Land and Environment Court New South Wales Medium Neutral Citation: Fitzgerald v Valuer General (No 3) [2011] NSWLEC 1198 Hearing dates: 21 June 2011 Decision date: 21 June 2011 Jurisdiction: Class 3 Before: Moore SC Decision: 1.The appeal is upheld; 2.Pursuant to s 40(1) of the Valuation of Land Act 1916, in lieu of the statutory valuation as at the base date of 1 July 2009, a value of $520,000 is substituted; and 3.The exhibits, other than Exhibits B and 2, are returned. Catchwords: Statutory valuation; non-use of other statutory valuations for comparative purposes; adjustments to comparable sales Legislation Cited: Valuation of Land Act 1916 Cases Cited: Flack v Valuer General (1952) 18 LGR 157 Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111 Category: Principal judgment Parties: Brian Fitzgerald (Applicant) Valuer General (Respondent) Representation: Counsel Applicant in person Mr N Broadbent (Respondent) Crown Solicitor's Office (Respondent) File Number(s): 30012 of 2011 EXTEMPORE Judgment 1In these proceedings, Mr Fitzgerald appeals against the statutory valuation for his property at Lisarow as at the base date of 1 July 2009. Unusually for proceedings such as these, Mr Fitzgerald is seeking to substitute a significantly higher figure for the valuation that has been determined by the Valuer General as being the relevant statutory valuation as at 1 July 2009. 2The value that the Valuer General has placed on the property, as at the base date, is $483,000 and the value for which Mr Fitzgerald contends, as at the same date, is $759,000. 3Mr Fitzgerald has provided a variety of material in support of his contention. Much of that material is material that I am not permitted to have regard to as part of the valuation process. It is clear from decisions in the predecessor Court to the Land and Environment Court, the Land and Valuation Court, that it is not appropriate to have regard to matters that are not related to the exercise one is required to undertake pursuant to s 6A of the Valuation of Land Act 1916 . In 1952 in Flack v Valuer General (1952) 18 LGR 157,Sugarman J indicated specifically that one should not have regard, as a general principle, to other statutory valuations either earlier statutory valuations (of the same allotment or other statutory valuations of other land) as at the same or other base dates. 4Similarly, the basis of valuation that is used for the purposes of supporting an application for finance from a lending institution is not the same as the statutory valuation that is required by s 6A of the Act. 5The guidance that is provided to me by the decision of the High Court in Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111 provides that the principal basis upon which such valuations should be undertaken and the appropriate basis is a comparable sales basis. Even if there be only one sale that is comparable, it is appropriate to have regard to it. 6In this instance I have a statement of evidence from a licensed valuer, Mr Paul Links, who has given evidence on behalf of the Valuer General in support of the statutory valuation of $483,000. In doing that, he relied on seven comparable sales. Following initial consideration of that material, I inquired of Mr Broadbent, counsel for the Valuer General, whether the Valuer General proposed to continue to rely on all of those sales given that at least three of them were in the adjacent local government area, Wyong Shire, rather than in the current local government area within which Mr Fitzgerald's property is located, that being Gosford City Local Government Area. 7After consideration, Mr Broadbent indicated that the Valuer General did not rely on the sales in Wyong Shire but continued to rely on three sales within the same 7(c2) zoning pursuant to the Gosford Interim Development Order and, in addition, relied on a further sale within the Gosford City area that was zoned 7(a) conservation. 8During the course of today's hearing, I have had the opportunity not only of hearing evidence from Mr Links in the courtroom but to visit all four of the sales within the Gosford City area as well as visiting Mr Fitzgerald's allotment. 9At my request, in addition to his statement of evidence, Mr Links provided an adjustment table setting out the reasons why he made the various adjustments for the various sales to render them appropriately comparable with the land that is the subject of Mr Fitzgerald's objection. The four sales upon which he relied are a sale immediately adjacent and to the south of Mr Fitzgerald's allotment; a sale in a street immediately to the east of Mr Fitzgerald's allotment and located some 250 or 300 metres to the east; and sales in Lisarow and Matcham (somewhat more remote from the sales that are contained in the immediate vicinity of Mr Fitzgerald's land). 10As a consequence of the process upon which I am obliged to embark, it is necessary for me to consider the evidence relating to those four sales to render comparable land values for the purposes of the first step in s 6A of the Act and then to add, to any deduced value, the sum of $20,000, on Mr Links' contention, or $81,000 on Mr Fitzgerald's contention, to represent the land improvements that have been undertaken to Mr Fitzgerald's allotment. These land improvements comprise primarily drainage works and a new concrete driveway together with a modest, and somewhat dilapidated, brick retaining wall of uncertain vintage to the rear of the dwelling that is located on the property. Mr Fitzgerald has not provided any evidence in support of his claim for $81,000 being the cost of the works. It is Mr Links' uncontested professional evidence that an appropriate estimate for that is $20,000. 11In a position where I am faced with a position of uncontested expert evidence; no relevant contravening documentary evidence; and no shaking of that position of Mr Links by cross-examination, I do not have any basis upon which I could decline to accept that uncontested expert evidence. 12As a consequence I am obliged, in my view, to accept the evidence of Mr Links on the land improvements of $20,000. 13It is therefore necessary to turn to and consider what should be the base amount to which the $20,000 land improvements should be added. 