UAGC Rodney District Council v Attorney General

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Privy Council case taken in 2002 on the payment of UAGCs

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Privy Council Appeal No. 29 of 2001
(1) Rodney District Council
(2) Manukau City Council
(3) Hutt City Council and
(4) New Zealand Local Government Association
Incorporated

Appellants

v.
(1) The Attorney-General and
(2) The Valuer-General

Respondents
FROM

THE COURT OF APPEAL OF NEW ZEALAND
---------------

JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 7th October 2002
-----------------Present at the hearing:-

Lord Bingham of Cornhill
Lord Nicholls of Birkenhead
Lord Hope of Craighead
Lord Hutton
Lord Hobhouse of Woodborough
[Delivered by Lord Hope of Craighead]
------------------

1. This is an appeal from a judgment of the Court of Appeal of
New Zealand (Richardson P, Thomas, Keith, Blanchard and Tipping
JJ) dated 18 September 2000 allowing an appeal and dismissing a
cross-appeal from a decision of Fisher J in the High Court of New
Zealand dated 16 August 1999: [2000] 1 NZLR 101. Conditional
leave to appeal from this judgment to the Privy Council was given
by the Court of Appeal on 23 November 2000. The appellants are
three local authorities and the New Zealand Local Government
Association Incorporated. The respondents are the Attorney-General
and the Valuer-General.
2. The issue which the appellants have raised relates to one of the
key components of the district valuation roll prepared under the now
repealed section 8 of the Valuation of Land Act 1951 (“VLA 1951”).
Section 8 of that Act set out the particulars which the valuation roll
[2002] UKPC 47

was to include “in respect of each separate property”. The question
is whether the expression “separate property” in this context means
a property as defined by a certificate of title, with the result that a
single entry must be made even in cases where the land to which the
certificate of title relates is occupied by two or more separate
occupiers as defined by the Rating Powers Act 1988 (“RPA 1988”),
or whether it means a property as defined by the unit of occupation.
3. The Valuer-General, Mr Quinn, explained his approach to this
problem in this way in paragraph 4.1 of his affidavit:
“The term separate property is not defined in either the VLA
or the RPA. That is left over to the Valuer-General. In
summary, the Valuer-General’s basic trigger to create a
separate property entry on the district valuation roll is the
creation of a separate unit of ownership. As New Zealand
uses the Torrens system, the existence of a separate certificate
of title has been a key element in that decision as that
identifies the owner’s land to be valued and that which would
sell on the market. The main trigger to create a rating
apportionment for a territorial authority has been the existence
of a lease of 12 months or more. This is driven by the
territorial authority’s desire to maintain and identify occupier
details on the rate record. However, identification of the
owner’s land (the separate property) is quite different from
needing to record on the rates record different occupiers of
that land (rating apportionments).”
4. As the quotation from Mr Quinn’s affidavit indicates, the
Valuer-General’s contention is that for there to be a separate
property within the meaning of section 8 of VLA 1951 there had to
be certificate of title or something similar such as a separate strata or
unit title. For the local authorities and the association it was
contended that occupation was a sufficient criterion for the
identification of a property as separate property. The argument for
the local authorities and the association that the approach intended
by the legislation was that based on the unit of occupation was
upheld by Fisher J. His decision on this point was reversed by the
Court of Appeal. They held that the expression “separate property”
meant a property as defined by the certificate of title: para [57].
That conclusion was based on their view as to its ordinary meaning
in its land law and statutory context: para [23]. On their approach
the relevant criterion was the unit of ownership.
5. The appellants submit that the decision of Fisher J that
occupancy was a sufficient criterion was correct and that the

declarations which he made to that effect should be reinstated. But
they did not seek to argue before the Board the point which they
raised in their cross-appeal to the Court of Appeal, which was that
the declarations which the judge made did not go far enough. They
had contended before Fisher J that any form of separate occupation
was enough, irrespective of whether it was occupation within the
meaning given to that expression by section 2 of RPA 1988. An
“occupier” as defined by that section is a person with a right to
occupy the land by virtue of a tenancy granted for a term of not less
than 12 months certain. The judge said, at p 16 of his judgment, that
the more limited definition of this expression in section 2 of RPA
1988 lay at the heart of the “occupation” concept as imported into
section 8 of VLA 1951. The appellants now accept that this is so, and
it was on this basis that they invited the Board to hold that the
approach based on the unit of occupation was the approach which
was intended by the legislature.
The importance of the issue
6. The rating powers of local authorities are very wide. At the
relevant time they were set out in Part II of RPA 1988. Territorial
authorities had power under section 19 to make and levy uniform
annual general charges on every separately rateable property in the
district or a subdivision of the district. The expression “separately
rateable property” was defined as “a property entered as a separate
property in the district valuation roll which is rateable property in
terms of this Act:” RPA 1988, section 2. Uniform annual general
charges are to be contrasted with general and special rates, which
were levied either as a uniform rate in the dollar on every rateable
property or on a differential basis under sections 79 to 83 of the Act:
RPA, sections 12 and 16. They are also to be contrasted with
separate uniform annual charges for the ordinary supply of water
and refuse collection and disposal, which attached to “each
separately used or inhabited portion of the property or building”:
RPA 1988, section 24(1). Those charges could be levied on each
separately used or inhabited portion of the property, irrespective of
whether the person against whom they were levied was the occupier
of that portion as defined by the Act. The problem which has been
identified in this case relates only to the system for levying uniform
annual general charges.
7. The Valuer-General’s approach was to determine a single value
for the property described in a single certificate of title. He then
apportioned that value on a pro rata basis between the various
premises, if any, within that unit of property which were occupied by
different persons with a right to occupy the land by virtue of a

