Port of Melbourne Corporation v Melbourne City Council (No 2)
[2004] VSC 217
•23 June 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
No. 5845 of 2003
| PORT OF MELBOURNE CORPORATION | Appellant |
| v | |
| MELBOURNE CITY COUNCIL | Respondent |
| and | |
| VALUER-GENERAL OF VICTORIA | Party Joined |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2-4 and 7-8 June 2004 | |
DATE OF JUDGMENT: | 23 June 2004 | |
CASE MAY BE CITED AS: | Port of Melbourne Corporation v Melbourne City Council (No 2) | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 217 | |
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Rating of land appeals – whether appellant’s letter of objection to respondent’s assessment of 1999 levels of site value was a valid objection – objection to be made within two months of the giving of an assessment – right to object found to arise only upon assessment of land tax – evidence that land tax not determined for up to two years after determination of site value – appellant found to be a “person aggrieved” for the purposes of s 16(1) of the Valuation of Land Act 1960 – right to object found to arise on each occasion that an amended land tax assessment notice is issued – appellant’s objection valid, save for certain properties not valued by the respondent
whether appellant’s letter of objection to respondent’s assessment of 2000 levels of site value was a valid objection – evidence that letter of objection was valid as to net annual value – letter not a valid objection as to site value – right to object to site value assessment did not arise until land tax assessment notice issued – appellant’s objection not valid
Valuation of Land Act 1960 ss 15, 16, 17, 18, 19, 21
Local Government Act 1989 ss 155, 156, 157, 158, 184
Land Tax Act 1958 ss 3, 16, 19, 24A, 38
Mundy v Brisbane City Council (1963) 13 LGRA 187
Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 35 ALR 151
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J Delany SC with Mr DJ Batt | Minter Ellison |
| For the Respondent and the Party Joined | Mr JG Judd QC with Ms A Ryan | Victorian Government Solicitor |
HER HONOUR:
Introduction
The respondent (“the Council”) is the rating authority for a substantial area of land within the Port of Melbourne (“the land”) which is owned and controlled by the appellant, the successor to Melbourne Port Corporation. It is convenient to refer to both the appellant and Melbourne Port Corporation as (“PMC”); the distinction is not significant in the present context. The Council assesses inter alia the site value of the land, and while the Council itself imposes rates by reference to net annual value rather than site value, the site value attributed to the land by the Council’s valuation may be used as the basis for the imposition of land tax by the Commissioner of State Revenue (“the Commissioner”), pursuant to section 16 of the Land Tax Act 1958 (‘the Land Tax Act”). Thus while the Council has no financial interest in the assessment of site value which it performs, that assessment is a matter of significance to the Commissioner.
The land includes a variety of different occupancies, including land occupied by PMC for the administration of the Port of Melbourne and both large and small areas occupied by tenants of PMC.
By Notice of Objection dated 28 September 2001 (“the 1999 objection”), PMC objected to the site values assessed in respect of the land as at 1 January 1999. On 10 January 2002 the Council disallowed the objection and, at the request of PMC, referred the objection to the Victorian Civil and Administrative Tribunal (“the Tribunal”) for review.
By Notice of Objection dated 4 October 2001 (“the 2000 objection”) PMC similarly objected to the site values assessed in respect of the land as at 1 January 2000. On 10 January 2002 the Council disallowed the objection and, at the request of PMC, referred the objection to the Tribunal for review.
On 16 June 2003 this Court ordered, pursuant to section 23(3) of the Valuation of Land Act 1960 (“the Valuation Act”), that the matters constituted by those Notices of Objection, as well as a preliminary issue pending in respect of those Notices of Objection (“the preliminary issue”), be treated as appeals to this Court, and be removed into and heard and determined by the Court, and that the party joined (“the Valuer-General”) be joined as a party to those appeals.
By Notice of Objection dated 8 May 2002 PMC similarly objected to the site values assessed in respect of the land as at 1 January 2002 (“the 2002 objection”). On 8 October 2003, there having been no decision on the 2002 objection, PMC gave notice requiring that the Council treat that objection as an appeal to the Court in accordance with section 22 of the Valuation Act. No action has been taken in response to that notice. In the present proceeding counsel for PMC requested that the Court direct that the Council treat the 2002 objection as an appeal to the Court and cause it to be set down for hearing. That request was opposed by the Council, and after hearing argument I determined that the matter would proceed only upon the basis of the material already before the Court.
The preliminary issue
The present proceeding is the hearing of the appeal in relation to the preliminary issue, which concerns the competency of the 1999 and 2000 Notices of Objection. On 7 June 2004 I made the following orders:
1.Pursuant to Rule 47.04 of the Supreme Court (General Civil Procedure) Rules, the following questions be tried before the trial of the proceeding:
(a)Having regard to such relevant and admissible evidence as may be adduced:
(i)Is the Appellant’s objection to 1999 levels of site value lodged with the Melbourne City Council on 28 September 2001 a valid objection under the Valuation of Land Act 1960 (Vic)?
