J Byrne v Valuer-General

[2006] NSWLEC 64

Land and Environment Court

of New South Wales

CITATION:	J Byrne v Valuer-General [2006] NSWLEC 64
PARTIES:	APPLICANT J Byrne RESPONDENT Valuer-General
FILE NUMBER(S):	30960 of 2005
CORAM:	Moore C
KEY ISSUES:	Valuation of Land :-
LEGISLATION CITED:	Valuation of Land Act 1916
DATES OF HEARING:	1 February 2006
EX TEMPORE JUDGMENT DATE:	02/01/2006
LEGAL REPRESENTATIVES:	Applicant in person RESPONDENT Ms A Pearman, barrister INSTRUCTED BY NSW Crown Solicitor

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Moore C

1 February 2006

05/30960 J Byrne v Valuer-General

This decision was given as an extemporaneous decision. It has been revised and edited prior to publication.

JUDGMENT

1 COMMISSIONER: This is an appeal pursuant to s 40 of the Valuation of Land Act 1916 (the Act) against the statutory valuation (as at the base date of 1 July 2004) for a property at 34 Gloucester Street, Nelson Bay – being Lots 1 and 2 in Strata Plan 43037 (the site). The site has a frontage to Gloucester Street on its southern boundary and a fall both slightly across the block and, in a somewhat more pronounced fashion, from the south to the north to its frontage to a waterfront reserve.

2 The statutory valuation against which the appeal is made is an amended statutory valuation, the Valuer General having allowed, to a limited extent, an earlier objection. That amended statutory valuation is in the sum of $1,050,000 as at the base date.

3 As part of the evidence in the proceedings, the respondent provided a statement of evidence from Mr Eric Prince, an experienced and registered valuer, which contained a number of comparable sales. That document was admitted as an exhibit and Mr Prince’s table of adjustments was also admitted as an exhibit. Mr Prince also gave oral evidence.

4 I had the opportunity of inspecting the site in company with the applicant and with the representatives of the respondent, and to conduct an external inspection of two comparable properties prayed in aid by Mr Prince, they being 1 Burbong Street Nelson Bay, (a property immediately to the north-west of the site), and 2 Gloucester Street (at the other end of Gloucester Street to the east). The latter is a property with perhaps broadly similar dimensions, but with a far more significant slope from south to north, and with a perhaps similar cross slope on the block.

5 Mr Byrne, in the course of his submissions, suggested that, in reality, the most appropriate course to follow would be to have regard to 1 Burbong Street, the neighbouring property, and to disregard (for a variety of reasons) 2 Gloucester Street.

6 The third comparable sale put in Mr Prince’s report at 2 Boulder Bay Road was, after a discussion with Ms Pearman, counsel for the respondent, not pressed by the respondent.

7 I am content to deal with the matter on the comparable basis suggested by Mr Byrne, namely a comparison between 1 Burbong Street, Nelson Bay and the subject site. I do so based on the sales information for that allotment (which was subject to the contract of sale entered into on 5 July 2003 for a purchase price of $1,650,000).

8 Mr Prince made a number of adjustments to that price to arrive at a deduced value for the subject site of $1,281,644 or in rounded terms, $1.28 million.

9 He did so by applying several factors of adjustment to the original purchase price:

• He increased the purchase price to account for the time difference between July 2003, being the contract date, and 1 July 2004, being the base date for these proceedings. In doing so, he applied a market adjustment of 10 percent which he said applied on a steady basis across the market in that area;
• He notionally removed the value of the improvements on 1 Burbong Street; and
• He then made adjustments of 5 percent each for land size and views between the adjacent property and the site.

10 When cross-examined by Mr Byrne concerning figures demonstrating, on a broader pricing basis for the entire Port Stephens Local Government area, a differing percentage, it was Mr Prince's evidence – expert, uncontested and accepted by me – that the market for waterfrontage or waterfront reserve land in that vicinity grew at a steady 10 percent during the 2004 year. It was his evidence that the market slump did not impact on those types of properties until the end of 2004 or early 2005 – being well after the base date in these proceedings.

11 I therefore accept that his time adjustment to the purchase price is an appropriate one.

12 As a result of these adjustments, he arrived at a total adjusted valuation (after making a deduction for the improvements on the property) of $1.65 million and a per square metre comparable rate of $2,500 rounded.

13 There was an area of contention between Mr Byrne and Mr Prince as to the nature of the construction of the dwelling presently on 1 Burbong Street and to its floor area.

14 I was invited to make an inference from an unscaled site plan (contained in material tendered by Mr Byrne) to infer that the area size of the dwelling on 1 Burbong Street was substantially larger than the size measured by Mr Prince.

15 The evidence given by Mr Prince was that he physically measured that site and arrived at a size approximately half of that which I am asked to accept from a document entitled ‘Description of number 1 Burbong Street Nelson Bay’ which was tendered by Mr Byrne in these proceedings.

16 The point that I have reached in my consideration of these matters is this – even if I were to accept, in their entirety, Mr Byrne’s objections to the increase in the valuation of 1 Burbong Street from sale date to base date, discounting that increase, the deduced comparable value for the site would still be of the order of $1,150,000. That is a 10 percent or thereabouts reduction in the deduced value that Mr Prince contends for.

17 If I were further to disregard the adjustments for size and views for which Mr Prince contends and apply a further 10 percent reduction to his deduced value, I arrive at the sum of approximately $1,040,000. If I were to approximately double, which I have difficulty in doing from what I observed on the site, the deduction that would be required for the size of the dwelling on 1 Burbong Street, I still come to approximately $750,000.

18 This still does not come close to the revised value which Mr Byrne asks me to adopt.

19 However, I am not satisfied that it would be appropriate to make those three deductions from the deduced values that Mr Prince has derived. Mr Prince has followed long accepted valuation methodology and there is no reason for me to depart from this approach. I am satisfied that I should accept his professional opinion as to the movements of the market during that period. I am satisfied that I should accept his evidence as to measurement of the house.

20 Even if as a consequence of accepting those two elements I were to disregard entirely the adjustments that he proposes for views and land size, purely for the sake of the argument, it still would not disturb the adjusted statutory value for which the respondent contends in these proceedings.

21 I note in reaching this conclusion that, although Mr Prince’s report provided a deduced range of vacant land valuation as required by Section 6A of the Act (as at the base date) of between $1,270,000 and $1,300,000, the respondent does not contend for an increase in the already adjusted statutory valuation of $1,050,000.

22 As a result, I conclude that the orders of the Court should be that:

1. The appeal is dismissed;
2. Pursuant to s 40(1)(a) of the Valuation of Land Act 1916, the valuation of the property known as 34 Gloucester Street Nelson Bay, being Lots 1 and 2 in Strata Plan 43037, is confirmed as $1,050,000; and
3. The exhibits are returned.

Tim Moore
Commissioner of the Court