Owners Corporation Strata Plan 39993 v Place Management NSW [2024] NSWSC 1537 | Case summary

The Interpretation of the "Market Value of the Stratum"

The Plaintiff focussed on the opening words of the definition of "Market Value of the Stratum", which state that it "means the value of the Stratum".
The Plaintiff submitted that it is the freehold "Stratum" which must be valued, and not the leasehold Scheme SP39993 which has been created by subdivision of the Stratum.
In Minister of State for the Army v Dalziel (1994) 68 CLR 261 at 285; [1994] HCA 4, Rich J said that: "Property, in relation to land, is a bundle of rights exercisable with respect to the land". In Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 at [17], Gleeson CJ, Gaudron, Kirby and Hayne JJ referred to this observation of Rich J in making the following comments: "The word 'property' is often used to refer to something that belongs to another. But in the Fauna Act, as elsewhere in the law, 'property' does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of 'property' may be elusive. Usually it is treated as a 'bundle of rights'. But even this may have its limits as an analytical tool or accurate description …"
In Harry v Valuer-General & State of South Australia (1975) 12 SASR 446 at 454, Wells J said as follows: "One starts with this: that what is to be valued is not the inanimate, tangible thing, land, but rights in land. The Act directs the Valuer-General to value an estate in fee simple in the land, but the purpose of a direction in that esoteric form is, in my view, to ensure that what the Valuer-General values is a congeries of the most ample proprietary rights recognized by law 'projected along the plane of time' … ; one must still ask: 'What is the full range of proprietary rights in land, and what makes them valuable?' … Putting aside, then, the niceties of the theory of estates, what the Valuer General is to value … is the entirety of powers, allowed by law, of the use and disposal of a given parcel of land. What is presented to the Valuer-General in the first place, therefore is a parcel of land, and certain given rights over it of use and disposal. What yields a value under the Act is the value in the market place of those rights of use and disposal."
These observations were quoted with approval in Trust Company of Australia Ltd v Valuer-General (2008) 101 SASR 110; [2008] SASC 169 at [34]-[36] per Bleby J (Duggan and Anderson JJ agreeing).
In reliance on these authorities, the Plaintiff submitted that it is necessary, for the purposes of determining "the value of the Stratum", to determine the bundle of rights exercisable with respect to "the Stratum" (which is defined as Lot 423 in DP811583). Accordingly, if certain rights attach to the leasehold Scheme SP39993, and not to the freehold Stratum, it is necessary to disregard such rights in valuing the Stratum. On that basis, the Plaintiff contended that the valuation of the Stratum must proceed on the basis that the Stratum does not have any right of support of shelter, or any right of access other than access to fire stairs (despite the leasehold Scheme SP39993 having such rights).
It is difficult to see how the Plaintiff's submission fits with the Rawlinsons Report, which the Plaintiff obtained in relation to the value of the Stratum. That report expressed the opinion that no costs would be involved in negotiating easements of shelter and support, other than some professional fees, which were assumed to be in the amount of $120,000. That sum represented only 1.2% of the valuation on a GFA basis, which was $9,923,940.
Instead, the main deduction in the Rawlinsons Report from the valuation on a GFA basis (and hence the deduction which primarily explained the variation between the valuation opinions expressed in, respectively, the Valuer-General Report and the Rawlinsons Report) was a deduction in respect of the costs of building a structure in the space immediately below the Stratum, that is, in the area of Lot 422.
However, a structure already exists in this space. Any reduction in the value of the Stratum for the costs of constructing the existing part of the Building below the Stratum appeared to be inconsistent with the position adopted by the Plaintiff on this application, namely, that the valuation of the Stratum must proceed on the basis that the Building exists.
Senior Counsel for the Plaintiff distinguished between a valuation which took into account the Building that in fact exists, and a valuation which assumed that the Stratum enjoyed rights of support, shelter and access by reason of the existence of that structure (when it did not in fact have such rights), submitting as follows (emphasis added): "One thing I need to be clear, when my learned friend says that the plaintiff's case is that you ignore the building, with the greatest of respect, that is wrong. We do not say you ignore the building and we varied [our] declarations to make that perfectly clear that what needs to be ignored are the benefit of any rights of support or access or shelter that derive from the building. The building exists. Of course it exists. It is part of the environment in which these lots exist. As I indicated in answer to your Honour's question of me, surely it may be possible for owners to negotiate with other owners easements of support. That is obviously correct. That underlies the assumption that the building exists and that there are other landowners, et cetera, of the case. … What is fundamental - we don't say you must adopt the Rawlinsons approach. What we say is that when one undertakes your valuation you have to ignore the assumption that the defendant's valuer seeks to make that the building gives you rights to easements of support, et cetera. … there has to be your Honour acceptance of the existence of the building as part of the environment, but one cannot assume that that building will continue to exist. One has to assume that rights of support need to be obtained and how does one go about doing that? That is why we say that you have to exclude the value of those rights."
