Reported Decision : 178 LGERA 1 Land and Environment Court of New South Wales CITATION : Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer-General [2010] NSWLEC 161 APPLICANT PARTIES : Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 RESPONDENT The Valuer-General FILE NUMBER(S) : 30932 of 2008; 30934 of 2008; 30935 of 2008; 30936 of 2008 CORAM: Pain J KEY ISSUES: VALUATION OF LAND :- whether Opera House car park lot a stratum or land - meaning of stratum - whether boundaries of lot defined or definable by reference to improvements - whether lot is land which must be valued accordingly under Valuation of Land Act 1916 Bennelong Point (Parking Station) Act 1985 s 6, 7, 8, Sch 1, Sch 2 Conveyancing Act 1919 s 88B, 196C Interpretation Act 1989 s 21, 34(2) LEGISLATION CITED: Land Tax Management Act 1956 Local Government Act 1993 s 494, 498, 555(1)(a), s 560(2) Public Works Act 1912 Valuation of Land Act 1916 s 4, 6A, 7, 7B, 14A, 14B, 37 Valuation of Land and Local Government (Amendment) Act (No.66) 1961 Commissioner for Railways, Sydney City Council and Wynyard Holdings Ltd v Valuer-General (1973) 26 LGRA 1 Commissioner for Railways v Valuer-General and Sydney City Council [1961] NSWR 977; (1961) 6 LGRA 237 CASES CITED: Gollan v Randwick Municipal Council [1961] AC 82; (1960) 6 LGRA 275 Hurstville Super Centre v V-G [1966] 2 NSWR 106; (1966) 13 LGRA 56 Sheath v Valuer-General [1964] NSWR 967; (1963) 10 LGRA 20 Trust Company v Valuer-General [2007] NSWCA 181; (2007) 154 LGERA 437 17 May 2010 DATES OF HEARING: 18 May 2010 19 May 2010 20 May 2010 DATE OF JUDGMENT: 26 August 2010 APPLICANT Mr J Maston SOLICITOR LEGAL REPRESENTATIVES: Addisons RESPONDENT Mr J Robson SC with Mr M McGrowdie SOLICITOR Crown Solicitors Office JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 26 August 2010 30932, 30934, 30935 and 30936 of 2008 Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer-General JUDGMENT 1 Her Honour: The Applicant challenges the land valuations for four base dates in 2004, 2005, 2006, 2007 for lot 101 DP 828946 known as the Sydney Opera House Car Park pursuant to s 37 of the Valuation of Land Act 1916 (the VL Act). I thank Acting Commissioner Miller for his assistance. 2 The lot is at the northern end of the Sydney CBD at Bennelong Point, located between Sydney Cove and Farm Cove, both of which form part of Sydney Harbour. To the south the site is adjacent to the grounds of Government House, the Royal Botanic Gardens and the Tarpeian Way at the end of Macquarie Street. The northern aspects of the site are close to the Sydney Opera House. The site is located within the City of Sydney local government area. 3 Proceedings no. 30932 of 2008 are for the 1 July 2004 base date. Proceedings no. 30934 of 2008 are for the 1 July 2005 base date. Proceedings no. 30935 of 2008 are for the 1 July 2006 base date. Proceedings no. 30936 of 2008 are for the 1 July 2007 base date. 4 The Valuer-General (the VG) determined the land values for the respective base dates as follows:- 1 July 2004 $117,500 (valuation dated 1 November 2004) 1 July 2005 $117,500 (valuation made 28 October 2005) 1 July 2006 $117,500 (valuation made 14 September 2006) 1 July 2007 $127,000 (valuation made 3 October 2007) 5 On 21 December 2007 the VG determined new valuations for each of the base dates listed above as follows:- 1 July 2004 $20 million 1 July 2005 $21 million 1 July 2006 $22.95 million 1 July 2007 $24 million 6 In the reascertainments of land value for the four annual base dates dated 1 July 2004, 1 July 2005, 1 July 2006 and 1 July 2007 based on the new valuations the VG assessed the land values under s 6A of the VL Act. The Applicant contends that lot 101 is a stratum as defined in the VL Act and its values should be assessed under s 7B. 7 The spatial design characteristics and dimensions of the lot are unique and irregular. The lot is occupied by a 12 level subterranean concrete helix car park consisting of 1,200 car spaces and ancillary uses. Vehicle access and egress points are located on Macquarie Street, the tunnels of which form part of the irregular lot. Underground pedestrian access is located in the lower Opera House plaza via an easement for pedestrian access. 8 It is agreed that the total gross building floor area of the improvements as at each base date was 41,186m2. The improvements consist of a reinforced concrete car park including ventilation shafts, lifts access-ways and associated works, rock anchor systems and the Bennelong Drain diversion. Valuation of Land Act 1916 9 The land value of lot 101 must be calculated in accordance with the VL Act. Definitions are found in s 4: Land improvements means: … (d) the restoration or improvement of land surface by excavation, filling, grading or levelling, not being works of irrigation or conservation, … (d1) without limiting paragraph (d), any excavation, filling, grading or levelling of land (otherwise than for the purpose of irrigation or conservation) that is associated with: (i) the erection of any building or structure, or (ii) the carrying out of any work, or (iii) the operations of any mine or extractive industry, 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 ratable or taxable under any Act, and strata is the plural of stratum. 