Valuation of Land Act 1971 ss 11, 12, 22A, 25B, 25C

Ardoch v Valuer-General (No 2) [2006] SASC 217

Bargwanna Pty Ltd & Anor v Valuer-General for the State of South Australia [2011] SASC 67

Bosnakis & Anor v Valuer-General [2017] SASC 158

CSR Limited v Valuer-General (1977) 17 SASR 446

Fenton Nominees v Valuer-General [1982] HCA 46; (1982) 150 CLR 160

Minister for Environment v Florence (1979) 21 SASR 108

Richter v Chief Executive, Department of Natural Resources (1998) 19 QLCR 274

Mr C Bosnakis and Mrs H Bosnakis representing the applicants in person

Mr A Bullock, instructed by Cowell Clarke, representing the respondent

This is an edited version of the Tribunal's decision pursuant to s 60 of the South Australian Civil and Administrative Tribunal Act 2013. Details which may identify the subject properties have been de-identified in accordance with the Tribunal's anonymisation policy. These changes do not affect the Tribunal's decision or its reasons for decision.

Made under the South Australian Civil and Administrative Tribunal Act 2013 s 37(1)(a)

1. This decision entails review of three administrative decisions made by the Valuer-General. Each relates to a property either owned by the applicant, Mr Chris Bosnakis, or owned by a company that Mr Bosnakis is representing.
2. Each administrative decision is the subject of a separate proceeding in the Tribunal but in the preliminary stages it was determined that the proceedings be heard together because of the common parties, and the overlap of fact and legal principle.
3. Each of the decisions assigns capital and site values to a property owned or controlled by the applicant, for the purposes of rating. Mr Bosnakis considers that the values are wrong; they are too high, and lower values should be substituted.
4. Each of the parties relied on expert evidence as to the valuation process and the proceedings are largely limited to the question of whether the Valuer-General's values for the three properties were correct or preferable.

1. The Valuer-General is a statutory office established under the Valuation of Land Act 1971 (the Act). The Valuer-General has the function of making general valuations of land within the state and in so doing must determine the annual value, the capital value, the site value and the unimproved value of land insofar as those values are required for imposing rates, taxes and imposts.[1]
2. The Valuer-General conducts general valuations with respect to all land in the State on an annual basis pursuant to ss 11 and 12 of the Act. A value is assigned as at a date determined by the Valuer-General.
3. These proceedings concern the capital values and site values of three properties owned by the applicant.
4. Under the Act, the capital value of land means

... the capital amount that an unencumbered estate of fee simple in the land might reasonably be expected to realise upon sale, but if the value of the land has been enhanced by trees planted on the land (other than commercial plantations), or trees preserved on the land for the purpose of shelter or ornament, the capital value must be determined as if the value of the land had not been so enhanced.

... the capital amount that an unencumbered estate in fee simple in the land might reasonably be expected to realise upon sale assuming that any improvements on the land, the benefit of which is unexhausted at the time of valuation, had not been made; for the purposes of this definition-

(a) Improvements means -

1. (i) buildings and structure (but not including structures in the nature of site works); and
2. Wells, dams and reservoirs; and

1. All land that is subject to general valuation must be valued with annual value, capital value, site value and unimproved value so far as those values are required for levying or imposing any rate, tax or impost.
2. A person who is dissatisfied with a valuation may object to it.[2] After consideration of the objection, the Valuer-General may allow or disallow the objection.[3] If a person remains dissatisfied, they may seek a review by a valuer under s 25B of the Act. The valuer to whom the task of reviewing the value is assigned is one who has been appointed by the Governor as a member of a panel of valuers to perform the task of conducting review valuations. The members of the panel are not employees of the Valuer-General. They may not determine questions of law.[4] On a review, the panel reviewer may increase or reduce the valuation under review.
3. If a person remains dissatisfied with a valuation after a valuation review, they may seek a review by the Tribunal.[5] Section 25C(3) of the Act provides:

For the purposes of the South Australian Civil and Administrative Tribunal Act 2013 -

(a) an application for a review by SACAT must be made within 21 days after the applicant receives notice of the relevant decision (unless SACAT, in its discretion, allows an extension of time for making the application); and

(b) a review under this section will be taken to come within SACAT's review jurisdiction but, in the exercise of this jurisdiction, SACAT will consider the matter de novo (adopting such processes and procedures, and considering and receiving such evidence or material, as it thinks fit for the purposes of the proceedings); and

(c) without limitation, a variation made by SACAT on the review of a valuation may consist of an increase or decrease in the valuation.

1. Subject to the modification to the review procedure described above, the task of the Tribunal is to exercise its review jurisdiction as set out in s 34 of the South Australian Civil and Administrative Tribunal Act 2013 which describes the Tribunal's review jurisdiction. In particular, the task of the Tribunal is to determine the correct or preferable decision as to the values of the three properties and then affirm, vary or set aside and substitute, or set aside and remit the decision to the original decision-maker.

1. The valuations that are the subject of these proceedings were each valuations as at 1 January 2022.
2. In respect of each of the three properties, the Valuer-General assigned values and then disallowed the applicant's subsequent objections in relation to each of them.
3. The applicant sought review valuations. The review valuation was performed by an independent valuer. In respect of one of the three properties, the new valuations were reduced. In respect of the other two valuations, the Valuer-General's valuations were confirmed. These were "desk top" valuations.
4. The applicant pursued his right to challenge the valuations to this Tribunal. On the review to SACAT, the Valuer-General engaged an independent valuer, Ms Rachael Elliott. She provided valuations for each of the three properties after inspecting them. The Valuer-General adopts, for the purpose of the Tribunal's review, the valuations arrived at by Ms Elliott and seeks to have the Tribunal vary the original valuations as necessary to make those orders.
5. The applicant engaged an independent valuer, Ms Tracey Loftes, who also provided valuations for each of the three properties after inspecting them. The applicant seeks to have the original valuations varied to reflect Ms Loftes' valuations.
6. There was no dispute between the parties as to the meaning of 'capital value' or 'site value' and there was no dispute as to what constituted improvements on the subject land.
7. It is useful to set out a brief overview of the dispute in respect of the three properties before considering the parties' contentions in more detail.

1. This is the applicant's residential property. He lives there with his wife.
2. Initially, the Valuer-General assigned a Notional Site Value of $550,000 and a Notional Capital of $870,000.[6] The significance of the valuations being "notional" is discussed further later in this decision.
3. The Valuer-General reviewed those valuations following an objection by the applicant and on 28 November 2022 and revised the Notional Site Value to $470,000 and the Notional Capital Value to $800,000.[7] That is, she reduced their assigned values, which went some way to meet the applicant's objection.
4. The Valuer-General engaged Ms Elliott of Land Services SA to provide an expert's report for the purposes of the proceedings and adopts the conclusions and values set out in that report.
5. The applicant engaged Ms Loftes of Adelaide Independent Property Valuers to provide an expert's report for the purposes of the proceedings and adopts the conclusions and values set out in her report.
6. In accordance with the experts' opinions, for the purposes of the proceedings, the Valuer-General maintains that the Site Value of this property was, at 1 January 2022, $420,000, whereas the applicant maintains that it was, at that date, $310,000.
7. The Valuer-General maintains, for the purposes of these proceedings, that the capital value of this property was, at 1 January 2022, $800,000, whereas the applicant maintains that it was, at that date, $425,000.

1. The first property at Burnside is a parcel of land with an unoccupied dwelling on it. The registered proprietor is IMY PTY LTD, the second applicant, controlled by the first applicant.[8] The property is 913 m2 in size.
2. Initially, the Valuer-General assigned to this property a Site Value and a Capital Value of $750,000.
3. The Valuer-General reviewed those valuations following objections by the applicant but confirmed the valuations.[9]
4. The Valuer-General engaged Ms Elliott of Land Services SA to provide an expert's report for the purposes of the proceedings and adopts the conclusions and values set out in that report.
5. The applicant engaged Ms Loftes of Adelaide Independent Property Valuers to provide an expert's report for the purposes of the proceedings and adopts the conclusions and values set out in her report.
6. Both valuers considered that the dwelling was in such a poor state that it did not increase the value of the property. Both valuers assigned capital values that that are the same as the site values.
7. Accordingly, for the purpose of these proceedings, the Valuer-General maintains that the Site Value and the Capital Value of this property were, at 1 January 2022, $750,000.
8. For the purposes of these proceedings, the applicant maintains that the Site Value and the Capital Value of this property were, at 1 January 2022, $490,000.

1. The second property at Burnside is a property with an unoccupied dwelling on it, adjacent the first Burnside property. It is slightly larger than the first Burnside property, being 951 m2. The registered proprietor is WNJ PTY LTD, the third applicant, controlled by the first applicant.[10]
2. Initially, the Valuer-General valued the Site Value and the Capital Value both at $750,000.
3. The Valuer-General reviewed those valuation following objections by the applicant but confirmed the valuations.[11]
4. The Valuer-General engaged Ms Elliott of Land Services SA to provide an expert's report for the purposes of the proceedings and adopts the conclusions and values set out in that report.
5. Both valuers considered that the dwelling was in such a poor state that it did not increase the value of the property. Both valuers assigned capital values that that are the same as the site values.
6. Accordingly for the purposes of these proceedings, the Valuer-General maintains that the Site Value and the Capital Value of this property were, at 1 January 2022, $780,000.
7. The first applicant maintains that the Site Value and the Capital Value of this property were, at 1 January 2022, $465,000.

1. The Tribunal's task on review is to consider the decisions on review and determine whether they were correct or preferable. In so doing, the Tribunal may receive fresh evidence and in these proceedings, the Tribunal received expert reports created after the original decisions, and further documents submitted by the parties.
2. By way of outcome, the Tribunal may affirm, vary or set aside the original decisions. If it sets them aside, it may substitute its own decisions.
3. The Tribunal conducted a number of preliminary hearings in the proceedings and the parties made written and oral submissions.
4. At the oral hearing, Mr Bosnakis appeared on his own behalf, assisted by his wife. The Valuer-General was represented by Mr Bullock of counsel. The hearing was conducted over two days. Mr Bosnakis made submissions and gave evidence, in combination, from the bar table. He called his witness, Ms Loftes, and she was examined and cross-examined on her report concerning the Valley View property. Ms Elliott was then interposed by the respondent to be examined and cross-examined on that property. The following day, Ms Loftes was called again to give evidence on the two Burnside properties. She was examined and cross-examined. Ms Elliott was then called by the respondent to give her evidence on those properties.
5. At the end of the hearing on the second day, the parties were granted a limited permission to make closing submissions in writing. They were advised that the evidence was closed and I reserved my decision subject to the receipt of closing submissions. Mr Bosnakis nevertheless provided further evidence and sought further time to gather and file further evidence. I reviewed the further evidence only to enable me to assess that it should not be received, being material that could have been obtained prior to the hearing and not determinative of any material issue before the Tribunal. I set it aside.

1. The dispute turns on the reasoning and conclusions of the parties' respective expert witnesses. Although the applicant's expert gave her oral evidence first, it is convenient in these reasons to address the Valuer-General's expert's evidence first in this decision. This is because Ms Elliott wrote her reports before Ms Loftes wrote hers, and Ms Loftes had Ms Elliott's reports, and the applicant's criticisms of them, when she prepared her reports. There is nothing wrong with this, but it explains why Ms Elliott did not address Ms Loftes' approach in her reports and first had the opportunity to respond when she was called to give oral evidence at the hearing.
2. Ms Elliott, engaged by the Valuer-General, is a certified practising valuer and a Fellow of the Australian Property Institute. Since mid-2022, she has been the chief valuer for the company Land Services SA. That company is the exclusive provider of valuation services to the Valuer-General. Prior to that, she was the director of a company that provided valuation services to Government and the private sector, and previously held a number of roles as a valuer for a variety of South Australian firms.
3. Ms Loftes, engaged by the applicant, is a certified practising valuer. She worked at a valuation firm for five years after graduation, and then formed her own valuation business which employed other valuers. She also holds a qualification in building surveying.
4. The experts provided comprehensive reports on each of the properties and gave oral evidence, on a property-by-property basis.
5. The approach taken in the hearing was to consider the properties separately, and that will be adopted in this decision.

