SANCTUS NOMINEES PTY LTD and VALUERGENERAL

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: VALUATION OF LAND ACT 1978 (WA)
CITATION:   SANCTUS NOMINEES PTY LTD and VALUERGENERAL [2019] WASAT 63
MEMBER:   MS R PETRUCCI, MEMBER
HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   15 AUGUST 2019
FILE NO/S:   CC 1319 of 2018
BETWEEN:   SANCTUS NOMINEES PTY LTD
Applicant
AND
VALUERGENERAL
Respondent

Catchwords:

Land - Valuation - GRV - Crown land - Lease of submerged land - Seabed - Jetty and/or mooring licence - Harbour and private boat pens - Pontoon jetties - Objection to land valuation - Improvements in relation to land - Works actually effected to land - Fixtures - Machinery

Legislation:

City of Wanneroo Town Planning Scheme No 2
Interpretation Act 1984 (WA), s 5
Jetties Act 1926 (WA), s 3
Local Government Act 1995 (WA)
Metropolitan Region Scheme
Public Works Act 1902 (WA)
Rating Powers Act 1988 (NZ)
State Administrative Tribunal Act 2004 (WA), s 17(1), s 27(1), s 29(1), s 29(3), s 60(2)
Valuation of Land Act 1978 (WA), s 4, s 4(1), s 18, s 32, s 33(2)

Result:

Application unsuccessful

Representation:

Counsel:

Applicant	:	Mr B Jones
Respondent	:	Mr I Repper

Solicitors:

Applicant	:	N/A
Respondent	:	State Solicitor's Office

Case(s) referred to in decision(s):

Anthony v The Commonwealth (1973) 47 ALJR 83
Auckland City Council v Ports of Auckland Pty Ltd [2000] 3 NZLR 614
Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700
Boans Ltd and Valuer General and City of Perth (unreported 1984) (Appeal No 49 of 1980-82)
Carbery Milk Products v Commissioner of Valuation Appeal (No VA95/4/026 Valuation Tribunal)
Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297
Elitestone Ltd v Morris [1997] 2 All ER 513
Eon Metals NL v Commissioner of Valuation (Appeal No VA95/4/026 Valuation Tribunal)
Flown Pty Ltd v Goldrange Pty Ltd [2016] WASC 419
Griffin Windfarm Holdings Pty Ltd and Valuer General [2013] WASAT 164
Holland v Hodgson (1872) LR 7 CP 328; [1861-73] All ER Rep 237
National Australia Bank Ltd v Blacker (2000) 104 FCR 288
National Dairies WA Ltd v Commissioner of State Revenue (WA) (2001) 24 WAR 70
Neylon v Dickens [1979] 2 NZLR 714
Sanctus Nominees Pty Ltd and City of Wanneroo [2015] WASAT 86
Sanctus Nominees Pty Ltd and City of Wanneroo [2018] WASAT 54
TEC Desert Pty Ltd v Commissioner of State Revenue (2010) 241 CLR 576
Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89
Webb v Frank Bevis Ltd [1940] 1 All ER 247

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

Two recent decisions of the Tribunal (differently constituted) concern the subject land (described below). They are Sanctus Nominees Pty Ltd and City of Wanneroo [2015] WASAT 86 (2015 decision) and Sanctus Nominees Pty Ltd and City of Wanneroo [2018]WASAT54 (2018 decision). In each of those decisions, the issue before the Tribunal was whether the subject land was 'rateable land' under the Local Government Act 1995 (WA).
In the current proceeding, Sanctus Nominees Pty Ltd (the applicant) disputes that the value of the 'pontoon jetties' (which term is explained later in these reasons) is to be included in the valuation of the subject land assessed by the ValuerGeneral (the respondent) under the Valuation of Land Act 1978 (WA) (VL Act). This is because the applicant contends that the pontoon jetties are not 'improvements' in relation to the subject land as the term 'land' is defined in s 4 of the VLAct and, therefore, cannot be considered by the respondent in calculating the gross rental value (GRV) for the subject land.
The respondent disagrees with the applicant's contention. The respondent says the pontoon jetties are 'improvements' and has therefore included them to calculate a GRV of $1,180,000 for the subject land at the date of valuation being 1 August 2015.

The subject land

The parties filed a statement of agreed facts dated 14 December 2018, which described the subject land as follows (note: some descriptions have been amended for context):
…
3.The subject land comprises Lot 3000 on Plan 44439 and Lot 11187 on Plan 16754, being a portion of Reserve 49997 at Mindarie Keys Marina.
4.The subject land is described as 'seabed' and is submerged, its boundaries being in part defined by the high-water mark.
5.The subject land is owned by the State, vested in the City of Wanneroo and is subject to a Crown Lease which commenced on 6 October 1989 for a period of 50 years with an option to renew (the lease). The lease has been assigned on three occasion, most recently in May 2014 to the applicant.
6.The lease recognises the power of 'the minister or ministers of the Crown for the time being' to grant to the lessee a Jetty and/or Mooring Licence. Further, the lease provides that:
'[T]he lessee shall be at liberty to construct on or in the leased premises any structures authorised by a JettyLicence and to place on the leased premises any apparatus authorised by or required for the purposes of a Mooring Licence. All such structures and apparatus shall be Lessee's improvements for the purpose of thisLease.'
7.A Combined Jetty and Mooring Licence was also granted to the applicant's predecessor in title and has been assigned on each occasion that the lease has been assigned (the licence). The applicant now holds the licence. By the licence, the Minister grants to the licensee:
'(a)a licence to use exclusively the Harbour for the purpose of mooring Vessels; and
(b)a licence to construct (in accordance with plans and specifications first approved by the Minister) use and maintain the Jetties within the Harbour …'
8.The waters above the subject land, the Mindarie Harbour, are referred to in the lease as 'the Harbour' (the Harbour). A portion of the Harbour is used as a boat mooring facility. The Harbour has direct ocean access. The licence permits its holder to construct jetties and to moor vessels within the Harbour. Before the assignment of the lease and the licence to the applicant in May 2014, the 'pontoon jetties' were constructed and placed in the Harbour. The pontoon jetties are currently owned by theapplicant.
Details of the lease and the licence are summarised in the 2015 decision at [16] to [23].
Finally, under the Metropolitan Region Scheme the subject land is zoned waterways and under the City of Wanneroo Town Planning Scheme No. 2 the subject land is unzoned.

Tribunal's review jurisdiction

The applicant has standing in the Tribunal as it is liable to pay rates assessed in respect of the subject land and it is dissatisfied with the respondent's valuation dated 7 June 2018 (s 32 of the VL Act).
The respondent's refusal or disallowance of the applicant's objection is a reviewable decision for the purposes of s 17(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The respondent's role pursuant to s 33(2) of the VL Act is to refer the applicant's letter of 21 June 2018 to the Tribunal, whereupon the referral is treated as an application by the objector (in this proceeding, the objector is the applicant).
The hearing before the Tribunal is de novo which means the Tribunal is not confined to the materials that were before the respondent at the time when the decision was made. The Tribunal must produce the correct and preferable decision (s 27(1) of the SAT Act) in accordance with the functions and discretions corresponding to those exercisable by the respondent (s 29(1) of the SAT Act). The Tribunal may affirm the decision; vary the decision; or set aside the decision and in doing so substitute it with its own decision; or send it back to the respondent to reconsider in accordance with any directions that may be appropriate and, in any case, make any other order the Tribunal considers appropriate (s 29(3) of the SAT Act).

