Body Corporate for 'The Astor Terrace Car Park' & Anor v Department of Natural Resources and Mines [2002] QLC 94

LAND COURT OF QUEENSLAND CITATION: Body Corporate for “The Astor Terrace Car Park” & Anor v Department of Natural Resources and Mines [2002] QLC 94 PARTIES: Body Corporate for “The Astor Terrace Car Park” Community Titles Scheme and Body Corporate for “The Astor Centre” Community Titles Scheme (appellant/respondent) v Chief Executive, Department of Natural Resources and Mines (respondent/applicant) FILE NOS: AV2001/0642 and AV2001/0643 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 28 November 2002 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Dr NG Divett ORDER: The appeals are upheld, and the unimproved values for rental purposes in respect of AV2001/0642 is determined at $8,000, and for AV2001/0643 is determined at $8,000. CATCHWORDS: Statutory valuation – Valuation of Land Act 1944 – valuation appealed – valuation to a higher figure – whether creates a new case to be appealed. Valuation – Valuation of Land Act 1944 – valuation for rental purposes – value of stratum land – method of valuation – land not rateable or taxable – s.23. -- 1 of 23 -- 2 Practice and Procedure – Appeals – adequacy of grounds – restricted to grounds – approval to respond to matters raised beyond the grounds stated. COUNSEL: Mr G Allan for the appellant/respondent Mr J O’Rourke for the respondent/applicant [1] These matters relate to land at Portman Lane, Spring Hill, and described as Lot 675 on SL 11889, Parish of North Brisbane. The subject land has an area of 19 m² in stratum above Portman Lane, which is located about 560 metres north of the Brisbane GPO. Portman Lane is bitumen sealed with concrete kerbing and channeling. The stratum land connects the fourth floor of the Astor Centre and the fourth floor of the Astor Terrace Car Park. All normal utility services are available to both buildings, and the stratum subject parcel provides pedestrian access only between the two buildings. [2] The subject stratum parcel is part of a gazetted roadway of Portman Lane, and as such is not zoned. However the two connected properties are located within the High Rise Commercial Precinct of the Petrie Terrace and Spring Hill Development Control Plan of the Brisbane City Council Town Plan of 1987, effective at the date of valuation of 1 October 2000. The key issues are the jurisdiction of the Court, the grounds of appeal, use of the land, method of valuation and comparison of sales. [3] On 26 February 2001 the Chief Executive issued two valuations of the subject land for rental purposes at $30,000 (the Astor Centre) and $20,000 (the Astor Terrace Car Park). Following objections the Chief Executive confirmed those two valuations on 21 August 2001 (Exhibit 5). The appellants have now appealed claiming the unimproved value should be $15,000 (the Astor Centre) and $10,000 (the Astor Terrace Car Park). [4] At the hearing on 22 August 2002, the appellants led evidence to valuations of the subject land at $8,000 (the Astor Centre) and $8,000 (the Astor Terrace Car Park). The respondent sought leave to provide evidence of the valuations at $30,000 (the Astor Centre) and $40,000 (the Astor Terrace Car Park). [5] Mr G Allan of counsel, instructed by Russell Henley and Associates appeared for the appellants, calling evidence from Kevin Patrick Walsh, a registered valuer. Mr J O’Rourke, Principal Legal Officer appeared for the respondent, calling evidence from Rasmus Lund, the department registered valuer responsible for determining the valuations. -- 2 of 23 -- 3 The History of the Land – [6] Mr O’Rourke advises that following the issuing of the valuations on 26 February 2001, the appellants separately objected on 2 April 2001, and a conference between the parties occurred in June 2001. While the discussions of that conference were without prejudice, and therefore not for this Court to consider, Mr O’Rourke now advises that it was the Chief Executive’s understanding that there were no valuations required for purposes of rating in respect of the land. [7] Mr O’Rourke also confirms that the two letters of 21 August 2001 (Exhibit 5) were dispatched to the appellants confirming the previous valuations issued, and advising that those unimproved values were supported by market evidence, and were therefore seen as appropriate to other similar properties. Mr O’Rourke notes that the two objections were designated as an objection for rating purposes, and not for rental purposes. However, it is noted that both subsequent appeals to this Court designated the Notices of Appeal (Form 59) as being appeals against “unimproved values for State Land Rental” (Exhibit 1). It was also noted that both parties agree that the value of the subject land for rating purposes is zero. [8] Mr O’Rourke argues that the specific directions in respect of an appeal against an annual valuation are exercised under s.45 of the Valuation of Land Act 1944. He argues that s.45 can only be activated once an objection has been exercised under s.42, and once a decision of the Chief Executive has issued. Mr O’Rourke argues that in the current matters there have been no objections against the valuations for rental purposes, and accordingly, in his opinion, the appellants cannot sustain appeals under s.45 for that purpose. He then argues that if the Notices of Appeal are invalid, then the Court has no jurisdiction to hear the matters. However, he concedes that in respect of the letters of 21 August 2001 refusing the objections by the appellants, those letters were silent in respect of whether they referred to objections against either a valuation for rating purposes, or a valuation for rental purposes. He concedes that to the extent that the letters were sent to the objectors, following any objections against rating valuations, then those two letters had been dispatched in error, when in fact the objection had been resolved. [9] Mr O’Rourke explains that the respondent has exercised his responsibility to value the subject land for rating purposes under the Valuation of Land Act 1944; and rental purposes under the Land Act 1994. He explains that the Chief Executive has issued road licences over the closed road stratum, and has determined the rentals in accordance with s.5(2), s.103, s.183(1) and schedule 6 of the Land Act 1994. He then notes that a “valuation for rental purposes” is determined in accordance with s.14 and s. 15 of the -- 3 of 23 -- 4 Valuation of Land Act 1944. Mr O’Rourke argues further that because the subject stratum parcel is not taxable or rateable, then it is not appropriate to value the land under s.23(5) of that Act. Mr O’Rourke gets support for that conclusion from s.4(1)(h) and s.957 of the Local Government Act 1993. [10] Mr Allan by comparison argues that Mr Walsh has correctly valued the subject stratum parcel under s.23 of the Valuation of Land Act 1944. He argues that Mr Walsh has then apportioned the unimproved value between the two contributing adjoining buildings to which the stratum parcel adjoins. Mr Allan argues that the approach of Mr Lund for the respondent, in seeking to determine the added value of the licences, rather than determine the actual unimproved value of the stratum parcel, is incorrect, and wrong in law. For that reason he contends that Mr Lund’s explanation should be found to be ultra vires, and in point of law a