Dokas v Valuer General

The power of the Court

1. When such appeals are heard and determined by this Court, the Act sets out the range of options available to be considered when concluding of what should be the outcome of an appeal against the statutory valuation. Those powers are contained in s 40 of the Act, a provision which reads: 40 Powers of Land and Environment Court on appeal (1) On an appeal, the Land and Environment Court may do any one or more of the following: (a) confirm or revoke the decision to which the appeal relates, (b) make a decision in place of the decision to which the appeal relates, (c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision. (2) On an appeal, the appellant has the onus of proving the appellant's case.
2. It is important to note that the Act expressly requires that an objector to a statutory valuation, as is here the position with Mr Dokas and his concern that each valuation is too high, the objector is required to prove that the valuation is wrong, rather than the Valuer General being required to prove it is correct. However, as is generally the practice of the Valuer General (particularly dealing with self-represented objectors such as Mr Dokas), the Valuer General takes a positive view of the need to assist the Court and provides evidence in support of the valuation.

The evidence

1. Evidence was given in the proceedings by Mr Dokas. Mr Dokas was permitted to speak from the Bar Table, rather than being required to enter the witness box. After explaining to him the difference between evidence and submissions, and that I would have regard to what he told me as evidence or submissions as relevant (without him needing to worry about the difference between the two), Mr Dokas spoke to me, separately, concerning each of the properties, to explain his concerns to me.
2. I observe that it is clear that Mr Dokas objects to the significant increases in the statutory value that have been determined by the Valuer General for each of his properties because he considers that, for each property, the resultant increase in rates charged by his local council is unjustified, given what he considers to be the limited services provided to him by the Council. With respect to his investment property at 1 Bonanza Parade, he objects to the increases in land tax that have flowed from the increased statutory valuation of that property.
3. Mr Dokas explained the financial pressures he was under as a consequence of these increased rates and taxes and the impact that he felt that this was having on his ability not only to provide for himself, but also to make provision for younger generations of his family out of what he has earned during his years of hard work, prior to retirement. Whilst I understand (and sympathise with) his concerns, the task which I must undertake is to assess his objections to these valuations, strictly, by applying the provisions of the Act. I do not have any ability, within the legal framework applying to this Court in cases such as this, to make adjustments for individual social circumstances, no matter how well-deserving they might be.
4. The Valuer General provided evidence by Mr Hill, a registered valuer, concerning each of Mr Dokas' objections. Mr Hill prepared a separate expert Statement of Evidence concerning each of Mr Dokas' properties. Each of his Statements of Evidence was in the conventional form involving identification of what Mr Hill considered to be relevant sales comparable, in his first report, to 225 The Grand Parade, Monterey and, in his second report, to 1 Bonanza Parade, Sans Souci. Each of his reports set out the details of each of the development site sales he considered was comparable to 225 The Grand Parade (in his first report) and 1 Bonanza Parade (in his second report).
5. Mr Hill, in each report, undertook a conventional, comparable valuation analysis, setting out the attributes of each of the comparable sales when analysed to provide a proper valuation basis of deriving an analysed rate per square metre to be applied to 225 The Grand Parade or for 1 Bonanza Parade as appropriate. This analytic process, in each instance, is discussed further later in this decision.
6. Mr Hill also gave oral evidence in court concerning each of Mr Dokas' properties and the comparable sales Mr Hill had relied upon.

The site inspection

1. Outside Mr Dokas' property at 225 The Grand Parade, I met Mr Dokas and, for the Valuer General, Mr Nash, the Valuer General's barrister; Mr Rankins, the Valuer General's solicitor; and Mr Hill.
2. Because the inspection was being undertaken in rainy weather, Mr Dokas, Mr Nash and Mr Hill joined me in the Court's car to drive to (and look at) the comparable sales relied on by Mr Hill for both 225 The Grand Parade and for 1 Bonanza Parade. In addition, during the drive-around inspection, we also inspected 1 Bonanza Parade itself and two other sites in Bonanza Parade (Nos 3 and 18) that were sites about which Mr Dokas made submissions.
3. During the course of the drive-around inspection, Mr Hill pointed out the physical attributes of each of the sites upon which he relied for the purposes of each of his two expert reports.
4. Having undertaken this drive-around inspection, we returned to 225 The Grand Parade, where Mr Dokas pointed out matters relating to the adjoining property to the south, 227 The Grand Parade, the sale of which was also the subject of submissions made by Mr Dokas at that location.