tenancy granted for a term of 12 months or more. Where any
property for which there was a single certificate of title was in
multiple occupation his practice was to make a single entry in the
valuation roll for the property as a separate property and then to
make a sub-entry for each of the multiple occupancies. Where these
apportionments were made most councils treated the sub-entries as
separate properties. They did so with a view to achieving a result
which appeared to them to be appropriate and equitable: see
Wellington City Council v Woolworths New Zealand (No 2) [1996]
2 NZLR 537, 545 per Richardson P. They levied uniform annual
general charges against each of the sub-entries which were the result
of the process of apportionment and not on the properties identified
in the valuation roll as a separate property. The charges were paid
by the occupiers on the assumption that the properties on which they
were levied were separately rateable under VLA 1951.
8. Questions then arose as to whether the councils were right to
treat these sub-entries as separately rateable properties and, if not, as
to whether by levying uniform annual general charges on sub-entries
they had acted illegally. The effect of the Court of Appeal’s decision
is that only the head entry, which reflected the unit of ownership
represented by a separate certificate of title, was a separately rateable
property within the meaning of RPA 1988, section 2. As uniform
annual general charges could only be levied against a separately
rateable property, the decision appears to have put at risk the
councils’ aim of achieving equity and consistency between
occupiers. The problem was described by Fisher J in his judgment
at p 9:
“There is an inherent anomaly in exacting six uniform rates or
charges from six households occupying the land in six
separate certificates of title, but only one uniform rate or
charge for the land contained in one certificate of title
notwithstanding occupation by six otherwise identical
households.”
9. The anomaly is most clearly demonstrated where the two sets
of properties are physically indistinguishable and are used and
occupied in the same way. Various examples of this situation are
described in the Record. They include industrial premises as well as
self-contained residential flats and dwellings. The Court of Appeal
were not asked to consider the legal consequences of their decision,
but the appellants have indicated that the territorial authorities
concerned may be liable to repay charges levied by them amounting
to about $36m. The estimated total liability nationwide is said to
amount to 1.2% of the councils’ overall annual operating income.

10. The Court of Appeal said when it decided to grant leave that the
question of law as to the meaning of the expression “separate
property” was important not only for the past but also for the future.
This is because the system of valuation described by the Rating
Valuations Act 1998, which repealed and replaced that laid down by
VLA 1951 with effect from 1 July 1998, was also based on “separate
property”: see section 7 of the 1998 Act. But sections 14 and 17 of
and Schedule 2 to the Local Government (Rating) Act 2002 have
introduced an entirely new system for defining categories of rateable
land. So the focus of attention in this appeal has been throughout on
the meaning which must be given to this expression in the context of
the now repealed legislation.
11. The complexity of that legislation is such that the question
which has been raised in this case is far from easy. The Board are
also conscious of the fact that it must be answered in the light of the
role which is given to a certificate of title under the Torrens system
in New Zealand, and that there are important differences between the
legislation which gives power to local authorities to levy rates and
charges in New Zealand and the legislation in the United Kingdom
with which they are familiar. This is a highly technical field of law,
and their Lordships’ task has been greatly assisted by the careful
judgment of the Court of Appeal delivered by Keith J to which they
wish to pay particular tribute.

Historical background
12. Although the Board is concerned in this case with the meaning
of the expression “separate property” in section 8 of VLA 1951, it is
of some importance by way of introduction to examine the historical
background. The significance of land as a source of taxation had
been recognised both in England and in Scotland from the earliest
times. Originally it was the principal source from which the Crown
derived its revenue. The Domesday Book was a valuation roll:
O’Keefe, The Legal Concept and Principles of Land Value
(Butterworths, Wellington, 1974), para 2.1. This can be attributed to
the fact that land was the most significant element in the national
economy. It later became the basis for the assessment of a wide
variety of taxes for local and municipal purposes such as relief of the
poor. No doubt this was because it was easier to impose these
burdens on the value of land rather than the value of other kinds of
property. But the system grew up in a haphazard fashion. The

various public bodies charged with the imposition of rates for local
and municipal purposes each had to make up their own valuation roll,
and these were often prepared from insufficient data and on different
principles. Radical reform was needed, and it came in the nineteenth
century.
13. The foundation of the modern system of land valuation for
rating in Scotland, whose system has always been separate from that
in England and Wales, was laid by the Lands Valuation (Scotland)
Act 1854. It established a uniform system for the valuation of lands
and heritages in Scotland according to their yearly rent or value by
means of which all local assessments could be collected. It also
required details to be given in the valuation roll of the nature of the
subjects and the names of their proprietors, tenants and occupiers.
As a result there was produced a reliable inventory of the heritable
property in each local authority area. This became available for use
for other purposes such as the voters’ roll, as at that time the right to
vote was dependent on the ownership of land. But its principal
purpose was to provide the basis for obtaining revenue by means of
rates levied on the value of the property.
14. The basic principles which that Act established remained
unaltered until the system was revised and brought more closely into
line with that of England by the Valuation and Rating (Scotland) Act
1956. Liability for rates, which had previously been charged partly
on owners and partly on occupiers, was transferred by that Act
entirely to occupiers. The actual rents passing were no longer to be
conclusive as to annual value, which is the basis upon which the
rateable value of property is assessed under the Act except in cases
where it is determined by means of a statutory formula. Annual
value was to be assessed instead on the basis of a hypothetical rent,
with a view to ensuring that the same level of value was used for all
comparable properties in the same valuation area. As the entire
liability for the payment of rates was transferred by the statute to the
occupier, it came to be recognised in practice that the unit of
property which was to be valued and entered in the valuation roll
was to be measured by the unit of occupation and not by the unit of
ownership. But, following the position which had long been
established in England, occupation had to have the character of
permanence for it to be rateable: R v The Assessment Committee of
St Pancras (1877) LR 2 QB 581, per Lush J at p 588; Westminster
Council v Southern Railway and Others [1936] AC 511, per Lord
Russell of Killowen at pp529-530; John Laing and Son Limited v
Assessment Committee for Kingswood Assessment Area [1949] 1
KB 344.

