New South Wales Golf Club v Valuer-General New South Wales

8Mr T Dundas, the Club's valuer, is of the opinion that all of these terms of the lease must be taken into account under s 14I, most notably the clauses regarding threatened species and lease withdrawal. Mr RR Dupont, the Valuer-General's valuer, contends that the land is to be valued as fee simple in possession and the only conditions of the lease to be considered are restrictions on disposition and the manner of use. In my view all of the above terms are relevant as they all relate to either the disposition or the manner of use, as further explained at [55] - [57] below. 9The current annual "market rent", which was fixed by the Department of Land and Water Conservation in 1999, is $40,000.00. 10In 1991 the Valuer-General placed a valuation on the Club's land of $4.4 million. This was reduced by the Court to $2.236 million: New South Wales Golf Club Ltd v Valuer-General (1993) 81 LGERA 438. In 2003 the Valuer-General placed a value on the land of $3.75 million. This was reduced by the Court to $2.5 million: New South Wales Golf Club v Valuer-General [2007] NSWLEC 40. 11The Valuer-General has placed a value on the land, as at the valuation date, 1 July 2009, of $6.01 million. The Club contends that the value should remain unaltered since the previous determination by the Court of $2.5 million in 2007, particularly since the value of golf courses has fallen in the interim. Moreover, the Club's valuer contended in the course of giving his evidence that the value should be nil.

A question of onus 12Mr JB Maston, appearing for the Valuer-General, submitted at the outset of the hearing that the objection to the valuation must be dismissed without the matter proceeding any further. As I understand it, he sought, in effect, summary judgment on the ground that the Clubs' evidence as filed did not give rise to any case to answer having regard to its onus under sub-s 40(2) of the Valuation of Land Act. That sub-section states: On an appeal, the appellant has the onus of proving the appellant's case. 13The report of the Club's valuer which was filed relies principally upon the provisions of the lease referred to at [3] and [7] above, the absence of any truly comparable sales of other golf courses, that the value of golf courses is falling, that a hypothetical purchaser would have to meet the cost of constructing a golf course on the vacant land, and on the fact that the market rent for the subject land has not altered since the previous hearing. 14According to Mr Maston's submission, as I understand it, the lease is the same lease that was in existence at the time of the previous hearing; the land itself would be notionally considered to be in the same unimproved state as at the previous hearing; the market rent is unaltered; and all that the Club's valuer has done is simply adopt the findings and conclusion in the previous judgment. Moreover, this is a fresh appeal about a valuation made as at a different base date, which calls for a fresh assessment, which has not been done by the Club's valuer. The previous judgment of the Court is not res judicata and the Club's valuer cannot simply say, in effect, "I rely on the previous judgment". According to the submission, the onus is on the appellant to prove that the Valuer-General's valuation is wrong and the evidence which has been filed does not discharge that onus. 15Mr PJ McEwen SC, appearing for the Club, submits that there is nothing wrong with this approach, particularly since there are no changed circumstances since the previous hearing (other than the fact that the market for golf clubs is falling). In the previous case the Court adopted its valuation by capitalisation of the market rent to achieve the result. Mr McEwen submits that there should be consistency in this as well as in other areas of litigation. He referred to Graham Trilby Pty Ltd v Valuer-General [2011] NSWLEC 68, in which Biscoe J said, at [32]: As a general principle, the Court should not make conflicting findings of fact in consecutive valuation appeals relating to the same land where there is no significant difference in the evidence, unless it is convinced that the earlier finding is wrong. Courts should strive to be consistent. 