Robinson v Whangarei District Council
[2018] NZHC 182
•19 February 2018
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI TERENGA PARĀOA ROHE
CIV-2017-488-000094 [2018] NZHC 182
IN THE MATTER of an appeal against decision of Land
Valuation Tribunal
BETWEEN
JOHN CLIFFORD WALTER ROBINSON Appellant
AND
WHANGAREI DISTRICT COUNCIL Respondent
Hearing: 7 February 2018 Appearances:
Appellant in person
G J Mathias for RespondentJudgment:
19 February 2018
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 19 February 2018 at 4.00pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Thomson Wilson, Whangarei
Copy to:
Mr J C W Robinson
ROBINSON v WHANGAREI DISTRICT COUNCIL [2018] NZHC 182 [19 February 2018]
Introduction
[1] The appellant, Mr Robinson, appeals a decision of the Land Valuation Tribunal sitting in Whangarei,1 which, for the purposes of a rating roll revaluation, fixed the value of a property at 2412 Whangarei Heads Road, Whangarei, as at 1 September
2015 as follows:
(a) Capital value $760,000 (b) Land value $370,000 (c) Value of improvements $390,000
[2] Mr Robinson has accepted the value attributed to the improvements on the property by the Tribunal, but he still challenges the land value. He argues that the Tribunal erred in law, by using what he refers to as an “arranged sale price” in setting the market value of the property. He says that the value should have been fixed by reference to a “willing buyer/willing seller” transaction which occurred following an auction of the property in November 2014.
[3] In his notice of appeal, he maintained that the land value should be fixed at
$230,000. On appeal, he asserted that the land value should be fixed at somewhere between $250,000 and $265,000.
Background
[4] Every territorial authority is required to prepare and maintain a district valuation roll for its district,2 and each territorial authority must revise its district valuation roll at intervals of not more than three years by revaluing every rating unit within its district to ensure that the roll represents values current as at the date of the
revaluation.3
1 Robinson v Whangarei District Council [2017] NZLVT 10.
2 Rating Valuations Act 1998, s 7(1).
3 Section 9(1).
[5] The respondent, the Whangarei District Council, had previously valued all rating units in its district in 2012. Although the 2012 valuation was not produced, it was asserted by Mr Robinson in the course of the appeal hearing, and not disputed by the Council, that the land value then attributed to the subject property was $265,000.
[6] The Council undertook a revaluation as at 1 September 2015. The necessary work to revalue the property was undertaken by Mr Ujdur, who is not a registered valuer. The property was revalued as follows:
(a) Capital value $580,000 (b) Land value $370,000 (c) Value of improvements $210,000
The revaluation was signed off by a registered valuer and sent to the owner of the property – Mr Gilbert – in late 2015.
[7] Mr Gilbert lodged an objection to the revaluation.4
[8] The Council referred the objection for review.5 The review was undertaken by Quotable Value Limited. It seems that Mr Ujdur may have been involved in the review as well.6 The property was re-inspected and the market evidence available as at the date of the revaluation – 1 September 2015 – was considered. Quotable Value concluded that the value of the property as at 1 September 2015 was as follows:
(a) Capital value $760,000
(b) Land value $370,000
(c) Value of improvements $390,000
4 Rating Valuations Act, s 32(1).
5 Section 34(1).
6 Robinson v Whangarei District Council, above n 1, at [16].
A letter was sent to Mr Gilbert by Quotable Value on 13 May 2016 advising him of the review valuation. The letter did not, however, purport to be a review valuation by a registered valuer.
[9] There is no evidence either that the review valuation was accepted by the Council, or that it declined to alter its revaluation.7 The Tribunal noted that the Council did not determine what action it would take and that it did not give written notice of such decision (if any) as it made to Mr Gilbert as required by the Act.8
[10] In any event, on receipt of the letter of 13 May 2016, Mr Gilbert required that the objection be considered by the Tribunal.9 As a result, the matter came before the Land Valuation Tribunal on 24 July 2017, and its decision was issued on 1 August
2017.
Mr Robinson’s role
[11] As noted, the owner of the property at all relevant times was Mr Gilbert. The property was formerly owned by a family trust in which Mr Robinson has an interest. The Tribunal accepted that Mr Robinson has Mr Gilbert’s authority to advance the objection, and noted that Mr Robinson asserts that he retains an equitable interest in the property.10 There was no challenge to the Tribunal’s findings in this regard.