15. The development of legislation as to valuation and rating in
New Zealand has a similar history: O’Keefe, The Legal Concept and
Principles of Land Value, para 2.1; O’Keefe, The Law of Rating
(Butterworths, Wellington, 1975), paras [102]–[103]. The general
idea of levying rates on the occupiers of land was derived from
England. Auckland, for example, was constituted a borough under
the Provincial Councils Ordinance by charter in 1851 with the
ordinary powers of an English town council. This included the
power to levy rates. In Dunedin the Town Board had power under
its Ordinance of 1855 to levy rates on the net annual value of land
within its area. The Wellington Town Board Ordinance set up a
local authority in 1862 with power to rate on the capital value of land.
As the system spread, different provinces used different valuation
systems. Rates were all levied on land, but the English approach of
valuing the land by reference to its annual value had been departed
from in many cases by 1876 when the system of provincial
government in New Zealand came to an end. In the same year,
recognising the importance of local finance from rates, the General
Government introduced a uniform system for the making and
levying of rates on annual value: O’Keefe, The Law of Rating, para
[104]. But it was not long before annual value as a uniform system
was displaced by capital value. That system was made compulsory
by the Rating Act 1882, except in the case of boroughs established
as municipal corporations which were given the option of bringing
themselves within that system by resolution.
16. The Municipal Corporations Act 1867 introduced some
uniformity into the government of new municipalities, and it is from
that date that the development of the modern system in New Zealand
can be traced. Section 205 provided that rates were to be levied
“upon every person who occupies or if there be no occupier then
upon the owner of any rateable property”. Section 213 of that Act
provided that the valuation of the rateable property was to be
computed at its annual value, “that is to say at the rent at which the
same might reasonably be expected to let from year to year”.
Section 216 provided that the valuation was to be in the form stated
in the Sixteenth Schedule, which set out the particulars to be given
“with regard to each rateable tenement or hereditament” in the
valuation list. These provisions appear to have been designed
according to the English model. While they describe the property
itself as rateable, the primary liability attaches not to the property as
such but to the occupier: see Ryde on Rating and the Council Tax
(Butterworths), para B[52]–[53]. They also indicate that, as the
occupier was to be primarily liable for the rates assessed on rateable
property, the unit of valuation was not to exceed the unit of
occupation.

17. It should be noted that the basic elements of this system were in
place some years before the introduction into New Zealand of the
land transfer system adopted by the Land Transfer Act 1870.
Moreover the introduction of that system did not result in a
reconstruction of the system for making up the valuation roll. There
is no sign in the legislation of this period that it was the intention that
these two systems should be linked to each other. That would not, of
course, have been practicable at the outset. As late as 1923 it was
estimated that about one-fifth of the land in New Zealand was still
held under the Deeds system: Butterworths Land Law in New
Zealand (1997), para 2.026. It was not until 1951 that the task of
bringing all Deeds system titles under the Land Transfer Act was
officially regarded as complete.
18. The system which was laid down by the Municipal
Corporations Act 1867 was amended from time to time by
subsequent enactments, but the essential features remained the same.
Section 2 of the Rating Act 1882 defined the expression “rateable
property” as meaning, with certain exceptions, “all lands, tenements
or hereditaments in the colony”. Section 4 of that Act provided that
the valuation roll was to state for all rateable property in the district
“belonging to each separate owner, or occupied by each separate
occupier” the rateable value of the same, with the names,
occupations and addresses of the owners or occupiers. Section 28
provided that the occupier was to be primarily liable for all rates.
The expression “occupier” was defined in section 2 as meaning “the
person by whom or on whose behalf any rateable property is actually
occupied, if such person is in occupation by virtue of a tenancy
which was for not less than six months certain” or, in other cases, the
owner. This gave statutory recognition to the principle that a degree
of permanence was necessary for occupation to be rateable. From
now on, only occupiers as so defined were to be treated as in rateable
occupation of the property.
19. The Rating Act 1894 retained the system by which the occupier
was primarily liable and section 2 of the Act included the same
definition of the expression “occupier”. But it was more explicit as
to the treatment which was to be adopted where a property was
occupied by more than one person with different degrees of interest
in the property. Section 11 provided that in that event “a separate
valuation shall be made of the interest of each such occupier, and his
name entered in the column of occupiers in the valuation-list”. Here
again there is a clear indication that the unit of valuation was not to
exceed the unit of occupation as defined by the Act. Where two or
more persons were found to be in separate occupation of a property,

separate valuations had to be made of the interest of each occupier,
and separate entries had to be made in respect of each of them in the
valuation roll. Both annual value and capital value were available to
enable the rateable value of their interests to be assessed.
20. It was not until the office of the Valuer-General was established
by the Government Valuation of Land Act 1896 that the phrase “in
respect of each separate property” was introduced into the
legislation. Section 4 of the Act provided that the Valuer-General
was to prepare a general valuation-roll of all landed properties in the
colony. But continuity with the system laid down by the 1894 Act
was preserved by the provision in section 6 that the general valuation
roll was to be compiled from the district valuation-rolls prepared
under that Act. Section 5 provided that the general valuation roll
was to set forth certain particulars “in respect of each separate
property” including “the name of the occupier and owner within the
meaning of the Rating Act 1894”. The expression “separate
property” was not defined. There is nothing in the context in which
it appears to indicate that it meant a property as defined by a
certificate of title under the Land Transfer Act. On the contrary, the
instruction in section 11 of the 1894 Act that a “separate valuation”
was to be made where property was occupied by more than one
occupier indicates that the intention was that the interest of each
person who was in rateable occupation of the property was to be
entered separately in the general valuation roll.
21. The conclusion which their Lordships draw from this brief
historical review is that at least up to this point, when the land
transfer system introduced by the Land Transfer Act 1870 was still
in its relative infancy, the unit of valuation contemplated by the
rating legislation was the unit of occupation. This was to apply not
only to a property which was occupied by only one person or by
joint occupiers but also to cases where a property in a single
ownership was occupied by more than one occupier.
The system under VLA 1951 and RPA 1988
22. The question then is whether the system laid down by VLA
1951 required a different approach to be taken to identify the unit
which was to be valued and entered as a separate entry in the
valuation roll in cases where there was more than one occupier. This
Act, according to its long title, was “An Act for the compilation of
certain enactments relating to the periodical valuation of landed
properties”. It provided for the appointment of officers to administer
the valuation system, for the creation of district valuation rolls, the

