The value of the land
9 The particular valuation made by the Valuer General under cl 5, which is the subject of appeal, is dated 30 April 2005 and is said to be the unimproved value of the land as at that date.
10 As noted above, the parties each relied upon the expert evidence of a valuer: Mr T A Large for the applicant, Mr K P Newton for the Valuer General and Mr K W Wood for the Joint Committee. Following the exchange of valuation reports, Mr Newton changed his valuation from $9.3 million to $7.91 million, having regard to a particular sale identified by Mr Large.
11 The valuers agreed that the comparable sales method of valuation should be adopted and, in so doing, it was appropriate to use a rate per square metre.
12 The real difficulty which arises with the comparable sales method in this case is that there are no truly comparable sales. The valuation has to be made on an assumption that the land is to continue to be used in connection with a crematorium: cl 5(3)(a) of Sch 3. In the absence of sales of land for use as a crematorium, the valuers initially relied upon sales of industrial land and then adopted a discount to reflect the limitation as to use of the subject land. This was the initial approach of the Valuer General's valuer, Mr Newton in arriving at a rate of $100 per square metre for the subject land, resulting in his valuation of $9.3 million. Mr Newton's attention was subsequently drawn to a sale of a parcel of land at Matraville, identified by the applicant's valuer, Mr Large, which was acquired by the Eastern Suburbs Crematorium for an additional area for its use. Mr Newton then amended his valuation to $7.91 million.
13 Apart from the sales of industrial land and the sale at Matraville, a number of other sales were considered by the valuers, but none of them could be described as comparable to the Rookwood crematorium site. My reasons for disregarding them are as follows.
14 No. 21A School Drive, Tomago. The land, comprising 4,305 square metres, was purchased by Hunter Cremations Pty Ltd as a crematorium for the incineration of bodies, without the trimmings of a chapel, vestries or areas of worship or remembrance. The land was cheap industrial land not connected to a cemetery.
15 Lot 1 Weerona Road, Strathfield. This land has an area of 7,120 square metres which almost abuts the southern boundary of Rookwood Cemetery and comprised a closed road purchased by Strathfield Golf Club from the Department of Infrastructure Planning and Natural Resources, presumably for the purposes of the club.
16 Nos 221-224 Church Lane, Prospect. This land has an area of 3.1705 hectares upon which there is a heritage item - St Bartholomew's Church - and its associated cemetery. The church was restored with funds provided by Blacktown City Council. The land was purchased by the council for its heritage significance and is not intended for use as either a cemetery or a crematorium, neither does it seem that there is sufficient land upon which to erect a crematorium.
17 No. 230 Western Road, Kemps Creek. This land has an area of 8.18 hectares and was purchased by Liverpool Catholic Club for use as a lawn cemetery. Although purchased in 1996, there is no proposal to erect a crematorium. It is not comparable to the Rookwood crematorium site - it only has about two or three burials a week, compared with about 50 a week at Rookwood; and it is in a somewhat remote rural area, unlike Rookwood, which is close to the geographical centre of the metropolitan area.
18 No. 6 Richardson Road, Narellan. This was an existing cemetery adjacent to the local Anglican Church. It is still used as a cemetery, but with less than one burial a week. Its area of 1.036 hectares and its location adjacent to a school suggests that there would be limited potential for the construction of a crematorium, chapel and car parking and no consent for such has been sought since its sale in October 2004.
19 As noted above, I do not regard any of these sales as being comparable to the subject land and I thus disregard them. The only sale that is remotely comparable to the subject land is No. 12 Military Road, Matraville, purchased by the Eastern Suburbs Crematorium in November 1995. Although the sale is about nine years before the relevant date, it can with appropriate adjustment for time from the date of the sale to the relevant date, be used as a comparison. The land area of 5.11 hectares is not greatly dissimilar from the land area of the Rookwood crematorium. Importantly, it was purchased by the Botany Cemetery Trust as an addition to its existing crematorium site and is now used by it for its offices, for memorial gardens for cremated remains and for burials.
20 It was suggested, both in evidence and in submissions, that the use of land for burials was a more valuable use than a use for memorials and memorial gardens for cremated remains. There is no evidence, however, to support this assertion. I would have thought that the converse was the case, since a far greater number of cremated remains can be accommodated in the form of memorials for cremated remains and in memorial gardens than in single burial plots.
21 I regard the use of sales of industrial land as too unreliable in this case. There is no logical basis for adopting the particular discount for such sales, adopted by Mr Large and Mr Wood (of 60 per cent and 50 per cent respectively), having regard to the restricted use of the subject land. In Ashfield Municipal Council v Roads and Traffic Authority of New South Wales (2001) 117 LGERA 203, the Court of Appeal accepted the proposition that it is necessary to take into account, insofar as they were relevant, any restrictions placed upon the use of the land (par [100]). The Court went on to hold, however, that the primary judge had erred in applying a two-thirds discount, which had been applied in Hornsby Shire Council v Roads and Traffic Authority of New South Wales (1998) 100 LGERA 105, without considering the particular facts of the case before him (pars [109] and [113]).
22 In making an adjustment for time from the date of the sale at Matraville to the relevant date, Mr Newton adopted the closest class of real estate, namely the movement in prices of industrial land, since both industry and crematorium are business uses. Mr Large, on the other hand, adopted the annual changes in the bond rate market. There is nothing, however, to suggest that the bond rate is related to real estate values. Since the only evidence of the percentage increases in real estate is that which was furnished by Mr Newton, I accept his figures for the adjustment for time. The Matraville sale showed a rate of $36.15 per square metre, which, when adjusted for time in the manner adopted by Mr Newton, results in a rate of $85 per square metre at the relevant date; that is, a valuation for the subject land of $7.91 million.
23 To repeat, although the passage of time gives rise to uncertainties, the sale of No. 12 Military Road, Matraville, to the Eastern Suburbs Crematorium is the only remotely reliable indicator of value for a number of reasons: it is the only sale of land which was purchased for a crematorium use; it was vacant land; it is adjacent to an existing crematorium and a large cemetery precinct (Botany cemetery); it requires only one adjustment - for time; and it is within the metropolitan area. It was suggested that some allowance should be made for the need for filling and retaining walls at the Matraville site. However, there would be no need for filling if the land were to be used for memorials for cremated remains, and landscaping and gardens would in any event have to be provided.
24 I therefore determine the unimproved value of the subject land at the relevant date, 1 July 2005, to be $7.91 million.
25 The final orders of the Court are:
- The appeal is allowed.
- The first respondent's valuation of the general crematorium site at Rookwood dated 30 April 2005 is set aside.
- The Court determines the value of the general crematorium site at Rookwood in accordance with cl 5(3) of Schedule 3 to the Rookwood Necropolis Act 1901, as at 1 July 2005, at $7.91 million.
- The exhibits may be returned.
- The question of costs is reserved.
I hereby certify that the preceding 25 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.