Legal principles

Section 18 of the VL Act requires the respondent to determine, or cause to be determined, the GRV, with respect to rateable land. GRVapplies to this application and is defined in s 4(1) of the VL Act. The relevant part of the definition is set out as follows:
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[.]
The term 'land' is defined in s 4 of the VL Act as follows:
land means lands, tenements and hereditaments, and any improvements to land, and includes any interest in land[.]
Further, s 5 of the Interpretation Act 1984 (WA) provides that 'land' includes 'land covered by water'.
'Improvements' in relation to land is defined in s 4 of the VL Act as follows:
… 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[.]
The term 'machinery' is not defined in the VL Act but in Griffin Windfarm Holdings Pty Ltd and Valuer General [2013] WASAT 164 (Griffin Windfarm) at [62] Sharp J ruled that an appropriate definition for the term 'machinery' as it appears in s 4 of the VL Act 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.

Procedural history in the Tribunal

Orders were made in September 2018 requiring the parties to file an agreed statement of facts, their respective statement of contentions and finally written submissions, with the last of those documents to be filed by 10 May 2019.
The Tribunal had before it the following documents:
a)report on 'Objection to Valuation Mindarie Marina' prepared by Mr M Woods, Manager Specialist Values, Landgate dated 7 June 2018;
b)letter from the applicant to the respondent requesting a review dated 21 June 2018;
c)statement of agreed facts dated 14 December 2018;
d)Deed of lease Mindarie Keys Harbour Bed dated 19 December 1995 between the Minister for Transport and Gumflower Pty Ltd;
e)Mindarie Keys' combined jetty and mooring licence dated 19 December 1995 between the Hon Eric James Charlton and Gumflower Pty Ltd;
e)Respondent's contentions dated 21 December 2018;
f)affidavit of Mr Barry Ronald Jones, Director of the applicant, dated 9 January 2019;
g)affidavit of Mr Hayden Hill, Operations Manager, Shorewater Marine, dated 17 January 2019;
h)applicant's contentions dated 18 January 2019;
i)affidavit of Mr David Lo Jacono, Professor of mechanics, dated 20 January 2019;
j)respondent's written submissions dated 30 April 2019; and
k)applicant's written submissions dated 10 May 2019.
Finally, pursuant to the orders made under s 60(2) of the SAT Act, the application for review has been determined having regards to the above documents.

The pontoon jetties

In the parties' statement of agreed facts dated 14 December 2018, they described the pontoon jetties as follows:
14.More than 150 modular floating pontoons (each being approximately 10 metres in length and 2 metres in width) are coupled together, secured and configured so as to form four floating finger jetties and delineate approximately 250 floating boat pens. The pontoons are secured to vertical pylons that are piled into the seabed and affixed to the seabed.
15.Each pontoon's weight is borne by the water on which it floats and is free to rise and fall with the tides. The pontoons are secured to the pylons by means of metal collars known as 'pile guides', the rubber rollers of which permit this vertical movement but prevent lateral movement of the pontoons (that is, to prevent them from floating away).
…
17.Boats moored in the 'pens' have potable water and electricity provided to them through pipes, wires and conduits that run along the pontoons, from land which is adjacent to them. The pipes, wires and conduits are attached to both the pontoons and the adjacent land.
18.Gangways that provide access to the pontoons are affixed either to dry land or to fixed jetties adjacent to the pontoon jetties, and rest by their own weight on the pontoons.
The Tribunal will therefore use the term 'pontoon jetties' in this matter to refer to the pontoon jetties as described above.

Issues for determination

The respondent valued the subject land with a GRV of $1,180,000 at the date of valuation being 1 August 2015. This included the pontoon jetties.
The valuation is not contested. Rather, what the applicant disputes is the inclusion of the pontoon jetties in determining the GRV of the subject land.
The parties therefore agreed the question requiring determination by the Tribunal is:
Are the pontoon jetties the subject of this application 'improvements' pursuant to s 4 of the Valuation of Land Act 1978?
Both parties agreed that in order for the Tribunal to find that the pontoon jetties are 'improvements' for the purposes of the VG Act, the Tribunal must find that the pontoon jetties are 'works actually effected to land' and that they are not 'machinery'.
The reasons which follow will therefore deal with each issue separately, that is:
Issue 1 Are the pontoon jetties 'works actually effected to land'?; and
Issue 2  Are the pontoon jetties 'machinery'?

Evidence

The following people gave evidence by way of affidavit for the applicant:
a)Mr Barry Jones who has been a director of the applicant since 1996;
b)Mr Hayden Hill, who is the Operations Manager of Shorewater Marine Pty Ltd that distributes one of the modular jetty systems (A & B Jetty) moored in the Harbour; and
c)Mr David Lo Jacono, a Professor of Mechanics at the Department de Mecanique, L'Institute de Mecanique des Fluides de Toulouse, Toulouse, France.

Issue 1 Are the pontoon jetties 'works actually effected to land'?

