Valuer-General v Fivex Pty Ltd

The Valuer-General appealed to the Court of Appeal of New South Wales against a decision of the Land and Environment Court concerning the unimproved value of land owned by Fivex Pty Ltd. The dispute centred on the valuation of a property where the existing building exceeded the maximum floor space ratio permitted by the relevant local environmental plan. The Valuer-General contended that the Land and Environment Court erred in its valuation by failing to properly consider the statutory assumptions mandated by section 6A(2) of the *Valuation of Land Act 1916* (NSW).

The primary legal issue before the Court of Appeal was whether section 6A(2) of the *Valuation of Land Act 1916* required the valuer to disregard the actual floor space of the building on the subject land and instead have regard to the maximum floor space permitted by the local environmental plan when determining the unimproved value of the land. This involved an interpretation of the statutory assumption that land is valued as if it were vacant, with existing improvements being disregarded, but with regard to the "existing use" of the land. A secondary issue arose from a cross-appeal by Fivex Pty Ltd regarding the treatment of Goods and Services Tax (GST) in comparable sales, though this was confined to a question of law.

The Court of Appeal held that section 6A(2) mandates that the land be valued as if vacant, but with regard to its existing use. The court reasoned that the "existing use" refers to the actual use of the land, not a hypothetical use permitted by planning controls. Therefore, the fact that the building exceeded the maximum floor space ratio did not mean the existing use was unlawful or should be disregarded for valuation purposes. The court found that the Land and Environment Court had erred in its interpretation of section 6A(2) by failing to give proper regard to the actual use of the land as it existed. The court also determined that no error of law had been made by the primary judge in relation to the GST treatment of comparable sales, as this point had not been taken at trial.

Consequently, the Court of Appeal allowed the Valuer-General's appeal, dismissed Fivex Pty Ltd's cross-appeal, set aside the orders of the Land and Environment Court, and remitted the proceedings for redetermination in accordance with the law. The respondent, Fivex Pty Ltd, was ordered to pay the costs of the appeal and cross-appeal.