Valuer V Valuer

Hi all,

Ignore for a moment the ‘Kaye’ references but from the tone of the article we could end up seeing a valuer trying to substantiate his/her figures against another.

Could make for interesting reading when the case comes to court.

Test case launched over Kaye property valuation
By Paddy Manning
June 05, 2004

LAW firm Slater & Gordon yesterday launched a test case on behalf of a person who dealt with former property spruiker Henry Kaye, alleging their client was misled into buying a property at inflated prices.

Client Stephen Sutton is seeking to set aside a contract to buy a strata office at 365 Little Collins St, Melbourne, alleging false and misleading conduct was used to induce him to buy the property.

According to the statement of claim lodged yesterday, Mr Sutton agreed in mid-2002 to buy the property off the plan for $243,160.

Under the terms of the contract with Property Consulting Group – a company in which Mr Kaye was a principal shareholder – settlement was deferred for two years. This means the money is due in coming months.

Mr Sutton also says he paid PCG a $6600 “sourcing fee” for identifying the property.

Slater & Gordon commercial litigation partner Rob Lees said an independent assessment obtained by his client found the real value of the property at the time was $170,000. He said Mr Sutton “is going to lose his shirt if he is forced to complete the sale”.

The action is against the current property owner, 365 Little Collins Street Pty Ltd, a private company indirectly owned by developer Les Smith, who took over the project from Mr Kaye in the middle of last year, when it became clear the spruiker’s empire was collapsing. Mr Smith, who had nothing to do with the original transaction, indicated he would vigorously defend the claim.

Mr Smith paid an unknown amount to buy all the company shares as part of a governing deed designed to keep Mr Kaye solvent before the appointment of an administrator to his companies.

Mr Smith had previously made a commercial loan to Mr Kaye and found investors for some of his own developments through Mr Kaye. He is owed more than $50 million by Mr Kaye.

Mr Smith yesterday disputed that the original value of Mr Sutton’s property was $170,000.

“I’ve got two sworn valuations, dated June 2003 and January 2003, by two of Australia’s leading valuer companies, saying the purchase price he paid reflected the market value,” he said.

Hearings start on August 20.

Derek
[email protected]

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