City of Adelaide v City of Port Adelaide Enfield No. SCCIV-99-1093

(2001) 115 LGERA 137; [2001] SASC 207

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Interrogate

Catchwords

1. Local Government
2. › Rating and valuation
3. › Capital value of land
4. › Valuation of land used for waste disposal
5. › Discounted cash flow method
6. › Whether appropriate method of valuation
7. › Hypothetical purchaser
8. › Whether owner-operator or passive investor
9. › Valuation of Land Act 1971 (SA), s 5
10. › Local Government Act 1934 (SA), ss 5, 170, 173
1. Valuation
2. › Methods of valuation
3. › Discounted cash flow
4. › Land with finite income-producing capacity
5. › Known airspace and lifespan
6. › Comparable sales as check on valuation
7. › Allowance for profit and risk
8. › Turner v Minister for Public Instruction (1956) 95 CLR 245

Quick Take

When valuing land used for waste disposal with a known remaining capacity and finite lifespan, the discounted cash flow method is appropriate and the hypothetical purchaser should be identified as an owner-operator rather than a passive investor receiving royalties. However, the discounted cash flow valuation must be adjusted to allow for profit and the cost and risk of obtaining a licence, and should be checked against comparable sales. Harry v Valuer-General (1975) 36 LGRA 319 should not be followed on the method of valuation.