Wu v Valuer General

Judgment 1SENIOR COMMISSIONER: These seven appeals concern statutory valuations for the years between base date 1 July 2005 and base date 1 July 2011 for a property known as Lot 2506 in Deposited Plan 752038 located in the suburb of Belrose within the local government area of Warringah Shire. The site is one that has an area of 1.64 hectares. It has an irregular shape. Approximately the front forty per cent or so fronting the bitumen sealed Linden Avenue is cleared and there is an additional smaller area of clearing that extends along the northern boundary following the line of an electricity transmission easement that provides that northern boundary. It has a slight slope towards the north west (as observed during the course of our site view). 2During the course of the site (view which took place on the first day of the hearing), I observed the location of a pegged out (to be inferred as pegged out by a surveyor) house site on the land which the applicant, Mr Wu, informed me had been pegged out prior to the lodgement of a development application in 2008, one made to Warringah Shire Council. 3It was Mr Wu's evidence that the extent of the clearing also predated that time. Those are potentially matters that might become relevant if it were necessary for me to determine whether or not development consent had lapsed with respect to the site. 4Mr Wu has lodged objections for each of the years and has appealed to the Court with respect to the result of each of those seven objections. In four of the objections, they being for the 1 July 2005, 2006, 2007 and 2008 valuation years, the objections did not result in any alteration to the value. That was a determination made by the Valuer General after considering a review undertaken by Mr T S Webster, a licensed valuer of considerable experience. On the basis of Mr Webster's review, the Valuer General amended three of the valuations downwards, however Mr Wu remains dissatisfied with the resultant valuations and has appealed to the Court. He contends for statutory valuations for each year, the citation of the year being by reference to a base date of 1 July in that year (without needing to repeat that on each occasion), of $228,000 in 2005, $228,000 in 2006, $219,000 in 2007, $251, 500 in 2008, $247,500 in 2009, $630,000 in 2010 and $647,500 in 2011. 5Section 40 of the Valuation of Land Act 1916 does two important things with respect to each of these seven proceedings. 6First, in s 40(1), it gives me, amongst other things, a general power (provided I have proper reasons for doing so) to substitute my opinion for that of the Valuer General. It also leaves me, amongst other things, with the option to leave the Valuer General's statutory valuation undisturbed. 7Importantly for these proceedings, s 40(2) expressly makes it clear, as I pointed out to Mr Wu at the commencement of the court hearing, (doing so because he is a self represented litigant and is therefore entitled to procedural assistance from me), that the burden of proof falls squarely on him to justify why each of the seven valuations should be upset in some fashion, rather than placing any burden on the Valuer General to justify the valuations that have been determined by that officer. 8I was also obliged to assess all of the seven sets of proceedings on the basis of evidence that is properly before me and that has some relevant probative value and is permitted to be taken into account by earlier decisions of the Court that provide either binding authority on me or guidance as to how I should undertake the tasks with which I am now charged. 9The obligation is to assess what is the valuation of the land for its highest and best use. 10Because Mr Wu is a self represented litigant, I explained to him, during the course of the site inspection, the difference between evidence and submissions and I indicated to him (with the concurrence of Ms Carpenter who appears as counsel for the Valuer General) that I did not require Mr Wu to differentiate between evidence and submissions but that I would do so in the course of my deliberations and that it would assist him, in the presentation of his material, if he did not need to make that distinction. 11It is Mr Wu's proposition that the highest and best use of the land is as vacant land. Whilst there is some authority in the Newcastle Hospital case that holding land as vacant land can constitute a use, it has been held by Bignold J in Ulan Coal Mines Ltd v Mudgee Shire Council (unreported, 11 January 1988) that a passive use such as holding land as vacant land will be displaced if there is an actual use - such as there being something that has been applied for but not necessarily commenced, that being development consents for houses, matters to which I will return shortly. 12However it is Mr Wu's contention that, as a consequence of several refusals of development applications for business use of the land and because of what he considers to be the affectation of the land because of its proximity to the Belrose Waste and Recycling Centre, the best use of the land for his purposes is to leave the land vacant until the Belrose facility operated by Waste Service New South Wales closes - if it does, as anticipated, in 2014. 13This is because of what Mr Wu regards as the unacceptable odour and dust impacts on the land rendering it unable to be developed profitably for residential purposes. 14If I were to conclude, he says, that residential is the appropriate highest and best use, he says that I should have regard to the statutory valuations of Lots 2593 and 2505, being parcels of land immediately adjacent or one removed to the north and northeast of the property. 