1. The registered proprietors of this property are Chris and Helen Bosnakis.[12] They reside at the property.
2. The size of the site is 3,958 m2, which is large for a suburban residential property. It has two frontages: one which is 86.86 metres in length, and one of 82.29 metres in length. The property is comprised of three contiguous allotments over three certificates of title, with a two-storey house on one of the allotments. Each of the three allotments is between 1,200 and 1,500 m2 in size. It has mains electricity and gas, mains water, sewer and NBN services. The zoning for the area under the Planning and Design Code is General Neighbourhood.[13]

1. Ms Elliott took instructions from the Valuer-General's solicitors and received a variety of documents by way of background including information passed on from the office of the Valuer-General as to the concerns held by the applicant about the Valuer-General's valuation.
2. Ms Elliott inspected the property on 1 August 2022 for the purposes of her report filed on 13 July 2023.[14]
3. Ms Loftes took instructions about the property from Mr Bosnakis. She met with them over four occasions, and discussions totalled 18 hours for the subject property and the other two properties that are the subject of this review proceeding. She prepared a report dated 29 September 2023 based on an inspection at the site documented as having occurred on 26 October 2023.[15] She said,

The primary issue the owners are particularly concerned with is why the Valuer-General failed to take into account all liabilities detected from the soil report, sub-surface contaminants, uncontrolled fill, structural repairs, and when it rains the storm water drainage along [the shorter frontage] is severely inadequate every time there is heavy rain, the excess storm water floods the property. This problem is now that severe soil is transported from the rear yard through to the front yard, uprooting trees and other foliage in its path ...[16]

4. Ms Loftes described the sources of her information as instructions and photographs provided by the applicant, the certificates of title for the properties, a soil report, and a quotation for works by Royal Park Salvage dated 19 June 2023. Ms Loftes' report also contains her own photographs taken during the inspection of the site. Ms Loftes had Ms Elliott's report on hand when she prepared her own and was able to consider the way in which Ms Elliott had approached the valuation.[17]

1. Both experts commenced their valuation analysis with the task of determining the highest and best use to which the subject land could be put. In Ms Elliott's view, that use is "a single residential property holding".[18] Ms Loftes formed the same view. [19]
2. Because of the conclusion that the property was to be valued in that manner, the costs or opportunities of sub-division, or development of the site for the purposes of multiple dwellings, were not to be considered in the assessment of the value. The site was valued on the basis that it would be sold to someone for the purpose of living in the existing dwelling, or demolishing the existing dwelling and building another single dwelling in its place.
3. Ms Elliott considered that she was constrained by s 22A of the Act because the site to be valued consists of three titles but is owned as a principal place of residence. Section 22A of the Act provides:

22A - Notional valuations to be made in certain cases > > (1) The owner of land is entitled to the benefit of this section in respect of the valuation of land by a valuing authority if - > > (a) the owner -

(i) has an estate of fee simple in the land; or

(ii) holds the land by virtue of a Crown lease, or an agreement to purchase from the Crown; or

(iii) is the occupier of the land by virtue of his or her shareholding in a body corporate of a kind referred to in paragraph (b)(ii); and

(b) the conditions laid down in any one of the following subparagraphs are satisfied:

(i) the owner of the land is a natural person, the land constitutes his or her principal place of residence, and is not used for any commercial or industrial purpose; or

(ii) the land is vested in a body corporate and -

(A) the whole of the land vested in the body corporate consists of a group of dwellings and land appurtenant to those dwellings; and

(B) all issued shares of the body corporate are owned by shareholders who acquire exclusive rights to occupy land of the body corporate by virtue of their shareholdings; and

(C) the land constitutes the principal place of residence of a natural person who is a shareholder in the body corporate; and

(D) the land is not used for a commercial or industrial purpose; or

(iii) the land is used for the business of primary production; and

(c) the value of the land is, in the opinion of the relevant valuing authority, enhanced by -

(i) an existing division of the land; or

(ii) a potential for division of the land; or

(iii) a potential for use of the land otherwise than in the manner referred to in the relevant subparagraph of paragraph (b).

(2) Where a valuing authority is satisfied that a person is entitled to the benefit of this section it may, and must at the request of that person, value the land as if the existing division or potential for division or use referred to in subsection (1)(c) did not exist and any such valuation will operate for the purposes of any rating or taxing Act under which rates, taxes or imposts are levied or imposed on the land on the basis of the valuations of that valuing authority.

(3) Where a valuing authority makes a valuation under the provisions of subsection (2), it must inform the owner of the land, in writing, of the valuation and of the owner's obligations under subsection (6).

(4) When land is valued under the provisions of subsection (2), it must also be valued as if the owner were not entitled to the benefit of this section, and the latter valuation will take effect for the purpose of a rating or taxing Act if -

(a) the owner ceases to be entitled to the benefit of this section; or

(b) a person who is not entitled to the benefit of this section becomes the owner of the land.

(6) Where land has been valued under this section and -

(a) circumstances occur by virtue of which the owner ceases to be entitled to the benefit of this section; or

(b) the owner enters into a transaction by virtue of which a change in the ownership of the land may occur,

the owner must, subject to subsection (7), within 28 days inform the relevant valuing authority of those circumstances, or that transaction, and must furnish such further information as the valuing authority may require.

Maximum penalty: $5 000.

Expiation fee: $315.

(7) Where by virtue of an Act a right to rescind or avoid a transaction exists, the obligation to inform a valuing authority of the transaction does not arise unless the time within which the right may be exercised expires and the right has not been exercised within that time.

(8) In this section -

rating or taxing Act means any of the rating or taxing Acts or any other Act under which a rate, tax or impost is levied or imposed on land;

valuing authority means the Valuer-General or other authority responsible for valuing land for the purposes of a rating or taxing Act.

(9) For the purposes of the Land Tax Act 1936 a valuation under subsection (2) operates only in relation to land used for the business of primary production.

(10) An apparently genuine document purporting to be issued by a valuing authority and to certify the date of receipt of a request under subsection (2) will, in the absence of proof to the contrary, constitute proof of the matter so certified.

1. In short, Ms Elliott considered that she was required to value the property as a single property and assign a notional value.[20] Ms Loftes said that she did not arrive at a notional value.[21] However, as will be seen, Ms Loftes nevertheless focused upon an approach that entailed, for the most part, a single residential dwelling on the property. However, on page 15 of her report, she referred to the property as a "triple development site", which, in light of her view that the highest and best use of the property was that it be improved by only one dwelling, might be understood to refer to what she saw as the need to remediate the other parts of the property even if they were not to have a dwelling constructed on them.
2. I accept Ms Elliott's position that the Valuer-General's value is required to be provided in accordance with s 22A.

1. Both valuers set out their views as to key attributes of the subject property relevant to valuation. These attributes are considered by reference to the attributes of other properties in the pool that a prospective purchase may be canvassing.[22]
2. Both valuers acknowledged that the site is larger than the usual house lot, being three allotments, and that size is a desirable feature of an urban residential property up to a point, and then becomes undesirable if (as here), its highest and best use is a single dwelling site. Because a significant portion of the site is not suitable for development in its current state because of the steep slope, the valuers considered that its large size is a neutral or negative feature rather than a positive one.
3. The valuers agreed that the location is within a well-established suburb. Location was not considered to be a significantly disadvantageous or advantageous attribute of the property.
4. Both valuers acknowledged that the topography of the site is, at least, potentially, undesirable. The property slopes away quite steeply over the two allotments that are not occupied by the house. Ms Loftes described it in her oral evidence as a "severe moderate slope".[23] It was accepted by both valuers that at least 30% of the site could not be developed.

1. There were two primary environmental issues with the property considered by the valuers: water run-off, and contamination. Both of these were at the fore because of the applicant's contention that they lowered the value of the property and had been insufficiently considered when values were assigned by the Valuer-General.
2. In her report, Ms Elliott took into account a submission made by the applicant dated 14 September 2022 that:

"[the land] is impossible to build on and has had many water issues from water run off from the road (i.e. [the shorter frontage]). The water runoff from the road has caused a landslide and caused a lot of damage to our property. This has been a continuous problem for over decades and is still occurring to date. This also brings contaminants from the road onto our property."[24]

3. Consistent with this submission, Ms Elliott acknowledged "evidence of past water inundation resulting in subsidence and erosion"[25] and observed that historical aerial photographs indicated that a major subsidence had occurred in January 2017 and that the council had recently installed "additional drainage infrastructure to alleviate this issue in the future".[26] She expressed the view in her report that she did not consider water run-off, flood risk or the past inundation event to be an issue for which any specific deduction in value was necessary, and that the topography of the site, including the run-off implications of a sloping property, was merely an attribute of the property to be taken into account along with its other attributes. She remained of that view in her oral evidence.[27]
4. Ms Loftes told the Tribunal that on her instructions, the stormwater infrastructure associated with the property has proved to be manifestly inadequate.[28] She said it was obvious, from her own visual inspection, that erosion at the property had been caused by excessive run-off of stormwater in the past. She observed that the applicant does not consider that the stormwater infrastructure recently installed will fix the issue but acknowledged in her oral evidence that only time will tell. In terms of its influence upon her valuation, she considered it a negative attribute of the property affecting value.[29]
5. A key area of dispute between the parties was the effect, if any, of contamination of the property on the value of the property. Both valuers acknowledged that "contamination" in a valuation context is a broad term that encompasses the effects of hazardous materials creating a risk to human health at one end of the spectrum, and the presence of anything on or under the land that is not an improvement and not part of the "natural" state of the property, at the other. An example of the former type of contamination is asbestos or sub-surface heavy metals, and an example of the latter is rubbish at the site.
6. It is the applicant's position that the surface of the property is contaminated by bitumen pieces that have been transported from the road during rain downfalls, which have caused a large crater, and compacted fill across the site that would need to be removed and replaced with clean fill if the site were to be restored to an acceptable state.[30]
7. Ms Elliott observed "bitumen particles and clumps" in the surface soil towards the eastern end of the site. She observed that there was no soil report that could be interpreted by reference to bore logs, that might shed light on the nature, depth, or extent of uncontrolled fill on the land. She understood that the property had been used as the site for a residential dwelling for many years, and in her opinion the surface was not outside the range of surfaces encountered on suburban house blocks.[31] In considering contamination in the context of the valuation of a residential property where the highest and best use is that it maintain its current use, Ms Elliott's approach was to consider the owner's obligations to disclose contamination to potential purchasers. She noted that the regulation of contaminated soil came within the control of the Environment Protection Authority (EPA) and said,

Based on information provided to me and my observations at my inspection, there do not appear to be any contaminants on the property that would meet the EPA definition of a "Potentially contaminating activity" in a domestic situation, and that would come to the attention of the EPA.[32]

8. Ms Elliott observed that the land could be the subject of a site contamination assessment commissioned by the applicant if he wished, which would entail testing of the soil at various depths. She said that such an assessment was not necessary or required for valuation purposes if it was not proposed to change the use of the land, or if any proposed use was to an equal or lesser use in terms of the sensitivity of that use.[33] On the approach she had taken to the highest and best use of the land, she did not consider that there was any reasonably foreseeable development of the site that would trigger the need for a site contamination assessment by the owner.[34]
9. Ms Elliott considered that the property's ground surface was in a state not unlike many others across the metropolitan area. Further, she observed that its state was evident from a visual inspection. The state of the surface of the land was a feature of the property that did not, in her opinion, warrant separate treatment in the valuation process. It was simply a feature of the property, along with many others, that would be taken into account by a prospective purchaser and should be taken into account by a valuer as an attribute of the property.[35]
10. Ms Loftes introduced her consideration of the topic of site contamination by observing that,

contamination can be in material form, like asbestos, or it can be pollution, litter, uncleanliness, which the subject property is affected by, and any visual inspection will confirm that.[36]

... for the past 24 years as a Property Valuer, plus the years as a certified Building Surveyor, I can confirm from firsthand experience that it is easy to identify contaminants and debris that sit on the surface or just below, but what is not easy and must is [sic] a very real concern is, what lies under the surface that will not come to fruition until remediation work or further investigations are undertaken.[37]

