Reported Decision : 151 LGERA 360 Land and Environment Court of New South Wales CITATION : NSW Golf Club Ltd v Valuer General [2007] NSWLEC 40 APPLICANT NSW Golf Club Ltd PARTIES : RESPONDENT Valuer General FILE NUMBER(S) : 31264 of 2004 CORAM: Talbot J KEY ISSUES: Valuation of Land :- Land held under lease from the Crown - check valuation by rent capitalisation where comparable sale adjusted in significant respects with diverse results. Crown Lands Act 1989 LEGISLATION CITED: Real Property Act 1900 Valuation of Land Act 1916 CASES CITED: New South Wales Golf Club Ltd v Valuer General (1993) 81 LGERA 428 DATES OF HEARING: 09/10/06, 10/10/06, 20/10/06 DATE OF JUDGMENT: 2 February 2007 APPLICANT P McEwen (Barrister) SOLICITORS Bicknell & Monteith LEGAL REPRESENTATIVES: RESPONDENT A Pickles (Barrister) SOLICITOR I V Knight, Crown Solicitor JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Talbot J 2 February 2007 31264 of 2004 NEW SOUTH WALES GOLF CLUB LTD v VALUER GENERAL JUDGMENT 1 Talbot J: The applicant New South Wales Golf Club Limited occupies land at La Perouse within the Botany Bay National Park under lease 2442703 from the State of NSW for a term of 40 years commencing 25 July 1996 and terminating 24 July 2036. The land is known as lot 5208, DP 704508 and comprises 58.85 ha. 25 ha of the land is bushland including 14 ha covered with Eastern Suburbs Banksia Scrub that is a threatened ecological community. 2 The land has no public road frontage and access is gained to Anzac Parade La Perouse by way of a shared roadway vested in the Department of Lands. The land is also used by the National Parks and Wildlife Service, Sydney Pistol Club, St Michael's Golf Course and Southern Region Helicopter Rescue Service. There is a dispute between the Department of Lands and Randwick Council in relation to the maintenance of the access roadway. The NSW Golf Club Pty Ltd has carried out repairs at its own expense. 3 The Club relies upon a 35 megalitre dam and Sydney Water to sustain a water supply for the golf course. The use of water supply from Sydney Water is restricted by guidelines which prohibit it being used to fill dams and can only be used for hand watering of greens and tees by hoses. 4 By Notice of Valuation issued by the Valuer General the land was valued as at the 1 July 2003 at a land value of $3,750,000. 5 Following an unsuccessful objection the Golf Club has appealed to this Court pursuant to Part 4 of the Valuation of Land Act 1916. 6 There is no issue between the parties that s 14I of the Valuation of Land Act applies. It provides as follows: 14I Valuing Crown lease restricted land: (1) Land that is Crown lease restricted is to have its land value determined taking into account the restrictions on the disposition or manner of use that apply to the land by reason of its being the subject of the lease concerned. (2) Land is Crown lease restricted if it is subject to any of the following: (a) a lease or licence, or a permit to enclose a road or watercourse, granted under Part 4 of the Crown Lands Act 1989 , (b) an incomplete purchase or permissive occupancy, or a perpetual lease, special lease or term lease, within the meaning of the Crown Lands (Continued Tenures) Act 1989 , (c) a lease under the Forestry Act 1916 , (d) in the case of lands of the Crown, a lease of a class or description prescribed by the regulations. 7 The State of NSW is recorded as registered proprietor of the land by virtue of the provisions of s 13D of the Real Property Act 1900. The lease was granted pursuant to s 34 of the Crown Lands Act 1989. 8 The respective valuers have proceeded on the basis that the correct valuation exercise is to ascertain land value pursuant to both s 6A(1) and s 14I of the Valuation of Land Act. 9 The land value was previously determined by the Valuer General as at 1 July 2000 in the sum of $2,450,000. The Terms of the Lease 10 Pursuant to cl 30 of the lease the Club has a right to occupy and use the land for the purpose of Recreation/Golf Course and is directed not to use the premises or allow them to be used for any purpose other than that purpose. 11 Clause 32 provides that the lessee will not reside or permit any other person to reside on the premises. 12 In the event of total destruction of the improvements, the lessor may require the Club to reinstate them substantially in accordance with their original design or by agreement to a different design. Otherwise the land is to be cleared of all improvements, structures, rubbish and debris followed by surrender of the lease. 13 No improvement may be demolished or altered without the approval of the lessor and then only at the lessee's expense. 14 At the expiration of the term any improvement constructed, erected, effected or undertaken on the land during the term shall become the property of the lessor and the Club shall not be entitled to any compensation in respect thereof. 15 Any plant not removed by the Club after the expiration of the term shall automatically pass to and vest in the lessor without compensation. 16 Under cl 67 the Club is required to make all repairs and replacement to the premises necessary to preserve them in good working order and condition. 17 With the exception of noxious weeds, the Club as lessee may not damage, harm, kill or destroy any trees and vegetation. 18 If any of the land is required for a public purpose during the term of the lease the Minister may give 3 months notice to withdraw any parts of the land comprised in the lease and no compensation shall be payable in respect of such a withdrawal. 19 The lessee is required to maintain a footbridge on the land in a safe and serviceable condition and shall allow unrestricted public access to and from Cape Banks by way of the bridge at all times when the sixth Championship Tee is not in use. In 2004 the Golf Club expended in excess of $200,000 on the construction and erection of a new footbridge adjacent to the sixth tee thereby allowing for the continued public access to Cape Banks, which is in the National Park. 20 The lessee is required to obtain the approval of the Minister before affecting any substantial changes to the playing area including fairways, teeing grounds, greens and bunkers and shall ensure that the existing native vegetation landform and other general environment of the land leased is preserved in its existing condition. 21 There are water supply problems in relation to the maintenance of the fairways, greens and tees. The run-off into the dam is from the land occupied by the adjoining St Michael's Golf Club and only occurs when a dam on the other golf course overflows. Accordingly there is no assured permanent natural water supply. 22 It is important to appreciate that s 14I directs the valuer only to take into account the restrictions on "the disposition or manner of use that apply to the land by reason of its being the subject of the lease". The section not only reflects upon the conditions of the lease but also it requires the fact that the land is "the subject of the lease" must be taken into account. It nevertheless maintains the role of s 6A, which requires the land value to be determined as the capital sum which the fee-simple of the land might be expected to realise assuming that the improvements, other than land improvements, have not been made. The restrictions on disposition apply to the interest of the lessor as the owner of the fee-simple in the land. On one hand the land is encumbered by a lease with a term that does not expire until 24 July 2036 whereas the Minister has the power under s 90 to withdraw such parts of the land that may be required for a public purpose. On a plain reading of the section, s 14I does not require the constraints on the lessee's disposition imposed by the lease to be taken into account. However, I construe s 14I as requiring that any restrictions on the manner of use of the land by the lessee are deemed to apply as if they were a burden on the fee-simple. 23 The applicant relies upon the evidence of its consultant valuer Mr Dundas, who says that the exercise commences at s 14I. The s 6A(1) directive is inserted such that s 14I would read: "…to have its land value (being the capital sum which the fee simple…might be expected to realise … assuming that the improvements… other than land improvements …had not been made) determined taking into account the restrictions on the disposition or manner of use that apply to the land by reason of its being the subject of the Lease concerned". 24 The approach taken by Mr Halias, the valuer, who has given evidence on behalf of the Valuer General is that the valuation exercise involves determining the land value under s 14I by reference to the definition in s 6A and qualified by the restrictions on the disposition or manner of use that applied to the land by reason of the lease. 25 I agree with both Mr Peter McEwen SC and Mr Pickles that the difference in approach by the two valuers is illusory. I accept that the provisions of each section are relevant to determining the land value and that s 6A and s14I must be read in conjunction so that the value of the fee-simple is determined taking into account the restrictions referred to in s 14I(1). Valuation 26 In April 2005, the late Frank Egan was engaged by the club to carry out a valuation on behalf of the applicant. After referring to the provisions of s 6A and s 14I and a number of sales Mr Egan reached the conclusion and expressed his opinion that the land value of the land under the provisions of s 14I was no more than the existing valuation made by the Valuer General, namely $2,400,000. 