Johnston v Valuer-General of New South Wales

Procedural history

1. The registered proprietor of the subject land was Mrs Shirley Gwendoline Johnston, the appellant's late mother. Mrs Johnston passed away on 6 December 2022. As previously noted, the appellant lodged an objection out of time. On 17 April 2023, the Valuer-General exercised her discretion under s 35A of the VLA to permit the appellant to lodge an objection after the 60-day period in view of the circumstances surrounding the delay as cited by the appellant in his objection, including, inter alia, the death of Mrs Johnston. On 19 June 2023, letters of administration were granted to the appellant and Mr Lindsay Murray Johnston, the children of the late Mrs Johnston.
2. On 21 July 2023, the Valuer-General disallowed the objection. On 30 August 2023, the appellant commenced these Class 3 proceedings, within time. On 30 November 2023, the parties participated in a s 34 conciliation conference at which no agreement was reached.

The subject land

1. The subject land is located on a quiet street in the local government area of Ryde, Parish of Hunters Hill, County of Cumberland, as described in Computer Folio 5/30344. Ryde is located approximately 13km north-west of the Sydney central business district by road. The land is zoned R2 Low Density Residential pursuant to Ryde Local Environmental Plan 2014 (NSW) (LEP). Dwelling houses and dual occupancies (attached) are permitted within the R2 zone.
2. Ryde is a suburb predominantly of mixed commercial and residential character. Access to the suburb is from the Victoria and Lane Cove Roads. The locality adjoins Hunters Hill and East Ryde to the east, Putney to the south, West Ryde to the west and North Ryde to the North.
3. The subject land comprises a rectangular shaped residential parcel with a gentle fall towards its rear boundary. The site area is 581.7m2. The subject land has a single street frontage to Watts Road of 15.24m, a northern boundary alignment of 38.602m, a southern boundary alignment of 38.316m and a rear boundary of 15.24m. The land has a cleared building envelope to the centre, with some scattered trees primarily within the front street setback and rear yard.
4. The current improvements are a single level residential dwelling of brick and flat metal roof, built circa mid 1960s, of mostly original external presentation. A sewer line traverses the rear yard, approximately 6m from the rear boundary towards the north-eastern corner of the land.
5. Part of the subject land is flood liable as identified in the Macquarie Park Floodplain Risk Management Study, April 2010.
6. The figure below is an aerial photograph of the subject land sourced from the Spatial Information Exchange (SiX Maps) and reproduced in the report of the Valuer-General's expert, Mr Angelo Konidaris:
7. As opined by Mr Konidaris and observed by the Court on the site inspection, surrounding development predominantly comprises older established low density residential dwellings. Emerging redevelopment is occurring in this location comprising modern attached residential dual occupancy residential development.

Town planning

1. In his report, Mr Konidaris said that his review of the NSW Planning Portal reveals that the subject land was zoned R2 Low Density Residential as at the date the valuation was made. The land has a height of building control of 9.5m under the height of buildings map in the LEP. It has a minimum lot size control of 580m under the minimum lot size map in the LEP. The land has a maximum floor space ratio control of 0.5:1 under the floor space ratio map in the LEP. Permitted uses with consent in the R2 zoned pursuant to the land use table in the LEP include: Bed and breakfast accommodation; Business identification signs; Centre-based child care facilities; Community facilities; Dual occupancies (attached); Dwelling houses; Environmental protection works; Group homes; Health consulting rooms; Home-based child care; Home businesses; Home industries; Hospitals; Oyster aquaculture; Places of public worship; Pond-based aquaculture; Recreation areas; Residential care facilities; Respite day care centres; Roads; Secondary dwellings; Tank-based aquaculture
2. Mr Konidaris noted that dwelling houses and dual occupancies (attached) are both permitted within the R2 zone. Clause 4.1A of the LEP outlines the controls relating to a development application for an attached dual occupancy. Clause 4.1A provides: 4.1A Dual occupancy (attached) subdivisions Despite clause 4.1, development consent may be granted for the Torrens title subdivision of a lot or subdivision of a lot under the Strata Schemes Development Act 2015 if - (a) before the day Ryde Local Environmental Plan 2014 (Amendment No 28) commences, a development application for a dual occupancy (attached) has been approved and an occupation certificate has been issued for that development, and - (i) the lot to be subdivided has an area of at least 580 square metres, and (ii) 1 dwelling will be situated on each lot resulting from the subdivision, and (iii) each resulting lot will have an area of not less than 290 square metres, or (b) on or after the day Ryde Local Environmental Plan 2014 (Amendment No 28) commences, a development application made for a dual occupancy (attached) has been approved for the lot, and - (i) the lot has an area of at least 580 square metres, and (ii) 1 dwelling will be situated on each lot resulting from the subdivision, and (iii) each resulting lot will have an area of not less than 290 square metres, and (iv) the primary road frontage of each resulting lot will be equal to or greater than 7.5 metres.
3. Accordingly, a minimum frontage of 7.5m per completed dwelling is required, which results in a total frontage required of 15m (that is, 7.5m x 2 lots = 15m total frontage required).
4. The subject land has a minimum frontage of 15.24m, and a total land area of 581.7m2 which meets the minimum frontage and site area requirements for attached dual occupancy development set out in cl 4.1A of the LEP.
5. Mr Konidaris opined that as the land falls to the rear, it is common place for an easement for stormwater drainage to be required to facilitate dual occupancy development.
6. Mr Konidaris reviewed the City of Ryde Development Control Plan 2014 (NSW) (DCP) to determine the requirements for stormwater drainage, including s 8.2 (Stormwater and Floodplain Management) of the DCP. An extract of the Controls in s 2.3.2 of the DCP is reproduced below: CONTROLS a. Where development is to utilise an existing private drainage easement to drain, proof of the right to drain through the easement and clarification of the infrastructure in the easement (or works required to accomplish this) must be presented prior to consent to ensure the means of drainage is viable. b. Where a new private drainage easement must be established to legally convey stormwater runoff through a downstream property to a preferred discharge point, a private drainage easement must be obtained. Refer to Section 1.6 of the Stormwater Technical Manual in relation to this process. NOTE: Where the subject property falls towards private property, there is great potential for stormwater runoff to impact downstream lots. To safely convey stormwater runoff a drainage easement is required so as to enable the legal right to drain stormwater over the downstream property. Should exemption be granted for the need to acquire a new easement, the requirements of alternative discharge points are as specified in Section 2.3.3.
7. Mr Konidaris opined that these controls provide the potential for an exemption being granted (not requiring an easement over the adjoining land): s 2.3.3 of the DCP. Table 2.3 in the DCP specifies the conditions of a potential exemption:
8. The cadastral boundaries of the subject land are identified in the extract from Deposited Plan 30344, also reproduced in the report of Mr Konidaris:

The statutory valuation task

1. Section 6A(1) of the VLA provides in relation to the determination of land value: 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.
2. Section 34(1)(a), in Part 3 of the VLA provides relevantly in relation to the grounds of objection to a notice of valuation given by the Valuer-General: 34 Grounds of objection (1) In relation to land the only grounds upon which objection may be taken under this Act are - (a) that the values assigned are too high or too low,
3. Section 37(1)(a), in Part 4 of the VLA, provides in relation to appeals to the Land and Environment Court: 37 Right of appeal (1) Any person entitled under Part 3 to object to a valuation may appeal to the Land and Environment Court if the person is dissatisfied with the Valuer-General's determination of any such objection to the valuation concerned (whether or not the person was the objector).
4. Pursuant to s 40(1), the Land and Environment Court, on appeal, may do any one or more of the following: 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.
5. On an appeal, the appellant has the onus of proving the appellant's case: s 40(2).
6. Relevantly, here, the appellant has the onus of proving that the issued land value for the valuing year is too high. [1] If the appellant does not discharge that onus, the appeal must be dismissed and the issued statutory value confirmed. [2]