15In a bundle of documents that were tendered at the commencement of the proceedings and became exhibit A, he tendered (and I permitted the tender over objection by Ms Carpenter) amongst other things a range of statutory valuations for those and other properties. 16In Flack v the Valuer General (1952) 18 LGR 157, Sugarman J dealt with the question of whether or not one should have regard to other statutory valuations in dealing with appeals of this type. He said, in those proceedings, that it was not appropriate to have regard to other statutory valuations but that it was preferable to have regard to comparable sales. 17The High Court, in Maurici v the Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, has endorsed the proposition that the preferable method of undertaking a valuation is to have regard to relevant comparable sales. 18Indeed, as Mr Webster conceded during the course of his evidence, the High Court has confirmed that even a single comparable sale can provide a sufficient basis for undertaking an appropriate valuation assessment. 19Whilst there are other appropriate valuation methodologies that arise in other circumstances (such as the capitalisation of rents or the hypothetical development model), neither of those is the appropriate model to be considered in the present circumstances. 20I have proceeded on the basis of considering this range of appeals on the comparative sales evidence basis upon which Mr Webster has given evidence. 21As I will return to later, Mr Webster has analysed a range of sales with respect to each of the relevant base date years and has for the years 2006 through to 2011 relied on sales in the Belrose locality for that purpose. For 2005 he had no relevant Belrose sales available to him, he having concluded - as he said in response to a question from Mr Wu - that a sale at 18 Wyatt Road relevant to the 2005 base date year was not an arm's length transaction and was not appropriate to be considered, although a subsequent resale of this site relevant to the 2008 base date year was taken into account by him. He also provided a range of sales at other localities, a matter to which I will return shortly. 22Section 6A(1) of the Valuation of Land Act requires: ...a determination of the capital sum which the fee simple of the land might be expected to realise if offered for sales on such reasonable terms and conditions as a bona fide seller would require, assuming that improvements if any thereon or pertaining thereto other than land improvements and may be required by the owner or the owner's predecessor's in title had not been made. 23That is the basis upon which I turn to consider the highest and best use of the land, that being the foundational assumption necessary for undertaking a s 6A(1) valuation. 24Mr Wu presses the proposition that the site does not comply with the minimum allotment standards contained in the Warringah Local Environmental Plan 2000 and that, as a consequence, it is not appropriate to regard the highest and best use of the land as being for a residence, that being the assumption upon which Mr Webster's evidence is founded. Mr Wu sought leave of the Court to adduce expert town planning evidence on this point, (that is on the interpretation of statutory planning instruments). That application was heard and refused by Craig J on 26 April 2013, (see Wu v Valuer General [2013] NSWLEC 56). His Honour's decision was based on the proposition that it was the role of the Court to interpret statutory instruments and not the role of an expert witness to provide evidence on such matters. 25In these proceedings, the Valuer General has tendered copies of three notices of determination of development applications resulting in development consents being granted by Warringah Council for development of a single residence on the site. 26The first of those was a determination made on 11 October 2004 granting Development Consent 2004/0389DA operating from 11 October 2004 and lapsing on 11 October 2009. That consent was not acted upon but during its currency, on 12 March 2009, Warringah Council gave a development consent in Development Application 2008/1000 for the construction of a dwelling on the site with that consent to operate from 24 March 2009 to 24 March 2012. Relevantly, the 2009 consent overlaps that consent, that is the granted consent but not acted upon that was given in 2004. 27The 2009 consent was also not acted upon and a further development application was made, Development Application 2009/1024 that was determined by the Council on 30 March 2010 for a single dwelling on the site. That development consent operated from 8 April 2010 and has a date of lapsing of 8 April 2013. 28I am satisfied that the effect of those three development consents is that continuously, for all seven relevant base dates in these proceedings, there has been a development consent alive for this site that permits the erection of a dwelling on it. 29I am satisfied, as a consequence of that continuum of development consents, that the highest and best use for the site is as a single residential dwelling in a semi rural setting, that being the opinion of the highest and best use that is expressed by Mr Webster. 30However, the question then arises is to how one should embark on analysis of the valuation by using the comparable sales method, including whether or not sales outside the Belrose area should be regarded as sufficiently comparable to be taken into account when there are sales within the Belrose area or, for the 2005 base date year, whether there is a sufficient consistency of pattern in the valuations to infer that the deduced value adopted by Mr Wester for 2005, is sufficiently consistent with the pattern of valuations thereafter to adopt the 2005 deduced value without there being a sale to provide a foundation for it. 31Mr Wu has tendered an extract from a website that profiles house price rentals by suburb that shows that: