Lendlease (Goldfields Residential) Pty Limited and Lendlease (Goldfields Hotel) Pty Limited, v Valuer General of New South Wales

[2025] NSWLEC 1071

Land and Environment Court

New South Wales

Medium Neutral Citation:

Lendlease (Goldfields Residential) Pty Limited and Lendlease (Goldfields Hotel) Pty Limited, v Valuer General of New South Wales [2025] NSWLEC 1071

Hearing dates:

Conciliation Conference on 1 November and 9 December 2024

Date of orders:

11 February 2025

Decision date:

11 February 2025

Jurisdiction:

Class 3

Before:

Davidson AC

Decision:

Proceedings 2024/174391

The Court orders:

(1) The appeal is upheld.

(2) The value of the whole land formerly legally described as Lot 8 in Deposited Plan 1224258, known as 1 Alfred Street, Sydney, NSW 2000 is amended to $505,340,000 for the valuing year 1 July 2022 pursuant to s 6A of the Valuation of Land Act 1916

Proceedings 2024/174392

The Court orders:

(1) The appeal is upheld.

(2) The value of the whole land legally described as Lots 1, 2, 3 and 4 in Deposited Plan 1290500, is amended to $505,340,000 for the valuing year 1 July 2022 pursuant to s 6A of the Valuation of Land Act 1916 and is apportioned pursuant to s 26A of the Valuation of Land Act 1916 in the following manner:

Lot	Apportionment	Land Value
Lot 1 (Residential)	85.30%	$431,047,677
Lot 2 (Hotel)	12.88%	$65,080,545
Lot 3 (Rugby Place)	0.02%	$88,712
Lot 4 (Retail)	1.81%	$9,123,067
Total	100.00%	$505,340,000

Catchwords:

VALUATION APPEAL – land valuer – conciliation conference – agreement between the parties – orders

Legislation Cited:

Land and Environment Court Act 1979, ss 19, 34

Valuation of Land Act 1916, Pt 4, ss 6A, 14A, 26A, 29, 35B, 35C, 37, 38, 39, 40

Sydney Local Environmental Plan 2012

Category:

Principal judgment

Parties:

Lendlease (Goldfields Residential) Pty Limited (First Applicant)
Lendlease (Goldfields Hotel) Pty Limited (Second Applicant)

Valuer General of New South Wales (Respondent)

Representation:

Counsel:
L Johnstone (First Applicant)
L Johnstone (Second Applicant)
M Carpenter (Respondent)

Solicitors:
Mallesons (First Applicant)
Mallesons (Second Applicant)
Crown Solicitor of NSW (Respondent)

File Number(s):

2024/174391
2024/174392

Publication restriction:

No

Judgment

1. COMMISSIONER: The applicants appeal the Valuer General’s Determinations dated 14 March 2024 pursuant to s 37(1) of the Valuation of Land Act 1916 (Valuation Act) in respect of the valuations of the land value of the property legally described as Lot 8 in Deposited Plan 1224258 (Original 2022 Valuation) and Lots 1, 2, 3 and 4 in Deposited Plan 1290500 known as 1 Alfred Street, Sydney NSW 2000 (First Supplementary 2022 Valuation).

2. The proceedings fall within Class 3 of the Court’s jurisdiction pursuant to s 19(b) of the Land and Environment Court Act 1979 (LEC Act).

3. The statutory power or function to be exercised in determining the proceedings are s 34(3)(a) of the LEC Act and s 40(1)(b) of the Valuation Act.

4. The Applicant appeals the determination of the Valuer General made on 14 March 2024 in respect of the objections made by the Applicants to the Valuation of the land value of the land as of 1 July 2022 and the First Supplementary Valuation of the Land as of 1 July 2022.

Planning Background and Site Features

5. The land is located on the northern edge of the Sydney CBD, within the City of Sydney Local Government Area. The site is located on the northern boundary of the “City Core” sector of the Sydney CBD.

6. The land was formerly described as Lot 8 in Deposited Plan 1224258 and was owned by both applicants as tenants in common (the parent parcel). The land was then subdivided into Lots 1, 2, 3 and 4 by Deposited Plan 1290500 (the first supplementary parcel). Lots 1 to 4 are lots within the site of a building which was in the course of erection at the valuation date. The First Applicant was the owner of Lots 1 and 3 while the second applicant was the owner of Lots 2 and 4. Despite the separate ownerships, the land was valued together.

7. The parent parcel has a site area of 4041 square metres. It is bound by Alfred Street to the north, Pitt Street to the east, Rugby Place to the south and George Street to the west. It is located diagonally opposite the Circular Quay rail/train/ferry interchange, in direct line 250 metres northeast of Wynyard railway station and 650 metres north of the Sydney GPO.

8. The parent parcel is irregular in shape and contains an approximate northern frontage to Alfred Street of 59 metres arc, a 49.18 metre eastern frontage to Pitt Street, a 14.48 metre western frontage to George Street and a part southern frontage of 25.83 metres to Rugby Place.

9. As at the 1 July 2022 Valuing Year, the parent parcel had been excavated down to six levels with building works for the development, known as One Circular Quay, commenced primarily to the excavated and ground levels.

