PTDA v Commissioner for State Revenue - [2017] VSCA 266

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0135

PUBLIC TRANSPORT DEVELOPMENT AUTHORITY	First Applicant
and
CIVIC NEXUS PTY LTD	Second Applicant
v
COMMISSIONER OF STATE REVENUE	Respondent

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JUDGES:	WARREN CJ, MAXWELL P and KAYE JA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 April 2017
DATE OF JUDGMENT:	22 September 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 266
JUDGMENT APPEALED FROM:	[2016] VCAT 1457 (Garde J)

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VALUATION OF LAND – Land tax – Site value – Highest and best use – Public infrastructure – Railway station and transport interchange – Planning restrictions – Capacity of land to yield monetary return – Potentiality of land – State of Victoria sole hypothetical purchaser – Whether comparable sales method applicable – Whether Tribunal acted as expert – Whether valuation decision reasonably open – No error of law – Appeal dismissed – Valuation of Land Act 1960 s 5A.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr J Delany QC with Dr B Gauntlett	Minter Ellison
For the Respondent	Mr C Wren QC with Mr I Munt	Solicitor for the Commissioner of State Revenue

WARREN CJ

MAXWELL P
KAYE JA:

Summary

This proceeding concerns the site value of certain land (‘the land’), which forms part of Southern Cross Station in Spencer Street, Melbourne. The land is owned by the first applicant (‘PTDA’) and leased to the second applicant (‘Civic Nexus’).

The respondent Commissioner assessed the land for land tax in each of the years 2010 to 2013 inclusive. The assessments were based on valuations of the land by the Valuer-General. The applicants objected to the assessments and, at their request, the dispute was referred to the Victorian Civil and Administrative Tribunal (the ‘Tribunal’).

Land tax is assessed on the basis of the taxable value of the land in question. The taxable value of land is an amount equal to its site value.[1] The term ‘site value’ in the Land Tax Act 2005 has the same meaning as in the Valuation of Land Act 1960 (the ‘Act’).[2]
[1]Land Tax Act 2005 s 19(1).
[2]Ibid s 3(1).

Accordingly, the issue for the Tribunal was the correct determination of the value of the land in accordance with s 5A of the Act. It was common ground before the Tribunal that, for the purposes of s 5A(3)(a) of the Act, the ‘highest and best use’ to which the land might reasonably be expected to be put was its existing use as an ‘intermodal transport interchange facility’.

After considering expert evidence relied on by the applicants and the Commissioner respectively, the Tribunal (constituted by its President, Garde J) concluded that the site values in the relevant tax years were substantially below those on which the Commissioner’s assessments had been based. His Honour did not, however, accept the applicants’ contention that the true site value in each year was nil. Accordingly, the applicants now seek leave to appeal from his Honour’s decision.

For reasons which follow, we would grant leave to appeal but dismiss the appeal.…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2017] VSCA 266
Decision Date: 22 September 2017

CaseChat Overview and Summary

The parties involved in this case are PTDA and the Commissioner for State Revenue, with the dispute centred around the valuation of land for land tax purposes. The dispute was heard in the Court of Appeal of the Supreme Court of Victoria. The primary focus of the case was to determine whether the Tribunal's decision regarding the site value of the land, specifically the potential value derived from the highest and best use of the land, was legally sound and if the methodology employed to determine this value was appropriate.

The legal issues at hand were whether the Tribunal's valuation decision was reasonably open on the evidence before it, if there was any error of law in the process, and if the Tribunal had acted as an expert. Additionally, the court examined whether the Tribunal's decision to exclude the comparable sales method of valuation was correct, considering the unique circumstances of the land in question, which included significant public infrastructure such as a railway station and transport interchange, and planning restrictions that affected its capacity to yield a monetary return.

In delivering the judgment, the Court of Appeal found that the Tribunal's decision was reasonably open on the evidence, and there was no error of law. The court held that the Tribunal did not act as an expert in making its determinations, and that the decision to exclude the comparable sales method was justified given the unique nature of the land and the hypothetical purchaser, which was identified as the State of Victoria. The court also determined that the Tribunal's approach to the valuation of the land, taking into account its potentiality and the constraints imposed by planning restrictions, was appropriate and in line with the statutory provisions under the Valuation of Land Act 1960.

As a result of the court's findings, the appeal was dismissed, and the decision of the Tribunal was upheld. The court confirmed that the valuation decision was not only legally sound but also in accordance with the relevant statutory framework. The case underscores the importance of considering the specific characteristics of land, including potential uses and constraints, when determining its site value for land tax purposes.

Orders