Kent v Upper Hutt City Council
[2014] NZHC 1958
•20 August 2014
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2014-485-004883 [2014] NZHC 1958
UNDER the Rating Valuations Act 1998
the Rating Valuations Rules 2008
the Resource Management Act 1991
the Upper Hutt Council District Plan 2001IN THE MATTER
of general revaluations of land
BETWEEN
HARRY DALE KENT Appellant
AND
UPPER HUTT CITY COUNCIL Respondent
Hearing: 18 August 2014 Court:
Collins J
G Horsley, ValuerCounsel:
Appellant in person
N Levy for RespondentJudgment:
20 August 2014
JUDGMENT OF THE COURT
Introduction
[1] This judgment explains why we are dismissing Mr Kent’s appeal from a
judgment of the Land Valuation Tribunal (the Tribunal) dated 28 March 2014.
[2] We have reached this conclusion because, upon reviewing all of the evidence we have concluded that the Tribunal’s decision was correct and that none of the
grounds of appeal advanced by Mr Kent can be upheld.
KENT v UPPER HUTT CITY COUNCIL [2014] NZHC 1958 [20 August 2014]
[3] To explain our reasons we shall: (1) set out the background;
(2) summarise the Tribunal’s decision;
(3) summarise the grounds of appeal; and
(4) set out our reasons for dismissing the appeal.
Background
[4] Mr Kent’s family have owned a nursery business in Trentham since 1926. The nursery business is operated from a 8,422 m2 property that comprises six titles (nursery land), which are zoned “Business Commercial” under the Upper Hutt District Plan 2004 (the District Plan).
[5] This appeal relates to three of the six titles to the nursery land. The titles are Lots 40, 41 and 42. Each of those lots contains 1,012 m2. The properties were valued by the Valuer-General as at 1 September 2010. The values assigned to the lots were:
Lot 40 $280,000
Lot 41 $260,000
Lot 42 $260,000.
[6] In his written submissions Mr Kent said the three lots should be assigned the following values:
Lot 40 $142,000
Lot 41 $147,000
Lot 42 $138,000.
[7] During the course of his oral submissions Mr Kent suggested his written submissions overstated the true value of those properties by somewhere between 30 to 50 per cent.
[8] The three lots which are the subject of this appeal have frontages onto Fergusson Drive, which is a major arterial route through Trentham. The nursery land is situated approximately two kilometres south east of Upper Hutt’s main commercial area. The nursery land is surrounded by well-established residences.
[9] The valuer who inspected the properties explained in her report:
The three subject properties were once used as a commercial nursery and subsequently have various glass houses and miscellaneous buildings in various states of disrepair scattered around the sites.
Most of the structures are disused, overgrown and in [a] dilapidated condition.
[10] The nursery business has suffered financially in recent years. We need not explore the reasons for the businesses’ declining fortune. Mr Kent explained that although he had suffered serious illnesses in the past the businesses have survived, in part because Mr Kent and his family were able to establish a weekend market on the nursery land.
[11] For many years Mr Kent has been engaged in disputes with the Upper Hutt City Council (the Council) about the rateable value of the nursery land. Those disputes have led to Mr Kent and his business entities appearing in the High Court
on seven previous occasions.1
1 Kent v Valuer-General HC Wellington CP57/90, 23 August 1991; Kent v Valuer-General HC Wellington CP57/90, 27 July 1993; Valuer-General v Kent HC Wellington AP227/92, 30 August
1993; Valuer-General v Kent HC Wellington AP227/92, 18 August 1994; Kent’s Nurseries v Valuer-General HC Wellington AP370/97, 19 May 1999; Kent’s Nurseries v Upper Hutt Council HC Wellington CIV-2005-485-1958, 6 August 2007; Kent’s Nurseries v Upper Hutt Council HC Wellington CIV-2005-485-1958, 2 October 2008.
Tribunal’s decision
[12] We will explain Mr Kent’s objections to the valuations of the three lots in question when he appeared before the Tribunal because his appeal to us overlaps his case in the Tribunal.