Respondent's submissions in respect of issue 1

The respondent's submissions in respect of issue 1 may be summarised as follows:
•There is strongly persuasive authority on the precise point of whether pontoon jetties are fixtures by the New Zealand Court of Appeal in Auckland City Council v Ports of AucklandPty Ltd [2000] 3 NZLR 614 (Auckland City Council v Ports of Auckland) which held that pontoon jetties are part and parcel of the land on which they are situated, and are therefore rateable 'land' under the Rating Powers Act 1988 (NZ) (NZ Rating Act).
•The question whether a chattel has become a fixture depends upon whether it has been fixed to land and the degree of annexation, and the object of the annexation: Holland v Hodgson (1872) LR 7 CP 328; [1861-73] All ER Rep 237 (Holland v Hodgson); Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 (Coroneo) at 712; TEC Desert Pty Ltd v Commissioner of State Revenue (2010) 241 CLR 576 (TEC Desert) at [24]; and ElitestoneLtd v Morris [1997] 2 All ER 513 (Elitestone) at 518.
•More specifically, the High Court of Australia in 2010 endorsed the following statements:
a)The general rule is 'quicquid plantatur solo, solo cedit' ('whatever is attached to the soil becomes part of it') as stated in the textbook: Megarry & Wade: The Law of Real Property (9^th ed). This rule was recently endorsed by the High Court of Australia in TEC Desert at [23]; and
b)Whether an item has becomes a fixture depends essentially upon the objective intention with which the item was put in place.
•The two considerations which are commonly regarded as relevant to determining the intention with which an item has been fixed to the land are first, the degree of annexation, and second, the object of annexation: National Australia Bank Ltd v Blacker (2000) 104 FCR 288 at (NAB v Blacker) [10] [12], endorsed in TEC Desert at [24].
•If a chattel is actually fixed to land to any extent, by any means other than its own weight, then prima facie it is not a fixture: Holland v Hodgson.
•The pontoon jetties are 'works' as that term is defined ordinarily as:
Work (n.) …
10. an engineering structure, as a building, bridge, dock, or the like
(Macquarie Online Dictionary)
Work (n.) in plural …
13. b. Building or engineering operations
(Oxford English Dictionary)
•The above broad concept of 'works' is undoubtedly the sense in which the VL Act definition of 'improvements' uses the term, as it is consistent with:
a)the phrase 'any below ground works used in the extraction of minerals or petroleum' within that definition;
b)the definition of 'merged improvements', being 'works in the nature of draining, filling, excavation, grading or levelling of the land, retaining walls or other structures or works for that purpose, the removal of rocks, stone or soil, and the clearing of timber, scrub or other vegetation'; and
c)the phrase 'public work' as is used in various legislation including the Public Works Act 1902 (WA), which defines ' work' to include '(k) wharves, ferries, piers, jetties and bridges'.
•The pontoon jetties are indistinguishable from those considered in Auckland City Council v Ports of Auckland. The New Zealand Court of Appeal's reasoning is that case is the same as that in NationalDairies WA Ltd v Commissioner of State Revenue (WA) (2001) 24 WAR 70 (National Dairies). In National Dairies the appellants submitted that the relevant degree of annexation of various items was slight. The Court held at [54] that '[t]his does not answer the point of interconnection of the various items of plant into an integrated whole'. Similarly, in response to a submission that each item could be easily re-located within the factory or transported between factories with no or immaterial damage to itself or any structure to which it was annexed, the Court held at [55] that:
This provides no answer to the point that the items of plant in question, while annexed to the land, formed part of a whole factory process in respect of which each item of plant was interconnected for the better enjoyment of the land.
•As in National Dairies and Auckland City Council v Ports of Auckland, the pontoon jetties consist of interrelated parts and are a composite structure (comprising the pylons, pontoons, and wires and conduits) with the pontoon jetties forming an interconnected whole that is fixed to the land for the purpose of better enjoyment of the land.
•In the present case, the degree of annexation is not slight. The pylons are piled into the seabed and affixed in place. Pipes, wires and conduits are affixed to both the pontoons and the subject land.
•To the extent the applicant relies on the affidavit of Mr Hill, the affidavit does not address the point, because it addresses the pontoon modules only and does not deal with the jetties as a composite structure.
•Mr Hill (for the applicant) deposes that one would need to dismantle the pontoon jetties by undoing bolts and disconnecting the electrical and plumbing conduits, prior to removing the pontoon modules (and presumably leaving the pylons in place). This dismantling or disassembly of the pontoon jetties would involve 'unfixing' some components of the pontoon jetties from the remainder of those jetties and only thus unfixing them from the subject land.
•In NAB v Blacker, Conti J held at [13] that in determining the purpose or object of annexation, a variety of considerations may be taken into account. His Honour stated that the Court ought as a general rule to have regard to:
•Whether the attachment was for the better enjoyment of the property generally or for the better enjoyment of the land and/or buildings to which it was attached[.]
•The nature of the property the subject of affixation[.]
•Whether the item was to be in position either permanently or temporarily: Coroneo at 71213.
•The function to be served by the annexation of the item: see for example, Attorney-General (Cth) v RT Co Pty Ltd (No 2) (1957) 97 CLR 146 at 156157 where printing presses were secured to a concrete foundation by nuts and bolts in order to keep the printing presses steady when in operation.
•The test of whether a chattel which has been to some extent fixed to land is a fixture is whether it has been fixed with the intention that it shall remain in position permanently or for an indefinite or substantial period: Holland v Hodgson.
•The pontoons have certainly been fixed with the intention of remaining in position for an indefinite or substantial period as the term of the lease is 50 years, with a 50 year option: Coroneo.
•While Mr Jones deposes that the applicant's intention was not for the pontoon jetties to become part of the subject land and revert to the Crown, he does not depose that the applicant's intention was ever for the pontoons to only be in place temporarily.
•The purpose or object of the annexation of the pontoon jetties is not only indefinite or for a substantial period, it is also for the enjoyment of the subject land to which they are attached.
•The pontoon jetties are to be contrasted with the power poles in Anthony v The Commonwealth (1973) 47 ALJR 83 at 89; where the object of the annexation of power poles for a power line that crossed (but did not serve) the subject land was nothing to do with the enjoyment of the land to which the poles were annexed.
•It is well accepted that the question of whether an item is a fixture or a chattel is a question of fact to be determined having regard to all relevant circumstances: Eon Metals NL v Commissioner of Valuation (Appeal No VA95/4/026 Valuation Tribunal) at [606], National Dairies at [38] and Westnet at [129].
•The affidavit of Mr Jones gives evidence that the subjective intention of the applicant was that the modular floating pontoons would not 'become part of the land and revert to the Crown' (para 7). Paragraphs 8, 9 and 10 are to the same effect, and impute a similar intention to the applicant's financiers.
•A pontoon jetty is in a similar position to the air conditioner ducting in Boans Ltd and Valuer General and City of Perth (unreported 1984) (Appeal No 49 of 1980-82) (Boans).
•The relevant intention does not manifest through the question of whether the pontoon jetties become fixtures. The intention was manifest through the terms of the lease and the licence, by which the tenant (the applicant in this case) retains the right to remove the pontoon jetties. They are therefore 'tenant's fixtures'; that is, they are fixtures that do form part of the realty, but the tenant (the applicant) retains a right and indeed an obligation under contract (lease) and under the licence to remove them.
•Relevant law regarding tenant's fixtures is set out in Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89 (Vopak). The High Court endorsed this positon in TEC Desert at [26].

