Harmon International Holdings Pty Ltd v Pashon Electrical Pty Ltd [2021] NSWSC 230

Harmon International Holdings Pty Ltd v Pashon Electrical Pty Ltd [2021] NSWSC 230

The valuations contained manifest error because, on the face of the reports, Mr Marchese miscalculated the market average GLA values by applying a derived GLA rate to land area, misapplied a commercial warehousing capitalisation rate to residential apartment income in both reports, and used the Norton Street Leichhardt sale as part of the closest comparable range for the Parramatta Road property despite his own report identifying it as inferior and not mixed commercial and residential. Those errors were clear and obvious and capable of affecting the valuations. The valuations were therefore not final and binding under cl 2.3 of the Deed of Partition, so the plaintiffs' claim to enforce...

Jurisdiction
Australia
Judgment Date
15 March 2021
Procedural Posture
Equity Commercial List Proceedings Concerning a Deed of Partition and Expert Valuations of Co Owned Properties / Principal Judgment After Hearing on Summons and Cross Summons
Outcome
Manifest error found. The valuations were not final and binding. The plaintiffs' summons should be dismissed, declaratory relief was appropriate, partition under s 66G was accepted as appropriate, and the parties were directed to bring in short minutes of order reflecting the reasons.
Legal Topics
['construction of Deed of Partition' 'expert Valuation' 'manifest Error' 'current Day Market Value' 'statutory Trust for Partition Under S 66 G of the Conveyancing Act 1919 (nsw)' 'costs']
['contract' 'property Law' 'equity'] ['construction of Deed of Partition' 'expert Valuation' 'manifest Error' 'current Day Market Value' 'statutory Trust for Partition Under S 66 G of the Conveyancing Act 1919 (nsw)' 'costs']

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Procedural Posture

Equity Commercial List Proceedings Concerning a Deed of Partition and Expert Valuations of Co Owned Properties / Principal Judgment After Hearing on Summons and Cross Summons

Legal Issues

  1. 1 ['What is the meaning of manifest error for the purposes of cl 2.3 of the Deed of Partition.' 'Whether the valuations of the Crystal Street and Parramatta Road properties contained manifest error as to highest and best use.' 'Whether the valuations contained manifest error in the comparable sales approach, including calculation of market average GLA value and use of comparable sales.' 'Whether the valuations contained manifest error in the capitalisation method of valuation.' 'Whether factual errors in the reports amounted to manifest error.' 'What relief should follow if manifest error was established.']

Ratio Decidendi

The valuations contained manifest error because, on the face of the reports, Mr Marchese miscalculated the market average GLA values by applying a derived GLA rate to land area, misapplied a commercial warehousing capitalisation rate to residential apartment income in both reports, and used the Norton Street Leichhardt sale as part of the closest comparable range for the Parramatta Road property despite his own report identifying it as inferior and not mixed commercial and residential. Those errors were clear and obvious and capable of affecting the valuations. The valuations were therefore not final and binding under cl 2.3 of the Deed of Partition, so the plaintiffs' claim to enforce...

Court Disposition

Manifest error found. The valuations were not final and binding. The plaintiffs' summons should be dismissed, declaratory relief was appropriate, partition under s 66G was accepted as appropriate, and the parties were directed to bring in short minutes of order reflecting the reasons.

Orders

  • ['Parties to confer and send agreed short minutes of order reflecting the reasons.' 'Parties have liberty to approach the associate if agreement on the form of orders cannot be reached or a party wishes to seek a different or special costs order.' "The Court indicated that the plaintiffs should pay the defendants'...