hearing of objections to valuations and the general administration of
the valuation system. It was a consolidating statute.
23. As a general rule an investigation of the statutory predecessors
of provisions in a consolidating statute is to be avoided, especially
where the issue concerns the meaning of a single word or a single
expression. It is apt to reduce the benefit which the process of
consolidation is designed to achieve. As Lord Simon of Glaisdale
said in Maunsell v Olins [1975] AC 373, 392, the very purpose of
consolidation is to enact a compendious code standing on its own
with a view to making it unnecessary to scrutinise the repealed
statutes which are consolidated. But the rule is not an absolute one.
There may be cases where is it necessary to consider the earlier,
consolidated provision in its original context, bearing in mind that
the overriding aim is to give effect to the intention of Parliament as
expressed in the words used: R v Secretary of State for the
Environment, Transport and the Regions, ex p Spath Holme Ltd
[2001] 2 AC 349, 388, per Lord Bingham of Cornhill. In their
Lordships’ judgment this is such a case. The true meaning of the
expression “separate property” cannot be properly understood
without examining the factual context in which those words were
first enacted. It requires to be read in the light of the historical
background.
24. Some important amendments were made to VLA 1951 by
subsequent legislation. Section 2 of the Rating Act 1967 altered the
definition of occupier, which was now defined in relation to any land
as “the owner thereof, except where a person other than the owner
has a right to occupy the land by virtue of a tenancy granted for a
term of not less than twelve months certain, in which case the term
‘occupier’ means that other person”. Section 62 of that Act provided
that the occupier of any rateable property was to be primarily liable
for the payment of all rates becoming due and payable while his
name appeared on the rate records as the occupier of the property.
The Valuation of Land Amendment Act 1981 added a new
subsection (2) to section 8 of LVA 1951 which set out the particulars
to be entered in the district valuation roll. The Valuation of Land
Amendment Act 1988 inserted into the valuation legislation the
provisions which had previously been contained in the rating
legislation dealing with annual value valuation rolls. One of the
amendments made by this Act was the insertion by section 5(2) into
section 8 of VLA 1951 of section 8(1A), which set out the
particulars to be entered in the district valuation roll in the case of
valuations made on the basis of annual value. Finally, RPA 1988
consolidated and amended the previous legislation dealing with the
rating powers of local authorities together with that dealing with

various procedural aspects relating to the making and levying of
rates.
25. Section 8 of VLA 1951, in its amended form, was as follows:
“(1) A district valuation roll shall be prepared for each district
by the Valuer-General, and shall be in the prescribed form,
and shall set forth in respect of each separate property the
following particulars
(a)

The name of the owner of the land, and the nature of his
estate or interest therein, together with the name of the
beneficial owner in the case of land held on trust:

(b)

The name of the occupier …

(c)

The situation, description and area of the land:

(d)

The nature and value of the improvements:

(e)

The land value of the land:

(f)

The capital value of the land:

(ff)

Where applicable, the special rateable value or the
rates-postponement value of the land:

(g)

Such other particulars as are prescribed.

(1A) An annual value valuation roll shall also be compiled by
the Valuer for any district of a territorial authority where the
annual value rating system is in force, and shall in the
prescribed form contain for each separate property the
following particulars:
(a)

The name of the owner:

(b)

The name of the occupier:

(c)

The situation and description of the property:

(d)

The annual value:

(e)

Where applicable, the rates postponement value or the
special rateable value, as the case may require:

(f)

Such other particulars as may be prescribed.

(2) For the purposes of this section any land that is capable of
separate occupation may, if in the circumstances of the case it
is reasonable to do so, be treated as separate property whether
or not it is separately occupied.”
26. The following expressions which appear in that section were
defined:
(a)

“Owner” meant “the person who, whether jointly or
separately, is seised or possessed of or entitled to any
estate or interest in land:” VLA 1951, section 2.

(b)

“Occupier” had the same meaning as in section 2 of
RPA 1988, which provided that, in relation to any land,
it meant “the owner thereof, except where a person
other than the owner had a right to occupy the land by
virtue of a tenancy granted for a term of not less than 12
months certain, in which case the term ‘occupier’
means that other person.” VLA 1951, section 2
incorporating RPA 1988, section 2.

(c)

“Land” meant “all land, tenements and hereditaments,
whether corporeal or incorporeal, in New Zealand, and
all chattel or other interests therein, and all trees
growing or standing thereon”: VLA 1951, section 2.

(d)

“Capital value” of land meant “the sum which the
owner’s estate or interest therein, if unencumbered by
any mortgage or any charge thereon, might be expected
to realise at the time of valuation if offered for sale on
such reasonable terms and conditions as a bona fide
seller might be expected to require:” VLA 1951,
section 2.

(e)

“Annual value”, in relation to any rateable property,
meant “the rent at which the property would let from
year to year, deducting therefrom 20 percent in the case
of houses, buildings, and other perishable property, and
10 percent in the case of land and other hereditaments;
but in no case shall it be less than 5 percent of the
capital value of the fee simple of the property.” VLA
1951, section 2, inserted by section 2(1) of the
Valuation of Land Amendment Act 1988.

