Perisher Blue Pty Limited as trustee for the Snow Trust (Applicant) challenges the land value determined by the Valuer General (Respondent) under the Valuation of Land Act 1916 (NSW) (Valuation Act) for the land known as "Celmisia", 37 Burramys Road, Kosciuszko National Park (Subject Land) for the base dates 1 July 2019 and 1 July 2020 (Valuation Years). The title details for the Subject Land are identified in Schedules 1 and 2 to the orders at [87] below.
Pursuant to ss 6A and 14A of the Valuation Act, the Valuer General determined the land value of the Subject Land the following amounts:
1. 1 July 2019 - $39,300,000; and
2. 1 July 2020 - $39,300,000.
The Applicant made an objection to the Valuer General in respect of each value. The Valuer General allowed each of the objections and determined the value in the following amounts:
1. 1 July 2019 - $35,367,000; and
2. 1 July 2020 - $33,414,000.
The Applicant was dissatisfied with the determination of the objections and appealed pursuant to s 37 of the Valuation Act on grounds that the values determined were too high.
[2]
Facts
The parties tendered an Agreed Statement of Facts from which the facts that follow have primarily been drawn.
The Applicant is the lessee under Consolidated Mountain Lease AH735089 of 78 lots (or 145.369 Ha) of land located in the Kosciuszko National Park (Leased Land).
The Applicant is the beneficiary of a non-exclusive licence agreement (Licence) facilitating the use of a further 1313 Ha around and adjoining the Leased Land (Licenced Land).
The Leased Land and the Licenced Land, taken together, are commonly known as the Perisher Ski Resort. The Subject Land includes locations known as Perisher Valley, Smiggin Holes, Blue Cow, Guthega ski fields, and Bullocks Flat Skitube terminal.
The Subject Land is zoned E1 National Parks and Reserves under the Snowy River Local Environmental Plan 2013.
The Kosciuszko National Park Plan of Management identifies the Subject Land in the Alpine Resort Zone, which is regulated under the State Environmental Planning Policy (Kosciuszko National Park - Alpine Resorts) 2007.
The highest and best use of the Subject Land is for development for a ski resort comprising residential, commercial, industrial and infrastructure components involving ski lifts, slope grooming, ski tube and associated works. The existing improvements reflect that use.
The existing improvements on the Subject Land comprise various ski lifts, staff lodges, commercial sites (Bullocks Flat Skitube terminal, Perisher and Blue Cow Skitube terminals, and Perisher ski centre), Bilston Skitube tunnel, Blue Cow Skitube tunnel, the railway track between Bilston Tunnel and Bullocks Flat, and miscellaneous use sites for workshops, kiosks, and pump stations.
The Leased Land and the Licenced Land were valued separately pursuant to s 28A of the Valuation Act.
The parties had at the date of the commencement of the hearing, agreed the appropriate value to be attributed to the part of the Subject Land that comprised the Licenced Land. The value as agreed by the parties was:
1. $4,000,000 for valuation year 1 July 2019; and
2. $3,600,000 for the valuation year 1 July 2020.
On the basis of that agreement the parties further agreed that the only matter for determination in these proceedings was the value of the Leased Land. A separate determination of value of the Leased Land and the Licensed Land is required by virtue of the operation of s 28A that provides:
28A Land of which part only is ratable or taxable
If land in respect of which one valuation would otherwise be made under this Act is ratable or taxable as to part only, the part that is ratable or taxable is to be separately valued.
Only the Leased Land is relevantly ratable or taxable.
The parties had further agreed that the value of the 2019 valuation year was required to be determined. The determination of the value for the 2020 valuation year would be the 2019 valuation year rate discounted by 10%.
[3]
Legislative provisions
The Subject Land is to be valued in accordance with the requirements of s 6A of the Valuation Act which 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) Notwithstanding anything in subsection (1), in determining the land value of any land it shall be assumed that:
(a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and
(b) such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used,
but nothing in this subsection prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subsection (1) had not been made.
