The 2024 Supreme Court of New South Wales decision in Perez v Ciabattoni[1] (Perez) demonstrates the critical role that robust, professionally prepared valuations play in legal proceedings where the “true value” of a property (or “market value depending upon the valuer instruction), must be established. For property valuers, the case provides a clear illustration of the weight courts give to a valuation which includes accepted valuation methodology and the compliance with recognised professional standards.
At the heart of the dispute was the need for the court to determine the “true value” of a property forming part of a deceased estate in Family Provision Act (NSW) proceedings.
This case highlights how, in this instance, the court approached the critical point of assessing the “true value of the estate” (It is likely that the judge meant the true value of this particular property in the estate).
The judge referred to, and followed, a previous High Court of Australia (HCA) decision in which two Justices considered the importance of the court being satisfied that there was sufficient evidence of the “value” of a testator’s estate. In this particular HCA case, the issues revolved around a valuation determined by the trial judge on a property forming part of the estate.
In Perez, both parties submitted material on the property’s value, but with a significant distinction. Each side tendered real estate agent appraisals, which were essentially “shortform” value ranges, and provided limited detail on inspection, methodology, or rationale. By contrast, the defendant provided a full, professionally prepared valuation report by a qualified valuer who conducted a physical inspection, undertook a comparable sales investigation and provided reasoned analysis.
The court’s preference was unequivocal. The judge accepted the valuer’s report as the most reliable evidence of value, describing it as “cogent and well-reasoned” and expressly giving it “far more weight” than the agent shortform appraisals. Unsurprisingly, it is submitted that the court appeared to regard the appraisals as lacking the methodological rigour, evidentiary transparency and investigative depth necessary for a judicial determination of “true value”.
From a professional risk perspective, this case reinforces several points that valuers must remain alert to:
Not all assessments of value are created “equal”
Agent appraisals, desktop estimates and informal market opinions may and do on occasion serve a useful commercial purpose, but they are not valuations under the standards of the API, RICS or IVS. Courts are increasingly attuned to this distinction.
Courts will look to the standards of professional bodies when judging reliability
Although not stated explicitly, the judge’s treatment aligns with the expectation that a valuation must follow recognised professional and ethical standards. Work that falls short of these standards is unlikely to satisfy judicial scrutiny. This proposition is supported by the decision of the NSWSC in Haxglow Pty Ltd v Mirvac Retail Sub SPV Pty Ltd [2020] NSWSC 233, case involving a “challenge” to a valuer’s rental determination.
When a court requires the “true value” or “market value” of a property, only a formal valuation will suffice, unless otherwise stated
Requests for indicative or preliminary advice must be noted by valuers and must be clearly described as such in the “value assessment”.
Clear instructions and clear labelling matter
Valuers should be meticulous in ensuring that the nature of the service—valuation, appraisal, desktop analysis, or otherwise—matches both the client’s request and the description in the report. Mischaracterisation can create confusion and possible misrepresentation, exposing the valuer to risk, and undermining evidentiary credibility.
For insurance and risk management purposes, the key takeaway is simple: a defensible, standards aligned valuation will carry decisive weight in legal proceedings where the requirement of the valuer is to provide “true value” and or “market value“, or other stated “value”. In these situations, and dependent upon the instructions from a client, informal assessments will not meet this requirement. The Perez decision underscores the importance of professional rigor when a determination of “value” is required It also reinforces that valuers make significant gains—both reputationally and legally—when they adhere strictly to the recognised valuation standards and clearly define the scope of their work when asked to provide a valuation.
[1] Perez v Ciabattoni [2024] NSWSC 138