16Mr Maston relied upon a number of authorities in support of his submission. In Broken Hill Proprietary Company Ltd v Broken Hill Municipal Council [1926] AC 94; 37 CLR 284, it was held that a judicial decision as to a valuation of a mine under s 153(3) of the Local Government Act 1919 (NSW) for a particular year is not res judicata in respect of a valuation and a liability for a subsequent year between the same parties. A previous decision in that case related to a valuation and a liability to tax in a previous year: The Privy Council held (at 100): The present case related to a new question - namely, the valuation for a different year and the liability for that year. It is not eadem questio, and therefore the principle of res judicata cannot apply. 17Flack v Valuer-General (1952) 18 LGR (NSW) 157, was the hearing of objections to valuations made by the Valuer-General in 1949. The objector tendered in evidence the valuations made in 1946 and 1947 and gave evidence that there had not been any materially changed circumstances since then. The subject valuations were very substantially in excess of the prior valuations. Sugerman J expressly left open the question, deciding it neither one way nor the other, whether there may not be some cases in which it is sufficient to point to an earlier valuation standing alone. His Honour went on to note that in the present case the period between the prior valuations and the dates of the valuations objected to was considerable, there had been a decline in the purchasing power of money, a considerably accentuated demand for land and a considerable degree of development or of prospect of development. His Honour then continued (at 159): Even if it be correct to assume as a starting point the correctness of the prior valuation, which as a matter of general principle I have left open, it appears to me to be impossible for the Court to speculate, in the absence of any evidence or admission on the question, whether in any given area there has or has not been an increase in values in the interim, or what percentage that increase may be. 18In Society of Medical Officers of Health v Hope (Valuation Officer) [1960] AC 551, Lord Radcliff (Simonds LJ, Cohen LJ and Jenkins LJ concurring) drew an analogy between the system of rating and the system of personal taxation, holding (at 562): "... that it is not in the nature of a decision given on one rate or tax that it should settle anything more than the base issue of that one liability and that, consequently, it cannot constitute an estoppel when a new issue of liability to a succeeding year's rate or tax comes up for adjudication. His Lordship continued: The question of this liability is a 'new question'. It is not 'eadem quaestio'. His Lordship referred to several authorities in support, including Broken Hill Proprietary Co Ltd v Broken Hill Municipal Council. Lord Keith of Avonholm, after noting that a valuation officer has a public duty to perform by making periodically a valuation list of all hereditaments, said (at 568): He must necessarily reconsider and revise the previous valuation list. 19These principles have been accepted in this Court. Thus, in Commonwealth Custodial Service Ltd v Valuer-General [2008] NSWLEC 310, Biscoe J said, at [7]: The valuation by this Court in relation to preceding years does not attract the principle of res judicata: Broken Hill Pty Co Ltd v Municipal Council of Broken Hill (1925) 37 CLR 284 at 289 (PC) His Honour then noted that the parties and their valuation witnesses gave no weight to the Court's valuation, in an appeal in relation to preceding years. 20Whilst accepting, as I must, the principles described in these authorities, I ruled against Mr Maston's application and proceeded to hear the evidence. I did so because a fair reading of the valuation report upon which the Club relies shows that the valuer did in fact consider the circumstances existing at the relevant base date, being 1 July 2009. In particular his evidence is that the market for golf courses, rather than going up as reflected in the Valuer-General's valuation, has gone down since the previous hearing. That is enough, I think, to discharge the onus, at least on a prima facie basis. Moreover, he contended during the hearing that, for reasons which appear below, the land should be given a nil valuation.