27 In June 2005 the respondent filed a valuation report by Mr Halias who after considering some identified sales and having regard to the highest and best use of the land as a golf course and clubhouse, determined a land value at base date 1 July 2003 as $5,900,000. Mr Halias assumed that although there were some doubts about a legal access to the property it would not be denied in the future. Moreover, he assessed the value on the basis that s 14I was not applicable on the basis of his opinion that the lease did not fall within the certain classes of lease from the Crown referred to in s 58F of the Valuation of Land Act. 28 Mr Egan prepared a reply to the valuation by Mr Halias on 18 July 2005. In his second report Mr Egan noted, in particular, that there was no natural water supply and there was a difficulty with analysing sales that might be applied to the subject land. Six sales were referred to by Mr Egan. He expressed an opinion that the only sale with any relevance to a golf course was a sale of land at Pitt Town to the Kellyville Golf Club. It reflected a rate of $40,450 per ha. Assuming that the subject land was 33 percent superior to the Pitt Town land Mr Egan adopted a rate of $60,000 per ha as appropriate. He adopted $25,000 per ha for the 25 ha of bushland to reach a total value of $2,666,000. After taking economic factors into account he concluded, on what he described as a realistic basis, that $2,450,000 was a reasonable assessment of land value under s 6A as at 1 July 2003. 29 In a further report filed on 3 November 2005 Mr Halias assessed the land value at base date 3 July 2003 at a reduced figure of $4,650,000. In this report Mr Halias only refers to the difficulty over responsibility for maintenance of the access. Following comparisons and adjustments to a number of sales Mr Halias applied different rates to that part of the land he regarded as passive-active open space land and the land described as bushland within the course area to deduce an unrestricted value of $5,800,000. After taking into account the particular conditions of the lease and in particular the potential for withdrawal of the land from the lease area, the obligation to maintain the footbridge, as the right for certain authorised personnel to have vehicle access across the land and the obligation to obtain ministerial approval for any substantial changes to the playing area, Mr Halias reduced the unrestricted value by 20 percent to determine what he described as a Crown Lease Restricted Value (Land Rating Factor) of $4,650,000. 30 At a joint conference of the experts on 16 March 2006 Mr Dundas indicated that whilst he supported the general thrust of Mr Egan's report, that is, it is uneconomic to construct a stand alone golf course, he did not support Mr Egan's assessed Land Value at $2,450,000. He was of the opinion that the Land Value should be $400,000. 31 The primary method of valuation relied upon by Mr Halias is that the assessment of the land should be as "unrestricted" land zoned "Open Space" having regard to not only the Pitt Town sale but also to other open space sales. Thereafter he maintained that a discount should be applied to take into account the restrictions applicable under the terms of the lease. Mr Dundas on the other hand, is of the opinion that the value of the land should initially be assessed by way of capitalising the existing market rent of the land, which he says has been determined by reflecting the terms and conditions of the lease. According to Mr Dundas that is equivalent to the requirement for determining Land Value under s 14I. 32 Mr Halias agreed that as a secondary approach the value of the land may be checked by having regard to the capitalisation of the rental value of the site. However, his investigation persuaded him that the initial rental of $60,000 per annum was determined under "rental rebate policy" relating to Crown Land or Crown Reserve held under lease for a golf course. He says there is also a difficulty in drawing comparison between other leases of golf courses due to the unique circumstances that apply in each rental assessment of rent payable. 33 Using a secondary approach Mr Dundas considered the value of the subject land as a golf course site was $2,500,000. This deduction has regard to the sale at Pitt Town and takes into account the size of the subject land, lack of water supply, proximity of an adjoining helicopter base and the presence of protected flora and fauna on the subject land. He then discounted the value by 50 percent due to terms and conditions of the lease notably the restrictions on assignment in cl 38, the constraint on access and the potential for withdrawal of parts of the land in accordance with cl 90. Accordingly he determined the land value of the subject land at $1,250,000. 34 The opinions expressed by Mr Dundas at the joint conference were generally and effectively confirmed in a written report which he prepared on 26 April 2006. 