Arthur v Chief Executive, Department of Natural Resources
[1997] QLC 154
•19 September 1997
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BRISBANE
19 SEPTEMBER 1997
Re: AV96-795
An appeal against a determination of unimproved valuation -
Valuation of Land Act 1944 -
Local Authority: Barcaldine Shire Council
V.L. Arthur
v.
Chief Executive, Department of Natural Resources
(Hearing at Barcaldine)
D E C I S I O N
Mrs V.L. Arthur is the owner of land in the Town of Barcaldine described as Lots 2, 4, 6, 8 and 10 on Registered Plan 606109, Parish of Barcaldine, containing 5.324 ha.
The land is located on the eastern fringe of the built-up area of Barcaldine about 1.4 km in a direct line from the Post Office. Lot 10 fronts an unnamed road and is about 200 metres south of the Capricornia Highway. The unnamed road is unformed other than as an earth track with difficult egress off the highway. The primary access is gained via another earth track off Yew Street thence through Council-owned land for a distance of about 200 metres towards the south-west corner of Lot 10. There is a surveyed road as the eastern boundary of Lot 2, but again that road is unformed. No surveyed access is provided to Lots 4, 6 or 8.
The aggregated parcel comprises the balance area of five original rectangular shaped lots from which land was resumed many years ago in connection with a proposal (which never eventuated) for the provision of an east-west runway extension to the Barcaldine Aerodrome. The residual aggregation is of truncated triangular shape about 500 metres in length from west to east, reducing in width from about 160 metres at the western boundary of Lot 10 to about 50 metres at the eastern boundary of Lot 2.
The land is vacant and is zoned "Town" under the relevant Town Plan. It is designated "Industrial" in the Strategic Plan attaching to the Town Plan.
Land immediately to the north comprising five lots each of 1.619 ha is vacant. A Council Works Depot is opposite to the west and there is a fuel depot on the highway frontage to the north-west. The Barcaldine Aerodrome runways are located to the south of the land which is within the main flight path. The residential area of Barcaldine extends easterly to within about 400 metres of the subject land.
As at 1 January 1996 the unimproved value of the subject land had been initially assessed as being $35,800 which valuation was reduced on objection to $29,000. An appeal was lodged against that reduced amount on the grounds that the valuation was excessive and "not supported by any sale of comparable land during the valuation period. Attributes of the land have not been taken into account." The owner's estimate of the unimproved value was $14,000. After the matter had been set down for hearing the valuation was further reviewed and reduced under the provisions of s.68 of the Valuation of Land Act 1944 to $20,000.
It is the amount of $20,000 against which the appeal now lies.
Mrs Arthur was represented at the hearing by Mr C.V. Dyer, a registered valuer in private practice. He tendered a written valuation in the amount of $13,500 rounded from a calculation based on $2,500 per ha. Mr Dyer held the opinion that the highest and best use of the land was for development as a hectarage homesite. Based on his analyses of sales of three rural residential sites he had formed the opinion that a fully serviced site with good location and formed access would be worth $5,000 per ha. However, with consideration given to the lack of formed access and connected services and the poor location of the subject land adjacent to an airport and fuel depot and affected by flight path height restrictions on development, he discounted the hectarage rate by one-half to the adopted $2,500.
Brief details of the three sales which he had investigated are as follows:
1.An 8.702 ha site in Bloodwood Drive in a rural residential estate with formed earth roads, electricity and water connection on the western outskirts of the town but further removed from the town centre than the subject, sold according to Mr Dyer in December 1995 for $40,750 as a vacant site showing $4,683 per ha.
2.A 5.5 ha site described as a "vacant rectangular shaped rural residential allotment" in Sandalwood Drive in the same locality as his Sale 1, with earth road, electricity and water connected, sold in March 1995 for $32,000 showing $5,818 per ha.
3.A 2.023 ha site described as a "vacant rural-residential site to the south-west of town" (about 12.5 km) sold in July 1996 for $10,000 or $4,943 per ha. Mr Dyer felt that the location of the land near a river weir, had been a significant influence on the sale price. Mr Dyer had at first understood there to be power and water available to that site.
Mr D.P. Jones, a registered valuer employed by the Department of Natural Resources, took responsibility for the valuation appealed against. His evidence was that the original valuation had been based on the "Industrial" Strategic Plan designation but then reduced on objection "to bring it back to a homesite level given limited industrial demand". The further reduction had been made "to resolve the height restrictions on building over sections of the subject that are in the aerodrome flight path in accordance with State Planning Policy 2/92 - Planning for Aerodromes and other Aeronautical Facilities". Mr Jones pointed out that "commercial flights are limited to three times per week" and there are existing lowset buildings, including a dwelling "in the same arc of the flight path". It had been established that maximum allowable height of any potential obstacle in the flight path along the southern boundary of the subject lands, ranged from 3.1 metres on Lot 8 to 9.7 metres on Lot 10 there being no restriction on Lot 2.
