On 9 March 2023 the Victorian Civil and Administrative Tribunal (VCAT) has sought to settle a much contested area of law in respect to the review of a valuation of land in the preliminary decision in S & JG Investments Pty Ltd v Valuer-General Victoria (Land Valuation)  VCAT 246 (S & JG Investments). In a novel decision, Tribunal President Justice Michelle Quigley and Senior Member Jacono have held that where the grounds of an objection brought under section 22(1) of the Valuation of Land Act 1960 (Vic) (VLA) are that the site value attributed to the land is too high, the Tribunal only has the power to either confirm or reduce the valuation – the Tribunal does not have the power to increase the value as part of the review.
To reach such a conclusion, the Tribunal ostensibly relied upon the terms and words utilised in ss 20 to 25 of the VLA, as well as the purposes and objectives of the legislative scheme. Further, the Tribunal expressed the question to be answered, in light of the parties’ inability to reach agreement on the precise formulation, as follows:
Where the s 17 ground relied upon by an objector in a review application brought pursuant to s 22(1) of the Valuation of Land Act 1960 (Vic) is that the value assigned to the land is too high, what powers does the Tribunal have in the disposition of the review?
Ultimately it is a yes or no question, requiring the returned valuation to be reviewed, and cannot be answered with an entirely new valuation. In this proceeding, the Tribunal’s options applying both s 25 of the VLA and s 51(2) of the VCAT Act were:
The Tribunal made reference to the often occurring controversy where a review of an objection in respect of site value is brought before VCAT and the valuation authority then seeks to rely on a new valuation of an even higher amount than the original returned valuation. In this instance, the VGV had valued the subject property at $11.8 million, as at 1 January 2020. The Applicant objected on the ground the valuation was too high, particularly given the land’s heritage constraints and contamination, contending instead for a site value of $4,593,200. Before the Tribunal, the VGV now contends that the site value as at 1 January 2020 was $40.885 million.
In the S & JG Investments case, the VGV argued, inter alia, that the Tribunal was to stand in the shows of the decision maker when conducting a review and therefore had all the powers and functions of the original decision maker. Section 25 of the VLA and section 51 of the VCAT Act were relied upon to support this submission – particularly the wording in section 25(1) empowering the Tribunal on a review to by order, confirm, increase, reduce or otherwise amend any valuation (emphasis added).
The VGV further contended that the returned valuation was not probative, in that if the evidence led were to take the proceeding in a new direction and away from the original valuation, then that path must be followed and a new valuation formulated.
The Applicant argued that the VGV’s role in deciding an objection was limited to either disallowing it or confirming the recommended valuation, and relied upon s 21(4) of the VLA. An objection or a review to the Tribunal does not, it was contended, provide an opportunity to make an adjustment to the valuation – whether by the VGV or the Tribunal. Accordingly, the disposition in s 25 of the VLA is essentially the list of powers available for all grounds of objection under s 17. According to the Applicant, the power which is applicable will be determined by the grounds for review, in this instance where the ground is that the value assigned is too high, s 25 permits the Tribunal to either confirm or reduce the valuation.
In determining the extent of its own powers, the Tribunal held that the options available are those set out in the VLA at section 25 and are to be read in conjunction with the powers set out in s 51 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act). The Tribunal also emphasised that the powers on review under s 25 are to be exercised ‘as the case requires’. This was taken to mean that each individual powers listed in s 25(1) can be relevant and available, or not, depending on the specific proceeding. Further, the Tribunal is not itself undertaking a separate valuation, it has to act fairly and according to the substantial merits of the case.
Reference was made to the decision of the Tribunal in ISPT Pty Ltd v Melbourne CC  VCAT 1647, in which Gadens acted for ISPT, and the legislative amendments to the VLA following that decision. The Tribunal stated that it is a distraction to read anything into the words ‘in determining the correct site value of the land’ in s 24(3) of the VLA, which was added to the legislation.
In reaching its ultimate decision the Tribunal held that to permit the VGV to now contend for a higher figure, and ignore the process and information which led to the decision under review, “would undermine the structure, process and integrity of the VLA“. The grounds for an objection in s 17(a) are mutually exclusive – the basis of an objection must be asserted as either too high or too low; it cannot be both.
It is important to note that, as well as reaching the above finding on the limits of the Tribunal’s power in a review of an objection that a returned valuation is ‘too high’, the Tribunal made a number of other comments on the operation of the VLA, as follows:
The Tribunal agreed with the Applicant as to which powers are available for each ground in the VLA as set out in the following table:
|Section 17 Grounds of objection||Section 25 Outcomes – as relevant|
|a) that the value assigned is too high or too low;||Too high – confirm or reduce;
Too low – confirm of increase
|b) that the interests held by various persons in the land have not been correctly apportioned;||Confirm or increase and reduce|
|c) that the apportionment of the valuation is not correct;||Confirm or increase and reduce|
|d) that lands that should have been included in one valuation have been valued separately;||Confirm or increase|
|e) that lands that should have been valued separately have been included in one valuation;||Confirm or reduce|
|f) that the person named in the notice of valuation, assessment notice or other document is not liable to be so named;||Make any other order it thinks fit|
|g) that the area, dimensions or description of the land including the AVPCC allocated to the land are not correctly stated in the notice of valuation, assessment notice or other document.||Amend any valuation and/or make any other order it thinks fit|
It can be expected that the VGV will be considering its appeal rights in respect of the decision.
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Patrick Walsh, Partner
Therese Megens, Senior Associate