The district valuation roll prepared by the Valuer-General under
section 8 of VLA 1951 was to be the valuation roll for rating
purposes: VLA 1951, section 28, as substituted by section 18 of the
1988 Act; RPA 1988, section 105.
27. The expression “separate property” was not defined either by
VLA 1951 or by RPA 1988. Its meaning must be ascertained from
its text and in the light of its purpose: Interpretation Act 1999,
section 5(1). So far as the text is concerned, the following points can
be made in the light of its immediate surroundings in VLA 1951,
section 8 as amended.
28. The first point is that the expression “separate property” was
used both in subsection (1A) which set out the particulars to be
entered in the valuation roll under the annual value system and in
subsection (1) which set out the particulars to be entered in the
valuation roll under the capital value system. This suggests that the
expression was equally serviceable, and that it was intended to have
the same meaning, irrespective of the method of valuation that was
being used. The second point is that some guidance as to what the
expression means can be found in subsection (2). This subsection
provided that, if land was capable of being separately occupied, it
could be treated as separate property if it was reasonable to do so.
29. There is no doubt that the purpose and effect of section 8(2) of
VLA 1951 was to widen the circumstances in which a property
might be treated as separate property. It permitted land to be treated
as separate property if it was reasonable to do so, whether or not it
was separately occupied. The assumption on which it appears to
have proceeded was that a property which was in fact separately
occupied already fell to be treated as separate property. According to
the definition of the expression “occupier” in section 2 of RPA 1988,
if there was no person other than the owner who had a right to
occupy the property by virtue of a tenancy granted for a term of not
less than 12 months certain, the owner was the occupier. If there was
such a person, that other person was the occupier. Subsection (2)
provides a clear indication that separate occupation as so defined is
the key to the existence of a separate property.
30. In Findlay v Valuer-General [1954] NZLR 76, 78 Judge
Archer made these observations on the effect of section 8 of LVA
1951 and the relevant definitions:
“It is clear from the foregoing provisions of the Act that,
although the valuation roll is described as a roll of ‘separate
properties’ any estate or interest in land which is held in
separate ownership may be a separate property for roll

purposes, and may be valued accordingly. Conversely, it
would appear that nothing can be entered as a property in a
district valuation roll which is not an estate or interest in land.
The statutory definition of ‘land’ appears to be the decisive
factor in determining what may be entered in a district
valuation roll …
It will be noted that the definition of ‘land’ includes ‘all
chattels or other interests therein.’ Leasehold interests in land
may, therefore, be the subject of separate entries in a district
valuation roll.”
31. These observations, with which their Lordships respectfully
agree, were followed in Valuer-General v Radford [1993] 3 NZLR
721. They are important in the present context. The definition of
“occupier” in section 2 of RPA 1988 appears to march hand in hand
with the definition of ‘land’ in section 2 of VLA 1951. A person
who occupies land by virtue of a tenancy granted for a term of not
less than 12 months certain has a leasehold interest in the property
which he occupies. The property which he occupies is capable of
being made the subject of a separate entry in the district valuation
roll as it is a leasehold interest in land. It need not be co-extensive
with the freehold title to the land over which that interest extends. It
need not be comprised in a certificate of title.
32. In Valuer-General v Alfred Kohn Family Trust (1990) LVC
867 the High Court was concerned with the question whether the
land values of four contiguous freehold properties in a commercial
property in central Wellington were to be arrived at by considering
them separately or as one entity. The crux of the appeal was the
meaning which was to be given to section 8 of LVA 1951. After
setting out the provisions of section 8(1) and section 8(1A), Greig J
said:
“What we think is essential in the preparation of the district
roll is, first of all, to identify the separate properties. That
phrase is not defined but it must be the case that separate
occupation is one aspect of that. Subsection 8(2) necessarily
implies that separate occupation and the capability of separate
occupation are two of the ways in which the separate
occupation can be identified. Other matters which the
appellant submits, we think correctly, to be among the criteria
for that identification include separate ownership, different or
distinct land tenure, separate land use and the availability of
separate title.”

As Fisher J pointed out, at p 6 of his judgment, this decision
identifies a useful range of criteria but does not explain the
relationship or priority between them. But here too the fact that the
court was prepared to recognise separate occupation as one aspect of
the matter is consistent with the view that a property did not have to
be defined by a certificate of title in order to qualify as a separate
property.
33. Turning to the guidance which is to be found in RPA 1988 as to
the purpose of the expression “separate property”, its significance
for the purpose of the making and levying of rates is clearly
demonstrated. Section 121, which re-enacted section 62 of the
Rating Act 1967, provided:
“The occupier of any rateable property shall be primarily
liable for all rates becoming due and payable while his or her
name appears in the rate records as the occupier of the
property, and all rates levied under this Act shall be
recoverable in the manner hereinafter provided.”
The occupier was therefore primarily liable for all rates or charges
levied on any separately rateable property, although provision was
made by section 136 for rates in respect of any land to be a charge on
the land and by section 139 for the recovery of the rates from others
if not recovered from the occupier.
34. Section 106 of RPA 1988 dealt with the situation that arose on
a change of owner or occupier. The outgoing owner or occupier was
required to give notice of the change to the territorial authority in
whose district the land was situated, to every other local authority
that made and levied rates on the land and to the Valuer-General:
section 106(2). He was deemed to be the owner or occupier, as the
case might be, for the purposes of recovery of rates under the Act
until the requisite notice had been given: section 106(5). Section
106(6) made the following provision as to what was to happen if the
transaction, whether by way of sale or the granting of a tenancy,
related to part only of the rateable property:
“Every owner or occupier of rateable property who –
(a)

Sells or otherwise transfers a part only of any property
identified in the valuation roll as a separately rateable
property; or

(b)

Grants a tenancy of such part for a term of not less than
12 months certain or a renewal of any such tenancy; or

(c)

Surrenders any tenancy of such a part –

shall, for the purposes of recovery of rates under this Act, be
deemed to be the owner or occupier, as the case may be, of
such part of the property for the balance of the financial year,
unless within that period either(d)

The rateable value of the whole property is apportioned
in accordance with section 120 of this Act; or

(e)

The Valuer or the Valuer-General authorises the
amendment of the valuation roll to record such part of
the property as a separately rateable property.”