Mr Jones had taken the view that while the land had future potential for industrial use, its highest and best use at the date of valuation was for development with a single dwelling. It was his understanding that the access over the Council Depot land would not be denied, for if it was, the Council would then have to provide access off the highway along the surveyed road.
Neither Mr Dyer nor Mr Jones had established the actual cost which would be involved in connection of water and electricity to the land. There seemed to be general agreement that the cost of a private water connection would have been about $750 and Mr Jones offered the opinion that electricity extension could cost about $3,000.
Mr Jones' investigation of the sales evidence was much more thorough than that of Mr Dyer. Mr Jones was aware that there had been a dwelling/shed structure on Mr Dyer's Sale 1 and he did not analyse that sale because of the existence of improvements. Counsel for the respondent during cross-examination of Mr Dyer had tendered a copy of a Notification of Change of Ownership which contained the parties' apportionment of the sale price as being $22,750 for the improvements and $18,000 for the land. Mr Dyer had not been aware of the existence of the structure at the date of sale and could not argue any knowledge to the contrary. He had assumed the land to have been vacant at the date of sale.
Mr Jones' primary basis of valuation was obtained from the Sales 2 and 3 of Mr Dyer. Sale 2 of Mr Dyer had been analysed by Mr Jones however to show an unimproved value of $26,700. A valuation of $23,800 had been applied to that land at the relevant date. That valuation had represented a 40% increase on the previously existing valuation. Sale 3 of Mr Dyer had been analysed by Mr Jones to show an unimproved value of $8,500 and a valuation of $8,000 had been applied. That valuation also represented an increase of 40% over the previously existing valuation. According to Mr Jones that sale land had no town water available and although electricity was available, it had not been connected and was further removed from the site than from the subject land.
Mr Jones had calculated the rate per ha resulting from the valuations applied to the sale lands as being $4,327 and $3,955 respectively. He considered that Mr Dyer's Sale 2 was, in comparison with the subject land, of "inferior location to town and zoning" (rural) but with superior access and homesite outlook and amenity as well as having superior services. In his opinion that sale land was "overall similar as homesites except for restrictions on building placement on subject". Mr Jones placed heavy emphasis on the superior location, in his opinion, of the subject land.
The second sale (Mr Dyer's Sale 3) in Mr Jones' opinion, being 12.5 km south of Barcaldine on the Isisford Road had far inferior location to town, a lesser rural zoning and no option to connect to town water. (It was his evidence however that while that sale land had no licence to pump from the nearby river, the adjoining land did in fact have such a licence. Mr Dyer was not sure of the potential to obtain a water supply from the river). In comparison with the subject land, Mr Jones described that sale land as "overall inferior in every respect and its smaller size also limits building site options".
Secondary to his primary basis, Mr Jones had also considered the sale of a residential lot of 2,833 m² situated in Gidyea Street, in October 1995 showing an analysed unimproved value of $11,000. A valuation of $10,500 had been applied to that land (an 11% increase over the previous valuation). Although described as "overall far inferior to subject due to size", Mr Jones clearly had little regard to that sale due to the difficulty in comparison with the unserviced much larger subject site.
In the end result Mr Jones' valuation was calculated as:
5.325 ha in five adjoining allotments @ $3,800/ha = $20,231 - Adopt $20,000.
Mr Jones had seen fit to make the comment that the previous valuation of the subject land had been $14,000 and the current value represented a 42% increase on that valuation while the average increase for the town was in the order of 40%.
The "average" increase in applied valuations over the previous valuation of lands in Barcaldine is not considered relevant or of any support to the valuation appealed against. Indeed, the details relevant to Mr Jones' third sale (in Gidyea Street) indicated a wide range of increase in values had occurred within the town.
Findings
Mr Dyer's evidence in this matter relative to his investigation of the sales evidence left much to be desired. Nevertheless, while I accept Mr Jones' analyses of Mr Dyer's Sales 2 and 3, I have formed the opinion that Mr Jones has placed too much weight on the proximity of the subject land to the town centre and too little on the disabilities of the land. The subject land is clearly within an area which, apart from its proximity to the town centre, has nothing to recommend it for residential use. The immediate locality is of an industrial nature, adjacent to the aerodrome and industrial depot type developments. The land is in the immediate flight path of the main aerodrome runway albeit a runway with limited commercial use. Vehicular and pedestrian access to the land is poor and unlikely to be improved. No services are connected and the cost of connection whilst unknown would seem to be significant in terms of the capital value of the land.
The evidence is that there was no demand for industrial land of the nature of the subject land as at the relevant date. Both valuers agree that the highest and best use needs to be considered relative to potential as a single dwelling development.
This is a case, in my opinion, where considerable doubt should realistically have existed as to the market value of the land as at the date of valuation. That doubt should be expressed in favour of the appellant for I accept that the grounds of appeal have been proved.
Doing the best I can on the state of the evidence, I will adopt a site value for the aggregation of $16,000.
The appeal is allowed and the determination of the chief executive set aside accordingly.
RE WENCK
MEMBER OF THE LAND COURT
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