Bonatti v Valuer General
[2007] NSWLEC 261
•22 May 2007
Land and Environment Court
of New South Wales
CITATION: Bonatti v Valuer General [2007] NSWLEC 261 PARTIES: Applicant
Respondent
Antonietta Bonatti
Valuer GeneralFILE NUMBER(S): 30885 of 2006 CORAM: Miller AC KEY ISSUES: Valuation of Land :- Analysis and application of comparable sales LEGISLATION CITED: Valuation of Land Act 1916
Great Lakes Local Environmental Plan 1996CASES CITED: Spencer v The Commonwealth of Australia [1907] 5 CLR 418 DATES OF HEARING: 24 April 2007
DATE OF JUDGMENT:
22 May 2007LEGAL REPRESENTATIVES: APPLICANT
Mr D. Bonatti, agentRESPONDENT
Ms M. Carpenter, barrister
instructed by
Mr P. Rankins, solicitor
of Crown Solicitor's Office
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESMiller AC
22 May 2007
30885 of 2006 Antonietta Bonatti -v- Valuer General
JUDGMENT
1 This is an appeal by Mrs A Bonatti (the Applicant) against the Land Value assessed by the Valuer General (the Respondent) in respect of part Lot 4 DP 13357 Carrington Road, North Arm Cover (the site).
BACKGROUND
2 The Land Value of the site, as assessed by the Respondent as at 1 July 2005 was $23,800.00. The Applicant contended that the Land Value should have been $32,000.00.
THE SITE
3 The site, as originally subdivided, had an area of 1,341 sq m. However, the widening of Carrington Road reduced that area by 210 sq m. Accordingly, the site now has an area of 1,131 sq m, a frontage to Carrington Road of 29.935 m, a depth on the northern boundary of 41.875 m, on the southern boundary of 33.625 m with a rear alignment of 30.48 m. The site rises gently to the rear with a small cross fall to the north east corner.
4 The site has been fenced with a post and rail type fence, a small stable building with water tank has been constructed on the land while it is apparent that some clearing of native vegetation has occurred.
THE EVIDENCE
5 Mr R A Rossi, Registered Valuer No. 2547, gave evidence on behalf of the Applicant and assessed the Land Value of the site at $32,000.00.
6 Mr R Cooper, Registered Valuer No. 4029, gave evidence on behalf of the Respondent and assessed the Land Value at $23,800.00
7 Both Valuers carried out their valuations in accordance with the provisions of s 6A(1) of the Valuation of Land Act 1916.
8 Carrington Road is sealed and provides a connection between North Arm Cove Road and the very small village of Carrington. The zoning of the villages of Carrington and North Arm Cove permits residential development.
9 A high voltage electricity line extends along Carrington Road and subject to a cost of approximately $10,000.00, which figure was unchallenged by the Respondent, electricity could be made available to the site. However, town water, sewerage or drainage is not available.
10 It was common ground that the site was zoned Rural 1(a) under the Great Lakes Local Environmental Plan 1996 (“the LEP”).
11 Mr Rossi contended that the definition of “existing holding”, (s 19 of LEP 1996) gave an entitlement to construct a dwelling on the site. However, both valuers, included in their valuation reports a one page leaflet from Great Lakes Council entitled “Information Regarding 1A Rural Land Without Dwelling Entitlements in North Arm Cove, Pindimar, Bundabah, Carrington Locality”. This leaflet states, among other things:-
“In accordance with cl 19 of this Plan they (being certain lands in localities to which the leaflet refers) must have an area of 40 ha for Council to consent to the erection of a dwelling thereupon”,
“This current situation is not the result of a Council approved subdivision but stems from a subdivision created in the early 1900s, well before the introduction of formal planning legislation/controls that are now administered by local councils”,
“The majority of these lands have been zoned “Non Urban” and have had no building entitlements since 1964”,
“As such lands are primarily constrained in terms of access, provision of infrastructure (water, sewerage, roads and drainage), flooding and/or high ecological sensitivity and as they are unlikely to meet the Sustainability Criteria outlined in the Department of Planning’s Draft Mid North Coast Regional Strategy , there is little prospect of any change to their non urban zoning for the next 25 plus years (ie 2031).”