12. She noted that "contamination is not always serious",[38] and said,

For contamination to be considered, there does not need to be a physical notice issued by the Environmental Protection Authority (EPA). If the current owner offered the subject property For Sale, prudent potential buyers and developers are knowledgeable and capable of not only identifying asbestos, but prudent purchasers will not overlook that same issues and the extensive repairs clearly visible, which the Valuer-General and I have both identified.[39]

13. Ms Loftes' view was that the surface contamination would make the property difficult to sell and affected its value. She considered the contamination to be something that a vendor would need to address, or needed to be taken into account in the assessment of value.[40]
14. Mr Bosnakis had provided a soil report, or part of it, to Ms Loftes. In cross-examination, she advised the Tribunal that she had read the soil report, although it was not annexed to her report, and that it had not influenced her valuation.[41] The soil report did not have any interpretative text with it or express any opinions as to soil quality.
15. The applicant also provided Ms Loftes with a quotation from demolition and earthworks company, Royal Park Salvage, for various works to be done at the property. Ms Loftes relied upon this document in reaching her valuations. The Royal Park Salvage quotation specified a cost for the removal and disposal of 24,000 tonnes of soil, although Ms Loftes appears to consider the soil to be to fill the crater caused by erosion.[42]

1. Improvements potentially affect the value of land. In terms of the improvements at the property, Ms Elliott described the features of the dwelling on the property and considered the submissions made by the applicant that highlighted various defects and matters requiring repair in the house and surrounding landscaping. Ms Elliott considered the age, size and standard of the improvements, describing them as of "below average condition".[43]
2. Ms Loftes considered that the house was in a poor condition. She said,

There are structural issues with retaining walls, substantial salt damp...the swimming pool and spa are inoperable due to cracking ...[44] > > ... > > I do not disagree with the statement made by the Valuer-General on page 10 in the most recent valuation report that, apart from the kitchen, overall the dwelling must be considered below average to poor.[45]

3. She described in more detail the particular defects of the property, and included numerous supporting photographs that she took during her inspection.[46] She thought that the applicant would be well-advised to get in a structural engineer to ensure that the house was safe.[47]

1. The experts adopted the same valuation method with respect to the Valley View property: the comparable transactions method, formerly known as the direct comparison method. That method was described by Ms Elliott as a type of "market approach" as opposed to an "income approach" or a "cost approach".[48] The alternative approaches were not elaborated upon in either valuer's report, but Ms Elliott touched upon them in her evidence. The income approach assigns value by reference to the income a property is estimated to generate for the owner. The cost approach attributes value to an improved property by an assessment of the construction of similar improvements on another site.

Ms Elliott's comparable transactions analysis

1. Ms Elliott described the comparable transactions method as,

[a] market approach to valuation where sales of comparable properties are compared to the subject property using a unit of comparison, with adjustments then made for points of difference including allotment size, location, zoning, improvements, surrounding developments etc, to arrive [at] a market value.[49]

2. In her oral evidence, Ms Elliott said that as the purpose of the valuation is to ascertain what the property would realise if sold at a particular point in time, the comparable transactions method is to be preferred over other methods if it is available because it entails reliance upon actual sales of similar properties.
3. The application of the comparable transactions method to the Valley View property entailed, in Ms Elliott's view, the consideration of the following attributes of the property:
   • Size, noting that in respect of residential land used for a single dwelling, bigger is better until a certain point after which it will become a negative or neutral feature;
   • Location (eg suburban, rural etc), zoning and desirability of the property location including surrounding developments, amenity, aspect etc;
   • Topography, noting that the site had an "extremely steep" slope with an area of slippage and erosion reducing the useable area of the property by some 30%;

• Improvements, including the age and condition thereof.[50]

1. These attributes were used to select a number of comparable properties that had sold in the 12 months prior to the assessment date in the same or nearby suburbs.
2. Ms Elliott observed that various features of the property, including particularly its large size and topography but with a single dwelling residential use, required an extension of the search area for comparable properties to include some rural residential areas.
3. Ms Elliott separately sought out a set of comparator vacant land blocks and a set of comparator blocks with improvements (dwellings).
4. Ms Elliott selected properties that had sold within the 12 months prior and up to one month subsequent to 1 January 2022. She explained that valuers would not usually use sales that occurred after the date at which the value is being assessed, and would usually keep the pool of comparators as close to the assessment date as possible, and take account of whether the market was growing or declining in the lead up to the assessment date. [51] In respect of the market, she noted that 2021 was a year of strong growth following a sharp drop the previous year when COVID-related issues affected property values.
5. In relation to vacant land, Ms Elliott's report included a table describing features of four vacant properties that she considered "suited to development of a single dwelling" that had sold in the 12 months prior or the month following 1 January 2022.[52] She recorded their sale prices, which were also converted to prices per square metre. In respect of each, she expressed a view as to whether the Valley View property would be expected, in her opinion, to realise a greater or lower sale price and a greater or lower price per square metre.
6. After assessing those eight properties, Ms Elliott arrived at a range for the quantum and for the price per square metre for the "larger proportioned residential allotments within north-eastern suburban locations". These ranges were $375,000 to $768,000 and $69 to $425 per square metre respectively.
7. Then, by considering the attributes of the Valley View property, prevailing prices in the Valley View area for conventional-sized allotments, market conditions at the date of valuation and the "strong value growth" during 2021, Ms Elliott identified a point in the range of comparator values that she considered the subject property would be placed at. She considered that the Notional Site Value for the property at Valley View was in the "low $400,000 range" and concluded that "a value of $420,000 is considered reasonable to adopt".[53] She observed that this equates to a rate of $106 per square metre and noted that this was "well supported by the sales evidence given the land size, topography and subsidence issues and locational attributes."[54]
8. Ms Elliott acknowledged that her assessment of the notional site value of $420,000 represented a reduction from the Valuer-General's earlier assessed notional site value of $470,000 as at 1 January 2022.[55]
9. Ms Elliott then turned to a consideration of sales evidence of land improved by a dwelling in order to assess the Notional Capital Value.
10. As had been with case with the vacant blocks, Ms Elliott found that she was required to expand the geographical search area in order to find comparable properties because of the large size of the Valley View property. She confined her searches to properties with dwellings of a similar age and construction and identified four such sales in the 12 months prior to 1 January 2022.
11. For each property, she undertook a comparative analysis summarised in a table and formed a view as to whether the property under consideration would be expected, by virtue of its features, to realise a higher or lower overall price, and an overall higher or lower price per square metre than the Valley View property.
12. Having undertaken that task, Ms Elliott concluded that the sales evidence supported a notional capital value for the Valley View property in the low $800,000 range and on that basis considered that $800,000 was a reasonable figure to adopt as the property's Notional Capital Value. She further expressed the view that,

"this level of value analyses to a rate of $2,133/m2 of [equivalent main area], which sits well below the rates displayed by the sales evidence, but which is reasoned by the larger size of the dwelling, its below average condition and presentation together with the reduced amenity of the gardens and grounds."[56]

13. Ms Elliott's conclusion represented a lower value than that which had been assigned by the Valuer-General originally.

1. Ms Loftes looked for comparable properties on much the same criteria as Ms Elliott, but placed some emphasis on the traffic flow as a disadvantage of the subject property. She set out in her report a description of ten potential comparator properties with dwellings, and three vacant blocks. There was no overlap in the properties selected by the two valuers. Ms Loftes had Ms Elliott's report when Ms Loftes prepared her own.
2. Of the ten improved properties, three were disregarded as being so superior to the subject property that they should not be used as comparators.
3. For the purposes of assessing capital value, Ms Loftes did not use the properties to determine a range but instead identified the property with the greatest similarity to the subject property. She determined that one of the comparator properties at Tea Tree Gully, which sold on 5 June 2021, was an appropriate benchmark. Its price per square metre was $2,252. However, Ms Loftes considered that the Valley View property was inferior due to the condition of the dwelling, and of the pool and spa, and "other structural problems and costs" and concluded that the Valley View property should be assigned a lower value of $2,085 per square metre. This translated to a capital value of $781,875, which she rounded to $780,000.
4. In relation to a site value, Ms Loftes found one of the three vacant blocks she had relied upon at Summertown, which sold on 24 July 2020 for $365,000 at a rate of $79 per square metre, to be an appropriate benchmark.[57] It was put to Ms Loftes in cross-examination that the date of sale, being at the height of COVID restrictions in South Australia, detracted from its use as a comparator, but Ms Loftes did not state that she had considered that to have been a feature of this comparison.[58] It was also put to Ms Loftes in cross-examination that a property with no services connected, in Summertown which is a town outside of the metropolitan area and zoned "rural", was not an appropriate comparator.[59] Ms Loftes stated that the size was comparable, and when asked why she had not relied on one of the selected properties that was in the metropolitan area, similar in size and which had a date of sale closer to 1 January 2022, she replied, "valuer's discretion".[60] Ms Loftes maintained that she took account of all of the characteristics of the comparator properties when she selected them.[61] She disagreed with the proposition, put to her in cross-examination, that the Valley View property would ordinarily be expected to attract a higher price than land of the same size outside of the metropolitan area.[62]
5. Ms Loftes provisionally considered the Site Value of the Valley View property to be $310,000.

Adjustments after consideration of comparator properties

1. The heart of the difference between the valuation approaches taken by the two valuers is whether it was appropriate to apply an adjustment by way of a further deduction from the values reached by the comparable transactions method. Ms Loftes considered that it was appropriate to do so, to account for the particular defects in the Valley View property, to enable her to reach a value that properly reflected the price that the property might expect to realise upon sale. Ms Elliott did not consider that there was a basis for such an adjustment. It was her view that in the context of the provision of a notional value, as required in the circumstance of this property, the relevance of the Royal Park Salvage quotation for what appeared to be preparation of the whole of the site for development, was not established.[63] It was her contention that the premise of the valuation, being that the highest and best use of the property was its current use, meant that development of the whole of the site was not in contemplation, and that remediation of the whole or any of the site was not required.[64]
2. Whilst Ms Elliott did not say that the application of a further deduction after reaching a value by this method would never be required, it would usually be unnecessary.[65] This is because ascribing inferiority or superiority to the comparator properties during the comparable transactions method process would usually account for any value-reducing characteristic of the subject property.[66] She did not address the issue in her report as her report pre-dated Ms Loftes' in which the issue was raised. However, she was asked about the issue in examination before the Tribunal.
3. It was Ms Elliott's evidence that neither the poor state of the dwelling, nor the presence of bitumen particles in the surface soil, nor the water run-off issues, to be attributes that warranted any separate deduction from the values reached via the comparable transactions method.[67]
4. Ms Elliott observed that the comparable transactions method assumes that although there will be differences between properties, it is possible to find a pool of properties each of which shares with the subject property a subset of the relevant characteristics.[68] In relation to the Valley View property, its steep slope, the state of the surface soil, and the poor state of the improvements were matters capable of being accounted for in the attribution of superiority or inferiority to the comparator properties. They were not characteristics requiring further deductions after comparison and indeed, to make a further deduction would risk "double-counting" the attribute. This was because the sale prices of the comparator properties reflected the "as is" state of those properties. She was asked in examination-in-chief to comment on the way in which she would account for costs if the site were to be valued in contemplation of development rather than for sale "as is". The following exchange ensued between Mr Bullock and Ms Elliott in examination-in-chief:

Q: What you're saying is if you've done the comparative assessment and arrived at a value then it's not appropriate in your view to deduct the costs from that value? > > A: That's correct. In this situation ... Sometimes it's not easy to know what that value might be or what the deductions might be, but in the situation where you do have some cost guidance, the basis of which I don't understand because the quote from Royal Park Salvage is not clear as to what the purpose of the quote is for, in the context of notional value there is no requirement to return the site to a point where you will build another house on it, for example. And if that is the intention, then you need to be assessing the value of the property with the land remediated and then deducting the cost to remediate, or a proportion subject to the view as to what needs to be deducted at that point, and potentially someone would add a profit and risk amount, just something to sweeten the deal a little bit, but you would deduct that from what you believe the value would be once all that work was completed.[69] > > ... > > I haven't made an adjustment for [the Royal Park Salvage quoted works] because in the context of notional value there is no particular need to do any work to the property. I value the property as a large site that cannot be subdivided, cannot be further developed and is in the condition that it is in.

