Skycity Adelaide Pty Ltd v Valuer-General

Skycity Adelaide Pty Ltd, the operator of a casino, challenged the valuation and rate notice issued by the City of Adelaide, asserting that the annual value calculation was erroneous and the rates were excessive. The City of Adelaide determined the annual value of the casino premises by calculating a percentage of the casino's profit, leading Skycity to argue that this method was both legally flawed and based on an incorrect valuation principle. Skycity contended that the casino licence was tied to the premises and should not have been considered in the valuation process, and further argued that the rent per square metre should have been used instead. The case before the court was to determine whether the City of Adelaide's approach to calculating the annual value was legally sound and whether it adhered to proper valuation principles.

The central legal issue was whether the City of Adelaide had correctly calculated the annual value of the casino premises. The court had to examine whether the valuation was based on an appropriate percentage of the casino's earnings before interest, taxation, depreciation, amortisation, and rent (EBITDAR) to determine the gross rental value. The court also had to assess if the casino licence, which was unique and not comparable to other commercial properties, should have been excluded from the valuation or factored in differently. Moreover, the court needed to decide if the rent per square metre was a suitable alternative method for assessing the annual value of the premises.

The court found that the City of Adelaide's method of calculating the annual value, which involved a percentage of the casino's EBITDAR, was both legally sound and consistent with proper valuation principles. The court held that the casino licence, while unique, did not necessitate exclusion from the valuation process, and the figures provided reliable evidence of the reasonable profits expected from the occupation of such premises. The court concluded that the valuation was neither manifestly excessive nor legally flawed. As a result, the appeals by Skycity were dismissed.

In summary, the court upheld the City of Adelaide's valuation method, affirming that the annual value calculation was correct and the rates imposed were appropriate. Skycity's arguments regarding the exclusion of the casino licence and the use of rent per square metre were not accepted, leading to the dismissal of the appeals.