Aronis v Chief Executive, Department of Natural Resources

[2000] QLC 27

LAND COURT

BRISBANE

12 APRIL 2000

Re:     AV99-465 and AV99-466
Appeals against unimproved valuations
Valuation of Land Act 1944
Local Government: BCC-Belmont
Maria Aronis
  v.
  Chief Executive, Department of Natural Resources

D E C I S I O N

The appellant owns properties at 95 and 99 Burn Street, Camp Hill, which were valued by the respondent at $63,000 each as at a relevant date of 1 October 1998. I will refer to these two properties as the "subject properties" or similar. The appellant contends for a valuation of $55,000 in the case of each property and, accordingly, has appealed to this Court. Peter George Aronis, the son of the appellant, appeared and gave evidence in support of the appeals, whilst Ross Brian Cranstoun, a registered valuer, provided evidence in support of the Chief Executive's valuations. By consent of the parties, both appeals were heard together.
Number 95 Burn Street is located on the south-west corner of Burn and Abbott Streets, Camp Hill, and 99 Burn Street, adjoins that corner lot. Both blocks are opposite the Whites Hill Primary School and approximately 200 metres north of the Camp Hill High School. Good access is available from Burn Street to each parcel of land, whilst Abbott Street could provide access to No. 95 if that was required. Both streets have a full-width bitumen sealed carriageway with concrete kerbing and channelling. Both roads are periodically affected by heavy traffic associated with the school. Burn Street and Abbott Street are part of a bus route. Each block comprises an elevated rectangular allotment rising gently to the rear above road level and generally following the topography of Abbott Street, which rises somewhat from its junction with Burn Street. No. 95 Burn Street has an area of 607 m², whilst No. 99 is 617 m² in size.
No. 99 Burn Street is zoned "Residential A" under the Brisbane City Council's Town Plan gazetted on 13 June 1986 and was valued by the Chief Executive as a site for a single dwelling house. The house on that land was in the process of renovation for residential purposes at the time of valuation, though no issue is raised by that fact.
No. 95 Burn Street is zoned "Business" under the Town Plan and was valued by the Chief Executive as a site for a single dwelling house. Mr Aronis raised a concern that there may be difficulties in developing that land for residential purposes, given the zoning and the provisions of the Town Plan. Counsel for the Chief Executive drew attention to s.3(4) of the Valuation of Land Act 1944:
"(4) Notwithstanding anything contained in this section, in determining the unimproved value of any land it shall be assumed that -
(a)the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates; and
(b)such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used;"
The effect of this provision is that, in the case of No. 95 Burn Street, its use for residential purposes is the relevant factor in determining the highest and best use of the land for valuation purposes, notwithstanding the zoning of the land. The Chief Executive has, therefore, proceeded on a sound legal basis in valuing the land as a residential site. I note that there was evidence that this property had been used for some time both as a residence and as a place of business, however, the Chief Executive did not seek to adduce evidence of any value higher than a residential value.
In a document entitled "Opening Statement" Mr Aronis provided a brief history with respect to the two appeal properties, that history focusing on a series of objections against valuations and the outcome of these, together with similar information concerning neighbouring properties. This evidence is of no relevance in determining the present appeals, which raises the question of the value that ought to apply as at 1 October 1998.
In conducting the appeal Mr Aronis raised a number of concerns, which I will set out briefly:
·the presence of an electrical "transformer" in Abbott Street adjoining the property at 95 Burn Street;
· disturbance from the school across the road;
·disturbance from the business property adjoining the rear of the subject lands;
· the shortage of parking, especially in relation to 95 Burn Street.