35 A second joint conference was held between the expert valuers on 29 June 2006. Further details of the respective analyses undertaken by the valuers was provided in a report of the joint conference, but each of them maintained the position they previously held and the opinions they expressed at the March conference. 36 I agree with the valuers that the only sale that presents any prospect of comparability with the subject land is the sale of the land at Pitt Town to Kellyville Golf Club. Even so there are major differences, which demand a significant adjustment in order to reconcile the two properties thereby greatly increasing the potential for an unacceptable margin of error. Virtually the only directly comparable feature of the sale land is that it was purchased for the purpose of a stand alone golf course. Other sales had the added complexity of the potential for the golf course being related to an attached tourist or holiday resort. The aspect and location of the subject site is vastly superior to the land at Pitt Town being adjacent to the coast, with spectacular views of the coastline and close proximity to the eastern suburbs of Sydney. Although it is clear that the subject land enjoys physical access, the legal situation has not been clarified sufficiently to enable the Court to reach a confident conclusion about its legality. There are certainly doubts about the responsibility for maintenance of the access road. Large areas of the subject site are covered by an endangered ecological community. The location of a helicopter base on an adjoining property is a significant detraction from its value. 37 The Pitt Town sale shows a rate of $40,451 per ha which Mr Halias adjusts to $125,000 per ha for the subject site. The adjustment appears to take into account matters such as location, use, amenity, the proximity of the helipad, access and flooding potential. However, the lack of a reliable continuous water supply is another significant distinguishing feature for the subject land. 38 Notwithstanding the adjustments required, a comparison to the sale at Pitt Town may ultimately prove to be of some assistance depending upon the Court's determination of the veracity of using the capitalisation of rent method. 39 Although Mr Halias' value of $4,650,000 is greater than the land value derived by the Valuer General, the respondent does not contend for the higher value. It is used merely to support the valuation to which objection has been taken. 40 In his oral evidence Mr Dundas made the following points against using the Pitt Town sale:- 1. The Kellyville Golf Club had already sold its existing premises and was seeking to retain an active club membership. 2. The Pitt Town site is capable of a number of alternative uses such as agriculture, animal establishments, bus depots, bus station, childcare centres, community facilities, clubs, educational establishments, dwelling houses and hospitals. 3. Applying the terms of the lease the subject land is restricted to use for the purpose of a golf course. 4. Pitt Town is not exposed to the extremes of coastal weather (as the subject land is) which constrain the potential for vegetation growth. 5. The subject property is exposed to a situation whereby it is one of a number of golf courses competing for membership in relative close proximity with minimal potential for growth from residential development in the immediate area. 6. The potential for the flooding of the Pitt Town site could bring advantages in terms of water supply but disadvantages in terms of its amenity for use as a golf club. Conversely there is no flooding potential at the La Perouse site and there is not an assured water supply. 7. The subject site is constrained by the endangered ecological community of Eastern Suburbs Banksia Scrub. 8. Although a number of the constraints arising from the terms of the lease identified earlier do not, standing alone, have a significant effect, nevertheless they have a cumulative impact that does not apply to the Pitt Town land. 41 Mr Halias made the following observations in relation to his enquiries concerning the Pitt Town sale: 1. The General Manager of Kellyville Country Golf Club advised him that negotiations for the purchase were conducted on the basis that the land would be used for the purpose of constructing a golf course. 2. The land in Pitt Town is restricted by an environmental protection zoning. 3. He does not regard the NSW Golf Club land as having a restricted access by comparison to the Pitt Town land. 4. He recognised that almost 90 percent of the Pitt Town land is subject to flooding and made a discount accordingly. 5.- In accordance with instructions from the Chief Valuer of the Valuer General, the general restrictions imposed by Crown Leases are regarded as a formality so that a negligible or nominal amount is deducted to reflect those potential issues or matters that require ministerial consent. 