12 Prospective purchasers of the site and other lands in the vicinity of the site would have been supplied with this document on enquiry at the Council while a sign, erected by the Council on the roadside near the entrance to the North Arm Cove area acted as a warning that prospective purchasers should make enquiries of the Council regarding dwelling entitlements.
13 It is significant to note that during the extensive inspection made of the North Arm Cove area it became apparent that no dwellings had been erected on land zoned Rural 1(a). There are some 3,000 lots similarly zoned in the North Arm Cove area and of this number the site is the most developed of all, a few have some unenclosed small low grade structures (somewhat akin to a car port constructed of unsawn round timber) but the remaining lots are in their natural “bush” state.
14 Mr Rossi referred to five comparable sales which number was expanded to six during the Hearing. The five original sales were inspected. The land comprising all six sales was zoned Rural 1(a). Details, as provided by Mr Rossi, are as follows:-
“1. Lot 2469 Beechwood Crescent, North Arm Cove. Bush block with formed accessible track distant to services and village area. No power – 847 sq m – Sold – 16 May 2004 $23,000 at $26.55 per sq m.
2. Lot 1452 Merriwa Bvd, North Arm Cove. Broken and limited water views. No power – 1050 sq m – Sold – 26 June 2006 $28,500 at $27.14 per sq m.
3. Lot 1406 Merriwa Bvd, North Arm Cove. No water views. An accessible dirt road from village area. No power 866 sq m – Sold – 13 December 2004 $42,000 at $48.49 sq m.
4. Lot 1411 Merriwa Bvd, North Arm Cove. No water views, an accessible dirt road from village area. No power 1195 sq m – Sold – 30 March 2005 $47,000 at $39.33 sq m.
6. Lot 1412 Merriwa Boulevard was not actually inspected but it adjoins Lot 1411 that was inspected and it was agreed that it was similar to that adjacent lot. Lot 1412 sold on 19 May 2005 for $46,500.00. Land size is 1,669 sq m. The sale price is the equivalent of $27.86 sq m.5. Lot 1394 Merriwa Bvd, North Arm Cove. Typical lot, accessible dirt road to village. No power – 1518 sq m – Sold 9 June 2004 $60,000 at $39.52 per sq m.” (It was noted that the contract was signed on 17 May 2004 with transfer occurring on 1 June 2004.)
15 Mr Cooper’s comparable sales were as follows:-
“1. Pt Lot 8 Carrington Rd, North Arm Cove
Sale Date: May 2006 Sale Price: $22,000 Site Area: 1,216 sq m Description: Vacant land within 80 m of the Property. 1(a) Zoned bush Lot with tar sealed road frontage. Adjoins drainage culvert under road. Adjustment to Base Date: The property sold 10-11 months post the 2005 base date. There is no sales evidence to indicate that the market has fallen for similar properties. No adjustment considered appropriate. Analysis: Indicated $18.09/sq m at Contract date or a range of $17.27/sq m to $19.07/sq m adjusted. Comments: Slightly inferior site, similar zoning and permissible use. Allowing a -%% to +5% range adjustment to base date the sale indicates a range of $21,000 to $23,200 at base date.
2. Pt Lot 65 Carrington Road, North Arm Cove
Sale Date: February 2005 Sale Price: $19,000 Site Area: 693 sq m Description: Vacant land located on the same side of the road as the Property. 1(a) Zoned bush Lot with tar sealed road frontage. Analysis: Indicates $27.41/sq m Comments: Smaller bush block with similar zoning and permissible use. Agent advises that this Lot has been put back on the market for 6 months, asking $20,000 without offer. We do not believe that the sale price requires any adjustment to base date being within 4-5 months of 1 July 2005.
3. Lot 26 Tenterfield Rd, North Arm Cove
Sale Date: April 2005 Sale Price: $19,500 Site Area: 841 sq m Description: Vacant land located and adjoining the rear of the Property with poor gravel access. 1(a) Zoned bush Lot. Analysis: Indicates $23.18 sq m Comments: Smaller bush block with similar zoning and permissible use. We do not believe that the sale price requires any adjustment to base date being within 2-3 months of 1 July 2005.
4. Lot 1931 Somerset Ave, North Arm Cove
Sale Date: February 2005 Sale Price: $20,000 Site Area: 841 sq m Description: Vacant land, located in the same subdivision as the Property. 1(a) Zoned bush Lot with gravel road access. The block has been cleared and was mown at the date of inspection. Analysis: Indicates $17.76 sq m Comments: Slightly smaller bush block with similar zoning and permissible use. We do not believe that the sale price requires any adjustment to base date being within 4-5 months of 1 July 2005.