It is difficult to see, given that the Building exists and cannot be ignored, why a valuer would, in valuing the Stratum at a particular date, make a deduction in respect of the costs of constructing, at that date, a structure in Lot 422 which is identical to the one that already exists. Further, it is difficult to see the basis on which the costs of constructing the part of the Building which already exists in Lot 422 (which are estimated to amount to some $2.16m) could be regarded as a proxy for the costs of negotiating and obtaining easements (when the Rawlinsons Report expresses the opinion that there would be no costs in obtaining easements, other than associated professional fees).
It is also difficult to see how the Plaintiff's acknowledgement that "there has to be … acceptance of the existence of the building" fits with the first of the Plaintiff's three declarations, namely: "A declaration that for the purpose of the definition of 'Market Value of the Stratum' in the [CP Lease] improvements or structures, or anything else outside the [Stratum], that could provide access to and support and shelter for the [Stratum], a. do not form part of the [Stratum], and/or b. otherwise cannot be taken into account in determining the 'Market Value of the Stratum' for the purposes of the CP Lease."
Paragraph (a) of this declaration is self-evident and was not in dispute. It is obviously the case that improvements or structures which are outside the Stratum do not form part of the Stratum. The Defendant did not contend otherwise. Declaratory relief must be directed to the determination of legal controversies: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ; [1992] HCA 10.
Paragraph (b) of this declaration is inconsistent with the Plaintiff's submissions as set out above. The proposed declaration that it is impermissible to take into account "improvements or structures, or anything else outside the [Stratum] that could provide access to and support and shelter for the … Stratum" would necessarily entail that the existing Building "outside the [Stratum]", which "could provide access to, and support and shelter for the [Stratum]", could not be taken into account. However, the Plaintiff accepted that the existing Building should be taken into account in determining the Market Value of the Stratum: "The building exists, accept that. It's part of the environment. Accept that. Adds to the quality of the building. Accepts that. Provides potential other neighbours, all of that, is all part of the environment in which this lots exists. That is not to be ignored, we accept that. We made that perfectly clear."
The second declaration sought by the Plaintiff is "that the value of improvements or structures, or anything else outside the [Stratum] that could provide access to and support and shelter for the [Stratum] must be excluded from any valuation of the [Stratum] for the purposes of the CP Lease". This is, in substance, a restatement of, or the corollary of, the proposition in the first declaration: namely, that such matters "cannot be taken into account in determining the 'Market Value of the Stratum'". The Plaintiff stated in written submissions that this declaration was sought "to confirm that the deduction made by the plaintiff's valuer was a necessary one to make".
The third declaration sought by the Plaintiff - that the Valuer-General's valuation of the Stratum did not constitute a valuation of the "Market Value of the Stratum" within the meaning of the CP Lease - was described by the Plaintiff as "consequential upon the making of the first two declarations".
It follows that, if the Plaintiff does not establish a basis for making the first declaration, then there is no basis for making the second or third declarations.
As noted above, the Plaintiff's submissions focussed on the phrase "the value of the Stratum". Value is determined by forming an opinion as to what a willing purchaser will pay and a not unwilling vendor will receive for the property: Spencer v The Commonwealth (1907) 5 CLR 418 at 432 per Griffith CJ; [1907] HCA 82. In determining that value, there must be attributed to the parties a knowledge of all matters that affect its value: Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; [1999] HCA 25 at [49] per McHugh J. The circumstances which might affect the value of land, either advantageously or prejudicially, include "its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property": Spencer at 441 per Isaacs J.
It follows that, generally, an assessment of the value of land will involve a consideration of all matters relevant to determining that value, unless there is some agreement or requirement to exclude certain matters for the purposes of the valuation.
In the present case, the definition of the term "Market Value of the Stratum" makes clear that "the value of the Stratum" is to be "determined … having regard to all relevant factors including, without limitation, the potential to construct commercial office premises within the Stratum", with only two specified matters to be excluded from the determination ("disregarding the existence of this Lease and improvements constructed within the Stratum").