10 Section 6A(1) headed Land Value provides: The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made. 11 Section 7B(1) headed Land Value of Strata provides: (1) The land value of a stratum is the capital sum which the fee-simple of the stratum 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 and made or acquired by the owner or the owner's predecessor in title had not been made: Provided that where the stratum is wholly or partly in an excavation it shall be assumed that the excavation of the stratum had been made, (b) that means of access to the stratum 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 (c) that lands outside the stratum, including land of which the stratum 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 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, had been made. 12 Section 7B was inserted in the VL Act by the Valuation of Land and Local Government (Amendment) Act (No.66) 1961 to provide for the valuation of strata and commenced on 22 December 1961. Reascertainment of land value 13 Section 14A(2) of the VL Act provides: (2) The Valuer-General may at any time value any parcel of land, either on his or her own initiative or: (a) in the case of lands of the Crown, on the application of the public authority by or on whose behalf the land is held, or (b) in the case of land within the Western Division (including land referred to in paragraph (a)), on the application of the Western Lands Commissioner, or (c) in the case of land within the area of a rating or taxing authority (including land referred to in paragraph (a) or (b)), on the application of that authority. 14 Section 14B of the VL Act provides: (1) Land that is valued for the purposes of a general valuation is to be valued as at 1 July in the valuing year in which the valuation takes place. (2) A land value for any year commencing 1 July may be ascertained for a parcel of land even if it did not exist, as at 1 July in that year, in the form in which it exists when its value is ascertained. (3) If any part of the parcel was, as at 1 July in that year, included in another parcel of land for which a value as at that date has been ascertained, the Valuer-General is to reascertain the value of the residue of that other parcel. 15 No issue is taken by the Applicant as to the legal basis for the issuing of the four reascertainments of land values in 2007 despite the issuing of land valuations (for much lower values) in each of the four base years. My understanding is that this is an unusual course. Given that the valuation operates retrospectively, gives rise to land tax liability under the Land Tax Management Act 1956 and local government rate liabilities under the Local Government Act 1993 and is carried out without any notice to the registered proprietors, the effects are potentially serious for a land owner. In this case the liability for land tax and local government rates increased across four base date years on a single day from $479,500 (total of land values first issued in each of the base date years) to approximately $87 million under the second set of four valuations issued on the same day, 21 December 2007, the subject of these four appeals. 16 While s 14A(2) of the VL Act provides that in relation to Crown land the VG may value a parcel of land at any time, under s 14B valuations for general purposes are to occur as at 1 July in the valuing year in which the valuation takes place. That was the timing of the four base date valuations the first time around, undertaken annually. This issue has not been pursued by the Applicant and I will not rule finally on an issue which has not been argued before me but record my concerns for the reasons given immediately above. Opera House car park 17 The Bennelong Point (Parking Station) Act 1985 (repealed effective 10 December 2008) was passed to provide for the construction and operation of an underground parking station at Bennelong Point. Schedule 1 contained a description of the works for a parking station which the Minister could approve subject to the requirements in the Act. Schedule 2 contained a description of the land necessary for the parking station to be built. 18 Environmental impact statements were completed in December 1985 (exhibit O) and June 1988 (exhibit P). An environmental impact assessment report was prepared for the Minister for Public Works, the determining authority, on 12 July 1990 (exhibit Q), and the Minister's Notice of Approval and Determination was published in the New South Wales Government Gazette number 95 on 31 July 1990 (exhibit N). Excavation of the cavern and associated tunnels for the carpark was commenced in late 1990 and completed in April 1992. The twelve storey concrete helix was completed in September 1992 and the parking station was opened in March 1993. 19 After construction was completed, on 12 March 1993 by gazette notice for appropriation and resumption under the Bennelong Point (Parking Station) Act, the Minister for Public Works declared that the land occupied by the works had been surveyed together with necessary easements and rights as specified in the notice and these were appropriated and vested in the Minister for Public Works as the constructing authority under the Public Works Act 1912. The lot in the deposited plan was registered on 12 March 1993. The s 88B Conveyancing Act 1919 instrument setting out the terms of easements (exhibit R) and the memorandum containing the provisions to be incorporated in all relevant resumption notices and plans (exhibit S) were also registered the same day. Numerous easements for electricity, sewer, support, ventilation, and access are identified. A fifty year lease between the Minister for Public Works and Enacon Parking Pty Ltd commenced on 13 March 1993. 20 A 1989 Proximity Agreement between the Minister for Public Works and the New South Wales Roads and Traffic Authority (the RTA) concerning the Bennelong Car Park and the Sydney Harbour Tunnel was agreed. The subject of the agreement was the need to facilitate the construction of the Sydney Harbour Tunnel as it required strengthening of the tunnel to enable construction of the entrance/exit ramps of the parking station. 