The comparable sales approach

1. It does not appear to have been in dispute between the appellant and the Valuer-General that in valuing the subject land, the appropriate valuation method was the comparable sales approach. Ordinarily, the best evidence of the market value of land is that of comparable sales, and the conventional valuation method is the comparable sales approach. This is the most widely adopted approach for low density residential purposes.
2. In Tenstat v Valuer General; Woolworths Limited v Valuer General [3] (Tenstat) at [35]-[43], Parker AC referred to the direct comparison of sales evidence approach as the conventional method of valuation, and identified the four steps in the process of undertaking a valuation using comparable sales evidence: 35. It is well established that, if comparable sales are available, the direct comparison of sales evidence approach is the conventional method of valuation (Graham Trilby Pty Ltd v Valuer General [2009] NSW LEC 1087 at 41(Trilby); Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at 156; Riverbank Pty Ltd v Commonwealth (1974) 48 AJLR 483 at 484; Marroun v Roads and Maritime Services [2012] NSWLEC 196 at 196 (Marroun)). 36. The process of undertaking a valuation using comparable evidence comprises several steps, including the: a accumulation; b analysis; c adjustment; and d application of potentially genuinely comparable sales (Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73 (Trust Company); Marroun, 197). 37. A Court depends upon the established expertise of valuer witnesses called on both sides of the case (Marroun, 197). 38. As Sugerman J said in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1, at 18-19: "The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant." 39. The accumulation of potentially genuinely comparable sales seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the subject property (Trust Company, 110 and 111; Marroun, 198). 40. Generally the competing parties produce lists which the Court must sift to identify some which are "truly comparable", or a "reasonably representative" sample and "relevant and sufficient in volume" (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, at 121). 41. Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409, at 414). 42. In Brewarrana v Commissioner of Highways (No 2) 6 SASR (Brewarrana) at page 551, Wells J observed: "there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not." 43. Further, Wells J went on to observe that: "The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods."
3. In Richard Capuano v Roads and Maritime Services (Capuano), [4] Robson J at [13]-[19] summarised the accepted methodology for the comparable sales approach. That methodology, using comparable sales evidence, is undertaken in four steps: accumulation, analysis, adjustment and application: 13. It is generally accepted that, insofar as there are comparable properties available, being sales of properties sufficiently similar to the subject property as to allow a comparison to be made between them, the conventional valuation method is the comparable sales approach. The manner in which that method should be applied is now well-known: River Bank Pty Ltd v Commonwealth (1974) 4 ALR 651; (1974) 31 LGRA 244 at 652; Graham Trilby Pty Ltd v Valuer-General [2008] NSWLEC 217 at [27]; Graham Trilby Pty Ltd v Valuer-General [2011] NSWLEC 68 at [24]; Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]; New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 ('Cremation Company') at [84]-[88] and [97]-[104]. 14. The accepted methodology for the comparable sales approach is that it be undertaken in four steps, being accumulation, analysis, adjustment, and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257; (2016) 281 LGERA 411 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) ('Marroun') (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358; (2013) 211 LGERA 391 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing)); Cremation Company at [99]. 15. First, the valuer (which includes the Court acting as valuer on appeal) is to accumulate comparable properties. In Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8, McHugh, Gummow, Kirby, Hayne and Callinan JJ commented at [18] that the "sales to be treated as comparable sales need to be truly comparable", although they added that the Court should not be "unreasonably selective". 16. Secondly, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC). 17. Thirdly, the valuer (judicial or otherwise) should adjust those properties it considers comparable to create equivalence with the unimproved subject property. I note the comments of Biscoe J in Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]: The basis for the valuers' valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable. Third, the Court should then apply these adjusted values to the subject property. The purpose of this is to determine, based on comparable sales and as best it can, what value the subject property would obtain if it were to be sold on the market. 18. Fourthly, the valuer should apply the comparable sales approach to determine a value of the subject property based on the adjusted values of the comparable properties. 19. Although there has been some judicial debate, it is now accepted that the process of making explicit adjustments for differences in the valuation method allows the adjustment process to be logical and transparent as opposed to an implicit process comprising a single adjustment that risks rejection for want of transparency: Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73; (2012) 211 LGERA 158 at [115]; Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]; and Marroun at [203]-[207].
4. In Land Acquisition (7th ed, LexisNexis Butterworths, 2017), Newton & Conolly say at 250: The onus is upon the party submitting evidence of the value of the land to prove that the sales relied upon are in fact comparable. Having established that prima facie there are grounds for showing comparability, the onus moves to the other party to show that the sales referred to are not comparable.

Appellant's evidence

1. The appellant did not file any expert evidence (or written submissions), and informed the Court at the hearing that he relied on "the original application". This was a reference of the Class 3 application filed on 30 August 2023 which included the valuation objection form which attached a property report for the subject land prepared by Upside Realty dated 30 January 2023 and which provided the following "Property Estimate" (the Upside Realty property estimate):
2. Also attached to the Class 3 application was the Valuer-General's Report on Objection to the Land Value under the Valuation of Land Act 1916, dated 12 May 2023.
3. The Upside Realty property estimate lists 10 "Comparable Properties"; namely, 58 Kent Road, North Ryde; 9 Danbury Close, Marsfield; 75 Ford Street, North Ryde; 4 Napier Crescent, North Ryde; 24 David Avenue, North Ryde; 53 Edmondson Street, North Ryde; 28 Ferrabetta Avenue, Eastwood; 1A Woodbine Crescent, Ryde; 4 Koorong Street, Marsfield; and 45 Simla Road, Denistone.
4. The appellant also tendered an email from Mr Daniel Pearse, senior coordinator engineering & landscaping services, City of Ryde Council, to the appellant dated 7 December 2023, the subject line of which is "27 Watts Road - Flood Map". The email provides as follows (emphasis added): … Please see attached a snapshot from our mapping system which depicts our Flood Risk map overlaying the site. I can confirm that the site is subject to flood related planning controls for land below the flood planning level. In other words, it is effected by the 1%AEP flood event. …
5. The email attaches a snapshot from Council's mapping system depicting "our Flood Risk map overlapping the site". The subject land at 27 Watts Road is shown in the orange rectangle:

Valuer-General's evidence: report of Mr Angelo Konidaris

1. The Valuer-General tendered an expert report prepared by Mr Angelo Konidaris, registered valuer, dated 15 March 2024. In his report, Mr Konidaris identified the following eight comparable sales: 1. Sale 1 - 14 Zola Avenue, Ryde; 2. Sale 2 - 28 Watts Road, Ryde; 3. Sale 3 - 21 Thorn Street, Ryde; 4. Sale 4 - 7 Meta Street, Ryde; 5. Sale 5 - 30 Goulding Street, Ryde; 6. Sale 6 - 10 Ronald Street, Ryde; 7. Sale 7 - 7 Ronald Street, Ryde; and 8. Sale 8 - 17 Olive Street, Ryde.
2. The map below shows the locations of the eight comparable sales relied on by Mr Konidaris, and the subject land:
3. In summary, Mr Konidaris utilised sales of comparable sized R2 Low Density Residential zoned parcels with similar attached dual occupancy development potential located within the immediate vicinity in Ryde. All but two of the sales analysed by Mr Konidaris were purchased for the purpose of redevelopment for an attached dual occupancy. These sales were considered to be helpful by Mr Konidaris for the following reasons: 1. the analysed sales have comparable zoning and generally comparable development potential to that of the subject land; 2. the analysed sales are within a comparable location within Ryde (the majority of sales being within 1km of the subject land); 3. the analysed sales offer generally similar physical attributes to those of the subject land; and 4. Sales 1 to 6 all transacted within 2022 in similar market conditions as the valuing year.

