Kierath v Valuer-General

[2008] NSWLEC 1524

Land and Environment Court

of New South Wales

CITATION:	Kierath v Valuer-General [2008] NSWLEC 1524
PARTIES:	APPLICANT William Kierath RESPONDENT Valuer-General
FILE NUMBER(S):	30693 of 2008
CORAM:	Moore C
KEY ISSUES:	Valuation of Land :- Appeal against statutory valuation
LEGISLATION CITED:	Valuation of Land Act 1916
DATES OF HEARING:	1 December 2008
EX TEMPORE JUDGMENT DATE:	1 December 2008
LEGAL REPRESENTATIVES:	APPLICANT In person RESPONDENT Mr G Newport, barrister INSTRUCTED BY NSW Crown Solicitor

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

MOORE C

1 December 2008

30693 of 2008 William Kierath v Valuer-General

JUDGMENT

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

1 COMMISSIONER: On 29 October last, I conducted a conciliation conference pursuant to s 34(3) of the Land and Environment Court Act 1979 between the applicant and the respondent in these proceedings. At the conclusion of that conciliation conference, no agreement was able to be reached between the parties and I terminated the proceedings. At that point the parties asked me to proceed pursuant to s 34(4) of the Act to hear and determine the matter. In response to that invitation, being an invitation I am unable to refuse by the terms of the statute, I indicated to the parties that I considered that it would be necessary to undertake an inspection of the property and of the comparable sales prayed in aid by the Valuer-General.

2 The hearing today has taken place in Bathurst and commenced this morning with an inspection of Mr Kierath’s property, followed by inspections of a number of other properties, both set out in a schedule that formed part of the Statement of Basic Facts in the proceedings. We also inspected a number of other properties in Kelso, on the eastern side of the Macquarie River. During the course of those latter inspections I indicated:

first I was not prepared to inspect an additional property of which Mr Kierath had been given no notice; and

second, with respect to the property suggested to Mr Kierath and the other property suggested by the Valuer-General in Church Lane at Kelso as being possibly relevant in the proceedings, I indicated that I could not be satisfied that there was any dwelling entitlement attaching to those properties as they were clearly within the flood plain of the Macquarie River and the position was that only properties that had existing dwellings would be permitted to re-erect or renovate dwellings. As a consequence, I declined to consider those properties.

3 Two further properties were inspected in a rural residential estate of about half hectare allotments off Boundary Road at Robin Hill but, quite properly, Mr Toyer, the expert valuer giving evidence for the Valuer-General, agreed during the course of his evidence that he did not rely on those properties.

4 The consequence of that is that I am left with three valuations that I need to consider together with the terms of Mr Kierath’s letter of objection. The three properties that I am left to consider are:

• Mr Kierath’s property at 23 Ethelton Avenue, South Bathurst;
• the property at 39 McLennan Close, Robin Hill; and
• the property at 3a Delaware Crescent, Robin Hill.

5 I interpose that there are two possible bases upon which I could disturb the valuation of Mr Kierath’s property. The first is if I were to conclude that the adjustments of the comparable sales made by Mr Toyer were inappropriate and insufficient or, second, if I were to be satisfied that an adjustment should be made to the value of Mr Kierath’s property on the basis of any one or any combination of the 17 matters that he raised in his letter of objection dated 22 February 2008.

6 I will shortly set out the terms of those points of objection, however, I note before I do so that Mr Toyer indicated, during the course of his evidence, that he did not consider it appropriate to make any adjustment to the value of Mr Kierath’s property for any one or any combination of those objections.

7 Before setting out the items of objection, I should note the basis of valuation undertaken by Mr Toyer. Mr Toyer has considered the comparable sales, the two of them, and, in order to adjust them by about 50% in one case and by a little over 30% in the other to reach a comparability per square metre rate for Mr Kierath’s property, Mr Toyer has adopted a process of global adjustment based on the adjustment factors that he has described for each of the two properties in his analysis of them. That is one of the bases of valuation which is long accepted by judicial authority as appropriate to be undertaken by an expert valuer such as Mr Toyer who has 24 years experience undertaking property valuations in the Bathurst district.

8 Although Mr Kierath asks me to set aside that method of valuation as not being intellectually satisfactory and that I should prefer to assume that there should be a quantifiable adjustment for each of the elements, for example of size, location, services and amenities that are the broad categories in which Mr Toyer has set his adjustment factors, I would be committing an appealable error if I were to do so. Whilst there is judicial authority that says that a table of adjustment factors is an appropriate basis upon which a court can consider an appeal against a valuation or any other valuation proceedings, there is also judicial authority that says it is appropriate for an experience and expert valuer to undertake a global adjustment process as has been undertaken by Mr Toyer.

9 I now turn to the bases of objection raised by Mr Kierath. There are 17 of them. They are as follows:

1. proximity of the property to the Bathurst garbage depot;
2. proximity of the property to the main western railway line;
3. access to Vale Road is by way of a dangerous railway level crossing;
4. the property is low level and flood prone and has storm channels running through it;
5. subjectivity of the land to severe frosts and fogs;
6. the absence of Bathurst City Council services;
7. the land’s location within the 50 decibel sound contour line surrounding Mount Panorama within which development is restricted;
8. the recent proposal by Bathurst City Council to rezone part of the surrounding area to Industrial;
9. proximity of the property to the Bathurst sale yards;
10. proximity of the property to the Devro effluent treatment works;
11. the poor quality of the gravel road access to the property;
12. absence of pleasant view or outlook;
13. absence of public amenities, ie postal delivery, public transport;
14. the probability that the property’s groundwater will become contaminated by the retention ponds constructed during the redevelopment of the Bathurst garbage depot;
15. proximity to the contaminated sites on existing and previous Australian Defence Force land which has been decontaminated to an indeterminate extent;
16. inability to obtain an adequate internet connection due to the location of the property;
17. inability to connect the property to mains gas due to its location.