21 The Court undertook a view. The Court was directed to the easement for pedestrian access adjacent to the parking station cashier point off the Opera House plaza lower concourse, and an excavation cavern to observe rock anchors and the external surface of the internal carpark wall structure. The Court was also directed to an internal area at the top of the upper-most cavern on the external perimeter of the rock core where the air extraction and ventilation noise-dampers are located. Original rock anchors covered by spray concrete ceiling, plus more recent exposed rock anchors were identified. The Court was advised that 12m and 7m rock anchors are used for support across the dome of the internal cavity. The Court viewed the level 4 main ventilation intake shaft located adjacent to the north wall of the site and viewed excavation to the surface. Is lot 101 a stratum or land? 22 A threshold issue which arises for determination is which section of the VL Act lot 101 is to be valued under. The Applicant argues lot 101 should be valued as a stratum under s 7B. The VG submits lot 101 should be valued under s 6A as land. Evidence relevant to whether lot 101 a stratum or land 23 A bundle of documents filed jointly by the parties was tendered as exhibit A. Included in the bundle are documents describing the stratum (including title documents for lot 101 DP 828946), documents relating to the determination of land value, the lease between the Minister for Public Works and Enacon Parking Pty Ltd, a copy of the Bennelong Point (Parking Station) Act 1985, and a copy of the 12 March 1993 Government Gazette notice. 24 An interesting feature within the lot is a section of the Bennelong Drain, one of the first oviform masonry stormwater drainage tunnels constructed in Australia during European settlement in 1857. The Bennelong Drain is an outlet for Sydney CBD stormwater, which veers from Macquarie Street in a north-east direction through Bennelong Point and discharges into Sydney Harbour. The drain was diverted to the west of the carpark as part of the works for the development with no objections from the NSW Heritage Council (see exhibit Q p 43-44). 25 Each party provided a 3-dimensional computer generated representation incorporating height, width and depth specifications from the deposited cadastral plans which were demonstrated for the benefit of the Court by surveyors Pierre Hertzenberg (for the Applicant) and Philip Pells (for the Respondent). The surveyors confirmed that the respective 3-dimensional representations were constructed using the same data and specifications, and that by comparison each were accurate representations (TS 18 May 2010 p 96 l 24-25). The images were rotated through various axes to provide the Court with an understanding of the irregularity of the lot. 26 The Applicant's 3-dimensional electronic representation (tendered in a .pdf format on compact disc as exhibit U) identified the entry and exit tunnels, the upper stratum limit, height and depth limits, and the shape and location of the boundaries of the lot (including the small up-stand structures capping the ventilation shafts). It did not display the easement for pedestrian access to the lot from the Opera House plaza lower concourse. The boundary areas of the entry and exit tunnels were described as existing approximately 200mm below the road surfacing. The original, as well as the more recent diversion routes of the Bennelong Drain were illustrated. The demonstration of the Respondent's 3-dimensional electronic representation identified the same dimensions and features, with the exception of the ventilation shaft up-stands and Bennelong Drain. The Respondent's electronic graphics also showed the lot relative to adjacent structures (Sydney Opera House and Government House) and ground level. 27 Six coloured photographs of a physical model of the parking station structures was prepared by the Applicant and tendered as exhibit B. A 2-dimensional image, extracted from the Respondent's electronic graphic representation illustrating a cross section of the carpark was tendered as exhibit 4. A model representing the dimensions of the carpark development was tendered by the Respondent as exhibit 5. 28 An expert report of Pierre Hertzenberg, registered surveyor, annexed to his affidavit sworn 14 April 2010 was tendered as exhibit C. His report identifies that Mr Hertzenberg's company, Hard & Forester Pty Ltd, has a long history of working on the Sydney Opera House Car Parking Station including pre-construction site control, definition of site boundaries prior to works, quality checking on the excavated rock face, monitoring for ground movement, and preparation of the deposited plan and other plans relevant to the development. 29 The surveying parameters used by Mr Hartzenberg included: - Entry and Exit ramps; - The footpath next to the vehicular ramps was to remain in Council ownership - The roadway next to the ramp was to remain in Council ownership; - Enough width inside the stratum boundaries was to be left for stability and rock anchoring. • Air intake Tunnel The boundary of the stratum was limited in height to the top of the constructed granite stone work. • Exhaust Air Tunnel The boundary was limited in height to 0.9 m above the granite stone work of the roundabout. • Main Cavern The height and depth was established as a distance above the roof of the cavern and as a distance below the lowest excavated surface. The outer face of the excavation was offset from the stratum boundary [lot 101 boundary] . 30 Mr Hartzenberg concludes at p 8 of his report that: [a]t all locations, in the main cavern, cross passages, pedestrian access tunnel (up to the concourse slab), entry and exit tunnels (not including sections above the ramps), exhaust and intake tunnel up to approximately the ventilation grills and the emergency cross access passageways, are all contained within the Stratum of lot 101 within an excavation, which is enclosed by solid natural material which extends outwards for a varying distance, until the boundary of lot 101 of the Stratum is reached. 