Impact on land value of the slope towards the rear boundary

1. Mr Konidaris observed that most of the sales relied upon by him have generally level contours, or a gentle rise towards the rear boundary. The natural consequence of this physical feature was, in his opinion, that an easement for stormwater drainage is not required over these properties to facilitate a dual occupancy development. This differs from the subject land which has a gentle natural fall toward its rear boundary. When viewed at a high level, this would be an inferior attribute of the subject land.
2. Mr Konidaris considered any discount attributable to this factor would take into account the inherent risk of successfully negotiating an easement over an adjoining property. Mr Konidaris identified some of the potential risks that would be considered by a purchaser as including: 1. time delays in obtaining approvals resulting in additional holding costs; 2. risk of negotiations with the adjoining owner to obtain an easement being unsuccessful; 3. potential cost of litigation to obtain a court-imposed easement if a negotiated outcome could not be achieved; and 4. risk that litigation being unsuccessful.
3. To determine if there was a market derived impact of a fall to the rear of the boundary, Mr Konidaris first considered the market evidence in relation to 14 Zola Avenue (Sale 1) and 28 Watts Road (Sale 2). Sale 1 comprises a rectangular 664m2 shaped dual occupancy development site with a gentle fall to its rear boundary (away from the street), whereas Sale 2 is a similar sized 670m2 with a gentle rise to the rear allowing for gravity drainage to the street. The two parcels are comparable in size, both were purchased contemporaneously during 2022 and both are in comparable street locations in Ryde.
4. Sales 1 and 2 transacted for $2,350,000 and $2,380,000 respectively. The mathematical difference is 1.2% which Mr Konidaris considered to be negligible. Mr Konidaris opined that these two sales provide no support for a discount to value as a result of difference in contours, and indicate that there is no discount attributed to this physical feature by the market. It was Mr Konidaris' opinion that s 2.3.3 of the DCP and the availability of an exemption to the requirement to obtain a drainage easement was a significant factor contributing to these very similar values. As well as the availability of an exemption and to use alternative methods of stormwater management if it were not possible to negotiate for an easement with a downstream property.
5. In Mr Konidaris' view, a purchaser looking to acquire a dual occupancy site, aware of the planning controls in the DCP and the potential availability of the exemption would be "instilled with confidence" in a development not being delayed due to potentially unsuccessful negotiations. Accordingly, Mr Konidaris did not consider that any discount was required for topography.

Market movement

1. Given that the majority of the sales analysed and relied upon by him were transacted in 2022 (other than Sales 7 and 8) with no significant variance in sale prices, it was Mr Konidaris' opinion that an adjustment for market movement for sales during 2022 was not warranted.
2. Mr Konidaris noted that the two sales transacted in late 2021 (Sales 7 and 8) appeared to reflect higher rates than the other six sales analysed by him. Those sales transacted in stronger market conditions, prior to interest rate pressures on the residential property market. He relied upon these two sales as secondary evidence only, with sales transacted closer to 1 July 2022 providing a better comparison to the market conditions as at 1 July 2022. This resulted in his placing of a greater weighting on sales transacted in 2022, compared to sales transacted in 2021, in arriving at the land value of the subject land as at 1 July 2022.

Sales comparison - 2022 valuation year

1. Sales 1 to 8 provided a range of analysed land values before adjustment of between $1,965,000 and $2,800,000. The primary variations were a result of site area and whether the property enjoyed dual occupancy potential. All of the sales were located within close proximity in Ryde to the subject land, with all but one having development consent for some form of residential redevelopment. Mr Konidaris included this sale, Sale 2, which lacked a current consent for redevelopment because of its proximity on the same street as the subject land.
2. Mr Konidaris considered these sales to be of assistance in deriving a land value for the subject land as no subjective adjustment was required for the added value of improvements, and each of the sales was indicative of "knockdown" or notional vacant land sales in Ryde.

Sale 1 (14 Zola Avenue, Ryde) - 663.9m2 / $2,350,000 analysed land value

1. Sale 1 comprised a rectangular shaped residential parcel located within close proximity to the subject land. It is zoned R2 Low Density Residential. It is larger in size and offers comparable topography to that of the subject land. It is flood free, has a frontage of 15.27m, and was purchased for dual occupancy development. The improvements have since been demolished and redevelopment of the land has occurred notwithstanding the dwelling being improved with a functional single level dwelling at the time of sale. The sale was transacted in June 2022. According to Mr Konidaris, this provides a strong guide to market conditions at the date of valuation. Mr Konidaris made an adjustment of -10% (-5% for size, 0% for location and -5% for flooding) to reflect what he considered to be its superior attributes, thereby supporting a land value of $2,115,000 for the subject land.

Sale 2 (28 Watts Road, Ryde) - 670.3m2 / $2,260,000 analysed land value

1. Sale 2 comprised a rectangular shaped residential parcel located on the same street as the subject land. It is zoned R2 Low Density Residential. It is larger in size and offers superior topography, being located on the "high side" of Watts Road with a gentle rise to the rear. It is flood free, and the improvements have been retained in the short term. Having regard to the prevailing sales evidence, in particular that in relation to 10 Ronald Avenue, Mr Konidaris did not consider it appropriate to adopt any added value for the improvements. Nonetheless, he adopted a conservative approach in favour of the landowner, deducting depreciated value to the improvements.
2. The sale was transacted in November 2022, in similar market conditions to those as at the date of valuation. Mr Konidaris made an adjustment of -10% (-5% for size, 0% for location, -5% for flooding) to reflect what he considered to be its superior attributes, thereby supporting a land value of $2,035,000 for the subject land.

Sale 3 (21 Thorn Street, Ryde) - 613.04m2 / $1,965,000 analysed land value

1. Sale 3 comprised a rectangular shaped residential parcel located in close proximity to the subject land. It is zoned R2 Low Density Residential. It is slightly larger in size, however offers a narrower 12.19m frontage, with the result that it does not have dual occupancy potential. It is partially flood liable along the side setback and in the rear yard in which respect Mr Konidaris considered it to be comparable to the subject land. The property was improved with an older brick and tile dwelling since demolished to make way for a modern two storey residential dwelling. The sale was transacted in October 2022, in similar market conditions to those as at the date of valuation.
2. Mr Konidaris considered this property to be inferior overall to the subject land due to its inferior dual occupancy potential and to provide a strong lower limit of the value of the subject land. He made an adjustment of +10% (0% for size, +10% for development potential, 0% for location, 0% for flooding) to reflect what he considered to be its inferior attributes, there by supporting a land value of $2,160,000 for the subject land.

