Land and Environment Court of New South Wales CITATION : Roggiero v Valuer General (No 2) [2008] NSWLEC 1400 APPLICANT David Roggiero PARTIES : RESPONDENT Valuer General FILE NUMBER(S) : 30957 of 2007 CORAM: Moore C KEY ISSUES: Valuation of Land :- Objection to statutory valuation LEGISLATION CITED: Valuation of Land Act 1916 Brigenshaw v Brigenshaw (1938) 60 CLR 336 CASES CITED: Roggiero v Valuer General (2008) 159 LGERA 411; [2008] NSWLEC 170 Flack v Valuer General 1952 18 LGR 157 Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111; 195 ALR 236; 77 ALJR 727 DATES OF HEARING: 26 August 2008 EX TEMPORE JUDGMENT DATE : 26 August 2008 APPLICANT In person LEGAL REPRESENTATIVES: RESPONDENT Ms M Carpenter, barrister INSTRUCTED BY Crown Solicitor JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Moore C 26 August 2008 30957 of 2007 David Roggiero v Valuer General JUDGMENT This decision was given as an extemporaneous decision. It has been revised and edited prior to publication. 1 COMMISSIONER : S 37 of the Valuation of Land Act 1916 provides that a person may object to a valuation of land made by the Valuer General and, having been dissatisfied with the Valuer General's determination of such objection, may appeal to this Court against the failure of the Valuer General to sustain the objection. 2 S 39 of the Act makes it clear that the parties to that appeal are not limited to dealing with merely the grounds of objection to the original valuation. 3 S 40 of the Act sets out two critical provisions. The first, in s 40(1), sets out the powers that this Court has when dealing with the appeal. Second, it also sets out, in s 40(2), quite expressly that the appellant in such an appeal bears the burden of proof of establishing their case. That burden of proof is a civil one and is to be discharged, as the High Court says in Brigenshaw v Brigenshaw (1938) 60 CLR 336 , with the degree of comfortable satisfaction necessary for the nature of the appeal being dealt with. 4 In these proceedings, the matter had originally come before an Acting Commissioner of the Court who had given a decision upholding the appeal and giving a lower valuation than that for which the Valuer General had originally contended and now contends in these proceedings. In the subsequent appeal pursuant to s 56A of the Land and Environment Court Act 1979, that decision was set aside for reasons that do not need to detain me. The matter was remitted by Sheahan J for a fresh hearing by a different Commissioner (see Roggiero v Valuer General (2008) 159 LGERA 411; [2008] NSWLEC 170) . 5 As a consequence, I have come, today, to deal with Mr Roggiero's objections to the valuation, as at base date 1 July 2006, for his property which is located at 18 Collaroy Street, Collaroy. 6 It is convenient, at the commencement of dealing with matters of detail, to set out a little about the site. His property is located on the southern side of the street. It has an area of 404.7 sq m and a brick dwelling some 45 or so years old is erected upon it. 7 Although not strictly complying with the timetables for the provision of evidence (but accepting that, except to an extremely limited extent, the basic factual material and opinions have been provided to the applicant during the earlier proceedings and therefore the applicant was not prejudiced), an expert witness statement by Mr Shields, a qualified and experienced valuer, has been tendered on behalf of the Valuer General. 8 During the course of this morning's site inspection, I also inspected, with the applicant and the representatives of the respondent, not only Mr Roggiero's home but also nine other locations that were relied upon by the Valuer General and which had been discussed, as comparable sales, in Mr Shields' statement of evidence. 9 In the course of Mr Shields' oral evidence this afternoon, he has accepted that sales 6 to 9 inclusive, in his statement, are outside what might be regarded as the comparable catchment and he no longer relies upon those sales. However, there are four other sales in the same street, that is, Collaroy Street, and one sale in Alexander Street (being a property that backs onto properties fronting the southern side of Collaroy Street) that are relied upon by the respondent. 10 Mr Roggiero has provided an informal statement of evidence in which he deals with a number of matters, including the fact that a number of adjacent allotments of differing land area have had the same statutory valuation applied to them. 11 It is clear that I am bound by the decision given in the Land and Valuation Court by Sugerman J in Flack v Valuer General 1952 18 LGR 157, particularly at p 158, where his Honour said that: "As a general principle when dealing with a specific site the appropriate approach to take is to undertake one of the more conventional and accepted methods of valuation", 12 It is clear from what his Honour dealt with in that case that it is inappropriate to have regard to other statutory valuations in the vicinity and I am bound by that proposition. 