(ii)Is the Appellant’s objection to 2000 levels of site value lodged with the Melbourne City Council on 4 October 2001 a valid objection under the Valuation of Land Act 1960 (Vic)?
2.Any fact determined at the trial of the preliminary questions is determined for the purpose of the proceeding.
Relevant legislation
Relevant provisions of the Local Government Act 1989 (“the LGA”) read as follows, so far as relevant:
155.What rates and charges may a Council declare?
A Council may declare the following rates and charges on rateable land¾
(a)general rates under section 158;
156.Liability to pay rates and charges
(1)The owner of land is liable to pay the rates and charges on that land.
(2)If the owner cannot be found or identified, the occupier of, or the mortgagee in possession of, the land is liable to pay the rates and charges.
157.Which systems of valuing land may a Council use?
(1)A council may use the site value, net annual value or capital improved value system of valuation.
158.Declaring rates and charges
(1)A Council must at least once in respect of each financial year declare by 31 August the following for that year¾
(a)the amount which the Council intends to raise by general rates . . .
(3)A Council may levy general rates, . . . by sending a notice to the person who is liable to pay them.
(3A)At the written request of the person liable to pay rates or charges, the Council may send the notice to a person specified in the written request.
(4)The notice must¾
(a)contain the prescribed information; . . .
184.Appeal to County Court
(1)A person who is aggrieved¾
(a)by a rate or charge imposed by a council under this or any other Act; or
(b)by anything included or excluded from such a rate or charge¾
may appeal to the County Court for a review of the rate or charge.
(1A)this section does not apply to a matter in respect of which an objection or appeal may be made under Part III of the Valuation of Land Act 1960 . . .
The “prescribed information” referred to in section 158(4) appears in Regulation 96 of the Local Government Regulations 1990 which were in force at the relevant time.
Relevant provisions of the Valuation Act read as follows, so far as relevant:
15.Rating authority must give notice of valuation
(1)A rating authority that makes a valuation or causes a valuation to be made must, in respect of each rate it makes or intends to make, give to the person liable for the payment of that rate¾
(a)a notice of valuation that¾
(i)identifies the land in respect of which the rate is or will be payable; and
(ii)shows the several bases of value assessed in respect of the land; and
(iii)states the date as at which the value of the land was assessed; and
(b)a notice that some other authority may use one of the bases of value shown for the purposes of a rate or tax levied by that authority.
(2)The notice referred to in sub-section (1)(b) must be given before or at the same time as the notice referred to in sub-section (1)(a).
(3)If the person liable for payment of the rate is not the occupier of the land, the rating authority must also give the notices referred to in sub-section (1) to the occupier.
.. .
16.Who may object?
(1)A person aggrieved by an assessment of the value of any land made by or for a rating authority may lodge a written objection with the rating authority on any one or more of the grounds set out in section 17.
(2)An objection must¾
(a)be in the prescribed form; and
(b)give particulars of the bases of valuation to which objection is made; and
(c)state the grounds on which the objection is based.
(3)However, a rating authority cannot disallow an objection only because of a failure to comply with sub-section (2).
(4)The occupier of land valued by or for a rating authority is deemed to be a person aggrieved by an assessment of the value of the land whether or not the occupier is liable to be rated by the rating authority.
(5)A person is deemed to be a person aggrieved by an assessment of the value of land if¾
(a)the person is liable for or required to pay any rate or tax in respect of land; and
(b)notice of a valuation of the land has not been given to that person by the rating authority which made it or which caused it to be made.
(6)A person referred to in sub-section (5) must give written notice of an objection to the person or body that issued the assessment of the rate or tax and to the rating authority that made the valuation or caused it to be made.
17.Grounds for objection
The grounds for an objection are¾
(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 are not correctly stated in the notice of valuation, assessment notice or other document.
18.Time for lodging objection
(1)An objection to a valuation made by the Commissioner or for the Commissioner by a person or authority other than a municipal council must be lodged within 2 months after the notice of assessment based on that valuation has been given under the Land Tax Act 1958.
(2)In any other case, an objection must be lodged¾
(a)if any of the valuations in the notice given by the rating authority under section 15(1)(a) appear for the first time¾within 2 months after the notice is given; or
(b)if a valuation that has appeared in a notice given by the rating authority appears in a subsequent notice given by that authority¾
(i)if the subsequent notice is given on or after 1 February but before 1 October in any year¾within 2 months after the subsequent notice is given; or
(ii)in any other case¾during February or March next after the subsequent notice is given; or
(c)in the case of a person referred to in section 16(5)¾within 2 months after receiving the notice of assessment of the rate or tax.
19.Further limitation on lodging of objections if previous objection lodged
(1)If an objection to the valuation of any rateable land is lodged with a rating authority and considered by the valuer of that authority under section 21, a further objection to that valuation cannot be made within 12 months after the lodgement of that objection.
