EDWARDS and VALUER GENERAL
[2014] WASAT 99
•15 AUGUST 2014
EDWARDS and VALUER GENERAL [2014] WASAT 99
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2014] WASAT 99 | |
| VALUATION OF LAND ACT 1978 (WA) | |||
| Case No: | DR:365/2013 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MS N OWEN-CONWAY (MEMBER) | 15/08/14 | |
| 36 | Judgment Part: | 1 of 1 | |
| Result: | Decision affirmed | ||
| B | |||
| PDF Version |
| Parties: | MITCH EDWARDS VALUER GENERAL |
Catchwords: | Unimproved value Land tax Metropolitan Region Improvement tax Date of valuation Comparable sales evidence Market value Post valuation sales Valuation principles applicable to determination of market value of unimproved land |
Legislation: | City of Canning Town Planning Scheme No 40 Land Tax Assessment Act 2012 (WA), s 5, s 7, s 7(1), s 10, s 17 Metropolitan Region Improvement Tax Act 1959 (WA), s 9, s 10 Metropolitan Region Scheme Planning and Development Act 2005 (WA), s 33 State Administrative Tribunal Act 2004 (WA), s 17(1), s 27(1), s 29(1), s 29(3), s 32, s 32(2), s 33, s 33(2) Valuation of Land Act 12978 (WA), s 18, s 19 |
Case References: | Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226 Boland v Yates Property Corporation Pty Limited [1999] HCA 64; (1999) 74 ALJR 209 Boland v Yates Property Corporation Pty Ltd [1999] HCA 64 Duffy v Minister for Planning [2003] WASCA 294 Duffy v The Minister for Planning [2003] WASCA 294 Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413 Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342 Maidment v Roads and Traffic Authority of NSW [2006] NSWLEC 606 McKay v Commissioner of Main Roads [2013] WASCA 135 McKay v Commissioner of Main Roads [No 7] (2011) WASC 223 Minister Administering The Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151 Minister for the Environment v Florence (1970) 21 SASR 108 Mir v Valuer General [2009] NSWLEC 1309 Mount Lawley Pty Ltd v Western Australian Planning Commission (No 3) [2008] WASCA 158 Multari v Roads and Traffic Authority of New South Wales [2004] NSWLEC 649 Spencer v Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418 The Match Group v Metropolitan South West Joint Development Assessment Panel [2014] WASCA 50 The Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259 Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 |
Orders | On the application heard before Member Natasha Owen-Conway on 14 August 2014, it is ordered that:,1. Upon review, the Tribunal affirms the respondent's decisions:,(a) to disallow the applicant's objection to the respondent's determination of unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011 of $375,000; and,(b) that the unimproved value of the applicant's property situate at 17 Crufts Way, Canning Vale as at 1 August 2010 and 1 August 2011 is $375,000.,2. By 29 August 2014, the parties may file written submissions as to the costs of the proceeding which submissions shall not exceed three pages in length and shall identify whether either party seeks a particular order for costs or no order for costs. |
Summary | The applicant objected to the respondent's determination of the unimproved value of the applicant's property, which valuation formed that basis of the notice dated 7 March 2013 issued to the applicant demanding payment of land tax and Metropolitan Region Improvement tax. The applicant failed to adduce any expert evidence to support his alternative contentions as to the unimproved value of the applicant's property, and failed to adduce any relevant comparable sales evidence. The respondent considered all of the sales evidence advanced by the applicant but considered the evidence to be irrelevant because the properties were not comparable or the sale price was not for market value. The Tribunal agreed and also considered some sale evidence to be irrelevant because it postdated the dates of valuation. The Tribunal concluded that, on the evidence before it, the correct and preferable decision was that the unimproved value of the applicant's property was $375,000 as at the relevant dates of valuation. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : VALUATION OF LAND ACT 1978 (WA) CITATION : EDWARDS and VALUER GENERAL [2014] WASAT 99 MEMBER : MS N OWEN-CONWAY (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 15 AUGUST 2014 FILE NO/S : DR 365 of 2013 BETWEEN : MITCH EDWARDS
- Applicant
AND
VALUER GENERAL
Respondent
Catchwords:
Unimproved value Land tax Metropolitan Region Improvement tax Date of valuation Comparable sales evidence Market value - Post valuation sales - Valuation principles applicable to determination of market value of unimproved land
Legislation:
City of Canning Town Planning Scheme No 40
Land Tax Assessment Act 2012 (WA), s 5, s 7, s 7(1), s 10, s 17
Metropolitan Region Improvement Tax Act 1959 (WA), s 9, s 10
Metropolitan Region Scheme
Planning and Development Act 2005 (WA), s 33
State Administrative Tribunal Act 2004 (WA), s 17(1), s 27(1), s 29(1), s 29(3), s 32, s 32(2), s 33, s 33(2)
Valuation of Land Act 12978 (WA), s 18, s 19
Result:
Decision affirmed
Summary of Tribunal's decision:
The applicant objected to the respondent's determination of the unimproved value of the applicant's property, which valuation formed that basis of the notice dated 7 March 2013 issued to the applicant demanding payment of land tax and Metropolitan Region Improvement tax. The applicant failed to adduce any expert evidence to support his alternative contentions as to the unimproved value of the applicant's property, and failed to adduce any relevant comparable sales evidence. The respondent considered all of the sales evidence advanced by the applicant but considered the evidence to be irrelevant because the properties were not comparable or the sale price was not for market value. The Tribunal agreed and also considered some sale evidence to be irrelevant because it postdated the dates of valuation. The Tribunal concluded that, on the evidence before it, the correct and preferable decision was that the unimproved value of the applicant's property was $375,000 as at the relevant dates of valuation.
Category: B
Representation:
Counsel:
Applicant : Self-represented
Respondent : Mr M Woods (Acting as Agent)
Solicitors:
Applicant : N/A
Respondent : N/A
Case(s) referred to in decision(s):
Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226
Boland v Yates Property Corporation Pty Limited [1999] HCA 64; (1999) 74 ALJR 209
Boland v Yates Property Corporation Pty Ltd [1999] HCA 64
Duffy v Minister for Planning [2003] WASCA 294
Duffy v The Minister for Planning [2003] WASCA 294
Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547
Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413
Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409
Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342
Maidment v Roads and Traffic Authority of NSW [2006] NSWLEC 606
McKay v Commissioner of Main Roads [2013] WASCA 135
McKay v Commissioner of Main Roads [No 7] (2011) WASC 223
Minister Administering The Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151
Minister for the Environment v Florence (1970) 21 SASR 108
Mir v Valuer General [2009] NSWLEC 1309
Mount Lawley Pty Ltd v Western Australian Planning Commission (No 3) [2008] WASCA 158
Multari v Roads and Traffic Authority of New South Wales [2004] NSWLEC 649
Spencer v Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418
The Match Group v Metropolitan South West Joint Development Assessment Panel [2014] WASCA 50
The Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259
Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156
Introduction
1 On 7 March 2013, the applicant, as the proprietor of 17 Crufts Way, Canning Vale (the property comprised in Certificate of Title Volume 2001 Folio 140 registered parcel 71/P12128), was issued with a 'land tax notice of assessment as at 30 June' (notice) which claims that the applicant is liable for the following taxes:
Date | Type of Tax | Value of Property | Total |
|
| $375,000 | $67.50 |
|
| $375,000 | $105.00 |
|
| $375,000 | $67.50 |
|
| $375,000 | $105.00 |
TOTAL: | $345.00 |
2 The notice permits of a small discount if the total tax account is paid by 26 April 2013 (option 1), or a small service fee if the total tax is paid in three equal instalments (option 3), or at the full rate without discount or service charge if paid by two instalments (option 2).
