Brisbane City Council v Valuer-General

Brisbane City Council v Valuer-General - [1978] HCA 40 - HCA 1978 case summary — Zoe

[20]

The fact that he has removed the water and that it is implicit in his valuation that in doing so he thereby assessed a higher unimproved value on such uncovered "submerged land", and a higher total value for each whole parcel than if he had left the water there, leaves only one inference open and that is that he regarded such water as a detriment on the land. They went on to hold that the water was not an improvement, first because water in itself is not an improvement on land and secondly, because the method adopted by Mr. Conroy "itself completely repudiates the suggestion that any operation of man in putting water on the submerged lands in these cases has enhanced the value of any such land." They accordingly held that the lands had to be valued as they were in fact with the water over them. When they came to apply their decision on principle to the facts of the case they said that they were "hampered to some extent by the failure of the parties to furnish evidence on all the matters that we think have to be considered". They held that the submerged land - or the "water content land" as they proceeded to call it - would have a saleable value, as being contiguous with the large volume of water available to supply the cities of Brisbane and Ipswich and also as an adjunct to a picnic or recreation area, or as part of such an area as for instance a waterskiing area. The conclusion which they reached on this question was expressed as follows: In our judgment, having regard to the evidence before us, we can do no better than proceed along the same lines on the assumption that the only value these water content lands would have, in each case, to a hypothetical vendor, over and above the additional value each gives to its emergent and marginal lands as grazing land, could be the figure or price at which he and the appellant in these cases as hypothetical purchaser would come together. We think this would be the same unit figure in each case, rather than a percentage figure based on the emergent and marginal land values. We adopt and apply $1 per acre to these water content areas. 1. (1955) 91 C.L.R. 610. 2. [1961] A.C. 82.

[32]

It appears clear enough that the wall of the dam was not an improvement in relation to the lands in question, even to the two parcels on which a small part of the structure stands. The wall itself (or the greater part of it) is not on the lands and does not appertain to them within the meaning of the definition. The real question is whether the water is an improvement. I agree with the view expressed by the Land Appeal Court that water in itself is not an improvement. Improvements, as has been said, consist of something done which has enchanced the value of land. To build a dam, or to improve a watercourse, so that water may be collected on or flow over land may improve the land, but it is the dam or the watercourse, and not the water, that constitutes the improvement. But even if that did not dispose of the matter, the water could only be an improvement if its presence enhanced the value of the lands. Whether it did so or not is a question of fact. There is no doubt that a dam, an artificial lake or a swimming pool may in many cases be an improvement to the land on which it is built. However, whether that will be so or not will depend on the facts of the case. For example, if a grazing property has more dams than are necessary to water the stock that it can carry, the erection of an additional dam could not usually be said to be an improvement. Similarly, assuming that water can itself be an improvement, whether it is so is a question of fact. In Reg. v. Rigby [7] , this Court, in a passage to which I shall again refer, repeated what is well settled, that upon a case stated the court cannot determine questions of fact. In the present case, it has not been established that the Land Appeal Court was wrong in law in holding that the water did not enhance the value of the lands. The only error in law that could be suggested was that there was no evidence to support that conclusion. However, for reasons which I shall later elaborate, I consider that the form of the case stated makes it impossible to hold that there was no evidence to support any particular finding. Common sense suggests that in the ordinary course of events the permanent inundation of lands is detrimental to them and depreciatory of their value. However that may be, it has not been shown that there was no evidence on which the Land Appeal Court could find that the water did not enhance the value of the lands in the present case. For these reasons it has not been established that the Land Appeal Court erred in law in holding that the water was not an improvement and that the lands should be valued in their actual state.

[35]

Any land described in the First Schedule to this Act shall be rateable land under and within the meaning of "The Local Government Acts, 1936 to 1958", and additionally Brisbane City Council shall be liable to pay and discharge all charges and assessments in respect of any such land duly made by any person or authority other than the Local Authority at all times on and after the first day of July, One thousand nine hundred and fifty-nine, during which any person other than Brisbane City Council occupies that land under any lease, agreement to lease, licence, or other contract, agreement, or arrangement entered into by him with Brisbane City Council or the Co-ordinator General of Public Works. It is quite clear that this section renders the lands in question ratable and that in Ex parte Kilcoy Shire Council [8] , Sheehy J. was right in rejecting an argument that the latter part of the section in some way qualifies, affects or cuts down the words of the first part. However it was submitted that legislature, in enacting the section, intended to compensate the Kilcoy Shire Council for the loss of rate revenue arising from the compulsory alienation of a considerable portion of valuable ratable land, and a dictum in Ex parte Kilcoy Shire Council [9] was cited in support of this argument. When the Act of 1959 was enacted it must have been apparent to the legislature that by reason of the construction of the dam and the devotion of the lands to the purposes thereof the local authorities in which the lands were situated - including the Esk Shire Council and the Kilcoy Shire Council - might lose considerable revenue from rates unless special legislation were enacted. In the absence of such legislation the lands might fall within one of the exemptions contained in pars. (c) and (d) of s. 24 (1) (i) of the Local Government Act, 1936 Q. as amended and if so they would not be ratable. The legislature dealt with this question by s. 12 of the Act of 1959 and declared that the lands are to be ratable. However it did not go further and provide a new basis for their valuation. It is not correct to say that s. 12 would have no effect, or only a nominal or illusory effect, if it rendered the lands in the first schedule ratable but did not affect the method of their valuation. On no view could the lands in the first schedule be regarded as having little or no ratable value. Only parts of the lands were submerged; the balance - the emergent land - retained its value, and in many cases probably increased considerably in value because of the increased availability of water. There is no justification for giving to the words of s. 12 a meaning other than their plain and natural meaning. It would be the merest speculation to say that the legislature intended to provide that the submerged lands should be valued as if they had not been inundated. Section 12, properly construed, has nothing to say in relation to the question how the lands are to be valued for rating purposes; it does no more than render them ratable. If Sheehy J. intended to suggest to the contrary in Kilcoy Shire Council [10] he was in error. 1. [1967] Q.W.N. 26. 2. [1967] Q. W.N. at p. 48. 3. [1967] Q.W.N. 26.