35. Section 120(1) of RPA 1988 was in these terms:
“Where during a rating year but before the making of a rate for
that year a local authority receives notice under section 106 of
this Act of –
(a)

The sale or transfer of any part of any rateable property;
or

(b)

The surrender or termination of any tenancy of any
rateable property so far as it relates to part only of the
property comprised in the tenancy, -

the local authority may apportion the rateable value of the
property among the several parts thereof, and the amounts so
apportioned to each part shall be deemed to be its rateable
value for the purposes of this Act until a valuation of that part
made under the Valuation of Land Act 1951 comes into
force.”
36. These provisions show that the grant of a tenancy of part of any
land for a term of not less than 12 months certain was treated in the
same way as the sale of part of that land. The person to whom the
tenancy of the part was granted became the occupier of the land
within the meaning of section 2 of RPA 1988. But, for the purposes
of recovery of rates in respect of the part, the owner or occupier by
whom the tenancy was granted remained the owner or occupier until
steps were taken to provide the part with its own rateable value. The
unit to which the rateable value was to be apportioned under section
120 or valued under VLA 1951 was the part of the land which was
subject to the tenancy. In other words, it was the unit of occupation.
There is no indication here that it was to be defined by a certificate
of title.
37. The Solicitor General said that there were several provisions in
both VLA 1951 and RPA 1988 which assumed that there could be
more than one occupier of a separately rateable property. The Court
of Appeal said that these provisions treated the owner and the

occupier equally or closely linked them: para [29](6). For example,
sections 25A-25G which were originally enacted in 1988 introduced
a system of rates postponement and the use of special rateable values
in a variety of circumstances. Typical of these provisions was
section 25D, which provided for the determination of special
rateable values of single or double-unit dwellinghouses situated in
an area where the rateable value of residential land was influenced
by a demand for multi-unit housing. Subsection (1)(a) of this
section provided that land, “being a separate property”, was to be
deemed to be used for single-unit housing or double-unit housing if,
inter alia:
“There is erected on the land a building or a group of
buildings used or intended to be used solely or principally for
residential purposes and occupied or intended to be occupied
exclusively as the home or residence of a single household or,
as the case may be, 2 households.”
But the wording of this provision, and of the other provisions in this
group, is not inconsistent with the appellants’ argument that there
was a separate property if the household was occupied by a person
who was an “occupier” as defined in section 2 of RPA 1988. It is to
be noted that section 25D(1)(c), following the wording of section
8(2), provided that any land that was capable of separate occupation
might, if in the circumstances of the case it was reasonable to do so,
be treated as a separate property whether or not it was separately
occupied.
38. Fisher J said at p 16 of his judgment that, viewing the picture
overall, he would conclude that in broad terms an occupation
approach was intended. The Court of Appeal said that they did not
see the references to “occupier” and “occupation” in the legislation
as having the significance accorded to them by Fisher J: para [31].
In their view some of the provisions, especially those which affected
the owner, supported what they described as the ordinary, certificate
of title meaning. They referred to section 136 provided that rates
were to constitute a charge on the land, and to section 139 which
enabled the local authority to recover from the owner if the occupier
was in default. In various other respects, such as in regard to the
objection provisions in sections 18 to 20 of VLA 1951 as enacted in
1988, owners and occupiers were given equal treatment.
39. There is, of course, no doubt that ownership is closely
identified in land law, and in particular in the land transfer system,
by a distinct certificate of title. It was for this reason that the Court
of Appeal regarded the fact that separate ownership was identified

by a certificate of title in land law as the starting point: para [26].
But the view which Fisher J reached as to the meaning of “separate
property” seems to be much more in keeping with the importance
which has always been attached to rateable occupation as the
criterion of liability in rating law. In this context it is rating law and
not land law which provides the best guide to what is meant by that
expression. There is no indication in the rating legislation that it was
intended to have the same significance as it undoubtedly now has in
the wider land law context.
40. In Telecom Auckland Ltd v Auckland City Council [1999] 1
NZLR 426 objection was taken to the Valuer’s decision to enter the
utilities as a separate property in the valuation roll. It was held that,
as Telecom had an exclusive right to occupy the portion of soil in
which their lines and booths had been installed, they had an interest
in land for rating purposes. It followed that they were to be regarded
as the owner of that portion of the soil within the meaning of section
2 of RPA 1988 and that the land which they occupied was correctly
entered in the roll as a separate property even though it was not
contained in any certificate of title. This decision followed earlier
decisions of the Court of Appeal about the treatment for rating
purposes of gas mains and electricity lines: Auckland City
Corporation v Auckland Gas Co Ltd [1919] NZLR 561; Hutt Valley
Electric-Power Board v Lower Hutt City Corporation [1949] NZLR
611. It supports the argument that the expression “separate
property” was not tied to the existence of a certificate of title for
rating purposes, as it demonstrates that the “owner” of land within
the meaning of section 2 of RPA 1988 did not have to be the owner
of a freehold interest which a certificate of title had identified.
Apportionments
41. The Valuer-General accepted that it was necessary for him to
distinguish between different occupiers when he was entering the
particulars required by section 8 to be set forth in the valuation roll
in respect of each separate property. His contention is that this could
be done without dividing a property which was in multiple
occupation into separate properties. He said that the result could be
achieved by apportioning the rateable value under section 202 0f
RPA 1988 between the parts which were separately occupied. This
is an important argument. If that section did indeed confer a general
power of apportionment, it would enable the rates and charges for
which each occupier “of any rateable property” was liable under
section 121 of RPA 1988 “as the occupier of the property” to be
identified. That would meet the problem which this case has
identified. But if it did not, this would strengthen still further the