3 The assessment period(s) is stated as: '2011/2012 2012/2013'.
4 There is no issue between the parties as to the applicant's liability to pay land tax, the Metropolitan Region Improvement tax (MRI tax), the rate of each tax, or that the notice refers to two taxation periods.
5 The only issue in dispute is the 'aggregate assessable value' of the land component of the applicant's property at 17 Crufts Way, Canning Vale the subject of the notice, assessed by the respondent at $375,000 for each of the years referred to above, being a reference to the financial years ending 30 June 2012 and 30 June 2013.
The application for review and the reviewable decision
6 The decision that is the subject of the review application is the respondent's decision made on 2 September 2013 to disallow the applicant's objection made on 12 March 2013 to the respondent's assessment of the unimproved value of the applicant's property at $375,000 as at 1 August 2010 and 1 August 2011. On 18 September 2013, the applicant wrote to the respondent maintaining his objection to the valuation. This application for review was commenced upon a referral of the applicant's letter of objection dated 18 September 2013 to the Tribunal.
7 Section 33 of the Valuation of Land Act 1978 (WA) (VL Act) provides:
(1) Any person who is dissatisfied with the decision of the Valuer-General on an objection by that person may, within 60 days (or such further period as the Valuer-General, before or after the expiry of that time, for reasonable cause shown by the person, allows) after service of notice of the decision of the Valuer-General, serve on the Valuer-General a notice requiring that the Valuer-General refer the valuation to the State Administrative Tribunal for a review.
(2) Upon receipt of such notice the Valuer-General shall promptly refer the valuation to the State Administrative Tribunal for a review.
(3) The Valuer-General is to effect the reference by forwarding the notice to the executive officer of the State Administrative Tribunal together with the objection and a copy certified by or on behalf of the Valuer-General of -
(a) the record of the valuation; and
(b) the reasons, if any, for the valuation.
The applicant's objection
9 On 12 March 2013, the applicant wrote to the Commissioner of State Revenue, by email, noting that the applicant had found three properties which constituted evidence of the sale price of comparable properties for 'both 259 Acourt Road and 17 Crufts Way' at 'around August 2011'. The applicant refers to three properties that he asserts should have been taken into account when assessing the unimproved value of at least 17 Crufts Way and, if taken into account, would have established that that the unimproved value of 'a 4,000m2 block of land' is $300,000 'or less'. These sales are:
• Developed land (single residential with kennels) situate at 20 Crufts Way, Canning Vale 'which settled on 29/9/2011 (which would have been signed up to about 60 days prior)'. It is common cause that this property is the same size (4,000m2), in the same locality, and has the same zoning as the applicant's property.
• Vacant land situate at 137 Merrit Loop, Jandakot which 'sold … on 12 June 2011'.
• Vacant land situate at 190 Merrit Loop, Jandakot which 'sold … on 27 June 2011'.
10 It is common cause that both 137 and 190 Merrit Loop, Jandakot are not in the same locality and do not have the same zoning as the applicant's property and comprise 20,262m2 (that is, over five times the area of the applicant's property) and 20,119m2 (that is, over five times the area of the applicant's property) respectively. It is not clear to the Tribunal whether the two Merrit Loop properties were intended as evidence of comparable sales with the applicant's property at 17 Crufts Way. As these two properties differ so markedly from 17 Crufts Way, it appears that these properties were advanced by the applicant as comparable with 259 Acourt Road, Canning Vale, and were not intended by the applicant to be considered when assessing the value of the applicant's property.
11 The applicant's email dated 12 March 2013 was taken by the recipient to be an objection to the valuation of $375,000 which supported the notice.
12 In response, the respondent caused Mr David Kay, a licensed valuer, to reconsider the respondent's unimproved valuation of $375,000 as at 1 August 2010 and 1 August 2011. Mr Kay disallowed the applicant's objection that is, that the value was less than $300,000 after having considered the sale of 20 Crufts Way as advanced by the applicant because:
• The value paid for the improvements to 20 Crufts Way were, in Mr Kay's opinion, likely to be no greater than $125,000 because post sale the new owner had demolished and replaced much of the inside of the home, replaced the roof covering, rendered the external brick work, substantially renovated the home, and was in the process of undertaking very extensive landscaping, although the kennels had not been demolished.
• When the value of the improvements estimated by Mr Kay ($125,000) are deducted from the sale price of $530,000, the unimproved value of 20 Crufts Way as at the date of sale (September 2011) is $405,000, which is greater than $375,000. Therefore, the respondent's recorded valuation for that property, also $375,000 for the relevant period (1 August 2010 and 1 August 2011) was not excessive. Or, in other words, the assessment of the unimproved value of 20 Crufts Way as at 1 August 2010 and 1 August 2011 is at least $375,000.
• The sale of 20 Crufts Way did not prove, or tend to prove, that the unimproved value of that property as at 1 August 2010 and 1 August 2011 is $300,000 or less, as asserted by the applicant.
13 In response to the respondent's refusal of the applicant's objection of 12 March 2013, the applicant wrote to the respondent on 18 September 2013 and sought that the matter be referred to the Tribunal and noted:
• The respondent's letter of 2 September 2013 referred to sales evidence of comparable properties which were not identified.
• Mr Kay's reason for not contacting the applicant was not before he concluded his opinion as to the unimproved value of the applicant's property was not correct.
Tribunal's review jurisdiction
14 Section 27(1) of the SAT Act provides that the review of a reviewable decision is by way of a hearing de novo. By reason of s 29(1) of the SAT Act, the same functions and discretions of the original decision-maker are conferred on the Tribunal (The Match Group v Metropolitan South West Joint Development Assessment Panel[2014] WASCA 50), and s 29(3) of the SAT Act confers power on the Tribunal to give effect to the Tribunal's conclusions on the review of the reviewable decision. The Tribunal is not limited to a consideration of the material that was before the original decision-maker and may take into account additional material not before the original decision-maker.
The legislation
Land Tax Assessment Act 2002 (WA)
15 Land tax is payable for each financial year for all land in the State, save exempt land, as provided for by s 17 of the Land Tax Assessment Act 2002 (WA) (LTA Act) (see s 5 of the LTA Act). The applicant's property is not exempt land for the purposes of the LTA Act. Section 10 of the LTA Act relevantly provides that:
Unless this Act provides otherwise, the amount of land tax payable for taxable land for an assessment year is the amount calculated by applying the rate fixed in relation to the land under the Land Tax Act 2002 to the amount equal to the taxable value of the land for the assessment year.
16 Land tax is payable by the person who is or was the owner of the land as at 30 June in the year immediately prior to the year in which the assessment is made, as provided for by s 7(1) of the LTA Act:
Land tax payable on land for an assessment year is payable by the person who is or was the owner of the land at midnight on 30 June in the previous financial year. (Tribunal's emphasis)
17 'Assessment year' is defined in the glossary of terms of the LTA Act to mean:
… [I]n relation to land tax, means the financial year for which the land tax is, or is to be, assessed.
18 The reference to '30 June in the previous year' is relevant for the purposes of s 7(1) of the LTA Act to determine the identity of the entity that is liable to pay the land tax in any assessment year. As there is no issue in this matter that the applicant was at all material times the owner of the property from and including 30 June 2010 to date, this issue is not in dispute.