…
In the circumstances of this case, the Subject Land is comprised of numerous separate titles which adjoin each other, and which are for the purposes of the Valuation Act relevantly taken to be "owned" by the Applicant. Accordingly, the valuation is to be conducted in accordance with the requirements of s 26 which provides:
26 Where lands are to be included in one valuation
(1) Where several parcels of land adjoin, are owned by the same person, and where no part is leased, they shall be included in one valuation, unless the Valuer-General otherwise directs: Provided that any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation.
(2) Where several parcels of land adjoin, are owned by the same person and are all let to one person, they shall be included in one valuation, unless the Valuer-General otherwise directs.
(3) This section does not apply to land which is required, by section 27B, to be separately valued or included in one valuation.
[4]
Issues for determination
The parties each accepted that the appropriate valuation methodology was the direct comparison method based upon an analysis of comparable land sales. The parties also agreed that there was no identifiable sale directly comparable to the Subject Land. By necessity, sales of land with sufficiently similar characteristics were to be identified and adjustments made to render the sales sufficiently comparable to inform a determination of the unimproved value of the Subject Land.
Where the parties' positions diverged was in the selection of the comparable sales. The inherent difference in approach varied significantly, in that:
1. The Applicant contended that it was appropriate to identify sales of englobo unimproved land with the capacity for tourist development and make necessary adjustments to render such land comparable to the Leased Land; and
2. The Respondent contended that each of the components of the Leased Land should be identified and comparable sales for such components should be adjusted to render such sales comparable to the identified component and, thereafter, aggregated to determine the total unimproved land value of the Leased Land.
It is therefore necessary to determine which of these approaches is appropriate in the present valuation exercise.
Within each of the approaches to the comparable sales the expert evidence adduced had differing opinions with respect to the appropriate adjustments to be made to render the sales relied upon as comparable. After the determination of the approach to identification of comparable sales the appropriate adjustments to render the sales comparable must then be determined.
In addition, the Applicant identified what it characterised as a "legal case". It was contended that as the Subject Land is a National Park it is subject to the provisions of the National Parks and Wildlife Act 1974 (NSW) (NP&W Act). The NP&W Act has within it a number of provisions that affect the rights of the notional landholder in fee simple such that those provisions would affect value. As the NP&W Act is an act of general application it must be considered to the extent that it affects value on a determination of the values for the purposes of the Valuation Act: Perilya Broken Hill Ltd v Valuer-General [2015] NSWCA 400 at [31], [36] and [88]; Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610 at 621-625; and Valuer-General of New South Wales v Fivex Pty Ltd (2015) 206 LGERA 450 at [15].
The Respondent did not accept that the "legal case" arose either in law or on the facts of this case.
[5]
Evidence
The Court, in the company of the parties, their experts and representatives took an inspection of the significant components of the Leased Land. In addition, inspections were undertaken of the comparable sales.
Documentary evidence was also tendered.
The primary evidence was adduced from expert valuers: Mr Michael Dyson and Mr Denis Lovell. These experts prepared a number of written reports and joint expert reports. In addition, each expert was cross-examined on their evidence.
[6]
Applicant's valuation evidence - Michael Dyson
The Applicant adduced expert evidence from Mr Michael Dyson, valuer.
Mr Dyson considered that as the Leased Land was to be valued on the statutory assumption that it was: unimproved land; capable of continuing to be used for its highest and best use as a ski resort; and with a total land area to be valued in the order of 145 Ha, that it was appropriate to identify vacant lots within the locality with similar potential for tourist development and of a similar size.
Mr Dyson, adopting the approach identified by him, primarily relied upon two sales of englobo land in proximity to the village of Jindabyne. With respect to these two sales, he stated in his expert report (Exhibit D) at [59]-[60]:
59. It is noted that the R1 General Residential zoning permits Community facilities; Dwelling houses; Eco-tourist facilities; Environmental facilities; Hostels; Markets; Multi dwelling housing; Neighbourhood shops; Residential accommodation; Residential flat buildings; Shop top housing; Tourist and visitor accommodation. Therefore, the permitted uses are broader than those for the subject property.