Applicant's submissions in respect of issue 1

The applicant's submissions in respect of issue 1 may be summarised as follows:
•The VL Act does not define the term 'works'. The pontoon jetties are not 'works' as that term is defined in the Oxford English Dictionary as being an 'activity involving construction or repair'.
•Even if the pontoon jetties are 'works' they are not 'works actually effected to' the subject land. The term 'works actually effected to' is also not defined in the VL Act. However, Chaney J in Westnet gave the following guidance at [124]:
Things which are in the nature of fixtures, at common law, are land because they are part of the land to which they are fixed. For example, a concrete culvert being stored following manufacture prior to its transport to an installation in land where it is to be used as a culvert, is not land. Once transported to and installed in situ for use as a culvert on land, it becomes land because it is part of the land on which it is installed (assuming the necessary attributes of a fixture are satisfied)[.]
•For the 'works' to be 'actually effected to land' those works must be permanently fixed to the land so as to become part of the land upon which they are installed, in a similar manner to the culvert in Westnet.
•It is integral to the function of the pontoon jetties that they float so as to enable then to freely move up and down synchronous with the tide and wave surges (which they do), and that accordingly they have not become part of the subject land and therefore are not works actually effected to land.
•'Fixture' is not defined in the VL Act. However, the Oxford English Dictionary (3^rd ed) defines the term as being 'articles attached to a house or land and considered legally part of it[.]'. The MerriamWebster Dictionary defined a fixture as being 'something that is fixed or attached (as to a building) as a permanent appendage or structure part (e.g. a plumbing fixture)' and/or 'an item of moveable property so incorporated into real property that it may be regarded as legally part of it'.
•'Chattel' is not defined in the VL Act. However the Oxford English Dictionary (3^rd ed) defined a 'chattel' as 'an item of property other than freehold land, including tangible goods (chattels personal) and leasehold interests (chattels real)'. The Merriam-Webster Dictionary defines a 'chattel' as being 'an item of tangible movable or immovable property except real estate and things (such as buildings) connected with real property'.
•If the pontoon jetties are not fixtures they must be chattels. Chattels are not improvements (per the ValuerGeneral's Office Policy 3.203). Chattels are not fixtures (per the Valuer General's Office Policy 3.106).
•If the pontoon jetties are chattels then they cannot be 'works actually effected to land'.
•In Webb v Frank Bevis Ltd [1940] 1 All ER 247 (Webb v Frank Bevis) it was held that part of an item was a fixture and the other part was a chattel. Applying that case, if the steel pylons fall within the definition of fixtures (although they can be removed without causing damage to them or to the pontoon jetties), because the degree of annexation of the pontoon jetties to the pylons is very slight the pontoon jetties are not fixtures.
•The New Zealand Court of Appeal in Auckland City Council v Ports of Auckland did not find that the floating pontoon jetties are fixtures. The Court was asked to determine two questions including whether the floating facilities were rateable land or interest in land in terms of the NZ Rating Act. The Court found the floating jetties were 'land' in terms of the definition of that Act.
•Unlike the VL Act, the NZ Rating Act defines 'land' as including all chattels brought onto land, whether or not those chattels subsequently became 'fixtures'. It is important to distinguish items brought onto land which have retained their character as 'chattels' from those which, by virtue of the extent of their annexation to the land, have become 'actually effected to' that land.
•It is appropriate to apply Elitestone to establish whether a chattel has become part of realty.
•If, as suggested by the authors of Megarry & Wade: TheLaw of Real Property (9^th ed),[1] objects which are permanently attached to a building or to land become part of the land, it follows that objects which are not permanently attached to a building or to land do not become part of that land.
[1] E Cooke, S Bridge, and M Dixon.
•Whilst it is not clear from the judgment in NationalDairies what evidence the appellant presented in support of its submission that the items of plant and equipment in question could be 'severed and easily removed', the use of the word 'equivocal' in the judgment suggests that the Court was unconvinced by the appellant's submission. The opposite is the case here as the evidence provided by Mr Hill in his affidavit is unequivocal in regard to the ease with which the pontoon jetties can be removed from the Harbour.
•The pontoon jetties are moored in waters which cover Crown land over which the applicant holds a lease. Thismakes their circumstances much more akin to those described in Eon Metals rather than NationalDairies, where substantial items of plant and equipment had been installed/erected upon the land which was occupied under the terms of several miningleases.
•The degree to which the pontoon jetties are 'annexed' to the piles is far less substantial than was the degree of annexation of the ball mill and power plant in Eon Metals.
•The pontoon jetties are by means of pile guides (metal collars with rubber rollers inset) tethered to steel pylons which are embedded in the subject land and it is only the tethering, akin to tethering a boat to a mooring, which prevents the pontoon jetties from drifting away.
•Mr Hill's affidavit addresses each of the eight factors that the applicant has 'distilled' from Ipp J's judgment in Eon Metals, most of which were reiterated by Conti J in NAB v Blacker and by Master Sanderson at [37] in Flown Pty Ltd v Goldrange Pty Ltd [2016]WASC419 (Flown v Goldrange).
•The pontoons are interchangeable with each other and that in the event one is damaged it can be easily removed and replaced with another while the damaged pontoon is being repaired.
•The pontoon jetties, which unlike a traditional jetty, are composed of a series of interchangeable modules which are assembled effectively in the same 'kitset' form of construction as occurred in Neylon v Dickens [1979] 2 NZLR 714.
•The applicant was a partner in the partnership which leased the subject land in 20092010 during which the two western most pontoon jetties were assembled in the Harbour and then moored in place. Mr Jones, a director of the applicant attests to the partnership's intention that pontoon jetties would not become part of the subject land and revert to the Crown upon expiry of the lease or licence. Neither the lease nor the licence places any restriction on the ability of the applicant to remove the pontoon jetties from the Harbour, either upon expiration or termination of the lease or the licence, or indeed at any time.
•The applicant has no freehold interest in the subject land and has no interest in increasing the value of the subject land.
•The lease distinguishes 'permanent structures belonging to the lessee' referred to in clause 1(u) from 'lessee improvements' which are defined in clause 2(6) as being 'any structures authorised by a Jetty licensee' and 'any apparatus authorised by or required for the purposes of a mooring licence' and clause 2.2 of the licence which provides that 'all times be and remain the property of the licensee'. The distinction between 'permanent structures belonging to the lessee' and 'lessee's improvements' show that the pontoon jetties were never intended to become part of the subject land.
•The intention of the parties to the lease is that the pontoon jetties would never become part or the subject land and would not revert to either the lessor or licensor upon either the expiration or the termination of the lease or the licence. This is further supported by the Schedule to the lease which expressly excludes 'all waters and all air space above the surface' of the subject land from being part of the leased premises. No portion of the pontoon jetties is either within or upon the leased premises (the subject land).

Tribunal's consideration of issue 1

The term 'works actually effected to land' in the definition of 'improvements' in s 4 of the VL Act expressly includes fixtures. However, apart from s 4, the term 'works actually effected to land' is not used elsewhere in the VL Act.
The applicant submitted that the New Zealand Court of Appeal in Auckland City Council v Ports of Auckland did not find that the floating pontoon was a fixture. Rather, the applicant submitted that the issue before the Court was whether a chattel had become part of realty applying Elitestone.
The traditional test for whether a chattel has become part of the realty of the land it is situated on is expressed as being whether it is a 'fixture'. However, the judgment of Lord Lloyd of Berwick in Elitestone at 518 noted that the legal meaning of 'fixture' often did not bear resemblance to its ordinary meaning and that this had the potential to lead to confusion. Lord Lloyd of Berwick proposed a broader formulation, that of whether the chattel could properly be said to have become part and parcel of the land with the two main indicators of this being:
a)the degree of annexation; and
b)the object or purpose of annexation.
Lord Lloyd of Berwick concluded by stating that each case will depend on its particular facts and that a commonsense approach, consistent with the broad test, must be taken in considering the indicators. This broader formulation follows the test as expressed by Blackburn J in earlier case of Holland v Hodgson.
The House of Lords in Elitestone held that where a house was constructed in such a way that it could not be removed, save by destruction, it could not have been intended to remain a chattel and must have been intended to form part of the realty; but where it was constructed in such a way as to be removable, whether as a unit or in sections, it might remain a chattel, even though it was connected temporarily to mains services such as water and electricity.
Because of the decision in Elitestone and the definition of 'land' as it appears in the NZ Rating Act, that is, 'all land, tenements, and hereditaments, whether corporeal or incorporeal, and all chattels or other interest therein, and all trees growing or standing thereon', the applicant submitted that it is important to distinguish items brought onto the land which have retained their character as chattels from those which, by virtue of the extent of their annexation to the subject land, have become 'works actually effected to' the land. By this statement, the Tribunal understands the applicant to be saying that the pontoon jetties are, and remain chattels and in any event are not fixtures. The Tribunal does not agree with the applicant for the reasons which follow.

Are the pontoon jetties 'works'?

The noun 'works' in s 4 of the VL Act is not defined. Therefore, it is to be interpreted in accordance with its ordinary and current meaning unless the legislation indicates an intention to depart from the accepted meaning of the word: Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297 at [310]. There is nothing in the VL Act to indicate an intention to depart from the ordinary and current meaning of the noun 'works'.
The respondent provided the following definitions of 'works':
Work (n.) …
10. an engineering structure, as a building, bridge, dock, or the like
(Macquarie Dictionary Online 7th ed)
Work (n.) in plural …
13. b. Building or engineering operations
(Oxford English Dictionary 3rd ed)
The applicant however referred to 'works' as an 'activity involving construction or repair' being the verb which describes the action, rather than the noun.
The Tribunal prefers the ordinary and current meaning of the noun 'work' submitted by the respondent as that definition fits within the context of s 4 of the VL Act which provides for '… the value of all works actually effect to the land'.
The Tribunal is therefore of the view that the pontoon jetties are 'works' that are an engineering structure or an engineering operation. However, that does not mean the pontoon jetties are automatically 'improvements' in relation to the subject land. Nor does it mean that the 'works' are machinery as explained later.

