Land and Environment Court of New South Wales CITATION : Koutchavlis v Valuer General [2007] NSWLEC 102 APPLICANT Gerald Koutchavlis PARTIES : RESPONDENT Valuer General FILE NUMBER(S) : 30803 of 2006 CORAM: Brown C - KEY ISSUES: Valuation of Land :- appropriateness of valuation LEGISLATION CITED: Valuation of Land Act 1916 DATES OF HEARING: 01/03/07 DATE OF JUDGMENT: 2 March 2007 APPLICANT In person LEGAL REPRESENTATIVES: RESPONDENT Mr G Newport, barrister SOLICITORS Crown Solicitors Office JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Brown C with Miller AC 2 March 2007 30803 of 2006 Gerald Koutchavlis v Valuer General JUDGMENT 1 COMMISSIONERS: This is an appeal against the unimproved land value assessed by the Valuer General (the respondent) for the Lot 9 in DP 9860, 69 Griffiths Street, Balgowlah (the site). Background 2 The land value of the site, as assessed by the Valuer General for rating purposes as at Base Date 1 July 2005 was $756,000. 3 The site is zoned Residential under Manly Local Environmental Plan 1988. This zone contains a number of sub zones where different density requirements apply. The site 4 The site has a frontage of 13.41 m and a depth of 40.23 m giving a total site area of 537.5 sq m. At the purchase date on 2 August 2003, the site contained a modest two-bedroom dwelling with a single garage towards the rear of the site. Alterations and additions have recently been completed just prior to the Base Date of 1 July 2005. 5 The general area is predominantly residential in nature with older style single dwellings on lots around 500 sq m and some newer dwellings on lots ranging from 250 sq m to 300 sq m. The Manly West primary school is located opposite the site and a cemetery further to the east along Griffiths Street. The evidence 6 Mr Gerald Koutchavlis was self represented and provided no expert valuation evidence although he cross-examined the applicant's valuer on his evidence. Mr Koutchavlis contends the land value of site to be $500,000. 7 Mr Errol Ferdinands, a Certified Practising Valuer, provided evidence for the respondent and determined the land value of the site at $700,000. The valuation was made in accordance with s 6A for of the Valuation of Land Act 1916. The respondent adopted Mr Ferdinands value for the purposes of the appeal. 8 Mr Ferdinands identified 10 relevant comparable sales. Of these sales Mr Ferdinands relies on the sales of the site (Sale 1), 3 Jackson Street (Sale 2), 1 Cormack Street (Sale 3), 79 Griffiths Street (Sale 9) and 81 Griffiths Street (Sale 10) as being the most suitable sales for determining the unimproved land value of the site. These sites were inspected on the morning of the first day of the hearing. The main details of these sales are: Sale 1 - 69 Griffiths Street Sale price: $910,000 Sale Date: 2 August 2003 Area: 537.5 sq m Improvements: $150,000 Adjustments for subdivision potential, topography and location: nil Deduced land value: $760,000 Sale 2 – 3 Jackson Street Sale price: $920,000 Sale Date: 27 October 2004 Area: 530 sq m Improvements: nil vacant – existing dwelling demolished Deduced land value: $920,000 Adjustments for subdivision potential, topography and location based on a deduced land value of $/ sq m: -15% Adjusted land value: $782,068 (incorrectly calculated at $793,066) Sale 3 – 1 Cormack Street Sale price: $920,000 Sale Date: 12 April 2003 Area: 560 sq m Improvements: nil vacant – existing dwelling demolished Deduced land value: $927,000 Adjustments for subdivision potential, topography and location based on a deduced land value of $/ sq m: -15% Adjusted land value: $756,291 Sale 9 - 79 Griffiths Street Sale price: $887,000 Sale Date: 11 December 2004 Area: 537.5 sq m Improvements: $200,000 Deduced land value: $687,000 Adjustments for subdivision potential, topography and location: 5% Adjusted land value: $721,350 Sale 10 - 81 Griffiths Street Sale price: $945,000 Sale Date: 17 September 2004 Area: 537.5 sq m Improvements: $233,000 Deduced land value: $712,000 Adjustments for subdivision potential, topography and location: 5% Adjusted land value: $747,600 9 Mr Ferdinands states that no adjustment is required for market movement as there had been little to no increase in values from 1July 2003 to the Base Date of 1 July 2005. Overall, and based on the comparable sales, an unimproved land value of $700,000 is conservative and at the lower end of the range of values. Findings 10 Clause 40(2) of the Valuation of Land Act 1916 states that "on an appeal, the appellant has the onus of proving the appellant's case". In considering cl 40(2) we are not satisfied that Mr Koutchavlis provided any evidence or seriously challenged the conclusions of Mr Ferdinands to suggest that his valuation of the site should be overturned. 11 The sale of the site and Sales 9 and 10 are critical sales in our view, all being located on the southern side of Griffiths Street with identical land areas, the land rising in each case to the rear, subject to the same zoning and all being opposite Manly West primary school and affected by the same traffic movements, noise and pedestrian activities generated by the school. Improvements on each property are residential in nature although they vary in size and standard but not to a significant degree. 12 Mr Koutchavlis's concerns over Mr Ferdinands estimation of the value of improvements on the site, Sale 9 and Sale 10 were addressed by Mr Ferdinands at the hearing using dimensioned plans of the dwellings and Rawlinsons Construction Cost Guide to establish an appropriate cost per square metre. Adopting adjustments of 7.5% for construction costs between the Base Date and the 2004 edition of Rawlinsons Construction Cost Guide, 8% for professional fees and depreciation of the new cost, the estimation of the value of improvements was still below that originally estimated by Mr Ferdinands. This means that the deduced value of the land component of these three sales was in fact higher than originally calculated by Mr Ferdinands. 13 Sales 2 and 3 involved sites where the existing dwellings were subsequently demolished to allow for redevelopment to take place. Accordingly, these buildings could not be classed as improvements and were of no value. In fact they should be considered as an impediment and a cost rather than a value to be deducted from the sale price as suggested by Mr Koutchavlis. Orders 14 The Orders of the Court are: 1. The appeal is dismissed. 2. The land value of Lot 9 in DP 9860, 69 Griffiths Street, Balgowlah at Base Date of 1 July 2005 is $700,000. 3. The exhibits are returned with the exception of exhibit E. _____________ G T Brown Commissioner of the Court _____________ Craig Miller Acting Commissioner of the Court DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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