Sale 4 (7 Meta Street, Ryde) - 600.7m2 / $2,340,000 analysed land value

1. Sale 4 comprised a slightly irregular shaped residential parcel located in a quiet cul-de-sac close to the subject land. It is zoned R2 Low Density Residential. It is slightly larger in size, and is flood free with comparable dual occupancy potential. The property was improved with a clad dwelling which has since been demolished to make way for a modern attached dual occupancy development. The sale was transacted in April 2022, in similar market conditions to those at the date of valuation.
2. This property was considered by Mr Konidaris to be superior to the subject land. He made an adjustment of -5% (0% for size, 0% for development potential, 0% for location, -5% for flooding) to reflect its superior attributes, thereby supporting a land value of $2,225,000 (apparently rounded up) for the subject land.

Sale 5 (30 Goulding Road, Ryde) - 581.7m2 / $2,390,000 analysed land value

1. Sale 5 comprised a slightly irregular shaped residential parcel located at the intersection of a local throughfare and a quiet side street close to the subject land. It is zoned R2 Low Density Residential. It is comparable in size to the subject land, and is flood free with comparable dual occupancy potential. The property was improved with an older brick and tile dwelling which has since been demolished to make way for a modern attached dual occupancy development. The sale transacted in March 2022, in similar market conditions to those at the date of valuation.
2. The property was considered by Mr Konidaris to be slightly superior to the subject land. He made an adjustment of -5% (0% for size, 0% for development potential, 0% for location, -5% for flooding) to reflect its superior attributes, thereby supporting a land value of $2,270,000 for the subject land.

Sale 6 (10 Ronald Avenue, Ryde) - 695.6m2 / $2,800,000 analysed land value

1. Sale 6 comprised a rectangular shaped residential parcel in a quiet street location close to the subject land. It is zoned R2 Low Density Residential. It is much larger in size than the subject land, and is flood free with comparable dual occupancy potential. The property was improved, with an older two level clad and tile dwelling of updated presentation which has since been demolished to make way for a modern attached dual occupancy development. The sale was transacted at the end of March 2022, in similar market conditions to those at the date of valuation.
2. This property was considered by Mr Konidaris to be superior to the subject land. He made an adjustment of -15% (-10% for size, 0% for development potential, 0% for location, -5% for flooding) to reflect its superior attributes, thereby supporting a land value of $2,380,000 for the subject land.

Sale 7 (7 Ronald Avenue, Ryde) - 657m2 / $2,590,000 analysed land value

1. Sale 7 comprised a rectangular shaped parcel located on a quiet street close to the subject land. It is zoned R2 Low Density Residential. It is larger in size than the subject land, however has comparable physical attributes. In particular, it falls to the rear, is predominantly flood liable, and is partially impacted by the location of a sewer service in the rear yard. The property was improved, with an older clad and tile dwelling which has since been demolished to make way for a modern attached dual occupancy development.
2. The sale was transacted in December 2021 in what Mr Konidaris considered to be stronger market conditions. Accordingly, although the sale was physically comparable to the subject land, Mr Konidaris relied on it only as secondary evidence.
3. This property was considered by Mr Konidaris to be superior to the subject land. He made an adjustment of -15% (-10% for size, 0% for development potential, 0% for location, 0% for flooding and -5% for market movement), thereby supporting a land value of $2,200,000 for the subject land.

Sale 8 (17 Olive Street, Ryde) - 581m2 / $2,400,000 analysed land value

1. Sale 8 comprised a rectangular shaped parcel located on a quiet street close to the subject land. It is zoned R2 Low Density Residential. It is similar in size to the subject land as is flood free with comparable dual occupancy potential. The property was improved with an older brick and tile dwelling which has since been demolished to make way for a modern attached dual occupancy development.
2. The sale was transacted in September 2021 in what Mr Konidaris considered to be stronger market conditions. Accordingly, it was relied upon by Mr Konidaris only as secondary evidence. If an adjustment were required for market movement, he considered that a -5% adjustment was required for the 1 July 2022 valuing year.
3. This property was considered by Mr Konidaris to be superior to the subject land. He made an adjustment of -10% (0% for size, 0% for development potential, 0% for location, - 5% for flooding and - 5% for market movement), thereby supporting a land value of $2,160,000 for the subject land.

Reconciliation of the sales

1. After adjustment for comparison, Mr Konidaris opined that a relatively broad value range of between $2,035,000 and $2,380,000 (around 16% spread) was supported for the subject land. He found that all but two of the sales were purchased for the purpose of attached dual occupancy redevelopment. The sales provided a guide to the intentions of the broader market when purchasing land of this nature in Ryde. Mr Kondiaris' opinion was that land purchased with older dwellings was primarily acquired for redevelopment.
2. Sale 2 (28 Watts Road) was the only sale analysed by Mr Konidaris that did not appear to have been purchased for immediate redevelopment. He included the sale due to its close proximity to the subject land (being on the same street), comparable dual occupancy potential, and its sale date relevant to the valuing year. He considered it to be reflective of a redevelopment site when viewed against the other sales, in particular Sale 6 (10 Ronald Avenue) which comprised similar two storey accommodation and has since been developed with a modern attached dual occupancy.
3. Mr Konidaris resolved any doubt in favour of the landowner Mr Johnston, and completed his analysis assuming that the improvements add some value to the subject land. This analysis on the basis of the retention of the improvements was inconsistent with the other sales analysed by him, supporting an artificially lower land value for the subject land. Based on the retention of the improvements, the analysed land value of Sale 2 ($2,035,000) supported the issued land value of the subject land ($2,020,000). When Sale 2 is viewed as a redevelopment site, Mr Konidaris considered Sale 2 to support a value well in excess of the issued land value of the subject land. Mr Konidaris also attached significant weight to Sale 3 (21 Thorn Street) which offers inferior development potential to that of the subject land. Mr Konidaris considered this sale to provide a strong lower limit of values for land in the location of the subject land.
4. Mr Konidaris concluded that Sales 1, 3 and 8 provide support for a land value of between $2,115,000 and $2,161,500 for the subject land. When including Sale 2, the range broadened slightly to between $2,035,000 and $2,161,500. Mr Konidaris concluded that Sales 4, 5 and 6 provide the upper limit of the range of supported values. Those sales support a land value of between $2,200,000 and $2,270,000 for the subject land. Mr Konidaris placed primary weight on the range provided by Sales 1, 2, 3 and 8.
5. On the assumption required by s 6A(1) of the VLA that land is vacant, Mr Konidaris concluded the highest and best use of the subject land is for the construction of an attached dual occupancy. He arrived at that opinion having regard to the dominant use of the surrounding land for new attached dual occupancy development, the land size and frontage of the subject land that would allow attached dual occupancy development, and the DCP controls that provide a potential exemption to the requirement of an easement for stormwater drainage.
6. A summary of Mr Konidaris' adjustments to the sales evidence is shown in the adjustment table provided in his report reproduced below:
7. Comparing the sales evidence on a block value rate, Mr Konidaris valued the subject land for the valuing year at $2,100,000.

Witnesses

1. The appellant was not required for cross-examination, and accepted at the hearing that he is "not a registered valuer".
2. The Valuer-General's expert Mr Konidaris was required by the appellant for cross-examination.

