Michael Lapadat v Valuer General of New South Wales

Statutory framework

1. The annual valuation of land is principally governed by s 6A of the Valuation Act which relevantly provides: 6A Land value (1) The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made. …
2. The only grounds upon which an objection to a land valuation can be made are detailed in s 34 of the Valuation Act which relevantly provides: 34 Grounds of objection (1) In relation to land the only grounds upon which objection may be taken under this Act are: (a) that the values assigned are too high or too low, (a1) that the area, dimensions or description of the land are not correctly stated, (b) that the interests held by various persons in the land have not been correctly apportioned, (c) that the apportionment of the valuations is not correct, (d) that lands which should be included in one valuation have been valued separately, (e) that lands which should be valued separately have been included in one valuation, and (f) that the person named in the notice is not the lessee or owner of the land.
3. The statutory framework relevant to the current proceedings was summarised by Sackville AJA in Valuer-General of New South Wales v Oriental Bar Pty Limited [2016] NSWCA 48; (2016) 217 LGERA 1 at [61]-[62], [68]-[70]: [61] Subject to certain exceptions, the land value of each parcel of land in New South Wales is to be ascertained each year. The valuation is to be made as at 1 July in the valuing year in which the valuation takes place. The Valuer-General is empowered to value any parcel of land at any time. [62] Assessment of land value is to take place in accordance with s 6A(1) [of the VL Act]… … [68] The Valuer-General is required to give notice of each valuation of land to specified persons, including the owner of the freehold estate on the land. A person to whom the Valuer-General has given notice may lodge a written objection to the valuation. Section 34(1) specifies the only grounds on which objection may be taken under the VL Act to a valuation... [69] The Valuer-General is required to consider an objection that has been duly made and either allow or disallow it. If the objection is disallowed in whole or in part, the Valuer-General must give reasons for doing so. [70] A person entitled to object to a valuation may appeal to the L & E Court if dissatisfied with the Valuer-General's determination of the objection. Section 40(1) of the VL Act provides that on appeal the L & E Court may do any one or more of the following: "(a) confirm or revoke the decision to which the appeal relates, (b) make a decision in place of the decision to which the appeal relates, (c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision." On an appeal, the appellant has the onus of proving the appellant's case (emphasis in original, citations omitted).
4. I respectfully adopt his Honour's analysis to explain the background to these proceedings.
5. Further, r 13.4 of the UCPR entitles the Court to dismiss proceedings in certain circumstances and relevantly provides: 13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1).
6. Pursuant to the Valuation Act, Mr Lapadat's land value must be determined on the assumption that improvements (including the fence on the subject land) were not made. Mr Lapadat appears not to have known this when he made his objection.
7. For present purposes, it seems that Mr Lapadat's concerns primarily relate to the grounds in ss 34(1)(a) and 34(1)(a1) of the Valuation Act (extracted at [15] above), particularly the latter.

