Attard v Valuer General

Conveyancing Act 1919 s 23F, s 23G LEGISLATION CITED: Local Government Act 1993 Real Property Act 1900 s 37 Valuation of Land Act 1916 s 4, s 6A, s 14A, s 26, s 26A, s 27, s 27B, s 29, s 34, s 37, s 38, s 39, s 40

Christies Sands Pty Ltd v City of Tea Tree Gully (1975) 37 LGRA 325; CASES CITED: Colonial Sugar Refining Co Ltd v The Valuer-General (1939) 5 The Valuer 472; Flemington Properties Pty Ltd v Raine & Horne Commercial Pty Ltd and Another (1998) 83 FCR 411; Gollan and Another v Randwick Municipal Council (1961) 6 LGRA 275

APPLICANTS Mr C Attard (in person) LEGAL REPRESENTATIVES: RESPONDENT Mr J Maston SOLICITORS Crown Solicitor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

CHARLES JOHN ATTARD AND CATHERINE JOY ATTARD Applicants

JUDGMENT Jagot J: Background 1 These are appeals under s 37 of the Valuation of Land Act 1916 ("the Act"). The appeals were heard together and evidence in one was taken to be evidence in the other. Section 37 provides that: Any person entitled under Part 3 to object to a valuation may appeal to the Land and Environment Court if the person is dissatisfied with the Valuer-General's determination of any such objection to the valuation concerned (whether or not the person was the objector).

2 Section 38 of the Act provides the time for appeal.

3 Section 39 provides that: The appellant's and respondent's cases on an appeal are not limited to the grounds of the objection.

4 Section 40, subs (1), provides that: On an appeal, the Land and Environment Court may do any one or more of the following: (a) confirm or revoke the decision to which the appeal relates, (b) make a decision in place of the decision to which the appeal relates, (c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision.

5 Subsection (2) provides that: On an appeal, the appellant has the onus of proving the appellant's case.

6 The land is known as 210 Kurmond Road, Freeman's Reach. Two deposited plans are in evidence. DP 790878 shows that the land at one time was held in three lots - lots 1, 2 and 3. Lot 1 was a small lot, fronting Kurmond Road. On 10 November 2004, a new deposited plan was registered, being DP 1075887. That DP shows that a subdivision of the land had occurred whereby former lot 1 was consolidated into the adjoining lot (former lot 2) and lot 2 was subdivided into two new lots (lots 101 and 102). This resulted in a title arrangement whereby Charles John Attard and Catherine Joy Attard were the owners as joint tenants of the land that was formerly lot 1 in DP 790878 (now part of lot 101), and Charles Attard and Charles John Attard were the owners of the balance of lot 101. Apparently, there has been some further change to the ownership but, given the base date of 1 July 2002, that is not relevant for current purposes.

7 The registration of DP 1075887 triggered a re-ascertainment of the land value for reasons I will explain. On 25 January 2005 the Valuer-General notified Hawkesbury City Council of the re-ascertainment of value. The notice identified the relevant base date as 1 July 2002, and that the re-ascertainment of value occurred pursuant to s 27B of the Act.

8 The Valuer-General issued two notices of valuation relating to lot 101. The first notice shows the land as part 101/1075887 of an area of 1721 square metres, and a land value of $69,000. This equates to the former lot 1, being the land owned by Charles John Attard and Catherine Joy Attard at the base date. The second notice also refers to the land as part 101/1075887, with an area of 3.974 hectares, and a land value of $203,000. This equates to the balance of lot 101, being the land owned by Charles Attard and Charles John Attard at the base date.

9 The applicants objected to both determinations of value on 4 April 2005. The objections, which were subsequently amended, were made on a number of grounds. First, the applicants said that there was only one lot, namely lot 101 itself. There was no capacity to market or convey that part of lot 101 which was formerly lot 1. As lot 101 could not be sold as to part only, the land value of the parts was nil. In other words, the land value was too high. Secondly, that land that should be included in one valuation, had been valued separately.

10 The respondent refused the objections by letter dated 20 October 2005. In disallowing the objections the respondent noted that the objection (in part) was to the separate valuation of land which was now held in one lot in a current plan, namely lot 101. The letter said that the Valuer General's legal advice was to the effect that "part formerly titles (dual entitlement folios) are to be valued separately in circumstances such as exists" with the applicant's titles. The same information was provided with respect to each objection.

11 The applicants filed the appeals in this Court on 19 December 2005. The respondent accepts that the objections were competent, and that the appeals were lodged within time.

Statutory provisions 12 Under s 14A(1), the land value of each parcel of land in New South Wales, other than certain exceptions which are not currently relevant, is to be ascertained each year. Subsection (6) makes clear that the power to ascertain land value includes the power to re-ascertain that land value.