Mr Konidaris

1. The appellant asked Mr Konidaris how he valued the subject land higher than the Upside Realty property estimate of $1.6 million to 1.8 million as follows: Q. How could they have come to that valuation of 2.02 million dollars for unimproved capital value of the land? Three well known reputable real estate agents in the area value the house and land, which is the land with capital improvements on it, to be 1.8 million dollars? … A. The report provided is an automated model that pulls sales that with no real discrimination as to how comparable they really are to the subject property. In just going through the sales that are in the list you can see several that are well below the size that meet minimum lot size for duplex development. It doesn't discuss any of the frontages that relate to any of these properties and essentially the automated model is limited in accuracy by way of those features or those comparisons that need to be made to the subject. Even the report itself discusses a low confidence level in that valuation figure. If you look on page 1 generally if they find sales on the street or sales that are identical within very close proximity they increase the confidence level of the value that's been provided. … This report that's been provided that discusses a value of 1.6 to 1.8 million dollars doesn't give any of that comparison and it appears to not consider the potential of the property as a duplex site …
2. In relation to the extent of single occupancy properties in and around the subject land, Mr Konidaris gave the following evidence: Q. In doing your assessment of the properties, you mentioned the fact that the property could be dual occupancy, but when you look at the land use in and around the property that is being valued would it be fair to say that the properties on my side of the street are all single occupancy, up to the top of the hill? A. I can't recall all of the properties on the street … but I do remember that a lot of them were single residential, yes. … Q. … why weren't single occupancy dwellings used as a comparator when we look at what you've given in your exemplars. The two at 10 Ronald Avenue. … A. To answer your question. I actually have used one sale of a property that doesn't meet the requirements for a dual occupancy. It's my sale three at 21 Thorn Street. That property has a 12.19 metre frontage. It doesn't allow for dual occupancy development. … So that property was purchased for a single residential use but to go to the reason why I didn't use them as a majority. The subject land has a frontage that allows for dual occupancy development. I found properties that were similar in terms of their physical characteristics, being land area and frontage that meet these requirements that I thought were a better comparison of the market than using properties that have inferior potential to what the subject land does have.

Appellant's submissions

1. In contending that the Valuer-General's valuation for the valuing year was too high, and that the statutory valuation should be $1.4 million, the appellant referred to the following matters: 1. the Upside Realty property estimate based on similar homes and land was $1.6 million to $1.8 million. The online valuation was submitted to be "a credible source of information, because it's supplied by licenced real estate vendors … [who had] obligations and a duty … to provide these valuations correctly to the best of their ability"; 2. the Valuer-General was "meant to be valuing the unimproved capital value of the land only the house is a single story three-bedroom weatherboard cottage with AC Fibro Roof & house value only is $350k - $400k"; 3. the "description of the land is incorrect as it fails to include description of a major sewer main easement, such an encumbrance affects the land use and lowers the value". Orally, the appellant submitted: … the water board's already said with or without an easement over the line they have an absolute right to cut through anything that's built there and therefore, things can't be built there. So anyone doing a property title search or sending a plumber out to do an inspection would find that - I know that I can't build a garage in that backyard because of that very reason. These are not restrictions that are placed on the other properties. 1. the flood map (extracted above at [40]) shows the subject land "is severely affected by the 100 year flood"; 2. there is "no similar vacant land in the area to compare sales performance with [the subject land]"; 3. the subject land "traverses a natural watercourse and as such there can be no structures built beyond the rear of the dwelling (Council Development Restriction)". This was submitted to lower the value and limits the area of land use; and 4. he drew attention to his objection to the issued land value for 66 Adelaide Street, West Ryde for the valuing year 1 July 2022, and submitted that this "objection was accepted" and that "the same objection was put to the Valuer General … for [the subject land]" and was not accepted.
2. The appellant further submitted that the eight sales relied on by Mr Konidaris were "irrelevant" because: Mr Konidaris' approach and the Valuer General's approach has been to select some random properties of nearby sales to use them as a comparison. I don't think any of them are a fair comparison. None of the nearby properties are flood affected. None of the nearby properties have a sewer running across the backyard. None of the nearby properties have building restrictions on the backyard. And none of the nearby properties are living at that on the bottom of a hill.
3. In relation to Sale 5 (30 Goulding Street), the appellant submitted that this was an "irrelevant" sale because "it's on a fast corner. It's a long way away from Watts Road. It's certainly got other features which would impinge on its value, such as the massive traffic flow there."
4. Likewise, in relation to Sale 1 (14 Zola Avenue), the appellant submitted that this was an "irrelevant" sale for the following reasons: … its location, it's nowhere near the flood zone, and as well it has the massive advantage of being placed very, very, very close to the Small Street education precinct which has just been reopened. It's just been completely refurbished. So, the value of the Zola Street property being so close to the bus, so close to the main road, so close to the public school precinct that is an immeasurable value.
5. In relation to Sale 7 (7 Ronald Avenue) and Sale 6 (10 Ronald Avenue), the appellant submitted that those sales were not flood affected and therefore redevelopment of the subject land was "less desirable" in comparison. He said that "[i]f [the subject land] was developed front on, then the property closest to number 25 should be subject to flood … [y]ou would have to raise that building off the ground, which means that the costs of ... putting a dual occupancy … would be far more than what it is at number 7 and number 10 Ronald Avenue".

