Department of Environment and Resource Management v Lello [2010] QLAC 1 (2010) 31 QLCR 15

LAND APPEAL COURT OF QUEENSLAND CITATION: Department of Environment and Resource Management v Lello [2010] QLAC 1 PARTIES: Chief Executive, Department of Environment and Resource Management (as successor to the Chief Executive, Department of Natural Resources and Water) (appellant) v. Olive M Lello (respondent) FILE NO.: LAC2009/0003 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 3 February 2010 DELIVERED AT: Brisbane THE COURT: Lyons J Mrs CAC MacDonald, President of the Land Court Mr RS Jones, Member of the Land Court ORDERS: 1. The appeal is dismissed. 2. Each party is to bear his or her own costs of the appeal. CATCHWORDS: STATUTORY CONSTRUCTION – Ss. 2 and 34 of the Valuation of Land Act 1944 – for two notionally separate lots to be created for valuation purposes under the Valuation of Land Act under s.34(2) the buildings located thereon must be able to be lawfully held under separate ownerships – the natural and ordinary meaning of the words used in the statute should be applied. APPEARANCES: Mr S. Fynes-Clinton of counsel instructed by the Crown Solicitor, for the appellant. Mr A Davis, solicitor, for the respondent. -- 1 of 6 -- 2 Background: [1] Pursuant to s.45(1) of the Valuation of Land Act 1944 (VLA), the respondent to this appeal successfully appealed against the appellant’s assessment of the unimproved values assigned to her land located at 55-57 Helsham Street Hervey Bay, more properly described as lot 21 on survey plan 184924, parish of Vernon. [2] For reasons which will be discussed in more detail below, the appellant treated the subject land as if it comprised of two separate parcels, part A and part B. Part A was attributed a notional area of 873m² and the unimproved value assigned to it was $175,000. Part B was attributed an area of 1176m² and the unimproved value assigned to it was $141,000. The respondent’s estimate of the unimproved value of the whole of her land was $158,000. Section 34 of the Valuation of Land Act [3] As already alluded to, notwithstanding that the subject land was one distinct lot for the purposes of the Land Title Act 1944, it was nonetheless valued on the basis that it was notionally comprised of two separate parcels or parts. To achieve this end the appellant sought to rely on s.34 of the VLA which relevantly provides: "34 Lands to be included in 1 valuation (1) Unless the chief executive otherwise directs, there shall be included in 1 valuation – (a) 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; or (b) several parcels of land in the same area which do not adjoin but are worked as 1 holding and used exclusively for the purposes of farming, and are owned by the same person and which, if let, are all let to 1 person. (2) However, any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation and which may respectively be lawfully held under separate ownerships. … (4) In this section— parcel does not include a parcel the unimproved value of which must be discounted under section 25. (emphasis added) [4] A “parcel of land” is defined in s.2 of the VLA to mean: “parcel of land means every part of an area of land 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.” [5] The proceedings were conducted on the basis that the Chief Executive had directed that that Lot 21 be valued as if it were two parcels of land; and that having done so, he was required by s 34(2) to value each parcel separately. -- 2 of 6 -- 3 Proceedings in the Land Court [6] Whether, on the proper construction of s.34 the appellant was required to value the land on the basis of it comprising two separate parcels was the central issue in the proceedings below which proceeded on the basis of an agreed statement of facts. The agreed facts are set out fully in the decision of the learned Member1 and there is no need to repeat them in full. However, of significance are the following facts: i. the relevant date of valuation was 1 October 2007; ii. the subject land comprised of one lot described as lot 21 on survey plan 184924; iii. the registered proprietor of the whole of the land was the respondent; iv. located on the land are two detached residential dwellings each capable of separate occupation; v. if the unimproved value of the land is to be determined on the basis of it being one lot then the unimproved value should be $250,000 in total; vi. if the unimproved value of the land is to be determined on the basis that it comprises two parcels which are to be valued separately, the valuations of the appellant were correct. [7] It was also uncontentious that neither of the two dwellings on the land were let for commercial purposes, the front dwelling being occupied by the appellant and the rear dwelling being predominantly vacant but used on an infrequent basis by visiting family members.2 [8] Under the heading “agreed facts” the following statement also appears3: “… . The applicant is the registered proprietor of a single lot located at 55 and 57 Helsham Street, Point Vernon more properly described as lot 21 on survey plan 184924, parish of Vernon. Formerly, 55 and 57 Helsham Street constituted two separate lots (previously described as lots 1 and 2 on RP 184924). However, the applicant amalgamated the two lots to form one lot within survey plan SP 184924, which was lodged on 11/10/2005. The amalgamation of lots is not something that requires development approval under the Integrated Planning Act 1997. Prior to the amalgamation, 55 and 57 Helsham Street were valued as two separate parcels.” [9] In rejecting the appellant’s valuations the learned Member, essentially on two grounds, found that s.34(2) did not apply in the circumstances of the case. The two grounds were: i. while for the purposes of s.34(2) the dwellings may have been capable of being separately occupied, it could not also be said that they could be lawfully held under separate ownerships.4 1 Lello v Department of Natural Resources and Water [2009] QLC 0108 at para [4]. 2 Ibid at para [13]. 3 At para [1]. 