distilled to their essence they may be summarised in these terms:-
    . At all material times Mobil was the registered
    proprietor of:- (1) an estate as lessee of a property
    situated at 132 Elder Road, Largs Bay ("the leasehold
    land"); and (2) an estate in fee simple in a property
    situated at Wills Street, Largs Bay ("the freehold
    land").
    . As at 4 June 1990 the Valuer-General had, pursuant to
    the Valuation of Land Act, 1971 ("the Valuation Act"),
     assessed the capital values of the two properties as
    under:-
    the leasehold land $198,000
    the freehold land $1.58 million
    . On the lastmentioned date, acting in pursuance of
    section 171 of the Local Government Act ("the LGA"), the
    Corporation adopted those valuations (as set out in the
    then current, published valuation roll) for the
    financial year ended 30 June 1991. It issued rate
    assessments to Mobil accordingly. Those assessments
    were duly paid on or about 2 July 1990.
    . On 15 March 1991, as portion of his normal valuation
review programme conducted pursuant to section 14 of the
    Valuation Act, the Valuer-General re-assessed the
    capital value of the freehold land at $2 million.
    . In the meantime, on 15 February 1991, the Corporation
    had written to the Valuer-General, inter alia,
    purporting to object to the then current valuations of
    the freehold land and the leasehold land as being too
    low. It sought, inter alia, to argue that fuel storage
    tanks in situ were part of the capital value of the
    properties and had not been taken into account. This
    objection was sought to be made in reliance upon section
    24 of the Valuation Act, the Corporation purporting to
    be "a person who ... (was) ... dissatisfied with a
    valuation of land in force under the Act".
    . On 19 February 1991 the Valuer-General responded to
    the Corporation, seeking a full and detailed statement
    of the grounds upon which the objection was based, as
specifically required by section 24. The Corporation
    responded by letter supplying such a statement.
    . By letter dated 15 May 1991 addressed to the
    Corporation and sent pursuant to section 25 of the
    Valuation Act, the Valuer-General purported to allow the
    objections and re-assessed the capital values as
    follows:-
    the leasehold land $250,000
    the freehold land $3.2 million
    . On 16 May 1991 the Valuer-General, by letter, also
    advised Mobil of his determinations and the reasons for
    them. He informed Mobil that the value of the storage
    tanks had not been included, but that other fixed
    improvements had been taken into account.
    . On 3 June 1991 the Corporation purported to issue to
    Mobil amended notices of rates for the financial year
    ended 30 June 1991, based on the re-assessed values as
    at 15 May 1991. The resultant increases in rates were
    paid by Mobil to the Corporation on 3 July 1991.
    . By resolution passed on 3 June 1991, the Corporation
    adopted, for the financial year ended 30 June 1992, the
    Valuer-General's then current, published general
    assessment of capital values as set out in a valuation
    roll issued by him pursuant to section 21 of the
    Valuation Act. It appears that, at that date, the
    valuation roll actually adopted contained the valuation
    figure of $2 million for the freehold land, as assessed,
    on 15 March 1991, but had not been updated to include
    both of the purported re-assessments of the two
    properties made in May of that year. The value of the
    leasehold land was apparently still shown as $198,000.
    . Assessments were issued by the Corporation to Mobil,
    on that basis, on or about 25 June 1991 and were,
    presumably, paid by it.
    . The Corporation sought to overcome the problem so
    created by writing to the Valuer-General on 1 July 1991
and "objecting", pursuant to section 24 of the Valuation
    Act, to the valuation of the freehold land shown in the
    assessment adopted - notwithstanding that the
    Valuer-General had already purported to issue a
    re-assessment of it in May of that year.
    . On the same day the Corporation issued amended
    assessments to Mobil, claiming that it had, in any
    event, made an error in the assessments of 25 June 1991
    because it had - it was said - inappropriately passed a
    credit for the additional amounts paid by Mobil on 3
    July 1991.
    . As a response to the Corporation "objection" of 1
    July 1991 the Valuer-General, on 15 August 1991
purported - presumably pursuant to section 24 of the
    Valuation Act - to "re-advise" the Corporation of the
    capital value of the freehold land as $3.2 million.
    . On the basis of that communication the Corporation,
    on 22 August 1991, issued to Mobil a further amended
    notice of rates in respect of the freehold land, based
    on a capital value of $3.2 million.
    . Mobil declined to pay the additional rates claimed in
    the notice of 22 August 1991. In his reasons for
    decision Matheson J concluded that, not only was Mobil
    correct in its assertion that the amended assessments of
    22 August 1991 were invalid, but also that the earlier
    amended notices of rates issued on 3 June 1991 in
    respect of the year ended 30 June 1991 were nullities.