Valuer-General's submissions

1. Notwithstanding Mr Konidaris' opinion that the land value of the subject land is $2,100,000, the Valuer-General did not contend for higher than the issued land value of $2,020,000. The Valuer-General submitted that the comparable sales evidence in Mr Konidaris' report demonstrated that the issued land value is not too high. Further, Mr Konidaris undertook his valuation using comparable sales evidence, including the steps of accumulation, analysis, adjustment and application of potentially genuinely comparable sales, and Mr Konidaris' adjustments were "logical, clear and transparent": Tenstat at [35]-[36] (Parker AC).
2. In relation to the appellant's reliance on the Upside Realty property estimate, the Valuer-General submitted that online valuation is not undertaken for the purposes of s 6A of the VLA, and that the comparable sales methodology is the most widely accepted method of determining the value of land. In oral submissions, Ms Carpenter, counsel for the Valuer-General, referred to Mr Konidaris' evidence that "online property estimates … [provide] no utility", "can have absolutely no weight", and it not being "a valuation that's done under the Valuation of Land Act s 6A(1)."
3. In relation to the appellant's reference to the house value being "only…$350k-$400k", the Valuer-General submitted that in the hypothetical exercise in s 6A(1) of the VLA, the land being valued is assumed to be vacant, and the "real world" value of the improvements on the subject land is irrelevant. Ms Carpenter submitted as follows: The second point that Mr Johnston raised was that the unimproved capital value is what is supposed to be being valued, and he was concerned that because there is a single storey, three bedroom weatherboard cottage with asbestos fibro roof and house, and that value would only be 350,000 to 400,000, he said that the Valuer General has undertaken the exercise incorrectly. Unfortunately, that submission is entirely wrong, because under the Valuation of Land Act s 6A(1), the land being valued is assumed to be vacant, so the real-world value that Mr Johnston puts on his existing house on the value of the improvements are entirely irrelevant...
4. In relation to the appellant's submission concerning the sewer easement, the Valuer-General submitted that the appellant characterises what the Valuer-General understood to be the domestic sewer line as a "major sewer main easement". As is apparent from the title search annexed to Mr Konidaris' report, there is no easement registered on title. In any event, easements and restrictions on title are to be ignored in the valuation: Royal Sydney Golf Club v Federal Commissioner of Taxation [5] at 623 (Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ). There their Honours said: It seems evident that the fee simple mentioned must be taken as free from encumbrances which, if they impaired the value of the estate, nevertheless operated to confer upon some other person an estate or interest in land. Were it otherwise the taxable value of the land would be diminished but the correlative estate or interest would not come into tax unless by some chance it were an interest falling under some specific provision imposing liability.
5. The sewer service diagram for the subject land included in Mr Konidaris' report is reproduced below:
6. The sewer service diagram for 7 Ronald Avenue was also included in Mr Konidaris' report, and is extracted above under the heading Sale 7 (7 Ronald Avenue, Ryde - 657m2 / $2,590,000). The Valuer-General submitted that it can be seen from the comparable sales relied on by Mr Konidaris that there is no measurable difference when comparing affected sales and sales of properties without sewer impacts.
7. As to the appellant's submission concerning the flood affectation of the subject land, the Valuer-General referred to Mr Konidaris' consideration of the flood liability of the subject land and the comparable sales and the flooding adjustments made by him. Mr Kondiaris included in his report the following extract from the Ryde City Council Flood Planning Area Map which shows the subject land within the red rectangle:
8. Mr Konidaris also referred to the Draft Ryde Flood Study 2023. Ms Carpenter submitted that the Flood Risk Map overlaying the site tendered by the appellant was "entirely consistent with the mapping and shows that the subject land is affected by 1% AEP". Ms Carpenter also emphasised that Flood Risk Map relied on by the appellant "doesn't say that it's referrable to the valuing year".
9. As to the appellant's submission that there is "no similar vacant land in the area to compare sales performance [with the subject land]", Ms Carpenter submitted that based on Mr Konidaris' evidence, the local government is "keen to promote dual occupancies, unlike some other councils". Mr Konidaris analysed eight improved sales, six of which had the improvements demolished in order for the construction of attached dual occupancy development.
10. As to the appellant's submission concerning the natural watercourse traversing the subject land such as to lower the value of the land and limit the area of land use, Ms Carpenter submitted that Mr Konidaris considered the available features of the subject land as part of his analysis, and referred to the aerial photograph reproduced in his expert report extracted above at [16]. Ms Carpenter submitted that the aerial photograph does not show a "natural watercourse" contrary to the appellant's submission. The extract from DP30344 for the subject land is extracted above at [25]. It shows a drainage easement traversing Lots 3, 4 and a small area of Lot 2, but not over Lot 5, the subject land. The Valuer-General submitted that the impact of flooding was considered by Mr Konidaris and that flood mapping (simulation of 100 Year ARI Flood) demonstrates limited impact by flooding. Mr Konidaris considered flooding and he made adjustments for flooding.
11. Finally, as to the appellant's reliance on his objection to the issued land value for 66 Adelaide Street, West Ryde, for the valuing year 1 July 2022, which "objection was accepted" by the Valuer-General, the Valuer-General submitted that such reliance was unclear and that in any event, an objection to the valuation of other land is irrelevant and cannot be of assistance in determining the land value of the subject land.
12. In conclusion, the Valuer-General submitted that the evidence of Mr Konidaris demonstrated that the issued land value was conservative. Mr Johnston had presented no expert evidence and only gave "his opinion" to the Court. Accordingly, the Court could not be satisfied that the appellant had discharged his statutory onus as required under s 40(2) of the VLA.

Adjustments made by the Valuer-General's expert, Mr Konidaris

1. During the course of his oral evidence, the Valuer-General's expert Mr Konidaris made a number of concessions in relation to the adjustments he had made in his report.
2. On the last day of the hearing, the Court made an order for the Valuer-General to provide a sales adjustment table setting out the further adjustments accepted by Mr Konidaris during the course of his oral evidence (the sales adjustment table) (a copy of which is Annexure A to this judgment). The sales adjustment table provided: 1. an additional adjustment of -5% for size in relation to Sales 1 and 2; and 2. a positive adjustment of 10% for location in relation to Sale 5.
3. The result was a revised adjusted land value of $1,997,500 for Sale 1; $2,023,000 for Sale 2; and $2,509,500 for Sale 5. This would produce a range of land value for the subject land of between $1,997,500 and $2,509,500 (around 25.6% spread based on the lower value, and 20.4% based on the higher value). This is a much wider spread than that previously calculated by Mr Konidaris, and a much wider range of value than previously reported by Mr Konidaris (see [70] above).

Error in the sales adjustment table in relation to Sale 2 (28 Watts Road)

1. The amended sales adjustment table provided by the Valuer-General pursuant to order of the Court contained an error in relation to Sale 2 (28 Watts Road). In his report, Mr Konidaris identified the analysed land value for this sale as $2,260,000. The sales evidence in Mr Konidaris' report refers to a "[d]epreciated [added] value of improvements". It appears that the added value of the dwelling, carport and ancillary was adopted as $120,000 (rounded up). This amount of $120,000 was then deducted from the listed sale price of $2,380,000, consistent with the analysis step of the comparable sales approach. However, the sales adjustment table does not adjust the analysed land value for 28 Watts Road, instead adjusting the actual sale price thereby and removing the analysis step of the comparable sales approach. This has the effect of distorting the analysis and the adjustment for location when comparing 28 Watts Road to the other sale locations.
2. Annexure B to this judgment is a copy of the sales adjustment table which corrects the error in relation to Sale 2 (28 Watts Road) (and also amends the heading "Sale Price" to read "Analysed Sale Price").

Mr Konidaris' adjustment for development potential

1. I do not consider an adjustment for development potential to be appropriate as the only sale in relation to which such an adjustment was made by Mr Konidaris concerned Sale 3 (21 Thorn Street). I do not consider that sale to be reliable as a comparable sale for reasons given below at [129].
2. If I were to make an adjustment for development potential, it would need to be more specific in relation to frontage as the frontage of Sale 3 (21 Thorn Street) restricts its development potential, while the frontage of Sale 5 (30 Goulding Street), when taking all three street frontages into account, enhances its development potential.

Mr Konidaris' adjustment for size

1. I find the adjustments for size made by Mr Konidaris to be too generic and to lack any evident rationale. Accordingly, I reject those adjustments.
2. The sales analysed by Mr Konidaris were all considered on the basis of their development potential. Despite this, Mr Konidaris did not consider the achievable floor space for each site, opining that there was no difference in yield. He did not take into consideration that the yield of a dual occupancy site is fixed, and that the value considerations of such sites are more in line with single dwelling sites, rather than unit sites which can be compared on yield. There is greater amenity provided by an extra 50 to 60m2 of site for each dwelling due to the ability to achieve a larger dwelling and more yard space than can be achieved on a smaller site. This would thereby increase the resulting sale price and profit margin for the developer.
3. Under the LEP, cl 4.4(2), and the Floor Space Ratio Map, the maximum floor space ratio for the subject land and each of the sales considered by Mr Konidaris is 0.5:1.
4. The result is that Mr Konidaris did not consider that with a floor space ratio of 0.5:1, an extra 50 to 60m2 translates to an extra 25 to 30m2 of floor space for each dwelling, along with increased open space. The difference between the area of Sale 6 (10 Ronald Street) and the subject land would allow for an extra area for each dwelling of approximately 57m2. This could provide 3 large sized bedrooms, 2 average sized living areas, one very large living space, or a combination of extra bedrooms and living space along with the additional yard area. It would add substantially to the sale value of the finished dwellings.
5. I consider that it would be appropriate to determine the adjustment for size, on a block to block basis, by comparing the land area of the sales to that of the subject land, and thereby reflect the additional achievable floor space. In the Court's consideration of adjustments for size to each of the sales relied on as comparable by Mr Konidaris, I have applied the maximum permitted floor space ratio 0.5:1 to the land area of each of the sales. The adjustments for size based on a comparison of achievable gross floor area (GFA) are recorded in the Court's adjustment tables at [126], [128], [134], [136] and [138] below.

