Beanland v The Valuer-General [1990] QLAC 27 (1990) 13 QLCR 113

Land Appeal Court Brisbane 27 August 1990 RE: APPEAL AGAINST LAND COURT'S DETERMINATION OF UNIMPROVED VALUE - CITY OF CALOUNDRA - V89-311 and V89-312 R.M and A.J. BEANLAND - v. THE VALUER-GENERAL REASONS FOR JUDGMENT Delivered the 27th day of August, 1990 We have before us two appeals against a decision of the Land Court handed down on 2nd February, 1990, dismissing appeals by R.M. and A.J. Beanland against determinations of the Valuer- General of the unimproved value of certain lands owned by the appellants in the area of the City of Caloundra. The valuations were made for the purposes of the revaluation of the lands in the City of Caloundra as at 31st March, 1988. Appeal V89-311 is in respect of land described as Portion 61/62 and 66/67, parish of Beerwah, containing an area of 8.71 hectares and being situated at Sahara Road, Glasshouse, which has been valued by the Valuer-General at $44,000 under Valuation Roll 5884/40000. Appeal V89-312 is in respect of land described as Portion 26, parish of Beerwah, containing an area of 12.71 hectares and situated off Glasshouse Mountain Road. The Valuer-General has valued this parcel under Valuation Roll 20493 in the sum of $36,500. [1990] QLAC 27 -- 1 of 12 -- 2 The only ground, of appeal is that the valuations aire contrary to law in that the lands should have been amalgamated by the Valuer- General in one valuation under the terms of s. 14(h) of the Valuation of Land Act 1944-1987. The appellants' estimate before hearing in relation to the combined parcel was that it should be valued at $55,000. The Valuer-General's valuation, if separate valuations ought not to be upheld, is that a correct single valuation would be $61,000.00. The appellants concede that if the Valuer-General has correctly issued separate valuations, the values contended for by the Valuer-General are correct. This same question was canvassed between the same parties before the Land Court and Land Appeal Court in relation to these lands following the revaluation of the lands in the City as at 31st March, 1984. The judgment of the Land Appeal Court (per Derrington J., Mr. Smith and Mr. White) is to be found in R. and A. Beanland v. Valuer-General (1986-87) 11 Q.L.C.R. 131. That Court reviewed the provisions of s. 14 of the Valuation of Land Act, in particular the question of the exercise by the Valuer-General of his discretion to direct that the lands be valued as separate parcels. Section 14 was amended by s. 8 of the Valuation of Land Act Amendment Act 1984 which inter alia inserted s. 14(b). Section 14 now reads: "14. Unless the Valuer-General otherwise directs, there shall be included in one 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 one person; -- 2 of 12 -- 3 (b) several parcels of land in the same Area which do not adjoin but are worked as one holding and used exclusively for the purposes of a single business of primary production, and are owned by the same person and which, if let, are all let to one person: .11 The judgment of the Land Appeal Court on the previous occasion included the following at p. 133 - "The wording of the new section is clear and precise and we have no difficulty in interpreting it. The Legislature has not used words which make it mandatory for the Valuer-General in the circumstances set out in the new provision to value separate parcels in the one Local Authority area as one parcel. On the contrary the command is to do so ^unless the Valuer-General otherwise directs1. Simply put the position as we see it is that the Legislature has given the Valuer- General an unfettered discretion which - the proviso to Section 14 not being relevant - he may exercise subject only to legal requirement that it must not be exercised capriciously or unreasonably ... It is well established that the Land Court and this Court are competent to review the exercise of a discretion vested in the Valuer-General under the Act." The basis of the decision emerged at p. 135 - "In the subject case we were informed by Mr. Vize, counsel for the Valuer-General, that each possible amalgamation of parcels within the Shire was looked at on its merits having regard to all relevant factors including the distances between parcels but that there were no hard and fast rules arbitrarily determining the discretion. In effect, no preconceived policy was inflexibly enforced. We cannot say that merely because the subject land and portion 26 are 5.5 kilometres apart that the ruling of the Valuer-General to value them as separate parcels was unreasonable or clearly unjust or that he had failed to take into account any material consideration. Nor can we, on the evidence before us, say that he has acted arbitrarily or capriciously. We accordingly find that the Valuer-General has acted intra vires." Mr. A.R. Thomason as agent for the appellants has acted throughout all of these proceedings. He argues that the Land Appeal Court had