Land improvements 21Valuation evidence was given by Mr T Dundas for the Club and by Mr RR Dupont for the Valuer-General. Their first area of disagreement is what should be included as land improvements. Mr Dundas considers the following should be taken into account as land improvements: (a) clearing of the areas now consisting of fairways, tees, greens and buildings; (b) removal of stones (although none of this would appear to be necessary); (c) some grading, although overall the course follows the natural topography; (d) a small area of filling near the car park; and (e) several underground drains. 22Mr Dundas is of the opinion that the definition of land improvements does not allow for the planting of vegetation (including grasses) or for raising the level of land. Mr Dundas also states that, whilst the ongoing fertilisation of planted grasses may have resulted in some improvement in soil fertility, as the grasses are considered to be an improvement and so are taken to have never existed, they would not be fertilised. 23Mr Dupont includes as land improvement, fertilising, excavation, grading, levelling, remediation and drainage, as well as fairway planting, bunkers, greens, tees etc. 24I generally agree with Mr Dupont. Raising the level of the land, whether for tees or for greens, utilises fill and is clearly filling: Maurici v Chief Commissioner of State Revenue [2001] NSWCA 78 (2001) 51 NSWLR 673; 114 LGERA 376 (reversed on appeal on other grounds); Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111. The evidence of Mr JT Woodcock, an experienced ground curator and greenkeeper, confirms the fact that the introduced grasses on the fairways, roughs, tees and greens improve the structure and quality of the soil by retaining the landform, eliminating soil erosion and creating organic matter that filters into the soil profile and improves the growing medium. The planting of grasses would thus also be a land improvement. Moreover, any shaping of the land (including the planting of grasses) amounts to the carrying out of a work. In this respect the reference in paragraph (d1)(ii) of the definition to "any work" is a reference to the word "work" as a noun - that is, a thing upon which labour is bestowed: Atkinson v Lumb [1903] 1KB 861, Bromley Rural District Council v Croydon Corporation [1909] 1 KB 353. 25I thus disagree with the opinion of Mr Dundas that the land is to be regarded only as a site upon which a golf course could be constructed, that the land is otherwise vacant and one would then need to construct the course. The land improvements mean that the course is largely already constructed - and constructed to a level of championship standard. That is, it must be regarded as having its present form, complete with tees, fairways, roughs, bunkers and greens, all in their present condition. 26Mr Dupont states that the cost of constructing a championship course is in the vicinity of $10 million to $14 million based upon Rawlinson's Australian Construction Handbook (2009 edition). Mr Dundas has made an estimate of the cost of constructing a golf course from scratch as at 1 July 2009 as being $32 million, but as I have noted above, it must be assumed that the course layout largely exists as it is today, with its tees, fairways, roughs and greens, all duly turfed, fertilised and top-dressed, together with the underground drains and the excavated and levelled areas for the workshop building and the car park. Accordingly, relatively little additional expenditure would be required to establish a working golf course, although, as appears at [45] to [46] below, a hypothetical purchaser could not expect to operate a successful golf course without some sort of a clubhouse, car parking and a workshop/ buggy store. 27According to Mr GM Dempsey, the Club's course superintendent, the greens and tees are fertilised approximately every month, mainly during the growing season between September and April and the fairways are fertilised every two or three months during the growing season, at a cost of about $40,000.00 a year. The greens are top-dressed every fortnight and the tees and fairways are top-dressed annually, by applying sand. Sand is purchased for the greens at an annual cost of about $6,000.00, but the tees and fairways are top-dressed with sand from the Club's land. 28In 1987 the practice range was reconstructed, which included filling and drainage, at a cost of $43,604.00. In 1988 the car park was rebuilt at a cost of $202,352.00, which included removing a significant amount of material and reconstructing the surrounds and surface. In 2006/ 2007 the area of the works depot was excavated and the excavated material used as fill in another part of the land at an estimated costs of $21,600.00. In 2011 the fourth hole was redesigned which required some cutting and filling at a costs of about $9,000.00, but since this work was done after the relevant valuation date, it must be ignored. Apart from this final item, a hypothetical purchaser would obtain the benefit of most of the above-mentioned expenditure. 29Although Mr Dupont has estimated a cost of constructing a championship course at $10 - $14 million based on Rawlinson's Australian Construction Handbook (2009 edition) and Mr Dundas has estimated the cost at $32 million, both valuers agree that cost does not equal value when it come to golf courses. This, they agree, is because most recently constructed golf courses have been constructed in conjunction with housing estates or tourist resorts where the presence of a golf course is reflected in the uplift in values of the surrounding land and buildings. The relevance of all this in the present case is that a hypothetical purchaser of the land intending to use it as a stand-alone golf course would not have the benefit of any flow-on effect upon adjoining residential or tourist development, but would also not have to face the prospect of meeting the vast bulk of the costs of constructing it as that must be notionally regarded as having been already done. 30Of course, one must disregard all improvements which are not "land improvements", such as the elegant and spacious clubhouse with its various facilities, the surfacing of the car park, the workshop/ maintenance building and buggy store, the earth-walled dam, the surfacing on pathways and the bridge to the sixth tee. Nevertheless, the hypothetical purchaser in the hypothetical transaction, purchasing the land with the intention of using it as a golf course - the only permitted use - would be obtaining the benefit of expenditure on a property where the course itself is ready to be played.

