Property and Real Estate Gazette (2nd edition)

8 / 44

6 Property and Real Estate Gazette
therefore argued that Darwalla’s interest in the
land had ceased by the date of the resumption
due to factors such as the unavailability of water
from underground water sources and the cost of
connecting to the local authority’s water supply
system;
• There was no factual support (or at least insufficient
support) for the assertion that Darwalla would
definitely have purchased the resumed land for
$2.9 million, if it had been available for purchase at
the date of resumption; and
• The Land Court was correct to find that the
resumed land should not be valued by reference to
its potential for use for the expansion of Darwalla’s
operations.7
The court highlighted that there were a number
of propositions, identified in various authorities
considered,8 which were relevant to the appellant’s
case including:
• In determining the market value of resumed land at
the date of resumption, any potentiality of the land
is to be taken into account (even where it is only
of value to one purchaser, such as an adjoining
owner);
• Offers to purchase the land by an adjoining owner
can demonstrate that owner’s interest, and that
the land has a special value to that owner – the
evidence of those offers is not, however, essential;
• In order to be relevant, factors which would lead
to a conclusion that an adjoining owner would pay
more than ‘market value’ at the relevant date must
be among the information available at least to the
land owner; and
• In determining the significance of such interest,
regard should be had to the possibility that the
adjoining land owner might never require the land
to take advantage of its special potentiality, or might
not require it for that purposes, for a considerable
time.9
The Land Appeal Court rejected Inglis submissions
holding the evidence did not sufficiently demonstrate
whether Darwalla’s potential interest would have
resulted in an increased value. The premium calculated
by Inglis’ valuer was based upon an assumption it
would have been used for poultry farming in the short
term. The Land Appeal Court reasoned that although
Darwalla may have shown an interest in the land, there
was insufficient evidence to show Darwalla would
have expanded onto the land in the immediate short
term for poultry farming. The court made reference to
Darwalla’s previous conduct of acquiring land for ‘land
banking purposes’ but concluded that the evidence had
not shown that there was a real prospect that Darwalla
would pay above market value for that purpose.
The Land Appeal Court therefore concluded the
premium calculated by the appellant’s valuer was not
applicable to such a purchase.
State – Evidence of valuer
The state submitted the Land Court erred by dismissing
the valuation assessments of the state’s valuer. The
state’s valuer assessed the value of the land based
upon the sale value of properties within the immediate
vicinity of the resumed land, and indexed the value to
the appropriate year. The approach was characterised
by the Land Court as an error at the commencement of
the valuation process which could not be relied upon.
The LandAppeal Court held the state failed to establish
the Land Court was in error. The Land Appeal Court