Mr Dokas' annotated inspection list

1. First, I should observe that Mr Dokas tendered a copy of the site and comparable sales inspection schedule, which document, Mr Dokas said, contained the results of internet searches by his son-in-law of potentially relevant sales in the general area. Unfortunately, these annotations were not in a form that would provide me any assistance in my consideration of Mr Dokas' objections to the statutory valuations.

Introduction

1. In addition to Mr Dokas' general concerns, earlier described, concerning the impact that the increased statutory valuations would have on him, Mr Dokas also raised a number of more detailed matters concerning the valuation factors he considered were of importance relating to this property.
2. Before turning to them, it is appropriate to note a number of attributes of this site. The site is zoned R3 under the local environmental plan applying to the site. This zoning permits, amongst other forms of development, the erection of villas and townhouses. Mr Dokas has had such a development erected on his site. However, the Act requires the site to be valued on the basis of the underlying value of the bare land and not having any regard to the nature of the development erected upon it. This is because of the terms of s 6A(1) of the Act: 6A Land value (1) The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made.
3. This site has, on the Valuer General's calculation, an area of 847 square metres. It will be necessary, later, to consider the site area further, as Mr Dokas contends that the Valuer General's calculation of the site area is incorrect.
4. This site has three street frontages, they being to Bonanza Parade, Russell Lane and Bonanza Lane. The long axis of the site is generally oriented in a north-south direction. To the west, across Russell Lane, is the rear of the local strip-shopping centre running along Rocky Point Road, Sans Souci. Across the laneway to the south-west, in the rear of one of the commercial premises facing Rocky Point Road, is erected a mobile telecommunications base station tower.
5. Finally, it is appropriate to note that, along the western, Russell Lane boundary of Mr Dokas' property, he has been obliged by the local council, as part of its development approval for his townhouse and villa development on this site, to set the fenceline of the development back one metre from Russell Lane and construct, along this strip, a one-metre wide concrete pedestrian pathway.

Mr Hill's valuation evidence concerning 1 Bonanza Parade

1. Mr Hill's expert report set out, as earlier noted, his analysis of five sales of development sites he regarded as being sufficiently comparable in their location; development potential; zoning and time of sale to be of use in deriving an analysed rate per square metre to be applied to Mr Dokas' property at 1 Bonanza Parade.
2. I have carefully read Mr Hill's expert report for 1 Bonanza Parade. I am satisfied that it is an entirely orthodox, conventional valuation report for the purposes required for this hearing. His analysed value to be applied to 1 Bonanza Parade is $1,900 per square metre.
3. The Valuer General's statutory valuation, as at the base date of 1 July 2015, for 1 Bonanza Parade is $1,220,000. Applying Mr Hill's analysed rate of $1,900 per square metre to the site area calculated by the Valuer General would give a significantly higher value, namely $ 1,609,300. The Valuer General does not suggest that this higher valuation should be adopted, merely that the statutory valuation of $1,220,000 should be confirmed.

The basis for Mr Dokas' objections

1. In this context, it is appropriate to turn to deal with Mr Dokas' objections to the statutory valuation of 1 Bonanza Parade..
2. Mr Dokas contends that, for 1 Bonanza Parade, the statutory valuation as at 1 July 2015, should be $907,000. He relies on a number of factors in support of his objection. These are: 1. An inaccurate calculation by the Valuer General of the area of the site; 2. The impact of the commercial premises facing Rocky Point Road on the amenity of the site (both as to litter and trade waste collections); 3. The impact of the telecommunications base station in the vicinity of the site; 4. Traffic noise impacts on the site (generally and, specifically, as a consequence of Russell Lane being a two-way thoroughfare rather than being one-way); and 5. What he says should be drawn from the sale of Nos 3 and 18 Bonanza Parade.

