South East Queensland Water Corporation Limited v Esk Shire Council
[2002] QLC 68
•27 August 2002
LAND COURT OF QUEENSLAND
CITATION: South East Queensland Water Corporation Limited v.
Esk Shire Council [2002] QLC 68
PARTIES: South East Queensland Water Corporation Limited
(applicant)
v
Esk Shire Council
(respondent)
FILE NOS: VC2001/0687 and VC2001/0688
DIVISION: Land Court of Queensland
PROCEEDING: Appeals against categorisations of rateable land – Local Government Act 1993
DELIVERED ON: 27 August 2002
DELIVERED AT: Brisbane
HEARD AT: Brisbane
MEMBER: Mr RE Wenck
ORDERS: 1. The appeals against the decisions on objections to the categorisation of land are disallowed.
2.Pursuant to s.34(1) and (5) of the Land Court Act 2000 it is ordered that the appellant pay the respondent's costs for the proceeding, and those costs be decided by the appropriate assessing officer of the Supreme Court under the Scale of Costs prescribed by law for proceedings in the Supreme Court.
CATCHWORDS: Statutory Categorisation – Local Government Act 1993
– local government to categorise all rateable land in its area – categories and criteria and differential general rates decided by resolution.
[2] [4]
Categorisation – objections and appeals – sole ground for objection – regard to criteria by which land is categorised – should have been included in another rating category – owner may appeal to the Land Court against decision on objection.
[12] [32] [33]
Categorisation – most appropriate category for use – dominant use where different uses – economic use benefits will determine dominant use.
Bolitho; Felden
[38]
Categorisation – parcel of rateable land – as included in rate notice and notice of valuation.
[29]
Parcel of land – Valuation of Land Act 1944 – every part of an area of land separately held by any owner – any part of an area of land valued as a separate parcel.
[28]
COUNSEL: Mr R Jones for the applicant
Mr P Fynes-Clinton for the respondent
SOLICITORS: McCullough Robertson for the applicant King & Company for the respondent
The Council of the Shire of Esk (the Council) resolved to make and levy a differential general rate for the year ending 30 June 2002.
Pursuant to s.976, s.977 and s.979 of the Local Government Act 1993 (the Act) before it may make and levy a differential general rate it is necessary for the Council to categorise all the rateable land in its area, decide by resolution the categories and the criteria by which land is to be categorized and specify the categories in which rateable land is to be included.
The Council decided on five categories. [4] Section 978 of the Act relevantly provides:
"(1) After the categories and criteria have been decided, all rateable land in the local government's area must be categorised by the local government identifying the category in which each parcel of rateable land is included."
South East Queensland Water Corporation Limited (SEQ Water) owns freehold land comprising numerous real property descriptions being above and below the full supply levels of both the Wivenhoe Dam and the Somerset Dam within the Shire of Esk.
[6]SEQ Water was notified that these lands as identified in the relevant rate notices were included in Category 5.
Category 5 was intended to apply "to all land primarily used for the storage of water intended for human consumption with a capacity of one mega litre or more", the stated criteria being "land that is rateable land and is primarily used for the storage of water intended for human consumption with a capacity of one mega litre or more".
The Council had resolved that a differential rate of 1.80 cents in the dollar be made and levied on all rateable land in Categories 1, 3 and 4; 1.45 cents in Category 2 and 5.4 cents
in Category 5.
The reasons for adopting a higher rate in the dollar for Category 5 land were stated as follows:
(a)Cost of water quality awareness on Council's operations and in the delivery of services to its residents.
(b)Effects on infrastructure design and cost factors both upstream and downstream of the water storages including bridges and roads, water, sewerage and waste management infrastructure.
(c)Equity issues of flooding the Shire's most economically productive land with no commensurate ongoing income to replace that loss.
(d)Cost of provision of services to visitors to the lakes relative to the economic benefits provided by those visitors. The South East Queensland Water Corporation estimated that there were approximately 1,000,000 visitors to Lakes Somerset and Wivenhoe per annum in recent years.
(e)Higher planning and deliberation costs relating to lakeside and catchment land use matters.
(f)Social impacts of the decision to close or charge for the South East Queensland Water Corporation's recreational areas and impact on Council's costs in closing the gap in the provision of services.
