Kogarah Town Centre Pty Limited v Valuer General (No 3) [2014] NSWLEC 1124

Land and Environment Court New South Wales

Medium Neutral Citation: Kogarah Town Centre Pty Limited v Valuer General (No 3) [2014] NSWLEC 1124 Hearing dates: 18 June 2014 Decision date: 27 June 2014 Jurisdiction: Class 3 Before: Moore SC and Brown C Decision: See (95) to (99) Catchwords: VALUATION OF LAND: onus on applicant; consequences of not discharging onus; power to alter value if onus not discharged Legislation Cited: Civil Procedure Act 2005 Valuation of Land Act 1916 Cases Cited: Kogarah Town Centre Pty Limited v Valuer General [2014] NSWLEC 1085 Kogarah Town Centre Pty Limited v Valuer General (No 2) [2014] NSWLEC 1107 Category: Principal judgment Parties: Kogarah Town Centre Pty Limited (Applicant) Valuer General (Respondent) Representation: Mr R White, barrister (Applicant) Mr T Hale SC Ms M Carpenter, barrister (Respondent) Gadens Lawyers (Applicant) Crown Solicitor's Office (Respondent) File Number(s): 31133 of 2012 31134 of 2012 31135 of 2012 31136 of 2012 31137 of 2012

Judgment 1COMMISSIONERS: We have given two earlier judgments in these proceedings. The first judgment, Kogarah Town Centre Pty Limited v Valuer General [2014] NSWLEC 1085 (the primary judgment) set out our approach to and results of the undertaking of a conventional comparable sales valuation of one (Lot 1) of two allotments comprising the site of the present Kogarah Town Centre (the site). These allotments are adjacent to (Lot 1) and partially over (Lot 2) Kogarah railway station. The matters dealt with in the primary judgment are discussed in more detail below. 2The second judgment, Kogarah Town Centre Pty Limited v Valuer General (No 2) [2014] NSWLEC 1107 resolved arithmetical corrections and need not detain us in further assessment. The mathematical corrections are set out at the relevant point in the judgment but do not alter the conclusion we have reached about the appropriate statutory approach or the orders to be made as a result thereof. 3In the primary judgment, having derived an analysed value per square metre for Lot 1 (for the base date of 1 July 2009), we then determined the basis upon which the value of the second element of the site (Lot 2) should be calculated. This process, although vigorously contested between the parties on various merit elements to be taken into account in the derivation of the analysed land value for Lot 1, was, nonetheless, an unexceptional process of statutory valuation pursuant to s 6A(1) of the Valuation of Land Act 1916 (the Act), a provision in the following terms: 6A Land value (1) The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made. 4Similarly, although there was a contest between the parties on the percentage of the determined value for Lot 1 to be utilised in the derivation of an overall valuation of Lot 2, once the percentage rate had been determined by us, this process too, was unexceptional in arithmetical terms. 5Having undertaken these processes, the two values are required by the Act to be added together to give a total valuation for the site because of the effect of s 26(1) of the Act. This provision is in the following terms: 26 Where lands are to be included in one valuation (1) Where several parcels of land adjoin, are owned by the same person, and where no part is leased, they shall be included in one valuation, unless the Valuer-General otherwise directs: Provided that any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation. 6The consequence of these steps is that there is a derived analysed gross value for the whole of the site as it in common ownership. 7However, there is a further step that is mandated because the combined landholding comprising the site straddles the boundaries of two Local Government Areas, Kogarah and Rockdale. Because the Local Government boundary does not follow the allotment boundary between Lots 1 and 2 (a significant portion of Lot 2 as well as the totality of Lot 1 is the Kogarah Local Government Area), s 28 of the Act comes into play to require apportionment of the value of the whole of the site to the elements in each of the Local Government Areas. The statutory provision is in the following terms: 28 Land or stratum in two or more districts (1) If different parts of any land or stratum in respect of which one valuation would otherwise be made under this Act are situated in different districts, the value of the land or stratum is to be apportioned so as to show the value of each part. (2) The value of each part is to bear the same proportion to the value of the whole as the area of each part bears to the area of the whole. 8At this point, it is appropriate to note that the area of Lot 1 is 2958 m² and the area of Lot 2 is 4390 m². However, 1453 m² of Lot 2 is in the Kogarah Local Government Area. This results in the total area of the site that is within the Kogarah Local Government Area being 4421 m² whilst that which is in the Rockdale Local Government Area is 2927 m². 9The result of this is that the proportion of the site that is in the Kogarah Local Government Area is 60.13% whilst that which is in the Rockdale Local Government Area is 39.87%. These proportions have considerable significance in the finalisation of orders of the Court, to be made in our capacity as judicial valuers, to set the statutory land value for the elements of the site within each of the Kogarah and Rockdale Local Government Areas for the 1 July base dates in each of the years 2007 through to 2011. 10The proportions of the site in each of the Local Government Areas are given the title of a Property Identification Descriptor (PID) as the elements do not comprise, as earlier described, the totality of a single formally acknowledged allotment of land. The portion in Kogarah has the PID 1502216 whilst that in Rockdale has the PID 1536207. 11The s 28 process results in a value being derived for each PID - with the Kogarah PID value to be conveyed to Kogarah Council and that of the Rockdale PID value as and when required by s 48(2)(b) of the Act. Both PID values would conveyed annually to the Chief Commissioner of State Revenue as required by s 48(2)(a) of the Act. 12To understand that which follows, it is first necessary to consider the statutory values for each PID set by the Valuer General and conveyed to the owner of the site by the Office of State Revenue in Land Tax Assessment notices for each of the PIDs for each of the base date years between 2007 and 2011. Those statutory valuations and the resultant total statutory valuation for the whole site are set out in the following table: Base date year Total - $ PID 1502216 - $ PID 1536207 - $ 2007 5,400,000 3,850,000 1,550,000 2008 5,600,000 4,000,000 1,600,000 2009 5,600,000 4,000,000 1,600,000 2010 5,600,000 4,000,000 1,600,000 2011 5,600,000 4,000,000 1,600,000