[47]

These provisions are designed to regulate the relationship between Brisbane City Council and its lessees, and they do not prescribe any method of valuation for purposes other than those of the Act of 1974. But in the argument put on behalf of the Valuer-General it was sought to use them in the following way. The fact that to ascertain the factor "UVSL" it is necessary to value the submerged land on the assumption that it has not been inundated suggests that a similar assumption was expected to be made when the whole of the land was valued for the purpose of ascertaining the factor "UVWL", for otherwise the formula in s. 8 would appear likely to give a distorted result. Section 9 (1) requires "UVWL" to be ascertained by reference to the valuation made under the Act. Therefore it was submitted that the legislature, in enacting the Act of 1974, gave recognition to the principle that an ordinary valuation under the Act should be made on the assumption that the submerged land was not inundated, and that in that way the Act of 1974 throws light on the meaning of the Act of 1959. However in my opinion the Act of 1974 does not provide any clear indication either of the meaning of the Act of 1959 or of the policy of the legislature with regard to the method of valuation of the submerged land. The reason why the submerged land is to be valued on a notional basis in arriving at "UVSL" for the purpose of the Act of 1974 is that s. 9 (2) of that Act so provides. If under the ordinary principles of law applied by the Valuer-General in making a valuation for the purposes of the Act, or under the special provisions of the Act of 1959, the submerged land should be valued on a notional basis, it would be unnecessary for s. 9 (2) to require it to be valued on that basis. The very provisions of s. 9 (2), on which this argument of the Valuer-General is founded, suggest that the submerged land should be valued in its actual state unless special provision is made to the contrary. The provisions of the Act of 1974 do no more than provide arguments pro and con as to the pre-existing law, and do not resolve the question. I am unable to regard the Act of 1974 as providing a guide to the meaning of the Act of 1959 or the effect of the earlier law.

[49]

Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the Valuer-General shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered pursuant to a provision of this section. The argument based by the Valuer-General on this provision was, first, that the valuation which is presumed to be correct is the figure arrived at as a result of the process of valuation - the unimproved value in dollars and cents - and, secondly, that in order to displace the presumption it is not enough to show that an error in principle was made by the Valuer-General in arriving at the value, because the valuation, though unsoundly based, might nevertheless not be excessive. The word "valuation" is used in the Act in shifting senses, and, as was said in Kilcoy Shire Council v. Brisbane City Council [11] , it "covers both the activity of assessing value and the reduction of that assessment to written form". However, I accept that in s. 13 (7) it at least includes the amount of the valuation, and that there is a presumption that the value in money terms shown by the Valuer-General in his notice of valuation is correct. The question then is whether a court on appeal is bound to accept the Valuer-General's figure as correct unless it is positively established that the true value is lower, or whether it is enough to show that the value was reached as the result of an error in principle. In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13 (7) is rebutted. It is true that the Valuer-General might by coincidence reach the right result by a wrong process of reasoning, but I cannot attribute to the legislature the capricious intention that a valuation shown to have been erroneously made should be presumed correct simply because by mere chance the Valuer-General may have hit on the right figure. If, for example, lands were valued as suitable for high rise city buildings although the law forbad them to be put to that use, or as rich agricultural land when in fact they had been rendered useless by excessive salinity, it would be absurd to hold that the valuation, although shown to be radically wrong, still must be deemed correct. In my opinion once it is shown that a valuation was made by a method fundamentally erroneous the presumption is rebutted. In the present case the presumption of correctness was rebutted once it was held that the submerged land should be valued in its actual state and not in the notional state in which the Valuer-General had valued it. 1. (1971) 124 C.L.R. 60, at p. 67.

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Judgment (72 paragraphs)

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