Five aspects of this definition are of particular relevance to the Plaintiff's proposed declaration.
First, the definition requires that "regard" be had "to all relevant factors". In its submissions, the Plaintiff acknowledged that this requirement "restates general valuation principles", referring to Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205 at [16]. In the cited passage, Bell P (as his Honour then was) referred to the principles from Kenny & Good and Spencer which are set out above.
Whether a particular factor is a "relevant factor" depends on whether it is relevant to the "determination" of "the value of the Stratum". This determination is to be made by the Valuer-General (insofar as the Valuer-General's assessment is not the subject of any objection: cl 7.2(c)-(d)) or otherwise by two "registered valuers practising in New South Wales each having at least 5 years substantial recent experience in the valuation of first class commercial office premises in the central business district of Sydney" and each being "a full member of the Australian Institute of Valuers and Land Economists (Incorporated) New South Wales Division" (cl 7.2(f) and (k)). Accordingly, the assessment is to be performed by persons who have specialised knowledge by reasons of both qualifications and substantial recent experience in the specific market.
Those matters support a conclusion that the determination of "relevance" to "value" is, like the determination of value itself, a matter for those experts, exercising their judgment and based on their skill and experience. Valuation is an art, and not a science: Strike Australia at [9]-[10]. One consequence is that it will involve subjective judgment, with there being significant scope for legitimate variations in approach and method: Strike Australia at [11]-[12].
Secondly, the fact that one particular matter is specified in the definition as a "relevant factor" for determining "the value of the Stratum" cannot limit the range of relevant factors, particularly where the specified factor is preceded by the words "including, without limitation". Generally, matters said to be "included" within a definition are not taken to be exhaustive: see, for example, Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368 at [166] per McColl JA. In any case, the matter is put beyond doubt by the use of the words "without limitation". In Barob Pty Ltd v Commissioner of Stamp Duties (Qld) [1999] 2 Qd R 468 at 478, Pincus JA and Derrington J commented as follows: "Counsel have not referred us to any authority, nor have we found any, in which a statutory explanation of meaning of a word, expressed to be inclusive only, has been treated as exhaustive, although the explanation is also said not to limit meaning. It is one thing to read 'includes' as 'means', and a more drastic step to read 'without limiting [its] meaning' as 'by way of limiting its meaning'."
Thirdly, the factor which is specified as a relevant matter is "the potential to construct commercial office premises within the Stratum". I do not consider that such potential is a matter to be assessed in the abstract. The "Market Value of the Stratum' is, pursuant to clause 7.2 of the CP Lease, to be determined at specific points in time during the term of the CP Lease. Clause 7.2(a)-(b) provides that, at the expiration of the first three years of the Term (namely, as at 30 October 1994) and at the end of each subsequent three-year period during the Term, the Market Value of the Stratum "must be revised to the then current Market Value of the Stratum" (emphasis added). In order to assess the "current" Market Value of the Stratum, it is relevant to have regard, as specified in the definition, to the "current" potential to construct commercial office premises within the Stratum. In assessing that current potential, it would (or might be) relevant to have regard to the improvements and structures outside the Stratum including, relevantly, whether there is currently a built structure in the area below and surrounding the Stratum, and whether there are currently means of (and rights of) access from that existing structure to the Stratum.
The Plaintiff submitted that, because the Stratum is located on levels 1 to 7 of the Building, it relied for its very existence, "otherwise than as air", on "the support of the structural elements provided beneath it and laterally", and added: "The very concept of a market valuation assumes the existence of a market for the Subject Stratum. If the Subject Stratum does not and cannot exist (in the sense that it cannot be used at all), at least as a practical matter, there can be no market for it."
Those matters support the conclusion that, in determining the current potential for a particular form of use at the valuation date (namely, the potential to construct commercial office premises within the Stratum), and therefore in determining the value of the Stratum, it is necessary to take into account whether or not there exists, at the date of valuation, "structural elements beneath it and laterally".
The Rawlinsons Report itself illustrates that the existence of a structure in the area below the Stratum as at the date of valuation is relevant to an assessment of the current potential to construct commercial office premises within the Stratum. If, at a particular assessment date, there was no built structure in the area below the Stratum, it would be necessary for the very substantial costs of constructing such a structure to be incurred in order for that potential to be realised.