31 The statement of evidence prepared by Dr Philip Pells, surveyor, and dated 14 May 2010 was tendered as exhibit 3. Dr Pells relied on survey plans (sheets 1-5) of DP 828946, and personal archives (including design drawings, reports and excavation photographs) to determine whether the structural support items providing permanent support for the excavation (namely rockbolts and rock anchors) lie within the boundaries of the lot and whether the diverted Bennelong Drain lies outside the lot. The statement of evidence identifies that Dr Pells was responsible for the design of the support for the excavations and worked on the project from the initial tender to completion of construction. 32 A joint expert surveyors' report, by Mr Hartzenberg and Dr Pells, was prepared on 17 May 2010 (during the hearing) and tendered as exhibit J. This report was to clarify whether excavation in relation to the boundaries of lot 101 were outside the lot boundaries at nominated points. The joint surveyors report agreed that the excavation for the carparking station is entirely within the boundaries of lot 101, but for: i. the short length of the egress tunnel at point A in Figure 1 exhibit 3 (Dr Pells statement of evidence 14 May 2010); and ii. two points by the diverted Bennelong Drain at points B and C in Figure 1 exhibit 3; and iii. approximately 15m length of rockbolts or rock anchor at the top of the main cavern within the south eastern quadrant as shown in Figures 2 and 3 of exhibit 3. Applicant's submissions 33 The Applicant argued that lot 101 satisfies the definition of stratum in s 4 of the VL Act and should be valued under s 7B(1) (not subsection (2)). The definition and section were introduced into the VL Act in 1961 after Commissioner for Railways v Valuer-General and Sydney City Council [1961] NSWR 977; (1961) 6 LGRA 237 (Lawrence Dry Cleaners). 34 Based on Commissioner for Railways, Sydney City Council and Wynyard Holdings Ltd v Valuer-General (1973) 26 LGRA 1 (Wynyard Holdings): (a) nothing in s 26 to 28B of the VL Act require that the parcel be valued as land and not as a stratum; (b) there is no issue in this case with the VG's decision to treat the land the subject of the lease, being lot 101, as a single parcel for the purposes of the Act. This decision was obviously correct, having regard to the geographical, functional and structural unity of the subject matter of the valuation; (c) there is no priority between considering whether to value the "datum" as land or stratum: Wynyard Holdings at 15. The decision depends upon which category is most "relevant": (supra); (d) this is not a case where there are multiple strata to be valued, which could be consolidated; (e) the treatment of the parcel as a stratum does not leave a residue to be valued and rated; (f) the conditions exist for a separate valuation as a stratum in accordance with the Local Government Act (see s 555 (1) (a), s 560 (2) and Dictionary – see definition of "Land Value" coupled with s 494 and s 498) and the Land Tax Management Act. The land tax assessments are in the bundle (exhibit A), tabs 4-8; (g) no unnecessary fragmentation of a larger whole of rateable or taxable land arises. The land is Crown land and the land surrounding the stratum is non-rateable and non-taxable; (h) there is no legal, functional or structural nexus between the stratum parcel and any other land; (i) the stratum cannot be treated as an integral part of a whole connected complex; (j) the stratum is the subject of the original lease (see extract bundle, exhibit A tab 14) and does not function as part of or the completion of facilities of an integrated development under a single lease. 35 Access by easement also suggests that lot 101 is a stratum. Pedestrian access on each of the base dates was by an easement for pedestrian access appurtenant to lot 101. If valued other than as a stratum there would be no pedestrian access to the stratum. The fee simple of land must be valued without regard for any easements benefiting or burdening the subject land; Gollan v Randwick Municipal Council [1961] AC 82; (1960) 6 LGRA 275. 36 No such issue arises in relation to a stratum in light of s 7B(1)(b). Lot 101 is unique and its shape, position and accessibility suggests it should be treated as a stratum. 37 "Defined or definable by reference to improvements or otherwise" in the definition is met by the evidence of Mr Hartzenberg. That shows that the boundaries of this stratum can be defined by reference to the physical works that took place inside the stratum. It also refers to other structures around it such as the Opera House forecourt above, the entrance passageway and other parts. Macquarie Street is a reference point and is an improvement on land. The passageway for public access from the Opera house lower concourse is another point where definition of the stratum can take place. In the gazette notice published under the Bennelong Point (Parking Station) Act the Minister authorised the deposited plan to be prepared by reference to all of the works taking place in and around lot 101 where he declares the works have been surveyed together with such easements and rights described in the schedule. The works were already created when the deposited plan was created so that there can be no doubt that the stratum is definable by reference to improvements. 38 This case is completely different from Hurstville Super Centre Ltd v Valuer-General [1966] 2 NSWR 106; (1966) 13 LGRA 56 where a valuation was issued for air space where there were no improvements in it whatsoever from which measurement could be taken whether actually or hypothetically. There must be physical things in or about the stratum from which measurement can be taken. Not every part of every boundary of lot 101 has to be definable as an improvement, it is sufficient if one is capable of saying that the stratum can be measured to define its outer boundaries. The deposited plan was created in 1993 when the works were completed. The underside of the lot can be defined by the floor of the excavation. That satisfies "by reference to improvements" in the definition in s 4. 