Sluce and Repatriation Commission [2010] AATA 10 (11 January 2010)

Last Updated: 18 January 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 10

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/0201

GENERAL ADMINISTRATIVE DIVISION		)
	Re		MAXWELL AND MURIEL SLUCE

Applicants

And

REPATRIATION COMMISSION

Respondent

DECISION

Tribunal

The Hon C R Wright QC (Deputy President)

Date 11 January 2010

Place Hobart

Decision

The decision under review should be varied by substituting the sum of $220,000.00 for $230,000.00 as the value of the applicants' property at 101 Sunset Boulevard for the purpose of assessment of the applicants' service pensions on and from 1 July 2008.

[Sgd Hon C R Wright QC]
Deputy President

CATCHWORDS

Veterans' pension entitlement - pension entitlement reduced after revaluation of real estate property - effect of erroneous valuation of adjoining property rather than the applicants' property during Departmental review - merits review by Administrative Appeals Tribunal

Veterans' Entitlements Act 1986, s57(2)c

REASONS FOR DECISION

11 January 2010

The Hon C R Wright QC (Deputy President)

1. The applicants Maxwell and Muriel Sluce are entitled to a service pension under the provisions of the Veterans' Entitlements Act 1986 ("the Act"). They are also joint owners of a block of land situated at 101 Sunset Boulevard, Clarence Point near the mouth of the Tamar River in Northern Tasmania. The applicants' entitlements under the Act are subject to means testing. On 1 July 2008 the Delegate of the Repatriation Commission under the Act determined that the block of land at Sunset Boulevard had a value of $220,000.00. This was greatly in excess of a previous valuation several years before and the result was that the applicants' weekly entitlements under the Act were diminished.
2. The applicants objected to the valuation of $220,000.00 and the Delegate's determination was reviewed under the provisions of section 57(2)(c) of the Act. A new valuation of the property on 10 October 2008 valued it at $230,000.00. On 21 October 2008 the Delegate determined that this new valuation was to be used as the value of the property in assessing the applicants' service pensions as from 4 November 2008.
3. It was subsequently discovered that the valuer who made this fresh valuation had based his opinion and valuation after inspecting a block at 103 Sunset Boulevard adjoining the applicants' property. This block had been sold by a previous owner in 2006 and, in October 2008, a new house was being built upon it. How the valuer's error in identifying the property occurred, has not been fully explained.
4. On 13 January 2009, after attempting without success to resolve the matter by other means, the applicants lodged a formal application to review the determination of 21 October with the Administrative Appeals Tribunal. In May 2009, pending a determination of the matter, the applicants' had two local real estate agents and a qualified local valuer assess the value of their property at 101 Sunset Boulevard. On the basis of the written appraisals provided by these 3 gentlemen, the applicants contend that the value of the subject property at that time (May 2009) was $180,000.00 or less.
5. A hearing of the application to review took place in Launceston on 9 December 2009. The applicants were represented by Mr E J McDermott JP and the respondent was represented by Mr R Douglass of counsel. Mr McDermott informed the Tribunal that in view of a recent valuation carried out by Mr Anthony McDonald, a qualified valuer employed by the Australian Valuation Office in August 2009, it was accepted by the applicants that the subject property should be valued for relevant purposes as follows:
   • 18 January 2009 - market valuation $215,000.00
   • 20 May 2009 - market valuation $195,000.00

However a dispute remained as to the correctness and validity of the valuation of October 2008.

6. Mr McDermott indicated that he would not be calling oral evidence and did not seek to tender the three reports obtained from the local real estate agents and the valuer engaged by the applicants in May 2009. Nonetheless I indicated that I would receive those reports into evidence and give them such weight as they may appear to command. In fact, in the circumstances, there is no need to refer to those reports in detail as the applicant's argument has been based essentially upon the proposition that there was no valid valuation of the property in October 2008, and consequently, until Mr McDonald's valuation in August 2009, there was no valid authority for the respondent to reduce the applicants' pension entitlements. Any potential argument that the May 2009 appraisals should form a basis for valuation of 101 Sunset Boulevard in July or October 2008 was not pursued.
7. Mr Douglass countered these arguments put by Mr McDermott as follows. The fact that the wrong property was valued in October 2008 does not preclude this Tribunal from making a finding as to the value of the relevant property on the basis of sworn evidence and documentary material presented to the Tribunal at the hearing by Mr Anthony McDonald. In short, this being a merits based rehearing, if it can be established that the applicants owned property at Sunset Boulevard in October 2008 which had a value affecting their entitlements, the Delegate's decision should stand or be varied accordingly.
8. In my view there is no need to set out Mr McDonald's evidence at length. There were however some salient issues arising which require comment. The essence of Mr McDonald's opinion was that, based upon the November 2006 sale of the adjoining property taken in conjunction with sales of two other properties at No. 30 Sunset Boulevard in May 2007 and No. 34 Sunset Boulevard in January 2008 (both of which he regarded as inferior to the applicants' block) together with other general information as to the market, the applicants' property should be valued as at 10 October 2008, at $220,000.00. Mr McDonald rejected the suggestion made by the applicants that the sale of 103 Sunset Boulevard was not an "arms length" transaction and was therefore not reflective of true market value.
9. In my opinion Mr McDonald dealt adequately and effectively with all the contentious issues which were raised with him in cross-examination and I think he dealt professionally and objectively with the valuation issues before the Tribunal. I accept his evidence that, as at 10 October 2008 the applicants' property at 101 Sunset Boulevard had a market value of $220,000.00.
10. I turn therefore to consider the applicants' argument that such a finding cannot repair the claimed fatal flaw in the valuation made on behalf of the respondent at that date. I was not directed to any provision in the Act or any other relevant legislation which suggests that a determination by a Delegate must be made in a particular manner or form to achieve legitimacy. It appears to me that the issue of whether or not a property has a particular value at a particular time so as to affect a pension entitlement is always a question of fact and indeed so much was conceded by Mr McDermott in the course of his submissions. In some circumstances, the valuation of a wrong property could well lead to a serious injustice but in my opinion this is not such a case. It should be noted that the original valuation of the applicants block in July 2008 has not been shown to be a valuation based upon inspection of the incorrect land. The only real argument that the applicants raised in relation to that valuation was that it was excessive and did not represent true market value. As my findings indicate, I do not support that view.
11. The subsequent valuation, carried out after the applicants' objection, turns out to have been $10,000.0 in excess of what it should have been had the correct block been inspected. I can see no reason for concluding that the respondent is disentitled or precluded from relying on a finding by me, based upon evidence presented during this merits review hearing which satisfies me on the balance of probabilities that the value of the applicants' relevant property was $220,000.00.
12. Consequently, in my opinion the determination under review should be varied by substituting the sum of $220,000.00 for $230,000.00 as the value of the applicants' property at 101 Sunset Boulevard for the purpose of assessment of the applicants' service pensions on and from 1 July 2008. There will be an order accordingly.
13. It is noted that on and from 18 January 2009, this valuation will reduce to $215,000.00, and on and from 20 May 2009 it will further reduce to $195,000.00.
    

I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon C R Wright QC (Deputy President)

Signed: R Hunt (Administrative Assistant)

Date/s of Hearing 9 December 2009

Date of Decision 11 January 2010

Advocate for the Applicant Mr E J McDermott JP

Solicitor for the Respondent Mr R Douglass, Review Section, Department of Veterans' Affairs