Re Timbs and Secretary, Department of Family and Community Services
[2004] AATA 796
•30 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 796
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/873
GENERAL ADMINISTRATIVE DIVISION ) Re MERVYN WILLIAM TIMBS
PATRICIA ANNE ARGLESApplicants
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr R G Kenny, Member Date30 July 2004
PlaceBrisbane
Decision The Tribunal:
(a) determines that the valuation of the block of freehold land at Lot 1 Pacific Highway East via Brunswick Heads, New South Wales (Lot 1 DP:536396 in the Local Government area of Byron) is $215,000; and
(b) affirms the decisions under review.
............[Sgd].............
R G Kenny
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – eligibility - asset test – valuation of land – negative aspects of property taken into account in the valuation prepared by Australian Valuation Office – positive aspects also considered in valuer’s report – report of AVO valuer preferred – decision affirmed but value of property varied to take into account concessions made by AVO valuer regarding removal costs of old sheds on the property
Social Security Act 1991 ss 55, 771HF, 1064
Spence v The Commonwealth of Australia [1907] 5 CLR 418
Commissioner of Succession Duties (SA) v The Executor, Trustee and Agency Company of South Australia Limited (1947) 74 CLR 358
REASONS FOR DECISION
30 July 2004 Mr R G Kenny, Member Background
1. From 1996, Mervyn Timbs was in receipt of age pension and his partner, Patricia Argles, was in receipt of partner allowance. These are income support payments made in accordance with the terms of the Social Security Act 1991 (the Act). On 15 April 2003, a Centrelink delegate on behalf of the Secretary, Department of Family and Community Services (the respondent) determined that Mr Timbs’ age pension should be reduced and that Ms Argles’ partner allowance be cancelled and, in each case, this was based upon an assessment by the delegate of the value of the assets owned by Mr Timbs and Ms Argles. In particular, the delegate’s decision was based upon an assessment of the valuation of a block of free-hold land owned by Mr Timbs being Lot 1 DP:536396 in the local government area of Byron and located at Lot 1 Pacific Highway East, via Brunswick Heads, New South Wales (hereafter referred to as the property). The valuation ascribed to the property by the delegate was $235,000. The delegate’s decision was affirmed by an authorised review officer on 9 July 2003 and, in turn, by the Social Security Appeals Tribunal (the SSAT) on 16 September 2003. The applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal) on 13 October 2003.
2. At the hearing, the applicants were represented by Mr J Priestly of Counsel and the respondent was represented by Ms H Wallis-Dunn. The following material was taken into evidence:
§Exhibit 1: documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents – T1-T45);
§Exhibit 2: a statement, dated 24 May 2004, by Steve Greenhalgh, Valuer with the Australian Valuation Office; and
§Exhibits 3-4: copies of maps of the area around the property.
Issues for Consideration
3. The only issue for determination in this matter is the value of the property which is described above. It is not disputed that, apart from the property, the value of the combined assets of Mr Timbs and Ms Argles is $11,100. It is also not disputed that the relevant date for determining the valuation of the property is 15 April 2003 when the initial decision of the delegate was made.
4. The decision in respect of Mr Timbs’ age pension was made in accordance with section 55 of the Act which requires the pension rate calculator incorporated in section 1064 of the Act to be applied in determining the level of his pension. This calculation process requires a reference to both income and asset levels and it is not disputed that calculations were correctly made except that the applicant disputes the valuation attributed to Mr Timbs’ property. In respect of Ms Argles’ partner allowance, section 771 HF of the Act precludes payment of the allowance if the asset level of Mr Timbs and Ms Argles exceeds the relevant assets value limit and, in this case, it is not disputed that, as at the date of the initial decision, this was, for Ms Argles, $103,250. In her case, the delegate determined that the combined value of the assets of Mr Timbs and Ms Argles was $235,000 for the property and $11,100 for other assets amounting to a total of $246,100. When 50% of this was attributed to Ms Argles, the resulting amount of $123,050 exceeded the asset limit of $103,250 thereby, in the respondent’s decision, precluding her from receiving the partner allowance in accordance with section 771 HF of the Act.