39 The relevant dates of inquiry are the various base dates, namely 1 July 2004, 2005, 2006, 2007. Once the DP was created the land was leased and became subject to taxation. Land tax has been charged under the Land Tax Management Act, hence these appeals. Rates have also been levied under the Local Government Act. The lease is of a single allotment and that is also suggestive that this is a stratum. This approach is also supported by Lord Wilberforce's reasoning in Wynyard Holdings where he addressed the problem of fragmentation if part of a building was treated as a stratum within the building treated as land. That leads to unacceptable fragmentation of the overall single leased parcel. 40 All the dimensions of lot 101 are limited, as provided for in the definition "whether some of the dimensions of the space or layer are unlimited or whether all the dimensions are limited." 41 "..or otherwise" in the definition does not refer to lot boundaries. Cases such as Hurstville Super Centre suggest that having something drawn on a plan is not enough. Respondent's submissions 42 The critical words in the definition of stratum are "…defined or definable by reference to improvements or otherwise…". "Or otherwise" means "or such like" as found in Hurstville Super Centre at 67. In other words something likened to improvements. There is no dispute between the parties as to the meaning of improvements, see Trust Co of Australia v Valuer General [2007] NSWCA 181; (2007) 154 LGERA 437 at [20]-[41]. "Define" as stated in the Macquarie Dictionary 2nd revised edition includes to determine or fix the boundaries or extent of or to make clear the outline form of. A reference must direct one's attention to something. The passage from the definition means "whose boundaries are determined or fixed by directing one's attention to improvements or such like". It is the improvements themselves which must indicate or direct attention to the boundaries which are being fixed or defined. A lot in a deposited plan or a surveyor's plan will not qualify as that diagram contains nothing which directs attention to improvements as being the boundaries. The boundaries are fixed or determined by reference to lines drawn in space, not actual physical entities. 43 It is also important to note that the boundaries must be fixed or determined by actual reference to improvements or their like, not merely with improvements in mind. A surveyor who compiles a deposited plan with a view to including or excluding certain improvements has not satisfied the definition. Once the surveyor's efforts are completed the boundaries will have been fixed or determined by directing one's attention to a plan or diagram, not by directing one's attention to real structures. This is critical. 44 Such an approach is consistent with the definition but also what the 1961 amendment was to remedy, namely if the improvements go, so do the boundaries. If a property is defined by surveyor's plans or lines the boundaries are known, regardless of whether improvements exist or not. In this circumstance the property can still be valued. 45 In Hurstville Super Centre (1966) the Court of Appeal interpreted what was meant by the definition and, in particular, the wording in s 7B of "defined or definable by reference to improvements or otherwise". The Centre was the lessee of land over Hurstville railway station which consisted of a flat imaginary plane fixed at a certain height above sea level, about 19m above the railway lines of the station. The area was in excess of two acres and was leased to the Super Centre. Descending from the plane were columns of air space in which pillars or girders to support a structure could be located. The judgment of Wallace P at 66-67 is important. 46 Wallace P's approach construes "or otherwise" as similar to improvements. Secondly, the boundaries could be said to follow or accommodate real improvements which were not constructed at the time. The boundary lines would have been drawn with improvements in mind and these dictated the geometrical lines or planes which could constitute those boundaries. Even if the boundaries had been delineated by reference to real or prospective improvements this does not satisfy the definition of stratum. The improvements themselves have to direct one's attention to the boundaries. Mr Hartzenberg's evidence (exhibit C p 7) is that the stratum in DP 828946 is fully definable by bearings, distances and reduced levels. This demonstrates that the boundaries of lot 101 are not fixed or determined by directing attention to actual improvements. The boundaries are fixed or determined by directing attention to the diagram in the DP, not by reference to any actual improvement. 47 Lot 101 can no more be a stratum than the site of the Super Centre in Hurstville Super Centre. The only distinction is that in the present case the boundaries of the lot were mapped out after the car park was constructed. In Hurstville Super Centre, the boundaries of the leased space were mapped out before the centre was constructed. In both cases the problem was that the boundaries were delineated by cadastral lines and not by existing, actual improvements. 48 Had the carpark lease been of, say, all the space inside the excavated cavern, that may have been a stratum. The walls of the cavern, wherever they happen to be, would tell us where we find the boundaries of the property. As those cavern walls are doubtless those of an improvement, that is the man made cavern, we are dealing with a part of land "defined or definable by reference to improvements or otherwise". However, the property being leased here is not so defined, or fixed and determined, but instead is defined by reference to the cadastral boundaries of a lot in a deposited plan. This is determinative. 