19 The 'taxable value' of the land is defined by cl 6 of the glossary of terms of the LTA Act, relevantly:
(1) Unless the contrary intention appears, the taxable value of land is to be determined under this clause.
(2) The taxable value of land for a financial year is
(a) …
(b) otherwise, the unimproved value of the land at midnight on 30 June immediately before that year. (Tribunal's emphasis)
21 'Unimproved value of land' is defined to mean the unimproved value of land as determined under the VL Act, which is referred to below.
Metropolitan Region Improvement Tax Act 1959 (WA)
22 The MRI tax is payable for each financial year for all land in the metropolitan region that is the subject of the Metropolitan Region Scheme as provided for by s 33 of the Planning and Development Act 2005 (WA). The MRI tax is payable for the year of assessment commencing 1 July and ending 30 June on the 'unimproved value' of the land according to the value 'in force' under the VL Act at midnight on 30 June in the previous year (see s 9 of the Metropolitan Region Improvement Tax Act 1959 (WA) (MRIT Act). The rate is determined by s 10 of the MRIT Act.
Valuation of Land Act 1978 (WA)
23 As both the land tax and MRI tax payable is to be determined in any assessment (LTA Act) or financial (MRIT Act) year by reference to the 'unimproved value' of the land as provided for by the VL Act at 30 June in the financial year immediately preceding the assessment or financial year to which the land tax or MRI tax applies, the provisions of the VL Act are relevant to a determination of this proceeding.
24 Section 18 of the VL Act provides:
For the purposes of general valuation, the Valuer-General shall determine, or cause to be determined, with respect to rateable land, the gross rental value or the unimproved value, as the case requires, so far as that value is required by a rating or taxing authority for the purpose of assessing any rate or tax or is, in the opinion of the Valuer-General, reasonably likely to be so required before the next general valuation of the land is made.
(Tribunal's emphasis)
25 Section 20 of the VL Act provides:
The valuations comprising a general valuation relating to land shall come into force on such days as is determined by the Valuer-General and supersede any previous valuations of gross rental value or unimproved value, as the case may be, in force under this Act relating to that land. (Tribunal's emphasis)
26 Section 19 of the VL Act provides for the date at which a general valuation is to be made:
When a general valuation of rateable land is made in a valuation district, any value assigned to land shall be the value as at the date of the valuation fixed by the Valuer-General, being a date not earlier than 1 July in the financial year in which the general valuation is commenced.
(Tribunal's emphasis)
27 By reason of the Government Gazette notice dated 24 July 2009, the Valuer General has fixed 1 August 2010 and 1 August 2011 as the date on which the value of land is to be determined as at 30 June 2011 and 30 June 2012 respectively.
28 Therefore, for the purpose of the MRI tax, the valuation 'in force' as at 30 June 2011 and 30 June 2012 are those determined as at 1 August 2010 and 1 August 2011 respectively, and those valuations are the basis of the assessment of the MRI tax for the 'financial' years 1 July 2011 to 30 June 2012 and 1 July 2012 to 30 June 2013. The position is the same in respect of the assessment of land tax because the valuations as at 1 August 2010 and 1 August 2011 respectively are representative of the value of the land as at midnight on 30 June 2011 and 30 June 2012 respectively, being the relevant dates for assessment of land tax in the 'assessment' years 1 July 2011 to 30 June 2012 and 1 July 2012 to 30 June 2013 respectively.
29 In this proceeding, both the MRI tax and the land tax are to be determined on the 'unimproved value' of the applicant's property as provided for by the VL Act as at 1 August 2010 and 1 August 2011 respectively.
30 The 'unimproved value' of land is defined by the VL Act to mean:
(a) in relation to any land situate within a townsite … the site value[.]
31 'Site value' is defined by the VL Act to mean:
… the capital amount that an estate of fee simple in the land might reasonably be expected to [realise] upon sale assuming that any improvements to the land, other than merged improvements, have not been made and, in the case of land that is reserved for public purpose, assuming that the land may continue to be used for any purpose for which it is being used or could be used at the date of valuation[.]
32 In the event that site value is not applicable and none of the other subcategories in the definition of 'unimproved value' is applicable, cl (vii) of the definition of 'unimproved value' provides:
(vii) land to which any of subparagraphs (i) to (vi) do not apply
(I) the capital amount that an estate in fee simple in the land not including improvements might reasonably be expected to [realise] upon sale;
34 In this matter, there are no merged improvements in issue.
35 Both definitions involve an assessment of the market value or market sale value of the applicant's property.
Legal principles concerning valuation
36 The following summary of the legal principles concerning valuation matters and valuation evidence is derived from the judgment of Beech J in McKay v Commissioner of Main Roads [No 7] (2011) WASC 223 (McKay No 7) after his Honour's extensive consideration of the relevant authorities. The following summary only concerns the authorities and principles relevant to market value and does not include references to considerations relevant to valuations based on special value for compensation cases and the like. In McKay v Commissioner of Main Roads [2013] WASCA 135, there was no challenge to the statement of legal principle referred to in McKay No 7.
• 'Value' means 'exchange value' (McKay No 7 at paragraph 144).
• Value is determined by presupposing the person who is willing to give the thing that is being valued in exchange for money and another willing to give money in exchange for that being valued (Spencer v Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418; Boland v Yates Property Corporation Pty Limited [1999] HCA 64; (1999) 74 ALJR 209; McKay No 7 at paragraph 144).
• Value is determined by identifying the price of a notional bargain between a hypothetical vendor and purchaser who are prudent, well informed, but not anxious, to complete the exchange (McKay No 7 at paragraph 145).
• The test of value is not to be determined by inquiring what price 'a man desirous to sell could actually have obtained for it on a given day' (Spencer per Griffith CJ at page 432). Griffith CJ stated in Spencer:
The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.
(Spencer per Griffith CJ at page 432)
• 'Value is determined by forming an opinion as to what a willing purchaser will pay and a not unwilling vendor will receive for the property' (Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413 per McHugh J; cited with approval in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259; McKay No 7at paragraph 148.
• In determining value, there must be attributed to the parties a knowledge of all matters that affect the property's value, including:
• The 'predicted impact of future events as well as experience of the past and the rates of return on other investments' (Kenny per McHugh J), whether those matters affect the value 'advantageously or prejudicially' (Spencer per Isaacs J).
• The property's situation, character, quality, proximity to conveniences or inconvenience, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property' (Spencer per Isaacs J).'
• The market for the property is assumed to be an efficient market in which buyers and sellers have access to all currently available information that affects property (Kenny per McHugh J).
• The hypothetical purchaser should be regarded as prudent (Spencer; Mount Lawley Pty Ltd v Western Australian Planning Commission (No 3) [2008] WASCA 158 (Mount Lawley)).
• The hypothetical purchaser is to be taken to act rationally (Mir v Valuer General [2009] NSW LEC 1309).
• The hypothetical Spencer parties are taken to have access to all currently available information that affects the property's value and the property generally.
• Application of the above principles reflects market value (McKay No 7 at paragraph 150).
• There are a number of methods of assessing market value (McKay No 7 at paragraph 152).
• The primary method is by analysis of comparable sales (McKay No 7at paragraph 153.