(2)Sub-section (1) applies whether the valuation is used by the rating authority to whom the objection was made or another rating authority.
21.Determination of objection in any other case
(1)Except in the case of an objection referred to in section 20, the rating authority must cause an objection lodged with it to be considered and determined in accordance with this section.
(2)The rating authority must refer an objection to the valuer for that authority, who must provide a reasonable opportunity for the objector to discuss the matter with him or her.
(3)Within 2 months after receiving an objection, the valuer must¾
(a)if he or she considers that no adjustment in the valuation is justified¾give the objector written notice of that decision; or
(b)if he or she considers that an adjustment in the valuation is justified¾
(i)recommend accordingly to the valuer-general; and
(ii)give the objector and the rating authority a copy of the recommendation.
.. .
Section 20 is not relevant to this matter.
Relevant provisions of the Land Tax Act read as follows, so far as relevant:
3.Definitions
(2)For the purposes of assessing the tax to be charged, levied or collected under this Act in any year . . .
(a)in respect of any tax year up to and including 2002, the unimproved value of any land shall be an amount equal to the site value (as defined in the Valuation of Land Act 1960) of the land as at the relevant date adjusted in accordance with sub-section (4) . . .
(2A)In sub-section (2) “the relevant date” is¾
(a)where the land is within the municipal district of a municipal council¾
(i). . . the date as at which rateable properties within the municipal district were valued for the purposes of the last general valuation returned to the municipal council before 1 January in the year immediately preceding the year for or in which the land tax is being assessed;
.. .
16.As to use of valuations by Commissioner
For the purpose of the assessment and levy of taxation the Commissioner may use¾
(a)valuations made by a rating authority within the meaning of the Valuation of Land Act 1960;
(b)valuations made by the Valuer-General or a valuer nominated by the Valuer-General;
19.Amended assessments
The Commissioner may from time to time amend an assessment by making such alterations or additions to it as he thinks necessary to ensure its completeness and accuracy, and shall notify to the taxpayer affected every alteration or addition which has the effect of imposing any fresh liability or increasing any existing liability and unless made with the consent of the taxpayer every such alteration or addition shall be subject to objection in the same manner and to the same extent as the original assessment but the validity of an assessment shall not be affected by reason only that any of the provisions of this Act have not been complied with.
24A.Objections
(1)Any person who is dissatisfied with the assessment of the Commissioner may give to the Commissioner within 60 days after service of the notice of the assessment an objection in writing against the assessment stating fully and in detail the grounds on which he relies but the Commissioner must not entertain any objection relating to the unimproved value of land where the assessment is based on a valuation made under the Valuation of Land Act 1960.
(1A)Nothing in sub-section (1) limits or affects the right of any person to object to a valuation in accordance with the provisions of Part III of the Valuation of Land Act 1960.
38.Valuation may be acted on while objection or appeal is pending subject to adjustment
(1)The fact that in respect of any assessment or any valuation upon which an assessment has been made an objection has been received by the Commissioner or by any rating authority or an appeal has been made to the Supreme Court or the Tribunal or that a case has been stated for the determination of the Supreme Court and is pending shall not in the meantime interfere with or affect the assessment and tax may be made, levied and recovered on the assessment in like manner as if no objection had been received and no appeal or case stated were pending.
(2)In the event of the assessment being altered on objection or case stated or appeal, a due adjustment shall be made, for which purpose amounts paid in excess shall be refunded, and amounts short-paid shall be recoverable as arrears.
Sub-section 3(4) of the Land Tax Act provides for the assessment of land tax on the unimproved value of the land which is to be deemed to be the site value determined as set out in sub-section 3(2), multiplied by the prescribed equalization factor, if any.
The 1999 objection
The Council submits that the 1999 objection lodged on 28 September 2001 was lodged out of time and was therefore incompetent. In its submission, the time for lodgement of an objection to the assessment of site value as at 1 January 1999 commenced on 31 August 1999, when Rate and Valuation Notices containing that assessment were issued by the Council to PMC, and expired on 31 October 1999, two months after that date, by virtue of section 18(2)(a) of the Valuation Act.
The principal affidavits were those of Mr Marsh, Manager, Rates and Valuations of the Council, who is a valuer, Mr Searle, formerly Manager, Property Management of PMC, and Mr Harvey, formerly a Property Manager with PMC. Each of those deponents gave oral evidence.
Evidence
A general valuation was made by the Council as at 1 January 1999 of all rateable properties within its municipal district. On or about 31 August 1999 the Council issued Rate and Valuation Notices in respect of properties owned by PMC.
Section 156 of the LGA has the effect that the primary liability for payment of rates rests with the owner of the land. However, in respect of a number of the properties, PMC had earlier asked the Council to send rate notices directly to its tenants. It is to be presumed that PMC’s leases include a covenant for payment of rates by the tenants. It is common ground that notices relating to the site values of the tenanted properties were not sent to PMC.
