Land and Environment Court of New South Wales CITATION : Valuer-General v P & N Group Holdings Pty Ltd [2010] NSWLEC 209 APPLICANT Valuer-General PARTIES : RESPONDENT P & N Group Holdings Pty Ltd FILE NUMBER(S) : 30493 of 2010 CORAM: Craig J KEY ISSUES: APPEAL :- s 56A appeal - determination of land value under Valuation of Land Act, 1916 - failure to consider and include value of land improvements in the land value determined - issue raised but not considered by Commissioner - error of law in determining land value - respondent consented to appeal being allowed - land value substituted by consent LEGISLATION CITED: Land and Environment Court Act 1979, s 56A Valuation of Land Act 1916, ss 4, 6A, 37 DATES OF HEARING: 14 September 2010 EX TEMPORE JUDGMENT DATE : 14 September 2010 APPLICANT G B Newport (barrister) SOLICITORS Crown Solicitor's Office LEGAL REPRESENTATIVES: RESPONDENT M D Seymour (barrister) SOLICITORS Quay Legal Group JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES CRAIG J 14 September 2010 30493 of 2010 VALUER-GENERAL v P & N GROUP HOLDINGS PTY LTD EX TEMPORE JUDGMENT 1 HIS HONOUR: On 28 May 2010, a Commissioner of this Court determined the land value of land known as 36-38 Victoria Street, Burwood to be the sum of $1,530,000. That determination was made when deciding an appeal brought to the Court pursuant to s 37 of the Valuation of Land Act 1916. It was an appeal against the determination by the Valuer-General of the land value of that land. 2 The Valuer-General now appeals pursuant to s 56A of the Land and Environment Court Act 1979, asserting that the decision of the Commissioner is attended by legal error. The error which is alleged is singular. It is that when determining land value in accordance with s 6A of the Valuation of Land Act, the Commissioner failed to allow for the value of "land improvements" as he was required to do in accordance with that section. 3 The respondent to this appeal, being the applicant before the Commissioner, accepts that in making the determination which he did, the Commissioner erred in law in the manner suggested by the Valuer-General. I have read the Commissioner's judgment and I am satisfied that there was such an error. 4 The error arose in this way. The Commissioner sought to determine land value by analysing comparable sales. The sales upon which he relied were of improved land. Those improvements included buildings with basement car parking. The improvements upon the subject land comprised a building containing basement car parking. 5 When analysing those sales, the value of improvements, including those which made provision for basement car parking, was deducted and the deduced value applied in order to determine the land value of the subject land. However, the Commissioner failed to account for the fact that the excavation to provide for basement car parking on the subject land was itself "land improvement". That expression is defined in s 4 of the Valuation of Land Act to mean, amongst other things, an excavation of land that is associated with the erection of any building or structure. Thus, the value (if any) of the excavation to the land being valued was required to be added to the "raw" value deduced from the analysis of comparable sales (s 6A(1)). 6 In his judgment, the Commissioner acknowledged at [16] that the parties were at issue as to whether the excavation on the subject land comprised an improvement to be ignored or was a "land improvement", the value of which was required to be considered as a component of land value. Having identified the issue between the parties, he failed in his reasons to address it. Moreover, the reasons for judgment do not address the distinction between the improvements on the subject land necessary to be ignored when analysing comparable sales of improved land and the value of land improvements required to be taken into account. 7 There was no issue between the parties before the Commissioner as to the value assigned by the Valuer-General to land improvements. Failure on the part of the Commissioner to apply the statutory provision (s 6A(1)) to facts that were not in contest demonstrates an error of law in the determination which the Commissioner made. 8 It is accepted by the present respondent that the sum given in evidence before the Commissioner, namely the sum of $246,000, is the appropriate figure to be assigned to the value of land improvements. The parties accept that, putting aside the value of land improvements, a determination of land value otherwise in the sum $1,530,000 is appropriate. When the agreed value of land improvements in the sum of $246,000 is added to the value determined by the Commissioner, both parties accept that the appropriate determination for the purpose of s 6A is the sum of $1,776,000. The parties have asked that I allow the appeal and that I substitute that sum as being the land value of the subject land at the relevant base date. 9 Subsection (2) of s 56A of the Land and Environment Court Act identifies the powers of the Court on the hearing of an appeal of this kind. The alternatives provided by the subsection, separated by the disjunctive "or", are that the Court may remit the matter to the Commissioner for determination in accordance with the decision of the Court, or may "make such other order in relation to the appeal as seems fit." The parties are agreed, both as to the setting aside of the Commissioner's decision and also as to the proper amount that should be determined as being the land value. It seems to me, conformably with subsection (2)(b) of s 56A, that I have power to make the orders which the parties agree should be made. 10 Accordingly, the orders that I make are as follows. 1. The appeal is upheld. 2. The decision the Commissioner made on 28 May 2010 is set aside. 3. Land value for the property known as 36-38 Victoria Street, Burwood as at the base date of 1 July 2007, is the sum of $1,776,000. 4. No order as to costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.