10. For valuing year 1 July 2022, the relevant planning control was Sydney Local Environmental Plan 2012 (Sydney LEP) – Map Reference 14. The subject land was zoned SP5 - Metropolitan Centre, which was also the in force at the dates the valuations were made.

Valuation objections and appeal

11. The valuation objection and history of the appeal includes:

1. The Respondent issued a Notice of Valuation in accordance with ss 14A and 29(1)(a) of the Valuation Act for the parent parcel with a last date to object of 31/3/2023 (Original 2022 Valuation). The issued land value was $625,000,000.

2. On 31 March 2023 the Applicants lodged an objection to the Valuer General in respect of the land valuation for the parent parcel as at, 1 July 2022.

3. The Respondent issued a supplementary Notice of Valuation in accordance with ss 14A and 29(1)(a) of the Valuation Act for the land with a last date to object of 22/8/2023 (First Supplementary Valuation) following the registration of Deposited Plan 1290500. Despite the applicants holding separate lots in the subdivision, only one Notice of Valuation, reflective of the parent parcel, was issued to the applicants. The issued land value was $625,000,000.

4. On 31 March 2023 the Applicants lodged an objection to the Valuer General in respect of the land valuation issued (First Supplementary Valuation), as at 1 July 2022. The objection contention was that the land value was too high.

5. On 14 February 2024, pursuant to s 35B of the Valuation Act, the Respondent partly allowed both objections, determining the issued land value for both objections as of 1 July 2022 to be $546,500,000 for both objections and issued a Notice of Determination to the Applicants as required by s 35C of the Valuation Act.

6. On 10 May 2024 the Applicant filed appeals in Class 3 of the Courts’ jurisdiction, under s 37(1) of the Valuation Act in respect of the Original Valuation and the First Supplementary Valuation for the 2022 valuing year.

7. The Land Value contended by the Applicants in both appeals for valuing year 1 July 2022 was $320,000,000 in its Class 3 Application and the Land Value contended by the Respondent in both appeals was $546,500,000.

8. The matters were provided with case numbers 2024/174391 for the former Lot 8 in Deposited Plan 1224258 and 2024/174392 for Lots 1, 2, 3 and 4 in Deposited Plan 1290500.

Legislation - Valuation of Land Act 1916

12. Section 6A of the Valuation Act provides as follows:

6A   Land value

(1)  The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner’s predecessor in title had not been made.

(2)  Notwithstanding anything in subsection (1), in determining the land value of any land it shall be assumed that—

(a)  the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and

(b)  such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used, but nothing in this subsection prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subsection (1) had not been made.

(3)  Notwithstanding anything in subsection (1), in determining the land value of any land, being land in relation to which, at the date to which the valuation relates, there was a water right—

(a)  the land value shall include the value of the right, and

(b)  it shall be assumed that the right shall continue to apply in relation to the land.

(4)  For the purpose of determining the value of a water right, the value of any water secured by, or referable to, that right is to be ignored.

13. Section 26A of the Valuation Act further provides follows:

26A Valuation of parcels that form part of the site of a building

(1) If the site of a building is subdivided into separate parcels of land solely by means of a subdivision to which this section applies, the value of each of those parcels is to be determined as follows—

(a) first, the Valuer-General is to value all of those separate parcels as if they comprised a single parcel and that single parcel and all improvements on it were owned by a single owner, and

(b) then, the Valuer-General is to apportion the value obtained under paragraph (a) between each of those separate parcels, on the basis of their respective rental values as a proportion of the sum of the rental values of each of those parcels.

(2) This section applies to subdivision by any of the following means—

(a) subdivision by the creation of 2 or more lots in a deposited plan,

(b) subdivision by a deposited plan and one or more strata plans,

(c) subdivision by 2 or more strata plans.

(3) This section does not apply unless at least 2 or more of the parcels of land created by the subdivision are adjoined horizontally (that is, one is wholly or partly above the other).

(4) The site of a building includes land consisting of space above or below the building.

(5) In determining the rental value of a parcel of land, regard is to be had to any improvements on or appertaining to the parcel.

(6) This section does not limit any power of the Valuer-General to include 2 or more parcels of land that are owned by the same person in one valuation.

(7) In this section—

building includes a building that is in the course of construction.

parcel of land means a parcel (within the meaning of the Strata Schemes Development Act 2015) or the land comprised in a lot in a deposited plan.

strata plan means a strata plan within the meaning of the Strata Schemes Development Act 2015.

14. Further, Pt 4, ss 37-40 of the Valuation Act states:

Part 4 Appeals to Land and Environment Court

Division 1 Appeals

37   Right of appeal

(1)  Any person entitled under Part 3 to object to a valuation may appeal to the Land and Environment Court if the person is dissatisfied with the Valuer-General’s determination of any such objection to the valuation concerned (whether or not the person was the objector).

(2) An appeal may not be made on the ground that the objection is taken to have been disallowed, as referred to in section 35C (4), unless written notice of the objector’s intention to appeal on that ground has been given to the Valuer-General at least 14 days before the appeal is made.