The site area of 1 Bonanza Parade

1. The Valuer General's dimensioning of the site records the western boundary (that is the frontage to Russell Lane) as being 51.1 metres long. This dimension is some four metres longer than the dimension adopted by the Valuer General for the eastern boundary of the property. Mr Dokas contends that, relying on a drainage plan prepared for his villa/townhouse development, the two dimensions should be equal and that, as a consequence, the area of the site should be reduced, for this factor, to 800 square metres.
2. Although Mr Hill indicated, when asked to examine the drainage plan, that he did not accept the accuracy of the dimension relied upon by Mr Dokas (as the plan was not a survey-based one), I consider it appropriate for this analysis to take Mr Dokas' case at its highest. I therefore assume, solely for the purposes of this decision (and without needing to confirm that Mr Dokas' complaint about this dimension is accurate), that an area adjustment, for this factor, of a reduction to 800 square metres would be appropriate.
3. Mr Dokas then suggested that the area of the site, for valuation purposes, should be reduced by a further allowance of a little more than 50 square metres to take into account the excision (as he regards it) from his land of the area he was required to dedicate as the one-metre wide concrete pedestrian pathway along the Russell Lane frontage of his property.
4. Again, without needing to decide whether such a deduction is legally mandated, I propose to consider the total site area calculation for Mr Dokas' objection on the basis that these two deductions should be made from the Valuer General's calculated site area of 847 square metres. Doing so, for the limited purposes of assessing the validity of Mr Dokas' objection on this basis, would have the area of the site to be regarded as 750 square metres.
5. Applying Mr Hill's analysed value of $1,900 per square metre to a notional site area of 750 square metres, the analysed value for Mr Dokas' site would be $1,425,000, a value still significantly greater than the Valuer General's statutory valuation of $1,220,000 for the base date of 1 July 2015. It would be even greater than the value for which Mr Dokas contends of $907,000.
6. For the reasons which I explain later, I am satisfied that Mr Hill's analysed value of $1,900 per square metre for 1 Bonanza Parade is accurate. As a consequence, even making the assumptions Mr Dokas asks me to make concerning inaccuracies in the Valuer General's calculation of the area of the site, his objection on this basis would still fail.
7. As a further consequence, for the purposes of further discussion of the Valuer General's valuation of 1 Bonanza Parade as being $1,220,000 at 1 July 2015, the lowest value on the basis of Mr Hill's $1,900 per square metre and Mr Dokas' proposed site area of 750 square metres, still results in a value that is $205,000 higher than the Valuer General's statutory valuation.
8. It is in this context that I turn to consider the other objections that are raised by Mr Dokas. I do so without needing to decide whether or not Mr Dokas' site area calculation is correct or not.

The telecommunications tower

1. Although, for planning law purposes, fears play no role in making planning decisions, unless those fears are rational and are likely to be realised (New Century Developments Pty Limited v Baulkham Hill's Shire Council (2003) 127 LGERA 303; [2003] NSWLEC 154), that is not the position with respect to valuation matters, as I accept that perceptions and fears, as a general proposition, may influence decisions in the property market.
2. Although Preston CJ explained, in Telstra Corporation Limited v Hornsby Shire Council (2006) 67 NSWLR 256; (2006) 146 LGERA 10; [2006] NSWLEC 133, why there was no reason to regard electro-magnetic radiation as a negative factor, I accept Mr Dokas' submission that fear of such radiation may play a part in decisions by prospective tenants as to whether or not they would rent accommodation in his complex at 1 Bonanza Parade. This is a factor in favour of the propositions put by Mr Dokas that a valuation adjustment might be required.
3. However, for the reasons earlier explained, any adjustment must be made, initially, to the value derived by Mr Hill (even on Mr Dokas' site calculation basis), rather than from the notified statutory valuation. Only if necessary adjustments to Mr Hill's analysed value, as at the base date of 1 July 2015 (even on Mr Dokas' site area assumptions), required sufficient adjustment so that it was lower than the notified statutory valuation would there be any necessity to adjust that statutory valuation.