6. On the other hand the constraint against harming or destroying the Eastern Suburbs Banksia Scrub is to be treated as an absolute restriction. 7. Generally an allowance of 10 percent has been made to reflect an adjustment for restrictions imposed by the lease. 8. Overall an allowance of 20 percent has been made to reflect all the restrictions including the so called nominal restrictions as well as the adjustments made to the land value by comparison to the sale. 42 Mr Halias has explained that the cleared lands have been analysed at the rate of $125,000 per ha whereas a discount of 50 percent has been applied to the bushland area by adopting a rate of $62,500 per ha. He thereby achieves an unrestricted value of $5,800,000 to which he then applies the discount of 20 percent to take account of the restrictions he regards as a formality (10 percent) and the additional restrictions, which exist beyond formality (10 percent). The total concession or deduction on that account therefore is 20 percent. 43 The above figures contrast to the $50,000 per ha "unaffected rate" adopted by Mr Dundas, who then reduced the result from a rounded figure of $3,000,000 to $1,500,000. 44 Mr Halias strongly disagrees with the 50 percent allowance made by Mr Dundas because the Pitt Town sale has been analysed on the basis of its potential use for a golf course, which accords with the restricted use imposed by the lease. In that respect he says the potential use reflected by the sale equates to the restricted use under the lease. That is the reason he only allows a 20 percent adjustment. In his opinion the additional 30 percent allowed by Mr Dundas is not justified. 45 Thus, there is a significant difference between Mr Dundas and Mr Halias based on an analysis of the comparable sale. The assessed unrestricted value adopted by Mr Halias equates to approximately $98,500 per ha in contrast to the unaffected rate per ha for La Perouse at $50,000 derived by Mr Dundas. 46 The difference in adjusted values is a reflection of the difficulty in a valuation exercise that involves a wide range of significant adjustments. The additional sales referred to by Mr Halias and Mr Egan do little to assist the Court to resolve the conundrum. The position is further complicated by the fact that Mr Dundas adopts an overall rate for the La Perouse property whereas Mr Halias and Mr Egan, (not unreasonably in my opinion) had regard to the different values that apply to the active lands and the bushland areas respectively. 47 In the circumstances I am not in a position as a judicial valuer to gain a great deal of assistance from the evidence from the valuers in respect of an application of the comparable sales method. I am therefore driven to approach the results with caution and seek a preferable method on the basis that it can be treated as more reliable. Capitalisation of rent. 48 On 25 May 1992 B.T Sykes registered valuer made an assessment of the current market rental for the land at La Perouse on the basis that it was used for golf club purposes taking account of the terms and conditions set out in the special lease document then current, namely No. 1984/5 Metropolitan. That lease commenced on 28 July 1984. After considering a number of leases and tenancies of golf course sites, Mr Sykes determined that the current market rental value, as at 14 April 1992, was $60,000 per annum. That figure comprised a component for the clubhouse and car park area in the sum $12,000 per annum and $48,000 per annum for the golf course area of approximately 58.45 ha. 49 Mr Sykes assessed the current land values as follows:- · The golf course area on the basis of "private open space" zoning - $4,400,000. · The clubhouse and car park area (say about 4,000 m2) on the basis of the current zoning of County Open Space - $200,000. 50 He observed that a typical residential block, representative of the La Perouse area and having an approximate area of 600 m2, was at that time $200,000. Details of membership numbers, subscriptions, green fees, income and operating costs are noted. The calculation of rent for the clubhouse component appears to be 6 percent of the value of the single residential lot land value in the locality. 