Are the pontoon jetties fixed to land and if so, what is the degree of annexation?

The parties agree that the pontoon jetties are secured to vertical pylons that are piled into and affixed to the seabed. Further, the parties agree that the pontoons or modules are secured to the pylons by means of metal collars known as 'pile guides', the rubber rollers of which permit vertical movement but prevent lateral movement of the pontoon jetties.
In Auckland City Council v Ports of Auckland, one of the issues before the New Zealand Court of Appeal was whether certain floating pontoons were rateable land or interests in land in terms of the NZ Rating Act. The Court found that the floating pontoons attached to the piles of the jetties became part of the composite jetty structure, notwithstanding that they moved vertically with the tide and were therefore 'land'. McGrath J explained this at [75] as follows:
Prior to their attachment by rings to the locating piles that are driven into the seabed, when brought to Westhaven the pontoon facilities, or their components, are plainly chattels. Once a pontoon is attached to the piles, however, in our opinion, it becomes an integral part of a composite jetty structure. That is because the pontoon are kept permanently in place by the rings, are unable to move horizontally and accordingly cannot become separate from the locating piles. That they move vertically with the tide reflects their purpose in the design of the whole jetty. In its composite form the jetty is a substantial structure and an enduring asset[.]
Based on the agreed facts, the Tribunal agrees with the respondent's submission that the pontoon jetties under consideration in the present case are a composite jetty structure and are indistinguishable from the jetty structure in Auckland City Council v Ports of Auckland.
In the case of National Dairies which concerned the purchase of a dairy business, including its land, factory premises, plant and equipment, the question before the Court was whether the plant and equipment, such as boilers, butter printers, a refrigeration compressor and a gram wrap machine, installed at the factory were 'goods' or 'fixtures'.
It was argued by the appellant in that case that the plant and equipment were not fixtures for a variety of reasons including that there was no physical annexation to the land or, alternatively, the degree of annexation was slight and that each item could be easily relocated within the factory or transported between factories with no or immaterial damage to itself or any structure to which it was annexed.
Malcom CJ found that the various items of interconnected plant and equipment were fixtures which had been annexed to the land for the better enjoyment of the land for milk processing purposes. Further, Malcom CJ held that even the items of plant and equipment which were not annexed to the land (other than by being connected to items of plant and equipment) were fixtures. This was because their interrelationship was in the context of the better enjoyment of the land.
In National Dairies, Malcom CJ stated at [54]:
… Secondly, it was said that at all material times each item of plant and equipment could easily be severed, if necessary, and removed from the factory with no or immaterial damage to itself or any structure to which it was annexed. In my opinion, this evidence is equivocal, having regard to the evidence that items of plant were installed for an indefinite period.
In contrast, in the present case, the applicant asserted that the evidence of Mr Hill is unequivocal in that the pontoon jetties, even if annexed to the subject land, can be removed easily and therefore cannot be a fixture.
Further, the applicant submitted that this case is more akin to that of Eon Metals where items of plant and equipment had been installed/erected upon Crown land which was occupied under the terms of several mining leases. In that case, Ipp J held that the items making up the power plant should be regarded as chattels. This is because His Honour concluded at [25]:
Taking into account the limited life of the mine, the transportable character of the equipment concerned, the common practice to transfer equipment of that kind, the economic incentive to remove it, the relatively slight degree of attachment to the ground, and the facility with which detachment could occur, I consider that the items making up the power plant should be regarded as chattels. By the 'power plant' I mean the equipment inside the shed. I do not intend to include any underground cabling or the shed itself, or anything outside the shed.
While there may be an economic incentive to remove the pontoon jetties, the Tribunal is of the view that this case is distinguishable from Eon Metals. This is because Eon Metals concerned plant and equipment which was used in mining activities where the mine had a limited life whereas in this case, there is no evidence that the Harbour has a limited or finite life. Rather, the lease is for a term of 50 years with a 50 year option. The Tribunal does not accept the applicant's submission that the degree of annexation of the pontoon jetties is far less substantial than the degree of the annexation of the ball mill and power plant in Eon Metals. This is because the parties agreed that the pylons are piled into the seabed and affixed into place and that pipes, wires and conduits are affixed both to the pontoons and to the adjacent land.
The Tribunal noted that although Mr Hill stated that:
a)to detach the modules and remove them from the pylons, the pile guides would need to be unbolted, the electrical and plumbing conduits disconnected and then towed to a suitable point in the Harbour from where they could be conveniently lifted out of the water onto a flat-bed truck; and
b)provided due care was taken, it was unlikely that removing the modules from the harbour would damage them,
he only dealt with the removal of the modules. Mr Hill did not deal with the removal of the pontoon jetties as a composite structure (that is, the pontoon modules, the conduits and the pylons).
The Tribunal therefore finds that as in the case of Auckland City Council v Ports of Auckland and National Dairies, the pontoon jetties are a composite structure (comprised of the pontoon modules, the pylons and the pipes, wires and conduits), with the jetties forming an interconnected whole that is fixed to the subject land. Even though the applicant argued that the degree of annexation was 'slight', the Tribunal is not satisfied that the degree of annexation of the pontoon jetties is any less substantial than the degree of annexation of the ball mill and power station in Eon Metals.

The purpose or object of the annexation

In NAB v Blacker Conti J identified at [13] a number of factors that the Courts will generally take into account in determining the purpose or object of annexation. They were restated by Master Sanderson in Flownv Goldrange) at [37] as follows:
…
1.whether the attachment was for the better enjoyment of the property generally or for the better enjoyment of the land and/or buildings to which it was attached;
2.the nature of the property the subject of affixation;
3.whether the item was to be in position either permanently or temporarily;
4.the function to be served by the annexation of the item[.]
(citations omitted)

In this case the term of the lease being 50 years with a 50 year option supports the conclusion that the pontoon jetties have been fixed with the intention of remaining in position for a substantial, if not for an indefinite period.
Further, while Mr Jones stated in his evidence that it was not the applicant's intention that the pontoon jetties would become part of the subject land and revert to the Crown upon expiry of the lease and/or licence, nothing in Mr Jones' evidence suggests that the applicant's intention was for the pontoon jetties to only be in place temporarily or for only a short period. This is in contrast to Eon Metals, where it was stated that it is common practice to move mining plant and equipment from the land.
The Tribunal is also satisfied that the purpose of the annexation of the pontoon jetties in this matter is also for the enjoyment of the land to which they are attached. This follows Auckland City Council v Ports of Auckland where it was stated at [75]:
… As to the object of annexation, again the chattel has been incorporated into the whole jetty structure, to give effect to and allow full enjoyment of the rights of occupation of waterspace at Westhaven which the respondent port company enjoys.
The Tribunal finds that the purpose or object of the annexation of the pontoon jetties to the pylons piled into and affixed to the seabed is for the better enjoyment of the land and that the affixation was not intended to be temporary or for a short period of time but rather for an indefinite or substantial period of time being at least the remainder of the lease term of 50 years.