nullity. To support that argument he relies upon Mackay Harbour Board v Valuer-General (1974) 1 QLCR 67, at 74. Mr Allan notes that the definition of “owner” can include an owner who is a licensee (s.7), and the definition of “parcel of land” is defined under s.2. [11] On the evidence I accept that there may have been some confusion in respect of the designations on the two objection forms (Form 58), in noting that the unimproved values objected against at $20,000 and $30,000 were for “rating” purposes. If clearly there was agreement that the subject land was not land to be valued for rating purposes, or that it had a zero value for that purpose, then the outcome of the objection conference was unlikely to have reflected any disagreement between the parties. Certainly the letters of 21 August 2001 suggest that the objections had been refused, and the unimproved values remained. On the evidence I accept the common understanding that these are appeals against the unimproved values for rental purposes (Transcript 49), and this Court has jurisdiction to hear the matters. The Quantum of the Valuations appealed - [12] A key preliminary point for the appellants lies in the approach of the respondent to now seek to lead valuation evidence for the subject parcel to a significantly higher figure than that contained in the original unimproved value determined by the Chief Executive. Mr Allan argues that the appellant should have the confidence that the unimproved values appealed against in the sums of $30,000 (the Astor Centre) and $20,000 (the Astor Terrace Car Park), should now not be usurped by the respondent now leading to the higher value of $40,000 for the Astor Terrace Car Park. He argues that this Court does not have jurisdiction to hear such a variation for the Astor Terrace Car Park matter, and -- 4 of 23 -- 5 contends that the leading to a higher figure by the respondent is in breach of the intentions of s.33, and also s.42(1) of the Act. [13] To support that conclusion Mr Allan draws guidance from the findings of the High Court of Australia in respect of the appropriate interpretation of legislation. He notes that in the matter of Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355, at 390, the Court noted that in determining the purpose of legislation, the language of the relevant provision should be read in conjunction with the scope and object of the whole statute. He argues that guidance has effectively clarified any distinction between questions of mandatory or directory provisions in legislation. [14] Mr Allan contends that the purpose and object of s.42(1) of the Act is to afford an owner the right to object against the valuation determined by the Chief Executive. Any unsuccessful objector is then granted the right to appeal that decision of the Chief Executive under s.45(1). He notes further that s.33 clarifies that the valuation of the Chief Executive so determined is deemed to be correct unless altered or further altered. Mr Allan argues that the power of the Court to amend the valuation under s.66, is effected by operation of the appeal rights conferred under s.45(1) and (9), which directly relate to the amount of the valuation heard and determined by the court once the appeal is activated. In the current matter in respect of the Astor Terrace Car Park that valuation was $20,000, not the $40,000 now contended for by the respondent. [15] Mr Allan further notes that in the event that the Chief Executive determines that the original valuation was found, for some reason, to be incorrect, then there are mechanisms open to him to amend that original valuation under s.28. In the current circumstances it was not clear why the Chief Executive chose not to exercise his discretion to activate s.28, but rather chose to now seek to lead to a higher value through the evidence of Mr Lund. However, he argues that cannot occur once the appeal is activated. [16] Mr Allan also draws attention to the provisions of s.28(A), which does provide for the Chief Executive to alter a valuation once an appeal has been enlivened in the court. He concedes that s.28(A)(d) could relate to the circumstances of the current matter, but notes that the Chief Executive has not chosen to activate that process, and that is therefore not for consideration by this Court. He notes also that the broad intent and purpose of s.28(A) is to allow for the subsequent revaluation processes of annual valuations, while existing matters of appeal still lie before the Court. He contends that for the respondent to now seek to lead to a higher valuation than that appealed against, would be in effect to seek to deprive the court of exercising its jurisdiction. -- 5 of 23 -- 6 [17] Mr Allan also contends that, while it may be reasonable in normal civil litigation for a valuer to review his professional opinion of the valuation of land, in the current matter that is not an appropriate mechanism. He argues that the valuation appealed against is a statutory valuation under the Act, which, under s.33, is deemed correct for the purposes of the Act. He contends then that in respect of the appellant’s need to demonstrate that the respondent’s valuation is incorrect under s.45(4), the appellant has now satisfied that onus by the respondent virtually conceding that figure with the evidence of Mr Lund. Mr Allan argues that the appropriate figure for consideration by the court in respect of the Astor Terrace Car Park is $20,000, not $40,000. He advises that in over 100 years of this Court he could find no evidence where the court allowed an alteration of the determined valuation. [18] Mr O’Rourke agrees that he is not seeking leave to amend the value appealed against, but only that Mr Lund is now leading evidence of a higher figure in accordance with his evidence. He argues that is a procedure regularly followed in this Court, and does not conflict with the previously determined correctness of the Chief Executive’s applied valuation to the subject land. Mr O’Rourke argues that such an approach by Mr Lund is consistent with the spirit of s.66, which affords the court the power to determine the valuation at whatever figure it deems appropriate. He also notes that any potential responsibility for costs resulting from an appeal are constrained by the valuations included on the Notice of Appeal. He agrees further that the power for the Chief Executive to alter a valuation is afforded under s.29 of the Act, but he argues that the fact that the Chief Executive has not exercised s.29 does not preclude him from leading evidence to a higher figure. [19] Mr O’Rourke also draws distinction between the impact of a “clerical” decision as demonstrated by the implementation of the provisions of the Act; and a “considered” decision as demonstrated by Mr Lund in his evidence before this Court. To that end he also distinguishes the findings in Project Blue Sky Inc as much as that matter dealt with an inconsistency between a “general” provision and a “specific” provision in legislation. He argues that Project Blue Sky Inc can be relied upon in circumstances where the “specific” provisions cannot always be relied upon against the more “general” provision, where these two are in conflict. He argues that situation does not occur in the current matter, as there is no inconsistency between the intentions of s.66 and the other relevant provisions of the Act. [20] While Mr O’Rourke does