1. 1 Old Kosciusko Road, East Jindabyne - Gently sloping fully cleared site of 31.89 Ha to the immediate east of Jindabyne village being located on a peninsula into Lake Jindabyne providing the site with views over the lake and access via a reserve around the site, sold at $70,436/Ha in October 2019 to developer. To be rezoned to R1 General Residential. Smaller property considered vastly superior in location and possible uses.
2 Lot 12 Kosciusko Road and Barry Way, Jindabyne - Gently sloping mostly cleared site of 47.76 Ha to the immediate west of Jindabyne village with northerly aspect providing the site with views over the Jindabyne, sold at $31,407/Ha in June 2019 to developer. Partly zoned R1 and R2 Residential at sale and balance to be rezoned for Residential uses. Smaller property considered superior in location and possible uses.
60. Based on the above sales, the maximum value for the area occupied under Registered Lease No: AH735089 is considered to be $30,000/Ha as both the above sales have superior development potential.
To distinguish between these two sales in the evidence the first sale was referred to as the Lake Sale and the second sale was referred to as the Hill Sale, I will adopt those identifiers.
Mr Dyson rejected the approach of Mr Lovell (below) on the basis that:
1. The ski resort operates as a consolidated interdependent single use. The characterisation of the component uses in the manner proposed by Mr Lovell was artificial and did not accurately reflect the nature of the highest and best use or the value that would be paid for the Leased Land to enable that use to be undertaken;
2. The sales relied upon by Mr Lovell are all of a much smaller size which correspondingly inflates the rate/sqm;
3. There is no market evidence that the "snow line" location affects land value; and
4. There is no market evidence that an appropriate rate for residential uses in a ski resort is determined on a per bed basis, to do so inappropriately inflates the land value.
[7]
The Respondent's valuation evidence - Denis Lovell
The Respondent adduced evidence from Mr Denis Lovell, valuer.
Mr Lovell was of the opinion that Mr Dyson's selection of comparable sales was inappropriate as:
1. Neither of the sales relied upon were suitable for development as a ski resort;
2. Each of the sales were below the snow line which position is inferior to the Subject Land;
3. Neither of the sales permitted commercial development of a type as comprised in the ski resort; and
4. The highest and best use as a ski resort provides for a mixed development including commercial and industrial uses. To utilise sales that preclude the highest value potentials is to understate the value.
Mr Lovell considered that in light of the highest and best use the appropriate approach was to identify the elements of the ski resort as either: residential; commercial; industrial; or infrastructure. The identification of these elements reflected the nature of the use that the components of the Leased Land and what a purchaser would pay to purchase unimproved land with the potential to utilise it for the stated purpose.
Thereafter, sales of land for such purposes were identified in the general locality and adjustments made to render them comparable to the Leased Land. The adopted adjusted rate was then applied to the relevant category of land and aggregated to determine a final value.
On the basis of the sales identified by Mr Lovell, he adopted the relevant adjusted rate for each category for the 2019 valuation year as follows:
1. Residential-determined on a per bed basis - $43,000 per commercial bed and varying from $10,750 to $21,500 per staff bed depending on location (as adjusted to reflect the further adjustments made in Exhibit 6);
2. Commercial - $650/sqm;
3. Industrial - $125/sqm; and
4. Infrastructure - $62.50/sqm.
[8]
Applicant's submissions
The Court would accept the approach of Mr Dyson over that of Mr Lovell as Mr Lovell had confused what the "market" involved. The purchaser of the Leased Land takes the whole parcel (145 Ha) accounting for both the risks involved and possible economic returns of the totality of the Leased Land. To value the whole on the assumption that any small part of the land has its value derived from only the constitutive activities, transactions and processes involved in that use attributes value to those parts only and assumes that as accruing only because of the benefits of those components. Such methodology crucially fails to account for the costs or risks involved in the operation as a whole. This infects the whole analysis: the allocation of components of the total to different commercial returns also confuses the so-called "industrial" and "infrastructure" uses with what are in fact ancillary operations of the total use. All of these components are properly understood as representing benefits only when these are brought into balance with the costs and risks involved in the total commercial/tourism use. This is why large sales representing a similar objective are inherently more reliable than the amalgam/piecemeal method of Mr Lovell.