• The method of valuation is a 'means to the end' (McKay No 7 at paragraph 153). The end is 'to identify the price at which the hypothetical Spencer parties would reach a bargain' (Brewarrana Pty Ltd v Commissioner of Highways (No 2)(1973) 6 SASR 541 (Brewarrana); Minister for the Environment v Florence (1979) 21 SASR 108; Minister for the Environment v Petroccia (1982) 30 SASR 333; Kelly v Western Australian Planning Commission [2006] WASC 208).
• In determining the value, 'the court relies on the evidence of professionally qualified valuers' (McKay No 7 at paragraph 163).
• A court or tribunal is not a valuation agency (Mount Lawley) and must not take on the role of the 'third valuer' (Brewarrana; Bronzel v State Planning Authority (1979) 21 SASR 514 (Bronzel)). Valuers have their own experience, training and skill and that role must not be usurped by the court or tribunal (Bronzel).
• The task of valuation involves an inquiry about which reasonable minds may well differ widely (Boland; Mount Lawley).
• Valuation is an art, not a science, and it involves the exercise of many subjective judgments, and the steps in reasoning are not always able to be articulated fully (The Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 per Privy Council; Spencer; Duffy v Minister for Planning [2003] WASCA 294; and McKay No 7). In The Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co, the Privy Council stated at 391:
… in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as at present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at. …
• Some of the 'adjustments' to values obtained from comparable sales evidence made by a valuer when valuing a particular subject may be 'nothing more than the best guess that can be made' (Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409; Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156, 182, 183; Duffy v The Minister for Planning [2003] WASCA 294 (Duffy)).
• Although courts and tribunals should not value the subject matter, the court or tribunal is not obliged to adopt a valuer's opinion and may make adjustments to value as required by the evidence (Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226; (2007) 34 WAR 499). If a court or Tribunal finds any of the valuation evidence 'defective, incomplete or irreconcilable in some respect', it should use other evidential material to 'correct, complete or reconcile that evidence' (Brewarrana).
• A court or tribunal cannot take an average of competing valuations in order to resolve the differences (accepted in McKay No 7 at paragraph 170 as being a correct statement of principle).
• In some cases, land may have a 'special value' reflecting a value to the owner, over and above the price which a hypothetical purchaser may pay (Boland). A 'special value' is likely to be relevant in cases of compensation, damages and resumption.
• Post valuation date events such as sales of comparable properties are not relevant to prove hindsight that is, such evidence is not relevant to prove the market value of the subject at an earlier time or to justify or confirm an opinion of market value made for an earlier time. In Spencer, Isaacs J stated at page 440:
All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on [the valuation date] are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain.
• If a future event or possibility is in contemplation of the hypothetical Spencer parties as at the date of the valuation, such event or the effect of that event or possibility as at the date of valuation is relevant. But the valuation must be 'ascertained in the light of the facts, including the probabilities, then existing, and without taking notice of subsequent happenings' (Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342 per Owen J at page 348; Multari v Roads and Traffic Authority of New South Wales [2004] NSWLEC 649; Maidment v Roads and Traffic Authority of NSW [2006] NSWLEC 606). If the presumed information did not come to pass, that later known fact is not relevant to market value (McKay No 7 at paragraph 337 ff).
• Post valuation date information is relevant to 'confirm foresight' in the context of a claim where the property in question has a 'special value' to the owner but not where the issue for consideration is market value (Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 per Hope J).
• 'Outside the sphere of valuation, there is no general limit on the use of later events as evidence relevant to and assisting in determining a situation at an earlier point in time' (McKay No 7 at paragraph 377 point (1); Minister Administering The Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151).
• 'In valuation cases, different considerations apply depending on whether the subsequent event is said to bear upon market value, real value, special value, injurious affection, severance, or other notions of value' (McKay No 7 at paragraph 377 point (2)).
• 'Special considerations apply when the question is one of market value. That is because the basic principle by which value is determined the notional bargain of the hypothetical purchaser and vendor directs attention to what was known and knowable at the time of valuation, and not to subsequent material' (McKay No 7 at paragraph 377 point (3)).
• 'Because of that, in cases involving market value, the general preference of the court for subsequent facts over prophecies that applies in relation to questions of compensation and assessment of damages, has little role to play' (McKay No 7 at paragraph 377 point (4)).
• Evidence of advice given, or other events, after the date of valuation may be relevant on the basis that it may be inferred that the same or similar advice would have been given to the hypothetical party or parties at the valuation date (Caruso v Sydney Water Corporation [2008] NSWLEC 320) that is, it was 'knowable' to the Spencer parties as at the date of the valuation.
37 As will be seen in this case, the parties both sought to rely upon evidence of sales of comparable properties that occurred after the valuation dates. In this case, as has been indicated, market value is the relevant assessment. As such, post valuation date sales evidence is not relevant to this proceeding.
Issues
38 In this proceeding, the applicant contends that his opinion should be accepted to that of the respondent's expert and licensed valuation witness, Mr Kay. The first issue is: given s 32 of the SAT Act, can the Tribunal take the applicant's opinion and reasoning into account? The answer to this question is: yes.
39 As at the date of his final submission, the applicant contends that the unimproved value of the applicant's property is no greater than $245,000 as at 1 August 2010 and 1 August 2011 (although he originally contended that the unimproved value of the applicant's property is no greater than $300,000 and, later in the proceedings, the applicant contended that the unimproved value of the applicant's property is no greater than $275,000), whereas Mr Kay's evidence is that the unimproved value of the applicant's property is at least $375,000 as at 1 August 2010 and 1 August 2011.
40 The second question is: which of the competing opinions as to valuation should the Tribunal accept, to produce the correct and preferable decision as to unimproved value of the applicant's property at the relevant dates? The answer to this question is: the opinion of Mr Kay that the unimproved value of the applicant's property is at least $375,000 as at 1 August 2010 and 1 August 2011.
41 The ultimate issue is whether the applicant's objection raised in his email of 12 March 2013 and his letter of 18 September 2013 should be allowed. The answer to this question is that the applicant's objection should be disallowed, and the respondent's decision that the unimproved value of the land comprised in the applicant's property is $375,000 should be affirmed.
Decision on documents
42 In order to reduce the costs and time expended by the parties in this proceeding, the matter has progressed on a relatively informal basis in the Tribunal. The applicant has not produced or relied upon expert valuation evidence. Instead, the applicant has advanced his own opinion evidence of the correct value of the applicant's properties for the relevant assessment financial years. The applicant is not a licensed valuer and holds no valuation qualifications. The applicant does not advance any experience as a valuer and does not hold himself out as an expert witness. Rather, the applicant asserts that, as he owns a number of other properties in close proximity to the applicant's property and has some longstanding experience of the locality, he knows the value of the land in the locality better than most.
43 The applicant has produced to the respondent or the Tribunal the following documents:
• email dated 12 March 2013 which is the applicant's original objection to the notice (Exhibit 1);
• email dated 26 March 2013 from the applicant (Exhibit 2);
• letter dated 18 September 2013, being the applicant's challenge to the respondent's decision to refuse the applicant's original objections to the assessment of land tax and MRI tax (Exhibit 3);
• letter/submission dated 17 January 2014, together with an addendum dated 21 January 2014; photographs; maps and email to Mr Kay dated 20 January 2014 (Exhibit 4);
• letter/submission dated 7 February 2014 (Exhibit 5);
• letter/submission dated 1 April 2014 (Exhibit 6); and
• correction to table in letter/submission dated 1 April 2014, received by the Tribunal on 4 April 2014 (Exhibit 7).