5. Ms Elliott was asked to assume that the property was being valued on a development basis, and whether the costs of remediation would then be deducted from the capital value or the site value. Ms Elliott said that as the Royal Park Salvage quotation concerns the removal and replacement of fill, its cost on a development valuation approach would be deducted from the site value. However, she considered that it was difficult to use the Royal Park Salvage quotation as a meaningful contributor to any type of valuation for the Valley View property because the quotation gave no indication of the instructions as to what it was sought for.[70]
6. In summary, Ms Elliott did not consider that the costs of remediating the land were relevant to a valuation that was performed on a notional basis for a property that had as its highest and best use its current configuration. Even if the property were assessed on a development project basis, she considered that it was not appropriate to deduct costs in the manner that Ms Loftes had done. In that circumstance, her evidence was that the valuation approach would be to deduct costs from the figure representing the estimated value of the property after the work had been performed. Thirdly, she considered that such an adjustment to take account of land remediation costs would need to be made to the site value, because the adjustments relate to land remediation and not to the improved land. Finally, she considered that the Royal Park Salvage quotation to be an inadequate basis for making adjustment as it was too lacking in detail for it to be understood in a valuation process what its provided purpose was.
7. Ms Loftes, on the other hand, considered that the valuation of the Valley View property required a deduction from the value reached by the comparable transactions method, to take account of the defects in the property and to achieve the overall purpose of arriving at a value that represents what a prudent purchaser would pay for the property.[71]
8. She considered that the Royal Park Salvage quotation provided a basis for estimating the costs that would be incurred in bringing the site to a condition that it meant it would sell. Although the Royal Park Salvage quotation was for remediation works to the cost of $1,080,000, Ms Loftes said that she was "never going to adopt the full amount" of that quotation because it would result in a negative value for the property, and the sales data did not support such a conclusion. Her view was that despite all the negative attributes of the property, the land nevertheless has a positive value.[72]
9. Ms Loftes set out in her report various assumptions about the behaviour and expectations of potential purchasers.[73] She also set out various considerations and legal principles in justification of her analysis.[74] Instead of deducting the whole of the cost of the Royal Park Salvage quotation from the provisional values she had reached using the comparable transactions method, she posed two scenarios.
10. One possible approach was to deduct 30% of the Royal Park Salvage quotation from the provisional values she had reached after undertaking the comparable transactions method. She considered that this would provide some improvement to the property within the scope of a single dwelling redevelopment. She applied the deduction to the capital value but not the site value.
11. The second, alternative scenario, was to adopt the approach that she understood to have been taken and approved by the Supreme Court in Bosnakis & Anor v Valuer-General [2017] SASC 158 (hereinafter referred to for convenience as "the 2017 Proceedings"). The 2017 Proceedings concerned a challenge by the applicant to a valuation by the Valuer-General in respect of a different property.
12. Ms Loftes considered that the approach endorsed in the 2017 Proceeding entailed applying a deduction to a provisional value reached by the comparable transactions method, to achieve a value that reflected what the market would pay for the property given its particular defects. In the 2017 Proceedings, she understood that the valuer whose opinion had been relied upon by the Court had applied a deduction of 30% to a value he had reached after the comparable transactions method was used to reach a provisional value. On this scenario, she considered that a 40% deduction from the provisional value would be an appropriate deduction for the Valley View property to achieve such an outcome because of the poor state of the land and the improvements. She then applied that deduction to the capital value, but not the site value. The site value remained assigned to the value after employing the comparable transactions method.
13. Of the two approaches, she elected to fix upon a final capital value that was determined by deducting 30% of the cost of the Royal Salvage quotation from the provisional capital value reached by the comparable transactions method.[75] This resulted in a deduction of $356,400 after GST was added to 30% of the quotation, and led to a final capital value of $425,475, then rounded to $425,000.
14. In drawing the various propositions together, Ms Loftes' analysis in her report proceeded:

It has not been disputed in any valuation reports of the subject land that it is not (sic) a difficult site to sell. The subject land will prove difficult to sell.

From the 2017 South Australian Supreme Court matter between Bosnakis & Anor v Valuer-General, at [22] the following was held by Ms Hawkes[76]...

"taking into account the appearance of the subject land and the lack of information about its actual state, it would be very difficult to sell. A significant discount would be required to attract a purchaser. In her opinion, the capital value of the subject land, [if in 'normal' condition][77], would be in the order of $1.5 Million. However, it would be necessary to discount the price by about 30% before anyone would take a chance on purchasing it. Ms Hawkes therefore confirme[d the] Revised Valuation of $1,050,000."

Following the above opinion, due to the lack of current information on the subject land, its actual state and how it will prove very difficult to sell, rathe[r] tha[n] apply a 30% discount, to the value I have determined on page 37, I have concluded a 40% discount more appropriate now and the results are as follows:

Scenario 1

Suggested assessed Capital Value $781,875 x 40% = $469,125 Rounded to $470,000

Scenario 2

Assessed Capital Value $781,875 - $356,400 (costs) Rounded to $425,000

Conclusion

The results of the assessment between Scenario 1 $470,000 and Scenario 2 $425,000, are consistent. Even if SACAT refuse to accept the costs for $356,400 and is only 30% of the Royal Park Salvage quote, the Capital Value is $425,000 which is not unreasonable either.[78]

1. It was put to Ms Loftes in cross-examination that taking the capital value reached by the comparable transactions method and then deducting a further 30% amounted to double-counting, because it entailed taking the defects of the subject property into account at both steps of the valuation process.[79] Ms Loftes did not agree but did not elaborate.[80]
2. It was also put to Ms Loftes that if the applicant paid for remediation and brought the site to a state in which it could be developed, it would then have a higher value than the comparator sites that had sold on an "as is" basis.[81] She did not agree. She said,

Knowing the problems ... to see the problems with the site, there's got to be a certain amount of work that Royal Park Salvage would have to do. Like the crater would need to be filled in, ... So that's the reason why I've adopted 30% and not 50% or 80%, because I'm saying I believe that if they spent this much it would at least be more saleable.[82]

3. When asked why she had applied the deduction only to the capital value, Ms Loftes' evidence was that to deduct the amount of $356,400 from the site value would reach an amount that was not consistent with the value of the land as the value would be reduced to a negative figure.[83]
4. Ms Loftes further maintained that the approach of adjusting in this manner was consistent with the approach endorsed by the Supreme Court in the 2017 Proceedings.

Summary of approach and conclusions reached by the valuers

1. The Tribunal's task in relation to the property at Valley View is to consider the capital and site values for that property. Ms Elliott assigned a notional capital value of $780,000 and a site value of $490,000. Ms Loftes assigned a capital value of $425,000 and a site value of $310,000. The primary, though not only, difference between the valuations was the adjustment made for costs associated with remediating the property.
2. Before considering the two approaches, it is convenient to set out the evidence in relation to the other two properties under consideration.

1. The first property at Burnside is 913 m2 in size with 15.24 metres of frontage to a main road. It is zoned Suburban Neighbourhood. It was described by Ms Elliott in her report as a "regular shaped allotment with a moderate fall from the road frontage, improved by a circa 1925 bungalow style dwelling which at the date of inspection was in very poor condition and considered to be uninhabitable."[84]
2. The location was described as six kilometres from the city in an established suburban location.
3. The company IMY PTY LTD, controlled by the applicant, has owned the property since 2001.
4. The general valuation of this property undertaken by the Valuer-General provided valuations as at 1 January 2022, of $750,000 each for site and capital value. The concept of notional value as set out in s 22A of the Valuation of Land Act 1971 is not relevant to either of the Burnside properties.
5. Following an objection, these values were confirmed by the respondent on 4 November 2022, and the applicant was informed of the outcome on 28 November 2022.[85] The applicant sought a review in this Tribunal.
6. The parties both engaged the same experts to provide valuations for the proceedings as they had for the Valley View property.

1. Ms Elliott inspected the property on 29 July 2022 and her report was filed on 13 July 2023. In respect of the basis of the valuation, she said,

In accordance with IVS (140), Highest and Best Use is the use that would produce the highest value for an asset that is physically possible, financially feasible and legally allowed. > > I have reflected on the traditionally desirable bungalow style of the dwelling and note that while it may be physically possible to renovate the existing dwelling, reflecting on the prestige inner suburban location where the majority of housing stock is of very high quality and having due consideration of the very poor condition of the improvements, it is likely that the cost to restore the improvements to an acceptable market standard would be unviable. > > Therefore, in my view the site now presents as a development site. > > Based on the site frontage and site area the zoning appears to support the development of a single dwelling only, and I consider that re-development with a single dwelling would represent the Highest and Best Use of the subject property.[86]

2. Ms Loftes inspected the property on 29 September 2023 at the request of the applicant and provided a report of the same date. She concluded that the highest and best use for the site was as a development site. She said in her report,

To gauge what type of re-development the City of Burnside would be prepared to consider, on 4 November 2023 I contacted Council and was able to speak with a Senior Planning Officer. The initial query was whether the subject land is suitable to be further subdivided. The Planning Officer explained that with a frontage of 15.24 metres, the re-development meets the current requirements for a single detached dwelling and consideration would be given to a semi-detached dwelling that requires a minimum site area is (sic) 425sqm. Council confirmed that the frontage for semi-detached is 9 metres and depending on the design, Council has accepted sites that have not met that minimum, but approval was determinant on the type of development being proposed.[87] (Emphasis in original)

1. Ms Elliott observed the following attributes of the property relevant to valuation[88]:
   • Moderate traffic volumes
   • Desirable location
   • Potential for development to achieve a home with nice views
   • Services connected
   • No environmental issues
   • Uninhabitable dwelling
   • Zoning conducive to development
   • Market conditions at the relevant time were that the market was growing
   • Strong demand for land in the area.
2. Ms Loftes described the property in her report as having a "moderate to severe slope"[89]. She considered that the dwelling was uninhabitable and not financially feasible to repair.[90] She records the applicant's concerns about the valuation arising from the state of the retaining walls at the property, the presence of contaminants on the surface of the site and the cost of remediation, the presence of asbestos in the building and the cost of demolition, and the lack of storm water infrastructure.
3. Ms Loftes relied upon a quotation obtained by the applicant from McMahon Services in 2015 for site remediation.
4. Ms Loftes also made reference in her report to a quotation from the Fawcett Group dated 31 October 2023 for installation of storm water infrastructure estimated at $35,000.[91] She also referred to an emailed offer for the purchase of the property, along with the adjacent property, the second Burnside property, from an individual, in the sum of $860,000, which was subsequently withdrawn.

1. Ms Elliott considered that the dwelling was uninhabitable and did not add value to the land. Her valuations reflected this in that she assigned the same capital value as site value. It was her assumption that a potential purchaser would demolish the dwelling and re-build. However, she did not consider that demolition costs would de-value the property. In her report she wrote,

In my experience the cost of demolition is not an impediment to purchase in markets where vacant land is scarce, and particularly in prestige markets where land values are relatively high. Further, in such markets quantifying any adjustments markets may have to be made for the potential cost of demolition is generally not required given that the cost impact is typically insignificant in the context of a total project cost.[92]

2. Ms Loftes described the existing dwelling as "dilapidated and structurally unsound" and "not financially viable to retain, repair and renovate".[93]
3. She considered that the retaining wall and fence along the eastern boundary (not being the boundary between the first and second Burnside properties) required replacement, but noted that no quotations had been obtained and accordingly the cost of this was unknown.