not specifically direct me to his precedents for his distinction between a “clerical” process, as denoted by the administrative procedures of the annual -- 6 of 23 -- 7 valuation; and the “considered” processes required for presentation to the court; it could be influenced by the findings of the High Court in Kilcoy Shire Council v Brisbane City Council (1970-71) 124 CLR 60, at 66. In that matter Barwick CJ addressed the issue of what constitutes the meaning of “the valuation” of land under the Act, concluding that the meaning of the words “the valuation” in the context of the Valuation of Land Act involved the process of valuation, including its dates of assessment and operation. However there is nothing of relevance directly resting upon that conclusion in the current matter. [21] Mr O’Rourke also draws some support from Project Blue Sky Inc in a separate minority decision where Brennan CJ said at page 366: “However, the interests of persons concerned in the litigation and the assumptions made in the rival submissions cannot divert the court from its duty to construe the statute. ‘Judges are more than mere selectors between rival views’, said Lord Wilberforce in Saif Ali v Sydney Mitchell & Co (1980) AC 198 at 212, ‘they are entitled to and do think for themselves’.” That opinion from Brennan CJ is consistent with the majority decision in respect of the wider view for determining the validity or otherwise of legislation in a particular matter. [22] Mr O’Rourke argues that the logic for the Court in determining the relevance of s.66 in relation to directions of the other provisions, must be viewed in context if one is to accept Mr Allan’s argument. If it was to be accepted that Mr Lund could not argue for a higher unimproved value to that previously determined, then the whole process of fair equity to both appellant and respondent would be usurped. In such cases the appellants would know that they could never be worse off than the value established initially. He argues that would really emasculate the powers under s.66, and therefore must be incorrect. [23] To support the appellant’s applications to amend their estimates of the valuation from $15,000 (the Astor Centre) to $8,000; and also from $10,000 (the Astor Terrace Car Park) to $8,000, Mr Allan relies upon a decision of this Court in Schokman v Chief Executive, Department of Natural Resources (1998) 19 QLCR 386. In that matter the learned Member said at page 389: “In my opinion, section 45 does not prevent an appellant from leading evidence of valuation to an amount lower than that stated in the notice of appeal. Nor does it prevent the Court from determining that the unimproved value of the land was an amount lower than the amount stated there. The authorities support that conclusion. Important also is section 66 of the Act which empowers the Court to reduce or increase the amount of the valuation in dispute to the extent necessary, in the Court’s opinion, to determine the amount correctly under, subject to and in accordance with the Act. The case will be decided on that basis.” -- 7 of 23 -- 8 [24] In the Schokman matter the Member noted the findings of the learned Member Mr Smith (later President), who, in the matter of Brooker v The Valuer-General (1966) 33 CLLR 159, at 165 followed the findings of the Full Court of the Supreme Court in The Australian Pastoral Company Limited v The King (1919-1921) 8 CLLR 311, wherein Lukin J said at page 327: “We think that the document of valuation, when made and furnished by the Minister, is not subject to amendment, particularly when, as in the present case, such valuation correctly recorded the Commissioner’s opinion at the time. The inability to make such amendment does not prevent the Commissioner, any more than it would the tenant in regard to the tenant’s valuation, from offering evidence at variance with the valuation so made. The Court, in our opinion, is not limited to its powers by the amounts set out in such valuations, but may reassess, at any amount in excess of the Commissioner’s valuation or less than the tenant’s valuation, in accordance with what they think reasonable and proper.” [25] In the Brooker matter Mr Smith said at page 165: “This proposition it seems to me is the basis of what has become the accepted practice of allowing parties to call evidence of valuation at a figure at variance with that contained in any document filed in the Court prior to the hearing.” [26] The Member considered the findings of Trustees of the Methodist Church of Australasia v Sydney Municipal Council (1932-34) NSWLG 18. In that matter Pike J found that the power conferred on the Land and Valuation Court of New South Wales by s.16 of the Land and Valuation Court Act, to make amendments, should not be exercised so as to permit a party to make an entirely new case, and therefore a Notice of Appeal claiming that the valuation is excessive should not be amended by adding the ground that the land is not rateable. The principal point in that conclusion of Pike J was that the original appeal notice should not be overtaken by an amendment that would in effect make a new case to be appealed against. (page 19). That would appear to have a similar transitional impact of the proposal by the respondent in the current matter. [27] If I then turn to the implications of s.33 of the Act, I note that the legislation directs: “33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the Chief Executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.” Any reading of those words would suggest that the purpose of declaring the status of the valuation is to provide assurance for users of the valuation so determined, for whatever purpose the valuations are to be adopted. While the wording directs that the valuation is -- 8 of 23 -- 9 deemed to be correct, in the absence of evidence to the contrary, it acknowledges that an error may be possible. [28] Evidence is regularly given that valuations may often be determined in a conservative manner, where there exists some element of doubt about the reliability of the determination. (Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited & Ors (1946-47) 74 CLR 358, at 373. In such circumstances it may also be relevant for a valuer, after reconsidering his valuation, to seek to amend the final figure that he now leads to the Court. That approach, in my opinion, is not inconsistent with the intentions of s.33. [29] However, in saying that a valuer’s evidence may seek to lead to a higher figure than that previously adopted by the Chief Executive, does not lead to any conclusion that such a variation may change the very basis of the appeal, and in effect to create a new case to be responded to by the appellant. That would be in contravention of principles adopted by the courts. [30] In accepting Mr Lund’s evidence to a valuation at a higher figure than that sanctioned by s.33 of the Act, I am conscious that it is not the role of this Court to seek to investigate the fairness or correctness of the statutory valuation previously determined. That was clarified by the Land Appeal Court in BT Dillon v Valuer-General (1986-87) 11 QLCR 231, at page 233. [31] On the evidence before me I find that it is not for the Court to amend the valuation of the Astor Terrace Car Park from $20,000 to $40,000, and the appellant continues to appeal that figure at $20,000. However I accept that Mr Lund has the