I will deal with each of these points in order. The "transformer", as it was called in evidence, comprises a relatively large, unattractive electrical device mounted between two timber telegraph poles at the side boundary of 95 Burn Street on the Abbott Street footpath. The poles are located about 1.9 metres from the boundary fence, whilst the elevation of the device is such that it is clearly visible above that fence. Apart from the visual unattractiveness of this "transformer", Mr Aronis said that a potential tenant did raise at one stage the prospect of health implications in association with it. There is another power pole further down Abbott Street and closer to the corner with Burn Street and yet another in Burn Street itself outside the front of No. 95.
Mr Aronis said that apart from the usual noise and activity associated with a school during school hours, there are additional activities carried out at the school across the road from the subject properties, which need to be taken into account. There is a swimming club at the school which conducts its activities at the pool complex, which is located near the boundary of the school where it abuts Burn Street. Swimming activities commence at 5 o'clock each weekday morning and in the evenings swimming can extend to 8 p.m. or even 9 p.m. on occasions. Swimming club activities are sometimes conducted on Saturdays. There are four or five floodlights at the pool complex and the light from these can be seen from the subject properties. Noise emanates from the swimming pool area from of cars arriving and leaving, car doors closing, people talking and the usual yelling and loud hailing associated with the coaching of swimmers.
Whilst the bulk of the traffic associated with the school might be concentrated at the commencing and ending times of the school day, there is additional traffic apart from that associated with the swimming club. That traffic is generated by those attending tai chi and kung-fu classes and "toasters" meetings and such like.
Whilst Mr Aronis conceded that the school is convenient for his own children, he said that generally speaking, whilst people with school-age children might like to be near a school, there is not a preference to be located next to a school.
Abutting the rear boundary of each of the subject properties and fronting Abbott Street is an office building owned and occupied by the Queensland Council of Carers (the "Carers' land"). That land is zoned "Business". The activities carried out in that adjoining building are not matters of concern to the appellant, however, Mr Aronis said that noise coming from the use of the driveway of that property constitutes a disability for both of the subject properties. Access to the Carers' property is provided by a double width driveway which adjoins the rear boundaries of the subject properties. Mr Aronis said that there might be 12 to 13 cars that use that driveway and these vehicles come and go constantly. He said at one stage that the Carers' land was used on a 24-hour basis, however, appeared to resile from that as the evidence proceeded. Mr Cranstoun spoke with the manager of the Carers' property and was told that during her period at that site the activities there were not conducted on a 24-hour basis. The manager had apparently been in her position for about two years. She told Mr Cranstoun that sometimes she worked back late, but that she was the only staff member who would do that and certainly she would not have been there at 2 o'clock in the morning. Mr Aronis had said that "a person might be coming and going at 2 o'clock in the morning". At the time of Mr Cranstoun's visit there were six cars on the Carers' land and he was advised that such cars might move in and out of the site perhaps "a couple of times a day".
Mr Aronis also said that there is a large "Cleanaway" bin on the Carers' land located on the double driveway and that when the truck comes to the site to empty that bin there is an "almighty crash" which, I acknowledge would obviously be disturbing to neighbours. He said also that trucks come to the site from perhaps 6.30 or 7 a.m. to make deliveries and the "beep, beep, beep" of such trucks reversing into the driveway of the Carers' property can be easily heard from the subject properties.
There was evidence that the Queensland Council of Carers had undergone a reorganisation in recent times. Mr Aronis said that during that period, when an administrator had been appointed, visitation to the Carers' property increased as both staff and visitors frequented the site. Mr Cranstoun said that the result of that reorganisation was that a section, which had previously operated from the Carers' land, had relocated therefore reducing the number of vehicle movements. It seems, however, that the relocation of that section occurred some time after the relevant date for valuation purposes.
Some measure of the disturbance from the Carers' property might be taken from Mr Aronis having agreed in cross-examination that the level of vehicle movements would not be as great as that of a real estate agency.
