Property and Real Estate Gazette (2nd edition)

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Property and Real Estate Gazette
• Whether the evidence of the state’s valuer ought to
have been accepted;
• Whether the Land Court’s amount awarded for
‘disturbance costs’ was correct; and
• Whether the Land Court’s decision to award interest
on the compensation was exercised correctly.
Valuation of the land
Appellants – interest of an adjoining
owner
Inglis submitted that the Land Court erred by failing
to consider the interests of the Darwalla group of
companies (Darwalla) as a potential purchaser. Inglis
argued at the time of the resumption of the land, a
neighbouring poultry business, operated by Darwalla,
was interested in purchasing the land. Inglis contended
that Darwalla’s interest as a potential purchaser of the
land increased its value above the rural site value,
citing various factors to demonstrate Darwalla’s
interest, such as the fact that Darwalla was in a mode
of expansion as a poultry business and the land offered
various benefits due to its location for such a business
to be immediately established.
The valuer who provided valuation evidence on behalf
of Inglis had concluded that he considered the ‘highest
and best use of the land’ to be as a greenfield site
broiler farm and that on that basis, the value of the
land was the amount that Darwalla was prepared to
pay, above market value, for its other likely use, being
a ‘mixed lifestyle/rural home site with some associated
grazing and/or cultivation’.1 The valuer, in his report for
the landowner, provided 12 specific reasons for that
view.2 These reasons largely related to Darwalla’s
particular circumstances, aspects of its business and
prior conduct.
In making a determination as to the land value of
the resumed land, which the valuer adopted to be
$2.9 million, the valuer adopted 2 different valuation
methods:
• A ‘direct comparison’ approach which relied on
sales of properties which the valuer considered
to be comparable, taking into account his opinion
that Darwalla was prepared to pay a premium
above market value. In determining the premium,
he examined five purchases made by Darwalla
between 2004 and 2011, thereafter resolving that
the value of the resumed land would have been for
a value slightly more than $2.9 million3; and
• An approach based on the assumption that Darwalla
would develop the resumed land for a chicken
farm with a capacity of 1.44 million birds. For this
approach, the valuer analysed five purchases of
property by Darwalla which had indicated to him
that an overall rate of $2 per bird could be adopted
resulting in a valuation of the resumed land at $2.9
million.4
The valuer who gave valuation evidence on behalf
of the state used a valuation approach which did not
make any allowance for Darwalla’s potential interest in
the resumed land.
The Development Manager for Darwalla had given
evidence that Darwalla had approached Inglis in
relation to the potential purchase of the resumed land
during the late 1990’s, but would probably not have
been interested in purchasing the resumed land in
December 2007. This was however inconsistent
with a statement recorded in the Appellant’s valuer’s
report by which a director of Darwalla stated that if
the resumed land ‘had been put on the open market
in 2007 (Darwalla) certainly would have expressed an
interest’ in it.5 Inglis sought to rely on this statement in
the appeal (although Counsel for Inglis had previously
explicitly asserted that they did not rely on the
statement in the Land Court), and a number of other
factors set out in a document provided on behalf of
Inglis in the course of hearing the appeal including the
following:
• Darwalla was an adjoining owner;
• Darwalla was in ‘expansion mode’ and for a long
time had practised land banking;
• The earlier approaches to Inglis by Darwalla;
• The proximity of the resumed land to Darwalla’s
processing facilities;
• That the size and physical features of the resumed
land made it suitable for use as part of Darwalla’s
chicken producing operations; and
• Darwalla had paid a premium when purchasing
other sites.6
The state, however, submitted that:
• The evidence was that the last occasion on which
Darwalla had expressed an interest in purchasing
the resumed land was in the late 1990’s. The state