[9]
Respondent's submissions
Mr Lovell is a valuer of some 48 years' standing with experience in valuations in alpine areas and Jindabyne, as well as for Mount Selwyn and Charlotte Pass Ski Resorts. Mr Lovell carried out his valuation of the Leased Land with close attention to the task prescribed by s 6A of the Valuation Act and with due regard for "land improvements".
The use of comparable sales to determine land value is traditional and unexceptional: Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 at [16]. The highest and best use of the Leased Land is for development for a ski resort comprising residential, commercial, industrial and infrastructure components involving ski lifts, slope grooming, ski tube and associated works, and the existing improvements reflect that use. Accordingly, Mr Lovell appropriately analysed a range of residential, commercial, and industrial/infrastructure sales evidence.
Given the unique nature of the Leased Land and the fact that there were no freehold sales of ski resorts in Australia, precisely comparable sales were not available. That is no impediment to the comparable sales technique - the process involves selecting potentially useful transactions; carefully analysing them to determine if they are comparable; and making appropriate adjustments as required: Lenz Nominees Pty Ltd v The Commissioner of Main Roads [2012] WASC 6 at [114]-[118] per Edelman J. Mr Lovell has done so and, importantly, explained his reasoning behind why adjustments were or were not made.
In this case, in the absence of a sale of land for a ski resort it is preferable and more logical to use the piecemeal approach which reflects each of the different uses able to be undertaken on the Leased Land.
Whilst Mr Dyson's Hill Sale and Lake Sale have the potential to be used for some tourist purposes associated with the lake, neither sale have the potential to be used for something equivalent to a ski resort.
[10]
Findings on choice of comparable sales
The consequences of the legislative requirements that identify the manner in which the Leased Land is to be valued, is that the land must be valued as if it was, at the valuation date, unimproved, as that term is defined, but with the potential to be continued to be used for its present use. On the agreed facts, the present use is the highest and best use of the Leased Land. Further, whilst the Leased Land comprises multiple separate lots, it is to be valued in a single valuation, in effect as if it were a single parcel on the assumption that the Applicant holds the fee simple to that parcel.
The highest and best use was agreed at [5] of Exhibit 5 to be:
The highest and best use of the subject parcel is for development for a ski resort comprising residential, commercial, industrial and infrastructure components involving ski lifts, slope grooming, ski tube and associated works. The existing improvements reflect that use.
That highest and best use is, in its most essential form, a ski resort. To the extent that there are components that, in a town planning sense, could be characterised as commercial, residential, industrial or infrastructure does not derogate from the overarching purpose of the ski resort. Each of the component parts exists to serve the purpose of attracting people to and retaining people on the ski slope. The commercial advantage of such attraction is the derivation of a commercial return for the use of the infrastructure such as the ski lifts.
Absent the ski resort the residential, commercial and industrial components would not exist, and as such, these uses are inextricably linked to and form part of the broader ski resort. To attempt to divide the uses is to ignore the dependence upon the ski resort. To treat the component uses as separate and somehow independent from the ski resort use is to value the land as something other than the highest and best use. The highest and best use is a ski resort, not commercial land, residential land, industrial land or infrastructure land. Critical to this case is that each of the identified components would not be capable of being used for those purposes absent the ski resort use. To apply the separate characterisation is to determine a land value for a different use to that required by the provisions of s 6A. Such an approach would be contrary to the statutory assumptions that must be made.