It was suggested to Mr Aronis that the subject properties had the advantage of having a double driveway separating them from the substantial brick building located on the Carers' property and that that separation would be preferable to that building being located abutting the rear boundaries of the appellant's land. He disagreed with that suggestion, saying that it would be preferable to having the building there rather than the vehicle noise.
There are "No Standing" signs in Burn Street near the subject properties which prohibit vehicles standing between 2 p.m. and 4 p.m. on school days. There is a traffic set-down area on the school side of Burn Street. There is a "Stop" sign in Burn Street where it meets Abbott Street, that sign being on the footpath outside the front of 95 Burn Street. Parking on Burn Street is therefore particularly restricted for the property at 95, though there are limitations also that apply to 99.
Apart from the Carers' property referred to earlier, there are commercial properties in Abbott Street and both employees and visitors to those businesses utilise Abbott Street for parking. Mr Aronis said that vehicles park in Abbott Street in the area near the side boundary of 95 Burn Street at such times and densities that it is difficult, if not impossible, for visitors to the subject properties to gain a parking spot there. He said that people arrive as early as 5 a.m., whilst some leave between 3.30 and 5 p.m., though the availability of parking spaces cannot be guaranteed until after 5.30 to 6 p.m. Even then, he said, parking may be difficult in Abbott Street if there is a meeting in the Carers' building. Mr Aronis provided photographs showing vehicles parked in Abbott Street at mid morning on a Monday; a photograph which he said was representative of the parking density there. I note, however, another photograph tendered for other purposes (Exhibit 5B) shows a much lower number of vehicles parked in Abbott Street, though I am not aware of the time or day this photograph was taken.
Mr Cranstoun said that he had no difficulty in gaining a park in Abbott Street at between 3.30 and 3.45 p.m. the day before the hearing and that a number of spaces were available at that time. He said, however, that he had driven past 95 Burn Street via Abbott Street on a number of occasions and was conscious that there had generally been cars parked there.
In support of the suggested valuation figure of $55,000 for each of the subject properties Mr Aronis made reference to two other valuations placed on land by the Chief Executive. The first of these relativity properties is located at Boundary Road, Camp Hill, and comprises a parcel of land having an area of 713 m² and a statutory valuation as at 1 October 1998 of $68,000, according to Mr Aronis' information. The Boundary Road land abuts "Business" zoned land on its side boundary and there are shops located there which were developed in recent times. Mr Aronis said that shops include a hairdresser, a newsagent and a café. Parking is available at the front of these shops in accordance with local authority requirements and, it is Mr Aronis' understanding that few vehicles requiring parking would spill over into Boundary Road. There is no electrical transformer located on the frontage of the Boundary Road land.
Under cross-examination Mr Aronis agreed that the intersection of Boundary Road and Samuel Street, which fronts the shops referred to earlier, is controlled by a set of traffic lights. Traffic stopping and starting at those lights would cause disturbance to the relativity property, however, Mr Aronis said that the "Stop" sign in Burn Street would also have an impact on the subject properties. He agreed also that there were shops on the opposite corner of the intersection from those that he mentioned in his evidence-in-chief, though he added the observation that those shops were not located on "Business" zoned land. That would not be a matter of relevance in my view as the real issue is to do with the environment in which the relevant land is found. Certainly, it was Mr Cranstoun's view that there was more commercial activity around the Boundary Road property than would be found near the subject properties, a view that Mr Aronis conceded.
Towards the rear of the Boundary Road property is a gymnasium. Access is provided to that gymnasium from a back street. A driveway, providing access to the gymnasium car park, abuts the rear boundary of the Boundary Road relativity land. Mr Aronis has not visited the rear of the relativity property, though Mr Cranstoun was able to say that, during the conduct of the investigations for the 1998 valuations, people had complained about noise in the form of music, aerobics, yelling and car movements emanating from the gymnasium. Mr Aronis suggested that as the gymnasium is a besser block building the noise would be contained, however, the evidence of Mr Cranstoun on this point is to be preferred. The gymnasium is about 20 metres from the rear of the premises on Mr Aronis' relativity property, that is a greater distance than is found between the subject properties and the Carers' building. There is therefore a larger buffer area, however, the evidence clearly points to the gymnasium being a greater source of noise than the Carers' building where the noise is sourced from the driveway.
