Valuers in Compulsory Acquisition Compensation - Advice from the L&E Court

The Land and Environment Court in NSW recently provided helpful guidance concerning the role of the valuer and valuation evidence in compulsory acquisition compensation disputes that is relevant for both valuers and instructing parties [1].

In the Eddie Arnott case, the dispossessed applicant commissioned a valuation of his strata title dental surgery in the Hunter Connection in the Sydney CBD, which was compulsorily acquired on 2 September 2022.

While the valuation report was filed and served in Court, during the hearing of evidence the dispossessed applicant advised the Court that his valuer was not available for joint conferencing or for cross-examination - accordingly, the Court declined to admit the valuation report into evidence.

Lesson: To get maximum benefit from a valuation report, the instructing party should ensure that the valuer is available for joint conferencing and for cross-examination in Court.

During the hearing, the dispossessed applicant then endeavoured to provide valuation evidence to the Court himself which the Judge did not accept, noting that such matters ought properly to be the subject of expert evidence.

Lesson: In order to rely on a valuation report as valuation evidence, the instructing party should ensure that the valuer is in Court to give evidence.

For valuers, the Court also provided helpful guidance on the comparable sales method of valuation and the capitalisation of income method of valuation. Concerning comparable sales, the Court emphasised the need for an established list of comparable sales to be relied upon which should not change during the hearing (presumably except where other directly relevant comparable sales come to light during the hearing). Further, the Court emphasised the orderly inspection of comparable sales on an agreed schedule.

Yet again, building on previous decisions over the last decade, the Court accepted the accumulation, analysis, adjustment and application steps in the process of valuation by reference to comparable sales.

Lesson: Valuers using the comparable sales method of valuation should ensure that they adopt the accumulation, analysis, adjustment and application steps favoured by the Court.

Finally, while the Court provided helpful guidance on the steps to be adopted in the capitalisation of income valuation method, it should be borne in mind that this was in the context of a 36sqm strata title property. In addition, we note that it is important to maintain consistency between the adjustments made to the sales evidence and those made to the subject property in order to enhance the accuracy of the valuation.

 [1] The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 4) [2025] NSWLEC 103