The difficulty with the approach of Mr Lovell is starkly illustrated by an examination of the rates determined by him at [36] above. By adopting his approach, the most valuable component of the Leased Land to a purchaser, being the income producing infrastructure, is the land of the lowest value per square metre. By way of example, a bed that would accommodate a single worker to support that infrastructure is 170 times more valuable than a square metre of infrastructure. This analysis illustrates that the approach adopted by Mr Lovell has the consequence of not valuing the Leased Land for its highest and best use.
In light of the highest and best use as identified, I prefer the evidence of Mr Dyson. I accept the submissions of the Applicant that a purchaser of the unimproved fee simple of the Leased Land would be purchasing the whole of that land for the purposes of facilitating the integrated ski resort on an englobo basis, and would not, in those circumstances, artificially separate out the component parts and attempt to compare those parts to land that has a capacity to separately operate for that purpose.
For those reasons, I consider that the comparable sales identified by Mr Dyson are more comparable to the Leased Land, subject to appropriate adjustments that are dealt with below. I reject the sales relied upon by Mr Lovell as being capable of being rendered sufficiently comparable to the Leased Land as they each rely upon a sale for a separately characterised use to that of the highest and best use, namely as a ski resort.
[11]
Michael Dyson
Mr Dyson considered that the appropriate "ceiling", that is the highest value able to be attributed to the Subject Land, was that derived from an adjustment to the Hill Sale.
Both of the sales relied upon by Mr Dyson were of land that was capable of being developed for tourist facilities, being a use akin to a ski resort. He considered that the value derived by the utilisation of both the Hill Sale and the Lake Sale required adjustment to the Leased Land to reflect the fact that both of his sales were zoned (or about to be rezoned) to permit permanent residential development independent of a tourist use. That capacity for permanent residential development gave the Hill Sale and the Lake Sale a superiority in value, thereby requiring a negative adjustment to be comparable to the Leased Land.
Further, sales in proximity to the village of Jindabyne had the attraction of year-round demand, whereas the ski resort had the demand limited to the ski season which in Australia was in the order of 16 weeks per annum.
Mr Dyson, whilst taking the Lake Sale into account, considered its value was superior to the Hill Sale due to two factors: its proximity to an "attraction" for tourism as it was located on the shore of Lake Jindabyne; and the topography of the site was more gently sloping, making it easier to build upon. Whereas the Hill Sale was of a more challenging topography, making it more comparable to the topography of the Leased Land.
My Dyson, whilst identifying that adjustments should be made to reflect superiority did not quantify the extent of any adjustment as a numeric integer.
[12]
Denis Lovell
Mr Lovell considered that both the Hill Sale and the Lake Sale required adjustment to reflect the premium paid for above snow line properties. Where the attraction is for skiing an on-snow location was highly desirable and would increase the value paid for any such land. Neither the Hill Sale nor the Lake Sale were located above the snow line.
As neither sale was above the snow line, they would be unable to be developed for the highest and best use as a ski resort.
Mr Lovell did not quantify the amount of any such required adjustment but noted that it would be an upward adjustment.
[13]
Applicant's submissions
Mr Dyson's evidence demonstrated a background of general sales, being "sales of properties in the general area of the Snowy Mountains region". Such sales, were properties of "similar size" that showed: a market land value range from $1,777/ha to $70,436/ha of site area, with the rate generally aligning with the site area and potential uses, with the sales above $13,000/ha being either zoned for low density development or highly improved.
The Applicant also relies on the value of the Licenced Land determined by the valuers to be at $4,000,000 for 2019. The Licenced Land is a very large parcel (1313 Ha) compared to 145 Ha of the Leased Land. That land also adjoins the Leased Land and, as a parcel sold together, could be co-ordinated with the Leased Land so as to unlock economic benefits from the ability to improve the Leased Land. This shows a rate of $3,046/Ha. This rate fits comfortably with Mr Dyson's (eventually) derived rate of $30,000/Ha for the Leased Land - representing an adjustment for size and a recognition of the necessity of the Leased Land to carry out the works needed for the highest and best use.