10 Most of those matters are matters of fact capable of being either reasonably assumed in light of the discussion which took place in the course of the site inspection of the other properties or ones which were obvious from the inspection when it was undertaken.

11 However, there are two of them that are not in my view. They are (14, the probability that the property’s groundwater will become contaminated by the retention ponds constructed during the redevelopment of the Bathurst garbage depot and (15) the proximity to the contaminated sites on existing and previous Australian Defence Force land which has been decontaminated to an indeterminate extent.

12 I have no expert evidence about either of those propositions and without having access to such expert evidence on either of those, given the onus lies on the applicant pursuant to s 40(2) of the Valuation of Land Act 1916, it is not appropriate for me to consider or hypothesise about any impact of either of those two points of objection.

13 In June 2008, Mr Toyer provided a report, dated 20 May 2008, and that report was provided by the Department of Lands to Mr Kierath under covering letter of 3 June 2008 in which Mr Toyer made a recommendation that the value of the land be confirmed.

14 In the present proceedings, Mr Toyer has provided a further comparative assessment in which he has done an adjustment of the McLennan Close and Delaware Crescent properties compared to Mr Kierath’s property. He has also undertaken an assessment of what he considers is the appropriate statutory valuation as at the 2007 base date compared to the valuation proposed by the Valuer-General for that date.

15 The Valuer-General’s valuation at the 2007 base date was $132,000. Mr Kierath contends that that should be $80,000. It is Mr Toyer’s expert evidence that the appropriate adjusted land value as at 1 July 2007 for the property would be $164,000 (although I note that Mr Newport, counsel for the Valuer-General, does not press an upward adjustment in the valuation as would otherwise be the right of the Valuer General to seek in these proceedings).

16 However, given that Mr Toyer’s is the only expert evidence concerning comparable sales and their adjustments, I am obliged, I consider, to accept his valuation of $164,000 as the starting point for my consideration of the adequacy or otherwise of Mr Kierath’s objection.

17 I am satisfied that there are a number of matters contained in Mr Kierath’s 17 points of objection for which Mr Toyer has made no allowance and for which it would have been appropriate for him to have made such an allowance. The first of those relates to (4) – the potential interruptions of access because of water flow across the driveway. During the course of the site inspection we inspected the driveway, the two culverts and were able to see the drainage line coming down from the hills to the south west of the property. I am satisfied as a consequence that there is some degree of affectation as a consequence of flooding potential.

18 On the other hand, it was Mr Kierath’s evidence that he had lived at the property since the early 1980s and during that 25 plus year period had only been prevented from leaving or entering his property by flooding on three occasions. I am therefore satisfied that:

whilst there should be some allowance made for flooding and the possibility that further land improvement works as envisaged by the Act might be necessary to rectify it, thus having an impact on the valuation; however

such impact is minor.

19 I am also satisfied that (7), the inclusion of the site within the 50 decibel noise contour line surrounding the Mount Panorama vehicle race circuit – contra to the position where the property in Delaware Crescent is clearly not within that noise contour from the terms of an extract from the Local Environmental Plan’s maps and that it is unlikely that the property in McLennan Close is so affected. Indeed Mr Newport does not press that I should hold that there would be any affection to these two properties. As a consequence, I am satisfied that there would be some element of deduction from the value as a result of the fact that if the land were to be treated as vacant but with an entitlement to rebuild, there would be some necessity for an increased standard of building to meet. Mr Newport has properly conceded that was likely to be the case in the absence of any Bathurst City Council controls in either the LEP or the relevant Development Control Plan referring to such a possibility.

20 I am not satisfied, from the basis of the inspection and any of the other matters that were put during the course of Mr Toyers’ evidence (either formally in court or informally during the course of the side inspections), there is anything that would warrant a downward adjustment to Mr Keirath’s objection.

21 I have undertaken some calculations as to what would be necessary to achieve a disturbance at all of the Valuer General’s expert valuation (now put but not pressed to be adopted for the purposes of a revised valuation) of $164,000. To reduce that figure by the $32,000 necessary to bring it back to the statutory valuation which is the subject of the appeal would require an adjustment of 16.59%. To bring it back from that figure to the figure for which Mr Kierath contends ($80,000), it would be necessary to undertake an adjustment of 51.21%. Put simply, as Mr Toyer’s statement evidences, the value per square metre of Mr Kierath’s property at $164,000 is $8.50. The value at $132,000 is $6.85 per square metre and at $80,000 it is $4.15 per square metre.

22 Had Mr Toyer’s valuation, in his recent report, simply been based on a confirmation that $132,000 was the appropriate - not merely statutory valuation at the base date, but the current, appropriate valuation considered in light of the comparable sales when adjusted back to the base date and adjusted for the other factors, I would have been minded to make a modest adjustment to Mr Kierath’s statutory valuation. However, that is not the position. For me to even take a single dollar off the Valuer-General’s statutory valuation, I would be obliged to adopt an adjustment for the two minor factors to which I have referred of in excess of $32,000. I am satisfied that there is no conceivably proper basis on any valuation theory where I could do so.

23 The consequence of that is that although Mr Kierath has succeeded in demonstrating to me that, in my opinion, there were two adjustment factors that ought to have been taken in to account as causing minor adjustments to the valuation of his property, I am not satisfied that he has discharged the onus to demonstrate that that resulting disturbance of $164,000 could conceivably take the valuation below $132,000. Therefore, the orders of the Court are that the valuation of the Valuer-General is confirmed and the appeal against the statutory value is dismissed.

Tim Moore
Commissioner of the Court