14It was Mr Links' evidence that, turning first to the sale that he relied upon as the principal sale, that is an allotment of comparable size but somewhat smaller in Beray Close at Lisarow. This was sold at a date sufficiently close to the base date that Mr Links did not make an adjustment for time and where Mr Links made adjustments for the difference in area of 5%; for the topographic nature, that is the more sloping allotment and less immediately usable area of 10%; and of views of 5%, albeit being adjustments in favour of Mr Fitzgerald's proposition, to give an adjusted value which he has rounded to $475,000 but which, on a proper calculation, would be $474,000. I am satisfied, from our site inspection, that the adjustments that Mr Links has made for area and topography are appropriate. 15I am not satisfied that the adjustment that he has made for views is appropriate. From our inspection of Mr Fitzgerald's property, it was clear that he has, as a consequence of the lack of vegetation in the foreground of his dwelling, extensive district views to a vegetated outlook to both the north and north east. Views that would be far more constrained from the dwelling site on the allotment in Beray Close which will be views to vegetation in the immediate vicinity to the north, to the north west and directly to the west. As a consequence, I would adjust that number not by the amount of 5% but by adding a further 5% to that adjustment to make a total adjustment of 25% rather than of 20% for those purposes. 16I then turn, acknowledging that Mr Links relies on that valuation principally in support of his case for the retention of the statutory valuation, to the other three valuations upon which he relies. I am satisfied that they are significantly less comparable than those that are the numbers that are derived from the Beray Close one. 17I do so for the following reasons: * First, the Cutrock Road, Lisarow site is of a significantly differently vegetated nature and subject to greater restrictions. After correcting an arithmetic error in Mr Links' adjustment table it would be necessary to adjust that site by 25% to render it comparable. * For the site at Matcham, it is necessary to have regard to, and make adjustments for, an entirely different range of impacts compared to the site that is Mr Fitzgerald's property. I accept Mr Links' adjustments made on the basis that the Matcham property is at a significantly superior location for access to human services and the like, that he has made an appropriate adjustment for area. There is no need for an adjustment for zoning but I am satisfied that his adjustments of 5% in favour of Mr Fitzgerald in each instance for views and topography are insufficient. The allotment at Matcham dropped quite steeply from the road to a forested watercourse. It was one that was considerably narrower in its dimensions of its developable area. The amount of open space that would be available to be enjoyed by occupants of the property was both limited and quite steep compared to the comparatively open nature of the development site available on Mr Fitzgerald's allotment including the amount of comparatively flat grassed area available. 18I am of the view that there is a significant topographic difference between them and that that has not been adequately accounted for in Mr Links' adjustment of 5% where I think that that adjustment should be considerably higher at 12.5% and not 5%. 19A similar position applies with respect to views. The views that are available from the Matcham property are essentially to the bush at the rear and to the embankment at the front leading up to the road with views to developed land on either side. 5% is not an adequate accounting for that nature and that too should be at 12.5% rather than 5% - thus increasing the amount of adjustment that is necessary to render those sites comparable at 20% rather than 5%. 20The adjustments that are made with respect to the immediate property to the south of Mr Fitzgerald's, that is sale number seven, include an adjustment that needs to be made of a "considerable amount" (some 10%) to take account of the time since that sale was effected some two years prior to the base date, it being Mr Links' uncontested expert evidence that there was a decline in the market of 10 to 12.5% over that time, he adopting 10% decline in the market for comparison purposes and me accepting that. 21He adjusts by 10%, in favour of Mr Fitzgerald, for area but makes no adjustment for topography and views. I am of the view that there are much better views from Mr Fitzgerald's and that an adjustment of 5% should be made (given the restrictions on clearing that would apply to the property immediately to the south). A similar position applies for topography, although the adjustment would be more minor (of the order of 2 or 3%). 22It is not necessary for me to undertake a detailed calculation to the last dollar of where that leaves all those properties but it is my calculation that, without making an allowance for the land improvements, that the upper level of the range that would be appropriate would be of the order of $535,000 through to an order of $495,000 or thereabouts. 23I am of the view, however, that the appropriate principally comparable sale is that which was adopted by Mr Links of the nearby property at Beray Close and that if one were to take that property (at his adjusted valuation of $474,000), add the additional 5% valuation which I consider to be appropriate for the reasons I have given, there is a resultant additional $23,700 to be added which would give a valuation of approximately $497,500. To this figure should be added the amount of the land improvements which would bring the value to $517,500. Having regard to the fact that that is toward the bottom of the range that is supported by the relevant comparable values, it would be appropriate, under the circumstances, in my view to round the number up to the nearest $10,000 which would give a value, as at 1 July 2009, for Mr Fitzgerald's property of $520,000. 24The orders of the Court therefore are that 1.The appeal is upheld; 2.Pursuant to s 40(1) of the Valuation of Land Act 1916, in lieu of the statutory valuation as at the base date of 1 July 2009, a value of $520,000 is substituted; and 3.The exhibits, other than Exhibits B and 2, are returned. Tim Moore Senior Commissioner 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. Decision last updated: 15 July 2011