In respect of that derived rate, the Applicant relies on the two sales representing the potential for development in a similar or higher density manner to the subject without the restrictions imposed by the National Parks requirements (such as limited access in winter and the number of beds allowable). In addition, development on the sales properties can include dwellings for long term ownership and occupation. Those are:
1. The Lake Sale - sold at $70,436/Ha in October 2019; and
2. The Hill Sale - sold at $31,407/Ha in June 2019.
So analysed, Mr Dyson attributes value to the Leased Land at $30,000/Ha amounting to a determined land value of $4,405,800.
Each of Mr Dyson's sales were sold to a developer and for a development purpose. That development purpose could include permanent residential dwellings or a tourism and visitor accommodation. As such, Mr Dyson's sales represent the market expectation of an economic return based on either the residential or a tourist use. It is proper to assume that the purchasers of those lands competed in terms of achieving the best economic return perceived as available in that market at that time.
However, as the Hill Sale and the Lake Sale had the prospect of residential development, Mr Dyson identified that both sales should be considered to be superior to the Leased Land which did not have residential potential.
The primary dispute of the Respondent appeared to be that development for a "ski purpose" is, somehow just simply more valuable than any other possible tourism and accommodation use or residential use. This approach should be rejected as the Respondent provides no evidence at all that this is the case. Whilst the Court acts as judicial valuer any determination cannot be "untethered" from the evidence and in this case there is simply no evidence to support the submission made.
For Mr Dyson, the Hill Sale at $31,407/Ha represents a logical "ceiling" for vacant land that is like the Leased Land as it is: large; similarly developable; within a near location; and with the transaction at the right time. But the Leased Land can only usefully be used for tourism and visitor accommodation and not for strict residential purposes. As a matter of valuation logic it cannot be valued higher than the Hill Sale. The adoption of the Hill Sale as the ceiling for value also reflects the other qualities of the Leased Land that make it hard to develop and hard to manage, such as the hilly topography, and the impacts of snow on the capacity to build and the like.
The rate can also accommodate offsetting factors like the scale of the costs and risks involved for a ski resort development being constructed as against any so-called premium applying to that endeavour. The rate of $30,000/Ha is robust in accounting for these offsetting matters by reference to a source of actual transactional evidence without multiple overlapping subjective judgments needing to be made. As noted above, that rate is also harmonious with the derived rate for the Licenced Land.
[14]
Respondent's submissions
Adjustments need to be made to the Hill Sale and the Lake Sale for: location, and for potential use for skiing which relates to the uniqueness of the opportunity that the Subject Land has the benefit of as opposed to potential use for general tourist pursuits which are of lesser value. Effectively what is being captured in the upwards adjustment is the concept that it is very rare to have the opportunity to buy land which is suitable for the ski resort. That potential relates to the unique opportunity for 16 weeks of high value income generating potential which is something quite unique and different from the usual year-round tourist activities that may be undertaken at many locations around the country by many operators.
Whilst the Lake Sale and the Hill Sale may need to be adjusted down to reflect the residential potential of those two sales, a significant increase also needs to be made for the location of the Subject Land.
There is, however, little evidence as to what adjustment should be made for the residential capability. Mr Dyson has given little explanation as to why he adopted the lesser sum of the Hill Sale as being representative of a sale comparable to the Subject Land without any adjustment. He noted that the Hill Sale was quite steep, therefore, was comparable to the Subject Land but in effect makes no other explanation.
If the sales relied upon by Mr Dyson are going to be utilised the Lake Sale is the more comparable as it has adjacent to it an attraction for tourism, whereas the Hill Sale does not. That attraction is the lake and water sports as well as a connection to skiing, albeit from a more distant less desirable location. Therefore, it would have to be adjusted upwards to reflect the benefit of the Subject Land being above the snow line with the on-snow attraction. The Lake Sale is the "floor" of any relevant value as opposed to a "ceiling", as was suggested by the Applicant.
