Considering both the previous decisions of the Tribunal in Re AKS, and of the Supreme Court in Bargwanna Pty Ltd v Valuer-General, the Tribunal found that an application under s 25C should be considered de novo and that the applicant must satisfy the Tribunal that different valuations should have been made, but need not demonstrate error in the original decisions.

The applicant submitted that the Tribunal should apply the principles of 'relativity and consistency' by using values assigned to other comparable pieces of land within in the same local government area. The applicant obtained a report from a valuer using that methodological approach. He further argued that the valuation reached should subtract the value of particular buildings and their associated amenities that he built on the land.

The Valuer-General submitted that 'relativity and consistency' are not valid principles of valuation pursuant to both the Act and industry practice. Moreover, the Valuer-General submitted that the Tribunal is limited in its decision-making by a requirement under s 25B that the valuation may only be altered if it is found that it should be increased or decreased by more than 10%.

1. Although a valuer performing a valuation under s 25B of the Act can only alter a valuation if it is found that it should be increased or decreased by more than 10%, the Tribunal is not bound by this requirement when reviewing a decision pursuant to s 25C;
2. The applicant's methodology of calculating the site and capital values by subtracting the cost of buildings is not consistent with the definitions of 'site value' and 'capital value' under the Act;
3. The proposed method of using 'relativity and consistency' should not be adopted as this methodology has been rejected in previous case authority; and
4. The Tribunal is satisfied that the 'capitalisation of net income' and 'direct comparison' valuation approaches applied in the Site Value Objection Analysis Report and Capital Value Objection Analysis Report represent the use of ordinary valuation principles.

Administrative Review - Valuation of Land Act 1971 - Decision by Valuer-General upon an objection

Administrative Review - Valuation of Land Act 1971 - Review conducted as appeal de novo - General principles

South Australian Civil and Administrative Tribunal Act 2013 ss 34, 37, 39

Valuation of Land Act 1971 (SA) ss 5, 25B, 25C

Re AKS [2016] SACAT 19

Farah v Valuer-General [2015] SACAT 7

Pyman v Valuer-General [2016] SACAT 1

Bargwanna Pty Ltd v Valuer-General [2011] SASC 67

Mr S O'Flaherty, Crown Solicitor's Office, appeared for the Respondent

Made under the South Australian Civil and Administrative Tribunal Act 2013 (SA) s 37(1)(a); Valuation of Land Act 1971 (SA) s 25C(3)(b)