Rubbish from customers of the commercial premises to the west

1. Mr Dokas tendered a number of photographs, taken some time ago, of rubbish accumulating in, and immediately adjacent to, his premises. That rubbish, he said, came from patrons of food outlets across Russell Lane from his site.
2. As I understood his submission on this point, this also acted to lessen the attraction of his premises.
3. Although this might be the case, I consider that any negative impact from this on his ability to rent premises in his complex would be so minor as not to warrant any alteration in assessing the value of his property.

Waste collection from the commercial premises

1. Mr Dokas also described, during the course of the site inspection (when we were in Russell Lane), the nature of the frequent waste collection from the commercial food premises on the other side of Russell Lane. This, he submitted, added a further negative impact on his ability to rent his premises and that this, too, warranted a reduction in valuation.
2. Although I do not have detailed evidence as to the timing and nature of these waste collections, I am prepared, for the purposes of understanding Mr Dokas' position as a self-represented litigant, to assume that there is some adverse amenity impact as a consequence of this.
3. Again, taking Mr Dokas' case at its highest, I will have regard to that in my consideration of potential overall adjustments to Mr Hill's analysed land value (and, again, will do so on the basis of the assumption that Mr Dokas' site area calculation is correct).

3 Bonanza Parade

1. Mr Dokas tendered a set of the approved plans for redevelopment of 3 Bonanza Parade. Those plans disclose that the redevelopment that has been approved by the local council for that site to replace the existing single‑storey dwelling is a new two-storey dwelling with a detached granny flat at the rear.
2. During the course of his oral evidence, Mr Hill was asked to respond to Mr Dokas' reliance on the sale price of 3 Bonanza Parade, as a matter relevant to valuation of 1 Bonanza Parade. Mr Hill indicated that it was his expert opinion that this sale provided no basis to conclude that the statutory valuation for 1 Bonanza Parade was wrong. The reason advanced by him for this opinion was that the sale price of 3 Bonanza Parade, being for a future development site, reflected land value only and this included, in the land value, utility of having a rear-lane access as well as the frontage to Bonanza Parade. As this sale was on 15 August 2015, close to the base date, and was for $1,380,000, it provided support for his 1 Bonanza Parade valuation.
3. Mr Hill concluded that, unlike the sites which he had used for his analysis, 3 Bonanza Parade did not provide any useful assistance for Mr Dokas' objection to the assessment of land value for 1 Bonanza Parade.
4. For the reason outlined by Mr Hill, I am satisfied that this conclusion is correct and that I do not need to have regard to the sale of 3 Bonanza Parade as a matter requiring an adjustment of the value of 1 Bonanza Parade.

18 Bonanza Parade

1. Mr Hill explained, in his oral evidence, why he did not regard the sale of 18 Bonanza Parade as providing any assistance in analysing a land value for Mr Dokas' site.
2. There were three specific reasons he gave for this conclusion. First, 18 Bonanza Parade was sold for use of the existing dwelling rather than for redevelopment. As a consequence, it was not possible to have any understanding, from merely an external drive-by inspection from the street, of what the quality of the dwelling might be and, as a consequence, the amount to be deducted from the sale price in order to understand what the bare land value of that site might be.
3. Second, 18 Bonanza Parade had no rear-lane access and, in that regard, was significantly different from Mr Dokas' site, a site which had three street frontages.
4. Finally, Mr Hill pointed to the fact that 18 Bonanza Parade was zoned R2 - Low Density Residential, compared to the R3 zoning of Mr Dokas' site. This also made it not a validly comparable sale for the purposes of analysing Mr Dokas' land value.
5. For the reasons Mr Hill gave, I am satisfied the 18 Bonanza Parade does not provide any assistance to Mr Dokas.