Valuation methodology 31I now turn to the question of valuation methodology. Mr Dupont used four methods of valuation, each of which was said to be a check on the others: (i) direct comparison with sales of vacant and similarly zoned open-space land; (ii) analysis of rents for golf courses and capitalisation of the expected market rent for the subject land; (iii) analysis of sales of existing golf courses; and (iv) valuation based upon potential income. 32Mr Dundas adopted the third method and, after analysing it, he rejected it and then adopted and applied the second method. Mr Dundas dismissed the first method as being entirely inappropriate and unhelpful in the present case. However, in the course of giving his evidence concurrently with Mr Dupont, he accepted the fourth method as being the most reliable, but that one must then also consider the restrictions on disposition and manner of use under the lease (as required by s 14I).

Direct Comparison 33Mr Dupont utilised sales of similarly zoned and vacant open space land to establish a base value for "raw" land, by direct comparison. Some of these sales were of land acquired for the purpose of open space and some for other purposes, two of which were for golf courses associated with adjoining residential or tourist developments. 34As noted at [32] above, Mr Dundas disregarded this method. In his opinion none of the sales utilised by Mr Dupont are of relevance to the subject land, being land acquired either by acquisition for open space or for other purposes. In two cases (Hammondville and Magenta) the land was purchased for golf course development in conjunction with adjoining residential development (Hammondville) or in conjunction with a tourist development (Magenta). 35I find that none of these sales provide reliable indications of the purchase price of "raw" land for development as a stand-alone golf course. Mr Dupont conceded in the course of giving his evidence that "these sales comparisons are not the most reliable". I gain no assistance from them.

Analysis of rents 36Mr Dundas compared the rents charged by the Department of Land and Water Conservation for a number of golf courses on land which is leased from the Crown. He placed the greatest reliance on The Coast Golf Course, The Lakes, Long Reef and St Michael's as well as the subject course. Mr Dundas noted that rentals of fully functioning golf courses are either falling or stabilising. His analysis of rents is flawed, however, because he assumed that a hypothetical purchaser would not pay any rent when faced with the cost of constructing a course of similar quality to the course that now exists. I have noted however, that the presence of the land improvement means that the course must be regarded as being already in place and ready to be played. 37Mr Dupont thought that the market rent determined for the adjoining St Michael's Golf Course was the most apposite. He said that the current rent for the subject land of $40,000.00 was well below the market and has little connection to general market levels, but agreed that the rents paid for other courses were "all over the place" - a comment with which Mr Dundas agreed. Mr Dupont said that reliance on rents has to be treated with caution: "My conclusion out of looking at all the rents is they're all over the place ..." and further, "this is not the most reliable method". He also said that "... it is evident from the leases we have that it's a little bit difficult to get any consistency from it". 38It is clear that the rents charged for other courses are wildly different from each other and from the subject land and do not show a consistent pattern. As Mr Dupont stated, this is not the most reliable method of determining value, and I agree. I thus do not place any real weight on this evidence.

Sales of existing (improved) golf courses 39Apart from the sale of The Springs Golf and Country Club at Peats Ridge, all of the sales which were examined are of existing golf courses that have been developed in conjunction with other developments, generally accommodation for tourists or resorts, conference facilities, function centres or housing estates. In these circumstances it seems that the courses have been primarily used as a marketing tool to promote and add value to the associated development. 40The only sale of a stand-alone golf course was that of The Springs Golf and Country Club, which was sold in September 2008 for $2.35 million. This property is on the western perimeter of the Central Coast urban area. It had previously sold in March 2006 for $10 million with proposals for 33 apartments and a resort development. A development application for the apartments and resort was refused in 2007. This would explain the somewhat dramatic fall in the sale price and demonstrates the reliance of new golf courses on associated tourist or residential accommodation, or conference facilities or the like. Mr Dupont noted that this course is unlikely to make a profit based on current patronage. 41I do not regard the sale of The Springs Golf Club as a reliable indicator of value. This sale bears no relationship to any of the other improved sales, which themselves do not show any consistent pattern, and the fact that The Springs is unlikely to make a profit suggests that the sale price was at an over value. As Mr Dupont states in his evidence: "The problem with the sales and evidence in golf courses is they're all over the place, there's a wide disparity between them, we have limited sales over a wide geographical area". Moreover, as Mr Dupont further observed, the analysis of the sales is difficult, not only because they are so disparate, but there are so many different parts to each sale, such as the clubhouse and bar, accommodation and the like, which must, of course, be ignored for purpose of the hypothetical valuation exercise that must now be performed. I gain no assistance from these sales. Neither do I gain any assistance from the sales of the other existing golf courses that are in evidence for the reason identified in [39] above. They bear no relationship to a stand-alone golf course.