appellants’ argument that the unit of occupation was the criterion
that was to be used to identify the extent of the rateable property.
42. Section 202 of RPA 1988 was in these terms:
“(1) Where it is necessary to apportion the rateable value of
any rateable property between 2 or more portions of the
property, the rateable value shall be apportioned in such
manner as the Valuer-General, or, as the case may be, the
Valuer for the district, thinks fit, so that the rateable value of
each portion, when added to the rateable value of the
remaining portion or portions of the property shall equal the
rateable value of the whole property.
(2) Each such occupier may object to such apportionment as if
it were a valuation, and the provisions of the Valuation of
Land Act 1951 relating to objections, as far as they are
applicable and with the necessary modifications, shall apply
accordingly.
(3) Notwithstanding anything in the foregoing provisions of
this section, where the occupier of a portion of any rateable
property is the lessee or licensee under a lease or licence or
has entered into an agreement with the owner, and the lease or
licence or agreement specifies the portion of the rates in
respect of the whole property that are to be paid by that
occupier, the rateable value of that portion of the property
shall be the sum which bears to the rateable value of the whole
property the same proportion that the portion of the rates
payable by the occupier pursuant to the lease or licence or
agreement bears to the total amount of the rates payable in
respect of the whole property.”
43. It is to be noted from the opening words of the subsection that
the power to apportion in section 202(1) applied only where
apportionment was “necessary”. The context for that expression
was provided by the following provisions elsewhere in RPA 1988
which require an apportionment of the rateable value to be made
between parts of the property:
(a) Section 4(4) and 6(2) required this to be done where part of a
separately rateable property was deemed not to be rateable
property. In that situation the rateable value of the whole had to
be apportioned in order to determine the part of the rateable
value for which the occupier of the part which was rateable was
primarily liable. Sections 4(4) and 6(2) provided that in that

event section 202 was to apply in relation to the apportionment.
(b) Section 105(4)(b) provided that where land was differentially
rated the rateable value of the property was to be apportioned
among its different parts. Here again it was necessary for this
to be done in order to identify the extent of the liability of the
occupier of each part. Section 105(5) provided that section 202
was to apply to any apportionment under section 105(5)(b).
(c) Section 120(1), to which reference has already been made,
enabled the same exercise to be carried out where, during the
rating year but before the making of a rate in that year, there
was a sale or transfer of part only of a separate property.
(d) Section 179(1) gave power to a local authority to remit or
postpone the payment of any rates in respect of certain types of
land, and section 179(2) directed a local authority to remit half
of the payment any rates and any uniform annual charges in
respect of land of certain other types. Section 179(5) provided
that, where in any case part only of any separately rateable
property fell within these types, section 202 was to apply.
44. The reason why these provisions required an apportionment to
be made was to enable the rates liability of each part of a separately
rateable property to be identified in situations where the liability of
each part was different. The purpose of section 202 appears then to
have been to lay down the methods by which the apportionment was
to be done where this was required elsewhere in the Act. Section
202(2) gave a right of objection to an apportionment by the
Valuer-General to each occupier. The words “where it is necessary
to apportion” in section 202(1) do not seem to be apt if the intention
was to confer a separate power on the Valuer-General to apportion
the rateable value in situations where an apportionment was not
directed by the Act whenever he thought that this was appropriate.
The Court of Appeal said that the power in section 202(1) of RPA
1988 was not presented as an ancillary power: para [53]. But that
indeed is what it appears to be when it is read in the context of the
Act as a whole. Their Lordships agree with the conclusion of the
High Court in Auckland City Council v The Big Fresh Food Co
(Auckland, M165/94, 6 July 1995), pp 8-9 that section 202(1) did
not create a power to apportion where none already existed, but
rather that it outlined the formula to be used where an apportionment
had become necessary for some other reason.

45. Section 202(3) of RPA 1988 dealt with the situation where the
occupier of a portion of any rateable property had entered into a
lease or licence or any other agreement with the owner which
specified the portion of the rates that were to be paid by that occupier.
In that situation the apportionment was to be determined by the
agreement with the owner and not by the Valuer-General. Fisher J
said at p 12 of his judgment that it seemed to him to be implicit in
section 202(3) that a given rateable property might have more than
one occupier. At first sight this is difficult to reconcile with an
approach based on the unit of occupation under which each separate
property would have its own occupier. But the word “occupier”
appears to have been used here in a more general sense than that
indicated by the definition of this expression in section 2 of RPA
1988. This is because it is not confined to occupiers under a tenancy
for a term of not less than 12 months certain, but includes an
occupier under a lease of whatever term and an occupier under a
licence. For this reason the better view is that section 202(3) does
not cast any useful light on the meaning which is to be given to the
expression “separate property”.
Practical considerations
46. As the Court of Appeal pointed out in paras [19]-[22] of their
judgment, there are a variety of different fact situations that could
arise under the provisions of section 8 of LVA 1951. There were
three relevant variables. The number of occupancies within any
given property might be greater than the number of certificates of
title. Or the number of certificates of title might be greater than the
number of occupancies. Or one person or more might own different
certificates of title if there was more than one of them. Various
situations within these variables might be envisaged which are of
greater or lesser complexity.
47. It would, of course, be highly significant if there was evidence
that an approach based on one or other of the competing
interpretations of the expression “separate property” would have
resulted in a system that was impractical. But all of these situations
would appear to have been capable of being dealt with satisfactorily
once the unit that was to be adopted as separate property had been
identified. If it was to be measured by the unit of ownership, the
number of distinct uses or occupancies could be disregarded for the
purposes of the valuation exercise. All one needed to do was to
identify the extent of the “land” held under each certificate of title.
Each unit of ownership would then be the subject of a separate entry
in the valuation roll, and it was also be the unit of valuation.
Conversely, if the unit to be adopted was the unit of occupation, the

