(v) Amount of valuation
38 I must determine the appropriate amount of compensation payable as the judicial valuer in light of my findings on the relevant issues above.
39 As to the relevant principles to apply, the parties' submissions did not agree entirely on the correct approach. The oft quoted principle in Spencer v Commonwealth (1907) 5 CLR 418 per Griffith CJ is that:
In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring "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?" It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.
40 This approach is reflected in s 56(1)(a) of the JT Act; see par 2 above.
41 The Applicant relied on, inter alia, Dixon J in Turner v Minister of Public Instruction (1956) 95 CLR 245 at 266 and 267 to the effect that "value" means value to the owner.
42 As pointed out by the Council's submissions, the "value to the owner" refers to legislation prior to the JT Act. In Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439 Spigelman CJ (Campbell J and Basten, Beazley and Bryson JJA concurring) at [26] - [32] held that value to the owner has no operative function in "market value" under the JT Act. As also submitted by the Council, the High Court in Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 82 ALJR 489 at 499 - 500; [48] - [51] affirmed that the definition of market value in s 56(1) of that Act assumes a hypothetical vendor and purchaser.
43 The two valuers in this matter have taken quite different approaches to the selection of comparable sales and appear to have done so for sound reasons. Neither approach is ideal. A public authority is the purchaser in the sales selected by Mr Large for properties that are generally similar to and close to the Applicant's land. I have held above that it is appropriate to consider these sales albeit with downward adjustment needed to take into account the circumstance that the market was falling (par 32-34) and also that the purchase by the public authority is likely to have had an enhancing effect (par 24-28).
44 As also noted earlier at par 12, Mr Sorenson identified a further difficulty with analysing the sales selected by Mr Large in that it is unknown if the amounts paid reflect market value only or additional matters such as injurious affection and solatium. Mr Large did not speak to any of the vendors to find out the position. Sale 2 has the highest figure derived of $231/m2 and was a sale to the Department of Education by a developer who Mr Sorenson advised 12 months before the sale. Mr Sorenson's evidence was that there were other considerations such as injurious affection considered at the time he gave advice. The sale was of part of the land only, not the whole parcel. He did not know what the final figure paid represented but considered it was unlikely to have been market value only. I consider Mr Large's sale 2 should be ignored.
45 Sale 1, virtually next door to sale 2, to the Department of Education was analysed by Mr Large to show an adjusted rate of $207/m2. Mr Large does not know but assumed it represented market value only. That sale is also unreliable for the reasons identified by Mr Sorenson. That reasoning also applies to sale 3 ($207/m2) and Edmondson Park ($180.92/m2). Downward adjustment of the figure adopted by Mr Large of $180/m2 is also necessary in light of these matters.
46 This adjustment down of Mr Large's figure is confirmed by considering the sales considered by Mr Sorenson which demonstrated a much lower figure. I considered which of Mr Sorenson's sales could be comparable at par 30-31. His sale 1, which he considered most applicable, when adjusted by Mr Large for location and timing showed $165/m2. Sale 2 was adjusted by Mr Large to derive a figure of $210/m2 but that appears too high to be relevant. As identified in par 31, the adjustments made by Mr Large for location should be reduced.
47 I consider the applicable rate should be $165/m2 for the 11,405m2 of land able to be developed for residential development.
48 As considered at par 35-37, a lower rate in the flood affected land is appropriate. A rate of $70/m2 should be applied for the 845m2 of flood liable land, as identified by Mr Sorenson in his evidence. Compensation should therefore be awarded in the amount of $1,940,975.
Disturbance - claim for stamp duty
49 The Applicant's counsel was instructed to apply for stamp duty as part of the disturbance claim. No evidence of the basis for making such a claim such as an affidavit of the Applicant was provided to support a claim such as that awarded in Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) (2000) 108 LGERA 417. In the absence of any appropriate evidence to found a claim for stamp duty I cannot award it in light of the authorities on this matter.
Orders
50 For the reasons set out above I order that:
1. Pursuant to the Land Acquisition (Just Terms Compensation) Act 1991, compensation should be awarded to the Applicant in the amounts of $1,940,975 for market value and $9,900 for disturbance.
2. Costs are reserved.