Evidence

1. At the hearing of the motion, the Valuer General read the affidavit of Paul Rankins affirmed 29 March 2019 which detailed the background facts summarised above and an expert valuation report of Michael Redfern dated 4 March 2019 which, amongst other things, determined that the land value of the subject land as at 1 July 2016 was $120,000. I record that in these proceedings the Valuer General does not contend for this valuation, but instead relies on the valuation of $110,999 as determined in the Valuer General's notice as at 1 July 2016.
2. Mr Lapadat tendered a detailed statement dated 20 September 2018 which included background facts and annexures and he expanded upon its contents in oral submissions. He also tendered a Notice of Valuation as at 1 July 2016 issued by the Valuer General to Michael George Brown, an immediate neighbour whose property also forms part of the laneway. The notice addressed to Mr Brown included the same apparently incorrect property dimensions as the notice issued to Mr Lapadat. Annexed to Mr Lapadat's submissions are two notices of valuation addressed to Ana Lapadat, Mr Lapadat's mother, dated 1 July 2011 and 1 July 2016 respectively. Both notices record the area of the subject land correctly, however they contain the same error in relation to the width of the land. That is, the dimensions are incorrectly stated to be 18.59m x 50.29m but the area is correctly stated as being 1,012m².
3. Mr Lapadat's statement sets out his concerns and he provided further details from the bar table (with the concurrence of Mr Nash). Although there may be concerns in relation to the relevance of certain parts of the statement, as it provides useful background information, I summarise its contents as follows.
4. Mr Lapadat says that the laneway adjacent to and occupying approximately 75m² of the subject land and the associated fence are in the same position as they were when his parents purchased the subject land in 1964. He notes that Council has been maintaining (at least by mowing) the laneway which appears to be located on part of each of the subject land, Lot 11 (Urana Road), Lot 26 (Parnall Street) and Lot 27 (Parnall Street) since that time. All four surrounding property owners were under the impression that that area belonged to Council due to their mowing and maintenance of it.
5. According to the "original land title", (which I assume to be a Certificate of Title issued 18 September 1974), Mr Lapadat submits that the width of the subject land was 20.115m and not 18.59m as was stated on the Valuer General's notice. A survey report he retained from Spiire Australia Pty Ltd dated 19 July 2016 indicated to Mr Lapadat that there was a shortage in title width at the front and rear of the subject land, and that the title width should be 20.115m. (For convenience and to assist with understanding Mr Lapadat's evidence, a copy of the survey is attached to this judgment and marked "A"). Mr Lapadat states that it was only on 21 March 2018 when he informed the Valuer General of the error were the dimensions changed from 18.59m to 20.115m to reflect the correct width. Mr Lapadat submits that the Valuer General stated that the area of the subject land, being 1,012m² (that is, 20.115m x 50.29m) had at all times been correctly recorded in the Register.
6. Mr Lapadat claims that despite the correction of the (width) measurement in the Register, because of the existence of the fence on the subject land, he only has effective use of 934.89m² (that is, 18.59m x 50.29m) of the subject land, and not 1,012m² as shown on the "original land title" and the Register. Mr Lapadat believes that the effect of this is that Council has incorrectly levied rates on the subject land for over five decades as these were calculated on the assumption that the subject land had an area of 1,012m². Mr Lapadat contends that as he and his family have effectively been deprived of part of their land (at least 75m²) without their knowledge or permission, he should not have to pay rates based upon the "inflated area".
7. Mr Lapadat states that having made his concerns clear to Council, he received a letter from CLH Lawyers ('CLH letter'), acting for Council, admitting that there was a laneway partly situated on his titled property, but maintaining that the effect of this was that Mr Lapadat had "simply decided not to use the strip of land abutting the fence line which is land forming part of the title". The CLH letter also stated that Council had no record of any conversations between it and Mr Lapadat, no record of any use of the subject land, and that no plans recorded any legal pathway either on or abutting the subject land. Mr Lapadat forwarded the CLH letter to the Valuer General and was informed that the Valuer General's original determination still stood.
8. It is clear that at the time of the CLH letter, proceedings had been commenced and judgment obtained in the Albury Local Court against Mr Lapadat for unpaid property rates and water charges. The relief Mr Lapadat seeks (noted at [8] above) relates to a cross-claim in these proceedings.
9. Annexed to Mr Lapadat's submissions are a series of medical records dated June 2017, February 2018 and July 2018 which I have assumed were to support his claim for an extension of time to lodge an appeal to the LEC in relation to the Valuer General's determination.