49 The distinction being drawn here between cadastral lines, which give us land, and actual physical structures, which give us stratum, is real and significant. If one leases the air space in the Hurstville Super Centre, or the subterranean space in the Opera House Car park, then because the boundaries of both are defined by surveyor's lines or planes, one will always know where the boundaries will be and will thus be certain of one's rights. However, if one, to use the analogy cited by Wallace P, leases room 14 in a particular building (Hurstville Super Centre at 66), then the title only exists as long as the building. Once the building goes (or, as the statute requires, is assumed to have never existed) how does one even know where the room is? This was why a property so described could not be valued in the Lawrence Dry Cleaners decision. 50 Land under the VL Act can include cubical land, meaning land defined vertically as well as horizontally. Lord Wilberforce observed in Wynyard Holdings at 11 that land did not mean the whole of the space above and below the surface of the land but included land that was limited as to height and depth. This can be called cubical land. 51 The distinction between cubical and indefinite land is not a distinction between s 6A and s 7B(1). Stratum also embraces indefinite land when it states "whether some of the dimensions of the space or layer are unlimited". The critical distinction is that stratum is defined by reference to improvements while the land to which s 6A relates is defined by reference to cadastral boundaries. Section 7B has a limited operation to address circumstances such as those in the Lawrence Dry Cleaners case. Finding 52 Section 7B and the definition of stratum was introduced into the VL Act in 1961 (by the Valuation of Land and Local Government (Amendment) Act (No.66)) in response to the findings in the Lawrence Dry Cleaners case. In that case the Commissioner for Railways had excavated beside Wynyard Railway Station for 43 feet. A 14 storey building was constructed with two levels in the excavation, one level at ground level and 11 levels above ground. In the subterranean part an area was leased to a dry cleaning business. The issue arose of whether the leased area was rateable as land under the VL Act. The definition of land value in the VL Act was then s 6(1), which was in similar terms to 6A(1) now. The Court of Appeal held that as the area to be valued was itself an improvement being part of a larger improvement, and the section stated that improvements were to be disregarded then it was not possible to value the area leased by the dry cleaning business. Section 7B was introduced to overcome this decision and the concept of stratum was introduced for the first time into the VL Act in the 1961 amendment to the Act. 53 If lot 101 is a stratum, the value is calculated under s 7B and the Applicant argues that the excavation costs must be ignored in the calculation of value. If not a stratum, lot 101 must be land valued under s 6A. There is a disagreement between the parties as to how the excavation costs should be treated if lot 101 is valued under s 6A. 54 There was extensive survey evidence prepared by Mr Hartzenberg whose firm was involved at the time the original plans were prepared for the DP and by Mr Pell. Both parties have produced scale models and also computer models to demonstrate the structure and its location. They have been useful in identifying to the Court the nature and location of the car park structure. There is no substantial disagreement between the expert surveyors in their evidence. They agree that three points of the car park structure are outside lot 101. Nothing hangs on this circumstance in terms of the application of the definition. 55 In Wynyard Holdings Lord Wilberforce delivering judgment for the Privy Council held at 15 that there is no assumption as to whether a particular lot is to be valued as land or as a stratum. The VG must determine whether a lot is land or a stratum and then value it in accordance with the relevant statutory provisions. It is logical to first consider whether lot 101 is a stratum for the purposes of the VL Act as if it is not a stratum it must be land under the VL Act. "Stratum" is defined in s 4 of the VL Act; see above at par 9. Land is not defined in the VL Act. Contrast with Conveyancing Act 1919 56 It is relevant context to the issues in this case to note that the VL Act has a definition of stratum which has no connection with the operation of the Conveyancing Act, which deals with stratum lots in a different context. The DP for lot 101 prepared under the Conveyancing Act refers to a stratum lot. Section 196C of the Conveyancing Act defines stratum lot as: .. a lot that is limited in height or depth (or both) by reference to Australian Height Datum or another datum approved by the Surveyor-General, but does not include a lot within the meaning of the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986. The definition is unrelated to and obviously different from the definition of stratum in the VL Act. That lot 101 is limited in height and depth by reference to Australian Height Datum (AHD) and meets the definition of stratum in the Conveyancing Act is not relevant to the application of the definition of stratum in the VL Act. 57 As submitted by the Respondent this definition of stratum is describing "cubical land", meaning land defined vertically as well as horizontally. This is to be contrasted with indefinite land, the latter being land which has no finite boundaries up or down. It is therefore defined in two dimensions and is generally the more usual kind of land encountered. 