The second relativity property referred to by Mr Aronis is located fronting Old Cleveland Road, Carina. It has an area of 655 m² and the advice to Mr Aronis is that it had a valuation of $58,000 as at 1 October 1998. The Old Cleveland Road land adjoins "Business" zoned land upon which there is an office building which, according to Mr Aronis, would have a similar impact on the relativity property as the Carers' property would have on the subject properties. Mr Aronis said that there were no electrical transformers directly in front of the Old Cleveland Road property, though it did suffer the disability of a large volume of traffic using Old Cleveland Road. He said that from the rear of the relativity property there was an outlook which a residence could take advantage of. There are no limitations on parking at the front of the property.
Mr Cranstoun did not know the relativity property in Old Cleveland Road, however, he pointed out that as the adjoining business use abutted the side boundary of that property, the impact would be greater than in the case of the subject properties where the narrower rear boundaries only were impacted upon. There was some suggestion during cross-examination of Mr Cranstoun that there might have been a driveway separating the Old Cleveland Road relativity property from the building on the adjoining land, however, there was no direct evidence of this. The relativity property is larger than either of the subject properties.
Mr Aronis relied upon the relativity properties at Boundary Road, Camp Hill and Old Cleveland Road, Carina as the bases for the suggested values of $55,000 on each of the subject properties and in so doing stressed two points. First, he said that the relativities properties each adjoin "Business" zoned and used land, whereas the sales relied upon by Mr Cranstoun, which I will come to in due course, do not suffer from that disability. Second, he said that in comparing the relativity lands with the subject properties he employed a method whereby he calculated the value per m² placed on the relativity properties, then derived a value per m² on the subject properties after taking into account the characteristics of the lands being compared. I calculate the value of the Boundary Road relativity as representing $95.37 per m² and the Old Cleveland Road property at $88.55 per m². The figures applied to the subject properties by Mr Aronis were $89.14 per m² for 99 Burn Street and $90.60 per m² for 95 Burn Street. Perhaps he rounded the valuation figures to result at a similar value in each case of $55,000, however, details of the process were not explained to me. I must say that use of the method of valuation which involves a calculation on a value per m² basis in valuing residential allotments has generally not been supported by valuers who have appeared before me. They much prefer a block-to-block comparison and there is good sense in this as a purchaser is generally acquiring a site with all of its attributes including its size when purchasing a residential parcel of land.
Mr Cranstoun said that he thought Mr Aronis' relativity property at Boundary Road, Camp Hill, was valued in correct relationship with the two subject properties. As he did not know the other property at Carina, he was unable to express a view about that property's valuation relationship with the subject properties.
A third relativity property was introduced by Mr Aronis during cross-examination of Mr Cranstoun. This property is located at 38 Brooks Street, Camp Hill, and comprises a vacant block of land, which is presently for sale at a price apparently in excess of $110,000. Mr Cranstoun recalls that property having sold "a couple of years ago for about $70,000" and the Chief Executive has placed a valuation of $63,000 on that land as at 1 October 1998. Apart from evidence that there is no electrical transformer in front of that property, no detailed comparison was provided in evidence.
I now turn to discuss the valuation evidence provided by Mr Cranstoun. He said that he was aware of the various disabilities of the subject properties as described by Mr Aronis and that he had taken them into account in his valuation. Mr Cranstoun relied on three sale transactions in his valuation. Sale 1 is located at 81 Clara Street, Camp Hill. It has an area of 368 m² and sold on 25 June 1998 for $76,000. Mr Cranstoun deducted $1,300 for clearing and fencing, to produce an unimproved figure of $74,700, whilst the Chief Executive's valuation as at 1 October 1998 was $68,000. In his valuation report Mr Cranstoun presented a comparison between this sale property and the subject properties in these terms:
"Superior location, being residential neighbours and less school traffic.
Smaller area; steeper slope below street level.
Overall, this sale is considered to be superior to the subject due to superior location."

