Falk v Valuer General

Falk v Valuer General - [2005] NSWLEC 141 - NSWLEC 2005 case summary — Zoe

[26]

31 I therefore turn to the approach taken both as to proposed outcome and evidentiary base put to me on behalf of the Valuer General. 32 In doing so, I turn to the second matter that I raised on the site during the course of the view. This was to ask Mr Bartley what submissions he had instructions to make to me with respect to the valuation derived by Mr Stibbard of $275,000 on the basis of Mr Stibbard's interpretation of the comparable sales amounts. 33 Although, Mr Bartley was not able to obtain immediate instructions, he subsequently informed me and Mr Falk that his instructions were to contend that I should exercise my discretion pursuant to s 40(1)(b) of the Act and substitute a determination of $275,000 for that which had been made as part of the statutory valuation process. 34 Although general notice of the possibility that some higher valuation might be imposed was given to Mr Falk by letter dated 11 November 2004 under the hand of Mr Bartley's instructing solicitor, which effectively drew Mr Falk's attention to the provisions of s 40(1)(b) of the Act and to a decision of Watts C in Marcus Cornelius Noorbergen v Valuer General [2004] NSWLEC 243 where Watts C had substituted a higher valuation. 35 Mr Bartley properly conceded that at no time prior to the notification to Mr Falk and me that he was instructed to contend for a valuation of $275,000 was Mr Falk given any notice that such contention was specifically intended in these proceedings. 36 That is a matter which, although perhaps not specifically relevant to my assessment of Mr Stibbard's evidence, is a matter which is appropriate for me to consider both on my exercise of discretion pursuant to s 40(1) and on my exercise of the discretion invested in me (subject to the concurrence of the Chief Judge pursuant to s 69(8) of the Land and Environment Court Act 1979 (the Court Act) to propose for the Chief Judge's concurrence an order for costs pursuant to Pt 16 r 4(1)(C) and Pt 16 r 4(2) of the Land and Environment Court Rules 1996 (the Rules).

[34]

52 That leaves me with the valuations of the properties at 40 Chisholm, 16 Sims and 39 Taylor Street. 53 Mr Stibbard, although giving a slightly differing rate of depreciation for the existing structure on 39 Taylor Street, takes the value of the improvements on each of the properties; makes an adjustment for obsolescence; makes an adjustment for what he says is the appropriate rate for ground improvements and derives a rate per sq m, which he has regard to in concluding what he says should be the appropriate rate per sq m for the site. 54 As I understand Mr Falk's contentions with respect to Mr Stibbard's proposals, he suggests that Mr Stibbard is not making a sufficient and adequate deduction both by the process of depreciation of the improvements on the site and by the process of allowance for ground improvements and other features such as balconies and the like. 55 I have, therefore, undertaken some calculations, which are purely arithmetical in nature, to see what would be on the position for each of these properties by: - valuing the improvements at approximately $3,000 per sq m (which appears to be agreed between Mr Falk and Mr Stibbard) and seeing what would be the value adjusted for time assuming that the totality of the improvements on each of those three sites were taken as a deduction; and - taking as a deduction for other improvements, including the ground improvements and extra features of each comparable an amount of $40,000 (which I understand is, at least in two of the instances, contended for by Mr Falk and may be contended for in the third - his material being somewhat difficult to follow in this regard). 56 As a consequence, if I apply that process to 40 Chisholm Street in lieu of the derived value of Mr Stibbard of $5,214 per sq m, I calculate that the value would be ~ $4,290 per sq m. 57 Applying the same process to the sale at 16 Sims Street in lieu of $5,623 per sq m, the most advantageous calculation I could derive for Mr Falk would be ~ $3,514 per sq m. 58 Finally, applying the same process to the supplementary valuation provided by Mr Stibbard with respect to Taylor Street in lieu of the $5,430 per sq m contended for by him, I would come to a valuation of ~ $4,195 per sq m. 59 I am not suggesting by undertaking those calculations that those figures are the correct figures for those sites. What I have undertaken is to seek to establish, in my own mind, by applying Mr Falk's methodology as I understand it, what would be the most advantageous outcome to Mr Falk based on Mr Stibbard's comparable sales. 60 On my calculation they would come to a range between approximately $180,000 and $216,000 for the site. 61 I have not adopted those rates per square metre as being correct, I have simply sought to establish in my own mind, if I accept Mr Stibbard's approach (which is the approach consistently applied by this Court in considering comparable sales material) what would be the best range that is available to Mr Falk. It is clear from that range that Mr Falk's contention that a valuation of $170,000 is too high must necessarily fail.