Applicant’s Case
5. Mr Priestly submitted that the value of the property was $190,000. He relied upon a valuation report prepared by Owen Allsopp, Director of Ennew Allsopp Pty Ltd, Valuer and Property Adviser in Lismore. He submitted that the report of Mr Allsopp correctly assessed the negative features of the property which comprised susceptibility to flooding, difficulties with access, absence of potential for subdivision of the 2.255ha which it comprised, lack of boundary fencing, the run-down nature of two residences on the property, the presence of asbestos sheeting and termite and white ant infestation in the residences, the uncertain nature of the status of the buildings on the property in respect of whether or not they complied with local government requirements, the presence of old poultry sheds which required removal and the level of highway noise from the adjacent Pacific Highway. Mr Priestly submitted that the report of Mr Allsopp correctly took into account these factors.
6. Mr Priestly also referred to another report completed by Peter Browning of LJ Hooker from Brunswick Heads. In that report, dated 8 May 2003, the valuation of the property was given as being between $170,000 and $190,000.
7. Mr Priestly was critical of the report provided by Steve Greenhalgh from the Australian Valuation Office. He submitted that there were many inconsistencies in that report which made it unreliable and he submitted that Mr Greenhalgh had not taken into account the full extent of the negative features of the property.
Respondent’s Case
8. Ms Wallis-Dunn submitted that reliance should be placed upon the report prepared by the Australian Valuation Office. She submitted that, in that report, Mr Greenhalgh had taken into account the negative features referred to by Mr Priestly but had balanced that against the positive features of the property. She referred to an adjustment to the initial valuation of $235,000 made by Mr Greenhalgh in his letter of 24 May 2004 (Exhibit 2). There, she noted that Mr Greenhalgh had revised the valuation to $215,000 because of an allowance of $20,000 which he considered could be made for costs of removal of the derelict poultry sheds on the property. She submitted that the revised valuation should be $215,000 and that this was sufficient to reduce Mr Timbs’ age pension and to preclude payment of Ms Argles’ partner allowance.
Consideration
9. In this case, there is evidence from three separate valuers. Mr Greenhalgh and Mr Allsopp each provided detailed reports and gave evidence at the hearing. Mr Browning was not called to give evidence. In his report, Mr Browning said that he asked the opinion of “a couple of buyers” that he had sold land to in the area in respect of what they would pay for it and he said that the response was in the range of $120,000 to $140,000. He then said that a more appropriate market value would be in the order of $170,000 to $190,000. Mr Browning referred to the “current market” as guiding him in that elevated estimation but no further information was provided as to how it was arrived at. That unreasoned and brief report provided no real assistance to the Tribunal.
10.Mr Allsopp’s report included the following:
“THE LAND
…
Effect:
The site has two houses constructed on it. Council cannot confirm, verbally, if the property has a building entitlement and if the buildings have Council consent or if they enjoy existing use status.
Location/
Neighbourhood:
Situated with close proximity to Brunswick Heads with a proposed right of way access through the tree swampy land in a “forested environment”.
Site/Views/
Topography:
The site is low lying and is subject to flooding. Drainage is poor and the soils are sandy in nature. The property enjoys a “bush” environment but there are no particular views. The site is impacted by noise from the motorway.
Services:
Electricity, town water, septic, 2 x telephone, rough gravel access.
Environmental Hazards:
1. Flood: The entire site floods with access to the property being cut off for long periods of time on infrequent occasions due to flooding. The owner advises he has never seen water inside the main area of the house but the bathroom/ toilet/laundry/verandah areas are on ground and water enters. We caution that a flood report would be required to provide definitive advice as we believe water is likely to enter both houses in a 1:100 year flood event (an experience yet to be seen by the current owner).