That comparison was put to Mr Aronis who largely agreed with it, though when I review the evidence overall it is not clear to me that Mr Aronis had in mind the same property referred to by Mr Cranston. He thought, for example, that the sale property was on the higher side of Clara Street and had views towards the city, whereas oral evidence from Mr Cranstoun and a contour map indicated that Mr Aronis was wrong in these two regards. Nevertheless, there was some evidence from Mr Aronis concerning this sale which is of relevance. The points raised were:
- Clara Street, whilst a through street, does not connect directly to Old Cleveland Road and apparently is not a bus route.

There is a better standard of property in the Clara Street area.

Neither of these points is in dispute with those put forward by Mr Cranstoun with respect to his Sale 1. In addition to these points Mr Aronis made reference to a range of improved sales, though in the end that evidence had greater application to his submissions concerning the Sale 3 referred to by Mr Cranston at 50 Ara Street, Camp Hill. I will come to that shortly, however, will first introduce some of these improved sales.
The first of these is a sale at 66 Burn Street, which was reported in "The Courier-Mail" of 26 June 1999 as selling at $105,500. Mr Aronis described the property as a two bedroom house with a sleepout. There was also a sale of a house and land at 133 Burn Street in late 1998 at a price of $95,000, though no documentary evidence in support of that sale was provided. That is not a matter of concern to me, given what I say later in these reasons. Mr Aronis had mentioned to a valuer from the respondent's Department during an earlier valuation than the one the subject of these appeals, and had mentioned to him the sale of a property at 94 Burn Street, Camp Hill. According to Mr Aronis the sales at 66 Burn Street and 133 Burn Street support the selling price of $102,000 for that earlier sale.
Mr Aronis referred to a sale of a property at 103 Burn Street, which he understood would have sold for $139,000 or less. He also provided an extract from "The Courier-Mail" of 26 June 1999 recording the sale of a property at 28 Burn Street for $129,000. Conflicting evidence in the form of a real estate auction flier included a note, apparently written by Mr Aronis, to the effect that the property at 28 Burn Street had sold at auction on 13 November 1999. Mr Aronis orally confirmed that sale date. He said that the sale property is located on the higher end of Burn Street, has no parking disabilities nor school traffic or bus noise of the type experienced by the subject properties. He also provided evidence from "The Courier-Mail" (undated) showing the sale of a two bedroom house and land at 28 First Street, Camp Hill for $120,500 and a real estate flyer offering the property at 141 Burn Street for sale at $153,000. That property has been on the market for six to eight months.
Mr Aronis referred to the above improved sales and offer as evidence indicating the level of values in the area of the subject properties. As a contrast he provided evidence of a sale at 39 Clara Street, Camp Hill, of a three bedroom house and land for $145,000 ("The Courier-Mail" 4 December 1999); 84 Arrol Street, Camp Hill, three bedroom timber home for $130,000 ("The Courier-Mail" 28 August 1999); and 42 Hobart Avenue, Camp Hill, three bedroom highset home for $130,000 ("The Courier-Mail" 2 October 1997). Arrol Street and Hobart Avenue are in the vicinity of Clara Street.
The improved sales selected by Mr Aronis were relied on to support the proposition that the property at 81 Clara Street relied upon by Mr Cranstoun is in a "superior location" to the subject properties - language included in Mr Cranstoun's report.
Mr Cranstoun's Sale 2 is located at 59 Bernecker Street, Carina. It has an area of 323 m² and sold on 24 April 1998 for $66,000. Mr Cranstoun analysed that sale to an unimproved figure of $65,000 and the Chief Executive's valuation of that land as at 1 October 1998 was $61,000. In his comparison between that sale property and the subject properties Mr Cranstoun said:
"Superior location, being residential neighbours and less traffic.
Smaller area; lower elevation; similar slope.
Overall, this sale is considered to be inferior to the subject due to smaller area."

In oral evidence Mr Cranstoun made particular mention of the small area of the sale land and noted also that the sale property is separated from Creek Road, which is a busy and noisy thoroughfare by only four allotments and a narrow driveway. Unfortunately, Mr Aronis had no knowledge of the Sale 2 property.
Mr Cranstoun's Sale 3 is to be found at 50 Ara Street, Camp Hill and has an area of 607 m². The land sold on 15 June 1998 for $107,000 and after the deduction of $1,500 for clearing and fencing an unimproved figure of $105,500 resulted. The Chief Executive applied a value of $95,000 to that land as at 1 October 1998. Mr Cranstoun compared the sale property to the subject properties in this way:
"Superior location, being residential neighbours and less traffic.
Similar size & shape. Higher elevation; Steeper slope below street level; good outlook of suburbia.
Overall, this sale is considered to be superior to the subject due to location and outlook."