1. Ms Elliott did not consider that environmental factors affected the value of the land. She said,

At the time of inspection, we did not observe any signs of contamination or potential contamination and as at the date of valuation there were no Environmental Protection Authority notifications pertinent to the subject property, nor are there any notifications issued subsequent to the date of valuation.[94]

2. As she had done with the Valley View property, Ms Elliott viewed environmental factors taking on significance to value where their presence triggered some obligation on the part of the vendor to remediate or notify. She observed that there were no such factors in play in relation to the first Burnside property.
3. Ms Loftes considered that there were environmental effects at the site that affected valuation. She relied on photographs of since-removed debris left by former tenants that the applicant had advised her had left sub-surface contamination, and a quotation from 2015 provided to the applicant by a company, McMahon Services. That document was not attached to Ms Loftes' report but was received in evidence at the hearing.[95] The report described demolition of the dwelling, removal of soil across the site to an average depth of 750 millimetres, backfilling the site with clean fill, grading the site to contour, and installing stormwater infrastructure. It estimated the cost of listed works to be $177,830 exclusive of GST.
4. Ms Loftes also considered that the presence of asbestos in the building indicated an expense associated with demolition that would need to be considered when valuing the property as it would be likely to affect potential purchasers' offers. She said,

...the subject land has substantial costs associated with remediation work that must be undertaken either prior to being sold or prior to it being purchased and built on.[96]

1. Ms Elliott considered that the highest and best use of this property is re-development with a single dwelling.[97] She considered that the comparable transactions method was the most appropriate method of valuation.
2. Ms Loftes also took the view that the highest and best use for the property was as a residential development site.[98] Ms Loftes also approached valuation with the comparable transactions method. She referred to, but rejected, an approach she referred to as the "hypothetical development" approach, on the basis that it produced results inconsistent with the comparable transactions method.[99]

1. Ms Elliott identified four comparable sales in the 12 months prior to 1 January 2022, and two sales that settled after the date but were entered into before the relevant date.
2. The properties were set out in her report in a table describing each property's size, location, topography and other features relevant to valuation, and ascribed superiority or inferiority to each by reference to the first Burnside property. In undertaking the comparison she took into account
   • The prestigious Burnside locality
   • The strong demand for land and re-development opportunities in Burnside and the broader area
   • The larger site proportions including the 18.24 metre frontage and the moderately steep fall from the frontage
   • The underl[y]ing zoning that would permit redevelopment of the site with a single dwelling or two semi-detached dwellings
   • The potential for elevated views
   • The busy [main road] frontage

• Market conditions at the date of valuation including the steady value growth experienced by the market in 2021.[100]

Overall, my analysis of the sale evidence indicates that single residential allotments or undercapitalised properties suited to short-term redevelopment within the immediate vicinity have sold during 2021 in the quantum value range of $670,000 to $870,000, which analyses to rates per square metre of site area of $834 m2 to $1,120 m2 for sites of between 660 m2 and 1,043 m2.[101]

2. Ms Elliott concluded that the larger site proportions and less desirable main road position of the first Burnside property warranted a value at the lower end of the range, and settled upon $750,000 for both site and capital values for the first Burnside property.[102]
3. Ms Loftes recorded her analysis of 14 comparable sales.[103] Three of them overlapped with the six used by Ms Elliott. Ms Loftes said that,

In assessing the Site and Capital values for the subject property, the specific characteristics given the highest importance included sales with the same geographical location that presented identical surroundings, or were located on a main road or roads carrying a moderately heavy volume of daily traffic, the overall land area, frontage, topography, in particular the gradient of the site and whether it proved difficult to build on and other problems usually obvious. Of course, also important were the market conditions at the date of valuation, and what experts after predict.[104]

1. Ms Loftes identified four sales as particularly similar. All of them were blocks smaller than the first Burnside property. A vacant lot at Burnside sold for $700,000 on 22 June 2021. She calculated its price per square metre as $835. A vacant lot at Magill sold on 12 July 2021 for $680,000. Ms Loftes calculated its price per square metre as $958. A vacant block at Glen Osmondsold for $640,000 on 16 February 2021 and Ms Loftes calculated its price per square metre as $810. Another vacant block at Burnside sold on 27 August 2021 for $670,000 and Ms Loftes calculated its price per square metre as $1,013. Though not stated in the report, the average of these was $904.
2. For reasons not explained in the report, Ms Loftes arrived at a provisional rate per square metre appropriate to the site of $732, and then calculated the provisional site and capital value on that basis to be $668,773.

1. Ms Elliott did not consider that there was any basis for making an adjustment to the valuations after the comparable transactions method had been employed.
2. When preparing her report, she was aware from the instructions provided to her that the applicant considered that the following attributes of the property adversely affected its value:
   • The decrepit state of the building
   • Asbestos in the building
   • The steep slope of the property
   • Truck traffic to and from a nearby quarry.
3. Ms Elliott considered that the first Burnside property was capable of having all of its attributes factored into the comparable transactions analysis to produce final values.[105]
4. Ms Loftes considered that an adjustment was required to be made to account for the work required to be done to the site before it could be built upon. She took advice from two builders to ascertain the extent of increases in development costs since 2015,[106] and she then used those figures to update the McMahon Services quotation by adding 35% to it. The applicant had provided her with a quotation from a company, Fawcett Group, to install stormwater infrastructure. After adjusting that for cost increases applicable to the McMahon Services quotation over time, she put the total costs (excluding anything unforeseen and replacement fencing which had not been quoted) at $60, 287.
5. After that exercise, she concluded that costs of $168,840 would need to be expended to make the property more saleable. She then deducted that figure from the site value achieved after the direct sales comparison method, bringing the figure from $668,773 to $489,273, which she rounded to $490,000. This became her final figure for the site and capital value for the property.

1. The property is owned by the applicant as an investment property. It is next to the the first Burnside property and many of its attributes are the same as that property for valuation purposes.
2. The property has a frontage on a main road and is a rectangular block of 951 square metres. It is therefore larger than the first Burnside property. It slopes away from the road with what Ms Elliott described as a "moderate fall".
3. It is zoned "suburban neighbourhood". It has the usual services connected.
4. Ms Elliott inspected the property on 29 July 2022 (the same day as she inspected the first Burnside property) and her report was filed with the Tribunal on 13 July 2023.
5. The property is improved by a 1940s dwelling that Ms Elliott described as "decrepit and uninhabitable".
6. Ms Loftes inspected the site on 29 September 2023. At the time of the inspection she was in possession of Ms Elliott's report.[107]

1. As with the first Burnside property, both valuers considered that the highest and best use of the property was as a development site for a single residential dwelling.[108]

1. Ms Elliott inspected the site on 29 July 2022. Ms Elliott considered that the desirable location six kilometres from the city, with desirable amenities close by were positive features of the property. She noted that it fronts a main road with moderate traffic volumes.
2. Because an adjacent property to the east has been substantially filled, the eastern boundary of the subject site is heavily retained.
3. Ms Elliott considered that the highest and best use of the site is a single dwelling development site. Because the site was identified as a development site, she valued the site and the capital values concurrently.[109]
4. Ms Loftes provided a report dated 29 September 2023. In providing that report, she was given a copy of Ms Elliott's report. She noted the slope which she said would create flooding without adequate stormwater infrastructure, and a retaining wall that required replacement. She noted the impact of traffic travelling through to the nearby quarry.

1. In her report, Ms Elliott described the property as:

... improved with a detached, single storey, circa 1940 conventional style dwelling. The dwelling is of solid brick construction with a concrete tiled roof, timber floors and window frames and provides three bedrooms, one bathroom, lounge room, kitchen, sleepout, family room and separate toilet.

...

At the date of inspection the property was decrepit and uninhabitable. There was also evidence of vandalism and potentially squatters on site.[110]

1. Ms Elliott did not consider these features to be of significance to valuation given her view that the house would be demolished and that the cost of demolition was not material to the value.
2. In addition to the house, Ms Elliott noted the presence of an unkempt garden, a derelict single garage, decrepit small garden shed, concrete driveway, broken iron and Colorbond fencing and an attached iron-framed carport.[111]
3. Ms Loftes agreed with the opinion of Ms Elliott writing:

... I agree with the opinion of the Valuer-General that the costs to repair the existing bungalow dwelling is not a financially viable option, and that the subject property represent as a development site.[112]

1. The observations made about this property by both valuers repeated those made in relation to the first Burnside property.

1. Both valuers took a comparable transactions approach to determining market value for the property. Given the similarities between the properties, both valuers used the same comparator properties as had been used to value the first Burnside property.

1. Ms Elliott used the same six sales upon which to perform the comparison as had been used for the first Burnside property, and used the same sales price ranges to arrive at her valuation. However, because of the larger size of the second Burnside property, the comparison resulted in a higher site and capital value of $780,000.
2. Ms Loftes also used the same 14 properties she had relied upon to reach her valuation.
3. She also reached the view that the provisional site and capital values were slightly higher than for the first Burnside property, because of the slightly larger size of the site. She considered that the provisional value was $696,132.

1. For the same reasons as she gave in relation to the first Burnside property, Ms Elliott did not make any adjustments for demolition costs or any other cost associated with development.
2. Ms Loftes also considered that the fact that a person had made an offer that was subsequently withdrawn supported a conclusion that the property had flaws that needed addressing in order to make it easier to sell.
3. Ms Loftes took the same approach that she had taken with the first Burnside property, which was to make adjustments to account for the work that she considered would need to be done to make the property saleable. She deducted $232,383 from the value reached from comparable sales, to reflect the costs extrapolated from the quotations for earthworks, replacement of the retaining wall, and installation of storm water infrastructure. This led to a final value of $463,489, rounded to $465,000. Because of the additional works to be undertaken, particularly in relation to the retaining wall, the costs to be deducted were greater, and this led to a lower overall value for the second Burnside property than she had assigned to the first Burnside property, despite the slightly increased size of the second Burnside property.

1. In his written submissions, the applicant sought to rely upon previous valuations for the Burnside properties. He referred to the outcome of a settlement conference with respect to this property and the valuation that was determined in 2016. He states that he accepted the (much lower) values at that time "reluctantly" and it was accompanied by an undertaking by the respondent that the properties would not have increased values imposed until the properties were demolished and cleaned. That aspect of the applicant's written submission was not tested during the hearing. I do not place any reliance upon it. For completeness, the properties were also the subject of Tribunal proceedings with respect to the 2021 values and different values were given. I have not taken those into account in these proceedings. The scheme of the Act is that a valuation relates to a particular date and is in place with respect to a specified period. The current proceedings concern the value of the properties at 1 January 2022.

1. In relation to the second Burnside property, Ms Elliott assigned a capital and site value of $780,000 to the property. Ms Loftes assigned a capital and site value of $465,000 to the property.

1. In a challenge to a valuation under s 25C of the Act, the onus is on the applicant to establish that the valuations he contends are correct, should have been made by the respondent.[113]
2. The Tribunal was mindful of Mr Bosnakis' unrepresented status. One of the consequences of this was that Ms Elliott's opinion was not tested in cross-examination in the manner or depth that might have occurred if a legal practitioner had been asking the questions. Nevertheless, the Tribunal is satisfied that the applicant had an opportunity to cross-examine and, more importantly, that the Tribunal was able to assess and compare the experts' approaches and opinions from their evidence and from their written reports, in a manner that was sufficient for the Tribunal to discharge its task.
3. The Tribunal accepts that valuation is a matter of expertise. Consequently, as Debelle J put it in Ardoch Pty Ltd v Valuer-General (No 2):

[T]he court will not interfere with a valuation unless the appellant demonstrates that the valuer whose assessment is subject to appeal has made some error of law; has acted on a wrong principle of valuation; has misapprehended, misused or excluded relevant material, in other words, has failed to have had regard to relevant factors or has had regard to irrelevant factors; has misapplied principle or has in some other way erred in discharging the task of a valuer. The court will also interfere where the valuation is manifestly excessive or manifestly low.[114]

4. Prior to this Tribunal assuming jurisdiction over challenges to valuations of the respondent, the Supreme Court which was charged with the task, considered that it was not appropriate for the Court to select elements of one valuation and other elements of another to reach a third valuation.[115]
5. This was explained by the High Court in a valuation appeal from the Full Court of the Supreme Court of South Australia in Fenton Nominees v Valuer-General,[116] as follows:

The approach to be taken by an appellate court in valuation appeals has been discussed and applied in this Court. It has always been recognized that because the assessment of value involves the exercise of a discretionary judgment an appellate court should not substitute its opinion for that of the court below unless it is shown that the court below has acted on a wrong principle of law or that the valuation was erroneous. See Emerald Quarry Industries Pty. Ltd. v. Commissioner of Highways (S.A.) [1979] HCA 17; (1979) 142 CLR 351, at pp 355-356; Federal Commissioner of Taxation v. St. Helen's Farm (A.C.T.) Pty. Ltd. [1981] HCA 4; (1981) 146 CLR 336, at p 381, and the cases there cited.