13 Under s 6A, the land value of land is the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that the improvements if any thereon, or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title, had not been made.

14 Neither the word "parcel" nor "fee simple" are defined in s 4 of the Act, but both have a meaning well known to law (addressed below).

15 Certain other sections of the Act are also relevant. Section 26 deals with requirements for land to be included in one valuation. It provides (in part) that where several parcels of land adjoin and are owned by the same person, and where no part is leased, they shall be included in one valuation, unless the Valuer General otherwise directs. Section 26, subs (3), expressly notes that this section does not apply to land that is required by s 27B to be separately valued or included in one valuation.

16 Section 26A relates to valuation of parcels that form part of the site of a building, and its terms are not relevant.

17 Section 27 sets out circumstances where lands are to be separately valued. For example, subs (1) provides that where several parcels of land owned by the same person are separately let to different persons they shall be separately valued. That is not the case here. Subsection (2) provides that lands which do not adjoin, or which are separated by a road, or are separately owned, shall be separately valued. Subsection (3) provides that, subject to subs (3A), where a portion of a parcel of land which has been valued is sold, conveyed, or compulsorily acquired, fresh valuation shall be made of the portion sold, conveyed, or compulsorily acquired, and of the portion remaining. Section 27, subs (5), provides that the section does not apply to land which is required by s 27B to be separately valued or included in one valuation.

18 Section 27B deals with the separate valuation of lots in subdivision. Subsection (1) provides that the Valuer General may make valuations in accordance with the section of the land in a deposited plan on registration of the plan.

19 Section 27B, subs (2), in contrast, sets out circumstances in which the Valuer General must make a separate valuation in accordance with the section.

20 Section 27B (4) states that: Separate valuations are to be made in respect of each lot comprising the land that is the subject of the valuation.

21 Section 27B (5) qualifies s 27B (4) and provides that: However:

(a) the Valuer-General may, at the Valuer-General's discretion (but subject to section 26 (1)), include adjoining lots that are owned by the same person in the one valuation (which may also include other adjoining land owned by that person), and (b) the Valuer-General must (subject to section 28) include in one valuation lots owned by the same person if those lots are worked in one holding for agricultural or pastoral purposes.

22 Section 27B (8) identifies that: If part only of a lot in a valuation under this section is subject to a particular rate, the value of the land is to be apportioned so as to show separately the value of that part.

23 The other section to which I should refer is s 34, which sets out the grounds that may be taken on objection, including (relevantly to this matter) subs (1)(a), that the values assigned are too high, and subs (1)(d), that lands which should be included in one valuation have been valued separately.

24 As I have said, the applicants' objections fit within those grounds, and therefore were proper to bring by way of objection.

25 The applicants submitted that the parts of lot 101 identified in the valuation notices are incapable of separate disposition or dealing having regard to the terms of s 23F of the Conveyancing Act 1919, and s 37 of the Real Property Act 1900. Hence, because the land as held in those parts cannot be dealt with, the land had no fee simple value in accordance with s 6A.

26 The applicants helpfully referred to various cases and dictionary definitions identifying that the fee simple in land was, in effect, the largest possible estate in a parcel of land, a fundamental characteristic of which was its alienability. Therefore, the applicants submitted, the whole of lot 101 had to be valued in a single separate valuation, in order to obtain a fee simple value for the land as required by operation of s 6A. The applicants acknowledged that any such single valuation could show an apportionment of the value between the part held at the relevant time by Charles Attard and Charles John Attard, and the part held at the relevant time by Charles John Attard and Catherine Joy Attard. The applicants also handed up as an aide a form of valuation notice which the applicants said would reflect the requirements to which I have referred.

27 Otherwise, the applicants submitted that the issue of the two valuation notices led to an inequitable, unreasonable and absurd result. That is, for the one lot there were two valuation notices, which then triggered two requirements for rate notices under the Local Government Act 1993. The applicants said that it was absurd to treat one lot, namely lot 101, as two parcels when those parcels could not be separately sold. They noted that what they sought was an administrative alteration by combing the two valuation notices into one.

28 The respondent dealt with the submissions of the applicants by reference to the grounds under s 34 of the Act, namely that the values assigned are too high, and that land that should be included in one valuation, had been valued separately.

29 The respondent submitted that the applicants' argument about s 6A was incorrect. The respondent identified what it said were at least three methods whereby the interest of the individual owners in the two parts of lot 101 were able to be dealt with, basically by way of the exceptions that are set out in ss23F and 23G of the Conveyancing Act 1919.

