LAWS v COLLINS EXPOSED AGGREGATE PTY LTD and ANOR [1997] NSWCA 186

LAWS v COLLINS EXPOSED AGGREGATE PTY LTD and ANOR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, HANDLEY and SHELLER JJA 5 June 1996, 24 March 1997

[1997] NSWCA 186

CONTRACT — sale of land — damages for loss of bargain — valuation of land DAMAGES — loss of bargain — valuation of land

VALUATION OF LAND — gravel bearing land — no development approval

On 23 October 1990 the appellant (vendor) contracted with the respondent for the sale of rural land containing a large quantity of commercial gravel. The purchaser failed to complete, and the vendor rescinded and sued for loss of the bargain. The trial Judge assessed damages based on a valuation of the land at the date of breach of $862,000, which included the market value of the gravel with a discount for the risk that development approval would not be obtained. On appeal by the vendor

HELD:

(1) The trial Judge erred in accepting the valuation of $862,000. The appeal must therefore be allowed but the Court could reassess the damages and there was no need for a new trial.

(2) Land is to be valued with reference not only to its current use, but also to that for which it may be used in the future. Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer Vizagapatam [1939] AC 302 at 313 applied.

(3) A judicial valuer must value land on the basis of the price a willing vendor might reasonably expect to obtain from a willing purchaser. Yates Property Corporation Pty Ltd v Darling Harbour Authority (1991) 24 NSWLR 166 at 175-6 applied.

(4) It is necessary in the assessment of value to estimate the probabilities of the necessary development approvals not being forthcoming. Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 applied.

(5) A proper valuation could be obtained from sales of reversions, expectant on gravel leases, in comparable land, increased to reflect the value of the gravel leases.