responsibility to ensure that the evidence he now provides to the Court as a professional registered valuer reflects his true opinions and conclusions as to the unimproved value of that parcel. [32] If in the end the amount then argued by Mr Lund is seen to be so inconsistent with the previous valuation of that parcel as determined, that is a matter which more appropriately might activate the Chief Executive in his responsibility to ensure that fair and equitable valuations are provided for rating and taxing purposes. That is the stated purpose of the Valuation of Land Act 1944. The outcome of that conclusion will depend upon the circumstances of each individual matter. The Nature of the Land – [33] As noted previously the subject land is a stratum of airspace above Portman Lane, connecting the fourth levels of each of the subject lands of the Astor Centre and the Astor Terrace Car Park. The purpose of the subject parcel is only to provide pedestrian access -- 9 of 23 -- 10 between the two buildings. It was created following applications by the two Bodies Corporate for the granting of road licences, in accordance with the agreement between the two parties of 15 September 1993. The road licences commenced on 11 February 1994, and are subject to annual rental payments to the Government, based upon provisions of The Land Act 1962 (now replaced by The Land Act 1994). The road licences are terminable at the discretion of the Minister or by the Governor in Council. [34] The conditions of the road licences hold each participating owner of the two buildings jointly and severally responsible for the maintenance and safe operation of the stratum viaduct; and in the event of either building being redeveloped not in conjunction with the other building, the licences shall be terminated. The result of those conditions is that each licence holder is dependent upon the other for the condition and existence of the stratum licence, both under a performance bond to the Minister. [35] The stratum is directly connected to an easement for access purposes in the Astor Centre building (Easement No. K 655134) which allows right of way through the Astor Centre building to Upper Edward Street. That easement access is in favour of the adjoining Astor Terrace Car Park, which contains office accommodation on the fourth level of that building. The tenants of the Astor Terrace Car Park also have access to the directory board in the ground floor foyer of the Astor Centre. The granting of that easement followed orders of the Supreme Court of Queensland on 3 May 1991 to that effect. [36] It is agreed that the right to use the subject stratum viaduct is restricted jointly to the tenants of the two buildings; and it is not as of right open to public thoroughfare. To demonstrate that right to restrict public use, and also in the interests of security, the joint tenants lock the subject viaduct in the early hours of the morning. But during other hours members of the public freely use the viaduct as a means of access to and from the car park. The Astor Centre is developed as a commercial office building with a total gross floor area (GFA) of 4,136 m²; and the Astor Centre Car Park contains some offices on level 4 with direct access to the subject viaduct, and the balance of the building is car parking spaces. The total GFA of the Astor Centre Car Park building is 8,675 m². Mr Lund confirms that the office space on level 4 of the car park (Unit 228) has been divided into two separate office units. [37] The highest and best use of the subject stratum viaduct is agreed to be for its current use as a pedestrian overpass linkage. It is agreed also that both buildings can be owned and operated separately; and that at present there is not total common ownership of the two parcels, which are two separate freehold strata parcels. -- 10 of 23 -- 11 The Use of the Land – [38] There is agreement between the valuers in respect of the use of the subject parcel as a pedestrian way; but divergence in respect of how they see that use impacting the value of the land. Mr Walsh sees the existing joint use of the stratum access in similar manner to the rights conferred by a joint reciprocal easement for access purposes. He draws analogy with a shared access strip where both parties share the benefits and the liabilities of that access. To that end he sees the benefits of the shared access to be that the cost of construction and maintenance are the responsibility of the two parties. However he conditions those benefits with the lack of freedom of single ownership, where an owner has complete power to use the land in any manner that he chooses, within the current constraints of local government. [39] Mr Walsh therefore sees the joint “ownership” under licence of the subject stratum as containing both the benefits of shared costs of operation and maintenance, but conditional upon the risk that the other party may not meet its obligations under their licence. He argues that would be acknowledged in the market place, and the value of the subject stratum would reflect a total value something less than what would be paid where the stratum land was held in single ownership. He argues that, while each party has total use of the stratum land, subject to the right of passage by the other party, that use is not exclusive use. He argues that the marginal impact of the lack of exclusivity would depend upon whether the impact was seen as a detriment or a benefit. In the current matter he argues that it was a detriment because of the lack of certainty of continuity of use. In other words, either owner would not have full control of his destiny. [40] Mr Lund concedes that such a possibility would exist in respect of the licences. However he notes that the owners of the car park has a vested interest in maintaining the licence agreement, particularly in respect of the two offices on level 4 of that building. For that reason Mr Lund discounts the risk accordingly. Comparison of Sales – [41] Mr Walsh relies upon four sales in comparing the Astor Centre (his parent parcel). The sales adopted he argues are not directly comparable to the Astor Centre, but reveal the following comparisons: -- 11 of 23 -- 12 Sale Site Value Comparison Sale 1 - 93 Leichhardt Street $1,683 per square metre Inferior Sale 2 – 163 Leichhardt Street $1,476 per square metre Inferior Sale 3 - 466 Upper Edward Street $1,263 per square metre Inferior Sale 4 – 413 Upper Edward Street $2,556 per square metre Superior From those comparisons Mr Walsh concludes a site value rate of $2,089 per square metre for the Astor Centre, similar to Mr Lund. [42] Mr Lund relies upon three sales, concluding the following comparisons: Sale Site Value Comparison Sale 1 – 466 Upper Edward Street Sale 2 – 448 Upper Edward Street Sale 3 – 292 Boundary Street $1,260 per square metre $741 per square metre $840 per square metre Superior Inferior/larger Inferior/larger From those comparisons Mr Lund concludes site value rates of $2,090 per square metre for the Astor Center, and $1,100 per square metre for the Astor Terrace Car Park. On those comparisons there is no difference between the valuers in respect of the base rate for adoption of the two methods of valuation. The Method of Valuation - [43] Mr Walsh seeks leave to amend the appellant’s grounds of appeal, in respect of the valuation of the Chief Executive being “a nullity and of no