Ardoch Pty Ltd v Valuer-General (No 2) - [2006] SASC 217

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
ARDOCH P/L v VALUER-GENERAL (No 2)
[2006] SASC 217
Judgment of The Honourable Justice Debelle
25 July 2006
REAL PROPERTY - VALUATION OF LAND - OBJECTIONS AND APPEAL
Appeal against the disallowance by Valuer-General to an objection - valuation of the land - buildings on land listed on State Heritage Register - effect of heritage listing upon subject land - valuation approaches - definition of "site value" - appeal dismissed.
Development Act 1993 (SA) s 4, s 32, s 37, Part 11; Heritage Act 1993 (SA) s 36; Heritage (Heritage Directions) Amendment Act 2005 (SA); Land Tax Assessment Act 1910 (Cth) s 3; Valuation of Land Act 1971 (SA) s 5, s 22A, s 22B, s 24, s 25C, Div 1, Div 2; Valuation of Land Act 1916 (NSW) s 6; Development Regulations 1993 (SA) reg 24, Sch 3, Sch 4, Sch 8, referred to.
Brisbane City Council v Valuer-General (Qld) (1978) 140 CLR 41; Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616; Gollan v Randwick Municipal Council [1961] AC 82; Goode v Valuer-General (1979) 22 SASR 247; Perpetual Executors & Trustees Association of Australia Ltd v Federal Commissioner of Taxation (1948) 77 CLR 1; Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat & Livestock Corporation (1980) 29 ALR 333, applied.
101 Collins Street v City of Melbourne (1995) 87 LGERA 207; Ballow Chambers Ltd v Valuer-General (1993) 14 QLCR 422; Campbell v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 49; Cooke v Chief Executive, Department of Natural Resources (1998) 19 QLCR 258; Fenton Nominees Pty Ltd v Valuer-General (1981) 27 SASR 258; Fenton Nominees Pty Ltd v Valuer-General (1982) 29 SASR 348; House v King (1936) 55 CLR 499; McEwin & Ors v Valuer-General (1993) 60 SASR 241; Myer (SA) Stores Ltd v Valuer-General (1986) 40 SASR 102; Phillips v Valuer-General (1964) 11 LGRA 87; Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369; Roberts v Chief Executive, Department of Natural Resources (1998) 19 QLCR 186; Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610; Stennett v Valuer-General (1965) 12 LGRA 269; Tilghman v Valuer-General (1966) 12 LGRA 380; Toohey's Ltd v Valuer-General [1925] AC 439; Valuer-General v Fenton Nominees Pty Ltd (1982) 150 CLR 160; Wigg v Architects Board of SA (1984) 36 SASR 111, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"site value"

ARDOCH P/L v VALUER-GENERAL (No 2)
[2006] SASC 217
Land and Valuation Division

DEBELLE J. This is an appeal against the disallowance by the Valuer‑General of an objection to the assessment of the value of two allotments of land. The appeal is made pursuant to s 25C of the Valuation of Land Act 1971. The appeal was substantially out of time but the appellant was granted an extension of time within which to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] SASC 217
Decision Date: 25 July 2006

CaseChat Overview and Summary

Ardoch Pty Ltd has appealed against the Valuer-General’s assessment of the site value of land situated in North Adelaide, which was listed on the State Heritage Register. The objector challenged the assessment in accordance with the provisions of the Valuation of Land Act 1962. The appeal was heard in the Supreme Court of South Australia.

The primary legal issue was whether the Valuer-General’s assessment of the site value of the land was correct. The objector argued that the assessment was too low and did not adequately account for the heritage listing of St Margaret’s. The Valuer-General maintained that the assessment was reasonable and took into account the heritage listing. The court had to decide whether the Valuer-General’s assessment was correct or whether it should be increased.

The court found that the Valuer-General’s assessment was reasonable and that the objector had not provided sufficient evidence to support an increase in the assessment. The court noted that the objector had not agitated the issue of increasing the assessment in evidence or argument. The court held that it was not appropriate to increase the assessment unless the issue was agitated on appeal. The court found that Mr Smithson’s comparable sales approach was more reliable than the residual value approach and that the Valuer-General had made all due allowances for the heritage listing of St Margaret’s. The court confirmed the Valuer-General’s valuation of $850,000.

The court dismissed the appeal and confirmed the Valuer-General’s valuation of the subject land. The court held that the objector had not provided sufficient evidence to support an increase in the assessment and that it was not appropriate to increase the assessment unless the issue was agitated on appeal. The court found that the Valuer-General’s assessment was reasonable and that the objector had not provided sufficient evidence to support an increase in the assessment.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

DEBELLE J

It is possible to check Mr Smithson’s assessment against the comparable sales. Both valuers acknowledge that the smaller northern allotment (allotment 1) with the frontage to Ward Street could be sold and developed as a detached dwelling. It has an area of 431 square metres. Mr Smithson’s sale 3 in his Vacant Land Sales is comparable. Although the sale occurred late in 2002, it is a sale of a small site of 435 square metres with a 6.22 metre frontage and so is quite comparable. It sold for $500,000, yielding $1,149 per square metre. It is an allotment of similar size but with a narrower frontage of 6.22 metres compared with 18.64 metres which is the frontage for the northern allotment. Mr Smithson regarded the sale as comparable. It has its disadvantages when compared with allotment 1 but both are comparable in that they have frontage to similar kinds of streets in North Adelaide and do not enjoy extensive views. If the rate per square metre is simply applied to the area of allotment 1, the site value would be $495,219. Mr Smithson has assessed the site value of allotment 1 at $250,000, about one half of that amount. It is readily apparent that Mr Smithson’s assessment of the allowances for any dissimilarity is very conservative. That same comparable sale also demonstrates that, when assessing the site value of the larger allotment 3, Mr Smithson has again been very conservative, and has made all due allowances for the heritage listing of St Margaret’s.Conclusion In my view, Mr Smithson’s comparable sales approach is a good deal more likely to result in a more realistic assessment of site value than Mr Aschberger’s residual value approach. The flaws in the residual value approach are, I think, of such moment that it is quite an unsuitable approach in this case, no matter how useful it might have been in McEwin v Valuer-General. Mr Smithson’s approach yielded a site value of $950,000, which is higher than the Valuer-General’s assessment of $850,000. This Court has the power on appeal to confirm, increase or decrease the Valuer-General’s valuation: Section 25(c)(3) of the Act. However, the question whether the assessment should be increased and the grounds on which it should be increased was not agitated in evidence nor in argument. It is not appropriate to increase the assessment unless the issue is agitated on the appeal. As it was not, the appropriate course in all the circumstances is simply to confirm the Valuer‑General’s valuation. For these reasons, I dismiss the appeal and confirm the Valuer‑General’s valuation.

Ratio Decidendi

Legal Principle Established

Established by: DEBELLE J

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