Valuer General's position

1. The Valuer General submits that Mr Lapadat's primary objection concerns an error in the dimensions of the subject land as recorded in the Register. Although the area of the land remained the same, in March 2018, the Register was amended from 18.59m x 50.29m to 20.115m x 50.29m to reflect the correct dimensions, thereby matching the Deposited Plan included in the valuation report of Mr Redfern for the subject land.
2. The Valuer General contends that despite the initial error which related to the width of the subject land, its area had always been accurately recorded in the Register as being 1,012m², and the land valuation was calculated based on that area.
3. The Valuer General speculates that the likely cause of the initial error in relation to the width recorded for the subject land was that the boundary fence on the northern side had been (and remains) erected 1.527m inside the subject land.
4. The Valuer General is of the view that Mr Lapadat's concerns relate to the fact that he and his parents, as former owners of the subject land, have been paying Council rates based on a valuation for the subject land with an area of 1,012m², despite only having effective use of a narrower parcel of land (being 935m²) due to the incorrectly placed fence.
5. In the circumstances, the Valuer General submits that the only justiciable issue in proceedings of this type brought pursuant to s 37 of the Valuation Act relates to the valuation of the subject land under s 6A(1) of the Valuation Act.
6. Pursuant to s 6A(1) of Valuation Act, the Valuer General submits that all improvements on the subject land, including fences, are assumed not to have been made for the purposes of assessing and determining land value.
7. The Valuer General further submits that neither the origin of the error in the dimensions of the subject land, the proper location and siting of the fence on the subject land, nor the recovery of Council rates paid in circumstances where Mr Lapadat did not have effective use of the whole of the subject land are justiciable in these proceedings.
8. In light of the above, the Valuer General submits that as Mr Lapadat does not otherwise object to the valuation of the subject land as at 1 July 2016 on the assumption that the area of the land was and is 1,012m², the proceedings would be dismissed pursuant to the grounds in r 13.4(1) of the UCPR.

Valuation evidence

1. In his valuation report dated 4 March 2019, Mr Redfern commented that the fence that currently defines the physical northern boundary of the property is not located on the correct cadastral alignment as it is located within the boundaries of the subject land, being approximately 1.48m inside the cadastral boundary at the western end and approximately 1.455m inside the cadastral boundary at the eastern end of the property. Mr Redfern further stated that the approximate location of the correct boundary alignment of the northern boundary is the centreline of the public access walkway located adjacent to the subject land.
2. In relation to improvements, Mr Redfern noted that apart from the fence, a brick veneer and terracotta tile dwelling is erected on the subject land built circa 1970. He further stated that there are additional ancillary improvements and sundry shedding erected on the subject land. Mr Redfern acknowledged that all building and structural improvements (including all fencing) were excluded from his valuation.

Consideration

1. I have closely read the extensive material marshalled by Mr Lapadat and have considered his detailed submissions as well as the legal texts and decided authorities he referred me to including the High Court cases of Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66.
2. During the course of the hearing, Mr Lapadat confirmed that he did not intend to marshal expert valuation evidence and he gave details of his earlier attempts to retain a valuer. Despite this, he accepted that his concern related to the incorrect statement of the earlier mentioned dimension and his prime motivation was the fact that he (and his parents) had been inappropriately made liable for local government rates which were struck based upon valuations that had been determined upon what he considered to be inappropriate dimensions over many years. Further, he expressed concern that he and his family have been deprived of the use of some 75m² of their land over many decades.
3. I accept that Mr Lapadat harbours real concerns regarding his property and the conduct of Council in relation to the laneway. I have, during the course of the hearing, sought to explain how the determination of land value is calculated, particularly in relation to improvements. Despite this, and accepting that the dimensions of the subject land (that is the width thereof) have now been corrected in the Register, I consider that the Valuer General, having been required to value the subject land disregarding the fence (as it did), is entitled to the relief it seeks in the motion primarily for the reasons it has submitted, which I have summarised above.

Conclusion

1. I consider that Mr Lapadat has real grievances primarily resulting from the fact that he and his parents appear to have been unaware of what may have been an unlawful deprivation of the use of some 75m² of their land over many years. Despite this, I find that there is no relief that can be given in the present proceedings to address that concern, or to make the discrete orders of the nature sought (summarised at [8] above). Although the identity of the parties responsible for the construction (and location) of the fence are unknown, I note that Mr Lapadat may have other avenues for relief available, and I have suggested that if possible, he obtain legal advice as to how to deal with what appears to be an obvious encroachment of the fence (and possibly the laneway) onto both his, and possibly, that of his immediate neighbours' land.

Orders

1. The Court makes the following orders: 1. The proceedings commenced by Class 3 application filed on 20 September 2018 be dismissed in whole pursuant to r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW). 2. No order for costs is made.

Plan of Survey - Lot 10 DP 22594 (367 KB, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 April 2019