2. Bushfire: Council advises the land is in a medium bushfire risk locality.
3. Acid Sulphate soils.
4. Buildings on the site have been constructed with materials likely to be asbestos based. Removal of this material requires use of specialised professional (licensed) operators.
5. Noise from the nearby Pacific Highway.
6. Prior agricultural uses of the site may have involved the use of chemicals, oils, and/or distillate. These have the effect of being potentially contaminating.
MAIN BUILDING (Occupied by B Timbs)
Style and Street Appeal:
Single storey detached of average/fair appeal.
Built About:
C: 1940’s
Additions About:
Progressive renovations by tenant.
Main Walls and Roof:
Fibrous cement/Galvanised Steel
Windows:
Timber
Flooring:
Timber
Interior linings
Fibrous cement and timber
Accommodation:
3 bedrooms, living/dining/kitchen, bathroom, laundry, toilet, enclosed verandah.
Approximate Areas:
Living: 117.2 m2.
P.C. Fixtures:
Stainless steel sink, gas stove, stainless steel laundry tub, bath, vanity, solar hot-water service.
Inclusions:
Fixed floor and window coverings and light fittings.
Features:
Nil
Building Condition:
The property appears to have structural defects with the building appearing not to meet building standards (owned by tenant).
Car Accommodation:
Property of tenant
Repairs/Requirements:
Major repair items required include: reblocking, leaks to roof, rotting timbers (internal/external), prior white ant activity has compromised the structural integrity of the house.
ancillary improvements
Second dwelling (occupied by Mrs Moore): Construction: Fibro cement/Galvanised Steel roof. Accommodation: 2 bedrooms, study, kitchen, laundry, meals, living, bathroom, toilet. Conditions: The house bodily needs reblocking and its structural integrity is in doubt.
Miscellaneous: sheds of $Nil value
SALES EVIDENCE
Property
Date
Price
Comments
Lot 285 New Brighton Road, New Brighton
Lot 285 DP: 755687
Area: 8.09ha23/1/01 $120,000 *Small studio (part built)
*Flood affected
*No building entitlement but approved for a studio
*Comparison: Older sale, subject has inferior land location, but superior structuresLot 221 Pacific Highway, Myocum Lot 221 DP: 755692
Area: 5.16ha28/11/02 $100,000 **Flood affected
**No building entitlementComparison: Far superior site and improvements. The subject property is far inferior.
COMMENTS
This property has the following marketing difficulties:
(a) Environmental issues – refer earlier in this report. These are quite significant and impacts heavily on this property.
(b) There are occupiers in the houses who are not paying rent. I do not know the legal status of their occupations nor the difficulty to obtain vacant possession if the property were to be sold. This is a major disincentive to any buyer ie no rental income and the possibility of not being able to obtain vacant possession readily.
(c) One of the occupier’s owns the garage/workshop on the land. That occupier also owns the kitchen cupboards, electric stove, floor coverings, etc within the house. Thus, any sale of the property would see the tenant removing or wanting to be paid for these improvements.
(d) The septic tanks on the property are likely not to comply with Council requirements.
(e) The legal status of the houses are in question but I believe they are likely to enjoy ‘existing use’ status. This issue is in question and needs clarification. The current position is in doubt and therefore the value of the property is affected without formal advice.
(f) The access to the property is in question as the Right of Way is identified as being ‘proposed’. This is a caution to any buyer and legal advice is required to determine its legal status. Without access the value written may be too high. Our valuation assumes access but any buyer would be on notice that there is a possible ‘issue’.
(g) The houses are in poor order and are unlikely to meet with building standards. For definite advice a building inspection report and a pest inspection report is required.
(h) Poor ‘bridge’, may need replacement (see photo).”
11. In his evidence, Mr Allsopp said he inspected the property on 27 August 2003 and he gave his overall market value as at that date at $190,000.
12. In relation to the sales of comparable properties, he said that the first of these, relating to Lot 285DP:755687, was not a sale on the open market pursuant to normal trading activities but an acquisition of land by the Roads and Traffic Authority of New South Wales for environmental purposes. In his submission, Mr Priestly conceded that this was not a reliable guide to market value.