effect”. In the event that the Court finds that the valuation should not be undertaken in accordance with s.23 of the Act, as now argued by the respondent, Mr Allan argues that in order to allow the appellant to respond to the argument of the Chief Executive, the grounds of appeal should be amended. Mr Allan concedes that the burden of proof lies with the appellant, and that is mandatory in respect of the grounds of appeal. (Jayar Pty Ltd v The Valuer-General (1984-85) 10 QLCR 132, per the President at 134). [44] However Mr Allan distinguishes Jayar in as much as that matter deals with an argument by the appellant which was not confined to the grounds of appeal. He notes that in the current matter the issue of the impact of the stratum being “not rateable or taxable”, was raised by the respondent in his case. Mr Allan argues that the preliminary issue of whether the stratum should be determined on that basis was a live issue raised by the -- 12 of 23 -- 13 respondent, to which the appellant should be allowed to include that as one of their grounds of appeal. To support that argument Mr Allan seeks guidance in Amstel v Chief Executive, Department of Lands (1997-98) 17 QLCR 27, at pages 43 to 46. Mr Allan argues that it is not appropriate for the respondent to argue that the land is seen to be not “rateable or taxable” for considerations under s.23; but that it is then assessed as “rateable or taxable” for considerations under ss.14 and 15 of the Act. [45] If I refer to Amstel I note that in that matter the learned Member considered the matter of whether the grounds of appeal were wide enough to include considerations of the property for use either as “a single dwelling house” or for purposes of “farming” under s.17 of the Act. In the event the Member found that the original grounds of appeal could be read to include both uses; but in his deliberations he noted, among others, the findings of the Land Appeal Court in Franklin v The Valuer-General (1978) 5 QLCR 181. In that matter the Land Appeal Court said at page 184: “It seems to us that it is not competent for an appellant before us to add to his grounds of appeal as initially contained in his notice of appeal to the Land Court. If he were permitted to do so he would be flouting the mandatory provisions of the Valuation of Land Act previously enumerated. In simple terms in the conduct of his appeal before us an appellant remains limited to the grounds of his original notice of appeal to the Land Court. On the other hand, the Valuer-General is not limited to the nature of the reply he makes to an appellant’s appeal. He may decide to restrict his case to the specified grounds of appeal, or as more often happens, he places before the court the whole basis of the valuation appealed against and in so doing endeavours to answer the specific grounds of appeal. The latter procedure is more conducive to satisfying an appellant’s dissatisfaction, and if in so doing matters other than those raised in the appellant’s grounds of appeal emerge, it would seem unfair if the court denied cross- examination on them. At the same time, as the Act is presently drawn, the court is not an investigating tribunal and we do not see how it could uphold or dismiss an appeal on grounds other than those specified in the appellant’s notice of appeal.” [46] I believe that finding is relevant to the circumstances of the current matter. On that basis I refuse the application to amend the grounds of appeal, as the Court has no jurisdiction to do so. However it is open for the appellant to respond to the Chief Executive’s argument in respect of whether the matter of the nature of the stratum, as seen as not rateable or taxable, is sufficient to exclude considerations of its unimproved value under s.23 of the Act. [47] In explaining his method of valuation Mr Walsh advises that his investigations of the development of the Astor Centre and the Astor Terrace Car Park, reveal that they were -- 13 of 23 -- 14 built initially by the one owner, under an agreement from the Brisbane City Council that the car park building would provide off-street parking for the Astor Centre building. There is no parking places in the Astor Centre. On that basis Mr Walsh argues that had there not been a planning requirement for parking for the Astor Centre, then the Astor Terrace Car Park may not have been constructed as a car park. On that basis Mr Walsh sees the Astor Centre as the parent parcel for the stratum viaduct joining the two buildings. [48] In respect of the impact of Easement No. K 655134 within the Astor Centre, Mr Allan argues that was in existence from 1991, well prior to the creation of the road licence for the stratum viaduct in 1994. He argues that the stratum viaduct itself is unencumbered by the easement, and should not be considered in respect of the value of the stratum parcel. Mr Allan argues further that if the valuation is undertaken under s.23(2)(c) as stratum, it is assumed that any effect of the easement access to the stratum parcel is to be accepted as continuing to be used in making the valuation. [49] Mr Walsh explains that his approach has been to value the stratum parcel of area 19 m² with reference to the land to which the stratum is attached; and in that point he is in common with Mr Lund. Mr Walsh further agrees with Mr Lund in respect of the unimproved value of the land parcels to which the stratum attaches; and also in respect of the discounting of that unit rate per square metre to apply for the nature of the stratum parcel. Both valuers accept guidance in that regard in a sale of “Pacific Fair Shopping Centre” at Broadbeach, Gold Coast, where stratum was seen to reflect only 40% of the ground level value. A similar conclusion was also agreed around the understanding of that approach in an historical agreement based upon the then understanding of a stratum parcel, without the benefit of a ground level frontage at a shopping centre in Toowong (Yu Feng Pty Ltd and Another v Chief Executive, Department of Natural Resources (AV99-521 and 522) 22 March 2001, unreported, at page 7. In the Toowong matter a factor of 55% had been applied. [50] However in the current matter there is no disagreement between the valuers in respect of the applied rate of 40% of the ground level rate per square metre. Mr O’Rourke questions the direct comparison of that stratum at Pacific Fair, noting that stratum parcel connected the Pacific Fair site to a normal access road. He argues that the 40% adopted in that situation reflected factors which are not directly comparable in the subject stratum parcel. He notes for example that the stratum at Pacific Fair relates to the stratum that is now owed by Pacific Fair, while the subject parcel is merely a road licence. However it is -- 14 of 23 -- 15 noted that under s.14(1) of the Act any land that is not granted in fee simple (such as the licences), are to be taken as land granted in fee simple for purposes of valuation. [51] Mr Walsh values the subject parcel as if it were freehold, and then apportions the value on the basis that it is held under two separate road licence agreements. In respect of apportioning the value of the stratum parcel Mr Walsh has seen equal benefits and liabilities, and adopts a distribution of 50% to each adjoining parcel, recognizing the lack of any exclusive use by either building. [52] Mr Lund disagrees with that approach