13 Although Mr Shields gave evidence that he had had regard to a variety of adjustment factors in dealing with each of the comparable sales upon which he relied, he did not provide an analysis of the adjustments he has applied for each of the factors and I accept the reasons why he considers that it is inappropriate to do so. He has also not provided any valuations per square metre of his deduced values for the various sites that are involved, although I consider that it is relevant to have heed to them. 14 It is important at this stage to note that, for each of the five sales in the Collaroy Street catchment upon which Mr Shields relies, they comprise sales which occurred from approximately one year prior to the base date, that is in July 2005, through sales which took place some seventeen months or so after the base date, in November 2007. Each of the sites differs in area, in attributes as to topography and views, but all of them are residential sites with an entitlement to build a dwelling upon them. 15 Although it is counter-intuitive to say it, it is an accepted practice of valuation that the larger the site area (for residential sites) the lower the rate per square metre that will be derived for the land value (for sites of similar nature but differing areas). The reason that arises is because residential allotments contain two components – in simplistic terms for their valuation, a little analogous to a taxi fare, the flag fall element is the fact that there is a building entitlement to build a residence upon the land and that will be a substantial initial element of the valuation of the site. 16 The second element is the value that might be attracted to the additional land area quite independent from the entitlement to erect a dwelling. The consequence of that is that larger sites almost inevitably, unless they have some other unique and compelling feature, will have a lower deduced dollar value per square metre than small sites. 17 I have carefully considered the rates that arise from the adjusted land values as at the base date that have been deduced by Mr Shields. The value that he has deduced for the applicant's property is $1,952 per sq m. For sale 1, which is a smaller site some 75% or so of the size of Mr Roggiero's site, it is $2,174 per sq m. Two site sales, 2 and 3, are almost identical in size to that of Mr Roggiero's site and have deduced values as at the base date of $1,826 per sq m and $1,997 per sq m respectively. The largest of the sites and one which Mr Roggiero addressed, on the basis of not understanding why it was so comparatively low in value when treated as a comparable with a demolished house on it, comes at $1,273 per sq m and the final site, which is also a smaller site, some 75% of the appeal site, comes to a valuation of $2,240 per sq m. 18 All of those values are consistent with the two step proposition that I have enunciated concerning the valuation of differently sized residential properties. It is particularly relevant that the value ascribed to Mr Roggiero's site of $1,952 per sq m (rounded) is in the middle of the values of the two sites of comparable value and comparable size. 19 I am satisfied that there has been no basis of attack upon Mr Shields' evidence that would cause me to disturb any of the valuations that he has given. 20 I have considered the material that has been provided by Mr Roggiero, in support of his objection, to the extent that it relates to other values. Those values contained in a letter from Northern Beaches Real Estate Pty Limited are values expressed as at 11 January 2008. They are for properties that are, at least for two of them, significantly outside the catchment area of the Collaroy Beach/Collaroy Street precinct earlier described. The other, which is on Pittwater Road at Collaroy, appears to be for a multiple unit dwelling but, in any event, there is no suggestion that I have any information as to how I should adjust those values for location, topography, state of the market over time or for any other reason. 21 I am satisfied that the value of $1,952 per sq m for Mr Roggiero's property fits comfortably within the range of values that I accept, on the uncontradicted expert evidence of Mr Shields, are an appropriate range of values based on comparable sales – comparable sales being the appropriate and preferred method of valuation as endorsed by the High Court in Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111; 195 ALR 236; 77 ALJR 727 when such information is available to enable that process to be adopted. As a consequence, I am not satisfied that Mr Roggiero has discharged the onus of proof imposed by s 40(2) of the Act and, as a consequence pursuant to s 40(1)(a), I confirm the valuation of the Valuer General of the property as being $790,000 as at the relevant base date. 22 The objection is dismissed and the exhibits are returned. Tim Moore 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.