An e-mail of 27 September 1999 from Saana Bourne, then Manager, Property Management, of PMC, to Mr Berryman, who then held the position at the Council now held by Mr Marsh, asking for a schedule of the assessment included the words “I would appreciate your early attention as we have only until 30/10/99 to object”.
A spreadsheet (“the 1999 spreadsheet”) was sent by the Council to PMC on or about 8 October 1999. It contained assessments of site value and other information in respect of the properties owned by PMC in the Council’s municipal district.
On or about 29 October 1999 the Council received notices of objection, completed and signed by Mr Harvey, relating to two properties. The Council recommended to the Valuer-General that adjustments be made to the site value of those properties and those recommendations were approved by the Valuer-General.
Between September and November 1999 supplementary valuations were carried out by the Council, at the request of PMC, in respect of eighteen of PMC’s properties. Notices of Supplementary Valuation in respect of those properties were issued on or about 23 December 1999. Supplementary Valuations in respect of a further three properties were carried out in May 2000.
The effect of section 3(2A) of the Land Tax Act is that the site values assessed by the Council as at 1 January 1999 were used by the Commissioner for the purpose of assessing land tax for 2001. The Commissioner notified PMC of those site values in a land tax assessment notice dated 9 March 2001, again in an amended land tax assessment notice dated 24 May 2001 and again in an amended land tax assessment notice dated 1 August 2001. Neither the 9 March notice nor the 24 May notice included a level of site value for the property numbered 27 (“the Moonee Ponds Creek property”). The notice issued on 1 August 2001 differed relevantly from the two earlier notices only in the addition of a level of site value for that property.
In the 1999 objection, lodged on 28 September 2001, PMC objected to the site values of properties enumerated in a schedule to the Notice of Objection and numbered from 1 to 100. That schedule was a copy of the schedule to the amended land tax assessment issued by the Commissioner on 1 August 2001. The objection was disallowed by Mr Marsh on 10 January 2002.
The properties numbered 87 to 100 in that schedule are outside the boundaries of the Council’s municipal district, and were never valued by the Council. It is not in issue that those properties are unable to be the subject of objection to the Council.
Four properties listed in the schedule, numbers 27, 44, 45 and 46, had been valued by the Council, but the values assessed by the Council were not the values attributed to those properties in the schedule to the Notice (i.e. the schedule to the land tax assessment of 1 August 2001). Section 16 of the Land Tax Act in effect permits the Commissioner to use values assessed by municipal councils, other rating authorities, the Commissioner, the Valuer-General, or a valuer nominated by the Valuer-General.
Discussion
The principal submission of Mr Delany, for PMC, was that a fresh right to object to site value arose each time the taxpayer received a land tax assessment notice, whether original or amended. He emphasised that it was necessary, in considering the meaning of the relevant provisions of the Valuation Act, to bear in mind the relationship between that Act, the LGA and the Land Tax Act. The provisions of the Valuation Act relating to objections were relevant to circumstances arising under both the LGA and the Land Tax Act, by virtue of section 184(1A) of the LGA and section 24A of the Land Tax Act.
He began with the submission that the right to object arose only once the basis of value determined began to “bite”, i.e., the recipient of the assessment notice became required to pay a rate or tax based on that valuation. It was not until that point that the recipient became a “person aggrieved” in terms of section 16(1) of the Valuation Act which empowers “a person aggrieved by an assessment of the value of any land made by or for a rating authority” to object to that assessment.
In support of that submission, he relied upon the judgment of the Full Court of the Supreme Court of Queensland in Mundy v Brisbane City Council[1], where Hoare J said:
As observed by Lord Parker CJ in Ealing Corporation v Jones [2], it is easier to say what will not constitute a person aggrieved than it is to say what “person aggrieved” includes. It is clear from the authorities that a person aggrieved does not include every person who is discontented or annoyed at the decision or who is adversely affected in some indirect manner by the decision. “A ‘person aggrieved’ must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, or wrongfully affected his title to something”: Ex parte Sidebotham; In re Sidebotham per James LJ [3] .
[1](1966) 13 LGRA 187 at 192
[2][1959] 1 QB 384 at 390
[3](1880) 14 Ch. D 458 at 465
Stable J, in the same case [4] said:
The oft-quoted classic statement of James LJ in [Sidebotham] was the subject of remark by the Judicial Committee in Attorney-General of the Gambia v N’jie[5], where it was re-affirmed that the definition of James LJ is not to be regarded as exhaustive. It was held that the words “person aggrieved” are of wide import and should not be restricted to a restrictive interpretation. “They do not include, of course, a busybody who is interfering in things which do not concern him: but they do include a person who has a genuine grievance because an order has been made which prejudicially affects his interests.” And, as Lowe J mentioned in Johnstone v Hicks[6], Fullagar J in Dentry v Stott[7] posed as a test that a person’s interest must be really and directly affected by the order made for him to be a party who feels aggrieved. Another way of explaining “person aggrieved” is the expression of Lord Esher MR in Ex Parte Official Receiver; In re Reed, Bowen & Co[8], where he said that “a person aggrieved” must be “a man against whom a decision has been pronounced which has wrongfully refused him something which he had a right to demand”.