Other factors as to whether the pontoon jetties are fixtures

The applicant relies on Flown v Goldrange to support its position that the pontoon jetties are not a fixture. That case concerned the ownership of certain plant and equipment in leased premises and whether the plant and equipment were fixtures. Master Sanderson held at [38]:
… [T]he more substantial items such as preparation benches and meat display cabinets are easily removed and do not fit within the general characteristics of chattels which have become part of the property. … [T]here is no basis in my view for suggesting … they are fixtures.
The Tribunal does not accept that the pontoon jetties being the jetty structure and its components, can be 'easily removed' because, as already stated, the evidence of Mr Hill only dealt with the removal of the modules (and not the pontoon jetties being the composite structure comprised of the pontoon modules and the pylons etc as previously explained).
The Tribunal does accept that the pontoon modules prior to their attachment by metal collars (or pile guides) to the steel pylons that are driven into the seabed are chattels. However, once the modules are attached to the steel pylons, the modules become an integral part of a composite jetty structure. This is because, like in Auckland City Council v Ports of Auckland, the modules are kept permanently in place by the metal collars (pile guides) are unable to move laterally and therefore cannot become separate from the steel pylons. The pontoon jetties in their composite form are a substantial structure and an enduring asset.
The applicant relied on Webb v Frank Bevis to support its position that the pontoons are removable in sections and therefore should not be regarded as fixtures. That case concerned a business who had authority to use the land for three years for the purpose of manufacturing breeze and cement products and permitting during the three years the removal of the 'temporary storage shed' subject to the site being restored.
The Court in Webb v Frank Bevis decided that apart from the floor the shed was 'to a very large extent' a temporary building and removable. The Court referred to the very uncertainty of the business tenure of the site and concluded that the shed, apart from the floor was a 'tenant's trade fixture' and removable by the tenant.
The Tribunal notes that Webb v Frank Bevis involved an uncertain tenure (3 years) whereas in this case the lease is for 50 years with a 50 year option. Further, in that case, the Court held the shed to be a 'tenant's trade fixture' rather than a chattel.
In Vopak at [66], Lindgren J explained the expression 'tenant's fixtures' as follows:
The expression 'tenants' fixtures' is apt to mislead unless adequately explained. The tenant does not own the freehold and a fixture does not belong to the tenant by virtue of being part of the freehold. Rather, fixtures are the property of the owner of the land, but in the case of 'tenants' fixtures' they are subject to the tenant's right to remove them during the term of the lease or within a reasonable time thereafter and so convert them back into chattels.
Recently, the High Court endorsed this positon in TEC Desert at [26]. In the Tribunal's view, this means that subject to considering the terms of the lease and licence, which are discussed below, the pontoon jetties are 'tenant's fixtures'.
Turning first to the lease, the Tribunal notes that clause 1, subclause 2(h) of the lease provides:
The Lessee hereby covenants and agrees with the Minister for Transport as follows:-
…
(2)The Lessee shall
…
(h)not without the previous consent in writing of the Minister first had and obtained reclaim any part of the water area over the leased premises or build on affix to or install on or permit or suffer to be built on affixed to or installed on the leased premises any building structure erection fixture plant equipment or improvement whatsoever (either above or below the surface of the leases premises) or otherwise make or effect any alteration or addition to the leased premises) or otherwise make or effect any alteration or addition to the leased premises except pursuant to or as authorised by a Jetty Licence or a Mooring Licence[.]
Further, clause 2, subclause 6 of the lease provides:
(a)The Lessee shall be at liberty to construct on or in the leased premises any structures authorised by a Jetty Licence and to place on the leased premises any apparatus authorised by or required for the purposes of a Mooring Licence. All such structures and apparatus shall be Lessee's improvements for the purpose of this Lease.
…
(d)On the termination of any Jetty Licence or Mooring Licence or combined Jetty and Mooring Licence the Lessee's improvements shall be dealt with in accordance with the provisions of any such licence.
The lease expressly states that any jetty shall be a 'lessee's improvement'.
While the term 'lessee's improvements' is not defined, the Tribunal accepts the respondent's submission that it has the same meaning as a 'tenant's fixture'. That is, it indicates that for the purposes of the lease, the pontoon jetties are to be tenant's fixtures. They become part of the subject land, save the applicant (lessee) has the right to detach them and make them chattels again, pursuant to clause 2.6(a) of the lease. The obligation at clause 1.1(u) of the lease is to 'yield up' the 'leased premises including all the existing permanent structures belonging to the lessee'. While somewhat ambiguously using the term 'belonging' to the lessee, the obligation to yield up 'permanent structures' indicates that clause 1.1(u) is not referring to tenant's fixtures', but to fixtures proper. In any event, clause 1.1(u) is subject to clause 2.6.
The licence, as opposed to the lease, specifies that 'Subject to clause 8, all Jetties and Mooring Apparatus shall at all times be and remain the property of the licensee'. Clause 8 provides the obligation for the licensee (the applicant in this case) to remove and make good all jetties and mooring apparatus at the termination of the licence. However, the licence terminates as soon as the licensee (the applicant) no longer enjoys the benefit of the lease (clause 7 of the licence). At that point, pursuant to the lease, the pontoon jetties will be available to be dealt with by the licensee (the applicant). In the event the licence was to terminate first, the lease (clause 2.6(c)) permits the lessee's (the applicant) improvements to be dealt with pursuant to the licence.
Finally, while the applicant asserted (per Mr Jones' evidence) that the applicant never intended for the pontoon jetties to become part of the subject land and revert to the Crown upon expiration of the lease and/or licence and that the applicant would never have paid $7,020,000 to purchase from its partners their 90% share in 2014 if the applicant was not able to remove the pontoon jetties or deal with them as they saw fit, it is the objective (and not subjective) intention that is of paramount significance. This was stated by Ipp J in Eon Metals at [606] as follows:
As regards intention, while subjective intention may be relevant, it is objective intention that is of paramount significance. As Mahoney JA pointed out in N H Dunn Pty Ltd v L M Ericsson Pty Ltd (at 9244-9245) the ultimate fact to be proved is the objective intention that ought to be imputed or presumed from the circumstances of the case.
In this case, the Tribunal finds that the pontoon jetties were (subjectively) brought to the subject land for the (objective) purpose of better enjoyment of the subject land for a substantial period per the term of the lease (50 years from 1989 plus an option of a further 50 years).
In conclusion, the Tribunal accepts the respondent's submission that the lease and licence are not definite as to the parties' intention as to whether the pontoon jetties are to be considered fixtures. Further, the Tribunal finds that:
a)the applicant's subjective intention, to the extent it is revealed by Mr Jones' evidence is met by the terms of the lease and licence because the applicant will not be required to cede the pontoon jetties at the termination of the lease or at any other time;
b)the lease and licence provide for timeframes of over 50 years. This does not militate in favour of the pontoon jetties being considered 'temporary' in any way; and
c)the law as it currently stands is that a 'tenant's fixture' does become part of the land until it is severed: Vopak.

Conclusion re issue 1 Are the pontoon jetties 'works actually effected to land'?

For the reasons set out above, the Tribunal concludes that the pontoon jetties are 'works actually effected to land' and therefore are improvements to the subject land unless the Tribunal finds them to be 'machinery'.
It is not necessary to consider the other exclusion in the definition of the term 'improvements' in s 4 of the VL Act as it is clear the pontoon jetties are not below ground works used in the extraction of minerals or petroleum.
The Tribunal therefore turns to consider issue 2 below as to whether the pontoon jetties are 'machinery' for the purpose of s 4 of the VL Act.

Issue 2 Are the pontoon jetties 'machinery'?