    The present appeal seeks to review the correctness of
    those findings. 3. In addressing the issues arising on the appeal it is convenient, first, to examine the scheme erected by the relevant provisions of the LGA. These are to be found in Part X of that enactment. By virtue of section 170 of the LGA, council rates are normally required to be assessed upon the capital value of ratable property. Section 174 authorises a council, after adopting estimates of expenditure for a particular financial year, to declare a general rate on ratable land in its area for that financial year. In absence of contrary ministerial approval, the rate must be declared by 31 August in the financial year to which it relates. Section 189 requires gazettal of notice of the rate resolved upon within 21 days of its declaration. 4. It is prescribed by sections 169 and 171 that a rate must be based on the value of the land subject to it; and that a council must not declare a rate for a particular financial year without first adopting the valuations that are to apply to land within its area for rating purposes for that year, i.e. that the appropriate property values must be stabilised prior to the levying of the particular rate. 5. To that end the latter section invests a council with options. It may adopt valuations made by the Valuer-General or it may opt for those separately made for the purpose by a valuer employed or engaged by the council itself. The section specifically stipulates that, where a council adopts valuations of the Valuer-General, the most recent valuations available to the council at the time that the council adopts its estimates of income and expenditure will govern the assessment of rates for the financial year. Notice of the adoption must be gazetted within 21 days after the adoption. 6. Section 173 erects a system of objections to valuations by any person dissatisfied with them, where these are made by a valuer employed or engaged by the council. (Valuer-General's valuations may only be impeached in manner provided for in the Valuation Act.) 7. In the instant case, in respect of the years ended 30 June 1991 and 30 June 1992, the Corporation successively gazetted its adoption of the relevant Valuer-General assessments of capital values, being the most recent valuations said then to be available to it on the occasions of each adoption. In each instance it promulgated notice that the assessment so adopted was that deposited at its office and available for inspection, as required by section 180 of the LGA. As I understand the material before the Full Court, that assessment was, on each occasion, in the form of a computer generated valuation roll, as issued by the Valuer-General from time to time in accordance with the provisions of section 21 of the Valuation Act. Clearly, the assessments so generated were published periodically and therefore did not necessarily re-issue immediately after individual re-assessments were made. It seems that, inherently, they were always likely, to some extent, to lag behind recent individual upgradings in relation to specific properties. 8. I next turn to the Valuation Act. This enactment establishes the statutory office of Valuer-General. It requires him to make and publish an initial general valuation of all land in the State in relation to which any statutory rate is to be levied and, thereafter, to upgrade it at least once during each successive period of five years after that initial valuation (section 14). 9. He is, however, empowered, at any time, to make a fresh valuation of any land where, in his opinion, there has been an enhancement or diminution of its value or it is otherwise necessary or expedient to do so (section 15). Any such determination is, by virtue of section 15(3) of the statute, to come into force as from such day as is determined by the Valuer-General. Section 15(4) expressly provides that a value so determined "shall be entered in an appropriate valuation roll". It is that roll which is, from time to time, upgraded and, pursuant to section 21, then made available to those who request it, such as the Corporation. 10. In accordance with section 23 of the Valuation Act the Valuer-General is required to give to the owner of land valued, notice of that valuation. He is not required to give any such notice to a council. 11. Section 24 stipulates that "A person who is dissatisfied with a valuation of land in force under" the Act may, by notice in writing served on the Valuer-General, object to the valuation. An objector is required by the section to supply "a full and detailed statement of the grounds upon which the objection is based". 12. Upon determining an objection the Valuer-General is required to give notice in writing of his decision to the objector in relation to it and, if he allows the objection, to alter the valuation and valuation roll to conform with his decision. The Act goes on to erect a system of review and appeal against a decision of the Valuer-General. 13. As Matheson J correctly identified, a fundamental issue which arose for determination in this case was whether or not, having regard to its terms, a council is, pursuant to section 24, entitled to lodge an objection to a valuation for the time being of ratable land in its area. In his reasons for decision Matheson J traversed the historical evolution of section 24 in its present form. There is no need to retrace the same ground. It is beyond doubt that, historically, an objection could only be made by a person who was an "owner" of ratable land, within the statutory definition of that term. 14. The learned trial Judge pointed out that the statute has always employed the phrase "person who is dissatisfied" and that the right of objection is clearly not limited to the registered owner of land. It could, for example, encompass a lessee who has agreed to pay rates as a term of the lease. It was the opinion of Matheson J that, having regard to the present context of section 24 and its historical evolution, there is, however, simply no warrant for construing the word "person" as including a council which has adopted a Valuer-General's valuation roll. 15. In my opinion that conclusion was plainly correct. There are, indeed, powerful and logical reasons for adopting that construction, quite apart from the fact that it is difficult to perceive, on a fair construction of the expression and scheme of Part III of the Valuation Act, how it could logically be considered that such a council was in contemplation as a potential objector. For example, under section 25(2), if a council is entitled to object, there would be no obligation to notify any decision to the owner of the property. It is only the objector who is notified. 