The decisions are many and they point to the impracticability of seeking to define “a person aggrieved”.
[4]at 189
[5][1961] AC 617 at 634
[6][1948] VLR 213 at 214
[7][1947] VLR 462
[8](1887) 19 QBD 174 at 177-178
While the position is summed up in the last paragraph of the passage cited from the judgment of Stable J, it is not necessary to seek to define a “person aggrieved” in order to interpret and apply the expression in the various statutory provisions where it is employed. None of the authorities cited above relates to legislation providing a right to object to a valuation. But it does seem to me that those authorities lead to the conclusion that a person does not become a “person aggrieved” by an assessment of the value of land which is made for taxing purposes until that person is required to pay a rate or tax which is based upon that valuation. Parliament has chosen to confer the power to objection on a “person aggrieved by the assessment of the value of any land”. Had it wished to confer that power on the owner of the land as such, it could have done so.
That principle must be qualified by the deeming provisions of sub-sections 16(4) and (5). But it should be noted that sub-section 16(6) provides for the notice of objection to be given to “the person or body that issued the assessment of the rate or tax”, which assumes that it is not until the rate or tax has become payable that the person in question becomes a “person aggrieved”.
Mr Judd, for the Council, submitted that the concept of a “person aggrieved” was flawed, and foreshadowed further submissions in that regard. However, in the event no such submissions were made.
Section 16(1) of the Valuation Act empowers “a person aggrieved by an assessment of the value of land made by or for a rating authority” to lodge an objection with “the rating authority”. (Emphasis added.) The expression “rating authority” is defined in section 2(1) of the Valuation Act to include both the Council and the Commissioner, as well as other authorities. Looking at the expression “by or for a rating authority”, it can be seen that assessments of site value are made by municipal councils and for the Commissioner, as a council does not use site value for its own purposes. Section 16(1) would thus appear to enable objections to be lodged either with the council which made the assessment or with the Commissioner for whom it was made; the expression “the rating authority” could relate back to either.
Mr Delany submitted that the recipient of a rate notice which includes a statement of site value does not know whether that value will be relied upon by the Commissioner for the assessment and imposition of land tax. The site value is not used by the Council for its rating purposes, so that if it is to be used at all, it will be used by the Commissioner for a land tax assessment which will not issue for two years, by virtue of section 3(2A) of the Land Tax Act. It is not until then that the recipient becomes a “person aggrieved”.
In the interim, he submitted, the Commissioner may have decided to obtain a different valuation, and not to use the assessment of site value made by the Council, bearing in mind that section 16 of the Land Tax Act empowers the Commissioner to use valuations made by any rating authority as defined in the Valuation Act, or by the Valuer-General or a valuer nominated by the Valuer-General. Or there may, in the interim, have been a supplementary valuation or the owner may have sold the land. If any of these events occurred, and the right to object had arisen once only, that once being on the receipt of the rate and valuation notice, as the Council here maintains, the taxpayer would be deprived of the right to object to the assessment of site value on the basis of which that taxpayer’s land tax was ultimately assessed.
Accordingly, Mr Delany’s submission was, if I understood him correctly, that the right to object to the assessment of site value must arise only upon the receipt of a land tax assessment based upon that site value.
That being so, he submitted, the right to object must arise, and the two months’ period must begin to run, on every occasion when an amended assessment of land tax is received. This followed, in his submission, from the existence of the grounds of objection appearing as grounds (d), (e) and (f) in section 17 of the Valuation Act. If there were no right of objection to an amended assessment, it would be possible that one or more of those grounds might be frustrated.
In the present case, the notice of assessment of 1 August 2001 was amended by the inclusion of a site value assessment relating to the Moonee Ponds Creek property as at 1 January 1999, which had not been included in earlier notices of assessment based on the site values. Thus that notice of assessment was the first notice of the 1999 levels of site value sent to PMC which included all the land owned by PMC within the City of Melbourne. The 1999 objection was lodged within two months of that notice of assessment and was therefore competent.
He pointed out that section 18(2) of the Valuation Act gives a right of objection to a valuation on each occasion when that valuation is contained in a rate and valuation notice, and section 19 of the Land Tax Act gives a right of objection to an amendment of an assessment where the amendment has been effected by the Commissioner. It would be unfair, he submitted, if the right of objection was less, in the case of an assessment of site value made by a council for land tax purposes, than in either of those situations.
Mr Judd submitted that to allow repeated objections would cause administrative chaos. However, as Mr Delany pointed out, in any event, by virtue of section 38 of the Land Tax Act, the tax is to be levied and recovered pending the resolution of the objection; if objections have to be dealt with, there may be a subsequent adjustment of the amount of the rate, but the taxing authority has received the tax.