13. Mr Greenhalgh inspected the property in 1996. At that time, he initially attributed to it a value of $140,000 based upon a road-side inspection but reduced this to $120,000 after an on-site inspection. On 14 April 2003, a further road-side inspection caused him to estimate the value of the property at $325,000 but, on 5 May 2003, he conducted an on-site inspection and this formed the basis of his report in which he assessed it at $235,000. In his evidence, he said that, for both the 1996 and 2003 inspections, the lower valuations resulted from his better understanding of the negative aspects of the property which were only able to be ascertained from an on-site inspection. In his report, he noted that the property was unlikely to have any potential for subdivision in the foreseeable future and he continued:
“DESCRIPTION OF LAND:
Location:
The property is located approximately 3 kilometres south of Brunswick Heads and 16 kilometres north of Byron Bay. Brunswick Heads offers basic shopping facilities, supermarket, primary school and beach and river facilities. Byron Bay has a very high local and international tourist profile and it offers a broad range of shopping, entertainment facilities and schooling and it is keenly sought after. Regional shopping facilities are available at Ballina approximately 40 kilometres south and Tweed Heads approximately 40 kilometres north.
The property is close to the Pacific Highway and this provides easy access to regional centres, employment and airports at Coolangatta and Ballina.
Access to the property is currently very good but this access is only available by a ‘gentleman’s agreement’ that could be terminated at any time subject to the adjoining landowners discretion.
Legal access to the property is via a gravel track that is satisfactory for a two-wheel drive vehicle but requires some upgrading. Part of this track includes a bridge that is in poor order but is still trafficable. The legal access to the property is prone to flooding.
Services:
All usual rural services are currently available including electricity, telephone, school bus service and mail deliveries. Town water is currently available to the property via the adjoining property and this is considered to be a major benefit for many potential purchasers.
Site:
The allotment is gently sloping rising from the western boundary to an elevated area around the dwellings. Approximately 50% of the site is low lying. It is mostly cleared with a reasonable cleared area adjacent to the dwellings falling to scattered native bushland and ti tree. Surrounding development includes the Bayside residential estate, native bushland, pastured land and another rural home.
The site is prone to flooding. Checks at Byron Council indicated that approximately 85% of the property is prone to flooding. Discussions with Mr Timbs indicated that during large floods the access to the property is blocked and most of the property is underwater with the exception of the small high cleared area adjacent to the houses. In extremely large floods on very rare occasions floodwater has come under the house. Also, the second house has had approximately 4 cm of water on the laundry floor. Floodwaters are understood to be over two metres in parts of the property.
Property Use:
The property is currently used as a rural homesites and there are two old dwellings on the site. I was advised that the applicant’s son occupies the main house and an elderly lady occupies the second house rent-free.
IMPROVEMENTS
Type of Improvements: house
Construction
Roof
Age
Area
Asbestos cement/ weatherboard
Galvanised iron
59 years
110 sq m approx
Description:
Main House
A very basic old cottage that was constructed with second hand materials in 1944. It has been added to and upgraded since but much of the house is understood to be original. It comprises 2 bedrooms plus sleep out and living areas. It appears in poor/fair order and has previously had problems with termites.
Mr Timbs indicated that the house has been painted and restumped by his son at his son’s expense. Also, his son has provided a solar hot water system, has landscaped the property, and constructed a carport. The value of these improvements has been excluded from the valuation.
Second House
Weatherboard/asbestos cement/hardiplank/galvanised iron. Constructed in 1944 and originally 1 bedroom and kitchen with subsequent additions. The house appears very basic and in poor order. Mr Timbs advised me that the tenant advised him that there were 14 leaks in the property.
Other improvements include a carport, fencing, limited landscaping and paths.
Sheds
Sundry old chicken sheds constructed of timber/galvanised iron. They are currently partly used as a carport, but they are in poor order and tend to detract from the appearance of the property.”