Respondent's submissions in respect of issue 2

The respondent's submissions in respect of issue 2 may be summarised as follows:
•The applicable definition of 'machinery' is that set out in Griffin Windfarm at [62].
•The pontoon jetties consist of interrelated parts (indeed they are a composite structure).
•The pontoon jetties in performing their functions as jetties do not apply, use or generate motion or force. While they may move, and have force applied to them by the rise and fall of the sea, in performing their function as jetties the pontoon jetties do not:
a)apply motion or force to anything;
b)use motion or force to achieve anything; or
c)generate motion or force.
•Even if the pontoon jetties could be said to 'apply' or 'use' any motion or force, they do not 'perform' any kind of 'work'.
•The pontoon jetties are analogous to the 'receptacles' described and held not to be machinery in Griffin Windfarm.
•The pontoon jetties fall with the definition of 'jetty' per s 3 of the Jetties Act 1926 (WA) (Jetties Act). That definition includes any jetty, pier etc. whether fixed or floating. Jetties generally are structures, not machinery and there is no feature of the pontoon jetties that takes them out of this usual situation.
•Mr Jacono has not referred to, or purported to opine on, the definition of 'machinery' as set out in GriffinWindfarm. Mr Jacono specifically states at para 3 of his affidavit that he gives evidence as to the term 'machine' (not 'machinery', 'as that term is defined in science' and not under the VL Act or as per the definition of 'machinery' in Griffin Windfarm.
•Mr Jacono concluded (at para 7) that the pontoons 'change both the direction and form of forces and, accordingly, constitute a simple machine'. That may be the case if one considers the definition of a 'simple machine' applied in physics, but it is not the relevant test for present purposes.
•The pontoon jetties are similar to the air conditioning ducts in Boans as the air conditioning ducts were found not to be machinery as they were only used to distribute already conditioned air to all parts of the retail floors.

Applicant's submissions in respect of issue 2

The applicant's submissions in respect of issue 2 may be summarised as follows:
•Neither 'machine' nor 'machinery' is defined in the VL Act. In Griffin Windfarm, Sharp J accepted that the term 'machinery' is to be understood by its ordinary and popular meaning.
•The pontoon jetties are a 'complex device' as that term was defined in Griffin Windfarm.
•The pontoon jetties use the motion and force of the tide to perform the work of keeping the surface of the jetty at a constant distance from the surface of the Harbour waters beneath it.
•There is nothing in the definition of 'jetty' per s 3 of the Jetties Act which prevents the pontoon jetties being both a 'structure' and 'machinery'.
•There is no practical distinction between 'machinery' and 'machine' and that, consequently there is no conflict between Mr Jacono's opinion that the pontoon jetties function as a 'simple machine' and the definition of 'machinery' endorsed in Griffin Windfarm.
•Mr Jacono's opinion that the pontoon jetties meet the definition of a machine, 'as that term is defined in science', is entirely consistent with the definitions of machinery found in the Macquarie Dictionary Online and the Oxford English Dictionary. The Macquarie Dictionary Online (7^th ed) defines the term 'machinery' to mean 'machines or mechanical apparatus' whereas the Oxford English Dictionary (3^rd ed) defines the term 'machinery' to mean 'machines, or the constituent parts of a machine regarded collectively' and 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'.
•Mr Jacono opined that the pontoon jetties 'constitute a simple machine' and that, accordingly, it is an obvious corollary of his opinion that the pontoon jetties perform 'work'.
•'Work' is done when a force (that is, tide and/or waves) is applied to an object (that is the pontoon jetties) and moves that object for a particular purpose (that is, keeping the surface of the pontoon jetties at a constant distance from the surface of the Harbour waters beneath them).
•For a floating object to be a machine, that floating object would have to possess the same characteristics as those possessed by the pontoon jetties which make them a machine in order for the floating object to also constitute a machine.
•The pontoon jetties are not receptacles (or 'holding receptacles') as described in Griffin Windfarm.
•The respondent's comparison of the 'air-conditioning ducts which were affixed to the ceiling of the Boans building and had no moving parts)' to the pontoon jetties (which rise and fall with the tide and do have moving parts) is flawed: Boans.
•The respondent's suggestion that the popular and ordinary meaning of the term 'machinery' is that machinery must incorporate either mechanical plant or an engine is merely the respondent's unsupported interpretation of the words popular and ordinary meaning and that, in any case, it is Mr Jacono's opinion that the pontoon jetties do constitute a form of mechanical plant.
•The pontoon jetties are chattels (as opposed to fixtures) and are also machinery.

Tribunal's consideration of issue 2

As stated earlier, the term 'machinery' is not defined in s 4 or anywhere else in the VL Act.
However, as also stated earlier, Judge Sharp ruled in GriffinWindfarm at [62] that an appropriate definition for the term 'machinery' as it appears in s 4 of the VL Act 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.
That case concerned land upon which was located a power station where the main issue in dispute was the definition of 'machinery' for the purposes of s 4 of the VL Act. In that case, the parties accepted that ore crushers, ball mills, pumps, generators, thickner tanks and conveyors were 'machinery'.
The Tribunal will apply the definition of 'machinery' as set out in Griffin Windfarm to determine whether the pontoon jetties are machinery for the purposes of the definition of 'improvements' in s 4 of the VL Act.
Mr Jacono was asked by the applicant to opine, as an expert in the mechanics of machines, as to whether the pontoon jetties constitute a '"machine'… as that term is defined in science'. Mr Jacono opined that the pontoon jetties meet the scientific definition of machine because:
(a) each pontoon has several articulated, moving and sliding parts; the pontoon's local vertical positon oscillates in real time because each pontoon constantly rises and falls upon the steel piles; and
(b)the hydrodynamic forces at play on each pontoon are modified in a nonlinear manner; the modification being in terms of intensity and direction and the pontoon jetties absorb energy from both the tides and current which bear upon it which thereby reduces the adverse impact of these two natural elements upon the coastal landscape.
Mr Jacono concluded that the 'modular pontoons, working in conjunction with at the steel piles, change both the direction and form of forces' constitute a 'simple machine'.
Mr Jacono's evidence was not given in the context of, or with reference to the VL Act but rather from a scientific perspective. It would have been more useful if Mr Jacono had been given the definition of the terms 'land' and 'improvement' as they appear in s 4 of the VL Act as well as the definition of 'machinery' as set out at [62] in Griffin Windfarm and asked to opine on whether the pontoon jetties fell within that definition.
The Tribunal accepts that the term 'simple machine' (which was used by Mr Jacono) is commonly used by scientists to refer to one of six different types of simple devices, such as levers, wheel and axle, inclined planes, screws, wedges and pulleys.
A pulley is a simple machine that is used to change the direction of a force and several pulleys used together reduce the force needed to lift an object. A lever is also a simple machine which is used to increase or decrease the applied force. When two or more simple machines are combined or interrelated (e.g. a lever with a pulley) they form what is known in science as a 'compound machine'. An example of a compound machine is a crane as it has levers and pulleys. However, it does not follow in the Tribunal's view, that an interrelated or compound machine is necessarily the same thing as 'machinery' as defined in Griffin Windfarm. This is because the interrelated parts together must apply, use or generate motion or force to perform a certain kind of work.