It was not suggested that the power conferred on ratepayers by section 18 of the Valuation Act to object each time the same valuation appears in a rate and valuation notice has caused administrative chaos for municipal councils.
Mr Judd relied on a passage from the judgment of Latham CJ in Trautwein v FCT[9], a decision of the High Court under the Income Tax Assessment Act 1922-1934, as authority for the proposition that the effect of section 19 of the Land Tax Act is that an amended assessment entitles the taxpayer to object only to the amendment and not to the whole assessment. However, section 19 is relevant to objections made under the Land Tax Act and not to objections made under the Valuation Act; the relationship between the Valuation Act, the LGA and the Land Tax Act is not necessarily comparable with the scheme under legislation relating to objections to assessments of income tax.
[9](1936) 56 CLR 63 at 93-4
Finally, Mr Delany relied upon the principle that in the case of ambiguity in a taxing statute a benevolent interpretation should be adopted. A number of authorities relating to that principle are considered in Pearce & Geddes, Statutory Interpretation in Australia [10] . The authorities relate to the interpretation of provisions creating a liability for payment of tax, rather than to the availability of a right to object to an assessment of value. However, as Mason and Wilson JJ said in Cooper Brookes (Wollongong) Pty Ltdv FCT[11] :
The fact that the Act is a taxing statute does not make it immune to the general principles governing the interpretation of statutes. The courts are as much concerned in the interpretation of revenue statutes as in the case of other statutes to ascertain the legislative intention from the terms of the instrument viewed as a whole.
Clearly it is the intention of the three relevant Acts, the LGA, the Land Tax Act and the Valuation Act, to provide a scheme enabling objections to be made to the valuation of land in the context of rating and taxing. I accept that in the case of ambiguity as to the existence of gaps in that scheme, it is appropriate to proceed on the basis of such an intention.
[10]Fifth edition at paragraphs 9.30 and following
[11](1981) 35 ALR 151 at 171
Taking into account the matters to which I have referred, I accept the submission of Mr Delany that it was open to PMC to object to the whole of the amended land tax assessment of 1 August 2001, and that, the 1999 objection having been made within two months of the giving of that assessment, the 1999 objection was a valid objection in so far as it related to properties other than those numbered 87 to 100 in the schedule.
The 2000 objection
The Council submits that the 2000 objection is incompetent, by virtue of section 19(1) of the Valuation Act, because it was made within 12 months of the lodgement of an earlier objection to that valuation. The evidence on this issue derives from the same affidavits and oral evidence as already referred to in the context of the 1999 objection.
Evidence
A general valuation was made by the Council as at 1 January 2000 of all rateable properties within its municipal district. On or about 28 August 2000 the Council issued Rate and Valuation Notices in respect of properties owned by PMC, containing valuations as at 1 January 2000.
On 25 October 2000 Saana Bourne, then Manager, Property Management of PMC, wrote to Mr Marsh, Manager, Rates and Valuations of the Council, in the following terms (“the 25 October letter”):
Dear Mr Marsh
Objection to Values of Melbourne Port Corporation properties
I am writing to lodge a formal objection to the values placed on the properties within the Melbourne Port Corporation’s asset located within the City of Melbourne precinct.
At a glance, some of the values appear to be too high and I am currently undertaking an analysis of all the assets valued by MCC and need additional time to continue the review. As soon as I have completed the assessment, I will lodge a more detailed submission to you in due course.
I understand that this letter will satisfy the formal objection date of 31/10/00 and MCC will accept a detailed submission shortly. Please confirm if this is acceptable to you.
Mr Marsh replied by letter dated 27 October 2000 as follows:
Dear Ms Bourne
Objection to Valuation – Melbourne Port Corporation Properties
I acknowledge receipt of your objection on 26 October 2000 against the valuations of the above property, pursuant to section 16 of the Valuation of Land Act 1960.
It is a requirement of the Act that I must determine the objection within two months of it being lodged, after providing you with a reasonable opportunity to discuss the matter. Accordingly, could you please contact me upon receipt of this letter to arrange a mutually convenient time for an appointment with one of our valuers.
To assist our discussion it would be helpful if you could prepare a written submission, detailing your reasons for the objection. This should include factual details such as land and building areas, together with the most current rental and outgoings information relating to the property. Most importantly, the submission should also include a summary of your conclusions as to what the valuations should be for the property.
Please note that the lodgement of this objection does not alter the ratepayer’s responsibility to pay the rates assessed on the property by the due dates set out on the rate notice. If valuation changes occur as a result of successful objection, rates will be adjusted retrospectively.
If you require further information regarding the objection process, please contact either myself on 9658 9328 or Terry Cerini, Senior Valuer, on 9658 9183.