30 The respondent submitted that under s 23G, subs (a), if all the owners agreed, then a transaction could be registered relating to the whole of the land comprised in the folio (that is lot 101). Under s 23G, subs (f), the respondent said that if one or other of the owners disposed of their part to another owner, or all of the owners disposed of the lot to some other person, then that transaction could also be registered as an exception. Finally, as set out in s 23F(3), the respondent noted that the prohibition in s 23F(1) does not apply to an agreement with respect to land the subject of a proposed plan of subdivision, or proposed plan of consolidation, but the agreement is taken to be conditional on the registration of the proposed plan. In other words, the land held within that part of lot 101 which was formerly known as lot 1, could be consolidated with former lot 3, could be consolidated with other land, or could otherwise be subject to some form of boundary adjustment.

31 For these reasons the respondent said that the land could be dealt with in the market. Further, s 6A requires an assumption that a sale of the fee simple has occurred, and the issue then becomes one of price. While the capacity to alienate land may well be relevant to price, the respondent submitted that, in this case, given the clear exceptions to s 23F, there would be no perception of risk by the notional buyer of the land about the capacity to register a dealing in the circumstances identified. Accordingly, there should be no discount on the fee simple value which had been calculated in this case.

32 The respondent also relied on the expert evidence of Mr Carr, valuer, which was the only valuation evidence in the proceedings, and which was not challenged by the applicant. Mr Carr said that the valuations were based on the value of the total area of lot 101 (an area of 4.174 hectares). The total value of $272,000 was then apportioned to the two parts (former lot 1, in the amount of $69,000 and part former lot 2 in the amount of $203,000,). In Mr Carr's opinion, based on the vacant site sales of similar lots in adjoining localities, the valuations appeared conservative. Therefore the respondent submitted that the objection based on the value being too high was unfounded.

33 In response to the "incorrect parcelling" submission, the respondent submitted that the word "parcel" takes its ordinary meaning of ascertainable land, and that under s 14A the Valuer General is to value each parcel. The respondent noted that it was clear from the supplementary list issued to the Council that the source of power on which the respondent had relied was s 27B of the Act, and in particular the discretionary power in s 27B(1), rather than the mandatory obligation on the Valuer General in s 27B(2). That is, on registration of the deposited plan the Valuer General had a capacity to ascertain value which was required by subs (6) to be as at the base date.

34 The respondent specifically dealt with subs (4), which I have quoted above (namely that separate valuations are to be made in respect of each lot comprising the land that is the subject of the valuation). The respondent said that the fact that two valuations had been issued did not mean that lot 101 had not been separately valued. Lot 101 had been separately valued, but then the Valuer General, in accordance with s 14A, had also determined that there were two parcels within lot 101, and issued the two valuation notices (see s 29 of the Act).

35 The respondent said that its identification of these two parcels was correct and preferable as a matter of policy because it reflected the true title arrangement, namely that two owners had an interest in one part of the lot, and two owners had an interest in another part of the lot. By issuing two valuations there was no prospect of any owner having to deal with the consequences of such a valuation with respect to part of the land in which they held no interest whatsoever.

36 The applicants disagreed with this submission, not only because the applicants said that a parcel should be understood as meaning a lot, but also because they said that if one notice of valuation was issued the owners would sort out between themselves their respective proportionate responsibility, whereas the consequence of the two valuation notices was in fact increased liability, or potential liability, on rates.

37 A fee simple interest is the largest interest in land known to the law. Section 6A requires the making of an hypothesis. In Gollan and Another v Randwick Municipal Council (1961) 6 LGRA 275 at 278, Lord Radcliffe, referring to a similar provision, said that: It is not in dispute that a formula of this kind requires the making of certain hypotheses. A sale of the fee simple has to be assumed whether or not the land in question can legally be sold, and the fact that there is some lawful impediment to sale cannot be allowed to enter into the assessment of value. Similarly, it is irrelevant that the land may be so settled or encumbered that there is no single person or even combination of persons who can at the relevant date effectively transfer the fee simple. All this follows from the fact that a sale of such an estate has to be assumed.

38 I agree with the respondent, insofar as the respondent has acknowledged that the capacity to deal with the land will be relevant to its value. However, I do not accept what the applicants have said about the operation of s 6A as a matter of statutory interpretation. It is necessary to assume a sale of the fee simple on the terms set out in the statute and then to ascertain the land value of the land.

39 I accept the respondent's submissions that there are at least three exceptions to s 23F that disclose that the parts of lot 101 identified by the Valuer-General as parcels are capable of being dealt with, and have value in the market.

40 I have no valuation evidence other than that of Mr Carr (which explains the basis of the valuation as a valuation of the whole of lot 101, and apportionment of that value between the two parts). I accept Mr Carr's opinions. Hence, I do not accept the ground of appeal that the value assigned is too high. This conclusion also seems to me to follow from the acknowledgement by the applicants that if the land had been valued as one parcel, the applicants had no particular difficulty with the value determined by the Valuer General. The real issue (as the applicants saw it) was that lot 101 should not have been subject to two valuations.