14. In the report, Mr Greenhalgh noted the following concerns which were raised by Mr Timbs in relation to the property:
“1.The lot is unsuitable for agricultural production
2.The land and access are prone to flooding
3.Access to the property is poor across an old bridge
4.There is considerable highway noise from the Pacific Highway
5.The houses are in very poor condition and have been affected by termites in parts
6.The second house leaks and the tenant reported that 14 buckets were required after recent rains
7.Access to the second house encroaches on the adjoining property
8.The yard space of the second house encroaches on the adjoining property
9.The old chicken sheds require removal and this would be expensive
10.If the old houses were to be removed they contain asbestos cement and this would be expensive to demolish and the waste materials would be expensive to dispose of.”
15. Mr Greenhalgh commented that his initial valuation of the property at $325,000 had been reduced considerably because of the condition of the houses and he made the following responses to the expressions of concern by Mr Timbs.
“1.The land would most likely be purchased as a private rural home site/lifestyle property and not for any form of agricultural production.
2.The flooding problems have been considered in the valuation assessment and comparable sales that are similarly prone to flooding have been used as a basis for comparison.
3.The bridge is in poor condition and this has been considered. It is nevertheless trafficable in a 2-wheel drive vehicle and is only rarely used due to the ‘gentleman’s agreement’ providing an alternative access.
4.The noise from the Pacific Highway has been considered and the comparable sales are similarly affected by traffic noise.
5.The poor condition of the homes has been considered in the valuation assessment and the values have been discounted considerably accordingly.
6.The leaks in the second house could be repaired and part of the roof replaced if required. The poor condition of the roof has been considered.
7.Access to the second house could be re-routed around the eastern side of the main house if required and this is considered to be minor and overstated. The encroachment has been in existence for many years and it is unlikely to become a major concern in the foreseeable future.
8.The encroachment of the rear yard of the second house is considered to be relatively minor. Whilst legally this could result in relocation of the boundary fence, the encroachment has been in existence for many years it is unlikely to become a major concern in the foreseeable future.
9.The old chicken sheds could be demolished by suitable machinery quite easily and it is considered this problem has been overstated.
10.The old houses have been in existence for many years and it is unlikely that they would be demolished in the immediate future.”
16. Mr Greenhalgh commented in his report that, if the houses on the property were demolished, it was likely that there would be a building entitlement for only one residence and that the property had been valued on that basis. He also pointed out the following beneficial features of the property:
§“It is only 3 kilometres to Brunswick Heads facilities including schools, shops and restaurants. There are few rural properties this close to Brunswick Heads.
§It is only approximately 4 kilometres drive from the coast and Brunswick River.
§It has easy access to Byron Bay, which is a high demand area.
§It is close to the upgraded Pacific Highway, which has resulted in substantially reduced commuting times to Tweed Heads and The Gold Coast.
§There are two houses on the property. They could be upgraded, with the main house being occupied with a second house providing rental income.
§The property is in a relatively low price bracket and there is a shortage of lower priced properties on the market. The price would appeal to many prospective purchasers.
§The market is reasonably strong at the moment with prevailing good demand.”
17.Mr Greenhalgh made the following general comment:
“Market values have increased dramatically in the Brunswick Heads area in recent years. This is partly due to the new Yelgun to Chinderah motorway making the area much more accessible to large population bases on The Gold Coast and Brisbane, and this has substantially increased demand in the area. Also, as Byron Bay has grown and become increasingly expensive, many purchasers have moved to nearby areas and this has increased demand and prices in the Brunswick Heads area. The previous valuation was $120,000 in 1997 and it is generally accepted that values in this area have doubled since 1997.”
18. In his report, Mr Greenhalgh referred to the sales of other properties in the area. The first that he noted was Lot 221DP:755692 which was also noted by Mr Allsopp in his report. In relation to that property, Mr Greenhalgh made the following comment:
“Sale 1 should be considered with extreme caution because it is not a good indication of the general market. Although it is virtually all flood prone, affected by traffic noise and is the closest sale to the subject property, it is unlikely to have a Building Entitlement (a purchaser could not build a house on the property). Consequently, the value of the site is drastically discounted and the site is grossly inferior to the subject property.”