arguing that there are in effect two parent parcels, not just one parcel, as both buildings benefit from the stratum viaduct. He rejects Mr Walsh’s approach of adopting 40% of the ground level rate of the parent parcel, as he argues that does not recognize the benefit accruing to both parcels as a result of improved access. Mr Lund rejects Mr Walsh’s approach which he argues would just reflect the value of the 19 m² stratum in space, without providing access between the buildings. [53] Mr Lund seeks to value the added value that the two licences bring to their respective attached buildings. He initially allows a premium on the car park site of 2.5% for the benefit of the additional side access provided by the viaduct. However, recognizing the benefit inherent in the access to Upper Edward Street by the easement through the Astor Centre, he increases that premium to 5% for the additional access to the car park, and to the Astor Centre. On those bases he then applies the following: Factors Astor Centre Astor Terrace Car Park Area 615 m² 1,740 m² Rate $2,090 $1,100 Value adopted $1,410,000 $1,915,000 Additional access at 5% $70,500 $95,750 Value of stratum at 40% $28,200 $38,300 Adopt $30,000 $40,000 [54] Mr Walsh values the stratum parcel on the basis of a hypothetical sale in accordance with the Spencer test, where it is agreed that the two most likely possible purchases would be the current contiguous two building owners. He argues further that because of the greater benefit to the Astor Centre of direct access to the car park building, he considers that the Astor Centre was likely to be the successful hypothetical purchaser. That supports his argument that the Astor Centre should be the parent parcel for the stratum land assessment of value. -- 15 of 23 -- 16 [55] Mr Walsh argues that what has to be assessed in these matters is the unimproved value of a parcel of 19 m² of stratum located above Portman Lane. He agrees that there are two interests in the land, and for the purposes of rental assessments there are two assessments to be made. However he argues that the object of the determination of unimproved value of the subject stratum is to determine the stratum as if it were freehold under the Act. He then apportioned the unimproved value of 50% each way, because they have equal interest in the stratum. On those half interests in the unimproved value he argues the rents should then be determined. [56] Mr Walsh notes that if Mr Lund’s calculations are correct, then a value of the stratum parcel attached to the Astor Centre land, would reflect a rate of $2,105 per square metre. He compares that to an agreed rate of $2,080 per square metre for the site value of the total ownership of the Astor Centre, with full potential for development. He argues that if that rate is then adjusted to reflect the agreed factor of 40% for stratum land, then a comparison for the stratum parcel at ground level would reflect a rate of $5,263 per square metre. He argues that is totally inconsistent with the market rate per square metre for lands in that locality. [57] Mr Walsh also chAllanges Mr Lund’s opinion of a 5% increase for additional side access on either the Astor Centre or the Astor Terrace Car Park sites. He argues that if the factor of 5% of the Astor Terrace Car Park value ($1,915,000) was applied to the stratum attached to that site, then the value for the stratum at ground level would reflect a rate of $5,039 per square metre, compared to the agreed site rate of that property at $1,100 per square metre. Mr Walsh argues that those comparisons for a restricted use stratum, for pedestrian access purposes only, is totally out of line with the market place. On a similar basis Mr Walsh also rejects Mr Lund’s use of a premium of 2.5% for side access, because of the existence of the easement in the Astor Centre. He feels that stratum adds little additional benefit for access purposes to the unimproved value of the stratum parcel, as the Act directs under s.23(2)(c) and (d) that such existing easement access is to be considered as extant at the time of valuation. [58] Fundamental to the difference between the valuers is the approaches adopted in their valuations. Mr Walsh has applied s.23 of the Act, while Mr Lund has applied ss.14 and 15, as outlined previously in paragraphs [9] and [10]. Mr Walsh’s Approach [59] Mr Walsh argues that if the stratum was at ground level, and was freehold, and attached to the parent property at the Astor Centre, then, in his opinion, the land would have the -- 16 of 23 -- 17 same pro rata rate of value as applicable to the Astor Centre. It is agreed that the Astor Centre has an unimproved site value at the rate of $2,089 per square metre. By applying the agreed discounted rate of 40% of that rate for the nature of the stratum, in accordance with the comparable stratum at Pacific Fair, Mr Walsh concludes an unimproved value of the subject stratum of area 19 m² at $15,876.40, and adopts $16,000. He argues that reflects the unimproved value of the whole of the stratum as if it were held in single ownership as freehold land. He notes that under s.14(1) the licensed subject stratum is to be valued as if it were freehold. [60] Mr Walsh seeks guidance from the Act in respect of the valuation of stratum in s.23, which defines “stratum” under s.23(5), and the method of valuing the “stratum” under s.23(2) and (3). In that respect I note s.23(5) states: “23.(5) In this section – ‘stratum’ means a part of land consisting of a space or layer below, on, or above the surface of the land, or partly below and partly above the surface of the land, defined or definable by reference to improvements or otherwise, whether some of the dimensions of the space or layer are unlimited or whether all the dimensions are limited, but refers only to a stratum rateable or taxable under any Act.” Mr Lund’s approach [61] It is Mr O’Rourke’s argument that because the stratum has been agreed to be not rateable under the provisions of the Local Government Act 1993, then s.23 of the Valuation of Land Act 1944 does not apply in the current matter. To support that conclusion he notes that under s.4(1)(h) of the Local Government Act 1993, an “owner” is defined to include a “licensee” under the Land Act 1994. He notes further that under s.957(1)(a) of the Local Government Act 1993 all land is deemed to be rateable, except relevantly, “vacant State land”, and that “State land” is defined to mean “unallocated State land” within the meaning of the Land Act 1994. (Schedule 1, page 712). The definition of “unallocated State land” under Schedule 6 of the Land Act 1994 excludes, among others, lands which are subject to a licence issued by the State. However s.957(1)(f) of the Local Government Act 1993 exempts lands under an act or regulation made under the Local Government Act 1993. [62] The definition of “land” under Schedule 1 of the Local Government Act 1993, is described as: “land includes – (a) freehold land; and (b) a holding; -- 17 of 23 -- 18 (c) a mining claim”. That is further clarified in respect of the definition of “road” under that Schedule as: “road means – (a) an area of land dedicated to public use as a road; or (b) an area that is open to or used by the public and is developed for, or has as one of its main uses, the driving or riding of motor vehicles; or (c) a bridge, culvert, ferry, ford, tunnel or viaduct; or (d) a