Land and Environment Court of New South Wales CITATION : 23 Bangaroo Street, North Balgowlah Pty Ltd –v – Valuer General [2008] NSWLEC 1286 APPLICANT 23 Bangaroo Street, North Balgowlah Pty Ltd PARTIES : RESPONDENT Valuer General FILE NUMBER(S) : 31081 of 2007 CORAM: Parker AC KEY ISSUES: Valuation of Land :- Land Value LEGISLATION CITED: Valuation of Land Act 1916 Land and Environment Court Act 1979 DATES OF HEARING: 03/06/2008 DATE OF JUDGMENT: 15 July 2008 APPLICANT Mr S Austin, representative of Applicant LEGAL REPRESENTATIVES: RESPONDENT Mr G Newport, Barrister Instructed by Mr P Rankins, Solicitor of Valuer General JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Parker AC 15 July 2008 31081 of 2007 23 Bangaroo Street, North Balgowlah Pty Ltd v Valuer General JUDGMENT 1 This is an appeal by Mr Austin on behalf of 23 Bangaroo Street, North Balgowlah Pty Ltd (the Applicant), under Section 37 of the Valuation of Land Act 1916 (the Act), against the land value assessed by the Valuer General (the Respondent) in respect of the property known as 23 Bangaroo Street, North Balgowlah (the subject property). Background 2 The land value of the subject property at 1 July 2006 (the base date), was assessed by the Valuer General at $434,000 and by Mr Austen at $310,000. 3 The matter was the subject of mediation under Section 34 of the Land and Environment Court Act 1979 but the parties were unable to reach agreement. The parties consented to my disposing of the proceedings with a further hearing under Section 34(3)(b)(ii) of the Land and Environment Court Act 1979. The parties did not consent to my having regard to all matters considered in the mediation conference. 4 The matter was the subject of an on site inspection on 3rd June 2008, followed by a hearing in the Land & Environment Court in Sydney. 5 Mr Austin, a Certified Practicing Valuer, appeared as the representative for 23 Bangaroo Street, North Balgowlah Pty Ltd and not as an expert valuer. 6 Mr Newport, Barrister, represented the Valuer General, instructed by Mr Rankins, Solicitor of the Valuer General. 7 Section 40(2) of the Act states: "On an appeal, the appellant has the onus of proving the appellant's case. The subject property 8 The subject property is located on the corner of Bangaroo Street and Serpentine Crescent in an established residential area. 9 It is a regularly shaped block, having an area of 361.1 sqm, with principal access from Serpentine Crescent. Improvements comprise the highest and best use, being an attached brick dwelling. 10 The subject property comprises Lot 31 in Deposited Plan 1048856 and is subject to a variety of easements. The issues 11 The following issues are considered to be of significance in determining the land value of the subject property: a. that the subject property is within an established residential area and surrounded on all sides by residential development; b. that the subject property is a corner block; c. that Bangaroo Street is a local connecting road carrying, at times, a moderate volume of traffic with associated noise; d. that the residential development surrounding the subject property includes Department of Housing properties; e. that the highest and best use of the subject property is for an attached dwelling, rather than a detached dwelling; f. that the subject property comprises a relatively small block of land, providing limited open space around the dwelling; and g. that the open space around the dwelling lacks privacy and is adversely affected by an adjacent bus stop. 12 The following issues are not considered to be of significance in determining the land value of the subject property: a. that the subject property is burdened by a variety of easements, which do not appear to unreasonably constrain the development of the subject property; and b. that the subject property has a frontage to Serpentine Crescent rather than Bangaroo Street. 13 Mr Austin contended that the collective adverse impact of issues was greater than the sum of the individual adverse impact of each issue upon the value of the subject property. The evidence 14 Mr Austin tendered as evidence a statement dated 15th December 2007 by himself, a Certified Practicing Valuer, disputing the validity of the Valuer Generals assessment of land value as at the base date. 15 Ms Cooper, a Registered Valuer, tendered as evidence an undated analysis of comparable sales by herself and gave expert evidence on behalf of the Valuer General. Ms Cooper concluded that the Valuer Generals assessment of land value as at the base date of $434,000 was "within fair and reasonable market parameters". 16 I note that Ms Cooper did not express an opinion of the land value of the subject property as at the base date. 17 Mr Austin submitted four comparable sales and Ms Cooper five comparable sales. 18 Mr Austin submitted comparable sales at 19 Woodbine Street, 28 Myrtle Street, 13 Castle Circuit and 30 Wakehurst Parkway, which were inspected externally. 19 Ms Cooper submitted comparable sales at 41 Bangaroo Street, 11 Bennelong Street, 13 Bennelong Street, 31 Clontarf Street and 28 Wakehurst Parkway, which were inspected externally. Consideration of the evidence 20 I note that none of the comparable sales submitted by the parties comprise a corner block, an attached rather than detached residence, proximity to Department of Housing properties nor an immediate lack of privacy. 21 I note that the subject property is surrounded by residential development with a frontage to Bangaroo Street, a local connecting road. 22 I note that 41 Bangaroo Street and 19 Woodbine Street are surrounded by residential development with a frontage to a local connecting road carrying a comparable volume of traffic. 23 I note that 11 and 13 Bennelong Street and 13 Castle Circuit are surrounded by residential development with a frontage to a trafficable street, carrying a lower volume of traffic. 24 Accordingly, I consider 41 Bangaroo Street, 19 Woodbine Street, 11 and 13 Bennelong Street and 13 Castle Circuit to be directly relevant comparable sales. 25 I note that 28 Myrtle Street, 28 and 30 Wakehurst Parkway and 31 Clontarf Street are not surrounded by residential development. 26 I note that 28 and 30 Wakehurst Parkway and 31 Clontarf Street are adjacent Wakehurst Parkway, which is a major road with State Route number carrying a very high volume of traffic. 