Martinovic v Valuer General

5 Mr Martinovic made application to the Court for trial by a judge and jury which was dismissed (Martinovic v Valuer General [2008] NSWLEC 119). 6 Mr Martinovic made application to the Court for the hearing not to continue before Acting Commissioner Parker which was dismissed (Martinovic v Valuer General [2008] NSWLEC 144).

7 The hearing resumed and concluded in the Land & Environment Court on 2nd May 2008.

8 Section 40(2) of the Act states: "On an appeal, the appellant has the onus of proving the appellant's case."

The Subject Property 9 The subject property is located on the southern side of Torkington Road, situated approximately midway between Londonderry Road and Nutt Road. It is a regularly shaped block, having an area of 2.024 hectares, with a frontage to Torkington Road. Improvements comprise a brick residence with outbuildings, situated close to the Torkington Road frontage.

10 Approximately 85% of the subject property is subject to flooding, being within the 1 in 20 year flood line. Mr Martinovic stated that the subject property had been flooded at least 42 times during his occupation. Flooding is of a ponding nature, rather than flowing, being several centimetres deep and taking several days to drain away after heavy rainfall during which time access to the subject property is severely curtailed. The residence is located within that section of the subject property which is subject to flooding.

11 The subject property is traversed by two creeks in the north eastern corner.

The Evidence 12 Mr Martinovic tendered as evidence an undated valuation report by Mr Harrison, Registered Valuer, concluding that the Land Value under Section 6A of the Act was $375,000 as at the base date.

13 Mr Martinovic also tendered as evidence two letters from real estate agents, dated 8th and 12th November 2007, respectively, advising that the subject property including improvements may realize $400,000-$460,000 at the dates of the letters.

14 Mr Watt, Registered Valuer, gave expert evidence on behalf of the Valuer General. He concluded that a Land Value under Section 6A of the Act, at the base date, of $506,000 could be supported.

15 Mr Harrison submitted four comparable sales and Mr Watt ten comparable sales.

16 Both parties submitted a comparable sale at 69 Torkington Road which was inspected externally.

17 Both parties submitted comparable sales at 32 Reynolds Road and 31 Carrington Road, which were not inspected externally.

18 Mr Harrison further submitted a comparable sale at 2 Purcell Road, which was not inspected externally.

19 Mr Watt further submitted a comparable sale at 46 Nutt Road, which was inspected externally.

20 Mr Watt further submitted comparable sales at 24 Reynolds Road, 480 The Driftway, 21 Bowman Road, 138 Macpherson Road, 871 Londonderry Road and 42 Torkington Road, which were not inspected externally.

Consideration of the Evidence 21 I consider the comparable sale at 69 Torkington Road submitted by both parties to be a directly relevant comparable sale.

22 I consider the comparable sale at 46 Nutt Road submitted by Mr Watt to be a directly relevant comparable sale.

23 I consider the comparable sales at 32 Reynolds Road and 31 Carrington Road submitted by both parties to be indirectly relevant comparable sales.

24 I consider the comparable sale at 2 Purcell Road submitted by Mr Harrison to be an indirectly relevant comparable sale.

25 I consider the comparable sales at 24 Reynolds Road, 480 The Driftway, 21 Bowman Road, 138 Macpherson Road, 871 Londonderry Road and 42 Torkington Road submitted by Mr Watt to be indirectly relevant comparable sales.

26 The directly relevant comparable sale at 69 Torkington Road, submitted by both parties, comprises 1.088 hectares land area upon which is situated a dwelling being directly opposite the subject property and being subject to flooding originally extending to 100% of the land area. Since acquisition, the current owners have constructed an elevated driveway to provide access to the dwelling during periods of flooding. The property sold for $610,000 at 27th January 2006, with the sale analysed to show a rate of $39psm land area by Mr Watt and a rate of $42psm land area by Mr Harrison. Mr Harrison contended in his undated valuation report that this was an "out of line" transaction. Mr Watt gave evidence that, in his opinion, the sale was supported by other sales in the local area and was not an "out of line" transaction.

27 The directly relevant comparable sale at 46 Nutt Road, submitted by Mr Watt, comprises 1.994 hectares land area upon which is situated a dwelling being within short driving distance of the subject property. Mr Watt gave evidence that the property was subject to some flooding but to a lesser extent than the subject property. The property sold for $670,000 at 17th November 2006, with the sale analysed to show a rate of $24psm land area by Mr Watt.

Findings 28 The subject property is seriously affected by flooding which, given the current use of the land and construction of the improvements on the land, causes considerable inconvenience and frustration to the owner occupier, Mr Martinovic and limits the use of the subject property.

29 The subject property may be difficult to sell and require an extended marketing period, with prospective purchasers greatly concerned about the extent of flooding. However, the sale of flood prone land after an extended marketing period is possible, as evidenced by the sale of 69 Torkington Road directly opposite the subject property.

30 The subject property is, however, adversely affected by the two creeks that traverse the north eastern corner of the site.

31 Mr Martinovic is not a Registered Valuer and appeared to have difficulty understanding the process of analyzing sales of comparable properties through the deduction of an allowance for depreciated improvements.

32 Mr Martinovic states in his letter dated 24th April 2008 that Mr Harrison has not taken into account, in his valuation report, the impact of the two creeks traversing the subject property.

33 Mr Martinovic's opinion of the Land Value was unclear and ranged between "worthless", $250,000, and $375,000 as stated in Mr Harrison's valuation report, though Mr Martinovic advised he considered that this was too high.

34 Mr Watt presented a logical analysis of the comparable sales evidence and application of his findings to the subject property. Mr Watt further explained how the comparable sales evidence may be reconciled to be consistent with the agent's opinions tendered as evidence by Mr Martinovic.

35 Neither 69 Torkington Road nor 46 Nutt Road are subject to the adverse effect of two creeks traversing the site, which is a consideration in the assessment of Land Value for the subject property.

36 The sale of 69 Torkington Road analysed to $39psm-$42psm is considered highly informative, being directly opposite the subject property, subject to a greater level of flooding than the subject property and a transaction close to the base date but a significantly smaller site than the subject property.

37 The sale of 46 Nutt Road analysed to $24psm is considered informative, being close to the subject property, subject to a lower level of flooding than the subject property, a transaction close to the base date and of a similar size to the subject property but further from the settlement than the subject property.

38 My consideration of the various aspects of the selected comparable sales leads me to conclude that the Land Value of the subject property assessed by the Valuer General is justifiable.

39 Having regard to the evidence tendered, the cross examination of Mr Watt and the summation presented, I consider Mr Martinovic did not prove his case as required by Section 40(2) of the Act.

40 The orders of the Court - 1. The Appeal is dismissed. 2. The Land Value of $506,000 as at the base date of 1st July 2006 for the property at 66 Torkington Road, Londonderry is confirmed. 3. No Order is made as to costs. 4. The exhibits are returned.

      Dr David Parker
      Acting Commissioner of the Court
      ljr

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.