[15]
Findings on adjustments to comparable sales
In considering the englobo sales, I am not satisfied that the Hill Sale is the most comparable such that it would act as a ceiling or otherwise, unadjusted, represent the appropriate land value for the Leased Land. Whilst the Hill Sale has some superiority in its range of permissible uses it also has inferiority in its location to the ski fields and its general attraction for tourist purposes. The extent of any attraction for tourist purposes is that it is reasonably proximate to attractions located on other land, whereas the Leased Land has contained within it the tourist attraction (in the case of the Leased Land it has the control over access to the snow field).
The difference in value indicated by the Hill Sale to the Lake Sale was identified by Mr Dyson as being a closer proximity and relationship to a tourist attraction, namely the lake, and a more gentle topography. A comparison between the Hill Sale and the Lake Sale each of which has a similar land use potential, demonstrates that proximity and relationship to a tourist attraction increases land value.
I, therefore, consider that the Lake Sale with the benefit of the proximity to a tourist attraction is the more comparable sale than the Hill Sale. However, the Lake Sale needs to be adjusted for:
1. Superiority in the range of land uses;
2. Superior topography rendering development easier and less costly; and
3. Inferiority in proximity to the tourist attraction.
I do not consider that an adjustment needs to be made for the fact that the location of the Lake Sale makes tourist uses available over the entire year, as opposed to the 16 week ski season. The intensity of use of the ski fields for a limited period offsets the less intense tourist uses of Jindabyne during the balance of the year. Evidence was adduced that unlike Thredbo, Perisher and Jindabyne do not cater to attract for intense off ski season tourism.
The capacity to quantify such adjustments is extremely difficult as neither valuer gave evidence as to their opinion of the quantification of such adjustments. That, however, does not relieve me of the obligation to determine the value on the evidence available.
Whilst the Applicant has the onus of proving its case (s 40(2) of the Valuation Act), the Applicant's case in these proceedings was that the determined value was too high. By rejecting Mr Lovell's valuation approach, in the circumstances of this case, that onus was discharged. The remaining question is not whether the Applicant's specific valuation amount has been proven, but rather to what extent was the original determination too high.
In this case, the task is rendered difficult, in so far as neither valuers' valuation was appropriate to be adopted. Further, neither valuer had identified, with precision, the numeric quantity of each adjustment necessary to render the comparable sales comparable to the Leased Land. That being said, I am not left without any evidence upon which to determine value. Each valuer identified the character of the relevant adjustment, and in non-numeric terms, the quantum of the required adjustment. Therefore, as is required, I must do the best I can with that evidence to determine value.
On the evidence available, and doing the best I can with that evidence, I consider that the superiority of the Lake Sale to the Leased Land, particularly with its residential capacity would warrant a significant reduction. The capacity to use the land for residential development in a village location that has facilities and infrastructure to support permanent residential use is a valuable commodity in this location.
However, that superiority of land use must be offset against the inferiority in location. The locality of the Lake Sale is in a general sense attractive due to its alpine location and proximity to the ski fields. As is demonstrated by the comparison of the Lake Sale to the Hill Sale proximity to a tourist attraction will improve the value when used for tourism. In this case, the Leased Land is not only more proximate to the ski fields that comprise the Licenced Land but also holds the infrastructure that permits utilisation of the tourist attraction. This proximity to the tourist attraction and ability to provide the access point to the ski fields also requires a significant adjustment.
Doing the best I can on the evidence, I find that the adjustment appropriate to the Lake Sale to render it comparable to the Leased Land is of the same "significance" for the superiority as the "significant" inferiority such that the adjustments "cancel each other out".
Accordingly, I find that the appropriate rate per hectare for the determination of value of the Leased Land is $70,436, derived from a direct comparison to the adjusted Lake Sale.