(g)Increased cost of emergency services provision in the shire relating to hosting large water storages.
(h)Shortfall in rural fire contributions made by the South East Queensland Water Corporation relative to the amount of fuel on the relevant parcel.
(i)Payment of a higher rate in the dollar reflecting the above factors will not impose an unreasonable financial burden on the owner or owners of land in Category 5. At present, all such lands are owned by 1 owner which has substantial financial capacity. One indicia of this is the fact that, in another local government area, this entity pays rates in respect of a far smaller and less significant water storage which are higher per hectare than the rate per hectare proposed to be levied on Category 5.
[10]These appeals relate to the lands identified in the following rate notices being included in Category 5:
(a)Assessment No. 06049-00000-000-7. The valuation amount was
$6,700,000, being the unimproved valuation made by the
Department of Natural Resources as it was then, in a valuation notice dated 1 July 2001 and, as relevant to this matter, to take effect from 30 June 2001, for property identification 40109790, being land with real property descriptions as set out in the notice, containing an area of 16,650.758 ha. That land was further identified in this matter as being both above and below the full supply level of Wivenhoe Dam.
(b)Assessment No. 05710-00000-000-5. The valuation amount was
$540,000, being the unimproved valuation made by the Department of Natural Resources in an annual valuation notice dated 26 February 2001, to take effect from 30 June 2001, for property identification 369245, being land with real property descriptions as set out in the notice containing an area of 714.7739 ha. That land was further identified in this matter as being both above and below the full supply level of Somerset Dam.
Pursuant to s.984 of the Act SEQ Water had objected to the inclusion of these lands in Category 5 in both rate notices. It sought to have the lands included in Category 1. The criteria for Category 1 is all rateable land in the Shire not included in Category 2, Category 3, Category 4 or Category 5.
Being aggrieved by the decision on objections, SEQ Water appealed to this Court, pursuant to s.987 of the Act. In each case the ground of appeal was as follows:
"Having regard to the criteria decided by the Council for the Shire of Esk by which rateable land in the Shire of Esk is calculated, the land should not have been included in Differential Rate Category 5, but should have been included in Differential Rate Category 1."
Nothing is served by the Court considering the criteria relevant to Categories 2, 3 and 4. [14] One witness, Mr Gregory P Steel, who is employed by SEQ Water as its Property
Services Manager, was called.
Through Mr Steel was tendered a statement with annexures which identified the various lands included in the rate notices and valuation notices, and categorised by the Council as Category 5.
Mapping annexed to Mr Steel's statement was helpful in understanding the argument put forward on behalf of the appellant. The mapping indicated the extent of land which was above and below the full supply level of each dam.
Mr Steel calculated that with regard to the Wivenhoe Dam, of the 16,650.758 ha included in Category 5 "10,750 hectares is land which is inundated and used for the storage of water for the purposes of human consumption, while 2,900 hectares is held for flood mitigation purposes" (only until it can be safely released from the dam without causing flooding downstream) "and the balance (3,000 hectares) is retained for environmental purposes".
With regard to Somerset Dam, of the 714.7739 ha (within Esk Shire and included in Category 5) "511 hectares is land which is inundated and used for the storage of water for the purposes of human consumption, while 203 hectares is not used for the purposes of the storage of water for human consumption, but rather is held by SEQ Water for environmental purposes".
The thrust of SEQ Water's argument is that the land above full supply levels of the dams is not used for the storage of water for human consumption but for uses not identified in the criteria for Categories 2, 3 or 4. It was submitted that the words "used for" must be given their natural and ordinary meaning.
The references in s.978 of the Act (see [4]) to "parcel of rateable land" has been interpreted by the appellant in a manner which places emphasis on the word "parcel", a word which is not defined in the Act.
Again relying on the ordinary and natural meaning, it is submitted that a "parcel" of land is land capable of being identified as a separate or distinct piece of land, separating it from other land.
The appellant submits that the separate and distinct parcels of land which are not being used for storing water for human consumption are capable of identification by reference to plans which are used by the Department of Natural Resources and Mines in the valuation process. It is suggested that the Council has no authority then to incorrectly include any distinct or separate parcel of land in a category which may correctly apply to other land, simply because there is association with that other land through common ownership.