58 There is no definition of land in the VL Act. The Interpretation Act 1989 at s 21 states that land means: … messuages, tenements and hereditaments, corporeal and incorporeal, of any tenure or description, and whatever may be the estate or interest therein 59 The Conveyancing Act definition of land is similar but not identical to that in the Interpretation Act, being as follows: Land includes tenements and hereditaments, corporeal and incorporeal, and every estate and interest therein whether vested or contingent, freehold or leasehold, and whether at law or in equity. 60 These definitions of land are broad and include what the Respondent has termed cubical land as well as indefinite land. In Wynyard Holdings the Privy Council at 12 referred to the latter as "usque ad coelum et ad inferos" meaning land stretching up to the sky. The Privy Council recognised that land could include a layer of land defined by horizontal boundaries above or below the surface (here referred to as cubical land) as well as the concept of indefinite land (without using that term). The definition of stratum lot in the Conveyancing Act encompasses what would otherwise be land under other legislation. 61 As submitted by the Respondent (at par 50, 51 above), there is no basis to distinguish between s 6A and s 7B(1) because land is limited vertically as well as horizontally (cubical land) or is land of indefinite dimension. Either can be a stratum or land under the VL Act. Definition of stratum in VL Act 62 It is necessary to consider the definition of stratum in s 4. The definition consists of several parts, firstly that it is a part of land consisting of a space or layer below, on or above the surface of the land. There is no dispute about the meaning of that part of the definition. 63 The key part of the definition addressed by the parties is whether lot 101 is "defined or definable by reference to improvements or otherwise". The parties do not disagree on the meaning of improvements. A definition of land improvements is provided in the VL Act s 4 to include excavation for the purpose of the erection of a building, structure or work, inter alia (d1). Authority for the approach to improvements under s 6A of the VL Act was considered in Trust Co of Australia v Valuer-General (2007) at [20]-[31] (Campbell JA, Beazley and Ipp JJA concurring). 64 At issue is what is meant by "defined or definable by reference to …". In Lawrence Dry Cleaners the lot in question was defined solely by improvements surrounding it and could not be valued as these had to be disregarded under the terms of the VL Act then in force. The amendments adding the concept and definition of stratum were considered for the first time by the Court of Appeal in Hurstville Super Centre (1966) and subsequently by the Privy Council in Wynyard Holdings (1973). The Applicant has particularly relied upon the latter as supportive of its case. 65 In Hurstville Super Centre Wallace P (Jacobs and Holmes JJ concurring on the meaning of stratum in separate judgments) considered that the definition did not apply to a column of air having no connection with an existing structure, whether tunnel, building or the ground. The relevant facts are summarised in the Respondent's submissions above in par 45. Wallace P at 66-67 stated: … on the natural construction of the wording of the definition, a "stratum" does not include and is not intended to include for rating purposes a column of air having no connection with an existing structure, be it an excavation in the ground or tunnel or a building. Thus a mere column of air intended to be filled later by a girder or concrete pillar in the construction of a building to be erected in the future is not such a stratum. A column of air going upwards ad coelum with an (inclined) base consisting of an imaginary line defined on a drawing board is not such a stratum. I accept that "land" in the definition means usque ad coelum et ad inferos – but the "part" must consist of a "space" or "layer" which in turn must be defined or definable by reference to "improvements or otherwise". A reference to the space in "room No 14" of a building could be regarded as [being so] defined or definable. … I consider that the words "or otherwise" in the phrase "by reference to improvements or otherwise" must be given a meaning allied with "improvements" … a literal construction here would not be natural – but would produce a somewhat irrational meaning of the total phrase such as "defined or definable by improvements or by any other manner whatsoever" … I cannot accept that a mere column of air with an imaginary base and dissociated from improvements or something which can be likened to an improvement is a stratum within the definition. Some of the dimensions may by definition be "unlimited" but this word is applicable, for example, to a top storey or penthouse of a building or block of flats, which can be defined by the roof and parapet. 66 The circumstances of that case are different to those for lot 101 and involved essentially airspace which the VG argued was rateable as a stratum. The reasoning of Wallace P set out above is important, and is binding in any event, in that he stresses that the stratum must be a space or layer defined by reference to improvements. "…or otherwise" requires reference to something similar to improvement. 