[16]
Impact of National Parks and Wildlife Act
At the end of the hearing, whilst the Applicant continued to maintain this ground, there was no evidence as to what impact such "restrictions" would have upon value. It was accepted that neither expert had examined the impact on value of the operation of any such restrictions, nor were the witnesses asked to express an opinion in the oral evidence.
The Applicant accepted that there was no evidence of a quantifiable basis upon which to reflect what it said would impact on value. The Applicant ultimately submitted that the impact of the restrictions created by the NP&W Act would "just simply be more comfortable" (Tcpt, 27 February 2023, 162(17)) with Mr Dyson's approach.
I find that in the circumstances of this case there is no utility in determining the legal question as to whether the provisions of the NP&W Act are a law of general application affecting the hypothetical sale in fee simple. As I have, in the ultimate decision for reasons other than a consideration of the impact of the NP&W Act:
1. Largely accepted Mr Dyson's approach; and
2. Determined land value derived from his identified comparable sales, albeit applying a different rate per hectare than that advocated by him;
I do not need to be further comforted in his approach. Further, even if I determined that the NP&W Act was a law of general application, I am unable, on the evidence in this case, to be satisfied that those provisions would affect the land value. Therefore, the determination of the question posed has no capacity to affect the determination of value in this case and would be the determination of a question not necessary for the determination of the appeal.
[17]
Conclusion and orders
For the reasons outlined above, I find that the Applicant has discharged the onus required by s 40(2) of the Valuation Act, in that it has established that the values determined by the Respondent were too high. Accordingly, it is appropriate that a decision is made in place of the decision to which the appeal related.
Accordingly, the Court orders that:
1. Appeals 2021/00220885 and 2021/00220886 are allowed.
2. The land value of the land parcel (being those lots listed in Schedule 1 and Schedule 2 to these orders):
1. For the valuation year 1 July 2019 is determined to be:
1. Schedule 1 (land the subject of Lease AH735089): $10,213,220; and
2. Schedule 2 (land the subject of Perisher Ski Area Licence Deed of Licence): $4,000,000.
1. For the valuation year 1 July 2020 is determined to be:
1. Schedule 1 (land the subject of Lease AH735089): $9,191,893; and
2. Schedule 2 (land the subject of Perisher Ski Area Licence Deed of Licence): $3,600,000.
1. The exhibits are returned.
Schedule 1 - Land under Lease AH735089
Folio identifiers 203/44465, 204/44466, 211/44469, 225/45179, 208/46288,182/257284, 185/257285, 186/257286, 229, 230/704173,188, 245, 246/721845, 11, 32, 45, 102, 103, 143, 144, 145, 151, 157, 173, 177, 179, 181/756697, 22/756705, 266/812198, 67/828332, 500/1171936, 502/1171939, 498/1171941, 493/1171943, 514, 515/1171945, 538/1171946, 520/1171947, 619/1171949, 522, 523/1171960, 504, 505, 506, 507, 508, 509, 510/1171964, 521/1171967, 511, 512, 513/1171969, 539, 540, 541, 542, 543, 544/1171971, 524, 525, 526, 527, 528, 529, 530, 531, 532, 533, 534/1171975, 535, 536, 537/1171976, 516, 517, 518, 519/1171979, 545, 546/1216299 excluding the "Licence Area" as defined in Schedule 2.
Schedule 2 - Land under Perisher Ski Area Licence Deed of Licence
The Land outlined in pink on the Plan attached as Schedule 3 to the Perisher Ski Area Licence Deed of Licence between the Minister for Climate Change and the Environment and Perisher Blue Pty Limited as trustee for the Snow Trust dated 1 May 2009 excluding those areas forming the premises under registered lease AH735089 and any other areas leased or licensed to a third party.
Schedule 3 - Plan of Perisher Ski Area
Attachment
[18]
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Decision last updated: 14 April 2023
Parties
Applicant/Plaintiff:
Perisher Blue Pty Limited as Trustee for the Snow Trust