Mr Aronis provided a newspaper photograph of the house constructed on the sale land since its purchase in June 1998. He understands that the house and land at 50 Ara Street sold for a price in the vicinity of its asking price of $349,000. He provided, also, a newspaper clipping which included a photograph of a property at 43 Ara Street, Camp Hill. The photograph showed a substantial two-year-old house on an elevated 728 m² parcel of land which was for sale for $435,000. The newspaper item said, "The home has superb City and Gateway views". Mr Aronis said that the housing standard demonstrated by the photographs of the properties at 43 and 50 Ara Street demonstrates that area to be substantially superior to the Burn Street location of the properties the subject of these appeals. That is not a proposition disputed by Mr Cranstoun.
There is, however, one point of apparent difference between the parties with respect to the property at 50 Ara Street. Mr Aronis described that property as having "city views", yet, during cross-examination, agreed with Mr Cranstoun's description of the property providing "good outlook of suburbia", not "city views". Notwithstanding this apparent admission, he then proceeded during cross-examination of Mr Cranstoun to suggest to him that there were, indeed, city views available from the land. Given the earlier agreement by Mr Aronis of the outlook available from the property, I must conclude in favour of the description provided by Mr Cranstoun. Indeed, I notice in the real estate agent's advertisement of the 50 Ara Street property once developed with a four bedroom house, that no mention is made of views. The outlook that is available was facilitated, to some extent, by the addition of substantial fill to the land.
Mr Aronis was critical of Mr Cranstoun for selecting his Sales 1 and 3 because of their superiority to the subject properties. Unfortunately, all that a valuer can do is to take from the marketplace the evidence that is available and in the instant case Mr Cranstoun has not been shown to have ignored sales exhibiting greater comparability in favour of less comparable sales. In his criticism Mr Aronis does not include mention of Sale 2 at 59 Bernecker Street which, as I have said, was a property that he did not know. That sale is of particular importance, however, as it provides what I would describe as a "floor" indicator of value. If one has regard to Sale 1 at 81 Clara Street as providing the "ceiling", then it is clear that the value of the subject properties sits somewhere between the values indicated by those sales. I do not put Mr Cranstoun's Sale 3 completely out of mind, however, it seems to me to be more of a supporting sale, particularly with respect to his Sale 1. What Mr Cranstoun has done is to place a value on the subject properties between the values shown by his Sales 1 and 2, but closer to that shown by the Bernecker Street sale. I think on all the evidence that I heard, his approach has not been shown to be wrong on principle, nor to be unsupported by the evidence.
The relativity properties referred to by Mr Aronis suffer in that they neither provide the bracketing of values supplied by Mr Cranstoun's Sales 1 and 2, nor, in fact, are they sales. Relativities are arrived at following the Chief Executive's consideration of sales, therefore are not evidence of what the market perceives as value, but are one step removed from that. They are opinions probably based on sales.
"Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fischer v. The Valuer-General (1983) QLCR 44, at 46). (R and MM Barnwell v. The Value-General (1989) 13 QLCR 13, at p.16 and cases cited in it." (per Land Appeal Court in H & E Grahn v. The Valuer-General (1992) 14 QLCR 327 at 328.)

In addition to the evidence mentioned thus far, I have also considered the evidence of valuations placed by the Chief Executive on lands in Burn Street in the block between Abbott and Fred Street. I notice that the two parcels of land the subject of these appeals are valued at figures $7,000 below the next lowest block, which was valued at $70,000 and that other blocks in the street are valued at $73,000 excepting for the corner block at Fred Street, which has a value of $83,000 applied to it. These valuations represent a consistency with the evidence provided in this hearing and tend to support the proposition that Mr Cranstoun has taken into account the disabilities of the subject properties. His valuation ought not to be disturbed. The appeals are dismissed and the valuations of the Chief Executive are affirmed.

RP SCOTT

MEMBER OF THE LAND COURT

[2000] QLC 27

12 April 2000