Taking into account the existence of the built structure below the Stratum as at the date of assessment does not involve making any assumption that the Stratum has the benefit of existing easements of support, shelter or access from any other Lot. Insofar as a valuer considers that it is necessary or relevant to make some allowance for the costs of negotiating and obtaining such rights (for example, because they represent a cost of realising the potential to construct commercial office premises within the Stratum), any such allowance would presumably take into account the circumstances as they exist at the time of the valuation. For example, it would appear to be (or might be) relevant, in assessing the cost of obtaining for the Stratum an easement of support and rights of access from Lot 422, to know (a) whether there is as at the date of the assessment an existing built structure in the area of Lot 422 and the Stratum (as is the case), (b) whether Lot 422 has an existing easement of shelter and rights of access from the Stratum, and (c) whether Lot 422 and the Stratum are owned by the same entity.
Accordingly, accepting the Plaintiff's submission that it is necessary for the valuer to identify the bundle of rights comprising the freehold Stratum, and not to assume that the Stratum has any rights of access or easements of support or shelter which it does not in fact have, it does not follow that, in terms of the Plaintiff's first declaration, the valuer is not permitted to take into account "improvements or structures, or anything else outside the [Stratum], that could provide access to and support and shelter for the [Stratum]". Instead, it may be relevant and necessary to take those matters into account in order to determine (if relevant) the ease and cost of obtaining any rights of access or easements of support or shelter.
Fourthly, only two matters are identified in the definition of the "Market Value of the Stratum" as factors which are to be disregarded, namely, "the existence of this Lease and improvements constructed within the Stratum". It follows that, as the definition specifies, the valuer is to have "regard" to "all" other "relevant factors".
Fifthly, the terms in which these two exclusions are expressed are significant.
Dealing with the second exclusion first, the definition of "Market Value of the Stratum" requires only that "improvements constructed within the Stratum" (emphasis added) be disregarded. However, the Plaintiff seeks a declaration that "improvements … outside the [Stratum]" must also be disregarded. That proposition finds no footing in the terms of the definition of "Market Value of the Stratum", and is at odds with the language used. If the parties had intended that improvements outside the Stratum should be disregarded, then it would have been a simple matter to have stated, in the relevant definition, that "improvements" should be disregarded, which would apply to improvements both inside and outside the Stratum. Alternatively, the parties could have stated that, in determining the value of the Stratum, it is necessary to disregard "the Building" (which is a defined term in the CP Lease, meaning "the building constructed within the Land"). However, by specifying that the determination of value should proceed without regard to "improvements constructed within the Stratum", the definition conveys that other improvements (which are not constructed within the Stratum and thereby are, necessarily, "improvements outside the Stratum") are to be taken into account insofar as they are "relevant" matters for determining value, including because they are relevant to determining the current potential to construct commercial office premises within the Stratum.
Turning to the first exclusion, it is "the existence of the Lease" which must be disregarded in determining the value of the Stratum. The definition does not require the valuer to disregard the existence of either the "Strata Plan" (defined as the leasehold strata plan registered in respect of the Stratum, that is, Strata Plan 39993) or the "Strata Scheme" (defined as the leasehold strata scheme constituted on registration of the Strata Plan, that is, Scheme SP39993). As noted at paragraphs [46]-[49] above, it was the registration of Strata Plan 39993 which led to there being implied, as appurtenant to the Lots and common property comprising Scheme SP39993, an easement for their support and shelter by other parts of the building.
The Plaintiff pointed out that s 8(3) of the Strata Titles (Leasehold) Act required that a strata plan lodged for registration be accompanied by a lease to be registered under the Real Property Act 1900 (NSW), and that a strata plan would be treated as registered only when the lease was so registered. On this basis, the Plaintiff submitted that the requirement to disregard "the existence of the Lease" meant that it was necessary to disregard "the existence of the leasehold strata Scheme" which "only came into existence by reason of the registration of the CP Lease".