The Tribunal’s decision
[12] The Tribunal was satisfied that the general revaluation undertaken by the Council took place in accordance with the Valuer-General’s requirements, and that a registered valuer signed the revaluation which was notified to Mr Gilbert.11
Nevertheless, the Tribunal noted that the Rating Valuations Act 1998 had not been complied with in various respects. For example, it noted that Mr Ujdur is not a registered valuer and that the relevant statutory provisions require that all valuation
services be carried out by a registered valuer.12 It also noted that the letter dated 13
7 Section 34(4) and (5).
8 Section 35(1); Robinson v Whangarei District Council, above n 1, at [18].
9 Section 36.
10 Robinson v Whangarei District Council, above n 1, at [13].
May 2016 sent to Mr Gilbert by Quotable Value did not purport to be either a review valuation by a registered valuer or notice by the Council under s 35(1)(a), but that it did set out Mr Gilbert’s right to a hearing before the Tribunal as required by s
35(1)(b).13
[13] The Tribunal then outlined its role – namely to value the land. The Tribunal considered that the onus was on the objector to establish a basis to change the revaluation, and that this onus remained on the objector throughout.14 This did not mean, however, that the Council had no duty either to establish the rating value of the property, or that it had undertaken the review in terms of the Act. It noted that Mr Ujdur was not a registered valuer, and that the primary witness called by Mr Robinson, Mr Sworn, was a registered valuer, but that he did not value the land as at 1 September
2015.15 In such circumstances, the Tribunal considered that it had to value the land
itself, taking into account that it was for the objector to establish on the balance of probabilities that the revaluation should be changed.16
[14] The Tribunal concluded that the development potential of the property was very much secondary to its proximity to water and the views it affords.17 It recorded that, while much was made of limitations on the property by Mr Robinson, it remained unconvinced in this regard.18 It noted that the property had sold twice on 10 November
2014 – first at auction for $520,000, and then, later on the same day, for $720,000 to Mr Gilbert.19 It noted Mr Robinson’s assertion that the Tribunal should ignore the second sale and rely only the first.20 It recorded, however, that both sales were reported and treated as being “arms-length” transactions by the Council.21 The Tribunal was unsure of the arrangements that were then in place, and it noted Mr Robinson’s continuing interest in the property.22 It did not consider that it should take
into account only the sale at $520,000, and that the sale at $720,000 was more
13 At [18].
14 At [29].
15 At [30]-[31].
consistent with other sales reported over the same period.23 It noted that both Mr Ujdur and Mr Sworn accepted that there had been a lift in property values between November
2014 and September 2015, and that other properties in the general vicinity had sold at improved prices.24 It referred to some of these sales, but declined to adopt a per square metre approach.25 It concluded that analysis and adjustment to comparable sales was more effective in establishing the valuation of the land in the circumstances of this case.26
[15] It referred to the sale of a property at 2571 Whangarei Heads Road, which sold for $320,000 in November 2014.27 This property also had an unimproved sale value of $265,000 in the earlier 2012 rating roll valuation. It noted the competing evidence as to whether or not this property was comparable to the subject property.28 The Tribunal noted Mr Robinson’s assertion that unimproved land values had not risen between 2012 and 2015.29 It considered that this argument ignored changes that had occurred in the marketplace, and in particular the increased demand for coastal holiday homes in and around Whangarei.30 It also noted Mr Sworn’s evidence that the relevant market had continued to strengthen throughout 2015.31
[16] The Tribunal relied on this evidence, reinforced by Mr Ujdur’s evidence of other land sales. It accepted that this evidence was factually correct.32 It considered that proximity to water, or to reserves which give access to water, made properties such as the subject property more desirable than others.33 It was also satisfied that properties within residential enclaves had increased in value more than other properties not in such enclaves.34 It considered that these factors were particularly relevant to the subject property which enjoys a relatively private aspect to a small
beach, accessible through an adjacent reserve.35
23 At [39]-[40].
24 At [41]-[42].
25 At [43]-[44].
[17] The Tribunal considered that the value of the property had increased from 2012 to 2015. It did not, however, accept Mr Ujdur’s view that the land value was $420,000 when the original revaluation, signed by a registered valuer, was $370,000.36 Nor did it accept Mr Robinson’s proposition that the land value was $250,000 or $265,000.37
The Tribunal noted that there had been no evidence advanced by Mr Robinson to show that the values had remained unchanged over the period 2012 to 2015.38 It concluded that Mr Robinson’s attempt to tie the 2012 and 2015 revaluations was “selective and inappropriate”.39
[18] The Tribunal accepted that the market for the subject property had changed more than that for other sites that did not have direct access to water and/or privacy and amenity features.40 It concluded that the property at 2571 Whangarei Heads Road was not the most appropriate comparator for valuation purposes, and it referred to two other sites which it considered had more in common with the subject site.41 It referred to the sale to Mr Gilbert in November 2014, and noted that it indicated a land value in the vicinity of $340,000 to $360,000.42 It referred to other sales in the area and determined that a revaluation in the order of $350,000 to $370,000 for the land was appropriate as at 1 September 2015.43
[19] The Tribunal then returned to the burden of proof.44 It considered that Mr Robinson had to establish that the revaluation of $370,000 as originally notified was incorrect.45 The Tribunal had its doubts as to the review valuation, but nevertheless noted that it too established an unimproved land value of $370,000.46 It could see no proper basis to deviate from the original revaluation. It noted that it might be “slightly at the higher end”, but considered that it was within the range of appropriate outcomes
based upon the available sales evidence.47 It noted that a land value of $370,000 would