[13] Mr Kent submitted to the Tribunal that:
(1)the three lots in issue should be valued on the same basis as the overall site;
(2)the Valuer-General inappropriately compared the three lots with other properties; and
(3) the value of the three lots should be reassessed to take account of:
(i)the likelihood that the Council would require a car park to be incorporated into any development of the nursery land;
(ii)a flooding risk associated with the contour of aspects of the nursery land; and
(iii) a different valuation methodology.
[14] The Tribunal dismissed all of Mr Kent’s concerns and concluded that the valuer who conducted the valuations approached her task in a way that fully complied with the Rating Valuations Act 1998 (the Act) and valuation principles.
[15] In its decision the Tribunal concluded Mr Kent was wrong in his contention that the nursery land should be valued as a single unit.
[16] The Tribunal took as a starting point s 5B(1) of the Act which provides that a rating unit is the land comprised in a certificate of title. There are exceptions to this. Those exceptions can be found in the Rating Valuation Rules 2008. Those rules include r 2.4.1.2 which provides:
Two or more certificates of title constitute a single rating unit where the land is owned by the same person or persons, is used jointly as a single unit, and is contiguous … and:
…
(d) the land is used as one farming operation and it is likely that the certificates of title will be alienated as only one farming operation.
[17] The Tribunal concluded Mr Kent had not demonstrated that an exception to s 5B(1) of the Act applied. Mr Kent faced a significant challenge in trying to convince the Tribunal that r 2.4.1.2(d) of the Valuation Rules applied in his case because the High Court has previously agreed with an earlier Tribunal decision that
the nursery land was not farm land.2
[18] The Tribunal ruled Mr Kent was wrong when he challenged the approach taken by the valuer when she proceeded on the basis that the three lots were zoned “Business Commercial” under the District Plan but that nevertheless regard had to be had to the overall development potential of the lots in question.
[19] The Tribunal rejected Mr Kent’s argument that the comparable sales adopted by the valuer were wrong. The Tribunal agreed with the approach taken by the valuer, who was of the opinion that “the [nursery land] has development potential for both commercial and residential use (subject to approval from Council)”. The valuer accordingly considered both commercial and residential sales when assessing the value of the three lots. The Tribunal decided the valuer’s selection of sales of comparable land was appropriate.
[20] The Tribunal concluded Mr Kent was wrong when he criticised the valuer’s approach to the impact of the requirements for car parking in any redevelopment. Mr Kent focused on his argument that the District Plan requires an eight metre set back on the front boundaries of the three lots for car parking and a three metre car parking setback on the rear and side boundaries of the lots. Mr Kent said this requirement diminished the redevelopment value of the three lots because the District Plan had no provision for dispensation in relation to the relevant car park provisions. The Tribunal concluded, however, this did not prevent the Council from
considering an application for resource consent or varying or reducing the car park requirements. The Tribunal accordingly agreed with the way the valuer dealt with the car parking requirements issues.
[21] The Tribunal rejected Mr Kent’s submission relating to the number of units per section that should be factored into the valuation equation and agreed with the approach taken by the valuer.
[22] The Tribunal dismissed Mr Kent’s arguments about the risk of flooding because of the contour of the nursery land. The Tribunal agreed with the valuer when she concluded the alleged flooding risk would not affect the value of the three lots.
[23] The Tribunal also rejected Mr Kent’s submission that an earlier High Court judgment3 was relevant. The Tribunal pointed out in its decision that the earlier High Court judgment related to legislative provisions that were repealed in 2002.
Grounds of appeal
[24] We have endeavoured to identify Mr Kent’s grounds of appeal in his wide- ranging submissions. We believe Mr Kent’s grounds of appeal can be distilled to the following points:
(1) Car park setback dispensation;
(2) Applications of the Rate Valuation Rules 2008; (3) Units per section; and
(4) Comparable values.
[25] We will examine each of these points of appeal after explaining the general approach we have taken to determining this appeal.