erred in that judgment and submits that we -- 3 of 12 -- 4 should find that we are not bound by the judgment; that these lands prima facie meet the requirement of s. 14(b); that the Valuer- General should have valued the lands as one parcel; and that his discretion to "direct otherwise" was improperly exercised. Before this Court the parties relied upon the record of proceedings in the Court below and did not adduce further evidence. The transcript of the proceedings in the Land Court shows that Mr. Thomason did not adduce any evidence in support of his ground of appeal. Indeed if the Valuer-General had not elected to call evidence there would have been no evidence before the Land Court to discharge the onus under the Act for the appellants to prove their case. In the event evidence was called by Counsel for the Valuer- General and this evidence came from the valuer responsible for the valuation on behalf of the Valuer-General, Mr. G.P. Crowley. No other view than that of Mr. Crowley was submitted as the basis of the Valuer-General's direction and determination in this case. Mr. Crowley's evidence reveals that the parcels have continued to be used for pineapple growing; that the parcels are 5.5 kilometres apart; that each is capable of independent operation; and that one set of machinery is used to work both parcels. When invited to state the matters that he took into consideration in deciding to value the parcels by separate valuations, Mr. Crowley referred to the previous Land Appeal Court decision and his view that there had been no change "of circumstance. However he added - "it was primarily the distance -- 4 of 12 -- between the two properties was too great to really consider it." Now that really seems to fly in the face of the basis of the earlier decision (see the passage in Beanland v. Valuer-General quoted above from p. 135). Although the Valuer-General had had regard to the distances, it was said that there were "no hard and fast rules arbitrarily determining the discretion," and that "in effect no preconceived policy was inflexibly enforced." The present statement itself appears to demonstrate a change of circumstance from the basis upon which the original decision was given, and it contradicts the initial assertion that there has been no change of circumstance. Alternatively it demonstrates that a false picture was given to the previous Land Appeal Court, but we prefer to act on the footing that the criteria must have changed, and that 5.5 kilometres is now regarded as too great a distance for properties to be given the benefit of s. 14. When asked what "other factors" he had had regard to, Mr. Crowley went on to make the following statement "Well in considering the circumstances that may have changed or may have altered the situation, things like basically the sizes of the properties and intensity of use in the area, they're both sort of reasonable sized properties in area, they're not large by any circumstance, but they're reasonable and sort of viable propositions in themselves in that area, and also that they're capable of being operated independently of each other. There's no facility or feature on one particular property which makes the other one dependent upon it so therefore there's no real circumstances to say we should put them together." He went on to emphasise again his view that both parcels were capable of being quite self-sufficient in their own right. -- 5 of 12 -- 6 We will return to these observations after stating the tests that should be applied in determining whether the Valuer- General 1 s "direction" is capable of review and whether it should be regarded as effective or not. It may immediately be observed that we must decide this appeal with respect to the 1988 year on the evidence provided in this case. The previous Land Appeal Court hearing reached a decision upon submissions upon the evidence in that case, and that evidence did not include Mr. Crowley's evidence in the present case. There was apparently no direct evidence of the matters associated with actual considerations relied on by the Valuer-General in the previous case. This Court therefore has a different factual matrix upon which to base its decision and is not bound to reach the same result as that reached in the previous decision. The tests stated in the Land Appeal Court in Beanland (1985) 11 Q.L.C.R. 131, were expressed to be in reliance upon House v. The King (1936) 55 C.L.R. 499. With respect it would not seem that House v. The King is the appropriate point of reference, and we are unable to accept the suggestion that there is a legal requirement that the discretion "not be exercised . . . unreasonably"; That states too widely the ambit of review available to this Court. We think it more pertinent to refer to the tests stated by the High Court in Avon Downs Ptv. Ltd. v. F.C.T. (1949) 78 C.L.R. 353, 360 and Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1985-1986) 162 C.L.R. 24, 39-42. These