pedestrian or bicycle path; or (e) a part of an area, bridge, culvert, ferry, ford, tunnel, viaduct or path mentioned in paragraphs (a) to (d); but does not include a State controlled road under the Transport Infrastructure Act 1994.” Mr Allan confirms that the definition of what is rateable land relevant to the current matters is to be found in s.47(1) of the City of Brisbane Act 1924. However those provisions closely parallel the provisions under s.957 of the Local Government Act 1993, and provide no further guidance in this matter. [63] Under those definitions I would agree with Mr O’Rourke that the subject stratum, which is to be used for pedestrian purposes over the dedicated roadway of Portman Lane, is described as “road” and is not as “land” for rating purposes. However that is not a matter for my consideration in this matter; but rather whether such a classification as not “rateable or taxable” precludes consideration of the parcel under s.23 of the Valuation of Land Act 1944. [64] I turn then to the matter of whether the general intentions of the Land Act 1994, in respect of the valuation of stratum, would exclude the subject stratum from considerations under s.23. In that respect I note that the meaning of “land” under s.5(2) includes stratum above land, but it is silent in respect of stratum above roads although “road” is taken to be an area of land dedicated to public use as a road. The grant of stratum cannot be for freehold purposes (s.14(3)), and a licence may issue over a temporary closed road (s.103(1)). The rent payable for any licence is assessed under s.183(1) which specifies that it is “the amount calculated by multiplying the amount of the most recently made valuation for rental purposes by the rate prescribed under the regulation”. [65] A “valuation for rental purposes” has the same meaning as in the Valuation of Land Act 1944 (Schedule 6), which is contained in s.15(1) of that Act, and which relevantly states: -- 18 of 23 -- 19 “15.(1) The value to be used to determine the rent applying to a lease, licence or permit under the Land Act 1994 is the unimproved value under this Act. … (3) For the purposes of a valuation for rental purposes, if the conditions of the lease, licence or permit are not restricted to farming or to a use as a single dwelling house as defined in s.17(2) – (a) section 17(1) does not apply; and (b) in the case of land other than land used for farming – the physical state and condition of the land at the start of the lease, licence or permit (other than improvements within the meaning of the Land Act 1994) is to be considered.” The meaning of unimproved value is defined in s.3 of the Act. [66] If I look then at s.23 of the Valuation of Land Act 1944, I note that states relevantly: “23.(1) Subject to any other Act the Chief Executive may make a valuation of the unimproved value of any stratum or volumetric lot in accordance with this section. (2) The unimproved value of a stratum or volumetric lot is the capital sum which the fee simple of the stratum or volumetric lot might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require assuming – (a) that the improvements (if any) within the stratum or volumetric lot and made or required by the owner or the owner’s predecessor in title had not been made; and … (c) that means of access to the stratum or volumetric lot may be used and may continue to be used, as they were being used, or could be used, on the date to which the valuation relates; and (d) that lands outside the stratum or volumetric lot, including land of which the stratum or volumetric lot forms part, are in the state and condition existing at the date to which the valuation relates and, in particular, without limiting the generality of this assumption, that where the stratum or volumetric lot consists partly of a building, structure, or work or is portion of a building, structure or work, such building, structure, or work, to the extent that it is outside the stratum or volumetric lot, has been made.” [67] The question raised by Mr Allan is whether the general intent of the legislation should be adopted when interpreting s.23 in accordance with guidance provided by Project Blue Sky (supra). In considering such a matter I note that s.23 is the only specific reference to the -- 19 of 23 -- 20 valuing of “stratum” in the Valuation of Land Act 1944. While s.14 of the Act provides the mechanism for determining the unimproved value of any land that is not granted in fee simple, or upon a tenure which is subject to a restriction such as a licence, it does not, in my opinion, preclude consideration of the subject stratum under s.23. [68] In adopting that principle I believe that the use of the words “the Chief Executive may make a valuation” in accordance with s.23(1) of the Act, can be taken to mean that authority is conferred upon him to do so, and it should be exercised if the circumstances are such as to require it to be done. That would follow guidance provided in Finance Facilities Pty Ltd v The Commissioner of Taxation of the Commonwealth of Australia (1970) 127 CLR 106, where the High Court, per Windeyer J said at page 134: “This does not depend on the abstract meaning of the word “may” but of whether the particular context of words and circumstance make it not only an empowering word but indicate circumstances in which the power is to be exercised – so that in those events the “may” becomes a “must”. Illustrative cases go back to 1663: … But I select one other reference out of a multitude : Macdougall v. Paterson (1851) 138 E.R. 672. (4). There Jervis C.J. said in the course of the argument at page 677: ‘The word “may” is merely used to confer the authority : and the authority must be exercised, if the circumstances are such as to call for its exercise’. And, giving judgment, he said at page 679: ‘We are of opinion that the word “may” is not used to give a discretion, but to confer a power upon the court and judges ; and that the exercise of such power depends, not upon the discretion of the court or judge, but upon the proof of the particular case out of which such power arises.’” [69] While the discretionary nature of the word “may” is explained in s.32CA of the Acts Interpretation Act 1954, that discretion should be exercised in accordance with the intended purpose of the legislation. I am also directed to the findings of the High Court in Ward v Williams (1954-55) 92 CLR 496, where the Court noted that where a discretion to exercise a power is signaled by the legislation, there is a presumption that the discretion will be exercised. (Page 505 to 506). I note also that that principle was widely discussed by the Land Appeal Court in Stubberfield v Valuer General (1992-93) 14 QLCR 490, at 496, noting with approval Tasker v Fullwood (1978) 1 NSWLR 20, where the Court of Appeal summarized the statutory intentions of the word “may” at pages 23 to 24. The thrust of all those matters suggest that there is nothing to prevent the Chief Executive from exercising his discretion under s.23 to value the stratum road parcel for rental purposes; and in the event, he has an inferred responsibility to do so. [70] In seeking to further clarify why s.23 is the appropriate mechanism for valuing the stratum parcel in this matter, I am also directed to guidance from the Land Appeal Court -- 20 of 23 -- 21 in Caltex Oil (Australia) Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 