5. Lot 2063 Lismore Rd, North Arm Cove
Sale Date: October 2005 Sale Price: $21,000 Site Area: 1,454 sq m Description: Vacant land, located in the same subdivision as the Property. 1(a) Zoned bush Lot with gravel road access. The block has been cleared and was mown at the date of inspection. Analysis: Indicates $14.44/sq m Comments: Slightly smaller bush block with similar zoning and permissible use. We do not believe that the sale price requires any adjustment to base date being within 4-5 months of 1 July 2005.
FINDINGS
16 Both valuers agreed that the purchase of lots in the North Arm Cove area were speculative and purchased with the hope that rezoning and the provision of infrastructure would enable the land to be developed at some time in the future. Mr Rossi based his valuation on an analysis of his six sales relying upon a rate of dollars square metre. While Mr Cooper also analysed each of his five sales on a similar basis I am satisfied that lots zoned Rural 1(a) in the North Arm Cove area sell on a per lot basis rather than a dollars square metre basis.
17 Mr Rossi’s six sales are all located within some 400 m of the boundary of the North Arm Cove village area. Sale 2 has a water frontage and water views while Sales 3, 4 and 6 have water views either to or over Port Stephens (as the case may be). I concur with Mr Cooper that Sale 5 is “out of line” and the very short settlement period is a sign of some unusual features relating to this transaction which only confirms my view. In my opinion Mr Rossi’s five remaining sales are all influenced by their proximity to the boundary of North Arm Cove village area where the possibility of rezoning is more likely to occur considerably earlier than in other sections of this very large subdivision, the water frontage and water views available in the case of Sale 2 and the water views available from Sales 3, 4 and 6. For these reasons, I do not consider that Mr Rossi’s sales can be relied upon to provide compelling evidence to support his contended Land Value of the site.
18 I regard Mr Cooper’s Sales 1 and 2 as critical to the assessment of Land Value of the site. Sale 1 is some 80 sq m larger than the site but has a narrower frontage. This fact, together with its lower lying nature, makes it inferior. In the absence of any evidence to the contrary, I accept Mr Cooper’s opinion that no adjustment needs to be made to the sale price for the fact that this sale occurred 10-11 months after the valuation date.
19 Sale 2 is some 300 m north of the site, is a much smaller block having an area of 61% of the site. The sale date is some four months prior to the valuation date.
20 Sale 3 adjoins the site at the rear. However, Tenterfield Road comprises no more than a narrow poorly formed bush track which is being encroached by native vegetation. Once again, it is a smaller lot with the sale date some 2-3 months prior to the valuation date.
21 Sales 4 and 5 are both, what were referred to as “bush blocks”, and can be more correctly compared with Sale 3 although much more remote from Carrington Road.
22 I now turn to the question of building entitlement. It was submitted that the site was an “existing holding” because it comprised “except as provided by paragraph (b) – the land comprised in a lot, portion or parcel of land as it was on 15 May 1964, whether or not it has subsequently been subdivided;” (s 19(2)(a) of LEP 1996). The lots comprising Mr Cooper’s Sales 1 and 2 together with the site, were all included within Certificate of Title Volume 5039 Folio 87 which is dated 9 May 1939. In accordance with the Judgment in Spencer v The Commonwealth of Australia [1907] 5 CLR 418, it must be assumed that the market was aware of all features pertaining to Mr Cooper’s Sales 1 and 2 which, in respect of the concept of an “existing holding” were the same as the site. For this reason it is not necessary for me to find whether or not the site was an “existing holding” or to make any adjustment to Mr Cooper’s Sales 1 and 2.
23 I am satisfied that the Land Value assigned by the Valuer General in the sum of $23,800.00 as at 1 July 2005 meets the definition in s 6A(a) of the Valuation of Land Act 1916.
ORDERS
24 The Orders of the Court:-
1. The Appeal is dismissed.
2. The Land Value of part Lot 4 DP 13357 Carrington Road, North Arm Cove at 1 July 2005 is $23,800.
3. No Order is made as to costs.
4. The Exhibits are returned.
___________________
- C Miller
Acting Commissioner of the Court
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