44 The respondent has filed the following documents relevant to the review:
• letter of refusal of applicant's objection dated 2 September 2013 and accompanying report by District Valuer, Mr Kay (Exhibit 8);
• series of documents including certificate of title, and Landgate valuation systems comprised in the initial papers for review filed on 7 November 2013 (Exhibit 9);
• aerial site map and photograph of the properties in the locality including the applicant's property (Exhibit 10);
• expert witness statement of Mr Kay dated 15 November 2013, together with supporting evidence of sales evidence at 20 Crufts Way, Canning Vale; 11 Battersea Road, Canning Vale; 4 Fraser Road, Canning Vale; 31 Crufts Way, Canning Vale; Plan 12128; and aerial photographs of 20 Crufts Way, Canning Vale in September 2011 and October 2012 (Exhibit 11);
• Perth Suburbs profile 20092013 (Exhibit 2);
• two A4 pages with summation analysis of improved sales (Exhibit 3);
• responsive statement addressing valuation matters referred to in the applicant's letter/submission of 7 February 2013, dated 27 March 2014 (Exhibit 14); and
• depreciation schedules as at 1 August 2011 and 2011 (Exhibit 15).
Expert evidence in the Tribunal
45 There was no challenge to the respondent's expert witness' qualifications. The Tribunal finds that the only expert opinion evidence before it is that of Mr Kay, who is the author of the respondent's expert report (Exhibit 11) relied upon by the respondent, and he is also the author of the various documents and notes filed by the respondent in support of various statements and contentions in the report (Exhibits 13 and 15). Mr Kay states in his report that he is a licensed valuer (No 457) and a member of the Australian Property Institute (Membership No 00064730). Mr Kay also states in his report that:
a) he has worked as a valuer for 29 years for the State Taxation Department, the respondent and Landgate;
b) he has experience in performing statutory valuations for the above mentioned entities, including general valuations; and
c) he has experience in appearing before tribunals as an advocate and as an expert witness, and before courts as an expert witness.
46 None of these statements were challenged by the applicant. The Tribunal is satisfied that Mr Kay is both qualified and experienced as a valuer in a well recognised expert field, whose expert opinion is relevant in this proceeding.
47 The common law and statutory rules of evidence do not apply to proceedings in the Tribunal unless provided for in the rules and procedures of the Tribunal (s 32(2) of the SAT Act). Mr Kay is the District Valuer at Landgate, a statutory public body associated with the respondent. Mr Kay states in his report that he has:
… read the State Administrative Tribunal's pamphlet entitled 'A guide for experts giving evidence in the State Administrative Tribunal'.
48 Mr Kay's report also contains a statement that he is bound by the obligations referred to in the Tribunal's pamphlet. The relevant statements to which Mr Kay must be referring are:
It is fundamental that experts giving evidence in the Tribunal appreciate and acknowledge that:
• An expert witness has an overriding duty to assist the Tribunal impartially on matters relevant to the expert's area of expertise.
• An expert witness's paramount duty is to the Tribunal and not to the party engaging the expert.
• An expert witness is not an advocate for a party.
It is recognised that an expert may have been engaged by a party before the proceedings were commenced or may have been engaged by a party in another capacity, for example as an advocate, in addition to being engaged to give expert evidence. Nevertheless, when the expert is giving evidence in the Tribunal, he or she must appreciate and acknowledge the obligations set out above. (Tribunal's emphasis)
49 The emphasised words refer to a Tribunal practice requirement of acknowledgement by the expert witness of the need for independence when giving expert evidence before the Tribunal, even though, in fact, there may be a pre-existing relationship and even an ongoing relationship between the expert witness and the party relying upon the expert witness' evidence.
50 Such relationships may result in the expert evidence being excluded on discretionary grounds at common law in a forum where the common law rules of evidence apply. However, in the Tribunal, the relationship between the expert witness and the party who calls the expert does not prevent the Tribunal from receiving and relying on that evidence, provided that the witness acknowledges the need for independence when giving evidence. The existence of a relationship between the expert witness and the party relying on the expert witness' evidence may, however, go to the weight to be attributed to that evidence by the Tribunal.
51 The applicant was correctly encouraged by the Tribunal at directions hearings to consider the desirability for him to obtain independent and expert evidence to advance his case. The applicant has chosen to rely upon his own unqualified opinion evidence instead of a qualified or experienced valuer's opinion evidence, which will likely affect the weight to be attributed by the Tribunal to his evidence because of a lack of both expertise and independence or objectivity.
The applicant's property
52 As stated, the applicant's property:
• is situated at 17 Crufts Way, Canning Vale;
• comprises land referred to in Certificate of Title Volume 2001 Folio 141;
• is situated in the locality of Canning;
• is subject to the City of Canning Town Planning Scheme No 40 (Exhibit 11);
• is zoned Special Residential with an Ancillary Use of Kennels (Exhibit 11), as are the properties surrounding the applicant's property in the locality referred to below;
• is subject to the permitted use of 'single residential and the additional development of kennels' (Exhibit 11);
• is within a locality bounded by Acourt Road and Fraser Road, which locality includes Battersea Way and Crufts Way (locality);
• comprises 4,000m2 of sandy and gently undulating land with a slight fall from left to right, with a frontage to Crufts Way of 43.6 metres; and
• is developed with a brick and tile house and nine kennels.
53 The relevant locality is described as:
• 'close' to being fully developed with single residential houses and adjoining kennel development, and although there are some lots developed with 'residential only', the predominant use is residential and kennel; and
• having access to electricity, scheme water and telephone services.
54 These facts are derived from Mr Kay's report and none of these facts is disputed by the applicant. Neither party has informed the Tribunal of the likely date of construction of the home or the kennels situate on the applicant's property, but the photograph of the property on the front page of Mr Kay's report and notes to the respondent's letter of refusal of objection dated 2 September 2013 (Exhibit 8) indicate perhaps a 1970s - 1980s style of home.
55 The applicant asserts that the applicant's property 'is zoned by the State as RuralWater Resource'. The applicant submits that both 'Acourt Retreat' and the 'Kennel zone' share:
… the same state zoning of Rural-Water Protection Priority 2 (P2) [and] it stands to reason these two properties may well be comparable.
(Exhibit 4 at point 9)
56 The applicant has attached to his submission a 'Department of Environment document and a Western Australian Planning Commission Metropolitan Region Scheme Form 5' as supporting evidence. The applicant's submission is that the alleged RuralWater Resource zoning imposes a restriction on use of the land subject to that zoning which reduces the unimproved value of that land. He reasons that, as 17 Crufts Way is so restricted, the restriction reduces the unimproved value of the applicant's property.
57 The Tribunal rejects the applicant's assertion and finds that the applicant's property, on the evidence before it, is not subject to the RuralWater Resource zoning as contended. The document that the applicant has attached to support his contention is the Metropolitan Region Scheme Form 5 Certificate No 32923369. That document relates only to 22 Acourt Road on Plan 12127 comprised in Certificate of Title Volume 1418 Folio 659 and is dated 11 September 2009. The property at 22 Acourt Road is not within the same locality as the applicant's property. There is no evidence produced by the applicant that the applicant's property is subject to the RuralWater Resource zoning, as contended by the applicant, or that it is sufficiently proximate to 22 Acourt Road to draw any inference that it probably is. The Tribunal finds that the applicant's property should not be regarded as comparable to 22 Acourt Road or any other property that is the subject of that particular zoning.