Both parties agree that the pontoon jetties move. However, they disagree as to whether the pontoon jetties:
a)apply motion or force to anything;
b)use motion or force to achieve anything; or
c)generate motion or force and whether they perform any kind of work.
Mr Jacono stated that the pontoon jetties are subjected to external forces in the following ways:
a)by a vertical force (Archimedean force) which is a function of each pontoon's mass and the weight of the water which presses upon it from time to time; and
b)prevailing ocean tides and other external forces (e.g. wind and waves) contribute to this force.
Further, in Mr Jacono's opinion, the pontoon jetties working in conjunction with the steel piles change both the direction and form of forces and accordingly constitute a simple machine. The applicant reiterated this view by submitting that the work is done when the force of the tide or a wave surge is applied to the pontoon jetties thereby causing them to move either up or down.
The applicant asserted that the pontoon jetties must use/apply force/motion to keep the surface of the pontoon jetties at a constant distance from the surface of the Harbour. The Tribunal does not accept this assertion because Mr Jacono's opinion is that the pontoon jetties have the force of the tide or a wave surge applied to the pontoon jetties causing them to move up or down (and not the other way around). Because of this, the Tribunal finds that the pontoon jetties do not themselves use or generate motion and force.
Even if it could be concluded that the pontoon jetties apply/use/generate motion and force, it must also be established that the application/use/generation of motion or force is used to 'perform a certain kind of work' (per the definition of 'machinery' in Griffin Windfarm).
Taking the example of a ball mill. Ipp J in Eon Metals defined a ball mill as a rotating cylindrical device into which steel balls are added together with ore and water in order to grind ore to a very fine size. It is driven by a motor attached to it. The work done is the grinding of the ore which occurs by the motion or force of the steel balls as the device rotates.
The applicant contended that the definition of 'work' is that used in science as follows:
using a force to move an object a distance (when both the force and the motion of the object are in the same direction) and that the work is done when a force is applied to an object for a particular purpose.
Even if the Tribunal accepts the definition of 'work' submitted by the applicant, there is no evidence to support the applicant's view that the pontoon jetties use/apply/generate force or motion of the tide to perform the 'work' of keeping the surface of the jetty at a constant distance from the surface of the Harbour waters beneath them. Rather, as already explained, it is the wave surge and/or tide fluctuations that perform the work on the pontoon jetties (and not the other way).
The respondent referred to the term 'jetty' as defined in s 3 of the Jetties Act as follows:
jetty includes
(a)any jetty, pier, wharf, quay, grid, slip, landing place, stage, platform (other than a platform that is a vessel for the purposes of the Western Australian Marine Act1982) or similar structure, whether fixed or floating, erected or placed, wholly or in part, in, on or over any waters; and
(b)any ramp which is or which may be used for the purpose of launching or landing a vessel[.]
to support its position that jetties are generally 'structures' and not machinery. The applicant rejected the respondent's view stating that the definition of 'jetty' did not exclude the pontoon jetties from being machinery.
While the applicant is correct in saying that there is nothing in the definition of 'jetty' in the Jetties Act to expressly preclude a jetty from being machinery, it must be recognised that the Jetties Act is limited in its purpose and scope. The long title of that Act provides that it is:
[a]n Act to provide for the construction, maintenance, and preservation of jetties and other works, and to make better provision for securing and regulating the use and management thereof.
The Tribunal finds that the pontoon jetties, as agreed by the parties, are structures which float on or over water. Further, the Tribunal accepts the respondent's submission that jetties are generally structures and not machinery as the term jetty is defined in the Jetties Act.
In Griffin Windfarm, after considering the decision in Carbery Milk Products v Commissioner of Valuation Appeal (No VA95/4/026 Valuation Tribunal) (delivered 14 March 1997) (Carbery) where the Valuation Tribunal concluded that receptacles, which may include tanks or ponds, may be part of a 'machine' if the receptacle is 'in itself a proximate part of the manufacturing process', Sharp J held at [74] that the test is not whether or not the items set out in the Schedule are part of the process of producing electricity but rather whether or not they apply, use or generate motion and force to perform their function. For reasons already explained earlier, the Tribunal concludes that the pontoon jetties do not apply, use or generate motion and force. Rather it is the wave surge and/or tide fluctuations that perform the work on the pontoon jetties to make them move vertically. On this basis, the pontoon jetties may be described as a receptacle as that term was used in Carbery.
Finally, turning to Boans. That case concerned whether the air conditioner ducts were machinery (the mechanical units themselves had been conceded as machinery). There, the Land Valuation Tribunal of Western Australia decided that the ducts were not machinery within the meaning of s 4 of the VL Act as they were only used to distribute already conditioned air to all parts of the retail floors. The respondent submitted that the pontoon jetties is in a similar position to the air conditioning ducts. The applicant disagreed submitting that the air conditioning ducts have no moving parts and so are different to pontoon jetties which move with the rise and fall of the tide. The Tribunal accepts the analogy of the pontoon jetties or a jetty to the air conditioning ducts in so far as neither are machinery as that term is defined in Griffin Windfarm.

Conclusions re issue 2 Are the pontoon jetties 'machinery'?

The pontoon jetties in scientific terms may be a 'simple machine'. However, they are not 'machinery' as that term is defined in GriffinWindfarm. The pontoon jetties do not apply motion or force to anything, use motion or force to achieve anything and do not generate motion or force. Finally, the pontoon jetties do not perform any kind of work. Rather the pontoon jetties move and have force applied to them by wave surges and/or tide fluctuations.

Summary of the Tribunal's conclusions

As explained by Mr Jacono, the principal purpose of the pontoon jetties is simply to provide easy means of access (either to board or disembark from) to a boat, regardless of the changing water levels in the Harbour due to tide fluctuation and/or water surge.
The crux of the dispute between the parties is whether the pontoon jetties are 'improvements' in relation to the subject land.
In the Tribunal's view, once the pontoon modules are secured to the pylons they become an integral part of a composite structure. This is because the modules are kept permanently in place by metal collars (pile guides) and are unable to move laterally and accordingly cannot become separate from the piles. The fact that they move vertically with the rise and fall of the tide or wave surges reflects their purpose in the design of the composite jetty structure. The degree of annexation of the composite jetty structure is reflected in the pylons being embedded in the seabed and their use is dependent on maintaining that degree of annexation. Further, the object of the annexation is to allow full enjoyment of the subject land. Therefore, it follows in the Tribunal's view, that the pontoon jetties are 'works actually effected to land' in the sense that they are a composite structure that are actually affixed to the land as was found in Auckland City Council v Ports of Auckland and in National Dairies.
The pontoon jetties are not 'machinery' applying the definition of that term per Griffin Windfarm. Finally, the pontoon jetties are a 'tenant's fixture' following TEC Desert and Vopak and supported by the terms of the lease and licence meaning that the pontoon jetties are part of the subject land until they are severed. The result of all of this is that, in the Tribunal's view, the pontoon jetties are 'improvements' for the purposes of s 4 of the VL Act.
As a result, the Tribunal answers the question, are the pontoon jetties the subject of this application 'improvements' pursuant to s 4 of the VL Act, in the affirmative.
The application for review will therefore be dismissed.

Orders

The Tribunal makes the following orders:
1.As the Tribunal determined that the pontoon jetties are 'improvements' pursuant to s 4 of the Valuation of Land Act 1978 (WA), the decision of the respondent dated 7 June 2018, to include the pontoon jetties as improvements in the respondent's valuation of Lot 3000 on Plan 44439 and Lot 11187 on Plan 16754 being a portion of Reserve 49997 at Mindarie Keys Marina on the date of valuation of 1 August 2015, is therefore affirmed.
2.The application for review is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS R PETRUCCI, MEMBER
15 AUGUST 2019

SANCTUS NOMINEES PTY LTD and VALUER­GENERAL

[2019] WASAT 63

15 AUGUST 2019