On 9 February 2001 Mr Harvey was a Property Manager for PMC, having responsibility for some of the properties owned by that body and reporting to Saana Bourne. On that date he sent an e-mail to Mr Karutz, a valuer at the Council, which began “I have almost finished reviewing the council rates for 2000/2001”. He went on to point out that four of the properties listed in the notice did not belong to PMC and submitted that one, an electricity sub-station, was “exempt from rating”. He expressed the view that the site values attributed to five of the properties appeared to be too high. Mr Harvey deposes that he discussed the five properties with Mr Karutz by e-mail and by telephone. The e-mails exhibited to his affidavit end inconclusively with an e-mail dated 19 March 2001 in which Mr Harvey undertook to “get back to” Mr Karutz, which apparently was not followed up. Mr Harvey further deposes that on a date soon after 19 March 2001, he told Mr Karutz by telephone that PMC “had decided not to pursue its objections in relation to” those properties.
Those five properties were the only properties in respect of which there is any evidence of discussion as to valuation between the Council and PMC following the 25 October letter. There is no evidence of any other action taken by PMC of the kind foreshadowed in that letter. The objection contained in the 25 October letter was disallowed on 21 June 2001.
On or about 4 August 2001 the Council issued rate and valuation notices in respect of all rateable property within its municipal district. Mr Marsh deposed that those notices contained the same valuations as at 1 January 2000 as appeared in the notices issued on 28 August 2000.
On or about 4 October 2001 the Council received two notices of objection signed by Mr Searle, for PMC, which have together been referred to here as “the 2000 objection”. Both notices were specifically expressed as objections to the site value, capital improved value and net annual value of the properties to which they applied. The 2000 objection was disallowed on 10 January 2002.
Discussion
The submission of Mr Judd is that the 25 October letter constituted an objection to the site values as at 1 January 2000 in respect of all properties owned by PMC in the municipal district of the Council. The effect of section 19(1) of the Act was that a further objection to that valuation could not be made within twelve months after the lodgement of that objection. The 2000 objection, having been lodged on 4 October 2001 had been lodged within that period and was therefore, he submitted, not competent.
There is one qualification to that submission. It is conceded by the Council that the 2000 objection was competent in respect of ten properties, listed in exhibit 6, in respect of which supplementary valuations had been made after 25 October 2000, so that the 2000 objection was not, in respect of those properties, an objection to the same valuation as that objected to in the 25 October letter.
While the 25 October letter is somewhat vaguely expressed, in my view it was intended to be an objection to all valuations – site value, capital improved value and net annual value, in respect of all properties owned by PMC. Mr Marsh’s reply of 27 October 2000 indicates that it was received as a valid objection, although it did not contain the information needed to enable it to be dealt with as an objection. However, section 16(3) provides that an objection cannot be disallowed only because of a failure to comply with the requirements of section 16(2). The sending of the 25 October letter appears to have been intended as a holding operation, relating to all properties owned by PMC, thus enabling PMC to provide later detailed information to the Council in respect of any properties as to which an objection to any assessment of valuation was thought to be appropriate. The only properties in respect of which any further action was in fact taken were those which Mr Harvey discussed with Mr Karutz.
It is to be noted that Mr Harvey’s e-mail of 9 February 2001 refers to “reviewing the council rates”, and to the sub-station as “exempt from rating”, although he then goes on expressly to query the site values, which are relevant only to the assessment of land tax.
Mr Marsh’s letter of 27 October 2000 in reply to the 25 October letter similarly refers to “the ratepayer’s responsibility to pay the rates assessed on the property by the due dates set out on the rate notice.” It may be that Mr Marsh took the 25 October letter to constitute an objection only to net annual value and capital improved value, the values relevant to rates, and not to site value, which was relevant only to the assessment of land tax. It may be that that is what was intended by Ms Bourne when she used the expression “the values placed on the properties within the Melbourne Port Corporation’s asset located within the City of Melbourne precinct”. The only specific reference to “site values”, in the limited documentation before the Court relating to this whole issue of the 2000 objection, is in the e-mail correspondence between Mr Karutz and Mr Harvey.
However, on balance, I have, as I have said, formed the view that the 25 October letter was intended as an objection to all three assessments of value.
Mr Delany submitted that even if, as I have found, the 25 October letter constituted an objection to the 2000 levels of site value, the evidence of Mr Harvey indicates that it was withdrawn by him orally to Mr Karutz. I did not find Mr Harvey to be an entirely satisfactory witness. However, although there is no written evidence of any withdrawal of the objection, the lack of action following the final e-mail of 19 March 2001 is consistent with the decision, to which he deposed, not to pursue PMC’s objections further in relation to the five properties. I note the submission of Mr Judd that it is inconceivable that, as Mr Harvey said in evidence, a matter as important as the withdrawal of an objection would not be documented and require express authorisation. However, it seems probable that a decision “not to pursue the objections” was not perceived at the time as being anything as formal as a withdrawal. The use of the expression “not to pursue the objections” would tend to support that view, as would Mr Harvey’s oral evidence.