question whether it was co-extensive with a certificate of title would
not have been decisive of the unit which was to be entered as
separate property. If the owner was the occupier, the extent of his
ownership as disclosed by the certificate of title would determine the
extent of the separate property. But if a person who was in
occupation by virtue of a tenancy granted for a term of not less than
12 months was the occupier the extent of the separate property
would be determined by the extent of his leasehold interest in the
land, not by the certificate of title of the person who granted the
tenancy.
48. This approach is consistent with what section 8 required as to
the entries to be made of the other particulars. Section 8 of LVA
1951 used the expressions “owner” and “occupier” in the singular.
It did not say what particulars were to be entered in the roll under
each heading if there was more than one owner or more than one
occupier, as the case might be. But the normal rule of interpretation
is that the singular includes the plural. So the section may be taken
to have contemplated the entry of more than one name under each of
these headings where this was appropriate.
49. Nor is there any reason to think that either of the two
approaches would give rise to difficulty at the stage of valuation. As
Fisher J said at p 13 of his judgment, to comply with particulars (e)
and (f) of section 8 of VLA 1951 the separate property had to be
capable of attracting its own individual land value and capital value.
But this does not mean that it would have been impractical to treat
as separate property parts of the land that were smaller than the land
contained in the certificate of title. Smaller areas of land might not
have been saleable at law, but this does not mean that they were
incapable of valuation. The valuation exercises which were directed
by the Act did not require evidence of actual transactions relating to
the property that was to be valued. They were based instead upon a
hypothesis. The definitions in section 2 of VLA 1951 show that a
hypothetical rent had to be determined where an annual value was
required, and that a hypothetical capital value had to be determined
where this was to be the basis of rateable value.
50. The witnesses were agreed that, while the valuation of different
types of property might involve different degrees of difficulty, all
areas of land and all forms of tenure are ultimately capable of
valuation. Mr Robert McGough for the appellants said in his
affidavit that there is no doubt that a piece of land which is not
contained in its own certificate of title can be valued and that valuers
frequently undertake such tasks. Mr Allen Pratt Pegler, who was
until 1998 the Assistant Valuer-General, said that he accepted the

argument that anything can be ascribed a value, although he made
the point that a valuation is more likely to be challenged if it cannot
be validated by reference to reliable market data.
The
Valuer-General, Mr Warwick Quinn, said that he agreed with Mr
McGough that there was no valuation reason why properties without
a certificate of title could not be valued, although he too drew
attention to the issues that may arise where valuers are working in an
evidentiary vacuum.
51. There is no doubt that the approach based on a certificate of
title is better suited to a system which seeks to rely on the
comparative principle of valuation, which is the one with which the
Valuer-General plainly feels more comfortable. Figures based on
sale prices which have received wide acceptance in the open market
are likely to provide the best indication of the capital value of
comparable properties. But the valuer’s art is not incapable of
providing other solutions if no such evidence is available. As Lord
Dunedin said in Port of London Authority v Assessment Committee
of Orsett Union [1920] AC 273, 295:
“If the subject is an ordinary one similar in character to other
subjects which have stood the test of the markets, or better still,
if it has stood the test of the market itself without disturbing
circumstances, the inquiry is simple. But when the nature and
circumstances of the hereditament in question do not admit of
such a test, some other way must be found.”
52. The Solicitor General said that the concept of a separate
property involved something that was tradeable, and that a tenancy
granted for a term of not less than 12 months certain could not be
regarded as consistent with the type of transactions of which records
would be kept for the purposes of giving effect to the legislation.
But this submission overlooks the fact that the valuation that was
required by section 8 was the capital value of the land or the annual
value of the property as the case may be, not of the tenant’s interest
in it. It was the sum which the owner’s interest in the land, if
unencumbered, might be expected to realise if offered for sale on
reasonable terms on the open market, or the rent at which the
property would be expected to be let from year to year subject to the
statutory deductions. This principle was capable of being applied to
each part of a property in a single ownership which was in multiple
occupation in the same way as it was applied to cases where each of
the parts in separate occupation were in separate ownership.
53. There is therefore no compelling reason for rejecting the
argument that a separate property was to be measured by the unit of

occupation on the ground that it would have created a situation
which was unworkable. In any event, as both Fisher J at p 14 and the
Court of Appeal at para [56] observed, the ultimate test is the
meaning of the statute rather than the convenience of those
administering it.
Conclusion
54. The expression “separate property” has to be given a meaning
which is appropriate to its context. Its purpose was to describe the
extent of the property which was to be entered on the valuation roll
with a view to its being identified as rateable property so that rates
could be levied on the occupier. The starting point is to be found in
the rating legislation and not, as the Court of Appeal thought, in the
function which a certificate of title has in land law.
55. The legislative origin of the expression shows that it could not
have been intended to mean a property as defined by a certificate of
title when the expression was first used in 1896. Subsequent changes
in the legislation up to and including the changes introduced by RPA
1988 do not reveal an intention that it should be given that meaning
when it was re-enacted in section 8 of VLA 1951. Read as a whole
the legislation as it had developed indicates the contrary. Primacy
was given to the concept of rateable occupation and to the liability
of the occupier of rateable property. In this situation very little, if
any, weight can be attached to the meaning which the expression has
in the wider land law context. The overriding consideration is that
the unit of occupation determined the extent of the property which
was to be valued for the purpose of levying rates on the occupier.
56. For these reasons their Lordships are unable to agree with the
Court of Appeal that the expression meant a property as defined by
a certificate of title. They consider that Fisher J was right to
conclude that separate occupation rather than a separate title was the
basic criterion.
57. Their Lordships will humbly advise Her Majesty that this
appeal should be allowed and that the declarations which were made
in the High Court should be restored. Neither side sought an order
for costs in the courts below, and it was agreed that there should be
no order for costs before the Board.

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