Valuations based on potential income 42Both valuers agreed that this is probably how a potential or hypothetical purchaser would look at this property, particularly in view of the demonstrated unreliability of the preceding methods. 43Mr Dupont analysed the income and expenditure of six golf courses (including the New South Wales Golf Club) from their annual reports. From this information he calculated their earnings before interest, taxation, depreciation and amortisation, in order to determine what they achieved by way of net profits on income, expressed as a percentage. Although his report is not very clear, as I understand it he then made an adjustment for the subject course noting that it was located on a pristine site in a desirable eastern suburbs location. He then averaged the annual income over three years trading, to which he applied what he called a conservative two-years purchase, less an allowance for course improvements (20 per cent) and the business component (30 per cent) to arrive at a land value. 44The problem with this approach is that the subject course is not like other golf courses. Firstly, it is in a unique location, on the northern headland of Botany Bay, surrounded on three sides by the ocean and the Bay and on its northern side by St Michael's Golf Course. Secondly, it is located in the eastern suburbs of Sydney and thus more likely to attract the well-heeled. Thirdly, it must be assumed that the course is not only ready to play but it is constructed to a championship standard so as to be ranked amongst the best in the world. Fourthly, in these circumstances the hypothetical purchaser is more likely to consider the potential financial performance of this course, rather than the other courses analysed by Mr Dupont. 45The focus then must be on the trading figures for the subject course. These figures must include the trading figures of a clubhouse, since no golf course - and particularly a high-end championship layout such as this - can operate successfully without one. That is, it must be assumed that the hypothetical purchaser would construct a clubhouse together with its usual facilities and include its projected trading figures into the equation. The need to include a clubhouse is self-evident, as explained by Mr Dundas in his evidence: ... you need somewhere for people to change, you need somewhere for the admin to take place. Someone's got to have a cup of coffee, you can't expect people to pay golf and then just - I don't know, go down to the Matraville Hotel to entertain themselves. ... But to get people to go out there and play golf and have nowhere to get changed, to go and have a meal, to have a cup of coffee or even have a beer after playing the game, it seems to be - as far as I know there's no golf course I've ever been to which doesn't have a clubhouse. 46Mr Dundas said that the exercise is: what would someone pay for the unimproved land in order to build these things, including the maintenance shed, the dam, the cart paths, the bridge, the irrigation system and the car park? I observed that the cart paths are assumed to be already in place, being land improvement, but not the surfacing of them. 47In estimating the potential income for this golf course, bearing in mind that it is constructed to a championship standard, the hypothetical purchaser would probably arrive at a figure close to its actual income. According to the Club's annual reports obtained by Mr Dupont, the total course gross income for each of the years 2008, 2009 and 2010 is just over $4 million. Expenses for the same period, such as course maintenance and wages, came to an average of $2,421,260, resulting in a net profit of about $1,579,000. 48Mr David Burton, the General Manager of the Club, provided evidence of additional costs which were not taken into account by Mr Dupont. The Club is liable to contribute towards the cost of maintaining the access road, which is on Crown land, which cost is shared with the only two other users of the road, namely, the National Parks and Wildlife Service and the Pistol Club. These users including the Club have, over the last 15 years, spent many thousands of dollars on its maintenance. The road is the only access to the Club. The works depot cost approximately $2 million (not $700,000 as estimated by Mr Dupont). Another $1 million has been spent on cart paths - which I presume includes both levelling or grading and surfacing. Mr Dupont has not considered the cost of other items - the dam, the halfway house, the bridge to the sixth tee. 49Mr Burton also attests to the importance of a clubhouse. The membership income which Mr Dupont had included as course income has little to do with the course work as such and more to do with the strategic direction of the Club. Entrance fees ($282,000) and corporate membership fees ($429,000) are composites of all the services which the Club provides for its members. Absent a clubhouse they could not be charged at those levels, or at all. 50Moreover, Mr Burton says that Mr Dupont's analysis for the clubhouse trading in 2010 ignores costs of $416,059 and when that further cost is taken into account it leaves a consolidated net profit of $331,786 when one includes all the figures for the clubhouse trading. Moreover this amount reverted to a loss when funds were allocated to a reserve for future course maintenance, which has been omitted by Mr Dupont. Absent the allocation to reserves of the consolidated net profit of both the course and the clubhouse, namely, $331,786, and applying Mr Dupont's capitalisation rate of 14 per cent - which was not disputed by Mr Dundas - results in a figure of $2,369,000 as the value. 51Mr Burton's evidence was not subject to cross-examination. Although Mr Burton's analysis applies to the year 2010, the same analysis applied to the 2008 and 2009 trading years leaves a similar result. 