36 At [50].
37 At [51].
give a capital value for the property of $760,000, which it considered was “certainly consistent with other properties in the area which have sold”.48
[20] Accordingly, the Tribunal fixed the values as set out above, and directed the
Whangarei District Council to alter its valuation roll accordingly.49
Submissions
[21] Mr Robinson’s submissions focussed on three alleged errors, namely:
(a) that Mr Sworn is a registered valuer, and that therefore his evidence should have been preferred by the Tribunal to that of Mr Ujdur;
(b)that no sufficient consideration was given to the sale at auction of the property in November 2014; and
(c) that the Tribunal’s assessment of the evidence was erroneous.
[22] Mr Mathias, appearing for the Council, argued that the onus of proof before the Tribunal lay on Mr Robinson, and that Mr Robinson had produced no evidence sufficient to overturn the initial revaluation. He also argued that the Tribunal undertook its task in a fully reasoned matter and that he relied on and adopted the reasoning and determination of the Tribunal.
Approach to appeal
[23] The appeal is brought under the Land Valuation Proceedings Act 1948. It proceeds by way of a rehearing.50 It follows that the approach discussed by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar is applicable.51 That approach is summarised in the observations of the Chief Justice as follows:
[16] Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate
court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.
(Citations omitted)
[24] If this appeal is allowed, the Court can confirm, discharge or vary the order of the Tribunal, or direct that the matter be referred back to the Tribunal for further consideration as it thinks fit.52 Generally, the Court can make such order as it considers just and equitable in the circumstances of the case.53
Analysis
[25] The onus of proof on the objection lay on Mr Gilbert as the objector. The initial revaluation signed by a registered valuer in the name of the Valuer-General was presumptively correct. Mr Gilbert – both before the Tribunal, and before this Court on appeal – had the affirmative burden. It was not enough for Mr Gilbert – through Mr Robinson – to show that the scales were even at the end of the hearing. He had to show that the Valuer-General was wrong.54
[26] While there were shortcomings by the Council, the notice of revaluation sent to Mr Gilbert in late 2015 was signed by a registered valuer on behalf of the Valuer- General. That revaluation was presumptively correct.
[27] Mr Robinson was critical of the Council’s reliance on the evidence of Mr Ujdur. I do not, however, consider that the fact that Mr Ujdur was not a registered valuer is critical. Mr Ujdur was involved in the revaluation exercise, but he did not sign the initial revaluation. Further, if there was then a concern as to the validity of the initial revaluation, it should have been raised by way of an application for judicial review. Mr Gilbert/Mr Robinson did not take that step. Rather, Mr Gilbert objected to the initial revaluation, and then to the review valuation. As a result, the matter came
before the Tribunal. It properly confined its enquiry. It only sought to value the land.
52 Land Valuation Proceedings Act, s 26(4).
It did not purport to make an order that the revaluation undertaken by the Council was invalid or a nullity. It did not err in this regard.55
[28] In any event, even if there were deficiencies in the process followed in the initial revaluation, there was a hearing de novo before the Tribunal, and that hearing was sufficient to cure any deficiencies which occurred in the initial revaluation process.56
[29] In my view, there was no merit in Mr Robinson’s argument that the land value of the property had to be fixed at $250,000 to $265,000 because the wrong process had been followed by the Council.
[30] Nor was there anything in Mr Robinson’s argument that the Tribunal had to prefer Mr Sworn’s evidence because he was the only registered valuer to give evidence before it.
[31] The Rating Valuation Act does provide that all valuation services required under the Act must be carried out by a registered valuer, or by some other person or body of a class approved for the purpose of rules made under the Act.57
[32] It was common ground that Mr Ujdur was not a registered valuer, and there was no evidence before the Tribunal, or before me on appeal, that Mr Ujdur had been approved for the purpose by rules made under the Act. I accept Mr Robinson’s argument that Mr Sworn was the only registered valuer to give evidence before the Tribunal. That does not, however, compel the conclusion that Mr Sworn’s evidence had to be adopted.
[33] The Tribunal comprised a District Court Judge – Judge Smith – and a
Commissioner, Mr Malone, who is a registered valuer.