I do not accept that submission. It does not follow from the requirement to disregard the existence of the CP Lease, that it is necessary to disregard anything which has in fact occurred as a result of the existence of the CP Lease. (Taken to its logical conclusion, such a proposition would require the valuer to disregard the instructions which are given to the valuer pursuant to the CP Lease.) In response to this submission, the Defendant referred to the decision of the Privy Council in Tezner v Colonial Sugar Refining Co Ltd [1958] AC 50. In that case, land in Fiji on which a sugar mill was located was to be valued on an unimproved basis. The Privy Council held (at 57) that it was the physical improvements on the land which were to be excluded from consideration (relevantly, the sugar mill and its associated buildings), and the valuer was entitled to take into account that the land was located in a community in which there was an active sugar manufacturing industry. Similarly, the requirement to disregard the existence of the CP Lease is not a requirement to disregard the fact of the registration of Strata Plan 39993 (even though it was only registered on the registration of the CP Lease), or the easements which were in fact implied for the benefit of the Lots and common property comprising Scheme SP39993 upon the registration of the Strata Plan. Those are matters which are able to be taken into account in so far as they are "relevant factors", and it is for the valuer to determine whether or not they are relevant.
This is not to say that the valuer may assume that the freehold Stratum has the benefit of easements which are in fact appurtenant to the Lots and common property comprising Scheme SP39993. However, the valuer might conclude that it is relevant, in considering the potential to construct commercial office premises within the Stratum, and in assessing whether to make some allowance for the cost of obtaining easements of support and shelter or rights of access in order to realise that potential (and, if so, the likely difficulty or expense involved in obtaining such rights), to take into account the fact that the Lots and common property comprising the leasehold strata scheme within the Stratum already enjoy the benefit of such rights. Whether or not those matters are so relevant is a matter for the valuer to determine.
In summary, the terms of the definition of "Market Value of the Stratum", which are set out and considered above, are inconsistent with the terms of the declarations sought by the Plaintiff. In particular, they are inconsistent with the Plaintiff's central proposition that "improvements or structures or anything else outside the [Stratum] that could provide access to and support and shelter for the [Stratum]" must be disregarded for the purposes of determining the value of the Stratum. Such an interpretation does not find support in the text.
Instead, the text of the definition of "Market Value of the Stratum" supports the Defendant's interpretation, namely, that it is for the valuer to identify, and have regard to, factors which are relevant for determining the value of the Stratum, applying their skill and expertise, and no relevant factors are to be excluded from this assessment other than those specified in the definition.
The Defendant's interpretation does not involve assuming that the freehold Stratum has the benefit of easements or rights of access which it does not in fact have. It remains at all times "the Stratum" which is to be valued. However, the determination of "the value of the Stratum" must have regard to all "relevant factors", except insofar as the definition specifies otherwise. In particular, there is no textual basis for concluding that, in making that determination, the valuer must exclude "improvements or structures, or anything else outside the [Stratum] that could provide access to and support and shelter for the [Stratum]". Those matters may be taken into account in assessing the value of the Stratum, if the valuer determines that they are relevant to that assessment.
The Plaintiff referred to a number of authorities which involved the interpretation of statutory provisions or of contractual clauses in different terms. In circumstances where the resolution of the current controversy depends on the proper construction of a particular defined term in a bespoke agreement, with reference to its text and context, there is, as a general matter, little to be gained by considering the interpretation given to different texts in different contexts.
Two authorities which received particular attention in the Plaintiff's submissions were Toohey's Ltd v The Valuer-General [1925] AC 439 and Commissioner for Railways and Sydney City Council v Valuer-General [1961] NSWR 977.
In Toohey's, the question concerned the assessment, pursuant to a statutory provision, of the "unimproved value" of land on which stood buildings occupied as licensed premises. The Valuer-General arrived at a valuation by determining the value of the land if sold as licensed premises, and then deducting the value of the buildings on the land. The Privy Council held that the valuation was not in accordance with the statutory provision. That is because the figure used as a starting point - namely, the value of the land if sold as licensed premises - comprised three elements: first, the bare land; secondly, the buildings constructed for, and appropriate for, licensed premises; and thirdly, the enhanced value due to the fact that the land and buildings are not only suitable for licensed premises, but are in fact licensed premises. The Valuer-General deducted only the second element, leaving the third included in the assessment of the unimproved value of the land.
Similarly, Commissioner for Railways was a case involving an assessment by the Valuer-General of the unimproved value of land, pursuant to the provisions of the Valuation of Land Act 1916 (NSW). The land in question was a space or stratum which had been created by the excavation of rock and soil, and which was leased to Lawrence Dry Cleaners. Owen J (at 980) referred to Toohey's, and observed that for the purpose of determining the unimproved value of land, "improvements on it or appertaining to it are to be assumed not to be there". The application of this principle on the facts of that case caused the following problem: "The thing to be valued [the space created by excavation] was itself an improvement … and there cannot … be an unimproved value of that which is itself an improvement" (at 980). Likewise, Hardie J said that the "floor space in question is part of the building" and "has no existence or reality except as part of the building"; and that because the "statutory assumption … negatives the very existence of the building", it is "impossible to attribute an unimproved value to part of the building or, in other words, to the section of the basement leased to the Lawrence Co" (at 986-987). Ferguson J agreed with each of Owen and Hardie JJ (at 980).