The appellant further submits that the Council has an obligation to apply logically, fairly and objectively its categorisation criteria to each separate parcel of land. "The fact that the parcels of land above" (full supply level) "have not been separated and dealt with separately in the Valuation Notices is of no relevance. It is not this process or transaction that determines the appropriate category of land. The criteria set by the Council to determine the appropriate categorisation is the relevant yardstick".
[24]The appellant submitted that in practice all that would have been required of the respondent council was for it to calculate from the available plans, the area which is correctly included in Category 5, the area which is not used for the storage of water being the balance area in the Assessment and rate notices, include that land in Category 1, and then apply the relevant differential rate charges on a pro-rata area apportionment of each relevant valuation.
It was the respondent Council's submission through Mr Fynes-Clinton, that even if there was substance in the appellant's argument and it does not accept that there is, it was not legally possible for the Council or this Court, to place different surveyed lots covered by a single valuation (and for that reason contained within a single rate assessment) in different categories.
The basis for that proposition is that pursuant to the Act, the Council is required to categorise each parcel of rateable land and levy differential general rates on the unimproved value of rateable land as defined in the Valuation of Land Act 1944 (VLA) and decided by the Chief Executive, Department of Natural Resources and Mines (chief executive). (See s.3 and s.13 VLA.
As is relevant to these matters, s.34(1)(a) of the VLA then provides that unless the chief executive otherwise directs there shall be included in 1 valuation "several parcels of land which adjoin and are owned by the same person and where either no part is leased or all the parcels are let to 1 person".
In s.2 of the VLA, "parcel of land" means every part of an area which is separately held by any owner, or any part of an area of land which the chief executive directs should be valued as a separate parcel.
In the subject matters, it is my view that in the absence of an "otherwise direction" by the chief executive, he was required pursuant to s.34(1)(a) of the VLA to include in 1 valuation the relevant aggregation of parcels. Having done that, the "parcel of land" becomes the part of an area separately held by the appellant, and as such a parcel of rateable land, with an unimproved value upon which differential general rates are to be levied.
I accept the respondent's submission that whilesoever "several parcels" of land are included in one valuation, it is the category of the aggregated parcel which is to be identified pursuant to s.978 of the Act.
Mr Jones's submission for the appellant is that the Council has an obligation to act in a fair and reasonable manner and not in an arbitrary manner or a manner convenient to it when attributing a category to a parcel of land, and referred the Court to comments of Murphy, Fullagar and Nathan JJ of the Full Court of the Supreme Court of Victoria in Falkenberg v City of Hamilton (1986) 61 LGRA 337. The circumstances in that case related to the fairness of the outcome of application of differential general rates in various categories and in my opinion are distinguishable from the circumstances here.
These matters do not relate to the fairness or otherwise of the criteria adopted in deciding categories or the differential general rate for those categories. Here the Council had
found that the parcels of rateable land subject of the assessments should be included in Category 5. The sole ground of objection to the categorisation of the land available to the owner, was pursuant to s.984(1) of the Act "that, having regard to the criteria decided by the local government by which rateable land is categorised, the land should have been included, as at the date of issue of the relevant rate notice, in another rating category".
These appeals are against the decisions on objections to the categorisation of the rateable land described in the relevant rate notices and pursuant to s.990(1) of the Act the Land Court may:
"(a)set aside the decision and decide that the land should be included in a different rating category; or
(b) disallow the appeal."
It was the respondent's submission that in each case the whole of the aggregated parcel could be considered as being used for the storage of water for human consumption in terms of the findings in Newcastle City Council v Royal Newcastle Hospital (1957) 96 CLR 493 (HC) and, on appeal to the Privy Council (1959) 100 CLR 1. However, the use of the words "primarily used" in the intent of, and criteria for Category 5, had removed all doubt as to the correct categorisation.
On the evidence of Mr Steel and the appellant's submissions I do not accept that the findings in the Royal Newcastle Hospital matter could be interpreted so widely as the respondent's submission suggests, to include in these matters the uses of land above the full supply levels of the Dams as "storage of water". However I do accept that once qualified by "primarily" used, the natural meaning of "used" is relevant only in terms of deciding which of the divided uses is the primary use.
Indeed, the reasons for adopting a higher rate in the dollar for Category 5 land (paragraph
2.14 of the Council's adopted Revenue Policy) which read in combination, could not reasonably be construed to limit the intent of Category 5 to include only the actual water storage area to full supply level.
