Anderson v Valuer-General

Valuation of Land Act 1916, s 37 LEGISLATION CITED: Conveyancing Act 1919, s 88K

DATES OF HEARING: 22/03/05 EX TEMPORE JUDGMENT DATE : 03/22/2005

APPLICANT Mr A Anderson, one of the applicants

LEGAL REPRESENTATIVES: RESPONDENT Mr A Pickles, barrister SOLICITOR Crown Solicitor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

31059 of 2004: Alec Anderson, Hugh Anderson and Murray Anderson v Valuer-General

JUDGMENT 1 This is an appeal under s 37 of the Valuation of Land Act 1916 in respect of the land value of Lot 1 DP 201644 at No.69 Amos Lane, Bundanoon, as at 1 July 2003. The Valuer-General originally determined the land value as at that date to be $201,000. Upon considering the applicant's objection that the value was too high because the subject land is landlocked and does not have formal legal access to a public road, the Valuer-General amended the valuation to $180,000. The land value formerly determined as at 1 July 2000 was $45,000. 2 At the hearing Mr A Anderson, who is one of the three tenants-in-common who own the subject land, appeared in person and gave evidence on behalf of the owners. Evidence for the Valuer-General was given by registered valuer Mr P Gardner. 3 The evidence from Mr Gardner indicates by reference to comparable sales that the value of the subject land, assuming that it had lawful access, would be $240,000. However, I indicated that I had some reservations about some of the adjustments that were made to the comparable sales, particularly for topography and location and because five of the six comparable sales involved sewered land and the subject land was unsewered. 4 After a short adjournment the parties agreed as a compromise that the starting point for ascertaining the land value of the subject land would be $201,000 assuming that the subject land had lawful access. 5 The issue then was: what deduction from the $201,000 should be made on account of the fact that an intending purchaser would take into account the need to obtain a formal right-of-way to the closest public road, Amos Lane. 6 In considering what deduction should be made, Mr Gardner gave two alternatives. First, a purchaser could negotiate and come to an agreement with the owner over which the right-of-way would be granted, namely Canhill Pty Ltd, in which case Mr Gardner was of the opinion that $25,000 should be allowed to cover matters of uncertainty and costs involved in coming to such an agreement. 7 Secondly and alternatively, if the land had to be acquired pursuant to s 88K of the Conveyancing Act 1919, Mr Gardner was of the opinion it would be reasonable to allow $42,000 made up as follows: compensation for the land, $10,000; cost of legal proceedings, $20,000; and an amount for the greater risk associated with this process, $12,000. Deducting the $42,000 from the earlier-mentioned figure of $201,000 the land value would be $159,000.

8 In contrast, the applicant submitted that an amount of $163,416 including GST should be deducted. This amount is set out in a costing which the applicant produced. He is an engineer and he prepared a costing for carrying out the construction of a bitumen-sealed road 6 m wide and 150 m long from the subject land to the commencement of Amos Lane including ancillary costs such as drainage, the total of which as I mentioned was $163,416. Deducting that amount from the earlier-mentioned $201,000 would give a land value for the subject land of $37,584.

9 The determination of which approach is correct must have regard to the previous history and the current situation of the subject and immediately surrounding lands. Prior to 1960 the subject land had a right-of-way over the Canhill land to a public road. However, the council resumed that right-of-way for the purpose of providing for the council a right-of-way and easement for pipeline to a small parcel of land centrally located within the surrounding Canhill land.

10 Unfortunately the effect of this resumption was that it extinguished the existing rights-of-way enjoyed by the subject land across the Canhill land. The Canhill land is known as Lot 3 DP 734591. The owners of the subject land were nevertheless permitted, apparently without any formal legal arrangement, to continue to use the same access across what is now the council right-of-way over the Canhill land.

11 The applicant Mr A Anderson is a director and shareholder of Yazor Pty Ltd, which is a trustee company for E E Anderson Trust which owns all the shares in Canhill Pty Ltd. Mr Anderson's two nieces are the other shareholders in Yazor Pty Ltd. The relationship between Canhill Pty Ltd and the owners of the subject land through the connection of Mr A Anderson probably explains why there was no formal arrangement required. Subsequently, Canhill Pty Ltd granted a right-of-way in favour of Lot 23 DP 869193 for the consideration of $1, and various covenants applied including a requirement to share 24 percent of the maintenance costs of the right-of-way. This right-of-way was over the same right-of-way that the council had resumed and the council apparently made no objection to the owner of the land through which the right-of-way passed granting this additional right-of-way. Further, a second right-of-way was granted by Canhill Pty Ltd in respect of Lot 3 DP 343144, again without any objection from the council, so the right-of-way that formerly was enjoyed by the subject land across the Canhill land to Amos Lane is now still used as a right-of-way lawfully by two other private landowners and by the council.

12 On the subject land there is erected a dwelling house and the occupants of that dwelling house also use without any formal arrangement the same right-of-way to gain access to Amos Lane. In accordance with s 6A(2) of the Valuation of Land Act 1916, it can be assumed that the house on the subject land can continue to be there for the purpose of valuing the subject land. However, there is no assumption that an intending purchaser can have lawful access over the Canhill land. One is only required to assume that the physical condition as at the relevant date of surrounding lands was the same as at the base date 1 July 2003.

13 In considering what allowance should be made for the lack of legal access to the subject land, it is relevant to take into account that the subject land has been valued on the basis that its highest and best use is for its current use, that is for a single dwelling house. If the subject land had been valued on the basis that it could be subdivided, it would be necessary to take into account that an altogether different form and standard of access would be required.

14 I do not accept the applicant's contention that an allowance should be made not only for the costs of acquisition but also for the cost of carrying out road works amounting to $163,416. Having regard to the history, it could be that an intending purchaser would be able to negotiate the purchase of a right-of-way across the Canhill land for a sum less than $43,000 including an allowance for some maintenance of the access.

15 If necessary an easement could be obtained pursuant to s 88K of the Conveyancing Act 1919 and again I am of the opinion that the appropriate allowance on the evidence in the case before me would be about $42,000 see par 7 above). Included within that amount is $12,000 for the risk associated with the project. An intending purchaser would take into account that possibly the Supreme Court could require substantially more than $12,000 to be provided in some form for maintenance or for carrying out of a once-off upgrading of the road. However, the intending purchaser would also take into account that having regard to the fact that the access now appears suitable for the use by the council and for two private landowners and for the occupants of the subject land itself that an amount in excess of $12,000 would not be needed in addition to compensation of $10,000 and the costs of legal proceedings of $20,000.

16 I was not referred to any decided cases that might assist me in ascertaining what amounts would be appropriate. The onus of proof according to s 40 of the Valuation of Land Act 1916 is on the applicants to establish their case. It would be open to the applicants in a subsequent year, upon providing other information or more detailed consideration of the issue now before the Court, to contend for some other figure than the figure that I now determine of $42,000 for the fact that the subject land is landlocked. I consider that an intending purchaser would allow an amount in the vicinity of $42,000 to be deducted from the value of the land (agreed to be $201,000) assuming the land to have lawful access. That gives a land value for the subject land without such lawful access of $159,000.

17 Accordingly, the orders of the Court are: 1. The appeal be upheld. 2. The land value as at 1 July 2003 for Lot 1 DP 201644 at 69 Amos Lane, Bundanoon, is altered to $159,000. 3. The exhibits, other than exhibits 1, 2 and A, may be returned.

          A J Nott
          Commissioner of the Court
          ljr

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