27 I note that 28 Myrtle Street is adjacent Burnt Bridge Creek Development Road, which is a major road carrying a high volume of traffic. 28 Accordingly, I consider 28 Myrtle Street, 28 and 30 Wakehurst Parkway and 31 Clontarf Street to be indirectly relevant comparable sales. 29 The directly relevant comparable sale at 41 Bangaroo Street, submitted by Ms Cooper, comprises 563sqm land area upon which is situated a new detached house with the land and previous dwelling having sold for $810,000 at 6th July 2005 equating to $1,439 psm land value. 41 Bangaroo Street is located close to the subject property with Bangaroo Street being a local connecting road with a comparable volume of traffic to the subject property. 41 Bangaroo Street is larger than the subject property and sold approximately one year before the date of valuation. 30 The directly relevant comparable sale at 19 Woodbine Street, submitted by Mr Austin, comprises 592sqm land area upon which is situated a detached house with shared driveway having sold for $685,000 at 23rd February 2006 equating to $1,157 psm land value. 19 Woodbine Street occupies a broadly comparable residential location to the subject property with Woodbine Street being a local connecting road with a comparable volume of traffic to the subject property. 19 Woodbine Street is larger than the subject property and sold approximately four months before the date of valuation. 31 The directly relevant comparable sale at 11 Bennelong Street, submitted by Ms Cooper, comprises 488sqm land area having sold for $573,000 at 14th August 2004 equating to $1,174 psm land value. 11 Bennelong Street occupies a broadly comparable residential location to the subject property with Bennelong Street being a trafficable street with a lower volume of traffic than the subject property. 11 Bennelong Street is larger than the subject property and sold approximately two years before the date of valuation. 32 The directly relevant comparable sale at 13 Bennelong Street, submitted by Ms Cooper, comprises 488sqm land area having sold for $540,000 at 14th August 2004 equating to $1,107 psm land value. 13 Bennelong Street occupies a broadly comparable residential location to the subject property with Bennelong Street being a trafficable street with a lower volume of traffic than the subject property. 13 Bennelong Street is larger than the subject property and sold approximately two years before the date of valuation. 33 The directly relevant comparable sale at 13 Castle Circuit, submitted by Mr Austin, comprises 600.2sqm land area having sold for $601,000 at 13th May 2006 equating to $1,001 psm land value. 13 Castle Circuit occupies a superior residential location to the subject property with Castle Circuit being a trafficable street with a lower volume of traffic than the subject property. 13 Castle Circuit is larger than the subject property and sold close to the date of valuation. Findings 34 I consider that the comparable sales of 41 Bangaroo Street, 19 Woodbine Street, 11 and 13 Bennelong Street and 13 Castle Circuit to be highly informative for the valuation of the subject property. 35 I note that Ms Cooper made explicit adjustment to the comparable sales evidence, based on her professional judgment, for differences between the comparable sales evidence and the subject property with regard to the passage of time, allowance for improvements, location differences, volume of traffic (noise) and land "Size, Shape, Frontage, views etc". 36 I note that Ms Cooper claimed to have made implicit adjustment but did not make explicit adjustment to the comparable sales evidence for differences between the comparable sales evidence and the subject property with regard to each of the impact of a corner block, an attached (rather than detached) dwelling, the easements, the proximity of Department of Housing properties and a lack of privacy. 37 This approach accords with accepted valuation practice and enables valuers to have evidentiary comparable values which, following adjustment, account for the various differences with the subject property. 38 Because properties are rarely identical, adjustment for differences is obviously necessary but caution is required through making as few adjustments as possible to ensure the reliability of the comparable sale when related to the subject property. Particular caution is required where large adjustments are required. 39 Ms Cooper analysed the comparable sales to provide the following adjusted land values as at the base date: 41 Bangaroo Street $1,611 psm 11 Bennelong Street $1,155 psm 13 Bennelong Street $1,128 psm 40 Having regard to the analysis of comparable sales evidence, Ms Cooper concluded that the Valuer Generals assessment of land value as at the base date of $1,202 psm was "within fair and reasonable market parameters". 41 I consider that Ms Cooper presented an explicable approach to the valuation of the subject property through the application of comparable sales evidence. 42 I note that Mr Austin provided an adjusted land value for 19 Woodbine Street of $938 psm but did not make explicit adjustment to the comparable sales evidence for each of the above variables, other than contending percentage adjustments for comment by Ms Cooper during examination. 43 I note that Mr Austin did not provide an adjusted land value for 13 Castle Circuit. 44 Mr Austin did not appear to explicitly address the impact of the various issues on the analysis of the comparable sales evidence for application to the subject property. 45 Mr Austin did not present evidence to support his contention that the collective adverse impact of issues was greater than the sum of the individual adverse impact of each issue upon the value of the subject property. 46 I consider that Mr Austin did not present an explicable approach to the valuation of the subject property through the application of comparable sales evidence. 47 Having regard to the evidence tendered, the cross examination of Ms Cooper and the summation presented, I consider that Mr Austin did not prove his case as required by Section 40(2) of the Act. Orders 48 The orders of the Court: 1. The appeal is dismissed. 2. The land value of $434,000 as at the base date of 1st July 2006 for the property at 23 Bangaroo Street, North Balgowlah is confirmed. 3. No order is made as to costs. 4. The exhibits are returned. ___________________ Dr David Parker Commissioner of the Court ljr 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.