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Valuer-General v AWF Prop Co 2 Pty Ltd

Valuer-General v AWF Prop Co 2 Pty Ltd

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Case Copied 1 October 2021 83 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0022

VALUER-GENERAL VICTORIA	Applicant
v
AWF PROP CO 2 PTY LTD (AS TRUSTEE) (ACN 603 996 407) AND ARARAT WIND FARM PTY LTD (ACN 158 062 358)	First Respondents
and
ARARAT RURAL CITY COUNCIL	Second Respondent

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JUDGES:	McLEISH and EMERTON JJA and DELANY AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	21 and 22 July 2021
DATE OF JUDGMENT:	1 October 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 274
JUDGMENT APPEALED FROM:	[2020] VSC 853 (Richards J)

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VALUATION OF LAND – Fire services levy – Levy calculated according to capital improved value of land – First Respondents leased 16 parcels of land for purpose of establishing and operating wind farm – Wind farm assets comprised 75 wind turbines, substation, buildings, cabling, and other items affixed to land – Contractual obligation to remove wind farm assets at end of lease – Whether wind farm assets formed part of land to be valued – Whether primary judge erred by valuing wind farm as separate occupancies – No error in approach of primary judge – Whether primary judge erred in valuing land on basis land was leased for wind farm operation – No error in approach of primary judge – Shell Co of Australia Ltd v City of Melbourne [1997] 2 VR 615, Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445, considered – Leave to appeal granted, appeal dismissed – Fire Services Property Levy Act 2012 s 16 – Property Law Act 1958 s 154A – Valuation of Land Act 1960 ss 2(1), 2(3), 5A, 13DC – Interpretation of Legislation Act 1984 s 38.

REAL PROPERTY – Fixtures – Tenant’s fixtures – Whether wind farm assets belonging to lessee formed part of land – Wind turbines connected to underground foundations – Connection for safety and operational reasons – Turbines and other above ground assets capable of dismantling and removal – Obligation on lessee to remove things erected or installed on land and make good – Lessee entitled to remove turbines and other assets during lease – Lease term 25 years with option to renew – Above ground assets chattels – SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 395, considered – Property in assets remaining with lessee during lease by operation of Property Law Act 1958 s 154A – Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351, Commissioner of State Revenue v Uniqema Pty Ltd [2004] VSCA 82, applied.

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APPEARANCES:	Counsel	Solicitors
Applicant	Mr T North QC with Mr D O’Brien and Ms E Bergin	Mr J Collopy, Land Use Victoria Legal
First Respondents	Mr D Batt QC and Ms L Hannon QC with Ms J Trewhella	Herbert Smith Freehills
Second Respondent	No appearance

McLEISH JA
EMERTON JA
DELANY AJA:

This appeal concerns the assessment of the fire services levy payable by AFW Prop Co 2 Pty Ltd (‘AFW Prop…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSCA 274
Decision Date: 1 October 2021

CaseChat Overview and Summary

The Valuer-General appealed a decision of the Supreme Court of Victoria, which assessed the value of land for the purpose of determining a fire services levy under the Fire Services Property Levy Act 2012. The land in question consisted of 16 parcels leased by AWF Prop Co 2 Pty Ltd for the purpose of operating a wind farm. The wind farm comprised 75 wind turbines, a substation, buildings, cabling, and other items affixed to the land. The dispute centred on whether the wind farm assets formed part of the land to be valued for the levy and if the primary judge had erred in their valuation approach.

The court had to determine whether the wind farm assets were fixtures that formed part of the land or if they were chattels that remained the property of the lessee, AWF Prop Co 2 Pty Ltd. Additionally, the court needed to ascertain if the primary judge had erred by valuing the wind farm as separate occupancies and whether there was an error in valuing the land on the basis that it was leased for wind farm operations. The court considered precedent cases such as Shell Co of Australia Ltd v City of Melbourne [1997] 2 VR 615 and Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445.

The Court of Appeal held that there was no error in the primary judge's approach. The wind farm assets were not considered part of the land for the purpose of the levy as they were removable and the lessee had an obligation to dismantle and remove them at the end of the lease. The court found that the wind turbines, while connected to underground foundations for safety and operational reasons, were still chattels and not fixtures. The reasoning was informed by cases such as SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 395 and Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351. Consequently, the appeal was dismissed, and the decision of the primary judge was upheld.

Orders