The City of Johannesburg’s valuation appeal board has been sent back to the drawing board over its hefty R10bn valuation of one of SA’s premier shopping malls, Sandton City.
The property’s owners have challenged the valuation that has implications for higher levies.
The Johannesburg high court last week ordered that a differently constituted valuation appeal board of the City of Johannesburg adjudicate on the dispute between the City and the property’s owners, Liberty and Pareto.
SA’s courts are increasingly taking issue with the bias shown by valuation boards when determining disputes over the valuation of premium properties.
Acting judge Gerald Farber found that the valuation board had fallen far short of its obligations in adjudicating the matter.
Farber was critical of how the valuation appeal board treated expert testimony. Liberty and Pareto had roped in a certain Mr [first name withheld] Bokhorst, while the city relied on Mr [first name withheld] Fouche.
The court found the valuation board was overly critical of Bokhorst’s testimony, while it cast an uncritical eye on Fouche’s evidence, despite it having many flaws.
Fouche’s valuation of the property, a landmark in Sandton’s skyline, exceeded that of Bokhorst by about R2bn.
“It was moreover plain from Mr Fouche’s evidence in chief that he had used the comparable method in purporting to determine the market value of the property, a matter clearly borne out by his first report, his evidence in chief and part of his cross-examination,” Farber’s judgment reads.
“It is equally plain therefrom that Mr Fouche had not used information obtained from 19 shopping centres which he regarded as premier, in order to construct what he described therein as a super exclusive regional shopping centre category.”
Farber drew a comparison to the valuation dispute between Johann Rupert’s Leopard Creek and Nkomazi Local Municipality.
The Supreme Court of Appeal in November ruled that the valuation appeal board of the Ehlanzeni district in Mpumalanga erred in ignoring expert evidence brought by Leopard Creek.
“The principles which emerge from Leopard Creek are readily discernible. The board is an administrative decision-making body. As such, it is required in making its decision to assess and evaluate the evidence adduced before it and in light thereof, to provide reasons for that decision” Farber said.
Rupert and his partners have questioned the R1.56bn valuation tag placed on the property by the municipality, insisting that it is worth just R330m.
Leopard Creek, which hosts the annual Alfred Dunhill Cup, is on the banks of the Crocodile River and borders Kruger National Park.
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