Regis Aged Care Pty Ltd v Commissioner of State Revenue [2015] VSC 279
This matter related to the acquisition by the appellant on 2 July 2007 of 100 per cent of the shares in Paragon Group Investments Pty Ltd (PGI), which was the head of a corporate group owning residential aged care facilities.
The principal issue in dispute was whether PGI was “land rich”, which turns on whether its “land ratio” within the meaning of s71(2)(b) of the Act (in summary, the ratio of its land holdings to total property) was 60 per cent or more.
The Commissioner argued that statutory scheme required the value of the PGI’s land holdings to be determined relatively to the value of all of its unexcluded property. The Commissioner’s expert witness, who adopted a “top-down” valuation methodology, produced a land value relative to non-land value resulting in a ratio of around 87 per cent.
The appellant engaged a triumvirate of experts who applied materially different methodologies all driven by absolute values (that is, they arrived at separate/discreet values for the land and for the non-land assets). They ultimately determined that PGI’s land ratio ranged between 26.6 per cent and 29.9 per cent.
Almond J preferred the appellant’s expert evidence on all principal points determining that PGI was not “land rich”.
