Valuer-General v Commonwealth Custodial Services Ltd

The Valuer-General appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court concerning the valuation of land owned by Commonwealth Custodial Services Ltd. The dispute centred on the appropriate method for valuing land subject to heritage restrictions, specifically whether the valuation should assume the existence of a new building or the actual building in its existing condition.

The primary legal issue before the Court of Appeal was to determine the correct approach to valuing heritage-restricted land for the purposes of the *Valuation of Land Act 1916* (NSW). This involved considering whether the valuation should be based on the potential for a new development, or on the value of the property as it stood, with its existing heritage limitations.

The Court of Appeal, in dismissing the appeal, affirmed the principles applied by the primary judge. It was held that the valuation of heritage-restricted land should reflect the reality of the existing building and its limitations, rather than hypothetical new construction. The legal principle applied was that the unimproved capital value of land should be determined by reference to its actual condition and the restrictions imposed upon it, not by what might be built if those restrictions were removed or altered. The court found that the Valuer-General's approach, which had assumed the potential for a new building, was not consistent with the statutory framework for valuation.

Consequently, the appeal was dismissed with costs.