51 In Class 3 proceedings commenced in 12 March 1993 the NSW Golf Club referred an objection to the valuation by Mr Sykes to this Court pursuant to s 38 of the Valuation of Land Act (New South Wales Golf Club Ltd v Valuer General (1993) 81 LGERA 428). After expressing serious misgiving in relation to the state of the valuation evidence Bannon J upheld the objection. He adopted a valuation figure of $2,236,000 applied by Mr Egan. Following this decision the rental assessment was reviewed and renegotiated at the sum of $35,000 per annum. The rental was revised in July 1999. It has remained at $40,000 per annum since that date, notwithstanding provision in the lease for a market rent review every 3 years pursuant to the provisions of s 142 and s143 of the Crown Lands Act. 52 Taking account of more recent leases of golf courses, notably the adjacent "The Coast" golf course at $50,000 per annum, Mr Dundas considers that the current market rent of the subject property, under the terms and conditions of the lease, is still below $50,000 per annum. He maintains his opinion that his primary method of capitalising the current rental of the property, more adequately assesses land value under the terms of s 14I of the Valuation of Land Act. By capitalising the current ground rental of $40,000 per annum at 10 percent he arrives at his preferred land value of $400,000. As Mr Halias points out, it is difficult to understand how the land value at base date 1 July 2003 could be $400,000 when in 1992 the land value was determined by the Court at $2,236,000. 53 The rental determined in July 1999 is just under 2 percent of the land value determined by the Court. Adopting 2 percent as the market capitalisation rate, means that the land value of $1,500,000 adopted by Mr Dundas would generate a rent of only $30,000 whereas a land value of $2,000,000 would reflect rent at the current rate of $40,000 per annum. 54 Mr Halias contends that the rent determined by Mr Sykes in 1992 was based upon a Rebates from Market Rent Policy adopted by the Department of Conservation and Land Management in respect of Crown Lands or Crown Reserves held on lease for a golf course. The difficulty with the argument is that the policy is dated 1 December 1993. It postdates the assessment made by Mr Sykes in May 1992 and the hearing by Bannon J on 23, 24 and 26 November 1993. Mr Sykes makes no reference to a rebate policy in any form and although some of the elements subsequently referred to in the policy are noted by Mr Sykes the calculations made by him do not on their face appear to reflect the subsequent policy. He notes his general instructions to provide an assessment of current market rental of Crown Lands used for golf club purposes, for the purpose of a report for the information of the Department of Lands. 55 The rental of $60,000 assessed by Mr Sykes is 1.36 percent of the amount he determined as the current land value of the golf course, clubhouse and car park area. Although there is no basis for any suggestion that Mr Sykes adopted a rebate policy it is nevertheless correct that the rebate policy had been introduced prior to the revision of the rental in July 1999. An account needs to be taken of the fact that the rental has not been reviewed on any basis since that date. 56 The Court is left to conject on the reasons for a lack of review since 1999. There is no means of understanding what current market rent would be if based on the calculation of a rebate in accordance with the rebate policy. The primary component for determination of a value for the clubhouse site and the parking area under the policy is the value of a single residential lot typical of the locality whereas the rebate for the links component can be based either on the amount of subscription income and green fees or taking account of playing times available to the general public. It might be expected nevertheless that a market rent determined on any basis as at 1 July 2003 would exceed the $40,000 per annum that has applied since 1999. 57 The Land Account issued to the club by the Departments of Lands on 10 October 2006 claims the rent payable in the sum of $40,000. The account bears the following endorsements:- The Department of Land is currently reviewing a number of leases and licences in relation to the rental rebates that are applicable. This review is still ongoing and may not be finalised for some time yet. Unfortunately, the review has delayed the issue of your account notice and this is regretted. On finalisation of the review, you will be advised in writing of any alteration to your current rebate levels where applicable. 58 In his oral evidence, given concurrently with Mr Dundas, Mr Halias decried the use of a 10 percent capitalisation rate by Mr Dundas as a potentially reflecting a commercial rate whereas in his experience when dealing with recreational uses such as a non-profit community golf club, the capitalisation rates can range between 2 and 5 percent. When given the opportunity to do so Mr Dundas elected not to comment on what Mr Halias had to say in regard to the capitalisation rate that could be applied to reflect a recreational use. During cross-examination Mr Dundas reiterated his opinion that the lease provides for payment of rent that has regard to the restrictions on disposition and the manner of use. Consequently that gives "a very good guide as to what the value of the land would be". In the circumstances therefore he says there is no comparison to be made with other properties. When deriving the land value by capitalisation of rent