19.He listed the following additional three properties:
“2. ADDRESS: 110 Mullumbimby Road, Mullumbimby
REAL PROPERTY: Lot 1 DP632771
DESCRIPTION: Area: 4 ha
SALE PRICE: $310,000
DATE OF CONTRACT: 31 October 2002
COMMENTS: Basic old WB/G1 unrenovated farmhouse with little character and limited ground improvements. Westerly aspect. Centrally located moderately steep and stony site. Part overgrown. Some traffic noise. Elevated home site with views.
Overall – subject inferior to sale, but in better location closer to facilities and the coast.
3. ADDRESS: 11 Myocum Downs Drive, Myocum
REAL PROPERTY: Lot 2 DP1048942
DESCRIPTION: Area: 2.332 ha
SALE PRICE: $260,000
DATE OF CONTRACT: January 2003COMMENTS: Elevated home site falling to flood prone land at rear. House site adjacent to busy road and considerable traffic noise. (339-metre frontage to busy road). Numerous power line easements.
Overall superior lot in inferior location.
4. ADDRESS: Pacific Highway, Brunswick Heads
REAL PROPERTY: Lot 1 DP250517
DESCRIPTION: Area: 7.6ha
SALE PRICE: $160,000
DATE OF CONTRACT: 15 November 2001
COMMENTS: Vacant land. Not fenced. Mostly low lying and flood prone with a small elevated area suitable for home site. Considerable traffic noise. Mostly overgrown. The market has increased considerably after sale.
Overall – subject site inferior to sale but subject is in superior location.”
20. Mr Greenhalgh provided the following comments in respect of each of those three properties:
“Sale 2 is an old original home with little appeal but it is in better condition than the subject houses. It is adjacent to the main access road to Mullumbimby and receives considerable traffic noise. It is an inferior locality more removed from the coast, restaurants and facilities.
Sale 3 is a recent sale of a vacant allotment that is affected by flooding, considerable traffic noise and numerous electricity easements for overhead power lines. It is a superior lot but is in an inferior location more removed from the coast, restaurants and facilities.
Sale 4 is vacant land that is mostly all flood prone, with a small elevated area at the rear for a home site. It is affected by considerable traffic noise being at the intersection of the Old Pacific Highway and the main access road into Mullumbimby. It is in an inferior location more removed from the coast and facilities. The market has increased considerably after the sale.”
21.Mr Greenhalgh also made the following observation in his report:
“Two other sales in the area were noted although further enquiries revealed they were not open market transactions and they had low sales prices. Consequently they do not provide evidence of market value and they should be disregarded if they are presented as evidence. These sales are Larter to Wilkes at the Pocket Road, Billinudgel $160,000 4/2002 (Inter family transaction). Also, Wicce-Otter to Derighetti at Pacific Highway, Tyagarah for $250,000, January 2002 (not listed on the open market and sale below market value).”
22. The Act provides no guidance on the way in which valuations are to be carried out or in which respective valuations are to be compared. In Spence v The Commonwealth of Australia [1907] 5 CLR 418, Griffith CJ made reference to the valuation process in the following way:
“In my judgment the test of value of land is to be determined, not by enquiring what price a man desiring to sell could actually have obtained for it on a given day, ie whether there was in fact on that day a willing buyer, but by enquiring ‘what would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’” (at 432)
23. Mr Priestly made reference to the judgment of Dixon J in Commissioner of Succession Duties (SA) v The Executor, Trustee and Agency Company of South Australia Limited (1947) 74 CLR 358 at 373 where a distinction is drawn between the differences in purpose of valuing property for revenue cases as opposed to compensation cases. His Honour said:
“In the second, the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax.”
