DEFLECTOR GOLD PTY LTD and VALUER GENERAL - [2023] WASAT 81

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: VALUATION OF LAND ACT 1978 (WA)
CITATION:   DEFLECTOR GOLD PTY LTD and VALUER GENERAL [2023] WASAT 81
MEMBER:   MS R PETRUCCI, MEMBER
HEARD:   2 JUNE 2023
DELIVERED          :   31 AUGUST 2023
FILE NO/S:   DR 125 of 2022
BETWEEN:   DEFLECTOR GOLD PTY LTD
First Applicant
GULLEWA GOLD PROJECT PTY LTD
Second Applicant
AND
VALUER GENERAL
Respondent

Catchwords:

Reviewable decision - Real property - Valuation of land - Date of valuation - Interim valuation - GRV - Assessed value - Level of values at date of valuation - Improvements to land - Allowance for physical depreciation - Proper construction of definition of 'capital value' in s 4(1) Valuation of Land Act 1978 (WA)

Legislation:

Local Government Act 1995 (WA), Pt 6, Div 6
State Administrative Tribunal Act 2004 (WA), s 17(1), s 27(1), s 29(1), s 29(3)
Valuation of Land Act 1978 (WA), s 4(1), s 18, s 19, s 20, s 22, s 22(1), s 23, s 23(4), s 23(4)(b), s 23(4), s 23(5), s 31(1), s 32(1), s 32(3), s 33(1), s 33(2), s 33(3), Pt III, Div 1
Valuation of Land Bill 1978 (WA)

Result:

Application dismissed
Decision under review affirmed

Category: B

Representation:

Counsel:

First Applicant	:	Mr T Russell
Second Applicant	:	Mr T Russell
Respondent	:	Ms C Ide

Solicitors:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	State Solicitor's Office

Case(s) referred to in decision(s):

Beiler v Valuer-General (1980) 23 SASR 385 (1980) 42 LGRA 131
Boland v Yates Property Corp Pty Ltd [1999] HCA 64
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Citic Pacific Mining Management Pty Ltd and Valuer-General [2016] WASAT 23
Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297
Director General of Department of Transport v McKenzie [2016] WASCA 147
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373
Timberside Villas Management Pty Ltd v Parker [2005] WADC 246
Western Australian Meat Marketing Cooperative and Valuer-General [2005] WASAT 227

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

These proceedings turn on the proper construction of the second limb of the definition (highlighted by underlining) of 'capital value' of land in s 4(1) of the Valuation of Land Act 1978 (WA) (VL Act) which provides:
capital value of land means the capital amount which an estate of fee simple in the land might reasonably be expected to realize upon sale — provided that where the capital value of land cannot reasonably be determined on such basis, the capital value of such land shall be the sum of, first, the unimproved value of the land, and, secondly, the estimated replacement cost of improvements to the land after making such allowance for obsolescence, physical deprecation, and such other factors as are appropriate in the…

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: [2023] WASAT 81
Decision Date: 31 AUGUST 2023

CaseChat Overview and Summary

The case before the court involved Deflector Gold Pty Ltd (the applicant) and the Valuer-General of Western Australia (the respondent). The dispute centred on the valuation of land, specifically the gross rental value (GRV) of certain infrastructure and improvements on the land. The applicant objected to the amended GRVs for the subject sites, and following this, the Valuer-General made certain adjustments to the valuations. Dissatisfied with the objection decisions, the applicant sought review of the valuations by the State Administrative Tribunal (the Tribunal). The key issue before the court was whether the costs of improvements to the land should be depreciated to determine the replacement cost of those improvements and, consequently, the 'capital value' of the land at the date of valuation.

The court had to determine whether the definition of 'capital value' in s 4(1) of the Valuation of Land Act 1978 (WA) required the Valuer-General to allow for physical depreciation in calculating the assessed value of the land, which in turn affected the GRV. The applicant argued that the Valuer-General's methodology for determining the GRV was inconsistent with the Act because it did not account for the physical depreciation of the improvements. The respondent, on the other hand, contended that the Act did not require depreciation to be considered in the calculation of the capital value.

The court considered the statutory provisions and the established principles of statutory interpretation. It found that the definition of 'capital value' in the Act did not explicitly require the allowance for physical depreciation. The court held that the Act's focus was on the market value of the land, and the depreciation of improvements was not a necessary component in determining the capital value. The court also noted that the Act's framework for valuation did not include any provision that would necessitate the deduction of depreciation from the assessed value. Consequently, the court found that the Valuer-General's approach in not allowing for depreciation was consistent with the statutory requirements.

The court dismissed the application, holding that the objection decisions were correct and that the applicant's contention that the GRVs were incorrect was not supported by the statutory provisions. The court concluded that the Valuer-General's methodology for calculating the GRV was in accordance with the Act, and the Tribunal's review of the valuations was therefore unnecessary. The court's decision upheld the Valuer-General's assessment of the GRVs for the subject sites.

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

Following the applicants lodging an objection to the amended GRVs for the subject sites, the Valuer-General, on 6 May 2022, allowed the objections in part and reduced the GRV for the TWA village to $398,400 (down from $410,000 and previously $480,000) at the date of valuation for the 2020/21 financial year of assessment. Further, on 20 May 2022, the Valuer-General disallowed the objection in relation to the admin/workshop with the GRV remaining at $52,000 at the date of valuation for the 2020/21 financial year of assessment (the objection decisions). Following the objection decisions, on 4 August 2022, the applicants served notice on the Valuer-General under s 33(1) of the VL Act requiring the Valuer-General to refer the valuations (GRV of $398,400 for the TWA village and $52,000 for admin/workshop at the date of valuation) to the Tribunal for review (notice). The applicants' ground of review in these proceedings is stated as follows:[4][T]he [GRVs are] incorrect [as] the methodology used by the ValuerGeneral to determine the gross rental value of the Relevant Infrastructure is inconsistent with the provisions of the VL [Act] in respect of the Valuer-General's calculation of the estimated replacement cost of the improvements (being, the estimated replacement cost of the Relevant Infrastructure)[.] [4] HB at pages 13 and 27. The parties agree:(a)the method of calculating the GRV in principle by reference to the 'assessed value' and the 'capital value' of the subject sites;(b)the prescribed percentage of the capital value for the purposes of determining the assessed value, being 5%;(c)the calculation of the Unimproved Value (UV) component of the 'capital value' of the subject sites is $315,333 for the TWA village and $220,000 for the admin/workshop; and(d)the calculation of the construction costs of the improvements for the admin/workshop is $745,683 and for the TWA village is $6,957,017. What is in dispute, and what is the crux of the application, is whether the cost of the improvements to the TWA village and to the admin/workshop site are to be depreciated in order to determine the replacement cost of the improvements to determine the 'capital value' of the subject sites at the date of valuation for the 2020/21 year of assessment. The objection decisions are a 'reviewable decision' for the purposes of s 17(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The Valuer-General's role is to refer the notice along with a copy certified by, or on behalf of, the Valuer-General of the record of the valuation and the reasons, if any, for the valuation to the Tribunal, whereupon the referral is treated as an application by the applicants. This is provided for in s 33(2) and s 33(3) of the VL Act. On 7 August 2022 the Valuer General referred the matter to the Tribunal for review in accordance with s 33(2) and s 33(3) of the VL Act. Section 27(1) of the SAT Act provides that the review of a reviewable decision by the Tribunal is by way of a hearing de novo. The Tribunal is not limited to a consideration of the material that was before the original decisionmaker and may take into account additional material not before the original decisionmaker.

Ratio Decidendi

Legal Principle Established

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