he assumed that the rent currently payable was a market rent. 59 I accept the evidence of Mr Halias that the rate of return from land held by a not for profit organisation could be in the order of 2 percent. This opinion is supported by the approach taken by Mr Sykes. On that basis the capitalisation of the return to the lessor could reflect a value of approximately $2,000,000. I agree with the argument put by Mr Dundas that the rental actually paid from time to time can be a measure of the impact of the terms of the lease on the rent return. If the Minister as a lessor considered that a greater return could be justified, there is provision for a Market Rent Review pursuant to ss 142 and 143 of the Crown Lands Act. 60 In the absence of evidence to the contrary the rent payable at a particular date must be assumed to take into account the restrictions referred to in s 14I by reason of the land being the subject of the lease. The Notice of Determination of Rent issued by the Department of Land and Water Conservation to the club in November 1998 confirms this. It refers to a redetermined market rent of $40,000 effective from 25 July 1999. The notice identifies the Policy – Rebates for Golf Clubs and concludes with the following statement:- This redetermination had regard to the market conditions that currently prevail and to any restrictions, conditions or terms to which the tenure is subject . Whether or not a rebate policy applies appears to be largely irrelevant if the rent determined pursuant to the policy is a reflection of the restrictions on the use for the purpose of a golf club. 61 The capitalisation of rent of $40,000 at 2 percent provides a useful check against the valuation made by the late Mr Egan and the secondary approach taken by Mr Dundas before adjustment. Given that the rental has not been reassessed since the 1999 year and relying on the only evidence of current rental paid for golf course land in the vicinity of the subject land as $50,000 the valuation by Mr Egan based on the Pitt Town sale can be sustained by a check using rent capitalisation based upon a figure of $50,000 per annum. 62 The other rents paid for golf courses indicate that the range of $40,000 -$50,000 per annum is not out of line with current rents paid for golf courses. 63 Mr Egan and Mr Halias took account of the value of work done in the form of clearing filling and levelling by way of land improvements for its use as golf course. Mr Dundas did not. Rent determined pursuant to s 142 and s143 of the Crown Lands Act does not take account of any improvements, including land improvements. An upward adjustment to a value determined by capitalisation of rent needs to be made for that reason. Conclusion 64 The evidence confirms that there is unlikely to be any demand in the market for land that can be used solely for the purpose of a golf club. 65 The adjustments made to the Pitt Town sale by all valuers have proceeded on the basis of a comparison between the two sites. 66 Mr Halias fails to recognise the lack of a real market for stand alone golf club use and that the Kellyville Golf Club purchase was a unique occurrence based on its particular needs to service an existing established clientele. 67 Mr Egan, and to some extent Mr Dundas, take a more realistic approach to the sale analysis of the Pitt Town site, although Mr Dundas, is in my view, too conservative. 68 The rent actually paid by the club is possibly out of date. Nevertheless it is evidence of the actual current return from the property subject to the terms of the lease. With the prospect of a rent review to improve the rate of return, I anticipate that the hypothetical purchaser could be persuaded to pay a price that justifies a land value of $2,500,000. 69 There was some debate whether the improvements made for the purpose of golf playing areas are strictly land improvements for the purpose of the assessment of land value pursuant to s 6A. I note (and agree on the basis of the evidence) that none of the valuers in their written evidence placed a significant value on these improvements. In the circumstances the lack of any active or real market for land developed as a stand alone golf course and restricted to only that use confirms the veracity of that approach. 70 I share the diffidence expressed by Bannon J in the earlier case but nonetheless doing the best that I can based upon the evidence as it stands, despite its shortcomings and in many respects its unreliability I determine that the land value of the subject land at 1 July 2003 was $2,500,00. 71 The formal orders of the Court are:- 1. Objection and appeal upheld. 2, Land value of the land leased by NSW Golf Club Ltd is determined pursuant to s 6A and s 14I of the Valuation of land Act 1916 as at 1 July 2003 as $2,500,000. 3. The exhibits may be returned. 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.