(3)  No person or body has jurisdiction or power to conduct a review or hear an appeal in respect of the determination of an objection except as provided by this Part.

38   Time for appeal

(1)  An appeal must be made not later than 60 days after the date of issue of the notice of the Valuer-General’s determination of the objection.

(2)  The Land and Environment Court may allow a person to appeal after the 60-day period.

39   Grounds of appeal

The appellant’s and respondent’s cases on an appeal are not limited to the grounds of the objection.

40   Powers of Land and Environment Court on appeal

(1)  On an appeal, the Land and Environment Court may do any one or more of the following—

(a)  confirm or revoke the decision to which the appeal relates,

(b)  make a decision in place of the decision to which the appeal relates,

(c)  remit the matter to the Valuer-General for determination in accordance with the Court’s finding or decision.

(2)  On an appeal, the appellant has the onus of proving the appellant’s case.

15. The Court arranged a conciliation conference under s 34(1) of the LEC Act between the parties, which was held on 1 November 2024. I presided over the conciliation conference.

16. At the conciliation conference, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties.

17. This decision involved determining the value of the land pursuant to s 6A of the Valuation Act for the Original 2022 Valuation and making a decision in place of the decision to which the appeal relates in relation to 2022 valuing year pursuant to s 40(1) of the Valuation Act.

18. This decision also involved determining the value of the land pursuant to s 6A and s 26A of the Valuation Act for the First Supplementary 2022 Valuation and making a decision in place of the decision to which the appeal relates in relation to 2022 valuing year pursuant to s 40(1) of the Valuation Act.

19. Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties’ decision if the parties’ decision is a decision that the Court could have made in the proper exercise of its functions. The parties’ decision involves the Court exercising the function under s 40(1) of the Valuation Act to “make a decision in place of the decision to which the appeal relates” in relation to the land value of the land as of 1 July 2022.

20. There are jurisdictional prerequisites that must be satisfied before this function can be exercised. The parties identified the proceedings fall within Class 3 of the Court’s jurisdiction pursuant to s 19(b) of the LEC Act and explained how the jurisdictional prerequisites have been met:

1. The value of the Land is referrable to ss 6A (in the 2024/00174391 Proceedings) and 26A (in the 2024/174392 Proceedings) of the Valuation Act;

2. As at the time of the Original 2022 Valuation, the Applicants owned the Land as tenants in common;

3. As at the time of the First Supplementary 2022 Valuation, the Applicants owned the Land on the following basis:

1. the First Applicant was the owner of Lots 1 and 3 in DP1290500; and

2. the Second Applicant was the owners of Lots 2 and 4 in DP1290500.

4. The Respondent issued a notice of determination in respect of the Applicants’ objections to the Original 2022 Valuation and First Supplementary 2022 Valuation on 14 March 2024.

5. The Applicant is entitled to bring these Proceedings pursuant to ss 29(1)(a), 29(3A) and 37(1) of the Valuation Act.

6. The Applicant filed its Class 3 Applications under s 37(1) of the Valuation Act on 10 May 2024, within the 60-day limitation period imposed by s 38(1).

7. The Court has the power to make a decision in place of the decision to which the appeal relates pursuant to s 40(1)(b) of the Valuation Act.

8. The parties attended a Conciliation Conference in good faith pursuant to s 34 of the LEC Act.

9. Following discussions between the experts, the parties arrived at an agreed figure that was acceptable to the parties, within the meaning of s 34(3) of the LEC Act.

10. The Court has the power to dispose of the proceedings pursuant to an agreement reached between the parties pursuant to s 34(3) of the LEC Act.

21. For the reasons set out above, I am satisfied that the parties’ decision is one that the Court could have made in the proper exercise of its functions, as required by s 34(3)(a) and (b) of the LEC Act for the “disposal of proceedings in accordance with the parties’ decision”.

22. As the parties’ decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties’ decision.

Notation:

23. The Court notes:

1. Each party is to bear its own costs of these proceedings.

Orders:

Proceedings 2024/174391

24. The Court orders:

1. The appeal is upheld.

2. The value of the whole land formerly legally described as Lot 8 in Deposited Plan 1224258, known as 1 Alfred Street, Sydney, NSW 2000 is amended to $505,340,000 for the valuing year 1 July 2022 pursuant to s 6A of the Valuation of Land Act 1916

Proceedings 2024/174392

25. The Court orders:

1. The appeal is upheld.

2. The value of the whole land legally described as Lots 1, 2, 3 and 4 in Deposited Plan 1290500, is amended to $505,340,000 for the valuing year 1 July 2022 pursuant to s 6A of the Valuation of Land Act 1916 and is apportioned pursuant to s 26A of the Valuation of Land Act 1916 in the following manner:

Lot	Apportionment	Land Value
Lot 1 (Residential)	85.30%	$431,047,677
Lot 2 (Hotel)	12.88%	$65,080,545
Lot 3 (Rugby Place)	0.02%	$88,712
Lot 4 (Retail)	1.81%	$9,123,067
Total	100.00%	$505,340,000

Michael Davidson

Acting Commissioner of the Court

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Decision last updated: 11 February 2025