55 Telecom New Zealand Ltd v Christchurch City Council CA25/04, 7 March 2005 at [39], [50], [54]- [57].
56 See Telecom New Zealand Ltd v Christchurch City Council, above n 55, at [59].
[34] There is a further difficulty with Mr Robinson’s argument that Mr Sworn’s evidence must prevail. Mr Sworn did not value the property as at 1 September 2015. His evidence expressly recorded that he had been asked by Mr Robinson to make comment on general movements in the property market in the Whangarei Heads locality, but he had not been instructed to provide a market value of the subject property as at 1 September 2015. Mr Sworn did produce in evidence a valuation he undertook of the property at 2410 Whangarei Heads Road as at 21 July 2016. He valued that property at $1,100,000. In this valuation, and in his evidence-in-chief, Mr Sworn accepted that there had been an increased number of sales over the five-year period ending in 2016, and that the median sale price of property in the Whangarei Heads locality had increased steadily in the years ended April 2014, 2015 and 2016.
[35] The Tribunal did not dismiss Mr Sworn’s evidence. Rather, it correctly recorded that he had not given any evidence as to the value of the property at the relevant date. It did adopt his evidence that there had been a lift in land value in the period leading up to September 2015.
[36] Nor did the Tribunal rely on Mr Ujdur’s valuation evidence. It declined to fix the value of the land at the figure suggested by Mr Ujdur in evidence – namely
$420,000. It did accept the evidence Mr Ujdur presented of comparable sales, which it considered was factually correct. It also had similar evidence on this topic from Mr Robinson and from Mr Sworn.
[37] Mr Robinson argued that the Tribunal gave insufficient consideration to the sales of the property in November 2014.
[38] That assertion is incorrect. The Tribunal considered both the sale at auction and the on-sale by the successful bidder to Mr Gilbert.
[39] Before me, Mr Robinson made various assertions as to the nature of those sales. He asserted that the second sale to Mr Gilbert was not a normal arm’s length transaction, but rather an arranged sale between Mr Gilbert and the successful bidder.
[40] The difficulty from Mr Robinson’s perspective is that there is no evidence to support his contention. The only relevant evidence was that given by Mr Robinson when he was cross-examined by counsel for the Council. He was asked whether he accepted that both sales in November 2014 were normal arm’s length transactions. His answer was as follows:
No, not at all. I – in fact, the first sale is the one I was aware of, the second sale is something that [the successful bidder] arranged with [Mr Gilbert].
He accepted that the first sale at auction was a forced sale, which his family trust was required to undertake following demands from its bankers. He said that the second sale was not an arm’s length sale, but that it was “an arranged sale”. He did, however, acknowledge that he could not guarantee this, and that he had no evidence to confirm it.
[41] There was no application to call further evidence before me in relation to this issue, and I cannot conclude, on the basis of the very limited material available, that the sale to Mr Gilbert was not a bona fide, arm’s length transaction.
[42] In any event, the Tribunal did not determine the matter solely by reference to the two sales of the subject property which occurred in November 2014. Rather, it referred to a number of other sales of land in the general vicinity, which occurred at or about the relevant time. It undertook a careful consideration of those sales to determine whether they were truly comparable. Mr Robinson was not able to point to anything which suggests that the Tribunal erred in its consideration of these comparable sales.
[43] There is nothing to support Mr Robinson’s bald assertion that the Tribunal erred in its assessment of the evidence. The Tribunal was required to consider the evidence produced and make an informed judgment in light of that evidence.58 Here, the Tribunal proceeded correctly. It considered all relevant evidence put before it, including evidence of the two sales of the subject property in November 2014, and evidence of other comparable sales. It made an informed decision as to the value of
the property, in light of the evidence before it. Importantly, it had before it the initial
58 Te Whaiti Nui A Toi Trust v Whakatane District Council [2011] NZAR 286 (HC) at [41].
revaluation, fixing the land value at $370,000, and it correctly noted that there was no evidence produced by Mr Robinson which established a different value of the subject land at the relevant date. The Tribunal correctly concluded that Mr Robinson had failed to discharge the evidential onus which rested on him.
[44] There was no error by the Tribunal, either in the way in which it approached the matter, or in the conclusions it reached. The appeal is dismissed.
Costs
[45] The Council is entitled to its reasonable costs and disbursements. It is my preliminary view that costs should be fixed on a 2B basis. If the parties accept that, then calculation should be a relatively simple task. If there is any disagreement, then I direct as follows:
(a) any memorandum from the Council as to costs/disbursements is to be filed and served within 15 working days of this judgment;
(b)any response from Mr Robinson is to be filed within a further 15 working days;
(c) memoranda are not to exceed five pages in length.
I will then deal with the issue of costs and disbursements on the papers, unless I require the assistance of the parties.
Wylie J
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