tests concern review by the Courts of exercises of power by statutory officials. House v. The King was of course a -- 6 of 12 -- 7 statement of principles upon which an Appeal Court reviews the exercise of a discretion by another tribunal within the judicial process. We are here concerned with a "direction" given by the Valuer-General, under s. 14, and are subject to the principles of administrative law rather than those of appellate review. The statement of the principles upon which factual questions such as whether a statutory official is "satisfied" as to a state of affairs was considered in F.C.T. v. Brian Hatch Timber Co. (Sales) Ptv. Ltd. (1971-1972) 128 C.L.R. 28, 57, 59:- "The onus lay upon (the appellant) to establish that, on the material before the Commissioner, he had failed to address himself to the question which the subsection formulates or had made some mistake of law, or taken some extraneous reason into consideration or had excluded from consideration some factor which should have affected his determination", (p. 59 per Owen J. with whom Windeyer J. agreed). The classical statement which has been many times applied in this context is that of Dixon J. in Avon Downs Ptv. Ltd. v. F.C.T. (above) at p. 360 - "His decision, it is true, is not unexaminable. If he does not address himself to the question which the sub- section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review." What then does s. 14 of the Valuation of Land Act require? It is abundantly clear that all the criteria that are stated in s. 14(b) are satisfied by these appellants. There are two parcels in the same Area; they do not adjoin but are worked as the one holding; they are used exclusively for the purposes of a single business of primary production; and they are owned by -- 7 of 12 -- 8 the same person. They satisfy everything that the section spells out. The Act directs therefore that the two Beanland farms be included in the one valuation "unless the Valuer- General otherwise directs". On what basis may it be thought that the Valuer-General may exercise his power to direct otherwise? No countervailing criteria are set out in the Act, and his discretion is of the kind now referred to as "unstructured" (Allars Introduction to Australian Administrative Law paras. 5.41, 5.45). The appeal to the Land Court (and in turn to this Court) is conferred by s. 21 of the Valuation of Land Act which states that an owner may "if dissatisfied with the decision of the Valuer-General upon the objection, appeal to the Land Court". It is the decision upon the objection which is subject to an appeal on the merits. It is true that the valuation in question is founded upon the direction to value as two parcels, but such a direction is not itself a matter as to which an appeal lies on the merits. It is in this respect it would seem that some of the observations in Beanland v. Valuer-General (above) as to the degree of review available in relation to such a direction may have been stated too widely. In particular the statement that the discretion may be exercised subject to a requirement that it not be exercised unreasonably implies a wider basis of review than the authorities permit (Minister for Aboriginal Affairs v. Peko- Wallsend Ltd above pp. 39-42.) By the same token we agree in general with the observation of Mr. Dodds in relation to the predecessor of s. 14 in Colonial Sugar Refining Co. Ltd. v. -- 8 of 12 -- 9 Valuer-General (Shire of Hinchinbrook) (1970) 37 C.L.L.R. 176, 187 that the section - 11. . . give(s) him such power only after he has directed himself, as it were, on the facts applicable to any piece of land. The duties conferred on the Valuer- General by the Acts are essentially practical ones involving examination of all the facts relating to an area of land before deciding how it should be valued for the purposes of the Acts. If these facts satisfy him that part of such an area should be valued as a separate piece of land then he may so direct and that result follows. But if the facts do not support such a direction and the Valuer- General still values any part of an area of land as a separate piece of land, then, in my view, his direction can be subjected to review and may be set aside." These comments were made under earlier legislation, but we think they are pertinent to s. 14 to the extent that they draw attention to the need that some positive basis exist before the Valuer-General "otherwise directs". Section 14(b) sets out prescribed criteria, and if they are met an owner is entitled to the benefit of a single valuation, and may be deprived of it only by a specific and proper exercise of a power entrusted to the Valuer- General. In the present case the alleged basis of exercise of the power has been laid out before the Court. In the absence of evidence it would have been unreviewable, (see s. 21(3)), but once there is evidence of the manner in which the determination has been reached, such a direction cannot be regarded as valid simply upon the fact that there has been an arbitrary declaration equivalent to "I say so". Does the basis relied on demonstrate reliance upon some irrelevant consideration? In answering that question the -- 9 of 12 -- 1 0 decision may be regarded as invalid only if it was a consideration that he was bound to leave out of account. "In a case such as the present, where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards. The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take into account a consideration which he was, in the circumstances, bound to take into account for there to be a valid exercise of the power to decide." - (per Deane J. in Sean Investments v. Mackellar (1981) 38 A.L.R. 353, 375; cf. Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (above) per Mason J. at p. 39. The relevant factors for exercise of the discretion are "unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard" (per Mason J. in Minister for Aboriginal Affairs v. Peko-Wallsend Ltd above p. 40). As its preamble indicates, the purpose of the present legislation is to provide a machinery for determining the valuation of land for rating and taxing purposes. One may also discern within s. 14 an intention to protect bona fide farmers who run a single farm business upon properties that are not adjacent, and who would otherwise face a double rating. Prima facie it seems to have been thought that such persons ought not to be under any greater disadvantage than a farmer who runs his business on the one property or upon adjacent properties. No criteria were spelt out to indicate the type of case in which the benefit might be withdrawn, but a discretion was entrusted to the Valuer-General -- 10 of 12 -- 1 1 to direct otherwise. In the present statutory framework we think it would plainly be an abuse of the power if the Valuer-General decided, for example, that he would "direct otherwise" in all cases, and that nobody would get the benefit. Such a policy would be entirely consistent, but would plainly be an arbitrary and invalid exercise of the power. There must be an adversion to the particular case, and some positive rational basis that relates to the subject matter of the Act (and in particular s. 14) before the discretion is validly exercised. In the present case there was considerable vacillation in relation to the factors upon which the decision was said to have been taken. It was conceded that dairy farmers were given the benefit within the same Area although their properties were considerably further apart than the present properties; the existence of any "policy to define a maximum number of kilometres" was denied almost in the same breath as the allegation that distance was in the present case "the premier factor", along with the earlier statement that the distance between the two properties was "too great to really consider it". We cannot say that the distance between properties within the same local authority Area is not something that the Valuer-General is entitled to look at in reaching a decision, but it is clear that standing alone it is insufficient to afford a positive basis for making such a direction. Again it is difficult to see how the circumstance that each parcel was capable of being "self-sufficient" could be a relevant factor, because the true requirement of the section in this context is whether the properties are used exclusively -- 11 of 12 -- 1 2 for the purposes of a single business. The size of the single business would seem to be immaterial. In the last resort reliance was placed upon the alleged factor that there was "no real circumstance to say we should put them together". Again, that seems an inadequate basis in the context of a statutory provision that requires a single valuation "unless the Valuer-General otherwise directs". As observed above, for the Valuer—General validly so to direct there must be something more than "I say so", or a jumble of disorganised facts, or (purely hypothetically) "too many people seem to be getting this rating benefit". There is no basis afforded by the final statement that the valuer could not see any additional positive case (over and above satisfaction of the statutory requirements) to say why the Valuer- General should put them together. This seems to show a reversal of the statutory benefit without any actual basis. For these reasons we think that the Valuer-General1s direction in this instance is reviewable. It was founded on considerations that the proper application of the Act shows to be irrelevant, and there is no positive rational basis upon which it can be justified. Accordingly it ought to be treated as invalid. On the footing that there be a single valuation for the two parcels, the Valuer-General's valuation would be $61,000. The appeal should be allowed and that valuation should be substituted. : ; , (J.B. Thomas) j. -- ^—-j Judge of the Supreme Court (R.E. Wenck) ' Member of the Land Court -- 12 of 12 --