These decisions are of marginal relevance to the present dispute. Here, the definition requires that the determination of value disregard "improvements constructed within the Stratum". There is no dispute about the meaning or application of that element of the definition. Instead, the issue is whether, in determining the value of the (unimproved) Stratum, it is permissible to take into account improvements outside the Stratum, and in particular, improvements or structures (in the form of the Quay West Building) which provide access to, and support and shelter for, the Stratum. That is a matter to be determined having regard to the terms of the particular definition at issue.
A decision which is closer to the facts of this case is that of Windeyer J in Perpetual Trustee Company Ltd v Sydney Cove Authority (NSWSC, unrep., 9 March 1993), to which the Defendant referred. This decision concerned a lease of Lot 421 in Deposited Plan 793830. This is the location of the underground commercial car park of the Quay West Building. The lease contained a definition of the "Market Value of the Stratum Parcel", in terms bearing some similarities with the corresponding definition in the CP Lease: "Market Value of the Stratum Parcel means the value of the stratum parcel forming part of the Land and to which this Lease relates (excluding any improvements and structures erected or constructed by any Lessee thereon) determined specifically for the purposes of this Lease having regard to all relevant factors including but without prejudice to the generality of the foregoing its development potential provided that such potential shall be assumed to be the potential to erect within the subject stratum parcel premises similar to the Commercial Car Park and the retail area, but disregarding the existence of this Lease."
In Perpetual Trustee, the lessee sought a declaration that could be seen as the converse of the one sought here, namely, that "the development potential of the stratum parcel should be determined on the assumption that such other improvements as exist on the land but outside the stratum parcel as at the date of the valuation are in place at such date" (emphasis added).
Windeyer J declined to make any declaration in those terms. His Honour said that such a declaration "would be a direction to a valuer", and continued as follows: "As a matter of discretion I would not make that declaration as I consider the question to be a matter for the valuer. Improvements on other land in the vicinity may equally have some bearing on the matter but those in the same way would seem to me to be a question for the valuer. … this seems to me to be a matter of valuation rather than a matter of interpretation or construction and I do not think it desirable in those circumstances for any declaration to be made."
In the present case, the definition of "Market Value of the Stratum" requires "regard" to be had to "all relevant factors" in determining "the value of the Stratum". Only one matter is specifically identified as a relevant matter to be taken into account (expressly without limiting any other relevant factors): namely, "the potential to construct commercial office premises within the Stratum". Only two matters are specified as matters to be disregarded: namely, "the existence of [the CP Lease] and improvements constructed within the Stratum". Otherwise, it is left to the valuer, exercising skill and experience, to determine what are "relevant factors" for the determination of the value of the Stratum.
As I have explained above, I do not consider that the text of the definition supports the Plaintiff's contention that the valuer must also disregard "improvements or structures or anything else outside the [Stratum] that could provide access to and support and shelter for the [Stratum]". The question whether such matters are relevant or not, and therefore whether regard is to be had to such matters in assessing value, is a matter which is left to the valuer to determine.
The Defendant's construction achieves a businesslike interpretation of the CP Lease and makes commercial sense. The purpose or object achieved by clause 7.2 of the CP Lease, to which the definition of the "Market Value of the Stratum" relates, is the triennial re-valuation of the rent payable under the Lot Leases. As is commonly the case in rent review provisions in commercial leases, the re-valuation must disregard improvements constructed within the Stratum (otherwise, the rent payable by the lessee might be increased as a result of improvements made by the lessee). However, there is no similar commercial justification for valuing the Stratum divorced from, and without regard to, its physical context as at the date of valuation and, in particular, without regard to the fact that it is situated within a constructed building, between a car park and a residential development, these being (in terms of the Plaintiff's proposed declaration) "structures outside the [Stratum], that could provide access to and support and shelter for the [Stratum]".
It follows that the Plaintiff has not established a basis for the first declaration it seeks, and therefore has not established a basis for the second declaration, which is the corollary of the first, or for the third declaration, which is consequential upon the first and the second.

Owners Corporation Strata Plan 39993 v Place Management NSW

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