Rifon 2 Pty Ltd –v- Valuer General - [2010] NSWLEC 1115

Land and Environment Court

of New South Wales

CITATION: Rifon 2 Pty Ltd –v- Valuer General [2010] NSWLEC 1115

PARTIES:
APPLICANT
Rifon 2 Pty Ltd
RESPONDENT
Valuer General

FILE NUMBER(S): 30572 of 2009 and 30573 of 2009

CORAM: Parker AC

KEY ISSUES: VALUATION OF LAND :-

LEGISLATION CITED: Land and Environment Court Act 1979
Valuation of Land Act 1916
South Sydney Local Environmental Plan 1998

DATES OF HEARING: 6 May 2010 and 7 May 2010

DATE OF JUDGMENT:
21 May 2010

LEGAL REPRESENTATIVES:
APPLICANT
Mr D. Kingston (Agent)
RESPONDENT
Mr J Maston, Barrister
Instructed by Ms J Donohue, Solicitor
for Valuer General

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Parker AC

21 May 2010

30572 of 2009 Rifon 2 Pty Ltd v Valuer General
30573 of 2009
JUDGMENT

1 This is an appeal by Rifon 2 Pty Ltd (the Applicant), under Section 37 of the Valuation of Land Act 1916 (the Act), against the Land Value assessed by the Valuer General (the Respondent) in respect of the property known as 23-31 Darlinghurst Road, Kings Cross (the subject property).

Background

2 The Applicant was represented by Mr D Kingston, the Sole Director of Rifon 2 Pty Ltd.

3 The Respondent was represented by Mr J Maston, Barrister, instructed by Ms J Donohue, Solicitor for the Valuer General.

4 The Land Value of the subject property at 1^st July 2007 (the 2007 Base Date) was assessed by the Applicant at $4,200,000 and by the Respondent at $5,600,000.

5 The Land Value of the subject property at 1^st July 2008 (the 2008 Base Date) was assessed by the Applicant at $4,200,000 and by the Respondent at $5,770,000.

6 The matter was the subject of a conference under Section 34 of the Land and Environment Court Act 1979 but the parties were unable to reach agreement.

7 The matter was the subject of an on site inspection on 6^th May 2010, followed by a hearing in Court on 6^th and 7^th May 2010.

8 Section 40(2) of the Act states:

"On an appeal, the appellant has the onus of proving the appellant's case."

The subject property

9 The subject property is located in the area generally known as Kings Cross, being approximately three kilometres east of the Sydney GPO within an area of dense retail, commercial and residential development.

10 Located on the eastern side of Springfield Avenue, the subject property is without the adult oriented uses precinct of Darlinghurst Road which predominates between the western side of Springfield Avenue and the junction with Bayswater Road.

11 The subject property comprises a four level building including ground level retail units with two upper levels of accommodation currently used as a backpacker hostel.

12 The principal frontage of the subject property is to Darlinghurst Road (14.95m) with significant return frontages to the pedestrianised Springfield Avenue (32.49m) and Llankelly Place (18.06m) offering considerable exposure.

13 With a site area of 537.5sqm, the subject property is a relatively level…

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: [2010] NSWLEC 1115
Decision Date: 21 May 2010

CaseChat Overview and Summary

Rifon 2 Pty Ltd (Applicant) appealed the Land Value assessment of the Valuer General (Respondent) in respect of the property at 23-31 Darlinghurst Road, Kings Cross, determined under Section 37 of the Valuation of Land Act 1916 (the Act). The Applicant, represented by Mr D Kingston, Director, assessed the Land Value at $4,200,000 for both the 2007 and 2008 Base Dates, whereas the Respondent assessed it at $5,600,000 and $5,770,000, respectively. The Applicant contended that the highest and best use of the property was ground floor retail with either upper floor budget residential or budget office accommodation, while the Respondent contended that the highest and best use comprised ground floor retail with upper floor good quality office accommodation. The Applicant also argued that the proximity of the adult-oriented uses precinct diminished the potential benefits of the property's exposure. The Respondent maintained that the property's exposure and frontage provided significant ground floor retail potential, and the adult-oriented uses precinct did not diminish the potential benefits. The court considered the valuation method to be the direct comparison approach using comparable sales evidence assessed on a rate per square metre floor space area (FSA) basis. The court examined the comparable sales evidence and found that the comparable sales at 24-30 Springfield Avenue and 33-35 Darlinghurst Road, Kings Cross, were directly relevant. The court also found that the comparable sales at 66-66A Darlinghurst Road, 72-80 Darlinghurst Road, and 49-55 Darlinghurst Road, Kings Cross, and 441-449 Elizabeth Street, Surry Hills, were indirectly relevant. The court further found that the comparable sales at 70A Darlinghurst Road, Kings Cross, Corner Campbell and Crown Streets, Surry Hills, 16-32 McLachlan Avenue, Rushcutters Bay, and 5-9A Roslyn Street, Kings Cross, were of limited relevance. The court considered the valuations of the Respondent to be supportable, and the Applicant did not present an approach to the valuation of the subject property sufficient to prove the Applicant's case as required by section 40(2) of the Act. Consequently, the court dismissed the appeal and confirmed the Land Values of $5,600,000 as at the base date of 1st July 2007 and $5,770,000 as at the base date of 1st July 2008 for the property known as 23-31 Darlinghurst Road, Kings Cross.

Orders