Traffic noise and flow

1. These are aspects of location taken into account by Mr Hill in his comparative analysis with his other sales of development sites and do not warrant further adjustment.

Conclusion on 1 Bonanza Parade

1. I have earlier explained why Mr Hill's analysed land value, as at 1 July 2015, even adjusted on the basis of the issues raised by Mr Dokas concerning the site area calculation used by the Valuer General for the purposes of the statutory valuation process, is $205,000 higher than the statutory valuation of $1,220,000 determined by the Valuer General for 1 July 2015.
2. I have set out the various matters raised by Mr Dokas as warranting some further downward adjustment from this value of $1,425,000, taking Mr Dokas' case at its highest.
3. Even if the fears of electro-magnetic radiation from the nearby telecommunications tower and the amenity impact of frequent waste collection services provided to the commercial food premises on the western side of Russell Lane and facing Rocky Point Road taken into account, the maximum valuation adjustment that would be necessary for this purpose could not be sufficiently large to close the gap between $1,425,000 - being the value calculated on Mr Hill's valuation analysis - and adjustment downward on the site area basis submitted by Mr Dokas. The gap of $205,000 between that value and the statutory value of $1,220,000 determined by the Valuer General to apply for the base date of 1 July 2015 is simply too great.
4. As a consequence, taking every aspect of the matters raised by Mr Dokas at the most favourable to Mr Dokas, there is no basis to adjust the statutory valuation for 1 Bonanza Parade determined by the Valuer General for the base date of 1 July 2015.
5. Mr Dokas' appeal concerning the valuation of 1 Bonanza Parade must, therefore, be dismissed and the Valuer General's statutory valuation confirmed.

Mr Hill's analysis

1. Mr Hill, in his expert report concerning 225 The Grand Parade, relied on an analysis of three other sites on The Grand Parade. All of those sites were eastward-facing and two of the three had the same expansive views to Botany Bay as enjoyed by the dwelling on Mr Dokas' property. The third had filtered views of Botany Bay through vegetation in the recreation parklands that extend along this section of the Botany Bay foreshore.
2. All three of the comparable sites relied upon by Mr Hill share the same zoning. Each of them is capable of supporting a single dwelling and, Mr Hill considered, a single dwelling was the highest and best use for each of these sites. He also considered that this was the highest and best use of Mr Dokas' site.
3. Mr Hill analysed each of the three sales upon which he relied, and made appropriate adjustments for various differentiating factors such as site size; the time when the transaction took place; and, for Mr Dokas' site, the favourable factor that it had a secondary frontage to Hollywood Street, thus permitting garaging of double-width with access from the side-street rather than from The Grand Parade main thoroughfare frontage.
4. Mr Hill derived, as a result of his analysis, a deduced land value of $2,350 per square metre from these sales to be applied to Mr Dokas' site. In turn, this resulted in an analysed overall value of Mr Dokas' site of $2,170,000. This analysed value is $320,000 higher than the statutory valuation of $1,850,000 determined by the Valuer General as at the base date of 1 July 2015.

Mr Dokas' submissions

1. Mr Dokas' submissions concerning why he considered the statutory valuation for 225 The Grand Parade was too high were of a more limited nature than those he made concerning the valuation of his property at 1 Bonanza Parade.
2. There were, as I understood him, two bases for objection. The first was that, although he had potential access to the southern side of his property via a made concrete driveway, along the southern boundary, he was unable to use that as a consequence of the costs that would result to him if there were to be a kerb crossing installed, as one factor, and the obstruction caused by the large Norfolk Island Pine tree, and its root system growing in the roadside reserve a little to the south of the southern boundary of his property.