The evidence of Mr Steel supports the Council's submission that, if it is found that multiple uses do exist, the primary economic benefit is obtained from the use associated with the storage of water for human consumption. Even on considerations related to the areas used for specific purposes, the dominant use is for the storage of water for human consumption.
This Court has held that in categorisation cases where uses may be divided, the primary or dominant use is the determining factor and economic benefit derived from each of the divided uses will determine the primary use. (See Bolitho v Valuer-General (1992) 14 QLCR 73 and Felden v Brisbane City Council (1994) 15 QLCR 102).
Finding
A parcel of land to be included in a particular categorisation is the area of rateable land as included in a separate valuation notice issued by the Chief Executive, Department of Natural Resources and Mines then included in the relevant rate notice. Regardless of the divided uses of parts of each parcel of land included in each rate notice the categorisation of which is the subject of these appeals, the rateable land is "primarily used for the storage of water intended for human consumption, with a capacity of 1 mega litre or more", and is correctly included in Category 5. The appeal is therefore disallowed.
Costs
At the conclusion of the hearing of the substantive matter, the parties were invited to make submissions as to the costs of the proceeding depending on the outcome.
Mr Jones for the appellant submitted that this was the type of matter where regardless of the outcome, each party should bear its own costs. This approach, he submitted was the usual manner in which this Court dealt with applications for costs where an appellant's case was not one which could be considered frivolous or vexatious.
Mr Fynes-Clinton advised the Court that it had been intended, in the event that the respondent was successful to seek leave to tender a copy of a letter written to the appellant prior to the hearing on a "without prejudice" basis, except as to costs.
His oral submission was that the circumstances surrounding these appeals were such that if the Court was to disallow the appeals he had been instructed to ask for costs and was of the view that it would be appropriate for the Court to make such an order.
Subsequent to the hearing the Court received an application from the respondent for a copy of the letter mentioned above to be tendered subsequent to the outcome of the appeals having been decided, and in the event that the respondent was successful. The copy of the letter was to remain in a sealed envelope until the outcome had been decided.
The appellant had no objection to the tendering of the letter on the basis sought by the respondent, provided the appellant was afforded the opportunity to respond, also by way of a written submission contained in a sealed envelope.
The decision has been made to disallow the appeals and as a consequence the sealed envelopes opened and the contents considered.
In essence, the respondent, in the letter to the appellant, had summarized its opinion as to the strengths of its case and the weaknesses of the appellant's case, with a view to exploring the possibilities of avoiding the necessity to proceed with a hearing. The without prejudice offer was made that if the appeals were withdrawn by a nominated date, the respondent was prepared to bear its own costs.
Having been unsuccessful, the appellant has, in its written submission, suggested that the legal issue as to whether "parcel" of land for the purposes of categorisation pursuant to the Local Government Act 1993, bore the same meaning as a "parcel of land" as defined in the Valuation of Land Act 1944, was not "clear cut", there being no direct links between those two Acts and, as a consequence the issue had required interpretation by the Court. The issue was one of importance to the appellant given the size of the holdings of land included in the categorisation appealed against. In the absence of clear authority on the legal points raised, the appellant contends that the appeal was "not so without merit and/or vexatious as to warrant a cost order to that effect".
It is now clear that the respondent Council had, prior to the hearing, puts its views to the appellant in a clear and concise manner, free from ambiguity as to the legal issues raised by the appellant in the hearing before the Court. The appellant clearly had a different view as to those issues. The result supports the respondent's case and may be interpreted as having found no merit in the appellant's case. Section 34 of the Land Court Act 2000 provides the manner in which the Land Court may decide an application for costs.
This is not, in my opinion, the type of case where, in this Court, a successful party should be denied its costs. I find that costs should follow the event and the respondent's application be granted.
Orders
The appeals against the decisions on objections to the categorisation of land are disallowed.
Pursuant to s.34(1) and (5) of the Land Court Act 2000 it is ordered that the appellant pay the respondent's costs for the proceeding, and those costs be decided by the appropriate assessing officer of the Supreme Court under the Scale of Costs prescribed by law for proceedings in the Supreme Court.
RE WENCK MEMBER OF THE LAND COURT
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