41 This brings me to the second issue. I have already noted that s 14A uses the word "parcel", whereas s 27B refers to "lot". The word "parcel" is well known to the law. There are a number of decisions which deal with the concept, many of which are conveniently summarised in Alan Hyam, The Law Affecting Valuation of Land in Australia, 3rd edition, at pp 18-20. In Colonial Sugar Refining Co Ltd v The Valuer-General (1939) 5 The Valuer 472 at 473, cited by Hyam, Roper J said that the question of whether land is one or more parcels for the purposes of the Valuation of Land Act is a question of fact. Roper J said that: Unity of title and the purpose for which the land is held, are elements to be considered; but the principal consideration is, I think, the degree of separation effected by the owner in using the land. Where the owner cuts the land into portions and devotes those portions permanently and indefinitely to separate uses each portion is in my opinion a parcel for the purposes of the Act.

42 In Christies Sands Pty Ltd v City of Tea Tree Gully (1975) 37 LGRA 325 at 336 Wells J said: It seems to me, therefore, to be clear beyond argument that the expression 'any parcel of land' means what it says according to common understanding and to the understanding of the conveyancer and historian. It means, in my opinion, a specified and reasonably well defined area of land. That area may be defined by general description, by reference to a map or plan, by clearly established usage, or by a combination of all three (or one or two of them) with landmarks, fences, walls, tracks, watercourses or natural boundaries or signs on or in the land of any kind whatever. It is essential to the creation of a parcel, in this sense, that its limits should be ascertainable with reasonable precision.

43 There are two aspects to the objection on this ground which I need to consider. The first is whether, as a matter of fact, there are two parcels within lot 101 as opposed to a single parcel. The second is the relationship between s 14A and s 27B, subs (4).

44 Former lot 1 was held in a separate title. On the subdivision that created DP 1075887, title arrangements were put in place by the applicants whereby the interest in that part of lot 101 being the former lot 1 was to be held separately from the interests in the balance of lot 101. Mr Carr's statement includes photographs from which I infer that former lot 1 of 1721 square metres contained a house and its curtilage. I am satisfied that, as at the base date, that part of lot 101 comprised in former lot 1 was readily identifiable. Because of both its use and title arrangement, I am satisfied that lot 101 comprised two parcels at the base date.

45 There remains the issue about the relationship between s 14A (which provides that the value of each parcel is to be ascertained each year) and s 27B(4) (which says that if there is to be a valuation in accordance with that section, then separate valuations are to be made in respect of each lot comprising the land that is the subject of the valuation).

46 The question that arises, in my view, is whether s 27B(4) excludes the capacity for the Valuer General, when exercising power under that section, to treat a lot (albeit separately valued) as comprising more than one parcel for the purposes of s 14A.

47 The only decision to which the respondent could refer me, Flemington Properties Pty Ltd v Raine & Horne Commercial Pty Ltd and Another (1998) 83 FCR 411, does not provide assistance on the particular point in issue.

48 Some light may be thrown upon s 27B(4) by subs (5). It provides that, notwithstanding subs (4), the Valuer General may, subject to s 26, include adjoining lots that are owned by the same person in the one valuation.

49 In the context of the Act as a whole, I consider that the better view is that s 27B(4) does not prevent the Valuer General from determining more than one valuation if satisfied that the land held in one lot comprises more than one parcel, provided that the Valuer General makes a separate valuation in respect of each lot within the deposited plan. I accept the respondent's submission that, in this case, there has been a separate valuation of lot 101, and that the Valuer General was also then entitled to determine that there were two parcels to which the value of that lot ought to be assigned (in accordance with s 14A).

50 I have also reached the view that this approach, on the particular facts of this case as at the base date, is correct and preferable, notwithstanding that I may sympathise with the applicants (having regard to the rates consequences the applicants have identified).

51 In particular, former lot 1 is readily identifiable. It was consolidated to become part of lot 101 but subject to a specific title arrangement entered into by the applicants so that persons with an interest in that part did not have any interest in the other part, and vice versa. That part of the land was also used for residential purposes, being occupied by a separate dwelling and curtilage. While I understand the applicant's submission that owners of different parts of land held in a single lot may be capable of sorting out between themselves various liabilities proportionate to their ownership, the issue which the Valuer General has identified (namely that a person should not be exposed to any potential liability relating to that part of the lot in which they hold no interest) is persuasive.

52 I am satisfied that the Valuer General's approach was correct and preferable in the particular circumstances, and does not lead to a result which I can characterise, in the whole context, as absurd, unreasonable or inappropriate.

53 It follows that I do not accept the ground of objection based on s 34(1)(d) (that lands that should be included in one valuation have been valued separately). I thus make the following orders. (1) The appeal is dismissed.

(3) Each party shall pay its own costs of the proceedings.

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