The Commissioner of Land Tax has forwarded the following memorandum for advice:

1 shall be glad if you will be so good as to favour me with your opinion in the following case. As the matter is one of urgency I would ask that it be treated as special.

On 27 February 1886 the Government of Western Australia entered into a contract with Mr John Waddington through his Attorney, Mr R. Price Williams for the construction of a land-grant railway from Guildford, W.A. to the southern terminus of the Geraldton-Greenough Railway, and agreed to pass the necessary legislation to ratify the contract and permit of transfer of the concession to a company or syndicate who should undertake the work.

The legislation ratifying the arrangement was passed on 2nd September 1886⁽¹⁾, and at a subsequent date the Midland Railway Company was formed to take over Mr Waddington's rights and liabilities under this contract. I have no particulars relating to the constitution of the Company but assume that it merely takes the place of the original contractor as I know of no legislation affecting the position.

The contract provided inter alia for the construction of the railway and accessories and in consideration therefor (the railway remaining the property of the Company) the Government undertook to grant:

(1) the site of the railway and associated buildings and works;

(2) blocks of 12000 acres in extent for each mile of railway constructed and open for traffic.

The railway was divided into 20 mile sections and the contract provided for grant of the railway and building sites on completion of the section contiguous thereto.

The contract also provided (sec. 49) for grant of the land subsidy referred to-the land to be selected by the contractor within 12 months from the opening of each 20 mile section of the railway.

Sec. 52 of the contract provides that 'on the completion and opening of each section and as soon as the contractor shall have selected the lands to be granted to him in respect whereof the Government will issue to the contractor land certificates or deeds of gTant of one moiety of the lands so selected; the portions to be comprised in such certificates or grants to be approved of by the Government but so as to give if required a reasonably fair proportion of such frontage to the railway as the whole of the lands so selected shall have.'

Sec. 53 provides that 'on the completion and opening of the whole of the railway ... the Government will issue to the contractor like certificates or deeds of grant for the remaining moiety of the land so selected.'

The Company claims that its lands should be valued as if no railway were in existence i.e. on the assumption that the railway is an improvement appertaining to the land which in valuation for assessment must be assumed as not having been made. Advice is sought as to whether the law supports this contention. Also, in the event of an opinion that they do, are purchasers from the Company in a like position?

The documents referred to herein are enclosed.

By section 3 of the Act⁽²⁾ the unimproved value of land means 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 and made or acquired by the owner or his predecessor in title had not been made.

The question is whether the railway is an improvement appertaining to the land of the railway Company.

The word 'appertaining' in the definition means, I think, nothing more than 'belonging to' (vide Stroud's Judicial Dictionary, 2nd edn, p. 100).

The railway was built for the purpose of opening up the whole of the country within its vicinity and not necessarily only the land of the railway Company adjacent to the railway.

I do not think that the railway is an improvement belonging or appertaining to the land held by the Company so as to be an improvement within the meaning of the definition.

The railway is undoubtedly for the benefit of the whole of the district through which it runs, and incidentally for the whole community, but it cannot be said to appertain or belong to that land or any particular portions of it.

In my opinion, the contention of the Company is not correct.

[Vol. 13, p. 278]

(1) The Guildford-Greenough Flats Railway Act 1886 (W.A).

(2)The Land Tax Assessment Act 1910-1914.