67 In Wynyard Holdings the Privy Council was considering the 1961 amendment in the context of a building development between Carrington and George streets at Wynyard. It held this should be valued as land as the VG had done. There was a defined site which was clearly capable of valuation, land does not have to have discernible association with the surface so that land under the surface can be valued, land does not have to be of unlimited vertical extent (at p 14). Further, while the building contained in it a number of strata there was no warrant for fragmenting the whole into strata and a residue of land (at p 15). The reasoning of the Privy Council is persuasive, albeit not binding, and I consider supports a finding that lot 101 is land. This is contrary to the submissions of the Applicant which relied on the findings in that case (par 34). Lot 101 does not consist of separate parts (stratum) within a whole. A finding that the lot is land does not lead to fragmentation of land. Land need not be indefinite under the VL Act. 68 The parties did not refer to any subsequent case which has considered these issues and the Court has not found any. One earlier case was Sheath v Valuer-General [1964] NSWR 967; (1963) 10 LGRA 20, the first appeal after the 1961 amendment. This confirmed (at 24) that the concept of stratum in the VL Act was to remedy the circumstances in Lawrence Dry Cleaners. That the carpark structure is unique is relied on by the Applicant as suggestive that it is a stratum but the question is whether it meets the definition in the Act. That this is the first time such a structure has been considered in this context provides no assistance in the construction of s 7B(1) of the VL Act. 69 The Applicant submitted that the excavation within the lot was an improvement by which the boundary was able to be measured in the DP, finalised on 12 March 1993 after construction of the carpark structure. Its location as defined in the DP is identified by planes and measurements at various levels. The evidence of Mr Hartzenberg confirms that the lot is identifiable by bearings, distances and reduced levels. Further the excavation is generally within the lot not at its boundary, as stated in the evidence of Mr Hartzenberg. The excavation is outside the lot to a minor extent at three locations as referred to in the joint evidence of the surveyors. I do not consider the lot satisfies the definition of stratum in s 4. As submitted by the Respondent the critical distinction is that stratum is defined by reference to improvements while the land to which s 6A relates is defined by reference to cadastral boundaries. The application of the definition of stratum is not affected by the fact the DP was created after the car park structure was completed. 70 I generally agree with the submissions of the Respondent in par 46-49 that lot 101 is not defined or definable by reference to improvements or something similar. As the Respondent submitted (par 42), the significant part of the definition for this matter means "whose boundaries are determined or fixed by directing one's attention to improvements or such like". None of its boundaries are defined by an improvement. The fact it is located near improvements such as the Sydney Harbour Tunnel from which measurements may be made is not what the definition is directed to. The boundaries of the structure are not defined or definable by reference to improvements. If the improvements were removed lot 101 would continue to exist, unlike the dry cleaning shop in Lawrence Dry Cleaners or the Super Centre lot in Hurstville Super Centre. 71 I should note for completeness given the evidence before me that at certain points on the boundary of the lot there are improvements, namely the two ventilation shafts and the road leading to the access and egress tunnels. These improvements were not relied on by the Applicant as satisfying the definition of stratum, appropriately so in my view as the majority of the lot 101 boundaries are not defined or definable by reference to these improvements. 72 "… or otherwise" suggests something similar to an improvement must be the basis for the definition of a stratum. For the reasons provided above this part of the definition is not satisfied in relation to lot 101. 73 The Applicant also relied on the part of the definition "a stratum rateable or taxable under any Act" as supportive of its argument. I do not consider that part of the definition provides much assistance in determining the meaning of the earlier words considered in this case. As noted above in relation to the Conveyancing Act another Act may well have a different definition of stratum. To the extent that a lot identified as a stratum under the VL Act is also a stratum lot taxable under another Act, such as the Land Tax Management Act is another requirement of the definition. For current purposes I do not need to do more than note that requirement here. I also note that what is rateable is lot 101, not the area occupied by the structure of the car park. 74 The Applicant argued (par 35) that because pedestrian access was by easement alone this was suggestive that the lot was a stratum. This is not a relevant consideration to the application of the definition of stratum in the VL Act. Whether there is access by easement is not relevant to whether it is land. It is a matter relevant to the value of the land, a separate question. In this case the vehicular access is not via an easement in any event so that were this a relevant matter access to the lot is not entirely by way of an easement in any event. 75 The second reading speech was provided by the Respondent in case the Court considered it necessary to refer to it, as provided for under s 34(2)(f) of the Interpretation Act. It is not necessary that I refer to it except that I note that it makes clear the amendments in 1961 were to address Lawrence Dry Cleaners (see New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 29 November 1961 at 3302). 76 The parties requested that if I conclude that lot 101 should be valued as land under s 6A of the VL Act, as I have, then I should provide a preliminary judgment as it is necessary for the evidence of the valuers in particular to be reconsidered. New evidence may be necessary before the matter can be finalised. I consider this is necessary in light of the way some of the valuation evidence was prepared for the original hearing and I will provide that opportunity to the parties. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.