There is no documentary evidence of a withdrawal, and the objection was formally disallowed by Mr Marsh on 21 June 2001. This would surely not have been done had the objection been withdrawn; and, as Mr Judd suggested, if it had been withdrawn, Mr Harvey or Ms Bourne would surely have drawn this to the attention of the Council on receipt of the notice of disallowance, in order to protect the entitlement of PMC to make a subsequent objection.
Mr Marsh said in evidence that it was the practice of the Council to make every endeavour to get any withdrawal of an objection in writing. However, there is no evidence of any written request by him to PMC for a written withdrawal of the objection. Had he requested a written withdrawal, whether by letter or orally, there would seem to be no reason why, if PMC had intended to withdraw the objection, it would not have responded with a withdrawal in writing.
Taking into account what has been said, and noting that Mr Harvey did not say in either his affidavit or his oral evidence that he “withdrew” the objection contained in the 25 October letter, I am of the view that no withdrawal took place.
Section 19(1) prohibits the making of a further objection within twelve months after the first objection to a rating authority only if that first objection has been “considered by the valuer of that authority under section 21”. Mr Delany submitted that there had been no consideration of any objection contained in the 25 October letter in the manner required by section 21. He also referred to passages from the judgment of the Federal Court in Tickner v Chapman[12] , including the statement of Black CJ [13] that “consideration of a document such as a representation or a submission . . . involves an active intellectual process directed at that representation or submission”, and submitted that no consideration of that kind had taken place.
[12](1995) 57 FCR 451
[13]at 462
If I understood Mr Delany correctly, he submitted that requirement in section 21 that the valuer provide an opportunity for discussion with “him or her” had the effect that the objection must be “considered” personally by the valuer of the responsible authority. There was no evidence that Mr Marsh had personally considered the objection of PMC. The five properties were considered by Mr Karutz of his staff, but not by him.
I do not accept Mr Delany’s submission. I am satisfied that in his letter of 27 October 2000 Mr Marsh provided to Ms Bourne a “reasonable opportunity” as required by section 21, to discuss the objection contained in the 25 October letter with one of the Council’s valuers. Discussion with a valuer employed as such by the responsible authority must be a satisfactory compliance with section 21(2) and thus with the requirement for consideration in section 19(1). It is clear from the e-mails that Mr Karutz directed an “active intellectual process” at the matter of the value of the five properties.
Thus, if the 25 October letter can be read as constituting an objection to site values, I would accept the submission of the Council that section 19 has the effect that the 2000 objection is not competent.
The 25 October letter was a response to the Council’s Rate and Valuation Notices of 28 August 2000. In those notices, PMC was presumably informed of its liability for Council rates and of the assessments as at 1 January 2000 of site value, capital improved value and net annual value relating to each of its properties. [14]
[14]There does not appear to be a copy of those Notices in evidence, but I would assume that they followed the same form as the Rate and Valuation Notices of which there are copies before the Court in the context of the 1999 objection.
The Council calculates rates on the basis of net annual value and the assessment of net annual value thus “bit”, to use Mr Delany’s expression, on the issuing on 28 August 2000 of those Rate and Valuation Notices requiring payment of a rate based on that assessment. Mr Harvey’s e-mail of 9 February 2001, in its references to “reviewing the council rates” and to the sub-station as being “exempt from rating”, shows a recognition of this fact.
The 25 October letter was expressed to be an objection to “the values placed on the properties within the Melbourne Port Corporation’s asset located within the City of Melbourne precinct.” I find, as I have said, that it is to be read as an objection to all three bases of valuation. Thus it was a valid objection in respect of net annual value (and of capital improved value on which the calculation of net annual value is based) [15] because those valuations had “bitten” and PMC was therefore a “person aggrieved” thereby in respect of the 2000 levels of value of net annual value and capital improved value contained in the Rate and Valuation Notices issued on 28 August 2001.
[15]See the definition of net annual value in section 2(1) of the Valuation Act.
However, the 25 October letter could not be regarded as a valid objection in respect of site value, because the assessment of site value did not “bite” until 15 March 2002, when the Commissioner issued assessments relying on the 2000 assessment of site value. It was at that time that the right of objection arose.
Accordingly, not only did the 25 October letter not contain a valid objection to the 2000 assessment of site values because the right to object to those values had not yet arisen; the 2000 objection lodged on 4 October 2001 was invalid for the same reason. And it was invalid for that reason in respect of all the properties owned by PMC to which it was expressed to relate, including the ten properties listed in exhibit 6.
Conclusion
For the reasons given, I find the answers to the two questions contained in the order of 7 June 2004 to be:
(i)the Appellant’s objection to 1999 levels of site value lodged with the Melbourne City Council on 28 September 2001 is a valid objection under the Valuation of Land Act 1960, save as to the properties numbered 87 to 100 in the schedule thereto.
(ii)the Appellant’s objection to 2000 levels of site value lodged with the Melbourne City Council on 4 October 2001 is not a valid objection under the Valuation of Land Act 1960.
Counsel may wish to make submissions as to the form of the orders to be made and as to costs.
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