4 At paras [18] to [22]. -- 3 of 6 -- 4 ii. as at the date of valuation the subject land comprised of only one lot and that different (notional) parts of parcels of that one lot could not be held under separate ownerships.5 The Appeal to this Court [10] The case for the appellant is essentially encapsulated in paragraphs [5], [6] and [7] of his notice of appeal. These grounds assert: “[5] The learned Member therefore determined that, in a case where separate parcels do not in fact exist as separate lots registered under the Land Title Act 1994, VOLA, s.34(2) can apply only where the landowner is the holder, as at the date of valuation, of a current development permit for subdivision (reconfiguration) to create the parcels as separate lots registered under the Land Title Act 1994. [6] In doing so, the learned Member erred in law because, on its proper construction, VOLA, s.34 (2) applies to separate parcels, each of which contains a building obviously adapted to separate occupation, if – (a) the separate occupation and use of the buildings would be lawful on the assumption that, as at the date of valuation, the parcels declared by the appellant were separate lots registered under the Land Title Act 1994, regardless of whether separate registered lots were intended to be created, or could in fact be created; or alternatively, (b) as at the date of valuation, an application made by the owner for a development permit for subdivision to create the parcels as separate lots registered under the Land Title Act 1994 would, more likely than not, be successful. [7] On the agreed facts below – (a) both of the tests propounded in paragraph [6] were satisfied; and (b) accordingly, on the proper construction of VOLA, s.34(2), and regardless of which of the tests in paragraph [6] states its proper construction, the appellant acted lawfully in valuing the parcels separately.”6 [11] When the natural and ordinary meaning is given to the relevant sections of the VLA and they are read in context with the other relevant provisions of the Act there is no justification to infer that s.34(2) requires either the assumptions or conclusions advocated by of the appellant. There is nothing in the section which justifies the conclusion that two parcels must be valued separately simply because on each is a building capable of separate lawful occupation and use; or because, at the date of valuation, an application for reconfiguration to create two lots capable of being owned by different persons was likely to be successful. [12] Relevant to this appeal the scheme of s.34(1) is to allow the Chief Executive to issue one valuation for rating and/or land tax purposes where a number of adjoining but separate parcels of land are owned by the same person. An exemption to the requirement for the parcels of land to be adjoining exists where a number of parcels of land owned by the same person do not adjoin but are being exclusively used for farming and worked as one holding. 5 At para [28]. 6 Refer also to the appellant’s written submissions at para 12 and paras 49 to 55. -- 4 of 6 -- 5 [13] Section 34(2) prescribes a limit to the operation of s.34(1)(a). However, before it comes into effect there must already be in existence at the date of valuation the following facts and circumstances: i. parcels of adjoining land, and ii. buildings capable of separate occupation erected on more than one of the separate parcels of land and, iii. each of the buildings is capable of being held lawfully under separate ownership. [14] In this case there are two buildings on a single lot, which are capable of being separately occupied, but that is not enough. Such buildings must be capable of being held under separate ownerships. In circumstances where the subject land consists of one lot owned by one person with indefeasible title under the Land Title Act 1994 it is difficult to see how it could be reasonably said that each of the buildings is capable of being held under separate ownership. That is so notwithstanding that one or both of the buildings may have been capable of being let on a commercial basis. The definition of “owner” provided for in the VLA7 does not affect this conclusion. [15] If, as at the date of valuation, the dwellings are not capable of separate ownership, the fact that they might become capable of separate ownership on the happening of some future event or events (eg subdivision of the land), or the fact that the dwellings might be used separately, is not to the point. To assign to the meaning “held” in the context it appears in s.34(2) the dominant notion of use,8 as is contended for by the appellant, would strain the natural meaning of the expression, “held under separate ownerships”. That expression is plainly a reference to matters of title, not use. The appellant’s contention would also unnecessarily and unjustifiably water down the additional benefit given to the landowner by the amendment to what was then s.14 of the VLA. On 18 December 1953, the words “and which may respectively be lawfully held under separate ownerships” were added to what is now s.34(2). Had Parliament intended the consequences advocated by the appellant it would have been reasonably straight forward to say so in clear and unambiguous language. [16] On more than one occasion Mr Fynes-Clinton, counsel for the appellant, submitted to the effect that the so-called “narrow” construction of s.34(2) contended for by the respondent would effectively limit the operation of s.34(2) to those situations where, as at the date of valuation, there were two separate lots each capable of being separately owned and which had on each of them dwellings capable of being occupied. Or, at the very least where, as at the date of valuation, an application had been made by the owner for a development permit for subdivision 7 s.7. 8 e.g. appellants written submissions at para [23]. -- 5 of 6 -- 6 to create the parcels as separate lots and that application had been lawfully approved pursuant to the Integrated Planning Act 1997. Without expressing a final view about this we are inclined to the view that these are not necessarily offensive conclusions as they sit quite comfortably with the natural and ordinary meaning of the words used in s.34. [17] For the reasons expressed above the appeal must fail. Consistent with the submissions made on behalf of both parties each party is to bear his or her own costs of the appeal. Orders 1. The appeal is dismissed. 2. Each party is to bear his or her own costs of the appeal. P LYONS J CAC MacDONALD PRESIDENT OF THE LAND COURT RS JONES MEMBER OF THE LAND COURT -- 6 of 6 --