1. The issue for the Tribunal to determine, de novo, is whether the Valuer-General should have made different decisions when on 29 October 2019 she refused to amend the site valuation of $960,000.00 and the capital valuation of $1.3 million that had been ascribed to the property at 29-29B Unley Road, Parkside with a valuation date of 1 January 2019.
2. The registered owner of 29-29B Unley Road is Mrs Paula Martin. She is represented in the Tribunal by her son, Mr Con Martin. There was no objection to him representing his mother in the proceedings.
3. Mr Martin has brought an application under s 34 of the South Australian Civil and Administrative Tribunal Act 2013 (SA) (the SACAT Act) for review of the Valuer-General's decisions made on Tuesday 29 October 2019. The application was brought within the time specified by s 25C(3)(a) of the Valuation of Land Act 1971 (SA) (the Act).
4. The application came on for hearing on 9 October 2020. During the hearing, Mr Martin and the valuer Mr Matthew Ruiz of Land Services SA gave evidence. Mr Ruiz had provided a written report. Both parties made submissions in which there was reference to further valuation reports of Mr Jeremy Carter of McLean Gladstone, Mr Tom Reed of Land Services SA and Mr Aaron Campbell of Valuations SA.
5. Mr Martin objects to the site valuation of $960,000.00 and the capital valuation of $1.3 million. He submits that the Tribunal should apply the principles of 'relativity and consistency' to reduce the valuations. He submits that the site value is 'in the vicinity of $750,000.00' and that the capital value 'should be about $1,100,000.00'. He further submits that "my rates and taxes for 29 Unley Road have gone from $8,800 per year to $ 17,100 per year" which he describes as "a massive increase and shock in one blinding moment".
6. The submission on behalf of the Valuer-General was, in broad terms, that her decisions should be affirmed and that 'relativity and consistency' are not valid principles of valuation pursuant to the Act and valuation practice in South Australia.
7. It was also submitted on behalf of the Valuer-General that on a review under s 25C of the Act, the Tribunal is constrained by the requirement that an error of more than a 10% increase or decrease in the valuation must be demonstrated by the applicant.[1] I do not accept that submission. It overlooks the words of s 25C(3)(c) that "without limitation, a variation made by SACAT on the review of a valuation may consist of an increase or decrease in the valuation". I do not accept that the Tribunal's task on a review under s 25C is governed in any way by the alternative review avenue set out in s 25B where s 25B(10) provides "a valuer must not make any alteration to a valuation under subsection (9) which has the effect of increasing or decreasing the valuation by a proportion of one-tenth or less". I do not accept that to say this is "to construe the Tribunal's jurisdiction differently depending on whether an applicant has elected to seek a review [under s 25B] first or not".[2]
8. Counsel for the Valuer-General pointed out that s 25C(3)(b) of the Act, which provides that "in the exercise of [its review] jurisdiction, SACAT will consider the matter de novo". This contrasts with s 34(3) of the SACAT Act provides that "subject to ss (4), (5) and (6), the Tribunal will, in exercising its review jurisdiction, examine the decision of the decision-maker by way of rehearing".
9. Section 34(4) of the SACAT Act contains the requirement that "on a rehearing, the Tribunal must reach the correct or preferable decision but in doing so must have regard to, and give appropriate weight to, the decision of the original decision-maker". Section 34 is silent about what the Tribunal's responsibility is on a hearing de novo as opposed to on a rehearing.
10. The then-President of the Tribunal considered the nature of an appeal de novo in Re AKS[3] in the context of distinguishing an appeal de novo from an internal review conducted pursuant to s 70 of the SACAT Act. He distinguished an appeal de novo from an appeal by way of rehearing, such as an internal review under s 70. He said that "the requirement that appropriate weight must be given to the decision at first instance distinguishes an internal review from an appeal de novo. In an appeal de novo the decision at first instance would not be relevant because the court decides the matter afresh and its role is not limited to the identification of error".[4] It is apparent from the reference to the 'court' that these comments were not made in direct reference to the Tribunal considering a matter de novo as is required by s 25C(3)(b) of the Act. Nevertheless in my view Re AKS provides the Tribunal with guidance as to its responsibilities in considering a matter de novo.
11. The Tribunal decisions of Farah v Valuer-General[5] and Pyman v Valuer-General[6] both precede the then-President's decision in Re AKS. To the extent that the decisions differ in the principles applied to a hearing de novo, I consider Re AKS to be the precedent to which I should have regard.
12. I further have regard to the Supreme Court decision of Bargwanna Pty Ltd v Valuer-General[7] in which the then-Kourakis J held that "an appeal pursuant to s 25C of the Act proceeds by way of a hearing de novo. It is not necessary to establish error in the valuation process of either the Valuer-General or the review valuer".[8] Further, his Honour held that "although it is not necessary to show error in the way in which the valuation below was arrived at, an appellant appealing pursuant to s 25C of the Act, like any other appellant, has an onus. The appellant must satisfy this Court that a different valuation should have been made".[9] In my view those remarks are equally applicable to a hearing de novo in this Tribunal. His Honour then proceeded to make further remarks about how the onus would be discharged in the Supreme Court which in my view are not applicable in this Tribunal, in the light of s 39 of the SACAT Act.
13. Following Re AKS and Bargwanna as quoted above, it follows that the applicant must satisfy the Tribunal that different valuations should have been made. But the applicant need not demonstrate error in the original decisions by the Valuer-General, and the Tribunal must consider the matter afresh without any requirement to have regard to or to give weight to the original decisions. To the extent that the submissions on behalf of the Valuer-General are to the contrary, I do not accept them.
14. Mr Martin has not satisfied me that different valuations should have been made by the Valuer-General either about the site valuation or the capital valuation.
15. In his written submission, Mr Martin contends "the methodology that the Valuer General has used to determine Site Value is flawed. One cannot take the sale price and divide it by the square meters of land and ignore the buildings which reside on the land", that "any sensible valuation must attempt to first derive the value of the land by discounting the value of the building at the point of sale" and that "You the take away the value of the building from the sale price and you are left with the value of the land". I do not accept these contentions. They are not consistent with the definition of 'site value' contained in s 5(1) of the Act which is:

site value of land means 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 -

(i) buildings and structures (but not including structures in the nature of site works); and

(ii) wells, dams and reservoirs; and

(iii) the planting of trees for commercial purposes.

1. Mr Martin's submission on the capital value of the land similarly did not have regard to the definition of 'capital value' contained in s 5(1) of the Act. Mr Martin's submission on the capital value was that he built the building on the land in 2018 "for a cost of $374,678. This did not include any kitchens or floor coverings but did include solar panels to the value of $24,000. Hence we can say that the building cost $350,000. The only reason it was so cheap is that I did not charge for 15 months of my time. Say we add $120,000 and we come to a figure of $470,000". He then added his site value of $750,000.00 to his capital value of $470,000.00 to reach $1,200,000.00 and suggested the capital value should be 90% of that figure, which he stated to be $1,100,000.00.
2. The definition of capital value in s 5(1) of the Act is

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.