[35]

62 I then turn to what should be the outcome in the exercise of my discretion pursuant to s 40 of the Act. 63 I have carefully considered the fact that Mr Bartley's instructing solicitor put Mr Falk on notice by letter of 11 November that an option available to me is to substitute a higher decision were I minded to do so. 64 The analytical process that I have so far set out is not based on what might be a correct valuation if Mr Stibbard's methodology were to be followed, but merely to establish what might be the best position in support of Mr Falk's case on Mr Stibbard's information. 65 I am satisfied that, although s 40(2) of the Act places the specific onus on the appellant of proving his case, his case in these proceedings is limited to a contention that the valuation in the notice of valuation is too high. 66 I am satisfied that as a matter of law, if the Valuer General proposes to contend for a valuation that is higher than that which is contained in the statutory notice, the provisions of s 40(2) do not apply to that contention and that the onus to establish a higher valuation shifts to the Valuer General. 67 That contention must be, if agreed with, found to the degree of satisfaction on the civil standard of proof that I would be required to have in conformingly with the decision of the High Court in Brigenshaw v Brigenshaw 1938 60 CLR 336, that is the degree of comfortable satisfaction given the consequences of the decision for the person about whom it is being made. 68 I am satisfied that the material that has been provided by Mr Stibbard is such that, as previously indicated, Mr Falk has not made out his case. 69 Mr Stibbard however was not able to visit any of the sites and undertake a specific assessment of the improvements contained thereupon. 70 As the lower end of the best range of valuations to Mr Falk of the comparable sales information on my calculations, is ~ $177,000, I am satisfied that that is not sufficiently disparate to that contained in the notice to cause me to substitute a higher valuation if I were minded to do so.

[38]

75 I note, however, in this context that by letter dated 15 December 2004 Mr Bartley's instructing solicitor specifically put Mr Falk on notice of the possibility or probability that there would be an application for costs if the Valuer General were successful. 76 Given the fact that Mr Falk was not given notice of the specific contention for the higher valuation contained in Mr Stibbard's report and the fact that the Valuer General has failed on this issue, I do not consider that it would be fair and reasonable as is the test in Pt 16 r 4 of the Rules for me to make an order for costs against Mr Falk in these proceedings. 77 There is no specific statutory guidance as to what might be those matters that I should follow. It is certainly a position that, unlike the principle laid down by the High Court in Latoudis v Casey (1990) 170 CLR 534 that costs should ordinarily follow the event, there is a higher threshold but it is not as high as the previously existing threshold of exceptional circumstances that had been applied in these classes of proceedings in this Court. 78 In a decision in mid 2004 I canvassed some of the matters arising out of a somewhat comparable position applying in the Victorian Civil and Administrative Tribunal that contains some statutory guidance to that Tribunal as to how costs might be awarded if it were reasonable to do so (see Funtime Investments Pty Limited v Yass Valley Council [2004] NSWLEC 300). 79 There is also a considerable degree of authority in the Administrative Decisions Tribunal of this State on a test which is somewhat more strict of compliance than the fair and reasonable test in these proceedings (e.g see Brooks Maher v Cheung [2001] NSWADT 18 re s 88(1) of the Administrative Decisions Tribunal Act 1997). 80 I am not satisfied that there is anything in Mr Falk's conduct that would constitute inappropriate procedural behaviour that would trigger me regarding his conduct as warranting the payment of costs. 81 His sense of grievance as I indicated earlier, and in this regard it is important to note that he is an applicant in person and (noting I upheld Mr Bartley's objection to the basis of part of his evidence) he is not a valuer and therefore his analysis of valuations has to be taken by me, as Mr Bartley properly drew my attention to in the objection, on the basis of it being a lay interpretation. I am satisfied that Mr Falk had and has a genuine sense of grievance on the basis of the comparable statutory valuations. Although this does not provide a legal basis for his appeal, I would therefore go so far as to say not only is it not fair and reasonable that there be an order for costs against Mr Falk, but that if I were to propose such an order to do so would be unfair and unreasonable.

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Judgment (41 paragraphs)

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