6. The role of the Tribunal is different from that of the Court and the Tribunal is expressly authorised, as an administrative body, to substitute its own decision for that which is under challenge. However, this is a somewhat academic observation where the decision is one wholly comprised of an opinion that is the subject of expertise. Unlike in respect of some other jurisdiction exercised by the Tribunal, the Tribunal is not required to be constituted by or with a valuer when conducting a valuation review. Accordingly, it is appropriate to maintain the approach that the outcome arrived at will be one that either adopts a particular valuation that has been contended for by a party, or remits the question for reconsideration.

1. The issues to be determined with respect to this property are:

(a) Was the property required to be assessed by reference to its notional value?

(b) Which expert's application of the direct sales method is to be preferred?

(c) Was it appropriate to make adjustments to the values arrived at by the direct comparison method?

1. The task of the Tribunal is to determine the site and capital values that the Valuer-General should assign to the property. The Tribunal accepts that, by virtue of s 22A of the Act, the Valuer-General is required to assess this property by reference to its notional value. Notwithstanding that Ms Loftes did not apply s 22A, it appears not to have had any significant bearing on the valuations she arrived at because she valued the property as if its current use is its highest and best use.

1. There were at least four attributes of the Valley View property that meant that it compared less favourably to other properties that shared some attributes. They were:
   • Its steep topography
   • Its large size with a portion of unusable land
   • The contaminated state of the surface of the land
   • The poor state of repair of the buildings.
2. Having determined that the "contamination" was not a matter that triggered any requirement on the part of the hypothetical vendor, the state of the land surface was treated by Ms Elliott as an adverse attribute, but not one of great consequence. The hypothetical sale was to a hypothetical purchaser for residential purposes (either living in the existing dwelling or demolishing it and building another on the same block).
3. Ms Elliott took each of these adverse attributes into account when assessing whether comparable properties were judged to be inferior or superior to the subject property. As she observed, the sales prices of the comparators reflected the combination of adverse and favourable characteristics of each of them.
4. Having done so, she arrived at a value for the subject property, based on the comparators. She was not criticised by the applicant or by Ms Loftes for her choice of comparator properties.
5. Ms Loftes' comparators in relation to the site value were three vacant blocks. The first was larger than the Valley View property, located outside of the metropolitan area in Summertown, sold in July 2020 and had a gentle slope above road level. It's price per square metre was $79. The second comparator was a vacant block at Montacute, of similar size and with gentle side slopes. It was sold four months before the valuation date with a square metre price of $180. The third comparator was a considerably smaller vacant block than the subject property at Highbury, which sold in November 2021, which had gentle side slopes and fences in need of repair. It sold for a square metre price of $460.
6. I was not satisfied by Ms Loftes' account as to why she chose the Summertown property as the closest comparator. When put to her in cross-examination that the Montacute site had more similarities to the subject site, she said that she considered that the Summertown property was a better comparator but did not elaborate. It was further put to her that she had made assumptions about the land size at Summertown in terms of the amount of useable land. She conceded that she had not investigated the chosen comparators and did not know what proportion of the comparator sites were useable for development. As for the reason why she relied on a sale in July 2020 when there was an option to rely on one that occurred in September 2021, she was not able to give a reasons besides that of valuer's discretion. The comparators she rejected yielded higher prices per square metre. I was, on the other hand, persuaded that Ms Elliott gave appropriate emphasis to the location on the value of the subject site, and the market conditions in 2021. On this issue, she spoke authoritatively as to the effects of COVID-19 on the property market and the way in which sales prices grew throughout 2021. Ms Loftes did not demonstrate a close understanding of the way that economic trends had affected values of residential properties in the relevant period. It created a doubt in the Tribunal as to the weight that that should be placed on the Summertown sale, that had occurred in mid-2020, some 18 months before the relevant date and in the turbulent market conditions of COVID-19.
7. Ms Elliott's conclusion that the site value before improvements or adjustments were considered was $106 per square metre and the Tribunal prefers her approach and accepts that conclusion.
8. Ms Elliott then adopted a figure of $2,133 per square metre for the improved site. In undertaking the comparison approach, she took the view that the very poor state of the dwelling and other structures on the Valley View property required a valuation at the lower end of the range of properties she examined, and indeed she arrived at a price per square metre lower than any of the comparator properties she used, but only by a small margin. Ms Loftes chose a particular sale at Tea Tree Gully as the comparator but then made a discount from its $2,252 per square metre because of her view that the subject property was inferior. Her final figure was $2,085 per square metre.
9. The two conclusions as to capital value are almost the same, varying only by $48 per square metre, which is an amount that is negated by rounding. I find that each of the conclusions is defensible at that point.
10. The valuers departed from one another in respect of the question of deductions.
11. Ms Elliott did not apply any further discount to the value to account for the cost of remediation of the property, either by reference to the Royal Salvage quotation or by reference to the 2017 Proceedings or by reference to any other matter. To do so, she considered, would be to take account of the adverse contamination issue twice, because all of the relevant attributes of the properties had already been factored into the process of comparison.
12. I accept her reasoning that to do otherwise would entail a mixing of valuation methods. The contamination of the soil, to the extent that it existed, is an attribute of the property just as the poor state of the dwelling is an attribute. They are attributes that are considered when the comparison process occurs. They are not then given further work to do by way of further reduction in value, because to do so would amount to double-counting.
13. Ms Elliott observed that quotations for remediation and preparation of a site for building may be relevant to a value if it were performed on a development project basis. In such a case, the value is determined in large part by the cost of the development and the calculation of profits. This was not the basis of the valuation by either valuer.
14. Ms Loftes considered that it did not entail double-counting to deduct a portion of the Royal Salvage quotation from the value obtained after comparisons had been undertaken. Whilst I did not understand her evidence to give an explanation of why it did not amount to double-counting, she referred the Tribunal to the 2017 Proceedings in support of the making of a deduction from a provisional site value to reflect the cost of removing surface debris.
15. Therefore, it is necessary to examine the 2017 Proceedings in some detail in order to determine its application to the Tribunal's current task in these proceedings.

1. It is evident from the applicant's written and oral submissions that he considers that the Supreme Court's judgement in Bosnakis & Anor v Valuer-General was correctly decided and that the application of the reasoning in that decision to the applications currently before the Tribunal would lead to his success in these matters. Ms Loftes also referred to the decision in support of her approach to reaching site value and capital value for the Valley View property. It is therefore necessary to set out in some detail the evidence that was before the Court in that matter, and the reasoning adopted by the Court in reaching its conclusions.
2. The facts underlying the 2017 Proceedings were that the applicant challenged the assignment of capital value by the Valuer-General of land owned by the applicant and his wife at Para Hills West. The decision concerned the value of that land as at 1 January 2010. It was not their place of residence.
3. The land was situated in an industrial area, was 1.664 hectares in size, and had a bituminised car park, a 1980s building being used by up to four commercial tenants, and was surrounded by wire mesh fencing.
4. It was rented to a variety of industrial and commercial tenants over more than a decade. The dispute concerned the effect of the valuation of the land by reason of surface debris and alleged sub-surface contamination and a significant depth of uncontrolled fill.[117] The witnesses described rubbish across the site including car bodies and vehicle tyres, oil drums and demountable huts.[118]
5. The Valuer General initially found the property to have a capital value of $1,290,000. This figure was reduced to $1,050,000 following an objection by the Bosnakis'.
6. The valuation of $1,050,000 was the figure arrived at by an independent valuer appointed to a panel for the purposes of conducting review valuations. The Bosnakis' were dissatisfied and appealed the decision to the Supreme Court. At that time, an appeal to the Supreme Court was the avenue of review following the decision of a review panel member. Now, the review is to this Tribunal.
7. The proceedings entailed determination of an extension of time which does not bear on the current proceedings except insofar as there was a lengthy delay between the date of valuation and the time when the matter came on to be heard. In the intervening period, new evidence was gathered about the state of the land.
8. The Valuer-General's submissions to the review panel valuer defended the Valuer-General's valuation approach which was described as capitalisation of net input returns. Applying that method, the Valuer-General incorporated the cost of removing contaminants and debris and arrived at a capital value of $1,250,000.[119] The Valuer-General then compared that outcome with another available valuation method, direct comparison (as it was then known; now known as the comparable transactions method). In the direct comparison approach, the Valuer-General compared relevant sales and made a deduction for clean-up costs. This method led to a valuation of $1,171,000. Considering the two results, the Valuer-General submitted to the independent valuer, Ms Hawkes, that a value of $1,150,000 for the property was 'fair'.[120]
9. Subsequently, the Bosnakis' obtained a quote of over $4.2 million for remediation of the site.
10. The independent review valuer, Ms Hawkes, affirmed the review valuation of $1,050,000. She found that there was no evidence that or what remediation was required. She found, however, that the property would be "very difficult to sell" because of the lack of information about its state, in particular whether dangerous chemicals lay beneath the surface, and its unattractive appearance. She considered that without these negative attributes, the property would have a capital value of about $1.5 million, but that a discount of 30% should be applied to reach a realisable sale price.
11. Subsequently, the Bosnakis' obtained a site investigation report from engineers.
12. The Bosnakis' also obtained a further quotation from the same company that had provided the remediation quotation, for clean-up of the site, being lesser work than remediation, for $525,000. However, no testing for hazardous chemicals or sub-surface contamination was undertaken.
13. The Bosnakis' then retained an independent valuer, Mr McKay. Mr McKay proceeded on the basis of information received from the engineers that the land contained 1.1 metres of uncontrolled fill across the site and that it was unsuitable for development in that state. Mr McKay also accepted the quotation of remediation works of $4.2 million.
14. Mr McKay employed the direct comparison method of valuation.[121] He arrived at a figure of $1,497,600 as the capital value, subject to the need to deduct the cost of remediation. Mr McKay noted that it was not known whether there was hazardous contamination but that in the marketplace there would be a perception of a risk of hazardous contamination. After such a deduction, the result was a negative net value. He therefore concluded that remediation was not financially feasible but considered that there was a pool of potential purchasers who did not seek to develop the land but would use it in its current state (e.g. for storage).[122]
15. Mr McKay proceeded to discount the land value to take account of the selling difficulties that would arise, and then added the value of the improvements. This led him to a value of $625,000. This figure was a decrease from his original written opinion and he explained that he had not, in the original assessment, deducted for the uncompacted fill but had included the surface debris in his assessment of marketability.[123]
16. For the purposes of the proceedings, the Valuer-General obtained an expert report from an independent valuer, Mr Smithson.
17. Mr Smithson did not consider the net income method of valuation to be appropriate for this property and chose a comparable transactions approach. Mr Smithson noted that much of the land was unusable because of rubbish at the site including car bodies and vehicle tyres, oil drums and demountable huts.[124] Mr Smithson's oral evidence was that he took into account the fill in the valuation process and took into account the academic commentary in relation to the effect of site contamination on value from the Law Affecting Valuation of Land in Australia, 5th Edition, Hyam.
18. The text to which Mr Smithson referred contains a brief but helpful account on the approach to be taken to contaminated land that is consistent with the approach taken by Ms Elliott. In Hyam's General Principles of Valuation, the author refers[125] to Richter v Chief Executive, Department of Natural Resources.[126] In that case, the land was currently disposed of as industrial land that was listed as a "probable site" on a Contaminated Sites Register administered by the Government. The question arose as to the basis upon which the contamination should be treated in terms of value. The Court said that "until such time as the land ceases to be used for the purpose that it is presently being used, or a notice is issued under s 19 or s 20 of the Contaminated Land Act 1991 (Qld), the land should be valued for the purpose for which it is being used, that is, as industrial land."
19. After citing that authority, Hyam proceeds,

If the use of the site is for a purpose which conflicts with any possible contamination effects, then the purchaser of the site would either have to have the decontamination undertaken by the vendor, or be prepared to decontaminate the site himself. ... If the current use of the subject land continues for industrial purposes, then there would appear to be no case to require any further reduction in the valuation for probable contamination purpose.[127]