Mr Konidaris' adjustment for location

1. Nor do I accept the zero adjustment for location originally made by Mr Konidaris (and, subsequently in the sales adjustment table, increased to a positive adjustment of 10% for Sale 5 (30 Goulding Road). There is a clear difference between Sale 2 (28 Watts Road) and the locations of the other sales, irrespective of distance, reflected by resulting land values of the sales when other adjustments are applied.
2. The appellant referred to Sale 2 (28 Watts Road) as having a "massive" traffic flow compared to the other locations.
3. In cross-examination, Mr Konidaris confirmed that he did not enquire into the reasons for differences in sales prices, in particular between Sale 2 (28 Watts Road) and Sale 6 (10 Ronald Avenue). His enquiries did confirm that both sales were sold on the open market. He did not know what the difference would be from a locational point of view, but could see no significant features that would make the location of Sale 6 (10 Ronald Avenue) superior to that of Watts Road.
4. I find that Sale 2 (28 Watts Road) provides the only basis of comparison in order to determine whether Watts Road is an inferior location due to traffic and other considerations. It is in the same street as and is close to the subject land. It has also been confirmed as a genuine market sale occurring in the same market as the other sales.
5. In the absence of any evidence, such as commentary from agents, as to the reasons for the differing sale prices, it is reasonable to use Sale 2 (28 Watts Road) as a comparison against other sales to determine the level of adjustment for the locations of the other sales.
6. Accordingly, I have made adjustments for location based on a comparison of the sales evidence.

Mr Konidaris' adjustment for flooding

1. In the absence of any evidence or expert opinion in relation to the impact of costs resulting from flood affectation, I accept the adjustments for flooding made by Mr Konidaris.

Adjustment for market movement

1. In the absence of any evidence in relation to market movement, I likewise accept the adjustments for market movement made by Mr Konidaris.

Adjustment for the fall to the rear of the subject land?

1. As noted above at [46], to determine whether there was a market derived impact of a fall to the rear of the boundary, Mr Konidaris considered the market evidence in relation to Sale 1 (14 Zola Avenue) and Sale 2 (28 Watts Road). He described Sale 1 as a rectangular 664m2 shaped dual occupancy development site with a gentle fall to its rear boundary (away from the street), and Sale 2 as a similar sized 670m2 with a gentle rise to the rear allowing for gravity drainage to the street.
2. While dual occupancy was permissible in relation to Sale 2, it appears not to have been purchased as a dual occupancy development site, its continuing use of the improvements indicating that it was purchased for its continuing use, not redevelopment, thus rendering the comparison with Sale 1 of limited utility.
3. Ultimately, there was nothing in the evidence capable of proving either way that there ought to be a negative adjustment for the fall to the rear of the subject land.

Adjustment for the sewer line?

1. Mr Konidaris made no adjustments for the sewer line diagonally traversing the appellant's land as he considered the sewer lines traversing two of the sales - Sale 5 (30 Goulding Road) and Sale 7 (10 Ronald Avenue) - not to have impacted on their sale price, and not to have prevented the redevelopment of those properties.
2. On the site inspection, it was apparent that the sewer line, whilst not on title, exists, and runs in a diagonal direction underneath the subject land.
3. However, in the absence of any evidence as to the costs of accommodating the sewer line in any redevelopment, I am unable to make an adjustment for the sewer line.

The Court's valuation of the subject land

1. I proceed to make the following valuation of the subject land for the valuing year.

Sale 1 - 14 Zola Avenue, Ryde (analysed land value $2,350,000)

1. I accept this sale relied upon by the Valuer-General as comparable. While 14 Zola Avenue is located some distance from the subject land, it is still in the area bounded by Lane Cove Road, Bridge Road and North Road, making it in the same general locality. This sale was relied upon by Mr Konidaris as the basis for his opinion that there was no adjustment to be made to any of the sales based on their rise or fall from road level.
2. I make the following adjustments to Sale 1 (14 Zola Avenue): Sale 1 14 Zola Avenue Ryde Distance to subject land 1.4km Relevant zoning R2 Low Density Residential Land area 664m2 Frontage 15.27m Sale price $2,350,000 Sale date 02/06/2022 Analysed land value $2,350,000 Size -12% (based on comparison of achievable GFA) Location - 5% (quieter road with superior elevation) Flood affectation - 5% (expert valuers' opinion) Market movement 0% (expert valuers' opinion) Total adjustments - 22% Adjusted land value $1,833,000

Sale 2 - 28 Watts Road, Ryde (analysed land value $2,260,000)

1. I accept this sale relied upon by the Valuer-General as comparable. It is on the same street as the subject land, and is located near the subject land. It was marketed and sold through an agent in an open market transaction, available in the same market as the other sales. While an adjustment is required for size, I consider it to be the best comparable sale based on its proximity to the subject land.
2. I make the following adjustments to Sale 2 (28 Watts Road): Sale 2 28 Watts Road, Ryde Distance to subject land 120m Relevant zoning R2 Low Density Residential Land area 670m2 Frontage 15.24m Sale price $2,380,000 Sale date 07/11/2022 Analysed land value $2,260,000 Size -13% (based on comparison of achievable GFA) Location 0% (same street, 120m from subject land) Flood affectation - 5% (expert valuer's opinion) Market movement 0% (expert valuer's opinion) Total adjustments - 18% Adjusted land value $1,853,000

Sale 3 - 21 Thorn Street, Ryde (analysed land value $1,965,000)

1. I do not consider this sale relied upon by the Valuer-General to be comparable. 21 Thorn Street is located at a significant distance from the subject land, outside the area bounded by Lane Cove Road, Bridge Road and North Road. Its location differs from that of the subject land due to its proximity to a train station (Meadowbank Station) and a shopping centre (Top Ryde Shopping Centre), both in walking distance. It was thus in a better location, and there was no evidence to support any adjustment for location. Further, the locality of Sale 3 is dominated by single dwelling houses. The land area is larger than that of the subject land, with a larger achievable gross floor area, but it does not have the same development potential due to a frontage that does not allow an attached dual occupancy.

Sale 4 - 7 Meta Street, Ryde (analysed land value of $2,340,000)

1. Nor do I consider this sale sought to be relied on by the Valuer-General to be comparable. It is located at a significant distance from the subject land (2.8km) in an area on the other side of Lane Cove Road. There was no evidence to support any adjustment for location.