Comparable sales evidence, submissions and consideration
58 The respondent's starting position is to refer to the data compiled in the 'Landgate - Valuation System Urban/UV Report Details' for the applicant's property which notes the unimproved valuations of the applicant's property reaching back to 1 July 1993 (Exhibit 9). Although not commented upon directly, this data may have been derived from a mass valuation for the properties within the locality in question which has been manually revalued from time to time (1993, 1997, 1998 and 1999). At least from 2009/2010 it appears that the value has been relatively constant at $375,000 (save for a reduction in value to $355,000 in 2008/2009). Rather than the respondent providing an historical account of how this figure was arrived at, the respondent has sought to support the unimproved valuation of the applicant's property as at 1 August 2010 and 1 August 2011 at $375,000 by reference to 'comparable sales evidence' which, it asserts, supports or tends to support the conclusion that the unimproved market value of the applicant's property is at least $375,000.
59 Broadly speaking, the respondent, through Mr Kay, has:
• estimated the depreciated value of the improvements of various properties that are, in Mr Kay's opinion, comparable to the applicant's property;
• checked that the estimated depreciated value of the improvements on those alleged comparable properties is not greater than the allowance made for the value of the improvements as identified in the respondent's records; and
• deducted that estimated depreciated value of the improvements to the alleged comparable properties from the last sale price for the comparable property, and checked that the remaining figure representing the unimproved value of each property is greater than the unimproved value noted in the Landgate - Valuation System Urban/UV Report Details.
60 In the case of 20 Crufts Way, Canning Vale (which the applicant advanced as a comparable property), the respondent contends:
a) The price paid was largely land value for the following reasons.
i) The value of the improvements to that property as at the date of the sale (September 2011) were not substantial for the reason that after the date of sale, the new owner has demolished a sizable portion of the inside of the home, demolished substantial landscaping, and made other improvements. Mr Kay reasoned that this post-sale action (demonstrated by the aerial photographs of that property as at September 2011 and October 2012 in Appendix 2 to Exhibit 11) indicates that as at the date of sale, the new owner (the then purchaser) placed little value in the existing structures. The respondent contends that this is further demonstrated by the evidence of Mr Kay's observation that the home has been 'gutted' internally and substantially renovated.
ii) Although the property comprised a 1983 brick and tile home with four bedrooms, a garage and 24 kennels at the time of sale (September 2011), Mr Kay ascribed a value of $75,000 for the home (because that is his estimate of the value of what was left of the original home after the demolition and renovation) and $50,000 for the kennels (which, the Tribunal notes, is almost double the estimated depreciated value calculated by him for the kennels). Mr Kay reasons in his report:
It would appear that the purchaser did not place much value on the improvements, when they [sic] paid $530,000 in September 2011.
iii) Mr Kay investigated this sale further by interviewing the agent for the sale. He records in his report that the agent (whose name is not disclosed) told him that the agent believed the price of $530,000 reflected the land value of the applicant's property. There is no contemporaneous note of this discussion or witness statement from the selling agent to prove this fact.
b) Further, the respondent contends that the sale of that property was, in fact, a distressed sale or, at the very least, was not a sale between a willing buyer and a not unwilling seller because:
i) Mr Kay investigated this sale further by interviewing the agent for the sale.
ii) Mr Kay records in his report that the selling agent (whose name is not disclosed) told him that the agent believed that the seller was a more than willing seller and was, in fact, an anxious seller. There is no contemporaneous note of this discussion or witness statement from the selling agent to prove this fact.
c) Further, the respondent contends that the applicant agreed in mediation with the respondent, that the sale of that property in September 2011 was not a sale at market value, it being a 'distressed' sale.
61 The relevance to this proceeding of the evidence of the sale of 20 Crufts Way is the most contentious matter in dispute in these proceedings.
62 The applicant contends that the calculation of the estimated value placed on the improvements to 20 Crufts Way as at the date of sale referred to in (a)(ii) above is without foundation. The Tribunal agrees. The calculation appears entirely arbitrary, and the foundation for the calculation is not articulated and stated, even in broad terms. As to (a)(i) above, the Tribunal accepts that reliance on post-sale activities are relevant to establish the likelihood of the purchaser's state of mind as at the date of purchase. That is, it is permissible for the respondent to rely on post-sale demolition and renovation to establish that the new owner, when the purchaser, did not ascribe significant value to the improvements to the property. However, there is no persuasive evidence for the respondent's contention that the value to be ascribed to the improvements as at the date of sale was only $125,000 for the reasons referred to.
63 The applicant asserts (without any proof at all) that the new owner of 20 Crufts Way was compelled to substantially renovate the home because of damage caused whilst the property was leased after sale. This would not explain the extensive external demolition and demolition of the gardens. Further, there is no proof of the alleged motivation at all. As to (a)(iii) above, the statement is entirely without weight. The Tribunal does not know the identity of the selling agent, or the selling agent's experience, so as to give any weight to the selling agent's view or market appraisal.
64 As to (b) above, the applicant contends that 20 Crufts Way might be considered a 'slightly distressed sale' but that the value of the improvements are not as low as the respondent asserts (Exhibit 6 at point 3). The Tribunal considers this a concession by the applicant that the sale of this property was not a sale at market value. As such, the Tribunal considers that the evidence of the sale of this property is not relevant to assessing the unimproved value of the applicant's property.
65 As to (c) above, the respondent asserts that the parties reached agreement in mediation that the sale of 20 Crufts Way in September 2011 was not relevant to assessing the unimproved value of the applicant's property because it was not a sale at market value. There is no order to that effect arising from the mediation and there is no agreement recorded by the mediator to that effect. There is no evidence before the Tribunal that such an agreement was reached at mediation. The applicant has not conceded that there was any such agreement at mediation or otherwise. However, as the applicant has conceded that the sale of 20 Crufts Way was not a sale at market value (see above), the Tribunal has concluded it is not relevant to this proceeding, albeit that physically it is the most comparable to the applicant's property of all the properties considered.
66 Mr Kay also recorded in his report that the selling agent informed him that the seller had agreed to sell 20 Crufts Way for a higher price but that the contract had not proceeded. Again, there is no evidence to support the unidentified selling agent's assertions.
67 Further, the Tribunal notes that the date of the sale of 20 Crufts Way is said to be September 2011, which post-dates the relevant valuation dates. Applying the relevant principles, the evidence of the sale of 20 Crufts Way is not relevant to this proceeding for this reason as well. The applicant asserts that the real date of the sale is likely to be some six weeks prior, but there is no evidence of that fact.
68 The respondent, through Mr Kay, also considered the following evidence of sales of comparable properties:
1) 11 Battersea Road, Canning Vale sold in March 2010;
2) 4 Fraser Road, Canning Vale sold in February 2012;
3) 31 Crufts Way, Canning Vale sold in February 2013.
69 All three properties are situated in the locality.
70 Only the sale of the property at 11 Battersea Road for the sum of $710,000 in March 2011 is relevant to the assessment of the unimproved market value of the applicant's property as at 1 August 2011.
71 The sales evidence concerning 4 Fraser Road and 31 Crufts Way occurred well after the relevant valuation dates. The evidence of the sale of these properties is not relevant to establish the market value of the applicant's property at an earlier time (see above principles of valuation).
72 The property at 11 Battersea Road is comparable with the applicant's property in terms of size (4,000m2), locality and zoning (single residential and kennels). Its topography (sandy and undulating) is also comparable with the applicant's property. The home is described as 1981 brick and tile with 8.5 'effective' rooms, a twocar carport and a below ground swimming pool. The applicant's property does not have a swimming pool. The property at 11 Battersea Road has a greater number of kennels (15 instead of the applicant's nine) and a 10 cattery structure.