16. It must firmly be kept in mind that it always remains open to a council, on a year to year basis, to consider the Valuer-General's assessment roll and then make a voluntary decision as to whether or not to adopt it, or whether to arrange for an independent valuation. As I read section 171 of the LGA it is further open to a council to adopt the Valuer-General's report either in its totality, or as to some only of the land in its area. In this regard the use of the expression "valuations" in subsections (2) and (3), by way of contrast with the phrase "the valuations" in subsection (1), would appear to be significant. Unless and until a council resolves to adopt a Valuer-General's assessments of value it can have no logical interest in them, so as to render it a person who is dissatisfied. If and when it adopts a valuation roll it takes that roll as it is; and accepts it as being appropriate as a basis for determining the rate to be paid for the relevant financial year. It would be quite unreal (and a clear case of approbation and reprobation) to suggest that, having adopted a valuation roll, a council could then immediately turn around and object to the very valuation which it has accepted as appropriate for striking the rates for the financial year in question. The adoption of the Valuer-General's assessment of value necessarily implies an adoption of the values attributed as being valid at the time of adoption. Section 171(3) renders it abundantly clear that, where a council adopts valuations of the Valuer-General, the most recent valuation roll available to the Corporation at the time when it adopts its estimates of income and expenditure, "will govern the assessment of rates for the financial year". The intention of the legislature could scarcely be spelt out in more unambiguous terms. 17. When section 24 of the Valuation Act speaks of a person who is dissatisfied it is necessarily directing its attention to a party directly and immediately affected by the valuation in issue. Having regard to the scheme of section 171 a council which has adopted an assessment of value is immutably bound by that assessment for the financial year in terms of section 171(3), subject only to any outstanding rights of objection to it by other parties having a proper interest. Any subsequent variation by the Valuer-General in value during the financial year - if he makes one - is irrelevant. A council has no more than a possible potential interest for the next year, because it may then choose to engage an independent valuer, rather than accept the Valuer-General's assessment, as it then stands. It is impossible to envisage how the legislature would have intended to confer on it a right to intermeddle in the situation in such circumstances. Clearly it did not intend to do so. 18. As I have earlier stressed, it is to be borne in mind that, under section 23, the Valuer-General is only obliged to give notice of any valuation to the "owner" of the land valued, as defined in the statute. There is no suggestion that any notice is to be given to the Council. The obvious reason for that situation is that the council has no legitimate interest in challenging such a valuation. Its prerogative is simply to adopt, or not adopt, the assessment roll, or some portion of it, as it stands (at time of projected adoption) from year to year. 19. As Matheson J quite correctly held, it follows, as night follows day, that the purported determination by the Valuer-General, on 15 May 1991, of the Corporation's objection pursuant to section 24 was a nullity; as was its later "re-advising", on 15 August 1991, of a capital value of the freehold land, in response to the further invalid section 24 objection made by the Corporation on 1 July 1991. There is simply no basis for resort to section 15 to salvage either situation, because the Valuer-General expressly purported, in each instance, to act pursuant to and within the confines of section 24. He was doing no more than process an objection, thought validly to have been made. He was not acting pursuant to either sections 14 or 17. 20. It is beyond question that the only valid re-assessment of valuation issued by the Valuer-General during the relevant period was that made by him pursuant to section 15 and promulgated on 15 March 1991. 21. It is true that it was open to the Corporation, at any time, to request the Valuer-General to make a valuation of any land pursuant to section 17 of the Valuation Act. However, it did not do so. A careful reading of section 17 indicates that a valuation which is not expressly made for rating purposes is not to be utilised for such purposes and is not to lead to any amendment of the valuation roll. It is therefore vital, if the Council was to seek to invoke section 17 for such a purpose, that it made a specific request in appropriate terms for a valuation for rating purposes. As I have stressed, what was purportedly done sought to derive authority solely from section 24 - an authority which simply did not exist. 22. It follows from the foregoing reasoning that any assessment notices issued on the basis of the revised valuations made after 15 March 1991 were necessarily invalid because they rested upon purported valuation assessments which were a nullity. It should also be said that the procedure sought to be adopted by the Corporation on 1 July 1991 in seeking a so-called "re-advising" of a valuation, the results of which had not, at that time, emerged on the valuation roll already adopted for the 1991/2 financial year (so as, in practical terms, to achieve a retrospective consequence) was, itself, an impermissible procedure. The Corporation, having adopted a specific valuation roll, was inexorably fixed with the resultant values - for better or worse - for the relevant financial year. 23. I entertain no doubt that the formal order pronounced by Matheson J in these proceedings on 31 July 1992 was patently correct, for the reasons expressed by him. It therefore becomes unnecessary to explore the issues related to natural justice and the asserted right of the Council to issue amended or supplementary rate notices, if the section 24 re-assessments had validly been made. They are best left for another day. 24. I would dismiss the appeal.