Sale 5 - 30 Goulding Road, Ryde (analysed land value $2,390,000)

1. Nor do I consider this sale sought to be relied on by the Valuer-General to be comparable. It is located 2km from the subject land, outside the area bounded by Lane Cove Road, Bridge Road and North Road. While identified as having a 15.24m frontage, on the site inspection it was readily observable that it in fact has two frontages to Salerwong Place, with a splayed corner, and one frontage to Goulding Street, with a second splayed corner. It has a frontage to a very busy road, to a side road off the busy road, and to a quiet road opposite a park. The wider frontage to Salerwong Place (not identified by Mr Konidaris) and the two additional smaller frontages (also not identified by Mr Konidaris) would make this site easier to develop as an attached dual occupancy despite its size, which is similar to that of the subject land. In oral evidence, Mr Konidaris said: … the main reason why I included it to be quite frank is to identify that properties that are subject to sewerage line over the lots can be developed with relative ease.
2. However, as explained above, I have made no adjustments for a sewer line, and do not consider this sale to be comparable.

Sale 6 - 10 Ronald Avenue, Ryde (analysed land value $2,800,000)

1. I accept this sale relied upon by the Valuer-General as comparable. It is located a short distance from the subject land in a side street location. It was marketed and sold through an agent in an open market transaction. It has a superior location, as evidenced by comparison to Sale 2 (28 Watts Road).
2. I make the following adjustments to Sale 6 (10 Ronald Avenue): Sale 6 10 Ronald Avenue Distance to subject land 230m Relevant zoning R2 Low Density Residential Land area 696m2 Frontage 15.24m Sale price $2,800,000 Sale date 31/03/2022 Analysed land value $2,800,000 Size - 16% (based on comparison of achievable GFA) Location - 12% (based on comparison to the sale at 28 Watts Road) Flood affectation - 5% (expert valuer's opinion) Market movement 0% (expert valuer's opinion) Total adjustments - 33% Adjusted land value $1,876,000

Sale 7 - 7 Ronald Avenue, Ryde (analysed land value $2,590,000)

1. I accept this sale relied upon by the Valuer-General as comparable. It is located a short distance from the subject land in a side street location. It has a superior location as evidenced by comparison to Sale 2 (28 Watts Road).
2. I make the following adjustments Sale 7 (7 Ronald Avenue): Sale 7 7 Ronald Avenue Distance to subject land 230m Relevant zoning R2 Low Density Residential Land area 657m2 Frontage 15.24m Sale price $2,590,000 Sale date 17/12/2021 Analysed land value $2,590,000 Size - 11% (based on comparison of achievable GFA) Location - 12% (based on comparison to the sale at 28 Watts Road) Flood affectation 0% (expert valuer's opinion) Market movement - 5% (expert valuer's opinion) Total adjustments - 28% Adjusted land value $1,864,000

Sale 8 - 17 Olive Street, Ryde (analysed land value $2,400,000)

1. I accept this sale as comparable. It is located less than a kilometre from the subject land in the area bounded by Lane Cove Road, Bridge Road and North Road, making it in the same general locality. It has a superior location as evidenced by comparison to Sale 2 (28 Watts Road). It has no flood issues and is of a similar size to the subject land.
2. I make the following adjustments Sale 8 - 17 Olive Street: Sale 8 17 Olive Street Distance to subject land 800m Relevant zoning R2 Low Density Residential Land area 581m Frontage 15.24m Sale price $2,400,000 Sale date 21/08/2021 Analysed land value $2,400,000 Size - 0% (based on comparison of achievable GFA) Location - 12% (based on comparison to the sale at 28 Watts Road, adjusted for size) Flood affectation - 5% (expert valuer's opinion) Market movement - 5% (expert valuer's opinion) Total adjustments - 22% Adjusted land value $1,872,000

Conclusion

1. The Court, as judicial valuer, doing the best it can with the evidence before it has concluded as follows in relation to the comparable sales sought to be relied on by the Valuer-General for the valuing year 1 July 2022: Sale Comparable or Disregarded Adjustments Total adjusted land value -12% (size) - 5% (location) Sale 1: 14 Zola Avenue Comparable - 5% (flood affectation) $1,833,000 0% (market movement) Total adjustments: - 22% - 13% (size) 0% (location) Sale 2: 28 Watts Road Comparable - 5% (flood affectation) $1,853,000 0% (market movement) Total adjustments: - 18% Sale 3: 21 Thorn Street Disregarded N/A N/A Sale 4: 7 Meta Street Disregarded N/A N/A Sale 5: 30 Goulding Road Disregarded N/A N/A - 16% (size) - 12% (location) Sale 6: 10 Ronald Street Comparable - 5% (flood affectation) $1,876,000 0% (market movement) Total adjustments: - 33% - 11% (size) - 12% (location) Sale 7: 7 Ronald Street Comparable 0% (flood affectation) $1,864,000 - 5% (market movement) Total adjustments: - 28% - 0% (size) - 12% (location) Sale 8: 17 Olive Street Comparable - 5% (flood affectation) $1,872,000 - 5% (market movement) Total adjustments: - 22%

1. It is apparent that Sales 1, 2 and 8 require the least adjustment, being 22%, 18% and 22%, respectively. They provide for an adjusted land value for the subject land in the range of between $1,833,000 and $1,872,000. The adjusted land value for Sale 7 is also within this range, while the adjusted land value for Sale 6 is slightly above this range.
2. Sale 2 (28 Watts Road) is located in the same street as the subject land, is close to the subject land, and requires the least adjustments. I consider the land value of the subject land to be closest to that for Sale 2. Sale 2 has an adjusted land value of $1,853,000.
3. Accordingly, in accordance with s 6A of the VLA, I consider the land value of the subject land to be $1,850,000.

Orders

1. The Court has determined that the land value of the subject land for the valuing year 1 July 2022 is below the value determined by the Valuer-General. Accordingly, the appeal is upheld, and the Court revokes the decision of the Valuer-General. The Court makes the following orders: 1. The appeal is upheld. 2. In accordance with s 6A of the Valuation of Land Act 1916 (NSW), the land value of Lot 5 DP 30344, known as 27 Watts Road, Ryde, as at 1 July 2022 is $1,850,000.

Endnotes

1. Perisher Blue Pty Ltd as the Trustee for the Snow Trust v Valuer General (NSW) [2023] NSWLEC 41 (Perisher Blue) at [76] and [86] (Duggan J); Kogarah Town Centre Pty Limited v Valuer General (No 3) [2014] NSWLEC 1124 (Kogarah) at [77] (Moore SC and Brown C); Olefines Pty Ltd v Valuer-General of New South Wales (2018) 228 LGERA 407; [2018] NSWLEC 18 (Olefines) at [151]-[152] (Molesworth AJ).
2. Kogarah at [86] (Moore SC and Brown C).
3. [2012] NSWLEC 1361 (Parker AC); applied in SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7 at [123] (Pain J). See also Adams v Valuer General [2014] NSWLEC 1005 (Parker AC).
4. [2018] NSWLEC 59 at [13]-[19] (Robson J).
5. (1955) 91 CLR 610 at 623; [1955] HCA 12 (Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ); Gollan v Randwick Municipal Council [1961] AC 82 at 100-101; (1960) 6 LGRA 275 at 282; [1960] 3 All ER 449; see also Perilya Broken Hill v Valuer General (2015) 10 ARLR 235 at 247, 254; [2015] NSWCA 400 (Leeming JA). 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: 29 August 2024