435. In that matter the Court reminds us that the Valuation of Land Act assumes the existence of a valuation process, subject to “modifications prescribed by the Act”. (page 458). [71] In respect of Mr Allan’s argument that Mr Lund’s valuations should be declared “nullities”, as a consequence of failure to adopt s.23 as the valuation methodology (see paragraph [10]), I distinguish the findings of Mackay Harbour Board (supra). In that matter the former Valuer-General was found to have acted in excess of his powers in valuing parts of the subject lands for rateable purposes which had exemption from ratability conferred by the Local Government Act 1936. Those circumstances do not occur in the current matter. [72] In seeking to understand the purpose of the intentions of s.183(1) of the Land Act 1944, in respect of the most recently made valuation for rental purposes, I accept that the language, scope and object of the whole statute should be considered. (Project Blue Sky at page 391). To that end, if the definition of “stratum” as included in s.23(5) of the Valuation of Land Act 1944, which excludes stratum above land unless it is rateable or taxable, is the only definitive direction for any stratum under that Act, then the purpose of valuing a stratum above roadway under the Land Act 1944 would seem to be inadequately provided for. [73] Clearly the understanding of the words “rateable or taxable” refers to the compulsory imposition of a contribution imposed by a sovereign authority upon the general body of its citizens; as distinct from an isolated levy upon an individual, such as the licences or services granted in accordance with the subject stratum. (Leake v Commissioner of Taxation (State) (1934) 36 WALR 66, at 67 per Dwyer J). The subject licences are clearly not rateable or taxable lands. But does that understanding of stratum above land distinguish specifically the process of valuing stratum above road? In that regard I note that in interpreting the provisions of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred. (Acts Interpretation Act 1954, s.14A). [74] On balance I believe that the valuation for rental purposes of a stratum above a road, as provided for under the Land Act 1994, should be considered under each of ss.14, 15 and 23 as applicable in the circumstances. On that basis I accept that the existing Easement No. K655134, providing access to Upper Edward Street thought The Astor Centre, should be considered as existing at the date of valuation under s.23(2)(c). [75] In considering that stratum parcel as if it were a fee simple parcel for purposes of valuation, the hypothetical sale of that parcel is to be seen as including any restrictions, -- 21 of 23 -- 22 and benefits, that would be brought into play as if it was an actual fee simple parcel. The enjoyment of access to Upper Edward Street, and also to the car parking, are therefore benefits that would be extant in considering the value of the stratum pedestrian way. (Sydney City Council v Valuer-General (1956) LGR 229, per Sugerman J). [76] The more important issue I believe is really the method adopted in valuing the actual stratum parcel in the current matter. In that regard I accept Mr Walsh’s approach of valuing the stratum as if it were a freehold parcel of 19 m² in its location across Portman Lane, and attached to the two buildings. I also accept Mr Walsh’s conclusion that in any hypothetical sale of such a stratum parcel, the most likely potential purchaser would be the owners of the Astor Centre. As a central City office buildings without on-site parking, there would be considerable incentive to maintain the pedestrian link to the car park. While the stratum pedestrian link to Upper Edward Street is an advantage to the car park land, it continues to have good direct access from Portman Lane and Astor Terrace. The history of development of the two buildings would suggest that the Astor Centre would have the greater need for the continued pedestrian access connection. [77] In considering Mr Lund’s approach of valuing the stratum in its role of providing increased access to either adjoining parent parcel, I accept that such a link would be seen as a positive influence. However, in seeking to determine such a value in the concept of the additional added value such a pedestrian link provides, I believe that those added values should relate to the adjoining parcels themselves, rather than to the stratum parcel itself. [78] In respect of Mr Lund’s reliance upon his experience as a registered valuer in applying an additional added value of 5% for the enhanced site access to Portman Lane, I accept that it is appropriate for Mr Lund to so assume that experience. However, while the judgment of an experienced valuer is a legitimate guide to his professional opinion, that should be supported by evidence in the market place. (Nutting v Chief Executive, Department of Natural Resources (1999) 20 QLCR 29, at 36; and Santos Limited v Valuer-General (1988-89) 12 QLCR 231, at 236). [79] I turn then to the appropriate rate per square metre to apply to the stratum parcel. If the advantage of additional pedestrian side access is seen to add value to either of the two parent parcels attached to the stratum, then the value of the actual stratum itself should be seen in the context of the market value of the parcels to which it is attached. On the basis that the Astor Centre has a higher rate ($2,089 per square metre) than the Astor Terrace Car Park ($1,100 per square metre), I accept that the stratum parcel should be valued consistent with the rate of $2,089 per square metre. As that rate reflects a freehold title -- 22 of 23 -- 23 land parcel with full rights of development and use, it would seem unlikely that any purchaser would pay anything higher than that rate for a restricted access strip in that location. On the evidence I accept that a rate of 40% of that value would reflect the value of the stratum at $16,000. [80] The question then to be addressed is whether such an unimproved value of $16,000 should be applied to each of the two road licences applicable to each of the parent parcels. In that regard I believe that Mr Walsh’s opinion that some apportionment of that value should be applied to each of those parcels is correct. On the evidence of the actual road licence agreements, either parent parcel is dependent upon the goodwill of the other. Neither parent parcel has total and unfettered use of the stratum access, and, in my opinion, the value to either parent parcel is something less than what it would be if the stratum parcel was an exclusive licence. The fact that some benefits do accrue to each by virtue of the responsibility to share any costs associated with the licences, does not, in my opinion, outweigh any risk associated with any lack of total control of the stratum access. On balance I feel Mr Walsh has correctly apportioned that value to each at 50% of the total value of the stratum parcel. On that basis unimproved rental values of $8,000 should be applied to each of the two licences. Conclusion [81] Having considered the whole of the evidence I am persuaded that the appellants have proved their cases. The appeals are upheld, and the unimproved values for rental purposes in respect of AV2001/0642 is determined at $8,000, and for AV2001/0643 is determined at $8,000. NG DIVETT MEMBER OF LAND COURT -- 23 of 23 --