20. What is evident from those remarks and the case referred to is that 'contamination' in the way that it is being used in that discussion is contamination that would prevent, as a matter of law, a change of land use from occurring. The applicant in these proceedings, on the other hand, sought to apply the thrust of those statements to a land owner to remediate, or suffer a reduced value for, a property that has non-hazardous contamination such as uncontrolled fill. Those statements only support the proposition that contamination has an effect on value where the valuation is being undertaken in contemplation of a changed land use. This was the case in the 2017 Proceedings, where the pool of potential purchasers has substantially decreased by virtue of the contamination and reduced the use to which the land could be put.
21. Mr Smithson did not accept the De-Construct quote, a quote for works obtained by the appellants for remediation of the subject land,[128] but considered that a purchaser would have concerns about the land fill quality and that this affected what a purchaser would pay, particularly if planning to develop the site. He valued the site at $40 per square metre. He subsequently confirmed that opinion after reviewing Mr McKay's opinion, which he thought was too low. In his opinion, there was nothing particularly unusual about the extent of the uncontrolled fill when compared with other industrial sites in the vicinity.
22. The Judge observed that the two valuers had similar views as to the value of the improvements on the land but their opinions differed significantly on the site value because of the different approaches taken to surface debris. The Judge considered the submissions by the parties on the valuation method and accepted that the Court should not take an average of differing valuations, or extract some elements from one and others from another.[129]
23. The Judge accepted the evidence of both valuer witnesses that the engineer's report, written several years after Ms Hawkes' valuation, would have a "significant negative influence on the attitude of a purchaser".[130] Parker J therefore set aside Ms Hawkes' valuation as it had been provided prior to the fresh evidence received by the Court. His Honour found that:
    • There was a significant and obvious risk that the land had been contaminated by petrochemicals and a prudent buyer would take that likelihood into account;
    • Part of the land contains sub-surface rubbish but the precise extent of it was not known;
    • The risk of site contamination, and uncontrolled fill, would depress the price a purchaser would be willing to pay;

• The pool of potential purchasers was likely limited to those who would use the land for a low-value use and would be prepared to pay less;[131]
• The items of rubbish on the surface of the land are chattels and not fixtures;
• The surface debris was neither an improvement nor a worsement;
• The negative effect on the price that a purchaser would be willing to pay because of the expense of removing the surface debris should to be taken into account in determining the site value;[132]
• The same propositions were applicable to the property's capital value.

1. By this reasoning, the Judge adopted the valuations of Mr McKay, being $416,000 for the site value and $625,000 for the capital value of the property.
2. It is important to note that the 2017 Judgement distinguishes between "contamination" and "surface debris" by referring to both. In the case that was before the Court, there was evidence about the risk of sub-surface contaminants because of the use to which the land had been put, and evidence about surface debris such as the things that had been left lying on the surface of the land. It is less clear which of these categories included uncontrolled fill. Parker J said,

"I remind myself that when the effect of surface debris and contamination on the valuation of the subject land is determined, only debris and contamination that was present as at the Valuation Date can be taken into account."[133]

3. The evidence before the Court was that the former tenants had included concrete and steel manufacturers, a car wrecking yard, two bus companies, landscapers, earth moving contractors, gas contractors, two fibreglass pool companies, motor mechanics, white goods recyclers and crash repairers.[134]
4. Mr Bosknakis' own evidence in the 2017 Proceedings was that the surface debris showed "a great variety and volume of items deposited on the subject land, including tyres, concrete pipes, rubble, a large concrete slab, a septic tank, car parts, white goods, polystyrene foam, pallets, sheets of metal, used oil drums and a fibreglass pool shell."[135]
5. Further, the witnesses spoke of the distinction between hazardous contamination, and contamination more generally. The evidence of the likelihood of hazardous contamination of the subsurface was stronger in the 2017 Proceedings than in relation to any of the three properties that are the subject of the proceedings before this Tribunal.
6. It is evident from the description of the evidence of the expert witness in the 2017 Proceedings, and the evidence of Ms Elliott in the proceedings before the Tribunal, that in relation to all forms of contamination, namely surface debris, uncontrolled fill of a non-hazardous nature, and hazardous sub-surface contamination, the significance to valuation depends on the purpose for which the property may be put by potential purchasers. This in turn is determined by the zoning, other attributes of the property, and whether the range of uses is limited by the presence of hazardous sub-surface contamination.
7. In the 2017 Proceedings, the valuer Mr McKay proceeded on the assumption that the subject land was free of contamination from hazardous materials but that the presence of the uncontrolled fill together with the past and present uses of the land would create a perception that there is an inherent risk of more serious contamination.[136] He concluded that remediation would not occur because of the cost and that the pool of purchasers was that which intended to use the land for a purpose that did not depend on a "clean" site.[137]
8. The two independent valuers both proceeded on the basis that the surface debris and perception of the risk of hazardous contaminants significantly reduced the pool of potential purchasers.[138] In effect, their evidence was that the highest and best use of the land was as a storage site or wrecking yard, rather than as an industrial or commercial tenancy.
9. Ultimately, it was the narrow use to which the land could be put in light of the risk that there was sub-surface hazardous contamination, and the "vast amount of surface debris", that depressed the value of the land and made it appropriate to apply a discount.[139]

Applicability of the 2017 Proceedings to the valuation of the Valley View property

1. In relation to the Valley View property, the valuers agreed that the highest and best use of the land was its current use, namely a residential dwelling sited on three blocks. In the circumstances giving rise to the 2017 Proceedings, the pool of potential purchasers was substantially reduced by the valuer's conclusion that, because of the defects in the property, the highest and best use was a very limited one. Those circumstances create a relevant distinction between the 2017 Proceedings and the valuation of the Valley View property, where the size of the pool of potential purchasers is not affected by the defects that the applicant says are present. This is because the pool of potential purchasers is determined by the use that the valuers assign for the purpose of the valuation. In relation to the Valley View property, the use for valuation was the same as its current use, namely, sale as a residential block to house a single dwelling.
2. Secondly, the evidence provided by the Bosnakis' as to the defects of the property in the 2017 Proceedings was sufficient to enable the Court to conclude that there was uncontrolled fill of around one metre across a portion of the site. There was also a "vast quantity" of unusable chattels and waste on the site, greater than would usually be expected of a commercial or industrial site. This led the expert witnesses, and the Court, to agree that the subject property was significantly inferior to all of the comparators.
3. The applicant did not establish, in respect of the Valley View property, that the defects at the property were ones that were of such consequence as to affect the value beyond the ordinary contribution that the defects made to the comparison process. The applicant did not establish that the attributes of the property were sufficiently significant to require special treatment by way of a deduction to account for required remediation, by law, or in order to attract a purchaser.
4. Thirdly, to the extent that there were defects in the site and in the improvements at the Valley View property, both valuers took those into account in determining value. In that sense, where there is to be a deduction for extraordinary features, it becomes necessary to ensure that there is not double-counting if the direct comparison transaction method is employed. Sometimes an attribute will require a deduction, and on occasion the attribute so narrows the potential pool of purchasers that there is no pool of comparators and the property is sui generis. That is the dilemma that faced the court in CSR Limited v Valuer-General[140] in which the only potential purchaser was the current owner because the site was wholly occupied by a sugar refinery that could not economically viably be dismantled, and a monopoly market led to an absence of other buyers.
5. Finally, the applicant did not establish that he was obliged to take any steps by way of remediation, from a legal or a market perspective, in order to be able to sell the property if he wished.
6. For these reasons, the 2017 Proceedings do not establish that, in relation to the Valley View property, there was an obligation on the valuers to discount the valuation further than had already been done, to take account of the negative attributes of the property. Further, when the circumstances of the cases are compared, it is evident that the basis on which a discount was applied in the 2017 Proceedings does not apply to the valuation task that was required for the Valley View property.
7. I reject Ms Loftes' reasoning that the state of the property was such as to require a further discount after comparison. I prefer the evidence of Ms Elliott that there was nothing remarkable about the Valley View property that required further discount after the comparison process with relevant recent sales had been undertaken.

Valuations with respect to different properties

1. In addition to submitting that the Tribunal should follow the approach taken in the 2017 Proceedings, the applicant asked the Tribunal to consider the valuation approach taken by other valuers to other properties owned by him. He submitted that the Valuer-General had, in reaching valuations for other properties he owns, relied on valuations that approached the matter in the same way as had been taken in the 2017 Proceedings. The applicant provided various documents concerning different properties.[141]
2. The fact that another valuer has taken a different approach to the valuation of a different property, even a valuer whose opinion has been relied upon by the respondent, is not evidence that either of the approaches is wrong, or that the respondent is obliged to adopt a particular valuation method in any particular case. In any event, the documentation provided was not capable of establishing the approach or the reasoning behind it in any of those other matters.
3. What the applicant was required to do in this case is show that Ms Elliott's approach to valuing these three properties was flawed and that it did not reach the correct or preferable conclusion as to their value. The applicant did not, merely by providing examples of different approaches, establish that.

1. The applicant's submissions also reveal that, as investment properties, he considers the rates applicable to the land to be "liabilities" that erode the profit he extracts from the properties at sale. He provided a hand-prepared graph (exhibit A1, which was later updated as an attachment to the applicant's closing submissions), which purported to demonstrate the increase in costs associated with the properties over the period of ownership. The applicant submitted that liabilities are increasing at a rate greater than the value of the property. On this basis, he submitted that it was not "fair" to impose valuation that did not reflect what the properties were actually worth, and not "fair" to expect him to bear the cost of the additional liabilities associated with the valuations. Whilst some might sympathise with this dilemma that the applicant faces, there is no evidence or principle to support the proposition that the Valuer-General, or any valuer, is to take into account a land-owner's costs when determining value.

Summary in relation to the Valley View property

(a) The Tribunal finds the evidence given by Ms Elliott to be persuasive as to why she adopted the approach she did, and as to the conclusions she reached;

(b) The Tribunal does not accept the approach taken by Ms Loftes and rejects her valuation;

(c) The Tribunal does not consider that the 2017 Proceedings establish any proposition that requires the Tribunal to adopt a particular valuation approach in these proceedings;

(d) The Tribunal does not consider that other valuers have valued properties owned by the applicant using different methods, if that has occurred, it establishes that the values reached by Ms Elliott are not correct or preferable for the Valley View property;

(e) The Tribunal accepts the valuation of Ms Elliott that the capital value of the property at Valley View is $780,000 and the site value is $490,000 as at 1 January 2022.