Two allotments

1. I have observed that Mr Hill has valued 225 The Grand Parade as having its use as a single residence as its highest and best use. I have proceeded to consider Mr Dokas' objections to the valuation of this property on this basis.
2. However, I also observe that the deposited plan attached to Mr Hill's expert report discloses that, as a matter of fact, 225 The Grand Parade comprises two separate allotments. For this reason, it is clear that, from a land-use perspective, it might well be appropriate to regard Mr Dokas' landholding as capable of supporting two separate residential developments, if the presence of his dwelling straddling the two allotments is to be ignored.
3. It is not appropriate for me to do so in these proceedings, given the nature of Mr Hill's concession concerning the highest and best use of the land. However, it does mean that the absence of a secondary direct access to Mr Dokas' property from The Grand Parade is also a matter of little relevance in my consideration of the valuation of his property.

227 The Grand Parade

1. In his oral evidence, Mr Hill also explained why he did not consider that the sale of 227 The Grand Parade provided any assistance with Mr Dokas' objection. First, the site was significantly narrower and more constrained in its redevelopment potential than Mr Dokas' site and, second, it lacked the favourable factor that Mr Dokas had with his secondary street frontage and ability to have multiple garage access.
2. Finally, Mr Hill indicated that the time of the sale of 227 The Grand Parade would also have required adjustment to reflect the difference between the time of the sale (May 2012) and the date of the statutory valuation, thus rendering it of little use. I accept Mr Hill's evidence in this regard.

Conclusion on 225 The Grand Parade

1. I am satisfied that the analysed value of 225 The Grand Parade of $2,170,000, as set out by Mr Hill in his expert report concerning this property, is correct. As this analysed value is considerably higher than the determined statutory valuation of $1,850,000 of the Valuer General for the base date of 1 July 2015, the necessary result is that Mr Dokas' appeal should be dismissed and the statutory valuation confirmed.

1 Bonanza Parade

1. I have concluded, assuming all of the matters raised by Mr Dokas, particularly his suggestion that the area of this site should be treated as 750 square metres for the purposes of valuation, are correct, the adjusted valuation, based on comparable sales evidence, arrived at by Mr Hill as $1,425,000 (on the basis of the reduced site area proposed by Mr Dokas) is nonetheless significantly higher than the statutory valuation determined by the Valuer General for 1 July 2015.
2. On this basis, Mr Dokas' appeal concerning the valuation of 1 Bonanza Parade, Sans Souci, must be dismissed and the statutory valuation confirmed.

225 The Grand Parade, Monterey

1. Mr Hill's expert report and his oral evidence, in combination, explain why, on the basis of three comparable sales, the analysed land value of 225 The Grand Parade, Monterey, as at 1 July 2015, should have been considerably higher than the statutory valuation of $1,850,000 determined by the Valuer General for the base date of 1 July 2015. The reasons advanced by Mr Dokas for disputing this valuation do not persuade me that any adjustment is potentially warranted.
2. As the Valuer General simply proposes that I confirm the statutory valuation as at the base date of 1 July 2015, the appropriate result for Mr Dokas' appeal against the valuation of 225 The Grand Parade, Monterey is that the appeal be dismissed and the statutory valuation confirmed.

Orders

1. In Matter Number 305529 of 2016, the orders of the Court are: 1. The appeal is dismissed; 2. Pursuant to s 40(1)(a) of the Valuation of Land Act 1916, the statutory valuation of 1 Bonanza Parade, Sans Souci, of $1,220,000, as at the base date of 1 July 2015, is confirmed; and 3. The exhibits, other than Exhibit 3, are returned.
2. In Matter Number 305542 of 2016, the orders of the Court are: 1. The appeal is dismissed; 2. Pursuant to s 40(1)(a) of the Valuation of Land Act 1916, the statutory valuation of 225 The Grand Parade, Monterey, of $1,850,000, as at the base date of 1 July 2015, is confirmed; and 3. The exhibits, other than Exhibit 1, are returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 March 2017