24. I do not understand the categories of valuation to have been exhaustively stated in that case and the process of valuation in this case cannot readily be quantified as one which falls into either of the categories referred to by His Honour. Rather, it was conducted for the purposes of giving effect to social security law and, while it is the case that this legislation is to be the subject of beneficial interpretation, the decision in respect of the valuation of the land must still be based on the evidence of market value. I am satisfied that, in this case, this is best provided by the evidence of Mr Greenhalgh.
25. Mr Greenhalgh was subjected to extensive cross-examination by Mr Priestly in relation to his report and he conceded that there were certain matters that were not specifically referred to therein. These included the cost of erecting a boundary fence and repairing the bridge which provides legal access to the property and the fact that there were costs associated with repairs to the building such as the roofs of the residences. However, he said that he had taken these factors into account when exercising his judgment as to what the overall valuation of the property was. He said that he was aware of the proximity of the Pacific Highway but said that this was more than 400 metres from the property and that, whilst there was associated noise, it also provided access to the facilities and places around the property. Mr Greenhalgh also conceded that some of the negative features of the property may mean that a financial institution would be reluctant to lend monies to a potential purchaser but, again, he said that this had been taken into account in his overall valuation. In relation to the presence of asbestos sheeting in the residences on the property, Mr Greenhalgh conceded that there would be additional costs in disposing of this product because of health and environmental concerns but, again, said that this was factored into his overall analysis and that he had valued the main house on the block as a “shell” at only $35,000 and the second residence at $20,000. He conceded that he had not been inside the houses and that this was the reason why he assessed them only as “shells” without regard to their improved interiors. Despite the extensive nature of the cross-examination of Mr Greenhalgh, he maintained that the valuation of $215,000 that he made, which included the allowance of a $20,000 for the removal of the poultry sheds, was one which was at the lower limit of what could be expected for the sale of the property.
26. I am satisfied that the report and the evidence Mr Greenhalgh provide a more balanced appraisal than that of Mr Allsopp particularly in his analysis of the balance between the negative aspects of the property and those which would make it attractive to a potential purchaser. Whilst he has varied his initial assessments of valuation, both in 1996 and in 2003, this is a reflection of the nature of the inspections he undertook. In each of those years, the second inspection which took place was far more detailed than the first assessment based on a road-side inspection. The amendments do not reveal an inconsistency in his methodology. Further, I am satisfied that the most recent adjustment that Mr Greenhalgh made by making an allowance of $20,000 for the removal of the poultry sheds does not reflect inconsistency in his report but, rather, a willingness to make a reasonable adjustment to his overall valuation in favour of the applicants.
27. In respect of sales of other properties, I have noted that, of the two referred to by Mr Allsopp, the first was not in relation to a sale through ordinary market forces and I have noted the concession of Mr Priestly that it is not particularly instructive in this case. I have also noted that that sale took place more than two years before the relevant date of valuation in this case. The only other sale referred to by Mr Allsopp was in respect of Lot 221DP:755692. Mr Priestly submitted that it was significant that this sale had also been relied upon by Mr Greenhalgh in his report. However, the evidence of Mr Greenhalgh was that, whilst he included it, he did so because there were few such sales and I accept Mr Greenhalgh’s comments about the relative merits of the two properties.
28. The property of Mr Timbs has a range of negative features which are outlined above in the reports of Mr Greenhalgh and Mr Allsopp. It also has a range of positive features and I accept the evidence of Mr Greenhalgh in relation to these and am satisfied that the valuation that he has provided of $215,000 is appropriate for the property as at 15 April 2003.
Decision
29. The decision of the SSAT was based upon the unamended valuation of the property in the amount of $235,000. Since then, the respondent has conceded that the valuation should be $215,000. I am satisfied that this is the appropriate valuation for the property at the relevant time.
I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member
Signed: S Oliver
Associate
Date of Hearing 24 June 2004 at Lismore
Date of Decision 30 July 2004Counsel for the Applicant Mr J Priestly
Solicitor for the Applicant Trenches Solicitors
For the Respondent Ms H Wallis-Dunn, Departmental Advocate
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