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Commonwealth Custodial Services Ltd v Valuer-General (NSW)

Commonwealth Custodial Services Ltd v Valuer-General (NSW)

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Case Copied 7 July 2006 51 min read

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Reported Decision: 148 LGERA 38
[2007] NSWCA 181; 154 LGERA 437 (CA)

Land and Environment Court

of New South Wales

CITATION: Commonwealth Custodial Services Limited as Trustee for the Burwood Trust Fund; Trust Company of Australia Limited v Valuer-General [2006] NSWLEC 400

PARTIES:
31413 of 2004
APPLICANT:
Commonwealth Custodial Services Limited as Trustee for the Burwood Trust Fund
RESPONDENT:
Valuer-General
31438 of 2004
APPLICANT:
Trust Company of Australia Limited
RESPONDENT:
Valuer-General

FILE NUMBER(S): 31413; 31438 of 2004

CORAM: Biscoe J

KEY ISSUES: Valuation of Land :- meaning of “improvements” in s 6A(1) of Valuation of Land Act 1916 – determination of highest and best use.

LEGISLATION CITED: Valuation of Land Act 1916 (NSW) s 4(1), s 6A, s 37, s 40
Valuation of Land Act 1944 (Qld) s 3(1)(b), s 3(2)

CASES CITED: Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410;
Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 Brisbane City Council v Valuer-General for the State of Queensland (1978) 140 CLR 41;
Caltex Oil (Aust) Pty Ltd v Chief Executive, Department of Lands (1996-1997) 16 QLCR 435;
Campbell v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 49;
Cedar Rapids Manufacturing and Power Co v Lacoste [1914] AC 569;
Collins v Willoughby Municipal Council (1967) 14 LGRA 257;
Commissioner of Land Tax v Nathan (1913) 16 CLR 654;
Commonwealth v Oldfield (1976) 133 CLR 612;
Department of Natural Resources and Mines v QNI Metals Pty Ltd [2002] QLAC 71;
Fisher v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 242;
Goode v Valuer-General (1979) 22 SASR 247, 61 LGRA 424;
Hegira Ltd v Minister for Natural Resources and Mines [2005] QLC 0051;
Justin John Enterprises Pty Ltd v Valuer-General [1999] NSWLEC 208;
Keogh v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 258;
Kiddle v Deputy Federal Commissioner of Taxation (1919) 27 CLR 316;
Maurici v Chief Commissioner of State Revenue (1999) 105 LGERA 318;
Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 ;
Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111;
McGeoch v Federal Commissioner of Land Tax (1929) 43 CLR 277;
Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812;
Morrison v Federal Commissioner of Land Tax (1914) 17 CLR 498;
Pancho v Wingecarribee Council (1999) 110 LGERA 352;
Park v Allied Mortgage Corporation Ltd (Hill J, FCA, 5 July 1995, unreported);
Raynbird v Valuer-General (1980) 7 QLCR 106;
Spencer v The Commonwealth (1907) 5 CLR 418;
Spicer v Valuer-General (1963) 10 LGRA 319 ;
Stubberfield v Valuer-General [1991] 1 Qd R 278;
Tandou Ltd v Western Lands Commissioner (Bignold J, NSWLEC, 19 June 1996, unreported);
Tetzner v Colonial Sugar Refining Company Ltd [1958] AC 50;
Thomspon v Council of the Municipality of Randwick (1950) 81 CLR 87;
Tilghman v Valuer-General (1966) 12 LGRA 380;
Toohey’s

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] NSWLEC 400
Decision Date: 07/07/2006

CaseChat Overview and Summary

These appeals by Commonwealth Custodial Services Limited as Trustee for the Burwood Trust Fund and Trust Company of Australia Limited against disallowance by the Valuer-General of objections to land value assessments as at the base date of 1 July 2003, raise issues concerning the highest and best use of the lands, the meaning of “improvements” in s 6A(1) of the Valuation of Land Act 1916 (NSW), and whether the cost of demolition of the existing commercial office buildings on the lands, together with the interest expense incurred during demolition, should be deducted in assessing land value if the highest and best use (as the Valuer-General contends) is mixed residential/commercial use (mixed use). The applicants contend that the highest and best use of the Burwood Land is commercial use, and the highest and best use of the Ashfield Land is mixed use. The Valuer-General submits that the highest and best use of both lands is mixed use. The applicants also submit that if the highest and best use is mixed use, then there should be deducted the cost of demolition of the existing building and the interest expense during demolition. Biscoe J, after observing the Burwood Land and the Ashfield Land and their respective neighbourhoods, as well as a number of mixed use properties nominated by the Valuer-General’s valuation expert and commercial office properties nominated by the applicants’ valuation expert, concluded that the highest and best use of the Burwood Land was commercial use, and the highest and best use of the Ashfield Land was mixed use. The Judge held that “improvements”, within the meaning of s 6A(1) of the Act, are human operations of persons on land which have the effect, as at the date of valuation, of enhancing its value compared with its natural state. A structure on land is not an improvement if it does not enhance the land’s value compared with its natural state. The commercial buildings on the Ashfield Land enhance the land’s value compared with its natural state. They are valuable to a purchaser who has a use for them. The Judge held that the additional value due to the excavation to be included in the land value of the Ashfield Land. The Judge made orders pursuant to s 40 of the Act.

Orders