1. I do not accept Mr Martin's methodology of calculating either the site value or the capital value.
2. In his oral submissions Mr Martin referred to various other properties located on Unley Road and also said that he considered the areas of Unley, Malvern and Parkside to be relevant comparators to his property. That approach is essentially to look at the values assigned to other land in the same local government area. That approach was rejected by Kourakis J in Bargwanna where he said 'it is my opinion that the values assigned to other land in the applicable local government area, or comparable areas, from time to time by the Valuer-General are neither directly nor indirectly relevant'.10 I do not accept Mr Martin's contention that the value of his land is to be determined by reference to the values ascribed to properties on the same road or in the same area. I reject his methodology which he termed 'relativity and consistency'.
3. The Valuer-General's decisions of 29 October 2019 were made after receipt of two reports of Mr Tom Reed of Land Services SA dated 24 October 2019. One report is entitled 'Site Value Objection Analysis Report' and recommended that the Valuer-General uphold the site value of $960,000.00. The other report is entitled 'Capital Value Objection Analysis Report' and recommended that the Valuer-General uphold the capital value of $1.3 million. In the site value report Mr Reed used the methodology of 'direct comparison'. In the capital value report Mr Reed used the methodology of 'capitalisation of net income' as the primary method and 'direct comparison' as the secondary method. I am satisfied that all of Mr Reed's methodology applies what Kourakis J in Bargwanna called 'ordinary valuation principles'.11
4. Dissatisfied with the Valuer-General's decisions of 29 October 2019, Mr Martin obtained a report from Mr Campbell of Valuations SA dated 10 January 2020. Mr Campbell's methodology was 'direct sales comparison'. It is notable that all the sales he compared were of properties on Unley Road. He arrived at 'current fair market land value' of $780,000.00. I infer from the reference to land value that it is intended to equate to 'site value' as defined in the Act. I am not satisfied that I should accept that site value. It appears to me to have been an artificially narrow application of the direct comparison methodology, and contrary to the Bargwanna case, to limit the analysis to a comparison of properties on Unley Road. I note Mr Martin's oral evidence that it was he who instructed Mr Campbell to proceed in that fashion.
5. Directions hearings occurred in the Tribunal at which the Tribunal endeavoured to have the parties submit a joint expert opinion of site value and capital value. Those endeavours were to some extent in vain. Mr Martin obtained a report of Mr Carter of McLean Gladstone Pty Ltd dated 18 June 2020. Mr Carter employed the direct comparison method and arrived at a site value of $880,000.00 which he stated to be as at 1 January 2019. The comparators he used included five properties on Unley Road as well as two properties in Kent Town and one in Prospect. Although the valuation date is stated to be 1 January 2019, Mr Carter referred in his report, amongst other factors, to the corona virus global pandemic, a federal election which I take notice occurred in May 2019 and a business outlook report for 'Q4 2019'.
6. Meanwhile, the Crown Solicitor's Office on behalf of the Valuer-General obtained a report from Mr Ruiz of Land Services SA. As far as I can see the report itself is undated but the date of valuation is stated to be 1 January 2019. Mr Ruiz applied the direct comparison method and arrived at a site value of $1,020,000.00. He compared six sales in six different suburbs, including one property on Unley Road.
7. Mr Ruiz gave evidence at the Tribunal hearing. He said that he and Mr Carter had used similar methodology and agreed on the level of discounting to be applied. He said that their different outcomes as to site value came about because they applied the discounting to different starting points. Mr Ruiz used the same starting point for the whole of the property. Mr Carter notionally divided the property into the 'front usable' portion and the 'rear restricted' portion (a division that aligns with the 2 lot numbers for the property, being Lot 121 at the front and Lot 124 at the rear), and assigned a different starting point to each. Mr Ruiz disagreed with Mr Carter's starting point and said it was too low. He also rejected some of the sales comparisons used by Mr Carter, pointing out that some of them were off-market transactions or related-party transactions and one was a heritage-listed property and therefore not a useful comparator for site value. As to capital value, Mr Ruiz's evidence was that he would assign a capital value of $1.475 million. He commented that Mr Reed's capital value of $1.3 million was 'conservative'. Under cross-examination by Mr Martin, Mr Ruiz commented that his comparator property at 89 Unley Road was 'at the high end with a motivated purchaser' and 'not a purchase well over the odds'. Mr Martin referred to that sale as 'insane'. Mr Ruiz did not accept that it was 'insane'. The impression I formed of Mr Ruiz's approach was that he did not adopt a conservative approach. That is not a criticism of him. However in a context where a non-conservative approach to site value and capital value results in a higher financial impost on the owner of the property, I do not accept that a non-conservative approach is the correct and preferable approach. There was a joint experts' conference between Mr Carter and Mr Ruiz, but they did not reach significant agreement as to the applicable site value and capital value.
8. I note Mr Ruiz's criticisms of Mr Carter's opinion. However I decline to draw any inference as a result of Mr Carter not giving oral evidence. Mr Martin was not legally represented during the Tribunal proceedings and it would be unfair to hold him to the same standard of presentation of evidence and witnesses as might be expected of legally represented litigants in a court.
9. Having considered the Valuer-General's decisions de novo in the light of the four separate reports by professional valuers that were available to the Tribunal and the oral evidence at the hearing, I am not satisfied that different valuations for site value and capital value should have been made by the Valuer-General. I will affirm the decisions under review.

1. The Tribunal affirms the decisions under review.

[1] Respondent's outline of argument at [27].

[2] Respondent's outline of argument at [27].

[3] [2016] SACAT 19.

[4] [2016] SACAT 19 at [35].

[5] [2015] SACAT 7.

[6] [2016] SACAT 1.

[7] [2011] SASC 67.

[8] [2011] SASC 67 at [4].

[9] [2011] SACAT 67 at [6].