52As I understand it, Mr Dupont would not include an allowance from the net profits of an allocation to a reserve for future course work, and it is his view that one looks to the actual net profit - that is, to earnings before interest, taxation, depreciation and amortisation. Mr Dundas concurred that this is standard valuation practice. 53I accept the evidence of Mr Dundas noted at [45] above, which I would have thought to be self-evident, that one cannot expect to successfully operate a golf course, particularly a championship layout such as this, without the facilities of a clubhouse. Any hypothetical purchaser of a "bare" golf course would thus have to include the trading figures of a clubhouse which would have to be provided. This is what Mr Burton has done. Although his are the actual figures, they are likely to be close to the actual estimates which a prudent hypothetical purchaser would adopt. 54Valuation under the terms of the Act is not a precise science. As noted at para [3] above, this is an artificial exercise. A value of about $2.37 million is consistent with the evidence of the overall fall in the value of golf courses generally. 55However, it is highly unlikely that a hypothetical purchaser would pay anything like this having regard to the requirement under s 14I of the Act to take into account the restrictions on the disposition or manner of use that apply to the land by reason of its being the subject of the Crown lease. Mr JB Maston, appearing for the Valuer-General, submitted that "disposition" in the section refers to the "arrangement" or "the action of setting in order" of the land, or the "arrangement ... for the accomplishment of a purpose", or "plan" by reference to dictionary definitions of that word: The Shorter Oxford Dictionary, 3rd edition, The Macquarie Dictionary, 2nd revision. However, Mr PJ McEwen SC, appearing for the Club, points out that the same dictionaries also define the word as "the action of disponing" and "power to dispose of a thing". The word "dispone" is defined as including "to dispose", and "to dispose of" is defined as "to deal with definitely; get rid of", or "to make over or part with". It is in this latter sense that the section uses the word "disposition". I have come to this view for two reasons. Firstly, if Mr Maston's submission as to the meaning of the word as used in the section were correct, then there would be no reason to include the word "disposition" in the phrase "disposition or manner of use" at all. The additional word in the phrase - "disposition" - must be given some work to do if all that it meant was "manner of use". Secondly, I respectfully adopt what was said by Jacobs J in Roache v Australian Mercantile Land & Finance Company Ltd (No 2) [1966] 1 NSWR 384 at 386: In a legal context, disposition means the act of disponing or disposing (see Shorter Oxford Dictionary). Disponing of, in this sense, means dealing with definitely or getting rid of or getting done with a particular item. 56Clause 90 of the lease, noted at para [7] above, states that the Minister may on three months' notice withdraw any part of the land and "no compensation shall be payable for such withdrawal". Mr Maston submits that the utilisation of cl 90 is highly unlikely and that there would be a reasonable expectation on the part of the Club that its tenure was secure. I pointed out during the hearing, however, that I was personally aware of - and thus had judicial notice of - an instance where the Crown had done just that, in giving the lessee three months' notice of termination notwithstanding a reasonable expectation that its tenure would continue. 57As also noted at para [7] above, this restriction would have an obvious impact upon the ability to secure finance to either purchase or develop the land with such facilities as a clubhouse, car park, irrigation system, dam, the paving of cart paths and the like. It would also limit the field of potential purchasers, who would hesitate before acquiring an interest in land which can be unilaterally terminated on three months' notice. It would clearly have a depreciating effect on the price that a hypothetical purchaser would be prepared to pay. Mr Dupont did not think that this was material to the value of the land. Mr Dundas, however, was of the opinion that it was an overriding risk: ... the Crown could given them a letter, when they get back to the office today, there could be a letter from the Crown saying you have to vacate in three months and you don't get anything for anything you've built there. The letter might arrive next week or next year, no one knows, but it could happen and someone would take that into account in assessing their risk, that's what I think. 58It is for this reason that Mr Dundas contended that the price which the hypothetical purchaser would be prepared to pay would be nil. I concur. This must be particularly so when it is appreciated that the hypothetical purchaser would have to expend a substantial sum of money in providing the facilities which would be necessary to enable the land to be used as a functioning golf course, as described by Mr Dundas - in particular the provision of some sort of clubhouse. For the same reason, a nil valuation would also apply if one were to adopt the capitalisation of rents method of assessment. 59I conclude, therefore, that the appeal should be allowed and the value be determined at nil.

Orders

1. The appeal is allowed.
2. The Valuer-General's determination of the value of the applicant's land as at 1 July 2009 of $6.01 million is revoked.
3. The Court determines the value of the land as at 1 July 2009 as nil.
4. The exhibits may be returned.

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: 19 June 2012