73 In assessing the value of the improvements at 11 Battersea Road, Mr Kay has calculated the estimated cost price of the home, less depreciation at the rate of 2% per annum for the home, carport and kennels. Further, Mr Kay's notes (Exhibit 14) calculate the basis of the depreciation, which calculations indicate that the rate of depreciation may be greater than 2%, which is against the applicant's contention. None of Mr Kay's calculations establish a lower rate of depreciation so as to result in a greater value for the improvements to 11 Battersea Road. Mr Kay's reliance upon a 2% depreciation rate appears to be favourable to the applicant. There does not appear to be any disagreement between the applicant and the respondent as to the rate per metre to be applied when calculating the cost price of the home (see, for example, Exhibit 7 at point 8). Mr Kay has made further allowance for the swimming pool and the kennels, which, when applied, on any view totals much less than the $345,000 that had been deducted in the respondent's documents, to give an unimproved valuation of 11 Battersea Road of $365,000. Even if Mr Kay's estimated cost of construction of the kennels is only 50% of the correct value, the total estimated depreciated value of the improvements is well shy of the sum that has been allowed from the sale price of 11 Battersea Road (that is, $710,000 less the general unimproved value of $365,000 = $345,000, being the maximum available for all improvements). The Tribunal understands that the task undertaken by Mr Kay is intended to confirm that the unimproved value of 11 Battersea Road as at 1 August 2010 and 1 August 2011 identified in the Landgate - Valuation System Urban UV Report Details (Exhibit 8) of $365,000 is not excessive. Or, put another way, Mr Kay's reasoning establishes that the unimproved value of 11 Battersea Road is at least $365,000.
74 Mr Kay's reasoning persuades the Tribunal that the unimproved value of 11 Battersea Road as at 1 August 2011 is at least $365,000.
75 Mr Kay has expressed the view that the property at 11 Battersea Road is 'Not quite as good as the [applicant's property]' but does not explain why he has arrived at that view. The Tribunal, however, accepts that the expert valuer has formed that opinion and, bearing in mind that valuation is an art, the Tribunal accepts the evidence of an experienced licensed valuer, particularly as there is no challenge to that statement. The difference between the applicant's property and 11 Battersea Road places an additional $10,000 on the value of the applicant's property in Mr Kay's opinion, which totals $375,000 as at 1 August 2011 for the assessment year 1 July 2012 to 30 June 2013 referred to in the notice.
76 As to the unimproved value of the applicant's property as at 1 August 2010, neither party has identified any relevant evidence of sales of comparable properties. The only evidence adduced by the respondent before the Tribunal is the evidence of Mr Kay, which is not supported by any pre-1 August 2010 sales, and the Landgate - Valuation System Urban/UV Report Details (Exhibit 8), indicating that the unimproved value of the applicant's property has been $375,000 since 2008, save for a reduction at 1 July 2009 to $355,000. The applicant has produced no evidence, save for his own assertions, that the unimproved value of the applicant's property is no more than $245,000, alternatively $275,000, and further alternatively $300,000.
77 If the Tribunal were to conclude that the unimproved value of the applicant's property is $375,000 as at 1 August 2011, there is nothing before the Tribunal to explain the likelihood of a substantial increase in its unimproved value between 1 August 2010 and 1 August 2011, as would be required to explain that the unimproved value of the applicant's property as at 1 August 2010 was $245,000, $275,000 or $300,000.
78 The applicant contends that the Tribunal should consider property further afield, not in the locality, and of a different zoning and description. The parcels of land advanced by the applicant include 5 acre Jandakot blocks of unimproved land. The Tribunal agrees with the respondent's submission that sales evidence of any such land is not relevant, as it does not represent sales evidence for comparable properties to the applicant's property as at 1 August 2010, 1 August 2011, or at all. The Tribunal finds, as the respondent submits, these parcels of land:
• have a different zoning;
• do not allow kennels;
• have a restricted 3,000m2 building envelope; and
• are not within Canning Vale;
- and the general amenity of the area is compromised by its location immediately adjoining the Jandakot airport (Exhibit 14).
79 To the extent that the applicant intended 137 and 190 Merrit Loop, Jandakot to be considered as comparable with the applicant's property, the Tribunal concludes that the Merrit Loop properties are not comparable and their sale price is irrelevant to an assessment of the unimproved value of the applicant's property as stated earlier.
80 The applicant relies upon a November 2005 valuation of a property 'directly opposite' 31 Crufts Way to support his contentions that:
a) The unimproved value of the applicant's property is less than $375,000 as at 1 August 2010 and 1 August 2011 - that is, four and five years after the 2005 valuation of a neighbouring property.
b) The estimated depreciated value of the nine kennels situated on the applicant's property is $2,000 to $2,500 per kennel as at 1 August 2010 and 1 August 2011 - that is, four and five years after the 2005 valuation of a neighbouring property.
- However, the applicant has not produced any such valuation to the Tribunal so that there could have been consideration or debate about the reasoning applied in that valuation. Further, there is no evidence that the applicant has produced that valuation to the respondent for the respondent's consideration. There is no evidence that such a valuation exists. In any event, a 2005 valuation on its face is unlikely to be relevant to an assessment of the unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011.
81 The applicant contends that a reasonable depreciated current price per kennel is $5,000 to $8,000. The applicant asserts that experts in kennel valuations and appraisals 'quite often' value kennels at 'price per kennel' as opposed to 'trying to use residential backyard patio depreciation rates due to the rather obvious differences in construction costs and requirements'. This is a criticism of Mr Kay's calculation of the estimated depreciated cost of the kennels situate at 20 Crufts Way and 11 Battersea Road and, by implication, the applicant's property. The applicant, however, has failed to adduce any evidence to support his contention that the reasonable depreciation value of the nine kennels situate on the applicant's property should be assessed at the rate of $5,000 to $8,000 per kennel. Although Mr Kay has not identified the source of the rate for the value he places on the kennels, it must be remembered that Mr Kay's calculations are directed to confirming that the unimproved value for the applicant's property is not excessive. Mr Kay's calculations of the value of improvements allow for a substantial margin for error, as can be seen in the reasoning applied to 11 Battersea Road. The Tribunal finds that the applicant's contention of the value of the kennels is without foundation at all and appears to be based on an entirely arbitrary figure.
82 The applicant further contends that he is in possession of a 2007 reference for the construction of a 36m2 Colorbond 'kennel grade' leanto (roof and columns only) at a cost of approximately $225 per square metre. He asserts that as there is no concrete floor, side walls, doors, internal panels, divisions, gates, septics, water, electricity, lights and drains in that price, all of which a kennel building would 'require by law', that price, which is similar to the rate used by Mr Kay, is not reflective of the real cost of construction of a kennel. The applicant's contention is intended to cast doubt on the respondent's calculation of the estimated depreciated value of the kennels at the properties considered by Mr Kay, and particularly 11 Battersea Road and, by implication, at the applicant's property. Again, the applicant has not provided a copy of the '2007 reference' nor a reference to any provisions concerning the legal requirements for the construction of kennels so that the Tribunal could have assessed the accuracy of the applicant's contentions. Again, the applicant's contentions are without foundation.
