In his oral evidence, Mr Field emphasized that demolition of Number 60, while exposing the glass, would not enable an additional bedroom and garage to be built without a real problem of compatibility of design and materials being confronted, any solution of which, as well as of the impact on privacy, would be likely to be difficult and costly.
20 In his original valuation done as at 25 April 2005, Mr Field analysed fifteen recent sales in the area of Bellevue Hill and Rose Bay, concluding the most relevant comparable sale was a sale of 56 Balfour Road Bellevue Hill in April 2005 at $3.625 million. This was a well presented property with six bedrooms plus study, kitchen, lounge, dining, family room, three bathrooms, powder room, laundry, terrace and double garage. Mr Field considered 56 Balfour Road was superior to the subject property, the fair market value of which he assessed at that time as being $3.4 million.
21 On 24 August 2005, following an exchange of contracts (not settlement) in respect of 48 Balfour Road at a price of $4.65 million, Mr Field reviewed his earlier valuation and updated it to $3.625 million. He expressed the opinion that the subject property is inferior to 48 Balfour Road and would remain so even if Number 60 were demolished and expensive additions made to Number 62. He pointed out that 48 Balfour Road is a modern double brick house with four bedrooms, kitchen, lounge, dining, family room, study, four bathrooms plus powder room, laundry, two terraces, double garage (with internal access), pool and landscaped garden. It is indeed vastly superior, being both larger and more appealing than the subject property, looks far better from the street and is a finished project.
22 In disputing Mr O'Connor's valuation of $4 million, Mr Field, both in writing and in oral evidence, asserted there was no comparable sale in this area of a three bedroom house for $4 million. Mr O'Connor did not take up the challenge of providing any. According to Mr Field the market in this area places a value on four bedrooms and more. Under cross-examination, Mr O'Connor, while disputing the importance of four or more bedrooms, conceded he had looked for, and failed to find, a comparable sale of a three bedroom house at in excess of $3 million.
23 Mr O'Connor, like Mr Field, is a qualified valuer. Unlike Mr Field, who lives and works at Rose Bay, Mr O'Connor has his office at Parramatta, although he practises widely in the Sydney area. His initial report was dated 18 May 2005. He analysed five sales, including 56 Balfour Road and also 33 Latimer Road. The Latimer Road property sold for $4 million. Mr O'Connor referred to it as "a newly refurbished 1920's single storey brick and terracotta tile residence of approximately 330 square metres" with four bedrooms, three bathrooms, lounge/dining room, rumpus room and "solar heated in-ground pool". He considered it was comparable in location to the subject property, but the land was a "larger superior allotment." "Overall," he concluded, it was a "superior allotment and refurbished 1920's dwelling, although lacks potential of subject property." In his oral evidence, he said it was "the most directly comparable" of the five properties he considered. In addition to the features described, and unlike the subject property, it had a detached double carport. Directly asked whether it was "a superior property … to the subject property", Mr O'Connor conceded it was, although he added some qualifications including that it was "very difficult to compare with a new contemporary residence."
24 In a supplementary affidavit sworn 12 August 2005, Mr O'Connor asserted that 48 Balfour Road was "a comparable property to Balfour Road on the basis that it is of comparable location and land area, although it has a smaller frontage." "It has," he continued, "a double garage with internal access, walk-in pantry, rear family room, 4 bedrooms with large dressing room to master bedroom and 2 ensuite bathrooms" (there are actually four bathrooms in all). In a further supplementary affidavit sworn 22 September 2005, Mr O'Connor gave additional details of a number of sales he had considered, acknowledging that 48 Balfour Road was "superior to the subject property in terms of accommodation", with the qualification that it was on a smaller lot with a smaller frontage and had "a relatively bland street appeal and a narrow double garage for a property in this price bracket." Mr Field totally rejected this muted comment. He said he had inspected 48 Balfour Road and "believed this property to be superior in terms of aesthetic appeal, quality of construction, marketability, it has a larger home, it has a better home, it has a finished home … a far superior property."
25 Generally, Mr O'Connor's approach drew heavily upon his view that 62 Balfour Road would have superior qualities once Number 60 has been demolished and a large garage and additional bedroom or bedrooms have been added to Number 62. He assumed the additional building work could be done at a much lower cost per square metre than the cost of the existing building. And he was not much perturbed by the problems of design, privacy and the effect on the market of an incomplete project, to which Mr Field drew attention. In my opinion, Mr Field's assessment of the situation was more practical and his reasoning was more persuasive. A satisfactory addition to Number 62, as it stands, would have to be compatible with the nature of what is there, and inevitable problems would arise, the solution to which would be unlikely to be cheap.
26 I have come to the conclusion that I should accept Mr Field's valuation. It follows that the appropriate equitable charge is one in the sum of $775,000. The only formal order I make at this stage is that the plaintiff bring in, on a date to be fixed, short minutes of orders appropriate to be made in the light of these reasons.
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