[26] This appeal must be considered as a rehearing.4 On hearing the appeal we may confirm, discharge or vary the order of the Tribunal or direct that the case be referred back to the Tribunal for further consideration.5
[27] As this appeal is conducted as a rehearing we have followed the approach explained by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar.6
That is to say:
(1) we have come to our own view of the merits of the case;
(2)if we had reached a different view from the Tribunal then we would have allowed the appeal;
(3)we have used the reasons of the Tribunal that we agree with to assist us in explaining our conclusions; and
(4)we have only given weight to the reasons of the Tribunal with which we agree.
Car park setback dispensation
[28] Mr Kent has restated his objection to the valuer and the Tribunal accepting that a dispensation could be obtained in relation to the eight and three metre car park requirements in the business/commercial zones of the District Plan. Mr Kent submits that the valuer and the Tribunal were wrong to proceed on the basis that the land in question could be developed in a way that could result in some form of dispensation being given to the car park setback requirements in the District Plan.
Mr Kent relies in part on Hamilton v Queenstown Lakes District Council7 to support
this aspect of his submission.
[29] In our assessment, neither the granting of a resource consent for a dispensation such as a car parking setback or the development of residential
4 Rating Valuations Act 1998, s 38(5) and Land Valuation Proceedings Act 1948, s 26(1).
5 Land Valuation Proceedings Act 1948, s 26(4).
6 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
7 Hamilton v Queenstown Lakes District PT Decision C79/94, 30 August 1994.
accommodation in a largely residential area is prohibited in the way suggested by
Mr Kent.
[30] In this case, the valuer made inquiries of the Council and was informed that a resource consent would “most likely” be granted to enable improvements to be built within part of the car park setback. Although Mr Kent rejects this evidence, in our view, the District Plan rule relating to car park setback does not prevent the Council from considering an application for resource consent or varying or reducing the setback requirements on a case by case basis. We therefore find ourselves in complete agreement with this aspect of the Tribunal’s decision when it supported the approach taken by the valuer in relation to this topic.
Application of the Rates Valuation Rules 2008
[31] Mr Kent appears to be continuing to submit that the nursery land should be valued as one lot.
[32] That approach is contrary to s 5B(1) of the Act. We also find ourselves in complete agreement with the valuer and the Tribunal when they concluded that none of the exceptions to s 5B(1) of the Act, contained in the Rates Valuation Rules 2008, apply in this case.
[33] In our assessment, we think it highly unlikely that the certificates of title for the three lots in question will be alienated as one farming operation. The nursery land is located in the middle of a very substantial residential area. In all likelihood, if the nursery land is sold, it will be to enable commercial and/or residential developments on multiple sections.
Units per section
[34] Our reasons relating to the reasonableness of the valuer and Tribunal believing a dispensation would be granted for the car park setback provisions of the District Plan apply with equal force to the number of units per section that could be developed on the lots in question.
Comparable values
[35] Mr Kent relied on an independent valuation dated 16 October 1985 that was prepared in relation to relationship property issues. The Tribunal did not agree that valuation was particularly helpful.
[36] The valuer considered the sites fronting Fergusson Drive have the advantage of a high profile location and that there was some value in the relative sizes of the lots in question.
[37] Mr Kent referred to the sale of a 1,128 m2 property in 2010 which had also been used as a nursery. That property was situated in a residential side street not far from the three lots. That property was valued at $210,000.
[38] The valuer who appeared before the Tribunal took some comfort from the value attributed to the former nursery land. She said that the square metre value of that land (186 psm) was consistent with the values she attributed to the three lots she was required to value because the other site was zoned residential and located in a side street.
[39] In our view, the approach taken by the valuer and the Tribunal when comparing values cannot be impeached. It is an approach that we agree with.
Overall assessment
[40] The approach taken by the valuer was to assess the capital value on a willing buyer/willing seller basis. The valuer arrived at a valuation through an analysis of properties which had sold in the period leading up to the date of valuation. She then adjusted that information to reflect the characteristics of the three lots.
[41] We agree in principle with the approach taken by the valuer and therefore the conclusions which she reached and which the Tribunal upheld.
Conclusion
[42] For these reasons the appeal must be dismissed.
[43] The Council is entitled to costs on a scale 2B basis.
D B Collins J
G Horsley
Solicitors:
City Solicitor, Upper Hutt City Council, Upper Hutt
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