1. On the second day of the hearing, the valuers were each taken through their reports and reasoning for reaching their respective valuations in relation to the Burnside properties. The Tribunal first considers the first property at Burnside.
2. The issues to be determined in relation to this property was:
   • Which of the experts' comparison processes yielded the appropriate quantum price or price per square metre for this property?
   • Do the 2017 Proceedings have any applicability to this valuation?
   • What is the relevance, if any, of an offer to purchase the property?
   • Was it appropriate to make deductions for the defects in these sites from the values reached after comparing with relevant sales?
3. The experts differed in respect of two matters: the price per square metre and whether further adjustments to the values reached by the comparable transactions method were needed.
4. Ms Elliott reached a value of $821 per square metre for this property after undertaking comparisons of other properties with similar attributes sold in the year prior. Her value was achieved by establishing the range of quantum prices from the most similar properties by reference to attributes known about all of them, and then placing the subject property within the range. She placed it at the lower end of the range because its larger size was a slightly negative attribute (though it was not as oversized as the Valley View property) and because of its comparably undesirable main road location.
5. Ms Elliott's approach to achieving the price per square metre from comparable properties was not criticised by Ms Loftes or by the applicant. It accords with the aim of determining value by reference to like properties by reference similarities and differences known about all of the properties.
6. Ms Loftes reached a provisional value of $732 per square metre for this property after undertaking a comparison of it with other properties. I was not persuaded by the approach taken by Ms Loftes because she gave an insufficient explanation as to why the figure she arrived at was significantly lower than all four of the comparators she used. It appeared that the reason was the inferior state of the subject property because of the defects she had identified. However, Ms Loftes agreed in cross-examination that she did not know whether the comparator properties had the same or other defects because she had not inspected the comparator sites and did not know all of their attributes.[142] In particular, she did not know whether they carried the same defects as the first Burnside. This was unsatisfactory because there was no basis upon which to take into account attributes of the first Burnside property that were not known about the comparators.
7. However, the differences between the valuers in the process of comparing properties, and the resulting square metre value, was overshadowed by their difference of opinion about the need for a further adjustment.
8. As has been described earlier, Ms Loftes considered that it was appropriate to deduct from the provisional values reached by the comparable transactions method, the indexed costs of the McMahon Services remediation quotation, or alternatively, to apply a discount of 30%.
9. I reject Ms Loftes' approach to adjustment in respect of this property. Unlike the property under consideration in the 2017 Proceedings, the land use for the first Burnside property has not been limited by the alleged defects at the site. It is still a residential development site.
10. There was no evidence before the Tribunal that, as a residential development site, it was in a state that was relevantly different from the comparator properties. It was not burdened with a significant amount of surface debris. There was no evidence that the property had been used in a manner that meant that that it would give rise to any particular concern in a buyer that it would be more expensive to develop than the comparator sites. I accept Ms Elliott's evidence that although the house would need to be demolished, there was nothing in particular about the first Burnside property that took it outside of the range of sites that it was being compared to.[143] I accept her evidence that demolition costs are not a special category of defect that depress the price of properties that are being valued as a residential development site.[144] This includes the presence of the unfortunately all-too-common asbestos in parts of a building of that era.
11. It is not to the point that, with respect to valuations of other properties, other valuers have made adjustments after comparable transactions have been analysed. The Tribunal is persuaded by, and accepts, Ms Elliott's evidence that the quality of the comparator pool, and the unremarkable characteristics of the first Burnside property, permitted the comparable transactions method to provide a valuation without recourse to adjustment.
12. I have also considered the applicant's submission that the Tribunal should take into account an offer that was made to purchase the property (along with the second Burnside property) for $860,000 in date. The applicant contended that the fact that the prospective purchaser had viewed the sites on several occasions but had not proceeded to purchase the properties to be support for his contention that the properties had evident defects making them difficult to sell. The applicant did not put forward any evidence of any marketing campaign he had undertaken in an attempt to sell the properties, and it is not clear whether the offer was unsolicited.
13. The details of the offer were contained in a brief email from an individual. The presentation and content of the email was not sophisticated or particularly business-like. There is simply no other evidence before the Tribunal as to why the individual ultimately decided not to proceed to purchase the property. The possible reasons are many. I do not consider that the Tribunal can draw any conclusions as to why the offer was made in the amount that it was, and why the potential purchaser did not proceed. It does not assist the Tribunal in assessing the experts' opinions.
14. I accept that Ms Elliott's valuation assigns the correct or preferable site and capital values of $750,000 for the first Burnside property as at 1 January 2022. The Valuer-General's values will be affirmed accordingly.

1. The same reasoning as has been set out above in respect of the first Burnside property is largely applicable to the next-door property.
2. The site of the second Burnside property is 951 m2 in size, somewhat larger than the first Burnside property. The dwelling on the site, although not built in the same period as the dwelling on the first Burnside property, was equally decrepit and requires demolition.
3. Ms Elliott's approach to assessing value for this site was identical to that she used for the first Burnside property, including using the same comparator properties, and the only difference in outcome reflected the small size difference in the property.
4. Ms Loftes reached a provisional value of $732 per square metre for this property after undertaking comparisons of other properties.
5. For the reasons set out above in relation to the first Burnside property, I prefer the explanation of the comparison process that was provided by Ms Elliott over that which was provided by Ms Loftes. In the identification of a quantum value or value per square metre, I reject Ms Loftes' approach insofar as it considered attributes about the subject property that were not known about the comparators. Further, I accept Ms Elliott's evidence that there is nothing remarkable about the second Burnside property that requires an adjustment to the value to account for special defects at that site.
6. I accept Ms Elliott's site and capital valuations for the second Burnside property as at 1 January 2022, as $780,000. As this aligns with the original decisions of the Valuer-General in respect of these properties, I affirm those decisions.

1. The Tribunal varies the notional site value assigned by the Valuer-General for the Valley View property as at 1 January 2022, such that the notional site value is $420,000.
2. The Tribunal affirms the notional capital value assigned by the Valuer-General for the Valley View property as at 1 January 2022 such that the notional capital value is $800,000.

1. The Tribunal affirms the decision of the Valuer-General that the site and capital values for the first Burnside property as at 1 January 2022 are each $750,000.

1. The Tribunal affirms the decision of the Valuer-General that the site and capital values for the second Burnside property as at 1 January 2022 are each $780,000.

[1] Valuation of Land Act 1971, s 11.

[2] Valuation of Land Act 1971, s 24.

[3] Valuation of Land Act 1971, s 25(1).

[4] Valuation of Land Act 1971, s 25B(6).

[5] Valuation of Land Act 1971, s 25C(1).

[6] Section 35 Book of Documents for 2022/SA003741, page 12.

[7] Section 35 Book of Documents for 2022/SA003741, pages 7-10.

[8] Elliott report on the Valley View property, page 20.

[9] Section 35 Book of Documents for 2022/SA003748, page 16.

[10] Elliott report on the Valley View property, page 20.

[11] Section 35 Book of Documents for 2022/SA003756, page 16.

[12] Elliott report on the Valley View property, page 24.

[13] Elliott report on the Valley View property, Page 7.

1. [15] It is not clear when the inspection occurred but there is an error in the recording of the date because it must be assumed to have occurred prior to the writing of the report.

[16] Loftes report on the Valley View property, page 2.

[17] Loftes report on the Valley View property, page 21.

[18] Elliott report on the Valley View property, page 8.

[19] Loftes report on the Valley View property, page 12.

[20] Elliott report on the Valley View property, page 4.

[21] Transcript 29 February 2024, 11.28 am.

1. [22] Elliott report on the Valley View property, page 13; Loftes report on the Valley View property, page 33.

[23] Transcript 29 February 2024 at 11.18.

[24] Section 35 Book of Documents for 2022/SA003741, page 32.

[25] Elliott report on the Valley View property, page 8.

[26] Elliott report on the Valley View property, page 8.

[27] Transcript 29 February 2024 at 3.36.

[28] Transcript 29 February 2024 at 11.16.

[29] Loftes report on the Valley View property, page 15.

[30] Transcript 29 February 2024 at 15.04.

[31] Transcript 29 February 2024 at 14:26

[32] Elliott report on the Valley View property, page 9.

[33] Elliott report on the Valley View property, page 9

[34] Elliott report on the Valley View property, page 9.

[35] Transcript 29 February 2024 at 14:15

[36] Loftes report on the Valley View property, page 13.

[37] Loftes report on the Valley View property, page 13.

[38] Transcript 29 February 2024 at 11:12.

[39] Loftes report on the Valley View property page 13.

1. [40] She described the quotation as setting out "the potential costs and what work must be undertake (sic) to remedy the liabilities and what work is recommended be undertaken in the attempt to rectify and stabilize the entire site."

[43] Loftes report on the Valley View property page 10.

[44] Loftes report on the Valley View property page 2; page 23

[45] Loftes report on the Valley View property page 21.

[46] Loftes report on the Valley View property, pages 2-23.

[47] Transcript 29 February 2024 12:43.

[48] Elliott report on the Valley View property page 13.

[49] Elliott report on the Valley View property, page 13.

[50] Transcript 29 February 2024 at 14:23

[52] Elliott report on the Valley View property, page 15.

[53] Elliott report on the Valley View property, page 15.

[54] Elliott report on the Valley View property, page 15.

[55] Elliott report on the Valley View property, page 2.

[56] Elliott report on the Valley View property, page 17.

[57] Transcript 29 February 2024 at 11.54.

[58] Transcript 29 February 2024 at 11.36.

[59] Transcript 29 February 2024 at 11.47.

[60] Transcript 29 February 2024 at 11.59.

[61] Transcript 29 February 2024 at 12.21.

[62] Transcript 29 February 2024 at 12.18.

[63] Transcript 29 February 2024 at 14.52.

[64] Transcript 29 February 2024 at 14.52.

[65] Transcript 29 February 2024 at 14.52.

[66] Transcript 29 February 2024 at 14.23.

[67] Transcript 29 February 2024 at 14.53.

[68] Transcript 29 February 2024 at 14.22.

[69] Transcript 29 February 2024 at 14.54.

[70] Transcript 29 February 2024 at 14.57.

[71] Transcript 29 February 2024 at 11.43.

[72] Transcript 29 February 2024 at 11.02.

[73] Loftes report on the Valley View property, page 15.

[74] Loftes report on the Valley View property, pages 16-18 inclusive.

[75] Transcript 29 February 2024 at 10.56.

1. [76] Ms Hawkes was the valuer provided the first valuation in the 2017 Proceedings. The quotation provided by Ms Loftes is in fact a summary of Ms Hawkes' evidence by Parker J.

[77] The words in parentheses were omitted from Ms Loftes' extract but appear in the original.

[78] Loftes report on the Valley View property, page 19.

[79] Transcript 29 February 2024 at 12.22.

[80] Transcript 29 February 2024 at 12.23.

[81] Transcript 29 February 2024 at 12.31.

[82] Transcript 29 February 2024 at 12.54.

[83] Transcript 29 February 2024 at 11.01

[84] Elliott report on the first Burnside property, page 2.

[85] Section 35 Book of Documents for 2022/SA003748, page 9.

[86] Elliott report on the first Burnside property, page 8.

[87] Loftes report on the first Burnside property, page 11.

[88] Elliott report on the first Burnside property , page 8.

[89] Loftes report on the first Burnside property, page 2.

[90] Loftes report on the first Burnside property, page 2.

[91] Loftes report on the first Burnside property, appendix 4.

[92] Elliott report on the first Burnside property, page 13.

[93] Loftes report on the first Burnside property, page 11.

[94] Elliott report on the first Burnside property, page 8.

[96] Loftes report on the first Burnside property, page 12.

[97] Elliott report on the first Burnside property, page 8.

[98] Loftes report on the first Burnside property, page 2.

[99] Loftes report on the first Burnside property, page 28.

[100] Elliott report on the first Burnside property, page 13.

[101] Elliott report on the first Burnside property, page 13.

[102] Elliott report on the first Burnside property, page 14.

[103] Loftes report on the first Burnside property, pages 23-26 inclusive.

[104] Loftes report on the first Burnside property, page 27.

[105] Transcript 1 March 2024 at 14.12.

[106] Loftes report on the first Burnside property, page 29.

[107] Loftes report on the second Burnside property, page 2.

1. [108] Elliott report on the second Burnside property , page 13; Loftes report on the second Burnside property, page 33.

[109] Elliott report on the second Burnside property, page 10.

[110] Elliott report on the second Burnside property, page 8.

[111] Elliott report on the second Burnside property, page 8.

[112] Loftes report on the second Burnside property, page 19.

1. [113] Bargwanna Pty Ltd & Anor v Valuer-General for the State of South Australia [2011] SASC 67 at [6] per Kourakis J (as he then was).

[114] [2006] SASC 217 at [33].

[115] Minister for Environment v Florence (1979) 21 SASR 108.

[116] Valuer-General v Fenton Nominees Pty Ltd [1982] HCA 46; (1982) 150 CLR 160.

[117] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [3].

[118] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [46].

1. [119] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [18].
2. [120] Ibid at [19].
3. [121] As described by Ms Elliott in her various reports, the Direct Comparison Method is now referred to as the Comparable Transactions Method.

[122] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [38].

[123] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [40].

[124] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [46].

[126] (1998) 19 QLCR 274.

[129] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [93].

[130] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [95].

[131] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [101].

[132] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [111].

[133] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [13]. See also [42].

[139] Bosnakis & Anor v Valuer-General [2017] SASC 158 at [112].

[140] (1977) 17 SASR 446.

[141] Annexed to the applicant's written submissions were valuations provided in respect of properties at Port Adelaide and Paralowie.

[142] Transcript 1 March 2024 at 10.47.

[143] Transcript 1 March 2024 at 14.26.

[144] Transcript 1 March 2024 at 14.26.