83 The applicant also relies upon a property allegedly purchased by the applicant in October 2009, which 'currently uses a governmentapproved depreciation schedule where all the improvements except for the ancillary improvements to the land via fencing and dog exercise yards are not being depreciated' (Tribunal's emphasis). The applicant then asserts that the approximate depreciated values are as follows:
• 1,050 per square metre depreciated value of 190m2 air conditioned 1982 house and 1997 brick and tile granny flat;
• $1,000 per square metre depreciated value of approximately 110m2 usable area 1993 to 1994 brick and tile kennel (which equates to $5,500 depreciated value per kennel at 2009);
• $750 per square metre depreciated value of approximately 27m2 fibro, iron, tin and concrete 2004 built air conditioned games room; and
• $400 per square metre depreciated value of approximately 50m2 tin and concrete garage and workshop.
84 The applicant asserts that the depreciated value of the improvements of this property is $350,000 and that, further, he is able to identify between $80,000 and $100,000 of other improvements which 'equates to $250,000 $270,000 unimproved value of that land'.
85 The applicant has not identified the property. The applicant has not provided any documentary evidence to support the figures referred to and has failed to establish that the unidentified property is comparable to the applicant's property in issue. Further, as the relevant items are 'not' being depreciated, the whole of that evidence is irrelevant to the issue of the relevant depreciation rate. Again, the applicant's contentions are unsubstantiated.
86 Further, the applicant asserts that $270,000 is the unimproved value of the applicant's property based upon the 'building envelopes method' to which he referred in an email to Mr Kay. There is no evidence to support this method of valuation.
87 The applicant has referred to data concerning the fluctuation of Perth land and house sales in the period 2007 to 2013 which the Tribunal finds is of no assistance to assessing the unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011.
88 The applicant's other contentions involve references to oral valuations by unidentified valuers, the evidence for which has not been produced, and sales of properties in the locality as far back as 1993, which are not relevant.
89 As to the applicant's experience, he asserts that he '[has] gained considerable ''hands on'' experience over the past 13 years financing, planning, repairing, and maintaining not one but 3 of these kennel properties' as owner or 'principal', and as the '[partowner and comanager] of the finances, repairs and maintenance of an approximate[ly] 8,000 acre substantial wheatbelt mixed farming property'. None of this experience persuades the Tribunal that the applicant has developed and gained any expertise akin to a valuer in the expert field of valuation. The applicant contends that experienced valuers do not have specialised knowledge and experience of the 'kennel properties', and are generally not well placed to value property such as the applicant's property. The Tribunal finds that the applicant's experiences do not persuade the Tribunal that the applicant possesses experience as a valuer of the 'kennel properties', or at all, albeit that he may be an experienced owner of kennel properties and other properties.
90 The Tribunal finds that the respondent's valuer, Mr Kay, has identified a reasoned, rational and logical process by which he has arrived at his 'at least $375,000' valuation for the unimproved value of the applicant's property. The applicant, on the other hand, has applied a series of self-serving, unsubstantiated, unrelated propositions and data to arrive at an ever decreasing unimproved value for the applicant's property. The Tribunal concludes that the applicant's contentions as to the unimproved value of the applicant's property are not supported.
91 The Tribunal finds that, on the evidence before it, it is more probable than not that the unimproved value of the applicant's property as at 1 August 2011 is at least $375,000 based upon the evidence of the sale of 11 Battersea Road. Having so found, the Tribunal finds that there is no evidence to explain a significantly lower unimproved value for the applicant's property as at 1 August 2010, as contended by the applicant, of $245,000, $275,000 or $300,000. By contrast, the Landgate Valuation System Urban/UV Report Details (indicating that the unimproved value of the applicant's property has consistently been $375,000 since 2008, save for a reduction in 2009/2010 to $355,000), tends to support the respondent's contention that the unimproved value of the applicant's property as at 1 August 2010 is at least $375,000. The Tribunal contends that, for these reasons, it is more probable than not that the unimproved value of the applicant's property as at 1 August 2010 is also at least $375,000.
92 Upon this analysis of the evidence, the Tribunal concludes that the correct and preferable decision on the evidence is that the unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011 is $375,000.
Telephone call
93 Although Mr Kay admits he did agree to call the applicant to discuss his opinion, Mr Kay was not obliged at law or otherwise to make contact with the applicant. It is clear from the applicant's submissions that little would likely have been achieved from such telephone contact, had it taken place. Further, the Tribunal finds that Mr Kay did make an unsuccessful attempt to call the applicant.
94 In any event, the Tribunal concludes that this complaint is not a valid objection, and the failure to have a discussion with the applicant prior to formulating his opinion on the unimproved value of the applicant's property was of no consequence in fact or in law.
Conclusion
95 For the reasons referred to herein, the Tribunal concludes that the applicant's objection was correctly disallowed by the respondent on 2 September 2013. Accordingly, the Tribunal affirms the respondent's decision to disallow the applicant's objection, and affirms the respondent's decision that the unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011 is $375,000 for the purposes of calculating the land tax and MRI tax for the assessment and financial years 1 July 2011 to 30 June 2012 and 1 July 2012 to 30 June 2013 as provided for in the notice.
Other matters
96 The applicant has sought to raise allegations of an ulterior motive for the respondent's submission and evidence. The applicant has no basis whatever for the assertion. The Tribunal has placed no weight upon the applicant's assertion of an ulterior motive.
Costs
97 The practical result of the Tribunal's conclusion and review is that the applicant is obliged to pay the land tax and MRI tax as identified in the notice dated 7 March 2013. The tax payable totals $345, a figure of low value. Notwithstanding the low value of the total tax in question, the applicant embarked on a dispute concerning the basis of the calculation of those taxes. The applicant, however, did not at any stage offer any cogent evidence to assist the Tribunal to arrive at the correct and preferable decision. The proceeding has required public funds, and time to be devoted to the response to the applicant's claims and to undertake the review. The public funds and time expended in responding to the applicant's claims and the review might be considered to be commercially disproportionate to the value of the taxes at stake. The fact of the low value of the total taxes in issue does not preclude the applicant from making his objection and seeking the Tribunal's review. Nor does the low value of the total taxes in issue justify a cursory review. In every proceeding, and regardless of the value at stake, the Tribunal must undertake a review of the subject of the application commenced within its jurisdiction on the evidence and submission made to the Tribunal. However, the low value of the total taxes at stake does not justify or entitle the applicant to advance a case for review that has no substantial merit and that is not the subject of some evidence to support the applicant's alternative contentions. In this case, the applicant has advanced contentions as to the unimproved value of the applicant's property that have no merit and are made without foundation. The Tribunal informed the applicant at directions hearings that his failure to advance his contentions on the basis of reliable and cogent evidence might result in an application for costs being advanced by the respondent in the event that the respondent is successful. As the parties have not had the opportunity to make submissions as to costs, the Tribunal shall make orders that afford the parties the opportunity of addressing the issue of costs of the proceedings.
Orders
1. Upon review, the Tribunal affirms the respondent's decisions:
(a) to disallow the applicant's objection to the respondent's determination of unimproved value of the applicant's property as at 1 August 2010 and 1 August 2011 of $375,000; and
(b) that the unimproved value of the applicant's property situate at 17 Crufts Way, Canning Vale as at 1 August 2010 and 1 August 2011 is $375,000.
2. By 29 August 2014, the parties may file written submissions as to the costs of the proceeding which submissions shall not exceed three pages in length and shall identify whether either party seeks a particular order for costs or no order for costs.
I certify that this and the preceding [97] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS N OWEN-CONWAY, MEMBER
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